[Senate Hearing 110-]
[From the U.S. Government Publishing Office]



 
  DEPARTMENT OF TRANSPORTATION AND HOUSING AND URBAN DEVELOPMENT, AND 
          RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2008

                              ----------                              

                                       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 and Housing and Urban 
Development, and Related Agencies for inclusion in the record. 
The submitted materials relate to the fiscal year 2008 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 Mortgage Brokers
    Chairwoman Murray, Senator Bond and members of the subcommittee, 
thank you for permitting the National Association of Mortgage Brokers 
(``NAMB'') to submit this written testimony on Solvency and Reform 
Proposals for the Federal Housing Administration (``FHA''). In 
particular, we appreciate the opportunity to address: (1) the need to 
reform the FHA program to eliminate arbitrary and unnecessary barriers 
that restrict mortgage broker participation; (2) the positive effects 
on FHA's market share and profitability that will result from increased 
mortgage broker participation; (3) the need to develop risk-based 
pricing for mortgage insurance on FHA loans; and (4) the importance of 
adjusting the current FHA loan amounts for high-cost areas.
    NAMB is the only national trade association exclusively devoted to 
representing the mortgage brokerage industry, and as the voice of the 
mortgage brokers, NAMB speaks on behalf of more than 25,000 members in 
all 50 States and the District of Columbia.
            fha market share & mortgage broker participation
    NAMB supports many of the proposed reforms to the FHA program, but 
believes we should first make certain that the FHA program is a real 
choice for prospective borrowers. Regardless of how beneficial a loan 
product may be, it requires an effective distribution channel to 
deliver it to the marketplace. The need to make the FHA loan product a 
viable option is even more acute today given recent developments in the 
subprime market, which is likely to lead to less liquidity and 
increased costs. Unfortunately, today many prospective borrowers are 
being denied access to the benefits of the FHA program because mortgage 
brokers--the most widely used distribution channel in the mortgage 
industry--are limited in their ability to offer FHA loan products to 
their customers.
    As a prerequisite to originating FHA loans, mortgage brokers 
currently are required to satisfy cost prohibitive and time consuming 
annual audit and net worth requirements. These requirements place 
serious impediments in the origination process, and functionally bar 
mortgage brokers from delivering FHA loans into the marketplace.
    As small businesses men and women, most mortgage brokers find the 
costs involved with producing audited financial statements an 
unbearable burden. FHA audits must meet government accounting standards 
and only a small percentage of certified public accountants (``CPAs'') 
are qualified to conduct these audits. Moreover, because many auditors 
do not find it feasible to audit such small entities to government 
standards, many qualified CPA firms are reluctant to audit mortgage 
brokers. Cost however, is not the only factor. A mortgage broker can 
also lose valuable time--up to several weeks--preparing for and 
assisting in the audit process.
    The net worth requirement for mortgage brokers is also limited to 
liquid assets because equipment and fixtures depreciate rapidly and 
loans to corporate officers and goodwill are not permitted to be 
included as assets. To compound this, a broker who greatly exceeds the 
net worth requirement is forced to keep cash or equivalents of 20 
percent of their net worth up to $100,000. Because the net worth for 
brokers usually needs to be in cash, it tends to destabilize a small 
business by robbing it of needed operating funds. This makes the net 
worth requirement of little value for indemnification because a company 
in trouble can easily dissipate its net worth. Additionally, there is 
no evidence to demonstrate that loans originated by high net worth 
originators perform better than those with a lower net worth.
    Because of the burdens imposed by the current financial audit and 
net worth requirements, many mortgage brokers do not engage in the FHA 
program. In this regard, the impediments stated herein have actually 
served to limit the utility and effectiveness of the FHA program and 
seriously restrict the range of choice available for prospective 
borrowers who can afford only a small down payment. At a minimum, NAMB 
believes annual bonding requirements offer a better way to ensure the 
safety and soundness of the FHA program than requiring originators to 
submit audited financial statements.
    Moreover, annual audit and net worth requirements are unnecessary. 
Today, mortgage brokers participate in the FHA program typically 
through a large lender. Replacing net worth and audit requirements with 
a surety bond will not change the framework set to ensure 
responsibility and accountability, it will simply encourage brokers to 
participate thereby increasing the amount of FHA loans offered. The 
larger FHA-approved lenders will continue to submit to the standards 
deemed necessary by FHA (i.e. audits, net worth etc.) before being 
approved to offer FHA loans through retail or wholesale channels. This 
affords the U.S. Department of Housing & Urban Development's (``HUD'') 
adequate protection against loss to the FHA program. Brokers who choose 
to offer FHA loan products will also continue to be governed by 
contract agreements with these respective FHA-approved lenders. 
Additionally, brokers who participate in the FHA-program will remain 
state-licensed entities subject to any state bond requirements, 
criminal background checks and education requirements in addition to 
any FHA-required surety bond. This, in effect, creates a dual-layer of 
protection for both the FHA program and the consumer. Last, the process 
of obtaining a surety bond itself involves stringent standards and 
review. Surety companies pre-qualify their customers to determine 
whether they are financially sound and have the baseline to conduct 
their business, i.e. ability to pay out upon a loss, before issuing a 
surety bond.
    A stated objective of the FHA is to increase origination of FHA 
loan products and expand homeownership opportunities for first-time, 
minority and low to moderate-income families. NAMB supports increased 
access to FHA loans so that prospective borrowers who have blemished 
credit histories, or who can afford only minimal down payments, have 
increased choice of affordable loan products. These prospective 
borrowers should not be forced by default into the subprime market. A 
recent Inside Mortgage Finance publication estimated the current FHA 
market share at 2.7 percent.\1\ NAMB believes the solution to 
increasing FHA loan origination and market share is increasing the 
number of origination sources responsible for delivering FHA loan 
products directly to consumers. Today, the most effective and efficient 
origination source is through mortgage brokers.
---------------------------------------------------------------------------
    \1\ See Inside Mortgage Finance, Mortgage Originations by Product, 
p.7 (March 2, 2007).
---------------------------------------------------------------------------
    Mortgage brokers originate over 50 percent of all home loans, yet 
brokers are responsible for just 10 percent of FHA's origination 
volume, or .27 percent of all home loans. This is due, in large part, 
to the fact that mortgage brokers are discouraged from participating in 
the FHA program by the unnecessarily burdensome financial audit and net 
worth requirements. These requirements erect a formidable barrier and 
prevent a significant majority of mortgage brokers from participating 
in the program.
    NAMB estimates that less than 18 percent of all mortgage brokers 
are approved to originate FHA loans under the current requirements; 
however, recent NAMB surveys indicate that roughly 80 percent of ``non-
participating'' mortgage brokers would offer FHA loans to their 
customers if there were no financial audit or net worth requirement. 
NAMB predicts that such a change would increase mortgage broker 
participation in the FHA program from 18 percent to roughly 85 percent. 
This, in turn, would increase FHA's loan origination volume and market 
share by nearly 40 percent.
    For example, in 2006, FHA's origination volume was roughly $80 
billion.\1\ All things being equal, the 67 percent increase in broker 
participation would increase FHA's origination volume to nearly $112 
billion, and FHA's total market share from 2.7 percent to 3.78 percent. 
This increase of $32 billion and 1.08 percent total market share will 
be directly tied to an increase in mortgage broker participation in the 
FHA program.
                        fha risk-based premiums
    The ability to match borrower characteristics with an appropriate 
mortgage insurance premium has been recognized as essential by every 
private mortgage insurer (``PMI''). PMI companies have established 
levels of credit quality, loan-to-value, and protection coverage to aid 
in this matching process. These companies also offer various programs 
that allow for upfront mortgage insurance premiums, monthly premiums, 
or combinations of both. This flexibility has enabled lenders to make 
conventional loans that are either not allowable under FHA or present a 
risk level that is currently unacceptable to FHA.
    FHA is essentially a government mortgage insurance provider. Where 
FHA mortgage insurance is not available, PMI companies are free to 
increase premiums without fear of losing market share to a more 
competitively priced FHA loan product. FHA should be permitted to 
balance risk with premiums charged in order to increase competition and 
ultimately drive down costs for consumers. Since FHA is not required to 
make a suitable profit or demonstrate market growth to shareholders, it 
is likely that FHA can afford to assume greater risk levels than PMI 
companies can currently absorb. This increased capacity to assume and 
manage risk will allow FHA to not only serve borrowers who presently do 
not have PMI available as a choice, but also those borrowers whose 
premiums will be reduced because of the increased competition in the 
market.
                fha mortgage amounts in high-cost areas
    In an environment of rising interest rates, many first-time, 
minority, and low to moderate-income homebuyers need the safer and 
less-expensive financing options that the FHA program can provide. For 
this reason, NAMB uniformly and unequivocally supports increasing FHA 
loan limits in high-cost areas. The benefits of the FHA program should 
be available equally to all taxpayers; especially those residing in 
high-cost areas, where borrowers are most often in need of affordable 
mortgage financing options.
    Congress must act to ensure that FHA loan programs continue to 
serve as a permanent backstop for all first-time homebuyer programs. We 
believe that Congress should allow for FHA loan limits to be adjusted 
up to 100 percent of the median home price, thereby establishing a 
logical loan limit that will benefit both the housing industry and 
consumers. Tying the FHA loan limit to the median home price for an 
individual county, and letting it float with the housing market, allows 
the FHA loan limits to respond to changes in home prices instead of an 
esoteric number derived from a complicated formula. In this fashion, 
the FHA loan limit will reflect a true home market economy.
                             future of fha
    Changes must be made to the FHA program to sustain its viability 
and to fulfill its stated objective of increasing origination of FHA 
loan products and expanding homeownership opportunities for first-time, 
minority, and low and moderate-income families. Without substantial 
reform of the FHA program, PMI will continue to dominate the low down 
payment market with little competition, while the sub-prime mortgage 
market will meet the needs of those who are unable to obtain PMI 
insurance. Minority families and first-time homebuyers will find 
themselves underserved or even shut out of the housing market entirely. 
For this reason, NAMB also supports the ability of the FHA to control 
minimum borrower contribution to correspond to the levels deemed 
acceptable by the government-sponsored enterprises. Furthermore, it is 
possible that FHA's pool of loans will grow too small to effectively 
manage risk, and FHA could ultimately be unable to fulfill its function 
of being a helping hand for those who need it the most. The ripple 
effects could easily extend to the homebuilding industry and even to 
the economy at large.
    Congress has the opportunity to revitalize the FHA program by 
increasing its profitability and ensuring that borrowers across the 
country have an equal opportunity to obtain a better loan at a lower 
interest rate.
    NAMB appreciates this opportunity to offer our perspective on 
``Solvency and Reform Proposals for the Federal Housing 
Administration.''
                                 ______
                                 
Prepared Statement of the American Association of Service Coordinators 
                                 (AASC)
    The American Association of Service Coordinators (AASC) urges the 
subcommittee to support the staffing of service coordinators in 
federally assisted and public housing, as part of the Transportation, 
HUD, and Related Agencies fiscal year 2008 Appropriations bill. AASC, a 
national nonprofit organization based in Columbus, Ohio, represents 
over 1,900 service coordinators and other housing professionals who 
serve low-income frail elderly, persons with disabilities, and families 
seeking self-sufficiency residing in public and federally assisted 
housing.
    We understand that the committee and Congress face difficult 
choices with tight funding constraints. We are grateful for the 
leadership of this committee in the establishment and funding of 
service coordinators; and would urge your support for the full funding 
of service coordinators as a cost-effective investment. Service 
Coordinators not only give consumer choices, but also saves public 
funds by promoting economic self-sufficiency for low-income families 
and options for the delay or avoidance of elderly individuals moving 
into more costly settings, such as nursing homes.
    Service coordinators have helped thousands of low-income elderly 
and persons with disabilities with their health and supportive service 
needs, allowing them to remain in their home while avoiding premature 
institutionalization. The concern for many persons is that the 
fragmentation, lack of awareness, and complexities of essential 
services available in the community, have hindered timely access. 
Without the benefit of well-trained service coordinators, many 
vulnerable persons have been forced to move to more costly settings. 
Service coordinators are increasingly recognized as a vital lynchpin in 
linking older persons with essential community services. They provide 
assistance allowing many families in public housing or using Housing 
Choice Vouchers to become more economically independent through 
employment and homeownership.
    Service coordinators in federally assisted housing are funded 
primarily through national competitive grants through the section 202 
program; through use of residual receipts; or incorporated into the 
project's operating budget. For public housing, service coordinators 
have been funded through competitive grants of the Resident 
Opportunities and Self-Sufficiency program (ROSS), the Housing Choice 
Vouchers Family Self-Sufficiency (HCV-FSS) program; or through PHA 
Operating Funds.
    Yet, despite the critical need and cost-effectiveness of service 
coordinators in assisting frail elderly and others who seek to remain 
in their home or low-income families seeking to become more self-
sufficient, funding for service coordinators remains very limited. 
While the administration's fiscal year 2008 budget provides a slight 
increase for service coordinators in section 202 and other federally 
assisted senior housing, but it significantly cuts funds for service 
coordinators assisting elderly and families residing in public housing. 
AASC would urge the committee's support for the following:
  --$100 million in fiscal year 2008 for service coordinators in 
        federally assisted housing, particularly to ensure adequate 
        funds for expiring contracts of existing service coordinators;
  --Full funding for Section 8, Project Rental Assistance Contracts 
        (PRAC), other rent subsidies and project operating funds to 
        permit the staffing of a service coordinator as a routine part 
        of the project's operating budget;
  --A separate add-on of $75 million in Public Housing Operating Funds 
        for service coordinators; and
  --$55 million for the Resident Opportunities for Self-Sufficiency 
        (ROSS) program; and $85 million for the Housing Choice Voucher 
        Family Self-Sufficiency program.
                federally assisted housing--$100 million
    The administration's fiscal year 2008 budget requests $71 million 
for service coordinators, a moderate increase over the $59.4 million 
requested in fiscal year 2007 and the $51.6 million provided in the 
fiscal year 2007 Continuing Resolution (H.J. Res. 20). Of this amount, 
only $10 million was provided in the HUD fiscal year 2007 SuperNOFA to 
expand the number of service coordinators to projects that currently do 
not have them. Most of the funds are necessary to extend the expiring 
contracts of existing service coordinators. While the initial 
competitive grants for service coordinators is for 3 years, extensions 
cover only 1 year. There is a potential of losing existing service 
coordinator positions if the administration's proposed budget is not 
increased. For the first time since Congress established the service 
coordinator program in 1990, there would be no additional funds 
available to hire new service coordinators. Currently, many federally 
assisted and public housing facilities do not have sufficient resources 
in their operating budgets to hire service coordinators; or due to 
limited funding, need to share service coordinators between several 
facilities, thus stretching their effectiveness. Additionally, some 
projects that need service coordinators, such as section 515 rural 
housing or Low-Income Housing Tax Credits, are currently ineligible to 
compete for service coordinator funds.
    AASC would recommend funding the service coordinator program for 
federally assisted housing at $100 million in order to ensure renewal 
of existing contracts, as well as to fund service coordinators in 
federally assisted housing for elderly or persons with disabilities 
that currently do not have them. There is a need for a dual strategy 
for funding service coordinators that includes maintaining the service 
coordinator grant program, as well as routinely staffing service 
coordinators within the facility's operating budget. While statutory 
authority exists to allow HUD to fund coordinators, many senior housing 
facilities have not been able to secure the necessary rent adjustments 
to accommodate them. AASC would recommend that sufficient Section 8, 
PRAC, or other operating funds be increased to allow routine staffing 
of service coordinators, as well as to direct HUD and their field 
offices to provide necessary budget adjustments and regulatory relief 
to remove any barriers restricting the staffing of service coordinators 
though the project's operating budget.
           public housing: operating funds, ross and hcv/fss
    Residents of public housing and those using Housing Choice Vouchers 
have been denied full access to the valuable assistance that service 
coordinators can provide. Over one-third of residents in public housing 
are elderly residing in various settings such as senior housing, family 
housing, mixed-population housing with younger persons with physical 
and mental disabilities. Funding for service coordinators in public 
housing is very limited, complex, and has experienced a steady 
reduction in funds over the past few years.
    A number of local housing authorities have funded service 
coordinators though competitive short-term grant programs, such as 
those under the Resident Opportunities and Self-Sufficiency (ROSS) 
program. Unfortunately, over the past few years, there have been 
funding cuts and a lack of program consistency. For example, the 
Elderly and Persons with Disabilities Service Coordinator program 
(EDSC) funded at over $15 million, was initially a part of the ROSS 
program. In fiscal year 2004, it was shifted to the Public Housing 
Operating Fund with no additional funding provided. HUD specified that 
only those public housing authorities that had received EDSC funds in 
1995 were eligible for extension and that no new service coordinators 
would be funded. The existing EDSC coordinators need to compete with 
other critical operating budget priorities; and are subjected to the 
same proportional cuts with Public Housing Operating Funds. Because of 
funding cuts in their operating budgets and other competing needs, a 
number of public housing authorities have been forced to lay off or 
reduce their service coordinator program. This action, while necessary 
by local housing authorities given their funding limitations, is 
counter-productive for broader Federal long-term care policies that 
seek to allow frail elderly and persons with disabilities more 
independence while avoiding premature admission to more costly care.
    AASC commends this committee for acknowledging in the fiscal year 
2007 appropriations for public housing that operating funds covered 
only 76 percent of operating budget needs; and with the committee's 
action this year to provide additional funds in the final fiscal year 
2007 Continuing Resolution for Public Housing Operating Funds. However, 
the projected shortfall for public housing operating funds this year is 
$1 billion. For fiscal year 2008, public housing service coordinators 
must be included in the PHA plan. Therefore, it is necessary to ensure 
that there are adequate funds available in the fiscal year 2008 Public 
Housing Operating funds to accommodate service coordinators. AASC would 
urge that $85 million be provided as a separate add-on to Public 
Housing Operating Funds to ensure they can include service coordinators 
within their operating budget as part of routine staffing.
    resident opportunities and self sufficiency (ross)--$55 million
    The Resident Opportunities and Self Sufficiency (ROSS) program 
provides grants to public housing agencies, tribal housing entities, 
resident associations, and nonprofit organizations for the delivery and 
coordination of supportive services and other activities designed to 
help public and Indian housing residents attain economic and housing 
self-sufficiency. There are several separate programs within the ROSS 
program that were appropriated at $38 million in fiscal year 2007, 
assuming some fiscal year 2006 carry-over funds. These include: (1) 
Family and Homeownership ($30 million in fiscal year 2007 NOFA) that 
links residents with services such as job training, and educational 
opportunities to facilitate economic and housing self-sufficiency; (2) 
Elderly and Persons with Disabilities ($20 million in fiscal year 2007 
NOFA) that funds service coordinators and supportive services to assist 
elderly and persons with disabilities residing in public housing; and 
(3) Public Housing Family Self-Sufficiency ($12 million in fiscal year 
2007 NOFA) promotes participating public housing families to increase 
their earned income, reduce or eliminate the need for welfare 
assistance, and to make progress toward achieving economic independence 
and housing self-sufficiency.
    Prior to fiscal year 2004, PH/FSS was funded out of the public 
housing operating fund. However, with the switch to ROSS and technical 
problems encountered by a number of housing authorities with the NOFA, 
a number of service coordinators and PH/FSS programs were cut. Despite 
the demonstrated need and effective results, the administration's 
fiscal year 2008 budget seeks no funding for these three ROSS programs, 
and no additional funds for Neighborhood Networks (listed within ROSS 
that had received approximately $15 million over the past few years). 
AASC would urge that ROSS be funded at $55 million, as it had been 
prior to fiscal year 2005.
 housing choice voucher/family self-sufficiency (hcv/fss)--$85 million
    The HCV/FSS program enables participants in the Section 8 Housing 
Choice Voucher program to increase their earned income, reduce or 
eliminate their need for welfare assistance, and promote their economic 
independence. Funds are used to provide for FSS program coordinators to 
link participants with supportive services they need to achieve self-
sufficiency; and to develop 5-year self-sufficiency plans. In fiscal 
year 2004, HUD made major changes in the procedure to distribute HCV/
FSS funds that led to a reduction of nearly one-third (256 of the 771 
HAs) and shifted funds to HAs that had not previously been funded in 
the HCV/FSS program. The fiscal year 2007 appropriation for HVC/FSS was 
for $47 million compared to $72 million in the administration's fiscal 
year 2004 budget request. AASC urges for fiscal year 2008 an increase 
in HCV/FSS funding to $85 million in order to restore those HAs cut in 
fiscal year 2004 and to expand the number of FSS participants. In 
addition, we support administrative changes for up-front funding of 
escrow accounts, and to streamline the staffing of service coordinators 
to enable 1 coordinator per 25 FSS participants.
           collaboration between hud, hhs and other agencies
    Given the strong relationship between suitable and affordable 
housing with timely access to supportive services and health care 
needed by older residents, low income families and others, it is vital 
that there be effective collaboration between HUD, HHS, and other 
Federal agencies serving these populations. Policies, programs and 
funding requirements in one agency can contribute (or be counter 
productive) to consumer preferences and public savings in another 
Federal agency, including linking services with housing and mixed-
financing developments (tax credits administered by IRS and States with 
various HUD programs). Last year, the Senate passed S. 705 to establish 
an Interagency Council on Housing and Service for the Elderly that was 
modified by the House and enacted (Public Law 109-365, section 203 of 
the Older Americans Act) as an Interagency Coordinating Committee on 
Aging within HHS. AASC would urge that the committee give directives to 
HHS for the prompt establishment of this interagency committee; and 
direct HUD, HHS and other Federal agencies to develop means to promote 
collaboration with their respective programs and policies involving 
affordable housing and services to assist the elderly, low income 
families and persons with disabilities residing in public and federally 
assisted housing. Thank you for your consideration.

                                                                              FEDERALLY ASSISTED AND PUBLIC HOUSING
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                       Fiscal Year 2004             Fiscal Year 2005                           Fiscal Year 2006                         Fiscal Year 2007 Cont
                                    ------------------------------------------------------------------------------------------------------------------------------------------------ Fiscal Year
                                       Budget     Appro      Budget     Appro       Awards      Budget   Appro \10\       NOFA          Awards      Budget     Res \11\   NOFA \13\  2008 Budget
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Federally Assisted SC/CHSP.........    $40 mil    $30 mil    $53 mil    $50 mil    $15.5 mil    $53 mil   $51.6 mil       $51.6 mil    \1\ $12.1  $59.4 mil    $51.6 mil  $51.6 mil      $71 mil
                                                                                                                                             mil
PHA CAPITAL FUND...................    2.6 bil    2.7 bil   2.76 bil    2.6 bil          n/a    2.3 bil    2.43 bil             n/a          n/a   2.17 bil     2.43 bil  .........   $2.024 bil
                                    ============================================================================================================================================================
ROSS total \2\.....................     40 mil     55 mil     55 mil     53 mil     \3\ 49.5     24 mil      38 mil          38 mil  ...........   23.8 mil       38 mil  .........  ...........
                                                                                         mil                             (+$34 mil)
    Family and Homeownership.......  .........  .........  .........  .........     27.8 mil  .........  ..........          18 mil    29.46 mil  .........  ...........     30 mil  ...........
                                                                                                                         (+$25 mil)
    Homeownership Sup. Services....  .........  .........  .........  .........      3.1 mil  .........  ..........  ..............      ( \4\ )  .........  ...........  .........  ...........
    Elderly/Persons with             .........  .........  .........  .........      9.5 mil  .........  ..........          10 mil     \5\ 8.79  .........  ...........     20 mil  ...........
     Disabilities..................                                                                                       (+$6 mil)          mil
    PH/FSS Coordinators............  .........  .........  .........  .........      9.1 mil  .........  ..........          10 mil     \6\ 9.67  .........  ...........     12 mil  ...........
                                                                                                                          (+$3 mil)          mil
                                    ============================================================================================================================================================
PH Neighborhood Networks...........     15 mil     15 mil  .........     15 mil     13.8 mil  .........     7.5 mil  7.5 mil (+$9.5   \7\ $13.73  .........  ...........  .........  ...........
                                                                                                                               mil)          mil
PHA OPERATING FUND: Elderly/           3.6 bil   3.59 bil    3.6 bil    2.4 bil          n/a    3.4 bil    3.56 bil             n/a          n/a   3.56 bil    \12\ 3.86  .........      4.0 bil
 Disabled SC \8\...................                                                                                                                                  bil
HCV/FSS Coordinators...............     72 mil     48 mil     48 mil     46 mil     45.5 mil     55 mil      48 mil          47 mil    \9\ 47.49     48 mil     47.5 mil     47 mil       48 mil
                                                                                                                                             mil
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Funded through the section 202 program; most fiscal year 2006 NOFA funds used to extend existing contracts.
\2\ ROSS (Resident Opportunity and Self Sufficiency) moved from CDBG to PHA Capital fund in 2004, includes 4-5 separate programs.
\3\ Additional funds awarded in fiscal year 2005 based on appeals.
\4\ Fiscal year 2006 ROSS NOFA merges Family and Homeownership Support Services programs and $25 mil carryover funds; HUD awards announced Feb. 23,2007.
\5\ Formerly Resident Services Delivery Model changed in fiscal year 2006 NOFA to Elderly/Persons with Disabilities and includes $6 mil carryover funds; HUD awards announced Jan. 18, 2007 to
  32 PHAs.
\6\1A Public Housing Family Self Sufficiency (PH/FSS) moved from PH Operating Fund to ROSS in fiscal year 2004; fiscal year 2006 NOFA includes $3 mil carryover funds; HUD announced Dec. 20,
  2006 to 173 PHAs.
\7\1AFunded as separate line item fiscal year 2004-fiscal year 2006 in PHA Capital Fund; moved to ROSS as a separate program not included in total funding; fiscal year 2006 NOFA includes $9.5
  mil carryover funds; HUD announced 12/22/06 to 53 PHAs.
\8\ Elderly/Disabled SC shifted in fiscal year 2004 from ROSS to PH Operating Fund; previously funded level $15.6 mil.
\9\ Housing Certificate Voucher FSS Coordinators (self-sufficiency/homeownership); HUD announced Oct. 2006 to 623 public housing authorities.
\10\ Defense fiscal year 2006 Appropriations bill cut most domestic programs 1 percent across the board, Dec 21, 2005.
\11\ 3rd Continuing Resolution to Feb 15, 2007; H.J. Res 20 passed House Jan. 31, 2007.
\12\ H.J. Res 20 increases fiscal year 2007 funding to $3.86 billion from House passed $3.56 billion; House Appropriations Committee acknowledges that fiscal year 2007 funding is $672 million
  short of the need and that HUD is funding PHAs at 76 percent of their operating level.
\13\ HUD published in March 13, 2007 Federal Register the fiscal year 2007 SuperNOFA.

   Prepared Statement of the National Affordable Housing Management 
                          Association (NAHMA)
    Thank you, Chairman Murray and Ranking Member Bond for providing me 
this opportunity to share NAHMA's perspectives on the fiscal year 2008 
budget request for the U.S. Department of Housing and Urban 
Development.
    NAHMA represents individuals involved with the management of 
privately-owned affordable multifamily housing regulated by the U.S. 
Department of Housing and Urban Development (HUD), the U.S. Rural 
Housing Service (RHS), the U.S. Internal Revenue Service (IRS), and 
State housing finance agencies. Our members provide quality affordable 
housing to more than 2 million Americans with very low and moderate 
incomes. Executives of property management companies, owners of 
affordable rental housing, public agencies and vendors that serve the 
affordable housing industry constitute NAHMA's membership.
    Key HUD multifamily programs of interest to our members include: 
Project-based section 8; section 8 Housing Choice Vouchers; section 202 
housing for the elderly; section 811 housing for the disabled; the 
Community Development Block Grant (CDBG) and the HOME program. The 
majority of my statement will focus on funding and administration of 
the project-based section 8 program.
    It is imperative to fully fund all rental subsidy contract renewals 
in the project-based section 8 program. NAHMA is extremely concerned 
that the fiscal year 2008 budget request for project-based section 8 is 
seriously under-funded. The administration requested only $5.5 billion 
for project-based section 8 contract renewals in fiscal year 2008--a 
figure well below the $5.8 billion Congress appropriated for this 
purpose in fiscal year 2007. Such a serious shortfall in this account 
would further exacerbate the well-documented problem of late Housing 
Assistance Payments (HAPs) to owners of these properties.
    As the subcommittee is well aware, the Government Accountability 
Office (GAO) released a report in November 2005, entitled ``Project-
Based Rental Assistance: HUD Should Streamline Its Processes to Ensure 
Timely Housing Assistance Payments.'' GAO recommended three key actions 
HUD should take to improve the timeliness of HAP payments to owners:
  --Streamline and automate the contract renewal process to prevent 
        errors and delays;
  --Improve HUD's monitoring of contract funding levels; and
  --Notify owners about late payments.
    Although HUD agreed with GAO's recommendations, the Department 
pinned much of its plans for implementation on its planned Business 
Process Reengineering--which has since been cancelled due to its costs.
    Much of this report confirmed what we believed about the problem of 
late HAP payments, including the close association between late HAPs 
and contract renewals. In the experience of our members, HUD will not 
execute a renewed contract until the funding is in place. Nevertheless, 
there are some aspects of the report which we hope the subcommittee 
will explore further. Near the end of the Federal fiscal years, and in 
periods funded by continuing resolutions, NAHMA receives many pleas for 
assistance from members who have not received their HAP payments, or 
were told by the HUD field office or PBCA that there was no funding 
available for their contract. Often, when a member does not receive 
their HAP payment on time, they will notice the code given in HUD's 
TRACS system for the contract is ``R-26'' (i.e. insufficient funding). 
While these requests for help are not limited to the end of the fiscal 
year or periods of continuing resolutions, they are generally expected 
around these times. Based on interviews with HUD budget officials, GAO 
dismissed continuing resolutions as a cause of late HAP payments. HUD 
told GAO a process was in place to deal with such situations. NAHMA 
strongly believes this claim requires further examination. When GAO 
released this report in late 2005, HUD would execute short-term, 
partial-year contracts in such situations. Recently, NAHMA was informed 
that HUD now frowns on partial-year contracts. The effect of HUD's 
policy reversal is that owners will remain unpaid for indefinite 
periods of time rather than receive a partial payment. Although GAO did 
not address whether lag-time between HUD's request for its funding 
allotment and release of funds from the Office of Management and Budget 
(OMB) caused late HAPs, we believe this matter should be explored.
    Last year, in H. Rept. 109-495 to accompany the fiscal year 2007 
Transportation, Treasury, HUD bill (H.R. 5576) the House Appropriations 
Committee directed HUD to report on its progress in implementing GAO's 
recommendations for improving timeliness of HAP rental subsidy payments 
to affordable housing owners. Language found under the Project-Based 
section 8 section noted the Committee's concern ``. . . that the 
Department take adequate measures to avoid late or delayed payments to 
providers of Project Based section 8 rental housing.'' The committee 
repeated GAO's three specific recommendations and directed the 
Department, ``. . . to provide the committee with a report on progress 
achieved in reducing the incidence of late payments to project-based 
providers and other measures to implement GAO's recommendations to 
accompany the Department's fiscal year 2007 Operating Plan submission. 
The report is to include a preliminary allocation plan for fiscal year 
2007 funding requirements for both project-based contract renewal and 
amendment funding needs in fiscal year 2007. In addition, the report 
accompanying the Operating Plan is to address how the proposed fiscal 
year 2007 program for project based-based renewals and amendments, as 
reflected in the preliminary allocation plan, is to be funded using a 
combination of new budget authority and recaptures in fiscal year 
2007.''
    Nearly 18 months after GAO released its report in 2005, late HAP 
payments to owners remain a serious problem. The House Financial 
Services Committee included the late HAP issue on its Oversight Plan 
for the 110th Congress. NAHMA believes continued oversight by the 
authorizers and appropriators will be necessary to resolve this 
problem.
    In a new report released by GAO in April, 2007, ``Project-Based 
Rental Assistance: HUD Should Update Its Policies and Procedures to 
Keep Pace with the Changing Housing Market,'' (GAO-07-290), GAO 
documented serious consequences of late HAP payments:

``Owners told us that when they did not receive payments on time, they 
often had to use reserve funds to cover critical operating expenses, 
leading to cash flow problems. During these periods, some owners 
delayed needed maintenance to make up for the budget shortfall. For 
example, we found in our work for this current report that in 
Baltimore, a nonprofit owner of a project-based section 8 property for 
elderly residents delayed critical repairs to the boiler system when 
the payments were delayed. The owner used reserve funds that should 
have been used for repairs to cover operating costs. This situation 
contributed to a lower physical REAC score for the owner because the 
boiler was in need of repair.''

    NAHMA has also come to the unfortunate conclusion that legislation 
will probably be necessary to solve the problem once and for all. Not 
surprisingly, we are unequivocal in our position that HAPs must be paid 
to owners on time and in full. Ideally, we believe HUD should pay a 
penalty to owners when HAPs are late, just as owners must pay late fees 
on missed mortgage and /or utility payments which result from the late 
HAP. We will seek legislation which requires HUD to implement GAO's 
late HAP recommendation to notify owners when payments will be late, 
requires HUD to automatically approve releases from reserves when the 
HAP is 10 days late, and penalizes HUD for late HAP payments to owners. 
Where HAP payments are not made in a timely manner, our members feel 
strongly that HUD should pay interest on the late HAP payments--just as 
the owners must pay a penalty for late mortgage payments. Moreover, 
when owners must use reserve for replacement funds to sustain the 
property until the HAP payment is received, interest earned on the 
reserves is lost.
    We believe a precedent for penalizing late HAP payments exists in 
Treasury's Prompt Payment Rule, which ensures that Federal agencies pay 
vendors in a timely manner. Prompt Payment assesses late interest 
penalties against agencies that pay vendors after a payment due date. 
This rate was established under the Contract Disputes Act and is 
referred to as the ``Renegotiation Board Interest Rate,'' the 
``Contract Disputes Act Interest Rate,'' and the ``Prompt Payment Act 
Interest Rate.'' For more information, please see http://
www.fms.treas...gov/prompt/index.html. While we understand that HAP 
payments are subject to annual appropriations, we do not believe the 
legislative intent of such policy was to delay payments from days to 
sometimes months at a time. I would welcome the opportunity to discuss 
our proposed solution with the subcommittee at length.
    Finally, it is in the context of HUD's questionable funding request 
for project-based section 8 and chronic late payments of HAP contracts 
that I respectfully ask the subcommittee to consider NAHMA's request 
for assistance in implementing HUD's Limited English Proficiency (LEP) 
guidance. HUD published its final LEP guidance, ``Notice of Guidance to 
Federal Assistance Recipients Regarding Title VI Prohibition Against 
National Origin Discrimination Affecting Limited English Proficient 
Persons,'' in the Federal Register on January 22, 2007. It became 
effective on March 7, 2007. The term ``limited English proficiency'' 
refers to inability to read, write, or speak English well. Among other 
things, the LEP guidance obligates affordable housing owners to provide 
translated ``vital documents'' and interpretation services to persons 
with limited English proficiency. It also places responsibility on the 
owners to ensure competency of translators/interpreters and accuracy of 
the translations. The guidance was issued pursuant to Executive Order 
13166, which directed Federal agencies to issue guidance clarifying how 
recipients of Federal funds are supposed to satisfy their obligation 
under Title VI of the Civil Rights Act of 1964 to ensure meaningful 
access to their programs by persons with limited English proficiency 
(LEP).
    NAHMA supports HUD's goal of ensuring that persons with LEP have 
access to Federal programs. In fact, many individuals with limited 
English proficiency already live in properties owned or managed by 
NAHMA members. It is the methods HUD has proposed to advance the goal 
we find highly problematic. For example, no additional funding has been 
proposed to offset the cost of complying with this guidance. Feedback 
from NAHMA members suggest translating documents could cost $10,000 per 
language per property. Many properties are already stretching funds 
just to meet the ever-increasing regulatory requirements and to 
maintain the physical condition of properties. Furthermore, HUD has 
resisted suggestions to issue a specific, definitive list of ``vital 
documents.'' The owner is left to guess which property-specific 
documents could be considered vital in legal proceedings and then 
translate them at the project's expense. Likewise, the guidance says 
the owner is responsible for ensuring the accuracy of translations and 
competency of the translators or interpreters. Generally speaking, the 
management of affordable housing bears no relationship to linguistic 
abilities, translation services or the ability to differentiate between 
high quality interpretation and inadequate interpretation. To impose 
this requirement on housing providers is no less burdensome than asking 
them to become practitioners of some other profession requiring years 
of extensive training and specialized personal abilities. We strongly 
believe HUD should provide any necessary translations and/or oral 
interpretation services directly to LEP persons.
    We urge the subcommittee to include language in the fiscal year 
2008 HUD appropriations legislation which will provide funding (either 
through new appropriations or reprogramming from existing accounts) for 
standardized translations and a toll-free interpretation hotline 
service to assist persons with limited English proficiency. We believe 
the standardized translations should include both official HUD 
documents, as well as any unofficial documents used by a recipient of 
the agency's funding to support the HUD program. NAHMA strongly 
believes responsibility for producing the translations and providing 
interpreters should be shifted from housing providers to HUD. The 
suggested duplication of effort by small, medium and large housing 
providers will result in multiple translations of the same document 
with inconsistent quality. A reasonable compromise would make HUD 
responsible for identifying vital documents and producing standard 
translated versions of those documents. A single translation produced 
by HUD will better serve individuals with limited English proficiency. 
There would be more consistency and better control over the accuracy, 
which will provide LEP persons with quality translations. Standard 
translations produced by HUD represent a more cost-effective approach 
to satisfying the goal of ensuring persons with Limited English 
Proficiency have meaningful access to Federal housing programs. 
Furthermore, professional interpreters available through a HUD-provided 
hotline service and trained in HUD's programs would offer a win-win 
alternative to the current proposal.
    In conclusion, NAHMA appreciates that the subcommittee has a very 
difficult task ahead in balancing many competing priorities in a 
climate of tightened budgets. As you make these difficult 
determinations, please continue to reject outright cuts to Federal 
multifamily housing programs. NAHMA respectfully requests that the 
subcommittee provide full funding for all authorized section 8 
vouchers. Please also fully fund contract renewals for project-based 
section 8, and continue legislative oversight to end the problem of 
late HAP payments. Likewise, we urge the subcommittee to at the very 
least increase appropriations for the section 202, section 811, HOME 
and CDBG programs at the rate of inflation. Please resist any proposed 
cuts to these important programs.
    Thank you for your consideration.
                                 ______
                                 
  Prepared Statement of the National Council of State Housing Agencies
    Chairman Murray, Ranking Member Bond, and members of the 
subcommittee, the National Council of State Housing (NCSHA) is pleased 
to provide you testimony on our fiscal year 2008 HUD funding 
priorities. NCSHA represents the Housing Finance Agencies (HFAs) of the 
50 States, the District of Columbia, Puerto Rico, and the U.S. Virgin 
Islands. We appreciate your continued commitment to affordable housing 
and consideration of our views.
    State HFAs are full partners with HUD in the delivery of affordable 
housing programs. HFAs administer the HOME Investment Partnerships 
program (HOME) in 41 States. They administer the section 8 Housing 
Choice Voucher Program in 21 States and project-based section 8 
contracts in 43 States. Many HFAs administer homeless assistance. 
Forty-three participate in FHA mortgage insurance programs.
    In addition to administering HUD programs, HFAs allocate the Low 
Income Housing Tax Credit (Housing Credit) and issue tax-exempt private 
activity single-family Mortgage Revenue Bonds (MRBs) and multifamily 
housing bonds. HFAs often use HOME and other HUD programs in 
combination with the Housing Credit and Bonds to extend their reach to 
even lower income families.
    NCSHA urges Congress to increase total HUD funding this year. In 
recent years, HUD has borne more than its share of budget cuts. Since 
2001, HUD funding as a percentage of total discretionary spending has 
declined 20 percent.
    Today's HUD budget is a fraction of what it would have been had it 
just kept pace with inflation since 1976. In the last 31 years, HUD's 
budget authority has barely grown from $29.2 billion in 1976 to $36.6 
billion in 2007, despite the steady rise in the number of families 
needing affordable housing in this country. If HUD's budget authority 
had grown at the rate of inflation since 1976, today it would be $88.2 
billion.
    Increased funding is sorely needed. According to Harvard's Joint 
Center for Housing Studies, 15.8 million--nearly one in seven--American 
families spend more than half of their incomes on housing. Eighty 
percent of these families have incomes in the bottom fifth of the 
income distribution scale.
    The country is losing more affordable rental housing than it is 
producing each year to deterioration, rent increases, and conversion to 
market-rate housing or commercial use. The threat of further losses 
looms as Federal subsidy contracts on hundreds of thousands of 
apartments expire each year, and mortgages on thousands more become 
eligible for prepayment.
    Recognizing that budget constraints will prevent Congress from 
providing funding adequate to address all our housing needs, NCSHA 
urges Congress to prioritize increasing HOME formula grant and voucher 
funding.
                  increase home formula grant funding
    NCSHA appreciates the subcommittee's continued support of the HOME 
program. HOME enjoys strong bipartisan support throughout Congress.
    Since Congress created the HOME program more than 15 years ago, it 
has financed more than 1 million affordable homes, helping nearly a 
half million homeowners and just as many renters. Every year, HOME 
funds are used to provide housing assistance to more than 100,000 
additional families.
    HOME continues to be a wise investment and one of the most 
successful HUD programs available to States and localities. According 
to HUD, HOME production last year exceeded 140,000 units nationwide. 
Still, HOME participating jurisdictions (PJ) need much more HOME 
funding than they receive to meet the demand for it.
    The administration proposes to increase HOME funding to $1.97 
billion in fiscal year 2008, a 12 percent increase over the fiscal year 
2007 HOME appropriation. It recommends a 10 percent increase in the 
State and local HOME formula grant to $1.85 billion.
    The administration's proposal does not make up for funding cuts 
HOME has suffered since 2004. In fiscal year 2006, Congress cut HOME 
funding overall by 7.5 percent and the HOME formula grant by 6 percent, 
even though the House and Senate provided higher funding levels. The 
fiscal year 2006 funding cut came on top of a 5.3 percent reduction in 
fiscal year 2005. fiscal year 2007 HOME funding remains frozen at the 
fiscal year 2006 levels, the lowest since fiscal year 2000.
    NCSHA urges Congress to restore HOME funding to at least its fiscal 
year 2004 level of $2 billion, adjusted for inflation. Adjusted for 
inflation since fiscal year 2004, the fiscal year 2008 funding level 
for HOME would be $2.24 billion.
    During tight budgetary times as these, HOME is a particularly sound 
investment. State HFAs are able to direct scarce HOME funds where they 
will have the greatest impact meeting the States' most pressing low-
income housing needs. PJs may use HOME funds for rental production, 
tenant-based rental assistance, homeowner rehabilitation, and down 
payment assistance. HOME funds can also be targeted to the elderly, 
persons with disabilities, extremely low-income, and working families.
    We also strongly urge Congress to put every available HOME dollar 
into the formula grant and not set-asides like the American Dream 
Downpayment Initiative (ADDI) or Housing Counseling. Such set-asides 
take away State flexibility and impose Washington dictates that may not 
address States' highest priority needs. Also, PJs already can and do 
use HOME formula grant funds for down payment assistance.
                increase housing choice voucher funding
    NCSHA also calls on Congress to increase voucher funding to fully 
fund all authorized vouchers and provide for new incremental vouchers. 
The administration proposes to provide $16 billion for vouchers in 
fiscal year 2008, less than 1 percent more than the fiscal year 2007 
appropriation of $15.9 billion.
    This amount would not be enough to renew all vouchers already in 
use. At a minimum, Congress must fully fund all vouchers in use. We 
urge Congress also to fully fund all authorized vouchers.
    Vouchers assist some of our neediest families. With the help of 
vouchers, other important housing programs such as HOME, the Housing 
Credit, and Bonds are able to reach more low-income families than they 
can independently. In fact, the financial viability of some HOME, 
Credit, and Bond developments depends on vouchers. Adequately funding 
all authorized vouchers will help ensure the stability and longevity of 
these developments.
    In addition, we urge Congress to provide for new incremental 
vouchers so we can help some of the millions of families who qualify 
for voucher assistance, but do not receive it. According to the Joint 
Center for Housing Studies, more than 7 million low-income renters pay 
more than 50 percent of their income for housing. Three-quarters of all 
families eligible for housing assistance do not receive any. Yet, 
Congress has not funded any new incremental vouchers since 2002.
    To make matters worse, HUD has distributed the voucher funding 
Congress has provided to PHAs under a formula based on limited and 
outdated utilization data from May, June, and July 2004. Under this so 
called ``three-month snapshot'' formula, some public housing 
authorities (PHAs) have received too little funding to renew all 
vouchers in use, and others have received more than they are authorized 
to use.
    According to the Center on Budget and Policy Priorities, the 
funding shortages and misallocations have caused the number of families 
served since February 2004 to drop significantly. Over this period, HUD 
has provided vouchers to 150,000 fewer families than it would have if 
all authorized vouchers had been fully funded.
    NCSHA thanks the subcommittee for recognizing the problems created 
by the outdated funding formula. The formula changes Congress made in 
the fiscal year 2007 joint funding resolution, with your support, were 
a step in the right direction. Under the resolution, HUD will calculate 
voucher funding allocations on the most recent 12-month utilization and 
cost data available, adjusted for cost increases, rather than the old 
3-month snapshot.
    It is essential that Congress ensure HUD allocate whatever voucher 
funds are available according to a fair formula. We recommend the 
subcommittee make permanent the 1-year funding formula changes that 
Congress called for in the fiscal year 2007 appropriations bill and 
make other important allocation improvements, including directing HUD 
to reallocate unused funds from low utilization PHAs to high 
utilization PHAs and giving PHAs access to up to 2 percent of their 
next year's allocation to absorb temporary overleasing costs.
            support increased affordable housing production
    To meet the country's ever-growing housing needs, we must devote 
more Federal resources to producing new affordable housing and 
preserving the current housing stock. Existing resources are simply not 
sufficient.
    States administer a number of successful programs that produce 
affordable rental housing, including the Housing Credit, HOME, and 
multifamily tax-exempt bonds. While these programs are extremely 
effective, they were not designed to meet the needs of households at 
the bottom of the income spectrum without additional rental subsidies. 
At their current funding levels, they cannot adequately address our 
country's huge unmet affordable housing needs.
    We urge you to work with your authorizing committee colleagues to 
authorize and fund a new resource for increasing affordable rental 
housing production. Such a resource could be combined cost-effectively 
with other existing production resources to extend their reach to even 
lower income families.
                                 ______
                                 
    Prepared Statement of the National Low Income Housing Coalition
    The National Low Income Housing Coalition (NLIHC) is pleased to 
submit testimony on the fiscal year 2008 Department of Housing and 
Urban Development. We would also like to thank the subcommittee for its 
series of hearings on the fiscal year 2008 HUD budget.
    NLIHC is dedicated solely to ending the affordable housing crisis 
in the United States. Our members include non-profit housing providers, 
homeless service providers, fair housing organizations, state and local 
housing coalitions, public housing agencies, private developers and 
property owners, housing researchers, local and State government 
agencies, faith-based organizations, residents of public and assisted 
housing and their organizations, and concerned citizens. NLIHC does not 
represent any sector of the housing industry. Rather, NLIHC works only 
on behalf of and with low income people who need safe, decent, and 
affordable housing, especially those with the most serious housing 
problems. NLIHC is entirely funded with private donations.
    The need for more affordable housing is indisputable. The 
nationwide shortage of rental homes for extremely low income 
households, which are composed of elderly and disabled people on fixed 
incomes or people in the low wage workforce, is acute and getting 
worse. In the United States, there are 9,022,000 extremely low income 
renter households and only 6,746,000 homes renting at prices these 
households can afford, paying the standard of 30 percent of their 
income for housing. In Washington, there are only 31 affordable and 
available units to every 100 extremely low income renter households who 
could afford them. In Missouri, there are only 46 affordable and 
available units for every 100 extremely low income renter 
households.\1\
---------------------------------------------------------------------------
    \1\ Pelletiere, D. (2007). American Community Survey estimate shows 
larger national, State affordable rental housing shortages. Research 
Note No. 07-01. Washington, DC: NLIHC.
---------------------------------------------------------------------------
    This lack of affordable housing forces 74 percent of extremely low 
income renters to pay more than half of their incomes toward their 
homes, compared to 26 percent of renters in any income group.\2\
---------------------------------------------------------------------------
    \2\ NLIHC tabulations of 2005 American Community Survey PUMS.
---------------------------------------------------------------------------
    NLIHC firmly believes in the potential for federal housing programs 
to address these types of housing affordability problems through a 
variety of housing programs targeted to the lowest income households.
    NLIHC urges the subcommittee to provide full funding for the 
voucher program, including language that tenant protection vouchers 
must replace all units leaving the affordable housing inventory, not 
just for those units under lease. The Center on Budget and Policy 
Priorities estimates that the President has requested between $300 and 
$600 million less than what will actually be needed to renew existing 
vouchers in fiscal year 2008.\3\
---------------------------------------------------------------------------
    \3\ Sard, B. and Rice, D. (2007) Memorandum to Interested Parties 
on administration's proposed housing budget for fiscal year 2008. 
Washington, DC: CBPP.
---------------------------------------------------------------------------
    We appreciate the many improvements made to the section 8 housing 
choice voucher program in the fiscal year 2007 funding resolution. 
NLIHC is encouraged by legislation in the House, H.R. 1851, which would 
also fix the voucher funding formula while providing other welcome 
reforms to the program. It is our hope that this legislation will be 
enacted before fiscal year 2008 begins. If not, we hope that funding 
formula fixes will be included in the HUD fiscal year 2008 bill.
    NLIHC rejects the President's policy proposal to lift voucher 
agencies' authorized voucher caps. NLIHC firmly believes such action 
would be tantamount to creating a block grant and that no one, 
including Congress, HUD and advocates, would know the number of 
vouchers in use locally or nationally. It is also apparent that many 
housing authorities have not expended funds up to their authorized cap 
so we are very doubtful that lifting the cap would result in any 
significant increase, if we could even hope to measure it, of vouchers 
in use.
    In addition to assuring the current voucher program is on solid 
ground to restore all vouchers lost since 2004, NLIHC urges the 
subcommittee to include funding for 100,000 new, incremental vouchers 
in fiscal year 2008. Such action would be a meaningful, much-needed 
step toward meeting the Nation's housing needs and would signal the 
subcommittee's belief that the reliability and credibility of the 
voucher program have been re-established.
    NLIHC is concerned about the President's request for section 8 
project-based contract renewals and urges the subcommittee to seek 
additional data from HUD to ensure that all section 8 project-based 
contracts are renewed in fiscal year 2008. Preliminary analysis shows 
1,004,529 units with section 8 project-based contracts expiring in 
fiscal year 2008 at a cost of at least $5.92 billion. But, the 
President has only requested $5.52 billion for renewals, a shortfall of 
at least $400 million. This is potentially exasperated by a recent HUD 
general counsel decision that, counter to HUD's previous practices, HUD 
cannot renew project-based contracts for terms fewer than 12 months.
    The Nation's 1.2 million units of public housing are in need of 
immediate attention and increased funding in fiscal year 2008. NLIHC 
urges the Subcommittee to increase both public housing operating and 
capital funding to levels that will restore financial and physical 
stability to these homes. Adequate funding is the only way these homes 
can be preserved for their target population. NLIHC supports at least 
$4.7 billion for operating funds and at least $3.5 billion for capital 
funds in fiscal year 2008.
    NLIHC supports Resident Opportunity and Self Sufficiency funding of 
at least $55 million in fiscal year 2008 to help ensure that residents 
are prepared to participate in the public participation opportunities 
available to them.
    NLIHC continues to have serious concerns about the HOPE VI program. 
NLIHC is hopeful that forthcoming legislation in the House will require 
that each public housing unit revitalized with HOPE VI funds will be 
replaced with a public housing unit and that residents will have a 
universal right of return to the revitalized housing. Without these and 
other improvements to the HOPE VI program, NLIHC believes that, if the 
HOPE VI program continues to be authorized in fiscal year 2008, any 
public housing revitalization funds would be better appropriated 
through the public housing capital fund.
    NLIHC also urges the subcommittee to adequately fund HUD's research 
functions, with particular attention to fully funding its core housing 
market and program data collection, research, and policy evaluation 
functions that are necessary to inform the public debate on the most 
effective solutions to housing affordability and quality problems.
    NLIHC urges adequate funding for HUD's other core programs, 
including homeless assistance grants, Community Development Block 
Grants, HOME, section 202 supportive housing for the elderly, section 
811 housing for persons with disabilities, Housing Opportunities for 
Persons with AIDS, fair housing and lead-based paint hazard reduction.
    NLIHC urges the subcommittee to fund all provisions of H.R. 1227, 
the Gulf Coast Hurricane Housing Recovery Act. H.R. 1227, which passed 
the House on March 21 with a large bipartisan majority, would do much 
towards assuring the replacement of housing for low income people in 
the gulf coast and providing a long-term housing solution to the over 
150,000 families that remain displaced. It is a concrete, long-term 
plan to address the critical housing needs of those displaced 
households that remain in trailer camps and other temporary housing 
arrangements, and must be funded through the fiscal year 2008 
appropriations bill. It is our hope that similar legislation will be 
considered in the Senate and that enactment will occur very soon.
    Thank you for considering our views.
                                 ______
                                 
    Prepared Statement of the National Alliance to End Homelessness
    The National Alliance to End Homelessness (the Alliance) is a 
nonpartisan, nonprofit organization with several thousand partner 
agencies and organizations across the country. The Alliance supports 
the over 160 State and local entities who have completed 10 year plans 
to end homelessness. The Alliance represents a united effort to address 
the root causes of homelessness and challenge society's acceptance of 
homelessness as an inevitable by-product of American life.
                                overview
    The story of homelessness over the past decade has been one of 
communities innovating and improving their homeless assistance systems 
under the increasing strain of a worsening housing crisis. Reducing 
homelessness will require Congress to do two things:
  --Increase funding for Homeless Assistance Grants to $1.8 billion and 
        support performance driven, cost-effective solutions to 
        homelessness like permanent supportive housing and rapid re-
        housing programs.
  --Increase the supply of affordable housing for extremely low income 
        households.
                              homelessness
    Widespread homelessness did not always exist. Between WWII and the 
1980s, the sight of people living in shelters, cars, churches, on the 
streets, or in the woods was exceptionally rare. However, throughout 
the 60s, 70s, and 80s, deinstitutionalization, powerful new illegal 
drugs, a shifting economy, and, most importantly, a declining supply of 
affordable housing, caused the homelessness we see today.
    Over the course of a year, as many as 3.5 million people will 
experience homelessness. The most recent nationwide estimate of the 
size of the homeless population found that at one point in January 
2005, 744,000 people were homeless. Of those, 171,000 were chronically 
homeless. An additional 304,000 were in families with children. Despite 
the fact that the count was conducted during the coldest month of the 
year, 331,000 homeless people, 44 percent of the total, were 
unsheltered. Homelessness was prevalent in every region of the country, 
in urban, suburban, and rural areas.\1\
---------------------------------------------------------------------------
    \1\ Homelessness Counts. National Alliance to End Homelessness. 
January 2007. Washington, DC.
---------------------------------------------------------------------------
    Though the problem is very large, and seems intractable, we know 
that homelessness can be ended. Indeed, a nationwide movement to end 
homelessness has begun. Nearly 300 communities have completed or are 
working on 10 year plans to end homelessness. Many places are already 
showing success. Here are just a few examples:
  --Portland, Oregon--the number of people sleeping on the streets 
        declined by over 40 percent from January 2005 to January 2007.
  --San Francisco, California--Between 2002 and 2005, the city reduced 
        the number of people sleeping on the streets by 40 percent, and 
        the total number of homeless people by 28 percent.
  --Columbus, Ohio--Between 1997 and 2005, the number of homeless 
        families declined by 44 percent.
    These remarkable results were accomplished because of two major 
shifts in the way communities serve homeless families and individuals--
permanent supportive housing for chronically homeless individuals and 
rapid re-housing for homeless families.
                      permanent supportive housing
    About 23 percent of homeless people experience chronic 
homelessness. They are homeless for years or even decades, or they 
cycle between homelessness, psychiatric hospitals, jails, prisons, 
detox programs and emergency rooms. For that group, most of whom have 
one or more severe disabilities, homelessness is extremely harmful and 
very costly to the public. Numerous studies have shown that providing 
permanent supportive housing to chronically homeless people ends their 
homelessness, improves their mental and physical health, and saves 
thousands of dollars per person by reducing the need for shelter, 
detoxification, hospitalization, emergency rooms, and incarceration.\2\ 
In Denver, Colorado, permanent supportive housing saved $2,300 per 
person per year, and in Portland, Oregon, permanent supportive housing 
saved $15,000 per person per year.
---------------------------------------------------------------------------
    \2\ The two studies compared the cost of health care, 
incarceration, emergency shelter, and other publicly funded care for 
chronically homeless individuals before and after entering permanent 
supportive housing. Denver source: Denver Housing First Collaborative: 
Cost Benefit Analysis and Program Outcomes Report, Jennifer Perlman, 
PsyD, and John Parvensky, Colorado Coalition for the Homeless. December 
2006. Portland source: Estimated Cost Savings Following Enrollment In 
The Community Engagement Program: Findings From A Pilot Study Of 
Homeless Dually Diagnosed Adults. Thomas L. Moore, Ph.D. Central City 
Concern. June 2006. Portland, OR.
---------------------------------------------------------------------------
    Congress, the administration, the bipartisan Millennial Housing 
Commission and numerous researchers and advocacy organizations have 
identified a need for 150,000 units of permanent supportive housing 
over 10 years targeted to chronically homeless individuals. Combined 
with better prevention policies, these units would end chronic 
homelessness in the United States.
                            rapid re-housing
    While chronic homelessness has received more attention in recent 
years, communities have also been making great strides in serving 
homeless families. Most homeless families have very similar 
characteristics to other poor families with similar levels of education 
and similar rates of mental illness or depression. Most of these 
families struggled to pay for housing in an increasingly unaffordable 
rental market and then experienced some crisis, like domestic violence, 
a job loss, or a medical problem, that eventually led to their 
homelessness.
    Recently, the Alliance studied some communities that had reduced 
family homelessness to identify the key ingredients to their 
success.\3\ The success stories included the following:
---------------------------------------------------------------------------
    \3\ Promising Strategies to End Family Homelessness. National 
Alliance to End Homelessness and Freddie Mac. June 2006. Washington, 
DC.
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  --Hennepin County, Minnesota--From 2000 to 2004, the number of 
        families experiencing homelessness declined by 43 percent.
  --Westchester County, New York--The number of families needing 
        shelter declined by 57 percent over a 2 year period.
  --Massachusetts--From 2002 through 2006, the number of families 
        experiencing homelessness declined from 1,600 each night to 
        1,338.
    The common ingredient in these and other successful communities is 
that they help families move back into permanent housing as rapidly as 
possible, and then provide services to help them stabilize and focus on 
their longer term needs. These rapid re-housing strategies reduce 
spells of homelessness from several months to several weeks, and when 
families at high risk of homelessness are identified early enough, they 
can prevent homelessness altogether.
                 funding needs for homeless assistance
    To help communities make sufficient progress in their efforts to 
end homelessness, the Alliance recommends a funding level of $1.8 
billion for Homeless Assistance Grants.
    While some cities have already made remarkable progress reducing 
homelessness, all of them are at a critical juncture. They have 
developed 10 year plans to end homelessness, brought in new partners, 
identified cost-effective strategies, and located some potential 
sources of funding. Many have made significant commitments of State, 
local and private dollars. They are, however, counting on the Federal 
Government to be an active partner in their efforts.
    The administration's fiscal year 2008 budget request calls for 
$1.586 billion for HUD homeless assistance funding, an increase of $144 
million from 2007. The Alliance estimates that the request would be 
sufficient to continue existing homeless activities, yet it would fund 
fewer than 8,000 new units of permanent supportive housing. While this 
is slightly more than has been funded in the last 2 fiscal years, it is 
still well below the pace of new units funded between 2001 and 2004, 
and only a little over half the number needed to fund the 15,000 units 
needed each year to be on track to end chronic homelessness in 10 
years. The administration's request would do nothing to help 
communities implement rapid re-housing programs for families, even as a 
growing body of research is showing that those programs are the best 
way to end homelessness for most families.
    An appropriation of $1.8 billion would help communities make 
progress on their 10 year plans to end homelessness by accomplishing 
the following:
  --Fund all expiring permanent housing renewals, which by themselves 
        will increase by $65 million between 2007 and 2008.
  --Provide $25 million to communities to set up cost-effective 
        programs to help homeless families move into permanent housing.
  --Fund 15,000 new units of permanent supportive housing, helping put 
        communities on track to create the 150,000 units needed to end 
        chronic homelessness.
             policy needs for homeless assistance programs
    For the past several years, Congress has implemented two policies 
that have helped make Homeless Assistance Grants a much more effective 
tool for ending homelessness:
  --A 30 percent set-aside for permanent supportive housing for 
        individuals and families with disabilities.
  --Added funding for Shelter Plus Care renewals. Without the funding 
        guarantee, people in permanent housing were in jeopardy of 
        losing their housing.
    The policies allowed communities to develop 50,000 units of 
permanent supportive housing over the past 6 years, and they should 
continue.
    A similar initiative is needed to help end homelessness for the 
roughly 600,000 families who are homeless each year. The Alliance 
recommends that Congress provide an incentive within HUD's homeless 
assistance grants for rapid re-housing programs that focus on helping 
homeless families move into permanent housing as quickly as possible; 
provide flexible short-term housing assistance as needed; and provide 
follow up support to ensure stability and prevent future homelessness.
    By increasing HUD's homeless assistance grants to $1.8 billion, 
continuing policies that create permanent supportive housing, and 
initiating policies to encourage rapid re-housing for homeless 
families, Congress will help communities take critical steps in their 
efforts to end homelessness.
                     increasing affordable housing
    This Nation will continue to have homelessness until we address our 
affordable housing shortage. The link between affordable housing and 
homelessness can be summed up very simply. In 1970, there were 300,000 
more affordable housing units available nationally than there were low-
income households that needed to rent them.\4\ As result, there was not 
widespread homelessness. Many people had mental illness, addictions, 
poor educations and low incomes, but they could still afford a place to 
live. Today, the situation is reversed. In 2003, there were 5.4 million 
more low-income households than there were affordable housing units 
available to them.\5\ Although the problem exists for all low-income 
households, it is especially acute for those with extremely low 
incomes.
---------------------------------------------------------------------------
    \4\ In Search of Shelter: The Growing Shortage of Affordable Rental 
Housing. Daskal, Jennifer. June 1998. Paper. Center on Budget and 
Policy Priorities, Washington, DC.
    \5\ The State of the Nation's Housing: 2006. Joint Center for 
Housing Studies for Harvard University. June 2005. Cambridge, MA.
---------------------------------------------------------------------------
    The new Congress faces an extremely difficult budget climate. Even 
so, investing in more affordable housing is economically sensible. Many 
of the challenges our Nation faces--homelessness, concentrated poverty, 
inefficiencies in health care and mental health, high rates of 
recidivism in the criminal justice system, failing schools, and 
others--are exacerbated by the lack of affordable housing. The Alliance 
joins many of our partners in the affordable housing community in 
recommending further strengthening and expanding the Housing Choice 
Voucher program, ensuring that public housing is fully funded and 
continues to be a valuable housing resource, and creating more 
affordable housing through a National Housing Trust Fund and other 
mechanisms, particularly for extremely low income households.
                                 ______
                                 
 Prepared Statement of the American Association of Homes and Services 
                         for the Aging (AAHSA)
    AAHSA members serve 2 million people every day through mission-
driven, not-for-profit organizations dedicated to providing the 
services people need, when they need them, in the place they call home. 
Our members offer the continuum of aging services: assisted living 
residences, continuing care retirement communities, nursing homes, 
senior housing facilities, and home and community based services. 
AAHSA's mission is to create the future of aging services through 
quality the public can trust. Over half of our members develop, own or 
operate federally subsidized senior apartment buildings and AAHSA 
represents the majority of HUD section 202 senior housing providers.
         growing need for affordable supportive senior housing
    The senior population in the United States is expected to double by 
2030 to approximately 70 million seniors. The Commission on Housing and 
Health Facility Needs for Seniors in the 21st Century, in its report to 
Congress, estimated that an additional 730,000 assisted units would be 
needed by 2020 to meet the needs of low income seniors. Today more than 
5.8 million of non-institutionalized people age 65 and older require 
assistance with everyday activities and about 1.2 million are severely 
impaired and require assistance with three or more activities of daily 
living (ADLs).
    The HUD section 202 Supportive Housing for the Elderly program 
funds capital development grants, rental assistance contracts and other 
programs, directed to non-profit housing sponsors to develop and 
maintain safe, decent, affordable, supportive housing for seniors 
living on very-low incomes. Today more than 300,000 seniors rely on 
section 202 housing for an affordable, supportive living environment. 
The average section 202 resident is 79 years old and has less than 
$10,000 per year in income and needs some form of supportive 
assistance.
    In a recent survey of section 202 property managers, AARP reported 
there are at least 10 seniors waiting for every unit of section 202 
affordable elderly housing that becomes available. Furthermore, elderly 
residents comprise a growing segment of many of HUD's programs. Seniors 
make up one third of the public housing population and one half of 
section 8 voucher holders. With the average cost of assisted living 
more than $3,000 per month, low income seniors have few options beyond 
nursing home care for supportive housing outside of the HUD programs.
    Level funding, across the board cuts and increased construction and 
rental assistance costs means that fewer section 202 units are being 
built each year. The section 202 program appropriations funded 5,819 
units in fiscal year 2002, 5,689 in fiscal year 2003, 5,353 units in 
fiscal year 2004; 4,681 in 2005; 4,313 in 2006 and 3,667 in fiscal year 
2007. Under the administration's proposed budget just 3,000 units will 
be built in fiscal year 2008.
    To make matters worse, we are losing ground. Existing affordable 
housing units are being lost to market rate conversion and contract 
opt-outs. The Joint Center for Housing found that for every unit of 
affordable housing we build, two are lost. The National Housing Trust 
estimates that almost 15,000 federally-assisted elderly units have been 
lost to conversion and another 82,900 remain ``at risk.''
          supportive housing as part of the continuum of care
    Affordable senior housing, such as section 202, can serve as an 
integral part of the continuum of care and avoid premature, 
inappropriate, unnecessary and costly institutionalization for seniors 
that do not want to leave their communities. In addition, section 202 
housing sites provide a proven and cost-effective infrastructure system 
for service delivery for residents, as well as the community at large. 
Sites often serve as a base for the delivery of home and community 
based services from meals to health screenings to Older Americans Act 
programs.
    Failure to invest in the section 202 program will add to the 
ongoing crisis in our long-term care system, forcing low-income seniors 
into institutions if they want to have a roof over their heads and 
access to meals and services. The section 202 program is a model of a 
public-private partnership that maximizes efficiency and quality in 
Federal housing programs. The administration has called on faith and 
community based groups, such as AAHSA's members, to be more involved in 
providing essential services for low-income citizens. They cannot 
respond to this call with continuous funding cuts.
  --On behalf of our members, their residents and families, AAHSA 
        strongly urges Congress to fund 10,000 new section 202 units by 
        providing $1.33 billion for fiscal year 2008. This amount would 
        include funding for existing project rental assistance contract 
        renewals and:
    --$1.18 billion for the development of 10,000 new section 202 
            units. This will not come close to meeting the existing, 
            much less future housing needs, but it represents a first 
            step to the unmet housing needs of thousands of seniors.
    --$20 million for section 202 Predevelopment Grants. If implemented 
            properly, this program increases efficiency and streamlines 
            the development process for not-for-profit organizations. 
            These grants are needed to cover the costs of architectural 
            and engineering work, site control and other planning 
            relating to the development of section 202 housing.
    --$75 million for service coordinators grants so that there is 
            staff to assist frail elderly residents with identifying 
            and obtaining the services they need to aging in place and 
            avoiding premature institutionalization.
    --$50 million for the Assisted Living Conversion Program (ALCP) to 
            fund modernization and conversion of existing facilities to 
            an ``assisted living'' level of care, facilitating 
            residents' ability to age-in-place. AAHSA urges you to 
            allocate $20 million of the amount to increase the number 
            of affordable housing units with supportive services and 
            $30 million for substantial and emergency capital repairs. 
            Many of the properties are ``aging in place'' and 
            recapitalization may not be feasible. This funding is 
            essential to affordable housing preservation efforts.
    In addition to funding the section 202 program, we urge Congress to 
fully fund all HUD programs and USDA housing programs that serve rural 
seniors. These housing facilities provide safe, decent, affordable 
options to our seniors and enable them to avoid homelessness or 
premature and more expensive placement in a nursing home.
  --Provide funding for additional section 8 Vouchers.--Increased 
        project basing of section 8 assistance will allow providers to 
        house the lowest income seniors and preserve at risk properties 
        with partial or no rental assistance. This cannot be done 
        within the existing section 8 funding levels.
  --Fully fund the Community Development Block Grant Program (CDBG).--
        This program provides crucial gap and infrastructure financing 
        for section 202 developments, as well as paying for supportive 
        services in section 202 properties.
  --Continue to fund the USDA section 515 Multifamily program and the 
        HUD Rural Housing and Economic Development Program.--These 
        programs ensure that low income seniors and the disabled in 
        rural communities have access to safe, decent housing and an 
        infrastructure where supportive services can be delivered and 
        thereby reduce premature nursing home admission.
  --Support increased project-basing of section 8 vouchers.--Public 
        housing authorities can provide up to 25 percent of their 
        section 8 housing vouchers as project-based assistance to 
        privately owned, new or rehabilitated housing that are 
        otherwise without rental assistance. Public Housing Authorities 
        should be encouraged to do so.
                               conclusion
    In light of the importance of affordable housing to low income 
seniors, we urge Congress to address the funding needs of section 202 
and the entire HUD budget to guarantee all seniors have access to safe, 
decent, affordable housing. Last year the Senate Appropriations 
Committee took a monumental step to increase the funding for both the 
section 202 and 811 programs for the first time in years. Your 
leadership is crucial. The elderly and disabled populations need 
additional funding for supportive housing options outside of 
institutional settings. AAHSA and its members appreciate your continued 
support and look forward to working with you in the future throughout 
this process.
                                 ______
                                 
      Prepared Statement of the Institute of Makers of Explosives
    Dear Madam Chairwoman: On behalf of the Institute of Makers of 
Explosives (IME), I am submitting a statement for inclusion in the 
subcommittee's hearing record regarding the proposed fiscal year 2008 
budget for the U.S. Department of Transportation (DOT).
                          interest of the ime
    The IME is the safety and security association of the commercial 
explosives industry. Our mission is to promote safety, security and the 
protection of employees, users, the public and the environment; and to 
encourage the adoption of uniform rules and regulations in the 
manufacture, transportation, storage, handling, use and disposal of 
explosive materials used in blasting and other essential operations. 
Commercial explosives are transported and used in every State. 
Additionally, our products are distributed worldwide, while some 
explosives, like TNT, must be imported because they are not 
manufactured in the United States. The ability to transport and 
distribute these products safely and securely is critical to this 
industry.
                               background
    The production and distribution of hazardous materials is a 
trillion-dollar industry that employs millions of Americans. These 
products are indispensable to the American economy. In the explosives 
industry alone, the value of our shipments far exceeds the $1 billion 
in gross revenues credited to the industry. The transportation of 
hazardous materials involves producers and distributors of chemical and 
petroleum products and waste, transporters in all modes, and 
manufacturers of containers. DOT estimates that upward of 800,000 
shipments and as many as 1.2 million regulated movements of hazardous 
materials occur each day in the United States. This represents over 10 
percent of all freight tonnage transported. As a major export, the 
transportation of hazardous materials contributes positively to our 
trade balance. These products are pervasive in the transportation 
stream and in our society as a whole.
    While these materials contribute to America's quality of life, 
unless handled properly, personal injury or death, property damage, and 
environmental consequences can result. The threat of intentional misuse 
of these materials also factors into public concern. To protect against 
these outcomes, the Secretary of Transportation (Secretary) is charged 
to ``provide adequate protection against the risks to life and property 
inherent in the transportation of hazardous materials in commerce by 
improving'' regulation and enforcement.\1\ These regulations are to 
provide for the ``safe transportation, including security,'' of 
hazardous materials in commerce.\2\ The Secretary's authority to 
accomplish this mission is embodied in the Hazardous Materials 
Transportation Act (HMTA).\3\ Beginning in the 1990s and most recently 
in 2005, the HMTA has been significantly amended. As a consequence of 
these amendments, Congress directed DOT to accomplish a number of 
tasks. How DOT has handled these responsibilities and how it proposes 
to handle them in the future is the focus of this statement.
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    \1\ 49 U.S.C. 5101.
    \2\ 49 U.S.C. 5103(b)(1).
    \3\ 49 U.S.C. Chapter 51.
---------------------------------------------------------------------------
    The HMTA directs the Secretary to implement the law. In reality, 
the Secretary has dispersed authorities in the act to the various modal 
administrations, with primary regulatory authority resting in the 
Pipeline & Hazardous Materials Safety Administration's (PHMSA) Office 
of Hazardous Materials Safety (OHMS). OHMS issues the hazardous 
materials regulations (HMR). As noted above, the commerce of hazardous 
materials demands that OHMS have intermodal, as well as international, 
expertise. It regulates a diverse community of interests and must 
constantly manage the tension between safety, security and efficiency 
in the transport of these materials in order to fulfill its mission to 
protect the public and the environment. The fiscal year 2008 budget 
presents challenges and opportunities to OHMS in accomplishing its 
mission.
Staff and Program Resources
    We want to begin our comments with praise for the leadership team 
assigned PHMSA. We have seen palpable evidence of improved outreach, 
responsiveness, not present in prior years. We attribute the focus to 
the recent reorganization under the Norman Y. Mineta Research and 
Special Programs Improvement Act of 2004 and the management style of 
the current administration.\4\ Administrator Thomas Barrett, VADM Ret., 
is committed to a ensuring a risk-based program that is developed in a 
manner that is inclusive and transparent to stakeholders.
---------------------------------------------------------------------------
    \4\ Public Law 108-426.
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    As a result of the fiscal year 2007 continuing resolution, OHMS was 
denied a four FTE staff increase. The administration is again 
requesting these positions expand the number of field inspectors from 
30 to 34.\5\ We fully support Congress' approval of these new staff 
positions. This staff request is still below the number PHMSA estimates 
it would need to raise its inspection rate to the minimum it believes 
is necessary to maintain a credible enforcement presence. PHMSA's job 
is particularly challenging, compared to other modes, given the 
diversity of entities within the regulated community over which PHMSA 
has primary inspection responsibility.
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    \5\ Fiscal year 2008 PHMSA Budget Submission, page 42.
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    We are concerned about a continuing high number of vacancies, over 
15 percent of current FTP. Some of the vacancies can be attributed to 
end-of-year retirements and to inside promotions. The issue of staff 
vacancies is even more problematic given that ``over one-third of 
hazmat employees will be eligible to retire within five years.'' \6\ 
Every effort should be made to fill these necessary positions.
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    \6\ Fiscal year 2008 PHMSA Budget Submission, page 44.
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Performance Measures
    We are delighted to see that the OHMS budget, including the 
Emergency Preparedness Grants Program, is credited with supporting the 
Secretary's ``global connectivity'' and ``security'', as well as the 
traditional ``safety'' strategic goal.\7\ OHMS' international 
harmonization activities do contribute to ``global connectivity,'' and 
we strongly advocated for recognition of OHMS' security mission since 
the enactment of the 2002 amendments to the HMTA. However, we are 
puzzled that the portion of the OHMS budget that is attributed to 
enhancing security is attributed to the emergency preparedness grants 
program (EPGP), rather than OHMS' rulemaking or enforcement 
accounts.\8\ The EPGP program has nothing to do with security of hazmat 
shipments. The EPGP planning grants support a U.S. Environmental 
Protection Agency program concerning emergency releases of hazmat into 
the environment and the training grants are aimed at emergency 
responders.
---------------------------------------------------------------------------
    \7\ Fiscal year 2008 PHMSA Budget Submission, pages 127-128.
    \8\ OHMS currently supports security rules concerning plans and 
training (see 49 CFR 172 subparts H and I) and has pending two security 
rulemakings concerning security-sensitive hazmats (HM-232F) and rail 
security (HM-232E).
---------------------------------------------------------------------------
    To measure OHMS' progress to enhance safety, the agency sets as its 
primary measure to ``reduce deaths, injuries, property damage and 
economic disruptions from hazardous materials transportation 
incidents.'' \9\ In the past, we have been critical of PHMSA's budget 
submission because the only performance measure has been the reduction 
of serious incidents which we believe is influenced by the state of the 
economy as much as it is the quality, or lack thereof, of OHMS 
activities. We are pleased that OHMS has set some secondary measures of 
performance.\10\ These include increasing response time to stakeholder 
requests for assistance, the number of exemptions to be issued in a 
timely manner, and the compliance rate for security plans.
---------------------------------------------------------------------------
    \9\ Fiscal year 2008 PHMSA Budget Submission, page 133.
    \10\ Fiscal year 2008 PHMSA Budget Submission, pages 40 & 42. ``We 
will enhance the response time by 10 percent. . . . We will reduce the 
time for processing special permits and approvals by 10 percent. . . . 
It is our goal to have a non-compliance rate of less than 15 percent 
when [reinspecting] companies [for] security plan compliance. This will 
permit an estimated 7 percent increase in the regional [enforcement] 
level-of-effort.''
---------------------------------------------------------------------------
    In the past, there has been a dearth of information about the OHMS 
program output. We are pleased to see OHMS share statistics about 
compliance with security plans and reports of undeclared hazmat 
shipments, in addition to data about the number of serious hazardous 
materials incidents.\11\ We hope that Congress will encourage OHMS to 
baseline these data so that progress to meeting regulatory needs can be 
objectively measured over time.
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    \11\ Fiscal year 2008 PHMSA Budget Submission, pages 42-3.
---------------------------------------------------------------------------
    PHMSA presents several output efforts under the aegis of the 
Emergency Preparedness Grants Program (EPGP).\12\ Our concerns about 
the EPGP and these measures are discussed below.
---------------------------------------------------------------------------
    \12\ Fiscal year 2008 PHMSA Budget Submission, pages 121-2.
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Regulatory Backlog Reduction
    OHMS should be commended for its efforts to reduce regulatory 
backlogs. Last year, OHMS had eight open dockets designated as 
``significant.'' This year only four from that list remain.\13\ At the 
same time, OHMS has engaged in new rulemaking of significance to 
industry to better focus security plan requirements on security-
sensitive hazardous materials that would be of interest to terrorists.
---------------------------------------------------------------------------
    \13\ 71 FR 73663-9 (December 11, 2006).
---------------------------------------------------------------------------
    These rulemakings do not take into account rulemaking petitions, 
which OHMS has accepted but has not yet assigned to a specific 
rulemaking action. OHMS has pending 159 such rulemaking petitions, 53 
more than last year at this time.\14\ In addition, OHMS is in the ninth 
of a 10-year cycle to review the impact of the HMR on small entities 
and to determine, as a result of those impacts, which rules should be 
continued without change, amended, or rescinded, consistent with the 
objectives of applicable statutes. OHMS also takes this opportunity to 
receive comments to make the regulations easier to read and understand. 
These regulatory reviews were mandated by Congress pursuant to the 
Regulatory Flexibility Act (RFA).\15\ OHMS has finalized two of its 
regulatory reform proposals based on RFA reviews, while one rulemaking 
is pending. We are still waiting to see how OHMS will use the 
information collected during other prior year reviews to improve the 
HMR.
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    \14\ http://dms.dot.gov/reports/PHMSA_report.cfin, March 19, 2007.
    \15\ Public Law 96-354, section 610 as amended.
---------------------------------------------------------------------------
    While OHMS has historically processed over 200 hundred special 
permit requests annually--a commendable effort--the administration's 
budget request does not disclose information to assess the special 
permit workload. OHMS is under a statutory mandate to process special 
permits within 180 days. OHMS does periodically report in the Federal 
Register special permit requests it has received and those that it has 
failed to process within the statutory 180-day deadline. As an 
indicator of the effort OHMS has put forward in the last year to reduce 
backlogs, OHMS reported a monthly average of 56 special permit requests 
in process longer than 180 days during the first 3 months of 2006 and 
attributed over 87 percent of that delay to lack of staff resources 
given other priorities or volume of applications. In the first 3 months 
of this year, the monthly average of requests in process longer than 
180 days fell to 13 and the percent attributed to lack of staff 
resources fell to 84 percent. While part of the backlog decline should 
be attributed to increased productivity, Congress extended the timeline 
for most special permit renewals from 2 to 4 years. CY 2006 was the 
first full year where the effect of this statutory change could be 
observed. A helpful workload indicator to the subcommittee may be the 
actual number of special permit requests received, the actual number 
processed, and of that number, the actual number processed within the 
statutory 180-day deadline set by Congress. As noted above, OHMS has 
set for itself a performance measure to ``reduce the time for 
processing special permits and approvals by 10 percent.'' \16\
---------------------------------------------------------------------------
    \16\ Fiscal year 2008 PHMSA Budget Submission, page 40.
---------------------------------------------------------------------------
    One aspect of the hazmat regulatory workload that continues to 
present concern is the processing of petitions for preemption. This 
activity is managed by the PHMSA Office of Chief Counsel. Two petitions 
for preemption determinations are currently pending. Neither these, nor 
any prior petition for preemption, have been processed within the 
congressionally mandated 180-day turnaround.\17\ PHMSA' ability to 
swiftly deal with petitions for preemption is essential to the purpose 
Congress hoped to achieve in granting administrative preemption to DOT, 
namely that the preemption determination process would be an 
alternative to litigation.\18\ A priority of the HMTA is to achieve 
greater regulatory uniformity. Essential to that objective is the 
ability to respond through the preemption determination process to 
inconsistent non-Federal requirements that ``creat[e] the potential for 
unreasonable hazards in other jurisdictions and confound[] shippers and 
carriers which attempt to comply with multiple and conflicting 
registration, permitting, routing, notification, and other regulatory 
requirements.'' \19\
---------------------------------------------------------------------------
    \17\ 49 U.S.C. 5125(d).
    \18\ In authorizing the preemption determination process, Congress 
found that ``the current inconsistency ruling process has failed to 
provide a satisfactory resolution of preemption issues, thus 
encouraging delay, litigation, and confusion.'' H. Rept. 101-444, Part 
1, page 21.
    \19\ Public Law 101-615, sec. 2.
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Hazmat Registration and Fees
    We have appreciated the years of support and oversight the House 
and Senate Appropriations Committees have provided to ensure that fee 
collections have not been spent on activities above authorized amounts. 
The 2005 amendments to the HMTA have propelled us to a new era in the 
use and allocation of these fees. Over the objections of the regulated 
industry, the 2005 amendments to the HMTA nearly doubled the fees to be 
collected in support of the Emergency Preparedness Grant Program (EPGP) 
for States and Indian tribes, ``train-the-trainer'' grants for first 
responders, publication of the Emergency Response Guide (ERG), and, for 
the first time, grants to train hazmat employees. These fee increases 
will be effected in fiscal year 2008 for the 2008-09 registration year.
    Current law requires that the fees be deposited into the Hazardous 
Materials Emergency Preparedness Fund (HMEPF) and allows OHMS to 
transfer these funds ``without further appropriation.'' \20\ The hazmat 
fee program was never intended nor could it be expected to generate the 
amount of funds necessary to meet the needs of communities or first 
responders for planning or training for transportation-related 
chemical, biological or radiological incidents. DOT's hazmat 
registration fees are not the only source of financial assistance 
available to States to support emergency preparedness and response and 
the safe and secure transportation of hazardous materials shipments. 
Congress has already provided more comprehensive, direct sources of 
funding for emergency response planning and training. Since 2001, the 
administration has provided nearly $37.5 billion to State, local, and 
tribal governments to enhance first responder preparedness of which $22 
billion was allocated through DHS grant programs. This includes a total 
of $25.5 billion in support related to terrorism and catastrophic 
preparedness events, with $16.3 billion allocated through DHS. The 
fiscal year 2008 budget request proposes to add to these funds $2 
billion in grants for first responder preparedness. These funds are in 
addition to the over $5 billion in funds that State, local, and tribal 
governments are raising and spending on their own. While these funds 
are not dedicated to hazardous materials planning and training, these 
activities are an allowable use of the assistance, and in fact, the 
majority of these funds are used to assist communities to address 
chemical, biological, and radioactive incidents. Planning and training 
to respond and recover from these hazardous materials releases, whether 
accidental or intentional, is the same. We do not believe that the 
hazmat registration program would ever generate the levels of revenue 
provided by other sources even if all subject to the OHMS fees were 
assessed the maximum amount authorized by law because smaller carriers 
would simply chose not to transport hazardous materials. For these 
reasons, it is important that the subcommittee continue to scrutinize 
the amount of hazmat fees that can be transferred from the HMEPF and to 
cap transfers at levels the subcommittee believes will be appropriately 
spent.
---------------------------------------------------------------------------
    \20\ 49 U.S.C. 5116(i).
---------------------------------------------------------------------------
    Thirty percent--$4 million--of the $13.5 million fee increase 
provided by the 2005 amendments is earmarked to train trainers of 
private sector hazmat employees or hazmat employees themselves. Prior 
to the 2005 amendments, this private sector training program was 
authorized only to train ``trainers'' and was funded from general 
revenues at $3 million per year. Hazmat employers have never advocated 
for a Federal appropriation for this training option. The HMTA is clear 
that hazmat employers are responsible for the training of hazmat 
employees. Yet, this program is of no benefit because the training 
provided is limited to that offered by non-profit hazmat employee 
organizations, organizations that are unlikely to be relied upon to 
provide the specific and specialized training each company is liable to 
provide to address its own unique hazmat environment. Any potential 
hazmat employee who availed themselves of such training from a third-
party non-profit training organization would still have to be trained 
in his employer's hazmat operations. Furthermore, these funds are not 
needed to spur companies or organizations to get into the training 
business. There are a number of companies that offer hazmat training 
already. The real issue with private sector training is assessing the 
quality of the training that is available. Industry is already facing 
millions of dollars of additional fees for other aspects of the EPGP. 
This program amounts to a double taxation for hazmat employee training. 
Using industry fees for this purpose cannot be justified. If these 
funds will be made available for these purposes, we are pleased that 
OHMS has determined to make ``the new grant program will be 
competitive.'' \21\
---------------------------------------------------------------------------
    \21\ Fiscal year 2008 PHMSA Budget Submission, page 123.
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Emergency Planning and Training Grants
    The purpose of the Emergency Preparedness Grants Program (EPGP) is 
to cover the ``unfunded'' Federal mandate that States develop emergency 
response plans and to contribute toward the training of emergency 
responders. Industry has contributed, through hazmat registration fees, 
nearly $183 million during the life of the grants program.\22\ Since 
the events of September 11, 2001, we question whether or not the EPGP 
is the most efficient way to deliver hazmat training to the response 
community, especially in light of other viable alternatives to address 
these needs. Even OHMS admits that this program, at most, provides 
``funds that might not otherwise be available'' to localities for 
training and planning for hazardous materials incidents.\23\ Still, 
OHMS' characterization of the EPGP would have one believe that the 
funds are limited to planning and training to respond to 
transportation-related hazmat incidents only. There is no such 
limitation.\24\
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    \22\ Fiscal year 1992-2006, HMRP, DOT, October 6, 2006.
    \23\ Fiscal year 2008 PHMSA Budget Submission, page 121.
    \24\ 49 U.S.C. 5116(a) & (b).
---------------------------------------------------------------------------
    We have, for a number of years, called for more accountability in 
the EPGP and more evidence of coordination among other similar Federal 
initiatives to ensure that all resources are used as efficiently and 
effectively as possible. We are not alone in our concern. In 2005, the 
Volpe Center issued a report making recommendations to better align 
grantee activities with program goals.\25\ The 2005 amendments also 
directed OHMS to submit annual reports to Congress on the allocation 
and uses of the grants, identify the ultimate recipients and providing 
a detailed accounting of all grant expenditures as well as an 
evaluation of the efficacy of the programs carried out. OHMS was also 
directed to make this information available to the public.\26\ However, 
no reports or information have been forthcoming.
---------------------------------------------------------------------------
    \25\ Hazardous Materials Emergency Preparedness Grants Program; 
Assessment of the alignment between local activities and program goals, 
John A. Volpe National Transportation Systems Center, for PHMSA, 
October 2005.
    \26\ 49 U.S.C. 5116(k).
---------------------------------------------------------------------------
    The EPGP also restates the claim of the last several years that it 
will provide support to update and develop at least 3,000 emergency 
plans during fiscal year 2008.\27\ The incredulity of this claim still 
warrants oversight. Using a productivity analysis alone, OHMS has not 
adjusted its workload output one iota since its request for funding 
this activity increased 63 percent.\28\ Congress intended that the 
planning grants portion of the EPGP be used to ``develop, improve, and 
carry out emergency plans under the Emergency Planning and Community 
Right-To-Know Act'' (EPCRA).\29\ EPCRA requires State coordinating 
commissions (SERC) to designate Local Emergency Planning Committees 
(LEPC) which were charged to develop localized plans for chemical 
emergencies, of which one type may be transportation-related hazmat 
incidents. So, it should come as no surprise that PHMSA sets as a 
measure of the impact of the EPGP a number of these emergency plans to 
be developed and updated. What is surprising is the target number of 
plans to be completed or updated. First, EPA estimates that the current 
number of LEPCs is about 3,500.\30\ Each LEPC prepares one plan, so at 
most 3,500 plans would need support. Second, LEPCs were in existence 
before the inception of the EPGP. EPCRA was enacted in 1986 and has 
required LEPCs to have ``complete'' plans in place since the late 
1980s. Once an LEPC's plan is ``complete,'' based on acceptance by the 
LEPC's SERC, LEPCs are not required to ``re-complete'' these plans each 
year, although they are required to annually ``review'' their plans. 
Third, EPA last surveyed LEPC compliance in between October 1999 and 
February 2000.\31\ At that time, the agency found that approximately 45 
percent of responding LEPCs had completed plans and another 10 percent 
mostly complete. Furthermore, 24 percent of LEPCs had incorporated 
counterterrorism measures into their emergency response plans. Using 
these percentages, it would appear that 1,600 would be a more accurate 
projection of the number of emergency plans to be completed, not 
3,000.\32\ Furthermore, it is unlikely, given EPA's assessment of 
``completed'' and approved plans, that any significant portion of these 
plans are being reopened and revised.
---------------------------------------------------------------------------
    \27\ Fiscal year 2008 PHMSA Budget Submission, page 122.
    \28\ Prior to fiscal year 2007 when funding for the EPGP grants 
program was due to increase and, except for the fiscal year 2007 
continuing resolution, would have, the project number of plans to be 
assisted was 3,000. With the funding increase, the number is still 
3,000. [Inconsistencies in the budget submission, further underscore 
the need for oversight and accountability of this program. Compare page 
122 (3,000 plans), with page 159 (5,000 plans) and page 160 (3,700 
plans). Similar inconsistencies can be noted with regard to training 
first responders by comparing pages 159 and 160.]
    \29\ 49 U.S.C. 5116(a)(1)(A).
    \30\ http://yosemite.epa.gov/oswer/ceppoweb.nsf/content/
epcraOverview.htm
    \31\ 1999 Nationwide LEPC Survey, George Washington University for 
EPA, May 17, 2000. http://yosemite.epa.gov/oswer/ceppoweb.nsf/
vwResourcesByFilename/lepcsurv.pdf/$File/ lepcsurv.pdf. EPA is 
preparing to update this survey with results available in the fall of 
2007. 70 FR 54044 (September 13, 2005).
    \32\ Not all LEPCs responded to the latest EPA survey. Even 
assuming that every one of the non-respondents had no plan, together 
with those known to have no plan or an incomplete plan, the number of 
plans needing completion would be 2,500, still under the 3,000 estimate 
provided for fiscal year 2008.
---------------------------------------------------------------------------
    Finally, OHMS claims that is will ``plan and hold 15 annual, 
national monitoring and technical assistance sessions where grantees, 
responders and [LEPCs] members present program accomplishments and 
receive technical assistance from a team of Federal and non-Federal 
experts.'' \33\ This ambitious schedule would require more than one 
``national'' session per month, planned and supported for $13,333 per 
session. Irrespective of frequency or number of technical assistance 
meetings held, however, little is known about where the meetings are 
held, how many Federal and non-Federal personnel attend, for how long, 
exactly what is allowed to be reimbursed or spent with the $200,000 
allotted for this purpose. As a fiduciary matter, the subcommittee may 
wish to explore this matter further.
---------------------------------------------------------------------------
    \33\ Fiscal year 2008 PHMSA Budget Submission, page 121.
---------------------------------------------------------------------------
    OHMS' assertion that the training grants are ``to ensure [that the 
LEPC] plans can be effectively implemented'' is misleading.\34\ There 
is no statutory limitation that these training funds can only be used 
to train on the implementation of the LEPC plans. No proof has ever 
been offered to this effect. Since the planning and training grantees 
are different entities, it would be highly unlikely that LEPC plan 
implementation would be the focus of the training first responders 
receive. In fact, local emergency preparedness training is based on an 
``all-hazards'' approach. This approach requires communities to assure 
that emergency personnel have the training necessary to respond to a 
wide range of emergencies: intentional or naturally occurring 
infectious disease outbreaks; chemical, explosive or radiological 
accident or attack; weather-related disaster; or other emergency.
---------------------------------------------------------------------------
    \34\ Fiscal year 2008 PHMSA Budget Submission, page 121.
---------------------------------------------------------------------------
    In contrast to the evidence that suggests the level of financial 
support needed for LEPC plans is waning, the needs of first responders 
for training significantly eclipse the amount available from the EPGP, 
which if funded at the level of the administration's request offers a 
grant package of only $13.7 million and, of that, only 75 percent is 
passed through to localities.\35\ Given the plethora to other viable 
alternatives to address the needs of the response community, the EPGP 
is at best inconsequential, but more realistically, a program that has 
outlived its relevance and usefulness.
---------------------------------------------------------------------------
    \35\ Fiscal year 2008 PHMSA Budget Submission, page 23.
---------------------------------------------------------------------------
    While the law provides that OHMS can expend industry's hazmat 
registration fees for the EPGP ``without further appropriation,'' \36\ 
we would encourage the subcommittee to exercise its oversight to 
address these programmatic issues and concerns before handing over a 
blank check. The subcommittee has established congressional precedent 
in this area, setting caps on the amount of the fees that may be 
expended for the EPGP. As an indication of congressional concern that 
the LEPC set-aside may not be the best use of the new $9 million fee 
increase in the EPGP, the 2005 HMTA amendments provide discretion to 
DOT to limit or deny new funding. While allowing a 35/65 percent split 
of the new funds between the planning and training accounts, the law 
also provides that up to all of the increase may be allocated to the 
training portion of the EPGP.\37\ Yet, the allocation proposed in the 
OHMS fiscal year 2008 budget submission does not reference the 
statutory latitude that the Secretary has to move funds from the 
planning to the training account nor does it describe any sort of 
analysis that would justify making no adjustment to the 35/65 split. 
OHMS should be asked to prioritize the needs and value of the planning 
and training portions of the EPGP to the safety and security of 
hazardous materials transportation.\38\ The subcommittee should use 
this information to redirect the new $9 million allocation up to the 
maximum extent allowed.
---------------------------------------------------------------------------
    \36\ 49 U.S.C. 5116(i).
    \37\ 49 U.S.C. 5128(b)(2).
    \38\ For example, how many first responders accessed their 
community's LEPC plan prior to responding to a recent hazmat 
transportation emergency?
---------------------------------------------------------------------------
    Our efforts to address EPGP shortcomings with PHMSA have not been 
satisfactory. We believe that the subcommittee is best suited to demand 
a level of oversight that will continue annually and that will include 
a complete accounting of funds distributed and their use as know 
required by law, not the type of anecdotal ``successes'' that comprised 
so much of PHMSA's 1998 report to Congress on this program.
Hazmat Intermodal Portal
    PHMSA is proposing to increase funding to implement the Intermodal 
HAZMAT Portal. The Intermodal Portal is a DOT-wide data system that 
allows all modes to integrate ``stovepiped date, to collaborate, and to 
monitor business processes.'' \39\ This initiative was identified by 
DOT in 2000 and the OMB PART review.\40\ We support this initiative. 
The transportation of hazardous materials is an intermodal enterprise. 
The Department cannot fully understand the issues facing this commerce 
without taking a systemwide view. Too often, modal responses to issues 
only shifts risk to other modes than may be less prepared to deal with 
them.
---------------------------------------------------------------------------
    \39\ Fiscal year 2008 PHMSA Budget Submission, page 46.
    \40\ ``Departmentwide Program Evaluation of the Hazardous Materials 
Transportation Programs,'' Executive Summary, March 2000, pages xvi & 
xvii; and OMB PART recommendations No. 1 & 2, March 2005, fiscal year 
2008 PHMSA Budget Submission, page 50.
---------------------------------------------------------------------------
Program Funding Decreases
    While we support the Hazmat Intermodal portal initiative, we are 
concerned about decreases in other OHMS operations. The budget request 
proposes to decrease funds for the research and analysis capacity 
necessary to support the development of new or the revision of existing 
regulations, to defer maintenance of and to defer the introduction of 
new features and enhancements to the Hazardous Materials Information 
System; and to scale back the package testing program.\41\ We urge the 
subcommittee to restore these funding decreases.
---------------------------------------------------------------------------
    \41\ Fiscal year 2008 PHMSA Budget Submission, page 47.
---------------------------------------------------------------------------
    Regulation is vital to the transport of hazardous materials. The 
HMR is structured so that hazardous materials do not move unless a 
department rule says it can move. Additionally, the industry is so 
large and diverse that the only way to ensure a level playing field is 
to hold industry to the same regulatory performance standards. These 
realities require that OHMS not only be heavily engaged in rulemaking, 
but the rulemaking process must be efficient. OHMS' research and 
analysis capability identifies safety and security gaps in the hazmat 
transportation system. In the risk analysis area, OHMS is heavily 
dependant on this capability to determine equivalent levels of safety 
in order to process what has been annually over 200 new special permit 
petitions.\42\ If anything, OHMS rulemaking resources should be 
increased to ensure against regulatory backlogs.
---------------------------------------------------------------------------
    \42\ OMB Part Recommendation No. 4, March 2005, directs that PHMSA 
``develop a new efficiency measure that characterizes the time to issue 
special permits from the date of application,'' fiscal year 2008 PHMSA 
Budget Submission, page 50.
---------------------------------------------------------------------------
    We want to underscore the importance and necessity of the HMIS. 
This system supports PHMSA's key measurement of its goal to reduce 
deaths, injuries, property damage and economic disruptions from 
hazardous materials transportation incidents. The data collected and 
maintained in the database is not available from other sources. Not 
only does the HMIS allow OHMS to identify and analyze safety risks for 
regulatory purposes, it also (1) assists non-Federal governments to 
identify problematic routes; (2) can be used to focus enforcement 
efforts; (3) is used by industry in its risk management initiatives, 
and (4) can be used to defuse public concern about hazardous materials 
transportation by validating the extraordinary safety record of this 
industry, considering the potential of these materials to cause serious 
harm. If OHMS/PHMSA is to be a ``data-driven'' operation, this is not 
the account to cut.\43\
---------------------------------------------------------------------------
    \43\ Fiscal year 2008 PHMSA Budget Submission, page 6.
---------------------------------------------------------------------------
    As noted, the transportation of hazardous materials is extensively 
regulated. A key component to the effectiveness of these regulatory 
schemes is credible enforcement. In order to determine what those needs 
may be, it is critical that the agency know who it is regulating. About 
200,000 hazmat shippers, packaging manufacturers and testers are the 
focus of PHMSA's compliance efforts. This is a daunting universe to 
inspect with a cadre of 30, and hopefully soon 34, inspectors. However, 
key to credible enforcement is OHMS ability to test packagings. The 
packaging standards are the basis for the HMR. Packaging differs by the 
type and amount of material to be shipped. The packaging standards are 
DOT's assurance to the public that hazmat can move safely in 
transportation. In 1990, the PHMSA adopted internationally-recognized 
performance-based standards for the transportation of hazardous 
materials, in lieu of specification standards. The only way to ensure 
regulatory compliance is to test packagings. It is disingenuous for 
PHMSA to declare that one of the anticipated accomplishments for the 
2008 fiscal year will be to ``dedicate resources to testing new 
packagings against PHMSA's performance standard to ensure that hazmat 
containers are adequate to meet safety requirements during transport,'' 
when the budget request cuts the agency's package testing program.\44\
---------------------------------------------------------------------------
    \44\ Fiscal year 2008 PHMSA Budget Submission, pages 39, 40 and 
138.
---------------------------------------------------------------------------
                               conclusion
    The transport of hazardous materials is a multi-billion dollar 
industry that employs millions of Americans. This commerce has been 
accomplished with a remarkable degree of safety, in large part, because 
of the uniform regulatory framework authorized and demanded by the 
HMTA. Within the Federal Government, OHMS is the competent authority 
for matters concerning the transportation of these materials. Despite 
productivity that averages 40 administrative actions a day, this small 
agency still has a backlog of correspondence, rulemaking petitions, and 
technical applications for exemptions and approvals. We, therefore, 
strongly recommend full funding for OHMS.
    Thank you for your attention to these issues.
                                 ______
                                 
Prepared Statement of the Capital Metropolitan Transportation Authority
    Mr. Chairman and members of the subcommittee: On behalf of the 
Capital Metropolitan Transportation Authority in Austin, Texas, I am 
pleased to submit this statement for the record in support of our 
fiscal year 2008 funding requests from the Federal Transit Authority 
for Capital Metro--the transportation provider for Central Texas. I 
hope you will agree that the appropriating of funds for these Central 
Texas projects warrants serious consideration as Austin and the 
surrounding Texas communities plan for our region's growing 
transportation needs.
    First, let me thank you for your past financial support for 
transportation projects in Central Texas. Your support has proven 
valuable to Capital Metro and to our Central Texas community as we face 
new challenges.
    As you know, Interstate 35 runs from Canada to Mexico, and along 
the way it also runs through the city of Austin and Capital Metro's 600 
square mile service area. While traffic in this important corridor has 
always been a challenge, the North American Free Trade Agreement has 
resulted in increased traffic and congestion for our region. In fact, a 
2002 study by the Texas Transportation Institute determined Austin, 
Texas to be the 16th most-congested city nationwide.
    Also, Central Texas' air quality has reached near non-attainment 
levels. Together, our community has developed a Clean AirForce, of 
which Capital Metro is a partner, to implement cooperative strategies 
and programs for improving our air quality. Capital Metro has also 
unilaterally implemented several initiatives such as converting its 
fleet to clean-burning Ultra Low Sulfur Diesel (ULSD), becoming the 
first transportation authority in Texas to introduce environmentally-
friendly hybrid-electric buses, and creating a GREENRide program to 
carpool Central Texas workers in low emission hybrid gas/electric 
automobiles.
    To address these transportation and air quality challenges as well 
as our region's growing population, in 2004 Capital Metro conducted an 
extensive community outreach program to develop the All Systems Go 
Long-Range Transit Plan. This 25-year transportation plan for Central 
Texas was created by Capital Metro, transportation planners, and local 
citizens. More than 8,000 citizens participated in the design of the 
program that will bring commuter rail and rapid bus technologies to 
Central Texas. The plan will also double Capital Metro's bus services 
over the next 25 years.
    By a vote of over 62 percent, this long-range transportation plan 
was adopted by the Central Texas community in a public referendum on 
November 2, 2004. The plan received bipartisan support, along with 
endorsements from the business community, environmental organizations, 
neighborhood associations, and our community leaders.
    An important component of the All Systems Go Long Range Transit 
Plan is the creation of an urban commuter rail line along a 32-mile 
long freight rail line currently owned and operated by Capital Metro. 
The proposed starter route would provide urban commuter rail service 
extending from downtown Austin (near the Convention Center) through 
East and Northwest Austin and on to Leander.
    To implement the community's All Systems Go Transit Plan, Capital 
Metro is seeking $10 million for fiscal year 2008 for four projects of 
importance to our Central Texas community:
  enhancement and improvement of buses and bus facilities--$5 million
    Capital Metro has embarked on a long term plan to improve and 
expand bus service. In addition to improving bus routes, the agency is 
investing in critical park and ride facilities, transit centers and 
enhanced bus stop locations and amenities. As Capital Metro's service 
area and the population we serve continue to grow, we will continue to 
enhance our system and facilities while addressing traffic congestion 
and air quality concerns. In the next 3 years, Capital Metro has 
planned to invest $82.5 million in capital projects to better serve our 
growing population. Capital Metro seeks $5 million from the 
appropriations process for these improvements and expansions of our bus 
service and facilities.
              oak hill park and ride facility--$2 million
    The Oak Hill Park and Ride facility will anchor Capital Metro's 
future rapid bus services to rapidly growing areas of Southwest Austin 
and Travis County. This facility and its routes will connect local 
service to several nearby neighborhoods to serve the growing number of 
suburban commuters in this portion of Capital Metro's service area. 
Capital Metro is seeking $2 million for this project.
          urban commuter rail circulator vehicles--$2 million
    Capital Metro's 32-mile Urban Commuter Rail line will begin 
operations in 2008, serving 9 stations throughout Central Texas. Urban 
Commuter Rail circulator vehicles will serve each of the stations to 
transport passengers to and from their final destinations, connecting 
with the MetroRail. Capital Metro is seeking $2 million for this 
project.
                paratransit service vehicles--$1 million
    Pursuant to, and in accordance with, the Americans with 
Disabilities Act, Capital Metro provides door-to-door van and sedan 
paratransit service throughout Central Texas for persons with 
disabilities and senior citizens. This $11.7 million (fiscal year 2007) 
program provides more than 500,000 rides each year. Capital Metro will 
be replacing many of the vans and sedans that serve this program, as 
they are retired during fiscal year 2008. This crucial funding will 
assist Capital Metro in ensuring the accessibility of transportation 
services for all Central Texans.
    I look forward to working with the committee in order to 
demonstrate the necessity of these projects. Your consideration and 
attention are greatly appreciated.
                                 ______
                                 
          Prepared Statement of the City of San Marcos, Texas
    Mr. Chairman and members of the subcommittee: On behalf of the city 
of San Marcos, Texas, I am pleased to submit this statement in support 
of our requests for project funding for fiscal year 2008.
    The city of San Marcos requests Federal funding for the San Marcos 
Municipal Airport to accomplish improvements that are in the public 
interest. The improvements are described in the three specific projects 
listed below:

------------------------------------------------------------------------
                                                                Amount
------------------------------------------------------------------------
Northside Infrastructure Development.......................   $3,500,000
New Terminal Building......................................    4,500,000
Fixed Base Operator (FBO) Facility.........................    1,500,000
                                                            ------------
    Total Request..........................................    9,500,000
------------------------------------------------------------------------

    The San Marcos Municipal Airport is a public general aviation 
airport classified as a reliever airport within the National Plan of 
Integrated Airport Systems. The airport is owned and operated by the 
city of San Marcos, Texas. It is located just east of Interstate 
Highway 35 on Texas Highway 21 approximately 30 miles south of Austin 
and 45 miles north of San Antonio in one the fastest growing corridors 
in Texas.
    The airport is part of a closed military base; the remainder of the 
former Air Force Base is occupied by the U.S. Department of Labor's 
Gary Job Corps Center. When the base was closed and divided in 1966, 
the Job Corps retained the portion of the property with the buildings 
and other amenities while the city of San Marcos was given the 
aeronautical facilities consisting of runways, taxiways, and the 
parking apron.
    This arrangement has resulted in a ``bare bones'' airfield that 
lacks the support structure to sustain an economically viable modern 
airport. We have adequate aeronautical facilities and real estate but 
little other facilities. In addition, current legislation provides for 
airport capital improvement funding assistance through the Federal 
Aviation Administration for aviation infrastructure, but not for the 
type of improvements that this airport needs.
    The city of San Marcos requests assistance to transform the airport 
into a modern, self-sustaining enterprise benefiting not only the local 
community but the region. After analysis and master planning, we have 
determined that the three projects herein described will get us the 
``biggest bang for the buck''. These projects will meet our highest 
priorities and most immediate needs, and they will be a highly visible 
indicator that the San Marcos Municipal Airport is on the move. We are 
firmly convinced that these improvements will kick-start further 
development and attract private investment that will far surpass the 
amount that we are seeking in Federal support.
    The following program descriptions outline our three requests:
Northside Infrastructure Development--$3,500,000
    The layout of the former Gary Air Force Base is such that all the 
buildings and developed area of the base were to the south of the 
airfield. When the base was divided between the Gary Job Corps Center 
and the San Marcos Municipal Airport, the airport was given only a thin 
sliver of land on the south side to provide access and support the 
airfield. There is not enough room for all the support facilities such 
as hangars, maintenance shops, and terminal buildings that an active 
airport requires.
    However, on the north side of the airfield is real estate that has 
never been developed. One prime piece of the north side area consists 
of approximately 40 acres of very desirable airport land that fronts on 
Texas Highway 21 and borders an existing taxiway that will become the 
main taxiway for the entire north side development. Except for the 
absence of infrastructure, it is the ``McDonald's'' location on the 
airport. The area requires access roads including a main airport 
entrance, drainage improvements, aircraft ramps and aprons, existing 
taxiway pavement reconstruction, and utilities. It also needs a seed 
project to stimulate private investors to move into the area.
    Our plan proposes to construct the infrastructure and to then build 
approximately 50 nested T-hangars in 2 or 3 city-owned buildings. Our 
planning estimate for the cost to implement this project is $3,500,000. 
We are also convinced that once this north side development ball starts 
to roll, the future of the new San Marcos Municipal Airport will shift 
from the current limited and constrained south side to the several 
hundred acres of prime undeveloped land available on the north side.
New Terminal Building--$4,500,000
    The commercial, economic, and public service hub of a modern 
airport is the public terminal building. The terminal building provides 
public amenities such as a waiting room or lounge, airport 
administration offices and public meeting rooms, restrooms, flight 
planning facilities and communications links to obtain flight planning 
information, commercial lease space for such businesses as restaurants, 
retail shops, rental car facilities, and other aviation-related 
commercial activities.
    An airport's facilities will be the first thing a business traveler 
will see, and it's those facilities which represent the city of San 
Marcos. These facilities are sorely lacking in our present airport 
configuration and the existing terminal building is undersized to meet 
existing demand, much less provide room for growth. It is opportune 
that the Federal Aviation Administration is programming a new air 
traffic control tower for our airport in fiscal year 2007. A new 
terminal building located adjacent to the control tower could be 
architecturally coordinated with the control tower for aesthetic 
advantage. The two facilities could achieve a significant efficiency in 
the coordinated construction of road access, utility services, parking 
facilities, drainage improvements, and landscaping. This same concept 
is being touted at several other airports similar to ours. (Dallas 
Executive Airport is a prime example.) The planned terminal building 
planning concept is for a modern, state-of-the-art building of 
approximately 10,000 square feet first floor and total cost estimated 
at $4,500,000.
Fixed Base Operator (FBO) Facility--$1,500,000
    For general aviation operations, airport activity centers on the 
FBO. This is where the transient and based pilots and aircraft 
operators go to buy fuel and obtain direct support for their flights. 
It is also a place where transient and based pilots can arrange to have 
their aircraft serviced, repaired, and hangared overnight or longer 
when required.
    It is again opportune that the San Marcos Municipal Airport has an 
established FBO that is capable of accomplishing these vital services 
if a facility were available for them to lease. We propose that a 
modern, state-of-the-art FBO be constructed to meet the airport's 
present and future commercial requirements. The approximately 30,000 
square foot structure would be mainly hangar space with an attached 
business, shop, and office area. Cost is estimated at $1,500,000. Lease 
payments and other airport fees would offset this investment; and the 
investment is calculated to be a profitable enterprise for the airport 
in the long term.
    The 1,356 acre San Marcos Municipal Airport is a potential economic 
dynamo for this region of Central Texas. The three airport improvement 
projects that we are proposing will result in an increase in activity 
and private investment. This is a good investment of public revenue 
that will result in more high-paying aviation jobs, an increased tax 
base, and more direct revenues in the form of airport fees and rents. 
Our airport will also better serve the aviation needs of the region and 
spur further growth, development, and prosperity for our citizens. 
These projects are grounded in sound public policy principles. They 
will result in excellent value for the American taxpayer and for the 
traveling public that will utilize the facilities.
    The city of San Marcos sincerely appreciates your consideration of 
these requests for funding in the fiscal year 2008 cycle, and 
respectfully requests your support.
                                 ______
                                 
   Prepared Statement of the University Corporation for Atmospheric 
                            Research (UCAR)
    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, Housing and Urban 
Development, and Related Agencies.
    UCAR is a consortium of 70 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 serve and 
provide leadership to the atmospheric sciences and related communities 
through research, computing and observational facilities, and education 
programs that contribute to 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 Highway Administration (FHWA), and the Federal 
Aviation Administration (FAA). I would like to comment on the fiscal 
year 2008 budgets for these agencies.
                   the federal highway administration
    The fiscal year 2008 budget request for the FHWA should support the 
administration's and the country's commitment to a safe, efficient, and 
modern surface transportation system. Weather research and intelligent 
transportation system (ITS) technology significantly contributes to 
this commitment. According to the National Academy of Sciences, adverse 
weather conditions obviously reduce roadway safety, capacity and 
efficiency, and are often the catalyst for triggering congestion. In 
the United States each year, approximately 7,000 highway deaths and 
450,000 injuries are associated with poor weather-related driving 
conditions. This means that weather plays a role in approximately 28 
percent of all crashes and accounts for 19 percent of all highway 
fatalities. The economic toll of these deaths and injuries is estimated 
at $42 billion per year. The societal and economic impacts of adverse 
weather on the highway system are obviously enormous.
Road Weather Research and Development Program
    The Road Weather Research and Development Program funds the 
collaborative work of surface transportation weather researchers and 
stakeholders. This work is potentially life saving for the users of the 
national surface transportation system. Much has been accomplished 
already in understanding and developing decision support systems to 
address the impact of poor weather on the surface transportation system 
including congestion. However, it should be noted that according to the 
2004 National Research Council's report titled, Where the Weather Meets 
the Road: A Research Agenda for Improving Road Weather Services, the 
investment required to satisfy the unmet needs for road weather 
information is $25 million per year for 15 years. An investment at this 
level would be focused on developing decision support systems for 
traveler information systems, winter road maintenance, traffic 
management, incident and emergency management, in-vehicle information 
systems through the vehicle infrastructure integration program, and 
ITS. Enhanced research on pavement condition prediction, snow and ice 
control, fog, road friction, flooding, thunderstorm forecasting, icing, 
sensor development, and other areas will result in significant savings 
in lives and dollars.
    Only recently has the FHWA begun investing in road weather research 
and this investment level has been extremely low ($2.8 million per 
year), considering its impact on the transportation system. An 
adequately funded road weather research program will improve the 
safety, capacity, efficiency and mobility (by reducing congestion), of 
the national roadway system. It will benefit the general public, 
commercial trucking industry, State DOT traffic, incident and emergency 
managers, operators and maintenance personnel.
    The 2006 Transportation Reauthorization bill, SAFETEA-LU (section 
5308) contains language that establishes the Road Weather Research and 
Development Program within the FHWA ITS Research and Development 
Program, with annual funding at $4 million (significantly less than the 
NRC recommendation of $25 million). The fiscal year 2008 request is 
only $3 million and may be found within the FHWA Intelligent 
Transportation Systems account. This program is well supported by 
numerous organizations including the American Association of State 
Highway and Transportation Officials (AASHTO), the Intelligent 
Transportation Society of America (ITSA), the Transportation Research 
Board (TRB), the National Research Council (NRC), State Departments of 
Transportation (DOTs), and the American Meteorological Society (AMS). I 
urge the committee to fund the Road Weather Research and Development 
Program at $4 million, at a minimum, in fiscal year 2008.
                 federal aviation administration (faa)
    Our Nation's air transportation system has become a victim of its 
own success. We created the most effective, efficient and safest system 
in the world. But we now face a serious and impending problem . . . 
demand for air services is rising, and could as much as triple over the 
next 2 decades.
                                                FAA Administrator, 
                                                Marion Blakey, July 
                                                2006
Research and Engineering Development Account (RE&D)
    The following three programs can be found within the RE&D section 
of the fiscal year 2008 FAA budget request.
            Weather Program
    The FAA anticipates a three-fold increase in demand on the National 
Airspace System (NAS) by 2025; any air travel interruption, including 
weather problems, will result in overwhelming flight delays. The FAA 
and airlines have done a remarkable job of minimizing delays given the 
limited airport and system capacity. But major weather related delay 
events, such as the 2006 Denver blizzard over the holidays, have left 
thousands of travelers stranded and cost the industry many millions of 
dollars. This recent incident indicates existing vulnerabilities that 
must be addressed.
    Research and development conducted today forms the basis for 
tomorrow's operational products. Enhanced weather forecasts as well as 
improved use of forecasts will contribute to a reduction in weather 
impacts. The FAA's Weather Program focuses on projects that address the 
current challenges of operating the safest, most efficient air 
transportation system in the world while building a foundation for the 
Next Generation Air Transportation System (NextGen). For fiscal year 
2008 and beyond, FAA is focusing on capabilities to help stakeholders 
at all levels make better decisions and better react to avoidable 
weather situations, thus minimizing their impact.
    To mitigate the effects of weather, the FAA's Weather 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 and forecasting technologies into 
operational use. Leveraging the work of the research community, the FAA 
has made tremendous strides in understanding and mitigating the impacts 
of severe weather on aviation. Enhanced research on turbulence, 
thunderstorm forecasting, oceanic weather, icing, and other areas can 
result in even more savings, in both lives and dollars. The fiscal year 
2008 request for the Weather Program is $16.8 million, down from the 
fiscal year 2007 request of $19.5 million. This program continues to be 
severely under funded. To truly be responsive to the new weather 
research capabilities and national needs, the Weather Program needs to 
be doubled and funded at about $35 million. I urge the committee to 
fund the Weather Program at the fiscal year 2007 requested level of 
$19.5 million, at a minimum.
            Joint Planning and Development Office (JPDO)
    In preparation for a burgeoning National Airspace System, 4 years 
ago the President and Congress created the multi-agency Joint Planning 
and Development Office (JPDO) to oversee planning related to NextGen. 
The JPDO, in its brief existence, has already accomplished much, and 
has defined eight critical strategies to meet the goals and objectives 
for NextGen--one of which is focused on mitigating the impacts of 
weather on the air transportation system.
    The President's fiscal year 2008 request of $14.3 million for JPDO 
is not an adequate level of funding, given the challenges of bringing 
the aviation system up to 21st Century needs. The request is down 21 
percent from the fiscal year 2007 request of $18.1 million. To 
accomplish an initiative of this magnitude and complexity, JPDO should 
be doubled to $28 million. I urge the committee to fund the Joint 
Planning and Development Office at the fiscal year 2007 requested level 
of $18.1 million, at a minimum.
            Wake Turbulence
    Better detection and forecasting of wake turbulence, dangerous 
swirling air masses trailing from aircraft wingtips, is a key element 
in the FAA's safety program. Research results and technologies derived 
from the Wake Turbulence program will allow airports and airlines to 
operate more efficiently, increasing capacity and safety, by providing 
a better understanding of this phenomenon. I urge the committee to 
support the fiscal year 2008 request of $10.7 million for the wake 
turbulence program.
Facilities and Equipment Account
    The following program can be found within the Facilities and 
Equipment Account on the FAA's fiscal year 2008 budget request.
            Wind Profiling and Weather Research--Juneau
    High wind and terrain-induced turbulence information can help 
airlines adjust their routes and schedules to optimize usage of the 
airport. Within the FAA's Facilities and Equipment Budget the program, 
Wind Profiling and Weather Research--Juneau, supports the Juneau 
Airport Wind System (JAWS), a developing operational system designed to 
detect and warn of wind and airport turbulence hazards. I urge the 
committee to support the administration's fiscal year 2008 request of 
$4.0 million for Wind Profiling and Weather Research--Juneau.
    On behalf of UCAR, as well as all U.S. citizens who use the surface 
and air transportation systems, I want to thank the committee for the 
important work you do that supports the 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 2008 FHWA 
and FAA budgets and we appreciate your concern for safety within the 
Nation's transportation systems.
                                 ______
                                 
                 Prepared Statement of Foothill Transit
    Mr. Chairman and members of the subcommittee, my name is Doran 
Barnes, and I serve as the Executive Director of Foothill Transit in 
West Covina, California. Thank you very much for the opportunity to 
submit testimony to this subcommittee.
    Mr. Chairman, I recognize the difficult tasks before this 
subcommittee and commend your leadership in determining the allocation 
of available transportation resources during this congressional budget 
period. We are very appreciative of the strong support provided to 
Foothill Transit by this committee over the past 12 years. The support 
of your committee has enabled Foothill Transit to construct two 
operating and maintenance facilities and initiate replacement of our 
aging bus fleet with new compressed natural gas coaches, as well as 
embark upon providing commuter parking to encourage transit ridership. 
These initiatives will greatly enhance the service we provide to our 
customers.
                     why this bus capital request?
    Thanks to the unwavering support of our congressional delegation, 
Foothill Transit has been extremely successful in achieving its capital 
goals. Our fiscal year 2008 funding request is for $10 million in 
Discretionary Bus Capital funding to assist Foothill Transit in 
partnering with member cities by providing funding for commuter parking 
in transit-oriented neighborhood projects. This funding will be used 
for our innovative ``Transit Oriented Neighborhood Program'', which 
offers a win-win solution for commuters and communities in the San 
Gabriel and Pomona Valleys. Through this program, we will assist our 
member cities and the County of Los Angeles with the construction of 
facilities with 500 to 1,000 commuter parking spaces in neighborhood 
projects each year.
    The program, begun in fiscal year 2004, provides an incentive for 
Foothill Transit's 21 member cities and unincorporated areas of Los 
Angeles County to include commuter parking in their plans for mixed-
use, transit-oriented projects. Foothill Transit is working with our 
local cities by partnering to develop projects that meet our common 
goals. Projects are intended to serve the dual purpose of facilitating 
transit use during daytime commuter hours, and providing general public 
parking for dining, shopping, and other uses during evening hours and 
weekends
    Over the past several years, commuter parking in Foothill Transit's 
service area has dwindled, culminating in the closure of a major park-
and-ride lot in early 2003. At one time, the Eastland Park and Ride 
provided over 1,000 parking spaces for transit customers. With the 
revitalization of the Eastland Shopping Center, this park and ride 
facility has been eliminated. A second park and ride facility in the 
southern portion of our service area ceased operating in February 2004. 
This facility was provided by a regional shopping mall. As the shopping 
mall intensified its retail activities, it was no longer willing to 
provide its parking lot for park and ride activities. Under both of 
these scenarios, customers have found it more difficult to access 
Foothill Transit's commuter express services. Accordingly we have seen 
decreases in ridership on these express lines and we believe that a 
portion of these transit riders have returned to driving into downtown 
Los Angeles. This increases both traffic congestion and vehicle 
emissions.
    The Transit Oriented Neighborhood Program enables Foothill Transit 
to continue its longstanding tradition of responding to customer needs 
by providing more convenient access to its high caliber bus service. By 
encouraging more transit use with the availability of park-and-ride 
facilities, Foothill Transit also helps mitigate the traffic congestion 
and poor air quality that plague the Los Angeles area.
    We are pleased to report that our first project under this program 
has been completed. A ribbon cutting and dedication ceremony for the 
Claremont Transportation Center was held on August 31, 2006. The 
transit component of the project includes 477 parking spaces, with 200 
spaces available for transit. In addition to supporting transit, this 
project is a key part of the expansion of the Claremont Transit 
Village.
    The next phase of this program includes plans for parking 
structures in West Covina and Puente Hills. As noted above, for many 
years in these two areas, commuter parking was provided in regional 
shopping malls. However, as business improved at these malls, the 
parking spaces were reclaimed for shoppers. The return of commuter park 
and ride lots to West Covina and Puente Hills will greatly assist in 
maintaining and increasing transit ridership
                         about foothill transit
    Foothill Transit was created in 1987 as an experiment to determine 
the effectiveness of competitively bidding for transit service 
operations. A public/private partnership, Foothill Transit is governed 
by an elected board comprised of mayors and council members 
representing the 21 cities and 3 appointees from the County of Los 
Angeles who are members of a Joint Exercise of Powers Authority. It 
provides public transit services over a 327 square-mile service area. 
Foothill Transit is one of the best investments of taxpayer dollars in 
these times of limited funds.
    Foothill Transit has established a reputation of providing 
outstanding customer service. In five separate customer surveys, 
Foothill Transit drivers have consistently received ratings above 
average or greater by more than 80 percent of our customers. Customers 
also rate Foothill Transit buses very highly on their cleanliness, 
comfort and graffiti-free appearance.
    Foothill Transit was initially established as a 3-year experiment 
to operate 14 bus lines at least 25 percent more efficiently and 
effectively than the former Southern California Rapid Transit District 
(now Metro), with those savings to be passed on to the community 
through increased service and/or lower fares. A 3-year evaluation 
completed by Ernst & Young in 1995 showed that Foothill Transit's 
public/private arrangement resulted in cost savings of 43 percent per 
revenue hour over the previous provider.
    Recognized by Congress in 1996 as a ``national model,'' the 
combination of public accountability and private sector efficiencies 
has allowed Foothill Transit to hold costs constant since its inception 
in 1987, while increasing ridership by 77 percent and more than 
doubling the amount of service on the street.
    Foothill Transit has no employees. All management and operation of 
Foothill Transit service is provided through competitive procurement 
practices. The Foothill Executive Board has retained my employer, 
Veolia Transportation, to provide the day-to-day management and 
administration of the agency. The management contractor oversees the 
maintenance and operation contractors to ensure adherence to Foothill 
Transit's strict quality standards. We have two operating contracts for 
coach operators and vehicle maintenance. First Transit is currently the 
contractor under both of these operating contracts.
    Mr. Chairman, thank you for this opportunity to provide testimony 
and your consideration of our request. Please feel free to contact me 
with any questions you may have or if I can be of any assistance.
                                 ______
                                 
     Prepared Statement of the Coalition of Northeastern Governors
    The Coalition of Northeastern Governors (CONEG) is pleased to share 
with the subcommittee testimony on transportation and community 
development programs in the fiscal year 2008 Transportation, Housing 
and Urban Development, and Related Agencies Appropriations bill. The 
CONEG Governors appreciate the subcommittee's longstanding support of 
funding for the Nation's highway, transit, and rail systems, and we 
understand the difficult fiscal challenges and complex, interlocking 
issues that the subcommittee faces in crafting this appropriations 
measure. We urge the subcommittee to continue the strong Federal 
partnership so vital for the national, integrated transportation system 
that underpins the productivity of the Nation's economy and the 
security and well-being of its communities.
                             transportation
Surface Transportation
    The Governors urge the subcommittee to fund the combined highway, 
public transit and safety programs at levels consistent with the fiscal 
year 2008 authorized levels, including the Revenue Aligned Budget 
Authority (RABA). This level of Federal investment in these 
infrastructure improvements is necessary if the Nation's surface 
transportation system--in both urban and rural areas--is to safely and 
efficiently move people and support the substantial growth in freight 
movement projected in the coming decade. Specifically, we urge the 
subcommittee to:
  --support a Federal aid highway obligation limit at the authorized 
        level of $39.585 billion, plus the Revenue Aligned Budget 
        Authority (RABA);
  --fund public transit at the authorized funding level of $9.423 
        billion, including full funding for the Small Starts Program; 
        and
  --provide sufficient funding for the Coordinated Border 
        Infrastructure Program to enable investment in projects 
        addressing both security and transportation needs at our 
        Nation's borders.
Rail
    The CONEG Governors also request that the fiscal year 2008 
appropriations include $1.78 billion in Federal funding for intercity 
passenger rail as provided in the Senate fiscal year 2008 Budget 
Resolution, with specific funding levels provided for operations, 
capital and debt service. We particularly encourage the subcommittee to 
ensure that Amtrak can continue the critically needed bridge repair 
projects and life-safety work in the New York and Baltimore tunnels, 
and also initiate efforts to promptly upgrade the Northeast Corridor 
electric traction system capacity between Washington and New York to 
avoid major service disruptions. We also support the proposal for $100 
million to fund a State capital investment program for intercity 
passenger rail.
    This funding level for intercity passenger rail can ensure the 
stability of the national system, continue vital and on-going work to 
bring the Northeast Corridor to a state of good repair, and provide 
essential investment funds critical to the continued development of 
rail corridors across the country--even as reforms are undertaken 
through concerted and hopefully coordinated activities of the U.S. 
Congress, Amtrak, the U.S. Department of Transportation (USDOT), and 
the States. Since intercity passenger rail is a complex and 
interconnected system with significant capital requirements, it is 
essential that any operations reform be incremental and that the 
Federal Government continues to be a consistent partner in funding the 
capital needs of the Nation's intercity passenger rail system. We also 
believe that any reform of intercity passenger rail must be a data-
driven, orderly and transparent process that includes meaningful 
collaboration with Amtrak's State funding partners.
    A number of other national rail programs are important components 
of the evolving Federal-State-private sector partnerships to enhance 
passenger and freight rail across the country. We encourage the 
subcommittee to provide funding for both the Rail Relocation Program 
and the Swift High Speed Rail Development Program, both of which 
benefit passenger rail and freight rail systems.
    The CONEG Governors also support a modest increase in funding for 
the Surface Transportation Board (STB) to $26.495 million. This funding 
level will allow the STB to provide the critical oversight services as 
the Nation's rail system assumes increasing importance for the timely, 
efficient, and environmentally sound movement of people and goods 
across the Nation.
                         community development
    The CONEG Governors urge the subcommittee to provide $4.1 billion 
for the Community Development Block Grant (CDBG) program. The CDBG 
enables States to provide funding for infrastructure improvement, 
housing programs, and projects that attract businesses to urban and 
rural areas, creating new jobs and spurring economic development, 
growth and recovery in the Nation's low income and rural communities.
    The CONEG Governors thank the entire subcommittee for the 
opportunity to share these priorities and appreciate your consideration 
of these requests.
                                 ______
                                 
 Prepared Statement of the New York State Department of Transportation
    The New York State Department of Transportation (NYSDOT) 
appreciates the opportunity to present testimony on the fiscal year 
2008 transportation appropriations. New York has a truly multimodal 
transportation system and strives to allocate its financial resources 
accordingly. NYSDOT has responsibility for a $1.9 billion highway 
construction program in 2007-2008 and a $2.8 billion annual transit 
operating and capital assistance program. New York voters approved a 
$2.9 billion Transportation Bond Issue in 2005, which will help support 
New York's multi-year highway and mass transportation capital programs 
valued at nearly $36 billion, with each mode receiving nearly $18 
billion in Federal and State funds. New York will invest $235 million 
in State funds for freight and passenger rail projects and will, over 
the next 5 years, provide over $116 million in State funds to advance 
general aviation security, business-use airport development, and 
capital improvement projects for public-use airports. In addition to 
highways and transit, New York State has invested $320 million in the 
State's passenger rail system in recent years. Clearly, New York State 
is committed to multimodal transportation systems.
    In developing the fiscal year 2008 Transportation Appropriations 
legislation, we ask that you consider and endorse the following:
Support Funding for All Transportation Programs at the Levels Set in 
        Authorizing Legislation
    New York urges funding for transportation programs, at their 
maximum authorized funding levels. We are concerned with the 
President's fiscal year 2008 budget because it would reduce Federal 
funding for several programs to levels below authorized amounts, and we 
would particularly urge you to follow the path of SAFETEA-LU rather 
than that of the President's proposed budget in the following areas.
  --The President's budget submission proposed the elimination of the 
        distribution of an additional $631 million from Revenue Aligned 
        Budget Authority (RABA) required by the Safe, Accountable, 
        Flexible, Efficient Transportation Equity Act: A Legacy for 
        Users (SAFETEA-LU). New York strongly urges Congress to restore 
        this mandated funding as promised by Congress just 2 years ago.
  --A $300 million reduction is proposed in Transit New Starts funding 
        below the level authorized by SAFETEA-LU. The demand for 
        Transit New Starts funding far exceeds the level of funding 
        available, even though SAFETEA-LU increased the authorized 
        funding level for this program. In New York, the Long Island 
        Rail Road East Side Access and the Second Avenue Subway 
        projects are priority New Starts projects to relieve congestion 
        on the busiest transit system in the Nation. At a time when 
        gasoline prices are at a premium, Federal investment in mass 
        transit is key to reducing the Nation's reliance on foreign 
        oil.
  --Zero funding is proposed for both Next Generation High Speed Rail 
        program and the Railroad Rehabilitation and Improvement 
        Financing (RRIF) program. There are few Federal financing tools 
        available to States and railroads for investment in rail 
        passenger or freight. Freight traffic nationwide is projected 
        by USDOT to double in the next 20 years. Some experts say 
        freight traffic will quadruple in the immediate vicinity of key 
        international freight hubs such as the Port of New York and JFK 
        Airport in New York City. SAFETEA-LU authorizes $100 million 
        per year for the Next Generation High Speed Rail program and 
        $35 billion per year for the RRIF program, a credit enhancement 
        program for rail freight and passenger investments. Congress 
        should provide the full funding at the levels authorized in 
        SAFETEA-LU for both of these important Federal rail investment 
        programs.
  --New York State continues to believe that there is an urgent need 
        for short-term funding stability while a long term solution for 
        intercity rail passenger service is developed and implemented. 
        Short-term funding should be sufficient to operate existing 
        intercity passenger rail service, as well as enable critical 
        maintenance and ``state of good repair'' capital investments to 
        continue. To achieve this, intercity passenger rail should be 
        funded at $1.78 billion, the level called for in Senate bill S. 
        294. The administration's budget request of $800 million is 
        significantly below what Amtrak needs to meet its commitments 
        for operations, service, and debt payments. We particularly 
        encourage the subcommittee to ensure that Amtrak can continue 
        the critically needed bridge repair projects and life-safety 
        work in the New York and Baltimore tunnels.
  --The administration also proposes a new $100 million State capital 
        investment program, where States would apply to the Federal 
        Railroad Administration (FRA) for grants for up to 50 percent 
        of the cost of capital investments necessary to support 
        improved intercity passenger rail service that either requires 
        no operating subsidy or for which the State or States agree to 
        provide any needed operating subsidy. This proposed Federal-
        State partnership should be modeled on the highway and transit 
        programs, with 80/20 Federal-State funding, dedicated, stable 
        Federal funding, and a strong role for States in decision-
        making. Further, while this proposal is a good start, it needs 
        to be part of a larger national intercity passenger rail 
        strategy which establishes a strong, ongoing Federal-State 
        partnership, brings Amtrak assets up to a state of good repair, 
        provides corporate transparency and accountability at Amtrak, 
        and expands competition in the delivery of intercity passenger 
        rail service.
  --As the debate over the reauthorization of the aviation program 
        proceeds through Congress, New York supports funding the 
        aviation programs at the fiscal year 2007 level or higher. The 
        President's budget proposal includes a significant 
        restructuring of the aviation program in the absence of 
        authorizing legislation. Aviation funding for fiscal year 2008 
        should be based on the existing program structure until 
        reauthorizing legislation is complete.
Impending Insolvency of the Highway Trust Fund
    Both the Government Accountability Office and the Congressional 
Budget Office project that the Highway Account of the Highway Trust 
Fund will not have adequate revenue to support fiscal year 2009 
authorizations for highways and bridges. The Mass Transit Account is 
projected to remain solvent until 2011 or 2012.
    At a recent hearing of the Highways and Transit Subcommittee of the 
Transportation and Infrastructure Committee, a proposal to use the Mass 
Transit Account to address the fiscal year 2009 shortfall in the 
Highway Account was discussed with hearing witnesses. New York is 
concerned that Congress may be tempted to use this quick-fix approach 
in fiscal year 2009 Transportation Appropriations and may consequently 
postpone the fundamental surface transportation funding issue until 
SAFETEA-LU is reauthorized (SAFETEA-LU expires on September 30, 2009).
    New York emphatically urges Congress to leave the Mass Transit 
Account intact when searching for a solution to the fiscal year 2009 
highway funding shortfall. With transit funding already reduced in the 
President's fiscal year 2008 budget, any further reductions of funding 
for this vital component of a multimodal transportation system would be 
disastrous.
    Fixing the Highway Trust Fund shortfall will require significant 
effort by authorizing committees to examine, analyze, and select 
alternative funding mechanisms to meet the financial needs of the 
Nation's transportation systems into the foreseeable future. New York 
believes that a comprehensive, sustainable, diversified portfolio of 
Federal revenue is needed to address the diverse investment needs of 
the Nation's surface transportation system, i.e. its highways, transit 
systems, railroads, and ports. We urge the Transportation 
Appropriations Subcommittee to appeal to the Transportation and 
Infrastructure Committee to begin this work immediately.
    NYSDOT thanks you for this opportunity to present testimony. We 
appreciate your dedication to and support of the Nation's 
transportation systems.
                                 ______
                                 
                   Prepared Statement of Easter Seals
    Chairman Murray, Ranking Member Bond and members of the 
subcommittee, Easter Seals appreciates this opportunity to share the 
successes and needs of Easter Seals Project ACTION and the National 
Center on Senior Transportation.
                        project action overview
    Project ACTION was initiated during the appropriations process in 
1988 by funding provided to the Federal Transit Administration to 
undertake this effort with Easter Seals. We are indeed grateful for 
that initiative and the ongoing strong support of this subcommittee in 
subsequent years.
    Following its initial round of appropriations, Congress authorized 
assistance to Project ACTION in 1990 with the passage of ISTEA and 
reauthorized the project in 1997 as part of TEA-21 and in 2005 as part 
of SAFETEA-LU. The strong interest and support of all members of 
Congress has been greatly appreciated by Easter Seals as it has pursued 
Project ACTION's goals and objectives.
    Since the project's inception, Easter Seals has administered the 
project through a cooperative agreement with the Federal Transit 
Administration. Through steadfast appropriations support, Easter Seals 
Project ACTION has become the Nation's leading resource on accessible 
public transportation for people with disabilities. The current project 
authorization level is $3 million, and Easter Seals is pleased to 
request the appropriation of that sum for fiscal 2008.
    The strength of Easter Seals Project ACTION is its continued 
effectiveness in meeting the congressional mandate to work with both 
the transit and disability communities to create solutions that improve 
access to transportation for people with disabilities of all ages and 
to assist transit providers in complying with transportation provisions 
in the Americans with Disabilities Act (ADA).
           national center on senior transportation overview
    The National Center on Senior Transportation (NCST) was created in 
SAFETEA-LU to increase the capacity and use of person-centered 
transportation options that support community living for seniors in the 
communities they choose throughout the United States. The center is 
designed to meet the unique mobility needs of older adults and provide 
technical assistance and support to older adults and transit providers. 
The NCST is administered by Easter Seals in partnership with the 
National Association of Area Agencies on Aging (N4A) and involves 
several other partners including the National Association of State 
Units on Aging, The Community Transportation Association of America, 
The American Society on Aging, and The Beverly Foundation. The 
Cooperative agreement forming the NCST was developed in August of 2007 
and the Center was officially launched in January of this year.
    The expected outcomes of the project are:
  --Greater cooperation between the aging community and transportation 
        industry to increase the availability of more comprehensive, 
        accessible, safe and coordinated transportation services;
  --Increased integration of provisions for transportation in community 
        living arrangements and long-term care for older adults;
  --Enhanced capacity of public and private transportation providers to 
        meet the mobility needs of seniors through available, 
        accessible, safe and affordable transportation;
  --Enhanced capacity of human service providers to help seniors and/or 
        caregivers individually plan, create and use appropriate 
        transportation alternatives;
  --Increased knowledge about and independent use of community 
        transportation alternatives by seniors through outreach, 
        education and advocacy;
  --Increased opportunities for older adults to obtain education and 
        support services to enable the individuals to participate in 
        local and State public and private transportation planning 
        processes.
    The tools and resources being developed to achieve these goals 
include:
  --Technical assistance extended through cross-agency and public/
        private collaboration to improve and increase mobility 
        management for older adults through new or existing local and 
        State coalitions;
  --Technical assistance and other supportive services extended to 
        communities, seniors, transportation and professional agencies 
        and organizations, government, and individuals so they can 
        effectively address barriers and/or respond to opportunities 
        related to senior transportation; and
  --Creation and dissemination of products and training programs (e.g., 
        brochures, workbooks, best-practice guides and self-
        assessments) to help transportation providers, human service 
        agencies and older adults and their caregivers understand their 
        roles and/or opportunities for increasing senior mobility 
        options;
  --Use of an 800-telephone line, Web site, visual exhibit, newsletters 
        and other communication tools;
  --Implementation of communication strategies to increase the profile 
        of senior transportation on topics such as emerging best 
        practices, advances in public policy, success stories and more;
  --Facilitation and testing of new ideas to increase and improve 
        community mobility for seniors through the administration and 
        management of demonstration projects.
    In SAFETEA-LU, the NCST is authorized at $2 million for the first 
year of the project and $1 million for years after that. Easter Seals 
respectfully requests and appropriations of $2 million for the NCST in 
fiscal 2008. The additional $1 million included above the authorized 
level in this request would allow the center to fund local community's 
efforts to demonstrate creative, unduplicated and effective solutions 
to increasing mobility for older adults. This funding will allow us to 
support local communities' efforts to put the tools and resources 
developed by the NCST into practice.
       scope of project action and the national center on senior 
                             transportation
    Both Project ACTION and the NCST are working at the State, local 
and national level to achieve the goal of greater mobility for all 
Americans. This includes everything from working with local communities 
to provide curriculum, resources, training and ongoing technical 
supports as they work to coordinate their local transportation 
resources, to working with States implementing the United We Ride 
Initiative activities, to hosting national level listening sessions and 
summits on issues of importance to the Nation's mobility.
                          fiscal 2008 request
    In order to continue the outstanding work of Easter Seals Project 
ACTION and the NCST, Easter Seals respectfully requests that $3 million 
be allocated for Project ACTION and $2 million be allocated for the 
National Center on Senior Transportation in fiscal 2008 to the 
Department of Transportation for project activities.
    Mr. Chairman, thank you for the opportunity to present this 
testimony to the subcommittee. Your efforts have improved the 
accessibility of transportation for persons with disabilities and older 
adults and the ability of the transportation community to provide good 
service to all Americans. Easter Seals looks forward to continuing to 
work with you toward the pursuit of these objectives.
                                 ______
                                 
              Prepared Statement of All Aboard Washington
    Thank you and many other members of this subcommittee for having 
supported basic investments in Amtrak intercity rail in past years. 
While understanding there are many competing needs for tax dollars, I 
believe the justification for an increased Federal role in rail 
investments is now higher than anytime during my 20+ years as 
representing rail advocates from our State of Washington. (We were long 
known as the Washington Association of Rail Passengers.)
    Given the finite, increasingly high cost of petroleum motor fuels, 
general acknowledgement of the negative impacts of upon local and 
global environments of ever-increasing motor vehicle use, the multiple 
costs of vehicular congestion and airport congestion, coupled with the 
inherent safety and efficiency of the rail mode, it would seem 
appropriate for the United States to join virtually all other advanced 
industrial nations and such rapidly advancing nations as China, Taiwan 
and South Korea to add intercity rail to road and air as significant 
means of moving people.
    Our State of Washington has done its part since the early 1990s, 
having made the majority of investments in our popular and successful 
Amtrak Cascades trains, which serve Amtrak's Northwest Corridor, 
between Vancouver BC south through the densely populated and rapidly-
growing western Washington on to Eugene Oregon. Customer satisfaction 
by Cascades' passengers is, year after year, judged to be at or near 
the top within the Amtrak system.
    Only two significant concerns have surfaced concerning the Amtrak 
Cascades: that on-time performance is below optimum, brought about by 
the generally good news that shipments by the freight railroads are 
considerably higher than was predicted and planned for, resulting in 
track congestion; and, the need for more Cascades' trips per day, 
particularly between the major Seattle-Portland markets. In both cases, 
additional investments, by the freight railroads, the States of 
Washington and Oregon, the province of British Columbia, local 
communities, other private sector entities, and the U.S. Government, 
would strongly address these concerns.
    A Rail Capacity and System Needs Study funded through the 
Washington State Transportation Commission and completed in December of 
2006 concludes that it is in our State's interest to continue State 
investment in both passenger and freight rail, in cooperation with 
other private and public interests. The Study also concludes with the 
caveat that Washington State's success at increasing the role of rail 
transportation, with its manifold benefits to the State, would be 
greatly increased with a greater Federal investment role in the rail 
mode, one which starts to approach the many decades of U.S. Government 
generosity to highway, air, and inland waterway modes. While Amtrak 
participated in the funding of our Amtrak Cascades trains, and our 
congressional delegation has in general been supportive of Amtrak 
funding (Chair Murray has been a leader in this regard!), the State 
Transportation Budget passed overwhelmingly by the Washington 
Legislature on 21 April 2007 includes proposed rail projects which 
await a significant Federal investment component before they could be 
fully realized.
    Legislators, transportation commissioners, and WSDOT leadership 
have said in blunt terms, ``We are doing our share; now it's the Feds' 
turn!''
    S. 294, with excellent bipartisan co-sponsorship, is a potential 
funding vehicle that can move toward a source of rail investment that 
would serve our State and other States well. As an authorization bill 
it remains a ``good set of ideas''. The means by which these good ideas 
can be financed fall under your committee's jurisdiction.
    Details of S. 294, its characteristics, benefits, and costs would 
be well-known to your committee's excellent staff; I need not repeat 
them here. But as I am this week visiting this Washington, the Nation's 
Capital, and may have the privilege of meeting with some of you or you 
staffs, I would hope next week to be able to report back to my 
Washington that ``the Feds'' are indeed progressing toward a greater 
inclusion of passenger rail as a safe, fuel-efficient and 
environmentally-sound means of travel for the American people and our 
many foreign visitors.
    It is said the President of South Korea was asked by an American 
diplomat how his country could afford the multi-billion dollar 
investment in high-speed passenger rail between his country's booming 
industrial cities. The President politely answered, ``How can we afford 
not to?''
    The funding means found in S. 294 are a start for a greater Federal 
rail investment in our country. Given the realities of fuel supply and 
cost, environmental concerns, public safety, and economic and community 
well-being, ``How can we afford not to ?''
                                 ______
                                 
  Prepared Statement of the American Public Transportation Association
                              introduction
    Madam Chairman and members of the subcommittee, on behalf of the 
American Public Transportation Association (APTA), we thank you for 
this opportunity to submit written testimony on the need for and 
benefits of investment in Federal Transit Administration (FTA) programs 
for fiscal year 2008.
    The fiscal year 2008 Transportation, Housing and Urban Development, 
and Related Agencies Appropriations bill is an opportunity to advance 
national goals and objectives through increased investment in our 
surface transportation infrastructure, particularly public 
transportation. For that reason, we strongly urge Congress to fund the 
Federal transit program at no less than the $9.731 billion level 
authorized in the Safe, Accountable, Flexible, Efficient Transportation 
Equity Act--A Legacy for Users (SAFETEA-LU, Public Law 109-59).
    In 2006, Americans took 10.1 billion trips on public 
transportation. Let me put the 10.1 billion number in perspective. This 
is more than the number of Americans who attended NFL games, MLB games, 
NBA games, NHL games, NASCAR races, went to the movies, and ate a 
hamburger from McDonald's, Burger King, and Wendy's combined. Transit 
ridership growth of 30 percent since 1995 is outpacing both the growth 
of our population--12 percent--and the growth in the use of the 
Nation's highways--24 percent--since then. Each weekday, 34 million 
trips are made on public transportation in our Nation. All across 
America, public transportation provides choice, freedom and 
opportunity.
    Expanding access to public transportation is more important than 
ever. Transit plays a number of important roles. It reduces congestion 
and it provides mobility options. Its use decreases our dependence on 
foreign oil and improves air quality. Increasing access to public 
transportation is clearly needed to create a stable, healthy and strong 
America. Forty years from now when America's population will exceed 400 
million, we will be glad we had the foresight to discuss, plan and 
invest in the future of public transportation today. As we look to the 
future, we know there is no possible way that our roads can accommodate 
all the anticipated growth on their own. Transit is, and has to be, 
part of the solution.
                         fiscal year 2008 goals
    APTA recognizes the need to invest limited Federal resources 
wisely, and we believe that investment in public transportation is an 
astute use of limited resources. To realize all of the benefits of 
public transportation, we urge Congress to follow the investment 
schedule in SAFETEA-LU. The law authorizes $9.731 billion for the 
Federal transit program in fiscal year 2008, including $7.766 billion 
in contract authority from the Mass Transit Account (MTA) of the 
Highway Trust Fund and $1.965 billion in new budget authority general 
fund spending.
    We urge Congress to fund the Federal transit program at the 
authorized level so that communities across the Nation, utilizing State 
and local resources in tandem with Federal funds, can begin to address 
the overwhelming need both to preserve the existing transit 
infrastructure and to expand and improve that infrastructure in growing 
communities and those without good transit service.
    A new survey prepared by Cambridge Systematics as part of the 
Transit Cooperative Research Program finds that annual transit capital 
needs are greater than $45 billion a year. State and local governments 
cannot meet the expanding capital need requirements of public 
transportation while also providing for transit operating expenses. To 
help meet these needs, APTA believes that the Federal Government should 
invest no less in public transportation than the $9.731 billion level 
that was authorized and guaranteed by SAFETEA-LU.
                      president's budget proposal
    The administration's fiscal year 2008 budget proposal would cut 
$309 million from the level authorized and guaranteed by the Congress 
for fiscal year 2008 in SAFETEA-LU. The administration's budget cuts 
some $300 million in investments in rail and other fixed guideway 
transit projects in the New Starts and Small Starts program that were 
authorized by Congress under SAFETEA-LU. This is a failure to fund 
nearly 18 percent of the investment authorized to build projects which 
are crucial to attracting new riders.
    As this committee knows, there is overwhelming demand for New 
Starts and Small Starts projects, and SAFETEA-LU authorized 387 such 
projects. New fixed guideway projects are an important part of meeting 
transit needs, but these major capital projects take years to develop 
and require a predictable funding commitment. The effect of 
underfunding the New Starts/Small Starts program will be felt 
disproportionately in future years. Transit providers would fall 
further behind in the development of new projects due to the cuts in 
the administration proposal, depriving communities of the congestion 
relief and environmental benefits associated with the projects.
    If New Starts project schedules are delayed, project costs also 
rise due to inflation. A recent study by the Associated General 
Contractors of America (AGC) finds that the cost of building surface 
transportation infrastructure has increased at a much faster rate than 
the Consumer Price Index. Transportation-related construction costs 
increased by more than 30 percent between 2003 and 2006, yet the 
consumer price index for urban areas grew by only 11 percent during 
that period. Looking ahead, the AGC's research predicts that 
transportation construction prices will increase at an annual rate of 
at least 6 percent, but increases could be much higher based on the 
experience of recent years. Prices spiked 10 percent and 14.1 percent 
in 2004 and 2005, respectively. If the New Starts/Small Starts program 
is cut by $300 million in fiscal year 2008, it will require $330 
million in fiscal year 2009 to build equivalent projects if costs rise 
by only 10 percent. The administration's budget proposal is truly 
pennywise and pound foolish. In recent years the time required to 
develop and complete New Starts projects has also continued to grow. 
This adds further to project costs, and APTA urges the committee to 
work with FTA to expedite this process.
    We want to make another point, Madam Chairman. SAFETEA-LU 
restructured the general fund and Mass Transit Account (MTA) funding 
sources so that MTA outlays are now scored when they are actually spent 
rather than when they are appropriated. The good news is that MTA 
balances now are significantly higher than they would have been under 
the old scoring system. But this also means that the New Starts program 
is now funded exclusively from the general fund. Madam Chairman, it is 
important to emphasize that this was done to improve the overall 
financing of the Federal transit program. The change was not meant to 
create funding uncertainty or program cuts, as the administration has 
proposed for the second year in a row.
    While we understand the need to protect against spending the 
public's money on imprudent projects, we also believe FTA has 
effectively prevented the advance of viable projects by overemphasizing 
a limited number of benefits in the evaluation of potential New Starts 
projects, particularly travel time savings. Fixed guideway investment, 
particularly rail transit, is an alternative that requires long-term 
vision since the construction and expansion of systems takes time, but 
it is one of the most effective ways to reduce and prevent congestion 
in metropolitan areas and advance other national goals.
    Finally, APTA urges this committee to consider providing New Starts 
projects with the same Federal share of project costs provided for 
other transit and highway investments. Both FTA and Congress have taken 
a number of actions that have prevented the advancement of New Starts 
projects that seek a Federal share of costs greater than 60 percent, 
and for most current projects, the local cost share exceeds 50 percent 
even though current law provides up to an 80 percent Federal share. 
APTA believes that at a time of growing concern about congestion, 
greenhouse gas emissions and weaning the country off foreign energy 
sources, the Federal Government should be encouraging communities to 
invest in new transit systems and the expansion of current systems. New 
Starts projects should be treated like other transportation projects 
and receive an 80/20 Federal match ratio.
                       transit fights congestion
    The U.S. Department of Transportation (USDOT) has recognized that 
system congestion is one of the single largest threats to our Nation's 
economic prosperity and way of life. In 2003, Americans lost 3.7 
billion hours and 2.3 billion gallons of fuel sitting in traffic jams 
as a result of congestion. APTA strongly applauds the Department's 
efforts to focus national attention on our congested roads, rails and 
airways, but USDOT's efforts to fight congestion under its National 
Strategy to Reduce Congestion on America's Transportation Network 
(commonly referred to as the ``Congestion Initiative'') are simply 
incomplete. While our Nation's anti-congestion ``blueprint'' should 
incorporate new strategies such as innovative pricing, private sector 
investment, and urban partnership elements of the Department's 
Congestion Initiative, it must also call for a dramatic increase in the 
use of proven congestion fighting strategies like transit.
    Thirty-four million trips are taken each weekday in the United 
States on public transportation, and each trip fights congestion. 
According to the 2005 Texas Transportation Institute Annual Urban 
Mobility Report, transit is successfully reducing traffic delays and 
costs in the 85 urban areas studied. Without transit delays in the 85 
urban areas would have increased 27 percent, and residents in the urban 
areas studied would have lost an additional $18.2 billion in time and 
fuel as a result of increased congestion.
    The impacts of congestion run deep. Good public transportation 
service allows all types of trips to be completed quickly and 
efficiently. Removing autos from congested urban freeways through 
transit use speeds truck-borne freight as surely as building highway 
capacity. In short, we must view the entire transportation network as a 
single system, one that can be planned managed and financed with a 
broad view to the overall good. Holes in the network through 
underinvestment result in degradation of performance for the entire 
system.
             public transportation and energy independence
    As our Nation revaluates our patterns of energy use, we must 
recognize the important energy savings that are derived from transit 
use. Earlier this year, a report by ICF International calculated that 
public transportation today reduces petroleum consumption by a total of 
1.4 billion gallons of gasoline each year. This means:
  --108 million fewer cars filling up--almost 300,000 every day;
  --34 fewer supertankers leaving the Middle East--one every 11 days;
  --over 140,000 fewer tanker truck deliveries to service stations per 
        year;
  --total savings as great as the entire amount of gasoline consumed in 
        States the size of Nevada, Utah or New Mexico; and
  --5 times greater savings than converting the entire 478,000 Federal 
        light duty vehicle fleet to alternative fuels.
    These savings result from the efficiency of carrying multiple 
passengers in each transit vehicle; the reduction in traffic congestion 
from fewer automobiles on the roads; and the varied sources of energy 
for public transportation.
    All savings would be magnified with increased use of transit 
relative to the automobile. Savings would be magnified still further 
when we account for the energy efficiencies that are characteristic of 
cities highly reliant on transit which use much less energy per capita 
than auto dependent cities. According to research by sustainability 
experts Peter Newman and Jeff Kenworthy, U.S. cities use two and a half 
times more oil than comparable cities in Europe, and five times more 
oil than comparable cities in Asia.
                               conclusion
    Public transportation plays a key role in meeting the national 
goals of the administration and Congress in providing energy 
independence, congestion relief and transportation mobility options for 
Americans. APTA strongly believes that the Federal Government should 
invest no less than the $9.731 billion level authorized and guaranteed 
by Congress for fiscal year 2008 in SAFETEA-LU if we are to advance 
these goals.
    Madam Chairman, on behalf of APTA's more than 1500 member 
organizations, I thank you for this opportunity to express our views.
                                 ______
                                 
 Prepared Statement of the California Industry and Government Central 
                    California Ozone Study Coalition
    Madam 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 2008 funding request of $500,000 
from the Department of Transportation for CCOS. These funds are 
necessary for the State of California to address the very significant 
challenges it faces to comply with new national ambient air quality 
standards for ozone and fine particulate matter. The study design 
incorporates technical recommendations from the National Academy of 
Sciences (NAS) on how to most effectively comply with Federal Clean Air 
Act requirements.
    First, we want to thank you for your past assistance in obtaining 
Federal funding for the Central California Ozone Study (CCOS) and 
California Regional PM10/PM2.5 Air Quality Study 
(CRPAQS). Your support of these studies has been instrumental in 
improving the scientific understanding of the nature and cause of ozone 
and particulate matter air pollution in Central California and the 
Nation. Information gained from these 2 studies is forming the basis 
for the 8-hour ozone, PM2.5, and regional haze State 
Implementation Plans (SIPs) that are due in 2007 (ozone) and 2008 
(particulate matter/haze). As with California's previous and current 
SIPs, all future SIPs will continue to be updated and refined due to 
the scientific complexity of our air pollution problem. Our request 
this year would fund the completion of CCOS to address important 
questions that won't be answered with results from previously funded 
research projects.
    To date, our understanding of air pollution and the technical basis 
for SIPs has largely been founded on pollutant-specific studies, like 
CCOS. These studies are conducted over a single season or single year 
and have relied on modeling and analysis of selected days with high 
concentrations. SIPs are now more complex than they were in the past. 
The National Academy of Sciences (NAS) now recommends a weight-of-
evidence approach that will involve utilizing more broad-based, 
integrated methods, such as data analysis in combination with seasonal 
and annual photochemical modeling, to assess compliance with Federal 
Clean Air Act requirements. This will involve the analysis of a larger 
number of days and possibly an entire season. In addition, because 
ozone and particulate matter are formed from some of the same emissions 
precursors, there is a need to address both pollutants in combination, 
which CCOS will do.
    Consistent with the NAS recommendations, the CCOS study includes 
corroborative analyses with the extensive data provided by past 
studies, advances the state-of-science in air quality modeling, and 
addresses the integration of ozone and particulate pollution studies. 
In addition, the study will incorporate further refinements to emission 
inventories, address the development of observation-based analyses with 
sound theoretical bases, and includes the following four general 
components:

------------------------------------------------------------------------
                                                                Years
------------------------------------------------------------------------
Performing SIP modeling analyses...........................    2005-2011
Conducting weight-of-evidence data analyses................    2006-2008
Making emission inventory improvements.....................    2006-2010
Performing seasonal and annual modeling....................    2008-2011
------------------------------------------------------------------------

    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 
PM10/PM2.5 Air Quality Study, are landmark 
examples of collaborative environmental management. The proven methods 
and established teamwork provide a solid foundation for CCOS.
    For fiscal year 2008, our Coalition is seeking funding of $500,000 
from the DOT through Highway Research funds. DOT is a key stakeholder 
in air quality issues because Federal law requires that transportation 
plans be in conformity with SIPs. 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, which 
are linked because motor vehicle emissions are a dominant element of 
SIPs in California and nationwide. Determining the emission and air 
quality impacts of motor vehicles is a major part of the CCOS effort.
    Heavy-duty trucks are known to have very different driving patterns 
than light duty cars and, despite smaller numbers, are responsible for 
a disproportionate amount of emissions (e.g. approximately 50 percent 
of California's mobile source NOX emissions). The continued 
growth of heavy-duty truck travel, including increases in inter-state 
and international goods movement, makes this element of the SIP 
transportation emission estimate critical. Thus, to support the 
region's new SIPs and to address the new NAS recommendations, 
improvement of the temporal and spatial distribution of heavy-duty 
truck emissions is needed. We propose funding of this activity at a 
level of $500,000. The funding will go to collect data that can be used 
to more accurately characterize heavy-duty truck emissions, including 
those resulting from NAFTA
    If we receive the funds requested this year to complete this 
research project, this will be our final request.
    Thank you very much for your consideration of our request.
                                 ______
                                 
    Prepared Statement of the Illinois Department of Transportation
    Mr. Chairman and members of the subcommittee, we appreciate the 
opportunity to submit testimony concerning the fiscal year 2008 U.S. 
Department of Transportation (U.S. DOT) appropriations on behalf of the 
Illinois Department of Transportation (IDOT) to the Senate 
Appropriations Subcommittee on Transportation, Housing and Urban 
Development, and Related Agencies. We thank Chairman Byrd and the 
members of the subcommittee for their past support of a strong Federal 
transportation program and for taking into consideration Illinois' 
unique needs.
    IDOT is responsible for the planning, construction, maintenance and 
coordination of highways, public transit, aviation, intercity passenger 
rail and freight rail systems in the State of Illinois. IDOT also 
administers traffic safety programs. Our recommendation for overall 
funding priorities and our requests for transportation funding for 
projects of special interest to Illinois are discussed below.
                                highway
    Highway Obligation Limitation/RABA.--IDOT urges the subcommittee to 
set the obligation limitation for highway and highway safety programs 
at the guaranteed SAFETEA-LU level in fiscal year 2008 at $40.2 
billion--a $1.1 billion increase over the fiscal year 2007 level of 
$39.1 billion. This recommendation consists of the obligation level of 
$39.585 billion authorized in SAFETEA-LU plus the $631 million expected 
from the upward Revenue Aligned Budget Authority (RABA) adjustment. 
IDOT is aware of the implications of supporting a RABA increase when 
the long-term viability of the trust fund is in question. However, IDOT 
is more concerned with the Federal funding needed to address immediate 
highway and bridge deficiencies as noted in the recent U.S. DOT 
publication, 2006 Status of the Nation's Highways, Bridges, and 
Transit: Conditions & Performance Report. Overall, IDOT continues to 
support the SAFETEA-LU guarantees and funding firewalls as do other 
transportation advocates such as the American Association of State 
Highway and Transportation Officials (AASHTO) and the American Road and 
Transportation Builders Association (ARTBA). The full utilization of 
the additional RABA funds will allow further improvements to highway 
and highway safety programs.
    Rescission of Unobligated Highway Apportionments.--IDOT urges the 
subcommittee to suspend its practice of rescinding unobligated highway 
apportionments. Rescissions undermine the SAFETEA-LU principles of 
guaranteed funding and budgetary firewalls by withdrawing ``promised'' 
Federal funding to offset increased non-transportation funding 
elsewhere. Moreover, the accumulated impact of numerous rescissions 
since fiscal year 2002 has exacted unanticipated programmatic 
consequences. With large scale rescissions, such as the one implemented 
in fiscal year 2007 for $3.471 billion, a State has less flexibility to 
shift funding toward unique State needs and to meet individual highway 
program priorities. For example, to more equitably soften the impact of 
the most recent rescission on categories such as CMAQ and Enhancements, 
IDOT found it necessary to withdraw from categories with current-year 
apportionment. Additionally, State transportation departments are being 
unduly pressured by various transportation interests to make 
rescissions based on that group's particular preference. In total, 
Illinois has rescinded $326 million in unobligated apportionments since 
the first rescission in fiscal year 2002.
    If the subcommittee finds the flexibility to earmark meritorious 
projects in existing discretionary SAFETEA-LU categories or outside the 
authorized categories, IDOT requests the following earmarks for 
highway, transit and rail funding:
  --I-55 Add Lanes Project.--IDOT requests a fiscal year 2008 earmark 
        of $16.4 million to provide additional lanes for 14.5 miles in 
        each direction on I-55 from I-80 to Weber Road in an effort to 
        reduce congestion and improve safety.
  --Illinois Statewide Intelligent Transportation Systems (ITS) 
        projects.--IDOT requests a fiscal year 2008 earmark of $14.5 
        million in ITS equipment/technology funds to implement 3 
        priority projects that will address congestion, improve safety, 
        enhance security and improve the operating efficiencies of 
        highway and transit systems.
  --Illinois Route 120 Corridor Initiative.--IDOT requests a fiscal 
        year 2008 earmark of $12.56 million for the planning and 
        construction of a traffic facility to provide access and 
        congestion relief for an east-west route in central Lake 
        County. The facility would address future land use and economic 
        development.
  --ITS Vehicle Infrastructure Integration Test Bed for NE IL 
        (MOTODRIVETM).-- IDOT requests a fiscal year 2008 
        earmark of $2 million to utilize technology developed by 
        Motorola to pursue the goals of the Vehicle Infrastructure 
        Integration (VII) program and to assemble components and 
        technologies that quickly, securely and reliably send large 
        amounts of wireless data from transmitter devices, mounted on 
        light poles along roadsides, to cars equipped with on-board 
        devices.
  --Illinois Scenic Byways.--IDOT requests a fiscal year 2008 earmark 
        of $1 million for informational materials needed to promote and 
        add signage to the two new byways in Illinois. These materials 
        will promote travel and tourism and foster economic 
        development.
    Other IDOT Priorities--(to be earmarked under the: Subcommittee on 
Commerce, Justice and Science, and Related Agencies) Height 
Modernization.--IDOT requests a fiscal year 2008 earmark of $3.5 
million to establish a Height Modernization (HM) program in Illinois. A 
HM program will establish a network of survey benchmarks and a 
statewide high-resolution digital elevation model of the earth's 
surface based upon the updated network. Illinois currently ranks 
alongside the bottom 10 states with regard to the quality of its 
elevation information.
                                transit
    Transit Obligation Limitation.--IDOT urges the subcommittee to set 
the obligation limitation for transit programs at the guaranteed 
SAFETEA-LU level in fiscal year 2008 at $9.731 billion--a $756 million 
increase over the fiscal year 2007 level of $8.975 billion.
    Bus and Bus Facilities.--IDOT, the Illinois Public Transportation 
Association and the Regional Transportation Authority (RTA) jointly 
request a Federal earmark of $31 million in fiscal year 2008 section 
5309 bus capital funds for Illinois. This joint request is a 
demonstration of our mutual interest in securing funding for essential 
bus capital needs throughout the State.
    The request will provide $5.3 million for downstate Illinois 
transit systems to purchase up to 36 buses and paratransit vehicles to 
replace overage vehicles and to comply with Federal mandates under the 
Americans with Disabilities Act. All of the vehicles scheduled for 
replacement are at or well beyond their design life. The request will 
also provide $12.6 million to undertake engineering, land acquisition 
or construction for five maintenance facilities and two transfer 
facilities that will enhance efficient operation of transit services.
    In northeastern Illinois, $12.9 million will be used to purchase up 
to 40 heavy-duty buses, 10 for Pace, RTA's suburban bus operator, and 
30 for the Chicago Transit Authority (CTA).
    Illinois transit systems need discretionary bus capital funds since 
regular formula funding is inadequate to meet all bus capital needs. 
IDOT believes that Illinois' needs to justify a much larger amount of 
funds than the State has received in recent years. Under SAFETEA-LU 
Illinois is expected to receive nearly 6 percent of the needs-based 
formula funds but Illinois has only received between 1 and 3 percent of 
appropriated bus capital funds in the past. RTA ranks third in the 
Nation in bus passenger trips, yet Illinois' share of bus capital has 
been far below shares received by other States with much less bus use.
    New Systems and Extensions--Chicago Transit Authority (CTA).--IDOT 
supports the CTA's request for an earmark totaling $40 million in New 
Starts funding to assist in upgrading the Ravenswood Brown Line. The 
match for these funds will be provided by IDOT.
    The funding requested for upgrading the Ravenswood Brown Line would 
continue construction to extend station platforms to handle longer 
trains that are needed to serve the increasing demand along this line. 
Lengthening all platforms to handle longer, 8-car trains, straightening 
tight S-curves that slow operations and selected yard improvements will 
increase capacity by 25 to 30 percent. The CTA is seeking $40 million 
in New Starts funds for fiscal year 2008. A FFGA for $245.5 million was 
executed in January 2004 for the project.
    New Systems and Extensions--MetroLink.--IDOT supports the Bi-State 
Development Agency's request for a Federal earmark of $50 million in 
fiscal year 2008 New Starts funding for extending the MetroLink light 
rail system in St. Clair County from Scott Air Force Base to MidAmerica 
Airport. The MetroLink system serves the St. Louis region in both 
Illinois and Missouri. MetroLink service has been a tremendous success 
and ridership has far exceeded projections. In addition, this new 
extension will provide employees the needed transportation to commute 
to a new industrial development that is to be located between Scott Air 
Force Base and MidAmerica Airport.
    Formula Grants.--IDOT urges the subcommittee to set appropriations 
for transit formula grant programs at levels that will allow full use 
of the anticipated Highway Trust Fund Mass Transit Account revenues. 
IDOT also supports utilizing general funds to supplement transit needs.
    In Illinois, Urbanized Area formula funds (section 5307) are 
distributed to the Regional Transportation Authority and its 3 service 
boards which provide approximately 600 million passenger trips per 
year. Downstate urbanized formula funds are distributed to 14 urbanized 
areas which provide approximately 30 million passenger trips per year.
    The Rural and Small Urban formula funds (section 5311) play a vital 
role in meeting mobility needs in Illinois' small cities and rural 
areas. IDOT urges the subcommittee to fully fund section 5311 at the 
SAFETEA-LU authorized level. Many small urbanized areas have raised 
expectations under SAFETEA-LU and therefore the full appropriation is 
sought. In Illinois, such systems operate in 60 counties and 11 small 
cities, carrying approximately 2.9 million passengers annually.
                                  rail
    Amtrak Appropriation.--IDOT supports Amtrak's request of $1.53 
billion in funding from general funds for fiscal year 2008 to cover 
capital, operating and debt service costs. Amtrak needs the full amount 
of their request to maintain existing nationwide operations. IDOT urges 
Congress to provide funds to continue current service until it develops 
a new national rail passenger policy and a clear plan for any changes 
to existing services as part of the congressional reauthorization of 
Amtrak. Chicago is a hub for Amtrak intercity service, and Amtrak 
operates 58 trains throughout Illinois as part of the Nation's 
passenger rail system, serving approximately 3.3 million passengers 
annually. Of the total, Illinois subsidizes 28 state-sponsored trains 
which provide service in 4 corridors from Chicago to Milwaukee, Quincy, 
St. Louis and Carbondale. Amtrak service in key travel corridors is an 
important component of Illinois' multimodal transportation network and 
continued Federal capital and operating support is needed.
    CREATE--Chicagoland Region Environmental and Transportation 
Efficiency Program.--IDOT requests a fiscal year 2008 earmark of $10 
million to support continued funding of the CREATE program that will 
improve the movement of freight through the Chicago region and will 
improve the overall efficiency of freight movements throughout the 
Nation.
  --Passenger Rail-Freight Congestion Relief.--IDOT requests a fiscal 
        year 2008 earmark of $1 million for engineering for selected 
        capital infrastructure improvements necessary to relieve 
        passenger and freight train congestion on the three state-
        supported downstate corridors.
                                aviation
    Airport Improvement Program Obligation Limitation.--IDOT supports a 
fiscal year 2008 Airport Improvement Program (AIP) obligation 
limitation that, despite any programmatic restructuring as offered 
under the President's proposed plan, will net at least the same level 
of funding for airports as under VISION-100. In addition, IDOT supports 
a reauthorization bill that provides consistent increases to the AIP 
obligation funding levels in the out-years similar to the $100 million 
per year increases authorized during the 4 years of VISION-100.
    Adequate AIP funding remains especially important for Small, Non-
Hub, Non-primary, General Aviation and Reliever airports. While most 
Large/Medium Hub airports have been able to raise substantial amounts 
of funding with Passenger Facility Charges, the smaller airports are 
very dependent on the Federal AIP program. Airports must continue to 
make infrastructure improvements to safely and efficiently serve 
existing air traffic and the rapidly growing passenger demand. The most 
recent National Plan of Integrated Airport Systems (NPIAS) report 
identified $41.2 billion in airport development needs over a 5-year 
period (2007-2011), an annual average of $8.2 billion. More 
significantly, the Airports Council International-North America 
recently estimated that U.S. airport development costs (capital 
projects, terminal work, parking lots, etc.) will exceed $71.5 billion 
through 2009 (an annual average of $14.3 billion from 2005 through 
2009). Lower AIP obligation levels will mean less Federal funds for 
airport projects, thereby exacerbating the existing capital project 
funding shortfall.
    Essential Air Service Program (EAS).--IDOT supports an EAS program 
funded at a level that will enable the continuation of service at all 
current Illinois EAS points. Several Illinois airports, Decatur, 
Marion/Herrin and Quincy, currently receive annual EAS subsidies.
    Small Community Air Service Program.--IDOT supports funding for the 
Small Community Air Service Development Program at the full authorized 
fiscal year 2008 level of $35 million. In fiscal year 2006, Abraham 
Lincoln Capital Airport in Springfield, Illinois received $390,000 
under this program. Other airports in Illinois have received funding 
from this program in the past.
    This concludes my testimony. I understand the difficulty you face 
trying to provide needed increases in transportation funding. However, 
an adequate and well-maintained transportation system is critical to 
the Nation's economic prosperity and future growth. Your ongoing 
recognition of that fact and your support for the nation's 
transportation needs are much appreciated. Again, thank you for the 
opportunity to discuss Illinois' federal transportation funding 
concerns.
                                 ______
                                 
 Prepared Statement of the National Association of Railroad Passengers
    The National Association of Railroad Passengers strongly supports 
the Senate Budget Resolution level of $1.78 billion for Amtrak. This 
includes $100 million--likely to be administered by the Federal 
Railroad Administration--for a Federal matching program to support 
State corridor development work, and $50 million for station-related 
Americans with Disabilities Act work.
  --This is the third straight year that an Amtrak board composed 
        exclusively of President Bush's appointees has supported 
        significantly greater Federal investment in the Nation's 
        passenger train system than the administration has requested.
  --The Bush Administration, like Amtrak and our Association, supports 
        a Federal/State matching program for intercity passenger train 
        service. But we oppose the administration's proposal to fund 
        this by taking it from Amtrak's appropriation.
  --The administration's proposed budget of $800 million for Amtrak is 
        unrealistic. Not only would it make it impossible to implement 
        the program the administration proposed and funded for Federal/
        State corridor development, but it likewise would make it 
        impossible to continue existing services.
 there is a strong case for growing the nation's passenger train system
    The public wants more rail service, and is increasingly impatient 
with the extent to which Federal transportation spending remains 
focused on highways and aviation, the least energy-efficient, most 
environmentally damaging forms of transportation (see section II), and 
the most costly. Here are three omens worth noting:
  --California A.B. 32 enacted last year imposes an economy-wide cap on 
        greenhouse gas emissions, including from transportation, 
        beginning in 2009.
  --The Institute for Public Policy Research, which Reuters 
        characterized as ``a leading British think tank,'' urged 
        requiring advertisements for flights or vacations that include 
        flying to carry a tobacco-style health warning to remind people 
        of the global warming crisis. ``The evidence that aviation 
        damages the atmosphere is just as clear as the evidence that 
        smoking kills,'' said IPPR Climate Change Chief Simon 
        Retallack.
  --The long-term trend in the price of oil is up. ``This year, the 
        world is going to use about 86 million barrels of oil per day. 
        And if every oil well in the world were running, assuming 1.2 
        percent production growth, we are producing around 88 million 
        barrels a day. Reserves that we are putting on, in general, 
        don't produce as fast as the reserves we are replacing . . . 
        [The economies of India or China] may slow, but from a double-
        digit level to something that is still very high . . . The 
        chance of demand going down for energy is remote to none.''--
        John Segner, Portfolio Manager, AIM Energy Fund (interview in 
        Barron's, March 19, 2007).
    Current U.S. reliance on air transport for mass travel may well not 
be sustainable. We cannot assume the indefinite existence of 
``bargain'' airlines or airfares, which depend heavily on cheap oil, 
given what we already know about oil supply and demand worldwide.
                           energy efficiency
    The Transportation Energy Data Book, published annually by Oak 
Ridge National Laboratory under contract to the U.S. Department of 
Energy, shows that Amtrak is 18 percent more energy efficient per 
passenger-mile than scheduled airlines and 17 percent more efficient 
than automobiles (2003 data, the most recent reported; a passenger-mile 
is one passenger transported one mile). These are actual figures based 
on total energy consumption by the systems, and load factors.
    General aviation (including corporate aircraft) is even less energy 
efficient. Oak Ridge reports that general aviation was 2.6 times (162 
percent) more energy intensive than certificated air carriers in 2001, 
the last year for which data are available; other modes are 2003 data:

                BRITISH THERMAL UNITS PER PASSENGER-MILE
------------------------------------------------------------------------

------------------------------------------------------------------------
Commuter Railroads.........................................       2,751
Amtrak.....................................................       2,935
Automobile.................................................       3,549
Certificated air carriers..................................       3,587
Light trucks (2-axle, 4-tire)..............................       7,004
General aviation (2001)....................................      10,384
------------------------------------------------------------------------
Lowest = most energy efficient.

    Amtrak's showing would be even more favorable with the benefit of 
adequate investment in rail infrastructure and rolling stock. The 
results above compare highways and aviation which have benefited from 
decades of investment by all levels of government while Amtrak depends 
on a largely inadequate and outdated rail network that government has 
consistently ignored. (We appreciate that the neglect would have been 
even worse but for the efforts of Congress.)
              route cutting is not in the public interest
    Pressure to downsize Amtrak's already shrunken, minimal system even 
more is contrary to the public's need for high quality mobility 
choices. It is appropriate to increase the cost-effectiveness and on-
time performance of the system, but further downsizing will not do 
this. Efforts to increase service and expand the route network would 
drive economies of scale that would improve economic efficiency and 
better serve the public need for safe, reliable and energy efficient 
mobility.
    None of the current routes is expendable. When considered in terms 
of the service Amtrak provides, the public makes heavy use of all 
existing routes; there are no ``empty trains.'' The current trend is 
positive. Travel on overnight trains as a group rose 3 percent in the 
first half of fiscal 2007 and yield (revenue per passenger-mile) 
climbed 4 percent compared with year-earlier figures. Comparing the 
entire fiscal 2006 with fiscal 2005, yield jumped 10 percent while 
passenger-miles fell only 3 percent despite major service disruptions 
caused by Hurricane Katrina. Amtrak is not ``giving away the store.'' 
Congress's oversight should focus on year-long averages and not get 
distracted by individual fares offered selectively on the internet.
    Attempts to improve economic efficiency by forcing removal of the 
``weakest routes'' have not been effective in the past and likely will 
continue to fail in the future because of ``network interdependencies'' 
that affect both cost and revenue:
  --A significant proportion of passengers on overnight national 
        network routes connect with other Amtrak routes. The 
        elimination of one route takes revenue away from surviving 
        routes;
  --The elimination of one route doesn't eliminate all of the costs 
        allocated to it; many of those costs are just transferred to 
        remaining routes.
  --Further tinkering with Amtrak's current route structure risks great 
        damage to the system's usefulness to travelers both now and in 
        the future, while doing little to reduce Amtrak's operating 
        grant requirement (and possibly increasing it).
    The purpose of identifying ``weak'' routes should be only to focus 
management's attention on improving the attractiveness of the service 
and raising fare box recovery.
    It is important to measure performance with metrics that are both 
accurate and appropriate. For example, Amtrak reports separate 
financial results for the Sunset Limited and Texas Eagle. This creates 
the illusion that the Sunset has a loss per passenger mile nearly 
double that of the Eagle. In reality, the Sunset and Eagle run as a 
single combined train San Antonio-Los Angeles; it is impossible to 
segregate the revenue and cost into two separate trains. When treated 
as a single train, the ``net cost'' of operating Eagle/Sunset is in 
line with other overnight long distance routes. Elimination of the 
Sunset would significantly increase the ``net cost'' of the Eagle, 
producing either much higher Eagle costs or much lower revenue, 
depending on whether or not Amtrak continued the San Antonio-Los 
Angeles segment.
    ``Subsidy per passenger'' is not a standard measure for intercity 
travel because it ignores wide variations in trip lengths of different 
passengers. Consequently, it is not an economic measure but a statement 
of prejudice against passengers taking long trips, and against rural 
America. More reasonable measures include revenue-to-cost ratio, 
operating ratio (opposite of revenue-to-cost; frequently used in the 
railroad industry, loss per seat-mile and loss per passenger-mile.
    No matter how many routes get cut, there always will be another set 
of ``worst performing routes'' that become the next targets for 
elimination. The most effective strategy to improve Amtrak's utility 
and economic efficiency is for Amtrak to focus on increasing volume and 
revenues, not reducing or eliminating service.
                 overnight trains: a national treasure
    Here are some of the major reasons Congress should maintain and 
expand nationwide passenger train service. An expanded national network 
will provide:
  --Mobility for the one of every three Americans who does not drive.
  --Mobility for millions of Americans who cannot or do not want to 
        fly, in major markets with affordable air fares and markets 
        with little or no alternative public transportation.
  --An essential link between underserved rural communities and 
        metropolitan areas.
  --A foundation for future rail development that facilitates start-up 
        of shorter-distance intercity services and commuter rail 
        operations into congested urban areas--both of which use some 
        of the same tracks and/or facilities.
  --The only intercity passenger train service for people in most 
        States. If all long-distance trains disappeared, the surviving 
        system would serve just 21 States, and the network would 
        consist of only four, isolated mini-networks.
  --Needed transportation capacity with minimum impact on the 
        environment. Except in a few key corridors already at capacity, 
        rail can increase its capacity at comparatively low cost by 
        increasing train length or running more trains on existing 
        infrastructure.
  --Greater public safety; rail is far safer than highways.
  --Enhanced national security both by increasing the energy efficiency 
        of the Nation's transportation system and by giving travelers 
        needed choices in emergencies.
  --On many routes, the best way to see the Nation's natural beauty and 
        the only practical way for those who can't take long automobile 
        trips.
                           shorter corridors
    The need for these services is increasingly well understood, helped 
most recently by strong ridership response to the frequencies Illinois 
added last fall on the lines linking Chicago with St. Louis, Quincy and 
Carbondale. For March, ridership on these lines was up 57 percent, 44 
percent and 75 percent, respectively, over March, 2006.
    States are eager to develop new passenger train services and will 
respond quickly when provided a Federal matching fund program. In some 
cases, like California, the need is for new equipment as ridership 
growth begins to exceed the capacity of available rolling stock. In 
other States, the issue is adding new lines. Thank you for considering 
our views.
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