[House Hearing, 112 Congress] [From the U.S. Government Publishing Office] ACCELERATING THE PROJECT DELIVERY PROCESS: ELIMINATING BUREAUCRATIC RED TAPE AND MAKING EVERY DOLLAR COUNT ======================================================================= (112-6) HEARING BEFORE THE SUBCOMMITTEE ON HIGHWAYS AND TRANSIT OF THE COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE HOUSE OF REPRESENTATIVES ONE HUNDRED TWELFTH CONGRESS FIRST SESSION __________ FEBRUARY 15, 2011 __________ Printed for the use of the Committee on Transportation and Infrastructure Available online at: http://www.fdsys.gov/ U.S. GOVERNMENT PRINTING OFFICE 65-450 WASHINGTON : 2011 ----------------------------------------------------------------------- For sale by the Superintendent of Documents, U.S. Government Printing Office, http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, U.S. Government Printing Office. Phone 202�09512�091800, or 866�09512�091800 (toll-free). E-mail, [email protected]. COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE JOHN L. MICA, Florida, Chairman DON YOUNG, Alaska NICK J. RAHALL II, West Virginia THOMAS E. PETRI, Wisconsin PETER A. DeFAZIO, Oregon HOWARD COBLE, North Carolina JERRY F. COSTELLO, Illinois JOHN J. DUNCAN, Jr., Tennessee ELEANOR HOLMES NORTON, District of FRANK A. LoBIONDO, New Jersey Columbia GARY G. MILLER, California JERROLD NADLER, New York TIMOTHY V. JOHNSON, Illinois CORRINE BROWN, Florida SAM GRAVES, Missouri BOB FILNER, California BILL SHUSTER, Pennsylvania EDDIE BERNICE JOHNSON, Texas SHELLEY MOORE CAPITO, West Virginia ELIJAH E. CUMMINGS, Maryland JEAN SCHMIDT, Ohio LEONARD L. BOSWELL, Iowa CANDICE S. MILLER, Michigan TIM HOLDEN, Pennsylvania DUNCAN HUNTER, California RICK LARSEN, Washington TOM REED, New York MICHAEL E. CAPUANO, Massachusetts ANDY HARRIS, Maryland TIMOTHY H. BISHOP, New York ERIC A. ``RICK'' CRAWFORD, Arkansas MICHAEL H. MICHAUD, Maine JAIME HERRERA BEUTLER, Washington RUSS CARNAHAN, Missouri FRANK C. GUINTA, New Hampshire GRACE F. NAPOLITANO, California RANDY HULTGREN, Illinois DANIEL LIPINSKI, Illinois LOU BARLETTA, Pennsylvania MAZIE K. HIRONO, Hawaii CHIP CRAVAACK, Minnesota JASON ALTMIRE, Pennsylvania BLAKE FARENTHOLD, Texas TIMOTHY J. WALZ, Minnesota LARRY BUCSHON, Indiana HEATH SHULER, North Carolina BILLY LONG, Missouri STEVE COHEN, Tennessee BOB GIBBS, Ohio LAURA RICHARDSON, California PATRICK MEEHAN, Pennsylvania ALBIO SIRES, New Jersey RICHARD L. HANNA, New York DONNA F. EDWARDS, Maryland STEPHEN LEE FINCHER, Tennessee JEFFREY M. LANDRY, Louisiana STEVE SOUTHERLAND II, Florida JEFF DENHAM, California JAMES LANKFORD, Oklahoma (ii) ? Subcommittee on Highways and Transit JOHN J. DUNCAN, Jr., Tennessee, Chairman DON YOUNG, Alaska PETER A. DeFAZIO, Oregon THOMAS E. PETRI, Wisconsin JERROLD NADLER, New York HOWARD COBLE, North Carolina BOB FILNER, California FRANK A. LoBIONDO, New Jersey LEONARD L. BOSWELL, Iowa GARY G. MILLER, California TIM HOLDEN, Pennsylvania TIMOTHY V. JOHNSON, Illinois MICHAEL E. CAPUANO, Massachusetts SAM GRAVES, Missouri MICHAEL H. MICHAUD, Maine BILL SHUSTER, Pennsylvania GRACE F. NAPOLITANO, California SHELLEY MOORE CAPITO, West Virginia MAZIE K. HIRONO, Hawaii JEAN SCHMIDT, Ohio JASON ALTMIRE, Pennsylvania CANDICE S. MILLER, Michigan TIMOTHY J. WALZ, Minnesota ANDY HARRIS, Maryland HEATH SHULER, North Carolina ERIC A. ``RICK'' CRAWFORD, Arkansas STEVE COHEN, Tennessee JAIME HERRERA BEUTLER, Washington LAURA RICHARDSON, California FRANK C. GUINTA, New Hampshire ALBIO SIRES, New Jersey LOU BARLETTA, Pennsylvania DONNA F. EDWARDS, Maryland BLAKE FARENTHOLD, Texas EDDIE BERNICE JOHNSON, Texas LARRY BUCSHON, Indiana ELIJAH E. CUMMINGS, Maryland BILLY LONG, Missouri NICK J. RAHALL II, West Virginia BOB GIBBS, Ohio (Ex Officio) RICHARD L. HANNA, New York, Vice Chair STEVE SOUTHERLAND II, Florida JOHN L. MICA, Florida (Ex Officio) (iii) CONTENTS Page Summary of Subject Matter........................................ vii TESTIMONY Kempton, Will, Chief Executive Officer, Orange County Transportation Authority....................................... 7 Margro, Thomas, Chief Executive Officer, Transportation Corridor Agencies....................................................... 7 Mendez, Victor M., Administrator, Federal Highway Administration, U.S. Department of Transportation.............................. 7 Miller, Debra L., Secretary, Kansas Department of Transportation. 7 Replogle, Michael, Policy Director and Founder, Institute for Transportation and Development Policy.......................... 7 PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS Cohen, Hon. Steve, of Tennessee.................................. 43 DeFazio, Hon. Peter A., of Oregon................................ 44 Duncan, Hon. John, Jr., of Tennessee............................. 46 Johnson, Hon. Eddie Bernice, of Texas............................ 48 PREPARED STATEMENTS SUBMITTED BY WITNESSES Kempton, Will.................................................... 54 Margro, Thomas................................................... 59 Mendez, Victor M................................................. 94 Miller, Debra L.................................................. 104 Replogle, Michael................................................ 120 SUBMISSIONS FOR THE RECORD Kempton, Will, Chief Executive Officer, Orange County Transportation Authority, response to questions from the Subcommittee on Highways and Transit........................... 148 Margro, Thomas, Chief Executive Officer, Transportation Corridor Agencies, response to questions from the Subcommittee on Highways and Transit........................................... 150 Mendez, Victor M., Administrator, Federal Highway Administration, U.S. Department of Transportation: Response to request from Hon. Shuster, a Representative in Congress from the State of Pennsylvania, for the status of Missouri's toll pilot project................................ 19 Response to request from Hon. Richardson, a Representative in Congress from the State of California, for an explanation of the Federal Highway Administration's use of statute of limitation (SOL) notices..................................... 25 Response to questions from the Subcommittee on Highways and Transit...................................................... 180 Response to questions from Hon. DeFazio, a Representative in Congress from the State of Oregon............................ 184 Response to questions from Hon. Eddie Bernice Johnson, a Representative in Congress from the State of Texas........... 185 Miller, Debra L., Secretary, Kansas Department of Transportation, response to questions from Hon. Duncan, Jr., a Representative in Congress from the State of Tennessee........................ 188 Replogle, Michael, Policy Director and Founder, Institute for Transportation and Development Policy: Response to questions from Hon. Duncan, Jr., a Representative in Congress from the State of Tennessee...................... 194 Response to questions from Hon. DeFazio, a Representative in Congress from the State of Oregon............................ 196 ADDITIONS TO THE RECORD American Public Works Association, John Davis, Member, and Chief Engineer, Jacksonville Transportation Authority, written statement...................................................... 204 American Society of Civil Engineers, written statement........... 213 State of Oklahoma, Hon. Gary Ridley, Secretary of Transportation, written testimony.............................................. 217 Texas Department of Transportation, written testimony............ 226 [GRAPHIC] [TIFF OMITTED] T5450.001 [GRAPHIC] [TIFF OMITTED] T5450.002 [GRAPHIC] [TIFF OMITTED] T5450.003 [GRAPHIC] [TIFF OMITTED] T5450.004 [GRAPHIC] [TIFF OMITTED] T5450.005 ACCELERATING THE PROJECT DELIVERY PROCESS: ELIMINATING BUREAUCRATIC RED TAPE AND MAKING EVERY DOLLAR COUNT ---------- Tuesday, February 15, 2011 House of Representatives, Subcommittee on Highways and Transit, Committee on Transportation and Infrastructure, Washington, DC. The Subcommittee met pursuant to notice at 10:02 a.m. in The Rayburn House Office Building, Room 2167, the Hon. John J. Duncan, Jr. [chairman of the subcommittee] presiding. Mr. Duncan. The Subcommittee will come to order. I was just set to announce that Mr. Boswell was going to sit in for Mr. DeFazio, who I heard was on the house floor, but we're glad to have Mr. DeFazio, the former chairman of the Subcommittee here with us. And this is the Subcommittee's first hearing of the 112th Congress, although Chairman Mica and nine others have been going around holding some field hearings and listening sessions, and we'll do quite a bit of that next week. I want to thank all of our witnesses for being here, and so many of the Subcommittee members already here. Some people know I try to start these meetings right on time. It's a sign and respect for those who do come on time, and I especially want to introduce and welcome the new vice chairman of the Subcommittee, Congressman Hanna from New York. He will be sitting in the chair frequently during some of these hearings as we go through the year. We are meeting this morning to receive Federal, State and local input for streamlining the surface transportation project delivery process. There has never been a greater need for professional advice and expertise, and we need that expertise from this very distinguished panel here today. We have to get this right and we need a lot of help to do it from people all over the country. As the reauthorization of the Federal Surface Transportation Programs moves forward, the committee will be looking at potential reforms to the project delivery process. Funding for infrastructure is hard to come by with each passing day, so we must find ways to do more with less. According to the highway planning and project development process timeline put together by the Federal Highway Administration, the project delivery process can take up to 15 years from planning through construction. We have held many hearings. We have had many hearings where it is estimated that we take about three times as long, and usually at three times the cost, to do almost every kind of infrastructure project that comes out of this committee--three times longer than any other developed Nation. We have got to speed those projects up, not only to save money, but so that we can do more with less. Limited financial resources for transportation infrastructure can be more effectively utilized by speeding up the process for project approval. SAFETEA-LU made small, focused changes to the existing project delivery process, and we have seen some improvement in delivery times as our witnesses will testify. For example, the State of California participated in the Surface Transportation Pilot Program, which allows FHWA to delegate its responsibilities for NEPA to the State. Through this delegation pilot program, California has been able to shave approximately 17 months off the approval process for a standard transportation project. While these improvements are a good start, we can do more. We should be doing more, not just in California, but all over the country. With the highway trust fund unable to keep up with infrastructure demands, and with States facing dire financial situations, the time is right to take a hard look at the existing process. There is no silver bullet for speeding up the delivery of transportation projects, but we simply must do better. I look forward to working with Chairman Mica, ranking member Rahall, and ranking member DeFazio and other members of our committee on approving this process. And I believe the witnesses today will provide us with valuable information on how we can do that. With that, I yield to my good friend, ranking member Mr. DeFazio. Mr. DeFazio. Thank you, Mr. Chairman. And congratulations upon assuming the chair. And I look forward to continuing to work together with you to rebuild and improve our Nation's infrastructure. Bottom line, there is no excuse for unnecessary bureaucratic delays, and we have got to look at ways to eliminate those sorts of things. I think the pilot program, which was extended to California and four other States should be extended. The opportunity should be extended to all the States. Obviously, they have to develop a plan, a framework, and show they will adequately and have the capability of complying with the overarching Federal laws. But then the Department of Transportation moves into an oversight mode as opposed to a direct sort of command and control mode over the State's actions. I want to hear more about section 6002, and whether or not we have fully utilized all of the flexibilities. I mean these are only recent changed. The Bush administration refused to use any of the flexibility in 6002, and the Obama administration has apparently embraced them and made some progress in the last two years, but could more be done? And are there other ways to improve the process? I note that at one point one of the witnesses says how paperwork sits, because the agencies which must participate in the decision, the other concurring agencies are often understaffed, or transportation is the low priority with, say, Fish and Wildlife or somebody else. We've got to figure out ways to deal with that. I think Section 214 that we used for the Corps of Engineers would possibly deal with that where you have a major project that a State wants to move forward, and you have to have the concurrence of these agencies like we have with the Corps of Engineers. The authority could actually help to pay the cost for the Corps of Engineers in the case of 214, or in the case for Fish and Wildlife or other agencies, which are understaffed or have other priorities to move the paper work along. I just had an example last week in my office where there's a critical rail project in my district, a reopening of a rail line to a port in my district that had been closed by a hedge fund. It needed substantial repair, because it had been neglected by the hedge fund. And in order to finish the repairs we have got some Federal money, but we couldn't get the Federal agencies Fish and Wildlife to sign off on the Federal money because some guy was on vacation from the Roseberg office, and the paperwork had been sent down to sit on his desk. It just happened that the State director was in my office that day, the same day that the people from the Port, ICTSI-- they were in my office. I put the two of them together, and they immediately resolved the problem. It wasn't a question of waiving environmental laws or anything else, but the bureaucracy was going to grind on for four or six weeks. So this guy came back from vacation, went through his inbox, and then decided to check the box and send it back to Portland, and let it get to the top of the pile there. And someone was going to check the box and then send it on; and then it gets to the Department of Transportation and by then it might be too late. So that kind of stuff's just had to stop, and we have to figure that out. We have proposed some ways to coordinate these activities better, to have a lead agency in, to urge these folks on, and detailing people from agencies. Again, they might have to be paid for by the sponsoring agency, but there are innovative ideas out there and I want to hear them from the panel, and I'm very open to seeing them adopted. With that, thank you much, Mr. Chairman. I will be going to the floor, but I will be back. Thank you. Mr. Duncan. Thank you very much, Mr. DeFazio. And I ask unanimous consent that all members be allowed to submit written statements for the record. Hearing no objection, so ordered; and I will now ask vice chairman Hanna if he has any statement that he would like to make at this time. Mr. Hanna. [No response.] Mr. Duncan. All right. He does not wish to do so. Does any other member wish to make a brief opening statement on our side? Mr. Boswell. I'm coming now. Thank you, Mr. Chairman, and just briefly, and I look at Mr. Mendez and I have got to say it is a short statement, because we both have seen the situation. First off, I want to say regarding this Fifth Avenue, up there, that I want to refer to in a minute. I have got no quarrel with any of the folks that you've had on the scene. They have been following their instructions, and they have been cordial. And they have stayed on it, but we still haven't got it done. So the story is when we rebuilt the freeway through my capital city, of course, there is the access road, and there is all these rules, regulations and safety and so on and distances. You all know that. But it came up that the industry wanted to access that--alights there. It would be only entering it with right-hand turn, traffic coming from the other direction that would come up there to that light and make a left turn, already, anyway. The light is already there. It would be readjusting the light. There is no expense. It doesn't take a rocket scientist to figure out it would be safe, and there is no cost. And it has just taken months and months and months to get it done, because first-off, it wasn't considered when they did the reconstruction. We understand that, but then it came up that there was this need and this opportunity, and required taking a cyclone fence down and opening up to make right-hand turns onto that situation. We have had a delay from the industry of putting up buildings. The jobs it would have created would have been extensive. It still will, but it is going to be delayed well over a year as we went through this. I don't say this to criticize, Mr. Mendez, and I want you to really understand this. This is not a criticism. This was pointing out that good people, following their instructions and going through a process, it really bogs down. And, you know, the city, the county, the State, and finally the nationals say well, we can do that. But, it has taken so long, and it has cost us a lot of jobs. It has cost us a lot of delay; and, to me, I'm not a transportation engineer and some of you are, would have been around a long time and it made sense, and it's made sense all the way through and it's going to happen, but it's been delayed months and months and months and months. So I just make that point, and I look across this panel there with all the experience you bring to this table. I suspect you could tell stories all day long, and I see your heads nodding. So I think this is very timely, Mr. Chairman, and I appreciate it. And I want every one of us, both sides, to go into this with a very objective let's see, as my son would say, let's get her done. Let's keep safe. Let's don't do things we don't need to do, and protect the taxpayer's investment. We can do that; but, surely, there's a way to do it better, and I think that that's what your goal is, and I am here to help, if I can. Mr. Duncan. Well, thank you very much, Mr. Boswell. Mr. Miller would like to introduce a couple of the witnesses who are from his area. Mr. Miller? Mr. Miller of California. Thank you, Mr. Chairman. With OCTA we have Will Kempton and Peter Buffa here, and they have done a really good job, and I welcome them to Washington. And TCA, we have also got Tom Margro here, and it is good to have all of you here today. I agree on the environmental comments that were made. In fact, in the SAFETEA-LU in 2005 I introduced an amendment that allowed States that either had an environmental process that equaled what the Federal Government did in NEPA, or they exceeded it. And Californians really went along with that and it has worked very well. We are saving about 17 months on the review process right now, which means we are getting projects completed in the review process, and getting them started much sooner than we did in the past. And even though there is a time saving, the integrity of NEPA has never maintained the degradation in any fashion. In fact, we have kept the standards, and they have exceeded what we believe we have before. The goal we have today is we need to create jobs in this country. We have a huge problem on our highway systems throughout the entire system we deal with on this committee; and, if we can do something to streamline the process, I think we should do that. I would like to welcome our witnesses today, and I yield back the balance of my time. Mr. Duncan. All right. Thank you very much, Mr. Miller. Is there anyone else who wishes to make an opening statement? Mrs. Napolitano? Mrs. Napolitano. Thank you, Mr. Chairman. And I agree with my colleague, Mr. Miller, in welcoming the witnesses, especially the California ones. I have worked with Mr. Kempton many a time when he was in Los Angeles transportation. We have many, many issues dealing with transportation in California, and California is the only State to participate in the surface transportation project delivery pilot program and authorized in SAFETEA-LU. We want to continue to be able to hear where we can be able to cut, and somehow our Federal agencies need to understand. California has more stringent standards than the Federal when you are talking about NEPA. And it would help, not only that extra money, that extra time not only can save money, but as was pointed out, it can also provide additional jobs that we so sorely, so desperately need. I have in my area, the Alameda Quarter East, 54 crossings. Only 20 are going to be separated. Well, the sooner we can get those built, the sooner the rest of the Nation is going to get their on-time delivery from the goods coming out of Los Angeles and Long Beach Ports. So those are critical for us, yet we sometimes time it. And we spent additional time, and because right now the projects are coming in under budget, because everybody needs the jobs, needs to spend that to be able to put people to work. Somehow, we need to put the two together and be able to see how we can cut the time and be able to provide those local authorities moving forward on the projects. So with that I thank you, Mr. Chair, for holding this, and I totally agree. Yield back. Mr. Duncan. Thank you very much. Does anyone else on the Republican side wish to make an opening statement? [No response.] Mr. Duncan. And Mrs. Johnson, I think, wants to make one. Mrs. Johnson of Texas. Thank you very much, Mr. Chairman. I agree that we do need to look at ways to improve the environmental review process for highway projects, and we also need to be careful not to unravel the Federal Highway Administration's and the other agency's oversight responsibilities. Last year I heard from several mayors in the southern sector of Dallas County about a project known locally as Loop 9. The idea for this project was first raised in 1957. In 1991 Dallas County voters approved a bond program authorizing over $175 million in bonds for transportation improvements, and that included the funding for Loop 9 feasibility and route alignment study. The Notice of Intent for this study was filed in 2004. Three years later the first draft environmental impact statement was submitted to the Texas Department of Transportation's environmental division; and, finally, last year, the Federal Highway Administration received it for the first time. More recently, I heard from the city of Bull Springs regarding their concerns with seven outstanding issues that were only recently raised by the Federal Highway Administration. These concerns are regarding a project that began in 2005, and I site these examples to demonstrate that we need to find out why completing and reviewing environmental studies has taken so many years. During this delay, the cost of construction, and the purchase of rights away continue to increase. Last week, I introduced legislation, H.R. 551, that would provide help in the environmental review process. And my bill would allow States to use their own funds to assist the Federal Highway Administration in completing its review of Environmental Impact statements. Currently, States may only use certain funds that they receive from the Federal Department of Transportation for this purpose. And, I hope as we consider the next highway bill, we will consider my legislation and other proposals that will move the environmental study process along more quickly, while ensuring that the protection of our environment is intact. Thank you, Mr. Chairman, and I yield back. Mr. Duncan. Thank you very much Ms. Johnson. We will now proceed with the panel and we are very honored to have a very distinguished panel here with us this morning. I ask unanimous consent that our witnesses' full statements be included in the record. Hearing no objection, so ordered. Since your written testimony will be made a part of the record, we request that you limit your oral testimony to no more than five minutes. We have one panel of witnesses today, starting off with Administrator Victor Mendez, who is the top official, the Administrator of the Federal Highway Administration; Ms. Debra L. Miller, who is the Secretary for the Kansas Department of Transportation; Mr. Will Kempton, who is the Chief Executive Officer of the Orange County Transportation Authority. Mr. Kempton is accompanied by Mr. Buffa, who is not providing testimony, but will be available to answer any questions. And Mr. Tom Margro, who is the Chief Executive Officer of the Transportation Corridor Agencies, and Mr. Michael Replogle, who is the policy director and founder of the Institute for Transportation and Development Policy. I want to thank all of you for coming to be with us today, and Administrator Mendez, you may begin your testimony. TESTIMONY OF VICTOR MENDEZ, ADMINISTRATOR, FEDERAL HIGHWAY ADMINISTRATION; DEBRA L. MILLER, SECRETARY, KANSAS DEPARTMENT OF TRANSPORTATION; WILL KEMPTON, CEO, ORANGE COUNTY TRANSPORTATION AUTHORITY; TOM MARGRO, CEO, TRANSPORTATION CORRIDOR AGENCIES; AND MICHAEL REPLOGLE, POLICY DIRECTOR AND FOUNDER, THE INSTITUTE FOR TRANSPORTATION AND DEVELOPMENT POLICY Mr. Mendez. Thank you and good morning, Chairman Duncan and members of the Subcommittee. I want to thank you for this opportunity to appear before you today. I am very pleased that my first appearance before this Subcommittee as the Federal Highway Administrator is at a hearing that is focused on a subject that I have made one of my top priorities at FHWA, and that is accelerating project delivery. As you know, the President's budget was released yesterday outlining some of the administration's ideas for investing in infrastructure, and my colleagues and I at DOT look forward to having discussions with you on this topic in the future. The year 2011 is a very busy and important year for the transportation community. We start the year in a very strong position. Our roads are the safest they have ever been, and we have a track record of success that includes improving our infrastructure and putting our people back to work. But, we also face many challenges--economic challenges, safety challenges, congestion and environmental challenges. Delivery time in this country currently stands at an average of about 13 years for a major project. We do need to do better. We need to speed up project delivery while maintaining and improving project quality. We need to find ways to make our roads safer and maintain environmental quality. My Every Day Counts initiative is designed to help us meet these challenges. We have engaged our State and local partners and those in the private sector in this effort from the very beginning, including the State DOTs through AASHTO, the construction community through AGC and ARTBA, the consulting community through ACEC, and the National Association of County Engineers. We have built Every Day Counts on two pillars. First, we have a tool kit that contains a number of specific strategies to shorten project delivery time. This tool kit includes opportunities to explore and exhaust flexibilities under existing law. For example, on the planning side we can minimize some of the duplication of effort that currently delays projects. We can do that while still protecting the environment and delivering top-quality projects. On the construction phase of a project, we have encouraged the use of innovative contracting practices like Design-Build and Construction Manager/general contractor. There is a real opportunity to save delivery time by doing some things concurrently that under the traditional approach have to be done in sequence. Our second pillar of Every Day Counts encourages the use of five technologies that deserve to be widely deployed into the field today--warm-mix asphalt, prefabricated bridge elements and systems, adaptive signal control technology, the Safety Edge, and geosynthetic reinforced soil. Every Day Counts is about taking effective, proven and market-ready technologies and ensuring their widespread use to improve safety, reduce congestion, and keep America moving and competitive. But it's also important to focus on the bigger picture beyond specific technologies or initiatives. Through Every Day Counts, we started essential dialog throughout our entire industry. We now have people discussing not whether we can shorten delivery time, but how we are actually going to do that. That brings us closer to my real goal within Every Day Counts, which is to create an innovative culture in our community, one that is open to new ideas and new ways of doing business. Every Day Counts challenges the way we have been doing business, and proposes a better, faster and smarter approach for the future. As President Obama has indicated, maintaining and improving our infrastructure is vital to our economic competitiveness and the ability to create good jobs. If we are going to ``win the future,'' as the President has challenged us, we are going to have to out-innovate, out-educate and out-build the rest of the world. Thank you very much for inviting me here today. I look forward to continued work with our transportation partners, this Subcommittee, and other Members of Congress as we move our innovative ways through the industry. Mr. Chairman, I conclude my remarks and thank you. Mr. Duncan. Thank you very much, Mr. Administrator. Ms. Miller. Ms. Debra Miller. Good morning, Chairman Duncan. Thank you for the opportunity on behalf of the State DOTs to share our views on expediting project delivery. On behalf of AASHTO, I want to thank you and Chairman Mica for your commitment to expediting Project Delivery through the 437-day plan and for your willingness to consider potential statutory changes to achieve that goal. We offer our support and any technical assistance you may need from the State DOTs. I also want to commend Administrator Mendez for his Every Day Counts initiative. We see this as a great opportunity, and we fully support the initiative. And I would say I think it is well-named as it sets a good tone and reminds all of us that every day, in fact, does count. Let me summarize four points for you. First, the environmental process has been and continues to be a major contributor to the delay in moving projects from conception to completion. We have made progress, because of the reforms in SAFETEA-LU, but there is still much progress to be made. Today, a major highway project can still take 10 to 15 years or more to complete. That delay results in real costs, not just from inflation, but the opportunity costs from continued congestion, loss productivity and accidents, and, one of the issues I'm very concerned about, the potential loss of public confidence that comes when we have excessive delays. State and local governments are also over burdened with the excessive paperwork and process it takes to advance even the least controversial projects with no environmental impacts. Second, any effort to expedite project delivery should focus on making the process more efficient without compromising environmental projection or opportunities for public participation. The success of the reforms in SAFETEA-LU shows that it is possible to both speed up the process and still preserve and enhance the environment. Third, the environmental process reforms of SAFETEA-LU have been effective in accelerating project delivery. Nevertheless, more can and should be done to refine those provisions to make further progress to the existing process. For example, we can improve upon the pilot program that authorizes delegation of FHWA's full NEPA authority to five States. This program was successfully implemented in one State, California, and I'm sure you'll be hearing more about that. Other States, though, have been reluctant to take this on because of one catch. By assuming U.S. DOT's responsibilities, the States give up the ability to undertake design and right- of-way activities during the NEPA process, a very important mechanism for speeding up the delivery of projects. For many States the flexibility to advance these activities in parallel with NEPA is a critical project delivery tool. In addition, in order to take on delegation, States must waive their sovereign immunity, which many State legislatures are reluctant to agree to. We have three recommendations to improve this program. One, extend it to all States, which will lend certainty to the program that is needed to encourage States to make the substantial investment and time and resources needed to take on delegation. Two, clarify that the States can assume U.S. DOT responsibilities without reducing flexibility to acquire right- of-way and perform design work prior to the completion of the NEPA process. And, three, establish a new pilot program that would give State DOTs the opportunity to take on the increased role in document preparation and agency consultation, but FHWA would retain ultimate approval authority. Finally, refinements to the existing programs to expedite project delivery will help, but we also need to focus on new innovations, policies and practices to make a quantum leap in accelerating project delivery. We have several recommendations to build on the successes of SAFETEA-LU. Let me just mention one. We urge you to consider empowering agencies to experiment with innovation. You can do this by giving U.S. DOT and the Federal resource agencies the authority on a pilot basis to waive existing procedural requirements for certain projects; those that are being developed through an integrated planning process at an ecosystem scale. Requirements could only be waived if the agencies could demonstrate that environmental outcomes are not compromised. A model for this approach is a special experiment program authority that FHWA has used in recent years to encourage innovation in contracting, and has played a critical role in encouraging the greater use of public-private participation. Mr. Chairman and Members of the Committee, it is not only possible, but it is essential that we seek and implement creative new ways to accelerate project delivery. It is essential to find ways to deliver a better product faster, cheaper, and with better environmental results. We need more tools and ideas to stretch our precious resources, and to enable us to deliver the best possible value to our customers for their transportation investments. Thank you very much for this opportunity. I will be happy when it's appropriate to answer questions. Mr. Duncan. Thank you very much, Secretary Miller. And Mr. Kempton? Mr. Kempton. Thank you, Mr. Chairman, and thanks for the opportunity to address the Subcommittee today. My name is Will Kempton. I am the Chief Executive Officer of the Orange County Transportation Authority, and I am here today with Peter Buffa. He is a past-year and present director of the OCTA board of directors, and he was really the inspiration and the architect of the OCTA's Breaking Down Barriers initiative. And by way of background, I just wanted you to know that I served five years as the State director of transportation in California. I don't mean to speak for the Department of Transportation in my testimony today, but I think it's important that you know about my background in that area in terms of what I am going to be talking about this morning. The Breaking Down Barriers initiative grew out of a combination of the current recession, where scarce capital investment has led to double digit unemployment and the long- held knowledge that federally funded projects, as the chairman indicated, often can take an extraordinary length of time to process, some 14 years in many cases. This isan effort to unlock the jobs tied up in the Federal project delivery process and create those new opportunities for employment in California and across the Nation without the expenditure of additional, massive amounts of Federal funding. Discussion with Congress and the administration over the past few months has revealed that others in Washington share this point of view. As you've heard from Administrator Mendez, the Federal Highway Administration has the Every Day Counts initiative. Chairman Mica has his 437 plan, which refers to the shortened timeframe it took to rebuild the collapsed Interstate 35 West bridge in Minneapolis. And President Obama recently published an op-ed piece in the Wall Street Journal criticizing ``absurd and unnecessary paperwork requirements,'' and he issued an Executive Order to review existing rules that stifled job creation. This house has passed Resolution 72, calling for regulatory reform. Our stakeholder outreach has included State and local government representatives, key transportation industry and business associates, such as the American Association of State Highway Transportation Officials, and the American Public Transportation Association, and the U.S. Chamber of Commerce for their assistance in our initiative. These efforts have yielded broad support. The initiative is not intended to eliminate necessary environmental protections related to Federal projects, but rather to expedite the process in an environmentally friendly way. OCTA has contracted with Susan Binder and the firm of Cambridge Systematics to conduct in-depth interviews with transportation providers and to coordinate the results to find the most promising areas to seek specific changes in statutes or regulations to expedite project delivery. Cambridge Systematics has conducted over 40 confidential interviews over the past four months with project implementers and trade associations to collect the widest sampling of situations where changes in the status quo can expedite project delivery. We have identified more than 22 changes in existing Federal laws or regulations or practices, which could speed up the project delivery process. We have found that delay in project delivery is generally attributable to the following causes: a misplaced Federal focus on what I am calling micromanagement in the name of good control; on document length in the name of quality; and on processing in place of advancing projects. A failure to adopt a Federal, State and local partnership effort to replace the highly risk averse attitude presently associated with Federal oversight, where delay is considered to be evidence of diligence, is absolutely a problem facing us in the delivery of projects. We also see a failure to penalize delay and reward innovation at the Federal and State or local level. The specifics of our recommendations are being finalized, and we will report back to Congress and the administration when the final report is available, but let me take a moment to highlight a few of these changes that we are talking about. First, as you have heard today, we need to expand and continue the NEPA delegation, which was authorized by SAFETEA-LU. California, again, as you know, is the only State which took advantage of the provisions that were provided for five States across the country. The delegation eliminates a layer of document review, and retains all NEPA and CEQA project review authority within the State. The statewide average time savings for these projects, as Administrator Mendez indicated, is about 10 to 17 months. That's huge. That's a year in terms of getting jobs to the economy sooner. The pilot program, rather, is limited only to highway projects, and it expires on August 10, 2012, and it should be extended and delayed. Second, the planning process should not delay project implementation. We believe there should be greater delegation to the metropolitan planning organizations in terms of amendments to the Federal TIPs. We ran into that problem as we tried to implement the American Recovery and Reinvestment Act. Third, there should be a prompt action provision in law, whereby, Federal agencies will be required to act on project approvals within a set deadline. We are interested in the concept of programmatic environmental review. Where that focus will accelerate project level documentation, but we think a cultural change in the way the Federal Government does business is needed. Mr. Chairman, I am happy to answer any questions during the appropriate timeframe, but appreciate again the opportunity to testify before the Subcommittee today. Mr. Duncan. Thank you very much, Mr. Kempton. And now we will hear from Mr. Margro. Mr. Margro. Thank you, Chairman Duncan and Members of the Committee. My name is Tom Margro. I am the Chief Executive Officer of the Transportation Corridor Agencies, and we are two joint powers authorities formed by the California legislature to plan, finance, construct and operate three toll roads in Orange County, California. I want to thank you for the opportunity to speak before you today to discuss our agency's ongoing challenges over more than 15 years to secure the Federal approvals needed to complete the 241 toll road. Not only is this project critical to alleviating congestion in Orange County, but it will create over 34,000 jobs, and it requires no Federal or State funding. Based on our experiences with the 241 project, we have recommendations for improving the environmental review process. Our agency completed the first 51 miles of our planned 67-mile toll road system in 12 years; however, we have spent the last 15 years trying to accomplish and finish the last 16 miles, as it has been mired in the Federal environmental review process. This project was intended to be a model for improving the complex, Federal environmental process by integrating reviews under NEPA, the Clean Water Act, the Endangered Species Act, and other Federal environmental laws. The process was undertaken through the formation of a collaborative of State and Federal agencies working through a memorandum of understanding among the FHWA, the EPA, Corps of Engineers, and U.S. Fish and Wildlife Service with the FHWA acting as the lead Federal agency. This process gave all of the Federal environmental agencies a seat at the table, and decisionmaking authority throughout the environmental review process. A key aspect of the MOU is the commitment by all agencies to reach consensus on key decision points throughout the process, and also not to go back in revisiting their concurrence, except in limited circumstances related to significant new information or other significant changes. In our case, this process involved two stages for our project. In the first stage, a facilitator was hired to assist the collaborative in their process, and develop the purpose and need statement, and the alternatives for initial evaluation. This stage took four years to accomplish. The second stage took six years, during which technical studies were prepared, alternatives developed and evaluated, and decisions were made about which alternative to carry forward for full analysis in the environmental impact statement. The last two steps of stage 2 included the identification of an environmentally preferred alternative, and an agreement on mitigation measures. In November 2005 the collaborative agencies confirmed in writing their earlier agreement on the preliminary LEDPA, also known as the Least Environmentally Damaging Practicable Alternative. Subsequently, National Marine Fisheries Service concurred with FHWA that the project would not likely adversely affect endangered or threatened fish species. Since the Fish and Wildlife Service had been at the table throughout the collaborative process, the MOU contemplated that the Service would be able to prepare a biological opinion within the 135-day deadline established by the Endangered Species Act. While Fish and Wildlife eventually did produce a biological opinion and a Finding of No Jeopardy, it did so nearly three years after the collaborative agencies had identified the environmentally preferred alternative. When we applied for consistency certification under the Coastal Zone Management Act, certain project opponents, including environmental groups, objected to the project despite the fact that they offered no credible evidence that the project would impact the coastal zone. At this first hint of controversy, Federal agency members of the Collaborative, with the exception of FHWA, questioned the preferred alternative previously identified by these very same agencies, asserted the need for additional environmental studies, and reopened the debate concerning other alternatives. Thus, rather than serving as a model for how to make the Federal environmental process more efficient, our experience with the Collaborative demonstrates that the Federal environmental process is broken and needs fundamental reform. Despite over a decade of effort by these agencies, and expenditures of over $20 million by the project sponsor, ourselves, the process failed as there was no agreement on a preferred alternative. Now, we do have several recommendations and proposals for improving this process, some of which you have heard from the previous speakers. These include allowing States like California with stringent environmental laws to provide NEPA compliance. Prohibit agencies from rescinding their previous concurrence, unless there are significant new facts. Require FHWA to develop an MOU with EPA regarding a reasonable range of alternatives to be examined. Revise regulations to provide that in subsequent NEPA documents you do not have to go back and reconsider issues addressed in prior NEPA documents, and limit resource agency determinations to issues within their own jurisdiction and expertise. We have appended to the testimony a chronology of events associated with this project and certain relevant letters and documents. I thank you for the opportunity to provide testimony, and look forward to answering your questions. Thank you. Mr. Duncan. Thank you very much, Mr. Margro. Mr. Replogle. Mr. Replogle. Good morning, Chairman Duncan, Congressman DeFazio, members of the Subcommittee. I am Michael Replogle, founder of the Institute for Transportation and Development Policy, a non-profit group that helps cities implement transportation and urban development projects worldwide. The Environmental Defense Fund, the Natural Resources Defense Council, and the National Recreation and Park Association have also indicated support for my testimony today. What causes federally-funded transportation projects to suffer delay? The biggest problems are usually lack of funding, or lack of consensus about what project is needed or how a project should be designed. Environmental reviews account for only a small share of transportation project delays; and, in most cases, this is associated with a few highly controversial and complex projects entailing large adverse impacts. Typically, only three percent of projects need an environmental impact statement. Nine out of ten federally supported transportation projects undergo little or no NEPA review and are approved as categorical exclusions or findings of no significant impact. SAFETEA-LU has begun to cut delays by ensuring environmental, land management and natural resource agencies are routinely invited to participate in all planning studies. Early involvement and dialog leads to earlier issue identification and discussion to resolve important issues collaboratively. Critically flawed projects are more likely to be identified and removed from consideration, cutting costs. But cuts in resource agency budgets pose an increasing risk to progress in reducing project delays. A recent GAO report noted that funding constraints hamper the ability of resource agencies to take on extra responsibilities beyond their core regulatory duties, and limit their capacity to respond to concurrent requests from multiple metropolitan planning organizations and State DOTs. To curb project delays, Congress should first protect resource agency budgets. Second, it should in the next transportation bill authorize a set-aside of Federal transportation funds to ensure land management, environmental, and resource agencies, will be involved in State and metropolitan planning and project reviews. Such funding could also ensure agencies map known areas of environmental, historic or other sensitivities. EPA supports such efforts with its NEPAssist, an innovative tool that facilitates streamlined environmental review and project planning. In the face of widespread budget cuts to resource agencies, Congress should not impose more stringent time limits on agency comments and transportation project reviews, or fine agencies that fail arbitrary timelines. Third, Congress should create new incentives for timely project delivery. Strong partnership and coordination among stakeholders, supported by financial incentives, have been successful in engendering early project completion. Congress should allow DOT to reward States and metropolitan areas that consistently deliver projects on time while meeting or exceeding environmental standards. Fourth, Congress should create new incentives to better link transport planning and project reviews. A voluntary pilot program should be created in which U.S. DOT, EPA and other agencies work with certain States or metropolitan areas to determine how to accelerate project delivery through more thorough Federal review of State or metropolitan long-range transportation plans, satisfying NEPA requirements through the planning process so that fewer NEPA requirements need to be satisfied at the project review level. In this way, concerted deliberations about projects might take place earlier in the process. This could be done through new kinds of programmatic agreements or program delivery partnering plans. Fifth, increased use of mitigated findings of no significant impact and categorical exclusions under NEPA could help provide a basis for advancing some transportation projects faster. Recent CEQ guidance on this subject is helpful. Sixth, Congress should encourage greater transportation project design flexibility. Currently, the Federal Highway Administration requires all projects to meet the highest design standards, even when potential traffic volumes may never be realized. This can lead to over-design of projects and bog down projects in drawn out exception requests. Inflexibly applied State DOT design standards can also get in the way of project implementation. I invite the committee to consider the much more detailed analysis in my written testimony, and thank you for the opportunity to testify today. Thank you. Mr. Duncan. Well, thank you very much, Mr. Replogle, and I want to thank all the witnesses for their very helpful and very informative testimony. When we hear that everyone, even President Obama, having written the op-ed for the Wall Street Journal, everybody wants to speed up the process. Nobody wants to hurt the environment, but when we talk about the 13-year average that Mr. Mendez mentioned and various studies show similar figures. I have sat on this committee for 22 years now, and no matter what it is--I chaired the Aviation Subcommittee for six years, the Water Resources and Environment Subcommittee for six years--no matter what it is, we hear that we are taking at least two times, usually three times as long as any other developed nation to do these projects, and we all want to speed these things up so we can do two projects where we could have just done one. It's pretty much that simple, but I will never forget years ago when I was chairing the Aviation Subcommittee. We heard the newest runway at the Atlanta Airport, which is several years old, took 14 years from conception to completion. It took over 99 construction days, and they were so relieved to finally get all the approvals that they completed the project in 33 24-hour days. And we always hear that it's always the environmental rules and regulations that are causing most of the delay, so we need some suggestions. But I am going to go first to members for questions, because members sometimes have to leave, and I will be here for the whole hearing. And so I believe---- The Clerk. [Sotto voce.] Mr. Duncan. Mr. Mendez is going to have to leave, and so what we are going to do, we are going to go first to questions just for Administrator Mendez. Is there anyone on the Republican side who wishes to ask Administrator Mendez a question? Does anybody have a question for--Mr. Miller? Mr. Miller of California. Yeah. But the problem is questions for him relate to many on the panel. I don't know how we are---- Mr. Duncan. Well, we are just trying to help him get on his way, so just go ahead. Mr. Miller of California. Well, you talked about 13 years to deliver a project. I come from the building industry, and I mean I've watched the process for 40 years, and much of it has to do with repetitive paperwork and many projects you have on transportation. And I think some of the authorities you mentioned, they go through this lengthy process and the paperwork when they're completed just gets put aside in some filing cabinet and sits there. That does not do anybody any good. It just protracts projects. And, you know, I look at projects that we have tried to move forward. And the Maglar project--it was improved in 2005 funding--that would have gotten a lot of the preliminary work moved ahead. Yet that funding has never even been released after six years. How do we maintain a global competitiveness and yet deal with the 13-year delivery project stream we have to deal with today? Mr. Mendez. Yes, sir. Thanks for the question. As I mentioned in my opening remarks, and I have a little more detail in the written remarks, at FHWA we have begun looking at various strategies and I refer to Every Day Counts as the over-arching umbrella for the strategies. It's important for all of us, and I do agree with you. That's why I started the initiative. Thirteen years is way too long. In today's society, we have to do something about that and my goal is to cut that in half. There are about 10 strategies that we have outlined under Every Day Counts that really speak to several of the issues that I think all of us here at the panel are really trying to address. We are trying to eliminate duplication of effort through some of those strategies and encourage the use of existing flexibility within the existing regulations. I believe within the framework of what we do, we haven't really tapped all the flexibility within the existing rules, regulations and laws, and so we are attempting to do that as well. And finally, as I mentioned, we are also looking at the construction phase. There are some strategies out there that simply are not deployed on a national basis, including Design- Build, and some other procurement-type issues that I know from my own experience really move our major projects forward very quickly. I think it is important for all of us to think about all of these other strategies that I believe provide a lot of flexibility. Throughout the industry we have not really taken advantage of that flexibility. Mr. Miller of California. Well, the problem I have is that I introduced the language in the TEA-LU bill in 2005 that allowed States to avoid the NEPA process if they met or exceeded those standards, and California is the only State that took advantage of it. I know, Ms. Miller, you mentioned we need to do something, but will the administration's authorization proposal include concepts for accelerating project delivery similar to what we try to do in the pilot program in California? And, as we have discussed, in California it is, say, between 10 and 12 months of process time, which is significant to moving projects. Is the administration going to do something then on a national basis? Mr. Mendez. Well, as you are aware, yesterday the President released the budget. Within the transportation framework you see some of the principles that we outlined. Very clearly, we are looking at reducing some of that red tape, if you will. We did consolidate over 55 programs down to five in our proposal. The other thing that we are looking at are some project delivery ideas, and we want to continue that discussion as we move forward. Mr. Miller of California. Love to work with you on that, and I yield back, Mr. Chairman, because I asked specific to this one individual. Mr. Duncan. Thank you very much. Mr. DeFazio. Mr. DeFazio. Thank you, Mr. Chairman. Mr. Administrator, the full delegation of authority which California has assumed, which has saved considerable time, that was a pilot for five States. Do you have any concerns about that program? Would you support extending that program to the other States should they so request? Mr. Mendez. Mr. Chairman, ranking member, should they so request, the option is there for the other four States. Mr. DeFazio. Well, not under existing law. There are five States eligible under the pilots, but I'm saying if we made it a part of permanent law that States could request that authority, you would not object to that. Mr. Mendez. The benefits are very clear in that regard, given the California experience. Mr. DeFazio. OK. What is the reluctance of other States, given we had five States eligible for pilots. And I don't believe five States---- Mr. Miller of California. Would the gentleman yield? Mr. DeFazio. Yes. Mr. Miller of California. The five States were chosen because there were only five States that met NEPA standards at that point in time. Mr. Mendez. Right. Mr. Miller of California. But that's a very good question, and I hope we can expand it. Mr. DeFazio. And as I understand it, there is a major barrier that States don't want to waive sovereign immunity. They want the Federal Government to be able to be sued for the project, and they want to take authority to do the project, but they don't want to be sued if they do the project and there's a problem. Mr. Mendez. Yes, sir. That is a big impediment. Mr. DeFazio. OK. All right. That is something we would have to work through. And then Mr. Replogle raised the issue of practical design, and this is a problem both at the Federal level and I believe the State level. And at the AASHTO level in terms of their green book, where everybody said--what I hear most commonly from States is ``If I don't do what they say, which is I don't care if you can serve that area with two-lane road, the book says six lanes, sidewalks, guardrails, and this.'' So what if that's in everybody's front yard? You know, would the feds adopt the idea of practical design standards, which I believe would help encourage the States to move in that direction and, you know, try and get projects that are more appropriate, less expensive to construct, and more appropriate for the communities. We took some considerable testimony on this last year. Mr. Mendez. Mr. Chairman, ranking member, certainly we are all trying and striving to reach some of those benefits that you mentioned. Practical design does make sense, but I can assure you that within the current rules and regulations, we do have a process for design exceptions that are available. I know from my experience we used to do that back in Arizona, and so it is not a set rule on everything. But there's a process to allow you some exceptions. Mr. DeFazio. Right. But I think we need to perhaps elevate that issue higher or look at whether the exception process is the right way to go, and then also deal with the problems that have created potential legal barriers, because AASHTO publishes something and then the States adopt it, and then the States are reluctant to change. I mean just looking at how we can sort of facilitate this whole process, and it may be that we need to have the States, AASHTO and the feds sit down and work it out. But I just think there's a lot to be gained and saved through practical design. Thank you, Mr. Chairman. Mr. Duncan. All right. Thank you very much. Mr. Shuster. Mr. Shuster. Thank you, Mr. Chairman. The question deals with the tolling of roads. I know that in TEA-21 there were three pilot projects proposed to be approved. Two of them were approved; one was not, and I just wondered what the current status of Virginia and Missouri is. I understand Virginia is going back to the drawing board, but it seems to me the need to find dollars, if States are willing to come forward with a plan, to toll in those three pilot projects. We should move them forward if we can, if it's possible. Mr. Mendez. Mr. Chairman, Congressman, yes. On the Virginia tolling concept, we are working very closely with them to make sure that happens within the framework of the rules, regulations and the law. I am not up to speed on the Missouri ones, so I apologize for that, but certainly I can get back to you on that. [The information follows:] [GRAPHIC] [TIFF OMITTED] T5450.006 Mr. Shuster. And I know what the outcome of Pennsylvania was. States lined up to want to get into that queue. If Missouri or Pennsylvania or Virginia, obviously, doesn't move forward, are there other States that are interested in looking at that? Mr. Mendez. I am not aware that they are in the actual queue. I'm sure everybody is thinking about how they may get into that queue, but I am not aware that there is a formal list. Mr. Shuster. And another question; I don't believe this is in Federal law that has to be done, but I know that in Pennsylvania when an engineering firm designs a bridge or a roadway, then PENNDOT takes it in and reviews the whole thing again. But once they put that stamp on the engineering firm, they're responsible. They're liable for it, and I just wondered. Across the country, s that general practice that happens? Because it slows the process way down by several months when that occurs, and I just wondered. Is that something that's general practice in other States, or is it something that States contract with an engineering firm, get their stamp, and then say let's move forward? Mr. Mendez. Normally, the engineering firm or the engineer will stamp the project plans and then you move forward. But there is a level of review, because the States have to ensure for themselves that they agree with what's within that project plan. Mr. Shuster. All right. Thank you very much. I yield back. Mr. Duncan. Thank you very much. Ms. Napolitano. Mrs. Napolitano. Thank you, Mr. Chairman, and this question is both for administrator Mendez and Mr. Kempton. As we've been hearing among the surface transportation project delivery pilot program, what are the perspectives on the pilot program from the Federal-State level, and how long has this pilot been in place? Has it been successful, and should it be expended to other modes of transportation and what are your recommendations, if any? That's one question all wrapped up in one. The second one is what are you doing to train, educate, and have input from your respective staffs to be able to speed up the process, change mindsets, because sometimes that's where a lot of the boggling down comes in. Mr. Mendez. OK. I will go first, if you don't mind. Mrs. Napolitano. Please. Mr. Mendez. Mr. Chairman, Congresswoman, let me address your second question first. I have talked quite a bit about Every Day Counts today, and I do totally agree with you that within our industry--not just FHWA--we really need to begin looking at a new way of doing business, and part of that is how do you move the culture forward. My ultimate goal, when I am done in my tenure here, is to have in place throughout the industry a culture of innovation-- not just within FHWA, but I think everybody in the industry needs to get on board. In terms of what we have done more recently, late last year, the final three months of the year, we actually held 10 regional innovation summits where we engaged the private sector, consultants, contractors, and people from the State DOTs and my folks that actually are on the ground--not headquarters people, not people from D.C., people out on the ground--to really begin looking at not only the strategies that I outlined under Every Day Counts, but to begin thinking about what does that culture really look like. I want people to really engage in finding new ideas, being creative, and being innovative and bring those ideas and flush them out and make them happen every day that they come to work. Mrs. Napolitano. Where do they go from there? Mr. Mendez. Well, we did lay out a strategy where every State will go back in concert with FHWA to develop a specific plan to see which of the strategies they will implement. Now, one thing I can tell you, which is part of my philosophy, I understand very clearly that not everything is the same in every State. So that's why we decided every State should go back and work with our folks to develop a State-specific implementation strategy, because what happens in California may not be the same solution in Virginia, for example. Mrs. Napolitano. That is correct. But are you also working on that internally? Mr. Mendez. Certainly, yes we are. Mrs. Napolitano. To what extent? Mr. Mendez. Well, like I said, we have had a lot of internal training. Before we actually began the summits, we had internal training for our division administrators. In every State we have a division administrator and we did our internal training with some of our other key folks to make sure they understood what we are attempting to do within this new Every Day Counts approach. Mrs. Napolitano. Thank you. Mr. Kempton? Mr. Duncan. All right. What we agreed to do earlier was just question Mr. Mendez at this time. We will come back to you for questions to other witnesses. Mrs. Napolitano. Thank you. Mr. Duncan. Does anybody over here have a question for Mr. Mendez? Yes, sir, Mr. Southerland. Mr. Southerland. Thank you, Mr. Chairman. Mr. Mendez, thank you for being with us today. I am curious. What is the single greatest impediment from allowing the States to do more in accelerating project delivery? Mr. Mendez. Mr. Chairman, Congressman, I don't know that there is one single impediment. Mr. Southerland. Yeah. But there has got to be something that just irritates you. I mean, and I am a small business owner and I get irritated daily. And there's got to be just one overriding thing, that if you were king for a day, what could you eliminate and open the door for a greater working relationship between the Federal Government and the States in satisfying the American taxpayer and moving people and products down the road. Mr. Mendez. I suppose if I looked at the world as king for the day, the biggest impediment that I would see is throughout the country we need to really bring our level of coordination and partnership to a higher level. I believe the inability of people to actually sit and meet, and resolve issues on the spot rather than sending reports and e-mails and letters. If we can find a way to get people in, I think it's part of the culture. Bring people together to resolve issues today--not three months from now, not six months from now, but today--we would make a big headway on that. Mr. Southerland. Did you, when you met with the State DOT experts, did they say the same thing? I don't want to put words in your mouth. What do they say as that single, greatest impediment? Is it we are too large, because when you talk about the culture, the culture is large and unfortunately in charge? I mean if you want to simplify things, common sense would say you would have fewer that you have to communicate with, but what do they say to you? What do the State DOT experts say to you regarding the same issue? Mr. Mendez. I can't speak for the States, of course. A lot of concerns have been expressed by the panel here, but I really believe that if you take the project delivery process and you look at the decisionmaking process at every phase, all the way through construction, just our coordination and our ability to resolve issues takes too long. Are there other issues? I will let some of the other panel members address that at the appropriate time. Mr. Southerland. Thank you. Mr. Miller of California. Would the gentleman yield? Mr. Southerland. I yield, yes. Mr. Miller of California. You talk about project delivery. Mr. Replogle talked about lack of funding and EIRs only impact a small amount of projects, early involvement in dialog, which you talked about. Set aside funding for agencies regarding environmental review. That's kind of like paying off the mafia to me. I'm sorry. It really is, but I don't mean to insult the mafia. But the 241 toll road was a great example. They met with every environmental group possible. They met with, I guess, the best was fish and Wildlife. Fish and Wildlife studied every environmental option available. They met with every environmental group to call the impact back, and all they ended up getting at the end was a lawsuit. The problem I see out there, and being a builder for 40 years, is you will go through a process. Get the area approved, and then three different environmental groups will see you. Two want cash, and the other one will take you to court. How do you deal with that? Mr. Mendez. Well, let me kind of step back on the broader issue, just to make sure we are all on the same page. Now, obviously, the major projects that do require an environmental impact statement are where we faced some of these broader, bigger issues. Mr. Miller of California. Let's take the 241 example: 15 years of process; they met with every environmental group that had a name, and Fish and Wildlife addressed their concerns. What can you do to stop those problems from occurring? Mr. Mendez. You mean in terms of lawsuits? Mr. Miller of California. No, in terms of a process that continues forever to end up at the end of it with nothing, there's got to be some resolution on the part of government. We have laws in place that enable these groups to do that, and all they do is hamstring the entire process as government tries to go through local agencies in delivering projects. Mr. Mendez. I think in most cases--and there may be some exceptions--it is the ability to resolve with the appropriate people. Mr. Miller of California. That's what I'd like to see you address. That's my question. We are looking to you in the administration for opportunities and options to problems, and to resolve those problems. We have discussed the problems, but have not seen any proposals that address the problems. Mr. Mendez. If you look at some of our strategies within Every Day Counts, they're attempting to resolve these problems. Will the 10 strategies resolve everything? No, but I think it's a step in the right direction. Mr. Miller of California. I yield back. Thank you for yielding. Mr. Duncan. All right. Mr. Sires? Mr. Sires. Thank you, Chairman, for holding this hearing. It's very important, and having been a local elected official, I have been involved in some projects. Mr. Mendez, you have a recommendation here that I don't really agree with. You have a recommendation that says get involved. Get the environmental attorneys involved early in the process. I have to tell you. My experience in dealing with some of the State environmental attorneys is one issue after another that they seem to come up with. It's like the kiss of death of a project. I wonder if your experience is different than mine that you make the suggestion that getting involved in environmental attorneys early is really helpful, because I just find it just very difficult. I come from the State of New Jersey, and there seems to be more issues added every time you talk to them. They came up with issues that you never saw there before; and many times they're inflexible. I don't know if whether the instructions that you have given your attorneys is to be a little more flexible and understanding to move these projects forward, but they're like the B team. They'll be there when you're there. They'll be there when you're gone. So can you just give me a logic behind this? I think I understand it, but thus it hasn't been my experience. Mr. Mendez. Mr. Chairman, Congressman, yes. My philosophy on that is similar to what I expressed earlier. It seems to me that when you bring the right people together at the earliest possible time to resolve the issues, things move faster. I think somebody here suggested earlier that after you've gone through so many years and somebody comes in at the end and raises new issues, I believe that was Congresswoman Johnson, that's what I am trying to avoid. If you bring the attorneys to the table early to identify those potential legal impediments that we need to resolve today, not three years from today, I believe that really gets us in the game early and helps us resolve issues faster and earlier. Mr. Sires. But they are so inflexible, that in many instances I disagree with that. I am sorry. Thank you, Mr. Chairman. Mr. Duncan. All right. Thank you very much. Administrator Mendez has to leave, so we will let Ms. Richardson ask the last questions to the administrator. Ms. Richardson. Thank you, Mr. Chairman, and thank you for having this very timely hearing. And I remember when we had this a year ago, and out of the hearing I actually introduced a bill called Jobs through Environmental Safeguarding and Streamlining Act of 2010 (JESSA). And I would encourage all my colleagues to maybe consider how we could work together to bring that forward, because we spent a lot of work, and that's my understanding in the committee. I was very well aware of it and it helped us to frame many of the comments we hear today. Mr. Mendez, I just have two questions for you. To your knowledge, have there been any instances of adverse environmental impacts in California or any of the other pilot States due to the alternative process under Section 6005, the pilot project. Mr. Mendez. Mr. Chairman, Congresswoman, no. That I am aware of, we have not had any adverse impact. Ms. Richardson. OK. And then my second and last question, trying to adhere to the chairman's pleasure here, I'd like to build upon Ms. Miller's testimony where she stated the statute of limitations, and I think it's building upon some of my other colleagues, where it's my understanding the purpose of the statute of limitations is to expedite the resolution to affect any transportation projects. Issuing the notice in the Federal Registry is discretionary. If a notice is not issued, the NEPA approval or decision remains subject to the general six-year statute of limitations for civil actions against Federal agencies. Why wouldn't you just do it? Mr. Mendez. I didn't bring the information with me, but we do have information statistics on how many times we actually have issued the notice. And we happened to do it quite often. I just simply don't have the numbers. Ms. Richardson. But why wouldn't you just do it in form if they have met the requirements? If the project is consistent with the approvals, why wouldn't you just normally do it? Why would it be discretionary? Mr. Mendez. I can offer a couple of examples from my experience here at FHWA. I can tell you there has been one arena where we simply didn't have an alternative that we thought would be viable, that from an environmental standpoint would actually move things forward. And rather than issuing a final notice and closing out the determination, if they're in the future, 10 years from now if there's still a need, and there might be some other alternative out there, we didn't want to close out that potential. Ms. Richardson. OK, sir. Would you be wiling to give to the committee and to also those who are testifying the details that you have about this particular issue and why you're not doing it on a consistent basis? And what might you do to consider changing that in the future? Thank you very much. Mr. Mendez. Absolutely. [The information follows:] [GRAPHIC] [TIFF OMITTED] T5450.007 Ms. Richardson. Thank you, Mr. Chairman. Mr. Duncan. Thank you. And Mr. Mendez, one last request. All of the witnesses here today are from the government or academic backgrounds; and most of your working day is spent working with other government officials. I would appreciate if you would do something very simple and easy. Have somebody on your staff write up one letter that you would send out to at least 100 businesses across the country that are in this area and ask for their suggestions as to how we can speed up and simplify the process. And then in about 30 days after you do that, or maybe 60 days, give us a report on any suggestions or a list of suggestions that you've gotten from that process. Would you be willing to do that? Mr. Mendez. Absolutely. Mr. Duncan. Thank you very much. And you are excused now, and we thank you for being with us. Mr. Mendez. Thank you. Mr. Duncan. And we will go now to questions for the other members of the panel, and I believe that we are going to do this in order. We have been asked to do this in the order in which the members appeared. And Mr. Crawford was here first, but he is gone. Mr. Gibbs? Mr. Gibbs. Thank you, Mr. Chairman. I want to probably address Secretary Miller. I appreciate her comments about how we can move forward. Some of the things I see concurrently versus in sequence, and you might want to expand on that a little bit. One thing that's really been bothering me, and you mentioned environmental process is a big part of the problem, and I know Mr. Replogle kind of countered that, went the other way on that. But, you know, the bridge that collapsed up there in Minnesota came in under budget and, I guess, years ahead of time. And it seems to me that the bureaucracy made decisions, because they were forced to make decisions. And I see this all across the board, not just on highway projects, but businesses. We are getting permits from the EPA or whoever to operate. They can't get answers. They just go on and on and on and adds to cost. So I am beginning to think that there is a culture in our bureaucracy not to get excited and not to move things forward, and you might want to talk about that. And then the second part of my question is you talk about waiving States' sovereign immunity and you mentioned right-of-way procurement. Can you expound on that a little bit, because I am new to this committee. This is a new area to me. Ms. Debra Miller. Sure. Mr. Gibbs. Is there something that maybe we should address specifically dealing with right-of-way procurement? Ms. Debra Miller. Sure. Let me start with your first question. I do think there are some cultural issues. I think there are cultural issues inside State DOTs. I can say the head of my State DOT is one of my highest priorities. I mean, you know, I tell our people, you know, every day you ought to feel like the hounds of hell are at your backs. You know, I mean that notion of urgency needs to be driving all of us. And I think that you see the newer leadership, I think, throughout State DOTs who are very much of that mindset. But, certainly, we have long term employees, and I think you see it on the Federal level as well. So I think there are cultural issues we all need to address, and there is no question. Across the board leadership is so important. If you are not providing leadership and directing your staff that what they ought to be concerned about every single day is moving things forward, then you're probably going to get delay. You've maybe heard this before, but there is so much in this environmental arena that in so many of the Federal approaches that is process driven, not outcome driven; and, you know, increasingly, we are all talking about that language, and I think it is much easier to assess whether or not a process has been met than to make the more judgmental call about whether or not you are reaching the right outcome. So it's very easy to fall back on process; but, certainly, we only defined ways to push forward and be focused on outcome. You know. I think we are at varying levels in our State DOTs. I can just tell you we spend a lot of time with those sorts of conversations. I think the leadership issues are very big, whether it's at the Federal level or at our State levels in terms of making these projects move forward. In terms of the second question about right-of-way for instance, our State always purchases right-of-way with State dollars, because we can do that. It's considered at risk, but we can do it. We cannot use Federal dollars to purchase right- of-way until we are all the way through the environmental process. And that so delays a project when you're doing it sequentially in that linear format. So what we will do is we'll finish our final design, and we will do our right-of-way acquisitions using State dollars, knowing full well that they are at risk. But at least we can do it. And either the way the section has been written or the way it's been interpreted by Federal highway, if you have the delegation, you can't do it even at risk. And States just haven't been willing to give that up, because it's such an important way to speed up the process. Mr. Gibbs. Just to follow up on the right-of-way, eminent domain, you know, Ohio the Department of Transportation has what they call ``Quick Take,'' where they can go in, use eminent domain and then start the project. And if a property owner is contesting it, it will go through the process. Does Kansas have a similar, or the Federal Government, is that a problem where they don't have the ability to move the project forward by using an expedited eminent domain process like we do in Ohio? Ms. Debra Miller. Well, I can tell you one of the things that we do is we follow the Federal Procurement requirements. We just find whether we're using State dollars or Federal dollars. It's a better way to do it, but we always try to purchase right-of-way with our own dollars, because we can use expedited processes we could not use under Federal requirements. Mr. Gibbs. OK. Thank you. Thank you, Mr. Chairman. Mr. Duncan. Thank you very much. Mr. DeFazio. Mr. DeFazio. Thank you, Mr. Chairman. Just to follow up on that with Ms. Miller, you know, I have heard various discussions by various State DOTs about why they don't want to engage in these more alternate design, practical design, context sensitive designs. Whatever you want to call it, it has a lot of names. A couple of States have made it very clearly State policy, Pennsylvania among them and others. But one thing I hear is they're concerned about liability. It's not just cultural, but there is a liability concern. How could we address that? Ms. Debra Miller. Well, Congressman DeFazio, I don't know if this will be a good answer to your question. I would say from my perspective, and one of the things we have told our people is, you know, liability shouldn't be our number one concern when we're making these decisions. We have what we call a practical improvement approach. We have been pushing very aggressively to do it, and I think if you are weighing up all the benefits and costs to the State, to the cost of infrastructure, even if in fact you end up being sued in some situation, you know, that consequence and that cost may come nowhere near outweighing the benefit you got from moving forward. So our direction has been, you know. I'm not saying we're not following good, sound engineering principles, but don't let every decision be driven by some fear you might be sued, because there are other losses that are more significant. And one of the things I am very concerned about in everything that we do revolves around public credibility and public enthusiasm. And so, you know, I think sometimes if we are counterbalancing our fear about a liability versus looking rationale and reasonable to the public, moving forward in a way that makes sense to the public, that in my mind oftentimes outweighs the liability issues. Now, I might also say in Kansas we have tort reform that our outward loss, you know, is limited, and so it might be easier for us to make that decision. It may be different in some other States, but again, I think that's a bit of a cultural issue. It's not that there aren't some liability risk, but I believe that gets overplayed in people's minds in terms of being a decisionmaking factor. Mr. DeFazio. Wouldn't normally in your experience or in looking at this issue, would normally these sorts of practical design, context sensitive design, whatever solutions, wouldn't they often be less expensive than the optimized? Ms. Debra Miller. Absolutely. Absolutely. Mr. DeFazio. OK. So, maybe, part of what we should look at from the Federal level is to provide an incentive for people to look at this with a little different cost sharing ratio when States adopt something, which is going to save both the State and the feds money in the end, but the feds will give a little bit of the premium for that. Ms. Debra Miller. I think that's an interesting thing to pursue. I think the other thing, you know, certainly in a safety arena, we all begin thinking about this, and that is there used to be such a notion. You were working on a project and you were going to build the best project you could build right there at that area. Now, we're much more likely to think about the overall system, and how can we expend our dollars in a way that gives us the best system. And, sometimes, the best system means not doing the best individual projects, and so there might be some ways to incentive a system perspective versus a very project-focused perspective. Mr. DeFazio. OK. And then, Mr. Replogle, do you have any thoughts about this since you raised this issue, about either the liability issues, or, some way to incent, taking a look at these sorts of alternate solutions? Mr. Replogle. This is something that comes up in the area of alternative design standards, and could be addressed in the Federal Highway Administration's program for innovation in administration of the Federal code. It was referred to earlier as the Special Experimental Program, and has been used a lot in public-private partnership development. That could also be used in coming up with some ways of reducing this concern about liability among the States in applying design standards. Mr. DeFazio. Well, and what you are saying is perhaps at the point, which if it's an experimental program or it's an exception under Federal rules. I think that immediately raises some flags with people at its exception, as opposed to using a range of accepted standard practice. I think it's important to put an emphasis on looking at lower cost, more appropriate alternatives, that doesn't require you to take an exception or not be part of an experimental program, because I think some lawyer is going to say, ``Wait a minute, wait a minute. Exception, exception, we don't like the word exception. We're going to get sued on that, you know, if there's an accident or something.'' Mr. Replogle. Yeah. But this special experimental program has been widely used in the Federal Procurement process, enabling States to use innovative design bill procedures and other kinds of approaches to expedite project delivery. Mr. DeFazio. Right. But we want to make it mainstream. Mr. Replogle. Right. But using that program to start getting more routine exceptions, instead of having to go through a long paperwork process for design exceptions, that special experimental program might be used to facilitate having States take on, with some Federal handholding, to do deviations without having to go through a lot of paper. Mr. DeFazio. Right. And Mr. Kempton, we will certainly look forward to your final report, and I assume that we will look at issues like this when it comes out. Right. When might we expect it? Mr. Kempton. Mr. DeFazio, we are actually planning to start circulating that document, hopefully, by the end of this month, first of next month. We will have something out probably by mid-March. Mr. DeFazio. Well, we'd love to be on the early distribution list so that we can incorporate some of the ideas into our reauthorization working with the chairman because we need to address this situation. I just wondered, if the chairman would--just one other. I believe there are many cases of inordinate and extreme delay that exceeds the bounds of, shall we say, reasonableness. I am not certain, Mr. Margro, that your project goes there, because as I understand it, it was the California Coastal Commission, which has unbelievable power in your State--which is not extended to entities in any other States I am aware of. I mean we have an LCDC, but they don't have the power of the California Coastal Commission, who opposed the project, and that's what brought it to a screeching halt. In addition, the United States Marine Corps' opposition from the outset, which I think was somewhat problematic. So I don't know that it was just the NEPA that caused you these problems. Mr. Margro. Mr. DeFazio, thank you. The Coastal Commission was an issue and is an issue, but the points that I made in my testimony we never were able. As soon as we got to that point, that was when the agencies, the EPA and the Corps of Engineers backtracked from what they had originally agreed upon. So before we even had our hearing with the Coastal Commission and their decision, those agencies were already backtracking and were already asking for more studies and the reopening of those studies and wanted to do more work, despite the fact that we had spent 10 years and $20 million examining every alternative that they had put on the table. Mr. DeFazio. Right. But I think maybe--I'm not sure it's a solvable problem. And, I mean, when you start out being opposed by the Marine Corps and you're going to run into problems with the California Coastal Commission, I'm not sure. I agree that there are often inordinate delays and we need to deal with that. We're not going to do away with NEPA, but we need to look at how States, and California is a State that has taken jurisdiction. And you've got CEQA, and I am fully willing to accept the equivalence of CEQA, because in many cases it seems to exceed NEPA. But I am not sure whether this project is the best example of these kind of problems, but I am willing to work with anybody who has ideas on how we can obviate unnecessary delays in the future. Thank you, Mr. Chairman. Mr. Duncan. Well, I don't know. I hope we don't get any worse examples. Mr. Farenthold. Mr. Farenthold. Thank you very much, Mr. Chairman. When Mr. Mendez spoke and answered Mr. Southerland's question, if he were king for a day what would he do, and it would be basically get everybody in a room to decide what it is, rather than government by memo. I know in my experience working in the private sector, once you got beyond about five letters or memos, it was time to sit down or you weren't getting anywhere. I would appreciate just a brief response from a couple of the other panel members on whether or not they think this would solve that or not. Mr. Kempton. Mr. Chairman, if I work through their day, the one in direct response to Mr. Southerland's question relative to what is the major impediment, I think I can say it in a word. It's ``trust.'' And, if we could be more trusting of our partners in this effort, both with the environmental groups-- both with the regulatory agencies with the implementing agencies--if we had performed our responsibility in a way that developed our credibility to a point where we could achieve trust in the process, I think we would have gone a long way to correcting that cultural issue that we have been talking about. And, you know, we want to be very careful and make sure we are providing some specific recommendations to the Subcommittee on how you can approach this problem, but it really does involve a cultural change. And I'll site, just briefly, the example of the NEPA delegation in California. I can tell you when we first implemented that process and when our legislature did in fact agree to forego a sovereign immunity in the case of transportation projects. There was a great deal of reluctance--not from the leadership of the Federal Highway Administration, but from some of the staff people, because they had grown up in a culture which was looking very specifically at how we were doing business. Now, I will tell you, and in response to Ms. Napolitano's question, we've had that process in place now for three and a half years, and you've heard the results. And the response from the Federal Highway Administration has been very positive, and I think we have gone a long way in this process to developing that credibility leading to trust. Mr. Farenthold. All right. Now in the written testimony or background material I was provided, there was a document from the Texas Department of Transportation, Texas being my State. That's the first one I read, but, you know, they list the amount of time it takes to get through some of these Federal agencies and Federal processes, signing up to six years dealing with Fish and Wildlife Service, Austin office. I mean that just seems insane. One of the things that I learned growing up is a promise isn't a promise unless it's got a deadline and maybe a review isn't a review unless it's got a deadline. And when it gets out, would anyone on the panel like to comment about the possibility of looking at some of these laws and regulations requiring reviews by various agencies in saying, all right. You've got `x' amount of time, and if you haven't come up with it then, sorry. Mr. Margro. I'd like to comment. I believe that's a very excellent idea. There are in some cases Fish and Wildlife. They have 135 days to give you a biological opinion, and in our case it took over three years after there was a preliminary determination that had already been made that there was No Jeopardy. There are those issues. The same thing with EPA and Corps of Engineers. There's no time limit set. You have to continue to do the study and to do the analyses that are put on the table, if you ever have any hope of being successful. Mr. Farenthold. Go ahead. Mr. Replogle. Yeah. I would say that time limits can be workable, but only if the agencies have the resources needed to meet those time limits. And at a time when, for example, EPA is being asked to take a 36 percent budget hit in the remainder of this fiscal year, their capacity to deliver on timely project reviews is going to be handicapped by those budget cuts. Across all of the States today, we have massive cutbacks in the resource agency budgets, which impairs their ability to go beyond what is their core regulatory missions to get involved in the planning process early, which can often help forestall the kinds of delays that alarm everyone here in the room. And so I think we have to look at how these pieces connect to each other, and budget decisions do impact the ability of agencies to deliver on time. Mr. Farenthold. Even with a limited budget, however, or maybe a limited budget is a good thing. Then it forces an agency to set priorities about what they are going to want to deal with. So I just leave that, and I see I'm out of time. So thank you all very much. Mr. Duncan. Thank you very much. Ms. Napolitano. Mr. Kempton. Mr. Chairman? Mr. Duncan. Oh, yes? Mr. Kempton. I just wanted to say that what you've suggested to the member from Texas is exactly what we're proposing in our Prompt Action provision, which would require a deadline and would require agencies to meet their responsibilities within a specific timeframe. Now, this issue of staffing is something that we have taken very seriously in California, and it is a problem. And I really recognized what Mr. Replogle is saying. The fact of the matter is in our case, in California, many times the State would provide the consultant support or a staff person to actually aid the regulatory agency in conducting the review. That did help speed activity along, and so that is one step that there should be a great amount of flexibility on. Mr. Duncan. Thank you. Ms. Napolitano. Mrs. Napolitano. Thank you. And Mr. Kempton, if you wouldn't mind, the question that I had posed to Mr. Mendez and an answer in regard to staff training input internally, I know that a lot of things have been done on the outreach. But, what about internally? Mr. Kempton. Ms. Napolitano, I think you hit the nail on the head with respect to we have talked in general about this cultural change that needs to occur, and it really does need to be a separate focus. So I liken it to construction management. You can do construction management where you're being the construction inspector where you're down there telling the contractor you don't like the mix of concrete or the width of the rebar; or, you can be assuring quality assurance, which is sort of setting the standards and the frameworks. The Federal Government should be the quality assurance agency, and the State should be the quality control or the construction inspection piece of the equation; and that, I think, is the kind of internal educational process that needs to be pursued with a great deal of vigor. Mrs. Napolitano. Well, it goes back to what you pointed out in trust, because if you've been able to build up that relationship where you know that what you put on paper is actual fact that is being carried out, then there is that level of trust that you can begin to build on and work for. The problem is, sometimes, as you stated, there are budget cuts every single State. So how are we going to be able to deal with it? And it isn't budget cuts that were 10 years ago. We were flush 10 years ago. So what's happened between then and now? And what have we learned are we going to be able to do to ensure in the future we are utilizing that as a lesson to be learned so that we can move forward. And we are downsized, already, and there are going to be more. How do we work together on that? Gentleman? Anybody? Mr. Replogle. There is one key thing that could be done--to set aside a portion of the Federal Transportation dollars that go to States and metropolitan areas to help ensure that the resource agencies have the funding to be involved in the planning process, just as funding is set aside for State DOTs for their planning process and set aside for metropolitan planning organizations for their planning process--have a similar set-aside for resource agencies. And then everybody's at the table; everybody's in the room and the job can get done. Mr. Buffa. And through the chair, Mrs. Napolitano. When you see some of the specifics that we'll bring forward to you shortly in terms of what we're proposing for the process in a very specific sense, there are a significant number of duplicative efforts, which will help in a time of shrinking resources that the agencies themselves, there is a much smarter way to do this that will require much less of an effort on their part, not more of an effort. Oftentimes, when people hear talk about the compression of timelines, they get worried that we're going to have to go into overtime and hire additional people, and whatever, if you just get smarter on how to do this, there will actually be less of a demand on their resources than more. Mrs. Napolitano. But isn't it something that, internally, you can identify? Because we wouldn't be able to tell you what those areas are that you can prevent that duplicity. Mr. Buffa. Absolutely, and that's exactly---- Mrs. Napolitano. Which is going back to staff training input, being able to identify and be able to look at them and see if that is one of the areas that you may be able to move forward to. Answer, Mr. Margro. Mr. Margro. Yes, thank you, Congresswoman Napolitano. I would just say one additional thing. You know, there's this old expression that, you know, people pay attention to whatever the boss pays attention to, and I think one way to make sure that we're aware of how things are progressing with this whole environmental process and project delivery would be to make sure that there's transparency and reporting back to committees like yourselves, so that we can see examples of what's happening with these projects, how long are they taking, and call us. Call other people on these projects to come and testify why these are being held up, including the agencies themselves. Mrs. Napolitano. Thank you. Ms. Miller? Ms. Debra Miller. Yes, I'd just like to add a couple of additional thoughts. Included in our recommendations that's contained in the written testimony are some ideas that I think would be helpful in this area. And this could be done through law. One is having one lead agency at U.S. DOT. Sometimes the fact that there might be more than one modal administration involved, I think, can lead to delay. And if there were one lead agency was clearly the lead agency and was calling all the shots, things would move much quicker. I think picking up on something that Mr. Kempton said, what we'd like to see is moving to the place that States are doing the project by project level analysis, and the Federal Highway Administration is doing the oversight, moving towards more programmatic determinations. If we lay out a program of how we will handle certain things and get Federal Highway to sign-off on that, that as long as we're handling it according to our plan, then we can proceed. I think that that will speed things up too, so I think there are both cultural, attitudinal and leadership issues that could be helpful, and then I think that there are some real, practical, both changes in law and changes in procedures that could also go hand-in-hand in terms of making things speed up. Mrs. Napolitano. Thank you. And thank you, Mr. Chair. Mr. Duncan. Thank you. Mr. Hanna is next on our side. Mr. Hanna. Mr. Kempton. I found a few of your comments very insightful. It matches my 30 years in construction in terms of project delay. Your comments were fairly nuanced, but I thought very insightful, that micromanaging in the name of good project control, that document length has a measurement somehow of quality or purpose, focusing in place of advancing processing. But one that was particularly interesting to me, an erroneous belief that delay is evidence of diligence, also a failure to penalize delay and reward innovation at the Federal and State, local level. Those are fundamentally cultural, but they're also very human traits; and, my personal experience is that people do avoid risk and that bureaucracies--and it's not their fault, necessarily--avoid risk more than most. We always used to say that if you wanted to hold a project up ask a question. And I'm just curious if that's kind of the general experience of the panel, and how do you get around a thing like that? Because it is deeply nuanced. It is cultural, and it also is the natural human element to avoid risk, since basically their checks are the same and their rewards are down. So how do you unwind a thing like that? And, furthermore, how much do you think that adds to the delay, generally, of these processes. Your Orange County Transit Authority seems to think quite a bit. Mr. Kempton. Well, they do if I can be very candid, Mr. Hanna. The fact of the matter is if you look at the history of the project delivery process--and California is an example that is representative of the country, I think--in our own CEQA process, the California Environmental Quality Act, every time the State is sued on a document, that document grows in size, not just for that project, but for every other project that comes after it. There is an additional step that's taken to avoid that legal challenge that was made; and, so, you take a process that may have resulted in the document this thick, and now it's a process that results in a document that is that thick. And, as I said in my comments, I don't think the size of the document relates necessarily to the quality of it. So I am sorry that I don't have another solution, then, to say it is a cultural or an attitudinal issue that needs to be developed, but leadership can, and the Congress and the administration can certainly set a tone for accelerating project delivery. That's the outcome that we are looking for, is getting projects to construction sooner. That will take some time to move down in the process, but it can work. When I was at Caltrans, I focused on being good partners. In my judgment, the Department of Transportation when I became director was not a good partner. Everybody looked inward and not outward at our customers. And so I spent five years trying to change that culture, and I think I made some progress in that regard, but it is a leadership requirement. We are going to have to have, I think, the Congress and the administration saying to the Federal Highway Administration and to the States it's OK to focus on accelerated output. Mr. Hanna. But, implicit in that isn't there the idea that you have to add not just accountability, but an allowance for risk. Mr. Kempton. I agree with that, and I think with respect to the comments that Mr. DeFazio was making, I think that there are some ways. And I hate to say this and my attorneys would probably be very upset with me, but maybe there's a form of design immunity that comes with making decisions within a reasonable framework in terms of flexibility and design standards, which can result in shorter processing times. Mr. Hanna. Thank you. Mr. Duncan. All right. Thank you very much. Mr. Barletta is next. Mr. Barletta. Thank you, Mr. Chairman. And my question will be to Mr. Kempton. I have the pleasure of hosting a listening session in my district this Friday as part of this committee's drafting of a new, long-term Surface Transportation Reauthorization bill. I want to thank Chairman Mica for including my district in his series of meetings behind, held across the Nation, looking at many of the same issues we were discussing here today; namely, improving performance and cutting government red tape. One of the attendees at this Friday's listening post in my district is Thomas Lawson. He is the co-founder of an engineering design firm that designs, builds roads and bridges in Pennsylvania. He recently told me that during the flood of 2006 an emergency bridge project that normally would take up to four years to complete from design to completion, because of the streamlining of regulations from all agencies involved they were able to design, build and complete the bridge in four months. Now, I know that the time from when a contract is awarded, a bid is awarded to the notice to proceed, that in itself could take a few months. My question is that streamlining project delivery seems to be an ongoing topic for prior and current reauthorization bills. What is different about today's climate versus previous authorization bills that indicates that we should make some substantial movement in accelerating project delivery? Mr. Kempton. I think our focus has been on jobs and the economy. When we went through the American Recovery and Reinvestment Act process, we had a large sum of money that was made available to the States and to local agencies for funding projects, many of which had not gone through the Federal process. So in order to spend those dollars quickly, we had to go back and pick up the process to qualify those projects for Federal funding, and we found that that process was onerous and took a considerable amount of time. I referenced that on my testimony relative to amendments to the transportation improvement programs, the Federal TIPs from a conformity perspective. Those are the kinds of things that can be shortened. But, the environment today, Mr. Barletta, that you've referenced, is the economy. We've got projects that if we can get them out to bid, we are achieving 25 to 40 percent savings on the engineer's estimates for those projects. We have a very hungry construction industry out there, and we want to get everything out but the kitchen sink so that we can take advantage of that environment. And I think that that along with the developing notion of regulatory reform that's taking place, both within the administration and the Congress, is a very positive thing. And I know Director Buffa wanted to add to that as well. Mr. Buffa. Yeah. Through the chair. Mr. Barletta, you used the example of a flood in your district. Two examples we quite often use are the 1994 earthquake which flattened huge portions of the I-10 freeway through Los Angeles that connects downtown Los Angeles to the coast. Just much more recently, a horrific fire on the Bay Bridge while Mr. Kempton was in the close of his tenure in Caltrans, which he turned around--not in a matter of months, but literally a number of days. That bridge is critical to the circulation of the entire bay area. What we're trying to say is those were natural disasters. We are in an economic disaster. All of you spend a lot of your time trying to figure out how to create jobs. If you'll accept the economic crisis in the same terms as a natural disaster, those same efforts that expediting mean that you hold, as Members of this Committee, you hold hundreds of thousands of jobs in your hand. You just have to open your hand. They're there. Those of us who have been policymakers in transportation for a long time, I've been at this game since the mid-1980s. The position we are typically in is coming back here begging for money. Give us money for our project. We are not begging for money. We are talking about projects that are paid for. They are stuck in processing. If you will free that process up and you have to leave all of the environmental safeguards in place, if you'll free that process up and make it smarter, there will be an explosion of jobs nationally. You hold that many jobs in your power, so that's the point we are trying to make; whether you want to make it analogous to the 1994 earthquake in our area or the flood in your district, the economic crisis is what we're asking to substitute for the motivation to finally, finally make this happen in a big way. Mr. Barletta. Thank you. Mr. Duncan. Thank you very much. Mr. Southerland is next on our side. Mr. Southerland. Thank you, Mr. Chairman. You know, I find a really screwed up system when given more money just becomes a really well-funded, screwed up system. And I find that the American people have very little patience with better funding for really screwed up systems. As a small business owner and one who ran and has never been a member of elected office before, I am telling you there's a great impatience. OK? And oftentimes, and I have heard members from the panel today talking about we need more money, and that bothers me. You know, when you talk about 13 years to complete a project and you want more money, OK, I find that much of government, they've got to prioritize. OK? You've got to distinguish the same thing the American people are having to distinguish. The difference between what is good and what is best, and what I am seeing in its amazing site to be exposed to for the first time, I am seeing a whole lot of activity, but not nearly enough productivity. And I think that the American people want to see results before they sign off on billions upon billions upon billions of more dollars so that we can perpetuate a really screwed up system into a really, really, really screwed up system. So there've been some wonderful ideas here today. I love the idea of time. Put a time--if you've got an objection to a project. That's probably the single, greatest idea that I've heard today. You know, if I don't put my college children on a budget and say you just come to me whenever you need another $50, well, they're going to keep coming. If I tell them that $50 has got to last you for, you know, a week, well, they know what the rules are. It really comes down to leadership, though. And I've heard Mr. Kempton. You've mentioned leadership, good leadership, servant leadership perpetuates trust. Great leadership also has the element of communication. OK. Well defined projects; you can't get your hands in every project. And, yet, at all levels of government, the American people feel like the government is involved in every part of our lives. So, I asked earlier the question, you know, if you were king for a day. I would say Mrs. Miller, I would like to ask you, if you don't mind, because you represent a State. OK? And Mr. Mendez didn't want to speak for you, so I ask you to speak for yourself. If you were queen for the day, what would you get from the Federal Government that would allow the States to not have their future 15 years down the road, to be able to shrink that timeline. What is the greatest impediment that you see right now for project delivery time? Ms. Debra Miller. I think the issue that I would put on the table is this issue of allowing programmatic plans so that we're not doing project by project reviews, and that States are doing the project by project analysis. And the Federal Highway Administration or the Federal Government, whichever resource agency it might be, would be doing the oversight of what we're doing. Mr. Southerland. I will say I live in Panama City, Florida, and over the last 10 years we've been affected by a couple disasters that have made some front page news: the hurricanes, obviously, and the most recent, Deepwater Horizon. And I will tell you in the recovery--and somebody that lives on the beach, OK--I would concur what you just said. All right? If the Federal Government would have come in and provided assistance, this is our town. We know every nook, every cranny. We know the people in need. We need support, and so I would love to see us going forward, but the Federal Government realized that they have a part and they have to play. But the people on the ground, OK, the local citizens, the local communities, the States know far better what they need for their communities and their State. So I like hearing what you're saying. You've got some great ideas here. It needs to be a partnership, but they needed to be in more of an oversight and supporting role while the States themselves take the ball and run down the field. So thank you for your input, and I yield back. Mr. Chairman? Mr. Duncan. Thank you. Mr. Shuster. Mr. Shuster. Thank you, Mr. Chairman, and thank all of our witnesses for being here today. I would just like to make a comment on what Mr. Southerland said about putting a timeframe in place. You know, that makes a lot of sense. One of the things we have to do in legislation is to stop these groups from putting lawsuits one after the other and slow walking these things, because that's what I saw. A highway in my district, 60 miles, took 38 years to build, and it was mainly due to the--you know, first it was the Indiana bat. Then it was a fern. Then it was some pyrite we found, so it just takes forever to do this, and we've got to limit them on allowing them to go to court after court challenge after court challenge. So, but Mr. Southerland is absolutely right. If you put a time limit and the laws line up, I think we can get things done quicker. My question is concerning--it's very specific, because when we're talking about these things, I like to delve into very specific projects and try to get a sense of how the Federal programs slowed us down. The Anaheim regional transportation intermodal center, which is an important transit site for rail in downtown Anaheim, it's a cost of $184 million; and, of that, the Federal Government is providing $11 million, which is to my calculation about six or seven percent. How are those Federal funds going to affect the project from moving forward, slow it down? Speed it up, I doubt, but if that's the case, let me know. Mr. Kempton. Thank you, Mr. Shuster. Frankly, any time there's a penny of Federal money in there, you're subject to the Federal process and we anticipated that, certainly wanting to maximize the amount of available funding coming to that project. We are looking at, programmatically, for our local sales tax measure, a pretty significant shortfall going out into the future based on the decline of the economy that we've just experienced, and so we have to take advantage of every other dollar that might be out there. However, we have gone through that process. I am happy to say that we have completed the environmental process, and that project will be going to construction this spring. And so, but your point is very well made, and a State or a local agency has to really give careful consideration from a delivery perspective as to whether or not they want to involve the Federal Government. When there is a fiscal imperative that you need those Federal dollars, that's when you get caught in the dilemma, because the process does take longer when you have the Federal requirements. Now, we've been talking a lot about the environmental process, and from our perspective this is not just about the environmental process. It's really about some of the other processes that are in place administratively, regulatory and in some cases statutory. And we are trying to focus on some of the very obvious solutions to the problem, to move project delivery overall ahead faster, and that means jobs will be created sooner. Mr. Shuster. All right. And can you quantify that at all, how much more you had to spend, how you slowed it down from just this project? But also, can you quantify what it does economically or in employment? I don't know if anybody's come in there and sat down with you and made those. Mr. Kempton. I'm not sure that there's necessarily an increase in cost, other than the time-related cost, because process adds dollars to a project. So, for example, the NEPA delegation, which is taking a year or so off the environmental process for many projects in California, at a three or four percent inflation rate, you are saving a significant amount of dollars on a hundred-million-dollar project as an example; so getting it out sooner. And as I mentioned earlier, to the degree that we can get projects to work right now, we're taking advantage of a very good bid environment and we're helping stimulate the national economy by getting people back to work sooner. Mr. Shuster. Right. Well, thank you for the answer, and just real quick to both Secretary Miller and to you, Mr. Kempton, and your years at the Department of Transportation, California. I asked the question earlier about this review process. And in Pennsylvania, you get it. The engineers--they stamp it. And I'm told if that stamp should be good enough to allow things to go forward, unless of course it's maybe some multi-billion- dollar where the State wants to just do a little followup, but in Kansas and in California what's the process there as far as projects and engineering, and their review? Mr. Kempton. I'll start, Mr. Shuster. California is, I think, very interested in what's going on in Pennsylvania. Your design standard flexibility program and practical design, I guess, is the name that we're calling that, has we think worked very effectively. And, again, I know that Caltrans, not to speak for them, is looking very carefully at that approach. It's been more selective or individually focused in terms of project by project attention. A program such as what Pennsylvania and other States are adopting is something that I think would have great application in California. Ms. Debra Miller. If this is responsive to your question, you know, one of the things, like many DOTs, we do in-house design, but we also do a great deal of design with outside consultants. And we've had to work, again, culturally, with our own design engineers, because, you know, my feeling is if we've hired a qualified engineering firm and they have stamped the plans, then our engineers don't have to review every single decision that was made by that design engineer. And I think we've made great progress, but I can tell you eight years ago they would have spent a great deal of time looking at every single calculation that was made; and, so, there is a tendency at every level, I think, for people to think I need to redo it, and we've tried to change that attitude in our department. Mr. Shuster. Thank you very much. Mr. Duncan. All right. I understand that Mr. Long and Ms. Herrera Beutler don't have any questions. Is that correct? Oh. All right. Go ahead, Mr. Long. All right. Go ahead. Mr. Long. Thank you, Mr. Chairman. I've got a question. I asked Mr. Margro first. You were talking about the delay of up to three years, and was that environmental delays? Mr. Margro. The three-year delay was waiting for the U.S. Fish and Wildlife Service to complete their biological opinion and give a report back on that. What happened was when the---- Mr. Long. And it was supposed to take 145 days? Mr. Margro. 135 days. Mr. Long. OK. And what happened? I'm sorry I interrupted you. Mr. Margro. Oh, sure. What happened is they don't do their final determination until there's a selection of the least environmentally damaging, practicable alternative, which is made by the Corps of Engineers and agreed to with EPA. Once that happens, that triggers the formal consultation that Fish and Wildlife then goes ahead and does their evaluation. It's supposed to be completed in 135 days. In our case, it took a little bit over three years. Mr. Long. OK. I've dovetailed that end of the question for Mr. Buffa. You remind me of the attorney, Jerry Spence, when you say in our hands as he would do to the jury, you hold thousands of jobs; and, in this thousands of jobs, if I understood you right, you said the money is there for those projects. All you have to do is open that, but then they did not also say that we have to follow each environmental rule, or did I misunderstand that? And, if so, it doesn't work with your seat right there. Mr. Buffa. I'm sorry, Mr. Long, I didn't understand the very last thing you said. We have to follow what? Mr. Long. You have to follow--I'm from Missouri. It's probably my New York accent that's throwing you off. Mr. Buffa. That's OK. Mr. Long. But we have to follow the EPA rule. You say we've got the money for these projects. We're holding in our hands thousands of jobs, but yet we need to--we can expediate these. I'm trying to paraphrase what you said. Mr. Buffa. Sure. Mr. Long. But you said we can expediate these projects; however, we still need to follow the environmental rules. Is that correct? And, if so, how in the world are we going to do that with what Mr. Margro just went through? Mr. Buffa. That comment, Mr. Long was kind of dovetailing something that Mr. Klempton said, that when you see--and we hope that's very shortly--the specifics of what we're suggesting in this breaking down barriers plan, a lot of it is process related. It would be changes in the process that doesn't affect the environmental process. It would have made Tom's journey shorter and easier only because the whole process would get more efficient. And the best expression I've heard of this problem, we've met with the White House on three separate occasions. We'll be back there tomorrow on this program. They're quite interested. One of the gentlemen we met with early on, I could see the moment of realization in his eyes when his eyes popped open and he realized what we were talking about: process. There are hundreds of thousands of jobs held up nationally, just because of process. He said I don't think the American people would like to know that hundreds of thousands of jobs in this economy right now are being held up because of paperwork on somebody's desk. Mr. Long. I don't like hearing that either, so that's why I earlier said I didn't have any questions, but I've changed my tune. Mr. Buffa. And that's what we're talking about. If we are going to proposed changes and process that leave the environmental processing, the environmental examination, in place, you just do it smarter. Mr. Long. It sounds like you're dreaming in color to me. Mr. Buffa. Well, I've spent a lot of time dreaming. Mr. Long. So these projects not only are funded, they're ready to go, thousands of jobs in our hands. They've already cleared the environmental hurdles. Mr. Buffa. No, they're in the process---- Mr. Long. Well, they go back to say they're really not in our hands. We can't open up our hands tomorrow and produce these jobs like you said earlier, correct? Mr. Buffa. If you put just one measure out of this whole hearing, if you enacted one measure, which is time limits and expiration dates. Mr. Long. That's what we're here for, and I appreciate it, and we will work towards that. Mr. Buffa. That, by far, in my humble opinion is the most concrete suggestion that came out of this discussion. But keep in mind again I've been at this a long time. You're tampering with the primal forces of nature with regulatory agencies when you suggest time limits. Mr. Long. That's where the dreaming in color part comes in, but as Mr. Buffa would say, if you've got all the jobs, let's get ready to rumble. And, Ms. Miller, real quickly, I apologize. In your testimony--I want to make sure I got the right question here. OK. Go to this one. In Kansas do all projects go through the Federal process, and if not are there any State or local ones, just go through a State process? And, if so, do you see a time or cost savings when you don't have to go through this Federal malaise? Ms. Debra Miller. Well, I'd have to say most of our projects go through something that's called a categorical exclusion, and we have a programmatic agreement with Federal Highway, so we make that determination on our own. And, you know, we end up we're a small rural State. We end up with just a handful of projects, typically, that go into environmental assessments or environmental impact statements. So the vast majority of our projects, they're moving forward. They're moving forward in meeting deadlines and timeframes. There's no question about that. Mr. Long. They're going through the Federal process, most of them, and on the State ones, you notice a big--is there anything you do on the State level that we could change on the Federal level, I guess. Is one of them tying into your projects Ms. Debra Miller. Well, if we follow the Federal process, that's what we use for environmental work. We follow the Federal process. Mr. Long. OK. OK. OK. I yield back, although I'm a minute over. Mr. Duncan. That's all right. Well, my goal is to try to complete these hearings in a couple of hours, and I see Mr. DeFazio has come back. Do you want to make closing comments? Mr. DeFazio. No, Mr. Chairman. I want to say I think we've got a good framework from this. We'll look forward to Mr. Kempton's report as being instructive. I think there are places where we should be streamlining the process. I was attempting to do that last year. Be happy to share what I thought might work, and then build with what you want to do on top of that. So I'm really pleased, and I think we got a lot of information in a short period of time. Appreciate your respect for everybody's time. Mr. Duncan. All right. Thank you very much. I think we've heard some very helpful and very informative testimony here today. I do think that we're going to need to do much, much more to penalize delays and reward or incentivize innovations or innovation, or companies that complete projects ahead of schedule. Finally, as a formality, I would ask unanimous consent that the record of today's hearing remain open until such time as our witnesses have provided answers to any questions that may be submitted to them in writing, and unanimous consent that during such time as the record remains open, additional comments offered by individuals or groups may be included in the record of today's hearing. That means, ladies and gentlemen, that all of you on the panel and anyone in the audience wishes to submit any additional opinions, suggestions, ideas or testimony can do so, and that will go in the formal record of this hearing. That will conclude this hearing. Thank you very much. [Whereupon, at 12:08 p.m., the subcommittee was adjourned.]