[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
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                           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, 
[email protected]
    Joel C. Willemssen, Director, Civil Agencies Information Systems 
Accounting and Information Management Division, (202) 512-6408, 
[email protected]
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, 
[email protected]
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\
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    \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).
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    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, 
[email protected]
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, 
[email protected]
    Joel C. Willemssen, Director, Civil Agencies Information Systems 
Accounting and Information Management Division, (202) 512-6408, 
[email protected]
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, 
[email protected]
  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, 
[email protected]
                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.
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    \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.
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    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, 
[email protected]
         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, 
[email protected]
                          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.

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        [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.
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    \1\ 49 U.S.C. 5101.
    \2\ 49 U.S.C. Chapter 51.
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              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.
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    \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.
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    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.)
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    \5\ RSPA fiscal year 2000 Budget Submission, page 57.
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    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.
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    \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.
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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.
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    \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.
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    \22\ RSPA fiscal year 2000 Budget Submission, page 67.
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                         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.
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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.
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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

                              ----------                              
                                                                   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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