    [Senate Hearing 106-221]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 106-221

                    DEPARTMENT OF TRANSPORTATION AND RELAT-
                ED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2000

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

                                    HEARINGS

                                    before a

                              SUBCOMMITTEE OF THE

                COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                           ONE HUNDRED SIXTH CONGRESS

                                 FIRST SESSION

                                       on

                               H.R. 2084/S. 1143

     AN ACT MAKING APPROPRIATIONS FOR THE DEPARTMENT OF TRANSPORTATION AND
    RELATED AGENCIES FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2000, AND FOR
                                 OTHER PURPOSES

                                   __________

                          Department of Transportation
                           General Accounting Office
                National Railroad Passenger Corporation (Amtrak)
                           Nondepartmental witnesses

                                   __________

             Printed for the use of the Committee on Appropriations

     Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                     senate

                                     ______

                         U.S. GOVERNMENT PRINTING OFFICE
    63-324 CC                    WASHINGTON : 1999
    _______________________________________________________________________
                For sale by the U.S. Government Printing Office
    Superintendent of Documents, Congressional Sales Office, Washington, DC
                                     20402
                               ISBN 0-16-059717-X

                          COMMITTEE ON APPROPRIATIONS

                         TED STEVENS, Alaska, Chairman
    THAD COCHRAN, Mississippi            ROBERT C. BYRD, West Virginia
    ARLEN SPECTER, Pennsylvania          DANIEL K. INOUYE, Hawaii
    PETE V. DOMENICI, New Mexico         ERNEST F. HOLLINGS, South Carolina
    CHRISTOPHER S. BOND, Missouri        PATRICK J. LEAHY, Vermont
    SLADE GORTON, Washington             FRANK R. LAUTENBERG, New Jersey
    MITCH McCONNELL, Kentucky            TOM HARKIN, Iowa
    CONRAD BURNS, Montana                BARBARA A. MIKULSKI, Maryland
    RICHARD C. SHELBY, Alabama           HARRY REID, Nevada
    JUDD GREGG, New Hampshire            HERB KOHL, Wisconsin
    ROBERT F. BENNETT, Utah              PATTY MURRAY, Washington
    BEN NIGHTHORSE CAMPBELL, Colorado    BYRON L. DORGAN, North Dakota
    LARRY CRAIG, Idaho                   DIANNE FEINSTEIN, California
    KAY BAILEY HUTCHISON, Texas          RICHARD J. DURBIN, Illinois
    JON KYL, Arizona
                       Steven J. Cortese, Staff Director
                     Lisa Sutherland, Deputy Staff Director
                   James H. English, Minority Staff Director
                                     ------

              Subcommittee on Transportation and Related Agencies

                      RICHARD C. SHELBY, Alabama Chairman
    PETE V. DOMENICI, New Mexico         FRANK R. LAUTENBERG, New Jersey
    ARLEN SPECTER, Pennsylvania          ROBERT C. BYRD, West Virginia
    CHRISTOPHER S. BOND, Missouri        BARBARA A. MIKULSKI, Maryland
    SLADE GORTON, Washington             HARRY REID, Nevada
    ROBERT F. BENNETT, Utah              HERB KOHL, Wisconsin
    BEN NIGHTHORSE CAMPBELL, Colorado    PATTY MURRAY, Washington

                                     Staff

                                 Wally Burnett
                                 Joyce C. Rose
                                  Paul Doerrer
                            Peter Rogoff (Minority)

                                C O N T E N T S

                                  ----------

                          Thursday, February 25, 1999
      Oversight Hearing on Department of Transportation Management Issues

                                                                       Page
    General Accounting Office........................................     1
    Department of Transportation: Office of Inspector General........     1
    Department of Transportation.....................................     1

                            Thursday, March 4, 1999
         Fiscal Year 2000 Department of Transportation Budget Overview

    Department of Transportation: Office of the Secretary............   107

                           Wednesday, March 10, 1999
                     Amtrak Finance and Operational Issues

    National Railroad Passenger Corporation (Amtrak).................   161
    Department of the Transportation: Office of Inspector General....   161

                            Tuesday, March 23, 1999
              Federal Aviation Administration Budget and Programs

    Department of Transportation: Federal Aviation Administration....   249

                            Thursday, March 25, 1999
                        Coast Guard Budget and Programs

    Department of Transportation: U.S. Coast Guard...................   315

        Material Submitted by Agencies Not Appearing For Formal Hearings

    Department of Transportation:
        Amtrak Reform Council........................................   367
        Federal Railroad Administration..............................   374
        Federal Transit Administration...............................   474
        National Highway Traffic Safety Administration...............   568
        Research and Special Programs Administration.................   598
        Surface Transportation Board.................................   657
    Nondepartmental witnesses:
        Aviation-related testimony...................................   693
        Highway-related testimony....................................   707
        Rail-related testimony.......................................   730
        Transit-related testimony....................................   743
        Highway safety-related testimony.............................   785
        Hazardous materials and pipeline-related testimony...........   787
        U.S. Coast Guard-related testimony...........................   796

     DEPARTMENT OF TRANSPORTATION AND RELATED AGENCIES APPROPRIATIONS FOR
                                FISCAL YEAR 2000

                                  ----------

                          THURSDAY, FEBRUARY 25, 1999

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:00 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Richard C. Shelby (chairman)
    presiding.
        Present: Senators Shelby, Stevens, and Lautenberg.

      OVERSIGHT HEARING ON DEPARTMENT OF TRANSPORTATION MANAGEMENT ISSUES

                           GENERAL ACCOUNTING OFFICE

    STATEMENT OF JOHN H. ANDERSON, JR., DIRECTOR,
                TRANSPORTATION ISSUES

                          DEPARTMENT OF TRANSPORTATION

                          Office of Inspector General

    STATEMENT OF KENNETH M. MEAD, INSPECTOR GENERAL

                          DEPARTMENT OF TRANSPORTATION

    STATEMENT OF PETER J. BASSO, ASSISTANT SECRETARY,
                BUDGET AND PROGRAMS

                 OPENING STATEMENT OF SENATOR RICHARD C. SHELBY

        Senator Shelby. The committee will come to order. This
    oversight hearing of the Subcommittee on Transportation
    Appropriations will come to order, as I have said. I want to
    extend a welcome to the first hearing held by the subcommittee
    on transportation in 1999.
        This morning's hearing has a different focus than most
    hearings held by this committee. Normally, the Appropriations
    Committee responds to the administration's budget proposal with
    a series of hearings and submitted record questions that are
    designed to get more information about the budget, to compare
    the new request to ongoing efforts by the administration, and
    to justify new initiatives proposed by the President. This
    information helps the committee make informed decisions as it
    develops appropriations legislation.
        However, there is another side to the responsibilities of
    the Appropriations Committee: oversight of the Federal agencies
    that we fund. It is imperative to ensure that Federal taxpayer
    dollars are spent wisely and well.
        Proper management of Federal funds cannot be taken for
    granted. That is why Federal agencies have inspectors general
    to audit and to investigate agency management and detect cases
    of fraud, waste, or abuse. The General Accounting Office, an
    investigative arm of the legislative branch, performs audits
    and evaluations of Government programs and activities, often at
    the direction of Congress.
        Today we are joined by John Anderson, Director of
    Transportation Issues at GAO; Ken Mead, the Department of
    Transportation Inspector General. Welcome. Both GAO and the IG
    have published recent reports on management issues at the
    Department of Transportation. And the Department is represented
    this morning by Assistant Secretary of Budget and Programs,
    Jack Basso, who will respond to the concerns raised in these
    reports and tell us how DOT is addressing its management
    challenges.
        The December 9, 1998, Inspector General report titled the
    Top Ten Management Issues at the Department of Transportation
    sets out 10 top priority management issues, of which 5 are
    aviation related. This skew toward the Federal Aviation
    Administration gave me pause. Does this mean that the FAA is a
    more troubled agency than the Federal Highway Administration or
    the Coast Guard?
        I want to explore that further, but I would point out that
    the Federal Government is much more directly involved in
    commercial air transportation than it is in other modes of
    travel. Every air traffic control tower is staffed by Federal
    employees. Every plane is inspected by FAA inspectors and
    technicians. Every aviation policy decision is made at the
    Federal level, and every airport is built in part with tax
    dollars that are distributed by the Federal Government. There
    is no parallel to this level of Federal interest and control in
    the highway, marine, rail, or transit arenas. So, perhaps the
    number of management issues cited by the IG is not
    disproportionate, considering the level of Federal investment
    and interest.
        Both the GAO and the IG reports cite aviation safety and
    security as priority management issues. In fact, the Inspector
    General lists aviation safety as its first priority management
    issue. Department-wide transportation safety is the number one
    strategic goal, safety in all modes of transportation, air,
    surface, and water. It must be noted that flying is
    immeasurably safer than any other mode of transportation,
    however. Highway fatalities claim more than 40,000 lives
    annually, an average of 110 people every day. Rail and transit
    accidents account for an additional 850 lives lost each year.
    But by comparison in 1998, there were no deaths, zero, on a
    major U.S. air carrier or commuter plane.
        However, once again, we are comparing very different
    systems. By and large, highway safety is enforced at the State
    and local level; aviation safety is enforced at the Federal
    level. I think it would be appropriate and helpful to this
    committee to explore the role of the Federal Government in
    highway and rail safety, to ensure that the management of these
    safety programs is as effective as possible.
        Another management issue highlighted by both GAO and the IG
    is Amtrak's financial condition. In November 1998, an
    independent assessment of Amtrak's financial requirements was
    published, as required by the Amtrak Reform and Accountability
    Act. The Inspector General's office closely monitored the
    assessment process and probably has the clearest view of
    Amtrak's current financial condition and of whether the
    projections on which the railroad has based its plan to reach
    self-sufficiency by 2002 are realistic and achievable. The GAO
    has prepared many reports on Amtrak's financial and operating
    performance, including the May 1998 report on the financial
    performance of Amtrak's 40 routes nationwide, which showed that
    Amtrak's operating expenses far outstrip its revenue. In fact,
    only one route, the Metroliner, actually makes a profit, and
    overall Amtrak's expenses are almost twice as great as its
    revenues. This is a management issue, a labor issue, and a
    political issue, and it is an issue that has cost the American
    taxpayers over $22.5 billion over the last 27 years.
        There are many other issues that require close oversight by
    the appropriations subcommittee. For instance, both the IG and
    GAO have concerns about the serious challenges faced by FAA in
    making its computer systems ready for the year 2000. However,
    Chairman Stevens has held two full committee hearings on this
    topic, and my staff have been involved with them. In addition,
    there will be a follow-up subcommittee hearing with FAA where
    we will address the Y2K issues.
        Last October, the Omnibus Consolidated Appropriations bill
    provided $343 million in supplemental funds to the U.S. Coast
    Guard for anti-drug efforts, primarily interdiction. This is a
    lot of additional funding for the country's smallest armed
    force. And I want to find out more about how this funding will
    be spent, especially since this is a multi-agency program, of
    which the Coast Guard represents only a small part. How are
    operational and funding decisions made at the Office of
    National Drug Control Policy? What is the level of coordination
    among the affected agencies? These are management issues that
    could have direct bearing on future funding decisions.
        I believe oversight is an important part of the
    Appropriations Committee's responsibilities. The committee
    allocates Federal funds based on informed decisionmaking. This
    requires a close examination of the administration's budget and
    oversight of how funds, once allocated, are managed. I hope
    that today's hearing will help us better perform this duty by
    exploring together some management challenges that have been
    raised by both the executive and legislative branch
    investigative bodies.

                    STATEMENT OF SENATOR FRANK R. LAUTENBERG

        Senator Shelby. Senator Lautenberg.
        Senator Lautenberg. Thanks very much, Mr. Chairman. Let me
    commend you for your timely start. I think you beat the clock
    by 36 seconds. I wonder whether the chairman of the committee's
    presence had anything to do with it.
        Senator Shelby. It is always a little nudge when we observe
    the chairman here.
        Senator Lautenberg. Thank you, Mr. Chairman, for using this
    opportunity to conduct appropriate oversight of the management
    challenges facing our Department of Transportation.
        Now, many of the issues that we are discussing this morning
    are not new to the subcommittee, issues such as the need to
    improve our air traffic control infrastructure, improve the
    Department's data collection efforts, better ensure safety on
    our highways and at our airports, and still it is not often
    that we have the opportunity to review these issues in adequate
    detail, especially once we turn our attention to the details of
    the President's budget request for each of the offices within
    DOT.
        Today we look forward to the testimony from representatives
    of the office of the Inspector General and the General
    Accounting Office, along with our Assistant DOT Secretary for
    Budget. The IG and the GAO have, over the years, provided an
    invaluable service to the subcommittee by auditing and
    reporting on a great many issues regarding the management of
    DOT and the effectiveness of its programs. And in that regard,
    their findings are valuable not only to us, but also to the
    Secretary and his sector administrators.
        Within the last couple of years, both the IG and the GAO
    have had critical things to say about the Federal Highway
    Administration's Office of Motor Carriers. The OMC is our
    principal agency for maintaining safety and enforcing
    regulations pertaining to trucks and buses.
        Unfortunately, Mr. Chairman, I report that over the recent
    holiday, in just a 5-day period, we had three serious bus
    accidents in the State of New Jersey. One of those accidents,
    which took place on Christmas Eve, resulted in eight
    fatalities, as well as dozens of serious injuries. A review of
    the circumstances surrounding the bus company and the bus
    driver involved in this accident is instructive in
    understanding why we need a stronger and more effective Office
    of Motor Carriers.
        In April 1996, the OMC performed a compliance review on the
    bus company in question. The name of the company is the Bruin
    Transportation. The OMC found the operator to be in
    unsatisfactory condition and gave them 45 days to clean up
    their act or shut down. April 1996 we are talking about. There
    were serious problems with the conditions of their vehicles,
    the qualifications of their drivers, and the company could not
    show evidence that they were complying with the hours of
    service laws or performing mandatory drug and alcohol testing
    of their drivers.
        And now, almost 3 years and eight fatalities later, OMC has
    gone back to look at the Bruin company and found many of the
    same problems they discovered in 1996. Once again, they have
    been given 45 days to clean up their act or shut down. One
    hopes that the result of this inspection will get us someplace
    and not permit them to wantonly disregard the rules. The
    question has to be asked, did this company just clean up their
    act for a 2-month period back in 1996 only to go right back to
    the same old ways of doing business?
        And when you look at the driver of the bus, the picture is
    even more grim. The driver had his licensed revoked back in
    June 1997 because of a combination of speeding tickets and the
    violation in which he drove a commercial bus past a stopped
    school bus. He got his license back only through attending
    driving school. After the accident, he was cited for reckless
    driving, and it was found that his hours of service
    documentation was out of order.
        I would like to say that this situation is the exception
    rather than the rule, but I have not seen any evidence to date
    to confirm that. To the contrary, I have seen even more
    worrisome data indicating the OMC has only performed compliance
    reviews on fewer than one in four interstate bus operators in
    the United States. Put another way, our Federal safety agency
    has effectively no knowledge of the safety performance of more
    than three-quarters of the Nation's motor carriers whose
    principal cargo is human lives.
        Now, I am aware that the chairman of our companion House
    committee, Mr. Wolf, took testimony earlier this week on the
    adequacy of OMC's efforts on truck safety. Now, he has taken
    the position that the OMC needs to be moved out of the Federal
    Highway Administration and into the National Highway Traffic
    Safety Administration. Frankly, I am keeping an open mind on
    this proposal, but it is my sincere hope that the debate over
    the appropriate agency to oversee the OMC not detract from our
    focus on the daily workings of the OMC and the need to boost
    substantially their levels of effort at improving safety.
        Now, I will take advantage of the opportunity to respond to
    something my friend and the distinguished chairman of this
    subcommittee said about Amtrak. It is true. Amtrak's financial
    condition is not really a very attractive one, and we have put
    a lot of money in it. I think it is getting better. I am a
    perpetual optimist about Amtrak for one reason: Look at what is
    happening in Boston today. The forecast is for 2 feet of snow.
    The airport is almost shut down already. People would be
    virtually locked in.
        I have had the bad fortune of traveling out of National
    Airport to the New York/New Jersey area. I have an option of
    Newark Airport or LaGuardia Airport, depending on the time they
    leave. And twice now I have been held up for more than 3 hours,
    weather conditions, and twice I ran for Amtrak at Union
    Station. And I will tell you, when the weather is bad, those
    trains are filled. It is an emergency relief for us. We have to
    have that.
        There is some cost involved, but I submit that we have to
    examine the cost that occurs to aviation, lost business, missed
    connections, et cetera. I met people in the airport who had
    planned for a vacation. They had to connect from Washington
    National to New York and missed a vacation that the wife and
    the husband and the little kids have all planned for. There is
    a heck of a cost associated with it. I think when we do the
    analysis of the cost to Government of Amtrak service, that we
    include some of the costs that are not directly obvious, Mr.
    Chairman. We have to look at all these things. And I know that
    you have been diligent about them and we have had our chance to
    debate Amtrak.
        But that is not our only subject. Safety is our principal
    subject, and I appreciate the opportunity to hear from our
    witnesses.
        Senator Shelby. Senator Stevens.

                        STATEMENT OF SENATOR TED STEVENS

        Senator Stevens. Well, I congratulate you having the
    oversight hearing, and I hope that you will even go down into
    some of the particular issues and hold separate oversight on
    some of the separate issues because I do think that
    Transportation has some real substantial issues that we ought
    to address, not only from an appropriations point of view, but
    from a legislative point of view.
        One of our great problems is we have been inclined lately
    to consider legislation without knowing what the facts are. I
    think we ought to get into the oversight on specific issues.
    Particularly I am concerned about the air traffic control
    modernization concept, and I am concerned about the whole
    problem of transportation computer security. I think the year
    2000 issues are pretty well covered by now by Senator Bennett's
    committee, but we should continue to keep ahead on that.
        I do think that last one, the GPRA, is something that we
    ought to have the full committee review, Department by
    Department, to see what has happened and how the agencies are
    fulfilling the requirements of that act.
        But I am pleased to have a chance to be here and listen.
        Senator Shelby. Our witnesses today, as I indicated
    earlier, are Mr. John Anderson, Director of Transportation
    Issues, U.S. General Accounting Office; the Honorable Kenneth
    Mead, Inspector General, U.S. Department of Transportation; and
    Peter Basso, Assistant Secretary of Budget and Programs, U.S.
    Department of Transportation. Mr. Anderson, if you will
    proceed. All of your written testimony will be made part of the
    record in its entirety. If you would just sum up the high
    points of your testimony in about 5 minutes, we can have a
    chance to have a little dialogue.

                       statement of john h. anderson, jr.

        Mr. Anderson. All right. I will be glad to do that, Mr.
    Chairman.
        Mr. Chairman and members of the subcommittee, thank you for
    asking me here today to discuss the critical management
    challenges that are facing the Department of Transportation. My
    testimony is based on a report that we issued in January as
    part of a GAO series on major management challenges and program
    risks facing the entire Federal Government. The challenges that
    we identified are not new to the Department, as the chairman
    pointed out. The problems and their solutions have been
    reported by us, the Inspector General, and others.

                              aviation challenges

        First, I will discuss FAA which faces numerous challenges
    in managing its programs which are critical to our Nation's air
    traffic system. Over the past 17 years, FAA's multi-billion
    dollar air traffic control modernization program has
    experienced significant cost overruns, delays, and performance
    shortfalls. While FAA has initiated activities to address many
    of our concerns about this program, none are completed. And as
    we reported recently, several major components of the program,
    such as the standard terminal automation replacement and wide
    area augmentation systems, continue to encounter problems that
    could affect their cost, schedules, and performance. These two
    systems alone are expected to cost several billion dollars.
        FAA also faces considerable challenges in making its vast
    network of computer systems ready for the year 2000. Last
    August we testified that FAA was unlikely to complete critical
    testing activities in time and that unresolved risks, including
    those associated with data exchanges, international
    coordination, reliance on the telecommunications
    infrastructure, and business continuity and contingency
    planning, threatened aviation operations. Although FAA is
    taking steps to address these issues, much work remains to be
    done.
        The Congress, as well as the Department, face a challenge
    in reaching agreement on the amount and source of long-term
    financing for FAA and the Nation's airports. The administration
    recently proposed shifting funding for FAA away from the
    general fund and instead relying solely on user charges in the
    form of excise taxes or new cost-based charges. However, any
    cost-based financing depends on accurate and reliable data
    which FAA currently lacks.
        FAA will need to continue its efforts to implement a cost
    accounting system. In addition, continued funding for airports
    will be critical to ensure adequate capacity for the national
    airport system. Planned development at airports might require
    as much as $3 billion more per year nationwide than has
    historically been spent.
        We have also identified the need for FAA to address
    shortcomings in its safety and security programs and to improve
    its inspection, oversight, and enforcement activities.

                       surface transportation challenges

        Another challenge is surface transportation programs. Large
    dollar highway and transit projects, each costing hundreds of
    millions to billions of dollars have experienced cost increases
    and delays and have had difficulties acquiring needed
    financing.
        Legislation was enacted last year requiring projects
    costing a billion dollars or more to submit financial plans to
    DOT for review. This should improve Federal oversight of the
    financing of significant projects. However, the Congress needs
    to decide if additional Federal oversight is needed of the cost
    and scheduling for these projects as well.
        Congressional action is also going to be needed to address
    Amtrak's tenuous financial condition and the future of
    passenger rail service in the United States.

                             coast guard challenges

        Turning now to the Coast Guard, it is starting to address
    the problems that we reported on recently concerning its 20-
    year, $9.8 billion project to replace or modernize its
    deepwater ships and aircraft. We found that the Coast Guard had
    not adequately documented the project's justification nor its
    affordability. In addition, it significantly underestimated the
    remaining life of its current aircraft and, to a lesser extent,
    its ships. DOT and the Coast Guard need to fix the systemic
    problems that caused the situation by improving their planning
    processes, and in addition, issues still need to be resolved
    concerning the project's affordability.

                           department-wide challenges

        Finally, at the Department level, DOT's lack of
    accountability for its financial activities, which the
    Inspector General has repeatedly documented, impairs its
    ability to manage and improve programs and exposes the
    Department to potential fraud, waste, and abuse.
        In conclusion, many of the problems we identified are
    longstanding and will require sustained attention by DOT over a
    long period of time. The Congress will need to play a prominent
    role, including holding hearings like this one, to make sure
    that things get fixed.
        I believe the DOT's leadership is fully committed to
    improving its programs. Mr. Basso has been with the Department
    for some time and fully understands the challenges it faces. I
    know that he and the rest of the DOT's top management team will
    continue to work hard to make improvements. And I know that my
    colleague, Ken Mead, who I used to work with when he was at
    GAO, will provide the tenacious oversight and guidance needed
    to keep DOT's ship moving in the right direction.
        And finally, GAO is committed to working with the
    Department and assisting with congressional oversight.

                               prepared statement

        This completes my oral statement. I will be glad to answer
    questions.
        Senator Shelby. Thank you, Mr. Anderson.
        [The statement follows:]

                  Prepared Statement of John H. Anderson, Jr.

        Mr. Chairman and Members of the Subcommittee: We are here today to
    discuss the critical management challenges facing the Department of
    Transportation (DOT). My testimony is based on a report we issued in
    January as part of GAO's performance and accountability series on major
    management challenges and program risks facing the federal
    government.\1\ With a budget request of over $50.5 billion for fiscal
    year 2000, the Department faces critical challenges in achieving its
    goals of ensuring the safe and efficient movement of people and goods
    and in making cost-effective investments in the nation's transportation
    infrastructure.
    ---------------------------------------------------------------------------
        \1\ ``Major Management Challenges and Program Risks: Department of
    Transportation'' (GAO/OCG-99-13, Jan. 1999).
    ---------------------------------------------------------------------------
        While DOT has had many successes in improving the nation's
    transportation systems, it has also experienced problems that have
    impeded its ability to achieve its goals. We, DOT's Inspector General,
    and the Department have documented these problems and recommended
    solutions. Although some corrective actions have been taken, major
    performance and management challenges remain for DOT's agencies that
    cover aviation and surface transportation, the U.S. Coast Guard, and
    the Department itself. In summary:
        The Federal Aviation Administration (FAA) faces considerable
    challenges in managing its multibillion-dollar air traffic control
    modernization program, making its computer systems ready for the year
    2000, and addressing shortcomings in its safety and security programs.
    Additional challenges include funding uncertainties facing FAA and the
    nation's airports and the lack of airline competition in some
    communities. While DOT has started to address some of these issues,
    more needs to be done. For example, FAA has initiated activities to
    address many of our concerns about its air traffic control
    modernization program but none are completed. Moreover, because of its
    size, complexity, cost, and past problems, since 1995, we have
    designated the air traffic control modernization program as a high-risk
    information technology initiative.
        DOT and the Congress face challenges in continuing to improve the
    oversight of highway and transit projects and in determining the future
    of passenger rail. Large-dollar highway and transit projects have
    experienced cost increases and delays and have had difficulties
    acquiring needed financing. While some improvements can be made by
    DOT's agencies, others may require congressional action. For example,
    the Federal Transit Administration (FTA) has implemented a new tracking
    system to help ensure the correction of deficiencies found during its
    oversight review of grants, but we have not reviewed it to determine if
    it addresses our concerns about the agency's need for complete, timely
    information. Other improvements--such as addressing Amtrak's tenuous
    financial condition and changing the federal oversight role for large-
    dollar highway projects--will require congressional action.
        The Coast Guard had not thoroughly addressed planning issues for
    its 20-year, $9.8 billion project to replace or modernize many of its
    deepwater ships and aircraft. We found that the Coast Guard had not
    adequately addressed this project's justification and affordability,
    and we recommended that DOT and the Coast Guard take several steps to
    improve their planning processes. The Coast Guard has begun
    implementing our recommendations, but it has not resolved issues
    concerning the project's affordability.
        DOT's lack of accountability for its financial activities impairs
    its ability to manage programs and exposes the Department to potential
    fraud, waste, abuse, and mismanagement. Over the years, the Inspector
    General has been unable to express an audit opinion on the reliability
    of the financial statements of the Department and some of its agencies.
    DOT faces considerable challenges in achieving an unqualified audit
    opinion on its fiscal year 1999 financial statements due to the
    numerous problems that need to be addressed, and the serious financial
    management weaknesses at FAA have contributed to these problems.
    Consequently, this year we designated financial management at FAA as a
    high-risk area.
                              aviation challenges
        Over the past 17 years, FAA's multibillion-dollar air traffic
    control modernization program has experienced cost overruns, schedule
    delays, and performance shortfalls of large proportions. The Congress
    appropriated over $25 billion for the program through fiscal year 1998,
    and FAA estimates that the program will need an additional $17 billion
    for fiscal years 1999 through 2004. Because of its size, complexity,
    cost, and problem-plagued past, we have designated this program as a
    high-risk information technology initiative since 1995. Among other
    things, FAA needs to adopt disciplined acquisition processes and change
    its organizational culture so that employees become strongly committed
    to mission focus, accountability, coordination, and adaptability.
    Although FAA has initiated activities to address many of our concerns,
    such as improving its software acquisition capabilities, none are
    completed. Additionally, we recently reported that FAA is not
    effectively managing information security for future air traffic
    control modernization systems and we made several recommendations. For
    example, we recommended that FAA ensure that specifications for all new
    air traffic control systems include security requirements based on
    detailed assessments.
        FAA also faces considerable challenges in making its computer
    systems ready for the year 2000. In August 1998, we testified that FAA
    was unlikely to complete all critical tests of its computer systems in
    time and that unresolved risks--including those associated with data
    exchanges, international coordination, reliance on the
    telecommunications infrastructure, and business continuity and
    contingency planning--threatened aviation operations. The implications
    of FAA's not meeting the Year 2000 deadline are enormous and could
    affect hundreds of thousands of people through customer inconvenience,
    increased airline costs, grounded or delayed flights, or degraded
    levels of safety. FAA is making progress in addressing the Year 2000
    computing problem. Earlier this month, DOT reported that FAA validated
    74 percent of its mission critical systems undergoing repair, up from
    20 percent in November 1998. However, much remains to be done to
    complete validating and implementing the repairs and the replacements
    of FAA's mission critical systems. As of January 31, 1999, FAA had
    implemented only about 15 percent of its mission critical systems
    undergoing repair. In addition, airports and airlines depend on
    computer technology and, thus, will face Year 2000 risks. We reviewed
    the status of airports' preparations for the year 2000 and found that
    nearly one-third of the more than 330 airports that responded to our
    survey did not report that they would meet the June 1999 date
    recommended by FAA to complete preparations for the year 2000 and that
    they did not have contingency plans for Year 2000-induced failures.
    Because of the interdependence among airline flights and airport
    facilities, equipment malfunctions related to the date change at one
    airport could decrease efficiency and cause delays at other airports
    and eventually impede the flow of air traffic throughout the nation,
    especially if those delays occur at airports that serve as hubs.
        DOT and the Congress face a challenge in reaching agreement on the
    amount and the source of long-term financing for FAA and the nation's
    airports. The National Civil Aviation Review Commission recommended
    that the Congress fund FAA through a combination of cost-based user
    charges, fuel taxes, and general fund revenues. The administration's
    proposal to authorize FAA for fiscal years 1999 through 2004 would fund
    the agency through user charges--in the form of excise taxes or new
    cost-based charges--and would shift funding away from the general fund.
    But any cost-based system depends on accurate and reliable data, which
    FAA presently lacks. FAA will need to continue its efforts to fully
    implement its cost accounting system so that it can use reliable and
    accurate data to improve its management and performance and establish
    user fees as mandated by the Congress. In addition, continued funding
    for airports will be critical to ensuring adequate capacity for the
    nation's airport system. From 1997 through 2001, planned development at
    airports might require as much as $10 billion per year nationwide
    compared to about $7 billion in funding at historical levels. Several
    proposals to increase airports' funding have emerged in recent years,
    including increasing the amount of funding from FAA, but some of them
    are controversial. In addition, FAA's prior efforts to address airport
    funding needs--such as pilot programs to use grants in more innovative
    ways--might provide additional flexibility, especially if changes are
    made to expand the number of projects and reduce some restrictions.
        We have identified numerous shortcomings in FAA's safety and
    security programs. These include the need for the agency to improve its
    oversight of the aviation industry, record complete information on
    inspections and enforcement actions, provide consistent information and
    adequate training for users of weather information, and resolve data
    protection issues to enhance the proactive use of recorded flight data
    to prevent accidents. While FAA is taking some steps to address these
    shortcomings, including totally revamping its inspection program,
    resolving the problems will take considerable time and effort. In
    addition, while progress has been made in strengthening airport
    security, it will take years for FAA and the aviation industry to fully
    implement current initiatives.
        A final aviation challenge is the lack of airline competition in
    some communities. Although DOT and others generally consider airline
    deregulation to be a success, contributing to better service and lower
    fares for most travelers, not all communities have benefited. In a
    number of small and medium-sized communities, a lack of airline
    competition contributes to higher fares and/or poorer service.
    Operating barriers--such as long-term, exclusive-use gate leases and
    ``slot'' controls that limit the number of takeoffs and landings at
    certain congested airports--contribute to higher fares and service
    problems by deterring new entrant airlines while fortifying established
    airlines' dominance at key airports. Recently proposed alliances
    between the nation's six largest airlines have raised additional
    concerns about competition. DOT has attempted to address problems with
    competition by such efforts as granting a limited number of additional
    slots at two airports. Additional actions--some of which are
    controversial--may be needed by the Congress, DOT, and the private
    sector. In this regard, various bills have been introduced to address
    competition issues and the administration has proposed legislation that
    would eliminate slot restrictions at three of the four slot-controlled
    airports.
                highway, transit, and passenger rail challenges
        Many large-dollar highway and transit projects, each costing
    hundreds of millions to billions of dollars, have incurred cost
    increases, experienced delays, and had difficulties acquiring needed
    financing. In fiscal year 1998, DOT's Federal Highway Administration
    provided over $21 billion to assist the states in building and
    repairing highways and bridges. We have identified several options to
    help improve the management of these projects, particularly those
    involving large amounts of dollars, depending on the oversight role
    that the Congress chooses for the federal government. For example, one
    option would be to establish performance goals and strategies for
    controlling costs as large-dollar projects move through the design and
    construction phases.
        FTA has improved its oversight of federal transit grants, but
    shortcomings exist in its follow-up on noncompliance. Our prior work
    indicated that, frequently, some grantees did not meet FTA's time
    frames for corrective actions and that FTA had allowed compliance
    deadlines to be revised, which enabled grantees to delay corrective
    actions. Also, FTA did not have complete, timely information to help
    ensure the correction of deficiencies found during its oversight
    reviews of grants. The agency has implemented a new tracking system,
    but we have not reviewed it to determine if it addresses our concerns.
        The National Railroad Passenger Corporation's (Amtrak) financial
    condition remains tenuous. Despite efforts to control expenses and
    increase revenues, Amtrak's financial condition has deteriorated in
    recent years. Since it began operations in 1971, Amtrak has received
    nearly $22 billion in federal subsidies for operating and capital
    expenses, and it is likely to remain heavily dependent on federal
    assistance well into the future. Amtrak loses about $2 for every dollar
    it earns in revenues from its train service, and only one of Amtrak's
    40 routes covers its costs. The business decisions that Amtrak makes
    regarding the structure of its route system will play a crucial role in
    determining its long-term viability. Because there is no clear public
    policy that defines the role of passenger rail in the national
    transportation system and because Amtrak is likely to remain dependent
    on federal assistance, the Congress needs to decide on the nation's
    expectations for intercity rail and the scope of Amtrak's mission in
    providing that service.
                             coast guard challenges
        The Coast Guard did not thoroughly address planning issues for its
    20-year, $9.8 billion Deepwater Capability Replacement Project to
    replace or modernize many of its ships and aircraft. This effort, which
    is potentially the largest acquisition project in the agency's history,
    is still in its early stages. We found that the Coast Guard did not
    adequately address the project's justification and affordability. In
    fact, the remaining useful life of its aircraft--and perhaps ships--may
    be much longer than the agency originally estimated. We recommended
    that DOT and the Coast Guard take several steps to improve their
    planning processes, such as expediting the development and the issuance
    of updated information on the remaining service life of the agency's
    aircraft and ships and revising acquisition guidelines so that future
    projects are based on more accurate and complete data. The Coast Guard
    has begun implementing our recommendations, but has not resolved issues
    concerning the project's affordability.
                            departmentwide challenge
        DOT's lack of accountability for its financial activities impairs
    its ability to efficiently and effectively manage programs and exposes
    the Department to potential fraud, waste, abuse, and mismanagement.
    Since 1993, when the Office of Inspector General began auditing the
    financial statements of certain agencies within the Department, it has
    been unable to determine whether the reported financial results are
    correct and has thus been unable to express an audit opinion on the
    reliability of these statements. The Inspector General also has been
    unable to express an opinion on the reliability of the departmentwide
    statements since these statements were first audited in fiscal year
    1996. A key issue affecting the ability to express an opinion on these
    financial statements has been DOT's inability to reliably determine the
    quantities, the locations, and the values of property, plant, and
    equipment and inventory, reported at $28.5 billion as of September 30,
    1997. Serious financial management weaknesses at FAA have contributed
    to this situation. Consequently, we have designated financial
    management at FAA as a high-risk area. In addition, as we previously
    mentioned, DOT lacks a cost-accounting system or an alternative means
    to reliably accumulate and report the full cost of specific projects
    and activities. Due to the deficiencies in its financial
    accountability, it is unlikely that DOT can accurately determine costs
    and meaningfully link them to performance measures. On September 30,
    1998, DOT submitted a plan to the Office of Management and Budget for
    resolving the financial management deficiencies that had been
    identified in its financial statement audits. However, the Department
    faces significant challenges in achieving its goal of receiving an
    unqualified audit opinion on its fiscal year 1999 financial statements
    due to the numerous problems that need to be addressed.
        In summary, many challenges we identified are long-standing and
    will require sustained attention by DOT and the Congress. While DOT has
    initiatives underway to address the shortcomings in some of its
    programs, these activities are only in the early stages of
    implementation. It will take time to fully address the issues we and
    others have identified and to assess whether the Department has fully
    resolved them. Furthermore, congressional actions will also be required
    to address certain challenges facing the Department. Finally,
    congressional oversight, such as provided by this hearing, will help
    ensure the effective resolution of these challenges.
        Mr. Chairman, this completes my testimony. I will be glad to
    respond to any questions that you or other Members of the Subcommittee
    may have.

                          STATEMENT OF KENNETH M. MEAD

        Senator Shelby. Mr. Mead.
        Mr. Mead. Thank you, Mr. Chairman. I would just like to
    make two points on a personal note to the committee. I hope
    this does not eat into my time too much.
        First of all, just to echo what Chairman Stevens said, it
    is very healthy from time to time for the Inspector General and
    the GAO to pause and reflect on what the key issues are facing
    the Department. I want to say I found this exercise quite
    useful inside DOT. The Secretary was very responsive and
    Department officials listen when they know the Congress is
    paying attention. That really helps.
        Second, Mr. Chairman, I would like to salute Senator
    Lautenberg for all your support and contributions to
    transportation safety over the years. We have been through a
    lot of hearings together, and some of these issues, as you
    said----
        Senator Lautenberg. We have heard before. [Laughter.]
        Mr. Mead. There is some vintage behind them.
        The chart lists these top 10 issues, at least as we see
    them. They are very similar to GAO's. I will just hit the
    highlights as I go down through them.

                         dot's top 10 management issues

        First, aviation safety. It was a very good year for U.S.
    commercial aviation--no fatal accidents. To continue that
    record, FAA must have a proactive approach to preventing
    accidents. There are numerous targets of opportunity.
        Reducing runway incursions is one of them. Runway
    incursions are when aircraft are at risk of colliding with an
    object on the ground, such as another aircraft. Runway
    incursions, Mr. Chairman, have been steadily increasing since
    1993, substantially so. There were about 300 of them across the
    country in 1998.
        Second, surface safety. Highway accidents claim more than
    40,000 lives annually. Of those, more than 5,000 involve large
    trucks. This is an area where improvement is truly and urgently
    needed. A small portion of the industry puts profit first and
    safety second. DOT can do a better job in getting the problem
    companies to change their behavior or get them off the road.
        Third, the year-2000 computer problem. DOT got a late start
    in this area. I think that is very well-known by now. However,
    we have got a much higher confidence level than we did a year
    ago that DOT will complete the job with its own systems. A
    great deal of work remains, especially for FAA, which over the
    next several months must ensure that the repairs it has made to
    all its computers are now fielded in the various installations
    around the United States. Outside of DOT, both the U.S.
    transportation industry and foreign transportation systems--
    specifically foreign air traffic control deserve very close
    watching.
        Fourth, air traffic control modernization. The record here
    for developing and installing new equipment has not been good.
    Recently there have been some successes, such as the
    commissioning of new controller displays at the en-route
    centers, and replacement of the HOST computer, which is also
    going reasonably well. Both those, though, are not software-
    intensive acquisitions. Two other air traffic systems--you will
    hear them referred to as STARS and WAAS--do involve intensive
    software and development. Both have experienced significant
    cost and schedule problems. The STARS system, to upgrade
    displays, software and computers in terminals, experienced
    substantial human factor problems late in the acquisition.
        Fifth, FAA financing. We know Congress will be considering
    how best to finance FAA. Its budget has increased nearly 70
    percent since 1988. But a stable and agreed-upon means of
    financing FAA is only part of the equation. A watchword here
    must also be cost control. A large part of the increase in
    FAA's requirements is due to the rising cost of its work force,
    a cost which now comprises 57 percent of the FAA budget. These
    rising costs have already begun to crowd out what would
    otherwise be available for other critical functions.
        Sixth, infrastructure. As you know, with TEA-21, we are
    infusing billions of dollars into surface transportation
    infrastructure. The watchword here must be: Be on the alert for
    fraud, waste, and abuse. There's a lot of money going into
    infrastructure programs. Look back in history to the Eisenhower
    administration and see what happened when we infused a lot of
    money into the interstate system. We want to be vigilant not to
    let that occur again.
        Also, discretionary money ought to be going to the high-
    priority projects.
        And at airports, we need to be vigilant to guard against
    revenue diversion, especially if Congress is going to increase
    the passenger facility charge.
        Seventh, security. We are making a significant investment
    in new airport and aviation security procedures and new
    explosives detection equipment. All these different systems
    need to work together. Explosives detection equipment is being
    deployed in the field, and a considerable amount has been
    deployed in just the last 12 months. Time will be required to
    make sure usage of these machines is effective and optimal,
    that consistent protocols are followed for usage of those
    machines, and that everybody does the same thing when the
    machines detect a suspect substance.
        Eight, financial statements. Now, this may seem like a
    fairly dry subject, financial statements, but most corporations
    have them and they usually get a clean opinion or they hear
    from their stockholders. DOT has made several major
    improvements in this area over the last several years, but for
    the Department to get an unqualified or clean opinion on its
    financial statements, both FAA and the Coast Guard must account
    for property and equipment totaling about $20 billion. Now, the
    credibility of a cost accounting system for FAA and any user
    fees is going to depend on FAA getting a clean opinion on its
    financial statements.
        Ninth, Amtrak's financial outlook. Amtrak has some very
    promising opportunities in the next few years with which to
    improve its financial outlook. Mail and express package service
    and high-speed rail in the Northeast Corridor could prove to be
    very significant revenue sources. But there is still some very
    red ink. In fiscal year 1998, Amtrak lost more than $800
    million. Now, that was less than projected, but it still was
    the second largest loss in the past 10 years.
        Finally, the Government Performance and Results Act. I
    think you know DOT's strategic plan and its performance plan
    were rated among the very best in Government. The challenge for
    us all now is meeting or exceeding the many quantitative goals
    set forth in that plan. Safety and efficiency are among them.
    The first report card will be submitted to the Congress in
    March 2000.

                               prepared statement

        Mr. Chairman, that concludes my statement. I will defer to
    my fine colleague here, Mr. Basso.
        Senator Shelby. Thank you.
        [The statement follows:]

                   Prepared Statement of Hon. Kenneth M. Mead

        Mr. Chairman and Members of the Subcommittee, we appreciate the
    opportunity to appear today to discuss the major management issues
    facing the Department of Transportation.
        We recently prepared a report on the 10 top-priority management
    issues at the request of the House Majority Leader and the Chairman of
    the House Committee on Government Reform. We grouped these issues into
    the following areas:
        1. Aviation Safety
        2. Surface Transportation Safety
        3. Year-2000 Computer Issues
        4. Air Traffic Control Modernization
        5. FAA Financing
        6. Surface, Marine, and Airport Infrastructure Needs
        7. Transportation and Computer Security
        8. Financial Accounting as Related to the Chief Financial Officers
    (CFO) Act
        9. Amtrak Financial Viability/Modernization
        10. DOT Implementation of the Government Performance and Results
    (GPRA) Act
        In addition to the 10 management issues presented, aviation
    competition is a policy area we believe will become an increasingly
    important policy matter during the next year for the Department, the
    Congress, and the aviation community. Key departmental activities
    affecting aviation competition include capacity-building at the
    nation's airports, the Department's proposed guidelines on unfair
    competitive practices, measures to ensure and increase competition at
    hub airports, and the cost and quality of service at small- and medium-
    size airports.
        Secretary Slater has set the tone for DOT to be visionary and
    vigilant in all aspects of transportation. As a result, DOT can proudly
    point to a number of successes to which it contributed this past year.
    For example, there have been no fatalities in U.S. commercial aviation,
    investment in surface infrastructure has been funded to record levels,
    and DOT's Strategic Plan was rated the best in government. A few weeks
    ago, the Coast Guard seized nearly 5 tons of cocaine with a street
    value of about $350 million--one of the largest cocaine seizures ever
    recorded. These successes deserve recognition, but more needs to be
    done to ensure that the American transportation system remains safe and
    efficient.
        It is also important to recognize the linkage between the
    management issues we identified and the goals established by DOT.
    Indeed, DOT's ability to achieve its goals depends greatly on how
    effectively it addresses these key management issues.
        To its credit, DOT's 5 Strategic Goals correlate with 7 of the 10
    issues we identified and its Performance Plan outlines actions to
    address those issues. The remaining 3 issues--the Year-2000 computer
    problem, financial accounting and the Chief Financial Officers Act, and
    DOT implementation of GPRA--are not explicitly included in DOT's
    Strategic Goals. They are, however, addressed in DOT's Corporate
    Management Strategies, which are a part of the 1999 Performance Plan.
        We are working closely with the Secretary, Deputy Secretary, and
    Operating Administrators to address these issues. We will continue to
    monitor the issues and advise the Secretary and the Congress of the
    Department's progress, problems, and recommended solutions.
        The 10 top-priority management issues we identified are similar to
    those identified by the General Accounting Office. They cover a vast
    amount of subject matter and cannot be comprehensively addressed in one
    statement or covered in a single hearing.
        I will briefly discuss each of these issues today and identify
    actions needed to effectively address them. The report we issued in
    December discusses each issue and the conditions identified by our
    audit and investigative work. It also references each issue to the
    relevant goals in the Department's Strategic and Performance Plans.
                                aviation safety
        Despite last year's exemplary record, DOT needs to continually
    identify air transportation safety risks and proactively reduce those
    risks. Aviation safety has been a focus area for our office for a long
    time. Our major aviation-safety concerns today are:
        Reducing runway incursions (i.e. situations when an aircraft is at
    risk of colliding with another object on the runway), which are
    increasing.
      --Effectively implementing FAA's new inspection process and providing
            training to the inspector workforce.
      --Ensuring that safety risks are called to the attention of top FAA
            management and acted on promptly.
      --Evaluating the safety implications of U.S. air carrier code-share
            agreements and international alliances that involve foreign air
            carriers and--if necessary--modifying approaches to oversight
            and code-share approval.
        Industry and government leaders recognize that if the runway
    incursion rate is not reduced, and air traffic increases as projected,
    there will be an increase in the number of accidents. This is
    unacceptable. FAA has recognized this risk, adopted a focused safety
    agenda, and taken some important preventive steps such as the Safe
    Skies program aimed at critical safety problems. FAA must now make sure
    that the actions it identified in the agenda are implemented.
        The number of runway incursions increased by 70 percent between
    1993 and 1997 from 186 to 318. Because of this trend, and the
    devastating consequences of a collision on the ground, preventing
    runway incursions is one of FAA's safety goals. Our work shows that FAA
    has a good plan to reduce runway incursions. However, runway incursions
    continued to rise in 1998 and remain a significant problem. The key for
    FAA to reduce runway incursions is to follow through on implementation
    of the existing plan.
        Another important area is the use of data to identify safety
    problems and effectively deploy safety-inspection resources. FAA's
    efforts to collect data from airlines, to improve its own data
    collection, and to analyze the data and then act as soon as problems
    are identified are essential for accident prevention. This program must
    get off the ground this year.
        FAA's strong oversight of the aviation industry is critical.
    Recognizing past problems, FAA has begun to revise its safety-
    monitoring process. While suspected unapproved parts continue to be a
    problem, we have seen improvements in FAA's attitude and its oversight.
        Equally important to aviation safety is how well DOT adapts to
    industry change. During a 4-year period, code-share agreements between
    U.S. and foreign carriers have more than doubled, to 163. The rapid
    increase in the number of code-share agreements and the movement toward
    global alliances may necessitate new approaches to safety oversight and
    approval of code-share agreements. We are currently reviewing this
    issue.
                         surface transportation safety
        By far, the greatest number of transportation-related fatalities
    involve motor vehicles. Highway accidents claim more than 40,000 lives
    annually. Rail and transit account for an additional 850 lost lives. It
    is critical that DOT address surface transportation safety issues, such
    as:
      --Improving the effectiveness of the Department's motor-carrier
            safety program for vehicle maintenance, driver qualifications,
            and compliance with hours-of-service requirements. This
            includes taking prompt, tough enforcement action against
            carriers that fail to comply with the rules after appropriate
            warnings have been issued.
      --Increasing the safety of commercial trucks and drivers entering the
            U.S. from Mexico.
      --Reducing grade-crossing and rail-trespassing accidents through
            enforcement, education, and technology.
      --Improving safety-regulation compliance by transporters of hazardous
            materials.
      --Increasing the effectiveness of the Federal Railroad
            Administration's Safety Assurance Compliance Program, and
            bringing enforcement into play when voluntary and collaborative
            initiatives fall short.
        Educating drivers, reducing risky behavior and using seat belts can
    do more to reduce highway fatalities than anything else. DOT is
    aggressively pursuing these actions.
        However, truck-related accidents account for more than 5,000 deaths
    annually or about 15 deaths every day. This is equivalent to a major
    aviation accident every 2 weeks. Though the fatality rate involving
    trucks has remained at about the same level, the number of deaths is
    unacceptable. Strong action is needed to control truckers who disregard
    public safety.
        Most trucking firms follow the rules. But there is a segment of the
    industry willing to cut corners to increase profits. They put others at
    risk and give the rest of the industry a bad name by using unqualified
    drivers, operating unsafe vehicles, and requiring drivers to work
    without necessary rest. They are the ones who must be targeted for
    stringent enforcement action--and given the choice of complying or
    being removed from the nation's highways.
        During the past 18 months, our investigations of such companies
    have resulted in 33 indictments of truckers and/or companies. We have
    an additional 30 investigative cases underway and expect to pursue many
    more.
        The FHWA Office of Motor Carriers' (OMC) ability to oversee the
    trucking industry and its effectiveness in doing so has been
    challenged. Recently we released results of an investigation into
    allegations that senior OMC officials had initiated industry lobbying
    to defeat legislation to transfer this office to the National Highway
    Traffic Safety Administration. We concluded there were violations of
    specific rules and that, in this instance, there was evidence of an
    improper relationship between senior officials at OMC and the trucking
    industry they regulate. There was a distinct appearance that OMC senior
    leadership did not have the ``arm's-length'' relationship needed
    between government safety regulators and the industries they regulate.
        At the request of House and Senate members, we are reviewing the
    effectiveness of DOT's oversight of the motor-carrier industry. As part
    of the review, we are examining organizational options and other steps
    that can be taken to improve the effectiveness of this critical DOT
    safety mission. We expect to complete our work in a few weeks.
        Another motor-carrier safety issue is the ability of Federal and
    state inspectors to make sure trucks entering the U.S. from Mexico meet
    U.S. safety standards. Presently, only California does a good job
    inspecting Mexican trucks. Because safety inspections have a deterrent
    effect, the out-of-service rate for trucks entering California from
    Mexico is 28 percent. By comparison, in states where inspections are
    less-frequent or less-stringent, the out-of-service rates are much
    higher: 37 percent in New Mexico, 42 percent in Arizona, and 50 percent
    in Texas. The out-of-service rate for U.S. trucks is 26 percent, which
    is still too high.
        For years, DOT and the border states have pointed to each other
    when asked who has the responsibility for inspecting trucks crossing
    the border. It is time to end this debate and put the necessary
    resources and processes in place to ensure that all trucks entering our
    borders are safe.
                           year-2000 computer issues
        After a slow start, the DOT, including FAA, has made a great deal
    of progress addressing the Year-2000 (Y2K) computer issue. The
    department is also making extensive efforts to increase Y2K awareness
    in the transportation industry.
        While much remains to be done on DOT's systems, we have a higher
    confidence level than we did a year ago that DOT will complete the job.
    We are not in a position to express the same level of confidence with
    regard to foreign operators of transportation systems, such as foreign
    air traffic control systems.
        The major issues that DOT must still address are:
      --Completing Y2K work on all missioncritical computer systems by
            March 31, 1999.
      --Testing all repaired systems to make sure they work as a unit and
            as part of a network.
      --Obtaining meaningful assurances that the transportation industry,
            including aviation, transit and shipping, will be Y2K-
            compliant.
      --Ensuring that DOT computers properly link up with other public and
            private computers, and that contingency plans are at the ready
            if critical systems fail to operate after December 31, 1999.
        As of December 31, 1998, 50 of FAA's and 3 of the U.S. Coast
    Guard's mission-critical systems would not be tested and implemented by
    Office of Management and Budget's milestone of March 31, 1999. As of
    December 31, 1998, 280 of DOT's 291 missioncritical systems that had
    Y2K problems were repaired.
                       air traffic control modernization
        FAA has been trying to modernize its air traffic control system
    since the early 1980s. The first comprehensive program, called the
    Advanced Automation System or AAS, was a failure. It was canceled in
    the early 1990s and wasted $1.5 billion.
        Today, FAA's multi-billion dollar air traffic control modernization
    effort remains a major challenge. FAA said Federal procurement and
    personnel rules made it difficult to modernize its equipment. Congress
    therefore exempted FAA from many rules that still apply to other
    government agencies.
        FAA has since proceeded with several major systems-development and
    acquisition efforts. FAA has had some successes, such as the Display
    System Replacement, and other systems such as the HOST computer are
    doing reasonably well. Two systems, however--the Standard Terminal
    Automation Replacement System or STARS, and the Wide Area Augmentation
    System, or WAAS--have already experienced significant cost increases
    and schedule slippage. The cumulative cost over the life of these
    systems exceeds $5 billion. Both systems require extensive software
    development--a problem area for FAA, historically.
        Human-factors issues--that is, the interface between the system and
    air traffic controllers or maintenance technicians--were not adequately
    considered before STARS was designed. Incorporating changes late in the
    process will result in a system that will cost much more than planned
    and be delivered much later than scheduled. In the case of WAAS, the
    problems involve a critical software package that monitors, corrects,
    and verifies the performance of the systems.
        For both STARS and WAAS, critical decisions needed early in the
    process were overlooked until late in development. Some of these
    decisions have not been resolved. FAA must make sure problems like
    these are not repeated in the development of future systems such as
    Data Link, a critical component of Free Flight.
        In our opinion, the FAA must:
      --Reassess and rebaseline plans for the transition to satellite
            communications, navigation, and surveillance, including ``Free
            Flight.'' This issue includes determining whether the Global
            Positioning System (GPS) and the WAAS will be the sole means of
            navigation or if a secondary systems will be needed.
      --Incorporate human factors in the design and development of new ATC
            systems such as Data Link and the user-request evaluation tool,
            in order to avoid the problems similar to those experienced by
            STARS.
      --Strengthen its capacity to oversee multi-billion dollar software-
            intensive development contracts. These contracts have typically
            resulted in large cost increases and major schedule slippage--
            an issue that has affected the pace of air traffic
            modernization for more than a decade. Strong oversight by the
            Department and the OIG is critical to ensuring contractor
            accountability and clear agency requirements.
                   federal aviation administration financing
        Financing FAA is a major issue that the Department, the Congress,
    and the aviation community will address this year. FAA faces
    significant risks in meeting rising operations costs (principally
    workforce costs). This presents a corollary problem that operating
    costs could ``crowd out'' adequate funding levels for air traffic
    control modernization, research and development, and airport grants.
        During the past 10 years, FAA's annual operating requirements
    almost doubled from $3 billion to nearly $6 billion, and the cost of
    operations is expected to continue to rise. FAA's total budget is about
    $10 billion. The recent increase in pay for air traffic controllers
    could require as much as $1 billion in additional funding over the next
    5 years. Also, cost increases in air traffic control modernization
    initiatives, such as WAAS and STARS, constrain spending in other
    legitimate need areas, such as technologies that hold promise for
    reducing runway incursions.
        Even with increased funding from the Aviation Trust Fund, receipts
    may fall substantially short of even the most conservative estimates of
    FAA needs by 2002. Therefore, some funding source--the General Fund of
    the Treasury, user fees, or higher ticket taxes--will have to be
    considered to cover additional costs. The General Fund, of course, is
    already used to cover approximately 30 percent of FAA costs, or an
    average of $2.7 billion per year.
        However, there are limits on revenues that can or should be
    assessed, regardless of whether they are called ticket taxes, user
    fees, segment fees, or passenger facility charges (PFC). On a round-
    trip $100 ticket, ticket taxes, PFCs, and segment fees currently amount
    to 18 percent of the base ticket cost. That is why the FAA, like other
    public or private sector organizations, must show discipline in
    controlling costs, particularly for operations and air traffic control
    acquisitions. Cost-control should be just as important in the current
    debate as the matter of how best to finance FAA.
        FAA plans to try to free up funding by controlling costs,
    increasing productivity and more tightly managing its budget. However,
    FAA will not be able to credibly say whether any of these things are
    happening until it has an effective cost-accounting system in place.
    Such a system will improve FAA management, regardless of the policy
    decision on user fees. Further, FAA cannot implement a credible and
    reliable cost-accounting system until it first ensures its financial
    systems accurately capture and allocate cost data and it obtains an
    unqualified opinion on its financial statements. As we have reported to
    the Congress, the Secretary, and the FAA Administrator, FAA's
    financial-management systems do not currently capture this data and,
    until they do, FAA cannot receive an unqualified opinion. It is
    critical that FAA put its financial affairs in order.
               surface, marine, and airport infrastructure needs
        Replacement of transportation infrastructure and construction of
    projects is crucial to U.S. economic viability and quality of life. The
    Transportation Equity Act for the 21st Century (TEA-21) provides $198
    billion over a 6-year period to improve safety and to maintain and
    improve America's highways, bridges, and mass-transit systems. It is
    imperative that these funds, as well as Airport Improvement Funds, be
    used effectively and efficiently.
        Since October 1997, we have issued 5 audit reports covering
    selected major highway and transit infrastructure projects priced at $1
    billion or more (Megaprojects), including the Central Artery project in
    Boston; Metrorail in Washington, DC; the Cypress Freeway Project in
    Oakland, California; the Red Line in Los Angeles; and Interstate 15 in
    Utah. The audits focused on current costs, work completed, the accuracy
    of supporting data, and the potential financial and schedule risks for
    each Megaproject. These as well as other reviews of DOT programs and
    projects have shown that:
      --Discretionary funds were frequently not awarded to projects
            identified as the highest priority (59 percent of the FHWA
            awards and 15 percent of the FAA awards) nor was there an
            explanation or documentation for the rationale for these
            decisions. DOT has agreed to take appropriate corrective
            action.
      --A proactive investigation process is needed to deter unscrupulous
            contractors. For example, earlier this month, as a result of an
            OIG and FBI investigation, an Illinois contractor pleaded
            guilty and agreed to pay a $12 million fine for submitting
            false weight tickets for highway construction projects and
            underpaying work benefits.
      --Airport sponsors continue to improperly divert funds from the
            airports and legislated controls to stop the practice have not
            been implemented. More than 4 years after Congress established
            the requirements that FAA issue/establish policies and
            procedures on permitted and prohibited airport revenue use, FAA
            has not finalized them. Until FAA takes effective action to
            eliminate revenue diversions, it will be difficult to justify
            additional PFCs.
        In order to effectively and efficiently invest in infrastructure,
    we recommend:
      --Strengthening internal controls to ensure adequate management and
            oversight.
      --Developing sound financial plans for high-cost projects before the
            work begins, including funding sources and full disclosure of
            interest costs.
      --Promoting the use of cost-saving techniques such as value
            engineering, design-build procurements, and owner-controlled
            insurance programs. (A recent report by DOT showed that value
            engineering saved more than $750 million in construction costs
            for fiscal year 1998).
      --Selecting high priority projects for discretionary grants, awarded
            according to established criteria and explaining in writing any
            deviations.
      --Eliminating the prohibited diversion of airport revenues by airport
            sponsors.
                      transportation and computer security
        In a society that thrives on unimpeded mobility, protecting the
    public from terrorism is very difficult. The nation's airports have
    security processes specified by FAA. However, access to transit, buses,
    railroads, bridges and other infrastructures is largely uncontrolled.
        At airports, where security processes have been established,
    compliance is a well-known problem. Our recent work has shown that
    improvements are needed in passenger screening, baggage and cargo
    screening, access to aircraft operating areas, preventing the
    transportation of hazardous materials on passenger aircraft and
    effective use of costly explosives-detection equipment.
        Likewise, vital computer systems are at risk because networks do
    not have adequate security built in and access monitoring has been
    minimal. In May 1998, Presidential Decision Directives 62 and 63 were
    issued. These require Federal agencies to take a more systematic
    approach to fighting terrorism and securing initial information systems
    within 2 years.
        Extensive work will be needed to enhance aviation and computer
    security. That work must include:
      --Enhancing the use of new technologies such as explosives-detection
            equipment.
      --Improving compliance with shipping requirements related to cargo
            safety and security.
      --Developing technical capabilities to detect intrusions into DOT and
            FAA computer networks and acting to reduce vulnerability.
               financial accounting/chief financial officers act
        DOT has made major improvements in its accounting system since
    Congress enacted the CFO Act. Despite these improvements, neither FAA
    nor the Department as a whole has earned an unqualified audit opinion
    on its financial statements. The primary problem now is real and
    personal property accounts. Like DOD and other departments that have
    large amounts of property, assigning value and adequately supporting
    the amount recorded continues to be a problem--particularly for FAA and
    the Coast Guard, with combined balances of $20.6 billion. As previously
    noted, FAA must have an unqualified opinion on its financial statements
    before it can have a credible and defensible cost-accounting system
    that will support a fee structure.
        We are closely working with the Chief Financial Officer as well as
    with FAA and Coast Guard officials to meet the President's goal for an
    unqualified opinion in fiscal year 1999. This will be a major challenge
    for DOT. To meet the challenge:
      --FAA needs to account for, and value, property and equipment
            accounts totaling about $12 billion and manage its multi-
            billion-dollar ``work-in-process'' accounts for air traffic
            control modernization.
      --The Coast Guard must arrive at a reliable estimate of its future
            liability for military retirement pay and health-care costs,
            and account for and value its property and equipment.
      --The Treasury Department must develop adequate support for trust
            fund revenues and account balances totaling $28 billion.
                    amtrak financial viability/modernization
        Amtrak managers have characterized fiscal year 1998 as a good year
    for the railroad. This should be placed in context. Amtrak's loss of
    more than $800 million was less than had been projected but was the
    second-largest in the past 10 years.
        Congress has mandated that Amtrak no longer receive a Federal
    subsidy to pay operating costs after 2002. Based on our assessment of
    Amtrak's March 1998 Strategic Business Plan, achieving that goal will
    present a significant challenge. We concluded that portions of the plan
    are at risk, and that if the plan were followed without modification,
    Amtrak's cash loss over the period fiscal year 1999 to fiscal year 2003
    would be $800 million higher than forecast in the plan, $2.9 billion
    rather than $2.1 billion. A significant portion of this restatement
    reflects our belief that revenue from high-speed rail will fall short
    of Amtrak's projections, especially in the early years. Amtrak is
    relying heavily on increased revenues from high-speed rail service in
    the Northeast corridor to improve its bottom line. Reducing the
    operating loss is critical because every dollar Amtrak uses to cover
    its operating loss is a dollar that could be spent on needed capital
    improvements.
        We estimated that Amtrak's capital needs range from $2.7 billion to
    $4.7 billion for the period fiscal year 1999 through 2003. We project a
    funding shortfall of $500 million for Amtrak to meet even its minimum
    capital needs. We do not believe this minimum level is adequate if
    Amtrak is to remain viable.
        The new Amtrak Reform Board is aware of our concerns and is
    developing and implementing plans to increase revenue and reduce cost.
    The Congressionally established Amtrak Reform Council is also working
    on this issue. We will continue to work with both groups. As mandated
    by Congress, we are updating our independent assessment by examining
    Amtrak's 1999 Strategic Business Plan and will provide a report this
    spring.
                           dot implementation of gpra
        DOT's first steps to implement GPRA have been very successful. Its
    strategic plan and the performance plan were rated by Congress to be
    among the best in government. These were only first steps, however, and
    DOT cannot rest on its accomplishments.
        The difficult job of collecting accurate outcome data, measuring
    success or lack of sufficient progress, and making programmatic changes
    remains.
        DOT's ability to measure performance is dependent on data that must
    be obtained from outside sources. Furthermore, actions of third parties
    have a significant impact on the outcomes DOT is trying to achieve. For
    example, without strong enforcement of seat-belt laws by the states,
    DOT's goals for reducing highway fatalities may not be achieved. Fiscal
    year 1999 is critical because the first GPRA report must be submitted
    to Congress on March 31, 2000.
        Mr. Chairman, this concludes our statement. I would be pleased to
    answer any questions.
                                     ______

                        General Accounting Office Report

         Major Management Challenges and Program Risks: Department of
                                 Transportation

                   (Letter Report, 01/01/99, GAO/OCG-99-13).

    The President of the Senate
    The Speaker of the House of Representatives

        This report addresses the major performance and management
    challenges that have limited the effectiveness of the Department of
    Transportation (DOT) in carrying out its missions. It also addresses
    corrective actions that DOT has taken or initiated on some of these
    challenges and further actions that are needed. For many years, we and
    others have documented challenges for the performance and management of
    the Department that encompass major program areas--in acquisition
    management, Year 2000 compliance, and safety and security programs in
    the aviation area; acquisition management by the Coast Guard; the
    oversight of large-dollar highway and transit projects; and
    departmentwide financial management. In addition, we have documented
    unique challenges facing airline competition and Amtrak's financial
    viability.
        Many of the challenges we identified are long-standing and will
    require sustained attention by DOT and the Congress. While DOT has
    efforts under way to address issues in some of its programs, these
    activities are in the early stages of implementation. It will take time
    to fully address the issues we and others have identified and to assess
    whether the Department has resolved them. We have designated as high
    risk two major challenges facing DOT--significant cost overruns,
    schedule delays and performance shortfalls experienced by the
    multibillion-dollar air traffic control modernization program and
    serious financial management weaknesses at the Federal Aviation
    Administration.
        This report is part of a special series entitled the Performance
    and Accountability Series: Major Management Challenges and Program
    Risks. The series contains separate reports on 20 agencies--one on each
    of the cabinet departments and on most major independent agencies as
    well as the U.S. Postal Service. The series also includes a
    governmentwide report that draws from the agency-specific reports to
    identify the performance and management challenges requiring attention
    across the federal government. As a companion volume to this series,
    GAO is issuing an update to those government operations and programs
    that its work has identified as ``high risk'' because of their greater
    vulnerabilities to waste, fraud, abuse, and mismanagement. High-risk
    government operations are also identified and discussed in detail in
    the appropriate performance and accountability series agency reports.
        The performance and accountability series was done at the request
    of the Majority Leader of the House of Representatives, Dick Armey; the
    Chairman of the House Government Reform Committee, Dan Burton; the
    Chairman of the House Budget Committee, John Kasich; the Chairman of
    the Senate Committee on Governmental Affairs, Fred Thompson; the
    Chairman of the Senate Budget Committee, Pete Domenici; and Senator
    Larry Craig. The series was subsequently cosponsored by the Ranking
    Minority Member of the House Government Reform Committee, Henry A.
    Waxman; the Ranking Minority Member, Subcommittee on Government
    Management, Information and Technology, House Government Reform
    Committee, Dennis J. Kucinich; Senator Joseph I. Lieberman; and Senator
    Carl Levin.
        Copies of this report series are being sent to the President, the
    congressional leadership, all other Members of the Congress, the
    Director of the Office of Management and Budget, the Secretary of
    Transportation, and the heads of other major departments and agencies.
                                               David M. Walker,
                              Comptroller General of the United States.
                                    overview
        With a budget of $48 billion in fiscal year 1999, the Department of
    Transportation (DOT) faces critical challenges as it attempts to ensure
    the safe and efficient movement of people and the cost-effective
    investment of resources in the nation's transportation infrastructure,
    including its highways and transit systems, airports, airways, ports,
    and waterways. While DOT has had many successes in improving the
    nation's transportation systems, it has also experienced problems that
    have impeded its ability to achieve these objectives. We, DOT's
    Inspector General, and the Department itself have documented these
    problems and recommended solutions. Although some actions have been
    taken to address these recommendations, major performance and
    management challenges remain.
                                 the challenges
    Acquisition of major aviation and Coast Guard systems lacks adequate
            management and planning
        The Federal Aviation Administration's (FAA) and the U.S. Coast
    Guard's major acquisition programs continue to face significant
    challenges that require management attention. Over the past 17 years,
    FAA's multibillion-dollar air traffic control modernization program has
    experienced cost overruns, delays, and performance shortfalls of large
    proportions. The Congress has appropriated over $25 billion for the
    program through fiscal year 1998, and FAA estimates that the program
    will need an additional $17 billion for fiscal years 1999 through 2004.
    Because of its size, complexity, cost, and problem-plagued past, we
    have designated this program as a high-risk information technology
    initiative since 1995. The Coast Guard is planning potentially the
    largest acquisition project in its history, a 20-year, $9.8 billion
    project to replace or modernize many of its ships and aircraft.
    However, we found that the Coast Guard needs to more thoroughly address
    the project's justification and affordability. For example, the
    remaining useful life of the aircraft--and perhaps the ships--may be
    much longer than the agency originally estimated. We recommended that
    DOT and the Coast Guard take several steps to improve their planning
    process, such as revising acquisition guidelines so future projects are
    based on accurate and complete data.
    Serious challenges remain in resolving FAA'S year 2000 risks
        FAA faces considerable challenges in making its computer systems
    ready for the year 2000. In August 1998, we testified that FAA was
    unlikely to complete all critical tests in time and that unresolved
    risks--including those associated with data exchanges, international
    coordination, reliance on the telecommunications infrastructure, and
    business continuity planning--threatened aviation operations. The
    implications of FAA's not meeting the Year 2000 deadline are enormous
    and could affect hundreds of thousands of people through customer's
    inconvenience, increased airline costs, grounded or delayed flights, or
    degraded levels of safety.
    FAA and the nation's airports face funding uncertainties
        DOT and the Congress face a challenge in reaching agreement on the
    amount and source of long-term financing for FAA and the nation's
    airports. The National Civil Aviation Review Commission recently
    recommended that the Congress fund FAA through a combination of cost-
    based user charges, fuel taxes, and general fund revenues. However, we
    and others have noted that FAA lacks sufficiently detailed and reliable
    cost data to accurately determine the agency's costs. In addition,
    continued funding for airports will be critical to ensuring adequate
    capacity for the national airport system. From 1997 through 2001,
    planned development at airports might require as much as $10 billion
    per year nationwide, which would need to be obtained from a variety of
    public and private sources. Several proposals to increase airports'
    funding have emerged in recent years, including increasing the amount
    of funding from FAA, but many of them are controversial.
    Aviation safety and security programs need strengthening
        Over the years, we have identified numerous shortcomings in FAA's
    safety and security programs. Shortcomings in FAA's safety programs
    include the need for the agency to improve its oversight of the
    aviation industry, record complete information on inspections and
    enforcement actions, provide consistent information and adequate
    training for users of weather information, and resolve data protection
    issues to enhance the proactive use of recorded flight data to prevent
    accidents. In addition, while progress has been made in strengthening
    airport security, it will take years for FAA and the aviation industry
    to fully implement current initiatives.
    Lack of aviation competition contributes to high fares and poor service
            for some communities
        Although airline deregulation is generally considered to be a
    success by DOT and others, contributing to better service and lower
    fares for most travelers, not all communities have benefited from it.
    In a number of small and medium-sized communities, a lack of aviation
    competition contributes to higher fares and poorer service. Operating
    barriers--such as exclusive-use gate leases and ``slot'' controls that
    limit the number of takeoffs and landings at certain congested
    airports--contribute to higher fares and service problems by deterring
    new entrant airlines while fortifying established airlines' dominance
    at key airports. Recently proposed alliances between the nation's six
    largest airlines have raised additional concerns about competition.
    DOT needs to continue improving oversight of surface transportation
            projects
        Many large-dollar highway and transit projects, each costing
    hundreds of millions to billions of dollars, continue to incur cost
    increases, experience delays, and have difficulties acquiring needed
    financing. DOT's Federal Highway Administration provided over $21
    billion in fiscal year 1998 to assist the states in building and
    repairing highways and bridges. We have identified several options to
    help improve the management of these projects, particularly those
    involving large amounts of dollars, depending on the oversight role
    that the Congress chooses for the federal government. DOT's Federal
    Transit Administration (FTA)--with a budget of $4.8 billion in fiscal
    year 1998--has improved its oversight of federal transit grants.
    However, the agency needs complete, timely information to help ensure
    the correction of deficiencies found during its oversight reviews.
    Amtrak's financial condition is tenuous
        Despite efforts to control expenses and increase revenues, the
    National Railroad Passenger Corporation's (Amtrak) financial condition
    has substantially deteriorated in recent years. Since it began
    operations in 1971, Amtrak has received nearly $22 billion in federal
    subsidies for operating and capital expenses, and it is likely to
    remain heavily dependent on federal assistance well into the future.
    Amtrak loses about $2 for every dollar it earns in revenues from its
    train service, and only 1 of Amtrak's 40 routes covers its costs.
    Amtrak's deteriorating financial condition has raised the possibility
    of both bankruptcy and liquidation. The business decisions that Amtrak
    makes regarding the structure of its route system will play a crucial
    role in determining its long-term viability. While Amtrak has proposed
    cutting routes to improve its overall financial performance, it has
    encountered opposition because of the desire of local communities to
    see their service continued. Because there is no clear public policy
    that defines the role of passenger rail in the national transportation
    system and because Amtrak is likely to remain dependent on federal
    assistance, the Congress needs to decide on the nation's expectations
    for intercity rail and the scope of Amtrak's mission in providing that
    service.
    DOT lacks accountability for its financial activities
        DOT's lack of accountability for its financial activities impairs
    its ability to efficiently and effectively manage programs and exposes
    the Department to potential waste, fraud, mismanagement, and abuse.
    Since 1993, when the Office of Inspector General began auditing the
    financial statements of certain agencies within the Department, it has
    been unable to determine whether the reported financial results are
    correct and has thus been unable to express an opinion on the
    reliability of these statements. The Inspector General also has been
    unable to express an opinion on the reliability of the departmentwide
    statements since these statements were audited beginning with fiscal
    year 1996. A key issue affecting the ability to express an opinion on
    these financial statements has been DOT's inability to reliably
    determine the quantities, the locations, and the values of property,
    plant, and equipment and inventory, reported at $28.5 billion as of
    September 30, 1997. Serious financial management weaknesses at FAA
    contribute to this situation. Consequently, we have designated
    financial management at FAA as high-risk. In addition, DOT lacks a
    cost-accounting system or an alternative means of reliably accumulating
    and reporting the full cost of specific projects and activities. Due to
    the effects of the property, plant, and equipment, inventory, and cost-
    accounting deficiencies, it is unlikely that DOT can accurately
    determine costs and meaningfully link costs to performance measures.
    Progress and next steps
        Many of the challenges facing DOT are not new to either the
    Department or the Congress. Individual agencies within DOT have efforts
    under way to address some of them, but more remains to be done. For
    example, FAA has initiated activities to address many of our concerns
    about its air traffic control modernization program, such as developing
    a complete air traffic control systems architecture, but none are
    completed. FAA is also taking steps to address its Year 2000
    challenges, such as working with the International Civil Aviation
    Organization on international issues, although much remains to be done.
    We are continuing to review FAA's progress in these areas.
        FAA will need to continue efforts to fully implement its cost-
    accounting system so that it can use reliable and accurate data to
    improve its management and performance and to establish user fees as
    mandated by the Congress. While FAA is taking some steps to address
    shortcomings with its aviation safety program, including totally
    revamping its inspection program, eliminating the shortcomings will
    take considerable time and effort. We are also reviewing FAA's efforts
    in this area.
        To improve FTA's oversight of transit grants, the agency needs to
    complete implementation of a new information tracking system. This
    system will enable headquarters officials to better oversee grantee's
    performance. In addition, DOT has a plan for resolving the financial
    management deficiencies that were identified in its financial statement
    audits. However, the Department faces significant challenges in
    achieving its goal of receiving an unqualified audit opinion on its
    financial statements because of the numerous shortcomings that need to
    be addressed. Although strategic and annual performance plans,
    completed under the Government Performance and Results Act of 1993,
    discuss several of the challenges we identified, these plans generally
    provide insufficient details to address them.
        Adequately addressing many of the challenges we identified will
    require sustained attention by DOT and the Congress. For example, while
    DOT has attempted to enhance airline competition by such efforts as
    granting a limited number of additional slots at two airports, further
    actions, some of which are controversial, may be needed by the
    Congress, DOT, and the private sector. Finally, additional actions may
    be needed by the Congress to address long-term financing for FAA, the
    federal oversight role for large-dollar highway projects, and the
    future of Amtrak.
                    major performance and management issues
        With a budget of $48 billion in fiscal year 1999, DOT is
    responsible for ensuring the safe and efficient movement of people and
    the cost-effective investment of resources in the nation's
    transportation infrastructure, including its highways and transit
    systems, airports, airways, ports, and waterways. DOT employs about
    100,000 civilian and military people across the country, and its
    programs are administered by 10 operating administrations and
    bureaus.\1\ While DOT has had many successes in improving the nation's
    transportation systems, it has also faced challenges that have impeded
    its ability to achieve its objectives.
    ---------------------------------------------------------------------------
        \1\ DOT's administrations and bureaus are FAA, the Federal Highway
    Administration, the Federal Railroad Administration, FTA, the Maritime
    Administration, the National Highway Traffic Safety Administration, the
    Research and Special Programs Administration, the St. Lawrence Seaway
    Development Corporation, the U.S. Coast Guard, and the Bureau of
    Transportation Statistics.
    ---------------------------------------------------------------------------
        Over the years, we, DOT's Inspector General, the Department itself,
    and others have documented shortcomings with the performance and
    management of the Department and unique challenges facing air and
    passenger rail travel. This report summarizes our recent findings and
    recommended solutions concerning acquisition management by FAA and the
    Coast Guard, Year 2000 compliance by FAA, long-term funding for FAA and
    the nation's airports, aviation safety and security, aviation
    competition, oversight of surface transportation projects, Amtrak's
    financial condition, and financial management issues. This report also
    describes how DOT has addressed some of its weaknesses through plans
    that it has developed in response to the Government Performance and
    Results Act. In many cases, addressing the challenges we identified
    will require a sustained effort by DOT, working with other federal,
    state, and local stakeholders and the Congress.
    The acquisition of major aviation and Coast Guard systems lacks
            adequate management and planning
        FAA and the U.S. Coast Guard are undertaking long-term, costly
    programs to modernize and replace aging equipment. Our work has shown
    that these agencies need to improve the management of these programs to
    ensure that federal funds are effectively and efficiently used.
    The inadequate management of air traffic control modernization has led
            to many difficulties
        Faced with rapidly growing volumes of air traffic and aging
    equipment to control air traffic, in 1981 FAA initiated an ambitious
    air traffic control modernization program. The cost of this effort--
    which involves acquiring a vast network of radar and automated data-
    processing, navigation, and communications equipment and air traffic
    control facilities--is expected to total $42 billion through fiscal
    year 2004. The Congress has appropriated over $25 billion of the $42
    billion through fiscal year 1998, and FAA estimates that the program
    will need an additional $17 billion for fiscal years 1999 through 2004.
    Over the past 17 years, the modernization program has experienced cost
    overruns, delays, and performance shortfalls of large proportions.
    Because of its size, complexity, cost, and problem-plagued past, we
    designated the air traffic control modernization program as a high-risk
    information technology initiative in 1995. Many of the shortcomings we
    reported then remain unresolved, and we continue to believe this
    program remains at high risk.
        Our work has identified some of the root causes of the
    modernization program's problems and pinpointed solutions to address
    them:
      --The many systems in the modernization program have been developed
            without the benefit of a complete systems architecture, or
            overall blueprint, to guide the program. The result has been
            unnecessarily higher spending to buy, integrate, and maintain
            hardware and software. We recommended that FAA develop and
            enforce a complete systems architecture and implement a
            management structure that is similar to the Chief Information
            Officer (CIO) provisions of the Clinger-Cohen Act of 1996.
      --FAA lacks the reliable cost-estimating processes and cost-
            accounting practices needed to effectively manage information
            technology investments, leaving it at risk to make ill-informed
            decisions on critical multimillion-, even billion-, dollar air
            traffic control systems. We recommended that FAA
            institutionalize defined processes for estimating the projects'
            costs and develop and implement a managerial cost-accounting
            capability.
      --FAA's processes for acquiring software, the most costly and complex
            component of air traffic control systems, are ad hoc, sometimes
            chaotic, and not repeatable across projects. As a result, FAA
            is at great risk of not delivering promised software
            capabilities on time and within budget. Furthermore, FAA lacks
            an effective approach to improve software acquisition
            processes. We recommended that FAA improve its software
            acquisition capabilities by institutionalizing mature
            acquisition processes and reiterated our prior recommendation
            that a CIO organizational structure be established.
      --FAA's organizational culture has impaired the acquisition process.
            Employees have acted in ways that did not reflect a strong
            enough commitment to mission focus, accountability,
            coordination, and adaptability. We recommended that FAA develop
            a comprehensive strategy for addressing this issue.
        FAA is responding to many of these recommendations. Specifically,
    FAA has initiated activities to develop a complete air traffic control
    systems architecture, to institutionalize defined cost-estimating
    processes, to acquire a cost-accounting system, to improve its software
    acquisition capabilities, and to improve its organizational culture.
    Most recently, FAA has committed to hiring a CIO who would report
    directly to FAA's Administrator, a structure similar to the provisions
    of the Clinger-Cohen Act of 1996. In addition, DOT's 1999 performance
    plan, which was submitted to the Congress in February 1998, describes
    FAA's actions to improve certain aspects of the air traffic control
    modernization program, such as poor processes for estimating costs and
    poor accounting practices. However, the plan does not include goals for
    mitigating the risks associated with the modernization or measures for
    determining progress towards these goals.
        Moreover, in an effort to restructure the modernization program,
    FAA--in consultation with the aviation community--is developing a
    phased approach to modernization, including a new way of managing air
    traffic known as ``free flight.'' Free flight would allow pilots more
    flexibility in choosing routes for their aircraft than the present
    system of highly structured rules and procedures for air traffic
    operations. Free flight, which will be implemented in phases, is
    expected to provide benefits to users and help improve aviation safety
    and efficiency. The agency, however, faces many challenges in
    implementing free flight in a cost-effective manner. The challenges for
    FAA include (1) providing effective leadership and management of
    modernization efforts, (2) developing plans in collaboration with the
    aviation community that are sufficiently detailed to move forward with
    the implementation of free flight, and (3) addressing outstanding
    issues related to the development and deployment of technology.
        While improvements have been initiated, FAA's efforts to address
    our concerns are not yet completed, and several major systems
    development projects continue to face challenges that could affect
    their costs, schedules, and performance. For example, in March 1998 we
    reported that the Standard Terminal Automation Replacement System--
    which entails replacing old computers, controller workstations, and
    related equipment at about 170 of FAA's terminal air traffic control
    facilities--is facing difficulties staying within its cost baseline.
    Costs for the new air traffic controller workstations are increasing
    because of such unexpected factors as the need for additional resources
    to maintain the program's schedule and design changes that air traffic
    controllers called for after reviewing the equipment. These unexpected
    factors led FAA to reprogram $29 million in fiscal year 1998 funds for
    the project. In addition, the project's baseline schedule called for
    equipment to become operational at the first sites in December 1998.
    Since that time, we have reported that FAA estimates that the project's
    cost has the potential to increase from $294 million to $410 million
    over the approved baseline and that the project's initial completion
    could be delayed by almost 2\1/2\ years.
        Additionally, we recently reported that FAA is not effectively
    managing information security for future air traffic control
    modernization systems. The agency does not consistently include well-
    formulated security requirements in specifications for all new
    modernization systems, as required by FAA policy. Furthermore, FAA does
    not have a well-defined security architecture, a security concept of
    operations, or security standards--all of which are needed to define
    and help ensure adequate security throughout our nation's air traffic
    control network. We recommended that FAA ensure that specifications for
    all new air traffic control systems include security requirements based
    on detailed security assessments and that the agency establish and
    implement a security architecture, a security concept of operations,
    and security standards. The agency has not yet officially responded to
    our recommendations.
    The Coast Guard needs to more thoroughly address acquisition-planning
            issues
        The U.S. Coast Guard is planning what is potentially the largest
    acquisition project in its history. This effort, the Deepwater
    Capability Replacement Project, involves replacing or modernizing many
    of the Coast Guard's 92 ships and 209 airplanes and helicopters.
    However, in October 1998, we reported that the Coast Guard needs to
    more thoroughly address the project's justification and affordability.
    The Coast Guard initially estimated that the project would cost $9.8
    billion (in constant dollars) over a 20-year period. The project is
    still in its early stages, but initial planning estimates call for
    spending $300 million starting in fiscal year 2001 and $500 million
    each year over the next 19 years.
        Although the Coast Guard is correct in starting now to explore how
    best to modernize or replace its deepwater ships and aircraft, the
    Deepwater Project's only formal justification that was developed at the
    time of our review did not accurately or fully depict the need for
    replacement or modernization. In fact, the remaining useful life of the
    Coast Guard's deepwater aircraft--and perhaps its ships--may be much
    longer than the agency originally estimated. The Coast Guard withdrew
    the justification on the basis of concerns expressed by the Office of
    Management and Budget and is developing more accurate and updated
    information. We recommended that DOT and the Coast Guard take several
    steps to improve their planning processes, such as expediting the
    development and the issuance of updated information on the remaining
    service life of ships and aircraft and revising its acquisition
    guidelines so that future projects are based on more accurate and
    complete data. In addition, the agency could face major financial
    obstacles in proceeding with a project that costs as much as initially
    proposed. At an estimated $500 million a year, expenditures for the
    project would take virtually all of the Coast Guard's anticipated
    spending for capital projects. To align contractors' proposals more
    realistically with the agency's budget and other capital needs, we
    recommended that the Coast Guard evaluate whether contractors should
    base their proposals on a funding level that may be lower than $500
    million each year. While Coast Guard officials seemed receptive to our
    recommendations, DOT has not officially responded to our report.
    Key contacts
        John H. Anderson, Jr., Director, Transportation Issues Resources,
    Community, and Economic Development Division, (202) 512-2834,
    andersonj.rced@gao.gov
        Joel C. Willemssen, Director, Civil Agencies Information Systems
    Accounting and Information Management Division, (202) 512-6408,
    willemssenj.aimd@gao.gov
    Serious challenges remain in resolving FAA's year 2000 risks
        To perform its mission, FAA depends on an extensive array of
    information-processing and communications technologies. Without these
    specialized computer systems, the agency could not effectively control
    air traffic, target airlines for inspection, or provide up-to-date
    weather information to pilots and air traffic controllers. For example,
    each of FAA's 20 en route air traffic control facilities, which monitor
    aircraft at the higher altitudes between airports, depends on about 50
    interrelated computer systems to safely guide and direct aircraft. The
    implications of FAA's not meeting the Year 2000 deadline are enormous
    and could affect hundreds of thousands of people through customers'
    inconvenience, increased airline costs, grounded or delayed flights, or
    degraded levels of safety.
        In early 1998, we reported that FAA was severely behind schedule in
    implementing an effective Year 2000 program and warned that systems
    that support critical operations--such as monitoring and controlling
    air traffic--could fail to perform as needed unless proper date-related
    calculations could be ensured. We made a series of recommendations
    aimed at assisting FAA in completing critical Year 2000 activities,
    including (1) completing an agencywide plan that provides the FAA Year
    2000 program manager with the authority to enforce policy and that
    outlines the agency's overall strategy and (2) completing inventories
    and assessments of all systems and data interfaces. FAA agreed with
    these recommendations and has made progress in implementing them. For
    example, a Year 2000 program manager now reports directly to FAA's
    Administrator and oversees a program plan with specific goals and
    milestones.
        More recently, however, we testified that FAA still faces serious
    challenges in addressing its Year 2000 problem. Specifically, in August
    1998, we testified that FAA was unlikely to complete critical testing
    activities in time because its projections for completing testing and
    implementation activities were based on very optimistic schedules and
    because of the complexity of the agency's testing process. We also
    reported that unresolved crosscutting risks--including risks associated
    with data exchanges, international coordination, reliance on the
    telecommunications infrastructure, and business continuity planning--
    threatened aviation operations. FAA is taking steps to address these
    issues. For example, FAA is working with the International Civil
    Aviation Organization on international issues. We are continuing to
    review FAA's progress in addressing these risks.
    Key contact
        Joel C. Willemssen, Director. Civil Agencies Information Systems
    Accounting and Information Management Division, (202) 512-6408,
    willemssenj.aimd@gao.gov
    FAA and the nation's airports face funding uncertainties
        DOT and the Congress face a challenge in reaching agreement on the
    amount and source of long-term financing for FAA and the nation's
    airports. At present, FAA's funding is made available by the Congress
    from general fund and Airport and Airway Trust Fund appropriations,
    which was established to finance FAA's investments in the airport and
    airway system, including construction and safety improvements at
    airports and technological upgrades to the air traffic control system.
    The Trust Fund receives revenues from taxes on domestic and
    international travel, domestic cargo transported by air, and
    noncommercial aviation fuel. With the uncommitted balance in the Trust
    Fund estimated to increase to over $40 billion by 2008, some have
    advocated taking the fund off budget to allow FAA to spend all of the
    revenues collected from aviation taxes. Despite several assessments
    over the past 2 years, a consensus does not exist regarding how to meet
    FAA's future funding needs.\2\
    ---------------------------------------------------------------------------
        \2\ See ``Federal Aviation Administration: Independent Financial
    Assessment,'' Coopers & Lybrand (Feb. 28, 1997); ``Avoiding Aviation
    Gridlock & Reducing the Accident Rate,'' National Civil Aviation Review
    Commission (Dec. 1997); and ``Air Traffic Control: Issues in Allocating
    Costs for Air Traffic Services to DOD and Other Users'' (GAO/RCED-97-
    106, Apr. 25, 1997).
    ---------------------------------------------------------------------------
        The latest proposal for funding FAA comes from the National Civil
    Aviation Review Commission, which recommends that the Congress fund FAA
    through a combination of cost-based user charges, fuel taxes, and
    general fund revenues. In the past, we and others have noted that FAA
    has lacked sufficiently detailed or reliable cost data. These concerns
    are still relevant. The Commission's report acknowledges that reliable,
    comprehensive cost-accounting data are needed to accurately determine
    the agency's costs. FAA has begun implementing a cost-accounting
    system, which will be a cornerstone for FAA's improving its efficiency.
    Program officials had planned to begin collecting cost data for air
    traffic services by October 1998, but complications associated with the
    method used to allocate costs have delayed this milestone. FAA will
    need to continue with efforts to fully implement its cost-accounting
    system so that it can use reliable and accurate data to improve its
    management and performance and to establish user fees, as mandated by
    the Congress.
        Continued funding for airports will also be critical to ensuring
    adequate capacity for the national airport system and avoiding
    congestion and delays. In April 1997, we reported that planned
    development at airports might cost as much as $10 billion per year over
    the next 5 years. Airports rely on a variety of public and private
    funding sources to finance their capital development. In 1996, $1.4
    billion in federal funding was made available for capital development
    from the Airport and Airway Trust Fund. Other major sources of funding
    include airport and special facility bonds and passenger facility
    charges paid on each airline ticket. The amount and type of funding
    vary with each airport's size. While the need for funding at larger
    airports may be considerable, these airports also have access to many
    funding sources, particularly tax-exempt bonds. The more difficult
    challenge may rest with meeting the funding needs of smaller airports.
    Smaller airports confront a potential funding shortfall that, in
    percentage terms, is far greater than for larger airports. Moreover,
    these airports have the fewest funding options, relying on federal
    grants for half of their funding. Maintaining the financial viability
    of these smaller airports will require adequate funding from existing
    federal and state grant programs as well as more innovative
    applications of existing funding.
        Several proposals to increase airport funding have emerged in
    recent years. These include increasing the amount of funding for FAA's
    Airport Improvement Program, raising or eliminating the ceiling on
    passenger facility charges, and leveraging existing funding sources.
    Many of these proposals are controversial and vary in the degree to
    which they help specific types of airports. For example, increasing the
    amount of funding for the Airport Improvement Program would help
    smaller airports more, while raising passenger facility charges would
    help larger airports more. In addition, airports and airlines have
    disagreed on the need to increase the ceiling on passenger facility
    charges above its current $3.00 level. Airport officials contend that
    many needed projects are going unfunded, while airline representatives
    dispute this, saying that airlines are willing to fund important
    projects through airline assessments. To address the funding issue, FAA
    has been testing several innovative funding approaches through a small
    pilot program. However, we believe that this pilot program is likely to
    yield only marginal benefits because of the limited participation by
    airports.
    Key contact
        John H. Anderson, Jr., Director, Transportation Issues Resources,
    Community, and Economic Development Division, (202) 512-2834,
    andersonj.rced@gao.gov
    Aviation safety and security programs need strengthening
        The aviation accident rate per mile traveled has remained low but
    flat over the last 2 decades. Unless the accident rate is reduced,
    however, as air travel continues to grow, the actual number of
    accidents will increase. We have identified numerous weaknesses in
    FAA's inspection, oversight, and enforcement activities. During the
    last year, we have also noted shortcomings in other safety programs,
    such as (1) the lack of consistent information or adequate training for
    users of weather information and (2) unresolved data protection issues,
    which impede the proactive use of flight data to prevent accidents.
    While FAA is taking some steps to address the shortcomings in its
    safety programs, eliminating those shortcomings will take considerable
    time and effort. In addition, while progress is being made in
    strengthening airport security, it will take several years to address
    all problem areas, and FAA's weak computer security practices present
    significant vulnerabilities to the air traffic control system.
    Weaknesses in aviation safety programs need to be addressed
        We have found substantial weaknesses in FAA's safety inspection,
    oversight, and enforcement activities. FAA's aviation safety programs
    provide for the initial certification, periodic surveillance, and
    inspection of airlines, airports, repair stations, and other aviation
    entities, as well as of pilots and mechanics. These inspections are
    intended not only to detect actual violations but also to serve as part
    of an early warning system for identifying potential systemwide
    weaknesses.
        Over the years, we have examined FAA's inspection program and
    recommended improvements. In our most recent report, we pointed out
    that work performed by aviation repair stations--the 2,800 facilities
    that repair and maintain nearly half of all U.S. passenger and cargo
    aircraft--was cited as a factor in several accidents. About 600 of
    FAA's 3,000 inspectors are responsible for inspecting repair stations
    to ensure that work conducted by these facilities is competently done.
    FAA is meeting its goal of inspecting every repair station at least
    once a year by relying primarily on reviews by individual inspectors.
    However, when FAA uses teams rather than individual inspectors to
    review facilities, the review is more effective, uncovering more
    systemic and long-standing problems. Furthermore, we could not find
    sufficient documentation to determine how well FAA followed up to
    ensure that the deficiencies found during the inspections were
    corrected.
        To improve its oversight of repair stations, we recommended that
    FAA expand the use of locally based teams to inspect them, particularly
    those that are large, are complex, have higher rates of noncompliance,
    or meet predetermined risk indicators. In addition, we recommended that
    FAA specify what documentation should be kept on inspection results,
    monitor efforts to improve the quality of data for its new management
    information system, and expedite efforts to upgrade regulations
    concerning the oversight of repair stations. FAA agreed with these
    recommendations but has not indicated how or when they would be
    implemented.
        When FAA's inspectors identify violations, agencywide guidance
    requires that they be investigated and appropriately addressed, and
    program office guidance requires that they be reported. We found that
    FAA's information on compliance in the aviation industry is incomplete
    and of limited use in providing early warning of potential risks and in
    targeting inspection resources to the greatest risks. Many inspectors
    do not report all problems or violations they observe, and many
    inspections are not thorough or structured enough to detect many
    violations. In addition, FAA cannot readily set risk-based priorities
    for resolving enforcement cases, in part, because its enforcement
    database does not distinguish major from minor cases. Finally, the
    impact of FAA's enforcement actions on compliance is difficult to
    assess because the agency has not followed up on the aviation
    industry's implementation of corrective actions.
        We recommended several actions to improve the usefulness of FAA's
    inspection and enforcement databases and the coordination of inspection
    and enforcement efforts, including (1) revising FAA's order on
    compliance and enforcement to specify that inspection staff are
    required to report all observed problems and violations and (2)
    providing guidance to inspectors on how to distinguish major from minor
    violations and to legal staff on how to identify major legal cases. In
    response to our recommendations and others' criticisms, FAA has
    developed and begun to implement a fundamentally reengineered system--
    the Air Transportation Oversight System--to oversee airline safety. We
    are monitoring the program's implementation and will report on its
    progress in the spring of 1999.
        Poor weather conditions have been cited as a cause or a
    contributing factor in nearly a quarter of the aviation accidents
    during the last 10 years. Because of the significant impact of
    hazardous weather on aviation safety and efficiency, improving the
    weather information available to all users of the aviation system
    should be one of FAA's top priorities. However, a panel of experts that
    we convened concluded that FAA has done a poor job in addressing the
    most significant concerns raised by previous reports by the National
    Research Council and an FAA advisory committee. For example, the panel
    concluded that FAA has not exercised leadership for aviation weather
    services, partly because it has lacked a clear policy defining its role
    in aviation weather activities and partly because of organizational
    inefficiencies. The panel also concluded that providing consistent
    weather information and training for users has remained a low priority
    for FAA. The implementation plan FAA proposes to issue later this year
    provides the agency with an opportunity to respond to these continuing
    concerns with stronger evidence of its commitment to weather issues.
        The analysis of aircraft data recorded during flight has played a
    crucial role in determining the causes of crashes. Recently, however,
    some airlines have begun to proactively analyze flight data from
    uneventful airline flights to identify potential problems and correct
    them before they lead to accidents. The early experiences of airlines
    that have established such programs--called Flight Operational Quality
    Assurance programs--attest to the ability of such programs to enhance
    aviation safety. In December 1997, we reported that 4 U.S. airlines and
    33 foreign airlines had implemented such programs. The primary factor
    impeding further implementation is unresolved data protection issues.
    Airline managers and pilots have raised concerns about the use of such
    data by FAA for enforcement or disciplinary purposes and about
    disclosure to the media and public. The Federal Aviation Administration
    Reauthorization Act of 1996 directed the Administrator to issue
    regulations protecting data collected under the programs from public
    disclosure. As of November 1998, FAA had not issued a rulemaking to
    implement policies on either enforcement or disclosure.
        DOT's 1999 performance plan includes a goal to improve aviation
    safety by reducing by 80 percent the number of fatal aviation accidents
    per 100,000 departures by 2007. However, the plan needs baseline data
    from which to measure the reduction.
    Challenges remain in addressing aviation security issues
        Over the last several years, the changing threat of terrorist
    activities has heightened the need to improve domestic aviation
    security. We and others have highlighted improvements needed to address
    this threat. As a result, FAA is implementing recommendations made in
    February 1997 by the White House Commission on Aviation Safety and
    Security (the Gore Commission) and mandates contained in the Federal
    Aviation Administration Reauthorization Act of 1996 to improve security
    at airports. Expeditious implementation of the security initiatives by
    FAA and the aviation industry is crucial to improving the security of
    domestic aviation.
        FAA has made some progress in five critical areas as recommended by
    the Gore Commission and mandated by the Congress, but, given the
    current implementation schedule, it will take years for FAA and the
    aviation industry to fully implement all the initiatives. These five
    areas, which we reported on in May 1998, are passenger profiling,
    explosives detection technologies, passenger-bag matching,
    vulnerability assessments, and the certification of screening companies
    and the performance of security screeners. We reported that FAA had
    encountered delays of up to 12 months in implementing these
    initiatives, in part, because they are more complex than originally
    envisioned and involve new and relatively untested technologies. Delays
    have also been caused by limited funding and problems with equipment
    installation and contractors' performance.
        While progress has been made in strengthening aviation security,
    completing the current initiatives will require additional financial
    resources and a sustained commitment by the federal government and the
    aviation industry. For example, current funding is sufficient to
    provide only a limited percentage of the flying public at selected
    airports with protection against concealed explosives in checked
    baggage. Several years ago, FAA estimated that the cost of acquiring
    and installing the certified systems at the nation's 75 busiest
    airports could range from $400 million to $2.2 billion, depending on
    the number and the cost of the machines installed.
        Additional improvements in airport security will need sustained,
    long-term efforts by FAA and the aviation industry. To maintain
    momentum, it is important for the Congress to provide continual
    oversight and to address funding issues. Starting with fiscal year
    1998, FAA began including goals and specific performance measures for
    its security program in its annual budget submissions. FAA also
    incorporated goals and performance measures for airport security into
    its 1998 strategic plan. By using these established goals and
    performance measures, the Congress can better oversee FAA's progress in
    improving airport security.
        Securing our nation's airports alone does not ensure safe air
    travel. It is also critical to secure FAA's air traffic control
    computer systems that provide information to air traffic controllers
    and aircraft flight crews to help ensure the safe and expeditious
    movement of aircraft. A failure to adequately protect these systems, as
    well as the facilities that house them, could cause a nationwide
    disruption of air traffic or even the loss of life due to collisions.
    We found that FAA is ineffective in all the critical areas included in
    our computer security review of its air traffic control computer
    systems.
        In the area of physical security, known weaknesses exist at many
    air traffic control facilities. For example, a March 1997 inspection of
    one facility that controls aircraft disclosed numerous physical
    security weaknesses, including unauthorized personnel being granted
    unescorted access to restricted areas. FAA did not know of weaknesses
    that may have existed at other locations because it had not assessed
    the physical security controls at 187 facilities since 1993. Similarly,
    FAA does not know how vulnerable its operational air traffic control
    systems are and cannot adequately protect them until it performs the
    appropriate risk assessments of these systems and certifies and
    accredits them. In addition, the agency does not consistently include
    well-formulated security requirements in its specifications for new
    modernization systems. Finally, FAA's management structure and
    implementation of policy for air traffic control computer security are
    not effective. Security responsibilities are distributed among three
    organizations, all of which have been remiss in their security duties.
        In December 1998, we reported that FAA officials indicated that
    they had inspected all 368 facilities and had accredited over half of
    these facilities. However, the agency still needs to take action on our
    remaining recommendations that included (1) ensuring that all systems
    are assessed, certified, and accredited at least every 3 years and (2)
    establishing an effective management structure for developing,
    implementing, and enforcing air traffic computer security policy.
    Key contacts
        John H. Anderson, Jr., Director, Transportation Issues Resources,
    Community, and Economic Development Division, (202) 512-2834,
    andersonj.rced@gao.gov
        Joel C. Willemssen, Director, Civil Agencies Information Systems
    Accounting and Information Management Division, (202) 512-6408,
    willemssenj.aimd@gao.gov
    Lack of aviation competition contributes to high fares and poor service
            for some communities
        Deregulation of the airline industry in 1978 is generally
    considered to be a success by DOT and others, contributing to lower
    fares and better service for most air travelers largely because of
    increased competition spurred by the entry of new airlines into the
    industry and established airlines into new markets. However, a number
    of small and medium-sized communities have not experienced such entry
    and thus have experienced higher fares and/or less convenient service
    since deregulation.
        Problems with access to certain airports and the cumulative effect
    of marketing strategies employed by established airlines have
    contributed to higher fares and poor service. To minimize congestion
    and reduce flight delays, FAA has set limits since 1969 on the number
    of takeoffs or landings--referred to as slots--that can occur during
    certain periods of the day at four congested airports--Chicago's
    O'Hare, Ronald Reagan Washington National, and New York's Kennedy and
    LaGuardia. A few airlines control most of the slots at these airports,
    which limits new entrants. Furthermore, the vast majority of gates at
    six airports in the East and Upper Midwest are exclusively leased--
    usually to just one airline--making it very difficult for other
    airlines to gain competitive access to these airports. In addition, by
    prohibiting flights to and from LaGuardia and National airports that
    exceed certain distances, perimeter rules limit the ability of airlines
    based in the West to compete at these airports. These operating
    barriers, combined with certain marketing strategies by established
    carriers, have deterred new entrant airlines while fortifying
    established carriers' dominance at key hubs.
        In addition, recently proposed alliances between the nation's six
    largest airlines have also raised concerns about competition. Three
    pairs of alliances have been proposed--between Northwest Airlines and
    Continental Airlines, Delta Air Lines and United Airlines, and American
    Airlines and US Airways. In June 1998, we testified that, while the
    alliances might offer some benefits to consumers, if all three occur,
    the number of independent airlines providing service on a significant
    number of domestic airline routes could decline, potentially reducing
    the choices for millions of passengers each year. We are further
    reviewing the proposed alliances and plan to report on them early in
    1999.
        Increasing competition and improving air service at airports
    serving communities that have not benefited from deregulation will
    likely entail a range of solutions--some of which are controversial--by
    DOT, the Congress, and the private sector. To enhance competition, DOT
    has begun to grant a limited number of slots to new entrants at O'Hare
    and LaGuardia airports. In addition, DOT has expressed concerns about
    potentially overaggressive attempts by some established carriers to
    thwart new entry. According to DOT, in recent years, there has been an
    increasing number of alleged anticompetitive practices--such as
    predatory conduct--aimed at new competition, particularly at major
    hubs. In April 1998, DOT issued a draft policy that identifies
    anticompetitive behavior and factors that DOT will consider if it
    decides to pursue formal enforcement actions to correct such behavior.
    The proposed guidelines have been very controversial, and DOT has
    received hundreds of comments about them. The Omnibus Consolidated and
    Emergency Supplemental Appropriations Act for fiscal year 1999 requires
    DOT to send the final guidelines to the Congress and stipulates that
    they shall not become effective until at least 12 weeks after receipt.
        In addition, legislation was introduced, but not passed, in the
    Congress in 1997 that addressed several barriers to competition: slot
    controls, perimeter rules, and predatory behavior by air carriers.
    These issues are expected to be raised again by the next Congress.
    Other issues--such as improving the availability of gates and
    determining whether or not to relax restrictions on the foreign
    ownership and control of U.S. airlines--may also need to be considered.
    DOT expects to complete a study in the spring of 1999 that will address
    airports' practices, including the availability of gates, and their
    effects on competition.
    Key contact
        John H. Anderson, Jr., Director, Transportation Issues Resources,
    Community, and Economic Development Division, (202) 512-2834,
    andersonj.rced@gao.gov
      dot needs to continue improving oversight of surface transportation
                                    projects
        Many large-dollar highway and transit projects, each costing
    hundreds of millions to billions of dollars, continue to incur cost
    increases, experience delays, and have difficulties acquiring needed
    financing. We have found, particularly for large-dollar projects, that
    costs have increased and financing has become more difficult at the
    same time that federal, state, and local governments must deal with the
    need for balanced budgets and many competing priorities. This situation
    is even more critical in light of the recently passed 6-year, $218
    billion Transportation Equity Act for the 21st Century, which will fund
    thousands of new major highway and mass transit projects.
    Improvements possible in oversight of highway projects
        DOT's Federal Highway Administration (FHWA) provided over $21
    billion in fiscal year 1998 to assist the states in repairing and
    replacing their aging infrastructure and enhancing the performance of
    their highways and bridges. In many cases, meeting these needs takes
    the form of projects costing hundreds of millions to billions of
    dollars. These projects traditionally take longer to build and have a
    greater potential to experience substantial cost increases and delays.
    For example, the Central Artery/Tunnel project in Boston is the most
    expensive and complex federally assisted highway project ever
    undertaken. Scheduled to be completed in 2004, the project will build
    or reconstruct about 7.5 miles of urban highways, about half of which
    will be underground. The state of Massachusetts has been taking steps
    to contain costs, but, unless additional savings can be found,
    increased construction costs are likely to push the project's total net
    cost higher than the current $10.8 billion estimate.
        In February 1997, we reported several options that could improve
    the management of large-dollar highway projects, depending on the
    oversight role that the Congress chooses for the federal government.
      --One option--once DOT or the Congress establishes an appropriate
            dollar threshold and definition for large-dollar highway
            projects--would be for states to prepare total cost estimates
            for such projects. We have found that one reason costs increase
            on large-dollar projects over time is that the initial cost
            estimates are preliminary and not designed to be reliable
            predictors of a project's total costs.
      --Another option would be for states to track progress on these
            projects against their initial estimates of baseline costs.
            While cost growth has occurred on many large-dollar projects,
            the amount of and reasons for these increases cannot be
            determined because data are not readily available from FHWA or
            state highway departments. Preparing estimates of baseline
            costs and schedules could improve the management of large-
            dollar projects by providing managers with real-time
            information for identifying problems early and for making
            decisions about changes to the projects that could affect
            costs. Tracking progress could also create a database that
            would allow for the identification of problems commonly
            experienced by projects and would provide a better basis for
            estimating costs in the future.
      --Another option would be to establish performance goals and
            strategies for controlling costs as a large-dollar project
            moves through its design and construction phases.
      --Finally, another option would be to establish a process for the
            federal approval of large-dollar projects. FHWA does not
            approve projects at their outset; its approval consists of a
            series of incremental approvals that occur over the years
            required to plan, design, and build them. Requiring federal
            approval at the outset--including the approval of cost
            estimates and finance plans--could provide greater certainty in
            state planning and could help ensure successful financing by
            providing additional assurances to potential funding sources.
        The Congress has recently taken steps to improve the management of
    large-dollar highway projects. The Transportation Equity Act for the
    21st Century requires the states to submit finance plans for highway
    projects that are expected to cost $1 billion or more. However, it will
    be up to FHWA to develop regulations that indicate the specific
    standards and information requirements for these plans.
       oversight of transit projects improving, but better follow-up on
                              noncompliance needed
        The Federal Transit Administration (FTA)--with a budget of $4.8
    billion for fiscal year 1998--has improved its oversight of federal
    transit grants. However, the agency needs to continue to do more to
    help ensure the timely correction of deficiencies found during its
    oversight reviews. In 1992, we designated FTA's management and
    oversight of its grants as a high-risk area that was especially
    vulnerable to fraud, waste, abuse, and mismanagement. In 1995, as a
    result of various initiatives that FTA was undertaking to improve its
    grants management oversight, we removed the agency from our high-risk
    list with the understanding that we would continue to monitor the
    progress of its oversight initiatives. In April 1998, we reported that
    FTA had strengthened its oversight of federal transit grants. FTA is
    continuing to enhance the quality and the consistency of its oversight
    by improving guidance and training for staff and grantees,
    standardizing oversight procedures, and effectively using contractor
    staff. In particular, the agency's risk assessment process helps target
    limited oversight resources and provides a strong foundation for
    improved oversight. FTA is emphasizing not only the local financial
    commitment of grantees seeking federal funding for new projects but is
    also hiring financial management contractors to review and oversee the
    financial viability of projects with existing grant agreements.
        However, FTA needs to continue to do more to help ensure the timely
    correction of deficiencies found during its oversight reviews of
    transit grants. We found that, frequently, some grantees still did not
    meet FTA's time frames for corrective action and that FTA had allowed
    compliance deadlines to be revised, which enabled grantees to delay
    corrective action. Also, FTA's oversight information system lacks
    complete, timely data; hence, the information cannot be used
    effectively by FTA's headquarters officials to manage and monitor
    grantees' compliance with the agency's requirements. The system is
    intended to track the resolution of oversight findings and has the
    potential to be a useful tool in monitoring compliance, identifying
    problems, and assessing the overall effectiveness of the oversight
    program in meeting performance standards. Currently, however, the
    information in the system is not updated as required by regional staff,
    nor is it used by headquarters officials to help manage or monitor the
    oversight activities of regional staff--leaving FTA susceptible to and
    unable to quickly respond to situations in its regional offices that
    might compromise good oversight. According to FTA, a new tracking
    system has been developed to address these concerns, but it has not
    been fully implemented yet.
    Key contact
        John H. Anderson, Jr., Director, Transportation Issues Resources,
    Community, and Economic Development Division, (202) 512-2834,
    andersonj.rced@gao.gov
                    amtrak's financial condition is tenuous
        Since it began operations in 1971, Amtrak has never been profitable
    and, in recent years, has had to borrow money to meet its operating
    expenses. Since its inception, Amtrak has received nearly $22 billion
    in federal subsidies for operating and capital expenses. Despite
    efforts to control expenses and increase revenues, Amtrak's financial
    condition has substantially deteriorated in recent years, and it is
    likely to remain heavily dependent on federal assistance well into the
    future. In fiscal year 1998, Amtrak's annual net loss was $854 million,
    $92 million more than its 1997 net loss of $762 million.
        Amtrak has stated that it will eliminate the need for federal
    operating support by 2002. If Amtrak requires federal operating
    subsidies after December 2002, the Amtrak Reform and Accountability Act
    of 1997 provides for the Congress to consider either restructuring or
    liquidating Amtrak. Predicting how Amtrak might be restructured is
    difficult. In a liquidation, not only might Amtrak's creditors (or
    their insurers) face losses, but the 100 million passengers each year
    in the Northeast Corridor, as well as millions of others in the rest of
    the country, could face disrupted rail service. At the time of
    liquidation, the losses suffered by creditors will depend on such
    circumstances as Amtrak's debt and financial obligations and the market
    value of its assets, as well as the proceeds from their sale. As of
    September 1997, Amtrak's data showed that combined secured and
    unsecured debt liability could be about $2.2 billion. We believe, and
    DOT agrees, that the federal government would not be legally liable for
    secured and unsecured creditors' claims in the event of Amtrak's
    liquidation. Nevertheless, we recognize that creditors could attempt to
    recover losses from the United States.
        The financial performance of Amtrak's intercity routes is
    indicative of Amtrak's financial problems. In 1997, expenses for
    Amtrak's core intercity passenger services were almost twice as great
    as revenues.\3\ Moreover, Amtrak's expenses were at least twice as much
    as its revenues for 28 of its 40 routes in that year. Amtrak's expenses
    on 11 of these routes were 2\1/2\ times or more than its revenues for
    each route. Finally, 14 routes lost more than $100 per passenger
    carried. Only one route--the Metroliner's high-speed service between
    Washington, D.C., and New York City--was profitable.
    ---------------------------------------------------------------------------
        \3\ Overall, Amtrak's expenses were $1.86 for every dollar in
    operating revenue that it earned. Core intercity passenger services
    include mail and express merchandise services but exclude revenues and
    expenses from Amtrak's commuter operations, other reimbursable
    activities, and commercial development. Expense amounts include
    depreciation, which is a noncash expense.
    ---------------------------------------------------------------------------
        Recently, Amtrak has focused on improving its financial performance
    by identifying growth opportunities rather than by reducing service. In
    explaining the rationale for not cutting Amtrak's route system further
    at this time, officials at Amtrak and the Federal Railroad
    Administration (FRA) pointed to Amtrak's mission of maintaining a
    national route system, noting that such a system will consist of routes
    with a range of profitability, including routes with lower performance
    that may provide connecting service with other routes or that may
    provide public benefits, such as serving small cities and rural areas.
    In the spring of 1998, Amtrak started a year-long market analysis of
    the role and growth potential of the national route system. The
    analysis is to assess service, demand, and revenues on Amtrak's current
    route system and alternative systems. The analysis will be used to
    identify service amenities, price changes, and changes to the existing
    route system that may improve ridership and revenues.
        Because it loses money on 39 of its 40 routes, the business
    decisions that Amtrak makes regarding the structure of its route system
    will play a crucial role in determining its long-term viability.
    However, Amtrak has encountered opposition when it has proposed to cut
    routes to improve its overall financial performance because of the
    desire of local communities to see passenger service continued. FRA
    officials acknowledge that no clear public policy currently defines the
    role of passenger rail in the national transportation system. As a
    result, the Congress needs to decide on the nation's expectations for
    intercity rail and the scope of Amtrak's mission in providing that
    service. These decisions require defining expectations for a route
    network, determining the extent to which the government would
    contribute funds, and deciding on the way any remaining deficits, if
    any, would be covered. We believe that Amtrak, as currently
    constituted, will need substantial federal operating and capital
    support well into the future. Whether Amtrak will be able to improve
    its position substantially in the near term is doubtful. If not, the
    Congress will be asked to provide substantial sums of money each year
    to support Amtrak. If the Congress is not willing to provide such
    levels of funds, then Amtrak's future could be radically different, or
    Amtrak may not exist at all.
    Key contact
        John H. Anderson, Jr., Director, Transportation Issues Resources,
    Community, and Economic Development Division, (202) 512-2834,
    andersonj.rced@gao.gov
             dot lacks accountability for its financial activities
        DOT's lack of accountability for its financial activities impairs
    its ability to efficiently and effectively manage programs and exposes
    the Department to potential waste, fraud, mismanagement, and abuse.
    Since 1993, when the Office of Inspector General began auditing the
    financial statements of certain agencies within the Department, it has
    been unable to determine whether the reported financial results are
    correct and thus has been unable to express an opinion on the
    reliability of those statements. The Inspector General has also been
    unable to express an opinion on the reliability of the departmentwide
    statements since those statements were audited beginning with fiscal
    year 1996. In addition, DOT lacks a cost-accounting system or an
    alternative means of accumulating the full cost of specific projects
    and activities. DOT has efforts under way to correct its financial
    management deficiencies, but its goal of correcting all deficiencies
    for its fiscal year 1999 financial statement may be difficult to attain
    because of the numerous problems that need to be addressed.
    The accuracy of financial data is uncertain
        On March 31, 1998, the Office of Inspector General was unable to
    express an opinion on the reliability of the departmentwide financial
    statements for fiscal year 1997 because it could not verify the
    reliability of the amounts for property, plant, and equipment reported
    at $26.5 billion, inventory reported at $2.0 billion, postemployment
    benefits (primarily the Coast Guard's pension liability) reported at
    $14.0 billion, and excise tax revenue reported at $28.4 billion.
    Because of actions by DOT and others, the latter two audit issues have
    a reasonable chance of having been corrected for fiscal year 1998.
    However, serious financial management weaknesses at FAA contribute to
    the remaining issues.
        In its report, the Office of Inspector General also cited problems
    with the Department's accounting systems, which prevented the agency
    from complying with the Federal Financial Management Improvement Act of
    1996.\4\ The Inspector General concluded that for the agency to comply
    with the act, it needs to (1) modify its accounting systems to be the
    primary source of financial information to prepare the consolidated
    financial statements and (2) complete assessments of Year 2000 computer
    problems.
    ---------------------------------------------------------------------------
        \4\ This act requires agencies to implement and maintain financial
    management systems that comply substantially with Federal Financial
    Management System Requirements, applicable federal accounting
    standards, and the U.S. Standard General Ledger at the transaction
    level.
    ---------------------------------------------------------------------------
        For the property, plant, and equipment account and inventory
    amounts reported, the Inspector General concluded that FAA and the
    Coast Guard could not reliably determine the quantities and the
    locations of these assets or provide sufficient information to verify
    their values. Specific deficiencies included (1) the lack of
    comprehensive physical inventories, (2) inaccurate general ledger
    balances, (3) inadequate subsidiary records, (4) the lack of supporting
    documentation, (5) unreconciled discrepancies between balances
    maintained in their accounting systems and the detailed subsidiary
    records, and (6) the lack of a cost-accounting system.
        We have reported that problems in accounting for property, plant,
    and equipment affect DOT's ability to properly manage these assets and
    may result in operating inefficiencies. For example, in FAA, mission-
    critical equipment, such as radar and other air traffic control
    equipment, may be difficult to locate when needed, which could
    exacerbate an emergency situation. Also, theft could go undetected, and
    funds could be spent unnecessarily to acquire equipment that is already
    on hand.
        We have also reported that DOT's lack of inventory accountability
    can result in program officials' inability to make prudent business
    decisions and to adequately safeguard assets. It may also impair
    operational effectiveness. For example, because of inaccurate inventory
    information, funding requests may not be based on actual needs,
    unnecessary purchases may be made, and inventory may be overstocked or
    hoarded because of concerns about availability. The resulting excesses
    as well as spare parts for equipment no longer in service would require
    storage, inventory control, and other activities that consume operating
    resources. Inaccurate inventories can also result in the shortage of or
    the inability to locate essential parts necessary to repair mission-
    critical systems. Furthermore, these underlying data deficiencies
    preclude DOT from accurately determining the cost of its operations and
    may permit undetected waste, fraud, and abuse related to these assets.
            systems to determine full cost have not been implemented
        DOT lacks a cost-accounting system or an alternative means to
    accumulate costs. This means that DOT's financial reports (1) may not
    be capturing the full cost of specific projects and activities and (2)
    may lack a reliable ``Statement of Net Cost,'' which includes
    functional cost allocations. The lack of cost-accounting information
    limits FAA's and others' ability to make effective decisions about
    resource needs and to adequately control major projects, such as the
    $42 billion air traffic control modernization program. For example, we
    have reported that without good cost information, FAA cannot reliably
    measure the actual cost of the modernization program against
    established baselines and cannot improve future cost estimates.
    Finally, the lack of reliable cost information limits DOT's ability to
    meaningfully evaluate performance in terms of efficiency and cost-
    effectiveness, as called for by the Government Performance and Results
    Act of 1993.
        DOT, especially FAA, has made substantial progress in developing
    its cost-accounting system, but more still needs to be done. For
    example, an August 1998 report by DOT's Inspector General identified
    four systems design issues potentially involving billions of dollars
    that FAA needs to address before its cost-accounting system can
    accurately account for the full cost of operations. These issues
    include establishing a method to identify and reflect (1) the cost of
    accounting adjustments, (2) the cost for all development projects, (3)
    the cost incurred by other agencies for air traffic services, and (4)
    the correct labor cost charged to appropriate projects.
      corrective actions are under way, but progress in some areas is slow
        On May 26, 1998, the President requested DOT, among other agencies,
    to submit to the Office of Management and Budget by July 31, 1998, a
    plan for resolving the financial reporting deficiencies that were
    identified in its financial statement audits. DOT submitted the
    required plan, though not until September 30, 1998. This plan (1)
    identified actions by DOT, especially FAA and the Coast Guard, to
    correct weaknesses reported in the Inspector General's audits and (2)
    established the goal of an unqualified audit opinion on DOT's fiscal
    year 1999 financial statements. For example, the plan called for
    completing physical counts of and developing appropriate support for
    the valuation of property, plant, equipment, and inventory at FAA and
    the Coast Guard. It also called for developing adequately documented
    processes and reconciling detailed records to summary accounts.
        DOT is taking actions outlined in its plan to correct financial
    management deficiencies, but it faces significant challenges owing to
    the numerous problems that need to be addressed. For example, FAA and
    the Coast Guard have developed plans to improve cost information,
    reconcile data, help ensure that the integrity of information systems
    is maintained, and prepare reliable financial statements by September
    30, 1999. However, progress has been slow in some areas, and much
    remains to be done. For example, FAA's original plan called for full
    implementation of its cost-accounting system by October 1, 1998; FAA
    subsequently revised this date to March 31, 1999, which has been
    described by the Inspector General as ``very ambitious.'' If DOT
    continues to fall behind in meeting its planned completion dates, it is
    questionable whether it will achieve its goal of receiving an
    unqualified audit opinion for fiscal year 1999.
        The financial management weaknesses discussed above are
    particularly troublesome at FAA because of their long-standing nature
    and the agency's slow progress in resolving them. Timely resolution is
    especially key, given that FAA is in the midst of a $42 billion program
    to modernize its air traffic control systems. Until FAA's serious
    financial management problems are resolved, we will continue to
    designate financial management at the agency as high-risk.
    Key contact
        Linda M. Calbom, Director, Resources, Community, and Economic
    Development Division Accounting and Financial Management Issues,
    Accounting and Information Management Division, (202) 512-9508,
    calboml.aimd@gao.gov
                              related gao products
    Acquisition management
        Air Traffic Control: Status of FAA's Modernization Program (GAO/
    RCED-99-25, Dec. 3, 1998).
        Coast Guard's Acquisition Management: Deepwater Project's
    Justification and Affordability Need to Be Addressed More Thoroughly
    (GAO/RCED-99-6, Oct. 26, 1998).
        National Airspace System: FAA Has Implemented Some Free Flight
    Initiatives, but Challenges Remain (GAO/RCED-98-246, Sept. 28, 1998).
        Air Traffic Control: Immature Software Acquisition Processes
    Increase FAA System Acquisition Risks (GAO/AIMD-97-47, Mar. 21, 1997).
        Air Traffic Control: Complete and Enforced Architecture Needed for
    FAA Systems Modernization (GAO/AIMD-97-30, Feb. 3, 1997).
        Aviation Acquisition: A Comprehensive Strategy Is Needed for
    Cultural Change at FAA (GAO/RCED-96-159, Aug. 22, 1996).
    Year 2000 compliance
        Responses to Questions on FAA's Computer Security and Year 2000
    Program (GAO/AIMD-98-301R, Sept. 14, 1998).
        FAA Systems: Serious Challenges Remain in Resolving Year 2000 and
    Computer Security Problems (GAO/T-AIMD-98-251, Aug. 6, 1998).
        Air Traffic Control: FAA Plans to Replace Its Host Computer System
    Because Future Availability Cannot Be Assured (GAO/AIMD-98-138R, May 1,
    1998).
        Year 2000 Computing Crisis: FAA Must Act Quickly to Prevent Systems
    Failures (GAO/T-AIMD-98-63, Feb. 4, 1998).
        FAA Computer Systems: Limited Progress on Year 2000 Issue Increases
    Risk Dramatically (GAO/AIMD-98-45, Jan. 30, 1998).
    Aviation financing
        Airfield Pavement: Keeping Nation's Runways in Good Condition Could
    Require Substantially Higher Spending (GAO/RCED-98-226, July 31, 1998).
        Airport Financing: Funding Sources for Airport Development (GAO/
    RCED-98-71, Mar. 12, 1998).
        Transportation Financing: Challenges in Meeting Long-Term Funding
    Needs for FAA, Amtrak, and the Nation's Highways (GAO/T-RCED-97-151,
    May 7, 1997).
        Airport Development Needs: Estimating Future Costs (GAO/RCED-97-99,
    Apr. 7, 1997).
        National Airspace System: Issues in Allocating Costs for Air
    Traffic Services to DOD and Other Users (GAO/RCED-97-106, Apr. 25,
    1997).
        Air Traffic Control: Improved Cost Information Needed to Make
    Billion Dollar Modernization Investment Decisions (GAO/AIMD-97-20, Jan.
    22, 1997).
    Aviation safety and security
        Air Traffic Control: Weak Computer Security Practices Jeopardize
    Flight Safety (GAO/AIMD-98-155, May 18, 1998).
        Aviation Safety: FAA Has Not Fully Implemented Weather-Related
    Recommendations (GAO/RCED-98-130, June 2, 1998).
        Aviation Security: Progress Being Made, but Long-Term Attention Is
    Needed (GAO/T-RCED-98-190, May 14, 1998).
        Aviation Security: Implementation of Recommendations Is Under Way,
    but Completion Will Take Several Years (GAO/RCED-98-102, Apr. 24,
    1998).
        Aviation Safety: Weaknesses in Inspection and Enforcement Limit FAA
    in Identifying and Responding to Risks (GAO/RCED-98-6, Feb. 27, 1998).
        Aviation Safety: Efforts to Implement Flight Operational Quality
    Assurance Programs (GAO/RCED-98-10, Dec. 2, 1997).
        Human Factors: FAA's Guidance and Oversight of Pilot Crew Resource
    Management Training Can Be Improved (GAO/RCED-98-7, Nov. 24, 1997).
        Aviation Safety: FAA Oversight of Repair Stations Needs Improvement
    (GAO/RCED-98-21, Oct. 24, 1997).
    Aviation competition
        Aviation Competition: Proposed Domestic Airline Alliances Raise
    Serious Issues (GAO/T-RCED-98-215, June 4, 1998).
        Domestic Aviation: Service Problems and Limited Competition
    Continue in Some Markets (GAO/T-RCED-98-176, Apr. 23, 1998).
        Aviation Competition: International Aviation Alliances and the
    Influence of Airline Marketing Practices (GAO/T-RCED-98-131, Mar. 19,
    1998).
        Airline Deregulation: Barriers to Entry Continue to Limit
    Competition in Several Key Domestic Markets (GAO/RCED-97-4, Oct. 18,
    1996).
        Airline Deregulation: Changes in Airfares, Service, and Safety at
    Small, Medium-Sized, and Large Communities (GAO/RCED-96-79, Apr. 19,
    1996).
    Surface transportation infrastructure
        Mass Transit: Grants Management Oversight Improving, but Better
    Follow-Up Needed on Grantees' Noncompliance (GAO/RCED-98-89, Apr. 3,
    1998).
        Surface Infrastructure: Costs, Financing, and Schedules for Large-
    Dollar Transportation Projects (GAO/RCED-98-64, Feb. 12, 1998).
        Transportation Infrastructure: Managing the Costs of Large-Dollar
    Highway Projects (GAO/RCED-97-47, Feb. 28, 1997).
    Amtrak
        Intercity Passenger Rail: Financial Performance of Amtrak's Routes
    (GAO/RCED-98-151, May 14, 1998).
        Intercity Passenger Rail: Outlook for Improving Amtrak's Financial
    Health (GAO/T-RCED-98-134, Mar. 24, 1998).
        Intercity Passenger Rail: Issues Associated With a Possible Amtrak
    Liquidation (GAO/RCED-98-60, Mar. 2, 1998).
        Intercity Passenger Rail: Financial and Operating Conditions
    Threaten Amtrak's Long-Term Viability (GAO/RCED-95-71, Feb. 6, 1995).
    Financial management
        Financial Management: Federal Aviation Administration Lacked
    Accountability for Major Assets (GAO/AIMD-98-62, Feb. 18, 1998).
        Air Traffic Control: Improved Cost Information Needed to Make
    Billion Dollar Modernization Investment Decisions (GAO/AIMD-97-20, Jan.
    22, 1997).
    Other GAO products
        Results Act: Observations on the Department of Transportation's
    Annual Performance Plan for fiscal year 1999 (GAO/RCED-98-180R, May 12,
    1998).
        DOT's Budget: Management and Performance Issues Facing the
    Department in fiscal year 1999 (GAO/T-RCED/AIMD-98-76, Feb. 12, 1998).
        Federal Management: Addressing Management Issues at the Department
    of Transportation (GAO/T-RCED/AIMD-97-172, May 21, 1997).
                     performance and accountability series
        Major Management Challenges and Program Risks: A Governmentwide
    Perspective (GAO/OCG-99-1)
        Major Management Challenges and Program Risks: Department of
    Agriculture (GAO/OCG-99-2)
        Major Management Challenges and Program Risks: Department of
    Commerce (GAO/OCG-99-3)
        Major Management Challenges and Program Risks: Department of
    Defense (GAO/OCG-99-4)
        Major Management Challenges and Program Risks: Department of
    Education (GAO/OCG-99-5)
        Major Management Challenges and Program Risks: Department of Energy
    (GAO/OCG-99-6)
        Major Management Challenges and Program Risks: Department of Health
    and Human Services (GAO/OCG-99-7)
        Major Management Challenges and Program Risks: Department of
    Housing and Urban Development (GAO/OCG-99-8)
        Major Management Challenges and Program Risks: Department of the
    Interior (GAO/OCG-99-9)
        Major Management Challenges and Program Risks: Department of
    Justice (GAO/OCG-99-10)
        Major Management Challenges and Program Risks: Department of Labor
    (GAO/OCG-99-11)
        Major Management Challenges and Program Risks: Department of State
    (GAO/OCG-99-12)
        Major Management Challenges and Program Risks: Department of
    Transportation (GAO/OCG-99-13)
        Major Management Challenges and Program Risks: Department of the
    Treasury (GAO/OCG-99-14)
        Major Management Challenges and Program Risks: Department of
    Veterans Affairs (GAO/OCG-99-15)
        Major Management Challenges and Program Risks: Agency for
    International Development (GAO/OCG-99-16)
        Major Management Challenges and Program Risks: Environmental
    Protection Agency (GAO/OCG-99-17)
        Major Management Challenges and Program Risks: National Aeronautics
    and Space Administration (GAO/OCG-99-18)
        Major Management Challenges and Program Risks: Nuclear Regulatory
    Commission (GAO/OCG-99-19)
        Major Management Challenges and Program Risks: Social Security
    Administration (GAO/OCG-99-20)
        Major Management Challenges and Program Risks: U.S. Postal Service
    (GAO/OCG-99-21)
        High-Risk Series: An Update (GAO/HR-99-1)
        The entire series of 21 performance and accountability reports and
    the high-risk series update can be ordered by using the order number
    GAO/OCG-99-22SET.
                                     ______

                         Synopsis of Top Ten DOT Issues
                                aviation safety
        DOT needs to continually identify risks to air transportation
    safety and proactively reduce the major risks that can lead to
    accidents, fatalities, and associated economic costs. In an aviation
    environment that projects significant increases in air traffic, a
    proactive approach is essential. Major elements of the aviation safety
    issue include:
      --Reducing the number of runway incursions--a major risk factor at
            airports.
      --Effectively implementing FAA's new inspection process, improving
            the accuracy of safety databases, and enhancing the quality of
            inspector training.
      --Establishing management systems that assure safety risks are called
            to the attention of top FAA management and promptly acted upon.
      --Evaluating the safety implications of U.S. code share agreements
            and international alliances that involve foreign air carriers
            and foreign air carrier equipment; if necessary, modify safety
            oversight and code share approval approaches accordingly.
                         surface transportation safety
        Highway fatalities, other than those involving trucks, claim more
    that 35,000 lives annually. Truck accidents claim more than 5,000 lives
    annually. Rail and transit account for an additional 850 lost lives.
    Though the rates have been declining, they are still unacceptably high.
    Major surface transportation safety issues that DOT must address
    include:
      --Improving DOT's motor carrier safety program for vehicle
            maintenance, driver qualifications, and compliance with hours
            of service requirements and take prompt and meaningful
            enforcement action for carrier noncompliance that endangers the
            public safety.
      --Increasing the level of safety of commercial trucks and drivers
            entering the U.S. from Mexico.
      --Increasing seat belt usage through primary enforcement of seat belt
            laws, education, and other strategies.
      --Reducing grade crossing and rail trespasser accidents through
            enforcement, education, and technology.
      --Improving compliance with safety regulations by entities
            responsible for transporting hazardous materials.
      --Enhancing the effectiveness of the Federal Railroad
            Administration's Safety Assurance Compliance Program and using
            enforcement actions when voluntary and collaborative
            initiatives with a railroad do not promptly achieve the desired
            results.
                           year 2000 computer issues
        After a late start, the DOT, including FAA, has made a great deal
    of progress addressing its Year 2000 (Y2K) computer problems. DOT
    agencies are also making substantial efforts in their outreach to the
    transportation industry to increase awareness of Y2K issues. As of
    November 13, 1998, DOT has repaired 281 of its 295 mission-critical
    systems that had Y2K problems; however, the risk of system failure
    remains until these repaired systems are adequately tested. DOT needs
    to continue with a sense of urgency, especially in FAA and the Coast
    Guard. Major issues that DOT must still address are:
      --Completing Y2K work on all mission-critical computer systems by
            March 31, 1999.
      --Testing all repaired systems to ensure they properly function as a
            unit, and together as a system.
      --Obtaining assurances that the transportation industry will be Y2K
            compliant.
      --Assuring DOT computers properly interface with those of other
            Government agencies, network service providers such as private
            telecommunications providers, and the transportation industry;
            develop contingency plans that can be used if critical systems
            fail to operate after December 31, 1999.
                       air traffic control modernization
        FAA's multi-billion dollar air traffic control (ATC) modernization
    effort remains a major challenge. Cost overruns, schedule delays, and
    shortfalls in performance of the past should not be repeated and new
    systems must come in approximately on time and on budget and meet the
    requirements of a dynamic and growing aviation system. Key elements of
    this management issue include:
      --Reassessing and rebaselining plans for transitioning to satellite
            communications, navigation, and surveillance, including Free
            Flight. This issue includes determining whether the Global
            Positioning System (GPS) and the Wide Area Augmentation System
            (WAAS) will be the sole means of navigation or if secondary
            systems will be needed.
      --Incorporating human factors in the design and development of new
            ATC systems and avoiding the problems experienced with new
            systems such as the Standard Terminal Automation Replacement
            System (STARS).
      --Strengthening DOT's capacity to oversee multi-billion dollar
            software intensive development contracts. Software intensive
            development contracts have typically resulted in large cost
            increases and major schedule slippage--an issue that has
            affected the pace of ATC modernization for more than a decade.
            While this is a significant problem associated with the FAA ATC
            Modernization Program, it also is an issue that bears watching
            during the development of Intelligent Transportation Systems by
            the Federal Highway Administration. Strong oversight by the
            Department and the OIG to, among other things, assure
            contractor accountability, clear agency requirements, and
            strengthened internal controls, will help minimize what has
            historically been an area of unacceptable cost growth and
            schedule delays.
                   federal aviation administration financing
        Financing FAA activities and the air traffic control system is a
    major issue that the Department, the Congress, and the aviation
    community need to address. For example, the operations account, which
    pays for air traffic controllers, will need an additional $1 billion
    over the next 5 years. Operations will soon account for nearly $6
    billion of the approximately $10 billion FAA budget. Substantial
    funding also will be needed for the facilities and equipment account,
    which pays for air traffic control modernization. Key issues associated
    with FAA financing include:
      --Accurately determining the amount of funds that will be needed to
            finance FAA and determining what portion of FAA's operations,
            air traffic control modernization, and airport infrastructure,
            should be financed by the trust fund, general fund, or other
            sources of funds such as passenger facility charges. This is a
            matter that will be debated in the next Congress.
      --Developing a cost accounting system on which FAA can be better
            managed and upon which ``user fees'' could be based. FAA cannot
            implement a credible and reliable cost accounting system until
            it first ensures its financial systems accurately capture and
            allocate relevant cost data and FAA obtains an unqualified
            opinion on its financial statements. FAA's financial management
            systems do not currently capture accurate, reliable data and
            until they do, FAA cannot receive an unqualified opinion.
               surface, marine, and airport infrastructure needs
        The Transportation Equity Act for the 21st Century (TEA-21)
    guarantees $198 billion over a 6-year period to improve safety and
    maintain and improve America's highways, bridges, and mass transit
    systems. These funds, as well as Airport Improvement Funds, must be
    effectively and efficiently used. Additional funding will be needed to
    maintain and upgrade the maritime infrastructure to meet the future
    needs of the marine industry. Key elements of this management challenge
    include:
      --Strengthening internal controls to ensure adequate management and
            oversight of the infusion of substantial additional Federal
            funds for surface infrastructure projects; preventing fraud,
            embezzlement, and abuse of funds; and ensuring the development
            of sound financial plans for high-cost transportation
            infrastructure projects.
      --Promoting the use of cost-saving techniques such as value
            engineering, design-build procurements, and owner-controlled
            insurance programs.
      --Selecting high value projects for discretionary grants, awarded
            according to established criteria.
      --Providing leadership to maintain, improve, and develop the port,
            waterway and intermodal infrastructure to meet current and
            future needs including megavessels; identifying funding
            mechanisms to maintain and improve the harbor infrastructure of
            the United States.
      --Eliminating the prohibited diversion of airport revenues by airport
            sponsors.
                      transportation and computer security
        Presidential Decision Directives 62 and 63 require DOT to advance
    the nation's vital security interest by ensuring that the
    transportation system is protected and that our computer systems are
    safe from intrusion. The ability to prevent terrorist attacks within
    this vast system, and fraudulent intrusions into computer systems must
    be strengthened. Key elements of these issues are:
      --Reducing the vulnerabilities in airport security controls.
      --Enhancing the use of new technologies such as explosive detection
            equipment.
      --Improving compliance with shipping requirements related to
            hazardous materials and dangerous goods.
      --Developing staff expertise and technical capabilities to detect
            intrusions to DOT and FAA computer networks and acting to
            reduce vulnerabilities.
               financial accounting/chief financial officers act
        DOT has made significant progress in improving its financial
    accounting and reporting systems. Three major issues stand in the way
    of DOT receiving an unqualified opinion on its financial statements,
    the most challenging being the FAA property and equipment accounts
    totaling about $12 billion. Major financial areas that need to be
    addressed are:
      --Developing and implementing a plan for FAA to account for and value
            its property and equipment, including its multi-billion dollar
            work-in-process accounts for Air Traffic Control Modernization.
      --Computing a reliable estimate of Coast Guard's future liability for
            military retirement pay and health care costs.
      --Ensuring that the Treasury Department develops adequate support for
            trust fund revenues and account balances totaling $28 billion.
                    amtrak financial viability/moderization
        Amtrak needs to continue to seek opportunities to increase revenues
    and contain costs as it strives to fulfill its Congressional mandate of
    achieving operating self-sufficiency by the end of fiscal year 2002.
    Amtrak's fiscal year 1998 Strategic Business Plan established a 5-year
    plan to reach this goal. The plan indicates that Amtrak will have a
    cash loss in fiscal year 2003, but Amtrak does not anticipate needing
    Federal operating funds to cover it.
        We issued a report on the congressionally mandated Independent
    Assessment of Amtrak's Financial Requirements Through fiscal year 2002
    on November 23, 1998. We identified a projected cash loss of $0.8
    billion more than Amtrak estimated, if the Strategic Business Plan were
    followed, with no adjustments, through fiscal year 2003. Amtrak's
    capital requirements after fiscal year 2000 exceed projected available
    capital resources. Additional cash losses, as projected in the
    Independent Assessment, would further constrain Amtrak's already-
    limited ability to address significant system-wide capital needs and
    would likely be beyond Amtrak's ability to finance without Federal
    assistance. To eliminate the need for Federal operating funds, Amtrak
    will have to continuously review, amend, and implement programs and
    practices to improve its revenue and reduce its operating costs.
                           dot implementation of gpra
        The Department of Transportation's strategic and performance plans
    were rated by Congress as the very best in the Federal Government. Yet,
    the difficult tasks of accurately assessing performance against the
    established outcome measures and modifying programs as needed to
    achieve the intended results remains to be accomplished. These matters
    require a sense of urgency since the first performance report to
    Congress is due on March 31, 2000.
        Many of DOT's outcomes such as improved safety, reduction in
    fatalities and injuries, and well-maintained highways depend in large
    part on actions taken and assistance provided by third parties outside
    the Department, including other Federal agencies, states, and various
    components of the transportation industry. Their assistance will be
    critical in meeting DOT's goals. Another major factor that will impact
    DOT's ability to achieve its goals is the effective utilization of
    human resources. DOT must effectively manage the workforce, recruit
    highly qualified individuals for vacant positions, and provide
    requisite technical and other training in order to successfully meet
    the management, safety, and efficiency challenges facing the U.S.
    transportation system.
        Starting in fiscal year 1998, as part of our routine projects, we
    began to selectively (1) verify and validate performance data, and (2)
    assess various performance and outcome measures to determine their
    appropriateness for measuring progress toward stated goals (e.g.,
    increased transportation safety). We plan to continue this oversight
    through fiscal year 1999. We also developed a 2-day course on auditing
    GPRA implementation to further enhance our work in this area.
                            detailed briefing papers
                                aviation safety
        The Department of Transportation (DOT) needs to continually
    identify risks to air transportation safety and proactively reduce the
    major risks that can lead to accidents, fatalities, and associated
    economic costs. In an aviation environment that projects significant
    increases in air traffic, a proactive approach to aviation safety is
    essential. Recognizing the national need for a safe transportation
    system, DOT has made transportation safety its number one strategic
    goal.
    DOT Strategic Goal # 1
        Safety.--``Promote the public health and safety by working toward
    the elimination of transportation-related deaths, injuries, and
    property damage.''
        Key OIG Contact.--Alexis M. Stefani, Deputy Assistant Inspector
    General for Aviation, 202-366-0500.
    Background
        The aviation industry expects continued increases in air traffic--a
    result of increased demand--and expects closer spacing between aircraft
    due to more precise, satellite-based tracking and navigation
    capabilities. The U.S. aviation accident rate has remained nearly flat
    since more reliable jet engine powered aircraft began to dominate the
    commercial aviation fleet. However, as the number of flights increase,
    the number of accidents is statistically likely to rise in the absence
    of action by DOT and the aviation industry. FAA has recognized this
    risk and has adopted a focused safety agenda to bring about a five-fold
    reduction in fatal accidents over the next decade. FAA must now
    concentrate its resources on effectively implementing practices and
    programs to prevent the most prevalent causes of aircraft accidents.
        FAA's focused safety agenda recognizes weaknesses and improvements
    needed in its safety processes. Actions taken this past year by FAA are
    encouraging. For example, FAA issued several airworthiness directives
    to improve safety, including directives to aid in preventing
    uncontained engine failures. However, the issues described below are of
    a longstanding nature that require rigorous oversight. The key to
    ensure success will be FAA and aviation industry follow-through.
        Preventing runway incursions is one of FAA's safety agenda goals.
    The number of runway incursions increased by over 70 percent, from 186
    incursions in 1993 to 318 in 1997. FAA's preliminary data show 250
    incursions through September 1998, about the same level as in 1997.
    FAA's near-term goal is to reduce runway incursions by 15 percent of
    the 1997 level, to 272, by the year 2000.
        FAA also recognized problems exist in its aviation safety
    inspection process. In 1996, a FAA task force conducted a 90-day review
    of the way FAA conducts safety inspections. Two of the most significant
    recommendations as a result of the 90-day review were to:
      --Create a national certification team to assist in processing new
            air carrier certifications, and
      --Initiate a project to make surveillance of air carriers more
            targeted and systematic.
        In 1997, FAA created the Certification Standardization and
    Evaluation Team (CSET) to certify new entrant air carriers. To address
    the surveillance of air carriers, FAA teamed with Sandia National
    Laboratories to conduct a comprehensive analysis of FAA's certification
    and surveillance processes. This reengineering project took 8 months
    and was a precursor to FAA's decision to develop a new system called
    the Air Transportation Oversight System (ATOS). The goal of ATOS is to
    aid the inspectors in targeting inspections so that system safety
    problems are identified and corrected before they lead to accidents. In
    October 1998, FAA began implementing ATOS for the 10 major passenger
    air carriers as well as any new entrant air carriers certified by FAA.
    The 10 major air carriers transport 90 percent of the flying public.
        Improving safety data quality, collection, and analyses is another
    one of FAA's safety agenda goals. FAA implemented the Safety
    Performance Analysis System (SPAS) as a tool for inspectors to identify
    potential high risk areas. It is used to evaluate safety-related
    aviation data from several of FAA inspection, incident, and accident
    databases.
        Another area of concern is the implications on safety of foreign
    air carriers who operate in the U.S. and/or carry U.S. citizens as
    passengers, especially given the recent increase in the number of
    codesharing agreements. From 1994 to 1998, the number of codesharing
    agreements has more than doubled from 61 to 163. Airlines throughout
    the world continue to form alliances and enter into codesharing
    agreements to strengthen or expand their market presence or competitive
    ability. The rapid increase in the number of codeshare agreements
    between the U.S. and foreign air carriers, as the movement toward
    global alliances continues, raises questions as to whether approaches
    to safety oversight and approving codeshare agreements should be
    modified.
    Audit Coverage
        In recent years, DOT's Office of Inspector General (OIG) and the
    General Accounting Office (GAO) have issued reports identifying
    shortcomings in FAA's safety programs. In 1997, the OIG and FAA
    conducted a joint follow-up review to assess the implementation of
    recommendations made by FAA's 90-day safety review task force. We found
    that corrective actions to address the most significant recommendations
    identified by the 90-day safety review task force remained in process.
    A 1998 OIG audit also concluded that FAA's agreement to reduce the
    number of air traffic control supervisors will not negatively impact
    safety of air traffic operations, if the FAA first identifies and
    implements the duties that controllers-in-charge will assume from
    supervisors. Aviation safety issues include:
      --Reducing the number of runway incursions--a major risk factor at
            airports,
      --Effectively implementing FAA's new inspectionprocess, improving the
            accuracy of safety databases, and enhancing the quality of
            inspector training,
      --Establishing management systems that assure safety risks are called
            to the attention of top FAA management and promptly acted upon,
            and
      --Evaluating the safety implications of U.S. codeshare agreements and
            international alliances that involve foreign air carriers and
            foreign air carrier equipment; if necessary, modifying safety
            oversight and codeshare approval approaches accordingly.
        Continued Rise in Runway Incursions.--In November 1997 testimony
    before Congress, OIG reported that the Runway Incursion Program needed
    to expedite solutions to systemwide problems that cause incursions.
    Further, OIG concluded local initiatives must be developed to end
    incursion threats specific to individual airports. OIG also reported
    that new technology is expected to help prevent human errors that lead
    to incursions. However, expected completion of two new systems in 1999
    and 2000 will be 4 years later than initially planned. FAA issued a new
    Airport Surface Operations Safety Action Plan in October 1998 to
    strengthen its runway incursion prevention efforts, which includes
    actions to address OIG recommendations. We recently initiated an audit
    to follow up on the status of our prior recommendations, to assess
    FAA's progress in implementing new technologies to reduce runway
    incursions, and to evaluate FAA's implementation of its Airport Surface
    Operations Safety Action Plan.
        Effectiveness of FAA's Inspection Process.--As early as 1987, GAO
    identified FAA's need to develop criteria for targeting safety
    inspection resources to areas with heightened likelihood of safety
    problems, such as new carriers, commuter airlines, and aging aircraft.
    In 1995, OIG found FAA's targeting of inspection resources had not
    improved. A 1997 OIG audit also identified targeting problems with
    certifications and periodic inspections of airports. In another 1997
    report, OIG found that FAA airworthiness inspectors were not routinely
    given basic technical training, or updated training, for the systems
    they were responsible for inspecting.
        To further evaluate FAA's inspection process, in 1998 we initiated
    reviews of FAA's National Aviation Safety Inspection Program and
    oversight of air tour operators. These reviews are nearing completion.
    Additionally, in 1998 the OIG reported that the inactivation of the
    military specification for testing threaded fasteners and components
    (screws, nuts, and bolts with internal or external threads used in high
    stress systems and threaded products, such as engine drive shafts)
    could pose an aviation safety risk. To more fully evaluate safety
    risks, in fiscal year 1999 we plan on evaluating FAA's oversight of
    manufacturers' quality assurance systems for threaded fasteners and
    components and FAA's oversight of all-cargo air carriers.
        Quality of Aviation Safety Databases.--OIG reported that FAA's
    databases contained inaccurate and incomplete data on runway
    incursions. In addition, in 1995 GAO found that FAA needed to improve
    the reliability of its Safety Performance Analysis System, which
    integrates and analyzes information from other databases so it can be
    used to target areas of greatest risk. For fiscal year 1999, we plan to
    review FAA's use of safety data generated from industry self-disclosure
    programs, including flight operational quality assurance data to
    improve safety.
        Safety Oversight of Foreign Air Carriers.--In fiscal year 1999, we
    plan to initiate work to address the complexities of codesharing in the
    aviation industry and the responsibilities for aviation safety
    oversight when U.S. air carriers codeshare with foreign air carriers.
    Investigative Coverage
        Suspected Unapproved Parts.--OIG has in recent years developed an
    extensive investigative and training program to combat suspected
    unapproved parts (SUPs) sold for servicing commercial aircraft. One OIG
    investigation involved the armed robbery of two FAA-certified repair
    stations by five defendants in Miami, Florida. The stolen parts
    included jet engine disks, blades, and vanes, which were subsequently
    sold or ``laundered'' through two aviation parts companies. The
    defendants falsified airworthiness and parts traceability
    certifications for the stolen parts, which endangered the safety of
    aircraft. The leader of the conspiracy was sentenced to over 12 years
    in prison, 36 months probation, and $1.3 million restitution.
        In 1997 OIG, FAA, and several other agencies formed a working group
    to combat trafficking in unapproved parts. Agencies involved seek a new
    criminal statute to combat such violations. OIG in the past year has
    conducted 22 SUP-suppression classes for more than 500 FAA safety
    inspectors and more classes are slated this year.
                         surface transportation safety
        Highway fatalities, other than those involving trucks, claim more
    than 35,000 lives annually. Truck accidents claim more than 5,000 lives
    annually. Rail and transit account for an additional 850 lost lives.
    Though rates have been declining, they are still unacceptably high. DOT
    has established as its first strategic goal to marshal its resources to
    reduce the number of accidents that lead to fatalities, injuries, and
    associated economic costs.
    DOT Strategic Goal # 1
        Safety.--``Promote the public health and safety by working toward
    the elimination of transportation-related deaths, injuries, and
    property damage.''
        Key OIG Contacts.--Patricia J. Thompson, Deputy Assistant Inspector
    General for Surface Transportation, 202-366-0687; Todd Zinser,
    Assistant Inspector General for Investigations, 202-366-1967.
    Background
        The Department of Transportation continues to dedicate and focus
    substantial DOT resources to work toward ensuring the American public
    has the safest transportation system possible. This is a formidable
    challenge, considering the number of fatalities and injuries and
    property damage resulting from automobile and motor carrier accidents
    each year. Railroad, rail-highway grade crossings, rail trespass,
    commuter rail transit, and hazardous materials accidents also result in
    loss of life and costly property damage. To its credit, DOT has
    dedicated resources to educational programs in support of safety, such
    as programs to promote increasing seat belt usage and the primary
    enforcement of seat belt laws. However, it is essential that DOT
    continues to provide vigorous and effectual enforcement of all safety
    regulations when other methods are not effective.
        Key surface transportation challenges include:
      --Improving DOT's motor carrier safety program for vehicle
            maintenance, driver qualifications, and compliance with hours
            of service requirements. Take prompt and meaningful enforcement
            action for carrier noncompliance that endangers the public
            safety,
      --Increasing the level of safety of commercial trucks and drivers
            entering the U.S. from Mexico,
      --Increasing seat belt usage through primary enforcement of seat belt
            laws, education, and other strategies,
      --Reducing grade crossing and rail trespasser accidents through
            enforcement, education, and technology,
      --Improving compliance with safety regulations by entities
            responsible for transporting hazardous materials, and
      --Enhancing the effectiveness of the Federal Railroad
            Administration's Safety Assurance Compliance Program and
            aggressively using enforcement actions when voluntary and
            collaborative initiatives with a railroad do not promptly
            achieve the desired results.
    Audit Coverage
        A 1997 OIG audit report on the Federal Highway Administration's
    Motor Carrier Safety Program found that as of 1995 only 2.5 percent of
    the Nation's interstate motor carriers were inspected as part of safety
    compliance reviews. A sampling of motor carriers found that 75 percent
    did not sustain a satisfactory rating on safety compliance reviews. In
    a 1998 review, we found that 3.5 million Mexican commercial trucks
    entered the United States during fiscal year 1997. Of those trucks
    inspected, 44.1 percent were placed out of service for serious safety
    violations. Motor carrier safety is a major management issue for the
    Department, and the OIG will provide audit coverage in fiscal year
    1999.
        The Department and the OIG have also placed high priority on the
    transportation of hazardous materials. OIG and RSPA are jointly leading
    a Department-wide Program Evaluation of the Hazardous Materials
    Transportation Program. The objectives of the program evaluation are to
    (i) document the system of hazardous materials movements in U.S.
    commerce and DOT agency intervention actions, such as regulations,
    inspections, enforcement, and outreach programs, and (ii) assess the
    effectiveness of DOT's program as it intervenes in and affects each
    step in the hazardous materials transportation process. The program
    evaluation will document the points at which the current hazardous
    materials program intervenes in the transportation of these materials,
    from packaging to shipper to carrier to receiver, and how effectively
    DOT applies intervention and enforcement tools to hazardous materials
    shipments in the transportation stream.
        Motor Carrier Safety Program.--In a fiscal year 1997 audit report,
    the OIG concluded that improvements were needed in FHWA's motor carrier
    compliance review program to expand review coverage of the motor
    carrier population, more accurately target carriers for review, induce
    prompt and sustained motor carrier compliance with safety regulations,
    and ensure the quality of reviews. We reported that during fiscal year
    1995, only 8,666 of 345,500 (2.5 percent) interstate motor carriers
    received compliance reviews, and 64 percent of the Nation's carriers
    remain unrated. We found that FHWA's enforcement efforts were not
    effective in inducing prompt and sustained compliance with regulations
    and safe on-the-road performance. In addition, FHWA did not ensure
    compliance review procedures were followed or that critical review
    steps were thoroughly performed. OIG is currently auditing the
    effectiveness of the FHWA Motor Carrier Program and will determine
    whether recommendations made in earlier reports were implemented.
        Motor Carrier Safety Program for Commercial Trucks at U.S.
    Borders.--OIG found that Mexican motor carriers had limited experience
    operating within U.S. safety standards, and the FHWA's strategy for
    opening the Mexican-U.S. border to Mexican commercial truck traffic did
    not provide reasonable assurance, in the near term, that trucks
    entering the United States will comply with U.S. safety regulations. We
    also found that neither FHWA nor the states of Arizona, New Mexico, and
    Texas provided sufficient numbers of inspectors at border crossings.
    California, however, did provide sufficient inspectors. OIG identified
    a direct correlation between the condition of Mexican trucks entering
    the U.S. commercial zones and the level of inspection resources at the
    border. California has the best inspection practices, and the condition
    of Mexican trucks entering at the Mexico-California border is much
    better than those entering all other border States. During fiscal year
    1997, the out-of-service rate for Mexican trucks inspected in
    California was 28 percent compared to 42 percent in Arizona, 37 percent
    in New Mexico, and 50 percent in Texas.
        Safety Assurance and Compliance Program.--OIG found FRA's Safety
    Assurance and Compliance Program (SACP) partnership and systemic
    approach to rail safety has improved communication and cooperation
    among railroad management, labor, and FRA. SACP has also been
    successful in identifying and eliminating systemic safety problems.
    However, the SACP process is not as comprehensive as it needs to be to
    achieve the desired results. FRA must strengthen the effectiveness of
    SACP by: (i) defining SACP policies and procedures more clearly, (ii)
    developing better railroad safety profiles, (iii) identifying systemic
    safety issues in safety action plans, and (iv) monitoring and enforcing
    railroad implementation and compliance with safety action plans.
    Follow-up must be improved and firm enforcement action must be taken
    when a railroad does not comply with safety plans.
        Rail-Highway Crossing Safety Action Plan.--OIG has initiated an
    audit of the Department's Rail-Highway Crossing Safety Action Plan. The
    action plan involves the Department, FRA, FHWA, NHTSA, and FTA, working
    in partnership with the railroad and transit industries, state and
    local governments, the Congress, and Operation Lifesaver. The plan
    presented 55 initiatives in the areas of enforcement, engineering,
    education, research, and legislation, intended to improve safety at the
    nation's railroad-highway public and private grade crossings (which
    total 261,317 as of September 1998). Nine out of ten fatalities
    involving trains occur at rail-highway crossings or as the result of
    trespassing on railroad tracks. In 1997, collisions at rail-highway
    grade crossings caused 461 fatalities and 1,540 injuries. In addition,
    533 people were killed and another 519 were injured while trespassing
    on railroad property. OIG is focusing on evaluating DOT's effectiveness
    in completing the action plan's initiatives and recommendations and
    assessing the progress toward achieving the Department's 10-year goal
    to reduce rail-highway crossing accidents and casualties, including
    those resulting from trespassing, by at least 50 percent.
    Investigative Coverage
        OIG is focusing resources on investigating criminal acts that
    result in or contribute to accidents, including driver hours of service
    violations, falsification of drivers' and engineers' logs, drug and
    alcohol use, inaccurate maintenance records and repair logs, and the
    illegal transportation of hazardous materials. In 1996, large trucks
    contributed to one of every eight vehicle accidents. Fatigue is a
    significant contributing factor in many of those accidents--according
    to a study by the National Transportation Safety Board, fatigue is a
    factor in 30 percent to 40 percent of all truck accidents.
        OIG has established a major investigative initiative in support of
    the Office of Motor Carriers (OMC) pursuit of motor carriers and
    drivers who falsify drivers' logs of time on the road. OIG currently
    has over 30 such cases open and has obtained 33 indictments for related
    violations in the past 18 months. In one Pennsylvania case, a Florida
    truck driver pleaded guilty in Federal court to a false statement
    pertaining to falsified driver's logs. Previously, the driver had plead
    guilty in state court to homicide by vehicle when his tractor-trailer
    crossed a center dividing line and struck five other vehicles, killing
    one driver and seriously injuring others. A joint OIG investigation
    with the state police and OMC disclosed the driver's log falsely
    reflected he had been off-duty the day prior to the accident, when he
    had actually been on duty in excess of the permissible number of hours.
    The driver was sentenced in state court to 12 months incarceration, 24
    months probation, and fined $1,800. He was sentenced in Federal court
    to 21 months imprisonment, 3 years probation, and $145,000 restitution.
        The investigation of illegal transportation of hazardous materials
    is also one of OIG's highest priority programs. Investigations have
    focused on the false certification of shipping manifests
    misrepresenting materials being shipped, false statements, mail and
    wire fraud, and conspiracy. Investigations in 1997 and 1998, many
    conducted jointly with the Federal Bureau of Investigation, the
    Department of Justice Environmental Crimes Section, and the
    Environmental Protection Agency, have resulted in 34 indictments and 23
    convictions, with total fines of $2.16 million. In a recent case, a
    chemical wholesaler was charged with illegally shipping flammables
    aboard a Federal Express aircraft. In addition, a barge company
    employee was found guilty of violating Clean Water Act regulations by
    polluting the Mississippi River north of New Orleans over an 11-year
    period.
                           year 2000 computer issues
        After a late start, the DOT, including FAA, has made a great deal
    of progress addressing its Year 2000 computer problems, but needs to
    continue with a sense of urgency in completing its work, especially in
    FAA and the Coast Guard. The threat of computer-system failures is
    significant to DOT, the transportation industry, and the traveling
    public. With about 1 year left, much work still needs to be done. Most
    DOT mission-critical systems with identified Year 2000 problems have
    been repaired; however, the risk of system failure remains until these
    repaired systems are adequately tested as a unit and as a system with
    multiple units, including external systems with which DOT systems
    interface, such as the MCI telecommunications network used by the FAA
    Air Traffic Control System. For the transportation industry, DOT met
    with representatives from various transportation sectors to promote
    Year 2000 awareness, and will perform a preliminary assessment of the
    industry's readiness by December 1998.
        OIG has taken an active oversight role on both DOT internal systems
    and the outreach efforts. OIG has been validating the accuracy of DOT
    quarterly reports to OMB. For the upcoming testing phase, OIG will
    observe actual operational testing as part of our continuing oversight,
    to include interface testing with external systems. Having fully
    functioning computer systems is a key corporate management strategy of
    the Department.
    DOT Corporate Management Strategies
        Information Technology.--``Improve mission performance, data
    sharing, system integrity, communications, and productivity through
    deployment of information systems which are secure, reliable,
    compatible, and cost effective now and beyond the Year 2000.''
        Key OIG Contact.--John Meche, Deputy Assistant Inspector General
    for Financial, Economic, and Information Technology, 202-366-1496.
    Background
        It has been customary in computer programming to represent years by
    their two final digits, a practice that for decades posed no problems.
    However, the arrival of the new millennium will change the presumed
    first two digits from 19 to 20. When the year 2000 arrives, computer
    systems may fail if programs cannot recognize ``00'' as signifying the
    year 2000, rather than 1900. All Federal agencies--indeed, all users of
    computers--are advised to determine whether the shift poses the threat
    of breakdown to the programs upon which they rely, or has the potential
    to render crucial data inaccurate. Current cost estimates to assess,
    repair, and test DOT systems stand at over $300 million.
        We also see a major issue involving external systems that interface
    with DOT internal systems. Major network service providers, such as
    MCI, are reporting their telecommunication systems will not be Year-
    2000 ready until June 1999, so DOT will not be able to fully test its
    systems until the external systems are compliant.
    Noteworthy Progress
        In August 1998, we testified that 102 of FAA's mission-critical
    systems would not be tested and implemented by OMB's milestone of March
    31, 1999. After a very late start, DOT, including FAA, has made
    substantial progress on its Year 2000 computer problems. As of November
    13, 1998, a total of 281 of 295 mission-critical DOT systems with Year
    2000 problems have been repaired, but have not been tested as a system
    to be certain the repairs fixed the problems. DOT has met with
    representatives from the aviation, maritime, surface, and rail
    industries to promote Year 2000 awareness and develop a high-level
    action plan for the Intelligent Transportation Systems. DOT also has
    made Year 2000 funding available under the Transportation Equity Act
    for the 21th Century (TEA-21) and the Airport Improvement Program.
    Under the direction of the Year 2000 Conversion Council, DOT sent
    questionnaires in November 1998 to organizations (e.g., trade
    associations) in the transportation industry. Based on the response,
    DOT will assess the transportation industry's readiness and report the
    results to the White House by December 11, 1998.
    Audit Coverage
        Since May 1997, OIG has issued four audit reports and testified
    before Congress twice. Major issues that DOT must still address are:
      --Completing Year 2000 work on all mission-critical computer systems
            by March 31, 1999,
      --Testing all repaired systems to ensure they properly function as a
            unit, and together as a system,
      --Obtaining assurances that the transportation industry will be Year
            2000 compliant, and
      --Assuring DOT computers properly interface with external systems of
            other Government agencies, network service providers such as
            MCI, and the transportation industry, and developing
            contingency plans that can be used if critical systems fail to
            operate after December 31, 1999. Contingency plans are
            increasingly important, even if internal agency systems are
            Year 2000 compliant because, if the external systems fail, DOT
            must still be able to operate.
        DOT Needs To Accelerate Year 2000 Work Schedule.--On February 4,
    1998, OIG testified that FAA needed to accelerate Year 2000 work
    because it was 7 months behind the OMB schedule. As of November 13,
    1998, DOT reported that 56 of its mission-critical systems will not be
    tested and implemented by March 31, 1999. DOT still needs to accelerate
    its schedule to meet OMB's March 1999 date.
        Testing of Renovated Systems.--Upon completion of the repair work,
    DOT needs to test all systems to ensure they properly function as a
    unit, and together as a system. This is extremely important for the Air
    Traffic Control System which is a very complex and interdependent
    system.
        Industry Awareness.--DOT agencies have made significant efforts
    outreaching to industry to increase awareness of Year 2000 issues.
    Continued proactive attention is needed with national and international
    industry representatives in obtaining assurances that the
    transportation industry will be Year 2000 compliant.
        Interfacing and Contingency Plans.--While much work has been done
    on fixing DOT computers, more needs to be done to ensure DOT computers
    can interface with other Government agencies, network service providers
    like MCI, and the transportation industry. Network service providers
    are reporting their systems will not be Year 2000 ready until June
    1999. Contingency plans are essential due to the unknowns associated
    with the Year 2000.
                       air traffic control modernization
        FAA's multibillion-dollar air traffic control (ATC) modernization
    effort remains a major challenge. Cost overruns, schedule delays, and
    shortfalls in performance of the past should not be repeated and new
    systems must come in close to budget and meet the requirements of a
    dynamic and growing aviation system. Modernizing the nation's ATC
    system is closely linked to three DOT strategic goals. They are:
    DOT Strategic Goal # 1
        Safety.--``Promote the public health and safety by working toward
    the elimination of transportation-related deaths, injuries, and
    property damage.''
    DOT Strategic Goal # 2
        Mobility.--``Shape America's future by ensuring a transportation
    system that is accessible, integrated, efficient, and offers
    flexibility of choices.''
    DOT Strategic Goal # 3
        Economic Growth and Trade--``Advance America's economic growth and
    competitiveness domestically and internationally through efficient and
    flexible transportation.''
        Key OIG Contact.--Alexis M. Stefani, Deputy Assistant Inspector
    General for Aviation, 202-366-0500.
    Background
        FAA is immersed in a multi-billion dollar, mission-critical capital
    investment program to modernize its aging air traffic control system.
    This effort involves the acquisition of a vast network of radars and
    automated data processing, navigation, and communications equipment.
    Programs like the Display System Replacement (DSR) and the early phases
    of the HOST and Oceanic Computer System Replacement (HOST Replacement)
    mainly replace existing equipment and functionality, and are not
    considered software intensive development projects. DSR provides new
    controller displays and workstations, and upgrades the network
    infrastructure at FAA's en route centers. The HOST Replacement,
    currently in its first phase, replaces the mainframe HOST and oceanic
    computers at the en route centers. The HOST computers process flight
    and radar data and are the heart of the automation system used to
    control air traffic in the National Airspace System. Subsequent phases
    upgrade software and replace peripherals such as printers and tape
    drives. Hopefully, these programs will continue to proceed well.
        Other acquisitions like FAA's Wide Area Augmentation System (WAAS)
    and the Standard Terminal Automation Replacement System (STARS) pose
    significant challenges and are experiencing problems with software
    development and human factors issues. WAAS is a system of ground
    reference stations, communications satellites, and complex software
    that will augment the Department of Defense's Global Positioning System
    to provide navigation, approach, and landing capabilities for civilian
    use in the National Airspace System. STARS will replace air traffic
    controller and maintenance workstations with color displays, as well as
    computer software and processors, at FAA's 172 terminal air traffic
    control facilities. Successful deployment of WAAS and STARS is
    considered crucial to the implementation of Free Flight.
        In addition to replacing existing systems, FAA's modernization
    program also includes developing new technologies to meet the emerging
    safety and capacity demands of the National Airspace System. These new
    technologies include satellite-based navigation and communications
    capabilities, methods to reduce runway incursions, and capabilities to
    move the aviation industry toward Free Flight, such as data link.
        FAA estimates the cost of modernizing the system will total about
    $40 billion from 1981 through 2003. Congress has appropriated about $27
    billion through fiscal year 1999. FAA acknowledges the problems of the
    past and is addressing them with a new approach to major systems
    acquisitions. OIG is closely monitoring FAA's efforts to modernize its
    ATC systems and making recommendations to minimize further cost
    overruns, schedule slippages, and otherwise mitigate acquisition risks.
    Audit Coverage
        Both OIG and GAO have reported that ATC modernization projects have
    experienced substantial cost overruns, lengthy delays, and significant
    shortfalls in performance that have affected FAA's ability to deliver
    systems as promised. Significant issues that FAA must address include:
      --Reassessing and rebaselining plans for transitioning to satellite
            communications, navigation, and surveillance technology,
            including Free Flight. This issue includes determining whether
            GPS and WAAS will be the sole means of navigation or if
            secondary systems will be needed. In addition, the WAAS Program
            recently announced software development problems associated
            with the integrity monitoring software. FAA and the prime
            contractor must resolve these software problems as soon as
            possible,
      --Incorporating human factors in the design and development of new
            air traffic control systems and avoiding the problems
            experienced with new systems such as STARS,
      --Strengthening DOT's capacity to oversee multi-billion dollar
            software intensive development contracts. Software intensive
            development contracts have typically resulted in large cost
            increases and major schedule slippage--an issue that has
            affected the pace of ATC modernization for more than a decade.
            While this is a significant problem associated with the FAA ATC
            Modernization Program, it also is an issue that bears watching
            during the development of Intelligent Transportation Systems by
            the Federal Highway Administration. Strong oversight by the
            Department and the OIG to, among other things, assure
            contractor accountability, clear agency requirements, and
            strengthened internal controls, will help minimize what has
            historically been an area of unacceptable cost growth and
            schedule delays,
      --Eliminating systemic deficiencies and adopting a complete systems
            architecture for its major acquisitions,
      --Improving cost-estimating and cost-accounting processes, and
      --Increasing air traffic controller proficiency on a critical backup
            system.
        We will continue to closely monitor FAA's WAAS and STARS programs,
    focusing on the software development problems and resolution of human
    factors issues. In addition, our ongoing work includes reviews of the
    HOST replacement, and FAA's acquisitions of technologies to reduce
    runway incursions and to provide data link capabilities. We also plan
    to initiate reviews of other technologies needed to implement Free
    Flight as well as FAA's program to acquire automation capabilities for
    the oceanic airspace.
        Transition to Satellite Technology.--OIG reported that FAA's
    transition plan for air traffic management satellite technology needed
    to fully address costs, financing sources, components, and timing. To
    successfully implement the satellite-based systems, FAA also needs to
    resolve issues about availability of a second signal, effects of solar
    activity on signals, and security from ``jamming.'' In 1998, OIG
    reported that FAA needed to determine whether its WAAS Program will be
    a sole or primary means of navigation and stated that a back up system
    would be needed for the foreseeable future. OIG also reported on
    program financial limitations, the need to establish more realistic
    schedules, deferring a commitment for additional satellites, and
    extending the decommissioning schedule for existing navigation systems.
        Design and Development of New Air Traffic Control Systems.--OIG
    reported that FAA did not adequately consider users' needs in the
    design and development of STARS, a new computer system that tracks and
    displays airplanes for air traffic controllers. Controllers and
    maintenance technicians have identified numerous potential problems
    with STARS that could affect its utility to them and, as a consequence,
    affect air safety. OIG reported three additional areas that posed risks
    to the program's costs and schedule. A 1998 OIG review found that FAA
    did not adequately budget funds for controller display equipment and
    had no definitive plans to acquire the needed equipment for the
    program. The STARS Program will not meet its original schedule and
    program costs are projected to increase by nearly $300 million. Because
    of concerns about the significant cost growth for software development
    on major systems, OIG plans to initiate an audit in this area in fiscal
    year 1999.
        Systemic Deficiencies in Major Acquisitions.--OIG found systemic
    problems in FAA's major modernization acquisitions. The problems
    included frequently changing requirements, inadequate oversight of
    contractors, poor contract specifications, and lack of comprehensive
    cost-benefit analyses. In a series of reports, OIG noted that
    deficiencies in FAA's Advanced Automation System (AAS) Program
    contributed to large cost overruns and lengthy schedule delays. In a
    1998 review of AAS, OIG estimated that FAA wasted $1.5 billion on the
    program. In another review, OIG recommended FAA reinstitute the use of
    checklists and followup processes, and strengthen planning for the
    integration of multiple systems. In addition, due to serious
    supportability and Year 2000 concerns, OIG recommended FAA accelerate
    its program to acquire new mainframe computers at its enroute air
    traffic control centers.
        Systems Architecture for Major Acquisitions.--GAO found that FAA
    failed to define and enforce a complete air traffic control systems
    architecture; a comprehensive blueprint to guide and constrain the
    development of the related systems. FAA also lacked detailed
    information technology and communications standards. FAA's failure to
    define and hold to a complete architecture has spurred
    incompatibilities among existing systems, and the likelihood that
    future systems will not be compatible. FAA has recently issued a draft
    National Airspace System architecture and is working closely with the
    aviation industry to obtain consensus.
        Cost-Estimating and Cost-Accounting Processes.--FAA's air traffic
    control modernization program lacks reliable cost information. FAA's
    weak cost-estimating processes lead to estimates that are not
    analytically derived and supported. FAA also lacks an accounting system
    that accumulates all project costs, increasing the likelihood of poor
    investment decisions throughout the life cycle of the projects.
        Air Traffic Controller Training on Critical Backup System.--OIG
    recently reported that air traffic controllers at FAA's en route
    centers needed increased proficiency training using the HOST computer's
    backup system. While we concluded that the backup system, called Direct
    Access Radar Channel (DARC), was reliable, we noted DARC has
    limitations that reduce controller efficiency. OIG found that reliance
    on DARC is expected to increase during the HOST Replacement transition
    period. Further, a large number of air traffic controllers at the five
    en route centers we visited had very limited or no operational
    experience controlling air traffic using DARC. Thus, in order to
    minimize the impact of outages during the HOST Replacement, we
    recommended FAA ensure all center air traffic controllers receive
    additional training using DARC.
                                 faa financing
        Financing FAA activities and the air traffic control system is a
    major issue that the Department, the Congress, and the aviation
    community need to address. Currently, FAA faces significant risks in
    meeting rising operations costs. Over the past 10 years FAA's annual
    operations requirements have almost doubled from $3 billion to almost
    $6 billion and the cost of operations is expected to continue to rise.
    For example, a recent increase in pay for air traffic controllers could
    require as much as $1 billion in additional funding over the next 5
    years.
        FAA needs to find ways to manage within budgets that are not
    expected to keep pace with the growth in operations costs. FAA must
    mitigate the risks of funding shortfalls by controlling costs and
    increasing productivity. Also, a reliable cost accounting system is
    needed to support management decisions, and help identify actions that
    can reduce operating costs. Credible information will strengthen FAA's
    capacity to justify sufficient funding. Adequate financing for FAA
    activities underpins all five DOT strategic goals and one key
    Departmental corporate management strategy. They are:
    DOT Strategic Goal # 1
        Safety.--``Promote the public health and safety by working toward
    the elimination of transportation-related deaths, injuries, and
    property damage.''
    DOT Strategic Goal # 2
        Mobility.--``Shape America's future by ensuring a transportation
    system that is accessible, integrated, efficient, and offers
    flexibility of choices.''
    DOT Strategic Goal # 3
        Economic Growth and Trade.--``Advance America's economic growth and
    competitiveness domestically and internationally through efficient and
    flexible transportation.''
    DOT Strategic Goal # 4
        Human and Natural Environment.--``Protect and enhance communities
    and the natural environment affected by transportation.''
    DOT Strategic Goal # 5
        National Security.--``Advance the nation's vital security interests
    in support of national strategies such as the National Security
    Strategy and National Drug Control Strategy by ensuring that the
    transportation system is secure and available for defense mobility and
    that our borders are safe from illegal intrusion.''
    DOT Corporate Management Strategy
        Resource and Business Process Management.--``Foster innovative and
    sound business practices as stewards of the public's resources in our
    quest for a fast, safe, efficient and convenient transportation
    system.'' Included under this strategy are budget management,
    resources, financial management, and asset management.
        Key OIG Contacts.--John Meche, Deputy Assistant Inspector General
    for Financial, Economic, and Information Technology, 202-366-1496;
    Alexis Stefani, Deputy Assistant Inspector General for Aviation, 202-
    366-0500.
    Background
        FAA's funding predicament for fiscal year 1999 operations is
    caused, in part, by a new pay system agreed to between FAA and the
    National Air Traffic Controllers Association. The new pay system could
    increase costs as much as $1 billion over the next 5 years with an
    immediate impact of $102 million on FAA's fiscal year 1999 budget. To
    further compound this issue, FAA has been prohibited by federal court
    from collecting approximately $93 million in user fees. FAA will need
    to identify offsetting savings and productivity gains to meet its
    funding requirements. Achieving the necessary funding goals will
    require difficult decisions on what will be cut.
        Securing adequate and stable funding sources for FAA is a critical
    issue facing DOT and the Congress. Recognizing the seriousness of FAA's
    long-term financing problems, Congress directed that an independent
    assessment be made of FAA's budgetary requirements. The National Civil
    Aviation Review Commission was created to analyze FAA's budgetary
    requirements through fiscal year 2002, including ways to fund the needs
    of the aviation system. In December 1997, the Commission recommended
    that FAA be shielded from discretionary budget caps and that a direct
    link be established between revenues from aviation users and spending
    on aviation services. The Commission also recommended that: air traffic
    control become a performance-based service; FAA have a cost accounting
    system and authority to start innovative leasing and borrowing
    programs; and FAA adopt cost-based user fees to support its air traffic
    system, with government funding for aviation security, safety, and
    government use of the system.
        However, even with more liberal budgetary treatment, there are
    limits on revenues that can be derived from passengers, whether they
    are called user fees, taxes, or charges. Passengers currently pay an 8
    percent tax on airline tickets and many airports impose Passenger
    Facility Charges to obtain funds for infrastructure projects. FAA, like
    other performance-based organizations in the public or private sector,
    must show discipline in controlling costs, particularly for operations
    and air traffic control acquisitions.
    Audit Coverage
        OIG has issued reports identifying FAA funding and accounting
    problems. Currently, the OIG is working on an analysis of FAA funding
    levels and the various assumptions used by the agency to project
    receipts from the trust fund, the general fund, or other sources and
    comparing them to various funding scenarios for operations and
    maintenance; facilities and equipment; airports; and research,
    engineering, and development accounts. Key issues associated with FAA
    financing include:
      --Accurately determining the amount of funds that will be needed to
            finance FAA and determining what portion of FAA's operations,
            air traffic control modernization, and airport infrastructure,
            should be financed by the trust fund, general fund, or other
            sources of funds such as passenger facility charges. This is a
            matter that will be debated in the next Congress.
      --Developing a cost accounting system on which FAA can be better
            managed and upon which ``user fees'' could be based. FAA cannot
            implement a credible and reliable cost accounting system until
            it first ensures its financial systems accurately capture and
            allocate relevant cost data and FAA obtains an unqualified
            opinion on its financial statements. FAA's financial management
            systems do not currently capture this data and until they do,
            FAA cannot receive an unqualified opinion.
        Workforce Cost Increases.--FAA and the National Air Traffic
    Controllers Association have negotiated a new pay system for air
    traffic controllers that could increase the agency's total costs of
    operations by as much as $1 billion over the next 5 years. FAA did not
    request additional funds for this pay increase in its fiscal year 1999
    budget. If FAA's future funding does not include offsetting
    appropriations or new revenue, and if performance improvements are not
    realized, the agency will face significant risks in funding the new pay
    system while, at the same time, meeting other critical agency
    requirements. These risks could be further compounded if similar pay
    programs are developed in current negotiations with FAA's two other
    largest unions.
        Cost Accounting System.--The Federal Aviation Reauthorization Act
    of 1996 directed FAA to develop a cost accounting system that reflects
    investments, costs, revenues and other financial aspects. A fully
    operational cost accounting system would help FAA measure air traffic
    control performance, establish cost accountability, and be a basis for
    user fees. FAA initially promised Congress the cost accounting system
    would be operational by October 1, 1998.
        In August 1998, OIG reported the implementation of FAA's cost
    accounting system was not on schedule. While the original schedule
    called for full implementation by October 1, 1998, the OIG found the
    schedule was overly aggressive, contained conflicting tasks, and
    omitted responsibilities and resource needs. We also reported FAA had
    yet to establish a systematic method to identify and reflect (1) the
    cost of accounting adjustments, (2) cost for all development projects,
    (3) cost incurred by other agencies for air traffic services, and (4)
    the correct labor cost charged to appropriate projects. In addition,
    FAA had not decided how to allocate its costs.
        FAA has revised its implementation goals into two stages; an
    initial operational cost accounting system by December 31, 1998, and a
    fully operational system by March 31, 1999. In addition, allocation
    rules have been drafted and are currently being validated. In our
    opinion, the March 31, 1999, revised deadline for a fully operational
    cost accounting system is not a credible deadline and is highly
    unlikely to be achieved. FAA must have an unqualified opinion on its
    financial statements before they can have a credible and defensible
    cost accounting system.
        Financial Accounting and Reporting Process.--OIG identified
    material internal control weaknesses with FAA's financial accounting
    and reporting process, which resulted in OIG disclaiming an opinion on
    FAA's financial statements for fiscal years 1992 through 1997. Based on
    work done as of December 2, 1998, we also expect to issue a disclaimer
    on FAA's fiscal year 1998 financial statements. These problems are
    discussed further under Issue 8, Financial Accounting. Until FAA
    resolves its underlying financial control deficiencies, its cost
    accounting system will not produce accurate and defensible cost data
    and FAA will not be able to sustain a cost-based user fee program.
               surface, marine, and airport infrastructure needs
        Replacement of transportation infrastructure and construction of
    projects triggered by new needs is crucial to U.S. economic viability
    and quality of life. The Transportation Equity Act for the 21st Century
    (TEA-21) provided an enormous infusion of funds for surface
    transportation infrastructure. Numerous major transportation
    infrastructure projects are in progress at a cost of billions of
    dollars. It is imperative that DOT funds are used effectively and
    efficiently to improve and expand highway, transit, airport, and
    maritime infrastructure projects. Meeting U.S. transportation
    infrastructure needs is tied to three DOT strategic goals. They are:
    DOT Strategic Goal #2
        Mobility.--``Shape America's future by ensuring a transportation
    system that is accessible, integrated, efficient, and offers
    flexibility of choices.''
    DOT Strategic Goal #3
        Economic Growth and Trade.--``Advance America's economic growth and
    competitiveness domestically and internationally through efficient and
    flexible transportation.''
    DOT Strategic Goal #4
        Human and Natural Environment.--``Protect and enhance communities
    and the natural environment affected by transportation.''
        Key OIG Contacts.--Alexis Stefani, Deputy Assistant Inspector
    General for Aviation, 202-366-0500; Patricia J. Thompson, Deputy
    Assistant Inspector General for Surface Transportation, 202-366-0687;
    Tom Howard, Deputy Assistant Inspector General for Maritime and
    Departmental Programs, 202-366-1534; and, Todd Zinser, Assistant
    Inspector General for Investigations, 202-366-1967.
    Background
        TEA-21 guarantees a record $198 billion investment over a 6-year
    period to maintain and improve America's transportation infrastructure.
    Significant funding is provided for highway and transit programs,
    highway safety, and bridge replacement and rehabilitation. TEA-21
    provides funding for programs to protect or enhance the environment,
    such as $8.1 billion for Congestion Mitigation Air Quality improvements
    and $500 million for clean fuels. Intelligent Transportation System
    projects will receive $1.3 billion to develop and deploy advanced
    technologies.
        TEA-21 also provides increased funding for transportation research
    and development on a variety of new technologies addressing critical
    infrastructure and safety problems, including $228 million for
    university education and research programs. Highway and transit
    discretionary grants funding will receive $16.7 billion for fiscal
    years 1999 through 2003. Improving and expanding the highway and
    transit infrastructure demands increased vigilance by the Department to
    guarantee the maximum impact. Because of the large influx of funds,
    there will be greater potential for fraud, embezzlement and abuse. OIG
    is therefore increasing its oversight of the Department's management of
    significant infrastructure projects.
    Audit Coverage
        Since October 1, 1997, OIG issued six audit reports covering
    selected major highway and transit infrastructure projects priced at $1
    billion or more (``mega projects''). The audits focused on current
    costs, work completed, the accuracy of supporting data, and the
    potential financial and schedule risks for each mega project. As a
    result of these reviews, we identified lessons learned and best
    practices that offer opportunities for cost-savings in future large
    infrastructure projects, including the use of value engineering, the
    design-build contracting approach, owner-controlled insurance programs,
    and the need for a sound financial plan. Key issues include:
      --Strengthening internal controls to ensure adequate management and
            oversight of the infusion of substantial additional Federal
            funds for surface infrastructure projects, preventing fraud,
            embezzlement, and abuse of funds, Ensuring the development of
            sound financial plans for high-cost transportation
            infrastructure projects,
      --Promoting the use of cost-saving techniques such as value
            engineering, design-build procurements, and owner-controlled
            insurance programs,
      --Monitoring major on-going infrastructure projects concerning
            current costs, work completed, and potential financial and
            schedule risks,
      --Recording baseline data on planned mega highway and transit
            projects to provide timely and comprehensive information and
            prioritize future reviews, and
      --Selecting high value projects for discretionary grants, awarded
            according to established criteria.
        In fiscal year 1999, OIG will continue to dedicate significant
    resources to assess DOT's oversight of infrastructure projects through
    baseline reviews to develop basic data points. We also will make in-
    depth reviews of major construction projects and follow up reviews on
    projects reviewed in previous years.
        Central Artery/Ted Williams Tunnel Project.--OIG found costs to
    complete the Boston Central Artery/Ted Williams Tunnel Project, which
    include the replacement of a segment of urban highway and a new
    airport-access tunnel under Boston Harbor, could rise as high as $11.2
    billion. We also concluded there was a likelihood of higher-than-
    budgeted costs for change orders, contract awards, and consultant costs
    in the absence of aggressive cost-controls. We are currently conducting
    a follow up review on the project's costs, funding, and schedule.
        Completion of the Metrorail System, Washington, DC.--OIG found
    Federal, state, and local funding is sufficient to pay for construction
    of the four segments of the Metrorail system, with final construction
    costs estimated to be below the original cost estimates. The report
    also disclosed that the scheduled opening of one segment is at some
    risk, and another segment, though also at risk, is likely to open on
    time.
        Cypress Freeway Project, Oakland, California.--OIG found Federal
    and state funding is sufficient to pay for construction of the project,
    and the construction costs may be less than state estimates.
        Review of Los Angeles Metropolitan Transportation Authority
    Metrorail Red Line.--OIG found the cost and schedule estimates of the
    Red Line are reasonable; however, there were still funding risks.
    Because the Los Angeles Metropolitan Transportation Authority (MTA)
    lacked an up-to-date, comprehensive Finance Plan, the agency did not
    recognize it had insufficient revenues to fund all competing capital
    projects and commitments. FTA concurred with our recommendation to
    require MTA to develop and keep current a Finance Plan. Subsequently,
    on May 13, 1998, the Board adopted a Recovery Plan (Finance Plan) which
    identified how MTA would finance the cost to complete the on-going
    segments of the Red Line; meet its other responsibilities, such as a
    court-ordered Consent Decree to improve bus service; and fund its
    operating costs. OIG reviewed MTA's Recovery Plan and found it to be
    reasonable. We noted, however, that vigilant oversight by management
    will be required to ensure that the project meets Recovery Plan goals.
    We will continue to monitor the project and update previous audit work.
        Interstate 15 Reconstruction Project in Utah.--OIG found the use of
    the Design-Build contracting approach will enable the project to be
    completed ahead of schedule, saving an estimated 3 years of time
    compared to traditional contracting methods. The project is scheduled
    to open 7 months before the start of the 2002 Winter Olympic Games in
    Salt Lake City and surrounding environs. OIG also found the $1.6
    billion cost of the project is reasonable, but funding had not been
    identified to cover all I-15 project costs. In August 1998, Utah's
    Department of Transportation requested additional Federal funding under
    Section 1223 of TEA-21 to cover the identified shortfall.
        Allocating Discretionary Funds.--OIG found that Departmental
    officials were frequently not funding projects identified as the
    highest priority (59 percent of the FHWA awards and 15 percent of the
    FAA awards), nor explaining or documenting the rationale for these
    decisions. The OIG recommended that the Secretary develop appropriate
    implementing guidance on allocating discretionary funds, particularly
    the funding of the highest national priority projects and documentation
    of decision rationale. The Department notified Congress that it would
    publish selection criteria for highway discretionary programs. In
    addition, the Department will provide the appropriate Committees with
    quarterly lists of discretionary projects selected for funding and an
    explanation of how the projects were selected based on the criteria.
    The Department also agreed that discretionary funding decisions should
    be documented appropriately, and Departmental officials will take the
    steps necessary to ensure such documentation is kept.
    Investigative Coverage
        OIG has made the investigation of infrastructure contract/grant
    fraud as one of its highest priorities. With the infusion of the
    tremendous amount of TEA 21 funds into rebuilding the nation's highways
    and transit facilities, the Office of Investigations has developed a
    TEA 21 strategy to protect the expenditure of Federal funds. The
    foundation of this strategy encompasses outreach and liaison by OIG in
    working with FHWA, FTA, DOT grantees, and other law enforcement
    agencies, including the Federal Bureau of Investigation and state
    criminal investigations units, to ensure that public monies are spent
    wisely and efficiently.
        OIG has actively promoted measures within the Department to deter
    criminal activities. For example, as a follow up to a false claims case
    involving a highway construction project, OIG recommended that FHWA
    establish procedures in all States that require a certification
    statement on all claims and supplemental agreements, similar to the
    statement required for progress payments on highway construction
    contracts. The contractor would affirm that all information contained
    on a claim is true, correct, and accurate, subject to criminal
    prosecution for false statements. This would aid in the prosecution of
    contractors who file misleading and false claims.
        Contractor ``Kickbacks''.--An ongoing investigation by the OIG and
    the Federal Bureau of Investigation led to three guilty pleas involving
    conspiracy, bribery, and money-laundering. One FHWA employee was
    sentenced to 37 months incarceration, 3 years supervised release, and
    fined $5,000 for soliciting and receiving more than $150,000 in cash
    and money orders from government contractors. Two contractors have
    pleaded guilty to conspiracy charges on FHWA contracts involving
    advanced vehicle highway technologies. A separate investigation
    involving the payment of gratuities to an FTA grantee employee resulted
    in a guilty plea by the vice president of a Cambridge, MA, construction
    company and charges of corruption for soliciting and obtaining money
    and property.
        Contractor Fraud/False Billing.--As a result of an OIG
    investigation, on November 12, 1998, in Madison, Wisconsin Federal
    Court, Daniel Benkert pleaded guilty to making false statements on
    highway construction projects. Benkert was a supervisor for Yahara
    Materials, a road construction company that also owns several aggregate
    pits which provide materials for the construction industry. Benkert
    instructed his subordinates to prepare at least 148 false weight
    tickets representing truck loads of gravel or aggregate that were never
    delivered, but billed, to a Federal-aid highway project.
    Maritime Infrastructure
    Background
        The United States is dependent on the marine transportation system
    for 95 percent of overseas international trade and 25 percent of
    domestic trade. This system, which is comprised of the nation's
    waterways, ports, and intermodal connections, requires coordination to
    operate efficiently and effectively. Although national, state, and
    local government agencies share ownership, management, and operation of
    the marine transportation system with the private sector, there is no
    coordinated national leadership. Without coordinated leadership, the
    nation's mobility, safety, economic growth, competitiveness, natural
    environment, and security may be adversely impacted.
        The Department of Transportation needs to provide leadership to
    maintain, improve, and develop port, waterway, and intermodal
    infrastructure and services to meet current and future needs. For
    example, the marine transportation infrastructure (channel depths and
    widths, deep-draft anchorages, portside facilities, and rail and
    highway access) is not adequate to meet the nation's growing demand for
    moving passengers and cargo. Maritime trade is predicted to double
    within the next generation with megaships, including large container
    vessels capable of carrying over 6,000 20-foot container equivalent
    units, and passenger vessels with capacities exceeding 3,000
    passengers. U.S. competitiveness and economic growth will be dependent
    upon the ability of U.S. ports to accommodate these vessels.
        Since most of the nation's channels and harbors are not naturally
    deep enough to accommodate modern vessels, dredging is essential.
    Currently, only three U.S. ports, all located on the West Coast,
    provide channel depths of 50 feet or more that are capable of handling
    a fully loaded megaship. However, dredging has become controversial
    given concerns about dredged material disposal, increasing
    environmental awareness, and recognition of the sensitivity and value
    of the coastal ecosystems. In addition, since many ports are publicly
    owned state or local entities with limited budgets for dredging,
    economic issues must be resolved. The U.S. port industry is concerned
    over the Supreme Court decision that the Harbor Maintenance Tax on
    exports was unconstitutional. During fiscal year 1997, the trust fund
    generated by this tax provided about $546 million for dredging.
    Effectively addressing these factors is critical to economic growth and
    environmental stewardship.
        There is a need to develop a dedicated funding stream for maritime
    infrastructure maintenance and improvements. The Congress did not
    approve the Administration's recently proposed replacement for the
    Harbor Maintenance Tax. Also, user fees are unpopular and funding for
    system projects is administered by numerous federal agencies.
    Inadequate and uncoordinated funding will adversely impact dredging,
    port development, and ultimately port selection by carriers. Finding
    opportunities for cost-sharing ventures and public-private partnerships
    to improve the maritime infrastructure is critical to U.S.
    competitiveness.
        The Office of Inspector General plans to review the Department's
    efforts to maintain and upgrade the maritime infrastructure, especially
    as they relate to megaport development, environmental issues, and
    funding mechanisms. We will focus our work on initiatives resulting
    from the Department's November 17-19, 1998, conference on the Marine
    Transportation System.
    Airport Infrastructure
    Background
        The majority of funds to maintain and improve the nation's airport
    infrastructure come from three sources: airport and special facility
    bonds, Airport Improvement Program (AIP) grants, and passenger facility
    charges (PFC) on airline tickets. Airport industry associations
    estimate that through the year 2002, airports in the National Airport
    System will need $10 billion annually for capital investments to
    maintain the integrity of airport infrastructure. This estimate
    includes all capital projects, whether or not eligible for AIP grants.
        Airports in the National Airport System are eligible for AIP grants
    awarded by the FAA. AIP grants are funded through the Airport and
    Airway Trust Fund, which is supported entirely by taxes on aviation
    users. AIP funding in fiscal year 1998 was $1.7 billion. AIP funding
    for fiscal year 1999 is $1.95 billion, but only $975 million can be
    obligated through March 1999 or prior to reauthorization of the AIP.
    FAA gives the highest priority for AIP funds to projects that address
    safety, security, noise mitigation, and rehabilitation/reconstruction
    of existing airfields. According to FAA records, from 1982 through
    1996, 53 percent of AIP funds were spent for runways, taxiways, and
    aprons. The next largest use of AIP funds was noise projects, which
    accounted for 11 percent of total AIP expenditures. The OIG will
    continue to review the use of airport revenue to help the FAA ensure
    that maximum benefits to the flying public accrue from these funds.
    Audit Coverage
        In recent years, the OIG has issued a series of reports on airport
    infrastructure subjects. Key issues that must still be addressed in
    funding airport infrastructure needs include:
      --Eliminating the prohibited diversion of airport revenues by airport
            sponsors,
      --Strengthening prevention of fraud, waste, and abuse especially in
            view of the infusion of substantial additional amounts of
            Federal funds for infrastructure,
      --Selecting high value projects for AIP grant funds, and
      --Establishing policy on PFC funding eligibility requirements.
        Diversion of Airport Revenue.--The OIG has issued two reports since
    January 1998 identifying airport revenues used for prohibited purposes.
    One report found that the local county commission diverted $2.6 million
    in airport generated revenue to the county general fund for nonairport
    related purposes. In September 1998, OIG notified FAA of an additional
    $1 million in potential revenue diversions at five airports nationwide.
        Airport Financial Reports.--OIG found that 4 years after Congress
    legislated requirements associated with airport revenue use, FAA had
    not taken action to issue final policies. In addition, FAA did not
    provide effective oversight of airport financial reports. About 20
    percent of the airport sponsors required to file reports had not done
    so, and the majority of the reports that were filed contained
    incomplete and inaccurate information.
        The FAA Associate Administrator of Airports has made issuing final
    policy on the use of airport revenue a top priority and plans to
    publish the policy by the end of December 1998. In addition, FAA
    incorporated a specific standard on the use of airport revenue in the
    fiscal year 1999 performance plans of the Associate Administrator of
    Airports, the Director of Airport Safety and Standards, and the Manager
    of the Airports Compliance Division. Also, FAA issued Advisory Circular
    (AC) No. 150/5100-19, Guide for Airport Financial Reports Filed by
    Airport Sponsors, on September 10, 1998, which updates airport
    financial reporting forms and instructions.
        Awarding of Discretionary Funds.--FAA has developed criteria and
    was following its established process for identifying and prioritizing
    projects for discretionary funding. However, we found FAA sometimes
    direct funds to lower priority projects within a region instead of
    funding the highest national priority. FAA allocated $100 million, or
    15 percent of its $669 million in fiscal year 1997 discretionary funds
    to lower priority projects. Also, contrary to FAA policy, some airport
    sponsors requested discretionary funds for high priority projects while
    planning to use entitlement funds for lower priority projects that
    would not compete favorably for discretionary funds in the national
    priority system.
        PFC Policy Issues.--PFCs have become an important funding source
    for airport projects. However, FAA does not currently have a policy to
    address the funding of ``landside'' projects with PFCs, such as the
    light-rail extension recently approved at JFK airport. In our opinion,
    the FAA Administrator, prior to approving any such PFC request, should
    make a determination of: (1) the extent to which the ``landside''
    project is likely to result in additional air transport passengers; (2)
    any impacts the approval would have on the financing of airside
    projects related to safety, security, capacity, or noise reduction;
    and, (3) whether cost sharing or the use of surface transportation
    funds should be used to finance a portion of such projects. This issue
    is of even more significance given the likelihood that proposals to
    increase the current $3 PFC cap may be considered during the FAA
    reauthorization process.
                      transportation and computer security
        DOT needs to advance the nation's vital security interest by
    ensuring that the transportation system is secure and that our computer
    systems are safe from illegal intrusion. Protecting the security of the
    traveling public is among DOT's most challenging tasks. Transportation
    and computer security are linked to two DOT strategic goals and one DOT
    corporate management strategy. They are:
    DOT Strategic Goal # 1
        Safety.--``Promote the public health and safety by working toward
    the elimination of transportation-related deaths, injuries, and
    property damage.''
    DOT Strategic Goal # 5
        National Security.--``Advance the nation's vital security interests
    in support of national strategies such as the National Security
    Strategy and National Drug Control Strategy by ensuring that the
    transportation system is secure and available for defense mobility and
    that our borders are safe from illegal intrusion.''
    DOT Corporate Management Strategies
        Information Technology.--``Improve mission performance, data
    sharing, system integrity, communications, and productivity through
    deployment of information systems which are secure, reliable,
    compatible, and cost effective now and beyond the Year 2000.''
        Key OIG Contacts.--John Meche, Deputy Assistant Inspector General
    for Financial, Economic, and Information Technology, 202-366-1496; and
    Alexis Stefani, Deputy Assistant Inspector General for Aviation, 202-
    366-0500.
    Background
        Presidential Decision Directives 62 and 63, dated May 22, 1998,
    require Federal agencies to implement a more systematic approach to
    fighting terrorism, secure their critical information systems and
    facilities within 2 years, and assist industries to secure the national
    transportation infrastructure within 5 years. The U.S. transportation
    system includes 3.9 million miles of public roads, 1.5 million miles of
    oil and natural gas pipelines, 123 thousand miles of major railroads,
    over 24 thousand miles of commercially navigable waterways, over 5
    thousand public-use airports, 508 public transit operators in 316
    urbanized areas, and 145 major ports on the coasts and inland
    waterways. The ability to prevent terrorist attacks within this vast
    system, and fraudulent intrusions into computer systems must be
    strengthened. Vulnerabilities of the information and communications
    infrastructure also affect every aspect of the transportation industry.
        Civil aviation security remains a top priority. In February 1997,
    the White House Commission on Aviation Safety and Security reported to
    the President and made 31 recommendations to improve security for
    travelers. FAA was responsible for implementing 21 of the
    recommendations. As of October 1998, FAA has completed actions on 10 of
    the recommendations and improvements to address the remaining
    recommendations are in-progress.
    Audit Coverage
        In recent years, OIG has issued reports on aviation and computer
    security highlighting various weaknesses. Key elements of these issues
    are:
      --Reducing the vulnerabilities in airport security controls,
      --Enhancing the use of new technologies such as explosives detection
            equipment,
      --Improving compliance with shipping requirements related to
            hazardous materials and dangerous goods, and
      --Developing staff expertise and technical capabilities to detect
            intrusions to DOT and FAA computer networks and acting to
            reduce vulnerabilities.
        In addition, OIG testified on aviation and computer security issues
    requiring immediate DOT attention.
        Airport Security.--OIG reported that airports and air carriers were
    not complying with access control and challenge requirements, and
    passenger screening checkpoint operators failed to detect improvised
    explosives devices at an alarming rate. OIG is currently conducting
    audits of FAA's oversight of the aviation industry's compliance with
    airport access control requirements, and passenger profiling and
    checked baggage screening requirements.
        Deployment of Explosives Detection Equipment.--A 1998 audit of
    FAA's deployment of explosives detection equipment found that air
    carriers were underutilizing the equipment already deployed for
    screening checked baggage, and the equipment performance in airports
    differed from its performance during certification testing. OIG
    continues to monitor FAA's explosives detection equipment deployment
    activities and progress.
        Dangerous Goods/Cargo Security.--A 1997 audit found substantial
    rates of noncompliance with dangerous goods regulations and cargo
    security requirements during assessments and tests of air carrier and
    airfreight forwarders operations. Also, a 1997 OIG/FAA joint review of
    air courier operations found compliance with cargo security
    requirements unacceptable and controls over air courier shipments
    inadequate.
        Aviation Security.--In May 1998, OIG testified that to meet current
    and future threats to aviation security, FAA needs an integrated
    strategic plan to guide its efforts and prioritize funding needs. The
    strategic plan should include a balanced approach covering basic
    research, equipment deployment and use, certification and operations
    testing processes, data collection and analysis on actual operator
    performance, and regulation and enforcement of aviation security
    requirements.
        Computer Security.--In August 1998, OIG testified that DOT had not
    obtained assurances of compliance with DOT security requirements from
    outside users of its computer networks, and only 1 of the 20 major DOT
    networks had been certified as secured. FAA also needs to implement
    more sophisticated network security measures when modernizing the
    National Airspace System with open system and common network
    technologies. Physical security over the Host computers in the en-route
    centers needs to be improved to avoid losing both the primary and
    backup computers to a single catastrophic event.
               financial accounting/chief financial officers act
        DOT has made significant progress in improving its financial
    accounting and reporting systems. The President has established a goal
    to earn an unqualified audit opinion on the Governmentwide fiscal year
    1999 financial statements. The Department also has adopted this goal
    for its financial statements. Three major issues stand in the way of
    DOT receiving an unqualified opinion on its financial statements, the
    most challenging being the FAA property and equipment accounts totaling
    about $12 billion. FAA cannot implement a reliable and credible cost
    accounting system until it receives an unqualified opinion on its
    financial statements. The Department has developed a plan to correct
    problems with its property and equipment accounts. Sound financial
    accounting is a key corporate management strategy in the Department.
    DOT Corporate Management Strategy
        Resource and Business Process.--``Foster innovative and sound
    business practices as stewards of the public's resources in our quest
    for a fast, safe, efficient, and convenient transportation system.''
        Key OIG Contact.--John Meche, Deputy Assistant Inspector General
    for Financial, Economic, and Information Technology, 202-366-1496.
    Background
        Four Federal statutes have established new standards for financial
    accounting and reporting by federal agencies, starting with the Chief
    Financial Officers Act of 1990 (CFO). These laws aim to improve
    financial management, control of funds, and reliability of financial
    information. Pertinent laws adopted subsequent to the CFO Act include
    the Government Performance and Results Act of 1993, the Government
    Management Reform Act of 1994, and the Federal Financial Management
    Improvement Act of 1997.
    Audit Coverage
        Since passage of the CFO Act, OIG has issued 33 audit reports on
    DOT financial statements. Those reports made 295 recommendations
    regarding 196 findings.
        OIG's most current work includes three audit reports in March 1998
    on DOT's fiscal year 1997 Financial Statements; the DOT Consolidated
    Financial Statements, and the financial statements for the Federal
    Aviation Administration and the Highway Trust Fund. Major financial
    areas that need to be addressed are:
      --Developing and implementing a plan for FAA to account for and value
            its property and equipment, including its multi-billion dollar
            work-in-process accounts for Air Traffic Control Modernization,
      --Computing a reliable estimate of Coast Guard's future liability for
            military retirement pay and health care costs, and
      --Ensuring that the Treasury Department develops adequate support for
            trust fund revenues and account balances totaling $28 billion.
        We also reported that the Department's core accounting system did
    not support the financial statements, and the Department does not have
    a cost accounting system in place. For fiscal year 1998 financial
    statements, cost accounting systems are needed to provide cost
    information to evaluate program accomplishments and performance
    measures included in the Department's Strategic Plan.
        With respect to FAA, on December 2, 1998, we identified three major
    issues standing in the way of FAA getting an unqualified audit opinion
    on its financial statements.
      --The work-in-process account, with a current balance of $3.7
            billion, includes erroneous cost data and projects that were
            completed over 5 years ago. Only active projects should be in
            this account.
      --FAA cannot provide supporting documentation for its real property
            (land, buildings and structures) valued at $2.5 billion, and
            must use alternative procedures to compute supportable real
            property values.
      --Personal property (equipment) was valued at $4.4 billion, but FAA
            cannot support its acquisition costs because much of the costs
            were ``written off'' as operating expenses.
        At this late stage, there are no easy solutions. Hard work,
    effective teamwork, accountability, and operating with a sense of
    urgency are a must. DOT and OIG are working together closely to correct
    problems identified in audits. Some fixes will be time consuming and
    costly. Further, some of DOT's financial management systems are out of
    date and are in the process of being replaced. The Department is
    developing temporary processes to provide adequate support for
    financial statements until old systems are replaced.
                    amtrak financial viability/modernization
        Congress created the National Passenger Railroad Corporation,
    ``Amtrak'', in 1971 to provide a national system of modern intercity
    passenger rail. Since its creation, it has been the shared goal of
    Congress and Amtrak for the service to operate without Federal
    operating assistance. However, Amtrak has continued to rely heavily on
    Federal funds to cover its annual operating losses. Amtrak's current
    plans are to eliminate the need for this assistance by the end of
    fiscal year 2002 because it is uncertain how much longer, and to what
    extent, Congress will be willing to provide operating assistance.
    Amtrak modernization is closely linked to three DOT strategic goals.
    They are:
    DOT Strategic Goal # 2
        Mobility.--``Shape America's future by ensuring a transportation
    system that is accessible, integrated, efficient, and offers
    flexibility of choices.''
    DOT Strategic Goal # 3
        Economic Growth and Trade.--``Advance America's economic growth and
    competitiveness domestically and internationally through efficient and
    flexible transportation.''
    DOT Strategic Goal # 4
        Human and Natural Environment.--``Protect and enhance communities
    and the natural environment affected by transportation.''
        Key OIG Contact.--Mark Dayton, Director, Technical Staff, 202-366-
    2001.
    Background
        Section 202 of the Amtrak Reform and Accountability Act of 1997
    (ARAA) directed the Office of Inspector General to contract with an
    independent entity to conduct a complete analysis of Amtrak's financial
    needs through fiscal year 2002. The contract was awarded in May 1998
    and a final report has been issued. The law requires the OIG to monitor
    the contractor's progress and to perform such overview and validation
    or verification of data as is necessary to assure that the independent
    assessment meets the requirements of the ARAA.
        The assessment validated Amtrak's reporting of its current
    financial status and reviewed Amtrak's systems for financial reporting.
    A key element of the assessment was to analyze Amtrak's Strategic
    Business Plan to determine whether its projections for achieving self-
    sufficiency by the end of fiscal year 2002 were reasonable. The
    assessment reviewed Amtrak's estimates of capital needs and produced
    alternative capital requirements scenarios. The assessment compared the
    various estimates of capital needs to projected available capital
    investment resources to identify any potential funding shortfalls.
    Audit Coverage
        OIG has performed several Amtrak-related reviews in recent years.
    Significant issues that must be addressed include:
      --Implementing substantial infrastructure improvements to the
            Northeast Corridor in order to realize the projected benefits
            of high-speed rail service, and
      --Mitigating the risks in Amtrak's Strategic Business Plan. Amtrak
            has significant capital needs and the projected level of
            Federal funding between fiscal year 1999 and fiscal year 2003
            is likely to fall short of needs by $0.5 billion to $1.8
            billion. To the extent that Amtrak's operating losses are
            greater than projected, this capital shortfall will increase as
            Amtrak will need to use more of its Federal funding to cover
            operating losses, leaving less for capital spending. Amtrak's
            plans, if not adjusted, will result in operating losses in
            fiscal year 2003 and beyond that will likely require continued
            Federal operating support.
        High-Speed Rail in the Northeast Corridor.--Amtrak plans to begin
    high-speed rail service in October 1999. When fully implemented,
    service between Boston and New York will take 3 hours, 10 minutes and
    service between New York and Washington, D.C. will take 2 hours, 45
    minutes.\1\ Amtrak's original 1995 budget for trains, maintenance
    facilities, and infrastructure improvements was $1.9 billion; by
    October 1998 it had grown to $2.47 billion. Delays in the
    electrification project construction schedule will make the October
    1999 start-up date a challenge, but it is one Amtrak is confident will
    be met. Finally, if they are not addressed, an estimated $3.2 billion
    in remaining Northeast Corridor infrastructure needs will negatively
    affect the speed and reliability of this service, which will ultimately
    stifle ridership and constrain revenues. As Amtrak attempts to meet its
    congressional mandate of becoming operationally self-sufficient by the
    end of fiscal year 2002, high-speed rail revenues are expected to play
    a critical role.
    ---------------------------------------------------------------------------
        \1\ Current running times are: 4 hours, 45 minutes (New York to
    Boston); 3 hours, 2 minutes (New York to Washington, DC)
    ---------------------------------------------------------------------------
        Independent Assessment of Amtrak.--This was completed in November
    1998, and assessed the likelihood that Amtrak will meet its goal of
    achieving operating self-sufficiency by the end of fiscal year 2002. We
    reviewed the projections in Amtrak's Strategic Business Plan to
    determine whether the actions Amtrak has specified as a means of
    reaching this goal are reasonable. We found that portions of the plan
    are at risk, and that if the plan were followed without modification,
    Amtrak's cash loss over the period fiscal year 1999 to fiscal year 2003
    would be $0.8 billion higher than forecast in the plan, $2.9 billion
    versus $2.1 billion. We fully expect that Amtrak will make adjustments
    to its business plan, as it has in fiscal year 1998, and replace
    nonperforming activities with new activities to increase revenues or
    decrease costs, thereby mitigating at least some of this additional
    loss.
        Amtrak has estimated its capital needs total between $3.9 billion
    and $4.7 billion for the period fiscal year 1999 through fiscal year
    2003. Expected Federal funding during this period is $2.2 billion which
    would result in a funding shortfall of at least $1.7 billion. We
    believe Amtrak's bare minimum capital needs total $2.7 billion, but
    recommend a higher level to sustain Amtrak beyond fiscal year 2003 and
    provide funds to invest in new business ventures. This level would be
    between $3 and $4 billion during the period fiscal year 1999-fiscal
    year 2003. We note that the funding shortfall for even meeting minimum
    needs would total $0.5 billion. These projected shortfalls assume that
    Amtrak's operating losses would not exceed what it projects in its
    business plan. If they do, Amtrak will need to use more of its capital
    funding to offset the losses, which would further deplete the amount of
    funding available for capital investment.
        The Amtrak Board is aware of the risk and has informed the OIG that
    it has already initiated changes to the Strategic Business Plan that
    will eliminate at least $390 million of at-risk revenues and cost
    reductions cited in the assessment.
        The ARAA requires the OIG to assess Amtrak's 1999 Strategic
    Business Plan. OIG has taken note of the Amtrak Board's observations,
    concerns, and changes to its Strategic Business Plan, and will address
    their validity during the next phase of OIG's congressional mandate.
                           dot implementation of gpra
        Many of DOT's outcomes such as improved safety, reduction in
    fatalities and injuries, and well-maintained highways depend in large
    part on actions taken and assistance provided by third parties outside
    the Department, including other Federal agencies, states, and various
    components of the transportation industry. Their assistance will be
    critical in meeting DOT's goals. Another major factor that will impact
    DOT's ability to achieve its goals is the effective utilization of
    human resources. DOT must effectively manage the workforce, recruit
    highly qualified individuals for vacant positions, and provide
    requisite technical and other training in order to successfully meet
    the management, safety, and efficiency challenges facing the U.S.
    transportation system.
        Key OIG Contact.--Mark Dayton, Director, Technical Staff, 202-366-
    2001.
    Background
        GPRA required the development, by all Federal agencies, of 5-year
    strategic plans and annual performance plans and reports. DOT issued
    its first strategic plan in September 1997, and its first performance
    plan for fiscal year 1999 in February 1998. In a rating of agency plans
    by Congress, both were found to be the best among those submitted by 24
    Federal agencies. Nevertheless, the General Accounting Office has
    identified several weaknesses in these plans, especially in the area of
    crosscutting issues and the verifying and validating of performance
    data. The Department's first performance report to Congress is due
    March 31, 2000.
    Audit Coverage
        In fiscal year 1998, we issued 19 audit reports that addressed
    DOT's implementation of GPRA. Although DOT's strategic and performance
    plans were highly rated, we identified a number of programmatic and/or
    operational areas requiring improvement. Some of the areas include:
      --Establishing performance goals and measures for: (1) FAA's
            personnel reform initiatives and runway incursion program, (2)
            USCG's oversight of private sector oil spill response
            capabilities, and (3) FRA's commuter rail safety requirements,
      --Completing performance goals and measures for: (1) the diversion of
            airport revenue, and (2) risk of terrorism to U.S. passengers
            at foreign and domestic ports and waterfront facilities, and
        Improving performance goals and measures for: (1) FAA's contract
    tower program, and (2) DOT's and FAA's fiscal year 1997 Financial
    Statements.
        As stated in DOT's fiscal year 1999 performance plan, OIG will
    selectively: (1) verify and validate performance data, and (2) assess
    performance measures to determine their appropriateness for measuring
    progress toward stated goals. Moreover, to further enhance our work in
    this area, we have developed a 2-day course on auditing GPRA
    implementation. This course, which is being given to all audit staff,
    addresses relevant GPRA regulations, policies, and guidelines; OIG
    oversight responsibilities; and approaches for auditing performance
    goals, measures, and data. To date, nearly 50 auditors have received
    the training.
                                  bibliography
                                aviation safety
        Staffing: Reductions in the Number of Supervisors Will Require
    Enhancements to FAA's Controller-in-Charge Program, OIG Report Number
    AV-1999-020, November 16, 1998
        FAA Aviation Industry Notification Regarding Testing Specifications
    for Threaded Fasteners and Components, OIG Report Number AV-1998-177,
    July 17, 1998
        FAA Deviations and Exemptions to Safety-Related Regulations, OIG
    Report Number AV-1998-171, July 16,1998
        Status of the FAA 90-Day Safety Review Recommendations, Joint OIG/
    FAA, Report Number AV-1998-090, March 3, 1998
        Report on Audit of the Runway Incursion Program, OIG Report Number
    AV-1998-075, February 9, 1998
        Avoiding Aviation Gridlock and Reducing the Accident Rate: A
    Consensus for Change, National Civil Aviation Review Commission,
    December 1997
        Airport Certification Program, OIG Report Number AV-1998-025,
    November 21, 1997
        Statement of Kenneth M. Mead, Inspector General, Before the
    Subcommittee on Aviation, Committee on Transportation and
    Infrastructure, U.S. House of Representatives, Federal Aviation
    Administration's Runway Incursion Program, Report Number AV-1998-015,
    November 13, 1997
        Management Advisory on Aviation Inspection Program, OIG Report
    Number AV-1998-005, November 4, 1997
        FAA 90 Day Safety Review, FAA, September 16, 1996
        Targeting and Training of FAA's Safety Inspector Workforce, GAO
    Report Number GAO/T-RCED-96-26, April 30, 1996
        Data Problems Threaten FAA Strides on Safety Analysis System, GAO
    Report Number GAO/AIMD-95-27, February 8, 1995
        Aviation Inspector Program, OIG Report Number R6-FA-2-084, May 29,
    1992
        Aviation Safety: Needed Improvements in FAA's Airline Inspector
    Program are Underway, GAO Report Number GAO/RCED-87-62, May 19, 1987
                         surface transportation safety
        Safety Assurance and Compliance Program, OIG Report Number TR-1998-
    210, September 30, 1998
        Hazardous Materials Registration Program, OIG Report Number TR-
    1998-110, April 3, 1998
        Inspection of Federally Owned Bridges, OIG Report Number TR-1998-
    079, February 11, 1998
        Motor Carrier Safety Program, OIG Report Number AS-FH-7-006, March
    26, 1997
                           year 2000 computer issues
        The Year 2000 Computer Program and Computer Security Challenges,
    OIG Report Number FE-1998-187, August 25, 1998
        Testimony on the Year 2000 Computer Program and Computer Security
    Challenges, August 6, 1998
        The Year 2000 Computer Challenges, OIG Report Number FE-1998-068,
    February 23, 1998
        Testimony on the Year 2000 Challenges for the Air Traffic Control
    System, February 4, 1998
        Assessing the Year 2000 Computer Problem, OIG Report Number FE-
    1998-053, December 18, 1997
        Management Advisory on Year 2000 Computer Problem, OIG Report
    Number FE-1998-027, November 26, 1997
                       air traffic control modernization
        Using the Direct Access Radar Channel During the Host Replacement
    Program, OIG Report Number AV-1999-030, November 30, 1998
        Wide Area Augmentation System, OIG Report Number AV-1998-189,
    August 10, 1998
        Report on Implementation of Cost Accounting System, OIG Report
    Number FE-1998-186, August 10, 1998
        STARS Main Display Monitors, OIG Report Number AV-1998-169, July 9,
    1998
        Wide Area Augmentation System, OIG Report Number AV-1998-117, May
    13, 1998
        Report on FAA's Advanced Automation System, OIG Report Number AV-
    1998-113, April 15, 1998
        Statement of Kenneth M. Mead, Inspector General, Before the
    Subcommittee on Aviation, Transportation and Infrastructure, U.S. House
    of Representatives, Air Traffic Control Modernization, OIG Report
    Number AV-1998-089, March 5, 1998
        Management Advisory on Deployment Readiness Review, OIG Report
    Number AV-1998-041, December 8, 1997
        FAA's Standard Terminal Automation Replacement System (STARS), OIG
    Report Number AV-1998-012, November 12, 1997
        Testimony on Observations on the Federal Aviation Administration's
    Plan to Use Satellite Technology for Air Traffic Management, OIG Report
    Number AV-1998-001, October 17, 1997
        Air Traffic Control: Complete and Enforced Architecture Needed for
    FAA Systems Modernization, GAO Report Number: GAO/AIMD-97-30, February
    3, 1997
        Air Traffic Control: Improved Cost Information Needed to Make
    Billion Dollar Modernization Investment Decisions, GAO Report Number:
    GAO/AIMD-97-20, January 22, 1997
                                 faa financing
        Implementation of Cost Accounting System, OIG Report Number FE-
    1998-186, August 10, 1998
        FAA Control of Appropriations, OIG Report Number FE-1998-167, July
    6, 1998
        FAA Formal Reprogramming of Facilities and Equipment
    Appropriations, OIG Report Number FE-1998-132, May 7, 1998
        FY 1997 Financial Statements, OIG Report Number FE-1998-098, March
    25, 1998
        Management Advisory Memorandum on Resource Requirements Planning
    for Operating and Maintaining the National Airspace System, OIG Report
    Number AS-FA-7-004, January 13, 1997
               surface, marine, and airport infrastructure needs
        Review of Interstate 15 (I-15) Reconstruction Project in Utah, OIG
    Report Number TR-1999-028, November 24, 1998
        Review of Alameda Corridor Project, OIG Report Number TR-1999-010,
    October 16, 1998
        Completion of the Metrorail System-Washington, DC, OIG Report
    Number TR-1998-213, September 30, 1998
        Cypress Freeway Project, Oakland, California, OIG Report Number TR-
    1998-212, September 30, 1998
        Airport Financial Reports, OIG Report Number AV-1998-201, September
    11, 1998
        Imperial County Airport Hotline Complaint, OIG Report Number AV-
    1998-196, September 1, 1998
        Coolidge Municipal Airport Hotline Complaint, OIG Report Number AV-
    1998-195, August 28, 1998
        Awarding Discretionary Funds in the U.S. Department of
    Transportation, OIG Report Number MA-1998-155, June 12, 1998
        Review of Los Angeles Metropolitan Transportation Authority
    Metrorail Red Line, OIG Report Number TR-1998-154, June 12, 1998
        Central Artery/Ted Williams Tunnel Project, OIG Report Number TR-
    1998-109, April 3, 1998
        Diversion of Airport Revenue, Augusta-Richmond County Commission,
    OIG Report Number AV-1998-093, March 12, 1998
        Application to Impose and Use a Passenger Facility Charge for a
    Light Rail System at JFK Airport, January 21, 1998
                      transportation and computer security
        Deployment of Explosives Detection Systems, OIG Report Number AV-
    1999-001, October 5, 1998
        Security for Passenger Terminals and Vessels, OIG Report Number MA-
    1998-204, September 11, 1998
        The Year 2000 Computer Program and Computer Security Challenges,
    OIG Report Number FE-1998-187, August 25, 1998
        Testimony on the Year 2000 Computer Program and Computer Security
    Challenges, August 6, 1998
        Dangerous Goods/Cargo Security Program, OIG Report Number AV-1998-
    178, July 23, 1998
        Efforts to Improve Airport Security, OIG Report Number R9-FA-6-014,
    July 3, 1998
        Maritime Security Program, OIG Report Number MA-1998-156, June 12,
    1998
        Management Advisory on Review of Security Controls Over Air Courier
    Shipments, OIG Report Number AV-1998-149, June 2, 1998
        Testimony Before the Subcommittee on Aviation, Committee on
    Transportation and Infrastructure, U.S. House of Representatives,
    Aviation Security, OIG Report Number AV-1998-134, May 27, 1998
        FAA Administration of Security Guard Contracts, OIG Report Number
    AV-1998-113, April 17, 1998
               financial accounting/chief financial officers act
        FAA Report on Implementation of Cost-Accounting System, OIG Report
    Number FE-1998-186, August 10, 1998
        Actuarial Estimates for Retired Pay and Health Care Cost, OIG
    Report Number FE-1998-151, June 2, 1998
        FY 1997 Consolidated Financial Statements, OIG Report Number FE-
    1998-105, March 31, 1998
        FY 1997 Highway Trust Fund Financial Statements, OIG Report Number
    FE-1998-099, March 27, 1998
        FY 1997 Financial Statements, OIG Report Number FE-1998-098, March
    25, 1998
                    amtrak financial viability/modernization
        Summary Report on the Independent Assessment of Amtrak's Financial
    Needs Through fiscal year 2002, OIG Report Number TR-1999-027, November
    23, 1998
        Statement of Kenneth M. Mead, Inspector General, Before the
    Subcommittee on Transportation, Committee on Appropriations, U.S.
    Senate, Assessing Amtrak's Future, Report Number TR-1998-095, March 24,
    1998
                            dot compliance with gpra
        Personnel Reform: Recent Actions Represent Progress But Further
    Effort Is Needed To Achieve Comprehensive Change, OIG Report Number AV-
    1998-214, September 30, 1998
        Airport Financial Reports, OIG Report Number AV-1998-201, September
    11, 1998
        Security for Passenger Terminals and Vessels, OIG Report Number MA-
    1998-204, September 11, 1998
        Postgraduate Training Program, OIG Report Number MA-1998-148, May
    26, 1998
        Federal Contract Tower Program, OIG Report Number AV-1998-147, May
    18, 1998
        Management Advisory on Hazardous Materials Registration Program,
    OIG Report Number TR-1998-110, April 3, 1998
        FY 1997 Consolidated Financial Statements, OIG Report Number FE-
    1998-105, March 31, 1998
        FY 1997 Highway Trust Fund Financial Statements, OIG Report Number
    FE-1998-099, March 27, 1998
        FY 1997 Financial Statements, OIG Report Number FE-1998-098, March
    25, 1998
        Diversion of Airport Revenue, Augusta-Richmond County Commission,
    OIG Report Number AV-1998-093, March 12, 1998
        Results Act: Observations on the Department of Transportation's
    Annual Performance Plan for fiscal year 1999, GAO Report Number GAO/
    RCED-98-180R, March 12, 1998
        Passenger Origin-Destination Data Submitted by Air Carriers, OIG
    Report Number AV-1998-086, February 24, 1998
        Inspection of Federally Owned Bridges, OIG Report Number TR-1998-
    079, February 11, 1998
        Report on Passenger Rail Safety Emergency Orders, OIG Report Number
    TR-1998-078, February 10, 1998
        Runway Incursion Program, OIG Report Number AV-1998-075, February
    9, 1998
        Management Advisory on Selected Chief Information Officer
    Functions, OIG Report Number FE-1998-049, December 16, 1997
        Management Advisory on Unexpended Obligations on Complete and
    Inactive Highway Projects, OIG Report Number TR-1998-045, December 11,
    1997
        FAA's Runway Incursion Program, Statement by Kenneth Mead before
    the House Subcommittee on Aviation, OIG Report Number AV-1998-015,
    December 8, 1997
        Airport Certification Program, OIG Report Number AV-1998-025,
    November 21, 1997
        Management Advisory Report on the Oversight of Private Sector Oil
    Spill Response Capabilities, OIG Report Number MA-1998-006, October 15,
    1997
        Results Act: Observations on the Department of Transportation's
    Draft Strategic Plan, GAO Report Number GAO/RCED-97-97-208R, July 30,
    1997

                          STATEMENT OF PETER J. BASSO

        Senator Shelby. Mr. Basso.
        Mr. Basso. Thank you, Mr. Chairman. If I might just take a
    minute of personal privilege myself, Mr. Chairman and Senator
    Lautenberg. I have been with the Department for over 30 years.
    It is the first opportunity that I have had to appear before
    this committee, having been confirmed by the U.S. Senate. I
    want to take a moment to thank you, Mr. Chairman, and you,
    Senator Lautenberg, for both your guidance and your support
    through that process.
        Senator Shelby. You folks know he is going to be here 2
    more years anyway.
        Mr. Basso. Yes.
        Senator Lautenberg. I am going to be hanging on by my--
    [Laughter.]
        Mr. Basso. In that regard, Senator Lautenberg, we have had
    a chance to work together for many years. You have always given
    us tremendous support and advice. On behalf of the Secretary
    and myself, I would like to acknowledge that support here.
        Mr. Chairman, members of the subcommittee, it is a pleasure
    to be here this morning and to address issues that really are
    top priorities of the Department. We face a variety of
    challenges, but we are focusing strategically and smartly on
    those issues.
        As a Nation, we face growing travel demand, demographic
    changes that seriously challenge the transportation system.
    Highway miles that are traveled will grow 25 percent by the
    year 2010. Commercial aircraft operations will likewise grow 25
    percent. Populations most at risk on our highways will grow. As
    our economy grows, demand for freight transportation will
    continue to rise.
        As Secretary Slater has often said, transportation safety
    is and should be the Department's top priority. Last year there
    were nearly 42,000 Americans killed and 3.4 million were
    injured on our roads. As highway crashes remain the leading
    cause of death for people ages 6 to 27, we must do better at
    the Department. We know that seat belts and child safety seats
    work. Today the seat belts save over 10,000 lives annually, but
    again we must do better.
        Annually 5,000 people die in crashes involving heavy
    trucks, and Senator Lautenberg, I want you to know on the bus
    issue, we are particularly mindful of those issues and are
    taking specific steps to try to address those more effectively.
    In that regard, 5,000 deaths a year is totally unacceptable. We
    have to take steps. We have to break through that ceiling and
    make changes.
        As the Inspector General noted, there were no fatal crashes
    of U.S. scheduled airlines last year, and that is significant.
    But we again need to do better and make the processes better
    that will ensure that our skies are safer and that continues to
    be the watchword in the future.
        Grade crossing and rail trespasser accidents present tough
    problems, but DOT will continue its successful partnerships and
    advance public awareness on those efforts.
        In hazardous materials one of the things that I think we
    are doing that is very effective is, having joined with the
    Inspector General and various staffs of the Department, we are
    conducting a very rigorous program evaluation of our hazardous
    materials programs throughout the Department and, hopefully,
    using the GPRA process, will make progress in those areas as
    well.
        On the question of investment, investment in transportation
    infrastructure is critical to the Nation's economic prosperity
    and quality of life. At DOT, we have taken a number of steps to
    control the management of the larger dollar projects. We know
    there are many challenges in the long term that need to be met.
        Financing of our aviation system needs is a critical
    priority. We want to work with the Congress to establish cost-
    based user fees for air traffic control operations, and we are
    committed to implementing an effective cost accounting system
    that can be relied on and that allows our financial statements
    to be creditable in that regard.
        Financing for Amtrak has certainly been mentioned here. It
    is a significant priority. Amtrak needs to increase its revenue
    and reduce its operating costs, and we are here to try to help
    them do that as best we can.
        We have learned several lessons along the way toward
    modernizing our assets as well. FAA has put in place several
    new tools to better manage its acquisitions and the Coast Guard
    analyzed its options for modernizing its deepwater assets. We
    have taken into account the GAO recommendations and are
    implementing them vigorously.
        On the Y2K issue, one of the things I would note is the
    Department received a failing grade just the other day on this
    issue. I am here to tell you this morning that I feel, Mr.
    Chairman, we will make, by the end of March, the significant
    breakthrough progress we need to demonstrate that we will get
    to where we need to get on time and in proper order. Senator
    Stevens, I am mindful of a particular issue that affects Alaska
    in that regard, and the Coast Guard is working diligently to
    address that issue. I want you to know that.
        On our corporate management strategies, to help meet the
    challenges, DOT is taking performance planning very seriously.
    We have over 60 ambitious performance goals which deal with
    outcomes, not output. We are tracking progress toward our plan
    in fiscal year 1999 and will be using program evaluations to
    assess DOT's contribution to the outcomes that we intend to
    achieve. We are putting customers first. We are cutting red
    tape, empowering employees, using the principles the Vice
    President laid out in the National Performance Review, and we
    can point to the FAA personnel and procurement reforms as
    starting to make progress and demonstrate results.
        Finally, as the CFO of the Department, I am committed to
    delivering for fiscal year 1999 unqualified financial
    statements. I feel it is a personal responsibility, and we are
    working collaboratively and effectively with the Inspector
    General and with the Federal Aviation Administration and the
    Coast Guard to ensure that that happens.
        We are bringing together intermodal energy and expertise to
    bear on transportation problems that will create efficiencies
    and leverage the diversity of the talents we have in the
    Department.
        In closing, Mr. Chairman, I think we have made significant
    progress in making management a top priority. We are advancing
    transportation safety. We are addressing the Y2K problem,
    focusing our attention on acquisitions and investment. We are
    developing sound financial proposals for our programs, and we
    will develop creditable accounting systems. These remain
    challenges, but we are approaching them aggressively as one
    Department of Transportation and we look forward to working
    with the Congress.

                               prepared statement

        Thank you, Mr. Chairman. I would be happy to answer your
    questions.
        Senator Shelby. Thank you, Mr. Secretary.
        [The statement follows:]

                      Prepared Statement of Peter J. Basso

        Mr. Chairman, Members of the Subcommittee. Thank you for the
    opportunity to testify on management issues, challenges and
    accomplishments of the Department of Transportation.
                                    overview
        In the 21st century, Americans will compete in a global
    marketplace. This marketplace will be fiercely competitive, and our
    success as a Nation will be determined in part on how safely, reliably
    and cost-effectively we can move people, goods and information.
    Americans demand mobility and we have an obligation to provide a
    transportation system that meets both our economic and mobility
    requirements in the next century in a safe and environmentally friendly
    way.
        As we look to the future, it is clear that our nation's
    transportation system faces a number of challenges.
        We face rapidly-growing travel demand. One measure of this demand
    is that the Federal Aviation Administration forecasts that over the
    next ten years the number of commercial aircraft operations will grow
    by 25 percent. Virtually every segment and activity in aviation will
    grow correspondingly, placing similar demands on FAA's safety and
    operational programs. Another measure is vehicle miles of travel, also
    projected to grow by another 25 percent--to 3 trillion--over the same
    ten year period. And similarly, the overall demand for freight
    transportation is rising due to the continued expansion of the economy
    and higher consumer incomes.
        We face challenges in improving transportation safety. The so-
    called easy safety improvements, such as roadway and vehicle design,
    have been largely made and we now face the tougher issues of changing
    behavior (by getting people to buckle-up, and reducing drunk driving)
    and of dealing with the transportation safety needs of an aging
    population.
        The populations most likely to be affected by highway-related
    fatalities and injuries are growing. The number of new drivers is
    expected to grow 19 percent by the year 2020 and the number of older
    drivers is expected to grow 56 percent by the year 2020.
        Despite the substantial progress we have made, we see increasing
    needs for efficiency and environmental preservation. For example,
    larger numbers of businesses seek to make our national transportation
    infrastructure part of their assembly lines with ``just in time''
    inventory techniques.
        Our nation's population continues to grow. The Bureau of the Census
    estimates that by 2020, just a little over 20 years away, 53 million
    more Americans--and the goods needed to support them--will be competing
    for space on our transportation systems.
                                   management
        The Clinton Administration has made management of the Federal
    Government a top priority. In creating the National Partnership for
    Reinventing Government (NPR) the Administration committed itself to a
    new contract with the American people, a guarantee of effective,
    efficient and responsive government. We in DOT strive to be excellent
    managers of DOT's resources, ensuring that we deliver programs that
    customers want with maximum efficiency, and that we manage for
    results--the mandate of the Government Performance and Results Act
    (GPRA). To determine how to best deliver programs we emphasize customer
    involvement, set goals, and measure progress against these goals to
    determine if we are effective and efficient. The Department has been
    aggressively implementing GPRA since 1994. Our plans identify outcomes
    we seek to effect and describe how we use our resources to achieve
    those outcomes. Largely as a result of this focus, both the
    Department's strategic and performance plans received high marks from
    those who reviewed them.
        The Department has also aggressively implemented the
    recommendations of the NPR. As part of this Administration's emphasis
    on good management, the NPR recommendations focused on putting
    customers first, cutting red tape and empowering employees. As an
    example of the Department's NPR successes the FAA, using special
    authorities granted by the Congress, has cut hiring times for all
    positions, and reduced the number of job descriptions by more than
    half. And since 1996 the FAA's new Acquisition Management System has
    cut in half the time it takes to award major contracts without
    sacrificing the integrity of the acquisition process.
        Another example is our reinvention of procurement. Among all
    government agencies, DOT is a leading user of credit cards for small
    purchases. In addition, the Information Technology Omnibus Procurement
    (ITOP) program is delivering a wide range of information technology
    services in record time and providing highly qualified, proven support
    to DOT and other federal agencies. ITOP has streamlined the procurement
    process by allowing the use of oral proposals, limiting source
    selection criteria, and reducing the amount of paperwork for technical
    proposals. ITOP is also creating a data base of references to assist
    customers in evaluating contractors' past performance when making a
    decision on future contracts. ITOP has proven its success. Initially
    granted authority by GSA for up to $1.13 billion over seven years, the
    program has been so successful that it has used up this level in less
    than three years. ITOP-II was recently provided with authority for $10
    billion over seven years, and DOT made all of the awards to contractors
    in late January. Similar contracts for other services are being modeled
    on this successful effort.
        The Department has also cut red tape in administering the employee
    transit benefit program, by signing service agreements with other
    Federal agencies to administer their programs and distribute benefits
    to their employees. Just last month, the Department announced the
    receipt of an award to manage the program for the House of
    Representatives--possibly a first in providing such services across
    branches of the government.
        We have one transportation system, and to make it work better
    requires a ONE DOT approach. The Department is improving its internal
    management to bring intermodal energy and expertise to bear on all
    transportation problems. We've made ``working better together''
    explicit both through our ONE DOT efforts and through the Secretary's
    Management Council. Our ONE DOT corporate management strategy is of
    special note. This strategy encourages collaboration across modes and
    agencies at all levels. It promotes efficiency and creativity, and
    instills in our employees the sense that they represent not just their
    operating administration but the whole Department and the nation's
    transportation system. This innovative team thinking has led to
    intermodal improvements at the nation's largest airports and has
    brought Delta Airlines into our ``Buckle Up America'' seat belt
    initiative. Closer to home, ONE DOT is bringing a full court press of
    the Department's resources to the National Capital Region Congestion
    and Mobility Task Force.
        The Department's corporate management strategies are integral to
    achieving its performance goals. By focusing on working together as ONE
    DOT, ensuring that our workforce is diverse and highly skilled,
    ensuring that our goals and efforts are focused on our customers'
    concerns, advancing critical research and technology, investing in
    information technology, and fostering innovative and sound business
    practices, we ensure a focus not just on short term results but on the
    long term.
        As we look to the challenges of the 21st Century we must focus our
    attention on what the Department can and should provide and how we can
    do that in the most efficient and effective way. We have developed a
    common sense approach to all that we do, which has six elements:
      --We have developed a customer focus to provide the users of the
            system with services and outcomes which they need and want.
      --We have used performance based goal setting to identify what we
            must accomplish and we have identified important management
            strategies to accomplish the work.
      --We have invested in our workforce to make sure we have highly
            skilled and diverse employees capable of meeting the new
            challenges of the global society and information age.
      --We have developed strong alliances and partnerships with other
            government agencies, the transportation related industries and
            the users of the system.
      --We have streamlined our internal organizational structures to
            ensure that the resources we have are meeting the needs of the
            American public.
      --We have streamlined our processes to make them work better and we
            have harnessed new technologies to better serve us in our work.
        My testimony today will address our progress on the management
    challenges identified both internally and externally:
      --the need to improve transportation safety;
      --the need to resolve year 2000 computer glitches and to ensure
            computer security;
      --the need to modernize both FAA and Coast Guard capital assets;
      --the need to implement our proposed financing option for FAA and
            support the five-year plan for Amtrak self-sufficiency;
      --the need to utilize transportation infrastructure dollars
            efficiently and effectively; and
      --the need to comply with all aspects of the CFO Act and issue a
            credible GPRA performance report in March of 2000.
                             transportation safety
        Transportation safety is, and should be, the Department's number
    one priority. Safe and efficient transportation systems are critical to
    our economic security and our quality of life. Although our
    transportation system is already the safest in the world, much of what
    we do is aimed at making it safer, as travel continues to grow. In
    managing myriad safety programs in conjunction with the states, other
    public authorities, and the private sector, as well as directly through
    enforcement, we must constantly focus on strategies that will ensure
    that these programs are effective. We must leverage our resources to
    focus on outcomes. The fiscal year 2000 budget we have proposed invests
    a record $3.4 billion, eight percent above fiscal year 1999, in
    transportation safety programs. The following describes the efforts we
    are directing toward these programs.
    Highway Safety
        A major focus of the management of our safety effort is reducing
    highway crashes, which account for more than nine out of every ten
    transportation fatalities. Last year nearly 42,000 Americans died and
    over 3.4 million were injured on our roads. Highway crashes are the
    leading cause of death for children, teenagers and young adults. In
    addition to the tragic toll on our families, crashes cost our economy
    an estimated $165 billion annually. Unless we continue to lower the
    fatality rate, the growth in travel created by our expanding economy
    will result in an increase in the number of deaths. To cut the fatality
    rate, we must focus on all three components of the safety equation:
    safer roads, safer vehicles and safer drivers.
        The top priority to improve safety is simple--seat belts and child
    safety seats work! A person is almost twice as likely to die or sustain
    a serious injury in a crash if unbelted. Today, seat belts save about
    10,000 lives annually. We can do better, however, and so on April 16th
    of 1997 the President set a new national goal of achieving an 85
    percent use rate by 2000 and a 90 percent use rate by 2005, and a goal
    of reducing child fatalities in motor vehicle crashes by 15 percent by
    2000 and 25 percent by 2005. To help our state partners reach these
    goals, NHTSA has focused on public information and education, outreach
    to targeted groups to increase the buckle up message, and evaluation,
    training, and development of new buckle up programs. The Department
    will also use the new Safety Incentive grants in the Federal-aid
    highway program to expand the states' seat belt programs. Throughout
    the Department we are making every effort to get the buckle up message
    out--not just from those involved in highway safety, but also those in
    aviation, rail and maritime. We want to make it more common for those
    landing in an airplane to hear a reminder to buckle up when driving
    home from the airport.
        The President has also set a goal of making .08 the national
    standard for maximum blood-alcohol levels while driving. Although
    alcohol-related fatalities have declined over the past ten years,
    impaired driving remains a leading cause of traffic fatalities. This is
    a serious breach of responsibility by those who drink and drive. And we
    intend to sharply reduce their numbers. The fiscal year 2000 budget
    includes a 12 percent increase for NHTSA safety programs, to a total of
    $404 million, including expanded community-based programs to increase
    the use of safety belts and proper use of child safety seats, and
    aggressive programs aimed at drinking and driving.
        Ensuring safe motor carrier transportation is a critical part of
    our overall efforts to improve highway safety. Healthy economic growth
    and logistical innovations like ``just in time'' delivery have spurred
    significant increases in truck travel and have been a boon for the
    trucking industry. But while the motor carrier fatality rate has
    decreased significantly--from 3.7 per 100 million vehicle miles
    traveled in 1989 to 2.8 today--the number of large truck crash
    fatalities has increased from 4,462 in 1992 to 5,355 in 1997, and the
    fatality rate has not decreased significantly since 1995. That's not
    good enough.
        Federal motor carrier safety programs must be more focused and
    strategic, and channel resources to strategies that give us the highest
    payoff in reducing crashes. The fiscal year 2000 budget includes a
    total of $160 million, five percent above fiscal year 1999, for motor
    carrier safety programs, with special emphasis on creating a
    performance-based motor carrier program. The Inspector General
    recommended that FHWA replace its system for prioritizing carriers with
    a system that defines problem carriers based upon on-the-road
    performance. In response, FHWA implemented what is known as SafeStat
    risk assessment criteria, a more results-oriented, performance-based
    algorithm for the identification of ``high risk'' motor carriers in
    order to get best results from on-site compliance reviews. While the
    system isn't perfect, it is much better. We still need to work to get
    more complete and timely information.
        FHWA is also making progress in nation-wide implementation of its
    Performance and Registration Systems Management (PRISM) program, with
    20 states expected to be PRISM participants by the end of fiscal year
    2000. PRISM uses safety data to identify carriers that are prone to
    accident involvement--thus allowing FHWA and the states to focus on
    unsafe carriers. In addition, FHWA will be increasing its inspection of
    trucks near ports of entry and stepping up the data exchange between
    the U.S. and Mexico to increase the level of safety for trucks entering
    the U.S. from Mexico.
        However, recent events show that we must be ever more vigilant when
    it comes to motor carrier safety. That is why the Department has
    created a ONE DOT motor carrier safety team, comprised of FHWA, NHTSA,
    and OST, to identify ways to improve motor carrier safety, in
    conjunction with an independent review of motor carrier safety led by
    former House Public Works Committee Chairman Norman Mineta. In the
    final analysis, 5,000 deaths per year is an unacceptable number. We
    intend to take all steps necessary to break through this plateau, and
    then continue to reduce the numbers as well as the rate.
    Aviation Safety and Security
        The Department is proud that there were no fatal crashes of any
    U.S. scheduled air carrier last year. While our aviation system is
    safe, better management of the process can make it safer. FAA's Safer
    Skies agenda focuses on the most critical safety problems in commercial
    and general aviation including loss of control, pilot decision making,
    runway incursions, passenger seat belt use, uncontained engine
    failures, and survivability. In order to prevent runway incursions, FAA
    has set goals for heightened situational awareness for both pilots and
    controllers, and is providing training for controllers, developing
    procedural initiatives to prevent incursions, using more sophisticated
    statistical and trend analysis and fully implementing new technologies
    to better identify and prevent such incidents.
        FAA is also targeting safety resources to commercial air carriers
    based on performance information such as operator experience, safety
    trends and company growth. To ensure that safety risks are brought to
    the attention of top FAA management, a new safety management system
    will be implemented within the FAA by the end of the calendar year. FAA
    is also working to resolve data protection issues so that recorded
    flight data can be used to prevent accidents--this is common sense
    government. A total of $1 billion is proposed for aviation safety
    funding in fiscal year 2000, 7 percent above current levels. In
    addition to direct safety funding, there is a critical need to invest
    in modernization of the air traffic control system, to both preserve
    aviation safety as well as support the expected growth in aviation.
        Consistent with the recommendations of the White House Commission
    on Aviation Safety and Security, two years ago the FAA initiated new
    measures to strengthen airport security, including the purchase of a
    significant number of explosive detection devices, upgraded x-ray
    equipment, and the hiring of 300 security personnel. Management of the
    implementation of these strengthened security measures involves
    partnership with industry, stepped up procurement, and close
    cooperation with other government agencies.
        FAA has invited U.S. airports to form security consortia or
    partnerships to improve airport security and ultimately increase
    compliance. Since the White House Commission on Aviation Safety and
    Security report in 1997, over 110 U.S. airports have formed consortia
    on a voluntary basis. In fiscal year 1999, FAA will continue to
    encourage the expansion of consortia at all airports, and we are
    requesting a total of $100 million to purchase additional explosives
    detection devices and other security equipment in fiscal year 2000.
        Through its streamlined procurement system, the FAA ordered 54
    certified explosives detection systems (EDS) in 1997, 15 more systems
    were purchased in fiscal year 1998, and an additional five systems that
    were used in the demonstration phase of the program were overhauled and
    upgraded. Seventy two systems have now been deployed with the two
    remaining systems to be installed by next month. Deployment of
    explosives trace detection devices began with the installation of two
    units in November 1996. Today, 327 trace explosives detection devices
    have been deployed, with another 220 devices to be deployed during
    fiscal year 1999. In addition, the FAA expanded the Explosives
    Detection Canine Team program with the deployment of 154 teams at 39 of
    our largest and busiest airports.
    Rail Safety
        The railroad industry is undergoing an unprecedented period of
    dramatic growth. Since 1990, revenue ton-miles of traffic have risen by
    more than a third, and rail intermodal traffic has increased more than
    40 percent. This means more trains competing for space on increasingly
    congested track. Rail lines operating at or near capacity demand zero
    tolerance for safety hazards. The Federal Railroad Administration (FRA)
    will continue to expand its collaborative efforts with rail operators
    and workers to determine the root causes of systemic railroad safety
    problems. This approach is producing tangible safety improvements--rail
    crashes and fatalities are down by 8 percent and 17 percent
    respectively since 1993. DOT's rail safety programmatic and research
    efforts will address grade crossings, bridge integrity, other human
    factor issues, train control, and new technology.
        Grade crossing and rail trespasser accidents are perhaps the
    hardest rail safety problems to address. Elimination of grade crossings
    is one approach, and DOT will continue its elimination program. Public
    awareness efforts must also continue to be pursued along with analysis
    of both high profile crossings and the use of train horns at crossings;
    FRA will actively work on both of these efforts within the coming year.
        A total of $132 million is proposed for rail safety funding in
    fiscal year 2000, 38 percent above current levels, in order to improve
    rail safety information systems and to support regulatory and
    enforcement efforts.
    Hazardous Materials Safety
        The safe transportation of hazardous materials is critical across
    all modes of transportation. The vast majority of hazardous materials
    transportation incidents are caused by human error. In fiscal year
    2000, we propose total funding of $18.2 million, 13 percent above
    current levels, for the Research and Special Programs Administration's
    (RSPA) hazardous materials safety program. We are planning to add
    additional field and headquarters staff to work directly with industry,
    particularly smaller shippers, to make sure safe practices are
    followed. RSPA is implementing an intensive effort to reach the hazmat
    community through training and customer service, to ensure that all
    hazmat shippers are aware of safety requirements. The Federal Railroad
    Administration (FRA) will continue site-specific inspections and
    address the impact of hazardous materials shipments across five safety
    disciplines (motive, power, and equipment; operating practices; track;
    hazardous materials; and signal and train control). FAA will add new
    positions to address dangerous goods flows through increased
    inspection, targeted outreach/education and more focused inspections
    (``hazstrikes''). FHWA will focus on hazmat incidents involving motor
    carriers and conduct compliance reviews. And Coast Guard's marine
    safety programs will enforce shipping regulations aboard U.S. and
    foreign ships in U.S. ports, and continue management of the National
    Response Center for all reporting of hazardous materials releases.
        DOT's goals for this program are ambitious--to reduce the number of
    serious hazardous materials incidents by more than 11 percent over four
    years. And together with the Office of Inspector General we are
    undertaking a joint program evaluation of the hazardous materials
    safety program in DOT--to determine the effectiveness of the current
    program structure, including the division of responsibilities across
    and within modes, and the allocation of resources dedicated to specific
    functions. Program evaluation is an important adjunct to performance
    measurement. While performance measures can tell us if the intended
    outcomes are occurring, program evaluation uses analytic techniques to
    assess the program contribution to those outcomes, and to help redirect
    the program for greater effectiveness or efficiency.
                       computer reliability and security
        Both the GAO and the IG have recognized the progress the Department
    has made in addressing Year 2000 (Y2K) computer problems and have said
    that DOT needs to remain vigilant in this effort, since the risk of
    system failure remains until all repaired systems are adequately tested
    and implemented. We fully support that position.
        The senior management of the Department is aware of the
    implications if we do not solve the Y2K problem, and is taking
    aggressive action to address it. All DOT operating administrations are
    required to test their computer systems both internally and externally
    to ensure that Y2K problems have been resolved and that interfaces with
    outside organizations work correctly. Testing and implementation have
    been accelerated, and 242 of 307 systems are expected to finish testing
    and implementation by March 31, 1999.
        The FAA has completed the renovation phase for its mission-critical
    systems. By June of this year, the FAA will have completed all
    remediation efforts to ensure that Y2K problems have been resolved and
    that all internal and external interfaces work correctly. All other DOT
    mission-critical systems will be repaired or replaced by September,
    1999 with the exception of one part of a Coast Guard Vessel Traffic
    System in Alaska, which will be completed by October 1999.
        DOT is getting information from surveys conducted by transportation
    industry associations to determine the status of industry Y2K repair
    efforts. DOT operating administrations will test agency contingency
    plans during 1999 to ensure that system and business operations can be
    sustained if there are residual Y2K problems.
        Regarding computer security, Presidential Decision Directives 62
    and 63 require DOT to advance the Nation's vital security interests by
    ensuring that the transportation system is protected and that our
    computer systems are safe from intrusion. The biggest concern is with
    the air traffic control system. The FAA is currently developing a
    comprehensive information systems security program, and in 2000 will
    begin to implement additional security measures to prevent intrusion.
    This program will include an agency-wide security policy which will
    require information systems security measures for all deployed systems
    throughout their life. The President's fiscal year 2000 budget requests
    $20 million for this effort.
                  capital modernization in faa and coast guard
    Air Traffic Control Modernization
        While over the last 15 years FAA has replaced many of the large
    surveillance radars and built new terminal control facilities at four
    large hubs, clearly a good deal of the air traffic control
    modernization occurred later than planned. Most projects were two to
    three years behind schedule and costs exceeded estimates on average by
    20 percent. Several lessons have been learned. The Advanced Automation
    System had the biggest problems with a potential $3 billion cost
    overrun and a four year schedule slip. Action was taken early in this
    Administration to rectify these problems. The AAS program was scaled-
    down and restructured, and a major component of the restructured
    program--the Display System Replacement--was dedicated at Seattle
    recently, the first of 21 enroute centers to put this new hardware and
    software into operational use. So, results have on the whole been
    positive, but we do still experience problems that must be dealt with
    early on. In general, projects that require large software development
    efforts are at risk of cost and schedule increases and we must remain
    vigilant in our project oversight.
        Another key component of the restructured AAS Program is the
    Standard Terminal Automation Replacement System (STARS). The good news
    is that the FAA limited the scope of this procurement to companies that
    were producing terminal automation systems already. This allowed the
    contract to be awarded in six months instead of 12-18 months. However,
    FAA underestimated the depth of human factors issues that controllers
    and maintenance technicians would raise with the existing commercial
    systems that could be used for STARS. It is clear that more effort
    needs to be dedicated to determining human factors problems before
    contracts are awarded, as we are now resolving human factors issues
    that should have been resolved earlier. FAA continues to involve
    employee unions and human factors experts in its efforts to field an
    operationally acceptable and suitable STARS system at Reagan National
    Airport.
        This Subcommittee has requested that FAA determine whether GPS and
    WAAS will be the sole means of aviation navigation in the future. This
    is a complicated issue, but one that deserves an answer. The FAA is
    currently evaluating the vulnerability of GPS and planned augmentations
    in order to answer it. The Applied Physics Laboratory at Johns Hopkins
    University just completed an independent assessment of the
    vulnerability of GPS and planned augmentation in order to help answer
    the questions. Vice President Gore also recently announced an
    Administration decision to put a new safety-of-life GPS signal in a
    protected aviation frequency band. This signal will provide added
    robustness and integrity for future satellite navigation systems.
        A total of $2.3 billion, 11 percent above current levels, is
    proposed for FAA's capital modernization programs in fiscal year 2000.
    You need to be assured that these dollars will be spent wisely. The FAA
    has instituted four new tools to help it better manage its
    acquisitions. One is a much tighter management of cost and schedule
    baselines via a new Acquisition Management System. The second is
    increasing the purchase of commercial off-the-shelf equipment and
    software. The third is the requirement that all new programs receive a
    detailed assessment of human factors issues before final specifications
    are developed. And, lastly, in order to minimize software development
    problems, the FAA is upgrading its internal ability to manage software
    development. However, there is no substitute for active acquisition
    management after contracts are awarded, and we still need to pay more
    attention to this.
    Coast Guard Recapitalization
        The Coast Guard is currently undergoing a multi-faceted analysis in
    order to assess its acquisition options with respect to modernization
    of the assets relied upon to carry out Coast Guard's missions,
    especially those in the deepwater area of responsibility. $44 million
    has been requested in fiscal year 2000 for this analysis. Coast Guard's
    deepwater responsibilities include search and rescue and maritime and
    fisheries law enforcement. In a recent report, GAO found that Coast
    Guard needs to more thoroughly address the project's justification and
    affordability. Coast Guard is in the process of implementing the GAO's
    recommendations and will ensure that updated information regarding the
    condition of current ships, aircraft and other assets is provided to
    the contractor teams analyzing future overall asset requirements. When
    the contractor proposals are submitted, project justification and
    affordability will be front and center to decision-making, and any
    changes from the Coast Guard Roles and Missions analysis will be
    factored in.
                              aviation competition
        The U.S. airlines were deregulated 20 years ago. Particularly in
    the last year, there has been considerable controversy about the state
    of competition among airlines in the United States. The Department has
    been concerned about the uneven benefits of deregulation and the
    contention that some large airlines have competed unfairly with some of
    their smallest competitors. Also, many small and mid-sized communities
    have not benefited as much as larger cities from improved air service.
    As a consequence, the Department has been active in the debate on this
    subject. We have proposed guidelines on how the Department would
    determine unfair competition and exclusionary conduct against small
    carriers. These guidelines have generated over 5,000 comments.
        The Department is cooperating with the Transportation Research
    Board (TRB) of the National Academy of Sciences, which has been
    directed to report to Congress on the state of airline competition and
    what steps might be taken. This report is due by the spring.
        The Department has also included a number of pro-competitive and
    air-service-improving legislative initiatives in its FAA
    reauthorization legislative proposal, submitted to Congress earlier
    this month. Such initiatives include the eventual elimination of
    Federally-controlled slots at three of the four high density airports;
    increased focus of AIP funding on small, non-hub airports; authority
    for airports to increase their passenger facility charges to $5 and a
    requirement that such airports submit competition plans; a new five-
    year program providing grants to communities seeking to attract air
    service; a requirement that code-sharing airlines maintain service to
    EAS communities in the event of a strike or comparable event; and the
    withdrawal of a slot to a carrier that fails to use that slot as
    intended to serve a small community.
                         aviation and amtrak financing
        Just as the Interstate highway system expanded the potential of our
    national economy in this century, so aviation is tying us to an
    expanded global economy as we enter the 21st century. Aviation has not
    only brought Americans closer to each other, it has brought us closer
    to the rest of the world. Our aviation system is vital to our domestic
    economy and to our nation's global economic competitiveness. I can
    assure you that the Department will use the leverage provided by access
    to the vast United States market to urge our aviation partners to adopt
    more open markets--and to ensure expanded access to their markets for
    United States carriers.
        Financing all of our aviation system's needs--airports, airway
    facilities, security, and FAA operations--is a critical priority for
    us. We want to work with Congress to establish cost-based user fees to
    fund our air traffic control operations, including capital
    modernization needs and research. This will ensure a long term funding
    base that will allow the FAA to provide the services our aviation
    system needs.
        We have been proposing for some time to change the financing
    structure for FAA substantially from aviation excise taxes to cost-
    based user fees. In the long run, we believe that is an effective way
    to promote efficiency in both the provision and consumption of FAA
    services and ensure that FAA will continue to receive the resources it
    needs to be able to provide the services that aviation users demand.
        Integral to cost-based user fees is a cost accounting system and
    FAA is making progress towards implementing such a system. Using a
    commercial off-the-shelf software package, a significant implementation
    milestone was reached with the processing of the first data on direct
    and overhead costs associated with air traffic services for enroute and
    oceanic flights. By June 1999, the FAA plans to have processed one
    year's worth of cost data in support of air traffic overflight fees. In
    addition to supporting user fees, the Cost Accounting System will serve
    as a managerial tool to assist FAA in managing its programs more
    effectively. During the fiscal year 2000-2001 timeframe, the FAA will
    implement the system for all lines of business in a phased approach.
        The Department has taken steps on a number of issues to resolve
    airport revenue diversion matters. First, the Department has focused
    efforts on high profile diversion matters in an effort to highlight the
    Department's commitment to enforcing prohibitions against revenue
    diversion. Second, the Department is now finalizing a national airport
    revenue diversion policy, which will be published in 1999, to ensure
    that Congressional mandates are met.
        Amtrak is a key part of the Nation's intercity transportation
    system. A combination of cost savings, revenue generation, and the
    capital support proposed in the President's Budget is essential if
    Amtrak is to achieve eventual operating self-sufficiency. Amtrak has
    made strides recently in increasing ridership and customer
    satisfaction. As a member of the Amtrak Board, the Secretary will work
    to ensure that Amtrak continuously reviews, amends and implements
    programs and practices that improve its revenue situation and reduce
    its operating costs. However, it must be made clear that we see the
    need for continued capital appropriations to Amtrak in the foreseeable
    future.
        A total of $571 million is requested for Amtrak in fiscal year
    2000, consistent with the five year plan agreed to by the
    Administration and Amtrak for Amtrak self-sufficiency. The definition
    of capital is proposed to be broadened, consistent with the definition
    used for transit. This reflects a continuing commitment to the
    financial plans and the long term success of Amtrak and will enable
    Amtrak to invest strategically in capital equipment and infrastructure.
    Such investment is key to improving on-time service, increasing
    revenues, and reducing operating costs.
         efficient utilization of transportation infrastructure funding
        Strategic investment in the nation's transportation infrastructure
    is critical to this nation's economic prosperity and quality of life.
    We must make these investments strategically and smarter, as has been
    recommended by both GAO and the IG. Working with the Congress, over the
    past six years (fiscal years 1994-99) we have increased Federal
    investment in highways, transit systems, and other public use
    infrastructure to an average of $27.9 billion, more than 32 percent
    higher than the average during the previous four years. Total
    infrastructure investment proposed in the fiscal year 2000 budget, $36
    million, is 72 percent greater than the 1990-1993 average. This
    investment has produced results, even with many of these projects still
    under construction. For example, the latest data on the National
    Highway System shows us that the condition of bridges and pavement has
    improved significantly. System performance--as measured by peak hour
    congestion, a problem for all highway users, which had been
    deteriorating--has now stabilized.
        The Department is committed to a long-term infrastructure
    investment program and has taken steps to bring the management of large
    dollar infrastructure projects under control. Overall within the
    Department, we are tracking at a senior management level the status of
    16 of the largest projects. Project status reports, generally limited
    to one page of key information, are updated on a bimonthly basis. The
    Secretary has also required financial plans for all high-cost
    transportation infrastructure projects--those over $1 billion in value.
        Of the 16 projects being tracked regularly, the Central Artery/
    Tunnel project in Boston--at a cost of over $1 billion per mile--is the
    nation's largest and most expensive highway project. This project has
    received substantial attention largely due to concerns over the cost,
    project scheduling, State financing ability and project oversight. The
    Federal Highway Administration has continually adjusted its staffing
    locally to recognize the challenges in oversight of this project and
    currently dedicates about half its local workforce to oversight and
    stewardship of this project. Formal reviews with headquarters are held
    every three months. The Massachusetts Highway Department has updated
    its financial plans to account for TEA-21 funding levels, and the
    Department has accepted it. They have also provided copies to the IG
    and GAO and have received no written comments on the plan thus far.
        The Federal Transit Administration has also taken aggressive steps
    to deal with management and cost concerns of the Los Angeles Red Line
    transit project. FTA required a ``Restructuring Plan'' from the
    Metropolitan Transportation Authority, and the MOS-3 Full Funding Grant
    Agreement was limited to the North Hollywood component. This segment is
    now on budget and estimated to begin passenger service consistent with
    the originally scheduled operating date. FTA continues to monitor the
    project vigorously.
        Strategic investment is helped substantially by leveraging our
    dollars as well. In this regard, the new Transportation Infrastructure
    Finance and Innovation Act (TIFIA) program can support several times
    its funding levels in maximum credit assistance for infrastructure
    projects. These funds will help launch projects sooner by attracting
    private and non-federal public investment.
        In addition to stretching our dollars further, the Department is
    also using technology to expand our transportation system. DOT has made
    substantial progress with Intelligent Transportation Systems (ITS)--
    applying computer technology to improve transportation system safety
    and throughput. DOT's program of ITS research, testing, and technology
    transfer is aimed at simultaneously solving congestion and safety
    problems, eliminating operating inefficiencies in transit and
    commercial vehicles, and reducing the environmental impact of growing
    travel demand. Since 1991, the accomplishments of the ITS Program have
    included a long-term basic research program, tests of numerous
    technology applications, development of a national architecture and
    initiation of an unprecedented standards development program. We have
    already taken the first steps with model deployments of integrated
    travel management systems in 34 of 75 targeted metropolitan areas, and
    commercial vehicle intelligent systems in ten states. We believe ITS
    infrastructure will provide for our surface modes, in many respects,
    what air traffic control has provided for aviation--an ability to
    manage operations--for improved safety, greater efficiency within the
    same infrastructure, less environmental impact, and greater
    predictability for the customer.
             dot's financial accounting and performance measurement
        As CFO of the Department I am committed to DOT receiving an
    unqualified audit opinion on our 1999 financial statements. To do this
    will require the following work that is already underway and due to be
    completed prior to the close of 1999:
      --documentation of historical costs, primarily in FAA and Coast
            Guard, so property and equipment can be correctly valued in the
            accounting records;
      --development of an acceptable actuarial model for estimating the
            future liability of Coast Guard post-retirement military health
            and benefit costs; and
      --linkage of program costs to performance goals in our accounting
            system.
        The Treasury Department must also continue to work with GAO to
    ensure that their management and reporting practices relating to the
    various transportation trust funds meets acceptable audit standards. We
    are taking a sound, comprehensive approach to correct all of these
    deficiencies. This approach requires us to work in a collaborative
    manner with Departmental program offices and accounting offices. The IG
    is also playing an important consultative role in this process.
        We are also continuing to implement improvements to our financial
    management systems through technological advances. For example, we are
    making innovative use of commercial-off-the-shelf software (COTS) to
    implement ``paperless'' travel management systems that tie to our
    accounting system. We have automated accounting reports so that
    managers have current information. We have closed almost 600 imprest
    funds and reduced the amount of cash held outside Treasury by almost $5
    million.
        New systems will also be necessary to sustain the corrective
    actions outlined above. The Department is employing a coherent strategy
    with regard to acquiring and implementing these new systems. For
    example, we will use COTS software that is able to integrate with other
    financial management system applications. These COTS applications will
    comply with federal accounting standards.
        DOT will also work to remain vigilant in implementing the
    performance measurement and reporting required by GPRA. The goals that
    we set for ourselves for both fiscal year 1999 and fiscal year 2000 are
    ones that are focused on measurable outcomes that the American public
    cares about. While we are pushing ourselves in that some of these are
    stretch goals, we think it is important to set high water marks for our
    operations--and focus our efforts to achieve them. The first report on
    our performance is required in March of 2000. To prepare ourselves for
    this report, we at DOT will be internally testing our data and our
    ability to interpret the data statistically this year--one year ahead
    of schedule. We are doing this because it is good management and will
    help us find problems in advance so that we can correct them.
                                   conclusion
        The Department's priorities are addressing the challenges and
    issues raised by the GAO and the IG and our own assessment of the
    Department's management needs. The Department has made good progress in
    making management a top priority. We are taking aggressive action to
    advance transportation safety. We are taking concrete steps to address
    computer reliability and security. We are focusing senior management
    attention on major acquisitions and strategic investment in public use
    infrastructure. We are developing sound proposals for financing our
    programs, and credible accounting systems to achieve an unqualified
    audit opinion on our fiscal year 1999 financial statements.
        We look forward to working with this Committee, the Congress, GAO
    and the Inspector General on these and other issues. The shape of
    transportation in this nation and the quality of life of all Americans
    depends upon our vigilance in this effort.

                                 common threads

        Senator Shelby. Mr. Mead and Mr. Anderson, I will address
    this to you. I noticed that in the reports from the General
    Accounting Office and from the Inspector General's office that
    there is a great deal of redundancy in the subject matter. My
    initial question to you two is whether you note threads or
    general themes of management challenges in your reviews in
    management of the Department and the Department's agencies. Mr.
    Anderson?
        Mr. Anderson. Yes. I think I would be surprised if we came
    up with significantly different issues. That would mean that we
    were not looking at the right things. I think that there are
    some common threads. When GAO issued its reports on all the
    major Federal Departments and agencies in January, we found
    some common threads among those.
        You have to have, first of all, a commitment to a results
    orientation. You have to have the people knowing what the goals
    and objectives are that you want to achieve. I think that that
    very often is a problem that happens. I think this has been a
    problem with regard to the ATC modernization effort.
        I think you have to have the right systems in place to give
    you feedback and data and information on how well you are
    achieving those goals. I believe that this has been a problem
    over the years and is kind of throughout some of the top
    problem areas that both the IG and GAO have identified.
        I also believe that there has to be a strong partnership
    with all the stakeholders that are involved in the
    transportation programs, and I think that this has been an
    issue that has not been always been working like it should. The
    human interface problems that are coming to light now with
    regard to the STARS program and that sort of thing shows a lack
    of coordination with all the right stakeholders.
        Last but not least, I think showing a commitment to a term
    that is becoming much more prevalent these days, human capital,
    making sure that you have got the right people and the people
    are truly part of your assets that you have got to consider,
    having them in place and training them and making sure they
    understand what you expect of them.
        Those are the keys that are throughout all of these things.
    If the Department can focus on those types of things, I think
    it will go a long way to improving things.
        Senator Shelby. Do you have any observation on that, Mr.
    Mead?
        Mr. Mead. No. I think John gave a good, comprehensive
    response to that.
        The only thing I would add that I believe is different in
    the last several years--and Chairman Stevens alluded to it--is
    that number 10, number 9 to a certain extent also, tend to
    establish goals or benchmarks that are supposed to be met so we
    just do not come back year after year and keep reporting the
    same problems. We need to be able to measure some progress.
    There is an end state, so to speak. You recall you did that in
    Amtrak. You set some goals and that is certainly linked to the
    Government Performance and Results Act.
        Those are becoming significant drivers at the agency level,
    and I think John would agree and Mr. Basso would agree with
    that. We are really focused on that: achieving results.

                                     amtrak

        Senator Shelby. In 1998, the Inspector General and the
    General Accounting Office each performed a very thorough
    analysis of Amtrak following two different tracks. The IG was
    actively involved in choosing a contractor to perform the
    independent assessment of Amtrak's finances, as required by the
    Amtrak Reform and Accountability Act, and closely monitored
    that process. The GAO, at the direction of this subcommittee,
    performed an analysis of the financial performance of Amtrak's
    40 routes.
        The results of these efforts, as well as many other
    reviews, indicate that Amtrak's operating losses continue to
    grow and that the railroad is likely to remain heavily
    dependent on Federal assistance well into the future if it
    continues to operate as currently constituted and managed.
        The financial performance of Amtrak's routes varies widely,
    but every route but one loses money, and 14 routes lose more
    than $100 per passenger trip.
        Amtrak's future rides on the railroad's willingness, I
    believe, to make changes that could improve ridership and
    revenues as well as on the success of the high speed rail
    service in the Northeast Corridor.
        To Mr. Anderson first, what kinds of changes would Amtrak
    have to make in order to reduce its annual operating losses in
    your opinion?
        Mr. Anderson. I believe that they have got to generate more
    revenues. They have got to get more income coming in. They have
    got to find a way to get more efficient and deal with some of
    the labor issues that they have.
        When we took a look and issued that report on the variance
    in the profitability of the different routes, one of the ways
    that they can get some help is if some of these local areas
    that rely so much on Amtrak service--and it is vital to a lot
    of the folks in some parts of the country to have Amtrak
    service. I fully agree with that. But some areas the State and
    local governments and others are contributing more to the
    financing of Amtrak. When you look at what happens on those
    routes, their financial performance is not as bad as some of
    the others. So, I think looking and trying to develop some
    dialogue with some of the partners that are involved and see if
    there are ways that you could generate some additional income
    to help bolster things.
        Clearly they have got to continue the capitalization
    effort. That is going to be the lifeblood of Amtrak in the long
    run.
        Senator Shelby. Mr. Mead, the Inspector General's office
    has been closely monitoring the ongoing construction and other
    preparations for implementing high speed rail service in the
    Northeast Corridor and 3-hour trips from New York to Boston.
    Will Amtrak be able to meet its schedule to begin high speed
    rail service by the end of this year in your opinion?
        Mr. Mead. The schedule they have is possible to meet.
        Senator Shelby. Is it realistic?
        Mr. Mead. I would not be surprised to see some slippage. I
    hope it is inconsequential slippage. For example, there is no
    room left. They had originally allowed 2 or 3 months for
    testing after electrification was completed. Now that is
    crunched down to the month of October, and most testing will be
    done in phases as various segments are completed. That is when
    it is supposed to be electrified. In December they want to
    start running the first high-speed train set, and then they
    want to phase in the additional high-speed train sets. That is
    very critical to the revenue path.
        I sure hope they can make it. I think you can do a lot of
    things when you set your mind to it, but there is not any fluff
    left in the schedule, sir.
        Senator Shelby. What are some of the consequences of delay
    or glitches if this happened? In other words, what are the
    possible consequences of the delay? It depends on how long I
    suppose.
        Mr. Mead. Yes, it does because they are phasing this in so
    that if there is a slippage of just several weeks, it will not
    be highly consequential. But since all their revenue
    projections are counting on numerous high-speed train sets
    coming online in the early part of the year, it is important
    that they be ready. High-speed rail, Mr. Chairman, in the
    Northeast Corridor, is the big revenue item that Amtrak is
    counting on.
        Senator Shelby. It has got to be.
        Mr. Mead. Yes. So, they really need to press on this
    schedule.

                            proposed amtrak analysis

        Senator Shelby. Last year's GAO report on the financial
    performance of Amtrak's routes really got some of us to
    thinking. It is clear to me that if we continue doing the same
    thing in the same way, we are bound to get the same results. We
    need to change some factors if we hope to get different
    results.
        It would be helpful to be able to break out how much of the
    losses on each of Amtrak's routes can be attributed to
    uncontrollable factors such as the length of the route and how
    much can be attributed to factors that can be controlled such
    as labor costs or other management issues.
        I would like to propose a pilot project that would give
    Congress, the Amtrak Reform Council, and other interested
    parties a lot of useful information about where the real
    problems lay and what can be done to address these problems.
    Here is my thought.
        Select just one Amtrak route and contract out that route's
    operation to another vendor for a limited amount of time and
    compare the performance to similar routes on Amtrak's current
    system. Any initial reactions? Mr. Mead.
        Mr. Mead. I thought you were going to go to Mr. Anderson on
    that. [Laughter.]
        Senator Shelby. I will do that. Mr. Anderson, go ahead.
        Mr. Anderson. I think that that is something that should be
    explored. I think part of the problem, though, is going to be
    there was just the one route that was profitable, so finding a
    contractor that is going to jump in on any of those other
    routes could be problematic.
        But then you have got to think about and work out some of
    the kinks and the details about how the contractor is going to
    interact with the rest of the route in terms of the Amtrak
    trains that run there and that sort of thing.
        I think it is something that could be explored and I
    believe that the concept, the idea, is a good one. There will
    be some problems, though, that we are going to have to think
    about I believe.
        Mr. Mead. I think it is probably worth exploring.
        Senator Shelby. What do we have to lose by doing that? In
    other words, we would have some evidence of either we cannot
    change it or we could change it, could we not, if it worked?
        Mr. Mead. You could observe it. Amtrak already contracts
    out. They have commuter rail contracts which they operate under
    contract. So, various jurisdictions are already contracting it
    out.
        I suppose Mr. Warrington, the President of Amtrak, might
    consider it.
        Senator Shelby. It is a thought anyway.
        Mr. Mead. Yes. I do not know how you would deal with the
    labor issues.
        Senator Shelby. I do not either. We will let Senator
    Lautenberg advise us.
        Mr. Mead. He can answer the question, yes. [Laughter.]
        Senator Shelby. Thank you.
        Do you have a comment?
        Mr. Basso. I think the Inspector General summed it up very
    well, Mr. Chairman. We should talk with Mr. Warrington. I do
    not know how we deal with the labor issues either, frankly.
        Senator Shelby. Senator Lautenberg.
        Senator Lautenberg. There is a question of how you deal
    with the choo-choo issues. If the equipment is acquired via
    conventional methods, that means if there is a significant
    amount of Government subsidy in there, and are we simply saying
    that the only change we make is the labor and the management of
    the particular thing?
        I am hopeful, and perhaps excessively optimistic, that high
    speed rail is in place before I leave Washington. It is
    inconvenient as the devil the way it runs. Oh, I am sorry.
        Senator Shelby. We want it to be.
        Senator Lautenberg. But I think it could make a dramatic
    difference.
        Travel between the New York region, New York/Newark, and
    Washington, about three flights an hour each way. You are
    talking about a lot of flights every day. None of them are on
    time or rarely are they on time. It is a highly passenger
    unfriendly kind of service because getting to the airport,
    learning that your flight may be late, very few options at a
    given time.
        I found out that the distance between the two shuttles to
    New York at Washington National is over 3,000 feet. I know
    because I carried my luggage back and forth twice. So, 3,000
    feet. So, you make two trips, you got over a mile. I made three
    trips, each one saying, well, they were not operating but they
    thought the other guy was until we got down there.
        But in any event, I agree totally with the chairman about
    the need to monitor what is happening there, not to just throw
    money at them. I do not believe you do that with any program.
    And you have to have oversight. You have to know where the
    dollars are going.
        But the essentiality of Amtrak's operation is one that we
    have to look at very carefully. Our skies are so crowded now
    wherever you go. There is not room for a lot more traffic, and
    Amtrak plays a part. Now, even in a less populated State, let
    us say, like Utah, I think Amtrak carries--I do not know
    whether anybody here knows precisely. Is there anybody from
    Amtrak that would know that here? I think it carries over
    50,000 passengers a year.
        What is the total Amtrak passenger load a year? Do we know
    how many passengers a year Amtrak carries? Huge numbers, but
    that is not our only concern today.

                                   bus safety

        So, I want to just ask about this. The Motor Carriers
    Office has highlighted that they do compliance reviews
    principally on bus operators where regular roadside inspections
    indicate they are likely to be unsafe. But OMC has conducted
    compliance reviews, as I mentioned in my earlier comments, on
    less than one-quarter of all the bus operators currently in
    operation.
        Can we have confidence, do you think, in the fact that the
    other three-quarters of the operators do not have an inspection
    regularly and can we believe they are operating safely?
        Mr. Mead. No. I think you should have a substantially
    beefed-up coverage of compliance reviews. Your numbers are
    right. There are 13,700 interstate bus companies. 25 percent
    have a rating. The good news is that only 1 percent of the
    rated companies had unsatisfactory ratings.
        In the truck area, it is the same story, except a
    substantially greater percentage--7 percent-- have
    unsatisfactory ratings and they stay unsatisfactory, sometimes,
    for years and they stay on the road. So, you are correct.
        And, sir, the number of compliance reviews that the Office
    of Motor Carriers has been doing has been declining over the
    last several years.
        Senator Lautenberg. It declined by more than half in the
    last 5 years. That trend appears to be the same whether we are
    talking about buses or trucking companies.
        Mr. Basso, does OMC give special consideration to the
    dangers posed by bus carriers, do you know, when dividing their
    available resources?
        Mr. Basso. I could tell you, Mr. Chairman, as the Inspector
    General mentioned, compliance reviews have generally gone down.
    We have not given, so to speak, special attention or extra
    attention up until the point that these crashes occurred. But
    we certainly are now and intend to, particularly not only
    directly with our own resources but the motor carrier
    assistance program officers in the States where we have stepped
    up our efforts and we are training over 500 State inspectors
    annually, particularly in the bus area. We need to really focus
    on this.
        It is quite clear in the overall numbers--and overall
    numbers do not tell everything--the number of deaths in bus
    crashes, 1993 to 1997, were relatively low. But the recent
    experience certainly suggests we need to step up our efforts in
    this area and we are doing that.
        Senator Lautenberg. The one thing we know is that all modes
    of transportation are increasing their volume of carriage,
    whether it is passengers or freight, and supervision has to
    expand as well, as well as the resources. It is not easy.
        The bus company that I talked about, this Bruin, had a
    compliance review in 1996, found to be unsafe, cleaned up their
    act long enough to allow continuing operation, and then 2 years
    later after the accident killed eight passengers, many of the
    same problems were found, again the same as those that occurred
    in 1996.
        What do any of you propose in order to ensure that once a
    carrier takes the necessary safety steps that there is adequate
    oversight to ensure that they continue to operate safely? What
    kind of suggestions?
        Mr. Basso. Senator Lautenberg, I would say this. One of the
    things that TEA-21 gave us that was mentioned earlier are
    sharper and more effective enforcement tools. If we find
    problems like that, I think it is incumbent on us to quickly go
    back and inspect and ensure that corrections that have been
    made continue in the future, and if necessary, if they are not
    continuing to use those enforcement tools as appropriate, to
    shut down carriers until such time as we can assure that
    safety. I think those are the things we need to do.
        Put in summary, we need to enforce the rules that we have
    effectively, and we need to zero in on companies who really do
    not show proper response to making those corrections.

                                oversight input

        Senator Stevens. Will you yield just 1 minute there? I am
    going to have to go.
        But Mr. Mead, Mr. Anderson, one of the things that
    impresses me about the Inspector General and GAO role is that
    we seldom get comments from you as to laws that are either
    imprecise or inadequate or as to limitations that we put in
    appropriations that render a particular role of an agency
    ineffective. I would encourage you to give us your advice on
    those things.
        This committee has the ability to make minor changes and
    fine tune laws in the appropriations process and can leap to, I
    think, remove some of the uncertainties in terms of the laws as
    they have been interpreted from time to time by an agency.
        I would like to see our oversight role become more give and
    take and, as the chairman said, more of a dialogue so that we
    can improve the efficiency of these agencies and not have an
    us-and-them type of relationship. Your two agencies, in
    particular, I think could give us a lot of guidance on our
    individual subcommittees, and I just throw that out for what it
    is worth.
        We do hear from the agencies themselves. We get reports.
        I was a former Solicitor of the Interior Department, and in
    those days we volunteered a lot of comments about the laws and
    their adequacy and their limitations and how they might affect
    us achieving what we conceived to be the goals that were
    established by law.
        So, I just throw that in. I think these oversight hearings
    are going to become more frequent, and I would encourage you to
    give us your advice on what we have done in the past, as well
    as your comments about what the agencies are doing pursuant to
    those laws.
        Thank you very much. Thank you, Senator.
        Senator Lautenberg. My pleasure.

                         rail as an airline alternative

        I want to get back to something I discussed a moment
    earlier, and that is the delays at the airports. If you look at
    the top 10 largest delay airports in the United States, 5 of
    them are in the Northeast Corridor. You have got Logan Airport
    in Boston, Newark, LaGuardia, Kennedy, and Philadelphia
    International. I think it is obvious the main reason that they
    are delayed is the fact that they serve the most congested area
    in the country.
        What do you think the impact might be on these already
    delayed airports if we lost Amtrak's Northeast corridor
    service? We carry 11 million a year. 11 million people a year.
    What would happen? Is there room enough in the skies to throw
    up more airplanes if we could get them off the ground?
        Mr. Anderson. Senator, I believe that it would exacerbate
    the problems that you are already talking about. Clearly with
    the regard to the Northeast Corridor especially, there is a lot
    of people that rely on Amtrak, and it would just exacerbate
    either the air problems or the problems on the highways and
    that sort of thing. I know myself the experience that I have
    had is that there is nothing worse on counting on a flight and
    then it being delayed some period of time. Sometimes the
    additional speed that you think you are going to have in
    getting there by flying, as opposed to taking the train, is
    more than wiped out by the delays and that sort of thing. So, I
    think it would be a negative impact.
        Mr. Mead. I agree with you.
        I think a corollary to that, though, is that Amtrak must
    make sure that it actually meets the speed objectives that it
    set forth for both the Washington-New York corridor and the New
    York-Boston corridor. There is no doubt in my mind that when
    you go approximately 4 hours, 45 minutes and go to 3 hours with
    high-speed rail, that is going to make a big difference and
    there will be diversion from the air markets.

                         dot and the year-2000 problem

        Senator Lautenberg. Well, I hope that we get better balance
    because right now the air market is really saturated.
        I want to ask one last thing. Mr. Basso, you present a
    pretty optimistic picture of DOT's ability to deal with the Y2K
    problem. I am concerned, however, that in your most recent
    quarterly report to OMB, you reveal that a number of critical
    systems in FAA and Coast Guard will not be completed by OMB's
    deadline, March 31. Moreover, you point out that most of the
    DOT offices still have a great deal of work to do in planning.
        You did say something about it before, but I want to just
    refocus on the Y2K problems and see, among the three of you,
    what level of confidence we might have. I know that it was said
    that it looks like we are approaching kind of a breakthrough
    period.
        Mr. Mead. First of all, you have to look at the Y2K
    problem. There are three elements to it: the Department's own
    systems, FAA's, the Coast Guard's; and second, the industry;
    and third, the foreign systems. Your question is directed more
    toward the DOT systems.
        The situation in FAA is that all systems have been fixed in
    the laboratory essentially. The problem is that FAA has a lot
    of different facilities around the country, and now they have
    to take what has been tested and has worked in a laboratory,
    often Atlantic City, and field it. The next 3 months will be
    critical.
        Here is where we stand today. 23 percent of the systems
    requiring the Y2K fix have been fielded. They are ready to go.
    The rest have to be done, and they will not all be done by the
    end of the March, the OMB deadline. You are right there. But
    they are shooting for the end of June.
        Mr. Basso. I might add a comment to that, Senator
    Lautenberg. I think I agree with that assessment completely.
        My optimism is borne primarily by the fact that I know
    during the next 30 to 60 day period, many of these systems will
    have been tested in the laboratory, be getting out to where we
    can tell that they will be effectively on line. And we do have
    strong confidence that they will be in place by June, which
    gives us certainly adequate time, particularly where the
    aviation systems are concerned. Coast Guard still has some work
    to do, but I have substantial confidence in our ability to meet
    the time frames and to have these things compliant.
        I would add one thing. Externally I think one of the things
    that we are mindful of is matters within the control of the
    U.S. There are clearly foreign issues in aviation, foreign
    airports, foreign computer systems, where we are turning a
    substantial amount of our vigilance and trying to assess where
    they are going to be. That is going to be a very, very
    important part of the international issues.
        Mr. Anderson. I would just like to add to it too. I think
    that FAA, in particular, has made some progress. This most
    recent progress report shows some significant progress. Clearly
    there is a lot to be done, and the proof of the pudding is
    going to be what happens in the next 60 to 90 days.
        But there is another point I want to amplify on just a
    little bit. GAO issued a report in January I believe looking at
    are the U.S. airports going to be ready for Y2K. There is a
    significant number. We did a survey of all the major airports
    around the country, and I believe about 330 of them replied to
    our survey. Now, take into account that this was back in
    September but over a third of those airports indicated that
    they would not be ready by June 30, which is FAA's date, and
    they did not have any contingency plans.
        So, it is not just the foreign countries and it is not just
    the Department itself or the agencies, but we have to make sure
    all these stakeholders are doing their part. That is something
    that I think there is a challenge for FAA there to make sure
    that they are bringing in the other stakeholders, the airports
    and the airlines and talking and making sure that they are
    going to be ready too, because if a major hub airport has some
    sort of big computer glitch, that is going to cause a problem
    all the way down the line.
        Senator Lautenberg. I assume that if the employees working
    on this know that they will be unchained from their desks when
    it comes to completion, they will kind of rush it along a
    little bit. [Laughter.]
        Mr. Basso. We have the keys, Senator. We will let them
    loose. [Laughter.]

                         year-2000 and faa: worst-case

        Senator Lautenberg. I wonder if in very brief summary
    either one of you or has much time as the chairman will allow--
    the question of Y2K is a rather arcane thing. For the average
    layman, it is an incomprehensible thing. What is the
    difference? What is the consequence in, let us say, the
    bleakest situation, taking FAA, if we do not meet the deadline?
        Mr. Mead. Well, if you did not meet the deadline, you have
    to have some type of contingency plan, and I think the
    contingency plan would be you would not let planes in the air
    and things would slow down very dramatically. FAA's contingency
    plans just will not let them into the air, and you will have
    major efficiency problems. That is why FAA says there is not a
    safety issue, it is an efficiency one.
        Senator Lautenberg. Keep those keys handy, Mr. Basso.
        Thanks very much for your kind compliments too.
        Senator Shelby. Thank you, Senator.

                       air traffic control modernization

        I also note that both the IG and the GAO reports on
    management challenges highlight the difficulty the FAA and the
    Department have had in managing the FAA's multi-billion dollar
    air traffic control modernization effort. Unfortunately, cost
    overruns, schedule slippages, performance shortfalls, and
    program cancellations are not uncommon in the modernization
    effort and some would say are more the rule than the exception.
        I would like to look at this area in steps. To all of you,
    first, my sense that the root problem is that the FAA's
    approach to modernization is to revolutionize the systems we
    have in place rather than to incrementally improve our air
    traffic control modernization system through the orderly
    replacement of computers, monitors, radars, et cetera. Would
    you agree with that simplification of the FAA's approach to
    modernization? Mr. Anderson.
        Mr. Anderson. I believe that in the past that was the
    approach and the failure of their approach clearly.
        Senator Shelby. Have they changed?
        Mr. Anderson. I think they are trying to, but they have got
    a culture issue there that they have got to deal with as well.
    You do not just tell people that we are going to change and
    expect it to change overnight. So, I think it is going to take
    some time to show up.
        Senator Shelby. What are they doing about the culture?
        Mr. Anderson. We issued a report--I believe it was a year
    and a half, 2 years ago--on the culture especially with regard
    to their acquisitions. They have developed a strategic plan
    that is going out and trying to work with the employees, knock
    down some of the barriers, and that sort of thing, but it is
    going to take some time. It is not going to happen overnight.
    You look at the recent problems that have been reported with
    regard to STARS and WAAS, problems are still there. You just
    have to keep working at it.
        Senator Shelby. Mr. Mead.
        Mr. Mead. I think some of the phenomenon that you described
    is still there. Have you heard of the Free Flight? Have you
    heard of that term?
        Senator Shelby. Yes.
        Mr. Mead. This is where they will be able to space planes
    closer together.
        Senator Shelby. Free Flight phase one?
        Mr. Mead. Yes. That is an incremental approach, such as you
    are suggesting.
        The systems that both Mr. Anderson and I refer to, the
    satellite system and the STARS system, were system-wide,
    comprehensive approaches.
        Now, in the STARS system, what happened was they were going
    out to buy commercial, off-the-shelf software, a system that
    was ready to go, and then at the 11th hour, the controllers
    came in and said, no, there are some major problems with STARS.
    What was supposed to be an off-the-shelf software acquisition
    turned into a software development acquisition, and that is why
    there are all these delays. So, I do think there are some of
    the phenomena you described are still there, sir.
        Senator Shelby. Mr. Secretary?
        Mr. Basso. Mr. Chairman, I agree with your assessment. I
    think trying to build a Cadillac with Chevrolet parts did not
    work.
        I would point to the same point the Inspector General made.
    Free Flight phase one offers me a lot of optimism that the
    learning curve is improving, that in fact we are understanding
    you have to put these things together in manageable parts.

                     changing FAA's organizational culture

        And I also agree that the cultural change is particularly
    critical. I have sat in many a meeting and listened to many a
    briefing and learned a few things over the few years that I
    have been up in the Department.
        But I think we have two ingredients that really will drive
    us forward in a very positive way. One is Administrator Garvey,
    who is a hands-on administrator, who understands these problems
    and is dealing with them, and second, the fact that there is a
    recognition that in order for FAA to be able to meet its goals
    and to have any credibility, frankly, coming to this committee
    for budget requests, we have to bring these things in on time
    and on budget. I think that will help to drive us in a positive
    direction.
        Senator Shelby. I believe the administration should be
    commended or the Administrator should be commended for her
    efforts on Free Flight phase one. Do you share that view
    basically?
        Mr. Basso. Yes, sir.
        Mr. Mead. I do too. In fact, I would add--I know it is not
    the Inspector General's job to compliment people necessarily,
    but I do think Administrator Garvey took those Y2K problems by
    the neck. The progress that has been made is due to the
    dedication of the senior leadership of the Secretary, Deputy
    Secretary, and Ms. Garvey.
        Senator Shelby. The FAA is not good at managing large,
    complex procurements. Notable examples of the difficulty they
    have had with major ATC modernization programs include the
    advanced automation program, the microwave landing system
    program, and more recently the STARS and WAAS program.
        Has the FAA learned anything from the difficulties they
    have encountered in managing these problems, or on the other
    hand, are we doomed to watch them repeat past failures with
    each new generation of ATC modernization? Mr. Secretary?
        Mr. Basso. Mr. Chairman, I think we have learned several
    lessons. One I have already mentioned, segmenting things into
    manageable parts; a second, buying commercial products and, in
    doing so, making sure that we understand that we have consulted
    the people in the agency who have to use those commercial
    products that we are getting the right products; and that we
    are tightly managing and holding people accountable for the
    projects they manage. I think that is something that was
    lacking for a long time. And last, ensuring that employees will
    be in a position to use that new equipment effectively.
        Those challenges certainly will always exist as long as we
    deal with complex and cutting edge technology, but it is
    attitude and culture that will make the difference in how
    effective we are. And I think we have turned the corner by
    accepting the fact we have problems that have to be corrected.

                               role of oversight

        Senator Shelby. Mention has been made of the funding
    uncertainties facing the FAA and the Nation's airports in the
    GAO report. My sense is that there is funding uncertainty
    facing the airports because the authorization will expire at
    the end of March. I am hard-pressed to find an instance of a
    shortage of appropriated Federal funds, both trust funds and
    general funds, for the FAA to commit to modernization.
        In light of the less than laudable history of managing
    money wisely in major procurements, I would, for one, argue
    that providing less oversight of the current FAA resources
    would not be a wise step on the part of Congress. Would any of
    you care to comment? Mr. Anderson?
        Mr. Anderson. I would agree. I think that what gets watched
    gets done, and I think that you need to continue the vigilant
    oversight.
        Senator Shelby. Mr. Mead.
        Mr. Mead. Yes. I think I can speak here from both my time
    with the legislative branch at GAO and now with the executive
    branch. I find in both instances the oversight of the
    Appropriations Committee has been commendable and I think has
    been a strong influence the direction some of these
    acquisitions have gone. In fact, remember the AAS program?
        Senator Shelby. Yes.
        Mr. Mead. I think that Congress had a great deal to do with
    the decision to start scrutinizing that program. So, I think it
    is healthy.
        Senator Shelby. Mr. Secretary?
        Mr. Basso. Mr. Chairman, I think we have to acknowledge
    many of the problems have resulted from inadequate management,
    not from inadequate funding. Anytime operational programs
    increase 72 percent--I have been doing budgets a long time.
    Those are unprecedented numbers. We have to implement and take
    steps, such as accountability, assure that we are getting the
    value for what we are spending, and to take the time and effort
    to do things right and well. So, yes, I think that is right.
        Senator Shelby. Thank you.

                          discretionary grant programs

        In June 1998, the Inspector General reported on DOT's
    management of the discretionary grant programs. In that report,
    the IG stated that a little over $1 billion of the total fiscal
    year 1997 Federal transportation funds were awarded at the
    discretion of the Department. Of these funds, the IG found that
    the Federal Highway Administration awarded 59 percent of its
    discretionary grant funds to projects that were not the highest
    priority projects according to the agency's own criteria. The
    FAA granted 15 percent of its discretionary funds to lower
    priority projects.
        Secretary Basso, after the IG report was released, DOT
    agreed to publish its selection criteria for discretionary
    grants and to provide the Appropriations Committee with a
    quarterly list of selected discretionary projects, along with
    an explanation of how the projects were selected. Have these
    been provided to the committee, and if not, why not, and will
    they be?
        Mr. Basso. Yes, sir. Let me answer by saying, first of all,
    we have published our criteria, and we even have some statutory
    criteria that came in TEA-21. I can tell you the report to this
    committee crossed my desk the day before yesterday. I made a
    few minor adjustments to it that it needed, and it should be up
    here very promptly.
        Senator Shelby. Well, I have supported the idea that the
    Secretary needs some money for discretionary purposes.
        Mr. Basso. Yes, sir.
        Senator Shelby. I have no problem with that.
        Mr. Mead, why do you suppose so many of the discretionary
    grants were awarded to projects that were not identified as
    highest priority?
        Mr. Mead. It is hard to say, because there was no record of
    decision. What we did have a record of, sir, was the staff
    recommendations. So, we knew where they were going. You will
    recall that is one reason we recommended that if DOT decides
    not to go along with its criteria, the rationale must be stated
    in writing.
        Senator Shelby. Can you provide me, Mr. Secretary, an
    explanation of why congressional direction is being ignored by
    the Federal Highway Administration, that is, in the Federal
    Lands program?
        Mr. Basso. Yes. I am aware of that concern. We had an
    instance here about a month ago where it came to my personal
    attention the earmarks had not been honored. That has been
    fixed.
        Second, you have my assurance that we will honor all the
    earmarks.
        We are also taking some other proactive steps like making
    sure that the States involved know that they have these
    earmarks. The one thing we do need their cooperation in is to
    at least apply for them. We will help them make sure they get
    those applications in proper order.
        Senator Shelby. Well, we appreciate the cooperation with
    the Secretary and your office in dealing with this.

                             deepwater procurement

        Deepwater procurement. The General Accounting Office's
    Management Challenges report notes that the Coast Guard and the
    Department need to more thoroughly address acquisition planning
    issues. This aggressive and ambitious procurement effort is
    unlike anything the Coast Guard or the Department of
    Transportation have undertaken, and I believe it is critical
    that we get it right the first time.
        To Mr. Anderson and to Secretary Basso, the General
    Accounting Office report notes that the data that was used to
    justify the procurement was withdrawn after the GAO discovered
    that the remaining useful life of the Coast Guard's deepwater
    aircraft and perhaps its ships might be much longer than the
    agency originally estimated. Would that lessen the urgency of
    the deepwater procurement for the Department and for the
    Congress, as we try to live within the budget caps? Would that
    help?
        Mr. Basso. Mr. Chairman, first of all, let me say on the
    GAO recommendations, they were very constructive and we
    concurred in almost all of those and adopted them.
        Senator Shelby. Have they been heeded pretty well?
        Mr. Basso. Yes, sir.
        Now, I will just make one other observation. Part of the
    reason for advancing the deepwater project is procuring new
    systems as opposed to new ships. One of the things that we all
    face is the cost of operations of the Coast Guard rising, and
    we believe that introducing these new systems over the next 10
    to 15 years will allow us to reduce crew size, reduce costs of
    operation, and make real progress.
        Senator Shelby. The initial estimate of the deepwater
    procurement was close to $10 billion over a 20-year period
    above the current capital budget for the Coast Guard. That
    represents more than a doubling of the current acquisition,
    construction, and improvements baseline budget. This strikes me
    as sort of a big bang approach to modernizing the capital
    plant.
        Mr. Secretary, in light of the difficulty the Department
    has had with other major procurements, have any of you given
    any thought to whether there might be a less risky and less
    costly approach to modernizing the Coast Guard's capital plant?
        Mr. Basso. Mr. Chairman, we have taken some considerable
    efforts to try to deal with that. In fact, one of the things I
    had mentioned to you is in the functional design that we put
    out for the first phase of the deepwater project. We are
    requiring contractors to make significant investments, come up
    with designs that really will be about 80 percent complete. So,
    I think we are clearly taking those steps, and the Coast Guard
    is also taking some very sharp measures to carefully evaluate
    those cost estimates and work through them. So, yes, we are
    very mindful of that, sir.

                          infrastructure megaprojects

        Senator Shelby. Dealing with the oversight of
    infrastructure grant funds, TEA-21 dramatically increased the
    guaranteed Federal highway and transit infrastructure funding.
    These larger amounts of Federal dollars create greater
    potential for fraud, embezzlement, and abuse. Therefore, the
    Inspector General's office is increasing its oversight of all
    infrastructure contract and grant funds to protect the
    expenditure of Federal funds, as you should. At the greatest
    risk for management schedule or financing problems are large
    dollar infrastructure projects above $1 billion in total cost,
    which the Inspector General's report refers to as megaprojects.
        To all of you, is the term ``megaproject'' the officially
    accepted term to describe projects with a total cost exceeding
    $1 billion, and is this the right dollar threshold and
    definition to set apart these especially large projects from
    other more manageable construction projects? Is there agreement
    that such large dollar projects require additional management
    and oversight? Mr. Anderson.
        Mr. Anderson. I think in my opinion these large dollar
    projects do require additional oversight.
        Senator Shelby. That is just common sense.
        Mr. Anderson. Exactly, exactly. I believe that whether or
    not $1 billion is the right cutoff point--they are mega in my
    terminology. I know when GAO issued a report on all these
    projects, we coined the phrase I think mega, and I think mega
    might be an appropriate term. But there is a question whether
    or not you want to down one level and maybe say a half a
    billion dollars or something like that.
        Senator Shelby. It is still a lot of money.
        Mr. Anderson. It is a lot of money. That is right.
        What we found when we did our review of a number of these
    megaprojects is that the States cannot come up with very good
    cost estimates at the outset. So, you have got to keep watching
    them because their costs are going to grow significantly from
    the original design estimates that they come up with.
        Mr. Mead. Mr. Chairman, a major problem here--I think Mr.
    Anderson would share this view--is that a lot of the times, the
    work is reactive. There is already some problem that has
    manifested itself, and then the auditors come in and say, well,
    here is why they have a problem.
        The idea here is to develop some baselines on how these
    projects are proceeding before problems develop, so we are able
    to more proactively say, ``There is a risk factor here,''
    before things are totally out of control.
        But, yes, I agree with you. I think we need some
    flexibility on that $1 billion definition.
        Senator Shelby. Okay. Mr. Basso?
        Mr. Basso. Mr. Chairman, I might mention, yes, the $1
    billion definition certainly is a number that gets your
    attention, but we are doing more than that. We have a tracking
    system.
        Senator Shelby. You have to do more, do you not?
        Mr. Basso. Yes, sir. We need that surveillance.
        I want to let you know we actually have a tracking system
    that picks up a number of projects lower than $1 billion but
    are large or projects that we think, as Mr. Mead suggests, we
    should be proactive on the front end. We have 16 of those
    projects that we in the Secretary's office track and report to
    the Deputy Secretary regularly on. And we are looking for
    exactly those kinds of things up front. Are there things we
    should notice and deal with now rather than waiting for an
    endpoint?

                        most-common management problems

        Senator Shelby. Mr. Mead, the Inspector General's office
    has done six audit reports I believe on selective megaprojects
    over the last year. What are some of the common management
    problems you have seen in these projects?
        Mr. Mead. There are two common ones.
        One is the financing plan behind the project. Where are
    they going to get the money to finance the whole project? It
    will not all come from the Federal Government, and sometimes
    there are different constituencies in a jurisdiction that are
    competing for that same dollar bill. We are finding it very
    useful to scrutinize those finance plans.
        The second is the scope of projects, the definition of a
    project. This occurs most commonly in transit projects. The
    city is trying to satisfy a lot of people, and the transit
    project takes on a definition that cannot possibly be met. L.A.
    Metro was an example of that. They finally had to cut back on
    two major lines because the money was not there.
        Those are two lessons learned. There are a few others, but
    those are two important common threads, sir.
        Senator Shelby. To Mr. Anderson and Mr. Mead, what are some
    ways to address these common problems with larger
    infrastructure projects?
        Mr. Anderson. I think there are a couple of options that
    you could use. You could require, I believe as Mr. Mead
    suggested, the project managers to develop baselines at the
    outset and track those baselines and make sure that you are
    still getting what you want on time and within the cost
    estimates. I cannot say enough, I cannot agree more that you
    have got to have solid financial plans to make sure that you
    have got sources of funds. I think in the past it might have
    been sort of the thinking that Uncle Sam will take care of
    this. We have got the highway dollars coming in and we are
    going to be able to make this up. But in years past, we found
    out that there are a lot of competing interests for that $1 or
    whatever it is. So, you have got to have that.
        I think that you could establish certain goals and
    strategies. I think that the Department of Transportation can
    be a good clearing house for good practices that certain States
    and projects are using out there to get out to some other
    States and localities that they could learn from as well.
        Senator Shelby. Do you agree, Mr. Mead?
        Mr. Mead. Yes, sir.
        Mr. Basso. Absolutely, Mr. Chairman.
        Senator Shelby. Does design-build help address the
    problems?
        Mr. Mead. Yes. I should caveat that. The early returns are
    that it definitely does in construction projects.
        Mr. Anderson. Yes, I would agree.
        Senator Shelby. You agree with that.

                                natca agreement

        Last year the administration signed a new agreement with
    the National Air Traffic Controllers Association which was
    initially described as being within the President's budget
    request for 1999. Subsequent reports estimate that the
    additional cost of the new agreement is substantially more than
    the FAA operation resources envisioned in the President's
    fiscal year 1999 request.
        Can any of you shed more light on what the ultimate costs
    of the new agreement are for the current fiscal year and for
    the fiscal year 2000?
        Mr. Basso. I think I can do that, Mr. Chairman. In fiscal
    year 1999, we have estimated the cost to be about $80 million,
    including the reclassification of controllers and the
    differential for the controllers-in-charge. Looking ahead to
    2000, we see that cost as being about $70 million, less about
    $2 million, or a little less than $2 million, in savings from
    reductions in supervisory positions.
        As to your question on the 1999 budget, of course, the
    budget was submitted before we reached this agreement. So, what
    we have done is recognize we have created this cost; we have to
    absorb this cost, make it work within the budget. And we are
    doing that in fiscal year 1999.
        Senator Shelby. Any comments?
        [No response.]

                               nafta and trucking

        Senator Shelby. Mexican trucks entering the U.S. NAFTA
    opened up trade and truck traffic between Mexico and the United
    States. The Inspector General has found that some border States
    do a better job of truck inspection than others, and there is a
    direct correlation between the safety condition of Mexican
    trucks entering U.S. commercial zones and the level of border
    inspection.
        How far can Mexican truck companies currently drive through
    the border into the U.S.?
        Mr. Mead. A lot of people think the NAFTA agreement marked
    the first time the Mexican trucks could enter the United
    States. But actually they have, for some time, been able to
    come across in ``commercial zones,'' 3 to 20 miles. They are
    not supposed to go beyond that, and they are supposed to turn
    around and go home.
        Senator Shelby. Do they?
        Mr. Mead. Well, I have never seen a Mexican truck outside
    that zone. I have heard that sometimes they continue on north.
        Senator Shelby. Mr. Secretary, do you have any comment on
    that?
        Mr. Basso. No. I think on the first point that it clearly
    is that zone, and I do not really have knowledge of them going
    beyond that.
        [Clerk's note.--Subsequent to this hearing, the following
    information was received regarding Mexican trucks driving
    beyond the commercial zone boundaries.]
        [The information follows:]

                          Letter From Kenneth M. Mead

                             U.S. Department of Transportation,
                                         Washington, DC, June 14, 1999.
    Hon. Richard C. Shelby,
    Chairman, Subcommittee on Transportation,
    Committee on Appropriations, Washington, DC.
        Dear Chairman Shelby: At the February 9, 1999 hearing before your
    committee on the Top Ten Management Issues within the Department of
    Transportation, you asked if Mexican trucks drive beyond the commercial
    zone boundaries of the four border states. The answer is ``yes'', even
    though Mexican trucks are not authorized to go beyond the commercial
    zones.
        All interstate motor carriers operating in the United States,
    including Mexican motor carriers operating in the commercial zones, are
    required to obtain a Department of Transportation (DOT) identification
    number and to display this unique identifying number on their
    commercial trucks. We used the identification number to get the
    information needed to answer your question.
        Under the Motor Carrier Safety Assistance Program, state safety
    inspectors perform roadside inspections of commercial trucks and
    drivers throughout the United States to ensure compliance with U. S.
    safety regulations. Therefore, Mexican trucks operating inside or
    outside the commercial zones are subject to roadside inspections.
        The Office of the Inspector General extracted the DOT
    identification numbers for motor carriers identified as domiciled in
    Mexico from the Office of Motor Carriers Management Information System.
    We compared these unique numbers to the fiscal year 1998 roadside
    inspections of commercial vehicles also contained in the Office of
    Motor Carriers Management Information System. The results of our
    comparison indicate that:
      --Roadside inspections were performed beyond the boundaries of the
            commercial zone on 68 motor carriers identified as domiciled in
            Mexico, and were performed more than once for 11 of the 68
            carriers.
      --Roadside inspections were performed on the 68 motor carriers at
            least 100 times in 24 states not on the U.S.-Mexico border,
            which include the States of New York, Florida, Washington,
            Montana, North Dakota, Colorado, Iowa, South Dakota, and
            Wyoming.
      --Roadside inspections were also performed on the 68 motor carriers
            outside the commercial zones but within the four border states
            (Arizona, California, New Mexico and Texas) more than 500
            times.
        This demonstrates that Mexican trucks are operating well beyond the
    designated commercial zones. Enclosed is a copy of our recent report on
    the Department's Motor Carrier Safety Program. It identifies the
    current problems that impact negatively on motor carrier safety
    together with recommendations to address those issues.
        If I can answer any questions, or be of further assistance, please
    feel free to contact me at 366-1959 or my Deputy, Raymond J. DeCarli at
    366-6767.
                Sincerely,
                                               Kenneth M. Mead,
                                                     Inspector General.

        Senator Shelby. I understand that there is currently a
    moratorium on the January 1, 2000 open access provision under
    NAFTA that would allow Mexican trucks to freely drive
    throughout the U.S. What is the likelihood of this moratorium
    being lifted before next January, Mr. Secretary?
        Mr. Basso. All indications are, Mr. Chairman, as Secretary
    Pena did in 1995, until we can assure that that moratorium
    being lifted would ensure safe truck operations, it will not be
    lifted. It is going to last.
        Senator Shelby. Mr. Mead, do you have a comment?
        Mr. Mead. Well, I think we need to come to grips with this.
    We have a national treaty here, and our estimate is you need
    about 125 Federal inspectors down there at the border.
    California is providing its own inspectors. There is, as you
    say, a very strong correlation, just an amazing correlation,
    between conditions of trucks and the level of inspection. The
    truckers coming across, sir, do not like it when they are
    tagged for inspection, they are found to be unqualified from a
    safety standpoint, and they have to go home. It costs them
    money.
        Senator Shelby. Roughly what percentage of truck traffic at
    the U.S.-Mexico border is being inspected by Federal Motor
    Carrier inspectors?
        Mr. Mead. It is infinitesimal. Let me give you one concrete
    figure. At the El Paso crossing, 1,300 trucks come across a
    day. There is one Federal inspector. He can inspect a total of
    14 a day. California, in contrast, at their Otay Mesa crossing,
    is staffed by numerous people and they, over a 3-month period,
    will inspect every truck that comes through there. The out-of-
    service rate earlier--that is when a truck is not qualified
    from a safety standpoint, or its driver is not. At Otay Mesa in
    California, where they are fully staffed, and have a good
    inspection program, the out-of-service rate for Mexican trucks
    is 28 percent. At El Paso it is 50 percent for Mexican trucks.
        Senator Shelby. Mr. Mead, your office also prepared a
    report on motor carrier safety at the U.S.-Mexico border in
    December. Did you find that some of the Mexican carriers were
    driving beyond the commercial zones?
        Mr. Mead. No, sir.

                         Additional committee questions

        Senator Shelby. I have a number of questions that we will
    probably submit for the record for you people.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]

             Questions Submitted to the Inspector General's Office

                     Questions Submitted by Senator Shelby

                          highway-rail crossing safety
        Question. Almost 1,000 people died in 1997 in railroad-highway
    crossing and railroad trespassing accidents in 1997; another 2,000 were
    injured. This subcommittee has traditionally been very supportive of
    the Department of Transportation and Operation Lifesaver's railroad
    crossing safety efforts, and under my Chairmanship, that support has
    been increased. The Office of Inspector General is currently auditing
    the Department's railroad-highway crossing safety action plan. When
    will the audit be complete?
        Answer. We expect to complete it by the end of May 1999.
        Question. Can you generally describe what the federal role is in
    preventing rail crossing accidents, versus the role of state
    transportation departments?
        Answer. The Department of Transportation--through the Federal
    Railroad Administration, Federal Highway Administration, National
    Highway Traffic Safety Administration, and Federal Transit
    Administration--provides national leadership, coordination, and funding
    of states' efforts to prevent rail-crossing accidents. State
    transportation departments work directly with railroads, local
    governments, police, and the public to improve rail-crossing safety.
        Question. The Department's efforts in improving rail crossing
    safety are only part of a larger picture. Outside groups, such as the
    Association of American Railroads and Operation Lifesaver, as well as
    highway safety groups, are also actively involved in similar programs.
    Are these efforts well-coordinated? Should the federal government take
    the lead in these programs, or are other organizations better suited?
        Answer. These efforts are generally well-coordinated under Federal
    leadership. Through its Rail-Highway Crossing Safety Action Plan, the
    Department of Transportation has been involved in specific actions that
    require coordination with such groups as Operation Lifesaver, the
    American Trucking Association, the American Association of Motor
    Vehicle Administrators, and metropolitan planning organizations. The
    federal government needs to continue to play a lead role in safety
    programs because of its nationwide perspective, transportation and
    safety responsibilities, and available resources.
                                     ______

                   Questions Submitted by Senator Lautenberg

            should suspended licenses be permanently disqualifying?
        Question. In the case of bus drivers and truck drivers, should we
    treat a license suspension as a reason to permanently disqualify that
    driver from ever again driving a truck or a bus?
        Answer. It is important to keep in mind that if a driver's
    commercial license is suspended, and the driver is precluded from
    driving, his or her ability to earn an income is directly impacted.
    Accordingly, in our opinion first-time offenders should not necessarily
    have their license permanently disqualified, but we need to send first-
    time and repeat offenders a very clear message. Adjudication--either
    suspension or revocation of commercial driver's license--must mean that
    a driver cannot obtain a permit to drive a commercial vehicle during
    the time his or her commercial license is either revoked or suspended.
    For example, in the case of the recent AMTRAK train and truck crash in
    Illinois--even though the cause of the crash has not yet been
    officially determined or attributed to the driver of the truck--the
    truck driver was using a permit issued to him when his commercial
    license was suspended because he received three speeding tickets within
    in an unacceptable time period. Under these circumstances, the
    suspension had not had meaningful effect.
        Question. Would this solution only result in increased plea-
    bargaining in the local courts to ensure that drivers do not get their
    license suspended?
        Answer. Not if there was a requirement related to commercial
    driver's license that precluded plea-bargaining. The States' variances
    in penalizing DUI and DWI violations are significant. Consistency among
    the States would better ensure that only safe drivers retain the
    privilege of driving. For example, New York State does not pull a
    person's past licensing history when he or she applies for a commercial
    driver's license. If a driver is convicted of DUI while operating a
    commercial motor vehicle, that driver's license is revoked. If the
    driver is DUI in a personal vehicle, he or she loses personal driving
    privileges and maintains commercial driving privileges. In contrast, in
    Pennsylvania a driver may get a commercial driver's license with a past
    conviction if the applicant's current license is in good standing. If
    convicted of DWI while driving a personal vehicle, the entire driver's
    license is suspended. If convicted of DWI while driving a commercial
    vehicle, the commercial license is revoked for one year. For more than
    one DWI offense, the license is permanently revoked.
        Question. Mr. Mead, what solutions would you recommend to ensure
    that drivers with suspended licenses do not take the risk of continuing
    to drive.
        Answer. During our recently completed motor carrier safety audit,
    we did not focus on commercial driver's license requirements,
    procedures or program effectiveness. We intend to do so in a project
    later this year. We will keep you informed of our audit results.
                            office of motor carriers
     why have compliance reviews and fines declined while budget resources
                                have increased?
        Question. If these inspectors are not conducting compliance
    reviews, what are they doing with their time?
        Answer.In response to our December 1998 survey, OMC investigators
    stated that 55 percent of their time was spent conducting compliance
    reviews, enforcements, roadside inspections and crash investigations.
    They stated the remaining 45 percent was spent on duties such as
    administration, outreach to communities, attending meetings or
    seminars, and speaking to associations. Respondents to our survey
    stated that during a typical month they spend their time on the
    following activities:
                                                                     Percent
    Compliance reviews (CRs)..........................................    37
    Enforcement (writing reports and other enforcement activities)....    13
    Roadside inspections..............................................     4
    Crash investigations..............................................     1
                                                                      ______
          Total CRs and enforcement-related activities................    55
                            =================================================================
                            ________________________________________________
    Administrative duties.............................................    14
    Seminars/outreach/speaking to associations/trucking companies.....    12
    Monitoring programs...............................................     6
    Supervision.......................................................     4
    Training (attending/conducting)...................................     4
    Other.............................................................     5
                                                                      ______
          Total other than CRs and enforcement related activities.....    45

        Respondents who supplied more detail about ``other'' activities
    most often listed:
      --Interaction with carriers, the public, and other government agency
            personnel
      --Travel
      --Computer maintenance/problems
      should we use market forces to prompt safe truck and bus operations?
        Question. How dramatic a change do you think needs to be made in
    order for the OMC to take steps to truly change the behavior in the
    motor carrier industry, especially in the bus area?
        Answer. OMC needs to take strong enforcement action against
    carriers violating critical regulations with the greatest effect on
    safety. By that we mean fines approaching the statutory maximum, the
    issuance of compliance orders, and--if necessary--placement out-of-
    service. OMC should also develop a monitoring program to verify that
    carriers rated less-than-satisfactory, or those with previous
    enforcement histories, continue to comply with motor-carrier safety
    regulations. Finally, OMC should limit, and finally remove, interstate
    operating authority from motor carriers that fail to pay civil
    penalties within 90 days after a final order is issued or a settlement
    agreement is completed.
        OMC's history of low fine-assessments and collection amounts has
    not changed the behavior of motor carriers that continually violate
    safety regulations. From fiscal year 1995 to fiscal year 1998, 846
    carriers drew multiple enforcement actions. Of those, 127 carriers had
    3 or more enforcement actions and 117 carriers had repeated violations
    of the same safety regulations. Only 17 carriers were issued out-of-
    service orders. The actual civil penalty amounts settled averaged about
    $2500. In addition, OMC allowed motor carriers with multiple
    enforcement actions to continue to operate without paying fines.
        Repeat violators warranted, but did not receive, stiffer
    enforcement actions. The total fines assessed the 117 carriers with
    multiple violations of the same safety regulation increased, on the
    average, by only $451 per year. From 1995 to 1998 the average penalty
    originally assessed per enforcement case declined from $5,575 to
    $3,517. These fine assessments reflect OMC's continued emphasis on a
    carrier's ability to pay fines and continue operating after repeat
    violations are discovered and prosecuted. OMC settled enforcement cases
    for amounts significantly less than originally assessed. From fiscal
    year 1995 to fiscal year 1998, settlements declined from 67 cents on
    the dollar to 46 cents. Carriers consider these nominal fines a cost of
    doing business.
                  morale problems in office of motor carriers
        Question. What impact has the situation had on the morale of the
    enforcement community within the Office of Motor Carriers?
        Answer. The high response rate to our survey of OMC field personnel
    (73 percent) indicates that they welcomed the opportunity to share
    their thoughts and suggestions. They addressed morale in their
    responses, and offered a variety of reasons for low morale among OMC
    field personnel. One message that came through was that OMC field
    personnel felt OMC management did not support strong enforcement by
    allowing safety investigators to conduct more compliance reviews,
    assess appropriate fines for violations, and collect those fines.
        Of the respondents to our survey, 47 percent rated the OMC
    enforcement program poor-to-fair. When asked to suggest changes to the
    OMC operation, 95 percent said unsafe carriers should be put out-of-
    service, 90 percent said OMC should impose larger fines for repeat
    offenders, and 87 percent said OMC should use more enforcement actions
    against carriers who do not follow the rules.
        Question. What tools does OMC have at its disposal that it is not
    using when it comes to ensuring that bus operators do so in a
    consistently safe manner?
        Answer. OMC's policies and procedures for ensuring the safety of
    commercial vehicles apply to both trucks and motor coaches (over the
    road carriers of more than 15 passengers). OMC conducts compliance
    reviews of the motor carriers to ensure their compliance with safety
    regulations. Enforcement actions include assessing fines, issuing
    compliance orders, and placing carriers out-of-service.
        We found OMC did not include all violations of acute and critical
    regulations in civil-penalty cases and did not assess civil penalties
    at the statutory maximum amount. Acute and critical regulations are
    those with the most direct impact on safety. We analyzed OMC's
    compliance review and enforcement databases to determine the percentage
    of enforcement actions processed in relation to the number of
    violations found in compliance reviews during FYs 1995-1998. We
    analyzed the 29 most frequently violated regulations cited during
    compliance reviews. In 1995, OMC processed enforcement actions on only
    12 percent (2,957 of 24,636) of all violations found during motor-
    carrier compliance reviews. In fiscal year 1998, that proportion
    decreased to 11 percent (2,481 of 22,022) of the violations found.
        OMC uses the Uniform Fine Assessment (UFA) software to assess civil
    penalties for serious violations. The objective of the UFA software is
    to increase the uniformity of civil penalties assessed against motor
    carriers for violations of safety regulations. UFA considers nine
    statutorily mandated factors in determining the amount of a civil
    penalty. While UFA considers these nine factors when assessing civil
    penalties, OMC established minimum fines, which were well below the
    maximum amount established by statute. This minimum fine represents the
    initial amount assessed against a motor carrier for a safety violation.
    The amount of the fine increases depending on the seriousness of the
    violation but rarely to the maximum allowed by statute.
          truck and bus companies falsifying ``hours-of-service'' logs
        Question. What observations can you make regarding the overall
    level of compliance with the hours-of-service rules on the part of
    motor carriers generally and bus operators specifically?
        Answer. The OIG Office of Investigations currently has 35 active
    cases involving alleged ``hours-of-service'' violations. Indictments
    for violations of Federal safety regulations during the past 24 months
    total 44, with 35 convictions and $2.6 million in fines, restitution
    and recoveries. Based on the cases we have conducted to date, we feel
    there is a significant problem with hours-of-service violations. We
    have received no criminal allegations against bus operators as such,
    and none of these investigations involved bus companies.
        The following tables represent the ratings assigned to motor
    carriers and, specifically, to buses:

                                            MOTOR CARRIER COMPLIANCE REVIEWS
    ----------------------------------------------------------------------------------------------------------------
                                                                                      Percentage
                                                          No. of ---------------------------------------------------
                                                         reviews                                               Not
                                                                  Satisfactory  Conditional  Unsatisfactory   rated
    ----------------------------------------------------------------------------------------------------------------
    1998...............................................    6,473          41           28              5          16
    1997...............................................    6,894          28           13             15          54
    ----------------------------------------------------------------------------------------------------------------

                                                 BUS COMPLIANCE REVIEWS
    ----------------------------------------------------------------------------------------------------------------
                                                                                      Percentage
                                                          No. of ---------------------------------------------------
                                                         reviews                                               Not
                                                                  Satisfactory  Conditional  Unsatisfactory   rated
    ----------------------------------------------------------------------------------------------------------------
    1998...............................................      437          61           19              8          12
    1997...............................................      450          49           15              6          30
    ----------------------------------------------------------------------------------------------------------------

                  HOURS-OF-SERVICE VIOLATIONS BY MOTOR CARRIER
    ------------------------------------------------------------------------
                                         1997                1998
          Driver Log Violation          Motor      1997     Motor      1998
                                       Carrier     Bus     Carrier     Bus
    ------------------------------------------------------------------------
    False Logs......................      3,741      153      3,817      124
    Greater than 60 hours in 7 days.      2,767       53      2,747       41
    Failure to record duty status...      2,322      129      2,267      108
    Driving over 10 hours...........      2,634      130      2,609      114
    Failure to keep driver log 6            798       55        885       60
     months.........................
    ------------------------------------------------------------------------

                  Hours-of-service violations by bus companies
    Fiscal year:
        1997..................................  100 bus companies had 187
                                                 drivers placed out-of-
                                                 service during roadside
                                                 inspections.
        1998..................................  266 bus companies had 467
                                                 drivers placed out-of-
                                                 service during roadside
                                                 inspections.

                    is amtrak ``on track'' to close the gap?
        Question. Have you reviewed Amtrak's recent financial progress?
        Answer. Our review of Amtrak's March 1998 Strategic Business Plan
    showed that Amtrak would sustain an additional $823 million in
    operating losses between 1999 and 2003, and that it would have an
    unfunded cash loss of $304 million in 2003, which is $167 million more
    than it forecast. Amtrak management is aware of our concerns and has
    indicated that it has taken actions to increase revenues and cut costs.
    Amtrak has been responsive to the recommendations we made in the
    Independent Assessment.
        To reach operating self-sufficiency by fiscal year 2003, first and
    foremost, Amtrak must provide good timely service to its customers. It
    must also implement a robust high-speed rail service in the Northeast
    Corridor and greatly expand mail and express service, an area that
    offers considerable opportunity for non-passenger revenue. Amtrak must
    also improve ridership and revenue on Intercity and Amtrak West trains,
    and enhance partnerships with State, regional, and local governments.
        Amtrak's 1999 Strategic Business Plan contains new plans to reduce
    costs, the financial impact of which will be important to the success
    of the 1999 Strategic Business Plan. Amtrak management and the Reform
    Board must pursue forcefully the actions contained in the 1999 plan and
    must monitor carefully their implementation. In this year's assessment,
    we will also be monitoring these proposed expense reductions and will
    consider the likelihood of their achievement.
        Question. Are you at all encouraged by what you've seen regarding
    their ability to tap new revenue sources and minimize costs?
        Answer. When we complete the ongoing assessment we will be able to
    tell whether Amtrak meets or exceeds the revenue-projection and cost-
    reduction goals established in the revised Strategic Business Plan. Our
    overall assessment, however, is that with strong leadership, intense
    management, and favorable economic conditions, it will be possible--
    albeit difficult--for Amtrak to become operationally self-sufficient by
    2003. Nevertheless, even if Amtrak reaches operating self-sufficiency,
    it will require substantial and continuing capital funding to support
    the system as it currently exists.
     are there unique problems with omc oversight of bus companies? in new
                                    jersey?
        Question. Can any of you identify particular problems that are
    unique to the bus industry and OMC's efforts to promote bus safety?
        Answer. Unlike trucks, motor buses require specialized equipment
    (ramps) to complete a full mechanical inspection of the braking system,
    brakes out of adjustment is one of the top safety violations that
    places commercial vehicles out of service. States are reluctant to
    perform bus inspections at roadside like trucks because there are no
    facilities for the passengers when the bus is placed out-of-service and
    needs to be repaired prior to returning to the road. Consequently,
    buses are inspected at the carrier's terminal or at the buses'
    destinations. New Jersey has three sets of ramps to complete the full
    mechanical inspection of motor coaches.
        OMC established a National Motor Coach Technical Advisory Group to
    help promote bus safety. Also, OMC policy requires that passenger
    carriers receive a higher priority for compliance reviews than general
    freight motor carriers.
        Question. Could this figure indicate that New Jersey State Police
    are actually more aggressive than their neighbors in ordering unsafe
    buses off the road?
        Answer. Yes. New Jersey bus inspectors may be more effective in
    spotting unsafe buses--because of experience and equipment--than their
    colleagues in neighboring states. New Jersey has an aggressive bus
    safety program with a total of 25 full-time bus inspectors. In fiscal
    year 1997, the State led the nation in bus inspections performing 6,218
    inspections. New Jersey State inspectors also train bus inspectors from
    other states. New Jersey has also located inspection sites in close
    proximity to major tourist sites--such as Atlantic City--to allow for
    most bus inspections to be done after the passengers have left the
    vehicle.
        Question. What observations can you make regarding how the motor
    carrier laws are enforced in each state? Is it your view that these
    laws are enforced uniformly, or is there a wide variation among states?
        Answer. During our audit on the Motor Carrier Safety Program for
    Commercial Trucks at U.S. Borders we observed some differences.
    Enforcement of U.S. safety regulations on all carriers, domestic and
    foreign, operating within the United States is the responsibility of
    the United States. The enforcement programs performed by Federal and
    State inspectors in southern border States have widely disparate
    approaches as evidenced by the number of inspectors, frequency of
    inspections, level of inspections and inspection facilities. Major
    differences also exist in enforcement practices and procedures.
        In California, for cost efficiency, law-enforcement officers and
    civilian State inspectors staff the inspection facilities. The
    remaining border States employ only law-enforcement officers.
    California is also the only southern border State that enforces the
    Federal operating authority regulation (registration). Another example
    of inconsistency is the fines assessed by OMC personnel as a result of
    enforcement against Mexican carriers operating in the commercial zones.
    The two regional offices with jurisdiction over the southern border
    assessed significantly different fines for the same violations.
      how do we ensure that bus operators continue to comply with the law?
        Question. What solutions would any of you propose in order to
    ensure that, once a carrier takes the necessary safety measures, there
    is adequate oversight to ensure that they continue to operate safely?
        Answer. Follow-up reviews must be performed to ensure that carriers
    have safety measures in place. These reviews should, at least, cover
    those serious safety violations found during compliance reviews. The
    follow-up reviews should be performed in progressive intervals, and
    should include verifying that carriers' road performance indicates
    continued compliance with safety regulations. This type of monitoring
    program could be a condition for reducing assessments for first-time
    offenders. Repeat violators must continue to be targeted for reviews
    and placed out of service when warranted.
     why have compliance reviews and fines declined while budget resources
                                have increased?
        Question. What can you tell us as to why compliance reviews have
    declined by half at the OMC?
        Answer. OMC safety investigators have been assigned to do work
    other than conduct compliance reviews and fewer OMC safety
    investigators are conducting these reviews. In response to our December
    1998 survey, OMC field staff responded that 55 percent of their time
    was spent conducting compliance reviews, enforcements, roadside
    inspections and crash investigations, and 45 percent of their time on
    such duties as administration, outreach to communities, attending
    meetings or seminars, and speaking to associations. Further, the number
    of OMC staff conducting compliance reviews has declined 24 percent,
    from 348 in 1991 to 263 in 1998.
        Question. If that is the case, why hasn't there been an increase in
    the amount of violations and fines levied as part of these compliance
    reviews?
        Answer. There has not been an increase in the number of violations
    and fines levied because OMC's policy is to use enforcement as a last
    resort. In fact, when enforcement action is taken, OMC does not use the
    many sanctions available to it such as maximum fines for repeat
    violators, revocation of authority for lack of payment, and shut-down
    orders for unsafe carriers. The survey responses that we received from
    the OMC field personnel showed that over 95 percent said that attention
    needs to be placed on putting unsafe carriers out of service, 90
    percent favored assessing larger fines for repeat offenders, and 87
    percent indicated more enforcement actions were needed to make
    enforcement more effective.
        Furthermore, when enforcement actions are taken, OMC personnel
    negotiate the settlement amounts significantly less than originally
    assessed. In fiscal year 1998, OMC settled for 46 cents on a dollar
    assessed.
        The software package used by OMC to compute fines limits the amount
    assessed. In April 1996 OMC implemented the use of Uniform Fine
    Assessment (UFA) software to assess civil penalties for serious
    violations. UFA's objective is to increase the uniformity of civil
    penalties assessed against carriers for violations of the safety
    regulations. UFA limits the number of instances when fines can be
    assessed. For example, in one case, the safety investigator recorded
    145 violations of 4 safety regulations during a compliance review. The
    UFA software further restricted the case to 7 of the 145 instances when
    the regulations were violated. Therefore, the carrier was only fined
    for the 7 instances. Further, enforcement officials stated they did not
    always enforce every violation found. According to OMC policy, any
    critical violation discovered have to indicate a pattern of
    noncompliance of at least 10 percent of the number of records checked
    in order to be enforceable.
                                     ______

            Questions Submitted to the Department of Transportation

                     Questions Submitted by Senator Shelby

                    dot management of discretionary programs
        Question. On January 13, the Department released a list of
    ``finalists'' for funding under the new TEA-21 program ``Transportation
    and Community and System Preservation'' (TCSP) program, which was
    authorized for $20 million in fiscal year 1999. What are the criteria
    for this program? Is it a competitive selection process?
        Answer. Yes, the selection process for the TCSP program is highly
    competitive. FHWA received more than 520 Letters of Intent (LOIs)
    totaling almost $400 million for TCSP funding in fiscal year 1999.
    These LOIs were reviewed by FHWA, FTA, and EPA field staff for specific
    criteria. The field review was provided to a 20-person technical expert
    panel which included representatives from FHWA, FTA, FRA, OST-Policy,
    RSPA/Volpe, and EPA. The panel identified 49 LOIs that were selected as
    semifinalists and asked to prepare full grant requests for the final
    round of competition. These grant requests were due on March 15, 1999,
    and we will award grants in the very near future.
        All of the selection criteria for TCSP are taken from Section 1221
    of TEA-21. Proposals must meet the purposes of this section. They must
    improve the efficiency of the transportation system; reduce the impacts
    of transportation on the environment; reduce the need for costly future
    public infrastructure investment; ensure efficient access to jobs,
    service and centers of trade; and encourage private sector development
    patterns which achieve these goals.
        In addition, priority is given to proposals that demonstrate a
    commitment of non-Federal resources to the project; include an
    evaluation component; ensure an equitable distribution of funds to a
    diversity of populations and geographic regions; and demonstrate public
    and private involvement including participation of non-traditional
    partners on the project team.
        Question. The fiscal year 2000 budget request proposes to increase
    the TCSP program to $50 million--twice the amount under the TEA-21
    firewall. What was the total amount represented by applications
    received for the $20 million in fiscal year 1999 grants?
        Answer. There was tremendous interest in the TCSP program in fiscal
    year 1999. FHWA received more than 520 requests totaling almost $400
    million. Requests were received from States, local governments and
    Metropolitan Planning Organizations in 49 States and the District of
    Columbia.
                         coast guard drug interdiction
        Question. Last fall, we appropriated a significant amount of
    emergency funding--$344 million--for the Coast Guard to play an
    expanded role in drug interdiction activities. How much of these
    appropriated funds have been obligated?
        Answer. Almost 50 percent of the $344 million has been obligated to
    date and the Coast Guard expects almost 80 percent of the funds will be
    obligated by the end of the year.
        Question. How are the operational decisions for the assets procured
    with the emergency funding for drug interdiction activities to be made?
        Answer. The Coast Guard is complying with the direction of Congress
    in the appropriations act and the accompanying conference report. The
    Coast Guard is applying the assets systematically to its multi-year
    strategy to address the flow of illegal drugs entering this country.
        Question. Are the assets to be purchased with the emergency drug
    interdiction funding to be single mission assets or will they fit the
    Coast Guard's multi-mission asset profile?
        Answer. The vast majority of assets being purchased with the
    supplemental funding while being acquired to enhance drug interdiction
    operations, will be capable of responding to the multi-missions of the
    Coast Guard.
        Question. Are the decisions regarding the procurement of assets
    with the emergency drug interdiction funding being coordinated with
    other agencies or offices in the Administration? If so, which ones, and
    what changes have been made to the procurement mix of that
    coordination?
        Answer. The procurement decisions are being coordinated with the
    Office of National Drug Control Policy and the U.S. Interdiction
    Coordinator.
                  highway safety--mexican trucks entering u.s.
        Question. I understand that there is currently a moratorium on the
    January 1, 2000 open access provision under NAFTA that would allow
    Mexican trucks to freely drive throughout the U.S. What is the
    likelihood of this moratorium being lifted before next January?
        Answer. The Moratorium on the issuance of new grants of U.S.
    operating authority to Mexican motor carriers was first imposed by
    Congress in 1982. Since 1984, Mexican trucking operations have been
    confined to the border commercial zones established by the former
    Interstate Commerce Commission. The NAFTA sets forth a timetable for
    removing the restrictions on Mexican motor carriers on a gradual basis.
    In December 1995, when Mexico and the United States were to have lifted
    restrictions on the delivery and backhaul of cargo to each other's
    border states, the Department announced a delay on the implementation
    of the NAFTA provisions for safety reasons. The Moratorium will
    continue unmodified until the Department of Transportation is satisfied
    that the necessary safeguards have been put in place by Mexico and the
    United States to ensure safe cross-border operations. Since bilateral
    consultations regarding access to the border states are still ongoing,
    the Department cannot anticipate whether the second NAFTA trucking
    phase--access for Mexican companies to operate throughout the United
    States--will occur according to the NAFTA schedule. The Department
    expects that the truck access restrictions will begin to be phased-out
    within a reasonable time after safety consultations with Mexico have
    been concluded.
        Question. Roughly, what percentage of truck traffic at the U.S./
    Mexico border is being inspected by Federal motor carrier inspectors?
        Answer. Less than 1 percent of the truck traffic is being inspected
    by Federal inspectors.
        Question. How does the Federal Highway Administration determine how
    many Federal safety inspectors to deploy at crossings?
        Answer. The FHWA is working with the enforcement agencies of the
    border States to establish a permanent and consistent enforcement
    presence along the border that will subject Mexican and Canadian
    vehicles and drivers to roadside inspections. The intent in increasing
    the Federal enforcement presence along the Southern border is to
    complement rather than replace State enforcement efforts. Therefore,
    FHWA is deploying Federal inspectors in locations where the States at
    this time do not have enough resources to provide coverage.
        The Department continues to believe that the most effective means
    to ensure safe cross-border operations is through continued
    strengthening of the long-standing Federal-State relations created by
    the Motor Carrier Safety Assistance Program (MCSAP). While FHWA is
    prepared to increase the number of Federal inspectors at the border
    crossings, States must augment their own enforcement presence in border
    areas and other locations throughout the State as Mexican vehicles
    begin to operate farther into the interior of the State and the rest of
    the country. Toward this end, FHWA is encouraging States to augment the
    funding they are already receiving under MCSAP by applying for a share
    of the discretionary program funds available under TEA-21 to fund
    activities that will lead to a more permanent and consistent
    enforcement presence along the border, including inspection facilities,
    equipment, additional personnel, and new technologies.
        Question. Has an effort been made by the Federal Highway
    Administration to isolate which companies have safety compliance
    problems, or to direct Federal and State inspection efforts to the
    areas where these rogue companies operate?
        Answer. Safety compliance information on motor carriers whose
    vehicles have been inspected by Federal or State personnel is included
    in FHWA's Motor Carrier Management Information System (MCMIS). Roadside
    inspectors access this information through the Inspection Selection
    System (ISS) to focus inspection activities on rogue carriers.
        The ISS helps roadside inspectors focus on high risk carriers by
    providing instant safety performance status and past safety problem
    statistics on the selected carrier. The system also presents an
    ``INSPECT, OPTIONAL, or PASS'' recommendation on whether the vehicle
    should be inspected or not.
        Also, as part of the inspection process, vehicles that pass an
    inspection are issued a decal which is valid for 90 days. Vehicles with
    a valid decal are normally allowed to continue and are not inspected
    unless the inspector notices obvious defects. The decals allow the
    inspectors to focus their efforts on vehicles that have not been
    inspected recently and are more likely to have safety defects.
        The FHWA also initiates enforcement actions against carriers with
    safety compliance problems as identified through roadside inspections.
    For example, in 1998, approximately 280 enforcement cases were brought
    against Mexican carriers.
                                     ______

                   Questions Submitted by Senator Lautenberg

                            office of motor carriers
        Question. Should suspended licenses be permanently disqualifying?
        The OMC recently concluded its own ``effectiveness study'' on the
    Commercial Driver's License program. That study included the remarkable
    observation that a surprisingly high percentage of trucks and bus
    operators appear willing to continue to operate their vehicles even
    after their commercial driver's license has been revoked. What is FHWA
    planning to do about this problem?
        Answer. FHWA is planning to address this problem in two ways.
    First, FHWA will continue to work to strengthen enforcement of the
    Commercial Driver's License (CDL) penalties against disqualified
    drivers by conducting more frequent CDL driver licensing checks at the
    roadside and during compliance reviews. FHWA currently requires its
    safety investigators to conduct driver licensing checks during the
    performance of a compliance review and are working to increase the
    number of driver licensing checks being conducted by State inspectors
    as part of the roadside vehicle inspection program.
        Second, FHWA plans to begin work this fall on a study to obtain a
    better estimate of how much CDL enforcement is actually being
    performed, identify barriers to achieve greater CDL enforcement, and to
    develop ways to overcome those barriers.
        Question. Should we use market forces to prompt safe truck and bus
    operations?
        In the Coast Guard, we now target substandard ships and shipping
    companies for more frequent and more thorough inspections. Importantly,
    we also make the names of these ships and shipowners immediately
    available on the Internet so shippers know that if they do business
    with these shipping companies, they can expect to have their shipments
    delayed for lengthy Coast Guard detentions.
        Since the OMC already has a website that includes data on each
    motor carrier, why doesn't the OMC follow the Coast Guard's lead and
    provide a simple list of every truck and bus operator with significant
    problems so that the public can make informed market decisions?
        Answer. Providing the marketplace with Internet access to motor
    carrier safety information has the potential to elevate safety as the
    primary criterion for evaluating the suitability of and hiring
    individual motor carriers, thus substantially advancing the cause of
    highway safety in the United States. Accordingly, the Office of Motor
    Carrier and Highway Safety, working with RSPA's Volpe National
    Transportation Systems Center, has developed the Analysis & Information
    (A&I) Online Intranet site to provide quick and efficient access to
    information and analysis about commercial motor carrier safety. Among
    its components are the SafeStat Online module, which provides online
    access to individual motor carrier's SafeStat score. SafeStat is an
    indicator used by FHWA to rank carriers and identify those carriers
    with the highest safety risk based on their crash rate, driver and
    vehicle compliance and safety management systems. The Crash Profiles
    Online module contains descriptive statistics--on a State-by-State and
    National level--about fatal crashes and non-fatal (injury and property-
    damage-only) crashes during 1996 and 1997 involving large trucks.
    Included in this module is a report that lists the 100 carriers having
    the most crashes within each State, with a direct link to each
    carrier's SafeStat detail information.
        The A&I Online system has been operational for over a year in
    support of OMCHS field and headquarters employees. Currently, patrons
    must be connected to the DOT network to access the A&I Online site.
    However, in January of 1999, OMCHS management approved a phased
    approach to expand access of A&I Online to the Internet with access
    available to the general public. Certain access controls will be
    established to limit access to proprietary and privacy sensitive data.
    The A&I Online site on the Internet will better support the current
    user base as well as expand access to other government agencies, other
    motor carrier safety stakeholders (e.g., State safety agency officials
    and other Federal Government agencies that regulate or contract with
    private commercial motor carriers; shippers; motor carriers and their
    associations; and insurance companies) and the general public.
                                   y2k issues
        Question. Why are Y2K costs skyrocketing?
        Between August 1998 and November 1998, your estimated Y2K costs
    went from $213 million to $321.5 million. Just this month, you reported
    that the costs have increased again, to $375.5 million. This is a 76
    percent increase in just the past six months. How confident are you in
    the accuracy of your latest estimate? Should we continue to expect
    these estimates to grow throughout the coming year?
        Answer. The estimated cost of $375.5 million reported in the
    Department's February 12, 1999, Quarterly Y2K Progress Report to OMB
    reflects the latest DOT-wide cost estimates for Y2K. The cost estimate
    has increased primarily as a result of requirements that were not
    anticipated at the time initial cost estimates were prepared. It
    includes costs to remediate DOT systems for Y2K compliance, as well as
    estimated costs for independent verification and validation efforts,
    business continuity and contingency planning, and domestic and
    international industry outreach and assessment.
        Globally, Y2K problem resolution has been a project without
    precedent. The Department of Transportation has been continually
    learning, redefining efforts, and adding additional requirements in
    response to requests from external organizations, such as OMB and the
    President's Y2K Conversion Council. While the latest cost estimates
    were accurate at the time they were reported, it is likely that
    additional costs will be identified as Y2K remediation and contingency
    planning efforts continue.
        A major portion of the increase between August 1998 and November
    1998 was attributable to:
        The USCG increasing its total Y2K cost estimate by $15 million due
    primarily to accelerated project schedules to comply with OMB
    milestones; increased IV&V costs; increased contingency plan
    development costs; unanticipated costs associated with outreach
    initiatives; and, increased costs to replace non-Y2K compliant hardware
    and software.
        The FAA increasing its total Y2K cost estimate by $81.3 million due
    primarily to the inclusion in the estimate of fiscal year 1999 costs
    for the Host and Oceanic Computer System Replacement Program (HOCSR).
    HOCSR costs had not been previously included since the program was
    initiated independent of the Y2K problem. However, the HOCSR schedule
    was accelerated to mitigate potential Y2K risks associated with relying
    solely on a strategy of renovating the existing system.
        The Office of the Secretary (OST) increasing its total Y2K cost
    estimate by $9.3 million to cover increasing costs for renovation and
    validation of departmental mission-critical systems, as well as CIO Y2K
    program management functions such as DOT-wide oversight, domestic and
    international industry outreach, industry assessment, and establishment
    of a Transportation Sector Y2K information website.
        A major portion of the $54 million increase in the Department's
    total estimated Y2K costs from the November 1998 submission to the
    February 12, 1999 submission is attributable to increased costs for FAA
    ($47 million) and USCG ($6.6 million) in the following areas:
    acceleration of remediation efforts to ensure timely compliance;
    increased validation costs; business continuity and contingency
    planning; expanded domestic and international outreach to the
    transportation sector; and assessment of Y2K status in the
    transportation industry.
                       status of faa y2k testing program
        Question. Will Y2K problems disrupt aviation operations?
        The FAA is facing, perhaps, the most serious challenge in
    addressing Y2K issues. The GAO, in August 1998, and again today
    testified that it is unlikely that the FAA will be able to complete all
    critical tests of its computer systems in time and that other
    unresolved risks will threaten to disrupt aviation operations at the
    end of the year. What is the current status of the testing of critical
    systems at FAA? What types of systems are yet to be tested, and how
    confident are you that FAA will complete testing on time?
        Answer. The FAA is currently in the validation phase of its Y2K
    remediation efforts. The validation phase includes testing all
    applications and interactions between scores of converted or replaced
    computer platforms, operating systems, utilities, applications,
    databases, and interfaces. The FAA monitors validation schedules daily.
    The agency is on target and very confident that it will complete all
    validation phase activities by March 31, 1999.
        All systems, including National Airspace Systems (NAS) and business
    systems, are currently being tested. In addition to testing all systems
    that required Y2K repairs, FAA is validating systems that were assessed
    as not requiring Y2K repairs. Critical testing of FAA's systems is
    nearing completion: unit tests are already completed; system level
    system tests will conclude on March 31, 1999; and end-to-end testing of
    the National Airspace System (NAS) will be completed in April 1999 as
    part of the implementation phase.
        Question. What contingency plans are in place in the event critical
    testing is not completed and system failures occur?
        Answer. In the unlikely event a problem is missed during critical
    testing, the FAA has a wide range of existing contingency plans to deal
    with a multitude of circumstances that may occur in the air traffic
    control (ATC) system. Specifically, per FAA orders, each air traffic
    facility has a current contingency plan that addresses restoration
    processes with the NAS. Each individual ATC mission critical system has
    a contingency plan in place should a system outage occur for any
    reason.
        At the enterprise level, the FAA completed a draft Y2K Business
    Continuity and Contingency Plan (BCCP) on December 31, 1998, which is
    currently under internal review. The BCCP specifically addresses Y2K
    problems from a national perspective, including airport and
    international issues, as well as encompassing FAA business systems. The
    BCCP is being developed in partnership with unions, subject matter
    experts, and FAA management. In the unlikely event an FAA system is not
    fully Y2K compliant by the turn of the millennium, the operational
    functions of that particular system would be temporarily shifted to the
    BCCP identified alternative until Y2K repairs are completed.
                     coast guard y2k vessel traffic system
        Question. In less than a month, on March 24, we will mark the ten-
    year anniversary of the Exxon Valdez oil spill. It appears that the
    Coast Guard Vessel Traffic System in Prince William Sound will not be
    Y2K compliant by the March deadline set by OMB. In fact, upgrades to
    the system are not scheduled to be completed until October 1999. What
    assurances can you provide that this critical VTS will, in fact, be
    upgraded, tested and fully Y2K compliant by your rescheduled completion
    target of October 1999? When will the Coast Guard contingency plan be
    completed, and how will it be tested to ensure it will be effective in
    the event that Y2K compliance cannot be attained in time?
        Answer. The current project plan calls for the existing Prince
    William Sound (Valdez) VTS to be fully Y2K compliant by the rescheduled
    October 1999 target date.
        The primary strategy is to replace the existing non-Y2K compliant
    Raytheon VTS components with an off-the-shelf Y2K compliant system
    being produced by Lockheed-Martin. The installation of the new
    Lockheed-Martin developed VTS in New Orleans is underway, and the
    Valdez installation has been moved up in the queue to occur next.
    Lockheed-Martin has performed a site survey and assessment of the
    Valdez location and has developed a project plan for the installation.
    Contracts with Lockheed-Martin for the new VTS are in place and task
    orders have been issued.
        A secondary strategy involves determining if the existing Raytheon
    VTS components in Valdez can be made Y2K compliant with a patch or
    upgrade. To date, Raytheon has not been able to provide the Coast Guard
    with a solution, but a similar fix is being examined for a similar
    Raytheon system in use by the Federal Aviation Administration (FAA).
    Raytheon has informed the Coast Guard that it should know by June 1999
    if the existing VTS can be repaired. If the Raytheon VTS components can
    be repaired and made Y2K compliant, the Coast Guard will pursue that
    option as a contingency should the current Lockheed-Martin effort
    experience delays.
        A third strategy involves the `manual' tracking of vessels in
    Prince William Sound using transponder signals emitted by tankers, and
    VHF voice radio communications to track vessel location and movement on
    plot boards. This contingency strategy currently exists for events such
    as a power failure which might render the VTS inoperable.
        The weather conditions in the region may be the final determining
    factor as to which of the above strategies can be utilized. Ironically,
    the situation may also be helped by the season. During the months of
    the year surrounding the century change, vessel traffic in the Prince
    William Sound is minimal. The Coast Guard believes that adequate levels
    of safety can be assured for the limited numbers of vessels that will
    be moving in the area.
                    office of motor carriers and bus safety
        Question. Are there unique problems with OMC oversight of bus
    companies? In New Jersey?
        Each of the agencies represented at the witness table testified
    before the House Transportation Subcommittee this past Tuesday
    regarding problems with the Federal Office of Motor Carriers (OMC). Can
    you identify particular problems that are unique to the bus industry
    and the OMC's efforts to promote bus safety?
        Answer. The bus industry is unique in that bus drivers are not able
    to take rest breaks whenever the need arises and have to accommodate
    the needs of 40 passengers, luggage handling and ticketing.
        Given recent bus fatalities, it is clear that more emphasis needs
    to be devoted to bus safety. The FHWA has several efforts underway that
    will address these needs including a review of the hours of service
    regulations, a study on bus driver stress and fatigue factors,
    production of a video to educate bus drivers on fatigue issues, and
    additional emphasis on poor performing bus carriers during selection
    for compliance review.
        Question. I have reviewed the data for each state regarding the
    percentage of buses and trucks that are ordered off the road for
    flagrant safety violations. When you look at the data for New Jersey,
    you find that commercial vehicles were ordered off the road at a rate
    that is below the national average in almost every category. However,
    in one category--the mechanical condition of buses--17 percent of all
    inspected buses were ordered off the road while the national average is
    10 percent.
        Could this figure indicate that the New Jersey State Police are
    actually more aggressive than their neighbors in ordering unsafe buses
    off the road?
        Answer. New Jersey has a very aggressive bus inspection program
    requiring inspections of New Jersey based carriers twice a year. In
    addition, New Jersey has the resources to conduct many inspections and
    by doing those inspections, they become very experienced in targeting
    carriers and vehicles that have a history of poor performance, so
    naturally the out of service rate would be higher as opposed to random
    inspections. Also, due to the volume of bus travel in the State,
    inspectors are more aggressive in their inspection procedures.
        Question. What observations can you make regarding how the Motor
    Carrier laws are enforced in each State? Is it your view that these
    laws are enforced uniformly, or is there a wide variation among states?
        Answer. It is not uncommon for bus inspections and enforcement of
    motor carrier safety laws to be delivered in varying ways within the
    States, depending upon the number of buses entering each jurisdiction.
    Some have a much higher level of motorcoach and bus traffic than do
    other States, and some States are more deligent in their enforcement
    efforts. To encourage the uniform application of federal regulations,
    the FHWA has begun the process of promoting uniformity among the States
    by delivering the Motorcoach Inspector Training course through the
    National Training Center. To date, FHWA has trained over 500 State and
    federal inspectors in inspection procedures and applicable regulations.
        Question. How do we ensure that bus operators continue to comply
    with the law?
        As I mentioned in my opening statement, the Bruins Transportation
    Company had a compliance review in 1996, and was found to be unsafe.
    They cleaned up their act long enough to be allowed to stay in
    operation. Two years later, after the accident that killed eight
    passengers, many of the same problems found in 1996 were still found to
    be existing at the carrier. These problems included a sloppy hours-of-
    service logs, no evidence of drug and alcohol testing, and troubled
    vehicles. What solutions would you propose in order to ensure that,
    once a carrier takes the necessary safety measures, there is adequate
    oversight to ensure that they continue to operate safely?
        Answer. Bus companies need to be clearly identified and prioritized
    within FHWA's risk assessment model and FHWA is currently evaluating
    the best way to do this.
        Question. Why have compliance reviews and fines declined while
    budget resources have increased?
        When you look at the OMC's efforts in the last six years, you see
    that the number of compliance reviews conducted by the federal
    inspectors has been allowed to decline by over 50 percent. Yet, during
    the same time period, funding for the office has grown substantially.
    What can you tell us as to why compliance reviews have declined by half
    at the OMC?
        Answer. During the past several years, the OMCHS migrated from
    being a compliance and enforcement agency to that of a comprehensive
    safety agency. Resources have been used to address complex safety
    issues through the use of a larger group of activities including
    compliance reviews.
        In addition, FHWA now focuses first on conducting reviews of
    carriers with poor safety performance histories. Reviews conducted on
    these carriers are frequently more complex and time-consuming. Since
    FHWA is conducting fewer, but more focused compliance reviews,
    enforcement actions are better targeted.
        Question. OMCHS has defended this decline in oversight by
    explaining that they now target their compliance reviews on carriers
    that have shown specific indicators that they are likely to be unsafe.
    If that is the case, why hasn't there been an increase in the amount of
    violations and fines levied as part of these compliance reviews?
        Answer. Violations discovered during compliance reviews have not
    declined, although the number of compliance reviews conducted have. The
    OMCHS assesses fines for serious noncompliance based on the statutory
    criteria. The OMCHS is currently reviewing the fine structure and the
    Uniform Fine Assessment criteria for effectiveness.
        In addition, TEA-21 streamlined FHWA's penalty provisions, giving
    the agency the ability to impose higher fines in some cases and to levy
    fines without demonstrating gross negligence on a pattern of
    violations. FHWA will use this authority to aggressively impose fines
    on carriers that fail to comply with the safety regulations.
                                     ______

              Questions Submitted to the General Accounting Office

                   Questions Submitted by Senator Lautenberg

                                     amtrak
        Question. What promise is there for non-passenger related revenue?
        In the past few months, Amtrak has announced numerous new
    initiatives, including the contracting out of their food preparation
    operation, new and expanded contracts with the Postal Service, as well
    as new contracts with the Burlington Northern/Santa Fe Railroad and the
    United Parcel Service to boost non-passenger revenue.
        Mr. Anderson, would you care to comment on Amtrak's non-passenger
    revenues and their promise for growth in future years?
        Answer. To reduce losses and to help reach the goal of operating
    self-sufficiency set by the Congress, Amtrak has aggressively pursued
    revenues from non-passenger sources, such as mail and express,
    telecommunications, and real estate. Initiatives that have the
    potential to contribute revenues year after year, such as mail, should
    help improve Amtrak's financial condition. Other initiatives that
    result in one-time increase in revenues (i.e., sales of real estate),
    while helpful, cannot be counted on to improve Amtrak's financial
    condition over the long-term, because they are non-recurring.
        Question. Mr. Anderson, your statement points out that Amtrak loses
    $2 for every dollar it earns in revenues from train operations. Why do
    you find that figure significant when fully one quarter of Amtrak's
    total revenues are not from train operations, when you exclude the
    Federal appropriation?
        Answer. Amtrak continues to look for opportunities for non-
    passenger service revenues (such as real estate development and
    telecommunications) as a means to help turn its financial condition
    around. Yet most of its revenues and expenses are related to its
    passenger-related activities. Amtrak needs to look long and hard at its
    route structure and its train operations. This includes looking at
    opportunities to increase train-related revenues and reducing train-
    and route-related costs.
                    office of motor carriers and bus safety
        Question. Are there unique problems with OMC oversight of bus
    companies? In NJ?
        Each of the agencies represented at the witness table testified
    before the House Transportation Subcommittee this past Tuesday
    regarding problems with our Federal Office of Motor Carriers (OMC).
         Can any of you identify particular problems that are unique to the
    bus industry and OMC's efforts to promote bus safety?
        Answer. The most obvious difference between the bus industry and
    the truck industry is that a crash involving a bus has the potential
    for more injuries and fatalities. Even so, in 1997 crashes involving
    commercial buses resulted in 335 deaths and 27,275 injuries while
    crashes involving large trucks resulted in 5,335 deaths and 132,513
    injuries. In its Motor Carrier Safety Program, the Office of Motor
    Carriers leaves it to the states to decide where the greatest safety
    problems lie and target their efforts accordingly.
        While we have not done any work regarding bus safety throughout the
    nation, in our reviews of states efforts' to ensure that large
    commercial trucks and commercial busses entering the United States from
    Mexico comply with U.S. safety regulations, we found that state
    enforcement officials devoted much more time to inspecting trucks than
    buses. This occurred because there were 20 times as many truck
    crossings as there were bus crossings (an average of 12,000 truck
    crossings versus an average of 598 bus crossings each day).
        Question. I have reviewed the data for each state regarding the
    percentage of buses and trucks that are ordered off the road for
    flagrant safety violations. When you look at the data for New Jersey,
    you find that commercial vehicles were ordered off the road at a rate
    that is below the national average in almost every category. However,
    in one category--the mechanical condition of buses--17 percent of all
    inspected buses were ordered off the road while the national average is
    10 percent. Could this figure indicate that the New Jersey State Police
    are actually more aggressive than their neighbors in ordering unsafe
    buses off the road?
        Answer. The statistic could represent several conditions. These
    might include that New Jersey enforcement officials were more effective
    in selecting buses with severe mechanical conditions than their
    counterparts, even if the physical condition of buses in neighboring
    jurisdictions did not significantly differ from those in New Jersey.
    (Enforcement officials typically select vehicles for inspection that
    they suspect have safety problems, rather than selecting vehicles
    randomly.) It also might mean that buses operating in New Jersey had
    more severe mechanical problems, everything else being equal.
        Question. What observations can you make regarding how the motor
    carrier laws are enforced in each state? Is your view that these laws
    are enforced uniformly, or is there a wide variation among states?
        Answer. Enforcement strategies vary by state. For example,
    California has chosen to build facilities to inspect a greater
    proportion of commercial trucks that enter the United States from
    Mexico. Texas had not done this as of the time of our work in 1997.
    Also, California had chosen to devote more enforcement officials to
    border crossings than had Texas. But, the consequence for California is
    that those same resources invested at the border are not available for
    enforcement activities elsewhere in the state. Also, as mentioned
    earlier, enforcement officials in the four border states had elected to
    devote much more effort to inspecting commercial trucks than to
    inspecting commercial buses entering the United States from Mexico,
    again representing their priorities. OMCHS recognizes the need for
    uniformity of laws and fines but has no current initiatives to further
    this goal.
        Question. How do we ensure that bus operators continue to comply
    with the law?
        As I mentioned in my opening statement, the Bruins transportation
    Company had a compliance review in 1996, and was found to be unsafe.
    They cleaned up their act long enough to be allowed to stay in
    operation. Two years later, after the accident that killed eight
    passengers, many of the same problems found in 1996 were still found to
    be existing at the carrier. These problems included sloppy hours-of-
    service logs, no evidence of drug and alcohol testing, and troubled
    vehicles.
        What solutions would any of you propose in order to ensure that,
    once a carrier takes the necessary safety measures, there is adequate
    oversight to ensure that they continue to operate safely?
        Answer. One response would be for additional compliance reviews to
    be conducted until enforcement officials are satisfied that safety
    improvements will not be abandoned once the federal or state presence
    is reduced. However, this creates a thorny problem. Because the number
    of compliance reviews that can be conducted in any one year is small
    (6,000-8,000) relative to the number of carriers in existence (over
    400,000 interstate carriers alone), OMCHS' SafeStat criteria target
    carriers with actual safety problems (e.g., a carrier had an accident
    that involved a death or an injury). Performing a series of compliance
    reviews on a problem carrier whose performance has improved and
    remained consistent over a period of time would likely result in
    another carrier with a demonstrated and uncorrected safety problem
    might not be subject to a compliance review.
                            office of motor carriers
        Question. Why have compliance reviews and fines declined while
    budget resources have increased?
        When you look at the OMC's efforts in the past six years, you see
    that the number of compliance reviews conducted by the federal
    inspectors has been allowed to decline by over 50 percent. Yet, during
    the same time period, funding for the office has grown substantially.
        What can you tell as to why compliance reviews have declined by
    half at the OMC?
        Answer. OMC has defended this decline in oversight by explaining
    that they now target compliance reviews on carriers that have shown
    specific indicators that they are likely to be unsafe and that
    overseeing these high-risk carriers is more time-consuming, resulting
    in fewer total reviews.
        Question. If that is the case, why hasn't there been an increase in
    the amount of violations and fines levied as part of these compliance
    reviews?
        Answer. We have not done any work looking at fines resulting from
    violations. The Department of Transportation's Office of the Inspector
    General has performed this work.

                              subcommittee recess

        Senator Shelby. The hearing will now be recessed. The
    subcommittee will reconvene next Thursday, March 4, at 10:00
    a.m., in Dirksen 124, to hold an overview hearing on the
    Department of Transportation's 2000 budget request. The witness
    will be the Secretary of Transportation, Rodney Slater, and his
    staff.
        Thank you, gentlemen, for appearing. The subcommittee is
    recessed.
        [Whereupon, at 11:34 a.m., Tuesday, February 25, the
    subcommittee was recessed, to reconvene subject to the call of
    the Chair.]

     DEPARTMENT OF TRANSPORTATION AND RELATED AGENCIES APPROPRIATIONS FOR
                                FISCAL YEAR 2000

                                  ----------

                            THURSDAY, MARCH 4, 1999

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:10 a.m., in room SD-124, Dirksen
    Senate Office Building, Hon. Richard C. Shelby (chairman)
    presiding.
        Present: Senators Shelby, Gorton, Bennett, Campbell,
    Stevens, Lautenberg, Byrd, Kohl, and Murray.

         FISCAL YEAR 2000 DEPARTMENT OF TRANSPORTATION BUDGET OVERVIEW

                          DEPARTMENT OF TRANSPORTATION

                            Office of the Secretary

    STATEMENT OF HON. RODNEY SLATER, SECRETARY OF
                TRANSPORTATION

                                OPENING REMARKS

        Senator Shelby. Mr. Secretary, thank you for being with us
    this morning. I am expecting that we will have a very well
    attended hearing because you seem to be, nowadays, a very
    popular witness and we appreciate your presence.
        Secretary Slater. Thank you, sir.
        Senator Shelby. Either you are doing a good job, Mr.
    Secretary, and several of my colleagues want to congratulate
    you, you can tell, or they have suggestions as to how you could
    do your job better. We will have to wait and see.
        Clearly, Mr. Secretary, the members of this subcommittee on
    transportation appropriations are concerned and are very
    interested in your proposed budget and the activities of the
    Department and I have a few questions at the proper time of my
    own.
        First, I want to make a couple of points about the
    President's budget request for the Department of
    Transportation. I will be very brief as I know your time is
    limited. My colleagues have a number of questions I am sure
    that they would want to ask. I want to give everyone here a
    chance to engage in a dialogue with you.

                          president's budget proposal

        At first blush, Mr. Secretary, the President's budget looks
    fairly generous toward transportation. But I think the numbers
    in your budget were, in large part, determined last year when
    the President signed the TEA-21 legislation.
        If we pull out the dollars associated with new user fee
    proposals and the increase in the highway and transit accounts
    due to the increased levels of gas tax receipts, we are left
    with a request for budget resources that is actually almost a
    billion dollars less than Congress appropriated last year. I am
    hopeful that this will be sufficient. But at this point under
    the current discretionary budget caps, I do not think even the
    President's allocation for the function 400 account can be
    achieved without some very substantial cuts in other programs.
    Well, we will have to see.
        I think the President's budget does underscore the
    importance of transportation in continuing to support the
    infrastructure investment that fuels our national economy and
    promotes the quality of life that we all enjoy. Even though the
    investment in transportation infrastructure, whether it be
    roads, transit systems, airports, air space management systems
    or Coast Guard aircraft ships and facilities, has increased
    during the time you have been the Secretary of Transportation
    and while I have been the Chairman of this Subcommittee. The
    continuing constrained budget environment that we both must
    live in necessitates that we review all the programs and
    accounts under our stewardship and cull out with your help the
    unnecessary spending so that we can focus again on the Federal
    investment on those projects and programs that the American
    public wants and needs.

                airline deregulation and disclosure act of 1999

        On another note, I also wanted to let you know, Mr.
    Secretary, that I am going to introduce a bill soon that
    provides greater transparency and clarity for the airline
    traveling public. I will call it the Airline Deregulation and
    Disclosure Act of 1999. And at the proper time I will have a
    statement on the floor of the Senate and I will have copies of
    the bill delivered to you and to the members of the
    subcommittee as well as the press and the public.

                               prepared statement

        Mr. Secretary, as always, I look forward to working with
    you in the coming year and we are pleased that you are going to
    be here with us today.
        [The statement follows:]

                Prepared Statement of Senator Richard C. Shelby

        Mr. Secretary. Thank you for being with us this morning. I expect
    that we will have a very well-attended hearing this morning--you seem
    to be a popular witness. Either my colleagues want to congratulate you
    on the job you are doing, or they have a few suggestions as to how you
    might run the Department better.
        Clearly, the members of this Subcommittee are concerned and
    interested in your proposed budget and the activities of the Department
    and I have a few questions of my own. But first, I wanted to make a
    couple of points about the President's budget request for the
    Department of Transportation. I will be very brief, as I know your time
    is limited, my colleagues have a number of questions they want to ask,
    and I want to give everyone a chance to engage in a dialogue with you.
        At first blush, the President's budget looks fairly generous
    towards transportation, but I think the numbers in your budget were in
    large part determined last year when the President signed the TEA-21
    legislation. If we pull out the dollars associated with new user fee
    proposals and the increase in the highway and transit accounts due to
    the increased levels of gas tax receipts, we are left with a request
    for budget resources that is actually almost a billion dollars less
    than Congress appropriated last year. I'm hopeful that this will be
    sufficient, but at this point under the current discretionary budget
    caps, I don't think that even the President's allocation for the
    Function 400 account can be achieved without some very substantial cuts
    in other programs.
        But I think the President's budget does underscore the importance
    of transportation in continuing to support the infrastructure
    investment that fuels our national economy, and promotes the quality of
    life we all enjoy.
        Even though the investment in transportation infrastructure--
    whether it be roads, transit systems, airports, airspace management
    systems, or Coast Guard aircraft, ships and facilities--has increased
    during the time you have been the Secretary of Transportation, Mr.
    Slater, and while I have been the Chairman of this Subcommittee, the
    constrained budget environment that we both must live in necessitates
    that we review all the programs and accounts under our stewardship and
    cull out the unnecessary spending, so that we can focus federal
    investment on those projects and programs that the American public
    wants and needs.
        On another note, I wanted to let you know, Mr. Secretary, that I
    intend to introduce a bill soon that provides greater transparency,
    more freedom and choice, and clarity for the airline traveling public.
    Every one of us here has an airline horror story to share, and my bill
    will encourage the airlines to be more competitive and responsive to
    their passengers. As soon as I introduce this legislation, I will have
    copies of the bill delivered to you and the members of the
    Subcommittee.
        As always, I look forward to working with you in the coming year.
    Senator Lautenberg?

                           alaska volcano observatory

        Senator Shelby. Senator Stevens.
        Senator Stevens. Thank you very much. I am here to thank
    the Secretary. Secretary Slater came to my state last year and
    really spent a great deal of time. He is not like some of the
    summer visitors who spend more time fishing than they do
    looking at what the subjects are, but I like both kinds.

                               prepared statement

        I do hope that you will come back up again this year as I
    have indicated to you. I am only here for one thing and I would
    ask my full statement go in.
        Senator Shelby. Without objection, so ordered.
        [The statement follows:]

                   Prepared Statement of Senator Ted Stevens

        Good morning Mr. Secretary. We appreciate your taking the time to
    review the budget request with us today.
        I believe you and I last discussed your department's budget in the
    Anchorage International Airport. Alaskans tell me they greatly enjoyed
    your visit last summer, and I hope we can get you up there again soon.
    You still haven't seen our ferry system, and we could use your
    expertise with many of the unique issues we face in rural Alaska.
        One issue in your budget is notable for its absence. While I am
    told that you requested funds for the Alaska Volcano Observatory, the
    final budget we received did not mention this small but important
    program.
        The observatory is not as important to Alaskans as it is to the
    millions of people who fly across the Pacific each year. As you know,
    the major transpacific air routes cross right over the Aleutian
    Islands, which is one of the most active volcanic regions on earth.
        In 1989, 230 people almost lost their lives over Alaska when a 747
    flew into the ash plume of Mt. Redoubt. The plane fell 13,000 feet
    before recovering, and all four engines had to be replaced at a cost of
    $80 million. Globally, there are five close calls every year involving
    airplanes and volcanoes.
        In 1997, the Alaska Volcano Observatory received a Golden Hammer
    Award from the Vice President for efficiently providing its important
    safety service.
        I hope in the future that you, myself, the Vice President, the
    scientists and the aviation community who support this program can
    convince the budget writers that aviation safety is not a political
    issue.

        Senator Stevens. Thank you.
        I know that you asked for funds for the Alaska Volcano
    Observatory, but those were not included in the President's
    budget. And I think that is very regrettable, and I want to
    call attention to everybody what this means.
        That observatory has brought about the world's attention to
    the problem of high-flying aircraft in the vicinity of volcano
    eruptions. Every year, millions of people fly across the
    Pacific, and the transpacific routes come over the Aleutian
    Islands. That is the most active volcanic region on Earth. It
    is not just our planes. It is the planes of the world. We are
    the air crossroads of the world.
        In 1989 there were 230 people on board a 747 when it flew
    into the ash plume arising from the eruption of Mt. Redoubt.
    That plane fell 13,000 feet. All four engines went off.
    Luckily--I cannot remember how many came back on, but they did
    come back on. All four engines, however, when examined had to
    be totally replaced to the cost of $80 million. There are five
    close calls every year on airplanes and collisions from
    airplanes in volcanic ash.
        In 1997 that observatory received from the Vice President
    the Golden Hammer Award for efficiently providing this
    important safety service, but now it has been left out of the
    budget.
        I congratulate you for asking, but I do want the committee
    to be on notice. That is one of the items I want to see put
    back into this budget. As a matter of fact, I had to change my
    destination and go to Fairbanks the night of that incident. And
    I drove down to Anchorage and I became very aware of what had
    happened and called the FAA and others together, and we started
    the concept that night of what finally lead to the observatory.
        If you will, put in the record these statistics, Mr.
    Chairman. The AVO--that is what we call the Alaska Volcano
    Observatory--has given notice on several occasions that has
    resulted in saving lives.
        In 1996 there were 3,000 earthquakes along the Aleutian
    chain in 2 days. That opened up a 10-mile long crack on Unimak
    Island. But the sensors that had been placed on that island by
    the observatory permitted our public officials to avoid a
    costly evacuation of the island to move the people to a safer
    part of the island. And I just cannot overestimate in our part
    of the world how much that observatory means to our safety.
        Thank you very much. I hope you will put this in the
    record.
        Senator Shelby. Without objection, it is so ordered.
        Senator Byrd, you want to yield to Senator Lautenberg.
        Senator Lautenberg. That is very kind. Thank you. I look
    forward to hearing from Senator Byrd.
        Mr. Chairman, we are doing the right thing at this moment.
    We are going to hear from our distinguished Secretary who has
    done a really good job, and I hear it from both sides of the
    isle, Mr. Secretary. And that is a pretty good sign things are
    okay.
        We do not need any more turmoil than we have got around
    here. And I am glad to know that others agree that you are
    doing the job you are assigned to do. We appreciate it and
    respect it.

                               economic expansion

        Last week we learned yet again that this Nation's economic
    expansion is continuing at a rate that is surpassing almost all
    expectation. The economy in the last quarter grew at a rapid
    6.1 percent annual rate as measured by the gross domestic
    product, the broadest measure of the U.S. economy. This
    quarterly growth was one of the strongest ever in recent
    memory. It now looks as if our Nation's longest peacetime
    economic expansion is going to last for at least 8 years and,
    hopefully, a lot longer than that.
        What does this good economic news mean for our national
    transportation enterprise? It means that we can expect stress
    on an already stressed transportation system. There is a good
    side and a bad side, obviously. But the best side is that we
    see growth.
        Greater shipments by manufacturers will mean that our
    already congested freight rail main lines will be further
    congested. It means that our already congested highways will
    get even more congested.
        And any member of this subcommittee who flies regularly can
    tell you that the runways at our airports are jammed and flight
    delays are on the rise. This past June we reached the highest
    level for airline delays for any month within the last 4 years,
    almost 40,000 flight delays of 15 minutes or more in a single
    month.
        I do not need to review the data to speak to this problem.
    I and many of my constituents regularly fly through Newark
    International Airport. It is a beautiful airport with good and
    new facilities. However, the air congestion in the New York/New
    Jersey region in combination with growth in traffic has caused
    Newark to be ranked once again as the most delayed airport in
    the United States.
        So as our economy expands and traffic increases, our U.S.
    Department of Transportation finds itself in a rapid game of
    catch up. We are years, if not decades, behind in making the
    necessary investments in transportation infrastructure. In
    recent years we have made some progress, especially since TEA-
    21 was enacted. But we will need to continue to make rapid
    progress if we are ever going to come close to reversing the
    trends we see in congestion.
        In that regard, there is a lot to like in the budget that
    Secretary Slater will be presenting us this morning. For the
    first time the proposed annual DOT budget will top $50 billion.
    But I quickly point out that just on our highways it is
    estimated that the annual cost of congestion to our economy is
    close to $74 billion.
        The budget before us fully honors the guaranteed spending
    levels called for under TEA-21. Under those funding levels we
    will see highway spending grow by 22 percent in the 2 years
    from fiscal year 1998 to fiscal year 2000. Transit spending
    will grow by 25 percent over the same period and a lot of this
    credit for this fine budget belongs to the Secretary.

                             management challenges

        Last week this subcommittee took some very sobering
    testimony from GAO and the DOT Inspector General regarding the
    management challenges at DOT. It was clear to this Senate that
    much more needs to be done toward ensuring highway safety,
    especially as it involves motor carriers including trucks and
    buses.
        While the FAA is working hard to address the Y2K bugs in
    our air traffic control infrastructure, much more needs to be
    done in a very short period of time. Our hearing last week
    reminded all of us that this issue is not only how much we
    spend, but how we spend it.
        I know that the Secretary agrees with that observation. I
    look forward to hearing his testimony this morning.
        Thank you, Mr. Chairman, and thank you, Senator Byrd, for
    your courtesy.
        Senator Shelby. Senator Byrd now.
        Senator Byrd. Mr. Chairman, I thank you.

                                     tEa-21

        The Transportation Equity Act for the 21st century or TEA-
    21 as it has come to be known was perhaps the greatest
    legislative accomplishment of the 105th Congress. It reversed a
    longstanding trend of Federal disinvestment in our Nation's
    infrastructure. The bill called for $216 billion in
    transportation investments over the 6 years, 1998 through 2003.
    Of that amount, $173 billion was provided in contract authority
    for our national highway system.
        The authorized level for highway spending rose a full 40
    percent above the level authorized for the previous 6-year
    period under the Intermodal Surface Transportation Efficiency
    Act or ISTEA. Importantly, this added highway spending allowed
    the unique needs of differing regions of the country to be
    accommodated.
        As far as I am concerned, an important cornerstone of the
    bill was a provision of $2.25 billion in contract authority for
    the Appalachian development highway system. For other Senators
    it was funding for Federal lands, highways, or new roads to
    improve trade across our international borders.
        Most importantly, TEA-21 put into law a mechanism to ensure
    that the funds deposited in our highway trust fund will be
    spent on the purpose for which they are collected; namely, the
    construction and restoration of our Nation's highways. This
    mechanism, now referred to as the highway funding guarantee, is
    extremely important as it embodies the Federal Government's
    commitment to keep faith with the taxpayers of the Nation who
    pay into that highway trust fund every time they go to the gas
    pump.
        The highway funds that are guaranteed under TEA-21 are
    required to be appropriated each and every year through 2003.
    As such, the Congress' commitment to these guarantees could be
    tested through the appropriations process, especially when
    available funding for other domestic needs is scarce.
        For the coming fiscal year the funding guarantees call for
    highway spending to grow by another $2.2 billion or 9 percent
    above the current year's level. But the overall spending cap
    that will govern our discretionary spending for the coming year
    is extremely tight.
        For the most part, and I emphasize for the most part, the
    administration's budget honors the highway funding guarantee
    called for in TEA-21.

                          discretionary spending caps

        But for this discretionary spending overall, the
    administration's budget seeks a program level well in excess of
    the spending cap and the existing budget agreement. In fact,
    the President's budget states clearly right on table S-4 of the
    budget that he is seeking $17.8 billion more than the cap for
    fiscal year 2000 will allow.
        The Congressional Budget Office testified that the overage
    under their scoring is closer to $30 billion. The
    administration's budget proposes to close this gap by
    recommending several controversial offsets such as new user
    fees that have been rejected by previous Congresses and will be
    very difficult to enact this year.

                                   user fees

        A microcosm of this situation can be seen right within the
    budget for the Department of Transportation. While the overall
    budget for transportation proposes an increase of 4.5 percent
    or $2.2 billion, the budget simultaneously requests new user
    fees within the Department of Transportation totaling $1.657
    billion. Almost $1.5 billion of those new user fees would be
    within the Federal Aviation Administration.
        Mr. Secretary, it will not surprise you that many Senators
    will want to talk with you about how to spend your proposed
    increase of $2.2 billion. Far fewer Members will be interested
    in discussing your user fee proposal of $1.6 billion.

                           highway funding guarantee

        We are in the early stages of a very long debate over the
    final makeup of this year's budget. But I want to signal here
    and now that as far as I am concerned, the highway funding
    guarantee is not open to negotiation. That was fought for and
    won in TEA-21. I will continue to defend the principles that
    funds deposited in the highway trust fund should be spent on
    our Nation's highways.
        Now you will note that earlier I stated that the
    administration's budget honors the highway guarantee included
    TEA-21, ``for the most part.'' Well, I say for the most part
    because I find one significant and disturbing policy change
    included in this budget that serves to divert a portion of
    these highway revenues to other purposes.
        The TEA-21 law included an important provision called
    Revenue Aligned Budget Authority. That program is at the core
    of our commitment to the gas taxpayers of America. It says that
    when gas tax receipts to the highway account of the highway
    trust fund exceeds the level that was anticipated under TEA-21,
    then highway spending will increase automatically by the amount
    of those increased tax receipts.
        The TEA-21 law calls for this additional funding to be
    spent on highways and highways only. After all, we are talking
    about receipts to the highway account of the highway trust
    fund. I am disappointed, therefore, to see the administration's
    budget skim off almost a third of these funds, more than $450
    million, for other non-highway purposes.
        Funds are diverted to research programs, to transit
    programs, to the National Highway Traffic Safety
    Administration, and to the Federal Railroad Administration. I
    am not against funding those agencies, but I cannot support
    diverting these highway funds which are expressly authorized
    for the purpose of highway construction to non-highway uses.
        I am glad that Secretary Slater is here this morning, and I
    look forward to discussing these and other issues.
        Thank you, Mr. Chairman.
        Senator Shelby. Senator Gorton.
        Senator Gorton. Mr. Chairman, you and Senator Byrd have
    eloquently outlined some of the troubling aspects of this
    appropriations bill. As a consequence, I am going to focus on
    only one of them, though I share the concerns that my
    colleagues have stated with respect to others.

                                   user fees

        In connection now with aviation, what this budget calls for
    is a huge increase in effective taxes on the aviation industry,
    the authorization of substantial increases in local passenger
    facility charges, a huge user fee initiative without any
    definition of what it would be and before the Federal Aviation
    Administration has developed any kind of cost accounting system
    on which a valid user fee scheme could be based.
        And in return for those increased taxes, the Federal
    Government under this budget will substantially cut the amount
    of contributions that it is going to make. An Airport
    Improvement Fund reduction, large reduction from the amount
    that, with your leadership, we appropriated for this last year
    is even less than was requested last year.
        Mr. Chairman, with the Secretary here, I know that you join
    with me in the opinion that he has been one of the most
    responsive secretaries I can remember in Republican or
    Democratic administrations. I have never called him without
    getting a prompt response, and I never asked for help without,
    at the very least, having had his attempt to do whatever he
    could.
        So I cannot blame him for this budget. I think this budget
    was done at a level higher than he finds himself. And I think
    he is going to be a trouper and defend it. But I do not think
    that we here on this Committee can defend a budget that is
    based on user fees that he, the Administration, you and I,
    Senator Byrd and everyone else knows we are not going to
    impose. We simply are not going to do it.
        So the real question is how do we treat these
    transportation priorities fairly and generously without the
    unrealistic accounting that the Administration has given us in
    this budget. I hope that after he has done his duty to the
    Administration and eloquently defended the budget that I think
    he knows is unrealistic, as we do, that he will at least
    privately help us. Come up with a way to solve all of these
    problems in the direction that we are likely to go.
        Senator Shelby. Senator Kohl.
        Senator Kohl. Thank you, Mr. Chairman, and welcome,
    Secretary Slater.
        We thank you for coming before us today to discuss the
    Department of Transportation budget for fiscal year 2000. It is
    encouraging that you have come here to discuss a budget that
    prioritizes and strengthens infrastructure investment overall,
    even if we differ on details.

                             highway apportionments

        One area where we do have a major difference is on where
    control of highway dollars should rest. Mr. Secretary, last
    year you took the time to visit the area surrounding Green Bay,
    Wisconsin, to talk transportation with state and local
    officials. And everyone walked away from that meeting feeling
    that the Administration respected the direction and decisions
    of those closest to their own states' transportation
    challenges.
        Unfortunately, this year's budget reflects quite a
    different philosophy. It seeks to amend TEA-21 by moving
    resources away from the core highway programs and by reducing
    the funds available to the states, which in the case of
    Wisconsin will result in a $26 million reduction. The Beltway
    is a long way from the back roads of Wisconsin, and
    transportation decisions made inside the Beltway too often lead
    to dollars flowing out of my state and other states.

                                  great lakes

        In Wisconsin we also take issue with your Coast Guard
    budget. As you know, the Coast Guard plays a vital role in the
    economy of the Great Lakes. One-hundred eighty million tons of
    iron, ore, coal, grain, and timber are shipped through the
    lakes each year.
        We are also the home of Marinette Marine where you had a
    chance to visit last year. Marinette is an important employer
    from my state as well as an important past and future
    contributor to the Coast Guard's safety mission. So the
    Administration's proposal to collect user fees on Coast Guard
    activities targets a critical piece of our economy.
        We all want to keep the books in balance, and we have
    rejected this idea in the past, and it is my hope that we will
    do so again this year. The economic and safety implications are
    simply too great to do otherwise.

                          airport improvement program

        Mr. Secretary, let me also mention that while we in
    Congress must pass the Airport Improvement Program, AIP, it is
    my hope that we will then work together to secure a generous
    appropriation for AIP, one that is more than the Administration
    requested. Seventy percent of Wisconsin's airport improvements
    are threatened by delays in AIP funding. Further reductions
    would only add insult to injury and threaten critically needed
    improvements.
        Let me close by simply urging that, as in all funding
    decisions, we pay for transportation in a balanced manner and
    one that does not unreasonably favor highway or transit over
    Amtrak, airports, or the Coast Guard. All the transportation
    pieces are important. I hope we can work together to craft a
    balanced, cost-effective, and responsible bill.
        Secretary Slater. Thank you, Mr. Chairman.
        Senator Shelby. Mr. Secretary, your written statement will
    be made part of the record in its entirety. And, if you would,
    sum up your statement in time for us to ask you questions.
        We appreciate you, again, being here. You may proceed as
    you wish.

                         statement of secretary slater

        Secretary Slater. Thank you, Mr. Chairman, and to members
    of the Subcommittee.
        I want to thank for the opportunity to testify before you
    today, to hear of your concerns, and to begin the process of
    working with you to provide a record level of funding for
    transportation infrastructure. As many of you have noted
    through your many, many examples, transportation is about more
    than concrete, asphalt and steel, it is about people. It is
    about this Nation's economy. It is about how we invest our
    transportation dollars to rebuild communities. It is about
    keeping America moving.
        A record $50.5 billion budget we have proposed for fiscal
    year 2000 will be vital to keeping America strong as we move
    into a new century and a new millennium. As the President
    stated in his State of the Union address, how we fare as a
    Nation far into the 21st century depends on what we do as a
    Nation today.
        And I can think of no better discussion for focusing on the
    Nation's future than our discussion about the importance of
    transportation as we move into a new century, and a new
    millennium, and as we seek to secure our place in the
    international marketplace.
        The fiscal year 2000 budget helps to set the course for
    investment to ensure that we have a transportation system that
    supports our needs in a new century, but that also enhances and
    undergirds our dreams, hopes, and aspirations as a country for
    the new millennium.
        It is a budget not just about funding concrete, asphalt and
    steel, but it is a budget that speaks to the interests, needs,
    hopes, and aspirations of the American people. Those needs are
    addressed by the Department through our strategic plan which
    you, as Members of Congress, have recognized as the best in
    government. There, you recall, we focus on safety as our top
    transportation priority. Many of you have spoken about safety
    concerns this morning, and we will come back to those as we
    respond to your questions specifically.
        But also the issue of mobility, economic growth,
    environment and security. Our strategic plan focuses on this
    collection of goals as well. What I would like to do in summary
    fashion is to speak to all five, though rather briefly, so that
    we can begin the process of questions and answers.

                              safety and security

        Our efforts to improve transportation safety and security
    are measured in terms dear to all of us, the lives we save. Our
    fiscal year 2000 budget includes a record $3.4 billion for
    transportation safety, an 8 percent increase above the levels
    of our current budget. These resources will be used to increase
    critical highway, rail, maritime and aviation safety programs.
        Many of you have talked about our ability to move 615
    million passengers throughout our skies, but also about the
    growing gridlock. Many of you have talked about the importance
    of road construction and its relationship to safety. All of
    these factors will be addressed in our proposed budget of $3.4
    billion for transportation safety.
        I also took special note of the fact that many of you said
    that we have done a good job--and note that I say we because I
    am fortunate to have a great team with me at the Department of
    Transportation. Just yesterday we concluded a very successful
    national conference on transportation safety, working with
    industry and also with many members of Congress who appeared
    before us. All of us made a commitment to safety and noted that
    it would be a promise that we would keep together.
        Last year, as you know, nearly 42,000 Americans died on our
    roadways. Highway crashes are the leading cause of death for
    all individuals ages 6 through 27. Surgeon General Satcher came
    by and was with us for the conclusion of our historic
    commitment to work together better and underscored the
    importance of our work in that regard.
        Also, today seat belts save about 10,000 lives annually.
    And we hope through these resources to increase that number.
    Last Saturday many of you will recall that the President
    announced a new requirement for universal child safety seats
    making it easier for parents to secure in a more simplified
    manner our most vulnerable and our most precious passengers,
    our children. And so, again, these investments help us in that
    regard.
        The 2000 budget includes additional funding for programs to
    increase seat belt use to 85 percent by the year 2000. That is
    a goal that we share with the President and that we share with
    all of you. Annually over 5,000 people died in crashes
    involving heavy trucks, and I hope over the course of this
    morning's session we can talk about new work that we hope to do
    with you to address this question as well as bus safety.
        And I know, Senator Lautenberg, you and I have talked about
    this issue in particular. I have recently asked former U.S.
    Representative Norm Mineta to help us working with others to
    review our motor carrier safety programs and to submit the
    findings to me by late spring so that, again, we can work with
    all of you in this regard.
        All of you know that we have our FAA safe skies initiative
    and that last year we had zero crashes involving U.S.
    commercial carriers. We have $1 billion in safety resources for
    the FAA.

                                    mobility

        As relates to mobility, a record $36 billion is requested
    for infrastructure investment. That includes significant
    dollars for highways as well as transit, roughly $6.1 billion
    for transit.
        Also, I think it appropriate to note a phrase by former
    Secretary of Transportation John Volpe, who mentioned that no
    one mode of transportation can solve all of our Nation's
    transportation problems. Many of you in your comments have
    related the need to focus on all modes of transportation. We
    look forward to working with you in that regard.
        As relates to aviation, $8.4 billion in FAA operations and
    modernization efforts. We hope to have more discussion with you
    about that. Amtrak, $571 million. I think we are doing well
    with Amtrak. Record level ridership, record level resources
    last year, improved on-time performance, but we must do better.

                                      y2k

        Y2K. I know that the Senate had an important hearing on
    that earlier this week. We will meet our obligations to you and
    to the American people in this regard. John Koskinen is leading
    a significant effort on the part of the entire Administration.
    But we have been told by the President and the Vice President
    that we in our departments have responsibility for working with
    industry and working with you to ensure that we meet our
    challenges here.

                           economic growth and trade

        Economic growth and trade. Just a few more comments and I
    am done. The importance of transportation to our economy is
    becoming clearer with every increase in jobs, every increase in
    the economic prowess of this Nation. You have mentioned the
    longest peacetime economic expansion in the history of the
    country.
        Well, about 30 percent of our economic growth has been
    related directly to international trade, and our transportation
    system is giving us the ability to reach markets around the
    world. But we are not only concerned about untapped markets
    around the world. Through our Access to Jobs program that you
    have helped us with, we are investing $150 million to help
    people make the transition from welfare to work. We want to
    continue to work with you in that regard.

                         human and natural environment

        The environment. Our budget includes $3.9 billion for this
    purpose, a 13 percent increase. We believe that we can make our
    communities more livable. That is at the core of our livability
    agenda, and we look forward to working with you in that regard.
    It includes about $1.8 billion for the CMAQ program. It also
    increases our Transportation and Community and Systems
    Preservation Pilot program.

                               national security

        And I conclude on national security. Our national security
    goals include the protection of our transportation system which
    is the tie that binds us all together and binds us with the
    world. In fact, last January the Coast Guard, which many of you
    have mentioned, demonstrated their important role as it relates
    to our national security with a major seizure of cocaine, one
    of the five largest seizures in the history of the country, an
    amount over 5 tons that could actually provide one dose for
    every child in America. Because of their efforts, we prevented
    the flow of those drugs into the main streets of America.
    Again, I appreciate all that you say about the work that we
    have done.
        But as the President said in his State of Union address,
    this is not a time to rest, but a time to build. Many of you in
    your questions note the fact that we have done many things
    together. But the future is bright and there are many, many
    things we have yet to do.

                               prepared statement

        I and the members of my team look forward to doing those
    good things with you. So, again, thank you for the opportunity
    to be before you this morning.
        [The statement follows:]

                Prepared Statement of Secretary Rodney E. Slater

        Mr. Chairman, Members of the Subcommittee. Thank you for the
    opportunity to testify today in support of the Department of
    Transportation's (DOT) Budget for fiscal year 2000.
                                    overview
        The record $50.5 billion budget we have proposed for fiscal year
    2000 supports the powerful intermodal transportation network that is
    vital to keeping America economically strong. It builds new frameworks
    as well as advances those we have put in place to support President
    Clinton's and Vice President Gore's vision for the future of our
    country.
        Over the last two years, we at the Department of Transportation
    have worked diligently to become a visionary and vigilant organization
    that casts its vision not only for the next three years, but for the
    next thirty. We must make decisions now to provide a policy
    architecture that will lead to a transportation system that will meet
    America's needs in the 21st Century.
        The fiscal year 2000 budget continues our effort to set the course
    for investment to assure that we have a transportation system that
    supports our hopes and dreams for, and as important the needs of, the
    country in the next century and the new millennium. It is a budget not
    just about funding concrete, asphalt, and steel, but about meeting the
    infrastructure and human needs of America. We value life, so we must
    enhance and improve transportation safety and security. We as a nation
    value mobility, so we must provide for it efficiently and
    intelligently. Like those before us who saw the promise of rail and
    aviation, we have the opportunity--and the responsibility--to assess
    transportation needs for the future and to address them in our time.
        As President Clinton said in his State of the Union address, ``how
    we fare as a nation, far into the 21st century, depends on what we do
    as a nation today.'' Today, we have a safer--a more efficient--and a
    more environmentally-sound transportation system. But, as the President
    said, this is not a time to rest, but a time to build. He described
    some of the challenges we must be ready to meet in the 21st century:
      --an aging population--with new mobility needs;
      --a greater need for quality education--to support transportation
            systems which increasingly rely on technology--and to build a
            transportation work force for the 21st century;
      --the need to strengthen families and communities--important when
            lengthy commutes already fray family ties;
      --a truly global economy--with growing demands for more efficient
            worldwide transportation links; and
      --new challenges to peace and security--as terrorism can strike
            targets once thought secure.
        As a truly visionary and vigilant Department of Transportation, we
    stand ready to do our part in meeting these challenges by creating a
    transportation system for the 21st century--one that is international
    in reach--intermodal in form--intelligent in character--and inclusive
    in service.
                      a 21st century transportation system
        To ensure a national transportation system that meets 21st Century
    demands, we must build upon the great network that we have today. Our
    five strategic goals to improve the nation's safety, mobility, economic
    growth and trade, environment and security form the basis for us to
    achieve such a truly integrated transportation system.
        America's transportation system is the circulatory system of our
    economy. It touches every one of us every day. Interruptions in any
    part of the system affect thousands of people instantly--Americans have
    come to expect their transportation system to work for them, and justly
    complain at the slightest interruptions. The economy grows and works
    best when there are no impediments to goods and people getting where
    they must--thus an economy that works for all Americans depends on a
    transportation system that is safe and serves all areas of the nation
    efficiently. I am convinced that better linkage of our transportation
    system, probably in ways we haven't even dreamed of today, will be
    critical to meeting our needs in this global economy. America's future
    success as a global competitor depends on whether we can move goods
    from U.S. factories to world markets efficiently, reliably and
    securely.
        Transportation becomes a part of every good and service produced in
    the economy, and the mobility it provides is an essential ingredient of
    daily life. These benefits, however, come at a cost measured not only
    in dollars. Because of the enormous scale of transportation in the
    United States, the toll in terms of transportation fatalities and
    injuries, oil consumption and imports, and air and water pollution is
    high. We must use the system's existing capacity more intelligently and
    focus on eliminating its negative impacts. For example, the safety
    activities we conduct in the highway, rail, maritime and aviation areas
    focus on improving vehicles and addressing human behavior. For
    pipelines, our focus is on preventing damage to underground facilities
    through better excavation practices, and improving communication
    systems and location capabilities.
        Many transportation fatalities are preventable. They occur when
    people do not buckle up or use life vests, or because they drink while
    driving or boating. America's seat belt use rate, while on the upswing,
    continues to lag behind that of other countries. Because of the lethal
    consequences, and the opportunity for improvement, additional funding
    is requested for programs to increase seat belt use to 85 percent in
    2000, the President's goal.
        Transportation accessibility has grown considerably in the past 30
    years. Construction of the Interstate Highway System and airline
    deregulation have made it possible for all Americans to travel
    thousands of miles across this country easily. Implementation of the
    Americans with Disabilities Act has broadened transportation
    opportunities for disabled Americans, but work still remains to further
    these efforts as we move toward the millennium. The Vice President
    recently announced a program to encourage families to buy homes close
    to mass transit. The transportation system needs to be further
    broadened to support welfare reform by providing transportation from
    poverty-stricken neighborhoods to areas of job growth--often suburban
    locations. It is our responsibility to continue the expansion of
    transportation opportunities to those who do not have adequate access
    today.
        Just as we were able to shape surface transportation for the 21st
    Century with passage of TEA-21, we have the opportunity to shape
    aviation's future with a comprehensive reauthorization of aviation
    programs this year. Our aviation reauthorization proposal, submitted
    last month, reflects our core objectives of improving safety and
    efficiency, expanding system capacity, enhancing competition and
    access, assuring stability in financing, and improving rural air
    service.
                   transportation investment achieves results
        We all should be proud of the great strides made in transportation
    infrastructure investment. We've invested in our transportation
    infrastructure to make our system safer and better able to handle the
    traffic generated by our growing economy. As a result, the condition
    and performance of our nation's key bridges and highways has improved.
    And we have opened over 100 miles of new rail transit service since
    1993. We are investing a record $36 billion in infrastructure
    investment--an amount that is 72 percent above the average of the first
    four years of this decade--in fiscal year 2000 to continue this
    progress.
        We at DOT have also worked to improve the management of the
    Department, as I know you heard about last week at your hearing with
    Assistant Secretary Basso and Inspector General Mead. The size of the
    DOT workforce is almost 10 percent smaller today than it was in 1993,
    with the reduction reflecting the priorities of the Department in a
    changing transportation climate. In order to keep our air traffic
    controller and maintenance technician workforce growing to handle
    safely the ever increasing demand for air travel, more dramatic
    downsizing occurred in the rest of the Department, primarily by
    restructuring administrative and oversight activities as recommended by
    the National Partnership for Reinventing Government (NPR). We are
    working smarter by eliminating bureaucratic impediments and focusing on
    serving our customers. Through our ONE DOT initiative, the Department
    is developing creative, common sense, intermodal solutions to every-day
    transportation problems. These solutions can be as simple as
    encouraging people to buckle-up when they leave the airport and enter
    our highways.
                     looking at the new challenges we face
        The Department has looked anew at the challenges our transportation
    system faces in the 21st Century and taken stock of the adequacy of the
    system to meet those challenges. The funding increases we request are
    critical to address key safety, mobility, economic growth and trade,
    environment and national security efforts. A major part of our funding
    proposal is to dedicate the $1.5 billion increase in funding due to
    higher than expected motor fuel tax receipts to our top priorities of
    improving safety, air quality, transit services including access to
    jobs, and research.
        Also, the Department is actively addressing the year 2000 problem.
    First, we continue to make progress in fixing our internal systems. In
    February we reported to the Office of Management and Budget that 53
    percent percent of our mission-critical systems were compliant.
    Additionally, 98 percent of the remaining systems that required repair
    have now been fixed. Of the systems we have fixed, testing is now
    completed for 79 percent of them. Based on these numbers, I expect to
    see a significant increase in compliant systems we report during the
    coming months. I also expect that all of our contigency plans will be
    completed and fully tested. Furthermore, the Department is actively
    working with the transportation industry domestically and
    internationally. We are assessing readiness, sharing best practices,
    looking for ways to eliminate obstacles to bringing systems into
    compliance and providing status information to the American people.
    Domestically we are seeing progress but remain concerned about
    international efforts. There is still a great deal of work to be done,
    but many dedicated men and women in the Department are working long
    hours, without complaint, to complete this critical work. We intend to
    be ready for the new millennium.
                                     safety
        Safety is our top strategic goal--our North Star--and our
    transportation system's performance reflects the strength of this
    commitment. While our transportation system helps move America forward
    economically, we must continue doing all we can to make sure America is
    moving safely. This is true whether people are moving on our roads,
    transit systems, railroads, waterways or in our skies. The most serious
    unintended consequence of transportation is its impact on public health
    and well being. DOT safety programs are designed to help reduce
    transportation fatalities, injuries and property damage.
        Travel has become safer in the past six years:
      --highway injury and fatality rates are at all-time lows;
      --the Coast Guard saves a life every two hours;
      --we have seen double-digit decreases in rail fatalities over the
            past two years; and
      --last year, for the first time in history, no scheduled U.S. air
            carrier suffered a fatal crash.
        The President wants to enhance this progress even as our economy
    expands and travel grows. We propose to increase DOT safety funding to
    $3.4 billion, 8 percent over the fiscal year 1999 level.
        Just yesterday, we concluded a successful national conference on
    transportation safety which served to focus our attention and vision to
    the development of a national safety action plan. As was recognized at
    the conference, we have to do better and we created an action plan to
    assure that we do better!
        Since most transportation deaths occur on our roads, we must
    continue making them safer. We are extremely troubled by the fact that
    63 percent of the motor vehicle occupants who died in traffic crashes
    last year were not buckled up, and almost 60 percent of the small
    children who died in traffic crashes in 1997 were not in safety seats.
    Unquestionably, the best way to save lives and prevent injuries on the
    road is for each and every one of us to use a seat belt and to protect
    our children by properly securing them in safety seats and keeping them
    in the backseats. Traffic safety must be an area of even more emphasis
    in the years to come since, with demographic and economic trends, the
    problem will worsen unless the Federal government and our State and
    local partners take aggressive action. That is why we propose to raise
    NHTSA spending by 12 percent, to $404 million, and FHWA safety funding
    to almost $900 million. This expenditure would support strategies that
    work:
      --tough laws against drunk driving;
      --expanded use of seat belts and child safety seats;
      --safer road designs; and
      --new technologies.
        Ensuring safe motor carrier transportation is a critical part of
    our overall efforts to improve highway safety. Healthy economic growth
    and logistical innovations like ``just in time'' delivery have spurred
    significant increases in truck travel and have been a boon for the
    trucking industry. But while the motor carrier fatality rate has
    decreased significantly--from 3.7 per 100 million vehicle miles
    traveled in 1989 to 2.8 today--the number of large truck crash
    fatalities has increased from 4,462 in 1992 to 5,355 in 1997, and the
    fatality rate has not decreased significantly over the last few years.
    This is unacceptable and we are making the changes necessary to reduce
    deaths and injuries.
        Federal motor carrier safety programs must be more focused and
    strategic, and channel resources to strategies that give us the highest
    payoff in reducing crashes. The fiscal year 2000 budget includes a
    total of $160 million, five percent above fiscal year 1999, for motor
    carrier safety programs, with special emphasis on creating a
    performance-based motor carrier program. The Inspector General
    recommended that FHWA replace its system for prioritizing carriers with
    a system that defines problem carriers based upon on-the-road
    performance. In response, FHWA implemented what is known as SafeStat
    risk assessment criteria, a more results-oriented, performance-based
    algorithm for the identification of ``high risk'' motor carriers in
    order to get best results from on-site compliance reviews. While the
    system isn't perfect, it is much better. We still need to work to get
    more complete and timely information.
        FHWA is also making progress in nation-wide implementation of its
    Performance and Registration Systems Management (PRISM) program, with
    20 states expected to be PRISM participants by the end of fiscal year
    2000. PRISM uses safety data to identify carriers that are prone to
    accident involvement--thus allowing FHWA and the states to focus on
    unsafe carriers. In addition, FHWA will be increasing its inspection of
    trucks near ports of entry and stepping up the data exchange between
    the U.S. and Mexico to increase the level of safety for trucks entering
    the U.S. from Mexico.
        However, recent events show that we must be ever more vigilant when
    it comes to motor carrier safety. That is why the Department has
    created a ONE DOT motor carrier safety team, including FHWA, NHTSA,
    OST, and other DOT units, to identify ways to improve motor carrier
    safety, in conjunction with an independent review of motor carrier
    safety led by former House Public Works Committee Chairman Norman
    Mineta. Whatever the rates or trends, 5,000 deaths per year is an
    unacceptable number. We intend to take all steps necessary to break
    through this plateau, and then continue to reduce the numbers as well
    as the rate.
        We also propose a billion dollars--a 7 percent increase--for
    aviation safety programs. This includes the Safer Skies initiative that
    Vice President Gore announced to reduce aviation fatalities by 80
    percent within a decade. Under this initiative, special teams of
    technical experts will zero in on the leading causes of crashes,
    fatalities and injuries so we can prevent them before they happen.
        Even though safety on our railroads has improved, the amount of
    freight traffic handled by our nation's railroads has increased
    (revenue ton-miles have risen by more than a third since 1990) and we
    must remain vigilant regarding our safety responsibilities. $132
    million, 38 percent above this year's level, is proposed to continue
    and expand upon our rail safety research and programmatic efforts,
    bringing together rail labor, management and DOT in a collaborative
    effort to determine the root causes of systemic railroad safety
    problems.
        There are many dramatic examples of the Coast Guard's efforts to
    save lives at sea and, in fact, one life is saved every two hours by
    the Coast Guard. The fiscal year 2000 request includes $909 million, 6
    percent above this year, for Coast Guard to continue and expand its
    search and rescue capability, by acquiring equipment that can operate
    in heavy weather, better detect those in distress, and better protect
    crewmen.
                                    mobility
        In order to reach our strategic goals we must promote a
    transportation system that is not defined solely by mode of
    transportation (highway, rail, air, sea), but rather by our ability to
    reach the places we need to go efficiently and economically. As former
    Transportation Secretary John Volpe said, ``no one mode of
    transportation will ever solve our transportation problems.''
        The transportation solutions of the past--build more roads, bridges
    and airports--can no longer be our first choice to give Americans the
    mobility they need. It's too expensive and too damaging to our
    communities and our environment. Instead, we must manage our
    transportation system better, and make more efficient use of our
    existing system. For example, automated strategic planning aids enable
    our air traffic system to handle double the number of planes it could a
    generation ago. As a nation, we should support those nascent efforts
    that will lead us to the mobility solutions of the next 40 years.
    Development and research of new technologies to serve the future of
    rail and aviation, such as maglev and free flight, are critical to such
    efforts and are proposed in this budget.
        Support for our existing mobility programs, such as those
    reauthorized in TEA-21 and the Amtrak bill, is also crucial. The record
    levels of highway and transit infrastructure investment proposed in
    this budget are critical to keep us on our path of rebuilding America's
    infrastructure.
        The Federal-aid Highway obligation limitation is proposed at $27.3
    billion, almost 7 percent above the current level. This includes
    funding for new innovative programs that leverage funding and expand
    capacity, such as the $81 million proposed for Transportation
    Infrastructure Finance and Innovation Act, which could leverage up to
    $2.7 billion in project funding, and the $271 million proposed for the
    Intelligent Transportation System Program, which will help expand
    existing capacity with technology.
        The $6.1 billion requested for transit programs in fiscal year 2000
    reflects our commitment to transit programs across the nation and to
    maintaining a balance of funding between highways and transit. We have
    requested funding for 7 additional new full funding grant agreements.
        The $571 million we request for Amtrak capital funding reflects a
    continuing commitment to the financial plans and the long term success
    of Amtrak and will enable Amtrak to invest strategically in capital
    equipment and infrastructure. Such investment is key to improving on-
    time service, increasing revenues, and reducing operating costs.
        Last year Amtrak ridership increased substantially. This shows that
    many Americans continue to want intercity passenger rail
    transportation. The combination of cost savings, revenue generation,
    and capital support proposed in the President's Budget is essential if
    Amtrak is to achieve eventual operating self-sufficiency. As a member
    of the Amtrak Board, DOT will work to ensure that Amtrak continuously
    reviews, amends and implements programs and practices that improve its
    revenue situation and reduce its operating costs. However, it must be
    made clear that we see the need for continued capital appropriations to
    Amtrak in the foreseeable future. The definition of capital is proposed
    to be broadened, consistent with the definition used for transit.
        The $1.6 billion requested for airport grants, when coupled with
    our proposal to permit airports to raise additional funding through
    airport passenger facility charges and combined with other revenue
    sources available to airports, provides record level funding to meet
    airport infrastructure investment needs. For modernization of our air
    traffic control system, $2.3 billion is proposed, 11 percent more than
    current levels. This funding will be used to further reduce the number
    of outages and delays and to maximize the use of our airspace.
        In order to continue its capital modernization efforts, we request
    $350 million for Coast Guard assets. This includes $44 million to
    continue the deepwater recapitalization analysis begun this year, so
    that Coast Guard can modernize its deepwater assets in the most
    efficient and least costly manner.
                           economic growth and trade
        The economy is about jobs and a better standard of living for all
    Americans. The economy grows and works best when there are no
    impediments to goods and people getting where they must go. Thus, an
    economy that works for all Americans depends on a transportation system
    that is safe and serves all areas of the nation efficiently.
        Our investment, and the nation's economic performance, are making a
    difference in people's lives. We have the lowest welfare rolls in 30
    years. But, in spite of this success, the President recognizes that
    welfare recipients still face barriers: people can't go to work if they
    can't get to work. Our budget requests $150 million, double this year's
    amount, for the Job Access and Reverse Commute Program to help people
    make those crucial links through transit and alternatives such as
    vanpools to get to where the jobs are. This is essential to support the
    Administration's welfare-to-work goals and economic growth in our low-
    income workforce.
        Our budget request supports economic growth and trade, not only
    through infrastructure improvements and a commitment to growing the
    future workforce, but also through a record $1.3 billion, 40 percent
    more than today, for research and technology. Our research and
    technology priorities include the development of new technologies that
    will keep America competitive, improve safety, and reduce
    transportation's impacts on the environment.
        In an effort to increase efficiency and global competitiveness, the
    Department will continue to pursue its policy of Open Skies, seeking to
    establish free markets for air commerce between the U.S. and other
    nations of the world. In 1998, the U.S. more than doubled the number of
    Open Skies agreements.
                                  environment
        Transportation makes our communities more livable, enhancing the
    quality of our lives and our environment. However, transportation
    generates undesired environmental consequences, such as pollution. The
    fiscal year 2000 budget includes $3.9 billion for DOT environmental
    programs, 13 percent above the current year, to support several
    programs and initiatives aimed at reducing air and water pollution,
    preserving wetlands and open space, and making transportation
    facilities more compatible with the environment.
        We recognize that there doesn't have to be a conflict between
    mobility and prosperity on the one hand and a healthy environment and
    livable communities on the other. In fact, since President Clinton took
    office, air pollution contributed by cars and trucks has dropped by 11
    percent, even with travel growth of 7 percent. And, while negative
    impacts are unavoidable, we are replacing two-and-a-half acres of
    wetlands for every acre lost to highway construction--better than
    double the rate of a decade ago.
        As the Vice President said in announcing the Clinton-Gore
    Livability Agenda, ``we can build an America for our children that is
    not just better off--but better.'' The transportation component of this
    agenda includes programs that enhance our transportation alternatives
    and improve transportation planning.
        To aggressively implement this agenda, a record $6.1 billion, as
    already mentioned, is proposed for transit programs and a record $1.8
    billion is proposed for the Congestion Mitigation and Air Quality
    Improvement (CMAQ) Program. The CMAQ Program was reauthorized in TEA-21
    and changed so that air quality maintenance areas are eligible for CMAQ
    funding. The funding proposed for CMAQ includes $341 million directed
    from Revenue Aligned Budget Authority. This will help communities
    continue the activities that helped them reach and maintain healthy air
    standards.
        Our budget also doubles the funding provided to the Transportation
    and Community and System Preservation Pilot Program, so communities can
    develop smart-growth plans to combat congestion and sprawl.
        Additional funding is also requested for the Advanced Vehicle
    Program, DOT's contribution in the effort to develop clean, fuel-
    efficient vehicles for the new century. Programs like these are crucial
    to building a transportation system that meets the needs of future
    generations.
                               national security
        DOT plays a critical role in ensuring that the U.S. transportation
    system is secure, that U.S. borders are safe from illegal intrusion,
    and that the transportation system can meet national defense needs in
    time of emergency. In addition, the Coast Guard continues to perform
    four specific national security functions in support of the Department
    of Defense (DOD); these include defense readiness, support of
    commanders in chief operation plans, domestic support of critical ports
    and waterways and the specific functions spelled out in an agreement
    with DOD. A total of $1.5 billion is requested for DOT national
    security programs.
        National security is a key transportation mission, and we have
    carried it out most effectively, producing measurable results. For
    example:
      --During the last two years we've seen record seizures of illegal
            drugs by the Coast Guard. In January, I joined Coast Guard
            officials in Houston after they had seized nearly five tons of
            cocaine from a ship intercepted on the high seas. This was one
            of the largest seizures on record, keeping drugs off our
            streets and out of our schools.
      --Even though it's not funded by this Subcommittee, the Maritime
            Administration's sealift capacity for defense purposes grew by
            30 percent last year alone, thereby enhancing our readiness
            posture.
        These efforts have helped increase the security of our nation. The
    fiscal year 2000 budget continues these programs.
        A total of $566 million is requested for Coast Guard drug
    interdiction programs, enabling us to improve our performance over the
    1999 level and accelerating progress towards the 2002 interdiction goal
    in the National Drug Control Strategy.
        As international travel continues to grow, we must remain vigilant
    in our efforts to prevent terrorism, and to protect Americans and our
    visitors as well. For fiscal year 2000, the budget requests $100
    million for the FAA to continue to support and purchase explosive
    detection equipment to be deployed at our nation's airports.
                                   conclusion
        I believe firmly that our goals for transportation in the next
    century can only be achieved by making sure our transportation system
    remains healthy and able to serve, and that it does not obstruct--
    through want of resolve or resources--the safe and efficient movement
    of people and goods throughout this land and abroad. We are at a point
    in time where we can imagine a new and better world, and we must act to
    make such a world a reality. Our successes should be the result of our
    own talents and our own hard work, our ability to meet the challenges
    we face, and to take advantage of the opportunities we find. DOT's
    fiscal year 2000 budget request, is, I believe, critical to that end.
        I look forward to working with this Subcommittee and the entire
    Senate and House to pass a forward-looking transportation
    appropriations bill that moves us into the 21st Century.

                             national speed limits

        Senator Gorton. Thank you, Mr. Secretary. I gather it is
    the custom of the chairman of this subcommittee to engage in 8-
    minute questioning rounds. And so I will follow his custom and
    start, Senator Lautenberg, with you.
        Senator Lautenberg. Thanks very much, Mr. Chairman.
        Mr. Secretary, an excellent presentation I thought. Your
    attention to all modes of transportation, I think, is critical.
    We each have preferences at a given time, but principally this
    country, as you said was said by Secretary Volpe, has to solve
    its problems in as many different ways as we have available to
    us with transportation.
        Last May, New Jersey began an 18-month test of the 65-mile-
    an-hour speed limit on certain limited access highways. Since
    then, there has been a 41 percent increase in tickets issued
    for driving faster than 80 miles an hour, and there have been
    395 tickets issued for driving over 100 miles an hour.
        Now, at 100 miles an hour, you get from one end of my state
    to the other very quickly, I must say. You have to start
    braking when you get to about Delaware. [Laughter.]
        The crash at these speeds would be horrific. Do higher
    speed limits encourage even higher speeds as our experience in
    New Jersey suggests? Is that the general result? And the
    relationship between higher speeds and motor vehicle deaths,
    that higher speeds results in more highway deaths?
        Secretary Slater. Senator, you make a very good point. As
    you know, we removed the national speed limit in 1995 with the
    passage of the bill authorizing the National Highway System. At
    that time there was clearly some concern that raising the speed
    limit would result in more injuries and more deaths on our
    roadways. And at that time we were all already concerned about
    the roughly 42,000 people that we lose on our roadways annually
    anyway, notwithstanding any increase in the speed limit.
        We have had now roughly 3 years or so to make an objective
    assessment of whether there is an incidence of increased
    injuries and fatalities as a result of the increased speed
    limits, and we have found that there is, in fact, some
    correlation. Now we continue to study the matter.
        We also take advantage of a report that was done by the
    Insurance Institute which suggests that the increase is
    probably in the neighborhood of about 15 percent. Our figures
    show an increase in fatalities at about 9 percent. So we are
    trying to compare the two studies and get a more accurate
    count. We are also working with state and local governments in
    this regard. But it is clear that the increase in speed limit
    has resulted in an increase in fatalities and injuries on our
    roadway.
        Now, there are a number of things we can do. Enforcement,
    also educating drivers that really safety is a promise that we
    do have to keep--make and keep together. There is the
    responsibility that we all share with other individuals with
    whom we share the roads. And so we are going to use our
    increased resources and safety to increase education and to
    also work with the law enforcement community to increase law
    enforcement.

                               drunk driving laws

        Senator Lautenberg. Last year, the Senate voted to save
    lives with an amendment to the 6-year highway bill calling for
    a national drunk driving standard of .08 blood alcohol content.
    Unfortunately, the amendment was dropped during conference
    negotiations for TEA-21.
        In the absence of a national standard, can we achieve
    another approach to the goal of .08 nationwide?
        Secretary Slater. We did, I think, fight a good fight last
    year in an effort to make the national standard for determining
    drunk driving that of .08 which would be the same, frankly, of
    most industrialized countries. Some, France in particular,
    actually has a drug alcohol content level that is lower.
        But it was an effort that was not successful in that we did
    not put in the laws a permanent and clear national standard for
    the blood alcohol content level at .08. We did, though, working
    with the members and also working with the safety community,
    provide significant incentive resources that will allow us to
    work with states encouraging them to move to the .08 standard.
        And the .08 standard was specifically mentioned in the
    legislation and that was good. As I recall, I think the amount
    was about 500 million dollars. I am not sure. But that is quite
    significant. We have been working with a number of states in
    that regard.
        Let me also hasten to say that in 1997, for the first time,
    we saw the number of alcohol-related crashes and fatalities
    drop significantly. It actually dropped from roughly 41 percent
    to about 38.6 percent, which is a significant decrease. And we
    believe that that is the result of a lot of these efforts to
    bring this issue to the forefront of the American people, added
    enforcement and a growing understanding that there is one thing
    to be engaged and to respect one's ability to engage in social
    drinking, if you will. There is another thing when it comes to
    drunk driving. And I think that the country is becoming more
    and more aggressive in dealing with this issue, and
    appropriately so.

                            crashes involving suv's

        Senator Lautenberg. The SUV, sport utility vehicles, light
    trucks included have become very popular. One third now of all
    registered vehicles account for half of all highway fatalities.
    In crashes between cars and SUV's or light trucks, the car
    loses and it is no match for the larger, heavier vehicle.
        In fact, the fatalities from crashes between SUV or light
    trucks and cars have actually been increasing, and it is a
    worrisome thing. What can DOT do to address the extreme
    differences in size, weight, body structure of the SUV's and
    light trucks and the automobile?
        Secretary Slater. Well, once again, Senator Lautenberg,
    your question deals with a matter of safety. I want to state
    that we appreciate our relationship with all of the members,
    you in particular, in dealing with matters of safety. That is
    the No. 1 priority as stated by the President when it comes to
    the business of transportation and the work of the
    Transportation Department.
        SUV's are, frankly, the station wagons of the nineties. As
    you noted, there is great popularity as relates to these
    vehicles. They are being sold in larger percentages than any
    other vehicles on the national scene.
        Because of questions regarding compatibility, which goes to
    the core of your question about the impact and the greater
    likelihood that someone in a passenger vehicle would be injured
    more severely or killed as a result of a crash with a SUV, we
    have been working with the industry on this.
        And recently, especially with the discussion of the new
    Ford Excursion, there has been the recognition that with that
    vehicle, even though it is larger than most SUV's, there is
    that lower bumper guard which makes it as low at that point as
    the height of most passenger vehicles, thus making it more
    compatible. You still have the issue of size and the rigidity
    of the frame of the SUV's, those kinds of considerations.
        But this is one way where we have worked with industry to
    bring about greater compatibility. We continue to work on this
    question. It is an issue that the industry is very concerned
    about, and we hope to continue to find success. We are using
    technology, crash avoidance technology, those sorts of things
    to help us in this area as well.
        Senator Lautenberg. Thank you. We urge you, Mr. Secretary,
    to keep focused on that. We have other questions, Mr. Chairman.
    Perhaps in the next round.

                        revenue aligned budget authority

        Senator Byrd. Mr. Secretary, as I said in my opening
    statement, the TEA-21 law included an important program known
    as Revenue Aligned Budget Authority. Under this program when
    gas tax receipts rise above the anticipated level, the
    guaranteed level of highway spending would increase the
    following year by the amount of that increase. As such, this
    program would provide an additional $1.5 billion in spending
    last year.
        Am I correct, Mr. Secretary, that the TEA-21 law does
    require that this additional funding be spent on highways only?
        Secretary Slater. Well, clearly, Senator, you were very
    much involved in the crafting and construction of that
    legislation and you have got a very good sense of what it
    requires. And we respect that.
        The way we have approached it, though, from the vantage
    point of the Administration, is a lot of the resources will
    actually go to highways. But we continue to try to strike the
    balance, other equities that were a part of the TEA-21
    legislation as well.
        A few examples. The balance between highways and transit.
    Our reconfiguration, if you will, or proposal as it relates to
    the Revenue Aligned Budget Authority is to provide an increase
    in transit that would be comparable to the balance and the
    record level dollars that we were able to make in transit and
    highways as a part of the broader TEA-21 legislation.
        We also seek to focus some of the resources on research
    where we desperately need more focus to improve the quality of
    our roadways as well as transit and other forms of----
        Senator Byrd. Mr. Secretary, you are taking up my time and
    you are not answering my question. Am I correct that the TEA-21
    law requires that this additional funding be spent on highways
    only?
        Secretary Slater. There is probably a disagreement here, I
    think, Senator. And we believe that what we have proposed is in
    keeping with the spirit of the legislation and would like to
    work with you and the members of the committee----
        Senator Byrd. Working with me is not going to be very easy.
    I can tell you that right now.
        Secretary Slater. I sense that, sir, and I respect that.
        Senator Byrd. We like to go by the law that we write up
    here and that the President signs.
        Secretary Slater. That is correct. And he proudly signed
    the TEA-21 legislation. And, again----
        Senator Byrd. He did. And I was there and you were there.
    He made a big speech.
        Secretary Slater. Yes, sir.
        Senator Byrd. So I will go on to my next question for now.

                                use of gas taxes

        Your budget requests that we include language in the
    Appropriations Act and supersede the TEA-21 law and divert a
    substantial amount of these extra gas tax funds to non-highway
    activities including transit funding, special projects in the
    Federal Railroad Administration, transit research and so forth.
    There is even funding directed specifically to a $20 million
    transit project in New York City.
        I am not against these activities, but I must ask the
    following: Are not the gas tax receipts that provide for this
    extra spending deposited in the highway account of the highway
    trust fund?
        Secretary Slater. That is true. But the highway trust fund
    includes also an account for transit. And again----
        Senator Byrd. I understand that. Answer my question,
    please.
        Secretary Slater. I am answering it, sir.
        Senator Byrd. When you said that is true, that answered it,
    did it not?
        Secretary Slater. Well----
        Senator Byrd. Without the ``but.''
        Secretary Slater. There is the ``but,'' though.
        Senator Byrd. But there is not. The gas tax receipts
    provides for this extra spending deposited in the highway
    account of the highway trust fund. It is not the transit
    account. It is the highway account. Since all of these non-
    highway activities that you propose can be funded elsewhere in
    your transportation budget, why did you propose to overrule the
    TEA-21 law and fund these activities from the Revenue Aligned
    Budget Authority program?
        Secretary Slater. Because it was our belief that the way we
    proposed adding additional resources to additional accounts is
    actually consistent with the overall spirit of the TEA-21
    legislation which brings about a balance, a recognized balance,
    in funding for highways and transit and which also, itself, has
    a significant focus on safety and transportation research. And
    those were the areas of focus that we sought to provide
    additional money to as a result of the additional resources
    that come into the trust fund based on the Revenue Aligned
    Budget Authority.
        Senator Byrd. Now I will read you the only programs that
    are authorized to get this highway--and I am quoting from
    subsection C of the Transportation Equity Act for the 21st
    century in section 1106: ``Of the funds to be apportioned to
    each state under Subsection (B)(4) for a fiscal year, the
    Secretary shall ensure that such funds are apportioned for the
    Interstate Maintenance program, the National Highway System
    program, the Bridge program, the Surface Transportation program
    and a Congestion Mitigation Air Quality Improvement program in
    the same ratio that each state is apportioned funds for such
    program for such fiscal year but for this section.
        Those are the only programs that are eligible. I suppose my
    time is up.
        Senator Gorton. You have got a green light. You can go.
        Secretary Slater. Yes, sir. Just continue, Senator.
        Senator Lautenberg. We are interested in your question,
    Senator Byrd.
        Senator Gorton. I am not going to unchain the Secretary
    until you are finished. [Laughter.]
        Secretary Slater. I see. The light is red from where I sit.
    [Laughter.]
        Senator Byrd. Thank you very much.
        Secretary Slater. Thank you, Senator.
        Senator Gorton. Senator Kohl.
        Senator Kohl. Thank you, Senator Gorton.

                              airline competition

        Secretary Slater, as you know the Antitrust Subcommittee,
    of which I am the ranking member, has had a long interest in
    enhancing airline competition and stopping anticompetitive
    business practices by the major airlines. To be sure, not all
    behavior is bad or even illegal, but it seems to me that the
    big airlines have figured out that the way to make money is by
    not competing with each other.
        Instead they sit back and dominate routes in and out of
    their fortress hubs giving them a sort of a monopoly. This is
    not good for consumers. Fares in many places, as you know, have
    gotten out of control. I would like to ask you just a couple of
    questions about how your competition guidelines will work when
    they go into effect.
        First, suppose a new entrant starts a route, say,
    hypothetically, from Milwaukee to Detroit, and then the
    incumbent carrier adds capacity and gives kickbacks to travel
    agents and lowers prices in a way designed to boot a new
    entrant from the market. What will you do, not can you do, but
    under the guidelines what will you do to be sure that this kind
    of predatory activity is terminated?
        Secretary Slater. Well, Senator, let me say thanks for
    adding your voice to the chorus of voices including members of
    the Congress, the Senate and clearly this Administration and
    the American people when it comes to dealing with this issue of
    access to low cost and quality air services.
        Our proposal is designed, first, to encourage some
    discussion about the issue. It is a very difficult issue. As
    you know, roughly 20 years ago the airline industry was
    deregulated. Since that time we have seen a significant
    increase in ridership. We have seen the industry over the last
    5 years enjoy record profits and the like, but we have also
    seen some pockets of pain, and you spoke to many of them.
        With our proposal we are, again, seeking input. We have
    gotten about 5,000 comments thus far. We are analyzing those.
    At the end of the day we will, in fact, alter our proposal
    based on the quality of those recommendations.
        But at present what we propose is a fine. If an airline is
    found to be engaged in anticompetitive practices, we outline
    enforcement action that will be taken. But our objective here
    is not to become a police of the airline industry. It is to
    ensure, as you have expressed appropriately, the desire of the
    American people to have quality access to good aviation
    transportation at a reasonable cost. So it is our desire that,
    working with industry even, we will be able to come up with a
    proposal that clearly outlines those actions that will not be
    tolerated and they, themselves, will police themselves. That is
    our ultimate objective.
        Senator Kohl. Do you think perhaps that we need to look at
    revising our antitrust laws because the rules on predatory
    pricing are too weak or that cases are too hard to prove?
        Secretary Slater. We clearly have not made that
    recommendation at this point because it is our hope that we can
    address the issue appropriately with the guidelines. If, in
    fact, we cannot, then we have had extensive discussions with
    the Department of Justice about additional steps that might be
    taken. And clearly these would be steps that could be
    considered. But we have not, Senator, in all honesty, gotten to
    that point. It is our hope that we will be able to address this
    far short of that.

                              black box technology

        Senator Kohl. Okay. Mr. Secretary, the State Troopers
    Association has contacted me regarding electronic controlled
    module or so-called black box technology in trucks. The
    troopers claim that, just as in airplanes, access to the
    information stored in these black boxes is critical to their
    efforts to investigate crashes and prevent a future loss of
    life on our Nation's roads. The troopers have suggested that a
    standard protocol of information or reporting requirements may
    be appropriate to address their concerns about access--
    balanced, of course, with privacy considerations. It would seem
    that the education and outreach about the benefits of this data
    would also make a good deal of sense.
        Mr. Secretary, what is the current status of the
    Department's work on this area? Will you work with me to make
    sure that the appropriate data is available to law enforcement
    and that the public secures the safety benefits of this
    technology?
        Secretary Slater. Senator, we will work with you and with
    others on this very important matter because it is our belief
    that technology can bring about significant safety benefits to
    the traveling public as well as greater efficiency when it
    comes to the movement of commerce.
        We are looking quite extensively at what we call on-board
    technology which could include a black box but, frankly, it
    could go far beyond that. We are actually looking at technology
    that will not only record information that is provided with the
    black boxes that are, say, used by the airline industry, but
    the technology can also be enhanced to actually monitor the
    alertness of the driver. And many in the private sector in the
    motor carrier----
        Senator Kohl. Just a minute. My understanding is that in
    most cases these black boxes are now available and installed in
    the trucks. The problem is in gaining access to these. These
    black boxes are under the possession of the truck owners.
        What we need to do is to get that access out to state
    troopers to determine the causes of crashes. And we need your
    help in getting access to what is contained in the already
    installed black boxes. Can you help us with that?
        Secretary Slater. I see the nature of your question a bit
    better now. First of all, there are very few trucking companies
    that actually use the black boxes as we speak when you consider
    the family of motor carriers. Those that do argue that they're
    using those for business purposes and that that is a privacy
    matter. We would welcome the opportunity to work with you to
    explore this question but----
        Senator Kohl. In other words, is it true that if the black
    box exists in the truck--and there are many, many more trucks
    than apparently you may be aware that have these black boxes--
    that unless access to that information is available to
    troopers, the information is not of that much value. And we
    need your help again with consideration of privacy matters to
    secure that access.
        Secretary Slater. I understand. Let us say that we would
    welcome the opportunity to work with you. I can tell you it is
    a very difficult issue when it comes to the privacy
    consideration.
        Senator Kohl. I am happy that you are willing to work with
    us on that.
        Secretary Slater. Yes, we will work with you.

                             loran radio navigation

        Senator Kohl. One more question. Under the direction of
    Congress, the Department commissioned an independent report on
    the Loran radio navigation system. As you know, fishermen,
    boaters, general aviation pilots and others currently rely on
    Loran as a navigation tool.
        Secretary Slater. That is correct.
        Senator Kohl. It is my understanding that a draft report
    commissioned by your Department at the direction of Congress
    was submitted in April of last year under the direction of
    Booz, Allen and Hamilton. That report confirmed that the user
    community overwhelmingly--94 percent--supports continuing
    Loran. It has also pointed out that keeping versus shutting
    down Loran would save $291 million, and that keeping Loran
    would provide a critical backup to other navigation aids;
    providing backups was recommended by the 1997 Presidential
    Commission on Infrastructure Protection.
        Mr. Secretary, it concerns me that the Department's budget
    does not include the necessary funding for Loran improvements.
    Considering the draft report findings, how did you come to this
    funding decision and when will the final report on this issue
    be submitted to Congress?
        Secretary Slater. Our objective is to get the final report,
    I think, sometime this summer to the Congress because of the
    significant interest that we have seen in the user community.
    We are reconsidering the position that we took on the matter.
    We do see a benefit.
        Now, at some point we would like to graduate to the use of
    the satellite communications systems. But at this point we see
    some continued value and would like to work with you, Members
    of the Senate and Congress, in continuing to provide this
    service to the user community.
        Senator Kohl. I thank you. I thank you, Mr. Chairman.

                        FAA management advisory council

        Senator Gorton. Mr. Secretary, almost 3 years ago under the
    1996 FAA bill, Congress mandated a management advisory council.
    Why has the mandate been totally ignored to the extent that we
    do not have a single nomination?
        Secretary Slater. It has not been ignored. We have actually
    finally provided the list to the Administration, and we are
    working through the various checks that are necessary when you
    are dealing with potential conflicts of interest and the like.
    And we should have that council announced very, very soon.
        Now, speaking to that question of the management of the
    FAA, I would also hasten to say that I think that we have shown
    significant improvement on that front when it comes to having
    an administration now, an FAA, that is clearly results
    oriented, that is moving aggressively on a number of fronts,
    working closer with the industry, with the Congress, and with
    the traveling public. But, as you have noted, this was a
    legislative mandate, and we are now moving on that and will do
    so very, very soon.
        Senator Gorton. Well, as I listen to people in the
    industry, the general statement about FAA management may be a
    bit exaggerated. I think you are moving in the right direction,
    but there seems to me to be a long, long way to go.

                                 faa user fees

        Now, another question relating to my opening statement. How
    do you justify what amounts to a very large increase in Federal
    charges to airlines and the authorization of a substantial
    increase in local charges to airlines with a dramatic reduction
    in the amount of aid and assistance that is going to be
    provided to them, at least for construction purposes, in the
    budget?
        Secretary Slater. Well, as has been noted, we do propose a
    significant number of user fees. We have been on this course
    and have had some success with the Congress, though not a lot,
    in identifying those areas where you have a unique user
    community that benefits directly from a given service and using
    user fees as a means of providing a predictable, sustained
    means of resources for those services, so as to provide the
    resources to help deal with issues pertaining to modernization,
    improvements in the capital investment in our airports over the
    long term.
        Clearly there are ways that we have done this differently
    in the past. But we just continue to suggest that there may be
    a way of doing it better in the future, and that is why we have
    offered forth these user fee proposals.
        Senator Gorton. Senator Byrd, I got about as responsive
    answer to my question as you did, but an eloquent one
    nonetheless.
        Senator Byrd. I compliment the Secretary. He is very
    smooth.
        Senator Gorton. I have a couple of more local questions
    that I suspect I will get more direct answers to them from the
    Secretary.

                                 sound transit

        Mr. Secretary, when can Sound Transit in my Puget Sound
    area expect to enter into a full funding grant agreement with
    the FTA?
        This Subcommittee and its Chairman are extraordinarily
    generous to me in spite of not having one. But the Committee is
    going to need it pretty soon and Lord knows we do. Can you help
    me out with that?
        Secretary Slater. Yes. Let me just say, first of all, there
    has been significant local support for this program. Actually,
    there is significant state and local support for transportation
    programs occurring across the country and also support for what
    we call smart growth initiatives which I think is central to
    this particular project. We look forward to working with you in
    the near term on getting the funding and the continued support
    from the Federal level to be coupled with what has already been
    manifested at the state and local level to move that project
    forward.
        Senator Gorton. Can you be any more precise on the kind of
    schedule you see for the formal entry of a full funding
    agreement?
        Secretary Slater. I did not want to overstate the case on
    this. We are moving forward very well in the preliminary
    engineering stage. It is our desire to have this pretty much
    concluded by summer with work to begin, hopefully, by the end
    of year.
        Senator Gorton. I thank you for that. That is a precise
    answer and that is a welcome answer. And we certainly want to
    help you in any way possible in reaching that goal.
        Secretary Slater. Thank you.

                              border and corridor

        Senator Gorton. The border and corridor sections of TEA-21
    are separate, of course, but have a single funding source. What
    is the breakdown of the funding of each section, 1118 and 1119?
    How are you determining what that breakdown should be and when
    is implementation due for the current fiscal year?
        Secretary Slater. We are in the process of receiving the
    applications on the program and, hopefully, we will be making
    an announcement pretty soon.
        We decided to actually combine them because they both speak
    to, frankly, the same end, the importance of transportation to
    economic growth, economic vitality whether that is at the
    border or along the trade corridors, many of them actually
    running north and south because of the implications of NAFTA,
    and the fact that most of our interstates actually run east and
    west with all too few connections running north and south.
        Our total budget there, as I recall, is about 140 or so
    million annually, if I am not mistaken. And we do not know just
    yet what the total breakdown will be as it relates to corridors
    as compared to border crossings because we just have not made
    the final decisions. I will say that the total request is in
    the neighborhood of $2 billion.
        Senator Gorton. So you are going to merge the two and try
    to evaluate these $2 billion worth of applications as if it was
    a single application?
        Secretary Slater. That is correct.
        Senator Gorton. I thank you very much.
        We have just finished our first round, Senator Campbell.
    Would you like to make a statement or ask some questions?
        Senator Campbell. With your permission, I apologize for
    being late. I had to chair another committee, Mr. Chairman. As
    a new member, I am delighted to be here and would ask
    permission to submit my opening statement for the record.

                                 sound transit

        Secretary Slater, I had a number of questions concerning
    the Denver RTD and the Department of Transportation. But, I
    think, because I have come right in the middle of this and have
    not heard your statement, I will submit those questions and ask
    if you would send me the answers or responses back at your
    earliest convenience, if you would, so I could pass those on to
    our state.
        Secretary Slater. Yes, Senator. We will do that and gladly
    so.
        Mr. Chairman, can I make one comment. I just got a note
    more specifically on your project.
        We are in the preliminary engineering stage, and that is
    really the stage that has to be completed before we can move
    forward with the work. We do acknowledge growing progress on
    that, and so the timetables are pretty much the same. But I
    wanted to be a little more specific in giving you an assessment
    of exactly where we are, and what we would like to do is just
    stay in touch with you as we go forward.

                              motor carrier safety

        Senator Lautenberg. I just had one question before we hear
    from Senator Byrd. This, Mr. Secretary, because we recently
    discussed it with the IG and other people. The subcommittee had
    some troubling testimony last week when we talked about the
    Office of Motor Carriers and their failure to meaningfully
    enforce the truck and bus safety laws. Among the things we were
    told by the Inspector General, the number of compliance reviews
    conducted by the Federal inspectors have been allowed to
    decline by over 50 percent even while the office's budget has
    grown.
        The office has no safety data on more than 75 percent of
    the interstate bus operators. Now, morale in the office is
    awful, and the trucking industry does not take your enforcement
    efforts at all seriously. How do you react to the IG's
    observations and what is DOT doing, if anything, to dramatize
    strength in the efforts of the OMC?
        Secretary Slater. Well, first of all, clearly we received
    the IG's report with sober reflection. We then started the
    process of reviewing our own activities and, frankly, adding to
    some of the initiatives that we currently have underway--
    greater use of technology, also trying to prepare ourselves
    with state governments in particular when it comes to
    monitoring the movement of trucks along the border and the
    like.
        We have worked with a number of states that have the
    highest incident of motor carrier truck crashes so as to better
    focus our activities in that regard. We have also provided
    additional funding to a number of states in an effort to get
    better data where we have found a higher incidence of crashes.
    So we continue those efforts.
        But, as I noted in my opening statement, because of the
    Inspector General's report and also because of issues that have
    been raised by you and others in the Senate and also Chairman
    Wolf in the House, we are doing a total comprehensive internal
    review of our motor carrier operations that will include buses
    as well because I know we have had some particular trouble in
    the Pennsylvania/New Jersey area just last year where we lost,
    as I recall, about 15 people, which was significantly higher
    than was expected or the case historically.
        That report is being led by former U.S. Congressman Norm
    Mineta. He is supposed to report back to me within roughly 90
    days. That period is clearly far shorter than that now because
    the effort is underway.
        We then will look at those recommendations, take into
    account the recommendations of the IG, work with the Congress
    to improve this program. I personally am committed to it. As
    many of you know, all of you, before becoming Secretary I was
    actually the head of the Federal Highway Administration where
    this was my direct responsibility. And so in this instance I
    feel some responsibility clearly working with Administrator
    Wykle. We also have Administrator Martinez with NHTSA involved
    as well as our overall DOT team. And this, Senator, is an area
    where we, too, have concerns and look forward to working with
    you and with others.
        As I conclude my remarks on this point, I will note this,
    however, and that is we have seen, frankly, a sort of leveling
    off when it comes to the fatality rate as it relates to motor
    carriers. But we have seen an up-tick in the numbers, and that
    is really where you have to have your focus.
        I do not think it is enough for us to come before you and
    say that the rate of fatalities has not increased, that it has
    been level the last 3 or 4 years. That is not enough. We have
    to work with you, the industry and with others to continue to
    take that number down. And that is where we have not had the
    kind of progress that we have to have.
        Also, I could say that this is a good performance where we
    are when you consider that in the last 10 years we have had a
    doubling on our roadways of motor carriers. I think it was
    about 190,000 in 1988 up to 450 or so thousand today. They are
    traveling more. They keep America moving. They are at the heart
    of our economy. But we still have to be mindful of these safety
    concerns. So we do not shrink from this responsibility and look
    forward to working with you, the industry and others in
    addressing the issue.

                                  omc location

        Senator Lautenberg. I will close with this and just ask
    you, is there a question about where OMC is located within DOT?
    Is that something that ought to be looked at because I
    understand there are some concerns there?
        Secretary Slater. That issue has been raised. And I can
    tell you my position is this: that is clearly an issue that has
    to be taken into account in the overall review. But I think
    that we should also broaden the discussion to consider a number
    of issues here regarding funding, management, location, better
    ways of approaching this question with that being only one of
    issues to be addressed and that is what we have asked the blue
    ribbon sort of committee who is reviewing our internal
    operations to consider for us.
        But at the end of the day that, too, will be--and
    justifiably so--one of the issues to be addressed.
        Senator Lautenberg. Thank you, Mr. Secretary. We will
    submit some more questions.

                                 nhtsa funding

        Senator Campbell [presiding]. Mr. Secretary, before we hear
    from Senator Byrd I would like you to take note that I just
    arrived here 10 minutes ago, and I have already ascended to the
    chairmanship. So take care of Colorado. [Laughter.]
        Secretary Slater. Yes, sir.
        Senator Campbell. Senator Byrd.
        Senator Byrd. Mr. Secretary, as a strong advocate for
    highway safety, I am very concerned that the funding for the
    National Highway Traffic Safety Administration has been
    apparently treated in a very cavalier manner. Last year the
    operating budget for this important safety agency was funded at
    $160 million. This year your budget proposes that we cut the
    regular appropriation for this agency by 55 percent down to $72
    million.
        You then ask us to take $120 million of the Revenue Aligned
    Budget Authority that are supposed to be spent on highway
    construction and divert them to reverse the cut that has been
    proposed in the core expenses of the highway safety agency. Is
    not the construction and rehabilitation of highways critical to
    highway safety?
        Secretary Slater. Definitely so.
        Senator Byrd. Why then does your budget insist that we
    choose between the two?
        Secretary Slater. Well, clearly the point is well taken.
    Before the interstate was well on the way, the fatality rate on
    our roadways was about 5.5 for every 100 vehicle miles
    traveled. Today it is roughly 1.6. So clearly the improvements
    in our system, those improvements have had a significant impact
    on the safety of the system itself.
        But our proposal does provide for $125 million of the
    Revenue Aligned Budget Authority to be placed into the NHTSA
    account. That was one of the focuses that we took into account
    once we realized that we were going to have about $1.5 billion
    more. We also earlier in our NHTSA proposal had recommended an
    increase as well to fund research and education programs and
    the like, and about $7 million more for funding our grant
    programs.
        So we have tried to recognize our commitment to safety and
    the importance of NHTSA through recommended increases in its
    budget. It is, I think, appropriate to argue as to whether we
    have done enough. And when it comes to safety, I am not sure
    that you can ever do quite enough because one life lost is a
    tragedy. But we join you in recognizing the importance of NHTSA
    and the importance of investing in its budget.
        Senator Byrd. We are both on the same wavelength in that
    regard. What I am talking about here is you have cut the
    regular appropriation for this agency by 55 percent, down to
    $72 million. Then we will do a little sleight of hand by moving
    $125 million of the Revenue Aligned Budget Authority funds that
    are supposed to be spent on highway construction, and divert
    them to reverse the cut that you propose in the core expenses.
        In every other instance where you have asked us to divert
    these funds, these RABA funds to a non-highway purpose, whether
    for mass transit, rail activities or the Access to Jobs
    program, you have already asked for an increase in those
    programs in your regular budget. The diversion of the RABA
    funds would just make that increase even larger. But when it
    comes to highway safety, you are cutting the safety agency
    severely and then asking us to put the pot right by using these
    RABA funds.
        How should we interpret this kind of budget gimmickry on
    the part of the Administration in terms of your commitment to
    highway safety?
        Secretary Slater. Well, because we view the Revenue Aligned
    Budget Authority recommendation as a part of our overall
    budget, we would hope that you would view it as our
    recommendation that we have a significant increase in the NHTSA
    budget. We would hope that you would see a willingness, again,
    to work with you and the members of the committee and the
    Senate as a whole to ensure at the end of day that is, in fact,
    the case.
        Senator Byrd. That is all my questions at this point.
        Senator Campbell. Senator Bennett, did you have some
    questions?
        Senator Bennett. Thank you, Mr. Chairman. I appreciate the
    opportunity.

                            salt lake city projects

        Secretary Slater, I want to take the opportunity while you
    are here to thank you specifically, individually for your
    support of a number of projects that are vital in my home
    state. Your continued support of the North-South light rail
    transit project is very much appreciated. And I can report to
    you and through you to any interested listeners, the project is
    a year ahead of schedule and appears to be coming under budget,
    two things that are not normally associated with Federal
    projects.
        With regard to the Airport to University extension of the
    North-South project, I should tell you and through you
    Administrator Linton, who came to my office and discussed this
    issue that last evening, the Utah State Legislature and
    Governor Leavett committed $5 million annually for the next 10
    years to cover operating costs of the entire Airport to
    University extension. That was one of the issues that
    Administrator Linton raised with me saying he could not proceed
    unless he was sure that the operating subsidy would be in
    place, and the Legislature and Governor Leavett have stepped up
    to that challenge.
        So we would hope that would remove a major obstacle to a
    full funding grant agreement for the Airport to University
    extension which leads to my question. Can I work with you and
    your Department to secure a full funding grant agreement to
    include funding for the Airport to University extension so that
    the project can be completed prior to the 2002 Winter Olympic
    Games?
        Secretary Slater. One thing I would like to do, Senator, is
    have discussion with Administrator Linton about really what the
    Governor and the Legislature have now done. That is a good
    report.
        Senator Bennett. Subject to my report being accurate is
    what you are trying to diplomatically say.
        Secretary Slater. Not necessarily that. I think that
    clearly we work very closely here together, and I believe the
    figures that you are giving me. I just need to know what other
    demands we might have on the overall program, and I would like
    to visit with Mr. Linton about that before committing to it.
        Now I do know that to the extent that this is all a part of
    the Downtown Loop area, a part of that whole effort, then
    clearly it is within the commitment that has already been made.
    But I just do not want to speak out of turn about going beyond
    that without having a clear sense of whether we can fully keep
    that commitment and would like to just get back with you on the
    details of that.
        Senator Bennett. All right.

                        authorization for salt lake city

        I worked very hard last year to secure budget authority
    both from guaranteed and nonguaranteed funds to support $480
    million in appropriations that are needed to complete the
    Airport to University project before the Winter Games.
        I would ask, if you agree, that Section 3030(a) of TEA-21
    authorizes appropriations sufficient to construct the Airport
    to University project and that section 3030(c)(2)(b) of TEA-21
    also authorizes the appropriation of $480 million for the
    project as well as the $160 million for the other core projects
    that are needed to stage the Winter Games.
        Secretary Slater. Again, Senator, what I would like to do
    is look into it. I know that we were looking at a number of
    aspects of this overall project. The Downtown Loop is what we
    committed to. I know that there was the desire for, as you
    noted, the Airport to University extension.
        Clearly we are pleased to hear about what the Governor and
    the Legislature have done. As you noted, you were quite
    successful in your efforts in getting some resources designated
    for the project as well.
        What we would like to do is just take the new information,
    work with you, the Governor, the Legislature and see where we
    are with the project, the other aspect of the project.
        Senator Bennett. You may give the same answer to this
    question, but I need to have it in the record as part of the
    conversations. Do you agree that the authority provided in TEA-
    21 is sufficient for you to enter into a $640 million full
    funding grant agreement?
        Secretary Slater. There are just other things that are
    necessary----
        Senator Bennett. I understand that. But you do agree that
    we do have that authority in the law?
        Secretary Slater. Well, we have got it authorized.
        Senator Bennett. That is right.
        Secretary Slater. Yes. And there is the real challenge of
    actual appropriations and that is really what we want to work
    with you and your colleagues on as well as the Governor and the
    Legislature.
        The fact that from that end there has been significant
    movement, I think, answers one of the questions that Mr. Linton
    discussed with you, and we just have to start from there to see
    what the distance is yet to be overcome when it comes to
    bringing this project to fruition.
        Senator Bennett. Okay. In June UTA, Utah Transit Authority,
    will be ready to enter a design/build contract that will
    shorten the time needed for construction of the Airport to
    University project. The contract calls for final design to
    begin in June in order to complete the project before 2002. The
    Utah Transit Authority will submit a final environment impact
    statement and an application for the $640 million full funding
    grant agreement before March 15. That is just around the
    corner.
        Will you work with UTA to expedite your acceptance of the
    final environmental impact statement so that a record of
    decision can be secured to expedite your decision on a full
    funding grant agreement before the June deadline? Again with
    all the caveats you have outlined, I want to put you on notice
    as to where the timetable is here on trying to get this done.
        Secretary Slater. Right. I have noticed, Senator, your
    emphasis is on that, and clearly that is appreciated here
    because we are trying to, if we can, do this and other projects
    that we have definitely already committed to, getting those
    done by the Olympics.
        We have recently had a meeting with your local officials,
    Mayor Corradini and her DOT team on this. We do look forward to
    working them and with you as we address this issue.
        Let me also, if I may, take this moment to actually commend
    the Utah DOT and leaders there as we have had significant
    success with the design/build effort underway relating to I-15.
    And, hopefully, if we are able to move forward with the
    resources and with everyone working together, we can see quite
    possibly once again the use of this management approach which,
    as you noted, takes off time and brings about the use of a
    project much earlier at a much more reasonable cost. And we
    commend Utah for taking this kind of approach.
        Senator Bennett. I thank you for that. Again, I thank you
    for your cooperation as we worked through these sometimes
    difficult problems.

                         controversy over the olympics

        I probably should make a statement about the Olympics
    because they are in the news, and the newspaper writers always
    go for the headline and talk about, quote, the scandal in Salt
    Lake City. As our Governor said, I think, very appropriately,
    the problems with the International Olympic Committee did not
    begin in Salt Lake City. But they will end there.
        We are determined to make sure that with the Salt Lake City
    Olympics the atmosphere and culture that borders on extortion
    that has existed in the International Olympic movement will
    stop and that it will be the people of Salt Lake City that see
    to it that that kind of thing does stop.
        There is no question that the games will be held in Salt
    Lake City, it would be absolutely a physical impossibility to
    put them on any place else in the world. And if there are going
    to be Winter Games in 2002, they will be in Salt Lake City. And
    those of us who are determined to see that they are put on in
    the finest possible fashion recognize that the No. 1 challenge
    we have with respect to the Olympic games is transportation.
        I was at the games in Nagano and recognized that the
    Japanese spent something like $13 billion to put on those
    games, and by far the biggest part of that was transportation
    issues. Fortunately, the budget for the Salt Lake City games is
    one and a half billion dollars, about a tenth of the amount
    that the Japanese spent. We think for that budget we can put on
    the most outstanding Winter Games in the history of the
    Olympics.
        The scandals of the past are being cleaned up and will be
    behind us and I hope forgotten by the time we have the
    celebration of the games. We recognize that the one thing that
    absolutely has to work for the games to work is transportation.
        I appreciate your comments about the way the Utah DOT and
    UTA are working to solve this. I reciprocate them, again, as I
    did in my opening statement. If we had not had the kind of
    cooperation and support that we have had from you personally
    and from this administration generally, we would be in much
    more serious trouble than a few newspaper headlines about some
    scholarships that went to the wrong place. So I strongly,
    again, want to thank you and commend you for all the work you
    are doing and for your willingness to help us work through
    these problems in the future.
        Secretary Slater. Thank you.
        Senator, it has been our pleasure and that of the
    Administration to work with you and with the citizens of Utah
    and we are going to have successful games.
        Senator Bennett. Thank you, Mr. Chairman.
        Senator Campbell. Mr. Secretary, before I go to Senator
    Byrd, I come from the fourth fastest growing state in the
    union. So we have our problems, too, with Denver International
    Airport, and I-25 and light rail. As I mentioned a while ago, I
    am going to submit some questions to you and I would like the
    responses in writing. They were going to be pretty easy
    questions, but after hearing Senator Bennett I am going to
    toughen up my questions.

                           olympics selection process

        I would like to associate myself with his comments on the
    Olympic games. Since Senator Bradley left, I am the only one
    here that was on the Olympic team from the Senate and have been
    working with Senator Bennett and Senator Hatch and just want to
    reaffirm that the United States Olympic Committee nor the Utah
    Olympic Committee had anything to do with that. That is an
    International Olympic Committee problem.
        And this is probably not the place to take it up. But the
    way that is set up, they name--if you can imagine this--an
    undemocratic process. The USOC does not name its delegates to
    the International Olympic Committee. They name the delegates
    within your country they want to be the delegates, which puts
    the person who is being named in a rather subservient position
    of owing something to someone at the international level.
        The American Olympic Committee has never been able to get
    that changed. I met with them the other day. I told them it
    seems to me when you talk about Olympics, you think of gold.
    Since the United States Olympic Committee provides about 60
    percent of all the money that goes to the International Olympic
    Committee, he who provides the gold ought to be writing some of
    the rules and so there is a big movement now to get all that
    changed.
        But it should not reflect on the success of the Olympic
    games in Salt Lake. I would hope that ever since the Munich
    games we have recognized that when you have big international
    events, there is a huge amount of media worldwide which has
    created a forum for people that would like to get their
    statement out. And the killing of the Jewish team at the Berlin
    games was the beginning of kind of organized activities of
    terrorism toward athletes at the Olympic games or toward
    officials because they know they can get worldwide media.
        Since that time, even though it was never intended that the
    U.S. Government should get involved in the Olympic games, we
    have got to be now. So we do provide security and we provide a
    lot of other things, too, and certainly transportation to move
    people rapidly is part of the equation, too. We are in the
    Olympic games whether we want to be or not from that
    standpoint.
        With that, Senator Byrd, did you have any additional
    questions?
        Senator Byrd. Just a few and then I will be done.

                                   corridors

        Mr. Secretary, we have exchanged correspondence regarding
    two very important initiatives in my state. The Tolsia Highway
    and the Mon-Fayette Expressway. Both projects are seeking funds
    under the national corridor planning and development program.
    Earlier in the year the Federal Highway Administration signaled
    that they expected to announce grants for this program by now.
    However, we are told now that grants will not be announced
    until the spring.
        What can you tell me about how this competition is
    proceeding and what explains the delay in getting these funds
    released?
        Secretary Slater. Well, Senator, we have, as you noted,
    gotten some good applications from your state. We, frankly,
    were surprised by the public support for the program. We have
    actually gotten applications in the amount of at least $2
    billion or more. And what we are trying to do is to work our
    way through all of that. That is why we have extended the time
    a bit.
        But this is March. And when we say spring, that is the
    commitment that we make and we hope to have an announcement
    very soon. But we appreciate your support for the program and
    also for communicating your interest in the two projects that
    have come from West Virginia.
        Senator Byrd. One of the projects, the Mon-Fayette
    Expressway will link critically important traffic between West
    Virginia and Pennsylvania. As a result, the State of
    Pennsylvania has voiced strong support for West Virginia's
    application.
        Given the focus of this program on enhancing trade
    corridors on an interstate basis, will special consideration be
    given to these projects which have received statements of
    support from neighboring states?
        Secretary Slater. Clearly, because many of these corridors
    connect states or run through neighboring states, that will be
    one of the factors. And, frankly, getting words of support,
    encouragement from members like yourselves who actually gave us
    the ability to come forward with these kinds of programs, that
    is very helpful and also hearing from other states involved. A
    lot of times there are match requirements and clearly you have
    to have a commitment on the part of the states involved to be a
    partner with you in funding these kinds of important projects.
        Senator Byrd. Another project for which the state has
    sought funding, the Tolsia Highway project is critically
    important to the economic development of southwestern West
    Virginia. Will the program take into account the economic
    development aspects of particular highways in evaluating who
    receives funding from this program?
        Secretary Slater. Well, as noted, Senator, during my
    opening remarks, I mentioned that as we have reviewed our role
    as a department in the development of our strategic plan, we
    have clearly recognized that safety has to be our No. 1
    priority and that the whole essence of transportation is
    enhancing mobility. But there are also benefits to the economy,
    to the environment and to national security.
        Clearly taking into account the economic impact that this
    kind of investment can have on a given region, I am thinking
    now of Appalachia and the work of the Appalachian Regional
    Commission. Your involvement in that effort over the years has
    clearly demonstrated that transportation investment can
    increase the economic prowess potential of a community because
    it connects that community with a broader community of
    activity, trade, commerce, individuals, that these are factors
    that will be taken into account as we make these decisions.

                         Additional committee questions

        Senator Byrd. I thank you, Mr. Secretary, for your
    appearance before the committee. And I thank you for your
    responses to the questions.
        Secretary Slater. Thank you, sir.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]

                     Questions Submitted by Senator Shelby

                 revenue aligned budget authority and firewalls
        Question. Transportation has been on an interesting budgetary
    journey this past year. In July 1998, the President signed the TEA-21
    law that created budgetary firewalls for highway and transit spending.
    Last October--three months later--the Administration insisted on
    increased funding for the Access to Jobs program in addition to the
    funding included within the TEA-21 firewalls. Last month--seven months
    after the President signed TEA-21 into law--the Administration
    submitted a budget that would divert funding from the highway firewall
    into the transit account, the rail account, and the NHTSA non-firewall
    account. In addition, discrepancies in outlay scoring estimates between
    OMB and CBO with regard to the firewall accounts cost the discretionary
    caps over a billion dollars in outlays in fiscal year 2000.
        In light of the Administration's actions since the creation of the
    highway and transit firewalls less than a year ago, do you think that
    off-budget or firewall treatment for the FAA accounts is advisable?
        Answer. Both off-budget and firewall treatment for FAA is not
    advisable and we have not proposed it in the budget. Our nation has
    moved from a decade of enormous deficit into an era of strong economic
    growth and budget surpluses, due in part to the fiscal discipline
    required when making critical tradeoffs under a unified budget. The
    Administration strongly opposes any provisions that would drain
    anticipated budget surpluses prior to fulfilling our commitment to save
    Social Security and Medicare first.
        Question. Will you aggressively and actively oppose the creation of
    a firewall for the Federal Aviation Administration or any part of that
    organization?
        Answer. Yes. The President's Budget provides Congress an
    alternative proposal, which would fully fund the Federal Aviation
    Administration with aviation user charges (and excise taxes) that do
    not threaten the surplus or other federally funded programs.
        Question. Please provide for the record any correspondence you have
    received from congressional committee chairmen and ranking members
    regarding the Administration's fiscal year 2000 RABA proposal.
        Answer. A letter from Chairman Chafee is attached.

                       Letter From Senator John H. Chafee

                                           U.S. Senate,
                     Committee on Environment and Public Works,
                                      Washington, DC, February 1, 1999.
    Hon. Rodney Slater,
    Secretary, U.S. Department of Transportation,
    Washington, DC.
        Dear Secretary Slater: I am writing to give you my initial reaction
    to the President's proposed budget for fiscal year 2000 Department of
    Transportation programs under the jurisdiction of the Senate
    Environment and Public Works Committee.
        As you know, the President's budget proposal includes a $1.5
    billion increase in transportation spending above the levels assumed in
    the Transportation Equity Act for the 21st Century. You will recall
    that pursuant to TEA-21, any fluctuation in federal gas tax revenue is
    mirrored by a corresponding adjustment to Highway Trust Fund
    expenditures. Any increase in revenue would be distributed equally
    across all Federal-Aid highway programs. This funding mechanism was
    included to ensure that transportation funding remains deficit neutral
    and to ensure that Federal gas tax revenues are directed to
    transportation programs.
        The President's budget proposes to distribute this $1.5 billion
    increase in a different manner than provided in TEA-21. Specifically,
    the budget proposes that several programs, including transit and rail
    programs and the Congestion Mitigation and Air Quality Improvement
    Program (CMAQ), receive the majority of the $1.5 billion increase.
        As you know, I am a strong supporter of many of these programs
    targeted for increased funding, and in fact, fought for them during the
    TEA-21 deliberations. Amongst these programs I support are CMAQ,
    transit, and highway safety. However, I have great reservations about
    the President's proposal. I believe this proposal has the potential to
    reopen the TEA-21 debate, particularly with regard to the state funding
    formula issue. You will recall that the funding formulas proved to be
    one of the most difficult issues to resolve during the TEA-21
    negotiations. The President's budget proposal would upset the delicate
    balance finally achieved in those negotiations. Transferring the
    increased funds to transit programs and CMAQ skews the underlying
    formula agree to in TEA-21. I must oppose reopening such a sensitive
    issue, especially considering that TEA-21 was signed into law less than
    one year ago.
        Notwithstanding my concern with the proposed formula changes, the
    President's budget also upsets the programmatic balance established in
    TEA-21, that is, the relative emphasis current law places on, for
    example, bridges, transit, and interstate maintenance spending. Again,
    I do not see a compelling reason to reopen these carefully negotiated
    issues.
        Finally, it is regrettable to see that the Administration's budget
    proposes to avoid the jurisdiction of the Senate Environment and Public
    Works Committee. This is particularly troublesome given how closely we
    worked with the Administration to craft a fair transportation bill.
        If you would like to discuss these concerns, please call me or have
    your staff call Mr. Dan Corbett of my Environmental and Public Works
    Committee Staff at 224-7863.
                Sincerely,
                                                John H. Chafee.
                                   user fees
        Question. Each year since first assuming office in 1993, the
    Clinton Administration has proposed a budget for the Department of
    Transportation that is rife with new user fees and increases to current
    fees. Each year for the past seven years, Congress has rejected the
    Administration's proposal to raise taxes on transportation users. In
    fact, this subcommittee added a provision to last year's act to
    prohibit the submission of user fee proposal in the fiscal year 2000
    budget request. Nevertheless, you are again requesting approximately
    $1.6 billion in new and increased user fee that Congress has already
    opposed. While the Administration continues to propose the tax
    increases that are ``dead on arrival'' on Capitol Hill, I believe we
    have reached the point where we can no longer afford these budget
    gimmicks. Do you sincerely believe that the Department cannot
    satisfactorily execute its duties without adopting a tax and spend
    policy?
        Answer. As in previous Administrations the Clinton Administration
    policy is to introduce user fee funding where appropriate. Users
    generally are more willing to pay fees when such fees are dedicated to
    improving the quality of the programs that affect them directly.
        Question. If Congress does not act on these tax proposals, and I
    believe it is safe to assume that we won't, what areas of the
    Department's budget would you, Mr. Secretary, cut to account for this
    $1.6 billion shortfall? With highways and transit protected by the
    firewall would you cut the FAA, Coast Guard, Federal Railroad
    Administration, or the safety administrations or do you believe it more
    appropriate to cut them across the board? What specific program
    reductions would you make to make up this shortfall? If Congress does
    not act on these tax proposals, are you willing to assure us that this
    will be the last time that you submit a budget that proposes new or
    increased user fees?
        Answer. If user fees are not enacted, there will be an overall
    budget gap to be filled. How such gap is to be made up would be one of
    the subjects of the overall budget negotiations between the
    Administration and the Congress. I cannot make any assurances about
    user fees included in future budget submissions.
                         economic development highways
        Question. The creation or improvement of transportation facilities
    through underdeveloped areas can act as a stimulus for economic growth
    and opportunity. It would seem to me that we should take a look at some
    of the rural areas that have not experienced significant economic
    growth over the past couple of decades and consider whether improving
    their highway facilities to tie them more closely to areas that have
    experienced greater economic growth or improving their regional
    airports for either cargo or passenger service might be a way of
    helping these depressed areas generate sustainable economic and
    commercial growth. Please describe any currently authorized programs
    that are directed toward these goals.
        Answer. The Department provides funds for an important program that
    is the key to the economic development of the Appalachian Region. The
    economic condition of the region, comprising areas within 13 states,
    has historically lagged far behind the Nation as a whole. Growth
    depends on overcoming the region's isolation and providing this under
    served area with adequate infrastructure. The Department addresses this
    problem by providing $2.25 billion for fiscal years 1999 through 2003
    for the Appalachian Development Highway System (ADHS) program.
    Supporting economic development in the Appalachia Region by
    strengthening the highway infrastructure will improve not only the
    region, but will have a synergistic affect on the Nation as a whole.
        In 1965, the Appalachian Regional Commission (ARC) was established
    to help develop the region, and it runs the ADHS program. The
    Department makes funds available to the ARC for allocation by
    administrative formula to the 13 states to complete the 3,025 mile
    system authorized by Congress. FHWA administers the program and
    individual projects in the States through FHWA Division offices.
    Approximately 80 percent of the system is complete or under
    construction.
        A study completed by Wilbur Smith Associates in July of 1998
    indicates that this program has been extremely successful. The study
    focuses on the impact on economic development of 12 of the largely
    completed corridor segments. It concludes that by the year 2015, the
    ADHS will have created 42,000 Appalachia jobs and increased production
    or value added by $2.9 billion over the same time period. In addition,
    it will have created total travel efficiencies valued at $4.89 billion
    over the 1965 to 2025 period. The ADHS has helped the Appalachian
    Region better able to compete for economic opportunity. This
    competitiveness is valued at $2.7 billion over the 1965 to 2025 period.
        In addition to this program, TEA-21 authorizes a total of $700
    million for the National Corridor Planning and Development Program and
    the Coordinated Border Infrastructure Program. Under this new
    discretionary program, the Secretary may provide funding to significant
    regional or multistate highway corridors after taking into
    consideration several factors including the extent to which such a
    corridor may ``encourage or facilitate major multistate or regional
    mobility and economic growth and development in areas under served by
    existing highway infrastructure.''
        The Federal Aviation Administration's Airport Improvement Program
    is not authorized to specifically direct funding for the purpose of
    helping depressed areas generate sustainable economic and commercial
    growth. However, the Administration's aviation authorization proposal
    includes provisions that should help encourage more funding to upgrade
    nonprimary airports to accommodate turbine-powered aircraft, such as
    business aircraft. The Administration proposal also includes a new,
    five-year, $35 million grant program to help rural communities attract
    increased air service; an allowable use of those grant funds would be
    to make available necessary airport facilities.
        Question. Would you be willing to work with me and other interested
    members of the Senate to find other ways of achieving these goals?
        Answer. DOT is a strong believer in programs such as the
    Appalachian Development Highway System program that support economic
    growth in rural areas. It is the role of the Federal Government to spur
    economic growth to unlock the potential in all areas of the U.S. The
    Department certainly will work with you to achieve these goals.
                                 access to jobs
        Question. Last year the administration successfully pushed for an
    increase above the guaranteed firewall level for the new TEA-21
    ``Access to Jobs'' transit program, from $50 million to $75 million.
    And this year, you propose to use $75 million from the RABA funds to
    double this program's funding above the guaranteed level. Doesn't the
    budget request ``jump the gun'' by proposing to double this program
    above the authorized level, before DOT has had any chance to evaluate
    the program's success? How long will it take to evaluate the success of
    this new program?
        Answer. The budget requests doubling the funding for the Access to
    Jobs program, a key element to the success of welfare reform. Gaps in
    our nation's public transportation system too often create barriers to
    employment for people who cannot afford to own a reliable car. The Job
    Access and Reverse Commute program will help build the transit services
    necessary to help welfare recipients and low-income workers reach
    employment opportunities and move from welfare rolls to payrolls. It is
    important to make an early investment in this program to achieve all of
    the benefits of welfare reform, including improving the lives of
    current welfare recipients, utilizing all of the nation's human
    resources, and reducing welfare costs to all levels of governments.
        The Department has already seen a significant interest in the
    program, receiving 280 applications for fiscal year 1999. These
    applications request a total of over $111 million, in comparison to the
    $75 million appropriated. The program demands a very high level of
    local coordination before an application is submitted. Considering the
    short period of time between the enactment of TEA-21 and the
    application deadline, the Department is pleased with the response it
    has received. Localities will have more time to foster relationships,
    coordinate among interested parties, and develop applications for
    fiscal year 2000. As the program gains visibility among human service
    agencies, and with more time for coordination, the Department expects
    to see significantly more applications competing for Job Access and
    Reverse Commute funds in the next fiscal year.
        Beginning in fiscal year 2000, the program's performance will be
    measured against the performance goal (increase the number of
    employment sites that are made accessible by Job Access and Reverse
    Commute transportation services) included in the Department's annual
    Performance Plan. Furthermore, in accordance with TEA-21, FTA will
    conduct a full program evaluation in fiscal year 2000.
        Question. The Federal Transit Administration had planned to
    announce the 1999 Access to Jobs grants by the end of February. Please
    provide a listing of these grants for the record.
        Answer. The FTA regional offices and headquarters have completed an
    extensive review of all applications, and are now in the process of
    making final recommendations for grant award in April. Once grantees
    have been selected, the Department will provide the Chairman with a
    final list.
                    access to jobs grant selection criteria
        Question. What were the criteria for grant selection? Please also
    provide a copy of the published criteria for the record.
        Answer. The Federal Transit Administration is selecting grantees
    based on the statutory criteria provided by TEA-21. These criteria were
    published in the Federal Register on November 6, 1998, and they read as
    follows (the number of points in parentheses indicates the maximum
    level of points for a given factor):
        1. Coordinated human/services/transportation planning process and
    Regional Job Access and Reverse Commute Transportation plan (25
    points). Evaluated based on the extent to which the applicant:
        A. Demonstrates a collaborative planning process, including: 1.
    coordination with, and the financial commitment of, existing
    transportation providers; 2. coordination with the state or local
    agencies that administer the state program funded under part A of title
    IV of the Social Security Act (Temporary Assistance to Needy Families
    and Welfare to Work grant programs); 3. coordination with public
    housing agencies (including Indian tribes and their tribally designated
    housing entities as defined by the Secretary of HUD) if any, which
    intend to apply for Welfare to Work Housing Vouchers from the
    Department of Housing and Urban Development; 4. consultation with the
    community to be served; and 5. consultation with other area
    stakeholders.
        B. Presents a Regional Job Access and Reverse Commute
    Transportation Plan addressing the transportation needs of welfare
    recipients and low-income individuals.
        2. Demonstrated Need for Additional Transportation Services (30
    points). Evaluated based on the extent to which the applicant
    demonstrates:
        A. in the case of an applicant seeking assistance to finance a Job
    Access project, the relative need for additional services in the area
    to be served to transport welfare recipients and eligible low-income
    individuals to and from specified jobs, training and other employment
    support services; and
        B. in the case of an applicant seeking assistance to finance a
    Reverse Commute project, the need for additional services to transport
    individuals to suburban employment opportunities.
        3. Extent to Which Proposed Services Will Meet the Need for
    Services (35 points). Evaluated based on the extent to which:
        A. The proposed service will meet the need.
        B. The applicant demonstrates the maximum use of existing
    transportation service providers and expands transit networks or hours
    of service, or both.
        4. Financial Commitments (10 points). Evaluated based on the extent
    to which the applicant:
        A. Identifies long-term financing strategies to support proposed
    services.
        B. Identifies financial commitments by human services providers.
        C. Identifies financial commitments by existing transportation
    providers.
        FTA also will consider the extent to which the applicant addresses
    the following variable factors: (10 bonus points total)
      --1. Innovative approaches that are responsive to identified service
            needs;
      --2. Linkages to other employment-related support services; and
      --3. Other strategies that are effective in meeting program goals.
                                     ______

                    Questions Submitted by Senator Domenici

                                border programs
        Question. Secretary Slater, as part of our work on the TEA-21
    legislation last year, Congress expanded authorized funding levels and
    projects dealing with increased traffic at international border
    crossings. New Mexico is one of the border states that is feeling
    pressure from increased traffic; both positively due to trade, and
    negatively due to drug trafficking and other safety concerns.
        I helped to secure a few amendments which try to address some of
    these national transportation concerns. One was to ensure that the new
    Border and Trade program would utilize funds to detect and deter
    narcotics smuggling. Another was funding under the Trade Corridor and
    Border Crossing planning program should address projected increases in
    commercial border traffic. How has the Department planned to focus
    funding for the detection and deterrence of narcotics smuggling within
    the Border and Trade Program?
        Answer. The Department will diligently and fairly review any
    application from an eligible recipient of Coordinated Border
    Infrastructure (CBI) funds that contains work elements linked to
    detection and deterrence of narcotics smuggling. By statute, eligible
    recipients are States and MPOs.
        Question. Has the Department evaluated the projected future
    increases in commercial border traffic at border crossings?
        Answer. The Department does not make an official DOT forecast of
    projected future increases in commercial border traffic at border
    crossings. The Department, does however, consider projections made by
    other agencies (e.g., States) in the context of reviewing applications
    for CBI funds.
        Question. As to the new Border program funding, what criteria is
    the Department using for establishing border impact? For example, is
    direct proximity to the border imperative, or can arteries effected by
    increased traffic, even at further distance from the border, be
    considered?
        Answer. The statute requires CBI projects to be in a border region.
    The Department considers projects within 100 km (62 mi) of the US/
    Canada or US/Mexico border to be in a border region. This consideration
    is based on language in an international treaty, which in turn, was
    based on an earlier agreement (Article I(d) of Annex II to the August
    14, 1983, Agreement Between the United States of America and the United
    Mexican States on Cooperation for the Protection and Improvement of the
    Environment in the Border Area). The purpose of the earlier noted
    planning effort is similar to the purpose of this portion of the
    language in TEA-21.
                     nondestructive evaluation and testing
        Question. Secretary Slater, the Administration continues to put an
    emphasis on the use of technology in transportation. You know of my
    interest in the work that is being done by the Aging Aircraft
    Nondestructive Evaluation Center (AANC), which is supported by the
    Federal Aviation Administration, and is now a partner in the Center of
    Excellence for Airworthiness Assurance. This collaboration has been
    very successful, but has had a bit of a set back this year with final
    congressional approval of the President's lower 1999 budget request for
    the research programs funding these activities.
        Mr. Secretary, will you please provide the Subcommittee with the
    Department's current funding profile for the Aging Aircraft
    Nondestructive Evaluation Center in Albuquerque, and for the various
    components of the Center of Excellence for Airworthiness Assurance
    Program?
        Answer. In 1998, the Aging Aircraft Nondestructive Center (AANC)
    received approximately $750,000 in operational support (infrastructure
    support and short-term tasking), and another $2,250,000 in funding for
    specific technology testing and validation through the Airworthiness
    Assurance Center for Excellence (AACE).
        Including the funding to AANC, the AACE received approximately
    $8,850,000 in contract work in fiscal year 1998. AACE also received
    approximately $300,000 in grants from the FAA. This funding level was
    established in response to Congressional direction pertaining to AACE
    and the Engine Titanium Consortium (ETC). (ETC was integrated into AACE
    in 1998.) In fiscal year 1999, FAA anticipates funding AANC at $3.3
    million, including $1.9 million through AACE. An additional $1.1
    million in contract work and grants is also anticipated for AACE.
                                funding for aanc
        Question. AANC in Albuquerque has been funded at $3 million per
    year. I believe the FAA intends to continue this level of support,
    however under the new Center $2 million of this amount will flow
    through this new mechanism. Do you expect the 1999 level of support of
    the AANC to remain at $3 million? When does the Department expect to
    commit these funds?
        Answer. Through an interagency agreement, the FAA has obligated
    $1.2 million from its fiscal year 1999 Aging Aircraft budget to the
    Aging Aircraft Nondestructive Evaluation Center (AANC) for operational
    support and short-term tasking. Also, through this interagency
    agreement, AANC will receive a supplemental $250,000 for the purchase
    of a test-bed aircraft (a retired Boeing 747). In addition to this
    direct funding, FAA anticipates obligating another $1.9 million to AANC
    through the Airworthiness Assurance Center of Excellence (AACE). This
    figure includes $1.7 million for inspection-related research, $100,000
    for composite repair doubler validation, and $75,000 for rotor craft
    research, totaling approximately $3.3 million.
        Question. What is the request for the AANC and the program elements
    associated with the Center for Excellence in the fiscal year 2000
    budget, and how does that compare to the proposed plan for fiscal year
    1999?
        Answer. The Aging Aircraft Nondestructive Evaluation Center (AANC)
    budget requests in fiscal year 1999 and fiscal year 2000, submitted as
    part of the Aging Aircraft budget line item, is approximately $3
    million. The Airworthiness Assurance Center (AACE) does not have a
    specific budget request line item in fiscal year 1999 or fiscal year
    2000. Rather, other Aircraft Safety budget line items request a minimum
    of $1 million for AACE-related work in fiscal year 1999 and fiscal year
    2000.
        Question. Is the request sufficient to support ongoing work? What
    are the program goals for fiscal year 1999 and fiscal year 2000 under
    the FAA's plan?
        Answer. The Aging Aircraft Nondestructive Evaluation Center's
    (AANC) efforts are predominantly in support of the Aging Aircraft
    Research Program, whose budget for fiscal year 1999 is $14.7 million.
    The goals of the program will be satisfied by the current budget
    request. In particular, the funding request for AANC is sufficient to
    maintain the existing facilities and support projected needs in
    inspection research. In general, it is anticipated that AANC will play
    a key role in transitioning to industry at least two significant
    inspection techniques (technologies and procedures) per year.
        AANC may be awarded additional tasks in the areas of rotor craft
    safety, composite repair, and non-structural systems, as appropriate.
    The funding for these tasks must come from the requests for these
    individual areas.
                            aviation safety research
        Question. How does the budget request square with the commitment of
    the Administration to improve safety in the skies? The Vice President's
    Commission on Aviation Safety and Security defined the need for safety
    research and the FAA Administrator has established a Safer Skies
    initiative. Did the FAA request additional funding for the
    Airworthiness Assurance Center of Excellence in its budget submission
    to you, Mr. Secretary? Did the Department submit a request for
    additional funding to OMB?
        Answer. The agency's overall R,E&D budget request reflects an
    increased focus on air traffic, cockpit, and maintenance human factors
    issues. The Aircraft Safety program request places highest priorities
    on survivability, weather, and uncontained engine failure projects. In
    October 1998, in response to the White House Commission on Aviation
    Safety and Security recommendations, the FAA released its Aging
    Transport Non-structural Systems Plan. This plan is the foundation for
    the research program in support of the Commission. Immediately upon its
    release, the FAA reprogrammed $700,000 for aging nonstructural systems
    research.
                         aging nonstructural components
        Question. The AANC and the Center of Excellence has focused its
    research and technology development efforts largely on structural aging
    in view of the current fleet of commercial aircraft. The FAA has
    recognized the nonstructural aging issues as needing to be addressed,
    for example, the wiring issue. I understand that the FAA plans to
    commit a few hundred thousand dollars to this effort in fiscal year
    1999. Can you please tell the Subcommittee what the current
    nonstructural aging program expects to accomplish in 1999 and how much
    the FAA intends to commit to this area of research?
        Answer. The objective of the Aging Systems Research Program is to
    work with industry (airframe manufacturers and aircraft operators), the
    Department of Defense, and the National Aeronautics and Space
    Administration to accomplish six specific tasks outlined in the FAA
    Aging Transports Non-Structural Systems Plan.
        The research program was initiated in early fiscal year 1999,
    immediately after the release of the plan. It is anticipated that
    funding ($700,000 reprogrammed from the aging structures program) will
    be spent in two ways:
        Development of aircraft arc-fault circuit breakers: This project is
    a joint effort with the Office of Naval Research. A Broad Agency
    Announcement will be released this month and a technical effort
    initiated by mid-May. The development of arc fault circuit interrupters
    will reduce the incidence of arcing faults capable of causing
    electrical fire or explosion. The TWA 800 accident may have been caused
    by the spark-erosion of a metal conduit and subsequent vapor ignition.
    This type of fault would be preventable by this technology.
        Development of a validation infrastructure: This project is
    progressing on two fronts: The acquisition of a wire test system, and
    acquisition of a systems test bed aircraft. The acquisition of a wire
    test system is a joint activity with the Product Reliability and
    Maintainability Office (PRAM) of the Air Force. The wire test system is
    applicable across aircraft platforms. FAA intends to apply it first to
    the DC 9 aircraft located at the Aging Aircraft Nondestructive Center
    (AANC). The PRAM office and the contractor (GRC/Eclipse) have received
    and addressed the FAA's technical requirements. FAA recently received
    and provided feedback on a draft proposal from GRC/Eclipse.
        On the acquisition of a systems test bed aircraft, FAA is working
    with the Air Transport Association's (ATA) Aging Systems Task Force to
    explore the possibility of working together to jointly satisfy ATA's
    obligation to do tear-down evaluations of soon-to-be-retired aircraft,
    and the FAA's commitment to establish and baseline a systems testbed.
    In effect, the ATA members would assist FAA in providing a baseline for
    the aircraft. In the process, they will help to satisfy their
    obligation to do tear-down inspections. An added benefit of this
    approach is that the ATA would be more inclined to accept and support
    the resulting baseline. FAA expects to acquire an older Boeing 747 by
    the summer of 1999.
        Question. I understand that the fiscal year 2000 request for this
    area of work is about $15 million overall. What does the Administration
    assume will be accomplished in the nonstructural aging area under its
    budget request? How much is budgeted for this work?
        Answer. The entire Aging Aircraft budget request for fiscal year
    2000 is approximately $16 million. In fiscal year 2000, The FAA expects
    to accomplish the following in aging nonstructural systems research:
    Complete wire assessments directed at determining the feasibility of
    managing aircraft wire safety issues with life limits. Determine the
    adequacy of visual inspection for assessment of wire condition. Develop
    an advanced prototype arc-fault circuit interrupter suitable for flight
    testing. Initiate research into advanced technologies and techniques
    for wire inspection and testing. And initiate research into flight
    critical mechanical systems.
        Other efforts will be initiated in response to the recommendations
    of the newly-formed Aging Transport Systems Rulemaking Advisory
    Committee and the Air Transport Association's Aging Systems Task Force.
                       propulsion systems safety research
        Question. In 1998, the FAA in cooperation with the Secretary of the
    Department of Transportation announced the enhanced inspection
    initiative for engines. The focus of the program is on improved
    inspection practices for critical rotating components of jet engines, a
    significant factor in reducing the number of propulsion-related
    incidents. The Engine Titanium Consortium, which brings together a
    leading research university with the major U.S. engine manufacturers
    was established by the FAA to address inspection research, development
    and implementation needs. What are the DOT plans to assure adequate
    funding for this program in fiscal year 1999 and fiscal year 2000?
        Answer. The Engine Titanium Consortium (ETC) was allocated $3.4
    million in fiscal year 1998. This is sufficient to fully fund ETC
    through fiscal year 1999. Within the fiscal year 2000 budget request,
    ETC funding is anticipated to be $2.6 million.
                       short & long term research efforts
        Question. The FAA has often been accused of ``tombstone
    technology'' with advances only being considered and made in the wake
    of some major incident. Industrial research efforts are being driven
    more and more by economics. Both the FAA and industrial focus is on
    short-term payback. What steps are in place to assure that your
    research programs are addressing both short-term issues and long-term
    needs?
        Answer. In fiscal year 2000, approximately 35 percent of the
    research budget is for long range research. FAA provides guidance to
    researchers that emphasizes the need to sustain a viable long-term
    research program, FAA tracks requirements for both long-term and short-
    term needs, and when FAA constructs a research portfolio, they ensure
    that there is a balance between meeting long-term and short-term needs.
    Additionally, FAA is working closely with NASA to ensure that their
    aeronautics research program, which has a time horizon further out than
    FAA's, is responsive to long-term user needs.
                      universities & national laboratories
        Question. Are leading edge universities and national laboratories
    being included in the research process similar to the Airworthiness
    Assurance Center of Excellence program?
        Answer. The use of leading edge universities and national
    laboratories is an important part of FAA's research program. In the
    addition to the Airworthiness Assurance Center of Excellence, FAA has
    Centers of Excellence (COE) for Aviation Operations Research and for
    Airport Pavement Research. The University of California at Berkeley,
    the University of Maryland, Virginia Polytechnic Institute, and the
    Massachusetts Institute of Technology are the principle universities
    associated with the COE for Aviation Operations Research. The
    University of Illinois at Urbana- Champaign and Northwestern University
    are the principle universities associated with the COE for Airport
    Pavement Research. Additionally, with NASA, the FAA sponsors the Joint
    University Program. This program involves Princeton University, Ohio
    University, and the Massachusetts Institute of Technology.
                              industry initiatives
        Question. Are adequate plans in place to assure that the basic
    research programs that complement the industry initiatives and other
    short-terms programs are also in place?
        Answer. The FAA engages in continuous dialogue with users and
    industry to ensure that the research program fits in with industry
    initiatives. This dialogue includes user initiatives for new
    operational concepts. FAA does this routinely with the FAA's Research,
    Engineering, and Development (R,E&D) Advisory Committee, RTCA, the Air
    Traffic Control Association, and a variety other groups representing
    users and manufacturers. For example, the R,E&D Advisory Committee, a
    group representing both users and manufacturers, meets three times a
    year to provide the Administrator guidance on research investments.
    They annually review the proposed research portfolio to ensure its
    responsiveness to the needs of the aviation community and, when
    necessary, provide recommendations for change to that program to
    improve the value of that portfolio to the aviation community.
        FAA also meets with industry, when necessary, to address specific
    issues. These sessions are geared to address issues in a specific area
    and are undertaken to ensure, as much as possible, that FAA's programs
    and those of the manufacturers are directed towards meeting the
    aviation system users' needs. For example, FAA is sponsoring an
    Aviation Weather Research Forum on March 24, as part of a strategy to
    coordinate Federal Government and private sector activity in the
    availability and use of enhanced weather information.
                       aviation safety inspector training
        Question. Aviation safety is a major focus of this Subcommittee's
    work. This past year has been a real success with no fatalities in
    commercial air travel. The key to this success is largely in the hands
    of the aviation inspectors, and these same inspectors are the key to
    getting new technology into the actual inspections. How would you
    characterize the training budget for aviation safety inspectors? Are
    the proposed resources sufficient to adequately train these inspectors
    and keep them up to date on the latest aircraft and technology?
        Answer. Within the overall constraints of the fiscal year 1999
    budget, the FAA has allocated an appropriate level of resources to meet
    training needs for aviation safety inspectors, including training for
    the Air Transportation Oversight System (ATOS); Safety Performance
    Analysis System (SPAS); Operations Specification; Certification,
    Standardization, and Evaluation Team (CSET); and systems safety. As
    technical training for recent new hires is provided, they will be
    integrated into the inspector workforce to perform job functions such
    as record checks and facility inspections.
                        aviation safety inspector travel
        Question. Is the FAA providing sufficient travel funds for those
    inspectors who must travel? I understand that in testimony before the
    House authorizing subcommittee, the Albuquerque Flight Standards
    District Office (FSDO) was advised that travel funds are limiting
    overnight travel after this month so that the 12 inspectors can no
    longer service flight operations in El Paso. The witness raised the
    issue of both foregone inspections for some 2,000 flights, as well as a
    staffing deficit of as many as 12 inspectors for this office.
        Answer. Job performance travel is a critical element in aviation
    safety inspectors' certification, surveillance and inspection work.
    Safety-related travel continues to be funded, and the FAA will conduct
    over 300,000 inspections, evaluations, and audits of air carriers,
    manufacturers, and personnel in the aviation industry this fiscal year.
    Given the fiscal year 1999 budget constraints, all non-operational and
    non-training travel has been prohibited, thus conserving funds for
    critical job performance activities.
        Albuquerque FSDO is servicing flight operations in El Paso. Travel
    to El Paso is closely monitored, but inspectors continue to be assigned
    work in that area. The FSDO staffing had been at or near 17 inspectors
    since October 1, 1997, until three inspectors left since October 1998.
                       aviation safety inspector staffing
        Question. How do you characterize the FAA's safety inspection
    program? How many inspectors are currently on board? Do they have
    sufficient support staff? Do they have the necessary funding to do a
    good job?
        Answer. The safety inspection program is continuing to operate in
    accordance with nationally developed priorities and requirements. Some
    work activities will be delayed until the third and fourth quarters of
    this fiscal year due to budget restrictions.
        Based on the current FAA staffing standards applicable to Flight
    Standards field offices, FAA is close to full staffing for both
    aviation safety inspector (ASI) and safety support positions. As of
    February 28, 1999, Flight Standards had 3,257 field inspectors and 720
    field support on board.
        Funding restrictions are in place to reduce or eliminate certain
    types of travel and training. Priority in travel funding goes to the
    performance of certification, surveillance and inspection work
    activities. Restrictions are in place on such items as supplies,
    equipment, back-filling positions vacated by attrition, and
    administrative travel.
                   air transportation oversight system (atos)
        Question. The FAA continually implements new safety programs as
    problems are identified. The Air Transportation Oversight System (ATOS)
    was designed to manage the certification of new carriers entering
    service. I understand that the training funding situation is impeding
    the implementation of this new program, and that the FAA actually
    redirected funding out of the Flight Standards budget which will
    exacerbate this problem. What is the FAA's rationale for this
    redirection of funding, and what are the plans for ATOS in the fiscal
    year 2000 budget?
        Answer. The FAA decided to move funds from Flight Standards and
    other FAA organizations to address unbudgeted cost increases,
    unspecified reductions during the appropriations process, and loss of
    anticipated user fees. Flight Standards has therefore had to reduce
    planned spending in several areas, including technical training. The
    Flight Standards Service is funding all of the required ``baseline''
    training that the ATOS policy requires before aviation safety
    inspectors can work in the ATOS program. However, due to funding
    limitations, the Service will be unable to fund the aircraft-specific
    flight and systems training that is called for by the ATOS policy
    document. Fiscal year 2000 planned ATOS training includes carryover
    requirements from fiscal year 1999, as well as funds to develop and
    revise the ATOS training to prepare for the ATOS Phase II program, and
    begin training the inspectors who will be needed to work the Phase II
    portion of the ATOS program.
        Question. I understand that a new carrier came on line this past
    October to serve the Pacific Northwest. Could you please describe for
    the Subcommittee how ATOS is working in this case? Is ATOS being
    implemented and what type of surveillance is the FAA undertaking to
    appropriately certify this new carrier for service? If ATOS is not
    being carried out, why not?
        Answer. ATOS is based on using system safety and risk management
    certification and surveillance concepts to proactively prevent
    accidents. Although not completely developed, Phase I of ATOS was
    implemented on October 1, 1998. This implementation included the ten
    largest air carriers based on the number of passengers carried. Phase I
    also includes any new air carriers certified under a systems safety-
    based certification process that the FAA is currently finalizing. It is
    anticipated that newly certificated air carriers, who have been
    certified under the new process, will be coming into ATOS in fiscal
    year 2000. The carrier described as serving the Pacific Northwest has
    not been certificated under a systems safety-based process. Therefore,
    it will be included in Phase II of ATOS, which will include all other
    14 CFR part 121 air carriers.
                                     ______

                   Questions Submitted by Senator Lautenberg

       safety hazards of sport utility vehicles (suv's) and light trucks
        Question. What Is DOT doing to address the known safety hazards of
    sport utility vehicles (SUVs) and light trucks?
        NHTSA recently announced that during routine side impact crash
    tests many SUV's unexpectedly rolled over, likely due to their high
    centers of gravity. In fact, fully 37 percent of fatal crashes in SUV's
    involve rollover. This compares to only 15 percent for cars. Simple
    safety changes, such as stricter roof crush standards, could help to
    address this serious problem. What is DOT doing to address the serious
    rollover problem? Are you planning to revise SUV and light truck
    rollover standards?
        Answer. Rollover is one of the Department's top priorities. While
    recently two SUV's rolled over in the side impact New Car Assessment
    Program (NCAP) crash test and one in the side impact compliance test,
    it should be emphasized that the vast majority of rollover crashes
    involve a single vehicle. NHTSA has initiated a number of engineering
    and consumer information initiatives to address the rollover issue.
        NHTSA recently completed test track research on a number of
    rollover-inducing maneuvers to determine which might be most useful for
    identifying potential stability problems. The results are currently
    being analyzed to determine the feasibility of a rulemaking action or
    consumer information program that addresses vehicle rollover
    propensity.
        NHTSA is continuing actions that may lead to improvements in roof
    strength and door retention. Research is near completion on the study
    of procedures and potential benefits for upgrading Federal Motor
    Vehicle Safety Standard 216, ``Roof Crush Resistance.'' Based on this
    research, the NHTSA will make a determination of possible rulemaking in
    the spring of 1999. Many of the fatalities and injuries in SUV
    rollovers are due to full or partial ejection due to door opening.
    NHTSA intends to issue a notice of proposed rulemaking this year which
    will propose upgrades to the strength requirements of FMVSS 206, ``Door
    Locks and Retention Components,'' which will be applicable to all
    passenger vehicles. Future rulemaking may also include the use of
    advanced side glazing for vehicle windows, and research on integrated
    seating systems that could help reduce injuries in rollover crashes.
        Question. Have you issued warnings for current and potential SUV
    and light truck owners about the rollover risks associated with these
    vehicles?
        Answer. On March 9, NHTSA issuing a final rule upgrading the 15-
    year-old text-only vehicle rollover warning label. In addition to using
    bright colors and graphics, the new label includes the heading,
    ``Warning: Higher Rollover Risk''. Under the heading are instructions
    to avoid abrupt maneuvers and excessive speed, and to always buckle up.
    The new label must be placed on either the sun visor or the driver side
    window of new vehicles. NHTSA is also requiring additional information
    on rollover in the owner's manual. These changes are expected to make
    the information more understandable to consumers and increase the
    chance that the labels can affect driver and passenger behavior to
    reduce rollovers and their consequences.
        Also, NHTSA is noting for the public in their NCAP consumer
    information materials (brochure, Web Page, etc.) any vehicles that
    rolled over in the side impact NCAP test. Currently, NHTSA does not
    have a clear understanding of the mechanism that caused these SUV's to
    roll over in the side impact tests, and cannot say that these specific
    SUV models are more prone to rollover than other vehicles in the SUV
    class of vehicles. Nonetheless, the tests do reinforce real world crash
    experience with sport utility vehicles: SUVs--when struck in a side
    impact collision--are more prone to rollover than passenger cars.
    Accordingly, NHTSA is undertaking several actions to better understand
    this phenomenon. Test films are being re-evaluated and future tests
    will have additional high speed cameras for an engineering analysis of
    the vehicle behavior. SUV manufacturers have been contacted for
    information and their views. Real world crash and injury data are being
    analyzed to compare with the lab test results.
                environmental impacts of suv's and light trucks
        Question. What are the environmental impacts of SUV's and light
    trucks?
        SUV and light truck sales are now more than half of the new vehicle
    market. Yet their fuel economy and emissions standards are much less
    strict than those for automobiles. This may have a profound
    environmental impact. The average SUV or light truck emits 70 tons of
    carbon dioxide over its lifetime. In contrast, the average car emits
    only 38 tons over its life. We seem to be turning back the clock on the
    environment. Does DOT plan to require SUV's and light trucks to meet
    environmental standards similar to those required of automobiles?
        Answer. The Department of Transportation does not have the
    authority to require SUV's and light trucks to meet environmental
    standards similar to those required of automobiles. That authority
    resides with the Environmental Protection Agency (EPA). EPA is
    currently working on a rulemaking proposal for ``Tier 2 Vehicle
    Emissions Standards and Gasoline Sulfur Control'' that would require
    the same emission standards to be applied to passenger cars and light
    duty trucks under 8,500 lbs GVWR with a phase-in for passenger cars and
    light light duty trucks (LLDT) (those under 6,000 lbs GVWR) between
    model years 2004 and 2007 and for heavy light duty trucks (HDLT) (those
    between 6,000 and 8,500 lbs GVWR) between model years 2008 and 2009.
        The Department of Transportation does have responsibility for
    setting Corporate Average Fuel Economy (CAFE) standards. The statutory
    criteria that NHTSA must consider in setting CAFE standards include
    ``the need of the United States to conserve energy,'' but not
    specifically to reduce vehicle emissions. Congress set the passenger
    car standard of 27.5 mpg for Model Year (MY) 1985 and thereafter. There
    is no default standard for light trucks; NHTSA must set the standard
    for each future model year. NHTSA has done this for MYs 1979-2000, and
    in April will establish the standard for MY 2001 light trucks.
    Provisions in the DOT Appropriations Act for fiscal years 1996, 1997,
    1998, and 1999 have forbidden NHTSA from raising fuel economy standards
    during these fiscal years. This results in the light truck CAFE
    standard being frozen at 20.7 mpg for MYs 1998, 1999, 2000, and 2001.
    The fiscal year 2000 budget proposes that the Congressional prohibition
    not continue so that NHTSA can resume its historical approach to
    setting and reviewing fuel economy standards, using the statutory
    criteria to determine the maximum feasible level.
                                   argentina
        Question. What can be done to ensure competition in the air market
    between the U.S. and Argentina?
        American Airlines is the only carrier currently authorized to
    operate non-stop service between the U.S. and Argentina. The current
    agreement does not permit any others. American has also been given
    Justice Department approval to invest in the Argentine national
    airline, under the expectation that Argentina would open their skies to
    other carriers. This has not happened. What has DOT done to encourage
    Argentina to open the non-stop market with the U.S.? What is DOT's
    position concerning allowing the American Airlines alliance with the
    Argentine national airline to go forward before the market is opened?
        Answer. Under the existing agreement with Argentina, two U.S.
    carriers, American and United, serve the U.S.-Argentina market. Each
    carrier is authorized to operate 14 round trip B-747 flights per week
    or their equivalent in smaller aircraft.
        The Department is making a sustained effort to conclude an open-
    skies agreement with Argentina that will open the Argentine market to
    additional U.S. carriers. The Department met with the Argentines in
    March and December 1998 and will resume talks on March 23, 1999. Given
    the intent of the Government of Argentina to give its newly reorganized
    airline, Aerolineas Argentinas, a period of protection from new
    competition, the DOT is negotiating a transitional agreement in which
    new entry for U.S. carriers and new route rights that the Argentine
    carrier could use for code sharing with American Airlines would be
    phased in together.
        With regard to an American Airlines/Aerolineas Argentinas alliance,
    we have informed the Argentines that DOT could only give serious
    consideration to such an application in the context of full open skies.
                       problems with motor carrier safety
        Question. As you know, there is an ongoing debate over where the
    Office of Motor carriers should be located within the DOT. Wouldn't you
    agree that the most important issue is whether this office is actually
    promoting safety?
        Answer. The Department wholeheartedly agrees that the safety of the
    motoring public is the most important consideration in the debate over
    placement of motor carrier safety enforcement and oversight. The number
    one priority is safety, and the Department is working very hard to
    continually improve all aspects of transportation safety. To further
    address the issue of motor carrier safety, the Department is supporting
    an independent review conducted by former Representative Norman Mineta
    of that program. The Mineta review will identify the key safety
    strategies that will help reduce fatalities in crashes involving large
    trucks and examine the organizational structure which is best suited to
    execute these strategies.
        Question. Do you believe the trucking industry currently takes your
    efforts at all seriously? If so, why are so many trucks and buses being
    ordered off the road?
        Answer. There are many responsible, law-abiding motor carriers and
    drivers that give compliance with Federal and State safety regulations
    a high priority. However, as in other industries, there are carriers
    and drivers that ignore safety laws and regulations. FHWA's enforcement
    partners in the States examine data on the safety histories of carriers
    and actively look for visible signs of safety problems in selecting
    vehicles and drivers for roadside inspections. Targeting vehicles and
    drivers for inspection in this way results in higher levels of
    citations and out-of-service orders than if vehicles were randomly
    selected for inspection. This makes the most efficient use of motor
    carrier enforcement personnel and provides the greatest safety benefit
    in reducing risks for other motorists.
        TEA-21 added enforcement powers authorizing fines up to $10,000
    against carriers that do not comply with the regulations as well as
    granting the Department authority to put carriers out of business in a
    shorter time frame for non- compliance. These added sanctions will most
    certainly raise the consciousness of those carriers that do not
    currently comply.
                           amtrak financial progress
        Question. Is Amtrak ``on track'' to close the gap?
        Mr. Secretary, DOT's Inspector General's office recently concluded
    a major assessment of Amtrak's financial condition. The IG concluded
    that Amtrak needed to close a budget gap of roughly $400 million if it
    is to achieve the goal of operating self-sufficiency by 2003. Of that
    amount, $93 million is the gap that needs to be closed for the current
    fiscal year, of which $22.5 million would be attributable to the
    quarter already completed. I understand from Amtrak that, based on
    their new cost reduction and revenue enhancing initiatives, they have
    more than closed the gap for the first quarter. Have you reviewed
    Amtrak's financial progress?
        Answer. Amtrak is making great strides to become a successful,
    customer-oriented company. The Board, the management, and the rank and
    file employees are committed to remaking Amtrak into a cost effective
    provider of world class service.
        Amtrak had a good year in fiscal year 1998. Passenger revenues
    surpassed the $1 billion mark for the first time in Amtrak's 27-year
    history. Ridership increased 4.5 percent over the previous year. This
    is the biggest increase in a decade. On-time performance increased to
    almost 79 percent, its highest level in 13 years. During the first
    quarter of fiscal year 1999, on-time performance was over 80 percent,
    an improvement of almost 5 percent over the previous year.
        Question. Are you at all encouraged by what you've seen regarding
    their ability to tap new revenue sources and minimize costs?
        Answer. Amtrak's Board and management are committed to seek out new
    sources of revenue and new opportunities to cut costs. Amtrak has been
    developing partnerships with States to support corridor development and
    regional services, with freight railroads and shippers to increase the
    transportation of express shipments, with telecommunications firms and
    developers for use of Amtrak's right-of-way and other real estate
    holdings, and with Fortune 500 companies such as Disney and United
    Airlines to jointly market their products. Amtrak has begun to contract
    out certain services, such as its commissary, in which others would
    perform the function at lower cost.
                           amtrak northeast corridor
        Question. What are the costs to the government if Amtrak were
    eliminated?
        Earlier this week, the FAA, once again, printed the list of the
    most delayed airports in the United States. But when you look at the
    list of the top ten most delayed airports in the United States, five of
    these airports are in the Northeast Corridor. They are Logan, Newark,
    LaGuardia, Kennedy, and Philadelphia International. The principal
    reasons that these are the most delayed airports is because they serve
    the most congested airspace in the country. Would you care to comment
    on what the impact would be on these already delayed airports if
    Amtrak's Northeast Corridor service were allowed to shut down?
        Answer. Amtrak carries about 65 percent of the combined air-rail
    market in the corridor, with over 40 percent between Washington and New
    York City endpoints. During the peak travel periods when airport
    congestion is at its greatest, Amtrak carries a significant number of
    passengers in the Northeast Corridor. While some rail passengers might
    opt to travel by automobile or mass transit, a significant number of
    rail passengers will decide to fly, and adding these passengers into
    the aviation system would create serious problems. For example, the
    trips would become more circuitous and take much more time, such as
    flying to Islip on Long Island and taking a taxi or the Long Island
    Railroad back to Manhattan. Long term this would require expensive and
    time-consuming investment to expand highway and airport capacity.
        Question. What impact do you believe the initiation of high speed
    service on the northeast corridor will have on congestion at these
    airports?
        Answer. Initiation of high speed service on the Northeast Corridor
    will have its most profound effect on the Boston and New York City
    airports. When the service is in full operation, Amtrak will offer the
    same competitive trip times in this part of the Northeast Corridor as
    it does between New York City and Washington. Amtrak expects that the
    high speed rail service will divert a large number of existing air
    passengers, as well as absorb a portion of the expected growth in
    intercity travel, thus mitigating the demand for more costly capacity
    expansion efforts at these airports.
               amtrak's potential outside the northeast corridor
        Question. Mr. Secretary, I do not think that anyone would question
    Amtrak's importance to our transportation system in the northeast.
    Without Amtrak service, our roads and airports would be vastly more
    congested, resulting in greater delays, reduced quality of life, and
    diminished productivity. Are there corridors in other parts of the
    country where Amtrak could play a similar role in providing a high
    speed alternative to short-to-medium length automobile and aviation
    travel, thereby improving the overall functioning of other regional
    transportation systems?
        Answer. A significant part of the future of Amtrak is in its high-
    speed rail service both within and outside the Northeast Corridor. The
    investments in upgrade of Amtrak service to high-speed in intercity
    corridors of up to 300 miles in length will pay significant dividends
    for Amtrak. It will also have significant benefits for the States in
    the form of better accessibility, less congestion on other modes, and a
    wide range of environmental benefits. Several States as diverse as
    California, Illinois, Michigan, New York, North Carolina, Washington,
    and Wisconsin have taken the initiative and partnered with Amtrak to
    develop the plans and begin the implementation of high-speed service on
    selected intercity corridors. Also, the States and Amtrak are
    emphasizing intermodal terminals and connections to provide relatively
    seamless transportation alternatives to air and highway trips. FRA is
    coordinating the existing Federal programs, for example the Next
    Generation High-Speed Rail program and the Section 1103(c) grade
    crossing hazard program, with Amtrak and the States to help mature
    plans and leverage significant commitments of funding from other
    funding partners.
                effect of traffic congestion on quality of life
        Question. What can be done about the effect of traffic congestion
    on quality of life?
        One of the President's priorities in the fiscal year 2000 budget is
    his Livability Agenda to promote Smart Growth and improve the quality
    of life in metropolitan areas. One key component of this Agenda is the
    desire to reduce traffic congestion--which, according to one study,
    costs $74 billion a year in lost time and fuel. Congestion is an
    increasingly large problem in New Jersey and in metropolitan areas
    across the country and I believe that we must do a better job at
    addressing this issue.
        I have always fought for greater balance in spending between the
    various modes of transportation. We must be smart--invest not only in
    new roads, but in high speed rail, mass transit systems, and new
    technology. How does the Administration's budget attempt to address
    this problem and how do you think we can do a better job at reducing
    the amount of time people now waste stuck in traffic?
        Answer. The Administration has included a Livability Initiative in
    its fiscal year 2000 budget. This initiative is a set of programs to
    ease congestion and promote community livability. As part of this
    initiative, the Department's budget proposes $6.1 billion for public
    transit and $2.5 billion for highway programs that provide flexible
    support to state and local efforts to improve transportation and land
    use planning, strengthen existing transportation systems, and promote
    broader use of alternative transportation. The following programs are
    included in the livability initiative:
        $6.1 billion for all Transit programs to maintain and expand the
    nation's access to transit systems. Transit programs help provide basic
    mobility to millions of Americans, ease congestion on our roadways, and
    improve air quality.
        $1.8 billion for the Congestion Mitigation and Air Quality
    Improvement Program (CMAQ) to support state and local efforts to east
    congestion and reduce air pollution in areas that do not meet federal
    air quality standards, and in areas that are working to maintain
    compliance with these standards.
        $639 million for Transportation Enhancements to support projects
    such as the renovation of historic rail stations, bicycle and
    pedestrian paths, safety education, and scenic beautification.
        $48 million for the Transportation and Community and System
    Preservation Pilot (TCSP) to support state and local efforts to
    coordinate transportation and land use planning, reducing environmental
    impacts and ensuring efficient access to jobs, services and centers of
    trade.
                  funding balance between highways and transit
        Question. How do we maintain the funding balance between highways
    and transit?
        Mr. Secretary, as you know, I strongly support the Administration's
    priorities within its reallocation of Revenue Aligned Budget Authority.
    Balanced transportation spending between highways, transit, rail, and
    research is essential to developing the most effective and efficient
    transportation infrastructure possible. I commend you for recognizing
    this. Unfortunately, there appears to be strong opposition to this
    proposal by those who either disagree with your priorities or who do
    not want to risk reopening TEA-21 debate. Is there a way to maintain a
    funding balance between highways and transit, as well as address the
    funding shortfall for research programs, outside of the firewalls
    created in TEA-21?
        Answer. The Department has explored a number of options to maintain
    the balance between highways and transit, and to fund research at an
    appropriate level. The transfer of revenue aligned budget authority
    provides the best tool for addressing these issues and maintains the
    spirit of TEA-21 but protects the overall budget surplus for Social
    Security. Tax receipts have increased significantly more than what was
    anticipated when TEA-21 was being forged. The President's budget
    proposes that these unanticipated resources support important
    priorities established by TEA-21, such as transit and research
    programs.
                                     ______

                      Questions Submitted by Senator Byrd

                    goals for alcohol-related traffic deaths
        Question. How will the administration reach its goal of reducing
    alcohol-related traffic deaths to 11,000 annually by 2005?
        Mr. Secretary, in February 1995, the DOT set a goal of reducing
    alcohol-related traffic deaths to 11,000 annually by the year 2005. At
    the time you made this announcement there were 16,589 such deaths
    annually. By 1997, that number had declined only by 400 to 16,189. This
    is an average of one alcohol-related death every 32 minutes. It does
    not look as if we are making any real progress toward your goal of
    11,000 deaths per year. How do you view the likelihood that you will
    reach your goal? Don't we need some dramatic new steps nationwide if
    you are going to meet your goal?
        Answer. The Department recognizes the national goal of reducing the
    number of alcohol-related fatalities to 11,000 by 2005 is very
    ambitious, and one that will not be reached through ``business as
    usual.'' With this recognition, in the fall of 1997, the Department
    brought together national partners to identify the action steps needed
    to reach this national goal. The steps necessary to reach the goal were
    determined and outlined in the group's report titled Partners in
    Progress: Impaired Driving Guide for Action.
        The required actions focus mainly on four areas: Public Education;
    Legislation; Enforcement; and Partnerships. Following these
    recommendations, NHTSA is making progress toward the goal. In 1995,
    there were 17,274 alcohol-related fatalities. That number decreased to
    16,189 in 1997, representing the lowest percent of alcohol-related
    fatalities in history (38.6 percent of all traffic fatalities). But
    much remains to be done.
        NHTSA's plans focus specific technical assistance and support to
    those states with the highest alcohol-related fatalities and rates.
    This effort will begin with a five-state demonstration in fiscal year
    1999, which will continue over a three-year period. The demonstrations
    will strongly emphasize highly publicized enforcement and education. If
    the results demonstrate a positive difference in those states with the
    most significant problems, NHTSA will continue to expand this focus to
    other high number states. States have the opportunity to also support
    this specialized enforcement initiative with TEA-21 funding through the
    Section 410 alcohol incentive grant program.
        In the fiscal year 2000 budget, NHTSA is requesting an additional
    $500,000 to undertake a new innovative grant program targeted at three
    high risk groups: (1) 21-24 year olds; (2) repeat and high BAC
    offenders; and (3) youth. This innovative grant program will allow
    NHTSA to seek new ideas and technologies to ``move the numbers'' and to
    reach some of these high risk targets that are over-represented in
    alcohol-related fatalities. In particular, special attention must be
    focused on the exploding youth population, including underage college
    students.
        NHTSA is building on the success of previous impaired driving-
    related public education campaigns. As recommended in the Partners in
    Progress action plan, NHTSA is developing a comprehensive multimedia
    campaign aimed at raising national awareness about the dangers of
    impaired driving and increasing public support for strict measures such
    as zero tolerance of underage drinking and the safety benefits of
    establishing .08 BAC laws. Resource kits will provide traffic safety
    partners with the necessary resources needed for effectively raising
    greater awareness about the deadly consequences of impaired driving.
    The resources will contain information such as how to effectively
    conduct public outreach, suggested partners, talking points, fact
    sheets, and public service announcements. As with other successful
    NHTSA safety campaigns, partners can add their names and logos to the
    ready-to-use material and implement the campaign in their communities
    at minimal cost and start-up effort.
        NHTSA places considerable emphasis on the critical role that
    national organizations will play in reaching high risk groups (youth
    and 21-34 year olds) and in supporting the Partners in Progress
    campaign. NHTSA will share media and public information materials
    developed for the campaign with national organizations representing
    employers, public health and medicine, youth and diversity populations.
    This effort is intended to educate the national organization members
    about the campaign and engage them in activities designed specifically
    to reduce the impaired driving problem.
        Finally, a high priority will be placed on engaging national
    organizations in support of the two national mobilizations to enforce
    the impaired driving laws planned for each July and December.
                      highway environmental review process
        Question. Should highway environmental review process be sped up
    for especially dangerous roads?
        The environmental review process for some of the most important
    road construction projects in my state has been painfully long. This
    problem has plagued not only Appalachian Regional Corridor H, but also
    the Route 9 project in the West Virginia Panhandle. The TEA-21 law
    included $50 million for the restoration of the West Virginia Route 10.
    This project received national press during the drafting of the TEA-21
    law because it was identified as one of the most dangerous roads in the
    country. Last month, two high school girls died when their car crashed
    into a coal truck on Roue 10. A third passenger was injured. I am not
    saying that these lives could have been saved if the environmental
    review process had been conducted more rapidly. But I am concerned that
    many more citizens will die across the country because of endless
    environmental hurdles that serve to delay efforts to rebuild very
    dangerous highways.
        Mr. Secretary, your agency is currently drafting rules to
    streamline the environmental review process for highway projects. Do
    you believe this streamlining initiative should take the potential
    danger of the road into account when determining which review should be
    expedited?
        Answer. The TEA-21 environmental streamlining initiative is
    intended to establish a process to enable the Department and its
    partners to increase the efficiency and effectiveness of the
    environmental review of major highway (and transit) projects. The
    initiative's goals are to coordinate Federal agency involvement in such
    projects by identifying decision points and potential conflicts as
    early as possible, encouraging full and early participation of all
    relevant agencies, and establishing coordinated time schedule for
    agencies to act on a project. The Department is presently engaged in a
    rulemaking exercise to develop the regulations and guidance with which
    we will implement the environmental streamlining initiative. The safety
    of surface transportation facilities, and the people who use them, is
    of high importance to the Department. The relative safety of a highway
    may be one of a number of factors which agencies involved in the
    environmental review of a project need to consider in the course of
    selecting and approving a preferred alternative. TEA-21 did not
    eliminate Federal requirements such as the National Environmental
    Policy Act (NEPA) or the Clean Air Act, and finding the appropriate
    balance between complying with Federal laws and streamlining project
    delivery is the central challenge facing us in implementing the this as
    well as other planning and environmental provisions of TEA-21.
        Question. Are there currently adequate provisions in the law to
    allow for an expedited review process for projects that are intended to
    improve very dangerous roads?
        Answer. Projects intended to improve the safety of a highway or
    other surface transportation facility receive adequate provision in
    terms of an expedited review process under laws which the Department
    currently conducts its procedures.
                        aviation competition guidelines
        Question. Will we ever see new aviation competition guidelines?
        The State of West Virginia is in great need of improved access to
    major aviation markets. Periodically, we have been approached by new
    entrant airlines that want to provide new service to West Virginia.
    However, as your Administration has observed, new entrant airlines
    usually face very tough competitive pressures from the major carriers
    to stay out of lucrative markets.
        Last year you issued proposed guidelines to protect new entrant
    airlines from these anti-competitive practices. The Omnibus
    Appropriations Act requires you to conduct some studies before final
    guidelines can be published. Do you still plan to come forward with new
    competition guidelines?
        Answer. The Department will issue its final guidelines following
    completion of the National Academy of Science's study (expected to be
    completed this spring) of airline competition and the Department's
    report to Congress on unfair competition and predatory pricing.
        Question. Is there any truth to the rumor that the major air
    carriers have convinced you to abandon your efforts to put a stop to
    anti-competitive practices?
        Answer. There is no truth to the rumor that major airlines have
    convinced us to abandon our efforts to stop anti-competitive practices.
    The Department has a responsibility to prevent unfair competition and
    the proposed policy is an important element in efforts to increase
    competition in the domestic airline industry.
        Question. What other efforts does the Administration have underway
    to improve aviation service to cities likes Charleston, Parkersburg,
    and Martinsburg, West Virginia?
        Answer. The Department has taken a series of actions and, in
    addition to competition guidelines which should help regional entrants,
    made legislative proposals to help competition and service to smaller
    communities. They include: (1) Exemptions from DOT rules administering
    landing and takeoff slots at Chicago O'Hare Airport to obtain regional
    jet service between Chicago and West Virginia, as well as other rural
    areas. (2) Modified Computer Reservation System rules to aid smaller
    airlines. (3) Proposed legislation that would give a blanket exemption
    to regional jets from the Federal high density slot rule at O'Hare,
    LaGuardia, and JFK airports effective September 30, 2000. (4) Proposed
    complete elimination of the Federal high density slot rule at O'Hare,
    LaGuardia, and JFK airports effective September 30, 2004, allowing five
    years for carriers and communities these five years of lead time to
    make any necessary preparations. (5) Proposed requiring joint fares and
    interline agreements between major carriers and smaller carriers at
    dominated hubs. (6) Proposed a 5-year, $35 million program to help
    smaller communities willing to provide 25 percent matching funds to
    obtain better air service.
                         highway emergency relief funds
        Question. Why is there no request for highway emergency relief
    funds?
        This afternoon, the Appropriations Committee will markup the
    Supplemental Appropriations Bill for the current fiscal year. I
    understand from the Federal Highway Administration that the emergency
    relief highway program is completely out of money. I further understand
    that there are over $365 million in requests pending at the Federal
    Highway Administration that cannot be funded. Obviously, there is also
    no money available for any national disasters that might require
    critical highway repairs for the remainder of this fiscal year. In
    prior years, we would have received a request from your department for
    emergency relief funds to replenish this program.
        Why have we not received any request to date from the
    Administration for this program? By delaying this request, won't the
    affected states have to wait an inordinately long time to be reimbursed
    for their disaster expenses? Do you expect that we will receive a
    formal budget request from your department for emergency relief funds
    any time in the next several weeks?
        Answer. It is true that there are very few unallocated funds left
    in the emergency relief program; however, the Department is able to
    borrow unallocated discretionary funds for emergency relief purposes.
    The Department is currently evaluating its options and will take the
    necessary steps in the very near future to meet State's needs.
                                     ______

                     Questions Submitted by Senator Murray

                                 sound transit
        Question. I agree with the Administration's view that increased
    spending on transit will help improve the livability of our
    communities. As you know, the central Puget Sound region is building an
    ambitious, top-quality high-capacity transit system that is 80 percent
    funded by taxes the resident voted to impose on themselves. I am very
    grateful that your budget recommends $8 million for preliminary
    engineering for Sound Transit's LINK light rail line and singles it out
    as one of the ``strongest candidates in the New Starts pipeline''.
    Sound Transit and FTA are engaged in intensive discussions about the
    Full Funding Agreement for LINK and FTA is understandably concerned
    about the size of this project. But can you assure me that your
    department will continue to work constructively and creatively with
    Sound Transit to develop a long-term federal funding strategy that
    meets your department's imperatives without adding to the cost or time
    of construction of the LINK light rail line?
        Answer. The Department will continue to work with Sound Transit
    throughout the project's development. The Department enters into full
    funding grant agreements with high quality projects which are ready to
    begin construction. The LINK light rail line is a very promising
    project which has been rated ``highly recommended'' by the Federal
    Transit Administration. LINK is one of only four projects in
    preliminary engineering which have been recommended for funding in
    fiscal year 2000 to further its development into final design.
                          airport improvement program
        Question. The Administration has proposed cutting the Airport
    Improvement Program from $1.9 billion to $1.6 billion and increasing
    the cap on airport Passenger Facility Charges from $3 to $5. At many
    Washington State airports, most of the passengers travel on low-fare
    airlines like Alaska, Southwest, America West and Horizon. PFCs hit
    low-fare passengers hardest because they are a flat fee unrelated to
    ticket price. Why couldn't we amend the AIP program so it can better
    address the needs of airports like the smaller airports in eastern
    Washington and spend some of the surplus in the Aviation Trust Fund
    rather than increasing PFCs?
        Answer. The Administration has proposed a comprehensive legislative
    package to meet the respective needs of large and small airports in the
    national aviation system. First, the proposal includes a $2 increase to
    the current $3 cap on PFCs. Ninety percent of PFC collections accrue to
    the nation's 70 large and medium hub airports. However, smaller
    airports would also benefit from a $2 PFC increase because of higher
    PFC receipts and because large and medium hub airports, under
    Administration's proposal, would forego all Airport Improvement Program
    (AIP) entitlements as a condition for receiving the higher PFC. These
    foregone funds (approximately $160 million per year) would be made
    available to smaller airports under existing AIP formulae.
        PFC revenues are better suited and more flexible than AIP revenues
    and other means of airport financing for funding projects at large
    airports, especially critical landside projects such as terminals and
    ground access to airports. PFC revenues can be used for a wider variety
    of projects than can AIP grants (especially terminal and financing
    costs), are predictable and reliable from year to year, do not require
    majority air carrier agreement, and facilitate the implementation of
    competitive terminal lease agreements. AIP can be targeted by the FAA
    toward critical development needs of smaller airports that do not have
    the enplanement levels needed to raise large amounts of PFC revenues.
        The effect of a PFC increase on ticket prices and air travel is
    difficult to measure. Air carriers may absorb some of the increases by
    lowering non-PFC ticket prices in order to maintain passenger demand
    levels. The price effect of a PFC increase on airfares (as measured by
    percentage increase) could be more pronounced for a low-fare ticket
    than a high-fare business ticket. However, low-fare, new-entrant
    airlines and their passengers will benefit most if, as we plan to
    encourage, large hub airports use higher PFCs to expand constrained
    terminal space at large hub airports.
                             harbor maintenance tax
        Question. The Administration's budget assumes enactment of a new
    Harbor Services User Fee to replace the harbor maintenance tax that has
    been found unconstitutional as applied to exports. In the Pacific
    Northwest, we are very concerned about this new user fee for two
    reasons: first, our Puget Sound ports don't need any harbor
    maintenance, so the fees collected there are spent elsewhere; and more
    importantly, we are afraid that it may force shipping lines to leave
    our ports and call instead at Vancouver, British Columbia, where they
    don't have this fee. Has your department raised concerns about these
    port competitiveness issues within the Administration? Since this
    proposal hasn't yet been submitted to Congress, would you start/keep
    pressing those in the Administration to address this issue before
    finalizing this proposal?
        Answer. The Department will work within the Administration to
    ensure that your concerns are raised.

                              subcommittee recess

        Senator Campbell. I think we are about finished up. So we
    will next reconvene on next Wednesday, March 10, here at
    Dirksen 124 at 10:00 a.m. to discuss Amtrak finance and
    operational issues. We will hear from Ken Meade the Department
    of Transportation Inspector General; from Mr. George
    Warnington, Amtrak's President; and Wisconsin Governor Tommy
    Thompson, the chairman of the new Amtrak board of directors.
        With that, I thank you and this hearing of the Subcommittee
    on Transportation is now recessed.
        Thank you, Mr. Secretary.
        [Whereupon, at 11:45 a.m., Thursday, March 4, the
    subcommittee was recessed, to reconvene at 10 a.m., Wednesday,
    March 10.]

     DEPARTMENT OF TRANSPORTATION AND RELATED AGENCIES APPROPRIATIONS FOR
                                FISCAL YEAR 2000

                                  ----------

                           WEDNESDAY, MARCH 10, 1999

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:10 a.m., in room SD-124, Dirksen
    Senate Office Building, Hon. Richard C. Shelby (chairman)
    presiding.
        Present: Senators Shelby, Domenici, Specter, Campbell,
    Lautenberg, Reid, and Kohl.

                     AMTRAK FINANCE AND OPERATIONAL ISSUES

                NATIONAL RAILROAD PASSENGER CORPORATION (AMTRAK)

    STATEMENT OF GEORGE WARRINGTON, PRESIDENT
    ACCOMPANIED BY HON. TOMMY THOMPSON, GOVERNOR OF WISCONSIN, CHAIRMAN,
                AMTRAK BOARD OF DIRECTORS

                          DEPARTMENT OF TRANSPORTATION

                          Office of Inspector General

    STATEMENT OF HON. KENNETH M. MEAD, INSPECTOR GENERAL

                     OPENING STATEMENT OF RICHARD C. SHELBY

        Senator Shelby. The meeting will come to order. This
    morning's hearing will center on the National Railroad
    Passenger Corporation or, as we know it, Amtrak. We will
    discuss issues relating both to Amtrak's short and long-term
    financial health and to the operational decisions which
    determine the railroad's present and future status.
        I think at times, although maybe not by my friend from New
    Jersey, I think I have been misunderstood on the subject of
    Amtrak. Many of my congressional colleagues and members of the
    press and public seem to believe that all I am interested in as
    the chairman of this subcommittee is killing off the railroad.
    I want to set the record straight. I am not out to kill Amtrak.
    I am here, working with Senator Lautenberg, to try to make
    Amtrak work for you, real work.
        But what I see when I look at this railroad is a Federal
    investment that up to now is not paying off the way it could,
    or I believe it should. When Amtrak receives its second
    Taxpayer Relief Act payment next month, we will have spent more
    than $22.6 billion on this organization since it was formed in
    1971, Governor, an average Federal cost of $800 million a year,
    and what are we getting for our money? That is what we want to
    ask.
        Well, in some parts of the country, honestly, we are
    getting a very important and efficient alternate mode of
    transportation. There are certain corridors, usually linking
    densely populated urban areas that are not more than 300 miles
    apart, where Amtrak can give the passenger car and the airlines
    a real run for their money in terms of cost, travel time,
    frequency, and quality of service, and of course reliability,
    but this is the exception rather than the rule.
        In fact, many of the Amtrak routes operate only three or
    four times a week and stop at inconvenient hours of the night
    in stations that do not even have the basic amenities such as
    restrooms or water fountains.
        The financial performance of Amtrak routes varies widely,
    but every route save one loses money, and 14 routes lose more
    than $100 per passenger trip. System-wide in fiscal year 1997
    Amtrak lost an average of $47 per passenger. There are parts of
    this rail system that just do not make economic sense, and it
    is clear that we have to push Amtrak to do something
    differently if we expect to get different results.
        Since assuming chairmanship of this subcommittee I have
    actively looked for ways that Amtrak can save the American
    taxpayer some of the money that it has spent in covering its
    operating losses. I am convinced that the best way to improve
    Amtrak's financial picture is for the railroad to be more
    responsive to the demands of the market. Amtrak currently
    carries 21 million inter-city passengers annually, or about as
    many in a year as would fly over an average 13-day period. This
    is not an impressive market share. Amtrak must concentrate its
    efforts on business decisions I believe that are economically
    justified.
        For example, Governor Thompson understands business. If I
    manufacture bicycles and kept producing banana seat bikes long
    after consumer preference had switched to mountain bikes and
    10-speeds, I would not be making an economically justified
    business decision. I would lose money, and perhaps my business.
        Now, there might be a small and vocal segment of the
    bicycle-riding public who really liked banana seats and wanted
    to continue riding them, but that does not mean that my company
    could afford to commit the same amount of capital to making
    banana seat bikes at the expense of investing in other product
    lines that the bicycle public does want to buy.
        Similarly, Amtrak cannot afford to continue doing business,
    I believe, in a manner that is not responsive to its market,
    the traveling public. In particular, the current route
    structure and labor agreement stacked the deck against the
    railroad ever being able to be operationally self-supporting.
        Admittedly, Amtrak's long distance routes have become the
    expensive exercise in nostalgia. The American taxpayers should
    not have to subsidize lines of business that will never come
    close to breaking even, especially if only a handful of riders
    use the service provided.
        The Department of Transportation's Office of Inspector
    General has taken a hard look at Amtrak's current financial
    status and strategic business plan, which sets out Amtrak's
    operating and capital budgets for the fiscal year 1999 until
    2002. One of the most telling results of this review is that
    Amtrak's projected Federal funding will fall short of even
    minimal capital investment needs.
        Now, capital investments are needed to keep any railroad's
    infrastructure in good operating condition and to generate new
    business opportunities. Every dollar spent unnecessarily on
    operating losses is a dollar taken from capital investment.
        Amtrak's current infrastructure is too widespread and is
    not targeted to service that are economically justified.
    Amtrak's plans for the future become like a house of cards, and
    unless the foundations are glued down to market-driven
    decisions, the entire structure can come tumbling down all too
    easily.
        Since I seem to be focusing on sobering news today, I will
    take this opportunity to sound the warning. Amtrak may be
    privatized a lot quicker than we all thought. If Chairman
    Schuster's aviation bill becomes law, Federal Aviation
    Administration programs will be increased by $5 billion, and
    fire-walled off from any appropriations adjustment. Think about
    that.
        So there will not be any room left other than discretionary
    budget accounts in this transportation appropriations bill for
    Amtrak or for any other--any other--Department of
    Transportation programs assigned to FAA, highways, or transit,
    for that matter.
        I hope that everyone here who supports rail programs knows
    that and heard that warning.
        I would like to welcome our three witnesses this morning.
    The Amtrak Reform and Accountability Act restructured the
    management of the railroad by setting up a new reform board,
    whose chairman, Governor Tommy Thompson, joins us today. The
    board must vote on all of Amtrak's financial decisions and
    approve the strategic business plan that lays out the operating
    and capital program for the railroad from 1999 through the year
    2002, after which the railroad, Governor, must, under the ARAA,
    achieve operating self-sufficiency.
        For the fiscal year 2000, Amtrak is requesting $571 million
    and wants Congress to authorize the railroad to use these funds
    flexibly for any maintenance costs as well as for equipment,
    land, and rights of way purchase and construction cost.
        We will ask Governor Thompson to defend this budget
    request. In addition, Amtrak's president, George Warrington,
    will testify here today, and I hope that Mr. Warrington can
    tell us how Amtrak is changing its operations in order to be
    more economically sustainable and responsive to market forces.

                               prepared statement

        Finally today, the Department of Transportation Inspector,
    General Ken Mead, has joined us again after being before this
    subcommittee only 2 weeks ago to testify on DOT management
    issues. Today, Mr. Mead will summarize the findings of the
    recent independent assessment of Amtrak's finances, and the
    railroad's strategic business plan, and share the results of
    that analysis.
        I thank you, gentlemen, for joining us today.
        [The statement follows:]

                Prepared Statement of Senator Richard C. Shelby

        The subcommittee will now come to order. This morning's hearing
    will center on the National Railroad Passenger Corporation, or Amtrak.
    We will discuss issues relating both to Amtrak's short- and long-term
    financial health, and to the operational decisions which determine the
    railroad's present and future status.
        I think I've been misunderstood on the subject of Amtrak. Many of
    my Congressional colleagues and members of the press and public seem to
    believe that all I'm interested in is killing off the railroad. I want
    to set the record straight: I am not out to kill Amtrak. But what I see
    when I look at this railroad is a federal investment that is not paying
    off the way that it could or should.
        When Amtrak receives its second Taxpayer Relief Act payment next
    month, we will have spent more than $22.6 billion on this organization
    since it was formed in 1971--an average federal cost of $800 million a
    year. And what are we getting for our money? Well, in some parts of the
    country, we are getting a very important and efficient alternate mode
    of transportation. There are certain corridors, usually linking densely
    populated urban areas that are not more than 300 miles apart, where
    Amtrak can give the passenger car and the airlines a real run for their
    money--in terms of cost, travel time, frequency and quality of service,
    and reliability. But this is the exception rather than the rule. In
    fact, many of Amtrak's routes operate only three or four times a week,
    and stop at inconvenient hours of the night in stations that don't even
    have the basic amenities, such as restrooms or water fountains. The
    financial performance of Amtrak's routes varies widely, but every route
    save one loses money--and 14 routes lose more than $100 per passenger
    trip. System-wide, in fiscal year 1997, Amtrak lost an average of $47
    per passenger. There are parts of this rail system that just don't make
    economic sense, and it is clear that we have to push Amtrak to do
    something differently, if we expect to get any different results.
        Since assuming chairmanship of this subcommittee, I have actively
    looked for ways that Amtrak can save the American taxpayers some of the
    money that is spent covering its operating losses. I am convinced that
    the best way to improve Amtrak's financial picture is for the railroad
    to be more responsive to the demands of the market. Amtrak currently
    carries 21 million intercity passengers annually, or about as many in a
    year as would fly over an average 13-day period. This is not an
    impressive market share. Amtrak must concentrate its efforts on
    business decisions that are economically justified.
        If I manufactured bicycles, and I kept producing ``banana seat''
    bikes long after consumer preference had switched to mountain bikes and
    10-speeds, I would not be making an economically justified business
    decision. I would lose money, and perhaps my business. Now, there might
    be a small and vocal segment of the bicycle-riding public who really
    likes banana seats and wants to continue riding them. But that doesn't
    mean that my company can afford to commit the same amount of capital to
    making banana seat bikes, at the expense of investing in other product
    lines that the bicycling public does want to buy.
        Similarly, Amtrak cannot afford to continue doing business in a
    manner that is not responsive to its market, the traveling public. In
    particular, the current route structure and labor agreements stack the
    deck against the railroad ever being able to be operationally self-
    supporting. Many of Amtrak's long-distance routes have become an
    expensive exercise in nostalgia. The American taxpayers should not have
    to subsidize lines of business that will never come close to breaking
    even, especially if only a handful of riders use the service provided.
        The Department of Transportation's Office of Inspector General has
    taken a hard look at Amtrak's current financial status and strategic
    business plan, which sets out Amtrak's operating and capital budgets
    for fiscal years 1999 through 2003. One of the most telling results of
    this review is that Amtrak's projected federal funding will fall short
    of even minimum capital investment needs. Now, capital investments are
    needed to keep any railroad's infrastructure in good operating
    condition and to generate new business opportunities. Every dollar
    spent unnecessarily on operating losses is a dollar taken from capital
    investment. Amtrak's current infrastructure is too widespread, and is
    not targeted to services that are economically justified. Amtrak's
    plans for the future become like a house of cards--and unless the
    foundations are glued down to market-driven decisions, the entire
    structure can come tumbling down all too easily.
        Since I seem to be focusing on sobering news today, I'll take this
    opportunity to sound the warning trumpet. Amtrak may be privatized a
    lot quicker than we all thought. If Chairman Shuster's aviation bill
    becomes law, Federal Aviation Administration programs will be increased
    by $5 billion and firewalled off from any appropriations adjustment. So
    there won't be any room left under the discretionary budget caps in
    this transportation appropriations bill for Amtrak, or for any other
    Department of Transportation program besides the FAA, highways, or
    transit, for that matter.
        I hope that everyone here who supports rail programs heard that
    warning.
        I'd like to welcome our three witnesses this morning. The Amtrak
    Reform and Accountability Act restructured the management of the
    railroad by setting up a new Reform Board, whose Chairman, Governor
    Tommy Thompson, joins us today. The Board must vote on all of Amtrak's
    financial decisions, and approves the strategic business plan that lays
    out the operating and capital program for the railroad from 1999
    through the end of 2002, after which the railroad must, under the ARAA,
    achieve operating self-sufficiency.
        For fiscal year 2000, Amtrak is requesting $571 million, and wants
    Congress to authorize the railroad to use these funds flexibly for any
    maintenance cost, as well as for equipment, land, and rights-of-way
    purchase and construction costs. We will ask Governor Thompson to
    defend this budget request. In addition, Amtrak's President George
    Warrington will testify. I hope that Mr. Warrington can tell us how
    Amtrak is changing its operations in order to be more economically
    sustainable and responsive to market forces.
        Finally, Department of Transportation Inspector General Ken Mead
    has joined us again, after being before this subcommittee only two
    weeks ago to testify on DOT management issues. Today, Mr. Mead will
    summarize the findings of the recent independent assessment of Amtrak's
    finances and the railroad's strategic business plan, and share the
    results of that analysis. Thank you joining us today, gentlemen.
    Senator Lautenberg, do you have an opening statement?

                        STATEMENT OF FRANK R. LAUTENBERG

        Senator Shelby. Senator Lautenberg.
        Senator Lautenberg. Thanks very much, Mr. Chairman, and I
    want to say this about our chairman, who is my friend and with
    whom I have served on this subcommittee for a number of years.
    I liked it better when I was chairman, [Laughter.]
        But I will say this. Senator Shelby has raised the alarm,
    has cautioned us about expenditures and so forth, but he has I
    must say, despite some misgivings, despite some of his
    concerns, has enabled us to continue to support Amtrak and we
    have had a good, honest debate about it, and I hope that we
    will be able to continue in that vein, and as Senator Shelby,
    both of us have had some business experience before here, and
    the question of banana seats on the bikes is an interesting
    one, but I would rather use the analogy perhaps of some
    emergency facilities like a hospital or something like that.
        We can shut it down if it does not carry its weight, but
    the impact on the community is one that is so severe that it is
    even, I think, dangerous to contemplate, that the railroad
    could not function or these other facilities could not
    function, because we face a congestion apocalypse in this
    country, and I know from being a regular user of either
    airports, up to the New York-New Jersey area, or the railroad,
    and I want to tell you, Amtrak is there like a life raft on
    many occasions.
        It was not too long ago the airport had routine weather
    problems, and I was out there with Senator Boxer. We were going
    to New York to an engagement, and it was impossible. They were
    canceling flight after flight after flight, and we got in a
    taxi, we ran to the railroad, we were lucky we were able to get
    seats--I used Senator Shelby's name--[Laughter.]
        In July 1990, in the glorious days when I was serving as
    chairman of this subcommittee, I was presented with a unique
    and rare opportunity. In making the very hard choices that all
    subcommittee chairmen are required to make when developing an
    appropriations bill, I found at the end of a grueling process
    that I had $200 million in budget authority unused. It was then
    that I provided a fairly significant boost to the Northeast
    Corridor improvement program so that we would finally begin the
    process of electrifying the railroad all the way to Boston and
    provide other enhancements to bring about truly high speed rail
    in the Northeast.
        After going to conference with the House, we successfully
    brought funding for that program from $24 million to $179
    million in a single year, and since that time the annual level
    of investment has only grown, and I say that without shame.
        The chairman reminded us that we spent some $20 billion
    since the early seventies--was it early seventies?
        Senator Shelby. 1971.
        Senator Lautenberg. And I see in some of the statistics
    that we have available that Germany is going to spend $70
    billion in a decade, France will spend $25 billion in 5 years
    based on GAO information, so that we are structured differently
    geographically, but in order to have a balanced transportation
    system--we are overloaded in the skies. Look at the delay times
    in every airport in the country, and particularly in a crowded
    airport like Newark Airport, but wherever you go, delays,
    delays, delays, and often inability to even get where you want
    to go.
        Well, it is clear to me that Amtrak would not have had a
    future without a truly first-class high speed service in the
    most congested corridor in the Nation. Today, with the
    initiation of high speed service just months away, we see even
    more clearly that the entire future of the railroad depends on
    the success of this initiative.
        Much has happened to Amtrak since July 1990, not the least
    of which was the enactment of the Amtrak Reform and
    Accountability Act of 1997. That law promised dramatically
    increased capital investment in Amtrak, roughly $5 billion over
    5 years. In exchange for that meaningful investment, Amtrak
    would be required to reduce its Federal operating subsidy to
    zero by the year 2003.
        That requirement now looms large in the minds of Amtrak
    leadership, the administration, and the Congress. As such, it
    now appears that the entire near-term financial survival of the
    railroad is dependent on the new revenue expected from the high
    speed rail initiative begun in 1991.
        This morning, we are going to hear a debate between
    Amtrak's management and the Inspector General over how much
    revenue we can expect from this initiative in the fiscal year
    2000. The IG will tell us that in his view Amtrak has
    overestimated the revenue that it should expect this coming
    year.
        Importantly, however, the IG will also testify that between
    now and 2006 Amtrak has underestimated the total revenues that
    they might expect from high speed rail, so the debate is not
    over whether Amtrak will get these new revenues. The only issue
    is when.
        According to Amtrak's projections, by 2002 the Northeast
    Corridor will generate 180 million in annual profits from the
    high speed rail service, but this new income stream by itself
    will not get Amtrak out of the woods. The IG estimates that
    Amtrak has substantial unmet capital needs totalling more than
    $3 billion that are not currently reflected in the railroad's
    investment plan, but we have to look back and see what happened
    in 1991 when we began to make the kind of investments to
    modernize a portion of the Amtrak system which now could
    actually achieve a profit.
        Now, as we enter the new millennium, we will see that that
    investment finally is going to be paid off. The question that
    we must now ask ourselves is, will we permit ourselves to
    return to the judgment of the past, or will we make the
    necessary investments to continue to modernize the railroads.
        Having made the investment to modernize the Northeast
    Corridor, will we now let it, and the entire national rail
    network, deteriorate for the lack of adequate continued
    investment?
        Now, I feel compelled to remind my colleagues that the
    Amtrak Reform Act anticipated continued sizable capital
    appropriations well into the future. The act called for
    operating self-sufficiency, not total self-sufficiency, which
    is quite different when you are talking about the capital
    costs, et cetera.
        As we have gotten closer to the initiation of high speed
    rail in the Northeast Corridor, we have heard increasing
    interest from other regions. Even Birmingham, Alabama has an
    interest in high speed service.
        Senator Shelby. Absolutely.
        Senator Lautenberg. These regions include the Pacific
    Northwest, the South, and the Midwest, where our witness this
    morning, Tommy Thompson, whom we welcome here, has been an
    outspoken advocate for improved rail service, and as a fellow
    advocate of Amtrak and high speed rail I welcome their
    interest.
        Amtrak's detractors have always liked to focus on the
    considerable dollars that are lost per passenger on the long
    distance trains that operate outside of the Northeast.
    Unfortunately, so long as that service is slow and not really
    comfortable, those dollar losses will persist. I believe that
    higher speeds and reliable service could make a big difference
    to those cars, but it must be recognized up front that the cost
    of these improvements will be substantial.
        In evaluating Amtrak's real fiscal needs in comparison to
    its current strategic plan, the IG performed a very valuable
    service in identifying the amount of Federal investment that
    will be needed if Amtrak is to make real progress in these
    outer corridors.
        According to the IG, it would require an additional $450
    million each year over and above the levels requested in the
    budget for Amtrak to make the substantial investment needs in
    development of these cars, so for those of my colleagues who
    are interested in these new cars in the Midwest, the West, the
    South, and the Northwest, I point out the cost of meaningful
    development is not only the $571 million Amtrak has requested
    for fiscal 2000. The cost is more like $1.12 billion per year,
    $1 billion $120 million. If the funding for those cars is not
    going to come from Amtrak's budget, it is going to have to come
    from somewhere else.
        Mr. Chairman, I for one am prepared to submit an
    appropriation that serves the needs of really getting this
    passenger rail service on its feet. That is the $1.2 billion
    for Amtrak. I have never apologized for my support of
    investment in improved rail service that relieves congestion.
    We are dozens of years and billions of dollars behind our
    industrial competitors in terms of investment in passenger rail
    service, and if we cannot provide that level of funding for
    Amtrak, Mr. Chairman, I hope we will at least listen to a
    resolution recently adopted by our Nation's Governors and grant
    the States the necessary flexibility to use their highway
    formula dollars to make investments in high speed rail.
        These are sound investments that Governors will not make if
    they do not make sense, and I hope my colleagues from all over
    the country, especially those who are interested in these new,
    improved rail cars, will join me in these efforts.
        Mr. Chairman, yesterday there was an announcement about
    what might be happening when we get our new rail service
    underway. That should be by the end of this year, and there is
    enormous excitement about the possibilities that exist. They
    call it new moon for Amtrak, not boom.

                               prepared statement

        Senator Shelby. I want to ride on that train with Senator
    Lautenberg, as long as he is not the engineer.
        Governor Thompson. I have already promised Senator
    Lautenberg that he can help drive it.
        [The statement follows:]

                    Prepared Statement of Senator Lautenberg

                     amtrak finance and operational issues
        In July of 1990, while serving as Chairman of this subcommittee, I
    was presented with a unique and rare opportunity. In making the very
    hard choices that all subcommittee chairmen are required to make when
    developing an appropriations bill, I found, at the end of a grueling
    process, that I had $200 million in budget authority left over. It was
    then that I provided a dramatic boost to the Northeast Corridor
    Improvement Program so that we would finally begin the process of
    electrifying the railroad all the way to Boston, and provide other
    enhancements to bring about truly high speed rail in the Northeast.
    After going to Conference with the House, we successfully brought
    funding for that program from $24 million to $179 million in a single
    year. Since that time, the annual level of investment has only grown.
    It was clear to me then that Amtrak didn't have a future without truly
    first class high-speed service in the most congested corridor in the
    nation. Today, with the initiation of high speed service just months
    away, we see even more clearly that the entire future of the railroad
    depends on the success of this initiative.
        Much has happened regarding Amtrak since July of 1990, not the
    least of which was the enactment of the Amtrak Reform and
    Accountability Act of 1997. That law promised dramatically increased
    capital investment in Amtrak, roughly $5 billion over five years. In
    exchange for that meaningful investment, Amtrak would be required to
    reduce its federal operating subsidy to zero by the year 2003. That
    requirement now looms large in the minds of Amtrak's leadership, the
    Administration, and the Congress. As such, it now appears that the
    entire near-term financial survival of the railroad is dependent on the
    new revenue expected from the high-speed rail initiative begun in 1991.
        This morning, we will hear a debate between Amtrak's management and
    the Inspector General (IG) over how much revenue we can expect from
    this initiative in fiscal year 2000. The IG will tell us that, in his
    view, Amtrak has overestimated the revenue it should expect this coming
    year. Importantly, however, the IG will also testify that, between now
    and 2006, Amtrak has underestimated the total revenues they should
    expect from high-speed rail. So the debate is not over if Amtrak will
    get these new revenues. The only issue is when.
        According to Amtrak's projections, by 2002, the Northeast Corridor
    will generate $180 million in annual profits from the high-speed rail
    service. But this new income stream, by itself, will not get Amtrak out
    of the woods. The IG estimates that Amtrak has substantial unmet
    capital needs totaling more than $3 billion that are not currently
    reflected in the railroad's investment plans.
        Starting in 1991, we began to make the kind of investments to
    modernize a portion of the Amtrak system such that it could actually
    achieve a profit. Now as we enter the new millennium, we will see that
    investment finally pay off. The question that we must now ask ourselves
    is will we return to the mistakes of the past or will we make the
    necessary investments to continue to modernize the railroad? Having
    made the investment to modernize the Northeast Corridor, will we now
    let it and the entire national rail network deteriorate for lack of
    adequate continued investment? I feel compelled to remind my colleagues
    that the Amtrak Reform Act anticipated continued sizable capital
    appropriations well into the future. The Act called for operating self-
    sufficiency, not total self-sufficiency.
        As we have gotten closer to the initiation of high-speed rail in
    the Northeast Corridor, we have heard increasing interest from other
    regions of the country in modernizing their rail service. These regions
    include the Pacific Northwest, the South, and the Midwest, where our
    witness this morning, Governor Thompson, has been an outspoken advocate
    for improved rail service. As a fellow advocate of Amtrak and high-
    speed rail, I welcome their interest. Amtrak's detractors have always
    liked to harp on the considerable dollars that are lost per passenger
    on the long distance trains that operate outside of the Northeast.
    Unfortunately, so long as that service is slow and unpredictable, those
    dollar losses will persist. I believe that higher speeds and reliable
    service can make a big difference in those corridors. But it must be
    recognized, up front, that the cost of those improvements will be
    substantial!
        In evaluating Amtrak's real fiscal needs in comparison to its
    current strategic plan, the Inspector General performed a very valuable
    service in identifying the kind of federal investment that will be
    needed if Amtrak is to make real progress in these other corridors.
    According to the IG, it would require an additional $450 million each
    year, over and above the levels requested in the budget, for Amtrak to
    make substantial investment in the development of these corridors. So,
    for those of my colleagues who are interested in these new corridors in
    the Midwest, the West, the South, and Northwest, I point out that the
    cost of meaningful development is not just the $571 million Amtrak has
    requested for fiscal year 2000. The cost is more like $1.12 billion per
    year. If the funding for those corridors isn't going to come from
    Amtrak's budget, it is going to have to come from somewhere else.
        Mr. Chairman, I, for one, am prepared to support an appropriation
    of $1.12 billion for Amtrak. I have never apologized for my support of
    investment in improved rail service that relieves congestion and eases
    pollution. We are dozens of years and billions of dollars behind our
    industrial competitors in terms of investment in passenger rail
    service. If we can't provide that level of funding for Amtrak, Mr.
    Chairman, I hope we will at least listen to a resolution recently
    adopted by our nation's governors and grant the states the necessary
    flexibility to use their highway formula dollars to make investments in
    high speed rail. These are sound investments that Governors will not
    make if they don't make sense. I hope my Senate colleagues from all
    over the country, especially those who are interested in new improved
    rail corridors, will join with me in these efforts.

                      STATEMENT OF BEN NIGHTHORSE CAMPBELL

        Senator Shelby. Thank you. Senator Campbell.
        Senator Campbell. Thanks, Mr. Chairman. I will submit a
    statement for the record.
        Senator Shelby. Without objection, it will be made part of
    the record.
        Senator Campbell. Let me make a couple of general comments.
    It is nice to see my friend Governor Thompson here, who I know,
    whose primary interest in transportation happens to be on two
    wheels, like mine, rather than rail, but I am sure he did not
    ride his bike in the snow days when I did.
        I think I understand a little bit about Amtrak and the fact
    it has been in the red for so many years now. There has been
    some consternation on some of our colleagues' parts about
    putting more money into it, and I very frankly believe that
    making it self-sufficient by 2002 is a little unrealistic, but
    having lived in Japan a number of years, I lived there 4 years,
    I absolutely got addicted to the bullet train in Japan. I found
    it the most convenient, fast, and relaxing, if you can relax at
    150 miles an hour on rails, a form of transportation, and I
    would ride that much more than having to go by car or airplane
    when I was traveling around Japan those 4 years, so I am a big
    believer.
        You mention only one corridor is making money. I assume
    that is the Northeast Corridor. So I am not sure it fits as
    well all over the country, out where we live in the mountains I
    know there are fewer riders and less big metropolitan areas and
    so on, and I do not know what the reform board has in mind to
    tackle those areas that does not have that ridership, but at
    this point I am still inclined to support Amtrak. I think it
    has a very needed place in our future transportation.
        Thank you, Mr. Chairman.

                             STATEMENT OF HERB KOHL

        Senator Shelby. Senator Kohl.
        Senator Kohl. Thank you, Mr. Chairman. I am glad today that
    with our Governor here we have good, strong representation from
    the State of Wisconsin.
        Though many think of Amtrak as being an issue mostly of
    concern to the Northeast, a successful Amtrak is just as vital
    to those of us who live in the Midwest. In fact, there is no
    place that will not benefit from a strong and balanced
    transportation system, one that includes a revitalized rail
    system. Just as Wisconsin sits at the center of the Nation, a
    strong Amtrak sits at the center of a transportation system of
    planes, trains, and automobiles.
        Ridership on Amtrak is up in Wisconsin and up across the
    country. Last year a half-million Wisconsinites rode on Amtrak.
    With the help of this subcommittee we tried to meet this
    increased demand. We supported a plan for more commuter rail in
    the Kenosha/Racine/Milwaukee corridor, and dedicated funds to
    the Midwest high speed rail initiative, an ambitious plan for
    the nine Midwestern States and our regional rail system.
        Indeed, we invested a great deal to keep Amtrak viable.
    Investment so far has been worth it, but for the long term,
    much is left to be done. For this reason, it is my hope that we
    will leave here today with renewed confidence in Amtrak's
    business plan, its efforts to improve customer service, and its
    ability to increase both fare box and nonpassenger revenues.
        It is my honor to introduce and warmly welcome our first
    witness, Wisconsin Governor Tommy Thompson, chairman of the
    Amtrak board of directors. We know that he brings a good dose
    of Wisconsin know-how and common sense to his work for Amtrak.
    Our presence together here today should stand as solid evidence
    that passenger rail is alive and well in the Midwest. We thank
    you, Governor Thompson, for joining us here today. We thank you
    also, Mr. Warrington and Mr. Mead. We look forward to your
    input, and with that, we pass the microphone to you.

                          statement of tommy thompson

        Senator Shelby. Governor Thompson, your written statement,
    all of your written statements will be made part of the record
    in its entirety. You may proceed as you wish.
        Governor Thompson. Thank you, sir, very much. First, let me
    thank my friend Senator Kohl for introducing me, and thank him
    so very much for being a strong supporter of passenger rail
    service in Wisconsin.
        Senator Lautenberg, it is always a pleasure to meet you
    again and talk to you about our mutual love affair with
    passenger rail service in America.
        Senator Shelby. Governor, you are going to make him take a
    test before letting him engineer the train, aren't you?
        Governor Thompson. No, I trust him.
        Senator Lautenberg. The wonderful thing about new trains
    is, it does not spill a drink. It does not. It is very level.
    [Laughter.]
        Governor Thompson. Mr. Chairman, I would like to say thank
    you to you, and I appreciate your statement, and I am here to
    tell you that I have the same concerns, and I want to address
    your concerns this morning, and I thank you so very much for
    raising them.
        Senator Campbell, I would like to, just for the record,
    point out that in 1981 our favorite motorcycle company was in
    terrible shape. In fact, it was bankrupt, and it was putting
    out an inferior product, and then, because of new management,
    new direction, it went from bankruptcy, with the help of the
    Federal Government and the State of Wisconsin government, it--
    Harley Davidson--turned around and is now the champion
    motorcycle in the world. It is the only real motorcycle being
    built in the United States, and both Senator Campbell and I
    drive, or ride, Harley Davidsons.
        Senator Shelby. And a waiting period to buy one.
        Governor Thompson. It is not a good time to buy one. You
    have to wait 14 months to buy one now.
        Senator Shelby. Except for you and Senator Campbell.
        Governor Thompson. Oh, Senator Campbell and I could
    probably get one. If you want one, Senator Shelby, we will see
    what we can do to help get you one.
        And I also would like to point out that that is the same
    thing we intend to do with Amtrak, and so I am appearing before
    you today in my role as chair of the Amtrak Reform Board--an
    entity that you people, the Senate and the Congress, brought
    into existence 10 months ago. We have only been in operation 10
    months--and I am here to represent the views of the entire
    board.
        When I was first approached by Speaker Gingrich, and the
    White House, I thought long and hard about joining the Amtrak
    Reform Board. I served on the Amtrak Board from 1990 to 1994,
    and it was not a totally pleasant experience. I am familiar
    with the difficulties Amtrak faces up here, and I certainly was
    brought to that realization again by listening to my friend
    Senator Shelby this morning. I know it is a tough situation
    facing this Subcommittee, but to try and put the levels of
    investment in perspective here, highways will see nearly $30
    billion in Federal funding this year, aviation about $11
    billion, mass transit about $5 billion, and maritime about $4
    billion. Amtrak, we are only asking for $571 million--M, not
    B--that is with an M.
        Now, my State depends upon Amtrak, as all of your States
    do, so when I was approached, I looked a little closer at the
    company. The General Accounting Office and the DOT IG said,
    ``Amtrak is in precarious financial condition.'' I have heard
    the same thing about the welfare system. It does not mean you
    should avoid the responsibility and the opportunity to serve.
    It means you should commit yourself to improving it, and that
    is what I have done.
        I accepted the responsibility of being on the Amtrak Board,
    and I have the support of my colleagues on the Board, who
    elected me as chairman. The rest of the board is absolutely
    passionately committed to turning Amtrak around. Michael
    Dukakis is the vice chairman, and as you know, Senator Shelby,
    Michael Dukakis and I do not agree on very much at all, over
    the years, but I want you to know that Michael Dukakis and
    myself are 100 percent together on this, and we are dedicated
    to turning around Amtrak for you, Senator Shelby, for the
    Senate, for the Congress, and for the people of the United
    States.
        The reauthorization bill passed in 1997 demonstrated that
    Congress and the country want a national passenger railroad
    system, and it explicitly recognized rail as essential to a
    balanced transportation system for mobility, accessibility,
    congestion relief, and economic growth. The legislation said,
    ``operate the system like a business and make this business
    grow,'' so I and my colleagues on the Board accepted this
    challenge, and that is exactly, Senator Shelby, what we intend
    to do.
        Our strategy is not complicated. It has six components. We
    know we need to maintain a national system, because a system
    that serves only the Northeast Corridor is not going to get the
    support of you, Mr. Chairman, or Speaker Hastert, or Senator
    Kohl, or Governor Davis of California, or Senator Campbell, or
    Senator Lott, nor many of the other Members of this
    Subcommittee. We need to become operationally self-sufficient
    because the law requires it, and I would like to say we are
    going to do it by the year 2003, and we are committed to making
    that happen.
        First, we adopted a business plan in October. Now, the
    Inspector General is going to give you information on the
    business plan that was in existence last year. The operational
    business plan that we adopted is brand new and different from
    that. We adopted it in October of this past year. It will get
    us to operating self-sufficiency by 2003. I will repeat, we are
    going to reach that goal, and we are already ahead of our
    operational business plan that we adopted in October. We have
    only had this plan in place now for 5 months, and we are
    already $11.2 million ahead of the business plan that will make
    us operationally self-sufficient by the year 2003.
        Second, we are going to build a market-based network just
    like you asked us to, Mr. Chairman. For the first time, Amtrak
    is going to work to define a national system in market terms.
    We are going to look--we are reviewing, this year, every
    service we are operating. We are going to gauge it as far as
    the potential it has, what we are losing on it, and what we
    need to do to turn it around. We are making an intensive study
    of that particular aspect of our business.
        Third is to develop corridor services. Amtrak is going to
    take the expertise it has gained by planning, engineering, and
    implementing the complex infrastructure upgrades in the
    Northeast Corridor, and use it to develop new rail corridors
    across the country.
        I happen to be excited about what is happening on the
    Northeast Corridor. We were in New York for the last 2 days,
    where we kicked off our business plan and our new operational
    plan for high speed rail, and right there we had more
    individuals come out and more press than you can imagine. There
    is a new love affair for passenger rail service in America.
    There is a new renaissance, and we are going to put these high-
    speed trains on the track, and we are going to be able to go
    from New York, Mr. Chairman, to Washington, DC, in 2\1/2\
    hours.
        Now, commuter air is going to take 3 hours downtown to
    downtown, so we are going to beat the pants off of that. I want
    to point out that in Penn Station where I was yesterday, we are
    handling 88 million people a year. Not all on Amtrak, but also
    commuter rail, nonetheless 88 million people use rail service
    in New York City in Penn Station alone, while the three
    airports together last year only handled 80 million, so you can
    see that rail is very, very important.
        The fourth component is to leverage public and private
    partnerships by expanding alliances with private businesses,
    which you have asked us to do, Mr. Chairman, and investment
    partnerships with State and local governments.
        We are also reaching out to the freight railroads. You
    know, Amtrak used to have this awful relationship, this
    antagonistic relationship, with freight railroads. President
    Warrington and myself are sitting down and having dinner with
    the freight presidents and discussing how we can cooperate, how
    we can make freight railroads more profitable, and at the same
    time invest in their freight rail so that they can allow us to
    be more on time with our passenger rails. And they are willing
    to help us, and that is the first time in 20-some years that
    freight rails have ever been in an agreeable, cooperative,
    relationship with Amtrak.
        Amtrak is putting the right people--George Warrington, who
    the Board selected as president--is going to do an excellent
    job for you and for me and for the board and for the people of
    this country. We also got Sandy Brown, Arlene, some great
    people who are really doing a great job for Amtrak, turning
    this around, giving us new vitality, giving us new energy.
        Last, by revitalizing the Amtrak brand ACELA, the company
    is going to reposition its services. ACELA is a combination of
    two words, acceleration and excellence. That is our new brand
    name. ACELA is designed to clearly present a new promise for
    travelers in the marketplace.
        I know it sounds pretty ambitious, and I know you have to
    be somewhat skeptical, because you have not always received
    candid responses from the Amtrak Board and from Amtrak
    management. I am here to tell you, I pledge to you one thing,
    Senator Shelby, that you are going to get candid responses from
    me and from this Board, and when we make a mistake we are going
    to come over here and you are going to be the first one to know
    about it.
        It is ambitious, but in the 10 months that I have been on
    this Board, and the 6 months since I have been chairman, we
    have developed a good story to tell, and I want to tell that
    story quickly this morning.
        We ended fiscal year 1998 with a net loss of $353 million,
    which is not good, but that was compared to $762 million, one-
    half of the previous year's loss.
        Second, the corporations' actual cash deficit was $50
    million, one-half of what was forecasted, which was supposed to
    be $100 million.
        Passenger revenues last year topped the billion-dollar mark
    for the first time in our corporation's history. Ridership grew
    4\1/2\ percent last year, the largest increase in 10 years, and
    we are on our schedule to increase it again this year. We are
    already meeting those milestones.
        And just as important as financial indicators, the company
    became a safer place to work. Employee injuries were down 14
    percent from the previous year, 14 percent.
        Looking ahead, our goals still appear ambitious, but they
    also appear achievable. First quarter results for fiscal year
    1999 shows the same trends. We have met or exceeded our
    financial targets, starting off the year, on October 1, $3
    million ahead of our business plan forecast, and at the end of
    February this year, we are $11.2 million ahead. I want to
    reiterate that that business plan puts us operating self-
    sufficient by 2003. We are $11.2, $11.3 million ahead of the
    plan.
        Amtrak is out there pounding the pavement to find new
    business partners, and since the beginning of the year we have
    signed five new business deals, five new business deals that
    together are expected to generate more than $20 million in
    annual revenue and $28 million in long-term savings. These
    deals look very promising.
        Let me tell you about these five deals. First, we are
    increasing our mail and express business. The freight railroads
    said, you know, you have service on a daily basis, so we are
    going to give you an opportunity to increase your express. So,
    last year we picked up $83 million in express revenues, we
    think we will be earning over $100 million in mail and express
    this year.
        Second, we went out and began to get involved in the
    refrigerated car business. The freight railroads want to get
    out of this business. Now, can you imagine Amtrak pulling
    ``reefers, as these cars are called, from Oklahoma to
    California. Because we go daily out there, we can do it more
    reliably than the freight railroads. It is an $8 billion
    business. We are going to do it, and we are going to start very
    slowly, but we think, Mr. Chairman, that this is something that
    Amtrak could really earn some money doing.
        Third, we went out and did something that needed to be
    done. We have been preparing all of our own meals, and they
    haven't been that good on Amtrak, so we entered a contract with
    Dobbs International, which serves all the airlines, and they
    are going to prepare the food--they are going to buy it, they
    are going to truck it, they are going to prepare it. We will
    serve it with our own employees on the trains, but Dobbs is
    going to prepare it, and we are going to improve the quality of
    the food.
        We are also going to have regional foods. Down south we
    will have different kinds of foods than we have up in the
    Northeast and Southwest, and in Wisconsin we will serve you
    brats and beer, and a little cheese, so everybody should get
    excited about that, and you know something, this contract is
    going to be better quality food, but you know what else? We
    will save $20 million in 5 years. $20 million.
        Senator Shelby. Governor Thompson, you are talking our kind
    of language here.
        Governor Thompson. I know it. I knew that, Senator Shelby,
    and that is why I wanted to tell you about that. $20 million is
    not peanuts, and we are going to save it over 5 years on this
    contract.
        So we are out there building these new business
    partnerships. We are also going to go to some of these--Senator
    Lautenberg, we are going to go to some of these big truckers,
    like Schneider National Trucking in Wisconsin, and we are going
    to partner to put on some road-railers. We are not going to in
    any way harm our passenger service, but we are going to be able
    to put on a couple of extra cars to haul some express.
        We are going to try and introduce that with some of the big
    trucking companies in the United States, and haul some of their
    road-railers, and be able to pick up some extra money. These
    are the kinds of contracts we are looking at, refrigeration,
    express, mail, food preparation, as well as working with the
    freight railroads to create better opportunities for us to pick
    up some more express business, and thus help us become
    operationally self-sufficient.
        We as a Board know we do not have all the answers. However,
    there are plenty of good people willing to give us advice. We
    have a good working relationship with the Amtrak Reform
    Council, which you set up to monitor us. We also have the DOT
    IG, Ken Mead, who we are working very closely with, but I want
    to point out that his assessment is on last year's business
    plan, not the new board's business plan, I want you to remember
    that. As you know, his staff is going to conduct annual
    assessments of our financial condition.
        We are going to listen to Congress, our Nation's governors,
    mayors, and other officials. I look at the Members of this
    Subcommittee, and I see the importance of Amtrak reflected in
    every one. The chairman's State has two Amtrak services which
    carry more than 54,000 passengers into and out of Alabama--the
    Crescent, and the Sunset Limited. Amtrak employs 29 Alabamians
    who earn more than $1 million annually.
        Amtrak is beginning to work on developing a corridor, which
    we kicked off in New Orleans about 3 months ago, with Senator
    Trent Lott and Mayor John Robert Smith from Mississippi, that
    is going to go into Alabama. It is called the Gulf Coast high
    speed rail corridor, and I am sure once the Northeast high-
    speed rail starts, that the South will gain momentum in
    developing a high speed rail corridor, and that is why we were
    down there.
        The Amtrak board is also going to other parts of the
    country. Next month we are going to be down in Mississippi for
    our monthly meeting. Yesterday, we were in New York. Last
    month, we were in California.
        In Missouri, Amtrak service is more than 635,000
    passengers. In Colorado, Senator Campbell, Amtrak carries
    nearly 240,000 and employs 86 residents, who earn more than
    $4\1/2\ million from Amtrak annually.
        Senator Specter is not here, but he certainly knows the
    importance of Amtrak to his state. We carry nearly 870,000
    passengers through Washington, for Senator Gorton and Senator
    Murray, who are on this Subcommittee, and for my good friend
    from New Mexico who just came in, we carry 100,000 passengers
    into or out of the State of New Mexico every year, and Amtrak
    employs 57 residents, who earn in excess of $3 million
    annually. And I am sure Senator Lautenberg can describe
    Amtrak's impact in New Jersey, where we are a lifeline for the
    citizens of that State, operating nearly 100 trains daily,
    carrying more than 3.3 million people a year. We employ more
    than 1,700 residents in your State, Senator Lautenberg, earning
    more than $86 million annually, and we purchased another $28
    million in goods and services last year.
        Wisconsin, Senator Kohl, enjoys daily service, as you know.
    You have been on the train, and it is a wonderful service,
    carries one-half million passengers into and out of the State
    of Wisconsin yearly. Amtrak employs 68 residents in my State,
    and every single Member of this Subcommittee, to varying
    degrees, benefits from Amtrak.
        The Board's commitment, and my commitment to you, is not
    based on romanticized notions of rail. We support Amtrak for
    concrete fiscal and mobility reasons.
        Yesterday we were at Penn Station. Eighty-eight million
    people a year use Penn Station.
        I came here today to tell you a little bit about how Amtrak
    is doing, where we are heading, and how we plan on getting
    there. I am also here to ask you, at a minimum, to fully fund
    the Administration's request for $571 million in capital.
        With $571 million in the flexible capital--which we need,
    it is absolutely essential--Amtrak can adhere to the strategic
    business plan that we set up in October, and stay on the path
    to operating self-sufficiency. Not fully funding us, or not
    providing us with the full Federal Transit Administration
    definition, would be extremely short-sighted. It would
    compromise the investment that you have already made, that was
    already made in Amtrak through the provisions of the Taxpayer
    Relief Act [TRA] funds. Adequate appropriation ensures that
    Amtrak can preserve the TRA funds to use on high rate of return
    capital investments, and anything less than $571 million would
    force us to instead use the TRA funds for daily survival.
        If that is the outcome, the financial performance of the
    company will not be able to continue to improve. You will
    sacrifice the investment already made, so I urge the Committee,
    in the strongest possible terms, to fully fund the
    corporation's request for $571 million.
        I stand ready to answer any questions you may have, and I
    thank you so very much, but I would like to just mention three
    things quickly, and I know my time is up. Three things. High
    speed trains are going to be kicked off by the end of this
    year. Every Member of this Subcommittee should be on that first
    inaugural run just to see how it operates. We are committed to
    it, and we are going to be able to go from New York to
    Washington, DC, in 2\1/2\ hours. We are going to be able to go
    from New York to Boston in 3 hours.
        Senator Campbell. With Senator Lautenberg driving?
        Governor Thompson. Senator Lautenberg and Senator Shelby
    are both going to be in the cab, and you and I are going to be
    right behind them, Senator Campbell, watching them.
        We are going to pick up an additional $180 million annually
    from that service. Now, we know we have some disagreement with
    Mr. Mead about when we realize those returns, and we can
    explain our differences, but we feel very confident that we are
    going to be able to bring that amount in.
        Second, we were out in California last month for a board
    meeting. California is going to have an additional 19 million
    citizens by 2020, 19 million more citizens. Now, you know, all
    of you have been in California, there is no way that they are
    going to be able to build the highways or the airports to
    handle that kind of population. The only salvation for that is
    going to be passenger rail service. That is why development of
    high-speed rail out there is so important.
        Third, and the most important thing is, is that once the
    high speed train is kicked off from New York to Boston and New
    York to Washington, Senator Kohl, Senator Reid, Senator Shelby,
    Senator Campbell, and Senator Domenici are going to be asking
    for the same kind of high speed corridors in their States.
        We have to develop them, and we in the Midwest are probably
    advanced in regards to getting the next corridor. We have nine
    States committed to do it, all the governors are committed to
    do it, the transportation people are committed to do it, and on
    top of this, I am confident that we can be as successful as the
    Northeast Corridor is going to be.

                               prepared statement

        So with that, Mr. Chairman and members of this committee, I
    thank you for the opportunity to tell you the new story about
    Amtrak, and you can see we are excited about it, and I can tell
    you, we are going to deliver, we are going to be self-
    sufficient by the year 2003 with your help and cooperation.
        Thank you very much.
        [The statement follows:]

                      Prepared Statement of Tommy Thompson

        Mr. Chair: I'm appearing before you today in my role as the Chair
    of the Amtrak Reform Board--an entity you brought into existence ten
    months ago when you confirmed me, Vice-Chair Michael Dukakis, and Mayor
    John Robert Smith of Meridian, Mississippi. The United States Secretary
    of Transportation also serves as a member, as do Governor Linwood
    Holton and Amy Rosen, both confirmed by the Senate last fall. I sit
    here today representing the entire Board.
        Fifteen months ago, the United States Senate passed the Amtrak
    Reform and Accountability Act (ARAA) of 1997 by unanimous consent,
    which authorized adequate funding for Amtrak for five years, mandated
    an annual Independent Assessment of Amtrak's financial condition by the
    U.S. Department of Transportation's Inspector General (DOT IG), and
    created an additional oversight body called the Amtrak Reform Council
    (ARC), whose basic mandate is to evaluate Amtrak's progress to
    achieving the statutory goal of operating self-sufficiency by the end
    of fiscal year 2002. If, at least two years after implementation by the
    new Board of a plan to reach operating self-sufficiency, the ARC
    believes Amtrak will not be able to achieve that goal, the ARC is
    required to notify the President and the Congress of the situation and
    submit a restructuring plan for the corporation within 90 days. Amtrak
    is concurrently required to submit a liquidation plan.
        I can assure you, viewing the Amtrak guillotine from the safety of
    Madison, when I was first approached by the White House, I thought long
    and hard about joining the Amtrak Reform Board. I believe in a national
    passenger rail system and had no intention of presiding over the death
    of it in this country. I had served on the Amtrak Board from 1990-1994,
    and I was familiar with the difficulties Amtrak faces up here,
    receiving less than three tenths of one percent of the federal
    transportation budget. Less than one percent, and having to fight--
    really fight--for every penny of it. I know its a tough situation for
    this Subcommittee--particularly with the recently erected fire walls
    for highways and transit, and now some promoting the same sort of
    treatment for aviation. You have an incredibly difficult job. But the
    fact remains that funding for highways, transit, aviation and maritime
    have all seen significant increases--increases which I have no
    objection to--for years. To try and put the levels of investment in
    perspective here: highways will see nearly $30 billion in federal
    funding this year, aviation about $11 billion, mass transit about $5
    billion, and maritime nearly $4 billion. And, Amtrak is asking for $571
    million dollars. With an Am. And I know we'll have to fight for every
    penny of it.
        So, I thought long and hard about accepting an appointment to the
    Board--and I'm sure many of my fellow Board members did too. I like
    challenges, but not tilting at windmills. So, I looked at Amtrak last
    year, operating under an acting president, with interim management, and
    with the majority of its employees working under contracts that had
    expired several years earlier. Madison was still a little chilly in
    late Spring, but looked relatively pretty comfortable. But my State
    depends on Amtrak for jobs, for transportation, and for economic
    development, so I looked a little closer, at this leaderless company
    that the General Accounting Office and the DOT IG said was in
    precarious financial condition. I've heard the same thing said about
    the welfare system--it doesn't mean you should give up on it, or get
    rid of it--it means you should commit yourself to improving it. I enjoy
    challenges.
        The Reauthorization bill had shown that the Congress and the
    country wanted a national passenger rail system. It had recognized rail
    as an essential component of a balanced transportation system, for
    mobility, accessibility, congestion relief and economic growth. The
    legislation said operate the system like a business, and make this
    business grow. So, I and my colleagues on the Board, accepted this
    challenge. We set to work developing a strategy and a plan: A plan
    about customers, money, performance, consequences and success.
        The strategy isn't complicated. We know we need to maintain a
    national system, because a system that serves only the Northeast
    Corridor isn't going to get my support, Speaker Hastert's, Governor
    Davis', or Senator Lott's, nor many of the Members of this
    Subcommittee. We know we need to become operationally self-sufficient,
    because the law requires that. And, we decided to do it by putting in
    place smart, commercially-oriented management, and directing them to
    use proven business techniques to maximize Amtrak's potential in the
    marketplace.
        The plan is also pretty simple, with five core components:
        Build a Market-Based Network.--An extensive market-based research
    analysis is underway to define consumer demand and to identify
    opportunities to grow rail service and increase Amtrak's share of the
    travel market. For the first time, Amtrak will define a national system
    in market terms.
        Develop Corridor Services.--Amtrak will phase in the Northeast
    Corridor's High-Speed Rail programs late this year in an exciting
    culmination of years of effort, and this service will greatly enhance
    the corporation's bottom line. Then we're going to take the expertise
    Amtrak has developed in planning, engineering and implementing complex
    infrastructure upgrades and use this to develop new rail corridors
    across the country. More than a dozen corridors have been identified
    which offer real potential for future growth.
        Leverage Public and Private Partnerships.--Amtrak needs to expand
    the development of business alliances and investment partnerships to
    generate revenue which supports basic rail service. It means aggressive
    commercial partnerships to leverage our assets, and innovative public
    partnerships with State and Local governments.
        Deliver Consistent Quality Service.--Amtrak needs to deliver a
    predictable, consistent level of quality service on every train, every
    day. Improving service standards by putting the right people in the
    place with the proper support to deliver top-notch service. That means
    better hiring and better training, and it means rewarding employees
    when the company meets or exceeds its goals but not tolerating
    employees who stand in the way. A company with successful customer
    service is a company that has engaged its workforce in achieving that
    success.
        Revitalize the Amtrak Brand.--Amtrak is repositioning its services
    and product lines with a new national brand, one that is designed to
    more clearly present a new promise to the marketplace. It will
    represent products responsive to customers, and the consistent delivery
    of quality service. Like any business, this will inspire new and repeat
    customers.
        I know it sounds pretty ambitious. But I also know Amtrak is
    capable of it. Not a static, lumbering Amtrak, but 24,000 dedicated
    employees who care about the system, and the energetic new management
    we've put in place. And so far, in the ten months since I've been on
    this Board, we have a good story to tell. We ended fiscal year 1998
    with a net loss of $353 million, nothing to be proud of, but good
    compared with the fiscal year 1997 loss of $762 million. The
    corporation's actual cash deficit was $50 million--one-half of what was
    forecasted--passenger revenues topping the $1 billion mark for the
    first time in the corporation's history, and ridership grew 4.5 percent
    last year--the largest increase in ten years. On-time performance is
    the highest it has been in nearly thirteen years, and mail and express
    revenue increased 19 percent. And just as important as financial
    performance indicators, the company became a safer place to work:
    employee injuries were down 14 percent from the previous year. When I
    look at the past year's results, our goals still appear ambitious. But
    they appear achievable.
        First quarter results for fiscal year 1999 show the same trend: We
    met or exceeded our financial targets, starting off the year with a
    bottom-line result $3 million ahead of the business plan forecast.
    Ridership grew 3 percent in the first quarter, representing an unbroken
    streak of eight quarterly ridership increases. Passenger revenues grew
    by 7.4 percent over the first quarter of fiscal year 1998, on-time
    performance was 80 percent systemwide, and employee injuries continued
    to decrease.
        Amtrak is out there pounding the pavement to find new business
    partners. Since the beginning of the year, we have signed five new
    business deals that together are expected to generate more than $20
    million in annual revenue and $28 million in long-term savings. We
    signed a deal with Dobbs International Services, the nation's leading
    transportation caterer, to take over the operations of Amtrak's 11
    commissaries in order to improve the quality and efficiency of on-board
    food service. We signed a deal with Burlington Northern Santa Fe
    Railroad to provide transportation for Amtrak's growing express
    business, which includes shipping packages for UPS. We have expanded
    our business with the United States Postal Service to carry new mail
    business from Springfield, MA and Philadelphia, PA to Los Angeles and
    Oakland, CA. We finalized deals with ExpressTrak, Inc., to allow Amtrak
    to enter the refrigerated carload business, and with Dynamex, to
    inaugurate a new package express service between New York and
    Washington, D.C.
        These kinds of financial results and new business partnerships
    allow me to sit here today, representing the Amtrak Board, reporting on
    our ten months of existence, and feel good about. I know that this is
    only the beginning of difficult decisions and countless challenges. But
    these results allow me to look, optimistically, to the times to come.
        We as a Board know we don't have all the answers, and we have also
    learned that there are plenty of people willing to give us advice. Many
    of these sources we recognize as experts whose dispensations we should
    pay heed to. We have established a good working relationship with the
    Amtrak Reform Council, chaired by former Federal Railroad Administrator
    Gil Carmichael, supported by Vice-Chair Paul Weyrich. The Council is
    made up of professionals with expertise in rail labor, rail management,
    transportation and finance, representing a cross section of views,
    ranging from outspoken critics of the national railroad system to those
    who vociferously support it. They provide a good sounding board, and we
    intend to listen and we learn. We also have the DOT IG, Ken Mead, whose
    staff will conduct annual assessments of our financial condition. We
    have, and we will continue to, carefully review his thorough and
    thoughtful reports and comments. The infrastructure put in place to
    support Amtrak's emergence as an operationally self-sufficient entity
    is sound, and we will rely on it for support.
        And we will listen to the Congress, our nation's governors, our
    nation's mayor's, and other officials. I look at the Members of this
    Subcommittee and I see the importance of Amtrak reflected in every one:
        The Chairman's State has two Amtrak services--the daily Crescent
    and the tri-weekly Sunset Limited, carrying more than 54,000 passengers
    into or out of Alabama. Amtrak spent more $9 million in the State last
    year on goods and services, and employs 29 Alabama residents who earn
    more than $1 million annually. Alabama is also part of the recently
    designated Gulf Coast High-Speed Rail Corridor, selected last December
    by Secretary Slater as one of the nation's emerging rail right-of-ways.
    Amtrak has attended two meetings in the last month hosted by the
    Southern Rapid Rail Transit Commission to begin work on a strategic
    plan to develop and invest in this Corridor.
        Utah currently hosts only one daily service, the California Zephyr,
    which carries more than 31,000 passengers into or out of the state. We
    employee 49 Utah residents, who earn about $2.8 million annually. Salt
    Lake City would like us to provide commuter service for the Olympics,
    and we are working closely with the Deputy Mayor of the City, the host
    railroad and others to see if we can provide such service.
        In Missouri, we carry more than 635,000 passengers annually, on the
    Southwest Chief, the Texas Eagle, the St. Louis, the Kansas City Mules,
    the Ann Rutledge, and the State House. We employ nearly 100
    Missourians, who earn nearly $4.8 million annually, and Amtrak spends
    another $4.3 million on goods and services. In just a few weeks, I'll
    be in Kansas City and St. Louis announcing some significant investments
    Amtrak is making in the stations in those cities.
        In Colorado, Amtrak carries nearly 240,000 residents with the daily
    California Zephyr and the daily Southwest Chief. We employ 86
    residents, who earn more than $4.5 million, and spend another $3.3
    million on goods and services.
        Senator Specter can certainly expound on the virtues of Amtrak to
    the Commonwealth of Pennsylvania better than I, and I've heard him do
    so. More than 103 Amtrak trains pass through Pennsylvania every day,
    taking more than 4.5 million people off the roads, and serving as an
    absolutely essential component in the transportation system. We are
    also an essential component of the state economy. We employ more than
    2900 residents, who earn more than $134 million, and Amtrak spends
    another $87 million on goods and services in the Commonwealth.
        The Coast Starlight, the Empire Builder, and the Amtrak Cascades
    carry nearly 870,000 passengers through Washington every year. We
    employ 412 residents earning nearly $18 million annually, and we spent
    another $2.6 million on goods and services in the State. The Cascades
    service is one of many success stories, where we have seen ridership
    quadruple over the past four years.
        The Southwest Chief, the Sunset Limited and the Texas Eagle serve
    New Mexico, carrying nearly 100,000 passengers into or out of the
    State. Amtrak employs 57 residents earning in excess of $3 million
    annually.
        I'm sure Senator Lautenberg can describe Amtrak's impact in New
    Jersey more passionately than I, and I have heard him do so. We are a
    lifeline for the citizens of the State, operating nearly 100 trains
    daily carrying more than 3.3 million people. We employ more than 1,700
    residents, earning more than $86 million annually, and we purchased
    another $28 million in goods and services last year.
        Wisconsin enjoys daily Empire Builder and the Hiawatha services,
    which carry nearly half a million passengers into, out of, or through
    the State. Amtrak employs 68 residents who earn more than $3.3 million
    annually, and the corporation spent another $12.6 million purchasing
    goods and services in the State last year.
        In West Virginia, the Cardinal and Capitol Limited carry more than
    42,000 passengers annually. Amtrak employs 32 West Virginians who earn
    nearly $1.5 million annually, and spent another $3.4 million purchasing
    goods and services last year.
        Seventy-five Amtrak trains serve Maryland every day, carrying more
    than 1.5 million passengers and serving as an essential component of
    the State's transportation network. Amtrak employs 2,300 Maryland
    residents, who earn in excess of $108 million annually, and the company
    spent another $34 million on goods and services in the state last year.
        Every single Member of this Subcommittee benefits from Amtrak, of
    course to varying degrees. Whether it is 34,000 passengers or several
    million--whether it is 29 employees or 2,900--ask one of those
    passengers how they would have reached their destination if Amtrak
    didn't exist, or one of those employees where they would be working. So
    you see, our commitment to Amtrak is not premised on romanticized
    notions, the sounds of steam whistles blowing, or the historic role
    trains have played in America's history. We are strong supporters of
    Amtrak for very concrete fiscal and mobility reasons, and we are
    committed to making it succeed.
        I came here today to tell you a little bit about how Amtrak is
    doing, where we are heading, and how we plan on getting there. I am
    also here to ask you to, at a minimum, fully fund the Administration's
    request for $571 million in capital. With $571 million and the flexible
    capital definition--which is absolutely essential--Amtrak can adhere to
    its Strategic Business Plan and stay on the path to operating self-
    sufficiency. Not fully funding us, or not providing us with the full
    Federal Transit Administration definition, would be extremely short-
    sighted. It would compromise the investment the Congress has already
    made in Amtrak through the provision of the Taxpayer Relief Act (TRA)
    funds. Adequate appropriations ensure that Amtrak can preserve the TRA
    funds for high rate of return capital investment. Anything less than
    $571 million would force us to instead use the TRA funds for daily
    survival. If that is the outcome, the financial performance of the
    company will not continue to improve, you will sacrifice the investment
    already made.
        I urge the Committee, in the strongest possible terms, to fully
    fund the Corporation's request for $571 million, and I stand ready to
    answer any questions you may have.

        Senator Shelby. Governor, the high speed rail that you are
    going to build next between Atlanta and New Orleans will take
    care of myself and Senator Lott.
        Governor Thompson. Yes. Senator Lott was at the event, and
    he is committed.
        Senator Lautenberg. We never applaud at committee meetings,
    but----
        [Applause.]
        Governor Thompson. Thank you, Senator Lautenberg.
        Senator Shelby. Mr. Warrington.

                         STATEMENT OF GEORGE WARRINGTON

        Mr. Warrington. Mr. Chairman, Members of the Subcommittee,
    I want to take this opportunity to thank you for the
    opportunity to be here before you today.
        Amtrak, as Governor Thompson has indicated, has really made
    tremendous progress over the past year, but I will tell you
    honestly that we have many challenges to continue to overcome.
        I know well that Amtrak must present consistent, accurate,
    and verifiable proof of our progress to transform this
    corporation into a commercially oriented, customer-focused, and
    financially sound business enterprise. I fully understand that
    you have issued a challenge to this railroad to become
    financially sound.
        Personally, I take this challenge very seriously,
    otherwise, I will tell you that I would not have accepted the
    position of president and CEO of Amtrak. Just this past
    December the Board appointed me to lead this corporation's
    turn-around. Last year, as the interim president, my interest
    level, quite frankly, was not nearly as high. At that time, I
    looked forward to returning to Philadelphia and my position as
    president of the Northeast Corridor business unit.
        However, after a few months here in Washington, I realized
    that the challenges and the promise of the Northeast Corridor
    really were, and really are, a microcosm of the much bigger
    whole--the National Railroad Passenger System.
        I began to see how the lessons I learned leading the
    Corridor, the Northeast Corridor, could be applied to other
    parts of this country, and I saw the possibilities for bringing
    the national passenger rail system forward to make it not only
    operationally self-sufficient, but also one of the best service
    providers in the marketplace. I know, and I truly believe, that
    this corporation can become profitable operating a national
    passenger railroad system across this country.
        Over the past year, I have led Amtrak's management team,
    with the advice and support of Governor Thompson and the board
    of directors, in crafting a business plan to revitalize the
    national rail passenger system by transforming Amtrak into a
    businesslike, market-driven company that delivers services
    customers genuinely want. Amtrak is putting in place a business
    planning process and an internal discipline to stick to that
    process that will incrementally move this corporation forward
    and will prove, to you and the American public, that we are
    accomplishing our shared goals.
        I am proud to report, as Governor Thompson indicated, that
    last year Amtrak achieved record passenger revenues topping $1
    billion. This record was powered by the largest ridership rise
    in a decade, 4\1/2\ percent across the system. On-time
    performance, which is the single most critical attribute for
    our customers, reached 78 percent, the highest that it has been
    in 13 years.
        I can tell you that for the first quarter of this fiscal
    year we are sustaining that trend, with ridership up another 3
    percent and revenues hitting the target set in our strategic
    business plan, and we are accomplishing this despite competing
    against extremely low, as you know, gasoline prices.
        On-time performance now, this month, stands at 80 percent
    system-wide. In fact, at the end of the first quarter of fiscal
    year 1999 we are $25 million ahead of where the DOT Inspector
    General's report projected we would be, and year to date, year
    to date through February, we are $41 million ahead.
        We have a commercially focused business plan that will
    maintain this momentum. It contains valuable lessons we have
    learned from successful businesses that we have incorporated to
    fit our own unique culture, and our own unique environment. Our
    core objective is to increase market share, squeezing every
    single dollar of revenue we can by leveraging every single
    asset that we have got and never, ever missing a business
    opportunity.
        It is all about making money. It is all about building and
    delivering consistent quality service and quality operations
    across this country, on every train everybody steps on every
    day. We will achieve success by introducing, as Governor
    Thompson indicated, high speed rail service in the Northeast,
    by developing other high speed corridors around this country,
    forging partnerships with State governments and governors all
    across this country, private businesses, including the freight
    railroad industry, and operating a market-based national route
    structure and improving and guaranteeing, much like we do on
    our Coast Starlight service in California today, consistency
    and quality of service.
        All of this will contribute to improving our image, which
    will attract more travelers and ultimately improve our bottom
    line. At the end of this year, Amtrak will phase in America's
    first high speed service on the Northeast Corridor. We will
    make America proud.
        High speed rail in the Northeast is the cornerstone, one
    cornerstone, that underpins our financial turn-around. We
    conservatively estimate, as Governor Thompson indicated, it
    will bring in $180 million in incremental revenue annually by
    the end of 2002. This will be money that Amtrak will use to
    support this entire system across this country.
        I have no doubt in my own mind that high speed rail in the
    Northeast will revitalize train travel throughout America. We
    have gained unique expertise in planning, building, and
    operating high speed service. We are ready to leverage that
    experience to develop high speed corridors in other densely
    populated regions, another key component of our business plan.
        In early January, Governor Thompson and Secretary Slater,
    Administrator Molitoris, and Board member Amy Rosen and I
    traveled to Chicago to announce a $25 million investment in
    high speed service in the Midwest, linking Chicago, Milwaukee,
    Detroit, and St. Louis. Late last year I joined Governor
    Thompson and other Federal, State, and local officials in New
    Orleans for the designation of a high speed corridor along the
    Gulf Coast. We are making tangible investments in the Pacific
    Northwest, the Southeast, Upstate New York, Albany-Buffalo,
    Southern California, San Diego--Los Angeles--San Francisco,
    across this entire country.
        Long-term capital funds will be critical over the long
    haul. On a sustained basis, in making these high speed
    corridors a reality, we will require capital support.
        You will note that many of these are regional corridors
    that criss-cross State lines. In other words, it genuinely is a
    cooperative effort.
        Building these partnerships is another key component of
    Amtrak's blueprint to fiscal solvency. This corporation will
    aggressively forge alliances with States, with local
    governments, with freight railroads, and commercial leaders to
    generate additional revenue and savings. I also understand, Mr.
    Chairman, that there exists a tremendous opportunity to
    increase revenue and market share by increasing and stimulating
    demand in areas where Amtrak now provides service, or by
    expanding service where it will positively impact the bottom
    line.
        To accomplish this, Mr. Chairman, Amtrak is undertaking for
    the first time in its 27-year history a genuine market-based
    analysis of our entire national system with an eye, though, on
    growth opportunities. It is another key strategic component of
    our business plan that will speed our path to profitability and
    allows us to better tailor our service to meet the demands of
    the transportation marketplace.
        I want Amtrak to have an expanded national system, one that
    actually increases our market share. We must become a relevant
    part of the country's transportation infrastructure, which will
    require long-term, sustained capital investment. We cannot do
    that by continually cutting routes, services, or the
    frequencies of our trains. We cannot cut ourselves to
    prosperity.
        However, Amtrak can only expand into those markets where
    research, hard facts, and data, not hunches, not nostalgia, not
    historical precedent, indicate a strong chance for commercial
    success.
        While the market-based analysis will give us the
    demographics and the transportation data we need to increase
    market share and revenue, we will never reach prosperity if we
    do not deliver high and consistent quality service to our
    customers.
        Without a doubt, the single most significant challenge
    before Amtrak today is to fundamentally change the way we
    interact with our customers. We put together a top level team
    to establish and implement company-wide service standards in
    cooperation with our labor organizations. The team has
    benchmarked the best in the business at customer service,
    including Ritz-Carlton, Sears, Continental Airlines, and even
    the U.S. Postal Service.
        Our road map to excellent service relies on several
    tactics. We will improve and expand employees' training. We
    cannot expect even the most competent and professional
    employees to deliver consistent service without fundamental and
    intense training.
        Second, we are thoroughly overhauling our hiring
    procedures. It is vital we hire the right people for the right
    jobs. We have not always done that in the past. We are doing it
    now.
        Third, we will offer our employees incentives for exemplary
    job performance. This is crucial--to reward hard work and extra
    effort.
        Finally, since none of these initiatives is effected
    without excellent management, we are instituting a 360-degree
    evaluation program for every manager at Amtrak. Management
    performance will be evaluated from above, from peers, and from
    direct report troops and employees. This is the only way to
    build effective leadership for this corporation.
        Recognizing labor's role in this initiative, I would like
    to commend the union leadership for its shared commitment with
    Amtrak for a prosperous future. It is a cooperative effort, and
    to that end today collective-bargaining agreements have been
    ratified, or tentatively agreed upon, with more than 87 percent
    of our unionized workforce. I expect we will reach agreements
    with the two remaining unions very shortly.
        Together, the leaders of Amtrak's unions and management are
    working very, very hard to ensure financial stability for
    23,000 employees covered by collective-bargaining agreements
    and for the corporation as a whole, in terms of productivity
    savings--real work rule and real productivity savings around
    the day-to-day operation.
        Without this cooperation to improve service standards, we
    will not maintain nor grow our customer base, no matter what
    our demographic studies tell us about population and
    transportation demands. If we cannot deliver service, and
    service delivery is the one thing we can always do better than
    our competition, no number of studies or market assessments
    will be worth either the time or the effort to implement them.
        I want to assure you, Mr. Chairman, and Members of the
    Subcommittee, that Amtrak is turning the corner to become a
    commercially oriented, customer-focused, financially sound
    business enterprise. We have put in place an aggressive and
    commercially focused business plan, the first in this
    corporation's history. I stand behind this plan, and I know
    that Governor Thompson and the Amtrak Board of Directors do as
    well. For us, this is all about making money and putting
    customers first. It is about keeping our commitment to you to
    achieve operational self-sufficiency by following through on
    every one of our business initiatives.
        To do this will require a commitment from the Congress as
    well, as agreed to in the Amtrak Reform and Accountability Act
    of 1997, to provide adequate capital investment funds which
    will enable our business plan to succeed.
        Let me share with you an example, a brief example of wise
    investment in technology using the TRA funds. Three years ago,
    this corporation's telephone reservation call centers were,
    frankly, the laughing stock of the travel industry. After about
    $10 million of investments in that system, training our people,
    good arrangements with labor, investments in the Internet, and
    investments in automatic ticket machines, our call centers were
    named, 2 months ago, as the best in the travel industry by Call
    Center Magazine, and at the end of the day we will end up
    saving, this year, as a result of those investments and those
    improvements in technology, $17 million.
        And that savings does not involve us having to touch one
    single train out there. It is about managing business smart,
    and having the right management people in the right places who
    are able to develop the right kind of business systems around
    managing this asset.
        Our call centers now generate more revenue at less cost.
    For our customers, it means they spend less time on hold and
    receive more thorough, professional information, and we sell
    more tickets, less expensively.
        As you see, Amtrak's need for long-term capital support is
    no different than all other modes of transportation--highways,
    airways, transit, and maritime. As I stated, adequate capital
    enables Amtrak to enter more substantial investment-sharing
    partnerships with States and private businesses to boost our
    revenues, increase savings, and grow ridership.
        To this end, we are asking the Subcommittee to support the
    administration's fiscal year 2000 budget request for $571
    million for Amtrak. This is $38 million less than Congress
    approved for Amtrak in fiscal year 1999, and reflects our
    genuine commitment to lessen our dependence on Federal
    operating support. As with last year, this request is for a
    capital-only grant.
        The other key component of our grant request is Congress'
    confirmation of our ability to invest these funds in the same
    manner as every other transportation mode. Amtrak's request is
    that you renew our ability to use these funds as other modes
    do, for maintenance of equipment, as you did in last year's
    bill, Mr. Chairman, and extend this flexibility to be used for
    maintenance of way as well.
        To prove beyond a shadow of a doubt that we are making real
    progress, genuine progress to assure you that Amtrak is using
    Federal funds prudently, I will see to it that Amtrak continues
    to work very closely with you, and Ken Mead, the DOT Inspector
    General, and the Amtrak Reform Council. Amtrak has worked very
    hard to establish a good working relationship with the ARC and
    its chairman, Gil Carmichael, and its vice chairman, Paul
    Weyrich, and we look forward to their future guidance and
    cooperation.
        Let me close by telling you again how confident I am,
    personally, that we will succeed in turning around Amtrak. Our
    performance results for the past year, and for the first
    quarter of this year, are evidence of that turnaround, but we
    do have a long way to go. As you watch us for the rest of 1999,
    you will see more pieces of our business plan, more commercial
    opportunity, more business partnerships unfold. You will see
    the launch of high-speed rail in the Northeast. You will see
    continued investment in other corridor services, and you will
    see improved customer service and ridership and revenue growth.

                               prepared statement

        Amtrak, all 24,000 of our employees, have been entrusted
    with a national asset. It is in good hands today, Mr. Chairman,
    and will be in even stronger hands tomorrow.
        Thank you very much.
        [The statement follows:]

                   Prepared Statement of George D. Warrington

        Mr. Chairman, Members of the Subcommittee, I want to thank you for
    the opportunity to appear before you today.
        Amtrak has made tremendous progress over the past year, but still
    has many challenges to overcome. I know well that Amtrak must present
    consistent, accurate and verifiable proof of our progress to transform
    this corporation into a commercially oriented, customer-focused and
    financially sound business enterprise. I fully understand that you have
    issued a challenge to this railroad to become financially sound. I take
    this challenge very seriously, otherwise I would not have accepted the
    position of president and chief executive officer in December.
                 fiscal year 1998: a year of tangible progress
        Over the past year, Amtrak has undergone tremendous change. In
    accordance with the Amtrak Reform and Accountability Act of 1997, the
    corporation has a new Board of Directors led by Chairman Governor Tommy
    Thompson. I wholeheartedly share this Board's goal to make Amtrak the
    envy of transportation providers worldwide.
        This past December, the Board appointed me to lead the
    corporation's turnaround as its president and chief executive officer.
    Last year, as the interim president, my interest level was not as high.
    At that time, I looked forward to returning to my position as president
    of the Northeast Corridor. However, after a few months here in
    Washington, I realized that the challenges and the promise of the
    Northeast Corridor were really a microcosm of the bigger whole: the
    national system. I began to see how the lessons that I learned leading
    the Corridor could be applied to other parts of the country. And, I saw
    the possibilities for bringing the national passenger rail system
    forward to make it not only operationally self-sufficient, but also one
    of the best service providers in the marketplace. I know and truly
    believe that this corporation can become profitable, operating a
    national system.
        Over the past year, I have led Amtrak's management team, with the
    advice and support of the Board of Directors, in crafting a business
    plan to revitalize the national passenger rail system by transforming
    Amtrak into a business-like, market-driven company that delivers
    services customers want. Amtrak is putting in place a business-planning
    process and an internal discipline to stick to that process that will
    incrementally move this corporation forward, and will prove to you and
    the American public that we are making progress toward our shared
    goals.
        I am proud to report that last year Amtrak achieved record
    passenger revenues, topping $1 billion. This record was powered by the
    largest ridership increase in a decade, 4.5 percent. On-time
    performance, which is the most critical attribute for our customers,
    reached 78 percent, the highest it has been in 13 years. I can tell you
    that for the first quarter of this fiscal year Amtrak is sustaining
    that trend with ridership up another three percent and revenues hitting
    the targets set in our strategic business plan. And, we're
    accomplishing this despite competing against extremely low gas prices.
    On-time performance now stands at 80 percent systemwide. In fact, at
    the end of the first quarter for fiscal year 1999, we are $25 million
    ahead of where the DOT Inspector General's Report projected we would
    be.
                   fiscal year 1999: building for the future
        We have a commercially focused business plan that will maintain
    this momentum. It contains valuable lessons we have learned from
    successful businesses that we have incorporated to fit Amtrak's unique
    environment. Our core objective is to increase our market share in the
    travel market, squeezing every dollar of revenue we can by leveraging
    our assets and never ever missing a business opportunity. It's all
    about making money and building and delivering a consistent, quality
    operation.
        We will achieve success by introducing high-speed rail in the
    Northeast, developing other high-speed corridors nationwide, forging
    partnerships with state governments and private businesses, operating a
    market-based national route structure, and improving and guaranteeing
    consistency and quality of service. All of this will contribute to
    improving our image, which will attract more travelers and ultimately
    improve our bottom line.
    Launch High-Speed Rail
        At the end of this year, Amtrak will phase in America's first high-
    speed rail in the Northeast Corridor. We will make America proud. High-
    speed rail in the Northeast is a cornerstone that underpins Amtrak's
    financial turnaround. We conservatively estimate that it will bring in
    $180 million in net incremental revenue annually by the end of 2002.
    This will be money that Amtrak will use to support the entire system.
        With 20 new trainsets in service, travel times will be reduced in
    the Northeast to as little as three hours and between New York and
    Washington to as little as two hours and 30 minutes. Exactly or even
    better than we had planned.
        The high-speed program is expected to meet its projected completion
    date. The phase in of service will begin late this year. The trainset
    will arrive in Pueblo, Colorado, for testing in March, with the first
    revenue trainsets ready for operation before the end of the year.
    Virtually all infrastructure work to reduce travel times, including
    installation of 365,000 concrete ties, 129 miles of new continuously
    welded rail, installation of the new signal system and the Advanced
    Civil Speed Enforcement System, replacement of 42 bridges and curve
    alignments has or will be completed by the end of the year.
    Develop Corridor Services
        I have no doubt in my mind that high-speed rail in the Northeast
    will revitalize train travel throughout America. Already,
    transportation planners in busy corridors are turning to rail to solve
    transportation problems. Amtrak has gained a unique expertise in
    planning, building and soon operating high-speed service. We are ready
    to leverage that experience to develop high-speed rail corridors in
    other densely populated regions, another key component of our strategic
    business plan.
        For instance, in January, I, along with Chairman Thompson,
    Secretary Slater, Administrator Molitoris and Board member Amy Rosen,
    traveled to Chicago to announce a $25 million investment in high-speed
    service in the Midwest, linking cities such as Chicago and Milwaukee,
    Detroit and St. Louis. Late last year, I joined other Amtrak Board
    members, federal, state and local officials in New Orleans for the
    designation of a high-speed corridor along the Gulf Coast. We're also
    making tangible investments in the Pacific Northwest, the Southeast,
    upstate New York and in Southern California along Amtrak's second
    busiest corridor from Los Angeles to San Diego. Long-term capital funds
    will be critical in making these high-speed rail corridors a reality.
    Leverage Public and Private Partnerships
        You'll note that these are regional corridors that crisscross state
    lines. In other words, it is a cooperative effort, partnerships, which
    will make improved rail service a reality in these regions. Building
    these partnerships is another key component of Amtrak's blueprint to
    fiscal solvency. This corporation will aggressively forge alliances
    with states, local governments, freight railroads, and commercial
    leaders to generate additional revenue and savings.
        Here are a few examples of what I mean.
        In 1993, Amtrak entered into a partnership with the states of
    Washington and Oregon to provide their citizens with better
    transportation options through rail service. I can tell you this
    partnership has been an achievement that bears repeating. By the close
    of 1998, ridership in the Pacific Northwest Corridor had risen 347
    percent. Customers consistently gave the service the highest
    satisfaction rates in the Amtrak system. I would be at fault if I did
    not stress another crucial player in this partnership, the Burlington
    Northern Santa Fe Railroad, which owns the track. Working as partners,
    travel times will decrease further. We will gain more repeat customers
    and we will further tap into this lucrative market. Continued progress
    with this partnership and the many others Amtrak has entered into with
    other states will hinge on long-term capital support from the federal
    government.
        We understand that the national passenger rail network is a
    tremendous national asset. I can tell you we are taking this asset and
    using it wisely in partnership agreements with private businesses. For
    example, Amtrak's three-hour Metroliners provide timely and reliable
    service between New York and Washington. In a partnership with Dynamex
    Inc., we will inaugurate a pilot program to deliver commercial parcels
    door-to-door on this busy route.
        Now let me tell you about a business venture complete with
    partnerships that has grown tremendously. I'm sure most of you are
    aware of our growing mail and express enterprise. Since a favorable
    Surface Transportation Board ruling last year in our mail and express
    business set a record $83 million in revenues and is on target to
    increase another 29 percent to $107 million this year. Simply put, the
    reliability and frequent schedules of our long-distance trains are
    attractive to shippers who have had no other alternative but use
    trucks. In a bellwether partnership with the Burlington Northern Santa
    Fe Railroad, Amtrak has begun transporting packages for UPS and four
    other shippers. In partnership with the Norfolk Southern Railroad, we
    will be able to further grow the express portion of the business. And,
    we've recently expanded business with our biggest commercial partner,
    the United States Postal Service. Recent decisions to purchase
    additional equipment will increase our ability to handle mail
    transportation on additional cross-country routes. And, we are
    continuing to enhance and develop a network of periodicals distribution
    to speed up delivery of magazines.
        In addition to the partnerships we have entered, we are also
    leveraging our assets through profitable commercial ventures. For
    instance, our three heavy maintenance facilities are staffed by the
    best workers in the industry. We are leveraging our expertise by
    competing for contracts to refurbish rail equipment such as the $7
    million contract awarded to Amtrak by the Fort Worth Transportation
    Authority a few months ago. In the Northeast Corridor, we are also
    leveraging the right-of-way and stations we own for telecommunications,
    advertising, parking and more ventures. Together, all our commercial
    ventures earned $93 million in profit in fiscal year 1998.
        Now here's an example that I'm quite proud of on the other side of
    the balance sheet, cost savings.
        The railroad recently signed a partnership agreement with Dobbs
    International Services, the leading caterer in the airline industry, to
    take over our commissary operations. While our commissary employees
    performed well, we are not food service experts. Quite frankly, we
    should have gotten out of the catering business years ago. In terms of
    the bottom line, the seven-year agreement with Dobbs will save at least
    $28 million. And, it will improve the quality of food we offer to our
    customers.
        These are just a few examples of seizing business opportunities to
    generate more revenue and reduce costs. You have my word that Amtrak
    will continue to scrutinize its operations to identify every possible
    opportunity to achieve profitability.
    Build a Market-Based National Network
        I also understand that that there is tremendous potential to
    increase revenue and market share within the passenger rail market, by
    increasing and stimulating demand either in areas Amtrak now serves or
    by expanding service where it will positively impact the bottom line.
        To accomplish this, Amtrak is undertaking a market-based analysis
    of our national system with an eye on growth opportunities. It is
    another key strategic component of our business plan that will speed
    Amtrak's path to profitability and better tailor our service to the
    needs of the transportation marketplace.
        I want Amtrak to have an expanded national system, one that
    actually increases our market share. We must become a relevant part of
    the country's transportation infrastructure, which will require long-
    term capital investment. We can't do that by continually cutting
    routes, services or the frequencies of our trains. We cannot cut
    ourselves to prosperity. However, Amtrak can only expand into those
    markets where research--hard facts and data, not hunches, nostalgia or
    historical precedent--indicates a strong chance for commercial success.
    Deliver Consistent Quality Service
        While the market-based analysis will give us the demographics and
    the transportation trend data we need to increase market share and
    revenue, we will never reach prosperity if we do not deliver a high and
    consistent level of service to our customers. Without a doubt, the most
    significant challenge before Amtrak today is to fundamentally change
    the way we interact with our customer. Only by providing world-class
    service will our current customers choose to use Amtrak more often, and
    will potential customers even consider traveling with us.
        We have put together a top-level management team to establish and
    implement company-wide service standards, in cooperation with our labor
    organizations. The Team has benchmarked the best in the business at
    customer service, including the Ritz-Carlton, Sears, Continental
    Airlines, and the U.S. Postal Service. Our roadmap to excellent service
    relies on several tactics. First, we will improve and expand our
    employee training. We can't expect even the most competent and
    professional employees to deliver consistent service without a
    fundamental and intense training standard. Second, we are thoroughly
    overhauling our hiring procedures. It is vital that we hire the right
    people for the right job. We haven't always done that in the past.
    We're doing it now. Third, we will offer our employees incentives for
    exemplary job performance. That is crucial, to reward hard work and
    extra effort. Finally, since none of these initiatives is effective
    without excellent management, we are instituting a 360-degree
    evaluation program for managers. Management performance will be
    evaluated from above, from peers and from direct-report employees. This
    is a way to build effective leadership.
        Recognizing labor's role in this initiative, I would like to
    commend union leadership for its shared commitment with Amtrak for a
    prosperous future. It is a cooperative effort, and to that end today,
    collective-bargaining agreements have been ratified or have been
    tentatively agreed upon with more than 87 percent of our unionized
    workforce. I expect we will reach agreements with the two remaining
    unions soon. Together, the leaders of Amtrak's unions and management
    are working very hard to ensure financial stability for the 22,000
    employees covered by collective-bargaining agreements and for the
    corporation in terms of productivity savings.
        Without this cooperation to improve service standards, we cannot
    maintain and grow our customer base, no matter what our demographic
    studies might tell us about population and transportation trends. If we
    can't deliver enviable service--and service delivery is the one thing
    we can always do better than our competition--no number of studies and
    market assessments will be worth the time and effort to implement them.
    Revitalize the Amtrak Brand
        What does all this change mean for Amtrak? New corridors, new
    partnerships, new service quality? What this means is that we're a
    different company that needs to present a different face to its
    customers and potential customers. I am not talking about a new name
    for Amtrak. I'm talking about a new promise that Amtrak will make--and
    keep--to its valued customers. Part of following through with our
    business plan is our branding effort, which will give Amtrak a new
    face. It will begin with the introduction of the all-new high-speed
    rail service in the Northeast. It will give Amtrak a new look, a new
    feel, a new promise. It will expand to other product lines as the
    service standards initiatives are put in place. The new look will
    position Amtrak as not just a new level of passenger service but as a
    newly committed company that is determined to succeed in the
    marketplace.
            fiscal year 2000: the resources needed to ensure success
        I want to assure you that Amtrak is turning the corner to become a
    commercially oriented, customer-focused and financially sound business
    enterprise. We have put in place the most aggressive and commercially
    focused strategic business plan in this corporation's history. The sum
    of its parts is greater than the whole, with each key strategy
    complimenting another.
        I stand behind this plan and so does Amtrak's Board of Directors.
    For us, it is about making money and putting customers first. It is
    about keeping our commitment to you to achieve operating self-
    sufficiency by following through on our business initiatives. To do
    this will require a commitment from Congress, as agreed to in the
    Amtrak Reform and Accountability Act of 1997, to provide adequate
    capital investment funds, which will enable our business plan to
    succeed.
        Last year, Amtrak received the first installment of the $2.2
    billion in capital investment funds from the Taxpayer Relief Act (TRA)
    of 1997. Soon, Amtrak will receive the second installment. Amtrak has
    moved quickly to invest these funds in critical, high rate-of-return
    infrastructure projects that will deliver tangible bottom-line
    improvements to the corporation and improvements to our trains that
    will benefit our customers. To date, some $541 million in TRA funds
    have been invested. This fiscal year Amtrak will invest $823 million
    total in capital projects, which includes TRA funds. This investment in
    the future financial stability of Amtrak will leverage $303 million in
    outside funds. Just as importantly, this investment will improve
    Amtrak's bottom line by $129 million.
        Let me share with you an example of wise capital investment in
    technology. Three years ago, our telephone reservations call centers
    were the laughing stock of the industry. After more than $10 million in
    capital investments, our call centers were named the best in the travel
    industry by Call Center Magazine. Our call centers now generate more
    revenue per call at less cost. For our customers, it means they spend
    less time on hold and receive more thorough, professional information.
    And we sell more tickets less expensively.
        So you see, Amtrak's need for long-term federal capital support is
    no different than all the other modes of transportation: highways,
    airways, transit and maritime. As I have stated, adequate capital
    enables Amtrak to enter more substantial investment-sharing
    partnerships with states and private businesses to boost our revenues,
    increase savings and grow ridership.
        To this end, Amtrak is asking the Subcommittee to support the
    Administration's fiscal year 2000 Budget Request for $571 million for
    Amtrak. This amounts to $38 million less than Congress approved for
    Amtrak in fiscal year 1999 and reflects Amtrak's genuine commitment to
    lessen our dependence on federal operating support. As with last year,
    our request is for a capital-only grant.
        The other key component of our grant request is Congress'
    confirmation of Amtrak's ability to invest these capital funds in the
    same manner as every other transportation mode. Amtrak's grant request
    asks that you renew our ability to use these funds as other modes do
    for maintenance of equipment, as you did in last year's bill, and
    extend this flexibility to be used for maintenance of way investments
    as well. Last year, the Congress provided Amtrak with partial
    flexibility. This year the Administration included in its fiscal year
    2000 Budget Request flexibility for both maintenance of equipment and
    maintenance of way, as it did last year.
        To prove beyond a shadow of a doubt that we are making real
    progress and to ensure you that Amtrak is using federal funds
    prudently, I will see to it that Amtrak continues to work closely with
    you, the DOT Inspector General's office and the Amtrak Reform Council.
        Amtrak has established an excellent working relationship with the
    ARC and its Chairman, Gil Carmichael, and Vice Chairman, Paul Weyrich,
    and we look forward to their future guidance.
        Let me close by telling you again how confident I am that we will
    succeed in turning around Amtrak. Our performance results for last year
    and the first quarter of this year are evidence of the turnaround. As
    you watch us for the rest of 1999, you will see more of the pieces of
    our business plan unfold: business partnerships, the launch of high-
    speed rail in the Northeast, investment in corridor service, improved
    customer service and ridership and revenue growth.
        Amtrak--all 24,000 employees--have been entrusted with a national
    asset. It is in good hands today and will be in even stronger hands
    tomorrow.
        Thank you.

                           STATEMENT OF KENNETH MEAD

        Senator Shelby. Mr. Mead.
        Mr. Mead. Thank you, Mr. Chairman, Senator Lautenberg,
    Senator Reid.
        As you know, we are required by law to perform an annual
    financial assessment of Amtrak's business plan. As Governor
    Thompson pointed out, we did, in fact, review the March 1998
    strategic plan.
        We are currently reviewing the new plan issued in October,
    and of course we will have actual experience to see how that
    plan is playing out. In fact, when we do our work, the
    information will be shared with Amtrak and they will be able to
    make adjustments proactively as we go along.
        Now, our overall assessment to date is that with strong
    leadership, intense management, and continued favorable
    economic conditions, it will be possible, albeit difficult, for
    Amtrak to meet its congressional mandate and become
    operationally self-sufficient by 2003. Nevertheless, even if
    Amtrak does reach operational self-sufficiency, it will
    continue to require indefinitely substantial capital funding.
        I would like to touch on five things in my oral statement
    Mr. Chairman, they are Amtrak's 1998 operating results,
    Amtrak's ability to achieve operating self-sufficiency by 2003,
    cost and schedule for the Northeast Corridor, Amtrak's funding
    needs for capital, and Amtrak's request for funding
    flexibility.
        First, Amtrak's operating results. They were better than
    the $845 million operating loss that Amtrak projected for 1998,
    but the loss still totalled $823 million. Now, I want to
    explain the difference here between the $353 million Governor
    Thompson used and our figure of $823 million.
        The figure that Governor Thompson used includes as income
    or revenue the Federal grants and subsidies. We backed those
    out, because the idea here is to get Amtrak to operate subsidy
    free. Also, the loss did not include a $107 million cost
    adjustment related to Amtrak's labor settlements. Those costs
    that Amtrak planned to record in 1999 raised the operating loss
    in 1998 to $930 million.
        Amtrak's ridership and passenger revenue increased in 1998,
    but not quite as much as Amtrak had expected. Nonpassenger
    revenues from activities like commuter operations, mail and
    express service, and commercial development have become very
    important to Amtrak.
        I want to stress this last point about the nonpassenger
    revenues because of its importance to Amtrak's survival. In
    1998, nonpassenger revenue sources accounted for 37 percent of
    all Amtrak revenue. That is $626 million out of about $1.7
    billion in total revenue.
        Expenses for the railroad also were less than projected.
    Amtrak had projected a 7-percent increase. Expenses actually
    increased about 4 percent.
        Second, our review of Amtrak's March 1998 strategic
    business plan indicated that Amtrak would sustain an additional
    $823 million in operating losses between 1999 and 2003, and
    that its unfunded cash loss in that year would be in the
    neighborhood of $300 million. That figure is, in fact, $167
    million more than Amtrak itself has forecast. Amtrak management
    is aware of our concerns, and is now executing plans projected
    to increase revenues and cut costs.
        We made several recommendations in our assessment, and we
    understand that Amtrak is in the process of addressing all of
    them.
        I do want to stress that to reach operating self-
    sufficiency by fiscal year 2003, the railroad must first and
    foremost provide good, timely service to its customers. It must
    also implement high-speed rail service in the Northeast
    Corridor, and rigorously pursue new mail and express package
    business.
        As I think both Mr. Warrington and Mr. Thompson pointed
    out, on-time performance, courteous and efficient personnel, I
    would add to that clean lavatories, pleasant travel
    environment, are essential building blocks for all those
    results. But Amtrak will really have to pursue the mail and
    express package business. That is going to be the key, along
    with high-speed rail.
        In addition, the West Coast and the Northeast Corridor
    States have proven to be strong financial supporters for
    Amtrak. Amtrak needs to pursue similar partnerships with other
    States, regional, and local governments.
        The cost of the high-speed rail program in the Northeast
    Corridor has grown to about $2.5 billion. That is a $500
    million increase. That has happened for two reasons. First,
    Amtrak expanded the size of the project, adding more train sets
    and electric locomotives, but second, the cost of the
    electrification project north of New Haven experienced
    significant cost overruns. There is no more room for cost
    overruns without eating into capital that is directed toward
    other projects in the system.
        Now, as you know, the electrification project has
    experienced repeated delays. It is on a very tight schedule for
    implementation in October 1999. Though system testing was
    originally scheduled for July 1999, now that will not occur.
    The final testing will not occur until October 1999. That is
    the same month electrified service is supposed to begin.
        The first high-speed train set is scheduled for operation
    in December, so between now and the end of the year, three
    distinct things must all come together. First, electrification;
    second, delivery of the train sets; and third, progress on the
    Central Artery.
        Finally, a word on Amtrak's needs for capital investment,
    and this is not maintenance. This is traditional capital
    investment. These needs range from a minimal level of about
    $2.7 billion to a developmental level of $4.0 billion. Senator
    Lautenberg alluded to this earlier. It is a very important
    point that you understand that the $4 billion includes projects
    outside the Northeast Corridor.
        The $2.7 billion would keep the railroad infrastructure in
    good operating condition through 2003. The $4 billion would
    allow Amtrak to expand and develop new business opportunities.
        If Congress provides funding consistent with the
    Administration's request to 2003, Amtrak's funding will fall
    short of the minimum capital needs by about $500 million. The
    amount will be more if Amtrak's operating losses are higher
    than Amtrak projects, and that is why Amtrak is stressing the
    importance of cutting those operating losses.
        Finally, Amtrak has requested congressional approval to
    spend its capital appropriation for maintenance of way. Last
    year, they received the approval for maintenance of equipment.
    What Amtrak is basically asking for is to be able to spend
    money in accordance with the transit definition of capital. If
    Amtrak does not get this approval, Amtrak simply will not be
    able to cover its losses in 2000. It could be forced to default
    on current obligations.
        There is a certain irony here, because this default could
    occur even though Amtrak will have more than $1 billion in the
    bank. And that is because Taxpayer Relief Act funds cannot be
    used for maintenance of way. They can only be used for
    maintenance of equipment and traditional capital investment. So
    Amtrak has $1 billion in the bank, and yet they may be
    defaulting on their obligations. So I think the implication of
    my remark is, Senator, that you should seriously consider the
    Amtrak proposal.

                               prepared statement

        Last, I do want to point out that Amtrak has been
    cooperative, responsive in all phases of our work. There have
    been disagreements. Some of them have been sharp, but they have
    been forthrightly and respectfully handled. I think you have a
    good team running Amtrak, and we enjoy working with them.
        Thank you, Mr. Chairman.
        [The statement follows:]

                     Prepared Statement of Kenneth M. Mead

        Mr. Chairman and Members of the Subcommittee: We appreciate the
    opportunity to testify on Amtrak's financial outlook. Our overall
    assessment is that with strong leadership, intense management, and
    favorable economic conditions, it will be possible, albeit difficult,
    for Amtrak to become operationally self-sufficient by 2003.
    Nevertheless, even if Amtrak reaches operating self-sufficiency, it
    will require substantial and continuing capital funding to support the
    system as it currently exists. Today our testimony addresses 5 areas
    related to Amtrak's financial outlook. They are:
      --Amtrak's 1998 operating results,
      --Amtrak's ability to achieve operating self-sufficiency by 2003,
      --Cost and schedule for the Northeast Corridor High-Speed Rail
            Project,
      --Amtrak's funding needs for capital improvements, and
      --Amtrak's request for funding flexibility.
        First, Amtrak's operating results were better than the $845 million
    operating loss (including depreciation) projected for 1998, but the
    loss still totaled $823 million. This loss did not include a $107
    million cost adjustment related to Amtrak's labor settlements. Amtrak
    had expected to record these costs in 1999.
        Amtrak's ridership and passenger revenue increased in 1998, but not
    as much as Amtrak had projected. Non-passenger revenues from activities
    such as commuter operations, mail and express service, and freight
    access fees have become increasingly important to Amtrak. In 1998,
    these sources accounted for 37 percent of all Amtrak revenue.
        Second, our review of Amtrak's March 1998 Strategic Business Plan
    showed that Amtrak would sustain an additional $823 million in
    operating losses between 1999 and 2003, and that it would have an
    unfunded cash loss of $304 million in 2003, which is $167 million more
    than it forecast. Amtrak management is aware of our concerns and has
    indicated that it has taken actions to increase revenues and cut costs.
    Amtrak has been responsive to the recommendations we made in the
    Independent Assessment.
        To reach operating self-sufficiency by fiscal year 2003, first and
    foremost, Amtrak must provide good timely service to its customers. It
    must also implement a robust high-speed rail service in the Northeast
    Corridor and greatly expand mail and express service, an area that
    offers considerable opportunity for non-passenger revenue. Amtrak must
    also improve ridership and revenue on Intercity and Amtrak West trains,
    and enhance partnerships with State, regional, and local governments.
        Third, the cost of the high-speed rail program in the Northeast
    Corridor has grown as a result of increasing the number and scope of
    the projects included in the high-speed rail budget and cost overruns
    on the electrification project. All project reserves have been depleted
    and any further cost increases will need to be funded by diverting
    funds from other system-wide capital needs. The electrification project
    has experienced repeated delays and is on a very tight schedule for
    implementation in October 1999.
        Fourth, Amtrak's capital funding needs range from a minimum of $2.7
    billion to keep the railroad infrastructure in good operating condition
    through 2003 to $4.0 billion for expansion and business opportunity
    development. Amtrak's funding will fall short of even the minimum needs
    by at least $500 million. The amount could be more if Amtrak's
    operating losses are higher than Amtrak projects.
        Finally, Amtrak received congressional approval to spend its 1999
    Federal capital appropriation for maintenance of equipment. Amtrak has
    now requested approval to spend its Federal funding for maintenance of
    way as well. Without this authority, Amtrak will not be able to cover
    its operating losses and could be forced to default on current
    obligations. This could occur even though Amtrak is likely to have $1
    billion in Taxpayer Relief Act (TRA) funds in the bank.
                   a perspective on amtrak's financial goals
        Since Amtrak was created in 1971 to provide national intercity
    passenger service, it has been the goal of Congress for Amtrak to
    become self-sufficient. For Amtrak, this means covering its operating
    expenses with revenues generated from the services it provides. Despite
    this long-standing goal, Amtrak has continued to sustain significant
    operating losses, and has remained dependent on Congress to provide
    assistance for both operating and capital needs.
        In the 1997 Amtrak Reform and Accountability Act (ARAA), however,
    Congress mandated that Amtrak develop a plan to eliminate its need for
    operating support after fiscal year 2002. Thereafter, Amtrak is
    prohibited from using Federal funds for any operating expenses other
    than for excess contributions under the Railroad Retirement Tax Act
    (RRTA). Amtrak has never defined self-sufficiency as generating enough
    revenues to cover capital needs, and anticipates needing Federal
    capital support indefinitely. Amtrak does believe it can achieve the
    Congressional mandate of operating self-sufficiency.
                               operating results
        Amtrak's 1998 Operating Loss Was Less Than Projected.--Amtrak's
    1998 operating loss was $823 million. This was $22 million better than
    Amtrak's projection. Amtrak recorded an additional $107 million loss as
    a post-audit adjustment for its labor settlements. The lump sum
    adjustment for the settlements was for labor expenses for unions that
    settled their contracts in 1998 or were expected to settle in 1999, and
    included retroactive payments as far back as 1995. Amtrak had planned
    to record the costs in 1999, so the additional loss in 1998 is
    basically an offset between years. The following chart shows the
    history of Amtrak's operating losses.
    [GRAPHIC] [TIFF OMITTED] T12MA01.001

        Ridership and Passenger Revenue Have Increased But Not As Much As
    Projected.--Amtrak's system-wide ridership and passenger revenues
    increased in 1998 by 4 percent over 1997 but both fell short of
    projected growth by about 3 percentage points. The charts on the
    following page illustrate the overall growth trends in Amtrak's
    ridership and passenger revenue.

                  PASSENGER REVENUES BY STRATEGIC BUSINESS UNIT
                               [1995 through 1998]
    ------------------------------------------------------------------------
                                                 Northeast
                                                  corridor  Intercity   West
    ------------------------------------------------------------------------
    1995.......................................       $430      $376     $67
    1996.......................................        459       367      74
    1997.......................................        484       397      84
    1998.......................................        503       407      90
    ------------------------------------------------------------------------

                      RIDERSHIP BY STRATEGIC BUSINESS UNIT
                               [1994 through 1998]
    ------------------------------------------------------------------------
                                                 Northeast
                                                  corridor  Intercity   West
    ------------------------------------------------------------------------
    1994.......................................       11.7       6.3     3.1
    1995.......................................       11.6       6.1     3.0
    1996.......................................       11.0       5.4     3.3
    1997.......................................       11.1       5.4     3.7
    1998.......................................       11.9       5.6     3.6
    ------------------------------------------------------------------------

        Non-Passenger Revenue Has Increased and Is Now A Critical Part of
    Revenue.--Amtrak's non-passenger revenues, such as those it receives
    from operating commuter rail services, carrying mail, providing express
    package service, and allowing freight railroads to access Amtrak's
    system have increased 60 percent in the past 10 years, from $391
    million in 1989 to $626 million in 1998. Commuter operations alone have
    tripled since 1989. Amtrak has significant opportunities for growth in
    the non-passenger revenue market, especially in its mail and express
    package business. The growth of Amtrak's non-passenger revenue is
    expected to continue, and indeed, will be a critical factor in Amtrak's
    ability to meet its financial goals. The chart on the following page
    illustrates the growth of non-passenger revenues since 1989.
        1998 Expenses Were Less Than Projected.--Amtrak projected a 7
    percent increase in expenses between 1997 and 1998. Due to favorable
    fuel prices and other savings, the actual increase excluding the post-
    audit adjustment for the labor settlements was 4 percent. The following
    chart depicts Amtrak's expenses since 1989.
    [GRAPHIC] [TIFF OMITTED] T12MA10.005

    [GRAPHIC] [TIFF OMITTED] T12MA10.006

                       ability to reach self-sufficiency
        Our review of Amtrak's March 1998 Strategic Business Plan showed
    that Amtrak expected to reach operating self-sufficiency by fiscal year
    2003. We estimated, however, that if Amtrak were to follow its 1998
    plan without any adjustments, Amtrak would sustain an additional $823
    million in operating losses between 1999 and 2003, and that it would
    have an unfunded cash loss of $304 million in 2003, $167 million more
    than it forecast. (The cash loss does not include depreciation.) Amtrak
    management is aware of our concerns and has indicated that it has taken
    actions to increase revenue and cut costs.
        A key determinant of Amtrak's future is its ability to increase
    revenue and reduce costs throughout its system. Revenue improvements
    will require robust implementation of high-speed rail in the Northeast
    Corridor, greatly expanded mail and express service, and improved
    ridership and revenue on Intercity and Amtrak West trains. Amtrak must
    also develop enhanced partnerships with State, regional, and local
    governments. Cost reductions will require close attention to actions
    contained in the Strategic Business Plan and achievement of the
    productivity increases that are part of the newly negotiated labor
    agreements.
        High-speed rail in the Northeast Corridor is vitally important to
    Amtrak's future. Amtrak's projected passenger revenues of $3.72 billion
    between 1999 and 2003 on the Northeast Corridor exceeded what we
    believe could reasonably be expected, given Amtrak's projected fares,
    frequencies, and trip times in the Corridor. Our projection of revenues
    is $3.50 billion during this time period, a difference of $219 million.
    Our extended projections, however, indicate that the revenues are
    likely to exceed Amtrak's projections by 2006.
        Expanded Mail and Express revenues are key to improving the
    performance of Intercity routes. In our 1998 assessment, we reduced
    Amtrak's projected net revenue from Express package service from $104
    million to $67 million cumulative in 1999 and 2003. We restated
    Amtrak's projections only minimally in the years 2001-2003, reflecting
    our belief that Amtrak could become a competitive player in this market
    despite the slow start-up in performance. Although Amtrak has recently
    established several additional partnerships with shippers, Amtrak must
    vigorously pursue its marketing plans and meet the operating
    expectations of its shippers if it is realistically to capture more of
    this traffic.
        Business Plan Actions must be achieved to produce cost savings.
    Amtrak's 1998 Strategic Business Plan contained 296 actions that
    cumulatively accounted for $1.1 billion in net bottom line impact
    between 1999 and 2003. We identified 94 actions that required impact
    adjustments totaling $440 million. The restatements resulted in $153
    million in reduced non-passenger revenue projections and a $287 million
    reduction in expense savings. For 35 of the 94 actions, totaling $372
    of the $440 million, Amtrak recognized the fact that the action would
    not achieve the intended result. For example, a decision by the Federal
    Energy Regulatory Commission foiled Amtrak's plans to purchase power
    wholesale for its own use and to resell to other Northeast Corridor
    users. Amtrak withdrew the action from its business plan, thereby
    eliminating a projected $212 million in cost savings between 1999 and
    2003.
        Amtrak's 1999 Strategic Business Plan contains new plans to reduce
    costs whose financial impact will be important to the success of the
    1999 Strategic Business Plan. Amtrak management and the Reform Board
    must pursue forcefully the actions contained in the 1999 plan and must
    monitor carefully their implementation. In this year's assessment, we
    will also be monitoring these proposed expense reductions and will
    consider the likelihood of their achievement.
        Labor productivity agreements reached as part of Amtrak's recently
    settled labor agreements must be fulfilled to offset part of the
    settlement costs. Amtrak's labor settlements included plans to offset
    20 percent of the incremental cost of the agreements with $53 million
    in productivity increases. We believe that these productivity targets
    are achievable. The onus is squarely on management and labor to see
    that the cost-saving targets are met. In this year's assessment, we are
    reviewing the specific work-rule changes geared to achieving the cost
    savings and will assess the likelihood that they will be implemented as
    required.
                        northeast corridor improvements
        Amtrak projects that, by 2002, over $180 million in net revenues
    will result from high-speed rail service in the Northeast Corridor.
    These revenues are a critical element of Amtrak's plans to become self-
    sufficient.
        High-speed rail is on schedule to begin at the end of 1999 but the
    schedule is extremely tight there is no room for slippage. Testing of
    the trainsets is progressing as planned and we have no reason to
    believe that they will not be delivered on schedule. The
    electrification project has experienced repeated delays, however, and
    is on a very tight schedule for completion and full system testing. The
    original schedule called for completion of all system testing by July
    1999, the current schedule is for October 1999, the same month service
    is set to begin. A further complicating factor, partially outside of
    Amtrak's control, is the intersection of the Northeast Corridor with
    the Central Artery project. Central Artery bridge and tunneling work
    must be completed on schedule in order for Amtrak to implement high-
    speed rail as planned. We are not aware of any problems that are likely
    to adversely impact the scheduled completion of this work.
        The high-speed rail program has had cost overruns. The current
    high-speed rail budget is $2.47 billion, an increase of almost $500
    million from project initiation. However, most of this increase stems
    from an expansion of the project size and scope. For example, Amtrak's
    addition of 15 high-horsepower locomotives to the high-speed rail
    program added $120 million to the total project budget. But 40 percent
    of the budget growth reflects a cost overrun in the electrification
    project between New Haven and Boston. Because of Amtrak's projected
    capital funding shortfall between now and 2003, any further cost
    overruns will need to be funded by diverting funds from other system-
    wide capital needs.
                                 capital needs
        Amtrak has significant capital investment needs, including
    improvements to keep the railroad infrastructure in good operating
    condition and investments to generate new business opportunities. We
    identified needs ranging from $2.7 billion to $4.0 billion. The $2.7
    billion is lower than Amtrak's estimate of minimum needs, but even at
    the lower amount, Amtrak's projected Federal funding will fall short by
    at least $500 million between 1999 and 2003. If operating losses are
    higher than Amtrak projected, Amtrak will have to spend more of its
    scarce capital funds to cover operating losses, and the gap between
    available funding and capital investment needs will increase.
        Amtrak will need $125 million more per year in capital
    appropriations between 2000 and 2003 than the Administration's request
    in order for it to attain its minimum needs level of capital
    investment. The $2.7 billion minimum level of capital investment we
    estimated would be enough to keep Amtrak operating in a steady state
    through the end of 2003, but would make Amtrak vulnerable to equipment
    problems after that date. We want to be very clear that this level of
    funding would make Amtrak susceptible to equipment and schedule
    reliability problems beyond 2003, thereby threatening its operational
    self-sufficiency. We do not recommend this level if Amtrak is to remain
    as currently structured.
        Amtrak would require an additional $200 million each year through
    2003 to sustain operations at its current level beyond 2003. With this
    level of additional funding, projects in progress could be completed
    and equipment overhauls continued, but no new investments could be
    made, most notably in new corridor development, one of Amtrak's highest
    long-term priorities.
        Amtrak would require an additional $450 million each year in
    Federal appropriations in order to invest in the types of new corridor
    services and other business that it projects will result in improved
    operating results and will be the key to Amtrak's long-term financial
    stability.
                              spending flexibility
        Funding Amtrak with an annual capital grant should not obscure the
    fact that Amtrak still requires operating assistance through fiscal
    year 2002. Amtrak's plans to achieve operating self-sufficiency depend
    on continued operating assistance, and without this help, Amtrak cannot
    survive until 2003.
        Amtrak requests flexibility in spending its Federal funding. Amtrak
    was given some flexibility to spend this year's appropriation on
    maintenance of equipment (an operating expense). In 2000, Amtrak is
    also requesting flexibility to use its Federal appropriation for
    maintenance of way expenses. Amtrak's request is consistent with the
    `transit' definition of capital applied by the Federal Transit
    Administration. There are strong economic arguments for making all
    maintenance expenses eligible for funding through Amtrak's capital
    grant. Amtrak needs the ability to decide whether refurbishing its
    existing capital assets makes better economic sense than investing in
    new replacements. Such decisions should be based on the economic merits
    of each expenditure and not on the relative availability of maintenance
    and investment funds.
        Expanding eligible expenses in next year's Federal appropriation is
    financially imperative. If the same funding restrictions as in the
    fiscal year 1999 appropriation are applied next year, Amtrak will not
    be able to cover its operating losses and could be forced to default on
    current obligations, in spite of the fact that Amtrak will likely have
    about $1 billion in Taxpayer Relief Act funds in the bank.
        Amtrak has strong incentives to economize on operating losses.
    Amtrak's current strategic business plan, and thus its long-term
    viability, is grounded on the revenues that are expected to flow from
    critical capital projects. Every dollar spent unnecessarily on
    operating losses is a dollar taken from these capital investments.
        How Amtrak is funded will have no effect on determining whether it
    can meet its congressional mandate. Amtrak abides by generally accepted
    accounting principles (GAAP) and must adhere to the requirements of its
    external auditors in determining whether an expense is classified as
    operating or capital. Therefore, regardless of the type of Federal
    grants Amtrak receives or how Amtrak is permitted to spend them, Amtrak
    will have to cover all of its operating expenses (except for excess
    payments for RRTA) in fiscal year 2003 from non-Federal sources. In
    other words, maintenance of equipment and maintenance of way expenses
    would, under current law, no longer be eligible for Federal funding in
    2003. That is the mandate from ARAA, and it is the standard we are
    using to gauge Amtrak's financial viability in our assessments.
        Mr. Chairman, this concludes our statement. I would be pleased to
    answer any questions.

                             independent assessment

        Senator Shelby. Mr. Mead, your office has monitored this
    independent assessment of Amtrak very closely, right?
        Mr. Mead. Yes.
        Senator Shelby. If Amtrak loses more than they projected in
    the strategic business plan, as you have just mentioned, does
    it not mean it is less likely that Amtrak can reach operating
    self-sufficiency by 2002? That is what you are saying, is it
    not?
        Mr. Mead. Yes, it is. I am also saying, though, that the
    essential design of our work is to provide Amtrak with warning
    signs.
        Senator Shelby. Sure.
        Mr. Mead. Alerts, so that Amtrak can adjust its plans.

                            high-speed rail service

        Senator Shelby. High speed rail initiative. The
    administration has taken a multifaceted approach to expanding
    the high speed rail service in the U.S. beyond the high speed
    corridor. Governor Thompson talked about that. Mr. Warrington
    talked about it. The Federal Railroad Administration's budget
    includes $12 million for high speed rail technology development
    and another $35 million is proposed to be shifted from the
    revenue aligned budget authority funds for a positive train
    control system, differential global positioning systems,
    railroad crossing improvements on high speed corridors.
        One important piece that is missing from this high-speed
    rail program is capital funding to improve the freight track
    over which high-speed passenger rail service would operate.
        This kind of capital investment, as you know, Governor
    Thompson, is very expensive. The total price tag for just one
    corridor program, the Midwest regional rail initiative--you are
    very familiar with it--is over $3 billion, and that is just one
    regional part of the program. It does not take into account
    other planned or hoped-for high speed rail corridors around the
    country.
        I will ask you this, Governor, and also Mr. Warrington. The
    Amtrak capital business plan includes only about $32 million
    total this year for corridor development. I know at the moment
    of no other Federal source for capital rail improvement. Who do
    you expect to pay for capital improvements to support high-
    speed rail corridors, because besides Amtrak, which has enough
    trouble staying afloat financially, what are the other possible
    funding sources?
        Governor Thompson. Well, Mr. Chairman, first off, we cannot
    do it without you. We cannot do the high-speed corridors
    without the Federal Government. There is no way possible.
        Senator Shelby. No way, is it?
        Governor Thompson. No way, without the Federal Government
    helping us, can we develop the high-speed corridors. We just
    cannot complete them.
        Second, you can expect that the States are going to have to
    contribute a portion of that. They have got to be a partner
    with the Federal Government in developing this. Amtrak cannot
    do it, even though Amtrak gave $25 million this year to start
    to develop the Midwest high-speed corridor.
        We are also developing some new non-electric, diesel
    locomotives. They are going to be able to pull non-electric
    trains at about 115-125 miles per hour, without
    electrification.
        Senator Shelby. So you would have to electrify these other
    corridors?
        Governor Thompson. No. We are developing new diesel
    locomotives that are going to be able to pull trains about 115
    miles to 125 miles, and that would be what we would be putting
    in the Midwest and down in the Southeast.
        Senator Shelby. Who is doing that? Are we doing that in the
    U.S.?
        Governor Thompson. Yes, we are.
        Senator Shelby. Is that GE, or General Motors?
        Governor Thompson. The Federal Railroad Administration is
    working on it with a consortium led by Bombardier. It will not
    be electrified, and it will be high speed. All we will have to
    do is close down some intersections, some grade crossings, and
    improve the rail beds, but these services will not be
    electrified, which will save a lot of dollars compared to the
    Northeast Corridor. But without the Federal Government we will
    not be able to proceed.
        Senator Shelby. Governor Thompson, what incentive would
    freight railroads, have to invest in these kinds of
    infrastructure improvements themselves? Do they directly
    benefit from high-speed passenger service, and if so, how?
        Governor Thompson. Well, they will benefit. They will
    benefit because by improving the rail lines, the rail beds, to
    handle our high-speed service, that is going to help them with
    their freight service, to be more efficient and deliver their
    commodities more on time, which will help them become more
    profitable. And if we get the Federal Government and State
    Governments to invest, that will save them from having to make
    the improvements all by themselves, so it really is a net gain
    for the freight railroads in America.

                              amtrak route system

        Senator Shelby. I have a question before my time is gone
    for Mr. Warrington.
        Mr. Warrington, since the General Accounting Office report
    was published last May, have you restructured your route system
    in any way to respond to the operating losses on 39 of your 40
    routes? Have you done it thus far?
        Mr. Warrington. The first thing that I did in the aftermath
    of that report, number 1, and in the aftermath of me being
    appointed to the position of president on an acting basis, was
    launched what I referenced earlier, Mr. Chairman, for the first
    time in the company's 27-year history, a genuine market-based
    assessment of every route and every segment. Not with an eye
    toward shutting the system down, but with an eye toward
    understanding what the market potential is, and the demand, for
    every route and every segment in the system, not just from a
    passenger point of view, but from a commercial point of view as
    well.
        Senator Shelby. The whole system.
        Mr. Warrington. The entire system, and I will tell you, Mr.
    Chairman, that if you go back to the 1950's and the 1960's and
    you look at the bottom line associated with every freight
    carrier in this country, all of those private freight carriers
    were hauling passengers in passenger divisions, and if you go
    to their bottom line, and you look at where they secured their
    revenue that made them profitable in those days, 45 to 48
    percent of the revenue that was attributable to passenger
    service that made them profitable came from the mail express
    business.
        Amtrak has lost that piece of business for 20 years. We are
    pushing it hard these days.
        Senator Shelby. Trying to get back on track.
        Mr. Warrington. Yes, Mr. Chairman.
        Senator Shelby. GAO cites, Mr. Warrington, that 17 of your
    40 routes carry in total only about 2 million or 10 percent of
    your total annual ridership. Wouldn't some of these routes be
    logical places for cutting back the railroads cumulative
    operation?
        Mr. Warrington. I cannot answer that question off the top
    of my head----
        Senator Shelby. But you will be looking at that.
        Mr. Warrington [continuing]. And without the benefit of,
    for the first time, an unbiased, nonnostalgic, and not
    politically based examination of the system, with a view toward
    developing a system that is driven by business sense, and
    understands the importance of growing market share. We will
    have a much better sense of what this national system needs to
    look like and what its opportunities are, Mr. Chairman, toward
    the end of the year.
        Senator Shelby. Mr. Mead, last, you have already got a head
    start of this question of the route system. You know it well.
    Does this strike you as a possible way to see where operating
    savings can or cannot be realized, and what are some of the
    potential problems we would face if we went farther with this
    proposal?
        And what I am referring to, at the February 25 Department
    of Transportation oversight hearing which you attended, I
    proposed that we think about a pilot project that we give
    Congress the Amtrak Reform Council and Amtrak's own management
    comparable data about operating costs on a given route. You
    understand where I am coming from.
        Mr. Mead. Yes, sir, I do, and I did reflect on your
    question at that hearing, and I have warmed to that idea
    somewhat. This is the idea of contracting out a route, perhaps
    two. There are two important caveats, though. One is, you would
    not want to have something short-term if you expected the
    contractor to make capital investments. That just would not
    happen.
        If you want to do something analogous to what Amtrak
    already does when they contract out with commuter rail
    operators, that could be shorter term in duration.
        Another caveat, and Amtrak's legal department would have to
    go over this one, is a labor issue. Now, I know FAA and the air
    traffic controllers managed to get low-level activity control
    towers and contract those out. I do not know how it would work
    with rail labor.
        I would put out a request for proposals and see what is
    proposed. I do not think the idea should be dismissed out of
    hand.
        Senator Shelby. But if you save Amtrak, as Governor
    Thompson is talking about, and Mr. Warrington, if you are able
    to save Amtrak, make it viable, make it financially secure,
    whatever that means, you are saving jobs, and labor has a stake
    in this, and I think it is up to Amtrak and perhaps us to sell
    that, to market that. We are in this together, that everybody
    loses if the passenger, the people that are dependent on jobs,
    if this goes down. Don't you agree with that? Do you, Governor
    Thompson?
        Governor Thompson. I certainly do, Mr. Chairman.
        Senator Shelby. So, Governor Thompson, labor is going to
    have to buy into making Amtrak viable, are they not?
        Governor Thompson. Yes, they are.
        Senator Shelby. And they will play a big role in whether or
    not Amtrak survives one way or the other, will they not?
        Governor Thompson. There is no question about that, Mr.
    Chairman, and I have been impressed since I have been chairman
    with the kind of cooperation we have received to date from
    labor, and this is a lot different than it was the first time I
    served on the Amtrak board from 1990 to 1994.
        Senator Shelby. Not adversarial but cooperative, where we
    are all in this together?
        Governor Thompson. That is what we are trying to do, and
    our new contracts reflect that very explicitly, Senator.
        Senator Shelby. Senator Lautenberg.
        Senator Lautenberg. Thanks very much, Mr. Chairman, and my
    compliments to all the witnesses for providing good, clear, and
    focused testimony, and Governor, in case you decide to go out
    of Government, I think that with me doing the marketing plan
    and you doing the selling, we would be a hell of a combination.
    [Laughter.]
        Governor Thompson. Well, I would like to team up with you,
    sir.
        Senator Shelby. Can we buy stock?
        Governor Thompson. Yes, you can.
        Senator Lautenberg. Yes. I think we would do something like
    Internet Travel, because that will get us good stock prices and
    we would not have to be in business long. [Laughter.]
        Mr. Warrington, I am pleased that you have taken over the
    way you have. We have high expectations, and we are encouraged
    by Governor Thompson's endorsement of what is taking place.

                northeast corridor high-speed rail introduction

        So much of what we are anticipating depends on the success
    of our high-speed rail introduction. Is there anything that
    comes to mind that could stop us, or prevent us from meeting
    the anticipated date of introduction?
        Mr. Warrington. No. We are still concentrating and focusing
    on late 1999. As a matter of fact, our high horsepower
    locomotives are being tested at the test track. Our first train
    set will be going out there in the next several days, and all
    of the testing that we have done so far has indicated that we
    have got a winner. But we will be continuing to test the
    equipment and those train sets over the next couple of months.
        The electrification project, as Ken indicated, has slipped
    a bit. That is a design-build contract, and you may recall that
    the origins of that project have a fairly ugly history, going
    back to the early nineties, when Morrison Knudsen basically
    defaulted and we had to move the design and engineering work
    over to Mass Electric and Balfour-Beatty, and the engineering
    had to be redone.
        It has slipped a bit. I will tell you that I personally am
    engaged with the president of Mass Electric and Balfour-Beatty
    on a weekly basis. I spoke with them as recently as yesterday
    and they assured me that that project will be completed before
    the end of the calendar year, and assured me that we will be in
    a position to operate trains before the end of the year. They
    have committed to me, and committed to us, that they are
    throwing every resource available at it, and Amtrak as a matter
    of fact, our engineering organization and our maintenance of
    way organization, are throwing everything that we can at that
    project to support it, and to support the contractor in a whole
    host of ways.
        Senator Lautenberg. When we talk about high-speed service
    on the corridor, are we talking about Boston to Washington,
    because basically you just said if there was a delay in that
    northern leg, that should not, would it, prevent us from
    offering service Washington to New York?
        Mr. Warrington. Absolutely not, Senator. As a matter of
    fact, there really are two elements to this project, and one of
    them is Washington to New York. You know, when we originally
    conceived of the high-speed program between Washington and New
    York, our original estimates were that we would bring travel
    time down from 3 hours to 2 hours and 45 minutes, and when we
    launch at the end of the year, we will actually be running
    trains between New York and Washington in under 2 hours and 30
    minutes, not every train, but we will have express trains with
    one or two stops that will be under 2-30, and I will tell you,
    that will knock the socks off the competition.
        It will not just be a safety valve for air travel. It will
    be the primary method of travel, and regardless of schedule and
    electrification, the ability to tap into that market and launch
    that service between New York and Washington will certainly be
    there.
        Senator Lautenberg. That would be excellent, because with
    the reliability factor you can throw away 30, 45 minutes and
    not worry about it if you know that you can get there, and I
    commend you on the scheduling that is taking place, the on-time
    scheduling that is taking place of recent vintage.
        I must say, other than one glitch that we had when there
    was a total power failure, I get on the train to work and I get
    here on time, and I always used to fly, always, but now I take
    advantage of even the improvement, the service that is being
    provided, and I see that some of the cars, even currently,
    Governor, have been rehabbed, I understand by Amtrak in its own
    facility, a pretty good ride. Getting rid of those square
    wheels makes a heck of a difference. [Laughter.]
        Governor Thompson. On-time performance, too.
        Mr. Warrington. Senator Shelby's point earlier, which
    relates to your point about overhauling those cars--our entire
    metroliner fleet over the past 2 years--was completely
    overhauled in a program designed and done by our own employees,
    and I would stack those employees up against any employees in
    this industry around the country.
        As a matter of fact, they are so good that just about 3
    months ago Amtrak won the contract to overhaul cars and
    locomotives for the Dallas-Fort Worth Transportation Authority.
        Senator Shelby. That is good news.
        Mr. Warrington. And we are getting very aggressive about
    not necessarily contracting out operations, but where we are
    good, and where we have a specialty, and we are efficient and
    productive to contract business into the corporation.
        Governor Thompson. It is another line of income that we are
    looking for.
        Senator Shelby. That is excellent.
        Mr. Mead. May I throw a little water on this?
        Senator Lautenberg. Sure. Warm or cold water?

                            infrastructure condition

        Mr. Mead. Cold. No, luke warm. I do not want to
    overemphasize, overstate the point, but the infrastructure
    condition of the south end of the corridor really does need
    work, the track, the bridges, the tunnels----
        Senator Shelby. Are you speaking of the Washington area?
        Mr. Mead. Washington to New York. These trip times that
    Amtrak is projecting are very sensitive to the condition of the
    infrastructure. Amtrak owes you a plan--an infrastructure plan
    for the south end of the corridor--and I am hoping it gets here
    soon.
        Mr. Warrington. That is true, Mr. Chairman, and we and the
    Federal Railroad Administration are wrapping up that plan, and
    it is the long-term investment requirement, the phase 2 study
    for the south end. The trip times that we will deliver on the
    south end are based upon investments that have been made and
    are being made before the end of the fiscal year to get us
    where we need to get to.
        I will tell you though, maintaining to those tolerances and
    investing prospectively, is absolutely critical, not only to
    improve those travel times, but to maintain those travel times
    and not degrade.
        Senator Lautenberg. Do you think that we can improve with
    the appropriate kind of investment the time necessary to travel
    between here and New York?
        Mr. Warrington. Absolutely. As a matter of fact, we can do
    better than 2-28, but everything costs money. I will tell you
    that this year, every minute of travel time that we take off a
    Metroliner trip between New York and Washington translates
    roughly into $8 million a year in revenue. You cannot get pay-
    back like that anywhere.
        The difficulty is that the investments we have made to date
    have been relatively inexpensive, but the cost of each
    incremental minute becomes more expensive, because you have to
    invest in the harder things in order to get those incremental
    minutes.
        Senator Lautenberg. Yes. One thing I would say about the
    Inspector General here, and that is that he is never
    embarrassed or holding back on things that need to be said
        Mr. Warrington. Nor he should.
        Senator Lautenberg. And I agree 100 percent, so any time
    that you think there is something to throw in here, please do
    not be bashful, because we are all working to the same
    objective.
        Mr. Warrington, how big do you think are the nonpassenger
    revenue opportunities?
        Mr. Warrington. We have had a lot of successes on that
    front just over the past year, and my testimony and Governor
    Thompson's testimony highlighted some of those opportunities.

                           partnership opportunities

        You know, we tend to be a traditional railroad with lots
    of, as I say, operating guys. We are amongst the best
    professional operating folks in the world, and I would stack
    our guys up against--men and ladies--up against anybody. But we
    are pushing very hard to inject a much more commercial and
    business orientation into the corporation, to break out of the
    box and recognize that partnerships are where our future is,
    not only partners with State and local governments around
    funding and around service plans, but partnerships with private
    businesses around investing in our company, sharing the risk
    and sharing the benefits.
        We are beginning to do that aggressively with a whole host
    of great carriers around the mail and express business. As
    Governor Thompson indicated earlier, it was very significant
    that Amtrak executed a deal with Dobbs just a couple of months
    ago, to basically convey Amtrak's commissaries around this
    country to the private sector, and we did it the right way. We
    did it with our employees. We did it in partnership with
    organized labor.
        Our unions understood the importance of doing this. We
    agreed over time we would absorb those employees, or enable a
    buy-out of those employees. We are going to save $28 to $35
    million over 5 years. We did it the right way with labor rather
    than in any confrontational way, and we are going to get better
    food, and we are going to save a lot of money.
        There are lots of partnership opportunities like that
    across the system, Senator, and we are going to seize every
    single one of them.
        Senator Lautenberg. Mr. Chairman, if I might, I have a
    safety question.
        Senator Shelby. Go ahead.

                          safety of northeast corridor

        Senator Lautenberg. You know that ever since the Chase,
    Maryland accident I have had a long safety concern regarding
    freight traffic on the Northeast Corridor. Do you foresee a
    situation where either CSX or Norfolk Southern will run freight
    on the Northeast Corridor utilizing electric locomotives? Can
    we get a compatibility there that helps both of us, both parts
    of this to improve their service at the same time, not create
    that problem?
        Mr. Warrington. The first thing I want to do, Senator, is
    genuinely thank you for your leadership around the safety
    question. After the Chase incident, and largely thanks to you,
    lots of improvements have been made, around regulatory and
    engineering and design improvements on the Northeast Corridor,
    relating to train control, positive stop, and signal systems.
    Much of the required improvements are entirely attributable to
    legislation you authorized, and we have a much, much safer
    railroad out there today as a result.
        I will tell you that many, many years ago there were many
    more freight trains operating on the Northeast Corridor. I
    would not in any way enable another freight train to operate on
    that corridor unless I was comfortable, and all of our
    operating folks were comfortable, that we were doing it safely,
    because our primary core business is passenger safety. Safety
    comes first in this operation.
        We will execute a deal with Norfolk Southern very shortly
    around road-railer service on the Northeast Corridor and on the
    Harrisburg Line, which is one of our underutilized assets, and
    we will have windows from 10 p.m. to 6 in the morning. We will
    utilize those windows when we are not operating significant
    levels of passenger service.
        Our first priority is safety. Our second priority is not
    disrupting our passenger operations, on Metroliners, Northeast
    Direct, or our sizable commuter operations.
        We not only have that opportunity on the south end, but we
    are working with the P&W Railroad on the north end, which
    serves the port of the Providence area, Quonsett Point. We are
    working to complete the third track up there, to enable freight
    traffic in and out, and in some part using the Northeast
    Corridor.
        I will tell you that we will not do this unless we are
    comfortable and satisfied that we can do it right and do it
    safely and, in addition, assure that the freight carriers are
    fully compensating us for any excess wear and tear or a
    diminution of useful life of any of those assets. I assure you,
    that is the way we will run this operation, and we will also
    make a few bucks out of it.
        Governor Thompson. Mr. Chairman, Senator Lautenberg, can I
    just have 5 seconds? I just want to tell you, the new direction
    of this Board and the management will be, if we have troubles
    in regards to meeting our schedule on our operation, you
    individuals will be the first to know. We will not try to hide
    it, obfuscate it. We will come up and tell you exactly what our
    problems are so that you will be the first to know, so that you
    can respond.
        Senator Lautenberg. Thank you, Mr. Chairman.
        Senator Shelby. Senator Reid, thank you for your
    indulgence.
        Senator Reid. Mr. Chairman, thank you very much.

                          increase in railroad support

        I have a little different philosophy than I have heard here
    today. I believe that we need to support our railroads more,
    and I am not at all embarrassed to vote for subsidizing rail
    traffic in this country. I think if you look what we do for
    airports, for airlines, for automobiles--I had some people come
    to me from Nevada yesterday. We are going to give them about
    3,000 acres of Federal land. Why? Because it is an airport. It
    is part of the law.
        I do not know what that land is worth, but lots of money,
    but that is the law. We are going to help them create an
    airport.
        It seems as if rail travel gets the short end of
    everything. It seems to me that we have lost track of the fact
    that of all we do for highways, all we do for passenger car
    travel, the trucks in this country, they devastate our highways
    around the country. They pay a minimum amount.
        Airports, we have all kinds of ingenious ways to charge
    airlines and others that use our airports to subsidize air
    travel in this country.
        I am glad to hear you are working on some of those rail
    cars. The fact is, we should be buying new ones. How old are
    some of those cars that we are renovating?
        Mr. Warrington. 20 to 25 years.
        Senator Reid. Those are probably some of the newer ones. I
    think that we could not stop patting ourselves on the back
    enough last time we passed a highway bill. Out of this huge
    bill, hundreds of billions of dollars, we have a small amount
    in that bill, a tiny amount in that bill for doing something
    with magnetic levitation.
        We invented that in this country, but we were too cheap as
    a Government to subsidize research and development for that
    mode of travel, and now we have the Germans and the Japanese
    developing magnetic levitation, and we are going to use it here
    in this country. We will be importing that equipment to the
    United States.
        I think it is wonderful, the things that I have heard here
    today, how you have improved upon the reservation system, and
    Governor Thompson, you have a reputation for being a man who
    looks at dollars and where they are spent. I think it is great
    you have this assignment, and you have accepted it.
        But I guess what I am saying is, let us be realistic about
    this. We need help with our rail system in this country. In Las
    Vegas, take Las Vegas, the destination, the resort capital of
    the world. We have the largest hotels in the world. The 20
    largest hotels in the world are in Las Vegas.
        Our airport is jammed. We have spent hundreds of--no,
    billions of dollars in that airport. Our highways are jammed.
    You know, we cannot bring more people by car into Las Vegas.
        Railroad, there is nothing happening. We have been
    struggling to get a few people coming in there every year, and
    that has been a 2- or 3-year battle to get rail service from
    Southern California to Southern Nevada.
        I just think that we have to recognize where we are in this
    country. We need help with rail travel in this country, and I
    would like to hear from you gentlemen if any of you agree with
    me.
        Governor Thompson. Senator Reid, I would like to respond
    first, and I know George Warrington wants to as well. Just to
    give you the perspective, $30 billion is going to be spent in
    Federal funding this year for highways.

                        las vegas to los angeles service

        We are the poor stepchild. But we think that we can do a
    job with that money, Senator Reid, and make ourselves
    operationally self-sufficient. We will never be able to do it
    without some kind of capital support. And I appreciate your
    willingness to support us in that regard.
        In regards to Los Angeles to Las Vegas, we took the Board
    out to California last month. We had a real good discussion
    about it. And we think that we will operationally--we are
    looking at February of next year--have a full round-trip train
    going into Las Vegas, from Los Angeles, daily. And we are
    completing an assessment with the Federal Railroad
    Administration on a Talgo train set. We are talking to the
    Mayor and the Governor about some subsidies for us. And we are
    also talking to the tourist industry out there.
        And I want to thank you for your letter. You and Senator
    Bryan wrote a very supportive letter about the service. And we
    think that we will be able to operate that new train set from
    Los Angeles to Nevada. And we believe it will be going at 8
    o'clock in the morning from Los Angeles, right George?

                               operating subsidy

        Mr. Warrington. Yes. On the overall policy question,
    Senator, we have been directed by public policymakers, by this
    Congress and this administration, that we need to be operating
    subsidy-free by the close of 2002. So, that is a challenge.
    That is a charge. That is just the way it is when you sit in
    this seat.
        And we have examined the numbers. It is going to take a lot
    of hard work and a lot of, as Ken said, good economic climate,
    good business sense, lots of commercial partnerships,
    successful high-speed rail. The elements are there to make this
    work. But I am going to be perfectly straight, that that will
    be a short-lived success story unless between now and then we
    have a very frank conversation about the real capital cost
    associated with sustaining and growing America's Railroad. And
    we have not really had that discussion.
        I have an obligation, we have an obligation, to come back
    to you toward the end of this year, when we have got our
    market-based assessment concluded. And we will tell you what
    the real capital cost and operating benefits are, associated
    with the existing system and other new services and new, higher
    speed corridors. There will be a price tag that goes with that.
    And our success will be short-lived if we do not figure out a
    way, as a matter of public policy, to bite the bullet and have
    a real frank discussion and solve the problem around what we
    genuinely believe we are entitled to.
        I will tell you, we have a credibility problem at Amtrak
    around this operating subsidy question. I need to continue to
    demonstrate to you that we are chipping away at that problem
    and getting to the point where we can behave and operate
    commercially subsidy-free. But the deal has to be, as we get
    there, we also need to not have that be a fruitless exercise.
    We need to figure out what the right long-term solution is, so
    we are not living on the edge of our seat every year, not
    knowing whether we are going to be able to invest in this
    railroad.
        And as a matter of public policy, we believe, if we are
    credible and demonstrate to you that we can do that on the
    operating side, we really are entitled to the same comparable
    level of capital support that every other transportation mode
    in this Nation receives. Much of it is indirect. It is direct
    to Amtrak, and it is like a target on our backs.
        But the aviation industry, the maritime industry--I used to
    run the Port of Philadelphia--the maritime industry, everybody
    is in line for those bucks, and we are simply not getting them.
    And, worse than that, the States and the governors do not even
    have today the flexibility to take their Federal dollars and
    make locally based decisions around their willingness to
    perhaps allocate their share of Federal transportation funds to
    the intercity rail network. So, not only do we not get it
    directly, we cannot even enable governors to make that kind of
    a decision about investing in high-speed service or intercity
    service.
        Senator Reid. Did you have something, Mr. Mead?
        Mr. Mead. I just wanted to make two quick observations. For
    a number of years, this railroad has been groveling for crumbs
    and has been the victim, you might say, of serious
    disinvestment. The Taxpayer Relief Act was a substantial
    infusion of capital. There is a lot of promise being placed on
    that.
        But there is no question, they have just been groveling for
    crumbs. At the same time, there is the expectation for the
    railroad--why do we not have a good, first-class railroad with
    quality service? Well, one reason we do not is because there
    has been this gradual disinvestment. And now Congress steps in
    with the Taxpayer Relief Act.
        The second is to return to the chairman's point--the one he
    made in his opening remarks. If you want more money for Amtrak,
    there are several very serious decisions facing Congress
    regarding the funding of aviation this year. The general fund
    is where some of this aviation money comes from. And if general
    fund dollars get locked up for aviation, there will be
    substantially less for Amtrak and Coast Guard; that is a
    tradeoff only Congress can make.
        Senator Reid. Mr. Chairman, Senator Lautenberg and members
    of the panel, I would hope that someone of the stature of
    Governor Thompson--and I am not meaning to pick on you, but
    someone of your stature--we need national leaders talking about
    the need to do something about rail travel in this country.

                     service outside the northeast corridor

        It is easy to talk about this Northeast Corridor, because
    it is a money maker. But there are other parts of the country
    that are not, but could be. But it will not happen unless we
    invest money in building the lines, so that there are
    credible--spend some money on magnetic levitation and other
    high-speed train travel, as they are doing in other places in
    the world. Otherwise we are going to rue the day--I repeat--our
    highways and our airports are crowded. I do not think we will
    ever build in America another major airport.
        Governor Thompson. Senator Reid, if I could respond
    quickly.
        I did not take this job just to build the Northeast
    Corridor. The reason that I accepted the responsibility and the
    challenge to try and turn Amtrak around is because I believe in
    it. I passionately believe in rail passenger service in
    America. We need to do it.
        If France can do it, Germany can do it, Japan can do it,
    why not the United States? We need rail passenger service. And
    I said earlier, California is going to have 19 million more
    people by the year 2020. The only salvation is to have a good
    rail passenger service in California. They cannot build enough
    airports. They cannot build enough highways to do that.
        And I am out speaking about Amtrak all over this country.
    As you probably know, I am not a shrinking violet. I love to
    get out and tell people what I think. And I have been in your
    State, and I have talked about it, 2 weeks ago, about the need
    for Amtrak service from Los Angeles to Nevada. And I think
    there is a new kind of renaissance in America, a new feeling
    for passenger rail service, that people really are starting to
    believe in.
        And I think we have to show you that we can do it. And this
    Board, this management team, together, along with the
    cooperation of Ken Mead, are going to show you that we can make
    it. And if we can make it to operating self-sufficiency, then
    we are going to come back to you and say we want to develop the
    high-speed corridors in California, in Nevada, in Alabama, in
    Mississippi, and Wisconsin, and Chicago. And we are going to
    have to have some capital in order to do that. But we have to
    first show you that we can deliver a good product. And that is
    what we have to do this year.
        And it is difficult. We have got some real tough challenges
    in front of us. But we are dedicated to making that happen.
        Senator Reid. Mr. Chairman, I have some questions I would
    ask to be submitted for the record.
        Senator Shelby. Without objection, that will be done.

                 contracting improprieties and general failures

        If I could, we will have a second round.
        Last month, the GAO's Office of Special Investigations
    published a letter to me regarding an allegation that they had
    received through GAO's Fraudnet, concerning a consulting
    contract that had been improperly awarded. GAO found that the
    contract, the arrangements of which, violated numerous Amtrak
    procurement requirements, caused the unnecessary expenditure of
    $1.3 million by Amtrak.
        The same GAO letter stated that according to Amtrak's own
    Inspector General, 95 percent of Amtrak's consulting contracts
    reviewed by the IG did not have proper approval authority or
    written justification, and 90 percent were not properly
    approved.
        Mr. Warrington, how has the railroad responded to these
    findings of contracting improprieties and general failure to
    follow Amtrak's procurement policies and rules?
        Mr. Warrington. Frankly, Mr. Chairman, I jumped on this one
    well before I received that report.
        Senator Shelby. Good.
        Mr. Warrington. As a matter of fact, when I came down to
    D.C. a year or so ago, frankly, I had some concerns about the
    disparate nature of the way the procurement function was
    organized. It was highly decentralized. And there was a fair
    amount of looseness. And that was from my vantage point in
    Philadelphia.
        When I moved to D.C., I made a very firm set of decisions
    about change. The first thing I did was contracted with Price-
    Waterhouse-Coopers to do a review and assessment of what was
    going on, because my gut was telling me that, you know, this
    was not quite right. And I pride myself on strong and focused
    management. My career is built around being focused and
    decisive and being a leader around management. And that kind of
    stuff bothers me.
        I got a set of recommendations from Price-Waterhouse-
    Coopers several months back. And I brought them to Governor
    Thompson and the Amtrak Board of Directors, along with a whole
    host of other organizational management changes related to the
    strengthening and the centralization of the procurement
    function across the board, including pulling all of those
    contract functions out of the engineering organization.
        Senator Shelby. Has it been done? Are you doing it? Are you
    in the process of doing it?
        Mr. Warrington. The organization design is in process. And
    I am in the process of interviewing five very strong
    candidates. As a matter of fact, Price-Waterhouse is doing the
    recruiting for me. They are very, very good on this stuff. They
    come out of the--a lot of them have military, private sector
    and public sector backgrounds. And we will get one of the best
    and the brightest, to make sure that we are in good shape
    there, Senator.

                             capital spending plan

        Senator Shelby. Thank you.
        Governor Thompson, the Amtrak Board approved a $1.4 billion
    capital spending plan for fiscal year 1999. That includes the
    following funding streams: The Taxpayer Relief Act and general
    appropriated capital funds, State or leveraged funds, bank
    loans, reprogrammed funds, and matching funds. In the fiscal
    year 1999 Transportation Appropriations Act, Amtrak received
    $609 million in capital grants, of which 40 percent, or $244
    million, is available for obligation this year.
        How will this capital appropriation be spent? And is it
    true that very little, to none, of these capital funds will be
    spent for traditional capital expenses, such as equipment,
    track and track improvements, facilities and rights-of-way
    purchases?
        Mr. Warrington. You are talking about fiscal year 1999,
    Senator, correct?
        Senator Shelby. Yes, we are talking about this year.
        Mr. Warrington. Yes, which is the current year.
        Senator Shelby. Yes.
        Mr. Warrington. Yes. As a matter of fact, when we converted
    from a capital and operating grant to a capital grant, the
    basic deal was that we needed more flexibility to spend in a
    way which had previously been defined as operating. And we have
    been very straight about that.
        And, frankly, that is not unlike what all the other modes
    have done, as well. It defined capital maintenance in a broader
    way. As a practical matter, in fiscal year 1999, we will end up
    using about $484 million of that $609 million for capital
    maintenance, which is not necessarily hard capital.
        Senator Shelby. Would that include your idea, or what you
    are doing, capital maintenance, spent on maintenance of
    equipment and debt service?
        Mr. Warrington. As a matter of fact, about $50 million of
    that $609 is going to debt service. And the remaining is for
    operating--like expenses.
        Senator Shelby. We have been told that less than $3 million
    will go for traditional capital purposes.
        Mr. Warrington. I think it is a little bit more than that.
    I will have to get you the precise number.
        [The information follows:]

        Amtrak received 40 percent, or $244 million, of the
    appropriated $609 million in fiscal year 1999. Of that $244
    million, $50 million was used for capital purposes--$44 million
    of which was for debt service principal and $6 million for
    other capital projects, including those suggested by the Senate
    Appropriations Committee (such as the Southern Pines, NC, and
    Erie, PA, station renovations). Debt service is considered a
    traditional capital expense because it represents the principal
    for capital purchases made in previous years. The remaining 60
    percent of the $609 million will be spent in fiscal year 2000,
    for which the capital budget is still being developed.

        Mr. Warrington. But the lion's share of that money is being
    used for--$484 million is for capital maintenance; about $50
    million is for principal on the debt; and the balance is for
    some combination of operating and capital. I believe it is
    primarily capital.
        Senator Shelby. That is an unusual use of that kind of
    capital money.
        Mr. Warrington. Mr. Chairman, we were very frank last year,
    and I am being very frank with you this year.
        Senator Shelby. I know you are.
        Mr. Warrington. If we are getting a capital-only grant, for
    all of this to work--we may not like all of the elements of
    this--but for all of this to work, we need a certain level of
    funding, and we need the flexibility to spend it in a way which
    we incur costs around.
        Senator Shelby. But if we give you money for capital
    expenditures, and you desperately need capital expenditures, it
    seems to me that ought to be--you are investing in the future
    there.
        Mr. Warrington. That is true.
        Senator Shelby. And I know you are treading water at times
    in other areas. But, in a sense, you are using capital funds
    for non-capital--what traditionally would be known as non-
    capital expenditures.
        Mr. Warrington. Mr. Chairman, in an ideal world, I agree
    with you. But you have to deal with the hand that you are
    dealt. And we did make a conscious decision to wall off the TRA
    funds. And I will tell you, Mr. Chairman, we received a lot of
    pressure, frankly, a year ago, to use the TRA Fund for these
    kinds of purposes. And we and the Amtrak Board of Directors,
    management and the Board, resisted a lot of pressure to use the
    TRA as the easy way out, and to spend down TRA for capital
    maintenance.
        And we took a policy position that we promised the Congress
    that we would reserve that TRA money exclusively for high-yield
    capital investment. It is one of the reasons why we are ahead
    of plan this year, because we have invested that money wisely
    in things like the call center, where you get real payback.
        So, we made a conscious decision, and we were very up-front
    about it. We will reserve the TRA money for high-yield capital
    investments, but we have got to have some flexibility if we are
    going to make this plan work over the next couple of years, to
    use the annual capital appropriation for capital maintenance,
    like all other modes, all other federally funded modes do. But
    the commitment is that by the time we get to 2002, the share of
    that annual capital appropriation that is being devoted to
    capital maintenance is significantly declining.
        Senator Shelby. Will any of the capital funds be used for
    what we call excess railroad retirement payments?
        Mr. Warrington. The total excess railroad retirement
    payment, by 2002, will be close to $200 million a year.
        Senator Shelby. It is my understanding that Amtrak can only
    use its own revenues for these retirement payments.
        Mr. Warrington. That may be the case, Senator. But it all
    comes together into a bottom line. And, in effect, what the
    basic deal has been is that by the close of 2002----
        Senator Shelby. Are you using the ``fungible'' maybe?
        Mr. Warrington. Yes.
        Senator Shelby. Your money is fungible.
        Mr. Warrington. The basic deal, and what was written in the
    law last year, Senator, was that, by the close of 2002, we are
    operationally self-sufficient, except--except there was a
    recognition that there is this excess railroad retirement
    burden out there that we all need to figure out a way to deal
    with effectively. And we project that number to be, by 2002,
    somewhere between $185 million and $200 million.
        Senator Shelby. Mr. Mead, do you want to comment on that?
        Mr. Mead. There are two parts to this. One is the
    nomenclature, ``capital grant''; we really need some sunshine
    here. Because, in truth, ``maintenance of equipment'' and the
    ``maintenance of way'' are considered operating expenses. And
    yet we have here something called a capital grant. Although you
    have to readily concede that while ``maintenance of equipment''
    and ``maintenance of way'' are essential to maintain capital,
    they are in fact quite different from capital.
        On the excess Railroad Retirement Payment point, I was not
    sure that, in 2003, that was an item that Congress had agreed
    to fund.
        Mr. Warrington. Our understanding is it is an item that
    Amtrak is not responsible for covering as an operating subsidy
    expense. It is an item out there that does not fit into the
    demand--that is not included within the demand for Amtrak
    coverage from an operating----
        Senator Shelby. Basically, Mr. Warrington and Governor
    Thompson and Mr. Mead, should we not call it what it is? Should
    we even call this appropriation designated ``capital grants''?
    Perhaps we could call it preventive maintenance.
        Governor Thompson. We should.
        Senator Shelby. In other words, let us be candid with each
    other about it.
        Governor Thompson. We should. Mr. Chairman, we should.
        Senator Shelby. And you all seem to be candid people. And I
    think we all do better on the committee and we do better with
    everybody when we put it on the table. Do we not, Governor
    Thompson?
        Governor Thompson. I agree with you, Mr. Chairman. I think
    we should. And that is why we wanted flexibility in the
    language. But I think we would be much better just to tell
    everybody what it is for.
        Senator Shelby. Absolutely, where we are.
        Governor Thompson. Where we are. We want to be candid with
    you, and we would like to be able to have everybody understand
    what we are spending the money on.

               parallels between amtrak reform and welfare reform

        Senator Shelby. Absolutely. Senator Gorton could not be
    here. He is a very active member of this committee. And he
    asked me to ask this question, Governor Thompson, of you. In
    your testimony earlier, you compared the daunting task of
    reforming Amtrak to welfare reform, which you have got an
    exemplary record in as Governor. By using this analogy, are you
    suggesting that we take the same approach with Amtrak, and
    return power to operate this system to the States, and look at
    new ways of doing things instead of trying to operate under the
    same failed model? Would you comment on that a little, because
    you have had the same experience?
        Governor Thompson. I certainly would, Mr. Chairman. And I
    thank you so very much for the question.
        Senator Shelby. This is on behalf of Senator Gorton.
        Governor Thompson. I understand that. But everybody
    understands that railroad passenger service does not stop at
    the State line. It goes all over. And it would be impossible
    for States to do this. If you are going to have a national
    passenger rail service, it has got to be a partnership with the
    Federal Government, with Amtrak and with State governments,
    along with the freight railroads. We are all in this together,
    and we cannot do it individually. And we cannot survive without
    your help and guidance.
        And that is why we are here today, to tell you that there
    is a new Amtrak Board, a new Amtrak direction out there, and we
    are going to be brutally candid with you, and we expect the
    same from you. And the States could not do it. This has to be a
    Federal/Amtrak partnership.
        Senator Shelby. Senator Lautenberg, do you have any other
    questions or comments?
        Senator Lautenberg. Yes, thank you very much, Mr. Chairman.
    I just have a couple of things.

                                farley building

        One is that as we develop an attraction for railroading, we
    know what happened, for instance, when Union Station here was
    rehabbed. It is a place that people want to come to and they
    feel comfortable in. We are seeing the same thing in
    Philadelphia.
        Mr. Warrington. That is right.
        Senator Lautenberg. The question of New York, the Farley
    Building, has also got to be part of the attraction. Because,
    very frankly, you have been to Penn Station, I have been to
    Penn Station, it is not a pleasant place to be.
        Mr. Warrington. It is not adequate.
        Senator Lautenberg. It is hopelessly inadequate, because
    you have got all the commuters coming in that place. It is
    awful.
        Anyway, Mr. Warrington, are you aware of any funding
    shortfall that might obstruct the completion of the Farley
    Building project?
        Mr. Warrington. I will tell you that we are very
    interested--you know, we spent the day yesterday in New York,
    and it became clear to everyone there that, with the kind of
    demand for the existing Penn Station, we are not going to be
    able to make this all work over the next 10 or 15 years. And
    this is really around the long-haul demand. And when you
    project out the demands on that facility--even today it is
    difficult, but down the road, it even begins to pose a safety
    hazard around clearing platforms.
        And I think, working together, with have been very
    supportive of and want to participate seriously in a new
    station in New York, which should be and needs to be the Farley
    project. So, we are very interested in being supportive and
    being helpful and figuring out the right way to make that
    project work.
        But, meanwhile, we have got high-speed trains coming in the
    next year, and we also need to invest some money in the
    existing facility in order to accommodate the demand that is
    there today and the demand that will be there over the next
    several years, until the Farley Building and the Farley project
    can be successfully completed.
        Governor Thompson. I would like to say something. On the
    Board, we had a really heated discussion about this on Monday
    evening of this week. And the Board's position is that we
    cannot afford, right now, putting our capital into the Farley
    Building. Our primary goal is to become operationally self-
    sufficient by the year 2003. And any diversion of money is not
    going to be acceptable to this Board.

                          need for trans-hudson tunnel

        Senator Lautenberg. That is an interesting thing, Governor.
    Just a couple of days ago, Representative Bob Franks, from New
    Jersey, a senior member of our delegation, a Republican, did
    propose looking at the possibility of a new tunnel, a rail
    tunnel, between New York and New Jersey, between the north and
    the south, which is essentially what we are talking about.
    Because I am very familiar with that tunnel and its operation.
    I was Commissioner of the Port Authority, and that is what
    attracted me to transportation before I came to this Senate.
    And the capacity there is really limiting.
        So, as we examine what it is that we are going to need for
    serious high-speed rail service--and I am encouraged by what I
    have heard you say here today--and that is if we make the
    investment, if we ever got that New York ride down to less than
    2\1/2\ hours, it would relieve the air use, the aviation
    throughout the country. Because if you can pull these things,
    the shuttles, give them a little relief up there in terms of
    scheduling them into the airports, it would work to the
    advantage of every airport across this Nation. Because what
    happens in New York happens all over. The same thing in
    Chicago. The same thing in Denver. And we ought to be doing it.
        We opened recently in New Jersey a line, with some trackage
    work, called Midtown Direct, so people in the suburbs can get
    from some of the suburbs directly into New York without having
    to change trains. The response is overwhelming. It gets so
    crowded that the conductor is having a tough time getting
    through and collecting all of the tickets that he has to. Real
    estate values, I am told, have gone up all along the corridor
    because of the convenience of being able to get to the City. We
    have a huge commuting people.
        And so there are two things that come out of this
    discussion we are having, Mr. Chairman. And that is when I hear
    what the plans are, I may have to change my mind about
    something I earlier said and stay here and nurse Amtrak through
    its development and progress.
        Senator Shelby. We would love for you to stay. [Laughter.]
        Senator Lautenberg. The other thing is I wonder if we could
    ever put slot machines in some of our longer-run trains.
    [Laughter.]
        That is another revenue source.
        Senator Shelby. Thank you, Senator Lautenberg. [Laughter.]
        Governor Thompson. Senator Lautenberg, you are absolutely
    correct. There needs to be, long range, another tunnel. There
    is no question about that. And anybody that is a visionary is
    looking at that. And there needs to be an improvement on the
    Penn Station and the Farley Building. But Amtrak cannot afford
    those kind of thoughts at the present time.
        Senator Shelby. Maybe out of some other funding mechanism.
        Governor Thompson. There has to be, because all Amtrak can
    do is, to survive right now----
        Senator Shelby. Senator Lautenberg is right, though, as far
    as the redevelopment, like Union Station and so many others
    that he has alluded to.
        Governor Thompson. It is a beautiful asset.
        Senator Shelby. It is a big capital expenditure, but I
    think it is ancillary to what we are doing.
        Governor Thompson. That is true.

                         Additional committee questions

        Senator Lautenberg. Thank you, Mr. Chairman. This was a
    good hearing.
        [The following questions were not asked at the hearing, but
    were submitted to the agencies for response subsequent to the
    hearing:]

                         Questions Submitted to Amtrak

                     Questions Submitted by Senator Shelby

        Question. Since the General Accounting Office's (GAO) report was
    published in May 1998, has Amtrak restructured its route system in any
    way to respond to the operating losses on 39 of 40 routes? Do you have
    any route restructuring or closures planned?
        Answer. The fiscal year 1999-fiscal year 2002 Strategic Business
    Plan (SBP) lays out numerous initiatives that will improve the
    financial performance of Amtrak's routes. Some of the highlights are
    listed below:
      --Frequency additions and new service launches on the West Coast:
        --2nd frequency on the Cascades between Seattle and Vancouver, 5th
                and 6th frequencies on the Capitol corridor
        --5th frequency on the San Joaquins (Bakersfield-Sacramento)
        --Auto Train service on the Coast Starlight;
      --Planned new service in Oklahoma
      --Launch of high speed rail in the Northeast
      --Mail and express growth on many long-distance routes
      --Additional auto carrier capacity on Auto Train
      --New equipment procurement on select routes (Cascades, San Diegans,
            Acela Express, and North Carolina service), providing a better
            product to customers
      --Labor productivity improvements
        In addition, the market based network analysis (MBNA) that is
    currently underway will consider significant route restructuring. The
    results of the MBNA will be phased in, beginning with the fiscal year
    2000 business plan.
        Question. GAO cites that 17 of your 40 routes carry, in total, only
    about 2 million, or 10 percent of your total annual ridership. Wouldn't
    some of these routes be logical places to look for cutting back the
    railroad's cumulative operating losses?
        Answer. While GAO accurately points out that many of our routes
    have relatively low ridership, they fail to point out the differences
    between routes that make cutting back simply on the basis of low
    ridership an unwise proposition.
        Of the 18 routes that made up approximately 10 percent of our
    ridership in fiscal year 1998, 10 were state supported services
    operated in Illinois, Michigan, New York, North Carolina, Pennsylvania
    and Vermont. The remaining routes were long-distance trains that
    represent more of Amtrak's total revenue than their percentage of
    ridership may indicate.
        In addition, many of these long-distance and state supported
    services connect with other routes. Eliminating one or more of these
    routes will therefore have an adverse impact on the financial results
    of the routes that remain.
        Despite the qualifications made above, Amtrak is considering
    changes to its existing network as part of the Market Based Network
    Analysis which is currently underway. The results of this initiative
    will be incorporated into the fiscal year 2000 business plan.
        Question. Please provide the most recent route-by-route performance
    statistics for all short and long distance routes, similar to that
    found on pages 221-222 of part 5 of the House Appropriations
    Committee's fiscal year 1999 hearing record.
        Answer. See attached table.
        [GRAPHIC] [TIFF OMITTED] T12MA10.002

        [GRAPHIC] [TIFF OMITTED] T12MA10.003

        Question. Please update the Committee on Amtrak's own market-based
    route study. Is this an in-house or contracted out study? When will it
    be completed? Do you anticipate that this study will assist the Board
    in making route closure and rationalization decisions?
        Answer. Amtrak's market-based network analysis (MBNA) is managed by
    Amtrak staff, with individual projects being performed by both Amtrak
    staff and consultants. The collaboration covers both the strategic
    direction of individual tasks as well as the technical work itself.
        The prime components of the study include market research, variable
    cost model development, contribution analyses, train mix analyses,
    corridor and long distance demand modeling, physical characteristics
    studies, operational analyses and capital investment analyses.
        The Corporation plans to complete the MBNA in late summer of 1999
    such that implementation can begin in fiscal year 2000. The capital and
    operating budgets developed for the fiscal year 2000-fiscal year 2004
    Strategic Business Plan, as well as the long-term forecasts shown in
    that plan, will incorporate the results of the MBNA.
        By analyzing demand for passenger rail service across the country,
    and considering the requirements associated with potential route
    options, Amtrak can reposition the Corporation as more relevant to its
    customers, and in doing so, make it more commercially viable. In this
    way the MBNA will guide management and Board decisions to redefine the
    national network.
        Question. The Amtrak board approved a $1.4 billion capital spending
    plan for fiscal year 1999 that includes the following funding streams:
    Taxpayer Relief Act and general appropriated capital funds, state or
    leveraged funds, bank loans, reprogrammed funds and matching funds. In
    the Fiscal Year 1999 Transportation Appropriations Act, Amtrak received
    $609 million in capital grants, of which 40 percent, or $244 million is
    available for obligation in fiscal year 1999. How will this capital
    appropriation be spent? Is it true that very little to none of these
    ``capital'' funds will be spent on traditional capital expenses, such
    as equipment, tracks and track improvements, facilities and rights-of-
    way purchases?
        Answer. Of the $244 million received during fiscal year 1999, $50
    million will be used for traditional capital investments. The remaining
    appropriated funds received are being used for maintenance of equipment
    expenses. When the remaining funding for fiscal year 1999 is received
    in fiscal year 2000, it will be used to repay TRA loans and
    subsequently used for traditional capital purposes.
        Question. Will any of these capital funds be used for excess
    railroad retirement payments?
        Answer. The fiscal year 1999 capital appropriation will be used for
    traditional capital projects and maintenance of equipment expenses. The
    portion of railroad retirement costs associated with Amtrak labor costs
    incurred in maintenance of equipment functions would be included in the
    maintenance of equipment costs covered with federal support.
        Question. Why are these funds even called ``capital grants?'' It
    doesn't appear that much, if any, of the appropriated funds are being
    used for capital purposes. Would it make more sense to simply
    appropriate funds under the heading ``Grants to the National Railroad
    Passenger Corporation,'' and not attempt to delineate which funds are
    for capital costs, which are for maintenance costs, and which are for
    operating costs?
        Answer. Amtrak will always require federal capital support, similar
    to that received by all other modes of transportation. This suggestion
    to have a general grant provided to Amtrak without any artificial
    restrictions imposed on it makes absolute sense, and would allow Amtrak
    to behave more like a business. That is what the Amtrak Reform and
    Accountability Act calls for--a straight grant--so it would be
    consistent with the authorizer's intent for Amtrak to receive grants
    this way. Congress and the Amtrak Reform Council would still be able to
    measure Amtrak's dependence on federal support for operating expenses,
    through the annual audit process, so the integrity of the Congressional
    directive to achieve operational self-sufficiency would remain intact.
        Question. The Federal Railroad Administration has sent up a request
    for $570,976,000 for fiscal year 2000, and the Amtrak legislative grant
    request is for a total of $571,000,000. What accounts for the $24,000
    difference?
        Answer. Amtrak's strategic business plan is based on $571,000,000
    for fiscal year 2000. Amtrak considers the difference of $24,000 as
    immaterial, and would suggest the committee direct the question to the
    Federal Railroad Administration.
        Question. If the Federal Transit Administration's expanded capital
    definition were applied to Amtrak capital, what is the maximum amount
    of the $571,000,000 in the fiscal year 2000 request that could be used
    for: maintenance of equipment, maintenance of facilities, and
    maintenance of way? (Please break out your response by category.)
        Answer. Amtrak's current business plan forecasts that maintenance
    expenses will total $481 million in fiscal year 2000--$308 million for
    maintenance of equipment and $177 million for maintenance of way and
    facilities.
        The use of federal funds for this purpose, however, is limited by
    the cash flow requirement of the corporation. In fiscal year 2000, $362
    million will be required for maintenance purposes--$184 million of
    which will be paid from the cash received for the fiscal year 1999
    federal appropriation and $178 million for the fiscal year 2000 federal
    appropriation.
        Question. The Amtrak capital business plan includes only about $32
    million total this year for corridor development. There is no other
    federal source for capital rail improvement grants. Who do you expect
    to pay for the capital improvements to support high-speed rail
    corridors? Besides Amtrak, what are the other possible funding sources?
        Answer. Amtrak's fiscal year 1999 capital program includes $144
    million of corridor development investment and leverages another $243
    million in state and private investment.
        All the high-speed rail programs developed thus far assume a
    combination of local, State, and Federal funding to progress upgrades
    of these corridors. As reflected in the recent National Governors
    Association rail policy, these states believe that they should have the
    flexibility to apply federal surface transportation dollars to high-
    speed rail development work. In addition, there is growing support for
    a dedicated funding source that can be used to invest in high-speed
    rail improvements, similar to the funding that can be used today to
    build and support highways, airports, transit and maritime systems. In
    California, voters will decide whether to increase the state sales or
    fuel taxes to support a substantial portion of the proposed high-speed
    rail system. However, some level of federal capital support still would
    be required.
        Question. What incentive would freight railroads have to invest in
    these kinds of infrastructure improvements themselves? Do they directly
    benefit from higher-speed passenger service?
        Answer. High-speed rail can be a win-win opportunity. Upgrade of
    trackage to permit high-speed operations requires updated signal
    systems, improved trackage, increased track capacity, grade crossing
    and other safety upgrades. Freight railroads can benefit significantly
    from these improvements, which can enable them to move freight more
    quickly, reliably and safely. The most important issue for freight
    railroads will be to ensure that increased passenger service does not
    adversely impact their ability to move freight. As a result, it is
    essential that high-speed rail corridor initiatives adequately take
    into account capacity issues by designing the railroad to permit long-
    term freight and passenger traffic growth.
        Question. I am concerned that spending any federal funds on high-
    speed rail infrastructure improvements on rail that is owned by the
    freights is tantamount to subsidizing private, for-profit companies. Is
    this a valid concern?
        Answer. The cost up upgrading existing, albeit privately owned,
    rail lines in our most densely congested transportation corridors will
    be a tiny fraction of the cost of highway and airport expansion. Many
    of these rail lines connect downtown business centers, and are right-
    of-ways that could never be reassembled today. Hence, investment in
    these rail lines can save the federal government immense funding. If a
    publicly owned alternative were pursued, adequate safeguards can be
    included to protect the federal government's investment in high-speed
    rail corridors.
        Question. What mechanisms are in place to prevent gold plating, or
    the unfair distribution of allocated capital improvement costs on
    freight lines that would be upgraded for high-speed passenger service?
        Answer. In order to develop high-speed corridors on tracks not
    owned by Amtrak, there will have partnerships where all stake-holders
    benefit. This means the improvements to infrastructure necessary for
    higher speeds or increased capacity need to benefit the passenger
    service as well as the host railroad if the service is going to be
    successful. Amtrak is committed to approaching partnerships with
    freights in this way, while also ensuring that state and federal money
    is spent in a manner most optimal for all involved. Furthermore,
    Amtrak, the states, and the Federal Railroad Administration will rely
    on a detailed capacity analysis to ensure that the appropriate upgrades
    are made. The fiscal realities ensure that these safeguards are
    inherently in place.
        Question. Please update the Committee on all proposed regional
    high-speed rail corridors of which Amtrak is aware. Please provide
    detailed information on each proposed corridor, including: (1) total
    projected cost for each corridor, as well as anticipated timeframe; (2)
    the amount of capital funding committed by Amtrak, the affected States,
    the freight railroads and other interested parties; (3) the level of
    current services and what service improvements the high-speed corridor
    will bring about; (4) each project's primary proponent, as well as
    other parties in the coalition of forces; and (5) current ridership
    figures, and estimated ridership growth.
        Answer. The General Accounting Office recently issued a report on
    high-speed rail that included, as an appendix, an excellent summary of
    other corridors under planning and development around the country,
    which addresses all the issues raised in the question. Amtrak has
    attached a copy of this report.
        Question. Amtrak was directed by the appropriations conferees to
    work closely with Northeast Corridor communities, state transit
    officials, and owners of the track to identify danger spots and install
    perimeter fencing along the corridor, wherever it is needed, and in
    particular, focus on increased community coordination in communities
    where problems or concerns have been expressed. Please update the
    Committee on Amtrak's efforts to comply with this directive.
        Answer. The Final Environmental Impact Statement (FEIS), Section
    5.1-1, directs Amtrak to repair, replace or install fencing at 29
    locations between New Haven and Boston. The Federal Railroad
    Administration identified areas with ``worn, well-established paths, as
    well as along school yards, playgrounds and other recreational areas.''
    Section 5.1-1 also states that ``Amtrak will on a regular basis consult
    with local authorities to identify any new areas where significant
    levels of trespassing are occurring, and measures that might lessen
    trespassing.'' (Note: the Record of Decision (ROD) subsequently revised
    the list from the FEIS, increasing the fencing required at certain
    locations and reducing it at others.)
        In response, over the past three years, Amtrak has been meeting
    with communities along the Northeast Corridor, public officials, and
    police departments to identify areas where additional fencing would be
    appropriate. With few exceptions, every request that has been made has
    been investigated and approved for additional fencing.
        The fencing mandated in the ROD is currently being installed. The
    additional fencing will be installed once installation of the ROD
    fencing is complete.
        Question. Please provide historical data from fiscal years 1989
    through 1998 on trespasser and crossing fatalities on the Northeast
    Corridor.
        Answer. The following table consists of Class E Trespasser
    fatalities that occurred in the states of: DE, PA, MD, DC, RI, NY, ME,
    VT, NH, CT, NJ and MA.

    ----------------------------------------------------------------------------------------------------------------
                                                                                        Fiscal year
                                                                     -----------------------------------------------
                                                                      1991  1992  1993  1994  1995  1996  1997  1998
    ----------------------------------------------------------------------------------------------------------------
    Total...........................................................    17    11     8    13    13    12     9    18
    Crossings.......................................................  ....  ....  ....     2     1  ....  ....  ....

    ----------------------------------------------------------------------------------------------------------------
    Note: These figures do not include Commuters. Total includes Grade Crossing Accidents.

        Question. Please describe the efforts Amtrak is making to educate
    the public concerning north end catenary electrification.
        Answer. Amtrak has been an active participant in Operation
    Lifesaver, a public-private effort to present safety information in
    schools, to bus and trucking company representatives, and to community
    groups on the dangers of trespassing on or near the railroad tracks.
    During the past year, Amtrak's presentations have been updated to
    stress the dangers associated with electrification of the catenary
    system.
        In addition, in early March, Amtrak held informational meetings
    with public safety authorities between New Haven and Boston.
    Information was provided on Amtrak's progress to date on installation
    of the catenary system, as well as on the energization and testing that
    will take place in the coming months.
        Amtrak has also contracted with a private organization, Operation
    Respond, that will provide intensive training in each of the
    municipalities impacted by electrification. The training is currently
    underway and will be made available to each town prior to the
    implementation of high-speed rail service.
        Question. Amtrak is the lead contractor for construction of the
    ``third track'' freight rail line paralleling the Northeast Corridor
    between Quonset Point/Davisville and Central Falls, Rhode Island. What
    are the inherent challenges in building a new freight rail line mere
    feet from an electrified high-speed line that is in regular use? What
    is the construction schedule for the third track project? How does this
    construction schedule interrelate with the schedule for completion of
    high-speed rail electrification, other capital improvements on the
    north end, and the schedule for testing the rail, electrification
    system, other infrastructure, and trainsets?
        Answer. The primary inherent challenges in building a new freight
    rail line near the high-speed line are (1) ensuring everyone's safety
    when working, and (2) ensuring that the work on this project has a
    minimal impact on high-speed rail service, while also meeting the
    project schedule.
        The completion date for the third track, as determined by the Rhode
    Island Department of Transportation (RIDOT), is the last quarter of
    2001. This is an extremely aggressive timetable, which Amtrak is in the
    process of reviewing. It will have no impact on the high-speed rail
    schedule, but if any conflicts do arise, the third track work will be
    secondary to completion of electrification.
        The only other capital project with which the third track project
    interrelates is the Warwick Train Station at T.F. Green Airport. Rhode
    Island has indicated that both projects are a priority, and the
    location of the Station will have an impact on the geometry of the
    third track. RIDOT is currently exploring its options and the impacts
    of these options on both projects.
        Question. Please describe the need for Amtrak's requirement that
    all trains operating on Northeast Corridor property be controlled by
    the advanced civil speed enforcement system (ACSES)?
        Answer. The ACSES requirement was promulgated by the Federal
    Railroad Administration as a waiver condition for operating above 110
    mph. In general, it provides for speed control around curves (civil
    speed control) and positive stop as a more direct control over train
    movements. The system includes wayside locomotive controls and is being
    installed between New Haven and Boston, as well as in several sections
    between New York and Wilmington. All locomotives operating between New
    Haven and Boston will require the ACSES capability. Only Amtrak
    equipment will be equipped south of New York, since interlockings
    provide effective control over train interference.
        Question. When will the requirement that all trains operating on
    Northeast Corridor property be controlled by the ACSES go into effect?
    How many Amtrak locomotives are affected by this requirement? How many
    of these locomotives currently have ACSES installed?
        Answer. Coinciding with the initiation of high-speed rail service,
    anticipated in late 1999, ACSES will be required on every locomotive
    operating on the north-end of the Northeast Corridor. Because of
    flanking protection on the south-end of the corridor, locomotives
    operating south of New Haven, CT are not required to have ACSES by the
    same deadline.
        Eventually, ACSES will affect every locomotive running where high-
    speed rail operates, that is, on electrified track from Boston to
    Washington. A total of 161 Amtrak locomotives will be affected by the
    ACSES requirements. The specific classes of locomotives to be outfitted
    with ACSES by the October 1, 1999 deadline are as follows:
      --52 AEM7 electric locomotives
      --24 F40 diesel locomotives
      --30 road switchers
      --15 high-horsepower electric locomotives (HHP)
      --40 High Speed Rail locomotives
        To date, two locomotives, one electric and one diesel have ACSES
    hardware installed and are working prototypes.
        Question. What other railroads are affected by the ACSES
    requirement? What is the per unit cost of installing the hardware? Are
    there any additional operating costs associated with ACSES?
        Answer. The following commuter railroads will be affected by ACSES
    requirements:
      --Massachusetts Bay Transit Authority (MBTA)
      --Connecticut Department of Transportation's Shoreliner East
      --NJ TRANSIT
        The following commuter railroads operate on the south-end of the
    corridor, and will not be immediately impacted by the ACSES
    requirement, but will be affected in the future:
      --Southeastern Pennsylvania Transportation Authority (SEPTA)
      --Maryland Rail Commuter (MARC)
      --Virginia Rail Express (VRE)
        The following freight railroads will be affected:
      --CSX
      --Norfolk-Southern
      --Providence and Worcester
        The average per unit cost of installing the hardware is $50,000.
    This figure includes labor and materials.
        Daily inspection of the ACSES system is a recurring task that will
    be incorporated into daily operational procedures. Costs can be
    expressed in terms of man-hours. It is expected that system testing
    will require 0.1 man-hours each day. Repairs to the ACSES system will
    result in variable, non-recurring costs.
        Question. What is the timetable for the delivery of Amtrak's 20 new
    high-speed rail trainsets and 15 new electric locomotives? What is the
    payment schedule for this major procurement?
        Answer. Amtrak expects delivery of the first two trainsets in
    December 1999 and the 20th trainset in August 2000. New ACELA Express
    service will be phased in as the new trainsets arrive. With delivery of
    the final trainset in August, Amtrak will convert its interim trainset
    financing to long-term permanent financing.
        Question. Please outline the construction schedule and related
    costs for the three high-speed maintenance facilities. Please describe
    the cost-sharing arrangements for the construction and operation of
    these maintenance facilities with Bombardier.
        Answer. The high-speed trainset facilities have progressed
    extremely well and are ahead of schedule. The Ivy City (Washington)
    maintenance and S&I (service & inspection) building, and the
    Southampton Yard (Boston) S&I facility will be turned over to Amtrak in
    May 1999. The Sunnyside Yard (New York) facility will be turned over to
    Amtrak in September 1999. The three facilities cost as follows: Ivy
    City B $51 million; Sunnyside B $34 million; Southampton B $28 million.
    The facilities will be staffed by Amtrak workers managed by the
    consortium for at least the first 10 years after acceptance of the 20th
    trainset. Maintenance is projected to cost approximately $42 million,
    per year. The consortium is subject to strict performance penalties
    regarding daily performance and cleanliness of the trains.
        Question. Please describe the contractual penalty clauses that
    Bombardier is subject to regarding trainset delivery and maintenance.
        Answer. Under the contract with the consortium, liquidated damages
    are imposed for late delivery of the trains to Amtrak resulting from
    delays caused by the contractor. These penalties are as follows:
            Days                                                     Per day

    0-30..........................................................    $1,000
    30-60.........................................................     2,000
    60-90.........................................................     4,500
    90+...........................................................     6,000

        The consortium is also responsible for managing the trainset
    maintenance and is subject to strict performance penalties. These
    include:
      --$10,000 per trainset that is not timely provided to Amtrak for
            service
      --$5,000 per trainset that fails to achieve scheduled trip time due
            to a mechanical failure
      --$1,000 per failure of any system on board a train, e.g., toilet,
            AC, intercom, etc.
        Question. What will the new top speeds be when the American Flyer
    trainsets go into service?
        Answer. The trainsets will be able to operate at up to 150 mph in
    revenue service. The top speed of the trainsets is 165 mph.
        Question. Please describe the testing components of the Northeast
    Corridor high-speed project. Include timetables and benchmarks for:
    testing on trainsets at the Transportation Technology Center in Pueblo,
    Colorado and on the Northeast Corridor, testing of the corridor's
    electrification system; and testing of other corridor infrastructure.
        Answer. The trainsets, electrification, and track must be tested
    and approved for operation at the planned speeds (up to 150 mph).
        Trainsets.--Trainset testing will take place at both Pueblo and the
    Northeast Corridor. Pueblo testing is underway and will extend through
    September 1999. The testing includes operation of all onboard systems,
    diagnostics, contract specifications (acceleration, deceleration,
    braking, etc.), and FRA safety and Tier II equipment tests and
    qualifications. Basic safety testing is performed first. Once the
    trainset has met these requirements, the second trainset can be tested
    on the Northeast Corridor. These tests will include contract
    compliance, safety and qualification testing, as well as specific
    passenger amenities and systems. This testing is scheduled to be
    completed by the end of October 1999.
        Electrification.--The electrification system must be tested and
    commissioned prior to acceptance by Amtrak. Testing of the electric
    supply system (electrical facilities) is currently underway; system-
    wide testing begins in July and will extend through the Fall. This
    testing will ensure accurate positioning of electric wires, compliance
    with the National Electrical Safety Code, power supply, and impact on
    the electric utilities providing the power.
        Infrastructure.--Amtrak will operate its equipment at up to 150
    mph, the first Class 8 track speeds in this country. The track must be
    maintained to this track Class and this will be reviewed by the FRA. In
    addition, FRA has detailed specific testing required to use the new
    ACSES system.
         Amtrak and the FRA closely monitor the testing and approval
    process and maintain a monthly CPM schedule of all FRA-Amtrak
    interfaces. This helps ensure that testing is progressed in a timely
    manner and nothing is missed along the way.
        Question. How much in profit does Amtrak expect the northeast
    corridor high-speed rail operations will reap? Is this an annual
    profit? When does the railroad anticipate that this annual profit level
    will be realized? What will the annual profits be leading up to this
    point?
        Answer. High-speed rail operations will be introduced and
    transitioned into service in the Northeast Corridor in late calendar
    year 1999 which marks the end of the first quarter of fiscal year 2000.
    This transition will continue through fiscal year 2000 with scheduled
    delivery of full high-speed rail service to be completed by the end of
    the fiscal year, which ends September 30, 2000. After this transition,
    fiscal year 2001 will be the first full year inclusive of high-speed
    rail service as part of the Corridor's total product offering. Budget
    result improvement in fiscal year 2001 is projected to be $150 million.
    During fiscal year 2002, the Corridor's budget result is projected to
    improve by $180 million.
        Question. The independent assessment of Amtrak's financial status
    has found Amtrak's estimates of the Northeast Corridor's high-speed
    rail profits to be overly optimistic. What is the actual discrepancy
    between the independent assessment's conclusions and Amtrak's figures?
    What do you think is the basis of this discrepancy?
        Answer. The DOT-IG's risk analysis forecasted a 6 percent variance
    in high-speed passenger related revenue. Amtrak disagrees with the
    demand modeling methodology used in the assessment and questions some
    of the key assumptions and conclusions such as the:
      --Inclusion of 12 months of expenses and 3 months of revenue;
      --Inclusion of only 18 of the 20 high-speed trainsets;
      --Conclusion that no new high-speed passengers will be diverted from
            auto for trips of less than 75 miles;
      --Conclusion that ridership growth will be largely diverted to
            conventional rail rather than high-speed rail due to the
            reduced travel times for conventional rail; and
      --Neglect to take into consideration available pricing and yield
            management options.
        Actual experience tells us otherwise:
      --The highest priced fares, for Club service, often filled with
            shorter-distance riders and sold out, suggest that increased
            comfort and shorter trip times are in demand;
      --The current trip time differential between Metroliner and
            conventional service on the south-end is 30 minutes. The advent
            of high-speed rail will increase the trip time differential to
            40-45 minutes, increasing the demand for the faster high-speed
            service rather than diverting the demand to conventional
            service;
      --Similarly on the north-end, the travel time differential between
            high-speed and conventional service will be 40-60 minutes,
            further creating an increased demand for high-speed service
            (even if the travel time differential was reduced to the same
            30 minute differential that currently exists on the south-end,
            the strength of current Metroliner revenue performance and
            ridership growth indicates that there would be significant
            diversion to high-speed service);
      --There will be more high-speed service options than conventional
            rail options offered on the north-end, attracting more
            ridership to high-speed trains due to service frequency
            benefits; and
      --In markets of 75 miles or less there is no air competition. Given
            the population densities along the Northeast Corridor, there
            are numerous city pairs that are less than 75 miles that
            currently contribute to significant Metroliner revenue
            (Trenton-NY, Metro Park-NY, BWI-DC, Wilmington-Baltimore,
            etc.).
        The assessment methodology also excludes the valuation of the
    positive financial impact of marketing campaigns, class of service
    offerings, new trainsets, service standards program, station
    improvement programs and reservation and fare collection re-
    engineering. Amtrak believes that the assessment has underestimated
    high-speed revenues.
        Question. Last month, the GAO's Office of Special Investigations
    published a letter to me regarding an allegation that they had received
    through GAO's FraudNET concerning a consulting contract that had been
    improperly awarded. GAO found that the contract, the arrangements of
    which violated numerous Amtrak procurement requirements, cause the
    unnecessary expenditure of $1.3 million by Amtrak. The same GAO letter
    stated that, according to Amtrak's own Inspector General, 95 percent of
    Amtrak's consulting contracts reviewed by the IG did not have proper
    approval authority or written justification, and 90 percent were not
    properly approved. How has the railroad responded to these findings of
    contracting improprieties, and general failure to follow Amtrak's
    procurement policies and rules?
        Answer. Last year, as the result of an independent review of
    Amtrak's purchasing processes by Price Waterhouse, a new Vice President
    level position on Amtrak's Management Committee for Procurement and
    Administration was created. This senior level manager will oversee
    centralizing all Amtrak procurements, manage Amtrak inventories, and
    ensure a more independent and effective purchasing control environment.
    In addition, a task team with representatives from Amtrak's Finance and
    Law Departments has been working with Amtrak's Inspector General to
    rewrite Amtrak's consultant hiring and approval policies to facilitate
    compliance and accountability.
        Until a new policy is put in place and the Vice President for
    Procurement and Administration begins functioning, senior Amtrak
    management has tightened its focus on ensuring that existing policies
    are strictly enforced.
        Question. How much will contracting out food services to Dobbs
    International Services save the Corporation (announced week of January
    18)? Please provide a detailed cost comparison. What happens to the 13
    commissaries and 350 Amtrak food service employees?
        Answer. The requested information follows:

                            [In millions of dollars]

            Financial Terms                                   Annual Savings

    Food & Beverage Savings (Based on estimated 7.25 percent savings
        of fiscal year 1998 purchases of $35 million).................   2.5
    Labor Savings (Based on estimated labor costs of $19.3 million for
        fiscal year 1999).............................................   5.2
                                                                      ______
          Total Savings...............................................   7.7
                            =================================================================
                            ________________________________________________
    Management Fee....................................................  -2.5
                                                                      ______
          NET SAVINGS.................................................   5.2

        The projected savings over the seven-year contract period is
    approximately $35 million. Severance agreement costs, including both
    labor and management are anticipated to range from $6.845 million (50
    percent acceptance) to $13.54 million (100 percent acceptance). The
    project is estimated to result in a net savings ranging from $21.5
    million to $28.1 million over the length of the contract.
        The eleven commissaries where Amtrak previously operated (in
    Albany, Boston, Chicago, Los Angeles, Miami, New Orleans, Oakland, New
    York, Sanford, Florida, Seattle and Washington, DC) will be turned over
    to Dobbs by April 10, 1999.
        It is anticipated that approximately 300 Amtrak positions
    (management and agreement combined) will be eliminated. Amtrak has
    developed a comprehensive severance package for both management and
    agreement employees.
        Management employees affected may apply for other management
    positions within Amtrak, including 14 new management positions
    associated with food and beverage business administration; they may
    exercise seniority back into an agreement position if they were
    previously employed as an agreement employee; or, they can accept a
    severance package based on years of service.
        Those who do not elect a severance package will be transferred to
    other positions.
        Question. Please provide a table showing the actual versus budgeted
    revenues for fiscal years 1997, 1998, and anticipated for 1999,
    including all revenue sources broken out by type.
        Answer. The following schedules show the breakout of actual versus
    budgeted revenue by line of business:

                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                                  Fiscal year
                                                          ----------------------------------------------------------
                       Line of business                          1997              1998                 1999
                                                          ----------------------------------------------------------
                                                            Actual   Budget   Actual   Budget  Forecast \1\   Budget
    ----------------------------------------------------------------------------------------------------------------
    Core.................................................    1,226    1,230    1,294    1,331        1,417     1,438
    Commuter.............................................      242      244      260      267          254       255
    Reimbursable.........................................       91       90       91       90           96       106
    Commercial...........................................      115       52       63       69           61        51
                                                          ----------------------------------------------------------
          Total..........................................    1,674    1,615    1,708    1,757        1,827     1,850
    ----------------------------------------------------------------------------------------------------------------
    \1\ Forecast as of 1st quarter fiscal year 1999 actural.

    Note: Revenues exclude Federal payments received related to grants and the Taxpayer Relief Act.

        Question. Please provide a breakout of the fiscal year 1997, 1998,
    and anticipated for 1999 commuter service revenues by route location.
        Answer. The following schedule shows the breakout of commuter
    service revenues by SBU by commuter agency:

                            [In millions of dollars]
    ------------------------------------------------------------------------
                                                          Fiscal year
                                                  --------------------------
                                                     1997     1998     1999
                                                    Actual   Actual   Budget
    ------------------------------------------------------------------------
    Mass. Bay Transportation Authority (MBTA)....      141      154      165
    Connecticut Dept. of Transportation (CDOT)...        6        5        6
    Maryland Dept. of Transportation (MARC)......       17       18       20
    Virginia Railway Express (VRE)...............        9        8       10
                                                  --------------------------
          Total NEC Commuter.....................      174      186      200
    Florida Fun Train............................  .......        4  .......
                                                  --------------------------
          Total NEC Commuter.....................  .......        4  .......
    Metrolink Commuter Rail Svc..................       27       27       15
    Penninsula Commute Service...................       34       37       33
    Coaster Commuter Service.....................        7        7        7
                                                  --------------------------
          Total West Commuter Service............       68       71       55
                                                  ==========================
          Total Commuter Revenue.................      242      260      255
    ------------------------------------------------------------------------

        Question. Please list the Corporation's rent and retail locations,
    amount of space, and associated income in fiscal years 1997, 1998, and
    projected for fiscal year 1999.
        Answer. The requested information follows:

                              AMTRAK NORTHEAST CORRIDOR--COMMERCIAL DEVELOPMENT DEPARTMENT
                                                [In thousands of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                                        Fiscal year
                                                                     -----------------------------------------------
                            Revenue category                                                           1999 Forecast
                                                                        1997 Actual     1998 Actual         \1\
    ----------------------------------------------------------------------------------------------------------------
    Real Estate.....................................................     \2\ 2,845.4     \3\ 2,176.6         1,200.0
    Retail..........................................................     \4\ 7,555.5     \4\ 7,763.1     \4\ 7,500.0
    Telephones......................................................           538.1           625.4           485.0
    Pipe & Wire.....................................................         3,212.6         3,177.0         2,000.0
    Parking.........................................................         3,553.5         4,077.7         3,700.0
    Advertising.....................................................         2,646.1         3,153.2         3,100.0
    Telecommunications..............................................    \5\ 59,137.5    \6\ 27,675.2    \7\ 17,400.0
    Other...........................................................    \8\ 22,663.0           702.2    \9\ 15,750.0
                                                                     -----------------------------------------------
          Total.....................................................       102,151.7        49,350.4        51,135.0
    ----------------------------------------------------------------------------------------------------------------
    \1\ Actuals through February and forecast March through September.
    \2\ Includes: $1,711.5 one-time revenue events (i.e. property sales, audit findings).
    \3\ Includes: $951.4 one-time revenue events (i.e. property sales, audit findings) plus $80.0.
    \4\ Includes: All Amtrak owned NEC Stations.
    \5\ Includes: $3,000 Omnipoint and $45,000 Qwest.
    \6\ Includes: $6,000 flagging protection and $5,187.6 one-time payments.
    \7\ Includes: $1,800 flagging protection.
    \8\ Includes: $10,324 NJT EEC, $11,086.3 Providence Land Sale and $1,100.0 Pepsi Spon.
    \9\ Includes: $14,100.0 Providence Sale, $1,300.0 MA Condemnation, $350.0 32nd Street.

        Question. Please list existing or incipient partnerships with other
    carriers for express freight. That income was derived from express
    freight services in fiscal year 1998? With the summer 1998 STB decision
    authorizing Amtrak's express freight services, how will that income
    level increase in fiscal year 1999? What income levels does Amtrak's
    strategic business plan count on from express freight in fiscal years
    2000, 2001, and 2002?
        Answer. Amtrak has partnership agreements on express with
    Burlington Northern Santa Fe and Norfolk Southern, and is close to an
    agreement with Illinois Central. In addition, Amtrak has agreements
    with several short line railroads including Minnesota Commercial, Grand
    Rapids Eastern, San Diego and Imperial Valley, Dallas Garland and
    Northeastern, and is close to agreement with several others. Amtrak
    also has agreements to move traffic for various trucking carriers
    including UPS, Swift, and Roadway Express.
        Total mail and express revenues for fiscal year 1998 were $83
    million--an increase of 19 percent from $70 million in fiscal year
    1997. Revenues from the mail business alone have been increasing
    steadily at a rate of 10 percent a year. The Amtrak Periodical network
    currently reaches 60 out of 96 US Postal Service Distribution Centers.
    Amtrak projects that this aspect of mail revenue and profit along will
    increase 60 percent by 2002. Amtrak has long recognized that the market
    for ``goods handling'' in the U.S. is vast, representing an over $247
    billion national industry. The bulk of the business is in ground
    transportation via trucking. Only $32 billion is transported by rail
    freight.

                            [In millions of dollars]
    ------------------------------------------------------------------------
                                                      Fiscal year
                                         -----------------------------------
                                            1999     2000     2001     2002
    ------------------------------------------------------------------------
    Mail................................     78.3     91.8    116.2    119.8
    Express.............................     26.5     53.7     73.3     94.8
    ------------------------------------------------------------------------

        Mail is targeted for significant growth during the plan period,
    based on improved market share in the handling of periodicals. Amtrak
    plans to target its service offerings to include direct service from
    major periodical mailing points to all postal distribution centers in
    the lower 48 states. Where service is not available, the APN is planned
    to provide connecting truck service with complete systems and continued
    fleet expansion will enable the United States Postal Service to ship
    more periodicals via Amtrak. Amtrak plans to continue to pursue
    increased business opportunities with the Postal Service.
        The carload express business, including RoadRailer express
    business, is expected to continue on its current revenue growth track
    through the forecast period. With express cars, market development is
    focused on the long-haul east-west lanes such as Los Angeles-
    Philadelphia and Albany-Oakland. These lanes yield the highest gross
    revenues and net contribution. RoadRailer is effective primarily in the
    medium-distance corridors such as St.Paul-Albany and Philadelphia-
    Jacksonville. All long distance trains are expected to begin carrying
    express at some time during the plan period and many short-haul trains,
    such as Grand Rapids-Chicago, will act as feeders to the long-haul
    network. As trains fill up, revenue growth will come from yield
    management. Key to the continued growth of express net contribution is
    continued fleet growth, particularly the effective development of
    refrigerated cars and trailer, which offer the highest yields, and
    continued expansion of terminal locations and capacities.
        Question. Please describe the cost-sharing partnerships that Amtrak
    has developed with states for both capital and operating support for
    Amtrak service, including what states participate and at what level.
        Answer. A detailed breakdown is provided in response to the
    following question.
        Question. For fiscal years 1997, 1998, and anticipated through
    1999, please breakout the level of state support by State, with totals
    for each year.
        Answer. The requested information follows:

                                                 SUPPORT FOR OPERATIONS
    ----------------------------------------------------------------------------------------------------------------
                                                                                        Fiscal year
                                 States                              -----------------------------------------------
                                                                           1997            1998          1999 \1\
    ----------------------------------------------------------------------------------------------------------------
    Alabama.........................................................  ..............  ..............      $1,425,502
    California......................................................     $41,349,600     $47,162,454      54,642,000
    Illinois........................................................       6,938,145       8,162,541       8,787,504
    Michigan........................................................       2,096,250       2,296,250       2,096,244
    Missouri........................................................       3,686,432       3,937,875       4,716,000
    New York........................................................         960,000         967,500         960,000
    North Carolina..................................................       4,996,363       5,756,005       6,145,830
    Oregon..........................................................       1,246,506       2,000,000       1,545,000
    Pennsylvania....................................................       1,994,758       2,146,664       2,600,000
    Vermont.........................................................         630,948         631,200         629,000
    Washington......................................................       3,543,853       5,122,297       8,926,000
    Wisconsin.......................................................       2,650,948       4,429,151       3,487,500
                                                                     -----------------------------------------------
          TOTAL.....................................................      70,093,803      82,611,937      95,960,580
    ----------------------------------------------------------------------------------------------------------------
    \1\ Anticipated 1999 State Contribution.

                              Capital improvements

                            [In millions of dollars]

    1997 Projects:
        Michigan Mercury Project--FRA High Speed Positive Train
          Control Grant with MDOT Track Infrastructure Improvements... 7.448
        Reconstruction of Fuel House--1600 Lumber Street, Chicago, IL. 1.5
        NPCU Conversion of Five F-40 Locomotives...................... 0.450
        Grade Crossing Improvement--DET-CHI Corridor.................. 0.441
        Pen Station Redevelopment--NY Penn and Service Building.......17.0
        Joint Benefits Projects....................................... 5.2
        NJT Joint Benefits Projects...................................25.0
        NJT Capital Projects.......................................... 3.0
        Delaware Shops--Modernize Locomotive Overhaul Facilities...... 1.0
        Siding Construction Project, Encinitas, CA.................... 2.6
        Design of King Street Station, Seattle, WA....................16.1
        King Street Coach Yard--Maintenance Facility, Seattle, WA.....50.0
    1998 Projects:
        HLI Chicago................................................... 0.443
        NJT Joint Benefits Projects...................................25.0
        VRE Joint Benefit Projects--Washington........................ 1.0
        NJT Reimbursable Projects..................................... 3.0
        MARC Joint Benefits Projects.................................. 3.0
        DelDot Joint Benefits Projects--Station....................... 0.719
        Oakland Maintenance Facility..................................30.0
        Pacific Northwest Infrastructure Program...................... 6.6
        King Street Station Intermodal Project........................16.25
        Salem, OR Multimodal Facility................................. 3.7
        Los Angeles Service and Inspection Facility................... 5.0
        Centralia, WA Platform........................................ 3.73
        King Street Coach Yard Maintenance Facility................... 9.145
    1999 Projects:
        DelDot Joint Benefit Projects................................. 0.719
        MARC Joint Benefit Projects................................... 3.0
        New York State Agreement......................................18.0
        Michigan Crossties & Resurfacing.............................. 3.042
        Southeast Corridor Equipment.................................. 5.5
        West Detroit, MI & Porter, IN................................. 0.5
        Battle Creek, MI Station Track................................ 0.5
        Chicago Lake Street Interlocking..............................10.0
        Harrisburg Line Improvements.................................. 1.0
        Wilmington Station............................................ 1.90
        Union Station, Washington, DC................................. 3.2
        Pacific Northwest Infrastructure Program...................... 5.4
        King Street Coach Yard Maintenance Facility...................12.255
        King Street Station Intermodal Project........................16.25
        DET-CHI Corridor High Speed Program........................... 0.247
        High Speed Rail--North........................................ 8.0
        Operational Reliability--New..................................28.0
        Commercial Development, and Lanvale Park......................13.5
        Amtrak & Metrolink TVM's...................................... 1.939
        Marysville Bypass............................................. 5.295
        San Joaquin Corridor Infrastructure...........................29.6
        Lomas Santa Fe Double Track...................................15.883
        Sacramento, CA Station Renovation.............................36.58
        Salinas Station Improvement................................... 2.979
        San Diego Station Improvement................................. 0.4
        Albany, OR Multimodal Station.................................11.0
        Eugene, OR Multimodal Station................................. 3.6
        Everett, WA Intermodal Project................................40.43
        Tukwila, WA Station...........................................24.2

        Question. This Committee has supported giving state departments of
    transportation the flexibility to use highway funds for Amtrak. To what
    extent can this now be done (e.g., CMAQ funds)? What states, if any,
    utilize the current flexibility? Are other states, to your knowledge,
    planning to utilize the current level of flexibility?
        Answer. Amtrak has been very grateful to this Committee for its
    support on this issue but, unfortunately, there is no flexibility in
    current law. States are prohibited from opting to spend any federal
    transportation dollars on rail service. Many states, however, have
    sought exemptions on this matter, though it requires a specific waiver
    by the Secretary of Transportation. Oregon is the only state that has
    ever been granted such a waiver. The State of Vermont secured a
    ``demo'' provision in the fiscal year 1999 Omnibus Appropriations bill
    which allowed them the same type of flexibility. However, no other
    state can use TEA-21 funds, other than enhancement funds, on intercity
    passenger rail.
        Question. If state DOTs had complete flexibility to use either
    highway or transit funds to support Amtrak capitalization and
    operations, which states would participate?
        Answer. 34 states currently contribute to Amtrak services in their
    states, even without the flexibility to spend their federal
    transportation dollars on rail service. Amtrak could assume that the
    same states might take advantage of the flexibility provision if
    enacted. Governors have stated their support for complete flexibility,
    as evidenced by the national Governor's Association (NGA) rail policy,
    which was adopted unanimously in February. We are also aware that New
    York State and North Carolina have CMAQ as the primary source of
    funding for their rail programs, and thus are working very hard for
    statutory approval of the desired flexibility.
        Question. Amtrak has worked toward securing a dedicated funding
    source in the past. Would Amtrak riders pay a ticket tax, similar to
    the gasoline tax for highway users and the passenger ticket tax for
    airline passengers, to create a dedicated funding source for Amtrak
    capitalization or operations support?
        Answer. Current rail fares are determined using a process known as
    yield management: operational costs and customer demand along specific
    routes are weighed to determine what price the market will bear. An
    additional ticket tax would be inconsistent with Amtrak's strategic
    business plan in two fundamental ways. First, it could effectively
    price Amtrak tickets out of the market, causing a significant loss in
    ridership and revenue--directly affecting the financial performance of
    the train. Secondly, a ticket tax would adversely affect Amtrak's
    efforts to reach operational self-sufficiency. Since current ticket
    prices do not sufficiently cover all of the operational costs of a
    particular route, any additional revenue gained through ticket price
    increases would be applied towards operational costs--not
    capitalization. However, it should be noted that Amtrak does pay the
    gas tax and, unlike transit and aviation, does not benefit from the tax
    in any way.
        Question. Please describe all contracts between Amtrak and freights
    wherein the Corporation makes payments on a contractual or incentive
    basis. Prepare a table that breaks out the types of payments and the
    amount paid, by freight railroad and total, for fiscal years 1996, 1997
    and 1998.
        Answer. Amtrak has contracts with all major freight carriers.
    Amtrak pays the incremental (avoidable) costs to operate over their
    rail lines plus incentives when train performance is between 80 percent
    and 100 percent on time. Amtrak assesses penalties when train
    performance is below 70 percent. No incentives are paid or penalties
    assessed for performance between 70 percent and 80 percent on time.
        Please see attached table.

                                                                                 AMTRAK'S PAYMENTS TO FREIGHT RAILROADS
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Fiscal year 1996 actual costs                    Fiscal year 1997 actual costs                     Fiscal year 1998 actual costs
                      Railroad                  ----------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Cost          Incentive          Total           Cost          Incentive          Total            Cost          Incentive          Total
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    BNSF.......................................     $12,383,384      $5,659,051      $18,042,435     $12,252,123      $9,520,213      $21,772,336     $13,791,356       $8,190,969      $21,982,325
    Canadian National..........................       1,331,138          25,184        1,356,322         937,869  ...............         937,869         961,097   ...............         961,097
    Conrail....................................       3,368,620  ...............       3,368,620       7,736,618         776,836        8,513,454       7,556,733        1,426,402        8,983,135
    CP-SOO.....................................       1,430,144       1,061,679        2,491,823       1,378,036         646,955        2,024,991       1,375,751          332,453        1,708,204
    CSX Transportation.........................       9,749,383       3,607,748       13,357,131      12,158,012       2,761,136       14,919,148      11,868,752        4,506,921       16,375,673
    Delaware & Hudson..........................         345,142         375,816          720,958         479,483         465,832          945,315         442,206          395,185          837,391
    Grand Trunk Western........................         346,519  ...............         346,519         305,141  ...............         305,141         319,244   ...............         319,244
    Illinois Central...........................       1,770,593         458,158        2,228,751       2,014,095         647,031        2,661,126       1,860,722          891,730        2,752,452
    Metra--Chicago.............................         163,225          87,827          251,052         747,122  ...............         747,122         119,500          120,185          239,685
    Metro North................................       5,977,697         186,481        6,164,178       6,245,326         626,284        6,871,610       6,407,190          738,690        7,145,880
    NCTD (2)...................................       1,154,090  ...............       1,154,090         868,208  ...............         868,208       1,310,378   ...............       1,310,378
    New England Central........................         760,521         452,696        1,213,217         700,988         380,724        1,081,712         894,587          427,415        1,322,002
    Norfolk Southern...........................       1,876,511       1,097,120        2,973,631       1,979,366       1,059,888        3,039,254       2,075,832        1,033,063        3,108,895
    Other Railroads NEC........................           5,851  ...............           5,851         451,331          22,260          473,591         441,408           23,705          465,113
    Other InterCity............................         160,684  ...............         160,684        85984.87         333,970       419,954.87         579,741          752,934        1,332,675
    SCRRA......................................       1,529,235  ...............       1,529,235       1,208,324         742,420        1,950,743       1,110,172          756,582        1,866,754
    Union Pacific..............................       3,113,740       1,011,255        4,124,995       2,847,631       1,737,099        4,584,730       1,520,514         (142,091)       1,378,423
    SP.........................................       8,965,704       1,466,492       10,432,196       8,560,114         947,925        9,508,039       9,896,878         (991,246)       8,905,632
    SPCSL Corp.................................         837,617         668,627        1,506,244      942,254.77         557,443      149,9697.77         839,093          632,969        1,472,062
    DRGW.......................................         360,891         (64,127)         296,764         350,237         (17,674)         332,563         (57,065)         (86,230)        (143,295)
    VIA--Vancouver Service.....................         271,718  ...............         271,718         346,299  ...............         346,299         315,377   ...............         315,377
                                                ----------------------------------------------------------------------------------------------------------------------------------------------------
          TOTAL................................      55,902,406      16,094,007       71,996,413      62,594,562      21,208,342       83,802,904      63,629,464       19,009,636       82,639,100
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

        Question. Please describe all contracts between Amtrak and freight
    railroads wherein freights are given access to routes over Amtrak-owned
    tracks.
        Answer. Freight service is provided over the rail lines in the
    Northeast and Michigan that Amtrak acquired in connection with
    Conrail's formation in 1976, pursuant to trackage rights that were
    granted to freight railroads at the same time. A certain number of
    these rights have subsequently been transferred to other railroads.
        The terms of these rights are set forth in various agreements
    between Amtrak and the freight railroads. The compensation Amtrak
    receives under these agreements is for the most part based upon the
    number of car miles (one freight car travelling one mile) that the
    railroads operate over Amtrak-owned lines.
        The following is a summary of the rights covered by these
    agreements:
      --Conrail has rights between New Rochelle, NY and Washington, DC;
            Philadelphia, PA and Harrisburg, PA; Kalamazoo, MI and Michigan
            City, IN; and over certain trackage in Southern Connecticut.
      --Delaware & Hudson Railway, a subsidiary of Canadian Pacific
            Railway, has rights, none of which it currently exercises,
            between Perryville, MD and Washington, DC, and over short track
            segments in New York, NY, Philadelphia, PA, and Harrisburg, PA.
      --Springfield Terminal Railway, a subsidiary of Guilford Rail System,
            has rights between Berlin, CT and Springfield, MA, as well as
            currently unexercised rights between New Haven, CT and Berlin,
            CT.
      --Providence & Worcester Railroad has rights over certain Amtrak-
            owned lines in southern Connecticut, Rhode Island, and near New
            Rochelle, NY.
      --Connecticut Southern Railroad has rights between New Haven, CT and
            Springfield, MA.
        During fiscal year 1998, Amtrak received the following payments,
    totaling $18,247,893, from freight railroads for their operations over
    Amtrak-owned lines:

    Conrail.................................................     $16,698,200
    Springfield Terminal....................................         148,133
    Providence & Worcester..................................         137,805
    Connecticut Southern....................................       1,263,755

        As a result of the recent acquisition of Conrail by the Norfolk
    Southern Railway (NS) and CSX Transportation (CSX), Conrail's rights
    will be divided between, and in certain cases shared by, NS and CSX,
    with Conrail retaining rights between Northern New Jersey and
    Philadelphia to conduct local operations on behalf of NS and CSX. Also,
    Amtrak has recently entered into an agreement with Triple Crown
    Corporation, which will be a wholly-owned subsidiary of NS following
    the Conrail acquisition, with respect to its planned RoadRailer
    operations over Amtrak-owned rail lines on which NS will acquire
    operating rights from Conrail between Northern New Jersey and
    Washington, DC, and Philadelphia and Harrisburg, PA. Question. Please
    provide a breakdown of fiscal year 1998 Amtrak ridership by State, as
    well as the number of residents employed directly by Amtrak in each
    State.
        Answer. The requested information follows:

    ----------------------------------------------------------------------------------------------------------------
                                                                                                          No. of
                          State                          Boardings      Alightings         Total         residents
                                                                                                         employed
    ----------------------------------------------------------------------------------------------------------------
    Alabama.........................................          27,485          27,108          54,593              29
    Arkansas........................................           8,895           8,871          17,766              27
    Arizona.........................................          46,741          47,222          93,963              24
    California......................................       3,196,007       3,186,549       6,382,556           3,526
    Colorado........................................         120,748         118,797         239,545              86
    Connecticut.....................................         446,371         464,960         911,331             727
    District of Columbia............................       1,526,288       1,527,689       3,053,977             348
    Delaware........................................         346,288         348,740         695,028           1,073
    Florida.........................................         454,679         458,231         912,910             983
    Georgia.........................................          73,628          73,856         147,484              68
    Iowa............................................          26,761          27,462          54,223              11
    Idaho...........................................           2,157           2,305           4,462               1
    Illinois........................................       1,442,672       1,438,826       2,881,498           2,095
    Indiana.........................................          54,689          58,795         113,484           1,239
    Kansas..........................................          19,735          19,970          39,705              27
    Kentucky........................................           4,874           4,551           9,425               3
    Louisiana.......................................          99,225         100,571         199,796             320
    Maine...........................................         ( \1\ )         ( \1\ )         ( \1\ )              14
    Massachusetts...................................         598,405         575,349       1,173,754           2,346
    Maryland........................................         769,393         769,623       1,539,016           2,379
    Michigan........................................         313,481         313,700         627,181             177
    Minnesota.......................................          79,414          78,365         157,779              81
    Missouri........................................         237,316         237,617         474,933              95
    Mississippi.....................................          45,229          45,300          90,529              55
    Montana.........................................          62,934          63,398         126,332              56
    North Carolina..................................         253,394         253,492         506,886             136
    North Dakota....................................          39,466          39,746          79,212              15
    Nebraska........................................          18,613          18,771          37,384              16
    New Hampshire...................................             911             811           1,722             161
    New Jersey......................................       1,727,229       1,731,626       3,458,855           1,740
    New Mexico......................................          49,575          50,439         100,014              57
    Nevada..........................................          39,722          46,537          86,259              31
    New York........................................       4,590,623       4,563,038       9,153,661           2,040
    Ohio............................................          76,214          76,318         152,532              58
    Oklahoma........................................         ( \1\ )         ( \1\ )         ( \1\ )               2
    Oregon..........................................         285,483         287,331         572,814              85
    Pennsylvania....................................       2,285,055       2,286,586       4,571,641           2,915
    Rhode Island....................................         184,583         194,105         378,688             395
    South Carolina..................................          91,429          90,228         181,657              60
    Tennessee.......................................          23,595          23,992          47,587              16
    Texas...........................................          75,139          74,119         149,258             158
    Utah............................................          15,688          16,136          31,824              49
    Virginia........................................         449,903         449,591         899,494             785
    Vermont.........................................          49,576          51,437         101,013              13
    Washington......................................         442,835         441,758         884,593             412
    Wisconsin.......................................         252,856         255,188         508,044              68
    West Virginia...................................          22,666          24,236          46,902              32
                                                     ---------------------------------------------------------------
          United States Total.......................      20,977,970      20,973,340      41,951,310  ..............
                                                     ===============================================================
    British Columbia................................          41,504          45,009          86,514  ..............
    Ontario.........................................          49,319          50,403          99,722  ..............
    Quebec..........................................          25,372          25,412          50,784  ..............
                                                     ---------------------------------------------------------------
          Canada Total..............................         116,195         120,825         237,020  ..............
                                                     ===============================================================
          Amtrak Total..............................      21,094,165      21,094,165      42,188,330  ..............
                                                     ===============================================================
          Total Ridership \2\.......................      10,547,082      10,547,082      21,094,165  ..............
    ----------------------------------------------------------------------------------------------------------------
    \1\ Service to be initiated.
    \2\ The above figures represent total boardings and alightings in each state. Since each trip contains two
      endpoints, total ridership is equal to half of total boardings and alightings.

        Question. What is the status of Amtrak's pending proposal before
    the Federal Energy Regulatory Commission regarding the Corporation
    securing wholesale status for the purchase and resale of electric
    power? If this application is still pending, what is the likely time
    frame for its approval? If the application has been denied, what were
    the given reasons?
        Answer. As background, Amtrak had executed a contract with Enron to
    purchase electric power on a wholesale basis, conditioned upon Enron's
    ability to obtain transmission rights from the regional power pools.
    The terms of the contract would have reduced Amtrak's propulsion costs
    by almost 50 percent. Enron's request to the Pennsylvania-Jersey-
    Maryland (PJM) Pool was denied and Enron filed a complaint with the
    Federal Energy Regulatory Commission (FERC) seeking to compel PJM to
    provide transmission based upon the wholesale characteristics of its
    sale to Amtrak. FERC ultimately dismissed Enron's complaint in
    April,1998, but on a narrow technical basis that avoided a decision on
    Amtrak's eligibility as a wholesale entity. Instead, FERC focused on
    the private ownership of Amtrak's outstanding common stock as a
    disqualifying condition under the Federal Power Act.
        Question. What kinds of income-generating initiatives would
    wholesale status permit? What are the costs and potential income of
    these initiatives?
        Answer. If Amtrak were authorized to engage in the wholesale sale
    of electricity, the railroad would be able to receive revenues from
    sales of electricity to retail and wholesale customers. As a wholesale
    entity, Amtrak would be able to make bulk power purchases in the
    service territory of one utility and transmit it across the Amtrak
    transmission system to serve loads in different areas. Amtrak could
    receive revenue from both the sale of electricity and the transmission
    of electricity at both the wholesale and retail levels, although sales
    to retail customers may be limited to those states that have allowed
    retail competition. In addition, as a wholesale entity, Amtrak may be
    able to avoid having to pay access and transition charges on purchases
    of traction power once the electrification project in the north end of
    the Corridor is complete. This could save between 1.5 and 3.0 cents per
    kilowatt hour, depending on the charge of the local distribution
    company.
        Question. Please provide data on station renovation costs for
    fiscal years 1997, 1998, 1999, and planned for fiscal year 2000.
        Answer. The requested information follows:

                                          FISCAL YEAR 1997 STATION RENOVATIONS
    ----------------------------------------------------------------------------------------------------------------
                                 Station                                  Amtrak       Funding other       Total
    ----------------------------------------------------------------------------------------------------------------
    Chicago Union Station, IL.......................................        $900,000  ..............        $900,000
    Great American Station Foundation...............................       2,000,000  ..............       2,000,000
    NY Penn Station Redevelopment...................................  ..............     $17,000,000      17,000,000
    NEC Stations and Facilities.....................................       1,300,000  ..............       1,300,000
    Met. Lounges Wash. and NY Penn..................................       1,000,000  ..............       1,000,000
    NY Penn Station Elevator........................................         400,000  ..............  ..............
    Design of King Street Station...................................       2,300,000  ..............       2,300,000
                                                                     -----------------------------------------------
          Total Fiscal Year 1997 Station Renovations................       7,900,000      17,000,000      24,500,000
    ----------------------------------------------------------------------------------------------------------------

                                          FISCAL YEAR 1998 STATION RENOVATIONS
    ----------------------------------------------------------------------------------------------------------------
                                 Station                                  Amtrak       Funding other       Total
    ----------------------------------------------------------------------------------------------------------------
    New AutoTrain Facil., Sanford...................................        $250,000  ..............        $250,000
    Miami Transfer Satellite........................................         126,000  ..............         126,000
    CUS Mail Dock Upgrades..........................................         943,000  ..............         943,000
    Mail Service Terminal & Equipment...............................       4,600,000  ..............       4,600,000
    N. Auto Train Terminal Replace. Phase II........................       8,000,000  ..............       8,000,000
    Chicago Union Station Redevelopment.............................         600,000  ..............         600,000
    Lancaster Station...............................................         250,000  ..............         250,000
    30th Street Station Development.................................      10,000,000  ..............      10,000,000
    HSR--Station Improvement/Design.................................       2,000,000  ..............       2,000,000
    PHL Structural Restoration......................................       3,000,000  ..............       3,000,000
    High Speed Rail Program \1\.....................................      14,200,000  ..............      14,200,000
    VRE Joint Benefits Project......................................  ..............      $1,000,000       1,000,000
    Life Safety Washington to New York \1\..........................         750,000  ..............         750,000
    Philadelphia, PA--N. Parking Deck...............................       1,200,000  ..............       1,200,000
    Penn Station Redevelopment......................................      22,500,000  ..............      22,500,000
    NEC Stations & Customer Service Improv..........................       6,900,000  ..............       6,900,000
    Retail Development--NYP & Others................................         732,000  ..............         732,000
    Assessment--NEC Stations Inv. & Improv..........................         250,000  ..............         250,000
    Leverage State/Local Funds (MARC & VRE).........................         550,000  ..............         550,000
    Centralia, WA...................................................         281,000       3,730,000       4,011,000
    King Street Station Intermodal Project..........................       5,000,000      16,200,000      21,200,000
    Sacramento Station Rehabilitation...............................         500,000  ..............         500,000
    Pacific Northwest Stations......................................         600,000  ..............         600,000
    Pacific Northwest Platforms.....................................         600,000  ..............         600,000
    Las Vegas Infrastructure Program \1\............................       2,000,000  ..............  ..............
    Salem, OR Intermodal Station....................................       1,000,000       3,700,000       4,700,000
                                                                     -----------------------------------------------
          Total Fiscal Year 98 Station Renovations..................      86,832,000      24,630,000     109,462,000
    ----------------------------------------------------------------------------------------------------------------
    \1\ This is the portion of the project related to stations.

                                          FISCAL YEAR 1999 STATION RENOVATIONS
    ----------------------------------------------------------------------------------------------------------------
                                 Station                                  Amtrak       Funding other       Total
    ----------------------------------------------------------------------------------------------------------------
    King Street Station Intermodal Project..........................      $4,000,000     $16,250,000     $20,250,000
    Minneapolis-St.Paul, MN.........................................         500,000  ..............         500,000
    Raleigh, North Carolina Station Expansion.......................         444,000  ..............         444,000
    Chicago Union Station...........................................       5,519,000  ..............       5,519,000
    Southern Pines, NC Station Restoration..........................         800,000  ..............         800,000
    Erie, PA Station Renovation.....................................       1,400,000  ..............       1,400,000
    NEC Stations & Customer Service Improv..........................       4,850,000  ..............       4,850,000
    Washington Union Station--Lower Level...........................  ..............       3,200,000       3,200,000
    MetroPark Station...............................................         600,000  ..............         600,000
    Wilmington Station..............................................       3,000,000       1,900,000       4,900,000
    TuPwila, WA Station.............................................         500,000      24,200,000      24,700,000
    Everett, WA Intermodal Project..................................       1,000,000      40,430,000      41,430,000
    Eugene, OR Multimodal Station...................................         500,000       3,600,000       4,100,000
    Albany, OR Multimodal Station...................................         500,000      11,000,000      11,500,000
    San Diego Station Improvement...................................         800,000         400,000       1,200,000
    Salinas Station Improvement.....................................         300,000       2,979,000       3,279,000
    Sacramento, CA Station Renovation...............................       1,500,000      36,580,000      38,080,000
    Great American Station Foundation...............................       1,000,000  ..............       1,000,000
                                                                     -----------------------------------------------
          Total Fiscal Year 1999 Station Renovations................      27,213,000     140,539,000     167,752,000
    ----------------------------------------------------------------------------------------------------------------

        The fiscal year 2000 Capital Budget is currently under development
    and therefore no specific information relating to station renovation
    costs have been included.
        Question. Amtrak's October 1998 strategic business plan capital
    program budget includes $800,000 for the restoration of the historic
    Southern Pines railroad station. It has come to the Committee's
    attention that Amtrak has told local officials that it will not be
    going forward with the project. This project was included as an earmark
    in the Senate transportation appropriations bill, and was the subject
    of a letter to Chairman Shelby and Senator Lauch Faircloth assuring the
    Senators that the project would be funded and would go forward. What is
    the agenda and timetable for the restoration of this station? Please
    include dates for all needed process approvals, engineering and design
    benchmarks, and construction.
        Answer. Amtrak fully intends to participate in the restoration of
    the historic Southern Pines railroad station. When the funding was
    originally provided, Amtrak and the Committee understood that the North
    Carolina Department of Transportation (NCDOT) was planning to purchase
    the Southern Pines facility from CSX Corp. In January, 1999, Amtrak
    received a letter from NCDOT notifying us that the state had decided
    against purchasing the station. Amtrak subsequently began negotiating
    with CSX for the property and did not begin restoration of the station
    until the ownership issue was resolved. If all goes as planned, Amtrak
    will begin performing work on the property in the summer of 1999.
        Question. House report 105-825, accompanying the Fiscal Year 1999
    Omnibus Consolidated Appropriations Act, strongly encourages Amtrak to
    consider funding rehabilitation and renovations at the Erie,
    Pennsylvania station when selecting projects for the state and local
    partnerships. What is the status of this station? Are renovation costs
    assumed in Amtrak's fiscal year 1999 capital spending plan? Has a state
    or local partnership been formed?
        Answer. Repairs are desperately needed at the Amtrak station in
    Erie, PA, and Amtrak has begun planning for a major rehabilitation
    project. The City of Erie and the Commonwealth of Pennsylvania have
    both committed to partner with Amtrak in the rehabilitation project.
    Amtrak recently received proposals from three local architects and will
    soon be selecting a final plan for the station. A groundbreaking
    ceremony is tentatively planned for the summer of 1999.
        Question. In Senate report 105-249, Amtrak was directed to report
    to the Senate Committee on Appropriations by February 1, 1999 on
    progress toward establishing a station at T.F. Green Airport in
    Providence, Rhode Island. To date, the Committee has not received this
    report. Please provide this report for the record.
        Answer. A draft of the final joint Amtrak/Federal Railroad
    Administration report has been completed and is currently in the
    Administration's review process. As soon as the review is complete, we
    will provide the Committee with the final report.
        Question. In the fiscal year 1999 appropriations conference report
    (House report 105-825), Amtrak was directed to report to the House and
    Senate Committees on Appropriations by March 1, 1999 its findings on
    the necessary improvements and related costs for track upgrades between
    Washington, D.C. and Richmond, Virginia that would enable higher-speed
    service. To date, the Committees have not received this report. Please
    provide this report for the record.
        Answer. This joint Amtrak/Federal Railroad Administration report is
    currently being finalized by Amtrak and FRA staff. It is then subject
    to internal review processes. As soon as the internal reviews are
    complete, we will provide the Committee with the final report.
        Question. Please update the Committee on the status of the
    signaling upgrades between Brattleboro and White River Junction,
    Vermont. Has Amtrak included this project in its fiscal year 1999
    capital spending plan? What cost-sharing arrangements have been made
    with the State of Vermont and the New England Central Railroad?
        Answer. This work, defined in the project agreement as ``White
    River Junction'' down to ``Windsor/East Northfield,'' is nearly
    complete. Amtrak will cover its share of costs from the fiscal year
    1999 capital budget. The cost-sharing arrangement, however, is still
    under discussion.
        Question. Please provide a breakout of the active passenger car and
    locomotive fleets owned and leased by Amtrak as of February 1999.
        Answer. The requested information follows:

                                                                 YTD Avg. as
            Equipment Type (active)                             of Mar. 1999

    Diesel Locomotives................................................   286
    Electric Locomotives..............................................    65
    Switcher Locomotives..............................................    60
    Superliner Cars...................................................   456
    Amfleet I Cars....................................................   465
    Amfleet II Cars...................................................   138
    Heritage Cars.....................................................    80
    Material Handling Cars............................................   136
    Horizon Cars......................................................   100
    Viewliners........................................................    52
    Auto Carriers.....................................................    64
    Baggage Cars/Misc.................................................   131
    Turboliner Cars...................................................     3
    Cab Cars..........................................................    18
    Roadrailers.......................................................   283
    Express Cars......................................................   250
                                                                      ______
          Total Owned and Leased Units................................ 2,587

        Question. Please provide a detailed breakdown of fiscal year 1999
    rolling stock purchases and leases, listing the type of equipment and
    number of vehicles that will be procured with fiscal year 1999 funds.
    Please provide the same breakdown for estimated number of vehicles that
    you plan to procure in fiscal year 2000.
        Answer. There were no federally funded capital dollars allocated
    for the acquisition of equipment in fiscal year 1999. The following
    equipment was approved to be procured through financing:
      --70 Auto Train auto carrier units;
      --27 switcher locomotives;
      --44 mailvans, 139 trailers, 134 intermediate bogies, and 132
            couplermate bogies;
      --40 trainsets for the San Diegan service (funding for this service
            is spread through capital funding allocated from fiscal year
            1998 to fiscal year 2001);
      --358 refrigerator cars; and
      --locomotives and trainsets for the Southeast Corridor.
        Amtrak is currently in the process of developing its capital plan
    for fiscal year 2000. The equipment recommended to be procured next
    year will be presented to the Board of Directors in September 1999.
        Question. What is the status and outlook for the Federal Railroad
    Administration's passenger car safety regulation that may potentially
    affect the use of Talgo equipment in the United States?
        Answer. On September 23, 1997, the Federal Railroad
    Administration's NPRM regarding railroad passenger car safety equipment
    appeared in the Federal Register. No final rule has been issued to
    date, and because it is not involved in promulgating the final rule,
    Amtrak is unable to comment on the outlook for the regulation.
        Question. What is the level of investment has Amtrak made or is
    Amtrak planning to make in the Talgo leases for the Northwest Seattle
    to Vancouver corridor and for the Los Angeles to Las Vegas service?
        Answer. None of the three Talgo trainsets currently operating in
    the Pacific Northwest as the Amtrak Cascades are leased. Two are owned
    by the state of Washington, and Amtrak owns the third. Amtrak also owns
    the fourth Talgo train set, scheduled to operate as the second round-
    trip between Vancouver, BC, and Seattle, WA, later this year. Amtrak's
    investment in the Talgo train set for the Los Angeles-Las Vegas service
    is a $3.6 million lease over three years.
        Question. When will the Los Angeles to Las Vegas Talgo service
    begin? Will this be a higher-speed operation? What is the current
    travel time versus the expected travel time on the Talgo service?
        Answer. Los Angeles-Las Vegas service could start as early as the
    first quarter of 2000, pending the completion of the Federal Railroad
    Administration's evaluation of the recent risk assessment of the Talgo
    equipment, and the availability of Union Pacific track gangs for
    completion of the necessary track work. There is currently no passenger
    rail service between Los Angeles and Las Vegas. Amtrak's Desert Wind,
    discontinued in May of 1997, did serve the Los Angeles-Las Vegas
    market, with a travel time of seven hours. The proposed service would
    operate at speeds up to 79 mph, with an expected travel time between
    the two cities of five hours, 30 minutes.
        Question. Please describe any cost-sharing arrangements which have
    been agreed to for the operation of the Los Angeles to Las Vegas Talgo
    service.
        Answer. The service is made possible by unique partnership
    arrangements. RIO Hotel and Suites has agreed to purchase 10,000 seats
    per year for the service, and other potential partners are showing
    serious interest. The Las Vegas Convention and Visitors Authority will
    be providing cooperative advertising programs. Amtrak is also selling
    interior and exterior advertising on Southern California services.
        Question. Please describe the capitalization issues that must be
    resolved to make this service possible. What level of cooperation and
    investment is being made by the freight railroad that owns the route
    trackage? What level of capital support has Amtrak committed?
        Answer. A preliminary agreement has been reached with the Union
    Pacific Railroad over the magnitude and scope of the infrastructure
    improvements that will allow implementation of the service on the
    proposed operating schedule. A second track will be installed on the
    Union Pacific mainline between Cima and Kelso, a distance of just over
    20 miles, at an estimated cost of $28 million. Engineering on these
    improvements is currently underway by the Union Pacific Railroad.
    Amtrak's fiscal year 1998 Capital Budget provided $9 million in funding
    to initiate Los Angeles-Las Vegas service. An additional $5 million in
    capital funding was included in the fiscal year 1999 Capital program.
    If after three years Amtrak chooses to continue operations between Los
    Angeles and Las Vegas, Amtrak would be obligated to pay the remaining
    $14 million to the union Pacific Railroad.
        Question. At the Senate subcommittee's March 10, 1999 hearing,
    Governor Thompson stated unequivocally that the Amtrak Board will not
    support further Amtrak investment in the Farley Building in New York
    City. How much has Amtrak spent on this project thus far? What is the
    cost-sharing arrangement for this project? Is the federal component of
    funding for this project complete? What is the current timetable for
    completion of this project?
        Answer. In 1996, the Penn Station and Farley projects were
    bifurcated, with Amtrak assuming responsibility for Penn Station and
    the Pennsylvania Station Redevelopment Corporation (PSRC) assuming full
    responsibility for Farley. Prior to the bifurcation of the projects,
    Amtrak contributed $9 million to the planning and design of the
    station, and $53.3 million to life-safety improvements within Penn
    Station that were part of the Farley scope of work.
        PSRC is responsible for managing public investment in Farley. They
    are relying on a combination of federal, city and state funds, with the
    relative funding shares now being renegotiated.
        Question. What are the benefits to Amtrak services and passengers
    of developing the Farley Building as part of capital improvements to
    Pennsylvania Station?
        Answer. A new train station in the Farley Building will address
    severe overcrowding in the existing Penn Station facility. Current
    conditions are expected to worsen materially over the next 10 years as
    all three railroads (Long Island Rail Road, NJ TRANSIT, and Amtrak)
    increase service frequencies and, ultimately, ridership. The most
    pressing issue is vertical circulation (moving passengers to and from
    platforms). The limitations in the existing Penn Station configuration
    mean that modern fire safety requirements can only be met by increasing
    vertical egress. Because Penn Station was built between bedrock, the
    platforms cannot be widened nor can new tracks be built in a northerly
    or southerly direction. However, Amtrak's platforms extend westward
    under the Farley Building, providing the opportunity to create
    additional circulation from the platforms into a new Farley concourse.
        Question. On an annual basis, approximately what level of capital
    funding from federal sources will Amtrak require beyond the end of
    fiscal year 2002?
        Answer. Amtrak is currently in the process of developing a capital
    plan as part of its fiscal year 2000 strategic planning process. The
    plan will incorporate the results of the market based network analysis
    and service standards efforts.
        Question. How will the federal appropriations role differ after
    ``operating self-sufficiency'' is reached?
        Answer. After operational self-sufficiency is achieved at the end
    of fiscal year 2002, Amtrak will still require ongoing capital funds to
    support the national network. Amtrak intends to seek a dedicated source
    of capital funding, similar to what is currently enjoyed by other modes
    of transportation.
        Question. What were the total additional costs associated with the
    BMWE labor agreement? Were the retroactive, non-recurring costs
    assessed against fiscal year 1998 or 1999? What is the outyear
    component of these additional costs?
        Answer. Amtrak predicts an incremental wage cost associated with
    the BMWE labor agreement of $33.95 million. Offsetting this cost are
    work rule and other productivity improvements valued at $6.9 million,
    and reimbursable payments of $2.6 million. The additional net cost
    associated with the BMWE labor agreement is estimated at $24.45
    million. The signing bonus and lump sum payments were assessed against
    fiscal year 1998 and the retroactive wage payments were assessed
    against fiscal year 1999. The fiscal year 2000 incremental wage cost
    associated with the BMWE labor agreement is $10.33 million. Offsetting
    this cost are work rule and other productivity improvements valued at
    $3.3 million, and reimbursable payments of $1.2 million. The net
    additional cost associated with the BMWE labor agreement in fiscal year
    2000 is estimated at $5.83 million.
        Question. Have Amtrak's other unions used the BMWE agreement as a
    blueprint? Which unions have reached agreement? What are the costs
    associated with these other agreements?
        Answer. The BMWE labor agreement sets a conceptual framework that
    has been followed in our subsequent labor agreements. That framework
    has two components: wage packages less than those reached nationally by
    the freight railroads, and offsetting work rule savings of about 20
    percent of the incremental wage cost. All agreements reached to date
    have met this framework. Amtrak has reached agreement with the majority
    of its unions, covering about 87 percent of our employees (see attached
    table). The additional net cost associated with these subsequent labor
    agreements is estimated at $143.11 million. Only the United
    Transportation Union (UTU) (Conductors, Yardmasters, Stewards) and
    Brotherhood of Locomotive Engineers (BLE-ATDD) (Train Dispatchers) have
    not reached new agreements.
    [GRAPHIC] [TIFF OMITTED] T12MA10.004

                                     ______

                     Questions Submitted by Senator Gorton

        Question. How can Amtrak expect to compete effectively with trans-
    continental air travel when times are approximately ten times greater
    for rail?
        Answer. Over 80 percent of Amtrak's long-distance customer base are
    leisure travelers. Amtrak's competitive strategy in this market segment
    is not to compete on travel time, but rather, to improve its delivery
    of a travel experience that is enriching, relaxing, convenient,
    comfortable, productive, and on-time. These are the traditional
    benefits and advantages of long-distance rail travel, and the very same
    benefits and advantages that Amtrak will leverage though its service
    standards program and its market-based network analysis to improve its
    competitive position in the market.
        Question. Are the long-distance routes primarily utilized by
    leisure travelers?
        Answer. Yes. As previously noted, leisure travelers are over 80
    percent of Amtrak's long-distance customer base.
        Question. On the long-distance routes, even if every seat on the
    trains were filled, would the route operate at a profit?
        Answer. There are some long distance routes that would be
    profitable if every seat on the train were filled. Amtrak's market
    based network analysis (MBNA), will determine the market potential of
    every Amtrak route. The results of the MBNA, which will include
    recommendations to restructure the network to better meet this market
    potential, will be incorporated into the fiscal year 2000 business
    plan.
        Question. What is the status of the fourth Talgo trainset in the
    Pacific Northwest corridor? What is the time frame for incorporating
    this trainset into service?
        Answer. The fourth Talgo trainset is slated to go into service as
    the second round-trip between Seattle, WA, and Vancouver, BC.
    Originally scheduled for July 1, that start date is currently being
    modified. The assembly of the fourth Talgo trainset is near completion.
                                     ______

                   Questions Submitted by Senator Lautenberg

        Question. Mr. Warrington, you assert that without the expanded
    transit definition for the use of capital appropriations, Amtrak will
    face insolvency in the coming fiscal year. According to you, at the
    level requested in the budget, Amtrak will face an operating shortfall
    of $47 million without the expanded definition. Last year, Amtrak ended
    the year with a cash shortfall of $50 million, which Amtrak
    accommodated through short-term borrowing. Please explain why this $47
    million shortfall at the end of this year will endanger Amtrak's
    solvency, when the $50 million shortfall at the end of last year did
    not.
        Answer. In fiscal year 1998, Amtrak required $50 million in bank
    borrowings to cover its cash deficit. The cash deficit is projected to
    be $100 million for fiscal year 2000, which Amtrak will cover with bank
    borrowings (assuming that the expanded transit definition is provided).
    Without the expanded definition, there is no planned funding source
    available for the additional $47 million cash shortfall. Amtrak's
    short-term line of credit will have been exhausted. The irony is that
    even though Amtrak would have $1 billion in the bank, it would be
    unable to use these funds to satisfy our obligations.
        Question. Amtrak is currently doing a great job of closing the
    revenue gap that the Inspector General has identified for the current
    fiscal year. Mr. Warrington, what are the potential show stoppers that
    might endanger your continued progress in closing your operating
    shortfall for the current fiscal year?
        Answer. Amtrak's fiscal year 1999 year-to-date results through
    February have been $9.3 million better than plan. Revenue and ridership
    are up over fiscal year 1998, and passenger revenue is right on plan.
    Amtrak is well on its way to meeting it fiscal year 1999 target.
        Unforeseen problems could potentially hinder Amtrak's financial
    results during the year. Most significant would be a substantial
    downturn in the economy and costs generated as a result of the City of
    New Orleans accident. However, Amtrak continually looks for and acts on
    new opportunities for revenue generation and cost savings, and intends
    to meet or exceed planned operating results for fiscal year 1999.
        Question. What about your operating shortfall by 2003? What are the
    largest risk factors you see in terms of your ability to reach
    operating self-sufficiency by 2003?
        Answer. The largest risk factor that Amtrak faces regarding its
    ability to reach operating self-sufficiency by 2003 is the receipt of
    adequate capital funding to invest in equipment and infrastructure
    improvements, technological support, partnership opportunities and
    corridor development.
        Question. Amtrak's recently-signed labor contracts include both a
    wage increase and some significant work rule changes to improve the
    railroad's productivity. The IG has told us that these productivity
    improvements are critical to Amtrak's ability to become self-
    sufficient. Mr. Warrington, what can you report to us to date on your
    progress in achieving the productivity improvements?
        Answer. By the end of fiscal year 1998, Amtrak had signed
    agreements with about 46 percent of its employees. By the end of the
    first quarter of fiscal year 1999, that percentage had grown to about
    70 percent, and has now reached about 87 percent. Amtrak saw
    productivity improvements and other agreement offsets of about $1.6
    million in fiscal year 1998 grow to $3.5 million in the first quarter
    of fiscal year 1999. We expect continued growth in productivity
    improvements as the labor agreements implemented since December 1998
    bear fruit. Additionally, some of the productivity improvements (such
    as the elimination of Amtrak's commissaries, the on-duty injury
    management program and a change in some wage rate progressions) have
    later implementation periods, and for the most part, were not planned
    to produce savings until fiscal year 2000.
        Question. Mr. Warrington, you state in your testimony that the
    establishment of new partnerships with the states will be critical to
    the future solvency of the railroad. What costs are currently on
    Amtrak's books that you expect to be covered by the states in future
    years?
        Answer. Amtrak currently receives approximately $95 million
    annually from states supporting operations and in fiscal year 1999 was
    successful in leveraging over $300 million of capital investment from
    state and local governments. Amtrak anticipates that this level of
    support will continue and will grow over the business plan period. The
    specific financial participation from any state will depend upon that
    state's transportation plan and service needs, the results of the
    market based network analysis and the amount of capital that Amtrak has
    to invest in state partnership projects.
        Question. Mr. Warrington, as you can imagine, I am very
    enthusiastic about the advent of truly high-speed rail in the Northeast
    Corridor. At this point, what would you identify as the potential
    ``show stoppers'' that will keep us from getting high-speed rail by
    October of this year?
        Answer. Amtrak is not aware of any ``show stoppers'' at this point
    that would prevent the implementation of high-speed rail by the end of
    the year. It is important to note, however, that while both the
    trainsets and the electrification system rely heavily on ``proven''
    technology, both are new systems and require extensive testing. Thus
    far, testing has not revealed any major concerns requiring design
    changes. This bodes well for timely completion of testing and
    implementation of high-speed service.
        Question. What major infrastructure improvements will not be
    completed by that time?
        Answer. Several infrastructure projects will extend beyond the
    start-up of high-speed rail service but will not appreciably impact
    trip time. All trip time improvements are planned for completion by
    Fall 2000.
        New Haven Interlocking.--Amtrak's two high-speed tracks will be
    completed in 1999. The entire project, which includes significant Metro
    North rationalization, will not be completed until 2002.
        Stamford.--The center island platform project will not be completed
    until 2003. Amtrak will be able to begin serving Stamford from the
    center island platform in 2001.
        Shell.--The new at-grade junction at Shell interlocking will not be
    fully completed until 2002. Amtrak expects a 30-mph speed through the
    junction by Fall 2000 and a 45 mph speed by the end of 2001.
        Thames River Bridge.--Replacement of the draw span at Thames will
    not take place until 2002.
        Question. How much does the fiscal solvency of the railroad in
    fiscal year 2000 depend upon your revenue estimate from the high-speed
    rail initiative for the coming year?
        Answer. High-speed rail will generate $202 million in revenue in
    fiscal year 2000 and have a positive budget impact of $87 million.
        Question. When can we expect two-and-one-half hour service between
    New York and Washington? What further improvements need to be made to
    make that a reality?
        Answer. High-speed rail is on schedule to be unveiled late this
    year and will offer a trip time between New York and Washington of
    2:45. Amtrak is currently developing a shorter stopping pattern and, in
    the spring of 2000, will initiate a train that offers a New York to
    Washington trip time of 2:30.
        Question. When does your budget anticipate that those improvements
    will be made?
        Answer. Amtrak's business plan assumes the launch of high-speed
    this year offering trip times between New York and Washington of 2:45.
    Any improvement on this will have a positive impact on Amtrak's budget
    and put the corporation ahead of plan.
        Question. As I said in my opening statement, Amtrak and the
    Inspector General have differing estimates for the revenue stream that
    can be expected from high-speed rail in the Northeast Corridor. I
    understand that one of the driving factors that lies behind this
    differing estimates regarding how many passengers the new high-speed
    rail service will take off the highway. Some highway user groups have
    claimed that we could eliminate each and every Amtrak route and not
    increase highway congestion at all. Mr. Warrington, what evidence can
    you provide regarding the likelihood of high-speed rail services
    serving to relieve congestion on our highways?
        Answer. Ridership increases in the Northeast Corridor due to high-
    speed rail will exceed 2,000,000 additional rail trips each year,
    beginning in fiscal year 2001. In end point markets--for example, New
    York/Boston and New York/Washington--55 percent of the incremental
    ridership will be diverted from cars and 45 percent from planes. In
    intermediate markets--for example, New York/Philadelphia, Philadelphia/
    Washington, New York/New Haven, New Haven/Boston--90 percent of the
    incremental ridership will be diverted from cars. As a result, the
    high-speed rail program is expected to relieve some of the congestion
    on highways in the Northeast region.
        Question. Mr. Warrington, your statement points out that you have
    been able to have record increases in passengers over the last year,
    even during the period of extremely low gas prices. Are you optimistic
    that, when gas prices rebound, we will see even greater passenger
    growth?
        Answer. Amtrak is very encouraged that ridership has remained so
    strong, given the historically low gasoline prices. This reflects that
    congestion has become so severe in many corridors that travelers will
    look to reliable, safe, and fast train service regardless of the price
    of gasoline or airfares. We believe that the competitive trip times and
    terrific amenities offered by ACELA Express will result in extremely
    strong ridership on the Northeast Corridor. These same factors would
    similarly enhance ridership in other high-speed rail corridors around
    the country.
        Question. Mr. Warrington, you have pointed out that your mail and
    express business is growing because shippers are finding you schedules
    to be more attractive, and your performance more predictable then the
    trucking industry. Doesn't that indicate, on its face, that Amtrak
    service is taking trucks off the highway?
        Answer. Yes, in fact we are doing so with the cooperation of a
    number of trucking companies, including UPS and Swift Transportation.
    UPS moves trailers of packages on two Amtrak services and Swift, the
    nation's third largest truckload carrier, provides express service via
    Amtrak between Chicago, Philadelphia and Florida. Other trucking
    companies are considering converting from highway to Amtrak, and we
    have operated test loads for Consolidated Freightways and Roadway
    Express. Amtrak is clearly helping to mitigate highway congestion by
    taking trucks off the roads and, what surprise many people, is doing it
    cooperatively with the truckers.
        Question. Mr. Warrington, the Inspector General's testimony states
    that Amtrak would require $125 million more per year than they are
    requesting simply to make the minimum level of capital investment
    necessary to operate at your current level of service. What will be the
    consequences of not providing this additional $125 million?
        Answer. Amtrak will require additional capital funding after fiscal
    year 2000 and is currently identifying its capital needs as part of the
    strategic business planning process. The fiscal year 2000 Strategic
    Business Plan will integrate results from the market-based network
    analysis and service standards efforts. If Amtrak does not receive
    sufficient capital funding in the future, it will be unable to achieve
    or maintain operating self-sufficiency.
        Question. Mr. Warrington, do you agree with the Inspector General
    that the funding levels anticipated in your strategic business plan do
    not make adequate capital investment to maintain the current level of
    Amtrak service?
        Answer. Amtrak has consistently stated that a secure and stable
    capital funding source is needed in order to make the capital
    investments necessary to reach and maintain operating self-sufficiency.
    Amtrak agrees that additional capital funding will be required after
    fiscal year 2000.
        Question. Mr. Warrington, you mentioned in your statement that the
    key to achieving success outside of the Northeast Corridor is to
    develop a ``market-based'' national route structure. Toward that end,
    you are undertaking a market-based analysis of your existing system.
    When will this analysis be completed?
        Answer. The Corporation plans to complete the MBNA in the late
    summer of 1999, so that implementation can begin in fiscal year 2000.
    The capital and operating budgets developed for the fiscal year 2000-
    fiscal year 2004 Strategic Business Plan, as well as the long term
    forecasts shown in that plan, will incorporate the results of the MBNA.
        Question. Is it likely that you will be proposing route changes or
    reductions as a result of this analysis?
        Answer. By analyzing demand for passenger rail service across the
    country, and considering the requirements associated with potential
    route options, Amtrak can reposition the Corporation as more relevant
    to its customers, and in doing so, make it more commercially viable. In
    this way the market-based network analysis will guide management
    decisions to redefine the national network.
        Question. Governor Thompson, the growth in Amtrak's non-passenger-
    related revenue has been, and will be, essential to the railroad's
    fiscal solvency. The Inspector General has pointed out that this area
    of revenue has grown by 60 percent over the last ten years. When the
    Amtrak Board meets to approve plans for non-passenger revenue items,
    have you ever debated the question as to whether you are straying too
    far from the railroad's mission to providing intercity passenger
    service?
        Answer. The first and foremost goal of the National Railroad
    Passenger Corporation is to provide safe and efficient intercity
    passenger rail. All other activities, while critical to the financial
    performance of the corporation, are secondary. Amtrak passenger rail
    service provides a critical element of a well-balanced, intermodal
    transportation network. It is advantageous for the corporation to seek
    further non-passenger revenue opportunities if it financially supports
    passenger rail.
        Question. Do you ever face a genuine choice between providing
    adequate or improved passenger service versus leveraging an additional
    dollar for non-passenger-related revenue?
        Answer. No. Amtrak's primary mission is to provide quality
    intercity passenger rail service. The corporation is willing to explore
    any non-passenger revenue options that support that goal.
                                     ______

       Questions Submitted to the Department of Transportation Inspector
                                    General

                     Questions Submitted by Senator Shelby

                             amtrak's route system
        Question.At the February 25th Department of Transportation
    oversight hearing, I proposed that we think about a pilot project that
    would give Congress, the Amtrak Reform Council, and Amtrak's own
    management comparable data about operating costs on a given route. I
    proposed that we select just one Amtrak route and contract out that
    route's operation to another vendor for a limited amount of time, and
    then compare performance to similar routes on Amtrak's current system,
    and to that specific route's own performance over the past few years.
    Would such a pilot project help us see where operating savings can, or
    can't, be realized? And what are some of the potential problems we
    would face if we went forward with this proposal?
        Answer. This proposal has merit, but there are two important
    caveats. First, It could not be a short-term arrangement if one
    expected the third-party operator to make capital investments. A short-
    term arrangement would make it particularly difficult for an operator
    of a single route to establish its own independent maintenance
    facilities for the equipment on that single route.
        Second, there may be legal issues surrounding Amtrak's current
    labor contracts that would have to be resolved. The primary costs
    likely to be directly within a new operator's control are direct labor
    cost of train operations. Most of the other current costs of operation
    may not be reducible. Foe example, trackage-rights agreements with the
    freight railroads would continue at their current costs. Station
    operations and maintenance costs are often shared among routes, and it
    may not be possible for a new operator to reduce them for its share of
    operations. Finally, corporate overhead functions such as marketing,
    purchasing, and accounting would still need to be performed by the new
    operator, likely at a higher cost than Amtrak's because Amtrak can
    spread the cost over more routes. If direct labor costs were the main
    source of third-party cost savings, the contracting-out arrangement
    could be viewed as an attempt to bypass Amtrak's legal labor
    obligations. While this would have to be addressed, I do not think the
    idea of contracting out a route for comparison purposes should be
    dismissed out of hand.
        Question. If this idea seems unworkable, is there a way to break
    out the different functions that Amtrak performs, such as equipment and
    track maintenance, marketing, reservations and ticketing, purchasing,
    etc. and compare Amtrak's costs and productivity in performing these
    functions to other companies that provide similar services? Does the
    Inspector General's office have the necessary depth of knowledge of the
    detailed working of Amtrak's operations to ``pull out'' these different
    functions, and make meaningful comparisons with other private sector
    companies that perform similar functions? Please provide a list of
    functions that could be broken out in this manner, and of benchmark
    private sector companies that currently provide these functions.
        Answer. I believe this alternate approach-examining each function
    that Amtrak performs, such as marketing, purchasing, and equipment
    maintenance, and comparing Amtrak's cost and productivity in performing
    those functions to other benchmark companies-also has merit. While
    there are no other passenger railroads in this country to which Amtrak
    as a whole can be compared, the individual functions Amtrak performs
    are readily comparable to those of other firms.
        For example, the costs and labor productivity for equipment
    maintenance, track maintenance, and train dispatching and control can
    be compared to those of the freight railroads or commuter operators.
    Passenger-related functions such as marketing, reservations, ticketing,
    and catering can be benchmarked to efficient airline companies.
    Finally, overhead functions, such as accounting, financial management,
    and purchasing can be compared to any number of efficient companies
    with lean management structures. This type of benchmarking would likely
    indicate where Amtrak has opportunities for cost reduction and
    efficiency improvements.
        The Office of Inspector General has the capability of providing
    such an analysis, though such an extensive analysis would likely have
    to be performed in phases over a number of years. However, it is our
    view that this type of study would be the natural province of the
    Amtrak Reform Council--bringing the collective business and
    transportation expertise of its members to bear in combination with the
    work of its staff. It seems to us that this type of analysis and its
    potential recommendations are what the Congress had in mind in creating
    the ARC. However, if ARC does not have the resources available to it to
    perform these analyses, we would work with the Congress to develop and
    perform this benchmark analysis.
        As noted, the functions that might be benchmarked include equipment
    maintenance, equipment servicing, maintenance of way (track,
    structures, and signaling), train dispatching and control, marketing,
    reservations and ticketing, catering, purchasing, accounting, financial
    management, and executive management. We would be pleased to work with
    the Congress and the ARC to identify the appropriate benchmark
    companies for such a study.
                                     ______

                     Questions Submitted by Senator Gorton

                                route structure
        Question. If Amtrak were to move to privatization, do you believe
    that private entities would see Amtrak's current route structure as
    potentially profitable?
        Answer. If Amtrak were to move toward privatization, we do not
    believe that private entities would see Amtrak's current route
    structure as potentially profitable. Even if Amtrak were to reach its
    goal of operating self-sufficiency, there would still be significant
    and continuing capital needs for the foreseeable future.
        Question. If not, do you think there would be interest in
    purchasing the rights to operate certain corridors if these private
    entities were allowed to take advantage of non-passenger revenue? If
    so, which corridors would be attractive? Would the Pacific Northwest
    corridor be included in this group?
        Answer. Amtrak is currently conducting a market-based network
    analysis, the results of which will enable it to identify the passenger
    and non-passenger revenue potential for each of its routes and
    corridors. This is scheduled to be completed in the summer of this
    year, and will be included in Amtrak's fiscal year 2000 Strategic
    Business Plan. We will thoroughly analyze these results as part of our
    assessment of Amtrak's fiscal year 2000 Strategic Business Plan. Until
    the market-based network analysis is completed, however, we are not in
    a position to identify which corridors would or would not be attractive
    to private entities.
        Amtrak receives significant operating and capital funds from the
    states of Washington and Oregon to support Pacific Northwest corridor
    services. If a private entity were to purchase the rights to operate in
    these areas, it would likely need similar assistance and would need to
    negotiate its own agreements with the states. Whether the service would
    be profitable without such subsidies may be better assessed after the
    market-based analysis is completed.
        Question. Doesn't a corridor-based system seem like a more logical
    approach to rail travel in this country?
        Answer. Amtrak's current mandate is to provide a national network
    of rail passenger service. Once the results of the market-based network
    analysis are known, we would be better able to assess whether it would
    be more logical to switch to a corridor-based system. It is possible
    that certain corridors could prove to be profitable, while certain
    cross-country routes would not. If the non-profitable routes were
    abandoned, this would allow capital spending to be redistributed to the
    more profitable corridors. This would, of course, be at the expense of
    the national network. Were Amtrak to abandon the less-profitable
    routes, it is highly unlikely that a private entity would decide to
    operate passenger rail in these areas unless state or Federal subsidies
    could be negotiated. If these were not forthcoming, portions of the
    country would not be served by passenger rail transportation.
                                     ______

                   Questions Submitted by Senator Lautenberg

         challenges to solvency in 2000/challenges to solvency in 2003
        Question. Mr. Mead, I understand that you concur in Amtrak's
    observation that, without the expanded transit definition for the use
    of capital appropriations, Amtrak will face insolvency in the coming
    fiscal year. According to Amtrak, at the level requested in the budget,
    they will face an operating shortfall of $47 million without the
    expanded definition. Last year, Amtrak ended the year with a cash
    shortfall of $50 million, which Amtrak accommodated through short-term
    borrowing. Please explain why this $47 million shortfall at the end of
    this year will endanger Amtrak's solvency when the $50 million
    shortfall at the end of last year did not.
        Answer. Amtrak has a credit arrangement that permits $121 million
    in short-term borrowing this calendar year. Its financial plans require
    short-term borrowing of $100 million this year and commit the balance
    to fund requirements of equipment financing agreements. The forecast
    operating shortfall is based on the assumption that the short-term
    borrowing is essentially rolled over when it becomes due and,
    therefore, there would not be any additional short-term financing
    capacity available to cover the shortfall.
        The cash loss that must be covered by Federal appropriations
    predicted for fiscal year 2000 is $355 million of which expenses for
    maintenance of equipment comprise $308 million. Because federal
    appropriated funds can be used to cover maintenance of equipment, there
    remains a shortfall of $47 million.
                does high-speed rail pull cars off the highway?
        Question. As I said in my opening statement, Amtrak and the
    Inspector General have differing estimates for the revenue stream that
    can be expected from high-speed rail in the Northeast Corridor. I
    understand that one of the driving factors that lies behind this
    difference is the differing estimates regarding how many passengers the
    new high-speed rail service will take off the highway. Some highway
    user groups have claimed that we could eliminate each and every Amtrak
    route and not increase highway congestion at all. Mr. Mead, what
    evidence can you provide regarding the likelihood of high-speed rail
    service serving to relieve congestion on our highways?
        Answer. During the 1998 independent assessment, we projected that
    by 2001, high-speed rail service in the New York-Boston market would
    attract about 148,000 travelers who otherwise use autos for their
    trips. This amounts to 3 percent of the auto traffic in that market in
    2001. For the entire North-end market, high-speed rail service would
    attract about 450,000 auto travelers, or 1 percent of the forecast auto
    trips in 2001.
                   what caused electrification cost overruns?
        Question. Mr. Mead, your testimony points out that 40 percent of
    the budget growth in the Northeast Corridor Improvement Project is
    attributable to cost overruns on the electrification work. What caused
    electrification cost overruns? What can you tell me about what caused
    these cost overruns?
        Answer. Since the electrification project began in December 1995,
    the costs have increased $228 million--from $353 million to $582
    million. The chart on the following page identifies the basic cost
    elements of this growth.
        Question.What danger is there that the electrification work will
    not be done in time to do adequate testing before the initiation of
    high-speed service in October?
        Answer. The electrification project is scheduled for completion and
    full testing by October 1, 1999, in time for fully electrified service
    to begin sometime that month. This completion date represents a
    schedule slip of approximately 3 months. While Amtrak believes this
    schedule is feasible, management agrees that there is no more pad in
    the schedule to absorb further delays.
        We are not aware of any current condition that will delay the
    completion of the electrification work. However, any additional delays
    in the electrification project will result in delays in the startup of
    service. Amtrak has committed to beginning this service in October and
    has indicated its willingness to provide any support or resources to
    the contractor necessary to fulfill this commitment. Such actions might
    include additional track outages and service disruptions while the
    contractor works simultaneously in multiple blocks of track.

                 ESTIMATED INCREASES ON ELECTRIFICATION PROJECT
                              [Dollars in millions]
    ------------------------------------------------------------------------
                                     Dec.      Aug.       Major Causes of
              Categories             1995      1998           Overruns
    ------------------------------------------------------------------------
    Contractor...................      $335      $438  $95.5 million for
                                                        change orders and
                                                        allowance items on
                                                        the electrification
                                                        contract.
                                                       4.4 million for
                                                        additional
                                                        foundation
                                                        subcontractor to
                                                        make up for schedule
                                                        delays.
                                                       3 million to close
                                                        out original prime
                                                        contract that Amtrak
                                                        terminated in 1995.
    Technical and Legal Support..        .4      17.1  cost of private legal
                                                        counsel to manage
                                                        and negotiate change
                                                        orders.
    Amtrak Protection (Flagging).        11      62.7  42 million increase
                                                        in flagging
                                                        protection costs.
                                                        Electrification
                                                        contract requires
                                                        Amtrak to provide
                                                        flagging protection
                                                        during construction.
                                                        To make up for
                                                        schedule delays, the
                                                        contractor is
                                                        working in nine
                                                        sections of rail
                                                        track, rather than
                                                        two, requiring more
                                                        flagmen than
                                                        anticipated.
                                                       4 million identifying
                                                        cable conflicts.
                                                       2.4 million flagmen
                                                        training.
                                                       1.5 million for
                                                        relocation of fiber
                                                        optic cables.
    Land Acquisition.............         2       4.6  cost for additional
                                                        real estate required
                                                        for electrical
                                                        facilities and along
                                                        the right-of-way for
                                                        catenary pole
                                                        foundations.
    Project Management...........         5      23.4  increased costs of
                                                        design/inspection
                                                        construction
                                                        management.
                                                       additional 1.5
                                                        positions for
                                                        environmental
                                                        contract.
    Barriers.....................  ........      25.6  20 million related to
                                                        change in project
                                                        scope to use solid
                                                        barriers to cover
                                                        catenary under
                                                        bridges.
                                                       5.6 million in safety
                                                        features to restrict
                                                        public access to
                                                        catenary wires.
    Other Issues.................  ........      10.3  6.8 million in costs
                                                        related to hooking
                                                        up commercial
                                                        electrical
                                                        utilities.
                                                       mitigation at
                                                        Roxbury, MA power
                                                        substation,
                                                        including relocating
                                                        a substation to
                                                        address local
                                                        concerns.
                                                       additional insurance
                                                        issues.
                                  --------------------
          Total..................     353.4     581.7  228 million increase
                                                        (Rounded).
    ------------------------------------------------------------------------

      is amtrak adequately funding its capital needs to maintain current
                                    service?
        Question. Mr. Mead, you state in your testimony that Amtrak would
    require $125 million more per year than they are requesting simply to
    make the minimum level of capital investment necessary to operate at
    the current level of service. Is Amtrak adequately funding its capital
    needs to maintain current service? What will be the consequences of not
    providing this additional $125 million?
        Answer. Our projected funding shortfall in meeting Amtrak's minimum
    capital needs is not expected to occur until 2001, largely because of
    the availability of TRA funds through 2000. Amtrak will have enough
    capital to complete the high-speed rail project, but other
    infrastructure, rolling stock, and technology needs will go unmet if
    additional funding is not forthcoming.
        Even if Amtrak does not receive the additional funds necessary to
    support a minimum-needs spending scenario, Amtrak will have to fund
    certain projects such as those related to environmental cleanup and ADA
    compliance, and will have to cover its debt principal obligations.
    Other needs may be deferred, such as life safety projects in the New
    York North and East River tunnels, operational reliability needs
    including replacement of life-expired assets (rail, ties, cables, and
    electric traction hardware), and repair needs for buildings and other
    structures.
        Outside the Northeast Corridor, infrastructure needs include
    repairs required to keep Amtrak-owned facilities in serviceable
    condition, such as rolling-stock maintenance yards and shops and
    stations owned or used by Amtrak. Such deferrals would not only
    compound the deterioration and increase the future costs of repair, but
    the deteriorated facilities are likely to undermine Amtrak's plans for
    sustaining and increasing revenues.
        Another of Amtrak's key minimum needs is an estimated $85 million
    for progressive overhauls. A minimum budget would allow for
    continuation of the progressive-overhaul program, but would cause
    deferrals of most heavy-overhaul work on rolling stock. If Amtrak does
    not receive enough capital to fully fund a `minimum needs' scenario, it
    is possible that all overhaul work--heavy and progressive--will be
    delayed or suspended, causing long-term implications for both costs and
    revenues.
                          ticket or fee-based revenue
        Question. In the aviation industry, the federal government charges
    taxes to each ticket to help pay for a portion of the FAA and
    infrastructure improvement. Local airports are also allowed to charge a
    Passenger Facility Charge for every traveler who boards a commercial
    flight. This provides a revenue stream derived from the primary users
    of the system. Would a similar fee system be workable for Amtrak? Would
    this alleviate any of Amtrak's problems?
        Answer. A fee system similar to the one that exists in the aviation
    industry would probably not prove workable for Amtrak. In the case of
    Amtrak, the tax on tickets would be indistinguishable to its customers
    from a fare increase. Were such a fare increase currently possible and
    sustainable, Amtrak would no doubt initiate it on its own as part of
    its ongoing efforts at revenue maximization.
        Question.Would such a dedicated funding stream make Amtrak more
    attractive to private investors?
        Answer. If a dedicated funding stream were available, it would
    undoubtedly be attractive to private investors, as it would to Amtrak.
    However, a ticket tax would not provide a new funding stream.

                              subcommittee recess

        Senator Shelby. This hearing of the Subcommittee on
    Transportation is now recessed. The subcommittee will reconvene
    on Tuesday, March 23, at 2 p.m., here in this hearing room, to
    discuss the Federal Aviation Administration's fiscal year 2000
    budget request. The principal witness will be Miss Jane Garvey,
    the FAA Administrator.
        Governor, thank you.
        Mr. Warrington, thank you.
        Mr. Mead, you are a regular here. Thank you.
        Governor Thompson. Thank you, Mr. Chairman, and Senator
    Lautenberg. You were wonderful to be in front of.
        Senator Shelby. Thank you.
        Mr. Warrington. Thank you very much.
        [Whereupon, at 11:55 a.m., Wednesday, March 10, the
    subcommittee was recessed, to reconvene at 2 p.m., Tuesday,
    March 23.]

     DEPARTMENT OF TRANSPORTATION AND RELATED AGENCIES APPROPRIATIONS FOR
                                FISCAL YEAR 2000

                                  ----------

                            TUESDAY, MARCH 23, 1999

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 2 p.m., in room SD-124, Dirksen
    Senate Office Building, Hon. Richard C. Shelby (chairman)
    presiding.
        Present: Senators Shelby, Bennett, Campbell, Lautenberg,
    and Kohl.

              FEDERAL AVIATION ADMINISTRATION BUDGET AND PROGRAMS

                          DEPARTMENT OF TRANSPORTATION

                        Federal Aviation Administration

    STATEMENT OF HON. JANE F. GARVEY, ADMINISTRATOR

                      OPENING STATEMENT OF SENATOR SHELBY

        Senator Shelby. Good afternoon. The hearing will come to
    order. Today we have the FAA Administrator, Jane Garvey, who
    will be here to discuss the Administration's fiscal year 2000
    budget request for the Federal Aviation Administration and
    other aviation issues.
        I want to dig into the budget request, reauthorization
    proposals, and the status of some of the FAA's programs in
    today's hearing. So I will keep my remarks brief in order that
    we might get to a dialogue with the Administrator on these
    topics and other issues that my colleagues wish to discuss.
        Before getting to that, however, I wanted to conduct a
    brief review of the FAA budget over the past several years in
    order to place the current budget request and the discussion
    over reauthorization in perspective, and to touch upon a few of
    the broad budget issues to be contemplated in this year's
    authorization process.
        There has been a great deal of discussion during the first
    3 months of the year of aviation, about the looming crisis at
    the FAA and pending gridlock in the skies, due to insufficient
    FAA funding. This panic cry is not new. It has been a common
    refrain over the past 15 years.
        It seems to increase in volume every time the
    Administration proposes a new capital plan or a reauthorization
    proposal, or every time Congress undertakes the reauthorization
    of the Federal Aviation Administration's programs. But the
    crisis always seems to recede the closer we look at it or the
    closer we get to the projected gridlock deadline.
        Does that mean that the vast number of studies,
    conferences, and think tanks that have weighed in on this topic
    are off base? No. Clearly, air traffic has increased and
    capacity management challenges have also increased, but the
    airlines, the airports, and the FAA's ability to grow capacity
    and more efficiently manage traffic loads has also increased.
        The system works and will continue to evolve, I believe, as
    the nature of the traffic demands grow and change. Congress
    once again needs to make sure that we do not respond to the
    projections of dynamic growth in the aviation industry with
    solutions based on static capacity growth models.
        I have directed my staff for the past 2 years that I have
    been chairman of this subcommittee to focus our aviation
    investment in three areas: on increasing the investment in
    airport infrastructure, on investing in technology that will
    allow our airports and airlines to be more efficient, and on
    increasing the efficiency of the air traffic control system and
    personnel. I think we are making good progress on the first two
    fronts, and I am hopeful that the Administrator will be able to
    tell us how the new controller's agreement will make the air
    traffic control system more efficient.
        Although it is often said in the halls of the FAA or in
    outside study groups that the FAA is in a crisis because the
    Agency lacks a reliable revenue stream, the facts simply do not
    bear that out. For 99.8 percent of the FAA's budget over the
    past 5 years has been appropriated and approved by Congress.
        Over the past 3 years FAA's appropriation has grown by 17.6
    percent. By comparison, over the same time frame, FDA's funding
    grew 12.1 percent, NASA's budget went down 1.6 percent, and the
    budget for defense declined by 1.7 percent. Clearly, FAA has
    fared better than most in the budget process.
        It is also important to note that FAA's budget growth has
    come in an environment where their workload has only been
    growing between 1 and 3 percent per year. Keep in mind, the FAA
    moves airplanes, not passengers. While the budget has grown at
    a faster rate than the FAA's workload, productivity gains and
    cost-saving measures have been largely non-existent at the FAA.
    We need to do better. I hope we will.
        The budget request for the FAA proposes almost a 6-percent
    growth over last year's appropriation. On top of the last three
    year's growth, FAA's budget will have grown by over 25 percent
    over 4 years. Keep in mind that history shows that the FAA gets
    virtually all of its budget requests. In short, this request is
    not lean, particularly, when compared to other agencies in the
    Federal Government or even within the Department of
    Transportation, or compared to the Agency's workload growth, or
    the virtual absence of any meaningful cost savings. In fact,
    this budget request, I think, is generous. So the question
    should not be whether we are spending enough on the FAA, the
    question should be whether it will be spent wisely. I hope it
    will be.
        I would submit that some of the refocusing that the
    Administrator has done with the Facilities and Equipment
    budget, emphasizing the Free Flight Phase One initiative, for
    example, gives me greater confidence that things are being done
    better. However, some of the problems with the Agency's two
    largest procurements, STARS and WAAS, lead me to believe that
    the Agency has not turned the corner yet. Clearly, there is a
    critical need for continued and perhaps increased oversight
    from within the FAA and from organizations like the Department
    of Transportation Inspector General, the General Accounting
    Office, and the Congress.
        Finally, I am concerned about the growing popularity of
    firewalling parts of the budget in order to insulate portions
    of the budget from having to compete with other Federal
    spending. The argument that aviation should follow the example
    of highways and transit should concern all of us. There are
    hundreds of trust funds and even more special funds which can
    make a similar case for a special budgetary treatment.
        Assuming we adhere to the budget caps, if the recently
    introduced House FAA reauthorization bill were to be enacted,
    the FAA's budget would grow by 50 percent and be firewalled
    like highways and transit, and there would not be any room left
    in the transportation appropriations bill for the Coast Guard,
    Amtrak, OST, NTSB, or the non-firewalled portion of NHTSA.
        The FAA has thrived in the regular budget and appropriation
    process. FAA expenditures continue to exceed the taxes paid
    into the aviation trust fund. Our focus this year should be how
    to do things better, not how to insulate the FAA from oversight
    or from having to compete with other budget priorities.
        Senator Lautenberg is on his way here, but I will proceed.

                          statement of jane f. garvey

        Senator Shelby. Ms. Garvey, your written statement will be
    made part of the record in its entirety. You may proceed as you
    wish.
        Ms. Garvey. Thank you very much, Mr. Chairman. I will keep
    my oral remarks very brief.
        First of all, thank you very much for the opportunity today
    to testify in support of the FAA's budget request for fiscal
    year 2000. Let me begin by expressing my appreciation to you. I
    am doing this not only on behalf of myself, but of the
    employees of the FAA, and to members of this committee for the
    strong support of the FAA in its critical mission.
        I think a year ago when I appeared before this committee
    for my first budget hearing I said there were three important
    agenda items, safety, security, and system efficiency. I said,
    that at the end of the day, that is what the American people
    will judge us by, and that is what they should judge us by. I
    think because of the strong support of this committee we have
    been able to make some progress in each one of those areas.
    What I would like to do is to touch very briefly on each of
    those areas and how the budget supports those initiatives.

                                aviation safety

        First of all, the area of safety. Last year, Mr. Chairman,
    as you may remember, we announced in concert with the Secretary
    of Transportation and the aviation community the Safer Skies
    agenda. This is a data-driven, prioritized approach designed to
    help us meet our goal. It is a very ambitious goal of reducing
    the commercial aviation accident rate by 80 percent by the year
    2007. We think we are making very significant progress with
    Safer Skies.
        We have an agenda that includes initiatives for controlled
    flight into terrain, uncontrolled engine failure, and runway
    incursions. Runway incursion is something we hear a great deal
    about from airport operators as well as pilots. It is something
    that really cuts across general aviation and commercial
    aviation.
        I think our Safer Skies agenda, that is data driven, has
    been very important in advancing that important goal that we
    have in safety. We worked on this agenda in concert with the
    industry, with the NTSB, and with the Inspector General.

                               Aviation Security

        In the area of security, Mr. Chairman, the White House
    Commission on Aviation Safety and Security rightly recognized
    civil aviation security as a national security issue. The
    budget that we have submitted includes more than $300 million
    for aviation security, which includes $100 million to continue
    deployment of advanced security equipment. We met yesterday
    with NASA on some of the work that we are doing with them. I
    thought one of the NASA engineers put it very correctly. He
    said, this is often expensive equipment, but it is one of the
    best insurance policies that we can have in protection in the
    area of aviation security.

                               system efficiency

        Turning to system efficiency, as you have suggested, Mr.
    Chairman, modernizing the NAS is, and should be, one of our
    greatest opportunities to improve our nation's aviation system.
    In many ways it is also one of our greatest challenges.
        We have developed a very comprehensive modernization plan
    in concert with industry. The plan includes three elements;
    each very critical, each very important. The first element is
    sustaining our systems or renewing the infrastructure. That is
    the thousands of pieces of equipment that we see going into the
    system day in and day out, not equipment that is always very
    fancy, but it is also critical and very, very important. Also,
    Host and DSR are the platforms, and that is part of sustaining
    that system as well. The second element is additional safety
    features that primarily address providing more precise, more
    accurate, and more timely weather information. Sustaining the
    system is the first element, adding additional safety features
    is the second element, and the third element is enhancements.
    Those are the enhancements that increase the capability and the
    efficiency of the system.
        In fiscal year 2000, $2.3 billion is proposed for the FAA's
    capital modernization program. Free-Flight Phase One is, we
    believe, a real success story for the agency and for the
    industry. A year ago we brought together the industry and our
    unions to really focus on those early elements of modernization
    where we can get some benefits and some results in a relatively
    short period of time. The result is Free Flight Phase One. That
    is a series of automation tools that are used by the
    controllers, but eventually, the ultimate results are benefits
    for the industry and the traveling public.
        We have a contract with industry on Free Flight Phase One.
    It is very simple and very straightforward. It is that we will
    deploy the tools, but industry will help us measure the
    results. Are we really getting from these tools what we really
    want? I have to say, while the results are still early, we are
    very encouraged by the kind of benefits that industry is
    speaking about, and again, very pleased to say that this is a
    program that is on schedule.

                                   year 2000

        Turning just for a moment to the issue of Y2K, which is an
    issue that is on everybody's mind. We have renovated, as we had
    a chance to testify last week in front of Congress, 100 percent
    of the mission-critical computer systems. We did that by
    September 30. We are now validating and testing the upgrades
    and will finish and be compliant by March 31, 1999.
        I will note that this is a couple of months behind the OMB
    deadline, but we are working very closely with OMB. We really
    feel, because of the complexity of our systems, June 30 is a
    more appropriate date. OMB, we know, agrees with us. Again, all
    of our mission-critical systems will be Y2K compliant, will be
    operational by June 30, 1999, so we will be ready for the new
    millennium.
        In closing, Mr. Chairman, I have just one note, and that is
    that 1998 was an extraordinary year in aviation. As you may
    know, not a single fatality occurred aboard U.S. carriers, and
    I think that is a record to be proud of. One columnist
    described it as a triumph of brain power over gravity, but as
    wonderful as that record is, we know that there is a great deal
    that we still need to do. There is a great deal that we must do
    in order to maintain that extraordinary record.

                               prepared statement

        We also know that this committee has many challenges, and
    the FAA is only one piece of it. We look forward over these
    next few months and this next year to working with you to be
    sure that we have the resources that we need to do the job that
    we simply must do. Thank you very much, Mr. Chairman.
        [The statement follows:]

                      Prepared Statement of Jane F. Garvey

        Mr. Chairman and Members of the Subcommittee: Thank you for the
    opportunity to testify today in support of the FAA's budget request for
    fiscal year 2000.
        Let me begin by expressing my appreciation to you, Mr. Chairman,
    and the Members of this Committee for your strong support of the FAA
    and its important mission. Your support of the FAA's role in assuring
    and enhancing the safety, security, and efficiency of our nation's
    aviation system produced extremely beneficial personnel and procurement
    reform for our agency in 1995.
                                     safety
        I am pleased to report that for the first time in history, there
    were no passenger fatalities aboard U.S. air carriers and commuter
    airlines in 1998. One editorial writer characterized this achievement
    as a ``triumph of brainpower over gravity''. We want to continue that
    application of brainpower to reach our goal of reducing the fatal
    accident rate on U.S. airlines. I echo the Secretary's statement that
    safety is our top goal--our North Star--and our performance reflects
    the strength of this commitment. The fiscal year 2000 budget calls for
    $1 billion for aviation safety.
        Last year, the FAA in concert with the aviation community developed
    Safer Skies, a focused safety agenda. This is a data-driven approach to
    identify the leading causes of accidents and the interventions that can
    make the biggest difference in preventing them. We are working
    collaboratively with industry to develop and implement interventions
    for the operation and maintenance of commercial and general aviation,
    and for improved cabin safety.
        Let me mention a few examples. Historical data tells us that
    uncontained engine failure and controlled flight into terrain are a
    serious causal issue in commercial accidents. Since we announced the
    Safer Skies agenda, we have issued nine airworthiness directives on
    contained engine failures. We expect to have these as final rules in
    March 1999. We issued a Notice of Proposed Rulemaking on Terrain
    Awareness and Warning Systems. Many major airlines have already begun
    installing these systems and Boeing is putting the Enhanced Ground
    Proximity Warning System in its production lines. I'm pleased to
    announce the general aviation team is coming together and working
    through the challenges presented by such a large and diverse sector of
    aviation. In addition, we have seen significant progress in our cabin
    safety initiatives with the Partners in Cabin Safety. This group is
    focusing on carry on baggage, the Turbulence Happens public education
    campaign, and child restraints systems.
        Another one of my Safer Skies goals is preventing runway incursions
    and related surface incidents. This is accomplished through a Runway
    Safety Program with initiatives such as Certification Alert to Airport
    Operators, reducing runway crossings by vehicles and refresher training
    for controllers. Several awareness initiatives have been instituted
    including a monthly Runway Safety Program newsletter and mandated
    awareness training at all airports. Also being implemented are
    procedural initiatives; and improvements of airport signs, lighting and
    surface marking standards. In addition, we are using more sophisticated
    trend analysis to better identify and correct causal factors
    contributing to runway incursion incidents, and we are implementing new
    technologies. The Runway Safety Program is working closely with other
    government organizations, industry, and stakeholders in aggressively
    pursuing means to prevent or mitigate runway incursions and related
    surface incidents.
        Runway Incursion Action Teams, consisting of FAA and industry
    experts, are being convened at 20 airports with the highest number of
    runway incursion events. These 20 teams are directly attributable to
    the success at Cleveland-Hopkins International Airport, which had led
    the nation in runway incursions. Within 6 months, Cleveland's incursion
    rate had dropped to an all-time low.
        I'm very pleased that as we go forward with Safer Skies we will be
    demonstrating exactly what we had in mind when we proposed this focused
    and prioritized approach. This is that as we complete an item, we check
    it off, and then move on to the next priority item.
                                    security
        Following the report of the White House Commission on Aviation
    Safety and Security, Civil Aviation Security is now considered a
    national security issue. Recent specific threats by Middle Eastern
    terrorist organizations increase the priority accorded to this area.
        The budget request includes more than $300 million for aviation
    security. The FAA has taken and continues to take an aggressive
    approach to improve airport and air carrier security nationwide. This
    will be accomplished through new, focused rulemaking and security
    program changes, improving access control, reducing vulnerabilities to
    existing or new threats by deploying advanced explosive detection
    technologies, conducting joint FAA/FBI vulnerability assessments,
    performing realistic operational testing and special emphasis
    assessments, and deploying explosives detection canine teams.
        Recognizing that effectively combating terrorism is a vital
    national security goal, the federal government has funded the purchase
    and deployment of the world's best equipment to safeguard civil
    aviation, while our partners in this effort, the airlines, are
    responsible for the equipment's operation and maintenance. Congress
    provided $157 million for advance security equipment for fiscal years
    1997 and 1998, and an additional $100 million for fiscal year 1999 to
    continue deployment. We have requested a third installment of $100
    million in fiscal year 2000.
        We have been very effective in getting these systems up and
    running. Security equipment for checked baggage has been installed at
    over 30 airports while the trace explosive detectors for carry on bags
    are being used at more than 50 airports. The agency is working with
    airports and airlines to continue installations, and plans to buy and
    deploy even more equipment over the next few years. We will also be
    working with airlines and airports in a variety of ways to put in place
    an effective screener workforce.
        In 1999, 21 FAA/FBI threat and vulnerability assessments of
    airports are scheduled. The explosive detection canine team program
    grew from 87 teams at 26 airports in 1996 to 154 teams at 39 airports
    in 1998.
        In addition, the FAA continues to encourage security consortia that
    are formed in partnership with members of the local airport community.
    Over 110 airports have voluntarily formed consortia.
        We continue to expand the use of realistic operational testing of
    the aviation security system. We project 10,000 screening evaluations
    will be completed in fiscal year 1999 and in fiscal year 2000. In
    addition, approximately 4,200 dangerous goods assessments will be
    completed in fiscal year 1999 and 5,000 in fiscal year 2000.
                               system efficiency
        Modernizing the National Airspace System is one of our greatest
    opportunities to improve our nation's aviation system. It is also one
    of our greatest challenges. There are three elements of ATC
    modernization. The first element is sustaining our systems or renewing
    the infrastructure. The second element is additional safety features
    that address providing more precise, accurate, and timely weather
    information, which is so critical to safety of flight. The third
    element is enhancements that increase the capacity and efficiency of
    the system.
        For infrastructure renewal, a total of $2.3 billion is proposed for
    FAA's capital modernization programs in fiscal year 2000. We are making
    significant progress. Several major programs will be fully or nearly
    completed in fiscal year 2000. The Display System Replacement will be
    operational at all locations in 2000. The Host computer system will be
    replaced by October 1999. In fiscal year 1999 there were major system
    upgrades and improvements to the NAS. We completed final deployment of
    the Host and Oceanic Computer System Replacement (HOCSR) for Phase 1
    hardware and initiated Phase 2 software development in support of air
    traffic control operational requirements. Airport Surface Detection
    Radars will be installed at 34 airports and automated warnings software
    will be added in 2000. Also in fiscal year 2000, FAA will be purchasing
    24 out of 112 new terminal radars for conversion to digital output and
    50 out of 127 new beacon systems for air traffic control.
        We will begin implementation of several other major projects to
    increase safety in 2000. These include the Integrated Terminal Weather
    System and Weather and Radar Processor, which provides terminal area
    and en route weather information. Terminal Doppler Weather Radar began
    in 1994 and is in the final stages of implementation. In 1999, we have
    continued to support weather related programs, such as Next Generation
    Weather Radar, Terminal Doppler Weather Radar, ASR Weather System
    Processor and the Automated Surface Observing System. These systems
    will provide weather information to meet the needs of controllers,
    pilots and operators.
        With much of the older air traffic control equipment already
    replaced or planned for replacement, future programs will concentrate
    on new technologies and capabilities that address the third element of
    focus--increasing the capacity and efficiency of the ATC system. The
    Free Flight Phase 1 request for fiscal year 2000 begins to add new
    software automation tools to assist controllers in maximizing use of
    available capacity, improve efficiencies and collaborative decision
    making tools for reflecting user preferences in air traffic decisions.
    The success we have had with developing Free Flight Phase 1
    technologies will show that we can do what we say we will do. We have
    met the first Free Flight Phase 1 deadline--Surface Movement Advisor
    was delivered to Detroit and Philadelphia ahead of schedule. Initial
    reports from Northwest Airlines at Detroit are very positive. For
    example, Northwest Airlines was able to prevent five diversions due to
    low fuel as a result of the improved situational awareness provided by
    SMA.
        During fiscal year 1999 and fiscal year 2000 on-going upgrades to
    the air route traffic control centers and replacement of terminal air
    traffic control facilities are necessary to provide acceptable levels
    of air traffic control service to meet future operational requirements.
    These comprehensive modernization efforts will replace facilities that
    are 20-40 years old, as well as accommodate the installation of new
    equipment and provide environmental and security improvements.
        Before concluding my remarks on the NAS modernization, I would like
    to tell you where we are on our Y2K efforts. I have given this effort
    my highest priority. We completed renovations of all mission critical
    computer systems on September 30, 1998. We are validating and testing
    the upgrades and will have testing completed by March 31, 1999. Thanks
    to the dedication and hard work of employees in the field and in
    headquarters, all mission-critical systems will be year 2000 compliant
    and operational by June 30, 1999. We believe we will be ready for the
    new millennium.
                            fiscal year 2000 budget
        I have continued with vigilance to focus the agency on safety,
    security, and system efficiency and have structured the President's
    budget request for fiscal year 2000 accordingly. FAA's fiscal year 2000
    budget is $10.1 billion, a 4 percent increase over the fiscal year 1999
    level.
        For Operations, the Administration is seeking $6.0 billion. The
    funding will support 100 new field maintenance technicians, 20
    certification and rulemaking personnel, 10 medical staff, and 62 new
    security-related staff. In addition, the increase recognizes the need
    to bring on-line and make fully operational new safety and capacity air
    traffic equipment being delivered, and make critical infrastructure
    investments necessary to fully implement such initiatives as
    acquisition and personnel reform and a cost accounting system.
        The request for Facilities and Equipment is $2.3 billion. This
    request supports the FAA's comprehensive Capital Investment Plan to
    improve the NAS to accommodate increasing demands for aviation
    services, maximize operational efficiency, constrain costs, and replace
    or modernize aging facilities.
        For Research, Engineering and Development, the budget requests $173
    million. This request includes $16 million for the Safe Flight program.
    This program is a joint demonstration program designed to facilitate
    implementation of the Capstone Initiative in Alaska and the Automatic
    Dependent Surveillance Broadcast (ADS-B) evaluation work in the Ohio
    Valley.
        For Grants-in-Aid for Airports the fiscal year 2000 budget requests
    $1.6 billion, an 18 percent decrease from the fiscal year 1999 enacted
    level. Current law limits PFC's to $3. An estimated $1.4 billion in PFC
    revenues were collected in fiscal year 1998 at the existing $3 PFC cap.
    The FAA reauthorization bill proposes raising the cap to $5 and would
    collect over $900 million additional funds. PFC collections are
    projected between $1.4 billion and $1.5 billion in CY 1999 and 2000.
        In fiscal year 2000, the Administration proposes to fund the entire
    agency with a combination of current excise taxes and new user fees,
    and proposes the establishment of a Performance Based Organization
    (PBO) for air traffic services. This PBO is designed to make the FAA's
    air traffic control system both highly responsive to user needs and
    more accountable for good performance. It will be funded in part by
    $1.5 billion in new, cost-based user fees, which will be collected from
    commercial aviation flights that utilize the FAA's air traffic control
    services.
        The National Civil Aviation Review Commission recommended, and we
    agree, that ensuring a stable and adequate source of funding for FAA's
    important activities is critical to enable FAA to meet the challenges
    of the 21st century. Establishing user charges for air traffic services
    is a first step in that direction.
        As noted by the NCARC Commissioners, changing to a cost-based
    system is essential to the development of a more businesslike and more
    efficient air traffic system. Using such a system, in and of itself,
    will bring about a very significant management improvement. The
    questions that could be answered in a cost-based environment cannot be
    answered today. A cost-based system will better enable the safety,
    efficiency, and cost reduction performance of the organization to be
    measured and ultimately improved.
        The new user fees which we are proposing will be based upon the
    cost of providing air traffic services as determined by the agency's
    new cost accounting system, generally accepted accounting standards and
    international economic principles. We are making significant progress
    toward implementing the cost accounting system and will have the first
    cost information available this summer to support the previously
    authorized overflight fees. Furthermore, the information developed by
    the agency's cost accounting system will allow us to make better
    management decisions regarding the use of our financial resources. Cost
    accounting information will allow us to better control our costs and to
    help determine what services are needed, as well as where and how
    resources should be allocated.
        The implementation of a cost accounting system is but one step in
    increasing the FAA's financial integrity and credibility. Of equal, or
    perhaps greater, importance is the need for FAA to obtain a clean audit
    opinion on the agency's fiscal year 1999 Financial Statement so that we
    can be assured that our financial records accurately reflect our true
    financial status. To ensure success we established teams co-chaired by
    financial, program and the Office of the Inspector General staff along
    with regional airway facilities, logistics and accounting
    representatives. These teams are focusing in particular on properly
    capitalizing and documenting FAA's physical assets. The teams have
    instituted monthly reporting against assigned goals for all regions and
    have been meeting deadlines throughout this fiscal year. While a great
    deal of work remains to be done, we are confident of success.
        In conclusion, FAA is making serious attempts to address safety,
    security, capacity and efficiency challenges, and we believe our fiscal
    year 2000 budget request and our reauthorization proposals will further
    our progress on these fronts. In closing, Mr. Chairman, I would like to
    thank you and the Members of this Subcommittee for the support you have
    provided to the FAA. I would be pleased to respond to any questions you
    have at this time.

                                aviation safety

        Senator Shelby. Ms. Garvey, I want to congratulate you and
    the people at FAA for what you are doing for safety.
        Ms. Garvey. Thank you.
        Senator Shelby. You are absolutely right, when we board an
    airplane, that is the first thing and the last thing I think
    of, when I get on and we take off, and the next thing is, we
    land safely, right?
        Ms. Garvey. Thank you.

                                   year 2000

        Senator Shelby. I am glad to hear of your progress as far
    as the Y2K problem, because if you do not fix it before the
    date ends, we are in real trouble, are we not?
        Ms. Garvey. Thank you, Mr. Chairman.

                              budgetary firewalls

        Senator Shelby. Transportation has been an interesting
    budgetary journey this past year. In June 1998, the President
    signed the TEA-21 law that created budgetary firewalls for
    highway and transit spending. Last October, 4 months later, the
    Administration insisted on increased funding for the Access to
    Jobs program in addition to the funding included within the
    TEA-21 firewalls.
        Last month, 8 months after the President signed TEA-21 into
    law, the Administration submitted a budget that would divert
    funding from the highway firewall into the transit account, the
    rail account, and the NHTSA non-firewall account. Just last
    Thursday, the Secretary testified that he was going to send a
    budget amendment increasing the funding levels for motor
    carrier safety inspections. In addition, discrepancies in
    outlay scoring estimates between OMB and CBO with regard to the
    firewall accounts cost the discretionary caps over a billion
    dollars in outlays in fiscal year 2000.
        In light of the Administration's actions since the creation
    of the highway and transit firewall less than a year ago, Ms.
    Garvey, do you think that off-budget or firewall treatment for
    the FAA accounts is advisable?
        Ms. Garvey. Mr. Chairman, we have not proposed a firewall
    in the Administration's proposal for the FAA reauthorization.
    We do agree that it does cause some difficulties and have not
    proposed that.
        Senator Shelby. Will you aggressively and actively oppose
    the creation of a firewall for the Federal Aviation
    Administration?
        Ms. Garvey. Well, I know the Secretary, Mr. Chairman, says
    that we will continue to work with Congress, but our proposal,
    we think, is one that is at least worth considering and does
    not include the firewall.
        Senator Shelby. But you are not going to go quite that
    far--that last step. Will you aggressively and actively oppose
    the creation of the firewall?
        Ms. Garvey. We are opposed to it now, and I always defer,
    in the final analysis, to working with the Secretary and
    Congress.
        Senator Shelby. Okay.
        Ms. Garvey. We certainly do oppose it.

                             cost accounting system

        Senator Shelby. The cost accounting system. Your budget
    request envisions a user fee increase of $1.5 billion. During
    the week of March 7, DOT Inspector General, Ken Mead, testified
    before this committee that a reliable cost accounting system
    will not be fully implemented until 2001 or perhaps later.
        In addition, you recently testified that if FAA is to
    achieve the Administration's objective of funding the entire
    agency with a combination of current excise taxes and new user
    fees, including the establishment of a PBO for air traffic
    services, it needs a reliable cost accounting system.
        Now, given that a cost accounting system clearly will not
    be in place for fiscal year 2000, is it not premature to
    propose either new user fees or a PBO for air traffic services?
    Or is the user fee proposal simply a budget gimmick to present
    a higher FAA budget than the FAA budget priorities would allow?
    Would you explain that?
        Ms. Garvey. Well, Mr. Chairman, we have had many
    conversations with the Inspector General on this issue. I will
    tell you what we are doing. We have triaged, in a sense, the
    air traffic control services, and isolated those pieces that we
    think are achievable this year. We do think it is possible to
    have the data in place that would allow us to have a cost
    accounting system for both overflights and oceanic. The
    Inspector General is right, a fully developed cost accounting
    system is further into the future, but we think we will have
    part of it done during this year.
        We know it is a very aggressive schedule. Again, we are
    willing to work with you on this issue. It was the proposal
    that the Administration put forward. We are working very hard
    to at least have the overflight and oceanic piece in place for
    implementation this year, but it is, you are right, a very
    aggressive schedule.

                             impact of no user fees

        Senator Shelby. Would you present for the record what you
    would propose to cut from the FAA budget request, if Congress
    fails to approve the new user fees, or equally as likely, the
    FAA is unable to implement the new user fees in the time frame
    envisioned in the budget in question? Would you do that for the
    record?
        Ms. Garvey. Mr. Chairman, I certainly would have to tell
    you that might be the most difficult question I have been
    asked, because I really feel we have gone to the bone on this.
        I am asking people, to look at the base of our budget and
    to examine every possible area of the budget, even areas that
    we have not questioned in the past. I have to say, that
    absorbing $1.5 billion would be extraordinary. I am not quite
    sure. We would really have to go back to the drawing board and
    work on that very closely with you.
        Senator Shelby. But if you had to, you would have to.
        Ms. Garvey. If we have to, we would have to. I think I may
    have to start with my salary.
        [The information follows:]

        The FAA believes that user fees are the best means to meet its
    needs for the long-term financial stability while providing incentives
    for efficiency. Therefore, the FAA strongly urges Congress to enact the
    user fees proposed.

                                   user fees

        Senator Shelby. No, not yours. Maybe mine. If Congress does
    not act on these tax proposals, are you willing to assure us
    that this will be the last time that you submit a budget that
    proposes new or increased user fees?
        Ms. Garvey. Well, we certainly understand your concerns
    with that, and the Congress's concerns with it. I have to say
    that, of course, it will not just be the FAA's decision. It
    would be based on discussions with OMB and with the Secretary's
    office and the Administration, but I do understand your
    concerns.

                         performance based organization

        Senator Shelby. I understand that. For the past three years
    the Administration has proposed to transform the $12 million
    St. Lawrence Seaway Development Corporation into a performance-
    based organization, but even that modest proposition proved to
    be too ambitious to achieve. I am skeptical of the proposal to
    turn the air traffic control system into a performance-based
    organization, and seriously question the FAA's ability to
    manage such an organization, or to formulate and implement a
    structure of charges that are equitable and that can pass the
    inevitable legal challenges that will be brought.
        Given the difficulty the Administration has had with the
    St. Lawrence Seaway PBO proposal, would it not be more prudent
    to propose the organizational change in one fiscal year and
    financing structure in a subsequent year, rather than the
    unrealistic assumption that the user fees would be implemented
    in the same year as the organizational change? You follow me,
    do you not?
        Ms. Garvey. I do, Mr. Chairman, and I do think that that is
    an approach that is worth looking at. In fact, I will say that
    we are putting some of the organizational elements in place
    now. We are establishing performance measures. We are working,
    obviously, on the Cost Accounting System. We are working with
    industry to establish some metrics to measure, some of our
    successes. So I think you are absolutely right. Some of the
    organizational changes we can do, even separate from the
    financing, and, in fact, we are doing, and we will continue to
    do that.

                       legislation for airline passengers

        Senator Shelby. Americans are flying more and more, and at
    the same time that more and more Americans are flying, air
    fares have dropped and air traffic has become safer, as you
    just mentioned. The average price of an airline ticket has
    decreased approximately 33 percent in real terms since market
    forces replaced the whims of Federal bureaucrats in setting
    fares.
        The number of passengers flying domestic flights has more
    than doubled to approximately, as you know, $600 million
    annually. While deregulation of the airline industry overall
    has yielded the benefits that free markets promise, there are
    growing pains. As the number of passengers increases, so has
    the number of consumer complaints against air carriers. I
    believe we should reinvigorate competition in the air passenger
    market, even if the air carriers do not welcome it. I believe
    that we can also increase competition in the airline industry
    by providing the traveling public with more useful information,
    and by giving consumers ownership of the commodity they have
    purchased, their seat on an airplane.
        I recently introduced legislation that provides passengers
    with greater information about air fares and flights and with
    greater flexibility over unused or partially used fares.
    Further, if an air carrier offers a discounted fare, my bill
    permits all passengers to make a confirmed reservation at the
    same price for a 24-hour period. Whenever an airline passenger
    is unable to make a flight for which he or she has a confirmed
    seat, the passenger will have the opportunity to board a
    similar flight on a standby basis.
        Administrator Garvey, do you think steps like these are
    necessary to make sure the traveling public gets the
    information necessary to make informed traveling decisions and
    so that airlines have clear guidelines as to what constitutes
    their duty to inform passengers, and stand behind their
    transportation services?
        Ms. Garvey. Mr. Chairman, I have not had a chance to look
    at your bill in detail, but from what you have described and
    from the little bit I have read it sounds as though it does
    strike many of the same themes that the bill of the
    Administration has proposed as well.
        I know Secretary Slater has talked to us at some length
    about that. It sounds like disclosure and some of those scenes
    are very similar, so that is something the Administration has
    put forward. We, of course, at the FAA are under the
    jurisdiction of the Department of Transportation and we
    certainly would support the Secretary's bill, obviously.

                         wide area augmentation system

        Senator Shelby. The Johns Hopkins University, Applied
    Physics Laboratory, GPS risk assessment study reported that it
    is technically feasible for a WAAS/LAAS to be sole means and
    sole service if the following provisions are implemented: (1)
    an appropriate backup, (2) a redesign, and (3) an overall GPS
    plan. The report defines sole means to mean the only system
    installed in the aircraft, and their term sole service to mean
    the only navigation service provided by the FAA. Then the
    report concluded the need for a backup composed of a
    combination of avionics and air traffic control.
        This conclusion would seem to contradict the finding of
    sole means and sole service, but I guess this distinction is
    similar to parsing what the meaning of the word `is' is, as we
    know today. Clearly, it cannot be the position of the
    Administration that we should rely on WAAS as the only system
    without backup. Yet, dependence on a stand-alone system without
    a backup is not only imprudent, it is fundamentally unsafe. I
    note that a recent press article in the United Kingdom reported
    that a Russian scientist recently E-mailed Baghdad instructions
    on how to make a $200 GPS jammer.
        As soon as the FAA recognizes publicly that some backup
    will be required, then I believe you can take the next logical
    step to determine what the most effective and cost-effective
    overall system will look like. I urge you to stop looking at
    this issue as a program matter and to start looking at it as a
    question of how we best provide the necessary navigational
    capability and the reliability for our users in the most cost-
    effective manner. Without question, the navigation system of
    the future is satellite-based, I am told, but I am not
    convinced that it should be solely satellite-based or that it
    should even be the goal.
        I also note that in the Hopkins' study, they were not asked
    to consider whether the implementation of a sole means system
    was cost-effective.
        Administrator Garvey, FAA recently announced another
    significant delay in the WAAS program. Could you tell us where
    the WAAS program is right now? Please describe the current
    status of the program, the alternate approaches that are
    actively under consideration, and the strategy and time table
    for restructuring the program.
        Ms. Garvey. Yes, Mr. Chairman, and I will try.
        Senator Shelby. That was a long question, and Senator
    Lautenberg is going to get the answer, because I am going to go
    vote. You voted, did you not?
        Senator Lautenberg. No. It has not started.
        Senator Shelby. It has not started. Great news.
        Senator Lautenberg. Well, why do you not go ahead? Go
    ahead, Mr. Chairman. I will take care of this.

                         wide area augmentation system

        Senator Shelby. No. I just asked her a question.
        Ms. Garvey. I will answer it. I will address the WAAS
    question. As you indicated in your question, the schedule has
    slipped. Let me back up a bit, though, if I could. When we
    first talked about the WAAS several years ago, there was a much
    longer schedule. We took a calculated risk a few years ago and
    compressed the schedule; that is, the Agency, I was not there
    at the time, knew it was a risk. In fact, I know the
    Modernization Task Force last year, with good staff work from
    Mitre, had identified WAAS as one of those risk programs. We
    have had a schedule slip, due in large part, to software
    development, and again, not unusual in these very technical
    programs.
        We have restructured the program with a new date. The full
    commissioning is in September 2000, which I think we briefed
    the staff on. We have three very critical milestones as part of
    the restructuring. One is in April, where we get the first
    software deliverable. That will be followed by two other
    deliverables over the next several months. That is going to be
    very critical for us to understand how we are doing and what
    the software issues are. So we have restructured the program
    with a new time line.
        What is important with WAAS, from my perspective, is that
    both the industry and the FAA believe that this is the right
    thing to do. Pausing at the end of phase I, in the June and
    September time frame of 2000, gives us an opportunity to take a
    look at it, see where we are, make some risk assessments, and
    see where we go from here. So the general aviation community,
    the commercial aviation community, as well as some of our
    colleagues at Mitre and other places feel this is the right
    approach and the right thing to do.

                                   year 2000

        Senator Shelby. Ms. Garvey, would you reiterate, Senator
    Lautenberg was not here earlier, in front of a broader
    audience, the Y2K problem, and where you are at the moment,
    because a lot of people, not only in America, but everywhere,
    want to know where the FAA is and is going to be.
        Senator Lautenberg. Mr. Chairman, I questioned Ms. Garvey
    about that, because it is a matter of grave concern.
        Senator Shelby. Absolutely.
        Senator Lautenberg. As a matter of fact, I am going to
    Europe, and I am talking to the French Transport Ministry,
    because they are one place that we usually think about as being
    quite up to date in terms of computer technology, but they
    are--but I would like to hear what Ms. Garvey said. It bears
    repeating, I would think.
        Senator Shelby. I think repeating everywhere, and also
    meeting the deadline.
        Ms. Garvey. I think you are right, Mr. Chairman. Just very
    quickly, from the FAA's perspective, I think we have made very
    good progress after a late start. We met the deadline of
    September 30 for all of our systems to be renovated. Those
    systems will be tested and validated by March 31. Our deadline
    for full compliance of all of our systems, mission critical, as
    well as all of the other systems in the FAA, is June 30, 1999.
    That is a few months behind the OMB deadline, but we have
    worked very closely with OMB and with the IG, by the way, who
    joins us at our meetings every other week, and OMB is in
    agreement with the June 30 deadline. I will tell you, we are
    focusing a good deal of our energies these days on the
    international front, and also with our colleagues in the
    airports.

                        year 2000--international efforts

        Senator Shelby. Would you explain that just a little bit?
    It is a great cause for all of us. We might be up to date----
        Ms. Garvey. Absolutely.
        Senator Shelby (continuing). But if they are not up to
    date, we still have trouble, do we not?
        Ms. Garvey. Absolutely. On the international front we have
    an international office with a gentleman assigned to just the
    international efforts. He is in Montreal working very closely
    with ICAO and IAOTA, the two international organizations that
    deal with aviation issues.
        We know the top six countries that Americans travel to, and
    we are working closely in setting up work plans with them so
    that we know exactly how well they are doing. As a matter of
    fact, both the Secretary and I----
        Senator Shelby. Who are these top six countries?
        Ms. Garvey. I think I can do it. I am going to really try.
    I think I will get four of them.
        Senator Shelby. I am betting on you.
        Ms. Garvey. Do you want to do that?
        Senator Shelby. No. I am betting on you.
        Ms. Garvey. No. Do not do that, please. It is too much
    pressure. The United Kingdom, Japan, Canada, Mexico, the
    Dominican Republic, and the Bahamas. Is that not interesting?
    It is an interesting collection of countries. We have work
    plans with each one of those countries. Either the Secretary,
    Deputy Secretary or I have met with the heads of those
    countries, as well as others. The Secretary is in Europe this
    week, and that is one of his top agenda items. So we are
    working very closely with the international community.
        We also had great success in September. We went to Montreal
    and introduced two resolutions at an international forum, and
    one was that criteria would be established for Y2K compliance
    in January. That was through ICAO, by the way. The second
    resolution, even more critical, is that by June 30 all the
    countries would have to reveal what their status is on Y2K.
    Then at that point, during the summer months we will be working
    very closely with State to see if it is appropriate to issue
    information to Americans, and whether we want to issue any
    advisories to travelers at that point on specific countries.
        Senator Shelby. Who is doing their remedial work or
    corrective work, looking toward the year 2000? Different people
    all over the world?
        Ms. Garvey. Yes, Mr. Chairman. It really varies. Many
    countries are doing the same thing that we are, which is using
    our own technicians for the fixes, because those are really the
    men and women who have grown up with the system. They know it
    well and know it best.
        Senator Shelby. Okay. Senator Lautenberg.
        Senator Lautenberg. Yes. Mr. Chairman, since the vote has
    gone off, what I would like to do is just raise a concern here,
    and I do not know, Mr. Chairman, whether you are talking about
    coming back, or shall we submit the remaining questions for the
    record.
        Senator Shelby. Whatever you want to do.

                        statement of senator lautenberg

        Senator Lautenberg. I would like to just make mention of
    the budget resolution, which is due to be debated very soon,
    and the consequences of the plan, as laid down, for Function
    400, the Department of Transportation. It is $2.2 billion in
    outlays below the President's request.
        Now, if we focus on that number, $2.2 billion, that is the
    amount in outlays that this subcommittee will be expected to
    cut if this budget resolution survives. What will be our
    options when faced with the requirements to cut $2.2 billion in
    outlays? The President's budget and the majority of its budget
    resolutions claims to fully fund the highway and transit
    obligations dealings in TEA-21, authorized in TEA-21. Those,
    effectively, were guaranteed through the fire walls established
    in TEA-21, fully paid for with offsets from the highway bill.
    So to change them now would be a massive political effort.
        What with the highway and transit funding effectively off
    limits, where else can we go to get $2.2 billion in outlay
    cuts, Mr. Chairman? There are only three major areas of funding
    left in the transportation appropriations bill that have
    sizeable outlays to cut, FAA, Coast Guard, and Amtrak.
        Now, if we start with FAA, you could eliminate the entire
    Facilities and Equipment account within FAA. You can bring to a
    halt the entire effort to modernize our air traffic control
    system. You can cancel billions of dollars in existing
    contracts and say that we think it is acceptable for the FAA to
    monitor thousands of aircraft each hour using 30-year-old
    computers, held together with masking tape. If we eliminate
    every penny that the President has requested for the Facilities
    and Equipment, and the FAA, have we solved the $2.2 billion?
    Not close. We save only $700 million in outlays, less than a
    third of what we need. So if we keep going, if we eliminate the
    FAA's entire research budget, stop improving our understanding
    of aging aircraft, flammable materials, and airport security,
    we can save roughly another $100 million in outlays. That gets
    us $800 million in outlays.
        Now, we eliminate the entire airport grants program, and I
    am not talking about accepting the President's 18 percent cut
    in the program, I am talking about killing the entire program,
    nullifying all existing letters of intent and sending out not
    one additional dime for runway or terminal improvements, that
    would get us another $300 million in outlays. So we have
    eliminated every Federal investment dollar in aviation, and we
    have saved $1.1 billion in outlays, only half of what the
    budget resolution would require.
        Well, the Chairman and I both know that if we eliminate
    every investment in FAA, we should do the same for the Coast
    Guard. How much does that get us? Well, eliminating the Coast
    Guard's entire acquisitions budget, we save a good deal less
    than $100 million in outlays. That lets us service fifty-year-
    old ships, chugging along for another 10 years, lets the drug
    runners thumb their noses at us, and lets distress calls go
    unanswered, all for less than $100 million.
        So if you want to save the full $100 million in outlays, we
    can fire all 8,500 members of the Coast Guard Reserve, send
    them a thank you letter, tell them how much their services
    meant to us, but no longer needed. When we have the next major
    oil spill, or the next Desert Storm, we will just dial 911 and
    see what kind of response we will get.
        So with all of the measures I have outlined thus far we
    have saved a total of $1.2 billion in outlays, and if we turn
    to Amtrak, members will remember that last year we faced a
    proposal to zero out Amtrak. That proposal was not very popular
    with a great many members on both sides of the aisle. Two weeks
    ago we had Governor Thompson in here, of Wisconsin, Amtrak's
    board chairman, and he told our subcommittee that Amtrak needs
    every penny of the President's $571 million request in order to
    remain solvent. So when we do that we save another $200
    million.
        Well, I point out this grim scenario, Mr. Chairman, I ask
    permission that the full statement, with unanimous consent, be
    included in the record.
        Senator Shelby. Without objection, it will be in the
    record.
        [The statement follows:]

                    Prepared Statement of Senator Lautenberg

        Mr. Chairman, I will only be able to spend a very brief period at
    this afternoon's hearing since I'm required to be on the floor to
    manage the budget resolution on behalf of the Minority. This past
    Thursday, the Senate Budget Committee reported a budget resolution by a
    party line vote. At that time, I said that the resolution proposes
    extreme and unrealistic cuts in domestic programs across the entire
    government that would devastate public services if enacted. That
    observation is made painfully clear when you look at the budget
    resolution's assumptions just for this subcommittee. Indeed, the
    resolution assumes cuts to the Transportation Department's budget that
    would devastate our efforts to improve safety and accommodate increased
    traffic in all transportation modes, especially aviation. This is not
    just a reckless claim on my part.
        Let's look at the arithmetic. The budget resolution that we will
    debate on the floor this afternoon stipulates a level of funding for
    function 400--the transportation function--that is a full $2.2 billion
    in outlays below the President's request. Remember that number--$2.2
    billion. That is the amount in outlays that this subcommittee will be
    expected to cut if this budget resolution survives.
        What will be our options when faced with the requirement to cut
    $2.2 billion in outlays? Both the President's budget and the majority's
    budget resolution claims to fully fund the Highway and Transit
    obligation ceilings authorized in TEA-21. Those increased funding
    levels were effectively guaranteed through the firewalls established in
    TEA-21. They were fully paid for with offsets in the highway bill. To
    change them now would not only require a massive political reversal by
    the Congress, it would require the enactment of a new highway bill.
    With highway and transit funding effectively off limits, where else can
    we go to get $2.2 billion in outlay cuts? There are only three major
    areas of funding left in the Transportation Appropriations bill that
    have sizeable outlays to cut. They are the Federal Aviation
    Administration, the Coast Guard, and Amtrak.
        Starting with the FAA, you can eliminate the entire Facilities and
    Equipment account within the FAA. You can bring to a halt the entire
    effort to modernize our air traffic control system. You can cancel
    billions of dollars in existing contracts and say that we think it is
    acceptable for the FAA to monitor thousands of aircraft each hour using
    30-year-old computers held together with masking tape. If we eliminate
    every penny the president has requested for Facilities and Equipment in
    the FAA, have we solved our $2.2 billion problem? Not even close! We
    save only $700 million in outlays, less than a third of what we need.
    So let's keep going. If we eliminate the FAA's entire research budget--
    stop improving our understanding of aging aircraft, flammable
    materials, and airport security--we can save roughly another $100
    million in outlays. That gets us $800 million. Now let's eliminate the
    entire Airport Grants Program. I'm not talking about accepting the
    President's 18 percent cut in the program, I am talking about killing
    the entire program, nullifying all existing letters of intent and
    sending out not one additional dime for runway or terminal
    improvements. That gets you another $300 million in outlays. So now we
    have eliminated every federal investment dollar in aviation and we have
    saved $1.1 billion in outlays--only half of what the budget resolution
    would require.
        So let's keep going. In the interest of fairness, I suppose, if we
    eliminate every investment dollar in the FAA, we should do the same for
    the Coast Guard. How much does that get us? Well, if you eliminate the
    Coast Guard's entire acquisitions budget, you save a good bit less than
    $100 million in outlays. Cancel every shipbuilding contract, let the
    service's fifty-year-old ships chug along for another 10 years, let the
    drug runners thumb their nose at us, and let distress calls go
    unanswered--all for less than $100 million in outlays. If you want to
    save the full $100 million in outlays, you can fire all 8,500 members
    of the Coast Guard Reserve. Just send them a thank you letter and say
    their services are no longer needed. When we have the next major oil
    spill or the next Desert Storm, we will just dial 9-1-1 and see who's
    around to lend a hand. So with all the measures I have outlined thus
    far, we have saved a total of $1.2 billion in outlays.
        Now let's turn to Amtrak. Members will remember that, last year, we
    faced a proposal to zero out Amtrak. That proposal was not very popular
    with a great many members on both sides of the aisle. Two weeks ago,
    Governor Thompson of Wisconsin, Amtrak's Board Chairman, told our
    subcommittee that Amtrak will need every penny of the President's $571
    million request in order to remain solvent next year. Let's say that
    this year, things are different, and the votes are there to eliminate
    Amtrak. When we do that, we only save an additional $200 million in
    outlays. What happens when we eliminate Amtrak? We basically paralyze
    intercity transportation throughout the entire Northeastern United
    States. We put an unmanageable burden on our already congested airspace
    throughout the Northeast. The increased air traffic delays in the
    Northeast will trigger additional delays throughout the nation.
        But with Amtrak in bankruptcy, we can now bring our total outlay
    savings to $1.4 billion--less than two thirds of the way toward our
    goal of $2.2 billion in outlay cuts as required by the budget
    resolution. Where are we supposed to find the remaining $800 million in
    outlay cuts? There are only two sources left--the FAA and Coast Guard
    operating budgets. Those two budgets, combined, equal only about $7.5
    billion in outlays. So, in order to meet the outlay target included in
    the budget resolution, we would have to cut FAA and Coast Guard
    operating budgets by at least 11 percent. That means firing a slew of
    air traffic controllers and aircraft inspectors. It means closing
    search and rescue stations and tying up Coast Guard ships. It means
    abandoning our efforts at drug interdiction and focusing our Coast
    Guard assets only on search and rescue and the most immediate domestic
    needs. That is our last and final option to get outlay cuts totaling
    $2.2 billion. And if you don't want to take any of those steps that I
    mentioned earlier--eliminating Amtrak, the Coast Guard Reserve, the
    Airport Grants Program--every procurement dollar in the FAA and Coast
    Guard, well then the cut to the FAA and Coast Guard operating budgets
    must grow well beyond 11 percent, perhaps as high as 20 percent or 25
    percent.
        Now, Mr. Chairman, I said last week that the cuts contained in the
    budget resolution are draconian and extreme. They are not realistic,
    and when it comes time to cutting specific programs, Congress just
    isn't going to do it. The votes will not be there. I have served on
    this subcommittee a long time, both as the Chairman and Ranking Member,
    and I know that no Member of this subcommittee wants to even slow down,
    much less eliminate, our efforts to modernize our air traffic control
    system. Just three weeks ago, this subcommittee held a hearing with
    Secretary Slater on the President's transportation budget. When we
    turned our attention to the President's proposals for aviation, members
    from both sides of the aisle complained about the Administration's
    proposal to impose new user fees and reduce funding for the Airport
    Improvement Program.
        What I find to be absolutely incredible is that some of these same
    members who complained openly about the President's proposal to reduce
    AIP funding next year actually voted for the majority's budget
    resolution last Thursday. And still more members, I fear, might vote
    for it on the floor.
        Who are we kidding here with this budget resolution? When it comes
    to the unrealistic cuts assumed for the entire federal budget, this
    budget resolution is a recipe for governmental gridlock. And when it
    comes to our national Transportation budget, this budget resolution is
    a recipe for ``winglock'' on our runways. The votes don't exist on this
    subcommittee to cut the transportation budget $2.2 billion in outlays.
    I invite all members of the subcommittee to do the arithmetic
    themselves. Some members may not want to face these fiscal realities
    today, but they will have to face them in the very near future. It is
    my hope, and I believe it should be the hope of all members of this
    subcommittee, that this budget resolution never really sees the light
    of day. I know the members of this subcommittee well enough to know
    that they all want to pass a responsible transportation budget that
    moves our national transportation enterprise forward, not backward.
        Thank you, Mr. Chairman.
        How Can You Cut $2.2 Billion in Outlays from President Clinton's
    Transportation Budget?
        Here's the Simple Arithmetic:

                            [In billions of dollars]
    ------------------------------------------------------------------------
                                                          Fiscal year 2000
                                                       ---------------------
                                                         Budget/
                                                         contract   Outlays
                                                        authority
    ------------------------------------------------------------------------
    Fully Fund Highway and Transit Guarantees in TEA-   .........  .........
     21 as promised in Budget Resolution..............
    Eliminate FAA Facilities & Equipment..............       -2.3       -0.7
    Eliminate FAA Research............................       -0.1       -0.1
    Eliminate FAA Airport Grants (AIP)................       -1.6       -0.3
    Eliminate All Coast Guard Acquisitions & the Coast       -0.4       -0.1
     Guard Reserve....................................
    Eliminate AMTRAK..................................       -0.6       -0.2
    Reduce Coast Guard & FAA Operations by 11 percent.       -0.9       -0.8
                                                       ---------------------
          Total.......................................       -5.9       -2.2

    ------------------------------------------------------------------------
    Note: Figures assume CBO Scorekeeping as required by Budget Act

                             transportation budget

        Senator Lautenberg. We have our work to do, and we have to
    work hard to protect not FAA, but the traveling public in this
    country. We have to work hard to make sure that we are
    functioning when it comes to this year-end and the beginning of
    the new millennium.
        We have to really work hard to make sure that we can say to
    everybody who gets on an airplane, your children, my children,
    grandchildren, all our children, that you are going to be safe,
    that we have done the utmost we can to protect you from
    terrorist assaults on aircraft, which is not going to happen,
    Mr. Chairman, and I know how deeply you feel about the
    transportation program, because we share that.
        When I was chairman, when you were with me, we always
    worked very hard on trying to make sure that the transportation
    would get as much as it could, because we believe in the
    program that we see.
        So Mr. Chairman, I will submit my questions for the record,
    but I wanted to make sure the record reflects my concern about
    the transportation budget, and some other budgets within some
    other program budgets within our government's functioning. We
    are going to have a very tough debate, but I hope we will be
    able to figure out a way to keep us all going.
        Senator Shelby. Thank you, Senator Lautenberg.
        Senator Campbell, you voted, I understand.
        Senator Campbell. Yes, I sure did, Mr. Chairman.
        Senator Shelby. We haven't voted yet.
        Senator Campbell. Do you want me to cover for you?
        Senator Shelby. Yes, we would, and you will do a great job.
        Senator Campbell. I will be glad to, and if there is no
    objection----
        Senator Shelby. We will come back, because I have some
    other questions for you.
        Senator Campbell [presiding]. I will submit my statement
    for the record, too, Mr. Chairman.
        It looks like you will just be talking to me for a few
    minutes, Ms. Garvey----
        Ms. Garvey. Thank you, Senator.
        Senator Campbell [continuing]. So why do you not go ahead?
        Ms. Garvey. Well, I actually finished my opening statement,
    but I would be happy to give it again.
        Senator Campbell. You finished it already.
        Ms. Garvey. Yes. I am sorry.

                          airport improvement program

        Senator Campbell. Well, frankly, I have been in three or
    four other things and have not been here to hear what the
    Chairman said. Let me maybe ask a few questions on his behalf
    while he is gone. These are his, and I will just sort of act
    like a trained parrot here and ask them to you.
        The House recently passed a 6-month extension of the
    Airport Improvement Program. The Senate recently passed a 2-
    month extension, and the Senate version of the emergency
    supplemental also contains a 2-month extension. So one way or
    the other it appears the Airport Improvement Program is good
    for at least 2 more months. What are the difficulties and
    problems with failing to provide a longer-term reauthorization
    with this program.
        Ms. Garvey. Well, Senator, I think you have really hit at
    the heart of something that we have spent a lot of time talking
    about lately. That is, how can we keep the construction program
    going for the airports? I met yesterday with many of the
    airport directors who are in town, and they are deeply
    concerned about it. The 2-month extension, I think they are
    relieved to have it continue for at least a limited period of
    time, but I know they are very concerned long term,
    particularly, for those airports where the construction season
    is so critical and so important.
        Sometimes it is a very short construction season, you know,
    like Alaska and some of the northeast states as well. We have
    very short construction seasons, and I think they are deeply
    concerned about it. They appreciate Congress' efforts on this
    behalf, but it is something we are concerned about.
        Senator Campbell. Well, we have a longer construction
    season in Colorado than they have in Alaska, but I know when
    DIA was being developed that was one of the problems not
    knowing that they were on solid ground when you signed your
    contracts.
        Ms. Garvey. Always an issue.

                                  age 60 rule

        Senator Campbell. The age 60 rule was instituted in 1959
    without the benefit of medical or scientific studies or without
    any public comment. The EOC has essentially eliminated age
    discrimination rules in all facets of commercial aviation with
    the exception of Part 21 and Part 135 carriers.
        Other countries, Great Britain, Germany, France, Australia,
    and a number of others, have modified their age 60
    restrictions. Japan began a study on the age 60 issue and
    discontinued it after finding no safety or operational reasons
    to maintain age 60 as a mandatory retirement age.
        The most recent pilot aging study was the Hilton System's
    technical report number 8025, known generally as the Hilton
    Study, undertaken by Lehigh University and the Hilton systems,
    to conduct statistical analysis on historical data to
    investigate the relationship between pilot age and accident
    rates, and that report concluded that they saw no hint of an
    increase in accident rates for pilots of scheduled air carriers
    as they neared their 60th birthday.
        But in spite of the study, the Age 60 rule not only remains
    in effect, it was expanded in 1995 to include Part 135 pilots,
    in spite of no record of any age-related accidents or incidents
    in the affected pilot group.
        Can you provide any medical or scientific reason why the
    United States should not follow the findings of the Hilton, and
    perhaps increase the age to 63 or more?
        Ms. Garvey. We have followed the ICAO standards, the
    international standards. One of the dilemmas we have had, but
    certainly we will go back and look at it again, is the whole
    issue of a medical protocol. While the data may not be there,
    understanding the effects that aging has on individuals beyond
    30, it has been difficult to get. We will go back and look at
    it, and perhaps talk with staff a little bit more about the
    medical protocol issue.
        Senator Campbell. Can you give us something in writing----
        Ms. Garvey. We will, certainly, yes.
        Senator Campbell [continuing]. Something for the record? I
    might tell you that I personally got involved with that
    question some years ago. I used to fly, and some pilots came to
    me to seek support on increasing the age, and I wrote a letter
    on their behalf that I thought sounded okay to me, and
    immediately got cross waves with a bunch of younger pilots. It
    seemed to me at the time, this whole question was not driven by
    physical health as much it was driven by the guys on the right
    seat want to get to the left seat. Obviously, when you have a
    limited number of captain's seats open, the way to get over
    there is to have some of the other ones retire early. I would
    hate to see that that is still the driving force. So if you
    could give us something in writing I would appreciate that.
        [The information follows:]

        FAA promulgated the age 60 rule in 1959 because of concerns that a
    hazard to safety was presented by utilizing aging pilots in air carrier
    operations. At that time, the agency found that there was a progressive
    deterioration of certain important physiological and psychological
    functions with age, that significant medical defects attributable to
    this degenerative process occur at an increasing rate as age increases,
    and that sudden incapacity due to such medical defects becomes more
    frequent in any group reaching age 60.
        The FAA noted that other factors, even less susceptible to precise
    measurement as to their effect, but which must be considered in
    connection with safety in flight, result simply from aging alone and
    are, with some variations, applicable to all individuals. These relate
    to loss of ability to perform highly skilled tasks rapidly; to resist
    fatigue; to maintain physical stamina; to perform effectively in a
    complex and stressful environment; to apply experience, judgment and
    reasoning rapidly in new, changing, and emergency situations; and to
    learn new techniques, skills, and procedures.
        Clearly, there is progressive anatomic, physiological, and
    cognitive decline associated with aging, albeit variable in severity
    and onset among individuals. Physicians, psychologists, physiologists,
    and scientists of other disciplines have identified many age-associated
    variables, some easily measurable, some not that may be important to
    human function. There is, however, no acceptable medical protocol to
    measure the effects of aging on a particular individual.
        Because it is unacceptable for these pilots to work until failure
    or until there is obvious impairment, the age of 60 has served well as
    a regulatory limit since 1959. While science does not dictate the age
    of 60, that age is within the age range during which sharp increases in
    disease mortality and morbidity occur.
        In late 1990, FAA initiated its most recent study of the issue,
    aimed at consolidating available accident data and correlating it with
    the amount of flying by pilots as a function of their age. This
    resulted in the march 1993 Hilton study report, ``age 60 project,
    consolidated database experiments, final report'', which found ``no
    hint of an increase in accident rate for pilots of scheduled air
    carriers as they neared their 60th birthday'' but noted that there were
    no data available on scheduled air carrier pilots beyond age 60.
        The FAA rule is consistent with the international standard
    established by ICAO, which prohibits anyone over the age of 60 from
    acting as pilot-in-command.

                standard terminal automation replacement system

        Senator Campbell. In addition to the difficulties that the
    FAA has encountered with the WAAS program, the Agency also has
    struggled with the STARS procurement. Would you comment on how
    closely you are on resolving all of the human factors and
    related issues on the STARS procurement?
        Ms. Garvey. Senator, I think we have made tremendous
    progress in the last several weeks. We have, and I said this
    recently in the House side for our budget hearings, I do not
    think I could ask more either from the controllers or from the
    program managers. They are working really hard on this issue. I
    actually think we have captured the human factors issues. We
    know what they are.
        It is really a question now of resolving some of the
    software issues associated with it. So I think we are very
    close to a resolution, and both the controllers and the program
    managers deserve a lot of credit for working literally 24 hours
    a day on it. I certainly hope that we are going to be able to
    talk about a very specific strategy to you within the next
    week.
        Senator Campbell. Okay. Thank you. Let me continue on for
    Senator Shelby with a couple more questions here. Second, does
    the FAA have a firm plan and schedule for the implementation?
    You told me that it would be a few weeks.
        Ms. Garvey. Probably within a week we will have a good
    sense of the strategy that we are going to follow and whether
    or not we will have a firm schedule at that point. We may need
    a little more time, but we need to understand quite clearly
    what our strategy will be.
        Senator Campbell. Could you comment on the early display
    capability? Is the implementation of it timely to solve the
    operational problems at Reagan National, and New York?
        Ms. Garvey. Senator, we had a schedule to get the early
    display into Washington in March. We are not going to make
    that. We have talked with the controllers and also with some
    members of Congress, who are particularly interested. On a
    positive note, however, when the issue came up about a year
    ago, we identified some problems with radar and communication.
    Those have been fixed. We put about $60 million into National,
    and we have reduced the outages by about 30 percent. We think
    that has been a big improvement, and I know the members of
    Congress have appreciated that, and frankly, the controllers
    and traveling public have appreciated that as well.
        In terms of the immediate issue, I think we have been able
    to deal with National pretty successfully.

                              commuter air service

        Senator Campbell. Let me turn to some issues that are in
    the Western states a little more. Some of us, including me, for
    a number of years, ever since I have been here, I have had to
    fly commuters to get to Denver to be able to come back here. We
    have had our share of commuter problems, small-commuter service
    problems. Much of our air service was provided by one carrier
    for a long time. There was almost nobody else who could fly.
        Boy, I want to tell you, I have been on those planes when
    the pilot that got on the plane said he did not know how to fly
    the plane. If you could imagine that. That actually happened to
    me one time. I have been on them when the wheels would not come
    down. I have been on them when they forgot to fuel them up, and
    they had to land again, because somebody forgot to fuel it.
    Unbelievable. I mean things you would not expect to happen in
    this century in airlines.
        That somewhat has been cleared up, because that particular
    carrier, they lost their contract as a commuter with United,
    and now there are other carriers, and they are doing much
    better. But the rural areas, as you might guess, are always
    worried that they have no service--because there is very little
    competition.
        One carrier comes in, and they are often not very
    sensitive. As an example, when that happens, when there is only
    one carrier, you find that the costs go up very quickly.
        My son flew from the little town of Durango to London, and
    it cost him more to go from Durango to Denver and back than it
    did Denver to London and back to Denver a couple of years ago
    when there was only one carrier. I would like to know, what is
    the FAA doing to help those small rural areas.
        I know there are some things you cannot do--if you really
    believe in the free enterprise system, you are kind of--it is a
    tough question, but would you comment on that?
        Ms. Garvey. I will speak for the Administration. From the
    FAA's perspective, we have focused, obviously, on safety. The
    competition pieces, the economic pieces really come out of the
    Secretary's office; however, as you may know, the Secretary of
    Transportation, the Administration, has proposed a competition
    policy to try to deal with some of those very issues that you
    have talked about. It has been controversial.
        There have been lots of opinions expressed on the
    competition policy, as I understand it. The Administration or
    the Secretary's office is in the process now of reviewing all
    of those comments and should be issuing something. Let me get
    you the time frame, but I think it is in the next few months.
        From the FAA's perspective, what we have tried to do, and I
    think it is reflected pretty well in our proposal, is capture
    some of the AIP dollars for some of the smaller and more rural
    airports. They are really the ones who need those Federal
    dollars so desperately. So part of our proposal is to allow
    some of the larger airports to raise PFCs, but their
    entitlement money would then be targeted back to the smaller
    and mid-size airports. So we know that is a real issue, and are
    working very hard through our reauthorization proposal to try
    to do what we can to really improve the access for some of
    those small and mid-size airports. I know your point is well
    taken, and something the Secretary feels strongly about.
        [The information follows:]

        Congress directed the National Academy of Sciences to study the
    issue of domestic airline competition. That study should be completed
    this spring. The Department will issue final competition guidelines
    following the release of that report and the Department's report to
    Congress on unfair competition and predatory pricing.

                              commuter air service

        Senator Campbell. Obviously, also, it is not in your
    purview, but coming from a Western state, like many of us do,
    our industries rely a great deal on tourism, particularly,
    skiing in the winter, and more and more we are hearing of
    people who do not want to go to the big airports and then have
    to take a commuter bus, or a train, or something, but they want
    to fly directly into the small airports, and that always brings
    up the problem of how we finance the ILS and the things that
    are required to be able to get them down.

                          denver international airport

        Let me just speak about the Denver International Airport
    noise study. Are you aware of that and understand it some?
        Ms. Garvey. I am familiar with it.
        Senator Campbell. In recent years we have attached language
    to the Transportation Approps bill prohibiting the FAA from
    funding the DIA sixth runway. A large reason was Congressman
    Hefley, who is a friend of mine on the House side. He was
    opposed to it based on noise problems, and we have kind of a
    divided community out there in Denver, with one county, Adams
    County, that is just really angry and opposed to a sixth
    runway, because they have not reached any kind of an agreement
    on noise study.
        Anyway, last year we did not particularly want the language
    in the bill, so it was not included, but Representative Hefley
    did include the language in the House bill, and asked the FAA
    to work with the local groups to identify measures that would
    reduce the noise problems, and that conference report did not
    strike the language, so the language stayed in effect, that
    language I put in.
        So last year's Transportation appropriation's conference
    report language in the House bill regarding noise mitigation
    over Denver International Airport, it instructed the FAA to
    work with the local groups, and I would just like you to
    comment on what steps you have taken to work with those groups.
        Ms. Garvey. I know that the regional office and some of the
    individuals in our airports' office have been very involved in
    that. I know there have been a series of meetings that have
    taken place. Let me get back to you with a little bit more
    specifics, but I must say, the noise issue you are experiencing
    in Colorado is something we see in many places. It is a very
    difficult issue, and you try so hard to work with the
    neighbors, because we have to be good neighbors as well, but it
    is often very difficult. But let me get back to you, if I
    could, with some of the specifics, most recent steps that have
    been taken.
        Senator Campbell. Do you need me to submit that in writing,
    or can you remember that one?
        Ms. Garvey. I can remember that one.
        Senator Campbell. Okay.
        Ms. Garvey. I will be sure to remember that, Senator.
        [The information follows:]

        On December 8, 1998, representatives from the FAA met with the
    Mayor's Office, an attorney from the City and County of Denver, and
    representatives of Denver Airport to discuss airspace redesign in the
    Denver area, based on the construction of a new runway at Denver
    International Airport. The FAA agreed with the Denver representatives
    to work closely with them as progress on the construction of the runway
    occurs and as noise mitigation strategies are developed. FAA also
    agreed to work closely with them in order to ensure that air traffic
    procedures are designed to take advantage of additional airport
    capacity resulting from the new runway. There was an agreement that
    Denver will contact the FAA as their work progresses. No other meetings
    have been scheduled.

                               centennial airport

        Senator Campbell. Okay. A couple of months ago the
    Associate Administrator for Airports ruled that Centennial
    Airport, which is south of Denver, cannot apply for Federal
    funds, because the airport board recently voted to prohibit
    scheduled commercial service.
        The airport will lose, according to them, about $1.5
    million every year in Federal assistance. How many general
    aviation airports across the country have been denied scheduled
    commuter service?
        Ms. Garvey. I would have to get back to you, Senator, for
    the record, with that number.
        Senator Campbell. How about the funds, how many have been
    denied funds for----
        Ms. Garvey. I do not know of any, but let me get back and
    double-check. I want to make sure I am accurate for the record,
    Senator.
        [The information follows:]

        The only GA airport where we have recently withheld new
    discretionary grants is Centennial Airport, Colorado. The airport was
    the subject of a Part 16 complaint challenging the Arapahoe County
    Airport Authority's ban on scheduled commuter service. Although we have
    identified no other GA airports to have discretionary funds formally
    withheld besides Centennial, the situation is the result of the airport
    sponsor's decision not to come into compliance, not the result of any
    unusual action on the part of the FAA.
        On the basis of a recent Part 16 determination on Centennial
    Airport, the sponsor is not eligible for new airport improvement
    program grants. While the FAA could have withheld payments on existing
    grants, the determination specifically allowed a grant issued September
    23, 1997 to support the Part 150-noise study to continue. The study is
    just getting started, with technical meetings held in February, 1999.
        There have been a number of compliance issues at other GA airports,
    for example Boca Raton FL, and Groton CT, but the issues were resolved
    before the process reached the stage of formally withholding
    discretionary grants or the airport operator elected not to apply for
    future grants.
        There can be informal withholding or suspension of new
    discretionary grants during the period of informal resolution or
    investigation under Part 16. Often, this practice provides sufficient
    inducement for GA airport sponsors to come into compliance without
    formal process. Accordingly, there have been instances where
    discretionary grants to GA airports were delayed while compliance
    issues were being resolved, but we have no record of these occurrences
    as the process was concluded prior to the need to do a formal denial of
    the grant. Again, Centennial Airport was different because the airport
    operator refused to come into compliance and the new Part 16 procedures
    resulted in a relatively quick formal agency decision.

                       noise study at centennial airport

        Senator Campbell. Are you also working on a noise study at
    Centennial?
        Ms. Garvey. I believe we are working on a noise study at
    Centennial.
        Senator Campbell. Is it ongoing, too?
        Ms. Garvey. Let me get, Senator, the actual schedule for
    you.
        [The information follows:]

        A grant was issued on September 23, 1997 to support the Part 150-
    noise study to continue. The study is just getting started, with
    technical meetings held in February 1999.

                                mitchell airport

        Senator Campbell. Okay. Let me skip around here a little
    bit. Maybe, I will tell you, I do not want to dominate all the
    time here when I am sort of just filling in for the Chairman.
        But, Senator Kohl, did you have some questions that you
    would like to ask?
        Senator Kohl. Yes. Thank you.
        Ms. Garvey. Good afternoon, Senator.

                          mitchell airport, wisconsin

        Senator Kohl. Good afternoon, Administrator Garvey. I have
    two questions. First, as you know, we have been in contact with
    your office regarding the approach lighting system at Mitchell
    Airport in Milwaukee.
        It has been in line for replacement now for a number of
    years, but the FAA has delayed replacement a number of times,
    and has used a piecemeal repair approach on the existing
    equipment. The system failures have become more frequent,
    including three blackouts in 6 weeks.
        Now, I know we agree that this situation is serious, with
    major safety implications for the traveling public, and
    yesterday, happily we were informed that testing on a new
    system would be completed by June of this year, and that the
    new system would be in place at Mitchell Airport by the fall.
        Your staff has been very helpful in recent weeks, but for
    me it is still important to be clear for the record with you
    that Milwaukee will, indeed, have a new and a fully operational
    ALS system by this fall. Can you hopefully respond
    categorically?
        Ms. Garvey. Categorically, yes. I know how important this
    issue has been. I am delighted that it is fixed for the time
    being, but I agree with you, the long-term fix and the
    permanent fix is what we must focus on, and we are. We were
    delighted to put that schedule together and to get that
    information to you.
        Senator Kohl. I do appreciate that.
        Ms. Garvey [continuing]. But absolutely yes.
        Senator Kohl. The folks in Milwaukee would be very pleased.
        Ms. Garvey. Senator, I spent part of my childhood in
    Milwaukee, and I am familiar with that area, so I know it well.

               outagamie county airport air traffic control tower

        Senator Kohl. Okay. The second question: Administrator
    Garvey, let me begin by saying that there is a lot of support
    for the air traffic contract control tower operation in
    Wisconsin, but there has also been some concerns that I believe
    demand some immediate attention.
        As you know, since 1995, at the contract control tower at
    Outagamie County Airport in Appleton, Wisconsin, those
    operations have been contracted out to a private company, but
    overseen by the FAA, and the airport management and county
    government have been greatly concerned, the controller staff
    has been reduced from eight to five, there has been staff
    turnover, and there have been some communication problems.
    There have also been incidents where planes have been cleared
    for landing, while snow removal equipment was still on the
    runway.
        So I would like to know what steps you and your office are
    taking to make sure that the Outagamie County control tower is
    run as it should be, that the concerns of the airport
    management and the county are addressed, and what oversight
    procedures are in place at this airport and at other airports
    so we do not have the same situations.
        Ms. Garvey. Senator, let me say that I appreciate you
    bringing these issues to our attention. On behalf of the
    airport director we appreciate hearing that. We are going to
    take an intensive review of both the staffing, the
    communication issues that you mentioned, and make some
    assessments.
        I think this program is important. I think it can be very
    helpful, but you are absolutely right, the FAA has the
    oversight, the ultimate oversight. We must make sure that in
    the contract program that it is being run well, and that it is
    providing the same level of safety. We will provide that review
    to you and your office, and also to the airport director. We
    will be very happy to work with you on that review as well.
        Senator Kohl. That is great. She will be very pleased to
    hear that----
        Ms. Garvey. Thank you.
        Senator Kohl [continuing]. I am very pleased to hear you
    say that.
        Ms. Garvey. Thank you, Senator.
        Senator Kohl. I thank you.
        Ms. Garvey. Thank you.
        Senator Campbell. Are you finished, Senator Kohl?
        Senator Kohl. Thank you.
        Ms. Garvey. Thank you, Senator.
        Senator Campbell. I am going to ask maybe a final question.
    Did you have a statement, Senator Bennett, or any comments?
        Senator Bennett. I do not, but I will have some questions.
    Why do you not ask yours.

                          colorado airspace initiative

        Senator Campbell. Okay. Well, I just had one more, and you
    may also have to get back to me on this one, too. The Colorado
    Air Space Initiative is an issue of great interest. The
    Colorado National Guard first announced plans to redesign its
    military air space in 1990, and as you probably know, the
    Colorado Air Space Initiative would provide for the expanded
    use of military training routes and military operations in
    Southern Colorado, and there has been extensive public review,
    and the final environmental impact statement of the Colorado
    Air Space Initiative was referred to the FAA in 1998 for
    independent review. Do you have an update on that, or if you do
    not, when can we expect the final determination of its
    adequacy?
        Ms. Garvey. Senator, if we could back to you, we will do
    that within the next day, with the schedule----
        Senator Campbell. All right.
        Ms. Garvey [continuing]. And where we are with the
    assessment of it.
        Senator Campbell. And you will also remember that for me?
        Ms. Garvey. I will. I will, Senator.
        Senator Campbell. You have a very good memory.
        Ms. Garvey. Thank you, Senator, very much.
        Senator Campbell. Go ahead.
        [The information follows:]

                          Colorado Airspace Initiative

        Question. What is the status of the Colorado Airspace Initiative
    that proposes to expand the airspace in south Colorado that is used by
    the military for training?
        Answer. The U.S. Air Force/Colorado Air National Guard (COANG)
    proposed configuration of airspace was received by the FAA's Northwest
    Mountain Region Air Traffic Division on September 9, 1997. The FAA's
    Northwest Mountain Region and personnel from the Washington
    headquarter's Airspace and Rules Division have completed the
    aeronautical review and a final decision is pending completion of the
    FAA's environmental review. The COANG has completed the Environmental
    Impact Statement (EIS) associated with this initiative. The FAA's
    Office of the Chief Counsel began its review of the EIS in August 1998.
        A determination has not yet been made.

                    salt lake city international airport asr

        Senator Bennett. Thank you, Mr. Chairman. I will test your
    memory a little more.
        Ms. Garvey. How are you, Senator? It is nice to see you.
        Senator Bennett. I am well.
        Ms. Garvey. Good.
        Senator Bennett. I am well. We are glad you are here and
    appreciate all you do.
        Ms. Garvey. Thank you.
        Senator Bennett. Last year I asked you about the
    installation of a second airport surveillance radar for Salt
    Lake City International Airport. It appears in conversations at
    least at the staff level that the FAA is reluctant to go ahead
    with an additional ASR in Salt Lake, and we are informed that
    the FAA proposal is to install a temporary system for the
    Olympic Games period, based on internal cost benefit analysis.
        I have many aviation professionals in Utah that believe
    that the capacity of the Salt Lake City Airport system is
    severely constrained by the single ASR-9 surveillance radar
    that is there, and they want to talk about permanent
    improvement here and not just for the Olympics.
        Also, we appropriated $3 million for the procurement of a
    transponder landing system at six airports, including two in my
    state, Logan and Heber City, and the FAA has so far not
    proceeded with the procuring of these systems. So can you get
    back to me on these two issues, where we are?
        Ms. Garvey. I can give you a partial answer. Perhaps we can
    talk even further.
        Senator Bennett. Okay.
        Ms. Garvey. You are right on the temporary system, Senator.
    It has not, at least as we have looked at it, met the criteria.
    You have a wonderful airport director, and great airport people
    out there, and perhaps if I sat down with them, maybe there is
    some information that we are just missing. I would be happy to
    sit with them, perhaps with people from your office. I believe
    they are in town this week.
        Senator Bennett. Yes, they are. That may be why I brought
    it up.
        Ms. Garvey If I do not run into them, I will make sure that
    we set something up with your office.
        On the second issue, on the transponder landing system, we
    have made progress and the contractor is coming in to meet with
    us. We will have the contractor on board no later than June. We
    are going to lay out a schedule with him, and do some testing
    up in our Technical Center. We have been a little bit slower
    than I would like, but we are heading in the right direction
    now. We will get back to you with a more detailed schedule.
        [The information follows:]

        A Transponder Landing System (TLS) is a system that is reported to
    be capable of providing Category I linear and non-linear precision
    approach landings to a single plane using its currently installed ILS
    avionic equipment. Congress provided $3 million in this year's omnibus
    funding bill to establish a TLS test program at the following six
    recommended sites:
      --Boeing Field/King County Airport, WA
      --Pullman/Moscow Airport, ID
      --Friedman Memorial Airport, ID
      --Logan/Cache County Airport, UT
      --Heber Airport, UT
      --Central Wisconsin Airport, Mosinee, WI
        A TLS project team was formed within the Navigation and Landing
    Product Team. The Team established a single-source acquisition strategy
    with Advanced Navigation and Positioning Corporation (ANPC), Hood
    River, OR through a Commerce Business Daily announcement that closed on
    February 12.
        We are currently preparing plans and documentation to support the
    release of a Screening Information Request (SIR) during 3rd Quarter
    Fiscal Year 1999.

                                                   PROJECTED SCHEDULE
    ----------------------------------------------------------------------------------------------------------------
                                          Date                                                   Activity
    ----------------------------------------------------------------------------------------------------------------
    2/99............................................................................  Commerce Business Daily
                                                                                       Released.
    5/99............................................................................  SIR Release.
    6/99............................................................................  Contract Award.
    8/99............................................................................  Delivery to FAATC.
    TBD.............................................................................  Testing.
    TBD.............................................................................  Installation.
    ----------------------------------------------------------------------------------------------------------------

                                   year 2000

        Senator Bennett. Very good.
        Ms. Garvey. Thank you, Senator.
        Senator Bennett. I could not let you go without asking or
    commenting about the Y2K problem. I understand that you now
    expect to be fully compliant by the end of June.
        Ms. Garvey. That is correct, Senator, June 30, yes.
        Senator Bennett. So the bad news is that that is one
    quarter later than the President's deadline, and the good news
    is that it still gives you 6 months pushing for testing and
    checking out contingency plans, and so on. If you see any
    indication that the June date will slip, as the March date did,
    can you let me know?
        Ms. Garvey. We certainly will, Senator. We have had some
    very good conversations with OMB. They agree, because of the
    complexity of our systems and the need to do adequate end-to-
    end testing, the June 30 date is important. We are doing an
    end-to-end testing on April 10 in Colorado, very similar to
    what Wall Street did a couple of weeks ago. I am looking
    forward to that end-to-end test. The testing we have done at
    the Technical Center to date has not revealed any unusual
    problems. We have been very pleased with the results, but the
    real key will be the end-to-end testing in April. We will keep
    you and your staff very much informed, Senator.
        Senator Bennett. The one thing that concerns me out of the
    hearing that we held in the Y2K committee, and I apologize for
    intruding that into this, but as long as we have----
        Senator Shelby [presiding]. I think it is an appropriate
    time, from what we were talking about earlier.
        Senator Bennett. It looked as if the FAA were getting on
    top of its problems, and the area of greatest concern was
    individual airports, that there might be disruptions in the air
    traffic system if there is an airport somewhere they are not
    going to be Y2K compliant, they cannot handle traffic, and you
    have to start re-routing planes around that.
        In any of your studies, have you got any kind of a feel for
    that, or are you focused so much on your own problem that we
    should be the ones primarily to focus? I just want you to share
    with us anything you know.
        Ms. Garvey. Sure. Well, clearly, Senator, we are very much
    focused on our systems, but having said that, we also have a
    very active working group made up of ATA and the airports'
    councils, AAAE and ACI. They have been very good and very
    forthcoming. As a matter of fact, I met with the board from ACI
    and AAAE yesterday when one of the big topics was Y2K. So we
    are getting, I think, as we get closer to June, a much clearer
    sense of how the airports are doing. GAO had a pretty critical
    report----
        Senator Bennett. Yes.
        Ms. Garvey [continuing]. It was put out in the fall, but
    there was a general sense yesterday in talking with the
    airports that a lot has occurred since then. That was probably
    a very good wakeup call to a lot of people. So I think they
    have made very good progress. They are focusing on those
    elements that are related to safety, and I think that is
    important.
        Senator Bennett. Yes.
        Ms. Garvey. One of the challenges that I found out
    yesterday, and you are probably already aware of, but for a
    number of these airports who are controlled by city governments
    that also have checks to get out, and health issues, and so
    forth. It makes the job even more challenging for those
    airports to sort of get into the queue to make sure that they
    are being paid as much attention to.
        But I think they have made significant progress, and I
    think as we move forward, because of the work the associations
    are doing and we are doing with them, we will have a much
    clearer sense in June exactly where we are. I will mention it,
    we put together a technical team, about ten FAA people, who are
    very experienced in airports. They are available and will be
    available working very hard through the summer months to assist
    some of the airports that need that help.
        Senator Bennett. That is good to know, and I hope that they
    will be in touch with the staff of the Y2K committee----
        Ms. Garvey. Absolutely.
        Senator Bennett [continuing]. So that they can exchange
    information. The thing we have learned, Mr. Chairman, in this
    whole situation is that as a general rule the only people that
    will talk to you about Y2K are the people who are going to be
    all right, so you get a false sense----
        Ms. Garvey. That is interesting.
        Senator Bennett [continuing]. Of security when you say,
    ``Well, gee, we have heard from 60 percent of the universe, and
    everybody in that 60 percent is going to be all right one way
    or the other, so we are moving right along,'' and the reason
    you have not heard from the 40 percent is that they are not
    going to be all right and they do not want to tell you. That is
    one of the more challenging problems we have had.
        So I tell people when they say, are you willing to fly on
    New Year's Day, I say, well, if the airline is willing to take
    off, I am willing to fly, because they have as much at stake as
    I do.
        Ms. Garvey. That is true.
        Senator Bennett. Their pilot is just as subject to being
    killed as I am in the same airplane, and if the pilot is
    willing to get on the airplane, and the airline is willing to
    risk that, why, I guess I am willing to go with them. Now, I do
    not say I am willing to do that to all parts of the world, but
    in the areas where you have jurisdiction, I am willing to do
    that, but I say there is always the possibility that the
    airport you are flying to will not let you land, and you may be
    diverted someplace else.
        The FAA could be in good shape, but the airport might not
    be. So it is very important that you follow through, and I am
    delighted at your report about this special team, and we will
    do our best to work closely with you.
        Ms. Garvey. Thank you very much, Senator.
        Senator Bennett. Thank you. Thank you, Mr. Chairman.

                                 natca contract

        Senator Shelby. Ms. Garvey, I have several questions. I
    will try to move along as fast as I can.
        The air traffic controllers contract, last year the
    Administration signed a new agreement with the National Air
    Traffic Controllers Association, which was initially described
    as being within the President's budget request for 1999.
    Subsequent reports estimate that the additional cost of the new
    agreement is substantially more than the FAA operation
    resources envisioned in the President's request for the fiscal
    year 1999 budget.
        Can you shed light on what the ultimate costs of the new
    agreement are for the current fiscal year and for the fiscal
    year 2000?
        Ms. Garvey. I can, Mr. Chairman, and I will actually even
    read the numbers----
        Senator Shelby. Okay.
        Ms. Garvey [continuing]. Just to be sure I am giving them
    to you accurately. The incremental pay raises for the
    controllers would be $80 million in 1999, $65 million in 2000,
    and $55 million in 2001. But if I could, just for a moment,
    speak about the controller contract, because I think it is a
    good contract. Sometimes I think in discussions about the pay
    increases, some of the other elements of the contract may be
    lost. We went in with a couple of goals. One is that we wanted
    to get the contract completed quickly. I think some of the
    challenges we have, whether it is STARS or modernization, is
    having a work force that is together with you as the
    controllers are with us now on STARS is really critical and
    important.
        We also went in with the idea that there were things from a
    management perspective that we needed. We needed some
    efficiencies. We needed the controllers to take on additional
    responsibilities. We needed things like moving away from
    alternate work schedules, which are very expensive for the
    agency. We thought that those might be appropriate things to
    bring to the table, and the controllers did. We have frozen the
    controller number at 15,000. I think that is very significant
    from our perspective, because there have been numbers that have
    been much higher than that, that controllers and others have
    talked about. So we think there are a number of efficiencies
    that we have been able to gain. We think there are a number of
    very significant and important elements that management wanted
    as we went into it. So we think it is a good contract on both
    sides and positions us well to move forward to get out of a
    contentious contract debate atmosphere, if you will, and into a
    position where we are really focused on getting the job done.
        Senator Shelby. Ms. Garvey, does the recent controller pay
    agreement and the decision to reduce the number of controller
    supervisors change the dynamic between management and the
    controller work force for future contract negotiations?
        Ms. Garvey. I am not sure. I do not think it would change
    the dynamics. I think another point that is worth noting is
    that the reduction of supervisors, as you know, Mr. Chairman,
    is something that is being done government wide, and the
    private sector is as well. We still have a pretty conservative
    number. If you look at what has come out of NPR, we see numbers
    like 12-to-1 or 15-to-1. We are still at a 10-to-1 ratio, which
    is more conservative, and reducing the number of supervisors
    that is something that was part of the FAA's long-term
    discussions, even before the contract began. Having said that,
    I want to say this very directly, that we are going to do this
    thoughtfully and carefully. We would not do it with any
    compromise to safety. There is no time line, so we are allowing
    ourselves to do this in the most thoughtful and deliberative
    way. We are doing it with both management and with the
    controllers as well.

                       hiring of air traffic controllers

        Senator Shelby. Will the FAA hire more new air traffic
    controllers in 2000, even though it has met the 15,000 level of
    controllers specified in the recent agreement?
        Ms. Garvey. 15,000 is the number that we have to be at. We
    are slightly above that now and we need to get that number
    down.

                               nas modernization

        Senator Shelby. Both the Inspector General and the GAO have
    noted the difficulty that the FAA and the Department have had
    in managing the FAA's multi-billion dollar air traffic control
    modernization effort. Unfortunately, cost overruns, schedule
    slippages, performance shortfalls, and program cancellations
    are not uncommon in the modernization effort, and some would
    say are more the rule than the exception.
        Ms. Garvey, my sense of the root problem is that the FAA's
    traditional approach to modernization is to revolutionize the
    systems we have in place rather than to incrementally improve
    our air traffic control modernization system through the
    orderly replacement of computers, monitors, radars, et cetera.
        However, I do draw some hope from your efforts on the Free
    Flight Phase One program. These programs represent an effort to
    incrementally, as I understand it, improve the efficiency and
    the safety of the National Airspace System.
        I think that what you have done in this area is working,
    because you solicited industry involvement and support, and
    have dragged the FAA to modify the initial concept of this
    program to reflect something that the users of the system
    believe will enhance the safety, the capacity, and the
    efficiency of the system. You should be, I believe, commended
    for your efforts on Free Flight Phase One----
        Ms. Garvey. Thank you.
        Senator Shelby [continuing]. And I wanted to do that.
        Ms. Garvey. Thank you, Mr. Chairman.

                               NAS modernization

        Senator Shelby. Unfortunately, the FAA is not good at
    managing large, complex procurements. The advanced automation
    program, the microwave landing system program, and more
    recently, the STARS and WAAS programs are notable examples.
        Do you think the FAA has learned anything from the
    difficulties they have encountered in managing these programs,
    or are we doomed to watch them repeat the past failures with
    each new generation of ATC modernization? Have you learned? I
    am not just speaking of you, I am speaking about----
        Ms. Garvey. Right. Mr. Chairman, I really do think the
    Agency has learned a lot. I think one of the great challenges
    is if you are faced with what can be a failure, what can you
    learn from it. We have learned a great deal. Your point about
    incremental approach to modernization is right on target, and
    that is the approach that we are taking and will continue to
    take. Even something like STARS, which is such a complex
    project, and when you are talking about the terminal
    environment, it is the most complex area, it is not unusual to
    run into difficulty, software difficulties, and other issues.
    Having said that, we have learned early involvement of the
    industry, and the unions, and then staying the course, is part
    of the message to industry, that we need to be speaking with
    one voice. We also need to measure the results together so that
    we really can convince ourselves, as well as Congress, that
    these are investments that are worth making, but a one-step-at-
    a-time building block approach.

                      contract tower cost sharing program

        Senator Shelby. The committee also commends you for your
    efforts to implement the contract tower cost sharing provision
    that was included in this year's appropriation bill. Would you
    please provide the committee an update on this program? Can you
    do that now?
        Ms. Garvey. I think I can, Mr. Chairman, at least very
    briefly, and we can get back to you with the specific areas.
        Senator Shelby. Sure.
        Ms. Garvey We have five areas where we are entering into
    the cost sharing agreement. There is, as you have suggested,
    shared cost between the Federal Government and the individual
    airport. We have about 11 other letters of invitation. We think
    this is a good approach, and we have gotten very positive
    responses from those airports that are involved. I think this
    is a good way to provide a service that really has some shared
    responsibilities. We are very pleased with it, and thank
    Congress for their great help in this area.
        [The information follows:]

        Congress appropriated $6 million for fiscal year 1999 for cost
    sharing. The FAA will use this funding to allow those airports in the
    FCT Program that fall below the 1.0 benefit cost (B/C) ratio to remain
    in the FCT Program in fiscal year 1999. In addition, this initiative
    will be offered to new applicants that are below the 1.0 B/C ratio that
    have permanent control towers, as well as those airports where funding
    has been withdrawn. Cost sharing was first offered to those airports in
    the FCT Program that received notification in 1997 of funding
    withdrawal in 1999 if they remained below the 1.0 B/C ratio.
        On February 22, 1999, the FAA notified the Esler Regional Airport,
    Louisiana; Central Nebraska Regional Airport, Nebraska; Grand Strand
    Airport, South Carolina; Salinas Municipal Airport, California; and
    Olympia Airport, Washington, that they do not meet the 1.0 B/C criteria
    but that they are eligible to participate in the cost sharing program.
    The required local match is 71 percent for Esler Regional Airport, 34
    percent for Central Nebraska Regional Airport, 29 percent for Grand
    Strand Airport, 5 percent for Salinas Municipal Airport, and 3 percent
    for Olympia Airport.
        The FAA has prepared letters of invitation for 11 sites proposed
    for the cost-sharing program. The letters include the percentage of the
    cost that each site is expected to contribute and benefit/cost data.
    The FAA met with three area contractors on March 25, 1999. The purpose
    of the meeting was to discuss cost sharing provisions and methodologies
    of payments. The FAA has prepared a budgetary plan for the disbursement
    of the cost sharing funds among the first participants.

                         explosive detection equipment

        Senator Shelby. Explosive detection equipment, which we are
    all interested in, given the increased worldwide terrorist
    threat that aviation is usually a high-priority target for
    terrorists, does the Administration have any plans to
    accelerate funding for explosive detection equipment, and if
    so, how? If you do not want to get into it now, you can get
    back.
        Is the Administration generally satisfied, Ms. Garvey, with
    the rate of installation of EDS equipment in our nation's
    airports, and if not, what problems have been incurred getting
    certified EDS equipment installed? I think that is very
    important for the safety of our passengers.

                         Additional committee questions

        Ms. Garvey. I think it is, too, Mr. Chairman. As I
    mentioned yesterday in speaking with the NASA engineers, they
    described it as a kind of insurance policy, if you will, and I
    thought that was an apt description. We have about 75 to 80
    airports that have equipment in place. I think there is always
    a sense of frustration that you would like to go faster, but
    because it is new technology there are also issues about
    incorporating it into the airport, getting the right kind of
    training, and solving some of the technical issues, which our
    Technical Center works very hard at. So I think that we are
    pleased with the progress, always aware that we would like to
    see things move a little bit faster. We are very committed to
    working with both the airlines and the airports in getting the
    equipment out. Our budget does contain funding to allow the
    program to continue. I do think it is important.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]

                     Questions Submitted by Senator Shelby

                           control of appropriations
        Question. What actions have been taken to address the deficiencies
    in the FAA's budget execution function to ensure that the FAA comply
    with Congressionally established reprogramming guidance as implemented
    through Departmental and FAA reprogramming guidelines and the other
    shortcomings as identified in the DOT Inspector General Audit Report
    FE-1998-167? Please report to Congress the establishment of any reserve
    of Operations, F&E, AIP, or RE&D appropriations that have not been
    approved by Congress.
        Answer. In January the Chief Financial Officer sent a reminder to
    all FAA managers on the congressional reprogramming guidance. The
    agency requires that notification of all proposed transfers in excess
    of the reprogramming thresholds set forth in report language be
    forwarded to the appropriate congressional committees. In addition, we
    are in compliance with the FAA funding criteria guidelines.
        Consistent with a July 6, 1998, Inspector General recommendation on
    establishing reserves, the FAA began formally reporting to Congress on
    its operations reserve in fiscal year 1999. For this purpose, we chose
    to use the quarterly Program, Project and Activity Reports to Congress.
    For fiscal year 1999, the operating reserve was established at $15
    million. The agency believes that the establishment of a reserve is a
    critical necessity if the Administrator is to have the flexibility to
    meet unfunded and unanticipated requirements that occur during the
    budget year and to meet unforeseen requirements in the rapidly changing
    aviation environment. The reserve represents less than \1/2\ of 1
    percent of the total operations account.
                             cost accounting system
        Question. Your budget request envisions a user fee increase of $1.5
    billion. During the week of March 7th, the DOT Inspector General Ken
    Mead testified that a reliable cost accounting system will not be fully
    implemented until 2001 or later. In addition, you testified that if FAA
    is to achieve the administration objective of funding the entire agency
    with a combination of current excise taxes and new user fees, including
    the establishment of a PBO for air traffic services, it needs a
    reliable cost accounting system. Given that a cost accounting system
    clearly won't be in place for the fiscal year 2000, isn't it premature
    to propose either new user fees or a PBO for air traffic services--or
    was the user fee proposal simply a budget gimmick to present a higher
    FAA budget than the Administration's budget priorities would allow?
        Answer. By the summer of 1999, the FAA's cost accounting system
    will provide the cost information necessary for the implementation of
    the previously authorized Overflight fees (for flights which transit
    United States' airspace but that neither take-off nor land in the
    United States). The cost accounting data available at that time will
    solely be for the FAA's En-Route and Oceanic services.
        The rest of FAA's services will be implemented in phases according
    to schedule over the next two years. By the end of fiscal year 1999,
    the cost accounting system will be sufficiently developed to support
    the air traffic PBO, and by the end of fiscal year 2001, all of the
    FAA's services will be covered by the cost accounting system.
                                   user fees
        Question. Would you present for the record what you would propose
    to cut from the FAA budget request if Congress fails to approve the new
    user fees--or, equally as likely, the FAA is unable to implement the
    new user fees in the time frame envisioned in the budget request?
        Answer. The loss of $1.5 billion in revenue against a program level
    of $6.039 billion would be extremely problematic for the FAA. If the
    cut were taken against the Operations Appropriation, which is 75
    percent payroll, staffing levels would have to be cut at the beginning
    of the fiscal year. The agency would have to slow down the system and
    restrict the number of flights to ensure the air traffic system and
    restrict the number of flights to ensure the system is operating safely
    with much lower staffing levels.
                              air traffic control
        Question. Does the recent controller pay agreement and the decision
    to reduce the number of controller supervisors change the dynamic
    between management and the controller workforce for future contract
    negotiations?
        Answer. No, the approach to future labor negotiations will not
    change based on the results of the controller pay agreement. However,
    we have established work groups with the National Air Traffic
    Controllers Association to manage specific provisions of the contract.
        Question. Please provide a FTE and FTP table on a month by month
    basis for fiscal years 1997, 1998 and 1999 (to date) of the air traffic
    controller workforce and the average cost per FTE and FTP for each
    timeframe. Did attrition and retirement rates change in the aftermath
    of the new Controller pay agreement?
        Answer. The controller work force (CWF) full-time permanent (FTP)
    table on a month-by-month basis for fiscal years 1997, 1998, and 1999
    to date follows:

    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           Fiscal year 1997 CWF         Fiscal year 1998 CWF         Fiscal year 1999 CWF
                                                                      --------------------------------------------------------------------------------------
                                                                                         Estimated                    Estimated                    Estimated
                                                                         FTP    FTE \1\   FTE Cost    FTP    FTE \1\   FTE Cost    FTP    FTE \1\   FTE Cost
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    October..........................................................   17,078    1,513    90,350    17,380    1,540    93,856    17,736    1,502    103,478
    November.........................................................   17,052    1,380    90,425    17,377    1,339    93,871    17,710    1,433    103,493
    December.........................................................   17,030    1,444    90,525    17,417    1,541    93,886    17,687    1,568    103,508
    January..........................................................   16,964    1,506    93,241    17,347    1,473    96,139    17,616    1,428    106,717
    February.........................................................   16,969    1,307    93,316    17,360    1,337    96,154    17,621    1,358    106,732
    March............................................................   16,946    1,372    93,391    17,470    1,476    96,169   .......  .......  .........
    April............................................................   16,975    1,437    93,466    17,573    1,484    96,184   .......  .......  .........
    May..............................................................   17,034    1,441    93,541    17,593    1,422    96,199   .......  .......  .........
    June.............................................................   17,061    1,379    93,616    17,578    1,490    96,214   .......  .......  .........
    July.............................................................   17,120    1,514    93,691    17,543    1,555    96,229   .......  .......  .........
    August...........................................................   17,212    1,388    93,766    17,541    1,419    96,244   .......  .......  .........
    September........................................................   17,388    1,466    93,841    17,728    1,494    96,259   .......  .......  .........
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ Includes FTE for 90 part-time CWF.

        The FAA does not have a tracking system which calculates or
    maintains a separate CWF FTE history. In order to approximate the level
    of FTE usage, we have developed a model. The accompanying full-time
    equivalent (FTE) figures are calculated on the FTP CWF monthly actual
    on-board and an estimated 90 part-time CWF.
        The existing accounting system provides obligations only by fiscal
    program, i.e., center, tower, stations, etc. The payroll costs in these
    fiscal programs include other than controller work force and management
    personnel and does not provide separate obligations for bargaining unit
    employees. Thus, we do not have accurate monthly obligations for the
    CWF. The average FTE cost above was calculated using the estimated FTE
    for centers and towers and dividing it into the corresponding estimated
    PC&B for that particular year. Since the FAA does not have a tracking
    system to separate CWF from the OTCWF, these estimates include some
    OTCWF in the average cost per CWF FTE. Additionally, there are a myriad
    of events, such as employee changes in benefit selections and reaching
    Federal Insurance Contribution Act pay limits, that create fluctuations
    in the average cost per FTE. The timing and magnitude of these
    influences vary. While their cumulative effect is included, no attempt
    has been made to display these individual influences on a month to
    month basis.
        Since October 1998, the attrition rate has decreased by 40 percent
    compared to the first 6 months of fiscal year 1998. Retirements have
    also experienced a reduction of 28 percent when comparing the first 6
    months of fiscal year 1999 to the same time period in fiscal year 1998.
        Question. Will the FAA hire air traffic controllers in fiscal year
    2000 even though it has met the 15,000 level of controllers specified
    in the recent agreement with NATCA?
        Answer. Yes. In order to replace anticipated attrition, the FAA
    estimates it will need to hire approximately 350 controllers in fiscal
    year 2000 to maintain the 15,000 air traffic controller staffing level
    established by the agreement.
                            controller productivity
        Question. Does the FAA have any measures in place to gauge air
    traffic controller productivity? If so, please provide a description of
    such measures and a retrospective assessment of air traffic controller
    productivity annually for the past 10 years.
        Answer. The FAA has used air traffic activity per controller work
    force (CWF) as a measure of productivity. In this measure, air traffic
    activity consists of the total of instrument flight rule aircraft
    handled by en route centers and aircraft operations and instrument
    operations handled by terminal facilities. The total activity is
    divided by the total CWF. What appears as reductions in productivity
    from fiscal years 1995 to 1999 reflect the increasing share of terminal
    airport operations conducted by FAA contract towers as FAA completes
    its program to convert FAA Level I visual flight rule towers to
    contract operation. In the budget submission, nine years of information
    is presented on page 35. Fiscal year 1999 and 2000 are based on
    estimates. On the following chart, 10 years of air traffic controller
    productivity is provided.
        The services provided by air traffic to the flying public, and
    consequently the productivity, are not effectively represented through
    this metric. The FAA is in the process of developing better
    productivity measures that more accurately define real productivity as
    measured by the services provided to the flying public.
    [GRAPHIC] [TIFF OMITTED] T12MA23.001

                              air traffic control
        Question. What steps have been taken in addition to retraining to
    ensure that the near disaster over La Guardia Airport last year in
    which an Air Canada Airbus A320 took off directly over a US Airways DC-
    9 as it broke off a landing attempt. The near-disastrous situation
    underscores the need to reexamine rules regarding control of aircraft
    in the immediate airport area and on the ground. In addition, what
    steps have been taken to mandate appropriate and timely reporting of
    such occurrences.
        Answer. In addition to the retraining, the FAA has conducted a
    review of the procedures applicable to aircraft movement in the
    immediate airport area and on the ground. Based on our review, several
    changes have been developed and are in the final clearance process
    prior to implementation. These changes include:
      --Modifying same runway separation
      --Modifying anticipated separation
      --Elimination of multiple landing clearances
      --Modifying takeoff position and hold procedures
        We believe these changes will enhance the procedures already in
    place and prevent a reoccurrence of the situation. To ensure
    appropriate and timely reporting of events, guidance was issued to all
    regional offices re-emphasizing the existing requirements concerning
    appropriate reporting of incidents occurring in the National Airspace
    System, and the penalties for non-compliance. Additionally, in an
    effort to identify and correct air traffic controller performance
    deficiencies, the FAA has developed a new quality assurance review to
    prevent operational error deviations or near mid-air collisions.
                       automated flight service stations
        Question. Has the FAA Flight Service Station Architecture Report
    that outlines the plan for closing or reducing hours of operation at
    selected Automated Flight Service Stations nationwide been released in
    its entirety (including all appendices)? If not, why not? Please
    provide a copy of the complete report--including all appendices--for
    the use of the subcommittee.
        Answer. No. The Flight Service Architecture Core Group Staff Report
    has not been released. The report is still considered staff level and
    is currently under review within the FAA.
                      liaison and familiarization training
        Question. Please provide a status report of which of the DOT
    Inspector General recommendations from Report Number AV-1998-170 have
    been adopted, the status of those that have not (including a schedule
    for implementation) and a rationale for any recommendations that the
    FAA Administrator does not anticipate implementing.
        Answer. A Memorandum of Understanding (MOU) has been signed between
    the Federal Aviation Administration (FAA) and the National Air Traffic
    Controllers Association (NATCA). The MOU represents the agreement
    reached between the FAA and NATCA on Article 23, Liaison and
    Familiarization Training, of the collective bargaining agreement. The
    new Article 23, requires the supervisory assignment of training
    objectives for each trip prior to approval, that all familiarization
    training be conducted on duty time, reduces the maximum allowable
    number of trips per year to 6, and restricts same destination
    assignments to 2 per year. As a party to the development of the
    Article, the DOT Inspector General (OIG) concurred with its
    specifications prior to its signing.
                      contract tower program--cost sharing
        Question. The Committee commends FAA Administrator Garvey for her
    efforts to implement the contract tower cost-sharing provision that was
    included in this year's appropriations bill. Can you please provide the
    committee an update on this program?
        Answer. In fiscal year 1999 Congress added $6 million for the FCT
    Cost Sharing Program. The Federal Aviation Administration (FAA)
    contract tower program has prepared and issued letters of invitation
    for cost sharing to 11 sites in anticipation of a June 1 start date.
    Letters of agreement, establishing the terms of eligibility, and
    funding provisions for the program, have been drafted between the FAA,
    the contractors providing air traffic control services, and the
    participating airport authorities.
        The Administration strongly supports the existing FCT program at
    locations that meet criteria. Funds to continue the cost sharing
    program included in the agency's original budget submission were not
    included in the fiscal year 2000 Congressional Budget Submission since
    the Administration does not support subsidizing the operation of
    contract towers where the costs exceed the benefits.
                             contract tower program
        Question. The committee supports the FAA contract tower program as
    a cost-effective way to enhance air traffic safety at smaller airports.
    We were pleased with the DOT Inspector General's report from last year
    that validated these cost savings and safety enhancements. Can you
    please provide the committee an update on the plans to expand this
    program to other appropriate facilities as requested in the 1999
    appropriations bill?
        Answer. As requested in the 1999 appropriations bill, the FAA is
    conducting a study to examine extending the FCT program to existing
    airport traffic control towers without radar capability. The FAA is
    completing the study and will be forwarding the results to the
    Committee as requested.
                                  age 60 rule
        Question. The Age 60 Rule was instituted in 1959 without the
    benefit of medical or scientific studies and without public comment.
    The EEOC has essentially eliminated age discrimination rules in all
    facets of commercial aviation with the exception of FAR Part 121 and
    Part 135 carriers. Other countries--Great Britain, Germany, France,
    Australia, etc.--have modified their age 60 restrictions. Japan began a
    study on the age 60 issues and discontinued it after finding no safety
    or operational reasons to maintain age 60 as a mandatory retirement
    age. The most recent pilot aging study was the Hilton Systems Technical
    Report 8025 (known generally as the Hilton Study) undertaken by Lehigh
    University and Hilton systems, Inc. to ``conduct statistical analysis
    on historical data to investigate the relationship between pilot age
    and accident rates.'' The report concluded: ``we saw no hint of an
    increase in accident rate for pilots of scheduled air carriers as they
    neared their 60th birthday. In spite of this study, the Age 60 Rule not
    only remains in effect, it was expanded in 1995 to include Part 135
    pilots in spite of no record of any age-related accidents or incidents
    in the affected pilot group. Clearly, the United States seems to be
    moving against the international aviation community and contrary to our
    own national trends on age discrimination rules. Can you provide any
    medical or scientific reason why the United States should not follow
    the findings of the Hilton Study and ``cautiously increase the
    retirement age to age 63?''
        Answer. FAA promulgated the Age 60 Rule in 1959 because of concerns
    that a hazard to safety was presented by utilization of aging pilots in
    air carrier operations. At that time, the agency found that there was a
    progressive deterioration of certain important physiological and
    psychological functions with age, that significant medical defects
    attributable to this degenerative process occur at an increasing rate
    as age increases, and that sudden incapacity due to such medical
    defects becomes more frequent in any group reaching age 60.
        The FAA noted other factors, even less susceptible to precise
    measurement as to their effect but which must be considered in
    connection with safety in flight that result simply from aging alone
    and are, with some variations, applicable to all individuals. These
    relate to loss of ability to perform highly skilled tasks rapidly; to
    resist fatigue; to maintain physical stamina; to perform effectively in
    a complex and stressful environment; to apply experience, judgment, and
    reasoning rapidly in new, changing, and emergency situations; and to
    learn new techniques, skills, and procedures.
        Clearly, there is progressive anatomic, physiological, and
    cognitive decline associated with aging, albeit variable in severity
    and onset among individuals. Physicians, psychologists, physiologists,
    and scientists of other disciplines have identified many age-associated
    variables, some easily measurable, some not that may be important to
    human function. There is, however, no acceptable medical protocol to
    measure the effects of aging on a particular individual.
        Because it is unacceptable for these pilots to work until failure
    or until there is obvious impairment, the age of 60 has served well as
    a regulatory limit since 1959. While science does not dictate the age
    of 60, that age is within the age range during which sharp increases in
    disease mortality and morbidity occur.
        In late 1990, FAA initiated its most recent study of the issue,
    aimed at consolidating available accident data and correlating it with
    the amount of flying by pilots as a function of their age. This
    resulted in the March 1993 Hilton study report, ``Age 60 Project,
    Consolidated Database Experiments, Final Report'', which found ``no
    hint of an increase in accident rate for pilots of scheduled air
    carriers as they neared their 60th birthday'' but noted that there were
    no data available on scheduled air carrier pilots beyond age 60.
        The FAA rule is consistent with the international standard
    established by ICAO, which prohibits anyone over the age of 60 from
    acting as pilot-in-command.
                             essential air service
        Question. The FAA has developed a ``blueprint for modernizing the
    NAS and enhancing NAS services and capabilities'' with the overall
    intent of providing increased benefits to users while enhancing safety.
    Attaining modernization, we assume is predicated on funding levels in
    line with prior and current budget requests. If capital investment is
    not increased, or maintained, the FAA has indicated that they will have
    to make tradeoffs between providing improved services and
    functionalities or sustaining current operations. If that is in fact
    the case, how can the Department justify proposing a reprogramming of
    F&E funding to cover the costs of the Essential Air Service program
    which in recent years has been funded out of operations funding.
    Doesn't such a reprogramming request bleed off necessary funds from
    modernization?
        Answer. Budget execution is frequently a matter of making difficult
    choices between less than desirable alternatives. For fiscal year 1999,
    we were faced with a funding shortfall in Operations. In addition to a
    congressional cut to the President's request, one chief cause of the
    shortfall was our inability to collect the $93 million in overflight
    fees assumed in the President's budget request, $50 million of which
    would have been used to subsidize the Essential Air Service (EAS)
    program. In absence of these overflight fees, the statute requires us
    to use other funds available to us to make the mandated subsidy payment
    to EAS. Whereas we used Operations funds in fiscal year 1998 (the first
    year that the FAA was required to subsidize the EAS program with
    overflight fee revenue or other funding source \1\), we elected to use
    F&E resources in fiscal year 1999. We made this choice because, in our
    opinion, the effect on safety, security, and efficiency was less if the
    subsidy was funded by F&E than by Operations. I would like to point out
    that no funds are budgeted in the FAA in fiscal year 2000 to fund EAS
    should the expected overflight fees collections not materialize.
    ---------------------------------------------------------------------------
        \1\ Prior to fiscal year 19998, the annual EAS subsidy was provided
    by a drawdown from the Airport and Airway Trust Fund.
    ---------------------------------------------------------------------------
                         explosives detection equipment
        Question. Please provide a list of corrective actions and the
    implementation dates for the following observations from the DOT
    Inspector General's review (AV-1999-001) of the Explosive Detection
    System program:
        (a) The FAA has not finalized property transfer and use agreements
    with the U.S. and foreign air carriers receiving explosive detection
    equipment.
        (b) Air carriers are significantly underutilizing the equipment
    already deployed.
        (c) The equipment, while effective in detecting explosives, is
    experiencing high false alarm and slow baggage throughput rates,
    potentially impacting industry and passenger acceptance of checked
    baggage screening.
        Answer. Agreements between the FAA and the air carriers on the
    conditions of use for explosive detection equipment have not been
    finalized yet-primarily due to air carrier concerns about taxation
    issues. However, the FAA continues to work diligently with the Air
    Transport Association and the individual air carriers receiving
    equipment to resolve their perceived issues.
        Machine utilization increased significantly since the first
    equipment was installed. Machine usage in bags screened per week per
    system increased by 50 percent last year. While the FAA agrees with the
    Inspector General's office that the screening rate needs further
    improvement, the appropriate security policy is to screen all bags from
    Computer Assisted Passenger Screening (CAPS)-selected passengers. Thus,
    we have properly sized the number of machines to the peak bag flow
    under this criterion. The utilization per week will not be a simple
    multiple of hours of use by the peak flow as computed by the Inspector
    General's office. The FAA is also urging carriers to share the use of
    EDS, which will increase throughput.
        Reduced nuisance alarm rates would, indeed, result in greater
    industry and passenger acceptance of screening equipment. The FAA
    continues to vigorously pursue this goal for increased system
    efficiency. However, after nearly all air carriers have fully
    implemented CAPS, the demand levels produced by CAPS are being screened
    at existing nuisance alarm rates without any major delays. The alarm
    rates are not excessive, given the great variance in bag contents and
    the small mass of explosives which must be detected.
        Question. Given the increased world wide terrorist threat and that
    aviation is usually a high priority target for terrorists, does the
    administration have any plans to accelerate funding for explosives
    detection equipment (EDS)? If so, how?
        Answer. The enacted budget for Civil Aviation System Security
    Technology Research and Development was $44 million in fiscal year 1998
    and $52 million for fiscal year 1999. A significant amount of this
    funding is being applied to develop technologies to detect explosives
    carried in checked luggage, in carry-on luggage, and concealed on
    passengers. In addition, F&E funding of $100 million was provided in
    fiscal year 1999 for EDS deployment. The F&E budget request of $100
    million in fiscal year 2000 continues to support the deployment of EDS
    at the appropriate rate.
        Question. Is the administration generally satisfied with the rate
    of installation of EDS equipment in our nation's airports? If not, what
    problems have been incurred getting certified EDS equipment installed?
        Answer. The FAA is generally satisfied with the current (April
    1999) rate of installation of EDS equipment. The Security Equipment
    Integrated Product Team (SEIPT) was created to provide a partnership
    between public and private entities involved in deployment of security
    equipment in airports. Every EDS installation is physically unique and
    requires extensive coordination with local authorities. Some problems
    have been encountered in placement, integration, and use of the
    equipment. In many cases, ongoing construction at airports has hindered
    installation efforts. As the SEIPT gains experience, the problems
    encountered in installation of the equipment have been easier to
    resolve.
        Question. Is the original mandate of the Vice-President's
    Commission on Aviation Safety and Security still viable? That is, does
    the administration believe that $100 million a year is enough to do the
    job?
        Answer. The original mandates of the White House Commission on
    Aviation Safety and Security i.e., to provide $100 million per year for
    5 years, are viable. The fiscal year 2000 request of $100 million is
    adequate to support deployment of equipment at the appropriate pace.
        Question. The administration has been trying to foster competition
    in the EDS equipment area, that is, having several manufacturers from
    which to purchase. Are you satisfied with the level of competition? Do
    you believe that $100 million a year is sufficient enough to foster
    competition? What do you base your answer on?
        Answer. The FAA has fostered competition among vendors of EDS by
    means of research and development grants. There are now two vendors of
    EDS, and a third may soon succeed in having its EDS certified. InVision
    has produced several certified systems that are operating in the field.
    L-3 has developed a certified system, which is currently undergoing
    FAA-funded revisions to advance the system from a certified system to
    one that is field-ready. The FAA has funded another vendor, Vivid, to
    produce a certified system. Vivid is currently working to produce a
    certified system. The budget of $100 million a year has been sufficient
    to foster competition in the EDS area. No market existed previous to
    the Security Equipment Integrated Product Team (SEIPT).
                           certification of companies
        Question. Are you helping any other companies get certified in this
    area? How? Did you assist the first two qualified companies get
    certified? How?
        Answer. Yes, the FAA continues to provide opportunities for other
    companies to develop products with a goal of certification. Currently,
    there are two projects the FAA is sponsoring with R,E&D funds. The FAA
    provided $4 million over three fiscal years to Vivid Technologies in a
    cost-share grant to assist their development of a Multi-View Tomography
    (MVT) EDS. The FAA is also funding EG&G Astrophysics at a lower level
    (50/50, government/industry) to explore an adjunct sensor for their Z-
    Scan-10 X-ray inspection system that may satisfy certification
    criteria. The FAA also provides access and use of FAA test facilities,
    equipment, explosives, and simulants at no cost to support iterative,
    developmental testing.
        For both the InVision CTX 5000SP and the L-3 Communications
    eXaminer 3DX6000, the FAA underwrote a significant portion of their
    development costs with R,E&D funds and provided priority access and use
    of FAA test facilities, equipment, explosives, and simulants at no cost
    to support iterative, developmental testing.
        The FAA funded $8.2 million toward the development of the InVision
    CTX 5000SP over approximately seven fiscal years. The FAA provided
    $14.5 million in a cost share grant with L-3 Communications toward the
    accelerated development of the eXaminer 3DX6000 high-throughput EDS
    over three fiscal years. The FAA also provided $6.2 million in a cost-
    share grant with InVision to develop a high throughput EDS called the
    CTX 9000 which has recently completed certification testing.
        Question. The FAA, in order to foster competition, has been holding
    back orders while it waits for more companies to get certified in the
    EDS area. Given the threat of terrorist attack and the usual delays in
    getting equipment installed in the field, isn't this a dangerous
    strategy?
        Answer. The FAA has not been holding back orders of certified
    explosives detection equipment. The FAA has been pacing its new
    equipment orders to maintain a steady deployment program. This has
    allowed newly certified EDS to compete for remaining orders.
                         explosive detection equipment
        Question. How many of the nation's category X airports have EDS
    equipment installed? What is the goal for installation of EDS equipment
    in category X airports and other airports?
        Answer. FAA-certified EDS are installed at 29 airports. All
    category-X airports currently have EDS equipment installed. The goal is
    for sufficient EDS to be installed to screen all Computer Assisted
    Passenger Screening selectees' bags at their originating airports,
    other than at the smallest airports where less efficient, but no less
    effective measures will be used to inspect selectees' bags.
        Question. Have the airlines been cooperative with the FAA in
    getting this equipment installed and most importantly utilized? If not,
    why not?
        Answer. Representatives of seven major U.S. air carriers, regional
    airlines, and airports are core team members of the FAA Security
    Equipment Integrated Product Team (SEIPT). The SEIPT, which is composed
    of FAA and industry acquisition and security experts, was established
    to manage the advanced security equipment airport deployment program.
    As partners with the FAA on the SEIPT, airline and airport industry
    representatives have been cooperative participants in our joint efforts
    to get this equipment installed and effectively utilized.
        Question. It has been stated that $100 million a year is not enough
    money to really foster competition in the EDS area. This amount pales
    in comparison to the amount that FAA spends in purchasing navigation
    and communications equipment. What else can the FAA do to foster
    competition?
        Answer. The FAA created the Security Equipment Integrated Product
    Team (SEIPT) in response to the White House recommendations on Aviation
    Security. Those recommendations suggested the purchase of EDS
    equipment, in part to foster competition, and those recommendations are
    being implemented by the SEIPT. Due to this created market, plus FAA-
    funded development of EDS systems, competition has been encouraged.
        In addition, the FAA has funded several R,E&D initiatives to
    produce new systems.
        Question. Would the FAA support a higher level of funding for EDS?
    What would be the proper level of funding in this area to both keep the
    domestic manufacturers interested and for meeting the terrorist threat?
        Answer. The present level of funding requested for fiscal year 2000
    would support the appropriate level of EDS production and deployment.
        Question. If the level of funding for this area is constrained by
    budget considerations, what else is FAA doing to get airports and the
    airlines to pick up the slack?
        Answer. The level of funding for EDS deployment is sufficient. If
    funding levels are reduced or earmarked for other purposes, there are
    few practical solutions that would be immediately available to transfer
    the burden to airports and air carriers.
        The FAA published a Notice of Proposed Rulemaking on April 19,
    1999, requiring Positive Passenger Bag Match (PPBM) that should be
    fully in effect by October 2001. However, the aviation industry, as
    well as the FAA, is concerned that PPBM of connecting and interline
    baggage will have a severe adverse effect on the national aviation
    system. The White House Commission on Aviation Safety and Security
    recognized this potential on aviation safety and security when it
    recommended PPBM to be implemented, `` * * * until such time as [EDS]
    machines are widely available * * *.'' The effect of PPBM on the
    domestic aviation system is further detailed in The Study and Report to
    Congress on the Domestic Positive Passenger Baggage Match Pilot Program
    that the FAA will submit to Congress in May.
        AIP funds are currently eligible for the purchase of this
    equipment, but are unlikely to be used for this purpose; airports are
    the regulated entity that must request AIP funds, and air carriers are
    responsible to fund and operate passenger and baggage screening.
    Therefore, it is unlikely that airports will request limited AIP funds
    to be used by air carriers instead of much needed airport improvements.
    Vice President Gore stated in a September 15, 1998 letter to the Senate
    leaders that, ``The Senate approach [to fund EDS out of AIP] would
    jeopardize the progress we have made in providing an overall increased
    level of security at U.S. airports.''
                         explosives detection equipment
        Question. Approximately one year ago FAA had its only certified EDS
    manufacturer ramp up production of EDS units to approximately ten a
    month. This required the manufacturer to move production into a new and
    larger facility. At a funding level of only $100 million a year, this
    funding level will not even keep that one manufacturer at full
    capacity. Does the FAA jeopardize losing that critical manufacturing
    base? What can be done to maintain that existing resource?
        Answer. When FAA awarded the initial EDS equipment purchase
    contract to its only supplier, it required the vendor to accelerate
    production of EDS units to deliver a total of 54 units during the first
    year of the contract. Although production difficulties experienced
    during that first year resulted in extending this delivery schedule,
    the vendor made extraordinary efforts to increase its production
    capabilities to meet the delivery requirements of the Government. While
    the FAA supported the vendor in its efforts to increase production to
    meet its contract commitments to the Government, decisions made by the
    vendor regarding its production facilities and capital investments were
    solely the business decisions of the company.
        Question. In the defense area, if a manufacturer is determined to
    be producing something that is critical and in the nation's interest,
    the Department of Defense provides funding to maintain critical
    manufacturing capability so that it is available in time of national
    need. Has the FAA thought of doing anything like that in the EDS area?
        Answer. The FAA efforts to foster market competition by developing
    multiple sources for security equipment have been successful. On
    November 23, 1998, the FAA certified the second EDS, the eXaminer 3DX
    6000, produced by L-3 Communications. At the present time, both
    InVision and L-3 Communications have certified EDS's. Two other vendors
    are working to get their candidate EDS certified. There are even more
    vendors of checkpoint x-ray equipment and explosive trace detection
    devices.
                        funding for screening equipment
        Question. There are various technologies competing for these
    limited funds. Last year, Congress directed that a certain amount of
    funds be set-aside for operator assisted screening equipment. Does the
    FAA have plans to increase the amount of funding in this area to
    accommodate the various and varied technologies? Please elaborate.
        Answer. The FAA has conducted two evaluations of screener assist x-
    rays (SAX) for automatic explosives detection for screening carry-on
    baggage/items. The first evaluation focused upon the detection and
    false alarm rates and was carried out in a laboratory environment. The
    second effort was carried out in Knoxville's McGhee Tyson Airport with
    the primary objective of documenting sources of false alarms and false
    alarm rates. At this time, the FAA is unable to recommend the
    deployment and full utilization of SAX in an operating environment.
    Additional evaluations will be carried out by the FAA to obtain
    information needed by SAX vendors to improve their systems.
        The FAA believes that priority in funding should be given to
    deploying EDS for checked baggage screening, rather than to update the
    equipment used to screen carry-on items.
        Question. It is our understanding that the Integrated Product Team
    (IPT) at DOT has determined that, due to the age of most airport x-ray
    systems, only a small percentage are capable of being upgraded to
    include approved Threat Image Projection or TIP as it is commonly
    known. We understand that, as a result of this, the IPT has recommended
    that, with the exception of the upgrade capable units, x-ray systems be
    replaced with approved TIP capable systems. This process would be
    initiated with the $24.6 million in supplemental funding earmarked for
    TIP. Does the FAA intend to follow this recommendation?
        Answer. Yes, the FAA Security Equipment IPT is acquiring 420 TIP
    ready and screener assist capable x-rays, in conformance with the
    fiscal year 1999 Appropriations Act.
        Question. If the FAA does intend to follow this recommendation, can
    you assure the Committee that only FAA certified TIP capable equipment
    would be used to replace the older units?
        Answer. The Security Equipment IPT responsible for the procurement
    and deployment of security technologies have made it a requirement that
    all acquisitions of checkpoint carry-on baggage screening x-rays will
    be TIP-capable. Checkpoint equipment (for screening carry-on items),
    unlike EDS, is not currently certified; it will be procured on the
    basis of announced specifications and objective performance data.
    Equipment certification specifications are being developed for the
    entire range of passenger screening equipment.
                               backscatter x-ray
        Question. Do you intend to include an evaluation of backscatter x-
    ray body scanning devices with your evaluation of trace portal
    technology?
        Answer. There will be no airport evaluation of backscatter x-ray
    body scanning equipment. Preliminary laboratory evaluations of such
    technologies may be carried out by FAA to augment our knowledge base on
    available technologies. There are several issues to resolve before
    airport testing can be contemplated. These include public acceptance of
    the (small) radiation exposure, privacy concerns, effectiveness, and
    alarm resolution. Trace portal technologies are far less intrusive,
    have already been tested at airports, and will be tested again in the
    near future.
                      user request evaluation tool (uret)
        Question. URET has been in the Indianapolis and Memphis Centers for
    a long time. Is URET operationally acceptable to the controllers? When
    will it be installed in the other facilities?
        Answer. The URET prototype is not yet operationally acceptable to
    controllers. But over the past four months, URET usage at the
    Indianapolis and Memphis centers has increased dramatically.
    Indianapolis Center usage has increased from about 4,100 sector hours
    to almost 8,000 sector hours. Memphis Center usage has increased from
    1,400 to 6,000 sector hours.
        The FAA is confident that this increase suggests growing acceptance
    of the tool. To ensure that this trend continues, the FAA and the
    controllers union have formed a team to resolve issues of joint
    concern, such as system requirements and acceptance.
        This tool will be deployed to high-altitude centers in Atlanta,
    Chicago, Cleveland, and Washington, D.C., beginning in November 2001.
        Question. How will controller productivity improve with use of
    URET?
        Answer. URET assists the controllers in alleviating potential
    problems at an earlier point. It facilitates the strategic planning
    functions of the controller sector team, and serves as an additional
    tool to help the controller's plan for and coordinate aircraft movement
    through sector airspace.
        URET will replace the paper strips that are today's source of
    flight data for controllers, and will allow them to utilize less-
    cumbersome electronic flight data.
        A full operational impact evaluation will be accomplished in
    collaboration with system users and operators after the system is
    fielded, as required by the consensus reached by the FAA and the users
    of the system.
        Question. What daily use experience is there that proves URET's
    algorithms to be operationally acceptable?
        Answer. Recent user request evaluation tool (URET) usage at
    Indianapolis Center has risen from about 4100 sector hours to almost
    8000 sector hours. During the same period, usage at Memphis Center grew
    from 1410 sector hours to 6000 sector hours.
        The algorithms of the URET prototype have not yet been proven to be
    operationally acceptable. However, the increased use of the prototype
    tool and a similar increase in the use of the trial planning function
    of URET indicates that we are on the proper path toward the algorithms
    becoming operationally acceptable. Also, the joint FAA/NATCA URET team
    is working together to develop system requirements and to resolve the
    issues that could bar operational acceptance (including algorithm
    performance).
        Additionally, the program office conducts simulations to
    continually verify the algorithms.
        Question. Will URET impact DSR deployment? What is the transition
    plan for URET to co-exist with DSR in Indianapolis and Memphis? What is
    the Free Flight Phase 1 URET/DSR situation? How much of the FFP1
    request relates to the URET program?
        Answer. URET will have no impact on the DSR deployment. The URET
    prototypes will transition from the present M-1 control room to the new
    DSR control room as part of the overall Memphis and Indianapolis
    Centers DSR transition. The URET Core Capability Limited Deployment
    (CCLD) version, which starts initial daily use in November 2001 under
    FFP1, will be integrated with the DSR D-side console. Prior to that,
    however, the controllers and the FAA have agreed to continue URET
    prototype usage at the two facilities until November 2001. This
    required a work-around agreement with NATCA, which allows the FAA to
    mount the URET prototype display on an accentuated arm for controller
    use and to avoid a possible ``blackout'' at both facilities. The FFP1
    fiscal year 2000 budget request has a total of $83.2 million for URET.
    This includes $79.6 million for URET CCLD and $3.6 million for the URET
    prototype.
                              warehoused equipment
        Question. A recent report to the Committee on the FAA plans to
    install certain warehoused equipment noted that future installation and
    commissioning of the MALSR, ASOS, DVOR, REIL, and CFE systems, as well
    as other stored equipment, is contingent upon the availability of
    resources. Please provide a breakout from the budget request of the
    additional resources to install current inventory of warehoused
    equipment.
        Answer. Currently there are various systems and equipment being
    stored at the Federal Aviation Administration (FAA) Depot awaiting
    installation and commissioning at a future date. Specifically, these
    systems and their cost of installation are as follows:

                            [In millions of dollars]

    PAPI (67 sites @ $85K average installation cost).................. 5.695
    REIL (39 sites @ $50K average installation cost).................. 1.950
    MALSR (23 sites @ $500K average installation cost)................11.500
    DVOR Kits (8 sites @ 350K average installation cost).............. 2.800
    LPDA (16 sites @ $50K average installation cost).................. 0.800
    CFE (98 sites @ $257K average installation cost)..................25.186
                                                                      ______
          Total.......................................................47.931

        It is estimated that it would take the FAA a three to four year
    period to complete this installation effort. Presently the FAA is not
    warehousing any Automated Surface Observation Systems (ASOS) equipment.
                        instrument landing systems (ils)
        Question. We understand that the FAA requirements office has
    completed a review of airport locations that meet the FAA's
    establishment criteria for Instrument Landing Systems (ILS). Please
    provide the committee with a list of the airports and runways that
    qualify for the establishment of an ILS system, including the
    identification of Category I, Category II, and Category III sites.
        Answer. In 1998, the Federal Aviation Administration performed a
    cursory review of all airports using criteria identified in Airway
    Planning Standard Number One (APS-1) and Establishment and
    Discontinuance Criteria for Precision Landing Systems (FAA-APO-83-10).
    The criteria used established a listing of requirements for 120 airport
    locations that may qualify for runway precision approach capability.
    The locations are listed below:

    ----------------------------------------------------------------------------------------------------------------
                   State                        Airport                 Region           RWY            Type
    ----------------------------------------------------------------------------------------------------------------
    TX.................................  Houston (KHOU).......  ASW..................      22  CAT I
    LA.................................  Baton Rouge (KBTR)...  ASW..................      31  CAT I
    OK.................................  Oklahoma City          ASW..................     35L  CAT I
                                          (KOKC)ASW35LCAT I
                                          TXLubbock (KLBB).
    AR.................................  Fort Smith (KFSM)....  ASW..................       7  CAT I
    TX.................................  Midland (KMAF).......  ASW..................     34L  CAT I
    TX.................................  Abilene (KABI).......  ASW..................     17R  CAT I
    TX.................................  Corpus Christi (KCRP)  ASW..................      31  CAT I
    TX.................................  El Paso (KELP).......  ASW..................     26L  CAT I
    LA.................................  Lafayette (KLFT).....  ASW..................      4R  CAT I
    TX.................................  Tyler (KTYP).........  ASW..................       4  CAT I
    AK.................................  Anchorage (ANC)......  AAL..................      6L  CAT I
    AK.................................  Homer (HOM)..........  AAL..................       3  CAT I
    NY.................................  New York (JFK).......  AEA..................     22R  CAT II/III
    NY.................................  New York (JFK).......  AEA..................     13R  CAT I
    NY.................................  New York (LGA).......  AEA..................      22  CAT II/III
    NY.................................  New York (LGA).......  AEA..................      13  CAT II/III
    NY.................................  Buffalo (BUF)........  AEA..................      14  CAT I
    VA.................................  Norfolk (ORF)........  AEA..................       5  CAT II/III
    NJ.................................  Newark (EWR).........  AEA..................     22L  CAT II/III
    PA.................................  Philadelphia (PHL)...  AEA..................     27R  CAT II/III
    NJ.................................  Atlantic City (ACY)..  AEA..................      31  CAT I
    PA.................................  Allentown (ABE)......  AEA..................      24  CAT I
    VA.................................  Chantilly (IAD)......  AEA..................     19R  CAT II/III
    MD.................................  Baltimore (BWI)......  AEA..................     15R  CAT II/III
    DC.................................  National (DCA).......  AEA..................      33  CAT I
    DE.................................  Wilmington (ILG).....  AEA..................      19  CAT I
    NJ.................................  Wildwood (WWD).......  AEA..................      19  CAT I
    NY.................................  Syracuse (SYR).......  AEA..................      32  CAT I
    PA.................................  Philadelphia (PHL)...  AEA..................      25  CAT I
    PA.................................  Philadelphia (PHL)...  AEA..................      35  CAT I
    MA.................................  Martha's Vineyard      ANE..................       6  CAT I
                                          (MVY).
    MA.................................  Boston (BOS).........  ANE..................      32  CAT I
    CT.................................  Windsor Locks (BDL)..  ANE..................      15  CAT I
    WA.................................  Seattle-Sea-Tac (SEA)  ANM..................     16L  CAT III
    WA.................................  Seattle-Sea-Tac (SEA)  ANM..................     16W  CAT III
    MT.................................  Butte (BTM)..........  ANM..................      15  CAT I
    WA.................................  Seattle-Sea-Tac (SEA)  ANM..................     34W  CAT I
    WA.................................  Seattle-Sea-Tac (SEA)  ANM..................     16R  CAT I
    UT.................................  Salt Lake City (SLC).  ANM..................     34L  CAT III
    CO.................................  Colorado Spring (COS)  ANM..................     35R  CAT I
    CA.................................  Sacramento Int'l       AWP..................     34R  CAT I
                                          (SMF).
    CA \1\.............................  Fresno (FAT).........  AWP..................     29R  CAT II/III
    NV \1\.............................  Las Vegas--Mccarran    AWP..................     01R  CAT I
                                          Int. (LAS).
    NV.................................  Elko Muni--J.C.        AWP..................      23  CAT I
                                          Harris Field (EKO).
    CA.................................  Palm Springs Regional  AWP..................     31L  CAT I
                                          (PSP).
    CA.................................  Metropolitan Oakland   AWP..................     27L  CAT I
                                          Int'l (OAK).
    CA.................................  Buchanan Field (CCR).  AWP..................     19R  CAT I
    CA.................................  Palmdale (PMD).......  AWP..................       4  CAT I
    NV \1\.............................  North Las Vegas (VGT)  AWP..................      12  CAT I
    HI.................................  Honolulu Int'l (HNL).  AWP..................     08R  CAT I
    AZ.................................  Mesa--Falcon Field     AWP..................     04R  CAT I
                                          (FFZ).
    HI.................................  Kahului (OGG)........  AWP..................      20  CAT I
    AZ.................................  Laughlin--Bullhead     AWP..................      34  CAT I
                                          Int'l (IFP).
    CA.................................  Hayward Air Terminal   AWP..................     28L  CAT I
                                          (HWD).
    CA.................................  Napa County (APC)....  AWP..................     36L  CAT I
    CA.................................  Long Beach--Daugherty  AWP..................     25R  CAT I
                                          Field (LGB).
    MO.................................  Springfield-Branson    ACE..................       2  CAT II
                                          Regional (SGF).
    KS \1\.............................  Hays Muni (HYS)......  ACE..................      34  CAT I
    IA.................................  Cedar Rapids/The       ACE..................       9  CAT II
                                          Eastern Iowa (CID).
    IA.................................  Dubuque Regional       ACE..................      36  CAT I
                                          (DBQ).
    IA.................................  Des Monies Int'l       ACE..................       5  CAT I
                                          (DSM).
    IA.................................  Sioux City/Sioux       ACE..................      31  CAT II
                                          Gateway (SUX).
    NE.................................  Lincoln Muni (LNK)...  ACE..................     35L  CAT II
    FL.................................  Jacksonville Int'l     ASO..................      31  CAT I
                                          (JAX).
    NC.................................  Charlotte Douglas      ASO..................     18W  CAT III
                                          Int'l (CLT).
    NC.................................  Charlotte Douglas      ASO..................     36W  CAT III
                                          Int'l (CLT).
    FL.................................  Orlando-Sanford (SFB)  ASO..................     27R  CAT I
    NC.................................  Charlotte-Douglas      ASO..................     18R  CAT III
                                          Int'l (CLT).
    FL.................................  Orlando Int'l (MCO)..  ASO..................     18R  CAT III
    FL.................................  Daytona Beach Reg.     ASO..................     25R  CAT I
                                          (DAB).
    FL.................................  Orlando-Executive      ASO..................      25  CAT I
                                          (ORL).
    GA.................................  Atlanta-Hartsfield     ASO..................      28  CAT II
                                          Int'l (ATL).
    GA.................................  Atlanta-Hartsfield     ASO..................      10  CAT II
                                          Int'l (ATL).
    FL.................................  Panama City-Bay Co.    ASO..................      32  CAT I
                                          (PFN).
    FL.................................  Kendall-Tamiami Exec.  ASO..................     27L  CAT I
                                          (TMB).
    FL.................................  Kissimmee Mun. (ISM).  ASO..................      33  CAT I
    KY.................................  CVG./North KY Int'l.   ASO..................      27  CAT II/III
                                          (CVG).
    GA.................................  Savannah Int'l (SAV).  ASO..................      27  CAT I
    FL.................................  Tampa Int'l (TPA)....  ASO..................     36R  CAT I
    TN.................................  Knoxville (TYS)......  ASO..................     23L  CAT I
    TN.................................  McGhee Tyson (TYS)...  ASO..................     05R  CAT I
    FL.................................  Orlando Int'l (MCO)..  ASO..................     18L  CAT I
    FL.................................  Orlando Int'l (MCO)..  ASO..................     35R  CAT1
    KY.................................  Bowman Field (LOU)...  ASO..................      24  CAT I
    NC.................................  Raleigh-Durham Int'l   ASO..................     23L  CAT II/III
                                          (RDU).
    FL.................................  Tampa Int'l (TPA)....  ASO..................     18L  CAT III
    TN.................................  Nashville, JOHN C.     ASO..................      19  CAT1
                                          TUNE (JWN).
    FL.................................  Tampa Int'l (TPA)....  ASO..................      17  CAT I
    AL.................................  Birmingham Mun. (BHM)  ASO..................       5  CAT I
    FL.................................  Tampa Int'l (TPA)....  ASO..................      35  CAT III
    GA.................................  Valdosta Reg. (VLD)..  ASO..................      17  CAT I
    NC.................................  Greensboro/Piedmont    ASO..................      5N  CAT II/III
                                          Int'l (GSO).
    FL.................................  Southwest Fla. Reg.    ASO..................     06R  CAT I
                                          (RSW).
    FL.................................  Southwest Fla. Reg.    ASO..................     24L  CAT I
                                          (RSW).
    FL.................................  Southwest Fla. Reg.    ASO..................      24  CAT I
                                          (RSW).
    FL.................................  TAMPA, Vandenberg      ASO..................      22  CAT I
                                          (X16).
    FL.................................  Tallahassee (TLH)....  ASO..................      18  CAT I
    FL.................................  Tallahassee Reg.       ASO..................       9  CAT I
                                          (TLH).
    FL.................................  Pensacola Regional     ASO..................      35  CAT I
                                          (PNS).
    MS \1\.............................  Olive Branch (OLV)...  ASO..................      18  CAT I
    NC.................................  Greensboro/Piedmont    ASO..................     23N  CAT I
                                          Int'l (GSO).
    FL.................................  Ft. Lauderdale-        ASO..................     27L  CAT I
                                          Hollywood (FLL).
    FL.................................  Ft. Lauderdale Int'l   ASO..................     09R  CAT I
                                          (FLL).
    FL.................................  Ft. Lauderdale-        ASO..................      31  CAT I
                                          Hollywood (FLL).
    FL.................................  Ft. Lauderdale Int'l   ASO..................      13  CAT I
                                          (FLL).
    MS.................................  Jackson Int'l. (JAN).  ASO..................     34R  CAT I
    MS.................................  Jackson Int'l. (JAN).  ASO..................     16R  CAT I
    FL.................................  ST. PETERSBURG INTL (  ASO..................     17L  CAT II
                                          PIE).
    KY.................................  Blue Grass (LEX).....  ASO..................     22L  CAT I
    KY.................................  Blue Grass (LEX).....  ASO..................     04R  CAT I
    WI.................................  Milwaukee (MKE)......  AGL..................     25R  CAT I
    MN.................................  Duluth (DLH).........  AGL..................       9  CAT II
    MI.................................  Traverse City (TVC)..  AGL..................      36  CAT I
    MI.................................  Flint (FNT)..........  AGL..................      36  CAT I
    MI.................................  Grand Radips (GRR)...  AGL..................     23R  CAT I
    OH.................................  Columbus (CMH).......  AGL..................     10S  CAT I
    MN.................................  Minneapolis (MSP)....  AGL..................      17  CAT I
    MI.................................  Detroit (DTW)........  AGL..................       4  CAT III
    ----------------------------------------------------------------------------------------------------------------
    \1\ Sites were funded in the fiscal year 1999 appropriations.

                        instrument landing systems (ils)
        Question. How does the FAA's fiscal year 2000 budget propose to
    deal with these ILS and associated Distance Measuring Equipment (DME)
    requirements? Which of these ILS sites will be included in AIP grant
    agreements, and which sites will the FAA propose to include in an F&E
    budget request?
        Answer. The FAA did not request funding in fiscal year 2000 for the
    establishment of new Instrument Landing Systems (ILS) and ancillary
    equipment.
        Most of the Airport Improvement Program (AIP) projects related to
    an ILS are in the site preparation for other airport development, for
    instance runway safety areas.
        There has been a nominal amount of AIP funding in any given fiscal
    year for acquisition of ILS's and ancillary equipment. When the AIP
    funds an ILS, approach lighting, or Runway Visual Range equipment, the
    airport has the option of transferring responsibility for maintenance
    of the equipment to the FAA when the equipment meets FAA performance
    specifications. The FAA's funding of the ILS program has traditionally
    been funded in F&E.
        Question. The committee was pleased to see in January 1999, as a
    step toward meeting the Instrument Landing System (ILS) needs covered
    in the fiscal year 1999 Omnibus Appropriations Act, that the FAA
    conducted a market survey to determine the qualifications of
    manufacturers of commercial-off-the-shelf ILS systems. What are the
    agency's milestones for completing its ILS acquisition plan, for
    release of a solicitation for proposals, and for award of a contract
    for COTS ILS systems?
        Answer. The ILS Acquisition Plan is currently in the review cycle
    and should be approved by May 31, 1999. It is expected that the
    Screening Information Request will be released during the last quarter
    in fiscal year 1999 and a contract award made by the first quarter of
    fiscal year 2000.
        Question. The committee understands that turnkey installation of
    ILS systems may be faster and less expensive than if the FAA takes
    delivery of the hardware for later installation by the FAA. What are
    the comparative costs and timetables of these two approaches? Will
    turnkey installation be considered as an option in the COTS ILS
    contract?
        Answer. At this time, the Federal Aviation Administration (FAA)
    does not have comparative costs and timetables for FAA installation
    versus turnkey installation. The turnkey installation times and costs
    will not be available until a competitive commercial off-the-shelf ILS
    contract is awarded in the first quarter of fiscal year 2000 for
    systems to meet the fiscal year 1999 congressionally mandated
    requirements. The contract will include provisions for turnkey
    installation, but will be competed against a national installation
    program headed by the FAA's National Implementation Office. The lowest
    cost/best value for installation from these approaches will be
    selected.
        Question. The fiscal year 1999 Omnibus Appropriations Act contains
    funds for 13 new ILS installations. Please provide a status report on
    each of the ILS sites listed in the fiscal year 1999 conference report,
    including the timetable for site surveys and an estimated date (year
    and quarter) when the ILS is expected to be commissioned.
        Answer. The following is the status of each of the 13 new ILS
    installations listed in the fiscal year 1999 conference report:
        Stanley County, NC.--The non-fed ILS has already been installed and
    was commissioned in 1998. The site survey was completed in January
    1999, and the money allocated is intended on improving and maintaining
    the obstruction and safe areas. The airport manager is providing the
    FAA with a detailed list of projects and their schedule.
        March Airbase.--The site survey was completed in January 1999. The
    FAA intends to enter into a Cooperative Agreement with the March Joint
    Powers Authority (MJPA) for the transfer of funds and has coordinated a
    Memorandum of Understanding (MOU) outlining the areas of
    responsibility. The MJPA has agreed to have the ILS commissioned within
    18 months.
        Fresno, CA.--A MK-20 was purchased and delivered. The site survey
    was completed in January 1999. The region is in the process of
    initiating installation. Commissioning is expected first quarter of
    fiscal year 2000.
        McCarran International, NV.--A MK-20 was purchased. A site survey
    was completed in January 1999. Commissioning is expected in the third
    quarter of fiscal year 2000.
        The following sites will have existing MK-1F Localizer equipment
    upgraded to Cat I ILS capability by the addition of compatible glide
    slope and ancillary equipment. All site surveys have been completed.
        Hays Municipal, KS.--The region has initiated the upgrade in
    conjunction with the local authority. Funds have been provided to
    accomplish the work. Commissioning is expected in the fourth quarter of
    fiscal year 1999.
        Bessemer, AL.--A special survey determined the feasibility of using
    a short endfire glide slope antenna. A short endfire antenna has been
    identified and will be shipped to Bessemer when requested by the
    region. Funds have been transferred to the region to complete the
    upgrade. Commissioning is expected in the fourth quarter fiscal year
    1999.
        Olive Branch, MS.--The region has established upgrade plans. Funds
    have been transferred to the region to complete the upgrade.
    Commissioning is expected in the fourth quarter of fiscal year 1999.
        Clovis, NM.--The region has established upgrade plans. Funds have
    been transferred to the region to complete the upgrade. Commissioning
    is expected in the fourth quarter of fiscal year 1999.
        Zanesville, OH.--A special evaluation of upgrade equipment was
    conducted by Ohio University. The region has established upgrade plans,
    which will be modified based on the Ohio University results.
    Commissioning is expected in the fourth quarter of fiscal year 1999.
        The following sites, which have all been surveyed, will have Cat I
    ILS equipment provided by a competitive COTS contract. Contract award
    is expected in the first quarter of fiscal year 2000 with the first
    delivery expected in the third quarter of fiscal year 2000. A market
    survey has identified three possible vendors. While one vendor has
    obtained FAR-171 approval, another is close to receiving approval and
    the third has not initiated the FAR-171 process. FAR-171 approval is a
    pre-qualification requirement for the contract.
        Burlington Alamance, NC
        Everett-Stewart, TN
        Stennis International, MS
        North Las Vegas, NV
                      wide area augmentation system (waas)
        Question. Where is the WAAS program right now--please provide a
    summary describing the current status of the program, the alternative
    approaches that are actively under consideration, and what the
    administration's strategy and timetable is for restructuring and
    rebaselining the program?
        Answer. WAAS Initial Operational Capability (IOC) is scheduled to
    occur in September 2000. This 14-month schedule extension is due to the
    following factors: technical difficulties experienced with one of four
    software modules (the Corrections and Verification software module is a
    major software element that focuses on corrections, integrity,
    verification, and monitoring); additional time for both commissioning
    and assumption of operations and maintenance duties by Airways
    Facilities; accommodation of last year's congressional funding
    reductions; and time to reduce overall program risk.
        An Investment Analysis and program re-baseline is in process. The
    Investment Analysis is considering four main alternatives as outlined
    in the following chart:

    ----------------------------------------------------------------------------------------------------------------
                                                                                      WRS \1\    WMS \1\    GUS \1\
                                                                          GEOS         (WAAS      (WAAS     (Ground
                     Future Navigation Alternatives                  (Geostationery  Reference    Master     Uplink
                                                                       Satellite)     Station)   Station)   Station)
    ----------------------------------------------------------------------------------------------------------------
    I..............................................................  ..............  .........  .........  .........
    II.............................................................             3           13          3          6
    III............................................................             3           36          3          6
    IV.............................................................             4           58          3          8
    ----------------------------------------------------------------------------------------------------------------
    \1\ Additional units to be added to the current WAAS network.

        The Investment Analysis, scheduled for completion this summer, will
    result in a formal rebaselining of the WAAS and LAAS programs by the
    FAA. The FAA was encouraged by the recent Johns Hopkins University
    Applied Physics Laboratory report released in January 1999 that stated
    GPS, with appropriate WAAS/LAAS configurations, can satisfy the
    required navigation performance as the only navigation system installed
    in the aircraft and the only navigation service provided by the FAA.
        Question. FAA recently announced another significant delay in the
    WAAS program. What is the FAA's plan for meeting the list of near term
    precision approach requirements that have been identified?
        Answer. In July 1996 the FAA issued its Plan for Transition to
    Global Positioning System (GPS)-Based Navigation and Landing Guidance.
    This document outlines current FAA policy on meeting the requirements
    for precision approach. The FAA has made a concerted effort to develop
    GPS/Wide Area Augmentation Systems (WAAS) as a means to stem the
    spiraling costs of precision approaches at thousands of locations
    around the U.S. A conscious decision was made to sustain the current
    Instrument Landing Systems (ILS) infrastructure until Satellite
    Navigation becomes a reality. Although the schedule for the
    commissioning of WAAS has been delayed, the policy for decommissioning/
    sustainment is still valid, albeit with slight modifications to
    coincide with the schedule delay.
        The FAA is relying upon WAAS/Local Area Augmentation Systems (LAAS)
    to satisfy all unmet (current and future) precision approach
    requirements. Any new requests for precision approaches are being
    delayed pending the deployment of satellite navigation. Requests for
    sustainment/replacement are being handled on a case-by-case basis.
                           gps risk assessment study
        Question. What will the cost and schedule impact be on WAAS and
    LAAS if the FAA implements all of the recommendations in the Johns
    Hopkins GPS Risk Assessment Study?
        Answer. At this time, the FAA does not have the cost and schedule
    impact. The FAA is developing an action plan to respond to the
    recommendations. Additionally, the agency is reconfirming its plans for
    transition as requested by Congress. This is being accomplished through
    an updated investment analysis. The results of the investment analysis
    will be briefed to the FAA management this summer with an expected
    decision at that time.
        Question. What criteria does FAA contemplate for determining which
    of these identified ILS locations should be implemented first? Congress
    believes that priority should be given to airports with new runways or
    runway extension projects, airports that are experiencing air carrier
    delays and/or safety problems due to lack of precision approach, and
    airports that are experiencing significant growth which cannot be
    accommodated without a precision approach. In addition, should
    airports, which have been waiting for several years (since MLS) for a
    precision approach, receive consideration?
        Answer. The initial criteria to qualify for an instrument landing
    system are contained in the Airport Planning Standard Number One (APS-
    1), Terminal Air Navigation Facilities and Air Traffic Control
    Services. However, based on the plans to transition to WAAS, we have
    fielded only Category I systems necessary to enhance safety and meet
    congressional direction.
                                  gps jamming
        Question. We have seen reports about recent GPS jamming tests that
    disrupted the GPS signals along the East Coast recently. Tell us what
    you know about those tests. How often has the GPS signal been
    unavailable or unreliable for aviation and other users in the past
    year? Are you aware of additional tests or periods of GPS unreliability
    that can be expected this year?
        Answer. The Department of Defense (DOD) conducted a large scale
    Electronic Countermeasures (ECM) exercise on the East Coast during the
    last week of February 1999. This electronic jamming exercise
    deliberately interfered with many systems (both government and non-
    government) including GPS. The DOD conducts this type of testing to
    ensure their readiness in a national emergency and to determine the
    necessary equipment fixes to resist that jamming environment.
        This late February 1999 exercise is one of many planned and
    controlled ECM exercises scheduled for 1999. All ECM missions are fully
    coordinated with FAA and other radio spectrum users.
        There were 30 GPS interference tests/exercises coordinated in 1997
    and 31 in 1998. Each test/exercise was accomplished over multiple
    dates. GPS service was interrupted in select and controlled areas for
    approximately 950 hours during 1998. Every one of the events was fully
    coordinated. Additionally, the FAA notified all aviators and provided
    alternate landing and/or navigation aids to support DOD's need to test.
        Testing this year is progressing at the same rate as the last two
    years, and the FAA expects to coordinate approximately 30 tests in
    1999.
        Question. There are complex questions and uncertainties about the
    effects of jamming, unintentional interference or ionospheric
    disturbances on GPS. What will happen if these problems do disrupt GPS
    navigation and we have to become totally dependent on satellite
    navigation? What is the estimated price tag for the Federal Government
    or for users in providing the necessary safety margin against these
    problems?
        Answer. Ionospheric disturbances and radio-frequency interference
    (RFI) caused by jamming or unintentional interference can impact GPS
    and augmented GPS services in one of two ways: (1) RFI results in a
    loss of satellite navigation service in the geographic area where the
    RFI is present by denying users a sufficient number or quality of GPS
    signals to provide positioning service and (2) severe ionospheric
    disturbances can degrade signals (numbers or quality) from satellites
    in a particular part of the sky to the extent that service availability
    is reduced (possibly curtailing high-accuracy GPS procedures such as
    precision approach). Potential solutions to RFI include the
    implementation of avionics with appropriate levels of immunity and/or
    the retention of part of the existing ground NAVAID infrastructure. A
    set of navigation architecture candidates (different combinations of
    avionics and ground NAVAID investments) that address the RFI issue have
    been defined by the FAA's GPS Investment Analysis Team. A preferred
    solution is expected to be recommended in July 1999. Ionospheric
    disturbances of the GPS signal can be addressed through a combination
    of forecasts, early detection/warning, and appropriate operational
    procedures.
        Cost estimates for the FAA to provide a secondary or redundant
    navigation system to be used when the satellite based navigation system
    is not operational are not available at this time. The FAA is updating
    its GPS Investment Analysis (IA). This updated GPS IA will include
    costs necessary to sustain ground-based navigation aids for backup
    purposes for a minimum of 15 years. The updated GPS IA is expected to
    be completed in July 1999.
                       multimodal radionavigation systems
        Question. We hear from constituents, the General Accounting Office,
    and the Department of Transportation Inspector General that backup
    navigation systems are going to be necessary for the foreseeable future
    because of a full range of complex questions about satellite
    navigation. Tell us what existing radionavigation systems offer
    multimodal benefits to various transportation users and beneficiaries,
    not just aviation users, and which navaids might be most compatible
    with satellite navigation for backup purposes?
        Answer. The global positioning system (GPS) and LORAN-C provide
    multimodal radionavigation service. Both systems support aviation,
    marine, and trucking operations, and GPS is beginning to support rail
    operations. Both systems also provide precise time dissemination to the
    telecommunications and scientific communities.
        Two basic requirements must be met to provide an aviation backup to
    satellite navigation and landing operations: 1) the pilot must be able
    to navigate to and hold and circle in the airspace at a specified
    position, and 2) the pilot must be able to fly at least a nonprecision
    instrument approach. Holding is the safety valve for regulating demand
    to assure separation when systems fail. Air traffic controllers can
    then safely manage aircraft approach and landing operations. The
    ability to fly a nonprecision approach, either at the intended
    destination airport or at an alternate airport, is necessary to recover
    aircraft during instrument meteorological conditions.
        The very-high frequency omnidirectional range (VOR), nondirectional
    beacons (NDB), inertial navigation systems on the aircraft (currently
    updated from distance measuring equipment), and tactical air navigation
    systems (TACAN) meet these requirements today. Current LORAN-C avionics
    can meet only the holding requirement; there are no LORAN-C avionics
    available today that are approved for instrument approach operations.
                        instrument landing system (ils)
        Question. The DOT Inspector General has indicated that backup
    navigation capability should be provided for the next 15 years because
    it is likely the transition to satellite navigation will not be in
    place until 2015. We know there is a backlog of unmet requirements for
    Instrument Landing System (ILS) equipment and in recent years the
    Committee has provided additional resources to accommodate many of
    these needs. Because of concerns about the backlog of requirements, the
    FAA was asked to do a survey and analysis of existing and future needs
    for ILS equipment. Will you provide us the results of that analysis and
    a list of all the locations for which the FAA has identified current or
    future ILS requirements?
        Answer. In 1998, the FAA performed a cursory review of all airports
    using criteria identified in the Airway Planning Standard Number One
    (APS-1) and Establishment and Discontinuance Criteria for Precision
    Landing Systems (FAA-APO-83-10). The criteria used established a
    listing of 120 airport locations that may qualify for runway precision
    approach capability. The locations are listed in the table that
    follows:

    ----------------------------------------------------------------------------------------------------------------
                   State                        Airport                 Region           RWY            Type
    ----------------------------------------------------------------------------------------------------------------
    TX.................................  Houston (KHOU).......  ASW..................      22  CAT I
    LA.................................  Baton Rouge (KBTR)...  ASW..................      31  CAT I
    OK.................................  Oklahoma City (KOKC).  ASW..................     35L  CAT I
    TX.................................  Lubbock (KLBB).......  ASW..................     35L  CAT I
    AR.................................  Fort Smith (KFSM)....  ASW..................       7  CAT I
    TX.................................  Midland (KMAF).......  ASW..................     34L  CAT I
    TX.................................  Abilene (KABI).......  ASW..................     17R  CAT I
    TX.................................  Corpus Christi (KCRP)  ASW..................      31  CAT I
    TX.................................  El Paso (KELP).......  ASW..................     26L  CAT I
    LA.................................  Lafayette (KLFT).....  ASW..................      4R  CAT I
    TX.................................  Tyler (KTYP).........  ASW..................       4  CAT I
    AK.................................  Anchorage (ANC)......  AAL..................      6L  CAT I
    AK.................................  Homer (HOM)..........  AAL..................       3  CAT I
    NY.................................  New York (JFK).......  AEA..................     22R  CAT II/III
    NY.................................  New York (JFK).......  AEA..................     13R  CAT I
    NY.................................  New York (LGA).......  AEA..................      22  CAT II/III
    NY.................................  New York (LGA).......  AEA..................      13  CAT II/III
    NY.................................  Buffalo (BUF)........  AEA..................      14  CAT I
    VA.................................  Norfolk (ORF)........  AEA..................       5  CAT II/III
    NJ.................................  Newark (EWR).........  AEA..................     22L  CAT II/III
    PA.................................  Philadelphia (PHL)...  AEA..................     27R  CAT II/III
    NJ.................................  Atlantic City (ACY)..  AEA..................      31  CAT I
    PA.................................  Allentown (ABE)......  AEA..................      24  CAT I
    VA.................................  Chantilly (IAD)......  AEA..................     19R  CAT II/III
    MD.................................  Baltimore (BWI)......  AEA..................     15R  CAT II/III
    DC.................................  National (DCA).......  AEA..................      33  CAT I
    DE.................................  Wilmington (ILG).....  AEA..................      19  CAT I
    NJ.................................  Wildwood (WWD).......  AEA..................      19  CAT I
    NY.................................  Syracuse (SYR).......  AEA..................      32  CAT I
    PA.................................  Philadelphia (PHL)...  AEA..................      25  CAT I
    PA.................................  Philadelphia (PHL)...  AEA..................      35  CAT I
    MA.................................  Martha's Vineyard      ANE..................       6  CAT I
                                          (MVY).
    MA.................................  Boston (BOS).........  ANE..................      32  CAT I
    CT.................................  Windsor Locks (BDL)..  ANE..................      15  CAT I
    WA.................................  Seattle-Sea-Tac (SEA)  ANM..................     16L  CAT III
    WA.................................  Seattle-Sea-Tac (SEA)  ANM..................     16W  CAT III
    MT.................................  Butte (BTM)..........  ANM..................      15  CAT I
    WA.................................  Seattle-Sea-Tac (SEA)  ANM..................     34W  CAT I
    WA.................................  Seattle-Sea-Tac (SEA)  ANM..................     16R  CAT I
    UT.................................  Salt Lake City (SLC).  ANM..................     34L  CAT III
    CO.................................  Colorado Spring (COS)  ANM..................     35R  CAT I
    CA.................................  Sacramento Int'l       AWP..................     34R  CAT I
                                          (SMF).
    CA \1\.............................  Fresno (FAT).........  AWP..................     29R  CAT II/III
    NV \1\.............................  Las Vegas--Mccarran    AWP..................     01R  CAT I
                                          Int. (LAS).
    NV.................................  Elko Muni--J.C.        AWP..................      23  CAT I
                                          Harris Field (EKO).
    CA.................................  Palm Springs Regional  AWP..................     31L  CAT I
                                          (PSP).
    CA.................................  Metropolitan Oakland   AWP..................     27L  CAT I
                                          Int'l (OAK).
    CA.................................  Buchanan Field (CCR).  AWP..................     19R  CAT I
    CA.................................  Palmdale (PMD).......  AWP..................       4  CAT I
    NV \1\.............................  North Las Vegas (VGT)  AWP..................      12  CAT I
    HI.................................  Honolulu Int'l (HNL).  AWP..................     08R  CAT I
    AZ.................................  Mesa--Falcon Field     AWP..................     04R  CAT I
                                          (FFZ).
    HI.................................  Kahului (OGG)........  AWP..................      20  CAT I
    AZ.................................  Laughlin--Bullhead     AWP..................      34  CAT I
                                          Int'l (IFP).
    CA.................................  Hayward Air Terminal   AWP..................     28L  CAT I
                                          (HWD).
    CA.................................  Napa County (APC)....  AWP..................     36L  CAT I
    CA.................................  Long Beach--Daugherty  AWP..................     25R  CAT I
                                          Field (LGB).
    MO.................................  Springfield-Branson    ACE..................       2  CAT II
                                          Regional (SGF).
    KS \1\.............................  Hays Muni (HYS)......  ACE..................      34  CAT I
    IA.................................  Cedar Rapids/The       ACE..................       9  CAT II
                                          Eastern Iowa (CID).
    IA.................................  Dubuque Regional       ACE..................      36  CAT I
                                          (DBQ).
    IA.................................  Des Monies Int'l       ACE..................       5  CAT I
                                          (DSM).
    IA.................................  Sioux City/Sioux       ACE..................      31  CAT II
                                          Gateway (SUX).
    NE.................................  Lincoln Muni (LNK)...  ACE..................     35L  CAT II
    FL.................................  Jacksonville Int'l     ASO..................      31  CAT I
                                          (JAX).
    NC.................................  Charlotte Douglas      ASO..................     18W  CAT III
                                          Int'l (CLT).
    NC.................................  Charlotte Douglas      ASO..................     36W  CAT III
                                          Int'l (CLT).
    FL.................................  Orlando-Sanford (SFB)  ASO..................     27R  CAT I
    NC.................................  Charlotte-Douglas      ASO..................     18R  CAT III
                                          Int'l (CLT).
    FL.................................  Daytona Beach Reg.     ASO..................     25R  CAT I
                                          (DAB).
    FL.................................  Orlando Int'l (MCO)..  ASO..................     18R  CAT III
    FL.................................  Orlando-Executive      ASO..................      25  CAT I
                                          (ORL).
    GA.................................  Atlanta-Hartsfield     ASO..................      28  CAT II
                                          Int'l (ATL).
    GA.................................  Atlanta-Hartsfield     ASO..................      10  CAT II
                                          Int'l (ATL).
    FL.................................  Miami Int'l (MIA)....  ASO..................      9R  CAT III
    FL.................................  Panama City-Bay Co.    ASO..................      32  CAT I
                                          (PFN).
    FL.................................  Kendall-Tamiami Exec.  ASO..................     27L  CAT I
                                          (TMB).
    FL.................................  Kissimmee Mun. (ISM).  ASO..................      33  CAT I
    KY.................................  CVG./North KY Int'l.   ASO..................      27  CAT II/III
                                          (CVG).
    GA.................................  Savannah Int'l (SAV).  ASO..................      27  CAT I
    FL.................................  Tampa Int'l (TPA)....  ASO..................     36R  CAT I
    TN.................................  Knoxville (TYS)......  ASO..................     23L  CAT I
    TN.................................  McGhee Tyson (TYS)...  ASO..................     05R  CAT I
    FL.................................  Orlando Int'l (MCO)..  ASO..................     18L  CAT I
    FL.................................  Orlando Int'l (MCO)..  ASO..................     35R  CAT1
    KY.................................  Bowman Field (LOU)...  ASO..................      24  CAT I
    NC.................................  Raleigh-Durham Int'l   ASO..................     23L  CAT II/III
                                          (RDU).
    FL.................................  Tampa Int'l (TPA)....  ASO..................     18L  CAT III
    TN.................................  Nashville, JOHN C.     ASO..................      19  CAT1
                                          TUNE (JWN).
    FL.................................  Tampa Int'l (TPA)....  ASO..................      17  CAT I
    AL.................................  Birmingham Mun. (BHM)  ASO..................       5  CAT I
    FL.................................  Tampa Int'l (TPA)....  ASO..................      35  CAT III
    GA.................................  Valdosta Reg. (VLD)..  ASO..................      17  CAT I
    NC.................................  Greensboro/Piedmont    ASO..................      5N  CAT II/III
                                          Int'l (GSO).
    FL.................................  Southwest Fla. Reg.    ASO..................     06R  CATI
                                          (RSW).
    FL.................................  Southwest Fla. Reg.    ASO..................     24L  CAT I
                                          (RSW).
    FL.................................  Southwest Fla. Reg.    ASO..................      24  CAT I
                                          (RSW).
    FL.................................  TAMPA, Vandenberg      ASO..................      22  CAT I
                                          (X16).
    FL.................................  Tallahassee (TLH)....  ASO..................      18  CAT I
    FL.................................  Tallahassee Reg.       ASO..................       9  CAT I
                                          (TLH).
    FL.................................  Pensacola Regional     ASO..................      35  CAT I
                                          (PNS).
    MS \1\.............................  Olive Branch (OLV)...  ASO..................      18  CAT I
    NC.................................  Greensboro/Piedmont    ASO..................     23N  CAT I
                                          Int'l (GSO).
    FL.................................  Ft. Lauderdale-        ASO..................     27L  CAT I
                                          Hollywood (FLL).
    FL.................................  Ft. Lauderdale Int'l   ASO..................     09R  CAT I
                                          (FLL).
    FL.................................  Ft. Lauderdale-        ASO..................      31  CAT I
                                          Hollywood (FLL).
    FL.................................  Ft. Lauderdale Int'l   ASO..................      13  CAT I
                                          (FLL).
    MS.................................  Jackson Int'l. (JAN).  ASO..................     34R  CAT I
    MS.................................  Jackson Int'l. (JAN).  ASO..................     16R  CAT I
    FL.................................  ST. PETERSBURG INTL (  ASO..................     17L  CAT II
                                          PIE).
    KY.................................  Blue Grass (LEX).....  ASO..................     22L  CAT I
    KY.................................  Blue Grass (LEX).....  ASO..................     04R  CAT I
    WI.................................  Milwaukee (MKE)......  AGL..................     25R  CAT I
    MN.................................  Duluth (DLH).........  AGL..................       9  CAT II
    MI.................................  Traverse City (TVC)..  AGL..................      36  CAT I
    MI.................................  Flint (FNT)..........  AGL..................      36  CAT I
    MI.................................  Detroit (DTW)........  AGL..................       4  CAT III
    MI.................................  Grand Radips (GRR)...  AGL..................     23R  CAT I
    OH.................................  Columbus (CMH).......  AGL..................     10S  CAT I
    MN.................................  Minneapolis (MSP)....  AGL..................      17  CAT I
    ----------------------------------------------------------------------------------------------------------------
    \1\ Sites were funded in the fiscal year 1999 appropriations.

                                    loran-c
        Question. We are aware of a draft report that Booz-Allen & Hamilton
    (BAH) did in examining the costs and benefits of LORAN. According to
    that report, users and user organizations expressed virtually unanimous
    support for continuing LORAN, citing both economic and safety
    justifications. We also understand the BAH work concluded that LORAN is
    very cost-effective, accurate, and provides benefits for millions of
    users, including aviation as well as marine and other users. Doesn't it
    make sense to continue supporting a proven, multimodal radionavigation
    system such as LORAN well into the next century, particularly when it
    is among the least expensive and perhaps one of the best technical
    complements to GPS?
        Answer. The Department of Transportation, the U.S. Coast Guard, and
    the Federal Aviation Administration are deliberating on the merits of
    continuing to provide LORAN-C service beyond the currently planned
    termination date of December 31, 2000. We have not yet reached a
    decision as to whether or not to extend the life of the system.
        Question. When the Secretary testified, he indicated that because
    of the significant interest by the user community in continuing LORAN
    and because the value and benefits of providing this technology was
    apparent, he wanted to work with Congress in continuing to provide
    LORAN service. Tell us what specific actions the FAA is taking to
    assure that the LORAN infrastructure is revitalized and LORAN continues
    to be available well into the next century?
        Answer. The Department of Transportation is still considering the
    merits of extending the service life of LORAN-C. Decisions on specific
    actions will be considered within the context of any future decision.
                      wide area augmentation system (waas)
        Question. If there are further delays with the WAAS program, does
    the FAA have a plan in place to deal with the increasing O & M costs of
    aging ground based navigational systems in the NAS? What is the average
    age of ILS systems in the NAS, and at what point will these systems
    become a safety problem if not upgraded or replaced?
        Answer. The FAA has a process in place to sustain equipment and
    systems should further delays with the WAAS program result. NAS
    infrastructure sustainment meetings were held in February and March of
    this year to address this particular situation. The ILS system in
    particular was identified as needing further sustainment. The FAA has a
    Service Life Extension Program (SLEP) ongoing to upgrade older model
    ILS's to state-of-the-art technology using solid state components. The
    SLEP will increase reliability and availability of the equipment.
        The average age of ILS systems is between 10 and 15 years old.
    Current systems are expected to have a useful life of another 5 to 10
    years due to modifications under the SLEP.
            standard terminal automation replacement system (stars)
        Question. Have all the human factors and related issues on STARS
    been resolved?
        Answer. No, not all of the human factors and related issues have
    been resolved. We have resolved a significant number of human factors
    issues through a collaborative effort with NATCA and PASS.
        Agreement has been reached on the resolution and disposition of all
    STARS Early Display Configuration (EDC) human factors issues.
    Development of solutions to the remaining EDC human factors issues is
    currently on-going.
        We have also proceeded with development of solutions to STARS full
    service system human factors issues that we know from our experience
    with EDC human factors issues. In addition, an assessment of other
    STARS full service system human factors issues is currently ongoing.
    The assessment and related follow-on activities will be completed this
    summer. The cost and schedule impacts for implementing human factors
    solutions to the full service system will be available in the fall of
    1999.
        Question. Does the FAA have a firm plan and schedule for the
    implementation of STARS?
        Answer. The FAA recently developed an alternate program
    implementation approach that addresses near-term equipment requirements
    while STARS software development continues. Under the revised plan,
    major components and initial deployment schedules are as follows:
        STARS:
      --Incremental development at two lower level FAA key sites.
      --First key site initial operations: first quarter fiscal year 2000.
      --Continue deployment of first FAA full service system to Eglin and
            other DOD sites.
      --Eglin full operations: third quarter fiscal year 2000.
      --Merge DOD and FAA baselines after FAA full service system (with
            computer-human interface changes) acceptance Existing Systems.
      --Procure ARTS color displays (ACDs) for selected large TRACONs to
            meet near-term critical needs.
      --First site (New York TRACON) initial operations: August 2000.
        An assessment of STARS full service system human factors issues is
    currently ongoing. The assessment and related follow-on activities will
    be completed this summer. The cost and schedule impacts for
    implementing human factors solutions to the full service system will be
    available in the fall of 1999.
        Question. Is the implementation of the Early Display Configuration
    (EDC) timely to solve the operational problems with the displays at
    Washington Reagan National Airport and the New York and Dallas-Ft.
    Worth TRACONs?
        Answer. Under the FAA's revised program implementation approach,
    the EDC will not be deployed at the sites identified above. Our revised
    plan includes deploying ARTS color displays (ACDs) to these three sites
    beginning in the summer of 2000. The ACDs are being procured because
    they are readily available, fulfill an urgent need to replace displays,
    and can be deployed at these sites before the STARS is ready for
    operations. The EDC will be deployed at two lower level facilities
    (Syracuse and El Paso) with lower traffic volumes and less complex
    operations.
        Question. Is the ``Ollie'' system configured to meet all of the air
    traffic controller ``CHI'' issues that the STARS system has been (or is
    anticipated to be) modified to address? If not, then when will those
    ``CHI'' elements not currently integrated in ``Ollie'' be eliminated
    from the STARS procurement? Conversely, provide a schedule estimate for
    modifying ``Ollie'' to meet all the ``CHI'' concerns addressed in the
    STARS procurement and provide a cost estimate of doing the software and
    hardware modifications to ``Ollie''.
        Answer. No, the ARTS color display (ACD) (known as ``Ollie'') is
    not configured to meet all of the computer-human interface (CHI)
    requirements identified for the STARS system. The ACDs are being
    procured because they are readily available (prior to STARS
    availability) and fulfill an urgent need for displays at several large
    TRACONs. The ACDs are functionally equivalent to the existing displays,
    and controllers are familiar with their operation. Both the controllers
    and the system specialists (who will maintain the displays) have agreed
    to accept the displays ``as is.'' Once the ACDs are installed, the FAA
    does not plan to upgrade them, since STARS will replace them (along
    with the current automation system). The FAA is not planning to
    eliminate the CHI modifications from STARS, since the unions have
    determined that these changes are required to make the system
    operationally suitable and acceptable to the FAA work force.
                                 safe flight 21
        Question. The Committee is concerned that the Alaskan Capstone
    program is not currently considered to be part of the Safe Flight 21
    program from the budget justification presentation and communications
    from the FAA. Is this accurate? If it is considered to be part of the
    program, how much of the Safe Flight budget request is slated for
    Capstone activities?
        Answer. The Alaskan Capstone Program is considered part of Safe
    Flight 21 and is included in the Safe Flight 21 budget justification.
    Funding for Alaska Capstone and Ohio Valley was earmarked by Congress
    in fiscal year 1999. Specifically, Congress provided $11.0 million for
    the Alaska ``Capstone'' initiative and $5.0 million for ADS-B prototype
    testing in the Ohio Valley. However, since both programs have similar
    goals, their efforts are being merged to leverage the benefits received
    from each respective budget. The future budget requests satisfy both
    Alaska Capstone and Ohio Valley initiatives.
        In fiscal year 2000, $7.0 million of the $16.0 million budget
    request for Safe Flight 21 is for Alaska Capstone.
                 research, engineering and development (r,e&d)
        Question. Please provide an aggregate R, E&D appropriated budget
    level for the past 20 fiscal years.
        Answer.

      Research, Engineering and Development Appropriation Aggregate R,E&D
                           Appropriated Budget Levels

                           [In thousands of dollars]

                                                                     Enacted
                                                               Appropriation
            Fiscal year                                               Levels

    1999.........................................................\1\ 150,147
    1998..........................................................   199,183
    1997..........................................................   208,412
    1996..........................................................   185,698
    1995..........................................................   259,192
    1994..........................................................   254,000
    1993..........................................................   230,000
    1992..........................................................   218,135
    1991..........................................................   205,000
    1990..........................................................   170,163
    1989..........................................................   160,000
    1988..........................................................   153,425
    1987..........................................................   141,700
    1986..........................................................   237,050
    1985..........................................................   265,000
    1984..........................................................   263,452
    1983..........................................................   177,755
    1982..........................................................    79,805
    1981..........................................................   105,625
    1980..........................................................    92,508
                        --------------------------------------------------------------
                        ____________________________________________________

      Total....................................................... 3,756,250

    \1\ Includes $147 thousand supplemental for Year 2000 compliance.

                            threat image projection
        Question. In the December 2, 1998, issue of Aviation Daily, it was
    reported that Vivid Technologies ``unveiled a system that enables
    security supervisors to evaluate the performance of airport screeners
    using its explosives detection devices. The Threat Image Projection
    (TIP) system transmits stored bag images to test an operator between
    ``live' bags generated by a Vivid system screening real passenger
    baggage.'' Does the FAA currently undertake any research into systems
    designed to evaluate or train airport screeners or to evaluate systems
    developed by industry to do the same? What is the FAA's current
    thinking on the role such systems have to play in improving the
    professionalism and integrity of the integrated aviation security
    system?
        Answer. In fiscal year 1992, when the FAA Aviation Security Human
    Factors R&D program was first established, a Commerce Business Daily
    (CBD) announcement was published with functional requirements to
    industry for the development of TIP for x-rays. In fiscal year 1993,
    with initial funding for aviation security human factors, the scope of
    technologies to enhance the screeners' capability to detect improvised
    explosives devices was expanded by development of Computer Based
    Training (CBT) for screeners. A second CBD announcement was issued in
    fiscal year 1994, requiring enhanced TIP and CBT. In fiscal year 1996,
    the FAA aviation security human factors program provided grants to air
    carriers to upgrade 283 x-rays with TIP. Some x-ray vendors were
    successful on new x-rays but were unable to upgrade older x-rays. The
    FAA has been working with E,G&G Astrophysics, Heimann, Rapiscan, and
    Vivid Technologies for the development and deployment of TIP on x-ray
    equipment.
        The FAA believes TIP will improve the professionalism and integrity
    of the integrated aviation security system by providing: on-the-job
    training capability to have screeners see improvised explosive devices
    on a more frequent basis and to increase their vigilance; ability to
    determine individual screener weaknesses and identify remedial training
    requirements; on-line performance capability for screening company
    supervisors, air carriers, and FAA to monitor checkpoint performance;
    and the ability to determine a reasonable expected level of performance
    for all screeners, nationwide.
                          explosives detection systems
        Question. The fiscal year 1999 Emergency Supplemental
    Appropriations Bill included $24.6 million for acquisition of Threat
    Image Projection-ready (TIP) airport X-ray equipment to screen carry-on
    baggage. I understand that the FAA considers TIP technology as an
    important new system component for maintaining the effectiveness of X-
    ray system operators. The committee is concerned that despite recent
    communication from FAA staff showing that these funds will be expended
    this fiscal year for new TIP equipment, the procurement is moving very
    slowly and may actually be delayed. Please provide a detailed summary
    of all activity to date regarding the procurement of TIP-ready systems
    utilizing the $24.6 million in allocated funds. In addition, please
    explain the status of the procurement and any changes in process or
    specifications that may affect the acquisition and the timetable.
        Answer. In fiscal year 1998 the x-ray vendors' TIP systems were
    still under development, and the following tests were performed:
      --Initial FAA aviation security laboratory test.
      --Operational assessment by air carriers.
        Vendors were not ready for acquisition by the SEIPT until April
    1999. The SEIPT has the following procurement schedule:
      --Screener Information Request (an acquisition tool) issued and
            initial vendors information meeting held April 5.
      --FAA laboratory test of TIP systems, the week of April 19.
      --Lease 10 units from each successful vendor in May for airport
            testing.
      --FAA Screener Assist Technology laboratory test, the week of June
            14.
      --Award contract(s) by June 30.
      --Deploy x-rays July-September at all Category-X airports.
                              aircraft insulation
        Question. Please summarize the nature and funding level of research
    into the flammability of aircraft insulation over the past 10 fiscal
    years. In addition, please provide the budget request level for these
    activities for fiscal years 1996-2000.
        Answer. Research into the flammability of aircraft insulation has
    been related to improvements in postcrash fuel fire burnthrough
    resistance and improvements in resistance to in-flight fire ignition
    and flame spread. A summary of activities follows:
        Full-scale test re-creation of the Air Tours 737 accident in
    Manchester, England.--Corroborated early burnthrough time (1 minute)
    determined by accident investigators and mapped out fire hazard spread
    with time and distance in the cabin. Final report published. 1990.
        Evaluation of improved insulation materials to delay postcrash fuel
    fire burnthrough.--A full-scale test rig married to a 707-fuselage
    section was designed and built for the evaluation of improved
    insulation blankets under full-scale fuel fire conditions. Twenty-eight
    tests were conducted. It was shown that either improvements in current
    insulation blankets or insulation blanket replacement materials could
    extend the burnthrough time for 5 or more minutes as compared to
    current materials, which allow burnthrough in approximately 1.5
    minutes. Final report published. 1994-1997.
        Standardization of industry fire test method.--A round robin study
    involving eight laboratories compared insulation film bagging materials
    with the current FAA test requirement and a test method employed by
    Boeing (small flame ignition resistance). It was shown that metallized
    Mylar usually passed the FAA standard but always failed the industry
    test, which was subsequently standardized. Final report published.
    1996-1997.
        Small-scale fire test method and criteria for insulation blanket
    burnthrough resistance.--A test method and criteria was developed into
    a standard and various materials were evaluated. 1998-1999.
        Burnthrough resistance benefits during a postcrash fire.--World-
    wide aircraft accidents over the past 20 years were analyzed to
    determine the benefit of insulation blanket burnthrough barriers. On
    the average it was determined that approximately six lives could be
    saved per year. Final report drafted. 1998-1999.
        Small-scale fire test method and criteria for insulation blanket
    in-flight fire resistance.--Small, intermediate and full-scale tests
    are being conducted to develop test criteria for insulation blankets
    against in-flight fire. 1999.
        Funding levels.--

                           [In thousands of dollars]

            Fiscal year                                       Budget request
    1990..............................................................   425
    1991....................................................................
    1992....................................................................
    1993....................................................................
    1994..............................................................   375
    1995..............................................................   350
    1996..............................................................   425
    1997..............................................................   175
    1998..............................................................   175
    1999...........................................................\1\ 1,000
    2000....................................................................

    \1\ In order to respond timely to issues resulting from the Swiss Air
    accident, $450,000 was redirected from other aircraft safety budget line
    items. This work is expected to conclude in fiscal year 1999.

                     coordinated faa/nasa research efforts
        Question. Please provide a description of the nature of the
    coordinated research efforts between the FAA and the NASA and the
    rationale for what type of research activities are more appropriately
    funded in the NASA budget, the FAA budget, or both.
        Answer. FAA and NASA coordinated research is focused in the areas
    of aviation safety, aviation efficiency and aviation environmental
    compatibility. Major emphasis areas of the joint aviation safety
    research are accident precursor identification, safety risk management,
    accident prevention, and mitigation of consequences. Significant
    collaborative research efforts in the area of aviation efficiency are
    the definition and evolution of the National Airspace System (NAS)
    architecture, development of prototype systems as first steps in
    implementing new technology into the nation's aviation system, and
    determining how to improve the effectiveness of the critical human
    centered components of the future global aviation system. In the area
    of environmental compatibility research, FAA and NASA research efforts
    are combining to better assess and develop safe and affordable
    technology options for reducing aircraft noise and emissions while
    allowing a sustained growth of aviation.
        NASA research efforts deal with the development of new breakthrough
    technologies and the exploration of revolutionary new aviation system
    operational concepts. FAA research is more linked with the near term
    application of technology and science for immediate use in its
    modernization and regulatory programs. Both FAA and NASA budgets must
    support their parts of the joint research. NASA, to be effective in its
    far term efforts, must be familiar with the present day operation of
    the NAS. In the area of NAS efficiency, the new technology and concepts
    developed by NASA have to be matured and validated sufficiently to
    allow easy handoff to the FAA for implementation within the NAS.
    Similarly, FAA must be adequately funded to allow its participation in
    the evaluation of the NASA conceptual research products and to reap the
    benefits of its own near term applied research programs in airspace
    redesign; operational concept evolution; airport capacity studies; and
    communications, navigation, surveillance, and automation system design.
        NASA's enabling legislation directs that agency to maintain U.S.
    leadership in aeronautical science and technology. In most
    environmental compatibility considerations, that results in NASA being
    provided the major resources for research and development activities.
    However, because the FAA, as an operational agency, is generally more
    sensitive to environmental needs, we are often able to provide
    practical advice in establishing related goals and programs.
        Therefore, FAA environmental research activities have recently
    emphasized assessment capability (e.g., computer simulation of
    technology application in fleet operation) and improving techniques for
    certification of engines and aircraft to noise and emissions regulatory
    standards.
                              waas program summary
        Question. Since the Johns Hopkins Report on GPS interference was
    issued, a number of respected people in industry and the scientific
    community feel strongly that the report glossed over the issues related
    to solar interference. With solar maximum set to occur within the next
    couple of years, there is concern about how little is actually known
    about predicting the severity and timing of solar events. Given the
    FAA's desire to move toward the use of GPS as a sole source of
    navigation information, what R&D is FAA conducting to be able to assure
    the public that it has a clear understanding of how to forecast solar
    events affecting satellite communications that could compromise the
    safety of aircraft using GPS?
        Answer. The FAA has an R&D Ionospheric Working Group (IWG)
    consisting of experienced personnel from the FAA, Stanford University,
    Jet Propulsion Laboratory, Raytheon, Zeta, ISI, and MITRE's Center for
    Advanced Aviation System Development. Through analysis of extensive
    data gathered worldwide over the last decade, the group believes it has
    a solid understanding of the ionospheric signal delay phenomenon, as
    well as spatial and temporal delay gradients observed at the peak of a
    solar cycle, and the potential impacts on GPS and Wide Area
    Augmentation System service. The IWG feels comfortable that operations
    in the continental United States should be minimally impacted by the
    behavior of the ionosphere. Operations in Alaska and Hawaii (polar and
    equatorial regions, respectively) could be impacted to a larger extent,
    but the resultant service will still be safe and represent a
    significant performance improvement over current service.
                                weather research
        Question. United Airlines has advocated improved satellite-based
    now casting of oceanic routes since their fatal turbulence encounter on
    the route from Japan to Hawaii. At recent meetings of oceanic working
    groups, other major airlines flying between the U.S. and the South
    Pacific also stated concerns about turbulence, particularly when
    crossing the inter-tropical convergence zone. Given the airlines' level
    of concern about turbulence encounters in oceanic areas (often related
    to convection), is the FAA adequately funding research efforts
    specifically targeted at improving forecasting of oceanic hazards to
    air carriers?
        Answer. The FAA's Aviation Weather Research Program (AWRP) is
    primarily focused on applications such as inflight icing, improved
    forecast models, ground deicing, convective weather, and turbulence
    over the continental U.S. Much of the turbulence research being
    conducted, while not specific to the forecasting of oceanic hazards,
    does have application to this area. However, the AWRP's Turbulence
    Product Development Team recently participated in the National Oceanic
    and Atmospheric (NOAA) Winter Storms Reconnaissance Program. During
    this field program, AWRP dropsondes (instrumentation dropped out of an
    aircraft used to relay information) were released over the Pacific
    Ocean to measure very detailed profiles of temperature and wind, with
    fine-scale structures suggestive of turbulence. This information will
    be a step in pinpointing locations of turbulence in systems of jet/
    upper fronts and in convection ahead of the front.
        Question. Ever since the United 737 accident in Colorado Springs,
    experts have been divided over the extent to which terrain-induced
    turbulence may have been involved. The NTSB recommended that the FAA
    study this problem. FAA conducted a small data-gathering program in
    Colorado Springs. Once the data was gathered, little effort was made to
    analyze the data. In Juneau, after several near crashes of large
    transport aircraft, the FAA nearly shut down air transport into and out
    of Juneau for a large number of winter days. Local and state political
    leaders from Alaska prevailed on Congress to have FAA consider other
    less draconian solutions and to embark on a program to develop a safety
    system to keep the airport open and provide alerts when unsafe terrain-
    induced turbulence conditions exist. However, terrain-induced
    turbulence is reportedly also an on-going problem at a number of other
    airports including Colorado Springs, Anchorage, Reno, Dutch Harbor,
    Ontario, Orange County, El Paso, Albuquerque, not to mention airports
    overseas situated near mountains. Enroute and approach flying near
    mountains is twice as dangerous as flatland flying, in large part
    because of terrain-induced turbulence. Yet the FAA has no national
    program to understand the problem of terrain-induced turbulence in the
    terminal and enroute airspace. What do the FAA, NTSB, and NASA safety
    databases suggest about the frequency of or suspicion of terrain-
    induced accidents in the U.S. and worldwide? What are the pros and cons
    of using the knowledge and experience from the Juneau program to launch
    a concerted national safety research and alerting program to mitigate
    the risk of accidents caused by terrain-induced turbulence in terminal
    and enroute airspace?
        Answer. The FAA, NTSB, and NASA safety databases indicate on
    average about eight accidents per year, in the U.S., since 1978, due to
    possible terrain-induced turbulence, with the only fatalities resulting
    from the United 737 accident in Colorado Springs and an unscheduled
    Part 135 in Albuquerque with one fatality.
        We continue to analyze the feasibility of developing and deploying
    an operational terrain-induced turbulence warning system based on the
    results of the Juneau program. We will use the knowledge and experience
    gained to launch a national terrain-induced research and alerting
    program. From a broad perspective, the research and development process
    (installation of research sensors, research field program with
    aircraft, analysis of data, and development of warning algorithms)
    undertaken in Juneau may have applicability to other airports. However,
    each airport has its own specific terrain-induced turbulence anomalies
    due to its individual topography. The possible solution at each airport
    will result in site specific hardware and software implementations;
    i.e., the solution at one airport will not be identical to the solution
    at another airport.
        Question. Ceiling and Visibility. This hazard continues to be the
    second largest cause of weather-related accidents. Research funded to
    date in ceiling and visibility has been a very targeted effort to solve
    the problem of forecasting of marine stratus in San Francisco. Although
    useful in terms of improving capacity at San Francisco, this effort
    will do little to improve the national safety statistics. The primary
    safety gains are to be made in the General Aviation community through
    improved ceiling and visibility forecasting at smaller airports and in
    the enroute airspace. Given the FAA's stated goal of reducing the fatal
    accident rate by 80 percent, please describe what would be involved to
    fund and establish a program to address improvement in forecasting
    ceiling and visibility? How would forecasts be communicated to pilots?
    How could changes to forecasts be communicated to pilots?
        Answer. The lessons learned, processes, and techniques from the San
    Francisco research effort would be utilized in establishing a
    ``national'' ceiling and visibility program. The ceiling and visibility
    problem is complex as there are actually three major classes of ceiling
    and visibility (C&V): C&V associated with marine stratus on the west
    coast; C&V with winter storms impacting the east, upper midwest, and
    northwest; and C&V associated with radiation fog which is primarily a
    general aviation safety hazard.
        A national ceiling and visibility program would apply technologies
    developed during the San Francisco effort to improve the accuracy of
    these three classes of forecasts which could be operationally generated
    at the Aviation Weather Center. The forecasts and changes to the
    forecasts will then be available/communicated to the pilots via the
    internet, flight service stations, and datalink
        Question. Please provide a table that presents the detailed
    composition of the aviation weather R&D budgets for fiscal year 1998,
    fiscal year 1999, and fiscal year 2000 on a comparable basis. The
    detail should show Socrates, national laboratory funding, program
    emphasis areas, program support, cost-benefit analysis support, in-
    house Civil Service costs, and similar levels of detail.
        Answer.

    ----------------------------------------------------------------------------------------------------------------
                                                                                        Fiscal year
                                                                     -----------------------------------------------
                                                                                                           2000
                                                                       1998 Enacted    1999 Enacted     President's
                                                                                                          budget
    ----------------------------------------------------------------------------------------------------------------
    Appropriation/Request...........................................     $18,000,000     $18,684,000     $15,765,000
    In-House........................................................         800,000         848,000         665,000
    Juneau Project..................................................       3,500,000   \1\ 3,600,000       3,100,000
    Center for Wind, Ice & Fog......................................         500,000         336,550         250,000
    Project SOCRATES................................................       3,000,000       3,000,000  ..............
    National Laboratory Funding.....................................       8,838,510       9,621,923      10,300,000
    Infrastructure:
        Program Office Support......................................         772,990         716,072         900,000
        Tech Center Support.........................................         400,000         325,000         325,000
        Cost Benefit Analysis.......................................         188,500         236,455        225,000
    ----------------------------------------------------------------------------------------------------------------
    \1\ Facilities & Equipment appropriation.

                                weather research
        Question. By program subcomponent, what was the Weather Research
    program office's original request for aviation weather R&D at the
    outset of the fiscal year 2000 budget formulation process? Which
    program areas have suffered as a result of reductions during the budget
    process?
        Answer.

     Aviation Weather Research--Program Office's Original Fiscal Year 2000
                                    Request

    Original Program Office Request.........................     $22,900,000
    In-House................................................         665,000
    Juneau Project..........................................       3,100,000
    Center for Wind, Ice & Fog..............................         250,000
    Project SOCRATES........................................................
    National Laboratory Funding (Core Program)..............      11,460,000
    Infrastructure:
        Program Office Support..............................         900,000
        Tech Center Support.................................         375,000
        Cost Benefit Analysis...............................         450,000
        Currently Unfunded Research Areas...................       5,700,000

        Question. What additional accomplishments could be achieved in
    fiscal year 2000 if the program were funded at the program office's
    original request?
        Answer. The final budget level sufficiently funds the appropriate
    mix of programs to support fiscal year 2000 objectives.
        Question. A number of the products of the Aviation Weather Research
    Program are used by the NEXRAD, ITWS, and WARP to integrate new
    concepts into fielded systems used by air traffic controllers and
    meteorologists. Have there been any funding-related delays associated
    with the hardening and deployment of weather product software in these
    NAS programs? Provide a list of the weather software applications
    handed off from the Aviation Weather Research program to NEXRAD, ITWS
    and WARP, along with a timetable and status of their implementation.
        Answer. Funding constraints in the National Weather Service budget
    have contributed to delays in implementing NEXRAD weather product
    software applications. Specifically, implementation of the digital
    velocity product (which is needed for ITWS) has been delayed until
    2002. In addition, reductions to the National Weather Service budget
    will result in delays to the next upgrade to NEXRAD. This will affect
    the digital velocity product as well as several other new FAA
    capabilities, which would be ready for implementation.
        Neither the ITWS nor the WARP program has completed its initial
    deployment (other than an interim ``phase zero'' WARP system).
    Therefore, there has not been an opportunity to integrate new
    technology from the Aviation Weather Research Program. Software
    applications are not handed off to NEXRAD, ITWS, and WARP until those
    systems are ready to receive them, thus there are no handed-off
    applications to list.
                            helena regional airport
        Question. What is the status of the Helena Regional Airport request
    for taxiway construction improvements and planning and design funding
    to correct the line-of-sight problems at the Helena Regional Airport?
        Answer. The airport's request to construct taxiways is included as
    part of a total project development to rehabilitate the runway and
    correct the line-of-sight problem. The airport is directing the
    majority of their resources towards this effort. The FAA allocated over
    $1 million in AIP funding in fiscal year 1999 to construct taxiways
    necessary for aircraft access to the main runway. It is anticipated
    that this work will be accomplished within the next six months. The
    additional work to correct the line-of-sight problem is contingent upon
    AIP reauthorization being extended through fiscal year 1999.
        In order for the line-of-sight problem to be corrected, the main
    runway will have to be closed for approximately two months. The closure
    schedule has been coordinated with the air carriers currently serving
    the airport to identify the optimum time to begin the work while
    reducing any operational impacts. The agreed upon optimum start date
    between the airport and air carriers is May 2000. The airport is
    requesting approximately $4.5 million in AIP funding to complete this
    project.
                            concord regional airport
        Question. Concord Regional Airport serves the Concord, North
    Carolina area and was constructed as a reliever facility for Charlotte-
    Douglas International Airport. It was designated in the fiscal year
    1999 appropriations bill for priority consideration. In addition,
    Concord Regional Airport base customers rose from 140 to 185 in the
    past year, the City of Concord has spent almost $17 million in the past
    5 years on improving the airport facilities (including a new terminal
    and air traffic control tower), flight operations have increased from
    25,000 in 1996 to an anticipated 60,000 this year, the new operations
    are more complex because they included a higher percentage of jets and
    turboprops, and an increasing number of the airport's customers are an
    indication that the airport runway may be unsafe for their larger
    aircraft in damp conditions. The airport has identified several
    projects that qualify for AIP funding: completion of the runway
    protection zone; a 1,500 foot extension of the 5,500 foot runway and
    taxi lanes; safety improvements to an access road; and land acquisition
    to the east and west of the runway. What is the status of fiscal year
    1999 discretionary funding for these safety projects at the Concord
    Regional Airport?
        Answer. The State of North Carolina under the Block Grant Program
    administers the AIP for this location. The FAA's AIP Airports Capital
    Improvement Plan (ACIP) for North Carolina general aviation airports is
    developed primarily from information generated and provided by the
    state aviation officials. State aviation officials have indicated that
    the airport has expressed much interest in extending the runway, which
    includes both the runway protection zone and east west land
    acquisition. The total project development is estimated to cost
    approximately $20 million. At this stage, the airport is in the early
    steps of preparing environmental documentation. State aviation
    officials are working closely with the airport in this process. If a
    successful environmental determination is provided, the project will be
    considered by the FAA in fiscal year 2000 for AIP discretionary funds.
                             max westheimer airport
        Question. Please provide a summary of the legal issues regarding
    the use of the ancillary property of the Max Westheimer Airport in
    Norman, Oklahoma, and please contact the subcommittee staff to provide
    a briefing on what encumbrances lie against the non-operational
    property attendant to the airport (i.e., the Swearingen Research Park
    and Employment Center). The Committee's understanding is that this
    general aviation airport and the property adjacent to the airport could
    be put to better research and other activities that would benefit all
    aviation users and activities if the land could be conveyed in
    accordance with the University's development plan. Assuming the
    proposed conveyances do not decrease the air traffic service to the
    existing airport, is the Committee correct in the conclusion that the
    FAA would facilitate the conveyances in accord with the University's
    proposal?
        Answer. The Max Westheimer Airport is owned and operated by the
    University of Oklahoma at Norman, Oklahoma. Along the western boundary
    of the airport property is an area of about 200 acres that the May 29,
    1996 airport layout plan designates as a future employment center, part
    of which is planned for aeronautical use, and part for nonaeronautical
    use. On the southeast corner of the airport is a triangular area of
    approximately 100 acres referred to as the ``Swearingen Research
    Park'', although this designation does not appear on the 1986 airport
    master plan or the 1996 airport layout plan. Apparently there are
    pending development proposals relating to both areas. However, FAA has
    received only preliminary conceptual information regarding these
    proposals.
        The United States Government conveyed airport property to the
    University of Oklahoma in a series of six conveyances executed in the
    period 1948 through 1958. These conveyances impose various conditions
    on the use, sale, and lease of the property conveyed, depending
    primarily on the applicable statutory requirements in effect at the
    time of conveyance. To ascertain the specific legal issues applicable
    to any proposed sale or lease airport property, it will be necessary to
    review the particular conveyance applicable to the parcel involved.
    Generally speaking, whether or not a proposed conveyance would decrease
    air traffic service to the existing airport is not necessarily
    determinative of whether FAA would approve the proposed conveyance.
        The FAA Arkansas/Oklahoma Airport Development Office in Fort Worth,
    Texas, is available to provide guidance to the University of Oklahoma
    to ensure that the University's proposals comply with its obligations
    to the Federal Government as a public airport owner and sponsor.
                                     ______

                   Questions Submitted by Senator Lautenberg

                      newark arrival optimization--prm/lda
        Question. In the last quarterly report on the Newark Delay
    Reduction Initiatives, FAA advised that work had begun on the
    procedures for the LDA and Precision Runway Monitor (PRM). Where will
    the PRM for Newark come from ? Will it come from your existing
    inventory ?
        Answer. Work has begun on Simultaneous Offset Instrument Approach
    (SOIA)/Precision Runway Monitor (PRM) issues. Limited funding is
    available to study the feasibility of SOIA/PRM for Newark.
        The next step will be to simulate SOIA/PRM procedures to determine
    optimal system effectiveness. Once this work is completed, the results
    will drive the next phase, which could include extensive airspace
    remodeling.
        The PRM for Newark will not come from the existing inventory. A
    determination to place a system at Newark, will necessitate a new
    procurement.
        Question. If not, when? In other words, in what budget does FAA
    expect to be requesting funds for procurement and precisely when will
    the equipment be available and commissioned?
        Answer. Preliminary work has begun on modeling procedures.
    Planning, simulation, and coordination efforts are expected to be
    complete in summer 2000. Depending on the outcome of the analysis, the
    FAA would determine the appropriate method for identifying a PRM system
    for Newark.
        Question. Does the FAA have ILS's available for installation as
    LDA's?
        Answer. There are currently no spare Instrument Landing Systems
    (ILS) available for use as Localizer Directional Aids (LDA). All ILS
    systems procured have been delivered and have specific site locations
    assigned to them. There are contract options to procure additional
    ILSs; however we have not requested funding for this project.
                           departure spacing program
        Question. The Departure Spacing Program initiative has been
    realigned under the Free Flight Phase 1 Program Office, and funded
    through fiscal year 1999. Funding will be required in fiscal year 2000
    to sustain the program, to develop enhancements such as true two-way
    interface, and to install additional equipment at Teterboro, White
    Plains, New York Center, and the Air Traffic Control System Command
    Center. What portion of the Free Flight Phase 1 funding in the fiscal
    year 2000 budget is allocated to DSP sustainment and expansion?
        Answer. The Free Flight Phase 1 Program Office has allocated $2.5
    million for DSP sustainment in fiscal year 2000. Development and
    implementation of the two-way interface is nearing completion. No funds
    are allocated for enhancements or expansion to other locations pending
    future validated requirements.
        Question. Is this amount adequate to bring about each of the
    activities cited above? Precisely how much is budgeted for each
    activity?
        Answer. The Free Flight Phase 1 Program Office will provide $2.5
    million for DSP sustainment requirements in fiscal year 2000. We have
    not requested funding for enhancement or expansion activities.
        Question. If there is no amount currently budgeted, how much would
    be required to accomplish these tasks?
        Answer. We estimate that $2.5 million is required in fiscal year
    2000 for DSP sustainment. Further expansion costs will depend on future
    validated requirements.
                               airspace redesign
        Question. Preliminary program milestones have been established for
    both the national and NY/NJ Metropolitan Airspace Redesign projects.
    Precisely what level of funding is needed to achieve these milestones
    in fiscal year 2000 and beyond? Are these funds included in their
    entirety in your fiscal year 2000 budget request?
        Answer. The fiscal year 2000 budget includes an increase of
    $6,622,000 over a base of $3,000,000 in the Operations appropriation.
    Additionally, with the increased redesign analysis required to support
    early Free Flight Phase I capability deployment, we have requested
    $3,000,000 in the Facilities and Equipment appropriation to support
    further National Airspace Lab development. The Lab provides all of the
    data and the majority of the actual airspace analyses to support the
    focus leadership teams conducting the National Airspace Redesign.
        The airspace redesign for the entire country will be accomplished
    over a 7 to 9 year period. We anticipate the New Jersey and New York
    Metropolitan area to take approximately 5 years. Future year budgets
    will be worked to ensure sufficient levels of funding.
        Question. Precisely what level of funding is requested in each
    relevant FAA account for the national redesign project and the NY/NJ
    Metropolitan Airspace Redesign project? Please display by project and
    account.
        Answer. Airspace redesign activities center on the various air
    route traffic control centers and high-traffic airports that make up
    the traffic flows that affect the New Jersey and New York metropolitan
    area. Facility and regional collaborative teams meet on a regular basis
    to discuss airspace issues and redesign initiatives. Proposals will be
    modeled for operational and environmental feasibility. A systematic
    approach is vital to the success of the National Airspace Redesign.
    Funding for the New Jersey and New York metropolitan area redesign
    efforts support this systematic approach. Of the $9,622,000 request,
    $6,622,000 is directly in support of the New Jersey and New York
    airspace efforts. The general funding profile for the overall National
    Airspace Redesign project is as follows:

                            [In millions of dollars]

                                                                     Purpose
    Travel and overtime for the Eastern Region Focus Leadership Team
        meetings supporting the National Airspace Redesign with
        specific focus on the New Jersey and New York metro area......   1.5
    Travel and overtime for New England, Southern and Great Lakes
        region to support New Jersey and New York flows and National
        Redesign......................................................   1.8
    Environmental scoping, public meetings, draft Environmental Impact
        Statement for New Jersey and New York.........................   3.0
    Contractor support, equipment, and training for the Eastern Region    .3
    Expansion of National Airspace Redesign activities to Western
        Pacific, Northwest Mountain, Central, Southwest and Alaska
        Regions.......................................................   3.0
                                                                      ______
          Total fiscal year 2000 request..............................   9.6

        The FAA is also requesting $3.0 million in Facilities and Equipment
    funding to support the National Airspace Lab. The Lab provides all the
    data and the majority of the actual airspace analysis to support the
    New Jersey and New York Airspace Redesign. The F&E request is for full-
    scale development of the Airspace Management Laboratory only, no
    airspace redesign labor. Full Time equivalent estimates include FAA
    required Laboratory staff to provide data and perform analyses in
    support of most nav/landing and automation IPT's. These will be air
    traffic operations data and studies of the impact of alternative
    deployments and configurations on air traffic driven by airspace design
    and environmental parameters contributing to the definition and
    acceptance of new system relocation, and replacement requirements
    leading to the best performance, deployment, and quantities of systems
    to be ultimately accepted under the NAS redesign program.
        Question. What portion of this funding request is allocated
    specifically for the NJ/NY Metropolitan Airspace Redesign project?
        Answer. The initial National Airspace Redesign encompasses a
    triangular area from New Jersey, New York and Boston, west to Chicago,
    south to Miami, back to New Jersey, New York and Boston. The operations
    funding request fiscal year 2000 is an increase of $6,622,000 over a
    base of $3,000,000 for a total of $9,622,000. Analyses of trunk flows
    from other areas of the country are vital to the success of the New
    Jersey and New York airspace redesign efforts. Funding for the National
    Airspace Redesign supports a systematic approach under which the New
    Jersey and New York Metropolitan area is being redesigned. $6,622,000
    of the $9,622,000 million request is directly in support of the New
    Jersey and New York airspace efforts. The remaining funding covers
    areas outside, yet affected by the character of the New York Traffic,
    and is the next incremental step in this National redesign process. The
    general funding profile is as follows:

                            [In millions of dollars]

                                                                     Purpose
    Travel and overtime for the Eastern Region Focus Leadership Team
        meetings supporting the National Airspace Redesign with
        specific focus on the New Jersey and New York metro area......   1.5
    Travel and overtime for New England, Southern and Great Lakes
        region to support New Jersey and New York flows and National
        Redesign......................................................   1.8
    Environmental scoping, public meetings, draft Environmental Impact
        Statement for New Jersey and New York.........................   3.0
    Contractor support, equipment, and training for the Eastern Region   0.3
    Expansion of National Airspace Redesign activities to Western
        Pacific, Northwest Mountain, Central, Southwest and Alaska
        Regions.......................................................   3.0
                                                                      ______
          Total fiscal year 2000 request..............................   9.6

        The FAA is also requesting $3.0 million in Facilities and Equipment
    funding to support the National Airspace Lab. The Lab provides all the
    data and the majority of the actual airspace analysis to support the
    New Jersey and New York redesign.
                  global implementation of safety improvements
        Question. Airline operations based outside North America and Europe
    have two-thirds of the airline accidents but have only one-fourth of
    the world's flights. They have the same type of airplanes in with a
    much higher rate of accidents because the investment in operations and
    infrastructure in these aviation systems is not balanced with safety
    improvements incorporated into the airplane. Therefore, we need to
    focus our international programs to address operations and
    infrastructure.
        As an example, the highest number of fatalities in commercial
    aviation accidents is attributed to Controlled Flight into Terrain
    (CFIT). Worldwide implementation of EGPWS (Enhanced Ground Proximity
    Warning Systems) into the in-service fleet of airplanes is expected to
    significantly reduce CFIT accidents.
        U.S. airlines have agreed to incorporate this advanced technology
    into their entire fleets; the FAA is making this a requirement for all
    U.S. operators. Boeing and Airbus are incorporating this advanced
    technology into their on-going production aircraft. However, in the
    last ten years all but one of the world's CFIT accidents involving
    commercial jet transports has occurred outside the United States.
        How can Congress help the FAA to ensure worldwide implementation of
    this and other significant safety enhancements?
        Answer. The Federal Aviation Administration (FAA) has long been a
    proponent of global implementation of any significant safety
    improvements, most often through the aegis of the International Civil
    Aviation Organization (ICAO). As a major recent example of such an
    initiative, FAA has been a vigorous supporter of ICAO's Global Aviation
    Safety Plan (GASP), an ICAO effort launched in 1997 following the large
    number of aviation accidents which occurred in 1996. The aims of this
    plan are threefold: (1) achieve a significant decrease in the world-
    wide accident rate, (2) enhance the identification of shortcomings and
    deficiencies in the air navigation field and assist States to achieve a
    significant degree of improvement, and (3) increase and improve ICAO's
    own capability to compile, assess, and disseminate safety-related
    information. ICAO's multifaceted program to achieve these goals include
    initiatives such as the ICAO CFIT prevention program (including the
    introduction of predictive terrain hazard warning systems such as EGPWS
    and minimum safe altitude warning systems), increased emphasis on
    accident/incident analysis based on ICAO's Accident/Incident (ADREP)
    System, airborne collision avoidance system (ACAS) equipage
    requirements, and the new ICAO Universal Safety Oversight Audit
    Program.
        FAA also uses other international forums to promote safety
    improvements. Last fall, for example, FAA launched its new Air
    Transportation Oversight System (ATOS) with its initial application to
    ten major U.S. carriers. At several recent regional meetings overseas,
    FAA has made formal presentations on ATOS to explain the philosophy and
    procedures for this new data-driven method of air carrier oversight.
                       faa leadership in aviation safety
        Question. The demand for FAA aid from foreign countries is
    exceeding the supply of qualified specialists. Thus, the FAA cannot
    fully support important programs that help foreign authorities become
    self-sufficient and will lead to improved safety of the world aviation
    system. This increasing demand for FAA resources has come from the
    recognition that many countries' aviation infrastructure does not meet
    the minimum ICAO standards. How can Congress help the FAA maintain its
    leadership role in aviation safety?
        Answer. As mentioned before, ICAO has recently launched its new
    Universal Safety Oversight Audit Program, a program which can result in
    the identification of safety oversight deficiencies in ICAO Contracting
    States. In such scenarios, ICAO makes available the follow-on services
    of its Technical Cooperation Bureau (TCB) to assist States in
    developing and implementing action plans to address any identified
    deficiencies. The TCB has many years of experience in planning and
    executing technical assistance projects, both on bilateral and
    multilateral bases and, through a register it maintains, has access to
    many well-qualified technical experts and consulting firms. FAA
    encourages other authorities to take advantage of such ICAO services,
    along with those which can be provided by independent consultants and
    consulting firms, to address any shortcomings.
        FAA has found other ways to provide important assistance, usually
    on a more efficient multilateral basis. For example, FAA is now nearing
    completion of a model law and regulations which it will make available
    to ICAO and other authorities. In conjunction with ICAO's TRAINAIR
    program, FAA is now collaborating with ICAO on developing related
    inspector training courses. FAA has also been an important participant,
    both in providing its technical expertise and making financial
    contributions, in regional ICAO TCB safety oversight improvement
    projects in South America and Asia. Although not an assistance
    initiative per se, but as a further example of its leadership role, FAA
    has, on a long-standing basis, worked with other authorities
    (particularly the European Joint Aviation Authorities) in the
    continuing development and refinement of harmonized regulations in the
    areas of personnel licensing, operations, aircraft maintenance, and
    aircraft certification.
                              new policy proposals
        Question. As countries share in the economic benefits associated
    with aviation, their civil aviation authorities need to take greater
    responsibility for providing oversight within their own country.
    However, these civil authorities need assistance from the FAA in the
    near term to develop their own aviation infrastructure. In addition to
    the FAA's participation in international programs, what other U.S.
    government policies are needed to ensure that other countries assume
    their regulatory responsibilities?
        Answer. FAA agrees that other authorities need to satisfy their
    obligations which their governments' accepted when they became
    signatories to the Convention on International Civil Aviation (commonly
    known as the Chicago Convention) and its annexes. In the context of the
    FAA's own International Aviation Safety Assessment (IASA) Program,
    present policy is adequate in that the FAA already takes action to
    determine if other authorities are in compliance with their ICAO
    obligations and, when non-compliance is determined, imposes
    ``penalties'' on the foreign carriers licensed by these non-compliant
    authorities which serve, or seek to serve, the United States. As the
    new ICAO Universal Safety Oversight Audit Program is expanded to other
    areas in the coming years (e.g. accident investigation, air traffic
    services, and airports), related U.S. policymaking may be necessary.
        Question. Safety indicators such as accident rates are the same for
    U.S. and Europe--both systems have equivalent safety, but different
    safety regulations. However, manufacturers have had to meet both sets
    of regulations and demonstrate regulatory compliance to both agencies
    at considerable cost and no additional safety benefit.
        In an effort to reduce cost and improve efficiency, the FAA, JAA
    and industry established a regulatory harmonization program. This
    harmonization project has taken much longer and proven more difficult
    than originally envisioned. If safety is to be improved in the shortest
    time frame, it is important for the FAA, JAA, and ICAO to collaborate
    on a coordinated strategy to develop and implement international high-
    level safety performance requirements. The safety indicators show that
    the high leverage safety requirements are in airline operations and
    infrastructure.
        What agreements do you believe are needed between the U.S. and
    Europe to recognize the equivalent level of safety amongst their
    aviation systems? And as a follow on, what agreements are needed for
    the U.S. and Europe to jointly promulgate these safety requirements
    throughout the world?
        Answer. In effort to recognize the equivalent level of safety
    already inherent in our standards, the FAA and European Joint Aviation
    Authorities (JAA) jointly developed the Harmonization Work Program
    (HWP) creating a structure and formal procedure for the harmonization
    of safety regulations.
        In the area of aircraft certification, the main goal of the
    harmonization effort is to provide a process whereby applicants could
    comply with one accepted standard, and avoid having to prove that each
    product met different, but parallel standards in each country where the
    product would be sold. This process is designed to promote
    standardization and ensure that problems of multiple interpretation of
    standards are minimized. Both the FAA and JAA are committed to this
    harmonization effort.
        Because most transport airplanes operated throughout the world are
    built and certificated in the U.S. and Europe, our safety requirements
    are inherently promulgated throughout the world with regard to design
    requirements.
        Products manufactured in Canada and Brazil meet both FAR and JAR
    requirements, further demonstrating a single, worldwide type design
    standard.
        The FAA and JAA have efforts underway to harmonize operating
    regulations as well as maintenance regulations. While these efforts are
    not as mature as the effort on aircraft design and manufacturers, they
    are intended to result in a safety standard that is acceptable in both
    the U.S. and Europe.

                              subcommittee recess

        Senator Shelby. Ms. Garvey, we appreciate your appearing
    here today. We appreciate your patience and, moreover, your
    candor. The hearing is now recessed.
        The Subcommittee on Transportation-Related Agencies will
    reconvene on Thursday, March 25, at 10 a.m., here in Dirksen,
    124. The hearing topic is the U.S. Coast Guard's fiscal year
    2000 budget request and other operational issues. Admiral Loy,
    the Coast Guard commandant, will testify at that hearing.
        Thank you for coming. The subcommittee is recessed.
        [Whereupon, at 3:21 p.m., Tuesday, March 23, the
    subcommittee was recessed, to reconvene at 10 a.m., Thursday,
    March 25.]

     DEPARTMENT OF TRANSPORTATION AND RELATED AGENCIES APPROPRIATIONS FOR
                                FISCAL YEAR 2000

                                  ----------

                            THURSDAY, MARCH 25, 1999

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:05 a.m., in room SD-124, Dirksen
    Senate Office Building, Hon. C. Richard Shelby (chairman)
    presiding.
        Present: Senators Shelby, Stevens, and Lautenberg.

                        COAST GUARD BUDGET AND PROGRAMS

                          DEPARTMENT OF TRANSPORTATION

                                U.S. Coast Guard

    STATEMENT OF ADMIRAL JAMES M. LOY, COMMANDANT

                      OPENING STATEMENT OF RICHARD SHELBY

        Senator Shelby. We meet today to consider the
    Administration's fiscal year 2000 budget request for the United
    States Coast Guard.
        I would like to welcome Admiral James Loy, the Commandant
    of the Coast Guard here again today. The Coast Guard has not
    appeared before the subcommittee in a while, so I am especially
    interested in discussing the budgetary and operational issues
    facing the Coast Guard with you.
        I have a statement to insert in the record, which will save
    some time and I would like to begin with just a few brief
    observations.
        I believe it is illustrative to place the Coast Guard
    budget in a broader perspective. If the AIR-21 bill follows in
    the tradition of TEA-21 and establishes new budgetary firewalls
    for aviation accounts, the FAA's budget would not only be
    fenced, but also would consume much of the Department of
    Transportation's general revenue funding.
        Assuming we adhere to the budget caps, this also means
    there would not be any room to fund the Coast Guard. I am
    concerned about how the Coast Guard will continue to maintain
    the quality and ready forces that you have today.
        The ever escalating number of operations is beginning to
    take its toll. With every new deployment or additional
    functional assignment, we are burning out Coast Guard service
    men and women and their families, just as much as we are
    wearing out the ships, aircraft and equipment they operate.
        The Coast Guard has many other challenges to face this year
    such as affording the Deepwater Project procurement, recruiting
    and retaining high-quality people in the thriving economy,
    making up the shortfall in the likely event that the
    navigational user fee is not enacted and balancing their
    limited resources between the varied and disparate missions.
        Again, Admiral I will look forward to your testimony and to
    the discussion of these pertinent issues. And as I said my
    complete statement will be made part of the record without
    objection.
        [The statement follows:]

                    Prepared Statement of Richard C. Shelby

        Good Morning. The subcommittee will come to order. We meet today to
    consider the Administration's fiscal year 2000 budget request for the
    United States Coast Guard. I would like to welcome Admiral James Loy,
    the Commandant of the Coast Guard. The Coast Guard has not appeared
    before this subcommittee in a while, so I am especially interested in
    receiving your testimony and discussing the budgetary and operational
    issues facing the Coast Guard.
        Before we begin, I want to take this opportunity to once again
    state my concern over the growing popularity to build a ``firewall''
    around certain transportation programs, thereby insulating them from
    the annual competition for scarce federal resources. While I do not
    believe we should undo the highway and transit firewalls, we should not
    rush to create the same bugetary treatment for aviation.
        If the Air-21 bill follows in the tradition of TEA-21 and
    establishes new budgetary firewalls for aviation accounts, the FAA's
    budget would not only be protected by a budgetary firewall, but also
    would be guaranteed massive increases in general revenue contributions.
    Assuming we adhere to the budget caps, there would not be any funds
    available for any Department of Transportation program other than
    highways, transit, and aviation. The accounts that would have to be
    dramatically cut or actually eliminated includes Amtrak, highway safety
    programs, and pipeline and hazardous materials safety programs. I hope
    all of you here today understand that this also means there would not
    be any room to fund the Coast Guard.
        Returning to the matter at hand, the Coast Guard is perhaps best
    known for responding every day to people in distress and rescuing them
    without regard for time, weather, or sea state. While they will always
    answer the call for help, it is only one of a wide range of missions we
    have come to expect the Coast Guard to meet. On any given day, Coast
    Guard personnel are stemming the flow of illegal drugs and illegal
    migrants at sea, preventing and responding to major maritime oil
    spills, and aiding barges and carriers in our shipping lanes. The Coast
    Guard is indeed a versatile multi-mission agency.
        I am concerned, however, that the Coast Guard may be a victim of
    its own success. As an agency that has accepted any responsibility
    thrust upon it, the number of operations has jumped. There is no relief
    in sight. And, to exacerbate the situation, I believe that the
    independent Presidential Commission to evaluate the roles and mission
    of the Coast Guard is more likely to recommend additional or enhanced
    duties than to eliminate current statutory functions.
        This increase in operations came on the heels of trimming its force
    to the smallest size since the late 1960's. Because of this combination
    of events, Coast Guard personnel are working harder than ever and
    ``doing more with less.'' With every new deployment or additional
    functional assignment, we are burning out our ``Coasties'' and their
    families just as much as we are wearing out the ships, aircraft, and
    equipment they operate.
        Complicating the Commandant's task of recruiting and retaining high
    quality personnel, Coast Guard wages have not kept pace with the
    civilian economy and the military benefits, especially health care,
    have been slowly, yet steadily, eroded. Furthermore, as we make it less
    and less attractive to serve, we will not be able to recruit high
    quality people. The President's budget includes a 4.4 percent increase
    in military and civilian pay, additional housing allowance, and other
    quality of life initiatives.
        The Coast Guard has many challenges to face this year--the
    deepwater procurement, recruiting efforts, retention efforts,
    sustaining the current level of operations, making up the shortfall in
    the likely event that the navigational user fee is not enacted, and
    balancing their limited resources between the varied and disparate
    missions. Again, I look forward to your testimony and to the discussion
    on these and other pertinent issues.

        Senator Shelby. Senator Lautenberg, do you have a
    statement?

                         STATEMENT OF FRANK LAUTENBERG

        Senator Lautenberg. Yes. Thanks very much, Mr. Chairman.
    And I apologize for my tardiness. And I particularly want to
    apologize to Admiral Loy, whom we have been trying to have a
    conversation with, and it just did not work out.
        We have been a little stressed with the budget, which is
    the source of our discussion this morning. And I assume that
    Peter Rogoff, my capable assistant, was able to get you,
    Admiral, and clear up some of the questions that existed. You
    are looking at two Coast-Guard-loving senators.
        Each of our states has a dependence on the Coast Guard and
    I am sure I speak for Senator Shelby when I say we really
    appreciate the job that is being done by all of your people,
    Admiral, from yourself down. I know it is always reassuring to
    me. I am an amateur sailor, and amateurs always need help.
        I look out my window in New Jersey in the apartment I live
    in, Mr. Chairman, which is right on the Hudson River, and I see
    the Coast Guard boats patrolling up there.
        Senator Shelby. Excuse me a minute, but up around Martha's
    Vineyard, he is a pro at sailing. [Laughter.]
        Senator Lautenberg. We are not talking about that.
        Admiral Loy. That is what I have heard, Mr. Chairman.
    [Laughter.]
        Senator Lautenberg. Well, I will tell you, I once had to
    put out an emergency call to the Coast Guard before I was in
    the Senate. I resolved that once I was in the Senate, I would
    never have the nerve to get on the radio and say, ``I need
    help.'' [Laughter.]
        But they were there--Johnny on the spot, as always.
        Well, today is Commandant Loy's first appearance before
    this subcommittee, and we welcome you and your staff this
    morning.
        Admiral Loy. Yes.
        Senator Lautenberg. More than four years ago, the then
    Secretary of Transportation, Frederico Pena, directed all of
    the modal administrators within DOT to take a serious look at
    their budgets and determine ways in which they could streamline
    and downsize their operation.
        At that time, Admiral Kramek was the Commandant. And like
    all good military officers, the Admiral moved out swiftly,
    quickly and developed a comprehensive streamlining plan that
    continues to be implemented to this day.
        Now, Admiral Loy was the Coast Guard Chief of Staff during
    the early years of the streamlining plan. And you have seen the
    impact of the plan, first as Atlantic Area commander and now as
    the Commandant of the Coast Guard. And I have reviewed your
    testimony.
        There is one sentence that looms larger than any other for
    this Senator, Mr. Chairman.
        In your formal statement, Admiral Loy says, ``After several
    years of streamlining, the Coast Guard is at its smallest size
    since 1967, while at the same time having its greatest number
    of missions ever.''
        And, boy, that could not be more obvious. So whenever there
    is a new area that we need attention paid to, it is always the
    Coast Guard that is called in when there is a marine and
    sometimes a land-bound problem.
        The situation, Admiral, is that you have developed experts
    and expertise in a lot of areas. And we need you in those
    situations. And how do you continue to be effective, do the job
    that you and your people are committed to do, while we
    constantly squeeze down on the budget? It is something short of
    miraculous.
        The same year, Mr. Chairman, that the total Department of
    Transportation budget will top $50 billion for the first time,
    we will have the smallest Coast Guard in over 30 years.
        The fact does not sit well with me. Our expectations of the
    Coast Guard are always high.
        We expect them to constantly be able to change gears, to
    rapidly enhance our war on drugs, respond to a sudden surge in
    Haitian or Cuban migrants. We expect them to be able to respond
    immediately to oil spills, all the while demonstrating nothing
    short of consistent excellence in their core missions of marine
    safety, search and rescue and national security.
        Mr. Chairman, the motto of our Coast Guard is ``Semper
    Paratus,'' ``Always ready.'' And I know that its leadership is
    very reluctant to acknowledge when they could, maybe, not be
    ready.
        But I believe this subcommittee has a responsibility to
    analyze carefully the fiscal realities and the practical
    realities of what it means to have more missions than ever
    before with the smallest Coast Guard in 30 years.

                      coast guard's primary responsibility

        My biggest concern is that perhaps we are just asking too
    much of the Coast Guard. When you look at how all other
    transportation modes have responded to Secretary Pena's
    instruction to downsize, we find that the Coast Guard has lost
    a larger percentage of its force than any other. Indeed,
    certain DOT modes have not lost any staff at all. Some have
    grown slightly.
        Over the last year, we have seen a couple of tragic
    incidents indicating possible difficulties in one of the Coast
    Guard's core missions, search and rescue.
        Both in the case of the sailing vessel, Morning Dew, and
    the fishing vessel, Adriatic, we have seen a tragic loss of
    life as a result of distress calls that were not answered,
    period.
        Admiral Loy is to be commended for developing and deploying
    both a short- and long-term plan to address these deficiencies
    that were highlighted in these two cases.
        And I can only hope that we have not allowed the Coast
    Guard's readiness in dealing with search and rescue to be
    diminished while we have directed new funding to other
    missions.
        Last year, the Omnibus appropriations bill provided nearly
    $272 million in emergency funding to enhance the Coast Guard's
    war on drugs.
        Is drug interdiction important? Of course, it is. But we
    must never lose sight of the fact that we always have got to
    protect the funding needed for the Coast Guard's basic or core
    domestic missions.
        And none is more core, more central to the Coast Guard's
    identity than search and rescue. We do not do search and rescue
    utilizing joint task forces. The Coast Guard and the Coast
    Guard alone is responsible for maritime search and rescue
    mission.
        So as we discussed the Coast Guard budget this morning, I
    hope and expect that the Commandant will be candid with us, as
    he always has been, regarding his agency's needs and the price
    that we may be paying to operate so many missions with an
    excessively lean Coast Guard.
        And Commandant, I urge you to not hold back in what you see
    are problems that can arise from insufficient resources. Thank
    you for being here.
        And thank you, Mr. Chairman, for calling this hearing.
        Senator Shelby. Thank you.
        Admiral Loy, your entire statement will be made part of the
    record in its entirety, so proceed as you wish.

                       statement of Admiral James M. Loy

        Admiral Loy. Thank you, Mr. Chairman.
        Thank you, Senator Lautenberg.
        Let me first of all suggest that if, in fact, you do get in
    trouble again, sir, please do not hesitate to call. We will be
    very interested in responding.
        Senator Lautenberg. I am going to be looking at your budget
    and say, ``They cannot afford to rescue me.'' [Laughter.]
        Admiral Loy. And the thought process of expectations is
    really what I have taken out of your opening comments, both of
    you. And I appreciate that very, very sincerely.
        At the other end of the day, I owe you, as you have cited,
    a leadership evaluation as to the readiness of our organization
    across the board, across the full foundation of current
    capability, if you will, with respect to that chart. And I will
    honor that commitment, sir.
    [GRAPHIC] [TIFF OMITTED] T12MA25.001

        First, Mr. Chairman, let me thank you and the other members
    of the Subcommittee for the support and counsel that you
    provided this new Commandant as he waded through the process of
    the annual budget last year.
        It turned out to be a very unique process for all of us as
    we sort of saw at the end of the tunnel, the Omnibus bill that
    we could ladle fixes into, and that seems not to be the case
    this year. And it is of great concern to me as I look at the
    same kind of dimensions that the Chairman mentioned in his
    opening statement.
        As I tried to follow the budget resolution dialogue and the
    eventual marks that will initialize the process of our budget
    this year, I too become very concerned that the combination of
    very real caps and whatever becomes of reduced budget authority
    flexibility for the Chairman will make your challenge very
    difficult as it comes around to adequately funding the Coast
    Guard this year.
        But, again, I seek your support. I sense your verbal
    support through the course of your opening comments, and I will
    work very hard with you to seek the advocacy necessary to fund
    the Coast Guard properly.

                              1999 accomplishments

        Mr. Chairman, I remain very proud of what our organization
    did for America last year. Our continuing service in 1999 is
    based largely on the abilities granted by not only our base
    budget last year, but what was, in fact, part of the Omnibus
    bill.
        We have sustained the counterdrug excellence that the
    Congress focused on for us with respect to those plus-ups.
        There have been very high profile cases. The fishing vessel
    LA CONTE case, which found its way into the Washington Post a
    couple of months ago, is an example of exactly the kind of
    dedication to tasks that our young patriotic men in Coast Guard
    uniforms and women in Coast Guard uniforms offer this nation on
    a daily basis.
        We became detectives for a period as we tracked down
    through very sophisticated procedures the motor tanker COMMAND
    that had, in fact, violated the waters of San Francisco Bay and
    offshore, and were able to bring that particular case to
    conclusion.
        High-seas drift net cases in the middle of the Pacific
    Ocean that involved multiple nations were brought to closure
    because of the ability that the Coast Guard has to operate in
    the deep waters of the Exclusive Economic Zone of this nation
    and track down violators as necessary to bring them to justice
    at the other end of the day.
        These were solid examples of Coast Guard men and women at
    work for the nation in a wide variety of areas.
        One of the most interesting conferences that we had last
    year, Mr. Chairman, had to do with the Secretary's Marine
    Transportation System initiative, where he is trying to raise
    the visibility of that dimension of our national transportation
    system, to get it to be thought of in terms of concern equal to
    the terrestrial and the aviation dimensions. That went very
    well.
        I remain proud of our good stewardship and our continuing
    role as a leader in management excellence. We have been
    recognized with a variety of awards in that regard as it
    relates to GPRA and the National Performance Review.
        We have been very aggressive with Y2K. And I will look
    forward to any questions that you might have with respect to
    that problem for us this year.
        And we have forged productive partnerships with
    stakeholders and customers and agency colleagues at the Federal
    level to get good things done for America.
        Fundamentally, sir, we remain a maritime, military,
    multimission service, but we are now at our absolute limits
    with respect to downsizing.
        And as you suggested, Senator Lautenberg, we are, in fact,
    about the same size we were in 1967, with an endless list of
    new responsibilities that I would be glad to cite.
        Yesterday, we observed the tenth anniversary of EXXON
    VALDEZ, the tragedy in Prince William Sound. Reviewing that
    decade of accomplishment reiterated the importance of the basic
    mission profile of the Coast Guard.
        It is not just about only counternarcotics in the nineties
    and on into this next century. It is about that full foundation
    of capability that we need to do what the nation has asked of
    us.
        OPA 90 was passed by the Congress, the 101st Congress, 535
    to 0. And I do not know whether that has happened before or
    since, but that was the vote on that particular day. It was the
    most impacting piece of legislation that ever came in the
    direction of the Coast Guard except, perhaps, after Hamilton
    put us together back in 1790.
        Yet 10 years later, we have very finite results to show for
    the effort and for the challenge that you offered the service,
    a 64 percent reduction in oil spilled, a 50 percent reduction
    in spills over 10,000 gallons. Those are very real facts that
    are traceable to the activities out of OPA 90.

                       fiscal year 2000 budget submission

        Mr. Chairman, three phrases sort of dominate my 2000 budget
    submission. It is about basic essential services for this
    nation. It is about readiness. It is about accountability with
    the counterdrug monies that you offered us last year.
        Basic services speak for themselves. The request will
    continue those essential services that the American people
    expect from the Coast Guard.
        It is, however, a bare-bones budget, one that is focused,
    one in which every penny is necessary to mission performance.
        About readiness, I remain very concerned. The dialogue of
    the past eight months in town focused on national defense
    readiness, and properly we watched as both the President's
    budget and initial indications on the Hill suggest that the
    four DOD services will be dealt with in the manner that that
    dialogue suggested was appropriate.
        I only offer for your concern and your observation that
    this fifth Armed Service has exactly the same inventory of
    challenges and problems that have been evidenced by my four
    service chief colleagues.
        On the people side, my most pressing problem this year,
    sir, is to continue to close the work force gap so that this
    array of work that we do for the nation is not borne on the
    backs of Coast Guard sailors and airmen that are out there
    doing their duty in harm's way on a daily basis 24 hours a day.
        I implore you to consider that the thought process is
    reflected in that about $50 million worth of material,
    compensation issues in the President's budget are enormously
    important for us to continue to close that work force gap.
        On the modernization side, sir, the other piece, if you
    will, of this national readiness dialogue that we have
    encountered in town, I would offer that the $350 million AC&I
    budget for this organization is as lean as it can possibly be.
        Every penny of that budget is required so that we can make
    good investments now, that will, in fact, yield significant
    savings for the nation in the out years.

                                deepwater system

        Our assets, as you know, sir, are very people intensive: 66
    cents of every dollar that is spent by the Coast Guard goes in
    one way or another to people. Where we can invest now to
    produce savings in people in the out years seems to me to be a
    very, very smart management thought process.
        Our Integrated Deepwater System project is the centerpiece
    of that recapitalization effort. And I invite your attention to
    it and solicit your support for it.
        Mr. Chairman, I would like to comment just in passing on a
    GAO audit that was dated in October of this past fall about the
    IDS project, the Integrated Deepwater System project. GAO has
    testified consistently over the last several months about three
    serious problems that they feel exist in the project.
        All three of those I feel we have addressed very, very
    well. And I would just offer your attention not only to the
    continuing nature of an audit dated in October of 1998 to the
    realities of what is going on in the spring of 1999 as we
    proceed along the path of this budget.

                                readiness issues

        My last word on readiness, Mr. Chairman, is an uneasy
    feeling I have developed from an array of red flags I see on
    the readiness horizon of this organization.
        I have spoken publicly on what I call the curse of ``Semper
    Paratus,'' which is, as Senator Lautenberg reflected, an
    inclination mentally on our organization's part from the
    leadership right on down to say, ``Yes,'' when offered an
    opportunity to do something or directed to do something for
    America.
        As I have mentioned earlier, Mr. Chairman, I feel that we
    are right at the limit as it relates to reducing the readiness
    capability of this organization.
        And, in fact, I see problems in training. I see problems in
    equipment. I see problems as reflected by Mr. Lautenberg, the
    two cases that you reflected on, the ADRIATIC and MOUNTAIN DEW
    case off of Charleston.
        Both the President and the Congress have caused attention
    to be drawn to this issue of readiness for the five Armed
    Services.
        And, again, I would offer, it is no less important for this
    fifth Armed Service that does a full array of work 24 hours a
    day, 365 days a year for this nation. We deserve the same
    consideration as the other four.
        Mr. Chairman, the same foundation of capability that
    supports our core missions also supports our ability to do more
    in drugs, which the Congress directed us to do last year.
        We continue to lose 20,000 or so Americans annually from
    this particular problem. $110 billion is estimated as the
    social cost the nation pays on an annual basis.
        Our STEEL WEB strategy continues to prove itself a valuable
    contributor to what the nation is doing about drugs. And we are
    making very good use already of the counterdrug monies that
    were appropriated by this Congress last year.
        Our equipment and our intelligence has improved and the new
    airborne use of force doctrine that I am considering will
    potentially have a very dynamic impact on the fast boat threat,
    which is the crucial vehicle of choice delivering drugs to this
    nation. In short, we are being very responsive to the
    congressional direction to do more on drugs.
        In closing, Mr. Chairman, let me just reiterate that your
    Coast Guard is on watch and doing the jobs assigned.
        My two job number ones for this year are to make certain
    that we deal with Y2K appropriately and that we fill the work
    force so that we can continue to work for this nation, and I
    seek your support in both of those areas.
        Thank you for the opportunity to discuss the President's
    budget submission for the Coast Guard, sir. And I look forward
    to your questions.
        [The statement follows:]

                   Prepared Statement of Admiral James M. Loy

        Good morning, Mr. Chairman and distinguished members of the
    Subcommittee. It is a pleasure to appear before you today to discuss
    the Coast Guard's fiscal year 2000 budget request and its impact on the
    services we provide the American public on a daily basis.
        The Coast Guard can best be characterized by what I like to refer
    to as the ``three M's'': multimission, maritime, and military. As a
    multimission service, the Coast Guard is one of the best bargains in
    the Federal government: every tax dollar invested in the Coast Guard is
    returned many times over through the wide range of services we provide
    that benefit every American, every hour of every day. We have long
    enjoyed an international reputation as both the world's foremost
    lifesaving agency and coast guard; no other U.S. government agency or
    private organization has the expertise, assets, and 24-hour-a-day
    readiness to conduct search and rescue missions in all areas of the
    maritime region. As one of the five Armed Services, we have
    consistently demonstrated our value as a unique instrument of national
    security in a world of ever-changing threats.
        We also take pride in being one of the best-run agencies in the
    Federal government, having been recognized as a leader in the
    implementation of both the Government Performance and Results Act
    (GPRA) and the National Performance Review. We have been proactive in
    addressing the Year 2000 (Y2K) computer bug and its effect on our
    people and missions, and have spearheaded international outreach
    efforts aimed at maritime safety.
        As outlined in our performance plan accompanying the President's
    fiscal year 2000 budget request, our productivity is keyed to strategic
    goals and outcomes. Our strategic goals of Safety, Protection of
    Natural Resources, Mobility, Maritime Security, and National Defense
    will always remain American priorities.
        Mr. Chairman, there are three principal themes underpinning the
    President's fiscal year 2000 budget request; I hope to leave you with a
    clear understanding of them as a result of today's hearing. First, the
    President's fiscal year 2000 budget request will permit continuation of
    the basic services currently enjoyed by the American people. Second, it
    addresses the Coast Guard's readiness needs. It provides funding for
    the pay and personnel initiatives of the President needed to recruit
    and retain a stronger work force. And third, it provides funding both
    to operate the capital assets provided in the various fiscal year 1999
    supplemental appropriations acts and expand our interdiction
    activities, advancing our already successful interdiction efforts.
        The significance of the first theme is self-evident: we need full
    funding to maintain our outstanding mission performance. The other two
    themes, however, require some discussion.
                                   readiness
        One of my major concerns right now as Commandant is readiness,
    which has two components: people and modernization. Coast Guard
    readiness includes not only our preparedness to fill our role as one of
    the Armed Services, but also our ability to provide on a daily basis
    the myriad of services the American public has come to expect from us.
    People
        After several years of streamlining, the Coast Guard is at its
    smallest size since 1967, while at the same time having its greatest
    number of missions ever. Our number one priority in the coming year is
    to fill critical gaps in our work force. To do this, we must
    aggressively recruit the high-quality young people we need while at the
    same time not increasing the sacrifices inherent with military service
    faced by our current personnel.
        In support of our recruiting and retention efforts, the President's
    fiscal year 2000 budget request provides over $4 million in direct
    support of Coast Guard recruiting, as well as an additional $6 million
    for work force readiness tools, which include incentives that our
    recruiters can use to attract high-quality recruits. The President's
    budget request also includes: a 4.4 percent pay raise, plus $5 million
    for a targeted special pay increase; more than $5 million to begin the
    transition to a more equitable Basic Allowance for Housing (BAH); over
    $13.5 million to address escalating health care costs, including a
    provision for the Department of Defense to provide $18 million in
    health care services to the Coast Guard; and more than $4 million for
    quality of life initiatives such as childcare subsidies and education
    programs, both of which are Presidential priorities. We will monitor
    the effects such reforms have on recruiting and retention to ensure
    their adequacy.
    Modernization
        One of the most pervasive problems facing the Coast Guard today is
    older technology, including sensors, ships, and aircraft; the mounting
    operations and maintenance costs and intensive personnel requirements
    of this technology threaten our ability to maintain current mission
    performance. The Coast Guard's deepwater fleet of cutters and aircraft
    (deepwater being defined as 50 or more miles off shore) is one of the
    oldest in the world. Our strategy to overcome this obstacle is to
    invest to save: smart capital investment is necessary to maintain
    capability and is essential if we are to leverage technology to reduce
    future operating costs. Such an invest to save strategy does not work
    without adequate investment; full funding of the President's fiscal
    year 2000 request for Acquisition, Construction, and Improvements
    (AC&I) is critical to our recapitalization effort.
        The Integrated Deepwater System (IDS) acquisition project is the
    centerpiece of that recapitalization effort. It is not your standard
    government acquisition project. Instead of a piece-meal, traditional
    approach that considers one-for-one replacement of assets by asset
    class, IDS encompasses an entire mission area. This analysis centers on
    the combination of vessel, air, and Command, Control, Communications,
    Computers, Intelligence, Sensors, and Reconnaissance (C\4\ISR) assets
    and their potential synergies that will operate in the deepwater
    environment. Instead of making penny-wise and pound-foolish design
    decisions based only on purchase price, IDS decisions will be based on
    the total ownership costs: acquisition, maintenance, operating,
    crewing, training, and eventual disposal.
        Instead of making our decisions without regard to the United
    States' existing maritime capabilities, we are pursuing IDS within the
    parameters of the National Fleet concept which the Chief of Naval
    Operations, Admiral Johnson, and I are pursuing jointly. Under this
    concept, both services will maintain their distinctive heritage,
    capabilities, and identities; but we will make sure that our strengths
    are complementary. The Navy will maintain its highly capable surface
    combatants designed for the full spectrum of naval operations from
    peacetime engagement to major theater war. The Coast Guard will provide
    relatively smaller maritime security cutters, designed for peacetime
    and crisis-response Coast Guard missions, but capable of meeting the
    requirement for general-purpose, shallow-draft warships. We don't need
    the Deepwater capability to try to become the second best navy in the
    world; we need it to remain the single-best coast guard in the world.
        A second major modernization initiative included in the President's
    budget request will improve the ability of mariners in distress to
    notify the Coast Guard, a critical factor in saving more lives. Without
    an effective means to communicate with mariners in distress, we cannot
    help them, despite our most noble intentions. We must be able to learn
    of the nature and location of the distress, and then respond
    accordingly. Our National Distress System, the coastal maritime
    distress communications system, is in dire need of modernization. Much
    of the equipment is obsolete. We respond to more than 50,000 search and
    rescue cases every year, saving the lives of approximately 5,000
    mariners in imminent danger, and providing some form of emergency
    assistance to nearly 100,000 mariners. Communications technology is
    readily available that would give us the capability to save additional
    lives. We must make every effort to obtain and use these modern
    capabilities.
        The National Distress System Modernization Project will provide for
    the system-wide modernization of communications and recording equipment
    and the specific capability to locate vessels in distress by shore-
    based radio direction finding. Full funding for this project will help
    us enhance our search and rescue readiness to keep America's commercial
    and recreational mariners safe, increasing our ability to save lives,
    such as those that were tragically lost aboard the sailing vessel
    MORNING DEW off South Carolina and the clammer ADRIATIC off New Jersey.
                          drug interdiction activities
        In addition to everything else I have mentioned about readiness, it
    is also the foundation upon which the President's fiscal year 2000
    budget builds in allowing both operation of counterdrug assets funded
    by fiscal year 1999 appropriations and new interdiction activities.
        Every American is adversely affected by illegal drug use. Over
    20,000 Americans die every year because of illegal drugs, and the
    annual social cost is estimated at $110 billion. A balanced approach is
    required to combat the threat of drugs: effective interdiction reduces
    supply, in turn supporting demand reduction efforts. The Administration
    believes that illegal drugs are a threat to national security and that
    there is a need for increased counterdrug activities and readiness;
    this budget provides expanded efforts in this important area.
        The Coast Guard is a proven performer in the interdiction arena,
    and STEEL WEB, our highly successful, comprehensive, multiyear
    interdiction strategy is battle-tested. During fiscal year 1998, the
    Coast Guard seized 75 vessels transporting 82,623 pounds of cocaine and
    31,365 pounds of marijuana, and arrested 297 suspects. The President's
    fiscal year 2000 budget includes funding to operate critical end game
    assets such as deployable pursuit boats, additional coastal patrol
    boats, and interdiction support vessels. In addition, the budget will
    fund operation of reactivated maritime patrol aircraft and provide for
    the operation of improved sensors on cutters and aircraft. These items
    will help us to locate, track, and intercept suspected smugglers.
        The recent seizure of a 580-foot bulk carrier by the Coast Guard on
    the high seas is indicative of the value of coordinated and effective
    maritime interdiction operations. The interdiction and seizure of the
    Panamanian registered M/V CANNES by the Coast Guard in January resulted
    in the seizure of an estimated 9,500 pounds of cocaine. The vessel was
    first spotted by a Coast Guard maritime patrol aircraft operating as
    part of a Joint Interagency Task Force East coordinated counterdrug
    effort. A Navy patrol boat with an embarked Coast Guard law enforcement
    detachment (LEDET) intercepted and initially boarded the vessel
    approximately 125 miles southwest of Jamaica. Coast Guard cutters
    subsequently relieved the patrol boat and boarding teams located
    contraband hidden beneath the vessel's bulk cargo. The drugs were
    seized, the crew arrested, and the vessel seized on behalf of the
    Panamanian government.
        Full funding of the President's fiscal year 2000 budget request
    will ensure the Coast Guard remains ready to prevent illegal drugs from
    threatening our national security.
                                   conclusion
        In closing, Mr. Chairman, I would like to thank you and the other
    members of this distinguished subcommittee for the opportunity to
    discuss the President's fiscal year 2000 budget request for the Coast
    Guard. I look forward to working with you over the course of the next
    several months to ensure America's Coast Guard remains Semper Paratus.
        I will be happy to answer any questions you may have.

        Senator Shelby. Senator Lautenberg?
        Senator Lautenberg. Yes, Mr. Chairman. I thank the
    Commandant for his excellent testimony. And I thank you, Mr.
    Chairman. I am not going to be able to stay.
        I would like to know if the record is going to be open
    sufficiently for us to submit questions.
        Senator Shelby. It will be.
        Senator Lautenberg. I thank the Admiral, and I thank you
    for the opportunity.
        Senator Shelby. Well, we know you stay busy on the budget
    committee.
        Senator Lautenberg. Thank you.
        Senator Shelby. That is important.
        Senator Lautenberg. Very.
        Admiral Loy. Thank you very much, Senator Lautenberg. Good
    to see you, sir.

                           air-21 funding constraints

        Senator Shelby. Admiral Loy, as I indicated in my opening
    statement, if Chairman Shuster's AIR-21 bill follows the path
    of TEA-21, Federal Aviation Administration programs will not
    only be increased by $5 billion, they will also be separated
    from the annual appropriations process by a budgetary firewall.
        And mark my words, this is what will have to happen. The
    aviation, highway and transit firewalls will squeeze the
    discretionary budget cap to the point that there will not be
    any room left in the transportation appropriations bill to fund
    any other Department of Transportation programs.
        This includes Amtrak, rail safety, pipeline and hazardous
    material safety and the general fund portion of NTSA, and, of
    course, the agency of interest to everyone here today, the
    Coast Guard.
        Admiral Loy, do you have any concerns about the proposal to
    establish an aviation firewall and in your view, how would the
    establishment of an aviation firewall impact have on future
    Coast Guard budgets? Would it be like I described?
        Admiral Loy. Mr. Chairman, I do believe it would be
    basically like you described. It is not my position to comment
    on the Secretary's total array of interested agencies. I am
    very, very concerned.
        Senator Shelby. You can comment on your own, can you not?
        Admiral Loy. Yes, sir, I surely can.
        If the eventuality played out as you just described, it
    would bring this organization to its knees.

                             personnel requirements

        As you know, as I indicated earlier, we are a very
    Operating Expenses--dominated agency, and since as much as 66
    cents of every dollar is a people dollar in our organization,
    we would literally be decommissioning stations. We would be
    tying up ships and not doing what the American public expects
    of its Coast Guard on a routine basis.
        So I have been very concerned as I heard estimates around
    town in terms of even five and ten and fifteen percent kind of
    reduction figures.
        Senator Shelby. Yes.
        Admiral Loy. Because if, in fact, the American public is to
    get the services that it expects from our organization, it must
    find a way to gain the President's budget to do that.
        And it is an enormously growing concern on my part as I
    watch the budget resolution dialogue as well as the speculation
    from a lot of folks whose opinion I value very highly play out
    over the town.
        Senator Shelby. If the services continue to hemorrhage
    qualified people at the current rates, there will be a
    reckoning, the magnitude of which we are not prepared to
    endure, I believe.
        Admiral Loy. Yes, sir.
        Senator Shelby. How does your 2000 budget request ensure
    that the Coast Guard can meet its recruiting requirements and
    slow the exodus of qualified personnel from the Coast Guard? Is
    that not a problem?
        Admiral Loy. It is very much a problem, as I indicated
    earlier, sir. We share the same problems, perhaps to a bit
    lesser degree, but nonetheless the very same level of problems
    as the other four services.
        Senator Shelby. Yes.
        Admiral Loy. Just as a point of reference, it takes an Army
    recruiter today, sir, about 140 negotiations, if you will, with
    qualified eligible young people on the other side of the table
    for them to get one soldier to go to boot camp.
        Senator Shelby. It used to be automatic, did it not?
        Admiral Loy. Yes, sir. There was a day when it was
    absolutely automatic.
        Senator Shelby. It was automatic.
        Admiral Loy. Yes, sir. And the Coast Guard number in that
    regard is about 100 to 105. So we have a bit lesser recruiting
    challenge, but an enormous one nonetheless.
        And it has everything to do with what I see as a widening
    gulf between the propensity to join the military services and
    the civilian sector of our nation, the social culture of our
    nation, if you will.
        Senator Shelby. Yes.
        Admiral Loy. I fear for that.
        There are a lot of folks who suggest it is just the robust
    economy of the moment. But I think there are more deeply
    ingrained issues there.
        The President's budget offers us a chance to fund the
    second year. That was the $50 million I was speaking about
    earlier: the second year of a 2-year designed effort that I
    have undertaken to refill our work force, sir.
        And we think that will be sufficient, but we will watch
    that very carefully.
        Senator Shelby. Are you confident that your request will
    provide adequate resources for recruiting and advertising?
        Admiral Loy. It will meet the specifications that we think
    we need to do to refill the work force. Yes, sir. It will.
        Senator Shelby. Okay.
        Admiral Loy. I must say I enjoy March Madness on an annual
    basis. And I envy the recruiting advertising that I have
    watched for the Air Force and the Marine Corps and what have
    you.
        Those are enormous dollar values that we simply cannot
    compete with.

                         deepwater replacement project

        Senator Shelby. The Integrated Deepwater Replacement
    project will potentially be the most expensive acquisition
    program in the Coast Guard's history.
        Admiral Loy. Yes, sir.
        Senator Shelby. Although funding in the near term is
    relatively small, the cost of the Deepwater project is
    projected to grow substantially and reach as much as $500
    million annually after the contract is awarded in the year
    2002.
        Admiral Loy. Yes, sir.
        Senator Shelby. This level of spending would consume nearly
    all the funding that is projected for the acquisition,
    construction, and improvements account.
        Can the Coast Guard afford the Deepwater project without
    relying on Congress to double AC&I funding or without foregoing
    virtually all other capital projects? You have to have capital
    money, do not you?
        Admiral Loy. Yes, sir, absolutely.
        Just two or three thoughts, sir. One, it is enormously
    important for us to recognize that we are using the 37th oldest
    of 41 like sized naval fleets in the world.
        Senator Shelby. We know you are. We know.
        Admiral Loy. And so the foundation for the re-
    capitalization challenge is an absolute one. And that is very,
    very real.
        We have worked very, very hard to imagine what the maritime
    environment will be like in 2020 or 2025 and what the nation
    would most logically expect out of its Coast Guard, and then
    worked backward to the capabilities, i.e., resources necessary
    to do those jobs.
        The project is underway. As you well know, there is a roles
    and missions effort associated with it, sir, that will help
    address that.
        The dollar values, I think, we have to take with a grain of
    salt until we reach the point in the project where these very
    best industrial minds of the nation, in the consortia that are
    competing for the project, offer us insights as to what the
    dollar values really will be.
        Senator Shelby. Yes.
        Admiral Loy. The $500 million that you heard cited was
    simply an estimate to cover perhaps a 15- to 20-year AC&I
    requirement, keyed to a one-for-one replacement of assets that
    we currently have.
        We are not going to be in the one-for-one replacement
    business. So, sir, I think we have to wait until we see better
    numbers.
        And then at that point, the Congress and the Administration
    will, I would hope, as they have done in the past, recognize
    the continuing need and find the way to fund those projects.
        Senator Shelby. Let us get into this a little bit, the
    procurement, taking a system of systems approach rather than
    replacing whole classes of ships and aircraft one at a time.
        Admiral Loy. Yes, sir.
        Senator Shelby. This is to some people the troubling
    aspects of the Deepwater Acquisition Strategy.
        Admiral Loy. Yes.
        Senator Shelby. This acquisition effort means overcoming
    the traditions and the culture of the various Coast Guard
    operational communities in breaking up the contracting
    establishment, does it not?
        Admiral Loy. I am not sure what communities you are
    speaking of, sir. Are we talking between ship drivers and
    aviators?
        The acquisition project, sir, is a very, very integrated
    effort on the part of the senior leadership of the
    organization.
        Senator Shelby. Yes.
        Admiral Loy. We have very carefully staffed the project and
    deal with it on a matrix management sense that offers all of
    those communities adequate input to the future package that
    will be represented by the project at the other end of the day.
        One of the ``problems'' that GAO and their audit offered
    was that legacy assets are not adequately dealt with in the
    design work that has gone into the project to this point.
        We have worked diligently to provide all the consortia all
    of the information that they have asked for or perceived the
    need for about our existent legacy fleet.
        So to the degree they imagine the extended life of some of
    those legacy assets to be built into their proposals, they will
    very much be able to do that.
        Senator Shelby. Okay.
        Admiral Loy. I do not see a competition problem, sir,
    between, for example, our aviators and our ship drivers. Not at
    all.

                           partnership with the navy

        Senator Shelby. It seems that there has been an
    unprecedented level of cooperation between the Coast Guard and
    the Navy. I think that is good.
        To better coordinate, integrate these two maritime forces,
    you and the Chief of Naval Operations, Admiral Jay Johnson,
    have embraced the concept of a National Fleet.
        Admiral Loy. Yes, sir.
        Senator Shelby. What is the National Fleet, and what role
    does it play in terms of the Deepwater project? And how does
    your AC&I budget request further the policy goals of the
    National Fleet concept? Could you comment on that?
        Admiral Loy. Yes, sir, happily.
        First of all, this was a concept that grew out of the
    NavGuard board, a board that meets twice annually, chaired by
    the Vice-Commandant and the Vice-Chief of Naval Operations, and
    offers that constant twice annual opportunity for the Coast
    Guard and the Navy to find those common areas of interest to
    both and to solve problems that seem to be, if you will, almost
    on the margin between their responsibilities and our own.
        The National Fleet is a concept whereby we want to promise
    to the American taxpayer and to the Congress that we have
    thoughtfully considered each other's requirements when we bring
    recapitalization projects to the Congress.
        There are great savings, I think, to be made, simply by
    acknowledging that we are both maritime services.
        An example: we were in the midst of a procurement on
    surface search radars. The Navy sort of caught wind of that
    procurement, became very interested in it, came aboard with us,
    and as a result at the other end of the day, because of the
    volume of procurement they brought to the table, we drove down
    the unit price of each one of the radars to be bought.
        Senator Shelby. Yes.
        Admiral Loy. The Navy is delighted with those radars on
    their ships and we are delighted with those radars on our
    ships.
        Senator Shelby. Splendid.
        Admiral Loy. So there are compatible systems throughout the
    infrastructure of any kind of a ship procurement that we feel
    we can save the American taxpayer a lot of money by being
    thoughtful about how we do that.
        Senator Shelby. That is good.
        Admiral Loy. So we are merging our acquisition efforts and
    we want to guarantee complementary asset procurement for the
    nation such that the nation's maritime business is dealt with
    by the nation's maritime fleet, made up of a Naval fleet and a
    Coast Guard fleet.
        Senator Shelby. That is good.

                               user fee proposal

        The President's budget request includes a proposal to levy
    a new user fee on American and foreign commercial cargo
    carriers for navigation services provided by the Coast Guard.
        This is not the first time that the Administration has
    proposed this tax, and Congress has rejected it every time.
        If Congress does not act on these tax proposals and I do
    not believe we will, what would you have to cut from the Coast
    Guard budget request to offset a $41 million shortfall?
        Admiral Loy. The projection for 2000 is a fourth quarter
    projection, as you know, sir.
        Senator Shelby. Yes.
        Admiral Loy. So it is $41 million in 2000 and becomes $165
    million if, in fact, those fees would actually be accrued to
    the account in future out years.
        First of all, sir, we have complied with the Congress's
    direction from last year. We are not in the midst of planning
    or implementing or designing a user fee proposal at this time
    because it was clear from language in last year's bill that we
    should not be doing that.
        This is an effort on the part of the Administration to
    solicit congressional support for the thought process directed
    to happen and get it out from under the thought process that we
    could do it ``with existing statutes that we already have.''
        It is about aids to navigation, icebreaking, and VTS
    services that we offer navigational users in the nation. The
    specific question you asked, sir, was ``What would give inside
    my budget?''
        Senator Shelby. Yes. That is right.
        Admiral Loy. If, in fact, we did not realize it, I think
    what I would like to leave on the record, sir, is that I and
    the Secretary and the President have clearly stipulated the
    need for the $350 million level of the capitalization
    requirement for the Coast Guard for 2000. And we have offered
    that as one thought process to gain some of those monies, this
    user fee proposal.
        We will watch very carefully and work very carefully with
    you as you consider it.

                                readiness issues

        Senator Shelby. Admiral Loy, as you well know, alarm over
    eroding readiness has the focus primarily on the Department of
    Defense.
        Admiral Loy. Yes, sir.
        Senator Shelby. Is the Coast Guard, the fifth military
    service as some people call it, experiencing similar problems
    in maintaining a high state of readiness either in fulfilling
    your national security function or your other responsibilities
    such as law enforcement and rescue?
        Admiral Loy. Now, sir, the dialogue has, as I indicated
    earlier, taken two tracks, a people track and an equipment or
    modernization track.
        And in both of those instances, sir, the Coast Guard has
    exactly the same inventory of challenges and problems as does
    DOD.
        We are concerned for our people. We are concerned for a
    downsized service with an overload in a number of missions. We
    are concerned with 80-and 90-hour work weeks at our stations.
    We are concerned with young sailors who are standing three days
    on, three days off, on a 24-hours on-call basis for 72 hours
    running.
        Senator Shelby. Yes.
        Admiral Loy. We are concerned with equipment in, for
    example, the MORNING DEW case and the ADRIATIC case. Our
    concern is registered simply from the reality that if it was
    taping equipment and communications equipment shortfalls that
    has resulted in that case of lives lost, that is a great
    concern to me.
        The only other chart that I wanted to bring to your
    attention, sir, this morning was the upper left hand corner of
    the readiness chart: it's all about a 44-footer case off of the
    Pacific Northwest three years ago that resulted in the loss of
    three of the four crewmen on that vessel.
        These are Coast Guard sailors that I am concerned about
    whether or not I am putting in harm's way with adequate
    training, adequate equipment, adequate wherewithal to do that.
    [GRAPHIC] [TIFF OMITTED] T12MA25.002

        Senator Shelby. It is a real concern though.
        Admiral Loy. It is a serious concern that I have, sir.
        Senator Shelby. As a multimission agency that is assigned a
    wide range of duties, does any particular mission area or areas
    strain readiness more than others, or is it across the board?
        Admiral Loy. I think there is a lot of attention, sir, on
    our counternarcotics mission at the moment. It certainly has
    been that for the last decade.
        It promises to be that for the next decade. But the true
    value of what the United States gets out of its Coast Guard is
    its multimission character and its multimission capability.
        In the summer and fall of 1994, although our assets were to
    be deployed on fisheries enforcement and counternarcotics
    enforcement predominantly, the realities of Haitian and Cuban
    refugees coming at the Florida peninsula certainly prompted us
    to give all of our attention, if you will, to that mission in
    that year.
        Senator Shelby. Yes.
        Admiral Loy. So what the country gets out of this
    organization is this grand mix of services to the American
    public. We are there to go in whatever direction America needs
    us on a daily basis.
        Further, I would again offer that that current capability
    foundation for this organization about readiness is to do all
    that we do for America, not just to focus in on being ready to
    do more in drugs.
        Senator Shelby. Yes.
        Admiral Loy. I do not think this Congress, I do not think
    the Administration, I do not think the American public wants us
    to back away from readiness to do search and rescue, aids to
    navigation, maritime safety or spill cleanup, et cetera, across
    that foundation, just to focus on counternarcotics.
        Our foundation needs to be able to do it all.

                          drug interdiction activities

        Senator Shelby. Okay. Does your budget request include
    sufficient resources to sustain a higher level of drug
    interdiction activities through the year 2000?
        Admiral Loy. It does, sir. There is an additional $46
    million in the counterdrug piece that will enable the Coast
    Guard to continue to make its contribution to the goals as have
    been prescribed by General McCaffrey and his National Drug
    Control Strategy.
        That $46 million will enable us to fund and operate the
    assets that you were kind enough to offer in the 1999
    supplemental. And we will have those assets on target in terms
    of complementing our counternarcotics activities.
        Senator Shelby. Senator Stevens, we are glad you could join
    us here today.
        Senator Stevens. Thank you very much.

                            exxon valdez anniversary

        Admiral, it is nice to see you. I enjoyed talking to you
    the other day. I understand you have already made remarks about
    the EXXON VALDEZ disaster of ten years ago yesterday.
        And I flew in there with one of your predecessors, Admiral
    Yost, you know.
        Admiral Loy. Yes, sir.
        Senator Stevens. But we do appreciate what you are doing
    and you are right. I think that the defenses against oil spill
    pollution in Prince William Sound are the best in the world.
        So I am grateful to the Coast Guard for their diligence in
    pursuing that to just absolute perfection.
        Admiral Loy. Thank you, sir.
        Senator Stevens. I am a little worried about what I am
    hearing about the new transportation bill in the House.
        Have you spoken about that yet?
        Admiral Loy. We have, sir, with the Chairman.
        Senator Stevens. Well, I intend to vigorously oppose any
    further diminution of the kind of support that we can give to
    agencies such as the Coast Guard.
        You are a defense establishment. I would oppose,
    completely, anything that would take any portion of the defense
    establishment and put it behind a firewall that could not be
    dealt with in terms of the regular appropriation process to
    meet emergencies.
        And I intend to inform the Chairman that I will oppose that
    bill.
        I think that the defense caucus over here will kill that
    bill, if he persists in trying to tie down, in terms of an
    entitlement, the ability to deal with emergencies in the Coast
    Guard or any other defense entity.
        And it is not just your defense side. I think you have
    obvious readiness problems in your daily lives in terms of law
    enforcement, search and rescue and other protection services of
    the Coast Guard.

                            vessels in the adriatic

        I do not have any specific questions for you this morning.
    I am sure that we are all working together with the Chairman
    here to make sure that you have the greatest flexibility
    possible to deal with your problems.
        Actually, I do have one question. I stayed up quite late
    last night surfing through all the information I could get from
    the media about the Kosovo issue. Have you got vessels in the
    Adriatic now?
        Admiral Loy. Not at this time, no, sir. We did, as you
    know, during the Bosnia incident.
        Senator Stevens. Yes, I remember.
        Admiral Loy. We provided principally some law enforcement
    detachment personnel that would enable some serious inspections
    to take place on maritime interdiction operations in the
    Adriatic, but we have nothing there at the moment, sir.
        Senator Stevens. All right.
        Admiral Loy. Senator Stevens, thank you very much for your
    thoughts on EXXON VALDEZ as well.
        Senator Shelby. We thank you for coming.
        Senator Stevens. Thank you, sir.

                          curtis bay coast guard yard

        Senator Shelby. Admiral Loy, I have several more questions.
        Admiral Loy. Yes, sir.
        Senator Shelby. The General Accounting Office recently
    issued a report that reviewed the Coast Guard's major
    administration and supportive functions.
        The GAO report found that the Coast Guard Yard located in
    Curtis Bay, Maryland, performs only a small percentage of the
    Coast Guard's industrial operations related to ships.
        What is the current utilization rate of the Coast Guard
    Yard?
        Admiral Loy. The utilization rate, sir, is keyed to my
    having labeled it, as have Commandants before me, as a core
    logistics facility for the organization.
        It represents about a $60 million a year work load and is
    sort of what the average has been, I would guess, sir, over the
    last ten years or so.
        We usually attempt to distribute that workload toward about
    a half of it being what I have come to call anchor projects
    over there. Those kind of things that are multi-year in nature
    that will solidify a foundation of work there.
        And then the others have become a variety of different
    things out of either our AC&I work or OE work, ship renovation
    and repair, that kind of thing.
        It has been an absolute godsend on numerous occasions
    where, for example, if a yard working on a Coast Guard cutter
    backs out of a contract and we need that cutter back in
    operation, the Yard has on several occasions stepped in and
    been able to finish the work, bailed out failed contracts, if
    you will, to get work done.
        They have also become the center of excellence, sir, in a
    variety of different engineering functional issues. For
    example, they have become probably the world's experts at
    Paxman engine repair inasmuch as a number of our vessels are
    propelled by Paxman engines. They have become the world's
    experts in doing that.
        Senator Shelby. Okay.
        Admiral Loy. They also do a lot of Mark 75 gun work,
    including some foreign military sales kind of work. They do
    Mark 75 guns for the Saudis.
        And they have also become the experts in removing PCBs and
    asbestos and such other offending agents from decommissioned
    cutters so that we can then scrap them with full attention
    having been given to the environmental realities of such
    things.
        Senator Shelby. Okay.
        Admiral Loy. So the Yard is fully employed, sir. And my
    concern is to look to the future and make certain that that 50
    percent of their work that we have attested to be their anchor
    projects are going to continue to play out into the future.

                              health care program

        Senator Shelby. Just to get into the Coast Guard's medical
    program, are you aware of any other problems in your health
    program such as retention or recruitment?
        Admiral Loy. Yes, sir. As I indicated earlier, the
    compensation, housing, and health care package of issues
    remains that people side with readiness that we are all very
    concerned about.
        We track carefully the reasons folks are, for example, not
    re-upping.
        Senator Shelby. Yes.
        Admiral Loy. Especially after a second-term enlistment. And
    to the degree, those four things are always there, retirement
    issues, housing issues, health-care issues, and compensation
    issues in there somewhere, is usually the reason for some
    sailor or Coast Guard airman to go a different way.
        Senator Shelby. You have some of the retention problems
    that other services have.
        Admiral Loy. Identical to them, sir.
        Senator Shelby. Yes.
        Admiral Loy. Identical to them, sir. Tricare, of course, is
    the supposed solution for military health care. The challenge
    for the Coast Guard is that probably a good 50 to 60 percent of
    Coast Guard people are outside the so-called catchment areas
    for Tricare facilities.
        And so we find ourselves in the Cordovas and the Homers of
    the world in Alaska. And in places where access to a major
    military hospital that can be the core for Tricare health
    delivery is not available to them.
        And then we become at the whim of whatever providers are in
    those areas.
        We have recently expressed those concerns after I came back
    from Alaska, and it became the cause celebre, if you will,
    through the course of my trip up there.
        And we have activated the Tricare managers in the
    Department of Defense to work with us to provide better
    availability of treatment for Coast Guard personnel and their
    dependents.
        And lastly, sir, the simple sobering reality of health care
    costs across the nation are reflected inside of our budget as
    well.
        One of the things that we sort of got away with over the
    course of a number of years was services provided by the
    Department of Defense for which we did not end up paying.
        They have gotten a lot better at their bookkeeping, so that
    aspect of driving our health care costs in a spiraling upward
    direction is real as well.
        So we have the potential for a $32 million problem in the
    2000 budget. We are asking for $13 million in our bill and have
    arrangements that we are in the process of making with our DOD
    counterparts to pick up the other $18 million.
        But it is a serious issue, sir.
        Senator Shelby. Are you concerned that the DOD contribution
    will not materialize?
        Admiral Loy. That still has to be knitted together.
        Senator Shelby. Yes.
        Admiral Loy. And I am concerned, yes, sir.
        Senator Shelby. Okay. I have been told that the Coast Guard
    is experiencing a shortfall in its maritime patrol aircraft
    capability to support counterdrug operations.
        This shortfall is estimated to reach 6,000 to 7,000 hours
    per year.
        Admiral Loy. Yes.
        Senator Shelby. In either your role as the U.S.
    Interdiction Coordinator or as Commandant, are you aware of
    such a shortfall?
        Admiral Loy. Oh, absolutely, sir. And, as you know, General
    McCaffrey's strategy is a ten-year strategy, to get to where we
    need to get to in 2007 on a 1996 baseline.
        Senator Shelby. Yes.
        Admiral Loy. In the out year, he has a five-year budget
    that supports that ten-year strategy.
        Senator Shelby. Yes.
        Admiral Loy. And in the out years, we absolutely have to
    fill that shortfall, if we are to meet the goals as have been
    prescribed by the President in the 2002 and 2007 checkpoints.
        Senator Shelby. Would additional C-130s assist in meeting
    the shortfall?
        Admiral Loy. Anything that we could get to help us meet the
    shortfall would do so, sir.
        Senator Shelby. Okay.
        Admiral Loy. We have----
        Senator Shelby. Would they help?
        Admiral Loy. We focused in the last year, on recalling HU-
    25s and putting them back to work, because of the support
    provided by the Congress.
        Senator Shelby. Yes.
        Admiral Loy. And as Interdiction Coordinator I have focused
    on P-3s, but C-130s would certainly fill the bill. We are using
    them today.

                         Additional committee questions

        Senator Shelby. I appreciate your appearance here today. We
    will leave the record open for Senator Lautenberg and any other
    questions for the record. And this committee will now be
    adjourned subject to the call of the Chair.
        [The following questions were not asked at the hearing, but
    were submitted to the Agency for response subsequent to the
    hearing:]

                     Questions Submitted by Senator Shelby

             fiscal year 1998 and 1999 reprogrammings and transfers
        Question. Please provide the amount and description of all
    reprogrammings or transfers of funds that occurred within fiscal year
    1998 or thus far in fiscal year 1999.
        Answer. There have been no congressional reprogrammings in the
    Operating Expenses (OE) appropriation in fiscal year 1998 and thus far
    in 1999. The table below shows the transfers to the OE appropriation in
    fiscal year 1998 and thus far in 1999.

    ------------------------------------------------------------------------
                  Agency                    Amount       Reason for transfer
    ------------------------------------------------------------------------
    Fiscal year 1998:
        ONDCP.........................         $45,393  Funding for a
                                                         counterdrug billet.
        Department of State...........          63,000  International
                                                         Cooperative Admin.
                                                         Support Service
                                                         Program.
    Fiscal year 1999:
        Information Technology Systems      20,505,000  Y2K Supplemental.
         and Related Expenses.
        Information Technology Systems       7,210,000  Y2K Supplemental.
         and Related Expenses.
        Information Technology Systems       4,058,000  Y2K Supplemental.
         and Related Expenses.
    ------------------------------------------------------------------------

        There have been no transfers of funds in the Acquisition,
    Construction, and Improvements (AC&I) appropriation in fiscal year 1998
    or thus far in fiscal year 1999. The table below shows the amount and
    description of reprogrammings that occurred within AC&I in fiscal year
    1998 and thus far in 1999 for the appropriation.

                  UNITED STATES COAST GUARD--ACQUISITION, CONSTRUCTION, AND IMPROVEMENTS APPROPRIATION
    ----------------------------------------------------------------------------------------------------------------
                     PROJECT TITLE                         BRIEF DESCRIPTION OF REPROGRAMMINGS            AMOUNT
    ----------------------------------------------------------------------------------------------------------------
         FISCAL YEAR 1999 REPROGRAMMING ACTIONS

    COASTAL BUOY TENDER (WLM) REPLACEMENT..........  PROJECT SAVINGS................................      -3,000,000
    DEEPWATER CAPABILITY REPLACEMENT ANALYSIS......  INSUFFICIENT FUNDS.............................       3,000,000
    COASTAL BUOY TENDER (WLM) REPLACEMENT..........  PROJECT SAVINGS................................      -5,000,000
    DEEPWATER CAPABILITY REPLACEMENT ANALYSIS......  PENDING CONGRESSIONAL APPROVAL.................       5,000,000
    TRAINING INFRASTRUCTURE STUDY..................  PROJECT TERMINATION............................      -2,200,000
    GROUP NEW ORLEANS RELOCATION...................  PENDING CONGRESSIONAL APPROVAL.................       2,200,000
    CONVERSION OF SOFTWARE APPLICATION.............  PROJECT SAVINGS................................      -1,500,000
    FLEET LOGISTICS SYSTEM (FLS)...................  PROCUREMENT MODULE.............................       1,500,000
    CONVERSION OF SOFTWARE APPLICATION.............  PROJECT SAVINGS................................        -800,000
    MARINE INFORMATION FOR SAFETY AND LAW            INSUFFICIENT FUNDS.............................         800,000
     ENFORCEMENT (MISLE).
    TRAFFIC AND COLLISION AVOIDANCE SYSTEM (TCAS)..  PROJECT SAVINGS................................      -1,000,000
    ROLES AND MISSION STUDY........................  DIRECTED BY CONGRESS...........................       1,000,000
    STATION BELLINGHAM RELOCATION..................  PROJECT SAVINGS................................        -222,000
    ISC KODIAK HANGAR RENOVATION...................  CONTRACT CHANGE ORDERS.........................         222,000
    COASTAL BUOY TENDER (WLM) REPLACEMENT..........  PROJECT SAVINGS................................        -400,000
    ATS-1 CONVERSION...............................  COMPLETE PRE-COMMISSIONING OUTFITTING..........         400,000

         FISCAL YEAR 1998 REPROGRAMMING ACTIONS

    SAN PEDRO CONSTRUCT MEDICAL FACILITY...........  PROJECT SAVINGS................................        -165,000
    STATION SABINE RECONSTRUCT/EXPAND WATERFRONT...  OUTFITTING ELECTRONICS AND CHANGE ORDERS.......         165,000
    210-FOOT MEDIUM ENDURANCE CUTTER (WMEC) MMA....  PROJECT SAVINGS................................         -41,000
    SURVEY & DESIGN VESSELS........................  INSUFFICIENT FUNDS.............................          41,000
    210-FOOT MEDIUM ENDURANCE CUTTER (WMEC) MMA....  PROJECT SAVINGS................................          -1,400
    SURVEY & DESIGN VESSELS........................  INSUFFICIENT FUNDS.............................           1,400
    SANDY HOOK, NJ CONSTRUCT GROUP ENGINEERING       PROJECT SAVINGS................................         -15,100
     BUILDING.
    STATION HONOLULU, HI REPLACEMENT...............  CONTRACT CHANGE ORDERS.........................          15,100
    ATLANTIC STRIKE TEAM EQUIPMENT STORAGE FACILITY  PROJECT SAVINGS................................        -265,000
    MID-ATLANTIC AIR STATION CONSOLIDATION.........  ANTECEDENT LIABILITY...........................         265,000
    SUPRTCEN PORTSMOUTH PAINTING/SANDBLAST FACILITY  PROJECT SAVINGS................................         -25,000
    MID-ATLANTIC AIR STATION CONSOLIDATION.........  PROJECT CONTINGENCIES..........................          25,000
    VHF-FM HIGH-LEVEL SITE UPGRADE.................  PROJECT SAVINGS................................        -615,000
    FREQUENCY SPECTRUM REALLOCATION................  COMPLIANCE WITH OMNIBUS BUDGET RECONCILIATION           615,000
                                                      ACT OF 1993 MANDATE TO VACATE FREQUENCY
                                                      SPECTRUM.
    VARIOUS SHORE PROJECTS.........................  PROJECT SAVINGS................................         -40,000
    CG ACADEMY GALLEY RENOVATION/CHASE HALL........  CONTRACT CHANGE ORDERS & CONTINGENCIES.........          40,000
    BASE SOUTH PORTLAND, ME CONSTRUCT STATION OPS    PROJECT SAVINGS................................          -1,000
     BLDG.
    CG ACADEMY ROLAND HALL RENOVATION..............  CONTRACT CHANGE ORDERS & CONTINGENCIES.........           1,000
    SUPRTCEN PORTSMOUTH PAINTING/SANDBLAST FACILITY  PROJECT SAVINGS................................         -15,000
    MID-ATLANTIC AIR STATION CONSOLIDATION.........  CONTRACT CHANGE ORDERS.........................          15,000
    VARIOUS SHORE PROJECTS.........................  PROJECT SAVINGS................................        -300,000
    AIR STATION MIAMI HANGAR UPGRADE...............  CONTRACTOR CLAIM...............................         300,000
    TRAFFIC AND COLLISION AVOIDANCE SYSTEM (TCAS)..  PROJECT SAVINGS................................        -547,000
    GLOBAL POSITIONING SYSTEMS INSTALLATION (GPS)..  RETROFIT OF OBSOLETE OMEGA/GPS NAVIGATION               547,000
                                                      SYSTEM.
    BAYONNE, NJ PIER IMPROVEMENT...................  PROJECT SAVINGS................................         -12,500
    ROSEBANK, NY PIER & STATION REHABILITATION.....  PROJECT SAVINGS................................          -7,500
    CG ACADEMY GALLEY RENOVATION/CHASE HALL........  CONTRACT CHANGE ORDERS.........................          20,000
    BASE KETCHIKAN--REPLACEMENT BREAKWATER.........  PROJECT SAVINGS................................        -200,000
    CG DISTRICT ONE--CONSTRUCT BAYONNE PIER........  CONTRACT CHANGE ORDERS & CONTINGENCIES.........         200,000
    SUPRTCEN SAN PEDRO CONSTRUCT MEDICAL FACILITY..  PROJECT SAVINGS................................         -17,000
    MID-ATLANTIC AIR STATION CONSOLIDATION.........  CONTRACT CHANGE ORDERS.........................          17,000
    CG YARD LAND-BASED SHIP HANDLING FACILITY......  PROJECT SAVINGS................................          -2,407
    CG ACADEMY ROLAND HALL RENOVATION..............  CONTRACT CHANGE ORDERS.........................           2,407
    MSO TAMPA ADMINISTRATION BUILDING..............  PROJECT SAVINGS................................         -30,298
    GROUP STATION FT MACON MULTIPURPOSE BUILDING...  CONTRACTOR CLAIM FOR EQUITABLE ADJUSTMENT......          30,298
    SELF-PROPELLED BARGE...........................  PROJECT SAVINGS/TERMINATION....................        -200,000
    DEEPWATER CAPABILITY REPLACEMENT ANALYSIS......  INSUFFICIENT FUNDS.............................         200,000
    VARIOUS SHORE PROJECTS.........................  PROJECT SAVINGS................................         -38,857
    STATION HONOLULU, HI REPLACEMENT...............  CONTRACTOR CLAIM...............................          38,857
    TRAFFIC AND COLLISION AVOIDANCE SYSTEM (TCAS)..  PROJECT SAVINGS................................        -550,000
    LONG-RANGE SEARCH AIRCRAFT CAPABILITY            AVIATION CAPABILITY ANALYSIS FOR INTEGRATED             550,000
     PRESERVATION.                                    DEEPWATER SYSTEM.
    VARIOUS OTHER EQUIPMENT PROJECTS...............  PROJECT SAVINGS................................        -700,000
    FLEET LOGISTICS SYSTEM (FLS)...................  DEVELOP STANDARD PROCUREMENT MODULE INCREMENT 3         700,000
    ----------------------------------------------------------------------------------------------------------------

                        unobligated and carryover funds
        Question. Please provide a list of any unobligated funds and
    carryover funds from previous years.
        Answer. The Operating Expenses (OE) appropriation was appropriated
    $2,816,300,000 in fiscal year 1999, of which $1,465,450,086 was
    unobligated as of March 31, 1999. $48,024 in OE funding was carried
    forward from fiscal year 1998 to fiscal year 1999. These funds are
    available until expended for Hurricane Iniki and Andrew costs pursuant
    to the Supplemental Appropriations Transfers and Rescissions Act,
    Public Law 102-368.
        The following table provides a list of unobligated funds carried
    forward from previous fiscal years for the Acquisition, Construction,
    and Improvements (AC&I) appropriation.

     UNITED STATES COAST GUARD--ACQUISITION, CONSTRUCTION, AND IMPROVEMENTS
                 APPROPRIATION--UNOBLIGATED BALANCES BY PROJECT
                                [AS OF 03/31/99]
    ------------------------------------------------------------------------
     YEAR FUNDS                                 BALANCE BY
    APPROPRIATED         PROJECT TITLE          FISCAL YEAR    PROJECT TOTAL
    ------------------------------------------------------------------------
           199547-FOOT MOTOR LIFEBOAT             $171,000  ..............
                (MLB) REPLACEMENT
           199647-FOOT MOTOR LIFEBOAT                2,000  ..............
                (MLB) REPLACEMENT
           199747-FOOT MOTOR LIFEBOAT              141,000  ..............
                (MLB) REPLACEMENT
           199847-FOOT MOTOR LIFEBOAT            1,599,000  ..............
                (MLB) REPLACEMENT
           199947-FOOT MOTOR LIFEBOAT           20,800,000     $22,713,000
                (MLB) REPLACEMENT
           1999ATS-1 CONVERSION                  1,743,000       1,743,000
           1995COASTAL BUOY TENDER (WLM)            16,000  ..............
                REPLACEMENT
           1996COASTAL BUOY TENDER (WLM)            24,000  ..............
                REPLACEMENT
           1997COASTAL BUOY TENDER (WLM)         1,356,000  ..............
                REPLACEMENT
           1998COASTAL BUOY TENDER (WLM)        15,450,000  ..............
                REPLACEMENT
           1999COASTAL BUOY TENDER (WLM)        24,070,000      40,916,000
                REPLACEMENT
           1995COASTAL PATROL BOAT (CPB)            41,000  ..............
                REPLACEMENT
           1996COASTAL PATROL BOAT (CPB)             1,000  ..............
                REPLACEMENT
           1997COASTAL PATROL BOAT (CPB)           284,000  ..............
                REPLACEMENT
           1998COASTAL PATROL BOAT (CPB)           494,000  ..............
                REPLACEMENT
           1999COASTAL PATROL BOAT (CPB)        29,891,000  ..............
                REPLACEMENT
             NOCOASTAL PATROL BOAT (CPB)         3,189,000  ..............
                REPLACEMENT
             NOCOASTAL PATROL BOAT (CPB)        33,000,000      66,900,000
                REPLACEMENT
           1996CONFIGURATION MANAGEMENT              4,000  ..............
           1997CONFIGURATION MANAGEMENT            106,000  ..............
           1999CONFIGURATION MANAGEMENT          3,800,000       3,910,000
             NOCUTTER SENSOR AND                13,000,000  ..............
                COMMUNICATIONS SYSTEMS
             NOCUTTER SENSOR AND                15,600,000      28,600,000
                COMMUNICATIONS SYSTEMS
             NODEPLOYABLE PURSUIT BOAT           2,017,000       2,017,000
                ACQUISITION
           1998GREAT LAKES ICEBREAKER               21,000  ..............
                CAPABILITY
           1999GREAT LAKES ICEBREAKER            4,385,000       4,406,000
                CAPABILITY
           1997MOTOR SURF BOAT (MSB)                19,000          19,000
                REPLACEMENT
           1997POLAR CLASS ICEBREAKER              134,000  ..............
                RELIABILITY
           1998POLAR CLASS ICEBREAKER            1,600,000       1,734,000
                RELIABILITY
           1995POLAR ICEBREAKER                     13,000  ..............
                REPLACEMENT (PIR)
           1997POLAR ICEBREAKER                     26,000  ..............
                REPLACEMENT (PIR)
           1998POLAR ICEBREAKER                    346,000  ..............
                REPLACEMENT (PIR)
           1999POLAR ICEBREAKER                  1,000,000       1,385,000
                REPLACEMENT (PIR)
           1995SEAGOING BUOY TENDER (WLB)           34,000  ..............
                REPLACEMENT
           1996SEAGOING BUOY TENDER (WLB)          108,000  ..............
                REPLACEMENT
           1997SEAGOING BUOY TENDER (WLB)           39,000  ..............
                REPLACEMENT
           1999SEAGOING BUOY TENDER (WLB)       26,221,000      26,402,000
                REPLACEMENT
           1995STERN LOADING BUOY BOAT              11,000  ..............
                BUSL REPL
           1997STERN LOADING BUOY BOAT              13,000  ..............
                BUSL REPL
           1998STERN LOADING BUOY BOAT             120,000  ..............
                BUSL REPL
           1999STERN LOADING BUOY BOAT             478,000         622,000
                BUSL REPL
           1997SURFACE SEARCH RADAR                  2,000  ..............
                REPLACEMENT
           1998SURFACE SEARCH RADAR                425,000  ..............
                REPLACEMENT
           1999SURFACE SEARCH RADAR              5,631,000       6,058,000
                REPLACEMENT
           1995SURVEY & DESIGN--CUTTERS             25,000  ..............
                AND BOATS
           1998SURVEY & DESIGN--CUTTERS            200,000  ..............
                AND BOATS
           1999SURVEY & DESIGN--CUTTERS            500,000         725,000
                AND BOATS
                                           ---------------------------------
                     TOTAL, VESSELS            208,150,000     208,150,000
                                           =================================
             NOAIRCRAFT SENSOR & C-130          38,318,000      38,318,000
                ENGINE UPGRADE
           1998GLOBAL POSITIONING SYSTEM           557,000         557,000
                INSTALLATION
           1998HC-130 AIRCRAFT SENSOR              630,000  ..............
                UPGRADE
           1999HC-130 AIRCRAFT SENSOR           10,000,000      10,630,000
                UPGRADE
           1999HC-130 ENGINE CONVERSION            370,000         370,000
           1999HC-130 SIDE LOOKING               2,400,000       2,400,000
                AIRBORNE RADAR (SLAR)
           1999HH-60J NAVIGATION UPGRADE            96,000          96,000
           1999HH-65A ENGINE CONTROL             5,500,000       5,500,000
                PROGRAM
           1997HH-65A HELICOPTER KAPTON             25,000  ..............
                REWIRING REPLACEMENT
           1998HH-65A HELICOPTER KAPTON          1,500,000  ..............
                REWIRING REPLACEMENT
           1999HH-65A HELICOPTER KAPTON          4,500,000       6,025,000
                REWIRING REPLACEMENT
           1998HH-65A HELO MISSION UNIT            100,000  ..............
                COMPUTER REPLACEMENT
           1999HH-65A HELO MISSION UNIT          2,223,000       2,323,000
                COMPUTER REPLACEMENT
           1999HU-25 AIRCRAFT AVIONICS           3,500,000       3,500,000
                IMPROVEMENT
           1998LONG RANGE SEARCH AIRCRAFT        2,465,000       2,465,000
                CAPABILITY PRESERVATION
             NOMARITIME PATROL AIRCRAFT         37,000,000      37,000,000
                ACQUISITION
             NOOPERATIONAL TEST, USE OF            779,000         779,000
                FORCE FROM AIRCRAFT
             NOREACTIVATE OF HU-25 JETS            542,000         542,000
           1999ROLES AND MISSION STUDY           1,000,000       1,000,000
           1998TRAFFIC AND COLLISION             1,200,000  ..............
                AVOIDANCE SYSTEM (TCAS)
             NOTRAFFIC AND COLLISION               468,000       1,668,000
                AVOIDANCE SYSTEM (TCAS)
                                           ---------------------------------
                     TOTAL, AIRCRAFT           113,173,000     113,173,000
                                           =================================
           1997AVIATION LOGISTICS                  958,000  ..............
                MANAGEMENT INFORMATION
                SYSTEM (ALMIS)
           1998AVIATION LOGISTICS                2,699,000  ..............
                MANAGEMENT INFORMATION
                SYSTEM (ALMIS)
           1999AVIATION LOGISTICS                1,000,000       4,657,000
                MANAGEMENT INFORMATION
                SYSTEM (ALMIS)
           1999COMMERCIAL SATELLITE COMM         3,935,000       3,935,000
                UPGRADE
           1998COMMUNICATION SYSTEM                195,000  ..............
                (COMMSYS) 2000
           1999COMMUNICATION SYSTEM              1,162,000       1,357,000
                (COMMSYS) 2000
           1997CONVERSION OF SOFTWARE               20,000  ..............
                APPLICATION
           1998CONVERSION OF SOFTWARE            1,620,000       1,640,000
                APPLICATION
           1998DEFENSE MESSAGE SYSTEM            1,129,000  ..............
                (DMS) IMPLEMENTATION
           1999DEFENSE MESSAGE SYSTEM              460,000       1,589,000
                (DMS) IMPLEMENTATION
           1998DIFFERENTIAL GLOBAL                 146,000         146,000
                POSITIONING SYSTEM (DGPS)
           1997FINANCE CENTER INFORMATION            8,000           8,000
                SYSTEM REPLACEMENT
           1998FLEET LOGISTICS SYSTEM              111,000  ..............
                (FLS)
           1999FLEET LOGISTICS SYSTEM            1,939,000       2,050,000
                (FLS)
           1998FREQUENCY SPECTRUM                  750,000         750,000
                REALLOCATION
           1997GLOBAL MARITIME DISTRESS            529,000         529,000
                AND SAFETY SYSTEM
           1998LOCAL NOTICE TO MARINERS            550,000  ..............
                (LNM) AUTOMATION
           1999LOCAL NOTICE TO MARINERS          1,000,000       1,550,000
                (LNM) AUTOMATION
           1999MARINE INFORMATION FOR            1,540,000       1,540,000
                SAFETY AND LAW ENFORCEMENT
                (MISLE)
           1999MARITIME DIFFERENTIAL             6,000,000       6,000,000
                GLOBAL POSITIONING SYSTEM
                (DGPS)
           1998NATIONAL DISTRESS SYSTEM          1,800,000  ..............
                MODERNIZATION
           1999NATIONAL DISTRESS SYSTEM          3,000,000       4,800,000
                MODERNIZATION
           1997PERSONNEL MANAGEMEMT                646,000  ..............
                INFORMATION SYSTEM/MIL PAY
                SYSTEM
           1998PERSONNEL MANAGEMEMT                 38,000  ..............
                INFORMATION SYSTEM/MIL PAY
                SYSTEM
           1999PERSONNEL MANAGEMEMT              1,146,000       1,830,000
                INFORMATION SYSTEM/MIL PAY
                SYSTEM
           1997PORTS AND WATERWAYS SAFETY          254,000  ..............
                SYSTEMS (PAWSS)
           1998PORTS AND WATERWAYS SAFETY          322,000  ..............
                SYSTEMS (PAWSS)
           1999PORTS AND WATERWAYS SAFETY        5,901,000       6,477,000
                SYSTEMS (PAWSS)
           1997VESSEL TRAFFIC SERVICE              254,000         254,000
                REQUIREMENTS EVALUATION
           1997VHF-FM HIGH LEVEL SITE               93,000  ..............
                UPGRADE
           1998VHF-FM HIGH LEVEL SITE            2,500,000       2,593,000
                UPGRADE
                                           ---------------------------------
                     TOTAL, OTHER               41,705,000      41,705,000
                      EQUIPMENT
                                           =================================
             NOACQUISITION OF 2 C3              17,000,000      17,000,000
                PLATFORMS
           1999AIR STATION CAPE COD--            1,500,000       1,500,000
                REPLACEMENT ELECTRIC
                DISTRIBUTION SYS
           1999AIRSTATION MIAMI--RENOVATE        3,600,000       3,600,000
                FIXED WING HANGAR
           1997BALTIMORE, MD--COST GUARD            19,000          19,000
                YARD LAND BASED SHIP
                HANDLING FAC.
           1997BASE SAN JUAN                       293,000         293,000
                RECONSTRUCTION PHASE I
           1998BAYONNE, NJ CONTRUCT PIER           200,000         200,000
           1999CAPITALIZATION PROJECT            8,000,000       8,000,000
             NOCOMSTA MIAMI RESTORATION            226,000         226,000
           1997CUTTERS CHIPPEWA AND OBION           38,000          38,000
                RELOCATE OWENSBORO MOORING
           1998GROUND WAVE EMERGENCY               294,000         294,000
                NETWORK (GWEN/DGPS)
           1998GROUP WOODS HOLE--                  120,000         120,000
                WATERFRONT RENOVATION
           1998GROUP STATION NEW ORLEANS--       8,400,000       8,400,000
                RELOCATION PHI
           1999GROUP STATION NEW ORLEANS         4,000,000       4,000,000
           1999INTEGRATED SUPPORT COMMAND        2,100,000       2,100,000
                (ISC) BOSTON WATERFRONT
                REHAB
           1998INTEGRATED SUPPORT COMMAND          246,000         246,000
                (ISC) KETCHIKAN REPLACE
                BREAKWATER
           1998INTEGRATED SUPPORT COMMAND           54,000          54,000
                (ISC) KODIAK HANGAR
                RENOVATION
           1998INTEGRATED SUPPORT COMMAND          745,000         745,000
                (ISC) PORTSMOUTH, VA
             NOHURRICANE GEORGES                 6,620,000       6,620,000
                SUPPLEMENTAL
           1998LEADERSHIP DEVELOPMENT              470,000         470,000
                CENTER PH IV
             NOMIDWEST FLOOD SUPPLEMENTAL          399,000         399,000
           1997MINOR AC&I SHORE                     25,000  ..............
                CONSTRUCTION PROJECT
           1998MINOR AC&I SHORE                    525,000  ..............
                CONSTRUCTION PROJECT
           1999MINOR AC&I SHORE                  5,910,000       6,460,000
                CONSTRUCTION PROJECT
           1999OPTIMIZE COAST GUARD              2,200,000       2,200,000
                TRAINNG INFRASTRUCTURE
           1997PUBLIC FAMILY QUARTERS               12,000  ..............
           1998PUBLIC FAMILY QUARTERS            1,623,000  ..............
           1999PUBLIC FAMILY QUARTERS            9,000,000      10,635,000
           1999STA CAPE DISAPPOINTMENT 47'       1,700,000       1,700,000
                MLB IMPROVEMENTS
           1999STATION DAUPHIN ISLAND            3,200,000       3,200,000
           1997STATION JUNEAU RENOVATE/             71,000          71,000
                EXPAND STATION FACILITY
           1999STATION NEAH BAY--                3,000,000       3,000,000
                WATERFRONT RENOVATION
           1999STATION OSWEGO 47' MLB            1,450,000       1,450,000
                IMPROVEMENTS
           1997STATION SABINE CONSTRUCT/            90,000          90,000
                EXPAND WATERFRONT FACILITY
           1998STATION BELLINGHAM                  633,000         633,000
                RELOCATION
           1997SUPRTCEN PORTSMOUTH UPGRADE          24,000          24,000
                PAINTING AND SANDBLAST
                FACILITY
           1997SUPRTCEN SAN PEDRO                   87,000          87,000
                CONSTRUCT MEDICAL FACILITY
           1997SURVEY & DESIGN--SHORE               56,000  ..............
                PROJECTS
           1998SURVEY & DESIGN--SHORE                2,000  ..............
                PROJECTS
           1999SURVEY & DESIGN--SHORE            2,800,000       2,858,000
                PROJECTS
           1999WATERWAYS AIDS-TO-                4,073,000       4,073,000
                NAVIGATION PROJECTS
                                           ---------------------------------
                     TOTAL, SHORE PROGRAM       90,805,000      90,805,000
                                           =================================
                     TOTAL, ALL CATEGORIES     453,833,000     453,833,000
    ------------------------------------------------------------------------

       comparison of ac&i fiscal year 1999 and fiscal year 2000 requests
        Question. Please provide a table comparing your fiscal year 2000
    Acquisition, Construction, and Improvements (AC&I) request with your
    fiscal year 1999 request and House, Senate, and Conference actions.
        Answer. The information follows.

        COAST GUARD FISCAL YEAR 1999-2000 ACQUISITION, CONSTRUCTION, AND
                           IMPROVEMENTS BUDGET SUMMARY

    Fiscal year             [In thousands of dollars]
        1998 Enacted..............................................   407,300
        1999 Requested............................................   443,000
        1999 Senate...............................................   426,200
        1999 House................................................   389,000
        1999 Conference...........................................   395,400
        2000 Requested............................................   350,326

    ----------------------------------------------------------------------------------------------------------------
                                                                         Fiscal year 1999                   Fiscal
                           Project                       ------------------------------------------------  year 2000
                                                              Req       Senate       House       Conf         Req
    ----------------------------------------------------------------------------------------------------------------
                           VESSELS

    Survey & Design.....................................         500         500         500         500         500
    Buoy Tender (WLB)...................................     105,000      45,000      81,790      72,600      77,000
    Buoy Tender (WLM)...................................      31,000      31,000      27,000      27,000  ..........
    Buoy Boat (BUSL)....................................      11,773      11,773       7,055      11,773       5,000
    47' (MLB)...........................................      20,800      20,800      20,800      20,800      24,360
    Healy...............................................       2,100       2,100       2,100       2,100       1,900
    Surf Search Radar...................................      12,900      12,900       8,450       8,450       4,000
    Coastals (CPB)......................................      37,600      37,600      47,600      37,600       1,000
    Deepwater...........................................      28,000      28,000      20,000      20,000      44,200
    GLIB................................................  ..........       4,000       6,000       5,300  ..........
    Repair/improve vessels:
        Polar (RIP).....................................       6,100       4,000  ..........  ..........       4,100
        Config Mgmtt....................................       3,800       3,800       3,800       3,800       3,700
        Edenton.........................................      10,000      14,000       2,000      10,000  ..........
                                                         -----------------------------------------------------------
          Subtotal vessels..............................     269,573     215,473     227,095     219,923     165,760
    Reprogramming Prior Year Funds......................  ..........  ..........      -9,100  ..........  ..........
    New budget authority................................  ..........  ..........     227,913  ..........  ..........
                                                         ===========================================================
                          AIRCRAFT

    HH-65A Kapton Wiring................................       4,500       4,500       4,500       4,500       3,360
    HH-65A Mission Computer Unit Replacement............       3,000       3,000       3,000       3,000       3,650
    HC-130 Eng Upgrade * C..............................       9,941       9,941       4,100       4,100  ..........
    L R Search--HC-130..................................       1,590       1,590  ..........  ..........       5,900
    HC-130 Sensor-drugs.................................      11,000      11,000      11,000      11,000  ..........
    HU-25 Aircraft Avionics.............................       3,500       3,500       3,500       3,500       2,900
    HH-60J Upgraded Navigation..........................       1,100       1,100       1,100       1,100       3,800
    Low Signature Aircraft..............................  ..........  ..........       2,000  ..........  ..........
    HU-25 Engine Overhaul...............................  ..........  ..........       9,000  ..........  ..........
    HH-65 Engine Control FADEC..........................  ..........       9,000  ..........       6,000  ..........
    HH-130 Side Looking Airborne Radar Upgrade..........       2,500       2,500       2,500       2,500       2,500
                                                         -----------------------------------------------------------
          Subtotal aircraft.............................      37,131      46,131      40,700      35,700      22,110
    Reprogramming Prior Year Funds......................  ..........  ..........      -1,400  ..........  ..........
    New budget authority................................  ..........  ..........      39,400  ..........  ..........
                                                         ===========================================================
                       OTHER EQUIPMENT

    Fleet Logistics System (FLS)........................       4,669       4,669       4,669       4,669       6,000
    Ports and Waterways (PAWSS).........................       6,600       5,500       6,600       6,600       4,500
    Marine Info for Safety & LE (MISLE).................       6,100       4,000       4,100       4,100      10,500
    Communications System (COMMSYS) 2000................       2,000       1,000       2,000       2,000  ..........
    Aviation Logistics Info System  (ALMIS).............       1,000       1,000  ..........       1,000       2,700
    National Distress System (NDS)......................       3,000       2,000       3,000       3,000      16,000
    DGPS Phase III......................................       2,600       9,520  ..........       7,500  ..........
    Defense Message Service Implementation..............         800         800         800         800       3,477
    PMIS/JUMPS II, PH II................................       1,900       1,900       1,900       1,900       4,400
    Commercial Comms Sat-drugs..........................       4,000       4,000       4,000       4,000       4,049
    Local Notice to mariners............................       1,300       1,000       1,300       1,000  ..........
    Drug Sensors--Deploy Dectect ID.....................  ..........  ..........       9,000  ..........  ..........
    Human Res Info Sys..................................  ..........  ..........  ..........  ..........       1,100
    LORAN C Recap.......................................  ..........  ..........  ..........  ..........       1,000
                                                         -----------------------------------------------------------
          Subtotal other equipment......................      33,969      35,389      37,369      36,569      53,726
    Reprogramming Prior Year Funds......................  ..........  ..........      -7,055  ..........  ..........
    New budget authority................................  ..........  ..........      30,314  ..........  ..........
                                                         ===========================================================
                    SHORE FACILITIES/ATON
    Survey & Design.....................................       5,000       5,000       5,000       5,000       6,000
    Minor AC&I..........................................       6,000       6,000       6,000       6,000       6,000
    Air stations:
        AIRSTA Cape Cod--Electrical.....................       1,500       1,500       1,500       1,500  ..........
        AIRSTA Miami--HU25 Hangar.......................       7,100       7,100       3,600       3,600       3,500
        AIRSTA Kodiak--Hangar...........................  ..........  ..........  ..........  ..........       8,300
        AIRSTA Elizabeth City--Ramp Expansion...........  ..........  ..........  ..........  ..........       3,800
    Supply/support/training ctrs:
        ISC Alameda--Replace Cause-  way................  ..........  ..........  ..........  ..........  ..........
        ISC Boston--Waterfront Rehab....................       2,100       2,100       2,100       2,100  ..........
        CGA--Renovate Satterlee Hall....................  ..........  ..........  ..........  ..........       5,000
    Coast guard housing.................................      18,600       5,000       2,300       9,000       7,800
    Bases/stations/groups/MSO's:
        STA Oswego--47 MLB Improvements.................       1,450       1,450       1,450       1,450  ..........
        STA Neah Bay--Waterfront Improvements...........       3,000       3,000       3,000       3,000  ..........
        GROUP Cape Disappointment--47 MLB Improv........       1,700       1,700       1,700       1,700  ..........
        Eliminate Excess Training Infrastructure........       2,200       2,200       2,200       2,200  ..........
        Group/Station NOLA..............................  ..........  ..........       4,000       4,000  ..........
        Station Dauphin Island..........................  ..........       3,200  ..........       3,200  ..........
        Construct WPB Maint Facility....................  ..........  ..........  ..........  ..........       3,100
        Modernize CG Station Shinne-  cock..............  ..........  ..........  ..........  ..........       3,500
        Relocate MSO/Station Cleveland Hbr..............  ..........  ..........  ..........  ..........       1,000
        87' Shore Improvements..........................  ..........  ..........  ..........  ..........       2,800
        Waterways/ATON Projects.........................       5,000       5,000       4,073       4,073       5,000
        Capitalizable projects (transfer from OE).......  ..........  ..........       8,000       8,000  ..........
                                                         -----------------------------------------------------------
            Subtotal shore..............................      53,650      43,250      44,923      54,823      55,800

                          PERSONNEL

    Direct Personnel Costs..............................      47,700      47,700      47,700      47,700      51,180
    Core Acquisition Costs..............................         750         750         750         750       1,750
                                                         -----------------------------------------------------------
          Subtotal personnel............................      48,450      48,450      48,450      48,450      52,930
                                                         ===========================================================
    Reduction for Asset Sales...........................  ..........  ..........      -2,000  ..........  ..........
    Dewine Amendment--drugs.............................  ..........      37,480  ..........  ..........  ..........
                                                         -----------------------------------------------------------
          Total request.................................     442,773     426,173     389,000     395,465     350,326

    ----------------------------------------------------------------------------------------------------------------
    Note: In addition to the fiscal year 1999 AC&I funds appropriated for multimission capital assets, the Coast
      Guard received $217.4M in AC&I emergency supplemental funds for ``the expansion of drug interdiction
      activities.'' These funds were earmarked for specific vessels, aircraft, and sensors dedicated to drug
      interdiction efforts.

                            five-year budget process
        Question. The Committee has been informed that the Coast Guard is
    developing a five-year budget process to improve long-range planning.
    What is the status of this proposal?
        Answer. The Coast Guard is considering the value of producing a 5-
    year budget similar to what is currently developed to support the
    President's National Drug Control Strategy. Although the Coast Guard
    believes that a 5-year budget would be a useful planning and
    programming tool, the Coast Guard is weighing the benefits against
    considerable additional demands on limited staff resources.
                    chief financial officers act compliance
        Question. The Coast Guard has not received an unqualified opinion
    on its Chief Financial Officers Act audit of its financial statements.
    What actions has the Coast Guard taken to gain compliance and when does
    the Coast Guard expect to achieve compliance?
        Answer. The Coast Guard is on track to achieve an ``unqualified
    opinion'' on the audit of fiscal year 1999 financial statements.
        The Coast Guard is nearly complete with establishing an accurate
    baseline value for its land, buildings, and structures. In partnership
    with the Department of Transportation Inspector General (DOTIG), the
    Coast Guard is resolving several categories of data discrepancies. We
    expect to have an accurate baseline for real property by the end of May
    1999.
        The Coast Guard has established an accurate baseline for its
    cutters and aircraft. By the end of fiscal year 1999, we will have an
    accurate baseline established for all other categories of property and
    equipment.
        One of our initiatives for facilitating the long-term systemic
    accounting for property is the implementation of an integrated property
    accounting system. This commercial-off-the-shelf-software will
    eliminate the need for multiple, often redundant, property tracking
    systems and will provide for accurate asset accounting, from
    acquisition to disposal. This system is in the beta test stage of
    development and will be deployed beginning in the 4th quarter of this
    fiscal year. Full deployment should be achieved by the end of fiscal
    year 2000.
        In partnership with the DOTIG, the Coast Guard is reviewing its
    internal accounting policies and procedures to ensure expenses and
    year-end obligations are properly recorded. We expect to have
    deficiencies resolved by the end of this fiscal year.
                 chief financial officers act budgetary impact
        Question. What effect, if any, has noncompliance had on the Coast
    Guard's fiscal year 2000 budget request?
        Answer. The Chief Financial Officers (CFO) Act has had no impact on
    the Coast Guard's fiscal year 2000 budget request. The Coast Guard has
    placed, and will continue to place, high priority on achieving an
    unqualified opinion in the fiscal year 1999 CFO Act audit.
              challenges in drug interdiction performance measures
        Question. What difficulties has the Coast Guard identified in
    developing outcomes, performance goals, and performance measures for
    its counterdrug activities?
        Answer. The National Drug Control Strategy (NDCS), and the
    associated Performance Measures of Effectiveness (PME), establish the
    national policy requirements for drug interdiction and quantifiable
    performance targets. The Coast Guard's drug interdiction performance
    goal and performance targets are designed to achieve the mandates of
    the NDCS. The Coast Guard's goal is to reduce the flow of illegal drugs
    into the United States by denying maritime smuggling routes. The Coast
    Guard uses two measures to assess progress toward this goal:
      --The proportion of cocaine removed via noncommercial maritime routes
            in transit to the United States, as measured against
            interagency flow estimates; and
      --The smuggler success rate.
        The first measure is directly linked with the PME requirements and
    impact targets for Goal 4 of the NDCS. The second was developed by the
    Coast Guard to account for not only drug removals enroute to the U.S.,
    but also the deterrent effect created by the Coast Guard's interdiction
    presence in the Transit Zone. Two primary challenges, the accuracy of
    cocaine flow estimates and the quantification of the deterrent effect,
    are related to performance data.
        Since smuggling is an illegal activity, cocaine flow is difficult
    to ascertain accurately. As part of the NDCS PME system, the Office of
    National Drug Control Policy (ONDCP) is working within the interagency
    framework to improve flow estimates. The Interagency Assessment of
    Cocaine Movement (IACM) Model is operational and continues to be
    refined.
        A study of deterrence is being pursued by ONDCP, the Coast Guard,
    and the Customs Service to further establish the relationship between
    law enforcement presence and deterrence. This effort will help better
    define performance measurement in this area.
                       five-year drug budget initiatives
        Question. How much funding is needed over the next 5 years to
    achieve the Coast Guard's drug interdiction goals?
        Answer. The Coast Guard's current drug law enforcement plan
    requires increased drug interdiction capability in three key areas:
      --Increased surface end-game capability--This is the ability to
            intercept and stop suspect vessels allowing for arrests to be
            made and contraband to be seized.
      --Increased airborne capability--This is the ability to carry out
            surveillance in high-threat areas, detect and track suspects,
            and support surface end game interdiction efforts.
      --Enhanced effectiveness of current assets/forces--This is the
            ability to increase the capability of current forces with
            technology, intelligence, and logistics support.
        The fiscal year 2000 budget request includes $46 million for the
    initial operation and maintenance of the drug interdiction capital
    assets provided for in the fiscal year 1999 emergency supplemental
    appropriations. This funding will be used to increase capability in the
    three key areas identified above.
        Resource requirements beyond fiscal year 2000 will be detailed in
    future year budget requests. Actual outyear resource requirements will
    depend upon the many variables that affect maritime interdiction
    operations. These variables include: the evolving threats (smuggling
    routes, smuggling modes, smuggling technologies); the level of
    Department of Defense and interagency participation in counterdrug
    activities; the effects of increased international cooperation; the
    value of ongoing engagement efforts with transit and source nations;
    potential efficiencies gained from new technology; and the long-term
    success of the strategy as currently developed.
        funding required for fiscal year 1999 emergency appropriations
                                  initiatives
        Question. How much funding is required to sustain new drug
    interdiction operations and assets the Coast Guard is deploying as a
    result of the fiscal year 1999 emergency appropriations?
        Answer. The President's fiscal year 2000 budget request includes
    $46 million for the initial operation and maintenance of counterdrug
    capital assets funded in the fiscal year 1999 emergency appropriations.
    This amount will need to be annualized in fiscal year 2001.
                    hu-25 re-engine proof of concept project
        Question. The committee understands that the Coast Guard is about
    to initiate a program to re-engine its HU-25 Falcon fleet, including
    aircraft currently in storage, using $15 million of the fiscal year
    1999 emergency supplemental funds. Please provide for the record a
    description of the program, schedule, and funding profile.
        Answer. This project will determine if re-engining the HU-25 Falcon
    with new commercially available engines reduces HU-25 operating costs
    while increasing performance and availability. The project scope
    entails engine replacement on a maximum of three HU-25s. The collected
    data will determine if the best interests of the Coast Guard are served
    by re-engining the entire HU-25 fleet.
        The project will be evaluated using two metrics employed during
    flight testing of the prototype aircraft. The first metric verifies
    aircraft performance, identifying any actual increases or decreases in
    range and endurance. Secondly, measures of engine reliability and
    aircraft availability will be gathered as modified aircraft return to
    operational status.
        This project is a key element of the Aviation Near-Term Support
    Strategy, which identified the requirements needed to extend the
    capability of the Coast Guard's current aircraft fleet for the
    remainder of their usable service lives, or until a Deepwater
    replacement system becomes operational.

                      PROPOSED SCHEDULE AND FUNDING PROFILE
    ------------------------------------------------------------------------
                   Key events                   Fiscal year        Total
    ------------------------------------------------------------------------
    Non-Recurring Engineering and System           1999/2000  \1\ $15,000,00
     Design.................................                               0
    Aircraft Engine Installation and Flight        2001/2002             TBD
     Testing................................
    ------------------------------------------------------------------------
    \1\ Fiscal year 1999 Supplemental.

     fiscal year 2000 budget request for hu-25 re-engine proof of concept
                                    project
        Question. What is the fiscal year 2000 budget request for the HU-25
    re-engine program? Is this amount sufficient to prevent a break in the
    program once it is initiated?
        Answer. There is no fiscal year 2000 budget request for HU-25 re-
    engining. The initial investment of $15 million from the fiscal year
    1999 emergency supplemental appropriation will be sufficient to fund
    the initial non-recurring engineering and system design for a re-
    engining project through fiscal year 2000. Additional funding
    requirements for such a project must still be determined.
               intentions regarding ``power-by-the-hour'' program
        Question. Is it the Coast Guard's intention to support these re-
    engined aircraft with a ``power-by-the-hour'' program? If so, please
    describe the program properties.
        Answer. The Coast Guard intends to evaluate the costs and benefits
    of a ``power-by-the-hour'' (PBTH) program. In a PBTH agreement, the
    vendor assumes responsibility for future overhaul and repair (excluding
    line maintenance and consumables) at a fixed rate based on engine hours
    in service, hence ``power-by-the-hour.'' Under this arrangement, the
    vendor must absorb any excess costs incurred over the fixed rate. Under
    the PBTH agreement, the Coast Guard is assured of an accurate cost
    projection and will avoid the costs associated with unscheduled
    maintenance actions. This arrangement also provides significant
    incentives for the vendor to reduce their costs by increasing engine
    reliability. PBTH has proven to be enormously successful with the
    Allied-Signal LTS101 (HH-65 engine).
               research to reduce aids to navigation maintenance
        Question. Has the Coast Guard conducted any research to reduce
    maintenance on Federal aids to navigation?
        Answer. Yes. Past Coast Guard research has resulted in reduced
    maintenance requirements on Federal aids to navigation. For example,
    improved coating systems have removed the requirement for the servicing
    unit to paint the buoy on-station between the 6-year overhaul cycle,
    and smaller foam and plastic buoys now used in protected waters do not
    require maintenance of the buoy body itself over its service life. In
    addition, improved color films have more than doubled the service life
    of the previously used fluorescent film. Primary batteries have been
    replaced with a solar-powered system eliminating potential
    environmental hazards. The development of improved optics in
    combination with solar power has also enabled the Coast Guard to remove
    diesel powered generators from most remote lighthouses, reducing
    scheduled servicing visits from quarterly to annual, in addition to
    removing the possibility of environmental damage due to fuel spills or
    tank leaks.
        The Coast Guard continues to conduct research to determine the most
    cost effective means to conduct the aids to navigation mission.
                      administrative and support functions
        Question. The General Accounting Office (GAO) recently issued a
    report after reviewing eight Coast Guard administrative and support
    functions to identify potential cost savings. The GAO found that seven
    of the eight functions might be able to achieve cost savings. What
    actions has the Coast Guard taken in each of these areas to reduce
    costs? What additional actions is the Coast Guard considering taking in
    the future to reduce costs?
        Answer. Coast Guard action on the seven areas identified by GAO for
    potential cost savings are as follows:
        1. Shipbuilding and repair.--The number of overhead workers at the
    Coast Guard Yard has been reduced by 19.3 percent since 1994. In 1994,
    the cost of one overhead worker was borne by three waterfront
    producers; today, the cost of one overhead worker is spread over 3.5
    producers. The Coast Guard Yard is narrowing the gap with private
    sector yards and compares very well with other medium size shipyards
    (Coast Guard Yard labor rate is $45.99 per hour; commercial yard rates
    range from $35.67 to $47.30 per hour; the U.S. Navy rate at Pearl
    Harbor is $110 per hour). The Coast Guard Yard is currently pursuing
    work from other government agencies to maintain an optimum production
    work force to overhead worker ratio.
        2. Permanent change of station.--The Coast Guard has taken
    aggressive action to reduce permanent change of station (PCS) costs. A
    1995 Department of Transportation Inspector General (DOTIG) report
    concluded, ``USCG efforts to extend the tours of duty have been
    effective. Since our prior survey in 1990, the Coast Guard increased
    the average standard officer tour length by 8 percent. Also, during
    this same time period, tour completion rates for enlisted personnel
    increased from 40 percent to over 80 percent.'' Since then, the Coast
    Guard has also authorized 2-year tour length extensions, eliminated
    some non-rated personnel transfers, and increased certain specialty
    tour lengths. It is important to note that approximately 28 percent of
    PCS funds are used for non-discretionary transfers (retirements,
    separations, schools, and recruit graduates) required by law. Another
    24 percent of PCS funds are used to replace these members. Also,
    arduous duty, command, or liaison assignments and their replacements
    drive 25 percent of assignments. Therefore, only about 23 percent of
    PCS assignments are truly discretionary. The Coast Guard continues to
    identify efficiencies in PCS expenditures.
        3. Payment of bills and payroll.--Comparisons between Finance
    Center processing of transactions and other processing centers have
    shown the Finance Center to be efficient. The Coast Guard is currently
    revamping its military personnel and payroll system, which is expected
    to reduce the need for administrative personnel. In fiscal year 1999,
    the Coast Guard saved 115 positions due to the implementation of
    Personnel Management Information/Joint Uniform Military Pay System
    (PMIS/JUMPS) II. These savings have been returned to the taxpayer as
    savings shown in the Coast Guard's fiscal year 1999 budget, with total
    system savings in excess of $6 million per year.
        4. Cutter and aircraft spare parts inventories.--The Coast Guard's
    aviation and cutter supply and engineering software ensures that the
    correct parts are available when needed and, where possible, reduces
    inventory levels of parts that are not needed. The existing Aviation
    Logistics Management Information System and the Fleet Logistics System,
    currently in development, will allow further reductions by integrating
    parts availability information with maintenance tracking.
        5. Training.--The $345 million for training identified by GAO
    greatly exceeds the $65 million value for training and education in the
    Program, Project, and Activities (PPA) section of the congressional
    stage budget. The $345 million includes not only operating and
    maintenance costs to manage the training centers, but also the salaries
    and other benefits associated with training.
        6. Collection of administrative civil penalties.--As discussed by
    the GAO, the Coast Guard initiated a ticketing program in 1995 for
    pollution violations. The Coast Guard is considering expanding this
    program into a ``universal'' ticket for use in instances where there
    are violations of other regulations or statutes that the Coast Guard
    enforces. A regulatory project is underway. The Coast Guard completed a
    study on its Hearing Officer program and found that due to the
    decreased workload for the Hearing Offices and the Coast Guard's need
    to reduce costs, the program consolidated its three offices into one
    primary office and one satellite office. The primary office is located
    in Ballston, Virginia, and the satellite office is in Alameda,
    California. The New Orleans office will be closed in the summer of
    1999, and the Boston office will close during the summer of 2000.
        7. Health Care.--The Coast Guard is currently establishing a
    Headquarters office that will more closely monitor clinics' health care
    expenditures and identify opportunities to optimize the use of Coast
    Guard health care resources.
            relocation of air facility glenview, il to muskegon, mi
        Question. Is the Coast Guard still satisfied with its decision to
    relocate the air facility at Glenview, IL to Muskegon, MI?
        Answer. Although the Coast Guard firmly believes that an air
    facility on Southern Lake Michigan is operationally redundant, if
    directed to continue operation of one air facility on the lake,
    Muskegon continues to be the best location from both a budgetary and
    operational perspective.
               activities field organization streamlining effort
        Question. What is the status of the effort to streamline field
    organizations by developing and evaluating prototype field
    organizations at Baltimore, Corpus Christi, San Diego, and New York?
    What are the potential savings and impact on operations of these
    prototype organizations?
        Answer. Of the four prototyped field organizations, three remain
    operational and there are currently no plans to change their
    organizational structures. The fourth prototyped activities
    organization at the Corpus Christi location was disestablished because
    the geographical distance separating the Marine Safety Office and the
    Group/Air Station commands minimized the benefit that activities
    commands were designed to achieve.
        The lessons learned from this particular command and other
    prototyped integrated organizations were evaluated this past year. The
    major findings were: (1) the activities prototypes and similar
    integrated command structures evaluated are effective in carrying out
    their Coast Guard missions, including cross-programmatic coordination;
    and (2) effectiveness, multimission capability, unit/program
    coordination, and one-stop shopping for customers were enhanced at
    operating units where one or more of the following four core
    characteristics were present, regardless of the command structure:
      --Presence of an integrated command center within a specific area of
            responsibility (AOR);
      --Presence of a single resource broker of assets at the field unit
            commander level with the authority and ability to task all
            operational assets (boats, cutters, aircraft, and personnel)
            within a specific AOR;
      --Collocation of field unit command and control structures in a
            specific AOR; and
      --Presence of an integrated operations concept where group, port, and
            air operations staff entities work side by side within a common
            space or building.
        Savings were not the primary reason behind the decision to create
    activities commands. Improved coordination and effectiveness between
    different operational commands within a specific area of operations and
    the provision of ``one-stop shopping'' for Coast Guard customers in the
    port were the key drivers behind testing the activities concept.
                       excess coast guard infrastructure
        Question. Has the Coast Guard identified excess infrastructure?
    What excess properties were sold and what was the amount raised?
        Answer. Yes. Those properties which have been identified as excess
    to the Coast Guard's needs have either been reported excess to the
    General Services Administration (GSA) or a notice of intention to
    relinquish has been sent to the Department of Interior.
        The following is a list of excess properties that were sold and the
    amount raised:

    ------------------------------------------------------------------------
                                            Fiscal
                 Description                 year     State    Amount raised
                                            credit
    ------------------------------------------------------------------------
    LITTLE WOODS HOUSING.................     1997       LA       $1,132,600
    SECOND DISTRICT FLAG QUARTERS........     1997       MO          192,000
    ELIZABETH CITY CLEAR ZONE............     1997        NC          49,000
                                                             ---------------
          TOTAL..........................  .......  ........       1,373,600
                                                             ===============
    COINJOCK HOUSING.....................     1998        NC          83,600
    OWENSBORO MOORINGS...................     1998       KY          168,400
    REDMOND HOUSING......................     1998       WA        1,691,900
    OLD GREENVILLE DET/LAND/BLDG.........     1998       MS           37,400
                                                             ---------------
          TOTAL..........................  .......  ........       1,981,300
                                                             ===============
    LAMOURE HOUSING......................     1999       ND          208,200
    BAUDETTE HOUSING.....................     1999       MN           26,000
    GWYNN ISLAND HOUSING.................     1999       VA           14,300
                                                             ---------------
          Total..........................  .......  ........         248,500
                                                             ===============
          TOTAL AMOUNT RAISED............  .......  ........      3,603,400
    ------------------------------------------------------------------------
    Note: Dollar amounts indicate actual proceeds received rounded to the
      nearest hundredth dollar. Property credited to the Coast Guard in
      funding year indicated.

        The following is a list of excess properties that may result in a
    public sale by the GSA:

    ------------------------------------------------------------------------
                                            Fiscal
                 Description                 year     State      Estimated
                                            credit               proceeds
    ------------------------------------------------------------------------
    LORSTA DANA HOUSING..................     1999       IN         $152,000
    HYDE PARK HOUSING....................     1999       MA        1,439,000
                                                             ---------------
          ESTIMATED TOTAL................  .......  ........       1,591,000
                                                             ===============
    SO HAVEN LAND/DWELLING...............     2000       MI          105,300
    ESMT MANASQUAN.......................     2000       NJ          160,000
    ESMT PORTSMOUTH......................     2000       NH          411,300
    STA CLAIR FLATS/LAND & IMP...........     2000       MI          377,000
    ANT HURON/LAND/DWELLING..............     2000       OH           83,600
                                                             ---------------
          ESTIMATED TOTAL................  .......  ........       1,137,200
                                                             ===============
          TOTAL ESTIMATED PROCEEDS.......  .......  ........      2,728,200
    ------------------------------------------------------------------------
    Note: Dollar amounts indicate estimated proceeds rounded to the nearest
      hundredth dollar. Property sale may occur in the funding year
      indicated.

            legislation for coast guard base realignment and closure
        Question. Is legislation similar to the Base Closure and
    Realignment Commission necessary to reduce excessive infrastructure?
        Answer. No. Legislation similar to the Base Closure and Realignment
    Commission is not necessary to reduce excessive Coast Guard
    infrastructure. Each year, the Coast Guard reports a number of
    properties as excess infrastructure to the General Services
    Administration for disposal, or as subject of no-cost conveyance
    legislation. Since 1997, the proceeds from the sale of these properties
    results in approximately $1 million annually as revenue.
        Through the effective use of its planning and review process, the
    Coast Guard is able to divest unused or underutilized properties. These
    reviews, combined with existing processes for divestiture, provide
    sufficient means to reduce excessive Coast Guard infrastructure.
                      excess capacity at training centers
        Question. A study conducted in 1995 concluded that the Coast Guard
    should close the training center at Petaluma, California, as part of
    its streamlining effort. Does the Coast Guard still contend that it has
    excess training space and need to close one of its facilities?
        Answer. The Coast Guard is currently reviewing its training space
    needs and will issue a report in the near future.
                     savings from closing a training center
        Question. How much would you save in fiscal year 2000 and during
    the next five fiscal years (2000 -2005)?
        Answer. The Coast Guard is currently reviewing its training space
    needs and will issue a report in the near future.
                 alignment of training center petaluma programs
        Question. If this Training Center were closed, how would the Coast
    Guard align its training programs among the other training centers?
        Answer. The training center at Cape May, NJ would remain the
    Recruit Training Center. The training center at Elizabeth City, NC
    would remain the Aviation Technical Training Center, and would receive
    the Health Services and Food Services schools from Training Center
    Petaluma. Reserve Training Center, Yorktown, VA, would receive the
    remaining schools from Training Center Petaluma, including Electronics
    Technician, Telephone Technician, Telecommunications Specialist,
    Yeoman, and Storekeeper schools. This assumes the programmatic
    environmental review now underway identifies no obstacles to expansion
    at Yorktown or to the closure at Petaluma.
                          deepwater funding allocation
        Question. The Coast Guard is requesting $44 million to continue the
    Deepwater project. How will the funds be allocated?
        Answer. The $44.2 million requested for fiscal year 2000 includes:
      --$25.2 million for Deepwater industry teams. Specifically, $8.4
            million will be provided to each of the three industry teams to
            fund Functional Design requirements.
      --$16 million for Deepwater Project technical support. Specifically,
            continuing development and implementation of Modeling and
            Simulation tools; integrating and analyzing industry's
            proposals and the resulting impact on existing Coast Guard
            capabilities and assets; examining proposed surface/air/C\4\ISR
            (command, control, communications, computers, intelligence,
            surveillance, and reconnaissance) assets for environmental
            impacts, conformance with project requirements, and technical
            feasibility; and planning and assessing impacts to the Coast
            Guard logistics and facilities infrastructure.
      --$3 million for project management and administration. Specifically,
            project management and support contractors, travel, preparation
            of the Phase 2 Request for Proposals (RFP), and administrative
            expenses.
                  coast guard response to gao deepwater report
        Question. What additional analysis and justification have been
    prepared to respond to the shortcomings identified in the General
    Accounting Office (GAO) report (GAO/RECD-99-6) of the Coast Guard's
    original formal justification developed depicting the need for
    replacement or modernization of the asset mix characterized as
    deepwater ships and aircraft? Please provide all relevant documentation
    for the record.
        Answer. The Coast Guard has taken aggressive steps to address the
    concerns cited in GAO's report. These actions include:
      --Modification of the Project's contracting strategy to double the
            duration for development of industry's Deepwater concepts.
            While retaining the original final contract award date of
            January 2002, the extended design process provides the Coast
            Guard with more advanced technical concepts and more refined
            cost estimates. In addition, extending design provides the time
            and contractual framework to address GAO's concern about the
            Project's ability to incorporate findings from the Interagency
            Task Force on Coast Guard Roles and Missions.
      --Substantial increase in the amount of information provided to
            industry on the condition and cost of Deepwater legacy assets.
            The Coast Guard developed and provided an exhaustive record of
            the operating and support costs and planned upgrades for all
            Deepwater legacy assets, an extensive report describing viable
            strategies to extend the service life of all legacy aviation
            assets, and a detailed engineering study on the condition and
            estimated remaining service life for the 378 foot high
            endurance class of cutters. In addition, similar engineering
            studies on the condition and estimated service lives of the 270
            foot and 210 foot medium endurance cutter fleets are underway
            and will be provided to industry by the end of May and June
            respectively.
      --Tasked the Project's Independent Analysis Government Contractor
            with performing a cost sensitivity analysis. In addition, the
            Coast Guard intends to task the Deepwater industry teams with
            performing a similar cost sensitivity analysis during
            Functional Design. Among other factors, these cost sensitivity
            analyses will consider the impact of procuring a Deepwater
            system over a longer period of time, which as GAO noted in
            their report, ``ultimately drives up costs because of such
            factors as higher administrative costs and the loss of quantity
            discounts.''
      --Meeting with GAO May 18-19, 1999 to gather firsthand specific
            criticisms, comments, and concerns with the Project's formal
            justification documents--the Mission Analysis Report and
            Mission Needs Statement (MAR/MNS). The Coast Guard's revision/
            revalidation of the MAR/MNS will not commence until findings
            from the Interagency Task Force on Coast Guard Roles and
            Missions are known--currently expected in the fall of 1999.
        Since GAO issued their report in October 1998, the Coast Guard has
    maintained and will continue to maintain an ongoing partnership with
    GAO. The Coast Guard kept GAO apprised of the actions being taken to
    address the concerns in their report and has received very positive
    responses. The Project also briefed and sought GAO's comment on the new
    Deepwater contracting strategy before pursuing implementation.
                        user fees and funding shortfall
        Question. If Congress does not agree to authorize the proposed user
    fee on navigational services, what recommendations would the Coast
    Guard propose to Congress to adjust its fiscal year 2000 budget request
    to account for the funding shortfall?
        Answer. The new budget authority reflected in the President's
    budget request is equal to the funding requirements for the capital
    asset account line items contained in the fiscal year 2000 request. As
    we understand it, no reductions from the general fund will occur unless
    Congress authorizes the proposed user fees.
                        user fees and funding reductions
        Question. Specifically, what Coast Guard programs would you cut to
    make up the shortfall?
        Answer. A final appropriation that contains the level of new budget
    authority contained in the President's fiscal year 2000 request will
    enable the Coast Guard to fully execute the capital asset line items in
    that request.
                               acquisition reform
        Question. Acquisition reform is a government-wide initiative
    intended to integrate greater efficiencies and cost saving measures
    into government procurement practices. What steps is the Coast Guard
    taking to incorporate the lessons learned from the U.S. Navy in
    developing contracting methods that allow multiple ship and multiple
    year best value procurements?
        Answer. The Coast Guard has taken several steps in implementing
    acquisition reform in order to integrate greater efficiencies and cost
    saving measures. There has been a significant increase in the use of
    performance-based specifications, focusing on the missions to be
    performed and allowing contractors to propose how to perform those
    missions. Concurrently, the Coast Guard has increased the use of market
    research to identify what is commercially available and to increase
    reliance on commercial specifications and standards, as opposed to
    imposing government standards on the contractors. The Coast Guard has
    streamlined its best value source selection by making greater use of
    oral presentations, by reducing the number of evaluation factors, and
    by placing considerably higher reliance upon evaluations of
    contractors' past performance. The Coast Guard is also exploring the
    possibilities/advantages of multiple year contracting.
     polar class reliability improvement project use of the private sector
        Question. The Coast Guard has instituted the Reliability
    Improvement Project (RIP) as a long-term plan to upgrade its Polar
    Class Icebreakers. How does the Coast Guard intend to utilize the
    private sector in the RIP?
        Answer. The Reliability Improvement Project (RIP) is a $60 million
    project of which $55 million is presently planned to be spent in the
    private sector for design, equipment purchase, and installation of the
    upgrades to the two Polar Class Icebreakers.
           ports and waterways safety systems (pawss) program status
        Question. In fiscal year 1998, the Coast Guard initiated the Ports
    and Waterways Safety Systems (PAWSS) as a successor to the Vessel
    Traffic Service (VTS) 2000 program. Congress provided $6.6 million in
    fiscal year 1999 for this program, and the Coast Guard is requesting
    $4.5 million in its fiscal year 2000 budget. What is the current status
    of the PAWSS program?
        Answer. The Vessel Traffic Service (VTS) prototype installation at
    Gretna Light near New Orleans, LA was completed in October 1998. The
    system will be moved to the Vessel Traffic Center between July and
    August 1999. Additional surveillance sites with radar and closed-
    circuit television cameras will be installed by November 1999. Initial
    operating capability (IOC) is scheduled for January 2000.
        Through the use of Y2K supplemental funding, the Coast Guard is
    pursuing the first phase of the Valdez, AK VTS replacement. Phase one
    of the Valdez effort addresses Y2K compliance issues. In fiscal year
    2000, the second phase will begin, at which time two aging radars and
    the entire communications infrastructure will be replaced.
            vts new orleans/ports being considered for pawss program
        Question. When will the Vessel Traffic Service (VTS) in New Orleans
    become operational? In addition to New Orleans, what other ports is the
    Coast Guard considering for the PAWSS program?
        Answer. The Coast Guard's Vessel Traffic Service (VTS) in New
    Orleans will be operational with coverage of the Mississippi River from
    Baton Rouge to the Gulf of Mexico using Automatic Identification System
    (AIS) transponders in late 2000. However, three milestones must be
    reached before the VTS can be declared fully operational. First,
    facility construction must be completed and the system's hardware and
    software must be installed, tested, and accepted by the Government.
    This process is on schedule and should be complete in late 1999.
    Second, the complete crew must be on board, trained, and qualified in
    accordance with approved operating procedures. The fiscal year 2000
    budget request identifies nine positions to staff the Vessel Traffic
    Center. These new people will have to be recruited, hired, and trained.
    Pending approval, this process can be complete by October 2000.
    Operational procedures for the new VTS are being written and must be in
    place prior to beginning training of new hires. Because this will be
    the world's first VTS to rely on AIS for information exchange with
    participating vessels, the Coast Guard must pay close attention to
    detail in crafting operating procedures and regulations for
    participation. The third milestone is the implementation of a mandatory
    carriage requirement for AIS transponders. The Coast Guard has the
    least control over the timing of this aspect. It is dependent on
    international standards being complete, dedicated radio frequency
    channels being identified, successful field testing for
    interoperability of the standard, and manufacturers producing shipboard
    systems in sufficient quantities to meet demand. Barring any unforeseen
    delays or disruptions to this process, a carriage requirement could be
    in place for VTS New Orleans in late 2000.
        The number of additional ports that will receive new systems under
    the Coast Guard Ports and Waterways Safety Systems (PAWSS) program is
    not yet known. The Coast Guard is using a systematic risk assessment
    process to evaluate navigation safety conditions in ports and waterways
    to determine if additional risk mitigation measures, such as a PAWSS
    VTS, are necessary. The process relies on input from local waterway
    users to identify risk drivers and evaluate existing mitigation
    measures (i.e., visual traffic schedules, channel depth, buoy layout,
    etc.).
        The Coast Guard will establish a VTS under the PAWSS project only
    where a shoreside oversight/traffic-organizing component is identified
    by the users as a necessary risk mitigation measure and then, ideally,
    only where there is a compelling Federal interest in providing that
    shoreside component. The Coast Guard will begin assessing ports in the
    summer of 1999.
                              agency capital plan
        Question. When did the Coast Guard last update its Agency Capital
    Plan and what is the most current estimate of the Coast Guard's capital
    needs in fiscal year 2001 and 2002?
        Answer. The fiscal year 2000 Agency Capital Plan is not yet
    complete. Capital needs for fiscal years 2001 and 2002 have not yet
    been determined.
            gaps between funding level and agency capital plan needs
        Question. How does the Coast Guard intend to address any gap in
    funding between its probable funding level and the needs identified in
    the Agency Capital Plan?
        Answer. The Coat Guard will prioritize Acquisition, Construction,
    and Improvements (AC&I) needs. Should the final funding level still be
    insufficient to address the needs recommended for funding in the
    President's budget, lower-priority investments will have to be
    deferred.
                  impacts of not increasing ac&i appropriation
        Question. What actions would the Coast Guard propose taking to
    continue operations if the Acquisition, Construction, and Improvements
    (AC&I) account is not increased through 2002?
        Answer. If the AC&I appropriation is not adequate, the Coast
    Guard's ability to continue to provide basic services is placed at
    risk, as legacy systems become unserviceable. Capital funding below the
    budget request also increases the annual cost of operating and
    maintaining existing infrastructure. The increased costs would result
    in reduced service levels, unless the Operating Expenses (OE)
    appropriation was increased to compensate. Adequate AC&I funding is
    critical to the Coast Guard's future readiness.
                           engine leases for aircraft
        Question. Is it possible, feasible, and desirable to obtain
    replacement engines on a pilot lease program? If so, is there any
    statutory impediment to an operating lease program or a lease-to-
    purchase program? If so, please provide suggested language that would
    provide the requisite statutory relief.
        Answer. The Coast Guard can acquire equipment through lease.
    (Federal Acquisition Regulations (FAR) 2.1) The decision to lease or
    buy is made on a case-by-case basis. (FAR 7.401) The desirability of
    leasing engines for Coast Guard aircraft depends on an analysis of the
    benefits of various alternatives, which typically may be affected by
    the period of the lease. If the Coast Guard desires to consider all
    possible alternatives when it is planning to replace equipment, long-
    term leases are problematic. Without special authority, multiyear
    contracts cannot exceed 5 years. (10 U.S.C. 2306b.)
        The following language might be used in a statute to authorize a
    longer-term program for lease of aircraft engines (modeled after an
    Army pilot program for leasing commercial utility cargo vehicles, see
    section 807(c) of Pub. L. 104-106, note to 10 U.S.C. 2401a):
        (1) The Coast Guard may lease aircraft engines in accordance with
    this subsection.
        (2) Under this program--
      --(A) the Coast Guard may trade existing aircraft engines for credit
            against the costs of leasing new replacement engines;
      --(B) the quantities and trade-in value of aircraft engines to be
            traded in shall be subject to negotiation between the Coast
            Guard and the lessors of the new replacement engines;
      --(C) the lease agreement for new engines may be executed with or
            without an option to purchase at the end of the lease period;
            and
      --(D) the lease period for new engines may extend up to the end of
            the projected useable service life of the airframe on which the
            engines will be installed.
                                 hh-65a report
        Question. Last year, the Committee added funding to support the HH-
    65 engine upgrade and requested a report on the need to and
    recommendations for restoring HH-65 power margins while accommodating
    for future growth. What is the status of this report? What are the
    conclusions of this study and what recommendations have been proposed
    for restoring power margins?
        Answer. The report is currently under review in the Administration.
    Until this review is complete, the Coast Guard cannot comment on the
    various conclusions and recommendations contained in the report.
                     hh-65a fadec fiscal year 2000 funding
        Question. What are the Coast Guard's plans for replacing the
    current fuel control on the HH-65 and how much is required in fiscal
    year 2000 to continue the program initiated last year? What is the
    fiscal year 2000 budget request for the HH-65 Full Authority Digital
    Electronic Control (FADEC)?
        Answer. The current fuel control on the HH-65 will be one of the
    engine components replaced during the installation of FADEC technology.
    The Coast Guard received $6 million in fiscal year 1999, enough to
    continue the project until fiscal year 2001. There is no request for
    FADEC funding in fiscal year 2000 because no additional funding is
    required in fiscal year 2000.
                             hh-65a engine upgrade
        Question. Please provide for the record a description of any engine
    upgrade recommended along with an estimated funding profile by year for
    both non-recurring and recurring unit costs.
        Answer. The HH-65 report is currently under review. Until this
    review is complete, the Coast Guard is unable to comment on any
    proposed recommendations.
            hh-65a engine upgrade initiation during fiscal year 2000
        Question. Is it possible to initiate the engine upgrade process by
    integrating available off-the-shelf parts required to restore
    operational power margins with the engines that are returned for depot
    maintenance during fiscal year 2000? If so, how much funding would be
    necessary?
        Answer. The HH-65A report is currently under review in the
    Administration. Until this review is complete, the Coast Guard cannot
    comment on HH-65 engine upgrades. No funding is necessary in fiscal
    year 2000.
     marine transportation system--factors affecting capital needs of ports
        Question. In the next few years, the Congress will face several
    issues related to the marine transportation system. Some of the most
    important issues are financing dredging and shipping channels,
    reviewing whether ports receive adequate funding for intermodal
    connections, and assessing alternatives for maintaining and operating
    the system. The Coast Guard will play a significant role as we
    determine the funding needs of the nation's ports. What are the key
    factors that will likely affect the capital needs of ports over the
    next five years?
        Answer. The key factors that affect the infrastructure and service
    capital needs of ports and their associated waterways are safety,
    security, environment, and economic competitiveness. Economies of
    scale, increases in requirements for trade, and developments in
    technology have led to the use of larger container ships and faster
    vessels. Capital improvements are then necessary at ports to
    accommodate these vessels: they must have sufficient depth and
    configuration of navigational channels and berths, appropriate cargo
    handling gear, sufficient capacity, efficient intermodal connections,
    and more capable systems for cargo and vessel traffic management.
    Beyond these issues, the growth in the size, speed, and amount of
    traffic are increasing the risks posed to safety and the environment.
    Smuggling activities, cargo-related crimes, and terrorism also threaten
    U.S. economic health and personal safety.
           coast guard role in easing constraints on port development
        Question. What is the role of the Coast Guard in easing the
    constraints to port development?
        Answer. The Coast Guard's broad marine safety, security, and
    environmental protection responsibilities directly impact the flow of
    marine transportation, which in turn influences port development. Some
    examples where the Coast Guard is reducing potential constraints to
    port development are by:
      --Working at local levels with government and private sector
            stakeholders to integrate safety, environmental protection, and
            security issues in the early phases of development plans to
            improve effectiveness and avoid unnecessary hindrance of
            development.
      --Implementing new technologies that will directly or indirectly
            foster port development. Examples include the Automatic
            Identification System and Differential Global Positioning
            System.
      --Procuring and operating infrastructure and systems to support
            management of waterways operations, including aids to
            navigation, vessel traffic services, and domestic icebreaking.
      --Streamlining regulatory processes--the Coast Guard and other
            agencies are working together to streamline review processes
            and create one-stop shopping for customers.
             barriers to meeting marine transportation system needs
        Question. What are the barriers the Coast Guard faces in meeting
    the marine transportation needs?
        Answer. The following are the challenges that Marine Transportation
    System (MTS) stakeholders (including the Coast Guard) face as
    identified in MTS Regional Listening Sessions and the National
    Conference on the U.S. Marine Transportation System:
      --Competing use of waterways and increasing demand for landside
            access is a growing challenge to effective management of the
            MTS. Increased vessel traffic, use of larger and higher speed
            vessels, and congestion of waterways impact safe and efficient
            vessel operation.
      --As U.S. waterways become more congested, the need for greater
            management and operational control of vessels and facilities
            increases. Operational awareness of all interrelated MTS
            activities is key to ensuring safe movement of vessels and
            facility cargo operations. To meet this challenge, we are
            exploring integration of systems employing new technology such
            as the Electronic Chart Display and Information System (ECDIS),
            Physical and Oceanographic Real-Time System (PORTS), and
            Automatic Identification System (AIS).
           effects of mega-ships & high-speed vessels on port safety
        Question. How will the development of mega-ships and high-speed
    vessels affect the Coast Guard's responsibilities for ensuring safety
    and environmental protection in and around ports?
        Answer. The development of mega-ships and high-speed vessels will
    not affect the Coast Guard's responsibilities in ensuring safety and
    environmental protection in and around ports. However, the development
    and employment of these high-capacity and high-speed vessels will
    impact the means by which the Coast Guard ensures public safety because
    they present significantly increased levels of risk. The primary
    threats to safety and environmental protection for these vessels arise
    from the increased risk of collision (or allision) and grounding
    associated with limited maneuverability of the mega-ships or reduced
    reaction time for the operators of high-speed craft and vessels
    encountered by high-speed craft. Both great size and high speed lead to
    the potential for increased levels of damage, which in turn can result
    in an increased risk of loss of life and release of pollutants.
    Further, high speed vessels are often ferries which, because of the
    large number of passengers they carry, increases the potential for
    significant loss of life.
        With increased levels of trade and marine recreation, waterways are
    becoming more congested and the risks directly associated with these
    vessels will be compounded. The legal authorities granted to the Coast
    Guard are sufficient to manage these risks. However, new methods and
    tools must be developed to meet the challenges posed by high-speed
    vessels and mega-ships. Regulatory and non-regulatory mitigations to
    these challenges may be attained by:
      --Use of risk assessment (using tools such as Ports and Waterways
            Safety Assessment (PAWSA)) and risk management (risk-based
            decision making);
      --Increased partnerships (e.g., harbor safety committees and the
            Passenger Vessel Association high-speed craft working group)
            and interagency efforts to integrate safety management systems
            to commercial vessel operations;
      --Traffic management tools, such as Regulated Navigation Areas,
            traffic separation schemes, and safety zones surrounding
            operations; and
      --Improved vessel detection, monitoring, and communications systems
            which better enable safe navigation and harness new
            technologies, such as the Automatic Identification System
            (AIS).
                                     ______

                   Questions Submitted by Senator Lautenberg

          operational rationale for decommissioning eleven harbor tugs
        Question. Admiral, your budget asks us to approve the
    decommissioning of eleven harbor tugs. Four of these vessels are either
    in, or adjacent to, the State of New Jersey. I am very reluctant to
    allow the Coast Guard to give up important floating assets, especially
    those that are currently being used on a regular basis. What is the
    operational rationale for decommissioning these vessels?
        Answer. The 11 harbor tugs proposed for decommissioning were found
    to be redundant to the Coast Guard's mission performance needs. The
    availability of other Coast Guard assets to complete most of the harbor
    tugs' mission responsibilities presented an opportunity to capture
    operational savings, while still meeting performance goals in higher
    priority mission areas.
               mission capability of 65-foot harbor tugs (wytls)
        Question. These 65-foot harbor tugs are shallow draft vessels for
    their size, as compared to the other vessels in your inventory. Indeed,
    at some units there are no vessels approaching this size that can enter
    shallow waters. What degradation in mission capability will you
    experience by decommissioning these vessels?
        Answer. Decommissioning the harbor tugs eliminates the Coast
    Guard's capability to break ice in the shallowest water and narrowest
    channels, currently served by the 65-foot harbor tugs (WYTLs), in the
    rare case when ice thickness exceeds 4 inches. Below 4 inches, the 49-
    foot stern-loading buoy boat (BUSL) is capable of breaking ice in these
    constrained waterways. For less restricted channels, buoy tenders and
    the 140-foot icebreaker tugs are fully capable of meeting icebreaking
    requirements. The Coast Guard believes that the harbor tugs'
    operational niche is too narrow to justify their continued operation.
       icebreaking capability with 65-foot harbor tugs (wytls) and other
                              vessels in inventory
        Question. I understand that these vessels, especially in the
    Northeast, are used for icebreaking in shallow waters and around piers
    and other shoreline structures. Do you currently have the capability,
    utilizing other vessels in your inventory, to do this kind of shallow
    water icebreaking?
        Answer. The Coast Guard has no replacement icebreaking capability
    for the shallowest waters and narrowest channels, currently served by
    the 65-foot harbor tugs (WYTLs), in the rare case when ice thickness
    exceeds 4 inches. Buoy tenders, 140-foot icebreaker tugs, and 49-foot
    buoy boats can break ice in all other situations within the harbor
    tugs' operational capability range. Operational commanders have the
    latitude to employ icebreaking assets against the highest priority
    needs, including prevention of accumulation of ice thickness beyond the
    49-foot buoy boats' capability.
              decision to decommission 65-foot harbor tugs (wytls)
        Question. I understand that the proposal to decommission these
    eleven vessels was not in your draft budget and not in the Department
    of Transportation's draft budget, and that it did not surface in your
    budget until it was under review at OMB. Can you explain why the Office
    of Management Budget felt that they should make operational decisions
    regarding the type of vessels you need in your inventory?
        Answer. The decision to decommission the 65-foot harbor tugs
    (WYTLs) was made by the Coast Guard.
                 s/v morning dew and f/v adriatic sar response
        Question. As I mentioned in my opening statement, there were two
    recent marine casualties where Mayday calls were not appropriately
    identified by Coast Guard personnel: the sinking of the sailing vessel
    MORNING DEW, and the loss of the fishing vessel ADRIATIC. In each of
    these casualties, the Coast Guard response was not as targeted or as
    timely as it could have been. Each vessel lost its crew of four, for a
    total of eight fatalities. Admiral, what can you tell us about the
    problems with the Coast Guard response in each of these incidents, and
    what, if anything, distinguishes one from the other?
        Answer. In both of these unfortunate cases, the Coast Guard
    received a garbled, indecipherable radio call and did not respond until
    it was too late to save the crews.
        In the MORNING DEW case, the initial reception was so poor that the
    radio operator did not perceive it as a distress call. Despite Coast
    Guard efforts to contact the transmitter of the garbled message,
    communications were never established. Several hours later when, in
    heavy fog conditions, an inbound ship's lookout reported hearing voices
    in the water, the Coast Guard requested assistance from the nearby
    pilot boat to investigate the report of voices. The pilot boat reported
    negative results from its search. The principles of aggressive
    prosecution and the full use of all available investigative tools were
    not utilized, as a Coast Guard boat or aircraft should have been
    dispatched to investigate. Upon enhancement of the radio call, well
    after the case was closed, MAYDAY could be heard, but the vessel
    position or identification was not given.
        In the ADRIATIC case, the initial reception was so poor that the
    radio operator did not perceive it as a distress call. Despite Coast
    Guard efforts to contact the transmitter of the garbled message,
    communications were never established. Several hours later, a dock
    worker reported that the ADRIATIC was overdue and the voice recorder
    enhancement revealed that the name ADRIATIC had been transmitted. An
    expansive Coast Guard search and rescue mission was immediately
    mobilized; however, no survivors were found.
        Despite the differences in vessel type, the MORNING DEW, a
    recreational vessel and ADRIATIC, a commercial fishing vessel, the
    cases are similar in that they highlight the need for a more modern,
    technologically current communications system. Our existing
    communication system does not have the capability to establish a
    reasonable search area from uncorrelated VHF-FM transmissions. The
    proposed National Distress and Response System acquisition project
    envisions utilizing new technology that would improve coverage, improve
    the quality of reception, provide voice recorder replay, and add
    direction-finding capability which will improve our ability to locate
    mariners in distress quickly.
        lessons learned from s/v morning dew and f/v adriatic incidents
        Question. Please describe the lessons the Coast Guard has learned
    from these two incidents.
        Answer. These two unfortunate casualties highlight three critical
    lessons learned; the need for investment in our National Distress and
    Response System, the need for vigilant aggressiveness in conducting
    Search and Rescue, and the need for proper staffing and training.
        The Coast Guard is working with a distress communications system
    that is equivalent to what local police and fire departments were using
    in the 1950s. The current equipment does not provide information on a
    caller's position or identification. In addition, it does not have the
    capability to enhance and replay audio signals, though efforts are
    underway to procure new voice recorders. Nor does the Coast Guard have
    useful direction finding equipment. The current system requires
    significant reliance on personal judgment and experience to process
    uncorrelated distress broadcasts. The National Distress and Response
    System project would utilize new technology that would improve
    coverage, improve the quality of reception, provide voice recorder
    replay, and add direction-finding capability which will improve our
    ability to locate mariners in distress quickly.
        Coast Guard difficulties in recruiting have caused operational
    experience levels to decline, resulting in personnel with minimal
    experience placed into critical positions. Learning search and rescue
    policy and procedures, geographical characteristics of the area of
    operations, unique mission requirements, and other local agency
    resource capabilities requires significant time invested in training.
    The Coast Guard is experiencing a reduction in the average tour length
    at Groups and Stations, which degrades the ability to train
    watchstanders properly. The search and rescue program strives for
    vigilant aggressiveness in prosecuting distress broadcasts. However,
    achieving vigilant aggressiveness requires an adequately trained work
    force which is achieved through formalized training, on-the-job
    training, and experience. Our average tour lengths at Coast Guard
    Stations have declined from an average of 33 months in 1995 to just 23
    months in 1998. The average experience of our qualified station boat
    crew is only 11.9 months. To continue progress in this area, the Coast
    Guard needs the Committee's full support of the President's budget.
      immediate changes implemented from s/v morning dew and f/v adriatic
                                   incidents
        Question. Please describe the immediate changes you have
    implemented as a result of the lessons learned to address future
    incidents such as these.
        Answer. The immediate changes the Coast Guard has made include:
      --The addition of two billets to Group Charleston, scene of the S/V
            MORNING DEW incident.
      --Began development of a workload and staffing model to define the
            adequate staffing requirements for Coast Guard Groups and
            Stations. The Center for Naval Analyses has been awarded a
            contract to complete the analysis in fiscal year 2000.
      --Continuing the replacement of antiquated voice recorders with new
            voice recorders at Groups. The voice recording equipment
            available to the watchstander during the S/V MORNING DEW
            incident was inadequate.
      --Increasing search and rescue watchstanding vigilance. All personnel
            involved in receiving, evaluating, or directing the response to
            distress broadcasts have reviewed existing policies and
            procedures. The principles of aggressive prosecution and full
            use of available investigative tools are to be used to the
            maximum extent.
      --Publishing the draft Request for Proposal soliciting industry
            comments for the acquisition of the National Distress and
            Response System.
       importance of national distress and response system modernization
                                project (ndrsmp)
        Question. Over the last several years, the Committee has
    appropriated $11.3 million toward the replacement of the National
    Distress System. You are asking for $16 million in this year's budget.
    How critical is the replacement of the National Distress System to your
    improved response to Mayday calls?
        Answer. The National Distress and Response System Modernization
    Project is critical to improving Coast Guard response to distress calls
    received via maritime VHF-FM radio, other calls for assistance, and for
    command and control of Coast Guard assets operating in the coastal
    areas. Funding has allowed the finalization of comprehensive
    operational requirements to better ensure improved distress alerting,
    improved Coast Guard response operations, and improved interoperability
    with other public safety and law enforcement agencies.
        The new capabilities incorporated in this project will resolve
    critical shortcomings of the current system, some of which were
    highlighted by the December 1997 sinking of the sailing vessel MORNING
    DEW near Charleston, South Carolina, and the sinking of the fishing
    vessel ADRIATIC off the coast of New Jersey in 1998.
      capabilities of national distress and response system modernization
                                    project
        Question. Would such a National Distress System have made any
    difference in either of these two vessel casualties?
        Answer. A modernized National Distress and Response System might
    have made a difference in both cases, though the incident
    investigations are not yet complete. In the case of MORNING DEW, Coast
    Guard Group Charleston received a garbled and indecipherable radio
    call. The quality of the call was so poor that the operator did not
    perceive it as a distress call and, despite further efforts to contact
    the vessel, communications could not be established. Only after audio
    enhancement of the radio call was the Coast Guard able to hear the
    words ``MAYDAY, Coast Guard, come in.'' Even if the MAYDAY was heard,
    the Coast Guard search was impeded because no additional information
    was available on the distressed vessel's location or identification.
        In the case of ADRIATIC, a distress call was clearly received by
    Group/Air Station Atlantic City, but with no position or vessel
    information. Further communications could not be established with the
    ADRIATIC.
        As part of the design, the National Distress and Response System
    Modernization Project (NDRSMP) will allow instant playback and/or sound
    enhancement of radio calls, as well as directional information. This
    project will enhance the Coast Guard's ability to mount successful
    rescue operations in circumstances similar to those encountered in the
    cases of the MORNING DEW and the ADRIATIC, where the poor audio quality
    of the distress call, insufficient information, or inability to
    establish communications precluded an effective response.
        problems in responding to mayday calls in recent vessel sinkings
        Question. How soon could we expect the National Distress System to
    be fully implemented if all your funding needs are met?
        Answer. The National Distress and Response System Modernization
    Project (NDRSMP) is currently planned for completion in fiscal year
    2005.
            national fleet concept and potentially new navy missions
        Question. Admiral, you have been in discussions with the Chief of
    Naval Operations, Admiral Johnson, regarding the ``National Fleet''
    concept. I am concerned by press accounts indicating that the expected
    downsizing of the Navy fleet will result in the Coast Guard being asked
    to play a larger role in filling missions at the lower end of the
    threat scale that are now the exclusive responsibility of the Navy. Can
    you please identify for us the missions that are currently being
    conducted exclusively by the Navy that could, eventually, become Coast
    Guard responsibilities?
        Answer. The National Fleet concept does not envision the Coast
    Guard taking on Navy missions. Rather, it involves the two services,
    together comprising the national maritime defense capability of the
    United States, becoming more interoperable, better prepared, and more
    aptly suited to meet all the maritime threats to our national security.
    The National Fleet concept recognizes that there is a full range of
    maritime challenges to our national security: marine pollution; drug,
    alien migrant, and weapons smuggling; mass migrations of aliens;
    pillaging of our marine resources; piracy; natural disasters; collapsed
    states; terrorism; non-state military threats; and war. Many of these
    threats require the Coast Guard to work together with the Navy.
        National Fleet emphasizes interoperability (systems, logistics,
    tactics, doctrine, etc.) of Coast Guard and Navy forces so that they
    can more effectively combine their complementary capabilities. Many of
    the worlds most dynamic and pervasive maritime challenges, such as drug
    trafficking and regional instability, require a combination of Navy and
    Coast Guard capabilities. Successful joint operations include: the
    counterdrug Joint Interagency Task Forces; Arabian Gulf Maritime
    Intercept Operations; the Cuban and Haitian migrant operations of 1994
    through 1995; UPHOLD DEMOCRACY (1994 Haiti incursion); and peacetime
    engagement operations in the Baltic, Mediterranean, and Black Seas.
                        dod funding for the coast guard
        Question. Would you agree that the amount of funding provided by
    the Department of Defense (DOD) for the Coast Guard should grow if your
    national security mission requirements also grow?
        Answer. Yes. In fiscal year 1998 and fiscal year 1999, the Coast
    Guard received $300 million in each year (from Function 054) to fund
    the Coast Guard's National Security missions (i.e. participation in DOD
    exercises, domestic maintenance of aids to navigation on strategic
    waterways, port security for strategic ports, support of Commanders-in-
    Chief operations plans, and maritime border security). This same
    funding was also used to fund the Coast Guard's specific National
    Defense missions (i.e. maritime interception operations, military
    environmental response operations, deployable port operations/security/
    defense, and peacetime engagement). Per GAO report 98-110, titled
    ``U.S. Coast Guard, Use of Defense Funds for National Security,'' the
    Coast Guard expended $726 million in fiscal year 1997 for all National
    Security missions (including drug law enforcement and the subset of
    National Defense missions).
                           hazardous materials safety
        Question. The largest container port in the eastern United States
    is in my state of New Jersey. When hazardous materials are
    inappropriately shipped in containers, they pose a great risk to dock
    workers, truckers, and, potentially, the driving public if there is a
    highway accident resulting in a hazardous material spill. Given the
    millions of containers that enter this country each year, do you
    believe the Coast Guard has adequate resources to really influence
    industry practices when it comes to the shipping of hazardous materials
    by container?
        Answer. The Coast Guard in currently studying this issue. As
    reported in the Federal Register on March 9, 1999, Secretary Slater
    commissioned a One DOT study group on hazardous materials (HAZMAT)
    compliance programs. They have started to collect and analyze data as
    to successes and failures in the program, regardless of the mode of
    transportation. One of their areas of concentration will be an
    examination of resource allocation: does each mode have the number of
    inspectors needed considering the traffic for which it is responsible?
    The One DOT study group expects to publish their results in early 2000.
        Currently, the Coast Guard is relying on targeted sampling and
    force multipliers to best employ our container inspection resources.
    One of the best force multiplier methods the Coast Guard currently uses
    to influence industry, to ensure high-quality inspections, and
    consistent application of standards, is the Coast Guard Container
    Training and Assist Team (CITAT). CITAT is tasked with teaching Coast
    Guard inspectors their duties. They also run an aggressive outreach
    program, where they teach U.S. Customs inspectors, Port Authority
    officials, and other interested parties (including industry) whenever
    possible. CITAT just recently completed training for the Panama Canal
    Commission and have been approached by a Japanese concern in the hopes
    of starting a similar compliance program on the home islands. CITAT is
    a good example of improving HAZMAT compliance through a better
    government/business partnership.
                    hazardous material container inspections
        Question. Admiral Loy, last year the Inspector General pointed out
    that the Coast Guard was doing a very poor job of targeting their
    efforts at inspecting hazardous material containers. What steps have
    you taken to address the Inspector General's findings?
        Answer. The Coast Guard provided an action plan to address the
    weaknesses identified in the Container Inspection Programs (CIP) in its
    response to the Department of Transportation Inspection General's audit
    report on November 21, 1998. All proposed corrective actions noted in
    the action plan will be completed by the end of the third quarter of
    fiscal year 1999. The plan includes the development of a process flow
    chart for targeting procedures (to be distributed to the field by June
    30, 1999), a risk assessment matrix to aid in the selection of the
    highest risk containers for inspection, and revisions to the CIP
    instruction and primary policy document, Commandant Instruction
    (COMDTINST) 16616.11B. The last element, COMDTINST 16616.11B, will be
    delivered to field units prior to June 1, 1999.
                 container inspection program targeting regime
        Question. You recently submitted a report to the Committee on your
    efforts to improve the container inspection program. That report stated
    that you expect to develop a new targeting regime for containers for
    the entire Coast Guard Marine Safety Program, and to have it completed
    by June 30th 1999. Are you, indeed, on schedule with this effort? If
    not, what problems are you encountering in developing a new targeting
    regime?
        Answer. Yes. The project to develop a viable targeting matrix to be
    used by field units to select containers for inspection based upon risk
    is proceeding on schedule. The directive containing the new targeting
    matrix and field guidance is in final legal review; the Coast Guard
    expects to distribute it to the field by the end of June 1999.
                         port state control initiative
        Question. Admiral Loy, this July, we will celebrate the 5th
    anniversary of the Port State Control initiative. The purpose of that
    initiative was to target Coast Guard marine inspection resources on
    substandard ships in order to keep them out of U.S. waters. At this
    point, do you have any hard data showing whether this initiative has
    been successful?
        Answer. Yes. A number of indicators point to the success of the
    Port State Control (PSC) Initiative, including a reduction in the
    number of foreign flagged vessels detained because of their substandard
    condition, and the incorporation of two major international
    requirements into our boarding program: the International Convention on
    Standards of Training, Certification, and Watchkeeping for Seafarers,
    1978, as amended in 1995 (STCW 95); and the International Safety
    Management (ISM) Code. Of the 7,900 foreign flagged ships that arrived
    in the U. S. in 1998, only 373 were detained because of their
    substandard condition, which was a 30 percent decrease from the
    previous year.
        PSC exams had traditionally focused only on the physical condition
    of ships and equipment. STCW 95 and the ISM Code requirements expanded
    PSC boardings to include an examination of the ``human factors'' of
    ship operations. There was considerable fear expressed by the
    international maritime community that many ships would not be able to
    comply with the ISM Code by the July 1, 1998 deadline. However, since
    the deadline only four foreign-flagged vessels that have visited U.S.
    ports have been found in substantial noncompliance with the ISM Code.
                    results of port state control initiative
        Question. Do you have evidence that shippers are now avoiding
    shipping their cargo on substandard ships as a result of this
    initiative?
        Answer. The Coast Guard does not have hard evidence that shippers
    are consciously avoiding substandard ships as a result of the U.S. Port
    State Control (PSC) initiative. However, there are some indications
    that cargo shippers are interested in the physical condition and PSC
    history of a vessel before initiating charters. The Coast Guard's PSC
    Web Site averages nearly 1,000 ``hits'' each month. Charterers are
    demanding that vessels comply with the International Safety Management
    (ISM) Code, and Coast Guard field units routinely check for ISM
    compliance during PSC examinations to ensure that non-compliant ships
    are identified. As a result of the Coast Guard Authorization Act of
    1998, U.S. government shippers are no longer allowed to charter
    substandard vessels. Several international maritime periodicals now
    devote several pages of their papers to vessel detention reports from
    the Tokyo and Paris memoranda of understandings on PSC, and the U.S.
    PSC program. Additionally, the U.S. is not the only country that is
    increasing the scrutiny paid to these vessels, as most of Europe and
    Asia also have very regimented PSC programs. As a result of this
    worldwide effort, there are fewer places that a substandard vessel can
    trade today.
     impact of port state control program on classification societies and
                                  flag states
        Question. Have you seen real evidence that substandard
    classification societies, or substandard flag states, are ``cleaning up
    their act'' as a result of this initiative?
        Answer. Yes. The percentage of substandard vessel detentions that
    are attributable to poor classification society performance has been
    steadily decreasing. With the publication of annual classification
    society Port State Control (PSC) statistics, classification societies
    have carefully tracked their detention rates and have initiated
    substantive remedial measures to enhance their vessel survey
    effectiveness. Overall, the number of vessel detentions has dropped 30
    percent in the last year, which may be attributed to both U.S. Port
    State Control and increased flag state oversight of their international
    vessel fleets.
               elimination of substandard ships from u.s. waters
        Question. Are you now seeing the ``full fruits'' of the Port State
    Control inspection regime? Have we eliminated substandard ships from
    U.S. waters? If not, when do you expect such results?
        Answer. Significant progress has been made toward the elimination
    of substandard foreign-flagged ships from U.S. waters. The Coast
    Guard's Port State Control (PSC) program ensures that all foreign-flag
    tankships, freight ships, and passenger vessels are examined for
    compliance with international conventions and domestic laws for
    pollution prevention, manning, safety equipment and construction. Of
    the 7,900 foreign-flagged ships that arrived in the U.S. in 1998, only
    373 were detained because of their substandard condition, which was a
    30 percent decrease from the previous year.
        There may always be a potential for substandard ships attempting to
    call at U.S. ports, but a concerted effort is made to detect and
    correct all unsafe conditions via comprehensive examinations. All
    foreign-flagged vessels that enter U.S. waters for the first time are
    boarded and examined. Follow-on examinations are conducted thereafter,
    dependent upon risk-based analysis of the vessel as it trades in U.S.
    waters. A history of the vessel's performance is maintained, and
    reports are submitted to the vessel's flag state and the International
    Maritime Organization when a vessel is detained.
        The PSC program is updated regularly to ensure that new U.S. and
    international regulations are enforced, and to improve the foreign
    vessel targeting system to ensure that substandard ships are
    identified. By continuously improving the PSC program, the number of
    deaths, injuries, economic loss, and environmental damage associated
    with marine transportation will be reduced.
                             minimizing oil spills
        Question. On March 24th we celebrated the 10-year anniversary of
    the EXXON VALDEZ spill. The Congress followed up on that incident by
    enacting the Oil Pollution Act of 1990. It established a myriad of new
    regulatory requirements and added hundreds of new billets to the Coast
    Guard for the purposes of oil spill prevention and control. Meanwhile,
    your data show that since 1992, the amount of oil spilled in U.S.
    waters per million gallons shipped continued to rise from 1992 through
    1996. In 1997, the rate finally did drop. Is there a solution to
    minimizing oil spills that we did not address in the Oil Pollution Act
    of 1990?
        Answer. The ``data'' in this question is contained in the Coast
    Guard's fiscal year 2000 Performance Plan. There are two components to
    the data: spill rate and number of spills.
        Spill rates.--Although the data appears to show a rising trend in
    the spill rate (defined as ``gallons spilled per million gallons
    transported'') for the years 1993 through 1996, this data was skewed by
    singular major oil spill cases. In 1994, for example, one spill alone
    (the MORRIS J. BERMAN spill of 750,000 gallons) accounted for 44
    percent of the total spillage for that year. Similarly, in 1996 the
    NORTH CAPE spill (828,000 gallons) accounted for 45 percent of that
    year's spillage. Such single, dominant spills distort the trendline. If
    these single spills are taken out of consideration for their respective
    years, the actual spill rate continues to decline as it has each year
    since the passage of the Oil Pollution Act of 1990 (OPA 90); in fact,
    over the long term there has been a 4-fold reduction in the spill rate
    since the mid-1980s.
        Annual number of spills.--A second potentially misleading statistic
    in the Coast Guard data is the apparent increase in the annual number
    of spills. However, the Coast Guard does not believe that the actual
    number of spills has significantly increased, but rather that the
    reporting levels have increased. OPA 90 has caused operators to report
    even the smallest of spills that previously might have gone unreported.
    The Coast Guard data reveals that an average of 5,400 vessel spills
    have been reported each year since 1992. The median spill size is less
    than 5 gallons; in some years it is only 1 gallon. By comparison, for
    the years 1987-1989 an average of only 2,000 vessel spills were
    reported each year, with a median spill size of 10 to 20 gallons. In
    other words, prior to OPA 90, ``small'' spills were not typically
    reported until they were much larger than the reporting threshold of
    today. Thus, OPA 90 is now providing a more accurate level of spill
    reporting.
        Other solutions to minimizing oil spills.--With respect to the
    question of what else might be done with OPA 90 to further minimize oil
    spills, the Coast Guard is now studying spillage from other, non-tank
    vessels (such as cargo ships).
        Within this category of vessels, the ocean-going cargo ships may
    represent the largest potential spillers, due to their on-board fuel
    oil (bunker) capacity. This situation suggests that the extension of
    other provisions of OPA 90 to non-tank vessels may be in order (such as
    the vessel response plan requirements).
        However, rather than expanding the scope of the OPA 90 as a
    unilateral port state action, quests for solutions should first be
    undertaken in the international arena. The International Maritime
    Organization (IMO) has implemented an important supporting initiative
    with its International Safety Management (ISM) Code. The ISM Code
    addresses the importance of designated persons and various
    responsibilities of the master and maritime company, and requires
    consistent documentation and monitoring of management procedures,
    actions, and practices implemented in accordance with governmental and
    company requirements. Tank ships and passenger vessels have been
    required to comply with the ISM Code since 1998. Cargo ships do not
    have to comply until July 2002. When that provision is implemented, the
    Coast Guard expects that the spillage risk from cargo ships will be
    reduced.
           need for additional legal authority to minimize oil spills
        Question. Is there any tool or legal authority that you wish you
    had for the purpose of minimizing oil spills that you currently do not
    have?
        Answer. No new authorities are necessary at this time for the Coast
    Guard to continue its efforts to minimize oil spills and their impact
    in the marine environment. The expansive changes required by the Oil
    Pollution Act of 1990 (OPA 90) are still being implemented. We have
    seen a significant reduction in the number/quantity of spilled oil
    (particularly by tankships). We need to continue enforcing the OPA 90
    material, operational, planning, and drilling requirements to ensure
    this downward trend continues.
                     lessons learned from new carissa spill
        Question. What have been the lessons learned from the recent spill
    associated with the NEW CARISSA off the coast of Oregon?
        Answer. Lessons learned from the M/V NEW CARISSA incident are being
    collected and documented by the Federal On-Scene Coordinator (FOSC) and
    his staff. They will be included in an On-Scene Commander's (OSC)
    Report per the National Contingency Plan. The Environmental Protection
    Agency (EPA) and Coast Guard Co-Chairs to the Region X Regional
    Response Team directed the FOSC to produce a report. The report is
    still being developed. Copies of the final report will be made
    available.
        The Coast Guard Headquarters staff observed aspects of the response
    that will be captured in the OSC Report. Some of them are:
      --In-situ burning of fuel onboard vessels is a viable option for
            rapidly removing oil in situations that are time-critical and
            when favorable conditions exist, i.e., remoteness from
            population centers, presence of offshore winds, and
            conventional mechanical recovery methods are not feasible.
      --The Special Monitoring of Advance Response Technologies, a draft
            national protocol for monitoring in-situ burn operations, was
            successfully implemented during the spill. The protocol enabled
            government health organizations to address community concerns
            over smoke inhalation. The monitoring determined that there
            were no measurable human health impacts from the smoke.
      --The NEW CARISSA Web pages developed by the Unified Command were
            highly successful in addressing the high demand for information
            both locally and nationally.
      --Despite the expert salvage resources mobilized from the Navy, Coast
            Guard, and industry, even the best-laid plans can succumb to
            the uncertainties of the weather and a severely damaged vessel.
            It is important to have backup plans and resources staged when
            the original plan does not work. The Unified Command did an
            excellent job of this.
      --The Incident Command System proved to be both effective and
            efficient as a spill management system. Plans for using
            advanced response techniques were rapidly approved.
            Mobilization of resources not common to oil spill response--a
            Navy ordnance team, submarine, and destroyer--were rapidly
            acquired, organized, and deployed. The rapid response also
            ensured wildlife rescue organizations were quickly mobilized.
            Although there were impacts, neither mammals nor endangered
            species were lost, including the Snowy Plover. Shoreline impact
            was minimal: local travel publications are reporting that
            impacts to the shoreline are indiscernible.
                      deepwater industry team alternatives
        Question. The Coast Guard is currently funding three different
    industry teams to develop a plan for the Coast Guard's ship and
    aircraft mix for the future. Your justification for the ``Deepwater''
    replacement project emphasizes that the Coast Guard has not preordained
    the types of ships and aircraft they will be purchasing in the future.
    Indeed, you have said that it is possible that you may even be
    extending the life of your current ships rather than replacing them.
        However, recently, in Defense News magazine you stated, and I
    quote, ``Many in the Navy's leadership are delighted by the thought
    process that at the end of the day a Coast Guard security cutter is
    going to be frigate-sized.'' You also said, ``I want to be able to
    augment the Navy's capability with a low-end, frigate-sized kind of
    platform.''
        Are you, indeed, committed to purchasing a frigate-sized cutter, or
    will the three industry teams be allowed to propose other alternatives
    as part of your Deepwater project?
        Answer. The Deepwater industry teams have the flexibility to
    consider a range of alternatives, including renovation of the existing
    378-foot cutter fleet or by introduction of a new class of cutters
    based upon traditional mono-hull or advanced new multi-hull designs. In
    general, the Coast Guard will consider any and all alternatives that
    meet the Coast Guard's mission the performance requirements (which are
    currently being reviewed by the Interagency Task Force on the Roles and
    Missions of the Coast Guard) and achieve the Project's objective of
    maximizing operational effectiveness while minimizing total ownership
    costs.
                deepwater surface ship replacement alternatives
        Question. Have you emphasized to the industry teams that you are
    truly looking for a wide variety of alternatives when it comes to
    replacing your existing surface ships?
        Answer. The Coast Guard will consider any and all alternatives that
    meet the Service's performance requirements and achieve the Deepwater
    Project's objectives of maximizing operational effectiveness while
    minimizing total ownership costs. By focusing on mission capability
    instead of asset capability, the Coast Guard has provided industry with
    substantial flexibility to consider and propose a broad spectrum of
    surface platform alternatives--from renovating existing Coast Guard
    assets to replacement with traditional mono-hull designs to advanced
    new multi-hull concepts.
     coast guard participation in congressional hearings on recruiting and
                                   retention
        Question. Admiral, as you know, there has been a great deal of
    discussion on the part of the Armed Services Committees and the Defense
    Appropriations Subcommittees about the need to provide substantial
    increases for recruitment and retention to the Armed Services--
    increases well above those requested by the Administration. Has the
    Coast Guard been included in these discussions?
        Answer. The Coast Guard regularly consults with the other Armed
    Services on these issues. The problems described by the Department of
    Defense Services are mirrored in the Coast Guard. In every category,
    the Coast Guard faces the same difficulties in recruiting the qualified
    young Americans necessary to adequately meet mission requirements. The
    Coast Guard has not, however, testified before the Armed Services
    Committees concerning recruiting and retention. The Coast Guard
    requests support for the recruiting and retention initiatives proposed
    by the President in the fiscal year 2000 budget.
                   parity in armed forces recruiting programs
        Question. Are you concerned about parity with the other Armed
    Services when it comes to your having an adequate recruitment budget?
        Answer. Yes. Although the Coast Guard has a unique niche among the
    Armed Services, we do compete with the Department of Defense (DOD) and
    the private sector for the steadily decreasing pool of qualified youth
    with a propensity to enlist. All services are facing difficult
    recruiting challenges. The 1997 Youth Attitude Tracking Surveys (YATS)
    showed that the propensity to enlist in the Armed Services is at
    historically low levels and the booming economy is offering many other
    opportunities to potential recruits. For the Coast Guard, recruiting is
    made even more challenging as our name recognition is much lower than
    the other services (7 percent versus 30 percent). Additionally, DOD
    spends significantly more on advertising than does the Coast Guard.
        The President's fiscal year 2000 budget request pursues parity with
    DOD in providing improved enlistment bonuses and a college fund
    incentive.

                             conclusion of hearings

        Senator Shelby. We thank you very much, Admiral.
        Admiral Loy. Mr. Chairman, we thank you, sir.
        Senator Shelby. We will continue to work with you.
        Admiral Loy. Thank you, sir.
        [Whereupon, at 10:55 a.m., Thursday, March 25, the hearings
    were concluded, and the subcommittee was recessed, to reconvene
    subject to the call of the Chair.]

     DEPARTMENT OF TRANSPORTATION AND RELATED AGENCIES APPROPRIATIONS FOR
                                FISCAL YEAR 2000

                                  ----------

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.

        MATERIAL SUBMITTED BY AGENCIES NOT APPEARING FOR FORMAL HEARINGS

        [Clerk's note.--The following agencies of the Department of
    Transportation and independent related agencies did not appear
    before the subcommittee this year. Chairman Shelby requested
    these agencies to submit testimony in support of their fiscal
    year 2000 budget request. Those statements and answers to
    questions submitted by the chairman follow:]

                          DEPARTMENT OF TRANSPORTATION

                             AMTRAK REFORM COUNCIL

                     Questions Submitted by Senator Shelby

                               council membership
        Question. Please provide a membership list of the Amtrak Reform
    Council etc.
        Answer. The information follows:
        Mr. Gil Carmichael, Vice Chairman of the Board, MotivePower
    Industries, Inc., Pittsburgh, PA, 2209 Highway 45N, Suite F, Meridian,
    MS 39301, 601-483-9712--Office, 601-483-9711--Fax.
        Mr. Bruce Chapman, President, Discovery Institute, 1420 Third
    Avenue, Suite 400, Seattle, WA 98101-3099, 206-292-0401--Office, 206-
    682-5320--Fax.
        Mr. Wendell Cox, President, Wendell Cox Consultancy, P.O. Box 841,
    1010 Thornbury Pl., O'Fallon, IL 62269, 618-632-8507--Office, 618-632-
    8538--Fax.
        Mr. Christopher Gleason, President, The Gleason Agency, Inc., 551
    Maine Street, East Johnstown, PA 15901, 814-532-0211--Office, 814-536-
    7266--Fax.
        Mr. S. Lee Kling, Chairman, Kling Rechter & Co., 1401 S. Brentwood
    Blvd, Suite 800, St. Louis, MO 63144, 314-963-2501--Office, 314-968-
    1255--Fax.
        Mr. Clarence V. Monin, President, Brotherhood of Locomotive
    Engineers, 1370 Ontario Street, Cleveland, OH 44113, 216-241-4178--
    Office, 216-241-6516--Fax.
        Mr. John O. Norquist, Mayor of Milwaukee, City Hall, 200 East Wells
    Street, Room 201, Milwaukee, WI 53203, 414-286-2200--Office, 414-286-
    3191--Fax.
        Mr. Rodney E. Slater, Secretary, Department of Transportation, 400
    7th Street, SW, Room 10200, Washington, DC 20590 (Representatives who
    can represent in the Secretary's absence--Mortimer Downey, Deputy
    Secretary and Jolene Molitoris, Federal Rail Administrator), 202-366-
    1111--Office, 202-366-7202--Fax.
        Mr. Donald R. Sweitzer, GTECH, 55 Technology Way, West Greenwich,
    RI 02817, 401-392-7780--Office, 401-392-0279--Fax.
        Mr. Joseph Vranich, 17595 Harvard, Suite C210, Irvine, CA 92614-
    8546, 949-660-4924--Office, 949-660-1835--Fax.
        Mr. Paul Weyrich, President, Free Congress Foundation, 717 Second
    Street, NE, Washington, DC 20002, 202-546-3000--Office, 202-543-5606--
    Fax.
             biographies of amtrak reform council's councilmembers
        Gilbert E. Carmichael (Chairman).--Is a leading international
    authority on railroad and intermodal transportation policy. Appointed
    to the National Transportation Policy Study Commission by President
    Ford during the Energy Crisis, he chaired its subcommittee on advanced
    technology and later served as Federal Railroad Administrator under
    President Bush. Currently, he is the Chairman of the University of
    Denver's Intermodal Transportation Institute. Majority Leader Trent
    Lott appointed him to the Amtrak Reform Council, of which he is the
    Chairman.
        Paul M. Weyrich (Vice Chairman).--Has been a reporter, editor,
    publisher, staff assistant for the Senate Transportation Appropriations
    Subcommittee, and has served on various boards regarding rail issues
    for many years. These include: the Dulles Corridor Transit Citizens
    Advisory Committee and the Dulles International Airport Light Rail Task
    Force, which he chaired. He also served as Member of Board of Directors
    of Amtrak. Currently, he is President and Founder of Free Congress
    Foundation, a public policy think tank. He was appointed to the Amtrak
    Reform Council by Majority Leader Trent Lott and elected Vice Chairman
    by the Council.
        Bruce Chapman--Has had an extensive career in public policy
    development and writing. He has served as a Seattle City Council
    member, Washington State Secretary of State, Director of U.S. Census
    Bureau, Deputy Assistant to President Reagan as Director of White House
    Planning and Evaluation, and U.S. Ambassador to the U.N. organizations
    in Vienna. In 1990, he founded the Seattle-based Discovery Institute, a
    public policy center on national and international affairs. He was
    appointed to the Amtrak Reform Council by House Speaker Newt Gingrich.
        Wendell Cox.--Is a consultant on public transport issues both in
    the U.S. and internationally. He served as member of the Los Angeles
    County Transportation Commission for both highway and public transport.
    Afterwards, he established the Wendell Cox Consultancy, a firm
    specializing in international public policy and demographics. He has
    advised governments in the United States, Canada, New Zealand,
    Australia and Europe on the design of competitive public transport
    service delivery. House Speaker Newt Gingrich appointed him to the
    Amtrak Reform Council.
        Christopher K. Gleason.--Is a financial analyst who is the
    president of a family-owned financial services company and also an
    expert on state and federal transportation issues. He has served on the
    National Motor Carrier Advisory Committee and on the Commercial Space
    Transportation Advisory Committee. He was appointed to the Amtrak
    Advisory Group (the Blue Ribbon Panel) established by the House
    Transportation and Infrastructure Committee. He was appointed to the
    Amtrak Reform Council by former House Speaker Newt Gingrich.
        S. Lee Kling.--Has held an executive position as Chairman of a
    commercial banking company and is a senior partner in a merchant
    banking firm, and has extensive experience serving on government
    commissions. He has served as Finance Chairman of the Democratic
    National Committee and also served as National Treasurer of the Carter-
    Mondale Re-election Committee. President Clinton appointed him as a
    Commissioner on the Defense Base Closure and Realignment Commission. He
    chairs the Missouri Highway and Transportation Commission. Minority
    Leader Richard Gephardt appointed him to the Amtrak Reform Council.
        Clarence V. Monin.--Is a locomotive engineer and labor union
    representative who has had a long career working on issues affecting
    the railroads. He began his career as a trainman, then as an Apprentice
    Engineer and ultimately became a locomotive engineer. He joined the
    Brotherhood of Locomotive Engineers (BLE) and served as a Local
    Chairman in Louisville, Kentucky, then as General Chairman of Kentucky.
    He was elected to the BLE's national organization as Vice President,
    then served as First Vice President. He is currently the International
    President of the BLE. President Bill Clinton appointed him as the labor
    representative for the Amtrak Reform Council.
        John O. Norquist.--Is serving his third term as the mayor of
    Milwaukee, Wisconsin, one of the country's fastest growing cities. He
    is the author of The Wealth of Cities a book on urban design,
    government efficiency and educational issues. He has been an Adjunct
    Professor at University of Wisconsin-Milwaukee School of Architecture
    and Urban Planning. He chaired the National League of Cities Task Force
    on Federal Policy and Family Poverty. He was appointed by President
    Bill Clinton to the Amtrak Reform Council.
        Rodney Slater.--Is the Secretary of Transportation. He formerly
    served as the Administrator of the Federal Highway Administration. In
    Arkansas, he held several positions including membership on the
    Arkansas State Highway Commission, Director of Governmental Relations
    at Arkansas State University, Assistant Attorney General-Litigation
    Division of the Arkansas State Attorney General's Office. He is an Ex
    Officio member of the Amtrak Reform Council who represents the
    interests of the Administration.
        Donald Sweitzer.--Is a public policy consultant with more than
    twenty years of government relations consulting services. He was
    president of the Dorset Resource and Strategy Group, a public affairs
    consulting firm, before joining GTECH as Senior Vice President of
    Government Relations. Senate Minority Leader Tom Daschle appointed him
    to the Amtrak Reform Council.
        Joseph Vranich.--Has worked in the transportation sector for the
    last three decades as both a public relations spokesman and association
    executive. He served as the press spokesman for Amtrak, and as
    Executive Director of National Association of Railroad Passengers. He
    also worked for High Speed Rail Association, first as a consultant,
    then as President/CEO. His writings include the books: ``Supertrains:
    Solutions to America's Transportation Gridlock and Derailed: What Went
    Wrong and What to Do About America's Passenger Trains''. He was
    appointed to the Amtrak Reform Council by Majority Leader Trent Lott.
                                 council staff
        Question. Please provide a staff list of all permanent and part
    time ARC employees, including position title, responsibilities and
    salary. Are any positions vacant at this time?
        Answer. The information follows:
        Thomas A. Till, Executive Director (Senior Level; $125,900). Mr.
    Till is responsible for executive management of the Council's office
    and staff. He represents the Council in its relations with Federal and
    state and local governmental entities, Amtrak, freight railroads, the
    railway labor movement, and other groups and individuals with interests
    in intercity rail passenger service. He manages the meeting schedule
    and agenda of the Council and is responsible for preparation and
    submission of the Council's reports and recommendations as required by
    statute.
        William E. Loftus, Assistant to the Executive Director (Part time,
    temporary appointment; $314 per day WAE). Assists the Executive
    Director in organizing the Council's staff and its work program.
    Responsible for preparation of ARC's financial operating plan, fiscal
    year 2000 budget request, position descriptions for key staff
    personnel, and planning for Council's outreach meetings.
        Kenneth P. Kolson, Senior Attorney-Advisor (GS-15; $91,400). Serves
    as the principal legal advisor and expert to the Council on all legal
    and legislative matters; prepares testimony and statements for
    submission to Congress and other entities and advises the Council on
    legal sufficiency and/or limitations of various recommendations or
    findings that the Council may consider in accordance with its statutory
    mandate.
        Deirdre O'Sullivan, Administrative Specialist (GS-9; $33,650).
    Serves as executive assistant to the director in overall management of
    the office, arranges for Council meetings including presentations by
    representatives of various interest groups; contacts with media
    representatives; preparation of news releases; establishment of data
    bases and production of various official notices, public statements,
    reports and internal control documents.
        Stacy Murphy, Administrative Assistant--Typing (GS-7; $31,176).
    Staff assistant who performs a wide range of clerical, administrative
    and secretarial duties both in direct support of the director and
    senior staff and in contact with all those with whom the Council works.
        Senior Transportation Economist/Financial Analyst (Sr. Level;
    Vacant). Serves as expert economist/financial analyst to the Council in
    its mission to assess Amtrak's financial performance and long term
    self-sufficiency from Federal operating grants. Will provide expert
    financial and corporate expertise in the development of recommendations
    to Amtrak regarding revenue enhancement, cost containment and financial
    management initiatives. Will lead and serve as principal financial
    officer for the Council's program to monitor Amtrak's financial
    performance. Will also advise Council members on the financial impact
    of alternative scenarios they may consider in fulfilling their
    statutory mandate.
        Transportation Industry Analyst (GS14/15; Vacant). Responsible for
    analysis of Amtrak's network operations, train operations budget, route
    structure and services, allocation and use of workforce, and plans and
    programs for the maintenance of both its locomotives and passenger cars
    and its shop facilities, and of its track, signals and communications,
    yards, and passenger stations. Monitors and evaluates Amtrak's
    performance based on its annual budget, operating plan, and strategic
    business plan.
                             senior level positions
        Question. Do ARC senior level staff positions count toward the
    Department of Transportation's Senior Executive Service staff ceiling?
        Answer. ARC does not have direct hiring authority. Therefore, its
    full time and part time employees are employees within the Federal
    System. The Executive Director's position is a senior level position
    within the DOT staff ceiling. Given the critical importance of the
    Council's role in monitoring Amtrak's financial condition, and the
    small full-time staff that the Council has approved (four professional
    and two clerical), the Council has requested one other senior level
    position for an expert financial analyst/economist. It is the Council's
    understanding that the Department will seek from the Office of
    Personnel Management a slot for this second senior level position that
    is outside of the DOT ceiling.
                         consultant hiring restrictions
        Question. Both ARC and the Administration have appealed Congress's
    restriction on hiring of consultants. Please explain why you feel it is
    necessary to remove this restriction.
        Answer. The Council is an independent federal commission
    responsible for: (1) overseeing Amtrak's business activities so that it
    can recommend improvements in operations, productivity, and cost
    containment in order that Amtrak might improve its financial
    performance; (2) monitoring Amtrak's financial performance to determine
    whether it will meet the operating self-sufficiency targets established
    under the Amtrak Reform and Accountability Act; and (3) carrying out
    certain other functions, which include (a) receiving from Amtrak and
    analyzing quarterly reports on productivity improvement, (b) reviewing
    Amtrak's expenditure of funds provided under the Taxpayer Relief Act,
    and (c) filing an annual report with the Congress that includes both
    (i) analyzing cost-savings resulting from work rules established under
    new agreements between Amtrak and its labor unions, and (ii), under
    instructions from the Appropriations Committees, use Amtrak's route
    analysis system to identify routes and services as candidates for
    closure or realignment.
        Amtrak is a government-owned corporation with annual expenses of
    more than $2.6 billion in 1998. As its principal lines of business,
    Amtrak operates a nationwide network of intercity passenger, mail, and
    express services, manages major shops that conduct repair, overhaul,
    and remanufacturing of rail passenger cars and locomotives, maintains
    and rehabilitates the track, electrification, and communications and
    signaling systems of the Northeast Corridor, and operates, under
    contract, commuter services for various metropolitan areas.
        The Council has organized its work program around a small, but
    expert, core staff that will focus its analyses and recommendations on
    three critical areas--Amtrak's financial structure and performance, its
    system-wide passenger operations, and the corporation's management
    organization and supporting services, including the associated
    management and labor workforce involved. To fully accomplish its
    mission, the Council requires expert analysis of complex financial and
    technical factors in order to support its recommended improvements to
    Amtrak's management, and in support of the Council's determination of
    whether Amtrak can indeed achieve a sustainable level of financial
    performance that will permit the Corporation to operate permanently
    without the need for Federal operating grants. In the event of either a
    positive or negative finding, the Council will need to present to
    Congress a comprehensive report based on thorough and objective
    analysis. A small core staff cannot meet all the analytic requirements
    that such a comprehensive finding requires, particularly in the time
    frame envisioned in the Act. We strongly believe that the expert work
    of the staff supported by specific studies and analyses of outside
    technical, financial and legal experts will enable the Council to
    present to the Congress well-reasoned and well-documented
    recommendations in its reports and testimony.
        Removal of this restriction reflects the legitimate needs of a
    Council charged with a broad and complex program of work. We are
    unaware of any other Governmental body with a similar mandate that
    operates under a like restriction.
                              reports to congress
        Question. Section 203(h) of the Amtrak Reform and Accountability
    Act (Public Law 105-134) requires the ARC to provide an annual report
    to Congress that includes an assessment of Amtrak's progress on the
    resolution of productivity issues, or the status of those productivity
    issues and makes recommendations for improvements and for any changes
    in law it believes to be necessary or appropriate. Have you completed
    the ARC's first annual report to Congress? If not, when will it be
    complete? Please supply any correspondence from the ARC to
    Congressional authorizing committees on this requirement.
        Answer. On December 15, 1998, Mr. Paul Weyrich, acting chair of the
    Council, sent a letter to the chairmen of the Senate and House
    authorizing committees concerning the annual reporting requirement that
    the Act placed on the Council. A copy of Mr. Weyrich's letter is
    provided for the record. Mr. Weyrich explained that due to the lengthy
    and difficult startup process for establishing the Council and for
    providing its funding; the resignation of its first chair; and the
    lateness and incompleteness of various reports that the Council was
    charged to review, it would not have been possible for the Council to
    provide a report that would materially add to the dialogue on the
    current and future condition of Amtrak. In addition, Amtrak's newly
    appointed Board of Directors and its new president came into office in
    1998. In October of 1998 the Board approved a revised Strategic
    Business Plan for the corporation. Thus, 1998 was a year dominated by
    organizational matters at both ARC and Amtrak.
        The Council intends to provide to Congress by the time it returns
    in January 2000, a 1999 Annual Report that will include a comprehensive
    review of ARC's activities prior to December of 1999, including--as
    required by the statute--both the Council's analyses and conclusions
    regarding Amtrak's progress on productivity matters under its new labor
    contracts, and its views on any routes or services that Amtrak's route
    analysis data indicate should be closed or realigned. The report will
    also describe any recommendations that the Council made to Amtrak
    during the year, along with pertinent aspects of the Council's other
    activities during 1999.
                            amtrak route performance
        Question. Please describe how you plan to comply with the
    appropriations bill language directing the ARC to expand its statutory
    duties to include the identification of Amtrak routes which are
    candidates for closure or realignment, based on performance ranking
    developed by Amtrak which incorporate information on each route's fully
    allocated costs and ridership on core intercity passenger service, and
    which assume, for purposes of closure or realignment candidate
    identification, that federal subsidies for Amtrak will decline over the
    four-year period from fiscal year 1999 through 2002.
        Answer. Amtrak is in the process of developing its Market Based
    Network Analysis (MBNA) system, which is designed to reflect more
    accurately the market impact on costs and revenues between the various
    types of services in Amtrak's system. The Route Profitability System
    (RPS) that Amtrak has traditionally used for allocating costs and
    revenues to specific services will continue to be used for route and
    service analysis. The MBNA model will add to the analytical base that
    the Appropriations Committee instructed the Council to use in assessing
    Amtrak's network to identify routes or services that are candidates for
    closure or realignment. The Council expects to receive from Amtrak
    during 1999, a full MBNA report on each core route and its ranking in
    terms of fully allocated costs vs. revenue and any other allocation
    factors that are part of the MBNA model. The Council will include the
    results of its assessment in its annual report to Congress.
                                council meetings
        Question. How many Council meeting have been held? Where and when
    were they held, and what discussion items were on the agenda? What
    future meetings are planned? Where and when will they be held, and what
    discussion items are on the agenda? Are the Council's meetings open to
    the public?
        Answer. Beginning with its organizational meeting in May 1998, the
    Amtrak Reform Council has held nine meetings. The five meetings in 1998
    were held in Washington, DC. In 1999, the Council met in Washington,
    DC, on January 19th and March 15th. On April 26, the Council met in
    Philadelphia for a short, early-morning business meeting, followed by
    an all-day regional meeting with representatives of Northeast Corridor
    states and railroad operating entities.
        At its meetings, the Council has heard from Congressional staff,
    GAO, DOT/OIG and from Amtrak on financial and operating matters
    including the Strategic Business Plan, 1998 Financial Report and
    Amtrak's comments regarding reports from the DOT Office of Inspector
    General and Government Accounting Office on its financial condition and
    prospects. The Council found the April 26th meeting with NEC states and
    rail operators extremely useful. ARC gained a comprehensive view of the
    variety of services operated on NEC, the large number of public agency
    stakeholders, the Corridor's complex landlord-tenant relationships and
    operating environment, its active and growing freight operations, and
    the major infrastructure capacity and investment issues that impact on
    intercity, commuter and freight operations.
        The Council has not finalized its meeting schedule for 1999, but it
    intends to conduct more outreach meetings with the states and other
    rail operators in the southeast, midwest, southwest, New England, and
    Pacific regions. ARC will sponsor a seminar in Washington, DC, on May
    18 to focus on both the U.S. intercity rail passenger service
    experience and the developments of the past few years in the rail
    passenger systems of Europe, South America, Australia, and New Zealand.
    At ARC's April 26th meeting, the Council voted to form committees,
    including Financial, Network, Organization/Management, and Labor.
    Additional meetings and seminars are also being planned on issues such
    as financial analysis of Amtrak, labor productivity, the Market-Based
    Network Analysis, and the Corporation's performance targets under its
    strategic business plan.
        All of the Council's business meetings, outreach sessions and
    seminars are open to the public. The Council holds executive sessions
    only when it is dealing with proprietary information from Amtrak or
    confidential personnel issues.
                             budget request amount
        Question. The ARC is requesting $1,300,000 for fiscal year 2000,
    $550,000 more than the administration has forwarded in its request.
    What would the effects be of an appropriation of $750,000, the level
    requested by the Administration?
        Answer. The $750,000 funding level requested by the Administration
    would support the Council's limited staff (four professionals and two
    clerical) and its schedule of meetings, regional and state outreach
    sessions, informational seminars, and associated travel and other
    costs. The $750,000 level would not permit the Council to obtain the
    assistance of non-government experts in such critical areas as
    financial analysis, network and service structure, labor productivity,
    legal review of complex ownership rights, among other important
    subjects of interest to the Council. Each of these areas is critical to
    carrying out a specific mandate of the statute, and several are
    necessary to provide recommendations to Amtrak in the near-term in
    order to assist it in lowering its expenditures and becoming more
    productive and efficient.
        Without access to these experts, on an as needed basis, the Council
    will have difficulty in meeting its primary goal, which is to provide
    Congress with a comprehensive, fully documented, objective review of
    the critical factors affecting Amtrak's long term ability to achieve
    self sufficiency. At the same time, the Council feels strongly that its
    recommendations and findings must be based on a clear understanding of
    their impact on the national rail passenger network, Amtrak as a
    government funded corporation and the transportation service demands of
    the nation.
                        technical support justification
        Question. The ARC's request includes $700,000 for technical support
    and analysis. What are the underlying assumptions you used to develop
    this number? How many hours of contractual expertise will be required,
    at what hourly rate?
        Answer. The funding requested for technical support and analysis is
    based on an estimated average cost of $20,000 per consultant staff-
    month. Thus, the planned funding level of $700.000, (including $125,000
    in fiscal year 1999 carryover funds) would procure approximately 35
    staff-months of professional effort. We are not able to estimate hourly
    rates at this time due to the variance in the expertise sought. We
    anticipate using the funds to support the Council's work in the such
    areas as follows:
      --Route and Service Analysis. Performing route and service analyses
            using planning tools and data from the Market Based Network
            Analysis including a review of MBNA's assumptions and
            allocations, and developing a ranking of routes and services in
            terms of market response, revenue/cost and contribution to the
            national system.
      --Financial Scenario Analysis: Computer-assisted modeling (using
            current data and existing models) to examine varying scenarios
            for structuring and financing Amtrak's assets and operations.
      -- Productivity Analysis: An assessment of the effect of current and
            projected labor agreements and non-contract work force levels
            on operating efficiencies.
      --Non-Federal Funding Review: The current pattern of state and local
            funding for Amtrak is a patchwork quilt dealing with joint
            facility use, cost-sharing, capital investment responsibility
            etc. In some cases these arrangements are beneficial to the
            Corporation, while others may not represent an equitable
            sharing of Amtrak's costs.
      --Asset Analysis: A legal assessment of Amtrak's transferable
            property rights and complex landlord/tenant relationship with
            freight and commuter railroads is an essential component of
            evaluating potential recommendations for improving Amtrak's
            cost structure and financial performance.
                                     ______

                          Letter From Paul M. Weyrich

                                         Amtrak Reform Council,
                                     Washington, DC, December 15, 1998.
    Hon. Richard Gephardt,
    Minority Leader, U.S. House of Representative, Washington, DC.
        Dear Congressman Gephardt: The Amtrak Reform and Accountability Act
    of 1997 (ARAA, Public Law 105-134), which created the Amtrak Reform
    Council, also provides for certain periodic reports by the Council to
    the Congress.\1\ The Council strongly believes that the underlying
    purpose for requiring these reports is to obtain our independent views
    on the specific issues identified by the Congress and their
    implications for the long-term financial viability of Amtrak. Due to a
    number of factors outside the control of the members of the Council,
    meaningful independent commentary on these issues is not possible at
    this time.
    ---------------------------------------------------------------------------
        \1\ These reports are an assessment of (1) Amtrak's progress on the
    resolution of productivity issues; or (2) the status of productivity
    issues, and make recommendations for improvements and for any changes
    in law it believes to be necessary or appropriate. (required by section
    203(h) of the ARAA); the use of amounts received by Amtrak under
    section 977 of the Taxpayer Relief Act of 1997) (required by section
    209(b) of the ARAA); and, identification of Amtrak routes which are
    candidates for closure or realignment * * * (required by Section 349 of
    the Omnibus Consolidated and Emergency Supplemental Appropriations Act
    for Fiscal Year 1999).
    ---------------------------------------------------------------------------
        As the Congress is aware, appointments to the Council were not as
    timely as anticipated in section 203 of the ARAA and we currently have
    one vacancy. In addition, final action on the Council's requested
    budget did not occur until October 21, 1998, and this appropriation
    contained restrictions of the ability of the Council to use
    appropriated funds to hire consultant support. This has necessitated
    that we begin a process to hire the temporary staff necessary to assist
    in processing the substantial information now becoming available.
        Similarly, essential inputs to the Council's deliberations have
    been provided later than anticipated by the ARAA. Specifically, the
    first independent assessment by the U.S. Department of Transportation's
    Inspector General of the financial requirements of Amtrak through
    fiscal year 2002 was not received by the Council until November 24,
    1998. Amtrak's first report to the Council on the expected productivity
    issues involving agreements with organizations representing Amtrak's
    employees was also presented to the Council on November 24. Finally,
    Amtrak's submission of information regarding the use of funds provided
    to it under section 977 of the Taxpayer Relief Act (TRA), is inadequate
    in presenting justification for the capital commitments and hampers a
    reasonable assessment of the merits of Amtrak's investments thus far.
        The Council concluded at our November 24, 1998 meeting that, rather
    than provide Congress with a report that did not materially add to the
    dialogue on the current and future condition of Amtrak, I should inform
    Congress that no report will be forwarded to it for 1998. The Council
    wishes me to emphasize the importance in which each member views his or
    her responsibilities as a member of the Council and their collective
    commitment to providing the Congress with the independent commentary
    the Council is charged with making. Now that the Council is organized,
    moving to hire necessary support staff, and receiving necessary inputs
    from the Inspector General, Amtrak and others, we anticipate to begin
    reporting to the Congress with the quarterly report on Amtrak's use of
    TRA funding for the second quarter of fiscal year 1999 and to provide
    the first annual report at the close of calendar year 1999. We are
    confident that these reports will provide the independent look at
    Amtrak's progress intended by the ARAA and that they will be of value
    to the Congress in its deliberations on issues related to Amtrak.
        If the Council can be of any further assistance in the interim,
    please do not hesitate to contact us.
                Sincerely,
                                               Paul M. Weyrich,
                                                       Acting Chairman.
                                     ______

                        FEDERAL RAILROAD ADMINISTRATION

                     Questions Submitted by Senator Shelby

                      use of raba funds for rail projects
        Question. Please delineate how the monies that are proposed to be
    transferred from the highway trust fund would be allocated among the
    various FRA programs. If those amounts are not transferred, what are
    the implications?
        Answer. The budget contains the following proposed transfers from
    Revenue Aligned Budget Authority (RABA) in the Highway Trust Fund:
      --$15 million for Highway Rail Crossing Hazard Elimination in High-
            Speed Rail Corridors under Section 1103(c) of TEA21 (Section
            104(d)(2) of Title 23)
      --$10 million for Positive Train Control within the Next Generation
            High-Speed Rail Technology program under Section 7201 of TEA21
            (Section 26102 of Title 49)
      --$10.4 million for the Nationwide Differential Global Positioning
            System (NDGPS)
        If these projects are not funded from RABA, the following
    consequences would ensue:
        The grade crossing hazard elimination program for high-speed
    corridors, which provides important safety benefits and addresses a
    major cost factor in implementing high-speed rail based on incremental
    improvements of existing railroads, would be cut to \1/4\ its proposed
    size.
        The progress made on the Michigan and Illinois train control
    projects will be set back at least one year. In particular the Illinois
    project, which also involves industry funding and which represents a
    major effort to develop an interoperable train control system
    applicable across the major railroads, so essential for preventing rail
    collisions in the future, might have to be terminated because of
    industry uncertainty regarding the Federal commitment.
        The NDGPS program, which is a necessary ingredient for widespread
    implementation of positive train control, and which has multiple uses
    in other elements of intelligent transportation systems and other
    economic sectors, would be delayed for at least a year.
                             use of additional ftes
        Question. Please specify exactly how the additional 13 positions
    and 6.5 FTEs that are requested would be allocated among the purposes
    specified on pages 60-61. Why is each of those new positions judged by
    FRA to be of critical importance at this time? Please prioritize the
    requested new positions.
        Answer. The railroad industry is undergoing an unprecedented period
    of dramatic growth. The significant changes require increased
    coordination and scrutiny by FRA to ensure safety and service are not
    deteriorating. In the past, FRA has concentrated on increasing its
    field staffing to meet the expanding needs of the inspection and safety
    enforcement process. It must now strengthen its headquarters staffing
    and expertise to meet its growing workload demands and to ensure policy
    and program implementation are properly coordinated, monitored, and re-
    evaluated.
        New and/or additional staffing and expertise are needed to support
    on-going Safety Assurance and Compliance Program and related audit and
    rulemaking work; to support bridge safety--FRA currently has one bridge
    engineer to oversee 100,000 railroad bridges in the United States; and
    to manage signal and train control and motive, power and equipment
    work, especially as positive train control and new equipment are
    introduced into the railroad system. Staffing also will be used to
    enhance training and other enforcement guidance, to allow greater
    participation in agency or Department-wide initiatives related to
    safety, R&D outreach, grade crossing, transportation security, and
    intermodal projects. Finally, increases will provide the necessary
    support needed to evaluate applications, drafting, negotiating and
    implementing regulatory and legal documents, and other work needed to
    actually implement FRA's new and expanding programs.
        Given the need to address new issues and programs related to
    railroad technology and safety, it is imperative that FRA have the
    flexibility to hire new and different technical experts, and to
    distribute its workload in a more manageable and effective manner.
        Of the positions requested, eight support regulatory and
    enforcement work and five support industry and technology work. Many of
    the positions support all three purposes described in FRA's budget
    justification. All positions are critical as evidenced by FRA's growing
    workload and constant overtime worked by most headquarters' employees.
    FRA needs some relief in its headquarters staffing and the fiscal year
    2000 request provides the minimum number that FRA deems appropriate at
    this time.
                      new positions--field or headquarters
        Question. Will any of the requested new employees be utilized in
    the field to conduct site-specific inspections?
        Answer. None of the requested positions will be used to hire
    additional field employees. All positions will be located in
    headquarters. However, the new positions will have a direct impact on
    safety as they support regulatory and enforcement work and safety-
    related technology. The resulting policy and program changes from this
    on-going work will enhance the safety of all railroads.
                             railroad bridge safety
        Question. In FRA's justification for the additional requested
    employees, you cite the need to support efforts to oversee railroad
    bridge safety. Specifically, additional staff would train track
    inspectors to recognize bridge structural defects and to participate in
    Safety Assurance and Compliance Program audits involving railroad
    bridges. Is it realistic to expect FRA inspectors to be able to
    recognize rail bridge structural defects, given the degree of
    engineering skill required to accurately evaluate bridge structural
    integrity?
        Answer. Identifying obvious bridge defects and accurately
    evaluating bridge structural integrity require different technical
    training demands. However, FRA's bridge inspection training program for
    track inspectors is effective in identifying clear signs of structural
    distress on typical railroad bridges. Where indicated, FRA will request
    additional evaluations by a registered bridge structural engineer. FRA
    is requesting one additional position in fiscal year 2000 to support
    FRA's bridge safety program. Currently, FRA has only one bridge
    engineer to oversee 100,000 railroad bridges in the United States.
                            oa unobligated balances
        Question. Please identify any unobligated balances in the account
    of the Office of the Administrator.
        Answer. The Office of the Administrator account has approximately
    $2 million held in reserve for commitments related to the Alaska
    Railroad Liabilities program and Washington Union Station.
                    chief counsel safety division personnel
        Question. Please prepare a table for each of the last three years
    indicating the number of personnel in the Safety Division of the Office
    of the Chief Counsel.
        Answer. See table below.

    FY 1997.......................................................        27
    FY 1998.......................................................        26
    FY 1999.......................................................        27
                          garrett a. morgan initiative
        Question. What was the scope and nature of FRA's participation in
    the Garrett A. Morgan program during fiscal year 1998? What is planned
    for fiscal year 1999 and fiscal year 2000? Have any funds been used to
    support that initiative? If so, please specify by year the amount
    expended or budgeted.
        Answer. In support of the Garrett A. Morgan program, FRA
    established an education web site to reach K-12 students, educators and
    teachers. FRA reached over forty thousand students and adults in fiscal
    year 1998. The Garrett A. Morgan Program and Operation Lifesaver
    presentations were incorporated into one and presented by Grade-
    Crossing managers and other FRA personnel.
        In fiscal year 1999, FRA plans to continue its support of the
    Garrett A. Morgan program by exceeding last year's goal and reaching an
    additional fifty thousand students. Additionally, FRA plans to add
    railroad curriculum for pre-school through 12th grade to the Garrett A.
    Morgan web site. This curriculum will be informative as well as
    educational. In fiscal year 2000, FRA plans to update existing
    mathematic and science information on the web site, continue to donate
    surplus computer equipment to schools in need, and participate in those
    activities that educate the public about the field of transportation
    and related career opportunities.
                    fra's policy studies and accomplishments
        Question. What are the most important policy studies and
    accomplishments resulting from the work of the Associate Administrator
    for Policy and Program Development in fiscal year 1998, thus far in
    fiscal year 1999, and what is planned for fiscal year 2000?
        Answer. The Office of Policy and Program Development (OPPD) leads
    the Federal Railroad Administration in several areas: rail structural
    analysis (mergers), rail network geographic information systems (GIS),
    rail needs for national defense, and railroad data development. In
    addition, the Office of Policy and Program Development has taken a lead
    role in developing tools to evaluate the cost/benefit of rail projects
    utilizing innovative financing techniques.
        The Office of Policy and Program Development has had the lead
    responsibility for Department of Transportation (DOT) for analyzing
    rail merger proposals for over 10 years. OPPD analyzed and developed
    the Department's written position on the acquisition of Conrail by
    Norfolk Southern (NS) and CSX railroads. DOT's final official position
    on the acquisition was filed with the Surface Transportation Board
    (STB) in February, 1998. During fiscal year 1998 and thus far in fiscal
    year 1999, FRA has been working with all major railroads to assure a
    safe integration of the Conrail's operations into NS and CSX, and to
    minimize disruptions to railroad service, similar to the ones following
    the merger of the Union Pacific with the Southern Pacific. FRA's
    oversight activities of post Conrail operations will continue in fiscal
    year 2000.
        In 1998, the Office of Policy and Program Development led DOT's
    evaluation of the merger between the Canadian National and the Illinois
    Central Railroad. The Office of Policy prepared the Department's
    official position on the CN/IC merger which was filed with the Surface
    Transportation Board (STB). Furthermore, the Office has begun an
    assessment of the issues pertaining to competitive rail access
    throughout the national railroad system.
        Much of the data (traffic, financial, and general economic) that
    will support this as well as other policy analyses is acquired,
    compiled, and funded as explained below.
        The Office of Policy and Program Development created a rail network
    GIS, representing all 150,000 route miles of track in the United States
    railroad system. The GIS is extremely detailed, containing ownership,
    trackage rights, and traffic statistics for each line segment in the
    country. It is updated annually and has been widely distributed to
    other federal agencies, states, MPO's, local jurisdictions, and
    railroads. It has been coupled with a highway GIS from DOT's Federal
    Highway Administration and a waterway GIS from the United States Coast
    Guard to create the initial stages of an intermodal network GIS. During
    fiscal year 1999 and fiscal year 2000, the FRA Rail Network GIS will be
    updated, enhanced, and distributed to the public. Also, hazardous
    materials movements (extracted from the Waybill Sample) will be
    simulated over the Rail Network GIS to be used as an aid by the Office
    of Safety in deploying its inspection fleet.
        The Office of Policy and Program Development, in cooperation with
    the Military Traffic Management Command (MTMC) of the Defense
    Department, reevaluates, on an annual basis, the rail requirements for
    the defense of the United States based on changing rail traffic density
    and defense traffic pattern shifts.
        The Office of Policy and Program Development jointly with the
    Surface Transportation Board (STB) funds the creation of the Rail
    Carload Waybill Sample data base on an annual basis. The Waybill Sample
    data base is the only comprehensive source of rail traffic data that
    includes details for both commodity and routing. As such it functions
    as the official traffic data source for proceedings before the STB,
    including mergers, acquisitions, and abandonments.
        The Office of Policy and Program Development purchases and collects
    rail economic and financial data to support policy analysis of the rail
    industry. Economic data is purchased from Data Resources, Inc. (DRI) to
    track economic trends in the rail industry. Rail financial data is
    compiled into a financial data base to evaluate individual rail
    companies and the industry as a whole. These data are used extensively
    in rail structure analysis such as mergers.
        The Office of Policy and Program Development has funded the
    development of a computerized model (RailDec) to assess the cost/
    benefit of innovatively financed rail projects. It has been made
    available to and is widely used by states, Metropolitan Planning
    Organizations (MPOs), and regional jurisdictions to analyze the worth
    of such projects in their own areas. During fiscal year 1998, the model
    was modified to enhance data on projects directly related to rail/
    highway crossings.
                                 reprogrammings
        Question. Please show any reprogramming or allowable funding
    transfers associated with the Office of Safety, Office of R&D, and the
    Office of the Administrator from the appropriated amounts for fiscal
    year 1997 and fiscal year 1998.
        Answer. FRA did not reprogram or transfer any funds between these
    accounts in fiscal year 1997 or fiscal year 1998.
                                   user fees
        Question. Please delineate exactly which entities and expenses
    would be covered by the user fees, and how the amount to be collected
    was determined.
        Answer. The railroad user fee proposal, included in the fiscal year
    2000 budget request, covers FRA's cost of carrying out FRA's rail
    safety program under 49 U.S.C. Chapter 51 (hazardous materials
    transportation laws), Subtitle V, Part A (which covers other rail
    safety laws), and the safety-related functions of the Research and
    Development program. Not all of these costs were covered in the
    original railroad user fee program but all of them were included in the
    Administration's budget request for fiscal year 1999, since they are
    all directly safety-related. In addition, the proposal eliminates the
    annual reporting requirements of the original railroad user fee
    program.
        To implement these fees, FRA would build upon the existing railroad
    user fee regulations (49 C.F.R. Part 245) that were adopted in 1991 to
    govern the railroad user fee program authorized by the Omnibus Budget
    Reconciliation Act of 1990. Generally, the existing regulations provide
    for allocating the user fee across the railroad industry on the basis
    of train miles and road miles, with an adjustment made for light
    density railroads. Under the previous program, FRA received an annual
    report from each railroad listing its train miles and road miles which
    FRA used to determine each railroad's fee. FRA billed each railroad and
    collections were made by FRA's accounting department. Appropriate
    changes/revisions to these regulations would be made to cover any
    expansion of coverage or newly enacted program.
                  total cost and completion date of it system
        Question. Your request includes $1.46 million hardware/software
    costs and $82,000 in personnel-related costs (2 new positions, 1 FTE)
    for new information technology systems. What will be the outyear costs
    of this multi-year project? How many years will this project take to
    fully implement? Will the 2 new positions still be required after the
    new information technology system is in place? Will the new information
    technology initiative give FRA the ability to manage its grants program
    electronically?
        Answer. FRA's IT vision is based on a review of FRA's current
    systems and problems, and business practices and needs. This review
    began in 1997 and will continue throughout the life of the project. The
    recommended solutions are based on internal reviews, as well as reviews
    conducted by contractors. The overall direction of FRA's IT project is
    consistent with the Clinger-Cohen Act and is supported by the
    Department's Chief Information Officer.
        The projected timetable is as follows:
    Fiscal year 2000
        Stabilize the network infrastructure.
        Upgrade bandwidth to accommodate increased traffic.
        Upgrade WAN port speed and Committed Information Rate.
        Enhance e-mail system.
        Implement monitoring devices.
        Fix failed servers and upgrade other hardware/software.
        Set up web server, with firewall protection.
        Migrate towards an intelligent network infrastructure which will
    broadcast status back to a central monitoring system.
        Develop security systems.
        Develop a disaster recovery program.
        Pilot intranet development.
        Pilot data mart development.
        Initial ATM backbone transition planning.
        Upgrade mobile computer modems.
    Fiscal year 2001
        Intranet deployment.
        Data warehouse implementation.
        ATM backbone detailed transition planning.
        Continue security upgrades.
        Introduce wireless remote access services.
    Fiscal year 2002
        Full deployment of data warehouse.
        Complete ATM backbone implementation.
        Voice, data, video and multimedia integration implementation.
    Fiscal year 2003
        Complete voice, video, multimedia integration and tuning across the
    ATM backbone.
        Funding for outyears is to be determined. The two requested
    positions will be needed even after the IT project is completed to
    continue data base management and to support FRA's Intranet WEB
    applications. The IT system will allow all offices the capability to
    manage their work electronically.
                         fiscal year 1999-2000 staffing
        Question. Under FRA's proposed new account structure, 20 additional
    FTES are requested for fiscal year 2000, from 733.5 to 753.5. Please
    break out the entire FTE request using the current office structure,
    showing (and distinguishing between) the current onboard and the
    additional FTE distribution.
        Answer.

    ------------------------------------------------------------------------
                                                           Fiscal year
                                                   -------------------------
                        Office                         1999         2000
                                                      Enacted     Requested
                                                       FTEs         FTEs
    ------------------------------------------------------------------------
    Office of the Administrator...................       152           156
    Office of Safety..............................       558       \1\ 573
    Office of Research and Development............        18.5      \2\ 19
    Admin for High-Speed Rail.....................         5             5.5
                                                   -------------------------
          Total, FRA..............................       733.5         753.5
    ------------------------------------------------------------------------
    \1\ Includes 12 annualized FTEs for the 24 inspectors authorized in
      fiscal year 1999.
    \2\ Includes .5 annualized FTE for one position authorized in fiscal
      year 1999.

                               operation respond
        Question. What are the costs, benefits, and current status of FRA's
    involvement in the Operation Respond project? Please specify fiscal
    year 1997, fiscal year 1998, and fiscal year 1999 funding amounts, and
    the fiscal year 2000 request. What is the total amount of the fiscal
    year 2000 DOT request for Operation Respond, including requests from
    other agencies?
        Answer. In summary, the benefits of Operation Respond (OR) is the
    potential to save life resulting from incidents/accidents involving
    hazardous material or rail passenger operations. OR is designed to
    improve information available to First Responders at the site of these
    incidents/accidents through the use of its software system, Operation
    Respond Emergency Information System (OREIS).
        Funding will be used to continue and enhance the research and
    development of the OREIS. Efforts will concentrate on adding Non-Class
    I railroads into OREIS. Non-Class I carriers, with a significant amount
    of hazardous materials traffic, will be identified and contacted first.
    Operation Respond and the FRA will work cooperatively with these
    carriers and their employees to introduce and install OREIS or their
    respective systems. While Non-Class I carriers typically handle a wide
    variety of hazardous materials, they often do not possess the kinds of
    centralized computer capabilities, or direct interface with shipper
    location message systems, that would enable the timely and/or accurate
    notification of emergencies.
        In addition to the further expansion of Operation Respond to Non-
    Class I carriers, Operation Respond has a vital role in the
    dissemination of emergency information regarding commuter railroads. As
    part of its safety mandate, FRA will continue to develop and/or revise
    rules and guidance regarding rail passenger equipment and standards.
    One component element of the OREIS system comprises documentation
    concerning passenger train schematics, including the identification of
    emergency windows, on-board safety equipment, and electrical systems.
    Operation Respond provides a mechanism to convey this critical and time
    sensitive information to first responders, i.e., fire, police, and
    medical personnel. The availability of this information to emergency
    personnel can dramatically impact life-saving operations not only for
    passengers but, also, for the citizens of nearby communities and for
    environmental considerations.
        Funding:
        Fiscal Year 1997.--FRA $153,000. FHWA $1 million earmarked by
    Congress.
        Fiscal Year 1998.--FRA $103,000. FHWA $1 million earmarked by
    Congress.
        Fiscal Year 1999.--FRA $103,000.
        Fiscal year 2000.--FRA $104,000.
                             safety-related travel
        Question. On page 62 of the budget justification, you state that an
    increase of $500,000 is requested for safety-related travel. How much
    of the total $7,147,000 for travel is safety-related?
        Answer. In fiscal year 1999, FRA's total travel is $6.528 million.
    FRA is requesting a total of $7.147 million in fiscal year 2000, an
    increase of $619 thousand.
        The increase of $619 thousand includes $500 thousand for safety-
    related travel, specifically travel supporting the Safety and Assurance
    & Compliance Program and Railroad Safety Advisory Committee's work; $54
    thousand related to the new 15 positions; and $65 thousand to cover
    inflation costs. Of the total amount requested for travel, $6.673
    million is directly related to the Office of Safety. Some of the funds
    remaining are also in support of safety-related initiatives and include
    travel by R&D and NGHSR staffs, Chief Counsel's safety division staff,
    policy staff, and the Administrator, and Deputy Administrator.
                     increases in administrative activities
        Question. Please justify the requested increases in each of the
    following administrative activities: Rent; Communications; Advisory and
    Assistance services; TASC; and Equipment (additionally, how much of the
    request for equipment is related to the information technology
    initiative?)
        Answer. For presentation purposes, the fiscal year 1999 costs
    reflected under the Safety and Operations account included only the
    former Office of the Administrator account and the Office of Safety.
    Administrative costs related to Research and Development and Next
    Generation High-Speed Rail were not included. The following table
    reflects the true comparable crosswalk between FRA's fiscal year 1999
    and fiscal year 2000 costs for the items listed:

    ------------------------------------------------------------------------
                                                 Fiscal year
                                           ----------------------
                     Item                      1999       2000    Difference
                                              Total      Total
                                             funding    funding
    ------------------------------------------------------------------------
    Rent..................................     $3,084     $3,302    \1\ $218
    Communications........................        725        848     \2\ 123
    Advisory & Assistance Services........        235        516     \3\ 281
    TASC..................................      2,357      2,613     \4\ 256
    Equipment.............................      1,227      2,686   \5\ 1,459
    ------------------------------------------------------------------------
    \1\ Reflects an increase of $173 thousand due to inflation and
      colocation/lease expirations and $45 thousand related to the housing
      of the new 15 positions.
    \2\ Reflects non-discretionary increases related to inflation and vendor
      increases for information technology support ($121K) and to the new
      FRA-wide IT initiative ($2K).
    \3\ Increase includes inflation costs ($1K) and the new FRA-wide IT
      initiative ($280K).
    \4\ Reflects FRA's portion of the Department's total TASC costs. Most of
      the increase is for telecommunications support (computer lines,
      phones, FTS, internet, voice mail, etc.). This is a non-discretionary
      increase as FRA has very little control over these costs.
    \5\ Reflects an increase of $1.096 million for the new FRA-wide IT
      initiative; $83 thousand in support of the 15 new positions; and $280
      thousand for non-discretionary increases related to inflation, vendor
      increases, and increased usage of computer technology.

                                 grant funding
        Question. Please detail the activities for which the funding for
    grants, subsidies and contributions will be spent.
        Answer. In fiscal year 2000, FRA is requesting $600,000 for a grant
    to Operation Lifesaver.
                  fra's video conferencing and imaging system
        Question. What is the status of FRA's video conferencing and
    imaging system? Do these technologies affect the amount requested for
    travel? How much is built into the base budget to operate those
    communications systems?
        Answer. The FRA has a fully implemented video-conferencing system.
    The analysis for an agency-wide imaging system has been completed and
    FRA is in the process of testing and validating its pilot program. Once
    this is completed, the system will be implemented agency-wide.
    Currently, there is $150,000 in FRA's IT base for these two systems.
        FRA's imaging system has no impact on travel but rather on paper
    images and storage. Without the video conferencing system, FRA's travel
    needs would increase.
                     funding for the amtrak reform council
        Question. Please provide the Committee a detailed justification for
    the $750,000 request for the Amtrak Reform Council. What documentation
    supports this request? Is this the requested funding level that FRA
    forwarded to OST and OMB?
        Answer. Funds will support the salaries and expenses of staff,
    travel, supplies and contract support. The Department submitted, as a
    place holder, a request of $500,000 to OMB for the Amtrak Reform
    Council (ARC) because ARC was not yet organized to submit a budget.
        The Department is aware of a subsequent request from ARC for
    funding. Questions related to this request should be forwarded to the
    ARC directly.
                            office of safety funding
        Question. Please prepare a funding table for the Office of Safety
    for fiscal years 1998 through 2000, broken out in the following manner.

    ----------------------------------------------------------------------------------------------------------------
                                                                     Personnel compensation
               Program Activity               Program Costs ($)           benefits ($)        Number of staff (FTEs)
    ----------------------------------------------------------------------------------------------------------------
    Federal Enforcement Program..........  .......................  .......................  Headquarters v.
                                                                                              regional/field
                                                                                              offices.
    Automatic Track Inspection Program...  .......................  .......................  .......................
    Safety Regulation and Program          .......................  .......................  .......................
     Administration.
    ----------------------------------------------------------------------------------------------------------------

        Answer.

                                                                     [Dollars in Thousands]
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Program cost                      PC&B                         FTEs
                                                                     ---------------------------------------------------------------------------------------
                               Activities                                      Fiscal year                    Fiscal year                 Fiscal year
                                                                     ---------------------------------------------------------------------------------------
                                                                        1999      1998       2000      1999      1998      2000      1999     1998     2000
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Federal Enforcement Program.....................................    $8,476   $10,000    ( \1\ )   $32,503   $35,755   ( \1\ )     $456     $468  ( \1\ )
    ATIP............................................................     4,220     2,500    ( \1\ )  ........  ........   ( \1\ )  .......  .......  ( \1\ )
    Safety Regulation and Program Administration....................     4,434     5,180    ( \1\ )     7,417     7,953   ( \1\ )       90       90  ( \1\ )
                                                                     ---------------------------------------------------------------------------------------
          Total, Safety.............................................    17,130    17,780  \2\ 16,91    39,920    43,708    46,940      546      558  \3\ 573
                                                                                                  0
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ Costs will be tracked by function (safety) versus office or geographical location in fiscal year 2000.
    \2\ Includes $3.1 million for the ATIP.
    \3\ Includes approximately 480 FTEs for federal enforcement program and 93 FTEs for safety regulation and program administration.

                     status of hiring 24 safety inspectors
        Question. In fiscal year 1999 the conferees approved the hiring of
    24 additional inspectors. How will those positions be allocated? How
    many have been hired thus far? Where have the new staff been deployed?
        Answer. In fiscal year 1999, FRA received half year funding for 12
    FTEs for 24 safety inspector positions. FRA plans to hire 8 principal
    regional inspectors, 8 regional assistant crossing and trespasser
    managers, and 8 additional inspectors. Recruit actions for all
    positions have been processed. To date 5 applicants have been selected,
    8 positions are at the interview stage, and 11 positions are still
    under review and in panel (applicants are being reviewed and ranked to
    determine HQ list for interviews.
        The 5 positions will be assigned to Kansas City, Missouri, Atlanta,
    Georgia (2), Hurst , Texas, and Seattle, Washington.
                   enforcement actions over last three years
        Question. For each of the last three years, please prepare a table
    describing the number of enforcement actions, the amount of civil
    penalty assessments and those collected or settled, and the number and
    types of violation reports submitted. What percentage of these actions
    have come from federal inspectors and what percentage from state
    inspectors?
        Answer. The tables follow.

    ----------------------------------------------------------------------------------------------------------------
                                                                Cases        Amount         Cases         Amount
                          Fiscal year                          closed       collected    transmitted     assessed
    ----------------------------------------------------------------------------------------------------------------
    1996...................................................         974      $3,589,815          827      $5,157,500
    1997...................................................         972       3,792,380        1,014       7,537,250
    1998...................................................       1,483       5,213,595        1,017       9,945,750
    ----------------------------------------------------------------------------------------------------------------

                       VIOLATION REPORTS SUBMITTED BY TYPE
    ------------------------------------------------------------------------
                       Type \1\                    Federal   State    Total
    ------------------------------------------------------------------------
    Fiscal year 1996:
        AD.......................................       29  .......       29
        BW.......................................       40        1       41
        EP.......................................        3        2        5
        EQ.......................................       18       18
        FCS......................................      187       17      204
        GC.......................................        3  .......        3
        GS.......................................        1  .......        1
        HMT......................................      219       54      273
        HS.......................................      146        2      148
        HSR......................................       76  .......       76
        LI.......................................      173       21      194
        REM......................................        9  .......        9
        ROP......................................       30        2       32
        RSP......................................        9  .......        9
        SA.......................................      212       29      241
        SI.......................................       69        4       73
        TS.......................................       33       22       55
                                                  --------------------------
          Total..................................    1,259      154    1,413
          Percentage.............................       89       11  .......
                                                  ==========================
    Fiscal year 1997:
        AD.......................................       93        1       94
        AR.......................................      126        2      128
        BW.......................................        2  .......        2
        EP.......................................        5  .......        5
        EQ.......................................       27        2       29
        FCS......................................      183       41      224
        GC.......................................       20        4       24
        HMT......................................      275       83      358
        HS.......................................      191       22      213
        HSR......................................      356       14      370
        LI.......................................      329       34      363
        REM......................................       15        1       16
        ROP......................................       22        3       25
        ROR......................................        3        1        4
        RSP......................................       13  .......       13
        RW.......................................        3        1        4
        SA.......................................      293       65      358
        SI.......................................       66        6       72
        TS.......................................       50       16       66
                                                  --------------------------
          Total..................................    2,072      296    2,368
          Total percent..........................     87.5     12.5  .......
                                                  ==========================
    Fiscal year 1998:
        AD.......................................       88        4       92
        AR.......................................      143        2      145
        BW.......................................        1  .......        1
        EQ.......................................       37  .......       37
        FCS......................................      163       15      178
        GC.......................................       44  .......       44
        HMT......................................      345       61      406
        HS.......................................      139        8      147
        HSR......................................      388       66      454
        LI.......................................      327       84      411
        REM......................................        2  .......        2
        ROP......................................       34        4       38
        ROR......................................        5  .......        5
        RSP......................................        1        2        3
        RW.......................................       35        2       37
        SA.......................................      792       43      835
        SI.......................................       45  .......       46
        TS.......................................       61       21       82
                                                  --------------------------
          Total..................................    2,650      313    2,963
          Total percent..........................       89       11  .......
    ------------------------------------------------------------------------
    \1\ RAILROAD SAFETY VIOLATION TYPES.

    ------------------------------------------------------------------------
         Violation type code                  Violation type text
    ------------------------------------------------------------------------
    AD...........................  ALCOHOL AND DRUG USE.
    AR...........................  ACCIDENT REPORTS REGULATIONS.
    BW...........................  BRIDGE WORKER SAFETY STANDARDS.
    EO...........................  FRA EMERGENCY ORDER.
    EP...........................  RAILROAD SAFETY ENFORCEMENT.
    EQ...........................  ENGINEER QUALIFICATIONS.
    FCS..........................  FREIGHT CAR SAFETY STANDARDS.
    GC...........................  GRADE CROSSING SIGNAL SAFETY.
    GS...........................  SAFETY GLAZING STANDARDS.
    HMT..........................  HAZARDOUS MATERIALS REGULATIONS.
    HS...........................  HOURS OF SERVICE LAWS.
    HSR..........................  HOURS OF SERVICE RECORD KEEPING.
    LI...........................  LOCOMOTIVE SAFETY STANDARDS.
    NE...........................  RAILROAD NOISE EMISSION COMPLIANCE.
    REM..........................  REAR END MARKING DEVICES.
    ROP..........................  RAILROAD OPERATING PRACTICES.
    ROR..........................  RAILROAD OPERATING RULES.
    RSP..........................  RADIO STANDARDS AND PROCEDURES.
    RW...........................  ROADWAY WORKER PROTECTION.
    SA...........................  SAFETY APPLIANCE STATUTES.
    SI...........................  SIGNAL INSPECTION REGULATIONS.
    TS...........................  TRACK SAFETY STANDARDS.
    ------------------------------------------------------------------------

                            enforcement case backlog
        Question. What is the current status of FRA's enforcement case
    backlog? What steps are you taking to more efficiently process that
    backlog? How does the backlog compare with the backlog for each of the
    last three years?
        Answer. At any given time, FRA always has a number of open cases
    awaiting settlement. The figures below show the number of such cases
    pending now and the total initial penalty demand on those cases, with
    similar figures as of March during each of the last three years.

    ------------------------------------------------------------------------
                                                   Number of
                     Time period                  open cases  Penalty amount
    ------------------------------------------------------------------------
    March 1996..................................       2,552     $19,420,800
    March 1997..................................       1,796      12,543,950
    March 1998..................................       1,506      11,304,050
    March 1999..................................       1,256      11,894,000
    ------------------------------------------------------------------------

        The number of open cases and amount of the outstanding penalty
    demand have declined substantially since March 1996. FRA does not
    consider these total amounts to be ``backlogs'' because only a portion
    of them involves cases older than a year.
        FRA looks at two basic measures in determining the timeliness of
    its enforcement process, i.e., how quickly it is transmitting cases
    after receipt of violation reports from field inspectors, and how
    quickly it is closing cases after transmitting them to the railroad or
    hazardous materials shipper. In 1998, FRA's Office of Chief Counsel
    initiated enforcement cases, on average, within 70 days of having
    received the violation report from the region. The promptness of the
    current process ensures that the industry is effectively informed of
    pending violations on a timely basis. With regard to major railroads,
    the process has also become very efficient in bringing these cases to
    resolution. FRA holds a settlement conference to close all pending
    cases on at least an annual basis with the largest railroads. As a
    result, FRA generally settles major railroad cases within a year of
    their transmittal. These cases make up 70 to 80 percent of the
    caseload.
        However, with all of its other duties on the increase, the Office
    of Chief Counsel is finding it very difficult to find time to settle
    cases against small railroads and shippers. These settlements, which
    are often handled through mail and phone calls rather than meetings,
    lack the economies of scale present in the large railroad settlements.
    FRA attorneys can pursue these settlements only as the press of other
    priorities (e.g., large railroad settlements, regulatory projects,
    engineer certification cases) permits. Therefore, even though the
    number of open cases is declining, the proportion that are older cases
    against small railroads and shippers is increasing.
                         allocation of safety resources
        Question. Please discuss whether FRA's rail safety personnel
    resources are allocated internally in accordance with the potential for
    risk and casualty reduction.
        Answer. Allocation of FRA's rail safety personnel resources result
    primarily from information developed out of the Safety Assurance and
    Compliance Program (SACP) which identifies systemic problems that may
    pose the greatest risk potential. FRA continually monitors the results
    of the SACP audits as well as other enforcement actions to ensure all
    safety resources are allocated to high risk and therefore, high
    priority activities.
                    number of personnel at each field office
        Question. Please list, by region, the current safety inspection
    field offices and number of personnel at each field office.
        Answer. The information follows:

    ------------------------------------------------------------------------
                                                                    No. of
                   Region                         Office           personnel
    ------------------------------------------------------------------------
    Northeastern........................  Cambridge.............          19
                                          Bangor \1\............           1
                                          Buffalo \1\...........           3
                                          Clifton Park..........           8
                                          Newark................          14
                                                                 -----------
          Total.........................  ......................          45
                                                                 ===========
    Eastern.............................  Lester................          28
                                          Hanover...............           7
                                          Columbus \1\..........           4
                                          Cleveland.............           5
                                          Cincinnati \1\........           4
                                          Charleston \1\........           5
                                          Harrisburg \1\........           2
                                          Norfolk...............           4
                                          Pittsburgh............           9
                                          Roanoke \1\...........           4
                                          Toledo \1\............           1
                                                                 -----------
          Total.........................  ......................          73
                                                                 ===========
    Southern............................  Atlanta...............          28
                                          Birmingham............           5
                                          Charlotte.............           8
                                          Jacksonville..........           9
                                          Knoxville \1\.........           2
                                          Louisville \1\........           7
                                          Memphis \1\...........           4
                                          Mobile................           4
                                          Nashville.............           4
                                          Tampa \1\.............  ..........
                                                                 -----------
          Total.........................  ......................          71
                                                                 ===========
    Central.............................  Chicago...............          36
                                          Detroit...............           6
                                          Ft. Snelling..........           8
                                          Indianapolis..........           9
                                          Peoria \1\............           2
                                                                 -----------
          Total.........................  ......................          61
                                                                 ===========
    Southwestern........................  Hurst.................          31
                                          Houston...............          11
                                          El Paso...............           4
                                          Little Rock...........           5
                                          New Orleans...........           6
                                          Oklahoma City.........           4
                                          San Antonio \1\.......           4
                                          Shreveport \1\........           3
                                                                 -----------
          Total.........................  ......................          68
                                                                 ===========
    Midwestern..........................  Kansas City...........          29
                                          Lakewood..............           9
                                          Omaha.................           8
                                          St. Louis.............           7
                                          Wichita \1\...........           2
                                          Des Moines............           3
                                                                 -----------
          Total.........................  ......................          58
                                                                 ===========
    Western.............................  Sacramento............          27
                                          Salt Lake City........           6
                                          Riverside.............          10
                                                                 -----------
          Total.........................  ......................          43
                                                                 ===========
    Northwestern........................  Vancouver.............          24
                                          Seattle \1\...........           4
                                          Pocatello.............           5
                                          Billings..............           8
                                          Bismark...............           4
                                          Spokane \1\...........           4
                                                                 -----------
          Total.........................  ......................          49
                                                                 ===========
          Total, FRA....................  ......................        468
    ------------------------------------------------------------------------
    \1\ Office closed; all employees telecommute.

                   fra office closure and reduction in space
        Question. Has FRA reduced the number of field offices during the
    last year? Are any cost savings reflected in the budget? How many field
    offices have been closed during the last three years. Please identify
    the locations of any closed sites. Have any new offices been
    established during this period? If so, where?
        Answer. In fiscal year 1996, FRA closed seven field offices and
    reduced space in two other offices, resulting in an annual savings of
    $79,558 in DOT's rent budget. Closed: Bangor, ME; Memphis, TN;
    Knoxville, TN; Tampa, FL; Shreveport, LA; San Antonio, TX; Spokane, WA.
    Reduced Space: Oklahoma City, OK; Salt Lake City, UT.
        In fiscal year 1997, FRA closed five field offices and reduced
    space in three other offices, resulting in an annual savings of $84,644
    in DOT's rent budget. Closed: Peoria, IL; Wichita, KS; Roanoke, VA;
    Seattle, WA; Louisville, KY. Reduced Space: Birmingham, AL; Nashville,
    TN; Mobile, AL.
        In fiscal year 1998, FRA closed six field offices and reduced space
    in four other offices, resulting in an annual savings of $87,285 in
    DOT's rent budget. Closed: Columbus, OH; Harrisburg, PA; Charleston,
    WV; Buffalo, NY; Toledo, OH; Cincinnati, OH. Reduced Space: Houston,
    TX; Jacksonville, FL; Charlotte, NC; Newark, NJ. There are no plans to
    close offices or reduce space during FY-1999. No new offices have been
    established.
                          fiscal year 1998 inspections
        Question. How many miles of track, freight cars, locomotives, and
    track miles with signals and train control systems were inspected last
    year? Please compare this level of inspection activity with that
    achieved during the two preceding years. How were these activities
    focused on high-risk railroads and shippers?
        Answer. The table below reflects a comparison of preliminary 1998
    inspection data with that of the previous two years. FRA collects the
    number of signal and train control devices inspected each year, but not
    the number of track miles with signal and train control systems.

    ------------------------------------------------------------------------
                                                            Percent  Percent
                                                             change   change
                                               1998 \1\       from     from
                                                              1997     1996
    ------------------------------------------------------------------------
    Track Miles Inspected.................         253,230     +1.8    -02.8
    Freight Cars Inspected................         566,458     +2.8    -09.2
    Locomotives Inspected.................          22,517     +1.6    -07.5
    Signal Units Inspected................          43,910     -4.3    -15.2
    ------------------------------------------------------------------------
    \1\ Preliminary data.

        FRA will continue to leverage its inspector resources by
    coordinating Safety Assurance and Compliance Program (SACP) and site-
    specific inspection duties in the most effective way. FRA's safety
    programs require a balanced approach of inspections coupled with
    partnerships, which enlist the cooperation of rail labor and management
    to identify and correct safety concerns in the railroad industry before
    they lead to defect violations or accidents. FRA believes that it has
    achieved the proper balance between SACP and site-specific inspections.
                             number of sacp audits
        Question. Under the SACP, how many Class I and Class II railroads
    have been analyzed by FRA so far? How many railroads have had two SACP
    reviews? How many additional railroads need to be reviewed for the
    first time under SACP?
        Answer. FRA has examined more than 55 railroads under SACP
    including all ten Class I railroads, more than half of the approximate
    27 Class II railroads, seven of the nine commuter rail authorities, and
    many of the largest switching and terminal railroads (according to
    Surface Transportation Board railroad revenue classifications, all
    switching and terminal railroads are Class III, regardless of revenue
    levels). Most SACP audits are now open-ended--once a SACP audit begins
    at a railroad, it will be continuously monitored by FRA inspectors
    through employee listening post sessions and formal FRA/Management/
    Labor meetings. FRA cannot extend SACP audits to the more than 700 U.S.
    railroads. However, the agency intends to include, in SACP reviews, the
    largest freight, all passenger, and all other freight railroads having
    significant amounts of hazardous material shipments, or interface with
    passenger service.
                       effectiveness of the sacp process
        Question. Please provide several new examples of how the SACP has
    been effective, and outline how the compliance levels have improved
    with this approach versus FRA's more traditional enforcement approach.
    In addition, please provide several new examples of how this
    cooperative approach did not work and the subsequent actions that FRA
    took to achieve an acceptable level of regulatory compliance.
        Answer. Under SACP, examination of railroad compliance with Agency
    rules is more comprehensive than with site-specific inspections. SACP
    is a multi-discipline safety audit, whereas site-specific inspections
    usually involve only a single inspection discipline. In addition,
    compliance agreements under SACP safety audits usually apply across the
    entire railroad property. Compliance with a site-specific inspection
    may only apply to a particular point on the railroad property.
        Examples of systemic problems which have been corrected by SACP
    include:
        Amtrak.--A SACP safety audit gained compliance with (1) Blue Signal
    protection regulations, (2) Short Looping procedures (rules for
    applying jumper cables to 480 volt power distribution circuits on
    passenger cars in a train), and (3) maintenance requirements for wood
    crossties at interlockings in the Northeast Corridor (NEC).
        Norfolk Southern Corporation (NS).--The Manpower, Staffing and Crew
    Utilization SACP Team gained incentives for participants in Accelerated
    Conductor Training (ACT); developed a mentoring program and training
    program for employees that participate in ACT; and took measures
    affecting deadhead transportation that will significantly improve crew
    utilization and reduce employee fatigue. The Train and Engine Safety
    Analysis SACP Team developed rules and a training and compliance
    program to reduce the number of employee accidents. FRA is monitoring
    compliance with this SACP effort. The team is also looking at other
    safety issues concerning crossing issues at a Ford Motor Company
    facility. The Harassment and Intimidation SACP Team began resolving a
    variety of issues that may lead to more accurate reporting of railroad
    incidents.
        Union Pacific Railroad Company (UP).--FRA initiated enhanced SACP
    inspection activities on the UP as a result of several incidents and
    fatalities which resulted in injury and loss of life. After
    commencement on August 23, 1997, the UP's SACP activities have been
    continuous. SACP teams have concentrated on fatigue management; crew
    utilization/crew management systems; dispatcher workload; inspection
    and testing requirements for signals, maintenance of way, locomotives
    and cars; electronic record keeping; and alternatives to employee
    discipline. Fiscal year 1998, SACP accomplishments include: developing
    a family support program; implementing a Lodging Policy for employees;
    implementing an Interim Crew Rest Policy; negotiating a ``minimum
    rest'' agreement; implementing a pilot napping program; established
    pilot program for the timely relief of crews in all of UP's regions;
    implementing daily information television broadcast of train line-up
    performance; establishing a Terminal Matrix for identifying those
    responsible for making train line-up updates; proposing the placement
    of Corridor Managers, Crew Balancing, and locomotive managers in close
    proximity to each other to improve communication and effectiveness;
    developing an analytical method to review dispatcher workload
    consisting of data from the radio communications system, and Computer
    Aided Dispatching System; adjusting and reassigning the workloads of 11
    dispatching positions; adopting a qualification process for machine
    operators; developing a simplified computer menu that guides employees
    through the exercise and download of various models of event recorders
    to insure proper testing and functioning of these components;
    developing policies for inspections of locomotives; developing
    standardized inspection procedures specific to roller bearings;
    developing programs which offer alternatives to employee discipline
    such as conferencing or training.
        CSX Transportation Company (CSXT).--The CSXT SACP encouraged the
    first major railroad to develop fatigue countermeasure training films
    and to train all employees in fatigue countermeasures. SACP activities
    also: developed procedures for correcting errors in electronic record-
    keeping; identified and corrected system-wide deficiencies with
    locomotive event recorder software; identified and corrected a system-
    wide track vegetation overgrowth problem; identified and corrected a
    system-wide signal system maintenance problem; implemented a new
    discipline policy; implemented a grade crossing awareness program for
    motor vehicle drivers; developed a new train riding policy and
    procedure, allowing signal employees to evaluate and maintain the
    alignment and preview of wayside signals; developed new procedures for
    the 92-day locomotive inspection and maintenance requirement; developed
    new tamper-resistant Blue Flag electric lock assemblies that provide
    greater security and safety; developed new hazardous material policy,
    which does not allow the entry of a hazardous materials container or
    trailer into a terminal with our proper documentation; and developed
    procedures to improve blocking and bracing techniques and securement of
    all Trailer on Flat Car/Container on Flat Car loading. Burlington
    Northern Santa Fe Pacific Railroad Company (BNSF): In partnership with
    the National Highway Traffic Safety Administration, the BNSF SACP
    developed and implemented an on-going campaign to increase work vehicle
    seat belt usage system-wide. BNSF has recently qualified for NHTSA's
    silver award for employee usage of seatbelts. The BNSF SACP implemented
    an on-going process of independent and joint TOFC/COFC Securement
    Audits and a structured contractor training and audit program. A BNSF-
    SACP Task Force approved a pilot project of using new technology
    (Quantum Signal Comparitor) for ensuring signal awareness by train
    crews.
        To date, FRA has not encountered any instances in which railroads
    have failed to comply with safety action plans. FRA recognizes the
    importance of aggressive enforcement action in cases where SACP
    commitments go unfulfilled or are not properly implemented.
                     impact of sacp--fiscal years 1996-1998
        Question. Please prepare quantitative measures to indicate trends
    in railroad safety, using a variety of measures of safety performance
    for each of the last three years. What do you suggest is the role of
    the SACP in the improvement process?
        Answer.

                        CASUALTIES IN ACCIDENTS/INCIDENTS
    ------------------------------------------------------------------------
                                                                    Total
                    Year                 Fatalities   Injuries    casualties
    ------------------------------------------------------------------------
    1996...............................       1,039      12,558       13,597
    1997...............................       1,063      11,767       12,830
    1998 \1\...........................         989      11,179       12,168
    ------------------------------------------------------------------------
    \1\ Preliminary data.

                                                   ACCIDENTS/INCIDENTS
    ----------------------------------------------------------------------------------------------------------------
                                                                                              Hwy-rail      Total
                                  Year                                  Train       Other       xing      accidents/
                                                                      accidents   incidents    impacts    incidents
    ----------------------------------------------------------------------------------------------------------------
    1996...........................................................       2,443      10,991       4,257       17,691
    1997...........................................................       2,397      10,437       3,865       16,699
    1998 \1\.......................................................       2,516      10,151       3,493       16,160
    ----------------------------------------------------------------------------------------------------------------
    \1\ Preliminary data.

                                                                    ACCIDENTS/PROPERTY DAMAGE
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          Total TRA  Accidents/                                                  Casualties/
                                                                Train     accident     million                              Total       Total      200,000
                              Year                            accidents    damage      train-      Deaths     Injuries   casualties  Casualties  empl. work-
                                                                           ($000)       miles                                                     hours rate
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    1996...................................................       2,443     212,314        3.64         488       1,610       2,098       9,232         3.66
    1997...................................................       2,397     210,729        3.54         461       1,540       2,001       8,332         3.31
    1998 \1\...............................................       2,516     229,394        3.69         426       1,279       1,705       8,234         3.21
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ Preliminary data.

                        HIGHWAY-RAIL ACCIDENTS/INCIDENTS
    ------------------------------------------------------------------------
                                                                  Accidents/
                                                      Accidents/    million
                          Year                         incidents     train
                                                                     miles
    ------------------------------------------------------------------------
    1996............................................       4,257        6.34
    1997............................................       3,865        5.71
    1998 \1\........................................       3,493        5.12
    ------------------------------------------------------------------------
    \1\ Preliminary data.

                           TOTAL TRESPASSER CASUALTIES
                       [EXCLUDING HIGHWAY-RAIL CROSSINGS]
    ------------------------------------------------------------------------
                                                                    Total
                    Year                   Deaths     Injuries    casualties
    ------------------------------------------------------------------------
    1996...............................         471         474          945
    1997...............................         533         516        1,049
    1998 \1\...........................         520         508       1,028
    ------------------------------------------------------------------------
    \1\ Preliminary data.

        Safety statistics and a recent Office of Inspector General review
    support the Agency's belief that the SACP process can identify and
    correct safety problems and enhance partnerships between FRA and its
    customers.
        The SACP process has permitted inspector resources to be used more
    effectively by identifying and addressing systematic problems that have
    railroad-wide or railroad-industry-wide implications. For example,
    during a routine inspection, an FRA inspector discovered an
    intermittent problem at a wayside signal. Through outreach, conducted
    under the auspicious of SACP, FRA traced the root cause of the problem
    to a software error in the affected 400 additional signals on the
    railroad. It would have taken years of site-specific inspections by
    dozens of inspectors to identify problems on 400 signals using site-
    specific inspections alone.
        However, despite the success of FRA's safety enforcement programs,
    additional resources are needed to maintain and increase work in SACP
    and site-specific inspections, especially in critical areas such as
    grade crossing, bridge integrity, passenger equipment safety, and
    positive train control.
                    response to ig's recommendation on sacp
        Question. Please describe in detail your response to each of the
    IG's recommendations or comments on the SACP. Please specify the exact
    steps that have been taken to respond to each recommendation, and then,
    separately outline each of the proposed steps that remain to be taken.
    Will any IG recommendations not be implemented? If so, please explain
    why.
        Answer. Concurrent with the OIG review, FRA initiated its own
    internal review of the SACP, which was conducted by the SACP Quality
    Improvement Team (SACP Team). FRA recognizes that all of FRA's SACP
    efforts be conducted and documented in generally the same manner so
    that the Agency can maintain effective management oversight of the
    program and can ensure consistency and quality in individual SACP
    projects. In adopting the SACP Team's recommendations, SACP will be
    strengthened as follows:
        (1) For consistent methodology and documentation, FRA is in the
    process of amending its SACP General Instruction Manual to provide
    guidance to all Agency personnel on the methodology and documentation
    requirements for SACP projects. In its guidance, FRA will detail the
    process to be used for conducting SACP projects, the ways in which
    proper communication (both inside and outside the Agency) will be
    ensured, and the proper methods of tracking SACP issues and documenting
    results. FRA's new guidance will address the major issues in conducting
    a SACP project including: project length (on-going partnerships for the
    largest Class I railroads/audits of finite duration for other
    railroads), issue identification and selection, planning requirements
    (by SACP Project Manager), structure and responsibilities (of SACP
    Project Manager and Team Leaders), internal coordination, resolution of
    issues and monitoring remedial actions, tracking and documentation, and
    measuring program effectiveness.
        (2) FRA's SACP policies currently require SACP Project Managers to
    develop a comprehensive railroad safety profile at the outset of a SACP
    project and, with regard to ongoing projects, to analyze relevant
    sources of information periodically to determine how that profile is
    changing. These procedures also require that SACP Project Managers
    provide for appropriate corrective actions on all issues, whether the
    issue is resolved through a formal safety action plan, compliance
    agreement, informal agreement, or enforcement action. The amended SACP
    Instruction Manual will establish more uniform procedures to accomplish
    these program elements. For example, having determined which issues are
    to be addressed in the project, the SACP Project Manager will ensure
    that each is tracked using the Partnership Issue Tracking and Status
    Report, a tracking mechanism developed especially for the SACP process.
    This tracking device will help the SACP Project Manager, in
    consultation with FRA senior managers and Team Leaders, make sure that
    corrective action occurs on each issue selected. In determining how to
    resolve each issue, the SACP Project Manager chooses the method that
    best fits: formal safety action plan, informal agreement, compliance
    agreement, or enforcement action.
        (3) FRA instructed SACP Project Managers for the 44 railroads cited
    in the OIG Report (10 Class I and 34 smaller railroads) to prepare a
    composite listing of systemic safety issues identified during these
    railroad safety audits. FRA's regional administrators will look closely
    at the 34 smaller railroads, after consulting with the SACP Project
    Managers for those railroads. FRA's Headquarter's Project Coordinator
    will track the closeouts/open status for the systemic issues identified
    for the 10 largest railroad systems, after consulting with the SACP
    Project Managers for those railroads. FRA plans to report the status of
    all identified systemic safety issues from these early SACP safety
    audits to the OIG.
        (4) During its internal review of SACP, FRA recognized the need to
    create more formalized communication procedures for SACP projects.
    Experience with past projects demonstrated that if field personnel were
    not fully informed on significant SACP issues, the overall
    effectiveness of the project was adversely impacted. Specifically, good
    communication is essential for the identification of systemic problems,
    consistent enforcement by the Office of Safety and Office of Chief
    Counsel, and the timely completion of a SACP project. FRA is attempting
    to provide, all FRA and State inspectors, ready access to SACP
    information via the Internet. FRA is taking steps that will: (1)
    improve two-way communication capabilities; (2) establish a link
    between FRA's web site and an accident/incident/inspection report web
    page; (3) give high priority to expeditious incorporation of SACP
    information, such as narrative reports, Monthly Issues Reports (MIR),
    and Partnership Issue Tracking and Status (PITS) Reports, into FRA's
    Internet web site; and (4) give high priority to the development and
    implementation of a common Internet complaint data base to ensure
    access to accurate and timely SACP complaint information. Development
    of such a comprehensive computer linkage will take some time. In the
    interim, however, FRA will take several steps to improve communication
    within the Agency on SACP issues.
        FRA's SACP Project Managers will produce a Monthly Issues Report
    for Class I railroad safety audits or multi-regional projects. All
    senior FRA officials and staff that are in need of such information
    will receive this monthly report. Class I railroad SACP Project
    Managers will attend regional administrators' meetings to facilitate
    discussion of their respective SACP projects. Regional administrators
    will communicate and share Monthly Issues Reports with regional staff
    and appropriate state directors. Regions will provide systemic
    complaint information to SACP Team Leaders and/or SACP Project
    Managers. SACP Team Leaders on Class I railroad safety audits will
    attend discipline-specific specialists meetings and participate in
    discipline-specific conference calls to discuss SACP initiatives,
    problems, and progress. They will also communicate through the timely
    sharing of pertinent information with appropriate staff directors and
    regional specialists. Regional specialists will keep appropriate FRA
    and state inspectors fully apprized of SACP activities and provide
    notice to the SACP Project Manager of significant enforcement actions.
    As necessary, the SACP Project Manager or Team Leader will coordinate
    with regional personnel on conducting follow-up inspections, and the
    resulting information will be used to determine the need for further
    action on the issue.
        To date, FRA has not encountered any instances in which railroads
    have failed to comply with safety action plans. FRA recognizes the
    importance of aggressive enforcement action in cases where SACP
    commitments are unfulfilled or are not properly implemented. That is
    why the Agency developed its Focused Enforcement Policy in 1997 (the
    policy is described in FRA's The Safety Assurance and Compliance
    Program: Guidance on Inspection and Enforcement). The Focused
    Enforcement Policy was discussed with field, headquarters and State
    personnel during FRA's Multi-Regional Conferences in 1997.
        However, in response to the IG's concerns, FRA is amending its
    enforcement policy to ensure that aggressive enforcement action is
    taken for failure to correct SACP-related safety violations, when
    appropriate, at any stage of the SACP process. FRA will amend its SACP
    General Instruction Manual to include up-dated guidelines on Focused
    Enforcement. Included in these guidelines is the provision that
    enforcement action will not be taken automatically for minor or
    inconsequential violations in connection with implementation of a
    safety action plan.
        The IG recommends that FRA advise inspectors of the Agency's intent
    to take aggressive enforcement action when problems identified in the
    SACP process have not been corrected. FRA is requiring the SACP Project
    Manager, regional administrators, and appropriate Headquarters staff to
    determine to what extent enforcement action will be taken, based on
    violations detected as a part of SACP team inspections. The SACP
    Project Manager will inform the Office of Chief Counsel of violations
    that surface during SACP team inspections or follow-up monitoring,
    which deserve especially aggressive handling. At the same time, the
    SACP Project Manager will offer a recommendation of how the violation
    should be handled. Regional specialists will ensure that all violations
    arising from a SACP review are marked ``SACP Violations'' on the
    transmittal sheet to the Office of Chief Counsel. Information involving
    compliance activities will be shared among SACP Project Managers,
    regional personnel, and the Office of Chief Counsel. The Office of
    Chief Counsel will include SACP Project Managers in the scheduling of
    settlement conferences with major railroads. Once a year, the SACP
    Project Manager and an Office of Chief Counsel attorney will analyze
    how well the previous year's enforcement activity focused on truly
    important safety issues with respect to the major railroad to which
    they are assigned, and recommend how that focus might be improved.
             number of site-specific inspections by region 1995-98
        Question. The SACP has shifted some of FRA's resources away from
    site-specific inspections. Please prepare a table showing the number of
    inspections for the various safety disciplines conducted in 1995, 1996,
    1997 and 1998, by region and in aggregate.
        Answer. The number of inspection reports filed by Federal and state
    inspectors by region during 1995-1998 follows:

                       SUMMARY OF INSPECTION REPORTS FILED
    ------------------------------------------------------------------------
                 Region                 1995      1996      1997      1998
    ------------------------------------------------------------------------
    1...............................     5,739     5,989     5,467     5,509
    2...............................    12,231    10,028     9,657     9,330
    3...............................     9,774     9,552     9,296     9,730
    4...............................     8,628     8,205     7,771     7,029
    5...............................     7,443     6,943     6,405     8,433
    6...............................     4,015     3,882     3,774     4,097
    7...............................     5,508     6,174     6,064     6,866
    8...............................     4,263     4,406     4,370     5,169
                                     ---------------------------------------
          Total.....................    57,601    55,179    52,804    56,163
    ------------------------------------------------------------------------

                 level and effect of site-specific inspections
        Question. Does FRA expect that its inspectors will continue to
    conduct fewer site-specific inspections every year as a result of its
    new approach? If so, what do you believe will be the long-term effect
    on rail safety?
        Answer. Site-specific inspections increased 5.6 percent in 1998,
    compared to 1997. FRA will continue to leverage its inspector resources
    by coordinating SACP and site-specific inspection duties in the most
    effective way. FRA's safety programs require a balanced approach of
    inspections coupled with partnerships, which enlist the cooperation of
    rail labor and management to identify and correct safety concerns in
    the railroad industry before they lead to defect violations or
    accidents. FRA believes that it has achieved the proper balance between
    SACP and site-specific inspections.
        Site-specific inspections alone are not always beneficial in
    identifying systemic problems nor ensuring railroad cooperation and
    participation in correcting safety violations. Safety Statistics and a
    recent Office of Inspector General review support the Agency's belief
    that the SACP process can identify and correct safety problems and
    enhance partnerships between FRA and its customers.
        However, despite the success of FRA's safety enforcement programs,
    additional resources are needed to maintain and increase work in SACP
    and site-specific inspections, especially in critical areas such as
    grade crossing, bridge integrity, passenger equipment safety and
    positive train control.
                     number and type of railroads inspected
        Question. How often does FRA seek to inspect each railroad? Please
    provide a table showing the number and types of railroads that
    underwent no FRA inspections for calendar years 1993-1998.
        Answer. FRA's goal is to visit annually each active railroad. As to
    each new railroad, FRA's stated objective is to visit at initial start-
    up.

                         ACTIVE RAILROADS NOT INSPECTED
    ------------------------------------------------------------------------
                                                                     Active
                                                          Active   railroads
                           Year                         railroads     not
                                                                   inspected
    ------------------------------------------------------------------------
    1993..............................................        668         88
    1994..............................................        688         92
    1995..............................................        679        115
    1996..............................................        704        124
    1997..............................................        679        144
    1998..............................................        670         97
    ------------------------------------------------------------------------

        FRA inspected all Class I railroads and all Group II railroads.
    Class I railroads, as defined by the Surface Transportation Board, are
    those with average annual operating revenues of $253.7 million or more.
    Group II railroads, exclude Class I railroads, and have an annual
    accumulation of over 400,000 employee hours worked. The active
    railroads which have not been inspected include smaller railroads with
    an annual accumulation of 400,000 and under employee hours.
                           sacp procedure guidelines
        Question. Since last year, what was done to update the written
    guidelines regarding the procedures for the SACP?
        Answer. In response to a recent Inspector General review and FRA's
    own internal review of the SACP, by the SACP Quality Improvement Team,
    FRA is amending its SACP General Instruction Manual. The revised Manual
    will be completed by the end of the fiscal year and will incorporate
    most of the recommendations from the Team's September, 1998 draft
    report. The SACP is a dynamic process. Given the evolving nature of
    SACP, FRA will closely monitor the program and periodically re-examine
    policies, procedures, and practices to maintain a high degree of
    accountability, consistency and effectiveness.
                           sacp and smaller railroads
        Question. What is FRA's experience with the SACP as applied to
    smaller railroads?
        Answer. SACP uses a rail labor/management/FRA partnership approach
    to identifying and solving safety concerns within the railroad
    industry. The difference between a SACP safety audit of a Class I
    carrier versus that of a smaller carrier is one of magnitude--the size
    of each entity's operations determines the amount of time and resources
    to be used in the process. The procedures followed are identical--
    safety profile/action plan/follow-up audit. FRA does not have the
    resources to extend SACP audits to the more than 700 U.S. railroads,
    most of which are considered small rail operations. The benefits
    expected from SACP are greater for the larger railroad operations
    primarily due to the many more levels of supervision required for the
    larger railroad systems. The agency intends to place under SACP review,
    the largest freight, all passenger, and all other freight railroads
    having significant amounts of hazardous material shipments, or
    interface with passenger service.
               canadian national acquisition of illinois central
        Question. What are FRA's concerns with regard to Canadian
    National's acquisition of Illinois Central Railroad? Has FRA identified
    any systemic safety problems during SACP reviews of IC or CN that could
    become more pronounced should the STB approve the railroads' merger?
        Answer. In early 1996, FRA conducted a SACP safety audit of the
    Illinois Central Railroad Company (IC). The SACP assessment revealed
    problems in IC's Internal Control Plan primarily affecting how
    accidents, incidents, injuries or occupational illnesses are reported.
    There were also issues relating to the carrier's employee harassment
    and intimidation policy. As a result of FRA's recommendations, IC's
    Internal Control Plan was revised in October 1997 to address FRA's
    concerns. A subsequent SACP safety audit of the IC disclosed serious
    deficiencies in record keeping requirements associated with IC's
    periodic Efficiency Tests and monitoring inspections. As a result of
    FRA's recommendations, IC's Guidelines for Conducting Efficiency Tests
    and Inspections was revised, effective January 1, 1998. FRA also
    conducted a comprehensive SACP review of IC's Drug and Alcohol Program.
    FRA determined that IC's overall program for drug and alcohol testing
    was very good by industry standards. Other areas of concern which have
    been satisfactorily addressed by IC include: changes to record keeping
    requirements for certification of locomotive engineers; crew management
    system/dispatching; compliance with terminal air brake tests;
    compliance with Freight Car Safety Standards; daily inspection of
    locomotives; hazardous materials handling/training; compliance with
    Roadway Worker Protection rules; and the high frequency of highway-rail
    grade crossing collisions. IC has been very responsive to FRA's SACP
    safety audits. The carrier has worked closely with FRA to correct all
    areas of safety concerns.
        The Grand Trunk Western Railroad (GTW), a subsidiary of the
    Canadian National Rail System (CN) which operates in the United States,
    is presently undergoing a SACP safety audit. Though in its early
    stages, the following are examples of issues that are being addressed
    by GTW: corporate culture issues; applicability of Canadian versus U.S.
    regulations; compliance with Hours of Service Act requirements;
    problems with the carrier's Internal Control Plan; compliance with
    Roadway Worker Protection requirements; and compliance with locomotive
    daily inspection requirements.
                       railroad safety advisory committee
        Question. Please break down all associated expenses, justifying the
    requested increase to support the RSAC, including facilities, mailings,
    equipment, contract support, and the ``other'' support costs. Please
    further specify exactly how fiscal year 1997, fiscal year 1998 and
    fiscal year 1999 monies were or will be used for RSAC.
        Answer. FRA is requesting $200,000 for RSAC, the same level as in
    fiscal year 1999. The fiscal year 2000 funding will be allocated as
    follows:
        Travel funds are required ($5,000) for invitational travel for
    state organizational employees who serve as Committee, Working Group,
    and Task Force members. Their participation in the RSAC process is
    essential to ensuring representation of interests other than railroad
    management and labor which are directly affected by FRA's safety
    regulatory program.
        Facilitation service funding ($10,000) is essential to the success
    of the negotiated rulemaking process. The demands placed on the limited
    number of in-house facilitators necessitates the use of professional
    facilitators. Professional facilitators are crucial to avert delay in
    the negotiated rulemaking process.
        Support for contractual services for maintenance of the RSAC
    Database, designed to track RSAC participants and tasks. Development
    and maintenance of a website for RSAC to provide interactive
    information for use by RSAC members and easy access by the public to
    up-to-date information on RSAC activities. Specialized data collection
    and analyses requirements in support of Committee, Working Group and
    Task Force activities ($70,000). These services are a critical
    requirement to supplement existing staff and address an escalating
    workload through the use of technological assistance without increasing
    staffing levels. Meetings of working groups and task forces must
    accommodate the needs of members in order to elicit continued rail
    labor and management support and participation in the process.
    Specialized data collection and analyses will be required to support
    the work of the task forces. Absent these services, the burden that
    will be imposed upon existing safety resources will further strain
    limited resources and continue to divert and dilute efforts being
    directed to other critical functions.
        Funding for training ($5,000) provides requisite interest-based
    negotiation training for Committee, Working Group and Task Force
    members to ensure effective participation in this consensual rulemaking
    process.
        Funding for meeting space and accompanying audio/visual
    requirements for the full Committee, Working Groups and Task Forces
    ($65,000) to accommodate meeting space requirements based on the number
    of participants required to be seated at the table, attendance by
    members of the general public and additional space necessary for
    essential caucus and task force activities. Federal agency space
    available to accommodate these requirements is extremely limited and in
    great demand in the Washington D.C. area. Further constraints for RSAC
    meetings are restrictions on entrances to many federal buildings. The
    majority of RSAC members and other attendees are not federal government
    employees and the meetings are open to the general public. Meetings are
    conducted at locations outside of the Washington area to facilitate
    member participation and availability and to equitably distribute the
    burden of travel time and costs for members. This funding will also
    provide necessary audio-visual support for these meetings.
        Funding for supplies, printing and mailing services ($44,000) are
    essential to support the meetings and work of the full Committee, the
    Working Groups and Task Forces. Adequate funding to support processing
    and dissemination of information and data crucial to the ongoing
    regulatory tasks and the extensive coordination involved, will ensure
    the effectiveness of this extremely significant undertaking is not
    compromised.
        Funding for interpreter services ($1,000) is requested to address
    the requirements of the Federal Advisory Committee Act and the
    Americans with Disabilities Act.
        The $50,000 Congress authorized for RSAC in fiscal year 1997 funded
    supplies, printing, mailing costs, meeting space, and accompanying
    audio/visual requirements for three full Committee meetings and an
    estimated 36 working group and task force meetings.
        The $100,000 funding level for fiscal year 1998 continued to
    support costs for supplies, printing, mailing and space for the
    meetings of the full Committee, working groups, and task forces, and
    covered the initial development of the RSAC database.
        The $200,000 funding level for fiscal year 1999 also covers
    supplies, printing, mailings, meeting space. In addition, funds support
    interest-based negotiation training, contractual services for data
    entry for the RSAC database, and development and maintenance of an RSAC
    informational website.
        The RSAC structure consists of voting representatives from 27
    organizations representing large and small railroads, rail labor
    organizations, state associations, rail passenger representatives,
    suppliers, other interested parties, and four non-voting associate
    representatives from agencies with rail responsibilities in Canada and
    Mexico, the National Transportation Safety Board, and the Federal
    Transit Administration. Initial funding levels did not anticipate the
    overwhelming industry embracement of this process. Railroad labor and
    management, as well as suppliers and other parties, are dedicating
    significant resources to the success of this collaborative rulemaking
    process. Since RSAC was chartered on March 25, 1996, an estimated 800
    full Committee, Working Group and Task Force members, and alternates
    have participated in more than 150 meetings to address 15 tasks on
    issues such as track safety standards and positive train control. The
    magnitude of the resources dedicated is reflective of the participants'
    commitment to the success of this process.
                              rsac and rulemakings
        Question. How many rulemaking tasks have been referred to the RSAC?
    How long had FRA been working on each rulemaking prior to referring it
    to the RSAC? For the tasks referred to the RSAC, how many have missed
    the Congressional mandate to issue final rules? Has the Administrator
    withdrawn any of the tasks referred to the RSAC? If so, what were the
    reasons for withdrawing tasks referred to the RSAC?
        Answer. Since RSAC was chartered on March 25, 1996, 15 tasks have
    been referred to, and accepted by, the RSAC. See attached listings
    detailing the tasks accepted by the RSAC and how long FRA had been
    working on each of these rulemakings prior to referring them to RSAC.
        FRA is making good progress in reducing a regulatory backlog that
    arose against a background of successive statutory mandates and limited
    resources. FRA did not meet statutory mandates on two tasks (track
    standards and freight power brake revisions) that were referred to
    RSAC, although the track rule has been issued in final. Of the tasks
    given to RSAC, only one (freight power brakes) has been withdrawn, for
    reasons discussed below.
        The extended statutory deadline for revision of the track safety
    standards was September 1, 1995. FRA published an ANPRM on November 6,
    1992. The RSAC accepted the task of preparing an NPRM on April 2, 1996.
    FRA published an NPRM on July 3, 1997, and the final rule was published
    on June 22, 1998. The effective date of the rule was September 21,
    1998.
        The statutory deadline for revision of the power brake rules was
    December 31, 1993. An NPRM was published on September 16, 1994. Based
    on differences between passenger and freight operations, passenger
    equipment power brake standards were separated from freight and
    included in the Passenger Equipment Standards NPRM published September
    23, 1997. FRA has prepared a final rule, which is pending publication.
    Two-way end-of-train rules were separated from the balance of freight
    issues and a final rule was published January 2, 1997. Railroads agreed
    to an expedited schedule and trains were equipped ahead of the
    statutory deadline.
        The general revision of the freight power brake rules was tasked to
    the RSAC on April 1, 1996. After over a year of intense efforts, a
    consensus between railroad labor and management could not be reached on
    several contentious issues and FRA formally withdrew the task on June
    24, 1997. FRA published an NPRM on September 9, 1998, reflective of
    what FRA learned through the collaborative process. Public hearings
    were conducted on October 26, 1998, in Kansas City, Missouri, and on
    November 13, 1998, in Washington, DC. A technical conference was held
    in Walnut Creek, California, on November 23-24, 1998. The final date
    for submission of written comments was extended to March 1, 1999. FRA
    is preparing the final rule.
                  tasks accepted by the rsac as of april 1999
        Task 96-1 Revision of Freight Power Brake Regulations.--Formally
    withdrawn 6/97. FRA issued an NPRM reflective of what FRA learned
    through the collaborative process.
        Task 96-2 Revision of Track Safety Standards.--To promote the safe
    movement of trains.
        Task 96-3 Railroad Communications.--To recommend revisions to the
    Radio Standards and Procedures and consider communications capability
    required to support emergency preparedness functions, including
    emergency preparedness plans for rail passenger service.
        Task 96-4 Tourist, Excursion, Scenic and Historic Service.--To
    ensure appropriate applicability of FRA regulations to tourist,
    excursion and historic railroads on and off the general rail system.
        Task 96-5 Revision of Steam-Powered Locomotive Inspection
    Standards.--To promote the safe operation of tourist and historic rail
    operations.
        Task 96-6 Revision of Qualification and Certification of Locomotive
    Engineer Regulations.--To promote railroad safety by improving the
    regulations based on additional knowledge and experience gained since
    the original effective date.
        Task 96-7 Safety Standards for Track Motor Vehicles and Self
    Propelled Roadway Equipment.--To promote the safe operation of track
    motor vehicles and self -propelled roadway equipment.
        Task 96-8 Locomotive Crashworthiness and Working Conditions
    Planning Task.--To evaluate the need for action responsive to
    recommendations contained in the Report to Congress entitled Locomotive
    Crashworthiness & Working Conditions.
        Task 97-1 Locomotive Crashworthiness.--To promote the safe
    operation of trains and the survivability of locomotive crews where
    train incidents do occur.
        Task 97-2 Locomotive Cab Working Conditions.--To safeguard the
    health of locomotive crews and promote the safe operation of trains.
        Task 97-3 Revision of Event Recorder Requirements.--To enhance rail
    safety through appropriate revision and/or addition to existing event
    recorder requirements to improve accident investigation,
    reconstruction, and analysis methodologies. To consider, and as
    appropriate act upon, National Transportation Safety Board
    recommendation for locomotive cab voice recorders.
        Task 97-4 Positive Train Control Systems.--To facilitate
    understanding of current Positive Train Control (PTC) technologies,
    definitions, and capabilities.
        Task 97-5.--To address issues regarding the feasibility of
    implementing fully integrated PTC systems.
        Task 97-6.--To facilitate implementation of software based signal
    and operating systems through consideration of revisions to the Rules,
    Standards and Instructions to address processor-based technology and
    communication-based operating architectures.
        Task 97-7 Definition of Reportable ``Train Accident''.--To evaluate
    the current concept of a reportable ``train accident'' to determine
    whether clarification of the means used by railroads to estimate
    railroad property damage could improve the consistency of reporting.
                    history of rulemakings referred to rsac
        Revision of Freight Power Brake Regulations.--The 1992 Rail Safety
    Enforcement and Review Act of 1992 required FRA to revise the power
    brake regulations. FRA did complete the portion of the rule involving
    two-way end-of train devices (EOTs) and it became effective on July 1,
    1997. FRA published a Notice of Proposed Rulemaking (NPRM) on September
    16, 1994, and conducted six days of public hearings. Additional options
    were requested from passenger interests and freight interests.
    Passenger power brake provisions were included in the Passenger
    Equipment Standards NPRM published September 23, 1997, and a final rule
    is in preparation. Revision of the freight power brake regulations was
    tasked to RSAC on April 1, 1996. After a period of over a year of
    intense efforts, a consensus between railroad labor and management
    could not be reached on several contentious issues. FRA formally
    withdrew the freight power brake task at the June 24, 1997, RSAC
    meeting. FRA published an NPRM on September 9, 1998, reflective of what
    FRA has learned through the collaborative process. Public hearings were
    conducted on October 26, 1998, in Kansas City, Missouri, and on
    November 13, 1998, in Washington, DC. A technical conference was held
    in Walnut Creek, California, November 23-24, 1998. The final date for
    the submission of written comments was extended to March 1, 1999. FRA
    is preparing the final rule.
        Revision of Track Safety Standards.--The 1992 safety authorization
    act required FRA to issue revised track rules. FRA published an
    Advanced Notice of Proposed Rulemaking (ANPRM) on November 6, 1992, and
    conducted workshops during the period January-March 1993. The RSAC
    accepted the task of preparing an NPRM on April 2, 1996. In November
    1996, the RSAC voted to recommend issuance of the NPRM and FRA
    published an NPRM on July 3, 1997. A public hearing was held on
    September 4, 1997, with comments due by December 22, 1997. The final
    rule was published on June 22, 1998. The effective date of the rule is
    September 21, 1998.
        Although the subject of much discussion, the Track Working Group
    could not reach consensus about how the revised Track Safety Standards
    should address GRMS technology. The RSAC therefore recommended that a
    small task group continue evaluating the possibility of developing GRMS
    standards for broader application within the industry. The task group
    drafted a GRMS standard providing for the use of this technology within
    the industry which has been approved by the Track Working Group. FRA is
    preparing an amendment to the final rule which will address the use of
    GRMS technology.
        Railroad Communications.--FRA, in submitting a report to Congress
    on Railroad Communications and Train Control on July 13, 1994, noted
    the need to revise existing Federal standards for radio communications
    in concert with railroads and employee representatives. The RSAC
    accepted the task of preparing an NPRM, including consideration of
    communication capabilities required in railroad operations, on April 1,
    1996. The RSAC voted to recommend issuance of an NPRM. The NPRM was
    published on June 11, 1997. A final rule was published on September 4,
    1998, and became effective on January 2, 1999.
        Tourist, Excursion, Scenic and Historic Service.--The Swift
    Railroad Development Act of 1994 required FRA to submit a report to
    Congress regarding FRA's actions to recognize the unique factors
    associated with these generally small passenger operations that often
    utilize historic equipment. The report was submitted to the Congress on
    June 10, 1996. The RSAC authorized formation of a working group on
    Tourist and Historic Railroads on April 1, 1996, to promote the safe
    operation of tourist and historic rail operations. The working group
    has been monitoring completion of the steam locomotive regulations
    task.
        Revision of Steam-Powered Locomotive Inspection Standards.--A
    committee of steam locomotive experts from tourist and historic
    railroads have sought a partnership with FRA to revise the steam
    locomotive regulations. Revision of the regulations was tasked to the
    RSAC on July 24, 1996. The working group on Tourist and Historic
    Railroads created a task force to address this task. The task force's
    proposed recommendations were accepted by the working group and
    forwarded to the RSAC. The RSAC voted to recommend issuance of an NPRM.
    The NPRM was published in the Federal Register on September 25, 1998. A
    public hearing was held in Corpus Christi, Texas, on February 4, 1999.
    Written and oral comments have been reviewed and FRA is preparing the
    final rule.
        Revision of Qualification and Certification of Locomotive Engineer
    Regulations.--The final rule for locomotive engineer certification
    became effective in 1991, but certain issues were left unresolved.
    Experience under the rule has also raised additional issues. An interim
    final rule amendment was published on October 12, 1995. The RSAC
    accepted a task to revise the regulations on October 31, 1996. The full
    Committee voted at the May 14, 1998, meeting to recommend issuance of
    the NPRM forwarded by the Working Group. An NPRM was published in the
    Federal Register on September 22, 1998. The Working Group has met to
    resolve issues presented in the public comments. At the January 28,
    1999, meeting, the RSAC recommended issuance of a final rule with the
    Working Group modifications. FRA is preparing the final rule.
        Safety Standards for Track Motor Vehicles and Self Propelled
    Roadway Equipment.--During deliberations of the working group on Track
    Safety Standards, the issue of proposing standards relating to the
    safety of persons riding or operating maintenance-of-way equipment was
    raised. On October 31, 1996, the RSAC accepted a task of drafting
    proposed rules for safety of this equipment. A task force was formed to
    address the issue and the task force reached a consensus agreement in
    principle on what should be included in the proposed rule. At their
    last meeting, the task force identified several remaining issues to be
    resolved. In addition, the working group recognized the need to
    coordinate with the Locomotive Cab Conditions Working Group to ensure
    that standards for noise and air temperature (for enclosed cabs only)
    for new category 1 and 2 equipment employ a rationale that is
    reasonably consistent with the technical approach being employed for
    locomotive cabs. (Note: actual standards are expected to differ in
    important respects, recognizing the differences in the working
    conditions and functions involved.) The task force has reached
    agreement on the rule text for the proposed rule. FRA is researching
    several OSHA related issues in order to avoid preemption difficulties.
    A complete draft proposed rule package is being prepared for
    presentation to the full Committee.
        Locomotive Crashworthiness and Working Conditions Planning Task.--
    The Rail Safety Enforcement and Review Act of 1992 required FRA to
    conduct a proceeding regarding locomotive crashworthiness and working
    conditions and issue regulations or submit a report. FRA conducted
    research, outreach, and a survey of locomotive conditions and finalized
    a report to the Congress entitled Locomotive Crashworthiness & Working
    Conditions, transmitted by letter of September 18, 1996. The report
    conveyed data and information developed by FRA to date, closed out
    those areas of investigation for which further action is not warranted,
    and defined issues that should be pursued further in concert with
    industry parties, either for voluntary or regulatory action. The RSAC
    accepted a planning task on October 31, 1996, to evaluate the need for
    action responsive to recommendations contained in the report. A
    planning group reviewed the report and grouped issues into categories.
    FRA presented a task statement addressing locomotive crashworthiness
    and a task statement addressing cab working conditions to the RSAC on
    June 24, 1997.
        Locomotive Crashworthiness.--On June 24, 1997, the RSAC voted to
    accept a task addressing locomotive crashworthiness issues. The working
    group on Locomotive Crashworthiness established a task force on
    engineering issues that reviewed collision history and design options.
    The working group reviewed the results of research that was
    commissioned and is finalizing recommended draft standards for future
    locomotives to present to the full Committee.
        Locomotive Cab Working Conditions.--On June 24, 1997, the RSAC
    voted to accept a task addressing cab working conditions issues. The
    working group on Locomotive Cab Working Conditions established task
    forces on noise and temperature. The full working group met several
    times to draft a standard for locomotive sanitary conditions and is
    preparing a package for presentation to the RSAC. The Noise Task Force
    is finalizing draft recommendations for hearing conservation program
    requirements to be presented to the RSAC.
        Revision of Event Recorder Requirements.--In issuing final rules
    for event recorders which became effective May 5, 1995, FRA noted the
    need to provide more refined technical standards. The National
    Transportation Safety Board (NTSB) noted the loss of data from event
    recorders in several accidents due to fire, water and mechanical
    damage. NTSB proposed performance standards and agreed to serve as co-
    chair for an industry/government working group that would define
    technical standards for next-generation railroad event recorders. FRA
    conducted a meeting of an informal working group comprised of railroad
    labor and management and co-chaired by NTSB on December 7, 1995, to
    consider development of technical standards. At the July 24-25, 1996,
    RSAC meeting, the Association of American Railroads (AAR) agreed to
    continue the inquiry and on November 1, 1996, reported the status of
    work on proposed industry standards to the RSAC. On March 5, 1997, the
    NTSB issued recommendations regarding testing and maintenance of event
    recorders as a result of finding in the investigation of an accident on
    February 1, 1996, at Cajon Pass, California. On March 24, 1997, the
    RSAC indicated its desire to receive a task to consider the NTSB
    recommendations with respect to crash survivability, testing and
    maintenance. A task was presented to, and accepted by, the RSAC on June
    24, 1997. An Event Recorder working group was formed and a task force
    established. The working group and task force have conducted meetings
    and a draft proposed rule is being reviewed.
        Positive Train Control (PTC) Systems.--The Swift Rail Development
    Act of 1994 required FRA to submit a status report on the
    implementation of positive train control as a follow-up to the July
    1994 report entitled Railroad Communications and Train Control. FRA has
    provided testimony to the committees of jurisdiction reporting the
    status of efforts to promote implementation of positive train control.
    FRA plans to utilize the results of the efforts described below to
    provide an appropriate status report.
        On September 30, 1997, the RSAC accepted two tasks involving
    defining PTC functionalities, describing available technologies,
    evaluating costs and benefit of potential systems, and considering
    implementation opportunities and challenges, including demonstration
    and deployment. A third task accepted by the RSAC requires revising
    various regulations to address the safety implications of processor-
    based signal and train control technologies, including communications-
    based operating systems. A working group was convened to address the
    tasks and two task forces were established, a Standards Task Force and
    a Data and Implementation Task Force.
        The Data and Implementation Task Force is working to finalize a
    report on the future of PTC systems, which will be incorporated into
    the required progress report to the Congress. The task force will
    attempt to complete a draft at their April 1999 meeting. After
    completion of this report, we anticipate that the Data and
    Implementation Task Force will be involved in monitoring implementation
    of PTC on the joint Illinois/AAR/UP/FRA project.
        The PTC Working Group has also established two teams: an Operating
    Rules Team, which will be working to ensure that appropriate railroad
    operating rules are part of any PTC implementation process; and a Human
    Factors Team which will evaluate human factor aspects of PTC systems.
    Members of these teams serve on both the PTC Standards Task Force and
    the Data and Implementation Task Force, and we anticipate that
    additional team members will be drawn from the railroad community.
        Definition of Reportable ``Train Accident''.--FRA identified the
    need to comprehensively revise the regulations governing accident/
    incident reporting, which had not been revised since 1974. FRA issued
    an NPRM on August 19, 1994, and a final rule on May 30, 1996. Technical
    amendments were published on November 22, 1996, and the FRA
    Administrator signed final rule amendments on December 16, 1996. The
    final rule became effective on January 1, 1997. On June 24, 1997, the
    RSAC reviewed a request by an RSAC member to clarify the means used by
    railroads to estimate railroad property damage and improve the
    consistency of reporting. The RSAC accepted the task on September 30,
    1997, limited to determination of damages qualifying an event as a
    reportable train accident. A working group was formed, held its initial
    meeting in February 1999, and has been conducting meetings to address
    this task.
                      impact of rsac on regulatory process
        Question. The RSAC was intended to help FRA complete rulemaking on
    important safety issues. What rules has FRA issued that are directly
    attributable to the involvement of the RSAC? To what extent has the
    RSAC process expedited agency rulemaking?
        Answer. The principal benefits that flow from use of collaborative
    rulemaking processes are (i) the improved quality of the resulting rule
    (better safety results and fewer burdens on the regulated entity) and
    (ii) the extent to which the industry parties--having helped prepare
    the rule--``buy in'' and therefore comply more readily and completely
    with the rule's requirements. These are largely qualitative benefits
    that do not lend themselves to data collection in the traditional
    sense.
        FRA began its emphasis on collaborative processes with a formal
    negotiated rulemaking that led to the final rule on Roadway Worker
    Safety (12/16/96). FRA also requested, and the Congress granted,
    discretion to consult with affected parties in preparing rules for
    passenger safety. This led to a consensus-based final rule on Passenger
    Train Emergency Preparedness (5/4/98) and to productive discussions
    that helped to form the Passenger Equipment Safety Standards; final
    rule was published May 12, 1999.
        With establishment of the Railroad Safety Advisory Committee (RSAC)
    in March of 1996, FRA endeavored to institutionalize this collaborative
    approach to rulemaking. Results to date include final rules for
    revision of the Track Safety Standards and rules on Railroad
    Communications. In addition, RSAC consensus proposals for Steam
    Locomotive Inspection and Locomotive Engineer Certification promise to
    provide the basic structure needed for final rules on those topics.
        RSAC working groups are heavily engaged in other important topics,
    including improvements to requirements for Locomotive Event Recorders,
    standards for Locomotive Crashworthiness, improvement of Cab Working
    Conditions, safety enhancements to on-track Roadway Equipment,
    Performance Standards for Processor-Based Signal and Train Control
    Systems, the future of Positive Train Control systems, and other
    issues. The energy and dedication being brought to the table by
    representatives of labor, freight and passenger railroads, suppliers,
    States, and others is perhaps the best testimony supporting the use of
    this partnership approach to enhancement of railroad safety.
             rsac's review of training requirements for conductors
        Question. Has FRA considered using the RSAC process to evaluate a
    rulemaking requiring the same minimum training requirements for
    conductors as are currently required for engineers? Has FRA been
    approached by rail labor or Congressional offices on this issue? By
    whom? Who would oppose such a requirement?
        Answer. Over 25 members of Congress have written to FRA
    recommending that the subject of certification of safety-critical
    railroad employees be placed on the RSAC agenda. The issue has been
    discussed with several rail labor organizations, but no labor
    organization chief executive has written to FRA requesting that it
    issue a rule on the subject of conductor certification. Recently,
    however, representatives of the United Transportation Union have
    indicated that conductor certification is one of their priorities and
    that RSAC is the appropriate forum in which to address the issue. At
    the April 15, 1999 RSAC meeting, FRA placed the issue of certification
    of safety-critical employees on the agenda. FRA urged all RSAC
    participants to study the relevant facts and provide FRA their views on
    the need for regulatory action concerning safety-critical employees,
    including conductors. Based on the facts and recommendations it
    receives, FRA will determine whether to offer RSAC a rulemaking task on
    certification at the next RSAC meeting in early September. It is not
    clear who would oppose certification because the need for and costs of
    certification are not clear. FRA, of course, would have to weigh the
    impact of one or more additional certification programs on its
    resources. The engineer certification program, which is supported by
    specific statutory requirements enacted in 1988, requires the devotion
    of many work years by FRA's program and legal staffs. This
    ``certification'' program entails private rights regarding freedom from
    arbitrary adverse certificate actions and requires FRA oversight of due
    process procedures, including administrative hearings and appeals in
    certain contested cases. Similar programs requiring certification of
    other types of employees would no doubt require similar resources,
    which FRA presently does not have.
        Other safety-critical employees that could request certification
    status include dispatchers, employees responsible for inspection,
    testing and maintenance of signal systems and highway rail grade
    crossing warning devices, track inspectors, and motive power and
    equipment inspection and maintenance personnel responsible for both
    passenger and freight equipment. It should be noted that existing FRA
    regulations require training in operating rules and practices for
    conductors and other train and engine crews. FRA has sponsored
    curriculum development efforts for train dispatcher training programs.
    Current Track Safety Standards (recently revised through the RSAC)
    provide basic qualification requirements for track inspectors.
        FRA has worked with representatives of railroad signal employees to
    develop technical training in the fundamentals of microprocessor-based
    systems. Pending rulemaking proposals would set forth specific training
    and qualification procedures for mechanical personnel responsible for
    passenger cars and locomotives and for the safety of freight power
    brake systems. Whatever decision is made regarding ``certification'' of
    safety-sensitive railroad employees, FRA and the RSAC will continue to
    be involved in promoting training and qualification programs to advance
    railroad safety.
                         completed rulemakings in 1998
        Question. Please list all final regulations, ANPRM's, NPRM's and
    any new regulatory projects issued or pursued since last year.
        Answer. The information follows.
        Final Rules issued in 1998:
      --Passenger Train Emergency Preparedness (5/4/98)
      --Track Safety Standards--revision (6/22/98)
      --Railroad Communications (9/4/98)
      --Northeast Corridor Signal System Order (7/22/98)
        Proposed rules issued in 1998:
      --Steam Locomotive Inspection--revision (9/25/98)
      --Locomotive Engineer Certification--revision (9/22/98)
      --Freight Power Brakes--revision (2d) (9/9/98)
      --Safety Integration Plans--proposed jointly with STB (12/31/98)
        FRA did not pursue any new major regulatory projects in 1998. In
    addition to work related to the final and proposed rules listed above,
    FRA continued to work on a number of other important rulemakings,
    including:
      --Passenger Equipment Safety Standards (final)
      --Train Horns (Whistle Bans)
      --PTC performance standards
      --Cab working conditions (sanitation, noise, temperature)
      --Event recorders--data survivability and other issues
      --Locomotive crashworthiness
                               regulatory backlog
        Question. What is the current regulatory backlog? What are the
    nature and status of each of those projects? Please identify which of
    those are statutorily mandated, and when those are due for final
    issuance.
        Answer. Enclosed is March 1999 summary of FRA's pending regulatory
    workload, showing the nature and status of each of those projects. The
    projects that are statutorily mandated are:
        Passenger Equipment Standards.--FRA issued a final rule on
    passenger equipment on May 12, 1999. The Federal Railroad Safety
    Authorization Act of 1994 required FRA to issue initial standards in
    three years and final standards in five years. FRA issued final rule on
    one aspect of the mandate, emergency preparedness, in September 1997.
    The final rule to be issued in May is the first phase of the equipment
    standards. FRA will continue to work on additional passenger safety
    issues in the rulemaking's second phase.
        Freight Power Brake Rules.--The statutory deadline for revision of
    the power brake rules was December 31, 1993. FRA will issue rules on
    passenger train brakes as part of its passenger equipment standards, to
    be issued in May 1999. One of the major mandates in the statute
    concerned equipping trains with two-way end-of-train devices. FRA
    issued a rule requiring those devices in January 1997, and railroads
    actually equipped trains with them prior to the deadline for compliance
    stated in the statute. Remaining freight power brake issues were dealt
    with in a proposed rule issued in 1994. FRA withdrew that proposed rule
    and tasked RSAC with developing rules in 1996. In June 1997, with RSAC
    deadlocked on the rule, FRA withdrew the task from RSAC. FRA issued a
    proposed rule on September 23, 1997, and, after public hearings and
    comment, is preparing a final rule. FRA will hold an additional public
    meeting on issues related to the agency's data on equipment inspections
    in May or June 1999, and complete the final rule thereafter.
        Grade Crossing Whistle Bans.--The Swift Rail Development Act of
    1994 required FRA to issue regulations providing for the use of train
    horns at highway-rail crossings. The final rule on the most hazardous
    crossings was due on November 2, 1996, and a final rule on other
    crossings was due on November 2, 1998. This rule would require the
    sounding of the locomotive horn at a crossing unless alternative safety
    measures are in place to compensate for its value as a warning to
    motorists. FRA released a report on the national impacts of local
    whistle bans on June 1, 1995, and has conducted an extensive program of
    public outreach to make communities aware of the forthcoming rulemaking
    and to seek information on supplementary safety measures that would
    support allowance of quiet zones in communities sensitive to train horn
    noise. Numerous congressional offices encouraged FRA to continue
    outreach and data collection. FRA advised the Congress that the
    deadline for an initial final rule would not be met as a result.
    Immediately prior to adjournment, the 104th Congress enacted the FAA
    reauthorization bill (Public Law 104-264; 10/9/96), which included
    amendments to the original whistle ban legislation. In general, the
    legislation affirms the latitude available to the Secretary to provide
    for phase-in of regulations and focus on safety results. FRA is
    completing the NPRM for review and clearance within the Executive
    Branch. FRA is presently completing a Draft Environmental Impact
    Statement (EIS) for the proposed regulation. FRA's proposed rule will
    strive to achieve the law's important safety objective in a way that
    will provide communities maximum flexibility and ample opportunity to
    maintain quiet.
        In addition to the statutorily mandated rules, among the most
    important pending rulemakings are:
      --Positive train control.
      --Locomotive cab working conditions.
      --Locomotive crashworthiness.
      --Event recorder revisions.
      --Engineer certification revisions.
      --Safety integration plans.
        FRA expects to issue proposed or final rules on each of these
    subjects in 1999. The enclosed overview contains specifics on each of
    these projects.

       Overview of the Railroad Safety Regulatory Program and Standards-
                          Related Partnership Efforts

                    summary of consensus rulemaking efforts
        Roadway Worker Safety.--Consensus achieved in formal negotiated
    rulemaking; final rule published 12/16/96; effective 1/15/97. Denial of
    AAR and APTA petitions for reconsideration published 4/21/97.
        Passenger Equipment Safety Standards.--NPRM based on working group
    recommendations was published 9/23/97. Public hearing held 11/21/97.
    Written comments were due 11/24/97. Working group met 12/15-12/16/97
    (general issues) and 1/6/98 (intercity and high speed issues). Final
    rule in clearance within Executive Branch.
        Passenger Train Emergency Preparedness.--NPRM based on working
    group recommendations was published 2/24/97 with significant additions,
    and a notice of public hearings was published 3/6/97. Public hearings
    were held in Chicago on 4/4/97 and in New York City on 4/7/97. Written
    comments were due by 4/25/97. Working group met 8/28/97 and reached
    agreement in principle on changes for incorporation into the final
    rule. Final rule published 5/4/98 (63 FR 24630).
        Railroad Safety Advisory Committee.--Last full Committee meeting 1/
    28/99; Last RSAC Working Group Activity Update published in Federal
    Register 12/29/98 (63 FR 71667).

    ------------------------------------------------------------------------
    Task.
     No.               Subject                           Status
    ------------------------------------------------------------------------
     96-1 Power Brake Regulations,       Working group charter extended to
           freight, general revision      1/15/97 to produce NPRM; impasse
                                          reached at 12/4/96 meeting, and
                                          subsequent efforts to renew
                                          talks were not successful. FRA
                                          withdrew task at 6/24/97
                                          meeting. FRA published second
                                          NPRM 9/9/98 (63 FR 48294)
                                          reflective of what FRA has
                                          learned through the
                                          collaborative process. Public
                                          hearings 10/26/98 and 11/13/98;
                                          technical conference 11/23-24/
                                          98. Submission of written
                                          comments date due extended to 3/
                                          1/99.
     96-2 Track Safety Standards,        Consensus achieved; in balloting
           general revision               that concluded 11/21/96, RSAC
                                          voted to accept working group
                                          report and recommend NPRM. NPRM
                                          published 7/3/97; public hearing
                                          held 9/4/97; comment period
                                          closed 9/15/97. Final rule
                                          published 6/22/98; effective 9/
                                          21/98. FRA preparing final rule
                                          amendment on Gage Restraint
                                          Measurement System (GRMS)
                                          standards.
     96-3 Railroad Communications        Final meeting of working group
           (including revision of Radio   was held 1/23/97. Working group
           Standards and Procedures)      provided consensus NPRM to RSAC
                                          at 3/24/97 meeting. RSAC voted
                                          to accept the NPRM and forward
                                          to the Administrator in voting
                                          concluded 4/14/97. NPRM
                                          published 6/26/97; comment
                                          period closed 8/25/97. Final
                                          rule published 9/4/98 (63 FR
                                          47182).
     96-4 Tourist Railroads              Open task to address needs of
                                          tourist and historic railroads;
                                          working group is monitoring
                                          steam task.
     96-5 Steam-Powered Locomotives,     Tourist & Historic Working Group
           revision of inspection         met with task force
           standards                      representatives 9/3/97. NPRM was
                                          approved by full committee in
                                          voting that concluded 2/17/98.
                                          NPRM published 9/25/98 (63 FR
                                          51404). Public hearing held 2/4/
                                          99.
     96-6 Locomotive Engineer            Task accepted 10/31/96; first
           Qualification and              working group meeting held 1/7-9/
           Certification, general         97. NPRM approved by full
           revision                       committee 5/14/98. NPRM
                                          published 9/22/98 (63 FR 50625).
                                          FRA preparing final rule based
                                          in part on RSAC recommendations
                                          for resolution of issues raised
                                          in public comments.
     96-7 Track Motor Vehicle and        Task accepted 10/31/96. Task
           Roadway Worker Equipment       force of Track Safety Standards
                                          Working Group is finalizing a
                                          proposed rule.
     96-8 Locomotive Crashworthiness     Planning task accepted 10/31/96;
           and Working Conditions         planning group met 1/23/97; two
           (planning task)                task statements were accepted by
                                          the full Committee at 6/24/97
                                          meeting [see 97-1, 97-2].
                                          Planning task is COMPLETED.
     97-1 Locomotive Crashworthiness     Task accepted 6/24/97; working
                                          group held initial meeting 9/8-9/
                                          9/97. Established task force to
                                          review collision history and
                                          design options. Working group
                                          reviewed results of research and
                                          is drafting standards for
                                          freight, passenger and switching
                                          locomotives.
     97-2 Locomotive Cab Working         Task accepted 6/24/97; working
           Conditions                     group held initial meeting 9/10-
                                          11/97. Noise and Temperature
                                          task forces are active. Working
                                          group is drafting NPRM on
                                          sanitary facilities. Working
                                          group and task force to meet 4/
                                          99 to finalize recommendation
                                          for revised FRA noise standard.
     97-3 Event Recorders (data          Task accepted 6/24/97; working
           survivability, inspection,     group met 9/12/97. Task force
           etc.)                          established. Working group and
                                          task force actively meeting;
                                          draft proposed rule under
                                          review.
    97-4, Positive Train Control         Tasks accepted 9/30/97 and
    97-5,                                 assigned to single working
     97-6                                 group. Group for the first time
                                          11/17-11/18/97. Standards Task
                                          Force is working on proposed
                                          NPRM for positive train control
                                          performance standards. Data and
                                          Implementation Task Force is
                                          addressing issues such as
                                          assessment of costs and
                                          benefits, technical readiness;
                                          began review of draft report;
                                          remaining segments of report to
                                          be ready 3/99.
     97-7 Calculation of Damages for     Task accepted with modification 9/
           Reportable Train Accidents     30/97. Working group has been
                                          formed. Initial meeting, held 2/
                                          8/99.
    ------------------------------------------------------------------------

                       safety rules and reports--general
    Accident/Incident Reporting
        Summary.--The Rail Safety Enforcement and Review Act of 1992 barred
    FRA from adjusting the monetary threshold for reporting of train
    accident until the methodology was revised. In addition, FRA identified
    the need to comprehensively revise these regulations, which had not be
    revised since 1974.
        Deadline.--The report of the Committee of Conference on the
    Department of Transportation and Related Agencies Appropriation Act,
    1996, directed FRA to issue a final rule in this proceeding by 611196.
        History.--An NPRM was issued 8/19/94, followed by public hearings
    and written comment. A public regulatory conference was convened 1/30-
    2/3/95 in an effort to resolve outstanding issues. A notice of decision
    to issue a supplemental NPRM was published 7/3/95, but was withdrawn in
    a notice published on 1/24/96.
        Status.--Final rule was issued 5/30/96 and published 6/18/96 (61 FR
    30940). Stay requests were denied, and technical amendments were
    published 11/22/96 (61 FR 59368). A notice of availability of custom
    software was also published 11/22/96 (61 FR 59485). On 12/16/96, the
    Administrator signed final rule amendments, which were published 12/23/
    96 (61 FR 67477). Final rule became effective 1/1/97. Industry training
    partnerships have been executed.
        Next steps.--FRA offered RSAC a task on 9/30/97 to review the
    definition of events required to be reported as train accidents, as
    requested by the Committee on 6/24/97. By request of the Committee, the
    task was limited to determination of damages qualifying an event as a
    reportable train accident. A working group has been formed and held its
    initial meeting 2/8/99.
    Blue Signal Protection
        Summary.--On 8/16/93, FRA published a final rule permitting one or
    more utility employees to associate themselves with a train crew for
    the purpose of performing normal operating functions that require
    employees to go on, under or between rolling stock, without use of blue
    signal protection (which is ordinarily appropriate for mechanical
    duties). During the proceeding it was noted that rules for locomotive
    engineers working alone were not clearly defined. FRA published a final
    rule amendment governing single engineers working alone on 3/1/95, but
    granted a requested suspension of the amendment on 6/9/95 pending
    development of additional facts. Since that time, additional blue
    signal issues have continued to emerge, including application of the
    requirements to contractors performing the subject functions on
    railroad property.
        Status.--Awaits consultation with objecting parties to develop
    additional facts. On 10/31/96, the RSAC advised FRA that this project
    should not be proposed for early tasking, given conflicting demands on
    the resources of member organizations.
    Bridge Displacement Detection Systems (Report)
        Summary.--The Swift Rail Development Act of 1994 required FRA to
    submit a report on systems to detect bridge displacement of the type
    that caused the derailment of the Sunset Limited at Mobile, Alabama, 9/
    23/94.
        Statutory deadline.--6/2/96
        Status.--A technical evaluation report was published 6/23/94 and
    made available to the respective committees. The formal report to
    Congress is in preparation.
    Event Recorder Next-Generation Performance Standards
        Summary.--The National Transportation Safety Board has noted the
    loss of data from event recorders in several accidents due to fire,
    water and mechanical damage. In issuing final rules for event recorders
    which became effective 5/5/95, FRA noted the need to provide more
    refined technical standards. NTSB proposed performance standard for
    data survivability.
        Background.--Conducted an initial meeting of an informal working
    group comprised of AAR, RPI, and labor, and co-chaired by NTSB and FRA
    experts, on 12/7/95 to consider development of technical standards. At
    the RSAC meeting on 7/24-7/25/96, the AAR agreed to continue this
    inquiry, and on 11/1/6, AAR reported to the RSAC the status of work on
    proposed industry standards. On March 5, 1997, NTSB issued
    recommendations regarding testing and maintenance of event recorders as
    a result of finding in the investigation of the BNSF accident of 2/1/96
    at Cajon Pass, California. On 3/24/97, the RSAC indicated its desire to
    receive a task to consider NTSB recommendations with respect to crash
    survivability, testing and maintenance.
        Status.--RSAC accepted task 6/24/97. Event Recorder working group
    first met 9/12/97. A task force was established. Draft proposed rule
    under review. (Task No. 97-3).
    Florida Overland Express
        Summary.--FRA has received a petition for a rule of particular
    applicability for operations over a new high-speed railroad between
    Miami and Tampa via Orlando. The State of Florida had established a
    dedicated funding stream of $70 million per year towards creation of
    this new private/public partnership.
        Status.--Received petition for rule of particular applicability 2/
    18/97. FRA issued NPRM 12/12/97 (62 FR 65478). Comment period closed.
    FRA reviewed comments received and held a public hearing on 11/23/98 to
    discuss a variety of issues. The State of Florida withdrew its support
    and funding for this project 1/99, suspending all activity on
    development. FRA is not currently working on the final rule.
    Freight Car Safety Standards; Maintenance-of-Way Cars
        Summary.--Cars not in compliance with the Freight Car Safety
    Standards may be operated at track speed in revenue trains if they are
    company-owned, stenciled cars. FRA published an NPRM 3/10/94 to close
    this loophole. FRA requested the Association of American Railroads to
    amplify its comments by letter of 12/20/94.
        Status.--AAR response received 8/4/95 is under review. FRA offered
    a task to the RSAC to resolve final rule issues on 9/30/97, but
    objection from the AAR prevented the matter from coming to a vote. FRA
    will prepare final rule.
    Hours of Service Pilot Projects; Report to Congress
        Summary.--The Federal Railroad Safety Reauthorization Act of 1994
    (enacted with the Swift Rail Development Act) authorized FRA to approve
    one or more pilot projects to address fatigue and alertness issues
    among employees subject to the Hours of Service laws. Projects were
    required to have the support of the railroad and affected labor
    organizations.
        Statutory due date.--1/1/97
        Status.--FRA has encouraged submission of pilot projects and has
    worked with several railroads regarding innovative work and rest
    practices; however, only one formal applications for pilot projects has
    been submitted, and that petition did not involve fundamental reform of
    work and rest requirements. FRA's report on the status of work and rest
    issues in the industry, including the Fatigue Countermeasures
    Initiative, is in clearance within the Executive Branch.
    Locomotive Crashworthiness and Working Conditions
        Summary.--The Rail Safety Enforcement and Review Act of 1992
    required FRA to conduct a proceeding regarding locomotive
    crashworthiness and working conditions and to issue regulations or
    submit a report. Areas for consideration included structural means of
    preventing harm to crew members in collisions (collision posts,
    anticlimbers, etc.) and matters related to safety, health and
    productivity (e.g., noise, sanitation).
        Statutory deadline.--3/2/95
        Background.--FRA conducted research, outreach, and a survey of
    locomotive conditions and finalized a report to the Congress
    transmitted by letter of September 18, 1996. The report conveyed data
    and information developed by FRA to date, closed out those areas of
    investigation for which further action is not warranted, and defined
    issues that should be pursued further in concert with the industry
    parties, either for voluntary or regulatory action. On 10/31/96, the
    RSAC accepted a preliminary planning task. The Locomotive Crew Safety
    Planning Group met 1/23/97, and subsequent consultations led to
    preparation of task statements.
        Status.--RSAC accepted two tasks 6124197. (RSAC Task 97-1,
    locomotive crashworthiness; and Task 97-2, locomotive cab working
    conditions).
        Locomotive Crashworthiness Working Group met 9/8-9/97 and
    established a task force on engineering issues that has been active in
    reviewing collision history and design options. The Working Group has
    reviewed results of research and is drafting standards for freight,
    passenger and switching locomotives.
        Locomotive Cab Working Conditions Working Group met for the first
    time 9/10-11/97 and established task forces on noise and temperature,
    which have been working actively. The group has agreed to basic
    principles for a proposed rule on sanitary facilities and an NPRM is
    under development. The Working Group will meet with the Noise Task
    Force in April to finalize a revised noise standard to include a
    hearing conservation program for locomotive cab occupants.
    Locomotive Engineer Certification; Miscellaneous Revisions
        Summary.--The final rule for locomotive engineer certification
    became effective in 1991, but certain issues were left unresolved.
    Experience under the rule has raised additional issues. Examples of
    issues under review include the status of operators of specialized
    maintenance of way equipment and types of conduct for which
    Recertification is appropriate.
        Status.--An interim final rule amendment dealing with agency
    practice and procedure concerning engineer certification appeals was
    published 10/12/95. Issues related to procedures on the properties,
    offenses warranting Recertification, periods of Recertification,
    operation of specialized equipment, etc., are pending. The RSAC
    accepted this task on 10/31/96. The Working Group's initial meeting was
    held 1/7-1/9/97. Final meeting to review proposed rule language was
    held 10/7-10/9/97, and task force on hearing and vision met 10/21/97 to
    finalize language. The full committee voted 5/14/98 to recommend
    issuance of the NPRM forwarded by the Working Group. The NPRM was
    published 9/22/98 (63 FR 50625) (RSAC Task 96-6.) The Working Group met
    to resolve issues presented in public comments, and on 1/28/99 the RSAC
    voted to transmit recommendations regarding issues for which the
    Working Group had received comments. FRA is preparing final rule.
    Northeast Corridor (NEC) Signal & Train Control
        Summary.--Amtrak is planning operations to 150 mph on portions of
    the NEC and is implementing improvements to the automatic train control
    system that will provide positive stop and continuous speed control
    capabilities. FRA's Northeast Corridor Safety Committee (NCSC) met 9/
    20/94 and approved a set of performance criteria for the new system.
        Status.--On 1/30/97, Amtrak provided to FRA a draft system concept
    for the Advanced Civil Speed Enforcement System (ACSES), including
    conditions for operation on designated territories on the south and
    north ends of the NEC. Final details were received by FRA on 7/9/97. A
    notice of Proposed Order for the new signal and train control system
    authorizing speeds to 150 miles per hour (135 mph on the South End with
    only high-speed trains equipped under ``flanking protection'') was
    published 11/20/97 (62 FR 62097), and written comments were due by 12/
    22/97. As a result of requests from commenters, a public hearing was
    set for 2/17/98 (63 FR 3389), and the comment closing date was extended
    to 2/24/98. Final Order of Particular Applicability published 7/22/98
    (63 FR 39343); effective 8/21/98.
    NEC System Safety
        Summary.--Mixed passenger and freight operations at speeds to 150
    mph have not previously been attempted in this country. Through the
    Northeast Corridor Safety Committee (or successor), FRA intends to
    develop system safety criteria for this service territory, integrating
    existing safety measures and identifying any areas of material risk not
    previously addressed.
        Status.--Timing of project initiation to be determined. Will focus
    on enhancement and integration of individual railroad system safety
    plans to address complex NEC operations.
    Passenger Equipment Safety Standards
        Summary.--The Federal Railroad Safety Authorization Act of 1994
    (enacted 11/2/94) required FRA to issue initial passenger safety
    standards within 3 years and complete standards within 5 years. The
    agency was authorized to consult with industry parties outside the
    Federal Advisory Committee Act, making it possible to conduct an
    informal negotiated rulemaking.
        Statutory deadline.--11/2/97 (initial); 11/2/99 (final).
        Status.--An initial meeting of the Passenger Equipment Safety
    Working Group (passenger railroads, operating employee organizations,
    mechanical employee organizations, and representatives of rail
    passengers) was held on 6/7/95, and the group met regularly to develop
    an NPRM. Manufacturer/supplier representatives served as associate
    members. FRA prepared an ANPRM indicating the issues under review by
    the working group, which was published 6/17/96 (61 FR 30672). The
    working group held its final meeting on the NPRM 9/30-10/2/96, having
    reached consensus on a portion of the issues presented. An NPRM was
    published 9/23/97 (62 FR 49728). The public hearing was held 11/21/97
    (see 62 FR 55204; 10/23/97). Comments were due 11/24/97. Final working
    group meeting on the initial standards was held 12/15-12/16/97, and an
    additional meeting on intercity and high speed issues was held 1/6/98.
    The final rule is in clearance in the Executive Branch. Following
    issuance of the ``initial'' final rule, work will begin on additional
    passenger equipment safety standards.
    Passenger Train Emergency Preparedness
        Summary.--The Federal Railroad Safety Authorization Act of 1994
    required FRA to issue emergency preparedness standards for passenger
    service. Initial standards were required within 3 years and complete
    standards within 5 years. The agency was authorized to consult with
    industry parties outside the Federal Advisory Committee Act, making it
    possible to conduct an informal negotiated rulemaking.
        Statutory deadline.--11/2/97 (initial); 11/2/99 (final)
        Background.--An initial meeting of the working group for passenger
    train emergency, preparedness standards was held on 8/8/95. The group
    met 2/6-7/96 to develop elements of an NPRM and met jointly with the
    Passenger Equipment Safety Standards Working Group on 3/26/96 to
    consider related issues, including the implications of Emergency Order
    No. 20 and recommendations of the National Transportation Safety Board.
    The working group included representatives of passenger railroads,
    operating employee and dispatcher organizations, and rail passenger
    organizations, and an advisor from the National Transportation Safety
    Board. The working group approved draft rule text, which was
    incorporated in an NPRM forwarded for review and clearance. Changes
    requested during review and clearance were provided to the working
    group during the week of 12/16/96.
        Status.--The NPRM was published 2/24/97 (62 FR 8330), and a notice
    of public hearings was published 3/6/97 (62 FR 10248). Public hearings
    were held in Chicago on 4/4/97 and in New York City on 4/7/97. Written
    comments were due by 4/25/97. The working group met 8/28/97 and agreed
    in principle to revisions for inclusion in the final rule. The final
    rule was published 5/4/98 (63 FR 24630), and a correction notice was
    published 7/6/98 (63 FR 36376).
        NOTE: The following order is closely associated with the two prior
    entries:
    Emergency Order No. 20
        Summary.--This order deals with the safety of push/pull and
    electric multiple unit service. The order was issued 2/20/96 (61 FR
    6876; 2/22/96), and amended 2/29/96 (61 FR 8703; 3/5/96). Intercity and
    commuter passenger railroads were required to adopt operating rules
    providing for observance of reduced speed where delays are incurred in
    blocks between distant signals and signals at interlocking or
    controlled points. Marking of emergency exits and testing of emergency
    windows was required. Interim system safety plans were required to be
    filed.
        Status.--The order has been fully implemented. On 3/26/96, the
    Passenger Equipment Safety Working Group and the Emergency Preparedness
    Working Group met jointly to consider implementation issues and
    crossover issues with the two rulemaking proceedings and recent
    recommendations of the National Transportation Safety Board. The
    American Public Transit Association and it members have undertaken a
    number of actions in response to the emergency order, including
    development of comprehensive system safety plans. Codification,
    revision or termination of provisions will be considered during the
    second phase of passenger safety standards rulemaking.
    Positive Train Control
        Evaluation of needs and feasibility (implementation):
        Summary.--These tasks involve defining PTC functionalities,
    describing available technologies, evaluating costs and benefit of
    potential systems, and considering implementation opportunities and
    challenges, including demonstration and deployment. (RSAC Tasks 97-4
    and 97-5).
        Status.--Accepted by RSAC 9/30/97. Please see entry on RSAC
    summary.
        Performance standards for PTC systems:
        Summary.--Existing signal and train control regulations are built
    around relay-based controllers and traditional track circuits, but
    technology is rapidly advancing. This task requires revising various
    regulations, including 49 CFR Part 236, to address the safety
    implications of processor-based signal and train control technologies,
    including communication-based operating systems. The purpose of the
    effort is to encourage deployment of innovative technology by providing
    a predictable environment; (RSAC Task 97-6).
        Status.--Accepted by RSAC 9/30/97. Please see entry on RSAC
    summary.
        Progress Report to the Congress:
        Summary.--The Swift Rail Development Act of 1994 required FRA to
    submit a status report on the implementation of positive train control
    as a follow-up to the 7/94 Report entitled Railroad Communications and
    Train Control.
        Statutory deadline.--12/31/95
        Status.--FRA has provided testimony to the committees of
    jurisdiction reporting the status of efforts to promote implementation
    of positive train control. FRA plans to utilize the results of the RSAC
    PTC working group and task forces efforts to provide an appropriate
    status report.
    Power Brakes
        Summary.--The Rail Safety Enforcement and Review Act of 1992
    required FRA to revise the power brake regulations. The statute
    required adoption of requirements for 2-way end-of-train telemetry
    devices (EOTs) and ``standards for dynamic brakes.''
        Statutory deadlines.--Final rule by 12/31/93; 2-way EOTs to be used
    on trains operating greater than 30 miles per hour or in mountain grade
    territory to be equipped by 12/31/97.
        Status.--FRA published an NPRM 9/16/94 and conducted six days of
    public hearings ending 12/94. Due to strong objections to the NPRM,
    additional options were requested from passenger interests by 2/27/95
    and from freight interests by 4/3/95. Further action is as follows:
        (1) Passenger standards revision.--FRA requested the Passenger
    Equipment Safety Standards Working Group to incorporate new proposals
    for revisions of the power brake regulations in the NPRM for passenger
    equipment safety. Working group proceedings on the elements of the NPRM
    concluded 10/2/96 without full agreement on power brake elements. See
    Passenger Equipment Safety Standards for current status.
        (2) Freight standards revision.--On 4/1/96, the RSAC accepted the
    task of preparing a second NPRM. The working group initiated its
    efforts in May, and on 10/31/96 the RSAC extended the deadline for a
    final report until 1/15/97. At the working group meeting 12/4/96, an
    impasse was declared, and subsequent efforts to revive discussions were
    not successful. On May 29, FRA notified the working group by letter
    that the task will be formally terminated. FRA withdrew task at 6/24/97
    full Committee meeting. FRA prepared second NPRM reflective of what was
    learned through the collaborative process. NPRM published 9/9/98 (63 FR
    48294). (RSAC Task 96-1--terminated). Public hearings were conducted on
    10/26/98 and 11/13/98 and a technical conference was held on 11/23-24/
    98. Final date for submission of comments extended until 3/1/99.
        (3) Two-way end-of-train devices.--FRA published notice on 2/21/96
    that this issue would be separated from the balance of the freight
    issues and expedited for completion of a final rule. A public
    regulatory conference was convened 3/5/96 to explore remaining issues,
    and written comments were due 4/15/96. (Railroads also agreed to an
    expedited schedule that will ensure application of this technology by
    12/15/96 on 2 percent or greater grades and by 7/1/97 for other
    trains.) The final rule was published 1/2/97 (62 FR 278), and it became
    effective 7/1/97.
        FRA received two petitions for reconsideration (``local train''
    definition and implementation date for smaller railroads). A notice
    denying the request to delete the tonnage restriction for local trains
    and granting extension of the compliance date for railroads with fewer
    than two million work hours was published 6/4/97 (62 FR 30461). On 11/
    4/97, held technical conference on petition of American Short Line
    Railroad Association regarding operation of very light trains over
    grade territory (see 62 FR 52370, 10/7/97); subsequently granted
    limited relief and received petition for reconsideration of conditions,
    which is now under review.
        On 1/16/98, FRA published NPRM to clarify application of two-way
    EOT requirements to intercity passenger trains with express equipment
    at the rear (63 FR 195). Final rule was issued 5/1/98 (63 FR 24130).
        NOTE: On 2/6/96, the Administrator issued Emergency Order No. 18,
    requiring use by the BNSF of 2-way EOTs or equivalent protection for
    heavy grade operations over the Cajon Pass (61 FR 505; 219196).
    Railroad Communications (including Radio Standards and Procedures)
        Summary.--In submitting the required report to the Congress on
    Railroad Communications and Train Control on 7/13/94, FRA noted the
    need to revise existing Federal standards for radio communications in
    concert with railroads and employee representatives.
        Status.--On 4/1/96, the RSAC accepted the task of preparing an
    NPRM, including consideration of communication capabilities required in
    railroad operations. The working group presented a consensus NPRM to
    the full Committee on 3/24/97, and the Committee voted to recommend
    issuance of the NPRM to the Administrator in balloting that ended 4/14/
    97. NPRM issued 6/11/97 and published 6/26/97 (62 FR 34544). Comment
    period closed 8/25/97. Final rule published 9/4/98 (63 FR 47182). (RSAC
    Task 96-3).
    Regulatory Reinvention
        Summary.--In response to the President's call for regulatory
    review, elimination and reinvention, FRA took several actions to repeal
    obsolete regulations and simplify agency processes that affect external
    customers. Major elements of this effort are included in regulatory
    revision efforts described under other headings.
        Status.--Interim final rule amendments reducing frequency of
    reporting regarding signal and train control systems (49 CFR Part 233),
    simplifying review requirements for certain modifications of signal
    systems (49 CFR Part 235), and making conforming changes regarding
    inspection of ATC/ATS/ACS (49 CFR Part 236) published 7/1/96 (61 FR
    33871). These changes should be finalized early in 1999. FRA is
    considering inclusion of a legislative proposal to permit flexibility
    for railroads to make accident/incident reports less frequently than
    monthly and to eliminate outdated requirements for notarization of
    reports in the Administration's proposed 1999 rail safety
    reauthorization legislation.
    Roadway Worker Safety
        Summary.--In requiring the review of the Track Safety Standards,
    the Rail Safety Enforcement and Review Act of 1992 required FRA to
    evaluate the safety of maintenance of way employees. In addition, the
    Brotherhood of Maintenance of Way Employees and the Brotherhood of
    Railroad Signalmen petitioned FRA to issue ``on-track safety'' rules.
        Background.--FRA published a notice 8/17/94 initiating a formal
    negotiated rulemaking. The negotiated rulemaking committee reported a
    statement of principles 5/17/95 and completed an NPRM draft 8/95. NPRM
    published 3/14/96 (61 FR 10528); initial written comments were due 5/
    13/96. Public hearing held 7/11/96.
        Status.--The final rule was published 12/16/96 (61 FR 65959);
    effective 1/15/97. Petitions for reconsideration were denied in a
    notice published 4/21/97. A consolidated hearing on waiver petitions
    was held 5/22/97, and written comments were due by 619197. FRA is
    issuing decisions on individual petitions as investigations and
    analysis were completed.
    Safety Integration Plans
        Summary.--In response to the proposed acquisition of Conrail by
    Norfolk Southern and CSX Transportation, FRA has suggested, and the
    Surface Transportation Board has required, that the petitioners file
    with the Board of Safety Integration Plans (SIPs). In coordination with
    the Board, FRA proposed regulations requiring preparation and FRA
    review of SIPs in connection with future railroad mergers.
        Status.--FRA and the STB jointly issued an NPRM 12/31/98 (63 FR
    72225) to institutionalize the SIP process to ensure that proper safety
    planning and safety investments are undertaken during a merger. The
    proposed rule spells out the types of transactions that will require
    SIPs and outlines the roles of FRA and the STB in overseeing the SIP
    process.
    Track Motor Vehicle and Roadway Equipment Safety
        Summary.--A 1990 petition to FRA from the Brotherhood of
    Maintenance of Way Employees asked FRA, among other requests, to
    propose standards for MOW equipment related to the safety of persons
    riding or operating that equipment. FRA elected not to pursue that
    issue at that time given other pending workload. However, this issue
    was renewed during the deliberations of the RSAC Track Safety Standards
    Working Group.
        Status.--On 10/31/96, the RSAC accepted a task of drafting proposed
    rules for the safety of this equipment. A task force of the Track
    Safety Standards Working Group was formed to address this issue. The
    task force has met several times. At the meeting on 10/28-10/29/97, the
    task force reached a consensus agreement in principle on what should be
    included in a proposed rule. The task force has identified several
    remaining issues to be resolved. (RSAC Task 96-7).
    Tourist Railroad Report /Review of Regulatory Applicability
        Summary.--The Swift Rail Development Act of 1994 required FRA to
    submit a report to the Congress regarding FRA's actions to recognize
    the unique factors associated with these generally small passenger
    operations that often utilize historic equipment.
        Statutory deadline.--9/30/95
        Status.--Report submitted to the Congress 6/10/96. The RSAC
    authorized formation of a Tourist and Historic Railroads Working Group
    4/1/96. The working group held its initial meeting 6/17-6/18/96 and has
    been monitoring completion of the steam task. (RSAC Task 96-4).
    Track Safes Standards
        Summary.--The Rail Safety Enforcement and Review Act of 1992
    required FRA to revise the Track Safety Standards, taking into
    consideration, among other things, the ``excepted track'' provision.
    Other prominent issues include updating the standards to take advantage
    of research findings for internal rail flaw detection and gage
    restraint measurement. FRA also proposes to adopt track standards for
    high-speed service.
        Statutory deadline.--Final rule by 9/1/95.
        Background.--FRA published an ANPRM 11/6/92 and conducted workshops
    in the period 1/93-3/93. The Railroad Safety Advisory Committee
    accepted task of preparing an (NPRM) on 4/2/96. The Track Safety
    Standards Working Group reported a draft NPRM to the full committee on
    10/31/96. In balloting that concluded 11/21/96, RSAC voted to accept
    the working group report and recommend issuance of the NPRM.
        Status.--NPRM signed 6/19/97 and published 7/3/97 (62 FR 36138).
    Hearing held 9/4/97; comment period closed 9/15/97. Additional comment
    was invited regarding certain high-speed track geometry issues by
    notice of 12/12/97 (62 FR 65401) not later than 12/22/97. Final rule
    published 6/22/98 (63 FR 33991); effective 9/21/98. Task group
    continues to consider issues related to the Gage Restraint Measurement
    System. (RSAC Task 96-2).
    Steam Locomotives
        Summary.--A committee of steam locomotive experts from tourist and
    historic railroads has sought a partnership with FRA to revise the
    steam locomotive regulations. Proposed revisions would relieve
    regulatory burdens while updating and strengthening the technical
    requirements.
        Status.--Revision of the Steam Locomotive Inspection regulations
    was tasked to the RSAC on 7/24/96. A task force of the Tourist &
    Historic Railroads Working Group is actively working toward
    finalization of a final rule. NPRM rule text agreed upon within the
    task force was approved by the Tourist and Historic Working Group on 9/
    3/97 and provided to the RSAC on 9/30/97. The full RSAC approved the
    consensus NPRM by mail ballot 2/17/98. NPRM published 9/25/98 (63 FR
    51404). (RSAC Task 96-5). Public hearing held 2/4/99. The Task Force
    will review comments received and may make recommendations for the
    final rule.
    Small Railroads; Interim Policy Statement
        Summary.--The Small Business Regulatory Enforcement Fairness Act of
    1996 amended the Regulatory Flexibility Act and required, among other
    things, that each agency establish small business communication and
    enforcement programs.
        Statutory deadline.--3/29/97
        Status.--Interim policy statement published 8/11/97 (62 FR 43024).
    FRA is reviewing comments received and developing a final policy
    statement.
                          highway-rail crossing safety
    Audible Warnings (Whistle Bans)
        Summary.--The Swift Rail Development Act of 1994 required FRA to
    issue regulations providing for the use of train horns at highway-rail
    crossings.
        Statutory deadline,--Final rule 11/2/96 (most hazardous crossings),
    11/2/98 (other crossings).
        Background.--This legislative mandate anticipated FRA follow up to
    Emergency Order No. 15, which addressed local whistle bans on the
    Florida East Coast Railroad between Jacksonville and Miami. FRA
    released a report on the national impacts of local whistle bans on 6/1/
    95 and has conducted an extensive program of public outreach to make
    communities aware of the forthcoming rulemaking and to seek information
    on supplementary safety measures that would support allowance of quiet
    zones in communities sensitive to train horn noise. Contacts have been
    made with 160+ jurisdictions known to have whistle bans in place. FRA
    representatives have met with or addressed forums of state and local
    officials and community groups. Met with AAR/BRS/AAHSTO/FHWA 12/13/95
    to address technical specifications for 4-quadrant gates.
        Numerous congressional offices encouraged FRA to continue outreach
    and data collection. FRA advised the Congress that the deadline for an
    initial final rule would not be met as a result. Immediately prior to
    adjournment, the 104th Congress enacted the FAA reauthorization bill
    (Public Law 104-264; 10/9/96), which included amendments to the
    original whistle ban legislation. In general, the legislation affirms
    the latitude available to the Secretary to provide for phase-in of
    regulations and focus on safety results.
        Status.--Missing data on Chicago-area commuter lines has been added
    to the national study. FRA completing NPRM for review and clearance
    within the Executive Branch. FRA preparing Draft Environmental Impact
    Statement (EIS) for the proposed regulation.
    Grade Crossing Signals (Inspection, Testing and Maintenance)
        Summary.--FRA issued a final rule for inspection, testing and
    maintenance of automated warning devices 9/30/94, and the rule went
    into effect 1/1/95 (49 CFR Part 234). During the initial year, FRA
    worked with railroads and signal employees to disseminate information,
    conduct training, and identify any areas of ambiguity or weakness in
    the standards. At a technical resolution committee (TRC) meeting during
    the week of 3/13/95 that included participation by railroads, the
    Brotherhood of Railroad Signalmen, and States, several issues were
    identified that require clarification or refinement. An interim manual
    dated 4/14/95 incorporated the findings of the TRC.
        Status.--Interim final rule amendments published 6/20/96 (61 FR
    31802). FRA is preparing a notice to make the changes final.
    Locomotive Visibility /Auxiliary Alerting Lights
        Summary.--In 1991, FRA initiated a new phase of research on
    locomotive conspicuity in relation to safety at highway-rail crossings.
    The Amtrak Authorization and development Act of 1992 mandated that the
    research be completed and that a regulation be issued to apply alerting
    lights to locomotives.
        Statutory deadline.--Final rule by 6/30/95.
        Background.--FRA published a ``grandfathering rule'' on 2/3/93 and
    amendments on 5/13/94. After the research was substantially completed
    in early summer of 1995, FRA briefed the industry parties on the
    results, discussed options for regulatory action, and elicited
    additional information concerning railroads' progress in equipping
    their fleets. A Notice of Proposed Rulemaking was published on 8/25/95.
    The AAR and the ASLRA requested a technical conference to perfect the
    rule for final issuance, and that conference was held 11/28/95. Written
    comments were due by 12/12/95.
        Status.--Final rule was published 3/6/96 (61 FR 31802). Equipping
    of locomotives used as lead units at speeds exceeding 20 mph was
    required to be completed by 12/31/97, as provided by law.
    Private Highway-Rail Grade Crossings
        Summary.--The Secretary's Action Plan for Grade Crossing Safety (6/
    94) commits FRA to conducting a special safety inquiry on private
    crossings.
        Status.--Conducted workshop on possible guidelines 7/93; timing of
    further action to be determined.
    Selection of Grade Crossing Automated Warning Devices
        Summary.--FRA published a Notice of Proposed Rulemaking 3/2/95 (60
    FR 11649) and received over 3,000 written comments through 6/14/95.
        Status.--Termination notice published 8/8/97 (62 FR 42733).
                              hazardous materials
    New Directions for Rail Hazardous Materials Safety
        Summary.--FRA and RSPA have recently completed the two major
    pending rulemakings addressing hazardous materials tank car safety
    (crashworthiness and tank retests). With completion of these tasks, it
    is now possible to turn attention to recommendations of the
    Transportation Research Board regarding the tank car design and
    construction process. In order to further this work, FRA is joining
    with its public and private sector partners to define and prioritize
    short and long-range research programs, identify needs for rulemaking,
    and assist in development of improved industry standards.
        Status.--A public workshop was conducted 2/13/96-2/14/96 in
    Houston, with participation by labor, railroads, tank car owners, and
    shippers. FRA is seeking means of advancing public/private partnerships
    for North American tank car safety.
    Tank Car Crashworthiness and Retest
        Summary.--Research and Special Program Administration Dockets HM-
    175A and HM-201 addressed further improvements in tank car
    crashworthiness, and adoption of advanced non-destructive testing to
    improve tank retest procedures, respectively.
        Status.--Final rules published 9/21/95 (60 FR 49048).
    Train Placement
        Summary.--FRA is evaluating whether to recommend that the Research
    and Special Programs Administration publish proposed amendments to the
    in-train placement requirements for handling rail cars transporting
    hazardous materials. FRA is reviewing accident/incident data to
    determine whether the current non-hazardous materials buffer car
    requirements are still necessary and whether (as recommended by the
    National Transportation Safety Board) a buffer car should be required
    at the rear of each train.
        Status.--FRA is studying the feasibility of a proposed amendment.
                 other safety projects and partnership efforts
    Bridge Structural Safety
        Summary.--Following a survey of bridge conditions and railroad
    inspection practices, FRA determined that regulatory action is not
    necessary, but that FRA should continue to exercise an oversight role
    regarding bridge structural safety programs. FRA issued an interim
    statement of policy 4/27/95, with comments due 6/26/95.
        Status.--Comments support continued FRA partnership role. Final
    statement of policy is in review and clearance within the Executive
    Branch.
        Note: On 2/12/96, the Administrator issued Emergency Order No. 19,
    which removed from service a bridge on the Tonawanda Island Railroad in
    New York State pending necessary structural repairs (61 FR 628; 2/16/
    96).
    Discolored Wheels
        FRA has granted a master waiver of the Freight Car Safety Standards
    permitting continued use of discolored heat-treated, curved plate
    wheels, which have superior resistance to thermal abuse. Data gathered
    under the waiver, together with results of analysis already provided,
    may support a permanent change in the regulation.
    Hours of Service Electronic Recordkeeping
        Current hours of service record keeping uses paper and ink, but a
    major railroad has been given relief to keep electronic records. Other
    railroads have expressed interest, and similar waivers will involve
    similar issues. At FRA's invitation, the AAR submitted a petition
    seeking a master waiver for use of electronic record keeping. However,
    individual railroads have elected to proceed separately, and FRA is
    processing each on its merits. Permanent amendments to the
    recordkeeping and reporting requirements may be proposed. FRA is
    assisting railroads in developing electronic systems by providing
    guidance materials.
    Remote Control Locomotives
        Current regulations contemplate operation of a locomotive
    exclusively from within the cab, and provision for the safety of the
    operation is made within that context. FRA has previously proposed a
    test program to gather more data on various types of operations. FRA
    has also held an informal safety inquiry regarding use of one-person
    crews and remote control locomotives on the Wisconsin Central (see 61
    FR 58736; 11/18/96). Further action expected.
    TOFC/COFC Securement
        Summary.--Following a serious accident at Smithfield, N.C., on 5/
    16/94, FRA formed a partnership with major railroads and labor
    organizations to evaluate and improve securement of intermodal loads. A
    report to the Secretary dated 9/15/94 documented the initial results of
    that effort.
        Status.--FRA held a meeting on 2/22/95 that focused on an item-by-
    item discussion of the status and progress made within the industry
    with respect to the seven recommendations identified in the report to
    the Secretary. The AAR has established an Intermodal Equipment Handling
    Task Force that has developed a number of training aids. A follow-up
    TOFC/COFC loading and securement safety survey was conducted during
    1996. FRA conducted additional loading and securement field evaluations
    during July-August 1997. Joint training activity brought together
    railroads, TTX and FRA to maintain strong emphasis on compliance with
    AAR loading requirements. FRA continues to monitor securement of
    trailers and trucks in transportation and to work on this issue through
    SACP's on individual railroads.
    Train Dispatcher Training
        FRA submitted a report to the Congress on 1/5/95 regarding the
    functions of contemporary train dispatching offices. The report noted
    that traditional pools of candidates for recruitment of train
    dispatchers are no longer adequate to the need. In partnership with the
    American Train Dispatchers Department/BLE (ATDD), FRA identified the
    need for a model train dispatcher training program.
        Experts from Amtrak, the ATDD, the Burlington Northern/Santa Fe
    Railroad and FRA developed a list of elements for dispatcher training
    programs. Required competencies and training program elements have been
    abstracted front this effort for a model program. The RSAC was be
    briefed on this effort on 3/24/97, with participants in the training
    task force indicating reluctance to attempt a ``one size fits all''
    regulatory approach. Development of curricula continues with FRA
    support. Initial products of this effort were presented by an FRA
    contractor.
    Wisconsin Central R.R.; Informal Safety Inquiry
        Summary.--FRA sought to gather information regarding plans by the
    railroad to expand use of one-person crews and remote control
    operations.
        Status.--A notice of special safety inquiry was published 11/18/96
    (61 FR 58736). A public hearing was held 12/4-12/5/96 in Appleton,
    Wisconsin. Written submissions were requested by 12/2/96. FRA entered
    into an agreement with the railroad providing for a moratorium on new
    single person crew and remote control operations, together with other
    undertakings related to compliance with FRA regulations. The railroad
    has completed its responsibilities under the agreement.
                       hazmat accidents/incidents in 1998
        Question. Please chronicle all major hazmat-related accidents/
    incidents during calendar year 1998, noting date, location, railroad,
    type of hazmat, any fatalities, injuries, evacuations or other
    complications, and the estimated cost of damage and loss for each.
    Please also summarize the probable cause of each accident.
        Answer. The following major hazmat-related accidents/incidents
    occurred during calendar year 1998 (January 1-December 31, 1998):
        Date: March 31, 1998
        Location: Lynchburg, VA
        Railroad: Norfolk Southern
        Type of hazmat: Acetone
        Fatalities/injuries: None
        Evacuations: 100 residents
        Other complications: None
        Estimated cost: $1,560,319
        Probable cause: Failure of the yard crew members to properly secure
    the cars being left in the North No. 2 yard with a sufficient number of
    hand brakes being applied. A contributing factor was failure of the
    brakeman to properly position the angle cock on the 18th car in a train
    of 83 cars that would have allowed the air brakes to apply in emergency
    when the train line was separated.

        Date: April 19, 1998
        Location: Barnhart OR
        Railroad: Burlington Northern Santa Fe
        Type of hazmat: Toluene
        Fatalities/injuries: None
        Evacuations: None
        Other complications: None
        Estimated cost: $876,716
        Probable cause: Wheel lift due to a load shift in an improperly
    secured box car (no blocking and bracing).

        Date: June 20, 1998
        Location: Guyandotte, WV
        Railroad: CSX Transportation
        Type of hazmat: Formaldehyde
        Fatalities/injuries: Two local residents treated and released
        Evacuations: 100 families
        Other complications: Derailment ruptured a natural gas line,
    resulting in a leak
        Estimated cost: $640,492
        Probable cause: Undetermined

        Date: June 26, 1998
        Location: Niota, IL
        Railroad: Burlington Northern Santa Fe
        Type of hazmat: Various cartons of sodium hydroxide solution,
    paint, nitric acid and toluene
        Fatalities/injuries: None
        Evacuations: 250 residents
        Other complications: None
        Estimated cost: $1,555,080
        Probable cause: Mishandling of the West dual control power switch
    on number three crossover at East Fort Madison. Contributing factor,
    loss of signal control at CP East Fort Madison.

        Date: August 16, 1998
        Location: Panhandle, TX
        Railroad: Burlington Northern Santa Fe
        Type of hazmat: Sodium Hydroxide
        Fatalities/injuries: Five railroad employees--four were treated and
    released, the fifth employee was hospitalized for serious burns on his
    head and back.
        Evacuations: None
        Other complications: None
        Estimated cost: $158,400
        Probable cause: Failure to control movement, could not stop short
    of obstruction in restricted speed operations.

        Date: September 2, 1998
        Location: Crisfield, KS
        Railroad: Burlington Northern Santa Fe
        Type of hazmat: Mixed containers of nitric acid, flammable liquids
    NOS, and Resorcinol
        Fatalities/injuries: None
        Evacuations: 50 residents
        Other complications: None
        Estimated cost: $1,268,500
        Probable cause: Car No. DTTX 72318, a five unit articulated car
    (intermodal) buckled.

        Date: October 5, 1998
        Location: Ridgeway, PA
        Railroad: Buffalo and Pittsburgh
        Type of hazmat: Sodium hydroxide and sulfuric acid
        Fatalities/injuries: None
        Evacuations: 100-150 residents
        Other complications: None
        Estimated cost: $530,000
        Probable cause: Undetermined--rail carrier reported as irregular
    cross level at joints.

        Date: November 5, 1998
        Location: Henderson, WV
        Railroad: CSX Transportation
        Type of hazmat: Hydrochloric acid, anhydrous ammonia, residue
    propylene oxide
        Fatalities/injuries: None
        Evacuations: 6-10 employees of KRT Barge Company. Local authorities
    put a ``shelter-in-place'' order for a 2-mile radius, which means
    residents had to remain in their homes until the order was lifted.
        Other complications: None
        Estimated cost: $284,000
        Probable cause: Broken rail
                 improvements to the hazmat compliance program
        Question. What improvements have been made to the hazmat compliance
    program since last year?
        Answer. FRA has implemented many new policy and procedures to
    enhance its hazmat compliance program. FRA implemented the Safety
    Compliance Oversight Plan for Rail Transportation of High-Level
    Radioactive Waste and Spent Fuel (SCOP). SCOP updates and enhances
    FRA's pre-existing policy and effectively adds an additional safety
    compliance oversight tier that compliments FRA's routine inspections. A
    high degree of planning and coordination is undertaken by the shippers,
    carriers, and Federal, State and local agencies on rail shipments of
    spent nuclear fuel and high-level radioactive waste to ensure that the
    movements are conducted safely and securely and the SCOP contributes to
    that planning and coordination process.
        FRA trained all Federal and State (certified) hazardous materials
    inspectors on the new Federal requirements for tank car facilities,
    requiring each facility to have its quality assurance plan in place by
    July 1, 1998.
        FRA completed a SACP program, with Pollynet, on systemic safety
    issues. The SACP was initiated by FRA, and joined by the Federal
    Highway Administration and U.S. Coast Guard. This is the first ONE DOT
    project that addresses systemic problems involving a shipper of
    intermodal (highway, rail and water) hazardous materials.
        FRA formed an inter-industry task force to draft and recommend an
    alternate inspection program to facilitate the implementation of HM-
    201, Tank Car Qualification procedures. This lead to the issuance of
    two exemptions (DOT-E 11941 and 12095).
        FRA initiated a multi-modal hazardous materials SACP on the
    Burlington Northern Railroad, with major joint inspections in the
    Chicago area (Willow Springs; Corwith and Cicero). The inspections
    involved other DOT modal administrations (Research and Special Programs
    Administration, Federal Highway Administration, U.S. Coast Guard, and
    Office of the Inspector General) and State officials.
        FRA issued an updated Hazardous Materials Enforcement Manual, along
    with revised Technical Bulletins to Federal and State hazardous
    materials inspectors. The manual along with technical bulletins will
    also be added to FRA's web page.
        FRA initiated a North American task force with Canada, Mexico, the
    United States and industry to consolidate and codify government and
    industry regulations pertaining to the design, construction,
    maintenance, and use of tank cars for hazardous materials. All three
    countries agreed to develop standard-related measures, based on the
    United Nations Model Regulations on the Transportation of Dangerous
    Goods.
                           inspector trainee program
        Question. Please provide information that would be useful in
    assessing the accomplishments and costs of the inspector trainee
    program. Please indicate the retention rate for all individuals who
    have entered this program since its inception. How many individuals who
    entered the inspector trainee program now serve as FRA inspectors in
    the field. How much is requested to support the program in the fiscal
    year 2000 budget? Please compare that amount with previous comparable
    expenses during each of the preceding three years.
        Answer. Employees completing the trainee program have added much
    needed diversity to the organization, both in minority status and in
    specialized knowledge and skills. These skills include expertise in
    engineering, psychology and education psychology, and computer
    software. The trainees are often called upon to lead or assist in
    special projects such as inspector task analysis, evaluation of
    specialized software, collaboration with Canadian Government
    authorities, and assessments of railroad safety issues. Several of the
    trainees, who have completed the program, assisted FRA in changing the
    training process for trainees, resulting in a more structured and
    balanced program with higher levels of satisfaction for both trainees
    and supervisors.
        Fifty-six employees have entered the trainee program since its
    inception. Twenty employees have left the agency, resulting in a 65
    percent retention rate. Of the 36 trainees still on board, 24 are GS-12
    inspectors, seven are below grade GS-12, and five have been promoted to
    the GS-13 level.
        The FRA requested $588,000 in fiscal year 2000 to support eight (8)
    trainees anticipated to be in the program. Previous budget requests
    included $1,206,000 for fiscal year 1999, $1,191,000 for fiscal year
    1998, and $1,845,000 for fiscal year 1997.
                           inspector training funding
        Question. Please prepare a chart of your training budget for each
    of the last four fiscal years (including the fiscal year 2000 request),
    specifying separately the amounts spent on Federal and State
    inspectors.
        Answer.

                           INSPECTOR TRAINING FUNDING
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                                   Fiscal year
                                   -----------------------------------------
                                      1997      1998       1999       2000
                                     Actual    Actual    Estimate   Estimate
    ------------------------------------------------------------------------
    State Inspectors..............       240       247        260        267
    Federal Inspectors............     1,484     1,372      1,520      1,575
                                   -----------------------------------------
          Total Budget............     1,724     1,619      1,780      1,842
    ------------------------------------------------------------------------

                                funding of atip
        Question. Please provide a detailed break out of the amount
    requested for the ATIP for fiscal year 2000. Is FRA's effort to replace
    the T-10 track geometry inspection vehicle now complete? If not, please
    provide a detailed cost schedule for the completion of this project.
        Answer. FRA has included $3.1 million in its fiscal year 2000
    budget for ATIP. Funding supports operations ($2.8 million) and other
    related expenses such as railroad support charge for transporting the
    T-10 over the road, and maintenance ($300 thousand). The new ATIP
    vehicle is in production and will be available by summer 2000.
    Production was delayed due to the refinement of the design
    specifications.
                reductions in grade crossing accident/fatalities
        Question. In 1994, DOT issued the Rail-Highway Crossing Safety
    Action Plan, with an established 10-year goal to reduce the number of
    rail-highway grade crossing accidents and fatalities by 50 percent.
    Since the implementation of this multi-modal, coordinated plan, what
    have been the actual and the percentage decreases of crossing accidents
    and fatalities nationally? Please display these data in a state-by-
    state breakout table.
        Answer. Preliminary data for 1998 indicates that there were 1,399
    fewer collisions and 200 fewer deaths at highway-rail crossings as
    compared to 1993. These reflect a reduction of 29 and 32 percent
    respectively.

    ----------------------------------------------------------------------------------------------------------------
                                                                          Collisions                 Deaths
                                                                  --------------------------------------------------
                                State                                              Percent                   Percent
                                                                    1993    1998    change   1993    1998    change
    ----------------------------------------------------------------------------------------------------------------
    AL...........................................................     182     146      -20      25      11       -56
    AK...........................................................      11       4      -64  ......  ......  ........
    AZ...........................................................      31      35       13       2       4       100
    AR...........................................................     152     116      -24      22      24         9
    CA...........................................................     191     187       -2      40      32       -20
    CO...........................................................      64      32      -50       9       4       -56
    CT...........................................................      12      10      -17       1       1  ........
    DE...........................................................      11       5      -55  ......  ......  ........
    DC...........................................................  ......       1  .......  ......  ......  ........
    FL...........................................................     113      74      -35      21       5       -76
    GA...........................................................     156     140      -10      19      13       -32
    ID...........................................................      48      27      -44       6       4       -33
    IL...........................................................     303     198      -35      55      30       -45
    IN...........................................................     299     195      -35      36      25       -31
    IA...........................................................     137     104      -24      15       3       -80
    KS...........................................................     106      70      -34       5       9        80
    KY...........................................................      82      73      -11       7       5       -29
    LA...........................................................     224     214       -4      26      25        -4
    ME...........................................................       9       8      -11  ......  ......  ........
    MD...........................................................      14      15        7  ......  ......  ........
    MA...........................................................      12       4      -67  ......       1  ........
    MI...........................................................     171     104      -39      16      11       -31
    MN...........................................................     133     114      -14      17      13       -24
    MS...........................................................      13     133        2      14      24        71
    MO...........................................................     115      86      -25      13      13  ........
    MT...........................................................      36      27      -25       9       4       -56
    NE...........................................................      91      59      -35      11      11  ........
    NV...........................................................       4       4  .......       2       1       -50
    NH...........................................................       3       2      -33  ......  ......  ........
    NJ...........................................................      51      16      -69       4       5        25
    NM...........................................................      25      17      -32       4       5        25
    NY...........................................................      48      29      -40      10       2       -80
    NC...........................................................     168     109      -35      16      15        -6
    ND...........................................................      36      23      -36       7       6       -14
    OH...........................................................     277     154      -44      45      15       -67
    OK...........................................................     127      66      -48      13      12        -8
    OR...........................................................      52      44      -15       7       5       -29
    PA...........................................................     113      63      -44      11       1       -91
    RI...........................................................  ......       1  .......  ......  ......  ........
    SC...........................................................      86      78       -9      23       5       -78
    SD...........................................................      32      15      -53  ......  ......  ........
    TN...........................................................     108     103       -5       9      14        56
    TX...........................................................     506     320      -37      75      45       -40
    UT...........................................................      31      23      -26       7       5       -29
    VT...........................................................       7       4      -43       1  ......      -100
    VA...........................................................      94      51      -46       6       2       -67
    WA...........................................................      75      59      -21       5       6        20
    WV...........................................................      41      22      -46       2       2  ........
    WI...........................................................     164     104      -37       9       7       -22
    WY...........................................................      11       5      -55       1       1  ........
                                                                  --------------------------------------------------
          Total..................................................   4,892   3,493      -29     626     426       -32
    ----------------------------------------------------------------------------------------------------------------

                status of 50 percent reduction in grade crossing
        Question. Will the Department's efforts in implementing the action
    plan be adequate to meet the goal of reducing grade crossing accidents
    and fatalities by 50 percent by 2004? If not, what new strategies might
    be implemented and how could the fiscal year 2000 budget assist in
    those efforts?
        Answer. The Department is on target, possibly somewhat ahead of the
    curve, for meeting the goal of a 50 percent reduction by 2004. However,
    the Department and FRA must continue and enhance its efforts in order
    to ensure that the target is met. The fiscal year 2000 budget supports
    this goal and includes a request for an additional position to support
    FRA's grade crossing program, $15 million to address grade crossing in
    the high-speed rail corridors, and continued funding grade crossing
    projects in FRA's safety, R&D and Next Generation Programs. A total of
    $23.1 million is included in FRA's fiscal year 2000 budget for grade
    crossing. This does not include the $5.25 million in Section 104(d)(2)
    funds allocated by FHWA or other grade crossing related funds in DOT's
    budget.
                      status of grade crossing action plan
        Question. Have any of the 52 crossing safety proposals in the Rail-
    Highway Crossing Safety Action Plan not yet been implemented? If so,
    please discuss the progress made and the remaining challenges.
        Answer. Nineteen of the 55 original initiatives are still in
    progress. Available staff time is a primary limitation/challenge in
    implementing the Safety Action Plan. However, the additional position
    requested in the fiscal year 2000 budget would significantly help the
    grade crossing initiative. Projects still on-going include:
    Increased Enforcement of Traffic Laws at Crossings:
        Commercial Driver's License.--FHWA and American Association of
    Motor Vehicle Administrators (AAMVA) sought to elevate crossing
    violations to ``serious'' for commercial drivers license (CDL) holders
    as required by 1995 legislation. An NPRM was issued by FHWA in March
    1998. The comment period for the proposed rule closed in May 1998.
    Status: In progress.
        Compilation of State Laws and Regulations on Highway-Rail
    Crossing.--The FRA updated the 1983 edition in August 1995. (A 1999
    edition is being developed and once published, will be available on the
    Internet.) Status: In progress.
        Safety Inquiry.--The FRA will hold an informal safety inquiry about
    standing rail equipment near grade crossings. Inspection, testing and
    maintenance (ITM) regulations prescribed best practices where signals
    exist. Status: In progress.
    Rail Corridor Crossing Safety Improvement Reviews:
        Responsibilities for Selection and Installation.--FRA and FHWA have
    sought to clarify project responsibilities between highway and railroad
    authorities. Regulatory action was terminated in August 1997. DOT
    Committee is considering standardized national guidelines. Status: In
    progress.
        Crossing Consolidation and Closure Case Studies.--FRA set forth
    guidelines and strategies based upon case studies in July 1994
    publication, ``Highway-Rail Grade Crossing. A Guide to Consolidation
    and Closure.'' American Association of State Highway Transportation
    Officials (AASHTO) published a report in March 1995. Status: In
    progress.
        Highway-Rail Crossing Handbook.--FHWA is updating the 1986 version.
    Preliminary draft material is under review. Target completion date by
    December 1999. Status: In progress.
        Vegetation Clearance.--FHWA encourages states to clear vegetation.
    A joint FHWA-FRA Working Group is addressing the issue. Status: In
    progress.
    Safety at Private Crossings:
        Define Categories.--FRA is defining categories and minimum
    standards for private crossings. Statistics and comments from previous
    safety inquiries are being reviewed. Status: In progress.
        Safety Inquiry.--FRA will hold an informal safety inquiry about
    standards for certain private crossings. Status: In progress.
        Locked gate at Private Crossings.--FRA and FHWA will demonstrate
    gates with controlled locks at private crossings. Demonstrations are
    planned in New York and Oregon. NY has received a $275K grant. OR has
    selected a demonstration site. Status: In progress.
    Data and Research:
        Signs, Signals, Lights and Markings--Signs and Signals.--FHWA is
    researching new traffic control and warning devices. Draft report due.
    Status: In progress.
        Signs, Signals, Lights and Markings--Train Horns.--FRA published a
    report in April 1995 on the impact of whistle bans nationwide. Analysis
    of Wayside Horns published in June 1998. NPRM on whistle bans is
    forthcoming. Status: In progress.
        Signs, Signals, Lights and Markings--Light Rail Crossing Gates for
    Left Turn Lanes.--FTA is investigating alternatives for left turn lanes
    with parallel tracks. Los Angeles County Metropolitan Transportation
    Authority (LACMTA) demonstration of 4-quadrant gates is progressing.
    Status: In progress.
        Signs, Signals, Lights and Markings--Manual on Uniform Traffic
    Control Devices.--FRA and FTA sought to amend the MUTCD to address such
    issues as high-speed rail, temporary closure, multi-track signs, and
    work zones. Notice was published in the Federal Register in June 1995.
    FHWA decision published in January 1997. Inclusion deferred. Status: In
    progress.
        Innovative Technology--Automated Video Image Analysis.--FRA is
    investigating the potential for live video monitoring of crossings.
    Tests will be conducted in NY and CA. Proposals are being solicited
    through the Ideas Deserving Exploratory Analysis (IDEA) program.
    Status: In progress.
        1-800 Computer Answering System.--FRA is working with railroads to
    develop notification systems. Software is being developed for small and
    medium-sized railroads to enable 1-800 notification. 1-800 signs are
    now posted at most crossings with active warning systems. Status: In
    progress.
        Resource Allocation Procedure.--FRA proposed to recalculate the
    accident prediction formulas and rebuild the accident prediction model.
    During peer review of proposed new procedure, it was decided to retain
    the original. The current formulas are being updated. Status: In
    progress.
        The Highway-Rail Crossing Inventory.--FRA and FHWA have promoted
    voluntary updating by states. FHWA issued a memo on the subject. The
    Update Manual was published in December 1996. 1999 FHWA Strategic Plan
    will emphasize importance of the Inventory. The FRA introduced new data
    and Y2K format in 1998. Status: In progress. Safety inquiry about
    display of crossing number will be held in the future.
    Trespass Prevention:
        Demographic Study.--FRA is reviewing its trespass fatality
    statistics to focus on remedial efforts. Zip code maps are available.
    1997 and 1998 bulletins include new data. Data workshop was held in
    April 1998. Status: In progress.
                    impact of the grade crossing action plan
        Question. Of the 52 crossing safety proposals in the action plan,
    which have been the most effective in reducing accidents at railroad
    crossings? To what extent is DOT closer to the action plan goal of
    eliminating all grade crossings that intersect the National Highway
    System?
        Answer. Successes to-date can not be attributed to any one
    initiative or organization, but rather to the synergistic impact of a
    myriad of different approaches sponsored and promoted by a multitude of
    individuals and organizations. The Congress has continued to fund
    highway-rail crossing safety improvement programs and states and
    railroads have taken advantage of the available funding to improve
    crossing locations. More than 2,500 volunteers have been trained and
    certified as Operation Lifesaver presenters and are carrying the
    ``Look, Listen and Live'' and the ``Always Expect A Train'' messages to
    schools and drivers and to other locations where they can reach an
    audience. The law enforcement community is beginning to develop an
    awareness of their potential impact on this issue, and where such an
    awareness has evolved, effective safety programs have resulted.
        Over 33,000 crossings have been eliminated since FRA began placing
    an emphasis on crossing consolidations. New regulations now require two
    additional alerting lights on the front of trains and regular
    inspection, testing, and maintenance of train-activated highway-rail
    crossing warning devices. The emergence of innovative signing and
    lights, the proliferation of 1-800 emergency call-in signs at
    crossings, realization of the efficacy of STOP signs, improvements in
    four-quadrant gate technology, the identification of high-profile
    (hump) crossings, and advances made with photo-enforcement will have
    significant impacts in the near future. Finally, FRA's eight Regional
    Highway-Rail Crossing Safety and Trespass Prevention Program Managers,
    assigned in 1994, have continued to foster and promote programs and
    initiatives to railroads, states and communities. Their presence has
    insured that crossing issues are not overlooked in the development of
    state safety improvement programs, corporate strategic planning,
    Metropolitan Planning Organization transportation planning and Safe
    Community initiatives. The addition of the eight assistants in fiscal
    year 1999 and one additional specialist in headquarters in fiscal year
    2000, will ensure that FRA reaches its goal of 50 percent reduction in
    grade crossing fatalities by 2004.
        In the Action Plan, the ``goal of eliminating all grade crossings
    that intersect the National Highway System'' (NHS) is actually stated
    as, ``encourage that Statewide Transportation Improvement Programs and
    Safety Management Systems fully address the upgrading or elimination of
    at-grade crossings on the NHS, and give priority to the long-term goal
    of eliminating NHS intersections with the PRLs'' (Principal Railroad
    Lines). Both FRA and FHWA have continued to encourage State, local and
    industry officials to consider crossing consolidation or elimination as
    the preferable choice among crossing treatment options. Since 1993, the
    National Inventory of Crossings reflects a reduction of 931, or 10.8
    percent, in the number of crossings on the National Highway System.
              status of grade crossing task force recommendations
        Question. Please update the Committee on the implementation of each
    of the recommendations of the interdepartmental grade crossing task
    force study that was conducted after the Fox River Grove, Illinois
    crash. Which of these action items have not yet been implemented?
    Please discuss the progress made and the challenges associated with the
    remaining action items.
        Answer. The 1996 Grade Crossing Task Force report contained 24
    short and long term recommendations in four topical areas:
    interconnected signals and storage space, high-profile crossings,
    light-rail crossing issues, and special vehicle operations and
    information. All 24 recommendations have been addressed. A description
    of each recommendation, and current status is included in the following
    document.
         status of the grade crossing safety task force recommendations
        The Report of the Grade Crossing Safety Task Force was issued by
    the Department of Transportation on March 1, 1996 as a result of the
    Fox River Grove, IL incident. The Task Force Report recommends 24
    specific follow-up actions addressing both physical and procedural
    deficiencies identified in the Highway-Rail Crossing Safety Action
    Plan. The following is an update on each of the 24 specific items
    detailed in the Task Force Report.
    Interconnected Signals and Storage:
        State Focal Points.--All states have designated a focal point for
    communities and railroads to coordinate crossing issues. A list of
    designated points of contact is available. FHWA and FRA will outline
    roles and responsibilities. Status: Complete.
        Engineering Studies.--States sought to determine the adequacy of
    storage space and the need for signal interconnections. States
    conducted investigations and established data bases. FRA letter to
    Governors stressed the importance of undertaking engineering studies.
    Status: Complete.
        Planning and Design.--State newsletters and memoranda have stressed
    that storage space needs must be considered early in design or redesign
    phase when planning projects. Design manuals have been revised. Status:
    Ongoing.
        Regional Conferences.--FHWA and FRA initiated regional conferences
    for railroads and states to discuss crossing safety issues. All FHWA
    regions (except Region 1) held conferences. Several states have hosted
    state meetings with railroads. Status: Ongoing.
        Technical Working Group (TWG).--FHWA and FRA have reviewed existing
    safety standards and guidelines. The TWG issued a report in June 1997
    which included terminology, findings, bibliography, letters and
    recommendations. Status: Complete.
    High-Profile Crossings:
        Standard Warning Sign.--FHWA amended the Manual on Uniform Traffic
    Control Devices (MUTCD) on January 9, 1997 to include an advance
    warning sign. Status: Complete.
        Define Information Sign.--FRA and FHWA developed language to inform
    drivers of proper action when stalled on a crossing. Alternative word
    message signs were proposed in the Implementation Report and will be
    included in the new Highway-Rail Crossing Handbook. Status: Complete.
        Identify Problem Crossings.--State highway agencies were requested
    to identify problem crossings with accident histories, install signs,
    alert users and update the Highway-Rail Crossing Inventory. FRA and
    FHWA are encouraging road authorities to identify and sign crossings.
    Inventory changes are being made. Status: In progress.
        Technical Working Group on High-Profile Crossings.--FRA and FHWA,
    working with states and industry confirmed the feasibility of vehicle
    and crossing classifications. Data collection and study of problem
    crossings and vehicle interaction continues. Status: In progress.
        Track and Highway Maintenance.--A Task Force comprised of FRA,
    FHWA, ASLRRA, AREMA and AASHTO are developing post-maintenance
    guidelines for vertical alignment. Status: In progress.
    Light-Rail Crossing Issues:
        MUTCD Chapter.--FHWA revised the MUTCD to include a chapter
    entitled, ``Traffic Controls for Light-Rail Highway Grade Crossings.''
        Planning Design and Operation.--FTA and FHWA issued a Planning
    Emphasis Area (PEA) directive to planning agencies. Regional FTA staff
    are monitoring progress and results and will coordinate on crossing
    matters. Status: Ongoing.
        Full Funding Grant Agreements (FFGA).--Consideration and evaluation
    of signal interconnection is now required in all FFGAs during
    preliminary engineering. Status: Complete.
        Data Collection and Dissemination.--FTA and TCRP have developed a
    process to collect, analyze and disseminate detailed light-rail
    collision data. Starting in 1995, the FTA has published crossing data
    from the Safety Management Information System (SAMIS). Future TCRP
    project will consider additional need. Status: Ongoing.
        MUTCD and Handbook.--FTA is reviewing the MUTCD to ensure that
    standards and guidelines are consistent with light-rail crossing
    issues. MUTCD is being revised by FHWA and FRA. Status: In progress.
        Priority of Light-Rail Vehicles.--TCRP issued Report (# 17) in
    January 1997 containing guidelines for priority of light-rail vehicles
    operating on city streets.
        Model Legislation.--FTA, NGA and NCSL have sought to enact and
    enforce penalties for violations associated with light-rail crossings.
    FTA is exploring options to promote enactment of model legislation.
    Status: In progress.
    Special Vehicle Operations and Information:
        School Buses.--In order to increase awareness among school bus
    operators, Operation Lifesaver has distributed an awareness and
    training video and NHTSA is including crossing safety issues in one-day
    in-service seminar. Status: In progress.
        Operating Permits.--Several states are issuing permits for special
    vehicles which includes emergency phone numbers for railroads. Status:
    Ongoing.
        ``Super-Load'' Vehicles.--States are providing railroad telephone
    numbers necessary to arrange flag protection for special vehicles. NTSB
    is promoting protection through State special permit offices. Status:
    Ongoing.
        Commercial Driver License (CDL) Manual and Test.--FHWA Office of
    Motor Carriers (OMC) is amplifying the safety message of both the
    driving manual and tests. Status: Ongoing.
        Escort Vehicles.--States are developing certification programs
    which include crossing safety in training exercises. NTSB is working
    with State special permit offices. Status: Ongoing.
        ``Real Time'' Communications.--States are working to ensure that
    escort and special permit vehicles can maintain ``real time'' contact
    with railroad dispatchers. NTSB is working with State special permit
    offices. Status: Ongoing.
        Classification Process.--States will work to implement
    classification processes as developed through the TWG. Status: Ongoing.
    Status Key
        Ongoing: An initiative which has become a routine or continuing
    effort.
        In progress: An initiative which is still being developed and
    implemented.
        Complete: An initiative for which a specific action has been taken
    or a product has been disseminated.
        Not Considered/No Further Action: Insufficient authority or funding
    to pursue an initiative.
                     use of earmarked grade crossing funds
        Question. In fiscal year 1998 transportation appropriations act,
    the conferees provided $275,000 to support new additional highway/rail
    grade crossing safety initiatives. Please explain how the FRA utilized
    that funding to: (a) evaluate interstate rail corridor and crossing
    safety, (b) identify the most dangerous crossings, (c) mitigate
    crossing hazards, (d) assess the effectiveness of the crossing signal
    technologies, (e) develop safer commercial driving practices at
    highway/rail crossings, and (f) work with communities seeking reduction
    of train whistles. How does the fiscal year 2000 budget seek to address
    each of those challenges?
        Answer. FRA utilized the earmarked and other safety funds in
    addressing each of these initiatives as follows:
        (a) Evaluate interstate rail corridor and crossing safety: FRA's
    Regional Managers have continued to work with state DOTs, railroads,
    and Amtrak to promote crossing reviews along rail corridors and/or
    community-wide reviews. This has been successful and has often resulted
    in multiple crossing safety improvements as well as the closing of some
    crossings. Two examples include the Amtrak line across northern Indiana
    and all crossings on both railroads in Laredo, Texas. Several of the
    Amtrak lines in the southeast have also been reviewed.
        (b) Identify the most dangerous crossings: Updating processes for
    the National Inventory were refined and augmented (made more user
    friendly) and the collision prediction software was modernized. Both of
    these are used for analyzing individual crossings and groups of
    crossings. The PCAPS (Personal Computer Accident Prediction System) is
    used by a wide variety of subscribers, including FRA's Regional
    Managers, in evaluating crossing safety in rail corridors, in
    identifying dangerous crossings, and while working with communities
    seeking reductions in train whistles.
        (c) Mitigate crossing hazards: An effort has been initiated to
    develop best-practices guidelines for community project planners
    regarding rails-with-trails projects. This is a new initiative within
    the Office of Safety which targets both crossings (where trails cross
    tracks) and trespass prevention initiatives. FRA also continued its
    analysis of the problem, and the development of options, regarding
    high-profile crossings vis-a-vis low clearance vehicles.
        (d) Assess the effectiveness of the crossing signal technologies:
    FRA continues to encourage and monitor projects that are assessing or
    demonstrating the effectiveness of new technologies, both signalized
    and passive. Such projects currently include a variety of four-quadrant
    gate installations ranging from a complex Intelligent Transportation
    Systems (ITS) related installation which includes vehicle presence
    detection with automatic train stop in Connecticut to simple gates in
    south Florida. Other projects include barrier nets in Illinois,
    articulated gates in North Carolina, true barrier gates (versus
    conventional warning gates) in Wisconsin, median barriers in
    Washington, way-side horns in Nebraska and Iowa, etc. FRA is open to
    these types of projects and seeks to confirm additional ``supplementary
    safety measures'' with the potential to fully compensate for the
    absence of a train horn.
        (e) Develop safer commercial driving practices at highway-rail
    crossings: FRA has made numerous approaches and presentations to
    trucking and bus firms and to shippers and school districts regarding
    the hazards of highway-rail crossings. FRA has been exploring, with the
    American Trucking Association (ATA) and the Independent Truckers
    Association, ways and means of reaching vehicle operators with the
    crossing safety message. Working with Operation Lifesaver, Inc. (OLI)
    and the National Highway Traffic Safety Administration (NHTSA), FRA has
    assisted in the development of a school bus driver training module
    (``the responsibility is ours'') which includes a lesson plan and video
    tape. This package has been widely distributed. FRA is considering a
    similar project for truckers, especially owner/operators. FRA also is
    working with the ATA, OLI and the other modal administrations to
    develop and distribute a trucker-alert flyer. This is near completion.
        (f) Work with communities seeking reduction of train whistles: An
    environmental impact statement is being drafted to accompany the
    Administration's Notice of Proposed Rulemaking (NPRM) regarding train
    whistles. A regulatory analysis has also been completed. FRA has
    reviewed, analyzed, and commented on numerous proposals from
    communities seeking to establish (or retain) bans on the use of train
    horns.
        The fiscal year 2000 budget includes $23.1 million for grade
    crossing activities. Funding addresses research, safety, enhanced
    corridor focus, increased staffing, and other critical initiatives as
    noted above that progress FRA's work in grade crossing.
                  fiscal year 1998-2000 grade crossing funding
        Question. Please display the requested expenditures related to
    grade crossing safety throughout the various subaccounts of FRA and
    compare those amounts to expenditures for each of the last two years.
        Answer. See table below.

                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                                      Fiscal year
                                         -----------------------------------
                  Activity                   1998        1999        2000
                                            Funding     Funding     Request
    ------------------------------------------------------------------------
    Research & Development..............       1,997         835       1,035
    Next Generation High-Speed Rail.....       2,500       4,600       4,000
    Safety & Operations.................       2,243       2,719       3,069
    High-Speed Rail Initiatives (TF)....  ..........  ..........      15,000
                                         -----------------------------------
          Total.........................       6,740       8,154      23,104
    ------------------------------------------------------------------------

            fiscal year 1998-1999 grade crossing funding by project
        Question. Please show on a project by project basis how the fiscal
    year 1998 and fiscal year 1999 monies on grade crossings were spent,
    who the recipients of the funds were, and the expected results.
        Answer. See table below.

    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Fiscal year
             Appropriation/project         --------------------------------           Recipient                             Expected results
                                             1998 Funding    1999 Funding
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    TOTAL, FRA............................      $6,740,100      $8,154,000
                                           ================================
    RESEARCH & DEVELOPMENT................       1,997,000         835,000
                                           ================================
        Freight Car Reflectorization......          10,000  ..............  Volpe Ctr....................  Freight cars will be more visible to drivers,
                                                                                                            helping them aavoid striking the train. Report
                                                                                                            published.
        Eval Wayside Horns and Optml                75,000  ..............  Volpe Ctr....................  Locomotive horns will be optimized for sound
         Acoustic Warning.                                                                                  quality and effectiveness while reducing noise
                                                                                                            pollution in surrounding communities.
        Driver Behavior Accident Causation         320,000          80,000  Volpe Ctr....................  To gain a better understanding of how drivers
         Driver Education.                                                                                  react to grade crossings and why accidents
                                                                                                            happen in order to educate drivers.
        Operation Lifesaver...............         600,000         ( \1\ )  Operation Lifesaver, Inc.....  Public education about the laws regarding grade
                                                                                                            crossings, the dangers at grade crossings and
                                                                                                            the importance to obey traffic laws.
        Train Detection...................         250,000          50,000  Assoc. of American Railroads.  Examine causes for loss of contact between rail
                                                                                                            and wheels, resulting in intermittent operation
                                                                                                            of grade crossing warning device (gate bobble).
        Illumination Guidelines...........          35,000          15,000  Volpe Ctr....................  The use of street lights to illuminate trains at
                                                                                                            night so drivers can see and avoid running into
                                                                                                            the train.
        Photo Enforcement.................          25,000  ..............  Volpe Ctr....................  Assess the Ohio crossbuck and traffic signals at
                                                                                                            crossings to improve warning to drivers.
        HSR Crossing Tech.................  ..............          40,000  Volpe Ctr/Battelle Labs......  To examine signaling and train control,
                                                                                                            obstruction detection and warning devices and
                                                                                                            barrier system technologies available for use in
                                                                                                            high-speed corridors. Develop methodology to
                                                                                                            evaluate improved safety provided by additional
                                                                                                            devices.
        Assess 1010 & 1036 Demos and NGHSR          70,000         175,000  Volpe Ctr....................  Evaluate the technology demonstration projects
         BAA.                                                                                               funded under the Section 1010 & 1036 program in
                                                                                                            ISTEA (4-quad gate with obstruction detection in
                                                                                                            CT and Vehicle Arrestor Barrier in IL), and
                                                                                                            assess BAA submittals.
        Criteria & overall evaluation       ..............          50,000  Volpe Ctr....................  Determine criteria for developing an evaluation
         methodology.                                                                                       methodology usable for all grade crossing R&D
                                                                                                            projects.
        Standardized before/after           ..............          50,000  Volpe Ctr....................  Develop standardized before/after evaluation
         evaluations.                                                                                       techniques to measure safety effectiveness of
                                                                                                            research projects.
        Obstacle/Intrusion Detection......  ..............         150,000  Volpe Ctr....................  Building on the HSR Crossing Technology project,
                                                                                                            examine the obstruction detection systems
                                                                                                            suitable for use at grade crossings and expand
                                                                                                            for use along the right-of-way.
        Compendium of Volpe Research               200,000          40,000  Volpe Ctr....................  A project to assemble the research on grade
         Findings.                                                                                          crossings done to date.
        Overview & synthesis of existing           160,000  ..............  Volpe Ctr....................  A new examination of available grade crossing
         grade crossing statistics.                                                                         statistics to develop a better understanding why
                                                                                                            grade crossing accidents occur.
        GIS support to HSR Corridors......  ..............          30,000  Volpe Ctr....................  Develop GIS system to support communication
                                                                                                            between grade crossing signals and Positive
                                                                                                            Train Control systems.
        Volpe Center Support..............         177,000          80,000  Volpe Ctr....................  Support for assessing hazard elimination
                                                    75,000          75,000  Volpe Ctr....................   projects.
                                                                                                           Expand Corridor Risk Analysis for high-speed
                                                                                                            corridors to additional corridors.
                                           ================================
    NEXT GENERATION HIGH-SPEED  RAIL......       2,500,000       4,600,000
        NC Sealed Corridor................       2,000,000       1,000,000  NCDOT........................  The North Carolina Sealed Corridor Initiative
                                                                                                            will treat every crossing in the 174-mile
                                                                                                            Charlotte to Raleigh segment of the high-speed
                                                                                                            rail corridor with innovative crossing devices
                                                                                                            like median barriers, long gate arms, and 4-quad
                                                                                                            gates. Redundant crossings will be closed.
        Mitigating Grade Crossing Hazards.  ..............       1,370,000  MIDOT........................  Upgrade 57 public grade crossings and upgrade or
                                                                                                            eliminate 21 private grade crossings as part of
                                                                                                            the Michigan Incremental Train Control System
                                                                                                            (ITCS) demonstration.
        Low Cost HSR Crossing.............  ..............       1,100,000  BAA Awardees.................  Awards under the BAA program have not been
                                                                                                            announced.
        NY Locked Gate....................  ..............          25,000  NYSDOT.......................  To design, fabricate, test and evaluate a low-
                                                                                                            cost grade crossing gate system suitable for low
                                                                                                            volume traffic crossings on high-speed
                                                                                                            corridors.
        TRB HSR IDEA Program..............         500,000         500,000  TRB..........................  The TRB IDEA Program, supported by FRA, FHWA,
        TRB ITS IDEA Program..............  ..............         500,000  TRB..........................   NHTSA, and FTA, competitively solicits concepts,
                                                                                                            conducts peer review, and awards innovative
                                                                                                            technology projects nationwide to support
                                                                                                            development of High-Speed Rail and Intelligent
                                                                                                            Transportation Systems. Examples of completed
                                                                                                            projects include a very-wide field of view
                                                                                                            camera suitable for automated monitoring of
                                                                                                            grade crossings and a scanning radar antenna for
                                                                                                            surveillance systems.
        ITS Architecture & Support to ITS   ..............          20,000  ITS JPO......................  The ITS Architecture is gaining a new User
         PO.                                                                                                Service--User Service #30--which describes how
                                                                                                            grade crossing will be incorporated into the
                                                                                                            overall Intelligent Transportation System and
                                                                                                            which will link train control systems with
                                                                                                            advanced highway traffic control systems.
        Volpe Center Support..............  ..............          85,000  Volpe Ctr....................  Support of assessing hazard elimination projects.
                                                                                                            Corridor Risk Analysis for Empire Corridor.
                                           ================================
    SAFETY & Operations...................       2,243,100       2,719,000
        Operation Lifesaver...............         ( \2\ )         600,000  Operation Lifesaver, Inc.....  Public education about the laws regarding grade
                                                                                                            crossings and trespassing, the dangers at grade
                                                                                                            crossings and on rail rights-of-way and the
                                                                                                            importance to obey traffic and trespass laws.
        Public Awareness and Out-  reach..         159,700          33,700  Various printing contractors,  Promotional and audio-visual materials,
                                                                             packing and shipping firms,    conference registrations and display booth space
                                                                             equipment rental firms,        and supplies. Materials are used or distributed
                                                                             conference organizers, OL      when making presentations to schools, community
                                                                             suppliers, etc.                groups, workshops, conventions, etc.
        Police Officer Detail.............          63,000         110,000  FY 1999 selections have not    The police officer detail is an outreach program
                                                                             yet been made.                 with the law enforcement community to raise
                                                                                                            awareness of crossing safety and trespass
                                                                                                            prevention. One officer is detailed full time to
                                                                                                            Washington, and one each will be detailed part-
                                                                                                            time to four FRA regions.
        Outreach to Law Enforcement and             70,600          51,700  IACP, NSA, NFOP, etc. for      Outreach to judges and prosecutors to enhance
         Trespass Prevention.                                                conference display booth       their knowledge of crossing safety and trespass
                                                                             space, registration fees,      prevention issues, and materials to support
                                                                             and GPO printing for           FRA's regional manager promotions of highway-
                                                                             pamphlets, brochures, and      rail crossing safety and trespass prevention
                                                                             for other promotional items.   programs.
        Analysis of High-Profile Crossings          15,300          14,600  Univ of West Virginia and      Research and analysis of problems associated with
                                                                             local survey firms.            and alternatives for, high-profile crossings and
                                                                                                            low-clearance vehicles.
        Airborne survey of crossing         ..............         109,000  US Army Corp of Engineers....  For demonstration of airborne measurement of
         elevations.                                                                                        ground elevation and collection of data covering
                                                                                                            174 miles of rail right-of-way and crossings.
                                                                                                            Data to be used in analysis of high-profile
                                                                                                            crossings.
        Highway-Rail Crossing Inventory &          171,000          50,000  AMB..........................  Simplify and refine the Highway-Rail Crossing
         Data Bases.                                                                                        Inventory and collision data bases reporting and
                                                                                                            report production and accident prediction
                                                                                                            procedures.
        Information Processing............         285,000         285,000  AMB..........................  Supports Highway-Rail Crossing Inventory and
                                                                                                            crossing module of the Accident/Incident Report
                                                                                                            Processing.
        Regulatory Support................  ..............          25,000  Auburn University............  Conduct literature search of warrants, guidelines
                                                                                                            and best-practices for determining appropriate
                                                                                                            warning device(s) or grade separation for
                                                                                                            highway-rail crossings.
        Regulatory Support................         288,200          38,000  DeLeuw Cather................  Assistance in preparation of EIS for train horn
                                                                                                            NPRM.
        Rail-with-Trails..................          90,300          50,000  Reimbursable agreement with    Best-practices for design and operation of rails-
                                                                             FHWA to fund development of    with-trails projects.
                                                                             best-practices for rails-
                                                                             with-trails, contractor not
                                                                             yet selected.
        PC&B (Approximate)................       1,100,000       1,352,000                                 Supports staff dedicated to the crossing and
                                                                                                            trespasser program.
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ Funded under Safety in fiscal year 1999.
    \2\ Funded under R&D in fiscal year 1998.

                top 10 states with most grade crossing accidents
        Question. Please list the ``top ten'' states that have the highest
    number of highway/rail grade crossing accidents and fatalities, and
    cite the number of accidents and fatalities in calendar years 1997,
    1998 and thus far in 1999.
        Answer. See the table below.

    ----------------------------------------------------------------------------------------------------------------
                                                                             Colisions                Deaths
                                State \1\                            -----------------------------------------------
                                                                       1997    1998    1999    1997    1998    1999
    ----------------------------------------------------------------------------------------------------------------
    Texas...........................................................     421     315      28      54      45       2
    Louisiana.......................................................     203     210      20      30      25       1
    Illinois........................................................     213     197      28      27      30       5
    Indiana.........................................................     227     196      26      23      25  ......
    California......................................................     159     178      16      22      32       4
    Ohio............................................................     178     150      11      26      14       1
    Alabama.........................................................     135     145       9      19      11  ......
    Georgia.........................................................     138     140      13      12      13  ......
    Mississippi.....................................................     148    1 32       9      19      23       1
    Arkansas........................................................     118     115       4      10      24  ......
    ----------------------------------------------------------------------------------------------------------------
    \1\ Ranking is based on fiscal year 1998 data.

                              trespass prevention
        Question. What is your strategic plan for reducing the number of
    fatalities involving trespassing? Please break out all funds requested
    to deal with this challenge.
        Answer. As a result of the 1997 figures, FRA was a primary force in
    promoting Operation Lifesaver's (OL) increased focus on trespass
    issues. FRA played an essential role in the development of the OL
    Trespass Prevention Guide and the OL Trespass Presentation package.
    Currently, there are three pilot projects, being monitored by FRA,
    which use the new OL Trespass Presentation, in Salem, Oregon; Oshawa,
    Ontario; and Whistler, British Columbia. In addition, FRA prepared and
    disseminated Model Legislation for Railroad Trespass and Railroad
    Vandalism for use by States. This Model Legislation has been
    incorporated into Iowa's new law. Other States working on railroad
    trespass legislation are Georgia, Illinois, Indiana, Maine, Maryland,
    Minnesota, Montana, North Carolina, Tennessee, Washington, and West
    Virginia.
        Future FRA plans include continued expansion of casualty data
    available to the public on the FRA web page to assist in targeting
    trespass prevention efforts. This casualty data is available by county.
    In addition, the new occurrence and location codes provided to the
    railroads for their reports will further define where these incidents
    are occurring. Regarding the need for demographic information in order
    to focus educational efforts for trespass prevention, a one-time
    demographic information gathering is underway, using railroad special
    agents' contact/ejection/arrest reports and demographic software.
        The growing issue of Rails-with-Trails (RWTs) is actively being
    pursued by FRA. At present, there is a Request for Proposals, for a 30-
    month contract, to produce a ``best practices'' report on RWTs. This is
    a result of a wide-ranging partnership effort by FRA involving the
    railroads' management and labor, Federal and State government agencies,
    bicycle and pedestrian groups, and trail proponents and planners.
        In Texas, FRA and OL, with the support of Houston's mayor, have
    joined the Houston Independent School District (HISD), parent-teacher
    groups, school police, local law enforcement, neighborhood
    organizations, community health clinics, and civic organizations to get
    the message out that trespassing on rail property is dangerous and can
    be deadly. HISD teachers and police will be trained as OL presenters
    and the OL curriculum will be incorporated into the HISD curriculum. In
    1997, Texas had 38 fatalities and 78 injuries due to railroad
    trespassing. This project is one of the largest single OL States
    Assistance Grant projects funded by FRA ($28,800 in FRA money plus
    $9,600 from Texas railroads and Texas OL will support the $38,400
    project).
        Efforts continue to include rail safety issues in USDOT safety
    initiatives such as Safe Communities and Moving Kids Safely. FRA will
    continue to facilitate research to use new technology to deter
    trespassing such as the video monitoring and video imaging project in
    Pittsford, New York.
        Also, FRA is increasing its work in outreach to law enforcement
    agencies via the International Association of Chiefs of Police, the
    National Sheriffs' Association, and the Department of Justice's COPS
    grants. FRA is in the process of initiating a Regional Police Liaison
    Officer program. FRA regions will have an officer detailed by a
    community police agency, in the region one week per month, to act as a
    contact and intermediary for the regional law enforcement community and
    FRA.
        With the addition of eight Assistant Crossing and Trespasser
    Regional Managers in fiscal year 1999 (one for each FRA region), the
    very successful work of FRA's Regional Crossing Managers will continue
    to expand. They will provide support and assistance in such areas
    particularly important to trespass abatement as law enforcement,
    outreach, and promotion of trespass prevention programs.
        Funding for trespass prevention is included in the grade crossing
    budget of $23.1 million in fiscal year 2000 and is reflected in many
    line items such as Police Office Details, Outreach to Law Enforcement,
    Rails-With-Trails, and Operation Lifesaver.
                      grade crossings in last three years
        Question. How many crossings were closed in the last three years,
    on a state-by-state basis?
        Answer. Based on data reported by States and railroads to the
    National Inventory of Crossings, using 1996 as the base year, a total
    of 9,089 public and private highway-rail crossings have been
    consolidated or eliminated. See the attached table for a state-by-state
    breakdown.

    ------------------------------------------------------------------------
                    State                    1996        1999       Change
    ------------------------------------------------------------------------
    Alabama.............................       5,592       5,410        -182
    Alaska..............................         329         329  ..........
    Arizona.............................       1,626       1,623          -3
    Arkansas............................       4,787       4,687        -100
    California..........................      12,827      12,695        -132
    Colorado............................       3,517       3,234        -283
    Connecticut.........................         631         633           2
    Delaware............................         403         430          27
    District of Columbia................          31          31  ..........
    Florida.............................       5,546       5,214        -332
    Georgia.............................       8,938       8,503        -435
    Hawaii..............................           6           6  ..........
    Idaho...............................       2,900       2,798        -102
    Illinois............................      15,903      15,576        -327
    Indiana.............................       9,433       9,105        -328
    Iowa................................       9,462       9,442         -20
    Kansas..............................      12,097      11,081      -1,016
    Kentucky............................       5,387       4,956        -431
    Louisiana...........................      6,87 8       6,677        -201
    Maine...............................       1,816       1,672        -144
    Maryland............................       1,399       1,355         -44
    Massachusetts.......................       1,729       1,730           1
    Michigan............................       8,478       8,295        -183
    Minnesota...........................       8,307       8,193        -114
    Mississippi.........................       5,070       4,862        -208
    Missouri............................       8,155       8,042        -113
    Montana.............................       3,591       3,506         -85
    Nebraska............................       6,870       6,753        -117
    Nevada..............................         554         567          13
    New Hampshire.......................         847         616        -231
    New Jersey..........................       2,459       2,459  ..........
    New Mexico..........................       1,399       1,399  ..........
    New York............................       6,452       6,430         -22
    North Carolina......................       8,439       7,910        -529
    North Dakota........................       6,804       6,792         -12
    Ohio................................      10,255       9,392        -863
    Oklahoma............................       6,296       6,032        -264
    Oregon..............................       5,118       5,126           8
    Pennsylvania........................       9,001       8,929         -72
    Rhode Island........................         199         199  ..........
    South Carolina......................       4,457       4,317        -140
    South Dakota........................       3,498       3,498  ..........
    Tennessee...........................       5,286       4,990        -296
    Texas...............................      18,853      18,380        -473
    Utah................................       1,798       1,799           1
    Vermont.............................       1,146       1,146  ..........
    Virginia............................       5,061       4,830        -231
    Washington..........................       5,868       5,873           5
    West Virginia.......................       4,113       3,461        -652
    Wisconsin...........................       7,580       7,152        -428
    Wyoming.............................       1,459       1,426         -33
    Puerto Rico.........................          26          26  ..........
                                         -----------------------------------
          Total.........................     268,676     259,587      -9,089
    ------------------------------------------------------------------------

             fiscal years 1998-2000 funding for operation lifesaver
        Question. Please prepare a table displaying the amount of FRA
    support for Operation Lifesaver for fiscal years 1998, 1999, and the
    fiscal year 2000 request.
        Answer. See the table below.

                       FRA SUPPORT FOR OPERATION LIFESAVER
    ------------------------------------------------------------------------
                      Fiscal year                     Request   Appropriated
    ------------------------------------------------------------------------
    1998..........................................    $400,000     $600,000
    1999..........................................     300,000      600,000
    2000..........................................     600,000  ............
    ------------------------------------------------------------------------

                  use of additional funding for grade crossing
        Question. What would FRA do with an additional $500,000 of contract
    funds to support grade crossing activities?
        Answer. FRA has included approximately $23.1 million in its fiscal
    year 2000 budget for grade crossing initiatives. This does not include
    the $5.25 million available in Section 104(d)(2) funds allocated by
    FHWA or other grade crossing related funds in DOT's budget.
        While the grade crossing program is an important element in the
    Department's overall safety program, it represents only one of many
    critical components in railroad safety. Increasing funds in this area,
    at the cost of other safety initiatives, may actually impede FRA's
    ability to meet its fiscal year 2000 safety performance goals.
        FRA's fiscal year 2000 budget is based on a Departmental strategic
    plan that addresses safety and technology priorities and reflects a
    balanced approach in addressing all funding requirements within FRA.
                     status of stop signs at grade crossing
        Question. In 1993, a joint FHWA/FRA memorandum regarding the
    installation of ``STOP'' signs which was sent to the regional offices
    of each agency. What actions have been taken to promulgate and
    implement the guidance in this memorandum? How effective have the
    regional offices been in reaching state and local highway authorities
    to provide technical assistance regarding, and to encourage
    installation of ``STOP'' signs? How many ``STOP'' signs have been
    installed at highway-rail crossings since 1993? Is the Department
    planning any additional steps to encourage states to install more
    ``STOP'' signs in accordance with NTSB's recommendation to the states?
        Answer. Upon receipt of the July 8, 1993 joint memorandum, the FHWA
    regional offices forwarded it to FHWA Division offices in each State
    for compliance. Staff at the Division offices followed up with contacts
    and assistance to the traffic engineers in the State highway agencies.
    Local highway authorities normally work through the State authority,
    and FHWA technical assistance was provided as requested. Feedback from
    State and local agencies have indicated that FHWA has been effective in
    providing technical assistance and in encouraging appropriate use of
    ``STOP'' signs. FRA's Regional Managers for crossing programs continue
    to use the memorandum as a tool to encourage both State and local
    highway authorities to at least consider STOP signs as a viable option
    for needed traffic control at crossings. According to the National
    Inventory of Crossings, in 1993, 10,567 public highway-rail crossings
    were equipped with STOP signs. Most recent count from the Inventory
    indicates that 10,962 are now equipped with STOP signs.
        Following receipt of the NTSB recommendation to States relative to
    ``STOP'' signs, the Secretary of Transportation directed that a
    Technical Work Group (TWG) be convened to develop guidance to assist
    State and local engineers in determining the appropriate traffic
    control, options to include ``STOP'' signs and grade separation. This
    TWG will be comprised of representatives of various agencies within
    DOT, State and local highway agencies, NTSB, national organizations and
    the rail industry. Work is already underway with a literature review of
    existing guidance and/or warrants. A report will be completed by the
    fall of 2000 for distribution to the State and local agencies.
                      1-800 emergency notification system
        Question. Section 301 of the 1994 Railroad Safety Act requires the
    Secretary to conduct a pilot program to demonstrate an emergency
    notification system using a toll-free telephone number for the public
    to report any malfunctions or other safety problems at highway-rail
    grade crossings. Please provide a definite schedule for the emergency
    notification project, from the project's inception to completion.
    Include the following information:
      --What has FRA done to implement this requirement, and what are the
            results to date?
      --How much money is currently available to continue the efforts in
            this area?
      --What are the plans to allocate these monies?
      --What funds are requested for this effort in fiscal year 1999?
        Answer. The 1994 Swift Rail Development Act directs the Secretary
    to demonstrate a toll-free emergency notification system to report
    emergencies, malfunctions, and other safety problems, and to conduct a
    pilot program in two states. However, the Congress did not appropriate
    funds for this program. In 1995, a preliminary design concept and
    implementation plan was completed and preliminary discussions were held
    with the States of Illinois and Minnesota for a two-State pilot test
    project. FRA's goal was to involve two States representative of both
    urban and rural areas.
        In 1996, $625,000 was appropriated by Congress for the development
    of system hardware and software. No funds were appropriated for the
    installation of signs at crossings, the public education and awareness
    program, nor the final Report to Congress. FRA has reached an agreement
    with FHWA to use Surface Transportation Program Funds from the safety
    set-aside (Section 130) for the required signage part of this project.
    Meanwhile in 1996, several major railroads, at their own expense,
    started to install their own 1-800 Emergency Telephone Number signs at
    crossings to report malfunctions and/or emergencies. Some railroads are
    installing these at all of their public and private crossings, while
    others are installing them at only the public crossings, and yet others
    at only the active crossings (those with gates and/or flashing lights).
    Preliminary discussions were held with Union Pacific (UPRR) and
    Norfolk-Southern (NS) Railroads to evaluate methods for incorporating
    the railroads' 1-800 Number Systems into the overall system planned for
    the two pilot states.
        In 1997, the FRA Administrator sent a letter to all States inviting
    them to participate in the two-State pilot test program. FRA received
    expressions of interest from only four states, California, Illinois,
    New Mexico, and Minnesota.
        In 1998, FRA awarded a 3-year contract to design, develop, and test
    a 1-800 Toll-Free Emergency Notification System (ENS), capable of
    reporting problems at highway-rail intersections to a centralized state
    police emergency response communication center or railroad train
    dispatch center. This 1-800 ENS will be designed for, and first tested
    in, the State of Texas where emergency response communication center
    personnel are familiar and knowledgeable with how such a system should
    properly operate. This will also upgrade that State's currently
    installed system. Subsequently, the 1-800 ENS Software Package will be
    made available to two or more pilot States. The software package will
    then be modified to operate from a railroad's perspective and offered
    to and installed on a medium size (or larger) railroad. (Current
    discussions are being held with the UPRR and Illinois Central (IC)
    Railroads). The design and installation in Texas is expected to be
    completed in December, 1999, with additional state and/or railroad
    installations taking place within an additional 12 months, by December,
    2000.
        FRA has conducted a poll of the major railroads and found that,
    after completion of the Conrail merger, more than 55 percent of all
    public at-grade crossings will contain a posted 1-800 ENS Number, and
    an additional 10 percent are on railroads where an emergency telephone
    number has been provided to local emergency service organizations
    (police, fire, medical, etc.). Of the 158,784 public at-grade crossings
    nationwide, it appears that by the end of 1999 a 1-800 ENS Sign will be
    installed at approximately 84,357 (53 percent) of the public at-grade
    crossings on the Burlington Northern Santa Fe (BNSF), UPRR, NS, CSX
    Transportation and IC Railroads. This represents 78 percent of all the
    active crossings (those with flashing lights and/or gates) in the
    nation.
        Since Texas and Connecticut have state-wide systems which include
    some of the above crossings, FRA estimates about 56 percent of all
    public at-grade crossings in the nation will soon be equipped. Some
    railroads, for example, UPRR, NS and BNSF, are voluntarily considering
    an expansion of their programs to include additional crossings (1) not
    currently equipped with automatic warning devices and (2) private
    crossings.
        An effective emergency notification system will have a centralized
    manned center to receive calls. This requires a telephone system for
    receiving calls and a computerized system (software and hardware) for
    fast, efficient, and accurate identification of the crossing location
    on a highway-railroad grid. The 1-800 ENS Software Package will have
    the ability for logging calls and accessing Inventory Files based on
    the U.S. DOT/AAR National Highway-Rail Grade Crossing Number and
    Inventory. It will also have supplemental files, incorporate a display
    on a map, and the capability to forward the incoming call and
    information to the appropriate railroad or highway authorities.
        FRA is evaluating the possibility of having the railroads assume
    responsibility for incoming 1-800 ENS calls since they are already
    moving in that direction. Using this approach, FRA believes that it may
    be possible to implement a 1-800 ENS on a national scale rather than in
    just two pilot states, thereby achieving more coverage with the
    appropriated funds.
        FRA has obligated $618,000 of the $625,000 funds appropriated in
    fiscal year 1996. The balance of $7,000 will be used to develop the 1-
    800 ENS software package.
            state investment in 1-800 emergency notification system
        Question. How will FRA promote State investment in this approach to
    improving grade crossing safety?
        Answer. FRA is evaluating different approaches to the 1-800
    Emergency Notification System (ENS), specifically, a redirection of the
    program from a state-based effort for only public crossings equipped
    with automatic warning devices to a railroad-based approach which will
    address emergencies at all crossings including private and passive
    (those not equipped with automatic warning devices) crossings. Soon,
    nearly half of all public crossings will be equipped with 1-800
    Emergency Notification signs (containing a toll-free telephone number
    and crossing identification number) for the public to use to report
    problems.
        Railroads are voluntarily establishing ENS numbers and procedures
    and are installing signs. Some railroads are even extending this
    coverage to all crossings, both public and private, with and without
    automated systems. (The two existing State-based systems target only
    public highway-rail crossings with automated warning systems.) Using
    the redirected approach, FRA believes that it will be possible to
    implement a ENS in more than just a few states, thereby achieving more
    coverage with the appropriated funds.
        To promote continued investment in these systems, FRA plans to: (1)
    Encourage all railroads with 24-hour operations to post their own 1-800
    signs and to handle such calls through their 24-hour operations center;
    (2) Develop and make available 1-800 ENS software for operating a
    railroad or state 1-800 ENS which will include crossing inventory data
    geographically located and an automated logging technique to identify
    the location of a crossing with a reported problem; (3) Encourage
    updating of the National Crossing Inventory (a necessity for
    identifying the exact location of a crossing with a posted crossing
    number); and, (4) Evaluate the possibility of providing seed funding
    for regional contract arrangements whereby smaller railroads would use
    the services of a regional emergency notification and command center
    for responding to calls and/or encouraging American Short Line and
    Regional Railroad Association participation in establishing such
    regional emergency notification contract services.
        When the 1-800 ENS system software is developed (in about one
    year), it will be made available to States (tested by the State of
    Texas first) and railroads at no cost. Additionally, the Federal
    Highway Administration has approved State use of Surface Transportation
    Program Funds from the safety set-aside portion of the Intermodal
    Surface Transportation Act (Section 130) for the required signage. Full
    implementation will take approximately two years.
                        risk assessment approach to r&d
        Question. The Transportation Research Board Committee for Review of
    the FRA R&D Program has recommended that FRA use a risk assessment
    approach to identifying the most serious hazards in the railroad system
    in order to establish priorities for R&D. What is the FRA response to
    that recommendation? Are any funds allocated for that purpose in the
    fiscal year 2000 budget? How much would such research cost?
        Answer. FRA agrees with the Transportation Research Board (TRB)
    Committee's recommendations. In fact, FRA's R&D has, for many years,
    been informally using such an approach, with the involvement of the
    Office of Safety, in establishing R&D priorities. The TRB recommends
    that FRA perform an explicit risk assessment. No funds were allocated
    for that purpose in the fiscal year 2000 budget because the TRB
    Committee made its recommendation after the fiscal year 2000 budget had
    been finalized. The level of funding needed would be determined by the
    number and type of projects deemed appropriate.
            fiscal year 2000 r&d program--impact on high risk areas
        Question. How is the R&D program now related to risk? How is the
    fiscal year 2000 budget request for R&D related to risk?
        Answer. At the request of the TRB committee, FRA conducted an
    analysis of all the projects in its R&D program. The analysis examined
    how each project would address the following: employee injuries and
    fatalities, passenger injuries and fatalities, injuries and fatalities
    to the general public, derailments and collisions, and hazardous
    material releases. The analysis also examined how each project would
    assist in the development of the following: traditional FRA rulemakings
    as well as rulemakings through the RSAC process, industry standards,
    and industry best practices. Finally, each project was evaluated
    regarding its likelihood of technical success, likelihood of being
    completed on schedule, and likelihood of implementation. This analysis
    reflected a documented process that has always been performed
    informally by the FRA's R&D Office.
        By having carried out this analysis, by participating actively in
    the RSAC process, and by working closely with the Office of Safety, FRA
    believes that its current R&D program and related fiscal year 2000
    budget request clearly address high-risk issues in the nine technical
    areas that comprise the program: human factors, rolling stock and
    components, track and structures, track-train interaction, train
    control, grade crossings, hazardous materials, train occupant
    protection, and system safety.
                   r&d--performance based regulatory process
        Question. The Committee for Review of the FRA R&D Program has
    recommended that FRA support research on how to manage an evolution of
    the regulatory process from a standards-based system to a performance-
    based system. What is the FRA response to that recommendation? Are any
    funds allocated for that purpose in the fiscal year 2000 budget? How
    much would such research cost?
        Answer. FRA agrees with the Transportation Research Board (TRB)
    Committee's recommendation. No funds are explicitly allocated for such
    work in the fiscal year 2000 budget request because the TRB Committee
    made its recommendation after the fiscal year 2000 budget had been
    finalized. The level of funding needed would be determined by the
    number and type of projects deemed appropriate.
                                  r&d staffing
        Question. Last year, FRA requested the authority to hire a
    communications specialist. That position was not approved. Is that
    position still needed? Is the communications specialist position
    included within the new positions requested for fiscal year 2000? Have
    you hired the additional track specialist that was approved? If not,
    why?
        Answer. The track specialist was hired and came on board April 12.
    The communications specialist position is not included in the fiscal
    year 2000 budget request. The position is not needed at this time.
                      new research projects and rulemaking
        Question. Please address how each of the new proposed research
    projects is tied into future rulemakings that FRA is likely to
    undertake.
        Answer. FRA is requesting a total of $2.082 million in new research
    funding in fiscal year 2000. Of this amount, $1.582 million is for
    equipment, operations and hazmat research. Funding supports five new
    projects; Wayside Inspection; ECP Brake Systems; Ergonomics; Teaming of
    Operating Personnel; and High-Speed Rail Simulator.
        The ECP Brake Systems project may lead to performance-based
    specifications for new electronic air brake systems. While the
    remaining projects do not support any rulemakings directly, they do
    support critical safety issues that may lead to future rulemakings in
    worker safety and high-speed rail operations.
        The remaining $500 thousand, which is requested under Track
    Research will support the evaluation of new sensor technologies, for
    the detection of train and vehicle presence in crossings, and the
    development of a prototype system for the non-destructive ultrasonic
    inspection of catenary wire. While both of these activities do not
    directly relate to any immediate rulemaking activity, they provide a
    potential for significant safety improvements.
                     trb participation in fra's r&d program
        Question. What is the funding status and outlook for continued
    support of the TRB review of the R&D program? Will you continue that
    activity after designated funds are expended? Please address those same
    issues with respect to the TRB review of the next generation program.
    Are funds budgeted for continued support of the TRB review within the
    fiscal year 2000 budget request?
        Answer. FRA agrees that it is desirable to use performance-based
    regulations wherever possible. It is often the case that the state of
    the art does not permit anyone to devise effective performance
    standards for particular issues. For the foreseeable future, it will be
    possible to devise performance standards for some, but not all, matters
    covered in any particular rulemaking. Almost all FRA safety rulemakings
    are now conducted through the Railroad Safety Advisory Committee
    (RSAC), through which any participant can propose a performance
    standard. Railroads, for example, are eager to use performance
    standards wherever possible and may be counted upon to recommend a
    performance standard every time they perceive one to be possible, but
    often no one knows how to frame a performance standard to address a
    particular issue.
        R&D can be most useful in trying to develop performance standards
    on issues anticipated in rulemakings FRA plans to pursue within the
    next few years. That is the fastest and most workable way to expand the
    use of performance standards in railroad safety rules.
        No additional funds are explicitly identified for such work in the
    fiscal year 2000 budget request because the recommendation from the
    Transportation Research Board committee was made after the fiscal year
    2000 budget request was in final form. The level of funding needed
    would be determined by the number and type of projects deemed
    appropriate.
                            fra's five-year r&d plan
        Question. Has the five-year research and development plan requested
    by the [Senate Appropriations] Committee been released? If not, please
    explain why. Does the plan need to be updated now? Has the plan been of
    benefit to FRA?
        Answer. FRA's five-year R&D plan has not been released. The first
    draft, which was distributed informally for comment, was retracted due
    to the time lapse in the review process. FRA's current five-year R&D
    plan should be completed by late summer. Once the plan is released, it
    will be updated every two years.
                            r&d contracts with volpe
        Question. Please list all FRA research and development program
    contracts with the Volpe National Transportation Systems Center that
    were signed in fiscal years 1998 and 1999, including a short summary of
    each specific contracted project, and the associated amount.
        Answer. The information follows for each Project Plan Agreement.
                         rr--19 track systems research
        The Track Systems Research Program focuses on the risk of
    derailment induced by track defects. Research results enable track
    engineers to base inspection and maintenance resources on actual track
    performance. Specific tasks are based on accident statistics, track
    maintenance costs, and engineering expectations of potential problems.
        The results of this research have been incorporated in the risk
    management strategies of railroads throughout the United States, and
    are being applied by the FRA in the development of revisions to current
    track safety standards. Analysis tools and studies, conducted under
    this program, have provided the FRA with data for use in evaluation of
    waiver requests and monitoring performance under waivers issued.
        Research activities under this program include:
      --Rail Integrity
      --Track Structural Mechanics
      --Track Inspection Tools
      --Vehicle Track Interaction
      --Train Control Device Safety
      --Risk Assessment and Management Strategies
      --Special Projects related to Track Systems Safety
        FUNDING: Fiscal year 1998--$1,917,000; Fiscal year 1999--
    $1,300,000.
                          rr--28 rail equipment safety
        The Rail Equipment Safety Program supports FRA's research in
    railroad equipment, operating practices (including human factors), and
    hazardous material transport. The research and engineering studies
    provide the technology needed to reduce the likelihood of accidents
    related to the design, operation, and maintenance practices of railroad
    freight and passenger equipment. These results will be applied to
    assess the risk of derailment induced by equipment and component
    defects and operating practices, including human performance, to
    minimize these risks.
        Research activities under this program include:
      --Structural Integrity of Tank Cars/Components
      --Human Factors Influencing Operator and Crew Performance (Fiscal
            Year 1998)
      --Advanced Operation and Information Displays (Fiscal Year 1998)
      --Train Make-Up, Handling, and Controls
      --Rail Passenger Evacuation Safety
      --Rail Equipment Collision Safety
      --Rail Vehicle Dynamics
      --Dedicated Train Study
      --Advanced Risk Analysis
      --Trailer/Container Securement
      --Steam Locomotive Study
      --Locomotive Fuel Tanks
        FUNDING: Fiscal year 1998--$2,590,000; Fiscal year 1999--
    $2,990,000.
                 rr--93 high-speed ground transportation safety
        This project provides FRA with technical assessments of the safety
    implications of implementing advanced high-speed ground transportation
    systems proposed for construction in the United States.
        Research activities under this HSGT program include:
      --Advanced Train Control and Automation Safety
      --Risk Assessments and System Safety Analyses
      --Human Factors and Automation (Fiscal Year 1998)
      --Right-of-Way Structures (Guideway Integrity; Platform Safety)
      --Equipment Safety (Crashworthiness; Interior Safety; Glazing)
      --Vehicle/Track Interaction (Track Safety Standards)
      --Emergency Preparedness (Fiscal Year 1998)
      --Fire Safety
      --Noise Identification and Mitigation
      --EMI/EMC and Electrical Safety
      --Electromagnetic Fields and Maglev Environmental and Health Safety
            Issues
        FUNDING: Fiscal Year 1998--$2,650,000; Fiscal Year 1999--
    $2,560,000.
                   rr--97 highway-rail grade crossing safety
        The Volpe Center is supporting FRA's highway-rail grade crossing
    safety research program. This research includes innovative warning
    signs, more reliable active signal systems, techniques to increase the
    conspicuity of trains, improved acoustic warning systems, and
    technologies applicable to the needs of high-speed rail passenger
    service. Other initiatives include enforcement and education activities
    as well as a greater emphasis on the human response to grade crossing
    warning device applications. Accident statistics, analysis, and
    research reviews are also included. On-going demonstration projects are
    being evaluated. Corridor risk assessments are included. Funding comes
    from both the R&D program and the Next Generation High-Speed Rail
    program.
        Research activities under this program being conducted at the Volpe
    Center include:
      --Grade Crossing Statistics Analysis
      --Causal Analysis of Crossing Accidents (Fiscal Year 1998)
      --Evaluation of High-Speed Rail Grade Crossing Demonstration Projects
      --High-Speed Corridor Risk Assessment
      --Illumination Guidelines
      --Locomotive Conspicuity
      --Freight Car Reflectorization
      --Optimal Acoustic Warning Systems (Fiscal Year 1998)
      --Wayside Horn Systems
      --Driver Behavior (Fiscal Year 1998)
      --Driver Education Programs
      --Photo Enforcement
      --Obstacle and Intrusion Detection
      --Vehicle Proximity Alerting System
        FUNDING: Fiscal year 1998--$1,475,000; Fiscal Year 1999--$770,000.
                 rr--03 next generation high-speed rail support
        This work is funded under the Next Generation High-Speed Rail
    budget rather than the Research and Development budget and provides
    support to the FRA's Next Generation High-Speed Rail Program. The
    purpose of this effort is to enhance the deployment of high-speed
    passenger rail, particularly on existing infrastructure, by improving,
    adapting and demonstrating innovative and cost-effective technologies
    which have wide application in U.S. corridors.
        The Volpe Center provides technical support to the FRA in assessing
    candidate technologies and procedures to determine the likely impact on
    rail operations, including safety, performance, reliability and
    economic viability.
        Research activities conducted under this program include:
      --High-Speed Positive Train Control
      --High Performance Non-Electric Locomotive Development
      --Innovative Technologies for Track and Structural Improvements
      --Railroad Test Track Upgrade
        FUNDING: Fiscal year 1998--$502,000; Fiscal Year 1999--$400,000.
                     rr-04 human factors support to the fra
        This effort includes investigating how human performance
    contributes to operator health and safety in railroad operations,
    identifying methods for reducing accidents, and improving working
    conditions.
        This is a new activity in fiscal year 1999 and includes activities
    previously included under RR-28, RR-93, and RR-97.
        Research activities under this program include:
      --Automation, Information Management and Control
      --Locomotive Cab Ergonomics
      --Train Crew Fatigue and Napping
      --Operating Rules
      --Design and Evaluation of Acoustic Warning Devices
      --Causal Analysis of Accidents
      --Evaluation of Driver Behavior
        FUNDING: Fiscal year 1999--$1,403,000.
                          r&d program & safety support
        Question. The United Transportation Union has suggested a goal of
    spending 20 percent of FRA's total R&D program funding for
    comprehensive safety training, peer group education, and better
    uniformity and understanding of railroad operating and safety rules and
    federal regulations. Does your fiscal year 2000 budget request reach
    this goal? What percentage is directed toward these activities?
        Answer. FRA's fiscal year 2000 request for R&D supports all of
    these goals. In fact, 98 percent of the R&D budget is safety-related.
    Activities include studies, analyses, evaluations, simulations, tests,
    and demonstrations which are directly related to high risk safety
    issues. The R&D program already considers funds for safety training,
    peer group education, and better uniformity and understanding of
    railroad operating and safety rules and federal regulations to the
    extent that such efforts would reduce safety risks within the railroad
    industry.
                        rail passenger equipment testing
        Question. In fiscal year 1999, the appropriations conferees
    provided $2,000,000 for full-scale crash testing of rail passenger
    equipment. Has a contract for this research project been negotiated?
    What is the anticipated schedule for implementing this project? What
    funding, if any, is requested in fiscal year 2000 for this project?
    What follow-on costs will be required to complete the project?
        Answer. A contract is being negotiated with the Transportation
    Technology Center, Inc. of Pueblo, Colorado to conduct the full-scale
    crash test. It should be awarded within a month. A separate contract is
    being negotiated with Simula Inc. of Phoenix, Arizona to provide the
    instrumented crash dummies for testing passenger seats. A single-car
    test and a two-car impact test are currently scheduled to be conducted
    between July and September of this year. Of the $1,800,000 requested in
    fiscal year 2000 for continued research in occupant protection, most
    will be used to conduct a follow-on train-to-train in-line impact test
    of multiple passenger cars. Evaluation of oblique collisions of
    conventional equipment will be followed in fiscal years 2001 and 2002.
                           r&d human factors program
        Question. Please provide an update of the progress that has been
    made in the human factors program since last year. How much of the
    fiscal year 1997, 1998, and 1999 allocated funds have been spent, and
    for which purposes?
        Answer. Following is a summary of the progress on projects during
    fiscal year 1998, project objectives, and funding for FYs 1997 and 1998
    and 1999. New phases or extensions of on-going research are identified
    where applicable.
    Train Operations
        1. A study design for Engineer Napping Strategies is expected to be
    finalized in June 1999. In fiscal year 1998, a system safety check of
    the Research And Locomotive Evaluator Simulator identified several
    safety issues which delayed the pilot test. The pilot test will result
    in refinements to the test and analysis approaches and the results will
    be incorporated in the next test phase. The primary purpose of this
    research is to determine to what extent and what types of on-duty
    napping can improve locomotive engineer performance and safety.
    Realistic guidelines can then be developed for the implementation of
    strategic napping policies in the industry.

    Fiscal year 1997..............................................  $370,000
    Fiscal year 1998..............................................   400,000
    Fiscal year 1999..............................................   150,000

        2. A preliminary catalogue of Vigilance Monitoring devices,
    suitable to non-obtrusively measure alertness in on-duty locomotive
    engineers, was completed in January 1999. Suitable devices will be used
    in simulated and revenue operations to gather data and test their
    usefulness in the railroad operating environment. The purpose of these
    tests is to provide information on the validity and reliability of such
    devices, for the use of railroads which may wish to use this technology
    to manage employee fatigue.

    Fiscal year 1997........................................................
    Fiscal year 1998..............................................  $300,000
    Fiscal year 1999..............................................   300,000

        3. Pilot tests of data collection and analysis methodologies for
    Dispatcher Workload, Stress and Fatigue were completed during 1998, and
    full-scale tests in freight and passenger operations were begun in
    early 1999. Methods of measuring workload, stress and fatigue
    (alertness) in a uniform manner and thresholds for safe performance are
    to be established.

    Fiscal year 1997..............................................  $225,000
    Fiscal year 1998..............................................   225,000
    Fiscal year 1999..............................................   200,000

        4. New technology in the form of communications and computerization
    is changing the way that railroads operate. Previously, the effects of
    new technology, such as automation and information-mediated fatigue on
    locomotive engineer vigilance (High-Speed Operator Stress and Fatigue),
    was only considered in high-speed operations. Several studies specific
    to high-speed operations have recently been completed at the Volpe
    Center and final reports are in review. These studies evaluated
    situational awareness and the monitoring of equipment failures under
    three operational conditions: manual control, cruise control, and full
    automation, and examined the role of preview displays in operator
    workload and performance. The project focus has now been expanded to
    include all railroad operations because of the rapid introduction of
    technology throughout the industry, and the project has been renamed
    Information Management and Control in Railroad Operations. The project
    will determine the safety implications of increased information flow
    and new technology for information management in normal and high-speed
    operations for locomotive engineers and dispatchers.

    Fiscal year 1997..............................................  $100,000
    Fiscal year 1998..............................................   200,000
    Fiscal year 1999..............................................   200,000

        5. The final report on Dispatcher Training Evaluation was published
    in 1998, and a workshop on the findings of the report was held in
    Chicago in October, 1998. Workshop participants expressed a need for
    information concerning the selection of personnel for dispatcher
    training, and this issue will be addressed in subsequent work under
    this project.

    Fiscal year 1997..............................................  $100,000
    Fiscal year 1998..............................................    57,000
    Fiscal year 1999..............................................   200,000

        6. The Advanced Display Interface project develops innovative
    information displays to improve information management by locomotive
    engineers, dispatchers and traffic managers. Virtual reality displays
    and associated software were developed and completed in January 1998. A
    video demonstration of the displays was completed in September 1998.
    Future work will document the software and explore a test site in which
    to demonstrate the applicability of the display to revenue service.

    Fiscal year 1997..............................................  $200,000
    Fiscal year 1998..............................................   200,000
    Fiscal year 1999..............................................    78,000

        7. A new initiative, Evaluation of Human Factors Safety Issues in
    Digital Communications, was begun in fiscal year 1999. This multi-year
    project will examine the human factors implications of using digital
    communications between locomotive engineers and dispatchers. Currently,
    such communications are by voice which has proven to be less efficient
    and precise than digital communications. Transition from voice to
    digital communications will change the task of the locomotive engineer,
    therefore the human factors effects of this transition need to be
    evaluated.

    Fiscal year 1997........................................................
    Fiscal year 1998........................................................
    Fiscal year 1999..............................................  $100,000

        8. A new initiative, Post-Accident Stress in Locomotive Engineers,
    began in fiscal year 1999. In its first phase, this project will
    determine the descriptive epidemiology (incidence and prevalence) of
    Post-Traumatic Stress Disorder (PTSD) in locomotive engineers resulting
    from on-duty crashes. PTSD is debilitating and may compromise safety,
    so the magnitude of the problem is important to determine future
    resource allocation. The second phase will develop a model treatment
    intervention for locomotive engineers immediately following crashes
    that result in traumatic injuries or loss of life.

    Fiscal year 1997........................................................
    Fiscal year 1998........................................................
    Fiscal year 1999..............................................  $100,000

        9. Operating rules form the basis of safe operations in the
    railroad industry. Previous work on the Operating Rules Evaluation
    project has focused on the influence of railroad corporate culture on
    compliance with operating rules. A final report on this study is
    currently being prepared for publication. All safety procedures,
    including operating rules continuously expand and increase in numbers
    to avoid past accidents and incidents. These additions to the rule
    books become increasingly restrictive over time and reduce the range of
    permitted actions to far less then what is necessary to complete a job
    under normal conditions. As a result, compliance with rules decreases,
    and the rules no longer function to promote safety. A major railroad
    has requested assistance to consolidate all their safety rule books
    currently in use (8) into a single book. The consolidation should
    enhance safety and provide a model for other railroads. This work was
    begun in fiscal year 1999 and is expected to continue into fiscal year
    2000.

    Fiscal year 1997........................................................
    Fiscal year 1998..............................................   $50,000
    Fiscal year 1999..............................................    50,000

        10. The Non-Accident Hazmat Releases: Training Issues project was
    recently completed, and a final report on the project is under review.
    The project examined training materials for employees who load (and
    unload) hazardous materials onto rail cars to determine if the reading
    level of the training materials was appropriate for the educational and
    reading level of the employees.

    Fiscal year 1997..............................................   ( \1\ )
    Fiscal year 1998........................................................
    Fiscal year 1999........................................................

    \1\ Funded in fiscal year 1996.

    Yard and Terminal
        A report on Phase 1 of the multi-phase Yard and Terminal Safety
    study entitled ``Railroad Worker Safety in Yards and Terminals: An
    Evaluation of Existing Data Resources and Proposed Methods for Further
    Study'' was finished in the Spring of 1997. Based on that report, Phase
    2 has been using the information sources and evaluation techniques
    identified in Phase 1 to characterize the practices and conditions that
    contribute to yard and terminal injuries. Phase 2 is expected to be
    completed in fiscal year 2000.

    Fiscal year 1997..............................................  $150,000
    Fiscal year 1998..............................................   150,000
    Fiscal year 1999..............................................   150,000

    Grade Crossings
        Several projects have been completed, and reports have been
    published, under the overall heading of Grade Crossing Safety; in the
    review or revision stage are--Recognition of Rail Car Marking Patterns;
    recently published are--Evaluation of Wayside Horns and Railroad Horn
    Systems Research; ongoing or recently initiated are--Optimal Acoustic
    Warning Systems, Driver Behavior, Accident Causation Analysis, and a
    review of Driver Education Programs.

    Fiscal year 1997..............................................  $385,000
    Fiscal year 1998..............................................   435,000
    Fiscal year 1999..............................................   435,000

              fiscal year 2000 funding for human factors research
        Question. What human factors initiatives are supported in the
    fiscal year 2000 budget request? What new initiatives are supported by
    the $1,200,000 requested increase? Which of these initiatives are
    fatigue-related?
        Answer. The Human Factors program includes continued work in stress
    & fatigue (on-duty napping, dispatcher fatigue, yard and terminal
    operator fatigue, high-speed operations), yard and terminal safety, and
    digital communications.
        There are several new Human Factors initiatives in the fiscal year
    2000 budget request, including: evaluation of ergonomic injuries in
    yards and terminals, evaluation of advanced displays (ergonomics),
    evaluation of Maintenance of Way (MOW) safety issues (fatigue and
    ergonomics), teaming of operating personnel, and evaluation of Amtrak's
    high-speed rail simulator for possible use as a research simulator.
    These initiatives were highlighted on pages 88 and 89 of FRA's budget
    justification.
        The only new fatigue-related initiative in the fiscal year 2000
    budget is research on Maintenance of Way safety issues, which includes
    fatigue as a focus. Evaluation of a high-speed simulator for research
    use may lead to future use of the simulator for evaluating fatigue
    issues related to high-speed operations.
                      r&d fatigue countermeasures programs
        Question. What is FRA doing either to monitor or evaluate working
    schedule pilot programs or other fatigue countermeasures now being
    implemented by various railroads? Is any work planned in this area for
    fiscal year 2000? Are any fiscal year 2000 funds requested for such
    evaluation? How is FRA's fatigue research coordinated with these
    private sector activities?
        Answer. As a member of the North American Rail Alertness
    Partnership (NARAP), FRA's Office of Research and Development actively
    monitors and evaluates the pilot programs and fatigue countermeasures
    currently being implemented by various railroads. For example, each of
    the member railroads presented a summary of their fatigue management
    plans during the February 1999 NARAP meeting. Various aspects of the
    pilot projects are then discussed during the Research and Development
    Committee meetings. The Office of Safety and other industry contacts
    keep the Office of Research and Development informed about on-going
    fatigue initiatives in the industry. The Office of Research and
    Development evaluates the details of these proposals and then provides
    an opinion regarding the safety of their implementation. The FRA is
    sponsoring a NARAP workshop on Program Evaluation during the next NARAP
    meeting in May 1999. This workshop will provide basic evaluation skills
    to those industry representatives responsible for their railroad's
    Fatigue Management Program as well as reference materials for future
    use. The goal is to help the industry develop more effective evaluation
    programs for pilot fatigue programs currently being implemented.
        The FRA will continue its study on the Effects of On-Duty Napping
    on Locomotive Engineer Performance in fiscal year 2000. Results of this
    study will help the FRA evaluate the variety of napping strategies
    currently being implemented in the railroad industry. It will also help
    the FRA develop better napping policy guidelines. Discussions are also
    underway to assist a major carrier with the evaluation of their Fatigue
    Management program during fiscal year 2000. Through the Non-Operating
    Subcommittee of NARAP, the FRA will help the industry identify
    potential fatigue and work schedule issues of non-operating employees,
    and then help them develop an implementation and evaluation program
    aimed at non-operating employees. In fiscal year 2000, a new initiative
    in ergonomics includes a project on MOW safety and will include
    fatigue-related evaluation projects. A total of $650 thousand is
    included in the fiscal year 2000 budget for these projects.
        FRA's fatigue research is coordinated with the private sector
    activities mainly through NARAP. The FRA R&D Office distributed its
    draft protocol on the locomotive engineer napping study to all NARAP
    member railroads for comment and feedback. The FRA has also offered to
    hold a one-day facilitated workshop on fatigue research needs in the
    railroad industry. Once specific fatigue and work schedule issues have
    been clearly identified through the Non-operating Subcommittee of
    NARAP, the FRA plans to conduct a demonstration project on a particular
    aspect of the findings from those efforts. Other collaborative efforts
    for evaluating fatigue programs in the railroad industry will also be
    explored.
                 status of advanced braking systems evaluation
        Question. Please summarize the progress made to date regarding the
    ``Advanced Braking Systems Evaluation.'' What is your five-year plan
    with regard to testing and evaluating that technology? How much has
    been spent on this effort for each of the last three years and how much
    is proposed for fiscal year 2000?
        Answer. FRA worked co-operatively with industry in the development
    of industry performance and interchange requirements for an advanced
    electronically-controlled pneumatic braking system (ECP). Those
    requirements include performance specifications, communications
    specifications, connector specifications, and locomotive specifications
    for the cable-based ECP system. ECP braking systems provide improved
    braking response and performance, faster brake application and release,
    graduated release, and continuous monitoring of brake system status.
    FRA supported the safety-related work inherent in the development of
    those specifications including safety-oriented laboratory tests and in-
    train tests at the Transportation Technology Center (TTC), testing
    advanced braking systems in a number of unit train applications, and
    revenue service tests. Those trainsets use the hard-wired power source
    (as opposed to local battery/generator on each freight car) and a hard
    wire for signal transmission. The safety of those trainsets is being
    closely monitored, with failures of individual components being
    recorded. In fiscal year 1999, the final Failure Modes and Effects
    Criticality Analysis (FMECA) of the cable-based ECP freight train
    braking system will be completed. The FMECA is a systematic method used
    to anticipate failure modes, design and development problems, as well
    as provide a pro-active problem-solving approach to identify design
    process pitfalls. The specifications for cable-based ECP brakes have
    been adopted and the remaining related specifications are under
    development through AAR and railroad leadership and are scheduled to be
    completed in 1999. To extend the use of Advanced Braking Systems to
    non-unit train cars, that is, the general service car, FRA is
    sponsoring the development of automatic couplers with built-in air and
    electric lines and added mechanical safety features. This will
    facilitate coupling of cars and enhance crew safety. This project is in
    its early stage and will continue over several years.
        FRA's five year plan includes interoperability testing as ECP
    systems from final stages of development to final specifications,
    implementation, and monitoring of ECP technology into the car fleet.
    Beyond fiscal year 1999, the safety record will be monitored and
    additional control and surveillance functions will be proposed for
    addition to the total ECP system. As with all new technologies, new
    variants appear on the scene. Radio-based signal transmission means
    have been proposed by new entrants. A safety assessment of those new
    technologies will be required as with the hard-wired systems. In fiscal
    year 2000, additional funding is requested to initiate a review of the
    hardware and software reliability. Regardless of the communications
    medium, hard-wired or radio-based, ECP brakes require extremely
    reliable hardware and software since they will control safety critical
    braking system and potentially interface with future Positive Train
    Control and on-board sensor systems. New research initiatives will
    focus on additional on-board condition monitoring systems to be
    incorporated with ECP brake technology. The on-board condition
    monitoring will continuously monitor the condition of equipment and
    components and provide early detection of possible failures. An
    advanced user-friendly handbrake will also be developed to operate in
    conjunction with ECP brakes. The advanced handbrake will promote safe
    and easy braking operations.
        Funding for the last three years and the fiscal year 2000 request
    is as follows:

    Fiscal year 1997..............................................  $150,000
    Fiscal year 1998..............................................   250,000
    Fiscal year 1999..............................................   275,000
    Fiscal year 2000 (request)....................................   425,000
            status of wayside equipment inspection detection program
        Question. Please summarize the progress made to date regarding the
    Wayside Equipment Inspection Detection Program. What is your strategic
    plan for the next five years in this area? How much has been spent on
    these efforts for each of the last three years and how much is proposed
    for fiscal year 2000? Why is a proposed increase in the level of
    support for this program necessary in fiscal year 2000?
        Answer. FRA has supported and developed a number of measurement
    system methodologies to establish car and train stability, equipment
    performance or lack thereof, and the means to record and transmit data
    for appropriate use. These include wheelset angle-of attack, lateral/
    vertical loads, bearing temperatures, and wheel temperatures. Recently,
    FRA has funded research to measure wheel residual stress, an all-
    important determinant of wheel structural integrity, using an
    electromagnetic acoustic transducer (EMAT) system. Another project is
    to develop an acoustic detector for identifying potentially unsafe
    bearings. Phase I laboratory investigations and Phase II field
    investigations of acoustic bearing defect detection system have been
    successfully completed. Those tests determined that proposed acoustic
    systems may be utilized in a simulated revenue service operation to
    identify typical bearing defects. A Phase III test is proposed to
    evaluate the performance of prototype bearing defect inspection/
    detection systems and identify potential improvements in preliminary
    wayside acoustic detection systems to enhance system performance with
    regards to reliability and repeatability. Inspection strategies for
    freight cars based solely on visual inspections have limitations.
    Periodic required inspection and maintenance is expensive. Condition-
    based inspection and subsequent maintenance and repair may improve the
    use of resources. Plans have been made to establish a full-scale
    wayside inspection station demonstration in cooperation with a railroad
    to demonstrate various types of wayside detectors. The wayside
    inspection station will detect defective and malfunctioning equipment
    and dispatch the vital information to train operators and/or databases
    for use in mitigating accidents and optimizing maintenance procedures.
    In time, it should be possible to establish a network of stations
    geographically positioned for full coverage thereby giving the railroad
    the ability to monitor its fleet for condition.
        Funding is as follows:

    Fiscal year 1997..............................................  $300,000
    Fiscal year 1998..............................................   300,000
    Fiscal year 1999..............................................   300,000
    Fiscal year 2000 (request)....................................   532,000

        The requested increase, in fiscal year 2000, is needed to conduct
    critical safety evaluations of the components and entire wayside
    inspection system, especially for the automation of data collection and
    retrieval and high-speed thermal imaging systems.
                  volpe's support in grade crossing activities
        Question. It has come to the Committee's attention that FRA has
    contracted with the Volpe National Transportation Systems Center to
    prepare a research plan on the safety of highway-railroad grade
    crossings. When was this contract awarded? What funding source was
    used, and how much is the contract? Is any funding requested for this
    contract in fiscal year 2000? This research plan appears to be
    duplicative of Operation Lifesaver efforts. In the research plan, it is
    stated that, ``The Volpe Center will take the lead, working along with
    participants in the workshops, to develop materials and programs for
    use to improve the safety of the public through education and
    training.'' Operation Lifesaver has a 6-year contract, through TEA-21,
    to develop these materials and programs. Does it make sense that the
    Volpe Center would take the lead on crossing safety education and
    training nationally?
        Answer. FRA and the Volpe Center have had Project Plan Agreements
    (PPA) for Highway-Railroad Grade Crossing Safety Research for a number
    of years. The program areas covered under the PPA include core
    knowledge; project evaluation; whole corridor; ITS/PTC; passive
    crossings; improved components; and driver factors.
        For fiscal year 1999, a total of $545,000 includes $215,000 from
    the Equipment, Operations and Hazardous Materials activity and $330,000
    from the Safety of High-Speed Ground Transportation activity.
    Equivalent funding is requested in fiscal year 2000.
        FRA does not believe that the PPA research plan is duplicative of
    Operation Lifesaver efforts. One of the initiatives identified in the
    Department of Transportation's 1994 Action Plan for Rail-Highway Grade
    Crossing Safety was the need for an intermodal Research Needs Workshop.
    In April, 1995 the Volpe Center, as part of its support program to the
    FRA, hosted and conducted the Highway-Railroad Grade Crossing Safety
    Research Needs Workshop and any of the research projects under this PPA
    are a direct result of this Workshop. Key members of the Operation
    Lifesaver team participated in the Research Needs Conference in 1995,
    including Cliff Shoemaker of the UP Railroad and Secretary/Treasurer of
    the Operation Lifesaver Board of Directors, Tom Simpson, Vice-President
    of RPI and a Board Member of Operation Lifesaver, and Ms. Ernie
    Oliphant, currently Arizona's Operation Lifesaver State Coordinator.
        One of the top five research priorities identified at the Research
    Needs Workshop was Driver Education. Specific research topics which
    were identified included:
      --Determining Target Audiences;
      --Survey of Current and Completed Research (regarding public
            education);
      --Survey of Existing Programs;
      --Funding Sources;
      --Operation Lifesaver Program Evaluation;
      --Driver Education Evaluation;
      --Crossing Safety Media Evaluation;
      --Trespassing Media Evaluation;
      --Sensitivity of Education to Age and Approach; and
      --High Speed Rail.
        The Volpe Center convened another workshop in San Antonio in March,
    1999 to follow-up on these identified needs, to determine if they were
    still current, and to structure a coordinated research program with as
    many stakeholders as could be identified. Operation Lifesaver was well
    represented and will be involved as decisions are made for specific
    research projects. In the Volpe proposed research plan for the Driver
    Education research area, prepared for discussion at the Panel of
    Experts Workshop, Volpe proposed that ``The Volpe Center will take the
    lead, working along with the participants in the workshops, to develop
    materials and programs for use to improve the safety of the public
    through education and training.'' The proposed research plan included
    this statement to elicit comments from stakeholders on whether there
    were material and program development areas requiring Volpe Center
    leadership.
        It is not FRA's intent for the Volpe Center to take the lead on
    crossing safety education and training nationally unless the various
    stakeholders in the project, including Operation Lifesaver, American
    Automobile Association, Driving School Association of the Americas,
    American Bus Association, National Association of State Directors of
    Pupil Transportation Services, National Association for Pupil
    Transportation, and the Transportation Safety Institute indicate that
    there is a need for the Volpe Center to do so in particular areas. The
    primary focus of FRA's Driver Education project's being carried out at
    the Volpe Center is on surveying the various existing driver education
    programs and research, determining target audiences and sources of
    funding for driver education programs, and determining the
    effectiveness of driver education programs for grade crossing safety.
    The results will be available to all stakeholders for their use.
                         fhwa section 130 safety funds
        Question. Please confer with the Federal Highway Administration,
    and report on available section 130 surface transportation program
    safety funds, on a state-by-state basis, for fiscal years 1997, 1998,
    1999, 2000 and 2001. Please indicate unobligated balances for each
    state's total available section 130 funds.
        Answer. Data in the following table has been taken from FHWA
    Appropriation Tables for fiscal years 1997 through 1999 and a listing
    provided by FHWA's Fiscal Division on unobligated balances. FHWA
    advises that similar data for fiscal years 2000 and 2001 are not yet
    available, however, since ISTEA, the law requires that States will
    continue to fund the Section 130 program at levels identical to 1991.
    It is not expected that the appropriation amounts will change
    materially during the course of TEA-21. Notes: Figures are dollars
    stated in millions. Columns may not total properly due to rounding.
    Unobligated figures are Section 130 balances as of year-end for fiscal
    years 1997 and 1998 and as of March 31 for fiscal year 1999.

    ----------------------------------------------------------------------------------------------------------------
                                          Fiscal year 1997           Fiscal year 1998           Fiscal year 1999
                 State              --------------------------------------------------------------------------------
                                     Appropriated  Unobligated  Appropriated  Unobligated  Appropriated  Unobligated
    ----------------------------------------------------------------------------------------------------------------
    Alabama........................       3.22           .86         3.22          2.47         3.22          5.428
    Alaska.........................       2.439         4.795        2.439         6.878        2.439         8.462
    Arizona........................       1.576         3.908        1.576         5.096        1.576         5.466
    Arkansas.......................       2.457         1.339        2.457         3.482        2.457         4.185
    California.....................      10.183    ...........      10.183         3.45        10.183         5.678
    Colorado.......................       2.203         1.468        2.203         1.253        2.203         3.482
    Connecticut....................       1.048          .678        1.048          .822        1.048          .979
    Delaware.......................        .505          .314         .505          .86          .505         1.223
    District of Columbia...........        .211          .421         .211          .632         .211          .843
    Florida........................       4.687         4.2          4.687         5.574        4.687         8.33
    Georgia........................       4.696         6.803        4.696         8.19         4.696        11.037
    Hawaii.........................        .392          .392         .392          .784         .392          .784
    Idaho..........................       1.429    ...........       1.429          .943        1.429         1.968
    Illinois.......................       7.926         3.124        7.926         8.093        7.926        12.82
    Indiana........................       4.962         6.408        4.962         6.81         4.962         7.805
    Iowa...........................       3.796         1.906        3.796         4.176        3.796         3.688
    Kansas.........................       3.287          .101        4.871         1.754        4.871          .953
    Kentucky.......................       2.535         5.806        2.535         4.031        2.535         5.462
    Louisiana......................       3.176         2.662        3.176         1.845        3.176         2.293
    Maine..........................        .938         2.156         .938         2.381         .938         3.339
    Maryland.......................       1.427         2.384        1.427         2.539        1.427         4.369
    Massachusetts..................       2.011          .215        2.011         2.784        2.011         4.795
    Michigan.......................       5.352         2.851        5.352         3.894        5.352         8.168
    Minnesota......................       4.042         4.275        4.042         5.482        4.042         7.962
    Mississippi....................       2.24           .502        2.24          1.352        2.24          3.237
    Missouri.......................       3.998          .242        3.998         1.248        3.998          .168
    Montana........................       1.613         2.27         1.613         3.233        1.613         4.572
    Nebraska.......................       2.661         3.624        2.661         5.101        2.661         7.731
    Nevada.........................        .784          .818         .784          .211         .784          .85
    New Hampshire..................        .613          .351         .613          .242         .613          .839
    New Jersey.....................       2.691          .437        2.691         2.453        2.691         4.829
    New Mexico.....................       1.206          .998        1.206         1.199        1.206         1.437
    New York.......................       6.02          1.524        6.02          3.623        6.02          3.656
    North Carolina.................       3.981         1.085        3.981         5.277        3.981         9.86
    North Dakota...................       2.809         1.125        2.243          .507        2.647         2.437
    Ohio...........................       6.302         2.305        6.302         1.098        6.302         3.952
    Oklahoma.......................       3.301          .317        3.301          .241        3.301         1.837
    Oregon.........................       2.194         5.508        2.194         6.127        2.194         7.465
    Pennsylvania...................       5.118          .076        5.804         1.701        5.804         5.936
    Rhode Island...................        .445          .5           .445          .945         .445         1.39
    South Carolina.................       2.585          .418        2.585         2.097        2.585         4.41
    South Dakota...................       1.655         2.694        1.655         3.292        1.655         3.706
    Tennessee......................       3.267          .992        3.267         2.954        3.267         2.305
    Texas..........................      10.906         2.29        10.906        11.225       10.906        11.235
    Utah...........................       1.153         2.167        1.153         2.194        1.153         1.353
    Vermont........................        .619         2.753         .619         2.841         .619         3.274
    Virginia.......................       2.731         4.605        2.731         3.344        2.771         8.513
    Washington.....................       2.717         4.838        2.717         6.267        2.717         8.823
    West Virginia..................       1.708         1.098        1.708         1.327        1.708         1.239
    Wisconsin......................       3.929         8.685        3.929         9.018        3.929         5.448
    Wyoming........................        .912          .075         .912          .471         .912          .841
    Puerto Rico....................        .74     ...........  ............        .043   ............  ...........
                                    --------------------------------------------------------------------------------
          Total....................     153.40        109.36       154.36        163.85       154.77        230.86
    ----------------------------------------------------------------------------------------------------------------

            use of section 402 funds for grade crossing initiatives
        Question. To what extent can Section 402 funds be used to encourage
    enforcement of traffic safety laws at highway-rail crossings,
    especially those equipped with automatic warning devices and those
    provided with ``STOP'' signs? Will innovative pilot programs designed
    to increase enforcement be established in accordance with the NTSB
    recommendations? If not, please explain why. Is the Department doing
    anything to encourage the use of the Section 402 funds for those
    activities?
        Answer. Section 402 funds can be used, at the discretion of the
    state, for a number of highway safety programs including enforcement of
    traffic safety laws at highway-rail crossings. Following the
    transmittal of NTSB's Safety Recommendations to the Department on
    August 11, 1998, a ONE DOT working group was formed to focus anew on
    issues of traffic safety at highway-rail crossings. Based on
    recommendations from the ONE DOT group, the Department responded
    affirmatively to NTSB and outlined its outreach to state and local law
    enforcement agencies regarding their plans for programs that increase
    enforcement of traffic laws at highway-rail crossings. Innovative pilot
    programs could be developed from the ideas suggested by states. While
    these ideas are being collected, FRA and NHTSA are actively working
    together to encourage states to develop and support Safe Communities
    programs that address highway-rail crossing enforcement and education
    with their Section 402 funds.
           fiscal years 1996-1999 use of 402 funds for grade crossing
        Question. In the Department's 1994 Highway-Rail Crossing Safety
    Action Plan, NHTSA and FHWA committed to advising states of the
    potential use of Section 402 funds to promote targeted public
    education, engineering and law enforcement strategies at highway-rail
    crossings. Has there been an increase in the use of Section 402 funds
    for such purposes? Please provide a table, by state and by year,
    tracking the use of Section 402 funds for crossing safety improvements
    since 1994.
        Answer. As part of the Department's 1994 Rail-Highway Crossing
    Safety Action Plan, NHTSA and FHWA issued joint guidance advising the
    states that Section 402 funds may be used to address significant
    highway-rail crossing problems. Examples of activities that could be
    funded included crash analysis, public information and education
    campaigns, law enforcement, crash investigation training, and traffic
    engineering studies. This guidance was issued on November 4, 1994
    (after the start of fiscal year 1995), for use in preparing Section 402
    highway safety plans beginning with fiscal year 1996. The table below
    shows the amount of Section 402 funding used for highway-rail crossing
    safety activities, by state, for fiscal year 1996 through fiscal year
    1999. The table shows an increase from fiscal year 1996 to fiscal year
    1997, then a decline in fiscal year 1998, and an increase expected in
    fiscal year 1999.
        The Department is currently examining proposals to suggest to the
    States using specific initiatives that have already shown safety
    results based on Section 402 funding. The Department plans to emphasize
    to states the safety potential for expanded use of Section 402 funds
    for grade crossing safety-related initiatives.

                                      STATE HIGHWAY-RAIL CROSSING SAFETY ACTIVITIES
    ----------------------------------------------------------------------------------------------------------------
                                                                                        Section 402
                                                                     -----------------------------------------------
                                  State                                                 Fiscal year
                                                                     -----------------------------------------------
                                                                         1996        1997        1998      1999 \1\
    ----------------------------------------------------------------------------------------------------------------
    Alabama.........................................................      $6,790      $7,500  ..........  ..........
    Arkansas........................................................       5,000       5,000  ..........      $6,000
    California......................................................  ..........  ..........     $10,000      40,000
    Delaware........................................................       3,580  ..........  ..........  ..........
    Georgia.........................................................      17,800      19,300      17,500      17,500
    Indiana.........................................................     105,207     138,000      67,000       5,000
    Kansas..........................................................      17,200      10,000      10,000      10,000
    Louisiana.......................................................      25,000       1,263      21,000      21,000
    Missouri........................................................       5,000       5,000       5,000       5,000
    Nebraska........................................................       1,707       2,000       2,072       2,000
    North Carolina..................................................      28,000      33,000      33,000      33,000
    Ohio............................................................      15,000      35,000  ..........     300,000
    Oklahoma........................................................      11,000  ..........  ..........  ..........
    Pennsylvania....................................................      20,000      15,000  ..........  ..........
    South Carolina..................................................  ..........       7,598  ..........  ..........
    Utah............................................................  ..........       5,000      20,000  ..........
    Virginia........................................................  ..........      60,000      40,000      50,000
    West Virginia...................................................       6,472  ..........  ..........       4,000
    Wisconsin.......................................................  ..........  ..........  ..........      30,000
    Wyoming.........................................................  ..........       3,000  ..........  ..........
                                                                     -----------------------------------------------
          TOTAL.....................................................     267,756     346,661     225,572     523,500
    ----------------------------------------------------------------------------------------------------------------
    \1\ Fiscal year 1999 are planned amounts.

                 nhtsa and fra efforts in grade crossing safety
        Question. NHTSA's Safe Communities initiative could be used as a
    means to promote both highway-rail crossing safety and rail right-of-
    way trespass prevention in community-level programs. Please discuss how
    NHTSA and FRA are collaborating to promote such activities.
        Answer. FRA is collaborating closely with NHTSA on the Safe
    Communities initiative, as are all other Modal Administrations. In
    communities with railroads, both crossing safety and trespass
    prevention are among the topics for potential emphasis as Safe
    Community programs are planned. Where FRA's Regional Managers have had
    the resources to fully participate, productive efforts with some focus
    on railroad related issues have evolved. Recent examples include
    intermodal Safe Communities programs in Seattle, Washington and El
    Paso, Texas. In both cities, highway-rail crossing safety and right-of-
    way trespass prevention are high priority elements of the program.
    Similarly, a project in Jonesboro, Arkansas has a full time director
    funded by NHTSA through the State. FRA is a part of the Jonesboro
    coalition which has achieved some success addressing crossing safety.
    (There were no crossing deaths in Jonesboro during 1998.) Among other
    Operation Lifesaver-type activities, the coalition arranged for the
    initial installation of THINK signs at four crossings in Jonesboro.
    Another Safe Community-related effort which the FRA promoted is on-
    going in Houston, Texas and involves a coalition of Houston's many
    railroads, the Houston Independent School District, Police Department,
    Parent-Teacher's Association and the Texas DOT. This effort is
    targeting trespass prevention and has the attention and participation
    of the Mayor and other city officials. In addition, FRA recently
    collaborated with NHTSA and FHWA to develop an Executive Intermodal
    Seminar to Promote Safe Communities. FRA is assigning key personnel to
    serve as seminar facilitators, to help foster sponsorship of Safe
    Communities through the network of rail customers and partners.
             grade crossing & other equipment & operations projects
        Question. What is the status and findings of the following
    projects:
      --A crosscutting review or assessment of different high-speed rail
            demonstration projects and the technologies being advanced in
            these projects;
      --Reasons drivers violate grade crossing devices and signs; and
      --A crosscutting review of grade crossing technology?
        Answer. The crosscutting review or assessment of different high-
    speed rail demonstration projects and the technologies being advanced
    in these projects is entitled ``Problem Definition: At-Grade Crossings
    for High-Speed Rail Applications''. The draft final report was
    published in June, 1994. The report outlines the existing situation of
    the grade crossing problem in each of the designated corridors: the
    number of public and private crossings; condition of the National
    Inventory; a discussion of the crossing hazards; jurisdictional issues
    in each state; operational considerations and Federal programs
    available to fund improvements. The report also examined and described
    the technologies then under development in high-speed corridors,
    specifically the Connecticut 4-quadrant gate with obstruction
    detection, the Illinois Vehicle Arrester Barrier (VAB), the Friendly
    Mobile Barrier, In-Vehicle warning systems, passive systems, median
    barriers and other barrier gate systems. Because the research projects
    were underway, there were no conclusions of the effectiveness of these
    devices available for inclusion in the study.
        There are two projects in the Human Factors research program on
    grade crossing safety which will determine the reasons why drivers
    violate grade crossing devices and signs. The Accident Causation
    project will be a comprehensive analysis of grade crossing accident
    causation, based on statistical studies and observations of driver
    behavior. FRA currently knows what happened in grade crossing
    accidents, but does not know why the accidents occur. In addition to
    the overall characteristics of the grade crossing as a system, driver
    motivation and expectation may be critical factors, but accident
    statistics do not reveal this information. The Evaluation of Driver
    Behavior project will be conducted in coordination with the Accident
    Causation project. The focus of the Driver Behavior project is to
    determine how grade crossing safety systems can be made more effective
    by addressing critical aspects of driver behavior, particularly
    critical aspects identified in the Accident Causation project. Both of
    these projects were started in fiscal year 1999, and research plans for
    each project are under development at this time.
        FRA assumes that the crosscutting review of grade crossing
    technology refers to the compendium of the grade crossing research
    conducted to date. Abstracts being prepared for each project will
    discuss the goals and results of each project. The compendium will
    present the spectrum of research conducted, its results, and synthesize
    the results of our past research to help guide future research. It is
    being assembled by the Volpe Center and is scheduled to be completed by
    December, 1999.
                fiscal year 1999 and 2000 track research funding
        Question. How will the funds allocated for track research in fiscal
    year 1999 be spent? Please explain the purpose of each project and the
    amount funded. What are the comparable planned expenses in this area
    for fiscal year 2000, and how is this reflected in the request?
        Answer. In fiscal year 1999, a total of $6.950 million was
    appropriated for track research. The total funding requested, for track
    research, in fiscal year 2000 is $7.450 million. The following table
    shows how these funds are allocated by year and R&D program area.

                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                                            Fiscal year
                                                     -----------------------
                Program activity/project                 1999        2000
                                                        Enacted     Request
    ------------------------------------------------------------------------
    Track & Components Safety--This program activity
     assesses the structural integrity of the
     existing track structure and its components in
     light of the changing environment of higher
     axle loads, traffic densities, and speeds and
     the recent trends of introducing newer
     unconventional vehicle types and newer track
     materials. It includes research on more complex
     track components, such as turnouts, in addition
     to more commonly considered track components,
     such as rail, crossties, and ballast. Emphasis
     is given to failure modes and degradation
     processes which most impact the safety of
     track. A second major emphasis is directed at
     improving track defect detection techniques and
     other technologies related to inspection
     equipment, with the goal of reducing train
     accidents resulting from failures in the track
     structure. Potential research products include
     new techniques and equipment that could provide
     accurate and reliable assessment of track
     safety, or aid in the effective planning of
     track maintenance as a preventive measure
     against hazardous structural failure of track
     or bridges. The new techniques could serve as
     the basis for performance-based track safety
     standards which do not inhibit innovation:
        Material & Rail Inspection--Prevent and            1,450       1,600
         improve the detection of material and
         structural defects in track and its
         components. Develop new methods for
         reducing occurrence of fatigue cracks and
         other failure modes in rail and for
         improving inspection and monitoring
         protocols. Assess the safety of new track
         materials and components. Develop
         technologies for detecting track hazards
         such as broken, misaligned, obstructed, or
         weakened rails ahead of a moving train.....
        Track Strength--Deploy FRA track-testing           1,850       2,000
         vehicle to assess performance-based method
         of inspecting track gage strength along
         mainline and shortline railroads. Develop
         risk-assessment methods to prevent lateral
         buckling of track due to thermal and
         vehicle-induced stresses. Develop and
         demonstrate methods for the detection and
         prevention of weak vertical track support..
        Bridge Safety--Develop non-destructive               500         200
         evaluation techniques for safety inspection
         of steel and timber railroad bridges.
         Investigate the use of composite materials
         in railroad bridge repair..................
        Signal Systems Safety--Develop methods to            100         100
         mitigate potential safety failures in
         commonly used signal systems. Investigate
         alternate technologies for train presence
         detection..................................
    Track--Train Interaction Safety--This research
     area develops analytical tools,
     instrumentation, and test data that can
     accurately describe the interaction between the
     rolling stock and the supporting track
     structure. This interaction is not limited to
     the instantaneous transfer of dynamic forces
     from vehicle to track but extends to cover
     cumulative effects on track degradation such as
     wear and surface fatigue of railheads and
     deterioration of track geometry. Some of the
     safety-related issues which will greatly
     benefit from progress in this research area
     include the development of wheel and rail
     profile standards for passenger and fright
     operations, improved understanding and
     prediction of the impact of higher-speed
     passenger service on existing track, the
     development of performance-based track geometry
     and vehicle/track interaction standards, and
     the development of guidelines for optimum
     inspection and maintenance practices to enhance
     track safety and durability:
        Track Geometry--Assess vehicle performance           700         700
         safety due to anomalies in track geometry
         and overall track geometry degradation.
         Assess vehicle/track interaction safety due
         to commutative track panel shift...........
        Wheel/Rail Interaction--Assess vehicle/track         900         950
         interaction safety due to variations in
         wheel to rail forces, wheel/rail profile
         and contact conditions, as well as wheel
         climb and other related derailment modes...
        Special Trackwork--Assess vehicle/track              500         500
         interaction safety in turnouts and other
         special trackwork. Examine safety
         performance of flange bearing frogs. Foster
         the development of field retrofits to
         reduce high forces generated in turnouts...
        Electrification Safety--Foster the                   150         100
         development of a prototype non-destructive
         inspection systems for catenary wire and
         third rail installations...................
        Heavy Axle Load Safety--Safety assessment of         300         300
         vehicle/track interaction under heavy axle
         loads......................................
        Vehicle/Track Interaction Safety Standards--         500         500
         Provide research and other technical
         services for the development and
         implementation of performance-based vehicle/
         track interaction, track geometry, and
         track strength safety standards............
    Grade Crossings & Train Control--The goal of
     this research area is to evaluate critical and
     interrelated areas of railroad signaling, train
     control, and electrification technology that
     are out pacing the content of existing Federal
     standards and to develop inspection
     technologies and safety practices to greatly
     reduce the risk of train collisions and to
     maintain the safety of electrified railroads:
        Train Control--Foster the development and     ..........         500
         implementation of advanced but cost-
         effective train control technologies to
         reduce the risk of train collisions........
                                                     -----------------------
            Total: Track and Vehicle Track                 6,950       7,450
             Interaction............................
    ------------------------------------------------------------------------

                   impact of track research on rail industry
        Question. How have the results of the research conducted during
    fiscal year 1998 and 1999 help FRA and the rail industry?
        Answer. Much has been gained from the track research and test
    activities that were completed in fiscal year 1998. The most notable
    accomplishments and their benefit to FRA and to the railroad industry
    can be summarized as follows:
        Track Safety Standards.--In 1998, work within a government-
    industry-labor effort under the auspices of the Rail Safety Advisory
    Committee, resulted in the issuance of revised track safety standards
    for all present classes of track, as well as new standards for high-
    speed tracks. This process was greatly influenced and guided by results
    from research conducted in fiscal year 1998. One example was the
    inclusion of performance-based standards for track gage strength based
    on results from the R&D gage widening research and test program using
    the Gage Restraint Measurement System (GRMS). As part of this research,
    FRA examined track geometry inspection methods and standards used in
    European countries, compared methods with those proposed for the U.S.
    and reported comparisons to FRA's safety personnel.
        Top-of-Rail Lubrication.--Completed in fiscal year 1998, a
    cooperative revenue track test program with CSX to examine the safety
    performance of a new top-of-rail lubrication system. Several
    measurements of lateral forces on curves and mechanical and electrical
    energy consumption were made, under dry and lubricated conditions, for
    a unit coal train over a 200 mile round trip. The revenue tests were an
    important follow up to earlier testing conducted at the Transportation
    Technology Center (TTC) in Pueblo to examine the safety and energy
    reduction benefits under more controlled conditions. The system applies
    a specially engineered water-based consumable lubricant behind the last
    locomotive to reduce wheel/rail friction under the remainder of the
    train. Both the railroad industry and the Department of Energy
    participated with FRA in funding these tests. Results to date indicate
    significant reductions in lateral forces and in energy consumption with
    no impact on braking distances. Additional testing is planned to
    examine other safety aspects of this lubrication technology such as
    influence on vehicle hunting and operations on steep grades.
        Track Buckling.--Developed a risk analysis module to be
    incorporated into existing FRA's analytical tools for predicting risk
    of track buckling due to thermal and mechanical forces. A technical
    paper based on this work entitled, Assessment of Buckling Risk in
    Continuous Welded Rail Tracks, was presented at an International
    conference on ``Probabilistic Safety Assessment and Management,'' that
    was held in New York City, New York, in September 1998. Continued work
    utilizing the results of R&D efforts to develop standards for the
    installation and maintenance of Continuously Welded Rail as proposed in
    the new track safety standards. Completed longitudinal rail restraint
    tests on high curvature wood tie track, including winter rail break and
    summer destress tests. The tests were performed to assess requirements
    established by current continuously welded rail destressing policies
    and procedures of major railroads.
        Track Panel Shift.--Published a joint report with the AAR covering
    TLV demonstration and fundamental tests of track panel shift. This work
    showed the ability to perform controlled stationary, in-motion, and
    repeated passing panel shifts. The effects of ballast and tie type,
    consolidation, curvature, maintenance, and forces applied were
    examined. A survey of North American Class I railroad slow orders was
    also conducted.
        Gage Restraint.--Provided technical support to the RSAC Working
    Group in formulating regulations which made use of the Gage Restraint
    Measurement System (GRMS). This new technology, has been developed
    under FRA R&D for track inspection against wide gage derailments, has
    been successfully demonstrated, and has gained wide industry
    acceptance. Similar systems based on this FRA developed prototype have
    been acquired by at least two major railroads and continue to be used
    for locating areas of track with weak or unsafe gage restraint. FRA's
    longer range GRMS testing continued on a range of railroad operations
    including short lines and regional railroads to ensure that crosstie
    replacements are being installed in areas of maximum risk for wide-gage
    derailments from weak ties.
        Heavy Axle Loads.--Completed a third phase of a cooperative program
    with the industry to address the safety of heavy axle loads in which
    FAST train operations have generated 100 MGT. Various research
    publications were completed in the following areas: rail grinding, rail
    fatigue, remedial methods to correct track substructure instability,
    tie and fastener performance, vehicle/track interaction performance,
    and thermite weld performance.
        Rail Steel Integrity.--Work continued at the Volpe National
    Transportation Systems Center on analytical and test methods to support
    delayed remedial action for non-critical defects as an alternative
    testing strategy. Results from this work continue to provide valuable
    input to a second waiver application to the Office of Safety from a
    Class I railroad requesting modifications to existing FRA rules on rail
    defect inspection. Began installation of rail specimens containing
    known internal defects in the FAST heavy axle load track at TTC to
    characterize crack growth rates for various defect shapes and sizes as
    a function of accumulated tonnage and longitudinal mechanical and
    thermal forces for input to analytical models. The knowledge gained
    from this multi-year research project that have recently come to
    fruition will now be employed in devising rail flaw inspection revisit
    protocols and in generating test procedures for assessing rail
    lubrication and grinding strategies and their influence on the growth
    of fatigue-induced cracks in the rail head. Collaborated with the
    railroad industry on completing the construction of a new rail defect
    test facility at the TTC in which various rail samples, with known
    internal defects, were installed for testing purposes. The facility has
    been used to evaluate current inspection equipment and is currently
    being used to comparatively test at least two new rail inspection
    technologies.
        Vehicle/Track Interaction.--Examined vehicle/track interaction and
    track-geometry induced wheel/rail forces leading to derailments at both
    low and high speeds; monitored field tests of commuter rail equipment
    traversing switches and high curvature track and analyzed results to
    provide baseline wheel/rail interaction data for the high-speed safety
    investigation. This included Ridemeter tests over a three-day period to
    gather data on Metro North Railroad passenger equipment operating at
    cant deficiencies up to 6 inches on New York State's Empire corridor
    between New York City and Poughkeepsie, NY.
        Wheel Climb Derailments.--Published a joint report with the AAR
    covering TLV tests and NUCARS simulations of wheel climbs. This work
    showed the ability to perform controlled steady-state wheel climbs, and
    to predict similar results using NUCARS. The effects of friction, axle
    angle of attack, and wheel/rail contact angle were presented.
        Wheel & Rail Profile Standards.--Initiated a cooperative research
    and test program with APTA and with participation from the Canadian
    National Research Council (CNRC) and the AAR to develop standards for
    wheel and rail profiles in commuter and passenger rail operations to
    reduce derailment risk and assure vehicle/track interaction safety.
        Railroad Bridges.--Completed testing, analysis, and reporting for
    many aspects of a cooperative bridge research program with the AAR.
    Final reports on timber bridge research include: results of ultimate
    strength testing of bridge stringers removed from revenue service,
    results of heavy axle load traffic testing on two timber bridges prior
    to strengthening, literature review on fatigue aspects of railroad
    bridge timbers, results of tests on timber bridges strengthened using
    helper stringers. Also completed is a preliminary report on post-
    strengthening tests of three laminated timber bridges. Final reports on
    steel bridge research include: results of HAL traffic testing and
    fatigue evaluation of a steel truss bridge, and results of longitudinal
    force tests on a bridge with AC locomotives. The longitudinal force
    testing has resulted in a revision of the industry design guidelines.
    It has also prompted further investigations into the effects of high-
    adhesion locomotives on bridges. Field testing using acoustic emission
    NDE techniques to determine crack growth rates in steel bridges has
    been completed.
        High-Speed Track at TTC.--Completed destressing of the RTT high-
    speed test track in Pueblo, Colorado. The track was destressed again in
    July due to concerns over neutral temperature of the rail measured
    during installation of insulated joints for the rail break detection
    system. The track has been consolidated with additional vehicle traffic
    and will receive final surfacing/lining in September. Final adjustments
    to catenary height and stagger have been performed. Work has also begun
    on the development of maintenance, repair, and inspection procedures
    for the RTT. A broken rail and switch indication system installation
    for the RTT was also completed by Main Electric, and the system put
    into operation by Harmon Industries.
        Signals & Train Control.--Completed a cooperative screening test
    program with industry to examine seven new systems for improving loss
    of shunt for better detection of trains near grade crossings. When
    operational, each system was able to properly interpret train arrival
    and departure times. However, all systems experienced a high failure
    rate of components and sub-systems. Conducted research to develop
    procedures for testing and evaluating the safety of train control
    devices and systems.
                  status of earmark for traffic control system
        Question. What is the status of development of the automatic
    traffic control management and monitoring system for which the
    conference committee allocated $500,000 in fiscal year 1999?
        Answer. FRA has had conversations with the principals of the
    organization to whom these funds are allocated, and have provided them
    with a grant application package. Upon receipt of their grant
    application, FRA will process the grant and obligate the funds for the
    development of the automatic traffic control management and monitoring
    system.
               status of earmark for carbon composites evaluation
        Question. What is the status of the evaluation of carbon composites
    for strengthening aging steel railroad bridges for which the conference
    committee allocated $500,000 in fiscal year 1999?
        Answer. FRA met with representatives from the Constructed
    Facilities Center of the West Virginia University, Morgantown, to
    discuss the evaluation of the use of composite materials for railroad
    bridges. Based on the meeting and follow-up discussions, the University
    is currently preparing a draft grant proposal for submittal to the FRA.
    In addition, a conference entitled ``A CONFERENCE ON POLYMER
    COMPOSITES: INFRASTRUCTURE RENEWAL AND ECONOMIC DEVELOPMENT'' was held
    during April 19-21, 1999, at Parkersburg, WV, under the auspices of
    WVU. FRA was represented at this conference. FRA intends to work with
    the University to encourage partnership with railroads, the supplier
    industry, and the WVDOT. Experience has shown that partnership will not
    only leverage additional resources for project completion, but also
    ensure timely deployment of beneficial research products.
                        fiscal year 2000 funding for ptc
        Question. Is the $500,000 request for the Norfolk Southern/CSX on-
    board locomotive communications bus the only positive train control
    initiative requested in the fiscal year 2000 budget? If not, what other
    funds are requested for PTC, and in what accounts?
        Answer. This project is the only PTC initiative requested and
    funded in FRA's fiscal year 2000 R&D budget. However, FRA is also
    requesting $10 million for PTC, in fiscal year 2000, under the High-
    Speed Rail Initiatives-TF. Specifically, $7 million is requested for
    the Illinois PTC project and $3 million for the Michigan ITCS project.
                  fiscal year 2000 funding for safety of hsgt
        Question. Please break down in extensive detail how the $4,400,000
    requested on page 97 of the budget justification would be used. Will
    any of those funds be used to advance the safety of maglev?
        Answer. The following table highlights the requested funding by
    project:

    Accident Avoidance......................................      $1,800,000
    Infrastructure..........................................         300,000
    Accident Survivability..................................       1,400,000
    HS Test Support.........................................         500,000
    HSR Safety Support......................................         200,000
    HSR Environmental Issues................................         200,000
                        --------------------------------------------------------
                        ____________________________________________________
          Total.............................................       4,400,000

        None of the funds requested in fiscal year 2000 will be used to
    advance the safety of maglev.
             funding for full-scale rail passenger car crash tests
        Question. If further funds are provided by the Appropriations
    Committees for full-scale crash testing of rail passenger equipment,
    would this subaccount be the logical place to fund the project, or is
    it more logically funded through the equipment, operations, and hazmat
    subaccount?
        Answer. It is more logical to fund the full-scale rail passenger
    equipment crash test project through the equipment, operations, and
    hazmat subaccount since that is where the funding for the full-scale
    crash test was appropriated in fiscal year 1999.
                        status of sale of rail aluminum
        Question. What is the status of your proposed sale of old reaction
    rail aluminum for scrap? What is the estimated worth of this material?
    How will the sale proceeds be credited?
        Answer. The Aluminum Reaction Rail and related components on the
    PTACV Guideway were reported to the GSA Denver office as property
    available for sale on February 5, 1999. On February 16, 1999 GSA
    acknowledged receipt of the report for property sale at TTC and are now
    in the process of handling the sale. Based on the local scrap Aluminum
    prices, the net value to FRA could be approximately $200,000 which
    would be credited to the FRA Task Order 107, TTC Repair and
    Restoration.
                              funding for t-6 car
        Question. Does your ``list of key inspection technologies targeted
    for integration on the track research instrumentation platform'' on
    pages 99-100 of the budget justification constitute your response to
    the Committee's direction to include in the fiscal year 2000 budget
    justification a ``description of FRA's track research vehicle needs,
    and an analysis of whether FRA could utilize the AAR track research
    vehicle''? If so, this is an incomplete presentation. Please provide a
    more responsive reply for the record.
        Answer. FRA provided a description/justification for its track
    research vehicle in its fiscal year 1999 budget request. FRA also
    confirmed, in the fiscal year 1999 Conference Appeals, that AAR did not
    plan to buy a research vehicle. As a result, $500,000 was provided in
    fiscal year 1999, for the T-6 car, and, therefore, these funds are
    included in FRA's fiscal year 2000 R&D base. Funds will be used to
    continue the upgrade of the T-6 car. FRA assumed this was a closed
    issue and therefore, did not resubmit this information in the fiscal
    year 2000 request.
        FRA's research vehicle, the T-6 car, is over fifty years old. It is
    rapidly deteriorating and thus requiring more frequent repairs and
    maintenance. It is not suitable for any significant future investments.
        Funding is requested for a new research platform to replace the
    existing and rapidly deteriorating T-6 car. The T-6 car is involved in
    advancing the technology of track strength inspection and should be
    differentiated from the T-10 car used by the Office of Safety for
    routine track geometry only inspection within the ATIP program. If the
    new research platform is not funded, the FRA will continue with its
    inspection technology development efforts but will lack the means of
    integrating and further testing a number of promising new inspection
    technologies currently at various stages of development within the
    overall R&D program.
        These technologies include the at-speed and non-contact measurement
    and inspection of internal rail defects, vertical rail head deflection,
    wheel/rail profile interface, and subgrade conditions in addition to
    gage restraint. The new technologies represent advancement in sensor
    design, signal processing, and computing power which allow for a single
    vehicle to combine all of these functions. The envisioned track safety
    inspection platform will significantly accelerate the development of
    additional performance-based track safety standards. It will also serve
    as the FRA's yardstick for the approval of waivers or alternate
    standards that employ some of the new automated track inspection
    technologies. The goal is to provide FRA and its safety assurance staff
    with more efficient, reliable, accurate, and capable tools for
    intelligent and performance-based track safety inspection. Increased
    line capacity requires that necessary inspections be carried out
    simultaneously by one vehicle, that they are done at track speeds to
    avoid impacting scheduled trains, and that they quickly and accurately
    identify areas that are critical to safety for which remedial action
    may be required.
        The Senate references a research vehicle recently purchased by the
    Association of American Railroads [AAR]. FRA staff has confirmed in
    consultation with their AAR counterparts, that there has been no recent
    acquisition by the AAR, nor are any planned in the near future, of any
    research vehicle similar to the T-6 or any that can be utilized for the
    purposes for which the T-6 or its planned replacement is intended. It
    should be also noted that, in their written commentary to the House
    Committee on Appropriations, the AAR pointed out the uniqueness of the
    T-6 as a tool ``to assess and develop new technologies for automated
    track inspection'' and has indicated that they ``agree that T-6 should
    be improved''.
        The AAR has recently purchased a high-rail type vehicle to be
    mainly dedicated for routine ultrasonic rail flaw inspection of the
    test tracks at Pueblo. The AAR has also developed over the past 10
    years a Track Loading Vehicle (TLV) for the purpose of conducting
    specialized tests of track strength. FRA has jointly funded numerous
    test activities with the TLV during that period. Neither of these two
    vehicles is a substitute for the T-6 for the following reasons:
      --Pursuant to its statutory mandate, FRA needs an independent
            capability to evaluate track conditions, and the equipment used
            therefor, relative to the established safety standards. This is
            particularly relevant in the case of gage widening where newly
            introduced performance-based safety standards would require the
            FRA to retain a viable T-6 car as a yardstick to guide early
            implementation and to respond to potential requests for waivers
            and for further development of alternate performance standards.
            None of the AAR test vehicles can accomplish this function.
      --The T-6 will provide a valuable safety inspection service on a
            cooperative basis to a wide range of railroads, including
            regional railroads, shortlines, Amtrak, and other public and
            government owned operators and commuter rail authorities, which
            otherwise would have no access to improved inspection
            technology. This inspection is generally carried out at little
            or no cost to FRA while providing valuable data to FRA's
            research and safety programs, in addition to the value gained
            in preventing potential accidents through identifying hazardous
            track conditions. The AAR test vehicles are generally dedicated
            to testing at Pueblo with infrequent revenue track testing
            primarily on class-1 railroad lines. The majority of rail
            operators will have no access to any of the AAR's test vehicles
            either due to their unavailability or cost.
                 funding for high-speed rail corridor planning
        Question. TEA-21 authorizes $10,000,000 in non-firewall general
    funds for fiscal year 2000 for high-speed rail corridor planning. Has
    FRA requested any funds for corridor planning purposes in fiscal year
    2000? Have any funds been spent in fiscal year 1998 or 1999 for these
    purposes? If so, how much was spent, and from which subaccount of the
    NGHSR program were these funds derived?
        Answer. FRA has not requested any funds for corridor planning in
    fiscal year 2000, nor were any funds included in fiscal years 1998 and
    1999.
                               request for nghsr
        Question. Please present the Next Generation High-Speed Rail
    Program budget request as it was submitted by FRA to OST and OMB.
        Answer. FRA's fiscal year 2000 budget request for the Next
    Generation High-Speed Rail Program included $26.2 million in the OST
    and OMB Submissions.
                   designated hsr corridors--estimated costs
        Question. What level of funding does the Federal Railroad
    Administration estimate will be needed to develop high-speed rail
    systems in each of the 12 FRA designated corridors in the U.S.? What is
    FRA's role in developing, promoting or funding these corridors?
        Answer. TEA-21 authorizes 11 designated high-speed rail corridors
    in the U.S. At present, eight corridors have been designated--five
    under ISTEA and three under TEA-21, as follows:
    Corridors Designated under ISTEA
      --California Corridor (San Francisco Bay Area--Los Angeles--San
            Diego);
      --Pacific Northwest Corridor (Eugene, OR--Portland, OR--Seattle, WA--
            Vancouver, BC);
      --Chicago Hub Corridor, extending from Chicago, IL to St. Louis, MO;
            to Detroit, MI; and to Milwaukee, WI. TEA-21 extended this
            corridor from Milwaukee to Minneapolis; and the Secretary
            recently announced a new spoke, from Chicago to Indianapolis
            and Cincinnati.
      --Florida Corridor (Miami--Orlando--Tampa); and
      --Southeast Corridor (linking the metropolitan areas of Washington,
            DC, Richmond, VA, Raleigh, NC, and Charlotte, NC). The
            Secretary has subsequently extended the Southeast Corridor from
            Richmond to Hampton Roads; from Raleigh to Columbia, Savannah,
            and Jacksonville; and from Charlotte to Greenville, Atlanta,
            and Macon.
    Corridors Designated under TEA-21
      --The Empire Corridor (New York City--Albany--Buffalo, NY);
      --Gulf Coast Corridor (Houston--New Orleans--Mobile--Jacksonville, as
            well as New Orleans--Birmingham); and
      --Keystone Corridor (Philadelphia--Harrisburg, PA).
        As part of the commercial feasibility study of high-speed ground
    transportation, the FRA prepared preliminary estimates of the capital
    investment required to develop the corridors designated under ISTEA
    (without extensions) and the Empire Corridor to various levels of
    service. These estimates, including vehicles and fixed plant, were as
    follows:

                      CAPITAL COSTS FOR HIGH-SPEED GROUND TRANSPORTATION IN ILLUSTRATIVE CORRIDORS
                                   [FRA Preliminary Estimate--Millions of Dollars \1\]
    ----------------------------------------------------------------------------------------------------------------
                                                          Incremental upgrades (top speeds) (all
                                                                   are non-electrified)            New HSR   Maglev
                          Corridor                       ----------------------------------------    200       300
                                                             90        110       125       150
    ----------------------------------------------------------------------------------------------------------------
    California North/South..............................     1,315     2,915     7,933     8,026    15,795    23,433
    Pacific Northwest...................................       598       859     1,233  ........     7,819    13,980
    Chicago Hub Network.................................     1,063     1,488     2,439     3,709    12,286    17,788
    Florida.............................................       547       645       883  ........     4,318     7,055
    Southeast Corridor..................................  ........     1,047  ........  ........     6,894    10,311
    Empire Corridor.....................................  ........  ........     1,932  ........    10,612   11,232
    ----------------------------------------------------------------------------------------------------------------
    \1\ Blanks Indicate No Estimate Was Prepared.

    Source: FRA, ``High-Speed Ground Transportation in America,'' Statistical Supplement.

        While FRA does not have analogous estimates for two of the three
    new TEA-21 corridors, the following cost ranges--also taken from the
    commercial feasibility report--may be of some use:

             INITIAL CAPITAL COST RANGES FOR ILLUSTRATIVE CORRIDORS
                            [In millions of dollars]
    ------------------------------------------------------------------------
                                                      Typical Range of Total
                  Technology/Top Speed                Initial Investment per
                                                            Route-Mile
    ------------------------------------------------------------------------
    Incremental 90.................................               $1 to $3.5
    Incremental 110................................                 $2 to $5
    Incremental 125................................               $3 to $5.5
    Incremental 150................................               $4.5 to $7
    New HSR........................................               $10 to $45
    Maglev.........................................               $20 to $50
    ------------------------------------------------------------------------

        The 90 and 110 mph incremental upgrading options assume some
    upgrading of highway-rail grade crossing protective devices, but do not
    assume the installation of any positive barriers against improper
    intrusion by motor vehicles onto the railroad right-of-way. By
    contrast, the estimates for incremental upgrades at 125 mph or above do
    assume that all grade crossings would be closed, separated, or provided
    with positive barriers (cf. High-Speed Ground Transportation for
    America, page 5-4).
        FRA's report found that many corridors, at many speed levels, would
    generate positive cash flows from operations that could conceivably be
    used to finance a portion of the initial capital costs. For details,
    see Chapter 7 of High-Speed Ground Transportation for America, pages 7-
    21 and 7-22.
        The FRA works closely with the States to assist them in planning
    for improved rail passenger service and to develop high-speed rail
    service where appropriate. Regular meetings are held with the States
    under the auspices of the American Association of State Highway and
    Transportation Officials. FRA continues to attend various meetings with
    organizations, consortia, Amtrak, and groups interested in high-speed
    passenger rail service. In fiscal years (FY) 19961997, planning grants
    were awarded to states for assistance in technical and economic
    feasibility studies. Planning funds were not appropriated in fiscal
    year 1998-1999.
        Under the Next Generation High Speed Rail Technology Program, the
    FRA has formed partnerships with the rail industry and States and is
    providing funding to develop and demonstrate Positive Train Control, a
    High-Speed Non-electric Locomotive, improved safety devices at grade
    crossings, and improved track technology.
        Under the Grade Crossing Hazard Elimination program, begun under
    section 1010 of ISTEA and continued under section 1103(c) of TEA-21,
    FRA has provided funding to States with high-speed corridors to close
    redundant crossings and make improvements to those that remain.
                 benefits and costs of high-speed rail projects
        Question. Which high-speed rail corridors offer the highest
    benefit-to-cost ratios? What factors would FRA use to judge the
    benefits and costs of high-speed rail projects? Will FRA develop a list
    of funding priorities for high-speed rail projects, and how will this
    list be tied to the projects' benefits and costs? If not, how can FRA
    target limited funding to the corridors that offer the most benefits?
        Answer. In general, FRA's commercial feasibility study of high-
    speed rail showed that the 90 and 110 mph upgrading options generate
    higher ratios of public benefits to cost than more intensive investment
    levels. Within the 90-110 mph speed range, the Chicago Hub Network,
    California, and the Pacific Northwest showed particularly high public
    benefit-to-public cost ratios. See Chapter 7 of High-Speed Ground
    Transportation for America.
        FRA's commercial feasibility study used the following factors to
    produce the public benefit/public cost ratios explained in High-Speed
    Ground Transportation for America.
      --Benefit and Cost Categories Used in High-Speed Ground
            Transportation for America
      --Benefits to the Public at Large:
          --Airport Congestion Delay Savings
          --Highway Congestion Delay Savings
          --Emissions Savings
      --Public Costs:
          --Initial Investment
          --Net Operating and Maintenance Expense
          --Continuing Investments
        FRA's study recognized, however, that individual States may
    perceive various benefits of high-speed rail that might not be
    considered from a national perspective, e.g., benefits from high-speed
    rail users, the multiplier effects of job creation from high-speed rail
    construction and operation--and that it would be perfectly legitimate
    for the States to incorporate such localized benefits in their own
    evaluations of transport alternatives.
        The only high-speed rail projects for which FRA develops priorities
    are those that compete for funding under Section 1103(c) of TEA-21,
    specifically grade crossing hazard elimination. In fiscal year 2000, a
    total of approximately $20 million ($15 million in FRA's Rail
    Initiatives Account and $5.25 million in FHWA) is requested for this
    program.
             amtrak's role in developing high-speed rail corridors
        Question. Describe Amtrak's role in the development of high-speed
    rail corridors. Outside of Amtrak capital funding, what other potential
    federal capital funds are available for the necessary infrastructure
    improvements to designated high-speed corridors? How much does Amtrak
    plan to spend in fiscal years 1999 and 2000 for capital improvements to
    designated high-speed rail corridors not within the Northeast Corridor?
        Answer. Outside the Northeast, the States are the prime movers in
    promoting the development of high-speed rail service. Amtrak must
    become the partner of these States, providing them with the benefit of
    the Corporation's planning and operational expertise, and sharing in
    capital investments where such investments are consistent with the goal
    of eliminating Amtrak's dependence on Federal operating subsidies.
        The federal government, in general, does not provide capital funds
    to develop those projects. The Administration requested $20.5 million
    in fiscal year 2000 for this purpose. States also have the discretion
    to use certain Federal-aid highway funds apportioned to them for grade
    crossing improvements or eliminations on any rail line, including those
    designated as high-speed corridors. And to the extent that a project
    can be shown to contribute air quality benefits, conjestion mitigation
    Air Quality Improvement funds may be eligible. The new loan programs
    authorized in TEA-21, TIFIA, and RRIF also could provide a source of
    capital as part of an overall project funding plan.
        Amtrak's fiscal year 1999 capital program includes approximately
    $144 million of investments that would support high-speed service in
    corridors outside the Northeast. Amtrak is still developing its fiscal
    year 2000 capital program; therefore, FRA does not yet know the amount
    management will propose to spend on corridor development next year.
                  impact of fox project on other hsr projects
        Question. What lessons has DOT/FRA learned from its experience with
    the FOX project? Will the demise of the FOX project make it more easy
    or difficult to develop other high-speed rail corridors? Will FRA
    analyze the FOX experience to determine whether, in general, the
    federal government should target its funds to projects pursuing the
    incremental approach? Will the demise of the FOX project help other
    projects receive funding that would have gone to FOX?
        Answer. The FOX project, with its particular design and funding
    framework, was unique to Florida. FRA does not believe that its demise
    will adversely affect the many incremental high-speed rail projects
    envisioned by other States, or other new high-speed rail projects that
    may arise in other locales with different market and financing
    conditions.
        Current funds support highway-rail grade crossing safety
    enhancements in emerging corridors, and, therefore, already target
    limited components of incremental projects. With regard to more
    comprehensive investments, FRA believes that each State is in the best
    position to know which variety of high-speed ground transportation
    would provide the optimal mix of locally-perceived benefits and costs.
    For this reason, FRA has no present plans to conduct further,
    theoretical commercial feasibility comparisons that would substitute
    the federal government's judgement for that of the States as they
    evaluate transportation alternatives.
        The lesson learned from the FOX project is that strong support from
    both public and private sources is necessary for capital-intensive
    projects to be built. The Department had no plans to fund the FOX
    project so funds are available for the other projects.
                        management of the nghsr program
        Question. The TRB has recommended that FRA strengthen its program
    management capabilities to speed up and better control the individual
    projects. How have the management capabilities been strengthened?
        Answer. The Next Generation High-speed Rail Program has been
    shifted organizationally and is now part of FRA's passenger programs
    organization. This organizational structure provides a more direct link
    between FRA's efforts at promoting the development and demonstration of
    advanced technologies and the likely customers for these advanced
    technologies--specifically, the States and Amtrak.
                            funding for ptc projects
        Question. Assuming that the RABA funds will not be used for PTS and
    PTC projects, what was the basis of the decision to not request any
    appropriated funds to advance those technologies? Are there any
    projects or new approaches that merit federal support?
        Answer. The President's budget assumed that RABA funds would be
    used for such projects and the decision regarding appropriated funds
    was based on the availability of RABA to fund these high priority
    projects. We strongly urge the Congress to support the Administration's
    request for these projects.
                  impact of zero funds on illinois ptc project
        Question. If the requested RABA funding for the positive train
    control/separation does not materialize, how will that affect FRA's
    participation in the Illinois positive train control project? How will
    the project's progress be affected? Could the project continue on a
    cooperative basis with no additional funding? Are there sufficient
    unspent funds to cost-share with industry to advance the Illinois
    project? Please specify the amount of federal funds that are still
    available to support this project and the sources of these balances.
        Answer. Completion of the joint project is planned over a four year
    schedule, with over 50 percent participation committed from the
    combined contributions of the Association of American Railroads and the
    Illinois Department of Transportation. Any delays in FRA funding will
    be mirrored in contributions of project partners AAR and Illinois DOT,
    who also require time to request and program matching funding, and will
    threaten continuation of the joint program.
        With $3 million in anticipated Illinois funds in fiscal year 1999,
    there will have been $23.1 million available to the project: $11.3
    million FRA, $5.2 million IDOT, $6.6 million AAR. About $3.4 million
    will have been expended, for a balance of $19.5 million. Fiscal year
    2000 project expenditures are now estimated at over $19 million,
    including expenditure for the System Design and Integration contractor
    in three quarters of fiscal year 2000. The plan anticipates major
    staffing and rapid expenditure rates in the early stages of the
    contract, to achieve the overall four year project timetable. Suppliers
    are intensely interested in the SDI award and are being kept informed
    through project workshops and will receive a Request for Information in
    late 1999, enabling a rapid start when the contract is awarded.
        If the requested FRA fiscal year 2000 funding from RABA is not
    provided, a one year delay would occur in project completion and much
    longer delays are likely, threatening program continuity and
    potentially destroying the cooperative cost-sharing basis on which the
    project depends.
                         status of illinois ptc project
        Question. For the Illinois positive train control project, please
    provide an estimate of project costs for fiscal year 2000, and the out-
    years. Please delineate anticipated cost sharing arrangements among the
    various partners, being certain to specify federal funds, industry
    share, and monies provided by the State of Illinois.
        Answer. The information follows.

    ------------------------------------------------------------------------
                                                Fiscal year
                                       Prior ---------------- Future   Total
                                       Year    1999    2000
    ------------------------------------------------------------------------
    Federal (47 percent)............    10.0     1.3  \1\ 7.  \2\ 9.    28.0
                                                           0       7
    Illinois (20 percent)...........     2.2  \1\ 3.  \2\ 3.  \2\ 3.    12.0
                                                   0       0       8
    AAR \1\ (33 percent)............     1.6     5.0  \3\ 5.  \3\ 8.    20.0
                                                           0       4
                                     ---------------------------------------
          Total (100 percent).......    13.8     9.3    15.0    21.9   60.0
    ------------------------------------------------------------------------
    \1\ Requested in Federal and State budget requests; contingent on
      appropriations.
    \2\ Contingent on future requests and appropriations.
    \3\ Contingent on matching public sector funding.
    \4\ AAR is the Association of American Railroads, representing the major
      freight railroads and Amtrak.

                              michigan ptc project
        Question. How does technical progress at the Michigan project
    relate to and help advance the Illinois project? What are the funding
    needs of the Michigan incremental train control system (ITCS) high-
    speed passenger rail demonstration project during fiscal year 2000 and
    subsequent years? How would those funds be used? If no additional funds
    are provided for that project, what are the implications?
        Answer. The Michigan Incremental Train Control System (ITCS)
    demonstration project has developed and is proof-testing methods to
    integrate grade crossing warning systems with the positive train
    control communications systems. This technique is already being shared
    with the Illinois joint project team. Use of the PTC communications
    networks for this purpose, on a proven safety-vital basis, provides
    marked reductions in the costs otherwise needed to alter the existing
    grade crossing circuitry to accommodate increased train speeds. A total
    of $3 million is proposed for the Michigan project in fiscal year 2000.
    The funding requested in fiscal year 2000 is to complete the safety
    validation of the 80-mile demonstration territory and to place it in
    revenue service at speeds above 79 mph, and to begin to conform the
    Michigan system to the industry interoperability standards developed in
    the Illinois project. If no additional Federal funding is provided,
    Michigan and its partners will have to decide if the project merits a
    higher degree of their participation.
                     status of alaska railroad ptc project
        Question. What is the status of the Alaska Railroad positive train
    control demonstration project? Please provide a schedule of project
    benchmarks and funding history, breaking out funding by federal, Alaska
    Railroad, and other funding sources.
        Answer. The Alaska Railroad Corporation (ARR) has contracted with
    GE-Harris Railroad Electronics for the first phase of a Positive Train
    Control (PTC) system which consists of a computer-aided dispatching
    system. ARR has also upgraded its backbone microwave system and added
    digital radios to handle the communications requirements for PTC. ARR
    plans to contract with GE-Harris this year for the development of
    locomotive on-board hardware and software. Full system testing should
    take place in 2001. FRA has provided $4 million in fiscal year 1997 and
    is providing $3 million in fiscal year 1999 for the project. The Alaska
    Railroad has provided $100,000 in in-kind services so far, and intends
    to provide $1,500,000 in funding from internal sources this year for
    the next phase of the project.
                  funding for the alaska railroad ptc project
        Question. What amount of funding for the Alaska Railroad positive
    train control project was requested of OST and OMB for fiscal year
    2000?
        Answer. No funding was included in FRA's fiscal year 2000 OST or
    OMB Budget submissions for the Alaska Railroad PTC project.
                  status of virginia--pennsylvania pts project
        Question. What is the status of the second phase of the Manassas,
    Virginia to Harrisburg, Pennsylvania pilot project that was intended to
    develop Positive Train Separation (PTS) and what contracts have been
    signed? Please discuss how this project is advancing the goal of
    interoperable PTCS. How much federal money has been invested in that
    project? Is this NGHSR funding, or FRA R&D funding?
        Answer. The Norfolk Southern/CSX project team has signed contracts
    with two suppliers to develop prototype on-board locomotive
    communications units according to the specifications developed in the
    first phase of the project. Prototype hardware is expected to be
    available from the contractors later this year. The NS/CSX project team
    has also signed a contract with Safetran to develop the first of the
    software ``objects'' that will be used to test the prototype on-board
    busses. The project sponsors believe that this project will advance the
    goal of interoperable Positive Train Control systems by providing a
    standard harness that railroads could use to retrofit locomotives to
    permit them to operate with the wide variety of train control systems
    that railroads have in place and are currently developing. This project
    is developing and proving concepts and capabilities which will be
    needed in the Illinois joint PTC project. FRA is working with the
    railroads to integrate the two efforts within the Illinois project.
    Federal funding in the amount of $1.5 million (from the FRA R&D
    account) has been invested in this project; the railroads have
    indicated that they have invested approximately the same amount in this
    project with in-kind services.
                            status of ptc rulemaking
        Question. Does FRA still plan to conduct a rulemaking to require
    the use of PTC by Class I railroads? If so, what is the status of that
    rulemaking? When do you expect to issue such a rule? If not, what type
    of rulemaking is contemplated?
        Answer. FRA is promoting the implementation of PTC through a broad
    range of actions that include deployment of the Nationwide Differential
    GPS network, funding of technology demonstration and deployment, and
    development of safety standards for processor-based signal and train
    control technology (``PTC performance standards''). In addition, FRA is
    supporting the railroad industry before the FCC to insure that radio
    frequencies are available for PTC. FRA has asked the Railroad Safety
    Advisory Committee (RSAC) to review the steps needed to deploy PTC, and
    a report from the RSAC working group is expected within the next few
    weeks. This report will be forwarded to the Congress, and the working
    group will continue its efforts by addressing issues such as compatible
    railroad operating rules for PTC, human factor issues related to
    various PTC architectures, liaison with ongoing PTC development
    projects, and other issues.
        The RSAC is studying the costs and benefits of PTC and the manner
    in which risk is distributed over the national rail network, as a basis
    for considering the implications of a potential mandate of PTC systems.
    In addition, the RSAC is preparing proposed PTC performance standards
    that will create a predictable environment in which investments in PTC
    technology can be made with confidence. FRA is urging the RSAC working
    group to conclude its efforts regarding proposed PTC performance
    standards this year.
                       progress on installing ptc systems
        Question. Please provide an update on what progress has been made
    by the railroads in installing positive train control systems. What has
    been done since last year, and how many of the major railroads have
    installed these systems? What new projects are planned for fiscal year
    2000?
        Answer. FRA is aware of three railroads in the process of
    installing positive train control systems at this time. This work will
    continue into 2000. Amtrak is installing both the vehicle and track-
    mounted portions of the Advanced Civil Speed Enforcement System (ACSES)
    on the Northeast Corridor between New Haven and Boston and will be
    extending the installation to the remainder of the Northeast Corridor.
    New Jersey Transit is equipping all trackage it owns (338 route miles),
    first with automatic train control and subsequently with a more
    advanced system which will be interoperable with the Amtrak ACSES
    system. The Alaska Railroad is upgrading the dispatch system and
    communications for its entire main line (over 400 miles) preparatory to
    installing a communications-based Positive Train Control system.
        FRA is not aware of any new starts of complete positive train
    control systems planned for fiscal year 2000. However, the major
    freight railroads and equipment suppliers are moving forward with key
    investments which will underpin the eventual widespread deployment of
    positive train control systems. The major freight railroads are
    planning to invest more than $100 million to upgrade the computer-aided
    dispatch systems in their central control centers with new-generation
    equipment designed for compatibility with positive train control. Both
    major freight locomotive manufacturers are focusing their new
    generation locomotive control systems to be fully compatible with PTC
    installation, subject to satisfactory completion of the necessary
    safety verification process. Over the past decade, railroads have
    worked with wayside signal suppliers to apply digital radio to replace
    aging wirelines on poles along the track. In many cases, the new
    systems make use of the standards developed in the industry's earlier
    Advanced Train Control System (ATCS) project, and this investment too
    will facilitate the deployment of new train control systems. Overall,
    in addition to the demonstration programs, the industry continues to
    commit major resources to lay the groundwork for ultimate deployment of
    positive train control systems.
                              status of ptc report
        Question. What are the status and preliminary findings, if any, to
    date of the study requested by the Committee on the interoperability of
    PTC systems?
        Answer. The conferees did not fund a separate study of
    interoperability because the joint Illinois PTC project will include,
    within its scope, the development of interoperability standards (H.
    Rept. 105-825 at 1428). Working with Illinois project team, the
    Association of American Railroads (AAR) is currently developing
    information necessary to produce industry standards. FRA is closely
    monitoring this effort, which is scheduled to reach completion by the
    end of calendar 1999.
        In addition, FRA had tasked the Railroad Safety Advisory Committee
    (RSAC) with development of a status report on progress toward
    development and deployment of PTC systems. An important part of that
    effort has been consideration of the role of interoperability among PTC
    systems. At the April meeting of the Data and Implementation Task Force
    of the PTC Working Group, the task force finalized instructions for the
    report on a consensus basis. FRA will provide copies of this report to
    the Committee and will keep the Committee apprised of the status of the
    AAR standards development process.
                  status and funding for prototype locomotives
        Question. The fiscal year 1998 Act provided $4,800,000 for work on
    prototype locomotives, including: (a) research on flywheel turbine
    technology; (b) development of non-electric locomotive concepts; and
    (c) evaluation of the potential of the recently developed locomotive
    car bodies at speeds of 150 miles per hour. Please describe the
    progress in each of these three areas of research. In fiscal year 1999,
    this effort received an appropriation of $7,000,000. How are you using
    the fiscal year 1999 funds in each of those areas? How will the fiscal
    year 2000 request of $3,000,000 be used? What specific contracts have
    you signed in each of these three areas since last year? Please state
    the purpose of each relevant contract along with the fiscal year 1998
    and fiscal year 1999 funding amount for each contract.
        Answer. The flywheel effort, being pursued by the University of
    Texas Center for Electromechanics, will construct the first
    ``Megagenerator'' and the first full-scale flywheel rotor. The non-
    electric locomotive concept efforts, as well as the 150-mph qualified
    car bodies, are incorporated in the construction of a prototype
    turbine-powered locomotive by Bombardier Transit Systems, Inc, in a 50-
    50 cost sharing partnership with FRA. The first prototype locomotive is
    now under construction at Bombardier's Plattsburgh, NY plant, and is
    scheduled to operate in the year 2000.
        The $7 million (Federal funds) modification to the existing
    Cooperative Agreement between Bombardier and FRA was signed on April
    28th, bringing the total investment in the project (Federal and
    Bombardier) to $20 million. The existing project cooperative agreement
    was initiated in fiscal year 1998 with $3 million of Federal funds and
    $3 million of cost sharing by Bombardier. The fiscal year 2000 request
    for $3 million fully funds the Federal share of the original project
    estimate of $26 million.
        Fiscal year 1998 Federal funding for the Advanced Locomotive
    Propulsion Systems (ALPS) project which includes the flywheel and
    Megagenerator being conducted by a consortium led by The University of
    Texas at Austin was $3.7 million, funded though an Interagency
    Agreement with the Defense Advanced Research Projects Agency (DARPA)
    and a DARPA contract with the Southern Coalition for Advanced
    Transportation of which the university is a member. Additionally, $90K
    in fiscal year 1998 funds were provided to the Naval Surface Warfare
    Center to support test planning activities for the Megagenerator.
    Fiscal year 1999 funds, in support of the ALPS project, will amount to
    $3.8 million. The award of a $3.4 million cooperative agreement to the
    University of Texas at Austin is in the final stages. The remaining
    $400K will be provided to the Naval Surface Warfare Center to perform
    testing of the Megagenerator.
                 design for high-speed non-electric locomotives
        Question. Is the non-electric locomotive program developing a
    consensus about a common design that could serve several markets and
    generate sufficient demand? If so, please explain how progress towards
    that technological accomplishment is evolving. How do the states
    influence this development?
        Answer. Yes. One primary element of synergy is that the new
    prototype turbine locomotive will be compatible with operations on the
    Northeast Corridor, since it is adapted from the electric power car
    used in Amtrak's new Acela trainsets. In addition, Amtrak has begun a
    high-speed initiative for corridors outside the Northeast Corridor. In
    the last year, FRA has conducted well-attended outreach meetings in New
    Orleans, Charlotte, Los Angeles, Chicago, and Washington, DC, in
    addition to attendance at relevant technical gatherings for state
    transportation officials such as the Standing Committee on Rail
    Transportation of AASHTO. Input from state officials is sought at all
    such meetings. The prototype locomotive development has been
    prominently featured, and well received, at all such meetings. The pace
    of the prototype development and construction has been very rapid. FRA
    and Bombardier are now planning further outreach efforts to implement
    an effective demonstration program. States are already expressing
    interest in hosting demonstration runs of the prototype locomotive, and
    interest in acquiring production units is growing.
                       status of flywheel (alps) project
        Question. What is the status of the flywheel project, and what are
    the planned activities for fiscal year 2000? How many additional years
    will be required to complete work on the flywheel project, and how much
    will this cost? Please provide costs for both development and large-
    scale testing. What are the cost-sharing arrangements for this project?
    What is the likelihood that this technology will be commercialized
    during the next five years?
        Answer. The ALPS Project has been re-planned to support the FRA-
    Bombardier Non-Electric High-Speed Passenger Demonstration Locomotive
    effort with advanced and enabling technologies. ALPS developed
    prototype subsystems are planned for introduction into the
    demonstration locomotive as they become available and as the locomotive
    test schedule permits. The high-speed generator (Megagenerator) will be
    the first component delivered. The prototype Megagenerator is currently
    in the assembly stage, with initial testing scheduled to begin in
    August 1999. Requested fiscal year 2000 funding will complete the
    testing and prepare the machine for installation into the locomotive.
    Schedules for full load testing and final integration preparations show
    completion in June 2000, so the introduction into the new locomotive
    can occur at any time after that.
        All flywheel component fabrication will be completed, and assembly
    operations will be approximately 75 percent completed within fiscal
    year 1999. Fiscal year 2000 activities will include completion of the
    flywheel assembly, spin testing of the flywheel in the laboratory,
    revision of the Megagenerator design for use with the flywheel, design
    of the flywheel power converters which provide the locomotive power
    system interface, and the identification of a suitable tender car for
    demonstrating the flywheel. The current schedule envisions completion
    of the flywheel development and testing in 2001.
        Activities through 1998 were cost shared on a 50/50 basis and the
    project was administered through the National Electric Vehicle
    Consortium at the Defense Advanced Research Projects Agency. Beginning
    this year, a cooperative agreement between the University of Texas and
    FRA is being finalized to complete the project. The project
    participants (AlliedSignal, the U.S. Navy, and the Association of
    American Railroads) are providing cost sharing of roughly 25 percent
    during fiscal year 1999.
        Studies conducted indicate that ALPS technologies will provide
    substantial benefits (improved fuel economy, reduced trip times,
    reduced maintenance costs) to future non-electric locomotives. After
    the initial introduction of turbine locomotives, and demonstration of
    the ALPS technologies; it is believed that its integration into
    commercial systems will be straightforward and justifiable on economic
    and performance bases. It is expected that after demonstrations are
    completed in fiscal year 2001, the products of the ALPS program will be
    ready for commercial applications.
                            status of ndgps project
        Question. Please bring us up to date on the status of the
    nationwide differential global positioning system and the FRA's role in
    that initiative. Provide a funding history, as well as a 5-year
    schedule of benchmarks, anticipated costs, and anticipated funding
    sources (please specify which DOT or other federal agencies will be
    providing funds).
        Answer. On March 15, 1999, the Secretary of Transportation and the
    Commandant of the U.S. Coast Guard announced Full Operational
    Capability of the Maritime DGPS Service, which provides differential
    coverage along the coasts, the Great Lakes, and the Mississippi River.
    At the same time, the Secretary and the Commandant announced the
    expansion of that Service into a Nationwide DGPS (NDGPS) with the
    addition of eight operational inland GWEN sites. FRA's role in this
    initiative is to support the addition of the inland sites and to
    coordinate their implementation with railroad positive train control
    projects. FRA was given this responsibility because railroads
    especially need a continuous, uniform, accurate, high-quality
    radionavigation signal for new Positive Train Control systems. The
    Coast Guard will be responsible for the actual construction, operation,
    and maintenance of the NDGPS. FRA will reimburse Coast Guard from the
    fiscal year 2000 RABA funds for these services.
        The NDGPS project will take 5 years to complete (1998-2002) at an
    estimated cost of $37 million in capital funding. Once fully
    implemented, the system is estimated to cost approximately $6.9 million
    per year to operate and maintain. An allocation of Capital and
    Operating costs by fiscal year is detailed in the table below:

                            [In millions of dollars]
    ------------------------------------------------------------------------
                                                                 Operating
                   Fiscal year                 Capital costs       costs
    ------------------------------------------------------------------------
    1998....................................         \1\ 2.4  ..............
    1999....................................         \1\ 5.5  ..............
    2000....................................         \2\ 7.2         \2\ 3.2
    2001 and beyond.........................         ( \3\ )         ( \3\ )
    ------------------------------------------------------------------------
    \1\ Appropriated.
    \2\ Requested.
    \3\ TBD.

        Based on the funding made available in the fiscal year 1999
    Appropriations Act, 12 GWEN sites, including one that was converted at
    Clark, South Dakota in February of 1999, will be integrated into the
    NDGPS by the end of fiscal year 1999. The fiscal year 2000 phase of
    this five-year project will expand the NDGPS by an additional 17
    transmitting sites and complete the NDGPS Master Control Station
    installations at Alexandria, Virginia, and Petaluma, California. The
    current plan is for the establishment of 16 sites through fiscal year
    1999, 17 sites in fiscal year 2000, 22 sites in fiscal year 2001, and
    12 sites in fiscal year 2002 for a total of 67 NDGPS stations. As
    required by Public Law105-66, Section 346, the new sites will all be
    integrated into the Continuously Operating Reference Station (CORS) and
    Precipitable Water Vapor System (PWVS) networks operated by the US
    Department of Commerce.
        No decision has been made regarding which Federal agency, if any,
    will request federal funding to achieve these benchmarks. In addition,
    many other federal and state organizations see the benefit of the NDGPS
    service and have offered their support. Examples of this support
    include: GWEN assets from USAF; TVA staging and storage sites
    (including environmental analysis); US Army Corps of Engineers real
    property; and Minnesota DOT real property and environmental analysis.
    Discussions are continuing with other organizations concerning
    potential broadcast sites, environmental analysis, and long-term
    facility maintenance. It is anticipated that as the value of the NDGPS
    is increasingly understood across the nation, offers to contribute to
    its establishment will similarly increase.
                         integration of ndgps with ptc
        Question. How is the NDGPS program being integrated with positive
    train control efforts already underway?
        Answer. All modes of transportation need precise positioning
    information. This information must be in real time and must be accurate
    to permit safe control of vehicles--trains, ships, aircraft, trucks,
    automobiles, transit, and emergency response. Intelligent
    Transportation Systems are being designed to incorporate precise
    positioning information. Coverage and integrity are important
    attributes of a positioning system.
        Over a 7-year period, railroads experienced at least 876 collisions
    and other accidents, which fully-implemented communications-based
    positive train control (PTC) systems would likely have prevented. In
    fact, the National Transportation Safety Board has listed PTC as one of
    its ``ten most-wanted'' initiatives for national transportation safety.
    FRA proposes to facilitate the deployment of PTC within the railroad
    industry by completing the installation of a Nationwide Differential
    Global Positioning System (NDGPS) network, which FRA and several
    railroads have determined to be a prerequisite for PTC.
        In July, 1994, FRA published a report to Congress, entitled
    Railroad Communications and Train Control, as required by the Rail
    Safety Enforcement and Review Act. In that report, FRA outlined an
    action plan and time line to advance PTC deployment by the end of the
    century. FRA indicated that in fiscal year 1997 it would commence
    rulemaking regarding the installation PTC on identified railroad
    corridors. That rulemaking has begun and is taking place under the
    auspices of the Railroad Safety Advisory Committee.
        In June, 1995, FRA published another report to Congress, entitled
    Differential GPS: An Aid to Positive Train Control, in response to a
    request from the Senate and House Appropriations Committees. It
    concluded that if the Coast Guard's DGPS service were expanded
    nationwide, it could satisfy the location determination system
    requirements for PTC systems. Full nationwide deployment of the Coast
    Guard DGPS network would significantly aid the development and
    deployment of PTC systems by providing an affordable, uniform,
    continuous, accurate, reliable, secure, real-time location
    determination system throughout the United States.
        PTC systems that will use positioning information from the NDGPS
    are being installed in Alaska, Illinois, Michigan, South Carolina, and
    Georgia, and are being considered in other areas of the country because
    of the need to handle growing railroad freight, intermodal, intercity
    passenger, and commuter rail traffic at higher levels of safety.
                             status of ndgps report
        Question. What is the status and major findings of the report on
    the nationwide differential global positioning system that the
    Committee directed the Department to submit with the fiscal year 2000
    budget justification (page 112, Senate Report 105-249)?
        Answer. The draft report has been completed and is in the clearance
    process. FRA expects to forward the final report to the Committees in
    June 1999.
      fiscal years 1998-2000 funding of grade crossing hazard mitigation
                                  technologies
        Question. Regarding the development of grade crossing hazard
    mitigation technologies, please prepare a table indicating separately
    the status, problems, and challenges, along with the fiscal year 1998,
    fiscal year 1999 and planned fiscal year 2000 FRA investments for each
    major project in this program.
        Answer. The information is contained in the following tables.

    ----------------------------------------------------------------------------------------------------------------
                                                                                        Fiscal year
                                                                     -----------------------------------------------
                                                                       1998 Enacted    1999 Enacted    2000 Request
    ----------------------------------------------------------------------------------------------------------------
    Sealed Corridor.................................................      $2,000,000  \1\ $2,000,000        $400,000
    Mitigating Hazards..............................................       2,500,000       2,500,000       2,500,000
    Low Cost HSR Crossing...........................................       1,100,000       1,100,000       1,100,000
                                                                     -----------------------------------------------
          Total.....................................................       5,600,000       5,600,000       4,000,000
    ----------------------------------------------------------------------------------------------------------------
    \1\ Includes $1M from TEA-21 and $1M from NGHSR Program.

                                      GRADE CROSSING HAZARD MITIGATION TECHNOLOGIES
    ----------------------------------------------------------------------------------------------------------------
                                                             Status                       Problems and challenges
    ----------------------------------------------------------------------------------------------------------------
    Sealed Corridor.......................
                                            Tests of long gate arms and articulated   North Carolina DOT is
                                             gate arms are complete and produced       examining alternate routes
                                             reductions of violations of 67 percent    between Durham and Raleigh.
                                             and 78 percent, respectively.
                                             Significant construction has been
                                             completed since the Master Agreement
                                             between the Norfolk Southern Railroad
                                             and NCDOT was signed April 6, 1998: 4
                                             crossings with four-quadrant gates; 15
                                             crossings with median barriers (with 3
                                             more getting concrete barriers in
                                             1999); 1 crossing with long gate arms
                                             with 10 more in design (51 are
                                             planned); and 12 crossings closed (4
                                             private), with plans to close an
                                             additional 7 crossings.
    Locked Gate at Private Crossing.......  Project awarded to NYSDOT under BAA in    No significant issues at this
                                             1997. Work has involved finding an        time.
                                             appropriate site, negotiating with the
                                             private land owner and CSX railroad,
                                             and other details needed before the
                                             demonstration can begin.
    Broad Agency Announcement (BAA).......  Additional projects are planned for       No significant issues at this
                                             award in fiscal year 1999. Two            time.
                                             selected, but not yet awarded, include
                                             examining electronic sensors for
                                             detecting grade crossing hazards and
                                             using advanced video content extraction
                                             for detecting obstacles at grade
                                             crossings. Awards for these concepts
                                             are forthcoming. The BAA is still open
                                             and applications are reviewed as they
                                             are received.
    ----------------------------------------------------------------------------------------------------------------

              status of tea-21 funded hsr grade crossing projects
        Question. What is the status of each of the high speed rail
    corridor crossing hazard elimination projects under TEA-21 Section
    1103(c)? How much contract authority is requested in fiscal year 2000
    under current law? How much contract authority is requested under the
    Administration's budget request? What would be the source of those
    additional funds?
        Answer. Under current law, $5.25 million in contract authority is
    available in fiscal year 2000. The Administration has requested all of
    this plus $15 million from the Highway Trust Fund's Revenue Aligned
    Budget Authority (RABA). The accomplishments of the grade crossing
    hazard mitigation program, begun under section 1010 of ISTEA and
    extended under section 1103(c) of TEA-21, are presented in the
    following table.

                     ACCOMPLISHMENTS--FISCAL YEARS 1992-1998
                            [In thousands of dolalrs]
    ------------------------------------------------------------------------
                                          Funds
                  State                   rec'd         Accomplishments
    ------------------------------------------------------------------------
    California.......................       5,700  To date, 45 crossings
                                                    have been upgraded, 13
                                                    crossings (11 private
                                                    and 2 public) closed,
                                                    and 18 proposed for
                                                    closure. Fresno County
                                                    has agreed to close two
                                                    public crossings in
                                                    exchange for upgrades to
                                                    18 additional grade
                                                    crossings. Five have
                                                    been upgraded and the
                                                    remaining 13 will be
                                                    upgraded over a two year
                                                    period. The design for a
                                                    simplified grade
                                                    separation for farm
                                                    vehicles (an underpass)
                                                    in San Joaquin County is
                                                    complete. Construction
                                                    is scheduled for Summer,
                                                    1999.
    Florida..........................       3,700  Nine crossings have been
                                                    upgraded with median
                                                    gates, 22 equipped with
                                                    medians, four with 4-
                                                    quadrant gates with
                                                    video monitoring, 3 with
                                                    gate extensions, and
                                                    event recorders are
                                                    planned for all 72
                                                    crossings and 26 track
                                                    control points with
                                                    radio link to
                                                    Jacksonville, FL
                                                    dispatcher. Two event
                                                    recorders have been
                                                    installed and the
                                                    balance are programed
                                                    for installation in 1999
                                                    and 2000.
    Illinois                                4,725  Demonstration of the
                                                    Vehicle Arrester Barrier
                                                    (VAB) has begun at two
                                                    of three crossings and
                                                    the third should be
                                                    operational shortly.
                                                    Testing and evaluation
                                                    will last 18-24 months.
                                                    Preliminary engineering
                                                    for a grade separation
                                                    at Chatham with closure
                                                    of two crossings is
                                                    underway. In addition,
                                                    three crossings on the
                                                    high-speed route have
                                                    been closed.
    Indiana..........................       1,200  One crossing was upgraded
                                                    with flashing lights and
                                                    gates, one 4-quadrant
                                                    gate and eight closures
                                                    are planned, and funding
                                                    has been provided for
                                                    the preliminary
                                                    engineering for a bridge
                                                    at Wilson Road, Burns
                                                    Harbor.
    Michigan.........................       5,175  Three public and 12
                                                    private crossings have
                                                    been closed and an
                                                    alternate access road
                                                    constructed, and 36
                                                    grade crossings have
                                                    been upgraded.
                                                    Installation of median
                                                    barriers and upgrading
                                                    additional crossings are
                                                    in the planning and
                                                    design stage. This
                                                    summer, MIDOT and Amtrak
                                                    will begin closing 16 to
                                                    20 private crossings on
                                                    the Amtrak-owned track
                                                    segment between
                                                    Kalamazoo and the
                                                    Michigan/Indiana state
                                                    line.
    North Carolina...................       2,830  Four crossings have been
                                                    equipped with four-
                                                    quadrant gates, 15
                                                    crossings with median
                                                    barriers (3 more will
                                                    get concrete barriers
                                                    this summer), 1 crossing
                                                    with long gate arms with
                                                    10 more in design (51
                                                    are planned), and 12
                                                    crossings have been
                                                    closed (4 private).
                                                    There are plans to close
                                                    an additional 7
                                                    crossings by the end of
                                                    1999. Traffic Separation
                                                    studies have identified
                                                    up to 13 additional
                                                    crossings as candidates
                                                    for closure. A connector
                                                    road to a new grade
                                                    separation in Greensboro
                                                    will begin construction
                                                    in late 1999, with
                                                    construction of the
                                                    grade separation to
                                                    follow at a later date.
                                                    When complete, three
                                                    crossings will be
                                                    closed.
    Oregon...........................         625  Eight crossings in Salem
                                                    have been upgraded, one
                                                    median barrier
                                                    installed, and two
                                                    crossings have been
                                                    closed. A work plan to
                                                    demonstrate a locked
                                                    gate at a private
                                                    crossing with control by
                                                    the railroad dispatcher
                                                    is being developed.
    Virginia.........................       4,245  To date, 36 crossings
                                                    have been upgraded, 4-
                                                    quadrant gates planned
                                                    for one crossing, 4
                                                    crossings closed,
                                                    preliminary engineering
                                                    for 2 grade separations
                                                    is complete, and design
                                                    for one pedestrian
                                                    bridge is complete.
    Washington.......................       3,900  Two date, 18 crossings
                                                    have been upgraded, 3
                                                    closed, and preliminary
                                                    engineering for one new
                                                    grade separation is
                                                    underway. The design for
                                                    rebuilding one bridge in
                                                    Kelso, which will
                                                    eliminate one crossing,
                                                    is complete and
                                                    construction will begin
                                                    later this year. The
                                                    access road needed to
                                                    support the closure of
                                                    two crossings in Cowlitz
                                                    County is in the design
                                                    phase.
    Wisconsin........................         100  A study examining a grade
                                                    crossing in Sturtevant
                                                    is complete. Five
                                                    alternative treatments
                                                    for this site were
                                                    developed by a
                                                    consultant's study,
                                                    including three
                                                    locations for a grade
                                                    separation. These
                                                    alternatives are now
                                                    being evaluated by the
                                                    State.
                                      -------------
          Total......................      32,200
    ------------------------------------------------------------------------

              status of gulf coast corridor grade crossing project
        Question. What is the status of the Gulf Coast corridor hazard
    mitigation project, and is additional funding required for that effort?
        Answer. At a news conference on November 18, 1998 in New Orleans,
    Secretary Slater announced the designation of the Gulf Coast High-Speed
    Rail Corridor. Present at that meeting were Senator Trent Lott,
    Governor Kirk Fordice, Meridian Mayor John Robert Smith and New Orleans
    Mayor Marc Morial as well as other notable guests that heartily
    endorsed this action and pledged to implement the high-speed rail
    corridor.
        FRA held a kick-off meeting with corridor and state representatives
    from Louisiana, Mississippi, Alabama and Texas on February 11, 1999 in
    New Orleans to discuss next steps, funding available and the
    establishment of an action plan.
        The fiscal year 1999 Enacted earmarked $1 million of the fiscal
    year 1999 TEA21 funds for the Gulf Coast Corridor. The four states of
    the Gulf Coast Corridor, Texas, Louisiana, Mississippi and Alabama,
    applied for more than $6.7 million under this program. Section 1601 of
    the TEA21, ``High Priority Projects Program'', also contains a 1999
    earmark for $1 million of funding for the portion of the high-speed
    rail corridor in Louisiana. Finally, Amtrak has promised $1 million for
    the Gulf Coast Corridor in its 1999-2000 budget and is negotiating uses
    of those funds now with the Southern Rapid Rail Transit Commission and
    other corridor representatives. The corridor, however, is almost 1,000
    miles in length and has over 1,100 grade crossings. A regular long term
    funding program to eliminate or upgrade grade crossings, to insure
    safety, will be required in order to allow for higher speeds on the
    corridor.
           status of kalamazoo to grand beach grade crossing projects
        Question. What is the status of the Kalamazoo to Grand Beach,
    Michigan corridor, which received an earmark of $250,000 in fiscal year
    1999?
        Answer. This segment of the Detroit-Chicago high-speed corridor is
    owned by Amtrak and has an alignment which will allow operating speeds
    of 110 mph or higher. To date, Michigan has received $5.175 million in
    grade crossing hazard mitigation funds. Using approximately half of
    these funds, 36 grade crossings have been upgraded, 3 public and 12
    private crossings have been closed with one alternate access road
    constructed. Using the remaining funds, the state is planning to
    install median barriers and upgrade additional crossings. MIDOT is in
    the process of contracting with Amtrak to close 16 to 20 private
    crossings on the Amtrak-owned track segment between Kalamazoo and the
    Michigan/Indiana state line. Preliminary work is well underway, and
    closures will begin this summer. This work is estimated at $966,000.
        For fiscal year 1999, the State has applied for $5.5 million to
    begin design for a grade separation and to close five crossings and
    upgrade nine crossings, including construction of walls along the
    railroad right-of-way to prevent trespassing.
        Other notable progress in the corridor has resulted from the
    ``Model Community Initiative'' program. In Dowagiac, an fiscal year
    1994 grant of $600,000 enabled the city to close two crossings of six
    within the town, and upgrade the warning systems at the remaining four
    crossings. These funds were also instrumental in leveraging an
    additional $1,052,340 in federal, state and local funds for the
    realignment of Depot Road, commercial improvements and renovations to
    the Dowagiac depot and the adjacent area.
        In fiscal year 1995, the Model Community Initiative program used $1
    million to close 12 private crossings in Comstock. This funding, along
    with $800,000 in state funds, was used to complete the closure of these
    12 private crossings, one additional public crossing and construct an
    alternate access road.
       status of milwaukee to wisconsin-illinois grade crossing projects
        Question. What is the status of the Milwaukee to the Wisconsin-
    Illinois border corridor, which statutorily receives $250,000 of the
    $5,250,000 in section 1103 of TEA-21?
        Answer. TEA-21 set aside not less than $250,000 to be available
    each fiscal year for eligible improvements to the Minneapolis/St. Paul-
    Chicago segment of the Midwest High-Speed Rail Corridor. Wisconsin DOT
    has proposed $500,000 to upgrade four crossings between Milwaukee and
    Chicago with new lights, gates, and constant warning time (CWT)
    circuits. Minnesota DOT supports this work. Amtrak, which runs 14
    trains per day on the line, has indicated that upgrading the four
    crossings is its highest priority.
        Wisconsin and Minnesota have participated in the nine-state Midwest
    Regional Rail Initiative of which this line is a major segment. Both
    states are completing the analysis of the requirements to upgrade this
    line for 110 mph service.
                       status of sealed corridor project
        Question. What is the status of the sealed corridor project? Why
    are you proposing a decrease in funding at this time for that
    initiative? How much do you expect to allocate to the sealed corridor
    project during fiscal year 1999?
        Answer. The planning and installation of median barriers, four-
    quadrant gate systems, long gate arms and other warning devices
    continues, as do the efforts to close redundant crossings. With the
    funding to be received in fiscal year 1999, the demonstration will be
    extended from Charlotte to Durham and will cover 168 public crossings.
        Additional technologies have been tested at Orr Road in Charlotte:
    long gate arms produced a decrease in violations by 67 percent and an
    articulated gate (which has a hinge allowing it to fold over on itself)
    produced a 78 percent reduction in traffic violations. The Video
    Ticketing project in Salisbury has proven very successful at reducing
    violations (by 78 percent) and without requiring the passage of special
    legislation. To date:
      --4 crossings have been equipped with four-quadrant gates;
      --15 crossings with median barriers (3 more will get concrete
            barriers this summer);
      --1 crossing with long gate arms with 10 more in design (51 are
            planned); and
      --12 crossings have been closed (4 private).
        There are plans to close an additional 7 crossings in the next 6
    months. Seven Traffic Separation studies are underway to identify
    additional crossings eligible for closure (perhaps as many as 13).
        A connector road to a new grade separation in Greensboro will begin
    construction in late 1999, with construction of the grade separation to
    follow at a later date. When complete, three crossings will be closed.
        From 1996 to date, $7.58 million has been provided from FRA's Next
    Generation High-Speed Rail (NGHSR) and Section 1010 (Intermodal Surface
    Transportation Efficiency Act (ISTEA)) programs. Overall, the State has
    matched the Federal allocations by approximately 20 percent.
        There is $2 million in fiscal year 1999 funds available for Sealed
    Corridor Initiative: $1 million from the section 104(d)(2) program, the
    extension of the section 1010 program; and $1 million from the Next
    Generation High-Speed Rail program. The State is providing $500,000 in
    matching funds in fiscal year 1999. These funds will enable crossings
    between Burlington and Durham to be evaluated and treated.
        The State is examining alternative routes between Durham and
    Raleigh. Estimates for completion of the Sealed Corridor between Durham
    and Raleigh is very roughly estimated to cost an additional $3-4
    million, but much work needs to be done to examine the alternative
    alignments, identify crossings for consolidation and develop plans for
    treating those that remain. Because of these alignment questions and
    the studies needed, an allocation of $400,000 will be adequate for the
    State in fiscal year 2000.
                        arrester net project--next steps
        Question. What is the next step in the advancement of the arrester
    net project? What has this project accomplished? Are other communities
    likely to deploy the technology? What is FRA doing to accomplish that
    objective?
        Answer. The next step for the arrester net project is to complete
    the demonstration. The arrester net is being demonstrated at three
    locations on the Chicago-St. Louis high-speed rail corridor:
        1. Trunk Rte 35A, near Chenoa, (UP, mp 105.93) Crossing # 290786R
        2. US Route 136, McLean, (UP, mp 141.2) Crossing # 290964A
        3. Hawthorne St., Hartford, (Gateway Western Railway and UP, UP MP
    264.85), Crossing # FAU 8975.
        The two sites at Chenoa and McLean have been operating
    independently since the last week in March, 1999. The site in Hartford
    is undergoing the final pretests needed before beginning independent
    operations. The demonstration will continue for 18 to 24 months, and
    evaluations of the video images recording driver behavior and any
    impacts, driver surveys and other human factor and mechanical
    evaluations will be conducted by the University of Illinois.
        Future use of the vehicle arrester barrier (VAB) will be determined
    by the results of the demonstration. The results will include:
    practicality in terms of reliability, maintainability, and cost of the
    hardware; susceptibility to vandalism; public acceptance of the concept
    (both before and after an impact occurs), and railroad acceptance based
    on whether disruption and delays are created both before and after an
    impact occurs. Potential delays and disruption, and possibly secondary
    accidents, could result from the debris after a first vehicle impacts
    the net. Other factors to be considered are the highway volumes and
    speed, percentage of large trucks, sight distance and visibility as
    determined by local weather conditions (such as the tendency for fog at
    certain times of day). Should the demonstration prove effective, the
    FRA will work with State DOT's to develop the installation criteria and
    estimates of funding necessary for their deployment.
           status and funding of hsr track and structures technology
        Question. Regarding the development of high-speed rail track and
    structure technologies, please prepare a table indicating separately
    the status, problems, and challenges, along with the fiscal year 1998,
    fiscal year 1999, and planned fiscal year 2000 FRA investments. Please
    include information on each major FRA project in that program.
        Answer. The information is contained in the following tables.

    ------------------------------------------------------------------------
                                   Fiscal year
    -------------------------------------------------------------------------
                  1998 Enacted                 1999 Enacted    2000 Request
    ------------------------------------------------------------------------
    Track and structures funding............      $1,200,000      $1,200,000
    ------------------------------------------------------------------------

                     TRACK AND STRUCTURES STATUS AND ISSUES
    ------------------------------------------------------------------------
                                            Status              Issues
    ------------------------------------------------------------------------
    Advanced HS Rail Vehicle and     Prototype            System greatly
     Track Monitoring System          successfully         reduces costs of
     (Portable on board device for    tested. In-service   FRA-required ride
     monitoring ride quality with     demonstration        quality
     remote communications            underway in          monitoring in
     capability).                     Pacific Northwest.   Pacific
                                      CALTRANS using to    Northwest.
                                      monitor service      Methodology to
                                      quality on San       most effectively
                                      Joaquin line.        use detailed
                                                           information
                                                           provided by
                                                           system will be
                                                           further refined
                                                           through
                                                           operational
                                                           experience.
    Evaluation and Demonstration of  Initial analyses     Project proceeding
     Techniques to Assure Subgrade    completed,           as planned.
     Performance for High-Speed       demonstration site   Expected to
     Track.                           selection underway.  greatly reduce
                                                           life-cycle cost
                                                           of correcting
                                                           certain types of
                                                           subgrade
                                                           anomalies.
    Demonstration of HS Track        First Stage of       Results indicate
     Maintenance Using Objective      project completed    substantial
     Gage Strength Data.              early CY 1999 on     opportunities to
                                      Richmond-            use gage strength
                                      Washington           data to reduce
                                      corridor. Second     cost of upgrading
                                      stage pending.       and maintaining
                                                           wood-tie track
                                                           for high-speed
                                                           services.
    BAA 98-1 project to demonstrate  Concept selected,    Could decrease
     techniques to treat              contract to be       costs of
     maintenance-intensive subgrade   awarded shortly.     correcting
     problems.                                             certain types of
                                                           maintenance
                                                           problems by as
                                                           much as 90
                                                           percent over
                                                           current
                                                           techniques.
    BAA 98-1 project to demonstrate  Concept selected,    Previous work in
     techniques to improve ride       contract to be       this area
     quality and increase speeds      awarded shortly.     resulted in the
     over bridges and other                                successful
     sections of track with large                          demonstration of
     stiffness variations.                                 low-cost tie pads
                                                           which improve
                                                           ride quality to
                                                           permit higher
                                                           speeds over some
                                                           bridges at
                                                           minimum cost.
    BAA 98-1 project to develop      Concept selected,    No outstanding
     methodology to apply             contract to be       issues at this
     ultrasonic track inspection      awarded shortly.     time.
     techniques to high-speed
     tracks to minimize maintenance
     costs while assuring safe
     operations.
    BAA 98-1 project to identify     Concept selected,    No outstanding
     components which can be used     contract to be       issues at this
     to upgrade speeds over special   awarded shortly.     time.
     trackwork at minimal cost.
    Broad Agency Announcement BAA    Concept selected,    No significant
     98-1 to solicit additional       contract to be       issues at this
     proposals in this technology     awarded shortly.     time.
     area.
    ------------------------------------------------------------------------

                     r&d vs nghsr high-speed rail projects
        Question. There would seem to be a natural synergy and overlap
    between NGHSR's track and structures technology program, and R&D's
    safety of high-speed ground transportation program. What are the
    distinctions between these programs? Could the track and structures
    technology program be integrated into the R&D safety of high-speed
    ground transportation program?
        Answer. Although both programs deal with track and structures
    issues, the programs have different objectives, different
    constituencies, and different implementation mechanisms. The NGHSR
    track and structures technology program is targeted at meeting the
    needs of states proposing to upgrade existing lines to higher speeds,
    and to successfully and economically maintain the higher service
    levels. While safety is always a consideration, to a significant degree
    the NGHSR efforts target cost effectiveness issues which are outside
    the purview of the safety-related programs. The primary constituency
    for the NGHSR efforts is state transportation officials. The primary
    mechanism for implementation of the NGHSR program is financial
    assistance grants and cooperative agreements to demonstrate worthwhile
    new technologies. Of course, as with all NGHSR program efforts, new
    technologies will succeed only if they are consistent with the needs of
    all partners participating in the incremental corridor upgrades,
    including safety, and including the needs of freight railroads which
    often own, operate, and maintain the corridors.
        Although the corridors are operated by the freight railroads, it is
    important to note the nationwide trend toward states contributing major
    capital amounts for corridor maintenance and improvement. A single
    example: CALTRANS contributed almost $100 million to upgrade the
    infrastructure of the Union Pacific route between Sacramento and
    Oakland, in exchange for the right to operate five additional passenger
    roundtrips per day in the increased line capacity resulting from the
    improved signal system and eliminating longstanding traffic
    bottlenecks. The NGHSR technology development effort is targeted at
    increasing the resulting performance and/or reducing the total required
    investment of these scarce dollars.
        In contrast, the objective of the safety of high-speed ground
    program is to assure that high-speed operations are safe. In this
    regard, a primary constituency of this program element is FRA's Office
    of Safety which requires technical support to assess new technologies
    and to underpin necessary rulemakings, such as the revised Track Safety
    Standards which now address operations at speeds over 110 mph. The
    program implementation mechanism is primarily contracts and work with
    technical resources such as the Volpe Center. One element of providing
    technical support capability is to have adequate technical support
    facilities, including the proposed high-speed test car which will be
    available to conduct safety research tests and assessments in the
    higher speed environment. As many new high-speed initiatives are
    undertaken, often utilizing new equipment designs, track-train dynamics
    issues will arise with very high visibility and very high priority to
    resolve. The success of implementing the new high-speed programs will
    depend on FRA's ability to quickly and effectively deal with such
    issues. This can be accomplished only if resources are provided
    targeted for this purpose.
        In summary, the two programs are significantly different and will
    be most effective if the present program structure is retained.
                                 maglev program
        Question. Does the Administration seek to continue implementing the
    provisions specified in TEA-21 for the planning, development, and
    implementation of maglev projects? If not, please explain, and further
    justify the proposed transfer of funds requested from the maglev
    program to the advanced vehicle technology program?
        Answer. The Administration shares with Congress the ultimate goal
    of deploying cost effective magnetic levitation systems. However, the
    Administration does not propose to continue implementing the provisions
    of Section 1218 of TEA-21, the Maglev Deployment Program beyond fiscal
    year 1999. The preponderance of research, including FRA's analysis,
    indicate that Maglev systems are not currently cost-effective, and
    cost-justified. Therefore, the President's fiscal year 2000 Budget
    proposes $20 million appropriation of RABA funds to initiate an
    intensive research program to refine existing technology and develop
    new American technology to reduce the capital costs of maglev
    deployment. The two operational high-speed maglev systems that have
    been developed to date, those of Germany and Japan, can cost from $20
    to $50 million dollars per mile. The proposed research would be
    directed toward significantly reducing the cost of a maglev project,
    making it more feasible under the Maglev Deployment Program. Meanwhile,
    the $20 million in contract authority under TEA-21 is proposed to be
    transferred to advanced vehicle technology program.
                          maglev administrative costs
        Question. In fiscal year 1999, $500,000 of the total $15,000,000
    maglev program was made available for FRA's administrative expenses and
    technical assistance. Please specify exactly how these funds are being
    spent in fiscal year 1999. Assuming that the TEA-21 maglev contract
    authority funds will not be transferred to the advanced vehicle
    technology program, what are the maglev program administrative needs in
    fiscal year 2000?
        Answer. Of the $500,000 earmarked for administrative and technical
    assistance, $225,000 was allocated to the Volpe National Transportation
    Systems Center (VNTSC) to provide analytical support to FRA for the
    administration of the Maglev Deployment Program. The VNTSC has
    considerable experience from previously funded maglev initiatives. The
    remaining balance will be used for contract support in technical
    monitoring and reporting on the States and authorities selected to
    prepare Project Descriptions.
        At least $2,000,000 in administrative funding would be needed in
    fiscal year 2000 to continue an adequate level of contract support from
    VNTSC and other contractors, and to lay the groundwork for the approval
    of the technology within safety parameters.
                        staffing for the maglev program
        Question. Were any new positions associated with the maglev
    administrative funding? If so are these part of the additional FTE
    request?
        Answer. None of the $500,000 in maglev administrative funds
    authorized for fiscal year 1999 is being used to fund new positions.
                earmark for blacksburg, virginia maglev project
        Question. Funding for the Blacksburg, Virginia maglev project was
    conditioned upon the financial participation of the Commonwealth of
    Virginia. Has the State committed to providing the required one-third
    match? Will a reprogramming be necessary to free up these funds for
    another maglev applicant?
        Answer. FRA has not received an application for a project in or
    near Blacksburg, Virginia. The House and Senate subcommittees staff
    have advised FRA that the funds may be allocated to other maglev
    applicants, in accordance with FRA procedures, without further action
    by Congress.
              status of philadelphia to pittsburgh maglev project
        Question. Please update the Committee on the status of the
    Philadelphia to Pittsburgh high-speed intercity magnetic levitation
    project, which received $5,000,000 in fiscal year 1999. Have these
    funds been released to the Commonwealth of Pennsylvania or another
    designated public authority?
        Answer. FRA has received an application for a preconstruction
    planning grant from the Port Authority of Allegheny County. The grant
    will support a 45 mile maglev line, linking Pittsburgh Airport to
    Pittsburgh and its eastern suburbs, as the initial segment of a
    Pittsburgh to Philadelphia system. The Federal Railroad Administration
    is in the process of negotiating a cooperative agreement with the Port
    Authority of Allegheny County to conduct the preconstruction planning
    activities and will release funds once the agreement is signed.
                fiscal year 1999 applications for maglev funding
        Question. As of February 16, 1999, the Federal Railroad
    Administration had received eleven applications for preconstruction
    planning grants from states or authorities designated by states. Of
    these eleven, has any project subsequently withdrawn its application?
        Answer. An application from the University of Alabama at Huntsville
    has been withdrawn, and an application from the City of Birmingham,
    Alabama was never completed. The Huntsville application supported a
    line between Huntsville and Decatur, Alabama, representing the first
    phase of a 350-400 mile system, connecting Memphis, TN with Atlanta,
    GA.
                rating, selection and funding of maglev projects
        Question. Has the FRA convened a rating committee to recommend the
    most meritorious projects to the Administrator? When will these be
    selected and announced? How many projects will receive fiscal year 1999
    funds? What will the grant amounts be?
        Answer. The FRA Administrator appointed a six person Rating
    Committee to review, score, and rate the applications that were
    received by FRA for preconstruction planning grants. The applicants
    have been selected and the process should be completed by the week of
    May 17. Details regarding the grant amounts will be available after the
    Secretary announces his decision and FRA has negotiated with the
    applicants.
              status of the rhode island rail development project
        Question. Please provide a funding history of the project,
    detailing funding sources, amounts, and project benchmarks, by fiscal
    year, from the project's inception to completion.
        Answer. Funding for the Rhode Island Project began in fiscal year
    1995 when Congress appropriated $5 million for the Freight Rail
    Improvement Project (FRIP). An additional $23 million was appropriated
    between fiscal years 1996 and 1999 in the following annual amounts:
    fiscal year 1996--$1 million; fiscal year 1997--$7 million; fiscal year
    1998--$10 million; and fiscal year 1999--$5 million. Through fiscal
    year 1999 a total of $28 million has been appropriated. An additional
    $10 million is requested in fiscal year 2000 for a total of $38
    million. The Federal commitment is $55 million.
        In the November, 1996 elections, Rhode Island voters approved a
    bond referendum, the proceeds of which would be used by the state to
    satisfy the dollar-for-dollar matching requirement of the Rhode Island
    Project.
        Benchmarks or milestones for the Project include:
      --March 1995: RIDOT and FRA sign a grant agreement which obligates
            the first $5 million of Federal funds.
      --May 1998: Administrators Wykle of the Federal Highway
            Administration, and Molitoris of the Federal Railroad
            Administration sign the environmental record of decision for
            the Freight Rail Improvement Project.
      --November 1998: Amtrak and RIDOT sign the Track 7 construction
            agreement.
      --April 1999: Construction of 5 miles of replacement track scheduled
            to begin and continue for 15 months.
      --April 2000: Construction of the third track scheduled to begin and
            continue for 18 months.
      --Bridge construction packages 1 through 5b scheduled to be awarded
            during the first eight months of 2000.
      --Summer of 2001: All bridge construction packages scheduled to be
            completed.
      --Fall of 2001: High and wide rail operations authorized.
                completion date of the rhode island rail project
        Question. When is the estimated date of completion for this rail
    access project? What is the 2000 and outyear funding and construction
    schedule?
        Answer. RIDOT estimates that the FRIP will be sufficiently
    completed by the Fall of 2001 to allow high and wide rail operations to
    begin. Estimates of cash outlays continue through the second quarter of
    fiscal year 2001, an indication that a limited amount of construction,
    and final contract payments, will occur beyond the start of rail
    operations.
        Through fiscal year 1999, $28 million of Federal funds have been
    appropriated leaving a balance of $27 million to complete the Federal
    commitment of $55 million for the FRIP. If the Administration's fiscal
    year 2000 budget request of $10 million is appropriated the balance
    will fall to $17 million. Exactly how much of this remainder is
    requested for fiscal year 2001 and 2002 is to be determined.
               coordination of rhode island rail and nec project
        Question. Please describe how the ongoing work on the Rhode Island
    freight corridor is coordinated with the Northeast Corridor
    electrification and track work between Providence and Quonset Point/
    Davisville. Is there a possibility that freight track construction that
    extends beyond the Northeast Corridor completion will interfere with
    Amtrak operations?
        Answer. Acknowledging the need for careful coordination between
    construction activities associated with the Freight Rail Improvement
    Project and Northeast Corridor track and electrification work, RIDOT
    decided to contract directly with Amtrak for all its track work. This
    arrangement will allow Amtrak to make all decisions with regards to
    material procurement, construction planning, and train operations to
    the ultimate benefit of both projects. At present it appears that FRIP
    construction will not begin until all work that is critical to the
    start of high-speed service in late 1999 has been completed. For this
    reason, construction of a third track and other capacity enhancements
    will extend beyond the start of high-speed passenger service. It is
    doubtful that this work will interfere with Amtrak operations for three
    reasons: Amtrak, because it is responsible for both operating its
    trains and coordinating FRIP construction, will schedule work to avoid
    interferences; much of the FRIP track work will be adjacent to the
    Corridor mainline but not directly on it; and, because current plans
    anticipate a more gradual introduction of high-speed service than
    earlier plans, there will be greater flexibility in scheduling track
    construction.
          fiscal year 2000 funding level for rhode island rail project
        Question. The State of Rhode Island is requesting $15,000,000 in
    fiscal year 2000 for the freight improvement project (FRIP); the
    Administration's request is for $10,000,000. Please discuss the
    relative merits of funding this project at both requested levels. What
    could be the effect of funding the project at $5,000,000, the fiscal
    year 1999 enacted level?
        Answer. Fiscal year 2000 funding needs for FRIP will, to some
    extent, be determined by how quickly Amtrak completes the
    electrification and related high-speed service projects, and is able to
    reassign its resources to track 7 and third track construction. The $10
    million request in the President's budget would be consistent with the
    current schedule for completion of the FRIP. Rhode Island's request
    might permit acceleration of the schedule, but FRA has not had an
    opportunity to review the State's new plan. A drop in the appropriation
    to $5,000,000 may cause additional delays if it prevents the timely
    ordering of long lead materials.
                            amtrak's funding history
        Question. Please provide a funding history, by fiscal year, of
    Amtrak's federal appropriations and other federal funds from the
    Corporation's creation to present.
        Answer. The information of Amtrak's Federal appropriations
    including the Northeast Corridor Program follows:

     Amtrak Federal Appropriations Including the Northeast Corridor Program

            Fiscal year                                         (Millions of
                                                            Current Dollars)

    1971..........................................................      40.0
    1972..........................................................     170.0
    1973..........................................................       9.1
    1974..........................................................     140.0
    1975..........................................................     276.5
    1976..........................................................     659.1
    1977..........................................................     800.7
    1978..........................................................   1,116.0
    1979..........................................................   1,234.0
    1980..........................................................   1,223.4
    1981..........................................................   1,246.3
    1982..........................................................     905.0
    1983..........................................................     895.0
    1984..........................................................     816.4
    1985..........................................................     711.6
    1986..........................................................     602.7
    1987..........................................................     624.0
    1988..........................................................     607.5
    1989..........................................................     603.6
    1990..........................................................     629.1
    1991..........................................................     815.1
    1992..........................................................     856.0
    1993..........................................................     891.1
    1994..........................................................     908.7
    1995..........................................................     972.0
    1996..........................................................     750.0
    1997..........................................................     843.0
    1998..........................................................     594.0
    1999..........................................................     609.2
                        --------------------------------------------------------------
                        ____________________________________________________

          Total...................................................  20,549.1
                     amtrak's net operating losses by year
        Question. Please provide a table displaying Amtrak's net end-of-
    year operating losses, by year, from the Corporation's creation to
    present.
        Answer. Amtrak's net end-of-year operating losses by fiscal year
    are as follows:

                               Net Operating Loss

            Fiscal year                                         ($ Millions)
    1971 (Year end 12/31).........................................        92
    1972 (Year end 12/31).........................................       151
    1973 (Year end 12/31).........................................       159
    1974 (Year end 12/31).........................................       273
    1975 (Year end 12/31).........................................       353
    1976 (Year end 9/30)..........................................       343
    1977 (Year end 9/30)..........................................       537
    1978 (Year end 9/30)..........................................       582
    1979 (Year end 9/30)..........................................       620
    1980 (Year end 9/30)..........................................        27
    1981 (Year end 9/30)..........................................       179
    1980-1981 Adjustment..........................................    \1\ 41
    1982 (Year end 9/30)..........................................       795
    1983 (Year end 9/30)..........................................       805
    1984 (Year end 9/30)..........................................       763
    1985 (Year end 9/30)..........................................       774
    1986 (Year end 9/30)..........................................       702
    1987 (Year end 9/30)..........................................       699
    1988 (Year end 9/30)..........................................       650
    1989 (Year end 9/30)..........................................       665
    1990 (Year end 9/30)..........................................       703
    1991 (Year end 9/30)..........................................       722
    1992 (Year end 9/30)..........................................       712
    1993 (Year end 9/30)..........................................       731
    1994 (Year end 9/30).......................................... \2\ 1,077
    1995 (Year end 9/30)..........................................       808
    1996 (Year end 9/30)..........................................       764
    1997 (Year end 9/30)..........................................       762
    1998 (Year end 9/30)..........................................   \3\ 353

    \1\ This adjustment was due to a change in Amtrak's method of accounting
    for track structure depreciation which had the effect of increasing net
    losses for fiscal years 1983, 1982, and 1980-81 by $35 million, $24
    million, and $41 million, respectively.
    \2\ Includes $244 million of one-time expenses.
    \3\ Offset of $577 million of TRA receipts, including interest earned.
    ---------------------------------------------------------------------------
                         amtrak's net end of year debt
        Question. Please provide a table displaying Amtrak's net end-of-
    year debt load, by fiscal year, from the Corporation's creation to
    present.
        Answer. Amtrak's net end-of-year debt loads by fiscal year are as
    follows:

                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                      Not Federally-    Federally-
                               Fiscal year                              guaranteed      guaranteed      Total debt
                                                                           debt          debt \1\
    ----------------------------------------------------------------------------------------------------------------
    1971............................................................             0.7  ..............             0.7
    1972............................................................             7.1  ..............             7.1
    1973............................................................            30.9            78.6           109.5
    1974............................................................            76.6  ..............            76.6
    1975............................................................           107.1           377.8           484.9
    1976............................................................           132.5           608.9           741.4
    1977............................................................           169.7           624.8           794.5
    1978............................................................           146.5           761.6           908.1
    1979............................................................           113.3           859.3           972.6
    1980............................................................            92.3         1,175.8         1,268.1
    1981............................................................            78.9         1,703.2         1,782.1
    1982............................................................            68.7         2,155.1         2,223.8
    1983............................................................             6.5         2,531.9         2,538.4
    1984............................................................            13.2         3,010.6         3,023.8
    1985............................................................            22.2         3,175.4         3,197.6
    1986............................................................            23.8         3,248.4         3,272.2
    1987............................................................            22.7  ..............            22.7
    1988............................................................            35.9  ..............            35.9
    1989............................................................           126.5  ..............           126.5
    1990............................................................           183.8  ..............           183.8
    1991............................................................           288.0  ..............           288.0
    1992............................................................           418.8  ..............           418.8
    1993............................................................           492.3  ..............           492.3
    1994............................................................           770.3  ..............           770.3
    1995............................................................           837.0  ..............           837.0
    1996............................................................           987.0  ..............           987.0
    1997............................................................         1,336.4  ..............         1,336.4
    1998............................................................         1,637.9  ..............        1,637.9
    ----------------------------------------------------------------------------------------------------------------
    \1\ This debt was forgiven in fiscal year 1987.

                              loans made to amtrak
        Question. Please list the loans made to Amtrak in fiscal year 1998
    and thus far in fiscal year 1999 (through March 31). Please include
    information on the lending institution, amount of loan, repayment
    period, and interest rate.
        Answer. The list of loans made by Amtrak during that period is as
    follows:

                                                                      [Dollars in millions]
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                    Interest
                                                                                                                                            Term      rate
                     Lender/Lessor                                                  Description                                  Amount    (Years)    (Per
                                                                                                                                                      year)
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Fiscal year 1998:
        First Union National Bank..................  Capital Lease 1(17 P-42 Locomotives).....................................      44.2        17       5.9
        Riverfront Development Corporation.........  Capital Lease (Operations Center)........................................       6.8        20       7.0
        Wabash National Finance Corporation........  Capital Lease (20 mail vans).............................................       0.6         9       6.0
        Wabash National Finance Corporation........  Capital Lease (94 inter-bogies)..........................................       2.3         9       6.0
        Wabash National Finance Corporation........  Capital Lease (250 aluminum vans)........................................       5.9         9       6.0
        Wabash National Finance Corporation........  Capital Lease (16 coupler mates).........................................       0.5         9       6.0
        Wabash National Finance Corporation........  Capital Lease (8 RoadRailer vans)........................................       0.3         9       6.0
        State Street Bank and Trust Co. of           Capital Lease (50 Greenbriar cars).......................................       3.8        15       5.6
         Connecticut.
        State Street Bank and Trust Co. of           Capital Lease (200 Trenton boxcars)......................................      16.7        18       6.4
         Connecticut.
        State Street Bank and Trust Co. of           Capital Lease (50 Viewliner cars)........................................      96.5        20       5.6
         Connecticut.
        First Union National Bank..................  Capital Lease (8 GE dual mode locomotives)...............................      32.0        17       4.7
        First Union National Bank..................  Capital Lease (2 F-59 locomotives).......................................       4.4        20       5.6
        First Union National Bank..................  112 Superliner cars......................................................     250.3      17.5       6.7
        Export Development Corp. & MBK Rail Finance  High-speed trainsets financing...........................................     221.6        20   ( \1\ )
         Corporation (of Japan).
        Export Development Corp. & MBK Rail Finance  High-speed facilities financing..........................................      37.3        20  ........
         Corporation (of Japan).
    Fiscal Year 1999 (through March 31):
        Export Development Corp. & MBK Rail Finance  High-speed trainsets--additional draws...................................      25.8        20   ( \1\ )
         Corporation (of Japan).
        Export Development Corp. & MBK Rail Finance  High-speed trainsets--additional draws...................................      29.6        20   ( \1\ )
         Corporation (of Japan).
        First Union National Bank..................  Capital Lease (19 F-59 locomotives)......................................      42.8        20       5.6
        Wabash National Finance Corporation........  Capital Lease (4 inter-bogies)...........................................       0.1         9       6.0
        New York Air Brake Corporation.............  Capital Lease (5 simulators).............................................       1.0         5       4.3
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ LIBOR (6 mos) Plus 75 bp.

            revised capital definition--impact on qualified expenses
        Question. Is it accurate that, if Amtrak were to have the same
    qualified expenses as the definition applied to projects funded by the
    Federal Transit Administration, payment of interest and principal on
    obligations for acquisition, upgrading, and maintenance would not be an
    eligible expense?
        Answer. If Amtrak's capital grant were to have the same qualified
    expenses as the definition applied to projects funded by the Federal
    Transit Administration, the payment of the principal portion on
    obligations for the acquisition, upgrading and maintenance would
    continue to be an eligible expense. It is FRA's view that the FTA
    definition would supplement, but not replace, the generally accepted
    accounting principals' (GAAP) treatment of capital. GAAP views the
    principal portion of debt service for obligations associated with
    capital investment as a capital expense. It should also be noted that
    the discussion above applies only to Amtrak's capital grant and not to
    funds made available to Amtrak under Section 977 of the Taxpayer Relief
    Act of 1997, which are covered by their own statutory definition of
    qualified expenses.
                extension of fiscal year 1999 capital definition
        Question. The fiscal year 1999 appropriations legislation permits
    Amtrak to expend its appropriated funds on maintenance of existing
    equipment as well as for capital improvements, consistent with eligible
    uses of Taxpayer Relief Act funds. Absent similar report language in
    the fiscal year 2000 bill or the accompanying House, Senate, or
    conference reports, will Amtrak be legally authorized to extend that
    use of appropriated funds for maintenance of way and maintenance of
    facilities?
        Answer. The President's budget request for fiscal year 2000
    proposes that Amtrak be given the same flexibility in spending its
    capital grant as provided to transit grantees, including for
    maintenance of way and maintenance of facilities. It is the long
    standing position of the Administration that Amtrak can act in accord
    with such a proposal contained in the President's grant request absent
    a statement rejecting the proposal in the Appropriations Act or the
    accompanying House, Senate or conference reports.
                fra vs amtrak's fiscal year 2000 funding request
        Question. The Federal Railroad Administration has sent up a request
    for $570,976,000 for fiscal year 2000 and the Amtrak legislative
    request is for a total of $571,000,000. What accounts for the $24,000
    difference.
        Answer. In testimony before the House Transportation Appropriations
    Subcommittee, Amtrak's President indicated that the Corporation merely
    rounded the Administration request to the closest $100,000 and that
    Amtrak could live with $570,976,000.
            maximum amount funded under proposed capital definition
        Question. If the Federal Transit Administration's expanded capital
    definition were applied to Amtrak capital, what is the maximum amount
    of the $571,000,000 in the fiscal year 2000 request that could be used
    for: maintenance of equipment, maintenance of facilities, and
    maintenance of way? (Please break out your response by category.)
        Answer. Amtrak has indicated to FRA that the Corporation's total
    maintenance expense in fiscal year 2000 will total approximately $481
    million. Of this amount, $304 million would be for maintenance of
    equipment, and $177 million for maintenance of way. If the Federal
    Transit Administration's expanded capital definition were applied to
    Amtrak capital, any and all of these expenses could be funded from
    Amtrak's capital grant; however, Amtrak does not intend to fund all of
    these expenses from its capital grant. Amtrak's current strategic
    business plan projects that approximately $362 million of the capital
    grant would be used for maintenance expenses, which have been
    traditionally funded from sources other than Amtrak's capital grant.
                                     ______

                         FEDERAL TRANSIT ADMINISTRATION
                     Questions Submitted by Senator Shelby
                            administrative expenses
        Question. Please prepare an organizational chart for the Federal
    Transit Administration, showing the office structure and regional
    office locations, as well as the current number of FTE currently
    assigned to each office.
        Answer. The information follows:
        [GRAPHIC] [TIFF OMITTED] TSM.010

                            bill language provisions
        Question. In the fiscal year 1999 appropriations act, $800,000 is
    transferred from Oversight funds to the DOT Inspector General for costs
    associated with the audit and review of new fixed guideway systems. In
    the fiscal year 2000 budget request, FTA proposes to reimburse the
    Inspector General using funds from within the general administrative
    expenses account, for audits and investigations of all transit-related
    issues and systems. Why the proposed change in source of, and use of,
    these reimbursed funds? Why is the proposed amount increased from
    $800,000 to $1,700,000?
        Answer. The expectation is that OIG's activities will be expanded
    beyond transit mega-projects to general oversight of grantees,
    therefore increased funding is needed. The change in funding from
    Oversight to Administrative Expenses is intended to maximize the funds
    available for FTA oversight activities.
                           budget activity increases
        Question. Please justify the increases proposed in the following
    areas: communications, utilities and miscellaneous charges ($1,728,000
    to $2,154,000); other services ($3,948,000 to $6,909,000); and
    equipment ($635,000 to $986,000).
        Answer. Telecommunications have increased $623,000 from fiscal year
    1998 to fiscal year 1999 because of the implementation of our
    Transportation Electronic Award and Management (TEAM) System. We expect
    that these charges will increase $426,000 from fiscal year 1999 to
    fiscal year 2000 as more grantees come on-line and FTA moves to a
    ``paperless'' grant making process.

                                           TELECOMMUNICATIONS--OBJECT CLASS 23
                                                (In thousands of dollars)
    ----------------------------------------------------------------------------------------------------------------
                                                             Fiscal                  Fiscal                  Fiscal
                                                              year    Change--1998    year    Change--1999    year
                                                              1998       to 1999      1999       to 2000      2000
    ----------------------------------------------------------------------------------------------------------------
    Telecommunication:
        Local & Long Distance.............................       472         214         686          65         751
        Local & FTS.......................................       455         227         682          57         739
        TEAM--Network Infrastructure Upgrades.............  ........         100         100  ............       100
        Network Infrastructure Upgrades (TASC)............  ........          50          50         300         350
        Mail/Messenger-Postage............................        58          34          92           1          93
        Mail/Messenger-Postage--(TASC)....................        96          13         109           3         112
        Rental--Other Equipment...........................        24         -15           9  ............         9
                                                           ---------------------------------------------------------
          Total 2300......................................     1,105         623       1,728         426       2,154
    ----------------------------------------------------------------------------------------------------------------

        The $1,936 million increase from fiscal year 1998 to fiscal year
    1999 is due primarily to $1.1 million in Y2K compliance costs and $250
    thousand needed for the Contracting-Out Study required by Section 3032
    of TEA-21. Since some of the same activities are funded from both the
    25.2 line item Other Services and 25.3 line item Purchases of Goods and
    Services from Government Accounts, it is clearer to view the entire
    line item 25 as shown in the following table:

                                             OTHER SERVICES--OBJECT CLASS 25
                                                (In thousands of dollars)
    ----------------------------------------------------------------------------------------------------------------
                                                             Fiscal                  Fiscal                  Fiscal
                                                              year    Change--1998    year    Change--1999    year
                                                              1998       to 1999      1999       to 2000      2000
    ----------------------------------------------------------------------------------------------------------------
    Audit and Financial Reviews Services..................  ........  ............  ........       1,700       1,700
    Building management:
        Guard service, health services, repairs, etc......       513          69         582           6         588
        TASC management services (e.g. library)...........       556         -21         535           8         543
    Contracting Out Study.................................  ........         250         250        -250    ........
    DOT Drug and Alcohol Office...........................        52  ............        52           3          55
    Maintenance and Repair................................        80          30         110           5         115
    Financial Systems:
        Accounting System Conversion......................  ........  ............  ........         200         200
        Operations and Maintenance........................       508         -31         477         209         686
        Credit Checks.....................................        20         -10          10           1          11
    Grants Systems:
        GMIS/TEAM.........................................     1,149         795       1,944         771       2,715
        PDD63.............................................  ........  ............  ........         300         300
    Contractor Support (service, Help Desk, etc.).........     1,063         -13       1,050         715       1,765
    Human Resources Information System....................       315         -15         300           2         302
    LEXIS/NEXIS...........................................        30  ............        30           2          32
    Meeting support (e.g. State Programs, TEA-21, etc.)...        37          10          47  ............        47
    Security Investigations...............................        10  ............        10           2          12
    Training:
        Honors Attorney...................................        20  ............        20           2          22
        Civilian Training (gov)...........................       242          57         299         260         559
    Y2K Compliance:
        Financial systems.................................  ........         100         100         -80          20
        Grants systems....................................  ........       1,000       1,000        -900         100
                                                           ---------------------------------------------------------
          TOTAL...........................................     4,595       2,221       6,816       2,956       9,772
    ----------------------------------------------------------------------------------------------------------------

        Equipment costs increase significantly from fiscal year 1998 to
    fiscal year 1999 to fiscal year 2000. This is the result of new
    equipment purchases to meet the needs of Y2K and the implementation of
    TEAM.

                                               EQUIPMENT--OBJECT CLASS 31
                                                (In thousands of dollars)
    ----------------------------------------------------------------------------------------------------------------
                                                             Fiscal                  Fiscal                  Fiscal
                                                              year    Change--1998    year    Change--1999    year
                                                              1998       to 1999      1999       to 2000      2000
    ----------------------------------------------------------------------------------------------------------------
    Equipment:
        Information Technology Equipment \1\..............        35         365         400  ............       400
        Office............................................        20          80         100  ............       100
        Office Equipment..................................        15          20          35          51          86
        Electronic Commerce...............................  ........         100         100         300         400
                                                           ---------------------------------------------------------
          Total 3100......................................        70         565         635         351         986
    ----------------------------------------------------------------------------------------------------------------
    \1\ Includes Y2K and TEAM.

                                    staffing
        Question. The FTA has proposed increasing the FTE level from 485 to
    495 in fiscal year 2000. Please break out these staffing increases by
    title, grade, and projected starting dates, including where each
    position will be located.
        Answer. The information follows:

                               FEDERAL TRANSIT ADMINISTRATION FISCAL YEAR 2000 HIRING PLAN
    ----------------------------------------------------------------------------------------------------------------
                  OFFICE                                 TITLE                            GRADE            EOD DATE
    ----------------------------------------------------------------------------------------------------------------
    Office of Planning................  Community Planner......................  GS-9/11/12............      1/01/00
                                        Community Planner......................  GS-11/12..............      1/01/00
                                        Financial Specialist...................  GS-9/11/12............      7/01/00
    Region 1..........................  General Engineer.......................  GS-11/12/13...........      1/01/00
    Region 2..........................  General Engineer.......................  GS-11/12/13...........      1/01/00
    Region 3..........................  Community Planner......................  GS-9/11/12............      7/01/00
    Region 4..........................  General Engineer.......................  GS-11/12/13...........      1/01/00
                                        General Engineer.......................  GS-11/12/13...........      7/01/00
    Region 5..........................  Community Planner......................  GS-11/12..............      1/01/00
    Region 6..........................  Community Planner......................  GS-11/12..............      1/01/00
    Region 8..........................  Trans. Program Specialist..............  GS-11/12/13...........      7/01/00
    Region 9..........................  General Engineer.......................  GS-11/12/13...........      1/01/00
    Region 10.........................  Trans. Program Specialist..............  GS-11/12/13...........      7/01/00
    Office of Program Management......  Trans. Program Specialist..............  GS-12/13..............      1/01/00
                                        Trans. Program Specialist..............  GS-12/13..............      7/01/00
                                        General Engineer.......................  GS-11/12/13...........      4/01/00
                                        General Engineer.......................  GS-11/12/13...........      4/01/00
    Office of Budget and Policy.......  Program Analyst........................  GS-12/13..............      7/01/00
    Office of Research Demons. &        Trans. Program Specialist..............  GS-12/13..............      7/01/00
     Innovation.
                                        Trans. Program Specialist..............  GS-12/13..............      7/01/00
    TOTAL (20 Positions)..............  .......................................  ......................       10 FTE
    ----------------------------------------------------------------------------------------------------------------

        Question. Please provide a table similar to the one found on page
    1246 of the House fiscal year 1999 hearing record, part 4, detailing
    FTA's FTEs for fiscal years 1998, 1999 on-board, estimated end-of-year,
    and 2000 proposal.
        Answer. The information follows:

                                FEDERAL TRANSIT ADMINISTRATION FULL-TIME EQUIVALENT (FTE)
    ----------------------------------------------------------------------------------------------------------------
                                                                                   Fiscal year--
                                                              ------------------------------------------------------
                           Organization                           1997       1998                  1999       2000
                                                                 Actual     Actual    1999 On-  Projected   Proposed
                                                                  FTE        FTE     Board FTE     FTE        FTE
    ----------------------------------------------------------------------------------------------------------------
    Headquarters Offices:
        Administrator........................................          5          6          5          5          5
        Public Affairs.......................................         11         11         13         13         13
        Chief Counsel........................................         33         32         27         30         30
        Budget and Policy....................................         53         48         51         54         54
        Civil Rights.........................................         24         25         26         26         26
        Administration.......................................         67         69         65         65         65
        Research, Demons and Innovation......................         44         42         43         43         43
        Program Management...................................         56         57         56         59         61
        Planning.............................................         27         25         28         28         30
                                                              ------------------------------------------------------
          Subtotal HQ........................................        320        316        314        323        327
                                                              ======================================================
    Regional Offices:
        Reg 1, Cambridge, MA.................................         14         13         13         13         14
        Reg 2, New York, NY..................................         19         18         18         18         19
        Reg 3, Philadelphia, PA..............................         20         20         19         20         20
        Reg 4, Atlanta, GA...................................         19         21         21         21         22
        Reg 5, Chicago, IL...................................         21         22         24         24         25
        Reg 6, Fort Worth, TX................................         15         16         16         16         17
        Reg 7 Kansas City, MO................................         11          9         12         12         12
        Reg 8, Denver, CO....................................          7          7          8          8          8
        Reg 9, San Francisco, CA.............................         20         20         21         21         22
        Reg 10, Seattle, WA..................................         10          9          9          9          9
                                                              ------------------------------------------------------
          Subtotal Regions...................................        156        155        161        162        168
                                                              ======================================================
          Total FTA..........................................        476        471        475        485        495
    ----------------------------------------------------------------------------------------------------------------

        Question. How many FTE are fully funded in fiscal year 1999 and
    2000? How many are authorized?
        Answer. The FTA has 485 FTE authorized and fully funded in fiscal
    year 1999, and requests funding for 495 authorized FTE in fiscal year
    2000.
        Question. What positions are vacant at this time (indicate office,
    title, salary range of each vacancy). What are FTA's plans for filling
    these vacancies in fiscal year 1999?
        Answer. The information follows:

                               FEDERAL TRANSIT ADMINISTRATION FISCAL YEAR 1999 HIRING PLAN
    ----------------------------------------------------------------------------------------------------------------
                OFFICE                                  POSITIONS                        SALARY RANGE      EOD DATE
    ----------------------------------------------------------------------------------------------------------------
    Chief Counsel................  Attorney Advisor, GS-15...........................  $80,658-$104,851      5/10/99
                                   Paralegal Specialist, GS-11.......................     40,714-52,927      5/10/99
                                   Attorney Advisor, GS-14...........................     68,570-89,142      4/12/99
                                   Attorney Advisor, GS-14...........................     68,570-89,142      4/12/99
                                   Paralegal Specialist, GS-11.......................     40,714-52,927      5/10/99
                                   Attorney Advisor, GS-14...........................     68,570-89,142      4/26/99
    Budget & Policy..............  Clerk (OA), GS-4/5................................     19,849-28,868      4/12/99
                                   Budget Analyst, GS-12/13..........................     48,796-75,433      5/10/99
                                   Systems Accountant, GS-13/14......................     58,027-89,142      4/26/99
                                   Program Analyst, GS-12/13.........................     48,796-75,433      6/13/99
    Administration...............  Staff Advisor, GS-9/11/12.........................     33,650-52,927      5/10/99
                                   Procurement Analyst, GS-11/12/13..................     40,714-75,433      4/26/99
    Research & Innovation........  Transportation Systems Manager, GS-14/15..........    68,570-104,851      6/13/99
                                   Transportation Program. Mgr., GS-15...............    80,658-104,851      6/13/99
                                   Transportation Program Mgr., GS-13/14.............     58,027-89,142      4/26/99
    Program Management...........  Trans. Safety and Security Spec., GS-7/9/11.......     27,508-40,714      6/13/99
                                   General Engineer, GS-11/12/13.....................     40,714-75,433      4/12/99
                                   Trans. Program Specialist, GS-13/14...............     58,027-89,142      3/28/99
                                   Trans. Program. Specialist, GS-7/9/11.............     27,508-40,714      5/10/99
    Planning.....................  Supervisory Community Planner, GS-15..............    80,658-104,851      5/24/99
                                   Financial Specialist, GS-9/11/12..................     33,650-63,436      4/26/99
                                   Realty Specialist, GS-11/12/13....................     40,714-75,433      4/12/99
                                   Community Planner, GS-9/11/12.....................     33,650-63,436      4/26/99
    Region 2.....................  Supervisory Transportation Specialist, GS-14......     68,570-89,142      4/26/99
                                   Community Planner, GS-9/11/12.....................     33,650-63,436      4/26/99
                                   Community Planner, GS-9/11/12.....................     33,650-63,436      4/26/99
    Region 3.....................  Community Planner, GS-9/11/12.....................     33,650-63,436      4/26/99
    Region 6.....................  Community Planner, GS-12/13.......................     48,796-75,433      5/10/99
    Region 8.....................  Community Planner, GS-7 (Student).................     27,508-35,760      8/01/99
    Region 9.....................  Trans. Program. Specialist, GS-12/13..............     48,796-75,433      5/24/99
    Region 10....................  Community Planner, GS-11/12/13....................     40,714-75,433      5/10/99
                                                                                      ------------------------------
    TOTAL POSITIONS--31..........
    ----------------------------------------------------------------------------------------------------------------

        Question. What was FTA's request for its salaries and expenses
    account to OST (both in terms of budget authority and FTE)? What was
    OST's request for FTA's salaries and expenses account to OMB? What was
    OMB's passback and FTA's appeal?
        Answer. The following chart shows the FTA request and appeal
    figures for the Administrative Expenses account:

                                                   SALARY AND BENEFITS
                                                  [Dollars in millions]
    ----------------------------------------------------------------------------------------------------------------
                                                              FTA         OST         OMB                  OMB Final
                                                            Request     Request    Passback   FTA Appeal   Passback
    ----------------------------------------------------------------------------------------------------------------
    Budget..............................................         $42         $42         $40         $42         $41
    Authority FTE.......................................         505         505         490         505         495
    ----------------------------------------------------------------------------------------------------------------

                             information technology
        Question. What is the status of FTA's efforts to convert the
    current automated accounting system (DAFIS) to a new automated
    accounting system that better interfaces with FTA's other information
    systems?
        Answer. The total planned cost of all activities related to
    accounting system conversion is $300,000 to be phased in over a 2-year
    period, beginning in fiscal year 2000. This approach allows for the
    integration of communications software into the hardware environment,
    training of staff, implementation of the ORACLE Financials application
    platform, and travel.

    ----------------------------------------------------------------------------------------------------------------
    Phase         Target Completed                             Description/Milestone                         Amount
    ----------------------------------------------------------------------------------------------------------------
        1 Fiscal year 2000              Provides the acquisition of labor resources, hardware,            $200,000
                                         integration of software, and implementation in Budget and
                                         Financial Management Office.
        2 Fiscal year 2001 And beyond   Provides the acquisition of labor resources for feeder system      100,000
                                         integration with ORACLE platform.
    ----------------------------------------------------------------------------------------------------------------

        Question. On pages 31-34 of the budget justification, you describe
    the components of the requested $2,750,000 increase for information
    technology. Please present this list of activities in priority order,
    and justify why each project is necessary in fiscal year 2000.
        Answer. The information follows:

    ----------------------------------------------------------------------------------------------------------------
                    ACTIVITY                                         JUSTIFICATION                           AMOUNT
    ----------------------------------------------------------------------------------------------------------------
    TEAM Application Enhancements..........  To complete 250 of the 850 service requests needed for the     $750,000
                                              new system.
    Telecommunications.....................  To expand capacity to handle high volume of electronic          300,000
                                              processing.
    Presidential Directive Decision 63.....  To protect critical infrastructure cyber systems essential      300,000
                                              to FTA operations.
    Accounting System Conversion...........  FTA is required to transition to the new Departmental           200,000
                                              Accounting System.
    Contract Support for Financial Systems.  To maintain existing technology for financial management        200,000
                                              activity.
    Electronic Commerce....................  Required by the National Defense Act of 1998 and become Y2K     300,000
                                              compliant.
    Contract Support for Office Automation.  To maintain FTA's corporate database and other automated        700,000
                                              systems.
    ----------------------------------------------------------------------------------------------------------------

        Question. FTA's Oversight Tracking System will replace the
    Triennial Review Information System. What is the status of the
    Oversight Tracking System? Was it completed by the end of fiscal year
    1998, as planned? Is the new system operational?
        Answer. The Oversight Tracking System has replaced the Triennial
    Review Information System and became operational in the fall of 1998.
    The oversight software program has been installed in all ten regional
    offices and headquarters. All oversight program staff and consultant
    contractors have been trained. The 1999 oversight review data are being
    directly recorded in the oversight tracking system as reviews are
    performed.
        Question. Please provide a schedule and cost accounting for each
    major phase, both completed and planned, for the electronic grant
    making and management system. Please delineate the amount and source of
    funds necessary to complete this activity.
        Answer. On November 2, 1998, the FTA introduced the Transportation
    Electronic Award and Management (TEAM) system. This Y2K compliant
    system, which features the client server technology, replaces the EGM&M
    system with a 3rd generation of business practices and processing. All
    funding specified below is to be derived from the administrative
    expenses account.
        Costs in the out-years will be higher since additional licensing
    and training costs will be necessary as grantee users increase. These
    future costs increases will be accommodated within the guaranteed
    funding levels in TEA-21.

                            TEAM FUNDING REQUIREMENTS
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                                          Fiscal     Fiscal
                         Activity                       year 1999  year 2000
    ------------------------------------------------------------------------
    Transition/Implementation.........................      1,200  .........
    Operations/Maintenance............................  .........      1,500
    Application Enhancements..........................  .........        750
    Equipment.........................................  .........        200
    Telecommunications................................        100        100
                                                       ---------------------
          Total.......................................      1,300      2,550
    ------------------------------------------------------------------------

        Question. What burdens could FTA's move toward a ``paperless
    office'' and electronic grant filing place on smaller transit grantees,
    who may not have access to sophisticated computer technology? Has this
    issue been raised by any of FTA's customers?
        Answer. The FTA move towards an electronic grant process places a
    minimum burden on smaller transit grantees that may not have the
    technology to process grants electronically. The grantees are only
    required to have Y2K compliant hardware with dial-up capabilities in
    order to access FTA's electronic system. To minimize the burden on our
    grantees, the FTA has absorbed the major portion of the application
    processing cost. In fiscal year 1991, FTA implemented ``paperless''
    drawdown requests where grantees requested funds electronically and
    received their disbursements from FTA electronically as well. At that
    time, many grantees, especially the smaller operators, did not have the
    necessary office automation equipment for electronic funds transfers. A
    number of the grantees said later that the electronic disbursements
    gave them the justification they needed to convince their boards to
    approve purchase of office automation equipment. For those grantees
    that chose not to purchase office automation equipment, FTA entered the
    appropriate data into our ECHO system on behalf of the grantees. Over
    time, more and more grantees have purchased office automation
    equipment, so that only about a dozen grantees still use hardcopy forms
    to request their drawdowns. We expect that the paperless TEAM grant
    process will parallel our experience with the ECHO system where more
    and more grantees will purchase appropriate office automation equipment
    over time. We will of course continue to process hardcopy paper grants
    for those grantees that are unable to take advantage of the TEAM
    system, until they are able to do so. Office automation hardware and
    software continue to be eligible capital expenses under the Federal
    transit program, and with the increased guaranteed funding available
    under TEA-21, the burden of purchasing updated computer equipment
    should be less burdensome for our grantees. For those grantees that do
    convert to TEAM, we will provide a full range of technical support
    services.
                                  new programs
        Question. Please provide a general description of each of FTA's
    four major new programs: (1) Job Access and Reverse Commute Program,
    (2) transit system fleet replacement of alternative fueled buses, (3)
    the Joint Partnership Program, and (4) the International Mass
    Transportation Program. What is the statutory authorization and funding
    for each of these programs? What is the time frame for establishing the
    programs, developing regulatory guidelines, program implementation, and
    distributing grant funds for each program? What staff's support is
    associated with each program? Are new staff required; have these staff
    been brought onboard?
        Answer. (1) The statutory authority for the Job Access and Reverse
    Commute Program is Section 3037 of TEA-21. The program was announced in
    the Federal Register on November 6, 1998, and 266 applications were
    received. An additional headquarters staff person is requested in
    fiscal year 2000. Evaluation of applications is complete, and formal
    grant applications are expected during May 1999, with most awards by
    the end of fiscal year 1999. FTA Headquarters and regional staff have
    been intimately involved in both program development and implementation
    activities. All proposals were initially reviewed by the regional
    offices. Each regional office also has designated one individual as the
    official regional welfare-to-work contact. Finally, we anticipate that
    the regional offices will administer and monitor Job Access and Reverse
    Commute grants. FTA has not positioned specific regional office staff
    positions to administer the program.
        (2) The statutory authority for the Clean Fuels Formula Grant
    Program is 49 U.S.C. Section 5308, established by Section 3008 of TEA-
    21. The legislation established a capital formula grant program for
    purchase or lease of clean fuel buses or related facilities or
    equipment. In the fiscal year 1999 appropriations, the $50,000,000 of
    funds designated for this program in TEA-21 was transferred to the Bus
    and Bus Facility Grants portion of the appropriation for Section 5309
    Capital Investments Grants and Loans. All of the bus capital investment
    projects were earmarked. FTA staff drafted implementation guidelines
    for a Notice of Proposed Rulemaking for the Clean Fuels program, but
    the urgency for pursuing the Notice diminished when no funds were made
    available for the program in fiscal year 1999. FTA is considering
    whether or not to proceed with the Notice of Proposed Rulemaking or
    technical guidance in support of clean fuel bus projects that might be
    included in the fiscal year 2000 appropriations.
        (3) The statutory authority for the Joint Partnership Program (JPP)
    is Section 3015 of TEA-21, which establishes a new 49 U.S.C. Section
    5312(d), Joint Partnership Program for Deployment of Innovation. The
    JPP, following the model established by the Defense Advanced Research
    Project Agency's ``other transaction'' authority under 10 U.S.C.
    Sections 845 and 2731, was established and announced in the Federal
    Register on October 2, 1998. No separate funding was authorized. FTA
    funding for JPP projects will come from other eligible funding sources
    including specific annual appropriations. Thirty initial concept
    proposals were received. A two-step evaluation of those applications is
    underway, and formal assistance applications may be requested during
    the summer 1999, with some awards possible by the end of fiscal year
    1999. FTA Headquarters staff have been intimately involved in both
    program development and implementation activities. A new position has
    been established to coordinate the JPP, and recruitment to fill the
    position is underway. An additional staff position needed for the JPP
    is included in FTA's fiscal year 2000 request.
        (4) Section 3015 of TEA-21 creates a new Section 5312(e) in Title
    49, United States Code, which authorizes the Secretary of
    Transportation to inform the United States domestic mass transportation
    community about technological innovations available in the
    international marketplace and to undertake activities that may afford
    domestic businesses the opportunity to become globally competitive in
    the export of mass transportation products and services. FTA will issue
    a Federal Register notice in May 1999 describing the objectives of the
    program and implementation activities. No grant funds are to be
    distributed under the program. An International Program Manager was
    hired in March 1999, and FTA has requested one additional program staff
    for fiscal year 2000.
                            regulatory requirements
        Question. According to a white paper prepared by the Community
    Transportation Association of America, many statutes and regulations
    first drafted to protect the private sector from potential adverse
    impacts are now used to artificially protect the public sector, and
    inhibit the ability of public transportation services to be provided in
    a responsive, cost-effective, responsible fashion. Please discuss the
    assertion that the federal transit program is full of many outdated
    regulatory requirements.
        Answer. The Community Transportation Association of America's paper
    refers to several statutory provisions of the Federal Transit laws and
    other Federal laws and asserts that these protect the public sector and
    inhibit innovation. Specifically, they refer to the private sector
    protection provisions, the New Model bus testing requirements, the
    charter bus restrictions, the school bus restrictions, and the
    interstate motor carrier registration requirements. The goals of these
    provisions vary, however, none would appear to protect the public
    sector. In fact, the provisions on private sector protection, charter
    bus, and school bus services all are intended to protect private
    transportation providers from unfair competition from transit operators
    using equipment purchased with Federal assistance.
        The private sector provisions require localities to consider having
    transit services provided by private operators to the maximum extent
    feasible. FTA has made efforts to streamline its enforcement of this
    provision, and relies on the local planning process to make these
    decisions. The school and charter bus provisions prohibit FTA funding
    recipients from providing exclusive school bus services, and from
    competing with private charter bus operators where they are willing and
    able to provide the service. FTA has streamlined its rules governing
    these provisions as well. The New Model Bus Testing provisions require
    manufacturers to have any new model buses tested at a national facility
    on the basis of a set of uniform performance tests. This is a consumer-
    protection program, designed to provide the local transit agency with
    information on the quality of buses before they are purchased, and was
    instituted in response to complaints from the transit industry about
    the unreliability of buses being offered for purchase with Federal
    assistance. The motor carrier registration requirements are part of the
    Office of Motor Carrier Safety's program and apply to any provider of
    interstate transportation, public or private.
        FTA is always seeking to ensure that the Federal requirements it
    administers are addressed in a cost-effective manner. In addition, we
    are continually reviewing our statutory mandates, and can propose
    changes during reauthorization of our program.
                                   oversight
        Question. Does the budget request assume the fully authorized
    takedown amounts for oversight activities? Please detail the authorized
    takedown levels for both formula and capital investment grants for
    fiscal year 2000, and the amounts requested in the budget.
        Answer. Yes, the budget request assumes the fully authorized take-
    down amounts for oversight activities.
        Question. Are oversight tasks performed by FTA staff, or are they
    contracted out the private sector? What legal restrictions are placed
    on contracting out oversight activities?
        Answer. Oversight is performed by FTA with assistance from its
    contractors. 49 U.S.C. 5327 only allows Oversight funding to be used
    for making contracts. Oversight includes overseeing major capital
    projects and providing safety, procurement, management and financial
    compliance reviews, and audits.
        Question. Please provide the names of contractors, their geographic
    location, annual and total costs of contracts, and a short description
    of each contract, for each PMO contract let in fiscal year 1998 and
    thus far in 1999.
        Answer. There were 15 new PMO contract awards planned for fiscal
    years 1998 and 1999 and 14 awards have been completed. This list does
    not include non-PMO activities such as Financial Management Oversight
    and Procurement Review. All contracts have the same short description
    as follows: ``Provide Project Management Oversight (PMO) Services on
    FTA Capital Projects''. The total and annual cost of each contract is
    provided in the chart below:

    ------------------------------------------------------------------------
                                                   Annual Costs of Contracts
                                     Total Costs ---------------------------
    Contractor/Geographic Location  of Contracts   Fiscal year   Fiscal year
                                                      1998          1999
    ------------------------------------------------------------------------
    Centennial Engineering, Inc.,    $10,585,422      $670,248      $441,009
     Arvada, CO...................
    Frederic R. Harris,               12,394,675       753,245       500,000
     Washington, DC...............
    Carter & Burgess, Inc., Ft.       13,005,826       860,392     1,000,000
     Worth, TX....................
    DeLeuw, Cather & Co.,             11,836,275       368,598       677,084
     Washington, DC...............
    Stone & Webster Transportation     9,843,869     2,000,000  ............
     Services, Boston, MA.........
    Gannett Fleming, Inc., Camp       12,183,951  ............     1,000,000
     Hill, PA.....................
    Hill International, Newport       11,533,331  ............     2,107,344
     Beach, CA....................
    Day & Zimmerman                   10,810,846  ............     1,934,484
     Infrastructure, Inc.,
     Philadelphia, PA.............
    STV Incorporated, New York, NY    13,850,585  ............     1,500,000
    Daniel, Mann, Johnson And          9,474,885  ............     1,480,000
     Mendenhall, Baltimore, MD....
    Sverdrup Civil, Inc., Maryland    11,576,298  ............     1,000,000
     Heights, MO..................
    Urban Engineers, Inc.,            11,353,154       500,000       439,530
     Philadelphia, PA.............
    Delon Hampton, Washington, DC.    12,507,225  ............     1,000,000
    Fluor Daniel, Inc., Irvine, CA    10,391,273  ............     1,000,000
                                   -----------------------------------------
          Total Costs of 14 PMO      161,347,615     5,152,483    14,079,451
           Contracts..............
    ------------------------------------------------------------------------

        Question. Please provide a table similar to that found on page 1233
    of the House fiscal year 1999 hearing record, part 4, indicating
    oversight obligations by activity broken out for fiscal years 1996,
    1997, 1998, 1999 estimate, and 2000 planned.
        Answer. The information follows:

                                            OVERSIGHT OBLIGATIONS BY ACTIVITY
                                                (In thousands of dollars)
    ----------------------------------------------------------------------------------------------------------------
                                                                                   Fiscal year--
                                                              ------------------------------------------------------
                                                                  1996       1997       1998       1999       2000
                                                                 Actual     Actual     Actual    Enacted    Planned
    ----------------------------------------------------------------------------------------------------------------
    Project Management Oversight.............................     17,019      3,984     10,198     25,649     18,067
    Financial Management Oversight...........................      2,702      2,060      3,533      4,589      3,560
        Fare Collection Oversight............................        199  .........  .........  .........  .........
        Turnkey Demonstration................................        674  .........  .........  .........  .........
    Safety Oversight.........................................      2,371      2,825      3,000      2,837      4,010
    Drug & Alcohol Compliance................................      1,000      1,750      1,525      1,511      2,200
    SAMIS....................................................  .........         75    ( \1\ )    ( \1\ )    ( \1\ )
    DAMIS....................................................        561  .........  .........    ( \1\ )    ( \1\ )
    State Rail Safety Oversight..............................  .........        200        650        550        900
    Security Audits..........................................  .........        550        825        776        910
    Alternative Fuels........................................  .........        250  .........  .........  .........
    Procurement Oversight....................................      1,718      1,130      1,588      1,992      1,347
    Management Oversight.....................................      3,128     13,417      6,216      6,758      6,915
        Civil Rights Reviews.................................        586        586        477        962  .........
        DBE, EEO, and Title VI...............................  .........  .........        485        870        810
        ADA Civil Rights Reviews.............................  .........  .........  .........  .........        900
        National Transit Database............................      1,159      4,308    ( \1\ )    ( \1\ )    ( \1\ )
        Triennial and State Management Reviews...............  .........      4,010      3,959      3,726      3,490
        Electronic Grant Making..............................        996      2,000  .........  .........  .........
        Planning Compliance..................................  .........        467        995        900      1,345
        Rail Control Technology..............................  .........  .........  .........        300        270
        Management Oversight.................................        250  .........  .........  .........  .........
        Bus Technology.......................................  .........        500        300  .........        100
        Turnkey Oversight....................................        137      1,546    ( \2\ )    ( \2\ )    ( \2\ )
                                                              ------------------------------------------------------
          Total Oversight....................................     27,811     23,416     24,535     41,825     33,899
    ----------------------------------------------------------------------------------------------------------------
    \1\ Funded under National Research and Technology.
    \2\ Turnkey Oversight is funded under other oversight activities.

        Question. What financial management oversight (FMO) reviews were
    conducted in fiscal year 1998? What FMO reviews are underway or planned
    for fiscal year 1999? What FMO reviews are planned for fiscal year
    2000?
        Answer. The following FMO reviews were conducted in fiscal year
    1998:

    ------------------------------------------------------------------------
                      Grantee                          Type of Review
    ------------------------------------------------------------------------
    Bay Area Rapid Transit District (ext. to    On-going Financial Capacity
     the SFO Airport).                           Review.
    Birmingham, Alabama.......................  Follow-up System Review.
    Cape Ann Transportation Authority,          Full Scope System Review.
     Gloucester, MA.
    Des Moines, IA............................  Full Scope System Review.
    Los Angeles County Metropolitan Transp.     On-going Financial Capacity
     Authority.                                  Review.
    Massachusetts Bay Transportation Authority  Follow-up System Review.
     (MBTA).
    Milford Transit District (MTD), Fairfield,  Full Scope System Review.
     CT.
    National Transit Institute................  Full Scope System Review.
    Northwestern Indiana RPC (NIRPC) Portage,   Full Scope System Review.
     IN.
    Southeastern Pennsylvania Transportation    Follow-up System Review.
     Authority.
    State of California Department of           Full Scope System Review.
     Transportation.
    Wichita, KS...............................  Full Scope System Review
    ------------------------------------------------------------------------

        The following FMO reviews are underway or planned for fiscal year
    1999:

    ------------------------------------------------------------------------
                      Grantee                          Type of Review
    ------------------------------------------------------------------------
    Borough of Pottstown......................  Full Scope System Review.
    Brazos Valley Community Action Agency.....  Full Scope System Review.
    Cape Cod Regional Transit Authority.......  Full Scope System Review.
    City & County of Honolulu.................  Full Scope System Review.
    City of Washington........................  Full Scope System Review.
    Cooperative Alliance for Seacoast           Full Scope System Review.
     Transportation.
    Galveston--Island Transit.................  Full Scope System Review.
    Georgia DOT...............................  Full Scope System Review.
    Greater Cleveland Regional Transit          Full Scope System Review.
     Authority.
    Greenville Transit Authority..............  Full Scope System Review.
    Indianapolis Public Transportation          Follow-up System Review.
     Corporation.
    Lehigh & Northhampton Transportation        Full Scope System Review.
     Authority.
    Lincoln Transportation System.............  Full Scope System Review.
    Metro (Seattle)...........................  Full Scope System Review.
    Minnesota DOT.............................  Full Scope System Review.
    Port Authority of Allegheny County........  Full Scope System Review.
    Regional Transp. Comm. of Washoe County     Full Scope System Review.
     (Reno).
    Shreveport Transit Management, Inc........  Full Scope System Review.
    Triangle Transit Authority................  Full Scope System Review.
    U.S. Virgin Islands.......................  Full Scope System Review.
    VA Department of Rail & Public              Full Scope System Review.
     Transportation.
    Vermont Agency of Transportation..........  Full Scope System Review.
    Bay Area Rapid Transit District (ext. to    On-going Financial Capacity
     SFO Airport).                               Review.
    Bi-State Development Agency...............  Financial Capacity Review.
    Dallas Area Rapid Transit (DART)..........  Financial Capacity Review.
    Denver Regional Transportation District...  Financial Capacity Review.
    Los Angeles County Metropolitan Transp.     On-going Financial Capacity
     Authority.                                  Review.
    LYNX--Central Florida Regional              Financial Capacity Review.
     Transportation Corp.
    Maryland Mass Transit Administration......  Financial Capacity Review.
    Massachusetts Bay Transportation Authority  Financial Capacity Review.
    Memphis Area Transit Authority............  Financial Capacity Review.
    Metropolitan Atlanta Rapid Transit          Financial Capacity Review.
     Authority.
    MTA of Harris County--Houston Metro.......  Financial Capacity Review.
    New Jersey Transit........................  Financial Capacity Review.
    New York Metropolitan Transportation        Financial Capacity Review.
     Authority.
    North County Transit District.............  Financial Capacity Review.
    Puerto Rico Dept. of Transportation and     Financial Capacity Review.
     Public Works.
    Regional Transp. Comm. Of Clark County      Financial Capacity Review.
     (Las Vegas).
    Sacramento Regional Transit District......  Financial Capacity Review.
    San Diego Metropolitan Transit Development  Financial Capacity Review.
     Board.
    Santa Clara Valley Transportation           Financial Capacity Review.
     Authority (San Jose).
    Tri-County Commuter Rail Authority........  Financial Capacity Review.
    Utah Transit Authority....................  Financial Capacity Review.
    Washington Metropolitan Area Transit        Financial Capacity Review.
     Authority.
    ------------------------------------------------------------------------

        Planned FMO reviews for fiscal year 2000: At this point, FTA has
    not selected the planned FMO reviews for fiscal year 2000. FTA's annual
    Risk Assessment Process will assist us in identifying grantees to be
    reviewed. The Risk Assessment process will be completed in September
    1999.
        Question. Has the cost of performing FMO reviews increased with the
    FTA's closer scrutiny of a grantee's ability to manage its financial
    resources?
        Answer. Yes. The number of reviews has increased substantially and
    consequently the annual cost of performing reviews has increased.
    However, the cost per review has remained approximately the same. From
    fiscal year 1991 to fiscal year 1998 the annual obligations under the
    FMO program averaged $1.8 million. In fiscal year 1999 the obligations
    as of March 31, 1999 total $3.1 million. Under the FMO program FTA
    conducts primarily two types of reviews: financial management systems
    reviews and financial capacity reviews of grantees with existing or
    anticipated full funding grant agreements. An average one-time
    financial management system review cost ranges from $70,000 for a small
    grantee to $100,000 for a medium-to-large grantee. An average financial
    capacity review cost ranges from $80,000 for a small grantee to
    $120,000 for a medium-to-large grantee over approximately a two-year
    period. For a large complex grantee, such as the Los Angeles County
    Metropolitan Transportation Authority, the cost was $260,000 from
    February 1997 to March 1999.
        Question. If you were directed to provide the requested $1,700,000
    transfer of FTA funds to the OIG from PMO, what activities would you
    decrease in order to make the funds available?
        Answer. FTA would likely reduce the ongoing Oversight activities
    proportionately among the various FTA oversight programs.
        Question. In your justification of procurement oversight activities
    ($1,350,000), you state that, ``These funds will be used to conduct
    procurement system reviews to determine if grantees' procurement
    systems meet the requirements of the Common Rule and to advise FTA on
    the effectiveness of the grantees' procurement systems.'' What is ``the
    Common Rule?''
        Answer. The ``Common Rule'' is codified at 49 CFR Part 18 and is
    officially entitled ``Uniform Administrative Requirements for Grants
    and Cooperative Agreements to State and Local Governments.'' It is
    referred to as the ``Common Rule'' since it is intended to establish
    uniform, or common, administrative rules for all Federal grants and
    cooperative agreements with States and local and Indian tribal
    governments. It basically consists of four sections as follows:
      --General.--Provides definitions for such terms as cash
            contributions, equipment, outlays, third party in-kind
            contributions, and unliquidated obligations, etc.
      --Pre-award requirements.--Prescribes forms and instructions to be
            used when requesting grants.
      --Postaward requirements.--Addresses financial requirements for
            accounting for the use of Federal funds such as reporting,
            internal controls, budget controls, allowable costs, audits,
            and cash management. This section also establishes requirements
            concerning non-Federal match such as in-kind contributions,
            valuation of donated services, and program income. This section
            also addresses procurement requirements including the
            maintenance of a contract administration system, written code
            of standards, conflict of interest, prohibition on the use of
            local preference requirements, and acceptable methods of
            procurement.
      --After-the grant requirements.--Spells out requirements for
            closeouts such as reporting requirements, cost adjustments, and
            collection of amounts due to grantee.
        Where appropriate, each Federal agency may add other requirements
    that are unique to its grant programs. For example, FTA has added a
    requirement that prohibits the use of Federal transit assistance to
    support procurements that use exclusionary or discriminatory
    specifications.
        Question. What are the trigger factors in FTA's annual procurement
    system risk assessments? Are all FTA grantees' procurement systems
    assessed on an annual basis, or is there a rolling schedule?
        Answer. The Regional Offices on an annual basis conduct risk
    assessments on all grantees. The risk assessment includes a review of
    the grantees' grant administration, profile, property management,
    financial management, and procurement management. Based upon the risk
    assessment, the Regional Office then selects the grantee and the type
    of oversight review they recommend to be conducted. For the past three
    fiscal years, the Regional Offices have recommended approximately 16
    procurement system reviews per year.
        Question. Please provide under separate cover the FTA's most recent
    risk assessment of all section 5309 new start grant recipients.
        Answer. We will provide the overall risk rating for each Grantee
    undertaking a section 5309 New Starts project.
        Question. Are the procurement system reviews and the management
    reviews conducted concurrently in a coordinated manner? Are there
    separate dedicated staff for each type of review? Please describe the
    intra-office coordination between these two different oversight
    activities.
        Answer. We coordinate all oversight reviews through the Oversight
    Council and try not to schedule more than one type of review of an
    individual grantee in a given year. We do have separate headquarters
    dedicated staff which manage each type of review. In most cases, a
    Regional staff member attend the review with a contractor. We have
    contractors with specific expertise who conduct the actual reviews,
    prepare the reports and enter the data into the Oversight Tracking
    System (OTrak).
        Question. The PMO budget request includes $270,000 for rail control
    technology. The description of this oversight activity on page 45 of
    the justification discusses the technology aspects of this program, but
    the ``safety, procurement, management, and financial compliance''
    oversight aspects are not clear. Wouldn't this be more appropriately
    funded within Transit Planning and Research (which includes a
    $1,000,000 request for this program)? Did FTA consult with the DOT
    Inspector General to determine if existing statutory language permits
    the FTA to fund this activity from the PMO program?
        Answer. Oversight would take place after program implementation.
    FTA has worked closely with the Inspector General to resolve any
    disagreement over the permissible scope of activities funded from the
    PMO program in general. This new activity will be carried out in strict
    adherence to the Inspector General's guidance and related Congressional
    direction.
                     job access and reverse commute grants
        Question. Why has the Department proposed to delete fiscal year
    1999 appropriations language which, consistent with section 3037(l)(2)
    of TEA21, limits to $10,000,000 the amount of funds that may be set-
    aside for reverse commute grants?
        Answer. An identical provision was included in both TEA-21 and the
    Fiscal Year 1999 Appropriations Act, and thus the fiscal year 2000
    Budget request is consistent with current law. The deletion was
    suggested as a technical measure since the authorization language makes
    specific appropriation limitations unnecessary.
        Question. To what extent will DOT obligate all fiscal year 1999 Job
    Access and Reverse Commute program funds by the end of the fiscal year?
    For the funds that it will receive in fiscal year 2000, what are the
    Department's time frames for evaluating and awarding additional grants?
        Answer. We plan to obligate all but $4,000,000 by the end of the
    fiscal year. The remaining funds will be for the category of medium and
    small urbanized areas with populations ranging between 50,000 and
    200,000. In that funding category, we received proposals for
    approximately $17 million, and we expect to award approximately $11
    million of the $15 million available in fiscal year 1999.
        We plan to announce the fiscal year 2000 Access to Jobs/Reverse
    Commute program by July 1, 1999. The grant applications will be due
    October 1, 1999. Allowing five months for the review and evaluation of
    applications, we expect to announce the selected grantees by March 1,
    1999. With more time available to prepare applications and with
    increased applicant knowledge and experience with the new program, we
    expect that applications and demand for funding will expand
    significantly in fiscal year 2000.
        Question. Assuming that the $75,000,000 in Revenue Aligned Budget
    Authority (RABA) funds proposed in the administration's budget request
    will not be used for the Access to Jobs program, would the department
    support transferring other guaranteed funds that cannot be obligated to
    the Access to Jobs program?
        Answer. No. While the Access to Jobs program has high priority, we
    believe it is not appropriate to transfer other guaranteed funds to
    this program. The transfer of RABA funds was proposed in the spirit of
    TEA-21 to maintain the balance between highways and transit enacted in
    TEA-21. The programs proposed for additional funding were those for
    which it was felt additional resources were justified based on
    priorities and needs. If RABA funds are not transferred, then the
    Access to Jobs increase could be funded from non-guaranteed funds, as
    authorized by Section 5338(h) of Title 49, U.S.C.
        Question. When will the FTA publish in the Federal Register its
    selection of Job Access and Reverse Commute awards? Please provide a
    list of the fiscal year 1999 grantees, including state, city, grantee
    organization, amount of grant, and use of funds. Please provide a
    profile of the grantees--list each grant award by state, city or
    county, name of recipient, population of target area (urban/rural),
    amount of grant, activity to be supported by the grant, and the number
    of individuals to whom transportation services are to be provided.
        Answer. FTA plans to announce selected applicants during May 1999.
    FTA will publish a list of the grant recipients, the amount of the
    grant, and the activity to be funded at that time.
        Question. How many applications did DOT receive in the fiscal year
    1999 grant cycle? How much in requested funds is represented by these
    applications?
        Answer. DOT received 266 applications; some consolidated state-wide
    applications included a number of distinct funding proposals for
    discrete localities within the state. Funding requests totaled
    $108,500,000.
        Question. Please describe the criteria used in making these grants.
    To what extent was the Department's criteria able to allow for clear
    distinctions among the applications? To what extent did DOT use bonus
    points to break ties among applicants?
        Answer. The grant award criteria are drawn directly from the
    legislation. They include the following:
    Coordinated Human Services/Transportation Planning Process and Regional
            Job Access and Reverse Commute Transportation Plan (25 points)
        Each applicant will be evaluated based on the extent to which the
    applicant:
      --Demonstrates a collaborative planning process, including: (1)
            coordination with, and the financial commitment of, existing
            transportation service providers; (2) coordination with the
            state or local agencies that administer the state program
            funded under part A of title IV of the Social Security Act
            (TANF and WtW grant programs); (3) coordination with public
            housing agencies (including Indian tribes and their tribally
            designated housing entities as defined by the Secretary of HUD)
            if any, which intend to apply for Welfare to Work Housing
            Vouchers from the Department of Housing and Urban Development;
            (4) consultation with the community to be served; and (5)
            consultation with other area stakeholders.
      --Presents a Regional Job Access and Reverse Commute Transportation
            Plan addressing the transportation needs of welfare recipients
            and low-income individuals.
    Demonstrated need for additional transportation services (30 points)
        Each applicant will also be evaluated based on the extent to which
    the applicant demonstrates:
      --in the case of an applicant seeking assistance to finance a Job
            Access project, the relative need for additional services in
            the area to be served to transport welfare recipients and
            eligible low-income individuals to and from specified jobs,
            training and other employment support services; and
      --in the case of an applicant seeking assistance to finance a Reverse
            Commute project, the need for additional services to transport
            individuals to suburban employment opportunities.
    Extent to which proposed services will meet the need for services (35
            points)
        Each applicant will be evaluated based on the extent to which:
      --The proposed service will meet the need.
      --To which the applicant demonstrates the maximum use of existing
            transportation service providers and expands transit networks
            or hours of service, or both.
    Financial commitments in terms of match and long term sustainability
            (10 points)
        Each applicant will be evaluated based on the extent to which the
    applicant:
      --Identifies long-term financing strategies to support proposed
            services.
      --Identifies financial commitments by human service providers.
      --Identifies financial commitments by existing transportation
            providers.
    In addition to these criteria, applicants may earn up to 10 bonus
            points for proposals such as the following:
        Innovative approaches that are responsive to identified service
    needs.
        Use of employer-based strategies.
        Linkages to other employment-related support services.
        Other strategies that are effective in meeting program goals.
        Bonus points were considered in determining each application's
    final evaluation rating, but it was not necessary to use bonus points
    to break ties among applicants.
        Question. Please describe how the agency has responded to
    Congressional direction in the statement of managers accompanying the
    fiscal year 1999 transportation appropriations bill, which directs FTA
    to ``give high priority to applications that address the transportation
    access needs of counties that are not served or are under served by
    public transportation systems'' when making grants with the funds set
    aside for non-urban areas.
        Answer. DOT has responded to this direction by establishing two of
    the four basic criteria used in evaluating proposals to address service
    needs and service effectiveness. These evaluation criteria represent 65
    out of a possible 100 points awarded in scoring proposals. Areas
    without service and with a large proportion of their population
    qualifying as being low income or welfare recipients would receive a
    high rating under the needs criterion. Service that would effectively
    move to fill these transportation gaps would likewise receive a high
    rating under the service effectiveness criterion.
        Question. What types of transportation projects can grantees fund
    with what may be a low level of funding per applicant?
        Answer. Typically, applicants have proposed funding fixed-route
    service extensions to new job centers or extended hours of service.
    Additionally, ridesharing programs, guaranteed ride home, special late-
    night and weekend van and paratransit services have been proposed.
    Grant applications also include transportation information systems and
    brokerage projects to assist case workers and individuals in better
    utilizing existing services. These services have been proposed within
    the funding guidelines established for major urban, medium urban and
    rural and small urban areas.
        Question. Will FTA approve multi-year grants? How will it assure
    that multi-year funding does not overcommit the program?
        Answer. Applicants may seek multi-year grants. Multi-year Federal
    support may be necessary in order to create and help mature new
    transportation/human service partnerships and to allow time to
    establish the credibility of new services and develop long term funding
    arrangements among the partners.
        In general, it is anticipated that out-year expenses will be funded
    in subsequent fiscal years rather than awarded in fiscal year 1999. For
    projects that merit multi-year funding, a letter of intent may be
    issued to the applicant expressing FTA's intent to continue funding the
    project in future fiscal years. However, in order to receive additional
    years of funding, a project must submit a revised application that
    demonstrates its progress since the previous year and its future goals.
        Question. How have the regional offices responded to the challenges
    of implementing this new program? Were new staff brought on at the
    regional level to help implement this program? Did FTA staff visit and
    meet with each applicant?
        Answer. FTA regional staff members have been intimately involved in
    both program development and implementation activities. All proposals
    initially were reviewed by the regional offices. Each regional office
    also has designated one individual as the official regional welfare-to-
    work contact. Finally, we anticipate that the regional offices will
    administer and monitor Job Access and Reverse Commute grants. FTA
    regional offices are increasing staffing; however, specific regional
    staff to administer the program is not requested. While individual
    field visits were not undertaken in the application stage, the regional
    offices met and discussed proposals with several interested applicants.
    In particular, each regional office held a welfare-to-work conference
    in association with HHS, HUD and DOL that brought together state and
    local transportation, human service and employment officials to discuss
    the development of local job access transportation plans and programs.
        Question. According to DOT and DOL officials, DOT's Access to Jobs
    and DOL's Welfare to Work funds cannot be used to help individuals
    purchase cars. However, many entry level jobs require shift work in the
    evenings or on weekends, when public transit services are either
    unavailable or limited. What is the statutory or policy prohibition
    against use of Access to Jobs and Welfare to Work funds to help
    individuals purchase cars? Can Temporary Assistance for Needy Families
    block grant funds be used to help individuals purchase cars? What
    action would be required to overturn the prohibition against using the
    DOT and DOL funds for purchase of vehicles?
        Answer. The enabling Job Access statute applies all of the Section
    5307 requirements to the Job Access and Reverse Commute program. This
    means that, statutorily, Job Access funds only can be used for purposes
    that fall under the definition of mass transportation. We have
    traditionally defined mass transit services as those services available
    to the public on a regular and continuing basis and that are shared-
    ride in nature. Paratransit services that are contained within that
    definition include ridesharing and shared-ride taxi programs. However,
    private ownership programs do not fall within the definition of mass
    transportation. It would take specific statutory action to overcome
    this prohibition. Temporary Assistance for Needy Families (TANF) funds,
    on the other hand, can be used for this purpose.
        Question. In order to evaluate the success of the Access to Jobs
    program, has the Department established goals or benchmarks against
    which output data, such as the number of new/expanded transportation
    services, the number of jobs made accessible, or the number of people
    using new transportation services can be compared?
        Answer. Yes, initially DOT will measure the number of new
    employment sites reached as a result of Job Access and Reverse Commute
    grants. In major urbanized areas with populations of 200,000 or more,
    we expect to average 40 new job sites per grant; in areas between
    50,000-200,000 population, we expect to average 15 new sites per grant;
    in rural and small urban areas with population below 50,000, we expect
    to average 5 new job sites per grant. A site is characterized by a stop
    with employers within one-quarter mile.
        Question. In total, how many new transit riders (welfare
    recipients) will be provided services by the fiscal year 1999 Access to
    Jobs awards? What is the average cost per new transit rider of this
    program?
        Answer. Since welfare recipients and low-income persons are very
    likely transit users already, it is difficult to project how many will
    be new transit riders. However, since the services will be new or
    extended services providing new access to jobs and employment services,
    Job Access and Reverse Commute Program services most likely will
    represent new transit rides. These services will be thousands of trips
    and may range from ridesharing arrangements to fixed-route transit
    extensions.
        We will have better data to determine the average cost per new
    transit rider once grants are awarded and service begins to new
    employment sites. We do know that last year SEPTA made a number of
    service changes to provide access to jobs for city residents. One of
    these was on SEPTA's Route 68 that operates from South Philadelphia,
    Broad and Oregon Subway stop to the United Parcel Service (UPS) Air
    Hub. SEPTA added 13 new one way trips to and from the Broad and Oregon
    to UPS to meet the demand of new UPS employees. Based on SEPTA reported
    costs the added expense on the Route 68 service was $216,366 annually.
    The ridership to UPS was 834 trips per day generating $195,656 in
    fares. Therefore, the operating cost to SEPTA was $20,710 annually to
    transport 417 people to jobs at UPS. This is $49 per person a year.
        Question. What is the local match requirement for the Temporary
    Assistance for Needy Families program? Can Job Access and Reverse
    Commute program funds be used as a local match?
        Answer. There is no local match requirement for the TANF program.
    States must maintain their welfare spending at 80 percent of historic
    spending levels (or 75 percent if they meet the work participation
    rates). Job Access and Reverse Commute program funds, and any state
    funds expended to meet the local match requirement of the Job Access
    and Reverse Commute program, do not count toward the state's required
    spending levels. TANF funds can be used as the local match for the Job
    Access and Reverse Commute program.
                                 formula grants
        Question. Please provide a table displaying the state-by-state
    distribution of the formula program funds within each of the program
    categories for fiscal year 2000 (as shown on pages 126-127 of Senate
    Report 105-249).
        Answer. The information is provided in the chart below:

     FEDERAL TRANSIT ADMINISTRATION, FISCAL YEAR 2000 GUARANTEED LEVEL APPORTIONMENT FOR FORMULA PROGRAMS (BY STATE)
    ----------------------------------------------------------------------------------------------------------------
                                                                                      Section 5310
                                                    Section 5307     Section 5311     elderly and     Total formula
                        State                      urbanized area    nonurbanized     persons with       programs
                                                                         area         disabilities
    ----------------------------------------------------------------------------------------------------------------
    Alabama.....................................      $12,345,815       $4,601,674       $1,262,364      $18,209,853
    Alaska......................................    \1\ 7,159,272          686,209          191,850        8,037,331
    American Samoa..............................  ...............           97,806           52,632          150,438
    Arizona.....................................       31,278,488        2,014,492        1,112,036       34,405,016
    Arkansas....................................        4,808,246        3,678,847          879,566        9,366,659
    California..................................      440,827,753        8,978,871        6,874,937      456,681,561
    Colorado....................................       34,346,300        1,916,629          860,712       37,123,641
    Connecticut.................................       43,412,116        1,738,563          987,472       46,138,151
    Delaware....................................        5,819,571          433,730          293,751        6,547,052
    District of Columbia........................       24,133,985  ...............          291,511       24,425,496
    Florida.....................................      136,124,791        5,772,011        4,636,540      146,533,342
    Georgia.....................................       51,566,541        6,728,137        1,639,325       59,934,003
    Guam........................................  ...............          278,431          133,754          412,185
    Hawaii......................................       21,805,177          755,131          375,895       22,936,203
    Idaho.......................................        2,842,008        1,523,454          384,869        4,750,331
    Illinois....................................      192,661,811        6,172,689        2,994,303      201,828,803
    Indiana.....................................       30,583,459        5,962,678        1,567,146       38,113,283
    Iowa........................................        9,049,807        3,835,253          946,179       13,831,239
    Kansas......................................        7,299,329        3,050,822          791,908       11,142,059
    Kentucky....................................       15,834,432        5,036,242        1,209,462       22,080,136
    Louisiana...................................       25,230,847        4,165,337        1,213,401       30,609,585
    Maine.......................................        2,038,744        2,009,937          483,251        4,531,932
    Maryland....................................       69,328,328        2,509,310        1,219,178       73,056,816
    Massachusetts...............................      105,990,461        2,689,218        1,759,633      110,439,312
    Michigan....................................       56,390,876        7,282,862        2,560,666       66,234,404
    Minnesota...................................       27,793,106        4,190,867        1,236,483       33,220,456
    Mississippi.................................        4,327,424        4,089,742          854,282        9,271,448
    Missouri....................................       31,112,334        4,881,280        1,589,372       37,582,986
    Montana.....................................        2,150,550        1,234,118          352,436        3,737,104
    Nebraska....................................        7,609,130        1,862,127          555,935       10,027,192
    Nevada......................................       16,410,558          607,956          411,508       17,430,022
    New Hampshire...............................        3,013,098        1,609,709          388,305        5,011,112
    New Jersey..................................      161,401,967        2,301,543        2,114,182      165,817,692
    New Mexico..................................        6,403,038        1,809,361          487,951        8,700,350
    New York....................................      482,151,901        8,101,711        4,909,688      495,163,300
    North Carolina..............................       24,160,905        8,606,405        1,865,487       34,632,797
    North Dakota................................        2,096,375          912,685          298,799        3,307,859
    Northern Marianas...........................  ...............           90,638           52,404          143,042
    Ohio........................................       78,650,959        8,761,919        3,125,261       90,538,139
    Oklahoma....................................       10,130,348        3,745,630        1,042,604       14,918,582
    Oregon......................................       24,189,968        2,974,063          968,730       28,132,761
    Pennsylvania................................      133,583,533        9,774,012        3,748,659      147,106,204
    Puerto Rico.................................       43,036,204        2,920,782          918,554       46,875,540
    Rhode Island................................        8,476,199          374,157          429,237        9,279,593
    South Carolina..............................       10,419,785        4,307,549        1,007,521       15,734,855
    South Dakota................................        1,512,262        1,112,492          323,318        2,948,072
    Tennessee...................................       20,264,508        5,560,553        1,492,017       27,317,078
    Texas.......................................      147,603,791       11,739,874        3,871,834      163,215,499
    Utah........................................       18,747,454          843,330          454,162       20,044,946
    Vermont.....................................          760,019          994,664          265,866        2,020,549
    Virgin Islands..............................  ...............          212,891          136,116          349,007
    Virginia....................................       52,410,334        4,929,969        1,552,472       58,892,775
    Washington..................................       77,136,196        3,454,367        1,391,500       81,982,063
    West Virginia...............................        3,664,123        2,937,208          734,024        7,335,355
    Wisconsin...................................       32,707,189        5,075,151        1,420,820       39,203,160
    Wyoming.....................................        1,050,115          709,817          224,933        1,984,865
    Unallocated.................................  ...............  ...............  ...............  ...............
                                                 -------------------------------------------------------------------
          Subtotal..............................    2,763,851,530      192,644,903       72,946,801    3,029,443,234
                                                 -------------------------------------------------------------------
    Oversight...................................       13,888,701          968,065  ...............       14,856,766
                                                 -------------------------------------------------------------------
          Total.................................    2,777,740,231      193,612,968       72,946,801    3,044,300,000
                                                 ===================================================================
    Clean Fuels.................................  ...............  ...............  ...............       50,000,000
    Over-the-Road Bus Accessibility.............  ...............  ...............  ...............        3,700,000
                                                 -------------------------------------------------------------------
          Grand Total...........................  ...............  ...............  ...............    3,098,000,000
    ----------------------------------------------------------------------------------------------------------------
    \1\ Includes $4,849,950 for the Alaska Railroad.

                    set-asides within formula grants program
        Question. The budget includes two set-asides within the formula
    grants program: one for $25,000,000 for grants related to costs of the
    Olympic Games in Salt Lake City, and the other for $20,000,000 for the
    Long Island Railroad East Side Access project. Did FTA's request to the
    Office of Management and Budget include these set-asides? If so, why?
    If not, why not?
        Answer. While we were considering funding for both projects, our
    FTA formal Budget Submission to OMB in September 1998 did not include
    either item. The Long Island East Side Access is a New Start project
    that was being considered along with many other potential New Start
    projects for funding in fiscal year 2000. It was not until December
    1998 that we received sufficient information upon which to base our
    recommendations to Congress. At that time, we had a series of
    discussions with OMB where we reached agreement on the funding
    recommendations that we would make in our fiscal year 2000 Budget
    Submission to Congress. The overall rating for this project is not
    recommended at this time, due to the fact that a final capital plan has
    not yet been developed by the MTA. Therefore, we are not currently
    recommending the project for funding within the New Starts line item.
    We believe that it is appropriate to fund additional project
    development activities to better define the benefits and costs of the
    project as well as to complete the development of a capital plan. Thus,
    we have proposed that further funding for this project come from the
    Formula Grants program. With respect to our request for assistance to
    the Salt Lake 2002 Winter Olympics, our intent was to propose funding
    in the fiscal year 2000 budget, similar to that appropriated by
    Congress for the 1996 Atlanta Olympic Games. While we had oral
    discussions on the need for such assistance, it was not until after we
    had submitted our formal budget request to OMB that we settled on the
    appropriate level of funding to request.
        Question. To what extent is FTA setting a precedent by providing
    specific transit projects with funds provided from the formula grants
    program?
        Answer. We believe that we have been judicious in proposing two
    very special exceptions. In fiscal year 1995, Congress appropriated
    funding for the Atlanta 1996 Olympics by way of a takedown from Formula
    Grants, so we are consistent with this previous action. The Long Island
    East Side Access received an overall Project Rating of ``not
    recommended,'' in FTA's fiscal year 2000 Annual Report on New Starts
    Proposed Allocation of Funds, and therefore should not be funded in the
    New Starts category. However, we believe that the statutory project
    justification criteria may not fully reflect the benefits of this type
    of project and further work is justified. Formula Grants was the most
    appropriate place to request funding.
        Question. Assuming that the $212,270,000 in Revenue Aligned Budget
    Authority (RABA) funds proposed in the administration's budget request
    will not be used for transit formula grants, how should the Committee
    provide the requested additional $25,000,000 for the Salt Lake City
    Winter Olympics planning, operations, vehicles, and facility
    construction (otherwise bus and bus facilities and/or new starts
    projects) and the $20,000,000 for the Long Island Railroad East Side
    Access project (otherwise a new start project)?
        Answer. Funding the Salt Lake City 2002 Olympics at $25,000,000
    affords Salt Lake the same opportunity as Atlanta was given for their
    1996 Olympic Games. The Long Island East Side Access project is
    identified by the Administration and TEA-21 as a ``high priority''
    project for which $20,000,000 is requested. It was determined that
    these projects were best funded from the Formula Grants Program and
    off-set by revenue aligned budget authority (RABA) from the highway
    program. We would like to work with the Committee on alternative
    funding options should the RABA not be allocated as proposed in the
    President's budget.
        Question. The requested bill language waives provisions of TEA-21
    for purposes of making grants related to the Olympic Games. Which
    specific provisions of TEA21 must be waived to make grants as
    envisioned in the department's request?
        Answer. The waiver requested applied only to the Salt Lake City
    Downtown Connector. 49 U.S.C. 5309(e)(1)(B) and (C) and section
    5309(e)(6) and (7) must be waived for FTA to make a grant to support
    the Salt Lake City Downtown Connector Segment for the West-East LRT
    project. According to section 5309(e)(1)(B) and (C), the Secretary may
    approve a grant for a new start project when, among other things, he
    finds that the project is justified based on a comprehensive review of
    its mobility improvements, environmental benefits, cost effectiveness,
    and operating efficiencies and supported by an acceptable degree of
    local financial commitment, including evidence of stable and dependable
    financing sources to construct, maintain, and operate the system or
    extension. According to FTA's ``Annual Report on New Starts Proposed
    Allocations of Funds for Fiscal Year 2000'' this project was rated
    ``low-medium'' for mobility improvements, ``high'' for environmental
    benefits, ``medium'' for operating efficiency, and ``low-medium'' for
    cost-effectiveness, ``low'' for stability and reliability of capital
    financing plan and ``low'' for stability and reliability of operating
    financing plan.'' FTA rated this project as ``Not recommended'' for
    fiscal year 2000. Therefore, to fund this project, it must be exempt
    from 5309(e)(1)(B) and (C). Because FTA approved entry into preliminary
    engineering, the project does not need to be exempted from Section
    5309(e)(1)(A).
        Section 5309(e)(6) allows a project to advance from preliminary
    engineering to final design only if the Secretary finds that the
    project meets the requirements of Section 5309 and that it will
    continue to meet the requirements of this section. Section 5309(e)(7)
    prohibits the Secretary from entering into a FFGA unless the project
    has been approved for final design. Because this project does not yet
    meet the criteria of 5309(e)(1)(B) and (C), and because it has not been
    approved for final design, it must also be exempted from 5309(e)(6) and
    (7) to receive funding in fiscal year 2000.
        For a more detailed discussion of this project, please see FTA's
    ``Annual Report on New Starts Proposed Allocations of Funds for Fiscal
    Year 2000'' at A-303-A-307.
        Question. Please provide a detailed listing by activity/project and
    amount showing how the Department would likely allocate the $25,000,000
    set-aside from the formula program for the Olympic Games in Salt Lake
    City.
        Answer. As of this date, we are reviewing the proposed budget
    prepared by the Salt Lake Organizing Committee (SLOC) and are not yet
    prepared to provide a detailed listing of projects with corresponding
    amounts. The SLOC Budget identifies activities such as: spectator
    loading and unloading facilities; a loaned-bus program providing 1,400
    buses, along with drivers and mechanics on loan from U.S. transit
    systems; and, three service centers for storing, fueling, cleaning and
    maintaining the bus fleet during the games.
        The proposed budget also includes funding for the acquisition of
    land for park and ride lots at Olympic venues; a general category of
    transportation activities for the Paralympic Winter Games; and, funding
    for the development of an overall multi-modal plan addressing the
    transportation needs of athletes, spectators, media and officials while
    preserving basic regional mobility. The costs are for planning
    operating and maintaining mass transit services to accommodate the
    Olympic spectator crowds.
        Question. Please provide a list of all transportation projects and
    activities that are deemed to be ``core'' activities by the Olympic
    Committee, necessary for the efficient operation of the Olympic Games
    in Salt Lake City.
        Answer. A letter from the Salt Lake Organizing Committee to the
    Utah Transit Authority dated, December 22, 1998, summaries as agreement
    on ``Core Projects.'' These include:
      --SLOC transit capital projects, including venue load and unload,
            transit bus, bus maintenance facilities, Olympic park-and-ride
            lots, and projects to be defined for the Paralympic Games.
      --UTA transit capital projects, including completion of the North-
            South light rail line as presently scoped, purchase of transit
            buses, and expansion of park-and-ride lots located at stations
            along the North-South light rail line.
      --Park City purchase of transit buses.
      --Operating assistance for the SLOC Olympic bus fleet and additional
            assistance for UTA and Park City Transit operations associated
            with the Winter Games.
        Question. The Long Island Railroad East Side Access project was
    exempt from the criteria established in TEA21. Why, if at all, should
    this project be exempt from the investment criteria? Given this
    exemption, why did the FTA decide that it needed to rank the project,
    and what factors were used in determining the project's rating?
        Answer. FTA does not believe that the project should be exempt from
    the New Starts criteria. Congress established the criteria to provide
    an objective mechanism for measuring the costs and benefits of projects
    competing for New Starts funding. The New Starts criteria thus serves
    as an important assessment tool for both FTA and Congress to assist us
    in deciding which projects merit the annual appropriation of scarce
    Federal discretionary resources.
        TEA-21 Section 3030(c)(3) states that the Long Island Railroad East
    Side Access project [LIRR ESA] ``shall also be exempted from all
    requirements relating to criteria for grants and loans for fixed
    guideway systems under section 5309(e). However, 49 U.S.C. 5309(e)(7)
    directs FTA to ``enter into a full funding grant agreement [FFGA] based
    on the evaluations and ratings'' of a project. FTA bases these
    evaluations and ratings, in turn, on FTA's analysis of the project
    relative to the New Starts criteria. FTA interprets this provision to
    mean that for FTA to enter into an FFGA for a given project, FTA must
    first subject the project to an evaluation and rating of the project on
    the basis of the New Starts criteria. Therefore, exempt projects that
    choose to forego FTA's evaluation and rating may not be eligible for an
    FFGA.
        FTA has communicated to sponsors of exempt projects that they
    should consider waiving their exemption and submit to FTA its New
    Starts criteria for the purposes of being evaluated and rated in the
    annual New Starts Report to Congress. This would ensure that the
    project would be eligible to seek an FFGA.
        On November 12, 1998, the Metropolitan Transportation Authority
    (MTA) provided New Starts criteria information on the LIRR ESA to FTA
    for the fiscal year 2000 New Starts Report. MTA stated its
    understanding that this information would enable FTA to ``include
    project profiles for all potential New Starts projects and make
    recommendations for fiscal year 2000 Section 5309 New Starts funding in
    its report to Congress.''
        FTA used the same criteria that are applied to all proposed New
    Starts projects to evaluate and rate the LIRR ESA. These criteria are
    mobility improvements, environmental benefits, operating efficiencies,
    cost effectiveness, transit-supportive existing land use policies and
    future patterns, local financial commitment, and other relevant
    factors.
        Question. Should other projects with similar circumstances also be
    exempt from the investment criteria? What projects share similar
    considerations as the Long Island Railroad Eastside Access project?
        Answer. FTA does not believe that projects pursuing New Starts
    funding should be exempt from the New Starts criteria. The criteria
    provides both FTA and Congress with important data with which to
    evaluate the relative costs and benefits of proposed New Starts
    projects. The criteria also provide a level playing field for projects
    competing for Federal discretionary funding. It is unfair to those
    projects that must meet the requirements of Section 5309(e) to provide
    New Starts funds to projects that are not subject to these
    requirements. Under TEA-21, the Long Island Railroad Eastside Access
    project is the only one designated as a high priority. There are no
    projects with similar considerations or circumstances.
              major transit systems' service effectiveness trends
        Question. The ten major transit systems--New York MTA, Chicago RTA,
    Los Angeles LACMTA, Washington, D.C. WMATA, Boston MBTA, Philadelphia
    SEPTA, San Francisco Muni/BART, New Jersey Transit, Atlanta MARTA, and
    Baltimore MDMTA--showed an overall decline in transit productivity
    (which can be measured in boardings per service hour) of approximately
    10 percent from 1989 to 1993. Smaller systems across the country also
    experienced a decline in transit productivity over this same time
    frame, but the largest systems were much harder hit. (Source: Access.
    University of California Transportation Center, Fall 1998 Issue 13.
    ``Lost Riders'', Brian D. Taylor and Williams S. McCullough.)
        Please provide annual boardings per service hour in calendar years
    1995, 1996, 1997, and 1998 (if available) for each of the ten major
    transit systems listed above.
        Answer. The article in Access used 1989 National Transit Database
    (NTD) data on boardings (unlinked passenger trips) per revenue service
    hour to calculate a productivity baseline. For each of the ten
    agencies, all boardings/trips, for all modes--subway, commuter rail,
    motor bus, ADA demand response, streetcar--were lumped together, and
    then divided by total revenue service hours for all modes. This 1989
    baseline was compared to 1993 data, with the 1993 data showing a 10
    percent decline. Measuring productivity across transit modes may yield
    dubious results. For example, no adjustment was made for the
    significant increase in ADA paratransit service, which was required by
    statute beginning in 1992. In the industry, ADA paratransit service is
    considered good if each vehicle can complete three trips per hour.
        In the following table, the calculations in the article were
    updated with NTD data for 1995, 1996 and 1997. At this time, data for
    1998 are not available. Comparing the 1997 total for the ten agencies
    to the 1993 total, transit productivity has increased by almost 5
    percent. The 1997 total was only six percent below the 1989 baseline.

                      FEDERAL TRANSIT ADMINISTRATION TRENDS IN SERVICE EFFECTIVENESS: 1989 TO 1997
                                    (Measured in boardings per revenue service hour)
    ----------------------------------------------------------------------------------------------------------------
                                                                     In the article--
                          City/Transit System                      --------------------   1995      1996      1997
                                                                      1989      1993
    ----------------------------------------------------------------------------------------------------------------
    New York--NYCMTA..............................................      74.6      65.6      67.2      71.4      78.5
    Chicago--RTA-CTA..............................................      61.6      53.2      48.9      48.8      48.6
    Los Angeles--Metro............................................      60.0      56.6      53.2      54.2      57.1
    Washington, DC--WMATA.........................................      82.7      73.8      70.5      67.2      69.3
    Boston--MBTA..................................................      80.1      74.2      73.0      65.0      64.8
    Philadelphia--SEPTA...........................................      63.1      60.7      58.3      54.5      57.9
    San Francisco--Muni...........................................      76.8      77.3      76.0      74.0      74.7
    New Jersey--NJT...............................................      34.1      30.3      29.8      30.1      30.2
    Atlanta--MARTA................................................      55.6      51.4      50.3      48.9      53.4
    Baltimore--MDMTA..............................................      49.9      47.6      47.3      42.5      43.1
                                                                   -------------------------------------------------
          TOTAL...................................................      66.5      59.7      58.6      59.0      62.5
    ----------------------------------------------------------------------------------------------------------------

                         expanded definition of capital
        Question. Transit properties which receive Federal funds through
    FTA are now statutorily authorized to use an expanded definition of
    capital expenses allowing them to categorize activities such as
    preventive maintenance as a capital expense. What has FTA's experience
    been with this expanded definition?
        Answer. With respect to grants awarded under the expanded
    definition of capital projects, in fiscal year 1998 under the Urbanized
    Area Formula Program FTA awarded grants in the following amounts:

                              [Dollars in millions]
    ------------------------------------------------------------------------
                                                       Funds
                                                      Awarded     Number of
              Category of Capital Project           Fiscal Year    Grantees
                                                        1998
    ------------------------------------------------------------------------
    Preventive Maintenance (1)....................         $244          114
    Vehicle Overhauls (2).........................           49           55
    Operating assistance at 80/20 in areas with              38           67
     populations under 200,000 (3)................
    Transit Enhancements (4)......................           14           31
    ADA operating expenses at 80/20 (5)...........            1            5
    ------------------------------------------------------------------------

        The following further explains information related to the
    ``Category of Capital Projects'' column: (1) Preventive Maintenance as
    a capital project category was made available with the 1998 DOT
    Appropriations Act and subsequently was included in TEA21; (2) Vehicle
    overhaul as a capital project amounting to 20 percent of a guarantee's
    annual vehicle maintenance costs was made available with the 1996 DOT
    Appropriations Act; (3) Operating assistance with an 80 percent Federal
    match ratio was available to urbanized areas under 200,000 for fiscal
    year 1998 only; (4) Transit enhancements were defined as capital
    projects by TEA-21, enacted June 9, 1998; and (5) ADA operating
    expenses up to 10 percent of an urbanized area formula apportionment
    was defined as a capital project by TEA21.
                appropriations conferees' legislative directives
        Question. Please update the Committee on the joint efforts between
    the Secretary of Transportation and the Secretary of Health and Human
    Services to create state and regional planning guidelines that promote
    transportation coordination between public transit agencies and human
    service transportation providers, as directed in the Senate report. The
    joint planning guidelines task force was urged to work collaboratively
    with Madison, WI METRO and the Coalition for Paratransit Solutions--has
    this work begun?
        Answer. Work is under way toward drafting joint planning
    guidelines. At a July, 1998 stakeholders meeting, which included
    practitioners such as the Coalition for Paratransit Solutions, a
    conceptual outline was developed for the guidelines. Subsequent work
    has included the collection of coordination case studies, including
    Madison, WI METRO; several briefings given to the Coalition; and a
    presentation before the Coordinating Council on Access and Mobility by
    Madison, WI METRO. Two reports have been prepared, one presenting 15
    case studies and the other reviewing current practices and
    implementation strategies. Portions of the guidelines are being drafted
    and will be presented to the stakeholders group prior to their being
    issued.
        Question. The conferees stated their expectation that of the funds
    apportioned to Los Angeles, at least $25,000,000 was expected to be
    expended for the purchase of new clean fuel vehicles, to assist in
    complying with the bus consent decree. What amount of apportioned
    formula funds went to Los Angeles County Metropolitan Transportation
    Authority? What amount of these apportioned funds were expended on
    clean fuel bus purchases? What additional bus purchases were made with
    1999 formula funds? In total, what level of funding has LACMTA already
    spent on complying with the bus decree? What future funding has LACMTA
    committed toward complying with the bus consent decree?
        Answer. The Los Angeles County Metropolitan Transportation
    Authority (LACMTA) received $85.9 million in 5307 formula funds in
    fiscal year 1999. Of that amount, $56.3 million was used for clean fuel
    vehicles. This includes the $25 million expected by the Congress to be
    applied to the purchase of clean fuel vehicles. An additional $19.1
    million in CMAQ funds was also utilized for the purchase of clean fuel
    buses in fiscal year 1999.
        LACMTA has expended $106 million in operating and capital expenses
    in complying with the Bus Consent Decree. Accelerated Bus purchases
    specifically targeted to compliance with the Bus Consent Decree are
    expected to total approximately $100 million annually over the next two
    years.
        Question. Please update the Committee on the status of public
    transportation services at the Presidio, San Francisco, California.
    What arrangements have been agreed upon by the City and the municipal
    transportation authority to ensure that ample public transportation
    services are available to the Presidio, its visitors and workers, and
    the surrounding community?
        Answer. The needs of public transportation services at the Presidio
    in San Francisco, California have been made known to the Metropolitan
    Transportation Commission (MTC), the metropolitan planning organization
    and the designated recipient for FTA formula funds in the San Francisco
    Bay Area, and its nine-county membership through arrangements made by
    FTA/FHWA for the National Park Service to become involved in the
    region's transportation planning process. As a result of this effort,
    the National Park Service has gained membership in the Bay Area
    Partnership, a forum for transportation representatives of various
    jurisdictions in the region who make policy decisions on transportation
    related programs. Specific transportation services needs have been
    identified for the Presidio which the City is reviewing to determine
    whether service augmentation is appropriate.
                          clean fuels formula program
        Question. Please outline the guidelines for apportioning funds and
    the time frame for clean fuels formula program applications as
    specified in TEA21.
        Answer. Designated recipients are required to submit an application
    for these funds no later than January 1 of each fiscal year. FTA is
    required to apportion the funds no later than February 1 of each fiscal
    year. Funds are apportioned according to a formula based on the air
    quality rating for ozone and carbon monoxide, number of buses, and bus
    passenger miles. Two-thirds of the total would be apportioned to
    designated recipients in areas over one million population. One-third
    would be apportioned to designated recipients in areas under one
    million population.
        Question. Briefly summarize FTA's regulations for implementing this
    program, including the types of eligible projects.
        Answer. FTA has not yet issued regulations implementing the clean
    fuels formula program, as called for in TEA-21, because of the
    uncertainty surrounding funding for the program. If there is an
    indication from the Congress that this program will be funded in fiscal
    year 2000, we will proceed to publish a notice of proposed rulemaking
    in order to have implementation procedures in place by the beginning of
    fiscal year 2000.
        As per TEA-21, eligible projects would include the following:
    purchasing or leasing clean fuel buses, including buses that employ a
    lightweight composite primary structure; constructing or leasing clean
    fuel buses or electrical recharging facilities or related equipment;
    improving existing mass transportation facilities to accommodate clean
    fuel buses; repowering pre-1993 engines with clean fuel technology that
    meets the current urban bus emission standards; or retrofitting or
    rebuilding pre-1993 engines if before half life to rebuild; and, at the
    discretion of the Secretary, may include projects relating to clean
    fuel, biodiesel, hybrid electric, or zero emissions technology vehicles
    that exhibit equivalent or superior emissions reductions to existing
    clean fuel or hybrid electric technologies.
        Question. Of the bus and bus related projects identified in the
    appropriations act for fiscal year 1999, which specific projects would
    have been eligible for funding under the clean fuels formula program?
    (Please arrange this list by state, and note the amount provided for
    each project in the appropriations bill.)
        Answer. The clean fuels formula funds lost their identity when
    merged with the section 5309 bus program. It is not possible to
    determine which projects might have been funded under the clean fuels
    formula program except those for which an alternative fuel source was
    specifically mentioned. Further, since clean diesel fuel buses are also
    eligible under the clean fuels formula program, conceivably any
    projects for the purchase of clean diesel buses could also qualify.
    However, under the clean fuels formula program formula, only 35 percent
    of the clean fuel formula funds may be used for clean diesel buses.
    Therefore, under the clean fuels formula program, each clean diesel
    project may have received a lower funding level than that earmarked
    within the bus Capital Investment funds.
                    over-the-road bus accessibility program
        Question. Why does the department believe that this program
    requires additional funding in fiscal year 2000? Assuming that the
    $1,300,000 in Revenue Aligned Budget Authority (RABA) funds proposed in
    the administration's budget request will not be used to augment this
    program, what adjustments will FTA make to its budget proposal for the
    over-the-road bus accessibility program?
        Answer. The higher level of financial assistance for fiscal year
    2000, coupled with the proposed increase in federal share, would help
    to offset accessibility costs for more providers. In addition, it may
    also accelerate the purchase of lift-equipment for over-the-road buses,
    thus improving the time-frame in which the nation's over-the-road bus
    fleet could be made accessible. Although it is difficult to estimate
    how many additional grants could be made if supplemental funds were
    provided because we have not yet made any funded grants under the
    program, we can estimate the number of lifts that the two levels of
    funding could cover. The $1.3 million, would fund an additional 54
    lifts to new vehicles. This estimate, of course, assumes that all funds
    are used for the incremental cost of adding lifts to vehicles, rather
    than for training purposes.
        Question. Please define an over-the-road bus, and include in your
    answer examples of over-the-road bus operators. Differentiate between
    OTR buses in intercity fixed route service and other OTR bus service.
    Are any such providers private entities, rather than public agencies?
        Answer. Most providers of over-the-road bus services are private,
    for-profit entities and the funding under FTA's over-the-road bus
    accessibility program is available only to such private entities.
        An ``over-the-road bus'' is a bus characterized by an elevated
    passenger deck located over a baggage compartment. Intercity fixed
    route over-the-road bus service is regularly scheduled bus service for
    the general public, using over-the-road buses that have the capacity
    for transporting baggage carried by passengers. This service operates
    with limited stops over fixed routes connecting two or more urban areas
    not in close proximity or connecting one or more rural communities with
    an urban area not in close proximity. The service provides meaningful
    connections with scheduled intercity bus service to more distant
    points. Examples of intercity, fixed route over-the-road bus operators
    include well-known providers such as Greyhound and Trailways. The one
    characteristic that distinguishes intercity service from other types of
    services provided by over-the-road buses, is that it provides
    meaningful connections with scheduled intercity bus service to more
    distant points. Charter service is provided under a single contract at
    a fixed charge for exclusive service to a particular group, such as a
    company traveling together to a special event. Tour bus service is
    usually regularly scheduled, fixed-route service offering sightseeing
    excursions to the general public, such as those that stop regularly at
    hotels to pick up guests to show them local tourist attractions. Local
    commuter service provides regularly scheduled, fixed-route service for
    commuters, usually on a week-day basis. A local example of commuter bus
    service is provided by Eyre, which has regularly scheduled, fixed-route
    services designed to meet the needs of individuals commuting between
    Baltimore, Maryland and Washington, DC, with several scheduled stops
    between the two cities. Many over-the-road bus operators provide
    several types of service.
        Question. Please identify the criteria used in determining grant
    awards in this program.
        Answer. Program guidance and application procedures are provided in
    a Federal Register Notice dated February 8, 1999, ``Over-the-Road Bus
    Accessibility Program Grants.'' The grants will be awarded
    competitively based upon the criteria taken directly from Section 3038
    of TEA-21, listed below. No weight factors have been assigned to these
    criteria.
      --The identified need for over-the-road bus accessibility for persons
            with disabilities in the areas served by the applicant;
      --The extent to which the applicant demonstrates innovative
            strategies and financial commitment to providing access to
            over-the-road buses to persons with disabilities;
      --The extent to which the over-the-road bus operator acquires
            equipment required by DOT's over-the-road bus accessibility
            rule prior to the required timeframe in the rule;
      --The extent to which financing the costs of complying with DOT's
            rule presents a financial hardship for the applicant; and
      --The impact of accessibility requirements on the continuation of
            over-the-road bus service, with particular consideration of the
            impact of the requirements on service to rural areas and for
            low-income individuals.
        Question. Please provide a list of each award made in fiscal year
    1999, the recipient, the amount of the award and the purpose of the
    award.
        Answer. FTA accepted grant applications through April 16, 1999. We
    expect to notify all applicants who applied for funding in June of
    1999, and make grants by September 30, 1999. The number of grants that
    will be made under the program will depend on the number of
    applications we receive from eligible applicants able or willing to
    comply with the terms and conditions imposed on FTA grant recipients.
    Since this is the first year in which this new program has been
    implemented, it is difficult to anticipate the number of applications
    we will receive and grant awards that we will make.
        Question. Please describe in detail the rule implementing
    accessibility of OTR buses required by the Americans with Disabilities
    Act. Include any time frames required in the regulation. What
    involvement did the Access Board have in developing these regulations?
        Answer. Under the over-the-road bus accessibility rule, all new
    buses obtained by large (Class I carriers, i.e., those with gross
    annual operating revenues of $5.3 million or more), fixed-route
    carriers, starting in October 2000, must be accessible, with wheelchair
    lifts and tie-downs that allow passengers to ride in their own
    wheelchairs. The rule requires the fixed-route carriers' fleets to be
    completely accessible by 2012. The buses acquired by small (gross
    operating revenues of less than $5.3 million annually) fixed-route
    providers also are required to be lift-equipped, although they do not
    have a deadline for total fleet accessibility. Small providers also can
    provide equivalent service in lieu of obtaining accessible buses.
    Starting in 2001, charter and tour companies will have to provide
    service in an accessible bus on 48-hours' advance notice. Fixed-route
    companies must also provide advance-notice accessible service on an
    interim basis until their fleets are completely accessible. Small
    carriers who provide mostly charter or tour service and also provide a
    small amount of fixed-route service can meet all requirements through
    48-hour advance reservation service.
                         transit planning and research
        Question. The budget proposes to allocate an additional $4 million
    in RABA funds to the transit planning and research account. What
    specific activities will these funds support? In your answer provide
    amounts by activities.
        Answer. The $4 million made available from the revenue aligned
    budget authority (RABA) funds will be used to expand FTA's essential
    safety and transit operations databases consisting of the National
    Transit Database (NTD); the Safety Management Information System
    (SAMIS) and the Drug and Alcohol Testing Management Information System
    (DAMIS). These databases provide information necessary for FTA to
    apportion funding, analyze safety data, identify transit needs and
    conditions, and a host of other fundamental program and project needs.
    A table which provides amounts by activities follows:

    Research and Technology Databases

    Safety Management Information System (SAMIS)............        $350,000
    Drug and Alcohol Testing Management Information System
        (DAMIS).............................................         850,000
    National Transit Database (NTD).........................       2,800,000
                        --------------------------------------------------------
                        ____________________________________________________
          Total.............................................       4,000,000
                      metropolitan and statewide planning
        Question. Please provide a table displaying the formula
    apportionments to States and MPOs of the fiscal year 1999 and fiscal
    year 2000 Metropolitan and State Planning Funds.
        Answer. The table below provides the fiscal year 1999
    apportionments for the Metropolitan Planning Program and the State
    Planning Program. For fiscal year 2000, the following table provides
    both the authorized and the guaranteed funding levels for these two
    programs. For both programs, funding is shown by state recipient.

                             FEDERAL TRANSIT ADMINISTRATION METROPOLITAN AND STATE PLANNING
                                                  [Program Allocations]
    ----------------------------------------------------------------------------------------------------------------
                                                        State Planning and Research        Metropolitan Planning
                                                     ---------------------------------------------------------------
                                                               Fiscal year--                   Fiscal year--
                          STATE                      ---------------------------------------------------------------
                                                                           2000                            2000
                                                           1999         Guaranteed         1999         Guaranteed
                                                        Apportioned    Authorization    Apportioned    Authorization
    ----------------------------------------------------------------------------------------------------------------
    Alabama.........................................        $101,355        $113,516        $384,440        $434,724
    Alaska..........................................          46,286          51,840         175,605         198,528
    Arizona.........................................         146,306         163,861         699,026         790,634
    Arkansas........................................          46,286          51,840         175,605         198,528
    California......................................       1,402,810       1,571,121       7,482,037       8,461,743
    Colorado........................................         130,982         146,699         571,100         645,764
    Connecticut.....................................         135,272         151,503         512,969         580,201
    Delaware........................................          46,286          51,840         175,605         198,528
    District/Col....................................          46,286          51,840         236,694         267,652
    Florida.........................................         560,635         627,904       2,392,714       2,706,385
    Georgia.........................................         179,614         201,166         847,148         958,068
    Hawaii..........................................          46,286          51,840         175,605         198,528
    Idaho...........................................          46,286          51,840         175,605         198,528
    Illinois........................................         467,049         523,089       2,564,877       2,900,127
    Indiana.........................................         148,326         166,124         622,689         704,060
    Iowa............................................          51,926          58,157         196,974         222,718
    Kansas..........................................          56,110          62,842         227,672         257,469
    Kentucky........................................          70,336          78,775         272,747         308,398
    Louisiana.......................................         122,731         137,457         471,350         532,929
    Maine...........................................          46,286          51,840         175,605         198,528
    Maryland........................................         197,285         220,957       1,019,100       1,152,276
    Massachusetts...................................         260,573         291,839       1,242,933       1,405,418
    Michigan........................................         320,181         358,598       1,601,331       1,810,560
    Minnesota.......................................         130,603         146,274         650,198         735,187
    Mississippi.....................................          46,286          51,840         175,605         198,528
    Missouri........................................         153,287         171,680         718,958         812,845
    Montana.........................................          46,286          51,840         175,605         198,528
    Nebraska........................................          46,286          51,840         175,605         198,528
    Nevada..........................................          50,188          56,210         190,387         215,262
    New Hampshire...................................          46,286          51,840         175,605         198,528
    New Jersey......................................         365,189         409,007       2,175,970       2,460,509
    New Mexico......................................          46,286          51,840         175,605         198,528
    New York........................................         777,583         870,883       4,418,750       4,996,473
    North Carolina..................................         138,421         155,030         524,905         593,708
    North Dakota....................................          46,286          51,840         175,605         198,528
    Ohio............................................         366,700         410,699       1,512,725       1,710,401
    Oklahoma........................................          74,604          83,556         282,947         319,987
    Oregon..........................................          78,224          87,610         317,882         359,433
    Pennsylvania....................................         397,026         444,664       1,962,133       2,218,344
    Rhode Island....................................          46,286          51,840         175,605         198,528
    South Carolina..................................          78,592          88,022         298,025         337,092
    South Dakota....................................          46,286          51,840         175,605         198,528
    Tennessee.......................................         122,179         136,839         463,404         524,043
    Texas...........................................         626,441         701,606       2,982,127       3,372,443
    Utah............................................          72,688          81,409         275,638         311,767
    Vermont.........................................          46,286          51,840         175,605         198,528
    Virginia........................................         210,961         236,274         980,769       1,109,284
    Washington......................................         177,084         198,332         781,819         884,139
    West Virginia...................................          46,286          51,840         175,605         198,528
    Wisconsin.......................................         135,769         152,060         557,792         619,015
    Wyoming.........................................          46,286          51,840         175,605         198,528
    Puerto Rico.....................................         117,070         131,117         475,683         537,966
                                                     ---------------------------------------------------------------
          Total.....................................       9,257,248      10,368,000      43,901,198      49,632,000
    ----------------------------------------------------------------------------------------------------------------

                    national research and technology program
        Question. Please provide a list by activity and amount of the
    earmarks contained in TEA-21 that must be administered under the FTA's
    transit planning and research account in fiscal year 2000.
        Answer.

                            [In thousands of dollars]

                                                                 Fiscal year
            Activity                                             2000 amount

    Metropolitan Planning Funding.................................   49,632
    Statewide Planning and Research Funding.......................   10,368
    Transit Cooperative Research Program Funding..................    8,250
    National Transit Institute Funding............................    4,000
    Rural Transit Assistance Program Funding......................    5,250
    National Research and Technology: Funding.....................   29,500
        Palm Springs, CA Fuel Cell Buses.........................\1\ (1,000)
        MBTA Advanced Electric Transit Buses & Related
          Infrastructure.........................................\1\ (1,500)
        SEPTA Advanced Propulsion Control........................\1\ (3,000)
        Gloucester, MA Intermodal Technology Center..............\1\ (1,500)
        Washoe County, NV Transit Technology.....................\1\ (1,250)
        Project ACTION...........................................\1\ (3,000)

    \1\ These specific projects are earmarked in TEA-21.
    ---------------------------------------------------------------------------
                         safety and security activities
        Question. The FTA has requested a total of $5,450,000 for safety
    and security activities and products in fiscal year 2000. Please
    reproduce the funding breakout table on page 125 of the justification,
    noting the priority order of each of the 17 activities planned for
    fiscal year 2000. Are any of these projects earmarked in TEA-21?
        Answer. The information is provided in the chart below:

     FEDERAL TRANSIT ADMINISTRATION FISCAL YEAR 2000 SAFETY AND SECURITY KEY
                             ACTIVITIES AND PRODUCTS
                               (In Priority Order)
    ------------------------------------------------------------------------
                                                Fiscal Year
                Activity/Products              2000 Request   TEA-21 Earmark
    ------------------------------------------------------------------------
    Transit Safety Institute Safety &             $1,200,000              No
     Security Training......................
    Grade Crossing Safety: Signalization w/          400,000              No
     Train Pre-emption......................
    Safety Management Information System             350,000              No
     (SAMIS)................................
    Drug & Alcohol Management Information            850,000              No
     System (DAMIS).........................
    Bus Safety: Model Legislation for                500,000              No
     Voluntary State-Based Oversight........
    Research and Engineering Analysis.......          50,000              No
    Computer Breaching/Assessing                      50,000              No
     Vulnerabilities of Electronic Fare
     Payment Systems........................
    Chemical/Biological Agent Detection              450,000              No
     System.................................
    Clearinghouse/Bulletin Board/WebSite....         175,000              No
    Passenger Security......................         200,000              No
    Information Data Outreach: Newsletter,           200,000              No
     Workshops, Journals....................
    Safety and Security Technical Support...         200,000              No
    Development of Safety and Security               200,000              No
     Training Courses.......................
    Drug & Alcohol Testing Updated                   225,000              No
     Guidelines & Newsletter................
    Security Survey: Public Perception......         100,000              No
    Human Factors: Fatigue Symposium,                150,000              No
     Transit Operational....................
    Fire Materials Testing..................         150,000              No
                                             -------------------------------
          TOTAL FISCAL YEAR 2000 REQUEST....       5,450,000  ..............
    ------------------------------------------------------------------------

        Question. Please provide a list of all U.S. airports that are
    served by rapid transit lines currently, as well as those that are
    planned to connect to airports by 2010.
        Answer. U.S. airports in Atlanta, Baltimore, Boston, Chicago,
    Cleveland, Philadelphia, St. Louis, and Washington, D.C. are currently
    served by rail LRT transit lines.
        A list of all proposed rail projects which would provide access to
    airports which are currently in preliminary engineering and final
    design, as well as all such projects with a Full Funding Grant
    Agreement, follows. In addition, this list also identifies proposed
    non-Section 5309-funded rail-airport access projects and several major
    investment studies that are examining rail access to airports.
        planning studies and new starts with proposed transit access to
                                    airports
    Major Investment Studies (15)
        Aspen/Roaring Fork Valley, CO--Aspen to Glenwood Springs
        Austin, TX--Southeast Corridor
        Boston, MA--Airport Circulator
        Boston, MA--Urban Ring
        Charlotte, NC (South Corridor Transitway)
        Cleveland, OH--Berea Extension
        Denver, CO--East Corridor
        Denver, CO--Airport to Glenwood Springs Corridor
        Ft. Lauderdale, FL--Airport/Seaport Multi-Modal Connector Study
        Honolulu, HI--Primary Corridor
        Kansas City, MO--Northland Corridor
        Louisville, KY--South Central Corridor
        Orlando, FL--Airport Corridor
        Seattle, WA--SeaTac Airport People Mover
        Washington, DC/Northern Virginia--Dulles Corridor
    Projects in Preliminary Engineering and Final Design (11)
        Cincinnati, OH--Northeast Corridor
        Ft. Lauderdale, FL--Tri County Commuter Rail
        Las Vegas, NV (Resort Corridor)
        Miami, FL--East/West Corridor
        Minneapolis/St. Paul, MN--Hiawatha Ave. Corridor
        Orange County, CA--Irvine/Fullerton Transitway Corridor
        Phoenix, AZ--East/Central to Tempe Corridor
        Raleigh, NC--Regional Transit Plan
        Salt Lake City, UT--Airport to University (West-East)
        Seattle, WA--Sound Move Regional System
        Tampa, FL--Tampa/Hillsborough/Lakeland/Polk Mobility Study)
    Full Funding Grant Agreements (FFGA) (3)
        Pittsburgh, PA Phase I Airport Busway/HOV Facility (FFGA commitment
    completed)
        St. Louis--St. Clair County, IL LRT Extension
        San Francisco, CA--BART Extension to SFO
    Non-Federally Funded Proposed Projects (No Section 5309 New Starts
            Funds Proposed)
        New York City--JFK International Airport Light Rail System
        New York City--Proposed Rail Extension to LaGuardia Airport
        Portland, OR--Tri-Met Extension to Portland International Airport
        Question. The budget requests new funding for assessments of rail
    and other transit systems' susceptibility to terrorist attacks. Given
    the findings of the NTSB and the Inspector General on transit bus
    safety and state oversight activities, wouldn't it be wiser to spend
    these resources on improving existing safety deficiencies and improving
    everyday operations of transit bus and rail safety, rather than on rare
    and improbable terrorist attacks?
        Answer. Terrorism is a definite and continuing threat to public and
    employee safety in transit systems. This effort is in response to
    recommendations of the President's Commission on Critical
    Infrastructure Protection and Presidential Directives 62 and 63.
        FTA is undertaking a comprehensive nine-month review of the FTA's
    safety and security functions and roles. This effort will be conducted
    by representatives from the safety offices of other DOT modal agencies.
    It is anticipated that this review will result in specific
    recommendations which will define, direct and possibly expand FTA's
    safety and security functions.
        Question. Of the activities requested within the safety and
    security area, which are directly supported by or in response to NTSB
    recommendations?
        Answer. $500,000 is requested for the ``Bus Safety'' (line item
    #1.5.7 on page 125 of the budget submission. This request is responsive
    to NTSB's October 1998 recommendations that FTA, in cooperation with
    the transit industry: (1) develop and implement an oversight program to
    assess and ensure the safety of transit bus operations that receive
    Federal funding; and (2) develop a model comprehensive safety program
    to be provided to all transit agencies.
        In response to 1997 and 1998 NTSB recommendations, FTA has
    initiated an internal review of its safety data derived from the
    National Transit Database. Although that in-depth review has not
    produced any recommended changes for fiscal year 2000, FTA does plan to
    pursue NTSB's recommendation to collect and evaluate accident causal
    factor data in order to identify safety deficiencies at transit
    agencies. This activity would be conducted in cooperation with the
    transit industry; it would be an exploratory effort to better
    understand the industry's data collection capabilities, identify common
    causal factors, and determine how such data might be collected. Safety
    data efforts total $350,000 (line #1.5.5.2 on page 125).
        Following NTSB's recommendations concerning fatigue related
    accidents, the FTA co-sponsored with APTA a fatigue symposium. One
    product of that meeting was a recommendation by the participants that a
    second symposium be conducted in fiscal year 2000. FTA is requesting
    funding for the purpose. Funds requested total $150,000 (line #1.5.8 on
    page 125).
        The Transportation Safety Institute has developed a series of
    courses for transit industry personnel relating to fitness-for-duty
    which address fatigue issues. FTA will continue funding of that program
    with fiscal year 2000 funding totaling $1,200,000 (line #1.5.1 on page
    125).
                    equipment and infrastructure activities
        Question. The FTA has requested a total of $11,600,000 for
    equipment and infrastructure activities and products in fiscal year
    2000. Please reproduce the funding breakout table on page 138 of the
    justification, noting the priority order of each of the 14 activities
    planned for fiscal year 2000. Are any of these projects earmarked in
    TEA21?
        Answer. The information follows:

                                                                 Fiscal year
            Equipment and Infrastructure Key Activities and Prod2000 Request

    Projects (in priority)..................................      $4,600,000
        Turnkey Demonstration Program.......................         500,000
        Transit Construction Roundtable.....................          80,000
        Fuel Cell Bus: 200KW PEM Fuel Cell..................       1,500,000
        Advanced Bus Subsystems.............................       1,150,000
        Construction Technology Review......................         370,000
        Communication Based Train Control...................       1,000,000
                        ========================================================
                        ____________________________________________________
    Projects earmarked in TEA-21 (not in priority order)....       7,000,000
        Palm Springs, CA Fuel Cell Buses....................       1,000,000
        MBTA Advanced Electric Transit Buses & Related
          Infrastructure....................................       1,500,000
        SEPTA Advanced Propulsion Control...................       3,000,000
        Gloucester, MA Intermodal Technology Center.........       1,500,000
                        --------------------------------------------------------
                        ____________________________________________________
          Total Budget Authority Requested..................      11,600,000

        Question. Why is it necessary to provide funding to the FTA for
    advanced vehicle subsystems when this activity can be supported within
    the advanced vehicle transportation program?
        Answer. The Advanced Vehicle Program (AVP) is a Departmental
    Initiative with a diverse transportation focus. It includes medium- and
    heavy-duty trucks as well as buses. It also includes railroad,
    aviation, and maritime applications. This Program was never intended to
    be solely about transit, although we envision that there will be a
    number of transit related efforts. The program typically selects 30-40
    technology innovation or demonstration projects per year at a
    relatively low funding level per project. The program acts as an
    incubator for new and high risk technologies, carrying the development
    of those technologies to a point where FTA or other transportation
    modes are willing to invest and complete the development and deployment
    cycle.
        FTA requests funding for advanced vehicle systems specifically for
    transit applications because of the anticipated high benefits from
    these technologies. For example, preliminary results from FTA sponsored
    hybrid-electric transit bus development efforts have demonstrated a 30
    percent improvement in fuel efficiency and a 50 percent reduction in
    emissions. Electric and hybrid-electric technologies will also
    significantly lower greenhouse gas emissions. The FTA programs support
    a more extensive development of technologies through a cooperative
    process with transit manufacturers and operators. The FTA support will
    typically begin once the technology has reached the concept
    demonstration stage (where the AVP ends). AVP projects selected by the
    FTA for continued development will be supported through FTA's National
    Research and Technology programs or capital projects. This will be
    accomplished through a planned process that is being developed
    cooperatively with both transit manufacturers and operators.
        Question. What are the costs to complete the turnkey demonstration
    program? What activities are to be supported with the $500,000
    requested in fiscal year 2000?
        Answer. The FTA Turnkey Demonstration Program includes three active
    projects: New Jersey's Hudson-Bergen Light Rail Line, Bay Area Rapid
    Transit District's (BART) San Francisco International Airport
    Extension, and San Juan's Tren Urbano Project. These projects exceed
    one billion dollars in construction funds each and therefore require a
    significant amount of monitoring, data collection, reporting, and
    evaluation. A minimum level of effort for these tasks is estimated at
    one person-year during the projects' implementation schedule, plus a
    subsequent year for the evaluation of system operation in the cases of
    the San Juan and New Jersey projects.
        Fiscal year 2000 costs for contractor support are $450,000. In
    addition, the Turnkey Demonstration Program requires funds to conduct
    special studies on key issues of concern to FTA and a related industry
    workshop. One example of an outstanding issue is the level of
    engineering necessary before a turnkey contract is awarded. A special
    study and workshop require about one-third of a person-year or about
    $50,000 annually. The combination of technical program support and
    evaluation efforts represents annual activity of about $500,000 in
    fiscal year 2000.
        The three active turnkey demonstration projects are about halfway
    into their construction phases and are expected to conclude
    construction and initiate operations by 2001. The Turnkey Demonstration
    Program will continue with a subsequent year to finish the evaluation
    efforts. FTA will synthesize data collected on all five of the turnkey
    demonstration projects, document lessons learned, and prepare technical
    guidance as required by ISTEA.
        The planned technical support for fiscal year 2000 will include
    such activities as monitoring, data collection, reviewing and reporting
    on the progress of the projects' construction, financing, and
    management. In addition, each of the turnkey projects will be compared
    to projects delivered through conventional methods. For example, the
    BART SFO Extension will be compared to the East Bay extensions. The New
    Jersey Hudson-Bergen LRT may be compared to the Secaucus Connection.
    The Maryland Phase 2 LRT extensions will be compared to the Phase 1 LRT
    project. The San Juan Tren Urbano may be compared to a similar mainland
    project. Tasks will involve monitoring project progress, including the
    identification of issues, attending quarterly reviews and making other
    periodic site visits.
        Also, in fiscal year 2000, FTA intends to conduct an industry
    workshop on the level of engineering and design necessary before
    issuing a turnkey request for proposal.
        Question. What are the total project costs of the tunnel design and
    construction activity? Are other modal administrations participating in
    this activity given that such information would be helpful to the
    transportation community generally and not the transit community
    specifically?
        Answer. This is a new activity for which $370,000 is requested for
    fiscal year 2000. We have discussed this activity with the Federal
    Highway Administration (FHWA) and intend to coordinate with FHWA and
    other DOT modal administrations. Research efforts will be undertaken to
    identify and review tunneling innovations and, once the identification,
    evaluation, and research documentation activities are completed, FTA
    will consult with the transit design and construction industry to
    determine the applicability and deployment of innovative methods
    identified. The products of this research effort will be documented as
    ``best practices'' in tunneling techniques.
        Question. Has the $250,000 grant provided in the fiscal year 1999
    appropriations bill for the survey on rail rights-of-way vegetation
    control been released? What agencies applied for these funds? Are
    follow-on costs requested or foreseen?
        Answer. The grant for management of vegetation on rail rights-of-
    way was awarded April 14, 1999 to the Vermont Agency of Transportation.
    No follow-on costs are anticipated at this time.
                             fuel cell transit bus
        Question. Please detail the full funding memorandum of
    understanding that is being developed with Georgetown University to
    develop commercially viable fuel cell transit buses. Will the
    memorandum be finalized? What is the total federal funding assumed in
    the memorandum, and will it exceed the total funding provided for this
    project in TEA21? If so, for what activities? Has the university sought
    to include structures, buildings or other non-vehicle related aspects
    of the fuel cell transit bus project in the memorandum of
    understanding?
        Answer. The Federal Transit Administration (FTA) has structured the
    Memorandum of Agreement (MOA) with Georgetown University (GU) to define
    the total program, schedule, end products and funding requirements. It
    also includes the Intermodal Fuel Cell Bus Maintenance Facility so that
    the total Fuel Cell bus activities are defined in a single document.
    The Fuel Cell Transit Bus Program contains the following elements: A
    total of eight Fuel Cell transit buses (includes the two currently
    being developed); Fuel Cell power plants provided by two vendors;
    Potential of later buses being non-hybrid (no batteries, with a 200 kW
    Fuel Cell power plant); and Testing and training at GU and at various
    transit agencies.
        The MOA is in the final stages of being implemented. It will be
    completed in May 1999. The total identified funding is: Fuel Cell
    Transit Bus Program--$71.8 million: this includes the $37.0 million
    already provided through fiscal year 1999 (of which $10.5 million was
    provided by DOD).

                                                                       Funds
            Source of Funding                                     (millions)

    FTA Research & DARPA.............................................. $37.0
    TEA-21 section 5309 funding.......................................  14.5
    To be determined (shortfall)......................................  20.3
                                                                      ______
          Total, Fuel Cell Transit Bus................................  71.8

        Intermodal Transportation Fuel Cell Bus Maintenance Facility--$24.6
    million: This includes $10.0 million available under previous grants.

                                                                       Funds
            Source of Funding                                     (millions)

    FTA Research......................................................  $6.5
    FHWA Funds........................................................   3.5
    TEA-21 section 5309 funding.......................................  14.6
                                                                      ______
          Total, Fuel Cell Bus Maintenance Facility...................  24.6

        The TEA-21 funding, providing $4.85 million a year under section
    5309, is split evenly (50 percent-50 percent) between the Fuel Cell
    Transit Bus Program and the Intermodal Transportation Fuel Cell Bus
    Maintenance Facility, with all of the TEA-21 funding for the first
    three years being dedicated to the Fuel Cell Transit Bus Program.
        Currently, there is an identified shortfall of $20.3 million in the
    Fuel Cell Transit Bus Program that totals $71.8 million. This includes
    the $37.0 million already provided through fiscal year 1999 (of which
    $10.5 million was provided by DOD), and the $14.5 million in TEA-21
    section 5309 funds.
        The entire Fuel Cell Transit Bus Program described in the MOA is
    structured to design, develop, build and test a total of eight Fuel
    Cell transit buses. This includes six more buses than originally
    planned. The intent is to offer these buses to transit agencies
    participating in the program for operational experience and technical
    feedback. It is not feasible to commercialize a product with only one
    of each type of vehicle. The MOA defines a program that will develop
    eight Fuel Cell transit buses in order to bring the Fuel Cell Bus to
    the marketplace.
        There is a clear statement in the MOA that, ``No Federal funds will
    be applied towards any facility for student, faculty, or staff
    parking.'' The MOA does not include development of a national
    clearinghouse or repository on fuel cell bus technologies at the
    university. GU is tasked to engineer, design and construct an
    Intermodal Transportation Fuel Cell Bus Maintenance Facility, to
    include developing and administering a training curriculum to train
    transit operators in the operation and maintenance of Fuel Cell transit
    buses.
        Question. What is the cost to complete the Georgetown University
    fuel cell bus program?
        Answer. Georgetown estimates fiscal year 2000 and beyond cost to
    complete the Fuel Cell Transit Bus Program is $25.5 million.
        Question. Why is it necessary to provide $1,500,000 from the
    national transit planning and research account when TEA-21 provides
    $4,850,000 each year for the fuel cell bus program from the bus capital
    program?
        Answer. There are still a number of systems issues with the
    integration of the fuel cell propulsion system onto a transit bus
    platform that are appropriate to address under FTA's research and
    technology program. The current hybrid configuration of the two initial
    fuel cell buses offers valuable insight into other diesel hybrid-
    electric transit buses. There is a continuing interest in ensuring that
    data collection, evaluation, and engineering and technical support for
    this effort are maintained to maximize the benefits to the information
    developed. These are all appropriate under FTA's research and
    technology program.
        Question. What transit agencies have provided firm commitments in
    acquiring the Georgetown fuel cell buses?
        Answer. There is insufficient experience to date with Fuel Cell
    transit buses to convince any transit agency of the technology
    readiness, operational benefits, or vehicle performance needed for
    practical fleet implementation. Multiple vehicles are absolutely
    essential to meet this objective. There are several agencies that are
    interested in participating in the evaluation of these buses. Towards
    that end, the MOA establishes a Transit Review Committee (TRC)
    comprised of interested transit agencies to review the Fuel Cell
    Transit Bus Program. The objective of this review committee is to
    ensure that Fuel Cell buses, maintenance and training satisfy the
    operational requirements of the transit industry. Recommendations of
    this review committee will help guide the Fuel Cell Transit Bus
    Program.
                         phosphoric acid fuel cell bus
        Question. What is the status of the phosphorus acid fuel cell
    development, and when will the project be completed?
        Answer. The PAFC bus development is complete. The Fuel Cell was
    fabricated, tested and integrated into a 40-foot NovaBUS platform.
    Lockheed Martin Control Systems (LMCS) provided the power and
    propulsion system, which is the same design that is being used on
    several hybrid-electric buses in New York City. The following chart
    lists the total PAFC funding profile as provided last year through
    1998, additional funding provided in 1999 and the total Phosphoric Acid
    Fuel Cell dollars to date. The differences accommodated test support,
    evaluation, and engineering support. Total funding to date are $28.8
    million, as indicated in the following chart (amounts are in millions).

                                                PHOSPHORIC ACID FUEL CELL
                                                  (Dollars in millions)
    ----------------------------------------------------------------------------------------------------------------
                                                                                      Electric
                               Year                              Fuel       System      Drive     Program     Total
                                                                 Cell    Integration    Train   Management   Project
    ----------------------------------------------------------------------------------------------------------------
    1998 and Prior...........................................     $18.5        $5.9       $1.7       $2.0      $28.1
    1999.....................................................       0.6  ...........  ........        0.1        0.7
                                                              ------------------------------------------------------
          Totals.............................................      19.1         5.9        1.7        2.1       28.8
    ----------------------------------------------------------------------------------------------------------------

        Question. What is the total amount requested for the development of
    the phosphoric acid fuel cell bus in fiscal year 2000? What has been
    spent on this program to date (by fiscal year)? What are the out-year
    costs associated with this program?
        Answer. There will be no further development efforts for the PAFC
    transit bus. Fiscal year 2000 funding for the PAFC bus is expected to
    be less than $500,000, and will be used for testing, evaluation,
    continued support, and troubleshooting. The following chart lists the
    total PAFC funding profile as provided last year through 1998,
    additional funding provided in 1999 and the total Phosphoric Acid Fuel
    Cell dollars to date. The differences accommodated test support,
    evaluation, and engineering support. The total spent to date on
    development of the PAFC transit bus is $28.8 million, as indicated
    below (amounts are in thousands).

                             COSTS TO DATE FOR DEVELOPMENT OF PHOSPHORIC ACID FUEL CELL BUS
    ----------------------------------------------------------------------------------------------------------------
                                                                                      Electric
                               Year                              Fuel       System      Drive     Program     Total
                                                                 Cell    Integration    Train   Management   Project
    ----------------------------------------------------------------------------------------------------------------
    1994.....................................................    $3,510  ...........  ........       $525     $4,035
    1995.....................................................     6,200      $1,800   ........        475      8,475
    1996.....................................................     6,600       2,200   ........        300      9,100
    1997.....................................................     1,800       1,300     $1,700        350      5,150
    1998.....................................................       400         600   ........        350      1,350
    1999.....................................................       600  ...........  ........        100        700
                                                              ------------------------------------------------------
          Totals.............................................    19,110       5,900      1,700      2,100     28,810
    ----------------------------------------------------------------------------------------------------------------

                     proton-exchange membrane fuel cell bus
        Question. What is the status of the proton-exchange membrane fuel
    cell bus development and test and when will this project be completed?
        Answer. The 100 kW PEMFC power plant has been fabricated and
    tested. To our knowledge, this is the largest PEMFC in the world that
    can operate on liquid fuel. Georgetown University completed acceptance
    testing in January. At this time, the PEMFC power plant is awaiting
    integration into a bus platform. As reported last year, reduced funding
    postponed the planned PEMFC bus roll-out from December 1998 until
    September 1999. That date has been further delayed until December 1999.
    This was caused by the delayed fiscal year 1998 funding, which hampered
    contractual efforts to order and build the next bus chassis, develop
    the propulsion system, and integrate all of the subsystems into the
    vehicle.
        To enhance the successful operation of the PEMFC once it is
    integrated into the bus platform, dbb Fuel Cell Engines, Inc. will
    complete some additional testing during the intervening period followed
    by integrated bus testing at its Poway, California facility. Total
    costs of these activities are less than $150,000. The PEMFC development
    effort cost is about $7.5 million to date.
        Question. What is the total amount requested for the development of
    the proton-exchange membrane fuel cell bus in fiscal year 2000? What
    has been spent on this program to date (by fiscal year)? What are the
    out-year costs associated with this program?
        Answer. The projected out-year costs for the Fuel Cell Transit Bus
    program defined in the MOA have not been finalized. The fiscal year
    2000 requested amount is $9.7 million. This includes the $4.85 from
    5309 and $1.5 million from the National Research and Technology Program
    requested for fiscal year 2000 and $3.35 million from fiscal year 1999
    Section 5309 funding. The primary expenditures will be for additional
    buses destined for the participating transit agencies. The fiscal year
    2000 requested amounts are provided in the chart below:

    Fuel cell bus program

                             (Dollars in thousands)

                                                                 Fiscal year
            Task                                                        2000

    Program Management................................................$1,100
    PEMFC bus #3...................................................... 1,500
    PEMFC bus #4...................................................... 1,500
    PEMFC bus #5...................................................... 2,000
    PEMFC bus #6...................................................... 2,000
    Bus System........................................................   100
    Power & Propulsion................................................   500
    Additional Buses & Integration.................................... 1,000
                                                                      ______
          Annual Total................................................ 9,700
                     hybrid electric and electric vehicles
        Question. Generally, does FTA plan to transition its hybrid-
    electric and electric vehicle research program to the Advanced Vehicle
    Transportation Program? How will this affect program and staffing needs
    in the area? If the proposed Maglev/AVTP funding switch is not enacted,
    where does this leave the hybrid electric/electric vehicle program?
        Answer. FTA does not plan to transition its research and technology
    efforts for advanced propulsion systems, including hybrid-electric and
    electric propulsion systems, for transit buses to the Advanced Vehicle
    Program (AVP). Preliminary results from FTA sponsored hybrid-electric
    transit bus development efforts have demonstrated a 30 percent
    improvement in fuel efficiency and a 50 percent reduction in emissions.
    Electric and hybrid-electric technologies will also significantly lower
    greenhouse gas emissions. Lower maintenance costs are also expected
    with these technologies. Given the significant potential benefits, it
    is appropriate for FTA to commit funds to support these efforts
    directly.
        There should be minimal impact to program and staffing levels. FTA
    intends to play an active role since we believe that there are
    significant benefits to transit to the development and deployment of
    advanced vehicle technologies. We also believe that the technologies
    developed for transit applications have benefits to a much wider
    vehicle market than transit buses. Given FTA's prior role and its
    continuing interest in this area and the technical expertise and
    experience that have been developed within FTA, one of our key staff
    persons is serving as the Department's Program Officer for the AVP
    further ensuring that efforts will not be redundant, but complementary.
        Question. Please update the Committee on the zinc-air battery bus
    research program. Is no further Federal involvement in this program
    needed or desired?
        Answer. The zinc-air battery bus will be completing the first
    demonstration vehicle in early calendar year 2000 using fiscal year
    1998 funding. The development team has submitted a proposal for tasks
    under the fiscal year 1999 funding. This proposal has been evaluated,
    and award of the funding is pending the results of the original
    project. FTA expects the project to be completed under the fiscal year
    1999 funding. Additional funding in fiscal year 2000 will not be
    required.
        Question. Please update the Committee on the CALSTART programs. Is
    no further Federal involvement in this program needed or desired?
        Answer. FTA has supported CALSTART's efforts to develop and
    demonstrate electric and hybrid-electric vehicle technologies to
    improve transportation services and operations. CALSTART served as a
    catalyst for the development of a globally competitive U.S.-based
    advanced transportation technology industry by identifying, contacting,
    evaluating, and assisting a wide array of firms developing advanced
    technologies. CALSTART is a major participant in the Department's
    Advanced Vehicle Program (AVP) managed by the Research and Special
    Projects Administration. CALSTART projects with FTA are similar to
    those sponsored under the AVP. FTA will complete the current projects
    with CALSTART sponsored by FTA funding. However, all future funding for
    CALSTART should be included as a part of the Advanced Vehicle Program.
                        advanced technology transit bus
        Question. What is the status of the ATTB? Have any of the scheduled
    milestones slipped over the past year? Has testing of the ATTB
    prototypes been completed? What has this testing revealed?
        Answer. The Advanced Technology Transit Bus (ATTB) program with Los
    Angeles County Metropolitan Transportation Authority (LACMTA) to
    develop a lightweight, low floor, low emissions transit bus, and to
    provide the results to the transit industry, is nearing completion. The
    program has been successful in achieving almost all of its technical
    research and development objectives, and has facilitated the industry
    to pursue advanced vehicle technologies for transit. Northrop Grumman
    Corporation has produced six prototype vehicles, which have undergone
    demonstration and testing and have recently been delivered to LACMTA.
    Final reporting and evaluations on the ATTB development program are now
    being developed.
        As part of the original intent of the program, one ATTB prototype
    will be delivered to Metropolitan Transit Authority of Harris County,
    Texas, where three advanced subsystem technologies (an energy storage
    system, dynamic suspension system for improved ride quality, and
    improved wheel motors) will be integrated into the bus and undergo
    evaluation.
        Throughout the course of the project with LACMTA, several project
    milestones have slipped, which is normal for a project of this
    magnitude and complexity. However, the remaining milestones,
    specifically reporting, are expected to be completed on schedule.
        Testing of the six prototype vehicles, as called for in the program
    test schedule, has been completed and all prototypes are with the
    LACMTA.
        Prototype #2 completed testing at the Pennsylvania Transit
    Institute (PTI) bus testing facility in December 1998 and has been
    returned to LACMTA. Because of recurring reliability problems with the
    prototypes, the ATTB completed only 50-percent of the prescribed
    durability testing protocol at PTI, so the lifecycle cost analysis
    could not be fully completed. The testing revealed support for the
    basic design concepts and technologies incorporated into the ATTB, and
    documented the strengths and weaknesses in the bus design. Many of the
    systems and components that are causing the lack of reliability have
    been identified and are thought to be related to issues with the
    manufacture, installation, or integration of these systems and
    components, and not the underlying technologies themselves.
        Question. Are any funds programmed in fiscal year 1999 or requested
    in fiscal year 2000 for further development or testing and analysis of
    the ATTB?
        Answer. No funds are programmed or requested for further
    development or testing of the ATTB beyond current program obligations.
        Question. Have any transit authorities indicated whether they would
    intend to procure ATTBs for their fleets?
        Answer. A manufacturer has yet to be identified to pursue further
    development and production of the ATTB in the near term. However, some
    manufacturers are already pursuing the manufacture of ATTB-based
    technologies for the U.S. transit bus market, and there is an
    increasing demand by transit agencies for some of the advanced
    technologies developed and demonstrated as part of the program. LACMTA,
    however, is considering a reliability improvement program for some of
    the prototypes, which is outside the scope of the original project.
    LACMTA is also planning to develop a production model and eventually
    procure ATTB vehicles. LACMTA plans to seek funding for procurement of
    the production model from the Section 5309 Capital Investment program.
    FTA intends to follow these developments, and other ATTB technology
    commercialization efforts, closely.
                          fleet operations activities
        Question. The FTA has requested a total of $3,800,000 for fleet
    operations activities in fiscal year 2000. Please reproduce the funding
    breakout table on page 148 of the justification, noting the priority
    order of each of the 9 activities planned for fiscal year 2000. Are any
    of these projects earmarked in TEA-21?
        Answer. Only one project is earmarked in TEA-21.

                                                                 Fiscal year
            Fleet Operations Key Activities and Products        2000 Request

    Projects (in priority order)............................      $2,550,000
        BRT Data Collection & Analysis......................         500,000
        BRT Technology Transfer.............................         150,000
        BRT Project Administration..........................         600,000
        BRT Lessons Learned Workshop........................         250,000
        BRT Systems Integration Workshop....................         350,000
        BRT Professional Development Workshops--Design,
          Vehicle Systems, Services, System.................         200,000
        BRT Design & Operational Parameters, Impacts........         300,000
        Open Architecture for Vehicle systems...............         200,000
                        ========================================================
                        ____________________________________________________
    Projects earmarked in TEA-21 (not in priority order)....       1,250,000
        ITS Applications: Washoe County, NV Transit
          Technology........................................       1,250,000
                        --------------------------------------------------------
                        ____________________________________________________
          Total Budget Authority............................       3,800,000

        Question. The budget requests $200,000 for open architecture for
    vehicles systems in fiscal year 2000. What is the total cost of this
    activity, and what are the outyear considerations? Couldn't this
    activity be funded within the Intelligent Transportation Systems
    program?
        Answer. In light of the emphasis on system integration through open
    architecture standardization of all ITS technologies, the question
    remains as to how many systems in a transit vehicle should be included
    in this concept. The $200,000 requested will allow FTA to work with the
    transit vehicle manufacturers and operators to evaluate the possible
    systems and likely candidates for open architecture and architecture
    and standardization. FTA would expect that the Transit Standards
    Consortium, organized through APTA, would assume responsibility for
    further work beyond fiscal year 2000.
        This activity will be evaluating the integration and
    interoperability of transit vehicle components that are considered
    outside the normal ITS purview, such as vehicle management systems and
    propulsion system components.
                           bus rapid transit research
        Question. What is the total amount allocated to bus rapid transit
    activities in fiscal year 1999 and planned for fiscal year 2000? What
    are the out-year costs associated with this program?
        Answer. The total amount allocated to bus rapid transit technical
    assistance activities in fiscal year 1999 is $1.5 million. This
    includes the following:
      --$150,000--BRT Operational Analysis Support to provide technical
            assistance to BRT Consortium members and others in designing
            infrastructure and operations. A virtual reality simulation for
            BRT operation will be included.
      --$250,000--BRT Data Analysis and Project Evaluations to objectively
            determine the benefits, costs, impacts, and operational issues
            of BRT in a uniform manner.
      --$200,000--BRT Systems Integration Workshops, for BRT Consortium
            members to jointly address issues of common interest such as
            Intelligent Transportation Systems (traffic signal priority,
            smart cards, passenger information systems, passenger counters
            and in-vehicle monitoring systems, etc.), vehicle design and
            procurement. The task emphasizes system integration ability for
            various locations.
      --$500,000--BRT Project Administration, which supports local agency
            administrative expenses of about $50,000 per project for data
            collection, logistical support and progress reporting.
      --$150,000--BRT Technology Transfer, to communicate results to
            interested organizations through audio, video and written
            materials; scanning tours; and efforts with news media, such as
            Dateline and other networks.
      --$200,000--BRT Professional Development, involving preparation of
            training and technical assistance aids specifically for transit
            operators, transportation planners, engineers, architects,
            local land use planners and university students.
      --$100,000--BRT Lessons Learned Annual Workshop, including
            preparation of technical papers on contemporary planning,
            design, systems and implementation issues and by gathering
            successful implementers with potential adopters to explore
            preliminary findings.
        In fiscal year 2000, the total amount planned for bus rapid transit
    is $2.35 million. The categories of effort are the same as for fiscal
    year 1999, but with proportionately greater emphasis and funding for
    technology transfer, professional development and industry diffusion.
    FTA expects that in fiscal year 2000, more projects will be moving into
    actual design and operations, providing opportunities to heighten
    industry awareness and adoption of BRT. In addition, more information
    will be available for the project evaluations.
        Fiscal year 2000 funding categories and amounts are as follows:
      --$300,000--BRT Operational Analysis Support
      --$500,000--BRT Data Analysis and Evaluation
      --$350,000--BRT Systems Integration Workshops
      --$600,000--BRT Project Administration
      --$150,000--BRT Technology Transfer
      --$200,000--BRT Professional Development
      --$250,000--BRT Lessons Learned Workshops
        Question. What is the status of the competition to determine a
    potential demonstration of the bus rapid transit application in the
    states? What funding is associated with this competition?
        Answer. A Federal Register Notice was published on December 10,
    1998. It described the Bus Rapid Transit Demonstration Program, the
    need for improved bus transit service, and the goals of the Bus Rapid
    Transit Demonstration Program and also solicited Statements of
    Participation from those interested entities.
        Twenty-four proposals were received from transit agencies, local
    governments and combinations of the two. The selected project sponsors
    will compose the initial BRT Consortium.
        Proposals consisted of the following types: Curitiba-type exclusive
    rights-of-way systems, Priority treatments on local arterials, and
    Skip-stop service on local arterials.
        An evaluation by FTA staff of those received statements is now
    underway, and FTA expects to announce selected demonstration projects
    by May of this year. Those not selected as demonstration projects will
    however receive technical assistance through the technology transfer,
    professional development and lessons learned workshops.
        The fiscal year 1999 appropriation includes $1.5 million for the
    Bus Rapid Transit Demonstration initiative, and we have requested an
    additional $2.35 million in fiscal year 2000.
        Question. Please summarize the results of FTA's bus rapid transit
    research thus far. Have you developed preliminary scoping of the
    concept data, including cost per mile, land use parameters, efficiency
    measurements, and cost of operations?
        Answer. FTA has only recently begun the Bus Rapid Transit (BRT)
    Demonstration Program. It will require several years to implement the
    proposed projects, collect data on their operation and draw conclusions
    about the general effectiveness and efficiency of BRT. However, FTA has
    begun the process of defining the key issues surrounding BRT. These key
    issues include:
      --How successful is BRT in reducing bus travel time?
      --Which BRT elements (exclusive lanes or roadways, traffic signal
            preference, faster fare collection and boarding, etc.) are the
            most effective in reducing travel time?
      --How successful is BRT in attracting increased ridership from
            reduced travel time, improved visibility, supportive land use,
            etc.?
      --How expensive is BRT implementation and operation?
      --How successful is BRT in improving operating efficiency for transit
            agencies?
      --How easy (or difficult) is the implementation of BRT?
      --In what type of locations is BRT most successful?
      --What is the impact of BRT on land use and development?
        These issues and others will, together with specific project site
    characteristics, determine the required data collection and analysis
    that will lead to the drawing of general and specific conclusions about
    BRT. FTA will also organize a national BRT Consortium of the selected
    demonstration sites to work together on issues of mutual interest. The
    FTA will hold periodic workshops for Consortium members on specific
    topics such as the use of ITS capabilities, traffic signal preference,
    faster fare collection and boarding, vehicles, etc. It is likely that
    additional issues and insights will be raised during these workshops
    that will expand and amplify the preliminary key issues.
        FTA has had other ongoing related bus operations research
    activities in recent years:
      --The Bus Transit System: Its Underutilized Potential by Dr. Vukan
            Vuchic of the University of Pennsylvania. Dr. Vuchic identified
            ways to improve bus service--mostly by buses operating on
            exclusive lanes, busways or other exclusive rights-of-way.
      --The development of a Transit Capacity and Quality of Service Manual
            under the Transit Cooperative Research Program (TCRP) managed
            by the Transportation Research Board of the National Academy of
            Sciences. This manual will be of significant aid to transit
            planners, engineers and operators in planning and operating
            transit services. Chapters on transit capacity and the effect
            of transit vehicles on the capacity and speed of highway
            traffic were also produced for the Highway Capacity Manual
            2000.
      --Building on the body of previous work that has been developed on
            BRT, the TCRP has recently developed a problem statement
            soliciting a contractor to (1) identify how BRT could operate
            in the U.S.; (2) identify and articulate obstacles to BRT
            implementation in the U.S., such as political and
            institutional, land-use, vehicle selection, and traffic signal
            preemption; and (3) develop a suite of information/guidance
            packages, including a discussion of the role of traffic
            simulation, animation and visualization, to evaluate and
            communicate expected impacts of proposed BRT services tailored
            to meet the needs of various potential stakeholders interested
            in the implementation of BRT, including citizens, elected
            officials, the business community, and transit agencies.
                    specialized customer services activities
        Question. The FTA has requested a total of $4,050,000 for
    specialized customer service activities in fiscal year 2000. Please
    reproduce the funding breakout table on page 154 of the justification,
    noting the priority order of each of the 4 activities planned for
    fiscal year 2000. Are any of these projects earmarked in TEA-21?
        Answer. One project, Project ACTION, is earmarked in TEA-21 for $3
    million annually. The chart follows:

                                                                 Fiscal year
            Specialized Customer Services Key Activities and Pro2000 Request

    Projects (in priority order)............................      $1,050,000
        RTAP National Program...............................         750,000
        Job Access Support..................................         200,000
        Mobility Manager Assistance.........................         100,000
                        ========================================================
                        ____________________________________________________
    Projects earmarked in TEA-21 (not in priority order)....       3,000,000
        Project ACTION......................................       3,000,000
                        --------------------------------------------------------
                        ____________________________________________________
          Total Budget Authority............................       4,050,000

        Question. The budget requests $200,000 for job access support to
    conduct information sharing, coordination, technical assistance, and
    other related activities. Can't funds provided under the job access and
    reverse commute program be retained or set-aside for such
    administrative activities? What funds are set-aside from the job access
    and reverse commute program in fiscal years 1999 and 2000.
        Answer. TEA-21 restricts funding to the provision of new or
    expanded transportation services and the promotion of transit in non-
    traditional hours, employer strategies and transit pass programs. No
    funding is provided for technical assistance, information sharing or
    evaluation activities.
                information management and technology activities
        Question. The FTA has requested a total of $3,800,000 for
    information management and technology activities in fiscal year 2000.
    Please reproduce the funding breakout table on page 159 of the
    justification, noting the priority order of each of the 4 activities
    planned for fiscal year 2000. Are any of these projects earmarked in
    TEA21?
        Answer. None of the projects are earmarked in TEA-21.

                                                                 Fiscal year
            Information Management and Technology Key Activities and
              Products                                          2000 Request

    Projects (in priority order):
        National Transit Database...........................      $2,800,000
        International Program: Technical Assistance and
          Training..........................................         100,000
        Technology Sharing, FTA Website, Transit GIS........         500,000
        Small Business Innovation Research..................         400,000
                        --------------------------------------------------------
                        ____________________________________________________
          Total Budget Authority............................       3,800,000

        Question. Why is it necessary to connect the national transit
    database to the transportation electronic award and management system?
    How does this benefit grantees and the Federal Transit Administration?
        Answer. The National Transit Database contains statutory required
    financial and operational statistics. Operational data in the NTD is
    used to develop the allocations for the Formula Grant Programs. In
    addition, the NTD provides an important post-grant history of vehicle
    fleets, financial records and operating data. Our grantees and FTA
    Regional Offices use both systems extensively and believe linking the
    two would provide benefits to accessing data and oversight functions. A
    major component of the NTD is an inventory of transit fleets by
    operator. Vehicle data provides the resources to make fleet inventory
    and age for disposal and purchase decisions. Linking, for example, will
    help our grantees ensure that the Fleet Management requirements for FTA
    grants will be implemented. These Fleet Management requirements were
    put in place to respond to past IG oversight suggestions about spare
    buses at certain properties. These fleet requirements must be met prior
    to a bus purchase and are critical part of a TEAM grant application.
        Linking will also help our grantees use NTD performance measures
    and expenditure data in evaluating different grant program
    expenditures, such as expenditures on preventive maintenance, transit
    police and security, etc. The NTD provides the capability to make
    performance and expenditure comparisons of similar transit systems
    across the nation. These data are important to grantees, as well as for
    Metropolitan Planning Organizations that review projects in the local
    Transportation Improvement Program (TIP).
        Question. Why is $100,000 necessary for international programs when
    funding up to $1,000,000 is available without appropriation to conduct
    the same activities?
        Answer. Although Section 3015(e)(3) of TEA-21 allows the Department
    to receive revenues from any cooperating organization or persons for
    the FTA international mass transportation program, FTA has just begun
    structuring the first year's activities, including defining the program
    emphasis areas, developing a Federal Register notice and conducting
    outreach meetings with the transit industry.
        Thus, at this time FTA is spending the better part of fiscal year
    1999 developing the program elements for the international mass
    transportation program and has yet to solicit revenues from any other
    organizations or persons. The requested $100,000 is needed to conduct
    workshops, develop program outreach materials, sponsor or co-sponsor
    international program conferences, and conduct other related program
    support activities for this new initiative.
                metropolitan/rural policy development activities
        Question. The FTA has requested a total of $1,600,000 for
    metropolitan/rural policy development activities in fiscal year 2000.
    Please reproduce the funding breakout table on page 164 of the
    justification, noting the priority order of each of the 6 activities
    planned for fiscal year 2000. Are any of these projects earmarked in
    TEA-21?
        Answer. There are no Metropolitan/Rural Policy Development projects
    earmarked in TEA-21 for fiscal year 2000. The chart follows:

                                                                 Fiscal year
            Metropolitan/Rural Policy Development Key Activities and
              Products                                          2000 Request

    Projects (in priority order):
        Transit Performance, Condition and Needs............        $300,000
        Innovative Finance..................................         200,000
        Reauthorization Implementation......................         200,000
        Program Evaluations and Strategic Plan..............         200,000
        Benefits of Transit.................................         400,000
        Policy Analysis.....................................         300,000
                        --------------------------------------------------------
                        ____________________________________________________
          Total Budget Authority............................       1,600,000

        Question. Please update the Committee on the status of the grant
    for the City of Branson, Missouri congestion study. When was this
    funding released? Do you anticipate further costs associated with this
    study. Can general policy implications be drawn concerning small cities
    with large tourist populations, and their seasonal effects on the
    transit needs of the community?
        Answer. The City of Branson, Missouri (City) received a Section
    5314, $450,000 planning earmark in fiscal year 1999 to conduct a
    congestion study to analyze congestion problems within the City. The
    City is suffering from severe traffic congestion due to the influx of
    tourism. Currently, there is no public transportation system within the
    City. The study will also consider recommendations resulting from an
    FTA New Starts funded study currently underway. This study is
    considering various transportation options including commuter rail
    between the City of Branson and Springfield, Missouri.
        The grant application for the congestion study is expected to be
    submitted later this calendar year, therefore no funding has been
    released to date. FTA does not anticipate costs in excess of the
    earmarked funds for the congestion study.
        In regard to the question on policy implications on seasonal
    effects of tourists, Missouri Department of Transportation reports that
    the tourist population in Branson is now fairly constant throughout the
    year, not seasonal. It should be noted that findings of the congestion
    study when completed could have an impact or relevance in dealing with
    transit issues of other small cities with large tourist attractions.
                  planning and program development activities
        Question. The FTA has requested a total of $2,500,000 for planning
    and program development activities in fiscal year 2000. Please
    reproduce the funding breakout table on page 168 of the justification,
    noting the priority order of each of the 6 activities planned for
    fiscal year 2000. Are any of these projects earmarked in TEA21?
        Answer. There are no Planning and Project Development projects
    earmarked in TEA-21 for fiscal year 2000.

                                                                 Fiscal year
            Planning and Project Development Key Activities and 2000 Request

    Projects (in priority order):
        Transportation Planning and Programming.............        $750,000
        Major Investment Planning and Project Development...         650,000
        Outreach New Provisions/TEA-21......................         200,000
        Land Use and Environmental Planning.................         200,000
        Planning Methods....................................         600,000
        Financial Planning..................................         100,000
                        --------------------------------------------------------
                        ____________________________________________________
          Total Budget Authority............................       2,500,000

        Question. Please update the Committee on the status of each of the
    three community planning land analysis projects included in the fiscal
    year 1999 appropriations bill: (1) Skagit County, Washington North
    Sound connecting communities; (2) Desert air quality comprehensive
    analysis, Las Vegas, Nevada; and (3) Seattle, Washington livable city.
    Have these grants been released? Were any problems encountered? Are
    follow-on costs required or anticipated?
        Answer. The status of the three community planning land analysis
    projects follows:
        (1) Skagit County, Washington North Sound Connecting Communities:
    The County is in the process of making an application for the funds. We
    expect to receive the application soon at our Region X Office in
    Seattle.
        (2) Desert Air Quality Comprehensive Analysis, Las Vegas, Nevada:
    FTA received an application dated April 1, 1999 and expects to award a
    cooperative agreement in the near future.
        (3) Seattle, Washington Livable City: Seattle has not yet submitted
    an application. Our Regional Office expects to receive an application
    soon.
                 rural transportation assistance program (rtap)
        Question. Why does the RTAP require both formula TEA21 funding
    ($5,250,000) in fiscal year 2000 and specialized customer services
    discretionary funding ($750,000 in fiscal year 2000)?
        Answer. FTA allocates the formula funding entirely to the states to
    support training and technical assistance for rural transit providers,
    according to an administrative formula based on nonurbanized population
    and a minimum allocation to each state. The discretionary funding
    supports a national RTAP project administered through a cooperative
    agreement with the American Public Works Association. National RTAP
    products include the Transit Resource Center operated by the Community
    Transportation Association of America, training modules tailored to the
    needs of rural transit, technical assistance briefs, and other products
    which support the state RTAP.
        FTA's fiscal year 2000 budget request reflects the funding
    experience in recent years. From the time RTAP originated in fiscal
    year 1987 through fiscal year 1992, FTA allocated 85 percent of the
    appropriation to the states and the remainder to the national project.
    In fiscal year 1993, when Congress reduced the annual appropriation
    from $5 million to $4.25 million, FTA allocated the entire amount the
    states and began funding the national RTAP separately. The amount
    available for the national program then fluctuated annually until
    Congress established an earmark of $750,000 for the national RTAP in
    fiscal year 1998.
                      transit cooperative research program
        Question. Is the amount of transit cooperative research program
    funding set in a TEA21 formula? Please provide the cite and the funding
    schedule over the authorized period.
        Answer. No, it is a fixed amount rather than a formula. Section
    3029(a) of TEA21 authorizes not less than $8,250,000 annually for the
    Transit Cooperative Research Program (TCRP) for each year of the TEA-21
    authorization, fiscal year 1998 through fiscal year 2003. In January
    1999, pursuant to authorization in TEA-21, FTA executed a Memorandum of
    Agreement with the National Academy of Sciences and the American Public
    Transit Association for the conduct of the TCRP. This MOA reflects
    FTA's continued interest in focusing the responsiveness of the
    sponsored research on the department's strategic plans and on the
    tactical and practical requirements of the nation's transit industry.
                           national transit institute
        Question. Is the amount of National Transit Institute funding set
    in a TEA21 formula? Please provide the cite and the funding schedule
    over the authorized period.
        Answer. No, it is a fixed amount rather than a formula. Section
    3029(a) of TEA21 authorizes not less than $4,000,000 annually for the
    National Transit Institute for each year of the TEA-21 authorization,
    fiscal year 1998 through fiscal year 2003. FTA and Rutgers University
    are negotiating a Memorandum of Understanding for the continued
    management of the National Transit Institute by the University. This
    MOU will incorporate the important policy directions and transportation
    and transit training priorities contained in the Department's strategic
    plans and program performance standards.
                       altoona, pennsylvania bus testing
        Question. How much has been allocated for technical support for
    testing new bus models in Altoona in fiscal years 1997 through? From
    what program is this funding derived?
        Answer. In fiscal year 1997, the amount was $85,040; in fiscal year
    1998, $95,000. In fiscal years 1999 and 2000, the amount is expected to
    be $100,000 annually. The funds are derived from the Section 5309
    Capital Investments account.
        Question. What new buses were tested at the facility in fiscal
    years 1998, 1999 and planned for fiscal year 2000?
        Answer. Buses Tested in fiscal year 1998.--In fiscal year 1998, 16
    bus models were tested at the Altoona facility. These are listed on the
    following chart:

                        BUSES TESTED IN FISCAL YEAR 1998
    ------------------------------------------------------------------------
                 Manufacturer                             Model
    ------------------------------------------------------------------------
    Northrop Grumman......................  ATTB.
    New Flyer Industries..................  D60LF.
    Supreme/Freedom One...................  Low-Floor Minivan.
    Supreme Corp..........................  PS-31.
    El Dorado National....................  Aerotech 240.
    Coach & Equipment Mfg. Corp...........  Condor.
    Freedom One/Supreme Corp..............  Low Floor Mini Van.
    Metrotrans............................  Classic 20 foot.
    Metrotrans............................  Classic 24 foot.
    Motor Coach Industries................  102-D3 CNG.
    Supreme Corp..........................  28 foot Bus.
    Cable Car Concepts....................  MIDI.
    Nova Bus Corp.........................  T80206.
    Champion Bus Inc......................  CTS.
    Champion Bus Inc......................  Contender TB.
    Thomas Built Buses Inc................  110-8-N-1069.
    ------------------------------------------------------------------------

        Buses Tested in fiscal year 1999.--Thus far in fiscal year 1999,
    nine (9) buses have been tested at the Altoona facility. Additional bus
    models have been scheduled for testing.

                        BUSES TESTED IN FISCAL YEAR 1999
    ------------------------------------------------------------------------
                   Manufacturer                            Model
    ------------------------------------------------------------------------
    Starcraft................................  Allstar.
    New Flyer Industries.....................  D45 Viking.
    Orion Bus Industries.....................  Orion II CNG.
    Champion Bus, Inc........................  Defender.
    Supreme Corp.............................  Trolley.
    ABI......................................  MSV-1120S.
    Goshen...................................  Sentinel.
    Glavel...................................  Universal.
    Champion.................................  Solo-LPG.
    ------------------------------------------------------------------------

        Buses Initiating Testing in fiscal year 2000.--To date, no buses
    have been scheduled for testing in fiscal year 2000.
                  capital investment grants unobligated funds
        Question. Please provide a list of any unobligated contract
    authority funds that have remained on the books for more than three
    years (that is, funds appropriated or authorized in or prior to fiscal
    year 1996).
        Answer. The Capital Investment Grants (Discretionary Grants) funds
    that are more than three years old and not obligated are as follows:

    Federal Transit Administration Funds more than three-years old and
    Unobligated as of 4/30/99

            Capital Investments Program                    Unobligated Funds

    Capital Program, Section 5309, Bus......................  \1\ $7,455,535
    Capital Program, Section 5309, Fixed Guideway Mod.......   \2\ 2,022,708
    Capital Program, Section 5309, New Starts...............   \1\ 3,886,253
    Undistributed Discretionary.............................       2,653,298
                        --------------------------------------------------------
                        ____________________________________________________
          TOTAL.............................................      16,017,794

    \1\ Includes amounts not obligated per congressional guidance, reports
    and bill language.
    \2\ Funds are available for 4 years.

        Question. Please provide a list of recoveries by program/project
    and amount made in fiscal year 1998, planned for fiscal year 1999 and
    estimated for fiscal year 2000. Delineate by program/project how these
    recoveries were (or are to be) allocated.
        Answer. A list of recoveries by program and amount made in fiscal
    year 1998 is provided in the table below. We estimate a similar
    distribution of recoveries as they become available for fiscal years
    1999 and 2000.
        Funds recovered under our Formula Grants programs and Planning
    programs, remain with the account and are reapportioned to all areas in
    the succeeding fiscal year according to legislative formula. Amounts
    recovered under the previous section 5 formula are authorized to be
    transferred to section 5307, Urbanized Area Formula and are
    reapportioned. Funds recovered under section 5311(b) Rural Transit
    Assistance Program (RTAP) previously funded with Formula Grants, are
    transferred to the Transit Planning and Research account and are
    distributed with section 5311(b), RTAP. Recoveries under the Research
    Training and Human Resources account are authorized to be transferred
    to the Transit Planning and Research account and are distributed with
    section 5314, National Planning and Research. Section 5309 New Starts
    and Bus funds recovered from projects previously earmarked are
    reprogrammed after notification to and approval of the House and Senate
    Committees on Appropriations.

    Department of Transportation Federal Transit Administration Recovery
    Activities

                                                                 Fiscal year
            Program                                                     1998

    FORMULA GRANTS:
        Sec. 5307, Urbanized Area Formula Program...........     $21,500,729
        Sec. 5307, Urbanized Area Formula Program, Oversight          29,108
        Sec. 5310, Elderly and Persons with Disabilities....          90,318
        Sec. 5311, Nonurbanized Area Formula Program........       3,628,921
                        --------------------------------------------------------
                        ____________________________________________________
          Total, Formula Grants.............................      25,249,076
                        ========================================================
                        ____________________________________________________
    TRANSIT PLANNING AND RESEARCH:
        Sec. 5303, Metropolitan Planning Program............       1,556,566
        Sec. 5313, State Planning and Research Program......         132,507
        Sec. 5314, National Planning and Research...........         196,938
        Sec. 5311, RTAP.....................................         122,328
                        --------------------------------------------------------
                        ____________________________________________________
          Total, Transit Planning and Research..............       2,008,339
                        ========================================================
                        ____________________________________________________
    DISCRETIONARY GRANTS:
        Sec. 5309, Capital Program, Bus.....................       1,770,372
        Sec. 5309, Capital Program, New Starts..............      16,008,275
        Sec. 5309, Capital Program, Rail Mod................       1,219,734
        Sec. 5309, Capital Program, Innovative Techniques...          33,235
        Sec. 5303, Special Studies..........................         681,732
        Sec. 5303, Metropolitan Program.....................           1,388
        Sec. 5313, State Planning and Research..............             657
        Sec. 5314, National Planning and Research...........          27,804
        Sec. 5307, Urbanized Area, 9(B).....................         507,020
        Sec. 5317, University Transportation Centers........         871,471
        Sec. 5310, Elderly and Persons with Disabilities....         301,397
        Sec. 5307 Transferred to sec. 5311..................         149,089
                        --------------------------------------------------------
                        ____________________________________________________
          Total, Discretionary Grants.......................      21,572,174
                        ========================================================
                        ____________________________________________________
    RESEARCH TRAINING AND HUMAN RESOURCES...................         371,680
    INTERSTATE TRANSFER GRANTS..............................       6,036,466
    URBAN DISCRETIONARY GRANTS..............................         555,920
                        --------------------------------------------------------
                        ____________________________________________________
          Total, Federal Transit Administration.............      55,793,655

        Question. Transit new starts and bus and bus facilities funds are
    subject to the ``three-year rule'', wherein earmarked appropriated
    funds not obligated after three fiscal years are available to be
    reprogrammed. The November 6, 1998 Federal Register ``Apportionment,
    Allocations and Program Information'' notice listed over $78 million
    worth of fiscal year 1997 Section 5309 bus unobligated allocation.
        Answer. The information is in the table below.

                                 FEDERAL TRANSIT ADMINISTRATION FISCAL YEAR 1997 UNOBLIGATED SECTION 5309 NEW START ALLOCATIONS
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            FISCAL YEAR
    STATE         PROJECT LOCATION AND DESCRIPTION        1997 CARRYOVER                                        STATUS
    --------------------------------------------------------------------------------------------------------------------------------------------------------
       CT Hartford--Griffin Light Rail Project                $993,023  Project deleted from Regional Transportation Plan.
       VT Burlington--Charlotte Commuter Rail                  993,023  Application under review--Obligation expected in 4th Qtr.
       NY New York--Whitehall Ferry Terminal                 1,675,037  NEPA process still underway; anticipate 4th Qtr obligation.
       NJ Burlington--Gloucester Line \1\                    1,488,750  Obligation not likely this fiscal year.
       VA Virginia Railway Express--Commuter Rail            2,979,069  Application under review--Obligation expected in 4th Qtr.
           Project
       MS Jackson--Intermodal Corridor                       5,461,626  Application not yet submitted; project scope under refinement.
       FL Miami--Metro Dade East-West Corridor Project       1,489,534  Obligated on 11/20/98.
       FL Miami--North 27th Avenue Project                     993,023  Obligated on 11/20/98.
       NC Research Triangle Park--Regional Transit             693,384  Application under review--Obligation expected in 4th Qtr.
           Plan
       TX Houston--Regional Bus Plan                        40,306,799  Grant under review; obligation In 4th Qtr.
       TX Dallas--Ft. Worth RAILTRAN                        15,143,599  Grant under final review; obligation In 4th Qtr.
       LA New Orleans--Canal Street Corridor Project         7,944,183  Environmental issues under study; obligation this fiscal year possible.
       AR Little Rock--Junction Bridge Project               1,806,046  Environmental Assessment being completed; obligation in 4th Qtr.
       MO St. Louis--Metrolink Project                       3,405,809  Application under review--Obligation expected in 4th Qtr.
       CA San Diego Mid-Coast Extension                      1,489,534  Application under review--Obligation expected in 4th Qtr.
       AK Hollis--Ketchikan Ferry Project                    6,345,416  Under final review--obligation expected in 3rd Qtr.
       WA Seattle-Renton-Tacoma Light Rail Project           2,979,069  Obligated on 1/22/99.
                                                       ----------------
                Total                                       96,186,924
    --------------------------------------------------------------------------------------------------------------------------------------------------------
          \1\ Funds [$1,488,750] identified in the fiscal year 1997 Carryover column are fiscal year 1995 funds extended for obligation by the fiscal year
            1999 Appropriation Conference Report for Burlington--Glouchester, NJ Commuter Rail.

            [GRAPHIC] [TIFF OMITTED] TSM.011

            [GRAPHIC] [TIFF OMITTED] TSM.012

            [GRAPHIC] [TIFF OMITTED] TSM.013

            [GRAPHIC] [TIFF OMITTED] TSM.014

                state by state breakout of federal transit funds
        Question. For fiscal year 2000, please prepare a table that
    includes all firewall formula program funds, new starts funds as
    included in the administration's budget, and TEA-21 (Section 3031)
    earmarked bus funds, breaking out the funding distribution by state and
    category. Show a total at the bottom, and note what percentage of that
    total is represented by each state's subtotal.
        Answer. The information is provided in the chart below:

                                         FEDERAL TRANSIT ADMINISTRATION FISCAL YEAR 2000 GUARANTEED LEVEL APPORTIONMENT/ALLOCATIONS FOR FTA PROGRAMS (BY STATE)
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                     Section 5310 Elderly                      Section 5309 Fixed                         State Total        State
                      State                       Section 5307    Section 5311 Non-     & Persons with      Section 5309 New        Guideway         Section 5309 Bus     Selected FTA    percent of
                                                 Urbanized Area     urbanized Area       Disabilities            Starts           Modernization         Allocation          Programs         Total
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Alabama..................................        $12,345,815         $4,601,674            $1,262,364  .................  ....................         $1,250,000        $19,459,853        0.36
    Alaska...................................      \1\ 7,159,272            686,209               191,850     \2\ $5,161,000  ....................  .................         13,198,331         .24
    American Samoa...........................  .................             97,806                52,632  .................  ....................  .................            150,438  ..........
    Arizona..................................         31,278,488          2,014,492             1,112,036  .................            $1,714,915          3,360,000         39,479,931         .73
    Arkansas.................................          4,808,246          3,678,847               879,566  .................  ....................  .................          9,366,659         .17
    California...............................        440,827,753          8,978,871             6,874,937        225,870,289            97,447,440         14,125,000        794,124,290       14.67
    Colorado.................................         34,346,300          1,916,629               860,712         35,000,000             1,276,142          1,875,000         75,274,783        1.39
    Connecticut..............................         43,412,116          1,738,563               987,472  .................            35,613,122          6,750,000         88,501,273        1.64
    Delaware.................................          5,819,571            433,730               293,751  .................               900,963  .................          7,448,015         .14
    District of Columbia.....................         24,133,985  .................               291,511  .................            41,405,152          7,350,000         73,180,648        1.35
    Florida..................................        136,124,791          5,772,011             4,636,540         64,000,000            14,894,671          9,250,000        234,678,013        4.34
    Georgia..................................         51,566,541          6,728,137             1,639,325         45,141,609            20,056,733         13,500,000        138,632,345        2.56
    Guam.....................................  .................            278,431               133,754  .................  ....................  .................            412,185         .01
    Hawaii...................................         21,805,177            755,131               375,895      \2\ 5,161,000               717,140          2,250,000         31,064,343         .57
    Idaho....................................          2,842,008          1,523,454               384,869  .................  ....................  .................          4,750,331         .09
    Illinois.................................        192,661,811          6,172,689             2,994,303         50,000,000           109,835,226          8,200,000        369,864,029        6.83
    Indiana..................................         30,583,459          5,962,678             1,567,146  .................             7,372,357          7,500,000         52,985,640         .98
    Iowa.....................................          9,049,807          3,835,253               946,179  .................  ....................          1,885,000         15,716,239         .29
    Kansas...................................          7,299,329          3,050,822               791,908  .................  ....................  .................         11,142,059         .21
    Kentucky.................................         15,834,432          5,036,242             1,209,462  .................  ....................  .................         22,080,136         .41
    Louisiana................................         25,230,847          4,165,337             1,213,401  .................             2,719,194  .................         33,328,779         .62
    Maine....................................          2,038,744          2,009,937               483,251  .................  ....................  .................          4,531,932         .08
    Maryland.................................         69,328,328          2,509,310             1,219,178          8,703,308            21,651,851         11,500,000        114,911,975        2.12
    Massachusetts............................        105,990,461          2,689,218             1,759,633         53,961,528            63,230,944          3,750,000        231,381,784        4.28
    Michigan.................................         56,390,876          7,282,862             2,560,666  .................               449,343         13,500,000         80,183,747        1.48
    Minnesota................................         27,793,106          4,190,867             1,236,483          8,000,000             2,844,835         12,000,000         56,065,291        1.04
    Mississippi..............................          4,327,424          4,089,742               854,282  .................  ....................  .................          9,271,448         .17
    Missouri.................................         31,112,334          4,881,280             1,589,372  .................             1,632,113          1,250,000         40,465,099         .75
    Montana..................................          2,150,550          1,234,118               352,436  .................  ....................  .................          3,737,104         .07
    Nebraska.................................          7,609,130          1,862,127               555,935  .................  ....................  .................         10,027,192         .19
    Nevada...................................         16,410,558            607,956               411,508  .................  ....................          2,250,000         19,680,022         .36
    New Hampshire............................          3,013,098          1,609,709               388,305  .................  ....................  .................          5,011,112         .09
    New Jersey...............................        161,401,967          2,301,543             2,114,182        111,000,000            87,109,545          4,250,000        368,177,237        6.80
    New Mexico...............................          6,403,038          1,809,361               487,951  .................  ....................          1,250,000          9,950,350         .18
    New York.................................        482,151,901          8,101,711             4,909,688  .................           320,395,319         21,225,000        836,783,619       15.46
    North Carolina...........................         24,160,905          8,606,405             1,865,487          8,000,000  ....................          4,839,000         47,471,797         .88
    North Dakota.............................          2,096,375            912,685               298,799  .................  ....................  .................          3,307,859         .06
    Northern Marianas........................  .................             90,638                52,404  .................  ....................  .................            143,042  ..........
    Ohio.....................................         78,650,959          8,761,919             3,125,261  .................            16,007,175            625,000        107,170,314        1.98
    Oklahoma.................................         10,130,348          3,745,630             1,042,604  .................  ....................          5,000,000         19,918,582         .37
    Oregon...................................         24,189,968          2,974,063               968,730         11,061,930             3,059,860          6,150,000         48,404,551         .89
    Pennsylvania.............................        133,583,533          9,774,012             3,748,659  .................            95,594,209         25,642,000        268,342,413        4.96
    Puerto Rico..............................         43,036,204          2,920,782               918,554         82,000,000             1,777,215            600,000        131,252,755        2.43
    Rhode Island.............................          8,476,199            374,157               429,237  .................             2,412,069          3,294,000         14,985,662         .28
    South Carolina...........................         10,419,785          4,307,549             1,007,521  .................  ....................          1,220,000         16,954,855         .31
    South Dakota.............................          1,512,262          1,112,492               323,318  .................  ....................          1,500,000          4,448,072         .08
    Tennessee................................         20,264,508          5,560,553             1,492,017         15,109,600                79,754  .................         42,506,432         .79
    Texas....................................        147,603,791         11,739,874             3,871,834        132,516,377             5,696,889          5,750,000        307,178,765        5.68
    Utah.....................................         18,747,454            843,330               454,162         57,928,359  ....................          8,800,000         86,773,305        1.60
    Vermont..................................            760,019            994,664               265,866  .................  ....................  .................          2,020,549         .04
    Virgin Islands...........................  .................            212,891               136,116  .................  ....................  .................            349,007         .01
    Virginia.................................         52,410,334          4,929,969             1,552,472  .................               464,097          2,250,000         61,606,872        1.14
    Washington...............................         77,136,196          3,454,367             1,391,500          8,000,000            15,992,245          4,950,000        110,924,308        2.05
    West Virginia............................          3,664,123          2,937,208               734,024  .................  ....................         17,000,000         24,335,355         .45
    Wisconsin................................         32,707,189          5,075,151             1,420,820  .................               696,482         18,000,000         57,899,642        1.07
    Wyoming..................................          1,050,115            709,817               224,933  .................  ....................  .................          1,984,865         .04
    Unallocated..............................  .................  .................  ....................         46,432,000  ....................        183,008,500        229,440,500        4.24
                                              ------------------------------------------------------------------------------------------------------------------------------------------------------
          Subtotal...........................      2,763,851,530        192,644,903            72,946,801        973,047,000           973,047,000        436,898,500      5,412,435,734      100.00
                                              ------------------------------------------------------------------------------------------------------------------------------------------------------
    Oversight................................         13,888,701            968,065  ....................          7,353,000             7,353,000          3,301,500        $32,864,266
                                              ------------------------------------------------------------------------------------------------------------------------------------------------------
          Total..............................      2,777,740,231        193,612,968            72,946,801        980,400,000           980,400,000        440,200,000      5,445,300,000
                                              ======================================================================================================================================================
    Clean Fuels..............................         50,000,000  .................  ....................  .................  ....................         50,000,000        100,000,000
    Over-the-Road Bus Accessibility..........          3,700,000  .................  ....................  .................  ....................  .................          3,700,000
                                              ------------------------------------------------------------------------------------------------------------------------------------------------------
          Grand Total........................      2,831,440,231        193,612,968            72,946,801        980,400,000           980,400,000        490,200,000      5,549,000,000
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ Includes $4,849,950 for the Alaska Railroad.
    \2\ Amount for Alaska/Hawaii Ferries distributed one-half to Alaska and one-half to Hawaii.

        Question. For fiscal year 1999 enacted, please prepare a table that
    includes all firewall formula program funds, new starts funds as
    earmarked in the fiscal year 1999 Omnibus Appropriations bill (before
    project management oversight is subtracted), and all earmarked bus
    funds (before project management oversight is subtracted), breaking out
    the funding distribution by state and category. Show a total at the
    bottom, and note what percentage of that total is represented by each
    state's subtotal.
        Answer. The information is provided in the chart below:

                                                 FEDERAL TRANSIT ADMINISTRATION, FISCAL YEAR 1999 APPORTIONMENT/ALLOCATIONS FOR FTA PROGRAMS (BY STATE)
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                  Section 5310
                                                              Section 5307    Section 5311 Non-     Elderly &     Section 5309 New    Section 5309    Section 5309 Bus     State Total       State
                             State                           Urbanized Area    urbanized Area     Persons with         Starts        Fixed Guideway      Allocation       Selected FTA    percent of
                                                                                                  Disabilities                        Modernization                         Programs         Total
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Alabama...............................................       $11,402,391        $4,250,030        $1,160,647        $1,000,000  ................       $23,840,000       $41,653,068        0.82
    Alaska................................................     \1\ 7,005,198           633,771           185,871     \2\ 5,200,000  ................         7,500,000        20,524,840         .40
    American Samoa........................................  ................            90,332            52,397  ................  ................  ................           142,729  ..........
    Arizona...............................................        28,888,298         1,860,551         1,023,763         5,000,000        $1,286,274         7,000,000        45,058,886         .88
    Arkansas..............................................         4,440,818         3,397,723           812,084         1,000,000  ................         3,060,000        12,710,625         .25
    California............................................       407,141,247         8,292,733         6,271,268       146,980,000        86,945,465        40,555,000       696,185,713       13.64
    Colorado..............................................        31,721,677         1,770,167           794,916        41,000,000         1,080,875         8,675,000        85,042,635        1.67
    Connecticut...........................................        40,094,714         1,605,709           910,339         3,500,000        34,799,686         7,550,000        88,460,448        1.73
    Delaware..............................................         5,374,860           400,586           278,659  ................           666,931         1,000,000         7,721,036         .15
    District of Columbia..................................        22,289,751  ................           276,620  ................        32,038,246         7,350,000        61,954,617        1.21
    Florida...............................................       125,722,610         5,330,935         4,233,062        28,500,000        11,094,890        19,500,000       194,381,497        3.81
    Georgia...............................................        47,626,007         6,213,996         1,503,895        53,610,000        14,967,672        15,500,000       139,421,570        2.73
    Guam..................................................  ................           257,155           132,972  ................  ................  ................           390,127         .01
    Hawaii................................................        20,138,902           697,426           353,457     \2\ 8,200,000           532,305         3,250,000        33,172,090         .65
    Idaho.................................................         2,624,831         1,407,037           361,628  ................  ................  ................         4,393,496         .09
    Illinois..............................................       177,939,272         5,700,995         2,737,694        44,000,000       106,700,651         9,300,000       346,378,612        6.79
    Indiana...............................................        28,246,378         5,507,032         1,438,171         3,000,000         7,161,958         7,700,000        53,053,539        1.04
    Iowa..................................................         8,358,254         3,542,177           872,739           250,000  ................         6,685,000        19,708,170         .39
    Kansas................................................         6,741,540         2,817,690           732,264         1,000,000  ................         2,000,000        13,291,494         .26
    Kentucky..............................................        14,624,420         4,651,390         1,112,476  ................  ................         5,300,000        25,688,286         .50
    Louisiana.............................................        23,302,797         3,847,036         1,116,063        24,000,000         2,323,293        11,000,000        65,589,189        1.28
    Maine.................................................         1,882,950         1,856,345           451,211  ................  ................  ................         4,190,506         .08
    Maryland..............................................        64,030,500         2,317,558         1,121,323        20,541,000        19,950,711        10,000,000       117,961,092        2.31
    Massachusetts.........................................        97,891,042         2,483,718         1,613,444        56,233,000        60,214,839        13,728,000       232,164,043        4.55
    Michigan..............................................        52,081,684         6,726,332         2,342,839           200,000           321,028        10,600,000        72,271,883        1.42
    Minnesota.............................................        25,669,254         3,870,615         1,137,080        17,000,000         2,452,324        17,500,000        67,629,273        1.32
    Mississippi...........................................         3,996,738         3,777,218           789,061  ................  ................         5,500,000        14,063,017         .28
    Missouri..............................................        28,734,839         4,508,270         1,458,410         1,000,000         1,527,879        11,750,000        48,979,398         .96
    Montana...............................................         1,986,212         1,139,811           332,096  ................  ................         1,500,000         4,958,119         .10
    Nebraska..............................................         7,027,667         1,719,830           517,396         1,000,000  ................  ................        10,264,893         .20
    Nevada................................................        15,156,521           561,498           385,885         4,000,000  ................         6,115,000        26,218,904         .51
    New Hampshire.........................................         2,782,848         1,486,701           364,757  ................  ................         2,770,000         7,404,306         .15
    New Jersey............................................       149,068,196         2,125,667         1,936,285        77,000,000        82,332,792        11,750,000       324,212,940        6.35
    New Mexico............................................         5,913,740         1,671,096           455,491         5,000,000  ................         5,750,000        18,790,327         .37
    New York..............................................       445,307,544         7,482,603         4,481,782        24,000,000       303,962,647        27,950,000       813,184,576       15.93
    North Carolina........................................        22,314,616         7,948,734         1,709,831        13,000,000  ................        10,161,000        55,134,181        1.08
    North Dakota..........................................         1,936,178           842,941           283,256  ................  ................         2,000,000         5,062,375         .10
    Northern Marianas.....................................  ................            83,712            52,189  ................  ................  ................           135,901  ..........
    Ohio..................................................        72,640,731         8,092,364         2,856,940         8,500,000        14,917,615        13,450,000       120,457,650        2.36
    Oklahoma..............................................         9,356,223         3,459,402           960,541  ................  ................         5,000,000        18,776,166         .37
    Oregon................................................        22,341,456         2,746,796           893,273        25,718,000         2,284,605         8,550,000        62,534,130        1.22
    Pennsylvania..........................................       123,375,552         9,027,117         3,424,587        10,000,000        94,236,678        32,966,000       273,029,934        5.35
    Puerto Rico...........................................        39,747,536         2,697,587           847,585        20,000,000         1,336,512           950,000        65,579,220        1.28
    Rhode Island..........................................         7,828,479           345,565           402,028  ................         1,813,989         5,450,000        15,840,061         .31
    South Carolina........................................         9,623,540         3,978,381           928,595         2,200,000  ................         4,570,000        21,300,516         .42
    South Dakota..........................................         1,396,700         1,027,479           305,582  ................  ................         5,300,000         8,029,761         .16
    Tennessee.............................................        18,715,967         5,135,635         1,369,761         4,700,000            59,037         2,000,000        31,980,400         .63
    Texas.................................................       136,324,426        10,842,756         3,536,745        90,670,000         4,488,746        17,000,000       262,862,673        5.15
    Utah..................................................        17,314,841           778,886           424,725        75,000,000  ................        10,300,000       103,818,452        2.03
    Vermont...............................................           701,941           918,655           253,268         2,000,000  ................         4,000,000         7,873,864         .15
    Virgin Islands........................................  ................           196,622           135,122  ................  ................  ................           331,744         .01
    Virginia..............................................        48,405,321         4,553,238         1,424,809        27,000,000           467,604        13,950,000        95,800,972        1.88
    Washington............................................        71,241,720         3,190,397         1,278,234        47,250,000        12,320,187        22,700,000       157,980,538        3.09
    West Virginia.........................................         3,384,125         2,712,757           679,558         4,000,000  ................        14,500,000        25,276,440         .50
    Wisconsin.............................................        30,207,820         4,687,326         1,304,931           500,000           514,561        16,875,000        54,089,638        1.06
    Wyoming...............................................           969,869           655,575           215,996  ................  ................  ................         1,841,440         .04
    Unallocated...........................................  ................  ................  ................            48,000  ................  ................            48,000  ..........
                                                           -----------------------------------------------------------------------------------------------------------------------------------------
          Total...........................................     2,553,040,741       177,923,658        67,035,601       902,800,000       902,800,000       501,400,000     5,105,000,000         100
                                                           =========================================================================================================================================
    Over-the-Road Bus Accessibility.......................         2,000,000  ................  ................  ................  ................  ................         2,000,000  ..........
                                                           -----------------------------------------------------------------------------------------------------------------------------------------
          Grand Total.....................................     2,555,040,741       177,923,658        67,035,601       902,800,000       902,800,000       501,400,000     5,107,000,000  ..........
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ Includes $4,849,950 appropriated for the Alaska Railroad.
    \2\ Amount for Alaska/Hawaii Ferries distributed one-half to Alaska and one-half to Hawaii.

                               eligibility issues
        Question. Please provide a comprehensive list (alphabetically by
    state) of new starts and bus and bus facilities projects earmarked in
    the fiscal year 1998 or fiscal year 1999 transportation appropriations
    bills that have encountered problems with having grants released
    because of eligibility problems. Please describe the eligibility issues
    that are delaying the release of funds, and note what steps are being
    taken by FTA and the grantee to resolve the issue.
        Answer. The information is provided below.
    Fiscal Year 1999 New Start Earmarks With Eligibility Issues:
                Earmark: Hartford--Old Saybrook Rail Extension [$496,280]
        State: Connecticut
        Grantee: Midstate Regional Planning Agency
        Project Description: The proposed project is for the reconstruction
    of an existing rail line between Old Saybrook and Hartford. The line is
    basically inactive except for a short tourist operation near Old
    Saybrook.
        Project Status: Discussions have been held with the Midstate
    Regional Planning Agency to develop a grant application for a corridor
    study to explore the feasibility of a rail project.
        Eligibility Issues: Use of the earmark to fund a corridor study
    would be an eligible use of FTA funds.
        Current Status: A draft work program has been reviewed and
    commented upon. Once the work program is approved, grantee is expected
    to submit an application for the funds. This is expected later in the
    fiscal year.
                Earmark: Stamford--Fixed Guideway Connector [$992,550]
        State: Connecticut
        Grantee: City of Stamford
        Project description: City is now proposing the Stamford Urban
    Transitway Project, which will provide improved commuter and transit
    access to the Stamford Train Station. Project will incorporate reserved
    bus lanes, bus shelters, ITS elements and a new Transit shuttle
    service.
        Eligibility Issues: Original highway project being changed to a
    transit project and would appear to be eligible.
        Status: Regional staff is now waiting for revised justifications
    and maps, which are expected by May 15, 1999.
                Earmark: New London--Waterfront Access Project [$496,280]
        Grantee: City of New London
        Project Description: City has proposed a transitway project as part
    of a comprehensive multi-modal transportation program to link the
    Thames Science Center, Connecticut College and the U.S. Coast Guard
    Academy to the Downtown area and the City's Multi Modal Transportation
    Center in the City center and extended to the Ocean Beach Part at the
    City's southern tip.
        Eligibility Issues: The proposal is currently under FTA review to
    determine eligibility.
        Current Status: A follow-up meeting will be held with the City of
    discuss project eligibility items and the specifics of a grant
    application.
                Earmark: Savannah, GA--Water Taxi [$496,280]
        State: Georgia
        Grantee: Georgia Department of Transportation (GA DOT) is a
    potential candidate
        Project Description: Project currently not well defined. Project
    may be sponsored by the Georgia Department of Transportation but this
    requires additional clarification with local authorities. Plans
    apparently call for the water taxi service to be established to connect
    with the Hutchinson island development. GA DOT envisions that the local
    authority would operate the service.
        Eligibility Issues: Questions remain about the eligibility of the
    earmark. Apparently, the type of service, the operator, and source of
    operating funds are among the issues which are still under discussion.
    Moreover, the Georgia Legislature recently passed a measure providing
    funds to undertake an additional study of the concept.
        Status: FTA regional office is seeking additional information and
    clarification on the scope of the project in order to determine transit
    eligibility. This project is not authorized by TEA21.
    Fiscal Year 1999 Bus Earmarks With Eligibility Issues:
                EARMARKS: WASHINGTON COUNTY INTERMODAL FACILITIES--
                        $625,275; WESTMORELAND COUNTY INTERMODAL FACILITY--
                        $198,500; FAYETTE COUNTY INTERMODAL FACILITIES &
                        BUSES--$1,260,475
        State: Pennsylvania
        Grantee: No grantee identified
        Project Description: All three of these earmarks are for the
    construction of river landings (boat docks). Three are located in
    Washington County; one in Westmoreland County and two in Fayette
    County. This is in conjunction with the American River Heritage Program
    as the rivers where the docks would be located are designated heritage
    rivers by the Department of Interior. There is no boat service
    identified to use the landings. The Fayette County earmark also
    includes buses.
        Eligibility Issue: There is no water borne public transportation
    component either identified or planned for which might utilize these
    docks. There is no surface public transportation service to the docks.
    However, the buses for Fayette County are eligible and account for
    approximately $1,000,000 of the $1,260,475 earmark.
        Status: Regional staff has spoken with the Port of Pittsburgh staff
    regarding the earmarks. Representatives from Congressman Frank
    Mascara's office will be meeting with FTA regional staff in mid-May to
    define the eligible transit elements of the project.
                EARMARK: TOLEDO MUD HENS TRANSIT CENTER STUDY--$198,500
        State: Ohio
        Grantee: Toledo Regional Transit Authority
        Project Description: Study of the feasibility of constructing a
    transit center at the Toledo Mud Hens baseball stadium in Toledo.
        Eligibility Issue: Feasibility study [e.g., early planning prior to
    project selection] not eligible for Bus Capital funds.
        Status: FTA has been informed that the applicant is seeking
    clarification from the committees on the description of the project.
                EARMARK: MILWAUKEE INTERMODAL FACILITY REHABILITATION--
                        $992,500
        State: Wisconsin
        Grantee: None identified
        Project Description: Region V indicates that this may be the same
    project as the 1998 earmark ``Milwaukee Rail Station Rehabilitation''
    in the amount of $996,774. That earmark was initiated by the Chicago
    Milwaukee Corporation (CMC), a private corporation. CMC leases the
    station to Amtrak. CMC would like to rehabilitate the station.
        Eligibility Issue: If this is a rail project, it is not eligible
    for bus funds. However, if a portion of the rehabilitation of the
    station includes more efficient intermodal connections for bus, this
    portion might be eligible. Finally, even if eligible, an FTA grant
    cannot be made to a private corporation.
        Status: Region V staff have meet with the attorneys for the
    Milwaukee Rail Station. Milwaukee County has been identified as the
    applicant for this project. FTA is working closely with Milwaukee
    County to resolve any eligibility issues that may arise.
                EARMARK: HUNTSVILLE INTERMODAL SPACE CENTERS--$4,962,500
        State: Alabama
        Grantee: U.S. Space and Rocket Center (State Agency)
        Project Description: Based on information received to date from the
    U.S. Space and Rocket Center, a state agency, the project is for
    visitor shuttle service, perhaps Peoplemover, between the Marshall
    Space Flight Center and the U.S. Space Camp.
        Eligibility Issue: The service is within the space center complex,
    only serving visitors. [Section 5302(a)(7) of the Federal Transit Act
    of 1998, as amended, states that ``the term `mass transportation' means
    transportation by a conveyance that provides regular and continuing
    general or special transportation to the public, but does not include
    school bus, charter, or sightseeing transportation''].
        Status: FTA is currently working with the applicant to define the
    eligible transit elements of the project and to resolve any eligibility
    issues that may arise.
                EARMARK: HIGH STREET JACKSON INTERMODAL CENTER--$1,985,000
        State: Mississippi
        Grantee: City of Jackson
        Project Description: Region IV indicates that this project was
    erroneously submitted as a supplement to the Downtown Multimodal
    Transit Center on Capital Street in Jackson. The correct wording of the
    earmark should be the ``Jackson Intermodal Corridor'' and would
    supplement the fiscal year 1997 New Start earmark ($5,461,626) for the
    Jackson Intermodal Corridor.
        Eligibility Issue: No transit project has been identified
        Status: Region IV has had discussions with the City of Jackson and
    the City is working on developing a transit project for this
    supplemental funding. In addition, this earmark should be a New Start
    earmark, not a bus earmark.
        Question. In the fiscal year 1999 bill, all bus and bus facilities
    projects received bill language earmarks. Please provide a list of any
    of these grantees who have encountered problems with having grants
    released because of the project name listed in the appropriations
    legislation does not precisely match the description of the project
    forwarded by the grantee in their application.
        Answer. The information is listed below:
      --Louisiana (Statewide earmark) State Infrastructure Bank, Transit
            Account--(There is no SIB in place for this area/LADOTD would
            like to reprogram these funds)
      --Butte, Montana--Bus Replacements (Should be changed to ``buses and
            bus facilities'')
      --Mount Vernon, Washington--Multimodal Center (Should be changed to
            ``buses and bus facilities'')
      --Los Angeles, California--Municipal Transit Operators Consortium
            (Should include in language ``buses and bus facilities'')
      --Solano Links, California--Links Intercity Transit Consortium
            (Should include in language ``bus purchases'')
        Question. Generally describe the process FTA undergoes when an
    eligibility issue is raised. What procedure does the agency follow in
    its attempt to resolve these problems?
        Answer. FTA attempts to identify earmarks with eligibility issues
    early in the appropriations process. If FTA knows of an eligibility
    issue at the time of Senate mark up, we will advise the Senate
    accordingly when the Senate requests FTA comments on earmarks proposed
    by members. When the House and Senate appropriations bills are passed
    the regions are asked to inquire of grantees for detailed information
    regarding the earmarks. The regions forward information to FTA
    headquarters regarding earmarks and identify earmarks with eligibility
    issues. Headquarters prepares a list of earmarks with eligibility
    issues and provides it to the House and Senate appropriations
    committees. The regional offices work with the grantees on an ongoing
    basis to see if they can define an eligible project. In quite a few
    cases the regions are successful. If the regional office cannot
    successfully define an eligible project the earmark may need to be
    revised in the following year's appropriation bill.
        Question. Several U.S. communities are advancing bus rapid transit
    projects, including Dulles corridor, Virginia; Eugene, Oregon
    university corridor; Cleveland Euclid Avenue corridor; and West
    Hollywood, Los Angeles. Are these projects eligible for both new starts
    and bus funding? Which is more appropriate?
        Answer. In general, bus rapid transit projects would be eligible
    for funding from both the new starts and bus programs. The definition
    of ``fixed guideway'' used by FTA to define new starts specifically
    includes exclusive facilities for buses and other high-occupancy
    vehicles. Whether one or the other funding programs would be more
    appropriate would depend on the specific project being proposed.
                         bus and bus-related facilities
        Question. Please reproduce the fiscal year 1999 bill language
    listing of appropriated bus projects found on pages 185-190 of the
    justification. Add a column to the right and note which projects have
    been specified in TEA21 for fiscal year 2000 funding, and the level of
    that funding. Include totals at the bottom of both the 1999 and 2000
    columns.
        Answer. The information is provided in a chart below:

              FEDERAL TRANSIT ADMINISTRATION BUS AND BUS FACILITIES
    ------------------------------------------------------------------------
                                               Fiscal Year      Fiscal Year
         State               Project         1999 Conference    2000 TEA-21
    ------------------------------------------------------------------------
             Alaska Anchorage Ship Creek       $4,300,000   ..............
                     intermodal facility
             Alaska Fairbanks intermodal        2,000,000   ..............
                     rail/bus transfer
                     facility
             Alaska North Slope Borough           500,000   ..............
                     buses
             Alaska Whittier intermodal           700,000   ..............
                     facility and
                     pedestrian overpass
            Alabama Birmingham intermodal       2,000,000   ..............
                     facility
            Alabama Birmingham-Jefferson        1,250,000       $1,250,000
                     County, buses
            Alabama Dothan Wiregrass              500,000   ..............
                     Transit Authority
                     demand response
                     shuttle Vehicles and
                     transit facility
            Alabama Huntsville,                 5,000,000   ..............
                     intermodal space
                     centers
            Alabama Huntsville, transit         1,000,000   ..............
                     facility
            Alabama Jasper buses                   50,000   ..............
            Alabama Lee-Russell Council           790,000   ..............
                     buses
            Alabama Mobile, GM&O building       5,000,000   ..............
            Alabama Montgomery Union            5,000,000   ..............
                     Station intermodal
                     center and buses
            Alabama Pritchard, bus                500,000   ..............
                     transfer facility
            Alabama Tuscaloosa,                 1,950,000   ..............
                     intermodal center
            Alabama University of North           800,000   ..............
                     Alabama pedestrian
                     walkways
           Arkansas Arkansas Highway and          200,000        2,000,000
                     Transit Department
                     buses
           Arkansas Fayetteville,                 500,000          500,000
                     University of
                     Arkansas Transit
                     System buses
           Arkansas Hot Springs,                  560,000          560,000
                     transportation depot
                     and plaza
           Arkansas Little Rock, Central          300,000          300,000
                     Arkansas Transit
                     buses
           Arkansas Statewide bus needs         1,500,000   ..............
            Arizona Phoenix bus and bus         4,000,000   ..............
                     facilities
            Arizona Tucson alternatively        2,000,000   ..............
                     fueled buses
            Arizona Tucson intermodal           1,000,000   ..............
                     facility
         California Central Contra Costa          200,000   ..............
                     County transit vans
         California Culver City, CityBus        1,250,000        1,250,000
                     buses
         California Davis, Unitrans               625,000          625,000
                     transit maintenance
                     facility
         California Davis/Sacramento area         950,000   ..............
                     hydrogen bus
                     technology program
         California Folsom multimodal           1,000,000   ..............
                     facility
         California Healdsburg,                 1,000,000        1,000,000
                     intermodal facility
         California Humboldt, intermodal        1,000,000   ..............
                     facility
         California Huntington Beach              200,000   ..............
                     buses
         California I-5 corridor                2,500,000   ..............
                     intermodal transit
                     centers
         California Lake Tahoe intermodal         500,000   ..............
                     transit center
         California Livermore automatic         1,000,000        1,000,000
                     vehicle locator
                     program
         California Los Angeles County          3,000,000   ..............
                     Metropolitan
                     transportation
                     authority buses
         California Los Angeles Foothills       1,000,000   ..............
                     Transit maintenance
                     facility
         California Los Angeles municipal       2,500,000   ..............
                     transit operators
                     consortium
         California Los Angeles, Union          1,250,000        1,250,000
                     Station Gateway
                     Intermodal Transit
                     Center
         California Modesto, bus                1,355,000          625,000
                     maintenance facility
         California Monterey, Monterey-           625,000          625,000
                     Salinas buses
         California Morongo Basin,                650,000   ..............
                     Transit Authority
                     bus facility
         California North San Diego             1,750,000   ..............
                     County transit
                     district buses
         California Perris, bus                 1,250,000        1,250,000
                     maintenance facility
         California Riverside Transit           1,000,000   ..............
                     Agency buses and
                     facilities and ITS
                     applica-  tions
         California Sacramento, CNG buses       1,250,000        1,250,000
         California San Bernardino buses        1,000,000   ..............
         California San Diego City              1,000,000   ..............
                     College multimodal
                     center (12th Avenue/
                     College Station)
         California San Fernando Valley           300,000   ..............
                     smart shuttle buses
         California San Francisco, Islais       1,250,000        1,250,000
                     Creek maintenance
                     facility
         California San Joaquin                 1,000,000   ..............
                     (Stockton) buses and
                     bus facilities
         California Santa Clara Valley          1,000,000   ..............
                     Transportation
                     Authority buses and
                     bus facilities
         California Santa Clarita buses    ...............       1,250,000
         California Santa Clarita transit       2,250,000   ..............
                     maintenance facility
         California Santa Cruz                    625,000          625,000
                     metropolitan bus
                     facilities
         California Santa Cruz transit          1,000,000   ..............
                     facility
         California Santa Rosa, Cotati,           750,000   ..............
                     and Rohnert Park
                     facilities
         California Santa Rosa/Cotati,            750,000          750,000
                     intermodal
                     transportation
                     facilities
         California Solano Links                1,000,000   ..............
                     intercity transit
                     consortium
         California Ukiah Transit Center          500,000   ..............
         California Windsor, Intermodal           750,000          750,000
                     Facility
         California Woodland Hills,               325,000          625,000
                     Warner Center
                     Transportation Hub
         California Yolo County, bus            1,200,000   ..............
                     facility
           Colorado Boulder/Denver, RTD           625,000          625,000
                     buses
           Colorado Colorado buses and          6,800,000   ..............
                     bus facilities
           Colorado Denver, Stapleton           1,250,000        1,250,000
                     Intermodal Center
        Connecticut Hartford,                     800,000   ..............
                     Transportation
                     Access Project
        Connecticut New Haven, bus              2,250,000        2,250,000
                     facility
        Connecticut Norwich, buses              2,250,000        2,250,000
        Connecticut Waterbury, bus              2,250,000        2,250,000
                     facility
          District/ Fuel cell bus and bus       4,850,000        4,850,000
           Columbia  facilities program
                     (section 3015(b))
          District/ Washington, D.C.            2,500,000        2,500,000
           Columbia  Intermodal
                     Transportation
                     Center
           Delaware Delaware statewide          1,000,000   ..............
                     buses
            Florida Broward County, buses       1,000,000   ..............
            Florida Clearwater multimodal       2,500,000   ..............
                     facility
            Florida Daytona Beach,              2,500,000        2,500,000
                     Intermodal Center
            Florida Gainesville buses and       1,500,000   ..............
                     equipment
            Florida Jacksonville buses          1,000,000   ..............
                     and bus facilities
            Florida Lakeland, Citrus            1,250,000        1,250,000
                     Connection transit
                     vehicles and related
                     equip-  ment
            Florida Lynx buses and bus          1,000,000   ..............
                     facilities
            Florida Miami, bus security         1,000,000   ..............
                     and surveillance
            Florida Miami Beach                 1,000,000   ..............
                     multimodal transit
                     center
            Florida Miami Beach, Electric         750,000          750,000
                     Shuttle Service
            Florida Miami-Dade, buses           2,250,000        2,250,000
            Florida Orlando, Intermodal         2,500,000        2,500,000
                     Facility
            Florida Tampa Hartline buses        1,250,000   ..............
            Georgia Atlanta, MARTA buses       12,000,000       13,500,000
            Georgia Savannah/Chatham Area       3,500,000   ..............
                     transit bus transfer
                     centers and buses
             Hawaii Honolulu, bus               3,250,000        2,250,000
                     facility and buses
           Illinois Illinois statewide          6,800,000        8,200,000
                     buses and bus-
                     related equipment
           Illinois Rock Island, buses          2,500,000   ..............
            Indiana City of East Chicago          200,000   ..............
                     buses
            Indiana Gary, Transit               1,250,000        1,250,000
                     Consortium buses
            Indiana Indianapolis, buses         5,000,000        5,000,000
            Indiana South Bend, Urban           1,250,000        1,250,000
                     Intermodal
                     Transportation
                     Facility
               Iowa Fort Dodge,                   885,000          885,000
                     Intermodal Facility
                     (Phase II)
               Iowa Iowa statewide buses        3,000,000   ..............
                     and bus facilities
               Iowa Iowa/Illinois Transit       1,000,000        1,000,000
                     Consortium bus
                     safety and security
               Iowa Sioux City park and         1,800,000   ..............
                     ride facility
             Kansas Johnson County bus          2,000,000   ..............
                     maintenance/
                     operations facility
           Kentucky Louisville, Kentucky        3,000,000   ..............
                     University of
                     Louisville and River
                     City buses
           Kentucky Northern Kentucky             100,000   ..............
                     Area Development
                     District senior
                     citizen buses
           Kentucky Owensboro buses               200,000   ..............
           Kentucky Southern and eastern        2,000,000   ..............
                     Kentucky buses and
                     bus facilities
          Louisiana Statewide buses and        11,000,000   ..............
                     bus-related
                     facilities
          Louisiana Baton Rouge                  [200,000]  ..............
          Louisiana Jefferson Parish             [350,000]  ..............
          Louisiana Lafayette                    [425,000]  ..............
          Louisiana Louisiana DOTD,              [650,000]  ..............
                     including vans
          Louisiana Monroe                       [450,000]  ..............
          Louisiana New Orleans                [8,075,000]  ..............
          Louisiana Shreveport                   [400,000]  ..............
          Louisiana State infrastructure         [350,000]  ..............
                     bank, transit
                     account
          Louisiana St. Tammany Parish           [100,000]  ..............
      Massachusetts Essex and Middlesex         3,128,000   ..............
                     buses
      Massachusetts New Bedford/Fall              250,000   ..............
                     River Mobile Access
                     to health care
      Massachusetts Pittsfield intermodal       4,600,000   ..............
                     center
      Massachusetts Springfield, Union          1,250,000        1,250,000
                     Station
      Massachusetts Westfield intermodal        2,000,000   ..............
                     center
      Massachusetts Worcester, Union            2,500,000        2,500,000
                     Station Intermodal
                     Transportation
                     Center
           Maryland Maryland statewide         10,000,000       11,500,000
                     bus facilities and
                     buses
           Michigan Lansing, CATA bus             600,000   ..............
                     technology
                     improvements
           Michigan Michigan statewide         10,000,000       13,500,000
                     buses
          Minnesota Duluth, Transit             1,000,000        1,000,000
                     Authority community
                     circulation vehicles
          Minnesota Duluth, Transit               500,000          500,000
                     Authority
                     intelligent
                     transportation
                     systems
          Minnesota Duluth, Transit               500,000          500,000
                     Authority Transit
                     Hub
          Minnesota Northstar                   6,000,000       10,000,000
                     Corridor,Intermodal
                     Facilities and buses
          Minnesota Twin Cities area            9,500,000   ..............
                     metro transit buses
                     and bus facilities
           Missouri Kansas City Union           2,500,000   ..............
                     Station
                     redevelopment
           Missouri OATS Transit                2,500,000   ..............
           Missouri Southwest Missouri          1,000,000   ..............
                     State University
                     park and ride
                     facility
           Missouri St. Louis, Bi-state         1,250,000        1,250,000
                     Intermodal Center
           Missouri Statewide bus and bus       4,500,000   ..............
                     facilities
        Mississippi Harrison County             1,900,000   ..............
                     multimodal center/
                     hybrid electric
                     shuttle buses
        Mississippi High Street, Jackson        2,000,000   ..............
                     Intermodal Center
        Mississippi Jackson buses and           1,600,000   ..............
                     facilities
        Montana \1\ Butte bus                   1,500,000   ..............
                     replacements and bus
                     facilities
      New Hampshire Berlin Tri-County             120,000   ..............
                     Community Action
                     transit garage
      New Hampshire Carroll County                200,000   ..............
                     transportation
                     alliance buses
      New Hampshire Concord Area Transit          750,000   ..............
                     buses
      New Hampshire Greater Laconia               450,000   ..............
                     Transit Agency buses
      New Hampshire Keene HCS community           100,000   ..............
                     care buses and
                     equipment
      New Hampshire Lebanon advance               150,000   ..............
                     transit buses
      New Hampshire Statewide transit           1,000,000   ..............
                     systems
         New Jersey New Jersey Transit          1,750,000        1,750,000
                     jitney shuttle buses
         New Jersey Newark, Morris &            1,250,000        1,250,000
                     Essex Station access
                     and buses
         New Jersey South Amboy, Regional       1,250,000        1,250,000
                     Intermodal
                     Transportation
                     Initiative
         New Jersey Statewide                   7,500,000   ..............
                     alternatively fueled
                     vehicles
         New Mexico Albuquerque, buses,         3,750,000        1,250,000
                     paratransit
                     vehicles, and bus
                     facility
         New Mexico Northern New Mexico         2,000,000   ..............
                     park and ride
                     facilities
             Nevada Clark County Regional       2,615,000   ..............
                     Transportation
                     Commission buses and
                     bus facilities
             Nevada Reno, RTC transit           1,250,000   ..............
                     passenger and
                     facility security
                     improvements
             Nevada Washoe County,              2,250,000        2,250,000
                     transit improvements
           New York Babylon, Intermodal         1,250,000        1,250,000
                     Center
           New York Brookhaven Town,              225,000   ..............
                     elderly and disabled
                     buses and vans
           New York Brooklyn-Staten               800,000   ..............
                     Island, Mobility
                     Enhancement buses
           New York Broome County buses           900,000   ..............
                     and fare collection
                     equipment
           New York Broome County buses    ...............   \2\ 2,700,000
                     and related
                     equipment
           New York Buffalo, Auditorium         3,000,000        2,000,000
                     Intermodal Center
           New York Dutchess County, Loop         521,000          521,000
                     System buses
           New York East Hampton, elderly         100,000   ..............
                     and disabled buses
                     and vans
           New York Ithaca, TCAT bus            1,250,000        1,250,000
                     technology
                     improvements
           New York Long Beach central            750,000      \2\ 750,000
                     bus facility
           New York Long Island,CNG             1,250,000        1,250,000
                     transit vehicles and
                     facilities and bus
                     replacement
           New York Long Island, vehicles  ...............   \2\ 3,050,000
                     and facilities
           New York Mineola/Hicksville,         1,250,000        1,250,000
                     LIRR Intermodal
                     Centers
           New York Nassau County CNG           1,000,000   ..............
                     buses
           New York New York City Midtown       1,500,000   ..............
                     West Ferry Terminal
           New York New York, West 72nd         1,750,000        1,750,000
                     St. Intermodal
                     Station
           New York Niagara Frontier              500,000   ..............
                     Transportation
                     Authority Hublink
           New York Rensselaer intermodal       1,000,000        6,000,000
                     bus facility
           New York Riverhead, elderly            125,000   ..............
                     and disabled buses
                     and vans
           New York Rochester central bus       1,000,000   \2\ 12,500,000
                     facility
           New York Rome, Intermodal              400,000   ..............
                     Center
           New York Shelter Island,               100,000   ..............
                     elderly and disabled
                     buses and vans
           New York Smithtown, elderly            125,000   ..............
                     and disabled buses
                     and vans
           New York Southampton, elderly          125,000   ..............
                     and disabled buses
                     and vans
           New York Southold, elderly and         100,000   ..............
                     disabled buses and
                     vans
           New York Suffolk County,               100,000   ..............
                     elderly and disabled
                     buses and vans
           New York Syracuse CNG buses          2,000,000   ..............
                     and facilities
           New York Ulster County bus           1,000,000   ..............
                     facilities and
                     equipment
           New York Utica and Rome, bus           500,000   ..............
                     facilities and buses
           New York Utica, Union Station        2,100,000        2,100,000
           New York Westchester County,           979,000          979,000
                     Bee-Line transit
                     system fareboxes
           New York Westchester County,         1,000,000        1,000,000
                     Bee-Line transit
                     system shuttle buses
           New York Westchester County,         1,250,000        1,250,000
                     DOT articulated
                     buses
     North Carolina Greensboro,                 3,340,000        3,339,000
                     Multimodal Center
     North Carolina Greensboro, Transit         1,500,000        1,500,000
                     Authority buses
     North Carolina Greensboro, Transit           321,000   ..............
                     Authority small
                     buses and vans
     North Carolina Statewide buses and         5,000,000   ..............
                     bus facilities
       North Dakota Statewide buses and         2,000,000   ..............
                     bus-related
                     facilities
               Ohio Cleveland, Triskett           625,000          625,000
                     Garage bus
                     maintenance facility
               Ohio Dayton, Multimodal            625,000          625,000
                     Transportation
                     Center
               Ohio Statewide buses and        12,000,000   ..............
                     bus facilities
               Ohio Toledo Mud Hens               200,000   ..............
                     transit center study
           Oklahoma Oklahoma statewide          5,000,000        5,000,000
                     bus facilities and
                     buses
             Oregon Lane County, Bus            4,400,000        4,400,000
                     Rapid Transit
             Oregon Portland, Tri-Met           1,750,000        1,750,000
                     buses
             Oregon Rogue Valley transit        1,000,000   ..............
                     district bus
                     purchase
             Oregon Salem area mass             1,000,000   ..............
                     transit system buses
             Oregon Wilsonville, buses            400,000   ..............
                     and shelters
       Pennsylvania Allegheny County       ...............       1,500,000
                     buses
       Pennsylvania Altoona bus testing         3,000,000        3,000,000
                     facility (section
                     3009)
       Pennsylvania Altoona, Metro                842,000          842,000
                     Transit Authority
                     buses and transit
                     system improvements
       Pennsylvania Altoona, Metro                 80,000   ..............
                     Transit Authority
                     Logan Valley Mall
                     Suburban Transfer
                     center
       Pennsylvania Altoona, Metro                424,000   ..............
                     Transit Authority
                     Transit Center
                     improvements
       Pennsylvania Altoona, pedestrian           800,000   ..............
                     crossover
       Pennsylvania Armstrong County-Mid-         150,000          150,000
                     County, PA bus
                     facilities and buses
       Pennsylvania Beaver County bus           1,000,000   ..............
                     facility
       Pennsylvania Bradford County,            1,000,000   ..............
                     Endless Mountain
                     Transportation
                     Authority  buses
       Pennsylvania Cambria County, bus           575,000          575,000
                     facilities and buses
       Pennsylvania Centre Area,                1,250,000        1,250,000
                     Transportation
                     Authority buses
       Pennsylvania Chambersburg, Transit         300,000   ..............
                     Authority buses
       Pennsylvania Chambersburg, Transit       1,000,000   ..............
                     Authority Intermodal
                     Center
       Pennsylvania Chester County, Paoli       1,000,000        1,000,000
                     Transportation
                     Center
       Pennsylvania Crawford Area,                500,000   ..............
                     Transportation buses
       Pennsylvania Erie, Metropolitan          1,000,000        1,000,000
                     Transit Authority
                     buses
       Pennsylvania Fayette County,             1,270,000        1,270,000
                     Intermodal
                     Facilities and buses
       Pennsylvania Lackawanna County,            600,000          600,000
                     Transit System buses
       Pennsylvania Mercer County, buses          750,000   ..............
       Pennsylvania Monroe County,              1,000,000   ..............
                     Transportation
                     Authority buses
       Pennsylvania Philadelphia,               5,000,000        5,000,000
                     Frankford
                     Transportation
                     Center
       Pennsylvania Philadelphia,               1,250,000        1,250,000
                     Intermodal 30th
                     Street Station
       Pennsylvania Philadelphia,                 750,000   ..............
                     Regional
                     Transportation
                     System for Elderly
                     and Disabled
       Pennsylvania Reading, BARTA              1,750,000        1,750,000
                     Intermodal
                     Transportation
                     Facility
       Pennsylvania Red Rose, Transit Bus       1,000,000   ..............
                     Terminal
       Pennsylvania Robinson, Towne             1,500,000        1,500,000
                     Center Intermodal
                     Facility
       Pennsylvania Schuylkill County             220,000   ..............
                     buses
       Pennsylvania Somerset County, bus          175,000          175,000
                     facilities and buses
       Pennsylvania Towamencin Township,        1,500,000        1,500,000
                     Intermodal Bus
                     Transportation
                     Center
       Pennsylvania Washington County,            630,000          630,000
                     Intermodal
                     Facilities
       Pennsylvania Westmoreland County,          200,000          200,000
                     Intermodal Facility
       Pennsylvania Wilkes-Barre,               1,250,000        1,250,000
                     Intermodal Facility
       Pennsylvania Williamsport, Bus           1,200,000        1,200,000
                     Facility
        Puerto Rico San Juan Intermodal           950,000          600,000
                     access
       Rhode Island Providence, buses and       2,250,000        3,294,000
                     bus maintenance
                     facility
       Rhode Island Rhode Island Public         3,200,000   ..............
                     Transit Authority
                     buses
     South Carolina Columbia Bus                1,100,000   ..............
                     replacement
     South Carolina Pee Dee buses and           1,250,000   ..............
                     facilities
     South Carolina South Carolina              1,220,000        1,220,000
                     statewide Virtual
                     Transit Enterprise
     South Carolina Spartanburg buses and       1,000,000   ..............
                     facilities
       South Dakota Computerized bus              800,000   ..............
                     dispatch system,
                     radios, money boxes,
                     and lift
                     Replacements
       South Dakota Sioux Falls buses           1,000,000   ..............
       South Dakota South Dakota                3,500,000        1,500,000
                     statewide bus
                     facilities and buses
          Tennessee Statewide buses and         2,000,000   ..............
                     bus facilities
          Tennessee Chattanooga                [1,000,000]  ..............
                     alternatively fueled
                     buses
              Texas Austin,buses                2,250,000        1,250,000
              Texas Brazos Transit              1,500,000   ..............
                     Authority buses and
                     facilities
              Texas Corpus Christi              1,000,000   ..............
                     transit authority
                     buses and facilities
              Texas Dallas Area Rapid           2,750,000   ..............
                     transit buses
              Texas Fort Worth bus and          2,500,000   ..............
                     paratransit vehicle
                     project
              Texas Galveston buses and         1,000,000   ..............
                     bus facilities
              Texas Texas statewide small       6,000,000        4,500,000
                     urban and rural
                     buses
               Utah Ogden,Intermodal              800,000          800,000
                     Center
               Utah Utah Hybrid electric        1,500,000   ..............
                     vehicle bus purchase
               Utah Utah Transit                1,500,000        1,500,000
                     Authority,
                     Intermodal
                     Facilities
               Utah Utah Transit                6,500,000        6,500,000
                     Authority/Park City
                     Transit, buses
            Vermont Brattleboro Union           2,500,000   ..............
                     Station multimodal
                     center
            Vermont Burlington multimodal       1,000,000   ..............
                     center
            Vermont Deerfield Valley              500,000   ..............
                     Transit authority
           Virginia Alexandria, bus             1,000,000        1,000,000
                     maintenance facility
                     and Crystal City
                     canopy project
           Virginia Alexandria, King            1,100,000   ..............
                     Street Station
                     access
           Virginia Harrisonburg, buses           200,000   ..............
           Virginia Lynchburg, buses              200,000   ..............
           Virginia Richmond, GRTC bus          1,250,000        1,250,000
                     maintenance facility
           Virginia Roanoke, buses                200,000   ..............
           Virginia Statewide buses and        10,000,000   ..............
                     bus facilities
           Virginia Falls Church electric        [400,000]  ..............
                     bus and bus
                     facilities
           Virginia Franconia-Springfield        [650,000]  ..............
                     bus and bus
                     facilities
           Virginia Manassas Transit             [280,000]  ..............
                     Depot park and ride
                     lot expansion
           Virginia Potomac and                [1,600,000]  ..............
                     Rappahannock
                     Transportation
                     Commission fleet
                     Replacement
           Virginia Richmond Main Street       [2,000,000]  ..............
                     Station
           Virginia Stringfellow Road/         [1,000,000]  ..............
                     Interstate 66 park
                     and ride lot
                     improvements
           Virginia Warrenton Circuit             [25,000]  ..............
                     Rider
         Washington Anacortes ferry               500,000   ..............
                     terminal information
                     system
         Washington Ben Franklin transit        1,000,000   ..............
                     operating facility
         Washington Bremerton                   1,000,000   ..............
                     transportation
                     center
         Washington Central Puget Sound         8,000,000   ..............
                     Seattle bus program
         Washington Chelan-Douglas                900,000   ..............
                     multimodal center
         Washington Everett, Multimodal         1,950,000        1,950,000
                     Transportation
                     Center
         Washington Everett, Multimodal    ...............   \2\ 1,000,000
                     Transportation
                     Center
         Washington Grant County, buses           600,000   ..............
                     and vans
     Washington \1\ Mount Vernon, buses         1,750,000        1,750,000
                     and bus related
                     facilities
         Washington Port Angeles Center         1,000,000   ..............
         Washington Seattle, Intermodal         1,250,000        1,250,000
                     Transportation
                     Terminal
         Washington Snohomish County,           1,000,000   ..............
                     Community transit
                     buses
         Washington Tacoma Dome, buses          1,750,000   ..............
                     and bus facilities
         Washington Thurston County             1,000,000   ..............
                     intercity buses
         Washington Vancouver Clark             1,000,000   ..............
                     County (C-Tran) bus
                     facilities
          Wisconsin Milwaukee                   4,000,000        6,000,000
                     County,buses
          Wisconsin Wisconsin statewide        12,875,000       12,000,000
                     bus facilities and
                     buses
          Wisconsin Appleton, Green Bay,       [2,075,000]  ..............
                     Shawano, Menominee
                     Tribe and Oneida
                     Tribe
          Wisconsin LaCrosse, Onalaska,        [1,000,000]  ..............
                     Prairie Du Chien,
                     Rice Lake, Viroqua
                     and Ho Chuck Nation
          Wisconsin Ashland, Chippewa            [300,000]  ..............
                     Falls, Eau Claire,
                     Ladysmith,
                     Marshfield,
                     Rhielander, Rusk
                     County
          Wisconsin Milwaukee intermodal       [1,000,000]  ..............
                     facility
                     rehabilitation
          Wisconsin Waukesha transit             [500,000]  ..............
                     center
      West Virginia Huntington,                 8,000,000       12,000,000
                     Intermodal Facility
      West Virginia West Virginia               6,500,000        5,000,000
                     statewide Intermodal
                     Facility and buses
                                          ----------------------------------
                          Total               501,400,000   \2\ 273,890,00
                                                                         0
    ------------------------------------------------------------------------
                    \1\ Amendments included in fiscal year Senate passed
                      supplemental (S-544).
                    \2\ These projects authorized in TEA-21 for non-
                      guaranteed funds total $20,000,000.

                                   new starts
        Question. Please provide a brief legislative history and
    description of the Full Funding Grant agreement funding mechanism.
        Answer. As part of its 1978 ``Policy on Rail Transit'' [43 FR
    942830 (3/7/78)], FTA established the concept of a contract providing
    for a multi-year commitment of Federal funding for new starts
    projects--the Full Funding Grant Agreement (FFGA). The concept was
    simple--FTA's commitment of funds was exchanged for a commitment by the
    grantee to complete the project and bear all expenses beyond those
    originally estimated as necessary for completion. In addition to
    limiting total Federal participation in any one project (thereby
    increasing the availability of funds for other projects), an FFGA
    benefited both parties by establishing a firm date for project
    completion; providing a mechanism for obligating outyear funds;
    allowing the project to advance without jeopardizing future Federal
    funding; and developing accurate cost projections for individual
    projects.
        By the late 1980's, FTA (then UMTA) recognized the need to ensure a
    more uniform approach in developing FFGA's, and administering the
    projects under them, to achieve greater consistency and equity in the
    new starts program. In particular, FTA saw the need to produce explicit
    guidance to project sponsors for preparing their applications for
    funding under FFGA's. Thus, in 1990, FTA prepared a draft model FFGA
    and an accompanying circular. This draft agreement was used in
    negotiating FFGA's during the last years of the Surface Transportation
    and Uniform Relocation Assistance Act of 1987 (STURAA).
        Congress in turn consulted this draft model and circular in
    devising several of the provisions under the Intermodal Surface
    Transportation Efficiency Act of 1991 (ISTEA). In Title III of ISTEA--
    the Federal Transit Act Amendments of 1991--Congress expressly
    authorized FTA to enter into FFGA's which: (1) establish the terms and
    conditions of Federal financial participation in major capital
    investment projects (``new starts''); (2) establish the maximum amounts
    of Federal financial assistance for those projects; (3) cover the
    periods of time to completion of those projects, including any periods
    that may extend beyond the period of the authorization; and (4)
    facilitate timely and efficient management of those projects in
    accordance with Federal law. In response to these and other changes in
    the new starts program under ISTEA, FTA issued Circular 5200.1 (the
    ``FFGA Circular'') in final form on July 2, 1993.
        Throughout most of the 1990's, the FFGA remained FTA's primary new
    starts management tool. That role was strengthened by the
    Transportation Equity Act for the 21st Century (TEA-21), which for the
    first time established the FFGA in law as the means by which Federal
    new starts funding would be provided. Section 3009(e) of TEA-21,
    codified at 49 U.S.C. Sec. 5309(e)(7), states that ``a project financed
    under this subsection shall be carried out through a full funding grant
    agreement,'' and that the decision to enter into an FFGA must be based
    on the results of the statutory project evaluation process established
    by TEA-21.
        Though it has evolved and increased in importance, the core purpose
    of an FFGA remains the same: it represents an agreement between FTA and
    a project's sponsor(s) that defines the project, including cost and
    schedule; commits to a maximum level of Federal financial assistance
    (subject to appropriations); covers the period of time for completion
    of the project; and helps to manage the project in accordance with
    Federal law. It assures the grantee of predictable Federal financial
    support while placing a ceiling on the amount of that support.
        Question. Please describe each step that a transit authority would
    undertake in analyzing the need for a new fixed guideway transit
    system, designing and engineering such a system, securing local and
    Federal funds for the system, and constructing such a system. For each
    step of this process, give a general range of time needed and
    approximate costs. (For construction costs, base estimates on a per
    mile basis, for different types of systems, e.g., rapid transit bus,
    light rail, heavy rail, etc.)
        Answer. To be eligible for New Starts funding, candidate fixed
    guideway projects must follow the New Starts Planning and Project
    Development Process. There are three specific stages to this process:
        1. Candidate New Starts projects must result from an alternatives
    analysis (also known as major investment study or multimodal corridor
    analysis) study which evaluates several modal and alignment options for
    addressing mobility needs in a given corridor. This alternatives
    analysis is intended to provide information to local officials on the
    benefits, costs, and impacts of alternative transportation investments.
    Potential local funding sources for implementing and operating the
    investment should be identified and studied during alternatives
    analysis. At local discretion, environmental analysis and documentation
    required by of the National Environmental Policy Act of 1969 (NEPA) may
    be initiated. Alternatives analysis is considered complete when a
    locally preferred alternative (LPA) is selected by local and regional
    decisionmakers and adopted by the metropolitan planning organization
    (MPO) into the financially-constrained metropolitan transportation
    plan. At this point, the local project sponsor may submit to FTA the
    LPA's New Starts project justification and local financial commitment
    criteria and request FTA's approval to enter into the preliminary
    engineering phase of project development. FTA bases its approval on how
    the proposed project measures up against the New Starts criteria.
        The length of time and cost for undertaking alternatives analysis
    depends on several factors, including the magnitude of the
    transportation problem to be solved; the length of the study corridor;
    the number of alternatives to be considered; the level of public
    involvement in the study; whether or not NEPA is initiated; and several
    other variables. The table below summarizes the range of time periods
    typically required to complete alternatives analysis.
        2. During the preliminary engineering phase of project development,
    local project sponsors refine the design of the proposal, taking into
    consideration all reasonable design alternatives. Preliminary
    engineering results in estimates of project costs, benefits, and
    impacts for which there is a much higher degree of confidence. In
    addition, requirements must be met, project management plans are
    finalized, and local funding sources are committed to the project (if
    not previously committed). Preliminary engineering for a New Starts
    project is considered complete when FTA has issued a Record of Decision
    (ROD) or Finding of No Significant Impact (FONSI), as required by NEPA;
    when sufficient engineering and design of the project is complete
    (typically 30 percent of design activities); and when the local project
    sponsor has demonstrated to FTA its technical capability to implement
    and operate the proposed investment.
        Like alternatives analysis, the length of time and costs for
    undertaking preliminary engineering depends on a number of factors. In
    addition to those variables mentioned above, the cost and length of
    preliminary engineering is contingent upon the alignment and technology
    of the proposed project; corridor geography and land use; degree of
    environmental impacts, and the amount of NEPA analysis and
    documentation undertaken. Finally, securing local financial commitments
    may delay projects in preliminary engineering from advancing into the
    next stage of project development. The table below summarizes a range
    of time periods and costs for typical preliminary engineering efforts.
        3. Projects which have completed preliminary engineering must
    request FTA approval to enter the final design stage of project
    development. Like the approval to enter into PE, FTA's approval to
    enter final design is based upon a review and evaluation of the
    project's New Starts criteria. Final design is the last phase of
    project development, and includes right-of-way acquisition, utility
    relocation, and the preparation of final construction plans (including
    construction management plans), detailed specifications, construction
    cost estimates, and bid documents. Projects which have completed final
    design advance into construction. Contingent on the amount of New
    Starts funding available and the demand for funding in a given year,
    FTA may enter into a Full Funding Grant Agreement with projects which
    are rated as ``Highly Recommended'' or ``Recommended,'' based on the
    New Starts criteria.
        The length of time and costs for undertaking final design depends
    on a number of factors, depending largely on the level of right-of-way
    acquisition, utility relocation, and other mitigation factors. For
    turnkey projects, final design is concurrent with the construction, and
    final design will last as long as the construction effort. The table
    below summarizes a range of time periods and costs for typical final
    design efforts.
        The figures included in the table below are based on a review of
    several current and completed projects in the various stages of
    planning and project development.

    ------------------------------------------------------------------------
                                                            Cost (percent of
     Planning Project Development       Length of Time       total project
                 Phase                                       capital costs)
    ------------------------------------------------------------------------
    Alternative Analysis..........  1-5 years............  Varies widely.
    Preliminary Engineering.......  6 months-3 years.....  3-6 percent.
    Final Design..................  1-3 years............  6-10 percent.
    ------------------------------------------------------------------------

         The following capital cost estimates, provided in the chart below,
    are based upon the range of estimates of projects currently undergoing
    Preliminary Engineering and Final Design in the New Starts Pipeline.
    These are not actual construction costs.

                         AVERAGE COST PER MILE PER MODE
                                  [In millions]
    ------------------------------------------------------------------------
                                                                 Range of
                              Mode                             Capital Cost
                                                                 Per Mile
    ------------------------------------------------------------------------
    Busway and Bus Rapid Transit............................         $10-$40
    Commuter Rail...........................................            5-10
    Diesel Multiple Unit....................................           10-25
    Heavy Rail..............................................         100-300
    Light Rail..............................................           25-50
    Trolley.................................................           10-25
    ------------------------------------------------------------------------

        Note that there is a wide variation in capital costs because
    projects require different environmental mitigation efforts, have
    different right-of-way costs, equipment and station needs, above and
    below grade alignments, and other variables which affect capital costs.
        Question. Please provide a table broken out alphabetically by state
    that shows all new start projects that received appropriated federal
    funds in fiscal year 1999, with a federal funding history for each
    project back to the first year of federal funding, and a total for each
    project.
        Answer. The requested table follows:

                         FEDERAL TRANSIT ADMINISTRATION--MAJOR CAPITAL INVESTMENTS [NEW STARTS]--PROJECTS WITH FISCAL YEAR 1999 EARMARKS
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    Annual Earmarks
                                    --------------------------------------------------------------------------------------------------------------
                                                                                     Fiscal year--
    State     Geographic Location   --------------------------------------------------------------------------------------------------------------   Total
                                                                                    1993                                                            earmarks
                                      1991 and     1992       1993       1994      reall.      1995       1996       1997       1998       1999
                                       prior                                      earmarks
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    AK/HI Alaska or Hawaii Ferry   .........  .........  .........  .........  .........  .........  .........  .........  .........     $10.32     $10.32
           Projects
       AL Birmingham--Fixed        .........  .........  .........  .........  .........  .........  .........  .........  .........       0.99       0.99
           Guideway
       AR Little Rock--River Rail  .........  .........  .........  .........  .........  .........  .........      $1.99  .........       0.99       2.98
           Project
       AZ Phoenix--Metropolitan    .........  .........  .........  .........  .........  .........  .........  .........      $3.99       4.96       8.95
           Area Transit
                                  ==========================================================================================================================
       CA San Diego--Mission       .........  .........  .........  .........  .........  .........  .........  .........       1.00       1.49       2.49
           Valley--East LRT
       CA San Diego--Mid-Coast         $0.40      $1.05  .........  .........  .........  .........  .........       1.49       1.50       1.99       6.42
       CA San Diego--Oceanside-    .........  .........  .........  .........  .........  .........  .........  .........       2.99       2.98       5.97
           Escondido LR Project
       CA Los Angeles--MOS-3       .........  .........     $59.55     $99.38     $34.05    $163.76     $83.98      69.51      61.30      37.72     609.25
       CA Los Angeles--East Side   .........  .........  .........  .........  .........  .........  .........  .........  .........       7.94       7.94
           & Mid-City projects
       CA Orange County--          .........  .........  .........  .........  .........  .........  .........       2.98       1.99       2.48       7.46
           Fullerton-Irvine
           Project
       CA Riverside County, CA--   .........  .........  .........  .........  .........  .........  .........  .........  .........       0.50       0.50
           San Jacinto Branch
       CA San Bernardino           .........  .........  .........  .........  .........  .........  .........  .........       1.00       0.99       1.99
           Metrolink Project
       CA San Francisco Bay Area-- .........      22.50      18.25      14.75  .........  .........       1.11      27.31      29.80      39.70     153.42
           BART to the Airport
       CA San Jose--Tasman West    .........      34.77      25.97      13.24  .........      20.00       8.77  .........      21.33      26.80     150.88
           LRT
       CA Sacramento--South LRT    .........  .........       0.99       0.99  .........  .........       1.98       5.96      20.23      23.31      53.46
           Extension
                                  --------------------------------------------------------------------------------------------------------------------------
                Subtotal--CALIFOR  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........     999.77
                 NIA
                                  ==========================================================================================================================
       CO Denver--Southwest LRT    .........  .........  .........  .........  .........  .........  .........       2.83      22.93      39.70      65.46
           Extension
       CO Denver--Southeast        .........  .........  .........  .........  .........  .........  .........  .........  .........       0.50       0.50
           Multimodal Corridor
       CO Colorado--North Front    .........  .........  .........  .........  .........  .........  .........  .........  .........       0.50       0.50
           Corridor Feasibility
           Study
                                  --------------------------------------------------------------------------------------------------------------------------
                Subtotal--COLORAD  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........      66.45
                 O
                                  ==========================================================================================================================
       CT Hartford--Light Rail     .........  .........  .........  .........  .........  .........  .........  .........  .........       1.49       1.49
           Project
       CT Hartford--Old Saybrook   .........  .........  .........  .........  .........  .........  .........  .........  .........       0.50       0.50
           Project
       CT New London--Waterfront   .........  .........  .........  .........  .........  .........  .........  .........  .........       0.50       0.50
           Access Project
       CT Stamford, CT--Fixed      .........  .........  .........  .........  .........  .........  .........  .........  .........       0.99       0.99
           Guideway Connector
                                  --------------------------------------------------------------------------------------------------------------------------
                Subtotal--CONNECT  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........       3.47
                 ICUT
                                  ==========================================================================================================================
       FL Ft. Lauderdale--Tri-     .........  .........       4.64       9.93  .........       9.93       9.88       8.94       7.97       3.97      55.26
           County Commuter Rail
       FL Orlando--I-4 LRT         .........  .........  .........  .........  .........  .........  .........       1.99      31.70      17.37      51.06
           Project
       FL Miami--North 27th Ave    .........  .........  .........  .........  .........       0.99       1.98       0.99       4.98       2.98      11.92
       FL Miami--East/West         .........  .........  .........  .........  .........  .........  .........       1.49       4.98       2.98       9.45
           Corridor Project
       FL Miami--Palmetto          .........  .........       0.33  .........  .........  .........  .........       6.40  .........  \1\ 10.60      17.33
           Extension
       FL Tampa Bay Regional Rail  .........  .........  .........  .........  .........       0.49       0.49       1.99       1.00       0.99       4.96
                                  --------------------------------------------------------------------------------------------------------------------------
                Subtotal--FLORIDA  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........     149.99
                                  ==========================================================================================================================
       GA Atlanta--Dunwoody--Nort      10.00  .........      29.46  .........  .........  .........      60.27      63.96      44.46      51.72     259.87
           h Springs
       GA Atlanta--DeKalb County   .........  .........  .........  .........  .........  .........  .........       0.66       1.00       0.99       2.65
           Light Rail Project
       GA Savannah--Water taxi     .........  .........  .........  .........  .........  .........  .........  .........  .........       0.25       0.25
                                  --------------------------------------------------------------------------------------------------------------------------
                Subtotal--GEORGIA  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........     262.76
                                  ==========================================================================================================================
       HI Honolulu--Major          .........  .........  .........  .........  .........  .........  .........  .........  .........       2.98       2.98
           Investment Analysis of
           Transit Alt
       IA Sioux City--Micro Rail   .........  .........  .........  .........  .........  .........  .........  .........  .........       0.25       0.25
           Trolley System
                                  ==========================================================================================================================
       IL St. Louis--St. Clair          4.45       2.05       1.99  .........  .........       5.95       1.98      31.77      29.90      34.74     112.83
           LRT Extension
       IL Chicago--Ravenswood &    .........  .........  .........  .........  .........  .........  .........  .........  .........       2.98       2.98
           Douglas Br. Lines
           Projs
       IL Chicago--Metra Com.      .........  .........  .........  .........  .........  .........  .........  .........  .........       5.96       5.96
           Rail Exts. & Upgrades
           Projs
                                  --------------------------------------------------------------------------------------------------------------------------
                Subtotal--ILLINOI  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........     124.99
                 S
                                  ==========================================================================================================================
       IN Indiana--Northern        .........  .........  .........  .........  .........  .........  .........       0.50       3.99       2.98       7.46
           Indiana Commuter Rail
       KS KC Area--Johnson Cnty,   .........  .........  .........  .........  .........  .........  .........  .........  .........       0.99       0.99
           KS--I-35 Commuter Rail
                                  ==========================================================================================================================
       LA New Orleans--Canal       .........  .........  .........       3.57  .........       9.93       4.94       7.94       5.98      21.84      54.20
           Street LRT
       LA New Orleans--Desire      .........  .........  .........  .........  .........  .........  .........       1.99       1.99       1.99       5.97
           Streetcar Project
                                  --------------------------------------------------------------------------------------------------------------------------
                Subtotal--LOUSIAN  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........      68.62
                 A
                                  ==========================================================================================================================
       MA Boston--S. Piers         .........      10.75      37.96       9.93      10.00      23.82      19.95      29.79      46.10      53.58     241.88
           Transitway--Phase 1
           (MOS-2)
       MA Boston--NS-SS Link       .........       0.25  .........  .........  .........  .........  .........  .........  .........       0.50       0.75
       MA Boston Metropolitan      .........  .........  .........  .........  .........       1.09  .........  .........       1.00       0.74       2.83
           Urban Ring
       MA Boston--North Shore      .........  .........  .........  .........  .........  .........  .........  .........  .........       0.99       0.99
           Corridor Project
                                  --------------------------------------------------------------------------------------------------------------------------
                Subtotal--MASSACH  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........     246.45
                 USETTS
                                  ==========================================================================================================================
       MD Maryland--MARC System-   .........  .........       9.93      23.32  .........      13.90       9.88      32.96      30.90      16.91     137.80
           wide Improvements
       MD Baltimore--Double        .........  .........  .........  .........  .........  .........  .........  .........  .........       0.99       0.99
           Tracking Project
       MD Baltimore--Central       .........  .........  .........  .........  .........  .........  .........  .........  .........       0.50       0.50
           Downtown Transit Alt.
           MIS
       MD Washington, DC/MD--      .........  .........  .........  .........  .........  .........  .........  .........  .........       0.99       0.99
           Largo Extension
       MD Washington, DC/MD--      .........  .........  .........  .........  .........  .........  .........  .........  .........       0.99       0.99
           Route 5 Corridor
                                  --------------------------------------------------------------------------------------------------------------------------
                Subtotal--MARYLAN  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........     141.28
                 D
                                  ==========================================================================================================================
       MI Detroit (SE Michigan)    .........  .........  .........  .........  .........  .........  .........  .........  .........       0.20       0.20
           Commuter Rail Viab.
           Study
       MN Twin Cities--Transitway  .........  .........  .........  .........  .........  .........  .........  .........      11.96      16.87      28.83
           [Hiawatha] Project
                                  ==========================================================================================================================
       MO Kansas City--Commuter    .........  .........  .........  .........  .........  .........  .........  .........  .........       0.50       0.50
           Rail Study
       MO Kansas City--Jeff.       .........  .........  .........  .........  .........  .........  .........  .........  .........       0.50       0.50
           City--StL. Commuter
           Rail Project
                                  --------------------------------------------------------------------------------------------------------------------------
                Subtotal--MISSOUR  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........       0.99
                 I
                                  ==========================================================================================================================
       NC Raleigh-Durham--         .........  .........  .........  .........  .........  .........  .........       1.99      11.96       9.93      23.88
           Research Triangle
           Transit Plan
       NC Charlotte--South         .........  .........  .........  .........  .........  .........  .........  .........       1.00       2.98       3.98
           Corridor Transitway
           Project
                                  --------------------------------------------------------------------------------------------------------------------------
                Subtotal--NORTH    .........  .........  .........  .........  .........  .........  .........  .........  .........  .........      27.86
                 CAROLINA
                                  ==========================================================================================================================
       NE Omaha--Trolley System    .........  .........  .........  .........  .........  .........  .........  .........  .........       0.99       0.99
                                  ==========================================================================================================================
       NJ New Jersey Urban Core--  .........  .........      21.86      16.74  .........      50.49  .........       9.93      59.81      69.48     228.30
           Hudson-Bergen LRT
       NJ New Jersey Urban Core--  .........  .........  .........  .........  .........  .........  .........  .........  .........       5.96       5.96
           Newark--Rail Link
       NJ New Jersey--West         .........  .........  .........  .........  .........  .........  .........       0.50  .........       0.99       1.49
           Trenton--Commuter Rail
                                  --------------------------------------------------------------------------------------------------------------------------
                Subtotal--NEW      .........  .........  .........  .........  .........  .........  .........  .........  .........  .........     235.75
                 JERSEY
                                  ==========================================================================================================================
       NM Albuquerque--Light Rail  .........  .........  .........  .........  .........  .........  .........  .........  .........       4.96       4.96
           Project
       NV Las Vegas Clark Cnty--   .........  .........  .........  .........  .........  .........  .........  .........       4.98       3.97       8.95
           Fixed Guideway Project
       NY New York--East Side      .........  .........  .........  .........  .........  .........  .........  .........      19.94      23.82      43.76
           Access (LIRR to GCT)
                                  ==========================================================================================================================
       OH Cleveland--Euclid Ave         4.73       1.00  .........       0.79  .........  .........  .........  .........  .........       1.99       8.51
           Corridor/Berea Ext
       OH Cincinnati--Northeast    .........  .........  .........       1.34  .........       1.19       0.99       2.98       0.50       1.79       8.78
           Corridor
       OH Cleveland--Berea         .........  .........  .........  .........  .........  .........  .........  .........       0.70       0.99       1.69
           Extension to Airport
       OH Dayton--Light Rail       .........  .........  .........  .........  .........  .........  .........  .........  .........       0.99       0.99
           Study
       OH Ohio--Canton-Akron-      .........  .........  .........       0.99  .........  .........       4.20       3.48       1.99       2.18      12.85
           Cleveland Commuter
           Rail
       OH Ohio--Northeast          .........       0.80  .........  .........  .........  .........  .........  .........  .........       0.50       1.30
           Commuter Rail
       OR Portland--Westside/           1.00      13.31      67.49      82.87      10.38      89.62     128.58     137.04      63.20      25.53     619.02
           Hillsboro Extension
       OR Portland--South/North    .........  .........  .........  .........  .........  .........  .........       5.96  .........  .........       5.96
           Extension
                                  ==========================================================================================================================
       PA Pittsburgh--Stage II     .........  .........  .........  .........  .........  .........  .........  .........  .........       3.97       3.97
           LRT Reconstruction
       PA Harrisburg--Corridor     .........  .........  .........  .........  .........  .........  .........  .........  .........       0.99       0.99
           One Project
       PA Philadelphia--Cross      .........       0.51       0.69  .........  .........  .........  .........  .........  .........       0.99       2.19
           County Metro Study
       PA Philadelphia--Schuylkil  .........  .........  .........  .........  .........  .........  .........  .........  .........       2.98       2.98
           l Valley Metro Project
       PA Pittsburgh--North Shore  .........  .........  .........  .........  .........  .........  .........  .........  .........       0.99       0.99
           CBD Transit Options
           MIS
                                  --------------------------------------------------------------------------------------------------------------------------
                Subtotal--PENNSYL  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........      11.13
                 VANIA
                                  ==========================================================================================================================
       PR San Juan--Tren Urbano    .........  .........  .........  .........  .........       4.96       7.41       6.06      14.95      19.85      53.23
           Phase I
       SC Charleston--Monobeam     .........  .........  .........  .........  .........  .........  .........  .........       1.50       2.18       3.68
           Rail Project
                                  ==========================================================================================================================
       TN Memphis--Regional Rail   .........  .........  .........       0.50  .........  .........       1.23       3.02       1.00       2.18       7.93
       TN Knoxville--Electric      .........  .........  .........  .........  .........  .........  .........  .........  .........       1.49       1.49
           Transit Project
       TN Nashville--Regional      .........  .........  .........  .........  .........  .........  .........  .........  .........       0.99       0.99
           Commuter Rail Project
                                  --------------------------------------------------------------------------------------------------------------------------
                Subtotal--TENNESS  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........      10.41
                 EE
                                  ==========================================================================================================================
       TX Dallas--RAILTRAN         .........       2.48  .........  .........  .........       2.98       5.93      15.14       7.97      11.91      46.41
       TX Houston--Regional Bus       146.07      15.36      33.75      38.71       1.00      29.77      22.36      40.31      50.94      59.23     437.50
       TX Dallas--North Central    .........  .........  .........  .........  .........       2.48       2.96      10.92      10.96      15.88      43.20
       TX Austin--Capital Metro    .........  .........  .........  .........  .........  .........  .........  .........       1.00       0.99       1.99
       TX Houston--Advanced        .........  .........  .........  .........  .........  .........  .........  .........       1.00       1.99       2.98
           Regional Bus Project
                                  --------------------------------------------------------------------------------------------------------------------------
                Subtotal--TEXAS    .........  .........  .........  .........  .........  .........  .........  .........  .........  .........     532.09
                                  ==========================================================================================================================
       UT Salt Lake City--South        15.52       2.56       2.98       2.98  .........       4.96       9.64      34.75      63.20      69.48     206.07
       UT Salt Lake City--Airport  .........  .........  .........  .........  .........  .........  .........  .........  .........       4.96       4.96
           to Uni. (West-East)
           LRT
                                  --------------------------------------------------------------------------------------------------------------------------
                Subtotal--UTAH     .........  .........  .........  .........  .........  .........  .........  .........  .........  .........     211.03
                                  ==========================================================================================================================
       VA Norfolk--Tidewater Rail  .........  .........  .........  .........  .........  .........  .........  .........       1.99       7.94       9.93
           Project
       VA Virginia Railway         .........  .........  .........  .........  .........  .........  .........       2.98       1.99       1.99       6.96
           Express--Commuter Rail
           Project
       VA Washington, DC/VA--      .........  .........  .........  .........  .........  .........  .........  .........  .........      16.87      16.87
           Dulles CorridorProject
                                  --------------------------------------------------------------------------------------------------------------------------
                Subtotal--VIRGINI  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........      33.77
                 A
                                  ==========================================================================================================================
       VT Burlington to Essex, VT  .........  .........  .........  .........  .........  .........  .........  .........       4.98       1.99       6.97
           Commuter Rail
                                  ==========================================================================================================================
       WA Seattle--Link LRT        .........  .........  .........  .........  .........  .........  .........       2.98       8.97       4.96      16.91
           Project
       WA Seattle--Sounder         .........  .........  .........  .........  .........  .........  .........  .........       8.97      40.69      49.66
           Commuter Rail Project
       WA Spokane, WA--Light Rail  .........  .........  .........  .........  .........  .........  .........  .........  .........       0.99       0.99
           Project
       WA Seattle (King County)--  .........  .........  .........  .........  .........  .........  .........  .........  .........       0.50       0.50
           Elliot Bay Water Taxi
                                  --------------------------------------------------------------------------------------------------------------------------
                Subtotal--WASHING  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........      75.03
                 TON
                                  ==========================================================================================================================
       WI Wisconsin--Ken.-Rac.-    .........  .........  .........  .........  .........  .........  .........  .........  .........       0.50       0.50
           Milw. Commuter Rail
       WV Morgantown, WV--         .........  .........  .........  .........  .........  .........  .........       4.21  .........       3.97       8.18
           Personal Rapid Transit
    --------------------------------------------------------------------------------------------------------------------------------------------------------
          \1\ In accordance with Congressional direction, deobligated Metromover funds are the source of the funds obligated to Miami's Palmetto Extension.

        Question. Please provide a table detailing by existing FFGA the
    amount of the FFGA, the actual amounts received through fiscal year
    1999, the Attachment 6 amounts through fiscal year 1999, any shortfalls
    or overages to date, the fiscal year 1999 enacted level, the fiscal
    year 2000 Attachment 6 amount, the amount of shortfall included in the
    fiscal year 2000 budget, and total fiscal year 2000 budget request.
        Answer. The following table provides the requested information on
    existing FFGAs.

                                                  ATLANTA, GA--NORTH LINE EXTENSION [DUNWOODY TO NORTH SPRINGS]
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                ORIGINAL FFGA    ACTUAL AMOUNTS/                                        SHORTFALL IN
                   FISCAL YEAR                    SCHEDULE      FISCAL YEAR 2000      REMAINING       SHORTFALL BY    FISCAL YEAR 2000       FISCAL YEAR
                                               [ATTACHMENT 6]    BUDGET REQUEST        BALANCE            YEAR         BUDGET REQUEST
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    PY Deob/Reob............................       $10,000,000       $10,000,000      $295,010,400  ................  ................  PY Deob/Reob.
        1993................................        18,729,384        29,457,400       276,281,016  ................  ................  1993.
        1994................................  ................  ................  ................  ................  ................  1994.
        1995................................        10,728,016  ................       265,553,000  ................  ................  1995.
        1996................................        42,410,000        41,900,252       223,652,748         -$509,748  ................  1996.
        1996................................  ................    \1\ 18,372,860       205,279,888        18,372,860  ................  1996.
        1997................................        66,820,000        63,960,604       141,319,284        -2,859,396  ................  1997.
        1998................................        52,110,000        44,455,750        96,863,534        -7,654,250  ................  1998.
        1999................................        52,110,000        51,721,925        45,141,609          -388,075  ................  1999.
        2000................................        52,103,000        45,141,609  ................  ................  ................  2000.
                                             ---------------------------------------------------------------------------------------------------------------
          TOTAL.............................       305,010,400       305,010,400  ................         6,961,391  ................  ....................
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ Deobligated funds added to the project.

                                                             BOSTON, MA--SOUTH BOSTON PIERS [MOS-2]
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                ORIGINAL FFGA    ACTUAL AMOUNTS/                                        SHORTFALL IN
                   FISCAL YEAR                    SCHEDULE      FISCAL YEAR 2000      REMAINING       SHORTFALL BY    FISCAL YEAR 2000       FISCAL YEAR
                                               [ATTACHMENT 6]    BUDGET REQUEST        BALANCE            YEAR         BUDGET REQUEST
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    1992....................................  ................       $10,750,000  ................  ................  ................  1992.
    1993....................................  ................        37,963,124  ................  ................  ................  1993.
    1994....................................  ................    \1\ 10,000,000  ................  ................  ................  1994.
    1994....................................       $48,713,124         9,925,000      $282,013,196  ................  ................  1994.
    1995....................................        43,745,000        23,820,000       238,268,196  ................  ................  1995.
    1996....................................        22,620,000        19,951,638       218,316,558        $2,668,362  ................  1996.
    1997....................................        53,720,000        29,790,686       188,525,872        23,929,314  ................  1997.
    1998....................................        53,983,334        46,100,413       142,425,459         7,882,921  ................  1998.
    1999....................................        53,983,334        53,580,975        88,844,484           402,359  ................  1999.
    2000....................................        53,961,528        53,961,528  ................  ................  ................  2000.
    2001....................................  ................  ................  ................  ................  ................  2001.
                                             ---------------------------------------------------------------------------------------------------------------
          TOTAL.............................       330,726,320       295,843,364  ................        34,882,956  ................  ....................
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ Fiscal year 1993 reallocated earmark.

    NOTE: Although the original FFGA Attachment 6 schedule concludes in fiscal year 2000, the project has an outstanding balance of $34.9 million,
      consisting entirely of shortfall.

                                                             DENVER, COLORADO--SW CORRIDOR EXTENSION
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                ORIGINAL FFGA    ACTUAL AMOUNTS/                                        SHORTFALL IN
                   FISCAL YEAR                    SCHEDULE      FISCAL YEAR 2000      REMAINING       SHORTFALL BY    FISCAL YEAR 2000       FISCAL YEAR
                                               [ATTACHMENT 6]    BUDGET REQUEST        BALANCE            YEAR         BUDGET REQUEST
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    1997....................................        $8,000,000        $2,831,040      $117,168,960        $5,168,960  ................  1997.
    1998....................................        25,000,000        22,925,610        94,243,350         2,074,390  ................  1998.
    1999....................................        40,000,000        39,702,110        54,541,240           297,890  ................  1999.
    2000....................................        35,000,000        35,000,000  ................  ................  ................  2000.
    2001....................................        12,000,000  ................  ................  ................  ................  2001.
                                             ---------------------------------------------------------------------------------------------------------------
          TOTAL.............................       120,000,000       100,458,760  ................         7,541,240  ................  ....................
    --------------------------------------------------------------------------------------------------------------------------------------------------------

                                                                 HOUSTON, TX--REGIONAL BUS PLAN
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                ORIGINAL FFGA    ACTUAL AMOUNTS/                                        SHORTFALL IN
                   FISCAL YEAR                    SCHEDULE      FISCAL YEAR 2000      REMAINING       SHORTFALL BY    FISCAL YEAR 2000       FISCAL YEAR
                                               [ATTACHMENT 6]    BUDGET REQUEST        BALANCE            YEAR         BUDGET REQUEST
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    1989....................................  ................       $49,750,000  ................  ................  ................  1989.
    1990....................................  ................        64,480,975  ................  ................  ................  1990.
    1991....................................  ................        31,840,000  ................  ................  ................  1991.
    1992....................................  ................        15,360,000  ................  ................  ................  1992.
    1993....................................      $195,000,000        33,569,025      $305,000,000  ................  ................  1993.
    1994....................................  ................    \1\ 39,883,475  ................  ................  ................  1994.
    1995....................................        69,658,475        29,775,000       235,341,525                $3  ................  1995.
    1996....................................        22,630,000        22,357,997       212,983,528           272,000  ................  1996.
    1997....................................        40,590,000        40,306,799       172,676,729           283,201  ................  1997.
    1998....................................        59,670,000        50,934,727       121,742,002         8,735,273  ................  1998.
    1999....................................        59,670,000        59,225,625        62,516,377           444,375  ................  1999.
    2000....................................        52,770,000    \2\ 62,516,377  ................  ................        $9,734,852  2000.
    2001....................................            11,525  ................  ................  ................  ................  2001.
                                             ---------------------------------------------------------------------------------------------------------------
          TOTAL.............................       500,000,000       500,000,000  ................  ................         9,734,852  ....................
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ Includes $1.0 million in fiscal year 1993 Reallocated earmark.
    \2\ Proposed fiscal year 2000 Budget amount includes shortfall ($9,734,852 and residual fiscal year 2001 Attachment 6 amount ($11,525).

                                                          LOS ANGELES, CA--MOS-3 [North Hollywood Only]
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                ORIGINAL FFGA    ACTUAL AMOUNTS/                                        SHORTFALL IN
                   FISCAL YEAR                    SCHEDULE      FISCAL YEAR 2000      REMAINING       SHORTFALL BY    FISCAL YEAR 2000       FISCAL YEAR
                                               [ATTACHMENT 6]    BUDGET REQUEST        BALANCE            YEAR         BUDGET REQUEST
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Pre-1997................................      $364,235,841      $364,235,841      $316,801,159  ................  ................  Pre-1997.
    1997....................................        69,511,602        69,511,602       247,289,557  ................  ................  1997.
    1998....................................        76,000,000        61,301,090       185,988,467       $14,698,910  ................  1998.
    1999....................................        62,000,000        37,717,000       148,271,467        24,283,000  ................  1999.
    2000....................................        50,000,000        50,000,000  ................  ................  ................  2000.
    2001....................................        50,000,000  ................  ................  ................  ................  2001.
    2002....................................         9,289,557  ................  ................  ................  ................  2002.
                                             ---------------------------------------------------------------------------------------------------------------
          TOTAL.............................       681,037,000       582,765,533  ................        38,981,910  ................  ....................
    --------------------------------------------------------------------------------------------------------------------------------------------------------

                                                     MARYLAND COMMUTER RAIL SYSTEM--SYSTEM-WIDE IMPROVEMENTS
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                ORIGINAL FFGA    ACTUAL AMOUNTS/                                        SHORTFALL IN
                   FISCAL YEAR                    SCHEDULE      FISCAL YEAR 2000      REMAINING       SHORTFALL BY    FISCAL YEAR 2000       FISCAL YEAR
                                               [ATTACHMENT 6]    BUDGET REQUEST        BALANCE            YEAR         BUDGET REQUEST
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    1995....................................       $13,895,000       $13,895,000       $91,356,373  ................  ................  1993.
    1996....................................  ................         9,879,805        81,476,568       +$9,879,805  ................  1996.
    1997....................................        50,000,000        32,959,424        48,517,144       +17,040,576  ................  1997.
    1998....................................        41,356,373        30,899,736        17,617,408       +10,456,637  ................  1998.
    1999....................................  ................        16,914,100           703,308       -16,914,100  ................  1999.
    2000....................................  ................           703,308  ................  ................          $703,308  1999.
                                             ---------------------------------------------------------------------------------------------------------------
          TOTAL.............................       105,251,373       105,251,373  ................  ................           703,308  ....................
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    NOTE: Project received appropriation in fiscal year 1996 although FFGA schedule did not include a fiscal year 1996 payment; however as subsequent
      appropriations were lower than FFGA schedule; the net shortfall was addressed by extending the FFGA payment schedule first to fiscal year 1999 and
      then to fiscal year 2000.

                                                          NORTHERN NEW JERSEY--HUDSON-BERGEN LRT SYSTEM
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                ORIGINAL FFGA    ACTUAL AMOUNTS/                                        SHORTFALL IN
                   FISCAL YEAR                    SCHEDULE      FISCAL YEAR 2000      REMAINING       SHORTFALL BY    FISCAL YEAR 2000       FISCAL YEAR
                                               [ATTACHMENT 6]    BUDGET REQUEST        BALANCE            YEAR         BUDGET REQUEST
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    1993....................................  ................       $21,860,000  ................  ................  ................  1993.
    1994....................................  ................        16,740,000  ................  ................  ................  1994.
    1995....................................  ................        50,488,750  ................  ................  ................  1995.
    1996....................................       $89,088,750  ................      $515,000,000  ................  ................  1996.
    1997....................................         9,930,229         9,930,229       505,069,771  ................  ................  1997.
    1998....................................        64,000,000        59,805,941       445,263,830        $4,194,059  ................  1998.
    1999....................................        70,000,000        69,478,700       375,785,130           521,300  ................  1999.
    2000....................................        99,000,000        99,000,000  ................  ................  ................  2000.
    2001....................................       121,000,000  ................  ................  ................  ................  2001.
    2002....................................       151,069,771  ................  ................  ................  ................  2002.
                                             ---------------------------------------------------------------------------------------------------------------
          TOTAL.............................       604,088,750       327,303,620  ................         4,715,359  ................  ....................
    --------------------------------------------------------------------------------------------------------------------------------------------------------

                                                              PORTLAND, OR--WESTSIDE-HILLSBORO LRT
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                ORIGINAL FFGA    ACTUAL AMOUNTS/                                        SHORTFALL IN
                   FISCAL YEAR                    SCHEDULE      FISCAL YEAR 2000      REMAINING       SHORTFALL BY    FISCAL YEAR 2000       FISCAL YEAR
                                               [ATTACHMENT 6]    BUDGET REQUEST        BALANCE            YEAR         BUDGET REQUEST
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    1992....................................       $14,305,000       $14,305,000      $615,755,336  ................  ................  1992.
    1993....................................        67,490,000        67,490,000       548,265,336  ................  ................  1993.
    1994....................................        10,380,300    \1\ 10,380,300       537,885,036  ................  ................  1994.
    1994....................................        82,873,750        82,873,750       455,011,286  ................  ................  1994.
    1995....................................        89,615,000        89,615,000       365,396,286  ................  ................  1995.
    1996....................................       128,575,779       128,575,779       236,820,507  ................  ................  1996.
    1997....................................       137,037,157       137,037,157        99,783,350  ................  ................  1997.
    1998....................................        74,065,336        63,194,945        36,588,405       $10,870,391  ................  1998.
    1999....................................        25,718,014        25,526,475        11,061,930           191,539  ................  1999.
    2000....................................  ................        11,061,930  ................  ................       $11,061,930  2000.
                                             ---------------------------------------------------------------------------------------------------------------
          TOTAL.............................       630,060,336       630,060,336  ................  ................        11,061,930  ....................
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ Fiscal year 1993 reallocated earmark.

                                                               SACRAMENTO, CA--SOUTH LRT EXTENSION
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                ORIGINAL FFGA    ACTUAL AMOUNTS/                                        SHORTFALL IN
                   FISCAL YEAR                    SCHEDULE      FISCAL YEAR 2000      REMAINING       SHORTFALL BY    FISCAL YEAR 2000       FISCAL YEAR
                                               [ATTACHMENT 6]    BUDGET REQUEST        BALANCE            YEAR         BUDGET REQUEST
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    1996....................................  ................        $1,975,961  ................  ................  ................  1996.
    1997....................................        $7,934,098         5,958,137      $103,265,902  ................  ................  1997.
    1998....................................        20,883,900        20,234,344        83,031,558          $649,556  ................  1998.
    1999....................................        23,480,000        23,305,140        59,726,418           174,860  ................  1999.
    2000....................................        25,000,000        25,000,000  ................  ................  ................  2000.
    2001....................................        33,902,002  ................  ................  ................  ................  2001.
                                             ---------------------------------------------------------------------------------------------------------------
          TOTAL.............................       111,200,000        76,473,582  ................           824,416  ................  ....................
    --------------------------------------------------------------------------------------------------------------------------------------------------------

                                                                  SALT LAKE CITY, UT--SOUTH LRT
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                ORIGINAL FFGA    ACTUAL AMOUNTS/                                        SHORTFALL IN
                   FISCAL YEAR                    SCHEDULE      FISCAL YEAR 2000      REMAINING       SHORTFALL BY    FISCAL YEAR 2000       FISCAL YEAR
                                               [ATTACHMENT 6]    BUDGET REQUEST        BALANCE            YEAR         BUDGET REQUEST
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    1993....................................       $12,500,000       $12,500,000      $224,893,530  ................  ................  1993.
    1994....................................  ................  ................  ................  ................  ................  1994.
    1995....................................         9,893,530         9,893,530       215,000,000  ................  ................  1995.
    1996....................................  ................         9,642,195       205,357,805       +$9,642,195  ................  1996.
    1997....................................        35,000,000        34,755,801       170,602,004          -244,199  ................  1997.
    1998....................................        50,000,000        63,194,945       107,407,059       +13,194,945  ................  1998.
    1999....................................        70,000,000        69,478,700        37,928,359          -521,300  ................  1999.
    2000....................................        60,000,000        37,928,359  ................  ................  ................  2000.
                                             ---------------------------------------------------------------------------------------------------------------
          TOTAL.............................       237,393,530       237,393,530  ................       +22,071,641  ................  ....................
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    NOTES: Project received appropriation in fiscal year 1996 although FFGA schedule did not include a fiscal year 1996 payment as well as $13.2 million
      over the FFGA amount in fiscal year 1998; consequently, the fiscal year 2000 budget request takes into account the fiscal year 1996 amount as well as
      the amount received over the FFGA amount in fiscal year 1998. The fiscal year 2000 budget request completes the FFGA funding schedule.

                                                                 SAN FRANCISCO, CA--BART TO SFO
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                ORIGINAL FFGA    ACTUAL AMOUNTS/                                        SHORTFALL IN
                   FISCAL YEAR                    SCHEDULE      FISCAL YEAR 2000      REMAINING       SHORTFALL BY    FISCAL YEAR 2000       FISCAL YEAR
                                               [ATTACHMENT 6]    BUDGET REQUEST        BALANCE            YEAR         BUDGET REQUEST
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    1992....................................       $22,500,000       $22,500,000      $727,500,000  ................  ................  1992.
    1993....................................  ................        18,247,871  ................  ................  ................  1993.
    1994....................................  ................        14,752,129  ................  ................  ................  1994.
    1995....................................        33,000,000  ................       694,500,000  ................  ................  1995.
    1996....................................  ................         1,115,051  ................  ................  ................  1996.
    1997....................................        28,423,180        27,308,129       666,076,820  ................  ................  1997.
    1998....................................        56,394,669        29,803,294       636,273,526       $26,591,375  ................  1998.
    1999....................................        74,000,000        39,702,110       596,571,416        34,297,890  ................  1999.
    2000....................................        84,000,000        84,000,000  ................  ................  ................  2000.
    2001....................................        80,000,000  ................  ................  ................  ................  2001.
    2002....................................        80,605,331  ................  ................  ................  ................  2002.
    2003....................................       100,000,000  ................  ................  ................  ................  2003.
    2004....................................       100,000,000  ................  ................  ................  ................  2004.
    2005....................................        91,076,820  ................  ................  ................  ................  2005.
                                             ---------------------------------------------------------------------------------------------------------------
          TOTAL.............................       750,000,000       237,428,584  ................        60,889,265  ................  ....................
    --------------------------------------------------------------------------------------------------------------------------------------------------------

                                                               SAN JUAN, PUERTO RICO--TREN URBANO
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                ORIGINAL FFGA    ACTUAL AMOUNTS/                                        SHORTFALL IN
                   FISCAL YEAR                    SCHEDULE      FISCAL YEAR 2000      REMAINING       SHORTFALL BY    FISCAL YEAR 2000       FISCAL YEAR
                                               [ATTACHMENT 6]    BUDGET REQUEST        BALANCE            YEAR         BUDGET REQUEST
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    1996....................................        $7,409,854        $7,409,854      $300,000,000  ................  ................  1996.
    1997....................................        10,000,000         6,058,367       293,941,633        $3,941,633  ................  1997.
    1998....................................        30,000,000        14,951,485       278,990,148        15,048,515  ................  1998.
    1999....................................        60,000,000        19,851,055       259,139,093        40,148,945  ................  1999.
    2000....................................        82,000,000        82,000,000  ................  ................  ................  2000.
    2001....................................       118,000,000  ................  ................  ................  ................  2001.
                                             ---------------------------------------------------------------------------------------------------------------
          TOTALS............................       307,409,854       130,270,761  ................        59,139,093  ................  ....................
    --------------------------------------------------------------------------------------------------------------------------------------------------------

                                                   SAN JOSE, CA [SANTA CLARA COUNTY]--TASMAN WEST LRT PROJECT
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                ORIGINAL FFGA    ACTUAL AMOUNTS/                                        SHORTFALL IN
                   FISCAL YEAR                    SCHEDULE      FISCAL YEAR 2000      REMAINING       SHORTFALL BY    FISCAL YEAR 2000       FISCAL YEAR
                                               [ATTACHMENT 6]    BUDGET REQUEST        BALANCE            YEAR         BUDGET REQUEST
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    1992....................................       $12,750,000       $34,740,000      $170,000,000  ................  ................  1992.
    1993....................................        48,000,000        26,010,000       122,000,000  ................  ................  1993.
    1994....................................  ................        13,236,371  ................  ................  ................  1994.
    1995....................................  ................        19,998,875  ................  ................  ................  1995.
    1996....................................        32,000,000         8,764,754        90,000,000  ................  ................  1996.
    1997....................................        10,000,000  ................        80,000,000  ................  ................  1997.
    1998....................................        25,000,000        21,330,786        58,669,214        $3,669,214  ................  1998.
    1999....................................        35,000,000        26,798,925        31,870,289         8,201,075  ................  1999.
    2000....................................        20,000,000        31,870,289  ................  ................       $11,870,289  2000.
                                             ---------------------------------------------------------------------------------------------------------------
          TOTAL.............................       182,750,000       182,750,000  ................  ................        11,870,289  ....................
    --------------------------------------------------------------------------------------------------------------------------------------------------------

                                                   ST. LOUIS, MO-IL--METROLINK EXTENSION--ST. CLAIR COUNTY, IL
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                ORIGINAL FFGA    ACTUAL AMOUNTS/                                        SHORTFALL IN
                   FISCAL YEAR                    SCHEDULE      FISCAL YEAR 2000      REMAINING       SHORTFALL BY    FISCAL YEAR 2000       FISCAL YEAR
                                               [ATTACHMENT 6]    BUDGET REQUEST        BALANCE            YEAR         BUDGET REQUEST
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    1995....................................  ................        $5,955,000  ................  ................  ................  1995.
    1996....................................        $7,930,961         1,975,961      $236,000,000  ................  ................  1996.
    1997....................................        31,776,732        31,776,732       204,223,268  ................  ................  1997.
    1998....................................        35,000,000        29,902,970       174,320,298        $5,097,030  ................  1998.
    1999....................................        35,000,000        34,739,350       139,580,948           260,650  ................  1999.
    2000....................................        50,000,000        50,000,000  ................  ................  ................  2000.
    2001....................................        60,000,000  ................  ................  ................  ................  2001.
    2002....................................        24,223,268  ................  ................  ................  ................  2002.
                                             ---------------------------------------------------------------------------------------------------------------
          TOTAL.............................       243,930,961       154,350,013  ................         5,357,680  ................  ....................
    --------------------------------------------------------------------------------------------------------------------------------------------------------

        Question. Please prepare a table that provides by project the
    capital cost, federal share (dollars and percentage) and local share
    (dollars and percentage) for each FFGA, those projects proposed for
    FFGA's in the budget request, and the fifty remaining projects that are
    furthest along in the planning and preliminary engineering process. Use
    estimates where necessary.
        Answer. The following table displays the requested information.
    Please note in the table for the column entitled GRANTEE ESTIMATED SEC.
    5309 SHARE, the amount listed for projects not covered by an FFGA is
    the grantee suggested Section 5309 level.

                                                        FEDERAL TRANSIT ADMINISTRATION NEW START PIPELINE
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          SECTION 5309 SHARE              LOCAL SHARE
     STATE     GEOGRAPHIC LOCATION                  PROJECT DESCRIPTION                  TOTAL COST  -------------------------------------------------------
                                                                                                       IN DOLLARS    AS PERCENT    IN DOLLARS    AS PERCENT
    --------------------------------------------------------------------------------------------------------------------------------------------------------
              Full Funding Grant
              Agreements (FFGA)
                     [14]

         CA Los Angeles            Metrorail--MOS-3 [North Hollywood]...............     $1,310.80       $681.00          52.0       $629.80          48.0
         CA Sacramento             South LRT Extension..............................        222.00        111.20          50.1        110.80          49.9
         CA San Francisco          BART Extension to the SFO Airport................      1,513.20        750.00          49.6        763.20          50.4
         CA San Jose               Tasman West LRT Project..........................        325.00        182.75          56.2        142.25          43.8
         CO Denver                 Southwest Corridor LRT...........................        176.32        120.00          68.1         56.32          31.9
         GA Atlanta                MARTA North Springs Extension....................        381.26        305.01          80.0         76.25          20.0
         MA Boston                 South Boston Piers Transitway....................        413.41        330.73          80.0         82.68          20.0
         MD Baltimore-Wash, DC-WV  MARC--Commuter Rail Improvements.................        131.56        105.25          80.0         26.31          20.0
         MO St. Louis, MO/IL       Metrolink St. Clair Extension....................        339.17        243.93          71.9         95.24          28.1
         NJ Northern New Jersey    Hudson-Bergen Light Rail.........................        992.14        604.09          60.9        388.05          39.1
         OR Portland               Westside/Hillsboro LRT...........................        963.52        630.06          65.4        333.46          34.6
         PR San Juan               Tren Urbano......................................      1,676.00        307.40          18.3      1,368.60          81.7
         TX Houston                Regional Bus Plan................................        625.00        500.00          80.0        125.00          20.0
         UT Salt Lake City         South LRT........................................        312.50        237.40          76.0         75.10          24.0
                                                                                     -----------------------------------------------------------------------
                  Total            .................................................       9,381.9       5,108.8  ............  ............  ............
                                                                                     -----------------------------------------------------------------------

                                                                                                        GRANTEE ESTIMATED SEC.            LOCAL SHARE
                                                                                                              5309 SHARE         ---------------------------
                                                                                         TOTAL COST  ----------------------------
                                                                                                       IN DOLLARS    AS PERCENT    IN DOLLARS    AS PERCENT
    --------------------------------------------------------------------------------------------------------------------------------------------------------

              IN FINAL DESIGN [10]                                                   -----------------------------------------------------------------------

           TDallas                   North Central Extension........................         517.3         333.0          64.4         184.3          35.6
           MSt. Louis, MO/IL         MetroLink--St. Clair Ext. Phase................         121.0          60.0          49.6          61.0          50.4
           FFort Lauderdale/Miami    Tri-Rail Commuter Rail Upgrade.................         422.0         130.8          31.0         291.2          69.0
           LNew Orleans              Canal Street Corridor LRT......................         153.5         123.2          80.3          30.3          19.7
           CSan Diego                Mission Valley East LRT Extension..............         361.3         275.2          76.2          86.1          23.8
           PPittsburgh               Stage II LRT Reconstruction....................         512.5         162.6          31.7         349.9          68.3
           PPittsburgh               MLKJR Busway East Extension....................          62.8           8.6          13.7          54.2          86.3
           NNorthern New Jersey      Hudson-Bergen LRT [MOS-2]......................         900.0         400.0          44.4         500.0          55.6
           WSeattle                  SOUND MOVE: Commuter Rail [Tacoma].............         401.0         100.0          24.9         301.0          75.1
           FOrlando                  I-4/Central Florida LRT........................         600.1         330.0          55.0         270.1          45.0
                                                                                     -----------------------------------------------------------------------
                  Total--In Final    ...............................................       4,051.5       1,923.4  ............       2,128.1  ............
                   Design
                                                                                     =======================================================================
                 IN PRELIMINARY
             ENGINEERING [PE] [30]

           TMemphis                  Medical Center Extension.......................          30.4          24.3          80.0           6.1          20.0
           CSan Diego                Oceanside-Escondido LRT........................         213.7         124.0          58.0          89.7          42.0
           OCleveland                Euclid Corridor Busway.........................         327.0         262.0          80.1          65.0          19.9
           ALittle Rock              River Rail Project [Phase I]...................           7.6           6.1          80.3           1.5          19.7
           FMiami                    East-West Corridor.............................       2,152.2         808.0          37.5       1,344.2          62.5
           NNorthern New Jersey      Newark Rail Link LRT [MOS-1]...................         150.0         112.5          75.0          37.5          25.0
           USalt Lake City           East-West LRT [Downtown Loop] \1\..............          75.0          60.0          80.0          15.0          20.0
           IChicago                  Metra--Kane County Extension...................          92.5          55.5          60.0          37.0          40.0
           IChicago                  Metra--North Central Double-Tracking...........         188.7         117.4          62.2          71.3          37.8
           IChicago                  Metra--Southwest Corridor Extension............         164.8         104.4          63.3          60.4          36.7
           PSan Juan                 Tren Urbano-Minillas Extension.................         478.3         382.6          80.0          95.7          20.0
           OPortland                 South/North LRT \2\............................       1,186.3         636.3          53.6         550.0          46.4
           FMiami                    North 27th Avenue Extension....................         477.4         334.2          70.0         143.2          30.0
           MMinneapolis [Twin        Hiawatha Corridor Transitway...................         446.0         223.0          50.0         223.0          50.0
             Cities]
           VNorfolk                  Norfolk--Virginia Beach LRT....................         524.6         288.6          55.0         236.0          45.0
           CSan Diego                Mid-Coast LRT--Phase I.........................         104.6          54.7          52.3          49.9          47.7
           MWash, DC--Suburban       Metrorail Extension to Largo...................         397.1         316.1          79.6          81.0          20.4
             Maryland
           MBaltimore                Light Rail Double Tracking.....................         150.0         120.0          80.0          30.0          20.0
           WSeattle                  SOUND MOVE: Northgate-Seatac Light Rail Line...       2,917.0       1,458.0          50.0       1,459.0          50.0
           WSeattle                  SOUND MOVE: Commuter Rail [Everett to Seattle/          196.0          49.0          25.0         147.0          75.0
                                      Tacoma to Lakewood].
           NResearch Triangle        Regional Commuter Rail.........................         284.0         111.0          39.1         173.0          60.9
             [Raleigh-Durham]
           NLas Vegas                Resort Corridor People Mover [MOS].............         500.3         225.1          45.0         275.2          55.0
           COrange County            Irvine--Fullerton Corridor.....................       1,916.5         959.1          50.0         957.4          50.0
           CDenver                   Southeast Extension............................         479.7         383.8          80.0          95.9          20.0
           APhoenix                  Central Phoenix/East Valley [MOS]..............         390.0         195.0          50.0         195.0          50.0
           NNew York City            LIRR Access to Grand Central Terminal..........       3,454.5       1,727.3          50.0       1,727.2          50.0
           OCincinnati               Northeast Corridor [MOS].......................         675.8         337.9          50.0         337.9          50.0
           FTampa                    Early Action Plan..............................         575.0         288.0          50.1         287.0          49.9
           MKansas City [PE work     Southtown LRT--Phase I.........................         220.0         176.0          80.0          44.0          20.0
             suspended]
           MBoston                   South Boston Piers--Phase II...................         258.0         206.4          80.0          51.6          20.0
                                                                                     -----------------------------------------------------------------------
                  Total--In          ...............................................      19,033.0      10,146.3  ............       8,886.7  ............
                   Preliminary
                   Engineering
                                                                                     =======================================================================
            ANTICIPATED PE REQUESTS
                      [9]

           CDenver                   East Corridor Extension to DIA.................         330.0         264.0          80.0          66.0          20.0
           CDenver                   West Corridor Extension........................         251.0         200.8          80.0          50.2          20.0
           KLouisville               South Central Corridor.........................         500.0         250.0          50.0         250.0          50.0
        KS/MJohnson County, KS       I-35 Commuter Rail to Kansas City..............          35.0          24.0          68.6          11.0          31.4
             [Request Submitted]
           MSt. Louis                Cross County Metrolink Extension...............         350.0         300.0          85.7          50.0          14.3
           NOmaha                    Downtown Trolley System........................          35.0          25.0          71.4          10.0          28.6
           MBoston                   North-South Station Corridor...................       2,000.0       1,000.0          50.0       1,000.0          50.0
           CAspen--Glenwood Springs  Roaring Fork Valley Rail.......................         129.0          61.0          47.3          68.0          52.7
           VWashington, DC/VA        Dulles Corridor Rapid Bus......................         180.0         141.0          78.3          39.0          21.7
                                                                                     -----------------------------------------------------------------------
                  Total--Anticipate  ...............................................       3,810.0       2,265.8  ............       1,544.2  ............
                   d PE Requests
            \1\ Salt Lake City-East-West [Airport to University] total cost is estimated at $480 million.
            \2\ Project to be reconfigured.

        Question. Please detail by fiscal year and project how the FTA
    plans to allocate the $10,400,000 provided for Alaska or Hawaii
    projects. Include in your answer the total cost and the local/federal
    share of each project (dollar and percentage).
        Answer. The scope and nature of the ferry projects in Alaska and
    Hawaii remain under development. A number of proposals are currently
    being finalized. Once the costs have been refined for these projects
    and a complete list has been finalized, this information will be
    conveyed to the Congress.
        Question. How did FTA determine that $8,000,000 for the Baltimore
    Central Corridor project, the Hiawatha corridor transitway project in
    Minneapolis, the Raleigh-Durham-Research Triangle regional rail project
    and the Sound Move project in Seattle were the appropriate and
    necessary amounts to be allocated in fiscal year 2000?
        Answer. The $8 million figure is a level designated for planning
    purposes.
        Question. Why isn't bill language requested for these four
    projects?
        Answer. These four projects were not identified in the proposed
    appropriation language in recognition that FTA will work with the
    Congress to identify a funding level consistent with the estimated
    needs of these projects.
                         new starts evaluation criteria
        Question. The new starts report that was released by the Secretary
    of Transportation on March 23 includes detailed evaluations and ratings
    of 42 new starts projects that are in final design and preliminary
    engineering stages. However, the new starts report excludes any
    evaluation or rating of the current 14 full funding grant agreement
    (FFGA) projects. These 14 projects represent a proposed $668 million of
    the total $980 million that is to be available for new starts in fiscal
    year 2000, or 68 percent. Some of these projects are experiencing
    significant cost increases and scope changes that may severely impact
    the ability of the projects' sponsors to complete the projects on time
    and within budget, as stipulated by the full funding grant agreement.
    These considerations, as well as an evaluation and rating of each new
    start project--irrespective of a project's developmental status--should
    be part of the annual comprehensive review to determine the appropriate
    funding levels for each new project. Why did the department decide not
    to evaluate the full funding grant agreement projects? Can a similar
    evaluation and rating process be performed by FTA for these 14
    projects? If not, what parts of this process present a particular
    challenge? What components of the evaluation process can be performed?
        Answer. In the case of these 14 projects, the FFGAs were issued
    prior to TEA21. Under 49 U.S.C. Sec. 5309(e)(8)(A), projects for which
    the Department entered into FFGAs prior to the date of enactment of
    TEA-21 are exempt from evaluation under the revised new starts
    evaluation and rating process. These projects were evaluated and found
    to meet the Federal requirements that were in place at the time the
    FFGAs were negotiated. These evaluations can be found in earlier
    editions of the Annual Report on New Starts. Future FFGAs will of
    course be based on an evaluation of the proposed project under the full
    TEA-21 criteria.
        As noted in each edition of the Annual Report on New Starts, the
    issuance of an FFGA--FTA's decision to commit Federal funds to a new
    starts project--represents the final determination of project
    justification. Projects for which FFGAs have been issued are no longer
    undergoing the development stages; rather, they have been fully
    developed, and are ready for a Federal funding commitment for
    construction. Thus, there is no further need for project evaluation.
    The Department recognizes that the FFGAs represent Federal commitments
    that are to be honored; the financial community considers the FFGA to
    be a key determinant in making loans and setting appropriate interest
    rates. If the Federal commitment represented by an FFGA is not honored,
    project financing is damaged, making project advancement and medium-
    and long-range planning efforts exceedingly difficult. Of course, the
    end of project development is not the end of FTA oversight; FTA
    continues to monitor the progress of a project once an FFGA has been
    negotiated, and may take corrective actions when necessary.
        As for projects that may be experiencing scope changes, cost
    overruns, and the like, the FFGA acts to protect the Federal government
    against such circumstances. The FFGA defines the project, including
    cost and schedule; commits to a maximum level of Federal financial
    assistance (subject to appropriation); establishes the terms and
    conditions of Federal financial participation; covers the period of
    time for completion of the project; and helps to manage the project in
    accordance with Federal law. The FFGA assures the grantee of
    predictable Federal financial support for the project (subject to
    appropriation) while placing a ceiling on the amount of that Federal
    support.
        An FFGA also limits the exposure of FTA and the Federal government
    to cost overruns that may result if project design, engineering and/or
    planning is not adequately performed at the local level. FTA is
    primarily a financial assistance agency; it is not directly involved in
    the design and construction of new starts projects. While FTA is
    responsible for ensuring that planning projections are based on
    realistic assumptions and that design and construction follow
    acceptable industry procedures, it is the responsibility of project
    sponsors to ensure that proper planning, design and engineering have
    been performed.
        Question. Table 1-A of the 1999 Annual Report on New starts,
    ``Summary of Fiscal Year 2000 New Starts Ratings'', reveals that not a
    single new starts project was rated as having both a high financial
    rating and a high project justification rating. Do you believe the
    criteria outlined in TEA-21 have set the standard too high? Or does
    this indicate that we are providing federal resources to build mediocre
    projects?
        Answer. Neither. In developing the measures for evaluating proposed
    new starts projects under TEA-21, FTA intentionally set high standards
    for achieving a high rating for project justification and local
    financial commitment. A ``high-high'' rating represents the ``gold
    standard,'' and the standards should be set accordingly. While it is
    true that none of the proposed projects received high ratings for both
    justification and finance, a total of eight were rated higher than
    medium for both, earning them overall ratings of ``highly
    recommended.'' Similarly, a rating of ``medium'' does not denote a
    ``mediocre'' project; rather, it signifies that the proposed project
    ``passes'' the justification process and is eligible for new starts
    funding. In order to earn an overall project rating of ``recommended,''
    a proposed new start must be rated at least ``medium'' for both
    justification and finance. A total of 19 proposed projects were rated
    ``recommended'' or higher in the 1999 Annual Report on New Starts. Such
    projects have costs which are exceeded by easily quantified benefits
    (not counting other benefits which are not so easily quantified) and
    have a local financial commitment which is sufficient. A rating below
    medium on either would result in an overall rating of ``not
    recommended.''
        Question. Please provide for the record the rating given to each of
    the projects proposed for FFGAs in fiscal year 2000 and the four
    additional projects recommended for appropriations within the amounts
    provided for planning and preliminary engineering.
        Answer. The ratings are provided in the following table.

                                                                       TABLE 1-A.--SUMMARY OF FISCAL YEAR 2000 NEW STARTS RATINGS
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           Section 5309
                                           Total Capital    Total Sect.   Funds Share of
          Phase and City (Project)             Cost        5309 Funding    Capital Costs           Overall Project Rating                   Financial Rating           Project Justification Rating
                                            (millions)      (millions)       (percent)
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
         Proposed Full Funding Grant
                 Agreements

    Dallas (North Central LRT)..........     $517.20 YOE         $333.00              64  RECOMMENDED.............................  High...........................  Medium.
    Ft. Lauderdale, FL (Tri-County            422.00 YOE          130.80              31  HIGHLY RECOMMENDED......................  Medium-High....................  Medium-High.
     Commuter Rail).
    Memphis (Medical Ctr. Trolley              35.90 YOE           24.30              80  RECOMMENDED.............................  Medium-High....................  Medium.
     Extension).
    Northern New Jersey (Newark-              150.00 YOE          112.50              75  HIGHLY RECOMMENDED......................  Medium-High....................  Medium-High.
     Elizabeth Rail Line).
    Orlando (I-4 Central Florida Light        600.10 YOE          330.00              55  HIGHLY RECOMMENDED......................  Medium-High....................  Medium-High.
     Rail).
    Salt Lake City (Downtown Connector-        74.80 YOE           59.84              80  NOT RECOMMENDED.........................  Low............................  Medium.
     West/East).
    San Diego (Mission Valley East).....      361.00 YOE          275.20              76  HIGHLY RECOMMENDED......................  High...........................  Medium-High.

      Projects Recommended for Funding
     Undergoing Preliminary Engineering

    Baltimore (MTA Double Tracking            150.00 YOE          120.00              80  RECOMMENDED.............................  Medium.........................  Medium-High.
     Project).
    Minneapolis (Hiawatha Avenue).......     446.00 1997          223.00              50  RECOMMENDED.............................  Medium-High....................  Medium.
    Raleigh, NC (Regional Transit Plan).      284.00 YOE          110.76              39  RECOMMENDED.............................  Medium.........................  Medium.
    Seattle Link LRT (Northgate-Seatac).    2,917.00 YOE        1,458.50              50  HIGHLY RECOMMENDED......................  High...........................  Medium-High.
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Note: (a) Year of Expenditure total project costs and Section 5309 share were calculated by FTA by applying a standard formula to cost estimates supplied by the project sponsor.
    (b) Year of Expenditure Section 5309 share calculated by FTA.

        Question. Please prepare a table indicating the projects that are
    likely to be ready for FFGAs in the near term (fiscal years 1999
    through 2002). Include current stage of project development, project
    description, estimated record of decision date, and estimated federal
    share.
        Answer. The information follows:

      FEDERAL TRANSIT ADMINISTRATION NEW START PROJECTS ESTIMATED TO BE READY FOR FINAL DESIGN IN FISCAL YEAR 1999/
                                                          2000
    ----------------------------------------------------------------------------------------------------------------
                                                                                                           GRANTEE
                                                                                                          ESTIMATED
     STATE          GEOGRAPHIC LOCATION                           PROJECT DESCRIPTION                     SEC. 5309
                                                                                                            SHARE
    ----------------------------------------------------------------------------------------------------------------
                   IN FINAL DESIGN [9]

         TX Dallas                            North Central Extension...............................        $333.0
         MO St. Louis, MO/IL                  MetroLink--St. Clair Ext. Phase I.....................          60.0
         FL Fort Lauderdale/Miami             Tri-Rail Commuter Rail Upgrade........................         130.8
         LA New Orleans                       Canal Street Corridor LRT.............................         123.2
         CA San Diego                         Mission Valley East LRT Extension.....................         275.2
         PA Pittsburgh                        Stage II LRT Reconstruction...........................         162.6
         PA Pittsburgh                        MLKJR Busway East Extension...........................           8.6
         WA Seattle                           SOUND MOVE: Commuter Rail [Tacoma]....................         100.0
         FL Orlando                           I-4/Central Florida LRT...............................         330.0
                                                                                                     ---------------
                  Total--In Final Design      ......................................................       1,523.4
                                                                                                     ===============
             IN PRELIMINARY ENGINEERING [PE]
                          [31]

         TN Memphis                           Medical Center Extension..............................          24.3
         CA San Diego                         Oceanside-Escondido LRT...............................         124.0
         OH Cleveland                         Euclid Corridor Busway................................         262.0
         AR Little Rock                       River Rail Project [Phase I]..........................           6.1
         FL Miami                             East-West Corridor....................................         808.0
         NJ Northern New Jersey               Hudson-Bergen LRT [MOS-2].............................         400.0
         NJ Northern New Jersey               Newark Rail Link LRT [MOS-1]..........................         112.5
         UT Salt Lake City                    East-West LRT [Downtown Loop] \1\.....................          60.0
         IL Chicago                           Metra--Kane County Extension..........................          55.5
         IL Chicago                           Metra--North Central Double-Tracking..................         117.4
         IL Chicago                           Metra--Southwest Corridor Extension...................         104.4
         PR San Juan                          Tren Urbano--Minillas Extension.......................         382.6
         OR Portland                          South/North LRT \2\...................................         636.3
         FL Miami                             North 27th Avenue Extension...........................         334.2
         MN Minneapolis [Twin Cities]         Hiawatha Corridor Transitway..........................         223.0
         VA Norfolk                           Norfolk--Virginia Beach LRT...........................         288.6
         CA San Diego                         Mid-Coast LRT--Phase I................................          54.7
         MD Wash, DC-Suburban Maryland        Metrorail Extension to Largo..........................         316.1
         MD Baltimore                         Light Rail Double Tracking............................         120.0
         WA Seattle                           SOUND MOVE: Northgate-Seatac Light Rail Line..........       1,458.0
         WA Seattle                           SOUND MOVE: Commuter Rail [Everett to Seattle/Tacoma            49.0
                                               to Lakewood].
         NC Research Triangle [Raleigh-       Regional Commuter Rail................................         111.0
             Durham]
         NV Las Vegas                         Resort Corridor People Mover [MOS]....................         225.1
         CA Orange County                     Irvine-Fullerton Corridor.............................         959.1
         CO Denver                            Southeast Extension...................................         383.8
         AZ Phoenix                           Central Phoenix/East Valley [MOS].....................         195.0
         NY New York City                     LIRR Access to Grand Central Terminal.................       1,727.3
         OH Cincinnati                        Northeast Corridor [MOS]..............................         337.9
         FL Tampa                             Early Action Plan.....................................         288.0
         MO Kansas City [PE work suspended]   Southtown LRT--Phase I................................         176.0
         MA Boston                            South Boston Piers--Phase II..........................         206.4
                                                                                                     ---------------
                  Total--In Preliminary       ......................................................      10,546.3
                   Engineering
                                                                                                     ===============
               ANTICIPATED PE REQUESTS [9]

         CO Denver                            East Corridor Extension to DIA........................         264.0
         CO Denver                            West Corridor Extension...............................         200.8
         KY Louisville                        South Central Corridor................................         250.0
      KS/MO Johnson County, KS [Request       I-35 Commuter Rail to Kansas City.....................          24.0
             Submitted]
         MO St. Louis                         Cross County Metrolink Extension......................         300.0
         NE Omaha                             Downtown Trolley System...............................          25.0
         MA Boston                            North-South Station Corridor..........................       1,000.0
         CO Aspen-Glenwood Springs            Roaring Fork Valley Rail..............................          61.0
         VA Washington, DC/VA                 Dulles Corridor Rapid Bus.............................         141.0
                                                                                                     ---------------
                  Total--Anticipated PE       ......................................................       2,265.8
                   Requests
                                                                                                     ===============
                  Total--FEDERAL DEMAND       ......................................................      14,335.5
    ----------------------------------------------------------------------------------------------------------------
            \1\ Salt Lake City-East-West [Airport to University] total cost is estimated at $480 million.
            \2\ Project to be reconfigured.

                          los angeles transit projects
        Question. Approximately $650,000,000 in contingent commitment
    authority has been allocated for the Mid-City and Eastside extensions
    in the MOS-3 Full Funding Grant Agreement. These funds have been
    committed against the balance of the trust fund. In November 1998, the
    local region voted to end subway construction. What plans do you have
    for these contingent commitments?
        Answer. The Los Angeles County Metropolitan Transportation
    Authority (LACMTA) has undertaken a comprehensive Regional
    Transportation Alternatives Analysis (RTAA) to study viable
    alternatives to the originally planned subway alignments for the Mid-
    City and East Side components of MOS-3. The local population is being
    extensively consulted during this process. The RTAA is well underway
    and should be completed by the end of the year.
        Although Los Angeles residents voted in November, 1998 to ban
    subway construction using Proposition A and C monies (local sales tax
    revenues), the fact remains that the East Side and Mid-City corridors
    are heavily transit-dependent, contain high levels of transit ridership
    today and warrant major capital investments to provide higher capacity
    service. As such, the ban does not preclude construction of surface
    alternatives such as light rail, rapid bus or enhancing existing bus
    operations, all of which are likely to be seriously considered in the
    RTAA.
        FTA does not expect to revisit the issue of the remaining
    commitment to East Side and Mid-City until the RTAA is completed and
    the region reaches a consensus on locally preferred alternatives for
    these corridors. Any selected alternatives would, of course, be subject
    to the FTA new starts criteria and would need to be rated according to
    local financial, land use and mobility factors.
        An additional factor which must be taken into account is the recent
    ruling by the Special Master mandating additional measures to ensure
    LACMTA compliance with the terms of the Bus Consent Decree. The effect
    of this far-reaching decision on the capital and operating budgets of
    the LACMTA, both for the current year and future budgets, as well as
    the degree to which other capital initiatives (including the RTAA) will
    be impacted, must now be assessed.
        Question. If this contingent commitment were not made available to
    MOS-3, would it be available to fund other FFGAs
        Answer. This commitment or a portion thereof could be used to fund
    other potential FFGAs in the event an adjustment to the commitment
    level to Los Angeles is required.
        TEA-21 continues the ``contingent commitment'' concept (providing
    commitment authority to ``bridge'' authorization periods) and replaces
    the complicated ISTEA formula with a much simpler mechanism for
    determining contingent commitment authority. The TEA-21 provision (as
    amended by the Internal Revenue Restructuring and Reform Act of 1997)
    provides for ``an amount equivalent to the last two fiscal years of
    funding authorized under section 5338(b) for new fixed guideway systems
    and extensions to existing fixed guideway systems'' to serve as the
    ``contingent commitment''.
        Question. The special master has ruled that the Los Angeles County
    Metropolitan Transit Authority (LACMTA) is not in compliance with the
    bus consent decree, and ordered the LACMTA to buy over 500 new buses
    and hire additional operators. Does this order impose any additional
    requirements on the LACMTA since it has already committed about
    $1,000,000,000 to buy more than 2,000 buses to comply with the earlier
    decree?
        Answer. The Special Master's order to purchase 500 new buses and
    hire additional operators is in addition to the 2,000 new buses LACMTA
    has previously programmed in their procurement to comply with the
    consent decree. The new order would add an estimated $225 million in
    capital requirements to their bus program budget of more than $800
    million. Additional operating costs are estimated to total $275 million
    to $400 million over the next five years.
        Question. A very limited number of bus manufacturers exists today
    and there is currently a two-year backlog for bus orders. To the extent
    that the LACMTA needs to buy additional buses, how can LACMTA meet the
    details of special master's order, given this backlog?
        Answer. Since the 1970s, the transit bus industry has grown from
    mainly two manufacturers, GMC and Flexible to six current
    manufacturers. Backlogs vary from six months to over two years for each
    of the six bus manufacturers. FTA has calculated the average backlog
    for all the manufacturers to be roughly one and a half years at this
    time. In fact, the majority of the manufacturers maintain a one year
    backlog because of the uncertainty in bus orders from year to year.
    Although the effect of the Special Master's ruling is still unclear, it
    is possible that a stable order base of the magnitude as LACMTA's
    accelerated plan may provide the incentive for the industry to increase
    yearly capacity for the duration of LACMTA's order.
        Question. To what extent are other transit providers in the country
    vulnerable to similar legal challenges to those levied against the
    LACMTA?
        Answer. It is very difficult to predict whether the rulings in
    Labor/Community Strategy Center, et al. v. LACMTA will serve as
    precedent for litigation elsewhere in the nation. A similar suit was
    filed in Federal court in New York City at about the same time as the
    Los Angeles case, New York Urban League and the Straphangers Campaign
    v. MTA. However, this case was decided in favor of the defendant
    transit agency. The theories of these suits are grounded in the
    precepts of Title VI, ``environmental justice'' and ``transportation
    equity,'' but they are not yet well defined. At the moment, the
    Department is aware of only one other suit of this type that may be
    filed in the near future. The Environmental Defense Fund and the
    Rainbow Coalition have threatened litigation against the Georgia
    Department of Transportation and the Atlanta Regional Commission based
    on Title VI and alleged inequities in the distribution of
    transportation benefits and adverse environmental impacts on minority
    and low-income communities.
        Question. Recently the Los Angeles Pasadena Blue Line Construction
    Authority was created to oversee the construction of the Pasadena Blue
    Line in the Los Angeles area. This action stripped the LACMTA of its
    responsibility for the construction of that light rail line and
    requires the LACMTA to transfer $250 million to the new board. What
    effect will this action have on the LACMTA's general financial position
    and its ability to fund both the Red Line and the Alameda corridor
    project?
        Answer. The Act which created the Construction Authority (SB 18476)
    requires LACMTA to transfer funds already programmed for the Pasadena
    Blue Line project in the Authority's Restructuring Plan. These funds
    consisted of $280 million in state funds and $89 million in local sales
    tax funds. Since these resources had already been programmed for the
    Pasadena Blue Line, this transfer does not affect the Authority's
    financial condition or its ability to fund the rail Line projects under
    construction.
        Question. The full funding grant agreement for MOS-3 assumed that
    the Pasadena Blue Line would be funded entirely from local revenue. Do
    you support federal appropriations to construct this light rail line?
        Answer. The Pasadena Blue Line has always been considered a locally
    planned and funded project, and it is unclear if LACMTA and its
    predecessor agencies followed Federal procedures in developing the
    project. Bringing the project into Federal compliance, including
    generating New Starts criteria, would translate into additional costs
    for the project and would further delay construction. Another
    complicating factor is presented by the fact that the Pasadena Line was
    not authorized by TEA-21.
        Question. Given the recent events, should the LACMTA produce a new
    financial plan showing how it can complete the Red Line and comply with
    the bus consent decree?
        Answer. FTA has already engaged its financial management oversight
    consultant to conduct an assessment of the impact of the Special
    Master's ruling on LACMTA's capital and operating budgets. FTA will
    await the results of the consultant's assessment and defer reaching any
    conclusions until the assessment has been received and studied.
        Question. What does the LACMTA's approved recovery plan assume for
    federal appropriations in fiscal year 2000? What annual appropriations
    are assumed for the out-years in the recovery plan to complete the
    federal share of the project? If the Los Angeles Red Line project
    received expected federal and state funding at the levels assumed in
    the recovery plan, will it be completed on schedule and near budget?
        Answer. LACMTA's approved recovery plan contained very conservative
    estimates for Federal appropriations, assuming that the expected
    appropriation would not become available until the following budget
    year. For Federal fiscal year 2000, LACMTA assumed a $50.0 million
    appropriation.
        The assumed outyear appropriations for the North Hollywood line are
    essentially in line with the Attachment 6 schedule, calling for $50.0
    million in fiscal year 2001 and $47.8 million in fiscal year 2002.
    These figures also take into account the current shortfall total ($39
    million).
        Provided federal and state funding meet expected levels, the Red
    Line North Hollywood extension will continue on schedule and could open
    ahead of the revenue operations date (Dec. 2000) specified in the FFGA.
    The project is also currently within budget and is expected to continue
    to track budget projections to project completion.
        Question. What is the status of alternative analysis for the Mid-
    City and East side corridors?
        Answer. Regional Transit Alternatives Analysis report evaluated
    options for East Side, Mid-City and San Fernando Valley. A Peer Review
    Panel comprised of transit industry experts with planning and
    investment analysis experts critiqued the study and provided advice to
    Los Angeles County Metropolitan Transportation Authority (MTA). In
    November 1998, the Board directed MTA to: Further analyze fixed
    guideway alternatives on East Side and Mid-City; and promptly implement
    a Rapid Bus Program demonstration project in the East Side, Mid-City
    and San Fernando Valley corridors.
        MTA is starting to prepare a draft Environmental Impact Statement
    (EIS) with potential of Board review late in 1999.
                          st. louis metrolink project
        Question. Last year the FTA requested that funding for the St.
    Louis-St. Claire extension project be accelerated. This year the budget
    does not include a similar request. Why not?
        Answer. The additional funds were requested to alleviate a
    perceived cash flow requirement and diminish the need for additional
    up-front local funds to the project. A similar request was not included
    in the fiscal year 2000 Budget Request because the problem was time
    sensitive and thus has already been addressed.
        Question. Newspaper reports indicate that East St. Louis city
    leaders are demanding changes to the Metrolink light rail extension
    under construction, and that such changes could delay or drive up the
    costs of the project. Please describe the current state of affairs.
    What are the demands of the city officials; how are they different from
    the plan assumed under the FFGA; what costs or delays may be incurred
    because of these changes; what is the status of discussions between
    city leaders and Metrolink?
        Answer. City officials from East St. Louis have requested that: (1)
    18th and 71st Streets, both planned to be closed as a result of the
    Metrolink alignment design, remain open; and (2) that the design
    calling for an at-grade crossing at St. Clair Avenue be changed to a
    grade-separated crossing.
        With regard to the St. Clair Avenue crossing issue, the street is
    located in Washington Park, outside of the East St. Louis city limits.
    The Mayor of Washington Park supports the present Metrolink at-grade
    design. Accordingly, Bi-State does not plan to change the crossing
    design.
        The 71st Street issue is a more complicated one. According to the
    preliminary engineering report, the 71st Street bridge was to remain in
    place and a station and park and ride facility was originally planned
    at the bridge site. However, an unfavorable hydraulics study resulted
    in the elimination of both the station and the park and ride lot during
    the design phase. BiState proceeded to demolish the 71st Street bridge
    based on the hydraulics study which detailed the history of severe and
    constant flooding conditions in the area. The bridge had been closed by
    the Metro East Sanitary District in conjunction with the City of East
    St. Louis for two years prior to the demolition due to severe flooding
    problems in 1996. Reconstruction of the bridge and associated
    infrastructure was rejected by Bi-State due to the high cost (about
    $5.5 million). Although considerable coordination took place, no formal
    agreement was executed between the parties regarding the closure. Bi-
    State is continuing to talk with city officials to satisfactorily
    resolve this issue.
        The cost to convert the 18th Street closure to a grade crossing is
    estimated in excess of $800,000. Bi-State maintains that East St. Louis
    officials originally acceded to the closure of 18th Street and has
    proceeded to build the project as designed. BiState has already made
    payment of $25,000 in permit fees to the City of East St. Louis but has
    not secured all street closure permits. Bi-State is prepared to go to
    litigation in case the City takes any action to delay the project.
        Metrolink officials will continue discussions with East St. Clair
    officials to resolve differences over the 71st Street closure.
        Question. Is there a local agreement between participating Bi-State
    entities relating to the timing and scope of proposed Bi-State
    projects, a sort of ``gentlemen's agreement?'' Please describe this
    agreement and discuss how it has affected the timing of implementing
    different aspects of proposed St. Louis area transit projects.
        Answer. Yes, there is an agreement between local governments in the
    St. Louis, MO/IL area detailing the order and pace in which Metrolink
    extensions are expected to occur. After the basic system was opened in
    1993, the agreement provided for the next extension to serve St. Clair
    County, IL. A planned extension to St. Charles County (northwest of St.
    Louis) was shelved after a funding referendum was rejected by the
    voters of that county. Consequently, the next extension after St. Clair
    is completed will be the Cross-County extension, expanding Metrolink
    west into St. Louis County.
                             minneapolis light rail
        Question. Please provide an update on the efforts of the Minnesota
    state government to provide a total of $100 million in state funds for
    the construction of the light rail system. In addition, please update
    the Committee on the status of the authorized bond sale to raise
    $40,000,000.
        Answer. In 1998, a $100 million request in state bonding authority
    was made to the Minnesota Legislature for the Hiawatha Avenue light
    rail project. The Legislature subsequently appropriated $40 million for
    the proposed project in the 1998 session, with the understanding that
    the remaining $60 million will be appropriated in the next state
    bonding cycle in the year 2000.
        The Minnesota Department of Transportation (MnDOT) has not drawn on
    the available bonding authority for the proposed light rail project
    because the need for it has not yet arisen. It is FTA's understanding
    that local funds from the Hennepin County Regional Railroad Authority
    are currently being used to finance project development activities
    associated with the proposed project.
        The $40 million in bonds for the proposed project are not issued
    separately. They are part of the overall MnDOT authorized bonding
    program. FTA has been informed that funds for the proposed project will
    be transferred on an as-needed basis.
        Question. Please provide an update of the Minneapolis Northstar and
    Riverview corridors. Does the FTA plan to incorporate these corridors
    into the Record of Decision and FFGA with the Twin Cities Metro Transit
    Authority, or will each of the proposed corridors have its own FFGA?
        Answer. The Northstar Corridor Development Authority, created by
    the Minnesota Department of Transportation (MnDOT), and two
    metropolitan planning organizations are conducting a Major Investment
    Study for a proposed 70-mile corridor between Minneapolis and St.
    Cloud, Minnesota. The MIS, which is evaluating a range of
    transportation alternatives including commuter rail, is scheduled for
    completion in May or June of 1999.
        The Ramsey County Regional Railroad Authority, in conjunction with
    MnDOT, is conducting a Major Investment Study to examine transportation
    options in the Riverview corridor connecting St. Paul, MN, the
    Minneapolis/St. Paul International Airport, and the Mall of America.
    The MIS is scheduled for completion in Spring 2000.
        FTA is not planning to incorporate the recommended alternatives
    under study in these two corridors into a proposed Record of Decision
    or potential Full Funding Grant Agreement under consideration for other
    projects in the Twin Cities area. FTA will address each proposed
    project in these individual corridors as an independent decision point
    or action at the appropriate time in the project development process.
                        salt lake city transit projects
        Question. Please list all of the ongoing and planned Salt Lake City
    transit projects (rail and bus), with a brief description of each,
    funding history, local match, and administration request for fiscal
    year 2000.
        Answer. The following projects, and groups of projects, are ongoing
    and planned transit projects in Salt Lake City that FTA is aware of:
      --The North-South light rail transit project, which is under
            construction, will extend from downtown Salt Lake City to
            suburban areas to the south. FTA entered into a Full Funding
            Grant Agreement (FFGA) with the Utah Transit Authority (UTA) in
            1995 for an amount totaling $237.39 million. An additional
            $6.60 million in Section 5309 funds was granted prior to the
            FFGA. Through fiscal year 1999, Congress appropriated $206.07
            million. The proposed local match is 22.75 percent. For fiscal
            year 2000, the Administration has requested $37.93 million.
      --The Downtown Connector is a proposed one mile segment of a larger,
            10.9 mile West-East proposal that would extend from the Airport
            through downtown to the University of Utah. Our budget proposes
            a project that would consist of the Downtown Connector linking
            the North-South line and downtown destinations. Through fiscal
            year 1999, Congress appropriated $4.96 million. The proposed
            local match is 20.0 percent. For fiscal year 2000, the
            Administration has requested $20.0 million.
      --The Draper Light Rail project would extend service from the
            southern terminus of the North-South line southward to Draper
            and Sandy. No Section 5309 funds have been obligated for this
            extension. FTA is not aware of a local match. The
            Administration has not requested funds for fiscal year 2000.
      --An alternatives analysis is being conducted to evaluate
            transportation improvements in a proposed 120-mile corridor and
            includes a proposed Salt Lake City-Ogden-Provo Commuter Rail.
            Through fiscal year 1999, Congress appropriated $3.9 million in
            Section 5309 funds. No Section 5309 funds have been obligated
            for the project. No local match has been identified and no
            funds have been requested for fiscal year 2000.
      --UTA is conducting a feasibility study of the West Jordan Light Rail
            Extension. The project would extend a seven-mile segment of the
            North-South transit line to Utah County. No local match has
            been identified and no funds have been requested for fiscal
            year 2000.
      --UTA is seeking funding to procure new buses and to transport
            borrowed buses from transit authorities and manufacturers to
            Utah and return to the provider of the vehicles. No local match
            has been identified. Elements of this project are similar to
            those afforded Atlanta for their 1996 Olympic Games from
            funding set-aside in the Formula Grants Program. The
            Administration has requested a similar provision for the Salt
            Lake City Games.
      --UTA is seeking engineering and design, right-of-way purchase, and
            construction funds for six projects: Park City Intermodal
            Terminals, Gateway Intermodal Terminal, Ogden Intermodal
            Terminal, West Valley Transit Center, Orem Intermodal Terminal,
            and Provo Intermodal Terminal. Engineering and design,
            construction and land purchase funds are being sought for park-
            and-ride lots for the Bus Station Stops and Terminals project.
            Engineering and design, construction, and land purchase funds
            are being requested for a maintenance facility for the Bus-
            Support Equipment/Facilities Transit Maintenance Facility.
      --UTA is seeking the total requested Section 3030(c)(2)(B) funding
            for these projects totaling $158.3 million.
        Question. The budget includes appropriations language that provides
    ``that the importance of a downtown segment to the system connectivity
    necessary to meet the demands of the 2002 Olympic Games in Salt Lake
    City, Utah, may be considered by the Secretary in determining whether
    to approve a grant or loan under 49 U.S.C. 5309(e)(1).'' Why is this
    language necessary? Absent this language, will the secretary be able to
    provide a grant to the west-east downtown segment? Does this Provision
    waive any local match requirements?
        Answer. This language is intended to convey the fact that the
    transportation needs of the 2002 Olympic and Paralympic Games was a
    determining factor in the fiscal year 2000 funding recommendation for
    the Downtown Connector project in Salt Lake City. While this project
    has been rated ``not recommended'' under the project evaluation
    criteria set forth in 49 U.S.C. Sec. 5309(e), as amended by TEA21, the
    approximately one-mile ``Downtown Connector'' segment is an integral
    part of the transportation needs for the 2002 Olympics (all
    ticketholders will be expected to travel to events and venues by
    transit). This is a compelling argument for Federal support of this
    segment of the project. The language in the budget was intended to
    convey this fact.
        Under 49 U.S.C. Sec. 5309(e)(1), the Secretary may approve a grant
    or loan for a new start project only if the project is found to be
    justified based on a comprehensive review of its mobility improvements,
    environmental benefits, cost effectiveness and operating efficiencies,
    and that it is supported by an acceptable degree of local financial
    commitment. FTA's evaluation of the West-East LRT in Salt Lake City,
    according to the criteria and requirements contained in Sec. 5309(e),
    did not make these findings. The WestEast LRT was rated ``medium'' for
    project justification and ``low'' for local financial commitment,
    resulting in an overall project rating of ``not recommended.'' The
    ``low'' financial rating is due primarily to the fact that the Utah
    Transit Authority has not yet identified a source of local funds to
    build and operate the proposed system.
        Given the results of FTA's evaluation, the Secretary would be
    unable to approve a grant or loan for this project under Sec. 5309 (e)
    without the language referenced above.
        This provision does not waive any local match required by permanent
    law. The UTA is currently developing a financial plan for the Downtown
    Circulator segment of the West-East LRT, and is proposing that the $15
    million local match be provided through a combination of leveraged
    lease funds, bonding, cash reserves, and sale of excess property.
        Question. Does TEA-21 in any way waive the local match for projects
    related to the Olympic Games?
        Answer. No. In fact, Section 3030(c)(2)(B)(ii) specifies that the
    Federal share of project costs for the Salt Lake City Olympic Games
    shall not exceed 80 percent.
        Question. Section 3030(c)(2)(B)(ii) of TEA-21 permits for funds
    authorized to be appropriated under section 5338(h)(5) that for
    determining the local match, highway, aviation, and transit projects
    shall be considered to be a program of projects. What is the effect of
    this provision?
        Answer. In terms of the President's fiscal year 2000 budget
    proposal, there is no effect. This provision applies to the ``non-
    guaranteed'' funds authorized under Section 5338(h). The
    Administration's budget is based on the TEA21 ``guaranteed'' funding
    levels; no Section 5338(h) funding is proposed.
        In general, the effect of this language would permit Salt Lake City
    to consider Olympic-related transit, aviation, and highway projects as
    a single ``transportation project'' for purposes of local funding. This
    means that if the total cost of such interrelated projects is $100
    million, for example, and Salt Lake City constructs a $20 million
    highway segment entirely with local funds, those funds would count as
    the local match for the entire program of projects. This in turn would
    reduce the amount of local funds that the city would need to raise
    specifically for the West-East LRT. This would only hold true for
    projects funded under Section 5338(h), however.
        Question. Are the appropriation requests for the Salt Lake City
    transit projects made from funds available under 5338(h)(5)?
        Answer. No. The President's fiscal year 2000 budget proposal for
    new starts is based entirely on the TEA21 ``guaranteed'' funding level;
    no ``non-guaranteed'' funds are proposed.
        Question. Why isn't the westeast project included among the
    projects evaluated in FTA's new starts report evaluation? Why did FTA
    choose to evaluate the downtown connector only and not the westeast to
    university segment?
        Answer. Although the Annual Report on New Starts for fiscal year
    2000 includes a profile of the proposed Downtown Connector, the ratings
    contained in that profile reflect the New Starts criteria for the
    entire 10.9 mile West-East light rail transit line. The evaluation and
    the rating included in the profile relates to the entire West-East
    project.
                                  tren urbano
        Question. What is the current cost to complete the Tren Urbano
    project? How does this compare to the original estimate when the FFGA
    was signed? What accounts for any cost increase?
        Answer. The current cost to complete the Tren Urbano project is
    $1.676 billion. This compares with the original estimate of $1.25
    billion when the full funding grant agreement was signed in March,
    1996.
        A portion of the increase stems from the addition of enhancements
    to further heighten the viability and attractiveness of the line. The
    grantee added two additional stations in high ridership potential areas
    as well as other improvements to efficiently handle the 113,300 daily
    passengers expected to ride Tren Urbano in 2010. Additional factors
    were an expanded system integration and quality assurance program,
    enhanced fare collection system, 10 additional railcars, alignment
    changes and enhanced station designs.
        Question. Please prepare a table showing the annual sources and
    uses of funds to pay for the capital costs of Tren Urbano at the
    current $1,550,000,000 cost to complete. Identify the specific amounts
    and sources of local and federal funding (section 5309, FHWA flex
    funding, block grant transfers, or other federal) planned to complete
    the current construction program on an annual basis.
        Answer. The latest Financing Plan for Tren Urbano prepared by the
    Puerto Rico Highways and Transportation Authority (PRHTA), based on a
    cost of $1.676 billion for Phase I, displays aggregate totals for local
    funds and FHWA funds and thus it is not possible to break out the exact
    amount of FHWA funds PRHTA plans to flex to the project nor to target
    which local funds are being used to finance Tren Urbano. In the
    aggregate, PRHTA Financing Plan appears to demonstrate that total
    revenues plus borrowing provides the resources to complete Tren Urbano
    (and the Minillas extension). However, it is not possible to determine
    if revenues are sufficient to also maintain Puerto Rico's other
    transportation responsibilities such as the highway network. In this
    vein, the level of flex funds to be transferred needs to be verified to
    determine whether the assumed level is feasible. The level of Federal
    Section 5309 funding for Phase I in the plan reflects the FFGA Federal
    commitment rather than assuming a continuation of historic amounts
    received to date.
        We expect a submission shortly from PRHTA which will specifically
    lay out the distribution of new start, Section 5307 formula and
    flexible funding to be used to finish Phase I.
        Question. Please provide a table showing the annual sources and
    uses of funds to pay the capital costs of the Minillas extension of
    Tren Urbano. Identify the specific amounts and sources of local and
    federal funding (section 3, FHWA flex funding, block grant transfers,
    or other federal) planned to complete the proposed construction program
    on an annual basis.
        Answer. The latest Financing Plan for Tren Urbano prepared by the
    Puerto Rico Highways and Transportation Authority (PRHTA), based on a
    cost of $1.69 billion for Phase I and $478.3 million for the Minillas
    extension, displays aggregate totals for local funds and FHWA funds and
    thus it is not possible to break out which local funds are being used
    to finance the Minillas extension. In the aggregate, PRHTA Financing
    Plan shows that total revenues plus borrowing provides the resources to
    complete both Tren Urbano and the Minillas extension. However, it is
    not possible to determine if revenues are sufficient to also maintain
    Puerto Rico's other transportation responsibilities such as the highway
    network.
                               san francisco bart
        Question. What is the current estimate of the cost to complete the
    BART extension to the San Francisco Airport? How does this estimate
    compare to the original estimate at the time the FFGA was negotiated?
    Please identify by major cost activity or element what accounts for the
    increase in costs.
        Answer. The currently estimated cost to complete the BART extension
    to the airport is $1,513.2 million. The original cost of the project
    when the FFGA was signed was $1,167 million.
        Cost increases to the BART to the airport project by major activity
    are detailed in the chart below:

             BART TO THE SAN FRANCISCO INTERNATIONAL AIRPORT (SFIA)
    ------------------------------------------------------------------------
                                                 Original
                 Major Activity                   Budget      Revised Budget
    ------------------------------------------------------------------------
    Line, Trackwork & Systems...............    $410,000,000    $553,000,000
    South San Francisco Station.............      33,000,000      39,000,000
    San Bruno Station.......................      35,000,000      46,200,000
    Millbrae Station........................      61,000,000      70,500,000
    Third Party Contracts...................     116,000,000     179,000,000
    Right-of-Way............................     113,000,000     178,500,000
    Finance.................................      24,000,000      40,500,000
    Project Administration..................      39,000,000      56,700,000
    ------------------------------------------------------------------------

        Question. The original financing package assumed $300,000,000 in
    commercial paper, which was to be provided by the Union Bank of
    Switzerland. Why did Union Bank withdraw from BART's commercial paper
    program, and what disruptions in financing cash flow shortfalls have
    resulted? How will these shortfalls be remedied?
        Answer. The Union Bank of Switzerland (UBS) has indicated their
    desire to withdraw from the municipal finance market in general and has
    specifically requested BART to find a replacement source of credit. The
    UBS withdrawal is part of a strategy to reduce commitments in light of
    substantial losses incurred from hedge fund investments. With
    assistance from UBS, BART reports that West Deutsche Bank and Morgan
    Guaranty have verbally agreed to assume this commitment and provide the
    same level of short term borrowing capacity ($300 million) on the same
    terms as provided under the agreement with UBS.
        Question. Cost increases and withdrawal by Union Bank have required
    project sponsors to revise the project's finance plan. Please provide a
    table and brief discussion showing the annual sources and uses of funds
    to pay the capital costs of the BART project at the current cost to
    complete. Identify the specific amounts and sources of local funds
    (e.g., SamTrans, MTC, state, etc.) and federal funds (e.g., new start,
    TIFIA, FHWA flex funds, other federal funds) planned to complete the
    current construction program on an annual basis.
        Answer. Local funding partners have signed a memorandum of
    understanding (MOU), now approved by the partners' corresponding
    Boards, which specifies the amount of funds pledged to alleviate the
    BART project's funding shortfall. The following table details the
    amount and source of these funds. Please note that the total Federal
    commitment to this project remains at $750 million and will not change.
    There are no other Federal funds involved in the project.

                                       ADDITIONAL FUNDS--BART TO THE SFIA PROJECT
                                                  [Dollars in millions]
    ----------------------------------------------------------------------------------------------------------------
                                                  Additional
                  Funding Partner                   Funds                   Explanation/Source of Funds
    ----------------------------------------------------------------------------------------------------------------
    California (CTC)...........................        $44.0  State Grant to Project.
    SamTrans...................................         72.0  Additional Funding (Sales Tax).
    MTC........................................         16.5  Additional Funding (Bridge Tolls).
    BART.......................................         50.0  Warm Springs Funds ($35 million); General Project
                                                               Savings ($15 million).
    BART.......................................         79.0  CAPRA Proceeds (Fare surcharges).
    BART.......................................         12.5  BART Substation (BART funds).
    BART.......................................          2.0  San Mateo Flood Control (BART funds).
    ----------------------------------------------------------------------------------------------------------------

        In addition, MTC will advance $60 million to BART to meet cash flow
    requirements. This amount, including the $16.5 million noted above, as
    well as the SamTrans ($72 million), and BART ($50 million)
    contributions, will be provided to the project by September 1, 1999.
    BART has also indicated an interest in applying for a TIFIA loan or
    loan guarantee.
        Question. Construction on the line is well underway, but
    acquisition of about one-fifth of the right-of-way is yet to be
    completed? Is this matter of concern to the FTA? To what extent might
    the remaining rights-of-way acquisition costs increase the project's
    total costs?
        Answer. BART maintains that the property acquisition effort is on
    schedule. FTA has reviewed BART's reports on this activity and
    generally concurs. Acquisitions and relocations appear to be on
    schedule, especially in light of the opening date for the line.
    Estimates indicate that property acquisitions should be generally in
    line with the new budget.
        Question. Are there any discussions or proposals to scale back the
    project in order to cut costs?
        Answer. Deferral of selected stations on the line was considered.
    Only one station, the Millbrae intermodal terminal, represented any
    significant cost savings. However, deferring just the Millbrae
    intermodal terminal would reduce the projected ridership for the
    extension by about 33,000 [almost 50 percent of the projected ridership
    for the extension]. Deferral of the Millbrae station is estimated to
    save $135 to $165 million. However, the decision would trigger
    additional environmental restudies and substantial redesigns [airport
    as sole terminal of the line, endangered species impacts, wetlands
    issues] generating delays and potentially significant cost escalation.
                      long island east side access project
        Question. What considerations were taken into account when deciding
    that it was appropriate to fund the Long Island Railroad East Side
    Access project from the transit formula grants program? Why didn't the
    Department request funding for the project from new starts?
        Answer. The Department has explored a number of options for funding
    the Long Island East Side Access project. Ultimately it was decided
    that the project would be best funded from the Formula Grants program
    where its costs would be offset by a transfer of revenue aligned budget
    authority from the highway program.
        Question. FTA's new starts report states that the Long Island
    Railroad Eastside Access project is exempt from the new starts
    criteria. How does this exemption affect FTA's ability to evaluate this
    project? To what extent does this exemption affect FTA's requirement
    for entering into a full funding grant agreement with project sponsors?
        Answer. TEA-21 Section 3030(c)(3) states that the Long Island
    Railroad East Side Access project [LIRR ESA] ``shall also be exempted
    from all requirements relating to criteria for grants and loans for
    fixed guideway systems under section 5309(e). ``However, 49 U.S.C.
    5309(e)(7) directs FTA to ``enter into a full funding grant agreement
    [FFGA] based on the evaluations and ratings'' of a project. FTA bases
    these evaluations and ratings, in turn, on FTA's analysis of the
    project relative to the New Starts criteria. FTA interprets this
    provision to mean that for FTA to enter into an FFGA for a given
    project, FTA must first subject the project to an evaluation and rating
    of the project on the basis of the New Starts criteria. Therefore,
    exempt projects that choose to forego FTA's evaluation and rating may
    not be eligible for an FFGA.
        FTA has communicated to sponsors of exempt projects that they
    should consider waiving their exemption and submit to FTA its New
    Starts criteria for the purposes of being evaluated and rated in the
    annual New Starts Report to Congress. This would ensure that the
    project would be eligible to seek an FFGA.
        On November 12, 1998, the Metropolitan Transportation Authority
    (MTA) provided New Starts criteria information on the LIRR ESA to FTA
    for the Fiscal Year 2000 New Starts Report. MTA stated its
    understanding that this information would enable FTA to ``include
    project profiles for all potential New Starts projects and make
    recommendations for Fiscal Year 2000 Section 5309 New Starts funding in
    its report to Congress.''
        FTA used the same criteria that are applied to all proposed New
    Starts projects to evaluate and rate the LIRR ESA. These criteria are
    mobility improvements, environmental benefits, operating efficiencies,
    cost effectiveness, transit-supportive existing land use policies and
    future patterns, local financial commitment, and other relevant
    factors.
        FTA does not believe that the project should be exempt from the New
    Starts criteria. Congress established the criteria to provide an
    objective mechanism for measuring the costs and benefits of projects
    competing for New Starts funding. The New Starts criteria thus serves
    as an important assessment tool for both FTA and Congress to assist us
    in deciding which projects merit the annual appropriation of scarce
    Federal discretionary resources.
                               general provisions
        Question. Section 353 of last year's transportation appropriations
    chapter in the fiscal year 1999 Omnibus Appropriations bill provided
    that discretionary grants funds for bus and bus-related facilities made
    available in this act and in the fiscal year 1998 act for the Virtual
    Transit Enterprise project were available to fund any aspect of the
    South Carolina transit integration of information project. What funds
    have been appropriated for this project, and in what accounts? Have all
    these funds been made available to the project? What follow-on costs,
    if any, are anticipated? What is the most appropriate funding category
    for this project?
        Answer. In fiscal year 1998, $997,196 and in fiscal year 1999,
    $1,210,850 was appropriated for this project in the Section 5309
    Capital Investments-Bus account. We do not anticipate any follow on
    costs in fiscal year 2000. The fiscal year 1998 funds ($977,196) were
    obligated on February 2, 1999. The South Carolina DOT has not yet
    submitted an application to FTA for the fiscal year 1999 funds. If the
    SCDOT intends to further implement this project, it should apply for
    funds under the Section 5307 Urbanized Area Formula Grants program,
    which is the appropriate account for that purpose.
        Question. Section 354 of last year's transportation appropriations
    chapter in the fiscal year 1999 Omnibus Appropriations bill amended
    TEA21 to provide that Vermont and Oklahoma are authorized to use
    transit formula grants for capital improvements to, and operating
    assistance for, intercity passenger rail service. Have either of these
    States applied transit formula funds for intercity passenger rail
    purposes in fiscal year 1998 or 1999?
        Answer. Vermont did not take advantage of the Section 354 option in
    1998. Vermont does have a grant application pending for intercity
    passenger rail service in fiscal year 1999. Oklahoma did not take
    advantage of the Section 354 option in 1998. We are unaware of any
    plans for Oklahoma to apply for transit formula funds for intercity
    passenger rail service in fiscal year 1999.
        Question. Section 360 of last year's transportation appropriations
    chapter in the fiscal year 1999 Omnibus Appropriations bill amended
    TEA21 to provide that transit providers operating 20 or fewer vehicles
    in urbanized areas with a population of at least 200,000 are authorized
    to use formula funds for operating costs in providing services to
    elderly and persons with disabilities, provided that such assistance
    does not exceed $1,000,000 annually. What transit providers does this
    provision affect? (Please include State, city, transit authority,
    number of vehicles, annualized cost of operating assistance.)
    Additionally, please describe the effects of TEA21 sections 302(c)(1)
    and (2), which directly precede the amendment added in last year's
    appropriations bill. (Please include State, city, transit authority,
    number of vehicles, annualized cost of operating assistance.)
        Answer. FTA published a Federal Register Notice on January 25,
    1999, to announce the availability of $1 million in funds from the
    Urbanized Area Formula Program to carry out the provisions of Section
    360 of the 1999 Omnibus Appropriations Act. Eligible transit providers
    were asked to submit by April 15, 1999, letters of intent to apply the
    provisions of Section 360. FTA will respond by May 14. Section 360
    affects the following transit providers, as indicated by the letters of
    intent FTA received from the localities that qualify for the funds.

    ----------------------------------------------------------------------------------------------------------------
                                                                                                         Operating
                State/City                    Transit Authority               No. of vehicles           Assistance
                                                                                                         Requested
    ----------------------------------------------------------------------------------------------------------------
    Texas:
        Arlington.....................  Handitrans...................  17 vehicles..................        $696,000
        Mesquite City.................  MTED.........................  6 vehicles...................         205,000
        City of Plano.................  City of Plano................  Fewer than 10................          16,000
        Grand Prairie.................  Grand Connection.............  8 vehicles...................         206,000
    ----------------------------------------------------------------------------------------------------------------

         Question. Please explain the effect of and reason for including
    Section 321 of last year's transportation appropriations chapter in the
    fiscal year 1999 Omnibus Appropriations bill, which is included in the
    President's fiscal year 2000 budget request, with slight modifications.
        Answer. Only Greenville, S.C., has expressed an interest in the
    provisions of section 3027(c)(1) and (2) of TEA-21. Greenville has
    applied for a grant in the amount of $315,000. Greenville currently
    operates 13 vehicles.
                                     ______

                 NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION

                     Questions Submitted by Senator Shelby

                     SAFETY PERFORMANCE STANDARDS CONTRACTS

        Question. Please list the purpose, amount and recipients of
    contracts over $50,000 issued during fiscal years 1998 and
    1999.
        Answer. Below is a list of contracts over $50,000 issued
    during fiscal year 1998 and fiscal year 1999.

            Description                                               Amount

    Fiscal Year 1998 Contracts:
        16 Side impact tests for fiscal year 1998 NCAP--Calspan
          Corporation.............................................  $273,104
        11 Frontal impact tests for fiscal year 1998 NCAP--Karco
          Engineering.............................................   214,896
        10 Offset impact tests--Karco Engineering.................   193,275
        6 Frontal impact tests for fiscal year 1998 NCAP--MGA
          Research Corporation....................................   163,206
        14 Side impact tests for fiscal year 1998 NCAP--MGA
          Research Corporation....................................   253,528
        6 Frontal impact tests for fiscal year 1998 NCAP--
          Transportation Research Center..........................   154,878
        Quality assurance for NCAP data--Conrad Technologies......    68,321
        Quality assurance for NCAP data--Alcosys, Inc.............    78,000
        Brake Testing--U.S. Army..................................    97,485
        Determination of Static Stability Factors of NCAP
          Vehicles--Sea, Inc......................................    71,535
        Cost and Leadtime for Offset Frontal Crash Protection Time
          Analysis--Ludke and Associates..........................    67,906
        Consumer Research--Global Exchange........................   145,995
        Computer and other Information Systems support for
          rulemaking activities--Information Management
          Consultants.............................................   185,771
    Fiscal Year 1999 Awarded Contracts to date:
        14 Frontal impact tests for fiscal year 1999 NCAP--Calspan
          Corporation.............................................   252,182
        4 Side impact tests for fiscal year 1999 NCAP--Calspan
          Corporation.............................................    83,692
        2 Frontal impact tests for fiscal year 1999 NCAP--MGA
          Research Corporation....................................    51,000
        17 Side impact tests for fiscal year 1999 NCAP--MGA
          Research Corporation....................................   209,040
        4 Side impact tests for fiscal year 1999 NCAP--
          Transportation Research Center..........................    69,600
        Quality assurance for NCAP data--Alcosys, Inc.............   225,000
        Consumer Research-Global Exchange.........................    90,000
                               nhtsa regulations
        Question. Please prepare a list of all final rulemakings that have
    been issued since you submitted a similar list last year.
        Answer. Below is a list of all final rulemakings published since
    last year.
                   final rules published--may 1998-april 1999
    Standard/Subject
        105--In response to a petition for reconsideration from Lucas
    Varity Light Vehicle Braking Systems, the agency, with an interim final
    rule, is delaying the compliance date of the antilock brake system
    (ABS) malfunction indicator lamp (MIL) activation protocol of the
    standard until September 1, 1999. The agency is also soliciting
    comments on this amendment (64 FR 9961--3/1/99).
        108--In response to a petition for rulemaking, the agency is
    allowing upper and lower beams to be emitted by separate dedicated
    headlamps on either side of a motorcycle's vertical centerline or by
    separate off center light sources within a single headlamp that is
    located on the vertical centerline. This represents a further step
    towards harmonization with the light standards of other nations (63 FR
    42582--8/10/98).
        Technical amendment to remove superseded paragraph relating to
    headlamps aimed by moving the reflector relative to the lens and
    headlamp housing, or vice versa from the 3/10/97 (62 FR 10710) Advisory
    Committee on Regulatory Negotiation final rule (63 FR 63800--11/17/98).
        131--Permits the use of additional light sources on the surface of
    retro reflective stop signal arms (Light Emitting Diodes [LED]) and
    permits a certain amount of the retro reflective surface to be obscured
    by mounting hardware (63 FR 29139--5/28/98).
        201--The agency permits, but not requires, the installation of
    dynamically deploying upper interior head protection systems currently
    being developed by some vehicle manufacturers to provide added head
    protection in lateral crashes. Compliance with these requirements is
    tested at specified points called ``target points'' (63 FR 41451--8/4/
    98).
        201/208/752--The agency makes permanent three interim final rules
    related to the depower of air bags: certain exclusions or special, less
    stringent test requirements in related standards that applied to
    vehicles certified to the unbelted barrier test would also apply to
    vehicles certified to the alternative sled test and modifications in
    the test dummy be consistent with respect to the instrumentation
    specified in the sled test protocol for measuring neck injury criteria
    (63 FR 45959--8/28/98).
        In April 1997, the agency issued a final rule amending its
    requirements for protecting vehicle occupants from impacts with upper
    vehicle interiors in crashes. This technical amendment corrects a
    provision specifying that the radius was to be measured along the
    surface of the vehicle interior (64 FR 7139--2/12/99).
        208--Amends the final rule published in March 1997 that expedites
    the depowering of air bags. This notice clarifies the ``corridor''
    requirements of the sled tests and makes the sled test easier to
    conduct (63 FR 71390--12/28/98).
        In response to a petition for rulemaking from VW, the agency is
    providing vehicle manufacturers greater flexibility regarding the
    location of the telltale for air bag on-off switches in new motor
    vehicles (64 FR 2446--1/14/99).
        210--In response to a petition for rulemaking, the agency is
    requiring the anchorages of all lap/shoulder belt to meet a 6,000 pound
    strength requirement, regardless of whether a manufacturer has the
    option of installing a lap belt or a lap/shoulder belt at the seating
    position (63 FR 32140--6/12/98).
        213--Adopts as final most of the amendments made by interim final
    rules (4/17/97 (62 FR 18723) and 6/4/97 (62 FR 30464) to the air bag
    warning label requirements (63 FR 52626--10/1/98).
        216--In response to petitions for rulemaking, the agency revises
    the test procedure to make it more suitable to testing vehicles with
    rounded roofs or vehicles with raised roofs (64 FR 22567--4/27/99).
        221--Requires school bus body panel joints to be capable of holding
    the body panel to the member to which it is joined when subjected to a
    force of 60 percent of the tensile strength of the weakest joined body
    panel, extends the applicability of the standard to school buses with a
    GVWR of 10,000 pounds or less, narrows an exclusion of maintenance
    access panels from the requirements of the standard, and revises
    testing requirements (63 FR 59732--11/5/98).
        225--In response to several petitions for rulemaking, the agency
    establishes a new standard that requires motor vehicle manufacturers to
    provide motorists with a new way of installing child restraints. In the
    future, vehicles will be equipped with child restraint anchorage
    systems that are standardized and independent of the vehicle seat belts
    (64 FR 10785--3/5/99).
        304--In response to petitions for rulemaking, the agency deletes
    the material and manufacturing process requirements in the standard on
    compressed natural gas fuel container integrity. The agency believes
    that this amendment will facilitate technological innovation, without
    adversely affecting safety (63 FR 66762--12/3/98).
        500--Reclassifies small passenger-carrying vehicles (such as golf
    carts) from passenger cars to ``low-speed'' vehicles and establishes a
    new FMVSS (63 FR 33193--6/17/98).
    Part Number/Subject
        533--Establishes the average fuel economy standard for light trucks
    manufactured in model year (MY) 2001 at 20.7 mpg (64 FR 16860--4/7/99).
        538--Establishes a minimum driving range for dual fueled electric
    passenger automobiles, otherwise known as hybrid electric vehicles
    (HEVs) (63 FR 66064--12/1/98).
        564/108--The agency amends part 564 and FMVSS 108 to remove the
    references to Docket No. 93-11 and add new Docket No. NHTSA 98-3397,
    which has been established to receive manufacturers' information on
    replaceable light sources (63 FR 42586--8/10/98).
        571--Revises selected FMVSSs on tires by converting English
    measurements specified in those standards to metric measurements (63 FR
    28912--5/27/98).
        Revises selected FMVSSs by converting English measurements
    specified in those standards to metric measurements (except tires) (63
    FR 28922--5/27/98).
        Technical amendment to correct typographical and other errors in
    the 5/27 final rule converting English measurements to metric (63 FR
    50995--9/24/98).
        572--Establishes specifications and qualification requirements for
    a newly developed anthropomorphic test dummy to be used in compliance
    testing for the new dynamically upper interior protection system final
    rule (63 FR 41466--8/4/98).
        Modifies the Hybrid III test dummy's clothing and shoes, and the
    hole diameter in the femur flange in the pelvis bone flesh (63 FR
    53848--10/7/98).
        575--Modifies the rollover warning currently required for small and
    mid-size utility vehicles (64 FR 11734--3/9/99).
        581--Technical amendment removes the bumper standard protective
    criteria referring to visibility requirements of the lighting standard.
    This section of the lighting standard no longer exists. The references
    to SAE standards are also obsolete (64 FR 16359--4/5/99).
        Question. What is the number and nature of the major rulemaking
    activities that are now before NHTSA?
        Answer. The agency is currently undertaking significant rulemaking
    actions in 17 areas, as follows:
        Occupant Crash Protection.--To preserve and enhance the benefits of
    air bags, the agency issued a notice of proposed rulemaking (NPRM) in
    September 1998, for advanced air bags. The proposal to upgrade FMVSS
    208, Occupant Crash Protection, would require additional air bag system
    performance tests for passenger cars and light trucks in order to
    minimize risks for infants, young children and adults who get too close
    to inflating air bags and to enhance the benefits for adults. NHTSA is
    in the process of evaluating public comments to the NPRM and continues
    to keep the channels of communication open with all interested parties,
    toward development of the final rule. A supplemental notice (SNPRM) is
    planned by September 1999, to solidify the proposal. A final rule will
    be published before March 1, 2000.
        New Family of Dummies.--In separate but related rulemaking actions,
    the agency issued NPRM's in 1998 and 1999 to add design and performance
    specifications for four new dummies: a more advanced 6-year old child
    dummy, a dummy whose height and weight are representative of a fifth
    percentile female adult, a 3-year old child dummy, and a 12-month old
    infant dummy. Final rulemaking actions on all of these dummies are
    expected by December 1999. It is likely that within the next two years
    a rulemaking will be initiated for a 95th percentile male dummy,
    following adoption of an acceptable design by the Society of Automotive
    Engineers.
        Side Impact Protection Harmonization and Upgrade.--The agency is
    continuing research toward harmonization with other countries on one
    side impact dummy. The agency also is currently developing plans for a
    future major upgrade to FMVSS 214, which could include changes in
    injury criteria and second generation side impact dummies.
        Frontal Offset Harmonization.--Additional testing on vehicles with
    depowered air bags is planned for the near future to complete the
    assessment of the European test procedure relative to the current NHTSA
    frontal tests. Cost work has been completed and an NPRM for offset
    frontal protection is in preparation. (The current draft NPRM for
    advanced air bags contains a low speed offset test procedure.)
        Head Restraint Upgrade.--In the near term, the agency will publish
    an NPRM to upgrade the current U.S. head restraint standard. The
    proposal will increase the head restraint height, set a ``backset''
    requirement and amend the current optional dynamic test to coincide
    with these new static requirements. This rulemaking will be directed at
    reducing the significant number of whiplash injuries in low-speed rear
    impacts.
        Rear Impact Protection.--The agency plans to study the potential
    for upgrades of the seat standard to address the problem of moderate to
    high speed rear impact protection. This is expected to lead to either a
    Request for Comments or an NPRM within the next two years.
        Light Vehicle Rollover.--Track testing was completed in 1998 to
    determine if certain maneuvers induce rollovers; dynamic testing
    continues toward the development of meaningful information on the
    rollover propensity of light vehicles; and research is being conducted
    to determine if an NPRM is warranted to upgrade FMVSS 216, Roof Crush
    Resistance that addresses the relationship between roof crush, occupant
    head room and occupant injuries in rollover crashes.
        Vehicle Safety for Children.--An independent panel of experts was
    formed in January 1999--under the leadership of the National SAFE KIDS
    Campaign--to examine the issue of trunk entrapment. The agency is
    observing and providing technical assistance to this panel and will
    make decisions about potential rulemaking actions, following panel
    recommendations.
        Lamps, Reflective Devices and Associated Equipment.--Priority
    rulemaking actions on FMVSS 108 are a final rule to reduce the problem
    of glare from Daytime Running Lamps (DRLs)(also addresses international
    harmonization issues)and an NPRM on headlamp mounting heights for LTVs
    to reduce glare.
        Safety for Disabled Americans.--An NPRM has been issued to promote
    safety and preserve the mobility of people with disabilities. The
    proposal identifies certain safety features that can be altered, if
    needed, when vehicles are modified for people with disabilities. By
    specifying which modifications may be made, the proposed rule provides
    universal, comprehensive guidance to all modifiers, thereby enhancing
    the safety of modified vehicles. The final rule is expected by
    September 1999.
        Ejection Mitigation Out of Vehicle Windows.--The agency is planning
    to publish a Request for Comments in 1999 on ejection mitigating
    glazing and dynamic inflatable systems that could mitigate occupant
    ejection out of glazing. Based on the comments on this notice, and
    near-term research, the agency will decide whether to publish a notice
    concerning an ejection-mitigating test procedure for rollover
    situations.
        Fuel System Integrity.--Currently, a Rulemaking Support Paper (RSP)
    is in preparation to upgrade the rear impact requirements of FMVSS 301.
    An NPRM is expected in late summer 1999.
        Door Locks and Door Retention Components.--An NPRM to upgrade the
    side hinged door requirements of FMVSS 206 is planned for August 1999.
    This will help mitigate ejections in rollovers. The NPRM will propose
    new tests for side, hinged doors and ask for comments on upgrades to
    sliding doors and rear doors.
        Other rulemaking areas include changes and/or upgrades to.--FMVSS
    210, Seat Belt Assembly Anchorages; FMVSS 122, Motorcycle Brake
    Systems; FMVSS 218, Motorcycle Helmets; and a Negotiated Rulemaking on
    Part 567, Vehicle Certification for multi-stage vehicles.
                              nhtsa reprogrammings
        Question. Please provide the amount and description of all
    reprogrammings or transfers of funds that occurred during fiscal year
    1998 or thus far in fiscal year 1999 in any of NHTSA's accounts.
        Answer. During fiscal year fiscal year 1998, NHTSA received
    Congressional approval to reprogram $1.111 million in carryover
    balances from its Safety Assurance, Safety Performance, Traffic Safety
    and Plans and Policy contract programs to process and track requests
    made by the public for installation of air bag on-off switches. This
    amount was to supplement dedicated program funding for the development,
    printing and distribution of information brochures and request forms
    and for the design and development of a database system to collect
    information on requests for, and approvals and installation of, on-off
    switches. Due to the low amount of requests received, the majority of
    this funding was not required for this effort and $1 million was
    returned to the program offices.
        In fiscal year 1999, NHTSA received approval to reprogram a total
    of $2.35 million derived from various Research and Development programs
    and from the Highway Safety Improved Identification program. This
    funding will cover a portion of the additional costs resulting from the
    unforeseen technical complexity of the National Advanced Driving
    Simulator program and the related schedule slippage and rate increases.
                              unobligated balances
        Question. Please provide a list of any unobligated funds and
    carryover funds from previous fiscal years.
        Answer. In the Operations and Research appropriation, an
    unobligated balance of $13.816 million was brought forward and made
    available for use in fiscal year 1999. This represents 7.1 percent of
    the total available for spending in fiscal year 1998. Approximately
    56.7 percent of the carryover ($7.837 million) is earmarked for the ITS
    program.
        The following is a listing of unobligated balances brought forward:

                           [In thousands of dollars]

    Contract Program
        Safety Performance........................................       $58
        Safety Assurance..........................................       124
        Highway Safety............................................     1,056
        State and Community Services..............................       136
        Research and Development..................................     9,673
        General Administration....................................       128
        Salaries and Benefits.....................................     1,196
        Headquarters and Regional Operating Expenses..............       489
        Miscellaneous.............................................       956
                        --------------------------------------------------------------
                        ____________________________________________________

          Total...................................................    13,816

        Safety Performance.--Carryover is associated with underruns in the
    Vehicle and Consumer Safety program, NCAP, Fuel Economy and the Theft
    program.
        Safety Assurance.--Carryover is associated with cost underruns in
    the program areas of Defects Investigation, Vehicle Safety Compliance
    and the Hotline.
        Highway Safety.--Carryover is associated with delays in contract
    awards in the areas of Safe Communities ($375,000) and miscellaneous
    contract programs ($181,000). The School Bus Restraints carryover
    funding ($500,000) will be applied to an Occupant Research program.
        State and Community Services.--Carryover is associated with delays
    in contract awards in the Alcohol ($75,000) and the Occupant Protection
    ($53,000) programs. The remaining $8,000 is associated with cost
    underruns in the Records and Enforcement areas.
        Research and Development.--$7.837 million is earmarked for the ITS
    program and resulted from delays in awards of ITS procurements.
    $500,000 is associated with the delay in awards of Biomechanics
    contracts; $407,000 is associated with Special Crash Investigations
    that were not completed in fiscal year 1998 and the remaining $929,000
    is for purchases of parts and services related to a variety of Motor
    Vehicle Research programs.
        General Administration.--Carryover is the result of a delayed
    contract award for the Injury Severity Index study.
        Salaries and Benefits.--Carryover resulted from delays in hiring
    and will be applied to the fiscal year 1999 personnel costs.
        Headquarters and Regional Operating Expenses.--This amount
    comprises carryover from both field and headquarters operating expenses
    and was the result of delayed procurement actions as well as
    postponement of planned trips.
        Miscellaneous.--Miscellaneous underruns and deobligations from
    prior years totaled $956,000. Funds will be used to cover a shortfall
    in NHTSA's salaries and benefits.
                       safety performance program funding
        Question. NHTSA is proposing to increase funding for the Safety
    Performance Standards program by more than 100 percent. Why is this
    large increase necessary?
        Answer. The areas of increase are as follows:
        Safety Standards Support.--+ $600,000 Half of the requested
    increase in this area will support NHTSA's major new responsibilities
    with respect to international harmonization. The agency is committed to
    working with other countries to develop global motor vehicle safety
    standards that will advance safety protection while eliminating
    barriers to trade. The budget request in this program also reflects a
    new emphasis on enhancing vehicle safety for people with disabilities.
    The agency would take a more pro-active approach in this area through
    improved problem identification and assessment of needs. In addition,
    NHTSA will re-examine some of its outdated standards. These standards
    include the motorcycle braking standards, mirror standards, and others.
    This increase also supports additional cost and lead time work required
    for upcoming rulemaking actions.
        New Car Assessment Program (NCAP).--+$2,426,000 This increase is
    needed to enable the agency to regain much of the vehicle fleet
    coverage that has been lost due to reduced carry-over of data resulting
    from changes in restraint system designs. It will allow the agency to
    provide the crash test information expected by the public--frontal and
    side impact information on 80-90 percent of new vehicles; to conduct
    approximately 10-15 tests with the 5th percentile female dummy to
    evaluate the use of this safety dummy in providing information to small
    adults who are at greater risks in high speed frontal crashes; to
    provide stopping distance test information to consumers for all makes
    and models tested in NCAP, for use in their vehicle buying decisions;
    and to test an array of vehicles prior to crash tests to evaluate
    prospective measures for headlighting performance.
        Consumer Information.--+$814,000 (net increase of $467,000 over and
    above what is currently being allocated out of the NCAP and Safety
    Standards Support programs). This increase is necessary to respond to
    requests from Congress and the National Academy of Sciences (NAS) for
    NHTSA to broaden the scope of the information it provides to consumers,
    improve the presentation of the information, and expand the
    dissemination outlets it uses to distribute the information.
    Specifically, the increase will support: consumer research and
    materials development for emerging issues such as a rollover propensity
    rating, anti-lock brakes, theft prevention, adapted vehicles, and
    previously owned vehicles; improvements in the information and services
    currently provided by the agency including warning labels, public
    service announcements and brochures; and expansion of partnerships to
    leverage government resources for delivering vehicle safety information
    to consumers.
        Fuel economy.--+$60,000 The fiscal year 2000 budget request will
    enable the agency to maintain the ``plants and lines'' database that
    provides pertinent details of automobile manufacturing plants, such as
    products, capacities, employment levels, financial data, and product
    planning information. This information is used to analyze industry
    capabilities to improve fuel economy performance. Without funding to
    support the Volpe Centers' efforts, NHTSA will not be able to
    adequately maintain this database.
        Theft and other.--+$20,000 Funding above the fiscal year 1999 level
    is needed to carry out the analysis of insurer reports required by law.
    49 U.S.C. 33112(h) requires that the insurance information obtained by
    the Secretary from insurance and rental/leasing companies shall be
    periodically compiled and published in a form that will be helpful to
    the public, including Federal, State, and local police and Congress.
        Question. If the Safety Performance Standards Program was funded at
    the fiscal year 1999 level, how would the funds be allocated.
        Answer. If the Safety Performance Standards Program was funded at
    the fiscal year 1999 level, NHTSA would level fund the Safety Standards
    Support and Theft line items. NCAP funds would be reduced and the Fuel
    Economy program would be eliminated to absorb other mandatory
    administrative costs.
                     harmonized side impact standard report
        Question. Senate Report 105-249 directed NHTSA to submit a progress
    report regarding the development of a harmonized side impact standard.
    What is the status of the report?
        Answer. This report has been completed by NHTSA and should be
    delivered to Congress in late May or early June 1999.
                      international harmonization projects
        Question. What projects are planned regarding international
    harmonization and what amount are you programming for each project?
        Answer. The agency's overarching objectives on international
    harmonization are: (1) to advance vehicle safety by identifying and
    adopting best safety practices from around the world or by developing
    new regulations reflecting technological advances and anticipated
    safety problems; (2) to establish globally harmonized motor vehicle
    safety regulations to the extent consistent with maintaining or
    improving existing levels of vehicle safety performance; (3) to
    preserve our ability to adopt regulations that meet U.S. vehicle safety
    needs; and (4) to ensure the opportunity for public participation
    through means such as facilitating access to information and
    opportunities to comment and discuss agency proposals. To reach this
    goal, the agency's objective for fiscal year 2000 is to continue
    working on a multilateral and on a bilateral basis. The following are
    examples of multilateral and bilateral agency international activities.
    Multilateral Agency International Activities
        (a) Continued substantive participation in the activities of the
    Working Party on the Construction of Vehicles (WP.29) of the Economic
    Commission for Europe (ECE).
        (b) On June 25, 1998, the U.S. became the first signatory to the
    United Nations/Economic Commission on Europe (UN/ECE) Agreement
    Concerning the Establishing of Global Technical Regulations for Wheeled
    Vehicles, Equipment and Parts Which Can Be Fitted And/or Be Used on
    Wheeled Vehicles (the ``1998 Agreement''). The 1998 Agreement provides
    for the establishment of global technical regulations regarding motor
    vehicle safety, emissions, energy conservation, and theft prevention.
    The Agreement is expected to enter into force October 1999 if the ECE,
    Japan, and two other countries have signed it by that date. The
    agency's goal would then be to effectively implement the Agreement.
        (c) Having institutionalized a process for the determination of
    functional equivalence of motor vehicle safety regulations in fiscal
    year 1998, the agency plans to continue to use that process to reduce
    differences between U.S. and foreign vehicle safety standards,
    consistent with the interests of vehicle safety.
        (d) The agency will continue to lay the basis for future
    international regulatory cooperation by fulfilling the agency's
    commitments in the implementation of the International Harmonized
    Research Agenda (IHRA), especially in the areas of biomechanics, side
    and frontal impact. A detailed description of the IHRA projects is
    presented below.
        (e) Continued substantive participation in the Road Transport
    Harmonization Project of the Transportation Working Group of the Asia
    Pacific Economic Cooperation (APEC), while promoting the adoption by
    the APEC economies of globally harmonized motor vehicle safety
    regulations.
        (f) Work through the Automotive Standards Council of the North
    American Free Trade Agreement (NAFTA) in addressing the
    incompatibilities among the vehicle safety standards of the member
    countries of NAFTA.
        (g) Continued participation in interagency meetings on trade and
    regulatory multilateral matters.
    Bilateral Agency International Activities
        (a) Continued contribution to the implementation of the
    Administration's New Transatlantic Agenda and the Transatlantic
    Economic Partnership in those areas pertaining to motor vehicle
    regulatory cooperation.
        (b) Continued responsiveness to the recommendations of the
    Transatlantic Business Dialogue concerning harmonization of motor
    vehicle regulation.
        (c) Continued implementation of bilateral Memoranda of
    Understanding such as those concluded with Canada, Mexico, Japan and
    the Russian Federation.
        (d) Continued participation in interagency meetings on trade and
    regulatory bilateral matters.
        The dollar amount for travel associated with the above activities
    is $90,000.
        The agency has also programmed specific amounts for the following
    rulemaking and research harmonization projects:
        Brakes.--The United States and Europe have adopted harmonized, but
    not identical, light vehicle braking standards. Tests of the braking
    performance of vehicles manufactured to the U.S. and European standards
    will show if the standards are ``functionally equivalent.'' No such
    testing has been done. The agency has budgeted $100,000 for this
    testing in its fiscal year 2000 budget request.
        Anti-lock Brake Systems (ABS).--Europe currently requires that, if
    ABS is offered on cars and vans, the ABS must pass certain performance
    tests. NHTSA would like to test current U.S. vehicles to these European
    requirements to see if the European requirements are appropriate for
    the U.S. standards. The agency has budgeted $100,000 for this testing
    in the fiscal year 2000 budget request.
        Tires.--The current U.S. tire safety standards are 30 years old and
    based on obsolete bias tires. The United Nations Group of Tire Experts,
    including a NHTSA representative as the Delegate for the United States,
    has decided to develop a harmonized worldwide tire standard. The tire
    industry has developed a proposed global tire standard and petitioned
    NHTSA to adopt the global tire standard in place of the current U.S.
    tire standard. NHTSA wants to test tires to the current U.S. tire
    standard and the proposed global tire standard to assure that any
    harmonization efforts are based on accurate information about the
    safety impacts of such harmonization. The agency has budgeted $100,000
    for this testing in the fiscal year 2000 budget request.
        As mentioned earlier, under the International Harmonized Research
    Activities (IHRA), NHTSA also coordinates worldwide safety research to
    develop a solid foundation of research findings for future harmonized
    safety regulations worldwide. IHRA is a joint effort of about 12
    countries, and is comprised of a steering group made up of government
    only representatives from the member countries and six working groups.
    The following details some of the activities under IHRA:
        Pedestrian.--The IHRA pedestrian safety working group has agreed to
    work toward a comprehensive test procedure for pedestrian protection.
    Substantial testing and evaluation will be needed to bring this to
    fruition. A complication in the harmonization effort is a proposed
    European Commission directive on pedestrian safety. It will be
    necessary to ensure that this proposed directive does not conflict with
    the IHRA comprehensive procedure, and that it does not diminish
    pedestrian safety in the U.S. vehicle fleet. NHTSA budgeted $250,000
    for this project.
        ITS.--The ITS Working Group continues to explore opportunities for
    international research coordination in four areas: Driver Workload,
    Direct Safety, Behavioral Adaptation, and Usability. At its most recent
    meeting, eight problem areas were selected and a lead-country was
    identified. The next step is to identify existing relevant projects in
    each country and begin to synthesize the work. This will be followed by
    attempts to coordinate the work and seek synergistic results. The
    agency has budgeted about $200,000 for this project.
        Side Impact Protection.--The side impact working group is analyzing
    the side impact safety problem with the objective of developing an
    uniform test procedure and development of harmonized side impact injury
    criteria, as well as adopting a suitable dummy for use in side crash
    testing. The proliferation of side airbags in many cars and their
    potential for injuries to out-of-position children is of concern. NHTSA
    is conducting tests to determine the risks, if any, posed by side
    airbags to out-of-position children in static and dynamic tests of
    production vehicles. NHTSA is planning research to develop a pole
    impact test procedure for enhancing side impact protection. The agency
    has budgeted approximately $590,000 for side impact research under this
    program.
        Biomechanics.--The overall mission of the IHRA Biomechanics Working
    Group is the harmonization and coordination of world wide impact
    biomechanics research efforts to develop injury criteria and
    anthropometric test devices for all major crash situations. The group's
    current focus is on harmonizing efforts in side impact biomechanics. To
    accomplish this, the group has been charged to: (1) analyze world-wide
    crash data and quantify the type and severity of injuries that
    constitute the side impact problem; (2) analyze human biomechanical
    data to identify meaningful injury functions that address the above
    safety problems; (3) examine the performance capabilities of existing
    side impact dummies with respect to their biofidelity and risk
    assessment capabilities, provide recommendations to the IHRA Steering
    Committee as to the most suitable dummy and injury assessment criteria,
    and recommend any necessary refinements to both. While the U.S.
    research activities supporting these efforts are embedded within the
    agency's NTBRC research budget, an additional $10,000 per year has been
    budgeted for contingency expenses to support these activities.
        Frontal Crash Protection.--Frontal crash protection is an
    international problem, and is being addressed through the International
    Harmonization Research Activities (IHRA) advanced offset frontal crash
    protection working group. The IHRA working group is working toward the
    development of comprehensive test procedures for improving frontal
    crash protection. Extensive testing and computer modeling are planned
    for meeting this objective. The agency budgeted $300,000 for this
    project.
        Vehicle Compatibility.--Vehicle aggressivity and fleet
    compatibility also is an international problem, and is being addressed
    through the International Harmonization Research Activities (IHRA)
    vehicle compatibility working group. The IHRA working group is working
    toward identifying and developing comprehensive test procedures for
    improving vehicle compatibility. Testing and extensive computer
    modeling are planned for meeting this objective. The agency budgeted
    $500,000 for this project.
                         consumer information programs
        Question. How much did you spend or plan to spend on all consumer-
    related information activities in fiscal year 1998 and in fiscal year
    1999 relevant to the Safety Performance Program?
        Answer. In fiscal year 1998 Congress set aside $247,000 from the
    NCAP program for consumer information. In addition, $100,000 was
    allocated from the Safety Standards Support budget for consumer
    information, for a total of $347,000. In fiscal year 1999, the same
    amount of NCAP and Safety Standards Support funds were allocated for
    consumer information programs.
        Question. What is the basis for the amount requested in fiscal year
    2000 for consumer-related information programs?
        Answer. Consumers need high quality vehicle safety information to
    make informed vehicle purchasing and other safety decisions. Both
    Congress and the National Academy of Sciences (NAS) have recently
    called for NHTSA to broaden the scope of the information it provides to
    consumers, improve the presentation of the information, and expand the
    dissemination outlets it uses to distribute the information.
        NHTSA has used consumer information to effectively address traffic
    safety issues such as impaired driving, speeding, and seat belt usage.
    With sufficient resources, the agency is confident that consumer
    information can also be used effectively to significantly increase the
    public's awareness and consideration of safety when purchasing a
    vehicle and how to properly use vehicle safety features.
        The fiscal year 2000 budget request seeks to reach a greater share
    of the public that needs vehicle safety information through the
    expansion of current activities as well as the development and
    implementation of major new initiatives. The consumer information
    program will serve as the focal point responsible for marketing
    research, planning, coordination, and development of vehicle safety
    consumer information activities, and for determining the most cost
    effective means of delivering them. The program will increase
    activities to support and promote NCAP program information and on the
    understanding and proper use of safety features. It will also develop
    strategies for engaging and building on key public and private sector
    partnerships for promoting and disseminating vehicle safety
    information.
        Question. Please explain how the funds requested in fiscal year
    2000 will be allocated for consumer-related information programs.
        Answer. The requested $814,000 will be allocated as follows:
      --$347,000 will be spent to consolidate the current vehicle consumer
            information program by including the amount of funds from the
            NCAP ($247,000) and Safety Standards Support ($100,000) budgets
            that were allocated to support consumer information activities
            in fiscal year 1999. These funds will continue present NCAP and
            other consumer information materials development and
            dissemination.
      --$150,000 will be used to increase the marketing, distribution and
            outreach for the ``Buying A Safer Car'' and ``Buying A Safer
            Car For Child Passengers'' brochures and other current
            materials being produced. This effort will emphasize outreach
            to new partners and constituents such as automobile dealers,
            the insurance industry, child safety advocates, the public
            health community and consumer groups.
      --$100,000 will be used to support partnerships with organizations
            such as Championship Auto Racing Teams, Inc. (CART) to develop
            activities and materials to deliver motor vehicle safety
            information to consumers through partner access to the media,
            corporate sponsors, and fans.
      --$150,000 will be used for consumer research, working with partners,
            and materials development for emerging issues such as a
            consumer information initiative on a rollover propensity
            rating. Other issues such as anti-lock brakes, theft
            prevention, adapted vehicles, and previously owned vehicles
            will also be addressed through consumer research and materials
            development and dissemination.
      --$67,000 will be used to examine and improve information and
            services currently provided by the agency in support of
            consumer information activities and programs. This includes
            initiatives to improve warning labels, public service
            announcement and brochures.
                       new car assessment program (ncap)
        Question. How do you intend to spend the funds for NCAP? Please
    compare that to last year's spending allocation. Please delineate
    specific projects, activities, and associated amounts.
        Answer. In fiscal year 2000, the agency expects to crash
    approximately 90 vehicles, at a total cost of $4,332,000. This would
    allow the consumer to have frontal and side safety information on 85 to
    90 percent of the vehicles sold in the USA. This is roughly the
    percentage of vehicles covered before the frontal air bags were
    redesigned in 1998. Due to leveled funding, in fiscal year 1999 testing
    was significantly reduced and fleet coverage was approximately 75
    percent. The funding increase will provide consumers safety information
    on a greater proportion of the vehicle fleet.
        The remaining fiscal year 2000 NCAP funds of $924,000 will be used
    to evaluate the use of the 5th percentile female dummy in frontal NCAP
    testing and to explore crash avoidance NCAP activities. The specific
    projects and costs for fiscal year 1999 and fiscal year 2000 are given
    below:

                                  NCAP FUNDING
                             [Dollars in thousands]
    ------------------------------------------------------------------------
                                                             Fiscal year
                                                       ---------------------
                                                           1999       2000
    ------------------------------------------------------------------------
    Frontal NCAP......................................     $1,430     $2,560
    Side NCAP.........................................        953      1,772
    NCAP Promotional Program..........................        247  .........
    NCAP 5th percent Female Dummy Testing.............  .........        724
    Crash Avoidance Demonstration Program.............        200        200
                                                       ---------------------
          TOTAL.......................................      2,830      5,256
    ------------------------------------------------------------------------

        Question. Assuming the Safety Performance budget was funded at
    fiscal year 1999 levels, would NHTSA support increasing funding for
    NCAP above the fiscal year 1999 level at the expense of another
    program?
        Answer. With the rapid introduction of advanced safety technologies
    into the new vehicle fleet for both frontal and side impact protection,
    NCAP funding at the fiscal year 1999 level would provide consumers with
    relative crashworthiness safety information on less than 70 percent of
    the new vehicle fleet. The increased funding request for fiscal year
    2000 will provide consumer information for both front and side crash
    protection on approximately 85 percent of the new vehicle fleet and
    will provide evaluation of the small female dummy in assessing frontal
    impact safety for a much larger segment of the population. This small
    female dummy is scheduled for introduction as a regulatory device in
    July 1999.
        In fiscal year 1999, NHTSA efficiently utilized vehicle compliance
    testing funds to meet dual goals--assessing compliance to Federal Motor
    Vehicle Safety Standard (FMVSS) 208 belted occupant requirements and
    increasing the number of frontal NCAP tests. The agency had planned to
    test 16 vehicles in the FMVSS 208 barrier compliance test program.
    These tests were conducted at the 35 mph NCAP speed with the intent to
    retest any vehicles at the 30 mph compliance speed if any potential
    non-compliant vehicles were found. No retests were necessary. This dual
    use of funds was discussed with Congress. However, in fiscal year 2000,
    FMVSS 208 belted occupant barrier compliance testing is not scheduled.
    Therefore, the agency has no options to supplement NCAP funds.
                      volpe transportation systems center
        Question. How did you conduct or pay for the plants and lines
    database during fiscal year 1999? Did the Volpe Transportation Systems
    Center maintain the database at no charge to NHTSA?
        Answer. Due to fiscal year 1999 budget reductions, there was no
    funding available to pay for the plants and lines database during
    fiscal year 1999. However, early in the fiscal year the Volpe
    Transportation Systems Center voluntarily made some needed
    modifications to the database at no charge to NHTSA.
        Question. Could the Volpe Center continue the maintenance of the
    plants and lines database during fiscal year 2000?
        Answer. Only if NHTSA is authorized additional funding to support
    the Volpe Centers' efforts.
                      safety defects investigation program
        Question. NHTSA officials and reports state that in implementing
    the Government Performance and Results Act of 1993 for the Safety
    Defects Investigation program, the measurement of performance is the
    average time to complete a defect investigation. How does this
    measurement provide useful information about the impact of this
    program? Why doesn't the safety defects performance measure reference
    NHTSA's mission goals to save lives, prevent injuries, and reduce
    traffic-related and other economic costs?
        Answer. The length of time it takes to complete a defects
    investigation has a direct impact on when a manufacturer conducts a
    safety recall campaign. In most instances where NHTSA is conducting an
    investigation, the manufacturer has not completed its own
    investigations and does not believe there is a safety-related problem.
    It is often only due to NHTSA's examination of the problem and its
    consequences that manufacturers recognize the safety implications and
    agree to conduct recalls. Therefore, the more expeditious NHTSA is in
    conducting a defect investigation, the sooner the motoring public will
    receive corrective action for defective motor vehicles and motor
    vehicle equipment, thus reducing both the severity and occurrence of
    crashes. NHTSA's mission to save lives, prevent injuries, and reduce
    traffic-related and other economic costs is clearly impacted by the
    amount of time it takes to complete an investigation and convince the
    manufacturer that a safety recall is warranted. However, it would be
    difficult, if not impossible, to measure the effect of our program on
    these goals directly. The majority of defect recalls are performed to
    correct conditions that might otherwise create safety problems. It is
    impossible to precisely compute the benefits from such recalls. For
    example, we often persuade manufacturers to recall vehicles that
    exhibit fuel leaks. Such leaks can lead to fires, which could clearly
    cause death and serious injury. However, no one could possibly
    calculate the number of fires that would have occurred in the absence
    of a recall, or estimate the actual consequences of such potential
    fires. Moreover, a recall may be conducted to remedy a safety defect
    that is not present in all recalled vehicles. Sometimes the
    manufacturer or dealer can inspect the vehicles and determine which
    vehicles will be affected; other times the manufacturer may be able to
    isolate quality control problems on an assembly line which accounted
    for a problem. However, frequently, manufacturers cannot isolate
    exactly which vehicles are manufactured with the defect. Thus, it is
    impossible to quantify the lives saved, injuries prevented, and
    economic costs saved due to the Safety Defects Investigation program.
        Question. What are the limiting factors that determine the ability
    of NHTSA to investigate safety defects? How does the fiscal year 2000
    budget request address those factors?
        Answer. The ability of NHTSA to investigate safety defects is
    limited by funding constraints in several ways. Aside from general
    limitations on staff and funding to conduct tests of potentially
    defective vehicles and items of equipment, there are a number of
    specific areas for which we have sought additional funding in fiscal
    year 2000. These include the hiring of an engineer/investigator to
    support NHTSA defect investigations through on-site investigations of
    crashes and vehicle inspections; the hiring of an engineer/investigator
    to monitor and investigate small population vehicle groups such as
    transit buses, recreational vehicles, motorcycles, and fire and rescue
    vehicles, for which the consequences of a vehicle defect can be
    catastrophic; obtaining the expertise and equipment to conduct
    computer-aided design analyses of vehicle components; and enhancing the
    defects database to maintain consistency with today's industry
    definitions, thereby improving the data evaluation process necessary to
    identify potential defects. Automotive design is more complex now and
    vehicular safety systems and features have become a prominent showcase
    for state of the art manufacturing design. As a result, the issues
    NHTSA investigates have become more technically challenging and require
    more on-site inspections, require additional analyses which can be
    provided through the use of computer aided design, and require more
    complex testing and analysis.
        NHTSA's fiscal year 2000 budget request anticipates these needs
    with the request of an additional $665,000 in funding above the fiscal
    year 1999 level for the defects investigation program.
        Question. As directed by last year's Senate report, please detail
    why additional funding is necessary to continue monitoring and
    investigating small population vehicle groups.
        Answer. The additional funding received for fiscal year 1999 has
    allowed NHTSA to focus more closely on small vehicle and populations
    such as heavy trucks, transit buses, motorcycles, and recreational
    vehicles. While the number of vehicles in each of these groups may not
    be large, the results of defective components or design can be
    catastrophic. For instance, multiple vehicle crashes involving large
    trucks result in a disproportionate number of fatal crashes. Similarly,
    the injury rate for motorcyclists is several times greater than that
    for passenger cars. Problems involving vehicles which carry a large
    number of passengers, such as transit buses, can also have catastrophic
    consequences because of the sheer numbers of people involved.
    Additionally, recreational vehicles frequently involve second stage
    manufacturers who may not be familiar with the underlying vehicles
    which they are converting. All of these vehicle groups require special
    screening methods in order to be effectively monitored for safety
    problems. The drivers/owners of these vehicles often do not file
    complaints with NHTSA, so it is important to develop working
    relationships between NHTSA and fleets and owner/operators so that
    safety problems will be identified and corrected in these vehicle
    groups. Furthermore, the manufacturers of some of these vehicles are
    small companies that do not necessarily have sophisticated records on
    customer complaints, engineering changes, etc., that are maintained by
    the large manufacturers, nor do they know what constitutes a safety
    defect or when it should be reported to NHTSA. Thus, an investigation
    sometimes requires educating the manufacturers of these vehicles as to
    their responsibilities.
        In fiscal year 1999, NHTSA entered into a contract to obtain the
    services of an engineer to develop and institutionalize relationships
    with the users of some of these small population vehicles. As these
    contacts are developed, information is also gathered about problems
    experienced that may be safety-related. The primary focus of this
    effort has been on heavy trucks. Despite the fact that this project is
    in its infancy, several investigations have already been initiated. To
    date in fiscal year 1999, seven heavy truck investigations have been
    opened, resulting in three recalls, with three investigations ongoing.
    An additional ten investigations have been opened into alleged problems
    in transit buses, recreational vehicles, motorcycles, and trailers. Of
    these, five have resulted in recalls, with four still ongoing. Thus,
    the initial results of our efforts in this regard appear to be
    successful; however, the true measure of success can only be determined
    after further analysis of our continuing efforts with vehicle owners,
    operators and manufacturers.
                             highway safety program
        Question. How did you improve the allocation or targeting of the
    Highway Safety funds since last year? How is this allocation consistent
    with your performance goals?
        Answer. For the most part, the Highway Safety funds are allocated
    consistent with last year's budget request. The majority of the highway
    safety program funds are allocated to programs targeted at achieving
    the agency's alcohol and belt goals, to reduce alcohol-related
    fatalities to 11,000 by 2005 and to increase seat belt usage to 85
    percent by 2000 and 90 percent by 2005. Funding is also included to
    provide for programs mandated by TEA-21.
        NHTSA published a new strategic plan in October 1998 that created a
    new strategic outcome goal of reducing the number of highway-related
    fatalities and injuries by 20 percent by 2008. The agency's annual
    performance plan includes that overall goal, plus two intermediate
    outcome goals: (1) to reduce the occurrence of crashes; and (2) to
    mitigate the consequences of crashes. The performance plan ties each
    highway safety program to one of these intermediate outcomes.
        Question. If the highway safety program were level funded, how
    would you allocate the funds? Please explain your proposed allocation
    within the context of your performance goals and strategic plan.
        Answer. There would be significant reductions in some of the
    highway safety programs under a level-funded budget. The agency would
    attempt to include funding for all of the Departmental and agency's
    Strategic Plan performance goals. This would require making changes to
    assure continued minimum program levels and to fund important new
    initiatives at base start up levels. Consideration would also be given
    to requirements mandated in TEA-21 which directed the agency to develop
    a program to train law enforcement officers on motor vehicle pursuits
    conducted by the officers. This would require an increase in the
    Traffic Law Enforcement budget over fiscal year 1999 levels.
        Two important programs not funded in fiscal year 1999--Safe
    Communities and Emerging Traffic Safety Issues (Older Drivers and
    Aggressive Driving)--would receive funding in fiscal year 2000. Because
    these emerging issues need attention, we will divert funds from other
    important areas in order to focus on those issues. The research program
    would need to receive increased funding to assure that the agency does
    not fall behind in either the identification of looming problems or
    preparing tested countermeasures for traffic safety programs three to
    five years in the future. A funding increase for the National Occupant
    Protection Usage Survey is needed to conduct timely and vital
    assessments of the Occupant Protection program. The Records and
    Licensing program budget would have to be increased to assure continued
    progress as states improve their traffic records technology and
    graduated licensing programs.
        Other program budgets would have to be reduced in varying amounts
    to meet budget constraints while attempting to assure minimum loss of
    program effectiveness. The gains in seat belt usage rates, which have
    increased under the highly focused Buckle Up America initiative could
    decelerate; the increased emphasis targeting impaired driving by youth
    would be diminished; and overall traffic safety activities, focusing on
    hard to reach and diverse groups often over-represented in traffic
    crashes, fatalities and injuries would lose momentum. These and
    continued budget constraints could have a negative impact on meeting
    the agency's highway safety performance goals.
                            safe communities program
        Question. What is the status of your program evaluation efforts?
    What have you learned about the benefits and costs of the Safe
    Communities initiative? Why is it important to increase the number of
    sites to 1000 in fiscal year 2000?
        Answer. The Safe Communities evaluation program is fully
    operational and is yielding positive initial results and best practices
    information. The program evaluation efforts consist of demonstration
    and evaluation grants awarded to four communities. Two cooperative
    agreements were awarded in fiscal year 1996 to The Greater Dallas
    Injury Prevention Center and to East Carolina University. These grants
    will conclude in September 1999, although the Dallas project is in the
    process of requesting a brief time extension to allow additional time
    to document results. In fiscal year 1997, two additional grants were
    awarded, one to Rhode Island Hospital in Providence, and one to the
    Alaska Medical Center, each of which are scheduled to conclude in
    September 2000.
        Fiscal year 1998 funds are being used for a cooperative agreement
    with the American Hospital Association/Hospital Research and
    Educational Trust to integrate the Safe Communities model with a
    continuous quality improvement overlay into an existing network of
    community health improvement programs. This effort will expand the
    scope of these existing community health improvement programs to
    include a traffic safety component.
        Information about costs and benefits will be available at the
    conclusion of these projects. Interim results, however are positive.
    For example, the Dallas project continues to experience increases in
    seat belt and child safety seat use as a result of the project's
    interventions in the community. Following educational programs
    conducted at one community health clinic, car seat use rose from
    approximately 35 percent to 90 percent in those vehicles where the
    drivers were wearing seat belts. Seat belt use among Hispanic drivers
    in Dallas, which was less than 60 percent prior to the educational
    program, is approaching and in some cases surpassing the national
    average of 70 percent.
        NHTSA would like to have a much larger and sustained network of
    effective Safe Communities to deliver priority traffic safety programs
    at the local level. The 1,000 Safe Communities for fiscal year 2000 is
    a nationwide goal. These 1,000 programs will provide the foundation for
    an on-going institutional framework for local implementation of
    national programs. Programs such as Buckle Up America and Partners in
    Progress will not be effective if they are only implemented at the
    national level. Safe Communities possess huge potential for reducing
    injuries and costs associated with motor vehicle crashes, and
    implementing additional Safe Communities programs will yield greater
    reductions in injuries and fatalities. This model affords communities
    an opportunity to examine their unique problems and develop local
    solutions that are based upon national programs. The Buckle Up America
    and Partners in Progress programs have been successful in large part
    because of the involvement of communities who tailored the national
    program to meet local needs.
        Question. Please explain how the $2,2500,000 would be allocated.
    What is the empirical basis for the amount requested?
        Answer. Because the Safe Communities program is shifting from being
    largely a demonstration program to one of technology transfer, the core
    of the program for fiscal year 2000 is transferring strategies and best
    practices to existing and future Safe Communities sites. In so doing,
    Safe Communities programs will be well-positioned to deliver injury
    prevention and control programs to reach agency impaired driving,
    safety belt use and other traffic safety goals. The following elements
    and basis for the amount requested are essential to making that shift:
        $400,000 Safe Communities Service Center and related materials.--
    Providing support to current and future Safe Communities through
    responding to requests for information, coordinating community-based
    training, maintaining and expanding a web site, publishing a Service
    Center bulletin, maintaining and updating a database of Safe Community
    sites, expanded services to other modes and their local programs, and
    the development of how-to handbooks and marketing materials.
        $1,000,000 Peer-to-peer technical assistance.--NHTSA has found that
    engaging peers to educate their colleagues is an effective tool in
    expanding programs. Peer-to-peer programs afford professionals the
    opportunity to share their expertise and best practices. Professionals
    who are involved in the program are in the best position to assist
    colleagues in tailoring programs to that particular profession, such as
    physicians, prosecutors, academia, etc. This effort includes (1) the
    creation of a ``Network of Injury Prevention Medical Professionals,'' a
    trained group of experts who will be available to educate their peers
    on the effectiveness of the Safe Communities model; (2) regional best
    practices workshops to aid rural communities in institutionalizing
    NHTSA's priority programs such as Buckle Up America and Partners in
    Progress; (3) the development of an Intermodal Safe Communities manual
    and regional and bi-regional Safe Communities Strategic Planning
    Sessions to increase the partnerships across modes in support of
    transportation safety issues; (4) the development of a ``Safe
    Communities at Work'' initiative to engage employers in local Safe
    Community programs; and (5) training sessions and executive briefings
    by management teams from the most successful Safe Communities programs
    to share ``best practices'' information and provide assistance in data
    collection, linkage and analyses.
        $600,000 Promotion Through National Organizations.--NHTSA's Traffic
    Safety Programs counts approximately 40 national organizations
    representing culturally and ethnically diverse populations among its
    partners. Some of these organizations have expressed interest in
    expanding the Safe Communities model into their communities. The
    funding would be used to: underwrite Cooperative Agreements with
    national organizations representing Hispanic, African American, Asian/
    Pacific Islander and/or American Indian communities to mentor their
    constituents in the Safe Communities model and work with us to ensure
    that programs are culturally relevant to their members ($200,000);
    develop and print culturally sensitive training materials ($100,000);
    provide Safe Communities training for state and local representatives
    of diverse organizations ($200,000), and translate and print existing
    Safe Communities materials into Spanish ($100,000).
        $250,000 Safe Communities Award Program.--As Safe Communities
    program sites grow and mature, they will be recognized nationally and
    regionally for both their work in implementing the Safe Communities
    model and in the reductions of crashes and their resultant deaths and
    injuries. This is both a recognition and technology transfer effort
    that will recognize outstanding Safe Communities sites and provide
    information about these programs to other communities for replication.
    We expect to recognize over 1,000 communities by next fiscal year. The
    program will consist of:
      --Recognition ``roadway'' signs for local communities
      --Regional awards honoring local communities for their efforts
      --National recognition program honoring outstanding Safe Communities
      --Promotional and marketing brochures
        Question. What are the implications of not funding the Safe
    Communities initiative? If it is funded, what other programs would be
    considered lower priorities?
        Answer. Through the Safe Communities initiative, NHTSA is
    developing an infrastructure to deliver the high priority national
    safety programs. Lack of funding support for this initiative damages
    the agency's ability to deliver key programs such as Buckle Up America
    and Partners in Progress.
        Also, NHTSA provides direction to States to encourage the use of
    Section 402 and other state highway safety grant funds for local Safe
    Communities programs. NHTSA demonstrates by its resource allocation
    that Safe Communities is one of its highest priorities. With no Federal
    funding assigned to the Safe Communities initiative, NHTSA's leadership
    role is weakened. and State and local governments perceive lack of
    support for the program.
        Furthermore, without funding, NHTSA's ability to provide technical
    assistance is limited. There are now over 632 local programs that
    identify themselves as a ``Safe Community,'' and the number is growing.
    These programs are requesting assistance and materials to improve the
    quality of their programs, and new interested communities are
    requesting information about the Safe Communities model. NHTSA needs
    resources to sustain the work it started and to meet this increasing
    demand.
        For example, results from the demonstration and evaluation program
    will soon be available. In keeping with the spirit of a demonstration
    program, NHTSA must share the results and lessons learned from these
    projects with other communities. Widespread dissemination of results
    can not occur without funds to prepare, publish, and distribute
    materials.
        In NHTSA's original budget request, all of the highway safety
    programs are funded at levels which the agency believes are appropriate
    to implement programs to meet the goals published in its 1998 Strategic
    Plan. All of NHTSA's programs will benefit from the continuation of the
    Safe Communities initiative in terms of program implementation at the
    local level.
                                  .08 bac laws
        Question. Please describe the activities that have been conducted
    or are planned in response to the Committee's assertion that more
    guidance and research is needed on the impacts of 0.08 BAC laws and on
    countermeasures targeted at the 21-34-year-old drivers impaired by
    alcohol.
        Answer. It is important that timely research results be available
    to inform legislators and the public regarding the effectiveness of
    various laws and countermeasures. To that end, a number of actions have
    recently been completed, and others initiated to study the 0.08 BAC
    issue. Additional activities are focused on countermeasures for the 21-
    34 year old age group.
        Three studies that examined the impact of 0.08 per se legislation
    were released on April 28, 1999. One project examined the effectiveness
    of 0.08 BAC law in North Carolina, another examined the effects in 11
    states, and the third study looked at 0.08 BAC laws nationwide. The
    preponderance of evidence from these and previous studies shows that
    0.08 BAC laws are effective in reducing alcohol-related fatalities,
    particularly when they are implemented in conjunction with other
    impaired driving laws (such as Administrative License Revocation) and
    programs.
        A new project in fiscal year 1999 will analyze the effectiveness of
    0.08 legislation in Illinois, which was the first large mid-western
    state to adopt 0.08 and provides an excellent research opportunity.
    This study will document the law's impact on police and court systems.
    Another study will examine the legislative history of states where 0.08
    BAC laws have already been enacted, providing valuable information on
    how the legislation was passed. Information is also being obtained on
    other countries' alcohol-impaired driving legislation (including BAC
    limits) and their alcohol-involved fatality crash rates. Other studies
    are documenting the impairing effects of 0.08 BAC on driving skills.
    Subjects dosed to 0.08 BAC are being videotaped as they navigate in a
    driving simulator. Another project is examining what the public knows
    about 0.08 BAC, and their understanding of the issues involved (e.g.,
    how many drinks are required to reach 0.08 BAC).
        A national public education campaign has targeted 21-34 year olds
    for deterrence and prevention messages. The campaign includes two
    enforcement mobilization periods to raise awareness about impaired
    driving. ``Techniques for Effective Alcohol Management on Campus'' is a
    program to help facility operations managers at colleges and
    universities deal effectively with alcohol problems at their events.
    Another program is underway to reduce binge drinking among college
    fraternities through peer-led summits across the country.
        Research is also being conducted on a ride service program and
    designated drivers, and additional studies are planned in fiscal year
    2000 to examine other alternative transportation strategies which will
    allow individuals to drink at licensed establishments, but alleviate
    their ``need'' to drive.
        Question. What NHTSA-supported studies are underway regarding the
    effectiveness, costs, or benefits of 0.08 BAC laws? When are those
    studies expected to be released? What studies on 0.08 BAC laws are
    planned with fiscal year 2000 funds? Please estimate the amount of
    funding for each of those studies.
        Answer. Three studies which examined the impact of 0.08 per se
    legislation were released on April 28, 1999. One project examined the
    effectiveness of a 0.08 BAC law in North Carolina, another analyzed the
    effects in 11 states, and the third study looked at 0.08 BAC laws
    nationwide. In aggregate, these three studies provide additional
    support for the premise that 0.08 BAC laws help to reduce alcohol-
    related fatalities, particularly when they are implemented in
    conjunction with other impaired driving laws and programs. Nearly all
    of the findings of these and previous studies show analyses that
    suggest that 0.08 BAC legislation (as well as 0.10 BAC laws and
    Administrative License Revocation laws) have contributed to the trend
    toward reduced alcohol-related crashes and fatalities.
        A new project in fiscal year 1999 will examine the effectiveness of
    0.08 BAC law in Illinois, the first large mid-western state to adopt
    0.08 BAC. This study will obtain data not only on alcohol-related
    crashes, but also on the law's impact on the law enforcement and court
    systems. For example, the study will address how many arrests are being
    made in the 0.08--0.10 range, and how many of these arrests are being
    prosecuted. It will also be determined whether the increase in arrests
    caused any problems for the police officers, prosecutors, or judges.
    Preliminary data from this study will be available in early 2000. The
    study is scheduled to be completed in 2001. Although initiated in
    fiscal year 1999 ($75,000), this study will require $150,000 of fiscal
    year 2000 funding. A similar project ($200,000 total funding) will be
    initiated in fiscal year 2000 examining the effectiveness of the 0.08
    BAC law in Washington state, which is the most recent state to adopt
    0.08 BAC.
        One part of a larger project examining various traffic safety laws
    computed the savings (both in terms of number of lives saved, and in
    dollars) that each state could obtain from passing 0.08 BAC
    legislation. Fact sheets for each state will be available in Summer
    1999.
                              open container laws
        Question. Although a final determination has not yet been made, how
    many states are likely to face a diversion of some of their federal aid
    funds for not adopting and enforcing an open container law as specified
    in TEA-21? How does the fiscal year 2000 budget address the issue of
    open container laws?
        Answer. As of April 26, 1999, 10 states are in compliance with
    their current state law, and nine will be in compliance should they
    enact proposed legislation without change. Additionally, 14 states and
    the District of Columbia have submitted either current law or proposed
    legislation which, upon legal review, is not in compliance with the
    open container provisions in TEA-21, and 17 states and Puerto Rico have
    not submitted any documentation for review.
        Efforts to address the issue of open container laws under the
    fiscal year 2000 budget will focus on assessing the effectiveness of
    Open Container laws and developing new educational support materials
    for distribution. A new booklet on the effectiveness of Open Container
    laws will be available in fiscal year 2000. Additionally, NHTSA will
    continue to provide technical assistance to states in review of
    existing statutes and proposed legislation to determine compliance
    status.
                           repeat offender provisions
        Question. Although a final determination has not yet been made, how
    many states are likely to face a diversion of some of their federal aid
    funds for not adopting and enforcing the repeat offender provisions
    that are specified in TEA-21?
        Answer. As of April 26, 1999, two states (Michigan and New
    Hampshire) are in compliance with the repeat offender provisions with
    their current laws, while three more (Arkansas, Texas, South Dakota)
    will be in compliance should they enact proposed legislation without
    change. Additionally, 29 states which have submitted documentation for
    review have not been found to be in compliance, while 18 states have
    submitted nothing for review.
                   drug evaluation and classification program
        Question. Please explain how the funds requested for the Drug
    Evaluation and Classification (DEC) program would be used and compare
    the fiscal year 2000 request to fiscal year 1999 expenditures.
        Answer. There is no longer a separate budget line item for the DEC
    Program. The DEC program has been incorporated into the overall
    impaired driving program and the Drugs, Driving and Youth initiative.
    The following chart is reflective of the drug impaired driving budgeted
    items.

    ------------------------------------------------------------------------
                                                        Fiscal year
                    Projects                 -------------------------------
                                                   1999        2000 request
    ------------------------------------------------------------------------
    Advanced Drug Driving Training..........        $733,000        $250,000
    Drug Driving Research...................         250,000          50,000
    National Summit Meeting.................         150,000  ..............
    International Conference on Drug          ..............          20,000
     Research...............................
    Public Information and Education........          24,000         150,000
    Coordination and Data Collection........  ..............         300,000
    ------------------------------------------------------------------------

        Countermeasures are needed to reduce the number of alcohol-impaired
    and other drug impaired drivers on the nations highways. The funding
    will increase and promote training in drugged driving detection, drug
    detection and training for prosecutors; involve prosecutors in
    community drug prevention programs; promote uniform sanctions for drug
    offenders; continue DEC related research; promote the collection and
    analysis of state arrest data on drug impaired drivers; develop
    courtroom skills for testifying in alcohol and drug impaired driving
    cases and expand DEC to community policing programs.
        Public information and education materials are needed to educate
    the public, health care providers, and the courts on the risks of
    drugged driving.
        Numerous foreign countries have conducted research in the drugged
    driving area. We plan to hold a conference which would include other
    federal agencies with significant alcohol responsibility (HHS, DOJ) to
    discuss the research and programs conducted on the drugged driving
    impairment problem. A summit level conference with state leaders, law
    enforcement administrators, prosecutors, and judges will be held to
    examine issues involving drugs, driving and youth programs and develop
    strategies and action steps for reducing the incident of drug-impaired
    driving.
                                impaired driving
        Question. Please provide an update on any studies that NHTSA has
    underway or planned that will help the criminal justice system deal
    with drug-impaired drivers. How much will be spent on those efforts
    during fiscal year 1999 and fiscal year 2000?
        Answer. NHTSA will spend $100,000 in fiscal year 1999 to conduct a
    ``State of the Knowledge'' review of the literature of drug-impaired
    driving. Another $100,000 will be spent to determine the feasibility of
    developing a set of observable cues police officers could use to
    establish probable cause for stopping a driver who might be driving
    while impaired by drugs. These cues would be analogous to the
    ``stopping cues'' for driving while intoxicated currently available for
    police. If the study shows that such cues are feasible, development and
    test of such cues to determine if they are valid and reliable
    ($200,000) could begin in fiscal year 2000.
        Question. What is NHTSA doing to work with the states to improve
    laws pertaining to drug-impaired driving? How much is in your fiscal
    year 1999 spending plan and fiscal year 2000 budget request for that
    activity?
        Answer. NHTSA has planned to expend $150,000 in fiscal year 1999 to
    support a national drugged driving summit to take place in fiscal year
    2000. The summit will bring together law enforcement leaders, drug
    recognition experts, and prosecutors to focus on the drugged driving
    issue, including an assessment of current state drugged driving laws.
    Other Federal partners will be invited to co-sponsor the summit.
    Conference proceedings will include a description of the problem,
    action steps for addressing the problem, and model drugged driving laws
    for state use. Approximately $50,000 will be used in fiscal year 2000
    to implement the recommendations from the summit and provide technical
    assistance to states.
        Question. Please explain the expected costs of each of the new and
    on-going initiatives specified under the Drugs, Driving & Youth
    initiative.
        Answer. The following summarizes the planned expenditures in fiscal
    year 2000 for drugs, driving, and youth.

            Projects                                        Fiscal year 2000

    Training......................................................  $250,000
    Drug Driving Research.........................................    50,000
    Coordination and Data Collection..............................   300,000
    Public Information and Education..............................   150,000
    International Conference on Drug Research.....................    20,000

        In 1997, 6,258 youths, ages 15 through 20, died in motor vehicle
    crashes, a 1.2 percent decrease from 1996. Of this number, 2,209
    fatalities were alcohol-related--a 5 percent decrease from 1996. Since
    1982, youth fatality trends have compared favorably to those of the
    adult (over age 21) population, with a 26 percent overall decline for
    youth compared to a 2 percent increase for adults. However, in terms of
    fatality rates per 100,000 population, youth are still overrepresented
    by a factor of 3 to 2 (10 to 7 for alcohol-related fatalities).
        Countermeasures are needed to reduce the number of alcohol and
    other drug impaired drivers on the nation's highways. Additional
    training for law enforcement officers, prosecutors and judges are
    needed in the identification, prosecution and adjudication of the drug
    impaired driver. Funding will be provided to collect additional data to
    more clearly define and understand the extent of the drug impaired
    driving problem.
        Public information and education materials will be developed to
    educate the public, health care providers, and the courts on the risks
    of drugged driving, particularly among youth, and potential prevention
    strategies.
        Numerous foreign countries have conducted research in the drugged
    driving area. An international conference, to include other federal
    agencies and the transportation-related research community, is needed
    to discuss the research and programs conducted on the drugged driving
    impairment problem.
        A summit level conference will be held in 2000, with state leaders,
    law enforcement administrators, prosecutors, and judges to discuss
    drugs, driving and youth programs. The recommendations will be
    implemented following the conference in 2000 and beyond.
                          graduated licensing systems
        Question. How many states are now receiving grant funds to test and
    evaluate graduated licensing systems? Please indicate funding amounts
    and results of the various evaluations now being conducted.
        Answer. Two states are currently receiving grant funds to test and
    evaluate their graduated licensing systems.
        Michigan received $50,000 in fiscal year 1999 and $200,000 in
    previous years. In fiscal year 2000, $50,000 is requested to complete
    the test and evaluation of its graduated licensing system.
        Kentucky has received $120,000 to date to test and evaluate its
    graduated licensing system. While Kentucky did not receive any fiscal
    year 1999 funds, $110,000 is requested in fiscal year 2000 to complete
    the test and evaluation.
        Draft evaluation reports of the impact of the evaluations of the
    Kentucky and Michigan graduated licensing systems will be available in
    calendar year 2000. Evaluations of graduated licensing systems in other
    states have shown more than five (5) percent reductions in crash
    involvement of drivers 15-17 years of age.
                                seat belt usage
        Question. According to a recent announcement by Secretary Slater,
    seat belt usage is estimated at 70 percent. How does NHTSA intend to
    achieve the goal of increasing usage to 85 percent by 2000?
        Answer. NHTSA will continue the Buckle Up America (BUA) campaign as
    its highest priority. Between May and December 1998, seat belt use in
    the U.S. increased eight percentage points, as measured by a series of
    four National Occupant Protection Usage Surveys (NOPUS) \1\. These
    results can be attributed to implementing the proven strategies of
    strong legislation, effective public education, building partnerships
    between government and the private sector, and high visibility law
    enforcement.
    ---------------------------------------------------------------------------
        \1\ In previous years, NHTSA estimated national belt use by
    aggregating data from state surveys. Some states surveyed only drivers,
    some excluded pick up trucks, vans and/or sport utility vehicles, and
    many excluded local roads and rural areas. Because of these differences
    in methodology, the aggregate of the state surveys has historically
    been 6 to 8 percentage points higher than the NOPUS survey. As a
    consequence of switching to the NOPUS survey for calculating national
    seat belt use, the eight percentage point increase in seat belt use
    will not be reflected in the 1998 use rate.
    ---------------------------------------------------------------------------
        NHTSA will intensify efforts to encourage enforcement of existing
    occupant protection laws; emphasize expanding partnerships throughout
    the public and private sectors at the national, state and local levels
    with special emphasis on diverse populations; and assist states and
    communities with technical support to enact primary enforcement seat
    belt laws and ordinances and improve child passenger protection laws.
        NHTSA will continue the Ad Council national media campaign and
    develop new multi-media outreach materials targeted to high risk groups
    such as pickup truck drivers and young males. NHTSA will target diverse
    populations by working with minority firms to develop culturally
    appropriate materials to resonate with the target audiences. To that
    end, the agency will redouble its efforts to focus sustained attention
    on the high risk group.
        NHTSA will expand the cadre of over 5,000 law enforcement agencies,
    assisting them to mount larger, more visible, national seat belt
    enforcement mobilizations during Memorial Day and Thanksgiving weeks.
        NHTSA's regional offices, and the field offices of all other DOT
    Modal Administrations, will provide technical assistance to the States.
    One initiative is the development of a cadre of law enforcement
    liaisons (LELs) within the States. The LELs are police officers,
    sheriff's deputies and state troopers who coordinate statewide waves of
    highly visible seat belt and child passenger safety enforcement.
    Another initiative is the inter-modal sponsorship of Safe Communities
    programs which promote use of seat belts and child safety seats. The
    DOT field offices will also assist the States in developing
    partnerships with the trucking industry, urban transit systems,
    railways, shipping, and aviation to deliver the Buckle Up message.
                           section 157 grant program
        Question. Please prepare estimates of the amount of funds that may
    be available for the innovative grant portion of the Section 157
    program. How will those funds be integrated with the ongoing NHTSA
    Section 403 program?
        Answer. The fiscal year 2000 authorization level for the Section
    157 program is $92 million. Applying the same obligation limitation
    percentage as was used in fiscal year 1999 (88.3 percent), an estimated
    $81 million would be available for the Section 157 program. Based on
    preliminary state data, approximately $55 million may be awarded under
    the incentive grant portion of the program, leaving approximately $26
    million available for the innovative grant program.
        To insure coordination between the Innovative Grants and Section
    403, the Federal Register notice announcing the Innovative Grant
    program required that the State's application discuss how this grant
    will `` * * * integrate and coordinate with other on-going efforts in
    the State, resulting in * * * increased usage rates.'' In effect, this
    special factor requires that the proposed effort be complimentary to
    the State Highway Safety Office's overall plan and coordinated with
    other grant programs such as Sections 402 and 405.
        Other efforts to insure that the Section 157 Innovative Grant
    Program is integrated with Section 403 were to include several examples
    of ``innovative programs'' in the Federal Register notice which support
    the core components of the Section 403 Occupant Protection program.
    These include high visibility seat belt and child safety seat
    enforcement efforts, participation in the semi-annual national seat
    belt enforcement mobilizations (Operation ABC Mobilization: America
    Buckles Up Children), creating awareness for implementation of new seat
    belt and child safety seat laws, and the establishment of new
    partnerships and coalitions.
                            primary enforcement laws
        Question. How many additional states enacted primary enforcement
    laws last year? What was NHTSA's role in those legislative initiatives?
        Answer. One additional state, Indiana, enacted a primary
    enforcement law last year. NHTSA Regional staff provided technical
    assistance to the Indiana Safety Belt Coalition, supplying information
    and data that illustrated the injury reduction and health care cost
    savings due to increased belt use. Such reductions and savings normally
    follow the passage of a primary law.
                                 air bag safety
        Question. Please update us on NHTSA's efforts to reduce the adverse
    effects of airbag deployment, specifically as related to serious
    injuries and fatalities.
        Answer. On September 18, 1998, the agency published a Notice of
    Proposed Rulemaking (NPRM) in the Federal Register (63 FR 49958)
    proposing to amend Federal Motor Vehicle Safety Standard (FMVSS) No.
    208, ``Occupant Crash Protection,'' to require advanced air bag
    protection.
        The NPRM proposed improvements in the ability of air bags to
    cushion and protect occupants of different sizes, belted and unbelted,
    and would cause manufacturers to redesign air bags to minimize risks to
    infants, children, and other occupants. The advanced air bags would be
    required in some new passenger cars and light trucks beginning
    September 1, 2002, and in all new cars and light trucks beginning
    September 1, 2005. The agency's proposal is consistent with recent
    legislation mandating the issuance of a final rule for advanced air
    bags. Statutory requirements direct the agency to publish a final rule
    no later than March 1, 2000.
        The 90-day comment period for the NPRM closed on December 17, 1998.
    Although the many issues raised by the respondents to the NPRM are
    still undergoing technical review, it is apparent that major
    refinements may be needed in the performance strategies and test
    protocols that were proposed in the NPRM. Currently, the agency is
    conducting the research and analysis to address these issues.
        Additionally, the agency has been actively pursuing its public
    information campaign related to air bag safety issues. Since the Buckle
    Up America campaign began in 1996, motor vehicle deaths for children
    (0-4 years) have been reduced 7.5 percent. This reduction was the
    direct result of the agency's efforts to implement the strategies of
    high visibility enforcement of child passenger safety laws combined
    with public education. The agency plans to continue these same
    strategies.
        The agency's educational activities to reduce the adverse effects
    of air bag deployment are conducted through the Buckle Up America
    campaign to increase education to consumers on the correct use of both
    safety belts and child safety seats and to ensure that children ride in
    the back seat.
        Question. How much of the fiscal year 2000 budget request would be
    allocated to that area?
        Answer. In the fiscal year 2000 budget request, $7.684 million will
    be allocated to conducting air bag safety research and development to
    reduce the adverse effects of air bag deployment. This amount includes
    $3 million for the Biomechanics Program, $2.431 million for the Safety
    Systems Program, and $2.253 million for the Special Crash
    Investigations Program.
        Additionally, the entire Occupant Protection Program under Traffic
    Safety Programs of $11 million integrates the air bag safety message in
    all activities. The Buckle Up America campaign, within the Occupant
    Protection Program, specifically addresses educational efforts to
    reduce the adverse effects of air bag deployments as well as the vital
    importance of using safety belts and child safety seats.
                        traffic law enforcement program
        Question. What are the major challenges facing the law enforcement
    community and how does your budget request address those challenges.
        Answer. Law enforcement agencies are vital partners in achieving
    increases in safety belt use and reducing fatalities and injuries
    resulting from traffic crashes. The major challenges facing law
    enforcement include demands for continuing visible, publicized traffic
    enforcement in the face of mounting demands for other public safety
    services; improving the ability of law enforcement administrators to
    understand and apply new technologies, such as lidar, radar, digital
    cameras, etc., to augment traffic safety services; maintaining a
    balanced traffic enforcement program to address increasing public
    concern over unsafe, aggressive driving and excessive speed; and,
    encouraging efforts by enforcement officers to increase belt use and
    identify drunk and drugged drivers. NHTSA must continue to support
    highly visible and effective traffic enforcement efforts as an
    effective public safety strategy in the face of mounting concerns about
    bias in traffic stops. The Traffic Law Enforcement programs are
    intended to improve the efficiency and operations of law enforcement by
    incorporating traffic safety into the overall public safety mission.
        The Traffic Law Enforcement program budget addresses these concerns
    by focusing on five program areas supporting the agency's Strategic
    Plan: national organizations, enforcement and demonstration projects,
    technology, training and technical assistance and public information
    and education. The national organizations program will allow the
    continuation of support to insure involvement of law enforcement
    agencies in high priority mobilization efforts--concentrating on
    occupant protection and impaired driving. The enforcement and
    demonstration budget will provide funds for speed management and
    aggressive driving pilot programs started in fiscal year 1999 to combat
    the increase in speeding related fatalities since the elimination of
    the national maximum speed limit. The technology program budget
    includes funding to conduct a traffic law enforcement technology
    conference to showcase new and developing applications to augment staff
    resources. The training and technical assistance budget adds funds to
    continue with a pursuit training train-the-trainer course, as
    authorized under TEA-21. The public information and education budget
    sets aside funds to maintain an aggressive driving public information
    campaign. NHTSA will collaborate with the International Association of
    Chiefs of Police in the development of its aggressive driving
    countermeasures program.
        NHTSA will also continue to work with law enforcement groups to
    develop policy, training, and supervisory controls to eliminate
    differential enforcement practices.
        Question. The fiscal year 2000 budget request for this program is
    $1.65 million more than last year's appropriation. Why is this large
    increase necessary? What new initiatives are planned for next year?
        Answer. The increase in Traffic Law Enforcement funding directly
    supports the agency's strategic plan to reduce speeding related
    fatalities, which have been on the rise since the elimination of the
    national maximum speed limit, unlike other traffic safety programs that
    have shown steady successes, such as increasing seat belt use and
    deterring impaired driving. Speed management, aggressive driving
    programs and police pursuit training will all target these dangerous,
    unsafe driving actions.
        In response to the public's concern about speeding, NHTSA will
    conduct two demonstration projects addressing the complex problems of
    setting and enforcing speed limits. One site will be rural; the other
    will be in a more urbanized location. Both will use technology as the
    centerpiece of the effort, including the use of variable speed limits.
    The agency plans to conduct these demonstration programs in cooperation
    with FHWA, which will focus on engineering, roadway and congestion
    issues. This activity is a result of the Transportation Research Board
    report that explains how state and local governments should set and
    enforce speed limits as a result of the elimination of the federal role
    in the national maximum speed limit. Accompanying the demonstration,
    NHTSA will develop a high profile public information and education
    program concentrating on increasing public awareness of the dangers
    associated with high risk driving actions and speeding.
        NHTSA will also conduct two demonstration projects, based on a
    prior pilot program to determine the effectiveness of a suspended and
    revoked operator program.
        The public has also demanded action regarding crashes involving
    police pursuits. Under section 2002 of TEA-21, direction was provided
    to address this issue through the development of policy and training
    relating to police pursuits. NHTSA will develop and distribute a police
    pursuit driving training program to law enforcement agencies
    nationwide. This effort will also include the production and
    distribution of computer based training relating to law enforcement
    vehicle pursuit driving. A comparative analysis of pursuit related
    crashes in local law enforcement will include an assessment of variable
    training and policy in these agencies is planned.
                               aggressive driving
        Question. What is the scope and nature of your efforts to reduce
    aggressive driving? How much are you planning to allocate towards that
    activity in fiscal year 2000?
        Answer. Efforts to address the problem of aggressive driving have
    focused on demonstration projects to assess countermeasure
    effectiveness; research to examine the public's perceptions about high
    risk driving behavior; examination and dissemination of best
    enforcement practices; and, review of existing applicable laws. In
    fiscal year 2000, NHTSA will focus more attention on identifying
    specific enforcement practices that show promise and develop
    educational programs to increase the public's perception of high risk
    driving behavior.
        The Department of Transportation (DOT) sponsored a symposium titled
    Aggressive Driving and the Law in January 1999. The meeting provided a
    forum for judges, prosecutors, law enforcement and defense attorneys to
    discuss the seriousness of aggressive driving and propose
    recommendations for addressing the problem. The recommendations from
    this Symposium will be addressed during fiscal year 2000.
        A permanent Intermodal Aggressive Driving Team, representing the
    National Highway Traffic Safety Administration, Federal Highway
    Administration and Federal Railroad Administration has developed
    recommendations for a coordinated, Departmental aggressive driving
    program.
        Several demonstrations using advanced technology are underway.
    Engineering efforts supporting an automated enforcement project is
    underway on the George Washington Parkway and should be operational in
    fiscal year 2000. Project ADVANCE to identify and apprehend both
    commercial and private vehicles driving aggressively in Maryland is
    underway, in conjunction with the Maryland State Police.
        As a follow-up to a fiscal year 1998 award to the Milwaukee Police
    Department, two additional demonstrations began in fiscal year 1999 to
    demonstrate and evaluate innovative aggressive driving programs. The
    two additional projects will continue in fiscal year 2000. Research
    projects will include studies to determine the effect of enforcement
    and legislative programs to reduce aggressive driving. An observational
    study will be conducted to determine what constitutes aggressive
    driving.
        NHTSA will allocate $775,000 to support the continuation of the
    demonstration projects started in fiscal year 1999, and will continue
    an active public information and education campaign to reduce
    aggressive driving.
                        traffic law enforcement funding
        Question. Please provide a table for the components in the Traffic
    Law Enforcement Program which shows how the funds requested for fiscal
    year 2000 are intended to be spent. In that table, please compare the
    amount provided for similar activities for fiscal year 1999 and provide
    a justification for the need for the requested increases above fiscal
    year 1999 appropriations.
        Answer. Comparison between fiscal year 1999 and fiscal year 2000
    for the five Traffic Law Enforcement Program areas are as follows:

    ------------------------------------------------------------------------
                                                        Fiscal year
                  Program area               -------------------------------
                                               1999 Enacted    2000 Request
    ------------------------------------------------------------------------
    Enforcement Demonstrations..............        $428,000      $1,153,000
    Training and Technical Assistance.......         429,400       1,404,400
    Technology Transfer.....................         250,000         240,000
    National Organizations..................         255,000         245,000
    Public Information and Education........         350,600         325,600
                                             -------------------------------
          Total.............................       1,713,000       3,368,000
    ------------------------------------------------------------------------

        The increase in Traffic Law Enforcement directly supports both TEA-
    21 initiatives and the agency's strategic plan to reduce speeding
    related fatalities, which have been on the rise since the elimination
    of the national maximum speed limit. Speed management and aggressive
    driving programs will target these high risk driving behaviors. NHTSA
    will conduct two projects to determine the effectiveness of a speed
    management program based on the recently published Transportation
    Research Board report entitled ``Managing Speed: Review of Current
    Practices for Setting and Enforcing Speed Limits.''
        Under TEA-21, Congress authorized NHTSA to spend up to $1 million
    per year to develop a pursuit driving training program. Also, NHTSA
    will conduct two demonstration projects based on a prior pilot program
    to determine the effectiveness of a suspended and revoked operator
    program.
                       integrated driver licensing system
        Question. What is encompassed in the proposed comprehensive
    integrated driver licensing system? How much will it cost to develop?
    Over how many years?
        Answer. A comprehensive integrated driver licensing system would
    result in the elimination of state issuance of multiple drivers
    licenses. The integrated driver licensing system would combine the
    three currently operating driver license information systems: (1) The
    National Driver Register's index of approximately 30 million problem
    drivers; (2) The Federal Highway Administration's Commercial Driver
    License Information System's (CDLIS) index of approximately 8 million
    commercial drivers; and (3) The American Association of Motor Vehicle
    Administrators' Driver License Reciprocity system currently being used
    by five states to facilitate the electronic exchange of driver records.
    The integrated system would include all 175-180 million licensed
    drivers in the states.
        Costs associated with the development of the system would depend on
    the scope of the project and planning would require about six years
    from initial development to implementation, not including the time
    needed to enact the federal legislation necessary to implement such a
    system.
        Question. How does this program relate to the grant program for
    state data systems?
        Answer. Since driver licensing is an element of state data systems,
    it is possible that grant recipients could use Section 411 grant funds
    for improvements to their driver licensing systems.
                              older driver program
        Question. In Senate Report 104-325, the Committee indicated that
    NHTSA should continue its work on demonstration activities for
    technologies and practices intended to improve driver performance of
    older drivers at risk of losing their licenses. How is that directive
    reflected in the fiscal year 2000 budget request and in the fiscal year
    1999 spending plan for TSP? Please provide a list of each activity and
    its funding level.
        Answer. NHTSA's older driver program has two objectives: to
    identify and regulate unsafe drivers and to extend the mobility of safe
    drivers. In the fiscal year 2000 budget, $300,000 is requested for
    cooperative agreements in up to three states to perform field tests of
    model older driver systems that are currently being pilot tested. These
    systems include screening drivers for physical, mental, and sensory
    capabilities that affect driving safety; providing rehabilitation for
    limitations that can be improved; and counseling individuals who should
    modify driving practices or need alternative transportation. These
    systems must be tested in several states to determine their
    effectiveness and feasibility under different circumstances.
        In the fiscal year 1999 budget, $250,000 is being spent to complete
    a large-scale pilot study of technologies and practices for improving
    older driver performance (i.e., the Model Driver Screening and
    Evaluation Program). This project involves evaluating tools for
    identifying at-risk drivers in licensing agencies, social service
    agencies, and health care settings for referral to occupational
    therapists and other specialists for retraining or rehabilitation.
    Where appropriate, the retraining and rehabilitation efforts are also
    being evaluated. Information obtained from this effort will be
    incorporated into the proposed cooperative agreements in the fiscal
    year 2000 budget plan.
        Question. How many states are involved in the older driver
    demonstrations supported with NHTSA funds? Will those efforts be
    expanded during fiscal year 2000? How much is allocated toward those
    efforts in fiscal year 1999? How much is requested for those efforts in
    fiscal year 2000?
        Answer. NHTSA is supporting a study evaluating assessment tools
    that can be used in licensing agencies, social service settings, and
    medical offices. Two states, Maryland and Florida, are participating in
    this pilot effort. In fiscal year 1999, $250,000 was allocated for that
    effort. In fiscal year 2000, $300,000 will be shared by up to three
    states in cooperative agreements that will draw on the lessons learned
    from the earlier projects.
                                 driver fatigue
        Question. Senate Report 104-325 directed NHTSA to prepare a report
    on driver fatigue and inattention, and encouraged collaborative efforts
    and funding activities between NHTSA and the National Center on Sleep
    Disorders Research. Please provide the findings of that report and tell
    us how NHTSA intends to proceed in this area.
        Answer. The collaboration between NHTSA and the National Center on
    Sleep Disorders Research (NCSDR) to produce a program to combat drowsy
    driving was a direct result of special appropriations in fiscal year
    1996 and 1997. The report to congress required by the appropriations
    report contains a brief summary of the collaborative program and a
    status report on each of the projects comprising the program to combat
    drowsy driving.
        The NCSDR convened a panel of experts to provide initial direction
    and ongoing guidance to NHTSA's program. The panel report covered the
    biology of human sleep and sleepiness, characteristics of drowsy-
    driving crashes, risk factors for drowsy-driving crashes, population
    groups at highest risk, countermeasures, and recommendations for an
    educational campaign.
        Based on the panel's recommendation, staff from NHTSA, NCSDR, and
    project contractors selected shift workers as the primary target group
    for the NHTSA program and high-school youth for NCSDR's activities.
    Focus groups provided fundamental information for program themes and
    content. Materials include a brochure, posters, cards for ``take-one''
    dispensers, a video, and scripts for conducting safety meetings. Twenty
    employers in various occupations will receive funds in calendar year
    1999 to assist in the evaluation of the program, assessing changes in
    workers' knowledge, attitudes, and, most importantly, behaviors.
    Revised materials are expected in calendar year 2000.
        NHTSA also funded research to instrument private vehicles owned by
    members of high-risk (sleep-deprived) groups embarking on long-distance
    trips. This research is designed to record a variety of vehicle
    performance measures simultaneously with video of the driver and the
    roadway. The study produced over 100 hours of real-time data, including
    many incidents of drowsy and inattentive driving.
        NCSDR, working with NHTSA staff and Scholastic Publications (an
    organization that publishes and distributes educational materials to
    schools nationwide), developed materials for high-school students and
    distributed them to high schools throughout the nation in May, 1998.
    These materials are available for public use. NCSDR also published a
    report for secondary school educators, ``Educating Youth about Sleep
    and Drowsy Driving,'' based on the proceedings of a workshop with
    experts in adolescent sleep, driver education, high-and middle-school
    education, and curriculum development.
        In fiscal year 2000, NHTSA plans to initiate programs addressing
    fatigue on long-distance trips by young drivers and will also work with
    the Federal Highway Administration to educate the public about rumble
    strips and proper responses to their warnings.
                national occupant protection use survey (nopus)
        Question. Why does NHTSA believe that a substantial increase in
    funding for the NOPUS survey is necessary at this time? Do the
    additional surveys conducted by the states under the Section 157
    program reduce the need for NHTSA to conduct surveys?
        Answer. The increase in funding for the National Occupant
    Protection User Survey (NOPUS) reflects: (1) collecting additional data
    needed by the agency (e.g., restraint use by all children under 16
    years old and driver distance behind the steering wheel); (2) the
    addition of one data collector at each of the 50 Primary Sampling
    Units, and, (3) conducting smaller versions of the NOPUS (a survey to
    measure overall use only, a ``Mini-NOPUS'') to measure the progress of
    the President's Initiative in the Buckle Up America Campaign.
        The NOPUS is a research and evaluation tool that has important
    characteristics that cannot be gleaned from aggregating the results of
    the surveys states conduct under the Section 157 program. First, each
    NOPUS provides an accurate estimate of the nation's belt use rate over
    a specified period of time for front seat outboard occupants in a well-
    defined population of vehicles. Some states conduct surveys in the
    spring, others in summer and still others in the fall. Aggregating
    state findings tends to mask on-going trends in belt use. Second, NOPUS
    uses a truly representative sample of the country's roadway segments,
    including all types of roads, and rural as well as urban areas. Most
    state surveys exclude the most rural portions of the state, and only a
    few include local roads. Third, NOPUS surveys allow the agency to gauge
    the impact of such major events as the national waves of mobilization
    of seat belt and child passenger safety enforcement, by conducting pre-
    and post-mobilization Mini-NOPUS surveys that represent the whole
    country.
        The time distribution of the state surveys precludes their
    evaluative use for pre-and post-measurement.
        Question. Why are three surveys needed?
        Answer. Three smaller versions of the National Occupant Protection
    User Survey (NOPUS ) (the Mini-NOPUS--a national survey collected at a
    reduced sample and measuring only overall safety belt use) were
    conducted in 1998 as the result of the agency's response to the
    President's Initiative for the Buckle Up America Campaign. The first
    Mini-NOPUS estimated the ``baseline'' national belt use rate before the
    Buckle Up America Campaign mobilization conducted during the week of
    Memorial Day. The remaining surveys were conducted just after the
    Memorial Day and Thanksgiving Day week Buckle Up America mobilizations.
    It is anticipated that the agency will continue to monitor changes in
    belt use across the country by conducting Mini-NOPUS surveys subsequent
    to Buckle Up America mobilization weeks. These three mini-surveys have
    proven their value in assisting the agency in monitoring the
    effectiveness of the three major Buckle Up America Campaign
    mobilizations. However, the regular NOPUS will continue to be conducted
    biennially.
                               advanced air bags
        Question. What is the status of your work to advance smart air
    bags? What are some of the remaining challenges and how does the fiscal
    year 2000 budget address them?
        Answer. Currently the agency is conducting research and testing in
    support of rulemaking on advanced air bags. Full-vehicle crash tests
    are being conducted on 1999 model year vehicles with belted and
    unbelted mid-sized male and small female crash test dummies in
    different crash configurations and at different impact speeds. Air bag
    aggressivity tests are being conducted with out-of-position small
    female driver dummies and small child passenger dummies. Advanced air
    bag technology, including advanced inflators, advanced crash sensors,
    belt use sensors, seat position sensors, occupant classification
    sensors, etc., are being evaluated through cooperative research efforts
    with restraint suppliers and using future model year vehicles provided
    by manufacturers. Real world crash investigations are collecting data
    on redesigned air bag systems (model years 1998 and 1999) to identify
    air bag-related serious injuries and fatalities. Biomechanical injury
    criteria for the new family of dummies are being refined and evaluated.
    A public workshop was recently held on April 20, 1999, to discuss the
    agency's proposed injury criteria with the biomechanical community.
        The remaining challenges associated with smart air bags include
    developing performance-based test procedures to assess the
    effectiveness of dynamic occupant position sensors. The fiscal year
    2000 budget plan will address this by evaluating the better-performing
    advanced air bag systems under development. They are designed to
    function in dynamic precrash braking scenarios such as those identified
    from the field experience (particularly those that involve children).
    Other challenges include the refinement of pediatric and small female
    injury criteria associated with complex out-of-position air bag
    deployment situations. The fiscal year 2000 budget will address this by
    developing essential biomechanical tools for the assessment of current
    and emerging advanced air bag systems that are designed to maximize
    crash protection. Finally, real world crash performance will need to be
    closely monitored. Because of the rapid deployment of advanced
    technology air bags into the fleet, it is important to closely monitor
    their real world performance so that any unforeseen problems can be
    detected and corrective steps taken early. The fiscal year 2000 budget
    plan includes special crash investigations of the current and new-
    generation, and advanced air bag cases.
        Question. If this account were funded at the fiscal year 1999
    level, how would you allocate the funding in fiscal year 2000? Please
    explain your allocation within the context of your performance goals
    and strategic plan.
        Answer. The implementation of advanced air bag systems in the
    fleet, through the establishment of performance-based Federal motor
    vehicle safety standards, is an important goal to the agency. If this
    account were funded at the fiscal year 1999 level, it would be
    necessary to take additional resources from other crashworthiness
    research programs, such as upgraded frontal crash protection and
    rollover protection under safety systems research in support of the
    Department's strategic goals of reducing consequences of crashes.
                                 ciren centers
        Question. What is the amount and status of your financial support
    to each of the CIREN centers?
        Answer. During fiscal year 2000, the anticipated cost is $500,000
    for each of the CIREN Centers.
        CIREN is a unique collaboration of medical practitioners,
    engineers, and other related professions. Working with seven multi-
    disciplinary, geographically diverse trauma centers, the agency hopes
    to learn more about the dynamics of highway crashes. These real world
    laboratories are linked by a computer network that allows researchers
    to review crash and injury data and share their particular expertise.
        Though the network--funded by NHTSA and General Motors--is still in
    its infancy, much has already been learned. NHTSA has gained greater
    insight into injuries that are caused by safety devices themselves,
    including shoulder and lap restraints and air bags. The agency is
    beginning to understand how real world crashes compare to the outcomes
    predicted during a controlled research crash test. NHTSA has
    significantly improved the understanding of injuries affecting infants
    and children.
        CIREN focuses on cases which include frontal and side impact
    injuries treated at participating centers, pediatric cases, vehicle
    fires, and certain rollovers.
        What is new and exciting about this venture is that it is drawing
    support from vehicle manufacturers and government to improve vehicle
    safety and trauma care.
          national transportation biomechanics research center (ntbrc)
        Question. In Senate Report 104-325, NHTSA was urged to redouble its
    efforts to obtain cost-sharing commitments with other organizations
    which benefit from the national center. What progress has been made?
        Answer. The National Transportation Biomechanics Research Center
    (NTBRC) has entered into an interagency agreement with the Federal
    Aviation Administration (FAA) to study and evaluate the potential of
    using the NTBRC's advanced frontal test dummy, THOR, and other crash
    injury evaluation technologies to evaluate crash situations of interest
    to the FAA. A preliminary series of impact tests have been conducted at
    the FAA crash test facility in Oklahoma City and are currently
    undergoing analysis. Further collaborations in research areas of mutual
    interest are expected.
        The NTBRC staff has made preliminary contact with a group concerned
    with personnel protection from the Department of Defense to determine
    if common research interests exist. These discussions will continue
    during a planned visit by NTBRC staff to Aberdeen Proving Grounds in
    the next few weeks.
        Question. What is the status of the second phase of the project to
    field test the dissemination and implementation of head injury pre-
    hospital protocols?
        Answer. Head injuries are among the most difficult injuries for
    emergency medical personnel to recognize in the field. This project
    provides additional education that will assist providers to better
    manage these injuries. A draft of the guidelines for pre-hospital
    management of head injuries has been developed and is currently being
    prepared for pilot testing. During the first phase of the project,
    available research evidence was gathered and synthesized and the draft
    guidelines were reviewed by a steering committee representing the full
    range of the EMS professional community. The second phase of the
    project is directed at achieving consensus on the content of the
    guidelines and conducting pilot tests at several locations across the
    country. Pilot tests will be conducted in the fall and winter of 1999.
        Question. NHTSA is requesting an additional $340,000 to conduct
    research regarding the implications of the location and function of
    vehicle controls and displays. What new information justifies the need
    to reexamine this issue?
        Answer. Previous analyses of crash databases have shown that about
    15 percent of crash-involved drivers are driving unfamiliar vehicles
    (those driven less than 500 miles). Previous laboratory experiments
    have indicated that drivers take significantly longer to find and
    operate unfamiliar controls and displays. Drivers have difficulty
    adapting to unfamiliar vehicles for various reasons, including
    unfamiliar controls and displays as well as unfamiliar vehicle
    handling/braking characteristics and unfamiliar visibility
    characteristics. With the introduction of many new devices such as
    cellular telephones and other gadgets in vehicles, the problem is
    likely to be exacerbated. The goal of this new program is to better
    understand the role of vehicle unfamiliarity as a crash risk and to
    identify possible countermeasures, including guidelines for voluntary
    standards and public information campaigns.
        The justification for this funding is not based on new information
    but on the fact that NHTSA can now use several new research tools to
    better understand the specific nature and cause of driver errors
    associated with vehicle unfamiliarity. One such tool is the Data
    Acquisition System for Crash Avoidance (DASCAR), which can be installed
    in an individual's personal vehicle to track driving performance as
    drivers learn the unfamiliar controls and displays. Another new tool is
    the National Advanced Driving Simulator, which will provide a realistic
    and safe environment for conducting experiments on driver distractions
    and errors as they interact with unfamiliar vehicle components in a
    controlled experiment.
                  crash outcome data evaluation system (codes)
        Question. Please update your answer from last year regarding how
    NHTSA has conducted work beyond the CODES project in the areas of
    injury assessment, costs, and relationships to the use of seat belts,
    air bags, and other engineering enhancements.
        Answer. NHTSA continues to support state-specific applications of
    linked data and development of Crash Outcome Data Evaluation Systems
    (CODES) by states. In fiscal year 1999, NHTSA funded five new CODES
    states--Kentucky, Iowa, Massachusetts, Nebraska and South Carolina to
    develop data linkage capabilities and state-specific applications for
    the linked data. Three of the five states--Iowa, Nebraska, and South
    Carolina--plan to focus on safety belt and roadway issues by comparing
    injury severity and average inpatient charges for restrained and
    unrestrained victims of motor vehicle crashes. South Carolina will
    report its results by sex, age, and county for direct access by the
    public on the Internet, and Nebraska will add intoxicated drivers to
    the analysis. Iowa will analyze the benefits of roadway safety
    improvements, such as guardrails, to crash rates and injury severity.
    Also in 1999, NHTSA has published several reports from CODES states
    including An Analysis of Seat Belt Use and Outcomes in 1996 Maine
    Crashes (prepared by the Maine CODES team) and Using Linked Data To
    Evaluate the Effectiveness of Child Safety Seats in Pennsylvania
    (prepared by the Pennsylvania CODES team). Both reports support the
    benefits of safety belt and child safety seat usage. Of the seven CODES
    states funded in fiscal year 1998, New Hampshire and Oklahoma are using
    their linked data to identify differences in injury patterns by
    restraint use. CODES states have not yet investigated how they could
    support investigation of injuries associated with the engineering
    enhancements in specific vehicles or types of vehicles because not all
    states collect the information necessary for these studies--the vehicle
    identification number (VIN). Without the VIN, it is not possible to
    identify which engineering enhancements are present in a vehicle or
    even to classify accurately that vehicle by make or model. A NHTSA
    project, being conducted cooperatively with the FHWA and the National
    Association of Governors' Highway Safety Representatives, will identify
    a Model Minimum Uniform Crash Criteria (MMUCC) for reporting motor
    vehicle crash data. The collection of the VIN is included in that
    Model.
              partnership for a new generation of vehicles (pngv)
        Question. Please prepare a list indicating the allocation of PNGV
    funds for fiscal year 1999 that details recipient of funds (including
    government entities), the amount, and type of activity.
        Answer.

    ------------------------------------------------------------------------
                                                                Fiscal year
                Recipients                   Description       1999 funding
    ------------------------------------------------------------------------
    George Washington University......  Finite Element Model        $400,000
                                         Development,
                                         Validation, and
                                         Analysis (Minivan,
                                         small pickup, large
                                         van).
    Oak Ridge National Laboratory.....  Finite Element Model         250,000
                                         Development,
                                         Validation, and
                                         Analysis (Sport
                                         utility vehicle).
    Applied Research Associates.......  Finite Element Model         100,000
                                         Development,
                                         Validation, and
                                         Analysis (Large
                                         car).
    TNO Madymo North America..........  Vehicle Articulated          300,000
                                         Mass Model
                                         Development
                                         (Subcompact car,
                                         compact car,
                                         midsize car, sport
                                         utility vehicle).
    EASi Engineering..................  Vehicle Articulated          400,000
                                         Mass Model
                                         Development (base
                                         vehicle of PNGV
                                         platforms).
    University of Virginia............  Vehicle Interior/            200,000
                                         Occupant Model
                                         Development.
    Volpe National Transportation       System Model                 300,000
     Systems Center (U.S. DOT).          Development,
                                         Integration, Fleet
                                         Studies.
    TRC of Ohio.......................  Vehicle/Component            300,000
                                         Testing.
    Various...........................  Vehicle Purchases...         100,000
    Volpe National Transportation       Computer Hardware/           150,000
     Systems Center.                     Software Purchase.
                                                             ---------------
          Total Funding...............  ....................       2,500,000
    ------------------------------------------------------------------------

        Question. What are the implications of funding the PNGV program at
    the fiscal year 1999 level?
        Answer. Funding at the fiscal year 1999 level would entail a $1
    million reduction in the planned activities. This would delay the
    completion of the development of the articulated models of the vehicle,
    vehicle interior, and occupants; and would result in a delay of the
    completion of the systems model integration and fleet studies.
        Question. What assurance does NHTSA now have that the final
    products from the PNGV will meet U.S. safety standards?
        Answer. For PNGV vehicles to be introduced into the fleet in the
    United States, they have to comply with the then existing Federal motor
    vehicle safety standards. However, NHTSA has not received any assurance
    from the automobile industry that it is currently focused on the safety
    needs. Meeting the safety standards could be readily accomplished by
    the PNGV participants, provided a conscious effort is made in meeting
    that goal. Each of the participants has extensive experience in
    manufacturing vehicles that are in the anticipated weight range of the
    PNGV vehicles (i.e., 60 percent of that from which the PNGV vehicles
    are based) and which meet the safety standards. The real challenge
    facing the participants is ensuring that the overall safety of the
    fleet is maintained when the PNGV vehicles are introduced. This level
    of safety extends beyond that simply required by the safety standards.
    Therefore, there is a need for NHTSA's research activity in developing
    the systems model from which the overall safety of PNGVs can be
    evaluated.
        Question. How much of PNGV funding has been spent on economic
    analyses, market penetration studies, industry impact, and regulatory
    impact evaluations?
        Answer. No PNGV funding allocated to NHTSA has been spent on
    economic analyses, market penetration studies, and industry or
    regulatory impact evaluations.
                        nhtsa on-site contract employees
        Question. During the last three years, how many outside employees
    are under contract with NHTSA? How much was spent on contract employees
    in each year? How much is estimated to be allocated in fiscal year
    2000?
        Answer. Listed below is the information requested for NHTSA
    contractor employees working on-site in the Nassif Building.

                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                       No. of
                              Fiscal year                            contractor    Expended    Expended/    Planned
                                                                      employees                projected  allocation
    ----------------------------------------------------------------------------------------------------------------
    1997..........................................................           113        7.24  ..........  ..........
     1998.........................................................           117        8.28  ..........  ..........
    1999..........................................................           119  ..........        9.06  ..........
    2000..........................................................           120  ..........  ..........        9.62
    ----------------------------------------------------------------------------------------------------------------

                            administrative expenses
        Question. For fiscal year 1998, fiscal year 1999 and planned for
    fiscal year 2000, please provide a table similar to that provided
    previously to the Committee, showing the amount of funds spent or
    allocated for non-mandatory awards and bonuses, PCS, overtime pay,
    travel and training.
        Answer. The information follows:

                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                                      Fiscal year
                                         -----------------------------------
                                             1998        1999        2000
                                            Actual      Enacted     Request
    ------------------------------------------------------------------------
    Awards and Bonuses..................         653         649         669
    PCS.................................          68          87          87
    Overtime............................          37          40          45
    Travel..............................       1,329       1,125       1,501
                                         -----------------------------------
          Training......................         176         198         216
    ------------------------------------------------------------------------

                                   irm staff
        Question. Why is it necessary to hire two technical staff requested
    to support Y2K activities and to strengthen security on NHTSA's web
    site? Could these activities be supported by contractors?
        Answer. The President's Council on Year 2000 Conversion identified
    computer security as a significant concern due to the magnitude of Y2K
    renovation work performed on mission critical systems (often performed
    by contractors) and the system vulnerabilities introduced during the
    remediation process. Federal agencies are requested to review all
    systems to ensure increased vulnerabilities to ``cyber attacks'' were
    not introduced by opportunists seeking to capitalize on the Y2K problem
    and weaken the posture of agency security. Such attacks will surely
    continue beyond the turn of the century and become more frequent and
    technically sophisticated. In addition, the Department of
    Transportation (DOT) Office of the Inspector General recently cited all
    Operating Administrations for not conducting these security reviews.
        In order to effectively address the above concerns, NHTSA requests
    two full time equivalents to manage information systems (IS) security
    programs for its applications, networks and Internet systems. IS
    security has become specialized in these areas and it is no longer
    feasible for one person to adequately conduct IS planning and
    implementation for the multifaceted requirements in all areas.
    Implementing and maintaining a NHTSA-wide information systems security
    program requires unique technical skills to ensure appropriate
    technical and operational controls support overall management controls.
    To be most effective, OMB Circular A-130 requires management controls
    be part of day-to-day operations and an integral part of overall
    planning; thereby, demanding ongoing management by at least two career
    government employees. These governmental functions require the exercise
    of discretion in applying Government authority and the use of value
    judgment in making decisions for the Government, as required by Office
    of Management and Budget (OMB) Circular A-76, and could not be
    successfully supported by contractors.
             highway safety data systems and traffic records grants
        Question. Please describe how this new grant program is being
    implemented.
        Answer. By January 15 of each year, states can submit an
    application for a Highway Safety Data Systems and Traffic Records
    grant. A state that applies for a grant for the first time has three
    options for which it may apply: (1) an implementation grant, which
    requires that the state have in place a traffic records coordinating
    committee, an assessment or audit of its traffic records system that
    was conducted or updated within the past five years, and a strategic
    plan for effecting traffic records system improvements; (2) an
    initiation grant, that also requires an in place traffic records
    coordinating committee and an audit or assessment within the past five
    years, but only requires that development of a strategic plan has
    begun; or, (3) a start up grant, that requires the state to certify
    that it does not meet the criteria for either an implementation or an
    initiation grant. In fiscal year 1999--the first year of this program--
    NHTSA awarded 54 grants totaling $4.8 million to 47 states, DC, the
    territories and the Bureau of Indian Affairs (BIA). Start-up grants
    ($25,000 each) were awarded to 7 states, DC, 4 territories and the BIA,
    initiation grants ($63,100 each) to 11 states and implementation grants
    ($126,260) to 29 states and Puerto Rico. Three states did not apply.
        A state that has previously received only a start up grant may
    apply for either an initiation or an implementation grant in a
    subsequent year, under the same criteria listed above. A state that has
    previously received either an initiation or an implementation grant may
    apply for a subsequent year grant, provided that its traffic records
    coordinating committee continues to be in operation and continues to
    oversee implementation of the strategic plan. States receiving any
    grant funds are required to certify that the funds will be used only to
    adopt and implement an effective highway safety data and traffic
    records program, in accordance with 23 CFR 1335.10(b). A team of agency
    subject matter experts reviews all applications from the states and
    determines compliance with the grant criteria.
        Question. How are you overseeing the use of those funds by the
    states? What technical assistance is NHTSA providing to the states?
        Answer. States applying for Highway Safety Data Systems and Traffic
    Records grants must certify that the funds will be used only to adopt
    and implement an effective highway safety data and traffic records
    program. After grant award, a state must document for NHTSA how it
    plans to use these funds, as part of the its comprehensive Highway
    Safety Plan. Then, NHTSA's regional staff work with the states on a
    regular basis to provide oversight and technical assistance in
    implementation of the states' highway safety plan. Also, prior to
    receipt of a subsequent data grant, a state must document progress made
    in improving highway safety data systems and traffic records since the
    previous submission of a grant application, including an accounting of
    how previous grant funds were used. NHTSA's technical assistance
    efforts include offering the services of regional data analysis
    contractors. In addition, at a state's request, NHTSA facilitates the
    conduct of an independent assessment of a state's traffic records
    system by experts from across the nation. These traffic records
    assessments have been scheduled or are in the planning stages for all
    thirteen states that received start-up grants during fiscal year 1999
    and for the three states that elected not to apply for fiscal year 1999
    grants. Some states that completed assessments nearly five years ago
    have expressed interest in seeking NHTSA's help in updating them. Also,
    NHTSA has been providing technical assistance to states concerning
    expansion of the states' traffic records coordinating committees to
    ensure fuller representation of the organizations that use, collect or
    maintain traffic records files.
           section 405(b) child passenger protection education grants
        Question. Could the potential benefits of the Section 405(b) Child
    Passenger Protection Education Grant Program be accomplished by other
    grants authorized by TEA-21?
        Answer. The Section 405(b) Child Passenger Protection Education
    Grant Program is intended to help implement programs that educate the
    public about the many aspects of child passenger protection, including
    the proper installation of child restraints and the training and
    retraining of key personnel on all aspects of child restraint use.
    Other grants authorized by TEA-21 could possibly address the same
    objectives, but competing traffic safety issues may impede those funds
    from being spent on promoting child passenger safety. Only Section
    405(b) specifically targets the promotion of child passenger protection
    education and training.
        The Section 405 (a) Occupant Protection Incentive Grant Program is
    intended to help states implement and enforce programs that encourage
    proper use of safety belts and child restraints. One of the eligibility
    criteria under this grant program (states must meet 4 out of 6
    criteria) specifically focuses on promoting child passenger protection
    education, technician training and child safety seat clinics. States
    may use these grant funds only to implement and enforce adult and child
    occupant protection programs, including the activities that could be
    funded under Section 405(b).
        In addition, the funds awarded to States under the Section 402
    State and Community Grants program, the Section 157 Seat Belt Use
    Incentive Grant program, the Section 157 Seat Belt Use Innovative Grant
    program, and the Section 163 0.08 BAC Incentive Grant program may be
    used to promote child passenger protection initiatives, but there are
    no provisions in any of these other grant programs that would require
    States to use these grant funds specifically for child passenger
    protection activities.
        Buckle Up America establishes two goals. The first and more widely
    publicized goal is to increase seat belt use to 85 percent in 2000 and
    90 percent in 2005. The second goal is to reduce the number of child
    occupant fatalities (0-4 years) by 15 percent by 2000 and 25 percent by
    2005. In 1997, 612 children in this age group died as occupants in
    motor vehicles.
                               section 410 grants
        Question. How many states are receiving grant funds from fiscal
    year 1999 appropriations? Please indicate how much funding was provided
    to each state and how each state spent the grant.
        Answer. To date, no states have submitted applications for fiscal
    year 1999 Section 410 funds. Section 410 was significantly modified
    under TEA-21. The Interim Final Rule implementing the revised program
    was published in December 1998, and NHTSA Regional staff are currently
    providing technical assistance to the states on the new criteria.
    Applications for fiscal year 1999 funding are due by August 1. All
    grant funds provided under this incentive program must be used for
    activities to reduce alcohol-impaired driving.
                       state sanctions related to .08 bac
        Question. Are sanctions on states that do not enact .08 BAC laws
    still needed?
        Answer. To date, under the new TEA-21 incentive program, over 25
    states (including the District of Columbia) have introduced or
    indicated plans to introduce .08 BAC legislation, but only DC has
    enacted this legislation during fiscal year 1999. The potential funding
    has not been sufficient to overcome the resources that the opposition
    has mustered to defeat .08 legislation. It is difficult to educate the
    general public on .08 BAC issues because the science is complex. More
    importantly, the opposition to .08 circulates and publicizes
    misinformation and myths about the effects of an .08 law, in
    particular, that social drinkers will be arrested. The opposition
    (primarily, the alcoholic beverage industry) believes that .08 will
    effect its bottom line through a reduction in sales/consumption. The
    most recent research on this issue, commissioned by NHTSA, shows a
    slight (2-3 percent) but significant decrease in beer consumption due
    to .08 and .10 BAC laws, as well as Administrative License Revocation
    (ALR) laws. However, this could be associated with an existing downward
    trend nationwide. If this is a byproduct of legislation that saves
    lives, it may be considered worth the societal trade-off.
        The experience with sanctions generally has been positive. Two
    examples illustrate the effectiveness of sanctions. On July 1, 1984,
    only 18 states had Age 21 laws. The National Minimum Drinking Age Act
    was signed into law on July 17, 1984 by President Reagan. The Act
    strongly encouraged states to have laws prohibiting the ``purchase and
    public possession'' of alcoholic beverages by anyone under 21 years of
    age by withholding a portion of Federal-aid highway funds from states
    without such laws. In 1986, NHTSA and FHWA published a joint final rule
    implementing the statute. By 1988, all states had enacted an Age 21
    law.
        Zero Tolerance laws provide another example. On June 10, 1995, only
    24 states had enacted Zero Tolerance laws despite incentive grant funds
    offered through the Section 410 program. On that date, President
    Clinton called on Congress to make Zero Tolerance the law of the land.
    On November 28, 1995, the National Highway Safety Act was signed which
    included the Zero Tolerance requirement. All states now have enacted
    this legislation.
        In these instances, sanctions were effective in motivating states
    to enact the desired lifesaving legislation. However, incentives are
    preferable to sanctions, and the agency is committed to finding ways to
    enhance the ability of incentives to encourage enhanced traffic safety
    initiatives.
        Question. As more states enact .08 BAC laws, the amount of
    incentive funds granted to each state will decrease. Will the incentive
    program still be effective despite decreasing grants?
        Answer. Currently, it is unclear whether the new TEA-21 incentive
    program is effective in encouraging states to enact .08 BAC laws. To
    date, only the District of Columbia has enacted new .08 BAC legislation
    since the incentive was established. Unless many more states pass a .08
    BAC law, it is unlikely that decreasing grant funds will factor into
    the effectiveness of the incentive program since the authorized funding
    level increases at least $10 million each year--from $55 million
    available in 1998 to $110 million in 2003.
                                     ______

                  RESEARCH AND SPECIAL PROGRAMS ADMINISTRATION

                     Questions Submitted by Senator Shelby

               new positions within research and special programs
        Question. Page 50 of the budget justification states that there
    will be a direct increase of 5 full time equivalent workyears (FTEs)
    from fiscal year 1999 to 2000 (187 to 192). However, when each office's
    request is looked at individually, it appears that RSP is requesting an
    6.5 FTE increase: 4.5 FTEs in Hazardous Materials Safety, 1 FTE in
    Emergency Transportation, and 1 FTE in Program Support (which assumes a
    total of 13 new positions throughout Research and Special Programs,
    with each position at half a year). Please explain this discrepancy.
        Answer. RSPA is requesting an increase of 4.5 FTE (rounded to 5 FTE
    in the summary tables) funded by direct appropriations and 27 FTE
    funded by reimbursements, as shown on page 38 of our budget. The
    difference noted in your question is the net effect of a decrease in
    the base number of FTE funded by direct appropriations, offset by an
    increase of 3 reimbursable FTE. Our request under the Research and
    Technology tab on page 99 contains a proposal to fund two existing FTEs
    and one new FTE from the Highway Trust Fund. Due to a technical error,
    the summary for the RSP appropriation on page 50 does not show a 3 FTE
    increase for Reimbursable FTE, but it should.
                      office of hazardous materials safety
                       new or increased registration fees
        Question. The bill language provision regarding charging user fees
    and depositing such fees as an offsetting collection to the
    appropriation appears to hold harmless the agency from any failure to
    collect the full $4,575,000 in user fees--in other words, should the
    new user fees not be authorized, or the total anticipated amount not be
    collected, the agency still receives the underlying increase in
    appropriated general funds. Is this correct?
        Answer. If fees are not authorized to be used for the Hazardous
    Materials Safety program, then the amount proposed from user fees in
    our fiscal year 2000 request ($4,575,000) would need to be appropriated
    from the general fund. Even if the proposal is authorized, the funding
    is requested as discretionary and must be decided upon by the
    appropriators. If the proposal is authorized and appropriated and the
    amount of funding necessary is not collected from user fees, then the
    funding would not come automatically from the General Fund.
        Question. The administration's appropriations legislative proposal,
    contingent upon authorization, gives the Secretary authority to charge
    a fee for the Department carrying out the transportation hazardous
    materials oversight responsibilities outlined in chapter 51 of title 49
    United States Code. Certain sections of chapter 51 are exempted from
    this new fee-charging ability in the proposed bill language. Please
    enumerate the exempted sections, and explain why they are exempted.
        Answer. The Administration's hazardous materials transportation
    reauthorization bill proposes broader uses than the current law for the
    registration fees imposed and collected under section 5108(g). Proposed
    section 5108(g)(2)(B) would require the Secretary to collect fees
    adequate to cover:
      --supplemental training grants (proposed sections 5116(j) and
            5129(b));
      --planning and training grants (proposed sections 5116(a), (b) and
            (f) and 5129(d));
      --North American Emergency Response Guidebook (NAERG)(proposed
            section 5129(e));
      --administrative costs of fee collection (proposed sections
            5116(I)(4) and 5129(f));
      --Research and Special Program Administration's (RSPA) Hazardous
            Materials Safety (HMS) program costs (proposed section
            5129(a)(2));
      --training curriculum costs (proposed sections 5115 and 5129(c)); and
      --training of hazmat employee instructors (proposed sections 5107(e)
            and 5129(g))
        Proposed section 5129(a) lists the following specific activities
    that would not be funded out of the registration fees (with reasons for
    that lack of fee-funding in brackets):
      --motor carrier safety permits (proposed section 5109)) [to be funded
            from Federal Highway Administration (FHWA) appropriations];
      --highway routing of hazardous material (proposed section 5112)) [to
            be funded from FHWA appropriations];
      --unsatisfactory safety ratings (proposed section 5113) [no funding
            required for this cross-reference to penalty provisions];
      --uniform registration and permitting forms and procedures (proposed
            section 5119)) [to be funded from FHWA appropriations]; and
      --study of possible Federal permits for high-risk hazardous material
            carriers (proposed section 5128) [to be funded from FHWA
            appropriations].
        Question. In February 1999, the Secretary transmitted a bill to the
    President for introduction and referral to the appropriate committees
    to authorize appropriations for hazardous materials transportation
    safety. This bill would provide continued authority for the hazmat
    program through 2005 and would fund RSPA's entire Hazardous Materials
    Safety program from registration fees which are currently used to fund
    the Hazardous Materials Emergency Preparedness Grants program. On an
    annualized basis, how much does the agency anticipate collecting under
    this new fee structure (if the administration's bill is enacted as
    requested)? Does this fund the entire hazardous materials safety
    program and the emergency preparedness grants program?
        Answer. Consistent with the Administration's policy, the fiscal
    year 2000 budget and the Hazardous Materials Transportation
    Reauthorization proposals to Congress include legislative authority to
    fund RSPA's entire Hazardous Materials Safety (HMS) Program from the
    registration fee program, beginning with the fourth quarter of fiscal
    year 2000. If this authority is granted, RSPA will initiate additional
    rulemaking action to collect the approximately $35 million needed to
    adequately fund both the Hazardous Materials Emergency Preparedness
    Grants program (HMEP)($15 million) and RSPA's HMS Program ($20
    million)on an annual basis.
        Question. How has the hazardous materials transportation industry
    reacted to the proposed increase of the minimum annual registration fee
    from $300 to $500, and to the overall policy shift to fund all
    regulatory and compliance activities from user fees rather than general
    revenues?
        Answer. RSPA plans to propose a fee structure that will retain a
    relatively modest fee for the majority of registrants that are small
    businesses. We believe that an equitable assessment of fees that is
    easy to understand and implement, but which will also provide increased
    funding for the training and planning grants, will be acceptable to
    industry, and we will be seeking industry input as the rulemaking
    proceeds.
        Question. In April 1998, the DOT Inspector General published a
    management advisory on the hazardous materials registration program
    which found that RSPA does not collect the full amount of potential
    registration fees. RSPA's collections are limited because it has not
    identified all shippers and carriers that are potentially subject to
    its regulations, does not follow up to ensure that covered entities
    register as required, and has not established an equitable graduated
    fee structure. How much of the assumed increase from user fees can be
    attributed to improved registration fee collection under current law,
    in response to the recommendations in the Inspector General's
    management advisory? How much of the assumed increase from user fees
    can be attributed to new or increased fees?
        Answer. Actions taken consistent with the Inspector General (IG)
    recommendations have identified approximately 1,000 new registrants and
    raised an additional $500,000, including collections from prior years.
    On March 22, 1999, the IG determined that our actions were timely and
    appropriate and reported the recommendations as resolved and closed.
    RSPA expects that these new registrants will contribute about $250,000
    annually. The additional increase in the estimated fiscal year 2000
    collection to $14.5 million reflects the proposed revisions to the
    registration program fee structure.
        Question. How has RSPA responded to each of the four
    recommendations made by the Inspector General to improve the hazmat
    registration collection process?
        Answer. RSPA mailed registration information to approximately
    48,500 companies from two FHWA sources as an alternative to using the
    state sources recommended by the IG. The IG agreed at a meeting with
    RSPA that requiring responses from entities not required to register,
    as they had recommended, would impose a paperwork burden on the public
    inconsistent with Federal policy. RSPA increased its follow-up mailings
    to companies previously registered or newly identified as possible
    registrants in accordance with the third IG recommendation.
    Approximately 42,000 companies were included in these additional
    mailings. RSPA is actively pursuing the publication of a notice of
    proposed rulemaking with the intention of increasing the monies
    available for the HMEP Grants program.
                    personnel issues and operating expenses
        Question. What steps have been taken to comply with the staffing
    level that was approved by Congress in fiscal year 1999, the full
    requested level of 122 FTEs? What is the current onboard FTE strength?
        Answer. The Office of Hazardous Materials Safety (OHMS) has a full-
    time permanent (FTP) authority of 129 positions, and full-time
    equivalent (FTE) authority of 122. We are currently fully staffed with
    122 FTE on board.
        Question. Please provide a table showing the authorized number of
    inspectors for each of the last three fiscal years, and the number of
    inspectors actually on-board during those periods.
        Answer. The following table shows the authorized number of
    inspectors and the actual number of inspectors on-board for the last
    three years.

    ------------------------------------------------------------------------
                                                                       On-
                        Fiscal year                      Authorized   board
    ------------------------------------------------------------------------
    1997...............................................         37        36
    1998...............................................         37        34
    1999...............................................         37   \1\ 34
    ------------------------------------------------------------------------
    \1\ On board as of April 5, 1999.

        Question. For each of the key offices under the Associate
    Administrator for Hazardous Materials Safety, please prepare a breakout
    of the number of personnel assigned to each office for each of the last
    three fiscal years, the grade level, and number of current vacancies.
        Answer. The following table summarizes the current on-board FTP
    staff, grade levels, and vacancies in OHMS for the last three years.

    ----------------------------------------------------------------------------------------------------------------
                                                                   Fiscal year       Fiscal year       Fiscal year
                                                                1997--as of 6/4/  1998--as of 4/15/ 1999--as of 4/5/
                                                                       97                98                99
                              Office                           -----------------------------------------------------
                                                                 No. of   Grade    No. of   Grade    No. of   Grade
                                                                FTP/VAC   levels  FTP/VAC   levels  FTP/VAC   levels
    ----------------------------------------------------------------------------------------------------------------
    Associate Admin. & Int'l Standards........................      6-1    2-SES      6-1    2-SES      6-0    2-SES
                                                                            1-15              1-15              1-15
                                                                            1-14              1-14              1-14
                                                                            1-13              1-13              1-13
                                                                             1-7               1-7               1-8
    Standards.................................................     16-4     1-15     20-1     2-15     19-3     2-15
                                                                            3-14              5-14              5-14
                                                                            1-13              2-13              3-13
                                                                            4-12              4-12              4-12
                                                                            1-11              3-11              1-11
                                                                             3-9               3-7               1-9
                                                                             2-7               1-6               2-7
                                                                             1-6                                 1-6
    Technology................................................     14-5     1-15     18-1     2-15     18-1     2-15
                                                                            4-14              3-14              3-14
                                                                            7-13              8-13             11-13
                                                                             1-7              2-12               1-7
                                                                             1-6              1-11               1-6
                                                                                               1-7
                                                                                               1-6
    Exemptions & Approvals....................................     15-2     1-15     15-2     1-15     15-2     1-15
                                                                            1-14              1-14              2-14
                                                                            5-13              6-13              6-13
                                                                            4-12              3-12              4-12
                                                                             1-9              1-11              1-11
                                                                             2-7               1-9               1-6
                                                                             1-6               1-7
                                                                                               1-6
    Enforcement...............................................    29-10     1-15     35-3     1-15     35-3     1-15
                                                                            6-14              7-14              7-14
                                                                            6-13              5-13              5-13
                                                                            8-12             10-12             17-12
                                                                            6-11             10-11              3-11
                                                                             1-9               1-9               1-9
                                                                             1-7               1-7               1-7
    Initiatives & Training....................................      8-3     1-15      9-2     1-15     10-1     1-15
                                                                            1-14              2-14              2-14
                                                                            1-13              1-13              2-13
                                                                            4-12              4-12              3-12
                                                                             1-7               1-7               1-9
                                                                                                                 1-7
    Planning & Analysis.......................................     14-2     2-15     14-2     2-15     14-2     2-15
                                                                            1-14              1-14              1-14
                                                                            5-13              5-13              5-13
                                                                            3-12              4-12              4-12
                                                                            1-11               1-7               1-7
                                                                             1-7               1-6               1-6
                                                                             1-6
                                                               -----------------------------------------------------
          Totals..............................................   101-28  .......   117-12  .......   117-12  .......
    ----------------------------------------------------------------------------------------------------------------
    Note: RSPA also has 5 other than FTP to bring our total FTE to 122. These positions are: (1) Reader for visually
      impaired employee, (1) Co-op student, (1) Stay-in-School student, and (2) worker trainees.

        Question. The Office of Hazardous Materials Safety is requesting an
    increase of 9 staff members (at \1/2\ work-year per position). The new
    positions include 5 regional inspection and enforcement staff, 1 team
    leader to coordinate the field operations, 2 staff members to work with
    USDA and the FDA on implementation of the Sanitary Food Transportation
    Act, and 1 transportation and information specialist to develop
    compliance assistance packages. Please give the full annualized PC&B
    costs for each of these nine positions (which should add to a total of
    $684,000).
        Answer. The full annualized cost (1 FTE) for the nine positions
    (which equals the cost for 9 FTE) identified in our budget for
    Hazardous Materials Safety is $740,000. That equals an average salary
    and benefits for a GS-13, Step 5 level employee at a cost of $82,200
    annually.
        The amount requested in the RSPA appropriation for an increase of
    4.5 (6.5 new) FTE and an increase of 13 (11 new) positions is $342,000.
    That amount includes a reduction of $198,000 from the base for our
    proposal to fund 2 existing FTE in Research and Technology from the
    Highway Trust Fund. We are also requesting a third FTE funded from the
    Highway Trust Fund, which does not impact the base.
        Question. Please identify the amount and nature of any
    reprogramming or funding shift below the reprogramming threshold that
    occurred during the last two years.
        Answer. The Office of Hazardous Materials Safety did not reprogram
    funding in fiscal year 1998. That office does not anticipate the need
    to reprogram funding in fiscal year 1999. Minor transfers occurred in
    fiscal year 1998 and fiscal year 1999 between object classes within
    operating expenses only, with one exception, to meet changing
    priorities. The exception in fiscal year 1998 was the transfer of
    $200,000 from the Office of Emergency Transportation's Contract
    Programs account to the Office of Hazardous Materials Safety's R&D
    account. The funding was transferred to conduct a Hazard Analysis &
    Critical Control Point (HACCP) study similar to the one conducted by
    FDA/USDA but concerning transportation of hazardous materials. The
    study would look at actual incidents to determine what factors in the
    system could be reduced to avoid consequences given various degrees of
    probability. The funding was available for transfer because amounts
    initially vetoed in fiscal year 1998 were restored after supplemental
    legislation provided funding for the same purpose.
                              information systems
        Question. What technology is the HMIS using as its core information
    handling system? How old is that system? When will that system be
    updated?
        Answer. The Hazardous Materials Information System (HMIS) currently
    resides on a Compaq Alpha 7620 platform as part of the computer cluster
    located at the Volpe Center. The operating system software is Compaq's
    OpenVMS, and the database management system software is Computer
    Corporation of America's System 1032. The operating system and database
    management system software were last upgraded in 1997. RSPA is in the
    process of migrating the HMIS to a new database management system
    running on state-of-the art software. This new system is scheduled to
    be completely functional in fiscal year 2001.
        Question. Do the other modal administrations and the public have
    access to the system or does a contractor have to provide all of the
    separate analyses requested by the various modes?
        Answer. All modal administrations as well as all Federal, state and
    local government agencies can be provided direct access to the full
    HMIS system. Sixty state and local government agencies and over 480
    staff in 60 Federal offices use the HMIS. At the state level, incident
    data are used to support legislative and regulatory actions, prioritize
    enforcement efforts, allocate emergency response training resources,
    conduct studies, and plan and implement hazardous materials programs.
    Direct public access is currently provided to the summary data and
    statistics posted on OHMS's Internet website. RSPA's HMIS support
    contractor can also provide customized analyses of the data to
    requesters on a cost-reimbursable basis.
        Question. What plans, if any, does OHMS have to update the system
    and provide search access to data via the Internet?
        Answer. Full Internet access and search capability are functions
    planned for the HMIS as part of its migration to the new database
    management system. Full functionality is scheduled for fiscal year
    2001.
                             research and analysis
        Question. What have you done so far with the additional funds
    provided for research to address propane gas service?
        Answer. To date, RSPA has concentrated on the development of a
    comprehensive safety program for the transportation and unloading of
    liquefied compressed gases in cargo tank motor vehicles. RSPA
    established a negotiated rulemaking advisory committee (Committee)
    comprised of representatives of interests affected by our regulations
    working together to analyze safety issues and identify potential
    solutions. The Committee has reached agreement on all issues, and a
    notice of proposed rulemaking (NPRM) in Docket HM-225A was published on
    March 22, 1999. We expect to publish a final rule this summer.
        The NPRM proposes a two-year period from the date of the final rule
    for development and testing of emergency discharge control technology.
    After a final rule is in place, RSPA plans to use the additional
    funding to work with the Committee and in partnership with industry on
    the development and testing of emergency discharge control technology.
        Question. What progress have you made since last year in developing
    improved performance criteria for both passive and remote-controlled
    shutoff systems on cargo tank motor vehicles? Do you expect to meet the
    reporting requirements specified in the committee report issued last
    year?
        Answer. On July 16, 1998, RSPA established a negotiated rulemaking
    advisory committee (Committee) to develop recommendations for
    regulations applicable to the transportation and unloading of liquefied
    compressed gases in cargo tank motor vehicles. In a negotiated
    rulemaking, representatives of interested parties worked together to
    analyze safety issues and identify potential solutions.
        The Committee met six times between July 1998 and February 1999,
    and reached consensus on a comprehensive safety program. The program
    recommended by the Committee includes new performance criteria for the
    following elements: (1) new inspection, maintenance, and testing
    requirements for cargo tank discharge systems; (2) revised requirements
    for monitoring unloading operations of liquefied petroleum gas and
    anhydrous ammonia to take account of certain unique operating
    characteristics while assuring that the person attending the unloading
    operation can quickly determine if an unintentional release occurs; and
    (3) revised requirements for state-of-the-art emergency discharge
    control equipment on cargo tank motor vehicles, such as passive systems
    that will shut down unloading without human intervention and remote
    control devices that enable an attendant to stop the unloading process
    at a distance from the vehicle. The proposal is flexible and cost-
    effective and, when fully implemented, will materially improve the
    safety of cargo tank unloading operations.
        The proposed regulations will replace the temporary regulation,
    which expires on July 1, 1999. A notice of proposed rulemaking was
    published on March 22, 1999. We expect to publish a final rule this
    summer.
                       inspection and enforcement program
        Question. How has RSPA been working with FHWA to develop an
    electronic intrastate database to determine the effectiveness of HM-
    200? What is RSPA's technical and financial involvement? What is the
    state of that project? Are funds requested for that activity in fiscal
    year 2000?
        Answer. We have worked with FHWA as it develops an intrastate
    database intended to support an enforcement strategy and to determine
    the effectiveness of HM-200 in contributing to a reduction in highway-
    related incidents involving the intrastate transportation of hazardous
    materials. RSPA has not provided funds for this effort and is not
    requesting funding for the project in fiscal year 2000.
        Question. What are the GPRA goals and performance measures for the
    OHMS enforcement and compliance program? How well did you perform last
    year against the fiscal year 1998 measures?
        Answer. The enforcement program has one performance measure:
    decrease the percentage of compliance inspections leading to
    enforcement cases to less than 18 percent of reinspections in fiscal
    year 1998 and fiscal year 1999 (baseline is 25 percent in fiscal year
    1995). In fiscal year 1998, the percentage of compliance inspections
    leading to enforcement cases (including tickets) was 18.3 percent.
        Question. Please describe how OHMS measures the effectiveness and
    productivity of the inspection and enforcement program. Include average
    number of enforcement cases, warnings issued, amounts of civil
    penalties assessed, and the amounts collected for each of the last
    three years. Please evaluate those data on a per inspector or similar
    normalized basis.
        Answer. RSPA does not measure productivity based on how many
    inspections, tickets, cases, or penalties OHMS inspectors produce each
    year. Rather, we require each inspector to conduct inspections a
    certain number of weeks per year. Our goal is to have each inspector
    fully trained and complete his or her assigned amount of inspection
    time. Inspections are intended to ensure compliance, vary in length and
    complexity, involve considerable training assistance, and often do not
    result in any sanctions.

    ------------------------------------------------------------------------
                                         1996 \1\       1997         1998
    ------------------------------------------------------------------------
    Cases Initiated..................          246          239          223
    Tickets Initiated................  ...........           84          343
    Cases Closed.....................          189          189          244
    Tickets Closed...................  ...........           62          237
    Case Penalties Collected.........     $900,418   $1,164,154   $1,412,593
    Ticket Penalties Collected.......      $70,725     $177,175     $257,239
    Total Penalties Collected........     $971,143   $1,341,329   $1,669,832
    Warning Letters..................          166          249          217
    Work Years of Effort.............        19.75         28.0        31.67
    Cases Initiated/Work-Year........         12.1          6.9          7.0
    Cases Closed/Work-Year...........          9.6          7.1          7.7
    Penalties........................      $45,693      $41,577      $44,604
    Warning Letters/Work-Year........          8.4          8.9          6.9
    Tickets Issued/Work-Year.........  ...........          6.1         10.8
    Tickets Close/Work-Year..........  ...........          5.2          7.5
    Ticket Penalties/Work-Year.......  ...........       $6,328       $8,122
    ------------------------------------------------------------------------
    \1\ Tickets are not included in the per-work-year statistics because the
      first activity did not occur until June 1996.

        Question. Please calculate the average settlement percentage
    [amount of civil penalties collected for valid claims divided by the
    amount of civil penalties originally assessed for valid claims] for
    those hazmat cases. Please provide data comparable to those provided
    last year.
        Answer. The following tables describe civil penalty cases and
    tickets closed in the years indicated.

    ------------------------------------------------------------------------
                                         1996 \1\     1997 \1\     1998 \1\
    ------------------------------------------------------------------------
    Penalties Proposed...............   $1,358,225   $1,608,095   $2,053,196
    Penalties Collected..............     $900,418   $1,164,154   $1,412,593
    Percentage Collected.............           66           72          69
    ------------------------------------------------------------------------
    \1\ Does not include tickets.

    ------------------------------------------------------------------------
                                           1996         1997         1998
    ------------------------------------------------------------------------
    Ticket Proposed..................      $70,725     $180,325     $257,980
    Penalties Ticket Collected.......      $70,725     $177,175     $257,239
    Penalties Percentage Collected...          100           98         99.7
    ------------------------------------------------------------------------

        Question. Will the compliance assessment audits to be performed by
    the five new staff members solely be for educational purposes? What
    will be the scope and nature of those audits? Will any enforcement
    actions result from those activities? Will other inspectors now on
    staff be conducting compliance assessment audits or will those
    employees continue enforcement-oriented activities?
        Answer. Although the strategy for utilizing five requested
    positions is still in development, RSPA intends to analyze past
    enforcement histories to identify entities with chronic compliance
    issues. RSPA will then contact them with an invitation to work with us
    to develop comprehensive compliance plans. RSPA would allow the
    entities some time to prepare and implement these plans without threat
    of enforcement action. Once the plans were in place, RSPA would inspect
    at some future date. Any subsequent noncompliance might result in
    enforcement action. In short, while the process itself involves
    education to improve compliance, those participating in it will still
    be responsible for complying with the regulations. Although the five
    new positions will be primarily responsible for this program, RSPA
    expects to involve other inspectors, especially when dealing with large
    entities.
        Question. What are the implications of not funding the
    transportation and information specialist position specified on page 58
    of the budget justification? How many staff do you currently have on
    board in your training office? Why can't those personnel develop the
    compliance assistance packages associated with HM-200 and with other
    recent rulemakings? Aren't those staff already developing such
    materials?
        Answer. The size of the regulated community significantly increased
    with the adoption of HM-200, which extended the Federal Hazardous
    Materials Regulations (HMR) to all intrastate motor carrier
    transportation of hazardous materials. Many small hazardous materials
    shippers and carriers, previously not subject to Federal regulations,
    need training and educational materials tailored to small businesses to
    support training requirements and voluntary regulatory compliance. This
    position will provide much needed support in developing educational and
    training materials targeted to specific areas of hazardous materials
    transportation safety. Our training office has a total of 9
    professional and 1 clerical staff. The training staff develops and
    distributes educational and outreach materials including training
    packages, information brochures, and videotapes. It also publishes and
    distributes the NAERG. It conducts outreach and co-sponsors the
    Cooperative Hazardous Materials Enforcement Development program and a
    series of multi-modal seminars. As the level of outreach and training
    needs have increased, an increased demand for materials that provide
    more technical support has developed. Our training staff is not able to
    keep up with the demand for the development and distribution of
    publications, videotapes and training packages. Without this additional
    position, the backlog will increase and materials needed to enhance
    compliance and preparedness will not be produced, which could have a
    negative impact on the safe transportation of hazardous materials.
        Question. What changes in enforcement philosophy or practice have
    you made since last year?
        Answer. RSPA has made no significant changes to its enforcement
    philosophy or practice since last year. We continue to believe in
    reaching as many regulated entities as we can through inspections and
    outreach, providing awareness and information in both arenas, and
    taking appropriate enforcement action when warranted.
        With the training of the last of the inspectors hired in 1997
    nearly complete, RSPA increased the number of compliance inspections
    conducted in 1998 by 25 percent, particularly inspections of shippers.
    RSPA's regional hazardous materials offices also increased their
    technical assistance and training to state and local enforcement and
    response personnel, and industry and the public through presentations,
    seminars, and workshops. RSPA continued its successful interagency
    agreement with the Department of Defense for package testing. By
    targeting packaging marked as capable of withstanding the most rigorous
    testing requirements, RSPA has identified compliance problems and
    shared them with industry representatives. We have requested additional
    funds to expand our testing capability and purchase more packages in
    the future.
        RSPA has asked for six positions to expand its compliance outreach
    effort. If these positions are provided, RSPA intends to establish a
    compliance intervention program focusing on companies posing increased
    risk in transportation. Enforcement data would be analyzed for evidence
    of companies that continue to surface as violators in repeat
    enforcement actions. Those companies would be contacted by RSPA and
    asked to participate with RSPA in a one-on-one intervention with the
    goal of developing a corporate-wide compliance plan.
        Question. With the increase in enforcement field office outreach
    and training efforts, has the enforcement office reduced the number of
    inspections or reinspections conducted?
        Answer. No. The number of inspections increased by over 12 percent
    in 1997, from 1,218 in 1996 to 1,365, and by 25 percent in 1998, from
    1,365 to 1,716.
                    shipper and carrier registration program
        Question. How much of the proposed $320,000 increase for the
    registration program is associated with implementing the
    recommendations in the April 1998 Inspector General's management
    advisory?
        Answer. A portion of the increase will be used, in accordance with
    the IG recommendations, to expand public information efforts and
    enlarge follow-up programs to publicize any changes to the registration
    requirements. Additional funds will finance increased costs for the
    services provided by banks and contractors under the anticipated
    revised regulations. Services provided by banks include data entry of
    the registration statements as well as financial services. In fiscal
    year 1998 RSPA reimbursed the U.S. Department of Treasury approximately
    $45,000 for bank services in excess of those covered by Treasury's
    lockbox bank arrangements. In the past, these costs were covered by
    Treasury. An increase in this amount is anticipated for fiscal year
    2000. The remaining funds will pay for additional costs associated with
    an anticipated increase in the number of annual registrations that will
    occur if the proposed revisions to the registration program are
    instituted in fiscal year 2000. These services include registration
    certificate issuance, assistance to registrants, and additional
    mailings and public informational efforts.
        Question. Please display the total in registration fees collected
    for each of the last five fiscal years, broken out by use (emergency
    response activities and administrative costs). How much do you expect
    to collect during fiscal year 1999 and during fiscal year 2000?
        Answer.

                                          EMERGENCY PREPAREDNESS FUNDS RECEIPTS
                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                      Processing fee  Grants program
                            Registration year                            receipts        receipts     Total receipts
    ----------------------------------------------------------------------------------------------------------------
    1994............................................................           1.397           6.986           8.383
    1995............................................................           1.365           6.873           8.238
    1996............................................................           1.605           6.910           8.515
    1997............................................................           1.300           7.372           8.673
    1998............................................................           1.409           7.970           9.379
    1999 \1\........................................................           1.400           7.000           8.400
    2000 \1\........................................................           1.125          14.500          15.625
    ----------------------------------------------------------------------------------------------------------------
    \1\ Estimate.

        Question. For each of the modal administrations that enforce the
    registration requirement, please present data on the number of
    enforcement actions taken against those that have not registered or
    paid the required fee, or failed to present the registration number as
    required. What else is being done to ensure that those companies which
    are required to pay do pay? What recent checks for compliance were
    conducted?
        Answer. The FHWA opened 374 cases between June 1993 and September
    1998 that included citations for violations of the registration
    regulations. Additionally, FHWA has issued 96 ``Notices of the
    Requirement to Register,'' an informal notice developed for use during
    Roadcheck 1993. From June 1995 through June 1998, FRA and state rail
    inspectors issued 185 defect notices related to the registration
    requirements. In CY 1995 through 1998, RSPA's Office of Hazardous
    Materials Enforcement initiated 80 enforcement actions at included
    violations for failure to register.
        RSPA continues to implement a public information effort by mailing
    registration information to companies identified in Federal sources as
    being likely to be required to register. In fiscal year 1998, RSPA
    implemented recommendations from the IG that enlarged this effort. RSPA
    also annually publishes a public notice in the Federal Register
    outlining the registration program requirements, sends information to
    cooperating industry groups for publication in their newsletters, and
    supplies informational brochures to requesting organizations for
    distribution to their members. RSPA places registration information in
    information racks in approximately 200 truck stops across the Nation.
    In addition to the Federal enforcement efforts, most state enforcement
    agencies assume responsibility for enforcing the Federal HMR, including
    the registration requirements.
        Question. What is the scope of cooperation and assistance that you
    are receiving from the Office of Motor Carriers and Highway Safety
    regarding enforcement of the hazmat registration program? How many new
    cases did FHWA open during each of the last three years? How many did
    they close? What action was taken on each case?
        Answer. RSPA and FHWA's Office of Motor Carriers and Highway Safety
    (OMCHS) continue to work together to improve compliance with the
    registration program. For example, OMCHS has incorporated the
    registration regulations into its routine compliance review procedures
    and has issued at least 374 citations for failure to register or for
    related record-keeping requirements, of which 79 were issued in fiscal
    year 1996, 44 in fiscal year 1997, and 35 in fiscal year 1998. When
    cases for failure to register are completed, OMCHS frequently issues a
    press release to highlight the enforcement actions taken. RSPA supplies
    copies of the registration brochure to the OMCHS regional offices for
    them to distribute.
        Question. What compliance rates were achieved in the 1996-1997
    registration cycle and are estimated for the 1998-1999 registration
    cycle?
        Answer. We believe compliance with the registration requirement is
    greater than 90 percent. This conclusion is based upon analysis by use
    of the Truck Inventory and Use Survey (TIUS) (1987), which provides
    specific data on truck characteristics and other data on
    characteristics of the hazardous materials industry. Included in TIUS
    are data on the number of trucks involved in hazardous materials
    transport, and the number of trucks and/or trailers owned and/or
    operated at the same home base. We were able to extrapolate from these
    data the approximate number of companies, not under lease, using one or
    more placarded trucks weighing 26,000 pounds or more. Airlines and
    railroads are well known, and we are confident that they are
    registered. During fiscal year 1996 the OMCHS opened 79 enforcement
    cases citing the registration regulations as a result of 3,215
    compliance reviews of hazardous materials carriers, indicating a 97
    percent compliance rate. During fiscal year 1997 the OMCHS opened 44
    enforcement cases citing the registration regulations as a result of
    1,369 compliance reviews of hazardous materials carriers, indicating a
    97 percent compliance rate. During fiscal year 1998 the OMCHS opened 35
    enforcement cases citing the registration regulations as a result of
    2,032 compliance reviews of hazardous materials carriers, indicating a
    98 percent compliance rate. During CY 1996 RSPA's Office of Hazardous
    Materials Enforcement conducted 610 inspections resulting in 15
    citations of the registration regulations. In CY 1997 875 inspections
    were performed, resulting in 20 citations of the registration
    regulations. In CY 1998 1,053 inspections were performed, resulting in
    20 citations of the registration regulations. These two sets of
    inspection results indicate a compliance rate of 97 percent. We expect
    that the compliance rate for 1999 will remain consistent with the
    previous years.
                            safe food transportation
        Question. What types of cooperative efforts are now underway with
    USDA and the Food and Drug Administration? Don't you conduct those
    activities using existing staff?
        Answer. With existing staff, RSPA conducts limited monitoring of
    United States Department of Agriculture (USDA) and the Food and Drug
    Administration (FDA) activities. Existing staff are expert at hazardous
    materials transportation safety, which is significantly different from
    sanitary food transportation. Thus, RSPA's current staff does not have
    the capability to carry out Sanitary Food Transportation Act (SFTA)
    mandates. RSPA also does not have staff that can be diverted to
    undertake food safety responsibilities.
        Question. What new activities will be undertaken with the $300,000
    in program dollars requested for implementation of the Sanitary Food
    Transportation Act?
        Answer. RSPA proposes to cooperate with USDA, FDA and the
    Environmental Protection Agency to address food safety transportation
    issues. Activities would include determining the adequacy of packagings
    in minimizing or eliminating risks of transporting food products in
    vehicles used for nonfood products, issuing regulations with respect to
    the transportation of food in motor vehicles or by railroad. We will
    also provide cross-training to Federal (DOT, FDA, and USDA) and state
    inspectors to recognize and report suspected food contamination
    incidents.
        Question. Why is it critical at this time to increase the number of
    staff working on this challenge? What was the origin of the funding and
    staff request in this area?
        Answer. The Administration's efforts to transfer principal
    responsibilities for the safe transportation of food to the FDA and
    USDA have been unsuccessful, and RSPA remains responsible for
    implementing SFTA, as it has since 1990. RSPA believes it has unique
    expertise and an appropriate role in food transportation in cooperation
    with FDA and USDA. Regardless of whether primary responsibility for
    SFTA is transferred, RSPA will continue to be responsible for
    significant elements of the Act.
                            research and development
        Question. The regulation compliance activity has been doubled from
    the enacted level of $236,000 to $470,000. Why is such a large increase
    necessary for this activity? What would be the consequences of freezing
    the funding for this activity at the enacted level?
        Answer. The funding is for our testing program to determine
    compliance with packaging performance standards. RSPA has an
    interagency agreement with the Department of Defense's package testing
    facility in Tobyhanna, Pennsylvania, and has been purchasing and
    testing packagings for the past three years. This program has been very
    successful in determining non-compliance, and in capturing the
    attention of the new and reconditioned drum industries, and has led to
    a number of outreach presentations and meetings with industry and trade
    association representatives.
        The additional funding was requested because Tobyhanna has modified
    its facility to allow us to purchase and test intermediate bulk
    containers (IBCs), another area where we have found non-compliance.
    These packages are much larger than those currently being tested and
    thus cost much more both to purchase and test. We also want to expand
    our testing beyond only those packages that we believe are incapable of
    meeting the marked requirements; we want to broaden the test program to
    include random purchase and testing of a full range of UN-certified
    packages. Without the additional funding, we would be limited in our
    ability to purchase IBCs and unable to expand the testing program.
                       office of research and technology
                    research and technology strategic goals
        Question. Please update the answer provided last year on pages 740-
    741 of Senate Hearing 105-851, regarding the role of the RSPA Research
    and Technology Office in coordinating transportation research and
    development across the federal government. What, if anything, is new in
    the Department's process of proposing, approving, planning and
    deploying research programs and projects, and disseminating the
    resulting knowledge to interested parties in the public and private
    sector? How did TEA-21 influence those mechanisms?
        Answer. The strategic planning process described in last year's
    answers remains essentially unchanged. Steps have been taken, however,
    to strengthen the linkage among the National Science and Technology
    Council (NSTC) strategic planning process (e.g., Transportation Science
    and Technology Strategy, Transportation Technology Plan and
    Transportation Strategic Research Plan), the DOT Strategic Plan, DOT
    fiscal year 1999 and fiscal year 2000 Performance Plans, and the annual
    performance agreements between the heads of the operating
    administrations and secretarial officers and the Secretary. TEA-21 did
    not influence these mechanisms but has helped to institutionalize and
    strengthen the strategic planning process for R&D across the department
    ensuring that it better supports the Department's five strategic goals
    and the mission-related goals of the operating administrations.
    Specifically, it will strengthen the analytic base of the DOT
    Transportation R&D Plan and the coupling of that Plan to the overall
    DOT Strategic Planning Process. It will also expand the current
    National Research Council (NRC)/Transportation Research Board Committee
    on the Federal Transportation R&D Strategic Planning Process to look at
    specifically how DOT Strategic and Performance Plans and Program
    Performance Plans in the context of DOT surface transportation research
    and technology development.
        Question. You have stated that RSPA needs to do cross-cutting and
    intermodal research. Please give specific examples of key needs in
    cross-cutting or intermodal research that you plan to fund in fiscal
    year 2000.
        Answer. RSPA's budget request for fiscal year 2000 includes funding
    to perform cross-cutting research, education and technology transfer
    programs in TEA-21 assigned by the Secretary (i.e., University
    Transportation Center Program).
        Question. Did RSPA or OST obtain any funding in either fiscal year
    1998 or 1999 from FHWA's surface transportation research account for
    research planning or completion of strategic documents prepared by RSPA
    or OST? If so, please specify the amount in each year. Besides the UTC
    personnel costs, and the Advanced Vehicle Technologies Program costs,
    does RSPA plan to obtain any funds from DOD?
        Answer. RSPA received $174,000 in fiscal year 1998 from the FHWA
    surface transportation research account to develop two research plans
    dealing with human performance and behavior. The plans--Fatigue
    Management for Transportation Operators and Advanced Instructional
    Technology--are being finalized. RSPA and OST did not receive any other
    funding in fiscal year 1998 for completing the strategic documents they
    prepared concerning research and development.
        RSPA is expecting to receive $9,000,000 in fiscal year 1999 for the
    Advanced Vehicle Technology Program from DOD, RSPA does not anticipate
    receiving any additional funding from DOD.
                     personnel and administrative expenses
        Question. Your budget request proposes funding three full-time
    positions through the highway trust fund to support the University
    Transportation Centers (UTC) program. There have traditionally been two
    FTEs associated with this program, funded from general funds under
    RSPA's R&T budget. The additional position is being proposed to support
    the expansion of the UTC program as outlined in TEA-21. The PC&B
    savings associated with this proposal are $129,000. Is this correct?
    What is the level of reimbursable funding from Federal Highway
    Administration highway trust funds to support the three total UTC
    positions?
        Answer. The amount of $129,000 is the difference between enacted
    PC&B level for fiscal year 1999 and the fiscal year 2000 request. This
    is a net difference includes increases for pay raises and merit
    increases for the staff positions that will continue to be funded from
    appropriated budget authority.
        The cost of funding the two current positions associated with the
    UTC program is $198,000. The amount of reimbursable funding from
    Federal Highway Administration highway trust funds that will be
    necessary to support the three total UTC positions is $297,000.
        Question. Please provide an explanation of how the $105,000
    requested for administrative expenses is used.
        Answer. The $105,000 requested for administrative expenses will be
    used as shown below:

                                                            Fiscal year 2000
            Administrative Expenses                                (Planned)
    Training......................................................   $10,000
    Printing......................................................    49,000
    Supplies & Materials..........................................    15,000
    Equipment.....................................................    14,000
    Travel........................................................    17,000
                        --------------------------------------------------------------
                        ____________________________________________________

          Total...................................................   105,000
                          r&d planning and management
        Question. Please break out the amount requested for each of the
    research planning and management activities for fiscal year 2000 that
    will be funded with the $2,235,000 requested on pages 104 through 109
    of the budget justification.
        Answer. RSPA plans to fund the following R&D research planning and
    management activities in fiscal year 2000:

    Strategic Planning and Systems Assessment:
        Peer/Merit Review.........................................  $200,000
        NSTC Transportation Technology Plan.......................   100,000
        Private-public Partnership Outreach.......................    50,000
        NSTC Strategic Research Plan..............................   100,000
        DOT R&D Plan..............................................   150,000
        International S&T Assessments.............................   100,000
        Sustainability............................................   100,000
                        --------------------------------------------------------------
                        ____________________________________________________

          Total...................................................   800,000
                        ==============================================================
                        ____________________________________________________
    DOT Research and Technology Coordination and Facilitation:
        Public-private Partnerships...............................   300,000
        Enabling Research Outreach................................   100,000
        Research and Technology Coordinating Council..............    50,000
        Innovation Partnerships...................................    50,000
        National Research Council Government University-Industry
          Research Roundtable.....................................   125,000
        TRB Annual Fee............................................    50,000
        International (e.g., NAFTA,U.S.-E.U.).....................   150,000
        DOT R&D Tracking System...................................   200,000
        DOT Technology Sharing/Transfer Program...................   100,000
        Homepages.................................................   210,000
                        --------------------------------------------------------------
                        ____________________________________________________

          Total................................................... 1,335,000
    Intermodal and multimodal Research and Education: Small
        Business Innovative Research..............................   100,000
                        --------------------------------------------------------------
                        ____________________________________________________

          Total...................................................   100,000

        Question. Please provide a project break out of how research
    planning and management funds which were appropriated in fiscal years
    1998 and 1999 have been or will be spent. Please indicate whether
    projects are ongoing (into 2000), or have been completed.
        Answer. RSPA has funded or plans to fund R&D research planning and
    management activities in fiscal year 1998 and 1999 (NOTE: (o) indicates
    project is ongoing; (c) indicates project is completed):

    ------------------------------------------------------------------------
                                                            Fiscal year
                                                     -----------------------
                                                         1998        1999
    ------------------------------------------------------------------------
    Strategic Planning and Systems Assessment:
        NSTC Science and Technology Strategy (c)....    $100,000     $50,000
        Peer/Merit Review (o).......................     152,000     150,000
        NSTC Transportation Technology Plan (o).....      50,000     100,000
        Private-public Partnership Outreach (o).....      86,000     100,000
        NSTC Strategic Research Plan (o)............      50,000     100,000
        DOT R&D Plan (o)............................     150,000     150,000
        International S&T Assessments (o)...........     100,000     100,000
        Sustainability (o)..........................      75,000     100,000
    DOT Research and Technology Coordination and
     Facilitation:
        Public-private Partnerships (o).............     300,000     300,000
        Enabling Research (o).......................     125,000     100,000
        Research and Technology Coordinating Council      50,000      50,000
         (o)........................................
        Innovation Partnerships.....................      50,000      50,000
        Government-University Industry Research          125,000     125,000
         Roundtable (o).............................
        TRB Annual Fee (o)..........................      50,000      50,000
        International (e.g., NAFTA, U.S.-E.U.)(o)...     100,000     150,000
        DOT R&D Tracking System (o).................     100,000     100,000
        Research and U.S. Database..................      70,000  ..........
        DOT Technology Sharing/Transfer Program (o).      75,000     100,000
        Homepages (o)...............................  ..........     210,000
    Intermodal and multimodal Research and
     Education:
        Small Business Innovative Research (o)......      42,000     150,000
        R&D Surveys.................................     200,000  ..........
    ------------------------------------------------------------------------

        Question. Has the Office of Research and Technology concluded its
    work on the DOT Transportation R&D Plan, as required by both ISTEA and
    TEA-21? Are any fiscal year 2000 funds requested to support the
    printing and distribution of this plan, or will it be released in
    fiscal year 1999?
        Answer. The first edition of the DOT Transportation R&D Plan is in
    the final stages of development and will be released in fiscal year
    1999. A second edition will be developed, updated to include more
    detailed information as required by TEA-21 and released in February
    2000 as part of the President's fiscal year 2001 Budget submission to
    the Congress.
                university transportation centers grants program
        Question. Please display the University Transportation Centers
    (UTC) budget for fiscal years 1998, 1999, and 2000. Include funding
    sources, amounts released in grants (by TEA-21 institution groupings),
    and administrative and evaluation costs.
        Answer.

    ----------------------------------------------------------------------------------------------------------------
                                                                                        Fiscal year
                             Funding sources                         -----------------------------------------------
                                                                           1998            1999          2000 \1\
    ----------------------------------------------------------------------------------------------------------------
    FTA R&D Approps.................................................       $5,980,00  \2\ $5,940,000      $1,000,000
    Transit Acct. of the Hwy. Trust Fund............................  ..............  ..............       4,400,000
    Highway Trust Fund..............................................      22,800,000      22,640,000  \3\ 24,197,100
                                                                     -----------------------------------------------
          Total Program Funding.....................................      28,780,000      28,580,000      29,597,100
    ----------------------------------------------------------------------------------------------------------------
    \1\ Estimate.
    \2\ FTA did not indicate how much came from which source.
    \3\ Assumes FHWA will withhold $55,400.

    ----------------------------------------------------------------------------------------------------------------
                                                                                        Fiscal year
                                Costs \1\                            -----------------------------------------------
                                                                           1998            1999          2000 \2\
    ----------------------------------------------------------------------------------------------------------------
    Group A.........................................................      $9,147,200      $8,744,360      $8,598,230
    Group B.........................................................       2,195,200       2,097,600       3,436,000
    Group C.........................................................       6,174,000       6,469,100       6,449,750
    Group D.........................................................      10,975,800      10,992,000      10,872,000
    Admin. and Evaluation...........................................         287,800         276,940         241,120
                                                                     -----------------------------------------------
          Total.....................................................      28,780,000      28,580,000      29,597,100
    ----------------------------------------------------------------------------------------------------------------
    \1\ This table indicates the fiscal year of the funding awarded and not the year in which the grants were made.
    \2\ Estimate.

        Question. Please list all of the universities now receiving funds
    authorized in TEA-21 and the amounts provided to each university in
    fiscal years 1998, 1999, and anticipated for fiscal year 2000.
        Answer.

    ----------------------------------------------------------------------------------------------------------------
                                                                                  Fiscal year
                                                          ----------------------------------------------------------
                      UTC Name Location                     1998-1998     1998       1999       2000         2000
                                                           Authorized   Awarded    Awarded   Authorized  Awarded \1\
    ----------------------------------------------------------------------------------------------------------------
    Alabama, U. of.......................................    $750,000   $686,000   $655,500    $750,000    $644,250
    Arkansas, U. of......................................     750,000    686,000    655,500     750,000     644,250
    Assumption College...................................     300,000    274,400    262,200     500,000     429,500
    Central Florida, U...................................     300,000    274,400    262,200     500,000     429,500
    Denver, U. of........................................     300,000    274,400    262,200     500,000     429,500
    George Mason U.......................................   2,000,000  1,829,300  1,748,000   2,000,000   1,718,000
    Idaho, U. of.........................................     750,000    686,000    655,500     750,000     644,250
    Marshall U...........................................   2,000,000  1,829,300  1,748,000   2,000,000   1,718,000
    Minnesota, U. of.....................................   2,000,000  1,829,300  2,000,000   2,000,000   2,000,000
    Missouri-Rolla, U....................................     300,000    274,400    262,200     500,000     429,500
    Montana State U......................................   2,000,000  1,829,300  1,748,000   2,000,000   1,718,000
    Morgan State U.......................................     750,000    686,000    940,300     750,000     970,000
                                                             +250,000                          +250,000
    NC State U...........................................     750,000    686,000    940,300     750,000     970,000
                                                             +250,000                          +250,000
    NCA&T................................................     750,000    686,000    655,500     750,000     644,250
    NJIT.................................................     750,000    686,000    655,500     750,000     644,250
    Northwest U..........................................   2,000,000  1,829,300  2,000,000   2,000,000   2,000,000
    Purdue...............................................     300,000    274,400    262,200     500,000     429,500
    Rhode Island.........................................   2,000,000  1,829,300  1,748,000   2,000,000   1,718,000
    Rutgers U............................................     300,000    274,400    262,200     500,000     429,500
    San Jose State U.....................................     750,000    686,000    655,500     750,000     644,250
    So. Carolina State...................................     300,000    274,400    262,200     500,000     429,500
    South Florida, U. of.................................     750,000    686,000    655,500     750,000     644,250
    Southern Calif., U...................................     300,000    274,400    262,200     500,000     429,500
    ----------------------------------------------------------------------------------------------------------------

             REGIONAL CENTERS--RECIPIENTS OF FUNDING FOR FISCAL YEAR 1999-2003 TO BE SELECTED COMPETITIVELY
    ----------------------------------------------------------------------------------------------------------------
                                                                               Fiscal year
                                                    ----------------------------------------------------------------
                   UTC Name Location                  1998-1998       1998         1999         2000         2000
                                                      Authorized    Awarded      Awarded     Authorized  Awarded \1\
    ----------------------------------------------------------------------------------------------------------------
    Region 1.......................................    1,000,000  \2\ 1,000,0  \2\ 890,000    1,000,000      859,823
                                                                           00
    Region 2.......................................    1,000,000  \2\ 1,000,0  \2\ 890,000    1,000,000      859,823
                                                                           00
    Region 3.......................................    1,000,000  \2\ 1,000,0  \2\ 890,000    1,000,000      859,823
                                                                           00
    Region 4.......................................    1,000,000  \2\ 1,000,0  \2\ 890,000    1,000,000      859,823
                                                                           00
    Region 5.......................................    1,000,000  \2\ 1,000,0  \2\ 890,000    1,000,000      859,823
                                                                           00
    Region 6.......................................    1,000,000  \2\ 1,000,0  \2\ 890,000    1,000,000      859,823
                                                                           00
    Region 7.......................................    1,000,000  \2\ 1,000,0  \2\ 890,000    1,000,000      859,823
                                                                           00
    Region 8.......................................    1,000,000  \2\ 1,000,0  \2\ 890,000    1,000,000      859,823
                                                                           00
    Region 9.......................................    1,000,000  \2\ 1,000,0  \2\ 890,000    1,000,000      859,823
                                                                           00
    Region 10......................................    1,000,000  \2\ 1,000,0  \2\ 890,000    1,000,000      859,823
                                                                           00
    ----------------------------------------------------------------------------------------------------------------
    \1\ Estmate.
    \2\ Award amount included unobligated fiscal year 1997 UTC Program Funds.

        Question. For each university which has received grants from the
    UTC program in fiscal years 1998 or 1999, please specify what research
    programs are supported, and describe what the Department is doing to
    integrate the research activities conducted by each center or
    university with the Department's own research.
        Answer. To date, UTC grants awarded under TEA-21 have involved
    funding from fiscal year 98 and prior years' carryovers. Because UTC
    grants have historically been awarded at the end of the fiscal year, no
    fiscal year 1999 funding has yet been awarded.
        All UTCs are empowered to select their research projects, but they
    must do so through a process that includes peers and other experts in
    the field, including at least one individual from the U.S. Department
    of Transportation (DOT). In addition to considering each proposal's
    technical completeness and feasibility, a UTC's selection process must
    include multiple additional rating factors, not least of which is the
    project's relevance to the UTC's chosen theme and to the Department of
    Transportation's strategic goals. Participation by DOT staff ensures a
    two-way conduit for information about on-going research between DOT and
    the university.
        All UTCs are now required to post on their web sites a brief
    project description for each of their research projects. These are all
    to be provided in HTML format and are to use standard TRB keywords. All
    final reports of research conducted with UTC funding, after required
    peer review, must be published on the UTC's web site in the same
    manner. This innovation in the program will greatly facilitate access
    by DOT researchers and planners to new and ongoing research. The
    Internet makes possible direct interaction between academic researchers
    and outside experts.
        Of the 33 UTCs authorized in TEA-21, the ten in Group A are about
    to be selected through a process of full and open competition. For that
    reason, the thrust of their research programs is not known at this
    time. The remaining 23 UTCs that were designated in TEA-21 have all
    selected their respective center themes. Of those 23, 13 are still
    developing their multiyear strategic plans and have not yet begun to
    conduct a research program. Ten UTCs are currently operating under an
    approved strategic plan. Their research programs address the following
    themes:

    Montana State University............................  Rural Travel & Transportation.
    Morgan State University.............................  Transportation: A Key to Human and Economic Development.
    New Jersey Institute of Technology..................  Productivity Improvements through Transportation.
    Purdue University...................................  Safe, Quiet and Durable Highways.
    University of Alabama...............................  Management and Safety of Transportation Systems.
    University of Arkansas..............................  Improving the Quality of Rural Life through
                                                           Transportation.
    University of Central Florida.......................  Application of Simulation Technology to Transportation
                                                           Design, Operations, & Safety.
    University of Idaho.................................  Advanced Transportation Technology.
    University of Missouri-Rolla........................  Advanced Materials & Non-destructive Testing Technologies.
    University of Southern California...................  Solutions to Transp. Issues in Major Metropolitan Areas.

        The themes of the ten regional UTCs that are in the last year of
    their current grants and must compete to retain the designation are
    shown below:

    University of California............................  Improving Accessibility for All.
    City University of New York.........................  Regional Mobility and Accessibility: Investment
                                                           Strategies.
    University of Michigan..............................  Commercial Transportation.
    MIT.................................................  Strategic Management of Transportation Systems.
    University of Nebraska-Lincoln......................  Improved Design & Operation of Transp. Facilities and
                                                           Services in Mid-America.
    North Dakota State University.......................  Rural & Non-metropolitan Transportation.
    Penn State..........................................  Advanced Technologies in Transportation and Management.
    University of Tennessee.............................  Transportation Safety.
    Texas A&M...........................................  Sustainable Transportation for Mobility & Development.
    University of Washington............................  Management & Planning in Intermodal Operations.

        Question. What are the ten regional centers in each of the ten
    United States Government regions? How were these regional centers
    selected? Is this selection a fixed, permanent status? If not, what is
    the selection term expectancy?
        Answer. The current ten regional centers are listed alphabetically
    below:

    ------------------------------------------------------------------------
                   Region                           Regional center
    ------------------------------------------------------------------------
    9...................................  California, University of.
    2...................................  CUNY.
    5...................................  Michigan, University of.
    1...................................  MIT.
    7...................................  Neb.-Lincoln, University of.
    8...................................  North Dakota State.
    3...................................  Penn State.
    4...................................  Tennessee, University of.
    6...................................  Texas A&M.
    10..................................  Washington, University of.
    ------------------------------------------------------------------------

        The first regional centers were selected through a process of full
    and open competition in 1987. The winners of that competition received
    four-year grants which were renewed non-competitively for an additional
    three years. The current regional centers were also selected through a
    process of full and open competition which took place in 1994. Grants
    were awarded for the three years remaining in the authorization of the
    program. When it became clear that the program would not be
    reauthorized until a point in the academic calendar when few but the
    incumbents would respond to the call for proposals, DOT opted to extend
    the incumbent centers' grants non-competitively for one year.
        DOT is currently in the midst of the recompetition of the regional
    center grants for the five years of program funding remaining in the
    program.
        Question. How much is spent on conducting the annual on-site
    evaluations? What is the source of these funds? What are the benefits
    of these assessments, and how does RSPA ensure that universities
    respond to the comments?
        Answer. RSPA does not yet have actual data on the costs of visiting
    the 33 centers created under TEA-21, but can extrapolate costs based on
    average costs incurred in conducting such evaluations under the
    Intermodal Surface Transportation Efficiency Act of 1991. The travel
    costs for two RSPA staffers to visit each of the 19 ISTEA grantees once
    a year was approximately $12,000. TEA-21 expanded the number of
    grantees by 74 percent, from 19 to 33. It also added many sites which
    cannot be visited in one day, a factor which increases total travel
    costs. At the present time, RSPA estimates that the annual travel costs
    for site visits to all 33 centers will be approximately $28,000.
        The direct costs of the site inspections are administrative
    expenses, some of which are charged against RSPA's administrative
    account for travel. The University Transportation Centers Program
    authorizes the use of 1 percent of funds available for grants to be
    used for coordinating research and conducting annual reviews and
    evaluations. The program's two funding sponsors, the Federal Highway
    Administration and the Federal Transit Administration, routinely retain
    a portion of that amount to defray the costs they incur in connection
    with the program. RSPA uses the balance to comply with the mandate to
    establish a clearinghouse for the program and to defray the travel
    costs of the annual site visits.
        There are many reasons to conduct on-site evaluations of the
    centers. Written reports of progress are necessarily limited in their
    ability to convey the true status of a center. They cannot convey what
    is immediately apparent from an on-site inspection, e.g., whether the
    atmosphere of a center is one of positive and productive collegiality
    or fiercely disputative parochialism. A written report can document the
    number of students participating in research programs, but a site visit
    can confirm not merely that there are such students, but also their
    enthusiasm, diversity, and extent of involvement in education and
    research programs of the center. A site visit can disclose what might
    not have been included in a progress report, both positive and negative
    findings. For example, one center failed to report its outreach
    activities to pre-college students because they were unsure of whether
    this was an allowable activity under their grant. The site visit not
    only disclosed this activity, but also enabled DOT to highlight it so
    that similar undertakings could benefit from the lessons already
    learned in running such activities. Annual face-to-face meetings can
    improve communications between DOT administrators and the entire center
    staff. DOT administrators can give each center's staff guidance focused
    on those areas where the center needs to improve (e.g. tracking of
    costs and matching funds). One of the most important benefits of on-
    site evaluations is the cross-fertilization of ideas that occurs when
    DOT staff connect what they've learned at one center with what they
    observe at another.
        RSPA can ensure that the universities respond to comments or
    directions because RSPA retains control of the flow of funding. Unlike
    many grant programs, the UTC grants provide funding to the universities
    only as reimbursement for costs already incurred. If a center failed to
    take action or provide information as directed, RSPA could suspend
    payment of the university's claims.
                        fiscal year 1997 omnibus funding
        Question. RSPA received $2,500,000 in the fiscal year 1997 Omnibus
    to conduct a transportation system vulnerability assessment. Please
    summarize the findings of this assessment.
        Answer. The Surface Transportation Vulnerability Assessment has
    been completed and is in the process of receiving a classification
    review by the Department and the National Security Council. Since the
    document may be classified, the key findings of the Assessment will be
    transmitted under separate correspondence once its final classification
    is determined. A September 1998 letter report from the National Academy
    of Sciences advisory committee on surface transportation security,
    which reviewed the Assessment, states that: ``Even at this early stage
    of the study, it is clear that, as noted in the DOT vulnerability
    assessment, the security of the U.S. surface transportation system is a
    serious problem that deserves careful attention. The system has had
    many years of experience responding to natural disasters and accidents,
    and it has proven to be quite robust, but it has little experience with
    hostile attack. The committee believes that the wide variety of
    opportunities for attack on surface transportation is staggering, that
    the threat of attacks is incontestable, and that research and
    development opportunities that could address that threat must be
    examined.''
        Question. An amount of $500,000 was provided for a contract with
    the National Academy of Sciences for an advisory committee on surface
    transportation security. What are the accomplishments of this advisory
    committee? Please detail the committee's actions, schedule, and any
    initial findings or recommendations thus far.
        Answer. The National Academy of Sciences advisory committee on
    surface transportation security has completed its review of the surface
    transportation vulnerability assessment and ongoing and proposed
    Federal security R&D. The Committee is led by the National Research
    Council's Commission on Engineering and Technical Systems (CETS) (i.e.,
    National Materials Advisory Board) with participation from the
    Commission on Physical Sciences, Mathematics and Application (e.g.,
    Computer Science and Telecommunications Board) and the Transportation
    Research Board (TRB). The committee has provided two letter reports
    summarizing its review and providing its preliminary observations. The
    committee's final report is in the process of being cleared by the
    National Research Council before its release in May.
                     advanced vehicle technologies program
        Question. RSPA will oversee the management of the AVTP program. Why
    is such a large increase in funding needed--from $14,000,000 in
    combined DOT and DOD funds in fiscal year 1999 to $20,000,000 in DOT
    funds requested for 2000? What is the empirical basis for that request?
        Answer. TEA-21 authorized the Advanced Vehicle Technologies Program
    (a.k.a. AVP) at $50 million annually. Based on previous funding history
    for the DARPA Electric and Hybrid Vehicle Program, the Administration
    requested $20 million for AVP in the DOT fiscal year 1999 budget
    request. Congress appropriated $5 million for DOT.
        In fiscal year 1999, the program management is undergoing a
    seamless transition from the Department of Defense (DOD) to DOT. DARPA
    will contribute $9 million and DOT will contribute $5 million for the
    joint awards, with a portion of the DOD funding covering administrative
    costs.
        The DOT request for $20 million in fiscal year 2000 reflects the
    intention to fully transfer the program from DARPA to civilian agency
    management. This request was based on previous funding history and on
    demonstrated need.
        The need for federal funding in this area is reflected in the value
    of the proposed projects that went unfunded, and the likelihood that
    additional worthy projects were not even proposed due to the funding
    limitations. In response to the fiscal year 1999 Advanced Vehicle
    Program call for proposals from the seven regional consortia, DOT and
    DOD received approximately 280 project white papers requesting about
    $140 million in Federal funding. The $140 million was matched by an
    equal amount in public and private sector share.
        After a formal review and evaluation process by the Government, the
    seven consortiums were asked to develop full proposals for 100 of the
    proposed projects. These 100 proposals requested over $40 million in
    Federal funding with more than $40 million public and private sector
    match. After a formal review and evaluation process, the final projects
    are being selected to fit within the constraints of available Federal
    fiscal year 1999 funds of $14 million.
        Question. The Federal Highway Administration budget includes
    $20,000,000 in contract authority from the highway trust fund for the
    Advanced Vehicle Technologies Program. This particular $20,000,000 in
    contract funds is authorized in TEA-21 for the Magnetic Levitation
    Technology Deployment program, but in the budget request, DOT proposes
    that, notwithstanding any other provision of law, these funds be made
    available for the Advanced Vehicle Technologies Program (AVTP). Is this
    the only instance in the President's budget request, other than the
    treatment of Revenue Aligned Budget Authority funds, where a
    ``firewalled'' program's funds have been eliminated in order to fund a
    project that is authorized for general funds only?
        Answer. Yes, AVTP is the only instance in the President's budget
    request, other than the treatment of Revenue Aligned Budget Authority
    funds, where a ``firewalled'' program's funds have been eliminated in
    order to fund a project that is authorized for general funds only.
        Question. Did the Department of Energy contribute any funds to this
    partnership in fiscal year 1999?
        Answer. The Department of Energy did not contribute any funds to
    the Advanced Vehicle Technologies Program in fiscal year 1999. DOE
    staff provided technical input into the review and evaluation of the
    full proposals submitted.
        Question. Is any Department of Defense or Department of Energy
    funding requested for the AVTP program in the President's fiscal year
    2000 budget request? If so, how much is requested in each budget, and
    from what agencies and accounts?
        Answer. The Department of Defense has planned to transfer the AVTP
    program to civilian agency management in fiscal year 2000. As a result,
    the Department of Defense has not requested funds for this program in
    fiscal year 2000.
        The Department of Energy has not requested funds for the AVTP.
        Question. How much of the fiscal year 1999 and the fiscal year 2000
    monies for that program will be allocated to RSPA or to any other DOT
    budget, and how much will be contracted to the partners?
        Answer. For fiscal year 1999, none of the funds will be allocated
    to RSPA or any other DOT offices; all DOT funds will be awarded to the
    partners. DARPA is funding the technical and management support
    activities in fiscal year 1999. In fiscal year 2000, DOT will need to
    fund this activity, estimated at about $650,000.
        Question. Please detail the agreements now in hand for industry
    matching funds for this program.
        Answer. The ``other transactions'' agreements between DOT and the
    consortia are nearing completion. The agreements contain the
    requirement that a minimum 50 percent cost sharing on the consortium
    project will be provided by non-federal sources.
        Question. What were the broad performance guidelines that
    influenced the initial concept papers for the solicitation? Which
    consortia received the initial awards?
        Answer. The solicitation for the concept papers focused on
    technologies and projects that would help serve the following goals and
    performance objectives: (1) improving vehicle fuel efficiency (2)
    reducing vehicle emissions (3) fostering economic competitiveness in
    advanced transportation vehicle technologies and (4) enhancing public
    acceptance of advanced vehicles and infrastructure. Based on these
    objectives, the proposals were evaluated in terms of the technical
    merit of the concept and the application potential. The final
    recommendations for project selections have been identified by a
    Project Evaluation Team made up of representatives from the Department
    of Defense, Transportation and Energy. These recommendations have been
    transmitted to DOT and Defense Advanced Research Projects Agency for
    approval. Each of the seven consortia have several project awards that
    meet the performance criteria.
        Question. Which types of technologies will be emphasized?
        Answer. The emphasis is on electric and hybrid-electric vehicle
    technologies and associated infrastructure development for medium and
    heavy duty vehicles. This encompasses vehicle component technologies
    such as batteries, fuel cells, ultra-capacitors, flywheels and
    containment, electric drive trains, auxiliary power units, high
    efficiency motors, high power electronics, vehicle controllers,
    lightweight chassis developments, rapid chargers and infrastructure
    technologies such as rapid battery charging facilities and alternative
    fuel supply systems.
        Question. Please summarize the scope and nature of the research
    proposals (white papers) that you received from each of the consortia.
        Answer. The following are selected examples that represent the
    general scope and cross section of research proposal topics received
    from the consortia. They do not necessarily represent projects that
    will be funded.
        Northeast Alternative Vehicle Consortia (NAVC).--Composite Hybrid
    Bus; Solectria motors and controllers; hybrid propulsion systems;
    hybrid ultra capacitor battery storage and inverters with PML
    capacitors; Mid Atlantic Regional Consortium for Advanced Vehicles
    (MARCAV): Extending range of hybrid electric vehicles; analytical
    techniques to simulate battery processes; high performance hybrids;
    brushless motor and alternator systems;
        The Southern Coalition for Advanced Transportation (SCAT).--
    Flywheel systems and safety; electric bus systems; hybrid truck
    chassis; capacititive charging systems; Nickel-Cadmium batteries and
    Powered trailer systems;
        ELECTRICORE.--Hybrid conversion systems; EV/HEV's for national park
    systems; Modeling and simulation; electric variable transmission and
    battery test methods;
        CALSTART.--High efficiency turbo generation; hybrid electric truck;
    rapid recharging fly wheel systems; airport vehicle systems; micro
    turbines; magnetic bearings and fuel cells;
        Sacramento Electric Transportation Consortium (SETC).--fuel cells
    exchange membrane; electric bus platforms; battery dominant hybrids;
    battery test laboratory; fast charging systems and Plastic Lithium-Ion
    batteries;
        Hawaii Electric Vehicle Demonstration Project (HEVDP).--electric
    and hybrid vehicle national data center; rapid charging electric
    infrastructure systems; EV ready state projects and battery management
    systems.
        Question. How does this program form an integrated or coordinated
    approach to research in this diverse area? Would it be worthwhile to
    prepare a strategic plan or outline of a five year research program for
    the joint partnership to ensure that an integrated and coordinated
    program is actually implemented?
        Answer. AVTP is coordinating its activities with other agencies
    including DOD and DOE performing R&D on medium and heavy-duty vehicles
    to minimize duplication.
        The National Science and Technology Council Transportation R&D
    Subcommittee, which is chaired by the Deputy Secretary of
    Transportation, is in the process of developing a strategic plan for
    all Federal medium and heavy-duty vehicle R&D programs. This will
    include AVTP. AVTP will also be incorporated as part of the DOT
    strategic planning process and DOT Transportation R&D Plan.
        The NSTC Subcommittee on Transportation R&D has requested a review
    by the National Research Council (NRC) of Federal medium and heavy-duty
    vehicle technologies with the objective of ensuring coordination of
    programs across the federal agencies and with public and private sector
    entities and of establishing an appropriate merit review process for
    the programs.
                       emergency transportation response
                               personnel increase
        Question. Please describe in detail the job description,
    responsibilities and GS ratings of the two new positions for this
    office contained in the budget request.
        Answer. The two positions requested are for Emergency
    Transportation Specialists (GS-2101) at the GS-13/14 level. In 1998,
    OET received a number of critical new assignments centering around new
    Presidential Decision Directives (PDD), namely, PDD 62, 63 and 67.
    These PDDs place an extraordinary responsibility on a small office with
    department-wide responsibilities. To meet these responsibilities and
    workload, two additional staff positions are critically needed.
        The incumbent of one position would provide high-level program
    management for the Department-wide Continuity of Operations (COOP) and
    Continuity of Government (COG), Weapons of Mass Destruction (WMD) and
    Critical Infrastructure Protection (CIP) programs.
        Duties would be split between managing and directing operational
    activities and plans at HQ, along with the other DOT Operating
    Administrations, as well as at the DOT COOP alternate facility at the
    FEMA Mt. Weather Emergency Assistance Center (MWEAC). This position
    will maintain the DOT functional capability at MWEAC, conduct training,
    design exercises, maintain communications with the Operating
    Administrations and other Federal agencies and test and maintain
    equipment at that facility. Lastly, they will maintain call down lists,
    manage contractor support, maintain a close liaison with FEMA, and
    serve as staff link between DOT HQ and the COOP/COG sites.
        The incumbent in the second position would serve as the
    technological/natural hazards project manager. The incumbent's duties
    concern operational crisis management issues, and the performance of
    research and analysis on special projects. In addition, the incumbent
    would prepare transportation plans for a major earthquake affecting the
    7 States of the Central United States Earthquake Consortium (CUSEC),
    maintain emergency plans, and work directly with State DOT's and
    emergency services agencies in the multi-State area in the central U.S.
    as well as the four FEMA and DOT regions in the area. This
    unprecedented tasking came to DOT from FEMA. Additionally, the
    incumbent will provide guidance to the Regional Emergency
    Transportation Representatives (RETREPs) in earthquake planning
    efforts.
        Lastly, the incumbent will work on Project Impact disaster
    mitigation activities which include contact with State officials,
    collection and analysis of information from a variety of sources,
    attendance at related FEMA regional meetings, collaboration with States
    and local governments and the identification of DOT related mitigation
    projects. DOT serves as a centralized information exchange for the
    other DOT operating administrations on Project Impact.
        Question. How much of the $197,000 PC&B increase is associated with
    \1/2\ year funding for these two new positions, and how much is
    associated with merit increases and colas?
        Answer. The Office of Emergency Transportation requires $104,000 to
    fill 2 half-year new positions at the 13/14 level to handle the new
    responsibilities resulting from Presidential Decision Directives 62, 63
    and 67. The remainder of the total $197 thousand increase is necessary
    for time-in-service and annual pay raises, as well as for merit
    increases, promotions and overtime.
                            crisis management center
        Question. How much of your budget request supports the maintenance
    of the Crisis Management Center?
        Answer. In fiscal year 2000, $37,000 would be available for Crisis
    Management Center maintenance and repair (i.e., ensure computer systems
    and audio-visual equipment work properly at all times).
        Question. How many times in fiscal year 1998 was the Center
    activated and for which reasons? How many times thus far in fiscal year
    1999 has the Center been activated and for what reasons?
        Answer. During fiscal year 1998, RSPA's Office of Emergency
    Transportation, in coordination with the other DOT Operating
    Administrations, responded to 31 separate disaster incidents. During
    these disaster activations, the CMC was used to produce and disseminate
    224 reports and studies. These included: ice storms in the Northeast;
    the Midwest snow storm; Operation Desert Thunder efforts in the Persian
    Gulf; wildfires in FL, TX and Mexico; several typhoons; flooding in TX
    and TN; Hurricanes Mitch, Georges, Pauline, Bonnie and Danielle, and
    other seasonal storms. With its available technology and usefulness as
    a training environment, the CMC is essentially used on a daily basis.
        To date, in fiscal year 1999, we have activated the CMC
    approximately 9 times for tornadoes in AR, winter storms in the Pacific
    Northwest, blizzards in the Midwest and in the NE, severe cold weather
    in AK, DC snow storms, TX fall flooding, landslides in ID and winter
    storms in New York. In addition, the CMC is used daily by the Office of
    Emergency Transportation Staff in seeking information on ongoing
    disasters and in preparing reports.
        The CMC was also activated in association with the White House
    Information Coordination Center for a trial run of possible Y2K events
    with the turnover of the Julian Calendar on April 9. The CMC will also
    be used as the Y2K Emergency Response Center for DOT on other
    significant Y2K events throughout the year, and as a link to the FEMA
    Operations Center during late December 1999 and early January 2000.
                        emergency transportation budget
        Question. Please specify what research and development activities
    the Office of Emergency Transportation plans to accomplish with a
    budget of $235,000. Why is it judged critical to increase funding at
    this time?
        Answer. In fiscal year 2000, OET will continue ongoing research
    projects ($50,000)and will initiate R&D efforts to support our new
    COOP/WMD/CIP assignments under PDD 62, 63 and 67. We need contractor
    assistance to research reliable, realistic and cost-effective ways of
    meeting and updating our COOP/WMD/CIP plans ($110,000). Research
    assistance is necessary to complete the technical portions of a multi-
    State transportation plan for responding to what could be the most
    catastrophic event in history, involving air, surface, rail and
    waterway elements. Portions of the plan are heavily dependent upon
    technical data gathered from and in association with research
    institutions concerning the possible seismic effects on the
    transportation infrastructure. In addition, assistance is needed in
    developing topic related Annexes to the Federal Response Plan.
    ($75,000). The new PDD requirements placed on RSPA/OET are extensive,
    both in size and scope, and while they will be overseen and managed
    with the help of the two additional FTEs, portions of these directives
    are very extensive and too technically complex for in-house personnel
    to develop without contract support.
        The new requirement to develop a multi-state transportation plan
    requires the technical expertise of a contractor.
        The new work specified in the PDDs requires the completion of
    highly technical portions of the DOT COOP Plan, developing a counter
    terrorism strategy to address preparedness and consequence management
    matters related to WMD and cyber warfare. These are significant long-
    term, large scale programs, some with short deadlines requiring
    extensive research and interaction among DOT operating administrations,
    Federal and State governments, industry groups, and research
    institutions.
        Question. For the Crisis Response Management program, please
    provide a breakdown of how the fiscal year 1998 and fiscal year 1999
    funds were or will be used. Please include a description and rationale
    for the reprogramming of fiscal year 1998 funds.
        Answer:

    ------------------------------------------------------------------------
                                                   Fiscal year
       Appropriation/Obligation    -----------------------------------------
                                            1998                 1999
    ------------------------------------------------------------------------
    Contract Program: Crisis              \1\ $450,000/  ...................
     Response Mgmt................             $200,000
    R&D: Response Mgmt Support....    \2\ 50,000/61,000  ...................
    Grant: Supplemental-Arab, AL).       \3\ 1,000,000/  ...................
                                              .........
    Contract Program: Crisis        ...................        \4\ $382,000/
     Response Mgmt................                                  $632,000
    R&D: Response Mgmt Support....  ...................    \5\ 50,000/65,000
    Grant: Supplemental-Arab, AL..  ...................       \6\ 1,000,000/
                                                                     975,000
    ------------------------------------------------------------------------
    \1\ Unused funds carried over; includes $250,000 resulting from Supreme
      Court override of line-item veto.
    \2\ Used fiscal year 1996 and 1997 carryover funds.
    \3\ Unused funds carried over.
    \4\ Estimated obligations (include Y2K supplemental and fiscal year 1998
      carryover).
    \5\ Estimated obligations; used fiscal year 1998 carryover.
    \6\ Estimated obligations; unused funds carried over.

        The reprogramming effort in fiscal year 1998 came about because of
    a grant to the City of Arab, AL for the construction of a tornado
    emergency center and a mobile emergency vehicle to travel throughout
    the state responding to a disaster. The grant amount was $1 million and
    is retained as a separate item. Also in fiscal year 1998 we
    reprogrammed $250,000 from the Supreme Court override of the line-item
    veto for use in upgrading some of the hardware/software in the Crisis
    Management Center and to begin the CUSEC work effort.
        This reprogrammed amount raised our initial Crisis Response
    Management appropriation of $200,000 to $450,000.
                                program support
        Question. Two new positions are requested for management and
    administration: a chief Information Officer, and a Senior Contracting
    Specialist. Of the two new positions requested, which is more important
    to the agency, and why?
        Answer. For two very different reasons, both positions are key to
    RSPA's success. Efficient use of resources and accomplishment of RSPA's
    performance goals depend on our ability to maintain adequate support
    staffing.
        As IRM and IT funding within the program offices increases to
    support growing and more complex programs, RSPA cannot afford to risk
    mismanagement (e.g. inefficiencies, overlap, electronic incompatible
    design) of its $8 million, and growing, IRM program. This is
    particularly critical concerning information and database systems
    within Pipeline Safety and Hazardous Materials Safety, and RSPA-wide
    automation systems. RSPA's CIO will be dedicated to ensuring that a
    consolidated, leveraged, customer-focused, and forward thinking program
    is developed and implemented. The CIO will bring agency focus to a
    disparate RSPA-wide IRM/IT program that currently addresses individual
    program needs. RSPA's CIO will be able to review past program
    accomplishments in order to link budget requests to performance and
    make adjustments or foresee the need for internal analysis before
    formal requests are made.
        The One DOT vision requires a cross-modal IRM perspective in order
    to ensure maximized communications between modes and to ensure cross-
    modal programs are appropriately linked. A CIO will be able to provide
    an empowered single IRM/IT voice to ensure RSPA is heard and that
    databases and other electronic systems within our cross-modal programs
    are appropriately developed.
        Significant increases in RSPA's Research and Safety programs will
    require a skilled, senior procurement professional to execute and
    manage complex state of the art agreements and contracts. The Advanced
    Vehicle Program (AVP), National Pipeline Mapping System (NPMS), and new
    R&D programs are highly visible projects of national significance.
    Effective implementation of these programs will require the contract
    management expertise of a Senior Contracting Specialist on a full time
    basis.
        The Advanced Vehicle Program (AVP) is just one of RSPA's major new
    high dollar value (requested at $20 million in 2000) research programs
    that was authorized in the Transportation Equity Act for the 21st
    Century. We will manage that program in partnership with other federal
    agencies, private companies, research institutions, and state and local
    governments. The AVP program includes innovative contracting mechanisms
    such as ``other transactions authority''. This nontraditional,
    industry-driven, cost-shared approach to federal contracting increases
    the commitment of the partners, leverages valuable research funding,
    strengthens the likelihood for success, and reduces risk to the federal
    investment.
        There will be other significant workload created by other research
    projects, such as the Remote Sensors and Advanced Instructional
    Technology programs. These R&D programs will also require an
    experienced and skilled contracts professional to award and manage
    multiple complex R&D contracts, involving multiple contractors and
    complex contractor teaming arrangements.
        The National Pipeline Mapping System (NPMS) is a new major safety
    program that also directly supports the DOT Strategic Plan by
    accomplishing the promotion of our goals (Safety, Mobility, and
    Economic Growth and Trade) for the American people. The NPMS
    encompasses the management of a complex Architect and Engineering (A&E)
    Support Services contract and the awarding and administration of
    multiple cooperative agreements with state agencies.
        Question. An Increase of $235,000 above the enacted level is
    requested for RSPA's information support center. Why is an increase of
    this magnitude needed? Please specify what activities were performed
    with these funds in fiscal years 1998 and 1999, and what activities are
    planned for fiscal year 2000 under the budget request.
        Answer. In previous years, RSPA has been able to operate its IRM
    program using available financial alternatives. Those alternatives no
    longer exist. This request simply covers the costs for existing
    operations--it does not provide for new initiatives or provide
    increased levels of effort for existing activities.
        Basic IRM contract support for information technology and automated
    systems is essential to the Agency's ongoing operations. RSPA has a
    very small contract support organization that must keep up with the
    demands (e.g., development of HTML materials for our public websites;
    maintenance of financial and incident reporting systems; maintenance of
    e-mail, calendaring and other management support protocols) that
    sophisticated users and other customers require in order to remain
    productive.
        Finding and retaining qualified technicians requires offering
    competitive salaries in today's job market. The public has expectations
    that we will maintain our accessability and that we will continue to
    provide them with information through our websites. They also expect us
    to continue to be responsive to their Internet inquiries and continue
    to support information tools such as broadcasting live discussions of
    regulatory issues.
        The skill level of our contracted technicians must be maintained to
    provide sufficient support for other user service demands as well. We
    must continue to maintain the existing demands for support of the
    hardware and software used in RSPA.
        Question. Is there a current or projected shortage of
    transportation engineers or professionals? If not, please explain the
    scope and nature of and justification for your commitment to the
    Garrett A. Morgan Technology and Transportation Futures Program. Why is
    funding critical at this time, especially given the progress made to
    date?
        Answer. In 1998 the unemployment rate for engineers was 1.5
    percent, which is tantamount to full employment. Within the past five
    years, demand for engineering skills has skyrocketed with actual
    engineering employment growing almost 20 percent. The Bureau of Labor
    Statistics predicts continuing growth in engineering jobs in the coming
    century. With this much demand for engineers as well as for other
    transportation professionals, it is critical to attract workers who
    have the knowledge and skills to design, develop, deploy and maintain
    the transportation systems of the future. Without this knowledge base,
    the national transportation system will not be able to operate at peak
    efficiency.
        Question. Department-wide, how much money was allocated for the
    Garrett A. Morgan Technology and Transportation Futures Program during
    fiscal year 1998 and how much will be allocated during fiscal year
    1999? Please specify the exact source of those funds.
        Answer. While all DOT agencies are involved in the Morgan program,
    they have been asked to build on existing programs. During fiscal year
    1998 and fiscal year 1999, USCG and FAA both contributed $100,000 to
    RSPA for the Morgan program.
        Question. How much of the GSA rent increase of $280,000 is
    associated with headquarters and field office space to be utilized by
    the additional RSP staff in hazardous materials, emergency
    transportation, and management and administration?
        Answer. None of the $280,000 increase is associated with the
    increase in staff for RSP. We plan to absorb our office space needs for
    the new employees through a more efficient use of existing space. RSP's
    request for rent is the Administration's best estimate for the cost of
    square footage authorized for RSPA. The increase of 280,000 provides
    for increases for RSP's new leases nationwide. New leases were required
    as a result of renewing several expiring leases, and the departmental
    mandatory requirements for co-locating offices nationwide.
    Additionally, the increase provides for GSA's rent increase nationwide
    (inflation) of 2.6 percent.
        Question. Why is the TASC Working Capital Fund budget estimate so
    much higher than the enacted pro-rata share?
        Answer. The amount for TASC funding requested in our fiscal year
    2000 submission is based on an estimate (provided by TASC) of
    anticipated RSPA obligations that are incurred as part of the TASC
    revolving fund. The estimates are developed by TASC officials, who
    consult with Operating Administration staff. We prorate that estimate
    between the RSP and Pipeline Safety appropriations.
        The charges that flow through TASC are either mandatory or directly
    impact our safety and R&D programs.
        RSPA's fiscal year 2000 request increased significantly over the
    fiscal year 1999 enacted level due to several factors.
      --The amount enacted for RSPA's TASC payment in fiscal year 1999 will
            not fully cover the fiscal year 1999 TASC billing estimate. We
            have requested the full amount of the fiscal year 2000 TASC
            estimate in our budget request for fiscal year 2000.
      --The fiscal year 1999 enacted level was based on a TASC estimate
            developed during a period when RSPA had many vacancies, but in
            the Spring of fiscal year 1998, when the TASC estimate for
            fiscal year 2000 was developed, RSPA was at nearly full
            staffing. Since a number of the TASC charges are based on a
            proration of modal on-board staffing levels, RSPA's share of
            total TASC estimate for fiscal year 2000 increased.
      --The total estimate for the fiscal year 2000 TASC revolving fund
            increased slightly, thereby increasing RSPA's share.
      --The fiscal year 1999 enacted level cut $524,000 (general provision
            320) from the original fiscal year 1999 TASC estimate. The
            combination of those actions caused an overall fiscal year 2000
            TASC increase that has impacted RSPA's request.
                         emergency preparedness grants
        Question. Has the agency determined how the increased level of
    hazardous materials shipper and registration fees will be assessed?
    Will the universe of registered shippers be increased, the fee
    structure changed, or enforcement of current fee assessments improved?
    When do you expect to complete a rulemaking on this subject?
        Answer. RSPA plans to propose a fee structure that will retain a
    relatively modest fee for the majority of registrants that are small
    businesses. We believe that an equitable assessment of fees that is
    easy to understand and implement, but which will also provide increased
    funding for the training and planning grants, will be acceptable to
    industry. We fully intend to seek industry input as the rulemaking
    proceeds. The new fee schedule would be effective July 1, 2000, the
    start of the hazmat registration year. In anticipation of that date, it
    is expected that a final rule would be published not later than March
    1, 2000.
        Question. Will the increased emergency preparedness grants program
    go into effect if the new or additional hazardous materials
    transportation registration fees are not authorized?
        Answer. Yes. RSPA has authority to modify the fee structure to
    raise approximately $14.3 million for emergency preparedness grants in
    fiscal year 2000.
        Question. The budget request includes an increase of $6,400,000 for
    hazardous materials emergency preparedness grants--$7,800,000 for
    training grants, and $5,000,000 for planning grants. This represents a
    100 percent increase over the amount let in grants in fiscal year 1999.
    The bill language provision regarding charging user fees and depositing
    such fees an offsetting collection to the Research and Special Programs
    appropriation assumes the collection of $4,575,000 in user fees. Would
    the $6,400,000 additional fee funding for emergency preparedness grants
    be assumed in addition to the $4,575,000 for activities of the Office
    of Hazardous Materials Safety in the fourth quarter of fiscal year
    2000? Does this mean that RSPA anticipates collecting an additional
    $10,975,000 in registration fees and other user fees in fiscal year
    2000?
        Answer. RSPA will propose to modify the registration fee structure
    to raise approximately $14.3 million in fiscal year 2000 for the HMEP
    Grants program. If legislative authority to fund RSPA's entire HMS
    Program from the registration fee program is granted, we will initiate
    an additional rulemaking action to collect approximately $35 million
    annually. We would fund the fourth quarter of the HMS Program in the
    amount of $4,575,000 from these fees. On an annual basis, we would use
    the $35 million to fund both the HMEP Grants program ($15 million) and
    the HMS Program ($20 million).
        Question. Please prepare a table showing the amount allocated to
    each of the states for each of the last three years and display the
    increase that would be provided if the full request was allowed.
        Answer. Increasing the registration fee would double the amount
    available for the grants.

    ------------------------------------------------------------------------
                                                  AMOUNT
                                               ALLOCATED IN     INCREASE IN
                     STATES                     EACH FISCAL    FULL REQUEST
                                                YEAR 1996,        ALLOWED
                                                1997, 1998
    ------------------------------------------------------------------------
    ALABAMA.................................        $117,942        $117,942
    ALASKA..................................          41,180          41,180
    ARIZONA.................................          81,763          81,763
    ARKANSAS................................          72,907          72,907
    CALIFORNIA..............................         485,207         485,207
    COLORADO................................          83,356          83,356
    CONNECTICUT.............................          75,144          75,144
    DELAWARE................................          44,913          44,913
    DISTRICT OF COLUMBIA....................          37,448          37,448
    FLORIDA.................................         216,353         216,353
    GEORGIA.................................         142,701         142,701
    HAWAII..................................          44,789          44,789
    IDAHO...................................          58,847          58,847
    ILLINOIS................................         316,505         316,505
    INDIANA.................................         152,033         152,033
    IOWA....................................         104,755         104,755
    KANSAS..................................         117,072         117,072
    KENTUCKY................................          90,198          90,198
    LOUISIANA...............................         103,884         103,884
    MAINE...................................          53,871          53,871
    MARYLAND................................          94,179          94,179
    MASSACHUSETTS...........................         108,362         108,362
    MICHIGAN................................         169,076         169,076
    MINNESOTA...............................         129,639         129,639
    MISSISSIPPI.............................          88,831          88,831
    MISSOURI................................         134,987         134,987
    MONTANA.................................          58,847          58,847
    NEBRASKA................................          92,313          92,313
    NEVADA..................................          58,723          58,723
    NEW HAMPSHIRE...........................          52,252          52,252
    NEW JERSEY..............................         155,142         155,142
    NEW MEXICO..............................          73,776          73,776
    NEW YORK................................         252,183         252,183
    NORTH CAROLINA..........................         151,533         151,533
    NORTH DAKOTA............................          77,385          77,385
    OHIO....................................         264,376         264,376
    OKLAHOMA................................          94,553          94,553
    OREGON..................................          91,941          91,941
    PENNSYLVANIA............................         210,132         210,132
    RHODE ISLAND............................          46,281          46,281
    SOUTH CAROLINA..........................          91,692          91,692
    SOUTH DAKOTA............................          61,708          61,708
    TENNESSEE...............................         123,044         123,044
    TEXAS...................................         321,605         321,605
    UTAH....................................          70,169          70,169
    VERMONT.................................          41,927          41,927
    VIRGINIA................................         121,177         121,177
    WASHINGTON..............................          99,033          99,033
    WEST VIRGINIA...........................          71,786          71,786
    WISCONSIN...............................         129,761         129,761
    WYOMING.................................          49,890          49,890
    ------------------------------------------------------------------------

        Question. Does the application package for the emergency planning
    and training grant program include a needs assessment section which
    OHMS previously indicated would be used as a baseline to measure the
    effectiveness of the program? In addition, did OHMS indicate that as a
    part of the curriculum development effort, qualitative and quantitative
    state assessment procedures would include state level peer groups to
    assist in monitoring and evaluating the program?
        Answer. Grantee applications include need assessment sections at
    the beginning of each project period. These needs assessments show a
    need far in excess of available resources. Each grantee has made
    substantial progress against identifying training needs. So far,
    694,000 responders and others have been trained, in part, with HMEP
    Grants.
        State level peer groups qualify courses for inclusion in the
    national list of courses. The process in each state, using the national
    curriculum guidelines, identifies areas needing improvement. State
    training officers modify courses to conform to national standards. In
    many cases course material from states having excellent programs is
    shared with states needing assistance, thereby realizing economies of
    scale.
        Question. What is the role of the OHMS training office in the
    emergency planning and training grant program meetings, conferences,
    training and outreach activities? What is the role of the training
    office in the development of training curriculum that training courses
    must comply with in order to receive funding under the grant program?
        Answer. The OHMS training office is responsible for providing
    training materials to the broad spectrum of the hazardous materials
    community, including industry, enforcement personnel, and emergency
    responders. It also develops, publishes and distributes the NAERG. The
    grants program is an interagency grants program designed to assist
    public sector emergency responders in planning for and training to
    respond to incidents involving hazardous materials.
        The training office participates in development of the curriculum
    guidelines for the grants program and has provided valuable information
    for curriculum development efforts. Training office expertise is
    primarily in awareness, compliance and enforcement training. Since the
    HMEP grants program is an interagency program, the expertise of the
    Federal Emergency Management Agency's Emergency Management Institute
    (EMI) is utilized in coordinating the national author team responsible
    for preparing and updating the curriculum guidelines. EMI has the
    expertise in the higher levels of response training, and is the premier
    Federal facility with the knowledge and experience to take the lead to
    support guideline development and course preparation.
        Question. How could OHMS better merge the activities of the
    training office with those of the grant program to realize increased
    cost sharing and synergistic benefits?
        Answer. The grants unit and the Office of Hazardous Materials
    Initiatives and Training work closely together in areas of common
    interest to improve the capabilities of the emergency response
    community. Grantees and local responders attend training office
    sessions funded as grant eligible activities, providing cost sharing
    and synergistic benefits. Joint meetings are planned to bring together
    grantees and the traditional regulatory, compliance and enforcement
    audience served by the training office. Coordination of meetings will
    improve the communication and information flow between the grantees and
    other state agencies served by the training office and its outreach
    activities. Cost savings are realized by reducing the number of
    meetings and sharing costs for existing activities to reach a larger,
    more diverse audience.
                           office of pipeline safety
        Question. What are the current unobligated balances in the various
    sub accounts pertaining to the appropriation for the Office of Pipeline
    Safety? What will be unobligated at the end of fiscal year 1999? Will
    any unobligated funds be returned to the pipeline safety fund?
        Answer. As of April 21, 1999, the total unobligated balance for the
    Office of Pipeline Safety was $23.6 million. This includes $5.8 million
    for operation expenses; $2.7 million for contract program activities
    (one year funds); $1.5 million for R&D program activities (three year
    funds); and $13.6 million for grants. We plan to obligate all contract
    program and grant funding by close of fiscal year 1999. We estimate
    that our 3-year funding that was enacted in fiscal year 1999 for R&D
    will have an unobligated balance of approximately $600,000.00 at the
    end of fiscal year 1999. At this time, we are estimating a lapse of
    less than $100,000 of one year operating expenses. By law, unobligated
    ``one-year'' funds for a given fiscal year are returned to the Pipeline
    Safety Fund 5 years after the close of the fiscal year in which they
    were appropriated.
        Question. What activities can be funded with the monies that are
    available for three years?
        Answer. Three year funding availability is requested in our fiscal
    year 2000 President's Budget as follows. We have indicated the funding
    sources and note that an activity may be funded by more than one source
    (e.g. State Pipeline Safety Grants).

            Program Activity                                          Amount

    Funding Source: Trust Fund Share of Pipeline Safety.....      $4,248,000
                        --------------------------------------------------------
                        ____________________________________________________
    Activity:
        Operating Expenses:
            Personnel Compensation & Benefits...............         260,000
            Administrative Expenses.........................          45,000
    Contract Programs:
        Information & Analysis..............................         400,000
        Risk Assessment & Technical Studies.................         400,000
        Compliance..........................................         100,000
        Training & Information Dissemination................         100,000
    OPA: Implementing the Oil Pollution Act.................       2,443,000
    Grants: State Pipeline Safety Grants....................         500,000
                        ========================================================
                        ____________________________________________________
    Funding Source: Pipeline Safety Fund
        Activity: Research and Development..................       2,144,000
                        --------------------------------------------------------
                        ____________________________________________________
        Information Systems.................................         400,000
        Risk Assessment.....................................         300,000
        Mapping.............................................         800,000
        Non-Destructive Evaluation..........................         219,000
        Pipe Locating and Monitoring Technology.............         425,000
                        ========================================================
                        ____________________________________________________
    Grants..................................................      15,519,000
                        --------------------------------------------------------
                        ____________________________________________________
        State Pipeline Safety Grants........................      13,019,000
        Risk Grants.........................................         500,000
        One-Call Grants.....................................       1,000,000
        Damage Prevention Grants............................       1,000,000

        Question. Why is the TASC working capital fund budget estimate so
    much higher than the enacted pro rata share?
        Answer. The amount for TASC funding requested in our fiscal year
    2000 submission is based on an estimate (provided by TASC) of
    anticipated RSPA obligations that are incurred as part of the TASC
    revolving fund. The estimates are developed by TASC officials, who
    consult with Operating Administration staff. We prorate that estimate
    between the RSP and Pipeline Safety appropriations.
        The charges that flow through TASC are either mandatory or directly
    impact our safety and R&D programs.
        RSPA's fiscal year 2000 request increased significantly over the
    fiscal year 1999 enacted level due to several factors.
      --The amount enacted for RSPA's TASC payment in fiscal year 1999 will
            not fully cover the fiscal year 1999 TASC billing estimate. We
            have requested the full amount of the fiscal year 2000 TASC
            estimate in our budget request for fiscal year 2000.
      --The fiscal year 1999 enacted level was based on a TASC estimate
            developed during a period when RSPA had many vacancies, but in
            the Spring of fiscal year 1998, when the TASC estimate for
            fiscal year 2000 was developed, RSPA was at nearly full
            staffing. Since a number of the TASC charges are based on a
            proration of modal on-board staffing levels, RSPA's share of
            total TASC estimate for fiscal year 2000 increased.
      --The total estimate for the fiscal year 2000 TASC revolving fund
            increased slightly, thereby increasing RSPA's share.
      --The fiscal year 1999 enacted level cut $524,000 (general provision
            320) from the original fiscal year 1999 TASC estimate. The
            combination of those actions caused an overall fiscal year 2000
            TASC increase that has impacted RSPA's request.
        Question. What could be done in fiscal year 1999 and fiscal year
    2000 to expedite implementation of some of the objectives of the one-
    call provisions of TEA-21?
        Answer. In fiscal year 1999, RSPA is doing everything possible to
    expedite implementation of the one-call provisions of TEA-21, including
    analyzing best practices, establishing cooperative relationships with
    all parties to construction around underground utilities, and planning
    the grant process contemplated by TEA-21. RSPA is working with 160
    federal and state government and private sector experts to identify
    best practices in preventing damage to underground facilities. The Team
    meets regularly and plans to complete its report to Congress by the end
    of June 1999. We are working with several constituencies to determine
    how best to ensure that the findings of this effort are understood and
    put to use. We will broadcast an interim report via satellite and
    Internet in early May. A public meeting will be held, jointly with the
    NTSB, on June 30, 1999 to announce the results. In fiscal year 2000, we
    will be ready to execute the TEA-21 grants to encourage implementation
    of best practices identified in the report.
                                   user fees
        Question. Please prepare a comparative historical table displaying
    the per mile user fee assessed to gas transmission and liquid pipeline
    operators, and the total collected in user fees from each industry in
    fiscal years 1996 through 1998 and anticipated for fiscal year 1999.
        Answer. A table follows which shows the per mile rate and the total
    collections for fiscal years 1996 through 1998. We are currently in the
    process of collecting for fiscal year 1999. Therefore, the amounts
    shown below indicate the assessment made to the gas and liquid
    operators. We estimated the fiscal year 1999 figures based on the
    amount of $29,771,259.86. This includes the President's Budget Request
    for the Pipeline Safety Program of $34,648,000, less funds derived from
    the Oil Spill Liability Trust Fund of $4,248,000 and $1.4 million
    derived from existing user fees, plus an offset to the Research and
    Special Programs Appropriation for labor costs to support the Pipeline
    Safety Program. Other variables include the offset from previous year
    collections. The law allows RSPA to collect 105 percent of the
    appropriation and changes for pipeline mileage.

    ------------------------------------------------------------------------
                                                                   Total
                Gas Transmission               Per Mile Rate     Collected
    ------------------------------------------------------------------------
    Fiscal Year 1996........................          $77.49     $22,475,000
    Fiscal Year 1997........................           67.46      18,927,423
    Fiscal Year 1998........................           67.98      20,050,437
    Fiscal Year 1999........................           70.47  \1\ 20,793,000
    ------------------------------------------------------------------------
    \1\ Fiscal year 1999 based on assessment.

    ------------------------------------------------------------------------
                                                                   Total
                     Liquid                    Per Mile Rate     Collected
    ------------------------------------------------------------------------
    Fiscal Year 1996........................          $49.67      $7,683,000
    Fiscal Year 1997........................           61.27       8,869,716
    Fiscal Year 1998........................           59.59       8,864,335
    Fiscal Year 1999........................           57.88   \1\ 9,077,066
    ------------------------------------------------------------------------
    \1\ Fiscal year 1999 based on assessment.

        Question. How did you allocate the user fee between gas
    transmission lines and product lines for fiscal year 1997 and fiscal
    year 1998? Does this accurately reflect the true allocation of your
    efforts and resources? Please document your answer.
        Answer. In fiscal year 1997 and fiscal year 1998, RSPA charged gas
    operators 55 percent of program costs and 87 percent of grants. We
    charged liquid operators 45 percent of program costs and 13 percent of
    grants. These percentages closely reflect the allocation of our efforts
    and resources, as shown in the table that follows.

    ------------------------------------------------------------------------
                                                          Fiscal     Fiscla
                                                        year 1997  year 1998
                     Program Activity                      Gas/       Gas/
                                                          Liquid     Liquid
    ------------------------------------------------------------------------
    PC&B \1\ for the Inspectors (Regions).............      50/50      50/50
    PC&B for HQ personnel.............................      67/33      60/40
    Administration....................................      50/50      50/50
    Information and Analysis..........................      50/50      50/50
    Risk Assessment & Technical Studies...............      50/50      50/50
    Compliance........................................      50/50      50/50
    Training & Information Dissemination..............      75/25      75/25
    Emergency Response (NRC)..........................      50/50      50/50
    Public Education Campaign (One-call)..............      50/50      50/50
    Research & Development............................      50/50      50/50
        Average Apportionment.........................      54/47      54/47
        Actual Apportionment..........................      55/45      55/45
     Grants...........................................      87/13     87/13
    ------------------------------------------------------------------------
    \1\ Personnel, Compensation & Benefits.

                          pipeline safety reserve fund
        Question. What is the current balance in the pipeline safety
    reserve fund? Please provide a historical table displaying the annual
    unappropriated balance in the fund from the end of fiscal year 1988
    through fiscal year 1999 with an estimated level for fiscal year 2000,
    assuming your full request was approved. Please describe how much of
    the unobligated balance could safely be drawn down.
        Answer. The current balance in the Pipeline Safety (reserve) Fund
    as of April 1, 1999 is $15,367,538. The historical table requested is
    provided as follows. It replaces the table on page 174 of our budget
    request which is in error and is corrected as follows to match the
    balance reflected in the U.S. Treasury:

           DEPARTMENT OF TRANSPORTATION RESEARCH AND SPECIAL PROGRAMS
           ADMINISTRATION PIPELINE SAFETY UNAVAILABLE COLLECTIONS \1\
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                                       Fiscal year
                                            --------------------------------
                                                1998       1999       2000
                                               Actual    Enacted    Request
    ------------------------------------------------------------------------
    Balance, start of year.................     17,354     16,748     15,348
    Receipts...............................     28,964     29,364     34,584
                                            --------------------------------
          Total: Balances and collections..     46,318     46,112     49,932
    Pipeline safety (appropriation)........    -29,421    -30,190    -33,939
    Research and Special Programs..........       -574       -574       -645
                                            --------------------------------
          Total appropriations.............    -29,995    -30,764    -34,584
    Unobligated balance returned to                354  .........  .........
     receipts..............................
    Other adjustments......................         71  .........  .........
          Balance, end of year.............     16,748     15,348     15,348
    ------------------------------------------------------------------------
    \1\ Identification code 69-5172-0-2-407.

        A recent analysis confirms that, as of the end of fiscal year 2000,
    the amount held in the fund--in excess of the $11 million needed to
    sustain OPS operations--is projected to be about $4 million. This $4
    million is far less than the general fund appropriations that this
    program had to rely upon in 1986 and 1987 while the pipeline safety
    fees were disputed in court. Therefore, we consider the fiscal year
    1999 and fiscal year 2000 estimated reserve fund level of $15.4 million
    to be justified.
        Question. Please recalculate your answer from last year regarding
    the minimum dollar amount that should be retained in the pipeline
    safety fund balance in order to maintain the integrity of the pipeline
    safety program. What is the justification for the recalculated amount?
        Answer. The following table shows funds entering and leaving the
    Pipeline Safety Fund from October 1, 1998 through March 30, 1999.

                       Pipeline Safety Fund (PSF) Balance

                              [dollars in millions]

    Starting Balance--Oct. 1, 1998................................     $16.7
    Amount warranted out for program costs--Mar. 30, 1999.........     -30.9
    Collections through Mar. 30, 1999.............................      32.2
                        --------------------------------------------------------------
                        ____________________________________________________

          Remaining Balance--Mar. 30, 1999........................      15.4

        Additional collections and adjustments to collections
    (overpayments/under payments) will impact the balance through September
    30, 1998.
        At the beginning of each fiscal year, OPS needs a balance in the
    fund of at least $11 million to sustain operations until fees can be
    collected to replenish the fund. Because appropriations were passed
    early in fiscal year 1999, fee assessments were able to be sent out
    much earlier in the fiscal year than usual--December 1998. Fortunately,
    OPS was able to bill the fee assessments early in fiscal year 1999.
    Since the fee assessments are based on the level of appropriations, it
    would be too risky to assume that we would receive appropriations in
    October each year, as we did in fiscal year 1999.
        As of the end of fiscal year 2000, the amount held in the fund--in
    excess of the $11 million needed to sustain OPS operations--is
    projected to be about $4 million. This $4 million is far less than the
    general fund appropriations that this program had to rely upon in 1986
    and 1987 while the pipeline safety fees were disputed in court.
    Therefore, we consider the fiscal year 1999 and fiscal year 2000
    estimated reserve fund level of $15.4 million to be justified by both
    operational needs ($11 million reserve needed to sustain operations)
    and as a partial ``reimbursement,'' in effect, to the General Fund.
           oil pollution act expenses and other environmental issues
        Question. Please allocate and describe all OPS expenses that
    legally could be associated with the Oil Pollution Act requirements in
    fiscal year 1999 and anticipated in fiscal year 2000. How does this
    compare in each fiscal year with the amount derived from the Oil Spill
    Liability Trust Fund? For fiscal years 1999 and 2000, what were the Oil
    Spill Liability Trust Fund transfer levels requested by RSPA prior to
    the OMB passback?
        Answer. The table below depicts those expenses that legally could
    be associated with the Oil Pollution Act requirements for fiscal years
    1999 and 2000, and compares the fiscal year 1999 enacted and the fiscal
    year 2000 request.

    ------------------------------------------------------------------------
                                                     Fiscal year 1999
                    Activity                 -------------------------------
                                                Allocation        Enacted
    ------------------------------------------------------------------------
    PC&B....................................        $729,000        $260,000
    Administrative Costs....................         145,000          45,000
    Program.................................       1,071,000       1,000,000
    Implementing OPA \1\....................       2,433,000       2,443,000
    R&D.....................................       1,134,000  ..............
    Grants/Liquid Programs..................       1,700,000         500,000
                                             -------------------------------
          Total.............................       7,442,000       4,248,000
                                             ===============================
    Fiscal year 1999 RSPA request prior to         7,442,000  ..............
     OMB passback...........................
    ------------------------------------------------------------------------
    \1\ Plan review, approval, and exercises.

    ------------------------------------------------------------------------
                                                     Fiscal year 2000
                    Activity                 -------------------------------
                                                Allocation        Enacted
    ------------------------------------------------------------------------
    PC&B....................................        $906,000         260,000
    Administrative Costs....................         150,000          45,000
    Program.................................       2,491,000       1,000,000
    Implementing OPA \1\....................       2,433,000       2,443,000
    R&D.....................................         800,000  ..............
    Grants/Liquid Programs..................       2,024,000         500,000
                                             -------------------------------
          Total.............................       8,814,000       4,248,000
                                             ===============================
    Fiscal year 2000 RSPA request prior to         8,814,000  ..............
     OMB passback...........................
    ------------------------------------------------------------------------
    \1\ Plan review, approval, and exercises.

        A description of resources and activities used in support of the
    OPA program follows:
    Positions and FTE
        Seven (7) FTE address environmental policy, regulatory development,
    spill response plan review and exercise, pipeline inspection and spill
    response technical monitoring; special task force/studies of oil
    pipeline company risk management programs and operations.
    Travel
        More than 360 hazardous liquid inspections, including accident
    investigations and pipeline construction.
        Three (3) area exercises and 20 table top drills.
    Information and Analysis
        Over half the incident reporting, data collection, analysis and
    labor.
        Identifying accident cause and consequence, evaluating and acting
    on environmental impacts, particularly related to protecting drinking
    water sources.
    Risk Assessment and Technical Studies
        Systematically identify hazardous liquid risks, and compare
    relative likelihood and consequences of an adverse event.
        Monitor, report and expand the Risk Demonstration and System
    Integrity Inspection Pilot programs.
        Increase public awareness about potential risks from liquid
    pipelines.
    Compliance and Spill Response Monitoring
        Technical field engineering support for monitoring major spills and
    remediation.
        Dedicated personnel for integrating public and private sector
    incident coordination and decision support for protective actions.
    Training and Information Dissemination
        Computer-based training (CBT) to update safety evaluations of
    hazardous liquid pipeline systems.
        Classes and seminars specifically provided to address hazardous
    liquid risk and system integrity concerns.
    National Pipeline Mapping Systems Operations and Maintenance
        Collecting and digitizing more accurate liquid pipeline location
    information as it becomes available. Location data are used in
    conjunction with data on population, drinking water intakes, and
    terrain to set priorities for prevention and response actions.
    Non-Destructive Evaluation
        Detect mechanical damage to liquid pipelines.
    State Grants for Hazardous Liquid Programs
        Fund 13 states oversight of intrastate pipeline operations and
    maintenance, construction, repairs.
        Question. Please describe progress made in the environmental
    indexing effort. What was accomplished with funding provided in fiscal
    year 1998? How much is being spent in fiscal year 1999 for this
    activity, and for what purposes? What new initiatives will be conducted
    during fiscal year 2000 and how much will that cost?
        Answer. RSPA has been working with the Environmental Protection
    Agency (EPA), as mandated by statute, and the Departments of Interior
    (DOI), Agriculture (USDA), and Commerce (DOC), environmental
    organizations, technical experts, and the pipeline industry to identify
    and locate resources that are most susceptible to a hazardous liquid
    release, or for which consequences would be most adverse if affected by
    a release. RSPA is working on databases that will provide the
    information necessary to locate unusually sensitive areas, once we have
    a completed definition.
        As a first step, RSPA has used fiscal year 1998 funding to create a
    catalog that tells how we determined what drinking water resources are
    most susceptible to contamination from a hazardous liquid release, and
    how to locate these resources. We have placed the catalog on the RSPA
    Internet site http://ops.dot.gov.
        RSPA has also used fiscal year 1998 funding to gather drinking
    water data and to process this data in a geographic information system
    (GIS)in several states. In addition, fiscal year 1998 funds were used
    to create agreements with the agencies responsible for drinking water
    data to verify that the final maps truly depict the most unusually
    sensitive drinking water resources. Because the data are not created
    and maintained by a single government agency, RSPA is collecting the
    data and putting it into a common format.
        RSPA expects to spend $400,000 in fiscal year 1999 to continue to
    obtain and process drinking water data, and to begin collecting and
    processing ecological data. Ecological data includes threatened and
    endangered species, species at risk of global extinction, and areas
    where a large percentage of the world's migratory birds congregate. All
    of the location data on threatened and endangered species and species
    at risk of global extinction are created and maintained at the state
    level by State Heritage Programs or State Nature Conservancies. RSPA is
    establishing agreements with each agency to access the data. RSPA is
    also working with several agencies and environmental organizations to
    co-fund standardizing this data, converting the paper data on the
    sensitive resources to digital data, gathering the digital data into a
    common national database, and making the data available to the public
    and other government agencies at various mapping scales.
        RSPA anticipates that $800,000 will be needed in fiscal year 2000
    to continue gathering and processing drinking water and ecological
    resource data in the top thirty states, based on pipeline mileage. The
    data will be in the format of maps that the hazardous liquid pipeline
    industry can use to apply additional prevention and response measures
    where it is determined that a pipeline release could affect an
    unusually sensitive area.
        Question. Please summarize the results of last year's review of
    pipeline operators' emergency response plans. Include the number of
    plans reviewed, the number accepted, and the number of plans which
    required corrective measures.
        Answer. In fiscal year 1998, OPS reviewed 59 new response plans and
    292 revisions to existing response plans. Of the 59 new plans we
    reviewed, all 59 had at least one deficiency requiring correction. Of
    the 292 revisions to existing plans, 89 of them had at least one
    deficiency requiring correction. When OPS finds a deficiency in a
    response plan, we send our findings to the operator with guidance on
    how to bring the plan into compliance. We work closely with operators
    to help them improve their plans, providing them examples of how to
    address difficult response issues, such as getting people and equipment
    to remote areas. OPS usually gives operators 90 days to submit their
    revised plans. Most plans require more than one iteration to correct
    all of their deficiencies.
        Question. Please discuss the amount of funds spent on spill
    response exercises during each of the last three years. How much do you
    expect to spend during fiscal year 1999 and during fiscal year 2000?
    What is the continuing value of those expenditures? Given the lessons
    learned, could the number of drills be reduced during fiscal year 2000?
        Answer. In fiscal year 1996, OPS spent $545,000 on spill response
    exercises, $443,000 in fiscal year 1997 and $567,000 in fiscal year
    1998. These amounts include contractor support for exercise design,
    conduct, and evaluation. These figures also include an estimated
    $15,000 per year for travel costs of OPS staff to participate in
    exercises.
        We expect to spend $525,000 on exercises in both fiscal year 1999
    and in fiscal year 2000. The value of conducting exercises is evident
    in the improvement of pipeline operators' spill response capabilities.
    Indicators of better performance are increased oil recovery rates, more
    rapid response times, and diminished environmental damages. In
    addition, Federal, state, and local environmental and emergency
    response agencies, have built working relationships with one another
    and have performed better during an actual spill response following an
    OPS response exercise.
        The 20 tabletop exercises each year are a small sample of the 1,350
    facility response plans for facilities under our jurisdiction. We
    select operators based on risk factors, as identified in our review of
    their response plans and as suggested by our OPS regional staff. Until
    we reach a point of diminishing returns, it would be premature to begin
    reducing our exercise program.
        Question. Please update us on the implementation of the Alyeska
    memorandum of agreement regarding valves and corrosion. Are there any
    new issues in this area?
        Answer.
    Coupon Monitoring Program
        In March 1996, Alyeska began a long term, comprehensive study to
    specifically determine if corrosion coupons could be used to evaluate
    cathodic protection on the large diameter pipeline. Alyeska has now
    completed all action items contained within the Corrosion Coupon
    Agreement. The results of the study indicate that, although corrosion
    coupons represent an important contributor to the monitoring of the
    cathodic protection system on Alyeska, they cannot be used as a stand
    alone method for determining adequate cathodic protection. However,
    coupons may be used in conjunction with other acceptable engineering
    practices such as internal inspection tools, close interval surveys,
    and local knowledge of environmental conditions. Alyeska will submit
    their final Corrosion Coupon Report in early 1999. We will meet with
    Alyeska to review the final report and determine whether the proposed
    comprehensive corrosion monitoring program is effective as an
    alternative to current regulatory requirements.
    Corrosion at Transition Joints
        We have ordered Alyeska to evaluate and, if necessary, repair all
    aboveground fiberglass coating at transition joints to ensure that
    water does not penetrate the external pipeline coating. The fiberglass
    coating helps prevent corrosion where the pipeline transitions from
    belowground to aboveground. This action was supported by reports of
    corrosion at several of the transition areas.
    Mainline Valve Program
        We closely monitor Alyeska's maintenance of the large mainline
    valves used to shut off the pipeline if an accident occurs. In 1995, we
    became concerned that many of these valves did not seal properly and
    initiated action to assure that public safety and the environment were
    not placed at risk. In 1996, Alyeska began a system-wide review of
    these valves and in January 1997, agreed with the Joint Pipeline Office
    on a plan for assessment of valves on the TAPS. During 1997, Alyeska
    conducted a risk assessment on mainline valves in order to prioritize
    these mainline valves for testing, and to establish performance
    standards for internal leak through. Fifty (50) valves were tested in
    1996 and 1997. Forty-six (46) valves were tested in 1998. The remaining
    seventy-six (76) valves will be tested by year 2000.
        Alyeska is in the process of rehabilitating or replacing many of
    its valves. One valve in an environmentally sensitive area near the
    Yukon River will be replaced in 1999. Alyeska has revised its valve
    testing, repair and maintenance program. The program now provides for
    extensive maintenance and testing beyond what is required by the
    pipeline safety regulations.
    Fuel Gas Pipeline
        We have ordered Alyeska to take steps to protect their fuel gas
    pipeline from future detrimental movement and external forces, such as
    frost heave. The fuel gas pipeline, originally buried, has become
    exposed and is experiencing considerable bending stresses.
    Overpressure of the Pipeline
        We have ordered Alyeska to take corrective actions to prevent
    future overpressure of the pipeline. These actions include SCADA system
    examination and adjustment, evaluation of the pipeline control system
    and personnel training. This action follows two overpressure situations
    in 1997 and 1998.
                     risk assessment and technical studies
        Question. The Office of Pipeline Safety is requesting a $275,000
    increase in the risk assessment program, primarily for the system
    integrity inspection pilot program and for risk management
    communications activities. What are the primary distinctions between
    system integrity inspection (SII) practices and the risk management
    demonstration and pilot programs that are already underway? What
    portion of the requested increase is associated with SII and what
    portion is associated with risk management communications activities?
        Answer. In the System Integrity Inspection program, OPS requires
    compliance with regulations, only the approach to inspection is
    changing. OPS and the operator will address a broad set of system-wide
    safety and integrity issues, instead of the standard regulatory
    compliance inspection. These inspections will focus on areas of
    greatest risk so that OPS and operators can work together to find and
    fix problems related to significant risk at the earliest possible
    stage. Discussion will focus on corrosion control, hydro testing and
    internal inspection, natural hazard-related programs and use of new
    technologies for risk identification and control. OPS expects to
    discuss integrity related information that would not normally be
    addressed in a standard inspection and to address safety issues, like
    training, more systematically throughout a company's operations.
        In the Risk Management program, OPS allows operators to propose
    alternatives to the regulations that can demonstrate risk reduction and
    superior safety performance. Justification of superior safety
    performance can focus on several factors such as strengthened pipe
    condition; enhanced damage prevention; and increased inspection, repair
    and replacement in high risk segments. In preparing these
    justifications, operators usually employ advanced risk analysis
    techniques, including root cause analysis or better quantification of
    risk. As an example, OPS may approve different inspection techniques
    and schedules based on the risks found, and different repair and test
    processes.
        We plan to allocate equal proportions of the fiscal year 2000
    increases to SII and communications activities. We are providing
    additional opportunities for public involvement in the Risk Management
    Program though interactive communication technologies, including the
    Internet and satellite broadcasts that include field interviews at
    demonstration project sites.
        Question. Who are the current participants in pipeline risk
    management demonstration projects? What progress has been made in each
    of those projects?
        Answer. Ten companies are working with OPS in the risk management
    demonstration program, at various stages of project maturity. Chevron
    Pipe Line Company, Equilon Pipeline Company (formerly Shell Pipe Line
    Corporation), Mobil Pipe Line Company, Natural Gas Pipeline Company of
    America, and Phillips Pipe Line Company are operating under approved
    risk management work plans. RSPA is close to reaching agreement on
    demonstration project provisions with two more companies, Columbia Gas
    Transmission Corporation/Columbia Gulf Transmission Company, and
    Northwest Pipeline Corporation, whose applications will be open to a
    public comment period in the near future. RSPA is working with three
    other companies, Duke Energy, Enron Gas Pipeline Group, and Tennessee
    Gas Pipeline/East Tennessee Natural Gas, who have met the program
    criteria, and whose proposals may be reviewed and approved later this
    year. The ten operators with whom RSPA is working in the risk
    management program have produced a report which documents the progress
    they have made to date in each of these projects, which will be
    available on the OPS Web site shortly.
        Question. How much funding was associated with those demonstration
    projects in fiscal year 1999, and how much is requested for these
    projects in the fiscal year 2000 risk assessment program?
        Answer. A total of $855,000 was associated with the demonstration
    projects in fiscal year 1999. Of this amount, $735,000 provides for
    continued evaluation, approval, and monitoring of the projects; $95,000
    provides for maintenance and continued development of the information
    system used by regulators, the companies, and the public to stay
    abreast of project status; and $25,000 provides for development and
    distribution of newsletters and prospectuses to all interested parties.
        For fiscal year 2000, RSPA has requested about $900,000 for
    continued support of these projects. The balance of funding covers our
    investigation of the feasibility of applying risk management to
    distribution systems and to administrative support, and the requested
    increase for implementing the System Integrity Program and instituting
    additional communications activities.
                              compliance programs
        Question. For each of the last three fiscal years, please provide
    data on all enforcement actions taken by OPS, including the number of
    enforcement cases opened, closed, and the amount of civil penalty
    assessments collected. Please compare these data with the number of
    reportable events, number of deaths and injuries, and any other
    measures of pipeline safety for both hazardous liquids and gases.
        Answer. The following table is provided:

    ------------------------------------------------------------------------
                                                            CY
                                            --------------------------------
                                                1996       1997       1998
    ------------------------------------------------------------------------
    Enforcement:
        Measures:
            Cases Opened...................        185        179        218
            Cases Closed...................        167        186        273
            Civil Penalty Assessments          $46,750   $228,170   $316,846
             Collected.....................
    Reportable events:
        Incidents Reported:................        374        362        379
        Deaths.............................         20         11         19
        Injuries...........................         85         93         74
        Property Damage (in millions)......         64         65        104
    ------------------------------------------------------------------------

        Question. How many of those companies provided with technical
    education were reinspected? Did you find those companies still out of
    compliance? If so, how many enforcement actions were taken against
    those companies?
        Answer. Fifty-four (54) of the companies that were inspected and
    received enforcement actions in fiscal year 1997 were inspected at
    different locations in their system during fiscal year 1998.
    Enforcement action was initiated on eighteen (18) of the companies in
    fiscal year 1998. However, it should be noted that the concerns found
    in fiscal year 1997 were not necessarily the same items found in fiscal
    year 1998.
        Question. Please prepare an updated table indicating the number of
    pipeline safety inspectors on board and the number of pipeline safety
    inspector positions authorized for each of the last three fiscal years.
    Please explain whether the number of authorized positions has or has
    not increased relative to congressional directives. If not, why not?
        Answer. The total number of filled inspector positions varies
    during the year due to personnel turnover and hiring of new inspectors.

                          NUMBER OF INSPECTORS ONBOARD
    ------------------------------------------------------------------------
                                                    Authorized/onboard
                     Region                 --------------------------------
                                              1997 \1\   1998 \1\   1999 \1\
    ------------------------------------------------------------------------
    Eastern................................        7/5        8/8        8/8
    Southern...............................        8/8        8/7        8/8
    Central................................      12/11      12/11      11/11
    Southwest..............................      11/11      11/11      12/12
    Western................................      13/13      13/13      12/12
                                            --------------------------------
          Total............................      51/48      51/50      51/51
    ------------------------------------------------------------------------
    \1\ These numbers do not include the Region Director or headquarter
      inspector positions that supply technical support to all five regions.
      We are currently in the process of hiring nine additional regional
      inspectors, two each in the Eastern, Southwest, Central Regions and
      three in the Western Region. These were included in the onboard
      numbers above. Some of the authorized inspector positions have been
      moved between regions and the headquarters technical support as part
      of a risk-based allocation effort.
    The number of authorized positions is consistent with congressional
      directives allowing for internal promotions and personnel turnover.

        Question. How many accident investigations were conducted during
    each of the last three fiscal years? Please include information on the
    number of follow-up accident investigations and the results.
        Answer.

                             ACCIDENT INVESTIGATIONS
    ------------------------------------------------------------------------
                                                     1996     1997     1998
    ------------------------------------------------------------------------
    Number of Investigations.....................       64       51       50
    Follow-up Investigations.....................       58       65       43
    Accident Reports Generated...................        6        5    \1\ 4
    ------------------------------------------------------------------------
    \1\ Additional reports are forthcoming.

                  damage prevention/public education campaign
        Question. Please describe what steps OPS has taken in considering
    commissioning production of a TV public service announcement for the
    national damage prevention campaign. What will the related costs be for
    such a PSA. Has OPS approached interested excavators and underground
    utility representatives about cost-sharing?
        Answer. The OPS Damage Prevention Quality Action Team (DAMQAT) has
    been considering commissioning a TV public service announcement (PSA).
    We have consulted with our advertising agency for the Dig Safely
    campaign who estimated that producing a TV PSA would cost between
    $50,000 and $100,000. We have also investigated the likelihood of
    getting air time since many PSAs compete for time on TV broadcast
    airwaves. We did commission a radio PSA for the pilot campaign which
    ran for six months in Virginia, Tennessee, and Georgia. Despite the
    best efforts of the public relations staff of our advertising agency,
    the PSA was only aired a handful of times.
        By contrast, print media for the campaign was highly successful.
    The staff of the advertising agency and members of the Damage
    Prevention Quality Action Team both recommended that the campaign focus
    on distribution of print media and the training video.
        OPS did approach excavators and underground utility representatives
    about sharing costs of the campaign. While these groups did provide the
    expertise of their staffs and paid their travel expenses, we were
    generally unable to generate funds from these sources for production
    purposes at this stage of the campaign. The American Petroleum
    Institute allocated $5,000 so the Office of Pipeline Safety could
    purchase rights to the art work that was produced for the Dig Safely
    campaign.
        OPS will revisit this issue following our public meeting scheduled
    for June 30, 1999, and a full consideration of next steps in public
    education among the entire utility industry, Federal and state
    governments. A commitment to a broadcast campaign will require a
    comprehensive and concerted effort of the utility industries and
    government to make use of and evaluate the effectiveness of the media
    materials.
        Question. To date, what has been the Damage Prevention Quality
    Action Team's assessment of its national education campaign? What
    improvements have been recommended?
        Answer. The Damage Prevention Quality Action Team (DAMQAT)
    conducted a six-month pilot campaign of its national education, Dig
    Safety, campaign materials from May through October 1998 in three
    states (Virginia, Tennessee and Georgia). The campaign elements
    included a training video, point of sale brochures, bill inserts, press
    kits and other print media as well as radio PSA's. Prior to the pilot,
    we conducted a survey to collect baseline data about damage prevention
    awareness and practices in the pilot states. After the pilot, a second
    survey was conducted to measure the impact of the campaign. The results
    far exceeded our expectations.
        We identified four key practices in damage prevention: call before
    you dig; wait the required time; respect the marks; and dig with care,
    i.e., hand dig around exposed facilities. Use of the first practice,
    call before you dig, was already quite high prior to the campaign, but
    still showed an increase. Use of the other three practices (wait the
    required time; respect the marks; and dig with care), increased
    dramatically, almost doubling in all three states. The post pilot
    survey indicated that all components of the campaign were very well-
    received. RSPA worked with the Associated General Contractors of
    America (AGC) to revise the video. Given the limited effectiveness of
    the radio PSA in reaching the target audience during the pilot, we have
    decided not to use it in the national campaign. The radio PSA ran only
    a few times due to intense competition for PSA air time. We will
    reconsider use of the PSA at a later time.
        Question. What is the status of your work regarding the ``best
    practices'' employed by one-call systems in operation in the states?
    How are you encouraging states to adopt those ``best practices?'' How
    much is planned for this activity in fiscal year 1999 and in fiscal
    year 2000? What are the total costs of this project?
        Answer. RSPA is working with 160 federal and state government and
    private sector experts to identify best practices in preventing damage
    to underground facilities. We have been presenting early concepts of
    best practices at national and regional meetings of professionals in
    the field. We will broadcast an interim report via satellite and
    Internet in early May. A public meeting is planned for June 1999 and
    the Team plans to complete its report to Congress by the end of June
    1999.
        We are also working with several constituencies, including state
    agencies to determine how best to ensure that the findings of this
    effort are understood and put to use. By Fall, we will be ready to
    execute the TEA-21 grants this fall to encourage implementation of best
    practices.
        We encourage States to adopt the best practices in damage
    prevention in several ways. First, we have enlisted their assistance in
    the best practices study. We have eleven State pipeline safety and
    highway organization representatives in various task teams. Their
    participation is key to the success of the best practices study, as
    well as promoting their understanding of other issues and interests in
    preventing damage to underground facilities.
        Second, we are looking forward to implementing the damage
    prevention grants authorized in TEA-21 in fiscal year 2000 and fiscal
    year 2001. At the June 30th meeting we will solicit input on the means
    to most effectively encourage adoption of best practices in one-call
    notification systems and other means of damage prevention.
        RSPA expects to spend $250,000 for the best practices study in
    fiscal year 1999. In fiscal year 2000, there are no planned
    expenditures for the best practices study. The budget calls for
    $1,000,000 for a damage prevention grant program to the States.
        Question. Since last year, what have you done to motivate states to
    improve their one-call notification systems and excavation damage
    prevention activities? How much is planned for that activity in fiscal
    year 2000?
        Answer. OPS made one-call grant funds available to States. For
    fiscal year 2000, OPS is requesting the same amount as last year, $1
    million in grant funds for State pipeline safety. For the past few
    years, many States have significantly improved their one-call
    notification systems and damage prevention activities by strengthening
    State one-call legislation, increasing enforcement efforts, and
    continuing public education. This considerable increase in one-call
    efforts has occurred since agency one-call program activities began.
        Since last year, State pipeline safety representatives were invited
    to serve on the damage prevention ``Best Practices'' study authorized
    by the Transportation Equity Act for the 21st Century (TEA-21). Through
    their participation, they are becoming more knowledgeable on how to
    improve and enhance all aspects of one-call system operations and how
    to minimize risks of third-party damage. We plan to conduct this
    separate grant program authorized under TEA-21 at the $1 million level
    in fiscal year 2000. This separate grant funding would improve
    operational efficiency of one-call systems, including marking,
    locating, planning and design activities and would support States
    electing to implement best practices developed by the damage prevention
    study.
        Question. What are your views on establishing a foundation to
    advance damage prevention activities and to continue the work and
    funding authorized by TEA-21 regarding damage prevention? Would it be
    appropriate for the Department to provide seed monies to help establish
    such a foundation? If so, how much would it cost to establish such a
    foundation? Would the private sector likely continue those activities
    once federal support ended?
        Answer. We expect, that when implemented, the recommendation of the
    One Call System Best Practices study (also known as ``Common Ground'')
    will greatly advance the effectiveness of national damage prevention
    efforts. The work of the Common Ground team has not only identified
    areas that require further investigation but has also highlighted the
    need for sustained efforts to encourage appropriate damage prevention.
    However, these efforts are beyond the scope of the grants program
    established by Congress in TEA-21.
        A foundation or other nonprofit organization may be an appropriate
    vehicle for finding and encouraging best practices. Maintaining a high
    level momentum in this initiative is central to the Department's
    strategy to achieve damage prevention and improve safety and
    environmental protection. Given the importance of these activities,
    resources could be allocated from within RSPA's Office of Pipeline
    Safety requested budget for fiscal year 2000 to stimulate the formation
    oif such an organization by providing ``seed'' resources for temporary
    executive staff or other related activities.
        Question. What is the status of your national one-call campaign?
    How would you evaluate the pilot tests? What lessons were learned?
        Answer. We have completed development of materials for the national
    Dig Safely campaign. We expect to launch the campaign in June 1999. The
    campaign included these elements: print media such as, point of sale
    brochures, bill inserts, press kits; a training video; and radio PSA's.
    The post pilot survey showed that the campaign materials were very
    effective. The OPS Damage Prevention Quality Action Team (DAMQAT) had
    identified four key damage prevention practices for protection of
    underground facilities: call before you dig; wait the required time;
    observe the marks; and dig with care, i.e., hand dig around exposed
    facilities. Use of call before you dig, i.e., one-call was already
    quite high prior to the campaign, but still showed an increase. Use of
    the other three practices increased dramatically, almost doubling in
    all three states. The post pilot survey indicated that all components
    of the campaign were very well-received. The Associated General
    Contractors of America (AGC) made recommendations to improve portions
    of the training video. We have worked with AGC to address these
    concerns. We have also decided not to use the radio PSA in the national
    campaign due to intense competition for available air time to runs PSAs
    limits their effectiveness. We will reconsider the use of PSA at a
    later time.
        Question. How did you use the additional funds provided last year
    to improve damage prevention programs. What would you do with
    additional funds if a similar increase were provided in that program
    for fiscal year 2000?
        Answer. Funds were allocated for production of additional campaign
    materials and revision of the training video. There is great variation
    in the sophistication of damage prevention programs conducted by one-
    call centers, public works departments, facility operators and
    excavators. Some were prepared to use the materials produced for the
    pilot; others needed help to implement the campaign. To address this
    issue, funds were used to produce a comprehensive training manual. The
    Office of Pipeline Safety will also conduct regional training sessions
    for all interested parties in the use of these materials. The first
    session is scheduled for May 20-21,1999, in Mobile, AL.
        Funds were also used to provide administrative support for meetings
    of the Damage Prevention Quality Action Team and to underwrite the cost
    of the One-Call Systems Best Practices Study, known as Common Ground.
    In particular, funding was used to facilitate the meetings of the many
    task teams investigating all damage prevention functions. Additional
    costs include assembling a broadcast production of a report on interim
    findings, a public meeting, and publishing a final report. This effort
    is identifying practices which are most effective in damage prevention
    and preventing disruption to services provided by underground
    facilities.
        Question. What was accomplished in the area of leveraging private
    sector funds and conducting a new joint public meeting with the NTSB on
    one-call systems? How are you working with NTSB to advance damage
    prevention strategies?
        Answer. Private sector funds are contributed by the various
    industry and government organizations participating in RSPA's damage
    prevention efforts including the Damage Prevention Quality Team and
    Best Practices Study Team. Each initiative involves planning for and
    attending meetings at locations around the country. Team members from
    private sector organizations travel at their own expense. In addition,
    several private sector organizations have hosted various meetings, and
    contributed to the costs of promotional items for the damage prevention
    campaign.
        RSPA continues to work with NTSB to improve pipeline safety by
    improving damage prevention to underground facilities. RSPA recently
    responded to 14 NTSB Safety Recommendations regarding damage prevention
    issues resulting from an NTSB Safety Study titled, ``Protecting Public
    Safety Through Excavation Damage Prevention.'' As required by the
    Senate Appropriations Committee Report for our fiscal year 1999 budget,
    RSPA is preparing a joint public meeting with NTSB, scheduled for June
    30, 1999. RSPA Administrator Kelley Coyner and National Transportation
    Safety Board Chairman James Hall are expected to participate in this
    meeting which will focus on national damage prevention efforts. The
    meeting agenda will include progress reports on:
      --the One-Call System/Best Practices Damage Prevention Study;
      --Damage Prevention Quality Action Team's work products;
      --the One Call Systems International (OCSI) ``call before you dig''
            decal program; and
      --the OCSI national 1-800-one-call number.
        An open discussion by attendees on next steps and comments on the
    implementation of the Damage Prevention Grant Program to States in
    fiscal year 2000 is expected.
        A Federal Register Notice concerning this meeting will be published
    in the near future.
        Question. What specific commitments for cost-sharing have you
    gotten from the private sector to help pay the one-call/damage
    prevention outreach effort? Please quantify cash and in-kind
    contributions.
        Answer. The private sector has contributed to the one-call damage
    prevention effort in many ways by providing staff experts to serve on
    the Damage Prevention Quality Action Team, meeting space and
    administrative support services, and by underwriting staff travel
    expenses for the past two and a half years. RSPA does not have a record
    of contributions in quantifiable terms. In addition, the groups
    represented on the Team have supported the effort by producing articles
    in association newsletters, promoting the campaign on their web sites
    and in speeches across the country. The Utility Protection Center of
    Georgia has paid for the production of promotion items for the
    campaign. Southwest Bell Corporation is also prepared to fund
    production of promotional items.
                            research and development
        Question. Which industries and research organizations have
    demonstrated an interest in partnering with OPS to advance pipeline
    locating and monitoring technologies? Do you have any firm cost-sharing
    commitments? How far do you anticipate being able to leverage the
    $450,000 in the fiscal year 2000 request?
        Answer. RSPA is exploring conducting research in the area of real-
    time monitoring for third-party damage with PRC International, the
    research organization administratively associated with the American Gas
    Association. PRC International represents both the oil and gas industry
    worldwide. Third-party damage is the leading cause of gas and hazardous
    liquid pipeline failures in the U.S.
        This would involve an innovative approach to contracting as the
    research would be co-funded by PRC International, ourselves, and other
    partners from the pipeline industry and perhaps other underground
    utilities. The funding level of each partner has not been established
    but the total project cost is likely to run in the multimillion dollar
    range. We would use our cooperative agreement authority to implement an
    agreement to conduct this proposed research. The research would first
    define the nature of the problem of third-party damage, identify
    technologies which could be explored, including past research
    conducted, and finally fund the development of one or two technologies
    identified. A comprehensive research proposal is being produced by PRC
    International with research scheduled to begin in fiscal year 2000. It
    is contemplated that the research would take five years to complete.
        In addition, we plan to commence a new initiative to identify and
    evaluate location equipment for buried plastic gas mains and service
    lines.
        Question. Please describe the progress made in your mapping
    initiative since last year. When will the project be completed? How
    much was appropriated and spent on this effort in fiscal years 1997 and
    1998 and planned for fiscal years 1999 and 2000? What are the remaining
    challenges? Will there be a need for funding over the long-term?
        Answer. Over the past year, RSPA and the Joint Government/Industry
    Pipeline Mapping Quality Action Team (MQAT) have created, pilot tested,
    and revised the standards, computer templates, and model for the
    National Pipeline Mapping System (NPMS). Two Commerce Business Daily
    Announcements were published to determine which State agencies and
    pipeline mapping vendors are interested in, and qualified to become,
    State repositories and the National repository. Contracts were awarded
    to nine state repositories (Texas, Kansas, Louisiana, Minnesota,
    Oklahoma, California, Kentucky, New Jersey, and Pennsylvania) and the
    NPMS National Repository. These repositories are now operational.
        RSPA, the American Petroleum Institute, the Interstate Natural Gas
    Association of America, U.S. Geological Survey, Department of Energy,
    and Federal Energy Regulatory Commission held five public workshops on
    the NPMS in Houston, TX; Chicago, IL; and San Francisco, CA;
    Washington, D.C.; and New Orleans, LA. RSPA also held a repository
    workshop to familiarize state repositories with the revised standards
    and to discuss outstanding issues. RSPA created and released a mapping
    video to familiarize pipeline operators, Federal and state agencies,
    private industry, and the public on our mapping initiative.
        RSPA met with EPA Region 5 to discuss a joint mapping effort of
    hazardous liquid pipelines and EPA has agreed to collect and help fund
    this initiative. RSPA has discussed similar efforts with the Department
    of Defense.
        RSPA and MQAT have also developed a rollout implementation strategy
    for the NPMS. RSPA, the American Petroleum Institute, and the
    Interstate Natural Gas Association of America will send notices to
    pipeline operators by May asking them to submit pipeline data. We will
    target the interstate and larger intrastate operators first.
        $400,000 was appropriated in fiscal year 1997 and 1998. This money
    has been spent on accomplishing the items listed above. $800,000 was
    appropriated in fiscal year 1999 and the same amount was requested for
    fiscal year 2000. RSPA will use this money to collect and process
    pipeline and liquefied natural gas facility data. RSPA expects to
    complete 70 percent of the NPMS by the end of the year 2000. Remaining
    challenges include creating a seamless pipeline map from the multitude
    of pipeline data that operators have in various formats, sustaining
    communication between the repositories and EPA to avoid multiple
    requests for the same data and duplication of effort, and working with
    the states and other agencies that have already obtained pipeline data
    to use these data to the extent possible.
        RSPA anticipates that additional funds will be needed in the future
    to update and maintain the NPMS.
        Question. What progress has been made on the memorandum of
    understanding (MOU) with the Gas Research Institute in nondestructive
    evaluation technology? What are the accomplishments to date on this
    partnership? Are there any unobligated balances? What are the
    challenges associated with this cooperative research?
        Answer. The laboratory work has revealed a multilevel magnetization
    signal is needed to fully characterize the two components of mechanical
    damage, which is the change in pipe geometry and changes in the
    properties of the pipe metal resulting from mechanical damage. A
    procedure to distinguish the difference using the multiple
    magnetization level approach has been proven. This work may allow a
    mechanical damage detection capability to be added to existing
    corrosion pigs. If testing, to be completed in fiscal year 1999 at the
    Gas Research Institute's Pipeline Simulation Facility, located near
    Columbus, Ohio, proves this concept in actual pigs, only one pig survey
    would be needed to identify corrosion and mechanical damage in
    operating pipelines. In fact, a domestic pig vendor, Tuboscope Vetco
    Pipeline Services, is assembling a mechanical damage pig using data
    obtained as a result of this research.
        Since completing its report on magnetic measurements in March 1998,
    the research team has begun to determine the effects of pipe stress and
    mechanical damage on the magnetic fields induced in the pipe wall by
    magnetic flux leakage pigs. A number of advanced engineering approaches
    have been used, including finite element analysis of manufactured dents
    and gouges in a 24-inch pipe. The research team continues to evaluate
    alternative methods of classifying and characterizing mechanical damage
    using neural networks and nonlinear harmonics.
        At the Pipeline Simulation Facility, the research team upgraded the
    pig that serves as the Test Bed Vehicle with state-of-the-art sensors
    and a new data acquisition system, and has upgraded the magnetizers to
    produce higher magnetization levels. The team has fabricated 38
    controlled dents, scrapes, and gouges that simulate real-world pipe
    conditions, including some that resemble pipe damage from backhoes and
    other construction equipment. These are being used for testing the
    instrumented pig.
        A final report on the first two years of the project has been
    completed and is available on the Office of Pipeline Safety's Internet
    web site, http://ops.dot.gov.
        RSPA has obligated all prior year funds for this research.
        Comprehensive characterization of mechanical damage due to
    examination with the magnetic flux produced only along the pipe's
    longitudinal axis is a challenge in this current research. A project to
    include examination with the magnetic flux along the pipe's
    circumference also is being considered for additional funding in fiscal
    year 2000. Because of possible funding limitations for the
    circumferential analysis, we decided to seek co-funding from our
    industry partners. GRI agreed to co-fund the circumferential analysis.
    We received a proposal from GRI dated March 8 to conduct the study and
    are presently analyzing the proposal.
                                     grants
        Question. For fiscal year 1998 and 1999, please list the states
    that participated in your hazardous liquids and natural gas state grant
    programs. For each participating state, display the amount requested by
    state, the amount of federal grant funds received, and the percentage
    of federal contribution to total costs represented by that grant. What
    efforts were taken to increase participation in the grant program?
        Answer. Attached are the allocations for fiscal year 1998. As soon
    as the allocations for fiscal year 1999 are complete, we will forward
    them to the Congress.
        RSPA has encouraged further intrastate jurisdiction and
    improvements to state one-call damage prevention programs. In addition,
    RSPA has enhanced participation by the states on risk management and
    industry committee meetings-all of which increase the amount of money
    available to the states.
        Question. RSPA and the states have agreed to attempt to provide 50
    percent of the states' pipeline safety program funding from the federal
    government. As an aggregate, what percent of the states' pipeline
    safety program funds were appropriated through the OPS state grant
    program in fiscal years 1997, 1998, and 1999?
        Answer. The funding level for fiscal years 1997 and 1998 were 44
    percent and 41 percent. The funding level for fiscal year 1999 will be
    42 percent.
        Question. Part of the original justification for the increase in
    the pipeline grant program was that with increased funds the states
    would be encouraged to expand their enforcement responsibilities.
    Please provide quantitative data on a state-by-state basis indicating
    whether that has happened.
        Answer. The states have expanded their enforcement jurisdiction in
    the past few years by adding new intrastate gas and liquid programs and
    new areas of Municipal, LPG or master meter operators jurisdiction in
    their particular state and enhanced one-call compliance.
        Question. Please provide an assessment of your monitoring of the
    state grant program. How has OPS improved various state programs?
        Answer. Field evaluation scores and other performance measures are
    used to determine the grant allocation for each State. Each year, OPS
    evaluates the states pipeline safety programs based on current
    performance measures. OPS monitors state inspections to ensure that the
    Pipeline Safety Regulations are being appropriately enforced. The
    annually submitted State certifications contain data on such factors as
    adequacy of one-call efforts, field inspection days, the number of
    regulations adopted, and inspector qualification.
        Over the last five years, OPS has taken steps to improve our
    oversight of the state pipeline safety programs including the full-time
    designation of an inspector in each region office to monitor and
    evaluate their activities.
        These inspectors, the state liaison representatives, have worked
    together to improve the monitoring and evaluation process so that areas
    of needed improvement can be more readily identified and corrected.
    When OPS identifies a potential weakness in a state pipeline program,
    we work closely with the program manager to correct the circumstances
    and provide technical support.
        Question. How are the states using funds for risk management and
    assessment activities? What challenges do the states face and how is
    OPS providing technical assistance?
        Answer. The states may draw on $500,000 in Risk Management Grants
    to participate in the evaluation and monitoring of risk management
    projects, and related support initiatives such as communications,
    training associated with risk analysis and risk control decision
    making, developing and tracking performance measurement, damage
    prevention evaluation and improved mapping of pipeline location and
    environmental factors. State participation brings the most site-
    specific, geographic, and socioeconomic information into the risk
    evaluation process.
        To ease some of the challenges states face participating in a new
    regulatory approach, RSPA factored state concerns into the development
    of protocols, evaluation criteria, and other program elements. RSPA
    includes states in briefings provided to staff before meetings with
    demonstration companies to provide them with current information. RSPA
    also includes affected states in the same risk-related training
    activities it provides for its own staff.
        Question. In the fiscal year 1999 transportation appropriations
    Omnibus, the conferees appropriated $1,000,000 to be made available for
    one-call grants to states. How much was requested by the states in
    fiscal year 1999?
        Answer. Thirty-three states requested a total of $1,482,800 for
    one-call grants.
        Question. Please update past data provided on the status of one-
    call systems, their completeness, effectiveness, legislative status,
    and enforcement capabilities of the states. How many, and which, states
    have utilized one-call grant funds to establish one-call programs?
        Answer. Within the past four years, sixteen States have passed or
    improved one-call legislation: Kentucky, Montana, North Dakota,
    Nebraska, New Mexico, New York, Oregon, Puerto Rico, South Dakota,
    Tennessee, Texas, Utah, Virginia, Washington, West Virginia and
    Wyoming. Since the incident in San Juan, Puerto Rico in 1996, we have
    been working closely with Puerto Rico (PR) for legislation to create a
    one-call center. This legislation was passed in September 1998. There
    is also a growing number of States with a strong one-call enforcement
    mechanism (Arizona, Connecticut, Massachusetts, Minnesota, New
    Hampshire, New Jersey, Tennessee, and Virginia) that include:
      --A specific agency with jurisdiction over excavators and facility
            operators
      --Authority to issue immediate citations and the power to collect
            penalties
      --Administrative encouragement and staff assigned to enforce the law.
        Eleven States do not require all underground facility operators to
    belong to one-call organizations. We expect several state legislatures
    to enact or modify one-call legislation for this purpose.
        More than 30 States have emergency service available on a 24-hour
    basis. In States without 24-hour emergency service, excavators have to
    notify operators of impending excavation after business hours.
        OPS also utilizes one-call grant funds to support States to
    establish one-call programs. This past year, the following 31 State
    programs have requested one-call grants to further one-call activities:
    Alabama, Arizona, Arkansas, California, Colorado, Connecticut,
    Delaware, Georgia, Illinois, Kansas, Kentucky, Louisiana, Michigan,
    Mississippi, Montana, Nevada, New Jersey, New York, North Carolina,
    North Dakota, Ohio, Pennsylvania, Rhode Island, South Carolina, South
    Dakota, Tennessee, Texas, Utah, Vermont, Virginia, and Washington.
        Question. OPS is requesting to use $1,000,000 of fiscal year 2000
    funds for damage prevention improvement grants. Will those funds be
    obtained from general revenues? How will that grant program be
    coordinated with other similar OPS and private sector activities?
        Answer. RSPA proposes to use pipeline safety user fees to finance
    damage prevention improvement grants. Reducing outside force damage has
    long been our top ranked solution to improve pipeline safety. The
    expenditure of pipeline safety user fees for the purpose of promoting
    best practices to prevent damage to pipelines is consistent with RSPA's
    priorities.
        We will be announcing a public meeting on June 30, 1999, to solicit
    input on criteria for award of the Damage Prevention Improvement Grants
    and on the means to most effectively encourage adoption of best
    practices in one-call notification systems and other means of damage
    prevention. We also will enlist the help of the Grant Allocation
    Committee of the National Association of Pipeline Safety
    Representatives in integrating state pipeline program activities to
    improve damage prevention efforts.
                  volpe national transportation systems center
        Question. For fiscal year 1997 and fiscal year 1998, what percent
    of funds were contracted out? For fiscal year 1999 what percent of
    funds do you plan to contract out?
        Answer. For fiscal years 1997 and 1998 about 76 percent and 77
    percent percent, respectively, of the Center's obligations were
    contracted to the private and university sectors. The percentage is
    expected to remain stable for fiscal year 1999.
        Question. What percent of your personnel costs are for contract
    administration, technical program direction, and in-house research?
        Answer. About 4 percent of personnel costs are for contract
    administration. About 70 percent is tied to specific technical project
    work, including both technical direction and technical performance. No
    funds or staff were devoted to in-house research (i.e. independent
    research and development not tied to a client project) in fiscal year
    1998 and none is planned for fiscal year 1999-2000. The remaining 26
    percent of personnel costs covers facility operations, staff
    development, stakeholder reporting, managerial process improvements,
    and outreach.
        Question. In which areas do you propose to use the additional FTE?
        Answer.

                   VOLPE CENTER FTE CORE TECHNICAL SKILL AREAS
    ------------------------------------------------------------------------
                                                               Fiscal year
                                                                 request
                                                           -----------------
                                                              1999     2000
    ------------------------------------------------------------------------
    System Planning, Analysis & Simulation................      160      166
    Vehicle Guideways & Terminals.........................       45       46
    Communication, Navigation & Surveillance..............       56       59
    Information System Engineering........................       85       89
    Human Factor..........................................       10       12
    Environmental Analysis & Engineering..................       41       45
    Transport System Security.............................       15       19
    Administration & Clerical.............................      114      114
                                                           -----------------
          Total...........................................      526      550
    ------------------------------------------------------------------------

        Question. Please break out, in tabular form, obligations by each of
    the DOT modal administrations to the Volpe Center for each of the last
    three fiscal years. What is the significance of these funding trends?
        Answer. The following table shows obligations of DOT Modal
    Administrations to the Volpe Center in millions of dollars.

    ------------------------------------------------------------------------
                                                          Fiscal year
                                                  --------------------------
                                                                       1999
                                                     1997     1998    (est)
    ------------------------------------------------------------------------
    FAA..........................................     85.1     84.5     85.6
    FHWA.........................................     13.9     11.8     12.0
    USCG.........................................      7.4      6.8      7.5
    FRA..........................................      9.6     10.9     11.5
    FTA..........................................      4.8      7.5      7.8
    NHTSA........................................      8.5      8.8      9.0
    RSPA.........................................      6.4      6.6      6.7
    OTHER DOT....................................      2.5      2.3      2.4
    OST..........................................      1.0      2.6      0.8
                                                  --------------------------
          Total..................................    139.2    141.8   143.3
    ------------------------------------------------------------------------
    Note: Each amount includes that customer's participation in DOT's SBIR
      program, which the Volpe Center manages.

        The trends generally reflect changes in our customers' program
    emphasis or changes to DOT's appropriations.
        Question. What are the performance goals and measures related to
    service delivery at Volpe? How have you done so far? What are the key
    challenges that remain?
        Answer. There are 10 Volpe Center service delivery measures:
      --Project Initiation
      --Project Definition
      --Administrative Process of Project Definition (Start Work)
      --Availability of Staff
      --Competence of Staff
      --Working Relationships
      --Project Management
      --Content & Quality of Deliverables
      --Best Value
      --Overall Satisfaction
        The goal is to have an accurate, multi-dimensional understanding of
    Center customers views to facilitate continual improvement in overall
    service delivery. Results to date, shown graphically below, indicate
    this goal is being achieved.
    [GRAPHIC] [TIFF OMITTED] TSM.009

        These formal measurements are taken through structured interviews
    with each Center customer every two years. The Center is midway through
    the second cycle of interviews.
        The challenge is to continue to improve given the excellence of
    results already achieved.
        Question. Please prepare a table showing the percent of the Volpe
    work that has been conducted for non-DOT agencies for each of the last
    four years.
        Answer. The following table shows Volpe Center Obligations for Non-
    DOT Agencies.

                                [In percentages]
    ------------------------------------------------------------------------
                                                          Fiscal year
                                                 ---------------------------
                                                                        1999
                                                   1996   1997   1998  (est)
    ------------------------------------------------------------------------
    DOD.........................................     12     12     10     12
    Other Non-DOT...............................     16     20     18     18
                                                 ---------------------------
          Total.................................     28     32     28     30
    ------------------------------------------------------------------------

        Question. What are the Volpe overhead charges and how have you
    tried to reduce these charges? Please provide a detailed explanation
    and dollar figures of all overhead costs for each of the last three
    fiscal years.
        Answer. Following is the distribution of the Center's indirect
    expenses (in millions of dollars obligated):

    ----------------------------------------------------------------------------------------------------------------
                                                                                        Fiscal year
                            Indirect Activity                        -----------------------------------------------
                                                                           1997            1998         1999 (est)
    ----------------------------------------------------------------------------------------------------------------
    Facility Operations.............................................             4.5             3.4             3.7
    Business Services...............................................             8.3             9.8             9.5
    Line Management.................................................             2.5             2.5             2.5
    Center-wide Services............................................             1.2             1.5             1.8
    Computer & LAN Services.........................................             2.3             3.8             3.3
    Industry Outreach...............................................             0.4             0.3             0.3
    Capability Development..........................................             0.3             0.3             0.5
    Plans & Pgm Development.........................................             0.8             0.9             1.2
    Chief Counsel...................................................             0.6             0.3             0.3
    Executive Management............................................             0.6             1.0             1.0
                                                                     -----------------------------------------------
          Total Indirect............................................           $21.5           $23.8           $24.1
          Total Obligations \1\.....................................          $204.3          $196.1          $197.0
          Indirect to Total.........................................            10.5            12.1           12.2
    ----------------------------------------------------------------------------------------------------------------
    \1\ Net of recoveries of prior year obligations.

        The estimated fiscal year 1999 indirect expenses reflect increases
    for salaries, benefits, negotiated contract price adjustments and other
    normal cost growth plus an amount for depreciation of prior year
    capital investments and increased investment in staff training and
    recruitment. Increases have been partially offset by continuing cost
    reduction efforts with major emphasis on process simplification,
    improved automation and introducing current energy conservation
    technology.
        Question. Please provide a detailed listing of all fiscal year 1998
    and fiscal year 1999 new start reimbursable agreements that the Volpe
    Center has with other Federal agencies. Include all costs that are paid
    out to contractors hired by the Volpe Center.
        Answer.
    Fiscal year 1998
                Planned Digital Video Storage System, DOD Air Force, $90
                        Thousand, 72 percent.
        The Volpe Center will assess and evaluate state of the art security
    and digitized video technology. Tasks include: review and validation of
    design documentation, evaluate options for interface/integration at
    Eglin AFB, FL.
                Aircraft Noise Prediction Model Support, NASA Langley,
                        $24.3 Thousand, 0 percent.
        Support will be provided in the area of improved aircraft noise
    prediction algorithms. Technical support involves a comprehensive
    field-noise measurement program to take place in the vicinity of Logan
    International Airport, followed by subsequent laboratory data reduction
    and analysis to produce improved noise propagation algorithms for
    inclusion in aircraft noise prediction models.
                Transportation and Organizational Systems Support, DOI/NPS,
                        $30 Thousand, 0 percent.
        Develop and implement a water transportation plan for Boston
    Harbor. This will involve working to help clarify and work through
    critical water transportation issues; assist in writing the water
    transportation portion of the master plan for Boston Harbor.
                Organizational Systems Support, EPA/OSEC, $20 Thousand, 0
                        percent.
        Provide organizational systems support to EPA/OSEC in its South
    Florida Urban Initiative, an EPA project intended to complement a
    federal-state-local partnership currently working to restore the
    Everglades ecosystem. A major thrust of these efforts is to redirect a
    substantial portion of the region's future population growth away from
    the region's remaining ecologically sensitive resources. Viable
    solutions must include and address a broad range of transportation
    issues.
                Support to EPA/Office of Information Resources Management,
                        EPA/ORIM, $200 Thousand, 0 percent.
        Assist OIRM in moving toward a more strategic use of information
    technologies in accomplishing its core missions, tasks significantly
    influenced by transportation systems infrastructure and operation.
                NRC Transportation Survey Of Radioactive Material, NRC, $35
                        Thousand, 0 percent.
        The Volpe Center will identify and compile existing sources
    describing nuclear materials movements in the U.S. The Center will also
    conduct all of the tasks necessary to develop and pre-test a data
    collection instrument for nuclear materials movements that cannot be
    tracked through government or publicly available data sources.
                Coast Guard Polar Research vessel (CGC Healy), USCG, $100
                        Thousand, 80 percent.
        Restructure the configuration data received with the new Coast
    Guard Polar Research Vessel (CGC Healy) from the Navy's Real-time
    Outfitting Management System (ROMIS) format to the USCG's CMPlus data
    format. CMPlus was developed, and is being implemented, by the Volpe
    Center for the USCG. Fiscal year 1999
                Aviation Mail Hazmat Support Services, USPS, $1.6 Million,
                        40 percent.
        The Volpe Center will support the Aviation Mail Security group by
    assisting in the planning, development, and implementation of policies
    and training supporting HAZMAT acceptance, handling, transportation,
    and delivery.
                EPA, Region 8 Site Assessment and Remediation, EPA, $1.5
                        Million, 68 percent.
        To provide environmental support services in the assessment,
    design, remediation, restoration and oversight of contaminated sites in
    Region 8.
        Question. The Committee has been concerned that almost all of the
    funds provided for RSPA's research and technology activities were being
    allocated to the Volpe Center or to the Transportation Research Board.
    Please provide quantitative evidence that you have expanded the
    universe of companies and institutions participating in your contract
    program.
        Answer. In fiscal year 1999, the RSPA research and technology
    activities have or will fund the following organizations or contractors
    to assist it in supporting the strategic planning process for Federal
    transportation R&D and the Department's technology transfer program,
    and to maintain the Department's membership on various roundtables and
    conferences:

    STRATEGIC PLANNING:                                     Fiscal year 1999
        Volpe Center..............................................  $550,000
        National Research Council/Transportation Research Board
          (TRB)...................................................   100,000
        Civil Engineering Research Foundation.....................    50,000
        National Science Foundation...............................    50,000
        Library of Congress.......................................    50,000
        National Research Council/Standing Committee to Review the
          Research Program of the Partnership for a new Generation
          of Vehicles.............................................    50,000
    RESEARCH AND TECHNOLOGY COORDINATION AND PARTNERSHIPS:
        Volpe Center..............................................   810,000
        Council on Competitiveness................................    50,000
        TRB (RSPA Annual Fee).....................................    50,000
        National Academy of Sciences Government-University-
          Industry Research Roundtable............................   125,000
        DOE Office of Scientific and Technical Information (R&D
          Track-
          ing)....................................................   100,000
        Arrowhead Space and Telecommunications (Technology
          Sharing/Technology Transfer)............................   100,000
    INTERMODAL AND MULTI-MODAL RESEARCH AND EDUCATION: Small
        Business Innovation Research Program......................   150,000

        Question. Who are the new registrants that will be impacted by
    RSPA's proposed rulemaking to change the Registration program fee
    structure?
        Answer. The new registrants that would be impacted by RSPA's
    proposed rule are persons that offer or transport shipments of
    hazardous materials that require placarding. These persons primarily
    include companies that offer or transport hazardous materials in (a)
    bulk containers with capacities less than 3,500 gallons or less than
    468 cubic feet, or (b) other than bulk containers in shipments of
    between 1,000 and 5,000 pounds. Please refer to the discussion on page
    18791 of the Notice of Proposed Rulemaking (NPRM) published in the
    Federal register on April 15, 1999 (attached).
        Question. What efforts has RSPA made to fully enforce the current
    rule?
        Answer. RSPA, other DOT administrations, and state and local
    enforcement offices share the responsibility of enforcing the Hazardous
    Materials Regulations. All of these conduct compliance inspections to
    determine compliance with all aspects of the regulations, including the
    registration requirements. FHWA conducts about 2,000 inspections of
    hazmat trucking companies annually; RSPA conducts about 1,000
    inspections of hazmat shipping companies. Results of these enforcement
    efforts indicate a compliance rate of over 95 percent. We believe that
    compliance among other modes is similarly high. Additional information
    is contained in the discussion on pages 18789-90 of the NPRM
    (attached).
        RSPA also conducts extensive outreach to inform the hazardous
    materials community of the registration requirements. Last year, RSPA
    mailed registration information to approximately 48,500 companies. RSPA
    has increased its follow-up mailings to companies previously registered
    or newly identified as possible registrants. These actions identified
    approximately 1,000 new registrants and raised an additional $500,000,
    including collections from prior years.
        Question. Will RSPA be able to collect $14.3 million by the end of
    fiscal year 2000?
        Answer. We will complete the steps necessary for this rulemaking as
    expeditiously as possible. If, after review of comments, we adopt the
    proposed rule, then we will conduct a public information program to
    inform the regulated community of the changes in the regulations. If
    the proposed rule is adopted in time to be implemented for the 2000-
    2001 registration year, we expect to begin collection of fees at the
    higher rate before the end of fiscal year 2000.
        Question. Please estimate the amount of registration fees that the
    following companies would be required to pay under the proposed rule:
    Davidson Oil Company, Cooper Oil Company, Allen Companies, Max Oil
    Company, and Morgan Oil Company. How is this fee determined?
        Answer. We have proposed a two-tiered fee schedule, as discussed on
    page 18791 of the April 15, 1999 NPRM (attached). A small business, as
    defined by the Small Business Administration's (SBA) criteria, would
    pay a the minimum fee of $300. A company which is not a small business
    would pay the maximum fee of $2,000. The SBA criteria for a small
    business for retail fuel oil dealers (SIC 5983) is gross annual revenue
    of less than $9.0 million. The companies identified above are retail
    fuel oil dealers (SIC 5983), but RSPA has no information on the annual
    gross income of these specific companies. Therefore, we cannot
    determine the amount of their fee.

                   [From the Federal Register, Apr. 15, 1999]

     part iv--department of transportation, research and special programs
                                 administration
     49 cfr part 107--hazardous materials transportation; registration and
                     fee assessment program; proposed rule
               [docket no. rspa-99-5137 (hm-208c)], rin 2137-ad17
        AGENCY: Research and Special Programs Administration (RSPA), DOT.
        ACTION: Notice of Proposed Rulemaking (NPRM).
        SUMMARY: RSPA is proposing changes to the current registration and
    fee assessment program for persons who transport or offer for
    transportation certain categories and quantities of hazardous
    materials. The proposed changes would increase the number of persons
    required to register and increase the annual registration fee for
    shippers and carriers who are not a small business under Small Business
    Administration criteria. The proposed changes are intended to raise
    additional funds to enhance support for the national Hazardous
    Materials Emergency Preparedness Grants Program.
        DATES: Written Comments: Comments must be received on or before
    June 14, 1999.
        Public Meeting Date: A public meeting will be held on May 25, 1999;
    from 9:00 a.m. to 4:00 p.m. An additional meeting may be scheduled if
    there is substantial interest.
        ADDRESSES: Written Comments: Address comments to the Dockets Unit,
    U.S. Department of Transportation, Room PL 401, 400 Seventh St., SW,
    Washington, DC 20590-0001. Comments should identify the docket number
    RSPA-99-5137 (HM-208C) and should be submitted in two copies. Persons
    wishing to receive confirmation of receipt of their comments should
    include a self-addressed stamped postcard. Comments may also be
    submitted by e-mail to: http://dms.dot.gov, or by fax to (202) 366-
    3753. The Dockets Unit is located on the Plaza Level of the Nassif
    Building at the U.S. Department of Transportation at the above address.
        Public dockets may be viewed between the hours of 10:00 a.m. and
    5:00 p.m., Monday through Friday, except Federal holidays. Internet
    users may access all comments and related background materials by using
    the Universal Resource Locator (URL) http://dms.dot.gov. An electronic
    copy of this document may be downloaded using a modem and suitable
    communications software from the Government Printing Office Electronic
    Bulletin Board Service at (202) 512-1661.
        Public Meeting: The public meeting will be held in room 3200-3204
    at the U.S. Department of Transportation's Nassif building, 400 Seventh
    Street SW, Washington, DC 20590.
        FOR FURTHER INFORMATION CONTACT: Mr. David Donaldson, Office of
    Hazardous Materials Planning and Analysis, (202) 366-4484, or Ms. Jodi
    George, Office of Hazardous Materials Standards, (202) 366-8553, RSPA,
    Department of Transportation, 400 Seventh Street SW, Washington, DC
    20590-0001.
                           supplementary information:
    I. Background
    A. Current Registration Program
        In 1990, amendments to Federal hazardous materials transportation
    law, now codified at 49 U.S.C. 5101 et seq. (the law), required the
    Secretary of Transportation to establish a registration program. The
    Secretary delegated this authority to the Administrator, Research and
    Special Programs Administration (RSPA). 49 CFR 1.53(b)(1). The purpose
    of the registration program is to gather information about the
    transportation of hazardous materials and to fund a grants program to
    support hazardous materials emergency response planning and training
    activities by State and local governments. Under 49 U.S.C. 5108, each
    person who transports or causes to be transported in commerce one or
    more of the categories of hazardous materials listed below must file a
    registration statement with RSPA and pay an annual registration fee:
        (1) A highway-route controlled quantity of Class 7 (radioactive)
    materials;
        (2) More than 25 kilograms (55 pounds) of a Division 1.1, 1.2, or
    1.3 (explosive) material in a motor vehicle, rail car, or freight
    container;
        (3) A package containing more than one liter (1.06 quarts) of a
    hazardous material the Secretary designates as extremely toxic by
    inhalation, which has been identified as a material meeting a criterion
    of a Zone A material that is toxic by inhalation;
        (4) A hazardous material in a bulk packaging, container, or tank if
    the packaging, container, or tank has a capacity equal to or greater
    than 13,248 liters (3,500 gallons) or more than 13.24 cubic meters (468
    cubic feet); or
        (5) A shipment in other than a bulk packaging of 2,268 kilograms
    (5,000 pounds) or more of a class of hazardous materials for which
    placarding of a vehicle, rail car, or freight container is required.
        In addition, 49 U.S.C. 5108(a)(2) permits RSPA to require
    registration by each person who:
        (1) Transports or causes to be transported hazardous material in
    commerce but does not engage in the activities listed above; or
        (2) Manufactures, fabricates, marks, maintains, reconditions,
    repairs, or tests packagings that the person represents, marks,
    certifies, or sells for use in transporting in commerce hazardous
    materials.
        Section 5108(g) allows RSPA to set the registration fee at an
    amount between $250 and $5,000, based on one or more of the following
    factors:
        (1) The gross revenues from the transportation of hazardous
    materials;
        (2) The types of hazardous materials transported or caused to be
    transported;
        (3) The quantities of hazardous materials transported or caused to
    be transported;
        (4) The number of shipments of hazardous materials;
        (5) The number of activities which a person carries out for which
    filing a registration statement is required;
        (6) The threat to property, individuals, and the environment from
    an accident or incident involving the hazardous materials transported
    or caused to be transported;
        (7) The percentage of gross revenues which are derived from the
    transport of hazardous materials;
        (8) The amount of funds which are made available to carry out the
    emergency response planning and training grants program; and
        (9) Such other factors RSPA considers appropriate.
        Section 5108(i)(2) specifically excepts the following persons from
    the registration requirements:
        (1) A department, agency, or instrumentality of the United States
    Government;
        (2) An authority of a State or political subdivision of a State;
        (3) An employee of a department, agency, instrumentality, or
    authority carrying out official duties; and
        (4) An employee of a hazmat employer, which for the purposes of
    registration includes the owner-operator of a motor vehicle that
    transports in commerce hazardous materials, if that vehicle at the time
    of those activities, leased to a registered motor carrier under a 30-
    day or longer lease as prescribed in 49 CFR part 376 or an equivalent
    contractual agreement.
        Section 5108(a)(4) permits RSPA to waive the registration
    requirements for a person not domiciled in the United States that
    solely offers hazardous materials for transportation in commerce to the
    United States from a place outside the United States if the country of
    which such person is a domiciliary does not require persons domiciled
    in the United States who solely offer hazardous materials for
    transportation to the foreign country from places in the United States
    to file registration statements, or to pay fees, for making such an
    offer. In 1995, this exception for foreign offerors was incorporated
    into the regulations at 49 CFR 107.606(a)(6).
        In establishing the registration program, RSPA chose to require
    registration by only those persons under a statutory obligation to
    register and to impose the minimum $250 fee on those persons, plus an
    additional fee, currently set at $50, to pay for the costs of
    processing the registration statements, as authorized by 49 U.S.C.
    5108(g). All registrants pay the same registration fee, regardless of
    their size, their income, or the extent to which they engage in
    hazardous materials transportation activities.
        The current regulations, in Sec. 107.608(a), require the annual
    submission of a registration statement. Section 107.620 requires each
    registrant to maintain a copy of its registration statement and the
    certificate of registration issued by RSPA at its principal place of
    business for three years. In addition, each highway carrier and vessel
    operator is required to keep a copy of the current registration
    certificate or another document bearing the registration number on
    board each vehicle or vessel carrying the types and quantities of
    hazardous materials that require registration.
        In each of the seven years since 1992, when offerors and
    transporters were first required to register, RSPA has received
    approximately 27,000 registration statements and an average of $6.9
    million to support the HMEP Grants Program.
    B. Hazardous Materials Emergency Preparedness (HMEP) Grants Program
        1. Purpose and Achievements of the HMEP Grants Program
        The HMEP Grants Program, as mandated by the law, establishes a role
    for the Federal government in providing financial and technical
    assistance, national direction, and guidance to enhance State, local,
    and tribal hazardous materials emergency planning and training. The
    HMEP Grants Program is designed to build upon existing programs and to
    support the working relationships within the National Response System
    and the Emergency Planning and Community Right-To-Know Act of 1986
    (Title III). 42 U.S.C. 11001 et seq. The grants are used to develop,
    improve, and implement emergency plans, to train public sector
    hazardous materials emergency response employees to respond to
    accidents and incidents involving hazardous materials, to determine
    flow patterns of hazardous materials within a State and between States,
    and to determine the need within a State for regional hazardous
    materials emergency response teams.
        The grants program was designed to encourage the growth of
    hazardous materials planning and training programs of State, local and
    tribal governments. To ensure this growth, Sections 5116(a)(2)(A) and
    5116(b)(2)(A) of the law require a State or Native American tribe
    applying for grants to certify that the amount it expends on hazardous
    materials planning and training, not counting Federal funds, will at
    least equal the average amount spent for these purposes during the last
    two fiscal years. The HMEP grants therefore represent additional funds
    that supplement the amount already being provided by the State or
    tribe. To further encourage growth in planning and training funds,
    Section 5116(e) limits the Federal share of the costs of the additional
    activity for which the grants are made to 80 percent, thus requiring
    the State or tribe to provide 20 percent of these additional costs. By
    accepting an HMEP grant, the State or tribe commits itself not only to
    maintaining its previous level of support, but increasing that level by
    an amount representing 20 percent of the funds newly expended on grant-
    supported activities each year. For example, an HMEP grant of $100,000
    requires an additional commitment of $25,000 in State or tribal funds
    over the average amount expended by the agency during the previous two
    years. These additional State or tribal funds may be provided in the
    form of direct fiscal support or through the provision of in-kind
    resources.
        Effective responses to hazardous materials incidents depend on the
    extent and quality of planning and training. Generally, a State
    Emergency Response Commission (SERC) coordinates the activities of the
    Local Emergency Planning Committees (LEPCs). The nation's more than
    3,000 LEPCs prepare and, in the case of an emergency, implement
    emergency plans that delineate how responders coordinate activities at
    the scene of an incident. Emergency plans include: (1) commodity flow
    studies to determine the materials most likely to create an emergency;
    (2) exercise plans to test the effectiveness of emergency response; and
    (3) training requirements for responders. RSPA awards grants to
    agencies designated by a State or territorial Governor or tribal
    leader. These agencies are primarily emergency response and
    environmental protection agencies and Native American tribal
    governments. The designated agency distributes funds within the State,
    territory, or Native American tribe in accordance with HMEP grant rules
    and required certifications. Each grant is made in two portions. Under
    49 U.S.C. 5116(a), the first portion of grant funds is awarded for
    developing, improving, and implementing emergency plans under Title
    III; conducting commodity flow studies; and determining the need for
    regional hazardous materials response teams. In each year, RSPA
    allocates approximately 40 percent of the grant funds for emergency
    preparedness planning purposes.
        The second portion of the grant is designated for training. RSPA
    allocates approximately 60 percent of the grant funds for emergency
    preparedness training purposes. This portion is used to train public
    sector employees to respond safely and efficiently to accidents and
    incidents involving hazardous materials. The people trained include
    paid and volunteer firefighters, police, and emergency medical service
    providers. The designated agencies distribute the major portion of the
    grants to local emergency response organizations. This system promotes
    representation of many interests within a State or territory.
        The States are also required by Section 5116(a)(2)(B) to pass at
    least 75 percent of the planning grant amount to LEPC's to develop
    emergency plans, and by Section 5116(b)(2)(C) to make available at
    least 75 percent of the training grant amount for training public
    sector employees employed or used by a political subdivision of the
    State. These provisions ensure that funds are provided to the local
    emergency response teams for planning purposes, and that training is
    provided to first responders.
        Since 1993, all States and territories and 35 Native American
    tribes have been awarded planning and training grants totaling $38.6
    million. These grants, which were supplemented by funds from States,
    tribes, and local agencies, were used to:
      --Train 576,000 hazardous materials responders;
      --Conduct 1,825 commodity flow studies;
      --Write or update more than 1,000 emergency plans during the first
            grant period, 1,200 in the second, 4,475 in the third, and
            5,775 in the fourth;
      -- Conduct 2,850 emergency response exercises; and
      --Assist 1,200 LEPCs during the first year, 2,225 in the second,
            2,150 in the third, and 1,900 in the fourth.
        In addition, over the past six years, HMEP Grants Program funds
    have been used to support the following related activities in the total
    amounts indicated:
      --$2.1 million for development and periodic updating of a national
            curriculum of courses necessary to train public sector
            emergency response and preparedness teams. The curriculum
            guidelines, developed by a committee of Federal, State, and
            local experts, include criteria for establishing training
            programs for emergency responders at five progressively more
            skilled levels: first responder awareness, first responder
            operations, hazardous materials technician, hazardous materials
            specialist, and on-scene commander. To date, there have been
            three major and many minor updates to the curriculum
            guidelines. The guidelines are used to qualify courses for
            inclusion in the list. In this way, a national list of courses
            is generated in full partnership with the States and other
            interested parties. In addition, RSPA used some of the
            registration fees to distribute more than 16,000 copies of the
            HMEP interagency-developed curriculum guidelines to grantees,
            LEPCs, SERCs, and local fire departments. A small portion of
            the funds is used for coordination with other Federal agencies
            through the National Response Team Training/Curriculum Sub-
            Committee, chaired by RSPA. The guidelines are available from
            the Federal Emergency Management Agency (FEMA) via its internet
            web site at http://www.fema.gov/emi/hmep or by calling FEMA at
            301-447-1009.
      --$1.7 million to monitor public sector emergency response planning
            and training for an accident or incident involving hazardous
            materials, and to provide technical assistance to a State or
            Native American tribe for carrying out emergency response
            training and planning for an accident or incident involving
            hazardous materials.
      --$3.3 million for periodic updating and distribution of the North
            American Emergency Response Guidebook.
      --$0.5 million for supplemental grants to the International
            Association of Fire Fighters (IAFF) to train instructors to
            conduct hazardous materials response training programs.
      --$2.0 million for administrative costs of carrying out the HMEP
            Grants Program.
        The HMEP Grants Program has allowed RSPA to support a wide array of
    emergency preparedness planning and training activities of States and
    Native American tribes, thereby enabling them to better respond to
    numerous hazardous-materials-related emergencies. The experiences of
    emergency response personnel in actual emergency situations during the
    last six years demonstrate the effectiveness of the grants program. A
    few representative examples attest to the benefits of this program:
      --On October 25, 1995, a tank car containing nitrogen tetroxide
            ruptured in Bogalusa, Louisiana, causing evacuation of a large
            part of the town. The emergency plans of St. Tammany and
            Washington parishes, written and updated in part with HMEP
            grants funds, were implemented during this accident. Sergeant
            Robert Pinero of the Louisiana State Police said, ``Twelve
            State and local agencies involved in the Bogalusa response
            received training because of the HMEP Grants Program and we
            were able to effectively respond to this accident.''
      --On April 21, 1996, an explosion at a chemical plant in Lodi, New
            Jersey, killed four people. Local emergency plans had recently
            been updated with HMEP grant funds to include a transportation
            perspective and updated mutual aid plans. According to Sergeant
            Lance Oram of the New Jersey State Police, ``Mutual aid from
            surrounding communities, made possible by updated plans, was
            critical to limiting the effect of the accident, as was
            hazardous materials emergency training of local responders.''
      --The Commonwealth of Virginia has implemented a hazardous materials
            response team organization in part with HMEP funding. Steven
            Patrick, Hazardous Materials Officer for the Virginia State
            Department of Emergency Services, stated, ``It would have been
            impossible to implement or maintain the response team
            organization without the training and planning grants provided
            by the HMEP Grants Program.'' Virginia's regional response team
            approach was used in Lynchburg, Virginia, on March 31, 1998,
            when a 61-car freight train carrying acetone derailed and an
            explosion and fire occurred, resulting in the evacuation of a
            36-block area, including a school, and $1 million in damages to
            a nearby storage warehouse. Two regional hazardous materials
            teams trained to the technician level using HMEP grant funds
            responded to this accident. The availability of trained teams
            was instrumental in minimizing the time and expense necessary
            to respond to the accident according to the Virginia Department
            of Emergency Services.
        2. Increased Funding of the HMEP Grants Program
        The HMEP Grants Program has accomplished much in a short period of
    time, but many needs are not being met. Between 1993 and 1998, the
    average of $6.4 million available for planning and training grants has
    been only 50 percent of the $12.8 million authorized by the law for
    these purposes ($5 million for planning and $7.8 million for training).
    The HMEP training grants are essential for providing adequate training
    of those persons throughout the nation responsible for responding to
    emergencies involving the release of hazardous materials, both through
    direct Federal financial assistance for such training and by
    encouraging the provision of additional state and local funds for this
    purpose.
        In a recent review, RSPA estimated that 800,000 shipments of
    hazardous materials make their way through the national transportation
    system each day. These shipments range in size and type from single
    small parcels of consumer commodities, such as flammable adhesives and
    corrosive paint strippers, to bulk shipments of gasoline in cargo tank
    motor vehicles and flammable or toxic gases in railroad tank cars. Such
    shipments are transported in every State, every day of the year, and it
    is impossible to predict with any degree of certainty when and where an
    incident may occur. The potential threat requires the development of
    emergency plans and training of emergency responders on the broadest
    possible scale. Yet, RSPA also believes there are over 2 million
    emergency responders requiring initial training or periodic
    recertification training, including more than 250,000 paid
    firefighters, 800,000 volunteer firefighters, 725,000 law enforcement
    officers, and 500,000 emergency medical services (EMS) providers.
        The continuing need for training for emergency response personnel,
    whether paid or volunteer, is partially the result of a relatively high
    rate of turnover. Emergency response personnel must be available at any
    time and at a moment's notice to respond to situations that by their
    very nature are unpredictable and pose a threat not only to the public
    in general but to the responder in particular. This turnover means that
    each year there is a significant number of recently recruited
    responders who must be trained at the most basic level. In addition,
    training at more advanced levels is not simply desirable, it is
    essential if emergency response personnel capable of effectively and
    safely responding to serious releases of hazardous materials are to be
    provided. For this reason, RSPA advocates advanced training at the
    first responder operations, hazardous materials technician, hazardous
    materials specialist, and on-scene commander levels in every emergency
    response team in the country. An increase in the funds available to the
    HMEP Grants Program will encourage the State, tribal, and local
    agencies to provide this more advanced, and more expensive, training.
        The unmet needs of States and Native American tribes for financial
    assistance in emergency preparedness planning and training for
    transportation-related incidents involving hazardous materials are
    great. RSPA is determined to narrow the current gap between the
    authorized grant levels and the available Federal funds by its careful
    targeting of the additional funds collected as a result of this
    rulemaking. RSPA believes that it is essential to increase the awards
    for emergency planning and training grants to the full $12.8 million
    authorized by the law and, at the same time, maintain current funding
    of the additional activities supported by the HMEP Grants Program
    described above. We fully expect that the additional funds collected as
    a result of this rulemaking effort will enable us to achieve that
    objective. For FY-2000, RSPA is seeking Congressional appropriations of
    $14.3 million in support of HMEP Grants Program activities to permit
    funding for:
      --Training and planning grants ($12.8 million);
      --Grants/support to certain national organizations to train
            instructors to conduct hazardous materials response training
            programs ($250,000);
      --Revising, publishing, and distributing the North American Emergency
            Response Guidebook ($600,000 per year average);
      --Monitoring and technical assistance ($150,000);
      --Continuing development of a national training curriculum
            ($200,000); and
      --Administering the grants program ($300,000).
    II. Meeting the Need for Increased Funding
    A. Publicity Campaigns to Notify Affected Persons
        RSPA has conducted extensive outreach efforts to increase awareness
    of the registration requirement. Approximately 780,000 informational
    brochures have been distributed through direct mailing campaigns and
    during presentations to industry. Those mailing campaigns targeted,
    among others:
        (1) More than 60,000 carriers and shippers identified as carriers
    or shippers of hazardous materials by the Federal Highway
    Administration's (FHWA) Office of Motor Carriers (OMC);
        (2) 6,000 motor carriers required to maintain financial
    responsibility in the amount of $1 million or $5 million in insurance;
        (3) 700 railroad companies known to the Federal Railroad
    Administration (FRA);
        (4) More than 22,000 generators and 13,000 transporters of
    hazardous waste identified by the Environmental Protection Agency;
        (5) Over 16,500 carriers and shippers identified in RSPA's
    Hazardous Materials Incident Reporting System;
        (6) Approximately 4,000 holders of hazardous materials exemptions
    issued by RSPA;
        (7) Thousands of shippers and carriers who are members of trade
    associations with interests in the transportation of hazardous
    materials; and
        (8) Thousands of carriers and shippers known to State agencies.
        To avoid duplication of mailings when possible, RSPA has cross-
    checked its registration data base with other lists provided by the
    various Federal and State agencies and industry sources. Annually, RSPA
    mails registration brochures and forms to hazardous materials shippers
    and carriers newly entered into the OMC census of highway carriers and
    shippers and into the RSPA list of shippers and carriers named on the
    hazardous materials incident report form. The registration program has
    been publicized in trade magazines and industry newsletters. Seven
    notices of the registration requirements have been published in the
    Federal Register.
    B. Measures to Enhance Compliance
        Many commenters to Docket HM-208B (60 FR 5822, January 30, 1995)
    questioned whether a significant number of persons required to register
    failed to do so, and whether an accelerated enforcement program would
    raise sufficient funds to support the HMEP Grants Program fully. In
    1994, to ensure compliance with the registration requirements, RSPA
    proposed that offerors and transporters verify the registration status
    of each other before transportation begins (Docket HM-208A, 59 FR
    15602, April 1, 1994). Most commenters opposed this proposal.
    Commenters overwhelmingly believed that Federal and State agencies, and
    not industry, should be responsible for enforcing the regulations.
    Commenters opposing this proposal cited logistical problems,
    administrative burdens, and increased costs as reasons for their
    opposition. RSPA did not adopt the proposal in the final rule (59 FR
    32930, June 27, 1994).
        The DOT modal administrations have incorporated verification of
    registration into their normal compliance inspection routines.
    Enforcement efforts sponsored by FHWA indicate a relatively high
    compliance rate by motor carriers. Enforcement of the registration
    requirements was a key element of ROADCHECK-93, and ROADCHECK-95,
    nationwide inspection efforts led by FHWA. In ROADCHECK-93, of 2,300
    placarded trucks that were checked for proof of registration, 88
    percent were registered and had proof on board. Of the 12 percent that
    did not have proof on board, 80 percent were already registered. In
    ROADCHECK-95, 1,220 placarded trucks were stopped. Of these, 91 percent
    were registered and had proof of registration on board. Of the 9
    percent that did not have proof on board, 60 percent were registered.
    This indicates a compliance rate among highway carriers of over 95
    percent.
        The safety compliance reviews conducted by FHWA (motor carriers)
    and RSPA (non-bulk shippers and other offerors) confirm high rates of
    compliance with the registration rule by industry. The following table
    contains a summary of compliance statistics.

                    SUMMARY OF COMPLIANCE REVIEWS--HAZARDOUS MATERIALS REGISTRATION RULE (1995-1997)
    ----------------------------------------------------------------------------------------------------------------
                                                                                         Number of
                                                                         Number of     citations for    Percent of
                            Period and agency                           inspections     failure to      failures to
                                                                                         register        register
    ----------------------------------------------------------------------------------------------------------------
    Fiscal year 1995 FHWA...........................................           2,338             100             4.3
    Fiscal year 1996 FHWA...........................................           3,215              79             2.5
    Fiscal year 1997 FHWA...........................................           1,369              44             3.2
    Fiscal year 1998 FHWA...........................................           2,032              35             1.7
    CY 95 RSPA......................................................             586              19             3.2
    CY 96 RSPA......................................................             610              15             2.5
    CY 97 RSPA......................................................             875              20             2.3
    CY 98 RSPA......................................................           1,053              26             2.5
    ----------------------------------------------------------------------------------------------------------------

        FRA publicized the registration program through technical bulletins
    and informational brochures distributed to its regional offices and all
    FRA inspectors. FRA checks for registrations during compliance reviews
    and issues notices of defects for failure to register. FRA, FHWA, and
    28 State enforcement agencies have issued more than 700 informal
    notices of the requirement to register, a form developed for use in
    ROADCHECK-93, but used beyond that operation. The majority of these
    notices were issued in 1993, 1994, and 1995.
        RSPA's goal remains 100 percent compliance. Therefore, RSPA once
    again requests assistance from all interested persons to identify those
    elements of affected industries, or individual companies, that they
    suspect are required to file a registration statement and pay a fee,
    but have not done so. Suspected violations of the registration
    requirements, as well as other possible violations of the Hazardous
    Materials Regulations, may be reported by calling RSPA's Hazardous
    Materials Regulations Information Center at (800) 467-4922.
    C. DOT Inspector General Recommendations
        In 1996 the DOT Office of Inspector General performed a review of
    the hazardous materials registration program, concentrating on RSPA's
    efforts to inform the public of the registration requirements. The OIG
    issued a ``Management Advisory'' on April 3, 1998, as a result of this
    review, which made several recommendations, including one that called
    on RSPA to establish a graduated registration fee schedule based on the
    types and quantities of hazardous materials transported in order to
    increase the grants program funds. That recommendation is addressed in
    this notice. The other recommendations were related to increasing
    RSPA's efforts to encourage compliance with the current registration
    requirements through additional public information efforts.
        To implement these recommendations, in May 1998 RSPA sent brochures
    to 42,300 companies that were identified as carriers or shippers of
    hazardous materials by the OMC. All of these companies had previously
    been sent information on the registration program since 1992. In
    October 1998 RSPA resent brochures to 33,000 of these companies in an
    effort to ensure that companies likely to be required to register had
    been informed of the registration program. RSPA also mailed
    registration information to 6,229 companies in the OMC insurance record
    database that are insured for $1 million or $5 million. RSPA estimates
    that approximately 800 companies registered as a result of the May 1998
    mailing and approximately 200 in response to the October 1998 mailing.
    While these new registrations provide an additional $250,000 in annual
    fees to support the HMEP Grants Program, it is an amount far short of
    what is necessary to enhance funding for the program at the intended
    level. The results of this effort are consistent with RSPA's finding
    that at least 90 percent of the persons required to file a registration
    statement and pay a fee are complying with the current rule, and that
    little additional levels of revenue may be obtained by a more
    aggressive compliance enforcement effort.
    D. RSPA's Past Proposal to Increase Funding the Grants Program
        On January 30, 1995, RSPA published a notice of proposed rulemaking
    under Docket HM-208B (60 FR 5822) proposing a three-tier registration
    fee schedule. The proposed registration fee schedule was based on
    various factors related to the extent of a company's involvement in the
    transportation of hazardous materials. After considering over 300
    comments from the public and other interested parties, RSPA concluded
    that it needed more time to assess the registration and grant programs
    and to reconsider fee equity based on the risks posed by various types
    and quantities of hazardous materials. A final rule adopting some minor
    revisions to the registration program, but maintaining a flat fee of
    $300, was published on May 23, 1995 (60 FR 27231). In the four years
    since that proposal, providing funds to support planning and training
    aspects of the HMEP Grants Program at the levels authorized by Congress
    has been an important goal for RSPA and the grant recipients.
    E. Negotiated Rulemaking Convening Report
        RSPA has considered advice, comments, and suggestions from the
    public and interested industry groups made in previous rulemakings, and
    at meetings, seminars, workshops, and discussions concerning the
    reauthorization of the hazardous materials safety program. In the
    Spring of 1998, in anticipation of this proposed rulemaking, RSPA
    awarded a contract to assess the feasibility of addressing this issue
    through a negotiated rulemaking. The convenor contacted approximately
    40 representatives of the hazardous materials industry and State
    regulatory agencies affected by the registration and grants programs to
    ascertain issues of concern to these parties. The convenor recommended
    that RSPA should proceed to use the negotiated rulemaking process to
    develop an NPRM on the registration and fee requirements.
        Although RSPA determined not to convene a committee, the convening
    report has been useful in formulating this current proposal. A copy of
    the Convening Report has been entered into this docket and is available
    for review through DOT's Docket Unit and via the Internet at the URL
    indicated in the addresses section of this document.
    III. Proposal to Increase Funding of the HMEP Grants Program
        In setting a registration fee, RSPA believes that its proposal
    should meet the following objectives: (1) Be simple, straightforward,
    and easily implemented and enforced; (2) employ an equity factor that
    reflects the differences between the risk imposed on the public by the
    business activities of large and small businesses; (3) ensure the
    adequacy of funding for the HMEP Grants Program; and (4) be consistent
    with the law.
        Alternatives considered by RSPA for increasing the funds available
    for the HMEP Grants Program included: (1) Increasing the flat fee
    imposed on current registrants; (2) imposing a flat-fee on an expanded
    base of registrants; (3) imposing a two-tier fee schedule on the
    current registrants; and (4) imposing a two-tier fee schedule on an
    expanded base of registrants. RSPA has concluded that imposing a two-
    tiered fee schedule on an expanded base of registrants is the best
    approach to meet the objectives listed above. The preliminary
    regulatory evaluation prepared in support of this notice of proposed
    rulemaking contains a discussion of each of those alternatives. A copy
    of the preliminary regulatory evaluation was entered into the docket
    and is available for review by all interested parties.
    A. Impose a Two-Tier Fee Schedule on an Expanded Base of Registrants
        RSPA proposes to expand the number of persons required to register
    and to impose a fee schedule based on the size of the business. The
    base of registrants would be expanded to all persons offering or
    transporting a shipment of hazardous materials that requires
    placarding, with the exception of farmers, as discussed below. A two-
    tier fee schedule would be created, with the lower fee imposed on
    registrants meeting the U.S. Small Business Administration (SBA)
    criteria for a small business, also discussed below. This alternative
    would distribute fees according to a long-established measurement of
    business size and ensure the collection of sufficient funds to support
    the HMEP Grants Program at an enhanced level. Under this proposal, RSPA
    would achieve its goal of raising $14.3 million annually (exclusive of
    funds collected for administrative processing), by collecting a fee of
    $300 (which includes a $25 processing fee) from approximately 43,500
    registrants that are small businesses and a fee of $2,000 (which
    includes a $25 processing fee) from an estimated 1,500 registrants not
    meeting the criteria for a small business. Should the amount actually
    collected exceed $14.3 million, the law, at Sec. 5108(g)(2)(B),
    specifies that the Secretary of Transportation shall adjust the amount
    being collected to reflect any unexpended balance in the account.
    However, the Secretary is not required to refund any fee.
        This alternative recognizes the risks posed to health and safety or
    property by the transportation of hazardous materials in significant
    quantities that require placarding. It would require that shippers,
    carriers and other persons involved in the shipment of a placarded load
    of hazardous materials bear a fair share of the financial burden that
    falls on State and local government agencies to develop emergency plans
    and to train first-on-the-scene responders.
                                 expanded base
        RSPA proposes to expand the base of persons required to register to
    include, with one exception, offerors, carriers, and other persons who
    transport or cause to be transported hazardous materials in a bulk
    packaging, freight container, unit load device, transport vehicle, or
    rail car that must display a hazard warning placard, under the
    provisions of subpart F of part 172 of the Hazardous Materials
    Regulations (HMR; 49 CFR parts 171-180).
        The one exception is for those activities of a ``farmer,'' as
    defined in Sec. 171.8 of the HMR, that support the farmers farming
    operations. Absent this exception, the registration rule would
    potentially apply to a very large number of the nation's more than two
    million farms. If the actual number of affected farmers were only one
    percent of the total number of farms, i.e., 20,600, that segment of the
    economy would nearly equal the current number of 27,000 registrants
    drawn from all segments of the economy. However, this is not a blanket
    exception for all farmers from the registration rule. If a farmer
    offers for transportation or transports in commerce a hazardous
    material that is specifically identified in Sec. 5108(a)(1) of the law,
    that farmer must submit a registration statement and pay the required
    fee.
        RSPA's proposal to expand the base of persons required to register
    by including all placarded loads is responsive to concerns raised by
    numerous persons who participated in earlier rulemaking proceedings on
    this topic and through the convening process discussed earlier in this
    preamble. This proposed expansion of the base to include all placarded
    loads incorporates three important elements. First, the classes and
    quantities of hazardous materials for which placarding is required pose
    a substantial threat to health and safety or property during
    transportation. Second, the application of generally well understood
    hazard communication criteria for placarding greatly simplifies the
    matter of whether a shipper, carrier or other person is required to
    register. Simplification of the regulations similarly makes the rule
    much easier to enforce, thereby further assuring a high rate of
    compliance. Third, by expanding the scope of the registration rule RSPA
    expects that it will have the financial resources necessary to increase
    funding of planning and training grants under the HMEP Grants Program
    to levels currently authorized by the law.
        RSPA estimates that the proposed expansion of the universe of
    additional persons required to register will result in an additional
    15,000 to 18,000 registrations, for a total of 42,000 to 45,000
    annually. This is based on RSPA's review of the best available data
    from a number of sources, including the FHWA's Office of Motor Carriers
    (OMC) database of motor carriers and their shippers, the 1992 Truck
    Inventory and Use Survey conducted by the U.S. Census Bureau, and the
    1992 Economic Census, also conducted by the U.S. Census Bureau.
        While none of these sources discussed above contain the number of
    persons who offer or transport hazardous materials in shipments that
    require placarding, RSPA believes its estimate of the total number of
    registrants is conservative and reasonable. We request information on
    other sources from which to better estimate the number of persons who
    would be required to register under the proposed rule. If such new
    information suggests a number significantly larger than RSPA's current
    estimate, RSPA would consider adjusting the proposed registration fees
    to avoid collecting an amount in excess of the $14.3 million needed to
    enhance funding of the HMEP Grants Program.
        In addition, RSPA is interested in public comments on the
    advisability of expanding the number of persons required to register as
    proposed above, especially in relation to the economic impact of
    adopting or not adopting this element of the proposal.
                           two-tier schedule of fees
        RSPA proposes a two-tier fee schedule based on information that:
    (1) Is readily available to potential registrants; (2) can be verified
    by inspection and enforcement personnel; and (3) is based on one or
    more of the fee determinants permitted by law. Although the
    registration statement is excepted by 49 U.S.C. 5108 from requirements
    of the Paperwork Reduction Act, RSPA seeks to avoid any approach that
    entails a large record keeping and accounting burden on industry and
    the government. For example, basing the annual registration fee on a
    person's hazardous materials shipments could require significant
    changes in the way a registrant handles its paperwork tracking and
    accounting procedures. Further, law enforcement personnel would have to
    verify this information in order to ensure that a person's annual fee
    is in fact commensurate with its activities.
        RSPA believes that its goals are best met by establishing a two-
    tier fee schedule under which a company not meeting the small-business
    criterion established for it by the SBA at 13 CFR 121.201 pays a larger
    fee than that required for a small business. Upon careful review of
    census data concerning establishments identified by SIC codes
    corresponding to operations involving the likely manufacture,
    distribution, or sale (wholesale and retail) of hazardous materials,
    RSPA estimates that of the 27,000 current registrants, approximately
    1,000 registrants do not qualify as a SBA small business. If the base
    of registrants is expanded to include all persons who offer or
    transport placarded shipments, RSPA estimates that 1,500 shippers,
    carriers, and offerors of hazardous materials would not qualify as a
    SBA small business, while an estimated 43,500 registrants would meet
    the criterion established by SBA appropriate to their commercial
    activity.
        RSPA believes this regulatory approach provides fee levels that
    reflect a key factor contained in 49 U.S.C. 5108(g)(2)(A),
    specifically, the relative size of a business. In addition, this
    proposal addresses the different levels of risk posed by smaller
    companies that are engaged in fewer and smaller shipments of hazardous
    materials as compared to larger companies that annually manufacture,
    offer, and transport thousands of tons of hazardous materials. RSPA
    maintains that five of the specific factors permitted by 49 U.S.C.
    5108(g)(2)(A) as fee determinants were intended to be indications of
    the level of risk imposed by the registrant, and that two were intended
    to be indications of the size of the business (see the list of fee
    determinants above). Use of the SBA standards for differentiating small
    businesses offers a simple and direct factor that is commonly used and
    established by Federal regulation. The use of alternative size
    criteria, even though they could be defined to reflect, for instance,
    the relative percentage of specific hazardous materials related
    businesses, would impose additional and possibly significant record-
    keeping requirements on the registrants.
        RSPA believes that the use of the SBA size criteria as a fee
    determinant will not impose any additional recordkeeping requirements
    on the registrants since existing personnel and payroll records can be
    used to substantiate the number of employees, and financial records
    subject to routine audits can be used to substantiate gross annual
    receipts.
        The SBA size standards for small businesses are readily available
    and relatively simple to apply to a business. Each Standard Industrial
    Code is assigned a standard that is either the number of employees or
    the gross annual receipts of the business. If a registrant's number of
    employees or gross annual receipts is equal to or less than the
    standard assigned to the SIC category that best describes its
    commercial activities, it qualifies as a small business. In most
    instances a registrant will be able to immediately determine whether it
    meets the small business definition. For instance, the size standard
    for SIC Division D (Manufacturing) is the number of employees, and
    depending on the product manufactured can be 500, 750, 1000, or 1,500.
    Any registrant whose primary business is manufacturing that employs 500
    persons or less, will qualify as a small business, and, again depending
    on the SIC code, may qualify as a small business with up to 750 or 1000
    employees. Registrants whose primary business falls within the SIC
    Major Group ``Motor Freight Transportation and Warehousing'' are
    defined as small businesses if the gross annual receipts are equal to
    or less than $18.5 million, with two exceptions (``Garbage and Refuse
    Collection, without Disposal'' has an upper limit of $6.0 million, and
    ``Terminal and Joint Terminal Maintenance Facilities for Motor Freight
    Transportation'' has a limit of $5.0 million). Here again, RSPA
    believes that most motor carriers will immediately recognize whether
    they meet the SBA criterion for a small business.
        The SBA size criteria in 13 CFR part 121 are applied to a
    ``business concern'' or ``business entity.'' For the purposes of
    determining the appropriate registration fee, the SBA criteria are to
    be applied to the registering ``person'' as defined in 49 CFR 107.3,
    even if that ``person'' is substantively different from the SBA
    ``concern'' or ``entity.'' For example, the SBA, at 13 CFR 121.103(a),
    sometimes looks beyond the specific operations of a legally organized
    business to consider whether its affiliation with another business
    concern or business entity through identical or substantially identical
    business or economic interests, such as family members, persons with
    common investments, or firms that are economically dependent through
    contractual or other relationships, may be treated as one party with
    such interests aggregated. In its application of requirements for
    registration RSPA makes no such distinction and each business concern
    or business entity subject to the registration regulation would be
    required to file a separate registration statement and pay the
    appropriate fee.
        Under this proposal, a foreign carrier that transports a specified
    type and quantity of hazardous material within the United States would
    have to determine its small-business status by applying the criteria in
    13 CFR 121.201, using the U.S. Dollar equivalent of annual receipts or
    the number of employees, as appropriate.
        RSPA is interested in public comments on the advisability of
    imposing a two-tier schedule of fees as proposed above, particularly in
    relation to the alternative of maintaining the greater simplicity of a
    flat fee collected from all registrants regardless of their business
    size or amount and type of hazardous materials activities.
        Lower Administrative Fee for All Registrants.
        In this notice, RSPA proposes to reduce the processing fee to $25
    in order to bring the aggregate amount collected closer to the amounts
    needed to process the registration statement and to issue the
    Certificate of Registration. All amounts collected by RSPA (including
    the processing fee) are deposited into the U.S. Treasury, and Congress
    appropriates funds for RSPA to process registration statements, issue
    registration certificates, and perform the related parts of the
    registration program. In fiscal years 1996-99, the amounts needed by
    RSPA to administer the registration program, and appropriated by
    Congress, have been about one-half of the total processing fees
    collected. Although the current proposal would increase the number of
    persons required to register and pay a registration fee, RSPA estimates
    that a processing fee of $25 per registration statement will still be
    necessary and sufficient to administer the registration program at that
    level.
    B. Registration Procedures
        In connection with the proposed fee schedule, RSPA notes that
    additional information would be required on the Registration Statement
    submitted by persons subject to the registration requirements. The
    proposed new information includes the SIC Code and certification of
    whether the registrant meets the SBA standards for a small business.
    The SIC Code would replace the former indication of ``Industrial
    Classification'' on the Registration Statement.
        At the request of various industry representatives, RSPA is also
    proposing to permit registration for one, two, or three years on a
    single registration statement. Registration for more than a single year
    would be strictly optional. Registrants that register for years in
    advance would not receive RSPA's courtesy mailing of registration
    materials in the years for which they have pre-registered, but would
    receive a notice to register when their current registration is about
    to expire. A single administrative fee of $25 would be collected for
    each registration statement submitted under this proposal, whether for
    one, two, or three years, and a single registration statement and
    number would be issued for the entire period.
    IV. Fiscal year 2000 Budget Request and Hazardous Materials
            Transportation Reauthorization Proposal
        The Administration's fiscal year 2000 Budget and the Hazardous
    Materials Transportation Reauthorization proposals to Congress include
    legislative authority to fund RSPA's entire Hazardous Materials Safety
    Program from the registration fee program, beginning with the fourth
    quarter of fiscal year 2000. If this authority is granted, RSPA will
    initiate additional rulemaking action to collect the approximately
    $32.5 million needed to adequately fund both the HMEP Grants program
    ($14.3 million) and the remainder of RSPA's Hazardous Materials Program
    ($18.2 million).
    V. Rulemaking Analyses and Notices
    A. Executive Order 12866 and DOT Regulatory Policies and Procedures
        This proposed rule is considered a significant regulatory action
    under section 3(f) of Executive Order 12866 and was reviewed by the
    Office of Management and Budget. The rule is considered significant
    under the Regulatory Policies and Procedures of the Department of
    Transportation [44 FR 11034]. A regulatory evaluation is available for
    review in the public docket. This proposal is intended to collect
    annual registration fees in the amount of $14.3 million to support
    activities of the HMEP Grants Program. Because Federal hazardous
    materials transportation law mandates the establishment and collection
    of fees, the discretionary aspects of this rulemaking are limited to
    setting the amount of the fee within the statutory range for each
    person subject to the registration program, and to extending the
    registration requirements to persons who transport or cause the
    transportation of hazardous materials but who are not specifically
    required to register by law. The proposed fees are not related to the
    cost of RSPA's hazardous materials safety programs. The fees to be paid
    by shippers and carriers of certain hazardous materials in
    transportation are related to the benefits received by these persons
    from the sale and transportation of hazardous materials and from
    emergency response services provided by public sector resources, should
    an accident or incident occur. The fees are also related to expenses
    incurred by State, Native American tribal, and local hazardous
    materials emergency preparedness and response activities.
    B. Executive Order 12612
        This action has been analyzed in accordance with Executive Order
    12612 (``Federalism''). States and local governments are ``persons''
    under 49 U.S.C. 5102, but are specifically exempted from the
    requirement to file a registration statement. The regulations herein
    have no substantial effects on the States, on the current Federal-State
    relationship, or on the current distribution of power and
    responsibilities among the various levels of government. This
    registration regulation has no preemptive effect. It does not impair
    the ability of States, local governments or Native American tribes to
    impose their own fees or registration or permit requirements on
    intrastate, interstate or foreign offerors or carriers of hazardous
    materials. Thus, RSPA lacks discretion in this area, and preparation of
    a federalism assessment is not warranted.
    C. Executive Order 13084
        RSPA believes that revised regulations evolving from this NPRM
    would have no significant or unique effect on the communities of Indian
    tribal governments when analyzed under the principles and criteria
    contained in Executive Order 13084 (``Consultation and Coordination
    with Indian Tribal Governments''). Therefore, the funding and
    consultation requirements of this Executive Order would not apply.
    Nevertheless, this NPRM specifically requests comments from affected
    persons, including Indian tribal governments, as to its potential
    impact.
    D. Regulatory Flexibility Act
        The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires each
    agency to review regulations and assess their impact on small entities
    unless the agency determines that a rule is not expected to have a
    significant impact on a substantial number of small entities. Based on
    its preliminary regulatory evaluation prepared in support of this
    proposal, RSPA certifies that this proposed rule would not have a
    significant economic impact on a substantial number of small entities.
        This proposal would expand the number of persons subject to RSPA's
    registration and fee program to include all persons who offer for
    transportation or transport a shipment of hazardous materials required
    to be placarded. RSPA is also proposing to maintain at the current
    level the combined registration and processing fee in the amount of
    $300 as authorized by the Federal hazardous materials transportation
    law for persons meeting the Small Business Administration (SBA)
    definition of small business. In addition, RSPA is proposing a limited
    exception for farmers that offer for transportation or transport
    certain shipments of hazardous materials in support of their farm
    operations.
        Approximately 27,000 persons registered with RSPA for each of the
    last two registration years, and these persons are expected to engage
    in hazardous materials transportation activities that require
    registration in the coming years. Approximately 65 percent (17,550) of
    these persons are carriers or carriers-and-shippers, the remaining 35
    percent (9,450) being shippers or other offerors who do not transport
    hazardous materials. RSPA estimates that the proposed expansion of the
    universe of persons required to register will result in an additional
    15,000 to 18,000 registrations, for a total of 42,000 to 45,000 annual
    registrations. This represents the least number of registrations that
    can be reasonably expected under the proposed rule.
        The 1992 Truck Inventory and Use Survey (TIUS-92) conducted by the
    Bureau of the Census as part of the Census of Transportation indicates
    that there were 17 million trucks (not including pickups, vans, utility
    vehicles, and station wagons) in the United States. Except for a few
    specialized vehicle types, essentially all of those 17 million trucks
    may be used in the transportation of hazardous materials. With
    deregulation of the trucking industry there are essentially no economic
    barriers to entry into this field of transportation; carriers that are
    ready, willing, and able to transport hazardous materials are generally
    free to do so. The data indicate that only 360,000 of the 17 million
    trucks are actually used to carry placarded shipments of hazardous
    materials. The number of companies maintaining these trucks was not
    included in the census, but fleet sizes were provided. The number of
    fleets that included a truck that carried hazardous materials is
    estimated to be 40,000. This number contains an undetermined number of
    farmers who would be excepted under the proposed rule.
        The number of persons who offer shipments of hazardous materials
    for transportation exclusively by rail, air, or water is thought to be
    quite small by comparison to multi-modal shippers, and probably does
    not exceed 500 to 1,000. An increase is expected in the number of motor
    carriers that would be required to register and in the number of
    persons that offer shipments of hazardous materials that require
    placarding for transportation. RSPA expects that the estimated 15,000
    to 18,000 new registrants will be divided in approximately the same
    proportion as the current mix of registrants, i.e., 65 percent (9,750
    to 11,700) would be carriers or carriers-and-shippers, and 35 percent
    (5,250 to 6,300) would be persons who never transport their own
    shipments of hazardous materials. Of the estimated 15,000 to 18,000 new
    registrants, RSPA estimates that all but 400 to 500 are small
    businesses.
        RSPA believes the $300 in annual registration fees is so small as
    to not constitute a significant burden on any small business. For
    example, an independent owner-operator, i.e., a motor carrier not
    operating under lease to a registered motor carrier, probably
    represents the smallest of all small businesses potentially subject to
    requirements in this proposed rule. These owner-operators typically own
    one truck and average 2,000 revenue-miles per week at an estimated cost
    per mile of $0.80 cents. Assuming the typical independent owner-
    operator is in service 40 weeks per year, the additional cost per mile
    attributed to $300 in registration and processing fees is $0.00375
    cents. Stated differently, the independent owner-operator's increased
    cost of doing business would be less that one-half of 1 percent of
    current costs. That does not represent a significant impact on an
    independent owner-operator's cost of doing business.
        As indicated above, there are nearly 17 million vehicles in either
    private commercial operations or for-hire service. Assuming, on the
    basis of census data, that one-truck-only operators comprise 28 percent
    of the national fleet, it follows that there are at least 4.25 million
    concerns that could, at their discretion, engage in the transportation
    of hazardous materials. In this analysis, RSPA notes that the estimated
    total number of 9,750 to 11,700 persons described as carriers or
    carriers-and-shippers that the agency expects would be subject to the
    requirement to register is less than one-half of 1 percent of the 4.25
    million very small carriers that comprise the for-hire and commercial
    business services sector of the national economy. That is neither a
    substantial number of all potentially affected transporters, nor is it
    a substantial number of the 97 percent of those operators that RSPA
    believes meet SBA criteria for a small business.
    E. Unfunded Mandates Reform Act of 1995
        This proposed rule would not impose unfunded mandates under the
    Unfunded Mandates Reform Act of 1995. It would not result in costs of
    $100 million or more, in the aggregate, to any of the following: State,
    local, or Native American tribal governments, or the private sector.
    This proposed rule is the least burdensome alternative that achieves
    the objective of the rule.
    F. Paperwork Reduction Act
        Under 49 U.S.C. 5108(i), reporting and recordkeeping requirements
    pertaining to the registration rule are specifically excepted from
    information management requirements of the Paperwork Reduction Act (44
    U.S.C. 3501 et seq.)
    G. Impact on Business Processes and Computer Systems (Year 2000)
        Many computers that use two digits to keep track of dates may, on
    January 1, 2000, recognize ``double zero'' not as 2000 but as 1900.
    This glitch, the Year 2000 problem, could cause computers to stop
    running or to start generating erroneous data. The Year 2000 problem
    poses a threat to the global economy in which Americans live and work.
    With the help of the President's Council on Year 2000 Conversion,
    Federal agencies are reaching out to increase awareness of the problem
    and to offer support. We do not want to impose new requirements that
    would mandate business process changes when the resources necessary to
    implement those requirements would otherwise be applied to the Year
    2000 problem.
        This NPRM does not propose business process changes or require
    modification to computer systems. Because the NPRM apparently does not
    affect organizations' ability to respond to the Year 2000 problem, we
    do not intend to delay the effectiveness of the proposed requirements
    in the NPRM.
    H. Regulation Identifier Number (RIN)
        A regulation identifier number (RIN) is assigned to each regulatory
    action listed in the Unified Agenda of Federal Regulations. The
    Regulatory Information Service Center publishes the Unified Agenda in
    April and October of each year. The RIN number contained in the heading
    of this document can be used to cross-reference this action with the
    Unified Agenda.
                      list of subjects in 49 cfr part 107
        Administrative practice and procedure, Hazardous materials
    transportation, Packaging and containers, Penalties, Reporting and
    recordkeeping requirements.
        Accordingly, RSPA proposes to amend 49 CFR part 107 as follows:
                part 107--hazardous materials program procedures
        1. The authority citation for part 107 would continue to read as
    follows:
        Authority: 49 U.S.C. 5101-5127, 44701; Sec. 212-213, Pub. L. 104-
    121, 110 Stat. 857; 49 CFR 1.45, 1.53.
      subpart g--registration of persons who offer or transport hazardous
                                   materials
        2. Section 107.601 would be revised to read as follows:
    Sec. 107.601 Applicability
        (a) The registration and fee requirements of this subpart apply to
    any person who offers for transportation, or transports, in foreign,
    interstate or intrastate commerce--
        (1) A highway route-controlled quantity of a Class 7 (radioactive)
    material, as defined in Sec. 173.403 of this chapter;
        (2) More than 25 kg (55 pounds) of a Division 1.1, 1.2, or 1.3
    (explosive) material (see Sec. 173.50 of this chapter) in a motor
    vehicle, rail car or freight container;
        (3) More than one L (1.06 quarts) per package of a material
    extremely toxic by inhalation (i.e., ``material poisonous by
    inhalation,'' as defined in Sec. 171.8 of this chapter, that meets the
    criteria for ``hazard zone A,'' as specified in Sec. Sec. 173.116(a) or
    173.133(a) of this chapter);
        (4) A shipment of a quantity of hazardous materials in a bulk
    packaging (see Sec. 171.8 of this chapter) having a capacity equal to
    or greater than 13,248 L (3,500 gallons) for liquids or gases or more
    than 13.24 cubic meters (468 cubic feet) for solids;
        (5) A shipment in other than a bulk packaging of 2,268 kg (5,000
    pounds) gross weight or more of one class of hazardous materials for
    which placarding of a vehicle, rail car, or freight container is
    required for that class, under the provisions of subpart F of part 172
    of this chapter; or
        (6) Except as provided in paragraph (b) of this section, a quantity
    of hazardous material that requires placarding, under provisions of
    subpart F of part 172 of this chapter.
        (b) Paragraph (a)(6) of this section does not apply to those
    activities of a farmer, as defined in Sec. 171.8 of this chapter, that
    are in direct support of the farmers farming operations.
        (c) In this subpart, the term ``shipment'' means the offering or
    loading of hazardous material at one loading facility using one
    transport vehicle, or the transport of that transport vehicle.
        3. In Sec. 107.608, paragraphs (a), (b), and (d) would be revised
    to read as follows:
    Sec. 107.608 General registration requirements.
        (a) Except as provided in Sec. 107.616(d), each person subject to
    this subpart must submit a complete and accurate registration statement
    on DOT Form F 5800.2 not later than June 30 for each registration year,
    or in time to comply with paragraph (b) of this section, whichever is
    later. Each registration year begins on July 1 and ends on June 30 of
    the following year.
        (b) No person required to file a registration statement may
    transport a hazardous material or cause a hazardous material to be
    transported or shipped, unless such person has on file, in accordance
    with Sec. 107.620, a current Certificate of Registration in accordance
    with the requirements of this subpart.
              * * * * *
        (d) Copies of DOT Form F 5800.2 and instructions for its completion
    may be obtained from the Hazardous Materials Registration Program, DHM-
    60, U.S. Department of Transportation, Washington, DC 20590-0001, by
    calling 617-494-2545 or 202-366-4109, or via the Internet at http://
    hazmat.dot.gov.
              * * * * *
        4. Section 107.612 would be revised to read as follows:
    Sec. 107.612 Amount of fee.
        (a) Registration year 1999-2000 and earlier. For all registration
    years through 1999-2000, each person subject to the requirements of
    Sec. 107.601(a)(1)-(5) must pay an annual fee of $300 (which includes a
    $50 processing fee).
        (b) Registration year 2000-2001 and following. For each
    registration year beginning with 2000-2001, each person subject to the
    requirements of this subpart must pay an annual fee as follows:
        (1) Small business. Each person that qualifies as a small business
    under criteria specified in 13 CFR part 121 applicable to the standard
    industrial classification (SIC) code that describes that person's
    primary commercial activity must pay an annual fee of $300 (which
    includes a $25 processing fee).
        (2) Other than a small business. Each person that does not meet
    criteria specified in paragraph (b)(1) of this section must pay an
    annual fee of $2,000 (which includes a $25 processing fee).
        (3) The processing fee is limited to $25 for each registration
    statement filed for more than one year, as provided in Sec. 107.616(c).
        5. In Sec. 107.616, paragraphs (c) and (d)(2) would be revised to
    read as follows:
    Sec. 107.616 Payment procedures.
              * * * * *
        (c) Payment must correspond to the total fees properly calculated
    in the ``AMOUNT DUE'' block of the DOT Form F 5800.2. A person may
    elect to register and pay the required fees for up to three
    registration years by filing one complete and accurate registration
    statement.
        (d) * * *
        (2) Pay a registration and processing fee of $350 (including a $50
    expedited handling fee). For registration years 2000-2001 and
    following, persons who do not meet the criteria for a small business,
    as specified in Sec. 107.612(b)(1), must enclose payment of $1,700 with
    the expedited follow-up material, for a total of $2,050 (including a
    $50 expedited handling fee); and
              * * * * *
        Issued in Washington, D.C. on April 12, 1999, under authority
    delegated in 49 CFR part 106.
                                     ______

                          SURFACE TRANSPORTATION BOARD

                Prepared Statement of Linda J. Morgan, Chairman
                        fiscal year 2000 budget request
        Chairman Shelby and Members of the Subcommittee, I am Linda J.
    Morgan, Chairman of the Surface Transportation Board (Board). It is my
    pleasure to submit the budget request for the Board for fiscal year
    2000.
                            background on the board
        As you know, on January 1, 1996, the Board was established pursuant
    to Public Law 104-88, the ICC Termination Act of 1995 (ICCTA).
    Consistent with the trend toward less economic regulation of the
    surface transportation industry, the ICCTA eliminated the ICC and, with
    it, several regulatory functions that it had administered. The ICCTA
    transferred to the Board core rail functions and certain non-rail
    adjudicative functions previously performed by the ICC. Motor carrier
    licensing and certain other motor functions were transferred to the
    Federal Highway Administration within the Department of Transportation
    (DOT).
        The Board is a three-member, bipartisan, decisionally independent,
    adjudicatory body organizationally housed within DOT. The rail
    oversight of the Board encompasses maximum rate reasonableness, car
    service and interchange, mergers and line acquisitions, and line
    constructions and abandonments. The important rail reforms of the
    Staggers Rail Act of 1980 are continued under the ICCTA. The
    jurisdiction of the Board also includes certain oversight of the
    intercity bus industry and pipeline carriers; rate regulation involving
    non-contiguous domestic water transportation, household goods carriers,
    and collectively determined motor rates; and the disposition of motor
    carrier undercharge claims. The ICCTA empowers the Board, through its
    exemption authority, to promote deregulation administratively.
                  the board's fiscal year 2000 budget request
        The Board's fiscal year 2000 budget request totals $17.0 million
    and 140 FTEs, essentially adjusting the fiscal year 1999 level for
    inflation and pay raises. This request reflects the relatively constant
    workload that is expected and the statutory and regulatory deadlines
    associated with the resolution of the cases filed.\1\ The workload of
    the Board at any given time, other than motor carrier undercharge
    cases, remains relatively constant because, even as cases are resolved,
    new cases are filed.
    ---------------------------------------------------------------------------
        \1\ Attached (Attachment # 1) is a table that presents in more
    detail the specifics of the Board's fiscal year 2000 budget request.
    ---------------------------------------------------------------------------
        The Board is confronted with three concerns involving the resources
    necessary to adjudicate its constant workload and meet statutory and
    regulatory deadlines. The Board must have a way of ensuring that it can
    hire new employees in sufficient time to be prepared to replace the 38
    percent of experienced employees who will be eligible to retire in the
    next 3 years. While some of these employees may wish to continue to
    work after their retirement eligibility date, many will not. Second,
    the Board must have the necessary resources to accommodate any
    legislative changes that Congress might approve. And lastly, the
    funding source must remain stable for the Board to carry out its
    mandate. In this regard, a debate continues over whether the Board
    ought to be fully funded through user fees, and the Administration has
    included such a proposal in its fiscal year 2000 budget. Such an
    approach would require additional legislative authority and until
    Congress provides new direction, the financing mechanism of
    appropriations and offsetting collections is the appropriate way to
    proceed.
                           overall goals of the board
        In the performance of its functions, the objective of the Board is
    to ensure that, where regulatory oversight is necessary, it is
    exercised efficiently and effectively, integrating market forces, where
    possible, into the overall regulatory model. In particular, the Board
    seeks to resolve matters brought before it fairly and expeditiously.
    Through use of its regulatory exemption authority, streamlining of its
    decisional process and the regulations applicable thereto, and
    consistent application of legal and equitable principles, the Board
    seeks to facilitate commerce by providing an effective forum for
    efficient dispute resolution and facilitation of appropriate business
    transactions. The Board continues to strive to develop, through
    rulemakings and case disposition, new and better ways to analyze unique
    and complex problems, to reach fully justified decisions more quickly,
    and to reduce the costs associated with regulatory oversight.
        To be more responsive to the surface transportation community by
    fostering governmental efficiency, innovation in dispute resolution,
    private-sector solutions to problems, and competition in the provision
    of transportation services, the Board will:
      --Continue to strive for a more streamlined process for the
            expeditious handling of rail rate reasonableness and other
            complaint cases, in an effort to provide additional regulatory
            predictability to shippers and carriers;
      --Continue to reduce processing time for all cases before the Board,
            in particular to ensure that appropriate market-based
            transactions in the public interest are facilitated; and
      --Continue to develop new opportunities for the various sectors of
            the transportation community to work cooperatively with the
            Board and with one another to find creative solutions to
            persistent industry and/or regulatory problems involving
            carriers, shippers, employees, and local communities.
                 fiscal year 1998 accomplishments of the board
        During fiscal year 1998, the Board issued 1,170 decisions,
    involving adjudications and rulemakings, dealing with rail and non-rail
    transportation issues. These decisions pertained to rail carrier
    consolidations; review of rail labor arbitral decisions; rail rates and
    service; line sales; line constructions; set terms and conditions for
    continued rail service; and abandonments. They also related to truck
    rate undercharge cases, intercity bus merger and pooling matters, motor
    carrier collective ratemaking oversight, and other non-rail matters
    such as pipeline rate cases.
        With respect to rulemaking activity, the Board issued decisions
    exempting commodities, services, and other classes of transactions from
    regulation where regulation is not necessary. In addition, the Board
    initiated STB Ex Parte No. 575, Review of Rail Access and Competition
    Issues, in response to complaints by shippers dependent on rail service
    that, as a result of consolidation in the industry, competitive options
    have not been expanded, that rail service is inadequate, and that the
    available regulatory remedies are burdensome and unresponsive.
    Following two days of hearings during which approximately 60 witnesses
    testified, the Board initiated actions addressing rail revenue adequacy
    procedures, competitive rail access, product and geographic competition
    in market dominance rail rate reasonableness determinations, expedited
    relief for service inadequacies, the role of smaller railroads, and
    formalized discussions between the railroads and their customers.
        With regard to specific cases, the Board made significant progress
    in resolving pending rail and pipeline rate complaints. In particular,
    the Board affirmed its decision in Arizona Public Service Company v.
    Santa Fe Railroad that certain rail rates for the movement of coal were
    unreasonably high, prescribing a rate that represents a 35 percent
    reduction from the rate earlier charged by Santa Fe. The Board also
    made progress in resolving other major rail and pipeline maximum rate
    complaints, including STB Docket No. 42022, FMC Wyoming Corporation and
    FMC Corporation v. Union Pacific Railroad Company; STB Docket No.
    41295, Pennsylvania Power & Light Company v. Consolidated Rail
    Corporation; and STB Docket No. 41685, CF Industries, Inc. v. Koch
    Pipeline Company, PL.. In addition, STB Docket No. 41989, Potomac
    Electric Power Company v. CSX Transportation Inc., and STB Docket No.
    42012, Sierra Pacific Power Company and Idaho Power Company v. Union
    Pacific Railroad Company, were resolved voluntarily by the parties; it
    is important to note, however, that the Board had done significant work
    on these cases by the time they were settled. Finally, the Board
    defended its decision on simplified evidentiary guidelines for
    determining the reasonableness of challenged rail rates charged on
    captive traffic where the Constrained Market Pricing guidelines cannot
    practicably be applied (Ex Parte No. 347 (Sub-No.2), Rate Guidelines-
    Non-Coal Proceedings); the United States Court of Appeals for the
    District of Columbia declined to review the Board's decision in this
    case as not being ripe, finding that it ``would benefit from an actual
    application of'' the simplified rate guidelines. Further, the Board set
    the terms and compensation for Amtrak's operations over tracks owned by
    the Guilford Rail System.
        With respect to rail restructuring, the Board continued its annual
    oversight of the Union Pacific/Southern Pacific (UP/SP) merger, and
    specifically initiated a proceeding focused on rail transportation in
    the Houston area. In addition, the Board continued its proceeding
    dealing with the rail service emergency in the West until the rail
    emergency abated. Furthermore, the Board issued a decision approving
    the control of Conrail by the CSX and Norfolk Southern railroads, with
    various competitive, environmental, labor, and operational conditions,
    including a 5-year oversight condition and substantial operational
    reporting and monitoring. The Board also began its review of the merger
    application dealing with the acquisition of Illinois Central Railroad
    by the Canadian National Railway.
        The Board issued decisions on various other rail matters, including
    452 rail abandonment decisions, 42 rail line construction decisions,
    138 decisions involving rail consolidations, and 185 short-line and
    non-carrier acquisition decisions. In particular, the Board adopted a
    procedural schedule for the construction and operation of a 281-mile
    segment of the Dakota, Minnesota & Eastern Railroad in Wyoming to be
    used to transport coal from the Powder River Basin to the Upper
    Midwest.
        Regarding other matters, the Board issued a decision permitting
    Amtrak to transport express traffic over UP/SP lines provided that this
    transportation is ancillary to genuine passenger service (STB Finance
    Docket No. 33469, Application of the National Railroad Passenger
    Corporation Under 49 U.S.C. 24308(a)--Union Pacific Railroad Company
    and Southern Pacific Transportation Company). The Board also
    established a joint task force with the Department of Agriculture to
    address shipper and railroad information needs related to seasonal
    issues affecting grain transportation. Non-rail decisions included 119
    motor carrier undercharge decisions and 34 decisions dealing with
    intercity bus merger cases and pooling agreements.\2\
    ---------------------------------------------------------------------------
        \2\ These numbers are subsets of the decisions included in the
    workload summary table that follows.
    ---------------------------------------------------------------------------
                           fiscal years 1999 and 2000
        Attached is a table (Attachment #2) that shows workload trends and
    accomplishments, which form the basis for the Board's request to have
    its current level of funding relatively maintained in fiscal year 2000.
    As the table indicates, the Board believes that the number of decisions
    issued is the best measure of workload and performance. In accordance
    with the Board's continued commitment to resolving matters before it
    expeditiously, it anticipates a relatively constant workload and output
    through fiscal year 2000.
        During fiscal year 1999 and 2000, the Board will continue to look
    for ways to streamline or otherwise improve applicable regulations and
    the regulatory process. The Board will entertain whatever exemptions
    from regulation might be appropriate and resolve as expeditiously as
    possible petitions for rulemaking filed by parties.
        Regarding specific rulemaking activity, during fiscal year 1999, in
    rulemakings arising out of the rail access and competition hearings and
    proceedings, the Board eliminated the consideration of evidence of
    product and geographic competition in market dominance determinations
    and established procedures for obtaining temporary alternative rail
    service to provide relief from service inadequacies. The Board observed
    that removing the product and geographic competition evidentiary
    standards would expedite rail rate cases in accordance with
    Congressional intent, and would further level the playing field between
    railroads and shippers, thereby resulting in more private-sector
    solutions to rate disputes. With respect to service inadequacies, the
    Board established new procedures under which shippers or connecting
    railroads affected by service problems of an ``incumbent'' carrier can
    seek temporary service from an alternative rail carrier. Also, the
    Board will continue to monitor the implementation of private-sector
    agreements entered into in accordance with the Board's directive as
    part of the rail access and competition proceedings.
        With respect to rail carrier consolidations, workload is expected
    to remain constant for fiscal year 1999 and fiscal year 2000. In
    particular, the Board will continue to monitor the UP/SP merger and the
    Conrail acquisition pursuant to the five-year oversight conditions that
    the Board imposed as part of its approval of those mergers. During
    fiscal year 1999, the Board issued a decision regarding UP/SP service
    in the Houston area and general oversight of the UP/SP merger. In
    addition, the Board during fiscal year 1999 will decide on the merger
    application dealing with the acquisition by Canadian National Railway
    of the Illinois Central Railroad.
        Regarding rail rates and services, the workload is expected to
    increase in fiscal year 1999 and then further increase in fiscal year
    2000, due to an anticipated increase in the number of rate
    reasonableness complaints, as long-term coal transportation contracts
    continue to expire, as complaints are filed seeking application of the
    Board's recently issued non-coal rate guidelines, and as parties seek
    rate relief in accordance with the Board's recent bottleneck decision.
    These new cases will be complex and require significant staff attention
    as new standards are tested. In addition, the Board will continue to
    work on the various pending rate matters previously referenced.
        In light of the ongoing major restructuring activity among larger
    railroads, other rail restructuring will continue. While rail
    abandonment filings continue to decline (as line sales continue at an
    increased level, providing an alternative to service abandonment), rail
    abandonment decisions are expected to decline in fiscal year 1999 and
    then remain stable through fiscal year 2000, because the increased
    complexity of abandonment filings may require more than one decision.
    The Board continues to handle complex line constructions, which involve
    significant environmental review issues, and projects that line
    construction proceedings will remain constant through fiscal year 2000.
    For example, the Dakota, Minnesota, and Eastern Railroad filed an
    application to build over 200 miles of new line and to upgrade 700
    miles of existing line into the Powder River Basin as an alternative
    for the rail movement of coal out of that region (STB Finance Docket
    No. 33407, Dakota, Minnesota, & Eastern Railroad Corporation
    Construction into the Powder River Basin). In fiscal year 1999, the
    Board issued a decision on the transportation merits of this proposal
    and will continue its work on the environmental issues associated with
    the project. In addition, Tongue River Railroad has filed a new
    application for the proposed construction of an alternative route for a
    line already approved for construction (STB Finance Docket No. 30186
    (Sub-No.3), Tongue River Railroad Company--Construction and Operation--
    Western Alignment). Other line transaction activity is expected to
    increase slightly in fiscal year 1999 and fiscal year 2000 as more
    carriers continue to sell unprofitable or marginally profitable lines
    as an alternative to service abandonment.
        Truck rate undercharge workload is expected to decrease
    significantly during fiscal year 1999 from the fiscal year 1998 level,
    and then further drop off in fiscal year 2000. The reduction in
    undercharge decisions reflects the Board's commitment to resolving its
    undercharge docket, and specifically its handling of the docket in a
    more efficient way by consolidating cases with common issues. Other
    non-rail activities, including intercity bus merger and pooling
    proceedings and pipeline rate cases, are expected to continue during
    fiscal year 1999 and fiscal year 2000 at the fiscal year 1998 level. In
    accordance with a Board decision issued in early fiscal year 1999,
    during late fiscal year 1999 or early fiscal year 2000, the Board
    expects to finally resolve the circumstances under which motor carrier
    ratemaking antitrust immunity should be continued, taking into account
    any expression of Congressional intent during this period.
                                    summary
        The Board's budget request would ensure the resources needed for
    the Board to continue to implement its responsibilities expeditiously
    and effectively as Congress intends. I would be happy to answer any
    other questions that the Committee may have about the Board's fiscal
    year 2000 budget request.

                                           ATTACHMENT 1--SALARIES AND EXPENSES
                                                 [Dollars in thousands]
    ----------------------------------------------------------------------------------------------------------------
                                                                                 Fiscal year
                                                                    ------------------------------------  Difference
                                                                        1998        1999        2000         from
                                                                       Actual      Enacted     Request     enacted
    ----------------------------------------------------------------------------------------------------------------
    Permanent Positions............................................         129         135     \3\ 140           5
    Full-time Equivalents..........................................         129         135         140           5
                                                                    ================================================
    Personnel Compensation and Benefits............................     $11,606     $12,671     $13,210        $539
    Former Personnel...............................................          83          20          10         (10)
    Travel.........................................................          44          50          55           5
    Other Costs....................................................       4,095       3,259       3,725         466
                                                                    ------------------------------------------------
          Total Budget Resources...................................     $15,828     $16,000     $17,000     $1,000
    ----------------------------------------------------------------------------------------------------------------
    \3\ The requested increase in FTE will be absorbed within the current level of funding by allowing the Board to
      hire entry level staff to replace the tenured, retirement-eligible staff prior to their retirement dates. This
      would ensure the required transition for current staff to new staff, who can gain working knowledge and
      analytical and legal expertise necessary to process the Board's caseload and prepare decisions for the Board's
      adjudication.

    Changes in Resources
        For personnel compensation and benefits, $13,210,000 is requested
    to support the Board's permanent positions. This is an increase of
    $539,000 over fiscal year 1999, of which $102,000 is required to fund
    the annual cost of the January 1999 pay raise and $390,000 is required
    for the January 2000 pay raise estimated at 4.4 percent. The request
    also includes $48,000 for lump-sum leave payments to retiring
    employees.
        Funding for costs for former personnel unemployment payments is
    requested at $10,000, which is a decrease of $10,000 from fiscal year
    1999. This is due to a decrease in unemployment compensation payments
    to former employees who were separated from Federal service.
        A travel budget of $55,000 is requested primarily for on-site
    visits to railroads to finalize audits and review public accountants'
    workpapers, for physical inspection of proposed rail abandonment and
    construction sites and verification of environmental data provided by
    parties to proceedings, for defense of the Board's decisions in courts
    across the country, and for the general presentation upon request of
    issues within the Board's jurisdiction.
        Funding to cover other costs is requested at $3,725,000, a $466,000
    increase over fiscal year 1999. Included in this number is a rental
    payment increase directed by the General Services Administration (GSA)
    and regular cost increases in telephone service, mail delivery, copier
    rental, office supplies, and reimbursable services acquired from other
    Federal agencies.

    ATTACHMENT 2--FISCAL YEAR 2000 OMB BUDGET JUSTIFICATION WORKLOAD SUMMARY
                                       \4\
    ------------------------------------------------------------------------
                                                 Decisions issued
                                     ---------------------------------------
                                                    Fiscal year
            Workload category        ---------------------------------------
                                        1998         1999           2000
                                       Actual   Estimated \5\  Estimated \5\
    ------------------------------------------------------------------------
    Rail Carrier Consolidations.....       138           155            155
    Rail Rates and Service..........        77           114            119
    Rail Abandonments and                  494           473            473
     Constructions..................
    Other Line Transactions.........       185           199            199
    Other Rail Activities...........        75            97            108
    Motor Carrier Undercharges......  \6\ 1196            78             52
    Non-Rail Activities.............        82            87             87
                                     ---------------------------------------
          Total Decisions...........  \6\ 1,17     \7\ 1,203     \7\ 1,1937
                                             0
    ------------------------------------------------------------------------
    \4\  At this time, the Board believes that the number of decisions
      issued is the best measure of workload at the Board. Certain
      activities performed at the Board that provide direct and indirect
      support to rulemakings and decisions in specific cases are not
      reflected in these workload numbers. Such activities not reflected
      include: enforcement action; judicial review work; rail audits and
      rail carrier reporting oversight; administration of the rail waybill
      sample and development of the Uniform Rail Costing System; and case-
      related correspondence and informal public assistance.
    \5\ Estimated workload for fiscal years 1999 and 2000 are based on
      historical information regarding actual filings and best estimates of
      probable future filings by parties. Because the Board is principally
      an adjudicatory body, it does not directly control the level or Timing
      of actual case filings.
    \6\ The motor carrier undercharge decisions projected for fiscal year
      1998 have decreased from previous estimates. This decrease is a
      reflection of the Board's consolidation of several undercharge case
      dockets into a single decision. The ``bundling'' of related
      undercharge cases into a single decision accounts for the decrease in
      the number of overall decisions by the Board.
    \7\ The decrease between fiscal year 1999 and fiscal year 2000 reflects
      what the Board expects to be a decrease of the overall undercharge
      docket from fiscal year 1998 offset by minor increases in some rail
      workload activities. The small percentage of the total FTEs allocated
      to undercharge cases will still be needed to ensure continued progress
      in resolving the remaining undercharge docket. Thus, the total FTEs
      needed in fiscal year 2000 would be the same as that anticipated for
      fiscal year 1999 and currently available in FY 1998.

                                     ______

                     Questions Submitted by Senator Shelby

                       board members' terms and staffing
        Question. What is the current status of the Board membership. How
    long has the third Board member position been vacant? Is anyone
    nominated for the third Board position? What is the status of that
    nomination?
        Answer. The ICC Termination Act of 1995 (ICCTA) provided that the
    term for each Member of the Board shall be 5 years and shall begin when
    the term of the predecessor of that Member ends. Also under the ICCTA,
    a Board Member can only be reappointed for one additional term and, if
    not reappointed, cannot serve more than one year past the expiration of
    his or her term. The Board currently consists of three members serving
    in various terms. There are no vacancies at the Board at this time.
        Question. When do the terms of the current three Board members
    expire? Has Ms. Morgan been renominated for another term? What is the
    status of that nomination?
        Answer. The membership of the Board and the expiration of the Board
    members' terms follow: Linda J. Morgan, December 31, 1998; William
    Clyburn Jr., December 31, 2000; and Wayne O. Burkes, December 31, 2002.
        To date, the White House has not submitted a renomination for
    Chairman Morgan.
                                funding history
        Question. Please update the table found on page 835 of Senate
    hearing record 105-851, displaying the Board's funding request, the
    Administration's request, the enacted funding level, and the end of
    year staffing level for each fiscal year from fiscal year 1995 to that
    requested for fiscal year 2000. Please display both appropriated funds
    and offsetting collections.
        Answer. The following table displays the funding history of the
    Interstate Commerce Commission (ICC) and the Board for fiscal years
    1995 through 2000.

                                                           BUDGET REQUESTS AND ENACTED APPROPRIATIONS
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                Fiscal year
                                             ---------------------------------------------------------------------------------------------------------------
                                                            ICC                                                     STB
                                             ---------------------------------------------------------------------------------------------------------------
                                                   1995          1996 \8\        1996 \1\          1997            1998            1999            2000
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Board:
        Appropriation.......................     $45,069,000     $32,892,000  ..............     $12,344,000     $12,753,000     $14,190,000     $15,821,000
        Offsetting Collections..............       7,300,000       8,300,000  ..............       3,000,000       3,100,000        2,000,00       1,200,000
                                             ---------------------------------------------------------------------------------------------------------------
          Budget Request....................      52,369,000      41,192,000  ..............      15,344,000      15,853,000      16,190,000  \9\ 17,021,000
                                             ===============================================================================================================
    President:
        Appropriation.......................      44,429,000      33,202,000  ..............  ..............  ..............  ..............  ..............
        Offsetting Collections..............       8,300,000       8,300,000  ..............      15,344,000      14,300,000      16,000,000      17,000,000
                                             ---------------------------------------------------------------------------------------------------------------
          Budget Request....................      52,729,000      41,502,000  ..............      15,344,000      14,300,000      16,000,000      17,000,000
                                             ===============================================================================================================
    Enacted:
        Appropriation \10\..................      33,083,000       13,379,00      $8,414,000      12,244,000     13,850, 000      15,990,000  ..............
        Offsetting Collections \11\.........       7,738,000       3,200,000         652,000       3,000,000       2,000,000  \12\ 2,600,000  ..............
                                             ---------------------------------------------------------------------------------------------------------------
          Budget Request....................      40,821,000      16,579,000       9,066,000      15,244,000      15,850,000      15,990,000  ..............
                                             ===============================================================================================================
    End of Year:
        Staffing Level......................             402        \13\ 317             132             127             130             135             140
        FTE Level...........................             416          \5\ 86             106             131             129             135            140
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    \8\ During fiscal year 1996, the ICCTA was passed, the ICC was eliminated effective December 31, 1995, and the Board was established effective January
      1, 1996. The enacted funding levels for the ICC for fiscal year 1996 reflect ICC operational and termination expenses for one quarter of the fiscal
      year and the Board funding levels for fiscal year 1996 reflect Board operational expenses for three-quarters of the fiscal year.
    \9\ The Board's fiscal year 2000 budget request essentially represents the Board's current funding level (for fiscal year 1999) plus inflationary and
      personnel salary increases.
    \10\ Enacted appropriations less enacted rescissions.
    \11\ Actual offsetting collections. In fiscal year 1997, there was a carryover of $625,031 over the obligational limitation. In fiscal year 1998, there
      was a carryover of $315,586 over the obligational limitation.
    \12\ The fiscal year 1999 enacted appropriations provided that fees not to exceed $2,600,000 shall be credited to this appropriation as offsetting
      collections and that the sum appropriated shall be reduced on a dollar for dollar basis as such offsetting collections are received.

                      user fees and offsetting collections
        Question. Please update the table on page 837 of Senate Hearing
    record 105-851, displaying in tabular form the level of anticipated
    user fee income in the Board's fiscal year 1997, 1998, 1999, and 2000
    budget requests. Please also include columns displaying the President's
    budget assumptions for user fee income in each of these four fiscal
    years. In addition, please display the level of user fee offsets
    included in the appropriations legislation for the Board in fiscal
    years 1997, 1998, and 1999. Finally, please include columns displaying
    the actual amount of offsetting user fees collected in fiscal years
    1997 and 1998, and projected through the end of fiscal year 1999.
        Answer. The following table displays the offsetting collection of
    user fees for fiscal year 1997 through 2000.

    ----------------------------------------------------------------------------------------------------------------
                                                                                    STB
                                                     ---------------------------------------------------------------
                                                                                Fiscal year
                                                     ---------------------------------------------------------------
                                                           1997            1998            1999            2000
    ----------------------------------------------------------------------------------------------------------------
    User Fee Anticipated Income in Budget Request...      $3,000,000      $3,100,000      $2,000,000      $1,200,000
    President's Budget Assumptions..................      15,344,000      14,300,000      16,000,000      17,000,000
    User Fee Offsets in Appropriations Language.....       3,000,000       2,000,000  \14\ 2,600,000  ..............
    Offsetting Collections Actual...................  \15\ 3,625,031  \2\ \16\2,315,    \17\ 400,895  ..............
                                                                                 586
    Projected end of fiscal year....................  ..............  ..............         799,105  ..............
    ----------------------------------------------------------------------------------------------------------------
    \14\ The fiscal year 1999 enacted appropriation provided that fees not to exceed $2,600,000 shall be credited to
      this appropriation as offsetting collections and that the sum appropriated shall be reduced on a dollar for
      dollar basis as such offsetting collections are received.
    \15\ These figures include $2,360,400 in fiscal year 1997, and $67,050 in fiscal year 1998, in user fees
      associated with the Conrail acquisition.
    \16\ This figure includes $966,700 in user fees associated with the Canadian National Railway/Illinois Central
      merger.
    \17\ User Fees collected 10/1/98-03/31/99.

                     fiscal year 2000 user fee collections
        Question. The Office of Management and Budget has proposed that the
    Appropriations Committees strike the fiscal year 1999 language
    providing that any fees collected by the Board be credited to the
    appropriation as offsetting collections. This provision holds the Board
    harmless from any shortfall in the collection of user fees. OMB argues
    that ``such language reduces the incentive to collect fees'' and that
    ``the Board has been criticized for not fully collecting the fees
    required of it under current law.'' How would you refute these
    assertions? Why is this provision necessary?
        Answer. The Board prefers the bill language as provided in the
    fiscal year 1999 appropriations law that allows the user fees to be
    credited to the appropriation as offsetting collections and to reduce
    the general fund appropriation on a dollar for dollar basis as the fees
    are received and credited. Since the submission of fee-related filings
    is unpredictable and can vary depending of the current business climate
    of the country and the rail industry or the business priorities of
    individual rail carriers or rail shippers, the Board has no certainty
    of collecting a specific level of offsetting collections. Prior to this
    provision, the Board was required to spend considerable staff hours
    tracking the user fees collected by category and forecasting the user
    fee categories monthly to derive an end of year projection to ensure
    that there were sufficient resources to supplement the appropriation.
    The financial forecasting relating to day-to-day operations hampered
    fiscal year planning due to the uncertainty of the total resources
    available for the Board's operation.
        OMB asserts that ``such language reduces the incentive to collect
    fees.'' The Board does not generate its offsetting collections. It only
    collects offsetting collections for user fee-related filings, in
    accordance with the Title V of the Independent Offices Appropriation
    Act of 1952 (IOAA), 65 Stat. 290, recodified at 31 U.S.C. 9701, at the
    time the applications or other documents are filed with the Board. The
    Board annually updates its user fee schedule for changes in the costs
    of direct labor, overhead, and other attributable expenses. The Board
    has reviewed its user fee collection schedule and found that many of
    the services and functions it provides to the public cannot be assessed
    a fee because of language contained in the IOAA, which states: ``[a]
    user charge will be assessed against each identifiable recipient for
    special benefits derived from Federal activities beyond those received
    by the general public.'' Specifically, since the beginning of fiscal
    year 1999, the Board has identified 48 activities that it provides to
    the public for which no user fee is currently assessed. Many of the 48
    services and functions entail activities that are done for the public
    good and do not pertain to a specific beneficiary, which is a
    prerequisite for assessing a fee (e.g., rulemakings, class I railroad
    audits, congressionally mandated industry studies and reports, etc.).
    The IOAA does not allow the Board to charge a user fee for these types
    of activities because they are for the public good. The Board has,
    however, earmarked approximately 20 of the 48 activities noted above
    and in the near future will be issuing a Notice of Proposed Rulemaking
    (NPR) to the public for comment, proposing that fees be adopted for the
    20 activities. Additionally, for certain activities--including, among
    others, rate cases and cases involving Amtrak--the fees that the Board
    assesses are far below its costs, because fully cost-based fees would
    block access to the regulatory system. Under the current user fee
    program (bound by the IOAA) the Board will never be able to fully cover
    its budgetary needs through the user fee program.
        Question. The budget request forwarded by OMB includes an
    assumption of $2,600,000 in user fees (the same level as fiscal year
    1999)--your February 9, 1999, budget request from the Board assumes
    $1,200,000 from user fees. If you have updated the fee schedule for
    1999 and increased some fees, why do you anticipate collecting less
    than half the level of fees in fiscal year 2000 that will be collected
    in fiscal year 1999?
        Answer. The budget request forwarded by OMB assumes that the Board
    will collect $2,600,000 in offsetting collections for both fiscal years
    1999 and 2000. The Board first projected in the summer of 1998 that
    offsetting collections in fiscal year 1999 would be about $1,200,000,
    with no large dollar fee-relating filings occurring during the fiscal
    year. Actual offsetting collection receipts for the six-month period
    ending March 31, 1999, are $400,895 and the Board estimates a total
    collection of $1,200,000 by September 30, 1999. Consequently, the Board
    included in its request for fiscal year 2000 the same figure of
    $1,200,000 in offsetting collections. The Board has not been apprised
    of the assumptions made by OMB to arrive at the figure of $2,600,000.
        The Board's 1999 Update was effective on March 5, 1999, and
    increased 40 of the 113 fee items. The increases revised the direct
    labor cost to reflect the 1999 Government-wide salary and locality
    increase of 3.86 percent and the change in the overhead factors. While
    most of the fee increases for fiscal year 1999 are under $1,000,
    certain of the higher dollar increases are in fee-item categories for
    which the Board does not project to receive any filings during fiscal
    year 1999.
                     fiscal year 1999 user fee collections
        Question. What is the current level of assessed user fees in fiscal
    year 1999? What is anticipated to be assessed in the remainder of this
    fiscal year? Please discuss the reasons for any delta above or below
    the enacted level of $2,600,000 in offsetting collections.
        Answer. The Board estimates a collection of $1,200,000 by September
    30, 1999. The Board revised its projection for fiscal year 1999 user
    fee collections to $1,200,000 in the summer of 1998 after the filing of
    the Canadian National/Illinois Central rail merger. At that time, the
    Board was averaging approximately $100,000 in non-merger related fee
    filings per month. In the two previous fiscal years, Class I rail
    mergers, with filing fees of approximately $900,000 each, provided the
    Board with offsetting collections to attain the respective $3,000,000
    and $2,000,000 user fee levels.
        The Board has collected $400,895 in user fees through March 31,
    1999. The fiscal year 1999 appropriations act included the $2,600,000
    level with the expectation that a Class I rail merger filing would
    occur. However, with only 8 Class I railroads remaining after the
    merger activity of the past two fiscal years, the Board does not
    envision any Class I merger filings during fiscal year 1999.
        Question. What was the amount of carryover user fees from fiscal
    year 1998 which was available for obligation after October 1, 1998?
        Answer. The Board collected $2,315,586 in fiscal year 1998, of
    which $315,586 was available to be carried over for obligation after
    October 1, 1998.
                               user fee schedule
        Question. Has the Surface Transportation Board updated its user fee
    schedule for 1999? If so, please detail in tabular form the 1999 user
    fee update schedule, including all fee items or sub-fee items,
    including both the 1998 and 1999 fee amounts, with a column showing the
    amount of increase, if any (similar to the table found on pages 838-840
    of Senate hearing record 105-851).
        Answer. The 1999 User Fee Update was effective on March 5, 1999.
    The following table displays the fee amounts in the 1998 and 1999 user
    fee schedule and the increased amount of each fee item.
    [GRAPHIC] [TIFF OMITTED] TSM.002

    [GRAPHIC] [TIFF OMITTED] TSM.003

    [GRAPHIC] [TIFF OMITTED] TSM.004

    [GRAPHIC] [TIFF OMITTED] TSM.005

    [GRAPHIC] [TIFF OMITTED] TSM.006

    [GRAPHIC] [TIFF OMITTED] TSM.007

    [GRAPHIC] [TIFF OMITTED] TSM.008

                               staffing increases
        Question. The STB has requested an increase of 5 FTEs for fiscal
    year 2000, from 135 to 140. Staffing levels have remained stable for
    the last two years (fiscal years 1998 and 1999). What workload
    increases are anticipated that would necessitate increases in the
    Office of the Secretary; the Office of the General Counsel; the Office
    of Proceedings; and the Office of Economics, Environmental Analysis,
    and Administration? (Please discuss each proposed staffing increase
    individually.)
        Answer. While the number of cases pending at the Board has remained
    relatively constant because, as cases are resolved, new cases are
    filed, the Board is concerned that a large number of current Board
    employees are already eligible to retire under current regulations and
    that an even larger number of employees will become retirement eligible
    within the next 2-3 years. The requested authorization for 140 FTEs
    will provide the Board with the discretion to hire staff in specific
    offices to replace tenured, retirement-eligible staff prior to their
    anticipated retirement date. This is to ensure the required transition
    from current staff, who are becoming retirement-eligible, to new staff,
    who can gain working knowledge and analytical and legal expertise
    necessary to process the Board's caseload and prepare decisions for the
    Board. Between now and September 30, 2002, 38 percent of the Board's
    employees will be eligible for voluntary retirement. The following
    table reflects the retirement eligibility of Board employees.

    ------------------------------------------------------------------------
                                                           9/30
                                             -------------------------------
                                               1999    2000    2001    2002
    ------------------------------------------------------------------------
    Eligible By.............................      22      29      36      50
    ------------------------------------------------------------------------

        Question. If the workload will generally be increasing,
    necessitating a staff increase, why does the Board anticipate that the
    level of offsetting fees it collects will decrease so dramatically?
        Answer. While the Board's workload and the number of cases pending
    at the Board have remained relatively constant, the requested staff
    increase is attributed to the Board's concern that a large number of
    current Board employees are already eligible to retire under current
    regulations and that an even larger number of employees will become
    retirement eligible within the next 2-3 years. With the constant number
    of cases being processed by the Board, and the probability that no
    major merger will be filed in the near future, the level of offsetting
    collections should also remain relatively constant at the estimated
    $1,200,000 level.
          comparison of fiscal year 1999 and fiscal year 2000 budgets
        Question. The Board's fiscal year 2000 request is for $17,000,000,
    $1,000,000 more than the enacted fiscal year 1999 level of $16,000,000.
    In the salaries and expenses detail table included with the Board's
    February 9, 1999, budget submission, it appears that $529,000 of this
    $1,000,000 increase is associated with ``people costs'', this is,
    personnel compensation, benefits, and reimbursable obligations. Please
    detail how much of this personnel-related increase is associated with:
      --the increased fiscal year 1999 pay raise?
      --inflation and the 4.4 percent fiscal year 2000 civilian pay raise?
      --personnel costs for the five new FTEs that the Board plans to hire?
        Answer. The following table provides a crosswalk between the fiscal
    year 1999 enacted appropriation of $16,000,000 and the fiscal year 2000
    budget request of $17,000,000.

    ------------------------------------------------------------------------
                                                  EOY      FTE      Funding
                                                changes  changes    changes
    ------------------------------------------------------------------------
    Mandatory Increases:
        Annualization of fiscal year 1999 Pay   .......  .......       $102
         Raise--3.68 percent..................
        Fiscal year 2000 Pay Raise--4.4         .......  .......        390
         percent..............................
        Fiscal year 2000 Within Grade           .......  .......         47
         Increases............................
                                               -----------------------------
          Subtotal, Mandatory Pay Adjustments.  .......  .......        539
        Staffing Increases to Offset                 5        5   ..........
         Retirements..........................
        Unemployment Compensation to Former     .......  .......        (10)
         Employees............................
                                               -----------------------------
          Subtotal Personnel Compensation and   .......  .......        529
           Benefits...........................
    Mandatory Increases:
        GSA Rental Increase...................  .......  .......         44
        Non-Pay Adjustments (Inflation)--1.0    .......  .......         21
         percent..............................
    Program Changes:
        Equipment Maintenance.................  .......  .......         (4)
        Guard Service.........................  .......  .......         17
        Performance Awards....................  .......  .......         10
        Travel................................  .......  .......          5
        Telephone & Postage...................  .......  .......         26
        Copier Rentals........................  .......  .......         22
        Computer Support Services.............  .......  .......         25
        Technical Interagency Services........  .......  .......        270
        Periodicals & Supplies................  .......  .......         15
        Software & Equipment..................  .......  .......         20
                                               -----------------------------
          Subtotal, Non-Personnel Increases...  .......  .......        471
                                               =============================
          Total Funding Increase..............  .......  .......      1,000
    ------------------------------------------------------------------------

        The requested increase in FTEs will be absorbed within the current
    level of funding by allowing the Board to hire entry level staff to
    replace the tenured, higher-salaried, retirement-eligible staff prior
    to their retirement dates. This would ensure the required transition
    for current staff to new staff, who can gain working knowledge and
    analytical and legal expertise necessary to process the Board's
    caseload and prepare decisions for the Board's adjudication.
                                market dominance
        Question. When the Board investigates a rate, the first question is
    whether the railroad has market dominance. The Staggers Act declared
    that if a rail rate is below 180 percent of the variable cost of
    serving a particular shipper, then the railroad does not have market
    dominance. There is not a presumption that a railroad charging a rate
    above 180 percent of the variable cost has market dominance, but it is
    a trigger for an inquiry to determine whether the railroad faces
    effective competition. The four types of competition concerned are:
    intramodal, intermodal, geographic, and product. Please describe each
    of these four types of competition.
        Answer. ``Intramodal competition'' refers to competition between
    two or more railroads transporting the same commodity between the same
    origin and destination. ``Intermodal competition'' refers to
    competition between rail carriers and other modes for the
    transportation of a particular product between the same origin and
    destination.
        Whereas intramodal and intermodal competition constitute direct,
    point-to-point competition, geographic and product competition are
    indirect. ``Geographic competition'' is the availability of the same
    product from alternative sources, or the ability to ship the product to
    alternative destinations, using different carriers. ``Product
    competition'' exists when other products, moving over different
    carriers, can be substituted for the product covered by the rail rate
    at issue.
        As discussed in the response to the next question, in December 1998
    the Board decided that it will no longer consider evidence of product
    and geographic competition in its market dominance analysis.
        Question. Has the Board decided to drop the geographic and product
    competition determining factors?
        Answer. Yes. In Market Dominance Determinations--Product and
    Geographic Competition, STB Ex Parte No. 627 (STB served Dec. 21,
    1998), the Board decided that it will no longer consider evidence of
    product and/or geographic competition in determining whether a rail
    carrier has market dominance over the traffic involved in a rate
    complaint. The Board concluded that the consideration of these forms of
    competition unduly complicates and prolongs rail rate cases and
    discourages captive shippers from pursuing valid rate complaints.
        The Association of American Railroads and its member railroads have
    filed a petition for reconsideration of that decision, and the Union
    Pacific Railroad has filed a separate petition for clarification or
    reconsideration. These petitions are currently pending before the
    Board.
        Question. A bill has been introduced in the Senate, S.621, which
    would simplify the standards for determining market dominance. Please
    describe how the simplified standard proposed in S.621 differs from the
    Board's current practices. Would this simplified process provide an
    adequate economic analysis of whether a railroad has market dominance?
        Answer. The market dominance provision of S.621 would preclude the
    Board from considering product or geographic competition in its market
    dominance determination. By codifying the Board's decision in Market
    Dominance Determinations--Product and Geographic Competition, STB Ex
    Parte No. 627 (STB served Dec. 21, 1998), such a statutory provision
    would foreclose administrative or court challenges to the Board's
    decision. In its December 1998 decision, the Board concluded that an
    examination of inter- and intramodal competition provides an adequate
    basis for the short, practical analysis expressly called for by
    Congress when it enacted the market dominance requirement.
                                route regulation
        Question. The Board can prevent the closure of routes, prevent
    abandonment or sale of track, or compel a railroad to open up a new
    route. It can also impose arrangements that impel one railroad to let
    another use its track and facilities. Please cite any Board decisions
    in the last three years to impose such arrangements, and give a brief
    description of the circumstances leading to the decision, any appeals
    and their results, and the length of time that the Board's decision is
    in effect.
        Answer. The decisions fall in three general categories: (a) those
    involving service orders relating to rail service emergencies; (b)
    those associated with railroad merger or control proceedings; and (c)
    those involving actions to prevent line abandonments. As reflected in
    the question, the following does not include decisions rendered by the
    Commission (such as its approval of the merger of the Burlington
    Northern and Santa Fe railroads).
        A. Service Orders.--During the summer and fall of 1997, prior to
    the implementation of the ``Union Pacific/Southern Pacific'' merger in
    Texas, many of the lines in and around Houston became severely
    congested, leading to a lengthy and damaging service breakdown
    dramatically affecting rail transport throughout the West. To address
    this crisis, the Board issued a series of unprecedented service order
    decisions pursuant to its emergency authority under 49 U.S.C. 11123,
    directing temporary changes to the way in which rail service was
    provided in the Houston area. Joint Petition for Service Order, Service
    Order No. 1518 (STB served Oct. 31 and Dec. 4, 1997, and Feb. 17 and
    25, 1998). To help divert traffic off of affected Union Pacific
    Railroad Company (UP) and Southern Pacific Transportation Company (SP)
    lines and away from Houston, the Board authorized the Texas Mexican
    Railway Company (Tex Mex) to provide expanded service in and around
    Houston and directed UP to release certain Houston area shippers from
    their obligations under their transportation contracts so that they
    could use either Tex Mex or The Burlington Northern and Santa Fe
    Railway Company (BNSF) in addition to UP. The Board also permitted UP
    to modify some of its operations and directed it to cooperate with
    other carriers to help route traffic around Houston, and it required UP
    to provide, on a weekly basis, extensive data to help it assess the
    conditions on its lines, and, ultimately, the success of its service
    recovery. UP was also required to submit its plans to address the
    region's infrastructure needs.
        The Board's remedies under the service order were purposely
    measured, designed to help free up traffic in the Houston area without
    further aggravating the congestion, inadvertently harming shippers in
    other regions in the West, or impeding UP's own efforts (including
    cooperative efforts with other carriers in the region) to work through
    the emergency and restore adequate service. This approach worked.
    Before the end of the service order period, operations in and around
    Houston became fluid, and service improved significantly. As a result,
    in an order issued in the summer of 1998, the Board allowed the
    emergency service order to expire.
        In addition to the expansive service orders dealing with the
    emergency in the West, the Board has issued a number of more localized
    service orders to address rail service cessation caused by financial
    problems, safety concerns, or weather problems such as washouts.
        B. Merger Decisions. UP/SP Merger.--In the summer of 1996, the
    Board approved the merger of the UP and SP systems. Union Pacific
    Corp.--Control and Merger--Southern Pacific Rail Corp., Finance Docket
    No. 32760 (UP/SP Merger), Decision No. 44 (STB served Aug. 12, 1996)
    (Decision No. 44). On March 23, 1999, the Board's decision approving
    the merger was affirmed by the United States Court of Appeals for the
    District of Columbia Circuit.
        Decision No. 44 imposed numerous conditions to be met before the
    merger could be consummated, including several trackage rights
    conditions, that is, conditions that required one railroad to let
    another use its track and facilities. Some of these conditions were
    agreed to in advance by UP/SP, while some were not. The Board required
    the UP/SP applicants to give approximately 4,000 miles of trackage
    rights to BNSF, generally to establish BNSF as a competitive
    alternative to a unified UP/SP with respect to so-called ``2-to-1''
    traffic (i.e., traffic that, prior to the UP/SP merger, had been open
    both to UP and to SP, but to no other railroad). It also required
    certain BNSF trackage rights over three segments of terminal track
    owned by The Kansas City Southern Railway Company (KCS), in order to
    enable BNSF to provide a competitive alternative to a unified UP/SP in
    the Houston, TX-Memphis, TN and Houston, TX-New Orleans, LA corridors.
    It provided for access by the Utah Railway Company (URC) to additional
    coal sources in Utah, in order to preserve the existing level of rail
    competition for western coal shippers dependent on originations of
    Utah/Colorado coal. The Board imposed trackage rights for the Tex Mex
    over UP/SP lines in Texas to ensure that Tex Mex could continue to
    provide a competitive option for international traffic moving via the
    Laredo, TX gateway. Finally, the Board required a few hundred miles of
    UP/SP trackage rights over BNSF lines, which had been agreed to by the
    involved carriers. These conditions will continue in effect for the
    foreseeable future.
        The UP/SP applicants sought, in addition to approval of common
    control and merger of the UP/SP rail carriers, authority to abandon two
    lines in Colorado, collectively described as the ``Tennessee Pass''
    Line. The Board allowed the discontinuance of operations over the
    Tennessee Pass Line, but required the carrier to keep the line intact
    for the time being in the event it is needed for operations in the
    future. The railroad has since indicated that it no longer expects to
    seek authority to abandon the line within the next 3 years. Any effort
    to abandon the line in the future would require a further request from
    the carrier and approval of the Board.
        In approving the merger, the Board retained jurisdiction for five
    years to impose additional remedial conditions. In 1998, the Board
    exercised its retained jurisdiction when it imposed two additional
    conditions: (1) an efficiency-enhancing ``clear route'' condition
    pursuant to which the Joint Director of the dispatching center operated
    jointly by UP and BNSF in Spring, TX, was granted authority to route
    traffic through Houston over any available route, even a route over
    which the owner of a train does not have trackage rights; and (2) an
    Austin trackage rights condition pursuant to which UP was required to
    grant BNSF approximately four miles of additional trackage rights in
    the Austin, TX area so that BNSF could create a new interchange with a
    short-line railroad in the Austin area. Union Pacific Corp.--Control
    and Merger--Southern Pacific Rail Corp. [Houston/Gulf Coast Oversight],
    STB Finance Docket No. 32760 (Sub-No. 26), Decision No. 10 (STB served
    Dec. 21, 1998).
        Conrail Transaction.--In 1997, the railroads controlled by CSX
    Corporation (CSX) and Norfolk Southern Corporation (NS) sought
    authority to acquire and then divide the assets of Conrail. The Board
    approved the application, with certain conditions that are intended to
    continue in effect into the foreseeable future. CSX Corp. and Norfolk
    Southern Corp.--Control and Operating Leases/Agreements--Conrail Inc.,
    STB Finance Docket No. 33388, Decision No. 89 (STB served July 23,
    1998) (Decision No. 89). Control was consummated on August 22, 1998,
    and the actual division of assets authorized in Decision No. 89 will
    take place on a date that is currently expected to be approximately
    June 1, 1999. Petitions for review of Decision No. 89 are presently
    pending before the United States Court of Appeals for the Second
    Circuit.
        Decision No. 89 established several relevant conditions, which are
    summarized below.
        1. It gave each of the acquiring carriers certain trackage rights
    over the other in order to maximize CSX vs. NS competitive options
    throughout the territory now served by Conrail.
        2. To restore some of the intramodal rail competition that was lost
    in the financial crisis that led to the formation of Conrail in 1976,
    the decision required CSX to allow the Canadian Pacific rail carriers
    to participate in handling traffic over the Conrail line running
    between Selkirk, NY (near Albany, NY) and Fresh Pond, NY (in Queens,
    NY).
        3. The decision imposed an agreement reached between the applicants
    and The National Industrial Transportation League (NITL), which the
    Board modified to enhance competition further. Among other things, it
    required the acquiring carriers to keep open reciprocal switching (an
    arrangement under which a carrier is required to honor certain shipper
    requests for access to carriers that cannot serve them directly) for 10
    years, and it limited the charges for providing these services for five
    years.
        4. To enhance competition, it limited reciprocal switching charges
    in the Buffalo/Niagara Falls area.
        5. To preserve competition existing before the transaction, it
    required that CSX's trackage rights over a line of the former Buffalo
    Creek Railroad be transferred to NS.
        6. To mitigate potential adverse impacts resulting from new
    routings that would have been instituted after the transaction is
    completed, and to preserve essential services and competitive options,
    the decision required the applicants to work out alternative routings,
    and provide trackage rights and other relief, to various small
    railroads, including the Livonia, Avon & Lakeville Railroad
    Corporation, New England Central Railroad, Inc., Wheeling & Lake Erie
    Railway Company (W&LE), and Ann Arbor Railroad.
        7. The decision required certain routing changes or options to
    preserve preexisting competitive options available to Indianapolis
    Power & Light Company and PSI Energy, Inc.
        CN/IC Merger.--In the summer of 1998, the Board received an
    application under which the Canadian National Railway Company (CN), and
    its affiliated carriers would acquire the Illinois Central Railroad
    Company (IC) and its affiliated railroads. In an open voting conference
    held March 25, 1999, the Board voted to approve, with certain
    conditions that are intended to continue in effect into the foreseeable
    future, the acquisition by CN of control of IC, and the integration of
    the rail operations of CN and IC. A written decision reflecting that
    vote is expected to be served by May 25, 1999. In its voting
    conference, the Board voted to impose certain relevant conditions. In
    particular, to protect against a reduction in competition, it required
    the CN/IC carriers to grant to KCS access to three shippers in Geismar,
    LA, in addition to three other Geismar shippers to which CN had already
    agreed to give KCS access. Additionally, to ensure that the Chicago
    gateway remains open for North Dakota's export commodities, the Board
    voted to require the CN/IC applicants to adhere to their representation
    that they will keep open and competitive their Chicago gateway with a
    Canadian Pacific subsidiary that the North Dakota shippers use to
    originate traffic.
        C. The following decisions involved Board actions to prevent rail
    line abandonments:
        1. On July 3, 1996, the Board denied a request by Western Stock
    Show Association (WSSA) to abandon 10,400 feet of rail line in the
    Denver Stockyards, which have been operated by other railroads under
    lease.
        2. On August 28, 1996, the Board denied the request of the Denver
    and Rio Grande Western Railroad (DRGW) to abandon a 1.55-mile stretch
    of track in Salt Lake County, Utah.
        3. On September 10, 1996, the Board denied an application by the
    Boston and Maine Corporation (B&M) to abandon a 3.39-mile rail line in
    Middlesex County, Massachusetts.
        4. On December 31, 1996, the Board denied a petition by the
    Springfield Terminal Railway Company (ST) to discontinue service on and
    by the B&M to abandon a 9.5-mile section of B&M line known as the Canal
    Branch, which runs through Hartford and New Haven Counties in
    Connecticut. After a subsequent proceeding, in April 1998, the Board
    allowed the discontinuance of service and abandonment of the line.
        5. On May 21, 1997, the Board denied the request of San Joaquin
    Valley Railroad (SJVR) to abandon an 18.1-mile line known as the
    Hanford Subdivision near Fresno, California.
        6. On August 1, 1997, the Board denied a request by Owensville
    Terminal Company, Inc. to abandon its 22.5-mile Browns-Poseyville Line
    running between Browns, Illinois and Poseyville, Indiana.
        7. On May 4, 1998, the Board denied the request of Central Railroad
    Company of Indiana (CIND) to abandon its 58-mile Shelbyville Line in
    Central Indiana. CIND petitioned for reconsideration, but ultimately, a
    new owner acquired the line and withdrew the petition.
        8. In two related cases each decided on September 18, 1998, the
    Board denied requests by the Buffalo and Pittsburgh Railroad, Inc., to
    abandon two contiguous lines, one 43 miles long and the other 9.2 miles
    long, near Buffalo, New York.
        9. On March 26, 1999, the Board denied the request of the Arkansas
    and Missouri Railroad Company (AMR) that it order the discontinuance of
    certain trackage rights operated by KCS over a 5.5-mile segment of AMR
    track that connects KCS's branch line from Heavener, Oklahoma, to the
    KCS yard at Fort Smith, Arkansas.
        10. In 10 decisions issued between April 1996 and January 1999, the
    Board rejected various proposals for abandonment or discontinuance
    authorizations, without considering them on their merits, because they
    were procedurally defective. These cases involved lines in Colorado,
    Iowa, Texas, Indiana, Connecticut, Wisconsin, Ohio, and Pennsylvania.
                                revenue adequacy
        Question. What factors does the Board consider in determining
    whether a railroad is revenue adequate?
        Answer. To assess the adequacy of railroad revenues pursuant to 49
    U.S.C. 10704(a)(3), the Board compares a railroad's return on
    investment (ROI) to the cost of capital in the rail industry. The ROI
    for a railroad is computed by dividing the net railway operating income
    (i.e., profits from railroad operations) by the carrier's net
    investment base (i.e., the value of the railroad's assets). The cost of
    capital (the rate of return that debt and equity investors demand to
    supply funds to the rail industry) is measured annually by the Board.
    See, e.g., Railroad Cost of Capital--1997, STB Ex Parte No. 558 (Sub-
    No. 1) (STB served July 16, 1998) (finding that the 1997 cost of
    capital for rail industry was 11.8 percent). If a railroad's ROI is
    less than the cost of capital, then that railroad is determined to be
    revenue inadequate. This revenue adequacy test has been judicially
    approved.
        Question. Why is revenue adequacy a meaningful standard? What does
    it indicate?
        Answer. The statute requires regulatory consideration of revenue
    adequacy [49 U.S.C. 10704(a)(2)] so that railroads will not be deprived
    of the opportunity to earn the income needed to cover total operating
    expenses plus a reasonable return on capital employed in the business.
    This opportunity is critical to the long-term viability of the rail
    industry. If regulatory policy were to cause railroad operations
    continually to lose money or railroad returns to continually
    underperform other investments of comparable risk, the industry would
    not be able to attract and retain the capital needed for continued and/
    or improved operations. Therefore, regulatory policy with respect to
    the rail industry must recognize the revenue needs of the industry.
    However, regulatory policy does not, nor could it, ensure that
    individual railroads are successful in meeting the revenue target
    represented by the Board's revenue adequacy standard.
        As discussed in response to the next question, while a policy that
    affords the railroads the opportunity to be financially healthy is
    essential to the long-term viability of the Nation's rail system, an
    annual determination of which carriers are ``revenue adequate'' is not
    particularly meaningful.
        Question. Please cite the pros and cons of repealing the revenue
    adequacy test.
        Answer. The statutory requirement in 49 U.S.C. 10704(a)(3) that the
    Board make an annual determination of which carriers are achieving the
    target revenue level is not particularly necessary because that
    determination has no immediate regulatory consequences. A railroad that
    has not met the ``revenue adequacy'' target is not entitled to any
    special regulatory treatment. Most significantly, no carrier is allowed
    to charge unreasonable rates on captive traffic, whether or not its
    systemwide revenues are considered adequate. Thus, the requirement for
    an annual determination can safely be repealed.
        In contrast, Congress should not repeal the revenue adequacy
    criteria of 49 U.S.C. 10704(a)(2), which articulate in general terms
    what the revenue needs of the railroad industry are. To ensure that
    regulation does not undermine the long-term viability of the Nation's
    rail system, regulatory action must not ignore railroads' revenue
    needs. Thus, regardless of whether the current procedures used to
    evaluate carriers' revenue needs are modified, the statute should
    retain a provision setting out the financial goals for a healthy rail
    industry that is capable of meeting shippers' needs.
                               stand-alone costs
        Question. Please cite ICC and STB decisions for the past five years
    on whether railroads charge shippers rates that exceed stand-alone
    costs. Is there a clear trend in these decisions?
        Answer. Since 1994, the ICC/STB has issued final decisions in four
    cases where the stand-alone cost (SAC) test was used to evaluate the
    reasonableness of railroad rates. In two of these cases--West Texas
    Util. Co. v. Burlington Northern R.R., No. 41191 (STB served May 3 and
    June 25, 1996), aff'd sub nom. Burlington Northern R.R. v. Surface
    Transp. Bd., 114 F.3d 206 (D.C. Cir. 1997); and Arizona Public Serv.
    Co. v. Atchison T.&S.F. Ry., No. 41185 (STB served July 29, 1997 and
    Apr. 17, 1998)--the Board concluded that the railroads rates were
    unreasonable and ordered substantial reparations. In the other two
    cases--Bituminous Coal-Hiawatha, UT to Moapa, NV, 10 I.C.C.2d 259
    (1994); and McCarty Farms, Inc. v. Burlington Northern, Inc., No. 37809
    et al. (STB served Aug. 20, 1997), aff'd sub nom. McCarty Farms, Inc.
    v. Surface Transp. Bd., 158 F.3d 1294 (D.C. Cir. 1998)--the agency
    found that the challenged rates had not been shown to be unreasonable.
        There is no trend in the outcome of these cases. Each proceeding
    was distinct and the outcomes were dependent on the specific factual
    situation presented in each case. However, the four decisions settled a
    wide variety of issues concerning how to apply the SAC test, and the
    precedent established has given both the shipper community and the rail
    industry guidance in predicting the results of a SAC analysis for other
    individual fact situations. This in turn has encouraged more
    settlements, rather than litigation, of rate disputes. Indeed, while
    the agency has issued only four final decisions in SAC cases, many
    other rate challenges have been resolved by negotiated settlements and
    the complaints withdrawn. It is, of course, impossible to know how many
    other disputes were resolved, based on SAC principles, without a
    complaint having been filed with the Board.
                               competitive access
        Question. Several shipper representatives have claimed that it is
    difficult, if not impossible, to show evidence of anti-competitive
    conduct on the part of a railroad. Is anti-competitive conduct
    difficult to prove? Why?
        Answer. As described more fully in response to an upcoming
    question, the Board has limited authority to compel a railroad to make
    its facilities or services available to another railroad. The statute
    does not provide for access on demand. Therefore, a party seeking a
    ``competitive access'' remedy--whether terminal trackage rights or
    reciprocal switching under 49 U.S.C. 11102, or alternative through
    service under 49 U.S.C. 10705--must show a clear need for such action.
    In other words, it must show that the incumbent carrier is not fully
    meeting its common carrier obligations, but rather is abusing its
    market power--either by extracting unreasonable terms or by failing to
    provide adequate service.
        Because the Board will consider a broad range of evidence to show
    such anticompetitive behavior, this ``anti-competitive conduct''
    standard should not be difficult to meet where market abuse is
    occurring. As the Board explained in its Bottleneck decisions, it will
    be receptive to evidence that an incumbent bottleneck carrier is
    foreclosing more innovative, advantageous, and efficient service,
    especially where the less intrusive remedy of alternative through
    service is sought.
        Question. Has the Board made any decisions to impose access to rail
    customers within an area served by the tracks of more than one
    railroad, based on positive evidence of anti-competitive conduct by the
    plaintiff railroad? If yes, please cite the decisions.
        Answer. The Board has regularly imposed access conditions in the
    merger context to protect shippers that would otherwise lose
    competitive rail service as a result of the merger. For example, as a
    condition to its approval of the Union Pacific-Southern Pacific merger,
    the Board required the merging railroads to afford trackage rights to
    the Burlington Northern Santa Fe over almost 4,000 miles of the merged
    system to serve those facilities that could have been served by both UP
    and SP prior to the merger but would otherwise have no competitive rail
    options remaining after the merger. (These are commonly referred to as
    ``2-to-1'' facilities.) Evidence of anticompetitive conduct is not
    required in the merger context, but only that access is necessary to
    offset anticompetitive effects of the merger.
        In addition, the Board issued an emergency service order providing
    UP shippers temporary access to other carriers (BNSF and the Texas
    Mexican Railway) in an around Houston, Texas, for the maximum period
    allowed under law (270 days), to address the unprecedented rail
    congestion in the West in 1997-98. Again, evidence of anticompetitive
    conduct was not required in this context, but rather evidence that
    there was a service emergency.
        The Board has not, since its inception, considered evidence under
    the anticompetitive conduct standard to determine whether any
    ``competitive access'' relief is warranted. But in its Bottleneck
    decisions the agency made clear that such access will be afforded where
    innovative, advantageous, and more efficient competitive service is
    being precluded.
        Question. Is this type of competitive access relief different from
    ``open access''? If so, how?
        Answer. The access that can now be imposed by the Board upon an
    appropriate showing--in merger cases, in temporary emergency service
    orders, and in ``competitive access'' cases (which include both direct
    physical access to another railroad's facilities and indirect access
    through switching or through-route arrangements)--represent varying
    forms of railroad access. In the ongoing policy debate regarding
    railroad access, the term ``open access'' is sometimes used to refer to
    one or more of these forms of access. As we understand it, however,
    advocates of truly ``open'' access would like for direct physical
    access to a second railroad to be available upon demand, so long as
    that access is operationally practicable, without requiring a showing
    of need for this relief.
        Question. Does the Board have the legal authority to impose open
    access on any or all of the nation's rail network?
        Answer. Because freight rail service in the United States is
    provided by private-sector companies operating over privately owned and
    maintained rail lines, railroads, like other private businesses, do not
    have to make their facilities or services available to competing
    railroads on demand. However, the Board can compel such access in
    certain limited circumstances: as a condition to its approval of a
    railroad merger; in response to a rail service emergency; or when the
    existing ``competitive access'' remedies (terminal trackage rights,
    reciprocal switching, or alternative through routes) are shown to be
    warranted.
        More specifically, the Board has the following authority to direct
    physical access to another carrier's lines:
      --under 49 U.S.C. 11324(c), as a condition to the incumbent's merger
            with another railroad, to remedy anticompetitive effects of the
            merger;
      --under 49 U.S.C. 11123(a), to serve any facilities for a limited
            period of time (not more than 270 days) because of the
            carrier's inability or failure to provide adequate service; and
      --under 49 U.S.C. 11102(a), to serve the incumbent's terminal
            facilities, upon an appropriate showing of need, operational
            practicability, and that it will not impair the ability of the
            incumbent carrier to handle its own business.
        In addition, when an appropriate need is shown, the Board may
    direct an incumbent railroad to afford access indirectly, either:
      --by prescribing through routes under 49 U.S.C. 10705(a) (requiring
            the incumbent to interline traffic with another railroad over a
            designated interchange and thereby create alternative routes
            and rates for a shipper's traffic), or
      --by requiring reciprocal switching under 49 U.S.C. 11102(c) (where,
            for a fee, the incumbent must switch cars to and from another
            railroad so that the latter, even though it cannot physically
            reach a shipper, can constructively offer alternative single-
            line service).
                              bottleneck decision
        Question. Please explain the ICC's 1995 bottleneck decision. Please
    give some examples (using real geographic locations) of how the
    bottleneck decision works. Why would shipper representatives claim that
    they have been ``disappointed'' by this decision?
        Answer. Under longstanding principles of transportation law, rail
    rates ordinarily can be challenged only in their entirety from origin
    to destination. Thus, regardless of whether a shipper receives single-
    line or through (i.e. multi-carrier) service, the shipper can challenge
    only whether the total rate it pays from origin to destination is
    reasonable.
        In the Bottleneck decisions--Central Power & Light Co. v. Southern
    Pac. Transp. Co., Nos. 41242 et al. (Dec. 31, 1996), clarified (Apr.
    30, 1997), aff'd sub nom. MidAmerican Energy Co. v. STB, Nos. 97-1081
    et al. (8th Cir. Feb. 10, 1999)--the Board addressed three cases in
    which utility companies sought to avoid this well-established judicial
    precedent by treating through movements as if they were a series of
    independent movements, with a shipper-designated interchange point as
    an end point for each such movement, and demanding a segment rate for
    each leg that could be separately challenged. In each of the three
    cases, two rail carriers could serve the origin coal mine, but only one
    carrier (the ``bottleneck'' carrier) could serve the utility's
    destination generating plant. The utilities believed that, if they
    could obtain a Board-prescribed rate for the (shorter) destination leg
    and combine it with a competitive rate for the (longer) origin leg,
    they would be able to reduce (perhaps substantially) their total cost
    for the transportation.
        After obtaining public comment and hearing oral argument on the
    broader legal issues and policy implications, the Board concluded that
    the utilities' approach conflicts with the well-settled right of
    carriers to determine, at the outset, the rates and routes they will
    offer for their services. Specifically, under 49 U.S.C. 10701(c), the
    carrier--not the shipper--chooses the type of rates to offer (a single-
    line rate or some form of through rate), and the Board may intervene,
    under 49 U.S.C. 11101 and 10701(d), only to insure that transportation
    is provided and that the rates are reasonable. Moreover, under 49
    U.S.C. 10703(a)(1), the carrier--not the shipper--selects the routes
    over which through service is offered. While the Board may require
    additional through routes to be opened when there is a public need, 49
    U.S.C. 10705(a)(1), the Board may not deprive a carrier of its ``long-
    haul,'' 49 U.S.C. 10705(a)(2), unless the alternative route would be
    more efficient, 49 U.S.C. 10705(a)(2)(D).
        Accordingly, the Board determined that the utilities in the three
    cases addressed in the Bottleneck decision could not, as a matter of
    law, insist that the bottleneck carrier provide separately
    challengeable segment rates. Nor could the shippers insist on a route
    that would ``short-haul'' the bottleneck carrier (i.e. limit its
    participation to less than the full length of haul that it is capable
    of providing) without first making the showing required to obtain an
    alternative through route under 49 U.S.C. 10705. Accordingly, the Board
    dismissed the three utilities' complaints on the grounds that the
    relief sought is not available under the statute.
        The Board also took the opportunity in its Bottleneck decision to
    provide guidance on the availability of bottleneck-segment rates where
    (in contrast to the three dismissed cases) a shipper enters into a rail
    contract under 49 U.S.C. 10709 for transportation over the non-
    bottleneck leg of a through movement. Because the Board may not
    regulate transportation provided under such a contract, 49 U.S.C.
    10709(c)(1), it can only review the rate applicable to the non-contract
    leg of such a through movement. Therefore, a separately challengeable
    bottleneck-segment rate would be available for use in conjunction with
    a contract rate over a through route involving an origin or destination
    not already served by the bottleneck carrier. Moreover, where the
    bottleneck carrier can provide origin-to-destination service, the
    contract may be used to obtain a new through route in order not to
    foreclose innovative, advantageous, and more efficient service.
        Subsequently, in FMC Wyo. Corp. v. Union Pac. R.R., Finance Docket
    No. 33467 (STB Dec. 16, 1997), pet. for review pending sub nom. Union
    Pac. R.R. v. STB, No. 98-1058 (D.C. Cir. filed Feb. 9, 1998), the Board
    ordered Union Pacific to establish separately challengeable bottleneck-
    segment rates for soda ash shipments from Westvaco, WY to interchanges
    in Chicago and East St. Louis, IL, from which the shipper had obtained
    a rail contract for movements to its ultimate destinations. In FMC Wyo.
    Corp. v. Union Pac. R.R., STB Docket No. 42022 (complaint filed Oct.
    31, 1997), the Board is now considering the reasonableness of the
    bottleneck-segment rates set by UP in response to that decision.
        Similarly, in Northern Indiana Public Service Co. v. Consolidate
    Rail Corp., STB Docket No. 42027 (complaint filed Mar. 6, 1998), an
    electric utility seeks a Board order requiring Conrail to establish a
    bottleneck-segment coal rate from an interchange with UP at Momence, IL
    to a generating station in Wheatfield, IN that it could use in
    conjunction with a contract with UP for transportation from the mine to
    Momence. Also, in Minnesota Power, Inc. v. Duluth, Missabe & Iron Range
    Ry., STB Docket No. 42038 (complaint filed Dec. 31, 1998), another
    utility challenges the reasonableness of a bottleneck-segment rate from
    Keenan to Laskin, MN, to be used with a Burlington Northern contract
    for the connecting movement from the Powder River Basin of Wyoming to
    the Keenan interchange with DM&I.
        Shippers have expressed disappointment that the Board did not
    afford them a right to bottleneck-segment rates on demand, even though,
    as explained, current law (as confirmed by the reviewing court) does
    not permit that result. Also, some shippers, fearing that they will not
    be able to obtain such contracts unless the Board first prescribes
    bottleneck-segment rates, have suggested that this relief is illusory.
    However, shippers clearly benefit from the Board's determination that
    separately challengeable bottleneck-segment rates are available where
    there is a contract covering the non-bottleneck leg of a through route,
    and as the cases cited above indicate, some shippers are pursuing
    relief under the Bottleneck decision.
        Question. Please analyze the proposed amendment to Section 11101(a)
    of title 49, United States Code contained in S. 621, which would
    require rail carriers to quote a rate for transportation over a segment
    of line upon the request of a shipper, or if the carrier refused to
    quote such rate, then the STB shall establish the rate. What are the
    pros and cons of this amendment?
        Answer. The proposed amendment would give shippers the rights they
    sought in the Bottleneckdecision, rights that are not available under
    current law. By requiring railroads to provide separately challengeable
    rates for any route segment designated by shippers, it could lead to
    lower rates for many shippers in the short-term by giving shippers that
    are now captive to one railroad a choice among competing railroads.
        The long-term impacts, however, are questionable. The resulting
    revenue impact of a lower overall rate structure could affect carriers'
    ability to cover the costs of, and support reinvestment in, the
    existing rail system. This in turn could lead to potentially
    significant changes in the shape and condition of the rail system, as
    railroads may need to shed financially marginal lines and reduce new
    investment in the remainder of their systems. While some shippers might
    continue to benefit from lower rates, others could see their rates
    increase over the long term to make up for a shrinking traffic base, or
    they could lose service altogether unless short-line or regional
    railroads were able to step in and provide service. In short, the
    potential winners and losers from a regulatory change of the kind
    proposed in S. 621 could depend upon geographic location and type of
    traffic. It is, of course, for Congress to decide whether the prospect
    of a smaller Class I rail system that would serve fewer, and a
    different mix of, customers than those that receive rail service today
    is desirable or acceptable.
        There could also be a potentially significant, more immediate
    budgetary impact on the Board from this provision of S.621, as it would
    allow shippers to challenge such rates even when they are not ready to
    use that rate and in fact may never use the rate. By overriding current
    policy that limits rate challenges to rates being used and excludes
    hypothetical rate disputes, this provision could increase the workload
    of the agency significantly.
        Question. This decision was recently upheld in the 8th District
    Circuit Court. Please provide a copy of that court decision for the
    record.
        Answer. A copy of the court's decision in MidAmerican Energy Co. v.
    STB, Nos. 97-1081 et al. (8th Cir. Feb. 10, 1999), is attached.
                                     ______

             United States Court of Appeals for the Eighth Circuit

                                  No. 97-1081
        MidAmerican Energy Company, Petitioner, Western Coal Traffic
    League, Intervenor on Appeal, v. Surface Transportation Board, United
    States of America, Respondents, Norfolk Southern Railway Company; Union
    Pacific Corporation; Southern Pacific Transportation Company;
    Consolidated Rail Corporation; Association of American Railroads,
    Intervenors on Appeal.
                                  No. 97-1284
        Central Power & Light Company, Petitioner, Western Coal Traffic
    League, Intervenor on Appeal, v. Surface Transportation Board; United
    States of America, Respondents, Norfolk Southern Railway Company; Union
    Pacific Corporation; Southern Pacific Transportation Company;
    Consolidated Rail Corporation; Association of American Railroads,
    Intervenors on Appeal.
                                  No. 97-1331
        National Industrial Transportation League, Petitioner, Western Coal
    Traffic League, Intervenor on Appeal, v. Surface Transportation Board;
    United States of America, Respondents, Pennsylvania Power & Light
    Company; Norfolk Southern Railway Company; Union Pacific Corporation;
    Southern Pacific Transportation Company; Consolidated Rail Corporation;
    Association of American Railroads, Intervenors on Appeal.
                                  No. 97-1332
        Union Pacific Railroad Company; Southern Pacific Transportation
    Company, Petitioners, v. Surface Transportation Board; United States of
    America, Respondents, Pennsylvania Power & Light Company; Norfolk
    Southern Railway Company; MidAmerican Energy Company; National
    Industrial Transportation League; Union Pacific Corporation;
    Consolidated Rail Corporation; Association of American Railroads;
    Western Coal Traffic League, Intervenors on Appeal.
                                  No. 97-1333
        Consolidated Rail Corporation, Petitioner, v. Surface
    Transportation Board; United States of America, Respondents,
    Pennsylvania Power & Light Company; Norfolk Southern Railway Company;
    National Industrial Transportation League; Union Pacific Corporation;
    Southern Pacific Transportation Company; Association of American
    Railroads; Western Coal Traffic League, Intervenors on Appeal.
                                  No. 97-1335
        Association of American Railroads, Petitioner, v. Surface
    Transportation Board; United States of America, Respondents,
    Pennsylvania Power & Light Company; Norfolk Southern Railway Company;
    National Industrial Transportation League; CSX Transportation, Inc.;
    Union Pacific Corporation; Southern Pacific Transportation Company;
    Consolidated Rail Corporation; Western Coal Traffic League, Intervenors
    on Appeal.
                                  No. 97-1583
        Western Coal Traffic League, Petitioner, v. Surface Transportation
    Board; United States of America, Respondents, Union Pacific
    Corporation; Southern Pacific Transportation Company; Consolidated Rail
    Corporation; Association of American Railroads, Intervenors on Appeal.
                                  No. 97-2204
        Western Resources, Inc., Petitioner, Western Coal Traffic League,
    Intervenor on Appeal, v. Surface Transportation Board; United States of
    America, Respondents, Consolidated Rail Corporation; Union Pacific
    Railroad Company; Southern Pacific Transportation Company; Association
    of American Railroads; Norfolk Southern Railway Company, Intervenors on
    Appeal.
                                  No. 97-2206
        Association of American Railroads, Petitioner, v. Surface
    Transportation Board; United States of America, Respondents,
    Pennsylvania Power & Light Company; Norfolk Southern Railway Company;
    Western Coal Traffic League; National Industrial Transportation League;
    MidAmerican Energy Company; Western Resources, Intervenors on Appeal.
                                  No. 97-2260
        Consolidated Rail Corporation; Petitioner, Association of American
    Railroads, Intervenor on Appeal, v. Surface Transportation Board;
    United States of America, Respondents, Pennsylvania Power & Light
    Company; Norfolk Southern Railway Company; Western Coal Traffic League;
    National Industrial Transportation League; MidAmerican Energy Company,
    Intervenors on Appeal.
                                  No. 97-2303
        Union Pacific Corporation; Southern Pacific Transportation Company,
    Petitioners, Association of American Railroads, Intervenor on Appeal,
    v. Surface Transportation Board; United States of America, Respondents,
    Pennsylvania Power & Light Company; Norfolk Southern Railway Company;
    Western Coal Traffic League; National Industrial Transportation League;
    MidAmerican Energy Company, Intervenors on Appeal.
                                  No. 97-2328
        Western Coal Traffic League, Petitioner, v. Surface Transportation
    Board; United States of America, Respondents, Consolidated Rail
    Corporation; Association of American Railroads; Norfolk Southern
    Railway Company; Union Pacific Railroad Company; Southern Pacific
    Transportation Company, Intervenors on Appeal.
                                  No. 97-2462
        National Industrial Transportation League; Petitioner, Western Coal
    Traffic League, Intervenor on Appeal, v. Surface Transportation Board;
    United States of America, Respondents, Union Pacific Railroad Company;
    Southern Pacific Transportation Company; Association of American
    Railroads; Consolidated Rail Corporation, Intervenors on Appeal.
                                  No. 97-2464
        MidAmerican Energy Company, Petitioner, Western Coal Traffic
    League, Intervenor on Appeal, v. Surface Transportation Board; United
    States of America, Respondents, Union Pacific Railroad Company;
    Southern Pacific Transportation Company; Association of American
    Railroads; Consolidated Rail Corporation, Intervenors on Appeal.
      Petition for Review of an Order of the Surface Transportation Board
                          Submitted: November 18, 1997
                            Filed: February 10, 1999
      Before WOLLMAN and HANSEN, Circuit Judges, and STEVENS,\1\ District
                                     Judge.
    ---------------------------------------------------------------------------
        \1\ The HONORABLE JOSEPH E. STEVENS, United States District Judge
    for the Western District of Missouri, sitting by designation. Judge
    Stevens died on December 18, 1998. This opinion is consistent with the
    views he expressed at our post-argument conference.
    ---------------------------------------------------------------------------
                            WOLLMAN, Circuit Judge.
        This is a consolidated action involving MidAmerican Energy Company
    (MidAmerican), Central Power & Light Company (CP&L), and Pennsylvania
    Power & Light Company (PP&L) (collectively the utilities). They
    petition for review of two orders of the Surface Transportation Board
    (the Board) dismissing their complaints against rail carriers. The
    carriers cross-appeal from the portion of the Board's decisions
    regarding reasonableness review of contractual shipping rates, arguing
    that the issue was not ripe for adjudication. We affirm the dismissal
    of the utilities' complaints. We dismiss the cross-appeal for lack of
    jurisdiction.

                                       I.

        MidAmerican ships coal approximately 750 miles from the Powder
    River Basin in Wyoming to its generating facility near Sergeant Bluff,
    Iowa. At the time it filed its complaint, MidAmerican was shipping the
    coal from origin to destination under contract with the Union Pacific
    Railroad (UP). This contract was scheduled to expire at the end of
    1997. Anticipating the contract's expiration, MidAmerican began to
    compare UP's rates with those of other carriers to obtain the most
    favorable shipping rates. The only other carrier offering rail service
    originating in the Powder River Basin is the Burlington Northern
    Railroad (BN).
        BN does not service the final 90 miles of the route, a stretch from
    Council Bluffs, Iowa, to the generating station. Such a rail segment is
    commonly termed a ``bottleneck'', because it is serviced by only one
    carrier. Thus, MidAmerican could not directly compare the rates of BN
    and UP, as UP is the only carrier capable of shipping all the way to
    the generating station. To obtain a competitive rate for the 660-mile
    stretch from Wyoming to Council Bluffs, MidAmerican requested that UP
    provide a rate for its service over the bottleneck.
        UP refused to provide the rate. Instead, it provided a rate for the
    entire route from the Powder River Basin to the generating station.
    This precluded MidAmerican from using BN as a carrier from Wyoming to
    Council Bluffs, essentially extending the bottleneck over the entire
    750-mile route. Consequently, MidAmerican brought an action before the
    Board requesting a rate prescription over the 90-mile bottleneck
    segment. Although MidAmerican could not challenge a local ``unit-
    train'' rate for the bottleneck service, it asked the Board to
    prescribe a reasonable rate for the bottleneck if it found the
    published ``class'' rate for the 90-mile stretch unreasonable.\2\
    ---------------------------------------------------------------------------
        \2\ A local unit-train rate is a published rate applicable to
    transport of a trainload of a specific good between two points on a
    carrier's line. A local class rate, on the other hand, is a published
    rate applicable to transport of a certain type of good in smaller
    quantities between two points on a carrier's line. Railroads must
    maintain class rates because of their common carrier obligation to
    transport goods to any point on their lines upon request by a shipper.
    See Thompson v. United States, 343 U.S. 549, 558 (1952); Westinghouse
    Elec. Corp. v. United States, 388 F. Supp. 1309, 1311 (W.D. Pa. 1975)
    (citing New York v. United States, 331 U.S. 284, 289-90 (1947)).
    Because it is more costly for carriers to offer service for unspecified
    quantities of goods, however, class rates are seldom used and are
    generally significantly higher over the same stretch of rail. See
    Routing Restrictions over Seatrain Lines, Inc., 296 I.C.C. 767, 773
    (1955); Burlington Northern, Inc. v. United States, 555 F.2d 637, 639
    (8th Cir. 1977) (noting that a class rate for coal shipment was more
    than double the unit-train rate).
    ---------------------------------------------------------------------------
        CP&L transports coal from the Powder River Basin in Wyoming to its
    Coleto Creek generating station in Texas. Although both BN and UP offer
    rail service originating at the coal mines, the Southern Pacific
    Railroad (SP) is the only carrier from an interchange point in
    Victoria, Texas, to Coleto Creek.\3\ UP's lines run from Wyoming to
    Victoria; BN's lines run from Wyoming to Fort Worth, Texas, where SP's
    service to Victoria and Coleto Creek begins. Therefore, UP and BN
    directly compete on the portion of the route from Wyoming to Forth
    Worth. SP and UP directly compete on the portion from Fort Worth to
    Victoria. After both BN and UP indicated a willingness to offer
    competitive rates for their service, CP&L requested that SP provide it
    a local unit-train rate for the segment from Fort Worth to Coleto
    Creek, which represented SP's longest haul, or for the bottleneck from
    Victoria to Coleto Creek.
    ---------------------------------------------------------------------------
        \3\ Based on stipulations entered into by the parties prior to the
    Board's hearing, we will disregard the fact that SP and UP have merged
    since the initiation of this action, resulting in UP's ability to offer
    unit-train service from Wyoming to Coleto Creek.
    ---------------------------------------------------------------------------
        SP refused to provide either rate, offering instead to provide a
    joint rate with UP. CP&L chose to obtain a unit-train rate from UP for
    service from Wyoming to Victoria, and to ship from Victoria to Coleto
    Creek under SP's class rate.\4\ It could thus take advantage of neither
    the competition between UP and BN from Wyoming to Fort Worth, nor the
    competition between SP and UP from Fort Worth to Victoria.
    Subsequently, CP&L brought a complaint before the Board challenging the
    class rate as unreasonable and requesting a rate prescription for the
    bottleneck segment.\5\
    ---------------------------------------------------------------------------
        \4\ SP's class rate for the coal shipment from Victoria to Coleto
    Creek was $19.95 per ton. At the Board's hearing, CP&L offered the
    testimony of eight expert witnesses that the highest reasonable rate
    for this stretch was $0.63 per ton, less than one-thirtieth of the
    actual class rate charged.
        \5\ Some shippers have eschewed the role of supplicant to the Board
    and have constructed connecting lines on their own. See Daniel
    Machalaba, Tired of Costs, Delays of Railroads, Firms Lay Their Own
    Tracks, Wall St. J., February 6, 1998, at A-1.
    ---------------------------------------------------------------------------
        PP&L can transport its coal from either of two mines in central
    Appalachia to its four generating facilities on the eastern seaboard.
    One of the mines is serviced by the Norfolk Southern Railroad (NS), the
    other is serviced by CSX. Neither NS nor CSX offers service all the way
    to PP&L's generating stations. NS transfers its shipments to the
    Consolidated Rail Corporation (Conrail) at an interchange point in
    Hagerstown, Maryland; CSX transfers to Conrail in Lurgan, Pennsylvania.
    Conrail thus controls a bottleneck that services PP&L's four generating
    facilities. To obtain competitive rates for the portion of the route
    serviced by NS and CSX, PP&L requested that Conrail provide it local
    unit-train rates from the interchange points to the generating
    stations.\6\
    ---------------------------------------------------------------------------
        \6\ As is by now well known, subsequent to the submission of this
    case the Board approved the division of Conrail between NS and CSX. See
    Bruce Ingersoll, U.S. Approves Plan to Divide Conrail in Two, Wall St.
    J., June 9, 1998, at A-3 (``This transaction, as conditioned, creates
    two strong competitors in the East that can handle the transportation
    needs of an expanding economy,'' said [Board] Chairwoman Linda Morgan).
    See also Norfolk Southern, CSX assume control of Conrail, Railroad
    NewsWire (Aug. 27, 1998) . What effect the NS's acquisition of Conrail's lines in
    Pennsylvania will have on PP&L's transportation needs remains to be
    seen.
    ---------------------------------------------------------------------------
        Conrail refused to provide such rates. Consequently, PP&L filed a
    complaint challenging Conrail's class rates from the interchange points
    to the stations and requesting that Conrail be required to provide
    local unit-train rates instead.\7\ Conrail maintained that class rates
    were inappropriate for the route in question and asked the Interstate
    Commerce Commission (ICC) \8\ for an opportunity to provide unit-train
    rates. The ICC ordered Conrail to do so in a decision dated January 17,
    1995.
    ---------------------------------------------------------------------------
        \7\ Although Conrail admits that PP&L sent test shipments from the
    interchange points to its generating stations prior to filing the
    complaint, it denies that such shipments were sent using a class rate.
        \8\ The ICC was subsequently replaced by the Board in the ICC
    Termination Act of 1995, Pub. L. No. 104-88, 109 Stat. 803 (Dec. 29,
    1995). The Termination Act also substituted the new Interstate
    Transportation Act for the earlier Interstate Commerce Act, both
    located at Subtitle IV of Title 49 of the United States Code. Pub. L.
    No. 104-88 Sec. Sec. 102, 103, and 106. Although most of the provisions
    of the Interstate Commerce Act were re-enacted in the Interstate
    Transportation Act, the parties have relied, and we will base our
    decision, on the provisions of the old act because these cases were
    initiated before passage of the Termination Act.
    ---------------------------------------------------------------------------
        Rather than providing the rates, however, Conrail negotiated a
    joint rate for origin-to-destination service with CSX and a
    proportional rate for similar service with NS. As a result, Conrail,
    rather than PP&L, took advantage of the competition between NS and CSX
    for service from the central Appalachian mines. PP&L then petitioned
    the Board for rate prescription on the bottleneck based on a renewed
    challenge to the class rates.
        Although petitioners' cases involve distinct facts, they were
    consolidated by the Board for adjudication on common issues regarding
    ``the extent to which bottleneck carriers may exert their market power
    over the routes and rates made available to shippers for needed rail
    service.'' Central Power & Light Co. v. Southern Pac. Transp. Co., No.
    41242, 1996 STB LEXIS 358, at * 8-* 9 (Surface Transp. Bd. Dec. 27,
    1996) (Bottleneck I). Before reaching its decision, the Board solicited
    commentary on bottleneck regulation from all potentially affected
    shipper and carrier organizations. After oral argument and
    consideration of the submitted materials, the Board denied the
    utilities' requests for bottleneck relief.\9\
    ---------------------------------------------------------------------------
        \9\ The complaints of MidAmerican and CP&L were dismissed in full;
    that portion of PP&L's complaint requesting rate prescription over the
    bottleneck segments was also dismissed. PP&L had amended its complaint
    to also challenge the joint and proportional rates with CSX and NS; the
    Board allowed this challenge to proceed, and the parties subsequently
    reached a settlement on that issue. We will thus address only the
    utilities' requests for rate prescription on the bottleneck segments in
    this appeal.
    ---------------------------------------------------------------------------
        In considering the utilities' requests, the Board grappled with the
    tension between two competing policies expressed in the Interstate
    Commerce Act (the Act). Under 49 U.S.C. Sec. 10701a(a) (1995) (now
    10701(c)), rail carriers possess broad discretion in setting rates and
    routes. This reflects Congress's goal of deregulating the railroad
    industry and allowing railroads to achieve revenue adequacy by
    competing on a free-market basis. See id. Sec. 10101a(3) (now 10101(3))
    (providing for adequate revenues); id. Sec. 10101a(1) (now 10101(1))
    (allowing ``the demand for services'' to dictate reasonable rail
    rates). Under sections 10101a(6) and 10701a(b) (now 10101(6) and
    10701(d)), however, some rate regulation is required when carriers
    possess monopoly power over a section of rail. These provisions codify
    railroads' common carrier obligations, which require them to provide
    service at reasonable rates to all shippers upon request.
        The Board resolved this tension in favor of the ``rate freedom'' of
    bottleneck carriers. Specifically, it held that bottleneck carriers
    satisfy their common carrier duties and thus comply with the Act by
    providing origin-to-destination service that includes the bottleneck,
    as in MidAmerican's case, or by providing joint or proportional service
    with other carriers that includes transportation over the bottleneck,
    as in CP&L's and PP&L's cases. In addition, the Board held that
    shippers may not challenge class rates as an ``indirect basis for
    obtaining prescription of a local unit-train rate'' for bottleneck
    segments. Subsequently, the utilities moved for clarification and
    reconsideration of the decision. The Board responded by issuing a
    second decision, granting in part the motion for clarification and
    denying the motion for reconsideration. See Central Power & Light Co.
    v. Southern Pac. Transp. Co., No. 41242, 1997 STB LEXIS 91, at * 28
    (Surface Transp. Bd. Apr. 28, 1997) (Bottleneck II). The utilities
    appeal from both rulings.

                                      II.

        Before we address the specific issues raised in these cases, we
    briefly review the relevant history of railroad regulation. From its
    passage in 1887 until the mid-1970s, the Interstate Commerce Act
    provided for a strict regulatory framework to govern the federal
    railroad industry. This legislative approach resulted in an industry
    chronically plagued by capital shortfalls and service inefficiencies.
    See H.R. Rep. No. 96-1035, at 33 (1980), reprinted in 1980 U.S.C.C.A.N.
    3978, 3978; Coal Exporters Ass'n of United States v. United States, 745
    F.2d 76, 81 (D.C. Cir. 1984).
        To assure railroads greater freedom in establishing routes and
    rates, Congress modified the Act with the Railroad Revitalization and
    Regulatory Reform Act (4R Act), Pub. L. No. 94-210, 90 Stat. 31 (1976),
    and the Staggers Rail Act (Staggers Act), Pub. L. No. 96-448, 94 Stat.
    1895 (1980). See H.R. Conf. Rep. No. 96-1430, at 79 (1980), reprinted
    in 1980 U.S.C.C.A.N. 3978, 4110. These acts were intended to end
    ``decades of ICC control over maximum rates and to permit carriers not
    having market dominance to set rates in response to their perception of
    market conditions. Midtec Paper Corp. v. United States, 857 F.2d 1487,
    1506 (D.C. Cir. 1988).
        Underlying these reform efforts was the notion that market forces
    would operate in the rail industry as they do in other spheres.
    Congress believed that free competition for rail services would ensure
    that consumer demand dictated the optimal rate level, while
    facilitating enough long-term capital investment to maintain adequate
    service. Congress was also mindful, however, that the free market would
    protect consumers only if there was ``effective'' competition.
    Therefore, the new enactments included provisions allowing regulatory
    intervention where competition would not control prices. See 4R Act
    Sec. 101(b), 90 Stat. 31, 33; Staggers Act Sec. 101(a), 49 U.S.C.
    Sec. 10101a(6) (now 10101(6)); Coal Exporters, 745 F.2d at 81 n.6.
        Indeed, in bottleneck situations the Staggers Act actually
    ``increased the ICC's regulatory power ``by authorizing the agency to
    require railroads to enter into agreements to `switch' other railroads'
    cars to and from shippers located along each other's lines * * *.
    Baltimore Gas & Elec. Co. v. United States, 817 F.2d 108, 113 (D.C.
    Cir. 1987); see 49 U.S.C. Sec. 11103 (now 11102). After the 4R and
    Staggers Acts, the agency (previously the ICC, now the Board) is still
    required to use rate prescription and other remedies such as reciprocal
    switching arrangements to ensure reasonable shipping rates on
    bottlenecks. It is also responsible for ensuring that free competition
    is preserved to the greatest extent possible on non-bottleneck
    segments.
        Congress's decision to deregulate the railroad industry has been
    largely successful. Experts for both sides in these cases have
    acknowledged that competition has led to more efficient routes,
    increased profits, better service, and an enhanced ability to attract
    capital investment. See, e.g., Verified Statement of William J. Baumol
    & Robert D. Willig at 6-7, J.A. at 1111-12; Verified Statement of
    Alfred E. Kahn at 15-16, J.A. at 2931-32. However, the experts dispute
    the role of bottleneck rail segments in increasing profits and
    facilitating the overall revenue adequacy of the railroad industry.

                                      III.

        We have jurisdiction under 28 U.S.C. Sec. Sec. 2321 and 2341 (Supp.
    1998), which provide for review of the Board's decisions. Because
    Congress has entrusted the Board with interpreting and administering
    the Act, in reviewing its decisions we ask only whether they are
    ``based on a permissible construction of the statute.'' Caddo Antoine &
    Little Missouri R.R. Co. v. United States, 95 F.3d 740, 746 (8th Cir.
    1996) (quoting Chevron, U.S.A., Inc. v. Natural Resources Defense
    Council, Inc., 467 U.S. 837, 843 (1984)). Notwithstanding this narrow
    standard of review, we must thoroughly examine the record and inquire
    whether the Board correctly applied the proper legal standards. City of
    Cherokee v. ICC, 641 F.2d 1220, 1226-27 (8th Cir. 1981). We are
    obligated to overturn the Board's decisions if there are ``compelling
    indications that the Board's interpretations were incorrect.'' GS
    Roofing Prods. Co. v. Surface Transp. Bd., 143 F.3d 387, 391 (8th Cir.
    1998).
        As the utilities and shipper organizations assert, carriers are
    bound both at common law and under the Act to``provide * * *
    transportation or service on reasonable request'' to any shipper. GS
    Roofing, 143 F.3d at 391. This duty not only requires carriers to
    provide service on their lines, but also requires rates for such
    service to be reasonable. See Thompson, 343 U.S. at 554; 49 U.S.C.
    Sec. 10701a(b) (now 10701(d)).
        As the Board and the railroads assert, however, there are
    significant limitations to the common carrier duties. It is usually at
    the discretion of the carrier how it wishes to satisfy its duty to
    provide rates and service. See 49 U.S.C. Sec. 10701a(a) (now 10701(c)).
    Consequently, a carrier may in most circumstances provide service in
    the form of a joint rate with another railroad, such as Conrail did
    with CSX in PP&L's case, or a proportional rate, as Conrail did with
    NS. See, e.g., Great Northern Ry. Co. v. Sullivan, 294 U.S. 458, 463
    (1935) (holding that a shipper may not recover damages based upon the
    carrier's portion of a rate if the carrier chooses to offer only a
    joint rate with another carrier, unless the entire joint rate is
    unreasonable); Routing Restrictions, 296 I.C.C. at 774 (stating that
    nothing in the Act requires carriers to establish routes over all
    possible interchanges).
        Further, a carrier generally may provide common carrier service in
    a manner that protects its ``long hauls.'' See 49 U.S.C. Sec. 10705(a)
    (now 10705(a)). The Board may order a carrier to provide service over a
    shorter haul than it wishes only if the Board first makes specific
    findings under the Act. See id. Sec. 10705(a)(2). Thus, a carrier such
    as UP may normally choose to provide service to a shipper such as
    MidAmerican over a route longer than the 90 miles from Council Bluffs
    to Sergeant Bluff, unless the longer route would be ``unreasonably
    long'' or inefficient. See Thompson, 343 U.S. at 559-60 (holding that
    the ICC was required to make findings regarding the short-hauling
    exceptions before compelling a railroad to provide service over a
    shorter portion of rail than it wished).
        Therefore, the Act protects both shippers and carriers. It
    guarantees that shippers will receive rail service at reasonable rates,
    and it allows carriers to provide such service in a manner that
    achieves revenue adequacy.
        The Board has recognized that an important part of achieving
    revenue adequacy is differential pricing. See Consolidated Rail Corp.
    v. United States, 812 F.2d 1444, 1453-54 (3d Cir. 1987) (citing Coal
    Rate Guidelines, Nationwide, 1 I.C.C.2d 520 (1985)). This is a practice
    by which carriers charge a higher mark-up on rail segments where demand
    elasticity is low, such as bottlenecks, to compensate for low mark-ups
    on competitive segments. See Coal Rate Guidelines, 1 I.C.C.2d at 526-
    27. Therefore, ``services may be priced above their attributable costs
    according to observable market demand, but only to the extent necessary
    to cover total costs, including return on investment of an efficient
    carrier.'' Id. at 533-34. Accordingly, in reviewing the reasonableness
    of bottleneck rates, the Board allows bottleneck carriers to charge up
    to stand-alone cost (SAC), a level that is significantly higher than
    marginal cost.\10\ See id. at 526-29.
    ---------------------------------------------------------------------------
        \10\ Stand-alone cost represents the minimum amount that a
    hypothetical carrier, or the shipper itself, would have to spend to
    build a new rail line to compete over the bottleneck segment. See Coal
    Rate Guidelines, 1 I.C.C.2d at 528-29. This measure better allows
    railroads to achieve true revenue adequacy, because it takes into
    account profits and the cost of long-term capital investment, while
    marginal cost does not. See id. at 526.
    ---------------------------------------------------------------------------
        In the present case, the Board determined that exploiting
    bottlenecks by refusing to provide separately challengeable bottleneck
    rates also assists carriers in achieving revenue adequacy.
    Specifically, in the MidAmerican case, allowing UP to provide only an
    origin-to-destination rate enables it to charge up to SAC over the
    entire 750-mile route, rather than just over the 90-mile section from
    Council Bluffs to Sergeant Bluff. Were UP required to provide a
    separate bottleneck rate, it would be forced to charge lower
    competitive rates from the mine to Council Bluffs. Similarly, in the
    CP&L and PP&L cases, allowing the bottleneck carriers to negotiate
    through rates and joint rates for origin-to-destination service enables
    them, rather than the shippers, to take advantage of the competition
    between non-bottleneck carriers. After negotiating competitive rates
    for the non-bottleneck carriage, the bottleneck carriers will be able
    to charge the bottleneck shippers up to SAC for the entire route,
    rather than just over the bottleneck. See Western Resources, Inc. v.
    Surface Transp. Bd., 109 F.3d 782, 787 (D.C. Cir. 1997) (describing the
    behavior of bottleneck carriers).
        Based on these economic factors and extensive expert testimony, the
    Board concluded that the Act did not require carriers to provide
    separate bottleneck rates. Regardless of how we would resolve the
    tension in the Act if we were to independently rule on the utilities'
    claims, we cannot say that the Board's interpretation was incorrect.
    The Board's considerable expertise in the economic underpinnings of the
    railroad industry is entitled to a great degree of deference, and its
    decision to allow carriers to determine how they wish to fulfill their
    duties under the Act is consistent with the current national railroad
    policy of maximizing carrier discretion in setting routes and rates.
    Because the utilities have not demonstrated that the Board's rulings
    were incorrect, we affirm the Board's dismissal of the utilities'
    complaints.
        We note that the Board's decisions explicitly provide the utilities
    three potential avenues of recourse. First, bottleneck shippers may
    obtain contracts for service over the competitive segments of rail. See
    Bottleneck I, 1996 STB LEXIS 358, at * 30-* 31; Bottleneck II, 1997 STB
    LEXIS 91, at * 22. Once a contract is secured, the bottleneck carrier
    will be required to provide local service over the bottleneck in light
    of its common carrier obligations. Bottleneck II, at * 22. Because such
    service will be actually ``held out'' to bottleneck shippers,\11\ the
    Board will be required to review the bottleneck rate for
    reasonableness. See Bottleneck I, at * 12-* 14 (refusing to review
    class rates over the bottlenecks in these cases because the carriers
    did not hold out such rates for bulk coal shipments). For an example of
    the Board's willingness to review bottleneck rates that are held out to
    shippers, see Burlington Northern Railroad Company v. Surface
    Transportation Board, 114 F.3d 206, 215 (D.C. Cir. 1997) (West Texas
    II) (engaging in reasonableness review of a bottleneck rate, and
    finding a rate of $19.36 per ton for coal unreasonable).
    ---------------------------------------------------------------------------
        \11\ Historically, a shipper could not challenge a rate unless the
    carrier held out service at that rate. See Routing Restrictions, 296
    I.C.C. at 774-75 (stating that shippers cannot force carriers to ship
    over shorter rail segments than they wish unless carriers hold out such
    service to the public). If a carrier denied holding out service for a
    given rail segment, however, a shipper could show that the carrier
    implicitly held out service. Shippers did this by showing either that
    the carrier was required to provide such service under its common
    carrier obligations, or by demonstrating an ``established interchange''
    for such service with another carrier. See id. at 774.
    ---------------------------------------------------------------------------
        Indeed, as soon as a bottleneck shipper obtains a contract for non-
    bottleneck carriage, bottleneck carriers would have no incentive to
    refuse to provide a local rate for bottleneck service. The Board's
    regulations clearly allow bottleneck carriers to charge up to SAC for
    bottleneck service, and carriers would not attempt to charge more than
    SAC because they would immediately be subject to rate reasonableness
    review by the Board. See Western Resources, Inc. v. Surface Transp.
    Bd., 109 F.3d at 789-90 (noting that bottleneck carriers will likely
    negotiate reasonable rates with bottleneck shippers to avoid Board
    review of bottleneck rates).
        Second, if the utilities can adequately demonstrate an absence of
    effective competition \12\ over the entire origin-to-destination route,
    they may challenge the origin-to-destination rate provided by the
    carrier. See Bottleneck I, at * 38-* 39 (noting that PP&L properly
    challenged the joint and proportional rates that Conrail negotiated
    with CSX and NS); Bottleneck II, at * 9 (same). Although this would not
    allow the utilities to take advantage of the competition over the non-
    bottleneck segments, it would ensure that carriers will exploit
    bottleneck segments only to the extent needed to achieve revenue
    adequacy. For the Board's rate review authority was meant to ensure
    that ``rail rate flexibility would not result in [captive] shippers
    bearing a disproportionate share of responsibility for the needed
    improvements in the railroads' financial position.'' Midtec, 857 F.2d
    at 1506 (quoting Arkansas Power & Light Co. v. ICC, 725 F.2d 716, 719
    (D.C. Cir. 1984)). See also Coal Rate Guidelines, 1 I.C.C.2d at 523-24
    (stating that a bottleneck shipper must not be forced to ``subsidize
    long-term excess capacity'' and pay for ``facilities or services from
    which it derives no benefit'').
    ---------------------------------------------------------------------------
        \12\ Under the Act, effective competition exists if the complaining
    shipper cannot establish the existence of market dominance under the
    criteria set forth in 49 U.S.C. Sec. 10709(d) (now 10707(d)). Under
    that provision, a carrier has market dominance if its revenue to
    variable cost percentage for the rail segment in question is greater
    than 180 percent. See 10709(d)(2); Midtec, 857 F.2d at 1504. If the
    shipper can make this showing, the carrier must respond by
    demonstrating adequate ``competitive alternatives'' that provide
    effective competition. See Metropolitan Edison Co. v. Conrail, 5
    I.C.C.2d 385, 410-16 (1989) (discussing and dismissing carriers'
    argument that intermodal, geographic, and product competition prevented
    it from having market dominance).
        There is substantial evidence that bottleneck carriers possess
    market dominance. See, e.g., West Texas II, 114 F.3d at 211 (summarily
    affirming the Board's holding that there was an absence of effective
    competition over a bottleneck). Conrail was found to be market dominant
    over its bottleneck in a proceeding by PP&L nearly fifteen years ago.
    See Pennsylvania Power & Light Co. v. Consolidated Rail Corp., No.
    38186S (ALJ July 24, 1984). Numerous scholars have declared that
    consistent price discrimination is a strong indication that there is no
    effective competition in the market reaping higher returns, in this
    case, the bottleneck segments. See Coal Exporters, 745 F.2d at 91
    (citing 2 P. Areeda & D. Turner, Antitrust Law 342; R. Bork, The
    Antitrust Paradox 395 (1978); R. Posner, Antitrust Law 63 (1976); and
    L. Sullivan, Handbook of the Law of Antitrust 89 (1977)). Indeed, the
    Board appeared to acknowledge that the bottleneck segments lack
    effective competition when it stated that its task in these cases was
    to ascertain the extent to which bottleneck carriers may ``exert their
    market power * * * Bottleneck I, at * 3.
    ---------------------------------------------------------------------------
        Third, the utilities could request relief under the competitive
    access rules, 49 C.F.R. Sec. 1144.5 (1997), over the entire origin-to-
    destination route. See Bottleneck I, at * 20-* 26; Bottleneck II, at *
    6. To invoke these rules, the utilities would be required to show that
    the carrier engaged in ``anticompetitive'' conduct. See Bottleneck I,
    at * 26; Midtec, 857 F.2d at 1507; 49 C.F.R. Sec. 1144.5(a)(1).
    Potential relief under the competitive access rules would include
    ordering the bottleneck carrier to enter into a switching arrangement
    with another carrier or prescribing a new through route over the
    bottleneck. 49 C.F.R. Sec. 1144.5(a). Admittedly, invoking these rules
    has proved difficult for shippers, but the Board has indicated an
    intent to enforce the rules to their fullest extent in the future. See
    Bottleneck I, at * 22, * 26.
        The utilities rely on San Antonio v. Burlington Northern, 355
    I.C.C. 405 (1976), aff'd sub nom. Burlington Northern, Inc. v. United
    States, 555 F.2d 637 (8th Cir. 1977), for the argument that they should
    be allowed to challenge class rates for the bottleneck segments. In
    that case, however, a utility brought an action to the Commission
    requesting rate prescription over a complete origin-to-destination
    shipment. See 555 F.2d at 639. Like the D.C. Circuit's recent decision
    in West Texas II, 114 F.3d 206 (1997), San Antonio simply demonstrates
    that the Act allows shippers to challenge origin-to-destination rates,
    regardless of how carriers choose to provide such service. In the
    present cases, the shippers did not challenge complete origin-to-
    destination rates, but challenged class rates over a segment of the
    route as an indirect means of preventing the carriers from exploiting
    bottleneck profits. That `` creative rate reduction strategy''
    undermined the national railroad policy of deferring to carrier
    discretion in setting routes and rates.
        Nothing in the Act explicitly requires carriers to provide separate
    local rates for bottleneck service. Furthermore, requiring carriers to
    provide separately challengeable rates on bottlenecks would prevent
    them from exploiting bottlenecks and charging rates up to SAC for
    complete origin-to-destination service. In the Board's view, this would
    impede the industry's efforts to achieve revenue adequacy, which is
    necessary for long-term capital investment and, ultimately, for a safe
    and efficient rail system. The Board therefore properly reconciled the
    competing policies of the Act when it deferred to carrier discretion in
    setting routes and rates and held that carriers are not required to
    provide separately challengeable bottleneck rates.
        The Board's dismissal of the utilities' complaints is affirmed.

                                      IV.

        The railroads cross-appeal the Board's determination that it may
    assess the reasonableness of bottleneck rates as soon as the utilities
    obtain contract rates over the non-bottleneck segments. Under Article
    III of the Constitution, we may only rule on existing cases or
    controversies. Because none of the utilities possesses a contract rate
    for non-bottleneck service, none has an existing claim for bottleneck
    rate review on this basis. As the railroads themselves point out, the
    Board's ruling on the contract issue presents no live controversy for
    adjudication. Thus, we dismiss the cross-appeal for want of
    jurisdiction.
        A true copy. Attest: CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
                                     ______

        streamlining of rate complaint process for certain agricultural
                                    shippers
        Question. Please provide a brief analysis of section 6 of S. 621,
    ``Simplified Relief Process for Certain Agricultural Shippers.''
        Answer. Section 6 of S.621 contains various special provisions that
    would apply only to grain facilities that are served by a single
    railroad, use rail for more than 60 percent of their traffic (inbound
    or outbound), ship no more than 4,000 carloads of grain or grain
    products per year, and pay rail rates (excluding any premium for
    special services) that yield revenues to the railroad of at least 180
    percent of the railroad's variable costs of handling that facility's
    traffic. Based on the traffic volume criteria, most rail-using grain
    facilities in the country would appear to qualify for these provisions.
        The first provision is that a railroad would not be allowed to
    charge such grain facilities rates higher than the 180 percent revenue-
    to-variable cost level. This 180 percent cap would be the same as the
    general regulatory floor (below which regulatory intervention is not
    permitted for the rail rates charged to any shipper for any commodity).
    The impact of such a rate cap would vary among individual facilities
    and grain-carrying railroads; for railroads with fewer grain
    operations, the revenue impact could be minimal, while, for those with
    more substantial grain operations, it could be substantial.
        The second provision is that a railroad could not deny any requests
    by such grain facilities for service up to 110 percent of the
    facility's rail carloadings for the prior year. (Presumably, this would
    force railroads to allocate capital resources to increase their grain
    car fleets by up to 10 percent above the prior year's levels in order
    to be prepared to meet this requirement.) The railroad, however, could
    assess reasonable penalties for canceled service requests, provided
    that the railroad is not more than 15 days late delivering the car(s).
        Under the third provision, if, in the majority of instances over a
    45-day period, the railroad is more than 30 days late in providing cars
    that have been ordered or initiating service that has been requested,
    such grain facilities would be entitled to obtain the services of an
    alternate railroad. The alternate railroad would have to compensate the
    original carrier for use of the track, on a pro-rata usage basis. If
    the two railroads could not agree on that compensation within 15 days
    of the shipper's request for the alternate service, the dispute could
    be submitted to the Surface Transportation Board, and the Board would
    set the compensation within 45 days.
        Whether an alternate railroad would be available, of course, would
    depend upon the capacity constraints of the alternate carrier, how
    close the facility is to another railroad, and whether there is enough
    traffic to justify the additional operations. If an alternate railroad
    were not available, the shipper would be entitled, under a fourth
    provision, to recover damages (including lost profits and other
    consequential damages), as well as attorney's fees. No finding of fault
    appears to be required, which suggests that a railroad could be fully
    liable for both damages and attorney's fees even where its failure to
    provide timely service was due to circumstances beyond its control.

     DEPARTMENT OF TRANSPORTATION AND RELATED AGENCIES APPROPRIATIONS FOR
                                FISCAL YEAR 2000

                                  ----------

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.

        [Clerk's note.--The following testimonies were received by
    the Subcommittee on Transportation and Related Agencies for
    inclusion in the record. The submitted materials relate to the
    fiscal year 2000 budget request.
        The subcommittee requested that public witnesses provide
    written testimony because, given the Senate schedule and the
    number of subcommittee hearings with Department witnesses,
    there was not enough time to schedule hearings for
    nondepartmental witnesses.

                           NONDEPARTMENTAL WITNESSES

                        FEDERAL AVIATION ADMINISTRATION

      Prepared Statement of Stephen A. Alterman, President, Cargo Airline
                                  Association

                funding for the federal aviation administration
        Thank you for the opportunity to comment on the important issue of
    funding for the Federal Aviation Administration.
        The Cargo Airline Association is the nationwide organization
    representing all-cargo air carriers providing expedited, time-definite,
    transportation services to businesses and individuals throughout the
    United States and the world. A copy of the current Association
    Membership List is attached hereto as Appendix A. Over the past twenty-
    five years, the all-cargo component of the air transportation industry
    has grown explosively in response to the needs of American business and
    individual shippers. Today, industry members have annual revenues in
    excess of $25 billion, employ upwards of half a million full-time
    equivalent individuals and operate over 800 large jet aircraft. To a
    very large extent, our operations and growth are dependent on the day-
    to-day activities of the Federal Aviation Administration (FAA).
    Moreover, future industry growth is contingent upon the ability of the
    FAA to continue to modernize the Nation's aviation infrastructure.
        Although we are concerned with the entirety of FAA operations and
    budget requests, our comments today are limited to a single program--
    Safe Flight 21--which has the potential to significantly accelerate
    airspace modernization and thereby enhance aviation safety and
    operational efficiency. We not only fully support the FAA's requested
    $16 million for the Safe Flight 21 program in fiscal year 2000, we
    believe that this amount should be increased to $21 million to allow
    for added initiatives in the area of Conflict Detection and Resolution
    which will increase situational awareness in aircraft cockpits as we
    move toward Free Flight in the early years of the 21st Century. A
    portion of this additional funding could also be used to further
    address the issue of groundside safety--specifically the identified
    safety issue of runway incursions.
        These programs are not a fantasy. They involve the practical
    application of existing technologies, some of which can be made
    operational before the sitting of the 107th Congress in 2001. The
    evolution of these projects is unique and a short history of their
    development will help put both the FAA Safe Flight 21 and Cargo Airline
    Association budget requests in context.
        Several years ago, air cargo industry members began a major
    initiative to increase airline safety by modernizing surveillance
    tools. This project was designed to use an existing technology called
    ADS-B (Automatic Dependent Surveillance--Broadcast) to provide pilots
    in ADS-B-equipped aircraft with enhanced ``see and avoid'' capabilities
    in the short term, and with enhanced conflict detection and resolution
    tools by the end of 2002. When this program was described in
    Congressional testimony before the House Transportation and
    Infrastructure's Aviation Subcommittee in February 1997, skeptics said
    that the Cargo Airline Association initiative was ``interesting'', but
    not possible before the year 2010--at the earliest. We believe that we
    have proved these skeptics wrong. ``As advertised'' in that testimony,
    by the Fall of 1998 we were flying test aircraft equipped with ADS-B in
    the Pacific Northwest and had cooperated with FAA aircraft in tests of
    the technology in the crowded Los Angeles basin. We are now in the
    final stages of obtaining our first FAA Supplemental Type Certificate
    (STC) for installation of the equipment on large cargo aircraft. Within
    the next month we expect to began an In Service Evaluation of the first
    phase of this system--involving up to 12 aircraft drawn from the fleets
    of Airborne Express, Federal Express and UPS. We will then sponsor an
    Operational Evaluation in mid-July at which all equipped aircraft will
    operate at Airborne's hub in Wilmington, Ohio, to test various
    applications of the ADS-B technology. We hope and expect to begin
    permanent installation of this technology on the entire cargo fleet in
    early 2000. This progress could not have been made without the
    cooperation of the members of the Cargo Airline Association and the
    FAA. In addition, the support you provided in the form of $5 million
    for the installation of ground stations and the testing of several data
    links in the Ohio Valley has allowed us to move toward certification
    even more quickly.
        To date, the Cargo Airline Association though its members, have
    made significant contributions by making aircraft available,
    retrofitting existing cockpit displays and ``donating'' management
    personnel, engineers, and pilots' time. It is roughly estimated that to
    date the private sector has contributed over $10 million to advance
    this valuable program. This commitment, both in terms of personnel and
    funding will continue well into the next century.
        Significantly, the Cargo Airline Association project has expanded
    well beyond the original purpose of enhanced airborne surveillance. All
    possible uses of ADS-B technology are now ``on the table''. Perhaps
    more importantly, cargo carriers are no longer alone in this effort. A
    partial list of other participants (and their interests) are:
      --1. The General Aviation community which is interested in affordable
            surveillance technology and the ability to uplink weather and
            traffic data to small aircraft;
      --2. United Air Lines which intends to use ADS-B in tests of closely
            spaced parallel approaches at San Francisco International
            Airport;
      --3. A consortium of Harris Corporation, Lockheed Martin and Sensis
            Corporation which is installing an air traffic management
            system which will fuse radar and ADS-B data for presentation to
            air traffic controllers at the Operational Evaluation at
            Wilmington, Ohio;
      --4. MITRE Corporation which serves on the Association Steering
            Committee and which is installing Ground Stations, under
            contract with the FAA, in the Ohio Valley;
      --5. SITA which will provide a telecommunications link between the
            various Ground Stations; and
      --6. The National Air Traffic Controllers Association (NATCA) which
            has been invited to work with us and serve on our Steering
            Committee.
        Perhaps even more significantly, the FAA itself, through the Safe
    Flight 21 office, is a major partner in our activities. Using the $5
    million appropriated by Congress for fiscal year 1999, the FAA has
    contracted for the installation of Ground Stations in the Ohio Valley;
    has arranged for an independent evaluation of three separate data link
    technologies by Johns Hopkins University; and is outfitting a number of
    FAA aircraft with ADS-B technology to participate fully in the various
    tests to be conducted this year. Much of the funding requested by the
    FAA for Fiscal 2000 is for a continuation of this work. The results
    thus far have been more than promising and we fully expect that the
    ultimate result of this initiative will be to jumpstart airspace
    modernization and to accelerate the timetable for Free Flight
    implementation.
        If Free Flight is the ``end game'' of the airspace modernization
    effort (and we believe it is), we urge Congress to provide an
    additional $5 million for the FAA's budget request for fiscal year
    2000. Additional funding would be used to begin developing ADS-B
    technology to provide real-time conflict detection and resolution
    capabilities, a necessary component of any Free Flight scenario. A
    portion of this funding could also be used to test ADS-B on ground
    situations as a means of avoiding runway incursions.
        By using ADS-B as a conflict detection and resolution tool, pilots
    will be able to track aircraft over 100 miles away and will be able to
    make early, minor adjustments in their flight plans to avoid conflicts
    with other aircraft. This technology will also permit the pilot to
    ``see'' exactly what the controller sees, thereby eliminating any
    misunderstandings. These functions are vital components of any new
    generation collision avoidance system. As we move toward Free Flight,
    these capabilities become crucial and a relatively small investment by
    Congress now will accelerate this entire process.
        We appreciate the opportunity to brief the Committee on our
    progress and our funding needs for fiscal year 2000. We would be happy
    to answer any questions or to provide any further data the Committee
    deems necessary.
        Thank you very much for your past support. We look forward to
    working with you in the coming year.
        Thank you.
                                     ______

    Prepared Statement of Stephanie Foote, Chief of Staff, Office of Mayor
                   Welling Web, City and County of Denver, CO

                          i. introduction and summary
        Mr. Chairman, on behalf of Mayor Wellington Webb of the City and
    County of Denver, I want to thank you for the opportunity to submit
    this testimony and to be able to tell you that on February 28, 1999,
    Denver International Airport successfully completed its fourth full
    year of operations.
        Mr. Chairman, if you or any of your colleagues on this Subcommittee
    have not seen DIA, I would like to extend an invitation to you to visit
    the airport and have Mayor Webb give you a personal tour of this state-
    of-the-art airport. With several major airports being built elsewhere
    around the world, they all come to Denver to see how to do it and we
    are very proud to display America's high level of expertise in airport
    technology.
        DIA would not have been possible without funding appropriated by
    this Subcommittee for the Airport Improvement Program, which enabled
    the FAA to provide grants, and for FAA equipment and facilities for
    this nationally-important project. DIA was the first major airport
    built in the United States in over 20 years. It is a critical component
    of our national aviation system and our transportation infrastructure
    that you, Mr. Chairman, and your fellow Members are working so hard to
    improve. Without Congress, DOT, the FAA and the City of Denver, all
    working together closely, DIA would not have happened.
        I also want to thank you for supporting the elimination of the
    statutory prohibition concerning DIA's sixth runway. The sixth runway
    was part of the original plan for DIA that was approved by the Federal
    Aviation Administration. This runway will give us a balanced airfield
    and, since it will be 16,000 feet long, it will be able to accommodate
    larger aircraft and enable us to expand our transatlantic and
    transpacific service. We had started the site preparation work several
    years ago, before the prohibition was imposed, and have finished this
    first phase of the runway. We greatly appreciate the lifting of the
    prohibition so that we can now proceed with completing this important
    airfield project.
        There are three main reasons why DIA was built.
        One was to provide a more efficient, cost-effective and user-
    friendly facility for the citizens of the City of Denver, the State of
    Colorado and the Rocky Mountain and Great Plains regions, and the
    millions of visitors who are so important to our economy. For them, DIA
    is the gateway to the rest of the country and the world.
        The second, closely tied to the first, was to provide a more cost-
    effective and efficient hub by reducing the delays at the old Stapleton
    Airport that were severely and negatively impacting the nation's air
    transportation system and were keeping Denver from taking full
    advantage of its central geographic location.
        Third, Stapleton was the source of serious noise problems that
    needed to be solved. Stapleton was located only seven miles from
    downtown Denver and was surrounded on three sides by residential
    communities. About 14,000 people lived within the 65 dB DNL contour--
    the noise level which the FAA has determined is unsuitable for homes.
        I can report to you today that DIA continues to exceed expectations
    as to each of these three goals. The Airport's revenues have exceeded
    its expenses in each of its four years of existence; it is highly
    efficient and one of the world's most user-friendly airports; it had
    the lowest percentage of delays among the nation's 20 busiest airports
    in 1998, which was good news not only for Denver but for the national
    system; and we have dramatically reduced the number of people within
    the 65 db DNL noise contour from about 14,000 to less than 200.
        In sum, DIA has made a major contribution to the efficiency of the
    carriers operating at the Airport and to the national air
    transportation system through reduced flight delays and fuel savings
    and has dramatically improved the impact of noise on those who were
    most heavily affected.
        Let me now turn to more specifics about the results of DIA's first
    four years of operation.
                          ii. dia is financially sound
        DIA's record of performance reflects the fact that the Airport is
    well-managed by the City and financially sound. For 1998, we handled
    36.8 million passengers, a 5.3 percent increase over 1997 and the
    highest ever for Denver. This solid traffic level is evidence of
    Denver's strong origin and destination market and its central
    geographic location for east-west hubbing operations. For 1998, our net
    revenues, i.e., revenues less operating expenses and debt payments, are
    projected to exceed $28 million. Under our agreement with the airlines,
    80 percent of these net revenues are provided to the carriers, which
    reduces their costs at DIA.
        We have carefully managed our revenue sources, such as concessions
    and parking, as well as our costs, particularly through successful
    refinancing of our debt obligations, which has created important
    savings that are shared with the air carriers. Our strong financial
    performance has enabled us to reduce our costs per enplanement, which
    were projected to be $18.02 when we opened in 1995, to about $15.12 for
    1998, a 16 percent reduction. In recognition of our solid financial
    condition, Standard & Poor's upgraded its rating on our senior airport
    bonds from BBB to BBB+. As we enter our fifth year of operations, we
    expect that DIA will continue to have an excellent financial record.
                   iii. dia has substantially reduced delays
        Our second major goal was to reduce delays. We have been
    tremendously successful in achieving this goal and we are proud to
    report that, for 1998, we had only 1.7 delays per thousand operations,
    the best percentage among the top 20 U.S. airports. In contrast, we
    suffered 14 delays per thousand operations at Stapleton, one of the
    worst records in the United States. Stapleton, a major connecting
    airport for travelers flying between the eastern and western parts of
    the country, was a terrible bottleneck during bad weather. While
    Stapleton could handle 88 air carrier jet arrivals per hour on two
    runways in good weather, it would be down to only one runway and barely
    32 arrivals per hour in a storm, causing tremendous backups throughout
    our national system. That was one of the major reasons for then-
    Secretary of Transportation Skinner's strong support without which DIA
    would never have been built.
        Since DIA opened, its benefits to the national system are
    dramatically reflected in the on-time statistics I just cited. In fact,
    on the day we opened, Denver was hit by a snowstorm that would have
    crippled Stapleton, leaving it with only one runway capable of handling
    32 operations per hour. Yet, DIA had three runways operating
    simultaneously with a capacity to handle up to 120 flights per hour.
            iv. dia has substantially reduced aircraft noise impacts
        Our third major goal in building DIA was to reduce the impact of
    aircraft noise on the people of our communities. Mr. Chairman, Members
    of the Subcommittee, we have probably achieved more in reducing airport
    noise significantly for our citizens than any large airport in the
    nation. We did that by moving the airport from seven miles from
    downtown to 23 miles from downtown. That took us from a very high
    population density area to one with very low population density. We
    also acquired 53 square miles (34,000 acres)--twice the size of
    Manhattan--to give us a large buffer zone around the airport. As a
    result, the number of people who now live within an area defined as the
    65dB noise contour, which Congress has deemed to be unsuitable for
    homes, is down from 14,000 at Stapleton to less than 200 at DIA, one of
    the best records of any major airport in the world.
                                 v. conclusion
        In summary, Mr. Chairman, Denver International Airport has proven
    to be a tremendous success and has become an important component of our
    nation's infrastructure. We greatly appreciate the lifting of the
    prohibition on federal funding for our sixth runway so that we can
    complete DIA's airfield, as originally designed, and prepare the
    airport to meet the transportation needs of the 21st century.
        Thank you, Mr. Chairman and Members of the Committee.
                                     ______

      Prepared Statement of Edward M. Bolen, President, General Aviation
                           Manufacturers Association

        Mr. Chairman, Senator Lautenberg, and members of the Subcommittee,
    my name is Edward M. Bolen and I am President of the General Aviation
    Manufacturers Association (GAMA). GAMA represents 53 General Aviation
    aircraft, engine, avionics and component parts manufactured throughout
    the United States.
        As everyone on this Subcommittee well knows, General Aviation is
    technically defined as all aviation other than commercial or military
    aviation. General Aviation aircraft range from small, single engine
    aircraft to intercontinental business jets.
        These aircraft are used for everything from flight training to
    emergency medical evacuations to border patrols to fire fighting. They
    are also used by individuals, companies, state governments,
    universities and other interests to quickly and efficiently reach the
    more than 5000 small and rural communities in the United States that
    are not served by commercial airlines.
        General Aviation is the backbone of our national air transportation
    system and the primary training ground for the commercial airline
    industry. It is also one of the segments of our aviation industry that
    helps drive our economy and contributes positively to our nation's
    balance of trade.
                  funding the federal aviation administration
        Mr. Chairman, I appreciate having the opportunity to comment on FAA
    funding for fiscal year 2000.
        Because the public demands and the law requires the FAA to be
    deeply involved in all aspects of aviation, the overall quality,
    strength and efficiency of the U.S. aviation industry is inextricably
    linked to the quality, strength and efficiency of the FAA.
        Given the tremendous impact aviation has on our nation's economy,
    our balance of trade and our quality of life, it is very much in our
    national interest to have an FAA that is adequately funded.
        Before discussing the fiscal year 2000 appropriation, I would like
    to take a minute to recognize the subcommittee for the excellent job it
    has done making sure that the FAA has the resources it needs to retain
    its position as the world's preeminent aviation authority. Since fiscal
    year 1995,the FAA has received 99.8 percent of its budget request. Its
    appropriation has grown by 17.6 percent over the past three years
    alone.
        In providing funding to the FAA, Congress has consistently utilized
    a combination of aviation revenues and general taxpayer funds. Given
    the public benefit inherent in a strong air transportation system, GAMA
    believes this combination of funding sources is entirely appropriate
    and should be continued.
        GAMA would also like to recognize the subcommittee for its strong
    opposition to aviation user fees. As the members of the subcommittee
    well know, user fees have been very detrimental to general aviation in
    countries where they have been adopted. Rather than switch to harmful
    fees, we believe that general aviation should continue to contribute to
    the Airport and Airways Trust Fund by paying the federal tax on
    aviation gasoline and jet fuel. We are grateful this subcommittee has
    supported our view.
                           general aviation industry
        Mr. Chairman, I am pleased to report that after a long period of
    decline, the General Aviation industry has experienced tremendous
    growth since Congress passed the General Aviation Revitalization Act
    (GARA) in 1994. Since passage of the Act, sales of General Aviation
    aircraft have more than doubled, exports have increased significantly,
    production lines have opened and tens of thousands of high-tech, well-
    paying manufacturing jobs have been created.
        Helping fuel the growth in General Aviation have been significant
    innovations in aircraft designs, propulsion systems, avionics, and
    materials. These innovations are serving to make General Aviation even
    safer, more affordable and more environmentally friendly.
        Because U.S. General Aviation manufacturers are investing heavily
    in research and development, we expect the current pace of innovation
    to continue well into the future. However, the ability of manufacturers
    to bring exciting, safe and environmentally friendly new products to
    the market is dependent upon whether or not the FAA can certify these
    new products in a timely manner.
           certification of aviation products for the public benefit
        Since 1926, the federal government has required manufacturers to
    have all of their products ``certified'' by the Federal Aviation
    Administration before they are allowed to enter the stream of commerce.
    The FAA becomes, in essence, a gatekeeper between manufacturers and the
    marketplace.
        The government's legal authority to require private manufacturers
    to certify their products is a direct result of the public's interest
    in having aviation products not pose an unreasonable safety risk to
    people in the air and on the ground. Were it not for this significant
    public safety interest in aviation products, the FAA would not have the
    legal authority to require private manufacturers to undergo the
    certification process.
         office of regulation and certification should be fully funded
        Over the years, the FAA has performed its certification duties
    exceptionally well. However, during fiscal year 1999, funds that were
    earmarked for the Office of Regulation and Certification were
    redirected to other FAA programs. As a result, over 200 certification
    jobs have gone unfilled. This redirection of certification resources is
    beginning to have an impact on our manufacturers' ability to get their
    products certified and to the marketplace in a timely manner.
        Mr. Chairman, the consequences of U.S. manufacturers not being able
    to get their products to the marketplace in a timely manner are
    serious. It may mean that consumers are unable to enjoy the safety and
    environmental benefits of new products. It may mean that foreign
    competitors are given an opportunity to capture the market before the
    U.S. companies have an opportunity to enter it. It may mean that
    investment dollars stop flowing into research and development because
    the time needed to achieve a return on that investment becomes too long
    for investors. None of these outcomes is acceptable.
        GAMA views the Administration's request for the FAA's Office of
    Regulation and Certification as the absolute minimum amount necessary
    for the FAA to perform its certification duties. Frankly, we believe a
    10 percent increase over the requested amount would be more in line
    with the actual needs of the Office of Regulation and Certification. We
    urge the subcommittee to at least fund this important function at the
    requested amount. We also urge the subcommittee to include language in
    the appropriations bill which will prevent resources earmarked for
    certification from being redirected to other FAA programs.
        In making this funding request to Congress, GAMA acknowledges that
    the subcommittee is operating in an era of declining budgets and
    increasing demands. It is for that reason that we want to make Congress
    aware that industry and the FAA are working together to improve the
    certification process in a manner that will both improve safety and
    reduce costs.
        I believe it is also important for Congress to understand that
    manufacturers currently assume approximately 90 percent of the costs
    associated with certification through the use of Designated Engineering
    Representatives. This means that the government investment in
    certification is well leveraged and concentrates on major safety issues
    and oversight. The resulting benefit to the public in terms of
    technological advancement is substantial.
                                      waas
        GAMA supports continued full funding for the Wide Area Augmentation
    System (WAAS). This program is the cornerstone of the NAS modernization
    effort and has the potential to provide tremendous benefits to general
    aviation. The recently completed Johns Hopkins study confirmed the
    validity of the FAA's WAAS program, and has given the industry
    confidence that this program should be pursued.
        The WAAS system of satellites and ground stations can increase the
    margin of safety for all of aviation by providing instrument approaches
    with vertical guidance to over 1,500 airports that do not currently
    have this capability. GAMA realizes that the WAAS program has had its
    share of controversy. However, we believe the FAA has already made
    adequate allowances for risk reduction and every major user
    organization now supports completion of WAAS Phase I. In fact, we
    encourage the FAA to rapidly refine its plan for WAAS Phase II, as
    recommended by Johns Hopkins. The WAAS program is an essential part of
    the FAA modernization effort, and GAMA urges that the program move
    forward.
                                   conclusion
        Mr. Chairman, GAMA would like to again thank the subcommittee for
    its efforts to ensure that the FAA is adequately funded. Your efforts
    over the years are recognized and appreciated.
        As we prepare for the next century it is important that the FAA
    continues to have the resources it needs to remain the leading aviation
    authority in the world. As part of that effort, GAMA urges Congress to
    fully fund the FAA's Office of Regulation and Certification and the
    Wide Area Augmentation System.
        We appreciate the opportunity to submit testimony to the
    subcommittee and look forward to answering any questions you may have
    regarding our comments.
                                     ______

          Prepared Statement of the Greater Orlando Aviation Authority

        Chairman Shelby and distinguished members of the Senate
    Appropriations Subcommittee on Transportation and Related Agencies, The
    Greater Orlando Aviation Authority (the ``Authority'') is very grateful
    for the past support of your committee and will strive to maintain your
    trust and confidence.
        The Authority is extremely pleased to submit written testimony
    regarding the following three points:
      --1. The funding requirements Orlando International Airport faces in
            constructing critical capacity improvement projects, such as,
            Runway 17L/35R and the South Terminal Complex;
      --2. the nature of the market that Orlando International Airport
            (``OIA'') services; and,
      --3. the importance of a well funded Airport Improvement Program
            (``AIP'').
      1. critical capacity improvement projects for orlando international
                                    airport
        Past aggressive development efforts have enabled OIA to respond to
    a phenomenal growth rate over the last sixteen years. In August 1997,
    the Authority and its airline partners approved a $1.2 billion capital
    improvement program for the design and construction of a new airside
    building, expanded public parking facilities, existing and new terminal
    development, wetland removal for Runway 17L/35R, as well as a new Air
    Traffic Control Tower. Revenue bonds, Passenger Facility Charges (PFCs)
    and local funding sources were identified and approved for
    approximately 80 percent of the required funding.
        OIA served approximately 28 million passengers and handled 363,285
    flight operations in 1998. Forecasts indicate OIA will experience
    annual growth of 4-6 percent during the next five years. In order for
    OIA to meet future growth trends and to ensure the National Aviation
    Systems continued efficiency, federal participation is required to
    provide funding for Runway 17L/35R and the South Terminal Complex.
    A. Runway 17L/35R
        In 1988, the Federal Aviation Administration's ``Airport Capacity
    Design Study'' recommended that a fourth runway with the capability of
    triple flow approaches should be operational when OIA reached 400,000
    annual operations.
        Between 1990 and 1998 the Federal Aviation Administration
    (``FAA''), the Florida Department of Transportation, and the Authority
    committed $86,954,271 towards constructing Runway 17L/35R of which the
    Federal Aviation Administration contributed $52,486,012. This amount
    included the cost of land acquisition, mitigation requirements, initial
    site preparation, relocation of a high voltage power line, and 30
    percent completion of design. Since the FAA issued the first grant for
    Runway 17L/35R in 1990, airline passenger traffic at OIA increased 54
    percent and airline operations increased 32 percent.
        The OIA Master Plan forecasts indicate aircraft operations at OIA
    in the year 2000 will exceed 400,000 and in 2002 will exceed 481,900.
    Runway 17L/35R is needed to avoid excessive local and system-wide
    delays.
        On February 12, 1999 the Authority submitted a formal ``Letter of
    Intent'' to the FAA to complete construction of Runway 17L/35R at OIA.
    The estimated cost to complete the runway is approximately $115
    million. The ``Letter of Intent'' is for a five-year period and commits
    entitlement funds and requests discretionary grant. The amount of the
    federal share is approximately $87 million.
        The earliest Runway 17L/35R can be operational is March 2003.
    Completing Runway 17L/35R will avoid significant delays and will permit
    the National Aviation System to realize systemwide cost savings
    estimated at $75 million by the year 2009 and even more significant
    savings by the year 2020. Federal participation will allow the
    Authority to complete Runway 17L/35R; thereby, greatly enhancing the
    efficiency of OIA and generating substantial savings locally as well as
    through the National Aviation System. The Authority would like the
    support of the Senate Transportation Appropriations Subcommittee for
    this project and respectfully request you to direct the FAA to give
    this funding request priority consideration.
    B. South Terminal Complex
        The North Terminal Complex at OIA is reaching full capacity.
    Recently, with Airline commitment the Authority has commenced the
    design and construction of the first phase of the South Terminal
    Complex. The first phase of the South Terminal is planned for
    international and domestic passengers and will have 12 gates. The
    Authority will maintain and operate approximately 6 gates to facilitate
    airline competition and competitive fares. When the South Terminal
    Complex is fully developed OIA will have the capacity to serve 70
    million domestic and international passengers annually.
        The first phase of the South Terminal Complex is expected to open
    in December 2002. The Authority anticipates that Phase 1 will cost $570
    million. Approximately 87 percent of funding will be a combination of
    state grants, revenue bonds, PFCs, and local funds. FAA discretionary
    grant funds of approximately $56 million (13 percent) are needed for
    high priority apron and taxiway elements of this project. The Authority
    respectfully requests that the Senate Transportation Appropriations
    Subcommittee supports and directs the FAA to give funding priority to
    the critical airside elements of the South Terminal Complex.
           2. the market that orlando international airport services
        Florida is the world's fourth largest market based on Gross
    Domestic Products. It is the Country's fourth largest state by
    population, home to almost 15 million residents, and considered the
    fastest growing state in the U.S. More than 7.4 million residents, or
    50 percent of the population of Florida, lives within 125 miles of
    Orlando.
        More than 1.4 million people live in Metro Orlando. Forecasts
    indicate that by 2005 the population will exceed 1.8 million. As the
    world's most popular tourist destination, Central Florida's economy
    requires affordable, convenient, and safe air transportation. The
    future growth of OIA is directly related to the expansion and
    development of theme parks and support services. Attractions account
    for 6 of the top 10 U.S. theme parks (Magic Kingdom, EPCOT, Disney-MGM
    Studios, Universal Studios Florida, Sea World of Florida, and Busch
    Gardens Tampa). Orlando's area attraction attendance is anticipated to
    exceed 70,000,000 per year by 2002.
        Orlando also has become the most popular convention market in the
    world. In 1997, 4.17 million business travelers attended conventions,
    meetings, seminars, and trade shows in Central Florida. The Orange
    County Convention Center in Orlando is currently the second largest
    convention facility in the U.S.
        Since 1996 Orlando International Airport has ranked among the
    World's fastest growing airports. Forecasts indicate Orlando
    International Airport will experience annual growth of 4-8 percent
    during the next five-years. OIA has scheduled non-stop service to 75
    domestic and 23 international destinations, promoting increased airline
    service and competitive fares. By the year 2000, OIA will serve more
    than 30 million passengers and handle over 400,000 flight operations.
    OIA shares a unique relationship with the regional economy. A recently
    completed economic impact study determined OIA generates a $14 billion
    annual economic impact and is responsible for 54,000 direct and
    indirect jobs.
                   3. well funded airport improvement program
        The future ability of the National Aviation System to ensure safe
    and secure air transportation depends on a well funded Airport
    Improvement Program (AIP) which provides the Federal Aviation
    Administration the financial resources needed to underwrite critical
    capacity improvement projects. The Authority respectfully requests the
    Senate Transportation Appropriations Subcommittee to fully fund AIP at
    no less than the current year's appropriation of $1.95 billion.
    Airfield improvements are intended to increase needed capacity, provide
    increased flight operation safety, and enhance the efficiency of the
    National Aviation System. The AIP is an essential component of the
    financial strategy to ensure airports have the resources necessary to
    design and construct basic airfield improvements.
                                   conclusion
        Central Florida is extremely proud of Orlando International Airport
    and believes it represents a model for economic development. The
    success of maintaining this status requires federal participation in
    new airfield improvements. The timely completion of Runway 17L/35R and
    the South Terminal Complex is needed. As part of the National Aviation
    System, OIA has the potential to positively influence air traffic and
    limit future operational delays nationwide. AIP is an essential part of
    the airport's funding strategy and provides the Authority the ability
    to leverage local financial resources for maximum benefit to the
    National Aviation System. The full funding of this most important
    program will enable OIA to receive the federal assistance needed to
    complete the projects on time without unnecessary costs or delays.
        Thank you for this opportunity to submit written testimony and for
    your Committee's past support.
                                     ______

      Prepared Statement of Sergio Magistri, President and CEO, InVision
                                  Technologies

                         funding for aviation security
        The certified explosive detection system (EDS) industry began after
    the tragedy of Pan Am flight 103 in 1988. At that time, viable EDS
    technology had not yet been developed and we lacked a clear
    understanding of what is required to effectively operate security
    equipment within airport environments. Today, there are over 400
    security systems operational worldwide, including 150 Federal Aviation
    Administration (FAA) certified EDS systems that are screening higher
    quantities of luggage every day. The bootstrapping of the EDS industry
    from ground zero--from the development of EDS certification criteria
    and FAA-certified technology to the operational deployment of EDS
    systems--is an example of a successful partnership between private
    industry, airlines, airports and regulators and has resulted in
    increased security for the traveling public.
    [GRAPHIC] [TIFF OMITTED] TNDPT.001

        Ten years after the Pan Am 103 disaster, we now face several
    questions. How will the utilization and development of EDS technology
    evolve over the coming years? What are the constraints and what
    performance levels can we expect in the next millennium?
    Outlook of Existing Technologies
        Today, dual-energy x-ray and Computed Tomography (CT) systems, such
    as Invisions's CTX 5500, each have specific operational detection
    capabilities. We expect the same split of operational applications for
    these two technologies as has evolved during the past 20 years in the
    medical field. Currently, hospital x-ray systems are used to assess
    massive injuries such as a broken bone, while CT is used for more
    demanding diagnoses such as locating small tumors. We expect the role
    of CT as the primary screening and threat resolution technology to
    expand, due to its comprehensive imaging capabilities. Dual-energy x-
    ray technology will not be more widely deployed until it can
    demonstrate higher performance (i.e., higher detection rates and FAA
    certification).
        CT systems will likely follow the evolution of medical CT, with its
    wider deployment dependent upon the cost of the detectors and of its
    computational power. Over the coming years, we should expect a moderate
    decrease in the cost of the detector technology and other hardware,
    combined with a sustained decrease in the cost of the computational
    power. (This statement is based on Moore's law: ``the cost of
    computational power drops by a factor of two every two years.'') For
    example the CTX 9000 DSi, currently undergoing FAA certification, is
    expected to provide up to 3 times the operational performance of the
    CTX 5500 and has been designed for integration with the airport
    conveyor system. The main objective of this development was to design
    an EDS capable of performing in a 100 percent screening scenario in
    which all passenger luggage is screened, rather than using a
    combination of passenger profiling and EDS screening as is done today.
    [GRAPHIC] [TIFF OMITTED] TNDPT.002

        The limiting factor in the development of second- and especially
    third-generation EDS is the understanding of the operational
    requirements. The design for an EDS that screens 100 percent of
    passenger luggage is substantially different from the design for an EDS
    that screens only a small percentage of baggage after automated
    passenger profiling is performed. Once operational requirements are
    determined, we expect later-generation designs to be driven by
    improvements to the software, made possible by decreasing costs in
    computational power. Declining hardware costs will have only a minor
    impact on the total cost of the system. Specific software improvements
    will result in reduced false alarm rates, including operator and system
    performance monitoring via Threat Image Projection (TIP) and Field Data
    Report (FDR) software, and enhancements to increase operator
    efficiency.
    New Technologies
        The beginning of the next century should bring additional
    ``orthogonal'' technologies, capable of improving x-ray and CT-based
    EDS. ``Orthogonal'' technologies use different physical principles to
    detect explosives and devices, for example radio waves versus x-rays.
    Examples of the technologies in development for these applications are
    Quadrupole Resonance (QR) and some of the newest vapor detectors. Over
    the coming years, QR and possibly vapor detection may be integrated
    with certified EDS systems with the purpose of reducing false alarm
    rates and increasing the overall performance of the systems. The
    benefit of these additions will be particularly significant for the
    screening of carry-on luggage, where size and cost of the screening
    equipment are very important. The addition of orthogonal technologies
    like QR will also allow for better detection of components of explosive
    devices and distributed charges, one of the additional requirements for
    carry-on screening.
    Operational Performance Issues
        Developments of EDS for aviation security over the past 10 years
    have been driven by technology. Vendors have learned how to master the
    technological side of the business. Now is the time for the industry to
    work with the FAA, the airlines and airports to resolve some of the
    operational issues. This includes the funding and management of
    security operators, as well as their continued training. During the
    coming years, the industry will recognize that these operational issues
    are not ``technology driven'' but rather human and management issues.
    Are the operators being trained properly? Are the operators properly
    managed with adequate incentives and rewards? How do we reduce high
    operator turnover? What are the prerequisites for becoming an EDS
    operator? Will we be able to develop certification standards for
    operators? These are just a few of the questions that must be addressed
    in order to increase the effectiveness of the security systems being
    deployed.
        For these issues, technology can help but will not be the only
    solution. As the Gore Commission stated, ``There is no silver bullet''
    for ensuring passenger security. InVision has recognized this challenge
    and has begun to devote a substantial amount of resources, in
    collaboration with the FAA, to support the training and monitoring of
    operators via software add-ons like TIP and FDR.
        Substantial progress has been made but EDS technology still remains
    underutilized. From a recent IG report on security and EDS technology,
    it was reported that 2 years after initiating deployment of FAA
    certified systems, U.S. carriers are still under-utilizing these
    systems. For example, in Q4 98 the average system was screening only
    1559 bags per week compared to a conservative estimate nominal capacity
    of 5250 bags per week, data from the IG report dated March 3, 1999.
    [GRAPHIC] [TIFF OMITTED] TNDPT.003

    Business Constraints of the EDS Industry
        In general, most of the companies in this sector are well
    capitalized, and continue to invest in new technology and products. The
    industry's total gross research and development investment in EDS
    (including government grants) reaches $20-30 million dollars per year
    with a revenue stream of $150-200 million dollars. Competition for the
    second generation of FAA-certified systems is growing and will, over
    time, provide better and less expensive EDS systems to the air
    transportation industry.
        However, a major concern in this area arises from business
    uncertainty. Government purchases are made with a one-year planning
    cycle and this short time horizon causes major management problems to
    small companies in the EDS arena. This uncertainty may start to limit
    the investments of private companies in the development of new EDS
    products and in the refinement of the existing ones.
        To solve this problem, it is imperative that the regulators develop
    medium-term plans and commitments to correct the reactive nature of the
    security business. Currently, EDS equipment is purchased only after a
    tragedy occurs. Future plans should detail the EDS systems needed to
    prevent tragedies and regulators should make medium-term commitments to
    this magnitude of deployment (conditional upon meeting performance
    criteria). Without this approach, the progress of the EDS industry
    could be crippled over time and the US government could lose this very
    important industrial base.
        Ten years ago we didn't have a high-performance EDS machine; we
    didn't have certification standards; we didn't have an EDS industry.
    Today, we have 150 FAA-certified EDS systems in operation worldwide and
    a viable industry operating under the leadership of the regulators.
    Tomorrow, we will have better EDS systems that are faster, less
    expensive, and easier to use with lower false alarm rates; dedicated
    EDS systems for both checked and carry-on baggage; and better
    operational utilization of the EDS technology. What will make the
    difference in the security of air transportation during the next
    century? A cohesive security plan containing performance requirements,
    budgets and operational commitments from the airports, the airlines and
    governments, developed in partnership with the EDS industry. This is
    the condition for a viable EDS industry that is focused on improving
    the core technology to the advantage of the travelling public.
    Administration's Funding Request
        InVision supports the Administration's budget request for aviation
    security funding in fiscal year 2000. However, for real success in this
    program which means increased security coverage, more efficiency and a
    viable, healthy security industry, Congress must take a leadership role
    by acknowledging that the $100 million funding level should be
    increased. If the industry is going to increase utilization to approach
    the capabilities of current and future technology, it can only do so by
    integrating the technology into baggage handling systems. This can be
    an expensive proposition but it will have truly significant benefits.
    This integration provides the infrastructure for a comprehensive EDS
    security system.
        For a true industry to develop, consistent, appropriate funding
    levels must be maintained, if not increased, so that the traveling
    public can benefit from the industry's substantial potential. The
    worthwhile goal of creating competition will never materialize if the
    realities of integration costs and appropriate, recurrent funding
    levels are not sustained and institutionalized.
        Only when the creative and competitive efforts of the industry are
    unleashed on the aviation security challenge, will the expectations of
    the traveling public be met. Industrial development, however, requires
    opportunity. That opportunity must come in the form of significant
    markets for our industrial output and increased federal funding is the
    key to creating those markets. Our aviation system is critical to the
    economy, pursuit of freedom and quality of the American experience. We
    must protect it with total resolve.
        We appreciate the opportunity to brief the Committee on our
    progress and our funding needs for fiscal year 2000. We would be happy
    to answer any questions or to provide any further data the Committee
    deems necessary.
        Thank you very much for your past support. We look forward to
    working with you in the coming year.
                                     ______

      Prepared Statement of Mayor Alex Penelas, Miami-Dade County, Florida

                               aviation excerpts
    Fourth Runway, Miami International Airport
        Miami International Airport is one of Miami-Dade County's most
    important economic assets, generating $13 billion each year in economic
    activity and accounting for one out of every six jobs. MIA is the
    nation's busiest international cargo and second busiest international
    passenger airport, handling nearly 2 million tons of cargo and 34
    million passengers annually. Our airport was ranked the seventh-busiest
    airport in total operations for 1997. Aircraft operations have been on
    the rise, increasing more than 57 percent between 1983 and 1998.
    Passenger enplanements at MIA have increased more than 177 percent
    during this same time period. According to FAA projections, this growth
    at MIA will keep it on the list of airports experiencing over 20,000
    hours of annual delay if no airfield capacity enhancements are made.
        According to FAA's 1998 Aviation Capacity Enhancement Plan (ACE),
    MIA is projected to increase 97.3 percent in departing passengers and
    42.5 percent in aircraft movements by the year 2012, placing MIA among
    the nation's fastest growing airports. Currently during peak hours the
    design capacity of the three existing runways is exceeded.
        In 1989 and again in 1997, an FAA led Airport Capacity Design Team
    for MIA published recommendations for increasing capacity and reducing
    delays. The Design Team's analysis shows that delay costs and annual
    delays will continue to grow at a substantial rate as demand increases
    if no improvements in airfield capacity are made. The Team's
    recommendation, outlined in its 1997 Capacity Enhancement Plan Update,
    identified the need for a fourth air-carrier runway to provide ``the
    greatest savings in average annual delays and delay costs.'' The
    proposed fourth runway will be a new, non-precision air carrier runway
    8-26, parallel to and 800 feet north of existing Runway 9L/27R.
        Airfield and airspace delays currently cost the airlines over $153
    million a year. Without a new runway, these delay costs will escalate
    to $373 million annually by the year 2005, and Miami runs the risk of
    losing passengers and cargo to competing airports. By providing
    adequate capacity at MIA, the National Airspace System (NAS) benefits,
    as reducing congestion and delays at MIA also reduces delays at other
    key NIPIAS airports such as DWF, JFK, and LAX.
        The proposed runway is part of MIA's $4.7 billion capital
    development program to modernize facilities and add new capacity. A
    fourth runway will extend MIA's airfield capacity to the year 2015 and
    possibly beyond with the implementation of operational and demand
    management techniques. As required by the National Environmental Policy
    Act (NEPA), an environmental impact statement (EIS), managed by the
    FAA, was conducted. On December 18, 1998, the FAA issued a positive
    Record of Decision, identifying no significant adverse environmental
    impacts.
        The Miami-Dade Aviation Department has submitted to the FAA an
    application for a Letter of Intent (LOI), for the runway program,
    including the required cost/benefit analysis. The analysis clearly
    demonstrates the runway's merits for FAA funding. A minimum Benefit/
    Cost Ratio of 9:1 is obtained for the runway on the basis of aircraft
    operating cost savings alone and assuming that demand growth is limited
    at relatively modest levels. The total program including associated
    taxiways is currently estimated to cost $200 million. The Miami-Dade
    Aviation Department is seeking a Letter of Intent for $104.3 million
    over a five-year period from the Airport Improvement Program (75
    percent of the cost of the eligible portion of the runway program).
    Miami-Dade County has awarded a contract for the design of the runway.
    The design is expected to be completed by summer of 2000, allowing for
    immediate bidding and award of a contract for the construction of the
    runway. The requested multi-year funding commitment is needed to assure
    the timely implementation of the program.
        Mr. Chairman and Members of the Committee, I urge you to support
    Miami-Dade County's LOI request and ask that you direct the FAA to give
    our application priority consideration.
        South Florida depends on the economic benefits of a thriving
    international airport and cannot afford to have its competitive
    position compromised by inadequate airfield capacity. Further, the
    national airspace system urgently requires the additional capacity that
    relieving congestion at MIA--one of the nation's 20 most congested
    airports--will provide.
        Of course, I would be remiss to conclude my remarks before
    discussing appropriations for the Airport Improvement Program. The
    nation's airports have capital development investments needs exceeding
    $10 billion annually. We know the Subcommittee is aware of these needs
    and supports funding airport infrastructure. We also recognize that the
    Subcommittee has to make difficult choices between many worthwhile
    transportation programs. As Mayor of Miami-Dade County, I can well
    understand the difficulty of the Subcommittee's task in having to
    choose between so many worthwhile programs. We too are faced with
    shrinking budgets and increasing needs and have to make difficult
    choices in allocating scarce resources.
        We were very appreciative last year of the Subcommittee's inclusion
    of a $1.9 billion funding level for the AIP. This funding level
    represented a significant increase over prior years and was very
    welcome by airport operators throughout the nation. Unfortunately, AIP
    was only reauthorized for six months, effectively cutting the
    appropriated level in half unless Congress takes immediate action to
    continue the program until the Aviation Investment and Reform Act for
    the 21st Century (AIR-21) is enacted.
        As you begin your deliberations for fiscal year 1999
    Appropriations, we ask that you once again make every effort to fully-
    fund AIP at the authorized level. Finally, we would like to associate
    ourselves with the testimony presented to this Committee by the
    Airports Council International--North America and the American
    Association of Airport Executives. We are in full support of the
    positions presented to you by our national airport associations.
        Mr. Chairman and Members of the Committee, thank you once again for
    the opportunity to discuss our public mobility needs and our aviation
    infrastructure needs. We look forward to your favorable consideration
    of our request and would be glad to respond to any questions from the
    Subcommittee.
                                     ______

      Prepared Statement of Mayor George Pettygrove, City of Fairfield, CA

    fiscal year 2000 military construction appropriations travis air force
                                      base
        Thank you, Mr. Chairman, and members of the committee for this
    opportunity to speak before you today in support of military
    construction projects at Travis Air Force Base. The Travis Air Force
    Base, located at the City of Fairfield, is in my congressional. I
    request that the committee view favorably the projects I will outline.
        First, I request that the committee provide a $7.6 million earmark
    to construct a new Medical War Reserve Material (WRM) Warehouse at
    Travis Air Force Base in Fairfield, California. It is my understanding
    that this project is included in the Department of Defense fiscal year
    2000 Military Construction Appropriations request.
        Travis Air Force Base is the preeminent U.S. Air Force airlift base
    on the West Coast, and arguably, in the world. Travis personnel,
    aircraft, and facilities are an integral part of the Department of
    Defense's force projection capability. One of the first needs of our
    men and women in uniform upon deployment is ready access to war reserve
    materials, such as bandages and drugs.
        Travis must be ready to accommodate rapid surges in airlift of
    these materials, but current facilities at the base are entirely
    inadequate. In sum, existing facilities are not centralized, do not
    provide adequate protection for the WRMs, and negatively impact
    Travis's ability to successfully undertake this vital mission. This new
    facility will provide a central warehousing and mobilization facility,
    allowing Travis personnel to rapidly deploy essential WRMs to our
    soldiers in the field.
        Second, I request the committee's support for a $7.5 million
    earmark to construct additions to physical fitness facilities at Travis
    Air Force Base located in Fairfield. It is my understanding that this
    project is also included in the Department of Defense fiscal year 2000
    Military Construction Appropriations request.
        As the members of the committee are aware, modern, adequately sized
    fitness center facilities are required to support the Air Force
    emphasis on mandatory fitness for all personnel. Physical well being
    and good morale, resulting in part from adequate fitness facilities,
    are essential to the development and retention of Air Force personnel.
        There are three existing fitness facilities at Travis. One is a
    modern facility but is critically undersized. The other two facilities
    are substandard and cannot be economically upgraded. Without the new
    addition, physical conditioning will continue to be limited due to
    inadequate space. This will adversely affect the morale and well being
    of base personnel, and will adversely impact readiness as service
    members will not be able to maintain proper physical fitness.
        The project funded by this earmark will radically improve fitness
    facilities at Travis and will pay dividends for many years to come in
    terms of both readiness and morale.
        The City of Fairfield appreciates your assistance on these
    projects. As the committee members are aware, the strength of Travis
    Air Force Base is vital not only to the City of Fairfield, but also
    regionally and nationally. Your assistance is greatly appreciated on
    all of these projects. Thank you.
                                     ______

                         FEDERAL HIGHWAY ADMINISTRATION

     Prepared Statement of Michael P. Kenny, Executive Officer, California
    Air Resources Board; Barbara Patrick, Member, Board Supervisors of Kern
      County, Member, California Air Resources Board; Manuel Cunha, Jr.,
    President, NISEI Farmers League; Les Clark, Vice President, Independent
       Oil Producers Agency; Catherine H. Reheis, Managing Coordinator,
                      Western States Petroleum Association

        Mr. Chairman and Members of the Subcommittee: On behalf of the
    California Industry and Government Coalition on PM-10/PM-2.5, we are
    pleased to submit this statement for the record in support of our
    fiscal year 2000 funding request of $100,000 for the California
    Regional PM-10/PM-2.5 Air Quality Study.
        The San Joaquin Valley of California and surrounding regions exceed
    both state and federal clean air standards for small particulate
    matter, designated PM-10/PM-2.5. The 1990 federal Clean Air Act
    Amendments require these areas to attain federal PM-10/PM-2.5 standards
    by December 31, 2001, and the proposed PM-2.5 standards by mid-2003.
    Attainment of these standards requires effective and equitable
    distribution of pollution controls that cannot be determined without a
    major study of this issue.
        According to EPA and the California Air Resources Board, existing
    research data show that air quality caused by the PM-10/PM-2.5 problem
    has the potential to threaten the health of more than 3 million people
    living in the region, reduce visibility, and impact negatively on the
    quality of life. Unless the causes, effects and problems associated
    with PM-10/PM-2.5 are better addressed and understood, many industries
    will suffer due to production and transportation problems, diminishing
    natural resources, and increasing costs of fighting a problem that begs
    for a soundly researched solution.
        PM-10/PM-2.5 problems stem from a variety of industry and other
    sources, and they are a significant problem in the areas that are
    characteristic of much of California. Typical PM-10/PM-2.5 sources are
    dust stirred up by vehicles on unpaved roads, unpaved shoulders and
    dirt loosened and carried by wind during cultivation of agricultural
    land. Soil erosion through wind and other agents also leads to
    aggravation of PM-10/PM-2.5 air pollution problems. Chemical
    transformations of gaseous precursors are also a significant
    contributor to PM-2.5, as are combustion sources.
        The importance of this study on PM-10/PM-2.5 is underscored by the
    need for more information on how the federal Clean Air Act Amendments
    standards can be met effectively by the business community, as well as
    by agencies of federal, state and local government whose activities
    contribute to the problem, and who are subject to the requirements of
    Title V of the Clean Air Act. There is a void in our current
    understanding of the amount and impact each source of PM-10/PM-2.5
    actually contributes to the overall problem. Without a better
    understanding and more information--which this study would provide--
    industry and government will be unable to develop an effective
    attainment plain and control measures.
        This research has direct applications to the Department of
    Transportation. Specifically, Federal Highway Administration research
    funds are available through Caltrans for a number of targeted proposals
    under discussion by officials of both Caltrans and the California Air
    Resources Board. Included among the priority research topics are:
        1. Analysis of methodologies for estimating emissions of PM-10/PM-
    2.5 from California roadways; Significant emphasis on characterizing
    emissions from unpaved shoulders due to large amounts of heavy duty
    vehicle traffic through Central California, which is necessary to
    support California's economy;
        2. Characterization of the sources and composition of PM-10/PM-2.5
    emissions from roadway construction;
        3. Tunnel study; and
        4. Characterization of heavy duty truck activity.
        These studies will explore the effects of roadway construction and
    use on ambient PM-10/PM-2.5 levels. Other proposals under review would
    address problems with unpaved road shoulders, roadway dust mitigation
    strategies and assessment of heavy duty truck travel patterns.
    Currently available data and other PM-10/PM-2.5 research efforts do not
    adequately address transportation concerns, so DOT support of this
    targeted research is essential.
        Our Coalition is working diligently to be a part of the effort to
    solve this major problem, but to do so, we need federal assistance to
    support research and efforts to deal effectively with what is
    essentially an unfunded federal mandate.
        Numerous industries, in concert with the State of California and
    local governmental entities, are attempting to do our part, and we come
    to the appropriations process to request assistance in obtaining a fair
    federal share of financial support for this important research effort.
    In 1990, our Coalition joined forces to undertake a study essential to
    the development of an effective attainment plan and effective control
    measures for the San Joaquin Valley of California. This unique
    cooperative partnership involving federal, state and local government,
    as well as private industry, has raised more than $24 million to date
    to fund research and planning for a comprehensive PM-10/PM-2.5 air
    quality study. Our cooperative effort on this issue continues, and our
    hope is that private industry, federal, state and local governments
    will be able to raise the final $4.6 million needed to complete the
    funding for this important study.
        To date, this study project has benefited from federal funding
    through the United States Department of Agriculture's, the Department
    of Transportation's, the Department of Defense's, the Department of the
    Interior's and the Environmental Protection Agency's budgets--a total
    of $13.3 million in federal funding, including the $200,000 the
    Subcommittee provided in fiscal years 1998 and 1999 bills. State and
    industry funding has matched this amount virtually dollar for dollar.
        With the planning phase of the California Regional PM10/PM2.5 Air
    Quality Study complete, a number of significant accomplishments have
    been achieved. These interim products have not only provided guidance
    for completion of the remainder of the Study and crucial information
    for near-term regulatory planning, they have also produced preliminary
    findings which are significant to the Department of Transportation's
    (DOT) interests.
        The Study is significant to DOT interests for a number of reasons.
    The San Joaquin Valley experiences some of the most severe PM episodes
    in the nation. The information being collected by the PM study is
    essential for development of sound and cost-effective control plans.
    Both directly emitted particulate matter and gaseous precursor
    emissions from transportation sources play a significant role in
    contributing to PM exceedances. Direct PM emissions include
    contributions from on- and off-road tailpipe exhaust, brake- and tire-
    wear, and re-entrained dust from paved and unpaved roads. Gaseous
    exhaust and evaporative emissions from mobile sources also contribute
    to the formation of secondary ammonium nitrate, sulfate, and organic
    carbon. Without a sound understanding of the role that transportation
    sources play in PM exceedances, these sources could be subjected to
    unnecessary or ineffective controls. Control plans for the San Joaquin
    Valley, based upon the results of the PM study, will help address the
    potential impacts of emissions from transportation sources and ensure
    an equitable and effective distribution of controls.
        To this end, the PM study is expending significant resources to
    provide an improved understanding of emission sources within the San
    Joaquin Valley and surrounding regions and to define the impacts of
    these sources on ambient PM. A preliminary field monitoring program was
    conducted during the fall and winter of 1995/1996. Extensive air
    quality and meteorological measurements were collected. This database
    is being analyzed to address a number of questions including: (1) the
    sources contributing to elevated PM10 and PM2.5 concentrations, (2) the
    zone of influence of specific sources, and (3) wind flow patterns and
    transport routes between the Valley and surrounding areas. Additional
    research has addressed emissions from unpaved roads and evaluated the
    effectiveness of dust suppression methods. The results of this study
    suggest that current emissions factors are too low, and that emissions
    from unpaved roads are dependent upon road silt loading rather than on
    soil silt content. The study also identified polymer emulsion and non-
    hazardous crude oil products as the most effective for long-term dust
    suppression.
        The results of these studies are being used to design large scale
    field monitoring programs to be conducted in 1999 and 2000. These field
    programs will address both the annual and 24-hour PM10 and PM2.5
    standards. Surface and aloft monitoring of air quality, meteorology,
    fog, and visibility will be conducted at a cost of over $12 million.
    Final plans for these field studies are being developed, which will be
    carried out by numerous contractors over a broad area encompassing
    Central California, the Sierra Nevada Mountains, and the Mojave Desert.
    Substantial resources will also be devoted to developing improved
    emissions estimates. A database of the field study results will be
    completed in 2001, with air quality modeling and data analysis findings
    available in 2002. This timeline is ideally positioned to provide
    information for federal planning requirements as part of the new PM10/
    PM2.5 national ambient air quality standards.
        The Department of Transportation's prior funding and participation
    have enabled these projects to occur. Continued support by DOT is
    essential to implement a full scope of emissions assessment and control
    method demonstration projects for transportation related sources, and
    to ensure that DOT concerns are met.
        For fiscal year 2000, our Coalition is seeking $100,000 in federal
    funding through the U.S. Department of Transportation to support
    continuation of this vital study in California. We respectfully request
    that the Appropriations Subcommittee on Transportation provide this
    additional amount in the DOT appropriation for fiscal year 2000, and
    that report language be included directing the full amount for
    California. This will represent the final year of funding requested
    from DOT.
        The California Regional PM-10/PM-2.5 air quality study will not
    only provide vital information for a region identified as having
    particularly acute PM-10/PM-2.5 problems, it will also serve as a model
    for other regions of the country that are experiencing similar
    problems. The results of this study will provide improved methods and
    tools for air quality monitoring, emission estimations, and effective
    control strategies nationwide.
        The Coalition appreciates the Subcommittee's consideration of this
    request for a fiscal year 2000 appropriation of $100,000 for DOT to
    support the California Regional PM-10/PM-2.5 Air Quality Study. DOT's
    past contributions have helped ensure the success of the study. The
    coalition thanks you for your support of this important program.
                                     ______

         Prepared Statement of the Coalition of Northeastern Governors

        The Coalition of Northeastern Governors (CONEG) would like to thank
    Chairman Shelby and Ranking Member Lautenberg for the opportunity to
    provide this testimony regarding the fiscal year 2000 U.S. Department
    of Transportation (U.S. DOT) Appropriations. We recognize the critical
    role the subcommittee plays in providing investments in the nation's
    vital intermodal transportation system. The Governors commend the
    subcommittee's efforts to provide increased levels of funding for
    highways and transit in the fiscal year 1999 U.S. DOT appropriations,
    and urge you to continue support in fiscal year 2000 to the levels
    authorized in the Transportation Equity Act for the 21st Century (TEA-
    21). We also urge the subcommittee to continue the important federal
    role in strengthening the nation's passenger and freight rail systems
    through continued investments in rail safety and capital investment in
    Amtrak and other critical rail projects. Continued federal investment
    in transportation research and development is an essential element of
    public and private efforts to enhance the safety and capacity of the
    nation's transportation system.
        An integrated, fully-funded national surface transportation system
    is a critical component in the economic, social, and environmental
    well-being of the Northeast region and the nation as a whole. The
    Northeast is a region that is at once the most densely populated area
    in the nation as well as the most rural; that has the oldest
    transportation infrastructure as well as some of the newest, fastest,
    and most innovative. Its transportation facilities are among the most
    heavily used, and are subject to the widest variation of seasonal
    changes. It is a region that makes the greatest use of public transit,
    that is the most dependent in the country on trucks for delivery of its
    freight, and that makes the shortest trips. As a consequence, the
    Northeast's transportation needs are unique.
        The safety, preservation, and efficiency of the region's
    transportation assets are primary concerns of the Coalition of
    Northeastern Governors. As the subcommittee considers the fiscal year
    2000 appropriations for the Department, the Governors call for the
    subcommittee's support of specific transportation investments which
    have national and regional significance. In addition, the Governors are
    pleased to provide examples from the Northeast states where state-
    federal partnerships and federal investments have contributed to a
    vibrant economy and improved quality of life for the region and the
    nation.
                                invest in safety
        Safety has always been, and remains, of the utmost concern to the
    Governors. The tragic loss of 11 lives in the recent highway-rail
    crossing accident in Bourbonnais, Illinois, clearly demonstrates why
    safety continues to be the top priority for the CONEG Governors.
    Preliminary data shows that in 1998 there were 3,446 highway-rail
    crossing incidents resulting in 422 fatalities.\1\ The Governors have
    exhibited a strong commitment to rail safety through their support for
    grade crossing improvements and education programs such as Operation
    Lifesaver. The Governors specifically and strongly support full funding
    for advanced development of high speed rail corridors by eliminating
    highway grade crossing hazards, as provided in Section 1103(c) of TEA-
    21. These are all excellent examples of successful programs that are
    working to reduce the number of highway-rail crossing fatalities.
    ---------------------------------------------------------------------------
        \1\ Source: Federal Railroad Administration, Office of Safety
    Analysis.
    ---------------------------------------------------------------------------
    Safety Remains the Primary Concern of the Governors
        An at-grade crossing in West Mystic (Groton), Connecticut is the
    site of a Federal Railroad Administration/Connecticut Department of
    Transportation demonstration project of the nation's first quad-gates,
    where a system of four gates is used rather than the usual two,
    preventing waiting vehicles from starting to cross the tracks while
    permitting vehicles on the tracks to clear. A special crossing sensor
    system collects and transmits information about the operation of the
    grade crossing warning devices to the cab of an approaching train at a
    point where the train will have time to stop before reaching the
    crossing. In the event a vehicle is disabled or stopped between the
    gates, the advanced warning system will activate signals in the train
    cab and bring the train to a halt. Exit gates are left in a vertical
    position until the vehicle is off the crossing. The system will be
    monitored for approximately one year to demonstrate its reliability and
    effectiveness. If successful, the technology may be used at other rail
    crossings elsewhere in the country.
                full funding of the highway and transit programs
        As traffic volume continues to increase on the region's highways,
    the Governors recommend funding of highway programs to the levels
    authorized in TEA-21. The Northeast places unique demands on the
    highway system due to weather conditions, age of the system, and truck
    traffic. Increased funding for our highway system will help the region
    remain competitive in the international marketplace by facilitating the
    seamless flow of people and commerce through the gateways to the global
    marketplace.
        The Governors also recommend full funding for the transit programs
    at the levels authorized in TEA-21. Transit plays a vital role in the
    lives of millions of residents in urban, suburban, and rural areas of
    the Northeast. It significantly decreases congestion on roads in
    metropolitan and suburban areas, mitigates isolation in the region's
    more rural cities and towns, and brings environmental benefits to the
    entire region by saving fuel and reducing air pollution. Transit is
    also the critical link in the region's welfare to work and reverse
    commute programs. In 1997, 8.6 billion passengers used public transit
    services, a 7.7 percent increase over the preceding year. Preliminary
    figures for 1998 show that transit ridership is up by an additional
    four percent to 8.9 billion riders--this is the highest level in the
    history of the federal transit program.\2\
    ---------------------------------------------------------------------------
        \2\ Source: American Public Transit Association.
    ---------------------------------------------------------------------------
        Transit projects in the Northeast are uniquely large because the
    need to keep facilities open and operating during improvement and
    redevelopment contributes to high project costs. One example is the
    Long Island Rail Road (LIRR) East Side Access Project identified as a
    priority in the President's fiscal year 2000 budget. This project--on
    the busiest commuter rail system in North America--will use an unused
    level of the existing 63rd Street Tunnel to bring LIRR passengers
    directly into Grand Central Station. It will allow 50,000 riders to
    save over 30 minutes in their daily commute and reduce crowding at Penn
    Station while also increasing LIRR commuter ridership by an estimated
    109,000 weekday passengers. The Governors are pleased that Congress has
    recognized the importance of the project, provided an authorization of
    a minimum of $353 million in TEA-21, and recommended that the project
    be given priority for funding under the Federal Transit
    Administration's New Start program. The Governors request $159 million
    for the project in fiscal year 2000.
        Another proposed New Start program that merits prompt and close
    consideration is the extension of the Massachusetts Bay Transportation
    Authority (MBTA) commuter service line which currently terminates in
    Lowell, Massachusetts, to Nashua and Manchester, New Hampshire. The
    extension into New Hampshire will offer an alternative to single
    occupancy vehicles, providing air quality improvements and needed
    congestion relief on the region's roads and highways.
        In the Northeast, as well as across the country, transportation is
    a vital tool for economic development: creating and preserving jobs,
    linking to North American trade, and invigorating local businesses.
    Throughout the Northeast, transportation investments are contributing
    to economic development and enhanced global competitiveness, improved
    air quality, innovative intermodal means to alleviate congestion, and
    improved quality of life.
        Global Gateways.--An important example of needed investments in
    highways as global gateways is found in northern New England. The
    States of Maine, Vermont and New Hampshire have applied for federal
    funding for the construction of an East-West Highway corridor through
    this tri-state region, and improvement of border crossings with Canada
    which will serve this highway. Funding is being requested under the
    National Corridor Planning and Development Program and the Coordinated
    Border Infrastructure Program under TEA-21. The Northern New England
    Border Corridor is a vital trade route between the U.S. and Canada,
    linking five Canadian Provinces and three New England States, and
    serving as the global gateway to the entire U.S., by providing access
    and connections to the nation's major highways, railroads and ports.
    This project offers an excellent opportunity to fundamentally change
    the economic outlook for the struggling regions of Northern New England
    and Atlantic Canada. The region's existing border crossings are
    currently strained with increased freight and passenger traffic. At the
    Calais, Maine/St. Stephen, New Brunswick crossing alone, truck traffic
    has increased ten percent per year for the past several years. The
    project's goal is to accommodate existing traffic and stimulate further
    trade by creating corridors and crossings designed for the coming
    millennium. By facilitating cross border cargo and vehicle movement and
    contributing to the Nation's ability to compete in a global economy,
    the project has profound national and international significance.
        The Commonwealth of Massachusetts is also requesting funding under
    the National Corridor Planning and Development Program for double stack
    rail service across Massachusetts between the New York border and the
    Port of Boston. This project will allow for uninterrupted double stack
    service across most of the United States providing for the more
    efficient distribution of goods throughout the rest of the nation. The
    project's benefits are numerous and far reaching: shippers and
    receivers in Massachusetts, as well as the Port of Boston, will benefit
    from the competitiveness afforded by double stack service and the
    decrease in truck traffic will improve air quality, reduce highway
    wear, and alleviate highway congestion. These objectives--economic
    competitiveness, intermodal modernization, improved air quality and
    extended highway life--will benefit the Commonwealth, as well as the
    entire nation when the project is complete.
        Intermodal Connections Provide Economic Opportunity.--The region
    has developed numerous innovative intermodal projects to alleviate
    congestion on its heavily traveled interstate system and spur local and
    regional development.
        In Springfield, Massachusetts, the Union Station Intermodal
    Redevelopment Project is revitalizing the regional transportation
    connections for rail and transit. Funded with TEA-21 federal funds,
    matching state grants and additional private sector funds, the
    redevelopment of downtown Springfield's historic Union Station as a
    major intermodal facility will closely link rail and transit serving
    the entire Pioneer Valley of western Massachusetts. The ``Historical
    Union Station'' will house regional and local bus facilities, including
    Pioneer Valley Transit Authority and Peter Pan Bus Lines, as well as
    Amtrak. The project will preserve Springfield's architectural and
    social history by saving and reusing the Baggage Building as a
    transportation center and revitalizing the historic passageway as a
    convenient and active connector between Amtrak, the Station's
    concourse, and the transportation center.
        In Connecticut, a recent Major Investment Study (MIS) investigated
    congestion on Interstate 84 from Hartford west to New Britain. Several
    advisory committees worked together to define the transportation
    problems and screen alternatives. Six strategies were evaluated to
    determine their effectiveness. The result was a hybrid package that
    combines the best features of the strategies and addresses the goals
    that were developed--Modal Choices, Congestion Reduction, Public Health
    and Safety, Economic Development, and Community Livability and Quality
    of Life. The cornerstone of this package is the recommendation of a
    busway on an abandoned rail line between Hartford and New Britain. The
    busway represents a new direction for the state in providing for
    intermodal use and development potential along the I-84 corridor.
        The Rhode Island Department of Transportation has initiated an
    environmental assessment and conceptual design for a new Amtrak/
    commuter rail station on the Northeast Corridor, and automated people
    mover connection to the successful T.F. Green Airport in Warwick, Rhode
    Island located just 1,500 feet from the Corridor. Simultaneously, the
    city of Warwick has taken first steps toward an ambitious 70-acre
    economic redevelopment project that links the airport and the new rail
    station. The Rhode Island Economic Development Corporation and the
    Airport Corporation are also active partners in the project. The
    project offers numerous transportation and economic development
    benefits. The proposed rail station with facilities for Amtrak and
    commuter rail, will provide an important additional means of travel for
    area residents who work in Providence and Boston. The proposed people
    mover element will make the train station an intermodal facility. By
    offering airport users the option of shifting from single occupancy
    vehicles to using the rail station and people mover, the new intermodal
    station can help preserve capacity on local roads and streets and
    enhance air quality.
        Rails-to-Trails Enhance Quality of Life.--Vermont, Rhode Island and
    Connecticut offer examples of transportation public-private
    partnerships which result in significant economic and quality of life
    improvements. The Missisquoi Valley Rail Trail in northwest Vermont has
    proven to be a model federal-state-local-private sector partnership.
    Funded with $1 million of Federal Highway Administration and Vermont
    Agency of Transportation funding, the trail serves as the centerpiece
    of economic development, outdoor recreation, and health and fitness for
    Franklin County. Although open for less than six months, the 26-mile
    multi-use trail is credited with significant economic benefits to local
    retail business, the lodging and restaurant industries, and the service
    sector. The trail is cooperatively managed by state agencies, a council
    of local municipalities, and a non-profit association. Local community
    partners and businesses have contributed time, money, and materials for
    maintenance and enhancements. The rail trail is also viewed as the
    centerpiece for a new county-wide health initiative ``Fit for the
    Millennium.''
        A gubernatorial ``challenge'' resulted in unique teamwork among
    Rhode Island, Connecticut and the National Guard to turn an abandoned
    right-of-way linking Hartford, Connecticut and Providence, Rhode Island
    into a rails-to-trails project. Responding to a friendly challenge
    between Governor Rowland and Governor Almond, the states worked with
    local citizens and officials to obtain local support and full access to
    the trail before having National Guard troops clear and grade the
    trail. The new segment spanning the Rhode Island and Connecticut border
    is a major link in the East Coast Greenway which, when completed, will
    stretch 2,000 miles without break from Maine to Florida. This trail,
    which has been designated by the Rails-to-Trails Conservancy as the
    1,000th trail in the national rails-to-trails system and the 10,000th
    rail-trail mile in the nation, is an example of effective rail-trail
    development for the entire nation.
            continue capital investment in intercity passenger rail
        The Northeast region's passenger and freight rail networks are
    unique assets critical to the economic life of the region. The
    Governors wish to thank the subcommittee for the funding provided for
    Amtrak in fiscal year 1999, and urge that Amtrak be provided with the
    $571 million capital grant requested in the Administration's budget.
    With these capital funds, Amtrak can continue its progress on the
    glidepath to operating self-sufficiency.
        The Governors also wish to thank the subcommittee for its continued
    support of the Rhode Island Rail Development project. This project,
    matched dollar-for-dollar by the state, will construct a third track
    between Davisville and Central Falls, Rhode Island, thus preventing the
    mixing of freight and high-speed passenger trains, and providing
    sufficient clearance for double stack freight cars. The Governors
    recommend funding at a $15 million level.
        As the subcommittee considers funding for passenger rail, the
    Northeast offers numerous examples of rail investments which strengthen
    the transportation system and the economy.
         Northeast Corridor Fuels Passenger Rail Development.--The
    Northeast Corridor is the financial linchpin in the national intercity
    passenger rail network. The Governors look forward to the timely
    completion of the electrification of the Northeast Corridor from New
    York City to Boston, and remain optimistic that the timetable for the
    introduction of high speed rail service on the Corridor will be met.
    This high speed rail service is expected to bring in net incremental
    revenues of $180 million annually by the end of 2002--money that will
    be used for the entire intercity passenger rail system. The increased
    speeds will make Amtrak a competitive alternative to air and road
    travel in this nationally significant corridor and help alleviate
    congestion in the nation's highways and airports. The progress toward
    high speed rail has also spurred economic growth across the country,
    creating jobs in towns where trainsets are being manufactured and
    assembled.
        Growth of Passenger Corridors.--The Governors recognize the
    importance of this passenger rail asset off the Corridor, and support
    intercity passenger rail as part of a broader Atlantic Coast Corridor
    from Maine to North Carolina. In addition to capital funding for
    Amtrak, CONEG supports actions such as new service from Maine to Boston
    via New Hampshire. When the Surface Transportation Board issued a
    decision to set the terms and conditions for Amtrak's use of certain
    rail facilities owned by the Guilford Rail Systems, it cleared the way
    for the use of more than $40 million in federal funds provided for the
    rehabilitation of Guilford's lines between Plaistow, New Hampshire and
    Portland, Maine. Amtrak, Guilford, and the Northern New England
    Passenger Rail Authority have signed the necessary operating and
    rehabilitation agreements that will allow the restoration of Amtrak
    passenger service between Portland and Boston by mid-2000. This has
    rekindled interest in passenger rail service in southeastern New
    Hampshire. Passengers will be able to board Amtrak at new facilities in
    Exeter, Dover and the University of New Hampshire in Durham. Local
    station committees, regional planning agencies, and state
    transportation officials are working together to ensure that these
    facilities are ready for service in 2000.
        The region's rail system supports important passenger and freight
    service to communities and businesses. The Northeast states are looking
    forward to the arrival of our new corporate citizens--CSX and Norfolk
    Southern. These two freight rail corporations will play a significant
    role in the region's complex transportation mix.
        Partnerships for Transportation Services and Economic
    Development.--The CONEG states, under gubernatorial leadership, have
    created successful partnerships through agreements to support intercity
    passenger rail service. An innovative agreement between New York and
    Amtrak marries improved service with economic development and job
    creation, and offers a model for state-Amtrak relations. New York
    Governor George E. Pataki and Amtrak recently announced an historic
    high speed rail program that will invest up to $185 million into the
    state's rail system over five years and provide faster, more convenient
    passenger train service in New York. The initiative, part of a larger
    New York State High Speed Rail Plan, will allow passengers to travel
    from Albany to New York City in less than two hours and reduce the
    travel time between New York City and Buffalo. The five year agreement
    provides a dollar-for-dollar match to rebuild five Turboliner trains
    and make various infrastructure improvements along the Empire Corridor.
    New York is also pursuing high speed rail improvements outside the
    Amtrak agreement which will further improve service within the Empire
    Corridor. The Governors urge you to support federal funding for these
    broader state initiatives.
        Vermont is in its fourth year of operating partnerships with
    Amtrak. Operations have grown from a single service, the Vermonter, to
    include the Ethan Allen Express, which travels north from Albany, New
    York to Rutland, Vermont. Both trains are extensions of the existing
    Northeast Corridor services from Springfield, Massachusetts and Albany,
    New York. Ridership has been growing steadily, with over 165,000
    passengers boarding at Vermont stations between January 1997 and June
    1998.
                       invest in research and development
        In many congested areas of the country, expanding existing or
    building new infrastructure is not an option. Technology can greatly
    enhance the safety and capacity of the existing highway and transit
    systems. The federal government must continue its investment in
    transportation research and development. The Governors support full
    funding for research and development, specifically the Federal Railroad
    Administration's Next Generation of High-Speed Rail programs which
    continue to make a valuable contribution to the development of the next
    generation non-electric locomotive. Intelligent Transportation System
    (ITS) research and deployment, particularly through institutions such
    as the I-95 Corridor Coalition, can effectively increase the safety and
    mobility of the transportation system in the region and across the
    nation.
        The CONEG Governors thank Chairman Shelby, Ranking Member
    Lautenberg, and the entire subcommittee for the opportunity to present
    this testimony. We appreciate your dedication and support for the
    Nation's transportation investments.
                                     ______

     Prepared Statement of the Advanced Transportation Technology Consortia

        The Advanced Transportation Technology Consortia appreciate the
    opportunity to provide testimony to the Committee. This testimony is
    submitted in support of the Department of Transportation's Advanced
    Vehicle Program and is offered on behalf of the seven Consortium
    Leaders:
        Sheila Lynch, Northeast Alternative Vehicle Consortium (NAVC),
    Boston, MA
        Robert Swanson, Mid-Atlantic Regional Consortium for Advanced
    Vehicles (MARCAV), Johnstown, PA
        John Wilson, Southern Coalition for Advanced Transportation (SCAT),
    Atlanta, GA
        Ellen Engleman, Electricore, Indianapolis, IN
        Michael Gage, CALSTART--WestStart, Pasadena, CA
        Michael Wirsch, Sacramento Electric Transportation Consortium
    (SETC), Sacramento, CA
        Thomas Quinn, Hawaii Electric Vehicle Demonstration Project
    (HEVDP), Honolulu, HI
        In the landmark TEA-21 legislation approved in 1999, Congress
    authorized $50 million in funding per year for the Advanced Vehicle
    Program (AVP) of the Department of Transportation (DOT). The goals of
    the AVP are to build a globally competitive transportation industry
    while lessening the environmental impact from the transportation
    sector. In passing this legislation, Congress recognized that while the
    Federal Government has provided significant funding for light-duty
    vehicle development through its Department of Energy (DOE) managed
    Partnership for a New Generation of Vehicles (PNGV) with the Big Three
    Automakers, there remains a strong need to fund similar developments in
    the area of medium-duty and heavy-duty vehicles, which is the key focus
    of the DOT AVP effort.
        The AVP began with a vision: that private talent and public goals
    could come together to make America a leader in advanced
    transportation. Originally launched from the 1992 ISTEA legislation as
    the Advanced Transportation Technology Consortium (ATTC) program, that
    vision is now a national reality and a recognized success. This
    partnership--based on collaboration, innovation and cost-
    effectiveness--has worked to develop advanced transportation
    technologies to reduce vehicle emissions, enhance U.S. competitiveness,
    and decrease the nation's reliance on foreign oil. Now, this vital
    model--partnering private companies, research agencies and the public
    sector in shared risk and shared cost technology development--is
    entering a new phase.
        During the past six years, the ATTC effort has been augmented
    through six consecutive years of funding from the Defense Advanced
    Research Projects Agency (DARPA) within the Department of Defense.
    DARPA tapped the program as an effective, fast-tracked way to develop
    the next generation of combat vehicles using hybrid-electric
    drivetrains. The seven consortia funded under this program launched
    over 300 separate technology development projects with over 450
    companies, ranging from large defense contractors to small, innovative
    businesses. All now stand ready to expand their efforts in a fully
    funded AVP.
        The original reasons for launching the ATTC program remain today
    for supporting the AVP: reducing air pollution from transportation,
    cutting dependence on foreign oil, and promoting and maintaining
    American leadership in new technologies and the highly competitive
    global transportation industry. Vehicle emissions--the bulk of air
    pollution causing smog--continue to seriously threaten public health,
    as well as create unfair and anti-competitive pressures on stationary
    sources of pollution such as manufacturing plants. Transportation is
    using 50 percent of America's energy, playing a growing role in the
    nation's economy and affecting its ability to compete with other
    countries. And, the nation's dependence on foreign oil, largely driven
    by vehicle fuel consumption, is at an all time high, a serious concern
    for national security and the economy. Environmental pollution is a
    concern that is clearly not going away, and transportation accounts for
    one-third of all emissions.
        A wide array of solutions are being sought to resolve these
    transportation problems. The nation's advanced transportation consortia
    are the backbone making the AVP work. They help cost-effectively tap
    the talent and energy of America's technology community. Aerospace
    firms, high technology corporations, and start-up businesses are now
    recognizing that they can and must play a substantive role in solving
    our nation's transportation problems. The consortia link together these
    firms, not only creating leading-edge technology programs, but also
    helping companies find partners, share information, improve their
    technology, and find market opportunities. Through the ATTC these
    organizations are speeding the pace of technology development to
    compete in the rapidly growing, global, multi-billion dollar advanced
    transportation industry.
        This novel program makes optimal use of the Other Transactions
    Agreement Authority, which provides for expeditious contracting that is
    milestone driven. If a project is not successful, it can be terminated
    early, unlike other government contracts. This authority contributes to
    a high level of success. The program retains the bottom-up, public-
    private partnership structure of the DARPA Program. Federal funding is
    awarded on a competitive basis to seven geographically dispersed,
    regional consortia representing private industry and other nonfederal
    government organizations, with a minimum 50 percent cost share by the
    consortia. That means for every federal dollar invested in the advanced
    transportation technology programs, there is at least one dollar
    invested by private companies and their partners.
        Fiscal year 1999 was the transition year from DARPA to DOT.
    Proposal submissions totaling $120 million for fiscal year 1999 were
    competitively down-selected to $35 million of eligible, viable
    projects, with a matching contribution of $47 million from the private
    sector. However, the funding appropriation dropped to $14 million,
    leaving many valuable projects unfunded. DARPA funding for this program
    previously peaked at $46.5 million. Congress realized that a viable
    program requires a $50 million annual commitment, which is reflected in
    TEA-21. The ATTC respectfully requests your support for an
    appropriation for the full authorized amount of $50 million in fiscal
    year 2000.
                                success stories
        Following are a sampling of some of the many successful
    accomplishments by the ATTC through this public/private partnership
    program:
    Composite Hybrid Bus
        A Rhode Island company famous for its manufacture of sailboats has
    entered the bus market with a lightweight composite bus chassis and
    body. TPI Composites used a unique composite construction to develop a
    30-foot transit bus that is 30 percent lighter than standard buses in
    use today; the significant weight reduction means greater fuel
    efficiency and reduced emissions. The composite material is also non-
    corrosive, so it won't rust. The prototype bus--powered with a hybrid
    electric drive system--was recently unveiled and will enter into
    demonstration service at Boston's Logan Airport. North American Bus
    Industries (NABI) signed an agreement with TPI to develop the composite
    body and chassis for commercial sale in the near future.
    Hybrid Propulsion System in Medium and Heavy-Duty Platforms
        Lockheed Martin Control Systems and Navistar International teamed
    up to convert three medium and heavy-duty platforms to hybrid
    propulsion systems. A package delivery truck, a cargo van, and a school
    bus are each being equipped with Lockheed Martin's HybriDriveTM system
    and placed into demonstration. UPS is evaluating the package delivery
    truck; Eby Brown will evaluate the cargo truck; and Laidlaw will
    evaluate the school bus. The evaluation will consider system
    reliability, fuel efficiency, emissions, and driveline performance,
    with the results being used to improve and refine Lockheed's hybrid
    propulsion system for medium and heavy-duty applications. Lockheed is
    the first company to bring hybrid propulsion to market in medium and
    heavy-duty applications.
    Solectria Motors and Controllers
        NAVC played a key role in the success of a technology leader in the
    EV industry, Solectria Corporation. Solectria is one of the primary EV
    component suppliers worldwide for many applications with approximately
    1000 vehicles powered with Solectria components and with diverse
    partners including Advanced Vehicle Systems, GPE Batteries and
    Singapore Technologies. Over 350 Solectria vehicles have been delivered
    to customers in the U.S. and abroad, including electric utilities,
    government organizations, private corporations, universities and
    individual consumers. Solectria's success has lead to the creation of
    high-tech jobs in the Northeast, has helped seed the EV market by
    providing a source for reliable EV componentry, and has advanced the
    state of EV technology.
    EV Commuter Programs
        Electric vehicle commuter programs are designed to encourage public
    transit ridership, reduce congestion and pollution, and increase public
    awareness of electric vehicles. NAVC launched highly successful
    commuter programs in the Northeast, bringing together EV manufacturers
    and suppliers, utility companies, mass transit agencies and commuters.
    In Massachusetts, commuters leased an EV and used the car to travel
    from the train stations to their homes, or from the train stations to
    their offices. In Connecticut, commuters drove EVs as part of a
    Rideshare program. And, in Vermont, the program helped advance the
    technology through experimentation with advanced batteries in cold
    weather conditions. Altogether, over 200,000 miles were logged by
    commuters in these programs.
    Inverters with Polymer Metal Layer Capacitors
        Recent advances in Polymer/metal Multi-Layer (PML) technology,
    being developed by Sigma Technologies International, Inc., are
    advancing high performance battery and capacitor developments
    applicable to electric vehicles (EVs) and hybrid electric vehicles
    (HEVs). The PML capacitors will now be tested in EV and HEV inverters
    that are used to convert the DC bus power to AC power to drive the
    electric motors. The PML technology will enable inverters that are
    smaller, more efficient, lighter, and require less cooling than current
    inverters. Both commercial and military applications will benefit from
    the advanced technology.
    Utility Electric Vehicle (UEV)
        The Keystone Team has developed a composite, electric powered pick-
    up style truck. The composite structure is a toughened epoxy matrix
    with continuous glass fiber reinforcement. The vehicle is front wheel
    drive and incorporates standard automotive safety features in a styled
    body with a comfortable interior. The vehicle was first unveiled at the
    Environmental Vehicles 1997 Conference and Exposition in Detroit, MI on
    April 7-10, 1997. Under a project continuation, Concurrent Technologies
    Corporation will design and test a unique composite crash energy
    absorbing system for this vehicle. This energy absorbing system is
    based on patented NASA technology.
    Integrated Simulation and Field Testing of Electric Vehicle Batteries
        Advanced analytical techniques are being developed by the
    Pennsylvania State University to simulate the chemical processes in
    batteries. These modeling approaches have been used to identify design
    factors that limit battery performance, allowing battery manufacturers
    to improve their products. In addition, a new methodology to determine
    the state of charge for all battery chemistries will be developed. This
    methodology promises to provide an accurate vehicle state of charge
    meter.
    Hybrid-Electric Bradley Fighting Vehicle
        A hybrid electric propulsion system is being designed and installed
    into a Bradley Fighting Vehicle (BFV) by United Defense. The project
    objective is to demonstrate the automotive and operational advantages
    of hybrid-electric drive for tracked combat vehicles and to develop
    high power density electric drive components for heavy-duty
    applications, such as Class 8 vehicles.
    Advanced Locomotive
        The Advanced Locomotive Propulsion System (ALPS), funded by the
    Federal Railroad Administration and a team of rail industry/university
    partners, is designed to replace an existing dual locomotive diesel
    with a locomotive powered by an advanced turbine and flywheel battery.
    The combined system will provide up to 6000 HP in a locomotive capable
    of 125 mph passenger rail operation. The unit is expected to produce
    less than one fourth the emissions of current trainsets for the same
    amount of tractive work and is being designed for a new Bombardier
    locomotive under development for the Federal Railroad Administration.
    The project is being led by the University of Texas Center for
    Electromechanics and includes the American Association of Railroads,
    AlliedSignal, the Volpe Center, Argonne National Laboratory, and the
    State of Texas.
    Hybrid Electric High Mobility Multi-purpose Wheeled Vehicle (HMMWV)
        SCAT has delivered a hybrid electric HMMWV to the U. S. Army's Tank
    Automotive and Armaments Command that exceeds the performance of the
    existing ``stock'' HMMWV used by the military. The vehicle, developed
    by PEI Electronics, McKee Engineering, Electrosource, and Unique
    Mobility, features four individual wheel drives with 280 HP (at the
    wheels) in the all-electric mode and 360 HP in the hybrid mode. The
    hybrid electric vehicle delivers twice the acceleration, 38 percent
    more range and 20 percent higher top speed than the standard internal
    combustion vehicle for half the fuel and one-quarter the emissions.
    Flywheel Containment
        A Flywheel Battery Safety Containment project is linking top
    flywheel development teams nationwide, including a state-of-the-art
    spin testing facility at Test Devices, Inc., which has been fully
    instrumented for flywheel burst testing. More that 30 ``burst'' tests
    have been completed for composite and metal flywheel designs destined
    for commercial production. NASA and the Air Force have recently
    initiated work with this group to explore certification procedures for
    flywheel rotors destined for space applications such as the space
    station, work that will proceed jointly with the group exploring
    ``terrestrial'' applications.
    Electric Buses
        Electric Bus efforts at SCAT include drive train development,
    auxiliary systems and complete vehicle demonstrations. Early projects
    led to the decision by Blue Bird to enter commercial production on
    electric school buses and transit buses. Other projects have helped
    Advanced Vehicle Systems improve on the reliability and performance of
    their lightweight transit buses, leading to shuttle systems from Maine
    to Miami Beach. Current projects are exploring improving battery
    performance, rapid charging, and testing alternative propulsion
    systems. Many of these buses were part of the FTA demonstration fleet
    in the all-electric transportation system in the Olympic Village during
    the Centennial Olympic Games in Atlanta.
    Hybrid Propulsion Systems for Heavy Vehicles
        Allison transmission, Division of General Motors, has successfully
    designed a series hybrid conversion of a 40 foot transit bus for New
    York City. Working in partnership with the New York City Transit
    Authority, Detroit Diesel, and TDM, the bus will be unveiled at the New
    York City Auto Show on March 30th. Allison is also working on
    developing its parallel hybrid propulsion system designed for heavy
    vehicles such as Class 7 and 8 trucks as well as military vehicles.
    Using an electric variable transmission, this propulsion system will
    revolutionize the heavy vehicle marketplace.
    EVs Ready for Fast Charging
        Electric trolleys, capable of rapid re-charge, are being delivered
    for transit application to Evansville, IN. Electricore is working with
    Ford Motor Company to provide near term, fast-charging electric pick up
    trucks for application in utility and commercial fleets.
    Hybrid Trucks and Buses for Military Use
        Electricore and TDM are successfully delivering the first hybrid
    electric trucks and buses for use at Robins Air Force base. Robins is
    home for the Alternative Fueled Vehicles Special Programs Office, which
    has oversight for vehicle purchases throughout the Air Force. This
    effort is a major step in assisting the military in meeting the EPAct
    guidelines
    Electric Trams for National Parks
        Electricore has developed electric trams to support clean
    transportation within the fragile environment of our National Parks.
    Electric trams are being used to transport thousands of annual visitors
    at Cape Cod National Seashore and Patuxent Wildlife Refuge. Other
    electric vehicles are being introduced at Channel Islands National Park
    and other National Park Service /Department of Interior sites.
    High Efficiency Turbogenerator
        The high-efficiency turbogenerator from Capstone Turbines is the
    key element in the successful AVS hybrid electric bus, operating in
    Chattanooga, Tennessee. The turbine generator uses compressed natural
    gas fuel to generate electrical power. This popular, clean and quiet
    system has been dubbed by riders as the ``hummingbird'' for the silent
    hum it produces, and is leading to a new product line of capable,
    transit-quality hybrid buses.
    CyberTran
        A new generation of transit flexibility and mobility is being
    demonstrated by the CyberTran project--a technology developed at the
    Idaho National Engineering and Environment Lab (INEEL) and now being
    tested at a CALSTART/WestStart business incubator. The lightweight,
    demand-responsive automated vehicles can carry between 8 and 32
    passengers along a high-speed network of stations that promise far
    lower cost to construct and support than conventional light rail. Next
    phase: a transit support test, such as an airport link.
    Hybrid Electric Prototype Truck
        ISE Research has developed the nation's first Class 8 hybrid
    electric truck, pushing the limits on technology for more efficient and
    cleaner heavy-duty drive systems. The project has replaced a diesel
    engine with a hybrid drive train consisting of a clean natural gas
    engine-generator, batteries and an electric drive system. Kenworth, a
    major truck manufacturer, will test the vehicle at its Washington state
    facilities.
    Flywheels
        Rapid recharging and more efficient transit and heavy-duty vehicles
    are some of the key benefits of the Trinity Flywheel energy storage
    system--one of six CALSTART/WestStart flywheel projects. Flywheels can
    quickly store and release tremendous amounts of power, allowing highly
    efficient recapturing of braking energy on large vehicles. It also will
    allow storage of electrical energy ``off-line'' so rapid charging does
    not cause havoc with electric utility system operations.
    Fuel Cells
        H Powers Systems' proton exchange membrane (PEM) fuel cell, and
    Hydrogen Burner Technologies' multi-fuel reformer, are being readied
    for demonstration on an electric shuttle bus by the end of 1999. This
    system can use gasoline, diesel or other fuels, yet operates at near-
    zero emission levels.
    Advanced Fleet Vehicles
        SETC companies are developing innovative and improved energy-saving
    structural composite components and subsystems for mass transit and
    over-the-road truck platforms, and demonstrating the resulting products
    in revenue service applications.
    Electric Bus Development
        Bus Manufacturing USA, Inc. (BMI) is designing its new generation
    of highly reliable electric and hybrid electric advanced transit and
    shuttle platforms at its factory in Sacramento. With over 18 years in
    the business, BMI is a leader in building state-of-the-art prototype
    and proof of concept fuel cell and battery-powered electric buses.
    Battery Dominant Hybrid Electric Vehicle Systems Development and
            Evaluation
        General Motors, SMUD and UC Davis are developing power train and
    CVT transmission systems for grid connected hybrid electric versions of
    the Chevrolet S-10 and Suburban, to help meet the growing demand for
    cleaner, more efficient sport utility vehicles Americans love to drive.
    Rapid Charging System
        HEVDP initiated a project to make Hawaii the first State to be EV
    Ready with rapid charging infrastructure. A joint venture involving the
    Hawaiian Electric Company and Hawaii Electric Vehicles, Inc., is
    installing the AeroVironment PosiCharge Rapid Charging System
    throughout the entire State of Hawaii. These systems set the industry
    standard for rapid chargers and are state-of-the-art, UL approved. This
    rapid charging infrastructure will allow motorists anywhere in the
    State to charge their electric vehicle in less than ten minutes. Hawaii
    will serve as the model EV Ready State. Under a parallel program these
    rapid chargers will also be installed in California.
    Panther Drive System
        U.S. Electricar has developed a family of drive systems to meet the
    needs of all vehicle manufacturers. Through the support of HEVDP they
    are operating 60 kW systems in pick-up trucks and 120 kW systems in
    buses. They have also developed a 90 kW drive system that has been
    selected as the electric drive system for a major automobile
    manufacturer. Additionally, there is a 240 kW system under development
    for heavy vehicle application in either an all-electric or hybrid
    electric mode. This program has enabled US Electricar to partner with
    vehicle chassis manufacturers and serve as the drive system integrator
    for advanced transportation systems.
    Plastic Lithium-Ion (PLI) Battery
        PLI battery technology is being developed under HEVDP for use in
    electric vehicles. Utilizing the Bellcore technology, High Energy
    Technology, Inc., is applying their experience and high volume
    production capability in computer and cell phone batteries to develop
    PLI battery cells for vehicles with a minimum of 130 Whr/kg of energy
    storage. This will be integrated into a full vehicle pack with a 128
    AHr capacity. Of the existing battery candidates, PLI offers the
    lightest, most electropositive metal, provides the largest energy
    content, is safe, and allows low cost production. PLI technology will
    triple the range of vehicles currently using lead-acid batteries.
    Electric Trolley
        Classic Trolleys, Inc. and Motorized Manufacturing, Inc. built an
    all-electric trolley powered by a heavy-duty 120kW drive system. This
    initial classic style trolley is operated by E Noa Tours and Travel and
    features an advanced battery pack that can be changed in less than five
    minutes. The successful demonstration of this technology has led to
    purchase decisions by transportation providers in tour and
    entertainment activities.
                    participating organizations in the attc
        Although regionally located, the ATTC collaborate in a national
    effort that touches on nearly every state in the country. The
    Consortium Leaders represent these organizations throughout the
    country, which participate in, benefit from, and provide matching
    contributions for the AVP.
                               navc participants
    State of Connecticut
    State of Massachusetts
    State of Maine
    State of New Hampshire
    State of New Jersey
    State of New York
    State of Rhode Island
    State of Vermont
    City of New York
    Advance U.S.A.
    Advanced DC Motors
    Advanced Product Development
    Advanced Vehicle Systems
    Arthur D. Little
    Atlantic Center for the Environment (QLF)
    Bangor Hydro-Electric
    Black Emerald Group
    Boston Edison
    Boston Gas Company
    Brooklyn Union
    Cart-A-Ways
    Connecticut Municipal Electric Energy Cooperative (CMEEC)
    Connecticut Department of Administrative Services
    Connecticut Department of Transportation
    DC Transformation
    Design Evolution 4
    Distrigas
    Dow-UT
    Dynapower Corporation
    Electric Vehicles of America
    ETS, Inc.
    EVermont
    Federal Fabrics-Fibers
    Ford Motor Company
    Green Mountain Power
    H-Power
    IBIS Associates
    International Fuel Cell
    Kaman Electromagnetics Corporation
    Lightbody Technology, Inc.
    Lockheed Martin Control Systems
    Long Island Lighting Company (LILCO)
    Mack Trucks Inc.
    Maine Department of Environmental Protection
    Massachusetts Division of Energy Resources (DOER)
    Massport, Logan International Airport
    M.J. Bradley Associates
    Modine Manufacturing Co.
    Montague Corporation
    Natural Resources Defense Council of Maine
    Navistar
    New England Gas Association
    New England Governors Conference
    New Hampshire Governors Office of Energy & Community Services
    New Hampshire Technical Institute
    New Jersey Office of Sustainability
    New York City Department of Environmental Protection
    New York City Department of Transportation
    New York City Metropolitan Transit Authority
    New York Power Authority (NYPA)
    Northeast Clean Power Campaign
    Northeast States for Coordinated Air Use Management (NESCAUM)
    Northeast Sustainable Energy Association (NESEA)
    Northeast Utilities
    Pepin Associates
    Precision Magnetic Bearing Systems
    Rhode Island Department of Environmental Protection
    Rhode Island Department of Transportation
    The Rideshare Company
    Sanden International
    Solectria Corporation
    TASC, Inc.
    Textron Automotive Company
    Thermal Wave Imaging, Inc.
    TPI Composites
    Tufts University Fletcher School of Law & Diplomacy
    Union City Body Company
    United Illuminating Company
    U.S. Army Cold Regions Research and Engineering Laboratory
    U.S. Army Research Laboratory Electronics & Power Sources Directorate
    U.S. Air Force Base, Hanscom Field
    U.S. Naval Undersea Warfare Center
    United Technologies
    University of Connecticut
    University of Massachusetts
    University of Vermont
    Vermont Public Power
    Vermont Department of Public Service
    West Virginia University
    Williams International
                              marcav participants
    Advanced DC Motors
    Advanced Composite Products, Inc.
    Advanced Composite Products and Technology, Inc.
    Advanced Materials Corporation
    Advanced Modular Power Systems, Inc.
    Aluminum Company of America
    AMP Incorporated
    Arbin Instruments
    California Air Resources Board
    Chattanooga Area Regional Transit Authority
    City of Wilkes-Barre, PA
    Clever Fellows Innovation Consortium, Inc.
    Concurrent Technologies Corporation
    Drake Associates, Inc.
    Duquesene Light
    Econd/Tavrima
    Electric Transit Vehicle Institute
    Ergenics, Inc.
    General Electric--Corporate Research & Development
    Hercules Incorporated
    International Fuel Cells
    Kaman Electromagnetics, Inc.
    Lockheed Martin
    Maxwell Advanced Energy Products
    MagneTek Corporation
    Mechanical Technology, Inc.
    Michigan State University/AMEES
    Moltech Corporation
    MTA New York City Transit
    Navistar International
    New York City Transit
    New York State Energy Research and Development Authority
    Northrop Grumman ESSD
    ONSI Corporation
    PACCAR Inc.
    Pennsylvania Department of Environmental Protection
    Pennsylvania Energy Office
    Pennsylvania Power and Light
    Pennsylvania State University
    Pennsylvania Transportation Institute
    Pennsylvania Turnpike Commission
    Peterbilt Motors Company
    Sigma Technologies International, Inc.
    Solectria Corporation
    Southeast Pennsylvania Transit Authority
    Southwest Research Laboratories
    Synkinetics, Inc.
    Transportation Design and Manufacturing Co.
    Tribology Systems, Inc.
    TRS Ceramics
    Unique Mobility, Inc.
    United Defense LP
    Washington D.C. Department of Public Works
    Westinghouse Electric Corporation--Electronic Systems Group
    Westinghouse Electric Corporation--Naval Systems Division
    West Virginia University
                               scat participants
    Aberdeen Test Center
    Advanced Charger Technology
    Advanced Lead-Acid Battery Consortium
    Advanced Vehicle Systems
    AeroVironment
    Alabama Power Company
    AlliedSignal Aerospace Systems & Equipment
    American Association of Railroads
    American Maglev Technology
    Anniston Army Depot
    Arbin Instruments
    Argonne National Laboratory
    Atlanta Chamber of Commerce
    Austin Power & Light
    Blue Bird Body Company
    Bombardier Recreational Products
    Central & Southwest Services
    Chattanooga Area Regional Transit Authority
    Clemson University
    Dax Industries
    Deere & Company
    Delphi Energy & Engine Management Systems
    East Penn Manufacturing Company
    Electric Auto Corporation
    Electric Transit Vehicle Institute
    Electric Vehicles International
    Electrosource
    Energy Partners
    Ferro Magnetics Corporation
    Fisher Electric Technology
    Florida Alliance for Clean Technologies
    Florida Power & Light Company
    Florida Solar Energy Center
    Georgia Power Company
    Georgia Institute of Technology
    GM Advanced Technology Vehicles
    Gulf Power Company
    Houston Metropolitan Transit Authority
    IXYS Corporation
    John Eriksen and Associates Research
    Johnson Research & Development Company
    McKee Engineering
    Maryland Department of the Environment
    MEAG Power
    MESA
    Miami Beach Transportation Management Association
    Neocon Technologies
    New Generation Motors Corporation
    North American Bus Industries
    Northrop Grumman
    Oak Ridge National Laboratory
    PEI Electronics
    PEZIC
    Robins Air Force Base
    Rockwell Automation
    SAFT America
    SK International
    Solectria Corporation
    Space Marketing
    Tennessee Valley Authority
    Test Devices
    Trojan Battery Company
    TUG Manufacturing
    Unique Mobility
    University of Texas
    Virginia Power
    Virginia Power Technologies
    York Tech
    Yuasa
                            electricore participants
    Advanced Bus Industries, LLC
    Advanced Vehicle Systems, Inc.
    Advanced Vehicle Technology Center at Griffiss Business Park
    Advanced Vehicle Technology Institute
    AeroVironment, Inc.
    Allied Signal
    Allison Engine Company
    Allison Transmission, Division of GMC
    Baker Electromotive
    Battery M.D.
    Cape Cod National Seashore
    Channel Islands National Park
    Chattanooga Area Rural Transit Authority
    CINergy Corporation, PSI Energy
    City of Indianapolis
    Defense Advanced Research Project Agency (DARPA)
    Delco Remy America
    Delco Remy International
    Delphi Energy & Engine Management Systems, Inc.
    Electric Power Research Institute
    Electric Transit Vehicle Institute
    Electric Vehicles International, Inc.
    Ford Motor Company
    General Dynamics
    GLobal Electric Auto Association
    Hudson Institute
    Hughes Technical Services Corporation
    Indiana-Michigan Power
    Indiana University/Purdue University at Indianapolis
    Indianapolis Power & Light
    Nartron Corporation
    NASA Lewis Research Center
    Naval Surface Warfare Center, Crane Division
    Navistar International
    NeoCon Technology Corporation
    Lockheed Martin
    New York City Transit Authority
    Northern Indiana Public Service Company
    Northwest Diversified Services
    Oak Ridge National Labs
    Patuxent Wildlife Refuge
    Premium Power Systems
    Purdue University at West Lafayette
    Russell Energy Corporation
    Rutgers University
    SatCon Technology Corporation
    Shape Energy Resources, Inc.
    Solectria Corporation
    South Bend Public Trnasportation Corporation
    Southern Indiana Gas and Electric Company
    Southwest Research Institute
    State of Indiana
    Storage Battery Systems
    TDM, Inc.
    Tennessee Valley Authority
    Transportation Research Center, Inc.
    U.S. Army TACOM
    University of Iowa
    University of Missouri-Rolla
    University of Wisconsin
                        calstart/weststart participants
    ACT Battery Company
    ABL, Inc.
    AC Propulsion
    AC Transit
    A-Z Bus Sales
    Advanced Projects Research, Inc.
    Advanced Technology Group
    Aeronautical Systems, Inc.
    AeroVironment, Inc.
    Air-O-Matic Power Steering
    Alameda Chamber of Commerce
    AlliedSignal Power Systems
    Altamont Technologies, Inc.
    Alternative Dual Fuels, Inc.
    Alternative Electric
    Alturdyne
    Amerigon, Inc.
    Analogy, Inc.
    Ang'elil Graham Architecture
    Ansaldo Ricerche SRL
    APS Systems
    ARA, Inc.
    Ariel Technologies
    Ashman Technologies
    Avcon
    Bank of America
    Bay Area AQMD
    Battery M.D., Inc.
    Bachmon Engineering
    Battery Powered Electric
    Bell Vehicles Company
    BMI
    BOLDER Technologies Corporation
    Bowles Langley Tech.
    Bridgepoint Systems
    Bronson, Bronson & McKinnon
    California Department of Transportation (CALTRANS)
    California Energy Commission
    California Environmental Protection Agency
    California Institute of Technology
    California State University Institute
    Calnetix
    Capital Group Companies, Inc., The
    Capstone Turbine Corporation
    Clean Air Products Technology
    Cruising Equipment Company
    CCL & Associates, Inc.
    Central EV Coalition
    ChemTEK, N.A.
    City of Alameda, Bureau of Electricity
    City of Anaheim
    City of Lancaster
    CM International
    Clean Air Vehicle Tech. Center, Inc.
    CNGVC--California Natural Gas Vehicle
    Coalition
    Collmer Semicondutor
    Coriolis Corporation
    CyroFuel Systems
    CSLA School of Engineering & Technology
    CTJ Corporation
    Currie Technologies, Inc.
    CyberTran International
    Diversified Technical Services
    DivTech
    EBCRC--Workers to Business Owners Project
    Edison EV
    Electric Fuel Corporation
    Electric Vehicle Information Service
    Electric Vehicle Infrastructure, Inc.
    El Dorado National
    Electric Auto Association
    Electric Auto Corporation
    Elliott Energy Systems
    Emfree Motors
    Energy Conversion
    Energy Research Corp.
    Engine Corporation of America
    ETAK, Inc.
    FAS Engineering
    FEV Engine Technology
    Ford Motor Company
    Freightliner Corporation
    Gas Research Institute
    Gillig Corporation
    Glacier Bay, Inc.
    Global Green Cars
    Global Tech Services
    General Motors ATV
    Ginler Technologies, Inc.
    Ginter Vast Corporation
    Green Motorworks
    Graphic Systems
    Hattori & Associates
    Helios International
    HomeStead Enterprises
    Howard, Rice, Nemerovski, Canady, Falk & HR Moore Consultant
    Hewlett Packard
    HUB Engineering
    Intelligent Measurement, Inc.
    International Rectifier Corp.
    ISE Research
    It's Electric
    IXYS Corporation
    IMPCO Technologies
    Integrated Micromachines, Inc.
    Intertrade SRL
    IWON Motronics Corporation
    Jet Propulsion Laboratory
    Jinriksha
    Jenkins Machinery Company
    Kassabian Motors
    Kilovac Corp
    Lawrence Livermore National Lab
    Kaylor Energy Products
    Kitsap Transit
    Kummerow Corp of North America
    Lafayette County Car Co., LLC
    Litton Industries, Inc.
    Lockheed Martin IMS
    Lockheed Missiles & Space Company
    Lone Star Energy
    Maxdem, Inc.
    Metallic Power, Inc.
    Modular Electrical Vehicles
    Montgomery Securities
    Mosaic Industries
    Motorola
    Maintenance Technologies, Inc.
    Marinco Holdings SDN BHD
    Moller International
    Nevada Automotive Test Center
    NEVCO
    Next Century Power, Inc.
    NAPTech Pressure Systems
    NASA Technology Transfer Center
    Natural Fuels Corporation
    Natural Resources Defense Council
    Naval Facilities Engineering Service Center
    Next Century Energy
    NGV USA, Inc.
    Nova BUS
    NRG Technologies, Inc.
    Nth Power Technologies
    Optima Batteries
    Opus Technology
    Oregon Office of Energy
    Ovonics Battery/ECD
    ODU-USA, Inc.
    Pacific Electric Vehicles, LLC
    Pacific Gas & Electric Company
    PCI
    Phasor Corporation
    PIVCO
    Positive Impact
    Powers Design International
    Pro Electric Vehicles, Inc.
    Procyon Power Systems
    Paccar
    Pacific Enterprises
    Panatec Associates
    Pinnacle Mining N.L.
    PolyStor Corporation
    Port of Los Angeles
    Possibilities Tech
    Port of Los Angeles
    PROE Power Systems
    Raychem Corporation
    REBAC
    Rechargeable Battery Corporation
    RLA Power & Electronics Group
    Rockwell International
    Rocky Research
    REXXAR Corporation
    Riverside County Transportation Commission
    Rod Millen Special Vehicles
    Sacramento City College
    SAFT America--Advanced Technologies Division
    San Joaquin Valley Unified APCD
    Signal Processing Systems
    Swanson Electric Vehicle Enterprise
    Santa Barbara MTD
    SAO Paulo Group
    Scotland Group, The
    SEQUEL
    S-LEMNA, Inc.
    SOLO Energy Corporation
    South Coast Air Quality Management District
    Southern California Edison
    Southern California Gas Company
    SRI International
    Steve Duscha Advisories
    Stuart Energy USA
    Sturman Industries
    SunLine Transit Agency
    Taylor-Dunn
    Terranomics/Metrovation
    Toyota Motor Sales, USA
    Trinity Flywheel Power, Inc.
    Trojan Battery Company
    Thermo Technology Ventures, Inc.
    Thiokol Corporation
    TNO Road-Vehicles Research Institute
    Toucan Capital Corporation, LLC
    Traffic Assist
    TransCorp
    ULTRAMET
    Union of Concerned Scientists
    Unique Mobility, Inc.
    UCLA School of Engineering & Applied Sciences
    UC Institute of Transportation Studies--PATH
    University of California, Davis
    University of California, Riverside
    University of Colorado
    University of Idaho
    Union Motor Company
    US Flywheel Systems, Inc.
    Vairex Corporation
    Ventura County APCD
    Venture Management, Inc.
    VOLTEK, Inc.
    VoltAge, Inc.
    Waste Energy Integrated Systems, LLC
    Westport Innovations, Inc.
    Whittaker Controls, Inc.
    XCORP
    ZAP Power Systems
    Zebra Motors, Inc.
                               setc participants
    AC Propulsion
    Advanced Lead Acid Battery Consortium
    AeroVironment, Inc.
    AZ Bus Sales, Inc.
    Battery M.D., Inc.
    Bluebird Body Company
    Bus Manufacturing USA, Inc.
    California Energy Commission
    California EPA--Air Resources Board
    City of Chule Vista
    Concept Development Group
    Davis Electric Vehicle
    Desert Research Institute
    Electric Vehicle Infrastructure, Inc.
    Electrosource, Inc.
    Elk Grove Unified School District
    EXtend Computer and Instruments
    Fuel Cells for Transportation
    Gear Chain Inc.
    General Motors Advanced Technology Vehicles
    H Power Corporation
    Hawker Energy Products, Inc.
    Hydrogen Burner Technologies, Inc.
    Hexcel Structures
    Los Angeles Department of Water and Power
    Next Century Power
    North American Power Products
    Ovonic Battery Company
    ProEV
    Rio Linda School District
    Sacramento County--Division of Airports
    Sacramento Metropolitan Air Quality Management District
    Sacramento Municipal Utility District
    Santa Barbara Electric Transportation Institute
    South Coast Air Quality Management District
    Southwest Research Institute
    UC Davis Hybrid Electric Vehicle Center
    United Defense LP
    US Fuel Cell Council
    Yosemite National Park
                               hevdp participants
    Advanced Charger Technology, Inc.
    AeroVironment, Inc.
    Aloha State Tours and Transportation, Inc.
    Battery Automated Transportation, Inc.
    California Air Resources Board
    City and County of Honolulu
    Classic Trolleys, Inc.
    Compact Power, RLLP
    Department of Business, Economic Development & Tourism (State of
    Hawaii)
    Department of Transportation (State of Hawaii)
    Detection Limit Technology, Inc.
    E Noa Corporation
    Electric Island International, LLC.
    Electrosource, Inc.
    Florida Power and Light Company
    Hawaii Electric Light Company
    Hawaii Electric Vehicle, Inc.
    Hawaii Natural Energy Institute
    Hawaiian Electric Company, Inc.
    Hawker Energy Products
    High Energy Technology, Inc.
    High Power Research Laboratory
    High Technology Development Corporation
    Honolulu Public Transit Division
    Hyundai Motor Co.
    Kaman Electromagnetics Corporation
    Kauai Community College
    Kauai County
    Kauai Electric Division
    Kyung Won Battery Co.
    Maui Electric Company, Inc.
    Maxwell Technologies Energy Products, Inc.
    Motorized Manufacturing, Inc.
    Oahu Transit Services
    On-Line Power, Inc.
    Ovonic Battery Company, Inc.
    Pacific Marine & Supply Company, Inc.
    Pennsylvania State University
    Pinnacle Research Institute, Inc.
    PowerCell Corporation
    South Coast Air Quality Management District
    Taylor-Dunn, Inc.
    TransMotive Technologies, Inc.
    Trojan Battery Company
    U.S. Air Force, Hickam AFB
    U.S. Electricar, Inc.
    U.S. Navy, Pacific Missile Range Facility
    U.S. Navy, Pearl Harbor Naval Station
    University of Hawaii at Manoa
    Wyland Enterprises, Inc.
        In conclusion, this program helped jump start the zero-emission
    vehicle industry, but the reduction in funding has slowed the pace and
    allowed foreign competition to catch up with US Industry in development
    and deployment of advanced vehicle technology. Funding the AVP at the
    authorized level will allow US Industry to resume the leadership role
    in this rapidly expanding arena. We must maintain our competitive edge;
    we must improve the transportation sector's devastating effect on our
    environment; and we must eliminate our dependence on foreign oil.
        Thank you for this opportunity to provide testimony.
                                     ______

    Prepared Statement of Harry Harris, Chairman, I-95 Corridor Coalition,
        Executive Board Deputy Commissioner, Connecticut Department of
                         Transportation, Newington, CT

        Thank you for the opportunity to submit this written testimony to
    the record of the Subcommittee on Transportation and Related Agencies,
    Committee on Appropriations, U.S. Senate regarding fiscal year 2000
    U.S. Department of Transportation appropriations.
        On behalf of the I-95 Corridor Coalition, I also want to thank the
    Subcommittee for its continuing support of the Coalition and its
    programs.
                          the i-95 corridor coalition
        In 1993, pursuant to the Intermodal Surface Transportation
    Efficiency Act (ISTEA), the I-95 Northeast Corridor was named a
    Priority Corridor by the U.S. Department of Transportation.
    Subsequently, the I-95 Corridor Coalition was established to enhance
    mobility, safety, and efficiency across all modes and transportation
    facilities that serve the region. Last year the I-95 Northeast Corridor
    Program was reauthorized as part of the Transportation Equity Act for
    the 21st Century.
        The Coalition is a partnership of the major public and private
    transportation agencies serving the Northeast Corridor of the United
    States from Maine to Virginia. Built on the foundation of cooperation
    and coordination, the Coalition serves as a unifying force for the
    members in our common mission to use technology to provide seamless
    transportation services in our Corridor. The transportation services on
    which we focus include all modes and facilities of movement for people
    and goods.
                                   background
        With more than 50 million residents, the Northeast Corridor is the
    most heavily burdened transportation network in the United States. The
    region has 13 major airports, more than two dozen major rail stations,
    11 major seaports, and 30,000 miles of Interstate and primary highways.
    As these components become increasingly stressed, coordinated
    management and regional implementation of Intelligent Transportation
    Systems (ITS) across multi-jurisdictional lines become ever more
    important. The vision of a ``seamless'' transportation system in the
    Northeast is not an idle speculation; it is a necessity.
        The greatest obstacles to widespread realization of ITS' benefits
    are institutional barriers. Given this, regional collaboration is key
    to effective implementation.
        The Coalition, with its partnership of 27 transportation agencies,
    provides the formal opportunities for such collaboration. It does this
    to enhance ITS implementation and help create a seamless system by
    bringing its diverse members together to cooperatively address the
    transportation problems that affect the entire region. We strive to add
    value to the activities of our many member organizations by leveraging
    resources, sharing information, and coordinating programs.
                               recent activities
        In the year that has passed since we last presented testimony to
    this Subcommittee, the Coalition has experienced some exciting
    developments. We have:
      --seen dramatic results of our efforts to coordinate management of
            traffic incidents;
      --refocused our efforts on our primary areas of need--coordinated
            incident management, inter-regional multimodal traveler
            information and commercial vehicle operations; and,
      --worked to develop new programs in the areas of intermodal passenger
            and freight movement, electronic payment services, and
            improving member access to education and information.
      chester, pa tank truck explosion--an example of effective traveler
                      information and incident management
        Advanced technologies and increased interagency communications are
    the foundation of the I-95 Corridor Coalition's efforts. We have
    developed a shared information network that supports a regional
    intermodal traveler information and incident management system. The
    cooperative efforts of members mean ITS technologies deployed locally
    can be used to benefit agencies, and more importantly travelers, from
    Maine to Virginia.
        The Coalition's Traveler Information and Incident Management
    program was truly put to the test on Saturday, May 23, 1998 when a tank
    truck exploded into flames in the wake of an accident on southbound I-
    95 in Chester, PA. This incident created enormous challenges for the
    transportation officials involved. Local officials had to scramble to
    reroute thousands of vehicles while work started immediately to repair
    a portion of the elevated roadway. Severe structural damage resulted in
    the complete closing of the highway in both directions for more than a
    day while alternate routing plans were put into place.
        At the same time, this event presented a critical trial of our
    transportation management system and of the work the Coalition has done
    to enhance that system. We are proud to report to you that the system
    works and works well. Incident management activities kicked-in
    immediately through the I-95 Corridor Coalition's Information Exchange
    Network (IEN). Within minutes, TRANSCOM, an independent group of
    agencies in the New York City metropolitan area that provides
    communication services for the Coalition, flashed the news of the
    accident up and down the eastern seaboard using the 52 work stations
    that make up the IEN. Coalition members were immediately notified of
    the incident's location, estimated duration, and the impact on traffic.
    Every available Highway Advisory Radio (HAR) installation, Variable
    Message Sign (VMS) and Information Service Provider throughout the
    Corridor was utilized to take the burden off PennDOT and those
    traveling in the Northeast. This real-time information exchange
    contributed immensely to timely response throughout the entire region.
    For the better part of two months, while repairs were made, the
    Coalition's IEN system allowed transportation officials to reroute
    traffic and prevent more severe delays.
        The quick and effective reaction to the Chester incident provides
    one of the best possible examples of the return on investment to the
    public from Congress's wisdom in continuing funding for the I-95
    Corridor program. It is through this program that the inter-
    jurisdictional relationships have developed that allowed for our
    success in coping with the Chester incident and others. Continual
    improvement of our incident management and traveler information systems
    is a central focus of Coalition activities and is reflected in a number
    of projects throughout the Corridor. This is one of the most important
    means in which the Coalition serves to help its members help each other
    when ``things go wrong''.
                         commercial vehicle operations
        No region in the country is as dependent on truck traffic for
    freight movement as is the I-95 Corridor. The motor carrier industry
    plays a vital role in the economic life of our region. At the same
    time, ensuring truck safety is a primary concern of the Coalition's
    member agencies. For these reasons, the Coalition has placed renewed
    emphasis on improving both the safety and the efficiency of motor
    carriers operating in the Corridor. Through the Coalition's Commercial
    Vehicle Operations (CVO) program we are:
      --Implementing a system that will provide commercial vehicle
            dispatchers and drivers with information on congestion,
            incidents, weather and routing that is necessary to meet the
            demands of businesses and consumers for fast, timely and
            reliable delivery of goods and services.
      --Computerizing roadside communications, using automatic vehicle
            identification, mobile inspection cameras, and a national Motor
            Carrier Safety Program prototype that will help improve safety
            and streamline inspections.
      --Developing a partnership of transportation, registration, toll, law
            and motor carrier groups designed to help implement an array of
            practical products and services.
      --Creating a ``credentials administration'' initiative designed to
            reduce costs and red tape by streamlining the credential
            administration process.
                    intermodal transfer of people and goods
        As noted above, the Coalition has adopted a new focus on the
    intermodal transfer of people and goods. This issue was highlighted at
    an Intermodal Forum for Passenger and Freight Transportation sponsored
    by the Coalition last fall. The purpose of the Forum was to identify
    and examine intermodal transportation challenges in the Northeast, and
    begin to look at solutions. Following this event, the Coalition held
    the first meeting of its Intermodal Program Track Committee on January
    19, 1999. The Committee will advise the Coalition on how it can best
    work to facilitate safe and efficient intermodal traffic in the region.
                          electronic payment services
        The Coalition and its member-agencies are making significant
    strides toward our goal of achieving electronic toll compatibility
    throughout the Northeast. We believe that the next several months will
    bring us closer to enabling users to have one tag per vehicle, one
    account per customer, and one set of credentials per commercial vehicle
    to permit seamless travel through toll facilities.
                              travelers alert map
        One of the Coalition's most widely used services is the Travelers
    Alert Map. The map identifies major construction activity, upcoming
    events and typical holiday weekend bottlenecks. We have recently made
    major improvements in this service by providing greater detail in a
    more accessible and user-friendly format. The map is distributed to
    welcome centers, rest areas and truck stops along the Corridor, and is
    just one of the ways in which we help travelers get to where they need
    to go. The map is also available on the Coalition's web page at
    www.I95coalition.org.
         improving member access to education, information and training
        One of the key functions of the Coalition is to help members help
    each other in areas of education, information and training. The
    Coalition has initiated several programs intended to enhance this
    service.
      --Consortium for ITS Training and Education (CITE): The Coalition is
            partnering with the University of Maryland, the Federal Highway
            Administration, the Federal Transit Administration, ITS America
            and others in this effort to encourage and facilitate the
            creation of new ITS courseware using distance learning. CITE is
            focused on providing comprehensive ITS training and education
            to mid-career professionals who wish to enhance their knowledge
            and skills, and to graduate level engineering students pursuing
            a focus in ITS. The initial course, ``Introduction to ITS''
            will begin in the spring of 2000. The Coalition is assisting in
            identifying needs throughout the Corridor and development of
            course content; and will help make the course materials
            accessible to our members.
      --Information clearinghouse: The Coalition is developing a web-based
            clearinghouse designed to improve member access to the
            Coalition's own technical and policy resources as well as
            provide links to other sources.
      --Information Exchange Forums: Another initiative involves the use of
            Information Exchange Forums to provide an opportunity for
            senior and mid-level managers to share experiences and ``best
            practices'' in development of ITS services and programs.
        These efforts to improve member access to education, information
    and training are an important way in which the Coalition meets its
    central obligation to remove institutional barriers and facilitate
    regional collaboration.
                                   conclusion
        Support by this Subcommittee and Congress for the I-95 Corridor
    Program has been instrumental to our success. Continued support for
    fiscal year 2000 and beyond will allow us to build on this success, and
    continue the work outlined above, particularly in the areas of incident
    management, traveler information, commercial vehicle operations,
    intermodal transportation, electronic payment services, and education
    and training. In this way we will continue to provide the means for the
    regional cooperation and coordinated efforts needed to achieve an
    integrated and seamless transportation system.
        In closing, let me thank the Subcommittee again for its valued
    support.
                                     ______

      Prepared Statement of Kirk Brown, Secretary, Illinois Department of
                                 Transportation

        Mr. Chairman and Members of the Subcommittee, we appreciate the
    opportunity to submit testimony concerning fiscal year 2000 US DOT
    appropriations on behalf of the Illinois Department of Transportation
    (IDOT) to the Senate Appropriations Subcommittee on Transportation and
    Related Agencies. We thank Subcommittee Chairman Shelby and the members
    of the Subcommittee for their past support for a strong federal
    transportation program and for taking into consideration Illinois'
    unique needs. Our recommendations for overall funding priorities and
    our requests for transportation funding for projects of special
    interest to Illinois are described below.
                                highway funding
        IDOT urges the Subcommittee to set fiscal year 2000 obligation
    limitations for highway and highway safety programs that will allow
    full use of the anticipated Highway Trust Fund (HTF) revenues as per
    the Revenue Aligned Budget Authority (RABA) provision in the
    Transportation Equity Act for the 21st Century (TEA-21). As you are
    aware, TEA-21 set guaranteed obligation limitations for highway and
    highway safety programs based on estimated HTF revenues. The RABA
    provision automatically adjusts highway obligation limitations for
    fiscal years 2000-2003 according to estimates of HTF revenue. The new
    HTF estimates require an increase of $1.5 billion above the TEA-21
    guaranteed funding. The appropriations bill should honor this TEA-21
    adjustment. This additional funding should be fully utilized for
    greater highway and highway safety program spending.
        In addition, IDOT is requesting specific earmarks for six highway
    construction projects.
        The first of those earmarks is for the Stevenson Expressway
    reconstruction in Chicago. IDOT is seeking an earmark of $55 million in
    the fiscal year 2000 US DOT Appropriations bill to assist in financing
    the $567 million Stevenson Expressway reconstruction project. IDOT
    believes that this earmark is warranted because of the extraordinary
    cost of this project, because of the need to complete the project
    quickly and because the Stevenson Expressway is of national and
    international importance in the movement of people and freight. A
    special earmark of $55 million from general funds will aid in financing
    the work programmed for fiscal year 2000, the second year of major
    reconstruction.
        The second earmark request is for the Wacker Drive reconstruction.
    IDOT and the city of Chicago are seeking an earmark of $50 million in
    the fiscal year 2000 US DOT Appropriations bill to assist in financing
    the $310 million reconstruction of Wacker Drive, located in downtown
    Chicago. IDOT and the city believe that this earmark is warranted
    because of the extraordinary cost of the project and because Wacker
    Drive is critically important to the city's transportation system. A
    special earmark of $50 million from general funds will aid in financing
    the Wacker Drive reconstruction project and completing it more quickly.
        The other four earmarks which total $106 million are: $45 million
    for improvements to Illinois 64 in DuPage County; $22 million for
    improvements to Illinois 59 in Will County; $28 million to continue the
    extension of IL 336 and US 136 from Quincy to Macomb in western
    Illinois; and $11 million to assist in the completion of the Alton
    Bypass in the St. Louis Metro East area. This $106 million request from
    general funds will help fund these needed projects.
        IDOT is also requesting an earmark of $7.4 million in fiscal year
    2000 Intelligent Transportation Systems (ITS) Deployment funds for key
    projects in the Chicago metropolitan area, the St. Louis Metro East
    area and several other metropolitan areas. IDOT believes that this
    earmark is warranted because it will aid in implementing high priority
    projects that enhance the effectiveness and efficiency of the
    transportation system and improve mobility and safety for all highway
    users. The fiscal year 2000 earmark of ITS formula funding is
    especially important to IDOT because the department did not receive any
    ITS funding in either the fiscal year 1998 or fiscal year 1999 US DOT
    Appropriations bills.
                        transit major capital investment
    Bus Capital
        IDOT, the Regional Transportation Authority (which oversees the
    planning and financing of transit in the six-county northeastern
    Illinois area), the Chicago Transit Authority (CTA) and Pace (which
    operates suburban bus service) jointly request an earmark of $26.7
    million in fiscal year 2000 Section 5309 bus capital funds for
    Illinois. This joint request is a demonstration of our mutual interest
    in securing funding for essential bus capital needs throughout the
    state.
        The joint request is for funds for four downstate facilities and to
    purchase 116 buses in order to replace overage vehicles and to comply
    with federal mandates under the Americans with Disabilities Act. All of
    the vehicles scheduled for replacement are at or well beyond their
    design life. Illinois operators have a total of 628 such buses--CTA has
    263, Pace has 106, downstate urbanized areas have 194 and small urban
    and rural areas have 65. Illinois transit systems need discretionary
    bus capital funds since regular formula funding is inadequate to meet
    all bus capital needs.
    New Systems and Extensions--MetroLink
        IDOT supports the Bi-State Development Agency's (the bus and light
    rail service operating agency for the St. Louis region) request for an
    earmark of $50 million in fiscal year 2000 New Starts funding for the
    MetroLink light rail system which serves the St. Louis region. This
    amount is for ongoing construction of the eastward extension in St.
    Clair County, Illinois from East St. Louis to Belleville Area College.
    MetroLink service has been a tremendous success and ridership has far
    exceeded projections. The Administration entered into a Full Funding
    Grant Agreement for this extension in 1996 and construction began in
    1998.
        IDOT also supports an earmark of $32 million for funding the 8.6-
    mile MetroLink segment from Belleville Area College to the MidAmerica
    Airport. Bi-State Development Agency is seeking a revised Full Funding
    Grant Agreement from the FTA to incorporate the costs of this
    extension. Final design and construction of this extension is
    authorized in TEA-21.
    New Systems and Extensions--Metra Commuter Rail
        IDOT supports Metra's (the commuter rail operating agency serving
    the six-county northeastern Illinois region) request for an earmark of
    $75 million in fiscal year 2000 to continue New Starts funding for
    upgrading service on the North Central and SouthWest Lines and
    extending service on the SouthWest and Union Pacific-West Lines. These
    planned improvements are in areas where significant population and
    development increases have already been experienced and are projected
    to continue well into the 21st century. The projects will improve and
    extend commuter rail service which will in turn reduce highway
    congestion and contribute to attaining clean air objectives. TEA-21
    authorized final design and construction of these three projects.
    New Systems and Extensions--Chicago Transit Authority
        IDOT supports the Chicago Transit Authority's request for an
    earmark of $95 million for rehabilitation of the Douglas Branch of the
    Blue Line and upgrading of the Ravenswood Line. The $77 million
    requested for the Douglas Branch rehabilitation project will begin
    construction to completely rehabilitate or replace track, structure,
    and ancillary systems to restore this 6-mile branch of the Blue Line to
    an acceptable level of service and to ensure its viability for the next
    30 to 40 years. This rehabilitation is essential for preserving service
    on the line and reducing inordinately high maintenance expenses. The
    Douglas Branch serves an economically depressed area and provides
    transit service important to support welfare-to-work transportation
    needs. If the deterioration due to lack of adequate renewal funds is
    not addressed, the CTA will eventually be forced to close the branch.
    TEA-21 authorized $315 million for the Douglas Branch.
        The $18 million requested for the Ravenswood Line project would
    begin construction to extend station platforms to handle longer trains
    that are needed to serve the increasing demand along this line. The
    line's market area continues to redevelop and potential riders are
    being discouraged due to crowded conditions. Lengthening all platforms
    to handle longer 8-car trains, straightening tight S-curves which slow
    operations and selected yard improvements will increase capacity by 25
    to 30 percent. TEA-21 authorized final design and construction of the
    Ravenswood upgrade.
                             transit formula grants
        IDOT urges the Subcommittee to set appropriations for formula
    grants programs at least at the guaranteed levels set in TEA-21. IDOT
    also supports funding the transit programs beyond the TEA-21 guaranteed
    levels, but we advocate that general funds, not HTF revenue, be the
    source for the additional funding.
    Section 5307 Urbanized Area Funds
        The Section 5307 formula grants program for urbanized areas
    provides vital capital and operating assistance for public
    transportation. In Illinois, these formula funds are distributed to 18
    urbanized areas which provide approximately 560 million passenger trips
    a year. IDOT supports the continuation of operating assistance to the
    smaller urbanized areas under 200,000 population. Strong federal
    funding support for transit service in urbanized areas is necessary to
    enable transit to continue the vital role it plays in providing urban
    transportation service.
    Section 5311 Rural and Small Urban Formula Funds
        The Section 5311 program plays a vital role in meeting mobility
    needs in the nation's small cities and rural areas. Adequate federal
    funding assistance for this program is very important to transit
    systems in Illinois. The needs in these areas are growing yet their
    local revenue sources continue to be very limited. In Illinois, such
    systems operate in 45 counties and 7 small cities, carrying
    approximately 2.6 million passengers annually.
                        next generation high speed rail
        IDOT urges the Subcommittee to earmark $15 million in Next
    Generation High Speed Rail appropriations for a grade separation
    project to replace the at-grade Engelwood Interlocking near 63rd and
    State in Chicago. Two Metra tracks and three Norfolk Southern and
    Amtrak tracks cross at this high traffic grade crossing. Currently 131
    trains cross each day (68 Metra trains cross 18 Amtrak and 45 Norfolk
    trains). Metra controls the crossing so the Amtrak and Norfolk trains
    must stop for or wait for the Metra trains. This causes large
    cumulative delays for both Amtrak and freight trains and is a potential
    safety hazard, particularly since the Metra trains are fast-moving
    commuter trains. More than 30 additional daily trains are expected to
    be rerouted through this crossing due to a related St. Charles Airline
    project south of the Chicago downtown area. The track involved is part
    of the corridor identified for high speed rail service from Chicago to
    Detroit, and removing the repetitive delay caused by this crossing is
    needed to achieve future high speed service. The total cost of the
    overpass is estimated at around $35 million. IDOT supports an
    appropriation of the full $25 million authorized in TEA-21 for high
    speed rail technology improvements.
                              amtrak appropriation
        IDOT supports a fiscal year 2000 appropriation at least at the
    President's budget request of $571 million to support the nation's
    passenger rail system's capital improvements and equipment maintenance.
    IDOT also urges the Subcommittee to incorporate bill language similar
    to the President's proposal which allows capital funds to be used for
    the same range of purposes as transit capital funds.
        Amtrak operates 50 trains throughout Illinois as part of the
    nation's passenger rail system, serving approximately 3 million
    passengers annually. Of the total, Illinois subsidizes 18 state-
    sponsored trains which provide service in four corridors (Chicago to
    Milwaukee, Quincy, St. Louis, and Carbondale) transporting nearly
    652,000 passengers in fiscal year 1998. Amtrak service in key travel
    corridors is an important component of Illinois' multimodal
    transportation network, and continued federal capital and operating
    support is needed.
            airport improvement program (aip) obligation limitation
        IDOT supports an fiscal year 2000 Airport Improvement Program (AIP)
    obligation limitation as close as possible to the authorization level
    to be set in the reauthorization bill for aviation programs which will
    be developed by the House and Senate authorizing committees (the Senate
    version authorizes $2.47 billion, the House bill $5 billion).
        The AIP program provides federal funding support for airport
    preservation and improvements needed at general aviation and commercial
    airports--which served 630 million people flying on the nation's air
    carriers in 1997. Enplanements are expected to grow annually at 3.3 to
    3.7 percent to nearly 1 billion by 2009, and airports must make
    improvements to safely and efficiently serve this rapidly growing
    demand.
        Adequate AIP funding is especially important for general aviation,
    reliever, commercial service and small primary airports. Larger primary
    airports have been able to raise substantial amounts of funding with
    Passenger Facility Charges, but the smaller airports are very dependent
    on the federal AIP program.
        This concludes my testimony. I understand the difficulty you face
    trying to provide needed increases in transportation funding given
    spending constraints in the balanced budget agreement. However, an
    adequate and well-maintained transportation system is critical to the
    nation's economic prosperity and future growth. Your ongoing
    recognition of that and your support for the nation's transportation
    needs are much appreciated. Again, thank you for the opportunity to
    discuss Illinois' federal transportation funding concerns.
                                     ______

                   FEDERAL RAILROAD ADMINISTRATION AND AMTRAK

     Prepared Statement of Harriet Parcells, Executive Director, American
                            Passenger Rail Coalition

        Mr. Chairman and Members of the Subcommittee, my name is Harriet
    Parcells and I am the Executive Director of the American Passenger Rail
    Coalition (APRC), a national association of railroad equipment
    suppliers and rail-related businesses. Thank you for the opportunity to
    provide testimony on fiscal year 2000 appropriations for Amtrak and
    funding to advance high speed rail in key corridors of the nation. APRC
    members include companies that manufacture passenger rail cars and
    locomotives, rail engineering and planning firms, manufacturers of rail
    brakes and rail cable, companies that provide information and
    communications services and companies that build and repair railroad
    track. APRC member companies have manufacturing and service facilities
    in states and communities around the country and employ thousands of
    U.S. workers.
        Amtrak is an essential part of the country's transportation system,
    providing efficient and affordable transportation for millions of
    Americans. In fiscal year 1998, 21.1 million people rode Amtrak trains
    for intercity travel; another 54 million relied on Amtrak trains
    operated under contract to regional transit authorities to commute to
    and from work.
                    amtrak is moving in the right direction
        All indications are that Amtrak is moving in the right direction.
    Under the direction of the Amtrak Board of Directors and President and
    CEO George Warrington, Amtrak is taking strategic actions to reduce
    operating costs, improve the quality of service to its customers and
    generate increased revenues by entering into new partnerships and
    commercial business ventures. In October 1998, Amtrak's Board of
    Directors released a revised four-year Strategic Business Plan (SBP)
    that provides the vision and plan of action to guide Amtrak to improved
    financial health, increased nationwide ridership and improved service
    quality. The SBP identifies over $390 million in cost-cutting and
    revenue enhancing actions to be undertaken by Amtrak from fiscal year
    1998-fiscal year 2003. The investments and actions Amtrak has been
    taking are yielding positive results. Some key indicators of this
    success in fiscal year 1998 include:
      --Amtrak ridership increased by 4.5 percent--the largest ridership
            increase in a decade;
      --Amtrak passenger revenues surpassed $1 billion for the first time
            in the corporation's history;
      --Amtrak finished the fiscal year $4 million better than planned;
      --On-time performance improved and is at the highest level in 13
            years;
      --Employee injuries decreased by 14 percent;
        After reviewing these positive year-end results, Amtrak Board
    Chairman, Governor Tommy Thompson stated, ``Amtrak's record-breaking
    achievements are further proof that Amtrak has turned the corner to
    become a more commercially-oriented, customer-focused corporation--As
    outlined in our new Strategic Business Plan (SBP), we're on the path to
    creating a more modern and financially sound national rail system.''
                   fiscal year 2000 appropriations for amtrak
        President Clinton presented his fiscal year 2000 budget to Congress
    on February 1. The budget includes $571 million in capital funding for
    Amtrak. The $571 million for Amtrak is consistent with the President's
    budget request of last year, which set forth specific out-year capital
    funding commitments to Amtrak.
        Our association strongly supports $571 million in capital
    appropriations for Amtrak in fiscal year 2000 and urges the
    Subcommittee to fully fund the President's budget request. APRC also
    supports an expanded definition of capital, as provided in the
    President's budget request, that would provide Amtrak with the same
    definition of capital as applies to the nation's urban mass transit
    systems and other transportation modes. Amtrak has stated that full
    funding of the President's request and adoption of this definition of
    capital would allow Amtrak to achieve its Strategic Business Plan goals
    and stay on the path to operating self-sufficiency by the end of 2002.
        Guided by its Strategic Business Plan, Amtrak is making great
    strides in cutting costs, expanding revenues, increasing rail ridership
    and improving other key performance indicators. Strong capital
    investment by Congress in fiscal year 2000 is essential to keeping
    Amtrak on the path to improved economic health and success.
        The nation's investment in Amtrak is not merely the provision of
    capital to the railroad, but a source of economic activity that will
    filter throughout the nation's economy. The railroad equipment supply
    industry generates approximately $12-14 billion in annual sales and
    employs over 150,000 people. Products manufactured by APRC member
    companies and their subcontractors are produced in states and
    communities from New York to California. Utilizing the U.S. Commerce
    Department's analysis of economic multiples for the rail equipment
    industry, the $2.2 billion approved by Congress in 1997 for Amtrak
    strategic capital investments over the next several years will have a
    net economic impact of $3.3 billion. Investments to improve rail
    service and restore passenger rail stations are bringing new vitality
    and stimulating economic development in the downtowns of cities and
    communities nationwide.
    amtrak's new business partnerships are key to improved financial health
        Amtrak is entering into new business and commercial partnerships
    that are central to its plans to improve the economics of its long-
    distance trains and the corporation's overall financial health. After
    receiving the go-ahead from the Surface Transportation Board (STB) in
    May 1998, Amtrak's mail and express freight service is showing strong
    signs of growth. In fiscal year 1998, total revenues from Amtrak's mail
    and express business totaled $83 million, up 19 percent over fiscal
    year 1997. In the current fiscal year, Amtrak hopes to boost mail and
    express revenues to $107 million. While the bulk of the revenue comes
    from shipment of mail, revenue from express freight is showing strong
    growth. As it moves forward with its mail and express service, Amtrak
    is developing partnerships with freight railroads, such as shortline
    railroad Dallas, Garland & Northeastern (DGNO) in Texas and others.
        Amtrak is entering into other business partnerships to speed the
    corporation's financial improvement. On January 20, 1999, Amtrak
    announced five new business partnerships that are initially expected to
    generate more than $20 million in added revenue annually and $28
    million in long-term savings,with the potential for substantial future
    growth. Under a new partnership with Dobbs International Services, a
    leading transportation caterer, Amtrak expects to realize savings of
    $28 million. Dobbs International Services will take over operation of
    Amtrak's 11 food commissaries beginning in April which will not only
    improve Amtrak's finances but the quality of food service on trains
    nationwide. Other partnerships that Amtrak announced will expand
    Amtrak's mail and express services, with the U.S. Postal Service,
    United Parcel Service and other partners. Announcing the new ventures,
    Amtrak President George Warrington stated, ``These partnerships [also]
    demonstrate that there is a tremendous untapped value embedded in our
    national rail system that can be leveraged to accelerate Amtrak's
    financial turnaround.''
              ridership is increasing on amtrak trains nationwide
        Ridership is increasing on Amtrak trains nationwide. In heavily
    populated metropolitan corridors, travelers rely on Amtrak for
    efficient city center to city center intercity transportation and a
    relaxing alternative to congested highways and airports. Ridership on
    Amtrak's Metroliner trains between Washington D.C. and New York
    achieved a record level of 2.1 million riders in fiscal year 1998.
    Across the country, in the Pacific Northwest Rail Corridor between
    Portland, OR, Seattle, WA and Vancouver, BC, Amtrak ridership also
    reached an all-time high: 550,000 passengers in fiscal year 1998, up 13
    percent over fiscal year 1997. Ridership in the Pacific Northwest has
    increased 137 percent since 1993. And, in the Midwest, on corridor
    routes radiating out of Chicago, 1.6 million trips were taken in fiscal
    year 1998, up 4 percent over fiscal year 1997. Some routes showed
    substantially higher gains: Chicago-Milwaukee Hiawatha ridership was up
    12.5 percent; St. Louis-Kansas City ridership, up 14.5 percent and
    Chicago-Carbondale Illinois ridership, up 15.3 percent.
        For residents of smaller cities and rural areas, Amtrak is often
    the only convenient, affordable and all weather means of intercity
    travel. A recent article in the ``Toledo Blade'' (11/26/98), ``Iron
    road still acts as lifeline for many''-the first in a series of three
    articles on intercity rail travel-discussed the critical role that
    Amtrak's Empire Builder, which travels across the northern U.S. between
    Chicago and Seattle and Portland, plays in the lives of citizens and
    communities along its route.

              ``In places like Devil's Lake, Minot and Cut Bank, MT-cities
            that have little if any airline service and are hundreds of
            miles from population centers-the train continues to fill a
            vital transportation role--And officials say Amtrak's value to
            their communities extends beyond transporting local residents
            to distant destinations or bringing relatives home to visit.
            The train is also a development tool--``It's one more selling
            point for economic development. It's something we have that
            some much larger cities don't,'' stated Paul Tuss [director of
            a local non-profit economic development agency].''

        Underscoring the Empire Builder's value to communities along its
    route, the train carried 422,174 rail passengers in fiscal year 1998, a
    22 percent increase over the prior year. Ridership on other long-
    distance and corridor trains such as the Chicago-New Orleans Crescent
    (+8 percent), the New York-Miami Silver Palm (+17 percent), the
    Charlotte-Raleigh Piedmont (+10.5 percent) and other trains also
    exhibited strong gains in fiscal year 1998.
      states looking to improved intercity rail passenger service to help
                             assure future mobility
        In regions around the country, states are working together and with
    Amtrak and the U.S. Department of Transportation to develop plans and
    make investments to achieve higher rail speeds and improve the quality
    of service in key corridors. State studies have found that investments
    to improve intercity rail passenger service in key corridors are cost-
    effective investments compared to alternatives such expanded highway
    capacity. And, there is strong public support for investments to
    improve Amtrak service, as demonstrated through polls, letters to the
    editor and, most significantly, through growing ridership on Amtrak
    trains. Newspapers around the country have expressed support for these
    investments as well. Attachment 1 of our testimony presents excerpts
    from newspaper editorials over the past year in support of improvements
    that have taken place and/or are planned for Amtrak intercity passenger
    rail service.
        A new generation of high-speed rail service will begin operating
    along the Northeast Corridor, starting in November of this year, and
    yield substantial mobility and economic benefits for the entire
    Northeast and the nation. The introduction of Amtrak's new 150-mph high
    speed rail service between Washington D.C. and Boston is expected to
    attract over 2.6 million new riders annually to Amtrak and help relieve
    congestion at regional airports and on the highways. The new rail
    service will generate up to $180 million in net annual revenue for
    Amtrak by 20002 and is a pivotal part of Amtrak's strategy to improve
    its financial health. The high-speed rail service will create thousands
    of jobs and promote economic development throughout the region.
        In the Pacific Northwest, new European-style passive tilt trains
    began revenue service on January 11, 1999 along the 466-mile rail
    corridor extending from Eugene, OR to Portland to Seattle, WA to
    Vancouver, BC, bringing a new quality of intercity rail passenger
    service to this region of the country. The new trains were purchased by
    Washington State and by Amtrak and have met with enthusiastic public
    support. Rail ridership in the Pacific Northwest Rail Corridor reached
    a record level in 1998 and is expected to continue to grow.
        In the Midwest, nine state Departments of Transportation (WI, IL,
    MI, MN, MO, OH, IN, NB and IA), Amtrak and the FRA are developing a
    plan to improve Midwest intercity rail passenger service. The Midwest
    Regional Rail Initiative (MRRI) features more frequent rail service,
    utilizing new rail equipment operating at speeds up to 110 miles per
    hour (mph) on a 3,000 mile network. At a press conference in Chicago on
    January 28, Amtrak Board Chairman Governor Tommy Thompson announced
    Amtrak's commitment of $25 million to improve Midwest intercity rail
    passenger service and Secretary of Transportation Rodney Slater
    announced DOT funding to test rail equipment in the Midwest and
    announced an extension of the Midwest High Speed Rail service to
    Cincinnati.
        Other regions of the country are also moving ahead with plans for
    improved intercity rail passenger service. In September 1998, New York
    State and Amtrak reached agreement on a five-year $185 million rail
    improvement plan that includes track improvements, rebuilding of five
    Turboliner trains and other improvements. When all work is completed,
    trains will be able to travel at top speeds of 125 mph between New York
    City, Albany and Buffalo. The improvements come as rail ridership in
    New York is achieving record levels.
        On November 18, 1998, the Gulf Coast High Speed Rail Corridor was
    formally designated at a conference in New Orleans. The rail corridor
    extends from Florida along the Gulf Coast to New Orleans and Houston
    and north from New Orleans to Meridian, MS and Birmingham, AL. A rail
    connection to the New Orleans International Airport is part of the
    planning process. And, in the Southeast, the states of North Carolina,
    Virginia, South Carolina and Georgia are working together to greatly
    improve passenger rail service within and between their states and to
    connect to the Northeast Corridor in Washington D.C. At a conference on
    December 1, 1998 in Charlotte, two extensions to the Southeast High
    Speed Rail Corridor were announced by DOT Secretary Slater. The states
    of Vermont and California have committed substantial state funding to
    improve intercity rail passenger service and view rail as an integral
    part of their future. Oklahoma will see the start-up of Amtrak service
    this spring and Oklahoma, Kansas and Texas have formed a multi-state
    task force to examine rail improvements in their region.
        Improvements to intercity rail passenger service in these and other
    key corridors are an integral part of Amtrak's plans to attract a
    growing national ridership and a greater share of the intercity travel
    market.
               funding to advance high speed rail and rail safety
        In addition to $571 million for Amtrak in fiscal year 2000, APRC
    asks the Subcommittee to appropriate funding to advance high-speed rail
    in key corridors of the country and funding to promote rail safety
    through FRA's programs and Operation Lifesaver. The Transportation
    Equity Act for the 21st Century (TEA-21) authorized $10 million per
    year for high-speed rail corridor planning activities and $25 million
    per year for high-speed rail research and development (the Next
    Generation High Speed Rail Program). As mentioned in our testimony,
    states in the Midwest, Southeast, Pacific Northwest, Northeast and Gulf
    Coast are looking to increasing rail speeds and quality of service as a
    fundamental part of their strategies to assure future mobility and
    economic prosperity. They are working together on rail investments that
    will yield substantial benefits for their regions.
        Our examination of the President's budget request indicates that
    the Administration is requesting $12 million in General Fund
    appropriations for the Next Generation High-Speed Rail Program. An
    additional $35 million to advance high speed rail is requested in funds
    that would come from a portion of increased gas tax revenues above
    those assumed in the budget baseline. The Next Generation High Speed
    Rail Program provides valuable research and development work on
    positive train control, non-electric high-speed locomotives, highway-
    rail grade crossing hazard elimination and other R&D. We are
    disappointed in the reduced general fund appropriation requested by the
    Administration and that a significant portion of the funding requested
    for high-speed rail activities is expected to come from revenues on
    which agreement with Congress may or may not be reached. We ask the
    Subcommittee to provide strong funding for these activities to advance
    high-speed rail in key corridors.
        Funding for highway-railroad grade crossing hazard elimination
    programs serves to maximize the safety of the nation's passenger and
    freight rail systems and is crucial to the development of high-speed
    rail. Federal Railroad Administrator Jolene Molitoris has made railroad
    safety a top priority at FRA. Our association applauds Administrator
    Molitoris for her leadership in the area of rail safety. On March 25,
    the Surface Transportation and Merchant Marine Subcommittee of the
    Senate Commerce Committee, chaired by Senator Kay Bailey Hutchison,
    held a hearing on safety at highway-rail grade crossings. APRC commends
    Senator Hutchison for her long record of leadership on safety at
    highway-railroad grade crossings. We urge the Subcommittee to provide
    strong funding for highway-railroad grade crossing elimination programs
    in fiscal year 2000. Finally, APRC also strongly supports funding for
    Operation Lifesaver's work with states to educate the public on safety
    at highway-railroad grade crossings.
        APRC thanks the Transportation Appropriations Subcommittee for the
    strong support it has given to Amtrak, to programs to improve the
    safety of the nation's railroad system and to activities to advance
    high-speed rail in key corridors. Thank you for the opportunity to
    provide testimony on these important issues.
                                     ______

          Prepared Statement of Mayor Sharpe James, City of Newark, NJ

        Mr. Chairman and members of the Subcommittee, thank you for giving
    me the opportunity to submit testimony to you about projects under your
    jurisdiction which are critical to the people of Newark, New Jersey and
    the surrounding region. The support of this Committee has been critical
    in the past, and I wholeheartedly thank you for your aid to projects
    that have truly impacted on the people of Newark and our economy. Your
    help on a range of projects has enabled direct Interstate access to
    Newark's Emergency Medical/Trauma Care Center, our university campuses,
    and the emerging University Heights Science Park. Highway funding has
    improved access to the Newark Airport/Port Newark complex and our
    downtown business and arts district.
        Newark is truly at a crossroads: we are a City with all of the
    problems of many major urban centers, but we are also a City with vast
    potential. We have begun to turn the corner--there is a renewed
    vitality and sense of optimism in Newark. As the physical crossroads of
    the Northeast Corridor, the future economic viability of Newark is
    inextricably dependent upon the continued modernization and expansion
    of our intermodal transportation system. Improvements to our roadway
    network, our rail system, and our port and airport facilities will
    directly translate into jobs and economic prosperity for our City,
    State and Region. Newark's transportation project needs are critical to
    enabling us to maintain our position as a regional center for commerce,
    education, government and entertainment.
        Major downtown facilities have recently been completed or are under
    construction. The New Jersey Performing Arts Center, now in its second
    season, has been phenomenally successful. Our minor league baseball
    stadium--which will open this summer, and the Joseph G. Minish Passaic
    Riverfront Park and Historic Area--on which the Army Corps of Engineers
    will soon begin their construction phase, are exciting developments for
    our city. All of these activities are directly related to the proximity
    and effectiveness of our transportation network. The repopulation of
    older office buildings, and construction of new ones, is occurring in
    large part due to the ease of access for commuters. We are working to
    further capitalize on the existing transportation infrastructure by
    connecting these major facilities with a light rail line, the Newark
    Elizabeth Rail Link.
        The first segment of the Newark Elizabeth Rail Link (NERL) will
    soon be under construction, thanks to your previous support. It is a
    planned 8.8 mile, fifteen station light rail transit line linking
    downtown Newark with Newark International Airport and the City of
    Elizabeth. The first operable segment will link downtown Newark's two
    train and bus transportation nodes. It will be a 0.94 mile connection
    between the Broad Street Station, where trains from the western suburbs
    enter the City, and Newark Penn Station, on the Northeast corridor line
    and the central hub for New Jersey Transit trains and buses. There will
    be three new stations--Broad Street Station, Washington Park/
    Sportsplex, and NJ Performing Arts Center/Center Street--which connect
    sites mentioned above, as well as our renowned Newark Museum and Newark
    Public Library, that are crucial to Newark's economic and cultural
    growth. The line then will enter a tunnel portal where it will connect
    with the existing City Subway tunnel to access Penn Station.
        The NERL is an important and central component of our overall
    transportation plan. We are proud that just last month, a full funding
    agreement for this first leg of the Newark Elizabeth Rail Link was
    signed, and the Administration has included funding for it in its
    budget. I respectfully ask this Committee to add its support to this
    $12 Million allocation.
        An additional transportation issue has recently emerged which I
    would like to bring to your attention at this time. A central feature
    of Newark's downtown/riverfront area is the presence of AMTRAK
    facilities at Newark Penn Station. This station is the last northbound
    stop on the Northeast Corridor before New York City, and provides rail
    and bus linkages to the rest of New Jersey, and the region beyond. New
    Jersey Transit is doing an admirable job of renovating and modernizing
    the facility to accommodate increases in demand at the station, but the
    portion of the overall rail infrastructure that is owned and operated
    by AMTRAK is in great need of attention.
        The renovation and upgrading of AMTRAK property to better serve the
    City of Newark, its residents and visitors is a key factor in the
    City's economic development and transportation initiatives. This
    property is at each end of Penn Station, and improvements to it will be
    a worthy investment.
        The extension of the platforms at the southern end of Penn Station
    will enable passengers to exit the rail facility without having to exit
    through the station itself. This will enable the connection of a
    pedestrian walkway to a planned economic development project, the new
    downtown sports and entertainment complex. With this extension, an old
    abandoned railroad bridge and right of way will be transformed into a
    productive corridor, and help to revitalize the southern portion of
    Broad Street (Newark's main street), just as other transportation
    projects have facilitated the renaissance of the upper Broad Street
    area.
        The AMTRAK bridge over the Passaic River, on the northern end of
    Penn Station, is the most prominent feature of the Minish Riverfront
    project area. In fact, it dominates the skyline view of the City, and
    is recognized as an architectural symbol of Newark's rich industrial
    heritage. However, it is sorely in need of restoration and enhancement.
        Currently, lead paint is dropping from the bridge, adding to river
    contamination. Over the past few years, a great deal of progress has
    been made in cleaning the waters of the Passaic River, and the
    encapsulation or removal of the paint must be accomplished to eliminate
    this very real threat to public health. In addition, we have embarked
    on a program to light the bridges across the river, and would like to
    light the AMTRAK Bridge to highlight its significant structural
    elements. We would also respectfully request that the bridge be renamed
    in honor of retiring Senator Frank Lautenberg, who has been a strong
    advocate for transportation issues nationally, as well as for the City
    of Newark. The estimated cost for the platform extension and bridge
    restoration is $30 million.
        The assistance of this committee in funding these projects is
    vital. The Newark Elizabeth Rail Link and the AMTRAK facilities
    improvements are critical links in Newark's transportation network, and
    your support for them is crucial to our continued economic development.
    Your attention and consideration of the needs of Newark, New Jersey are
    deeply appreciated.
                                     ______

                             Letter From Bruce Beam

                              Consumers United for Rail Equity,
                                        Washington, DC, March 31, 1999.
    Hon. Richard Shelby,
    Chairman, Subcommittee on Transportation, Committee on Appropriations,
    U.S. Senate, Washington, DC.
        Dear Mr. Chairman: We are submitting this letter with the request
    that it be included in the hearing record of your March 4th hearing
    regarding appropriations to the Department of Transportation.
        Consumers United for Rail Equity (C.U.R.E.) is a coalition of
    captive rail customers, which are those customers that have no option
    other than shipping with a single rail carrier. Because captive rail
    customers do not have access to competitive rail transportation, we
    must rely on the protections embodied in federal law that are
    implemented by the Surface Transportation Board (STB). As we have in
    the past, C.U.R.E. continues to advocate full funding for the STB from
    appropriated funds. C.U.R.E. also supports a requirement that the Board
    charge only nominal fees for the filing of a complaint, protest, or
    other request for relief.
        Captive rail customers are concerned that if the STB does not have
    adequate funding, it may seek additional revenue through increased
    filing fees. Further cuts in STB funding will only increase the
    pressure on the STB to raise user fees--a scenario that is intolerable
    to captive rail customers.
        In fact, on February 3, 1999, the STB increased its filing fees
    separate and apart from the fiscal year 2000 user fee proposal.
    According to the STB's announcement, the fees were increased to offset
    the government wide salary increase and higher Federal Register
    publication costs. Under the STB's new fee structure, the fee for a
    formal complaint filed under the coal rate guidelines will increase
    from $27,000 to $54,500. For small rail customers, the fee for a formal
    rate complaint will increase from $2,600 to $5,400. Increasing user
    fees will deny captive rail customers access to the only forum in which
    they can seek rate relief.
        Rail customers already are hesitant to file formal complaints due
    to the extreme expense associated with such complaints, the amount of
    time it takes for the STB to issue a final decision, and the low
    probability of success. A GAO Report, released on March 2, 1999, finds
    that a rate case at the STB can cost between $500,000 and $3 million,
    requiring from two to 16 years to complete.
        Again, Mr. Chairman, we urge your Subcommittee to provide full
    funding for the STB from appropriated funds. We are disturbed that the
    President's Budget again this year requested zero funding for the STB.
    We hope that Congress will, as in past years, fully fund the Board.
    Thank you for your attention to this matter of importance to the many
    captive rail customers nationwide.
                Sincerely,
                                                    Bruce Beam,
                            Chairman, Consumers United for Rail Equity.
                                     ______

      Prepared Statement of Mark R. Dysart, President, High Speed Ground
                           Transportation Association

        I am pleased and honored to submit the testimony of the High Speed
    Ground Transportation Association on the Administration's fiscal year
    2000 proposed budget. HSGTA is an international membership organization
    comprised of Federal, State and Local governments and agencies, railway
    equipment manufacturers and suppliers, labor unions, engineering and
    construction firms and citizen activists. These organizations represent
    over 2.1 million working Americans.
        Auto and air congestion plague our daily lives. Gridlock is
    estimated to cost the United States economy some $40 billion each year
    in lost productivity. High-speed ground transportation offers a viable
    alternative that can greatly reduce congestion. High-speed ground
    transport would also decrease airborne pollutants, decrease our
    dependence on imported oil, increase productivity and increase
    mobility. This reality has been recognized by governments throughout
    the world where high-speed intercity passenger services are being
    inaugurated and expanded, in countries like France, Italy, Spain,
    Germany, Switzerland, Belgium, Australia, Taiwan, Japan, China, Korea,
    Russia, and Great Britain.
        The realization that high-speed intercity rail systems make sense
    as an alternative mode is not confined to the world outside our
    borders. States and regions throughout the Nation clamor for intercity
    surface transportation. The Intermodal Surface Transportation
    Efficiency Act of 1991 and its successor the Transportation Equity Act
    for the 21st Century both allowed promising high-speed rail corridors
    to be designated as suitable for Federal assistance. ISTEA designated
    five corridors. TEA-21 added six with three named in the legislation
    and three set to be selected by the Secretary of the Department of
    Transportation. These corridors now include the Northeast, Florida,
    Midwest, Northwest, Empire, Keystone, California, Gulf Coast, and
    Southeast. Together these encompass over half the states in our nation.
    Those with programs in place outside the Northeast Corridor include
    Virginia, North and South Carolina, Georgia, Florida, Mississippi,
    Alabama, Louisiana, Texas, Pennsylvania, New York, Ohio, Michigan,
    Indiana, Illinois, Minnesota, Wisconsin, Missouri, Nebraska, Iowa,
    Oregon, Washington and California.
        The High Speed Ground Transportation Association's recommendations
    encompass four specific areas:
    Highway-Railroad Grade Crossing Hazard Elimination Program
        There are 158,782 public at-grade crossings and 100,769 private at-
    grade crossings in the United States. Section 1103(c) of the TEA-21
    allows for the number of designated high-speed rail corridors to more
    than double. Current funding is woefully inadequate for grade crossing
    elimination which is both a cornerstone of rail safety and a critical
    component in the development of high-speed rail service. HSGTA urges
    the committee to increase funding for grade crossing hazard
    elimination. We propose the committee appropriate $20.25 for fiscal
    years 1999 and 2000 of which TEA-21 provides $5.25 million in contract
    authority and an authorization of $15 million for grade crossing hazard
    elimination.
        The unfortunate truck/rail accident in Illinois last month clearly
    illustrates the need to eliminate hazardous crossings. Freight and
    passenger rail employees and customers as well as the general public
    are increasingly at-risk as rail traffic increases and greater demands
    are placed on the current rail-highway infrastructure interface. To
    maximize limited funds the HSGTA recommends the Committee explore
    opportunities for better coordination of grade crossing activities
    between the Federal Railroad and Federal Highway Administrations.
    Maglev Deployment
        The HSGTA strongly supports funding the full $20 million for the
    Maglev Technology Deployment Program in fiscal year 2000 as authorized
    by TEA-21. This is an essential element of the long-term government
    effort to implement a full range of high-speed ground transportation
    alternatives in the United States.
        Section 1218 of TEA-21 provides a balanced and efficient program
    for states and localities to identify corridors that could implement
    this exciting new technology. The pre-construction planning activities
    that will begin this year will provide the technical and economic basis
    for Maglev deployment in the United States.
        The Federal Railroad Administration has received applications for
    Maglev projects from several states around the country, including
    Alabama, California, Florida, Georgia, Louisiana, Maryland, Nevada,
    Pennsylvania, Tennessee, Virginia. We urge the Committee to allow the
    Maglev Infrastructure Deployment Program to go forward as intended by
    Congress in TEA-21.
    Next Generation and Corridor Pre-construction Funds
        Congress authorized $25 million per year in TEA-21 for the Next
    Generation program (also known as the Swift Act) and $10 million per
    year for corridor planning. The HSGTA strongly urges the Committee to
    support full funding of the Next Generation planning program as
    intended by Congress. Further, we would take this opportunity to point
    out that Next Generation program planning funds authorized for fiscal
    year 1998 and fiscal year 1999 were not appropriated.
        TEA-21 directed the Department of Transportation to increase the
    number of designated high-speed rail corridors from 5 to 11. While the
    designations have been made, no funds are available to accomplish
    critically necessary pre-construction analyses. The HSGTA requests that
    this Committee support reinstatement of the $20 million not
    appropriated for fiscal year 1998 and 1999 in addition to fiscal year
    2000 authorization for $10 million in planning funds for a total of $30
    million. These funds are crucial to the success of corridor development
    in the United States.
    Amtrak
        The HSGTA supports funding Amtrak at the highest possible levels.
    We view Amtrak as the foundation from which future high-speed rail will
    be launched. Amtrak's introduction of new high-speed trainsets in the
    Northeast corridor will herald the beginning of a new era in passenger
    rail travel. The HSGTA supports Amtrak's request for $571 million and
    also recommends the Committee support a revision of the ``capital
    funds'' definition so that Amtrak has the flexibility to use a portion
    of these funds for maintenance of way and maintenance of equipment.
    Summary
        The High Speed Ground Transportation Association asks that this
    Sub-committee support the following:
      --$20.25 million each for fiscal years 1999 and 2000 for hazard
            elimination and grade crossing improvements for a total request
            of $40.5 million.
      --Full funding of the Maglev Technology Deployment Program at $20
            million for fiscal year 2000.
      --$25 million for fiscal year 2000 under the Next Generation Program
            and $30 million for fiscal year 2000 for pre-construction
            corridor activities.
      --$571 million for Amtrak plus revision of the definition of capital
            expenditures.
        Again, I thank the committee for allowing HSGTA to present the
    views of its 250 corporate and institutional members and their 2.1
    million working families. The High Speed Ground Transportation
    Association will be pleased to respond to any questions and offers the
    Committee the HSGTA's resources whenever needed.
                                     ______

     Prepared Statement of Phyllis M. Wilkins, Executive Director, Maglev
                                    Maryland

        Chairman Shelby and Members of the Committee, I respectfully submit
    testimony regarding the funding for the Maglev Deployment Program. For
    eight years, the efforts by City of Baltimore and the State of Maryland
    to be the first site for Maglev in America have been represented by
    Maglev Maryland. Baltimore Development Corporation is the economic
    development agency of Baltimore City. The city government of
    Washington, DC is now actively participating in this effort. As a board
    member of the High Speed Ground Transportation Association, I would
    like to echo the Association's testimony to strongly support full
    funding of the Maglev Technology Deployment Program in fiscal year
    2000. This program is an essential element of the long-term government
    effort to implement a full range of high speed ground transportation
    alternatives in the United States.
        Those interested in the development of truly high speed ground
    transportation applauded the excellent blue print for the deployment of
    Maglev laid out in Section 1218 of TEA 21. This section provides a
    balanced and efficient program for states and localities to identify
    corridors that could implement Maglev technology. The funds that were
    allocated for preconstruction planning activities will provide the
    technical and economic basis for Maglev deployment in the United
    States. The legislators responsible for Section 1218 provided
    sufficient funds to allow for the further study of already identified
    corridors that demonstrate commercial feasibility.
        I emphatically disagree with the Administration proposal to
    reallocate $20 million from the Maglev preconstruction activities to
    other purposes. The role of the Federal government in transportation
    has always been to provide the foundation for emerging modes.
        The National Highway System Bill directed the Secretary of
    Transportation to select an eight-person committee to study near term
    applications of Maglev. In 1997 the Maglev Study Advisory Committee
    (MSAC) was impaneled with the charge to make a recommendation to the
    Secretary of Transportation based on their findings. After studying the
    issue, the Maglev Study Advisory Committee strongly recommended to
    Secretary Slater that he support funding for a Maglev deployment
    program.
        In their research, the Committee found that every major mode has
    had significant support from the federal government. I would like to
    quote from their letter to Secretary Slater:
        ``Transportation in American has always been essentially
    privatized, much more so than in other nations of the world. Yet the
    national government has been the facilitator or builder of the
    infrastructure for every major mode:
      --``construction and maintenance of the inland waterways,
      --``eminent domain power and land grants for railroads, federal aid
            highway program (with federal shares of 75 percent, 80 percent
            and finally, for the Interstate program, 90 percent),
      --``airport improvement program and provision of the airways created
            by the air traffic control system.
        ``Though these programs have each supported a different mode, and
    though they are different in many respects, they bear several important
    similarities. In each instance:
      --``The federal program was a response to transportation needs unmet
            by existing transportation modes.
      --``The federal program catalyzed--in fact, was the sine qua non
            for--development of a new mode.
      --``The new mode, in addition to improving the nation's
            transportation system, was itself a source of major economic
            development and job creation.
      --``The federal program was designed to allow for substantial private
            participation, generally private operation of the means of
            conveyance.
        ``Over and over again, the combination of federal leadership and
    private sector energy and creativity has produced efficient and
    technologically advanced transportation systems. That superior level of
    transportation has been a critical underpinning of the vigorous
    American economy.''
        The Maglev Study Advisory Committee hit upon several key items this
    Appropriations Committee should particularly note: (1) all other modes
    have received federal support; and (2) the federal government has
    always taken it as a responsibility to step in when transportation
    needs are not met by existing modes.
        Despite the huge investment in roads, rail and air transportation,
    congestion nationally is at an all time high and increasing. Looking at
    only at highway congestion, the cost is $74 billion annually in lost
    time. Add to that the cost of six billion gallons of fuel wasted. The
    Maglev Study Advisory Committee advised Secretary Slater it is time for
    the introduction of a new transportation mode. Only a truly intermodal
    system that includes Maglev can deal with the congestion problem. The
    introduction of Maglev must be accompanied with the same type of
    federal investment accorded all the other modes.
        To ignore the Committee's recommendation raises serious questions.
    Can our country afford not to invest in Maglev? Can we afford to
    continue the drain on our resources caused by congestion? Can we afford
    to lose the billions of gallons of gas each year from cars stuck in
    traffic while we are increasing the amount of oil imported? Can we
    afford to become excessively dependent on foreign fuel?
        Many states like Maryland are looking seriously at issues caused by
    sprawl. Sprawl is creating livability issues that are now forcing local
    governments to rethink how the local transportation budget is
    allocated. Can the federal government afford to ignore the
    environmental and fiscal cost attributed to sprawl?
        Maryland has many reasons for supporting the development of a
    regional Maglev system. One is the reduction of traffic congestion and
    air pollution. The entire Northeast corridor is faced with a great
    challenge in meeting air quality standards. With the population density
    in this area, it is mandatory that a new, safe, efficient, very fast
    system be implemented. That system, however, must also help to reduce
    pollution and improve air quality by removing autos from the road.
        Released in 1994, the ``Baltimore-Washington Corridor Magnetic
    Levitation Feasibility Study'' predicted 9,000 cars would be removed
    from the daily traffic flow. It is anticipated that with Maglev
    preconstruction planning funds, we will be able to perform a more
    thorough analysis of the economic and societal benefits of a Maglev
    serving the Baltimore to Washington, DC market.
        Maglev Maryland represents just one project among a field of
    projects competing for the preconstruction planning funds in the Maglev
    Deployment Program. In response to the call for proposals, the Federal
    Railroad Administration received applications from Maryland,
    Pennsylvania, Nevada, California, Florida, Alabama, Louisiana, Georgia,
    Virginia, and Colorado. The specific proposals came from:
      --Maryland DOT for 40-mile system linking Baltimore to Washington, DC
      --Port Authority of Allegheny County for 45-mile line linking
            Pittsburgh Airport with the City of Pittsburgh and eastern
            suburbs
      --California-Nevada Super Speed Train Commission for 42 mile system
            that would eventually span 269 miles to link Las Vegas to
            Anaheim
      --Southern California Association of Governments for 70 to 75-mile
            system connecting Los Angeles International Airport to March
            Air Force Base
      --Florida DOT for 20 mile route connecting Port Canaveral to the
            Space Coast Regional Airport in Titusville
      --City of Birmingham, Alabama for 160 mile corridor between
            Birmingham and Atlanta, Georgia
      --University of Alabama, Huntsville for initial state of Huntsville
            and Decatur
      --Atlanta Regional Commission for 40 mile portion of the 110 mile I-
            75 corridor between Atlanta and Chattanooga
      --Commonwealth of Virginia for a system connection Hampton Roads and
            Richmond
      --Colorado Intermountain Fixed Guideway Authority for initial stage
            of 160 mile system between Denver Airport and Eagle County
            Regional Airport along I-70 corridor
        Across the country there is a growing number of regions that have
    seen the potential for Maglev as a transportation mode that can reduce
    congestion, pollution and dependence on foreign oil. At the same time,
    Maglev can be a great tool for economic development and job creation.
        It should also be noted that proposed Maglev projects have taken
    very seriously the notion of a public/private partnership. Speaking
    only for the Maryland project, it represents a significant local
    investment. Maryland received federal funds for the initial feasibility
    study through ISTEA that were matched locally. Since then, other
    studies have been funded entirely with local funds. Today, the local
    public and private investment in the Maryland project is over 12 times
    the federal investment and totals millions of dollars. One-half of the
    total comes from private sources. It is not only the promise of
    improved transportation, but also the economic development potential of
    Maglev that has spurred private support for Maglev projects.
        Now is not the time to short circuit this program. Two federal
    studies have recommended our country proceed with Maglev. TEA 21
    provides an excellent framework for the Maglev Deployment Program. Very
    shortly, the Federal Railroad Administration will announce the projects
    selected for further funding. To assess the true costs and benefits
    associated with the Maglev projects, we must have the full funding
    outlined in Section 1218. It is not possible for either the federal or
    local government to make an informed decision without the next level of
    study. More precise analysis of specific projects is the only way to
    provide everyone with the information necessary to make important
    transportation investment decisions. I urge you to preserve the $20
    million included in the Maglev Deployment Plan for fiscal year 200.
                                     ______

       Prepared Statement of Ross B. Capon, Executive Director, National
                       Association of Railroad Passengers

         amtrak and high speed rail appropriations for fiscal year 2000
        Thank you for the opportunity to file this statement. Our non-
    partisan Association-whose members are individuals-has worked since
    1967 towards development of a modern rail passenger network in the U.S.
                                    summary
        We support the $571 million request President Clinton has submitted
    for the Amtrak account. This is consistent with Amtrak's business plan
    and is what Administrator Molitoris promised in testimony a year ago.
        We support full funding of high speed rail authorizations,
    including a total of $44 million authorized for fiscal year 1998 and
    1999 but never appropriated.
        We support giving states the right to use their flexible gasoline-
    tax funds for intercity passenger rail, consistent with the Senate-
    passed versions of both ISTEA (1991) and TEA-21 (1998), and with what
    Vermont alone was given last year (omnibus bill).
        Usage of Amtrak trains is growing for the third straight year and
    revenues for the fourth straight year.
    1. The ``Consensus'' Amtrak Budget Request: $571 Million
        This is $38 million (6 percent) below the current level. We
    appreciate that Congress, responding to the Administration's premature
    declaration of an end to operating grants, gave Amtrak the flexibility
    to spend its ``capital'' appropriation on maintenance of equipment. We
    join with the Administration in supporting Amtrak's request that this
    flexibility be extended to maintenance of way and continued for
    maintenance of equipment, both at least through fiscal year 2002,
    consistent with the allowed use of Federal Transit Administration
    capital funds.
    2. Developing Air-competitive High Speed Corridors
        Nationwide corridor investments improve the economics of Amtrak
    trains using these corridors, and help Amtrak improve its bottom line.
    These improvements increase the abilities of the affected services to:
      --expand transportation capacity where parallel road and air
            facilities are at or approaching capacity;
      --give travelers an attractive way to avoid congested road and air
            facilities;
      --realize ``synergistic'' benefits by feeding passengers to local
            transit;
      --help revitalize urban downtown areas around stations; and
      --provide environmental benefits.
        Corridor work also benefits long-distance trains by giving them
    better connections (and by speeding up those long-distance trains that
    use corridor tracks). Last but by no means least, much corridor work
    improves safety at railroad/highway grade crossings, in some cases by
    eliminating the crossing. This improves safety and reliability for
    trains (including commuter and freight trains) and for motor vehicles.
    Indeed, as the table on page three shows, TEA-21 authorized $15 million
    a year in ``non-guaranteed'' funds for hazard elimination work on
    designated high-speed corridors, now including Mobile-New Orleans-
    Houston and Birmingham-Meridian-New Orleans. The recent Illinois
    tragedy underlines the importance of fully funding the hazard
    elimination appropriation.
        Amtrak Funds.--Amtrak has earmarked a significant portion of its
    Taxpayer Relief Act (TRA) capital funds to upgrade air-competitive
    corridors. Some examples of funds already committed outside the
    Northeast Corridor are shown below.
        On January 28, 1999, Amtrak announced a $25 million commitment to
    projects aimed at improving speeds and facilities for Midwest corridor
    trains, including:
      --$5 million for a demonstration next year of ``modern, premium
            trains and technology,'' involving equipment capable of 110
            mph.
      --$5 million towards the ``Grand Crossing'' connection on Chicago's
            south side that would significantly improve running-times on
            links both to Indianapolis-Cincinnati and Champaign-Carbondale-
            Memphis-Jackson-New Orleans. [Chicago-Cincinnati and Chicago-
            Carbondale both are part of the Midwest Regional Rail
            Initiative; also, Secretary Slater has designated the former as
            a high speed corridor.]
      --$2 million towards the St. Louis intermodal terminal, which also
            will serve the successful light rail line. We eagerly await the
            Amtrak ridership increase that should result from replacement
            of the isolated, 20+ year-old ``temporary'' Amtrak station.
      --$2 million towards returning Amtrak to the impressive Kansas City
            Union Station from today's low-profile facility that Amtrak
            President Tom Downs said made Amtrak the proverbial ``troll
            under the bridge.''
      --$1.5 million for Chicago-Detroit preliminary design and
            engineering.
      --$1 million towards modernizing the Milwaukee station, which the
            January 15 Milwaukee Journal Sentinel termed ``shabby'' and
            ``outdated.''
        Earlier, on February 18, 1998, Amtrak announced an order for eight
    new San Diegan train-sets of five cars each. This $100-million order is
    the largest-ever investment by Amtrak in California. The cars will be
    financed, but Amtrak is avoiding interest costs during construction by
    temporarily using TRA funds.
        Federal ``High speed rail'' funds.--Continued federal high speed
    rail funding will be vital if we are to fully realize the benefits of
    Amtrak's investments in new rolling stock, stations and connections.
    There are substantial needs for improving tracks, signals and grade-
    crossings to permit increased track speeds.
        The high-speed program has--or should have--three parts (see also
    table below):
        (1) Planning is authorized at $10 million a year fiscal year 1998-
    2001. We favor $30 million for fiscal year 2000 ($10 million each
    authorized for fiscal year 1998, 1999 and 2000).
        (2) Hazard elimination, which TEA-21 authorizes at $15 million a
    year fiscal year 1999-2001. We support $30 million for fiscal year
    2000, including $15 million authorized for fiscal year 1999. [This is
    in addition to $5.25 million a year in ``guaranteed'' trust fund
    dollars.]
        (3) Next Generation (technology improvements) are authorized at $25
    million a year fiscal year 1998-2001. We support $34 million for fiscal
    year 2000, including a total of $9 million authorized for fiscal 1998
    and 1999.
        The result: total request for fiscal year 2000 of $94 million in
    appropriated funds ($44 million in prior-year authorizations as yet not
    appropriated).

                                HIGH SPEED PROGRAM--CURRENT, CLINTON BUDGET, OUR REQUEST
                                              [In millions of dollars] \1\
    ----------------------------------------------------------------------------------------------------------------
                                                                                Fiscal year
                                                                     --------------------------------  NARP request
                                                                        1999 Actual    2000 Clinton
    ----------------------------------------------------------------------------------------------------------------
    Planning........................................................          [zero]          [zero]          30.000
    Hazard-Elimination..............................................          [zero]   15.000 (RABA)          30.000
    ``Guaranteed'' Hazard-Elimination...............................           5.250           5.250           5.250
    Next Generation.................................................          24.000  32.000 (20.000          34.000
                                                                                               RABA)
                                                                     -----------------------------------------------
          Total.....................................................          29.250          52.250          99.250
    ----------------------------------------------------------------------------------------------------------------
    \1\ See also page 4: first paragraph, and note after table.]

        In general, federal funding encourages states to invest in highways
    and aviation and discourages rail investments. Federal passenger-rail
    planning money keyed to state matches might be particularly effective
    in correcting this problem.
        We would strongly support any request you receive for funding [not
    at Amtrak's expense] to continue work on the North Station-South
    Station Rail Link in Boston. This link is needed to dramatically
    improve the efficiency and usefulness of the local commuter-rail
    network, the planned Boston-New Hampshire-Maine Amtrak service and all
    Amtrak service to Boston including the forthcoming high-speed
    trainsets.
    3. ``Excess'' Gasoline Tax Revenues, a.k.a. ``Revenue-Aligned Budget
            Authority'' (RABA), and the Aviation Investment Reform Act for
            the 21st Century (AIR-21)
        We strongly support the Administration's proposal to devote a
    significant proportion of RABA to rail projects, transit and the
    Congestion Mitigation/Air Quality Program. Except for $12 million in
    ``Next Generation'' work, the Administration's entire high-speed rail
    request is RABA. We think this is good policy, but we know it is
    controversial in Congress, even though the hazard-elimination program
    certainly benefits highways. We also strongly oppose the sharp cut in
    general funds going to intercity passenger rail (table below).

             GENERAL FUNDS FOR PASSENGER RAIL: CURRENT AND PROPOSED
                            [In millions of dollars]
    ------------------------------------------------------------------------
                                                              Clinton fiscal
                                                Fiscal 1999      year 2000
                                                                  budget
    ------------------------------------------------------------------------
    Amtrak..................................         609.000         571.000
    High Speed Rail.........................          24.000          12.000
                                             -------------------------------
          Total.............................         633.000         583.000
    ------------------------------------------------------------------------
    Note: [This is an 8 percent ($50 million) reduction from 1999 to 2000.
      In both tables, we show the Fiscal 1999 high speed level as $24
      million, the number shown in the Administration's budget. This number
      actually includes related FRA salaries and $3 million for the Alaska
      Railroad. The technically correct number thus is lower: $20.494
      million.]

        Particularly in the face of escalating federal investments in
    highways and aviation, and the DOT Inspector General's analysis of
    Amtrak's capital needs, we think there is strong public support for the
    investment levels we are requesting. Our belief also rests on public
    opinion polls commissioned by NARP and others which we have cited in
    previous years' testimony and which were taken when rail travel seemed
    to be in less favor than it is now.
        We appreciate Chairman Shelby's initiative in educating colleagues
    and the public on the budgetary impact of AIR-21, both at the
    subcommittee's Amtrak hearing and in amendment #225 to the Senate
    Budget Resolution. This amendment notes that AIR-21 would result in
    firewalled transportation spending (aviation, highways, transit)
    exceeding total function 400 spending called for in the Senate's
    resolution.
        AIR-21 contemplates increasing airport improvement funding from $2
    billion to $5 billion a year and tripling air traffic control funding
    (to $3 billion a year). Outside the trust fund, AIR-21 contemplates
    continuation of the practice of funding 30 percent of the air traffic
    control system from general revenues. We do not believe AIR-21 serves
    the cause of balanced transportation. We consistently have argued
    against mode-specific trust funds, which work to insure that
    investments continue primarily in the already-dominant modes, and
    inhibit implementation of any analysis showing that rail could do a job
    more efficiently.
    4. Flexibility for Intercity Passenger Rail
        Arguably the most serious flaw in TEA-21 was Congress's failure
    once again to include intercity passenger rail as an eligible use for
    flexible gasoline-tax funds (for any state except Vermont!), even
    though the Senate voted for and the Administration endorsed this
    flexibility last year. On February 23, the National Governors
    Association approved a policy statement endorsing flexibility. We
    appreciate this subcommittee's support of flexibility. We urge Congress
    to fix this serious flaw in U.S. transportation law.
    5. Amtrak in the Marketplace
        Travel (passenger-miles) on Amtrak was up 2 percent in Fiscal 1997,
    3 percent in Fiscal 1998 and 3 percent in the first five months of
    Fiscal 1999. (A passenger-mile is one passenger carried one mile.)
    Passenger revenues have risen more sharply and for a longer time: up 3
    percent in Fiscal 1996; up 7 percent in fiscal year 1997; up 4 percent
    in fiscal year 1998; and up 8 percent in the first five months of
    Fiscal 1999. [These statistics reflect only the intercity business, not
    Amtrak's contract commuter operations.]
        There is an interaction between travel volume and revenues.
    Consistent with Congressional and Administration pressure to achieve
    ``operating self-sufficiency'' by the end of Fiscal 2002, sharp fare
    increases in 1995 and 1996 helped the bottom-line but priced some
    potential riders out of the market.
        In the Amtrak travel declines of fiscal year 1994-96, the passenger
    did not abandon Amtrak, Amtrak abandoned the passenger-by reacting to
    the Administration and Congressional mandate. Some services were
    withdrawn and others made more confusing, and fares increased sharply.
    The fact that these problems are--for now-behind us helps explain
    recent, positive trends. Growth would be even more impressive if there
    were expansion-minded capital investments not limited by the quest for
    operating self-sufficiency.
        Thank you for an excellent Amtrak hearing, and for the opportunity
    to submit these comments.
                                     ______

                         FEDERAL TRANSIT ADMINISTRATION

      Prepared Statement of William W. Millar, President, American Public
                              Transit Association

                                  introduction
        The American Public Transit Association (APTA) appreciates the
    opportunity to testify on the fiscal year (FY) 2000 Transportation
    Appropriations bill. On behalf of our 1,200 member organizations we
    commend the Transportation and Related Agencies Subcommittee for its
    outstanding work on the fiscal year 1999 Transportation Appropriations
    bill, which increased the federal transit program to $5.4 billion, $25
    million more than the level ``guaranteed'' for transit in fiscal year
    1999 under the Transportation Equity Act for the 21st Century (TEA 21).
        Growing investment in our surface transportation infrastructure is
    critical to the economic well being of the nation as we move into the
    21st Century. This principle was affirmed last year with the strong
    bipartisan support for TEA 21, which calls for significant increases in
    transit and highway spending. TEA 21 authorizes $6.8 billion for
    transit in fiscal year 2000 and specifies that the program be funded at
    no less than $5.8 billion in that year.
        APTA urges the Subcommittee in its fiscal year 2000 Transportation
    Appropriations Act to fund the federal transit program at the $6.8
    billion level authorized in TEA 21. We strongly support the
    Administration's proposal to provide an additional $291 million in
    transit funding above the $5.8 billion guaranteed in TEA 21, but
    suggest that it be done within the existing TEA 21 budgetary framework.
        An assured level of federal funding is critical to the transit
    program. It enables transit agencies to develop realistic multi-year
    capital programs, it fosters innovative financing for major
    construction projects, and it helps to maintain equity between highway
    and transit funding. In addition, the budgetary provision supports
    distribution of transit funding in a way that maintains balance between
    the formula and discretionary components of the program.
                         investment is being put to use
        Across America transit systems are using the additional funding
    provided in last year's appropriations bill productively. Transit
    properties are wisely performing asset management and maintenance work
    on existing capital facilities. Older cities are reinvesting in aging
    bus stations and rail systems, making them safer and more efficient.
    Agencies are also investing in new transit projects, bus and bus
    facilities, and intelligent transportation systems. Projects under
    construction include 166 miles of bus fixed guideways, 106 miles of
    commuter rail, 63 miles of light rail, 43 miles of heavy rail, 8 miles
    for trolley bus service and 9 miles of automated guideway transit. All
    of this activity is happening in an environment that involves strong
    state and local support.
                across the nation transit is making a difference
    Transit Ridership at Record Levels
        The increased investment in transit is reaping significant returns
    and helping transit make a difference in the lives of people across the
    nation. The additional funding is helping to fuel increases in transit
    ridership. Some 8.6 billion passengers used public transit services in
    1997, a 7.7 percent increase over the preceding year. Preliminary
    figures for 1998 show transit ridership up again--an additional 4
    percent to 8.9 billion riders, the highest in the history of the
    federal transit program.
        Ridership increases were led by bus systems serving populations
    less than 50,000--up 8.5 percent; light rail--up 5.4 percent; and bus
    systems serving areas with more than 2 million people and demand
    response services--up 4.8 percent. Commuter rail ridership grew by 4.0
    percent, and heavy rail showed an increase of 4.5 percent.
        This growth in ridership occurred throughout the country. In
    Houston, transit ridership is up 9 percent and this is largely due to
    the addition of new park and ride lots in suburban Houston. In Kansas
    City, transit ridership is growing for the first time in 15 years. By
    taking advantage of the flexibility and additional funding provided in
    TEA 21 and the fiscal year 1999 transportation funding bill, the Kansas
    City Area Transit Authority was able to add 12 new routes and create
    two new innovative demand responsive services. These services have
    produced ridership increases of 3,000 to 4,000 daily. In San Diego,
    ridership is up 13 percent. In the New York City region, ridership is
    up 9 percent and in Minneapolis transit ridership is up 6 percent.
    These new riders are evidence that the public wants a transit option
    and appreciates the federal investment in more and better transit
    service.
    Transit is Helping to Relieve Traffic Congestion
        Transit is also making a difference by helping to relieve traffic
    congestion and reduce accidents. According to the 1997 Dollars and
    Cents report, 5 million more cars would be on the nation's roads
    without transit; 200,000 more auto fatalities, injuries, and accidents
    would occur annually; and Americans would spend another 365 million
    hours every year sitting in traffic, at a cost to them and the economy
    of $19 billion.
    Transit is Moving People to Jobs
        The additional investment also helps to move thousands of people
    from welfare to work. The nation's public transit systems already
    provide access to jobs for millions of commuters. Transit providers are
    now responding with innovative ways to provide job access for welfare
    recipients, including special reverse commute and suburb-to-suburb bus
    and van services to match center city residents with suburban jobs.
    Nationally, 3 million people have moved off welfare and into productive
    jobs, and transit played a big role in that regard since over 90
    percent of welfare recipients who must move into the workforce do not
    own cars and must rely on public transit to get to work.
      --In Hartford, Connecticut, The Greater Hartford Transit District has
            added several supplemental transit services to provide former
            welfare recipients with access to jobs. These services include
            new bus routes, additional late evening and early morning bus
            service, vans for small groups and guaranteed rides home in
            emergencies.
      --In South Carolina, the Pee Dee Regional Transportation Authority
            has begun operating very long distance trips to an employment
            area in another county. The bus trips are offered at unusual
            times so that workers can arrive and depart at times that fit
            the schedule of entry-level service jobs. The transit system
            estimates that the return on every public dollar invested in
            their long-distance to work-travel service is 20 to 1.
        In Lafayette, Indiana the Greater Lafayette Public Transportation
    Corporation provides work-related transportation services for welfare
    clients between any points in their county. The bus comes directly to
    the travelers' homes and will take them to any employment site in the
    country.
    Transit and Economic Development
        Transit is a $27 billion-a-year industry that employs more than
    300,000 people. The additional investment is also helping to create
    jobs and spur economic development. Transit investment is a significant
    source of job creation. According to a soon to be released Cambridge
    Systematics Inc. report, 316 to 570 jobs are created for each $10
    million invested in transit. Transit also attracts and focuses new
    development by providing needed capacity in congested corridors,
    enhancing property values and providing access to labor markets for
    both central city and suburban employers.
    Transit is Making a Difference in Rural America
        Not only is transit helping in metropolitan areas, but it is also
    making a difference in small towns and rural communities. A 1997
    Transportation Research Board Report found that investment in transit
    creates significant benefits in rural areas. According to the 1997
    study, a $375 million investment in rural transit by federal, state and
    local government produced national annual economic benefits equal to
    $1.26 billion--a three-to-one benefit cost ratio. The greatest benefits
    generated by transit in rural areas are transportation to employment
    and services that enable rural community residents to live
    independently.
                           more investment is needed
        While last year's funding increase was very helpful, transit users
    from across the country would reap the benefits of additional transit
    investment through improved and augmented services. Increased demand
    for transit is reflected in increased ridership numbers and the growing
    demand for transit services generally. Nationwide, transit investment
    needs far exceed the $6.8 billion authorized for fiscal year 2000 by
    TEA 21. The Department of Transportation finds that $14 billion needs
    to be invested each year just to maintain and improve transit
    conditions and performance.\1\ A recent APTA survey indicates needs
    equal to $15 billion annually over a ten-year period, including:
    ---------------------------------------------------------------------------
        \1\ 1997 Status of the Nation's Surface Transportation System:
    Condition and Performance; U.S. DOT.
    ---------------------------------------------------------------------------
      --$38 billion for new vehicles, including 67,800 buses and 51,400
            vans;
      --$25 billion for new bus facilities including parking lots for bus
            passengers;
      --$13 billion to modernize bus facilities and equipment;
      --$23 billion to modernize and rehabilitate existing fixed guideway
            rail and bus facilities, stations, and maintenance facilities;
      --$46 billion for additional fixed guideway services that respond to
            new customer demands; and
      --$5 billion to rehabilitate more than 14,900 buses, rail cars, and
            other vehicles to extend their useful lives.
                 infrastructure needs in response to congestion
        We cannot afford simply to maintain existing systems because we
    cannot afford to lose ground to traffic congestion. Congestion is
    exacting an enormous toll on the U.S. economy. Recent Texas
    Transportation Institute research indicates that we lose $74 billion
    each year in lost productivity due to traffic congestion.
        Look at any metropolitan region around the nation and it is clear
    that we can no longer build our way out of congestion. Investment in
    critical transit infrastructure needed not just to build new systems,
    but also to complete planned networks.
      --Right here in our own backyard, the Washington region loses $3.6
            billion annually due to congestion. Plans are in place to
            expand Metro bus service along the Dulles corridor to link the
            Dulles Airport with Washington Metro. Such express bus service
            is badly needed because the Dulles corridor is choking in
            congestion. We also note that there are plans to extend
            Metrorail service to Tysons Corner. However these solutions
            will not come cheap and they are only two examples of the
            strong demand for additional transit services in the Washington
            region.
      --In Atlanta, the new Governor, Roy Barnes has drawn up plans to put
            in place a regional transportation authority. The metropolitan
            area is out of compliance with air quality standards and cannot
            build any more roads. In order to tackle air quality and
            congestion problems Governor Barnes has pledged to extend bus
            and rail services to Atlanta's northern suburbs. Needless to
            say, additional local, state and federal funding will be needed
            in order to help Atlanta get out of its traffic tangle.
      --In Salt Lake City, Utah, officials are working to finish
            preparations for the 2002 Winter Olympic games. Yet these
            preparations would be incomplete without transit. Salt Lake
            officials know that transit goes hand in hand with successful
            sporting events. They are working to complete the North-South
            line that will open next year and plans are in place to build
            an East-West extension that would connect the airport, downtown
            Salt Lake City, and the University of Utah before the games
            begin.
      --In San Diego, California, there is a pressing need to extend the
            trolley to serve neighborhoods east of San Diego, a major
            medical center and San Diego State University. The extension
            would link these communities to rail service going east and
            west.
    Funds are Needed for ADA Compliance
        Additional funding is also needed to help meet compliance with the
    Americans with Disabilities Act (ADA). Although transit agencies met
    the January 27, 1997 compliance deadline to make paratransit service
    comparable to fixed-route service, their ADA compliance capital and
    operating costs are as much as $1.4 billion annually for the next
    several years. Transit systems need increased formula capital funding
    to meet paratransit mandates, meet growing service demands, and
    continue their effort to make vehicles, transit stations and facilities
    meet federally mandated standards.
    Access to Jobs
        Funding is also needed to help transit agencies provide access to
    jobs. While our customers rely on many services, the fact of the matter
    is that most former welfare recipients depend on public transit to get
    to jobs. The task is not easy because many potential jobs are located
    in areas or during times not easily served by public transit.
        In October 1998, APTA released a Welfare to Work Survey Summary
    Report that found the addition of new transit services is very
    important to the success of welfare to work programs. Frequently
    described new services include: new routes to employment locations
    outside the existing service area; more direct service to reduce very
    long trip times where current service is indirect; service later at
    night and earlier in the morning to meet extended hours of entry-level
    service jobs; increased service in the opposite direction of existing
    peak service; and shuttles from rail stations and the ends of bus
    routes to dispersed employment locations.
        However, the survey noted that the biggest difficulty for most
    systems in implementing these services is funding. The systems have
    proposals that would greatly improve welfare-to-work transportation
    services but cannot implement them until funding is available.
        apta supports funding program components consistent with tea 21
        APTA supports funding the respective components of the federal
    transit program consistent with the authorization levels of TEA 21.
    Program funding levels specified in TEA 21 maintain an appropriate
    balance between bus and rail, rail construction and modernization, and
    urban and rural transit needs. We also support funding of the Federal
    Transit Administration's administrative needs and funding for all of
    the research components of the federal transit program including the
    Transit Cooperative Research Program (TCRP).
        Through the TCRP program modest federal investments are leveraging
    significant contributions from the private sector and paying big
    dividends to the transit industry. For example, in a research project
    on electric rail vehicles, the federal investment serves as seed money
    for involvement by transit professionals and organizations to
    cooperatively develop vehicle system and subsystem standards. Over the
    18-month life of the project, direct contributions by transit industry
    participants will total over $1.5 million--a leverage of $7.60 for
    every federal dollar. The standards will benefit taxpayers by lowering
    the cost for transit rail cars and replacement parts, and reducing
    inventory requirements. The research team has estimated that these
    improvements will produce a $119 million benefit from the $232 thousand
    federal investment made in the research.
                         the administration's proposal
        APTA applauds the President's fiscal year 2000 budget proposal to
    increase federal transit funding by 14 percent to $6.1 billion in
    fiscal year 2000. The proposed increase in transit funding is an
    important step forward in fulfilling the promise of TEA 21 and is
    recognition of the contribution that transit makes to improving the
    social and economic quality of life in communities throughout the
    country.
        While we support the increase in funding, we urge that this be
    accomplished within the existing budgetary framework. APTA does not
    support revisiting TEA 21 to change the structure of the transit and
    highway funding guarantees. We believe that room should be found within
    the discretionary budget category to fully fund the Administration's
    request.
    Lease Transactions
        The Administration budget contains a proposal that would have the
    effect of prohibiting public transit agencies from entering into so-
    called lease/leaseback or ``Pickle'' lease transactions. The U.S.
    Treasury Department has also issued a ruling that would prohibit such
    transactions. These transactions typically involve the lease and
    leaseback, or sale and leaseback, of assets belonging to transit
    agencies, which are tax-exempt public bodies that cannot otherwise
    benefit from depreciation on their capital assets (i.e., vehicles or
    facilities). The Federal Transit Administration (ETA) reviews such
    transactions to ensure that they are tax positive over the life of the
    lease, and further requires that the transit system retain effective
    control of the leased asset. These transactions have been used by
    almost all major transit agencies around the nation to raise revenues
    that supplement federal, state, and local funding for much needed
    transit capital investments.
        We are concerned that the Administration's action could have a
    negative impact on transit operations nationwide by precluding the use
    of an innovative funding technique that has been used frequently in
    recent years. We believe that the proposal would, at a minimum, prevent
    investors from taking any tax deductions in connection with transit
    assets until the end of the lease term, which would effectively
    eliminate the benefit to the investor. It is important to note that
    transit transactions represent only a small portion of all such lease
    transactions; in our view, their benefits well exceed their costs.
    Therefore, we ask the Subcommittee to reject any proposal that would
    limit a transit system's ability to enter into such lease transactions.
                                   conclusion
        APTA appreciates the opportunity to testify on the development of
    the fiscal year 2000 Transportation Appropriations Act. We urge the
    Subcommittee to fund the federal program at the $6.8 billion level
    authorized by TEA 21 and no less than the $6.1 billion requested by the
    Administration.
                                     ______

     Prepared Statement of Scott Lansing, Executive Director, Chatham Area
                          Transit (CAT), Savannah, GA

        Mr. Chairman and Members of the Subcommittee, I am pleased to
    submit this statement for the fiscal year 2000 outside witness hearing
    record on behalf of Chatham Area Transit. This brief statement
    identifies CAT's specific funding needs for fiscal year 2000.
        CAT is committed to quality service: We have restructured fares and
    routes that have resulted in increased ridership; we are serving the
    needs of the disabled community; and we have maintained a fleet of
    aging buses beyond their designed service life.
        For fiscal year 2000, CAT respectfully requests $8 million for
    urgent system needs.
                  completion of the downtown transfer facility
        CAT is most appreciative to this Subcommittee for Federal funding
    provided in the fiscal year 1999 Transportation Appropriations Act. The
    funds you provided will assist CAT in moving along substantially in the
    development and construction of Savannah's Downtown Transfer Facility.
    The project is underway, but we lack the final portion for completion.
    CAT requests an appropriation of $1 million to complete this facility.
    This facility will assist CAT's public transportation responsibilities
    in a number of ways important to Savannah. The transfer facility will
    aid the commuting public, assist in our substantial tourist
    transportation needs, and encourage economic recovery and development
    in our downtown urban area.
                                bus replacement
        CAT operates 63 vehicles. Almost 50 percent of these will have
    reached their useful life by fiscal year 2000. Although ridership is
    increasing, we do not seek funding for vehicle expansion. However, we
    need to replace vehicles that have mileage that exceed their designed
    service life. These vehicles are becoming too expensive to repair and
    maintain. CAT is unable to purchase the new vehicles. As maintenance
    costs escalate, we will be unable to maintain service routes essential
    to CAT's riding customers. (2) CAT's needs are for at least 33 new
    buses, but we believe we can phase in the replacement through careful
    marshaling of resources and the conscientious maintenance of our
    existing fleet. None of the 33 buses that need replacement are ADA
    compliant. Therefore, CAT is requesting $7 million for bus replacement,
    which will allow us to purchase 20 new buses with fiscal year 2000
    funds. All of the replacement buses will meet ADA accessibility
    standards and criteria.
        CAT appreciates your careful consideration of this relatively
    modest funding proposal.
        Thank you again, Mr. Chairman, for this opportunity to present the
    case for CAT's request of $8 million for Bus and Bus Related Facilities
    for fiscal year 2000.
                                     ______

      Prepared Statement of Mayor George Pettygrove, City of Fairfield, CA

        Thank you, Mr. Chairman, and members of the committee for this
    opportunity to speak before you today in support of the City of
    Fairfield's transportation projects. Fairfield appreciates the support
    this committee has provided in past years, and we look forward to
    working with you in the future to ensure safe and efficient
    transportation systems and infrastructure in our City and our region.
        First, the City requests an earmark of $1.2 million in the Bus and
    Bus Facilities funding category for purposes of purchasing of four
    fixed route buses. Fairfield/Suisun Transit operates bus services
    throughout Solano County, California, and provides connections to the
    Bay Area Rapid Transit (BART) system. Over the last five years
    ridership has increased more than 20 percent due in part to the
    tremendous and sustained population growth in the county. Funding
    constraints prevent Fairfield/Suisun Transit from obtaining a
    sufficient number of new buses to increase the fleet size and meet this
    demand. Buses are overcrowded during peak usage and potential users are
    not accommodated, thus missing an opportunity to decrease traffic on
    the heavily congested I-80 corridor. Federal bus acquisition funding
    would allow Fairfield/Suisun to obtain four additional buses to provide
    fixed route service and help alleviate strain on the overburdened
    system. Additionally, new buses would help mitigate the negative
    impacts of breakdowns due in large part to the age of the existing
    fleet.
        Second, the City of Fairfield requests a $750,000 earmark in the
    fiscal year 2000 Transportation Appropriations bill (Intelligent
    Transportation Systems) to fund the acquisition of an Emergency Vehicle
    Preemption System (EVP). The City of Fairfield's increase in population
    also is reflected in the significant increase in emergency calls placed
    to police, fire, and other emergency response entities. For example,
    medical calls alone increased over 58 percent from 1993 to 1998. Signal
    preemption is a technology that can recognize an approaching fire or
    other safety vehicle, and change the signal to ``green.'' This insures
    emergency vehicles always have priority, allows cars blocking the
    intersection to be cleared safely using the same green light direction,
    and makes all other directions go to a ``red'' signal. Because a
    typical call will require the safety vehicle to go through several
    signals, total travel time will be reduced significantly. This project
    would equip at least 50 of Fairfield's 56 signals, and would equip all
    of the City's safety vehicles with the signal preemption technology.
        Third, Fairfield requests an earmark of $5.1 to fund safety
    improvements to Air Base Parkway in Fairfield. Air Base Parkway is part
    of the National Highway System (NHS) network. Air Base Parkway is a
    high volume (42,000 Average Daily Traffic) arterial, and the primary
    connection between Travis Air Force Base and I-80. It also has the
    highest accident rate in the City of Fairfield. This rate (3.3
    accidents/million vehicle miles) is more than double the State average
    (1.27 accidents/million miles), and over the past three years more than
    5 persons have been killed and another 16 sustained serious injuries
    from vehicle accidents. The accident rate and severity of the accidents
    can be reduced by installing a number of safety related automobile,
    pedestrian, and bike traffic controls, improving the street lighting,
    and redesigning the intersections including acceleration and
    deceleration lanes. Federal funding will be used to these ends.
        Fourth, the City requests an earmark of $3 million to improve
    access for disabled citizens as mandated by the Americans with
    Disabilities Act. Since 1990 when the Americans with Disabilities Act
    (ADA) was enacted into law by Congress, Fairfield has struggled to
    implement its requirements. This struggle is due in part to the heavy
    strain on the City's transportation budget in light of the recent and
    dramatic increase in the county's population. Many of the ADA
    requirements are related to providing basic access to public facilities
    and services, including sidewalk and handicapped ramp improvements for
    wheelchair users. Although Fairfield has a goal of 100 percent
    accessibility for all wheelchair and mobility impaired persons, and has
    an on-going program for improvements, many of the more than 1,500
    intersections and their approaches remain incomplete. These
    inadequacies represent significant barriers to the wheelchair user and
    often force disabled citizens to travel in the street and in traffic.
    Federal funding at the requested level would speed compliance work
    significantly and likely allow the City to complete its work in five
    years.
        Finally, the City requests an earmark of $3 million to fund
    critical links in the City's Linear Park Pedestrian/Bike Path Project.
    Over the past several years Fairfield has been developing an extensive
    network of bike lanes and bike paths. The ``backbone'' of this system
    is the Linear Park Pedestrian/Bike Path. The project is located along
    an abandoned railroad right-of-way that extends the entire east/west
    width of the City. The planned western terminus is the Red Top Park-
    and-Ride Lot at the junction of I-80 and Red Top Road, and the eastern
    terminus at the Fairfield/Vacaville train station. Located at the
    midpoint is the main transfer point for Fairfield/Suisun Transit (FST).
    The requested funds would provide improvements needed for critical
    links between North Texas Street and Pennsylvania Avenue. In addition,
    because FST's main transfer point will be located on N. Texas Street at
    the east end of this project, pedestrians and bicyclists will have
    direct access to all bus routes.
        Mr. Chairman, the City of Fairfield appreciates your assistance on
    these projects. As you know, our city is one of the fastest growing
    communities in California. Fairfield's population continues to grow
    rapidly, and we continue to attract major corporate and industrial
    development. Fairfield faces new and difficult challenges in the areas
    of transportation and other infrastructure and flood control associated
    with this rapid growth. Your assistance is greatly appreciated on all
    of these projects. Thank you.
                                     ______

          Prepared Statement of Mayor Steve Miklos, City of Folsom, CA

        Mr. Chairman and distinguished members of the committee, my name is
    Steve Miklos and I am Mayor of the City of Folsom, California. I
    appreciate the opportunity to speak today regarding the City of
    Folsom's request for an earmark in the fiscal year 2000 Transportation
    Appropriations Bill in the amount of $5.5 million to complete funding
    for the Railroad Block Project.
        Last year, the Transportation Appropriations legislation earmarked
    $1 million for the Folsom Railroad Block Project. This earmark brought
    the total federal funding level for the project to $2.5 million. The
    Folsom Railroad Block Project is a multi-use, transmodal hub, vital to
    the rapidly increasing public transportation needs of the City of
    Folsom. The two block area project links commuter rail, tourist rail,
    local inter-city and tourist bus, pedestrian, and bicycle movements via
    a central plaza featuring an historic interpretive site and the non-
    profit Folsom Children's Museum. The project provides a critical link
    to the region's light rail system and will serve as eastern terminus
    for Sacramento's light rail system on the Highway 50 corridor. The
    project encompasses the best components of community planning by
    linking together multiple forms of transportation with a high profile
    commercial, retail, and tourist center.
        The project area consists of a two city-block area in the Historic
    District of Folsom consisting of approximately 6.7 acres. Several
    points included in the Railroad Block, including the Folsom Depot, the
    turntable site, and several pieces of rolling stock on-site are listed
    on the National Register of Historic Places for site and structure
    status. This project is part of the City of Folsom's broad planning
    process to help relieve local and regional transportation pressures
    from existing infrastructure and is designed to work in tandem with
    other infrastructure improvements. Additional infrastructure
    improvements include the new American River Bridge currently under
    construction with non-Federal funds, as well as the proposed Highway
    50/Folsom Boulevard Project and the Light Rail Extension Project, both
    of which are currently under consideration as part of the ISTEA
    reauthorization process.
        Mr. Chairman, on behalf of the City of Folsom, I thank you for the
    opportunity to testify regarding the City of Folsom Railroad Block
    Project. Our community and our region continue to appreciate the
    assistance your committee has provided in the past, and we hope the
    committee will view favorably our request to complete the funding for
    the project.
                                     ______

      Prepared Statements of Mayor Paula Delaney, City of Gainesville, FL

        The Depot Avenue Project includes the reconstruction of
    approximately two (2) miles of Depot Avenue from SR 331 to US 441. The
    project includes the construction of two travel lanes, turn lanes,
    curbs, sidewalks and landscaped medians. Depot Avenue is located
    adjacent to the existing Depot Avenue Rail-Trail, which is an 8 ft.
    wide asphalt trail. It alternately connects residential areas,
    commercial areas, and industrial land uses along its length. The
    redesign of the road will address these varying conditions and also the
    involvement of the neighborhood residents it serves.
        Depot Avenue traverses Gainesville from west to east, approximately
    2 mile south of, and parallel to, SR 26 (University Avenue). Its
    western terminus is at the eastern edge of the campus of the University
    of Florida and its associated student housing development, and its
    eastern terminus is at SR 331 in Southeast Gainesville. It skirts the
    southern edge of downtown Gainesville at its mid-point, and its
    intersection with SR 329 (Main Street) is considered to be the southern
    ``gateway'' to Downtown.
        The Depot Avenue project provides linkages to the Depot Avenue
    Rail-Trail that links with the Waldo Road Rail-Trail, the proposed
    Downtown Connector Rail-Trail that links with the Gainesville Hawthorne
    Rail-Trail, and the proposed 6th Street Rail-Trail. It provides access
    to the Gainesville Regional Transit System (RTS) Transportation Center
    as well as the proposed Depot Avenue Stormwater Restoration Park, which
    is in the planning stages as the centerpiece of a US EPA and Florida
    DEP-funded Brownfields pilot project.
        The City of Gainesville's RTS Transportation Center is located on
    the north side of Depot Avenue directly south of the core of Downtown
    Gainesville. The Transportation Center is a multi-modal transportation
    hub for the Regional Transit System, Greyhound, Amtrak and the Bicycle
    Commuter Facility. On the south side of Depot Avenue across from the
    RTS Center is the Old Gainesville Depot, which has been recently
    acquired by the City for restoration. The Old Gainesville Depot was
    built in 1907, and was placed on the National Register of Historic
    Places in 1996. The City of Gainesville was founded as a rail hub
    linking Fernandina Beach on the east coast of Florida to Cedar Key on
    the west coast in the mid-1800's and uses a train symbol as its
    official seal. The restoration of this building in conjunction with the
    restoration of the 22-acre Depot Park is expected to provide a major
    community destination and regional ``eco-tourism'' attraction for the
    community.
        The City's proposed 22-acre Stormwater Wetlands Restoration Park
    will serve as the stormwater management facility for the Depot Avenue
    Project as well as the Central City District portion of the watershed
    that is located upstream of the facility. The Old Gainesville Depot
    will be located within the park area and will provide for activities
    associated with redevelopment in the Depot Area, the Depot Park, the
    rail-trail system, and the RTS Transportation Center. The enhancement
    of Depot Avenue will encourage increased utilization of mass transit,
    bicycle and pedestrian modes of travel and increase accessibility to a
    major public heritage and recreation destination for the community.
        The enhancement of Depot Avenue will also provide infrastructure
    and improved access from downtown and the University of Florida area to
    the Porters Community, just west of SR 329 (South Main Street) and
    Southeast Gainesville. The Porters Community lies within Census Tract
    2, which extends north of University Avenue, and Southeast Gainesville
    lies within Census Tract 7. Census Tract 2 is approximately 37.7
    percent African American and Census Tract 7 is approximately 75.6
    percent African American (Census, 1990). Approximately 35.1 percent of
    all families in Census Tract 2 are in poverty and approximately 31.6
    percent of all families in Census Tract 7 are in poverty (Census,
    1990). The socio-economic conditions of these areas include high crime
    rates, sub-standard housing, and lack of services and investment. The
    enhancement of Depot Avenue provides the potential for increasing
    access to the higher employment areas of Gainesville, including
    downtown and the University of Florida, improving physical
    infrastructure, including drainage improvements, lighting and
    streetscaping, and providing bicycle and pedestrian facilities that
    connect both east and west Gainesville to Downtown.
        Along with the improvement of South Main Street, the Depot Avenue
    Project will provide for beautification, and encourage redevelopment
    and infill in the urban core of Gainesville and its adjacent areas.
    This enhancement will provide a region-based incentive for reducing
    sprawl development in the Gainesville Metropolitan Area by providing an
    alternative east-west corridor to SR 26 that allows for maximum use of
    alternative transportation. As a consequence, this project will
    increase mobility while minimizing pollution and congestion associated
    with the use of single occupant vehicles.
        The City's Electric Utility is in the process of designing a
    repowering plan for the historic Kelly Power Plant located adjacent to
    the Transportation Center, Depot Historic Structure and the Stormwater
    Wetlands Restoration Park. The planning firm of Dover, Kohl and
    Partners has recently completed a community-planning process held in
    conjunction with the repowering project. This community-planning
    process included the entire Depot Avenue area adjacent to Downtown. The
    City encourages citizen participation in the community-planning process
    and actively provides opportunities for participation in the planning
    of public infrastructure such as the Depot Avenue Project.
        The Depot Avenue Project will include property and right-of-way
    acquisition, design and construction activities at a cost of
    approximately $18.8 million. The Stormwater Wetlands Restoration Park
    includes property acquisition, design, remediation and construction
    activities at a cost of approximately $10.0 million.
        The consideration of this Subcommittee is greatly appreciated. The
    City of Gainesville looks forward to working with you further on this
    vital economic development initiative.
                      ems critical care initiative project
        Mr. Chairman: On behalf of the City of Gainesville, Florida, I
    appreciate the opportunity to present this written testimony to you
    today. The City of Gainesville is seeking federal funds in the fiscal
    year 2000 Transportation and Related Agencies Appropriations bill for
    an advanced body-worn computer system for the field paramedic to use in
    patient care, decision-support, communications and record keeping. The
    impact for the entire region is considerable, since this county serves
    as the regional center for much of rural north Florida's medical care,
    disaster management, and criminal justice services. The estimated cost
    of the system is $1,000,000, to be spread out over the three years it
    will take to complete the project.
        The provision of emergency medical services has been highly
    developed over the past two decades through research and assistance
    from the federal government. Through these developments there are many
    advanced life support systems in place, which are staffed with
    paramedics. The paramedics operate at the front line of every type of
    emergency in which people are at risk. These include vehicle accidents,
    fires, chemical hazards, explosions, and terrorist events, up to and
    including weapons of mass destruction (WMD). The complexity of
    knowledge required of paramedics to perform effectively in this wide
    variety of circumstances continues to rise exponentially. Yet,
    throughout the federal government there are tools being developed which
    have immediate application to overcome the complexity facing the modern
    emergency medical system. What is needed is an integration of hardware,
    information technology, decision-support programming and advanced
    communications technology to support the paramedic in this wide variety
    of lifesaving interventions. Although there are various components of
    this project in development for other purposes, there is no known
    research that would provide a similar system with national application
    to emergency field services. There will be applications of this system
    for a number of national priorities, including anti-terrorist
    operations, trauma treatment, and enhanced rural medical care.
        Paramedics in the field normally operate under direction of
    physicians at the emergency department. Caring for critical patients
    requires attempting to communicate a true picture of events to the
    physician. The paramedic must currently rely on a remote physician who
    is receiving limited information, to make an appropriate diagnosis and
    provide the correct treatment protocol. Yet, within the literature of
    emergency medicine there are hundreds of algorithms, akin to artificial
    intelligence, designed to correctly diagnose when complete information
    is provided in a specific sequence. These heuristic decision-support
    algorithms are complex and interact with each other. Computers are the
    only effective means to integrate the many complexities these
    interactions produce.
        Computers could be used with great success in the field except for
    two primary shortcomings:
        First of these is that the paramedic literally has his or her hands
    full with providing emergency care. (S)he cannot stop administering
    lifesaving care to enter data into a computer with a conventional
    keyboard, nor is the physician who is contacted by radio likely to
    either ask the questions in proper sequence or use the computer systems
    to furnish proper instructions. Handling hardware demands of a computer
    in this environment; outside, in all weather conditions, with poor
    lighting and dynamic events occurring, simply adds too much complexity
    to using this vital tool. Fortunately there have been recent
    developments in wearable computers. These are lightweight modules
    designed to fit in a belt-worn pack, which are then connected to a
    headset which has an eyepiece video display (which can also be equipped
    with a forward-looking video camera to record the wearer's eye view).
    The other components of the headpiece are a throat voice-activated
    microphone and earphone that allow two-way voice communication either
    with the computer or a radio system.
        The second shortcoming is similar. Until recently there have not
    been speech recognition systems that could reliably accept voice input
    for decision-support or recording of vital information. Today, however,
    there are several inexpensive speech-to-text and text-to-speech engines
    for computers, which enabling direct communication with databases and
    artificial intelligence (AI) systems.
        For the paramedic there is no transcriptionist. All records have to
    be reconstructed after the fact, from memory or from incomplete remote
    records from dispatcher reports and third parties. Sometimes a patient
    may be under the care of more than one service provider may. This can
    happen when a rural facility initiates care and the patient must be
    treated by first responders, followed by advanced providers and finally
    moved to a higher care level by a third caregiver, such as a helicopter
    flight crew. In this environment, the continuity of care may be
    maintained, but the records often become scattered, never reaching the
    final link in the chain. Incomplete or fragmented records mar most
    research into what works effectively in the field with paramedics. The
    use of a wearable computer, which is voice-activated, provides the
    ideal mechanism to review individual patient care to improve treatment
    proficiency, quality and training. The addition of a video cameral to
    that recording provides, literally, the complete picture.
        There is the another problem for emergency care systems, probably
    the most difficult to solve and most in need of solution. When
    confronted with ambiguous data, indicative of a number of patient
    conditions, the paramedic must rapidly gather and sort volumes of
    information, develop a treatment plan and, with guidance from a
    physician, attempt to restore stability. There are certain situations
    that are high criticality and low frequency. This means that the
    paramedic is unlikely to see the condition often, so it is unfamiliar.
    Simultaneously, the patient condition requires immediate and effective
    treatment for a survivable outcome. A few of these events include toxic
    exposures, multiple system trauma, complex rescue situations, and any
    other accidental or intentional event which leads to rare but lethal
    injuries.
        This is a request for $1,000,000 in project development money to
    demonstrate a wearable computer system for field medical personnel. It
    will integrate available civilian and military technologies. Its goal
    is effective information management, field diagnosis--especially for
    rare and complex disorders such as chemical toxin exposures or
    biohazard exposures--and finally a real-time record of the events. This
    prototype will provide the model for expert systems to be placed in
    every field medical environment in the nation. In rural regions it will
    provide access to the sophisticated support of trauma centers and
    specialty physicians. In the urban environment it will simplify and
    improve proper management of mass casualty events. These may be rare,
    but they require high readiness and complex handling. Such events could
    include biological terrorism, chemical weapons, or even significant
    accidental exposures to these agents. They also include medically
    challenging cases such as thermal burns, poison exposures, and quick-
    acting illnesses, which threaten vital organ systems. The federal
    government has already funded the research that created the
    technologies to be used. There are military educational applications of
    this technology in use for aircraft maintenance. There are other
    applications in commercial development for inventory and maintenance
    applications, which are primarily data gathering or information recall
    systems. There have not been applications to the field practice of
    emergency medical care--a discipline that can produce an impressive
    return on development funding.
        The Gainesville Fire Rescue Department (GFRD) is the primary
    applicant. The department is a Florida licensed advanced life-support
    (ALS) provider for the municipality of Gainesville and a wide urban
    area surrounding the city. The total population served is approximately
    145,000 with an annual emergency call load of 20,000 emergency
    incidents, 15,000 of which are for emergency medical services (EMS).
    The department has a Regional Hazardous Materials Response Team
    providing training and emergency response to an eleven county area of
    North Florida. Except for its home county of Alachua, these counties
    are primarily rural with limited critical incident response capability.
    In addition, the department provides direct medical response services
    for the Gainesville Police Department's Special Response Team and the
    Alachua County Sheriff's Special Weapons and Tactics Team (SWAT).
    Paramedics who have completed the Department of Defense CONTOMS course
    are utilized in this role for support of high risk warrants and
    arrests, along with hostage or explosive device crises.
        The project will be a partnership with a research team from the
    University of Florida's Shands Teaching Hospital, Department of
    Anesthesiology. The project consists of hardware (wearable computer,
    micro-video camera, digital radio interface); and software (speech-to-
    text, text-to speech, heuristic decision support). These will be
    integrated into a body ensemble to be worn by field paramedics. Current
    medical and operational plans will be programmed into the computer to
    begin experiments with field use. This is a demonstration project to
    produce one limited use version of the device for continued
    experimental development. Results of the work will be shared as
    published research papers in medical journals, federal technology
    sharing publications, and journals common to emergency service
    providers.
        This system is expected to greatly enhance the quality of treatment
    for critical trauma patients, mass casualties from all causes,
    including exposures to biological or chemical weapons, and complex
    medical illnesses. The potential for development of future uses is
    immense, following demonstration of successful integration. The
    benefits will be of national significance by making available a
    developed system that can be replicated at reasonable cost. It will
    create a standard platform for innovation and development among other
    users. The development team will make use of existing civilian and
    military technologies wherever possible.
        The project will be divided into four phases. Phase one will
    involve research into existing technologies and development of a
    specification. Phase one will last 6 months and culminate in a document
    containing a detailed specification of the device to be developed and
    tested. Phase two will be development of a prototype system. Phase two
    will last 18 months. Phase three will be implementation and testing of
    the prototype and will last 9 months. Phase four will involve
    preparation of a final report and recommendations for further
    development and integration into EMS. It is quite possible that
    industry partners or further Federal funding will be obtained prior to
    completion of the project and that further development can continue
    uninterrupted.
        The total cost of $1,000,000 will be spread over a three-year
    period, as follows: Year 1: $338,000, Year 2: $332,120, and Year 3:
    $329,880. The results (deliverables) will be:
      --A prototype handheld or wearable computer with heads up display
            (HUD) with additional components containing communications
            software and capable of gathering vital signs information from
            monitoring devices, and/or controlling therapeutic devices.
      --Medical algorithms for treating a variety of life threatening
            conditions and an advisory system as part of a user friendly
            intuitive interactive display with therapeutic options.
      --Systems to bi-directionally communicate medical information and
            allow medical command to and from a remote location.
        The system will be evaluated in actual emergency events and the
    results published in research journals along with emergency medical
    magazines.
        Thank you for the opportunity of presenting a unique opportunity
    for the design of a nationally significant tool for crisis intervention
    and successful lifesaving care. In fact, this innovation will have
    international impact as its full potential is realized.
        First, I would like to thank Chairman Wolf and the members of the
    Transportation Appropriations Subcommittee for earmarking $1.5 million
    of bus capital funds for Gainesville for fiscal year 1999. To
    accelerate delivery of the buses we are cooperating with Hartline in
    Tampa to purchase low-floor, hybrid-electric buses with the earmarked
    funds.
        Second, I would like to bring you up to date on our efforts to
    improve transit in the Gainesville area. Our Regional Transit System
    gas just completed its best year ever; ridership on city bus routes
    increase by 1 million passengers in 1998 to 2.3 million passengers, up
    from 1.3 million in 1997. Total ridership, including the University of
    Florida Campus shuttle routes was 3.3 million passengers.
        To meet the increased demand for transit in Gainesville, we had to
    acquire 10 used buses from Lynx in Orlando and 11 Used busses from PSTA
    in St. Petersburg this past year. The average age of our fleet of 62
    buses is now 10 years old.
        This year we are seeking the balance of the funds we requested last
    year or $6 million to purchase 20 ADA accessible, alternatively fueled
    buses.
        We are continuing our efforts with our partners: Alachua County,
    the Florida Department of Transportation, The University of Florida,
    and the UF Student Government, to enhance bus service in the
    Gainesville metropolitan area. The UF Student Government has approved a
    doubling of the student transit fee, so that more transit service can
    be provided from the off campus student housing areas. Since UF
    students are now paying a transit fee, we are honoring UF student IDs
    as unlimited use bus passes. The program began in August, and we have
    already carried well over 1 million UF student passengers on our
    transit system.
        Our weekday ridership on all routes on all routes is now in excess
    of 21,500 passengers, compared to 12,400 a year ago, and 11,238 two
    years ago. Gainesville is making transit work in an urbanized area of
    only 140,000 in population.
        Your allocation of bus discretionary capital funds to Gainesville
    to replace overage buses will help us enhance the quality of life for
    our community. We also hope to show that public transit can play an
    important role in a sustainable transportation system, even in a
    medium-sized city, like Gainesville, Florida.
        Thank you for your consideration.
                                     ______

               Prepared Statement of the City of Miami Beach, FL

                            the electrowave shuttle
        Mr. Chairman and members of the transportation subcommittee: The
    City respectfully submits a transportation related program for a
    discretionary earmark through the Federal Transit Administration,
    within the Fiscal Year 2000 Transportation Appropriations Bill. The
    City proposed earmark of seven million dollars will be used toward the
    construction of an intermodal transit area that will support the
    existing electric shuttle service known as the ``electrowave''. This
    innovative and environmentally friendly local circulator has carried
    over 1.5 million passengers in the first year of service, operating
    only five (5) 22-passenger vehicles at any given time. Its success,
    popularity, and charm are unquestionable and unprecedented.
        The ``electrowaves'' existing route operates in South Beach, a
    congested, urban-commercial and residential area, and national historic
    district of Miami Beach, which contains a convention center and is an
    international tourist destination. This intermodal, transit project
    will provide vital transportation collectors for the area, where
    commuters and visitors will have access to parking, information
    centers, local and regional, transit services, as well as a usable park
    and ride program. The first and largest of these centers will include a
    full scale facility for the ``electrowave'' service and its vehicles.
        We see several advantages to adopting a multiple transit-site
    approach to the intermodal area.
        1. These transit sites will be located on existing on public land.
        2. They will fit the scale and character of the intermodal area.
        3. The transit sites will act as hubs for hurricane evacuation
    activities, since Miami Beach is a barrier island; and
        4. Multiple transit sites will serve a larger area and more people
    than one single intermodal center.
        Looking into the future, one or more of these transit sites will
    also serve as a terminus of an east-west multi modal corridor--a
    regional transportation project which proposes to connect the mainland
    expressways with the Miami International Airport, downtown Miami, the
    seaport and Miami Beach.
        The electrowave program is included in the five year transportation
    improvement program of Miami-Dade County and has the financial support
    of the City of Miami Beach, the Florida Power & Light Company, and
    other clean air and energy agencies.
        A fiscal year 2000 discretionary FTA fund earmark toward these
    multiple transit sites is critical to the long-term effectiveness of
    the electrowave service and its park and ride component, as well as to
    a Miami Beach interconnection with a 21st-century east-west multi modal
    corridor.
        Your consideration is sincerely appreciated.
                                     ______

       Prepared Statement of Norma Stanton, Chairman, Dallas Area Rapid
                               Transit Authority

        My name is Norma Stanton and I am Chairman of the Dallas Area Rapid
    Transit (DART) Board of Directors. It is indeed a pleasure to submit to
    the Subcommittee DART's fiscal year 2000 appropriation request of $70
    million for the North Central Light Rail Transit (LRT) Extension. The
    request is for inclusion in the Federal Transit Administration (FTA)
    portion of the fiscal year 2000 Department of Transportation and
    Related Agencies budget.
        The $70 million of New Start funds will be dedicated to the North
    Central LRT Extension of the 20-mile DART LRT Starter System. (See the
    attached map.) The funds will be used totally for construction
    elements, light rail vehicles, and real estate. Completion of the 12-
    mile North Central LRT Extension and the companion 12-mile Northeast
    LRT Extension (100 percent local funds) will more than double light
    rail coverage, to 44 miles, and penetrate the DART suburban cities of
    Richardson, Plano, and Garland.
          why the subcommittee should appropriate $70 million to dart
        Full Funding Grant Agreement approval is imminent.
      --DART will likely be the first agreement executed under TEA 21.
      --DART and FTA are in the final stage of negotiations.
      --It is expected these negotiations will be completed very shortly.
      --FTA will then notify Congress of its intent to execute the
            agreement.
        The North Central LRT Extension is under construction.
      --The $70 million is needed immediately to meet cash flow
            requirements for contracts authorized under a FTA Letter of No
            Prejudice (LONP).
      --DART has already awarded contracts totaling more than $200 million
            for the NC-3 Line Section, 21 new light rail vehicles, real
            estate, welded rail and fasteners, special trackwork, the
            vehicle maintenance facility, and yard expansion.
      --By the end of fiscal year 1999, virtually all the contracts, valued
            at close to $1 billion for both the North Central and Northeast
            (100 percent local funds) LRT Extensions will have been
            awarded.
        DART can initiate construction before executing the Full Funding
    Grant Agreement because of a citizen-approved sales tax.
      --The citizens of the DART service area in 1983 voted to impose a 1
            percent sales tax dedicated to DART for public transit.
      --A total of $3.18 billion has been collected through December 31,
            1998, with $314 million received in fiscal year 1998.
      --DART uses sales tax receipts and short-term borrowing to finance
            the initiation of construction; but,
      --The timely receipt of federal funds is critical to repaying these
            short-term notes and minimizing the additional expenses
            associated with borrowing funds before receipt of the federal
            funds.
            [GRAPHIC] [TIFF OMITTED] TNDPT.004

        DART continues to overmatch.
      --The $860 million LRT Starter system was financed with 19 percent
            ($160 million) federal and 81 percent ($700 million) local DART
            funds.
      --The combined $992 million construction cost of the two LRT
            extensions continues DART's philosophy of providing a
            substantial local overmatch, as was done on the LRT Starter
            System.
      --DART local funds of $659 million represent 66 percent of the total
            project cost, with federal discretionary new start funds
            accounting for just $333 million, or 34 percent.
        Solid elected official and business support.
      --Richardson Mayor Gary Slagel, Plano Mayor John Longstreet, and
            several business executives from the North Central Corridor
            have met with most of the Delegation Members to voice their
            strong support for the investment DART is making to bring major
            mobility improvements to the corridor.
      --DART member cities and service area chambers of commerce have shown
            their support by writing letters and passing supporting
            resolutions.
      --DART, the City of Richardson, Hunt Petroleum, and Northern Telecom
            are incorporating a rail transit plaza in the Galatyn Park
            expansion of the Telecom Corridor.
        DART is an economic engine to North Texas and the state.
      --DART is providing a hefty boost to the North Texas and state
            economies, with a total regional impact estimated at $3.7
            billion and more than 32,000 jobs through 2003.
      --The new study prepared by the Center for Economic Development and
            Research at the University of North Texas looks at three
            separate DART economic engines: the current $1 billion light
            rail expansion, other capital projects, and ongoing DART
            operations.
        DART has already demonstrated it can build on time and within
    budget.
      --DART has shown that it can capably manage a large, multi-million
            dollar project, keep it on schedule and within budget through
            strong project management and strict cost control.
      --DART has proven to be a cost-effective manager of both local and
            limited federal funds through conservative financial policies
            instituted and approved by the DART Board.
                             supporting information
    Milestones
        Two very important milestones were achieved during the first week
    of February that significantly impact the status of the North Central
    LRT Extension. First, on February 1, the Administration's fiscal year
    2000 budget proposal was released and recommended $70 million for the
    North Central LRT Extension of the 20-mile DART LRT Starter System. The
    $70 million is the largest funding recommendation of the seven new Full
    Funding Grant Agreement projects and the fourth highest among the 21
    projects recommended for funding.
        On February 2, Vice President Al Gore, Secretary of Transportation
    Rodney Slater, and Federal Transit Administrator Gordon Linton informed
    Dallas Mayor Ron Kirk and DART's President/Executive Director Roger
    Snoble of FTA's intent to enter into negotiations for a Full Funding
    Grant Agreement for DART's North Central LRT Extension. On February 5,
    Administrator Linton was in Dallas commemorating this important
    announcement. DART is currently in the final stage of negotiations with
    FTA on the Agreement.
    Major Accomplishments
        DART operates a highly successful 20-mile light rail transit system
    within Dallas, and a 10-mile commuter rail line between Dallas and
    Irving. In addition to the rail services, DART operates a variety of
    transportation alternatives including high occupancy vehicle (HOV)
    lanes, 130 bus routes, paratransit services for the mobility impaired,
    rideshare programs and corporate trip-reduction programs. (See the DART
    Capital Projects map.) These multi-modal systems are the result of
    thorough corridor planning and implementing the right mode to match the
    corridor characteristic and ridership. As seen on the Capital Project
    maps, a mix of high capacity systems is being implemented and operated
    in the Dallas area. This mix includes HOV lanes that are planned,
    designed, built, and operated in partnership with the Texas Department
    of Transportation.
        The introduction of rail and expanded HOV services, coupled with
    bus ridership gains, boosted total annual ridership by 22.5 percent to
    85.7 million in fiscal year 1998, from 69.9 million in fiscal year
    1997. Weekday ridership in fiscal year 1998 rose to 283,700, with peak
    days exceeding 310,000.
    Exceeding Expectations
        DART's new LRT and commuter rail services are generating ridership
    well beyond initial projections, with more than 41,000 passengers per
    day. DART rail is generating extensive economic development around
    stations and along rail corridors as it increases mobility choices for
    workers. Consequently, business and community leaders are actively
    supporting efforts to expand the rail system in a timely manner, in
    accordance with the DART Transit System Plan. The citizens of North
    Texas are eager for DART to complete these major transportation
    projects in a timely and fiscally responsible fashion.
    Miles to Go
        DART's Transit System Plan calls for the development of 58 miles of
    light rail, 37 miles of commuter rail, and 98 miles of HOV lanes. The
    Financial Plan portion of the fiscal year 1999 Business Plan projects
    the sources and uses of funds for DART's projects through the next 20
    years. The Financial Plan projects $7.3 billion in locally funded
    operating expenses and a total of $4.6 billion in capital costs.
    Because of DART's one-cent sales tax, it has been Board policy to use
    the local funds for transit operations and DART has never sought or
    received Federal operating assistance. Therefore, federal funding
    accounts for only 19 percent of capital investments and 9 percent of
    overall expenditures. This significant local financial commitment by
    DART is shown graphically following the Capital Projects map.
    [GRAPHIC] [TIFF OMITTED] TNDPT.005

     DALLAS AREA RAPID TRANSIT 20-YEAR SUMMARY OF LOCAL AND FEDERAL FUNDING
                              [Dollars in billions]
    ------------------------------------------------------------------------
                                                                     Percent
                                                             Amount     of
                                                                      total
    ------------------------------------------------------------------------
    Local funds...........................................    $10.8     90.6
    Federal funds.........................................      1.1      9.4
    ------------------------------------------------------------------------
    Source: DART fiscal year 1999 Business Plan.

    Future Vision
        With Subcommittee support, DART will be able to improve the
    transportation options for North Texas and help the region to remain a
    vibrant area to live and work. You may rest assured that the Delegation
    Members will continue to work closely with DART to get these projects
    funded, built within budget, and in operation on schedule.
        As previously stated, the North Central and Northeast LRT lines are
    under construction. DART is also looking to the future and is currently
    undertaking Northwest and Southeast Corridor Major Investment Studies.
    The table below highlights the status and implementation schedule.

                                    PROGRAM OF RAIL PROJECTS--IMPLEMENTATION SCHEDULE
    ----------------------------------------------------------------------------------------------------------------
                                                                                                         Open for
                Line                    MIS          PE/EIS or EA     Final Design        Start           Revenue
                                                                                       Construction       Service
    ----------------------------------------------------------------------------------------------------------------
    North Central...............  Completed......  Completed......  April 1997-....  Jan. 1999             2002/2003
                                  June 1994......  April 1997.....  Jan. 2000         (Staged).
                                                                     (Staged).
    Northeast...................  Completed......  Completed......  Feb. 1997-.....  August 1998           2001/2002
                                  Nov. 1995......  Dec. 1996 (EA).  June 1999         (Staged).
                                                                     (Staged).
    Southeast...................  Feb. 1998-Late   2000-2001......  2001-2004        2003 (Staged)..       2005/2008
                                   1999.                             (Staged).
    Northwest...................  Feb. 1998-Late   2000-2002......  2002-2005        2004 (Staged)..       2006/2007
                                   1999.                             (Staged).
    ----------------------------------------------------------------------------------------------------------------

        DART is an economic engine to North Texas and the State of Texas.
        According to a February 1999 study prepared by the Center for
    Economic Development and Research at the University of North Texas,
    DART is providing a hefty boost to the North Texas and state economies,
    with a total regional impact estimated at $3.7 billion and more than
    32,000 jobs through 2003. The study looks at three separate DART
    economic engines: the current $1 billion light rail expansion, other
    capital projects, and ongoing DART operations. Quoting from the study,
    ``By any measure, DART is a key economic engine for the North Texas
    region, generating jobs and economic activity just in the amount of
    money it spends on building new facilities and operating activities. If
    we factored in the benefits DART brings by providing inexpensive
    transportation to work and improved traffic and air quality, the number
    would be even higher.'' The charts below graphically illustrate the
    economic and job impacts to the North Texas region.

       Five-Year Economic Impact of Dallas Area Rapid Transit's Capital
                 Projects and Continued Operations Through 2003

                             [Dollars in billions]

    North Texas Regional Economic Activity:
        LRT.......................................................      $2.3
        Other.....................................................      $.25
        Operations................................................      $1.2
                        --------------------------------------------------------------
                        ____________________________________________________

          Total...................................................      $3.7
                        ==============================================================
                        ____________________________________________________
    Number of Jobs Created in North Texas:
        LRT.......................................................    27,558
        Other.....................................................       563
        Operations................................................     4,088
                        --------------------------------------------------------------
                        ____________________________________________________

          Total...................................................    32,209

    Source: University of North Texas Center for Economic Development and
    Research, February 1999.
    ---------------------------------------------------------------------------
    Regional Mobility
        DART plays a significant role in meeting the challenging regional
    mobility needs. DART's Transit System Plan is contained in the approved
    North Central Texas Council of Governments' ``Mobility 2020: The
    Metropolitan Transportation Plan'' and is also programmed in the
    Regional Transportation Improvement Program for Discretionary funding.
    DART's rail projects relate directly to one of the more important
    Mobility 2020 Goals: ``Develop a balanced, efficient and dependable
    multimodal transportation system which reduces demand for single
    occupant vehicle travel.''
        DART's rail program is an integral part of the regional, multimodal
    transportation system of light rail, commuter rail, HOV, and roadway
    improvements. Elements of the LRT Starter System are also a
    Transportation Control Measure for meeting air quality standards in
    this ozone non-attainment area.
                                   conclusion
        The citizens of the DART service area have invested their sales tax
    dollars to implement the Transit System Plan. The $70 million request
    is realistic based on the Board-approved DART fiscal year 1999 Business
    Plan, which also has been examined by many of the finance directors of
    DART's member cities.
        As the Subcommittee deliberates the hundreds of funding requests,
    remember:
      --The Full Funding Grant Agreement is imminent.
      --The North Central LRT Extension is under construction.
      --$200 million in contracts have been awarded.
      --DART can initiate construction before executing the Full Funding
            Grant Agreement, because of sales tax revenues.
      --DART continues to overmatch (66 percent local, 34 percent federal).
      --There is solid elected official and business support. DART is an
            economic engine to North Texas and the State of Texas.
      --DART has demonstrated it can build on time and within budget.
        These are very compelling reasons to honor DART's $70 million
    request that has our complete support. An appropriation less than $70
    million could lengthen the project, delay the openings in the very
    cities that are strongly supporting this project, and undoubtedly
    increase overall costs to the taxpayers.
        We urge your endorsement of DART's fiscal year 2000 funding request
    of $70 million in order to keep the momentum we have collectively
    gained. DART is planning, building, and operating transportation
    services now for the future mobility of the region.
                                     ______

      Prepared Statement of J. Barry Barker, Executive Director, Transit
                         Authority of River City (TARC)

        Mr. Chairman, I am Barry Barker, Executive Director of the Transit
    Authority of River City in Louisville, Kentucky. I am pleased to submit
    this statement on behalf of Easter Seals in support of Project ACTION.
    I currently serve as the Chairman of the Project ACTION National
    Steering Committee. The National Steering Committee is comprised of
    members of both the transit and disability communities who support
    Project ACTION and are grateful for the Senate Transportation
    Appropriations Subcommittee's ongoing support for this vital resource.
        As the Subcommittee is well aware, without access to
    transportation, people with disabilities cannot benefit from the
    promise of full participation in society that Congress envisioned when
    you passed the Americans with Disabilities Act (ADA). Yet, achieving
    the worthwhile goals of the ADA has not always been an easy process,
    particularly in light of the tight fiscal constraints under which many
    transit properties operate.
        Those of us who provide transit services are earnestly working
    toward compliance with the ADA and providing the best quality service
    to all Americans--those with disabilities and those without. Our need
    for assistance and guidance on transportation accessibility issues is
    ongoing. This is where Project ACTION plays a vital role. With the
    support of this subcommittee in recent years, Project ACTION has become
    the principal resource of tools, training and procedures to make the
    ADA work. Since this subcommittee established Project ACTION, it has
    sponsored innovative research, funded demonstration projects, provided
    technical assistance to hundred of transit providers, and developed an
    impressive resource center with information on the most cost-effective
    ways to achieve accessibility.
        Let me briefly describe some major initiatives that the Project
    will launch in the coming months. In June 1999, Project ACTION will
    host two National Technical Assistance Conferences, one in Dallas and
    the other in Portland, Oregon. These conferences are designed to
    provide transit operators with every available resource to implement
    cost effective ADA compliance strategies. Conference topics include:
      --Reducing Paratransit costs by transitioning riders from paratransit
            to fixed route service.
      --Solving Rural Transportation Issues.
      --Ferry and other Water Vessel Accessibility.
      --Issues involving Senior Citizens.
      --Serving Passengers that use seeing eye dogs and other service
            animals.
      --Training transit operators to make stop announcements.
      --Dispute resolution principles.
        This brief overview of these topics demonstrates that accessible
    transportation encompasses so much more than just bus lift operations
    for passengers in wheelchairs. Project ACTION has developed tools and
    resources in all areas of accessibility. These conferences will go a
    long way to getting these tools directly in the hands of the transit
    operators that need them.
        The demand for Project ACTION information is strong and continues
    to grow. In the first quarter of fiscal year 1999, Project ACTION:
      --Handled orders for 1713 documents.
      --Responded to over 1032 calls for assistance of various kinds.
      --Produced and distributed the Project ACTION Update to over 10,000
            individuals and transit agencies.
      --Received 35,942 visits to the Project ACTION Webpage.
        In January, Easter Seals submitted its fiscal year 1999 federal
    application to the Federal Transit Administration. This document
    outlines how Project ACTION will spend the $3.0 million in support that
    this subcommittee approved in the fiscal year 1999 appropriation bill.
    The increased funding that you provided will enable us to greatly
    expand our activities. One new major area that Project ACTION will
    undertake is providing assistance to Over-the-Road Bus (OTRB)
    operators. Transportation Secretary Slater recently issued OTRB
    regulations to bring this industry into compliance with the ADA.
    Project ACTION will devote $200,000 to help this industry meet these
    ADA requirements, and in doing so, help open up cross-country and tour
    and charter travel to people with disabilities. In the near future we
    envision some start up problems because of the large number of private
    Over-the-Road-Bus operators who are coming under the ADA's reach. We
    plan to work with the American Bus Association and a core group of
    operators to conduct a needs assessment and to develop educational and
    training materials specifically tailored to the unique needs of the
    cross country and tour and charter bus operators.
        As we approach the ADA's tenth anniversary in 2000, we should take
    note of the tremendous progress we have made in recent years in terms
    of transit access. The 1998 Survey conducted by Louis Harris &
    Associates polling firm for the National Organization on Disability
    demonstrated some of this progress. In 1986, 31 percent of people with
    disabilities who were unemployed stated that lack of access to
    accessible transportation prevented them from working. In 1998 this
    percentage dropped to 24. While it is too early to declare victory with
    one quarter of the affected individuals defining lack of access to
    transportation as an important reason they were not working, we are
    clearly headed in the right direction.
        Accessibility is increasing all across America: bus fleet
    accessibility has grown; rail station access has increased; and most
    importantly the disability and transit communities have learned to work
    together instead of meeting only in street protests and in costly
    courtroom battles. Project ACTION is the singular, most positive force
    bringing the transit and disability communities together.
        On behalf of the millions of people with disabilities who rely on
    public transit and the transit operators working to serve them, Easter
    Seals thanks this subcommittee for its past support of Project ACTION.
    As we look toward the future, Project ACTION's main focus will be to
    continue to find and implement creative and cost-effective methods to
    promote ADA compliance and to reduce the rising costs of paratransit.
    As the Executive Director of a transit authority, I want to emphasize
    how much my colleagues and I have come to rely on Project ACTION for
    help in this regard and on all aspects of accessibility. For example,
    at TARC we participated in developing Teamwork in Transportation, an
    interactive computer-based sensitivity training program funded by a
    $50,000 grant from Project ACTION which has since been shared with more
    than twenty transit authorities.
        On behalf of Easter Seals, I respectfully request this subcommittee
    to provide $3.0 million dollars to fund Project ACTION in fiscal year
    2000. This funding level will ensure that Project ACTION can continue
    to develop and disseminate workable solutions to the most critical
    issues facing transit operators as they implement the ADA. We
    understand the fiscal constraints under which this subcommittee
    operates. However, Project ACTION is a credible, cost-effective, and
    creative program that has strong support in both the disability and
    provider communities and with the Federal Transit Administration. The
    spirit of cooperation would not be possible without the leadership of
    this Subcommittee. Easter Seals is grateful for your support and we
    look forward to continued collaboration.
        Thank you.
                                     ______

     Prepared Statement of the Electric Vehicle Association of the Americas

                                  introduction
        This testimony is presented on behalf of the Electric Vehicle
    Association of the Americas (EVAA), a national non-profit organization
    of electric utilities, automobile manufacturers, state and local
    governments and other entities that have joined together to advocate
    greater use of electricity as a transportation fuel. Recently, the EVAA
    consolidated with the Electric Transportation Coalition (ETC), and our
    new organization, headquartered in Washington, D.C. is now the single,
    united voice for the use of electricity in the transportation sector. A
    membership list of the newly combined EVAA and ETC is attached.
         the role of electricity in the national transportation system
        The Association believes that utilization of electricity as a fuel
    source can be an important factor in the national transportation
    system. Electricity offers significant advantages in transportation
    applications. From an energy security standpoint, electric
    transportation presents our nation with an important means for reducing
    our dependency on foreign petroleum and increasing the diversity of
    fuels relied upon in the transportation sector. A wide variety of
    transportation modes--individual passenger and light-duty vehicles;
    heavy-duty vehicles, like buses and trolleys; light rail; commuter
    rail; high speed rail; and heavy rail services--can be powered by an
    abundant, domestically produced energy resource generated from a
    variety of sources. That domestically produced energy resource is
    electricity.
        In addition to diversifying sources of transportation ``fuels,''
    air quality considerations are requiring municipal transit operators to
    consider the use of alternative fuel technologies as a means to reduce
    emissions and achieve air quality goals. For many urban areas, electric
    transportation may be a particularly important means to substantially
    reduce emissions of mobile source pollutants, including volatile
    organic compounds and oxides of nitrogen, that are the precursors of
    smog. Electric vehicles (EVs) and electric buses, for example, are
    truly ``zero emission'' vehicles in operation. They produce no tailpipe
    emissions and generate insignificant operation emissions. Also, unlike
    other vehicles, EVs are not subject to emission system deterioration
    over time and there is no danger of tampering with emissions controls.
        The Association urges the Subcommittee to consider support for the
    following two initiatives:
    1. Electric and Hybrid-Electric Bus Information Sharing and Technology
            Transfer Initiative
        In the Transportation Equity Act for the 21st Century (TEA-21),
    Congress authorized a $60 million electric and hybrid-electric bus
    deployment program as part of the Federal Transit Administration's
    (FTA) Clean Fuels Formula Grants program. During the fiscal year 1999
    appropriations process, funding for the Clean Fuels Formula Grants
    program was merged with funding for the bus and bus-related facilities
    program. Combining these programs allowed Congress to substantially
    increase the pool of authorized funds available to spend on specific
    projects. Indeed, Congress decided to appropriate funds to specific
    projects and, as a consequence, a sought-after benefit of the electric-
    bus deployment program may not be realized. That benefit is information
    sharing and technology transfer. Electric and hybrid-electric bus
    technology, including fuel cell bus technology, is in the early stages
    of deployment and evaluation. Early experiences with some of these
    buses have evidenced the need for the technology to mature. Much could
    be learned about these cutting edge technologies if transit operators
    receiving federal funds to procure and operate these buses were to
    participate in a program specifically designed to disseminate and
    transfer information.
        The Association believes it is important for the Federal Transit
    Administration to issue guidance on the implementation of the Clean
    Fuels Formula Grant as it pertains to electric and hybrid electric
    buses. The FTA guidance would define a set of common criteria to guide
    project sponsors who will seek to use these funds. The issuance of
    guidance documents for the Clean Fuels Formula Grant program and the
    electric bus sub-program would help to focus attention on the jeopardy
    to technology development if projects are designated and then
    implemented without consideration to standards, common goals or
    technology transfer. The Association is concerned that without
    attention to information sharing, the value of the program for the
    development and widespread use of electrified mass transit will be
    significantly diminished.
        We have urged Administrator Linton to issue guidance regarding the
    electric bus program to insure that some uniformity in bus design and
    application is achieved as this infant technology matures. In addition,
    to insure technology transfer and information sharing, the Association
    urges Congress to provide up to $1.0 million to fund an Electric and
    Hybrid-Electric Bus Information Sharing and Technology Transfer
    Initiative. Sharing information about operational know-how, mistakes,
    and the state of technology could help all entities interested in this
    mode of transportation. This knowledge, gained through experience,
    should be available to other potential operators and provided to those
    public and private entities interested in using these technologies. The
    information sharing and technology transfer program should include
    those transit operators actually using electric buses as well as other
    parties interested in this new form of transportation. The proposed
    Electric and Hybrid-Electric Bus Information Sharing and Technology
    Transfer Initiative would facilitate ongoing data collection and
    dissemination of technical information relating to operations and
    performance and maintenance of buses, in addition to providing for
    information exchange meetings and potential site visits.
    2. Electrification of Airports
        Airports are often one of the major sources of air pollution and
    noise in urban areas. The frequent idling and accelerating of diesel
    and gasoline-powered off-road, airport and airline service vehicles
    contribute to the airport pollution problem. Airport electrification
    could provide for the replacement of conventional, fossil-fueled
    vehicles now used for air-side baggage handling and airplane service,
    as well as a majority of the land-side shuttle vehicles, with electric,
    zero emission counterparts. The characteristics of airport vehicle use
    are well suited to electric transportation technology. The Association
    is supportive of efforts to bring the benefits of electric vehicles to
    our nation's airport facilities. The Committee is urged to support
    funding of projects and programs that specifically address use of
    electric vehicles or other low emissions vehicles at our nation's
    busiest airports.
        The Association believes it is vitally important to fund transit
    programs which encourage innovative technological development with
    regard to electric and hybrid-electric vehicles, as well as other forms
    of electric transportation systems. Therefore, the Association urges
    funding--to the fullest extent authorized under TEA-21--of public
    transit programs. In particular, the Association encourages funding for
    the following:
        Congestion Mitigation and Air Quality Improvement Program (CMAQ).--
    The CMAQ program provides money, through a TEA-21 formula, to the
    states to fund projects and programs that reduce transportation-related
    emissions in nonattainment and maintenance areas. An important, new
    dimension to the CMAQ program is the Public/Private Partnership Program
    that provides a mechanism through which the private sector may access
    CMAQ funding. The Association is supportive of full funding for the
    CMAQ program.
        MAGLEV Program.--The Magnetic Leviation Transportation Technology
    Deployment Program (MAGLEV) encourages the development and construction
    of a high-speed rail system employing magnetic leviation technology.
    The Association supports continued funding of this important
    transportation technology program.
        Joint Partnership Program.--Created by TEA-21, the Joint
    Partnership Program authorizes public/private partnerships to
    cooperatively implement innovative mass transportation projects. The
    Joint Partnership program would give private entities the potential to
    participate in Department of Transportation programs generally
    available exclusively to the public sector. The Association encourages
    the Committee to fund this program in fiscal year 2000.
        Intelligent Transportation Systems.--TEA-21 created a new program
    which provides for the research, development, and operational testing
    of Intelligent Transportation Systems (ITS). The purpose of ITS is to
    solve congestion and safety problems, improve operating efficiencies in
    transit and commercial vehicles, and reduce the environmental impact of
    travel growth. The ITS also encourages public/private partnerships and
    private sector development. The Association supports continued funding
    for ITS deployment.
                                   conclusion
        The Association appreciates this opportunity to make its concerns
    known to the Subcommittee and to submit for the record its funding
    priorities for the upcoming fiscal year. We look forward to working
    with the Subcommittee and the Congress to achieve these worthwhile
    goals.
                                     ______

      Prepared Statement of Julie M. Austin, Executive Director, Foothill
                                    Transit

        Mr. Chairman, members of the Subcommittee, my name is Julie Austin,
    and I am the Executive Director of Foothill Transit (Foothill) in West
    Covina, California. Thank you very much for the opportunity to submit
    testimony to this subcommittee.
        Mr. Chairman, I recognize the difficult tasks before this
    Subcommittee and commend your leadership in determining the allocation
    of available transportation resources during this congressional budget
    period. We are very appreciative of the overwhelming support provided
    to Foothill by this committee over the past four years toward the
    construction of our two operating and maintenance facilities.
                         why this bus capital request?
        Thanks to the support of our strong Congressional delegation,
    Foothill Transit has been extremely successful in achieving its capital
    goals. As Foothill celebrates its tenth anniversary, the majority of
    our buses have reached the end of their useful life. Many of our 40-
    foot, heavy-duty transit buses will have accumulated one million miles
    or more--well beyond the 500,000-mile FTA threshold for replacement.
    Our superior maintenance programs are designed to ensure that a twelve
    year-old bus is indistinguishable from a four year-old bus. The process
    of replacing Foothill's aging bus fleet needs to begin this year in
    order to continue this outstanding record which earned Foothill the
    designation of a ``national model'' in recent Congressional report
    language.
        Foothill's new funding request for $10.32 million in Section 3 bus
    capital discretionary funding, to be applied toward 66 replacement
    buses, will ensure our ability to meet the demands of increased
    ridership while maintaining our commitment to quality customer service.
    Foothill Transit has put aside sufficient funds from other sources to
    purchase 20 advanced diesel buses for service expansion (our total
    order will be 86 buses). The remaining 66 replacement buses (including
    two hybrid electric vehicles) will require additional funding. Should
    the committee give favorable consideration to our funding request for
    fiscal year 2000, we will match these funds with an additional $9
    million in local funds. This results in a 47 percent local match for
    the replacement buses. In addition, Foothill will obligate the funds
    immediately, and the procurement process has already been set in
    motion.
                       about the hybrid electric vehicles
        Undertaking a pilot project in which two HEV buses will be used in
    revenue service will allow Foothill Transit the opportunity to prove
    out this alternative fuel technology as a prudent step prior to any
    large-scale procurement of alternative fuel buses. A hybrid technology
    is desired to reduce engine wear, maintenance costs, and harmful
    emissions. Testing a hybrid drive train will also give us a platform
    for the advent of the fuel cell in a few years.
        Due to the limited ability of manufacturers to produce hybrid
    electric/compressed natural gas buses, Foothill Transit's Executive
    Board adopted an interim step of ordering new, lower-emissions advanced
    diesel buses and two hybrid electric/diesel buses. Foothill's decision
    was made after an exhaustive evaluation of commercially viable
    alternative fuels. The purchase of advanced diesel buses will allow us
    to buy more buses, provide more service, significantly reduce emissions
    from the buses currently in service, and meet our goal of continuing to
    provide outstanding customer service.
                             about foothill transit
        Foothill Transit started as an experiment and has evolved into a
    national model for public/private partnerships, providing cost
    effective, high quality transit service. This request for bus capital
    discretionary funds is the first request Foothill has made for revenue
    vehicle replacement. Our existing fleet of 259 buses has been financed
    with Certificates of Participation or paid for in cash. We believe you
    will agree from the audited information attached that Foothill Transit
    is one of the best investments of taxpayer dollars in these times of
    limited funds.
        Foothill has established a reputation of providing outstanding
    customer service. In five separate customer surveys, Foothill Transit
    drivers have consistently received ratings above average or greater by
    more than 80 percent of our customers. Customers also rate Foothill
    Transit buses very highly on their cleanliness, comfort and graffiti-
    free appearance.
                          history of foothill transit
        The Foothill Transit Zone was created in 1987 as a public/private
    partnership. It is governed by an elected board comprised of mayors and
    council members representing the 21 cities and three appointees from
    the County of Los Angeles who are members of a Joint Exercise of Powers
    Authority. It provides public transit services over a 327 square-mile
    service area. Foothill Transit was initially established as a three-
    year experiment to operate 20 bus lines at least 25 percent cheaper
    than the Southern California Rapid Transit District (now MTA), with
    those savings to be passed on to the community through more service
    and/or lower fares. A three-year evaluation conducted by Ernst & Young
    showed that Foothill's public/private arrangement resulted in cost
    savings of 43 percent per revenue hour over the previous provider.
    Providing top quality, cost-effective service to its customers,
    Foothill charged only 85 cents as a base fare until July 1, 1997--the
    same fare charged by the RTD in 1986. The fare schedule was
    restructured in 1997 to raise the base fare by a nickel, reduce the
    complicated zone structure, and actually reduce fares for Metrocard
    users. Rather than discouraging customers, this restructuring resulted
    in a ten percent increase in ridership during the first six months of
    implementation. Forty percent of Foothill's operating costs are covered
    by farebox revenues (state law only requires a 20 percent ratio of fare
    revenues to operating costs).
        Foothill has no employees. All management and operation of Foothill
    Transit service is provided through competitive procurement practices.
    The Foothill Executive Board has retained my employer, Forsythe &
    Associates, Inc., to provide the day-to-day management and
    administration of the agency. The management contractor oversees the
    maintenance and operation contractors to ensure adherence to Foothill
    Transit's strict quality standards.
        Using this new approach to delivering transit services, Foothill
    Transit has been able to:
      --Keep operating costs low while putting 96 percent more buses on the
            street;
      --Increase revenue generated from the farebox by 58 percent;
      --Increase service hours by 119 percent; and
      --Increase ridership by 110 percent.
        All of Foothill's operating funds were provided through bus fares
    and local sales tax until July 1, 1996, when Foothill Transit finally
    became eligible for state operating subsidies allocated to other
    transit operators. Proposition A and Proposition C are each a one half
    cent sales tax levied in Los Angeles County to support public transit.
    When the Foothill ``experiment'' began, no capital funds were made
    available to purchase buses. Therefore, buses were financed using
    innovative long-term financing over the 12-year life of the vehicles.
    Until recently, Foothill has paid for all of its buses out of its
    operating funds. Since fiscal year 1989, Foothill Transit has paid over
    $27 million in bus lease payments out of local operating dollars.
    Foothill did not receive any Section 9 capital funds to pay a portion
    of its annual bus lease payments until fiscal year 1995.
        Appropriation of funds for this critical procurement will allow
    Foothill Transit to meet its commitment to our customers as outlined in
    our Strategic Master Plan. Also, service will continue to be expanded
    and enhanced to meet the demand for increased mobility throughout the
    rapidly growing San Gabriel and Pomona Valleys.
        These funds will provide a significant contribution to continue the
    national model that has already been established to maximize the use of
    public funds.
        Mr. Chairman, that concludes my statement. Please note the attached
    charts and tables that illustrate Foothill Transit's success. Thank you
    for this opportunity and your consideration of our request. Please feel
    free to contact me if we can be of any assistance.
                                     ______

     Prepared Statement of Yvonne Brathwaite Burke, County of Los Angeles,
     First Vice Chair, Board of Directors, Los Angeles County Metropolitan
                         Transportation Authority (MTA)

        Chairman Shelby and Members of the Committee, on behalf of the Los
    Angeles County Metropolitan Transportation Authority (MTA) Board of
    Directors, as the Vice Chair of the MTA Board of Directors and a member
    of the Los Angeles County Board of Supervisors, I am pleased to request
    fiscal year 2000 funding for the County's regional surface
    transportation projects. I commend you and the Members of this
    Committee for its federal investment in the MTA's transit programs and
    continued leadership in our efforts to support our multi-modal
    integrated transportation network. The Federal Government's investment
    in the County's transportation system is critical to the nation and
    California economy as we enter the 21st Century.
        Over 9.6 million people reside in the County of Los Angeles. That
    makes Los Angeles County the nations most populous county and
    equivalent to the ninth largest state in the country. We have
    approximately 29 percent of all California's residents living in Los
    Angeles County. Geographically, the County remains one of the nation's
    largest, with 4,752 square miles--800 square miles larger than the
    combined area of the states of Delaware and Rhode Island. Los Angeles
    County is home to two of the most successful ports in the nation, the
    Port of Long Beach and the Port of Los Angeles. It is also the home of
    one of the nation's busiest airports, Los Angeles International Airport
    (LAX).
        International trade is a major contributor to the area's economy.
    The $1.9 billion investment in the Alameda Corridor project represents
    a fraction of the investment being made in the region's ports and
    transportation facilities. The region looks forward to the completion
    of both the Alameda Corridor and Alameda Corridor East projects. Both
    projects will significantly increase the efficient and economic
    mobility of people and goods.
        The federal investment in the region's transportation system has
    resulted in an extensive freeway system and wide array of transit
    options such as Metro Rail, Metro Bus and Metrolink. This investment
    supports the MTA's efforts in providing a transit system that offers
    multi-modal transit options for its residents and visitors.
                    fiscal year 2000 appropriations request
        On behalf of the MTA, I respectfully submit the MTA's fiscal year
    2000 Transportation Appropriations funding requests:
        Metro Rail Red Line Segment 3 North Hollywood Extension.--The MTA
    is requesting $50 million of Section 5309 Fixed Guideway-Discretionary
    Funding for the construction of North Hollywood. This is the amount
    scheduled for fiscal year 2000 in the North Hollywood Full Funding
    Grant Agreement between the MTA and the Federal Transit Administration
    (FTA) and is also the amount recommended by the Administration's budget
    request for the New Starts Program.
        East Side and Mid-City Corridors.--The MTA requests $9 million of
    Section 5309 Fixed Guideway-Discretionary Funding for preliminary
    engineering, design and environmental work for fixed guideway projects
    in the East Side and Mid-City corridors. These funds will permit the
    MTA to complete the environmental work commenced with last year's
    earmark of $8 million for development of transportation alternatives in
    these corridors and should also fund a portion of the preliminary
    engineering work on any revised locally preferred alternatives selected
    by the MTA Board.
        Bus and Bus-Related Facilities Funding.--$15 million of Section
    5309 Bus and Bus Related Facilities Program Discretionary Funding will
    assist the MTA in complying with the Bus Consent Decree and
    implementing the MTA's Accelerated Bus Procurement Plan. These funds
    will help the MTA address the significant maintenance and fleet
    reliability problems created by the age of the existing fleet which
    includes approximately 1,100 vehicles, or 40 percent of the entire
    fleet, that exceed FTA replacement/retirement guidelines.
        Compressed Natural Gas (CNG) fueling facilities and Bus Technology
    Improvements.--$10 million in funding from the Section 5308 Clean Fuels
    Bus Program Funding will help the MTA fund the construction of
    additional CNG fueling facilities and bus technology improvements. The
    MTA's planned bus purchases are all CNG fueled buses. The MTA's fueling
    capacity will not meet the needs of the increased size of the CNG bus
    fleet. The MTA must therefore, construct several new CNG fueling
    facilities to meet this increased demand. In addition, the MTA is
    seeking funding for several important bus technology improvements.
                               the mta's on track
        1998 marked a year of accomplishments for the MTA. The Metro Rail
    Red Line projects to Hollywood and North Hollywood continued to move
    closer to completion. The MTA began implementation of bus system
    improvements to ensure that our Metro Bus system is more reliable.
        The MTA Board voted to suspend three rail construction projects,
    the Board approved its second balanced budget under CEO Julian Burke's
    leadership, the MTA's Restructuring Plan was approved by federal
    agencies, Congress allocated additional funds for construction of the
    North Hollywood Extension, East Side and Mid-City corridors and Metro
    Bus purchases, and the agency strengthened its partnership with
    Federal, State and local elected officials.
        In November, 1998 the MTA Board approved the CEO's recommendations
    from the Regional Transit Alternatives Analysis. The plan included $7.9
    billion for bus operations and purchases, $3.8 billion for rail/transit
    programs and $5.2 billion for highway-related projects through 2004.
    And in December 1998, the California Transportation Commission (CTC)
    voted to allocate $134 million to the MTA to complete the Metro Rail
    Red Line to North Hollywood. The CTC also programmed $151.1 million to
    accelerate replacement of aging MTA buses and designated $279.7 million
    for the construction of the Metro Blue Line to Pasadena once the new
    independent agency develops its own financial plan for the project.
        This year, the MTA is successfully implementing its Restructuring
    Plan and ensuring that adequate resources are available to meet its
    transportation demands. The MTA is also implementing its Accelerated
    Bus Procurement Plan to increase the size and reliability of its bus
    fleet and enhance the quality of bus service. We are exploring fixed
    guideway options to meet the transportation challenges of the East Side
    and Mid-City corridors; corridors in which subway projects were
    suspended and transportation remains a significant problem.
        On June 12, 1999 the MTA will celebrate the opening of Metro Rail
    Red Line Segment 2B to Hollywood. This will add five more stations and
    4.6 miles of subway to the operating Metro Rail System. The Vermont/
    Hollywood Segment will connect the areas of Wilshire Center and
    Downtown Los Angeles to the communities along the Long Beach Blue Line
    and Green Line corridors. This segment also enables Metro Bus
    passengers to connect with the Metro Rail System and the Metrolink
    commuter rail system.
                         metro bus system improvements
        The MTA Board of Directors and CEO Julian Burke have made bus
    system improvements our number one priority. MTA Board and MTA
    management continue to make improvements to our Metro Bus System while
    attempting to comply with the Federal Bus Consent Decree.
        We are taking the following three steps to ensure that we do a
    better job at delivering bus service to our customers:
      --we are improving bus fleet reliability through new bus purchases
            and better maintenance practices on our existing fleet;
      --we are relieving overcrowding by improving and adding service to
            countywide educational, employment and health care centers; and
      --we are ensuring that our buses run on time through technology
            improvements and better monitoring of our service operations.
        The MTA has committed over half of its resources to improving our
    service. Our fiscal year 1999-2000 annual bus operating budget is
    projected to be $670 million. Our plan for replacing more than half of
    the aging bus fleet is aggressive. Between 1998-2004, we will purchase
    2095 buses, 782 buses or a 60 percent increase. This purchase will
    replace over 1,200 buses between fiscal year 2000-2002. The MTA's bus
    purchases are second only to New York in terms of the number of new
    buses ordered and are 15 percent of the total amount of buses scheduled
    for manufacturing nationally over the next five years.
        The MTA is also converting 333 unreliable alcohol fuel buses to
    clean diesel. A decision verified by a state audit that concluded that
    this is both cost effective and environmentally sound. By December
    1999, these buses will be providing more reliable service on the road.
        By 2004, the MTA will have added 454 buses, 1.5 million service
    hours and spent over $630 million to improve service. These additions
    are larger than the San Diego Regional Bus System.
        In addition to improve fleet reliability, the MTA has increased the
    amount of bus service on Los Angeles County streets. The MTA added 9
    new lines with over 200,000 hours of new service hours that provides
    transportation to schools, hospitals and employment centers. Next year,
    an additional 200,000 hours will be added.
        As part of the Regional Transportation Alternative Analysis (RTAA),
    the MTA looked at the ``rapid bus program'' to operate countywide. The
    proposal includes a 16 line ``rapid bus'' plan to improve travel speed
    utilizing signal prioritization, low floor buses and limited stops. The
    three line demonstration program is scheduled for operation in 2000 and
    will serve the communities in the East Side, Mid-City and San Fernando
    Valley corridors.
        To ensure quicker boardings and transfers, the MTA is developing a
    ``universal fare system'' throughout Los Angeles County. The MTA has
    significantly increased its security coverage by dedicating Los Angeles
    Police and Los Angeles County Sheriff's Departments on Metro buses.
                                   conclusion
        Mr. Chairman and Committee Members, we thank you for your continued
    support and your leadership in resolving the significant transportation
    issues in our County. The federal investment in our vast array of
    transportation programs enhances economic competitiveness, promotes
    regional growth and moves thousands to work, educational, recreational
    and health centers.
        Support from Congress this year will move us closer to the
    development of a balanced world class transportation system for the
    21st Century. We urge the Subcommittee to fund the transportation
    appropriations bill at the TEA-21 levels. Again, we thank you for the
    opportunity to submit testimony on behalf of the MTA.
                                     ______

      Prepared Statement of Patrick R. Judge, President, Louisiana Public
                              Transit Association

        Thank you for the opportunity to present this statement to the
    subcommittee on behalf of the transit providers represented by the
    Louisiana Public Transit Association (LPTA). The LPTA is grateful for
    this committee's past support of projects and programs that help
    Louisiana's transit riders.
        The Louisiana Public Transit Association (LPTA) represents over 120
    transit providers in Louisiana including rural providers, specialized
    transit services, and the state's urban and suburban systems. The LPTA
    is requesting funding for a number of vital transit projects across
    Louisiana.
        The LPTA is coordinating this statewide effort to assist Louisiana
    transit systems in meeting their need for basic capital equipment, such
    as replacement buses and facilities. Due to the difficulty in obtaining
    section 5309 funding (formerly section 3) for bus and bus related
    facilities through the Federal Transit Administration (FTA) application
    process, the LPTA presents its statement to this committee in an effort
    to meet the state's long-standing transit needs.
        Before explaining our project requests, the LPTA wishes to thank
    the subcommittee for its role in appropriating $11,000,000 for the
    $53.4 million fiscal year 1999 request made by Louisiana's transit
    providers. That funding will go a long way in helping the Louisiana
    transit providers.
        The total Louisiana request for fiscal year 2000 under FTA section
    5309 bus and bus related funding is $35,700,000. The request is for 9
    projects of varying size and cost from eight transit agencies.
        Briefly, those requests are for:
        The City of Baton Rouge, Capitol Transportation Corporation (CTC),
    is requesting a total of $2,100,000 for ten (10) thirty-five foot
    buses. The new vehicles will allow CTC to begin to replace some of its
    fleet originally purchased in 1988. Most importantly, the new buses
    will allow CTC to begin to expand its service to seven days a week and
    until 11:00 p.m.
        Baton Rouge has been designated a non-attainment area under the
    Clean Air Act standards. The buses are critical to control costs, and
    are necessary to reduce the need for capacity intensive infrastructure
    projects in the Baton Rouge ozone non-attainment area. The service
    expansion program will also be utilizing congestion mitigation/air
    quality (CMAQ) funding.
        Jefferson Parish, which funds and oversees two private transit
    systems on each side of the Mississippi River, Louisiana transit on the
    east and Westside transit on the west, is seeking funding of $240,000
    for surveillance equipment. The installation of the video equipment is
    expected to prevent vandalism, and help the parish in defense of
    personal injury suits. While vandalism and crime is relatively low in
    the suburban systems, Jefferson transit recently experienced an
    increase in vandalism and personal injury suits.
        The City of Lafayette, through the City of Lafayette Transit System
    (COLTS) is seeking the remaining $1,000,000 of federal funds needed to
    reconstruct and reconfigure a site currently operating as a postal
    facility adjacent to an Amtrak station. The Lafayette multimodal
    transportation center will serve as the terminal for the COLTS system,
    a Greyhound station, and as an enhanced Amtrak stop for the Sunset
    Limited. The postal service will also continue to use a portion of the
    site. Further, the transportation center will be connected to the
    airport via a presently operating COLTS line. The $3,500,000 project
    already has been designated with a positive environmental impact
    statement and is in the design phase with architectural plans being
    over 75 percent complete. Construction is scheduled to begin in March
    of 1999.
        The fiscal year 1999, fiscal year 1998, and fiscal year 1997
    transportation appropriations bills designated $425,000, $750,000 and
    $752,000, respectively, towards the Lafayette Intermodal Terminal
    Project.
        The Louisiana Department of Transportation and Development,
    specifically the Office of Public Transportation, is in extreme need of
    another $2,500,000 of federal funding to allow the replacement of 62
    vans for both rural and specialized transit providers across Louisiana.
    The application for this funding has been pending before the FTA for
    nearly four years. All the vans to be replaced are inaccessible under
    ADA, exceed the useful life standard of 5 years by 2-4 years, and are
    far beyond the 100,000 miles cited as the mileage standard. Obviously,
    safety and dependability problems with vehicles of this size is a
    growing concern for the rural, elderly and disabled community across
    Louisiana. Additional demands for vans are expected to meet the demands
    of welfare reform.
        In order to meet the increasing demand for transit service in
    Louisiana's rural areas, the LPTA is requesting another $1,200,000 of
    section 5309 funding for expansion of the state's rural transit systems
    by 35 vehicles.
        Currently, many of the state's rural parishes do not have rural
    transit providers due to the LA DOTD's backlog of replacement needs for
    existing operators. In addition, many current rural operators need to
    expand to meet the demands of welfare-to-work and other basic
    transportation needs as the population expands and ages in those rural
    areas. The program would be administered through the existing rural
    transit program of the Louisiana Department of Transportation &
    Development.
        The City of Monroe, through the Monroe Transit System (MTS), is
    requesting funding to renovate, expand, and update their aging
    maintenance facility in the amount of $2,000,000 for the $2,500,000
    project. MTS will renovate the 15 year old facility by adding bays to
    be dedicated to conduct cost saving preventative maintenance checks and
    to equip the facility with modern and safer equipment. In addition, MTS
    is planning to reconfigure the facility to allow for drive-through
    capability and space for added inventory. The facility is MTS's only
    maintenance garage and the work proposed will make it much more
    efficient and economical to operate.
        The City of New Orleans, through the Regional Transit Authority
    (RTA), is requesting $24,000,000, which represents three years of
    payments under its innovative lease/maintenance program approved by the
    Federal Transit Administration in 1998. This program allowed the RTA to
    enter into a lease and maintenance agreement with a commercial leasing
    company for the lease and maintenance of 75 new buses. The agreement
    also allows the RTA to benefit from the recent changes that allow for
    the treatment of maintenance costs under a lease as an eligible capital
    expense. Penske truck leasing, through the RTA's RFP selection process,
    is the lessor of the buses as well as provides for the maintenance of
    the buses. The financing is by ABN-AMRO.
        With 451 vehicles, the RTA operates the largest system in Louisiana
    by providing service to nearly 180,000 riders per day in a city that is
    20 percent transit dependent. The buses leased will significantly
    reduce the operating expenses of the RTA and enhance its ability to
    provide dependable service.
        In addition, as you are probably aware, the RTA has pending two new
    start rail requests, one for the Canal Street corridor project (about
    to begin final design) for $91,000,000 and another $39,600,000 for the
    reconstruction of the fabled Desire streetcar line (MIS expected to be
    complete by July of 1999). Extensive detail of those projects will be
    provided by the RTA in separate testimony.
        The next request is on behalf of the City of Shreveport and its
    Sportran Transit System. Funding is requested in the amount of
    $2,300,000 to replace ten (10) transit buses that have exceeded their
    useful life of twelve years and are not accessible under ADA
    requirements. The new vehicles will lower maintenance costs and provide
    better passenger comfort. They will also allow Sportran to expand
    capacity to deal with welfare-to-work initiatives for evening service
    for late shift workers.
        The last request is on behalf of St. Tammany parish which is
    requesting $360,000 for a park and ride facility to be located in
    Mandeville, a city located within western portion of the parish. St.
    Tammany parish is located directly north and northeast of the city of
    New Orleans across Lake Pontchartrain. It is the fastest growing area
    of the region.
        The park & ride facility is to be located near the Lake
    Pontchartrain causeway and is expected to draw local residents which
    should help limit the expansive growth of traffic on the causeway. This
    project will be the second park & ride facility for the residents of
    St. Tammany parish.
        Finally, the Louisiana Public Transit Association urges and
    requests that Congress appropriates to the highest levels possible
    under the terms authorized under tea 21. The administration's proposal
    to increase funding for transit, even beyond the guaranteed levels, is
    very much supported by the LPTA. The increases are sorely needed by all
    of transit. The LPTA sincerely hopes that Congress follows through on
    that promise made within TEA 21 by appropriating to the levels
    authorized.
        Thank you for your time and consideration with these requests on
    behalf of Louisiana's transit systems.
        For your reference, attached you will find additional information
    on the transit systems of Louisiana.
                                    summary
        New Start Rail, 49 U.S.C. Section 5309 (formerly section 3)

                                                              Appropriations
    New Orleans Canal Street corridor project...............     $91,000,000
    New Orleans Desire Street streetcar.....................      39,600,000

        Bus and bus related facilities, 49 U.S.C. Section 5309 (formerly
    section 3)

    ----------------------------------------------------------------------------------------------------------------
                                                                        Federal \1\        Local           Total
    ----------------------------------------------------------------------------------------------------------------
    Baton Rouge: Ten (10) thirty-five foot buses....................      $2,100,000        $525,000      $2,625,000
    Jefferson parish: Surveillance equipment........................         240,000          60,000         300,000
    Lafayette: Multimodal transportation center.....................       1,000,000         250,000       1,250,000
    Louisiana Department of Transportation & Development, public
     transportation:
        Replace 62 vans (rural & E&H)...............................       2,500,000         400,000       2,900,000
        Rural transit expansion (vans)..............................       1,200,000         300,000       1,500,000
    Monroe: Renovate maintenance facility...........................       2,000,000         500,000       2,500,000
    New Orleans: Lease maintenance program (3 years)................      24,000,000       6,000,000      30,000,000
    Shreveport:; Replace 10 buses...................................       2,300,000         470,000       2,770,000
    St. Tammany parish: Mandeville park and ride facility...........         360,000          90,000         450,000
                                                                     -----------------------------------------------
          Totals....................................................      35,700,000       8,595,000      44,295,000
    ----------------------------------------------------------------------------------------------------------------
    \1\ Amounts to be prorated should full funding not be realized.

                                     ______

    Prepared Statement of Robert D. Miller, Chairman, Metropolitan Transit
                          Authority, Harris County, Tx

                                  introduction
        My name is Robert D. Miller. I am Chairman of the Board of
    Directors of the Metropolitan Transit Authority of Harris County,
    Texas, more commonly known as Houston METRO. Last year I made my
    initial presentation to you on behalf of METRO and I am pleased to
    return this year to submit METRO's fiscal year 2000 appropriations
    request.
        1998 was a year of continued accomplishments for Houston METRO--
    METRO posted record ridership, rolled out a fleet of extremely popular
    rubber-tired trolleys circulating throughout Houston's burgeoning
    downtown area, undertook a Major Investment Study of transit options
    along one of the most heavily traveled corridors in the service area,
    and accelerated construction of our Regional Bus Plan projects.
        1999, our twentieth anniversary as the Houston region's public
    transit agency, promises further additions to the list of successes and
    positive changes in the organization's management and programs.
        One of METRO's most significant changes was occasioned by the
    retirement last December of our long-time General Manager, Robert
    MacLennan. Bob was well known to many of you and well respected in the
    industry for his knowledge, integrity and pioneering efforts in the
    application of intelligent vehicle technology to transit. Replacing Bob
    MacLennan was no easy task but I am pleased to report to you that we
    were able to entice the person I consider the premiere transit
    executive in the nation to assume our chief executive position--Ms.
    Shirley A. DeLibero. Ms. DeLibero brings many years of hands-on transit
    experience to our agency and a businesslike approach to its management.
    In fact, Ms. DeLibero has assumed the title of President & Chief
    Executive Officer, which reflects her view that transit agencies should
    be run like businesses. Ms. DeLibero is no stranger to the halls of
    Congress. She has worked in the transit industry for over twenty years,
    most recently as head of New Jersey Transit. This year she also assumed
    the role of chair of the American Public Transit Association. As METRO
    continues its growth as a multi-dimensional regional transportation
    provider, Ms. DeLibero brings a steady, experienced and energetic work
    ethic to meeting the challenges of serving the transit needs of the
    Houston region as we move into the next millennium.
        Let me now address the reason for my presentation and that is to
    bring forward METRO's two-part request for fiscal year 2000 funding for
    our Regional Bus Plan and our Advanced Transit Program.
    Regional Bus Plan--$62.5 million
        The Regional Bus Plan, initially adopted by METRO's Board of
    Directors in 1992 as the comprehensive public transportation program
    for the region, continues toward its objective of implementing
    approximately 40 individual projects whose independent utility provide
    incremental improvements in facilities and services as projects are
    completed.
        The success of this approach is illustrated by the continuing
    escalation in regional transit ridership and high occupancy vehicle
    lane usage. For example, in 1998 METRO experienced its second
    consecutive year of record ridership with 111.5 million total system
    passenger boardings (96.3 million passengers on buses and 15.2 million
    trips via carpools, vanpools and non-METRO buses on our high occupancy
    vehicle lane network). Further, METRO continues to provide high quality
    service to its patrons with special needs. The METRO Board of Directors
    this year authorized expansion of the area served by our paratransit
    service from 571 square miles to 780 square miles and the addition of
    26 paratransit vehicles to the current fleet of 110 vehicles. When
    fully implemented, this will increase METRO's paratransit capacity from
    its current 1 million to 1.7 million annual trips.
        The Full Funding Grant Agreement executed by METRO with the Federal
    Transit Administration for the Regional Bus Plan contemplates a $1
    billion program with $500 million in federal funding and a matching
    $500 million provided by METRO from local resources. The
    Administration's fiscal year 2000 budget provides $62.5 million for the
    Regional Bus Plan. This amount will fully satisfy the $500 million
    federal commitment included in the Full Funding Grant Agreement. METRO
    remains committed to its full $500 million share.
        Overall, construction of the Regional Bus Plan has been a success.
    We have worked efficiently and have tried to minimize service
    disruption during construction. We are getting largely positive
    responses from our customers regarding road improvement, HOV lanes and
    bus facilities. It cannot be avoided, however, that a project this
    extensive, consisting of so many individual projects constructed over
    more than a decade, would require certain adjustments. These
    adjustments are required to accommodate changes in regional development
    resulting in a small number of individual project schedules and budgets
    being altered. An example of these changed circumstances is the
    approval by area voters and the subsequent construction of a new major
    league baseball stadium in the Houston central business district. Along
    with a City of Houston project to promote central business district
    retail and residential redevelopment, the new stadium has required
    METRO to adjust a portion of its Downtown Transit Streets project, an
    element of the Regional Bus Plan. The relocation of Continental
    Airlines' corporate headquarters to downtown Houston and other
    corporate and residential development has also resulted in revised
    transit service requirements and a corresponding rearrangement of
    transit street reconstruction. These are positive changes for transit
    and demonstrate the flexibility of the Regional Bus Plan to accommodate
    them. METRO has responded to these changes by proposing an amendment to
    the Regional Bus Plan Full Funding Grant Agreement to the Federal
    Transit Administration--adding, deleting and adjusting individual
    projects to meet these increased needs. Approval of the proposed
    amendment is pending.
        While most of the changes to the Regional Bus Plan have been
    positive, METRO has incurred some increases in projects costs due to
    design and construction delays resulting from the lawsuit challenging
    METRO's federally required and approved Disadvantaged Business
    Enterprise (DBE) program. This lawsuit was completely beyond METRO's
    control. When a Houston Federal District Court enjoined METRO from
    utilizing its DBE program in 1996, a suspension of federal grant
    funding by the Federal Transit Administration resulted. A seventeen-
    month stalemate existed until the Federal Transit Administrator issued
    a DBE program waiver. During this period, METRO devised a replacement
    Small Business Program with a 35 percent annual small business
    utilization goal, with the approval of the Federal Transit
    Administration. In fiscal year 1998, its first year of operation, the
    METRO Small Business Program achieved a 34 percent small business
    participation rate, with $39.1 million in contracts awarded. Congress
    then provided long-term relief through a specific provision in the
    Transportation Equity Act for the 21st Century (TEA 21) exempting
    agencies such as Houston METRO, which are subject to court order
    prohibiting compliance with the DBE requirement from having to comply
    as a condition of receiving federal transit or highway funds. In the
    meantime, however, METRO's design and construction efforts were halted
    while design and construction costs in Houston escalated rapidly due to
    the vigorous economy, which produced a very active local construction
    market. As a result, some project budgets have had to be increased and
    construction schedules extended to overcome the delay.
        Overall, the total cost of the Regional Bus Plan remains a $1
    billion undertaking with equal funding to be provided by the federal
    government and METRO. Some projects have been adjusted in scope or
    deleted and others substituted to meet the changed conditions.
    Projected transit benefits from the changes are equal to or greater
    than for the original projects. We look forward to a speedy and
    positive response from the Federal Transit Administration on these
    proposed changes.
        Because the Regional Bus Plan is a dynamic undertaking capable of
    positively responding to opportunities for improvement as it is
    developed, future events may dictate additional changes as we
    transition to the next phase of our transit system development. I can
    assure this Committee, and our record will support my assertion, that
    METRO will continue to effectively manage these projects to implement
    them on schedule and within budget while making appropriate adjustments
    as differing needs arise.
        My first of two requests of you today is to appropriate $62.5
    million for fiscal year 2000 to complete METRO's Regional Bus Plan.
    Advanced Transit Program--$20 million
        With our Regional Bus Plan almost complete, METRO has begun to
    focus its energies on the future transportation needs of the greater
    Houston region. METRO's planning to meet the transit needs of the
    Houston region beyond the 2010 horizon included in the Regional Bus
    Plan is embodied in what we have designated our ``Advanced Transit
    Program.'' The needs are great. The Advanced Transit Program positions
    METRO to serve a region that is projected to grow in population from
    approximately 3 million in 1990 to 3.8 million in 2020, with employment
    projected to increase from 1.5 million to 2.5 million and the number of
    households to increase from 1 million to 1.5 million. While existing
    major employment centers are projected to show modest growth, the
    suburban areas are projected to show substantial growth--most in
    multiples of their current level. These projections pose challenges to
    mass transit that METRO, with the support of this Committee, stands
    ready to address.
        In fiscal years 1998 and 1999, METRO received approximately $3
    million in appropriations for the Advanced Transit Program. These funds
    have been applied toward a Major Investment Study which is currently
    being concluded. Under evaluation in this Major Investment Study are
    various transit alternatives, including a starter light rail line and
    high capacity buses, to provide more efficient service in a seven mile,
    Downtown-Museum District-Texas Medical Center-Astrodomain corridor
    currently containing a number of METRO's most heavily utilized bus
    routes. A second ongoing Major Investment Study in a different corridor
    is being locally funded. We will continue to work closely with this
    Committee to update you on the results of the Downtown-to-Dome Major
    Investment Study and our locally-preferred alternative. As with the
    Regional Bus Plan, the Advanced Transit Program will incorporate
    multiple projects, each with independent utility, which will enhance
    METRO's ability to meet the region's varied transit needs.
        METRO was disappointed that the Administration's budget did not
    provide any Advanced Transit Program funding, however, this Committee
    and the Congress have given METRO a solid vote of confidence the past
    two years by funding the initial stages of the Advanced Transit
    Program. We expect that funding to continue for Advanced Transit
    Program development as we move from Major Investment Studies into
    preliminary engineering and design of the high priority Advanced
    Transit Program projects. I cannot over estimate the importance of the
    Advanced Transit Program projects to the continued economic vitality of
    the greater Houston area. As many of you have seen first-hand,
    Houston's growth as a major business center has necessitated new
    transportation solutions to address projected transportation needs.
        My second request of you today is to appropriate $20 million in
    fiscal year 2000 for continuation of METRO's Advanced Transit Program.
                                   conclusion
        As I related to you last year and am pleased to be able to
    reiterate this year, METRO's transit program is an increasingly
    significant component in meeting the region's mobility needs. The
    substantial ridership increases we are experiencing in virtually every
    element of our service pose challenges we are most happy to address.
    The flexibility of our program permits us to adapt quickly to these
    challenges. The federal investment in the Houston region's mass transit
    system continues to yield large dividends by effectively and
    efficiently improving public transit services. METRO remains on a sound
    financial footing and is committed to fulfilling its obligations to pay
    the local share of its federally funded projects and any additional
    operating costs created by the service increases.
        METRO, thanks in large part to this Committee's continued support,
    is capable of and poised to move the greater Houston region into the
    next century with a first class mass transportation system.
        Thank you for the opportunity to offer these remarks. METRO is
    prepared and looks forward to responding to any questions the Committee
    may have.
                                     ______

     Prepared Statement of the New York State Department of Transportation

        The New York State Department of Transportation (NYSDOT)
    appreciates the opportunity to present testimony on the fiscal year
    2000 Transportation appropriations. New York has a truly intermodal
    transportation system. NYSDOT has responsibility for a $1.7 billion
    annual highway construction program, and a $1.6 billion annual transit
    operating and capital assistance program. NYSDOT is currently
    implementing balanced multi-year highway and mass transportation
    capital programs valued at $24 billion, with each receiving nearly $12
    billion in federal and State funds. In addition, NYSDOT carries out
    planning, financing and oversight of rail passenger and freight,
    aviation and water borne transportation in the State.
        New York State has made a strong commitment to its transportation
    systems. Federal funds comprise about 40 percent of the State's highway
    funding and 25 percent of transit capital spending, making New York one
    of the highest self-help states in the nation. Further, New York State
    has made a strong commitment to utilizing all transportation modes
    efficiently. As an example, Governor Pataki recently announced an
    historic agreement with Amtrak to invest up to $185 million in the
    State's passenger rail system over five years. This agreement, part of
    a larger plan to invest in high speed rail in New York State, will make
    investments to upgrade service to 125 mph and increase service
    frequency.
        Despite these investments, however, New York's infrastructure,
    typical of the Northeast, is older than most, very heavily utilized and
    in need of modernization to attain the standards of other regions in
    the nation. The State needs your continued support in securing federal
    assistance, which is so vital to its ability to meet its transportation
    needs.
        Please consider the following views:
     full funding for transportation programs at the levels authorized in
                                     tea-21
        The Transportation Equity Act for the 21st Century (TEA-21)
    provides for historic levels of investment in surface transportation
    systems, recognizing the critical role that infrastructure plays in the
    nation's economic health and growth. Yet even with these significant
    investments, vast needs will remain unmet. The United States Department
    of Transportation has estimated that annual investments of $46.1
    billion in capital projects are needed just to maintain the nation's
    highways and bridges and $9.7 billion is needed to maintain the current
    conditions of transit systems. To improve these systems to satisfactory
    conditions is estimated to cost annually $79.6 billion for highways and
    bridges and $14.2 billion for transit systems.
        TEA-21 struck a delicate balance between the needs of highways and
    transit, guaranteeing that money paid into the Highway Trust Fund will
    be used for surface transportation improvements. New York is pleased
    that Congress has made this commitment to the nation's infrastructure,
    and asks that you preserve the funding structure established in TEA-21,
    and fully appropriate funds for transportation programs at the maximum
    levels authorized in TEA-21.
             full funding for tea-21's transit projects & programs
        New York is pleased that Congress recognized the critical
    importance of transit to the nation by providing significant increases
    in transit funding in TEA-21. Transit provides a lifeline to millions
    of riders nationwide each day. Public transportation in New York State
    accounts for nearly one-third of all transit trips in the nation. Each
    day, more than 25 percent of New Yorkers across the State use public
    transportation to travel to work--the highest transit ridership in the
    nation. Transit provides mobility to New York's citizens, from the very
    urban areas like New York City, to the smallest upstate communities.
    Transit is also a significant employer in New York State, providing
    employment to more than 70,000 residents across the state.
        New York State has an historic and continued commitment to public
    transportation funding. New York State provides over $1.5 billion
    dollars each year in operating assistance to its transit agencies. New
    York City's Metropolitan Transportation Authority (MTA) has one of the
    most stable funding packages in the country, with capital financing
    plans dating back to 1982. The most recent and still current capital
    program provides for over $12 billion in capital investments. More than
    70 percent of this investment is from non-federal sources. Even with
    this commitment, however, New York State will be unable to advance
    critical New Start and bus initiatives without Federal support, as
    provided in TEA-21.
    New Starts
        New York is pleased that Congress recognized the importance of New
    York's MTA Long Island Rail Road (LIRR) East Side Access project in TEA
    21 by authorizing a minimum of $353 million for the project. In
    addition, TEA-21 designates that this project be given priority
    consideration for funds made available under the FTA New Start program.
        The Pennsylvania Railroad Station is the busiest train station in
    North America, accommodating a train every minute during rush hour, and
    handling approximately 140,000 Amtrak, Long Island Rail Road and New
    Jersey Transit passengers every weekday morning. Currently, there is
    significant crowding at Pennsylvania station, and nearly 50,000
    commuters are forced to take two additional subway trips to back track
    from the west side to the east side of Manhattan to get to work, adding
    more than 30 minutes to their daily commute.
        The LIRR East side access project will dramatically reduce crowding
    in Pennsylvania Station by providing one seat service from points on
    Long Island to East Midtown. This project will increase ridership by an
    estimated 109,000 weekday passengers, while saving 5.3 million hours of
    travel time annually for commuters. Further, the project will allow
    full utilization of the significant federal investment already made in
    the 63rd Street Tunnel, and provide a stimulus for economic growth and
    development.
        This year, New York is requesting $159 million to progress this
    project. New York urges you to support this critical project.
    Bus & Bus-Related Requests
        TEA-21 provides nearly $40 million to support New York State bus
    and bus-related projects in fiscal year 2000. These projects will
    provide valuable assistance in replacing overage buses, upgrading to
    clean fuel fleet equipment, and improving and expanding transit
    facilities. In addition to the funds provided in TEA-21, New York is
    requesting additional funds to support these initiatives. New York
    seeks your support for these transit requests.
    Other Transit Programs
        TEA-21 created several new programs including a $1.0 billion Clean
    Fuels program to assist transit operators in the purchase of low-
    emission buses in air-quality non-attainment areas, and the $750
    million Jobs Access and Reverse Commute program to develop
    transportation services to connect welfare recipients and low income
    individuals to employment and support services. New York asks that you
    provide full funding for these programs, and allow for competitive
    selection of grant recipients as provided in TEA-21.
     support intercity passenger rail and full funding for high speed rail
                               programs in tea-21
        Intercity passenger rail is a unique asset critical to the mobility
    and economic well being of New York State and the nation. New York
    commends the subcommittee for its past support of Amtrak and high speed
    rail investment, and urges your continued support of Amtrak in fiscal
    year 2000 at a level consistent with the Administration's proposed $571
    million capital grant. This assistance will help Amtrak continue its
    progress on the glidepath to operating self-sufficiency by 2002.
        Intercity passenger rail service investments beyond Amtrak capital
    assistance are also important. TEA-21 continues several programs that
    provide funding for high speed rail projects, including the Next
    Generation High Speed Rail program, and the program to eliminate
    highway-railroad grade crossing hazards in designated high-speed rail
    corridors, which includes the Empire Corridor in New York. New York
    urges your support of these programs.
        New York is committed to improving passenger rail service within
    the State and implementing high speed rail service in an incremental
    and achievable manner. As part of NYSDOT's larger high speed rail plan,
    in September 1998, Governor Pataki announced an historic agreement with
    Amtrak to invest up to $185 million in the State's rail system over
    five years to provide faster, more convenient passenger train service
    in New York. This partnership initiative will allow passengers to
    travel from Albany to New York City in less than two hours, and will
    reduce travel times between New York City and Buffalo through
    investment in five Turboliner trains and various infrastructure
    improvements along the Empire Corridor. Though this Memorandum of
    Understanding (MOW) represents a significant investment on the part of
    New York State and Amtrak, it is only part of a larger high speed rail
    plan. New York is actively pursuing several important rail projects
    pursuant to its larger high speed rail plan that are not funded within
    the Amtrak MOU.
        New York State is seeking support for a comprehensive grade
    crossing risk reduction program along the high speed Hudson Line of the
    Empire Corridor between Schenectady and New York's Pennsylvania
    Station. This program includes grade crossing eliminations, separations
    and high technology improvement projects to assist in bringing speeds
    to 125 mph and to improve safety. New York State is also seeking
    funding for two rail-related studies to further progress work in the
    Corridor. These important projects will complement the State's historic
    funding agreement with Amtrak, increase safety in the corridor and
    improve its ability to implement high-speed rail service.
        New York State seeks your support in securing $6.25 million in
    funding for these important initiatives.
        The New York State Department of Transportation thanks you for this
    opportunity to present testimony. NYSDOT appreciates your dedication to
    and support of the nation's transportation systems.
                                     ______

    Prepared Statement of Marc V. Shaw, Executive Director, New York State
                     Metropolitan Transportation Authority

        Mr. Chairman, members of the subcommittee, I am Marc Shaw,
    executive director of the Metropolitan Transportation Authority in New
    York. Thank you for having me here today to speak about fiscal year
    2000 transportation appropriations and the MTA's needs.
        I'd like to set the stage for my remarks by telling you a bit about
    the MTA.
        The MTA is the largest and most complex intermodal transit provider
    in the country, serving a 14 million person, 4,000 square mile service
    area that covers two states, 14 counties and dozens of cities, villages
    and towns.
        Between our MTA New York City Transit (NYCT) and MTA Long Island
    Bus (LIB) subsidiaries, we operate 6,000 subway cars and over 4,500
    buses. In addition, we operate nearly 2,000 rail cars on the nation's
    first and second largest commuter railroads, MTA Long Island Rail Road
    (LIRR) and MTA Metro-North Railroad (MNR).
        We are also the steward of Robert Moses' legendary triborough
    bridge and tunnel authority, now MTA bridges and tunnels, operating 9
    bridge and tunnel facilities whose toll revenues from 800,000 cars a
    day, help provide stable local support for the operation of our far
    reaching transit system.
        All told, we carry a quarter to one third of all transit riders in
    the country--over 6.2 million people a day--many of whom use more than
    one of our modes in their daily journey.
        Our annual operating budget is approximately $5.5 billion and we
    are currently reinvesting in our systems' capital infrastructure at a
    historic rate of over $2.2 billion a year.
        Without MTA services, congestion would paralyze the most densely
    populated region in the country; another 1.3 billion gallons of
    imported gas would have to find its way to our shores each year; the
    L.I. Expressway would need 15 more lanes to handle the additional
    traffic; the air would be a lot dirtier and regional commerce would
    grind to a halt. Given the significant presence of national and
    international finance, insurance and general business in Manhattan
    alone, there is little question the national economy would feel the
    pain.
        As you know, that nightmare almost happened at the end of the
    1970s. New York's transit system became the national symbol of urban
    decay. But subway cars covered in graffiti were just the outward
    manifestation of deeper problems that faced a system on the verge of
    collapse.
        The problems stemmed from a lack of investment--and commitment--on
    the part of all levels of government. And while that sobering nightmare
    has by and large been erased over the past decade and a half, a happy
    ending to the story still lies ahead.
        The success began in 1982 when the MTA began work on a five year
    strategic capital rebuilding program--the largest non-federal public
    works renewal project in the country. Its goal was to rebuild the
    critical parts of our system to a state-of-good-repair. It was clear
    from the outset that this would take several decades. We are barely
    half of the way along the journey.
        Four successive five year plans have replaced or overhauled over 97
    percent of our subway cars and hundreds of commuter rail cars. We
    rebuilt 93 percent of our 700 miles of subway track and dozens of our
    468 subway stations. We rebuilt fan plants, pumps, signals and switches
    that in many cases hadn't been touched since their once private owners
    built them in the early part of the 20th century.
        The results are tangible for the millions who use our system daily.
    Subway cars now average over 80,000 miles between breakdowns--13 times
    that in 1982. Red flag track areas that once limited trains to less
    than 5 miles an hour are faint memories. Derailments, which averaged
    more than one a month in 1980 are almost non-existant. Three or four
    fires a week are now three or four a year.
        Rails and ties along the 595 miles of LIRR track that are part of
    the nation's oldest commuter railroad have been replaced. And from the
    ashes of the old Penn Central railroad's 744 miles of decrepit rail
    lines and exhausted equipment, we created the nation's second largest
    commuter railroad, Metro North.
        We have thus far invested a total of over $30 billion. And while
    that may sound like a tremendous amount of money--and it is--with an
    infrastructure base estimated as being worth as much as $375 billion,
    it is a relatively modest reinvestment.
        Despite our many visible successes, the job is nowhere near
    complete. We still have a huge agenda of unfinished capital needs to
    return our system to a state of good repair--needs estimated at another
    $30 billion between now and 2011.
        While some of those needs will be addressed with state and local
    dollars, we will continue to rely on federal participation similar to
    that we've had over the past two decades--roughly 28 percent of our
    investment. Let me tell you where we hope to employ federal dollars in
    the future.
        Thousands of the cars we rebuilt in the early 1980s have reached
    the end of their extended lives. Between now and 2011, over $5.2
    billion will be needed simply to replace this rolling stock.
        We currently have nearly 1,300 subway cars on order for New York
    City transit and over 200 rail cars for Long Island rail road and Metro
    North railroad.
        Stations, one of the most visible parts of our system, require $2.3
    billion in restorative construction by 2009.
        Shops, car-maintenance barns and depots, many of which are ill-
    equipped to care for modern rolling stock must be brought up to current
    standards at an estimated cost of $1.8 billion by 2011.
        signals that are in many cases more than 50 years old need to be
    replaced at a cost of $2.9 billion between now and 2009.
        Other parts of our infrastructure, such as the superstructures that
    support the subway's tunnels and ELS; viaducts that carry LIRR and MNR
    commuter trains; fans that remove smoke in emergencies; pumps that keep
    tunnels from flooding; outdated electrical, tunnel lighting and
    communications systems, are all expected to cost another $5.6 billion
    by 2011.
        These are investments critical to greater efficiency, safety and
    reliability, and ones that will pay dividends for years to come.
        My testimony thus far has concentrated on the investments we've
    made and need to make to maintain or restore existing facilities. But
    we are also very sensitive to emerging transit needs that make sense
    for our service area. The 63rd Street tunnel, a major joint NYCT and
    LIRR system expansion, has been progressing in a methodical fashion for
    the better part of the last two decades. It is about to begin
    delivering on its original promise.
        With the 63rd Street-Queens connector, a $612 million ISTEA
    authorized ``new start'' project that connects the tunnel to the Queens
    Boulevard ``E'' and ``F'' lines nearing completion in 2001, we will
    dramatically reduce pressure on the most crowded subway line in the
    country. The project, which the MTA overmatched with a 50 percent local
    share, is on time and on budget.
        The next step is to connect the lower level of the 63rd St. tunnel
    to Grand Central Terminal on the west and the LIRR main line on the
    east. The MTA's ``LIRR east side access'' (ESA) project, a TEA-21
    authorized ``new start'' project for which Congress appropriated $20
    million in fiscal year 1998 and $24 million in fiscal year 1999, is
    that next step.
        For fiscal year 2000 we are seeking $159 million to allow us to
    complete ESA final design and move into the active construction phase.
        On day one, ESA will benefit more riders than any other new start
    project in the nation, saving some 50,000 riders who now backtrack to
    the east side of Manhattan from Penn Station on the west side, an
    average of 36 minutes of travel time each day. That's about three hours
    per week. ESA will also ultimately allow for 172,000 trips per day into
    and out of the east side of Manhattan, the nation's largest central
    business district.
        We are painfully aware that despite significant increases in the
    new start funding pot, the number of projects competing for those
    dollars has never been greater. We fully believe, however, that even
    given the worthy competition that exists, the ESA project will produce
    immediate tangible benefits that make it arguably the most attractive.
    Based on our past and current record in terms of ridership growth,
    strong project management and substantial and stable local commitment,
    any federal dollars you could provide would be an extremely cost
    effective investment.
        There is another MTA system expansion issue authorized in TEA-21--
    the preliminary study and design of a solution to the overcrowded
    Lexington Avenue line. The MTA has studied a number of alternatives
    over the last few years as part of its ``Manhattan east side
    alternatives'' (MESA) major investment study.
        MESA proposed an alternative that would require new subway
    construction along Second Avenue. The next step is to further study the
    alternative, including the completion of a final environmental impact
    statement (FEIS). In accordance with a $5 million TEA-21 authorization,
    we are requesting the full amount so we can move forward with this
    effort.
        The MTA is also a leader in the industry's efforts to develop new
    clean fuel equipment and technology. With your help in providing $10.8
    million from sec. 3007, the clean fuels for transit portion of TEA-21,
    MTA Long Island bus will purchase an additional 38 buses, making it the
    largest CNG fleet east of the Mississippi. We also ask that $9.9
    million from the same pot be provided to complete the conversion of MTA
    New York City transit's coliseum depot in the Bronx to be clean fuels
    compatible. This depot is in a severe non-attainment area and its
    conversion is a critical element in improving regional air quality.
        In conclusion, we commend Congress for having the forsight last
    year to take the steps it did to address the nation's transportation
    needs through the thoughtful passage of TEA-21. As this subcommittee
    reviews appropriation levels for TEA-21's transit title, we ask that
    you work toward finding the resources to fund it at the fully
    authorized $6.8 billion level.
        We hope that this subcommittee's actions will allow us to continue
    to provide a vital contribution to attaining national energy, economic,
    environmental goals, and most of all--the goal of efficiently moving
    people!
        We need your help. Thank you.
                                     ______

      Prepared Statement of the Niagara Frontier Transportation Authority
                                     (NFTA)

                                  introduction
        The Niagara Frontier Transportation Authority (NFTA) appreciates
    the opportunity afforded by the Subcommittee on Transportation and
    Related Agencies Appropriations to present its requests for
    transportation appropriations in federal fiscal year 2000.
        The Niagara Frontier Transportation Authority (NFTA) is a regional
    multi-modal transportation authority responsible for air, water and
    surface transportation in Erie and Niagara Counties. NFTA businesses
    include a bus and rail system, a paratransit system, two international
    airports, a small boat harbor and transportation centers in Buffalo and
    Niagara Falls. We take pride in the role that we play in making our
    community comfortably accessible and in fostering a vital economic and
    job climate.
        The NFTA owns and operates the Buffalo Niagara and Niagara Falls
    International Airports. These airports are used by 10,000 passengers
    each day. The NFTA bus and rail system carries 95,000 riders daily
    throughout our service area. NFTA transportation centers in Buffalo and
    Niagara Falls serve as the cores of regional and inter-city bus
    service. Additionally, NFTA manages various properties in Erie and
    Niagara counties which generate financial resources to support our core
    transportation businesses.
        As the principal transportation resource in the community, the
    mission of the NFTA is to serve our customers and the general public by
    optimizing mobility through cost effective, quality transportation
    services and facilities.
        In support of the NFTA transportation mission, NFTA respectfully
    requests Committee consideration of the following Requests for
    Provisions in Federal Fiscal year 2000 transportation appropriations.
                        project appropriations requested
    Federal Aviation Administration Airport Improvement Program
        Continue to provide priority for discretionary fund applications
    related to the acquisition and demolition of the Buffalo Airport Center
    for safety improvements.
        Assign priority to discretionary funding applications including:
    expansion of the east concourse of the terminal building, construction
    of apron associated with the terminal expansion; and completion of the
    circulatory road system at Buffalo Niagara International Airport.
        Continue to provide priority for discretionary funding applications
    related to taxiway ``D'' at Niagara Falls International Airport.
    Federal Transit Administration Bus Capital
        Appropriate $6 million under Section 5309 for the purchase of 28
    new transit buses. The requested provisions are described in the
    following text.
    Buffalo Niagara International Airport
        NFTA requests continued priority for discretionary fund
    applications related to the acquisition and demolition of the Buffalo
    Airport Center (BAC) for safety improvements. In 1999, the Committee
    provided priority to these projects. As background, an application in
    the amount of $24,585,837 for acquisition and demolition of the BAC was
    submitted to the FAA on February 26, 1999. NFTA requires $13.5 million
    from fiscal year 1999 Airport Improvement Program (AIP) appropriations.
    Phase I funding in the amount of $7.6 million was awarded from the
    Airport Improvement Program on March 22, 1999. NFTA appreciates the
    priority provided by the Committee that led to this grant award. As AIP
    authorization is extended beyond March 31, 1999, NFTA will pursue the
    remaining $5.9 million in 1999. Continuing this background discussion,
    NFTA needs $11,085,837 under the Airport Improvement Program in fiscal
    year 2000 to complete the acquisition and demolition of the Buffalo
    Airport Center.
        NFTA requests priority for discretionary funding applications
    including: expansion of the east concourse of the terminal building by
    a minimum of four (4) gates, construction of apron associated with the
    terminal expansion; and completion of the circulatory road system at
    Buffalo Niagara International Airport. These infrastructure investments
    will permit NFTA to continue its efforts to attract low cost air
    carriers to the Buffalo Niagara metropolitan region. As background,
    individual project requirements and fiscal year needs are as follows:
        1. Expansion of the east concourse of the terminal building Federal
    fiscal year 2000, $10,368,000.
        2. Construction of apron associated with the terminal expansion
    Federal fiscal year 2000, $4,320,000.
        3. Circulatory road system completion Federal fiscal year 2000,
    $2,160,000.
    Niagara Falls International Airport
        NFTA requests continued priority for discretionary funding
    applications related to taxiway ``D'' at Niagara Falls International
    Airport. As background, in 1998 the Committee provided such priority
    and $1.8 million was awarded from the Airport Improvement Program (AIP)
    for the construction of an extension to the taxiway. Additionally,
    $675,000 was awarded from the 1999 AIP on March 22, 1999 to complete
    funding for the taxiway extension project. NFTA appreciates the
    priority provided by the Committee that led to this grant award. In
    support of this infrastructure investment, NFTA needs $832,500 from the
    fiscal year 2000 AIP appropriation to rehabilitate the existing taxiway
    segment.
    Purchase 28 Replacement Transit Buses
        NFTA requests $6 million for the purchase of 28 replacement transit
    buses. The vehicles will replace buses placed in service in 1986 and
    will be used to provide core transit system service in conjunction with
    Hublink system infrastructure.
                                     ______

    Prepared Statement of Paul P. Skoutelas, Chief Executive Officer, Port
                 Authority of Allegheny County, Pittsburgh, PA

        Chairman Shelby and members of the subcommittee, I am pleased to
    submit testimony on behalf of Port Authority of Allegheny County, the
    principal public transportation provider in the Pittsburgh urbanized
    area. Port Authority carries 75 million public transportation riders
    annually within a 730 square mile area through a variety of services
    including bus, busway, light rail, incline, and the nation's largest
    specialized paratransit system.
        As Chief Executive Officer of Port Authority of Allegheny County,
    it is my privilege to present this testimony regarding Port Authority's
    request for fiscal year 2000 transportation appropriations earmarks for
    the North Shore Connector and the stage II light rail transit projects,
    which are major components of Port Authority's ``Rail 21'' program, and
    for the purchase of buses.
        For fiscal year 2000, Port Authority is requesting $40 million of
    section 5309 ``new start'' funds for the stage II project and $24
    million for the North Shore Connector. Port Authority is also
    requesting a section 5309 ``bus/bus facility'' earmark of $20 million
    to be used to acquire approximately 83 buses in fiscal year 2000.
    Procurement of new buses will enable Port Authority to continue
    modernizing its fleet and ensure the continuation of quality transit
    service to its customers.
                   rail ``21'' program north shore connector
        The heart of the Pittsburgh metropolitan region is its golden
    triangle, the center of business, cultural and sporting events,
    tourism, and government services. In order to accommodate and
    facilitate its continued growth and vitality, there is pressing need to
    better integrate the North Shore area with the golden triangle by
    providing much improved transit service along the downtown's Allegheny
    River corridor. This corridor encompasses the North Shore, cultural
    district and strip district areas of downtown and is the region's
    premiere tourist destination with Three Rivers Stadium (the home of the
    Pittsburgh Steelers and Pirates), the Carnegie Science Center and
    International Andy Warhol Museum, the David L. Lawrence Convention
    Center, three performing arts theaters, and the Senator John Heinz
    Pittsburgh Regional History Center all located within this one square
    mile corridor.
        Within this corridor, there are also significant levels of downtown
    commuter parking and private and public development projects. During
    the day, a large reservoir of parking on the North Shore provides much
    needed fringe parking for the golden triangle. In turn, the golden
    triangle provides a significant amount of needed parking for North
    Shore events. Providing a better connection between the two areas will
    fortify and enhance this relationship.
        Development projects in the corridor include Alcoa's new corporate
    headquarters and a 240 unit apartment complex, a new baseball park, and
    a new football stadium, an expanded convention center and hotel, an
    office building, a new theater and parking garage, and accompanying
    retail and entertainment complex.
        Absent in this corridor are pedestrian friendly and efficient
    transportation connections tying together these various attractions and
    development projects and linking the corridor with the region's
    transportation infrastructure. Overall, improved linkages between the
    North Shore and central business district will help ensure the
    continued vitality and accessibility of the region's core and enhance
    and support the private and public development currently underway in
    the Allegheny River Corridor.
        The program proposed here is designed to enhance North Shore and
    Golden Triangle development activities by coordinating the downtown
    area's transit systems with pedestrian, parking, highway and HOV
    facilities. A fixed guideway transit connection to Port Authority's
    existing light rail transit (LRT) system is proposed to enhance transit
    service to the North Shore area and better integrate Golden Triangle
    and North Shore activities including the regional attractions.
        A draft environmental impact statement (DEIS) is currently underway
    to evaluate alternatives and recommend a mode/technology and alignment
    for the project. The current projected cost of the project developed
    during the major investment study (MIS) phase is $240 million.
                       light rail transit stage ii system
        Port Authority's Light Rail Transit System, also known as the
    ``T'', is a twenty-five mile light rail transit system serving the City
    of Pittsburgh and the South Hills communities of Allegheny County.
        The South Hills light rail system, part of an extensive trolley
    network formerly operated by the Pittsburgh Railways Company and its
    predecessors, was acquired by Port Authority in 1964. Between 1980 and
    1987, Port Authority completely reconstructed 10.5 miles of the system,
    a project referred to as stage I.
        Stage I entailed construction of the downtown Pittsburgh subway and
    rehabilitation of Port Authority's Panhandle Bridge over the
    Monongahela River, modernization of the old trolley line through
    Allegheny County's South Hills via Beechview and Mount Lebanon,
    construction of a New Mount Lebanon transit tunnel, construction of a
    new rail car maintenance facility and operations control center and
    purchase of fifty-five articulated and air-conditioned light rail cars.
    Also included in stage I was the completion of the 2.5 mile Allentown
    line in 1992.
        The stage II light rail transit system which was designated a ``new
    start'' project in the intermodal surface transportation assistance act
    of 1991 (ISTEA) involves the reconstruction of twelve and one-half
    miles of the Overbrook, Library, and Drake trolley lines to modern
    light rail standards. Preliminary engineering was completed for the
    project in spring 1998. Rebuilding the three lines on their existing
    alignments includes double-tracking the Overbrook line, replacing
    bridges, stabilizing slopes, adding retaining walls, constructing new
    stops and stations, and installing signal, communications and
    electrical power systems. All three lines are also to be built to light
    rail standards. The project includes the acquisition of twenty-eight
    new light rail vehicles, and approximately 2,400 new park and ride
    spaces. The current project is estimated at a total of $512.5 million
    or $410 million federal share.
                                  bus purchase
        Port Authority is also requesting $20 million of section 5309 bus/
    bus facility funds in the fiscal year 2000 transportation
    appropriations bill to be used toward the procurement of approximately
    83 buses. The new buses will replace buses which have completed their
    useful service lives and are eligible for retirement by virtue of age
    or mileage standards. The buses will be used in Port Authority's
    overall route network, which serves 260,000 riders each day, or about
    75 million annually.
        It is our fervent desire that your subcommittee will continue
    increasing the overall level of investment in transportation
    infrastructure, which is of national importance. Your subcommittee has
    enabled public transportation systems in our great cities, suburban
    communities, and rural areas to be rejuvenated. Further, this
    subcommittee has helped create an interstate highway system and airport
    network that is the envy of the world. Now, it is imperative that all
    levels of government continue to develop our transit and surface
    transportation networks.
        Finally, I want to thank you for your leadership and also the
    subcommittee for its past support and commitment to surface
    transportation programs, particularly, for those that affect public
    transportation.
        I look forward to an active and ongoing dialogue with the
    subcommittee in the coming years. I would be pleased to submit any
    additional information at this time as would be useful to the
    subcommittee.
                                     ______

    Prepared Statement of Robert H. Tucker, Jr., Chairman, Regional Transit
                                   Authority

        Thank you for the opportunity to present a statement to the
    subcommittee on behalf of the Regional Transit Authority (RTA) of New
    Orleans and Jefferson Parish. The Regional Transit Authority is
    requesting funds to continue the progress of three major transit
    projects.
        Before explaining the requests, the Regional Transit Authority
    extends its sincerest appreciation to the members of this subcommittee
    for the support demonstrated towards our requests for the last fiscal
    year. As you may recall, upon enactment, the fiscal year 1999
    transportation appropriations bill included $8,075,000 for RTA's buses
    and facilities from Louisiana's $11,000,000 statewide bus
    appropriation, $22 million for the Canal streetcar project and $2
    million for the Desire streetcar project. We are very grateful to the
    subcommittee for its role in providing that critical funding.
        In summary, for fiscal year 2000, the regional transit authority is
    requesting federal funding for the following projects:
      --$91,000,000 for the Canal streetcar project
      --$24,000,000 for RTA's lease/maintenance program
      --$39,600,000 for the return of the Desire streetcar
                            canal streetcar project
        The Canal Street corridor project will restore light rail transit
    service to the city's most important transit corridor. For fiscal year
    2000, the Regional Transit Authority is requesting $91,000,000 of FTA
    section 5309 (formerly section 3) new start rail funding to construct
    the project.
        The project completed the major investment analysis phase in the
    fall of 1995 and the environmental impact statement (EIS) was completed
    in August of 1997. The FTA issued the favorable ``record of decision''
    on August 28, 1997. Currently, the project is in final design. The
    prototype streetcar is over 50 percent complete. Construction is
    expected to begin in the mid-late 2000.
        The total value of the Canal streetcar project, including the
    proposed city park spur, is approximately $181 million. To date,
    Congress has appropriated $54.5 million towards the project.
        The Canal Street corridor connects with 70 percent of the Regional
    Transit Authority's 59 transit lines and seven suburban routes. In the
    future, the route could connect with Amtrak and the local Greyhound bus
    terminal at the New Orleans Union Passenger Terminal.
        The streetcar's track will be placed primarily within existing
    medians which will allow the RTA to remove buses from the currently
    congested traffic stream. The EIS analysis predicts 20 percent growth
    of ridership over the 18,000 per day currently utilizing the bus
    service within the corridor.
        In a major effort to reduce the overall cost and scope of the
    project, the RTA has implemented two strategies, both during
    construction and operation:
        First, the Canal streetcar track will match the recently regauged
    track of the riverfront streetcar which now matches that of the
    historic St. Charles streetcar line. The common gauge will allow the
    RTA to use the existing Carrollton streetcar facility of the St.
    Charles streetcar as a heavy duty maintenance facility for all three
    lines as well as the proposed Desire line. Thus, the RTA will avoid the
    cost of duplicating a similar facility. However, a separate storage and
    inspection facility for daily maintenance and cleaning of the
    streetcars will be built due to capacity constraints at Carrollton.
        The second part of the strategy will be to assemble the streetcars
    in New Orleans by the RTA technicians and craftsmen whom recently built
    seven streetcars for the revamped riverfront streetcar line. The RTA
    will be able to save approximately $400,000-$600,000 per vehicle by
    taking this approach. Estimates are that for an outside firm to bid on
    the streetcars, which are a one-of-a-kind design, it would cost the
    taxpayer anywhere from $1.6 to $1.8 per vehicle. RTA approximates its
    cost at $1 million to $1.2 million.
        As well as building the seven riverfront cars, the Carrollton shop
    recently overhauled the entire 36 car St. Charles fleet. This facility
    and its workers are uniquely suited to construct the Canal streetcars
    competently and economically. Furthermore, with RTA employees
    assembling the new streetcars, the quality of the cars will be ensured
    by drawing from their expertise maintaining the existing fleet.
        The streetcars will be basically replicas of the venerable, and no
    longer available, Perley Thomas type that now traverses the St. Charles
    line. However, the Canal cars will be ADA accessible and air
    conditioned.
                           lease/maintenance program
        As its highest priority request under the RTA bus and bus facility
    program, the Regional Transit Authority (RTA), is seeking $24,000,000
    representing three years of payments under its innovative lease/
    maintenance program recently approved in-concept by the Federal Transit
    Administration. This new program has allowed the RTA to enter into a
    lease and maintenance agreement with a commercial leasing company for
    the lease and maintenance of 75 new buses and 100 near new buses. The
    agreement will also allow the RTA to benefit from the recent changes
    that allow for the treatment of maintenance costs under a lease as an
    eligible capital expense. Penske truck leasing, through the RTA's RFP
    selection process, is the lessor of the buses as well as provide for
    the maintenance of the buses. The financing will be by ABN-AMRO.
        With 446 vehicles, the RTA operates the largest system in Louisiana
    by providing service to nearly 180,000 riders per day in a city that is
    20 percent transit dependent. The buses leased will significantly
    reduce the operating expenses of the RTA and enhance its ability to
    provide dependable service.
        This request will once again be a part of the fiscal year 2000
    Louisiana statewide request for FTA bus program funding. That effort is
    led by RTA staff and is coordinated through the Louisiana Public
    Transit Association. We hope our cooperative attempt will yield
    additional support once more to benefit the state's other transit
    systems as well as the RTA.
                             desire streetcar line
        The RTA is requesting $39,600,000 of FTA section 5309 new start
    funds for the corridor once occupied by the fabled ``Streetcar Named
    Desire'' through some of New Orleans oldest and historic neighborhoods.
    The major investment study phase began in May of 1998. To date,
    Congress has appropriated $6 million of FTA new start funding to the
    project.
        The proposed Desire streetcar line will allow the RTA to
    consolidate a number of bus routes away from the historically and
    structurally sensitive French Quarter. The line is expected to improve
    the overall efficiency of the RTA system by allowing for higher
    operating speeds and shorter travel time for buses now forced to use
    congested French Quarter streets. The Desire streetcar will provide
    direct service to the French Quarter, Faubourg Marigny and Bywater
    neighborhoods which are otherwise inaccessible to regular transit
    service. In addition, the line will serve two major defense facilities;
    the U.S. Coast Guard Support Center and the Navy's F. Edward Hebert
    Defense Complex.
        The MIS is expected to be completed in June of 1999.
                         transit program appropriations
        The Regional Transit Authority urges and requests that Congress
    appropriate to the highest levels possible under the terms authorized
    in TEA 21. TEA 21 includes increased levels of funding for transit--
    increases that are sorely needed. The RTA sincerely hopes that Congress
    follows through on that promise by appropriating to the levels
    authorized.
        Thank you for your time and consideration with these requests on
    behalf of the Regional Transit Authority.
                                     ______

      Prepared Statement of the Regional Transportation Commission, Clark
                                   County, NV

                                i. introduction
        The Regional Transportation Commission of Clark County, Nevada
    (RTC) is pleased to have the opportunity to present this testimony to
    the Transportation Appropriations Subcommittee in support of our fiscal
    year 2000 funding requests.
        The RTC is a public entity created under the laws of the State of
    Nevada with the authority to operate a public transit system and
    administer a motor fuels tax to finance regional street and highway
    improvements. In addition, the RTC is the Metropolitan Planning
    Organization (MPO) for the Las Vegas Valley. As the public transit
    provider, the RTC operates Citizens Area Transit (CAT), a mass transit
    system that now moves more than 4.0 million passengers per month and
    recovers nearly 50 percent of its operating and maintenance costs from
    the farebox.
        The RTC, acting as the public transit authority, requests that the
    Subcommittee give positive consideration to the four projects described
    in this testimony. Specifically, the RTC requests funding from Section
    5309 (formerly Section 3) in the amount of $23 million for final design
    elements and Right of Way and land acquisition components for a 5.2
    mile initial operating segment of a fixed guideway system; $2.96
    million for transit bus fleet expansion; $5 million for Bus Passenger
    Facilities; and $10 million for a CNG refueling facility. As shown in
    this testimony, these four projects are essential to the comprehensive
    development of an integrated intermodal transportation system capable
    of meeting the needs of the fastest growing city in the United States.
                                 ii. community
        Las Vegas Growth and Development.--The Las Vegas community is
    currently home to over 1.3 million permanent residents. With 17 of the
    world's largest resort hotels adding over 32 million annual visitors,
    the actual population of Las Vegas on any given day exceeds 1.5 million
    persons.
        Meanwhile, the Las Vegas metropolitan area continues to experience
    explosive growth. The economy of the Las Vegas Valley is characterized
    by a favorable business environment, a strong job market, an absence of
    a business and personal income tax, and a comparatively low property
    tax by national standards. This environment has fostered an era of
    extraordinary growth that, since 1990, has fueled the creation of over
    175,000 new jobs and has witnessed the influx of over 500,000 new
    residents to the valley. Current projections indicate that population
    and employment will continue to increase, exceeding 2.1 million
    residents and over 1 million jobs by the year 2020. Ensuring adequate
    mobility is essential to maintaining a superior quality of life for
    residents and a pleasant visitor experience.
        The Resort Corridor of Las Vegas is, however, more than world
    renowned resorts. As well as a wide variety of recreational and
    entertainment opportunities and unparalleled convention and meeting
    facilities, it also contains a broad array of land uses that are not
    typically associated with the public image of Las Vegas. For example,
    the northern boundary of the Resort Corridor includes a substantial
    section designated by the City of Las Vegas as a redevelopment area to
    which public investments are targeted for urban revitalization. In
    contrast, the southern area of the Resort Corridor includes office
    uses, health care, shopping and educational facilities (including UNLV
    and several elementary and middle schools).
        The Resort Corridor covers only 10 percent of the land area of Las
    Vegas and it contains over 50 percent of the total regional employment.
    In contrast, 93 percent of the area residents live outside the
    corridor. Current job densities in the Resort Corridor approximate 56
    jobs per acre. This is similar to the job densities that exist in the
    central business districts of Portland (OR), Sacramento, San Diego, St.
    Louis, Pittsburgh, Cleveland, Buffalo, and Baltimore. In 1996, of the
    4.0 million daily person trips made in the Las Vegas Valley, 63 percent
    were commuter trips focused on destinations in the Resort Corridor. The
    mixing of land uses coupled with the ever increasing scale of the
    community also contributes to the high levels of transit ridership
    experienced by CAT. More importantly, the continued rapid growth
    reinforces the attractiveness of a fixed guideway system as part of the
    transportation infrastructure and service fabric.
        Major Investment Study.--The extensive and sustained growth in the
    Las Vegas valley has created significant transportation challenges. In
    October of 1997, the RTC adopted a Major Investment Study (MIS) that
    identified four strategies designed to ensure that traffic congestion
    will not worsen over the next 20 years from levels currently
    experienced. The four strategies include: (1) construction of an 18
    mile fixed guideway system serving the Resort Corridor; (2) expansion
    of CAT fixed route service to 500 peak service buses; (3) initiation of
    a TDM/TSM program designed to incentivize transit in all of its forms
    and fund low cost traffic management projects, respectively; (4)
    completion of the Resort Corridor street and highway system by
    finishing nine roadway projects, including the construction of Resort
    Boulevard--a new collector-distributor parallel to Las Vegas Boulevard.
    Completion of all of these projects will ensure that Las Vegas
    taxpayers will continue to have timely access to their jobs, avoid the
    disruptive affects of continual road construction, reduce reliance on
    the Single Occupant Vehicle and foster the on-going efforts of the Las
    Vegas Valley to meet the mandates of the Clean Air Act Amendments of
    1990.
        In light of the RTC's adopted MIS and the documented and ongoing
    success of the CAT system, the RTC has four initiatives it has
    prioritized for transit discretionary funding in its Regional
    Transportation Plan and the Transportation Improvement Program adopted
    in January of 1998. These priorities include acquisition of rolling
    stock for CAT, construction of Bus Passenger Facilities throughout the
    valley, construction of a Compressed Natural Gas refueling station and
    continued funding of Fixed Guideway preliminary engineering/final
    design. Each of these projects as documented in the Regional
    Transportation Plan (RTP) reflect the RTC's long term commitment to
    advance the usage of mass transit technologies as a means to
    effectively address growing commuter travel demands. In fact, with 63
    percent of all valley wide trips either beginning, ending or traveling
    through the Resort Corridor, the RTC cannot continue to rely solely on
    roads or buses, but instead must act now to begin implementing all
    elements of the MIS.
                iii. citizens area transit--bus fleet expansion
        Citizens Area Transit (CAT) began service on December 5, 1992. At
    that time, CAT represented the largest single start-up of new bus
    service in North America. Annual CAT ridership has grown from 14.9
    million riders in 1993 to over 46.6 million riders in 1998; a growth
    rate of over 211 percent in only 6 short years, catapulting CAT to the
    28th largest bus system in the nation. Las Vegas is the fastest growing
    city in the United States, but the CAT system is growing at a rate
    faster than any other local economic indicators, including population,
    employment, hotel rooms, visitor volumes, airport passengers, vehicle
    miles traveled, and auto registrations.
        With 42 routes operating throughout the greater Las Vegas Valley,
    as well as routes in the rural communities of Laughlin and Mesquite,
    Nevada, CAT is now servicing over 4 million passengers per month. While
    the CAT routes operating along the high-profile Las Vegas Boulevard
    provide service to up to 900,000 passengers per month, these routes
    account for only 25 percent of the total monthly ridership. Clearly,
    many Las Vegas residents rely heavily on the CAT system to get to work,
    school, shopping, medical services and recreational facilities.
    Providing mass transit services throughout the Las Vegas Valley, CAT
    has become essential to the fabric of the Las Vegas community.
        To address the ever increasing demand for transit services, the RTC
    has continually increased bus service. Since startup, total annual
    hours of revenue service have almost doubled, from 585,134 hours in
    1993 to over 1 million hours in 1998. Similarly, annual vehicle miles
    have also doubled; from 6,384,660 miles in 1993 to 14,253,589 miles in
    1998. The CAT system has continued to successfully increase ridership
    while remaining operationally efficient. Costs per passenger have
    dropped consistently since startup, to approximately $1.29 per
    passenger. In 1997, CAT was recognized by the American Public Transit
    Association (APTA) as the winner of the Outstanding Achievement Award--
    Bus System of the Year for the 151-600 bus category. In 1998, APTA
    again recognized the CAT system by awarding it the William T. Coleman
    Silver Safety Award for outstanding performance in traffic and
    passenger safety. Also in 1998, the annual University of North
    Carolina, Charlotte Comparative Performance Report also recognized CAT
    as one of the nation's top bus systems in terms of system performance.
        Although the CAT system has doubled service availability since
    startup, the demands for even more service continue to escalate. The
    urban boundaries of the Las Vegas Valley continue to push in all
    directions, creating new areas of growth and transit demand. In
    addition to under served areas, the frequency of service on most
    existing routes serving the residential base of the valley is
    substantially less then desired. The single largest constraint faced by
    the RTC to providing more service continues to be fleet availability.
    When compared to other peer cities, CAT transports up to 3 times the
    number of passengers per vehicle. This passenger load factor is not
    sustainable over the long term in terms of the enormous demands placed
    on existing rolling stock, and makes expansion of the fleet size an
    absolute necessity.
        In addition to the regular fixed route service provided by the CAT
    system, the City of Las Vegas furnishes a neighborhood circulator
    service that complements CAT. The Las Vegas City Trolley system
    consists of 6 themed Trolley vehicles, providing access between Senior
    and low-income housing centers and major activity centers and shopping.
    The average age of the Trolley vehicles is 11 years old; operating and
    maintenance costs have risen dramatically over the past few years. As
    the Trolley vehicles approach the end of their useful lifespan,
    replacement vehicles are necessary.
        To continue to expand existing transit services, the RTC requests
    $2.96 million in Section 5309 bus discretionary funds to purchase
    additional vehicles to enhance the transit fleet. Consistent with past
    appropriations requests, the RTC will provide a substantial overmatch
    of 30 percent in local funding for these equipment purchases.
                          iv. bus passenger facilities
        South Strip Intermodal Facility.--With over 46 million annual
    passengers using the CAT system, passenger comfort and convenience are
    rapidly becoming issues of note. To enhance customer amenities and
    facilitate transfers between routes, the RTC plans to build a network
    of terminal/transfer facilities throughout the Las Vegas Valley.
    Terminal/transfer facilities support the transit system by providing
    areas of comfort, security, and information to transit patrons waiting
    to transfer to another bus route or to the next mode of transportation.
    These facilities will provide locations where passengers have the
    opportunity to easily transfer between routes, passengers have shelter
    from the elements, and coach operators have access to necessary
    amenities. In addition, terminal/transfer facilities will provide
    opportunities for a reasonable interface between fixed route and
    paratransit services. At this time, the CAT system currently has only
    one terminal/transfer facility in the downtown area, known as the
    Downtown Transportation Center (DTC), which was built in 1987 prior to
    the initiation of the CAT system. The DTC is currently undergoing
    reconstruction to expand and enhance that facilities' ability to
    accommodate CAT operations. With the ever-increasing demands for
    additional services, there is a critical need for additional terminal/
    transfer facilities.
        The CAT service in the south Resort Corridor, as well as several
    residential routes in the southern part of the Las Vegas valley,
    currently utilize a temporary passenger facility located on private
    property at the Vacation Village Casino at the southern end of the Las
    Vegas Strip. This site has been provided at no cost to the public
    through the community spirit of the property owners, however there are
    no conveniences or amenities dedicated to the riding public of the CAT
    system. The increased CAT service frequency and ridership make it clear
    that something more permanent is needed. To that end, the RTC has
    conducted an alternatives analysis and Environmental Assessment for a
    South Strip Intermodal Facility. Once the Environmental Assessment is
    complete, this project will move into final design and land
    acquisition. In order to expediently move to construction of the
    facility, the sum of $5.0 million is requested in Section 5309 bus
    discretionary funds for the land acquisition of the identified
    property.
                            v. cng fueling facility
        The dramatic growth in population and employment in Las Vegas has
    resulted in a tremendous increase in traffic congestion and a
    significant deterioration in regional air quality. Pursuant to the
    Clear Air Act Amendments of 1990, the Environmental Protection Agency
    has designated the Las Vegas airshed as a serious non-attainment area
    for carbon monoxide (CO) and PM10 (inhalable particulate matter; 10
    microns or less). Transit is an essential element in the region's
    overall strategy to reduce traffic congestion and improve regional air
    quality. In its role as the MPO and transit operator, the RTC is
    constantly promoting additional methods to help improve air quality.
    When CAT paratransit services were initiated in December 1994, the RTC
    mandated the entire paratransit fleet use an alternative fuel. The
    paratransit fleet consists of 120 vehicles which all use compressed
    natural gas (CNG) to help the RTC promote air quality standards. With
    this paratransit fleet, the RTC is currently the largest single sponsor
    of an alternative fuel fleet in the State of Nevada. The RTC directly
    contracts with a CNG wholesaler for the purchase of CNG fuel at the
    lowest possible costs, however, the RTC owns only 2 facilities
    throughout the Valley where these vehicles are fueled. As shown on the
    attached Exhibit A, both existing facilities are located in the western
    portion of the Las Vegas Valley. Due to the somewhat limited range of
    this fuel type, the RTC intends to build an additional fueling facility
    in the southeastern portion of the valley to support the daily
    operations of this unique fleet. Building this facility will allow the
    RTC to continue to promote the air quality benefits of alternative
    fuels throughout the Las Vegas valley. In addition, the RTC fueling
    facility will be made available to all other local government entities,
    promoting the usage of alternative fuels throughout the Las Vegas
    valley. To fund this program, the RTC requests $10.0 million in Clean
    Fuels program funds for construction of this important facility.
            vi. fixed guideway system--final design and construction
        The CAT bus system represents a significant commitment by the RTC
    to address the travel needs of residents and visitors alike. However,
    as documented in the Resort Corridor MIS, a higher level of mass
    transit is clearly necessary in a city of 1.3 million. Despite the
    dramatic growth and expansion of CAT, the Las Vegas Valley continues to
    experience rising congestion levels, especially in the area known as
    the Resort Corridor. The expansion of the bus system can address some
    of these needs in the short term, but there is a limit to the number of
    buses that can be put on the streets and, in fact, in the number of
    streets and highways that can be built. The MIS illustrated that
    projected travel demands, if addressed only through road construction,
    would require the construction of 18 north-south and 20 east-west and
    arterial lanes through the Resort Corridor.
        The objective of the proposed fixed guideway system is to provide
    residents and visitors with environmentally clean, cost effective
    public transportation services that will meet the dramatically
    increasing transportation needs of the Las Vegas Valley. The proposed
    fixed guideway system (depicted in Exhibit B) contains 18.4 miles of
    double track, elevated, automated guideway; providing service to 28
    stations and three major terminal stations. The system includes a core
    system and an extension to McCarran International Airport. The core
    system consists of 15.6 miles of guideway, 25 stations and two major
    terminals. The cost for the full system is approximately $1.14 billion.
    The RTC received an authorization of $155 million for Phase 1
    activities in the TEA 21 legislation and FTA has given formal approval
    to commence PE activities.
        The RTC has commenced initial preliminary engineering activity for
    a 5.2 mile initial operating segment referred to as Phase I (depicted
    in Exhibit C). To facilitate the design, construction, and operation of
    this project, the RTC anticipates utilizing the turnkey procurement
    method. RTC has initiated the Draft Environmental Impact Statement
    (DEIS) and Scoping was conducted in the Fall of 1998 to define the DEIS
    alternatives. As the DEIS progresses, RTC will continue to refine and
    adopt the technology requirements for the system, and will continue
    with final design efforts on the Phase 1 alignment. Consistent with the
    Phase 1 activities and concomitant with receipt of the Record of
    Decision in the 4th quarter of 2000, RTC will also identify an
    appropriate location for the Phase 1 Maintenance and Operation Facility
    and begin acquisition of necessary Right of Way. Based on the size and
    function of the facility, it is anticipated that this facility may also
    represent the northern terminus for daily operations, and provide an
    opportunity for the northern passenger terminal, complete with a bus
    interface, passenger amenities, and a Park and Ride location. Once an
    appropriate site is identified and all appropriate environmental
    analyses complete, RTC will acquire the land and any contingent Right
    of Way.
        To ensure the continued progress of this important project, the RTC
    requests the sum of $23.0 million in Section 5309 new start funding for
    the commencement of Final Design on Phase 1, final design of the
    Maintenance and Operations facility, and Right of Way and land
    acquisition for that facility.
                                vii. conclusion
        In conclusion, the RTC is requesting the total sum of $17.96
    million in Section 5309 bus discretionary funds for the CAT fixed route
    system and related facilities; and $23 million in Section 5309 new
    start funds for continued project design, Right of Way acquisition and
    activities related to the Maintenance and Operation facility. The RTC
    sincerely appreciates the Federal assistance it has received to date.
    With the assistance and support of this subcommittee and the Congress,
    we have built an award winning public transit system that provides
    essential services to a rapidly growing city. We look forward to
    continuing to work together on these important projects.
                                     ______

                 NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION

    Prepared Statement of John H. Seigel, M.D., F.A.C.S., F.C.C.M., Wesley
     J. Howe, Professor, Trauma Surgery, Chairman, Department of Anatomy,
    Cell Biology and Injury Science, New Jersey Medical School, University
                    of Medicine and Dentistry of New Jersey

        Mr Chairman, I respectfully present testimony on behalf of the
    University of Medicine and Dentistry of New Jersey--New Jersey Medical
    School. The University of Medicine and Dentistry (UMDNJ) is the largest
    public health sciences university in the nation. Its New Jersey Medical
    School (NJMS) is the academic medical facility for all of Northern New
    Jersey and its University Hospital serves as the Level I Trauma Center
    to coordinate the entire Northern region of the State.
        This testimony requests your continued support for the National
    Highway Traffic Safety Administration (NHTSA) Trauma Network composed
    of seven university trauma systems functioning together in a consortia
    known as the ``CIREN:Human Crash Injury Project''. In addition to the
    UMDNJ-New Jersey Medical School in Newark, N.J., the consortium
    includes the Charles McMathias, Jr. National Study Center for Trauma
    and Emergency Medical Services (EMS) of the University of Maryland in
    Baltimore, the William Lehman Injury Research Center of the University
    of Miami in Florida, the Children's National Medical Center of
    Washington, D.C., the University of Michigan Medical Center in Ann
    Arbor, Michigan, the University of California Medical School of San
    Diego, California and the Harborview Medical Center of the University
    of Washington in Seattle, Washington. These seven centers have been
    working together in the study of motor vehicle crash injury which
    affects both adults, as well as children. Individually and
    collectively, these studies have resulted in new knowledge which has
    enabled the identification of the patterns of specific injuries
    resulting from real motor vehicle crashes. They have pointed the way
    towards the deployment of the newer safety devices and enabled the
    evaluation of their impact in reducing the severity of these injuries
    or preventing their occurrence. In the proposed NHTSA Trauma Network
    which will support the ``CIREN:Human Crash Injury Project''.
        Important information concerning the effect of motor vehicle
    crashes on car structural integrity has been learned from
    experimentally-staged motor vehicle crashes and from the use of inert
    motor vehicle crash-dummies. However, it is necessary to go beyond the
    behavior of crash-dummies back to the scene of the accident, in order
    to determine the real mechanisms of injury and to understand the
    variability of the impact on different types of real people. For
    instance, the sixty year old woman who has some degree of osteoporosis
    will likely have a different pattern and magnitude of lower extremity
    and pelvic fracture injuries for the same impact velocity of crash
    compared to a twenty-five year old male.
        The studies carried out so far, at the New Jersey Medical School
    have enabled the identification of different patterns of organ and
    extremities injury related to specific sites of passenger compartment
    intrusion and shown that these patterns are significantly different as
    a function of the direction of crash and its impact velocity.
    Collaborative studies in Baltimore and New Jersey have identified,
    subtle but important, aspects of sex and body habitus related driver
    behavior which can result in more, or less severe injuries to the lower
    extremities resulting from the same crash forces. The New Jersey and
    the Miami studies have allowed recognition of the motor vehicle crash
    patterns which provide clues to occult injuries which would otherwise
    be missed by the emergency medical services team in triaging patients
    from severe motor vehicle crashes. Research from four of the centers,
    New Jersey, Maryland, Michigan and Washington State, will demonstrate
    the shift in the pattern of injuries associated with sport utility
    vehicles and make suggestions for design changes that can improve car
    occupant safety in SUV versus sedan crashes. These factors have
    important implications for safety design and creation of biomechanical
    test instruments to ensure driver and passenger protection. Also,
    studies carried out by the Children's Medical Center in Washington,
    D.C. have focused on the precautions necessary in designing and
    locating children's safety seats to prevent infant injuries in motor
    vehicle crashes.
        Most important, the net result of these studies has been to focus
    on the development of motor vehicle safety measures which reduce the
    chance of injury rather than solely on the prevention of death. For it
    is injury which is the most costly aspect of the motor vehicle crash,
    raising health-care costs and forcing insurance premiums upward, not to
    mention the personal catastrophes which occur daily when a family
    member is severely injured.
        The studies carried out by the New Jersey Medical School and
    Maryland components of the CIREN Human Crash Injury Group have already
    identified important characteristics of injury which were not
    previously recognized. These studies have focused on the importance of
    lower extremity injuries and pelvic fractures as major causes of
    disability and cost, and have focused on the importance of the air-bag
    in reducing the severity of brain injuries in high impact frontal motor
    crashes. In regard to this last observation, investigations carried out
    jointly at the New Jersey Medical School and the Charles McMathias
    National Study Center have shown that air-bag deployment in frontal
    motor vehicle crashes significantly (p<0.01) reduced the incidence of
    severe brain injury (GCS<12) from 67 percent to 29 percent even though
    the total incidence of brain injuries remained unmodified. Air-bags in
    these types of major force car crashes also reduced the incidence of
    shock, face fractures, and lower extremity fractures and as a
    consequence lowered the resulting need to extricate the patient from
    the motor vehicle, thus speeding the time to treatment. These types of
    data lend credence to the move to install side airbags in all new cars
    to reduce the incidence of severe brain injuries in side-impact
    crashes. This type of study emphasizes how the ``Human Crash Injury
    Project'' (CIREN) and the NHTSA Trauma Network can develop information
    about the effect of protective devices that cannot be obtained from
    crash-dummy research, since crash-dummies have no brains and the crash
    impact on a crash-dummy's skull produces no discernable change in the
    dummy's intellect or problem solving ability.
        The prospective detailed medical:crash injury research
    investigations carried out under the ``CIREN:Human Crash Injury
    Project'' supplement and enhance the retrospective statistical studies
    now carried out by NHTSA under the NASS Program. It is a measure of the
    importance with which this project is viewed nationally that the
    present Administrator of the National Highway Traffic Safety
    Administration, Dr. Ricardo Martinez, M.D., has indicated that NHTSA
    wishes to integrate these research efforts into a national Trauma
    Network to include New Jersey Medical School:UMDNJ, The Lehman Center
    at Jackson Memorial Hospital in Miami, the McMathias National Study
    Center in Baltimore, and the Children's Medical Center in the District
    of Columbia, and to link these four existing centers to the three new
    centers in Michigan, Washington State and California.
        Finally, there is a major new initiative occurring in the
    Department of Transportation (Federal Highway Administration), which is
    the development of an Intelligent Transportation System (ITS). As part
    of the ITS the Automobile Crash Notification System (ACN) program is in
    the process of developing an automatic crash notification micro-chip
    which could be inserted into motor vehicles so as to identify the
    location and nature of the crash. This new technology has the potential
    to enable the crash forces which are producing specific injuries and
    injury patterns to be identified and quantified so that improved safety
    measures including motor vehicle structural modifications and the
    deployment of additional air-bags can be developed. The proper
    evaluation of the potential effectiveness of the ACN and the rate at
    which this new technology can be integrated with Emergency Medical
    Services (EMS) systems nation-wide could be most effectively determined
    by integration of the testing aspects of the ACN Program with the
    Trauma Network and its CIREN:Human Crash Injury Project. Not only can
    this combined program more rapidly evaluate the ACN system, but it will
    also result in its being implemented immediately in the six states of
    the Trauma Network, plus the District of Columbia, as a first phase
    effort.
        This effort could solve a very serious problem identified by
    studies of the Fatal Accident Reporting System (FARS). This is that
    while the death rate of trauma victims brought to Trauma System
    Hospitals is decreasing, there has been an increase in on-scene
    fatalities. This is due in part to delays in notification of EMS team
    to find and retrieve these injured patient especially in rural areas.
    The NHTSA supported by Trauma Network could also provide a mechanism
    for translation of this technology into true state-wide safety
    programs, since all of the regions mentioned and all of the
    participating trauma centers have excellent EMS systems which are
    closely linked to their network of trauma centers. The ACN technology
    has the potential to be an order of magnitude increment in motor
    vehicle safety. Its technical development and independent field testing
    should become integrated at an early phase, so that its value can be
    determined and a feedback relationship with the Department of
    Transportation's Highway Traffic Safety Programs and the state-wide EMS
    Trauma Services can be more rapidly accelerated. The value of allowing
    the Trauma Research Centers which form the CIREN:Human Crash Injury
    Project to provide this interactive feedback is that all of the
    principal investigators are not only experienced trauma surgeons, but
    are also recognized as trauma investigators with extensive experience
    in studying the mechanisms of motor vehicle crash injury.
        Speaking for myself, with the concurrence of the other directors of
    these affiliated programs, we request that the House Appropriations
    Subcommittee on Transportation and Related Agencies designate funding
    at the level of $500,000 per center to each of the seven present NHTSA-
    funded trauma research centers participating in the Human Crash Injury
    Project for a total of 3.5 million dollars. We also request that this
    appropriation be established on a multi-year basis to extend over a
    five-year period at the same annual rate adjusted for inflation, so
    that continuing evaluation and feedback can be provided by the Trauma
    Network. Also, we request that these Trauma Research Centers be used to
    evaluate the role of the Intelligent Transportation System's Automobile
    Crash Notification System in reducing excessive field mortality and
    injury exacerbation of motor vehicle crashes due to the prolongation of
    crash recognition by the present EMS system. This will take additional
    support to implement and test.
        This latter additional support should allow approximately 5000 cars
    per core center to be instrumented with appropriate communications
    equipment. This level of support would enable the evaluation of the
    effectiveness of the ACN Program in identifying potential serious
    injuries and in facilitating the rapidity with which Emergency Medical
    Services Advance Life Support Teams could be deployed to the scene of
    the crash. It is felt that this type of immediate crash notification
    and localization technology when fully developed and integrated with
    all of the Nation's regional Trauma Centers could have a major impact
    in reducing the mortality and injury complications resulting from rural
    motor vehicle crashes and from serious crashes occurring in urban areas
    at times when there are few bystanders to request EMS 911 services.
        In closing, I would like to express my personal gratitude for the
    past support of the House and its Appropriations Subcommittee on
    Transportation and Related Agencies of our group's collective research
    which, by identifying the mechanisms of human crash injury, has already
    resulted in improved safety and in a reduction in the incidence and
    severity of motor vehicle crash injuries. Motor vehicle crashes place
    all of us at risk, both personally as well as financially, and
    negatively impact on major segments of our economy. The development of
    safer motor vehicles and the invention of new and imaginative state-of-
    the-art motor vehicle crash safety devices and notification systems has
    spawned a new industry with enormous growth potential, which has
    already begun to integrate the telecommunications and motor vehicle
    industries. The small amount of national resources directed into this
    type of research will pay enormous dividends, not only by the reduction
    of motor vehicle crash injury costs, but also by the creation of new
    technologies and new businesses which can stimulate employment and
    national growth.
                                     ______

                  RESEARCH AND SPECIAL PROGRAMS ADMINISTRATION

     Prepared Statement of Michael Carney, Chairman, Association of Waste
               Hazardous Materials Transportation, Alexandria, VA

        On behalf of the Association of Waste Hazardous Materials
    Transporters (AWHMT), I am submitting a statement for inclusion in the
    Subcommittee's hearing record regarding the proposed fiscal year 2000
    budget for the U.S. Department of Transportation (DOT).
                             interest of the awhmt
        The AWHMT represents companies that transport, by truck and rail,
    waste hazardous materials, including industrial, radioactive and
    hazardous wastes, in North America. The Association is a not-for-profit
    organization that promotes professionalism and performance standards
    that minimize risks to the environment, public health and safety;
    develops educational programs to expand public awareness about the
    industry; and contributes to the development of effective laws and
    regulations governing the industry.
        As a community of taxpayers dependent on the effective
    administration and enforcement of federal hazardous materials
    transportation laws and regulations, we feel compelled to file these
    views and concerns about how DOT's Office of Hazardous materials Safety
    (OHMS) and Federal Highway Administration (FHWA) have carried out their
    respective so-called ``hazmat'' responsibilities.
                                   background
        The transportation of hazardous materials involves producers and
    distributor of chemical and petroleum products and waste, transporters
    in all modes, and manufacturers of containers. DOT estimates that
    upwards of 800,000 shipments and as many as 1.2 million regulated
    movements of hazardous materials occur each day. The production and
    distribution of hazardous materials is a trillion-dollar industry that
    employs millions of Americans. As a major export, the transportation of
    these materials contributes positively to our trade balance. These
    products are pervasive in the transportation stream and in our society
    as a whole.
        While these materials contribute to America's quality of life,
    unless handled safety personal injury or death, property damage, and
    environmental consequences can result. To protect against these
    outcomes, the Secretary of Transportation is charged to ``provide
    adequate protection against the risks to life and property inherent in
    the transportation of hazardous materials in commerce by improving''
    regulation and enforcement.\1\ The Secretary's authority to accomplish
    this mission is embodied in the Hazardous Materials Transportation Act
    (HMTA).\2\ In 1990, the HMTA was significantly amended for the first
    time. Subsequently, amendments, albeit less significant, were added in
    1992 and 1994. As a consequence of these amendments, Congress directed
    DOT to accomplish a number of tasks. How DOT has handled these
    responsibilities and how it proposes to handle them in the future in
    the focus of this statement.
    ---------------------------------------------------------------------------
        \1\ 49 U.S.C. 5101.
        \2\ 49 U.S.C. Chapter 51.
    ---------------------------------------------------------------------------
                  office of hazardous materials safety (ohms)
        The commerce of hazardous materials demands that OHMS have
    intermodal, as well as international, expertise. It regulates a diverse
    community of interests and must constantly manage the tension between
    safety and efficiency in the transport of these materials in order to
    fulfill its mission to protect the public and the environment.
        In comments submitted to the Subcommittee last year, we were
    concerned that the Administration had proposed nothing more than a
    cost-of-living increase for the OHMS. While we are pleased that this
    year the Administration has not proposed a flat programmatic budget, we
    are nevertheless opposed to the method by which the Administration has
    proposed to finance OHMS' work.
    ``User Fees''
        The Administration has proposed to fund the entire OHMS program,
    beginning with the forth quarter of fiscal year 2000, with fees
    collected through the HazMat Registration program (Registration
    program).\3\  Although the HMTA allows OHMS to require all shippers,
    carriers and package manufacturers and reconditioners to pay fees
    through this registration program to support the HazMat Planning and
    Training Grants program (Grants program), OHMS has only imposed these
    registration fees on a subset of the hazmat transportation industry.
    During the last collection cycle OHMS collected approximately $9.4
    million from 22,600 shippers and carriers.\4\ To fully fund the Grants
    program and the OHMS program, fees would have to increase four-fold.
    ---------------------------------------------------------------------------
        \3\ RSPA fiscal year 2000 Budget Submission, page 54.
        \4\ Fiscal year 1998 Summary, Hazardous Materials Registration
    Program, Office of Hazardous Materials Planning and Analysis, OHMS.
    ---------------------------------------------------------------------------
        The Registration program's fees were an outcome of the 1990 HMTA
    reauthorization. Industry did not ``want'' these fees, but such fees
    were demanded by states in exchange for clearer authority for DOT is
    preempt non-federal requirements that impede the safe and efficient
    transportation of hazardous materials. We believe then, as we do now,
    that it is not possible to fairly assess fees on this industry and at
    the same time ensure credible enforcement without making the program so
    administratively top-heavy as to undermine the purpose for the fee. The
    portion of the hazmat industry subject to these fees has tolerated them
    because OHMS has kept the fee at the minimum allowed by Congress.
        As noted above, the OHMS program exists to protect the Nation from
    risks to life, property and the environment inherent in the
    transportation of hazardous materials. To carry out its mission, OHMS
    develops safety regulations, conducts research and analysis to identify
    safety problems, and operates a system of exemptions and approvals to
    facilitate the implementation of new technologies. Additionally, OHMS
    pursues international and national uniformity in technical
    requirements. OHMS conducts inspections and enforcement actions to
    ensure compliance with the regulations as well as provides broad
    training and educational services, emergency response support, and
    administration of the Registration and Grants programs.
        The Administration's proposal cannot and should not be
    characterized as a user fee. User fees imply that those who pay receive
    direct benefit from their fees. However, the OHMS so broadly effects
    the general safety of all citizens that it would not be possible to
    fairly administer a fee of the magnitude contemplated in the
    Administration's proposal. At the same time, other government programs
    with broad public benefit similar to the OHMS program such as the
    services of the Consumer Product Safety Commission and National Traffic
    Safety Administration's auto safety research are funded from general
    revenues, not through industry-based taxes disguised as ``user fees.''
        Even if it could be rationalized that the fee apply only to the
    ``industry'', the hazardous materials transportation industry is not
    like, for example, the pipeline industry where user fees have worked.
    Fees have worked in the pipeline industry because they are perceived as
    ``fair.'' The universe of potential payers in known and there exists a
    common denominator on which to base the fee. Conversely, segments of
    the hazardous materials transportation market are so porous that the
    determination of who should pay becomes as much as issue as what should
    be the amount of the fee.
        On the other hand, if the Administration attempted to implement a
    true ``fee-for-service'' system, additional concerns exist. If fees
    were charge for each request for regulatory interpretation,
    administrative petition, training aid, data, and the like, the fees may
    deter companies from using the very services OHMS offers to foster
    compliance and ensure safe transport. Fees are likely to unfairly
    burden smaller businesses that need to rely on the services of OHMS
    because they lack the resources to maintain a full-time hazmat staff--
    an anomaly given the current concern OHMS has about the level of
    compliance among small businesses. (See below.) User fees could also
    result in a substantial drop in the amount and type of interaction
    between OHMS and the regulated community. Both groups benefit from such
    contact. OHMS receives a great deal of useful information regarding
    trends in commercial transportation and feedback on rulemaking
    proposals. Conversely, industry benefits by having a vital resource for
    compliance information, including official views and interpretations of
    rules. This cross-sharing of information helps to improve the overall
    performance of industry and the general rate of compliance. Finally,
    fees are not likely to apply to one of OHMS's most active users--local,
    state, and federal agencies. The Federal Government, alone, is the
    single largest shipper of hazardous materials in the United States.
    Thus, the largest user of OHMS service will pay nothing and the costs
    will be transferred to the private sector.
        As with the current Grants program, we do not believe OHMS could
    shoulder the administrative responsibilities associated with
    implementing and maintaining a fair user fee system. We believe this
    activity would detract significantly from the more important safety-
    related responsibilities of the Office.
        We strongly oppose the Administration's proposal to raise $18.2
    million from user fees and urge the Subcommittee to reject this
    proposal.
    Staff Resources
        The Administration is proposing to increase OHMS' staff by 4.5 FTE
    to be filled by 9 staff members.\5\ When compared to other modal
    administrations and considering the breadth of responsibilities, the
    OHMS staff is small. Six of these new positions would be used to target
    ``high-risk portions of the industry'' (small shippers of carriers and
    explosives manufacturers) for compliance initiatives. One other
    position will be assigned to the Office of Hazardous Materials
    Initiatives and Training to develop compliance materials. We believe
    these resources are well placed if in fact it means that other
    resources are now freed up to work on OHMS's regulatory backlog. (See
    below.)
    ---------------------------------------------------------------------------
        \5\ RSPA fiscal year 2000 Budget Submission, page 57.
    ---------------------------------------------------------------------------
        The last two requested staff positions would be assigned to
    ``initiate a proactive monitoring and liaison function with the [US]
    Department of Health and Human Services [DHHS]--and the US Department
    of Agriculture [DA]'' to engage in certain activities related to the
    Sanitary Food Transportation Act (SFSA). Congress enacted the SFSA in
    1990. Since that time, the Administration has attempted to repeal the
    Act or, most recently, to reassign responsibilities for the Act from
    OHMS to DHHS and DA. While none of these efforts have succeeded, it
    underscores OHMS's view that it does not have much that it can
    contribute to enhance food safety. In fact, our experience supports the
    Office's frustration. While OHMS' rules allow for the clear
    identification of hazardous materials in transportation, there are not
    corresponding rules to identify foods, or foodstuffs. Until Congress
    better sorts out which federal agencies have the expertise to develop
    food standards, OHMS' SFSA efforts should remain of relatively low
    priority. We believe these last two requested staff positions should be
    assigned instead to work on OHMS's regulatory backlog.
        In all, OHMS staff should be commended for the excellent job
    accomplished in light of an increasingly complex workload.
    Regulatory Backlog
        While we want to commend OHMS for its many accomplishments, we are
    nevertheless concerned about a backlog of critical rulemakings, letters
    of interpretation, exemption and approval requests, and preemption
    determinations. OHMS' budget submission does not provide indicators of
    the extent of these backlogs. Without an understanding of these
    backlogs, the Subcommittee is handicapped in its fiduciary duty to
    ensure that OHMS fulfills its statutory responsibilities.
        OHMS announced as part of its fiscal year 1999 budget submission
    that it had 13 high priority rulemakings in progress. For fiscal year
    2000, the number is 16.\6\ The rulemaking identified in fiscal year
    1999 as OHMS' highest priority has yet to be proposed. These
    rulemakings do not take into account rulemaking petitions, which OHMS
    has accepted but not yet assigned to a specific rulemaking action. In
    December, OHMS identified 30 such rulemaking petitions. The oldest
    dates to 1987.
    ---------------------------------------------------------------------------
        \6\ RSPA fiscal year 2000 Budget Submission, page 65.
    ---------------------------------------------------------------------------
        While OHMS expects to process over 2000 exemptions \7\--a
    commendable effort--it does not discuss the fact that historically it
    fails to process exemption applications within the 180 days set by
    statute.\8\ During the last quarter, OHMS failed to process 48
    applications within the statutory deadline, and gives as a
    justification for the delay in 47 that ``staff review [was] delayed by
    other priority issues or volume of exemption applications.'' \9\
    ---------------------------------------------------------------------------
        \7\ RSPA fiscal year 2000 Budget Submission, page 64 and 65.
        \8\ 49 US.C. 5117(c).
        \9\ 64 FR 2701 (January 15, 1999).
    ---------------------------------------------------------------------------
        Of the 13 petitions for preemption determinations still pending,
    six were filed in the last twelve months. While the oldest four have
    been deferred pending the finalization of an OHMS rulemaking, seven of
    the pending petitions were not processed within the Congressionally
    mandated 180-day turnaround.\10\ The last two are still within the 180-
    day filing period. During 1998, OHMS issued determinations in two of
    the seven petitions. Both have been appealed. OHMS's ability to swiftly
    deal with petitions for preemption is essential to the purpose Congress
    hoped to achieve in granting administrative preemption to DOT, namely
    that the preemption determination process would be an alternative to
    litigation.\11\ A priority of the HMTA is to achieve greater regulatory
    uniformity. Essential to that objective is the ability to respond
    through the preemption determination process to inconsistent non-
    federal requirements that ``creat[e] the potential for unreasonable
    hazards in other jurisdictions and confound shippers and carriers which
    attempt to comply with multiple and conflicting registration,
    permitting, routing, notification, and other regulatory requirements.''
    \12\ Clearly, OHMS's ability to stay on top of its preemption
    obligations is being undermined.
    ---------------------------------------------------------------------------
        \10\ 49 U.S.C. 5125(d).
        \11\ In authorizing the preemption determination process, Congress
    found that ``the current inconsistency ruling process has failed to
    provide a satisfactory resolution of preemption issues, thus
    encouraging delay, litigation, and confusion.'' H.Rept. 101-44, Part 1,
    page 21.
        \12\ Public Law 101-615, Sec. 2.
    ---------------------------------------------------------------------------
    Hazmat Registration and Fees
        As mentioned above, the fees associated with the federal HazMat
    Registration program were a compromise reached with states during the
    1990 reauthorization to fund the HazMat Grants program in exchange for
    clearer authority for DOT to preempt non-federal requirements that
    impede the safe and efficient transportation of hazardous materials.
    The HMTA allows OHMS to require the registration, and thus fees, of
    hazardous materials shippers, carriers, and container
    manufacturers.\13\ Instead, the Office has chosen to register only
    those categorizes of shippers and carriers mandated by Congress.\14\
    ---------------------------------------------------------------------------
        \13\ 49 U.S.C. 5108(a)(2).
        \14\ 49 U.S.C. 5108(a)(1).
    ---------------------------------------------------------------------------
        One of the consequences of this narrow implementation is that the
    Grants program has never been fully funded. OHMS has stated for the
    last two fiscal years that full funding of this program is a priority.
    However, a rulemaking has yet to be proposed. While we remain committed
    to assist OHMS to fully-fund through fees the Grants program as long as
    the ceiling on the total amount to be collected is not raised, we
    continue to believe that the fee must be fair, that OHMS must show that
    it can be enforced, and that these goals can be accomplished without
    adding administrative bureaucracy. We have made recommended to OHMS
    that we believe will go a long way to reach these objectives.
        In the meantime, we believe it important and possible to make
    administrative savings that can be passed on to states through the
    Grants program. OHMS assesses $50 per registrant for administrative
    costs. This assessment--fully 20 percent of the total fee paid--is
    excessive. We had hoped that making the registration number permanent
    and/or allowing multi-year registration would reduce these
    administrative costs. However, we find in OHMS' fiscal year 2000 budget
    request that no such administrative savings are being recommended.
    Furthermore, OHMS is announcing that it must take an additional
    $320,000 from the fees for a total of $1.07 million to pay the banks
    which service the Registration program.\15\ We are incredulous that no
    bank can be found that would perform these services free of charge for
    the opportunity to handle the millions of dollars that flow through the
    Registration program. The Grants program, and by extension, the states
    suffer for each dollar that is diverted for administrative purposes.
    ---------------------------------------------------------------------------
        \15\ RSPA fiscal year 2000 Budget Submission, page 85.
    ---------------------------------------------------------------------------
        As noted above, we have made a commitment to help OHMS meet its
    Registration revenue goal in recognition of agreements reached during
    the 1990 amendments to the HMTA. At the same time, we want reasonable
    assurance that the new fee scheme will not over fund the program
    inasmuch as OHMS is not required to refund excess collections.\16\ We
    would prefer a fee scheme that does not vary from year to year. Of
    particular concern is the financing of the North American Emergency
    Response Guide (NAERG). For good reason, OHMS publishes the NAERG every
    three years. The last two publications of the NAERG, as well as the one
    planned for fiscal year 2000, have been paid for out of Registration
    fees. In fiscal year 2000, $600,000 is requested from the Grants
    portion (as opposed to the ``user fee'' portion) of the Registration
    program fee for the NAERG initiative.\17\ In fiscal year 1999, $700,000
    was requested for this purpose while no funds were requested in fiscal
    year 1998. Rather than spiking the revenue demand on the Registration
    program every few years, we recommend that the funds for this activity
    be averaged and carried over the three-year period between NAERG
    publications so as not to disrupt either the Registration fee schedule
    or the amount of Grants available to states and Indian tribes.
    ---------------------------------------------------------------------------
        \16\ 49 U.S.C. 5108(g)(2)(B).
        \17\ RSPA fiscal year 2000 Budget Submission, page 169.
    ---------------------------------------------------------------------------
    Emergency Planning and Training Grants
        The Emergency Planning and Training Grants funded by industry fees
    have been since 1990 dedicated to cover the ``unfunded'' federal
    mandate that states develop emergency response plans and to contribute
    toward the training of emergency responders. Industry has contributed
    approximately $58 million over the life of the grants program.\18\
    Nevertheless, states continue to request assistance for hazmat
    emergency planning and training initiatives. OHMS acknowledges that
    upwards of 3.2 million emergency responders still need training.\19\ In
    spite of this continuing need, DOT has proposed, as it did in fiscal
    year 1999, to allow up to 25 percent of grant funds to be used to
    provide regulatory compliance training to small businesses.\20\ We
    oppose any efforts to divert grant funds for purposes not originally
    intended by Congress.
    ---------------------------------------------------------------------------
        \18\ Registraion Years 1992-1998.
        \19\ RSPA fiscal year 2000 Budget Submission, page 163.
        \20\ RSPA fiscal year 2000 Budget Submission, page 164.
    ---------------------------------------------------------------------------
        As noted, we find the Administration's proposal to impose user fees
    incongruous with its proposition with these same fees should revert to
    at least the small business segment of the industry to aid compliance.
    A far better way to met the needs of small business, in our opinion, is
    for OHMS to continue to sponsor its training conferences, publications,
    and outreach efforts such as its information hotline. In addition, a
    panoply of private sector training and consulting services is available
    to this community.
    Enforcement
        For virtually all program initiatives, OHMS states that the measure
    of its success will be ``the number of serious reportable hazardous
    materials transportation incidents.'' We believe OHMS has erred in
    setting this as the sole programmatic success measure for its
    inspection and enforcement initiatives.\21\ Such a goal seems
    unrealistic given the fact that the universe subject to OHMS'
    requirements has greatly expanded with the finalization of rules to
    cover the intrastate shipment of hazardous materials. Now OHMS believes
    that the number of hazmat shipments approaches 800,000 and 1.2
    movements a day. Moreover, accidents and incidents can befall even
    those in full regulatory compliance.
    ---------------------------------------------------------------------------
        \21\ RSPA fiscal year 2000 Budget Submission, page 66.
    ---------------------------------------------------------------------------
        We believe a valid success goal would be to fail to find evidence
    of non-compliance. OHMS estimates that the number of cases opened and
    closed have been and will continue to be static. A commendable
    statistic given the increase in OHMS' regulatory universe. However,
    over time OHMS appears to be shouldering a larger and larger
    enforcement backlog. OHMS statistics reveal that there were 69 open
    cases going into fiscal year 1999 and as estimated 169 going into
    fiscal year 2001.\22\ It appears that OHMS' enforcement budget is not
    keeping pace with its workload.
    ---------------------------------------------------------------------------
        \22\ RSPA fiscal year 2000 Budget Submission, page 67.
    ---------------------------------------------------------------------------
                             Compliance Assistance
        One of the greatest successes of the OHMS program is the technical
    and training resources given to the regulated community.\23\ These
    resources include a hotline for responding to technical compliance or
    more general matters of regulatory interpretation, the NAERG, the
    COHMED (cooperative hazardous materials enforcement development)
    program, the OHMS web site, and a CD-ROM modular training series. These
    services and products are either provided free or at comparatively
    nominal cost. Hazardous materials transportation is a highly regulated,
    complex enterprise. As noted above in the section on user fees, small
    businesses--clearly, a focus of OHMS concern--are likely to be the
    greatest beneficiaries of these services because they may not have the
    resources to hire full-time compliance staff. OHMS' compliance
    assistance initiatives also provide the Office with valuable
    information about issues and concerns of the regulated community. It is
    a beneficial interface that should be praised and encouraged.
    ---------------------------------------------------------------------------
        \23\ RSPA fiscal year 2000 Budget Submission, page 76-77.
    ---------------------------------------------------------------------------
    International Activities
        AWHMT has international, albeit North American, membership. Many
    members, domestic and foreign, conduct business across international
    borders. Hazardous materials transportation is a global enterprise.
    Domestic movements are inevitably affected by international agreements.
    We support RSPA's continued and vigorous participation in international
    forums where hazmat transportation policy is set.\24\
    ---------------------------------------------------------------------------
        \24\ RSPA fiscal year 2000 Budget Submission, page 80-83.
    ---------------------------------------------------------------------------
    Information Collection
        We want to underscore the importance and necessity of the hazardous
    materials information system (HMIS).\25\ The data collected and
    maintained in the database is not available from other sources. Not
    only does the HMIS allow OHMS to identify and analyze safety risks for
    regulatory purposes, it also (1) assists non-federal governments to
    identify problematic routes; (2) can be used to focus enforcement
    efforts; (3) is used by industry in its risk management initiatives,
    and (4) can be used to defuse public concern about hazardous materials
    transportation by validating the extraordinary safety record of this
    industry, considering the potential of these materials to cause serious
    harm.
    ---------------------------------------------------------------------------
        \25\ RSPA fiscal year 2000 Budget Submission, page 91-92.
    ---------------------------------------------------------------------------
        OHMS is considering refinements to the system that would allow,
    among other things, electronic filing of reports. These refinements
    should be supported.
                         federal highway administration
        Since 1990, several delegations from the HMTA have been made to the
    FHWA:

    ----------------------------------------------------------------------------------------------------------------
                                                                                         Statutory
                    Reference \26\                              Provision                deadline      Accomplished
    ----------------------------------------------------------------------------------------------------------------
    5105(e).......................................  Inspection vehicles RAM.........        11/16/91              NA
    5109..........................................  Motor Carrier Permits...........        11/16/91              NA
    5112..........................................  HazMat Routing..................              NA   \27\ 10/12/94
    5113..........................................  Unsatisfactory safety rating....              NA         8/16/91
    5119..........................................  Uniform Program.................   \28\ 11/16/96              NA
    112 \29\......................................  Grade crossing safety...........         2/26/95             ???
    121 \30\......................................  Study of hazmat near prisons....         8/26/95              NA
    ----------------------------------------------------------------------------------------------------------------
    \26\ All references to 49 U.S.C. unless otherwise indicated.
    \27\ Among the requirements of this provision is one that requires FHWA to annually publish state route
      designations and restrictions. Since the rule has been published, such a list has been published once--June 9,
      1998. The list contained so many errors that it is unusable.
    \28\ This is the earliest date by which FHWA could issue this rule absence 26 states adopting the Program.
    \29\ Public Law 103-311. (Sec. Sec.  113 and 118 were also delegated to FHWA. However, these sections are not
      hazmat specific and are, therefore, not included in this analysis.)
    \30\ Public Law 103-311.

        It should be telling that of the relatively few hazmat delegations
    given FHWA, only 2 have been accomplished.\31\ In no case where a
    statutory deadline was set has FHWA met that deadline.
    ---------------------------------------------------------------------------
        \31\ All remaing delegations are pending in FHWA's Office of Motor
    Carriers and Highway Safety. This Office was newly created and new
    leadership has been assigned. It is unknown at this time what priority
    the new leadership may put on accomplishing these hazardous materials
    delegations.
    ---------------------------------------------------------------------------
        Against this background, the hazmat motor carrier community has
    been active in the development of the so-called ``Uniform Program'' and
    anxious for the implementation of Sec. 5119. In 1990, we were only
    aware of 30-40 state-based, non-reciprocal hazmat registration/
    permitting programs. This compliance burden led Congress to enact the
    Uniform Program compromise wherein the right of states to issue hazmat
    registrations and permits would be recognized but only if the forms and
    procedures for the registrations and/or permits were uniform and
    reciprocal. A working group of state and local officials convened to
    make recommendations on how to achieve this task has accomplished all
    that was required by the law, including the forwarding of
    recommendations to FHWA on November 17, 1993.
        Not knowing what the working group would recommend, Congress
    provided that DOT would retain oversight of the Program, issuing rules
    to implement only those recommendations ``with which the Secretary
    agrees.'' \32\ When Congress enacted Sec. 5119, it had no idea how
    quickly the states would move to adopt the Program or how quickly DOT
    would issue implementing rules. Assuming that either DOT or the states
    would rush to implement this Program, a two-part effective date for
    rules implementing the Uniform Program was enacted. DOT was told it
    could not issue rules sooner that 3 years after receiving the working
    group's recommendations. However, DOT was told that if 26 states join
    the Program, the Department would have at least 90 days to issue rules.
    ---------------------------------------------------------------------------
        \32\ 49 U.S.C. 5119(c)(1).
    ---------------------------------------------------------------------------
        As it turned out, neither DOT nor the states rushed to implement
    this Program. The 3-year prohibition on issuing rules passed on
    November 17, 1996. To date, 6 states have voluntarily joined the
    Program. Many states say they are reluctant to come on board because
    DOT has never disclosed which of the working group recommendations it
    agrees with, and before they invest resources to implement the Program,
    the States want to know what the final Program will look like. In the
    meantime, we have now identified 64 non-uniform, non-reciprocal state-
    based registrations and/or permits imposed on motor carriers
    transporting hazardous materials or subsets thereof.\33\
    ---------------------------------------------------------------------------
        \33\ Since 1990, we are also aware of 10 local permits. Three of
    those permits were voluntarily repealed by the issuing authority when
    confronted by industry. Once was never implemented. Six remain in
    effect. The Uniform Program vests registration/permitting rights with
    states. Only in rare instances would localities have any such rights
    under the Program, and even when they would have such rights, the
    locality would have to implement the same Uniform Program.
    ---------------------------------------------------------------------------
        We are mystified why FHWA has not embraced this Program. We worked
    very hard to ensure that the conditions to receive a permit were based
    on federal requirements.\34\ At the same time, FHWA's failure to
    implement this Program has left motor carriers faced with diverse non-
    uniform, non-reciprocal requirements only one remedy--to request DOT or
    the courts to preempt these requirements. Of the 23 petitions for
    preemption filed with DOT since 1990, 13 stem from non-federal permit
    requirements and associated fees. In one case, a court cited FHWA's
    failure to proceed with the Uniform program rulemaking as one reason to
    overturn RSPA's preemption of a state permit requirement.\35\ Had the
    Uniform Program been in place, none of these proceedings would have
    been necessary. These filings have resulted in an unnecessary
    expenditure of time, energy and other resources by RSPA and all other
    concerned parties.
    ---------------------------------------------------------------------------
        \34\ This is true except for the so-called ``Part III.'' The Part
    III disclosure is an optional permit condition that states may impose
    on motor carriers transporting hazardous or radioactive waste. Two of
    the six participating states have implemented Part III. Although these
    more stringent, additional requirements directly impact the industry
    represented by the AWHMT, we nevertheless still endorse the Program
    because the benefits of uniformity and reciprocity outweigh the
    additional requirements (as presently constituted) in Part III.
        \35\ Massachusetts v. U.D. department of Transportation, 93 F.3d
    890 (1996), reversing PD-1(R), 57 FR 58848 (December 11, 1992).
    ---------------------------------------------------------------------------
        At the same time, the haphazard approach to addressing the question
    of state and local registration and permitting programs has exacerbated
    the very ``patchwork'' of state and local regulations which the HMTA,
    and Sec. 5119 specifically, were enacted to address. To the chagrin of
    many, FHWA has proposed to revisit the Congressional registration/
    permitting directives currently found at 49 U.S.C. 5109, 5119, and
    5105(e) through further study.\36\ No matter the excuse, we find it
    insupportable that FHWA has failed to achieve these Congressional
    goals. We recommend that Congress urge the Secretary to redelegate and
    reallocate funding from FHWA to OHMS to accomplish these objectives.
    OHMS has proved competent and capable of responding to the necessary
    demands of Congress to ensure that hazardous materials are and continue
    to be transported with an extraordinary high degree of safety and
    efficiency.
    ---------------------------------------------------------------------------
        \36\ DOT HMTA reauthorization proposal to add Sec. 5128 to 49
    U.S.C. Chapter 51, dated February 16, 1999.
    ---------------------------------------------------------------------------
                                   conclusion
        The transport of hazardous materials is a multi-billion dollar
    industry that employs millions of Americans. It has been accomplish
    with a remarkable degree of safety in large part because of the uniform
    regulatory framework authorized and demanded by the HMTA. Within the
    Federal Government, OHMS is the competent authority for matters
    concerning the transportation of these materials. Its role is this
    regard should be strengthened. Despite productivity that averages 40
    administrative actions a day, however, this small agency has a backlog
    of correspondence, rulemaking petitions, and technical applications for
    exemptions and approvals. We have recommended that more, not less,
    responsibility be delegated to OHMS. We have made this recommendation
    because the Office has proven over time to be approachable, determined
    to give fair hearing to all, and capable of making a decision, though
    we may not always agree. We know OHMS will make the most of any
    resources given.
        Thank you for your attention to these issues. Please contact
    Cynthia Hilton, AWHMT, or me if additional information is needed on
    these issues.
                                     ______

    Prepared Statement of the Interstate Natural Gas Association of America

        Mr. Chairman and Members of the Subcommittee, the Interstate
    Natural Gas Association of America (INGAA) appreciates the opportunity
    to submit testimony for the record regarding the fiscal year 2000
    funding for the Office of Pipeline Safety (OPS), which is part of the
    Research and Special Programs Administration (RSPA) at the Department
    of Transportation (DOT).
        The Interstate Natural Gas Association of America is the trade
    association that represents virtually all of the interstate natural gas
    transmission companies operating in the United States, as well as
    natural gas transmission companies in Canada and Mexico. INGAA's member
    companies transport over 90 percent of the natural gas consumed in the
    United States through over 280,000 miles of interstate pipeline.
        ``The Accountable Pipeline Safety and Partnership Act of 1996''
    (Public Law 104-304) reauthorized the pipeline safety program. This
    law, which was agreed to by both the industry and the Office of
    Pipeline Safety set authorization amounts for fiscal year 2000.
    $30,000,000 is to be funded from pipeline user fees while an additional
    $7,718,000 would come from other revenue sources such as the Oil Spill
    Liability Trust Fund for a total budget of $37,718,000.
        Once again the Administration budget breaks both caps. The
    Administration is proposing $38,187,000 of which $33,939,000 is to come
    from pipeline user fees and $4,248,000 from the Oil Spill Liability
    Fund. INGAA continues to supports the caps of $30,000,000 and
    $7,718,000 respectively that we agreed to in Public Law 104-304.
        As we have stated and continue to state, pipeline safety is a top
    priority for all of our member companies. While natural gas pipelines
    have a good safety record, we are continuously seeking ways to improve
    our record (see enclosed chart). Currently, we are working with the
    Office of Pipeline Safety on developing more sophisticated ways to
    manage risk. A number of our member companies have applied to
    participate in the risk demonstration program that was approved as part
    of Public Law 104-304. One company (Natural Gas Pipeline which is part
    of KN Energy) has been approved. We anticipate two other natural gas
    pipeline projects will receive approval in the near future. This
    demonstration program will permit companies to tailor their safety
    programs to focus more accurately on addressing the actual risks that
    challenge various segments of their pipelines.
        Third party damage is a significant cause of pipeline accidents and
    the primary cause of public injuries and fatalities. INGAA supports the
    Administration's proposal that $1,400,000 be drawn down from the
    previously collected funds held in the Pipeline Safety Reserve to
    provide grants to states for one-call notification and public education
    activities.
        INGAA also strongly supports, over and above the budget request for
    OPS, that an additional $1,000,000 be taken from general funds to
    provide grants to states that improve their one-call systems as a
    result of passage of ``Comprehensive One-Call Notification'' which was
    part of ``The Transportation Equity Act for the 21st Century (TEA-21)
    (Public Law 105-178). This legislation encourages states to improve
    their underground damage prevention efforts while giving them the
    flexibility to address their individual concerns. Underground
    facilities that benefit from this legislation include natural gas
    facilities, oil facilities, telecommunications facilities, electric
    facilities, water and sewer facilities, and cable lines. Congress
    specifically stated its desire to use general revenues for this program
    because improvements in one-call systems benefit a wide variety of
    underground facilities, excavators and the general public--not just
    interstate pipelines.
        INGAA supports an increase in the amount of funds OPS obtains from
    the Oil Spill Liability Trust Fund. OPS is increasingly focusing a
    number of its resources on environmental policy, ground water
    protection, oil spill response, and coordination with states regarding
    hazardous liquid pipelines. The Oil Spill Liability Trust fund was
    established for the purpose of funding these activities. OPS has a
    number of responsibilities under the Oil Pollution Act of 1990 and it
    is appropriate that these activities be funded directly from that trust
    fund.
        In the R&D area, INGAA supports funding for non-destructive
    evaluation of $400,000 from pipeline user fees. We also support an
    additional amount up to $400,000 from the Oil Spill Liability Trust
    Fund for this program. Continued technological improvement of these
    ``smart pigs'' to improve their detection of corrosion, mechanical
    damage and cracks will be a significant factor in decreasing accidents.
        We also can support providing $400,000 from user fees and a similar
    amount of money from the Oil Spill Liability Trust Fund for mapping as
    this project will include mapping environmentally sensitive areas that
    are more susceptible to damage from liquid spills.
        State pipeline safety representatives have been involved in the
    development of the risk management demonstration program. They want to
    be involved in evaluating risk management as a safety strategy and to
    play an active role in reviewing projects as they develop. As currently
    only interstate facilities have applied for this demonstration program,
    INGAA can support continued funding of state grants of $500,000 to
    allow participation by the states until the report on the demonstration
    program is submitted to Congress. We also recommend that a portion of
    these grants ($250,000) comes from the Oil Spill Liability Trust Fund
    as five petroleum companies have plans approved by OPS. These plans
    should assist these companies in further reducing any leaks or spills.
    Once this program is established, it should be appropriate to consider
    reducing or sunsetting these state grants as the need for meetings to
    develop and educate states should diminish.
        INGAA wants to work with the Subcommittee and OPS to use our
    resources efficiently to continue to develop risk assessment and risk
    management techniques and improve technology to make moving natural gas
    by pipeline ever safer. We thank the Subcommittee for the opportunity
    to submit this testimony on the Office of Pipeline Safety budget for
    fiscal year 2000.
    [GRAPHIC] [TIFF OMITTED] TNDPT.006

                                     ______

                                U.S. COAST GUARD

              Prepared Statement of the Fleet Reserve Association

        Mr. Chairman and distinguished members of the Subcommittee: The
    Fleet Reserve Association (FRA) thanks you for the opportunity to
    present its position on the fiscal year 2000 U.S. Coast Guard Budget.
    In addition, the Association appreciates the Subcommittee's support in
    securing increased Coast Guard funding via last year's Omnibus
    Appropriations Act.
        The FRA was established in 1924 and now represents 155,000 active
    duty, reserve, and retired members of the Coast Guard, Navy, and Marine
    Corps--collectively known as the Sea Services. The association was
    granted a Federal Charter by Congress in 1996 in recognition of its
    work on personnel issues. FRA is a founding member and the leading
    enlisted association in The Military Coalition (TMC), a consortium of
    30 military and veterans organizations collectively representing over
    five million members. With that in mind, personnel and quality of life
    issues are the focus of this statement.
                          the coast guard's importance
        Although often operating out of the public spotlight, the United
    States Coast Guard is integral to our nation's well being and the
    safety of its citizens who rely upon search and rescue support and the
    safety and security the service maintains along our coastal areas and
    waterways.
        In 1998, the men and women of the Coast Guard were responsible for
    saving 3,800 lives and ensuring the safe passage of over one million
    commercial vessels through U.S. harbors. The service performed 54,000
    merchant vessel inspections, 141,000 pleasure craft examinations,
    boarded over 14,000 fishing vessels and completed 900 inspections of
    offshore drilling units. In addition, successful drug interdiction
    efforts resulted in the confiscation of nearly 83,000 pounds of cocaine
    and 31,000 pounds of marijuana. Beyond these efforts, the Coast Guard
    ensured compliance with environmental and safety laws and responded to
    water pollution and hazardous material releases, maintained nearly
    50,000 aids to navigation, and interdicted 3,600 illegal migrants. This
    overview illustrates the Coast Guard's immense mission requirements and
    broad range of essential services.
        Because of its vital importance to our nation, the Coast Guard
    deserves a more stable and consistent annual budget. The patchwork
    approach to funding last year resulted in heavy reliance on
    supplemental funding authorized as part of the massive Omnibus
    Appropriations bill. Funds allocated in supplemental legislation are
    not considered in calculating subsequent budget requests which
    compounds the challenge of planning and executing the next year's
    mission requirements.
        FRA believes the Coast Guard deserves better and asks you to help
    ensure the allocation of adequate resources during each budget cycle--
    especially for pay and other important quality of life programs to
    ensure parity with the Department of Defense. Another option is
    shifting to a two-year budget cycle.
        FRA strongly supports increased Coast Guard funding for fiscal year
    2000. There is a disconnect between the Administration's budget which
    will only enable the Coast Guard to maintain basic services, and the
    increasing importance of drug interdiction work and growing mission
    requirements. Increased budget allocations are required to support
    these efforts, ensure readiness and fund important personnel programs.
    Also supporting this is speculation that the Council on Roles and
    Missions of the U.S. Coast Guard will likely include a thorough
    examination of new threats to the U.S. and expand future Coast Guard
    mission requirements.
        As FRA noted last year and referenced above, parity with DOD
    regarding funds to underwrite pay hikes and pay table reform, access to
    quality health care, equitable retirement benefits, and retiree cost of
    living adjustments (COLAs) are especially important. Without adequate
    funds for these programs, the Coast Guard must dip into already tight
    operations accounts--a practice which adversely affects its ability to
    fulfill growing mission requirements.
        Key areas of concern are detailed in the following sections.
                                  compensation
        Full Employment Cost Index (ECI) active duty pay adjustments remain
    a top priority for FRA and The Military Coalition. The Administration
    request for a 4.4 percent active duty pay increase in fiscal year 2000
    is enthusiastically welcomed followed by full Employment Cost Index
    (ECI) adjustments in subsequent years. If en acted, this will help
    reverse the 13.5 percent pay gap between military and civilian pay
    levels which is the result of capped active duty pay adjustments in 12
    of the past 17 years.
        Pay table reform is also part of the Administration's budget with
    targeted pay hikes set to become effective on 1 July 2000. FRA
    appreciates the inclusion of funds in the Coast Guard budget to cover
    these important changes, however additional funding may be required for
    targeted bonuses in critical rates. Members of the Subcommittee are
    also cautioned to be alert to the possibility of Congress enacting
    higher pay increases and targeted pay rates. Fast track legislation (S.
    4) has been approved by the Senate which includes higher pay
    adjustments and other benefit improvements. If enacted, the higher 4.8
    percent pay hike alone will cost the Coast Guard approximately $5
    million more than currently budgeted for the 4.4 percent pay raise.
        FRA is encouraged that Congress is responding to the over riding
    need to close the military pay gap, reform the pay tables and repeal
    the Military Retirement Reform Act (MRRA), of 1986, known as REDUX. And
    after years of declining defense budgets, the Administration is
    proposing increased funding for fiscal year 2000. This is in
    recognition of serious retention, recruiting and morale problems and
    the fear of returning to the ``hollow forces'' experienced in the early
    1970's.
        This is especially important to maintaining military personnel
    readiness which is dependent upon adequate manning levels and the
    achievement of recruiting goals to ensure the flow of highly trained
    and motivated personnel into the career force.
        Realizing the pending retention crisis and responding to concerns
    expressed by its members, FRA took the lead in urging the introduction
    of legislation in the 105th Congress to repeal the MRRA. In conjunction
    with this initiative, the Association developed a survey to ascertain
    the impact of MRRA on career decisions. A significant number of U.S.
    Coast Guard personnel responded to the seven-part questionnaire
    distributed to senior enlisted leaders and posted on FRA's web site. A
    total of 3,403 active duty personnel answered the survey and of that
    total 2,175 (64 percent) answered yes when asked, ``Is the REDUX plan a
    significant issue in evaluating your career plans?''
        FRA's call for a total repeal of REDUX is endorsed by all member
    organizations of The Military Coalition.
        Although this distinguished subcommittee does not have jurisdiction
    over this issue, it is important to understand that the Administration
    is proposing a partial repeal of the MRRA. This partial repeal will
    retain limited retired pay cost of living adjustments for both the
    Department of Defense and the Coast Guard.
        Congressional action on these key compensation issues sends a
    powerful message to active duty personnel, many of whom are frustrated
    with the pay gap, three increasingly diminished retired pay programs,
    and the demanding pace of operations which requires Coast Guard
    personnel to work an average of 14 to 16 hours per day. These
    challenges coupled with the demands to complete mission requirements
    without adequate equipment, maintenance or complete personnel support
    have prompted many mid-career personnel to seek separation from active
    duty.
        Also contributing to this scenario is the diminishing propensity of
    young people to even consider a military career.
                                  health care
        The first and foremost concern for Coast Guard personnel
    anticipating a new duty assignment is access to health care for both
    the member and his/her dependents. Duty assignments range from Coast
    Guard Stations near large coastal metropolitan and resort areas to
    those in remote areas supported by only a few personnel.
        These remote assignments are also far removed from military health
    care treatment facilities (MTFs). Only about half of Coast Guard
    families within the U.S. can participate in DOD's TRICARE Prime managed
    care program which results in many having to utilize the more costly
    TRICARE Standard program which covers only 80 percent of allowable
    medical charges. Compounding this is the fact that allowable charges
    can be less than what the care facility charges placing what often is a
    significant financial burden on personnel and their families.
        FRA is encouraged that Congress enacted as part of the Fiscal Year
    1998 Defense Authorization Act, a new program known as TRICARE Prime
    Remote to help correct this situation. The Association urges your
    support in calling for timely implementation of this important program.
    Please also note the challenge Coast Guard personnel and their families
    face with claims processing procedures which require them to deal with
    a civilian contractor hired by DOD to administer TRICARE. They question
    who is their advocate and why they are caught in the middle of this new
    system.
        TRICARE also requires retirees to pay annual enrollment fees for
    care but Medicare-eligible retirees are forced out of the TRICARE
    system and onto Medicare at age 65. This is an affront to the
    government's commitment to provide health care for life to career
    military personnel and their families. Thanks to strong support from
    you and other members of Congress, a demonstration project allowing
    Medicare-eligible uniformed services retirees the option of
    participating in the Federal Employees Health Benefit Plan (FEHBP) is
    beginning next January. FRA appreciates your support for this
    demonstration and alerts you to the need to permanently authorize this
    option along with Medicare subvention. A demonstration of the latter
    was authorized in 1997 and continues at various locations throughout
    the United States.
                             recruiting challenges
        The Coast Guard is currently short 700 enlisted personnel and 400
    reservists. These may appear to be small numbers, but when weighed
    against the total size of the Coast Guard and the increasing
    operational requirements, it is a significant short age. Manpower
    losses cause increased workloads and often result in temporary
    personnel assignments from one command to another to cover the gaps.
    Accordingly, FRA strongly supports increased end strength
    authorizations to ease the growing strain on the force to accomplish
    mission requirements.
        A major challenge for Coast Guard recruiting is effectively
    competing with high profile, expensive ad campaigns by its DOD sister
    services. Additionally, as noted last year, recruiters must contact an
    average of 100 leads for each recruit brought into the Coast Guard.
        FRA appreciates the authorization of funds for additional
    recruiters and a heightened Coast Guard recruiting program. In
    addition, FRA strongly supports the addition of 50 recruiters and
    expanded recruiting efforts in the Administration's fiscal year 2000
    budget. The strong economy coupled with issues addressed above are
    formidable factors in meeting this challenge.
        Noteworthy in the fiscal year 2000 authorization request, is the
    objective of maintaining the Coast Guard Selected Reserve end strength
    at 8,000. However, an examination of the proposed budget finds an
    appropriation request to support only 7,600 reservists. FRA requests
    your approval of an appropriation of $77 million vice $72 million to
    achieve the end strength goal with necessary resources for training and
    full support. The increase is more than justified by the increased
    reliance on reserve support in filling the gaps resulting from the
    heightened operational commitments and manpower shortage.
        FRA asks for the Subcommittee's support for enhanced tuition
    assistance benefits--something important to attracting more recruits.
    The DOD annual tuition cap is $3,500 while the Coast Guard must
    maintain a $1,000 cap due to limited funding. This is another example
    of the importance of Coast Guard parity with the other services.
                                    housing
        Only about one quarter of Coast Guard personnel live in government
    housing units with the others living in local communities and drawing
    the basic allowance for housing (BAH). Unfortunately, many personnel
    must supplement the cost of housing because BAH fails to cover all
    costs. Compounding this is the fact that many Coast Guard personnel are
    assigned near pricey resort areas and are often required to live some
    distance from their duty station to secure lower cost housing. In
    addition, there is limited rental housing in some areas.
        To help remedy the situation, the Coast Guard has developed a
    subsidy for leased housing to augment BAH rates. FRA urges adequate
    funding to sustain this program so not to further limit its
    availability.
        FRA continues to hear concerns from Coast Guard personnel about the
    accuracy of housing cost data in remote locations--duty sites for
    thousands of Coast Guard enlisted personnel. Once fully implemented,
    the new BAH survey data may provide a more accurate cost data in all
    areas of the country. This data is the basis for calculating BAH rates
    and its collection is under the purview of the Department of Defense
    which places a much higher priority on data from larger metropolitan
    areas. With most of its stations along our coasts, the Coast Guard does
    not have the latitude to reallocate freed resources from less costly
    areas to augment the more expensive locales.
        Congress must appropriate adequate funds to underwrite BAH to cover
    actual costs. Covering these expenses is especially challenging for
    junior enlisted personnel. This burden coupled with potentially high
    health care costs noted earlier, provides a major disincentive for
    continuing on active duty.
        It's hard to believe Administration pronouncements about the
    importance of taking care of active duty personnel when it does not
    propose adequate funding for these and other important quality of life
    programs.
        Finally, FRA must mention the importance of child care. Although
    the Coast Guard has adopted DOD standards, it does not have parity with
    regard to the cost of care. DOD cost shares with personnel on a one to
    one ratio while the Coast Guard has no such provision which results in
    higher costs to parents utilizing Coast Guard centers. These along with
    physical fitness centers and other facilities are very important to the
    quality of life for Coast Guard personnel and their families.
                        dole commission recommendations
        FRA calls your attention to the recommendations included in the
    Dole Commission on Servicemembers and Veterans Transition Assistance.
    The panel recently released its findings after 18 months of evaluation.
    Over 100 recommendations for improving personnel benefits are included
    and, if enacted, some may impact upon the Coast Guard's budget. Space
    does not permit a complete listing of the recommendations, however they
    address education, the need for a military thrift savings plan,
    healthcare improvements and enhanced employment and training programs.
    Should your distinguished panel require details of specific
    recommendations, please contact FRA.
                                   conclusion
        The Association appreciates the strong commitment of this
    distinguished panel to maintain a strong and highly effective Coast
    Guard. The basis for achieving this goal is a well trained, highly
    motivated force dedicated to its mission. Today the people who comprise
    this force are enduring expanded mission requirements, overlapping duty
    assignments, and often frequent moves. These increasing demands often
    result in minimal family or off-duty time.
        The dedicated personnel of the Coast Guard deserve increased pay
    and other benefits in recognition for exceptional service. FRA asks for
    your support of enhanced quality of life programs, to ease the
    important recruiting and retention challenges, to improve readiness and
    meet the increasing mission requirements as our Coast Guard men and
    women look to the new millennium.
        Thanks again for your outstanding support and I stand ready to
    answer any questions you may have.
                                     ______

     Prepared Statement of Captain Fred R. Becker, Jr., JAGC, USN (Ret.),
      Director, Naval Affairs, Reserve Officers Association of the United
                                     States

        The Reserve Officers Association is a private, member-supported,
    congressionally chartered organization. It receives no federal other
    public funds.
        Mr. Chairman and members of the Committee: It is my pleasure to
    address this committee concerning the fiscal year 2000 budget request
    for the United States Coast Guard.
        First and foremost, the Reserve Officers Association would like to
    express its profound gratitude to this committee, and to the Congress,
    for their strong and vigorous support of the Coast Guard and Coast
    Guard Reserve during the fiscal year 1998 and 1999 authorization and
    appropriations process. ROA's testimony during the 105th Congress
    addressed a number of concerns regarding the Coast Guard Reserve,
    particularly with regard to funding and recruiting. In recognition of
    the vital support provided to the nation by today's Coast Guard
    Reserve, this subcommittee and the Congress responded. Specific
    examples of your support in fiscal year 1999 included:
      --A letter from the House Coast Guard and Maritime Transportation
            Subcommittee expressing concern about the Coast Guard's
            inability to recruit to authorized and appropriated end-
            strength and setting forth the belief that, ``the Coast Guard
            Reserve must maintain an authorized and appropriated end-
            strength of at least 8,000 to remain a functional component of
            the Coast Guard.''
      --This subcommittee's work with the House Appropriations Subcommittee
            on Transportation to increase the level of funding, in the
            fiscal year 1999 Appropriations Act, for Reserve training, from
            the $67 million requested by the administration, to $69
            million;
      --This subcommittee's work with the House Appropriations Subcommittee
            on Transportation to limit, in the fiscal year 1999
            Appropriations Act, the amount of Reserve training funds that
            can be transferred to operating expenses of the Coast Guard, to
            $20 million, thereby providing an additional $2.5 million for
            Reserve training;
      --This subcommittee's work with the House Appropriations Subcommittee
            on Transportation to add, in the fiscal year 1999 supplemental
            Appropriations Act, $5 million for Coast Guard Reserve
            operating, maintenance, and training expenses, with the highest
            priority for use of the $5 million in enhancing drug
            interdiction activities.
        On behalf of Coast Guard Reservists serving around the globe we
    thank you for this vital support!
        To begin, let me say that we recognize that providing the critical
    resources to the Coast Guard, and the Coast Guard Reserve, continues to
    be a distinct challenge. In this regard, we thank you for your
    continued innovation and flexibility in supporting the Coast Guard's
    daily life-saving operations, including recognizing the Coast Guard's
    national defense function through the provision of funding from
    Department of Defense appropriations.
                           coast guard budget request
        The Coast Guard has streamlined and reduced resource requirements
    to the breaking point. At the same time, responsibilities and work of
    the Coast Guard have continued to increase. Consequently, appropriate
    funding is required for the Coast Guard to remain ``Semper Paratus.''
        Today's Coast Guard is an extremely cost-effective, flexible, and
    responsive organization. It makes a daily difference in the quality of
    life for Americans by saving lives, enforcing the nation's laws,
    guarding our nation's maritime borders, and protecting our environment
    and natural resources, as well as providing a readily available
    augmentation force to the Department of Defense in times of national
    emergency. Each and every day, the Coast Guard, augmented by the Coast
    Guard Reserve provides an extraordinary return on investment to the
    American People. In fiscal year 1998 alone, the Coast Guard:
      --Saved more than 3,800 lives, and assisted another 50,000 people in
            distress;
      --Saved more than $2 billion in property;
      --Interdicted shipments of over 82,000 pounds of cocaine and 31,000
            pounds of marijuana;
      --Responded to more than 12,500 reports of water pollution;
      --Intercepted more than 3,600 illegal migrants before they reached
            U.S. shores;
      --Maintained more than 49,000 aids to navigation that helped ensure
            the safe navigation of ships that carry 95 percent of the
            nation's imports and exports;
      --Performed more than 54,000 inspections on merchant ships;
      --Inspected more than 14,000 fishing vessels at sea to verify
            compliance with applicable laws and regulations; and,
      --Conducted more than 141,000 courtesy marine examinations of
            recreational vessels.
        As the Coast Guard continues to streamline, funding less than that
    required--to absorb increases from pay raises and other required cost
    of living adjustments, as well as to recapitalize, replacing vessels
    and aircraft that are nearly worn-out--will result in the reduction of
    vital public services. Accordingly, to avoid any adverse impact on
    future service, any further cost reductions must be achieved through
    investment in new, more efficient capital equipment and technology and
    increased use of the Reserves.
        The Coast Guard's fiscal year 2000 budget request would allow the
    Coast Guard to sustain basic services. Budget data has not yet been
    released with regard to the Acquisitions, Construction and Improvements
    (AC&I) account, apparently because of issues surrounding the funding of
    the Deepwater program. Notwithstanding, we believe that the AC&I
    account, which provides for the vital acquisition, construction and
    improvement of vessels, aircraft, information management resources,
    shore facilities and aids to navigation required to execute the Coast
    Guard's mission and achieve its performance goals, must be fully
    funded. Simply stated, the Coast Guard will not be able to function
    efficiently in the future without the modern equipment provided through
    the adequate funding of this account. Future cost reductions in the
    Coast Guard will have to depend on efficiencies derived from
    investments in new, more efficient capital equipment and technology and
    increased use of the Reserves. In this regard, we believe that the
    fiscal year 2000 funding required for Deepwater program is at least $34
    million, comprised of $15 million in funding for three conceptual
    design teams ($5 million per team) and $19 million to fund Coast Guard
    projects.
        Funding of at least $34 million for the Deepwater Program is
    required because, at present the Coast Guard operates ships with high
    personnel and maintenance costs. The average age of the Coast Guard's
    deepwater cutters is 25 years. The Coast Guard's fleet of high and
    medium endurance cutters is older than 37 of the 41 naval fleets
    worldwide. Some of the Coast Guard's vessels have been in service for
    more than 50 years. Seven of the Coast Guard's 9 classes of deepwater
    assets reach their planned service life in the next 15 years and a
    major acquisition project typically takes at least 10 years from
    inception to the fielding of the first new asset.
        Simply stated, the continued protection of the public, at a lower
    cost, requires appropriate investment in the AC&I account--to enable
    the Coast Guard to design more capable and less labor-intensive ships
    and aircraft. In this respect, existing Coast Guard deepwater assets
    lack fundamental capabilities necessary for efficient and effective
    mission performance. These shortfalls include:
      --Inadequate ship speed (to interdict go-fast boats);
      --Poor sensors (the ever-increasing demand for nighttime operations
            degrades target detection and hampers surveillance);
      --Limited asset interoperability (some medium endurance cutters lack
            flight decks and the Coast Guard's H-60 Jayhawk helicopters
            cannot safely deploy on cutters);
      --Inadequate communications (the Coast Guard's ships and aircraft are
            linked only by voice, deployed ships and aircraft lack real-
            time or near-time access to essential mission databases, and
            ships and aircraft have limited ability to share either
            tactical information or situational awareness).
        In addition to the foregoing, because the Coast Guard's cutters are
    based on technology that is 30 years old, today's crew sizes are larger
    than would be than would be required with more modern technology.
    Furthermore, as the Coast Guard's assets continue to age, they place
    greater demands on the Coast Guard's logistics infrastructure as
    manufacturers cancel production and support costs for outdated parts,
    equipment, and maintenance increase, degrading operational
    availability. Therefore, without the necessary investment in the AC&I
    account, pressure will continue to build on the operational account, as
    anticipated lower personnel and maintenance costs that can only be
    achieved through investment, become unachievable.
        In summary, investment in the AC&I account provides the requisite
    funding for the Coast Guard's Deepwater Program, the Coast Guard's plan
    to modernize its major cutters, aircraft, and command, control,
    communications, computer, intelligence, surveillance, and
    reconnaissance (C\4\I) systems. The Deepwater Program is an absolute
    requirement--to sustain the Coast Guard's capability for providing
    services critical to America's public safety, environmental protection,
    and national security for the future--through the replacement of assets
    that are at, or fast approaching, the end of their service lives.
        It should also be noted that the Coast Guard's medium and high
    endurance cutters, acquired through the Deepwater Program, would be
    readily available to support critical Department of Defense operations.
    These operations would include maritime surveillance and interception,
    convoy escort, search and rescue, and enforcement of maritime
    sanctions, as was the case during Operation Desert Storm. The
    employment of the Coast Guard in this capacity is extremely cost
    effective as it permits Navy ``high end'' ships to be more effectively
    employed in higher threat/combat operations. In addition, as the Navy
    surface combatant fleet grows smaller, the future cutter provides an
    extremely cost-effective ``dual capability.'' In this respect, the
    Coast Guard is not only able to perform its peacetime missions, but
    also provide the vital operational capabilities required by the Navy
    and the Department of Defense in the 21st century.
        In short, we believe that the Coast Guard's Deepwater Program,
    while forging new ground for federal acquisitions, is critical to the
    nation. The program's systems approach is truly unique and ambitious in
    the realm of government acquisitions and the Coast Guard is to be
    congratulated for embracing it.
                           selected reserve strength
        The fiscal year 2000 administration request is to maintain the
    Coast Guard Selected Reserve's authorized end-strength at the 8,000-
    level, whereas the appropriation's request is for 7,600. As the Coast
    Guard Reserve's appropriated end-strength for fiscal year 1999 is 8,000
    and the Coast Guard Reserve end-strength continues to increase to meet
    the Congress' mandate of 8,000 Coast Guard Reservists, we have very
    serious concerns regarding the administration's proposal for an
    appropriated end-strength of only 7,600. We also have concerns
    regarding an authorized end-strength of only 8,000, in view of the fact
    that the commandant has conducted an in-depth study that clearly
    indicates and justifies a requirement nearly 12,300 Coast Guard
    Reservists. In this regard, we are extremely grateful that the House
    Coast Guard and Maritime Transportation Subcommittee has, by letter
    dated December 17, 1998, requested a copy of this report.
        In recent years, the Congress, the administration, and Coast Guard
    leadership have increasingly recognized the unique capabilities of the
    Coast Guard Reserve. It is now well recognized that the Coast Guard
    Reserve has clearly become a value-added resource for peacetime day-to-
    day operations, as well as a highly cost-effective source of needed,
    trained personnel to meet military contingency and other surge
    requirements. For example, as noted by this subcommittee, Coast Guard
    Reservists provided 25 percent of the total surge needed for the very
    successful anti-drug initiative Frontier Shield.
        In view of the foregoing, a request to fund only 7,600 Reservists
    simply makes no sense at a time when the Coast Guard is making
    significant strides in correcting the end-strength shortfall that has
    existed over the past several years. The Coast Guard has increased its
    recruiting capabilities and put into place a multi-year plan to get the
    Coast Guard Reserve back to strength. As of January 25, 1999 Coast
    Guard Reserve end-strength was at 7,579, having increased from a 2-year
    low of 7,243 in April 1998. Of further note, as of January 25, 1999,
    there were 176 Reservists, on extended active duty and long-term active
    duty for special work, filling active duty shortfalls. The number of
    Reservists on active duty is the direct result of the Coast Guard's
    solicitation of volunteers from the Selected Reserve to serve on
    extended active duty to fill full-time active duty billets for periods
    of 2 to 4 years.
        In addition, it must be noted that the Coast Guard has made
    significant headway in intensifying its Reserve recruiting over the
    past year. Such efforts have included the designation of at least 38
    recruiters to access Reservists. In addition, there has been heightened
    attention to Reserve recruiting. Rear Admiral Fred L. Ames, Assistant
    Commandant for Human Resources, has directly addressed the problem in
    two separate issue of Flag Voice. Of particular note, Admiral Ames'
    Flag Voice 5, dated September 4, 1998, states,

              Reservists aren't just a part time resource. More than 130
            Reservists are answering the call to extended active duty
            during our current shortage of `regulars.' More than 187
            reservists are currently on * * * (active duty) assisting units
            in various special projects. Still more Reservists perform
            their annual two-week duty during peak operational periods. We
            benefit daily from these members' availability.

        In addition, Rear Admiral Thomas J. Barrett, Director, Reserve and
    Training, has sent letters to the Atlantic and Pacific Maintenance
    Logistic Commanders and to every drilling Reservist regarding the
    recruiting problem. Admiral Barrett's letters, dated August 5, 1998,
    provide additional direction and background, stating:

              Reserve personnel shortages coupled with active-duty
            shortfalls have deeply impacted Coast Guard missions * * *. The
            absence of these personnel (Reservists) hampers the Coast
            Guard's ability to execute our missions and leaves a greater
            burden on those already in service. Despite our best efforts,
            personnel shortages in both the Reserve and active components
            are deeply impacting Coast Guard missions. This year, we were
            unable to fully staff the Ninth District's Operation
            Summerstock (Great Lakes) from the Coast Guard Reserve alone.
            More and more calls for Reserve support are coming up short for
            the simple reason that there are not enough of us to go around.

        In summary, the Congress and the Coast Guard have made the
    substantial financial and manpower commitment to rectify the Reserve
    end-strength problem. As a result, significant progress has been, and
    will continue to me made. In addition, the Coast Guard is now making it
    easier for active duty commands to ascertain Reservists' skills and
    availability for active duty through the newly established Reserve
    Availability Pool website (http://www.uscg.mil/reserve/respool/
    respool.htm). As a result, the demand for Reservists to fill fleet
    requirements in a Coast Guard that is short of personnel can only be
    expected to increase. It, therefore, makes little sense at this
    juncture to reverse course and force the Coast Guard Reserve end-
    strength downward.
                                reserve funding
        The administration has requested $72 million for the Reserve
    Training (RT) appropriation for fiscal year 2000, with $24.427 million
    in reimbursement to operating expenses. Given the present procedures
    for reimbursement for operating expenses and direct payments by the
    Coast Guard Reserve, this is the minimum needed to fund a full training
    program for 7,600 personnel. Even at this minimal funding level, Coast
    Guard Reservists would continue to receive only 12 days of annual
    training (AT) each year (all the other armed services are entitled to
    14 days' AT by departmental regulation).
        The funding required to support the full 8,000-level authorized is
    approximately $78 million. It should, however, be noted that the fiscal
    year 1999 appropriations bill, in appropriating $69 million for the
    Coast Guard Reserve, limited the amount of Reserve training funds that
    may be transferred to operating expenses to $20M. The House
    Appropriations Subcommittee on Transportation report notes that this
    limitation is included because,

              Given the small size of the reserve training appropriation,
            and the declining size of the selected reserve, the Committee
            wants to ensure that reserves are not assessed excessive
            charge-backs to the Coast Guard operating budget. The Committee
            continues to believe that, absent this provision, the proposed
            level of reimbursement would be too high, especially given the
            substantial amount of reserve augmentation workhours provided
            by the reserves in direct support of Coast Guard missions.

        The House report also specifically prohibits the Coast Guard from
    instituting any ``direct charges'' that were not in effect during
    fiscal year 1997.
        ROA thanks the Congress for its recognition of the support provided
    by the Coast Guard Reserve and the provision of this additional funding
    through the limitation in reimbursement for operating expenses. In this
    regard, the Coast Guard is the only component among all the armed
    services that reimburses the operating expenses to the Active account.
        The Coast Guard is reviewing its procedures for reimbursement with
    a view toward modification in fiscal year 2000 and we have only just
    been briefed on their proposal. Accordingly, we are unable at this time
    to give an opinion on this change in procedures. We would, however,
    note, that the bottom line is that the Coast Guard Reserve must have
    sufficient funding for 8,000 Reservists and that the reimbursement cap
    has over the past 2 years provided approximately $2.5 million of this
    much needed funding. Accordingly, we would ask that any proposed change
    in procedures be closely examined and meticulously monitored--to ensure
    that the Coast Guard Reserve is fully funded at a level of 8,000 ($77
    million). This would have a positive, morale-building effect on
    Reservists by ensuring that the significant progress made over the past
    several years in providing the additional funding requisite to
    increasing Reserve end-strength will not be again jeopardized.
                                team coast guard
        We continue to support the goals and objectives of Team Coast
    Guard. The Coast Guard Reserve has become the ``bench-strength'' of the
    active duty force. In this regard, a strength of 8,000 Coast Guard
    Reservists equates to only 506 full-time equivalent positions. Of
    further note, the Coast Guard Reserve provides the ability to surge the
    Coast Guard by an additional 23 percent, at a cost of just 2 percent of
    the Coast Guard's total budget. In this respect, the Coast Guard
    Reserve is extremely cost-effective. Furthermore, the Reserve component
    provides double benefit because Reservists are only paid when on duty
    and because Reservists obtain their training for emergency response by
    assisting the Coast Guard in its peacetime functions.
        Simply stated, and as noted in the quotations of Admirals Ames and
    Barrett cited above, the Reserve leverages the entire organization and
    stands ready to go in response to both domestic and national
    emergencies. As a result, the Coast Guard is readily able to surge its
    forces to meet domestic emergencies in an extremely cost-effective
    manner, as well as to respond to national emergencies, including vital
    harbor security for the Department of Defense with the Coast Guard
    Reserve Port Security Units. At the same time, as also noted by Rear
    Admirals Ames and Barrett, the failure to meet Reserve end-strength
    requirements adversely affects the Coast Guard and therefore adversely
    affects the safety of those operating on the nation's rivers and
    waterways and off the shoreline of the United States.
        In an effort to assess the progress of Team Coast Guard and its
    impact on Reservists, we canvassed our membership in December 1999,
    asking for their views. Of the many responses we received, several
    issues emerged. These issues are as follows:
        Travel reimbursement.--Many Reservists, including enlisted
    Reservists, must travel long distances to drill. The following
    quotations from drilling Reservists provide additional insight into
    this issue.

              In many instances drilling Reservists have to travel upwards
            of 330 miles one-way to reach their duty sites. This issue of
            auto-travel-reimbursement is particularly problematic for
            junior enlisted personnel whose drill pay is already relatively
            small.
              We currently have a number of enlisted traveling in excess of
            350 miles one-way to drill. One (junior officer) is traveling
            650 miles one-way to drill.
              I have an E-3 who pays more for his transportation to monthly
            drill than he gets paid. In other words, he is paying cash in
            order to be able to drill.

        Meaningful billets and lack of flexibility upon advancement. This
    issue was addressed in the 1997 Coast Guard Reserve Policy Board report
    that was approved by the Secretary of Transportation on December 1999.
    The report states,

              When most Reserve command cadre billets were eliminated by
            integration, senior Reserve officers and senior enlisted lost
            their traditional management roles * * *. The force structure
            and roles for senior Reserve personnel need to be reviewed as
            program requirements are established. [This issue] * * * is
            about appropriately using personnel in whom taxpayers have
            invested heavily. Furthermore, it is about ensuring that
            Reserve personnel perceive they can engage in fully satisfying
            and challenging work throughout a full career in the Reserve
            Component.

        The following quotations from drilling Reservists provide
    additional insight into this issue.

              I am still concerned that senior Coast Guard officers and
            enlisted reserve personnel may not have much to aspire to * *
            *.
              A major issue still unresolved is how the Coast Guard will
            more effectively utilize its senior officers and enlisted
            Reservists consistent with their rank.
              Due to many active command structures, there don't seen to be
            as many opportunities as in the past. There certainly do not
            seem to be as many opportunities for command or senior
            executive staff positions. * * * With the noted exception of
            port security units, career paths for Reserve officers are not
            as clear as previously.
              With very few senior billets and minimum flexibility
            (allowing senior people to fill lower ranking billets), many
            see no real career path. We have seen at least two first class
            petty officers that have refused to take the examination for
            chief petty officer because there is not a chief's billet
            available. In their cases, they had well in excess of 10 years
            of service and were concerned that they would not be able to
            maintain a billet long enough to finish 20 years if they were
            selected as chief petty officers. The same situation applies to
            lieutenants and to lieutenant commanders. There are many who
            are seriously concerned about achieving 20 years' service.

        The 1997 Coast Guard Reserve Policy Board report, approved by the
    Secretary of Transportation on December 9, 1999, also provides further
    insight into this issue. It states as follows:

              Reserve force employment is not consistent throughout the
            Coast Guard. It has evolved over the years based upon the
            personalities and interests of commands, and the personalities
            and capabilities of individual Reservists. The current Reserve
            Personnel Allowance List (RPAL) was developed in 1996-97
            largely upon then-existing Reserve assignments. As a result,
            one unit may have a dozen RPAL billets while a similar unit may
            have no billets. Even when Reserve billet structures are
            consistent between or among similar commands, units often have
            different philosophies on employing Reservists. Some commands
            use Reservists interchangeably with Active duty personnel.
            Other commands use Reservists primarily to replace Active duty
            personnel when billets are vacant during the transfer season or
            leave periods. Some assign Reservists to work independently on
            special projects. We recognize that field units need
            flexibility in employing Reserve forces. Yet headquarters,
            areas, and districts need to identify program requirements for
            Reserve employment, and to provide guidance to field units on
            employing Reserves. Based on these program requirements and
            guidance, the RPAL then can be revised to better reflect
            service needs. When the workforce structure has been redefined
            by a revised RPAL, Reserve personnel can be recruited, trained,
            and assigned to meet established requirements. * * * Reserve
            personnel will have more meaningful assignments; they will not
            have to create their own niches at each command.

        Difficulty in meeting Reserve-unique administrative and training
    needs. The following quotation from a drilling Reservist provides
    additional insight into this issue.

              * * * for enlisted reservists * * * many of their Reserve-
            unique administrative and training needs are not being as
            adequately addressed as * * * in the past. * * * Ultimately,
            junior enlisted personnel do not seem to be receiving the same
            level of attention and direction needed for retention and
            advancement.
                               legislative issues
        Prior to concluding, there are three legislative issues that we
    would appreciate the Congress examining. The first legislative issue
    relates to the Director of the Coast Guard Reserve. Presently, the
    flag, or general rank, of the Reserve Chiefs of all the armed services,
    except for the Coast Guard is codified into law. In this regard, Title
    10,section 10203, subsection (d) states that, ``The Secretary of
    Transportation may designate a flag officer of the Coast Guard to be
    directly responsible for reserve affairs to the Commandant of the Coast
    Guard.'' There is, however, no parallel provision establishing an
    office, and Director of Coast Guard Reserve, as exists for the other
    services (see Title 10, section 3038 in the case of the Army Reserve,
    Title 10, section 5143 in the case of the Naval Reserve, Title 10,
    section 5144 in the case of the Marine Corps Reserve, Title 10, section
    8038 in the case of the Air force Reserve, and Title 10, section 10506
    in the case of the Army National Guard). We believe that a provision
    establishing a Director of the Coast Guard Reserve, headed by an
    officer in the grade above captain, should be placed into Title 10. At
    the same time, we also believe that the Office of the Coast Guard
    Reserve and the Director of Coast Guard Reserve may have such other
    functions as may be determined by the Commandant of the Coast Guard.
    The primary responsibility of the Director of Coast Guard Reserve
    should, however, be to oversee the functions and activities of the
    Coast Guards' Reserve component. Accordingly, to clarify the intent of
    Congress, establish consistency with the provisions of the other armed
    services, and to conform to current Coast Guard practice, it is
    recommended that a new section be added to Chapter 1007 of Title 10, to
    read as follows:
    Sec. 10203a. Office of Director, Coast Guard Reserve: appointment of
            Chief
        (a) Establishment of Office Director of Coast Guard Reserve.--There
    is in the executive part of the Coast Guard an Office of the Coast
    Guard Reserve, which is headed by the Director of the Coast Guard
    Reserve, who may have such other functions as determined by the
    Commandant. The Director of the Coast Guard Reserve is the principal
    adviser to the Commandant on Coast Guard Reserve matters.
        (b) Appointment.--The President, by and with the advice and consent
    of the Senate, shall appoint the Director of the Coast Guard Reserve,
    from officers of the Coast Guard on active duty, or on active duty
    under section 10211 of this title, who-- (1) have had at least 10 years
    of commissioned service, (2) are in a grade above captain, and (3)is
    recommended by the Secretary of Transportation.
        (c) Term.--(1) The Director of the Coast Guard Reserve holds office
    for a term determined by the Commandant of the Coast Guard, normally
    two years, but may be removed for cause at any time. This officer may
    be allowed to serve a maximum term of up to four years.
        (2) The Director of Coast Guard Reserve, while so serving, has a
    grade above captain, without vacating the officer's permanent grade.
        (d) Budget.--The Director of Coast Guard Reserve is the official
    within the executive part of the Coast Guard who, subject to the
    authority, direction, and control of the Secretary of Transportation
    and Commandant of the Coast Guard, is responsible for preparation,
    justification, and execution of the personnel, operation and
    maintenance, and construction budgets for the Coast Guard Reserve. As
    such, the Director of Coast Guard Reserve is the director and
    functional manager of appropriations made for the Coast Guard Reserve
    in those areas.
        (e) Annual Report.--The Director of Coast Guard Reserve shall
    submit to the Secretary of Defense an annual report on the state of the
    Coast Guard Reserve and the ability of the Coast Guard Reserve to meet
    its missions. The report shall be prepared in conjunction with the
    Commandant of the Coast Guard and may be submitted in classified and
    unclassified versions.
        The table of section for such chapter 1007 is amended by inserting
    after the item relating to section 10203 the following new item:
    Sec. 10203a. Office of Director, Coast Guard Reserve: appointment of
            Chief
        The second legislative issue is with regard to special pay. Title
    37 USC, section 308d, subsection (a), currently authorizes up to $10.00
    of special pay, per period of appropriate duty, for members of the
    Selected Reserve of the Ready Reserve at high priority units for
    service on inactive duty training. The authority to prescribe
    regulations to implement this section is, however, limited to the
    Secretary of Defense, effectively excluding the Coast Guard Reserve
    from exercising this authority. We would advocate providing such
    authority to the Secretary of Transportation. In this regard during the
    1994 to 1998 recruiting years, the Coast Guard had significant
    difficulty in reaching its Reserve recruiting goals. This personnel
    shortage has a particularly negative effect on high priority units,
    such as port security units, where there have been chronic difficulties
    filling positions. Providing such authority to the Secretary of
    Transportation would provide a highly effective discretionary
    accession/retention tool to Coast Guard Reserve managers, enabling them
    to more effectively manage force readiness requirements for high
    priority units.
        The third legislative issue is with regard to the repayment of
    education loans. Title 10 USC, section 16301, permits the Secretary of
    Defense to repay education loans of enlisted members of the Selected
    Reserve with critical specialties. This authority is not provided to
    the Secretary of Transportation. We would ask that such authority be
    provided to the Secretary of Transportation. As is the case with the
    special pay authority previously addressed, providing such authority to
    the Secretary of Transportation would provide a highly effective
    discretionary accession/retention tool to Coast Guard Reserve managers,
    enabling them to more effectively manage force readiness requirements
    for high priority units.
                                   conclusion
        In conclusion, this committee's support of the Coast Guard has been
    vital to maintaining its military capability. Your continued support is
    essential. Thank you for this opportunity to present the position of
    the Reserve Officers Association to this committee.
                                     ______

      Prepared Statement of the Upper Mississippi River Basin Association

        The Upper Mississippi River Basin Association (UMRBA) is the
    organization created 18 years ago by the Governors of Illinois, Iowa,
    Minnesota, Missouri, and Wisconsin to serve as a forum for coordinating
    the five states' river-related programs and policies and for
    collaborating with federal agencies on regional water resource issues.
    As such, the UMRBA has an interest in the budget for the U.S. Coast
    Guard.
        Though perhaps best known for its important work in coastal waters
    and on the Great Lakes, the Coast Guard also provides essential
    services on the nation's inland rivers. Nowhere are these services more
    important than on the Upper Mississippi River System, which Congress
    has designated as a nationally significant commercial navigation system
    and a nationally significant ecosystem. The Coast Guard helps to ensure
    that the river can continue to serve both of these important functions.
        Of particular concern to the UMRBA is funding for the Coast Guard's
    Operating Expenses account. The President's fiscal year 2000 budget
    proposal includes $2.941 billion for this account, an increase of 9.0
    percent from the fiscal year 1999 enacted level. The Operating Expenses
    account funds activities that are critical to the safe, efficient
    operation of the Upper Mississippi River and the rest of the inland
    river system, including aids to navigation, marine safety, and marine
    environmental protection. Through these missions, the Coast Guard
    maintains navigation channel markers, regulates a wide range of
    commercial vessels in the interest of crew and public safety, and
    responds to spills and other incidents. The beneficiaries include not
    only commercial vessel operators, but also recreational boaters;
    farmers and others who ship materials by barge; and the region's
    citizens, who benefit enormously from the river as a nationally
    significant economic and environmental resource.
        Recent years have brought a number of changes to the way the Coast
    Guard operates on the inland river system, including elimination of the
    Second District; the pending closure of the Director of Western Rivers
    Office; and the decision to decommission the Sumac, the largest buoy
    tender on the Upper Mississippi River. The states understand that these
    decisions have been driven by the need for the Coast Guard to operate
    as efficiently as possible, and the states support that goal. However,
    such changes must be carefully considered and their effects monitored.
    It is essential for the Coast Guard to retain the capacity to perform
    its traditional missions on the Upper Mississippi River. Toward that
    end, the UMRBA supports the President's fiscal year 2000 budget request
    for the Coast Guard's Operating Expenses account.
        Several other Coast Guard missions and programs are also important
    to the Upper Mississippi River states. Unfortunately, this region's
    devastating floods over the last several years have given many of its
    citizens direct personal experience with the importance of the Coast
    Guard's reservists. Reserve forces are a critical part of the Coast
    Guard's ability to respond effectively to natural disasters and other
    large-scale events. In addition, reservists perform key staff functions
    at many of the marine safety detachments on the inland rivers. The
    UMRBA supports the President's request of $72 million for Coast Guard
    Reserve, an amount intended to support 7,600 reservists nationwide.
        In addition, the Coast Guard's boating safety grants to the states
    have a proven record of success. The Upper Mississippi is a river where
    all types of recreational craft routinely operate in the vicinity of
    15-barge tows, making boating safety all the more important. The UMRBA
    asks Congress to appropriate the full authorized amount of $70 million
    to support the states in this important mission.

           LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

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                                                                       Page
    Advanced Transportation Technology Consortia, prepared statement.   714
    Alterman, Stephen A., President, Cargo Airline Association,
      prepared statement.............................................   693
    Anderson, John H., Jr., Director, Transportation Issues, General
      Accounting Office..............................................     1
        Prepared statement...........................................     8
    Austin, Julie M., Executive Director, Foothill Transit, prepared
      statement......................................................   763

    Barker, J. Barry, Executive Director, Transit Authority of River
      City (TARC), prepared statement................................   759
    Basso, Peter J., Assistant Secretary, Budget and Programs,
      Department of Transportation...................................     1
        Prepared statement...........................................    64
    Beam, Bruce, Chairman, Consumers United for Rail Equity, letter
      from...........................................................   735
    Becker, Captain Fred R., Jr., JAGC, USN (Ret.), Director, Naval
      Affairs, Reserve Officers Association of the United States,
      prepared statement.............................................   800
    Bolen, Edward M., President, General Aviation Manufacturers
      Association, prepared statement................................   697
    Brown, Kirk, Secretary, Illinois Department of Transportation,
      prepared statement.............................................   727
    Burke, Yvonne Brathwaite, County of Los Angeles, First Vice
      Chair, Board of Directors, Los Angeles County Metropolitan
      Transportation Authority (MTA), prepared statement.............   764
    Byrd, Hon. Robert C., U.S. Senator from West Virginia, questions
      submitted by...................................................   156

    Capon, Ross B., Executive Director, National Association of
      Railroad Passengers, prepared statement........................   740
    Carney, Michael, Chairman, Association of Waste Hazardous
      Materials Transportation, Alexandria, VA, prepared statement...   787
    City of Miami Beach, FL, prepared statement......................   753
    Clark, Les, Vice President, Independent Oil Producers Agency,
      prepared statement.............................................   707
    Coalition of Northeastern Governors, prepared statement..........   709
    Cunha, Manuel, Jr., President, NISEI Farmers League, prepared
      statement......................................................   707

    Delaney, Mayor Paula, City of Gainesville, FL, prepared statement   749
    Domenici, Hon. Pete V., U.S. Senator from New Mexico, questions
      submitted by...................................................   147
    Dysart, Mark R., President, High Speed Ground Transportation
      Association, prepared statement................................   736

    Electric Vehicle Association of the Americas, prepared statement.   761

    Fleet Reserve Association, prepared statement....................   796
    Foote, Stephanie, Chief of Staff, Office of Mayor Welling Web,
      City and County of Denver, CO, prepared statement..............   695

    Garvey, Hon. Jane F., Administrator, Federal Aviation
      Administration, Department of Transportation...................   249
        Prepared statement...........................................   253
    Gorton, Hon. Slade, U.S. Senator from Washington, questions
      submitted by.................................................240, 244
    Greater Orlando Aviation Authority, prepared statement...........   699

    Harris, Harry, Chairman, I-95 Corridor Coalition, Executive Board
      Deputy Commissioner, Connecticut Department of Transportation,
      Newington, CT, prepared statement..............................   724
    Howe, Wesley J., Professor, Trauma Surgery, Chairman, Department
      of Anatomy, Cell Biology and Injury Science, New Jersey Medical
      School, University of Medicine and Dentistry of New Jersey,
      prepared statement.............................................   785

    Interstate Natural Gas Association of America, prepared statement   794

    James, Mayor Sharpe, City of Newark, NJ, prepared statement......   734

    Judge, Patrick R., President, Louisiana Public Transit
      Association, prepared statement................................   767

    Kenny, Michael P., Executive Officer, California Air Resources
      Board, prepared statement......................................   707

    Lansing, Scott, Executive Director, Chatham Area Transit (CAT),
      Savannah, GA, prepared statement...............................   747
    Lautenberg, Hon. Frank R., U.S. Senator from New Jersey:
        Prepared statements........................................168, 265
        Questions submitted by.........92, 99, 103, 152, 240, 245, 310, 357
    Loy, Admiral James M., Commandant, U.S. Coast Guard, Department
      of Transportation..............................................   315
        Prepared statement...........................................   324

    Magistri, Sergio, President and CEO, InVision Technologies,
      prepared statement.............................................   701
    Mead, Kenneth, Inspector General, Office of Inspector General,
      Department of Transportation...................................1, 161
        Prepared statement..........................................14, 192
    Miklos, Mayor Steve, City of Folsom, CA, prepared statement......   749
    Millar, William W., President, American Public Transit
      Association, prepared statement................................   743
    Miller, Robert D., Chairman, Metropolitan Transit Authority,
      Harris County, TX, prepared statement..........................   769
    Morgan, Linda J., Chairman, Surface Transportation Board,
      prepared statement.............................................   657
    Murray, Hon. Patty, U.S. Senator from Washington, questions
      submitted by...................................................   159

    New York State Department of Transportation, prepared statement..   772
    Niagara Frontier Transportation Authority (NFTA), prepared
      statement......................................................   776

    Parcells, Harriet, Executive Director, American Passenger Rail
      Coalition, prepared statement..................................   730
    Patrick, Barbara, Member, Board Supervisors of Kern County,
      Member, California Air Resources Board, prepared statement.....   707
    Penelas, Mayor Alex, Miami-Dade County, Florida, prepared
      statement......................................................   705
    Pettygrove, Mayor George, City of Fairfield, CA, prepared
      statement....................................................706, 747

    Regional Transportation Commission, Clark County, NV, prepared
      state-
      ment...........................................................   781
    Reheis, Catherine H., Managing Coordinator, Western States
      Petroleum Association, prepared statement......................   707

    Seigel, John H., M.D., F.A.C.S, F.C.C.M., University of Medicine
      and Dentistry of New Jersey, prepared statement................   785
    Shaw, Marc V., Executive Director, New York State Metropolitan
      Transportation Authority, prepared statement...................   774
    Shelby, Hon. Richard C., U.S. Senator from Alabama:
        Prepared statements...................................108, 164, 316
        Questi91, 97, 143, 215, 243, 283, 337, 367, 374, 474, 568, 598, 662
    Skoutelas, Paul P., Chief Executive Officer, Port Authority of
      Allegheny County, Pittsburgh, PA, prepared statement...........   777
    Slater, Hon. Rodney, Secretary of Transportation, Office of the
      Secretary, Department of Transportation........................   107
        Prepared statement...........................................   119
    Stanton, Norma, Chairman, Dallas Area Rapid Transit Authority,
      prepared statement.............................................   754
    Steven, Hon. Ted Stevens, U.S. Senator from Alaska, prepared
      statement......................................................   109

    Thompson, Hon. Tommy, Governor of Wisconsin, Chairman, Amtrak
      Board of Directors, National Railroad Passenger Corporation
      (Amtrak).......................................................   161
        Prepared statement...........................................   177
    Tucker, Robert H., Jr., Chairman, Regional Transit Authority,
      prepared statement.............................................   779

    Upper Mississippi River Basin Association, prepared statement....   806

    Warrington, George, President, National Railroad Passenger
      Corporation (Amtrak)...........................................   161
        Prepared statement...........................................   186
    Wilkins, Phyllis M., Executive Director, Maglev Maryland,
      prepared statement.............................................   738

                                 SUBJECT INDEX

                                  ----------

                     AMTRAK FINANCE AND OPERATIONAL ISSUES

                                                                       Page
    Amtrak:
        Reform and welfare reform, parallels between.................   213
        Route system.................................................   199
    Capital spending plan............................................   210
    Contracting improprieties and general failures...................   209
    Farley building..................................................   213
    Independent assessment...........................................   198
    Infrastructure condition.........................................   203
    Las Vegas to Los Angeles service.................................   206
    Northeast corrdior:
        High-speed rail introduction.................................   201
        Safety of....................................................   204
        Service outside the..........................................   208
    Operating subsidy................................................   207
    Partnership opportunities........................................   204
    Rail service, high-speed.........................................   198
    Railroad support, increase in....................................   205
    Trans-Hudson Tunnel, need for....................................   214

                        COAST GUARD BUDGET AND PROGRAMS

    Adriatic, vessels in the.........................................   334
    Air-21 funding constraints.......................................   326
    Coast Guard's primary responsibility.............................   318
    Curtis Bay Coast Guard Yard......................................   334
    Deepwater:
        Replacement project..........................................   328
        System.......................................................   322
    Drug interdiction activities.....................................   333
    Exxon Valdez anniversary.........................................   333
    Fiscal year 2000 budget submission...............................   322
    Health care program..............................................   335
    Navy, partnership with the.......................................   330
    1999 accomplishments.............................................   320
    Personnel requirements...........................................   327
    Readiness issues...............................................323, 331
    User fee proposal................................................   331

              FEDERAL AVIATION ADMINISTRATION BUDGET AND PROGRAMS

    Age 60 rule......................................................   268
    Air service, commuter..........................................271, 272
    Air traffic controllers, hiring of...............................   281
    Airline passengers, legislation for..............................   260
    Airport improvement program......................................   268
    Augmentation system, wide area.................................260, 261
    Aviation:
        Safety.....................................................252, 257
        Security.....................................................   252
    Budgetary firewalls..............................................   257
    Centennial Airport...............................................   273
        Noise study at...............................................   274
    Colorado airspace initiative.....................................   275
    Contract tower cost sharing program..............................   282
    Cost accounting system...........................................   258
    Denver International Airport.....................................   272
    Explosive detection equipment....................................   282
    Mitchell Airport.................................................   274
        Wisconsin....................................................   274
    NAS modernization................................................   281
    NATCA contract...................................................   279
    Organization, performance based..................................   259
    Outagamie County Airport air traffic control tower...............   275
    Salt Lake City International Airport ASR.........................   276
    Standard terminal automation replacement system..................   270
    System efficiency..............................................252, 255
    Transportation budget............................................   267
    User fees........................................................   259
        Impact of, no................................................   258
    Year 2000.................................................253, 257, 262
        International efforts........................................   262

         FISCAL YEAR 2000 DEPARTMENT OF TRANSPORTATION BUDGET OVERVIEW

    Airline competition..............................................   129
    Airline Deregulation and Disclosure Act of 1999..................   108
    Airport improvement program......................................   115
    Alaska Volcano Observatory.......................................   109
    Black box technology.............................................   130
    Border and corridor..............................................   134
    Budget authority, revenue aligned................................   127
    Corridors........................................................   142
    Drunk driving laws...............................................   126
    Economic:
        Expansion....................................................   111
        Growth and trade.............................................   118
    FAA:
        Management advisory council..................................   132
        User fees....................................................   133
    Gas taxes, use of................................................   128
    Great Lakes......................................................   115
    Highway:
        Apportionments...............................................   115
        Funding guarantee............................................   113
    Human and natural environment....................................   118
    Loran radio navigation...........................................   131
    Management challenges............................................   112
    Mobility.........................................................   117
    Motor carrier safety.............................................   135
    National security................................................   118
    National speed limits............................................   125
    NHTSA funding....................................................   136
    Olympics:
        Controversy over the.........................................   140
        Selection process............................................   141
    OMC location.....................................................   136
    President's budget proposal......................................   108
    Safety and security..............................................   116
    Salt Lake City:
        Authorization for............................................   138
        Projects.....................................................   138
    Sound transit..................................................133, 134
    Spending caps, discretionary.....................................   113
    SUV's, crashes involving.........................................   127
    TEA-21...........................................................   112
    User fees......................................................113, 114
    Y2K..............................................................   118

      OVERSIGHT HEARING ON DEPARTMENT OF TRANSPORTATION MANAGEMENT ISSUES

    Air traffic control modernization................................    82
    Amtrak...........................................................    75
        Analysis, proposed...........................................    76
    Bus safety.......................................................    78
    Challenges:
        Aviation.....................................................     6
        Coast Guard..................................................     7
        Department-wide..............................................     7
        Surface transportation.......................................     7
    Common threads...................................................    73
    Deepwater procurement............................................    86
    DOT and the year 2000 problem....................................    80
    FAA's organizational culture, changing...........................    83
    Grant programs, discretionary....................................    85
    Infrastructure megaprojects......................................    87
    Management:
        Issues, DOT's top 10.........................................    12
        Problems, most-common........................................    88
    NAFTA and trucking...............................................    89
    NATCA agreement..................................................    89
    Oversight:
        Input........................................................    79
        Role of......................................................    84
    Rail as an airline alternative...................................    80
    Year 2000 and FAA: worst-case....................................    82

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