[Senate Hearing 107-1095]
[From the U.S. Government Publishing Office]



                                                       S. Hrg. 107-1095

                 CROSS BORDER TRUCK AND BUS OPERATIONS

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

                             JOINT HEARING

                               BEFORE THE

       SUBCOMMITTEE ON SURFACE TRANSPORTATION AND MERCHANT MARINE

                                 OF THE

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION

                                AND THE

          SUBCOMMITTEE ON TRANSPORTATION AND RELATED AGENCIES

                                 OF THE

                      COMMITTEE ON APPROPRIATIONS
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 27, 2002

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
           Transportation and the Committee on Appropriations



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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

              ERNEST F. HOLLINGS, South Carolina, Chairman
DANIEL K. INOUYE, Hawaii             JOHN McCAIN, Arizona
JOHN D. ROCKEFELLER IV, West         TED STEVENS, Alaska
    Virginia                         CONRAD BURNS, Montana
JOHN F. KERRY, Massachusetts         TRENT LOTT, Mississippi
JOHN B. BREAUX, Louisiana            KAY BAILEY HUTCHISON, Texas
BYRON L. DORGAN, North Dakota        OLYMPIA J. SNOWE, Maine
RON WYDEN, Oregon                    SAM BROWNBACK, Kansas
MAX CLELAND, Georgia                 GORDON SMITH, Oregon
BARBARA BOXER, California            PETER G. FITZGERALD, Illinois
JOHN EDWARDS, North Carolina         JOHN ENSIGN, Nevada
JEAN CARNAHAN, Missouri              GEORGE ALLEN, Virginia
BILL NELSON, Florida
               Kevin D. Kayes, Democratic Staff Director
                  Moses Boyd, Democratic Chief Counsel
      Jeanne Bumpus, Republican Staff Director and General Counsel
                                 ------                                

       Subcommittee on Surface Transportation and Merchant Marine

                  JOHN B. BREAUX, Louisiana, Chairman
DANIEL K. INOUYE, Hawaii             GORDON SMITH, Oregon
JOHN D. ROCKEFELLER IV, West         TED STEVENS, Alaska
    Virginia                         CONRAD BURNS, Montana
JOHN F. KERRY, Massachusetts         TRENT LOTT, Mississippi
BYRON L. DORGAN, North Dakota        KAY BAILEY HUTCHISON, Texas
RON WYDEN, Oregon                    OLYMPIA J. SNOWE, Maine
MAX CLELAND, Georgia                 SAM BROWNBACK, Kansas
BARBARA BOXER, California            PETER G. FITZGERALD, Illinois
JEAN CARNAHAN, Missouri              JOHN ENSIGN, Nevada
JOHN EDWARDS, North Carolina
                      COMMITTEE ON APPROPRIATIONS

                ROBERT C. BYRD, West Virginia, Chairman
DANIEL K. INOUYE, Hawaii             TED STEVENS, Alaska
ERNEST F. HOLLINGS, South Carolina   THAD COCHRAN, Mississippi
PATRICK J. LEAHY, Vermont            ARLEN SPECTER, Pennsylvania
TOM HARKIN, Iowa                     PETE V. DOMENICI, New Mexico
BARBARA A. MIKULSKI, Maryland        CHRISTOPHER S. BOND, Missouri
HARRY REID, Nevada                   MITCH McCONNELL, Kentucky
HERB KOHL, Wisconsin                 CONRAD BURNS, Montana
PATTY MURRAY, Washington             RICHARD C. SHELBY, Alabama
BYRON L. DORGAN, North Dakota        JUDD GREGG, New Hampshire
DIANNE FEINSTEIN, California         ROBERT F. BENNETT, Utah
RICHARD J. DURBIN, Illinois          BEN NIGHTHORSE CAMPBELL, Colorado
TIM JOHNSON, South Dakota            LARRY CRAIG, Idaho
MARY L. LANDRIEU, Louisiana          KAY BAILEY HUTCHISON, Texas
JACK REED, Rhode Island              MIKE DeWINE, Ohio
                  Terrence E. Sauvain, Staff Director
                 Charles Kieffer, Deputy Staff Director
               Steven J. Cortese, Minority Staff Director
            Lisa Sutherland, Minority Deputy Staff Director
                                 ------                                

          Subcommittee on Transportation and Related Agencies

                   PATTY MURRAY, Washington, Chairman
ROBERT C. BYRD, West Virginia        RICHARD C. SHELBY, Alabama
BARBARA A. MIKULSKI, Maryland        ARLEN SPECTER, Pennsylvania
HARRY REID, Nevada                   CHRISTOPHER S. BOND, Missouri
HERB KOHL, Wisconsin                 ROBERT F. BENNETT, Utah
RICHARD J. DURBIN, Illinois          BEN NIGHTHORSE CAMPBELL, Colorado
PATRICK J. LEAHY, Vermont            KAY BAILEY HUTCHISON, Texas
                                     TED STEVENS, Alaska (ex officio)

                           Professional Staff

                              Peter Rogoff
                             Kate Hallahan
                        Wally Burnett (Minority)
                        Paul Doerrer (Minority)

                         Administrative Support

                               Angela Lee


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held June 27, 2002.......................................     1
Statement of Senator Bond........................................     6
Statement of Senator Breaux......................................     1
Statement of Senator Dorgan......................................     7
Statement of Senator Fitzgerald..................................    41
Statement of Senator Hollings....................................     1
Statement of Senator Hutchison...................................    34
Statement of Senator Murray......................................     3
Statement of Senator Smith.......................................     8
    Prepared statement...........................................     9
Statement of Senator Specter.....................................    31

                               Witnesses

Mead, Hon. Kenneth M., Inspector General, Department of 
  Transportation.................................................    21
    Prepared statement...........................................    23
Mineta, Hon. Norman, Secretary, Department of Transportation; 
  accompanied by Joseph Clapp, Administrator, Federal Motor 
  Carrier Safety 
  Administration.................................................     9
    Prepared statement...........................................    16

 
                 CROSS BORDER TRUCK AND BUS OPERATIONS

                              ----------                              


                        THURSDAY, JUNE 27, 2002

                                       U.S. Senate,
Subcommittee on Surface Transportation and Merchant Marine,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.

        U.S. Senate, Subcommittee on Transportation and 
            Related Agencies, Committee on Appropriations,
                                                    Washington, DC.
    The Subcommittees met, pursuant to notice, at 9:44 a.m. in 
room SR-253, Russell Senate Office Building, Hon. John B. 
Breaux, Chairman of the Subcommittee, and Hon. Patty Murray, 
Chairman of the Subcommittee on Transportation and Related 
Agencies of the Senate Appropriations Committee, presiding.

           OPENING STATEMENT OF HON. JOHN B. BREAUX, 
                  U.S. SENATOR FROM LOUISIANA

    Senator Breaux. The Committee will come to order. Good 
morning, everyone. Thank you all for being with us. We are here 
today to have a joint hearing on a very important subject and I 
am delighted to have our full Committee Chairman, Senator 
Hollings, with us, and also the Chair of the Subcommittee on 
Appropriations Transportation who has been a leader in this 
area, and has been the person who has brought a great deal of 
the legislation through the appropriations process to help 
solve the problem that we are continuing to address and to 
oversee this morning. We are delighted that Senator Bond from 
the Appropriations Committee is with us as well for the 
hearing.
    Senator Hollings, would you like to--Chairman Hollings.

             STATEMENT OF HON. ERNEST F. HOLLINGS, 
                U.S. SENATOR FROM SOUTH CAROLINA

    Chairman Hollings. Yes, thank you a lot, Mr. Chairman, and 
I thank Chairman Murray and her leadership here on this 
appropriations level, and what I want to do, is comment. Mr. 
Secretary, our Commerce, Science, and Transportation Committee 
has had the best of relationships with you. Right after 9/11 we 
immediately took up the $15 billion for the airlines. We passed 
out an airlines security bill, reorganizing the entire 
institution unanimously from the Committee, and unanimously out 
of the U.S. Senate, and similarly with seaport security. On 
rail security, Mr. Secretary, we have had difficulties.
    We appropriated before Christmas, authorized--it is right 
there at the desk--$5 million, and we have yet to see the 
Administration move on that particular measure, and in the 
meantime over the year now we have had three hearings on 
Amtrak. Everybody knows the problems.
    The problem is the Congress and the White House over the 
years. They come up with certain needs. There is a group that 
want to appropriate for those needs, provide for them, and 
there is a group that thinks they ought to be run as a private 
entity. Of course, we know differently. It was run as a private 
entity after World War II up until 1970 when I was here on this 
Committee, and the private entities came begging for us to 
please, for Lord's sakes, take this passenger rail service, and 
they gave us back the equipment and everything else, all except 
the tracks, but we have limped along with half measures for 
some 30 years.
    So it is not necessarily this President and this Congress, 
but we know what has happened, and so in the last year we have 
had three hearings trying to get you up here. The last one you 
would not appear, but you sent Mr. Jackson, and he came with 
more questions than answers. In fact, I admonished him. I said, 
look here, we are having the hearing. You are asking us all 
these questions. No help whatsoever, but we worked in a 
bipartisan fashion, and we reported out in April, by a vote of 
20 to 3, an Amtrak bill with reforms, and then out of the blue 
you go running down to the Chamber of Commerce like, ``Oh, we 
have got to do something about Amtrak and we have got to have 
reforms,'' after we have been trying to get you up here for a 
year.
    You did not come to the Committee. You have not commented 
on our bill, S. 1991. By a vote of 20 to 3 it is right there on 
the calendar. Everybody in the Department of Transportation 
knows abut it. They got the Committee report, and incidentally 
on the reforms we have got an itemized breakdown of every 
section of the financing. You put out a statement this morning 
to give them $100 million temporarily till the end of July, 
when we are going on the August break, because of another 
crisis.
    It is Government by fear. We had a President around here 
once who said the only fear we had to fear was fear itself. Now 
you have all got Government by fear, all kinds of 
announcements, and trying to manufacture this one. We are ready 
to go. We are ready for the Administration to lead and not run 
down to the Chamber of Commerce talking about ``reforms, 
reforms,'' like we never thought of it.
    We have got in here all kinds of financial reforms. The new 
head--I have been corresponding, of course, with him, talking 
to him, Mr. Gunn. He is outstanding, I think, a breath of fresh 
air. He has already gotten rid, of the 80-some vice presidents, 
60 of them. He has cutoff operations that we cannot afford and 
everything else of that kind, but we have got to make a 
commitment. We have got to have Federal involvement and Federal 
leadership, and all we are getting out of the Department of 
Transportation, Mr. Secretary, is crisis appearances. We have 
not gotten anything on this bill, and we would appreciate it at 
the committee level if you would work with the Committee and--
criticize. Tell us what you do not like about the Amtrak bill.
    But we have seen all that separation of the passenger 
service from the rails, and just be a passenger service, like 
you mentioned down at the Chamber of Commerce. Maggie Thatcher 
did that. I do not know how many people in England they have 
killed so far this year, but they did separate the 
infrastructure out, and they had 25 bidders, and 15 have gone 
broke, and the other 10 are back downtown in London begging for 
more money. It is not working that way.
    Every successful high-speed passenger rail service has been 
run by the Government, run efficiently, run within fiscal 
bounds, and run with governmental leadership, and that is the 
only way we are going to have it. On this Committee, we have 
got Commerce, Space, Science, Transportation, we appropriated 
$180 million for a railroad in space, but we cannot get a dime 
out of you folks on the ground, and we got only $100 million 
this morning in your release.
    We have got over half in a bipartisan--over half the Senate 
has already sent a letter to the President--we are going to put 
$200 million in that emergency supplemental. We are ready to 
put up the money. If the President wants to put a million 
people out on the highways and byways all in disarray here, let 
him do it. But really, we have had no leadership whatsoever 
from your Department on Amtrak, and do not act like you all are 
leading this morning, that you've got it together.
    As we move, we saw where 3 days ago you were going to give 
them $130 million, and then, night before last, you started 
talking, well, you might go ahead with the $200. Now you have 
come this morning with a release for $100. It's just ``The 
Perils of Pauline,'' and the room all crowded up as to whether 
or not we are going to have a rail system in America. That 
isn't playing; tell Karl Rove.
    Secretary Mineta. Mr. Chairman, do you want me to respond?
    Senator Breaux. Well, I want to thank the Chairman of the 
Committee. I am not sure that was about Mexican trucks, but I 
think the message is pretty clear.
    [Laughter.]
    Chairman Hollings. That is right.
    Senator Breaux. I want to recognize--Norm, we are going to 
give you a chance to comment on that, but I want to recognize 
the Chair of the Appropriations Subcommittee, as I said, who 
has been the person who was in a leadership role in putting the 
money in it to take care of this Mexican truck situation which 
we are having a hearing about today, and Senator Murray, any 
opening statement?

                STATEMENT OF HON. PATTY MURRAY, 
                  U.S. SENATOR FROM WASHINGTON

    Senator Murray. Thank you very much, Senator Breaux, and 
before I speak to Mexican trucks I know that Secretary Mineta 
is also going to make a statement on Amtrak and its financial 
condition this morning. My Transportation Appropriations 
Subcommittee held a hearing 1 week ago today on Amtrak's 
financial crisis, and at that time President Bush's Federal 
Railroad Administrator testified that the Administration was 
doing everything in its power to keep Amtrak operating and keep 
the commuter railroads that depend upon Amtrak running. But a 
week later a solution still has not been finalized, and we are 
told that an agreement has been reached in principle between 
the Administration and Amtrak's board of directors, but nothing 
has been signed.
    This has been a very tortuous process for Amtrak's riders, 
their employees, and the tens of thousands of daily rail 
commuters, and worst of all, this really was avoidable. The 
Appropriations Committee has provided Amtrak with every penny 
the Bush administration has requested for the railroad and then 
some.
    Secretary Mineta sits on Amtrak's board of directors, his 
Deputy Secretary Michael Jackson serves for him on both the 
board's Finance Committee and is chairman of the board's Audit 
Committee. Even so, the Administration has voiced surprise over 
the sudden financial crisis of Amtrak. I have to say that it is 
very hard to understand how the situation was allowed to reach 
such a dire strait without the Administration being fully aware 
of it, so I do not want to detract from the importance of the 
discussion on Mexican trucks. I hope we can take some time this 
morning to question the Secretary on a number of Amtrak issues, 
including, I will have questions for you on whether saddling 
Amtrak with more loans when the railroad is already $4 billion 
in debt is an appropriate solution, whether we can get Amtrak 
through the current fiscal crisis, whether we just will not 
face another bankruptcy crisis a few miles down the road if we 
do accept the Bush Administration's budget request for next 
year, and if the Administration is asking Amtrak to engage in 
financial transactions that will only undermine rather than 
improve its credibility with its creditors and debtors.
    So I will be asking those questions when we do get to the 
questions, but I do want to thank Senator Breaux for having 
this hearing this morning, and before we hear from our 
witnesses I think it is important to remember how we have 
reached this point.
    When President Bush took office, he reversed a policy from 
the Clinton administration and announced his intention to open 
all U.S. highways to Mexican trucks and buses. That policy 
change was prompted in part by the decision of a NAFTA 
arbitration panel that states the United States was in 
noncompliance with the treaty. Both before and after President 
Bush's decision, the two Subcommittees represented here this 
morning received numerous reports by the DOT Inspector General, 
the General Accounting Office and others, that criticized the 
overall safety of the Mexican truck fleet and questioned 
whether DOT could guarantee safety on our highways once that 
border was opened.
    These reports indicated that under the Administration's 
original plan to open the border, there would be a woefully 
inadequate number of safety inspectors to handle the influx of 
Mexican trucks; trucks would be crossing into the United States 
at border stations where no Federal inspectors would be 
present; Mexican trucks would be given interim authority to 
drive on all U.S. highways after filling out only a cursory 
questionnaire; there would not be enough space at inspections 
stations to remove unsafe Mexican trucks from service; there 
would not be any way for U.S. and State truck safety inspectors 
to validate and verify the licenses, insurance, and driving 
records of Mexican truck drivers, or the validity of the 
operating authority granted to Mexican firms.
    There would not be any comprehensive mechanism to check 
whether Mexican trucks driving on U.S. highways complied with 
U.S. weight limits; and this is an especially important 
concern, since trucks in Mexico are allowed to operate at 
heavier weights than trucks in the United States. And finally, 
many critical safety rulemakings that were to be published by 
the Federal Motor Carrier Safety Administration were not going 
to be in place by the time the Bush administration planned to 
open the border.
    When the transportation appropriations bill reached the 
floor of the House of Representatives last year, the House 
voted by an overwhelming bipartisan majority, more than 2 to 1, 
to absolutely prohibit Mexican trucks from traveling beyond the 
border commercial zone during fiscal year 2002. That action, it 
was said, constituted a blatant violation of NAFTA. When the 
Senate Subcommittee marked up its bill, we took what I believe 
to be a much more balanced and responsible approach. As a 
Senator who voted for NAFTA, I, along with Senator Shelby, 
addressed the safety, inspection, and enforcement deficiencies 
head on and established a series of strict safety conditions 
that would have to be met before Mexican trucks could travel on 
U.S. highways.
    Under the Senate bill, the Inspector General was required 
to certify that those conditions have been met prior to the 
border being opened. Our bill engendered a great deal of debate 
on the floor. We spent about 2 weeks debating that measure. 
After more than a dozen roll call votes, including two 
successful cloture votes, the bill passed by an overwhelming 
margin.
    When we went to conference with the House of 
Representatives, the Senate bill stayed largely intact with one 
notable change. Rather than having the Inspector General 
certify that safety conditions had been met so the border could 
be opened, we allowed the Inspector General to issue a thorough 
report on the DOT's efforts to comply with each of these 
conditions. Secretary Mineta was given the responsibility to 
respond to each of the IG's findings and open the border only 
after he certifies in writing to Congress that opening the 
border will not present an unacceptable safety risk.
    As was the case when the bill passed the Senate, the 
conference report included more money for Mexican truck safety 
enforcement than the Administration requested. That is where we 
find ourselves today. The Inspector General is here to tell us 
what has and has not been done by the Department so far. 
Secretary Mineta is here to tell us his intentions regarding 
whether and when the border will be opened. There is no 
question that at the end of this process we will have safer 
highways than under the President's original proposal.
    I want to commend the Department of Transportation for its 
work so far. However, I have to say it is somewhat 
disappointing that it took such specific language out of 
Congress for the DOT to take the steps that it has. I hope the 
Department will bring the same energy to improving truck safety 
in the United States that they have brought to implementing the 
measures to open the border. As the Inspector General knows, 
there are several vulnerabilities in our truck safety program 
right here at home that need immediate attention. More needs to 
be done to test and verify the capabilities of our drivers. A 
lot more needs to be done to combat fraud in the distribution 
of commercial drivers' licenses, and the DOT needs to improve 
its record of taking almost 4 years to complete major truck 
safety regulations. The efforts to ensure the safe passage of 
Mexican trucks on our highways has already, I believe, had a 
very positive effect in limiting the number of Mexican trucks 
that plan to enter the U.S. to those trucking firms that are 
really prepared to meet all of the statutory safety 
requirements in the transportation appropriations bill.
    In 1995, when the border was first expected to be opened, 
the Department received almost 200 applications from Mexican 
trucking firms seeking to operate in the United States. To 
date, the Department has received roughly 10 percent of that 
number, representing fewer than 100 trucks. I do expect that 
number will grow in time. If the DOT does its job, that growth 
will not represent a safety risk. The IG will tell us this 
morning that there are still many inspection units that are not 
electronically linked to the necessary data bases to ensure the 
validity of Mexican driver's licenses, operating authority, and 
insurance. Those enhancements are expected shortly.
    Perhaps most importantly, more needs to be done not just in 
implementing the safety requirements, but also in preparing to 
prosecute those who would violate them. As Mr. Mead will 
testify this morning, they continue to find Mexican truck 
drivers who wantonly disregard the requirement to stay within 
the commercial zone. This has been going on for years, and the 
States are ill-suited to prosecute those cases. Mr. Mead will 
testify that only two States, California and Arizona, have 
currently adopted a law to prosecute truckers that have 
deliberately strayed beyond the commercial zone.
    I know that Secretary Mineta will agree that rapid action 
needs to be taken to address that loophole in the area of truck 
safety. As in the case of all transportation safety, our safety 
requirements will only be as effective as the enforcement 
mechanisms that surround them. During the lengthy Senate debate 
over the transportation bill last year, I stated over and over 
again my belief that free trade and safety can progress side by 
side. While more work needs to be done, I think that over time 
it will be clear that trade and safety are not mutually 
exclusive.
    Senator Breaux. Thank you, Chairman Murray, for your 
statement.

            STATEMENT OF HON. CHRISTOPHER S. BOND, 
                   U.S. SENATOR FROM MISSOURI

    Senator Bond. Thank you very much, Mr. Chairman.
    Mr. Secretary, welcome, and Inspector General Mead, 
welcome. I begin by unabashedly telling you I am a supporter of 
NAFTA, and I believe most of my colleagues are, despite what 
some of our actions in this body may lead you to think.
    To put it bluntly, our borders with Mexico should have been 
open to Mexican trucks long ago. That is an old debate. I will 
not go into it. I will, however, remind my colleagues here 
today that our constituents are hurt every day that the 
moratorium on Mexico-domiciled trucks remains in place. I 
represent an agricultural State, and it is important to note 
that the freeze on cross-border trucking has impacted U.S. 
agricultural exports to Mexico. In the year 2000, they 
accounted for almost 12\1/2\ percent, or one-eighth of U.S. 
agricultural exports, and they produced a trade surplus of well 
over $1 billion. With 85 percent of U.S.-Mexico trade moving by 
truck, the success of our agricultural exporters and thus the 
success of our farmers who depend upon the prices that they 
receive because of the demand from Mexico hinges on efficient 
cross-border trucking operations.
    I understand from the Inspector General that you are making 
progress to assure the safety. We need to hear today what 
additional steps need to be taken, and where you need 
assistance and what you are doing, but I view the 
implementation of NAFTA trucking provisions as a way to create 
additional opportunities for U.S. agricultural and other 
exports to Mexico, which is a vital neighbor, an ally, and our 
second-largest trading partner.
    In other words, I may not agree with the actions that 
Congress has taken, but I do intend to do whatever I can to 
help move the process along. The people and particularly the 
farmers in Missouri need to see that process moved.
    But to switch tracks, Mr. Secretary, to what I guess 
everybody is going to be talking about today, I would like to 
mention Amtrak. It appears to me that Amtrak has a full head of 
steam bellowing down a one-way track. There is no question in 
my mind that before Congress gets out the checkbook to the tune 
of an additional $200-plus million, we need to be assured that 
some real reforms are taking place. At the current rate, Amtrak 
is burning over $1 billion a year with no apparent end in 
sight. I am really disappointed in the way things are being 
run.
    I am pleased that you have come to an agreement with Amtrak 
last night. We will hear the details today, but without getting 
into too many of the details before a final agreement is 
actually signed, I would like to hear your perspective on 
whether the agreement addresses short-term needs or some of the 
concessions intended to serve our long-term objective of 
continued passenger rail service.
    I understand that there is a request before your Department 
for loan guarantees of $200 million. If one takes the 
relatively old-fashioned and mundane approach of reading the 
statute, section 260.5, the eligible purposes of TEA-21, state 
in subsection (b) that ``financial assistance under this part 
cannot be used for railroad operating expenses.'' Now, in spite 
of that fact, I know some of my colleagues are asking that you 
approve the loan guarantee. I wonder if you see another 
potential available resource that Amtrak could utilize, and 
perhaps you will be able to tell us what your agreement with 
Amtrak envisions in terms of a loan guarantee under this or 
some other additional legislation.
    Thank you, Mr. Chairman.
    Senator Breaux. Senator Dorgan, any comments?

              STATEMENT OF HON. BYRON L. DORGAN, 
                 U.S. SENATOR FROM NORTH DAKOTA

    Senator Dorgan. Mr. Chairman, just briefly, let me just 
respond on this issue of Mexican trucks. I am tempted--I 
understand our full Committee Chairman fired both barrels on 
Amtrak, so I will----
    Chairman Hollings. It is on the record.
    Senator Dorgan. Well, without knowing what he said, let me 
associate myself with his remarks.
    [Laughter.]
    Senator Dorgan. I know that is dangerous, but on this 
subject I also know that he and I agree.
    Let me just say on the Mexican truck issue, I think this is 
one more example of trade agreements that dumb down and 
diminish our abilities in dealing with issues affecting 
workers, our environment, public safety--there is not a ghost 
of a chance, not a ghost of a chance that by the middle or the 
end of this year we are going to have anything that resembles 
something ensuring that it is safe for the American people to 
have Mexican long-haul trucks moving across this country.
    There is not a ghost of a chance of that happening, and if 
any of you wonder about it, go back and read the San Francisco 
Chronicle in which the San Francisco Chronicle reporter did 
something no one in this Congress has done, traveled 1,800 
miles in 3 days with a Mexican trucker who slept 7 hours during 
the 3 days, did not have a logbook that was up to date, drove 
equipment of questionable safety.
    The fact is, you are trying to put two standards together 
that cannot be easily put together, and if ever they are put 
together in a way that is protective of the safety of the 
American people, it is going to take a long, long time, and 
frankly I wanted a much harsher provision in the bill when it 
went through the Senate. I did not prevail on that, but in any 
event, I do not think the Administration is going to have a 
ghost of a chance of meeting the standards imposed by the 
Murray-Shelby amendment, in my judgment.
    So I just want to say that I do not think trade agreements 
ought to be about compromising safety; and frankly, if we 
proceed on this track there will be Americans whose safety is 
jeopardized on the roads of this country, because there is not 
any way in which you create a system where the long-haul 
truckers from Mexico are going to have the same standards and 
the same safety capabilities as long-haul truckers in this 
country.
    I have more to say, but I will do that later.
    Senator Breaux. Thank you, Senator. Senator Smith, any 
comments?

                STATEMENT OF HON. GORDON SMITH, 
                    U.S. SENATOR FROM OREGON

    Senator Smith. Mr. Chairman, I have a statement. In the 
interest of time I would include it in the record.
    Senator Breaux. I thank the Senator for his consideration.
    Senator Smith. And I share Senator Dorgan's concern about 
safety. I voted with Senator Murray and Senator Shelby on this, 
and if it is going to happen, we have to make sure that safety 
is not compromised. If we can assure safety then Americans can 
get the benefit of the competition that would come with cross-
border trucking. However safety should not be sacrificed on the 
altar of free trade, and I think we ought to hold that 
position.
    [The prepared statement of Senator Smith follows:]

   Prepared Statement of Hon. Gordon Smith, U.S. Senator from Oregon
    Thank you, Mr. Chairman. I strongly support the efforts of the 
Administration to safely open our border with Mexico and comply with 
the terms of the North American Free Trade Agreement (NAFTA). The 
United States signed NAFTA almost ten years ago; since that time, trade 
with Mexico has climbed significantly. Mexico now accounts for about 
12.5% of total U.S. merchandise trade and Mexico is our second largest 
trading partner. I believe the benefits will be even greater once NAFTA 
is fully implemented.
    We all agree that safety and security must not be compromised in 
allowing trucks domiciled in Mexico to operate in the United States. It 
is precisely these concerns that led Congress to enact additional 
safety inspection, audit, and investigation requirements as part of the 
Department of Transportation Appropriations Act for fiscal year (FY) 
2002. The Act also funded an increase in the number of federal and 
state inspectors to ensure the requirements are properly enforced. I 
supported these provisions and believe that if they have been properly 
implemented, the border can be opened safely in the near future.
    Trade with Mexico is important to Oregon. In 2001, trade with 
Mexico approached $900 million. Exports from the State have grown at an 
average annual rate of 12% since 1994. Mexico is a particularly 
important market for transportation equipment, industrial machinery, 
electronics and metal products. I want to encourage this positive 
trend.
    That said, I fully support continued vigilance on safety matters 
involving all trucks operating on our nation's roads and highways. 
While I understand today's witnesses will testify that we are now 
prepared to inspect , audit and monitor the operation of Mexican-based 
trucks, the true test will come once the border is open and these 
trucks are actually operating in the U.S. We must ensure that U.S. 
safety regulations are properly enforced and any unsafe drivers and 
vehicles are taken out of service. Frankly, stricter enforcement of our 
safety standards should apply to all carriers if we are serious about 
improving highway safety.
    I would like to thank Secretary Mineta, Administrator Clapp, and 
Inspector General Mead and their staffs for their hard work and 
diligence in preparing the opening of the border and meeting the tight 
deadlines for implementing the provisions of the Appropriations Act. I 
hope the President will lift the moratorium on Mexican trucks soon, so 
that we can reap the full benefits of NAFTA.

    Senator Breaux. Well, thank you, Senator.
    With that, Secretary Mineta, welcome to the Amtrak/Mexican 
truck hearing.
    [Laughter.]
    Senator Breaux. You heard from the Committee, and we 
welcome you, and Mr. Joseph Clapp, who is Administrator of the 
Motor Carrier Safety Administration is here, as well as our 
Inspector General for the Department of Transportation, Mr. Ken 
Mead. Mr. Secretary, we will start with you.

        STATEMENT OF HON. NORMAN Y. MINETA, SECRETARY, 
         DEPARTMENT OF TRANSPORTATION; ACCOMPANIED BY 
          JOSEPH CLAPP, ADMINISTRATOR, FEDERAL MOTOR 
                 CARRIER SAFETY ADMINISTRATION

    Secretary Mineta. Mr. Chairman, Madam Chairwoman, and 
members of the Subcommittee, I am very pleased to have this 
opportunity to be here with all of you, and I want to thank you 
for this hearing to share with you the progress that the 
Department of Transportation has made to ensure a safe 
operation of Mexican-domiciled carriers under the North 
American Free Trade Agreement's transportation access 
provisions.
    Now, before I get into the discussion of today's hearing 
topic, if you would indulge me, I would like to begin with a 
brief discussion of another timely issue that has been brought 
up, and that is the Amtrak financial crisis. As all of you are 
aware, last night we were able to conclude a meeting with the 
Amtrak board of directors which resulted in excellent progress 
toward a resolution of the short-term financial crisis facing 
the railroad.
    We reached an agreement in principle on the approach that 
we will take which will involve a combination of immediate 
assistance from the Department of Transportation along with a 
joint request of Amtrak and the Administration for 
congressional support. We are continuing to meet this morning 
in order to finalize the details of what has been agreed upon 
in our Monday and Wednesday meetings. I think the total of 
those two meetings on those 2 days were somewhere in the area 
of about 11 or 12 hours.
    No action will be necessary by the Congress this week to 
keep the trains running. We will seek your help after the 
Fourth of July recess, and I look forward to consulting with 
the Members of both the House and the Senate about our 
proposal.
    Now, the proposed agreement includes several important 
first steps about reform of Amtrak, measures that will help 
accomplish three important objectives: improving Amtrak's 
financial discipline and performance, making Amtrak's financial 
and operating performance transparent to the public, and 
providing the executive branch and the Congress with a better 
understanding of Amtrak's long-term assets and liabilities, and 
its cost control and revenue options. In short, what we are 
trying to interject is more business discipline, more 
accountability, and more complete and timely information for 
Congress and the executive branch about performance. I look 
forward in the coming weeks to working with all of you on the 
longer-term reform issues facing Amtrak.
    I really cannot say much more about the details of the 
agreement this morning, but I would like to express my personal 
thanks for the work done by the board of Amtrak and by our 
staff at the Department of Transportation in the last several 
days. In particular, I would like to thank Mayor John Robert 
Smith, the chair of Amtrak's board of directors, who has 
devoted a great deal of time and energy to resolving this 
crisis. As a former mayor, I know that his being away from home 
for this extended period of time has not been easy, so I 
appreciate his leadership and his dedication to reaching a 
solution of this crisis.
    Senator Breaux. Mr. Secretary, excuse me. At that point 
does Chairman Hollings or Chairman Murray or anybody else have 
any comments on this?
    Chairman Hollings. I would just add, thank you, Mr. 
Chairman, that we did submit to the Department of 
Transportation and the Secretary the bill and the report. Our 
last hearing was in March. We submitted this in April. We heard 
absolutely nothing about it. I will submit it again, along with 
over a dozen reforms, and we agree with you that we have got to 
work with the States. We have got to have a new financial plan, 
new cost accounting methods and everything else like that. In 
fact, we got from your Controller a lot of these ideas. We have 
been working with you, but to go down to the Chamber of 
Commerce and act like, ``Oh, wait a minute, nothing is 
happening and we have got to save Amtrak''--and what you have 
done with $100 million, as of last night, after 82 hours, heck, 
we got together $200 million in 1 hour, over half of the 
Congress, and your loan guarantee is really Chairman Murray's 
money. She will give you the $100. She will give you the $200. 
She will give you the $300. It is her money.
    [Laughter.]
    Chairman Hollings. It is the Congress' money. I mean, you 
act like you have got some money to give around. I mean, hell, 
we have been trying to give you the money, and you are having 
discussions about whether we are going to have a loan, and we 
have already granted it. If you could only accept it and get on 
with, not with the politics, but get on with Amtrak. We are 
going to get us a national rail system in this country.
    Secretary Mineta. Mr. Chairman, just to get to the point of 
an outline of a policy that has taken close to a year of back-
and-forth discussion between the Department of Transportation 
and the White House, and so that has taken a great deal of 
time. We helped you get your rail security bill. I helped get 
the statement of Administration policy on that. We do have your 
rail bill, S. 1991. One of the problems facing it is the total 
cost of that bill, and unless there are some other reasons for 
getting into some reforms and changes that would be needed, we 
cannot move forward on the bill as it is right now.
    Chairman Hollings. The bill has got the reforms. They have 
an amendment. Let us put an amendment up that supports your 
view and the Administration's view to cut the money, but I 
mean, time is of the essence. We are just diddling around and 
waiting. The Congress legislates, you folks execute, so do not 
worry about it. Just tell us your views. That is what we want 
to know. It is a bipartisan initiative, and really with respect 
to the States we are playing catch-up ball with the States. You 
got lines going from Oregon up to Washington, one of the finest 
lines there is; the State of California they have got on the 
ballot already this year a full $1 billion rail initiative, and 
you folks are sitting around meeting 13 hours over $100 
million. Come on, let's get going.
    Senator Breaux. Chairman Murray.
    Senator Murray. Mr. Secretary, I just have to add to what 
Chairman Hollings said. This is very frustrating. When you came 
before the Appropriations Committee, or actually Mr. Jackson 
did, we were told the $521 million request 4 months ago was a 
place-holder till we had a long-term proposal from the 
Administration, which we have been asking for since that time 
and still do not have, to the best of my knowledge, unless it 
was the chamber speech that you gave. And that is not a 
proposal, a legislative proposal that Chairman Hollings can 
look at.
    But my question to you immediately, before we move on to 
the next topic, is, you have just outlined that you are going 
to request some short-term, I understand, $100 million loan 
guarantee. Is that going to be in the form of an official 
request, and is that official request going to be for an 
appropriation, an emergency supplemental, or are you going to 
officially ask for a loan guarantee?
    Secretary Mineta. We will not be asking--what we 
contemplated on this short term, this $100 million right now, 
is not a loan guarantee.
    Senator Murray. The Administration's first part, your 
first----
    Secretary Mineta. First tranche.
    Senator Murray. Your first $100 million is not a loan 
guarantee?
    Secretary Mineta. We are not doing a loan guarantee under 
the RRIF program.
    Senator Murray. What is the $100 million that you have 
already agreed on with Amtrak to get you through the next 
several weeks?
    Secretary Mineta. That is a straight--it is a loan, but it 
is not under the RRIF, we are not executing it under the RRIF 
program.
    Senator Murray. Under what authority are you asking for a 
loan guarantee for that $100 million? You are giving them a 
direct loan under what authority?
    Secretary Mineta. Under the RRIF program.
    Senator Murray. Under the RRIF program you are going to 
give them a direct loan of $100 million, and then you are going 
to ask us for what, an appropriation?
    Secretary Mineta. We will then be asking for two--let us 
see, an additional $270, or the difference between $270 and 
the--so it will be the $170, in terms of the request that they 
were asking for.
    Senator Murray. You will be asking us for what, another 
loan, or an appropriation? Are you going to be asking for an 
emergency--that would be under an emergency----
    Senator Murray. So we are going to get an official request 
from the Administration for $170 million in our supplemental, 
or separate from that, an emergency request from the 
Administration for $170 million on top of what we have here 
already, in terms of our supplemental.
    Secretary Mineta. For a total of $270, because as I recall, 
the emergency supplemental at $55 million----
    Senator Murray. That is correct.
    Secretary Mineta. And in my conversations with Senator Byrd 
last week, I think he, or maybe it was this week, but he was 
talking about taking that to, I believe $205, and so that was 
left on that basis.
    Senator Murray. OK, well, I want to understand what we are 
going to be asked to do. You have already approved a $100 
million direct loan to Amtrak to get them through the next 
several weeks. You are now going to give us an official request 
for an emergency supplemental on top of everything else we have 
here. We are not going to take it out of homeland security or 
anywhere else. You are asking for $170 million for Congress to 
do an emergency supplemental for them, is that correct?
    Secretary Mineta. The whole determination about whether 
this will be a loan or a loan guarantee is something that I 
would like to come and discuss with you.
    Senator Murray. Now, when you say loan or loan guarantee, 
are you talking about your $100, or our $170?
    Secretary Mineta. The $170.
    Senator Murray. The $170.
    Secretary Mineta. That is right. The additional----
    Senator Murray. OK, I am--take apart the $100 you have 
already done. The $170 you are asking, is it going to be an 
emergency supplemental request, or is it going to be in the 
request of a loan?
    Secretary Mineta. It will be in the emergency supplemental 
request.
    Senator Murray. And when will we get that direct request 
from you?
    Secretary Mineta. I would hope that we would be able to do 
that soon after your return from the July 4 recess; I think you 
come back on July 8.
    Senator Murray. OK, then if I am to understand you, you are 
not asking us to assume further debt for Amtrak. You are asking 
us for an emergency supplemental of $170 million, correct?
    Secretary Mineta. That is correct.
    Senator Dorgan. Would you yield on that point? Mr. 
Chairman, I wonder if she would yield just for a brief----
    Senator Breaux. Senator Dorgan.
    Senator Dorgan. Could I ask the Secretary how----
    Secretary Mineta. May I correct this, Senator Dorgan?
    It still has not been determined, I guess, as to whether it 
will be a loan or a loan guarantee.
    Senator Murray. Well, Mr. Secretary, let me tell you, there 
is going to be a huge difference in that request. If you ask 
this Congress to give Amtrak $170 million in some kind of loan 
guarantee, that is just further debt to Amtrak, and it is a 
further debt to our transportation appropriations bill at a 
time when you have requested less than half of what they say 
they need in the coming fiscal year.
    So I would like to know as quickly as possible whether you 
are going to ask for an emergency supplemental, which is very 
different than asking us for a loan guarantee, and will have a 
very different financial impact on Amtrak.
    Secretary Mineta. We will get that to you.
    Senator Dorgan. If I might just inquire, if all of this 
occurs, on what date would Amtrak then run out of money when it 
has depleted the interim financial----
    Senator Murray. I would answer, Senator Dorgan, it 
completely depends on whether they are asking us for a loan 
guarantee that is further debt, whether we are looking at a 
supplemental, how much that request is. But I can tell you 
this, even in our appropriations request for next year, if we 
do not get the Administration to request the $1.2 billion that 
Amtrak is telling us that they need, we are back in this 
conversation we have had this last week by the end of 
September.
    Secretary Mineta. What we are requesting is to get us 
through this fiscal year.
    Senator Dorgan. So that is the end of September?
    Secretary Mineta. Yes, sir.
    Senator Dorgan. At which point Amtrak would run out of 
money again?
    Senator Murray. That is correct.
    Senator Breaux. Senator McCain.
    Senator McCain. Well, I think in the interest of straight 
talk we are going to give Amtrak what they need to keep 
operating. I think we all know that it is not going to shut 
down, and I think it is important to note that this will be one 
in a long series of bailouts that we have given to Amtrak since 
1971, and there are some of us, Mr. Secretary, that believe, as 
you do, that fundamental reforms have to be made in Amtrak. I 
do not think any Member of Congress is interested in having 
Amtrak shut down, and even if they went into bankruptcy they 
would not shut down, would they, Mr. Mead?
    Mr. Mead. That is correct.
    Senator McCain. I mean, so I am intrigued sometimes by the 
media, will Amtrak keep rolling, et cetera. The real question 
is, will we 2 or 3 or 4 years from now be back again with 
another bailout for Amtrak, as we have every few years since 
1971?
    I think also that the previous administrators of Amtrak who 
testified at that table that Amtrak was on the road to 
financial self-sufficiency, time after time after time, ought 
to be held to account. The board of directors of Amtrak ought 
to be held to account. Actually, they all ought to be replaced 
immediately, because they did not carry out their fiduciary 
duties but there are some of us who want reform, as you do, Mr. 
Secretary, as Mr. Mead has recommended for a long period of 
time, and I hope we can make those reforms even if it means 
shutting down a line in some Senator's State. And if we do not 
get those reforms, then we will continue to have a hemorrhage 
of American tax dollars.
    I really hope that we can come up with an Amtrak reform 
package that all of us can agree to, and if that requires some 
continued Government assistance, that is fine, but it is my 
understanding they are now $4.6 billion in debt, is that right, 
Mr. Mead?
    Mr. Mead. Very close to that.
    Senator McCain. A $4.6 billion debt is a pretty heavy debt 
load.
    Mr. Chairman, I know that the purpose of this hearing was 
to discuss the Mexican truck issue. Coming from a border State 
that is most affected by this issue, I believe that it is time 
we moved forward on it, as was our treaty commitment of NAFTA, 
which has had enormous beneficial effects economically to both 
the United States and Mexico, and I hope we can get this issue 
finally resolved, and I thank you, Mr. Chairman.
    Senator Breaux. Thank you, Senator McCain.
    Mr. Secretary, let us now get on--if you could summarize, 
Mr. Secretary, your statement on the Mexican truck situation, 
we will proceed to questions.
    Secretary Mineta. As all of you know, over the last several 
months we have been working diligently to try to address the 22 
specific requirements that Congress established in the fiscal 
year 2002 Transportation Appropriations Act as conditions to 
the opening and the operation of Mexican carriers outside the 
existing commercial zones. I am pleased to report to you today 
that we have succeeded in meeting the requirements of section 
350 of that legislation.
    The Act also directs the Department of Transportation 
Inspector General to conduct a review and to evaluate the 
Department's performance in 8 areas. It is my understanding 
that you received this report on Tuesday.
    The IG has raised a few issues, and we are working hard to 
address them, but I want to thank the Inspector General, Ken 
Mead, for the insight and analysis that he and his staff 
provided over this period. I can assure you, on behalf of 
President Bush, that we will not open the border if doing so 
poses an unacceptable safety risk. However, we expect to fully 
address all of the issues that have been identified in the IG's 
report to allow the border to open in the near future, and I 
will touch very briefly this morning on some of the steps we 
have taken to meet those requirements.
    Administrator Joe Clapp and the staff of the Federal Motor 
Carrier Safety Administration have done an outstanding job in 
hiring, training, and deploying enforcement staff for border 
operations. By the end of this month we will have hired and 
trained 144 border inspectors charged with conducting roadside 
inspections of vehicles and drivers. We have made significant 
progress in meeting our target for hiring safety auditors to 
conduct inspections of carriers prior to the issuance of any 
provisional authority, and by the end of June we will have 
hired all 67 safety auditors, and we will train and deploy all 
of them by July 29. We have also begun to hire safety 
investigators, even though we will not need them to perform 
safety audits for another 6 to 18 months. In the meantime, 
these staff will augment our inspection and audit staff. In 
all, by midsummer, DOT will have more than four times the 
number of personnel we had at the border in mid-2001.
    On another front, we issued final regulations in March to 
establish this new safety oversight system. These regulations 
help ensure that Mexico-domiciled carriers operating in the 
United States meet the same Federal motor carrier safety 
regulations that U.S. and Canadian carriers must satisfy. 
Mexican carriers will need to demonstrate that they have a drug 
and alcohol testing program, a system of compliance with U.S. 
hours-of-service requirements, valid insurance with a U.S.-
registered insurance company, and adequate vehicle maintenance 
and driver records, all before receiving operating authority.
    Mexican vehicles operating beyond the commercial zones must 
display a valid CVSA, or Commercial Vehicle Safety Alliance 
inspection decal, and we have signed agreements with all four 
border States requiring inspections of all Mexico-domiciled 
vehicles not displaying a valid CVSA decal.
    Finally, Congress directed FMCSA to conduct 50 percent of 
the safety audits and compliance reviews onsite in Mexico and 
we will do so. My written testimony offers greater detail on 
these and other steps that we have taken.
    Two other areas deserve special mention today. First, the 
U.S. Patriot Act requires a security check on any holder of a 
commercial driver license that has a hazardous materials 
endorsement. The regulation to implement this provision is 
currently under departmental review. In a nutshell, Mexican and 
Canadian drivers transporting hazardous materials will not 
operate beyond the commercial zone until security driver 
license checks comparable to those performed on U.S. drivers 
have been done. In addition, FMCSA will continue to work with 
TSA, Customs, INS and other Government agencies involved in 
border security to ensure that our safety programs are 
consistent and integrated with their security-focused 
initiatives.
    Second, we will keep improving our border infrastructure to 
handle increasing traffic volumes in the future. In this 
regard, I awarded $54 million in grants to the four southern 
border States for infrastructure improvements at border 
inspection stations.
    In closing, the Department remains firmly committed to 
ensuring the enhanced safety and security of commercial vehicle 
operations at our borders. As you know, DOT has inspected 
Mexican trucks and buses since 1995, and the guidance and 
additional resources provided by Congress have allowed us to 
continue to build on that strong program.
    I want to thank the Governments of Mexico and Canada for 
their cooperation in identifying and resolving a number of 
operational issues, and I thank this Committee in setting high 
standards for opening the southern border to help bring about 
the unprecedented preparations that I have discussed today.
    Again, I thank you for this opportunity to highlight our 
efforts.
    [The prepared statement of Secretary Mineta follows:]

        Prepared Statement of Hon. Norman Y. Mineta, Secretary, 
                      Department of Transportation

    Madam Chairwoman, Mr. Chairman and Members of the Subcommittees, it 
is a pleasure to appear before you today and to have the opportunity to 
report on the progress that the U.S. Department of Transportation has 
made to ensure the safe operation of Mexico-domiciled carriers once the 
President acts to implement the North American Free Trade Agreement's 
(NAFTA) transportation access provisions along our Southern border.

                              Introduction

    The Department is appreciative of the work of Congress on the FY 
2002 Transportation and Related Agencies Appropriations Act (the Act). 
The bill offered clear guidance on the necessary elements required to 
assure the compliance of Mexican commercial truck and bus companies 
with U.S. safety regulations.
    Section 350 of the Act set forth 22 steps that needed to be taken 
before the Department could process any applications from Mexican 
carriers during the fiscal year. Also, it required the DOT Inspector 
General (IG) to conduct a comprehensive review of border operations 
within 180 days of enactment.
    We have worked diligently to take the steps required of us in the 
Act, and I am pleased to report that we have succeeded. This was an 
intensive effort on the part of many agencies and individuals. It could 
not have been accomplished without the able leadership of Administrator 
Joe Clapp and the commitment of the staff of the Federal Motor Carrier 
Safety Administration (FMCSA), the Department, other Federal agencies, 
and our State partners. In the process, we have worked closely with the 
Mexican Government in numerous face-to-face meetings.
    As I indicated, the Act directs the DOT IG to conduct a review of 
our Southern border operations, and evaluate the Department's 
performance. During these past months, Department staff met regularly 
with the IG staff to discuss the progress on these issues. I 
particularly wish to thank Inspector General Kenneth Mead. The insight 
and analysis he and his staff provided us over this period proved 
extremely useful in assisting us to appropriately focus our activities.
    Now that the Inspector General has issued his report, by law I must 
evaluate it and determine if I can certify that opening the border does 
not pose an unacceptable safety risk. Only after this certification is 
made and the President lifts the moratorium, will Mexico-domiciled 
motor carriers be allowed to operate outside the commercial zones. The 
Inspector General has raised a few issues, and we are working hard to 
address them. I want to assure you, on behalf of President Bush, that 
the border will not be opened unless it can be done safely. We do 
expect to fully address all issues identified in the IG's report, to 
allow the border to open in the near future.

                 Requirements of the Appropriations Act

    The Act called for numerous conditions to be met before DOT could 
process applications for Mexico-domiciled motor carriers to operate 
outside of the border commercial zones this year. All of these 
conditions have been met. The chart attached to my testimony 
illustrates the tasks and the progress to date. Today I would like to 
highlight several of our major activities.

Staffing
    One of the most significant challenges was to hire, train, and 
deploy enforcement staff for border operations. The enforcement staff 
is composed of three distinct groups: Border Inspectors, Safety 
Auditors, and Safety Investigators. The Border Inspectors are charged 
with conducting roadside inspections of vehicles and drivers. The 
Safety Auditors will conduct safety audits of carriers prior to the 
FMCSA's issuance of provisional authority to operate beyond the 
commercial zones. The Safety Investigators will conduct Compliance 
Reviews of these carriers within their first 18 months of operations--
after they have established an operating history.
    By the end of this month, we will have hired and trained 144 
individuals to perform Border Inspector functions. In addition to 
Border Inspectors, we have made significant progress in meeting our 
target for Safety Auditors. By the end of June, we will have hired all 
67 Safety Auditors and all of these Safety Auditors will be trained and 
deployed by July 29. We have also recently issued selection 
certificates for Safety Investigators in Arizona and California. In 
addition, the review of employment applications for Texas Safety 
Investigators is underway.
    Although we have begun to hire Safety Investigators now, they will 
not be required to perform safety audits until approximately 6-18 
months from now, when they will be performing the actual audits. In the 
meantime, these staff will augment our inspection and audit staff.

Oversight Process for Mexico-domiciled Carriers
    The Act directed DOT to revise and complete its May 2001 proposed 
safety oversight regulations. On March 19, we issued final regulations 
establishing this safety oversight system. These regulations help 
ensure that Mexico-domiciled carriers operating in the U.S. will meet 
the same Federal Motor Carrier Safety Regulations (FMCSRs) that U.S. 
and Canadian carriers must satisfy. Now, Mexican carriers will be 
required to demonstrate that they have met U.S. requirements, such as 
having a drug and alcohol testing program, a system of compliance with 
U.S. hours-of-service requirements, valid insurance with a U.S. 
registered insurance company, and adequate vehicle maintenance and 
driver records, all before receiving operating authority.
    The regulations also provide that DOT will conduct a safety audit 
of each carrier prior to the issuance of provisional operating 
authority, and a compliance review prior to granting the carrier 
permanent operating authority. Congress also directed FMCSA to conduct 
50% of the safety audits and compliance reviews on-site in Mexico--and 
we will do so. In addition to the safety audit and compliance review 
requirement, our oversight includes a process for expedited enforcement 
action against those carriers committing specified offenses, such as 
operating without a commercial driver's license (CDL), operating 
vehicles that have been placed out of service, and operating an 
uninsured vehicle.

Vehicle Inspections
    We have issued regulations requiring Mexican vehicles operating 
beyond the commercial zones to be inspected every 90 days and to 
display a valid Commercial Vehicle Safety Alliance (CVSA) inspection 
decal. This provision applies to the provisional operating authority 
period and for 36 months after receiving permanent authority. We have 
also signed agreements with all four border States requiring State 
inspectors to conduct inspections of all Mexico-domiciled vehicles not 
displaying a valid CVSA decal during the provisional period, and for a 
period of three years after permanent authority has been issued to the 
carrier.

Other Requirements
    Weigh In Motion Scales. Weigh in Motion (WIM) Scales are in 
        place at 8 of the 10 highest volume crossings, and static 
        scales are in place for enforcement at all commercial 
        crossings. This exceeds the 5 WIMs as required by the Act. The 
        remaining 2 WIMs will be in place by year-end.

    Verification of License Status. Inspectors will 
        electronically verify the status and validity of the licenses 
        of 100% of the Mexico-domiciled CMV drivers operating beyond 
        the commercial zones--exceeding the requirements of the Act.

    DOT Numbers. A distinct DOT Number will be assigned for 
        Mexico-domiciled carriers engaging in operations beyond the 
        commercial zone. The number must be affixed to the vehicle in a 
        visible location.

    Staffing at Crossings. FMCSA or State motor carrier 
        inspectors will be on duty at all crossings that U.S. Customs 
        Service has designated commercial crossings during operating 
        hours.

    Operating Authority Violations. State inspectors will 
        enforce regulations concerning operating authority of Mexico-
        domiciled carriers or notify FMCSA staff so that it may take 
        any enforcement actions necessary.

    Facilities on Federal Sites. We have constructed 
        appropriate inspection facilities and out-of-service parking 
        areas to provide adequate capacity for conducting inspections 
        and detaining-out-of-service vehicles. These improvements 
        include paving and site utility work, installation of portable 
        office buildings, construction of inspection bays, and 
        construction of parking areas.

    Related Rules and Study. As required by the Act, we have 
        published the New Entrant Rule for U.S. and Canadian carriers, 
        the Rule for Certification of Inspectors and Auditors, the 
        Border Staffing Study, and initiated a Weigh in Motion site 
        determination study.

Hazardous Materials Driver Requirements
    The USA Patriot Act requires a security check on any holder of a 
CDL that has a hazardous materials endorsement. The USA Patriot Act 
applies to new applications and renewals. The regulation to implement 
this act is currently under Departmental review. We have had several 
conversations with both Mexican and Canadian officials about the 
requirements of the law. Mexican and Canadian CMV drivers operating 
vehicles transporting hazardous materials will not be permitted to 
operate beyond the commercial zones until security driver license 
checks, comparable to those performed on U.S. drivers, have been done.
    FMCSA is working with the Transportation Security Administration 
(TSA) and the U.S. Customs Service to address overall security aspects 
of cross-border operations. FMCSA expects to continue to meet with TSA, 
Customs, the Immigration and Naturalization Service, and other 
government agencies involved in border security, to ensure that our 
safety programs are consistent and are integrated with their security-
focused initiatives.
    The United States Customs Service is the lead agency for border 
security. Motor carrier safety inspectors have been trained to look for 
security risk indicators on commercial vehicles. If indicators are 
present, motor carrier inspectors have been instructed to notify 
Customs immediately. The partnership US DOT and the States have with 
Customs at the various ports is important in the detection of security 
risks at the border.

Border Infrastructure Grants
    Beyond our immediate efforts to assure the safe operation of 
Mexican carriers, we are also focused on improving our border 
infrastructure to handle increasing traffic volumes in the future. In 
this regard, I announced the awarding of grants to the four southern 
border States for infrastructure improvements at border inspection 
stations. With the distribution of these funds, we look to 
strengthening our partnership with the States in the inspection 
process.
    Funds for the Border Infrastructure Program (BIP) were made 
available by Congress from the Federal-aid highway revenue aligned 
budget authority to be distributed among the States of Arizona, 
California, New Mexico, and Texas. Of the $54 million available, $2.1 
million was awarded to Arizona; $8.9 million to California; $2.2 
million to New Mexico; and $40.8 million to Texas. Four criteria were 
used to award the grants: safety, number of commercial vehicles, 
delays, and traffic patterns.
    The objective of the grant program is twofold: the safe operation 
of Mexico-domiciled commercial motor vehicles operating in the United 
States and improved traffic flow at border crossings in the four border 
states. Examples of the types of projects funded under the BIP are 
construction of eight new commercial motor vehicle safety inspection 
facilities at the border in Texas, upgrade and final construction of an 
automated port of entry at the Santa Teresa, NM, border crossing, and 
construction of additional inspection bays and parking areas for out-
of-service vehicles at the commercial vehicle enforcement facility at 
Calexico, CA.

                               Conclusion

    In closing, I want to say that the Department is committed to 
ensuring the enhanced safety and security of commercial vehicle 
operations at our borders. At our Southern border, DOT has been 
inspecting Mexican trucks and buses since 1995. The guidance and 
additional resources provided by Congress have allowed us to continue 
to build on that strong program. By mid-summer, DOT will have more than 
four times the number of personnel we had at the border in mid-2001.
    We are confident that we have achieved our shared goal of setting a 
firm safety foundation for expanded cross-border operations. When 
operating authority is granted, Mexico-domiciled carriers, as well as 
U.S. and Canadian carriers, will all be governed by the same safety 
standards when operating in the United States.
    At this time we have received a small number of applications from 
Mexico-domiciled carriers to operate beyond the commercial zones. To 
date, 31 Mexican long-haul carriers have applied for authority to 
operate in the interior of the United States, and 101 have applied to 
operate within the commercial zones.
    As you can see from these numbers, it appears that interest among 
Mexican carriers for expanded authority is beginning at a somewhat 
gradual pace. Applications from Mexico-domiciled carriers will be 
processed as they are submitted. However, the border will not be opened 
to expanded cross-border access until I have certified that the border 
can be safely opened, and the President has lifted the moratorium on 
Mexico-domiciled carrier access.
    In addition to taking the steps set out for us by Congress, we have 
been working closely with our Canadian and Mexican counterparts to 
identify and resolve the numerous operational issues involved in 
opening the border to cross-border motor carrier traffic. I want to 
thank the governments of both Mexico and Canada for their cooperation. 
Our goal is to work together to realize the promise of one market in 
North America, while ensuring the safety and security of our citizens.
    Madam Chairwoman, Mr. Chairman, the actions of your committees in 
creating the FMCSA and in setting high standards for opening the 
Southern border have been instrumental in bringing about the 
unprecedented preparations I have discussed today. You are to be 
commended for your roles in these achievements.
    I look forward to your questions today and to working with Congress 
in the months ahead. I thank you once again for the opportunity to 
highlight the steps we have taken to ensure that our NAFTA commitments 
are fulfilled in a safe and secure manner.

                            COMPLIANCE MATRIX
 IMPLEMENTATION OF SECTION 350 OF THE DEPARTMENT'S FY 2002 APPROPRIATION
                                   ACT
------------------------------------------------------------------------
                  Action                               Status
------------------------------------------------------------------------
1) Rule: Rule issued to establish the       Completed: On March 19,
 safety audit. 350(a)(1)(A).                 2002, the Department issued
                                             an Interim Final Rule (IFR)
                                             titled ``Safety Monitoring
                                             and Compliance Initiative
                                             for Mexico-Domiciled Motor
                                             Carriers Operating in the
                                             U.S.'' This rule not only
                                             established the safety
                                             audit as an additional
                                             safety compliance tool but
                                             also outlined a
                                             comprehensive program for
                                             tracking the safety
                                             performance of carriers
                                             once they have received
                                             provisional authority and/
                                             or certificate of
                                             registration.
------------------------------------------------------------------------
2) Policy: Mexican carriers with 3 or       Completed: On April 3, 2002
 fewer vehicles need not undergo on-site     FMCSA issued a policy
 safety audit, however FMCSA must ensure     titled, ``Selection Process
 50% of all audits are on site and on-site   for Safety Audits and
 inspections must cover 50% of estimated     Compliance Reviews of
 truck traffic in any year. 350(a)(1)(C).    Mexico-Domiciled Carriers
                                             Operating Beyond the
                                             Commercial Zones'' that
                                             goes beyond the 50% on-site
                                             review mandate by requiring
                                             FMCSA safety auditors and
                                             safety investigators to
                                             conduct on-site, pre-
                                             authority safety audits on
                                             at least 85% of all Mexico-
                                             domiciled carriers that
                                             apply for operating
                                             authority beyond the
                                             commercial zones.
------------------------------------------------------------------------
3) Rule: Rule issued to require compliance  Completed: On March 19,
 review and to ensure Mexican carrier        2002, the Department issued
 receives satisfactory rating prior to       an IFR titled ``Safety
 permanent authority. 350(a)(2).             Monitoring and Compliance
                                             Initiative for Mexico-
                                             Domiciled Motor Carriers
                                             Operating in the U.S.'' The
                                             IFR modifies the FMCSRs to
                                             include section 385.109
                                             that requires compliance
                                             reviews of Mexico-domiciled
                                             long-haul operations to be
                                             conducted consistent with
                                             our existing safety fitness
                                             evaluation procedures in
                                             part 385 and that the
                                             carrier receive a
                                             Satisfactory safety rating.
------------------------------------------------------------------------
4) Policy: Compliance reviews for 3 or      Completed: On April 3, 2002,
 fewer vehicle carriers need not be done     FMCSA issued a policy
 on-site, however FMCSA must ensure (1)      titled, ``Selection Process
 50% of all compliance reviews are on site   for Safety Audits and
 and (2) any Mexican carrier with 4 or       Compliance Reviews of
 more vehicles that did not undergo an on-   Mexico-Domiciled Carriers
 site safety audit receives an on-site       Operating Beyond the
 compliance review. 350(a)(2)(A).(B).        Commercial Zones''
                                             requiring an on-site
                                             compliance review within 18
                                             months on at least 50% of
                                             all Mexico-domiciled
                                             carriers that have been
                                             granted provisional
                                             operating authority to
                                             operate beyond the
                                             commercial zones.
------------------------------------------------------------------------
5) Policy and Agreements: Federal & State   Completed: On April 3, 2002,
 inspectors to electronically verify the     FMCSA issued a policy
 license of all hazardous materials          titled, ``Driver's License
 drivers, all undergoing a level I           Verification'', that goes
 inspection, and 50% of all other long       beyond the Section 350
 haul drivers. 350(a)(3).                    mandate by requiring all
                                             Federal and State
                                             inspectors to
                                             electronically verify the
                                             licenses of all (100%)
                                             Mexico-domiciled drivers
                                             operating commercial motor
                                             vehicles beyond the
                                             commercial zones until such
                                             time as base traffic volume
                                             can be ascertained.
------------------------------------------------------------------------
6) Rule: Gives a distinct DOT # to long     Completed: On March 1 9,
 haul vs. commercial zone carriers.          2002, the Department issued
 350(a)(4).                                  two IFR titled ``Revision
                                             of Regulations and
                                             Application Form for Mexico-
                                             Domiciled Motor Carriers to
                                             Operate in the US
                                             Municipalities and
                                             Commercial Zones on the US-
                                             Mexico Border'' and
                                             ``Application by Certain
                                             Mexico-Domiciled Motor
                                             Carriers to Operate Beyond
                                             US Municipalities and
                                             Commercial Zones on the US-
                                             Mexico Border''. Each of
                                             these rules require the
                                             FMCSA to assign distinctive
                                             USDOT numbers that
                                             distinguishes a carrier as
                                             a commercial zone or long
                                             haul motor carrier by
                                             adding a ``Z'' or ``X''
                                             suffix after the USDOT
                                             number.
------------------------------------------------------------------------
7) Rule and Agreements: Requires            Completed: On March 1 9,
 inspection of all long haul Mexican         2002, the Department issued
 commercial vehicles that do not display a   an IFR titled ``Safety
 valid CVSA decal (until carrier has         Monitoring and Compliance
 permanent authority for 3 years).           Initiative for Mexico-
 350(a)(5).                                  Domiciled Motor Carriers
                                             Operating in the U.S.'',
                                             that modifies Part 385 of
                                             the FMCSRs to include
                                             section 385.103 CVSA decal.
                                             Section 385.103 requires
                                             each Mexico-domiciled
                                             carrier granted provisional
                                             operating authority to
                                             operate beyond the
                                             commercial zone to have a
                                             current decal attesting to
                                             a satisfactory inspection
                                             by a CVSA inspector on
                                             every commercial motor
                                             vehicle operated in the US.
                                             In addition, FMCSA has
                                             entered into cooperative
                                             agreements with the lead
                                             MCSAP agencies from the 4
                                             border states to provide
                                             the resources necessary to
                                             implement this requirement.
------------------------------------------------------------------------
8) Agreements: Requires State inspectors    Completed: FMCSA has entered
 to enforce FMCSRs or notify FMCSA staff     into cooperative agreements
 of violations. 350(a)(6).                   with State enforcement
                                             representatives from the 4
                                             border states to provide
                                             the resources necessary to
                                             implement this requirement.
------------------------------------------------------------------------
9) Agreements: 5 of 10 highest volume       Completed: On June 24,2002,
 crossings are to have WINS and requires     WIM systems are operational
 inspectors to verify weight of long hauls   in eight of the 10 highest
 where present and equip all crossings       volume crossings (Otay
 with scales suitable for enforcement.       Mesa, Calexico, Nogales,
 350(a)(7)(A).                               Columbia, Brownsville,
                                             Pharr, El Paso (Ysleta) and
                                             El Paso (Bridge of the
                                             Americas). In addition,
                                             portable/static scales have
                                             been purchased and are
                                             present at all commercial
                                             crossings.
------------------------------------------------------------------------
10) Contract: Initiates a study to          Completed: On April 15,
 determine where other WIMs should be        2002, FMCSA executed a
 placed. 350(a)(7)(B).                       contract with the Texas
                                             Transportation Institute
                                             and the Texas Department of
                                             Public Safety to determine
                                             the need and potential
                                             placement of additional
                                             WIMS.
------------------------------------------------------------------------
11) Rule: FMCSA has issued a policy to      Completed: On March 19,
 ensure no long haul vehicle will be         2002, the Department issued
 granted authority unless they have proof    an IFR titled ``Application
 of insurance by a US licensed insurance     by Certain Mexico-Domiciled
 carrier. 350(a)(8).                         Motor Carriers to Operate
                                             Beyond US Municipalities
                                             and Commercial Zones on the
                                             US-Mexico Border'', that
                                             requires that Mexican long
                                             haul carriers use a US
                                             licensed insurance carrier.
------------------------------------------------------------------------
12) Agreements: Requires that long haul     Completed: FMCSA has entered
 trucks only cross where a certified         into cooperative agreements
 inspector is on duty. 350(a)(9).            with State enforcement
                                             representatives from each
                                             of the 4 border states to
                                             provide the resources
                                             necessary to implement this
                                             requirement.
------------------------------------------------------------------------
13) Agreements: Requires long haul trucks   Underway: Federal facilities
 to cross only where adequate capacity       funds have been provided to
 exists to conduct a sufficient number of    GSA for site and utility
 meaningful inspections and where 005        work necessary for
 parking is available. 350(a)(9).            inspection bays and out of
                                             service parking. Work is
                                             scheduled for completion by
                                             6/30/02.
------------------------------------------------------------------------
14) Rule: Publishes New Entrant Rule        Completed: FMCSA issued this
 350(a)(10)(A).                              Interim Final Rule (IFR) on
                                             May 13, 2002, and made it
                                             effective January 1, 2003,
                                             to ensure safe operations
                                             by new entrant motor
                                             carriers. This IFR requires
                                             a safety audit be
                                             conducted, among other
                                             things, for new entrant
                                             carriers, to ensure
                                             understanding and
                                             compliance with all Federal
                                             motor carrier regulations,
                                             etc. The comment period
                                             ends July 12, 2002.
------------------------------------------------------------------------
15) Rule: Publishes Inspectors/Auditor/SI   Completed: On March 19, 2002
 Certification Rule 350(a)(10)(B).           FMCSA published a Final
                                             Rule titled, Certification
                                             of Safety Auditors, Safety
                                             Investigators, and Safety
                                             Inspectors that establishes
                                             procedures to certify and
                                             maintain certification for
                                             inspectors, auditors and
                                             investigators.
------------------------------------------------------------------------
16) Policy: Publishes Border Staffing       Completed: On May 14, 2002,
 Study 350(a)(10)(C).                        FMCSA published a study and
                                             a methodology for
                                             estimating border staffing
                                             needs.
------------------------------------------------------------------------
17) Policy: Publishes policy on leasing     Completed: On November 16,
 350(a)(10)(D).                              2001, FMCSA issued a policy
                                             titled, Enforcement of
                                             Sections 205 and 219 of the
                                             Motor Carrier Safety
                                             Improvement Act (MCSIA)
                                             that clarified leasing
                                             issues and specifies
                                             penalties for violators.
------------------------------------------------------------------------
18) Policy: Publishes policy on scope of    Completed: On November 16,
 authority enforcement 350(a)(10)(E).        2001, FMCSA issued a policy
                                             titled, Enforcement of
                                             Sections 205 and 219 of the
                                             Motor Carrier Safety
                                             Improvement Act (MCSIA)
                                             that defined Federal and
                                             State enforcement
                                             procedures regarding
                                             carriers that operate
                                             without registration or
                                             beyond the scope of their
                                             authority and identifies
                                             penalties for violators.
------------------------------------------------------------------------
19) Agreement: Mexican hazardous materials  Pending: FMCSA is awaiting
 drivers must meet same security             issuance of the USA PATRIOT
 requirements as US hazardous materials      Act rule currently under
 drivers. 350(b).                            Departmental review. Until
                                             such time as the rule is
                                             issued and an agreement
                                             with the Mexican government
                                             is in place establishing
                                             similar requirements on
                                             hazardous materials
                                             drivers, Mexican hazardous
                                             materials drivers will not
                                             be permitted to operate
                                             beyond commercial zones.
------------------------------------------------------------------------
20) Border Infrastructure Grants: $54M in   Completed: On June 5, 2002,
 Border Infrastructure Grants (BIP) was      the Secretary awarded $54M
 earmarked for border improvements and       to the border states of
 construction..                              Arizona, California, New
                                             Mexico and Texas. Of the
                                             $54M, $2.1 million will be
                                             awarded to Arizona, $8.9M
                                             to California, $2.2M to New
                                             Mexico, and $40.8M to
                                             Texas.
------------------------------------------------------------------------
21) IG Review: The DOT Inspector General    Underway: A report
 conducts a comprehensive review of border   documenting the findings of
 operations within 180 days of enactment     the IG's review of the
 to verify specific requirements are met.    Department's border
 350(c)(1).                                  operations should be
                                             completed by 6/30/02.
------------------------------------------------------------------------
22) Certification By The Secretary: The     Pending: The Secretary's
 Secretary of Transportation must certify    certification will be
 in writing that the opening of the border   considered based upon
 does not pose an unacceptable safety risk   review of the Inspector
 to the American public. 350(c)(2).          General's report. No
                                             operations will be
                                             permitted outside the
                                             commercial zone until
                                             certification is made.
------------------------------------------------------------------------


    Senator Breaux. I would like to go ahead and get Mr. Mead's 
statement. We have a vote.

     STATEMENT OF HON. KENNETH M. MEAD, INSPECTOR GENERAL, 
                  DEPARTMENT OF TRANSPORTATION

    Mr. Mead. Thank you, Mr. Chairman. The law says we are 
supposed to do an audit within 180 days of its enactment. We 
did so. We provided a report to Secretary Mineta, and you have 
that report. The law also built in another audit requirement 
for us within the next 180 days.
    I do want to say that I think Congress established a very 
good process here. It set up a number of safety requirements, 
enabled us to bring information directly to the attention of 
the Secretary as this process was unfolding, and that allows 
for a more expeditious closing of safety gaps.
    The requirements, in fact, were intended to ensure that 
some basic safeguards would be in place before trucks would 
begin long-haul operations. For example, long-haul Mexican 
drivers must have a valid commercial driver's license, they 
must comply with U.S. hours-of-service rules, each and every 
long-haul truck must be inspected every 90 days and display a 
special sticker and a special DOT identification number. I 
think that is a particularly strong provision. Carriers must 
undergo safety audits before provisional long-haul authority is 
granted, and another review within 18 months before being 
granted permanent authority.
    Our work has shown that there is a direct correlation 
between the condition of Mexican trucks and the level of 
inspection resources. The more likely the chance of inspection, 
the better the condition of the vehicle. The percent of 
inspected vehicles placed out of service has declined from 44 
percent in 1997 to 34 percent in 2001. To date, 40 carriers 
have applied for long-haul authority. I have no way of 
forecasting when or to what extent the long-haul carriers will 
apply, but I agree with your assessment in your opening 
remarks, Senator Murray. Twenty-six carriers indicated they 
intended to operate a combined total of 118 vehicles, and you 
say, what happened to the other applications? Well, the other 
applications were incomplete; they did not say how many 
vehicles they intend to operate long-haul in the United States.
    We found that the Department and the Federal Motor Carrier 
Safety Administration in fact made very substantial progress in 
meeting the Act's requirements to hire and train inspectors, 
establish inspection facilities, and develop safety processes 
and procedures for Mexican long-haul carriers. There are a 
number of actions in process and planned that will require 
aggressive follow-through. We have reviewed the Federal Motor 
Carrier Safety Administration's plans for these actions and, 
with a couple of exceptions, we think they are credible and 
achievable within the next 45 to 60 days.
    We have made a series of recommendations to the Secretary. 
He has agreed to act on them. I think it is important to note 
that a lot of our efforts to date have focused on verifying 
that resources, facilities and communications systems are in 
place to implement the basic requirements of the Act. The key 
once the border opens will be how effectively these resources 
are used and procedures are implemented. We will be maintaining 
this carefully during our future audit work.
    Another matter that we have raised with the Secretary, and 
I want to call to your attention, is that currently only two 
States, Arizona and California, authorize their enforcement 
personnel to take actions against vehicles operating without 
authority. State law enforcement officials can take action if 
they find reckless driving, or if the truck has mechanical 
failure, but if the truck is there illegally, in 48 States they 
cannot take action.
    In 2000, DOT issued a regulation saying the States had 
until the end of 2003 to fix that and pass a law. Well, only 
two have done it, so if you find a truck operating illegally 
in, say, the State of Colorado or Louisiana, State law 
enforcement officers cannot take enforcement action.
    In 1999, we reported that at least 52 Mexican-domiciled 
motor carriers operated improperly in 20 States, outside the 4 
border States, and we know this problem has continued. We have 
discussed this with the Secretary, the Deputy Secretary, and 
Mr. Clapp, and we think there can be a ready fix to the 
situation. Rather than waiting for every State to pass a law, 
we think the Administration can issue a regulation saying that 
operating illegally is, in fact, a safety violation, which 
would enable the States to enforce it, and we would like to see 
that happen.
    I will conclude now, and we can get into details later on 
if you would like, with questions.
    [The prepared statement of Mr. Mead follows:]

    Prepared Statement of Hon. Kenneth M. Mead, Inspector General, 
                      Department of Transportation

    Madam Chairman, Mr. Chairman and Members of the Subcommittees:
    We appreciate the opportunity to testify on the implementation of 
commercial vehicle safety requirements at the U.S.-Mexico border. The 
Fiscal Year (FY) 2002 Transportation and Related Agencies 
Appropriations Act (the Act) directed the Office of Inspector General 
(OIG) to conduct a comprehensive audit of border operations to verify 
whether safety requirements are in place.\1\ The Act requires us to 
conduct another audit within 180 days and at least annually thereafter.
---------------------------------------------------------------------------
    \1\ The Act directed the OIG to verify eight specific requirements 
that include (1) filling and training all new inspector positions, (2) 
training inspectors who will be conducting compliance reviews as safety 
specialists, (3) not transferring inspectors who will be conducting 
compliance reviews from elsewhere in the United States, (4) ensuring 
adequate capacity at each crossing to inspect and place vehicles out of 
service, (5) implementing a policy to ensure compliance with U.S. 
hours-of-service rules, (6) ensuring that Mexico's information 
infrastructure is sufficiently accurate, accessible and integrated with 
that of U.S. law enforcement, and that telecommunications links are 
adequate at all crossings and in mobile enforcement units operating 
adjacent to the border, (7) developing a database that is accessible 
and enables safety monitoring of carriers and drivers, and (8) 
establishing measures to ensure monitoring and enforcement of licensing 
of Mexican carriers.
---------------------------------------------------------------------------
    We completed our first required review within the stipulated 180 
days and provided a report on this review to the Secretary on June 25, 
2002. The Act requires the Secretary to address our findings on safety 
requirements and certify in writing that opening the border does not 
pose an unacceptable safety risk.
    Congress established a good process in the Appropriations Act. It 
enabled us to bring information to the attention of the Secretary, 
Deputy Secretary, and the Federal Motor Carrier Safety Administration 
(FMCSA) as our work progressed so that actions could be taken and plans 
could be adjusted to close safety gaps.
    The requirements that were written into this year's Appropriations 
Act were intended to ensure that some very basic safeguards will be in 
place when the U.S.-Mexico border opens to long-haul commercial 
traffic. For example, the law requires Mexican drivers to comply with 
U.S. hours-of-service requirements and have valid commercial driver's 
licenses (CDL) that will be checked as those drivers enter the United 
States in long-haul designated vehicles. Trucks that will be used in 
long-haul operations must be subjected to intensive inspections every 
90 days and must display a unique Department of Transportation (DOT) 
number that identifies them as long-haul vehicles. Carriers must 
possess insurance issued by companies licensed in the United States, 
and must undergo safety exams before being granted provisional long-
haul authority and will then have to undergo a safety compliance review 
within 18-months before that authority can become permanent.
    The Act provided $140 million for FMCSA and the States to make sure 
these requirements are met. We have grouped the requirements into three 
categories: (1) hiring and training inspectors, (2) building new and 
improving existing inspection facilities, and (3) developing systems to 
monitor and ensure the safety of Mexican carriers operating long-haul 
vehicles in the United States.
    Our efforts to verify these requirements included multiple trips to 
the 25 commercial border crossings--most recently on June 20--to verify 
the changes in staffing and inspection facilities. Our staff also met 
with Mexican officials and performed audit work in Mexico on the driver 
and carrier databases, which included performing real-time testing from 
the U.S. border crossings and mobile enforcement units operating in the 
border States.
    Two factors will likely determine the ultimate effectiveness of the 
safeguards that have been put in place. First, the size of the 
workforce and the facilities needed to provide sufficient coverage of 
trucks and buses bound for the interior of the United States will be 
driven by the number of carriers that apply for long-haul operating 
authority. The number of applications is picking up, and as of June 25, 
2002, FMCSA had received applications from 40 carriers applying for 
long-haul authority. Twenty-six carriers indicated they intended to 
operate a combined total of 118 vehicles. Fourteen of the applications 
were incomplete and did not provide information on the number of 
vehicles they intend to operate long-haul in the United States. It is 
likely that over time, long-haul traffic will build, but we have no 
basis to forecast how quickly or to what extent that will occur.
    Second, there is a direct correlation between the condition of 
Mexican trucks entering the United States and the level of inspection 
resources at the border. Our work has shown that the more likely the 
chance of inspection, the better the condition of the vehicles. As 
shown in Figure 1, the out-of-service rates for Mexican trucks seeking 
to enter the U.S. commercial zones declined from 44 percent in 1997 to 
34 percent in 2001 as the number of inspections increased. Out-of-
service rates by crossing are provided in the Attachment.

 Figure 1: Mexican Vehicle Out-of-Service Rates Compared to Number of 

                         Inspections Performed




    Based on our verification work, FMCSA has made substantial progress 
in meeting the Act's requirements to hire and train inspectors, 
establish inspection facilities, and develop safety processes and 
procedures for Mexican long-haul carriers. However, there are a number 
of actions in process and planned that will require aggressive follow 
through to meet the Act's requirements. We have reviewed FMCSA's plans 
for completing these actions, and we believe that with two exceptions, 
which I will discuss shortly, they are credible and achievable within 
the next 45 to 60 days. We have made a series of recommendations to the 
Secretary that will assist the Department in tracking FMCSA's efforts 
to implement actions necessary to fully comply with the Act's 
requirements.
    It is important to recognize that our efforts to date have focused 
on verifying that FMCSA has staff, facilities, equipment, and 
procedures in place to implement the basic requirements of the Act. The 
key once the border opens will be how effectively these resources are 
used and procedures are implemented. We will be monitoring this 
carefully during our required follow-on audits.
    Also, as long-haul traffic materializes, it may be necessary for 
FMCSA and the States to adjust their inspection resources to meet the 
volume, location, and condition of that traffic. The Department will 
need to have a process for reevaluating overall resource requirements 
and inspection facilities at the U.S.-Mexico border and to make 
adjustments as necessary to maintain adequate staffing and facilities.
    Another matter that we want to bring to the attention of the 
Secretary and Congress is that currently, only two States--Arizona and 
California--have enacted legislation authorizing their enforcement 
personnel to take action when they encounter a vehicle operating 
without authority. Enforcement personnel in all States can place a 
vehicle out of service for serious safety violations but operating 
without valid operating authority is currently not considered a safety 
violation. In March 2000, FMCSA issued a rule requiring States to 
authorize their enforcement personnel to take action when they 
encounter a vehicle that does not have valid operating authority. 
States are to comply with this requirement by the end of FY 2003.
    In 1999, we reported that at least 52 Mexican-domiciled motor 
carriers operated improperly in 20 States beyond the 4 border States. 
Roadside inspection data throughout the United States show this has 
continued. The primary concern is not necessarily long-haul carriers 
whose authority will be checked every 90 days, but rather carriers only 
authorized to operate in the commercial zones that continue beyond the 
zones. With the exception of Arizona and California, State enforcement 
personnel do not have authority to put them out of service.
    If Congress and the Department want to accelerate the ability of 
States to enforce operating authority, there are several options for 
doing so that are described in our report.
                                 ______
                                 
    I would like to turn now and briefly discuss some specific areas 
that our work has focused on.
    Hiring and Training Inspectors. By July 31, 2002, FMCSA plans to 
have filled 198 of the 214 new inspector positions assigned to the 
U.S.-Mexico border. By that date, 171 of those inspector positions 
should be trained. The Act referred generically to all funded positions 
as ``inspectors,'' but in practice the 214 Federal positions will be 
responsible for a full range of activities, including inspecting trucks 
and drivers at the border, conducting safety exams, and performing 
compliance reviews and investigations.

    FMCSA has hired 138 of the 144 inspectors it plans to 
        locate at the U.S.-Mexico border to conduct driver and vehicle 
        inspections. This represents 60 inspectors that were at the 
        border prior to the Act's passage and another 78 new inspectors 
        that have been hired since January. FMCSA needs to hire 6 more 
        inspectors and 30 inspectors must be trained. All but 1 of the 
        30 inspectors will be trained by July 26, 2002. The remaining 
        inspector is scheduled to come on board in August and will 
        complete training in October.

    FMCSA has hired 91 auditors to conduct safety exams which 
        evaluate basic safety management controls to determine if the 
        Mexican carrier is able to operate safely in interstate 
        commerce before being granted provisional authority to operate 
        in the U.S. FMCSA exceeded its hiring goal of 67 auditors to 
        ensure an adequate pool of auditors is available if attrition 
        occurs, either through turnover during the hiring or training 
        process, or if auditors are promoted to the higher-paying 
        investigator or supervisor positions. Fifty auditors are fully 
        trained and 17 more auditors will be trained by July 12 to 
        bring the total to FMCSA's goal of 67 trained auditors.

    FMCSA does not plan to begin hiring safety investigators 
        until July because compliance reviews should not be required 
        until October or November 2002 at the earliest and will not be 
        conducted routinely until at least January 2003. Compliance 
        reviews assess the safety performance of a carrier's operations 
        and its regulatory compliance as a basis for granting permanent 
        operating authority. The Act provides up to 18 months before a 
        compliance review is required in order to allow motor carriers 
        time to develop a history of operations against which FMCSA can 
        measure compliance.
       This differs from the immediate need for inspectors and 
        auditors, who will perform vehicle and driver inspections and 
        safety exams of Mexican long haul carriers. The first training 
        class for investigators ends on September 27, 2002, and 19 
        investigators should be fully trained to perform compliance 
        reviews by that time. The remaining investigators should be 
        hired and fully trained by November 22, 2002. This area is one 
        of the exceptions where FMCSA's plans are not scheduled for 
        completion in the next 60 days.
       A circumstance that could require a compliance review before a 
        history of operations is established would be if a carrier 
        commits one or more of a specific set of safety violations that 
        triggers an immediate compliance review. If this occurs, FMCSA 
        plans to use the one safety investigator currently assigned to 
        the border or another staff member assigned to the border who 
        is also a trained investigator to conduct compliance reviews.

    The Act requires us to verify that inspectors conducting 
        compliance reviews--the investigators--are not transferred from 
        other parts of the United States, leaving those areas 
        vulnerable. We have not seen transfers of any personnel in the 
        hiring FMCSA has done to date, but we will continue to verify 
        how the investigator positions are filled when FMCSA begins to 
        bring investigators onboard in July.
       FMCSA has not yet hired five border supervisors to oversee the 
        activities of investigators, auditors, and inspectors, but will 
        rely on existing crossing supervisors and FMCSA State directors 
        to provide supervisory guidance until all five supervisory 
        positions are filled and trained. FMCSA plans to fill all five 
        supervisory positions by July 15, 2002. However, supervisors 
        will be required to attend the 9-week investigator training if 
        they have not already been trained as investigators. The first 
        investigator class begins July 29, 2002, and ends September 27, 
        2002. This area is the second exception where FMCSA's plans are 
        not scheduled for completion in the next 60 days.

    All four border States and FMCSA have signed agreements to 
        provide inspection coverage during all hours the crossings are 
        open to commercial traffic from Mexico.\2\ Schedules have been 
        developed and will be implemented when the border opens.
---------------------------------------------------------------------------
    \2\ Except at Sasabe, a low-volume crossing where, according to 
FMCSA, an agreement exists between the U.S. Customs Service and the 
State of Arizona to detain long-haul vehicles until an inspector can be 
called and the vehicle inspected.

    Adequacy of Facilities. By June 30, 2002, facilities should be 
adequate for inspectors to enforce the Act's requirements at 23 of the 
25 commercial border crossings. FMCSA plans to reach agreements to 
obtain inspection facilities for the remaining two, low-volume traffic 
crossings by June 30, 2002.
    Until earlier this year, FMCSA had not attempted to procure its own 
facilities or seek improvements to space it had borrowed from the U.S. 
Customs Service on General Services Administration (GSA)-owned or 
leased facilities. As a result, FMCSA did not have dedicated space to 
inspect vehicles and place vehicles out of service.\3\ The space FMCSA 
had been occupying in many cases was not sufficient to support the 
level and quantity of inspections necessary to satisfy the Act's 
requirements, and to maintain sufficient coverage of commercial traffic 
entering the United States to operate in the commercial zones.
---------------------------------------------------------------------------
    \3\ Trucks are removed from service because of serious safety 
violations, including inoperative and defective brakes, defective 
frames and steering systems, and bad tires. Drivers are placed out of 
service for reasons that include: not having valid CDLs, not complying 
with hours-of-service rules, or not having logbooks to document the 
number of hours they were on duty.
---------------------------------------------------------------------------
    For example, in 2001, we found that at: 17 of the 25 crossings, 
Federal inspectors had space to inspect only 1 or 2 trucks at a time; 
12 of the 25 crossings, Federal inspectors had only 1 or 2 spaces to 
park vehicles placed out of service and often the out-of-service space 
was the same as the inspection space; and 18 of the 25 crossings, 
Federal inspectors did not have dedicated telephone lines to access 
databases, such as those for validating CDLs.
    This situation changed dramatically in 2002. At 11 crossings, 
accounting for 51 percent of total traffic, the out-of-service space 
will have increased by 100 percent or more. For example, at the Pharr, 
Texas crossing, which had the third highest volume of commercial 
traffic in 2001, inspectors had access to two inspection spaces and 
five out-of-service parking spaces. The new facilities will provide 
FMCSA with 4 inspection spaces and 15 out-of-service parking spaces, 
which is more than double the original space. The Attachment identifies 
the status of facilities at each of the commercial crossings along the 
U.S.-Mexico border.
    The most significant improvements are at the high volume crossings 
where the lack of facilities has hindered the ability of inspectors to 
monitor and enforce safety regulations. The Act provided FMCSA $2.3 
million to procure and improve Federal inspection facilities. FMCSA has 
entered into agreements with GSA to obtain dedicated inspection and 
out-of-service space and to make necessary improvements. Improvements 
were needed at 19 of the 25 commercial border crossings and ongoing 
improvements have estimated completion dates by June 30, 2002. Existing 
facilities at four of the remaining six crossings are sufficiently 
adequate without improvements to enforce the Act's requirements, and 
the improvements needed at two low-volume California crossings--Tecate 
and Andrade--have not yet been determined. However, negotiations are 
underway to obtain inspection facilities at Tecate and Andrade, and 
FMCSA anticipates finalizing the plans by June 30, 2002.
    The Act provided the four southern border States with a total of 
$66 million for the construction of new or improvement of existing 
State border inspection facilities. The funds have been distributed as 
follows: California--$8.9 million, Arizona--$2.1 million, New Mexico--
$2.2 million, and Texas--$52.8 million. The State facilities, when 
complete, will augment the Federal inspection facilities in the short 
term and may ultimately replace them.
    Enforcing U.S. Safety Rules and Establishing Information System 
Capability. The focus of the verification requirements Congress 
established in this area were intended to ensure that inspectors would 
be prepared to enforce U.S. safety rules, such as hours-of-service, 
once the border opens to Mexican long haul carriers. Also, the 
verification requirements were to ensure that inspectors have access to 
accurate, timely, and current driver, vehicle, and carrier information 
when they conduct safety inspections of Mexican long-haul carriers. 
FMCSA must also monitor the safety record of Mexican drivers and 
carriers operating in the United States in order to take appropriate 
action, such as revoking a Mexican driver's privileges or a Mexican 
carrier's authority to operate in the United States, when they violate 
U.S. safety rules.

    Hours-of-Service Policy. FMCSA issued a policy on April 3, 
        2002, to ensure Mexican carriers comply with U.S. hours-of-
        service rules. We cannot verify that the hours-of-service 
        policy is implemented until Mexican long-haul carriers are 
        granted authority to operate beyond the commercial zones. 
        However, based on our observations of current practices for 
        Mexican carriers operating in the commercial zones, we believe 
        that inspectors will be prepared to implement the hours-of-
        service policy for Mexican long-haul carriers.

    Access to Accurate Data. We determined that Mexico's 
        databases are sufficiently accurate to provide inspectors with 
        information to verify the status of a Mexican CDL and the 
        validity of a Mexican vehicle's license plates. During our 
        April 2002 visit to Mexico's Department of Transportation, we 
        validated the accuracy of the information entered into the CDL 
        and vehicle registration databases by reviewing and tracing 
        automated records for CDLs and permits to source documents.
       In addition to Mexico's databases on drivers and vehicles, 
        inspectors need to access the U.S. Licensing and Insurance 
        database to verify that a Mexican carrier has authority to 
        operate in the United States and has valid insurance. To 
        evaluate the accessibility of data to inspectors, we conducted 
        tests at 25 border crossings to determine if they could access 
        the Mexican databases to electronically verify CDLs and license 
        plates and the U.S. database to electronically verify operating 
        authority and insurance. We conducted the same tests with 17 
        mobile enforcement units operating adjacent to the border 
        crossings in the four States.
       We found that inspectors at 6 of the 25 commercial border 
        crossings could not access Mexican and U.S. databases to verify 
        information on Mexican carriers. At one of the six crossings 
        the problem was that the inspector did not yet have a password 
        to access the database. At 3 crossings, telephone lines or 
        telecommunication links were not yet installed. FMCSA plans to 
        remedy these problems by June 30, 2002. At the remaining two 
        crossings, inspectors were not yet onboard and inspection 
        facilities had not been secured. However, the issue will be 
        addressed within the next 45 to 60 days when improvements will 
        be made to the inspection facilities.
       With the mobile enforcement units, we found that all could 
        access information in the Mexican database on CDLs. However, 
        only 1 of the 17 could access insurance and operating authority 
        data, and none could access vehicle registration information 
        (license tags). FMCSA has developed a plan to provide mobile 
        enforcement units access to this information by June 30, 2002.

    Mexican Driver and Carrier Monitoring Systems. FMCSA will 
        be using the following two separate systems to monitor the 
        safety records of Mexican drivers and carriers:
       Drivers. FMCSA has developed and implemented an automated system 
        to monitor the performance of Mexican commercial drivers 
        operating in the United States. The system provides FMCSA the 
        capability to track, monitor and withdraw U.S. driving 
        privileges of Mexican commercial drivers convicted of moving 
        traffic violations in the United States. If U.S. driving 
        privileges are withdrawn, a disqualified status will be 
        immediately reported to U.S. law enforcement officials when 
        they check the license status of the driver.
       Carriers. FMCSA developed an automated system and plans to have 
        it operational by July 1, 2002 to extract safety violation data 
        on Mexican carriers from its Motor Carrier Management 
        Information System. To complete the system, FMCSA is developing 
        an automated process for (1) identifying carriers requiring a 
        compliance review or letter of corrective action; (2) 
        generating corrective action letters to send to the carrier; 
        (3) notifying the appropriate field office that a compliance 
        review or corrective action is required; and (4) creating a 
        carrier history of violations and corrective actions taken.

    Enforcing Operating Authority. In March 2000, FMCSA issued 
        a rule requiring States to enforce operating authority 
        requirements as a participating qualification under the Motor 
        Carrier Safety Assistance Program. The States have until the 
        end of FY 2003 to enact legislation.
       Currently, only two States--Arizona and California--have enacted 
        legislation authorizing their enforcement personnel to take 
        action when they encounter a vehicle operating without 
        authority. The other States' enforcement personnel do not 
        enforce operating authority. However, enforcement personnel in 
        all States are authorized to remove drivers and commercial 
        vehicles from service for serious safety violations, such as 
        operating without a valid commercial driver's license or 
        operating a vehicle with defective brakes. Operating in the 
        United States without valid operating authority is currently 
        not considered a safety violation and hence with the exception 
        of Arizona and California, State inspectors cannot enforce the 
        violation.
       In 1999, we reported that at least 52 Mexican-domiciled motor 
        carriers operated improperly in 20 States beyond the 4 border 
        States. Roadside inspection data throughout the United States 
        show this has continued. To provide a mechanism to enforce 
        operating authority in the absence of State laws, FMCSA issued 
        a policy memorandum in November 2001, encouraging the States to 
        contact FMCSA if State inspectors encountered a commercial 
        vehicle operating without authority.
       A principal concern in this area is not necessarily the long-
        haul carriers that will have authority to operate beyond the 
        commercial zones and throughout the United States. These 
        carriers' vehicles will be subjected to an inspection every 90 
        days, which will include verification of operating authority 
        when performed by a U.S. inspector. Rather, the concern is that 
        carriers without authority to operate within the commercial 
        zones or those that have authority only to operate within the 
        zones will continue to operate beyond the zones. In these 
        latter cases, the Act does not require periodic inspections 
        and, other than California and Arizona, States do not have 
        authority to put them out of service.
       If Congress and the Department want to accelerate the ability of 
        the States to enforce operating authority, there may be several 
        ways to accomplish this. One option might be a Federal law 
        conditioning States' receipt of Federal funding on the 
        enactment of State laws to enforce operating authority. Another 
        option is the Department could include operating authority 
        violations among the safety criteria for placing vehicles out 
        of service. States are already authorized to place vehicles out 
        of service for safety violations, but operating authority is 
        currently not considered a safety violation.
                                 ______
                                 
    Madam Chairman, Mr. Chairman; this concludes my statement. I would 
be pleased to answer any questions.
                                 ______
                                 
Attachment
    The following figure identifies the status of facilities at each 
crossing between June 17 and June 20, 2002. A ``green light'' indicates 
that new or existing space and/or facilities are consistent with 
identified needs. A ``yellow/green light'' indicates work is 
progressing steadily on improving or securing adequate space and 
facilities. We expect these will become ``green lights'' by June 30 
when FMCSA projects that all improvements will be complete. A ``yellow 
light'' indicates that improvements have not yet been started. These 
facilities are not likely to be complete by June 30, but are likely to 
be complete within 60 days.

  Status of Inspection Facilities and Vehicle Out-of-Service Rates by 
         Commercial Crossing Between June 17 and June 20, 2002



* According to FMCSA's Motor Carrier Management Information System, 
records of inspections performed did not specify whether the 
inspections were done at border crossings or within commercial zones 
adjacent to crossings. Therefore, a rate for the crossing could not be 
determined.

    Senator Murray. Well, thank you very much to our witnesses, 
and let me just ask a few questions because we have a vote on. 
Senator Breaux will be back in a few minutes, and I know 
Senator McCain has some questions as well, but let me just 
begin by asking you, Mr. Secretary, the Inspector General's 
Report on Implementation of Commercial Vehicle Safety 
Requirements at the U.S.-Mexico Border  was 
issued 2 days ago, and in that report the IG made several 
observations on safety issues that are associated with opening 
the border.
---------------------------------------------------------------------------
    \\ The information referred to has been retained in the 
Subcommittee's files.
---------------------------------------------------------------------------
    The next step is for you to issue a certification to the 
President based on the findings of that IG report that opening 
the border does not pose an unacceptable safety risk to the 
American public. When do you envision making this 
certification?
    Secretary Mineta. Well, first of all, having just received 
the report, I will not rush into this until I am thoroughly 
familiar with the report. Mr. Clapp and I have already talked 
about that, but I will not recommend to the President nor 
certify until those issues of safety are resolved.
    Senator Murray. And once that certification has taken 
place, how long before you will officially open the border to 
allow Mexican long-haul trucks in?
    Secretary Mineta. I would assume that once we do the 
certification, that it will probably will be about, let us say, 
a month? Will it take that long?
    Senator Murray. Mr. Clapp, I cannot hear.
    Mr. Clapp. I am sorry--thank you. The President, of course, 
also has to take action to lift the moratorium after the 
certification is made.
    Senator Murray. So the process is, the certification is by 
your office, the President lifts the moratorium, and then it 
takes some time to implement. How much time is that?
    Secretary Mineta. I think the crossing would be open as 
soon as he lifts that moratorium. How long would it take the 
Administration to----
    Senator Murray. Do you have any estimate of time, how long 
it would take you to do the certification?
    Secretary Mineta. Given the number of items that I saw in a 
cursory glance at the report, I would think that I would be 
able to do that in about a month.
    Senator Murray. All right. The IG's audit found that 6 of 
the 25 commercial border crossings could not access Mexican and 
U.S. data bases to verify Mexican drivers licenses, license 
plates, and authority to operate in the United States or 
insurance coverage, and only 1 of 17 mobile enforcement units 
operating adjacent to the border could access insurance and 
operating authority data, and none of them could access vehicle 
registration information.
    Mr. Secretary, can you tell this Committee what's being 
done to ensure that all enforcement personnel, both stationed 
at the border and in mobile enforcement units, will have access 
to the necessary information before you open the border?
    Secretary Mineta. First of all, we are trying to build this 
system based on the use of an 800 number for accessing the 
driver license and the insurance requirement provisions. 
Second, eventually we were going to move to PDAs, and as I 
recall the third one was the Internet, access through the 
Internet, in terms of trying to, have the information available 
for immediate access.
    Senator Murray. Mr. Mead, are you confident that all 
enforcement units are going to have the necessary access to 
information before the border opens?
    Mr. Mead. In the case of the mobile enforcement units that 
you mentioned and the crossings you mentioned, FMCSA has plans 
that we feel are credible, to have access in place in July.
    Senator Murray. In July.
    Mr. Mead. In July. When we did our review, access was not 
in place and that is why it was noted in our report. The basic 
problem at a number of those crossings was they did not have 
telecommunication lines and facilities. It is not rocket 
science to put them in, and that is why we think it is fairly 
credible to say by July.
    Senator Murray. And there is an effort to do that by July?
    Mr. Mead. Yes, there is.
    Senator Murray. Some of the transportation safety groups 
have expressed concerns that there is no effective system and 
no attempt to build a system for verifying that Mexico-
domiciled carriers are validly and adequately insured by U.S. 
licensed insurers. What method of verification is the 
Department using, Mr. Secretary, to ensure that Mexican 
carriers have the proper insurance before they are allowed to 
drive on U.S. highways or outside their commercial zone?
    Secretary Mineta. Well, again we will be making that as a 
check, because the law does require a U.S. insurer of a Mexican 
carrier, so in that instance we will be verifying with the U.S. 
insurer.
    Senator Murray. Mr. Mead, do you think that DOT's plans are 
adequate in the area of insurance?
    Mr. Mead. I do in the border States. I think they have a 
good command of this in the border States, when you are talking 
about the operating authority and also whether they have 
insurance. In the other States, for right now you are going to 
have to rely on them calling an 800 number, and I would like to 
see in the longer term a quicker way of doing that.
    Senator Murray. I am going to have to go vote. I am going 
to turn it over to you, Senator Specter, to go ahead and ask 
your questions, and I know Senator Breaux is going to return in 
just a few minutes, and I will return as well, but I assume 
someone else will be back by the time you conclude.

               STATEMENT OF HON. ARLEN SPECTER, 
                 U.S. SENATOR FROM PENNSYLVANIA

    Senator Specter (presiding). Mr. Secretary.
    Secretary Mineta. Senator.
    Senator Specter. The issue of the border is obviously one 
of great importance, and I know that is the focus of this 
hearing, but our Transportation Subcommittee out of 
Appropriations is very much concerned about a number of other 
matters, and I would say the number 1 item on the agenda is 
Amtrak, which I would like to discuss with you briefly this 
morning, and I thank you for what you and the Administration 
have been doing in an effort to keep Amtrak running.
    This has been a perennial battle since I was elected in 
1980, with every year the issue reaching a very difficult 
situation, but the crisis now is more pronounced than ever, and 
I am pleased to see the reports in the media today that you 
have worked out an arrangement to keep Amtrak running at least 
in the short run on the problem involving the $205 million.
    I would be interested to know what role you are expecting 
the Appropriations Committee to play, because we have a 
supplemental bill up, and this is an opportune time for us to 
weigh in, and Senator Hollings, Chairman of this full 
Committee, is on appropriations, as am I, as are the others, 
and I would be interested to know how you see that working out 
to provide the $205 million.
    Secretary Mineta. Well, what I had indicated earlier was 
that we have worked out a temporary program to get us through 
July, and that after Congress returns after the July 4 recess 
we would then sit down with you folks to make sure that we have 
adequate funding to go through the fiscal year, and so----
    Senator Specter. What will you be looking for Congress to 
do specifically, if you know at this point?
    Secretary Mineta. Well, what we would like to do--as I 
recall, the figures from yesterday was to look for a total of 
$270 million to carry us through the fiscal year.
    Senator Specter. $270 million.
    Secretary Mineta. We already have, as I said, $100 million 
that we----
    Senator Specter. Why $270, instead of the figure which has 
been used of $205 million?
    Secretary Mineta. That was the request of the Amtrak board 
at the time, and in going through all of the figures we think 
that that would be roughly the area in which we would be able 
to sustain its operations, but again that is something I would 
like to come back and talk to the Senators and the House 
Members about.
    Senator Specter. Well, I am glad to have those assurances, 
and I believe it is fair to say that there will be overwhelming 
support on the Appropriations Committee, and I think in the 
Senate, and ultimately I believe in the House, too.
    I am concerned as to what is going to happen in the long 
run. I sat down with the Amtrak officials, Mr. Gunn and Mr. 
Smith, and inquired as to what their long-range plans are. It 
seems to me we really need to get figures from them as to what 
it is going to take to keep Amtrak running. If it is going to 
be a permanent subsidy that they are going to need, Congress 
and the Administration ought to be told that so we can make an 
evaluation, and when they talk about a capital program, they 
are very vague as to what they are doing. Mr. Gunn has been 
there for only a short time but it seems to me we need 
something very, very specific as to what Amtrak's needs are so 
that we can make an evaluation.
    We had the proposal, as you know, for $12 billion in bonds 
last year which did not go through, but the time has come when 
we really have to have an overall plan to know what is going to 
happen. This is the first time since I have been in the 
Congress in 22 years, in the Senate in 22 years that there has 
been a threat, an immediate threat of a shutdown.
    There have always been problems, but this runs ``The Perils 
of Pauline'' right to the edge of the cliff, and I can tell 
you, as a frequent rider of Amtrak, and knowing people across 
the country who are concerned about it, that--well, it is no 
way to run a railroad, to use a very popular expression, which 
has special applicability here.
    Secretary Mineta. Well, I think in terms of hammering out 
this agreement, the kinds of conditions, or the reform issues 
that you referred to are the kinds of things that we put in the 
agreement. I think there is a recognition by Mr. Gunn as well 
as the board of directors and the Administration in terms of 
the kinds of conditions for reform, and that we cannot continue 
from crisis to crisis. We do have to start instituting these 
kinds of changes, and I am confident that with the conditions 
we have in this agreement, and with the work of Mr. Gunn as the 
executive of Amtrak, that it will be done.
    Senator Specter. Mr. Secretary, on the outline of the 
speech you made a week ago Thursday on having States take over 
and having privatization to some extent, or public bidding, how 
would that work if, say, Pennsylvania agreed but Ohio did not? 
You cannot stop the train at the border. What is your thought 
on that?
    Secretary Mineta. Well, the other alternative I did say was 
that to the extent that you have a State that does not 
contribute, you can always keep the doors of the train closed 
as it goes through the State.
    Senator Specter. You are not serious about that, are you?
    Secretary Mineta. And of course, my boss, who is a former 
Governor, raised his eyebrows.
    Senator Specter. Both of them?
    Secretary Mineta. Both of them.
    [Laughter.]
    Senator Specter. Well, we need to have more specification 
of that. The United States needs a rail system. Every 
industrialized country has one. You know all the 
generalizations about subsidies for airlines and subsidies for 
highways and the rest of it, but we have to figure out where we 
are going here, because we have a broad vision we have to move 
ahead on, on maglev, something you and I have discussed many 
times, and that is a very active item on the agenda for the 
Department of Transportation with the competition now between 
the 47 miles from Greensburg to the Pittsburgh International 
Airport with Baltimore to Washington, and a need for maglev 
from Orange County to Las Vegas, and really a vision for the 
future.
    If this country was as timid in the 19th Century as some 
are today, and I do not include you in it, because I know you 
have a vision for the future, we never would have built the 
transcontinental railroad, but I think we really have to get 
down to some hard analyses here and come up with a plan.
    Mr. Chairman, if I might ask just a couple of parochial 
questions before the balance of the Committee members return 
here, Mr. Mineta, when we get a chance to talk to you on the 
record, it is, as you remember from your congressional days, an 
opportunity, and I want to talk about Lancaster, Pennsylvania, 
which is a very important city to me and to Pennsylvania. We 
recently had an allocation by the Department of Transportation 
for $20 million in a small community air service development 
pilot program, which did not comprehend Lancaster. I might say 
that it does carry Reading, which is just a little bit up the 
road, and sort of a twin city to Lancaster. You can imagine the 
concerns I am hearing as to why not Lancaster. Lancaster had 
been trying to get a subsidy on essential air services, which 
was declined, and I know you will recall my conversation with 
you on a 70-mile rule.
    It is possible to drive from Lancaster to the Philadelphia 
International Airport in 66 miles if you go on route 30, and 
are willing to stay behind big trucks all the way on a two-lane 
highway, but if you take the Interstate, Route 222, the 
Pennsylvania Turnpike, and the Schuylkill Expressway, it is a 
good bit more than 70 miles, but it is much, much faster. And 
is there any relief in sight for Lancaster either by way of 
perhaps being included in the community air service pilot 
program, or having a reevaluation of that 70-mile rule, which 
just does not fit the essential air services subsidy?
    Secretary Mineta. Well, as we have discussed, 70 miles has 
been the delimiting, or the limiting factor on Lancaster. On 
the other program that Congress passed for the $20 million 
program, those grants were issued, or announced last week as I 
recall, and there were a total of 40 cities that applied, but I 
do not believe, as I recall the list, that Lancaster applied 
under that program.
    Senator Specter. No, Lancaster did apply, Mr. Secretary.
    Secretary Mineta. Did it?
    Senator Specter. Yes.
    Secretary Mineta. Oh, well then, but then it did not 
successfully compete in that program.
    Senator Specter. Is it possible to take another look at 
that?
    Secretary Mineta. As an EAS city but not under the other 
program, because those allocations have been announced for the 
$19 million.
    Senator Specter. But you could take another look at the ESA 
issue?
    Secretary Mineta. Well, based on that 70-mile limitation, 
but one of the problems with that 70-mile limitation is that 
the--and I know that I have asked, after our discussion I asked 
the FAA, our aviation office to--because there is so much 
controversy about the mileage requirement in terms of shortest 
route, fastest route, and to come to some rationale on it, but 
let me have them take a look at it again, but I know that for 
the round right now, I do not believe it would qualify.
    Senator Specter. But you will have them take another look?
    Secretary Mineta. I will have them take another look.
    Senator Specter. OK. Thank you very much, Mr. Secretary.
    Thank you, Mr. Chairman.
    Senator Breaux. Thank you very much, Senator.
    Senator Hutchison.

            STATEMENT OF HON. KAY BAILEY HUTCHISON, 
                    U.S. SENATOR FROM TEXAS

    Senator Hutchison. Thank you very much, Mr. President--I 
mean, Mr. Chairman.
    Senator Breaux. I accept.
    Senator Hutchison. Mr. Secretary, I thought I had walked 
into an Amtrak hearing earlier, before we went to the vote. I 
would like to just ask you one question about that, and then of 
course as a border Senator I certainly have concerns about the 
issue that is the subject of this hearing, but I wanted to ask 
you if the Administration reform plan will have a goal of a 
stable national system rather than a separate northeast 
corridor and rest of the country.
    Secretary Mineta. Well, our objective is to have a viable 
intercity passenger rail service. Now, the question is, does 
that mean that all of the dots are connected, and I think that 
what we have to do is to try to rationalize that system in 
terms of profitability of routes, and in terms of the nature of 
the participation by local and State governments.
    There are a number of factors that we are looking at in 
trying to build a viable intercity passenger rail service. What 
has been happening in the past is that it is like taking 
margarine and spreading it on a piece of bread without any 
thought to whether the routes are making money, and even as Mr. 
Gunn talks about, dealing with not only cost controls, but also 
revenue sources.
    I think the whole issue of trying to see where are the ways 
to have routes, and I do not know financially whether these are 
the ones, but whether it's, let's say, a Chicago to the Twin 
Cities, or Chicago to Detroit, Chicago down into the Texas area 
in terms of the routes, or what about the Chicago to L.A. route 
across the country?
    Those things all have to be looked at, and I do not think 
there is a prejudgment in terms of the elimination of routes, 
but I think they have to be looked at in terms of whether or 
not they are financially viable, and do we get State and local 
participation in those routes.
    Senator Hutchison. Well, Mr. Secretary, I would just hope 
that, rather than looking at revenue from the passenger side, 
and I think we need to look at revenue sources on the freight 
side. Package service has been very helpful to Amtrak, but they 
have been limited because some of the cargo rail companies have 
resisted going beyond packages. And I think that that should be 
looked at as well. But I would just like to see a national rail 
system commitment that puts in place a structure that makes 
sense. And then once you have that, something like a skeleton 
across the top of the country, across the bottom of the 
country, east to west, up the two East and West Coasts, and 
then perhaps something down the middle, and maybe something 
else in between, but a basic system to which we could commit 
that would then allow for real stability in service.
    It is hard to judge a route when it is 4 to 6 to 12 hours 
late routinely. It is hard to judge the kind of revenue that 
you are getting on a line that has been starved for funding, 
because in fact we keep talking about these great subsidies 
that Congress has given. Congress has given about $500 million 
a year. As Mr. Mead has pointed out, that is about half of what 
was authorized in the legislation that was meant to try to 
bring Amtrak up to speed, and what has been starved are the 
long distance routes.
    So yes, they are least revenue-producing, but I would hope, 
as a member of the Amtrak board, that you would commit to a 
national system, where we do not announce that long-haul routes 
are going to be closed, and the Northeast Corridor is going to 
stay open so that people start canceling reservations because 
they cannot be sure that Amtrak is going to run, and if it does 
run, that it is not going to be within 10 hours of being on 
time. And let us make the commitment, and let us fund it at a 
reasonable level, let us get the stability, and then I think 
you will see the synergism of States coming in.
    And I do not disagree with the Administration at all that 
States should step up to the plate. They absolutely should. It 
should not be just a Federal subsidy, it should be a State-
Federal match just like so many of our transportation projects 
are. That is totally valid, but I do think we need the national 
commitment to a national rail system that is part of our 
homeland security and our transportation intermodal network 
that includes air and highways and rail, and I would hope that 
would be the direction that you are going.
    I would like to just switch gears and talk about the 
situation with Mexican trucks. I had asked that this hearing 
include people from the border cities who are on the front line 
to determine their view of where we are, but the Chairman of 
the Committee only wanted to have witnesses from the 
Administration.
    I have to say that I think there are some issues such as El 
Paso and Laredo, both would like to have their border crossings 
away from town, and Mr. Mead, my colleague, Congressman 
Bonilla, has asked you for a study to determine if this can be 
accomplished in Laredo, and if it is, can it be accomplished 
and also have the number of inspections that we are going to 
need in Laredo, which handles the highest number of commercial 
truck crossings I think of any crossing on the border. What is 
the status of that request to you?
    Secretary Mineta. Well, we had a request, as I recall. I 
think you had supported the request of the Mayor of Laredo. 
There are two entry ports at Laredo, and the question was, 
instead of doing an inspection at the border can it be done 
further up the road? As I recall, further up the road was about 
28 miles. The problem there is that it puts it beyond the 
commercial zone, as I recall, so that creates the problem for 
us in terms of having the road that would then go up to this 
inspection facility further up from Laredo.
    Senator Hutchison. What would be within the range that you 
would see--I mean, the commercial zone is there now because 
that is the restriction, but when that is--when the 
restrictions are removed, what would you consider, then, a 
reasonable number of miles from the center city? Because of 
course these cities, both El Paso and Laredo, are trying to get 
the air pollution cleared up, and the long lines that are 
waiting are not helping that situation at all. So what number 
of miles would you consider feasible?
    Mr. Clapp. Senator, if I may assist in that regard, without 
respect to where the State does locate its inspection station 
or stations, we still have an affirmative requirement to see 
that the inspections are conducted at the border. We fully 
support what we hope will be fruitful efforts between TexDOT 
and the city to work out a suitable location that will satisfy 
that requirement.
    In the meantime, and perhaps for the long term, the reality 
is that the inspections must be done, under law, at the border. 
Currently Federal agents, our people, are doing those 
inspections. Of course, we have very substantially augmented 
our staff to do just that, as well as augmented the space on 
the customs compound or adjacent to the customs compound to 
accomplish that.
    Senator Hutchison. We are talking about the border.
    Mr. Clapp. Yes, ma'am.
    Senator Hutchison. We are not questioning that the 
inspections would be done on the border. The question is, how 
far would you consider from the main city crossing a reasonable 
number of miles up the border? I mean, if you are going to 
inspect all the trucks that do not have the certification 
stickers, why does it matter if it is 28, or 20, or 14, or 5 
miles up, and you will have a road that will go back to the 
main corridor?
    Mr. Clapp. Senator, I think--and the Inspector General will 
probably have a few thoughts or comments on this, but I think 
it is reasonable to assume that you would have to look at that 
on a case-specific basis, particularly with regard to what are 
the opportunities to evade the inspection requirement. I do not 
think anybody involved wants to be so hidebound as not to try 
to work out a reasonable solution, but it would have to be an 
effective solution.
    Senator Hutchison. Mr. Mead?
    Mr. Mead. The Congressman did write to us, and you asked as 
part of your question, what our response was. The priority we 
assigned to that request comes second to the statutory 
requirement of the report that we are testifying on today. So 
we have not completed the request, but I would say that, first, 
the law that Congress enacted refers in several places to 
inspections that must be done of long-haul trucks at the border 
crossings. The exact location and how far inland you can go may 
be a matter more within the province of the Congress than it is 
a matter of administrative discretion.
    Second, I do not know why you would spend money to create a 
facility 28 miles in, or 20 miles in, or 30 miles in, until you 
have a good handle on the amount of long-haul traffic.
    In our statement we pointed out that to date the Department 
has received 40 applications, representing a total of 118 
trucks applying for long-haul authority. I cannot forecast what 
the future will hold. I know the State of Texas and the city of 
Laredo are having a dispute about this, and I guess ultimately 
they would have a great deal to say about it, but before I 
would want to spend the money, I would want to know, is there 
going to be enough traffic to justify consideration of that 
particular question?
    Senator Hutchison. Let me ask you another question, because 
Laredo handles about one-third of the commercial crossings, and 
the bill says that permanent scales and weigh-in-motion 
machines have to be located at five of the 10 busiest 
crossings. The Department has complied with this, but Laredo is 
not one of those that is receiving the permanent scales and 
weigh motion machines.
    They were put in El Paso, which is also one of our busiest 
ports, and certainly across from Juarez, which is the third or 
fourth largest city in Mexico. I think that is warranted, but 
why was Laredo not considered, with its number of commercial 
crossings, for the permanent scales and weigh----
    Secretary Mineta. The static scales were part of the----
    Mr. Mead. Both Laredo crossings will have weigh-in-motion 
scales by the end of the year. Under the law, 5 of the 10 
highest volume crossings must have weigh-in-motion scales 
before FMCSA begins processing applications for long-haul 
authority and the remaining 5 by December 18, 2002. The 
Columbia Bridge in Laredo has a weigh-in-motion scale now and 
Laredo's World Trade Bridge should have one by December.
    Senator Hutchison. Mr. Secretary, will you verify that 
Laredo will have one by the end of the year, will have those 
facilities?
    Secretary Mineta. They will.
    Senator Hutchison. OK. Thank you.
    Secretary Mineta. The other point I wanted to make was that 
we have another responsibility--besides a congressional mandate 
that says that the inspection has to be done at the border--the 
whole issue of evasion of inspections. I think that is the only 
other question that we might have about locating an inspection 
facility away from the border.
    Senator Hutchison. Well, I do not think, practically 
speaking, it should make that much difference. If the 
corridor--I mean, 28 miles would be certainly monitored, and 
there would be a lot of security that would be closely 
watching, and certainly there would not be any egress from that 
28 miles from the border to the station, so I do not think as a 
practical matter it should be a problem.
    I know the Department of Transportation in Texas is in 
disagreement, but I do think the local people should be 
considered, mainly because of the environmental problems, but 
also the traffic congestion and the infrastructure they are 
going to have to put in city streets and bypasses, and they 
have already made a huge financial commitment there. I have 
been to the station where they are inspecting now, and it is a 
fine facility, it really is, but it is not nearly enough to 
handle what is going to be necessary when you open the border.
    Secretary Mineta. Well, we will continue to work with you, 
and the Mayor of Laredo and TexDOT on that.
    Senator Hutchison. Thank you, Mr. Secretary. I will just 
end by saying that the safety issue is very important, not only 
for the people of Texas who will have the first few hundred 
miles with these trucks and would want to have the requirements 
met, but going into the rest of the country we must assure that 
all the trucks meet the safety standards that have been set 
forth, and I hope that you will open as soon as is feasible, 
but not in any way lessening the safety requirements from the 
standards of the law.
    Thank you.
    Senator Murray. Thank you, Senator Hutchison.
    Mr. Secretary, I have a number more questions about Mexican 
trucks, and after Senator Fitzgerald asks his questions I want 
to go back and ask a few questions about Amtrak, but before I 
go back to my border questions I do want to ask you about 
another topic while I have you here, because as Chair of the 
Transportation Appropriations Subcommittee we have jurisdiction 
over the FAA as well, and I am concerned about the likely 
bankruptcy of WorldCom, and whether it will have serious 
ramifications for the FAA's air traffic control system.
    They are currently holding a contract providing the 
telecommunications links between all of our air traffic control 
facilities, and I would like to ask both you, Mr. Secretary, 
and you, Mr. Mead, if you would comment on what vulnerabilities 
the FAA may face in the event of a sudden WorldCom bankruptcy, 
and Mr. Secretary, could you comment first?
    Secretary Mineta. Madam Chairwoman, that just happened last 
night, and I have asked Administrator Garvey to brief me on all 
of that issue, so I cannot give you a response on the impact of 
WorldCom. We know it will have an impact, without a doubt, but 
she said she would brief me today on that.
    Senator Murray. Mr. Mead, are you prepared to answer?
    Mr. Mead. Yes. We think the Department has taken the right 
steps here, that obviously WorldCom, as you point out, is the 
incumbent on handling the telecommunications between the ATC 
facilities. They actually own, I understand, the switching 
machinery that covers the interchanges of communications, and 
so obviously we want to make sure that we have full assurances 
that the short-term implications are under control and there 
will be no interruption.
    Second, there is a pending contract award for the provision 
of telecommunications services to the Federal Aviation 
Administration. It is a multibillion contract, I understand, 
and WorldCom was one of the bidders on that contract, so 
exactly where we stand on the new contract obviously needs to 
be reassessed as well, and we will keep you apprised, but right 
now I know the Secretary, the Deputy Secretary, and 
Administrator Garvey, are all focused on it.
    Senator Murray. Well, I am delighted to hear that you are 
focused on it, and we would like both of you to stay in close 
touch with us as we see what develops with that.
    Secretary Mineta. I will do that.
    Senator Murray. OK. I will return to issues regarding the 
border before I turn it over to Senator Fitzgerald.
    Let me go back to you, Mr. Secretary. So far, the 
Department has received relatively few applications from 
Mexican motor carriers seeking long-haul operating authority. 
Can you tell us about where these first Mexican trucks to enter 
the U.S. are likely to travel and what type of cargo they might 
be carrying?
    Secretary Mineta. I would assume that the principal four 
States would be California, Arizona, New Mexico, and Texas, and 
most of those would probably be agricultural products, but let 
me see if Mr. Clapp has anything further on that.
    I think most of the applications have been for the 
commercial zone rather than any long distance, and even on the 
long distance I think there is really only one. Even though we 
have had 40 applications, I believe there is only one that is 
complete, and that is under review.
    Senator Murray. For outside the commercial area?
    Secretary Mineta. Yes, ma'am.
    Senator Murray. Mr. Clapp.
    Mr. Clapp. If I can add to it, thank you, Senator Murray, 
there is a fairly good distribution of applications of the 
long-haul carriers at this point. We expect the Port of Long 
Beach probably would be a significant origin and destination 
point, as well as Tucson and San Antonio. But as I say, there 
is a fairly good distribution across the border from California 
to Texas at this point.
    It is typical for carriers to apply for the world in terms 
of where they may be able to go, which, of course, does not 
really speak to where they actually will go. So it is really 
going to be more of a function of where the traffic and trade 
flows are, as opposed to the way they apply.
    Senator Murray. The IG's report says that 48 States lack 
any laws to put vehicles out of service or penalize large 
trucks that are caught operating outside of their Federal 
operating authority. The IG suggested that this problem could 
be solved if the Department included operating authority 
violations among the safety criteria for placing vehicles out 
of service. Mr. Secretary, do you intend to add operating 
authority violations to that safety criteria?
    Secretary Mineta. Yes, and the other way I think that we 
can deal with that is to have a congressional mandate on that 
issue. Is that another way that we can deal with that?
    Mr. Clapp. There are three ways. As I think the Inspector 
General testified, we do have a regulation that requires, by 
2004, the States to be able to do this or they would lose MCSAP 
money. That is fairly significant.
    Senator Murray. Do you intend to pursue the regulating 
authority?
    Mr. Clapp. Yes. However, the two other options that you 
just mentioned both have promise. The suggestion by the 
Inspector General I think is very intriguing, and we intend to 
pursue that to see if we can do it. That would perhaps be the 
easiest fix that we can do.
    Mr. Mead. We like the approach of doing something in a 
regulatory way. If the opening of the border is going to occur 
in the near term, and they continue with the progress in 
meeting all their plans, the milestones, we are very shortly 
going to have a truck seeking to go into the interior of the 
United States.
    We are not so concerned about the long-haul trucks that 
tell the truth, that they are going to be long-haul and have 
the inspection sticker displayed on their windshield. We are 
more concerned about the trucks that come across that are by 
law confined to the commercial zones, who just drive on. We 
think it is important that the State law enforcement officers 
have the authority to say, you are stopping in your tracks. 
That is going to cause economic pain and that will be a 
hindrance to that type of behavior. But if you go with the 
approach of having every State enact a law, we could be back 
here 3 or 4 years from now testifying that there are still some 
holes.
    Senator Murray. Right, and as of right now there are only 2 
States with those laws, so we definitely could have holes, and 
we could have different regulations in different States, so you 
are suggesting, Mr. Mead, that the regulating authority is 
probably the best way to go at this time?
    Mr. Mead. Yes, and it would work with the Commercial 
Vehicle Safety Alliance, with the out-of-service rules on 
safety violations.
    Senator Murray. Mr. Mineta, I understand you intend to 
pursue that, is that correct?
    Secretary Mineta. That is correct.
    Mr. Clapp. That is correct. Senator, perhaps I should 
mention that as of today, in the meantime, all the States have 
received a policy from us that if they should stop a truck that 
is operating beyond its authority and they do not have their 
own authority to put it out of service, their instructions are 
to contact our office and one of two things will happen. We 
will come and put the truck out of service because we do have 
that authority, and we have hundreds of agents in the field, 
and that is a plausible way to go.
    If for some reason that is not possible, if they document 
that incident, then we will take enforcement action against the 
carrier, the first offense of which will be at least a $10,000 
fine, so it is not something to be taken lightly.
    Senator Murray. Secretary Mineta, you have said that you 
intend to ensure that new Federal inspectors at the border are 
largely bilingual. I have to say that begs the question as to 
what will happen when Mexican drivers encounter Federal 
inspectors who are not bilingual away from the border. How are 
you going to ensure English proficiency on the part of Mexican 
drivers entering the U.S.?
    Secretary Mineta. That is part of the requirements that we 
have been talking about on the whole issue of drivers and their 
ability in terms of safety, adherence to traffic signs, etc. I 
know that in terms of our own employees who are going into 
Mexico to do the compliance and safety reviews, they will have 
with them bilingual material for the carriers so they will be 
able to understand our regulations and rules. But in terms of 
the drivers, we intend to make sure that they are knowledgeable 
about reading signs and observing the traffic laws of the 
United States.
    Senator Murray. Well, Mr. Mead, you issued a report on 
improving the testing and licensing of commercial drivers, and 
in that report you identified English language proficiency as a 
weakness of our own CDL program. What are your concerns about 
Mexican drivers as well who lack English proficiency, and what 
do you think we can do to address those concerns?
    Mr. Mead. Well, I am not a student of how to test people in 
English fluency or any other language, but I think we need to 
bring greater descriptive clarity to what we mean by English 
proficiency, and that is for our own drivers as well as the 
Mexican drivers, and that exactitude has not been brought to 
the situation yet. It is something I think obviously, when we 
open the border, is going to be an even bigger issue, so that 
would be an area I think that FMCSA could prudently invest some 
time on.
    There are just no standards that define what it means to be 
proficient in English. You can take the tests, as I understand 
it, in another language, so you cannot really say that the test 
is a measure of English proficiency.
    Senator Murray. Senator Fitzgerald.

            STATEMENT OF HON. PETER G. FITZGERALD, 
                   U.S. SENATOR FROM ILLINOIS

    Senator Fitzgerald. Thank you, Madam Chairman, and I want 
to compliment you on hosting this joint hearing, and I want to 
thank the Secretary for coming. I think, Secretary Mineta, you 
are one of the most responsive Cabinet members to Congress in a 
long time, and I compliment you for your willingness to work 
with us, and thank you for your hard work in trying to 
implement the law that Congress passed last year with respect 
to Mexican trucks.
    I was with the Transportation Department in not being fully 
supportive of this legislation but I note that, once it was 
passed, you stepped up to the plate and did not complain, and 
you have gone about working hard to implement it, and I want to 
compliment you on that.
    If I could raise another issue which you and I have talked 
to each other about before, the O'Hare expansion issue, I just 
wanted to bring up that the House Transportation Committee 
passed a version of the bill yesterday which thankfully gutted 
what I thought were the most egregious provisions of the Senate 
bill.
    The Senate bill is designed to do two things, 1) preempt 
the Governor of Illinois so that the Governor cannot stop the 
O'Hare expansion program from going forward, but 2) also to 
straitjacket the FAA into approving a specific runway design. 
It would be the first time in the history of our country that 
Congress would ever have put a gun to the head of the FAA and 
said, you must approve a runway design.
    Thankfully, I understand that Representative Oberstar in 
the House was against that precedent, and he removed the 
straitjacket language, and the bill now moving through the 
House, all it does is preempt the Governor of Illinois. I just 
wanted you to be mindful of the action that the House had 
taken, because I think it speaks volumes that the House 
recognized that it would be a bad precedent for Congress to 
dictate a specific runway design to the FAA.
    If we did that with respect to O'Hare, you can count on San 
Francisco Airport coming in wanting a bill that forces you to 
approve their new runway in the Bay, LAX will be in, Atlanta, 
Dulles, it will create a parade of horribles that could haunt 
our Nation for years to come.
    I do want to emphasize, though, that I oppose the portion 
of the bill that remains in the House, and that is the 
preempting of the Governor of the State of Illinois. Right now, 
the Mayor of the city of Chicago has condemnation powers of the 
communities around O'Hare to expand O'Hare if he gets a permit 
from the Governor of Illinois. The legislation now moving 
through the Senate and the House would remove the requirement 
that the Mayor of the city of Chicago get a permit from the 
Governor of Illinois.
    Another way of looking at it is, the bill gives the Mayor 
of the city of Chicago--and he is a very popular mayor, Mayor 
Daley, very popular in Chicago--but it will give him unfettered 
ability to condemn all parts of Illinois as long as he goes out 
contiguously from O'Hare. I do not think that is a good idea 
for Congress to be doing, and they cannot get it through the 
State legislature, so they are trying to do that here, probably 
making Mayor Daley the most powerful human being in the 
country, once he has that unfettered condemnation power.
    I just wanted to bring those concerns to your attention 
while we had you here. I know that United and American are 
spending millions on lobbying for this bill, and I know they 
are lobbying members of your administration. They have hired a 
lobbyist for practically every Member of the Senate who is on 
the fence, but that does not mean that they are right on this. 
I happen to think this is a bad idea.
    I also note that United is incurring a monstrous liability 
by having signed on to the World Gateway program, which will 
cost $4 billion for the terminal expansion at O'Hare. The 
runway expansion would cost $6 billion. There is $10 billion 
right there, assuming no cost overruns.
    I think it fairly remarkable that United would have the 
audacity to incur that liability and at the same time come in 
and ask for a taxpayer handout in the form of a Government loan 
guarantee program, and I would hope the Department would 
consider the propriety of an airline assuming a monstrous new 
liability in offering to pay for $10 billion worth of work at 
O'Hare, and then at the same time coming in and ask for a 
taxpayer handout, and I know you have a representative on the 
Airline Stabilization Board, and I think that is a fair point 
to bring up.
    One final point before I return to the Chairman is, the 
World Gateway program, which the Department just gave approval 
for last week, and it cost $4 billion. It will only add 12 new 
gates at O'Hare. The runway expansion will increase, if it goes 
through, increase the runway capacity by 78 percent, but we are 
only going to have 12 new gates, so this will mean more planes 
could land at O'Hare, they just will not have any place to 
park, and there will be no gates for them.
    So this is a very disjointed and troubling program in my 
judgment. Chicago has needed a third airport since 1969, when 
O'Hare first reached capacity, and United has been doing 
everything and stopping at nothing to block the third airport 
so that new entrants cannot come into the Chicago market and 
compete with it, but I do not think that is benefiting 
consumers around the country.
    With that, I have probably done enough of my rehearsal of a 
Senate floor filibuster, and so I will spare you any more. 
Again, I want to compliment the Department on your hard work, 
and compliment Secretary Mineta for being here, and you are one 
of the most knowledgeable Transportation Secretaries I think we 
have ever had, due to your experience in Congress, I think.
    Secretary Mineta. Let me just mention--I just saw something 
where, is it Bensonville that is doing something relative to 
the condemnation action around the O'Hare Airport to counter 
what the city of Chicago is doing? Of course our responsibility 
in the Department, the FAA, is really as it relates to safety 
and air space and environmental issues, and we do not need 
legislation to be involved in those three areas.
    Senator Fitzgerald. If the city wants to expand O'Hare they 
could just file an application with you for approval, is that 
not correct? They do not need legislation to file an 
application, right?
    Secretary Mineta. But as I understand it, part of the issue 
in Chicago is that they need extraterritorial condemnation 
powers.
    Senator Fitzgerald. Well, they have that under State law if 
they get approval from the Governor.
    Secretary Mineta. From the Governor.
    Senator Fitzgerald. Right, and----
    Secretary Mineta. They can only do that if they get----
    Senator Fitzgerald. Well, the current Governor is willing 
to give them that power, but what this bill does is, it strips 
away the requirement that they get a permit from the Governor.
    Now, the reason that State law requires a permit from the 
Governor before Mayor Daley condemns communities outside 
Chicago is because he does not represent those communities and 
he is not accountable to them, so they want to have some State-
wide official who is accountable to those people as a check on 
the power of the Mayor of the city. If we remove the section of 
the State law by Federal legislation that requires a permit 
from the State before Mayor Daley can condemn, he will have 
unfettered condemnation rights, and he is not accountable to 
the people who--he will probably condemn my house, which is 12 
miles away, but--he will have a lot of power. I do not think it 
is appropriate for Congress to be doing that.
    Secretary Mineta. You will recall, Senator, we worked with 
you and others, and the Governor, to get the environmental 
report on the Peotone site.
    Senator Fitzgerald. Well, I appreciate that, and I trust 
your Department to do the right thing in terms of the 
environment, in terms of safety, and in terms of maximizing air 
space over O'Hare and over Chicago generally. I think your 
Department will do the right thing, and I want you to take this 
on the merits and not have a gun put to your head by Congress 
telling you what you must do. I think that is a terrible 
precedent. We will not need an FAA if Congress starts 
politicizing all these runway design decisions.
    The other thing the bill does is, it requires by law that 
all the runways be in the East-West direction. It would be 
illegal for the FAA to alter the plan to say, have them go 
Northwest-Southeast, which the controllers tell me they like to 
land the planes in the bad weather in the Northwest-Southeast, 
and the one parallel, the two parallel runways we have in the 
East-West direction are now shut down 3 percent of the year 
because of bad weather.
    If they are all in the East-West direction, that could mean 
that 3 percent of the year, all six runways at O'Hare are shut 
down, and I think that highlights the impropriety of Congress 
designing a runway design. We do not know anything about that, 
and nullifying the discretion of your experts at the FAA I 
think is a terrible precedent.
    Secretary Mineta. I think what they were trying to do is 
get enough separation so that they could get parallel landings, 
or operations, because the present configuration does not do 
it.
    Senator Fitzgerald. Well, that is correct. We have to shut 
down one runway in bad weather now in Chicago, but under their 
design, two of the runways would have to be shut down in bad 
weather because they would only be 1,200 feet apart, as opposed 
to the 4,300-foot separation, so if the airlines continue to 
schedule for good weather conditions, I think under their 
design O'Hare will be even more of a bottleneck than it is now, 
but that is enough of my speech.
    Thank you very much, Mr. Secretary.
    Secretary Mineta. Thank you.
    Senator Murray. Thank you, Senator.
    Mr. Secretary, you have spent a lot of time and effort to 
make sure that the U.S. border is open to Mexican trucks in the 
name of free trade, and it has been reported that some of the 
larger Mexican carriers and brokers would prefer not to see 
U.S. trucking firms competing with them for business in Mexico, 
and that the Mexican customs requirements will prove to be an 
effective deterrent in keeping U.S carriers out.
    Have you seen any evidence that the Mexican customs broker 
system will deter U.S. carriers from sending their own trucks 
into Mexico, and should we be concerned that there is some kind 
of double standard here?
    Secretary Mineta. I have not seen or heard that. I think 
there are other issues that might be of concern, but I do not 
think of the customs brokers in terms of any deterrence to 
them. It seems to me that with so many of Mexican trucks being 
owned by U.S. companies, that there would not be that kind of 
resistance to the trucking companies operating on either side 
of the border.
    Joe, is there something you could clarify, or at least 
expand on, in terms of your own experience?
    Mr. Clapp. I think that there is not any question but that 
the Mexican Government and the industry in Mexico have had some 
concern over the regulations we have put into place. From their 
perspective, they appear to be a larger hurdle to clear than is 
the case for U.S. carriers or for Canadian carriers.
    Our own view of that is, that it's really not the case. 
Because when they do operate in this country, all three 
countries' carriers must operate to precisely the same 
regulations. It is true, however, that Mexican carriers must 
receive a safety audit, unlike U.S. and Canadian carriers, 
before they can begin operations. It is true that their 
vehicles, as you well know, must be inspected according to the 
North American standards and maintain a current inspection 
sticker. We will be applying the same regime to U.S. and 
Canadian carriers as far as the safety audit is concerned, 
although not immediately prior to operating.
    We believe that the system put in place, certainly with a 
great contribution by your Committee, is a good one. We are 
trying to convince the Mexicans of that, but there has been 
discussion on their side about the possibility of putting in 
mirror image requirements for U.S. carriers seeking to operate 
in Mexico. We expect to have ongoing deliberations with the 
Mexican Government.
    Senator Murray. So those discussions are going on right 
now?
    Mr. Clapp. Yes. They have been, and they will continue.
    Senator Murray. Secretary Mineta, one final question on 
this, and then I have a couple on Amtrak before we close this 
hearing. The fiscal year 2002 transportation bill provided $144 
million for the FMCSA and the States to make sure that the 
safety requirements for cross-border trucking were met. 
Included in that amount were the one-time costs for the 
establishment of the permanent facilities, the training of 
inspectors, and the development of the information verification 
systems.
    To determine how many inspectors, auditors, and how much 
space would be necessary, there were estimates based on 
applications received back in 1995. At that time, we had 196 
applications that were received, but as of 2 days ago, only 40 
applications have been received, representing only 117 
vehicles.
    Now, you have requested $116 million for oversight and 
enforcement of safety at the U.S.-Mexican border in fiscal year 
2003. That would equate to about $1 million per Mexican 
vehicle. Do you think you may have overestimated the budget 
request, given the small number of applications we received to 
date?
    Secretary Mineta. Well, as I recall, in terms of the 
numbers, we were required to have the number of safety auditors 
and safety investigators at the border, but we anticipate that 
there will be more applications that we will see coming in. So 
I do not believe that even though we are gearing up right now 
in terms of the safety auditors and the others, we are doing it 
in anticipation of the traffic.
    Senator Murray. So you expect a lot more requests----
    Secretary Mineta. I believe so.
    Senator Murray.--that will impact us in fiscal year 2003?
    Secretary Mineta. And that is why under our buildup of the 
program, of the number of inspectors--for instance, like safety 
inspectors, we will have some of them on board by this spring, 
even though compliance reviews do not start until after the 
first of the year, but we do anticipate an increase.
    Mr. Clapp. Senator, to some extent that is driven by the 
requirements to be sure that we have a safety inspector on duty 
at all times any crossing is open. In a few cases those folks, 
especially early on, may look a little bit like the Maytag 
repairman, but we still need to be there. It is reasonable to 
assume that we will see some increase as time goes by.
    Senator Murray. Mr. Mead.
    Mr. Mead. Yes, I have a couple of points. A year ago, when 
this arrangement was being worked out that you put into law, 
you only had 60 inspectors. By July 31 you are going to have 
231 of them, trained, at the border. Spacewise a year ago, 17 
to 25 of the crossings, you had space to park only one or two 
trucks at a time, and that is all changing very dramatically.
    If I thought you were overfunding this, I would tell you. I 
would err on the safe side, and let us not forget that the 
vast, vast majority of these trucks do come into the United 
States, they are supposed to have licensed drivers, they are 
supposed to be safe, even though they may be only going 20, 25 
miles inland, so I would just err on the side of caution here.
    Senator Murray. All right. Well, thank you very much. I 
appreciate all that input on that. I do have a couple of Amtrak 
questions before we go here, that I think are important to 
clarify before we end this hearing.
    Mr. Secretary, you do serve on the Amtrak board, and your 
Deputy Secretary, Mr. Jackson, has participated in innumerable 
briefings and conference calls with the full Amtrak board as 
well as the board's finance committee and its audit committee. 
Given that extensive level of involvement of your Deputy 
Secretary, why is the Administration voicing surprise over 
where we see the severity of Amtrak's financial crisis today?
    Secretary Mineta. I think it is partially--or, rather that 
a great deal of that is attributable to the kind of information 
that has been provided, and I think that was one of the things 
that Mr. Gunn addressed immediately on coming aboard.
    Senator Murray. Has Deputy Secretary Jackson met with 
Amtrak's audit board--with its auditors or its bankers?
    Secretary Mineta. I think as board members KPMG has been 
there, but I do not believe he has met with them individually. 
I do not know. I would have to check with him on that issue, 
but I know that collectively the board has had KPMG at the 
board meeting.
    Senator Murray. Let me go back to your request for fiscal 
year 2003, because that is what we are going to have to deal 
with once we get past this initial crisis. 4 months ago, Deputy 
Secretary Jackson told me that your budget request for $521 
million was a place-holder, and he said that you would announce 
a different budget request once you had laid out your long-term 
plan for Amtrak. A week ago today, you announced that long-term 
plan, but your budget request for $521 million has not changed 
even a penny.
    Last week, I asked David Gunn when he testified before us 
whether an appropriation of $521 million for next year would 
put Amtrak into bankruptcy, and he said yes. Do you take 
exception with his testimony?
    Secretary Mineta. Well, I think this is something, and I 
would like to--it is that old proverb, what the Secretary meant 
to say, and I have been asked to restate what I had said 
earlier, but in terms of that request, I believe it still is 
what we consider a place-holder, and I think the Administration 
is still, in terms of both policy and financial, in terms of 
how much would be required we are still working with the White 
House on this.
    And if I might, Madam Chairwoman, read this statement 
because of my own error in what I had said earlier, I would 
just like to say that the Administration is committed to 
support additional funds for Amtrak----
    Senator Murray. Above the $521 million?
    Secretary Mineta. Above the direct loan that we announced 
yesterday. However, the Administration is still working with 
Amtrak, and we will be working with Congress before we announce 
exactly the amount of funds or the type of funds for the second 
tranche of the----
    Senator Murray. You are referring to the short term.
    Secretary Mineta. So that whether the second tranche would 
be direct loans, loan guarantees, or supplemental funds, are 
options that we are still looking at. And so that is what I am 
committed to say, so to the extent that we are still working on 
that detailed statement with--or not statement, but the 
detailed program, as members of the board of directors, we will 
hope to have that clarified.
    Senator Murray. Well, given Amtrak's debt, would it not be 
more appropriate to ask for an appropriation, rather than more 
debt through loan guarantee?
    Secretary Mineta. That is where we will look. We will work 
with you on what we are going to be asking for in fiscal 2002.
    Senator Murray. When will we see that request?
    Secretary Mineta. Well, I would assume that it would be 
sometime in mid-July. Sometime after, in the mid-July timeframe 
I would like to make sure we have the justification to you for 
the 2002 application for these funds.
    Mr. Mead. Ms. Murray.
    Senator Murray. Yes, Mr. Mead.
    Mr. Mead. To just followup on the hearing the other day, 
Amtrak itself needs to provide some information about what its 
budgetary requirements are. Mr. Gunn speaks generically of $1.2 
billion, and I know you and other members of the Committee are 
going to want to drill down and say, well, exactly what are the 
constituent elements of that, Mr. Gunn, and so there is a 
responsibility here on Amtrak's part, too.
    In IG, we were asked by the House to scrub the $1.2 
billion, and the categories we would put that money in are 
different, in different amounts than Amtrak, so we do want to 
hear from Amtrak.
    Senator Murray. I would agree. We need them at the table, 
but we need the Administration to be at the table quickly as 
well both for the short term and for the long term. We need to 
know what your short-term request is, whether it is an 
appropriation or a loan, we need to make a determination of 
what is in the railroad's best interest, and how we are going 
to get that through, and I must say I am very confused as to 
what the Administration is going to ask us for, and we are on a 
very short timeframe.
    And I would say in the long run, I do not know how long you 
expect us to live with the place-holder, but we need to have a 
better understanding, because we are going to back in July, the 
Chair of this Committee and the Appropriations Committee 
expects us to have bills moving by the August recess, and in 
order to put that request together with all of the other things 
I need to balance in my transportation appropriations, we need 
to know sooner rather than later, and I mean sooner within 
days.
    Secretary Mineta. All right. We will comply with that.
    Senator Murray. Thank you very much. I want to thank all 
the witnesses for appearing this morning. This joint Committee 
hearing stands adjourned.
    [Whereupon, at 11:50 a.m., the Subcommittees adjourned.]

                                  
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