[Senate Hearing 108-]
[From the U.S. Government Publishing Office]



 
  DEPARTMENTS OF TRANSPORTATION, TREASURY AND GENERAL GOVERNMENT, AND 
          RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2004

                              ----------                              

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

                       NONDEPARTMENTAL WITNESSES

    [Clerk's note.--The following testimonies were received by 
the Subcommittee on Transportation, Treasury and General 
Government, and Related Agencies for inclusion in the record. 
The submitted materials relate to the fiscal year 2004 budget 
request.
    The subcommittee requested that public witnesses provide 
written testimony because, given the Senate schedule and the 
number of subcommittee hearings with Department witnesses, 
there was not enough time to schedule hearings for 
nondepartmental witnesses.]
 Prepared Statement of the National Association of Railroad Passengers
    The National Association of Railroad Passengers is a non-partisan 
organization funded by dues and contributions from approximately 16,000 
individual members. We have worked since 1967 to support improvement 
and expansion of passenger rail, particularly intercity passenger rail.
    We strongly support Amtrak's request for $1.812 billion in fiscal 
2004. We recognize the constraints placed on your ability to find 
funding for all transportation needs while forced to operate in an 
environment dominated by guaranteed spending programs. Nevertheless, we 
believe the committee has an obligation to develop a policy that puts 
more balance in the nation's transportation system. Minor (or even 
major) reductions in Amtrak's route structure would not yield any 
meaningful savings for a couple of years but would drain energy--at 
Amtrak, on Capitol Hill, and in the executive branch--away from the 
productive efforts David Gunn has initiated to ``reform'' Amtrak from 
within.
    One cannot overstate the importance of his efforts to get Amtrak to 
a ``state of good repair'' for the first time ever. This effort--
combined with capital improvements such as recent track work on the 
Chicago-St. Louis line and signal improvements on part of the Chicago-
Detroit line--could produce very impressive ridership, even before 
there are any results from the much-needed higher speed rail program 
that we expect the authorizing committees to approve outside the 
regular appropriations process.
    We appreciate that the Bush Administration's request for $900 
million is 73 percent higher than its $521 million request for fiscal 
year 2003, but this would be a 14 percent cut from what Amtrak received 
in fiscal year 2003, and is only half of what Amtrak says it needs in 
fiscal year 2004. It has been said that $900 million nonetheless 
represents an increase over ``average'' funding levels of the past ten 
years--but Amtrak's delicate financial situation today is a direct 
result of inadequate funding through much of that period, and Amtrak's 
2004 request of $1.812 billion is meant to start to make up for those 
past deficiencies. Looked at another way, $900 million is 40 percent 
below the inflation-adjusted average for 1982-1984.
    More recently, between fiscal year 1997 and 2002, Amtrak averaged 
$1.1 billion a year in federal funding, with much of that coming 
through the Taxpayer Relief Act of 1997 (TRA), which provided Amtrak 
with $2.2 billion outside of the appropriations process.
              public wants more travel choices, not fewer
    Although public support for passenger rail was well established 
before September 11, 2001, as reflected in polls discussed near the end 
of this statement, the 9/11 catastrophe focused and energized public 
interest in having more transportation choices, not fewer, and thus in 
retaining and improving our national passenger rail network.
    Because of the combined impacts of the ``airport hassle'' factor 
and fear of flying, people who formerly flew to avoid four-hour ground 
trips now accept ground trips of about eight hours in order to avoid 
flying. Ironically, the majority of those trips are by car even though 
plane travel remains far safer than driving. Where good train service 
is offered in such markets, business is thriving even in the face of a 
weak travel and tourism industry. The public--by its purchase of 
tickets--has shown that it will ride conventional-speed services in 
large numbers in many markets. Such trains need not come anywhere near 
the speed of a TGV; they need only be reasonably fast and reasonably 
frequent to be attractive to many travelers. This is not to deny the 
importance of continuing to work towards world-class high speed rail, 
particularly in longer corridors.
    During the first seven months of Fiscal 2003 (October-April), the 
following services posted travel increases in the face of extraordinary 
weakness in the travel and tourism markets. The percentages shown are 
increases in passenger-miles compared with the year-earlier period. 
(The passenger-mile--one passenger carried one mile--is the standard 
measure of intercity travel.)
  --Chicago-Grand Rapids, +30.7 percent.
  --New York-Pittsburgh Pennsylvanian, +21.1 percent. \1\
---------------------------------------------------------------------------
    \1\ Primarily the result of restructuring the train to run at 
``passenger-friendly'' rather than ``freight-friendly'' times.
---------------------------------------------------------------------------
  --Boston-Portland Downeaster service, +12.5 percent.
  --Pacific Surfliner (primarily San Diego-Los Angeles-Santa Barbara), 
        +10.6 percent.
  --Chicago-New Orleans City of New Orleans, +9.7 percent.
  --San Joaquin Valley Service, +7.6 percent.
  --New York-Charlotte Carolinian, +7.2 percent.
  --Chicago-Carbondale Illini, +7.1 percent.
  --Chicago-Quincy Illinois Zephyr, +6.7 percent.
  --Sacramento Area-Bay Area-San Jose, +6.5 percent.
  --Chicago-Seattle/Portland Empire Builder, +5.9 percent.
  --Chicago-St. Louis, +5.8 percent.
    Reflecting the relationship between an aging population and 
interest in alternatives to driving, the American Association of 
Retired Persons in its new ``Public Policies 2003'' states: ``Congress 
should support nationwide passenger rail service that is integrated and 
coordinated with regional, state and local passenger rail [and should] 
establish a dependable funding mechanism that insures continuing 
passenger rail service.''

                 ANALYZING ROUTE FINANCIAL PERFORMANCE

    DOT Inspector General Kenneth Mead, in February 27, 2002, testimony 
before a House appropriations subcommittee, called operating grants 
needed for long-distance trains (what we call national network trains) 
``chump change'' compared with ``the annual capital subsidy required to 
continue operating'' Northeast Corridor trains. He said national 
network operating losses are only about 30 percent of NEC capital 
requirements.
    We offer the following comments about measurements:
    First, the passenger mile--one passenger traveling one mile--is the 
standard measure of intercity travel. Trip lengths vary widely and use 
of the passenger-mile reflects that. Thus, subsidy per passenger-mile 
is a more meaningful way to measure the relative efficiency of Amtrak's 
routes. To illustrate how results can differ, the fiscal year 2001 data 
in the Amtrak Reform Council final report showed that the Southwest 
Chief had the fifth best operating ratio but the fifth worst subsidy 
per passenger. (Operating ratio--costs divided by revenues--is another 
good way to measure economic performance.)
    Second, the absolute numbers that have been widely quoted, though 
they exclude depreciation, are based on fully allocated costs 
(including, for example, a share of the Amtrak CEO's expenses) and thus 
exceed savings that might be realized by discontinuing a specific 
route.
    Third, the Sunset Ltd. in particular has been hampered by 
exceedingly poor on-time performance, much of which is related to heavy 
track work on a largely single-track railroad as Union Pacific has 
worked to eliminate deferred maintenance on former Southern Pacific 
lines. There is hope for improvement. Union Pacific Chairman and CEO 
Dick Davidson, Railway Age magazine's ``Railroader of the Year,'' is 
quoted in their January issue saying, ``We do want to be a good partner 
with Amtrak, and we're doing our best to get our railroad upgraded on 
the Amtrak routes and work with them to improve performance.''
    Finally, our Association strongly believes that the existing 
network is a skeletal foundation, from which the system should grow, 
and that all the routes that ``should'' be discontinued--and some that 
should not have been--have already been discontinued. Thus, the only 
purpose for ranking routes would be to identify where special actions 
might be needed to improve performance, not to identify routes for 
discontinuance.
    We question the relevance of the planning process used to 
restructure the Northeast rail freight network in the 1970s. That 
network was dense and arguably overbuilt, so that it was easy to take 
out many route miles without harming major markets. The Amtrak network 
by contrast is skeletal. The ability to take out individual routes 
without collapsing the system is limited because of the 
interrelationships among the routes in terms of shared revenues 
(connecting passengers) and shared costs (common facilities).

          EXAMPLES OF IMPROVED EFFICIENCY AT ``GUNN'S AMTRAK''

    Gunn and his key people have impressive knowledge specific to 
railroading and to budget discipline, which appears to be paying off 
already.
    One change visible to passengers is the now-consistent, dining-car 
requirement that sleeping-car passengers sign their names and room 
numbers. Meals are included in the sleeping-car charge, but not in 
coach fares. Reinstitution of the signature process--and an audit 
(comparing dining car checks with passenger manifests)--aims to 
determine more accurately food/beverage revenues and costs and to help 
eliminate abuse (e.g., coach passengers getting free meals).
    Amtrak is fixing, scrapping or selling equipment that has been out 
of use, realizing that there is a cost to the indefinite storage of 
such equipment. Elderly, costly-to-maintain coaches have been kept in 
service (especially on the New York-Philadelphia ``Clockers'') while 
modern equipment that needed only minor repairs was sidelined; Amtrak 
is undertaking those minor repairs.
    Amtrak is making good use of sizable inventories left over from 
previous projects cut short by funding shortages. For example, Amtrak 
has found orange upholstery to use when overhauling coaches with ratty 
old upholstery of the same color. The end result may not be the color 
one would have chosen for the new century, but it will be clean and 
new--and did not require any new purchase.
    Amtrak is covering a lot of old carpeting with plastic, which is 
easier to clean and doesn't hold dirt, odor, or splashed coffee.
    A new frequency--the 10th Acela Express on the New York-Boston 
run--was added January 27 without increasing crew costs.
    Amtrak's organizational structure has been flattened by elimination 
of the Eastern and Western general manager positions, so that the seven 
divisional general superintendents now report directly to the vice 
president of operations.
    Amtrak announced January 24 that it would close its Chicago call 
center, the smallest of its three centers, at the end of December. Even 
if the number of agents added at empty desks in Riverside and 
Philadelphia equals the number of agent positions eliminated in 
Chicago, Amtrak expects to save $3 million a year in management, 
facility and technology costs. Any net reduction of agents--such as 
might be possible because of the continuing migration of business to 
the internet--would increase the savings.

     APPENDIX I.--POLLS INDICATE PUBLIC SUPPORT FOR PASSENGER RAIL

    Polls over the years have consistently shown public support for 
faster, more frequent, and reliable passenger trains, including two 
national polls last summer. A poll conducted by CNN/Gallup/USA Today 
near the height of Amtrak's June, 2002, cash crisis (June 21-23) found 
that 70 percent of the public support continued Federal funding for 
Amtrak. Similarly, The Washington Post found that 71 percent of 
Americans support continued or increased federal funding for Amtrak 
(August 5, 2002, article reporting on July 26-30 poll).
    An October 27, 1997, nationwide Gallup Poll sponsored by CNN and 
USA Today asked whether ``the federal government should continue to 
provide funding for the cost of running Amtrak, in order to ensure that 
the U.S. has a national train service, or the federal government should 
stop funding Amtrak, even if that means the train service could go out 
of business if it doesn't operate profitably on their own.'' Favoring 
continued funding were 69 percent of respondents, with 26 percent 
against (and 6 percent other responses). State-specific polls also have 
been positive.

Wisconsin
    A poll by Chamberlain Research Consultants of Madison, released by 
the Wisconsin Association of Railroad Passengers in June, 2002, 
indicated that
  --77 percent of Wisconsin residents ``support a nationwide system of 
        passenger trains with increased routes, frequencies, and 
        shorter travel time.''
  --76.6 percent said they would use the trains if the planned nine-
        state Midwest Regional Rail network becomes available to them.
  --54.3 percent responded positively to this question: ``If federal 
        funding is available for improving intercity passenger rail 
        services, Wisconsin may try to attract these rail improvement 
        funds by pledging to pay for a portion of the project with 
        state money as we do now with highway and airport projects. Is 
        this something you favor, oppose, or neither favor nor oppose 
        as a way to raise money to develop passenger rail services in 
        Wisconsin?''
    The survey, which was conducted over a week-and-a-half ending in 
mid-February, took place as the future of Amtrak and the need for a 
nationwide rail passenger service was being debated by Congress, and as 
Wisconsin state government wrestled with its most serious financial 
crisis ever. More information is available at http://www.wisarp.org.

Ohio
    The Ohio State University Center for Survey Research (OSU-CSR) 
released a poll (``Tracking Ohio'') on March 8, 2001, which found that 
80 percent of Ohioans want the state to develop passenger rail service. 
The following question produced a 74 percent positive response: ``If 
Ohio had a modern, convenient and efficient passenger rail network, do 
you think it would improve the quality of life in Ohio or would it have 
no effect?'' About two-thirds (65 percent) of respondents said state 
money should be used to attract federal passenger-rail funding to Ohio, 
if such federal funding were available. More than half (53 percent) 
said the best way to relieve road traffic congestion is to ``improve 
all forms of transportation including mass transit and high-speed 
rail.'' The statewide poll was conducted by telephone January 2-31, 
2001, as part of the OSU-CSR's monthly Buckeye State Poll. The margin 
of sampling error was no more than +/-4.3 percent.

New York
    In 1998, the Marist College Institute for Public Opinion 
(Poughkeepsie) released results of a poll it conducted of New York 
State registered voters regarding state investment in intercity rail 
passenger service (trips longer than 75 miles one way). Findings: 82 
percent believed that having modernized intercity passenger train 
service is at least as important as having good highways and airports 
(of this figure, 12 percent felt rail service was even more important); 
87 percent favored an increase in government spending for intercity 
passenger train service. The poll was based on approximately 600 
responses with a margin of error of no more than
+/-4 percent. It was commissioned by the Empire State Passengers 
Association and the Empire Corridor Rail Task Force.

         APPENDIX II.--BENEFITS OF AMTRAK AND PASSENGER TRAINS

    In crowded corridors, passenger trains represent vital people-
moving capacity and help relieve air and road congestion. This benefit 
will grow over time as travel demand continues to grow while airport 
and highway construction face more intense local opposition and ever-
tighter limits on funding and sheer availability of land.
    Amtrak is far safer than auto travel.
    During inclement weather, Amtrak is safer and usually more reliable 
than airplanes and buses. Amtrak was the only thing going in the 
Northeast in the recent President's Day storm.
    In most cities, Amtrak helps mass transit, downtown areas and 
transit-dependent people by serving--and increasing the visibility and 
economic viability of--transit-accessible downtown locations. Amtrak 
feeds connecting passengers to transit. Amtrak shares costs with 
transit at joint-use terminals and on joint-use tracks. Positive 
impacts have been observed even in small cities with minimal Amtrak 
service. Mayor John Robert Smith of Meridian, Miss., on Amtrak's New 
York-Atlanta-New Orleans run (one train per day in each direction), 
says property values have tripled in recent years around the railroad 
station, site of a relatively new intermodal terminal.
    By contrast, new airports intensify energy-inefficient suburban 
sprawl and stimulate auto-dependent development. This leads to the 
social costs of getting transit-dependent people to work, or the need 
to address the consequences of their not working.
    Amtrak is important to those who cannot fly due to temporary or 
permanent medical problems, and to those for whom physical and 
financial considerations rule out driving long distances, for example, 
seniors and students. (The editor of Frequent Flier, forced by doctor's 
orders to take the train to Florida, wrote a favorable column about the 
trip.) Indeed, some of those medical problems have come about as a 
result of flying.
    Amtrak serves many communities where alternative transportation 
does not exist, is not affordable or only serves different 
destinations. Trains can make intermediate stops at smaller cities at 
minimum cost in energy and time. This is apparent in corridors--where 
benefits go to such cities as Jefferson City, Lancaster, Trenton, 
Kalamazoo, Wilmington, Bloomington/Normal and Tacoma. It also means, 
for example, that the Empire Builder can stop at eight small cities in 
Washington (plus Seattle and Spokane), 12 in Montana and seven in North 
Dakota without compromising the train's appeal to those riding between 
Chicago or Minneapolis and Seattle or Portland. Similarly, the 
California Zephyr serves five Colorado points (plus Denver) and five 
points each in Iowa and Nebraska. Also, Amtrak serves 14 North Carolina 
points.
    Here is an example of long-distance travel that I encountered on 
the Southwest Chief: a mother and her 14-month-old child rode from 
Garden City, Kansas, to Barstow, California. The family was moving to 
California; the husband was driving the U-Haul; the wife and child were 
on the train ``so the move would not be so traumatic'' for the child. 
They did not consider the plane because they felt it would be too 
cramped for the child. Also, airfare out of Garden City was 
prohibitive.
    Amtrak is part carrier (like United and Greyhound) and part 
infrastructure. Thus Amtrak provides important passenger-moving 
capacity, unlike airlines and bus companies. In much of the Northeast 
Corridor and a few other places, Amtrak is the rail equivalent of the 
air traffic control system, airport authorities and airlines. (Among 
the ``other places'': the Chicago terminal, part of the Chicago-Detroit 
line and the track between Albany, New York, and the Massachusetts 
state line.) Elsewhere, Amtrak is the only carrier with legal access to 
freight railroads' tracks--a quid pro quo for relieving the railroads 
of their passenger-train obligations in 1971.
     Amtrak's national network trains are transportation ``melting 
pots.'' Intercity travelers by all modes had an average annual income 
of $70,000. The comparable figure for travelers on Amtrak's national 
network trains is $51,000. [This is 1999 data inflated to 2002 and thus 
probably good for 2003 as well.] However, the majority of passengers on 
these trains ride coach. Surveys available to us six years ago 
indicated that, for 30 percent of coach passengers traveling over 12 
hours, average income was less than $20,000 (for 11 percent, it is less 
than $10,000). Obviously, most standard- and deluxe-room sleeping car 
passengers have considerably higher incomes and pay much higher fares. 
Nonetheless, anyone who characterizes these trains as land versions of 
cruise ships should try walking the coaches, especially at night.
    Trains, especially on longer trips, offer a form of social contact 
almost lost in this country today--the opportunity to meet and relax 
with total strangers that one may or may not ever see again.
    Amtrak over much of its network enables one to enjoy gorgeous 
scenery in total comfort. Some examples: the Connecticut and California 
coastlines, the Hudson River in New York, the Colorado Rockies, the 
mountains of Vermont and northern New Mexico, Glacier Park in Montana 
and West Virginia's New River Gorge.
    Amtrak uses only 79 percent of the energy airlines use to move a 
passenger a mile, and only 22 percent of the energy general aviation 
uses (to do the same). This statement is based on the following 2000 
data from the Oak Ridge National Laboratory's annual Transportation 
Energy Data Book (Edition 22, published September 2002) and available 
on-line: Amtrak--2,902 British thermal units per passenger-mile; 
Airlines--3,666; General aviation--12,975. Just two years earlier, in 
1998, Amtrak was at 2,441. Amtrak is much less polluting than 
airplanes. (Energy efficiency is a good proxy for air pollution.)
    Thanks to a growing array of connecting buses available with train 
travel in a single ticket transaction, Amtrak puts people on intercity 
buses who would not otherwise have considered using them. ``Thruway'' 
is Amtrak's copyrighted name for connecting buses that can be booked 
and ticketed through Amtrak's reservation system. Thruways first 
developed in a big way in California, where the state underwrites an 
impressive network of dedicated, feeder buses. Elsewhere, depending on 
the situation, Amtrak or the private bus companies themselves bears the 
financial risks for many Thruway runs themselves.

                        APPENDIX III.--SUBSIDIES

    Virtually all federal spending on highways is generated from user 
fees. However,
  --Federal policy helps encourage states and local governments to 
        spend primarily on highways and aviation, where federal funds 
        cover 50-80 percent of project costs, and not on railroads, 
        where federal funding generally is zero.
  --A total of $34 billion in 2001 highway spending came from non-user 
        sources in all levels of government (while $10 billion in 
        highway user payments went to ``nonhighway purposes'' (Table 
        HF-10, Highway Statistics 2001).
  --A mode-specific trust fund system insures massive continued 
        investment in the modes that are already dominant, regardless 
        of whether they are the best solution for tomorrow's 
        transportation problems, and regardless of the needs of the 
        users paying those taxes. A large proportion of them are soon 
        to be senior citizens who will place greater value on non-
        automobile travel choices.
  --User fees clearly do not cover environmental and other external 
        costs associated with highways and aviation.
    The proportion of general funds covering FAA Operations grew by 
about $2 billion from fiscal year 2002 to fiscal year 2003 and now 
represents about half of FAA Operations costs. As to airport 
construction is done through public rather than private finance. The 
savings associated with financing an airport project with tax exempt, 
government-backed bonds rather than with commercial loans sought 
directly by the airlines is substantial. The various sources available 
to fund airports, like the mode-specific trust fund system, fall into 
the category of reinforcing the dominance of modes that are already 
dominant whether or not they offer the best solution for today's 
transportation problems.
                                 ______
                                 
 Prepared Statement of the People for the Ethical Treatment of Animals 
                                 (PETA)

    Chairman Shelby, Ranking Member Murray, and Members of the 
Subcommittee: People for the Ethical Treatment of Animals (PETA) is the 
world's largest animal rights organization, with more than 750,000 
members and supporters. We greatly appreciate this opportunity to 
submit testimony regarding the fiscal year 2004 appropriations for the 
Department of Transportation (DOT). Our testimony will focus on 
chemical tests allowed or required by the DOT to be conducted on 
animals.
    As you may know, the DOT requires hazardous materials to be 
categorized and labeled for shipping. Traditionally, a chemical's 
dermal corrosive potential has been estimated by applying the substance 
to the shaved, abraded skin of animals. Fortunately, there are non-
animal test methods that are just as effective. Human skin equivalent 
tests such as EpiDermTM and EpiSkinTM have been 
scientifically validated and accepted in Canada, the European Union, 
and by the Organization for Economic Cooperation and Development (OECD) 
(of which the U.S. is a key member) as total replacements for animal-
based skin corrosion studies. Another non-animal method, 
CorrositexTM, has been approved by the U.S. Interagency 
Coordinating Committee on the Validation of Alternative Methods. 
However, the DOT continues to allow the use of animals in many skin 
corrosion studies, despite the availability of data from validated, 
non-animal tests.
    In 2000, PETA discovered that the DOT was using rabbits for 
corrosivity tests for which, according to the agency's own guidelines, 
CorrositexTM could have been used instead. In 2001, at 
PETA's urging, the DOT's Office of Hazardous Materials Enforcement 
added language to its operation procedures requiring that DOT staff 
arranging for testing of materials ``inform the prospective laboratory 
that you want testing to be conducted using the CorrositexTM 
testing protocol, when testing using animals is not required. Advise 
the laboratory that testing using animals is to be conducted only when 
absolutely necessary.''
    We were glad to see that change in policy. However, 
CorrositexTM is not considered sufficient by the DOT to test 
all of the hazardous materials for which the agency requires 
corrosivity tests. According to the DOT's policy, 
CorrositexTM can only replace animal tests for organic and 
inorganic acids and bases as well as acid derivatives. PETA would like 
the agency to require the use of EpiDermTM and 
EpiSkinTM so that all of the hazardous materials could be 
tested for corrosivity with non-animal methods. The cruel rabbit tests 
for corrosivity are no longer necessary in any situation.
    Secondly, to our knowledge, there is no DOT policy of enforcement 
to ensure that only non-animal methods are used. Therefore, we are 
requesting that the subcommittee include report language ensuring that 
no funds for the DOT (including salaries or expenses of personnel) may 
be used for the purpose of assessing data from an animal-based test 
method when a non-animal test for the desired endpoint has been 
validated and/or accepted by the OECD or its member countries.

                  ANIMAL TESTS CAUSE IMMENSE SUFFERING

    Traditionally, the degree to which corrosive materials are 
hazardous has been measured by the very crude and cruel method of 
shaving rabbits' backs and applying the test substance to the animals' 
abraded skin for a period of hours. As one can imagine, when highly 
corrosive substances are applied to the backs of these animals who are 
not given any anesthetics or analgesics, the pain is excruciating.

   THE RELIABILITY AND RELEVANCE OF ANIMAL TESTS TO HUMAN BEINGS IS 
                              QUESTIONABLE

    The assessment of damage to the rabbits' skin is highly subjective 
and variable, which limits the reproducibility of the animal test 
(which, unlike non-animal tests, has never been scientifically 
validated). One study, which compared the results of rabbit tests with 
real-world human exposure information for 65 chemicals, found that the 
animal test was wrong nearly half (45 percent) of the time in its 
prediction of a chemical's skin damaging potential (Food & Chemical 
Toxicology, Vol. 40, pp. 573-92, 2002).

           VALIDATED METHODS EXIST WHICH DO NOT HARM ANIMALS

    Fortunately, non-animal test methods, such as EpiDermTM, 
EpiSkinTM, and CorrositexTM, have been found to 
accurately predict chemical corrosivity without harming animals. In 
fact, although the DOT continues to accept data from animal tests, the 
agency specifically allows an exemption from animal testing for organic 
and inorganic acids and bases as well as acid derivatives if 
CorrositexTM tests are used instead. The DOT has the power 
to allow a similar exemption for EpiDermTM and 
EpiSkinTM so that no animal tests would be required for any 
of DOT's skin corrosivity data needs.
    EpiDermTM and EpiSkinTM are comprised of 
human-derived skin cells, which have been cultured to form a multi-
layered model of human skin. The CorrositexTM testing system 
consists of a glass vial filled with a chemical detection fluid capped 
by a membrane, which is designed to mimic the effect of corrosives on 
living skin. As soon as the corrosive sample destroys this membrane, 
the fluid below changes color or texture. Users simply record the time 
it takes for the sample to break through the membrane. Then, depending 
on their needs, they can assign the proper U.N. Packing Group 
classification for DOT compliance, or use the data to substantiate 
marketing claims.

                   NON-ANIMAL TEST METHODS SAVE TIME

    Unlike animal testing that can take two to four weeks, 
CorrositexTM testing can provide a Packing Group 
determination in as little as three minutes and no longer than four 
hours.

             THE DOT CONTINUES TO ALLOW THE USE OF ANIMALS

    From materials obtained through the Freedom of Information Act, 
PETA learned that the DOT itself has used rabbits to test the 
corrosivity of products whose labeling accuracy was questioned by a 
competitor.
    Listed below are some of the products that the DOT has tested on 
animals.

------------------------------------------------------------------------
              Name of Product                          Results
------------------------------------------------------------------------
Spoke Wheel Cleaner.......................  Full-thickness skin
                                             destruction.
Whitewall Cleaner.........................  Full-thickness skin
                                             destruction.
Savage Acid...............................  Full-thickness skin
                                             destruction.
Goodbye Graffiti..........................  Full-thickness skin
                                             destruction.
Heavy Duty Spoke Wheel Cleaner............  Full-thickness skin
                                             destruction.
Amazing Rust Stain Remover................  Full-thickness skin
                                             destruction.
Oxalic Acid...............................  Tissue necrosis.
------------------------------------------------------------------------

                                SUMMARY

    The skin corrosivity of all the products listed above could--and 
should--have been measured using CorrositexTM, 
EpiDermTM, or EpiSkinTM. There simply is no 
excuse for causing this kind of suffering to animals when three fully 
validated non-animal tests are available.
    We therefore hereby request, on behalf of all Americans who care 
about the suffering of animals in toxicity tests, that you please 
include language in the report accompanying the fiscal year 2004 
Transportation, Treasury and General Government Appropriations bill 
stating that no funds for the DOT (including salaries or expenses of 
personnel) may be used for the purpose of assessing data from an 
animal-based test method when a non-animal test for the desired 
endpoint has been validated and/or accepted by the OECD or its member 
countries.
    Thank you for your consideration of our request.
                                 ______
                                 
     Prepared Statement of the Coalition of Northeastern Governors

    Dear Mr. Chairman: As the Subcommittee begins the fiscal year 2004 
transportation appropriations process, the Coalition of Northeastern 
Governors (CONEG) is pleased to share with the Subcommittee testimony 
on the fiscal year 2004 Transportation and Treasury Appropriations 
bill. The CONEG Governors commend the Subcommittee for its past support 
of funding for the nation's highway, transit, and rail systems. 
Although we recognize the extensive demands being made upon federal 
resources in the coming year, we urge the Subcommittee to continue the 
important federal partnership role that is vital to strengthening the 
multi-modal transportation system. This system is a critical 
underpinning to the productivity of the Nation's economy and the 
security and well-being of its communities.
    First, the Governors urge the Subcommittee to fund the combined 
highway, transit and safety programs at levels that will continue the 
progress made over the last several years to improve the condition and 
safety of the Nation's highways, bridges and transit systems. In both 
urban and rural areas, these infrastructure improvements are not only 
necessary for moving people, but are also critical for improving the 
projected substantial growth of freight movements along the Nation's 
surface transportation system. The U.S. Department of Transportation's 
2002 Conditions and Performance Report to Congress documented the 
improvements in the physical condition of the nation's highway, bridge 
and transit infrastructure as a result of the federal-state investments 
made under the Transportation Equity Act for the 21st Century (TEA-21). 
It also found that a combined federal highway and transit program of 
$53 billion annually is needed simply to maintain our Nation's highways 
and transit systems in the current conditions, and a program level of 
$74.8 billion is needed to actually improve our Nation's highways and 
transit systems.
    Within the Transit program, the Governors strongly urge the 
Subcommittee to address the solvency of the mass transit account while 
maintaining the basic program structure. Further, the Governors urge 
the Subcommittee to continue the traditional 80/20 federal/state match 
for the New Start Program and the Bus and Bus Facilities Discretionary 
Grant Program. These programs have been instrumental in ensuring that 
needed funds are invested to improve and extend transit services in 
both our urban and rural communities.
    Second, the Governors strongly urge the Subcommittee to provide at 
least $1.8 billion in fiscal year 2004 for intercity passenger rail. 
Intercity passenger rail is an vital part of the Nation's 
transportation system, particularly in the Northeast and Mid-Atlantic 
region, where it provides essential mobility, enhances capacity of 
other modes, and provides much needed redundancy to the Nation's 
transportation system. This funding level is critically needed to 
maintain services and begin a program of essential investments in 
equipment and infrastructure to bring the system back to a state of 
good repair for reliable service. The United States Department of 
Transportation Inspector General has noted that over $1 billion in 
capital funds is needed annually just to sustain the current intercity 
passenger rail system, regardless of who operates that system. The 
states are already major investors in the current intercity passenger 
rail system, with the Northeast and Mid-Atlantic states already 
investing over $4 billion in intercity passenger rail operations and 
infrastructure since 1991. A funding level of $1.8 billion in fiscal 
year 2004 will help provide a period of stability for intercity 
passenger and commuter rail operations while the Congress, 
Administration and states work cooperatively to determine the future of 
intercity passenger rail and Amtrak in the Nation's transportation 
system.
    Third, the Governors urge the Subcommittee to continue funding for 
investments in Intelligent Transportation Systems (ITS). It is vital 
that the Nation's transportation system maintain and enhance the 
capabilities made possible by investments in ITS. The densely populated 
Atlantic Coast region relies heavily on ITS to improve operations every 
day on both highways and transit. The Northeast's rural areas and 
communities also benefit significantly from ITS investments. The 
region's ITS systems, including those provided by TRANSCOM and the I-95 
Corridor Coalition, have demonstrated their critical role, both in the 
emergency management and recovery phases, when security demands put 
added pressure on the region's transportation networks.
    Fourth, safety on the Nation's highways, transit and rail systems 
remains a priority of the Governors. The safety of the aging rail 
tunnels along the Northeast Corridor is a particular concern, and we 
urge the Subcommittee to fund life safety improvements for the 
Baltimore and New York tunnels. The Governors also support maximum 
funding for the Railway-Highway Crossing Hazard Elimination Program. As 
part of the federal-state partnership to correct hazardous conditions 
on the Nation's highways, investments in highway-rail crossings can 
reduce injuries and death from accidents even as they allow higher 
train speeds and increased reliability.
    Fifth, the Governors urge the Subcommittee to provide sufficient 
funding for border crossing and gateway infrastructure projects, 
particularly those transportation projects that are required to meet 
new federal security requirements.
    Sixth, the Governors also support the President's funding request 
of $20 million for the Surface Transportation Board.
    Finally, the Governors support continued federal investment in 
transportation research and development programs, particularly the 
Federal Railroad's Next Generation High Speed Rail program. This 
program enhances safety and helps stimulate the development of new 
technologies, which will benefit improved intercity rail service across 
the Nation.
    The CONEG Governors thank you, Ranking Member Murray and the entire 
Subcommittee for the opportunity to share these priorities and 
appreciate your consideration of these requests.
                                 ______
                                 
   Prepared statement of the University Corporation for Atmospheric 
                                Research

    On behalf of the University Corporation for Atmospheric Research 
(UCAR) and the university community involved in weather and climate 
research and related education, training and support activities, I 
submit this written testimony for the record of the Senate Committee on 
Appropriations, Subcommittee on Transportation.
    UCAR is a consortium of 66 universities that manages and operates 
the National Center for Atmospheric Research (NCAR) and additional 
research, education, training, and research applications programs in 
the atmospheric and related sciences. The UCAR mission is to support, 
enhance, and extend the research and education capabilities of the 
university community, nationally and internationally; to understand the 
behavior of the atmosphere and related systems and the global 
environment; and to foster the transfer of knowledge and technology for 
the betterment of life on earth. In addition to its member 
universities, UCAR has formal relationships with approximately 100 
additional undergraduate and graduate schools including several 
historically black and minority-serving institutions, and 40 
international universities and laboratories. UCAR is supported by the 
National Science Foundation (NSF) and other federal agencies including 
the Federal Aviation Administration (FAA).
    The fiscal year 2004 budget request for the FAA should support the 
Administration's and the country's commitment to a safe, efficient, and 
modern aviation system. Weather research contributes to this 
commitment. In testimony before the House Committee on Transportation 
and Infrastructure last month, Charles Keegan, Associate Administrator 
for Research and Acquisitions for the FAA, stated, ``weather continues 
to be a major safety factor for all types of aircraft. A recent 
estimate by the FAA identified weather as being responsible for 70 
percent of flight delays and approximately 40 percent of accidents. To 
mitigate the effects of weather, the FAA's Aviation Weather Research 
Program conducts applied research in partnership with a broad spectrum 
of the weather research and user communities with a goal of 
transitioning advanced weather detection technologies into operational 
use.'' Leveraging the work of the research community, the FAA has made 
tremendous strides in understanding and mitigating severe weather on 
aviation. Current research on turbulence, thunderstorm forecasting, 
oceanic weather, icing, and other areas will result in even more 
savings, in lives and dollars.
    Regarding the fiscal year 2004 request for the FAA, I would like to 
comment on accounts related to aviation weather research that fund the 
collaborative work of researchers in universities and federal 
laboratories. These accounts are relatively small in dollar amounts, 
but the work is potentially life saving for our Nation's pilots and 
passengers.

                        FACILITIES AND EQUIPMENT

C. Overall Aviation Safety Improvement
1C01 Advanced Technology Development Prototyping
    Within Advanced Technology Development Prototyping of the 
Facilities and Equipment section of budget, please add $5.5 million to 
continue the development and implementation of a terrain-induced 
windshear alert system. This project would be done in the Juneau, 
Alaska, area because of the complex terrain surrounding the airport. 
The technology developed could lead to a National Terrain-Induced 
Windshear and Turbulence Alerting System that would be installed in 
airports nation-wide to help prevent crashes like the one that occurred 
in 1991 on approach to the Colorado Springs Airport. Work would include 
verifying the prototype alert system and transferring the technology to 
FAA systems developers. I urge the Committee to provide $2.98 billion 
for Facilities and Equipment in fiscal year 2004 (the same level as 
last year and a 2 percent increase over the President's request), which 
will fund a number of worthy programs, including the development and 
implementation of a terrain-induced, windshear alert system.

              RESEARCH, ENGINEERING AND DEVELOPMENT (RE&D)

    Those of us involved in aviation weather research are deeply 
concerned about the fiscal year 2004 request for the FAA Research, 
Engineering and Development (RE&D) budget. The total request for this 
budget is $100 million, $48 million less than the final fiscal year 
2003 appropriated amount and almost half the amount appropriated in 
fiscal year 2002. The Administration's inadequate budget request will 
reduce research in aviation weather by approximately one-third (over 30 
percent), and will result in the termination of a number of critical 
and potentially life-saving projects. I urge the Committee to fund the 
FAA RE&D at $148 million in fiscal year 2004.

A12. Improve Efficiency of Air Traffic Control System
    Eliminated from the RE&D line in the fiscal year 2004 budget 
request is line A 12. Improve Efficiency of Air Traffic Control System. 
While it is true that airline delays are far less frequent due to the 
decrease in commercial airline traffic attributable to the economic 
slowdown and terrorist activities, the R&D that is now being described 
as relevant only to efficiency clearly has as much to do with safety 
issues as with delays. Research in the areas of severe convective 
weather, visibility hazards, wake turbulence, and oceanic weather would 
be eliminated under the current plan. In order to make this 
appropriation, I ask that the Committee not transfer funds from line 
A11. Improve Aviation Safety (see below). Moving money from one line to 
the other will result simply in the same cuts to important aviation 
safety R&D work. I urge the Committee to restore line A12 and fund 
Weather Research Efficiency, at the very least, at the fiscal year 2003 
appropriated level of $12.1 million.

A11. Improve Aviation Safety
    Within line A11. Improve Aviation Safety, the Weather Research 
Safety program funds many R&D projects including a focus on turbulence. 
Over half of all turbulence-related injuries are caused by turbulence 
in the vicinity of thunderstorms, leading to $22 million fatalities, 
injuries and aircraft damages annually. Current research is focused on 
forecasting the location and duration of thunderstorms, work that will 
be reduced or terminated if this budget is cut. The request for Weather 
Research Safety is down $1 million from the fiscal year 2003 approved 
bill. Within line A11, Improve Aviation Safety, I urge the Committee to 
provide Weather Research Safety, at the very least, the fiscal year 
2003 appropriated level of $21.9 million.
    On behalf of UCAR, as well as all U.S. citizens who take to the 
skies, I want to thank the Committee for the important work you do for 
this country's scientific research, training, and technology transfer. 
We understand and appreciate that the Nation is undergoing significant 
budget pressures at this time, but a strong nation in the future 
depends on the investments we make in Research and Development today. 
We appreciate your attention to the recommendations of our community 
concerning the fiscal year 2004 FAA budget and we appreciate your 
concern for safety within the Nation's aviation systems, particularly 
during this extraordinary time in our Nation's history.
                                 ______
                                 
  Prepared Statement of the American Public Transportation Association

    APTA is a nonprofit international association of over 1,500 public 
and private member organizations including transit systems and commuter 
rail operators; planning, design, construction and finance firms; 
product and service providers; academic institutions; transit 
associations and state departments of transportation. APTA members 
serve the public interest by providing safe, efficient and economical 
transit services and products. Over 90 percent of persons using public 
transportation in the United States and Canada are served by APTA 
members.

                              INTRODUCTION

    Mr. Chairman and members of the subcommittee, on behalf of the 
American Public Transportation Association (APTA), I thank you for this 
opportunity to address the need for federal investment in public 
transportation programs under the Transportation, Treasury and 
Independent Agencies Appropriations bill for fiscal year 2004.

                               ABOUT APTA

    APTA's 1,500 public and private member organizations serve the 
public by providing safe, efficient, and economical public 
transportation service, and by working to ensure that those services 
and products support national economic, energy, environmental, and 
community goals.
    APTA member organizations include public transit systems and 
commuter railroads; design, construction and finance firms; product and 
service providers; academic institutions; and State associations and 
departments of transportation. More than 90 percent of the people who 
use public transportation in the United States and Canada are served by 
APTA member systems.

                                OVERVIEW

    Mr. Chairman, throughout the United States, public transportation 
is undergoing a renaissance. Steady increases in transit investment 
have dramatically improved and expanded public transportation services, 
attracting record numbers of riders on state-of-the-art systems in 
metropolitan, small urban and rural areas.
    In a recent five-year period alone, public transportation use has 
increased by 22 percent--growing faster than vehicle miles and airline 
passenger miles traveled over the same period. In 2001, Americans used 
public transportation 9.5 billion times--the highest ridership level in 
40 years.
    Communities across the country are rehabilitating and expanding 
public transportation systems and constructing new ones. More than 550 
local public transportation operators currently provide services in 319 
urbanized areas; 1,260 organizations provide public transportation in 
rural areas; and 3,660 organizations provide services to the aging 
population and disabled individuals.
    Through improved mobility, safety, security, economic opportunity 
and environmental quality, public transportation benefits every segment 
of American society--individuals, families, businesses, industries and 
communities--and supports important national goals and policies.
    At the same time, the growing problem of traffic congestion 
continues to choke America's roadways and constrain community and 
business development. Polls consistently show that most Americans view 
congestion as a serious problem that continues to grow every year. In 
April of 2003, APTA and the American Automobile Association (AAA) 
released the results of a poll that showed 95 percent of Americans said 
traffic congestion, including commutes to and from work, has grown 
worse over the last three years. The poll also showed 92 percent of 
Americans said it was either very important (71 percent) or somewhat 
important (21 percent) for their community to have both good roads and 
viable alternatives to driving.

                         FISCAL YEAR 2004 GOALS

    Annual Federal appropriations for the Federal transit program have 
increased significantly in each of the last 6 years under the 
Transportation Equity Act for the 21st Century (TEA-21). Federal 
funding increased from just under $4.4 billion in fiscal year 1997 to 
$7.2 billion in fiscal year 2003, a 65 percent increase.
    The stable and predictable growth in the Federal investment in TEA-
21 led to impressive results for transit. While service was expanded 
and improved, and ridership reached its highest level in 40 years, 
public demand for additional capital investment, new transit services, 
and improvements to existing systems continued to grow. This demand for 
additional service and capital projects comes at a time when many 
existing assets are nearing the end of their useful lives and need to 
be improved or replaced. Indeed, a 2002 American Association of State 
Highway and Transportation Officials report estimates that $44 billion 
is needed annually to meet current transit capital needs for new 
projects and improvements to existing systems.
    APTA's recommendations for TEA-21 reauthorization have been made 
available to committee members and staff and they contain detailed 
funding and programmatic recommendations for the next 6 years. Most 
critically, APTA's proposal urges Congress to continue to grow the 
Federal investment in public transportation to address critical 
national transportation needs, and to fund the Federal transit program 
at no less than $8.1 billion in fiscal year 2004.
    We recognize that the Fiscal Year 2004 Budget Resolution assumes 
$7.3 billion in funding for public transportation in fiscal year 2004. 
However, a provision in the resolution granted authority to increase 
funding beyond that amount if Mass Transit Account (MTA) revenues 
exceed expected levels. Revenues accruing to the MTA could be increased 
in a number of ways. These would include providing interest on the 
balance of the MTA, particularly if outlays from the account were 
scored as they are from the highway account; or if user fees were 
adjusted to account for inflation. Therefore, we urge the committee to 
make every effort to set transit funding in excess of the level assumed 
in the Fiscal Year 2004 Budget Resolution, in order to better address 
transit capital investment needs.

              FEDERAL INVESTMENT IN PUBLIC TRANSPORTATION

    The results of TEA-21 have been profound--more Americans have 
access to efficient, safe, and modern transit options than ever before. 
Federal investment in public transportation produces tangible assets in 
our communities that citizens can see and use. These assets include 
light rail lines, buses for commuting, and transit stations that 
attract economic development because of convenient access to 
transportation options.
    Investment in transit makes sense because it is in demand. 
Nationwide, many systems are bursting at the seams, with the highest 
ridership in 40 years and a huge backlog of capital improvements 
identified. In growing communities where transit has not been a 
priority in the past, citizens are demanding new services and capital 
projects. Public transportation supports a solid and growing economy by 
providing access to labor, decreasing time lost to congestion, and 
freeing highway and road space for the movement of goods and people. 
Public transportation represents an efficient use of scarce financial 
resources, because it helps to mitigate congestion in densely populated 
areas and provides a mobility option to millions of Americans. Public 
transportation represents an environmentally responsible transportation 
option because it uses less fuel and emits far less pollution per 
passenger than the automobile. A recent report by economists Robert 
Shapiro and Kevin Hassett demonstrates that if Americans used public 
transportation for only 10 percent of their daily travel needs, the 
United States could significantly reduce its dependence on foreign oil.

                            INCREASED DEMAND

    Growing demand nationwide for transit services shows the 
effectiveness of federal investment. In a recent 5 year period, transit 
ridership grew 22 percent, greater than the growth rate of highways and 
domestic air travel during the same time frame. In that same time 
period Chicago's MTA system saw ridership increase from 419 million 
trips to 450 million; in Dallas, ridership on the DART system rose from 
52 million to 60 million; and in LaCrosse, Wisconsin, from 713,000 to 
819,000.
    Support for increased transit service remains high. In February 
2003, Wirthlin Worldwide Public Opinion Poll showed 81 percent of 
Americans support the use of public funds for the expansion and 
improvement of public transportation; 56 percent say the need to reduce 
traffic congestion has become more important over the last 5 years. The 
poll also stated 57 percent agree their community needs more public 
transportation options, including 64 percent of urban residents, 59 
percent of suburban residents, 51 percent of rural residents, and 55 
percent of small-town residents.
    This poll demonstrates that support for public transportation has 
increased dramatically not only in our biggest cities, but in smaller 
urban communities and rural areas as well, where 40 percent of 
America's rural residents have no access to public transportation, and 
another 28 percent have substandard access. It is estimated that rural 
America has 30 million non-drivers, including senior citizens, the 
disabled and low-income families who need transportation options. 
According to a survey of APTA members, bus trips in areas with 
populations less than 100,000 increased from 323 million to 426 million 
in a recent 5 year span.
    Another focus of the support for transit service is in the area of 
security. During the September 11th attacks, hundreds of thousands of 
citizens in New York and Washington were able to evacuate those cities 
quickly and safely because of transit. As long as security threats 
endanger our cities, transit serves an invaluable role as a method of 
evacuation that will help get people out of harm's way.

                          ECONOMIC IMPORTANCE

    Investment in public transportation plays a key role in stimulating 
local economies and the national economy as a whole. Investment in 
transit infrastructure creates jobs. Transit-oriented development 
around transit stations stimulates construction, new business and 
housing which increases land value and property taxes. Transit service 
provides employers with access to workers and workers with a way to get 
to jobs.
    Investment in transit creates jobs and significant economic growth 
outside of the communities in which the systems are located. Optima Bus 
Corporation (formerly Chance Coach), located in Wichita, Kansas, built 
a 125,000 square foot assembly plant in 2000 and doubled its workforce. 
Optima builds buses and trolleys to be used in systems around the 
country. The same is true for North American Bus Industries in 
Anniston, Alabama; Neoplan USA bus company in Lamar, CO; and MCI Buses 
in Pembina, ND. These and many other companies supply goods and 
services to the transit industry, employ workers and generate economic 
activity in their communities with TEA-21 resources.
    Public transportation's role in stimulating local economies is 
profound. According to a Cambridge Systematics Inc. study, for every 
$10 spent on transit capital projects, $30 in business sales is 
generated. Every $10 invested in transit operations results in $32 in 
business sales. Each $1 billion in federal transportation invested 
creates 47,500 jobs. As States and local governments struggle to find 
revenues, public transportation has provided a strong return on 
investment. In Dallas the taxable value of properties located near its 
DART system increased 25 percent faster than elsewhere in the metro 
area. In this area, the state of Virginia will reap $2.1 billion in tax 
revenues as a result of transit investment over the next 7 years.
    Another benefit of public transportation to a healthy economy is 
providing job access and reliability for an expanding labor pool. In 
cities large and small, businesses and other service providers are 
choosing to locate or relocate in areas convenient to public 
transportation. Transit systems are working with local businesses to 
provide transit passes and tax benefits to both employees and 
employers. Transit continues to provide a reliable, convenient option 
for employees who wish to avoid crowded highways or who cannot afford 
to travel by car.
    Indeed, public transportation plays a very specialized role in this 
aspect of economic growth and stability. With the help of public 
agencies in local communities, transit helps low income workers who 
cannot afford other options stay productively employed and off of 
welfare. A project in New Jersey provides passes and tickets to welfare 
recipients for work-related travel. In Myrtle Beach, South Carolina, 
the Pee Dee RTA coordinates with the county department of social 
services to run a 24 hour commuter service linking rural residents with 
jobs in the city. The Albuquerque transit department provides reduced 
rate transit service for low income workers.
    Further, savings as a result of transit are significant. Atlanta's 
MARTA system saved an estimated $2.2 billion over a 14-year period by 
providing motorists a public transportation alternative. A study by the 
Texas Transportation Institute concludes that a single year's increase 
in automobile traffic requires 27 miles of freeway and 37 miles of 
principal streets in each city in America just to keep up. This is 
significant when considering urban rail systems can provide more 
capacity in a 100 foot right-of-way than a 6 lane freeway, which 
requires three times as much space.

                         ENVIRONMENTAL FACTORS

    Public transportation represents an effective way to improve air 
quality without imposing new government mandates. According to a report 
released last summer by economists Dr. Robert Shapiro of the Brookings 
Institution and Dr. Kevin Hassett of the American Enterprise Institute, 
public transportation generates 95 percent less carbon monoxide, 92 
percent less volatile organic compounds, and about half as much carbon 
dioxide and other pollutants per passenger mile than individuals in 
private automobiles. The study also shows that public transportation 
already saves more than 855 million gallons of gasoline and 45 million 
barrels of oil a year. This is equivalent to the energy used to heat, 
cool, and operate one quarter of all American homes annually, or half 
the energy used to manufacture every computer and piece of electronic 
equipment in America every year.
    The study also found that if one in ten Americans used public 
transportation regularly, U.S. reliance on foreign oil could be cut by 
more than 40 percent. This is nearly equivalent to the amount of oil 
imported from Saudi Arabia annually. It reported that even small 
increases in transit use would help most of the 16 major cities that 
currently fail to meet EPA standards for carbon monoxide emissions; and 
that transit is twice as fuel efficient as private vehicles for each 
passenger mile traveled.

                      PRESIDENT'S BUDGET PROPOSAL

    In February, the President's fiscal year 2004 budget proposal was 
released. It calls for a 6 percent increase in funding for the 
Department of Transportation, but no increase in overall investment for 
public transportation. Prior to unveiling his budget, the President 
identified his priorities for the Nation in the annual State of the 
Union Address. These included revitalizing the Nation's economy, 
reducing dependence on foreign sources of energy, helping the 
environment by investing in hydrogen powered vehicles and applying the 
compassion of America to solve disadvantaged American's problems.
    Public transportation assists in reaching each of these goals. 
Regarding the economy, 47,500 jobs are created by every $1 billion 
invested in the public transportation infrastructure. $30 million in 
private business sales are generated for every $10 million invested in 
transit. Transit provides efficient access to labor and mitigates 
congestion so that goods may travel more freely.
    With regard to reducing dependence on foreign sources of energy, 
public transportation reduces by millions of barrels the amount of oil 
that would otherwise be imported every year. In terms of the 
environment, public transportation produces less pollution per rider 
than the automobile. It reduces the amount of volatile organic 
compounds and nitrogen oxides that contribute to smog and illnesses 
related to polluted air such as asthma.
    Public transportation is a compassionate way to address the 
mobility needs of millions of Americans. It provides transportation 
options to the disabled and those who are unable to drive. It provides 
an inexpensive way for lower-income workers to commute to work, 
allowing them to save money for their families that would otherwise be 
spent on driving expenses. It provides a safe way for the elderly to 
visit the doctor or go to the grocery store.
    APTA questions the Administration's proposal to restructure a 
Federal transit program that has worked so well in recent years. APTA's 
recommendations for the reauthorization of the Federal transit program 
build on the success of the current program without eliminating any of 
the major elements of that program. We do not believe that bus 
replacement and facility needs can be addressed by folding the 
discretionary bus program into the formula and fixed guideway programs. 
We support retention of a distinct fixed guideway modernization program 
that helps improve the efficiency of systems that often operate at 
capacity and serve large numbers of citizens in communities that depend 
on public transportation.
    Further, APTA opposes the Administration's proposal to reduce the 
Federal share of new fixed guideway transit projects from 80 percent to 
50 percent because we believe it would bias decisions on transportation 
investments that are made at the local level. APTA believes that such 
decisions should be based on project merit and local transportation 
needs, and not on the basis of the Federal share of transportation 
project costs. Communities that want to build rail and other fixed 
guideway projects already make a substantial commitment of local 
resources for project construction under existing law. Further, to 
receive Federal funding for such projects, the community must 
demonstrate to the Federal Transit Administration that it has the local 
resources to operate and maintain the system once it is built. The full 
funding grant agreement (FFGA) process protects against the funding of 
projects that fail to provide good benefits to the community or do not 
have adequate local funding for long-term operations. Good rail and 
other fixed guideway systems can provide enormous benefits to a 
community, including a wide array of economic benefits, and they should 
be considered with other transportation investments in the local 
transportation planning process on a level playing field.
    We strongly believe that growth of the Federal investment in public 
transportation can help advance many of the Nation's goals, and that 
freezing Federal funding for transit will erode purchasing power and 
increase the backlog of unmet transit capital needs. We urge the 
committee to fund the Federal transit program in fiscal year 2004 at no 
less than $8.1 billion.

                               CONCLUSION

    Public transportation can play a key role in meeting the goals of 
the Administration and Congress in providing economic development, 
energy dependence, transportation options for Americans who cannot 
afford to drive or are not able to, and preserving the environment. To 
do so it requires a commitment on the part of the Federal government in 
the form of increased predictable investment.
    Mr. Chairman, we look forward to working with the Committee as it 
advances legislation to invest in national transportation 
infrastructure needs.
                                 ______
                                 
 Prepared Statement of the California Industry and Government Central 
                California Ozone Study (CCOS) Coalition

    Mr. Chairman and Members of the Subcommittee: On behalf of the 
California Industry and Government Central California Ozone Study 
(CCOS) Coalition, we are pleased to submit this statement for the 
record in support of our fiscal year 2004 funding request of $500,000 
from the Department of Transportation (DOT) for CCOS as part of a 
Federal match for the $9.1 million already contributed by California 
State and local agencies and the private sector.
    Most of central California does not attain federal health-based 
standards for ozone and particulate matter. The San Joaquin Valley is 
developing new State Implementation Plans (SIPs) for the federal ozone 
and particulate matter standards in the 2002 to 2004 timeframe. The San 
Francisco Bay Area has committed to update their ozone SIP in 2004 
based on new technical data. In addition, none of these areas attain 
the new federal 8-hour ozone standard. SIPs for the 8-hour standard 
will be due in the 2007 timeframe--and must include an evaluation of 
the impact of transported air pollution on downwind areas such as the 
Mountain Counties. Photochemical air quality modeling will be necessary 
to prepare SIPs that are approvable by the U.S. Environmental 
Protection Agency.
    The Central California Ozone Study (CCOS) is designed to enable 
central California to meet Clean Air Act requirements for ozone State 
Implementation Plans (SIPs) as well as advance fundamental science for 
use nationwide. The CCOS field measurement program was conducted during 
the summer of 2000 in conjunction with the California Regional 
PM10/PM2.5 Air Quality Study (CRPAQS), a major 
study of the origin, nature, and extent of excessive levels of fine 
particles in central California. CCOS includes an ozone field study, a 
deposition study, data analysis, modeling performance evaluations, and 
a retrospective look at previous SIP modeling. The CCOS study area 
extends over central and most of northern California. The goal of the 
CCOS is to better understand the nature of the ozone problem across the 
region, providing a strong scientific foundation for preparing the next 
round of State and Federal attainment plans. The study includes six 
main components:
  --Developed the design of the field study,
  --Conducted an intensive field monitoring study from June 1 to 
        September 30, 2000,
  --Developing an emission inventory to support modeling,
  --Developing and evaluating a photochemical model for the region,
  --Designing and conducting a deposition field study, and
  --Evaluating emission control strategies for upcoming ozone 
        attainment plans.
    The CCOS is directed by Policy and Technical Committees consisting 
of representatives from Federal, State and local governments, as well 
as private industry. These committees, which managed the San Joaquin 
Valley Ozone Study and are currently managing the California Regional 
Particulate Air Quality Study, are landmark examples of collaborative 
environmental management. The proven methods and established teamwork 
provide a solid foundation for CCOS. The sponsors of CCOS, representing 
state, local government and industry, have contributed approximately 
$9.1 million for the field study. The Federal government has 
contributed $3,730,000 to support some data analysis and modeling. In 
addition, CCOS sponsors are providing $2 million of in-kind support. 
The Policy Committee is seeking Federal co-funding of an additional 
$6.25 million to complete the remaining data analysis and modeling and 
for a future deposition study. California is an ideal natural 
laboratory for studies that address these issues, given the scale and 
diversity of the various ground surfaces in the region (crops, 
woodlands, forests, urban and suburban areas).
    There is a national need to address national data gaps and 
California should not bear the entire cost of addressing these gaps. 
National data gaps include issues relating to the integration of 
particulate matter and ozone control strategies. The CCOS field study 
took place concurrently with the California Regional Particulate Matter 
Study--previously jointly funded through Federal, State, local and 
private sector funds. Thus, the CCOS was timed to enable leveraging the 
efforts of the particulate matter study. Some equipment and personnel 
served dual functions to reduce the net cost. From a technical 
standpoint, carrying out both studies concurrently was a unique 
opportunity to address the integration of particulate matter and ozone 
control efforts. CCOS was also cost-effective since it builds on other 
successful efforts including the 1990 San Joaquin Valley Ozone Study. 
Federal assistance is needed to effectively address these issues.
    For fiscal year 2004, our Coalition is seeking funding of $500,000 
from DOT through highway research funds. DOT is a key stakeholder 
because Federal law requires that transportation plans be in conformity 
with SIPs. The motor vehicle emission budgets established in SIPs must 
be met and be consistent with the emissions in transportation plans. 
Billions of dollars in Federal transportation funds are at risk if 
conformity is not demonstrated for new transportation plans. As a 
result, transportation and air agencies must be collaborative partners 
on SIPs and transportation plans. SIPs and transportation plans are 
linked because motor vehicle emissions are a dominant element of SIPs 
in California as well as nationwide. Determining the emission and air 
quality impacts of motor vehicles is a major part of the CCOS effort. 
In addition, the deposition of motor vehicle emissions and the 
resulting ozone is a nationwide issue.
    Thank you very much for your consideration of our request.
                                 ______
                                 
      Prepared Statement of the American Passenger Rail Coalition

    Chairman Shelby and Members of the Subcommittee on Transportation, 
Treasury and General Government, thank you for the opportunity to 
present testimony on fiscal year 2004 appropriations for Amtrak and for 
rail safety, research and development programs under the Federal 
Railroad Administration (FRA). My name is Harriet Parcells and I am the 
Executive Director of the American Passenger Rail Coalition (APRC), a 
national association of railroad equipment suppliers and rail 
businesses.
    The American Passenger Rail Coalition (APRC) urges the Subcommittee 
to appropriate $1.812 billion for Amtrak in fiscal year 2004. This is 
the level of funding Amtrak has stated is needed to operate the 
existing national passenger rail system and to make crucial capital 
investments. Under the leadership of Amtrak President David Gunn and 
the Amtrak Board of Directors, Amtrak has been taking critical actions 
to stabilize and improve the national passenger rail network, reduce 
operating costs and bring a new candor and openness to Amtrak's 
accounting and operations. A strong Federal appropriation in fiscal 
year 2004 is essential to Amtrak's ability to continue these successful 
actions and bring the national passenger rail system into a good state 
of repair.
    A modern, reliable and efficient national passenger rail system is 
in the mobility, economic and national security interests of the 
country. In busy metropolitan corridors, intercity passenger rail 
offers a safe, cost-effective alternative to congested highways and 
airports. For citizens of rural communities, Amtrak trains provide 
dependable and affordable mobility that is frequently the only 
convenient, all-weather intercity public transportation available. 
Government investments in intercity passenger rail enhance national 
security as was demonstrated in the days and weeks following the 
terrorist attacks of September 11, 2001. Investments in rail also yield 
significant economic and environmental benefits for cities, States and 
the Nation. Public opinion polls consistently show that Americans 
across all regions of the country, income and education levels, 
strongly support Federal government investment in the national Amtrak 
system.

         AMTRAK TRAINS ARE AN ATTRACTIVE TRAVEL CHOICE FOR MANY

    Ridership on Amtrak trains rose steadily for 5 years, from fiscal 
year 1997-fiscal year 2001, and reached 23.5 million riders in fiscal 
year 2001. Over the past 18 months, a weak economy, security concerns 
by the public since the September 11th attacks and the war in Iraq and 
other factors, have adversely impacted travel on air, rail and other 
modes and the travel sector of the economy overall. The fact that 
Amtrak ridership dipped only slightly in fiscal year 2002 from the 
prior year's ridership is a good indication of the public's support and 
comfort with travel by rail. In the first 5 months of fiscal year 2003 
(October 2002-February 2003), travelers have continued to select rail 
travel for many trips. Amtrak ridership has dipped 1.5 percent 
nationwide compared to fiscal year 2002. In the West, Amtrak ridership 
has increased 4.3 percent compared to one year ago, with western 
corridor trains showing strong gains of 8 percent. California's strong 
commitment to and investments in improved passenger rail service over 
many years are paying off as growing numbers of people leave their cars 
behind and take the train to their destination. Ridership on Amtrak's 
Surfliner service that operates between San Diego and Los Angeles is up 
21 percent in the first 5 months of fiscal year 2003, compared to one 
year ago. Ridership on the state's Capitol Corridor and San Joaquin 
trains is also up, 8 percent and 5.5 percent, respectively. In March 
2003, total Amtrak ridership was up 2.3 percent over March 2002. 
Ridership gains have been helped by some travel promotions Amtrak has 
run--as have the airlines--to attract travelers who are feeling the 
pinch of a weaker economy and anxieties about the possibility of future 
terrorist acts. Thus, Amtrak passenger revenues for the first 5 months 
of fiscal year 2003 are 12 percent below revenues one year earlier.

    AMTRAK'S NEW LEADERSHIP FOCUSED ON STABILIZING THE RAIL NETWORK

    Amtrak President David Gunn and the Amtrak Board of Directors have 
been taking actions over the past year to stabilize Amtrak's finances, 
bring the passenger railroad into a good state of repair, reduce 
operating costs and bring greater transparency to Amtrak's finances. 
Under Mr. Gunn's leadership, Amtrak's management structure has been 
streamlined to reduce costs and be more efficient. Amtrak has largely 
exited the express freight business, which was losing money rather than 
generating revenues for the railroad. Amtrak has embarked upon a 
program to repair wrecked rolling stock that has been out of service. 
Nearly 10 percent of Amtrak's equipment was in need of wreck repair 
last year. As of the end of April 2003, 22 railcars will have been 
repaired to go back into service on routes around the country.

         CAPITAL FUNDING NEEDED TO ADDRESS CRITICAL INVESTMENT

    Insufficient capital funding and Amtrak's focus in recent years on 
achieving operating self-sufficiency, as mandated by Congress, resulted 
in deferral of investment in important capital projects. Amtrak's 
fiscal year 2004 request of $1.812 billion includes $1.04 billion to 
address critical capital needs. These needs include infrastructure 
investments on the Northeast Corridor that are crucial to operation of 
the high-speed Acela Express service and investments to continue to 
repair and return to service rolling stock that has been sidelined. The 
remaining $768 million is needed for operation of the national Amtrak 
system. Amtrak is pursuing a sound course and APRC urges Congress to 
provide this critical funding to enable Amtrak to make needed 
investments in the year ahead.

   FEDERAL INVESTMENTS IN TRANSPORTATION SUPPORT ECONOMIC DEVELOPMENT

    Federal investments in transportation infrastructure are vital to 
the economic productivity of states and the nation. Every billion 
dollars invested in transportation infrastructure projects generates 
approximately 42,000 jobs. These investments ripple through the 
economy, amplifying the economic benefits of the investment. 
Investments in intercity passenger rail will create new jobs, spur 
economic development and enhance the economic competitiveness of 
regions that invest in improved passenger rail service.
    The U.S. government has underinvested in passenger rail for years. 
The U.S. government invests only 1 percent of total transportation 
spending on intercity passenger rail each year. Other industrialized 
nations, with whom the United States competes in the global market, by 
contrast, invest over 20 percent of total transportation capital 
spending in rail. It is time to reverse this pattern of 
underinvestment. The returns to the Nation will be substantial.

     RAIL BENEFITS RURAL AMERICA AS WELL AS METROPOLITAN CORRIDORS

    The need for intercity passenger rail service in congested 
metropolitan corridors is clear to most policy makers. What appears to 
be less appreciated is the value intercity passenger rail service 
provides to small cities and communities across the country. Yet, 
intercity passenger rail service is vital to the economic health of 
hundreds of America's small cities and rural communities and the 
mobility of their citizens. Airlines have reduced or abandoned air 
service to many small cities, making the role of intercity passenger 
rail even more important to the mobility of citizens in these 
communities. Residents of Tuscaloosa and Anniston, AL, of Marshall and 
Gainesville, Texas, of Rugby, Minot and Devils Lake, ND and hundreds of 
other communities from coast to coast value and depend upon the 
passenger trains that connect their communities to the rest of the 
Nation.

                RAIL CONTRIBUTES TO OTHER NATIONAL GOALS

    Travel by passenger trains is energy-efficient, consuming about 38 
percent less energy (BTU's) per passenger-mile than travel by 
commercial airline. Transportation is the only sector of the U.S. 
economy that consumes more oil today than it did 20 years ago. U.S. 
dependence on imported oil has been rising and since 1997, exceeds 50 
percent of our daily petroleum use. Last year, the United States spent 
$90 billion for imported oil. Investments in improved passenger rail 
service are a sensible way to reduce the vulnerability created by the 
nation's heavy and costly dependence on imported oil. Lower energy 
consumption translates into benefits to air quality. Investments in 
passenger rail help reduce harmful air pollutants and contribute to 
state and community efforts to achieve healthy air quality.
    In conclusion, APRC urges the Subcommittee to fully fund Amtrak's 
request for $1.812 billion in fiscal year 2004 to enable Amtrak to 
continue down the path it is pursuing to improve the reliability and 
quality of passenger rail service nationwide. APRC also supports strong 
funding of rail safety and research and development programs under the 
Federal Railroad Administration.
    Thank you Chairman Shelby and Members of the Subcommittee for the 
opportunity to provide this testimony on behalf of our rail business 
association.
                                 ______
                                 
        Prepared Statement of the Railway Supply Institute, Inc.

    On behalf of the Railway Supply Institute (RSI), I offer the 
following comments on Amtrak's fiscal year 2004 appropriation request.
    RSI is a trade association that represents the domestic railway 
supply industry. Our members provide goods and services to the Nation's 
freight and passenger railroads as well as to rail rapid transit 
systems. We are a $20 billion a year industry employing some 150,000 
people nationwide.
    RSI supports Amtrak's request of $1.8 billion for fiscal year 2004 
to operate the current nationwide route structure and begin the process 
of stabilizing our nation's intercity railroad passenger system. In 
addition to allowing Amtrak to continue to operate its network of 
intercity passenger trains, that amount will allow the railroad to 
begin the task of rebuilding wrecked equipment so it can be put back 
into revenue service as well as beginning the process of rebuilding the 
Northeast Corridor infrastructure. RSI members will provide a 
significant portion of material needs for the capital projects outlined 
in the Amtrak request. This will provide a much-needed boost to an 
industry that has suffered through the recent economic downturn.
    As the Department of Transportation's Inspector General has stated 
time and again, the real problem with Amtrak is not management 
efficiency or the cost of the route system but the burden of funding 
its infrastructure. Until Congress develops a way to address these 
infrastructure costs, cutting trains or attempting to extract 
management efficiencies will not achieve the desired results. RSI 
believes David Gunn has demonstrated the ability to manage Amtrak 
effectively. He has eliminated waste, reduced management levels, cut 
costs, brought fiscal responsibility to the railroad and improved 
Amtrak's credibility.
    Amtrak's workable five-year capital investment plan is what Amtrak 
needs to become a good, solid, reliable passenger railroad. The 
railroad's strategic plan will bring Amtrak's capital assets up to a 
state of ``good repair'' and maintain current rail operations. To 
support the strategic plan, Amtrak proposes, and RSI supports, that 
annual federal funding range from $1.8 million in fiscal year 2004 to 
under $1.5 billion in fiscal year 2008 for the combined capital 
investment and operating needs.
    RSI does recognize the constraints of the appropriations process. 
In response to this, we have developed a proposal that would create a 
Rail Finance and Development Corporation (RFDC). RFDC is designed, in 
part, to supplement federal appropriations for Amtrak by supporting the 
significant infrastructure costs that Amtrak must address in the 
Northeast Corridor and other parts of the system. This supplemental 
funding source could significantly reduce the burden of the 
Appropriations Committee and allow it to use its limited resources to 
maintain basic service levels for rail passenger service. RFDC would be 
a private, non-profit, federally chartered corporation similar to 
Fannie Mae, that would issue up to $50 billion in tax-credit bonds over 
a six-year period for rail related infrastructure investments. Eligible 
investments would include higher speed intercity rail; rail access to 
ports intermodal terminals and airports; increased freight rail 
capacity; short line infrastructure needs; and rail line relocation. We 
have enclosed a white paper describing the RFDC proposal and I ask that 
this statement and the White Paper be included in the record.
    Until RFDC, or some other supplemental funding mechanism, becomes 
policy, we urge the Senate Transportation Appropriations Subcommittee 
to provide the resources Amtrak needs to survive.
    RSI looks forward to working with the Senate to create a long-term 
stable source of funding for Amtrak and our nations freight railroad 
system.
                                 ______
                                 
    Prepared Statement of the Air Traffic Control Association, Inc.

    The Air Traffic Control Association, Inc. (``ATCA''), located in 
Arlington, Virginia, USA is a professional association of forty-seven 
years' standing dedicated to advancement in the science and profession 
of air traffic control and aviation safety. Its membership is worldwide 
in scope, and represents all aspects of the air traffic control 
discipline, from air traffic control specialists and airway facilities 
technicians who operate and maintain the air traffic control system, to 
those individuals and companies who develop, manufacture and provide 
the technology, equipment, and services which support the system, to 
the citizens, government agencies, and airlines who use the system.

             INTRODUCTION: THE CHANGED AVIATION MARKETPLACE

    Immediately after September 11, 2001, most aviation experts 
predicted that the market effects of the terrorist attacks on air 
transportation would be short lived, and that conditions prevailing 
before those events--economic prosperity, increasing demand, congestion 
and delay--would recur within 18 months or so. Although temporary 
depression in air transportation demand was anticipated, the aviation 
community admittedly did not foresee the lingering, intensifying 
economic doldrums, global political instability and war to come. 
Certainly few, if any prognosticators envisioned air traffic would be 
so persistently and profoundly depressed that major airlines and 
related aviation enterprises would today be struggling for their very 
existence.
    Now, with the war against terrorism continuing and military action 
in Iraq just winding down, and health concerns heightened, the aviation 
community is becoming reconciled to the reality that sluggish air 
transportation market conditions likely will prevail for some time. 
Airlines, airports and policy makers are adjusting perspectives, plans, 
programs, and expectations to suit new financial and operational 
realities.
    First among these realities is the stressed, and in some cases 
desperate financial condition of commercial aviation. Income is down 
across the board. Fewer passengers are traveling at lower fares, 
meaning less ticket revenue for airlines and concession income for 
airports. Fewer flights and smaller capacity aircraft mean reduced tax 
and user fee income for government and private air traffic service 
providers. And with airlines, airports and air traffic service 
providers in difficulty, aviation suppliers including travel agents, 
aircraft manufacturers, aviation technology companies and airport 
construction firms are also suffering.
    To make matters worse, aviation costs have not diminished 
proportionately, but rather have remained constant or, like fuel 
prices, have increased. Airlines, air traffic service providers, and 
airports still must make payments on aircraft and other capital 
equipment, pay rent, employee wages and benefits, and meet other 
contractual obligations. Moreover, as a result of the terrorist 
attacks, airlines, airports, air traffic service providers, and 
government organizations must absorb significant additional costs of 
intensified and additional security measures. Since September 11, 2001, 
the airline industry alone reports having suffered a loss of $18 
billion; they expect 2003 losses to exceed $10 billion.
    Consequently, virtually all aircraft operators are economizing in 
every way possible, reducing or rationalizing services, deferring 
capital expenditures, renegotiating labor agreements, freezing hiring, 
laying off workers, and selling or mothballing aircraft. Many 
organizations, including major airlines, are regrouping, reforming, 
reorganizing, realigning, or disappearing entirely through merger or 
bankruptcy. Airlines are adjusting schedules, equipage, and even route 
structures in an effort to match service to demand. Some carriers are 
switching to smaller capacity aircraft and maintaining or increasing 
frequency. Others are abandoning hubs in favor of more point-to-point 
service. Many high-end and business travelers are abandoning commercial 
service altogether, instead electing to use corporate and fractional 
ownership aircraft or substituting telecommunications alternatives to 
travel.
    Air traffic service providers are doing all they can to economize 
in their own operations while continuing to provide equal or better 
service, and making system enhancements that will improve operating 
safety and efficiency. But after years of belt tightening and resource 
deprivation, there is precious little room in most air traffic service 
organizations for significant additional efficiencies. A significant 
point to recognize is that even though the benefits of ATM system and 
interfacing aircraft enhancements will outweigh the costs in the long 
run, they do not come for free, and there simply is precious little 
cash available--either in ATS provider or aircraft operator coffers--to 
invest today.
    There is another aspect of the U.S. air transportation system that 
current events should amplify--that the U.S. National Airspace System, 
in contrast to many other national systems, is a ``common'' civil-
military system. Its infrastructure and air traffic controllers support 
our National Defense and Homeland Security aircraft as well. This is 
but another reason that the ATM system must be sustained and upgraded 
to meet the challenge of a new era.

        AVIATION SAFETY AND SECURITY IS A FEDERAL RESPONSIBILITY

    Aviation--a critical segment of the Nation's GNP and, even more 
important, enabler of U.S. tourism, commerce and industry--clearly is 
on the ropes. Now is not the time to retrench and watch the Nation's 
air transportation system--jewel of U.S. ingenuity and free 
enterprise--disintegrate. Rather, the Federal government must do all it 
can to preserve and strengthen U.S. aviation, especially in these 
difficult times. To that end, the Air Traffic Control Association urges 
the following.
    First, it was necessary and appropriate for the Federal Government 
to provide financial relief to the Nation's airlines, to help them 
weather the aftermaths of the 9/11 attacks and market impacts of the 
War on Terrorism and military action in Afghanistan and Iraq. Although 
aviation was the vehicle, the 9/11 attacks were directed against the 
United States as a whole. Protecting the Nation against future 
terrorism is the Federal Government's responsibility, and the costs--be 
they for National Defense or Homeland Security purposes--should be 
borne by all Americans. Nevertheless, airline passengers, aircraft 
operators, and airports are shouldering the lion's share of the costs 
of air transportation system security--from direct fees for security, 
to aircraft and terminal modifications, to Airport and Airway Trust 
Fund expenditures for security infrastructure improvements. And this at 
a time when the entire aviation community is suffering 
disproportionately compared with other segments of the economy from the 
negative market and financial consequences of public fear and wartime 
disruptions to travel and tourism.
    Because airport and airline security is an ongoing National and 
Homeland Defense function, security fees should be discontinued 
permanently, and the costs of TSA screening activities, related 
equipment and construction instead paid for with appropriations derived 
from the general fund. To use trust fund dollars for this purpose 
unfairly assesses passengers and shippers for the costs of safety and 
security measures that benefit everyone. Protecting aircraft from 
hostile attack and takeover such as we experienced in 2001 benefits the 
aircraft operator, the passengers and crew and, no less importantly, 
people and property on the ground that could be impacted. Moreover, 
using the trust fund in this way mortgages U.S. aviation's future by 
depleting the fund without corresponding replenishment. The Association 
looks forward to the announced plan of the Transportation Security 
Administration to establish a program whereby TSA would issue Letters 
of Intent (LOI) to reimburse 75 percent-90 percent of the costs of 
federally mandated security upgrades, to be paid with appropriated 
funds.

        FAA OPERATIONS APPROPRIATION SHOULD BE ``RE-BASELINED''

    The Federal Government must rededicate itself to the mission of 
modernizing and improving airport and airway infrastructure and 
technology. Modernization will enable air carriers and other aircraft 
operators to operate efficiently as well as safely and securely during 
these difficult times, sustain the National Defense and Homeland 
Security mission, and prepare a robust, capable air transportation 
system for the future.
    The Administration is demonstrating its commitment to U.S. aviation 
by proposing to continue the FAA funding profile established by the 
Wendell H. Ford Aviation Investment and Reform Act for the 21st Century 
(AIR-21). That landmark legislation boosted Federal spending limits for 
air transportation infrastructure improvement, and established 
budgetary mechanisms to assure that appropriations matched authorized 
levels. The Administration is seeking $7.5 billion per year in fiscal 
year 2004 for FAA Operations, increasing over the authorization period 
at least at the rate of inflation. For FAA Facilities and Equipment, 
the Administration proposes $2.9 billion in fiscal year 2004, gradually 
increasing to $3.1 billion in fiscal year 2007. And the Administration 
proposes to continue the current funding level of $3.4 billion per year 
for Airport Grants. $100 million per year would be available for FAA 
Research, Engineering and Development. The Association believes that 
this request understates the real needs of the FAA. Although it 
represents the Administration's judgment of the proper apportionment of 
financial resources, we believe it does so at the sacrifice of 
activities and programs that should not be further deferred.
    The Air Traffic Control Association agrees with the Administration 
that continued robust funding for air transportation operations and 
National Airspace System improvements is a national imperative. Public 
reliance on air transportation is strong and increasing, and recent 
history shows that the occasional market dips coincident with military 
action or economic recession tend to be temporary. When conditions 
improve, the air transport market recovers rapidly. Immediately prior 
to the 9/11 terrorist attacks, aviation was experiencing unprecedented 
growth, with overcrowding and congestion clogging many major 
facilities. Current projections are that aviation markets will recover 
to pre-9/11 conditions--including congestion and delay--sometime in 
2005-2006. Even with a brief hiatus in demand, the aviation community 
will be hard pressed to progress sufficiently on needed capacity 
improvements in time to avoid a repeat of the near gridlock conditions 
prevailing during the summer of 2001. Now is not the time to hesitate 
about moving on with modernization.
    For the following reasons, therefore, the Air Traffic Control 
Association urges the Congress to take a more proactive approach to 
funding operations and modernization of the National Airspace System 
than the Administration proposes. First, the Administration's fiscal 
year 2004 funding proposal (3.2 percent increase, less than the rate of 
inflation) understates the real resource requirements of FAA's 
Operations functions. FAA's air traffic services, airway maintenance, 
and regulation and certifications organizations already are debilitated 
by years of funding deprivation. Because 95 percent of FAA's Operations 
budget is dedicated to personnel and related costs, years of rate-of-
inflation increases have barely covered the costs of mandatory pay 
increases for on-board staff and plant maintenance and have not 
addressed the backfill overtime costs associated with training 
controllers to deal with new situations and systems. Almost no money 
has been available for projects and activities necessary to prepare for 
future needs. FAA has barely begun the process of hiring and training 
significant numbers of air traffic controller and airway facilities 
technician candidates to replace the ``bubble'' of employees eligible 
and expected to retire. (The Administration is requesting $14 million 
to hire 300 controller candidates in fiscal year 2004, but because 
training a controller takes years and many ``wash out'' of the process, 
there are some who estimate that 1,000 per year is a more realistic 
hiring goal.) Schedules for installation, check out, and training of 
workers on new equipment and technologies are stretching out, delaying 
benefits until the new items can be put into service. Less than maximum 
effort can be devoted to development and certification of new 
technologies. Efforts to devise capacity, efficiency, and safety 
enhancing air traffic procedures and operating techniques are under 
resourced. And these chronic shortages are being exacerbated by 
diversion of resources to satisfy post-9/11 security activities and 
requirements. Before FAA can begin to survive on rate-of-inflation 
increases in its operations and maintenance funding the financial base 
on which these increases are calculated must be increased 
substantially. ATCA therefore urges Congress to authorize and 
appropriate Operations funding in fiscal year 2004 at least 15 percent 
over and above the Administration's $7.5 billion estimate, or $9 
billion.

               PROTECT AIR TRAFFIC SYSTEM MODERNIZATION!

    The Administration's $2.9 billion per year request for FAA 
Facilities and Equipment authorization and appropriation falls far 
short of what is required to sustain a really robust modernization and 
improvement effort. This amount is $100 million less than the amount 
enacted in fiscal year 2002, and 2 percent less than the fiscal year 
2003 requested amount. But needs for F&E dollars have increased 
significantly in since then. FAA must first of all sustain existing 
capability, which is becoming ever more costly. Although much has been 
replaced, a significant portion of equipment and software in use today 
is operating well beyond its intended service life and is therefore 
increasingly trouble prone and costly to repair or replace. Moreover, 
in the aftermath of 9/11, significantly more of this legacy equipment 
will remain in service and must be maintained indefinitely, for 
example, primary radars and geographically dispersed navigation aids 
and communications systems have renewed value and need to be retained. 
Other items, many intended to meet joint security and defense needs of 
FAA, DOD, and Homeland Defense, are being added to FAA's shopping cart. 
And F&E dollars also pay for the modernization of the Nation's air 
traffic control system. Most of these projects are well underway, 
requiring large capital outlays. Disruptions due to budget adjustments 
are very costly, both in terms of money and foregone operating 
benefits. And the F&E account also supports implementation of FAA's 
Operational Evolution Plan (OEP), a 10 year rolling blueprint for 
applying advanced technologies and other improvements to garner near 
term safety, capacity and efficiency benefits. The most recent 
iteration of the OEP covering fiscal years 2004-2013 is estimated to 
cost $12.4 billion over the ten years--up $1 billion over the fiscal 
years 2001-2010 version.
    In 1998, the FAA estimated that modernization costs alone reflected 
in Version 3.0 of the NAS Architecture would be approximately $3 
billion per year. Add to this the annual costs of sustaining and 
refurbishing equipment in use--much of which is now permanently off the 
decommissioning list, new National Defense and Homeland Security 
requirements, and the expanding price of the OEP, and it becomes clear 
that the real necessary level of FAA funding for F&E in fiscal year 
2004 and the foreseeable future is more in the order of $4 billion per 
year. This is the amount the Association urges Congress to authorize 
and appropriate.
    In addition, the Association urges the Administration and Congress 
to assure that dollars appropriated for NAS improvements are not 
diverted to other purposes. To be specific, because NAS improvement 
projects are multi-year endeavors requiring multi-year budgeting and 
financial management, annual rescission of unexpended funds wreaks 
havoc with overall planning. Often, the ``unexpended funds'' are 
associated with worthwhile projects and activities already in motion, 
and do not represent overlooked or obsolete requirements. It would be 
helpful if this practice were avoided. Or, alternatively, Congress 
might consider instituting a mechanism that increases the bottom line 
appropriation that compensates for earmarks rather than, as presently 
occurs, broader based activities or programs being decreased. Second, 
FAA prioritizes projects and activities with the objective of achieving 
the best result for the entire air transportation system. Although 
legislators understandably are concerned about aviation issues in their 
home districts, resisting the temptation to earmark F&E funds for 
specific local projects would greatly benefit the entire system. Third, 
other aviation priorities such as the Essential Air Service Program 
should be funded through the regular budget process, not through 
diversion of FAA F&E dollars intended for NAS modernization. Each year 
hundreds of millions of FAA F&E dollars redirected through these budget 
procedures--dollars that otherwise would have been applied to improving 
the safety, capacity and efficiency of the NAS.

                THE PROBLEM OF ASYNCHRONOUS IMPROVEMENTS

    The promise of air traffic system modernization will not be 
realized, regardless of the sufficiency of funding, without 
corresponding upgrade of aircraft technologies that interface with the 
ATC system. At a recent Air Traffic Control Association symposium, one 
speaker estimated that the cost of equipping each commercial aircraft 
to take advantage of new ATC technologies and procedures is 
approximately $465,000. Avionics for business and general aviation 
aircraft are correspondingly expensive. Much of this equipage expense 
will be offset by the value to the aircraft operator of efficiencies 
and flexibility derived from the new systems (e.g. fuel and time 
savings from more direct routings, less holding, reduced delays, more 
operationally efficient altitudes.) FAA as the air traffic service 
provider also will derive safety, efficiency and capacity benefits from 
implementation of modern systems, for example reduced separation 
between aircraft thereby increasing airspace capacity, or preventing 
collisions and improving traffic flow on the airport surface.
    But no one will enjoy the maximum payback from modernization unless 
ATC improvements and aircraft upgrades take place contemporaneously, 
and all aircraft in given airspace are comparably equipped. If new ATC 
system implementation lags behind aircraft equipage, operators will 
have made an investment with no immediate payback. If the ATC system is 
equipped without corresponding aircraft capability, neither the users 
nor FAA will derive full benefits. And if ATC improvements are made but 
only some aircraft are equipped for the new environment, airspace must 
be segregated to allow those who are equipped to derive benefits while 
still permitting those not so capable to continue operating and the 
underlying infrastructure must support both.
    Universal aircraft equipage can be achieved in three ways. First, 
aircraft operators may be encouraged to equip voluntarily if the 
operating benefits are sufficient to outweigh the cost. Second, 
disincentives may be imposed on operators that fail to equip. For 
example, they may be foreclosed entirely from some environments, 
subjected to less optimal operating conditions (e.g. sub-optimal 
routings, non-preferred altitude), or charged higher fees or taxes. A 
third alternative is for the Government to mandate minimum equipage for 
everyone.
    The first option--voluntary compliance--benefits everyone. But 
there are situations in which the cost/benefit ratio of a given 
improvement is positive for the entire system, yet negative for a 
specific aircraft or fleet. In that case, a rational operator may well 
choose not to invest. And cash poor operators--and today many of the 
Nation's largest air carriers are in this category--may simply be 
unable to invest in improved aircraft systems regardless of the 
potential compensating benefits. Using the second option--operating 
restrictions--to coerce compliance is not a good choice because such 
mechanisms work by degrading the operating environment for those less 
advantaged, increasing their costs and as a result perpetuating the 
disparity. Moreover, selective restrictions tend to disadvantage those 
who are least able to afford it, e.g. smaller commercial operators 
providing service to remote and underserved localities, and general 
aviation.
    The third option, Government mandate, is the only 100 percent 
effective approach. But in the current economic environment, with the 
equivalent of one-third the U.S. commercial airline fleet in mothballs 
and one quarter of commercial airline capacity operating in bankruptcy, 
a mandate to equip with expensive new avionics could precipitate or 
accelerate liquidation of major aviation companies. For reasons stated 
previously in connection with aid to financially distressed airlines, 
the Air Traffic Control Association urges the Administration and 
Congress to consider making updated aircraft avionics an integral part 
of federally funded NAS modernization projects. This approach assures 
that necessary technologies will reliably be deployed congruent with 
corresponding new FAA systems. And in this way, safety and operating 
efficiency of the National air transportation system will be maximized 
without risking widespread collapse of the aviation industry. We also 
would ask that Members of transportation authorizing and appropriations 
committees collaborate with their colleagues to enact legislation that 
would enable corresponding equipage of military, homeland security and 
government aircraft.

                     AIRPORTS FUNDING NEEDS A BOOST

    The Administration proposes to continue into the future the current 
AIR-21 annual amount of $3.4 billion for Airport Grants. This level of 
support should be increased.
    The Airports Council International--North America estimates that 
the actual average annual cost of airport capital development for the 
years 2003-2006 has grown to $15 billion. Although Federal AIP is not 
intended to pay all the capital costs of airport improvements, since 
2000 when AIR-21 was enacted, and especially since the events of 9/11, 
airport need for federal funding has increased significantly. On the 
one hand, because airport revenues are largely tied to traffic levels, 
income is down drastically since the terrorist attacks and initiation 
of military action in Afghanistan and Iraq. On the other hand, costs 
are way up. Approximately two-thirds of airport capital spending is for 
new runways and other facilities to accommodate future growth. Most of 
this work already is underway, and contract requirements including 
schedules of expenditures are firm. The other one third is used to 
preserve existing infrastructure and maintain compliance with 
standards--also non-discretionary expenditure. Neither of these 
categories of expenses fluctuates downward with traffic counts. 
Meanwhile, airports are facing significant new security costs such as 
terminal modifications to accommodate large baggage screening machines, 
stepped up grounds and terminal security including more personnel, and 
enhanced access system technology. And, we foresee that increasing 
reliance on point-to-point versus connecting passenger service will 
accelerate the need for improvements at airports heretofore not 
anticipating significant growth. If Federal funding is continued only 
at the AIR-21 level, the national system of airports will continue to 
fall behind the power curve. To support recovery of the air transport 
industry, the Federal Government must significantly increase--not 
merely continue--its contribution toward expansion and improvement of 
the Nation's airports.

                AVIATION RESEARCH MUST BE REINVIGORATED

    Fourth, and perhaps most important for the future of U.S. aviation, 
the level of effort of FAA RE&D must be increased four- to five-fold--
that is, $400 to $500 million per year.
    The Administration proposes a funding amount of $100 million for 
this function. This is $25 million less than the fiscal year 2003 
enacted amount, and one half the amount approved in fiscal year 2002. 
This funding trend reflects an alarming deterioration in commitment of 
the Federal Government to maintaining the United States on the global 
forefront of aviation and aeronautical science and industry. The 
Administration's fiscal year 2004 proposal is paltry by any standard, 
and if approved as requested will sound the death knell for any notion 
of an independent FAA R&D capability related to air traffic control. 
(ATC efficiency research is ``zeroed out'' in the fiscal year 2004 
proposal.) In today's ``bottom line'' business environment, and 
especially with the economy in recession, private industry cannot be 
counted on to fill the void.
    If the United States is going to continue being the world leader in 
aviation and aerospace technology, it is long past time to renew the 
Nation's financial commitment to the government-sponsored research 
programs needed to make that happen. This means multiplying by four or 
five times the amount of money now going each year to FAA RE&D. It also 
means generously supporting all manner of research being conducted by 
NASA as well. Although NASA's activities cannot substitute for a 
vigorous, well-funded FAA RE&D capability, in some areas of research it 
offers expertise and research resources that increasingly complement 
those of FAA and support FAA's mission and objectives. However, the 
breadth of appropriate FAA RE&D goes well beyond NASA and DOD's 
interests, and should not be dismissed.

      DEVELOPING A VISION OF THE FUTURE AIR TRANSPORTATION SYSTEM

    Important for the future will be a Government-wide, interagency 
activity to coordinate aviation and aerospace requirements both 
existing and for the future, define research needs and applications for 
the next generation air traffic management system, and assemble a 
unified budget report covering all aviation system funding needs. 
Government-wide planning will allow various organizations to share 
knowledge and facilities, avoid duplication of effort, and leverage 
resources through joint and cooperative activities. The Department of 
Transportation should lead the coordination activity, with the 
Departments of Defense, Commerce, and Homeland Security, and FAA and 
NASA participating. As part of this effort, FAA should undertake to 
define the next generation air traffic management plan for the United 
States, with involvement of all private sector aviation stakeholders, 
members of the public, and government agencies with relevant missions.
    Senate bill S. 788, the ``Second Century of Flight Act'', sponsored 
by Senators Hollings, Brownback, Rockefeller, Inouye, Cantwell and 
Kerry provides an excellent framework for just such a Government-wide 
collaboration to enable the United States to maintain its leadership in 
aeronautics and aviation. The bill would establish and fund in DOT an 
``Office of Aerospace and Aviation Liaison'' to lead the interagency 
coordination activity, and create in the FAA a ``National Air Traffic 
Management System Development Office'' responsible for developing a 
next generation air traffic system plan for the United States in 
collaboration with other organizations having an aviation mission. S. 
788 also would authorize for FAA RE&D expenditures $289 million in 
fiscal year 2004, $304 million in fiscal year 2005, and $317 million in 
fiscal year 2006. These amounts are less than ATCA advocates, but a 
good start nonetheless. The Air Traffic Control Association supports 
the principles stated in S. 788, and urges Congress to enact the 
legislation.

                               CONCLUSION

    Terrorism, war, and economic uncertainty have exacted a significant 
toll on air transportation enterprises around the world, especially in 
the United States where air carrier aircraft were hijacked to be the 
instruments of attack. Among sectors of the Nation's economy, aviation 
has paid more than its share of the price of those sad events. The 
lasting financial and market impacts are presenting a serious challenge 
for the United States in maintaining a leadership role in air 
transportation and aerospace technology, working together with other 
nations to achieve a safe, secure, efficient, capable, seamless global 
air transportation system. With the full support of the Administration 
and Congress, however, the United States can retain rather than 
relinquish its stature in the world aviation community, and continue to 
apply the fruits of its efforts in partnership with other nations 
toward the betterment of air transportation around the world.
    To that end, the Air Traffic Control Association urges Congress to 
assure a robust and reliable funding stream for operations, 
maintenance, and modernization of the National Airspace System, and to 
initiate under the leadership of the Department of Transportation and 
fully fund a government-wide Federal aviation and aerospace research 
and development capability to support the air traffic management system 
envisioned for the future. Together we must prepare for the future, 
rather than react to the past.
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