[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
              HOW SOUTHERN CALIFORNIA FREIGHT TRANSPORTATION 

               CHALLENGES IMPACT THE  NATION
=======================================================================


                                (113-21)

                             FIELD HEARING

                               BEFORE THE

                                PANEL ON

                  21st-CENTURY FREIGHT TRANSPORTATION

                                 OF THE

                              COMMITTEE ON

                   TRANSPORTATION AND INFRASTRUCTURE

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

               MAY 30, 2013 (San Bernardino, California)

                               __________

                       Printed for the use of the



             Committee on Transportation and Infrastructure


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        committee.action?chamber=house&committee=transportation





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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                  BILL SHUSTER, Pennsylvania, Chairman
DON YOUNG, Alaska                    NICK J. RAHALL, II, West Virginia
THOMAS E. PETRI, Wisconsin           PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina         ELEANOR HOLMES NORTON, District of 
JOHN J. DUNCAN, Jr., Tennessee,          Columbia
  Vice Chair                         JERROLD NADLER, New York
JOHN L. MICA, Florida                CORRINE BROWN, Florida
FRANK A. LoBIONDO, New Jersey        EDDIE BERNICE JOHNSON, Texas
GARY G. MILLER, California           ELIJAH E. CUMMINGS, Maryland
SAM GRAVES, Missouri                 RICK LARSEN, Washington
SHELLEY MOORE CAPITO, West Virginia  MICHAEL E. CAPUANO, Massachusetts
CANDICE S. MILLER, Michigan          TIMOTHY H. BISHOP, New York
DUNCAN HUNTER, California            MICHAEL H. MICHAUD, Maine
ERIC A. ``RICK'' CRAWFORD, Arkansas  GRACE F. NAPOLITANO, California
LOU BARLETTA, Pennsylvania           DANIEL LIPINSKI, Illinois
BLAKE FARENTHOLD, Texas              TIMOTHY J. WALZ, Minnesota
LARRY BUCSHON, Indiana               STEVE COHEN, Tennessee
BOB GIBBS, Ohio                      ALBIO SIRES, New Jersey
PATRICK MEEHAN, Pennsylvania         DONNA F. EDWARDS, Maryland
RICHARD L. HANNA, New York           JOHN GARAMENDI, California
DANIEL WEBSTER, Florida              ANDRE CARSON, Indiana
STEVE SOUTHERLAND, II, Florida       JANICE HAHN, California
JEFF DENHAM, California              RICHARD M. NOLAN, Minnesota
REID J. RIBBLE, Wisconsin            ANN KIRKPATRICK, Arizona
THOMAS MASSIE, Kentucky              DINA TITUS, Nevada
STEVE DAINES, Montana                SEAN PATRICK MALONEY, New York
TOM RICE, South Carolina             ELIZABETH H. ESTY, Connecticut
MARKWAYNE MULLIN, Oklahoma           LOIS FRANKEL, Florida
ROGER WILLIAMS, Texas                CHERI BUSTOS, Illinois
TREY RADEL, Florida
MARK MEADOWS, North Carolina
SCOTT PERRY, Pennsylvania
RODNEY DAVIS, Illinois
VACANCY
                                ------                                7

              Panel on 21st-Century Freight Transportation

                JOHN J. DUNCAN, Jr., Tennessee, Chairman
GARY G. MILLER, California           JERROLD NADLER, New York
ERIC A. ``RICK'' CRAWFORD, Arkansas  CORRINE BROWN, Florida
RICHARD L. HANNA, New York           DANIEL LIPINSKI, Illinois
DANIEL WEBSTER, Florida              ALBIO SIRES, New Jersey
MARKWAYNE MULLIN, Oklahoma           JANICE HAHN, California


                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................    iv

                               TESTIMONY

Kome Ajise, Deputy Director for Planning and Modal Programs, 
  California Department of Transportation........................     5
Hasan Ikhrata, Executive Director, Southern California 
  Association of Governments.....................................     5
Marnie O'Brien Primmer, Executive Director, Mobility 21..........     5
Scott Moore, Vice President for Public Affairs, Union Pacific 
  Railroad.......................................................     5
Michael K. Fox, Chief Executive Officer, Fox Transportation......     5
Rick Richmond, Former Chief Executive Officer, Alameda Corridor-
  East Construction Authority....................................     5

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Kome Ajise.......................................................    37
Hasan Ikhrata....................................................    45
Marnie O'Brien Primmer...........................................    55
Scott Moore......................................................    58
Michael K. Fox...................................................    64
Rick Richmond....................................................    68

                       SUBMISSIONS FOR THE RECORD

John S. Halikowski, Director, Arizona Department of 
  Transportation, written testimony..............................    73
Anne Mayer, Executive Director, Riverside County Transportation 
  Commission, written testimony..................................    85
Janice Rutherford, President, San Bernardino Associated 
  Governments, letter to Hon. John J. Duncan, Jr., a 
  Representative in Congress from the State of Tennessee, May 24, 
  2013...........................................................    93
Barry R. Wallerstein, D.Env., Executive Officer, South Coast Air 
  Quality Management District, letter to Hon. John J. Duncan, 
  Jr., a Representative in Congress from the State of Tennessee, 
  June 7, 2013...................................................    96


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 HOW SOUTHERN CALIFORNIA FREIGHT TRANSPORTATION CHALLENGES IMPACT THE 

                                 NATION

                              ----------                              


                         THURSDAY, MAY 30, 2013

                  House of Representatives,
      Panel on 21st-Century Freight Transportation,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The panel met, pursuant to call, at 1:30 p.m., at 1170 W. 
3rd Street, San Bernardino, California, Hon. John J. Duncan, 
Jr. (Chairman of the panel) presiding.
    Mr. Duncan. The panel will please come to order. Good 
afternoon, and I want to welcome everyone to this field hearing 
before the Transportation and Infrastructure Committee's Panel 
on 21st-Century Freight Transportation.
    Before we begin, the first order of business is to ask 
unanimous consent that Representative Grace Napolitano be 
permitted to join the panel for today's hearing. Hearing no 
objection, that will be so ordered.
    This special panel was created by Chairman Shuster and 
Ranking Member Rahall of the Transportation and Infrastructure 
Committee to examine the current state of freight 
transportation in the United States and how improving freight 
transportation can strengthen the United States economy.
    We have traveled to southern California because this region 
is one of the most important trade gateways in the entire 
country. There are many facilities in this area, as all of you 
know, that are critical to the efficient movement of goods into 
and out of and around the Nation. While we have the best system 
in the world, we always have to seek to try to do better, do 
more, and improve it constantly.
    The freight system in this region is truly multimodal, 
incorporating marine ports, border crossings, interstate 
highways, multiple Class I railroads, numerous State highway 
routes, air cargo facilities, intermodal facilities, and 
distribution and warehouse clusters. More than 43 percent of 
the Nation's containerized imports enter the country through 
southern California and go all over the place. We heard 
yesterday that coming into the Ports of Long Beach and Los 
Angeles, that 75 percent of those goods go out to all across 
the Nation. They make their way to every State, every 
congressional district, supporting billions of dollars of local 
economic activity, and millions of jobs. The southern 
California freight network tangibly impacts the lives of 
customers all across this Nation.
    We have an excellent panel of witnesses before us today. I 
am confident that they will be able to help us understand the 
unique freight transportation challenges facing southern 
California and how those issues impact the rest of the Nation.
    Let me just add a few things. I am in my 25th year in the 
Congress. I have participated in field hearings on all sorts of 
topics all across this country. Ordinarily, any committee in 
the Congress is lucky to have two or three Members travel and 
take time out from their districts or their family time to come 
participate in extra field hearings over and above what we do 
in Washington. I am amazed that 10 of the 11 Members appointed 
to this panel came to participate in our activities here in 
southern California.
    And then we have had local representation. Congressman 
Lowenthal has participated. Congresswoman Napolitano is with us 
today. I know Members of Congress sometimes are criticized. But 
I can tell you, to stay in office with just a 2-year term, you 
have to work nights and weekends and holidays. And I can also 
tell you that every Member of Congress, if they want to stay in 
office, they have to spend a lot of time at home in their 
districts, and all of these Members have taken time out that 
they could have been or should have been in their districts, or 
even perhaps on vacation. I think Congresswoman Hahn rearranged 
a vacation that she had planned, and we certainly appreciate 
that. These are dedicated Members.
    We are trying to learn. We want to hear specific 
suggestions. We hope that you will come up with some specific 
ideas or suggestions for things that need to be done, ways to 
make things better.
    I am going to introduce the witnesses in just a few 
minutes. First, before I call on the ranking member, Mr. 
Nadler, yesterday we were in Congresswoman Hahn's district and 
I had her welcome the group to her district, and I would like 
to call on my friend, Congressman Miller, to make whatever 
comments he wishes to make at this point.
    Mr. Miller of California. I would like to welcome you to 
the 31st Congressional District, known as the Inland Empire. As 
we sat at the harbor yesterday, we looked at the containers, 
where 80 percent were coming through my district, either to 
stay here or just pass through, and the impact is dramatic.
    I would like to thank SANBAG, Ray Wolfe and Wendy Strack 
for their hospitality here. They put this event on. This is 
very last moment, and we appreciate that opportunity.
    I remember back in 1999, Mr. Chairman, the first field 
hearing you had was in my district also, at Ontario Airport. 
That was the 41st Congressional District. Now your first field 
hearing again is in the 31st Congressional District. So I want 
to welcome you and my colleagues.
    It is important that you see the impact that we face in 
southern California from the amount of cargo that is shipped 
through our areas and the needs we have to deal with air 
pollution and the quality of life and the freeway traffic we 
have.
    And I have some good friends, former manager of the L.A. 
Dodgers, Fred Claire, is here.
    Stand up, Fred.
    This is our Dodger buddy here.
    [Applause.]
    Mr. Miller of California. I have some good friends, 
Supervisor Ovitt here, some other Members, friends of mine, and 
just welcome to the 31st Congressional District.
    Mr. Duncan. Well, I can't resist telling you this. I spent 
5\1/2\ years as batboy for the AA Knoxville Smokies baseball 
team.
    [Laughter.]
    Mr. Duncan. I think I should be in Cooperstown, because I 
don't think anybody was ever a batboy that long. But back in 
those days, minor league baseball was really minor league, and 
I did it the first season and a half for free and the next four 
for $1.50 a game. They couldn't get anybody else to do it that 
cheaply.
    But we had a dinner in my district a year and a half ago, 
and Pete Rose, the famous baseball player, sat next to me at 
the head table. He was the main speaker. I told him I had been 
batboy for the Knoxville Smokies when he played for the Macon 
Peaches, and I was probably 12 or 13 at the time. But when he 
got up to speak, he said, Congressman Duncan, he said I wish 
you were a Senator. But then he said, but you were 9 years old 
when I played at Macon? He said, what the hell happened to you? 
He said, I thought I was sitting next to Colonel Sanders up 
here.
    [Laughter.]
    Mr. Duncan. I still love baseball.
    [Laughter.]
    Mr. Duncan. Let me just say one other thing before I call 
on Mr. Nadler. People get the wrong idea. They think we all 
hate each other in Washington, and that is so untrue because 
most of us get along really well with each other. That is 
especially true on the Transportation and Infrastructure 
Committee, because we frequently say that there is no such 
thing as a Republican road or a Democratic road or various 
things. So even though I am sometimes referred to as the 
chairman of this panel, I consider myself to be the Republican 
cochair, and Jerry Nadler from New York to be the Democratic 
cochair. So I consider him of equal rank to me, and I would 
like to call on him at this time.
    [Applause.]
    Mr. Nadler. I thank you for your graciousness, Mr. 
Chairman. Mr. Chairman, thank you for yielding the time.
    Last month, at the first hearing of the Panel on 21st-
Century Freight Transportation of the House Committee on 
Transportation and Infrastructure----
    Mr. Duncan. It is a New York phone.
    [Laughter.]
    Mr. Nadler [continuing]. I noted that we needed to examine 
freight challenges across the entire supply chain and develop 
multimodal freight solutions. Mr. Chairman, thank you for your 
leadership in bringing the House Transportation Committee's 
Panel on 21st-Century Freight Transportation to southern 
California, because we have seen firsthand some of the 
challenges and solutions of moving goods through the supply 
chain by air, water, rail, and highway.
    Yesterday, we toured the Ports of Long Beach and Los 
Angeles, the eighth busiest port complex in the world, and 
learned of their logistics operations in moving 14 million TEUs 
from vessels that get bigger and bigger with each passing year. 
Today we saw firsthand how that freight must move from the 
ports to the Los Angeles Basin, through the Alameda Corridor, 
the Alameda Corridor-East and Colton Crossing to the Inland 
Empire and east to the rest of the Nation.
    Whether at LAX, the port complex, or the Alameda Corridor 
and ACE, a common thread found in each of these meetings is the 
critical role that these transportation facilities play in 
creating jobs and growing the economy not only in southern 
California but of the entire country. Moreover, time and time 
again we have heard that the Federal Government plays an 
important catalytic role in helping to finance these critical 
transportation investments.
    Replacing the Gerald Desmond Bridge, which we are told 
carries 15 percent of all the freight in the country, with its 
crumbling concrete and low clearances, with a $1 billion new 
span is clearly important to the Port of Long Beach in southern 
California, but it is also critically important to goods 
movement in the entire country.
    Making the highway rail grade crossing investments of the 
Alameda Corridor-East project is important to the San Gabriel 
Valley, but without this investment traffic delays at crossings 
could increase by 300 percent, and that is a grave concern not 
only for southern California but to the manufacturers awaiting 
parts in Kansas City and elsewhere.
    These projects, both of which received large 
congressionally directed Projects of National and Regional 
Significance funding in 2005, clearly illustrate the catalytic 
role that Federal investments can play in financing freight 
projects.
    Moreover, as we have heard throughout this visit and we 
will hear again from our witnesses today, it is extremely 
difficult for individual States to dedicate a significant part 
of their limited infrastructure investment resources to one of 
these high-cost projects because freight does not vote. We have 
often said this country is governed by a one-person, one-vote 
rule, but not a one-container, one-vote rule, and freight, as a 
result, sometimes gets short shrift.
    The cost of these projects are extremely high, often in the 
billions of dollars, and the benefits are diffuse. Thus, States 
are often unwilling to expend their limited Federal and State 
resources on these big-ticket investments, especially when 
voters are much more interested in seeing ribbon cuttings that 
will benefit them directly for things like highways, mass 
transit, and commuter rail.
    However, the Federal Government can weigh the broader job 
creation, economic, environmental and trade export benefits of 
these projects. It is for these reasons that I strongly support 
providing guaranteed Federal funding and a robust program of 
guaranteed Federal funding for the Projects of National and 
Regional Significance Program. In addition, we should focus 
these investments on freight projects that will greatly benefit 
the Nation. It is our opportunity, this special task force, to 
give freight a vote. We can be the catalyst to get the economy 
moving again and provide for the long-term economic growth of 
the Nation.
    But we must provide, in the next transportation bill, in my 
opinion, and I hope the witnesses will address this, a program 
for investments of national and regional significance, and a 
well-funded one.
    Mr. Chairman, thank you again for leading this enlightening 
committee visit, and I look forward to our witnesses' 
testimony.
    Mr. Duncan. Well, thank you very much.
    Before we get to the next person, let me just very quickly 
introduce the members of this panel. Most of you or many of you 
probably know Congresswoman Janice Hahn, who headed up our 
program yesterday.
    Congressman Albio Sires from New Jersey.
    Congressman Dan Lipinski from Chicago.
    Most of you know Congresswoman Grace Napolitano from 
southern California.
    Congresswoman Corrine Brown from Jacksonville, Florida.
    You just heard from Congressman Jerry Nadler.
    You know Congressman Gary Miller.
    Congressman Richard Hanna from New York, just outside of 
Syracuse.
    Congressman Markwayne Mullin, who is a very successful 
businessman, but also a former rodeo bull rider.
    [Laughter.]
    Mr. Duncan. So we have a wide variety on this panel.
    Our witnesses today. The first witness is Mr. Kome Ajise, 
the deputy director for planning and modal programs for the 
California Department of Transportation.
    The next witness is Mr. Hasan Ikhrata, executive director 
of the Southern California Association of Governments.
    Ms. Marnie O'Brien Primmer, who is the executive director 
of Mobility 21.
    Mr. Scott Moore, vice president for public affairs of Union 
Pacific Railroad.
    Mr. Mike Fox, CEO of Fox Transportation.
    And finally, Mr. Rick Richmond, former chief executive 
officer of Alameda Corridor-East Construction Authority.
    So all of your full statements will be placed in the 
record, as is traditional in all hearings. We ask that you 
limit your oral presentations to 5 minutes.
    And, Mr. Ajise, we will start with you, please.

TESTIMONY OF KOME AJISE, DEPUTY DIRECTOR FOR PLANNING AND MODAL 
   PROGRAMS, CALIFORNIA DEPARTMENT OF TRANSPORTATION; HASAN 
IKHRATA, EXECUTIVE DIRECTOR, SOUTHERN CALIFORNIA ASSOCIATION OF 
   GOVERNMENTS; MARNIE O'BRIEN PRIMMER, EXECUTIVE DIRECTOR, 
 MOBILITY 21; SCOTT MOORE, VICE PRESIDENT FOR PUBLIC AFFAIRS, 
    UNION PACIFIC RAILROAD; MICHAEL K. FOX, CHIEF EXECUTIVE 
 OFFICER, FOX TRANSPORTATION; AND RICK RICHMOND, FORMER CHIEF 
EXECUTIVE OFFICER, ALAMEDA CORRIDOR-EAST CONSTRUCTION AUTHORITY

    Mr. Ajise. Thank you very much, Chair Duncan and Ranking 
Member Nadler, for coming out here, distinguished panel 
members. It is our delight to have you here in California, and 
especially in southern California.
    We appreciate the opportunity to testify before you. We 
feel like it is a recognition of this panel's--the panel's 
recognition of the critical nature of southern California's 
place in the national freight system is why we are here today, 
and we really appreciate that. It is our hope that such 
awareness by this panel and the work of this committee will 
result in a stronger Federal partnership in developing a 
freight movement infrastructure, especially in southern 
California.
    With the Los Angeles region having the sixth largest 
economy in the world, southern California's freight 
transportation challenges are indeed the Nation's challenges. 
Fortunately, the Nation is exceptionally well served by the 
complex and continually improving southern California freight 
system. The region's seaports, airports, ports of entry, 
railroads, roadways, and intermodal yards, as well as trans-
loading facilities and warehouses not only support the freight 
mobility that serves approximately 40 percent of the Nation's 
international container shipments, but it also clearly is the 
greenest and the cleanest of any part of the national system, 
if not on the planet.
    This unparalleled freight volume that we have coming 
through southern California does indeed present challenges to 
the region, but also impacts the Nation. The State of 
California and the southern California region have been very 
proactive in addressing many of those challenges, resulting in 
reduced regional impacts and sustained benefits to the Nation.
    There is also a need for a stronger Federal presence, we 
believe, and a need for a greater level of Federal fiscal 
involvement in addressing the southern California freight 
issues as a result. We believe a dedicated source of freight 
funding is needed that does not siphon funding from other 
transportation funds that are also very important.
    As the ninth largest economy in the world, California has 
long recognized the need to support the freight industry so 
that our economy will continue to be a global leader. In 2007, 
the State issued a comprehensive State freight plan known as 
the Goods Movement Action Plan. In many respects, we think the 
GMAP, or the Goods Movement Action Plan, has been a template 
for some of the policies that have come out in MAP-21, and we 
are gratified by that.
    California's adoption of the Goods Movement Action Plan had 
a companion fiscal element that brought new State revenues 
through a voter-approved bond process to the table. In 2006, 
Prop 1-B bond program devoted $2 billion to the Trade Corridor 
Improvement Fund. The bond funds attracted a wide range of 
additional private, local, regional and Federal funds, 
resulting in a current program of about 69 freight projects 
valued at about $6.5 billion, with the majority of those 
projects in southern California.
    The Trade Corridor Improvement Funds project included seven 
seaport projects to the tune of $1.3 billion; six railroad 
projects, about half-a-billion of that; about 28 railroad grade 
crossing projects, about $2 billion of that; and about 15 
highway projects, to the tune of about $1.4 billion.
    MAP-21 includes designation of a national priority freight 
network that will consist of no more than 30,000 highway miles 
nationwide. Our department and some of our regional partners 
have analyzed California's highway system to identify which 
routes carry the highest truck volumes. One of the significant 
challenges we have in southern California is that some of the 
most critical high-volume routes are not interstate highways. 
They are State highways that may be overlooked as part of the 
national freight policy consideration because the data that we 
are using to determine those are not typically ones that are 
collected by the Federal Highway Administration, especially 
under the freight analysis framework.
    Of particular concern to us in southern California are 
State Routes 57, 58, 60 and 91, among many others. These are 
high-volume State routes that are not interstates that do 
indeed carry and shoulder a lot of the freight volume in 
southern California, and most of this volume, as the chairman 
has stated, are goods moving out of the State to other parts of 
the country.
    In a related matter, the vast majority of the containerized 
cargo that comes into and leaves the ports are packed into 
standard 20- or 40-foot marine containers. Many of these 
containers arrive in other ports, are loaded directly onto 
trains at the ports and are hauled to locations throughout the 
country. Many more of these containers are transported by truck 
to trans-loading facilities where they are unloaded and 
repacked into 53-foot containers that are put on tractor rigs 
and then trucked to distant locations. The truck trips between 
the ports and these trans-loading facilities are not counted. 
So these are also elements of the system that are left out.
    In conclusion, based on the MAP-21 guidelines, the State 
has formed a Freight Advisory Committee to assist us in 
developing a freight mobility plan and to provide advice to us. 
This committee cuts across a large cross-section, and we expect 
that that group will have more to bring to the table in freight 
conversations.
    Mr. Duncan. Thank you very much.
    Mr. Ikhrata?
    Mr. Ikhrata. Chairman Duncan, Congressman Nadler and 
Congressman Miller, distinguished members of the panel, thank 
you for being here. Thank you for coming to southern 
California. It is a privilege to be in front of you testifying 
about an issue that is very important to 191 cities, 6 
counties, and over 18 million residents that my organization 
represents.
    I am sure you heard a lot of the things over the past few 
days about how important goods movement is to southern 
California. What I am going to do today is present to you some 
of the challenges and opportunities and some of the 
recommendations as you work on your panel's recommendations.
    Our board, which represents 191 cities--our president, Greg 
Pettis, is here, and some of our board members are here today--
appreciate very much your work on MAP-21, the bipartisan manner 
in which MAP-21 was enacted. We think that work set the stage 
for your work now on this important issue.
    Our agency, along with other agencies, has worked over the 
last 20 years, as Congresswoman Hahn would know in her time at 
SCAG, to highlight that goods movement is an important issue. 
The issues we put on the table are issues that are national in 
nature, and not only specific to southern California. You 
mentioned, Chairman, 43 percent of the containers move through 
our largest port complex. We have the fifth largest airport 
that handles about $70 billion of high-value goods. We have 
Port Hueneme in Ventura County, which handled about $7 billion 
in 2012 of automobile and agricultural product. We have border 
crossings with our largest trading partner, Mexico. All of this 
together creates more than 60,000 jobs directly, 1.6 million 
jobs related, and over $30 billion local, State, and Federal 
revenues. So this is not small change when we talk about our 
ports.
    I just want you to know that in 2012, our ports handled 
about 12 million 20-foot equivalent units--TEUs. Any forecast 
you look at says that will grow--there is a national forecast 
which says this number is going to go to 60 million in 2020, or 
our Ports Capacity Forecast, which says we are going to have 42 
million containers shipped through the ports by 2035. Add to 
that the fact that southern California is the third largest 
manufacturing center in the United States. It is only after the 
State of California and the State of Texas. All of this says 
that we are not only shipping the goods to the rest of the 
Nation, but we need the infrastructure to make sure that these 
goods continue to move in a very safe manner.
    In the last 20 years, working with our partners, 
stakeholders, public and private, we put together a regional 
transportation plan, a freight regional transportation plan 
that was approved by the Federal Government and the State 
government, that was applauded by our partners, environmental 
groups, private sector, public sector, our transportation 
agencies. This plan identified $60 billion worth of investments 
needed to make sure southern California will continue to be the 
gateway for the rest of the Nation.
    It is important for any discussion--and I am sure you hear 
this, and you probably don't want to hear it anymore--but a 
Federal role in this important issue for our Nation is 
paramount. We cannot continue to slip. When you look at reports 
that rank our Nation's infrastructure 17th, down from 7th just 
5 years ago, I am sure you don't want that. We want to be 
number 1. We deserve to be number 1.
    Therefore, there is definitely a Federal role that our 
board feels very strongly that you should play, and oftentimes 
you probably think, oh, they are asking for money. We are not. 
We are asking for money, yes, but this is not the Federal role 
we are talking about.
    Our Nation needs to continue to be competitive globally. 
Our Nation's competitiveness depends on how well we do in 
providing the infrastructure in this region.
    I want to conclude by saying this. First, we all heard 
about the Highway Trust Fund and the fact that the Highway 
Trust Fund's imbalance has to be dealt with. We can't ignore 
it. Very soon we are going to run out of money. Now, there are 
all kinds of options--user fees, taxes, whatever options, a 
combination of all those options. But as our national leaders, 
you want to make sure that you balance that.
    Second, a Federal funding source that does not compete with 
existing sources is needed for goods movement. I know we don't 
have enough money to fund everything, but we also have a role 
as a national government to play in making sure we accelerate 
project delivery. According to our State Department of 
Transportation, a major project right now takes 17 years to 
build. We hired six economists, independent economists 
throughout southern California that say if we accelerate that 
by 5 years, we save billions of dollars, and we create a lot of 
jobs in accelerating by just 5 years.
    And we appreciate the Federal agencies. We know there are 
Federal staff here. We work well with them together. You need 
to empower them to do more so we can accelerate the movement 
that we talked about.
    And lastly, the public expects us to use the dollar wisely, 
and one way to use that dollar wisely is to make sure when we 
move it, we move it fast, safe. I would ask you to support H.R. 
974 that some of the members authored here that puts forth a 
freight fund that is competitively handled, not formula driven, 
based on competitive grants.
    I applaud your hearing today. I appreciate being in front 
of you. I am grateful for you to be here, and I will be happy 
to answer the questions of this panel. Thank you, Mr. Chairman.
    Mr. Duncan. Thank you very much.
    Ms. Primmer?
    Ms. Primmer. Good afternoon, Mr. Chairman, Mr. Nadler and 
Mr. Miller. Thank you and welcome to your district. My name is 
Marnie Primmer. I am the executive director of Mobility 21, and 
we represent 21 million Americans here in southern California, 
about 7 counties, from Ventura all the way down to San Diego 
and Imperial. One of our partners is SCAG, and I am very 
grateful to hear them championing one of the issues that we 
feel is a huge solution for freight, and that is a dedicated 
source of funding that is separate and apart from the Highway 
Trust Fund that would be used solely for freight purposes.
    I have had the opportunity to meet with some of the panel 
members on this topic, and it is near and dear to our heart. So 
rather than reiterating my written testimony, which I know you 
all have, I wanted to focus, as Mr. Nadler requested, on the 
solutions for freight with the time that I have left.
    While Congress authorized the Projects of National and 
Regional Significance, the $500 million that was authorized was 
not appropriated. Obviously, that is a huge concern for our 
region, and we support fully appropriating the funds that would 
be available for the Projects of National and Regional 
Significance.
    However, we do not view that as enough for the needs of 
freight. As you heard Hasan mention, in this region alone we 
have $60 billion worth of projects. There are billions of 
dollars' worth of projects across the Nation in addition to 
that that need to be funded to keep our system globally 
competitive, and that is going to require an additional source 
of funding beyond those that have already been identified.
    Additionally, we are extremely supportive of the expansion 
of the TIFIA program and the ability of freight projects to 
compete for TIFIA loans. However, that is a financing 
mechanism. It is not a funding mechanism, and we would like to 
see an additional source of funding dedicated to freight that 
would be compiled by the local agencies such as SCAG and our 
transportation agencies, our ports, the Alameda Corridor-East 
Authority, and others here in southern California who know 
exactly what our community needs, and others throughout the 
Nation that are doing similar things now.
    When you identify that freight network, as Mr. Ajise 
mentioned, it needs to be more than just highway lane miles. It 
needs to include multimodal facilities like those you have 
toured here in southern California over the last couple of 
days, but also some that you have not had a chance to visit 
yet, from Ventura up to our border crossings down in San Diego. 
So there are many other facilities that are worthy of 
investment right here in southern California that support trade 
in each of your congressional districts.
    In addition to that, the dedicated source of funding that 
we envision would not be something that goes on ad infinitum. 
Once the projects have been funded, we envision that it would 
sunset. We would envision that it would be lock-boxed so that 
it can only be used for freight. It can't be used for some 
library in North Dakota someplace. We want to make sure that 
freight gets its due, and I applaud Mr. Nadler for taking a 
multimodal approach and all of you for taking time out of your 
districts to be here and learn firsthand why southern 
California really is the heart of our national freight network.
    But there are issues here in southern California that you 
have in each of your congressional districts, and that is why 
there needs to be a national plan. That is why we all need to 
work together to make sure that the freight that starts here 
makes it to your district without impacting consumers, without 
impacting taxpayers unnecessarily.
    Our region has worked together, as Hasan mentioned, in a 
bipartisan manner, in a public-private partnership, including 
the environmental community, to develop a plan that is ready 
and willing to put freight to work right here in southern 
California supporting good paying jobs. But we can't do that 
without a strong partnership, and I think you all being here 
right now is the first step towards that.
    Mobility 21, as a nonprofit, has worked with stakeholders 
not only here in southern California but elsewhere throughout 
the country to really rally around this idea of a separate 
dedicated fund for freight, and we look forward to being a 
resource to you and your committee staff as you work to do the 
recommendations that this committee will be putting forward to 
the panel. Thank you.
    Mr. Duncan. Very good. Thank you very much.
    Mr. Moore?
    Mr. Moore. Chairman Duncan, Ranking Member Nadler, and 
members of the panel, my name is Scott Moore, vice president, 
public affairs, Union Pacific Railroad. I appreciate the 
opportunity to summarize my submitted testimony and summarize 
our operations in the Western U.S., as well as here in 
California.
    Union Pacific, 151 years old. But today's railroad operates 
in 23 States and operates on just under 32,000 miles of track. 
We have 45,000 employees with about a $4.3 billion payroll. 
When we talk about investing in infrastructure, our railroad 
across the West last year spent about $3.7 billion, this year 
will spend about $3.6 billion. To give you an idea of what that 
may buy, last year we installed 4.1 million new railroad ties 
across our system and replaced over 1,000 miles of track, all 
the while continuing to invest in terminal facilities, as well 
as in new locomotives.
    Here in California, we have over 3,200 miles of track, 
making us the largest railroad in the Golden State. We have an 
annual payroll of over $430 million, with just under 5,000 
employees. In 2012, we had capital spent in the State of 
California of $376 million.
    Now, our business in California is varied, but certainly 
intermodal is key. In our intermodal franchise, there is really 
two parts to it. There is the international container traffic, 
which you have been seeing out here, which passes through the 
west coast ports primarily in 20-, 40-, or 45-foot containers. 
The domestic business includes container and trailer traffic 
traveling primarily in 53-foot containers. Additionally, less 
than truckload and package carriers with time-sensitive 
business requirements are also an important part of that 
domestic shipment. Union Pacific overall in our system, 54 
percent of that intermodal traffic is international, 46 percent 
is domestic.
    Now, much of this intermodal traffic, of course, flows 
through, in and out of the L.A. Basin, and roughly half of 
those 5,000 employees in California are based here in southern 
California. In our network, we operate 10 intermodal 
facilities, four of which are here in the L.A. Basin. Two of 
those, our intermodal container transfer facility by the port 
and our East L.A. yard, are two of our top-producing intermodal 
yards. The four L.A. Basin facilities combined just do over 1 
million lifts. This compares to 4 million across our system, 
and compares to a second one in Chicago with 1.4 million lifts.
    While we have a number of routes into and out of the L.A. 
Basin, our main corridor is what we call our Sunset Corridor. 
This line runs across Arizona to New Mexico to El Paso. Once in 
Texas, that line branches out, where we have the ability to 
serve Chicago via Kansas City, Memphis via Dallas, and New 
Orleans via southern Texas. We have invested well over $1 
billion in the last 10 years, double tracking this line, L.A. 
to El Paso, and at the end of last year we were 70 percent 
complete.
    In addition to investing in track improvements in the L.A. 
Basin, we are working to modernize our ICTF facility that I 
mentioned. By using advanced and mechanized technology, we can 
improve our throughput at that facility, decrease the 
footprint, and reduce the level of noise and lighting at the 
facility. We made application for this project in 2007 and are 
still unclear when we may be able to move forward and modernize 
the facility.
    Beyond our investments in southern California, we have a 
variety of public-private partnerships that also play an 
important role in the Basin. Next to the CREATE project in 
Chicago, probably one of the country's premier public-private 
partnerships is the Alameda Corridor. Multiple railroads and 
government agencies worked together on the trench that I think 
many of you just went through. We also continue to work with 
Alameda Corridor Transportation Authority, but also the Alameda 
Corridor-East Construction Authority, which was established to 
minimize the flow of goods in the San Gabriel Valley.
    Most recently, we have partnered with a variety of entities 
on the Colton Crossing railroad project, which consists of 
TIGER funding, Prop 1B funding, BNSF private dollars, Union 
Pacific private dollars, and sponsored by SANBAG, the building 
we are in. Eliminating gridlock at Colton Crossing is key. It 
is one of the busiest graded rail intersections in the country. 
It will relieve rail congestion, reduce wait time and delays 
for motorists, and improve air quality in southern California.
    In the future, the L.A. Basin will continue to be a 
critical point for goods movement. Even with the expansion of 
the Panama Canal, we expect traffic to continue to increase 
into and out of the L.A. Basin ports. The Basin is an important 
part of our system, as well as the country's freight 
infrastructure network.
    Thank you very much.
    Mr. Duncan. Thank you very much, Mr. Moore.
    Mr. Fox?
    Mr. Fox. Congressman Duncan, Congressman Nadler, and 
members of the committee, thank you so much for traveling to 
southern California. I know this is terrible weather for you, 
but thank you very much for coming.
    By the way, Fred, Scott has a great voice. I think he is 
the next Vin Scully.
    This is the right place for a meeting like this, in San 
Bernardino, the heart of the Inland Empire. The 31st District 
my friend Gary Miller represents is a critical district for 
what happens not only in this region but for the country and 
for the supply chain network.
    In the Inland Empire, there is 1.7 billion square feet of 
warehouse and distribution space. It is massive and it is 
growing. Each day we truck 10,000 containers to the Inland 
Empire, and it is not an easy task. Today we have problems, and 
I am going to address those in my oral testimony.
    In 2006, when the Long Beach and Los Angeles Port reached 
record numbers, we did more with the same number of vehicles 
and trucks than we do today. In 2006, there were five night 
gates. Today we only have four night gates. In 2006, the 
terminals were open during lunch and breaks. Now they close for 
2 hours on those four night gates. That creates congestion in 
the terminals and a lack of productivity.
    In 2006, most terminals had wheeled operations where the 
containers were on the wheels waiting for the drivers, and that 
is what drivers do: deliver. They shouldn't be sitting in the 
port terminals, and that is what they do today. Today it is a 
grounded operation at all terminals. That means as the 
containers come off the ships, they are placed on chassis, they 
are stacked, and drivers now must enter a port terminal at all 
13 terminals, get in line to find a chassis, get in line to 
have a container stacked onto a chassis, get in another line to 
out-gate, and this takes about 2 hours as an average today. 
This is not the best utilization of the drivers' time, and it 
certainly affects the supply chain.
    The near-term solution to this is to implement five night 
gates, Sunday through Thursday night. Sunday is when there is 
the least amount of traffic on our local freeway system, so we 
can deliver a lot of freight on Sunday night. Also, we have--I 
won't point out the individual--we have Walmart in the 
audience, and they would love to have their freight on Monday 
mornings, which we could do if we had a Sunday night gate. 
Today, Walmart must wait until Tuesday morning to get their 
containers and work those.
    If we are going to attract business to southern California 
and have a positive effect to the rest of the country, we need 
a Sunday night gate so that the large distribution centers, 
particularly here in the Inland Empire, can have their freight 
Sunday night and work their freight Monday morning when the 
warehouse staff comes in.
    So the near-term solutions, which are not very costly, are 
five night gates, Sunday through Thursday; let the terminals 
work or demand that the terminals work throughout lunch breaks, 
don't shut down for 2 hours; and put the containers on wheels 
so that we can expedite drivers in and out of the port 
terminals. That is the only way to handle volumes as they grow.
    In 2013, we are starting to approach the 2006 record year 
that was set by both ports. Now, the long-term solution has 
some hurdles, and Scott and I have talked about this, and there 
are some hurdles, but it is something that the committee should 
really look at, and that is the establishment of an inland port 
here in the Inland Empire. With the massive distribution 
network that we have here in the Inland Empire, we need an 
inland port. And the answer, gentlemen and ladies, is not 
sending more trucks into the port. That is not the answer. I am 
a trucking guy who says don't send more trucks to the port. The 
answer is put the containers on a train that is located within 
the port complex, rail those containers to the inland port here 
in the Inland Empire, reposition our trucks from our trucking 
community out here and do local trucking. We can do a lot more 
trucking and a lot more deliveries if we are not wasting time 
on public highways and sitting in lines at the port terminals.
    It also creates more space for the port terminals, which 
they desperately need. I know we are talking about adding lanes 
on other freeways throughout the southern California area. In 
fact, the 710, we are talking about adding two lanes at the 
cost of $6 billion. We probably need the lanes, but at $330 
million per mile and the time it takes to build those lanes, I 
think this is a much better way to use the money, and that is 
let's utilize the various modes of transportation, get trucks 
off the freeway, clean up the environment, and have better 
utilization of our vehicles.
    I have 20 seconds left. So, Chairman Duncan, I will yield 
my time to Fred Claire so he can talk baseball.
    [Laughter.]
    Mr. Duncan. All right. Thank you very much, Mr. Fox.
    Mr. Richmond?
    Mr. Richmond. Thank you, Mr. Chairman and Ranking Member 
Nadler, and members of the committee. I appreciate also your 
attendance here, and certainly the turnout is really 
impressive.
    I am going to ask if you could follow through--I have some 
slides that were distributed to you, and I am going to walk 
through them quickly. I will walk through them quickly and kind 
of explain what we have been up to at the ACE Construction 
Authority.
    My name is Rick Richmond. I am the recently retired chief 
executive officer of the ACE Construction Authority. I 
appreciate the opportunity to be here.
    The first slide that is in your packet is a depiction of 
what is called the ACE Trade Corridor, which is a four-county 
area involving about 280 miles of rail lines on the two 
railroads, Burlington Northern and UP. The area that I work for 
is the shaded green area. That is known as the San Gabriel 
Valley in Los Angeles County, but the three other counties 
surrounding it are also involved in the same work that we are 
doing.
    Mention has been made of policy. There is clearly a policy 
in southern California to shift the modes out of the ports more 
in the direction of rail and away from truck, and that is a 
strategy that involves congestion relief, air quality 
improvements, and a whole lot of other related activities.
    But for us involved in the communities out there along the 
rail lines, there are some other effects that are resulting 
from that. Currently on that network that you see there, there 
are about 100 trains a day operating, and when we say trains, 
we are talking about typically a mile to 2-mile-long trains. 
These are not minor train movements. They are major. That is 
projected to grow to upwards of 250 trains a day with the 
increase in traffic coming through the ports.
    There are 131 grade crossings in that area shown on the 
map. So there are 131 places where the train basically stops 
cross-traffic to get through.
    The next slide, I won't spend any time on it, but this is 
the program that we have adopted within our organization that 
was mentioned. It is a part of the overall corridor, and what 
you see on there are all the grade crossing locations. 
Everywhere you see a name is a grade crossing location, 54 of 
them in our jurisdiction. We have adopted a program and have 
been working for a number of years on a program to eliminate 24 
of the 54 crossings. We are not trying to get rid of every 
crossing. That is not practical. So we are trying to deal with 
the worst, and also dealing with some safety improvements.
    The next four slides I will just quickly run through. They 
are a status report of where we are. The next two slides are 
all the projects that are either done or in construction. It 
accounts for 14 of the 24 total number of crossings. Those are 
projects that are, as I say, either constructed and in service 
or--they are either in service or in construction.
    The next slide--and I apologize for walking you through so 
many slides, but the next slide is five projects that we are 
all now in design, and those are projects that are fully 
funded. If you add these projects to the others I mentioned, 
you are up to a total of 21 crossings that we are fully funded 
and either have eliminated or will be eliminating.
    In the final one of these slides is all of our active 
projects--sorry, projects that are not yet active because of 
basically waiting for the funding needed to finish the program. 
You will see on that slide that we are about $235 million short 
to finish this program.
    Now, the next slide, I want to get to the point of the 
Federal issue for us. The next slide is a pie chart of how we 
have funded the program to date. We have pieced together from 
various sources over about a 10-year period the $1.5 billion. 
And if you look at the different shares, what you will see is 
that the local and State are substantial. In the last few years 
we have gained significant support at the local and State 
level. The Federal number, as you'll see, is about 16 percent 
of our total.
    Now, interestingly, we got started in this program as a 
result of TEA-21, an earmark, frankly, that got us started in 
this program. We know the discussion over earmarks. I think we 
are an example of how they can work well. I don't think we 
would have started the project without it. It got us going with 
$135 million, which we have now pieced together and grown up to 
$1.5 billion from all these various sources.
    The point I would make as we go toward reauthorization, the 
Federal source is going to be--to be quite honest, we are close 
to tapped out from the State and local because there really 
aren't any in the wings. There really probably isn't a new 
funding source from the State and local sources--that we can 
count on, certainly. And we are obviously therefore focused on 
the reauthorization, where we think there is a good case to be 
made for the kind of work that we are doing.
    The last slide, which I want to spend a moment on, is what 
we specifically would look for and suggest you consider as you 
go forward. As mentioned, there needs to be a freight program 
in the reauthorization bill. It can happen a number of ways. 
Congressman Sires' bill is beneficial in our view because it 
broadens out the scope of the existing MAP-21 discussion, which 
really talks about highways, and it needs to be broadened out 
to pick up rail, air, sea, et cetera. The freight program can 
operate under that legislative vehicle, but also PNRS in the 
past has been a source for us to get going on this program. We 
would look for some modifications to PNRS because right now our 
work is ineligible under PNRS. It is restricted to transit and 
certain other activities. Freight needs to be called out and, 
frankly, mitigation of freight issues needs to be called out 
because we are largely a mitigation program.
    So I realize I have extended past my time, but I will 
conclude at that and be happy to answer any questions, and 
thank you again for being here.
    Mr. Duncan. Well, thank you very much.
    I am going to go to Mr. Nadler and Mr. Miller for the first 
questions. But let me just say, first of all, that Mr. Ikhrata 
and Mr. Richmond both talked about the importance of the 
Federal role, and all of us on this committee believe that 
there is an important and legitimate Federal role. In fact, I 
have chaired three different subcommittees on this committee 
and I can tell you, people in California sometimes use the 
airports in Texas, and vice versa. People in Ohio sometimes use 
the roads in Tennessee, and vice versa. People in New York 
sometimes use our waste water and drinking water systems in 
Florida, and vice versa.
    So there is a very important Federal role, but there is 
also a very important State and local role, and I am very 
impressed by how much your State and local governments have 
come up with in this area.
    But this panel was given the assignment, the charge, the 
jurisdiction to look across all the panels, because our 
subcommittees are limited to the jurisdiction that they are 
specifically assigned to. But we have been asked to try to 
bring these things all together, and so that is what we are 
trying to work on.
    Mr. Nadler?
    Mr. Nadler. Thank you, Mr. Chairman.
    Let me start by saying that every witness--I am glad to 
hear almost unanimity among all the witnesses. Everyone seems 
to agree that State and local funding sources are not 
sufficient to do the freight projects that are necessary. 
Everyone agrees the freight projects must be funded on a 
multimodal basis. Everybody agrees that we need a significant 
Federal source of funding to supplement State and local 
efforts. Everybody agrees that that funding source should be 
available for freight and separate from the Highway Trust. And 
I think I heard everybody agree that it should be done on a 
competitive basis and not on a State formula basis. I certainly 
agree with all of that.
    Let me ask you a couple of specific questions before I get 
to the elephant in the room, a very specific question. Ms. 
Primmer, you said that the dedicated source of freight funding 
should sunset. Why should it sunset? Isn't it going to be 
needed indefinitely?
    Ms. Primmer. Well, in my experience, I think because we are 
asking stakeholders to really step up in terms of a dedicated 
source of funding, their expectation is that it is not going to 
be forever, that it is going to fund a specific set of projects 
that are going to have a direct return----
    Mr. Nadler. But when we finish the specific set of 
projects, don't you think the country will need another 
specific set of projects 10 years from now? I mean, is our 
freight network going to be finished forever?
    Ms. Primmer. No, I do not believe our freight network will 
be finished forever. However, I do think that there is 
accountability on the part of the public sector that needs to 
recognize the contributions by the private sector, and the 
private sector is going to require a little bit of assurance 
from the public sector that we have done what we said we were 
going to do and that they have gotten a return on the 
investment that they are making. Part of the comfort level with 
the private sector in stepping up and contributing to a new 
source of funding is going to be the lock box and the sunset 
that come with the program.
    Mr. Nadler. The lock box, yes. The sunset, I am not so 
sure.
    Mr. Fox, a very specific question for you. You recommended 
in terms of local California, southern California issues, that 
an inland terminal be established, essentially. That is very 
interesting. You make an interesting case, but why are you 
telling us this? Isn't that a decision for a local government 
in California to make and then come to the Federal Government 
and say here is what we are proposing, here is why we are 
proposing it, and help us fund it?
    Mr. Fox. Well, I think the answer probably is yes, but I 
think the answer also is, it is not going to work unless the 
Federal Government gets involved.
    Mr. Nadler. Gets involved with funding it. But we should 
determine the policy initially?
    Mr. Fox. Well, this affects the country, and I think 
because it does affect the country, it needs to be looked at by 
the Federal Government.
    Mr. Nadler. OK. Thank you.
    Let me ask everybody here. As I said, everybody agrees, and 
probably most of the people on this panel agree, not 
necessarily all of them but probably most, that there ought to 
be a dedicated source of Federal funding for what we call 
Projects of National and Regional Significance, which is to say 
freight projects that State and local governments can't handle 
by themselves.
    The big elephant in the room is where should that funding 
come from. There is tremendous political opposition, obviously, 
to increasing the gasoline tax, to making it inflation 
sensitive. The Highway Trust Fund is not going to have 
sufficient funding from current sources. Does anybody have any 
suggestions as to where we should get a $2 billion annual--
somebody suggested that figure maybe should be $3 million, or I 
don't know what the figure should be. But does anybody have a 
suggestion or suggestions, plural, as to where we can get a 
dedicated Federal funding source?
    Mr. Ikhrata. Congressman, I would suggest that we put all 
of those sources that you mentioned on the table. I don't think 
one source is going to be sufficient and enough to fulfill the 
needs that we have. But I think it should be for both the 
public and the private sector, but all sources that we talked 
about, whether it is expansion of TIFIA, which was great but 
not enough. I think we need to enhance that program. H.R. 974 
calls for a dedicated fund that various fees could be put on 
the table. But I don't think one source is going to cut it. I 
think all of these sources should be on the table for 
discussion.
    Mr. Nadler. Anybody else comment on where we can get the 
funding for a dedicated source?
    Ms. Primmer. I agree with Mr. Ikhrata. We should not be 
looking for a magic bullet here. If there were one, we would 
already have it. There is going to need to be multiple tools in 
the toolbox.
    The dedicated source of funding that I mentioned, we have 
been talking to some private sector stakeholders and their 
desire to participate. I think that that is one option that 
should be considered. Obviously, expanding the Projects of 
National and Regional Significance would also be an important 
part of the funding program. The qualified transportation 
improvement bonds that are being proposed by L.A. Metro have 
the potential to be used for freight programs. The expanded 
TIFIA program is also a way to fund freight.
    So I think if you are trying to fit everything into one 
little box, we are never going to get there. The beauty of the 
dedicated fund that I referenced is that it would be determined 
by the local communities. So our region has developed a goods 
movement action plan. So in order to be eligible to be part of 
that dedicated source of funding, the project is going to have 
to be on that goods movement action plan. It is not just going 
to be some random thing.
    The private sector then knows this is a promise that you 
are going to get for participation in this dedicated source of 
funding. These are the projects, this is the benefit to your 
bottom line in terms of the reliability, the speed to market 
that you are going to receive for that investment that you are 
willing to make. And I think it is a strong partnership from 
the Federal Government to enable that fund to exist that is 
really needed.
    Mr. Nadler. I see my time has expired. Thank you.
    Mr. Duncan. All right. Thank you very much.
    Mr. Miller?
    Mr. Miller of California. It is interesting. We have a 
trucker advocating rail capacity enhancements. I think that is 
the first time I have ever heard that before, industry 
crossovers. But I think it is because of the complexity of the 
situation that we are dealing with in southern California.
    Ms. Primmer, you have talked a little bit about your 
concept on the freight trust fund. I guess how would you 
structure the freight trust fund in more specificity, and how 
would you prioritize key freight projects that were done in a 
fair fashion?
    Ms. Primmer. Thank you very much, Mr. Miller. Let me first 
say that there is still much work to be done on this. This is 
an idea that we have been developing a policy for for the last 
couple of years, but we have not come up with a specific set of 
criteria. I would look forward to working with your staff and 
the committee----
    Mr. Miller of California. I would like to work with you 
because it is something that is very interesting to me because 
of the impact we face in this region and the issues we need to 
deal positively with to mitigate that impact.
    Ms. Primmer. I would greatly appreciate the opportunity to 
work with you, Mr. Miller, and any others of the panel that 
would be interested. You have been a great champion for freight 
in this region. Obviously, the Devore Interchange right here in 
San Bernardino is in need of funding. The ACE Corridor is in 
need of funding. There are port projects that are in need of 
funding. So there is no shortage here in southern California of 
what projects would be eligible for it. It is what would be 
palatable to the private sector, what would be palatable to the 
port community, what would be palatable to the inland 
communities that are bearing the necessary mitigations, and 
what type of agreement can we come up with. All of this 
involves stakeholders.
    Like I mentioned, we have started those discussions, but we 
need to move forward with those. And with your support, I would 
like to do that.
    Mr. Miller of California. I would love to work with you.
    Mr. Fox, you were very specific on certain situations that 
industries are facing at the ports. Congressman Hahn is very 
involved with that because she lives above it and has to look 
down on it every day in her life.
    So what can Congress do to mitigate some of the impacts you 
are facing there? What do you believe we can do?
    Mr. Fox. Well, that is a tough one. I am not sure in terms 
of Congress legislating something to make the ports more 
efficient, but that is really the center issue, that they are 
not efficient.
    In 2006, we did more business with the same number of 
trucks than we do today. For example, in 2006, one truck could 
deliver four to five loads to greater Los Angeles. It could 
deliver three loads here to the Inland Empire. Today, volumes 
are approaching 2006 levels. That is the good news. The bad 
news is that that same truck can only do two loads to L.A.; it 
used to do five. It can only do one or two to the Inland 
Empire; it used to do three. And again, that is all because of 
decisions made by terminal operators.
    I know you know the subject very well, Ms. Hahn, but it is 
not about labor, because it is the same labor force we had in 
2006. It is about terminal operators making decisions to have 
less labor, close down for lunch, put containers on a grounded 
operation rather than wheeled, and only have four nights. All 
three of those areas can be changed immediately, and we can be 
more efficient as these volumes grow for the next few years. We 
can handle the volumes with the 9,000 trucks that are servicing 
the ports today.
    We don't even really need 9,000 trucks. We need 7,000 
trucks for today's volume. As it grows, we will need the 9,000. 
But 5 years from now, that will not be enough trucks. Sending 
another 3,000 or 4,000 or 5,000 trucks to the port creates more 
congestion not only in the port terminal but on the freeways.
    I think there is money that is being spent State and 
federally on our highway system. As a trucker, I am saying 
let's stop spending money on the highway system. Let's get the 
UP or the BN involved and have a daily shuttle train and take 
500 to 1,000 trucks off the road going between the port and the 
Inland Empire daily.
    Mr. Miller of California. Mr. Moore, how do you see that 
working in your position at the Colton Crossing here?
    Mr. Moore. Well, we are always looking for more business, 
Congressman.
    [Laughter.]
    Mr. Moore. But we have studied this in the past. In 2005, 
we worked with the Alameda Corridor Transportation Authority to 
develop a pilot here in Colton. It ultimately did not work. 
There wasn't a business model to make it work. More recently, 
Mr. Ikhrata and SCAG did a study on that as well, and once 
again the economics don't work. That sort of movement, because 
of the additional lifts, additional labor, consuming rail 
capacity, it cannot be price competitive today with a truck 
move. Now, that may change in the future, but not today and 
probably not yet, unfortunately.
    Mr. Miller of California. I see my time has expired. Thank 
you, Mr. Chairman.
    Mr. Duncan. All right. Ms. Brown is next.
    Ms. Brown. Thank you. And I think I had better start out by 
saying, first of all, I am a rail supporter. After I say that, 
there are some things I need to clear up.
    First of all, Ms. Primmer, in looking at this chart that 
was passed out, ``Funds Committed to Date,'' we have the number 
one rail, freight rail in the world. Everywhere I go people ask 
me about freight rail, and I am asking them about passenger 
rail. If you see the Federal Government share, the local share, 
the State share, we have to get our partners that are making 
money, those stakeholders, to invest in the system.
    And to think that we are going to come up with some 
national funding for freight, and only freight will be able to 
participate, and we are going to have a lock box for freight, 
that is not going to happen. Maybe they will tell you it is 
going to happen, but I will tell you it is not going to happen.
    You have to have a system that is multimodal, maybe a 
system like with the TIGGER grants that will open it up to 
other forms of transportation. But to say we are just going to 
do freight, I mean, that is just not going to happen.
    And, Mr. Fox, we were at the port, and it was very 
interesting, and we were trying to get a water bill, and if so, 
I think they said $2 billion a year would fund the problems 
that we are having in all of the ports. I see the Jacksonville 
Port didn't even make it to this chart. So we really are having 
a problem. However, the issues that you are talking about are 
issues that you can negotiate tomorrow with the port.
    Mr. Fox. No. No, we can't.
    Ms. Brown. It is not a Federal issue.
    Mr. Fox. We cannot negotiate with the port. We have 
nothing--we have no involvement with setting terminal 
operations.
    Ms. Brown. I know, but we don't either, to my knowledge.
    Mr. Fox. Well, it is interstate freight.
    Ms. Brown. No, sir.
    Mr. Fox. Yes, it is. It comes from other countries.
    Ms. Brown. You are talking about whether we do 7 days or 
whether we do 5 days, whether they are open 24 hours. We 
discussed that, how much time they take for lunch. That is not 
international negotiations. Maybe the staff can clear it up for 
me. I don't think we have anything to do with it.
    Mr. Fox. Well, there are always incentives.
    Ms. Brown. I am just telling you, in talking to the port, 
that is not what they told us yesterday.
    Mr. Fox. Well, I can tell you as a trucker, I have nothing 
to do with setting port policy.
    Ms. Brown. And we don't, either. I mean, we don't either, 
and we are trying to get them additional funds. But even if we 
do the things that we need to do at the port, if you have the 
congestion on the highway, it doesn't work. It is intermodal.
    Mr. Fox. That is what I am saying, take trucks off the 
freeway system.
    Ms. Brown. In some countries, trucks can't go. You have to 
put them on the train and send them. So, yes, there are some 
things that we could do. But did you want to respond to my 
comments?
    Ms. Primmer. I would, please. I didn't mean to imply that 
the mitigations that are involved with freight would not be 
eligible as projects. Certainly, there are air quality issues, 
there are impacts to the communities that support the freight. 
Ms. Napolitano's district is a prime example of the impact that 
freight has on local communities.
    What I intended to imply was that it should only be 
available to use immediately adjacent to freight facilities, 
and I am sorry I relied on my written testimony to flesh some 
of that out. But the facilities that would be eligible would be 
part of the multicounty Goods Movement Action Plan in our case. 
In other States, it might come from the State DOT or come from 
another NPO plan, but they would be identified by the 
communities that are most impacted, such as the communities 
like Ms. Napolitano's and Ms. Hahn's that are bearing the brunt 
of the commerce that goes out to the rest of the Nation.
    Ms. Brown. Well, there are many areas. For example, 
Chicago. We are going to visit that in the New York area. I 
mean, so there are many areas that would be eligible as we 
develop a policy and try to come up with funding to finance 
these policies.
    Ms. Primmer. Absolutely. But there needs to be a freight 
nexus in order for a project to be included.
    Ms. Brown. Freight, port, multimodal.
    Ms. Primmer. Absolutely.
    Ms. Brown. All right. Thank you.
    Mr. Duncan. Thank you very much.
    Mr. Hanna?
    Mr. Hanna. Mr. Fox, the things that you talk about seem to 
be absolutely in line with what I would consider to be common 
sense. What is wrong, really? I mean, you are asking this 
committee to consider somehow as if it has the authority to 
deal with it. Clearly, the State has some authority to deal 
with it. There must be something going on that you are not 
talking about. It is too obvious.
    Mr. Fox. Well, sometimes the most critical things are the 
most obvious things. There are two issues, near-term and long-
term. Look, the ports were never more efficient than they were 
in 2006 when business was good. So that is part of the obvious 
answer to this, is that there was more volume that justified 
more labor. It justified having wheedled operations. The 
terminals are getting away from providing chassis. It is a very 
complex issue, and I don't mean to oversimplify it. It is a 
very complex issue, no doubt about it.
    The bottom line here is there are so many stakeholders 
involved, the steamship lines, the terminal operators. I don't 
think labor is even part of the issue at all. I think it is the 
people paying the bills. And if we don't get the people paying 
the bills to correct the situation, as volumes grow we are 
going to have more congestion and the Panama Canal is going to 
start looking a lot better.
    Mr. Hanna. So implicit in what you are saying is that there 
is enough money to go around to allow this inefficiency to 
continue, and there is nobody invested in stopping it?
    Mr. Fox. The different stakeholders are so focused on their 
own budgets that they are not looking long term at the big 
picture.
    Mr. Hanna. There is no central authority to discuss this 
that you can go to?
    Mr. Fox. I would like to know who it is.
    Mr. Hanna. Mr. Ikhrata?
    Mr. Ikhrata. Yes, thank you.
    Ms. Hanna. Would you like to take a shot at that?
    Mr. Ikhrata. Sure. I think what Mr. Fox is saying, and not 
to disagree with some of the things he said about maybe the 
Federal Government or the local government or the State 
government shouldn't invest in the highway, I have a different 
opinion about that. But this points to how complex the issues 
are. I mean, if it is simply by just putting a short-haul 
trailer, like Mr. Scott mentioned, to solve the problem, we 
will. But it is more complex than that. Study after study said 
that economically it doesn't pan out. Therefore, the short 
haul, which is a component to what Mr. Fox is talking about, is 
not going to work.
    But this points to an important thing. I can tell you this, 
we have been discussing this issue for over 20 years now 
because it is important not only to this region but to the 
Nation. And this issue is very complex, no question about it. 
It needs to involve all stakeholders, private, public, Mr. Fox, 
Mr. Scott, everybody.
    I will point to the fact that in our region, we actually 
are well organized. Our State in 2006, put a bond out, $2 
billion of which is specific to goods movement, because of the 
importance of goods movement. So there is more than a 
discussion. There is part of Government, a debate about what is 
the best solution. But one solution you should never doubt, 
that this region and this Nation need to maintain its existing 
infrastructure and need to build additional infrastructure. And 
I believe, Congresswoman Brown, that multimodal infrastructure 
investment in this Nation is warranted.
    The sad accident in Seattle a couple of days ago taught us 
something. In this region, there are 2,300 bridges that are 
classified obsolete or structurally deficient. That doesn't 
mean they are going to fall down tomorrow, but they need 
attention.
    So the thing I want you to remember is the investment in 
infrastructure and maintaining the infrastructure is a key, 
regardless of these local issues----
    Mr. Hanna. Well, we all agree with you.
    Ms. O'Brien, who would you like us to tax? I mean, that is 
a fair question, right? You must have something in your mind. 
You are a big organization.
    Ms. Primmer. That is absolutely a fair question, and the 
answer is no one that doesn't agree to it.
    [Laughter.]
    Mr. Hanna. Well, that is not going to be a whole lot of 
people.
    Ms. Primmer. No. And what I mean by that is I work with 
stakeholders every day, and what I am hearing from them is if 
there is a return on that investment, if there is a bottom-line 
benefit to my business, I am in. So the people that are going 
to benefit from----
    Mr. Hanna. But the degree to which they are in may be the 
question.
    Ms. Primmer. The people that are going to benefit from the 
system need to be partners in developing the plan, and that is 
exactly what Mobility 21 does.
    Mr. Hanna. I am almost out of time. But we need to know 
what that ratio is, what that looks like in reality so that we 
know if anything is done at all towards that end, we have 
willing partners that have an idea that it is not going to be a 
nickel or a dime, it could be a lot more.
    I yield back.
    Ms. Primmer. Thank you. That is a possibility, and we would 
be more than happy to work with the committee on that.
    Mr. Duncan. Thank you very much.
    Ms. Hahn?
    Ms. Hahn. Thank you, Mr. Chairman.
    And thank you to the panelists who are here today 
testifying before the Panel on 21st-Century Freight 
Transportation. Isn't it great that we have all these Congress 
Members from across this country spending 3 days here to really 
see for themselves how important our ports and our 
transportation system is to the entire country? I feel very 
hopeful that we will come up with some good recommendations as 
we create the first-ever national freight policy in this 
country.
    Mr. Fox, I, of course, am very sympathetic to what you are 
saying. It was I, under my brother's leadership when he was 
mayor of Los Angeles, that actually created the off-peak cargo 
movement system which we call PierPASS. I was charged with the 
task of bringing together all the stakeholders, both ports, 
labor, warehouse distribution centers, the Walmarts, the Sears, 
the Targets, and we came up with what we now call PierPASS, 
which was intended to move cargo off-peak hours. I understand 
we are up to about 50 percent cargo that is moved off-peak.
    But I am with you. I always wanted it to be five nights a 
week, on the weekends. I think that makes sense. I think it 
will give us more use of our current infrastructure. I think we 
have to use our infrastructure smarter before we can expect to 
build out some of our infrastructure. And I think the truckers, 
they don't want to be on the road with us either. They don't 
think we know how to drive. So they are happy not to be 
fighting with commuters.
    So even though it is not our jurisdiction, which has never 
stopped me before from doing anything, I would be happy to 
facilitate a working group at the ports, and I know Alan 
Lowenthal will work with me because he was also instrumental in 
having legislation ready to mandate off-peak cargo movement. We 
didn't have to do that because we came up with a plan that 
worked before that.
    So we will get together with both ports. We will put a 
group of stakeholders together and see how we can move forward 
in moving more of this cargo off-peak. I think that makes sense 
for the entire region. So I will work with you on that.
    Mr. Richmond, I was interested in your idea of mitigation 
and wondering if we create a national freight policy, do you 
think a part of that policy should be some sense of mitigation? 
I think we are going to have to be real with building projects 
and how that impacts our communities, and I think we do have to 
have mitigation. I am curious to know whether that should be 
part of our national freight policy.
    Mr. Richmond. Absolutely, and it is right now a little bit 
silent. Some of the existing legislation is silent, at best, on 
that subject. And you know from your experience with the 
Alameda Corridor, while it is a fantastic facility and it does 
a great job to move freight, most of what went into that 
project was mitigation.
    Ms. Hahn. Right.
    Mr. Richmond. I mean, it is primarily a mitigation project 
when you scratch away all of the components. So, absolutely, it 
has to be part of any authorizing program, it seems to me, 
because otherwise you are really stuck with the issue of 
investing taxpayer money, presumably, into what is essentially 
a private enterprise. I mean, the beneficiaries of much of the 
activity here is private enterprise. And as you have heard from 
this discussion today, when you scratch below the surface and 
people talk about doing things more efficiently, you 
immediately run into the multiple handoffs involved in this 
business and the fact that any particular approach to make 
things work better usually lands in one place, and that is when 
it starts to sort of fall apart if you don't force the issue.
    So I think the mitigation has got to be part of what is 
addressed in any project.
    Ms. Hahn. Well, I appreciate you saying that because I 
don't think we expand our ports or build more projects without 
making sure that we mitigate the impacts on the surrounding 
communities. I will say I am encouraged by this panel that one 
of the sources of revenue that we are exploring is the harbor 
maintenance tax, which is a tax that is collected but it is not 
used for the purpose of maintaining our ports and harbors in 
this country.
    The other thing that I would like us to look at is I have 
always felt like a percentage of the customs district revenue 
ought to be spent where it is collected for improving the 
infrastructure. The L.A. district takes in a whopping amount. 
It is--how much is it, Lori? Let's see, $14 billion annually 
just in the L.A. customs district, and it is based on 
containers, because containers represent commerce, and it has 
always been a value of commerce.
    But my feeling is that every container, and I think we have 
seen this, that comes into the ports also represents risk. It 
represents risk to our infrastructure, to our security, to our 
environment, and I think that money we should look at as a 
possible fund, not the whole thing, maybe just a percentage of 
where it is collected across this country, and use it to put 
back into our infrastructure needs in this country. It might be 
something that we could look at.
    Mr. Duncan. All right. Thank you very much.
    Mr. Lipinski?
    Mr. Lipinski. Thank you, Mr. Chairman.
    Ms. Brown said we are going to be in Chicago looking at 
some of these things. I hope we are in Chicago looking at some 
of these things. I know that I have heard many times in the 
last 2 days how, even though we are 2,000 miles away, how 
important what is going on in Chicago and finishing up the 
CREATE program is to even out here, because that is so 
important to moving freight in the country.
    But if we are looking at one thing that was mentioned, Ms. 
Napolitano, we could probably compare the need for grade 
separations in our districts. I am glad we had this opportunity 
to get out of Washington and come to California because it 
seems like there is so much greater concern that I have heard 
in the last 2 days about the impacts on local communities than 
I usually hear in Washington. Grade separations, I know there 
are issues, numerous issues, but grade separations with 
railroads is one of the big ones, and I am very impressed at 
how much has been put into that, how much funding out here has 
been put into that by the State and the MTA.
    I see 2 percent from the railroads, and that is a big 
question: Do railroads have a responsibility? How much 
responsibility do they have? Because railroads can say these 
are our lines, we run our trains, and that is it. There is a 
regulation that says if there is any Federal money spent on a 
grade separation, railroads have to put at least 5 percent 
towards that, and I think that is important. I would like to 
see more money coming from the railroads on that, but these are 
difficult things to work out.
    One thing that we are sort of dancing around here and not 
really addressing is that in the freight system, as Ms. Primmer 
said, we should tax, we should get the funding from those who 
benefit. Well, who benefits? Everyone is going to point to 
somebody else in terms of who benefits off of any type of 
improvements. And in the end, everyone might point to, well, it 
is the American consumer that benefits, so they should pay for 
it.
    I am not saying I have an answer to who exactly benefits 
and who should pay how much in this, but everyone can point to 
each other in terms of who benefits. If you are moving the 
product you can say, well, it is the retailers that are 
benefiting because they are getting cheaper rates for getting 
the product, or you can say that producers are benefiting. 
Everyone can point somewhere else and say where is the benefit. 
I think that has been one of the problems with coming up with 
how we are going to do this.
    On top of that, you have the fact that the railroads are 
private. So where does that come in? Where does that come into 
the picture? The railroads are private; our roads are public 
for the most part. How does this all come together?
    So, does anyone have an answer? I don't expect an answer. 
Does anyone have anything they have to say about these 
complicated questions of where is the money coming from, and 
then where is the money going to go to? How much do the 
railroads--helping the railroads--yes, it helps freight 
movement. It helps the railroads also because they are private 
entities. I am not saying we shouldn't do it. I certainly 
support that. I supported that with CREATE. But how do we draw 
those lines?
    Mr. Ikhrata. Well, Congressman, we have examples in this 
region where partnerships, public and private, worked. The 
Alameda Corridor. At the time, it was the biggest public works 
project, $1.4 billion, where you had public and private money, 
and she will tell you the amount of stakeholders and the amount 
of meetings it took, but it did happen at the time, in 1985. It 
took us from 1985 to 2005 to open. At the time, it was the 
biggest public works project and it involved many stakeholders.
    So I think it is possible to be able to say not only who 
benefits and who pays, but how do we work together to make sure 
we all benefit.
    Mr. Lipinski. How does the Federal Government get involved 
in helping to promote this kind of----
    Mr. Ikhrata. The Federal Government was at the table with 
Alameda Corridor, and it should be at the table on all these 
projects because, as I stated earlier, if there is a national 
policy that is needed, this is it. Freight movement is it, in 
my view. This is one of those few examples where, whether you 
are in Chicago--and I talk to my colleagues in Chicago almost 
every week--I think we all agree on the national importance of 
this issue to all of the Nation, not just to southern 
California. Sometimes we are selfish. We say southern 
California, we handle 43 percent. But we believe it is 
important to Chicago and New York and Florida, every place in 
the Nation. When the ports have a strike, by district, you can 
see the economic disadvantage, the economic hardship in every 
district around the country.
    So, yes, it works everywhere, and I think partnerships with 
other States, partnership with the private sector is needed, 
not only to build the infrastructure but also to mitigate the 
impacts to the communities.
    Mr. Ajise. Congressman, real quickly, I think your 
statement basically elucidates how complex the issue is in 
trying to bring everybody together and decide on one funding 
source, and we are not going to do that. But it requires a 
multiple stakeholdership conversation.
    The importance of the Federal role is it is very difficult 
for us to take any action in one region that may disincentivize 
activities at that port to the benefit of other ports. So the 
Federal role comes in where we all get together and then decide 
on what a national policy is going to be that incentivizes the 
sourcing of funds to do the activities we are talking about. I 
think trying to assess benefits is a good start. That brings 
everybody to the table.
    An example that we had was with the Trade Corridor 
Improvement Program. We had $2 billion, and the money was 
basically spent in four different regions of the State, but the 
stakeholdership in each of those regions came together and 
added to what was coming to them to increase and leverage $6.9 
billion as a result of that conversation. All of those monies 
came from other sources that benefitted from those projects 
that we put together.
    Mr. Lipinski. Thank you.
    Mr. Duncan. All right. Thank you very much.
    Mr. Mullin?
    Mr. Mullin. Thank you, Chairman. Thank you for the 
opportunity to be on this panel.
    I find it pretty interesting that the gentleman who is 
thinking out of the box gets hit on the most.
    [Laughter.]
    Mr. Mullin. Mr. Fox, I don't mean that in a lovely way. But 
I am intrigued because what you are saying makes sense, but as 
I have pointed out multiple times, in politics that doesn't 
always play any role.
    How much thought have you really put into it, though? I 
mean, have you looked at the logistics behind it? Have you 
looked at where this inland port would be? The funding, would 
the private sector be willing to put money into it? I mean, the 
role that I feel like the Federal Government could play is 
bringing everybody to the table and then try to help speeding 
up all these studies that we have to do, studies to make sure 
the environment and this bird and this crab and all this stuff 
is protected. I would think that we would be maybe to 
facilitate a little bit in that way?
    Mr. Fox. Well, OK. It sounds like a couple of questions 
there.
    Mr. Mullin. I know there was. I have a lot more, too.
    Mr. Fox. OK.
    [Laughter.]
    Mr. Fox. Thanks for recognizing that I am getting beat up 
here. Appreciate that.
    You know, this is not a new idea. It has been discussed and 
looked at and studied. I think one study by the Tioga Group 
that was done in 2005 was, in my view, somewhat of a negative 
report, but it was also done at a time when the economy was 
kind of changing and so forth. I think the time is right now, 
more than ever before, for a couple of reasons.
    Port volumes are getting back to where they used to be. 
That is a good thing. Congestion is worse than it has ever been 
on our freeway system and in the port terminals. We have a 
State that is looking at environmental issues and providing 
funding.
    One thing that Ms. Hahn knows better than anybody is that 
we have 9,000 new trucks working the port. Well, that is good 
and bad. It is great because the environment has been cleaned 
up, and Ms. Hahn deserves a lot of credit for that. I think we 
are at 72 or 85 percent--the numbers have changed recently--in 
terms of less pollutants in the local community. That is 
fantastic. But it also means that we have less truck drivers 
available.
    I am telling the panel, in 5 years from now, we are going 
to have a problem having enough port drivers to do the work as 
volumes increase. And if we don't fix the productivity issue, 
we are not going to have enough port drivers to do the work. So 
I am getting to your answer.
    The inland port has to happen for the next 10 years or 20 
or 30 years down the road. If we don't start talking about it 
now, bring the stakeholders together and plan for it, and 
implement it in 5 or 10 years from now, or sooner, we are going 
to have major, major issues.
    Mr. Mullin. And I understand what you are saying, take the 
focus a little bit off the roads for now, because we can add 
the third lane, the fourth lane, the fifth lane if we want to. 
But if we can't get in and out of the port, the congestion at 
the port, it doesn't make any difference how much we expand the 
roads. So that makes perfect sense to me.
    But is the private sector, is Union Pacific, are the 
different railroads willing to invest in something like that? I 
understand the touching of the containers. The more times you 
touch something, the more it costs. But will it offset the 
amount of time that we are waiting? Ultimately, we are the ones 
who pay for it, the consumers. The longer Mr. Fox's trucks have 
to sit at the port, he has to pass that on to us. So where is 
the offset and where is the balance?
    At what point, Mr. Moore, have you guys looked at that, 
where the balance is tipped enough to where it would make you 
want to invest in it?
    Mr. Moore. Well, I mentioned the growth in our domestic 
freight movement, which is inside the U.S., so to speak. But 
the answer to the question historically is when does it make 
sense to do rail, when does it make sense to do truck? That 
business is shrinking by 400 miles. I mean, today it doesn't 
work. It is easier to truck to Phoenix. There are 10 million 
trucks going to San Francisco, zero going on rail, because it 
is cheaper to do it that way.
    Mr. Mullin. Sure.
    Mr. Moore. Until those dynamics change, and someday they 
will as that continues to shrink, at that point in time is 
probably when a purely private model could work. But that is 
probably premature today without some sort of public subsidy.
    Mr. Mullin. Real quick, my next question is to you. You had 
said in your testimony that your company is investing and has a 
clear plan to invest in the future. How much hindrance through 
regulatory studies and different EPA studies and everything 
does that have in your consideration of where to invest and how 
to invest?
    Mr. Moore. I----
    Mr. Mullin. What kind of impact does it have when you are 
talking about dealing with the Federal Government?
    Mr. Moore. Well, I was going to say California is a special 
place to invest and build because of the State laws there. But 
that has an impact--I mean, the Federal issues are not as 
great, quite frankly, in this area as the State issues are.
    Mr. Mullin. Good enough. Well, I can't help you with the 
State side of things.
    [Laughter.]
    Mr. Mullin. I thank God every day I live in Oklahoma, so I 
am good.
    [Laughter.]
    Mr. Duncan. Thank you. Thank you very much.
    Mr. Sires?
    Mr. Sires. Thank you, Mr. Chairman. Thank you for being 
here and all the people that are sitting here listening to us.
    Like I mentioned yesterday, I come from the other side, New 
Jersey. I represent the Port of Newark, the Port of Elizabeth. 
When you talk about congestion, where there is water, air, 
highway, roads, we have it.
    I am glad I came on this trip because one of the 
differences that I have been able to observe is that the 
concern here is how to get the trucks and move the merchandise, 
which is about 75, 80 percent, into the interior of the 
country. In my district, 80 percent of the merchandise that 
comes in through the port is consumed within the region.
    So one of the reasons--and I thank you for bringing up the 
bill, the legislation that I put together--is because for many 
years I have been very concerned about moving the freight 
within the region. That is why I think we have to do 
multimodal. Every single way that you can move freight has to 
be looked at and intelligently worked on so we can move that 
freight, because you are going to get as crowded as I am. 
Sooner or later, it is coming.
    What concerned me, Mr. Fox--I know you are getting beat up, 
but one more is not going to do anything. One of the things we 
talk about is putting together competitive grants to build 
whatever infrastructure you need. If you have all those issues 
that you are talking about, why should I put together a program 
of competitive grants when you are so inefficient? Why should I 
give you money if this port is so inefficient? Why don't I take 
that money and put it someplace where it is more efficient?
    So when we talk about competitive grants, that is taken 
into consideration. We would be happy to have it in New Jersey, 
by the way.
    [Laughter.]
    Mr. Fox. Well, you know, the local ports--let me just say, 
because I know there is some port representatives here--there 
are issues, but it is still a very effective port when you look 
at the volumes compared to any other port in the country. It is 
a very efficient port complex, L.A. and Long Beach. There are 
issues, but there are issues everywhere.
    There also is the deep channel ``depth'' where the larger 
ships can come in, and that is very unique for this country, 
and that is a competitive advantage for Long Beach and L.A. I 
think there are 50- and 53-foot depths, and that is where the 
steamship lines went. They went to larger cargo vessels with 
many more containers, up to 18,000 TEUs, with less sailings. 
That is cost competitive. That creates immediate congestion 
when you dump 18,000 containers into a terminal.
    I think the congestion that I am talking about, these are 
simple fixes. For the long term, yes, it is complicated for the 
UP or the BN to provide a shuttle train to an inland port. But 
let me also say that based on the trucking rates, where they 
are today versus when the studies were done 10 or 15 years ago, 
that gap has come down quite a bit. There is not a big gap 
between trucking a container from the Long Beach Port or L.A. 
Port to the Inland Empire versus putting 250 containers on a 
train and amortizing that cost over 250 containers. That gap is 
shrinking. It is much smaller.
    I think it takes Federal subsidy for it to work, or a 
combination of State and Federal subsidy. But I think a program 
can be put together, and I think over the next 5 or 10 years 
when it is implemented, we can have daily shuttle trains to the 
Inland Empire, create jobs, get rid of congestion on the 
freeways.
    Mr. Sires. You know, I certainly agree with you. I 
certainly agree that the Federal Government has a role to play 
in this big infrastructure project, because I saw what happened 
in my district. We have a bridge in Bayonne, New Jersey, that 
needs to be raised 65 feet. What happened was the Port 
Authority of New York and New Jersey put together $1 billion, 
along with the other projects. But what happened is now to go 
through the tunnel from New Jersey to New York, by the year 
2015 I think it is going to be $15 because that money was just 
passed on to everybody that uses those tunnels that the port 
authority is involved with.
    So if you don't get the Federal Government involved 
somewhere in assisting--I am not saying that they should pay 
for the entire thing--the public is just going to be stuck, 
just like you are going to have here. The people in this area 
are going to have these big bills to deal with in order to 
alleviate the situation that you are going to confront here in 
the near future.
    So I am a big believer that there is a role, smartly. I 
mean, I don't believe in just doling out money, but this is for 
the betterment of the country. At the end of the process, this 
country is going to be better off if we can make the changes 
that move the freight throughout the country.
    I am sorry. You have a----
    Mr. Ikhrata. Just to tell you how complex this is, I mean, 
the inland port issue was looked at several times. Mr. Fox 
mentioned the Tioga Group study that SCAG funded. But remember 
that 80 percent of the truck traffic is not port related. It is 
due to manufacturing that ends up on the highway but goes to 
the warehousing. So that makes the concept much more 
challenging. I mean, if every truck that we are talking about 
is coming from the port, going in one route and going to the 
warehousing, that is one thing. But a lot of it is related to 
manufacturing along the freight corridors, so that makes the 
concept harder. It doesn't mean that it is a bad concept. It 
could be worth it.
    But, Congressman, I want to take one thing you said about 
why should you fund us if we are not competitive, and we say 
don't fund us if we are not competitive. I think this program 
should be funded based on what is the best for the Nation, the 
best projects for the Nation to be funded, and I believe we 
have many, many areas where we could point to the best projects 
that will benefit the rest of the Nation. So I think we should 
be competitive. I can tell you that this region has done enough 
to tell you we can compete with other regions, and there are 
good projects in other regions that should be funded also.
    Mr. Sires. Thank you very much. Thank you, Mr. Fox.
    Mr. Duncan. Thank you. Before we go to Ms. Napolitano, Ms. 
Brown told me that she needed 10 seconds. I told her if she did 
something in 10 seconds, I would be shocked.
    [Laughter.]
    Mr. Duncan. So she said she could do it in 30 seconds.
    Ms. Brown. Mr. Fox, I think we are calling on you because 
we like Fox News.
    [Laughter.]
    Ms. Brown. But seriously, one of the things from the port 
that they told us yesterday, besides the depth, 76 and over 53 
feet, one of the things they talked about, the new technology 
is coming online and that they would need a couple of thousand 
less truck drivers because of the new technology that is coming 
online. So keep that in mind as we move forward, that there is 
new technology that says it is going to expedite the processing 
at the port. I don't know, but this is what I was told.
    In addition to that, all of you can think about it and give 
it to us later. We talked for 17 years about getting a super 
project online. What are some of the one-stop permitting things 
that we can do so that we can expedite those times? California 
is an example. You have all these different committees and 
groups on super projects. We need to be able to get everybody 
in the room and expedite those projects.
    Thank you very much.
    Mr. Duncan. All right. Thank you.
    Ms. Napolitano?
    Ms. Napolitano. Thank you, Mr. Chairman. And being the last 
one, I think everything else has been asked except one area. 
But I want to make a couple of comments with Mobility 21. You 
haven't been in my area in over 4 years, so I have no idea what 
the heck is going on. That is mostly L.A., so I take exception 
to some of the things that are being planned without the San 
Gabriel Valley being involved.
    As far as the funding, the trust funds, I haven't seen a 
fund that hasn't been utilized for something other than. I 
mean, it may be related, but not necessarily totally dedicated. 
So lock boxes may be well and good, except we need to be sure 
that that money is going to the proposed projects only. If that 
is where the money is going to come from, the dedicated, and 
then the shippers can understand that this is money that is 
going to benefit their on-time delivery or being able to do 
things that are specific to including that money in the trust 
fund.
    One of the areas that we have not talked about, Mr. Moore, 
is the impact of the widening of the Panama Canal. How is that 
going to affect the railroads and the jobs and the cargo 
movement, especially of Mexico and Canada, or also preparing 
for that? And some of the other ports in other parts of the 
Nation are also deepening their channels.
    Mr. Moore. Well, Congresswoman, we need specifics. We say 
we don't have a favorite port, but there is really only one 
port area where we are spending $1 billion building a double 
track two and trying to spend a half a billion dollars to 
improve our facilities.
    Ms. Napolitano. That is my point.
    Mr. Moore. So we are going to believe what we think, and 
our thought is that certainly after the lockout and other 
issues here in 2002 to 2003, many companies went to a four 
corners strategy, and a diversion primarily has already 
occurred, is what our opinion is. So that is why we are 
continuing that investment and continuing to move forward, 
because we think the overall value of the deep water ports that 
you have here, the infrastructure you have in the L.A. Basin, 
including the warehouses, that rail-land bridge to points east 
is what is going to have the most value to the customer. As 
long as that is still true, business is still going to come 
through here, as well as on our railroad.
    So that is why we think we will see what the charges for 
that Panama Canal item, and certainly there is a gulf port 
coast that could have some of that traffic. But as I said, 
there is only one place to invest the kind of money we are 
building in L.A., and we still think it is coming here.
    Ms. Napolitano. That is commendable. I know the Canadians 
are building a lot of infrastructure to try to compete. So that 
brings up the question about our shippers who have an option to 
deliver and divert cargo through these foreign ports into our 
markets to avoid the harbor maintenance tax in our ports. But 
what should Congress, what should we do to tax trans-ship cargo 
coming from Canada or Mexico in order to level the playing 
field? Anybody?
    Ms. Primmer. Ms. Napolitano, thank you for the opportunity 
to answer, and I will be sure and meet with your staff after 
the hearing today to go over how we can be more involved with 
your district.
    Ms. Napolitano. You are using my time, ma'am. To the 
question.
    Ms. Primmer. The Federal Government needs to take the 
growth of Canadian and Mexican ports very seriously. They pose 
a competitive threat to the U.S. west coast ports and the 
millions of jobs they support. However, the most effective 
response to this competition is for the U.S. to develop a 
national freight strategy with clear alignment at the State, 
local, and Federal levels. A national strategy was developed in 
Canada, and that is a big part of the reason why they have been 
so effective.
    With respect to a cross-border fee, I think the question 
comes back to this: Can we use HMT in a way that returns a 
benefit to those who pay it? Can we use it in a way to enhance 
the competitiveness of our national freight system? If we can 
fix this, then the competitive impact has been negated.
    Ms. Napolitano. So what would be the suggestion to be able 
to level that playing field?
    Ms. Primmer. I would propose that it is more than a simple 
matter of fairness with regards to the HMT. It is and must 
continue to be viewed as a scarce source of funding that is 
dedicated to our national freight system. If shippers pay money 
into the fund and don't see a direct and commensurate benefit 
in return, then we are losing an opportunity----
    Ms. Napolitano. I am talking about the freight from Canada 
and Mexico coming into the United States to avoid paying the 
tax.
    Ms. Primmer. I am sorry. I didn't understand that last 
part.
    Ms. Napolitano. Canada is building a lot of infrastructure 
to be able to go through the northern part of the United States 
and trans-ship into the U.S., and so is Mexico. How are we 
going to be able to tax that to be able to level the playing 
field for the harbor maintenance tax that is payable at our 
ports?
    Ms. Primmer. I don't have an answer for that.
    Ms. Napolitano. Anybody?
    Mr. Ikhrata. I think, Congresswoman, one way to do it is to 
make sure we build and invest in our infrastructure as they do, 
so we can compete with these things. I would say that sometimes 
implementing the new taxes, it might be more costly and less 
effective than it is for us to improve our infrastructure to 
make sure we can compete with these ports.
    Mr. Ajise. I just want to add that I think, Mr. Moore 
mentioned it, the efficiency of being able to get goods from 
the ports of Long Beach/L.A. across country I think is a 
competitive advantage we have. To the extent that we continue 
to improve that infrastructure to be more competitive, I think 
it is a moot point that they would go to those other ports.
    Ms. Napolitano. I have a little bit of a difference of 
opinion. It is my own opinion, and yes, the harbors have done a 
tremendous amount of work and have changed in the last decade, 
that I know of, since I sat on transportation at the State 
level. So we hope that this will be enough to be able to keep 
our ports competitive.
    Thank you, Mr. Chair.
    Mr. Duncan. Thank you.
    Mr. Moore, we have talked for a long time in our committee 
about environmental streamlining. We are tried to do more of it 
in MAP-21, but we still run into delays and problems. All of 
these transportation and infrastructure projects in our 
country, most of them have been taking two or three times 
longer than most other developed nations, and I understand that 
with your intermodal container transfer facility, is it correct 
that you first applied or started in 2007 and the environmental 
review process is still going on?
    Mr. Moore. Yes. We put our application in for our facility 
in 2007 and still haven't got a draft environmental statement. 
Our competitor, Burlington Northern Santa Fe, I believe, 
started theirs in 2005 and just had EIR clearance in the last 
month.
    But those issues are really more about State issues. The 
California Environmental Quality Act, CEQA, is what the issue 
is there, and there has been a lot of talk in the last 12 
months, from the Governor on down, about changing that. I don't 
know how optimistic I am that that is really going to happen, 
but----
    Mr. Duncan. That is going to be what I was going to ask. 
You said this State was a special place, implying that it is 
more difficult to meet the State requirements than the Federal 
requirements. Of course, these projects not only take two or 
three times longer, they end up costing two or three times 
more, and we are going to have to probably give more of the 
Federal funding to the States that are getting things done, I 
would think. So are you seeing any efforts to speed these 
things up here in the State?
    Mr. Moore. Seeing conversations about that.
    Mr. Duncan. Conversations. OK.
    Mr. Richmond, we were just with Matt Rose all morning with 
the BNSF, and he talked about your Alameda Corridor project, 
and he said it began in 1987 and was completed in 2002. I just 
wonder what mistakes were made or what could we learn from that 
15 or 16 years? Could we do a project of that scope someplace 
else in California or in the country now in less time, or could 
we do that type of project again? Tell us what lessons you 
learned from that. I am sure you have thought about that.
    Mr. Richmond. I will try to briefly respond. Actually, Ms. 
Hahn could give you even better firsthand knowledge. But this 
also predates my involvement out here. But I know that for an 
extended early period of time, there was controversy over many 
of the issues that you are hearing about today, over exactly 
how the project was going to get done, whether there was really 
a buy-in, enough consensus about being happy with the way the 
project was proposed. That took up a lot of time, I think. Once 
they got past that, it moved relatively quickly.
    In our work, and we are an extension beyond the existing 
Alameda Corridor that you traveled on, we haven't had that kind 
of a problem because what we are doing basically is well 
received in the communities because we are basically trying to 
clean up a problem that if we don't do it, it is going to be a 
problem. It has not been an environmental--everyone has got 
problems with CEQA. We don't have to do anything under CEQA if 
we are doing a grade separation. So there is an example in CEQA 
where it is positive. We are basically exempt from the process.
    So it really depends, I guess, on what you are proposing 
and to what degree you are really impinging on people. Ms. Hahn 
could give you much more of a firsthand view of exactly what 
went into the Alameda Corridor.
    Mr. Duncan. All right. Thank you.
    Ms. Primmer, you--oh, yes, Mr. Ikhrata.
    Mr. Ikhrata. Yes. I think, to add to what Rick said, 
parallel reviews help. There are multiple agencies, Federal and 
State, that have to review a project, and one agency works for 
the other. So if you somehow figure out a way to review them at 
the same time, then that saves a lot of time.
    Mr. Duncan. That is what we have tried to do in MAP-21.
    Mr. Ikhrata. That is correct, and we appreciate that, and 
we hope we expand on that. So empowering the Federal 
departments to do that saves a lot of time for sure.
    I want to say, and my good friend Scott here mentioned 
CEQA, and we believe there is a lot of room to fix some of the 
aspects of CEQA at the State level, and there is actually a 
bill going through Sacramento right now trying to do just that. 
But the whole issue of making a project that takes 17 to 20 
years has huge benefits economically speaking and otherwise, 
and I think we have specific recommendations that would love to 
work with the committee on them, on how to do that and save 
many, many years on every major project.
    Mr. Duncan. Well, we have got to speed these things up. The 
last two major studies by the Federal Highway Administration, 
one study said 13 years, one study said 15 years from 
conception to completion. Many years ago when I chaired the 
Aviation Subcommittee, the Atlanta airport people came to us 
and they said that it took 14 years from conception to 
completion for their newest runway, which is now several years 
old, and it took only 99 construction days. It took them that 
long to get all the approvals, and they were so relieved to get 
all the final approvals and permits and so forth that they did 
that in 33 24-hour construction days. I mean, it is crazy.
    But, Ms. Primmer, you mentioned this dedicated source of 
funding. Do you primarily envision that as a user fee type of 
funding, or what?
    Ms. Primmer. Yes. I do believe that a user fee would be an 
acceptable way to have a dedicated source of funding. I 
envision it as being something that can be used around the 
seaport communities within a certain radius of the seaports in 
order to support the connection points between the ports and 
the inland distribution and warehousing here in our region, and 
certainly in other parts of the country as well.
    I would just like to take a moment to thank Mr. Miller for 
his work on breaking down barriers in MAP-21 and taking a 
leadership role there.
    Mr. Duncan. He sure did, yes.
    All right. Mr. Ajise, in 2007, California came up with this 
Goods Movement Action Plan, and basically that is, in a way, 
what we are trying to come up with. Tell us what lessons you 
have learned that could help us in our efforts now. We are 
trying to do that, of course, nationwide. But you have had 6 
years', 7 years' experience with that. Has it worked? Has it 
done some good, or has it fallen short?
    Mr. Ajise. It has actually worked. We learned some lessons 
about how it could work better, and we are in the process of 
crafting a new goods movement plan as we speak and expect to 
transfer some of those lessons from the GMAP process. I think 
the GMAP was able to set us up for setting up a goods movement-
specific program which became the TCIF, the bond program for 
the Trade Corridor Improvement Program. So we were able to go 
from a plan to a funding element because we had consensus 
around the GMAP as to what were true goods movement type 
projects.
    But I think what was key, though, what we learned most 
importantly in the process is the value of bringing all the 
stakeholders to the table, and the ones that were not at the 
table, either through just omission or just not knowing that 
they were key stakeholders, I think that is where the problem 
was. That is who caused the most problem, because they were not 
at the table at the time.
    But what we are learning now is understanding and defining 
what stakeholdership is around freight movement, and it is not 
your typical run-of-the-mill of everybody that you think should 
be around the table, because actually what we have today is 
more inclusive. So we expect to use that lesson well to bring 
others to the table that are not typically at the table when 
you are talking about projects.
    But I think the focus on understanding that freight 
movement is a business, and having that as a core element of 
the discussion, understanding that it is a business that also 
wants to be responsible to the community, and bringing that 
together ultimately I think is the lesson learned.
    Mr. Duncan. We have 10 minutes before we have to leave to 
stay on our schedule. Before Mr. Nadler and I close it out, I 
want to ask Mr. Miller and Ms. Hahn if they have anything else 
they would like to say.
    Mr. Miller of California. Well, I feel for the process of 
CEQA because I authored language to say you didn't have to go 
through NEPA if you met or exceeded those standards, so that 
helped a lot. But we need to drop a bomb on the State or 
something to get them to do something more realistic because, 
honestly, approving these projects----
    Voice. You really don't mean that.
    Mr. Miller of California. No, I don't mean it. But 
approving these projects is so time-consuming, expensive, 
cumbersome, and the delays you face cost just millions and 
millions of dollars in the process of waiting for the project 
to come to fruition. I thank you.
    Ms. Hahn?
    Ms. Hahn. Thank you. I heard that was Jesse's voice from 
the back, and actually that is what I was going to say, is I 
think we should all just come to the realization that these 
great transportation projects are necessary for this country to 
remain competitive globally. This is about creating jobs. This 
is about easing congestion. This is about moving goods. But I 
think we have to come to the realization that there has to be 
mitigation for these projects. The health of my constituents in 
Wilmington and San Pedro shouldn't be compromised just so goods 
can arrive in Oklahoma on time. While the ports are a huge 
economic engine, they are actually the largest polluters in 
this region.
    So, I agree. I mean, I think the EIRs need to be accurate 
so that we don't have appeals and we don't have lawsuits, and 
let's get the stakeholders in the front, work with the 
Coalition for Clean Air, the NRDC, the AQMD. Get them to the 
table in the beginning and find out how we can mitigate these 
projects. That is the reality going forward, and I think we all 
agree to that. These projects will be done quicker, and at the 
end of the day they will be better projects.
    Mr. Duncan. All right.
    Mr. Nadler?
    Mr. Nadler. Well, thank you, Mr. Chairman. I want to thank 
everybody for participating in this. I think, at least around 
this roundtable, I suppose, there is wide agreement, not on 
everything, but wide agreement.
    But one question we really didn't get an answer to, and I 
am not sure if we are capable of getting an answer now, we 
agree that there ought to be a trust fund, we agree X dollars 
ought to be spent, but where the money comes into that trust 
fund from no one has really been willing to say, and that is 
the biggest problem we are going to have to face in Washington, 
obviously, because everything else we talk about is pretty 
meaningless if there is no source of those funds.
    We can talk about a trust fund and how we allocate the 
funds from that trust fund, but how the money gets into the 
trust fund is crucial. There is a--some would call it a 
problem, some wouldn't, but there is clearly an unwillingness 
among many in Washington to increase the gasoline tax, to index 
it to inflation, or to bring in other revenue sources. So we 
are going to have to figure that one out. Otherwise, we are not 
going to have a revenue source or sources from which to fund 
what we want to fund, although everyone agrees, or at least 
everyone in this room agrees that we need a robust freight 
policy and a robust freight fund from the Federal Government to 
supplement State and local efforts.
    But we are going to have to face that key question, period. 
I hope we can get some guidance on that because that is--I 
mean, we are going to come back in this committee and the task 
force is going to recommend a unified freight policy. I am sure 
we are going to recommend some sort of trust fund. We are going 
to recommend Federal participation. We are going to recommend 
standards. But how to fund it, I don't know if we are going to 
be able to recommend, but someone is going to have to figure 
that out.
    Thank you.
    Mr. Duncan. All right. Thank you very much.
    Let me just close by saying a couple of things. In addition 
to our briefings at the airport and at the ports and with the 
railroad people and all, we had a very good roundtable 
yesterday with eight witnesses, eight experts, and then, of 
course, culminating with this hearing here this afternoon. We 
appreciate the hard work that all of our witnesses have put 
into this, and the time.
    But we had quite a few other people or groups that wanted 
to testify. Now, we couldn't accommodate everybody, but we can 
accommodate everybody in this way. If any of you on the panel 
have any additional ideas that you have thought of or think of 
later, or if anybody in the audience wishes to submit some 
suggestions, we are open to that. The only thing I would ask, 
we don't need a lot of flowery generalities. What we need, we 
need specific, detailed suggestions, and that is what we want.
    And so with that, I thank all of you--OK, you can.
    All right.
    Voice. Because none of these speakers----
    Mr. Duncan. All right. Let me tell you, sir, I have tried 
to be very fair to everybody in this, but we are not going to 
do this.
    This hearing is now concluded.
    [Whereupon, at 3:26 p.m., the panel was adjourned.]

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