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





    EXAMINING THE CURRENT AND FUTURE DEMANDS ON THE FEDERAL TRANSIT 
               ADMINISTRATION'S CAPITAL INVESTMENT GRANTS

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

                                (113-45)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                          HIGHWAYS AND TRANSIT

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           DECEMBER 11, 2013

                               __________

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             Committee on Transportation and Infrastructure



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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
MARK SANFORD, South Carolina

                                  (ii)


                  Subcommittee on Highways and Transit

                  THOMAS E. PETRI, Wisconsin, Chairman

DON YOUNG, Alaska                    ELEANOR HOLMES NORTON, District of 
HOWARD COBLE, North Carolina         Columbia
JOHN J. DUNCAN, Jr., Tennessee       PETER A. DeFAZIO, Oregon
JOHN L. MICA, Florida                JERROLD NADLER, New York
FRANK A. LoBIONDO, New Jersey        EDDIE BERNICE JOHNSON, Texas
GARY G. MILLER, California           MICHAEL E. CAPUANO, Massachusetts
SAM GRAVES, Missouri                 MICHAEL H. MICHAUD, Maine
SHELLEY MOORE CAPITO, West Virginia  GRACE F. NAPOLITANO, California
DUNCAN HUNTER, California            TIMOTHY J. WALZ, Minnesota
ERIC A. ``RICK'' CRAWFORD, Arkansas  STEVE COHEN, Tennessee
LOU BARLETTA, Pennsylvania           ALBIO SIRES, New Jersey
BLAKE FARENTHOLD, Texas              DONNA F. EDWARDS, Maryland
LARRY BUCSHON, Indiana               JANICE HAHN, California
BOB GIBBS, Ohio                      RICHARD M. NOLAN, Minnesota
RICHARD L. HANNA, New York           ANN KIRKPATRICK, Arizona
STEVE SOUTHERLAND, II, Florida       DINA TITUS, Nevada
REID J. RIBBLE, Wisconsin, Vice      SEAN PATRICK MALONEY, New York
Chair                                ELIZABETH H. ESTY, Connecticut
STEVE DAINES, Montana                LOIS FRANKEL, Florida
TOM RICE, South Carolina             CHERI BUSTOS, Illinois
MARKWAYNE MULLIN, Oklahoma           NICK J. RAHALL, II, West Virginia
ROGER WILLIAMS, Texas                  (Ex Officio)
SCOTT PERRY, Pennsylvania
RODNEY DAVIS, Illinois
BILL SHUSTER, Pennsylvania (Ex 
Officio)

                                 (iii)




































                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................    vi

                               TESTIMONY

Hon. Peter M. Rogoff, Administrator, Federal Transit 
  Administration.................................................     5
Hon. Gregory H. Hughes, Chairman, Board of Trustees, Utah Transit 
  Authority......................................................     5
Forrest Claypool, President, Chicago Transit Authority...........     5
Hon. Christopher B. Coleman, Mayor, City of St. Paul, Minnesota..     5
Randal O'Toole, Senior Fellow, Cato Institute....................     5

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Hon. Peter M. Rogoff.............................................    32
Hon. Gregory H. Hughes...........................................    43
Forrest Claypool.................................................    50
Hon. Christopher B. Coleman......................................    59
Randal O'Toole...................................................    63

                       SUBMISSION FOR THE RECORD

Hon. Peter M. Rogoff, Administrator, Federal Transit 
  Administration, responses to questions for the record from the 
  following Representatives:

    Hon. Eddie Bernice Johnson, of Texas.........................    40
    Hon. Dina Titus, of Nevada...................................    42


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]




 
                    EXAMINING THE CURRENT AND FUTURE
                             DEMANDS ON THE
                    FEDERAL TRANSIT ADMINISTRATION'S
                       CAPITAL INVESTMENT GRANTS

                              ----------                              


                      WEDNESDAY, DECEMBER 11, 2013

                  House of Representatives,
              Subcommittee on Highways and Transit,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 2 p.m., in Room 
2167, Rayburn House Office Building, Hon. Thomas E. Petri 
(Chairman of the subcommittee) presiding.
    Mr. Petri. The subcommittee will come to order. We will be 
joined shortly by the ranking Democrat for the day, Ms. 
Napolitano. We are under some time pressure because we are 
expecting an hour of votes starting shortly before 3 o'clock.
    Today's hearing will focus on the Federal Transit 
Administration's Capital Investment Grant program, commonly 
known as New Starts. Federal public transportation programs 
have traditionally provided financial support for capital costs 
and limited operating expenses to local transit agencies around 
the country. These programs complement our investment in 
highway and bridges in order to support an integrated national 
surface transportation network.
    MAP-21 reauthorized Federal public transit programs for 2 
years and provided $10.5 billion in annual funding. The 
majority of Federal transit dollars are funded out of the Mass 
Transit Account of the Highway Trust Fund. Of the 18.4 cents 
per gallon collected in Federal gasoline taxes, 2.86 cents are 
deposited in the Mass Transit Account for these purposes.
    In addition, approximately 20 percent of the Federal 
transit programs are funded from the general fund. The largest 
of these programs is New Starts. MAP-21 authorized $1.9 billion 
in each budget year, 2013 and 2014, for the program. New Starts 
is a discretionary grant program that has clear justification 
criterion and a transparent project selection process. Projects 
that are selected for funding must have a strong local 
financial commitment and achieve sufficient ratings in the 
justification factors, such as cost-effectiveness and the 
potential for economic development.
    Projects currently funded through the New Starts program 
vary widely across types, regions, and costs. For example, on 
the high end, the New Starts program is currently contributing 
$1.5 billion toward a $5 billion transit program in Honolulu. 
Two multibillion-dollar projects in New York City are also 
being funded. On the smaller end, the program also funds what 
is known as Small Starts projects. Small Starts must cost less 
than $250 million total and have a maximum Federal share of $75 
million. Current Small Starts projects include a bus rapid 
transit project in Grand Rapids, Michigan, and a light rail 
expansion in Mesa, Arizona.
    The program originally was intended and designed to support 
new systems or new extensions to existing systems, but MAP-21 
significantly expanded New Starts eligibility. Projects that 
would expand the capacity of an existing corridor by at least 
10 percent are now eligible for New Starts funding.
    In November, FTA approved the first Core Capacity project 
to enter into project development, a $4.7 billion proposal to 
modernize the red and purple lines in Chicago. With the 
expanded eligibilities, one could see a potential situation in 
which a handful of expensive projects in large urban areas 
could monopolize the New Starts funding over several years. 
This could come at the expense of funding opportunities for new 
public transit systems in the rest of the country. We must 
ensure that Federal investment in public transportation 
projects through this program is appropriately targeted, 
equitable, and cost-effective.
    Today's hearing will focus on the changes MAP-21 made to 
the New Starts program. We will also examine how those changes 
are impacting current and future funding demands. The 
subcommittee will receive testimony from Peter Rogoff, 
Administrator of the Federal Transit Administration, who is 
responsible for implementing the New Starts program. In 
addition, we will hear from officials from the Utah Transit 
Authority and the Chicago Transit Authority, the mayor of St. 
Paul, Minnesota, and a representative of the Cato Institute.
    Before I recognize representative Napolitano, I would like 
to recognize Mr. Crawford for a unanimous consent request.
    Mr. Crawford. Thank you Mr. Chairman. I request unanimous 
consent that the chairman be permitted to declare a recess 
during today's hearing.
    Mr. Petri. I would also like to ask unanimous consent that 
Representative Daniel Lipinski be permitted to join the 
subcommittee for today's hearing. Without objection, so 
ordered.
    I now yield to Representative Napolitano for any opening 
statement she may wish to make.
    Mrs. Napolitano. Thank you, Mr. Chairman. First, let me 
extend Ranking Member Norton's regrets she would not be able to 
be here today. She is returning from South Africa as part of 
the delegation to pay tribute to former South African President 
Nelson Mandela.
    But we thank you for holding this important hearing on 
Federal investments in our Nation's transit infrastructure 
through the FTA's New Starts program, and I am very pleased to 
serve as ranking member as this program is of great importance 
to not only the county of Los Angeles, but the State of 
California, being a donor State.
    The Gold Line on the East Side, which is an extension 
program in our area, is one of the New Starts projects to be 
completed in the county that was my former district of 2009, 
received $490 million in Federal funding and leveraged an 
additional $400 million in local funding. So that was a pretty 
good match.
    That extension created a 6-mile light rail into 
historically Latino community of East Los Angeles. The vibrant 
community now has easy transit to downtown L.A. and most parts 
of the county and increased a lot of potential for economic 
development. Also increased the ability for people to travel 
and get congestion off the highways and be able to develop more 
jobs and business opportunities.
    The two New Starts projects in the proposals in L.A. 
County--by the way, L.A. County is about 14 million people, the 
L.A. city is about 4 million people. So you understand we need 
mass transit. The county has two projects set to receive full 
funding grant agreements from FTA in the near future, the 
Regional Connector Light Rail Project and the Westside Subway 
Extension, together estimated to provide over 100,000 average 
weekly transit trips in their first year, and greatly, of 
course, improve mobility and access, reduce travel time, help 
the environment. And, of course, the Central Business Council 
of Los Angeles is ecstatic about that.
    The Regional Connector will allow constituents to be able 
to connect the San Gabriel Valley, which is southeast of Los 
Angeles, to the West Side of Los Angeles, which currently they 
would not be able to access as easily, provide more speed and 
efficiency for the constituents to commute around the region of 
Los Angeles, reducing congestion and helping clean the 
environment.
    The Gold Line Foothill Extension, also we must recognize 
and support transit projects that are being fully funded at the 
local level, no Federal funds, local level, and it is being 
constructed at a cost of $735 million with local funding, $11.5 
million extension of the current rail line, and six new 
stations in the San Gabriel Valley. Our local governments had 
planned to further extend the line from one city, Azusa, to the 
Ontario Airport, owned by the city of Los Angeles, and that 
would create not only a lot of economic development in the 
whole corridor, but also be able to expedite the people 
traveling from outside L.A. County into the county, but that 
phase is not fully funded.
    Now, the large self-help regions like L.A. County must 
receive additional support from the Federal Government for our 
locally funded projects. These are just some of the examples of 
the New Starts projects or programs, and all over the country 
our Government is investing in public transportation, which 
will undoubtedly improve the mobility of millions of Americans, 
help to reduce traffic congestion, improve our air quality and 
environment, and foster the development of economically viable 
and livable communities, such as in one of your testimonies I 
found very interesting and I commend you for that.
    That program has for decades been the Federal Government's 
primary instrument for supporting large-scale transit capital 
investments--heavy rail, commuter rail, light rail, and bus 
rapid transit. This was created, of course, in 1964 and has 
made possible dozens of new transit systems and/or expansions 
across our country. Continuing to make these investments is 
critical to our economic viability and stability and the well-
being of our citizens.
    This new program consists, of course, of rigorous 
justification criteria and detailed FTA review, more than any 
other category of Federal transportation funding, to ensure 
only projects that will yield a certain level of benefit will 
receive funding. This level of justification is not in regard 
of any category of highway projects receiving Federal funds. In 
fact, the chief complaint about New Starts is how lengthy and 
cumbersome it is and can be to successfully navigate the 
process and obtain a grant agreement because of this complex 
review process.
    Congress in its most recent surface transportation 
authorization, MAP-21, addressed the concern by streamlining 
and combining steps in the process to expedite grant approval. 
Also added eligibility under this program for existing transit 
systems that are operating at or over capacity or expect to be 
in the next 5 years to upgrade their current network.
    There is a great need for these projects, known as the Core 
Capacity, and it is a testament to the growing transit 
ridership across this country. Projects are most often thought 
of as applicable to older, larger legacy transit systems in 
cities such as Chicago, New York, Washington, DC, and, of 
course, San Francisco, because of their age and condition.
    In reality, any system can utilize this eligibility and I 
suspect all systems will eventually have to. For example, if a 
light rail system finds that growing popularity of its services 
means needing to upgrade check from two- to three-car 
platforms.
    Unfortunately, some will call into question whether Core 
Capacity projects should continue to be eligible given the 
limited size of the New Starts funding. The program was 
established to add transit capacity to this country, and in 
this regard the program has accomplished this objective and 
more, and done it in a very competitive and transparent manner. 
Members of this committee must stand together to make sense for 
continued robust funding of this very highly successful program 
and in its much-needed areas.
    Rather than quibbling over how we address capacity, we 
should focus on ensuring FTA is using all of its tools 
appropriately to identify the projects nationwide that add 
transit capacity in the most beneficial way to transit riders 
and communities. A well-funded system of competitively selected 
projects, coupled with complete transparency over the process, 
will ensure that all eligible and interested projects, those 
that stand to produce the most results, become a reality with 
our help.
    Look forward to hearing from the witnesses and to learn 
more about their progress implementing the MAP-21 and to hear 
the sponsors of several successful New Starts projects across 
the country. Thank you, Mr. Chair, and I yield back.
    Mr. Petri. Thank you.
    Let me again welcome our panel of witnesses today 
consisting of the Honorable Peter M. Rogoff, Administrator of 
the Federal Transit Administration; the Honorable Gregory H. 
Hughes, chairman of the Board of Trustees of the Utah Transit 
Authority; Forrest Claypool, who is president of the Chicago 
Transit Authority; Mayor Chris Coleman from St. Paul; and Mr. 
Randal O'Toole, who is a senior fellow with the Cato Institute, 
who has spent years as a recognized expert in this area.
    I thank you all for the effort that went into your prepared 
statement and would invite you to summarize them for about 5 
minutes of testimony, beginning with Mr. Rogoff.

   TESTIMONY OF HON. PETER M. ROGOFF, ADMINISTRATOR, FEDERAL 
TRANSIT ADMINISTRATION; HON. GREGORY H. HUGHES, CHAIRMAN, BOARD 
    OF TRUSTEES, UTAH TRANSIT AUTHORITY; FORREST CLAYPOOL, 
   PRESIDENT, CHICAGO TRANSIT AUTHORITY; HON. CHRISTOPHER B. 
    COLEMAN, MAYOR, CITY OF ST. PAUL, MINNESOTA; AND RANDAL 
             O'TOOLE, SENIOR FELLOW, CATO INSTITUTE

    Mr. Rogoff. Thank you, Chairman Petri and Ms. Napolitano. 
We very much appreciate the opportunity to highlight the 
success of the Federal Transit Administration's New Starts 
program. I also want to thank the committee for supporting our 
efforts to strengthen the program through MAP-21.
    Since its inception nearly four decades ago, New Starts has 
become one of the Federal Government's most transformational 
investment partnerships. The program has earned broad-based 
support among Governors, mayors, local council leaders, and 
millions of Americans across party lines in every region of the 
country because they know what the program delivers.
    To cite just a few examples, in Dallas, Texas, a city where 
we were told that no one was going to get out of their pickup 
trucks, citizens are now flocking to new light rail lines 
extending throughout the city and its suburbs. In fact, Dallas 
is now the largest operator of light rail service in North 
America, and that service has unleashed billions of dollars in 
new commercial and residential construction around the region.
    In Utah, as I am sure Mr. Hughes will explain, Utah has now 
completed 70 miles of new transit service in 7 years. The State 
has more than doubled transit capacity as its population grows 
more than twice as fast as other States. A few days ago I rode 
commuter rail down to Provo and Orem from Salt Lake and saw 
firsthand the huge number of jobs created there as companies 
like Adobe, eBay and Nu Skin set up shop right near the 
commuter rail stations. And in Arizona, the New Starts program 
is helping to link downtown Phoenix with the suburbs of Tempe 
and Mesa, generating new jobs and opportunities along the way.
    In all, FTA has signed 120 full funding grant agreements 
for New Starts and 20 grant agreements for Small Starts 
projects. The Obama administration envisions the New Starts 
program having an even bigger role in the years ahead.
    The U.S. Census projects that we will add roughly 120 
million people between now and 2060, expanding our population 
by about one-third. The number of people 65 and older will more 
than double over the next 50 years. Young people are driving 
less and our cities are choking on congestion. These trends cry 
out for a balanced approach to transportation, one that expands 
our transportation networks in all directions, and the New 
Starts program must be part of that solution.
    At the FTA we have heeded Congress' call to streamline New 
Starts and improve its efficiency. Our commonsense changes will 
help local project sponsors shave at least 6 months off the 
time that is now required to move major New Starts projects 
from concept to construction. In some cases we will be able to 
shorten the process even more.
    FTA recently rolled out a new ridership forecasting tool 
that we are very proud of that can save local project sponsors 
as much as $1 million on fees and reduce certain planning 
requirements from 2 years all the way down to 2 weeks. Over the 
past decade, roughly 80 percent of our New Starts and Small 
Starts projects were delivered on time and on budget. For the 
projects we currently have under construction, that number is 
likely to be closer to 90 percent.
    Unfortunately, despite a very successful track record and 
rising demand from all corners of the country, the New Starts 
program is currently facing some very significant challenges. 
The combination of the funding freeze contained in the 
continuing resolution for 2013 and the sequester that followed 
left funding for this program almost $400 million below the 
level requested in the administration's budget. As a result, 
for the first time in modern memory, FTA was unable to make new 
funding commitments for any new projects through the New and 
Small Starts program in its 2014 budget. And every project that 
already had a signed funding agreement with the FTA received 
less funding than the amount called for in that agreement, 
resulting in increased financing and carrying costs on local 
governments.
    FTA now has more than 30 projects in the pipeline, projects 
that together would add more than 320 new miles of transit 
service to communities that need more robust transportation 
choices. We also are working to increase capacity in rail 
corridors that are already at or above capacity today through 
the Core Capacity program, as Ms. Napolitano made mention of, 
in cities like Chicago, New York and elsewhere. These Core 
Capacity investments will enable systems that already provide 
close to 4 billion trips a year to better serve the expanding 
number of riders that they are experiencing.
    The administration remains fully committed to the New 
Starts program and to advancing many good projects through the 
budget process. We are asking Congress to help us get it back 
on track, to pay our bills, and build more of the good 
transportation projects our Nation so desperately wants and 
needs.
    Mr. Chairman, this concludes my testimony. I will be happy 
to answer any questions at the conclusion of the testimony. 
Thank you.
    Mr. Petri. Thank you.
    Mr. Hughes.
    Mr. Hughes. Thank you, Mr. Chairman, members of the 
subcommittee. Thank you for the opportunity to speak to you. My 
name is Greg Hughes. I am the chairman of the Utah Transit 
Authority, which is our multijurisdictional, political 
jurisdictional mass transit system. We serve probably 80 
percent of the population of the State of Utah.
    I wear a couple different hats. I am also a member of our 
State legislature in the House. I am our majority whip and I 
serve in that role. So I have a couple different areas of 
responsibility and perspectives that I brought when I was asked 
by the mayors in Salt Lake County to serve as a board member of 
UTA.
    I have to tell you that I grew up, by way of background, in 
Pittsburgh, Pennsylvania, which is a much more densely 
populated metropolitan area than the Salt Lake County area, and 
as a conservative Republican my opinion of mass transit is it 
seemed reasonable or a necessity in Pittsburgh, but certainly 
in a State like Utah, maybe more of an oversubsidized social 
service. So I warned the mayors that if I was going to serve on 
this board, they might not like what I had to say or the 
perspective I was going to share.
    I think it was helpful for me as a member of our State 
legislature to be on that board and lend the perspective of a 
State that is fiscally conservative and always looking at that 
bottom line, but I at the same time got some valuable 
perspective as well as was able to understand a little bit 
better in a State like Utah, where you see how quickly we are 
growing, the absolute need we have to be multimodal.
    And what I mean is that when I sat every year and had to 
look at how many roads we had to help keep in good repair and 
how much expansion we needed for the population that was 
growing, I became agnostic in terms of mode. I didn't care any 
longer whether someone was going to decide to get on a train or 
a bus or a different mode, or whether they were going to get in 
their car. In fact, I started to point out to stakeholders who 
might not have thought of themselves as traditional 
stakeholders to mass transit that if you like getting to work 
on time, you love that 80 percent of the light rail commuters 
along our new line own automobiles and would have been in your 
way trying to get to work or to school.
    What we find in the State of Utah is that we just have to 
get people from point A to point B, and we have to find as many 
ways to do it as possible. We have had an over billion-dollar 
expansion of the interstate freeway in Utah County, one of the 
fastest growing counties in the country. One of the $30 million 
interchanges will hit congestion failure in 6 years. How do we 
begin to pay for that as a State? We have to have multimodal, 
we have to have other areas to allow people to commute.
    The nice thing about rail as we have put in 140 miles in 15 
years is that you can add capacity very quickly by adding a 
car, another car for people to commute. That gives us more 
options and why I have begun to see this under more of a more 
general term and why, frankly, I think sometimes my 
conservative colleagues and friends have not occupied the space 
of being an advocate for transportation infrastructure.
    I think that if you have Lincoln, who brought us the 
intercontinental railroad, and President Eisenhower, who 
brought the interstate, our transportation infrastructure and 
being multimodal and getting people from point A to point B is 
something that is very bipartisan. The roads, the rail, the 
buses, these are not Republican or Democrat. This is an area 
where our interests, our concerns, Utah is a valley and clean 
air is certainly a concern as well.
    There are many people that have different perspectives that 
overlap when we talk about MAP-21 and how we get things done. 
And I think that where we represent constituencies, the 
constituents that I represent, as we find these areas of 
agreement that exist in public policy, and they don't always 
exist, I know this, I think that it builds confidence in our 
constituents so when we don't agree on some things, maybe there 
is more legitimacy to those disagreements because we have found 
places where we work together, where we get things done, where 
we make things better for our constituents.
    Sitting behind me, she didn't know I was going to say this, 
is my daughter. I brought my 14-year-old daughter with me to 
let her kind of see this process and how it is working. This is 
the generation we are talking about. This is the generation 
that is the technology native. That means that her world and 
her freedom is more found in electronic devices and how she can 
communicate with people than the car that would drive her 
necessarily to the friend's house.
    Being able to commute--I wish we had these in our State 
legislature, these little clocks, so I will be quick--being 
able to stay productive, get around and explore the freedom 
that technology now brings makes a multimodal transportation 
infrastructure imperative to our constituents. And I applaud 
MAP-21. I think there are some great improvements that can be 
made. I know UTA would be happy to share that with you. And New 
Starts, finally, is critical, Mr. Chairman.
    Mr. Petri. Thank you.
    Mr. Claypool.
    Mr. Claypool. Thank you, Chairman Petri and Member 
Napolitano, and distinguished members of the subcommittee, all. 
I thank you for the opportunity to appear today. My name is 
Forrest Claypool. I am the president of the Chicago Transit 
Authority, the CTA, which is the Nation's second-largest 
transit agency with over 1.7 million rides per day in the city 
of Chicago and 35 suburbs. And I am here today to talk about 
the importance of the Core Capacity projects.
    As you know, MAP-21 contained a provision that allowed Core 
Capacity projects to be eligible for the Federal Transit 
Administration's 5309 Capital Investment Program. Core Capacity 
expands capacity within the existing footprint of the transit 
network to meet current and future ridership demand, and per 
MAP-21, eligible Core Capacity activities include adding infill 
stations, expanding platforms, double tracking, improving 
signal systems, increasing electrical power, and other 
activities that increase capacity by 10 percent or more.
    Previous experience with Core Capacity projects in Chicago 
has proven that Core Capacity is a cost-effective way to 
increase transit ridership and improve efficiency. Due to 
ridership gains of nearly 80 percent from 1980 to 2000 on its 
Brown Line, the CTA undertook plans to add capacity by 
extending the Brown Line's six-car platforms to eight-car 
platforms and by reconstructing stations to allow for full 
accessibility. This $522 million project was listed as a 5309 
capital investment project in TEA-21. Preconstruction ridership 
projections forecasted a 22-percent increase, but that target 
was surpassed by 2011, less than 2 years after the project was 
complete. Ridership is up 36 percent since, over 30,000 rides 
each weekday.
    The Brown Line capacity project not only exceeded 
expectations, it has had a profound impact on economic 
development. In 2011, one-quarter of all the city's building 
permits were within a half mile of the Brown Line, which is a 
remarkable testimony to the economic power of the project.
    The CTA has continued to experience consistent ridership 
growth over the past decade, especially on its rail lines. We 
recently completed in just 5 months a complete rebuild of the 
Red Line South $425 million project and the next leg is Red 
North, a capital expansion project on the CTA's busiest 
corridor, the Red and Purple lines, in order to grow ridership 
further.
    Chicago's Red and Purple lines are the backbone of our 
system, providing 300,000 rides each weekday, extending north 
and south through the city and into the northern suburbs. Most 
of the northern section of the line is more than 100 years old, 
built by private enterprises in the late 1800s, and it is, of 
course, famous for its elevated tracks and curves and narrow 
platforms that you often see in TV movies like ``The 
Fugitive.''
    This corridor, from Belmont to Linden, serves 130,000 rides 
past such landmarks as Wrigley Field, Loyola and Northwestern 
University. And while the age and unique features may be 
endearing to some, it is very costly to maintain and to meet 
the growing ridership demand in a commercially thriving and 
diverse section of our region. Over the last decade, the 
ridership in this corridor is up 14 percent, but we are at 
capacity, leaving so many passengers on our platforms because 
of the need for extra power and room. Constraints on signaling 
do not allow us to add more trains to the sets or lines to meet 
the crowding and demand. And we have bottlenecks on the system 
as well, including the aforementioned curves and a bottleneck 
called Clark Junction south of Wrigley Field where multiple 
lines converge.
    So you are familiar with the legislation in terms of what 
it allows, and I mentioned them earlier, things that expand 
capacity, but we do estimate that we can in time double the 
130,000 rides on the system, and that would compare very 
favorably with any New Start project around the country. FTA 
recently approved the CTA's request to enter the Red and Purple 
line project into project development, so I would like to thank 
Administrator Rogoff and the FTA for their assistance.
    Before I close, I did want to note that other cities are 
pursuing Core Capacity as well, Dallas, Washington, Charlotte, 
to name a few, and adding capacity within the transit agency's 
existing footprint is critical for both older and newer 
systems.
    And I would just finally also like to note, if Congressman 
Lipinski arrived, just to thank him. He has been a staunch 
supporter of the Core Capacity provision, even offering an 
amendment in 2011, and is a friend of transit and a tremendous 
asset to the city of Chicago. So thank you, Congressman 
Lipinski, and thank you to the committee for allowing us to 
testify today.
    Mr. Petri. Thank you.
    I understand his plane was a little late and that he is on 
his way. But I am sure he will appreciate your remarks.
    Mayor Coleman.
    Mr. Coleman. Thank you, Mr. Chairman, and members of the 
committee. It is an honor for me to be here today to testify on 
this important subject. If I could just indulge you to thank a 
couple of members of your subcommittee that are good friends of 
mine and great leaders on the State level from Minnesota. 
Representative Nolan and Representative Walz have been great 
friends and great supporters of transportation. Congresswoman 
McCollum, also my Congresswoman, has been an incredible leader 
on the Central Corridor and projects all across the East Metro 
area and the Twin Cities of St. Paul and Minneapolis. I also 
want to acknowledge and thank the group Transportation for 
America who helped facilitate my participation here today.
    Transit investments like the New Starts program provide 
long-term economic impact and generate future economic returns 
to individual regions and the national economy. The impact of 
transit investments in St. Paul is no different. We are 6 
months from opening day for the New Starts-funded Green Line or 
the Central Corridor light rail service, which will link 
downtown St. Paul, the University of Minnesota, and downtown 
Minneapolis through some of the metropolitan region's most 
diverse and transit dependent communities.
    Already we have seen more than $1.2 billion worth of 
investment in new housing and employment opportunities within 
the 18 station areas along the 11-mile route. Over 7,500 
housing units have been or will be built along the line, many 
of those financed to be affordable for students or lower income 
households. These are families who will be able to reduce what 
they are now spending on their two biggest items in every 
family budget, housing and transportation, investing what they 
will be saving in going to school, buying a home, or starting a 
business.
    Small business owners, many of them recent immigrants, are 
renovating their buildings and expanding their shops and 
restaurants to respond to a growing market created by a 
projected 44,000 trips a day on the Green Line. Sixteen 
colleges and universities, hospitals, and other facilities are 
within blocks of the Green Line, and they have convened the 
Central Corridor Anchor Partnership and have taken stock of the 
fact that together they employ 67,000 people and have recently 
undertaken more than 100 capital projects, accounting for some 
$5 billion in capital investment. They are now working together 
to determine how they can leverage their roles as employers, 
educators, and purchasers of goods and services to strengthen 
Green Line neighborhoods.
    Twelve of our local and national philanthropic partners 
have joined together in the Central Corridor Funders 
Collaborative and expect to invest $20 million over the next 10 
years, in addition to their individual investments, in 
community development activities ranging from supporting the 
growth of small businesses to ensuring the continued 
availability of quality affordable housing.
    I know that time is short, so I won't continue to talk 
about all the things that are happening on the line. Suffice it 
to say that none of this would have happened, certainly not 
over the past 8 years, were it not for the nearly $0.5 billion 
Federal New Starts investment that made construction of the 
Green Line possible.
    The last time there was a major transportation investment 
in the same corridor it was the construction of I-94, which 
while linking St. Paul and Minneapolis with Chicago and points 
east, also sapped the economies of these same neighborhoods, 
leading to over 40 years of disinvestment. Learning from that 
experience, the FTA and its New Starts program insists that we 
as cities and regions demonstrate how we are going to use the 
Federal transit investment to enhance the lives of our 
residents, build stronger communities, and more competitive 
regional economies.
    St. Paul and Minneapolis are demonstrating even before the 
Green Line carries its first passenger the value of the New 
Starts investments in our midst. Recently someone commented on 
how I have been lucky to be mayor at such a great time in our 
economic history, and I think what they were actually referring 
to is the time that we have spent investing in our community 
through programs like the building out of the Central Corridor. 
There is no doubt that St. Paul is stronger because of the 
investment that has been made in this project. In spite of the 
economic challenges that we faced, we have continued to see 
growth because of this type of investment.
    As I alluded to at the beginning of my remarks, the New 
Starts program is a critical funding tool for projects across 
the country. Last month I was elected president of the National 
League of Cities, which represents over 19,000 cities, towns, 
and villages across the United States. For many of these 
communities and their region, transit investments are a key 
component of their future growth and economic success.
    Today local communities are raising funds for transit and 
the transportation networks of roads and bridges that connect 
them to each other and the larger region, often by taxing 
themselves, but few local communities have the capacity to bond 
or tax for the full cost of the construction. Through the New 
Starts program the Federal Government has proven to be an 
effective partner in expanding transit services and 
underwriting economic growth.
    While demand is growing nationally for the New Starts 
funding, the program faces threats in Congress. As you know, 
unlike most other Federal transportation programs that are 
funded by the gas tax, New Starts is paid for with general 
funds and is subject to sequestration and yearly budget cuts. 
It is critical that this subcommittee and your colleagues 
provide additional dedicated funding for this vital program as 
a downpayment on our national economic future.
    In closing, I want to thank Chair Petri and members of the 
committee, all the members of the committee, for their 
invitation to testify and for the chance to highlight this 
program and the city of St. Paul and its impact on the 
partnership between the city, the State, and the Federal 
Government. Thank you very much. And I stand for questions.
    Mr. Petri. Thank you.
    And Mr. O'Toole.
    Mr. O'Toole. Thank you, Mr. Chairman and members of the 
committee.
    I have been called a rail hater, but the reality is I love 
trains. I especially love passenger trains. What I hate are bad 
incentives. The problem with New Starts is that it gives cities 
and transit agencies terrible incentives to spend horrendous 
amounts of money to find the highest cost transit solutions 
possible in any corridor. We only have to look at the history 
of light rail to see this happening.
    In 1981, San Diego opened the first modern light rail line 
in this country. It cost a little more than $5 million a mile 
for a 16-mile line. Translated today's dollars, that is less 
than $12 million a mile. They built it without any Federal 
funds.
    Later in the 1980s, several other cities, including my 
former hometown of Portland, Sacramento, and other cities, 
opened light rail lines that were built with Federal funds, and 
they cost an average of $30 million, two-and-a-half times as 
much per mile as the San Diego line. The reason why they cost 
so much is because the cities were designing their system to 
spend lots of money so they could get a larger share of Federal 
funds.
    By 2000, the average cost of light rail lines in the New 
Starts program was more than $50 million a mile. By 2014, the 
Federal New Starts program cost for light rail averaged more 
than $110 million a mile, and that is not counting three light 
rail subway lines that are costing over $600 million a mile 
each. The lowest cost light rail line in the latest New Starts 
program is more than $50 million a mile. So costs have 
increased by nearly 10 times because cities are essentially in 
a race with each other to get as much money as they can out of 
the New Starts fund before some other city gets that share of 
the money.
    This kind of spending cannot be justified on economic, 
environmental, or transportation grounds. The light rail and 
other rail transit is often touted as a way of curing 
congestion, but in fact many of these lines are making 
congestion worse. The Minneapolis Hiawatha light rail line 
disrupted traffic signal coordination on parallel Hiawatha 
Avenue and added 20 to 40 minutes to people's journeys each 
day. The Purple light rail line planned in Maryland, the Red 
light rail line planned in Baltimore, and many other lines are 
actually predicted in their environmental impact statements to 
significantly increase congestion in their corridors.
    Nor are these lines saving energy. The Utah Transit 
Authority's commuter rail lines, for example, use more energy 
and emit more pollution per passenger mile than a typical 
sports utility vehicle. The Purple line and many other lines, a 
new line in Dallas, are all predicted to use more energy than 
the cars they take off the road and to emit more pollution than 
the cars they take off the road.
    What is worse is spending large amounts of money on rail 
transit is harmful to transit riders. There have been many 
cases of transit agencies cutting bus service to core areas 
where low-income people live in order to pay for building 
expensive rail transit out to suburban areas where white 
middle-class people live. For example, Denver and Salt Lake 
both once had higher transit shares of commuting than Las Vegas 
in 1990. Then they built light rail and their share of 
commuting has declined, whereas Las Vegas, by investing solely 
in bus improvements, has doubled transit share of commuting and 
now has a higher share of commuting than Denver or Salt Lake.
    The sad thing is that buses can do better than light rail 
or street cars or most rail transit in almost every situation. 
They have a higher capacity, they have much lower costs, they 
can carry more people more comfortably and do it without 
imposing costs on other people. The only cases where rail 
transit is necessary is where you have job centers with 
hundreds of thousands of jobs, and those are extremely rare. 
There are only four or five of those job centers in the 
country.
    So I propose that Congress abolish the New Starts system 
process, take the money that is going into that fund and put it 
in a formula fund that is given to transit agencies based on 
how many riders they carry or how much fares they earn each 
year. That way transit agencies can use the money to build rail 
transit if they want to, but they will be rewarded for 
increasing transit ridership. And I think that is the goal of 
transit, not to spend lots of money and earn money for 
contractors and engineering and design firms.
    Thank you very much.
    Mr. Petri. Thank you.
    Thank you all for your testimony. We have about a half an 
hour or so until we will have to leave for votes, and so I will 
try to be brief in my questioning. I hope other Members will be 
as well and it may give everyone a chance. Otherwise it will be 
an hour before we come back. So maybe we could finish up on 
this and submit questions for the record also for written 
response from the panel.
    I would just like to ask a two-part question of anyone on 
the panel who cares to respond. And it is, should the New 
Starts program include incentives for transit agencies that 
deliver projects early and under budget and should it contain 
penalties for cost or schedule overruns?
    And secondly, the current authorization allows up to 80 
percent Federal funding. No project, as I understand it, gets 
actually more than 50 percent. Would it make sense to adjust 
that number down to a more realistic level?
    Would anyone care to respond on one or both parts of that 
question?
    Mr. Rogoff. I will take the first stab at it. I am sure the 
other panelists might have views on it as well, sir.
    I would argue that there already is an incentive for 
projects to finish early and under budget. That is because we 
are in a cost-sharing mode. We, as you pointed out, for the New 
Starts programs roughly provide half the cost or less. And 
generally we see a trend that if a project is finishing early, 
they are also likely to be under budget, and projects that 
finish late have a higher propensity to be over budget.
    So the sooner they can finish the project, assuming that it 
is done to spec, they can not only provide service to the 
public quicker, which is obviously their whole goal in the 
first place, but they also get to enjoy 50 percent of the cost 
savings. So 50 percent of savings would accrue to FTA, but 50 
percent, obviously, or more if it is an overmatch program, 
would accrue to local political leaders to either put into 
other transit projects or other local needs. So I think the 
incentives are already there.
    As for changing the percentage, this has always been a 
longstanding debate over the fact that major highway projects 
are often 80-20, 80 percent Federal and 20 percent local, 
whereas we are in a 50-50 posture in our New Starts program. We 
do have some 80-20 projects that are much smaller BRT projects.
    My concern with making it an 80 percent federally funded 
program is it will just dramatically shrink the number of 
projects we can fund, and we have a pipeline that is very 
robust and a lot of cities waiting at the door, and some rural 
areas as well. So as much as I would love to be on parity with 
highways, I also want to have the head room to get to those 
cities and work down our pipeline and build those projects.
    Mr. Hughes. Mr. Chairman, can I say that at Utah Transit 
Authority, its 2015 projects were concluded this year. Just 
here in 2013 we were ahead of schedule, and we saved the 
taxpayers $300 million in terms of coming under budget.
    I think that anything that can be done as the things that 
are mentioned, being able to leverage dollars that you are able 
to save into other projects, is certainly a great motivator. We 
know in Utah Transit Authority it can be done, and I think it 
builds confidence for constituents when they see that we are 
good stewards of the tax dollar and being able to leverage 
those dollars to be able to do further projects and legitimize 
what we are doing.
    What you don't want to do is say we need a tax increase or 
we need to find an increased local option because it is not 
working or we need to make it better. It is a terrible 
narrative. So anything that I think is built around being 
efficient, being quicker at doing it, coming in under budget, 
and allowing your transit authorities to do it that way, to be 
able to leverage those dollars further, is the best approach.
    Mr. Petri. All right.
    Ms. Napolitano.
    Mrs. Napolitano. Thank you, Mr. Chairman.
    President Claypool, some would argue that Core Capacity 
projects should not be eligible under the New Starts program 
and such upgrades should be undertaken with a state-of-good-
repair or other FTA formula funding. Given your regular program 
of projects, should CTA be able to undertake projects to 
address capacity constraints with your regular capital funds?
    Mr. Claypool. Yes. The purpose of New Starts, obviously, is 
to increase ridership. And as I indicated in my testimony, the 
potentially 130,000 additional riders, almost doubling our 
capacity on the Red line, would be right at the top of the 
charts if you look at any of the proposed New Starts in the 
pipeline right now. So it achieves the same objective, but what 
it does is it leverages the existing infrastructure of a mature 
agency, which makes it more efficient, makes it smart growth. 
And actually is, I would say, based on a conservative 
principle, that taxpayers have already built that. Let's 
leverage it to actually grow capacity that is there and the 
latent demand that is there. And we clearly have evidence of 
that in Chicago as we are leaving people on platforms.
    So we are grateful for the opportunity. We think it was a 
farsighted piece of legislation that recognizes that the growth 
of Core Capacity and expanding ridership is no different than 
growing it in another way in terms of the objectives, but it is 
more efficient and effective, and especially in a large system 
where we already have a significant ridership base.
    Mrs. Napolitano. Thank you.
    And, Administrator Rogoff, some critics of making Core 
Capacity projects eligible under the New Starts argue that 
these projects take away from the chief purpose of New Starts. 
And as I stated in the opening statement, adding capacity 
through the most beneficial projects should be the goal of New 
Starts, regardless of whether the capacity comes in the form of 
new systems, an extension or expansion of existing systems.
    Do you agree with this view and has FTA received inquiries 
or expressions of interest from transit agencies other than 
Chicago seeking this funding?
    Mr. Rogoff. We have certainly received inquiries. We have 
also had a project submitted from New York that was 
subsequently pulled back by mutual agreement because they were 
obviously overwhelmed with Hurricane Sandy recovery. But they 
expect to resubmit it shortly. And it is very noteworthy 
because it is the E Line that runs from Queens all the way to 
the World Trade Center. It serves 375,000 people a day. And 
they estimate it to get something like 13 percent capacity 
enhancements above the 10 percent requirement for Core 
Capacity. So you are talking about leveraging something 
approaching an additional 50,000 riders a day. And as Forrest 
pointed out, that would compare more favorably than almost 90 
percent of the New Starts projects we have.
    So in short, Ms. Napolitano, yes, we have expressions of 
interest from CTA and others. But I agree with Mr. Claypool, 
and that is our goal for the program is to generate 
opportunities for ridership. That can be in a new city, it can 
be in an existing city. Our goal is to provide the 
opportunities where the demand is, and we are agnostic, 
frankly, whether it is a Core Capacity project or a New Starts 
projects.
    Mrs. Napolitano. Thank you, sir.
    And I certainly wanted to say to Mr. Coleman, 
congratulations on your election to the National League of 
Cities. I have been there before. So congratulations, sir.
    Administrator Rogoff, you state in your testimony that the 
New Starts program is at a crossroads based on increased demand 
from local sponsors for project funds while Federal funding for 
the program has been relatively flat in recent years and cut in 
2013 due to sequestration. But if the program funding level is 
not increased, what can FTA do to fairly distribute those 
limited funds if the program is oversubscribed?
    And secondly, do you have any ideas for or the authority to 
guide or prioritize project selection if you don't have enough 
funds to sign the grant agreement with qualifying projects in 
any given fiscal year? And add to that another question that I 
was thinking of sharing with Chairman Petri, is public-private 
partnerships.
    Mr. Rogoff. Well, let me just say that we would not be in 
the predicament we are in, obviously. The administration, and 
we have gotten strong support up and down the administration, 
including the White House, to request additional funds to 
accommodate the pipeline we have. The crossroads that I cite 
really relates to the fact that rather than get the increased 
funds that we sought for the last fiscal year, we got a freeze 
of the CR and a sequester below that, and that left us some 
$400 million behind. That basically cut off our opportunities 
to ask for money for new projects. It also required us to 
reduce the funds that we had already committed for 2013 to 
existing full funding grant agreements, some of which are 
represented here in the room, including Mayor Coleman's 
project.
    We have sought not to do any presumptive feeling, 
presumptive assumptions as to where 2014 is going to come out. 
Perhaps the agreement reached last night will provide for a 
more normal appropriations process that will allow the 
Appropriation Committees to prioritize going forward. I think 
that is what we need in order to be able to keep pace with the 
demand of projects as they are coming to us.
    But in short answer to your question, no, we have not 
decided that we are going to insist on a higher local match. 
Public-private partnerships certainly have an opportunity to 
help us work through these projects, but, importantly, they are 
not a panacea. We are already only paying 50 percent of the 
project, so I haven't seen many public-private partnerships 
come in to say that they want to fund 80 percent of the 
project.
    Mrs. Napolitano. Thank you, Mr. Chair, for your indulgence.
    Mr. Petri. Thank you.
    Of course, we all know we are facing a fiscal cliff that 
could result in a cut of as much as 80 percent for the next 
year if we don't figure out how to fill in the hole and provide 
the level of funding we have had in the past in the future. 
But, anyway, that affects transit and highway and the whole 
program.
    Mr. Rogoff. Absolutely. This happens to be a general-funded 
program rather than a trust-funded program, which is why it was 
sequestered. But you are absolutely right, absent a trust fund 
fix, we are going to have a nightmare across transit across the 
country.
    Mr. Petri. Let's see. Mr. Williams.
    Mr. Williams. Thank you, Mr. Chairman.
    And I want to thank all of you for being here today. 
Appreciate that. And I must fully disclose I am from Texas and 
I-35 is in my district, and I am a car dealer, but I believe in 
optional transportation. So thank you all for being here.
    My question to you, Administrator Rogoff, would be pretty 
simple. We have touched a little bit about that. But should our 
transit providers in Texas be concerned that the FTA will focus 
on, with the scarce resources we have, going to focus on the 
larger projects at the expense of the smaller projects that may 
not be built without the assistance of the Small Starts 
program? Because in Texas we are kind of new at this.
    Mr. Rogoff. Well, not so new.
    Mr. Williams. Well, we have got Dallas and Houston.
    Mr. Rogoff. Right. And they are making good progress. But 
we are also building bus rapid transit in El Paso. We have done 
some great bus improvements in Brownsville. I have been to all 
these places. And we are actually seeing, I think, some 
visionary thinking on the part of TxDOT, which hasn't always 
been there as far as transit investments, in places like San 
Antonio.
    So I think the short answer to your question, no, sir, I 
don't think they should have any reason to be concerned. I 
think they share the same concern that everyone else has, and 
that is absent recognition of the funding request in the 
President's budget, it is going to be hard for us to make 
progress on projects, whether they are the big projects or the 
small ones. And we have requests for Small Starts in our 
budget. We are going to continue going forward. Those are game-
changing investments for some of those communities. And we are 
as vociferously supportive of those as the large projects.
    Mr. Williams. We just want it make sure the small don't get 
choked out by the big ones.
    Mr. Rogoff. We have no interest in seeing that. And, 
frankly, with the goal of growing transit ridership and meeting 
demand around the country, and you heard me say in my opening 
remarks the reference to the growing number of elderly, giving 
those smaller communities with high concentrations of elderly 
some opportunities for folks to stay at home and still have 
mobility around their community, to shopping and church, is as 
critical to us as the big city projects.
    Mr. Williams. Thank you. The second part of my question is 
the Core Capacity improvement program appears somewhat to me 
that most of the providers in Texas are not going to be able to 
be eligible for them. Do you have a plan to ensure that our 
States with developing systems that are, again, somewhat new to 
this, are afforded the same consideration that others, i.e., in 
the Northeast and Chicago? See, everybody from Chicago is 
moving to Texas, and that is the problem we have got, see? But 
is there a plan, though, to include everybody in it?
    Mr. Rogoff. Yes. We will be coming out with our rulemakings 
on Core Capacity consistent with MAP-21. But, importantly, I 
would not presume that the providers in Texas are not going to 
be able to participate, and here is why. The real threshold 
requirement to participate in Core Capacity is an improvement 
to an existing system that is going to grow capacity by 10 
percent or more. Given the way light rail has taken off in 
Dallas and how quickly they have exceeded their ridership 
expectations, I don't know that they will not be interested in 
the program. I have not had this conversation with Gary Thomas. 
But I think if not in the near term, in the not too distant 
future, as Houston continues to grow, as Dallas continues to 
grow, they could have eligible projects and will want to 
participate.
    But I think there is a misnomer out there that Core 
Capacity is just about old legacy systems and is about bringing 
them into a state of good repair. The statute states clearly, 
MAP-21 states clearly, that these are not for state-of-good-
repair investments, they are for capacity improvement 
investments, and we are going to be very clear about that and 
transparent about that as we evaluate these projects.
    Mr. Williams. Well, that is important because we have got 
tremendous grown, we are new systems, and we want to make sure 
we have got a dog in the hunt.
    Mr. Rogoff. We will be there.
    Mr. Williams. We appreciate it very much. Thank you all.
    I yield back.
    Mr. Petri. Ms. Kirkpatrick.
    Mrs. Kirkpatrick. Thank you, Mr. Chairman.
    Administer Rogoff, I want to thank you for your strong 
support of the Tucson streetcar and your recent efforts to 
assist the city to make sure that it opens on time. I hope you 
will continue to keep me and Representatives Barber and 
Grijalva advised as to next year's opening. So I thank you for 
that.
    Mr. Rogoff. We are working on it. I just spoke with Mayor 
Rothschild over the weekend about this and we are working to 
try and get streetcars out there so by the time the beginning 
the school year comes to U of A they will have operating 
service. We are working on it.
    Mrs. Kirkpatrick. That is great. Thank you.
    I have three questions. My first question is about MAP-21's 
57 percent cuts in bus and bus facility funding. What have been 
the impacts of those cuts and what are you hearing from your 
grantees?
    Mr. Rogoff. There is a lot of concern about this, and this 
was an area where the President's budget versus the budget 
outline that came out in MAP-21 differed quite substantially. 
In our budget, we did propose to fold the discretionary bus 
program into what we called the State of Good Repair program, 
for which bus operators would be eligible.
    What MAP-21 does is it took part of that funding, put it 
into a state-of-good-repair formula program that was for rail 
operators only, and then took other parts of that money and 
spent it else where. And as a result the bus-only operators 
really did take a funding hit. I suspect it will be something 
that we will be revisiting in our budget and really might want 
to be revisited in the next iteration of MAP-21.
    We need to remember with all this excitement about rail, 
the majority of transit trips in America are still taken by 
bus, and some of those bus operators now are really not going 
to have a kind of funding stream that will allow them to 
address some of their biggest investment needs, those big one-
time items like a new maintenance facility, a new intermodal 
center. They may have enough money to replace their fleet, but 
nothing else, and that is something we probably need to address 
in the next reauthorization.
    Mrs. Kirkpatrick. Exactly. Thank you.
    My second question is do you favor distribution by formula, 
distribution based on meeting elevated performance measures 
like small transit-intensive cities, competitive distribution, 
or a combination of all three, and why?
    Mr. Rogoff. Well, while we are still working on this 
internally in the Department in terms of what the next 
reauthorization should look like, I think it is important, what 
we really want to tackle is the problem that I identified 
before. And that is how does a bus operator, how are they able 
to tackle those large investments that are not something they 
are going to have to cover every year, but at a certain point 
the maintenance facility needs to be replaced, at a certain 
point other investments, like converting to cleaner natural gas 
buses or even electric buses are going to have one-time 
substantial costs. And we want to be able to make sure there is 
a funding stream that they could partner in to do that.
    As for performance measures, that is something that the 
administration is interested in across the board. We have not 
necessarily tackled it specifically to the question of 
incentives for capital operations of a bus-only operator, but 
it is certainly something we would be interested in having a 
dialogue about going forward.
    Mrs. Kirkpatrick. Thank you.
    My last question is what funding do you anticipate coming 
available for reappropriation due to grantees not being able to 
obligate funds as expected? How will those funds be 
reappropriated?
    Mr. Rogoff. Well, when funds become available--there are 
some funds that lapse back, there are some, frankly, old 
earmarks that never got off the ground--we try to put that back 
in the programs for which they are eligible. So you will see in 
the President's budget request for this year, for the New 
Starts program in fact, the program we are talking about, we 
have about, I believe it is $151 million that we are asking to 
regenerate from old bus funding that didn't get used into bus 
rapid transit requests for the New Starts program.
    So if you will, we are sort of buying down some of our 
liabilities there with unused money before we ask the committee 
for new money. And I suspect that we would continue that trend 
as funds became available.
    Mrs. Kirkpatrick. Thank you again. I thank all of the panel 
for your testimony today and for answering the committee's 
questions.
    And, Mr. Chairman, I yield back.
    Mr. Petri. Thank you.
    Mr. Capuano.
    Mr. Capuano. Thank you, Mr. Chairman.
    Mr. Rogoff, have I told you how brilliant your testimony 
was? As a matter of fact, did you lose a little weight? Because 
you were brilliant today. You were great today. By the way, 
have you taken a look at that Green Line extension?
    Mr. Rogoff. If it isn't plainly apparent, there are things 
that Mr. Capuano wants from the Federal Transit Administration. 
We have taken a hard look at the Green Line project, as you 
know. It is in our funding pipeline. Let me just say that the 
greatest breakthrough, I think, not just for the potential for 
the Green Line project, but also for reinvestment in the T 
system broadly, was Governor Patrick successfully getting a 
funding package out of the State legislature. It was a game-
changing package. It enables us now not just to evaluate the 
Green Line, but as we have discussed before, evaluate the 
critical ability of the T to reinvest in the lines that it is 
already operating in a deteriorated state, the Red Line and 
others, that really need reinvestment.
    And we expect to have meetings with Bev Scott up at the 
MBTA. We are currently evaluating the Green Line project as 
part of our annual evaluation. That hopefully would play into a 
consideration for the 2015 budget request. But importantly, we 
are also going to be having a conversation with the MBTA about 
their newfound ability to reinvest in the lines that they need 
to reinvest in.
    Mr. Capuano. I appreciate that. I know you guys have been 
great to us and fair to us in many ways. By the way, for the 
rest of you, I also want to comment that a few years ago Boston 
had a project that we withdrew--actually you rejected, it was a 
New Starts project--because it didn't meet the requirements. 
And it was a great project, like I have not seen a project I 
didn't like, but it just wasn't financially viable. So it was 
kind of kicked out politely by the FTA and agreed to by the 
State because we all agreed to it, and we have added BRTs.
    Mr. O'Toole, I want to tell you that I read your testimony 
in particular, and I was particularly pleased at the end of it 
where you didn't say cut the program and send the money back. 
You said cut the program and send the money back towards 
transit, which means, to me, we may have a difference of 
opinion on how to do these things, but I wouldn't consider you 
antirail when you say simply move the money to other aspects. 
Because I will tell you that in my experience in Boston there 
just isn't enough money to do capital expansions, capital 
improvement, ongoing improvement, reduced fares, on and on and 
on, to actually increase ridership. And my expectation is that 
the same is true everywhere.
    But I would like the hear that, especially from you, Mr. 
Claypool. Do you have enough money to do everything you think 
should be done at the CTA?
    Mr. Claypool. Absolutely.
    Mr. Capuano. You don't want that on record.
    Mr. Claypool. No.
    Mr. Capuano. I know you don't want that on record.
    Mr. Rogoff, did you hear that?
    Mr. Claypool. I was expecting peals of laughter and it 
didn't come, so I apologize.
    No, absolutely right. And obviously local governments do 
welcome no-strings-attached funding, because, you know, as 
Jefferson said, the government closest to the people governs 
best. But, obviously, we have a close working relationship with 
the FTA and Mr. Rogoff and others. It has been a great working 
relationship. And the partnership in all our major projects has 
been sharing between local, city and State. So everyone has had 
skin in the games in almost all of our major projects, so it 
has actually worked very well.
    But, yes, you are absolutely right that there is simply not 
enough resources to meet the demands that we have to catch up 
on some of the legacy repairs that need to be done and meet 
what is still there. Every year the demand grows in the strong, 
vibrant cities around the country like Chicago that are 
economic engines, and this is a big part of that economic 
engine.
    As some of the CEOs that have come to Chicago said so, GE, 
Google, they said, we have moved in here with our people to be 
near these corridors of transit. That is why we have come here. 
So it is part of jobs, it is part of growth, it is part of 
wealth creation. There is plenty of room for additional 
investment in that area for sure. Thank you.
    Mr. Capuano. I appreciate it. Thank you.
    My time is almost up, so I am going to yield back. Thank 
you, Mr. Chairman.
    Mr. Petri. Thank you.
    Mr. Capuano. Mr. Rogoff, don't forget I told you how good 
looking you were today.
    Mr. Petri. Mr. Sires.
    Mr. Sires. Thank you, Mr. Chairman.
    I also think you look terrific. And I have a question. I am 
going off topic here.
    You know, it has been a year since Sandy hit New Jersey, 
and I was just wondering if you can give me an update, when are 
you going to start releasing some of the $3 billion funding for 
transportation resiliency programs that we have on tap?
    Mr. Rogoff. Sure. Well, as you know, Mr. Sires, we have 
already released $5.4 billion; $1.3 billion of that is for 
resiliency, which we sent to the agencies by formula, which 
includes New Jersey Transit, of course, as well as the MTA and 
the Port Authority.
    We are, as we testified I think just a few weeks ago, we 
are currently developing and noticing a funding availability. 
We stated then that we will get it out before the end of the 
calendar year, and we are still on track to do so. So the best 
answer I can give you is soon, because I don't have a hard date 
for you, but we have been in meetings to review that document 
and hear from stakeholders within the last week. So progress is 
being made, and it will be soon.
    Mr. Sires. Thank you.
    You know, I have been involved in light rail where I am 
from, very congested area. Just to give you an idea, the town 
that I live in is 1 square mile, There is 51,000 people in it. 
Hoboken, New Jersey, is the next town over almost, it is about 
52,000 people, it is also a square mile.
    My experience with the light rail is very different than 
Mr. O'Toole's. So I was just wondering if you can tell me what 
your experience with light rails in terms of economic 
development around the area where the light rail goes through, 
because my experience in the area is terrific. We have a light 
rail that moves about 45,000 people a day in this area, and, 
you know, like I said, it is so congested.
    So, I was just wondering, Mayor, and I was a former mayor, 
too, so I can share some of your experience, both of you guys.
    Mr. Hughes. I would love to take a stab at that. You are 
absolutely right. We have a new streetcar opening that 
Administrator Rogoff attended. It was about, what, 12 degrees 
up there, and we had a city councilman that had a lot to say.
    Mr. Rogoff. And windy.
    Mr. Hughes. And it was getting pretty chilling at the 
opening.
    But anyway, we have had a billion dollars of development 
that is going around this corridor. And when we talk about 
subsidy versus not, you have to appreciate this. When you have 
a platform, when you have rail, OK, the one thing that you may 
see that communities like myself or the one that I live in 
would subsidize is the parking or the structured parking where 
you can't afford to see the footprint go a quarter of a mile of 
asphalt to accommodate the cars. You may have to preserve that 
footprint by structuring your parking.
    Structured parking in finite areas is infrastructure. I 
would argue that that is as essential as your curb and gutter. 
You don't have the market values like you would in a Manhattan 
or a populated area where the dirt pencils out the structured 
parking. So there is that portion of it.
    But again, if you want to see the people moving, and I 
chair our Public Education Committee in our State legislature, 
or have, these technology natives, the emerging workforce, and, 
frankly, that is what we are here for, we are looking at the 
future here, they prefer to commute in ways where they can stay 
connected. It is a qualify-of-life issue. These stops where 
this development is naturally drawn, we are just trying to 
accommodate it through smart infrastructure. But it has become 
a catalyst for development.
    Mr. Coleman. Mr. Sires, thank you for the question. We are 
6 months away from the opening of our line before the first 
passenger fare is paid on that line, and we have already seen 
$1.2 billion worth of investment on it; 7500 units of housing 
that are planned are already under construction.
    But even beyond the bricks and mortar, the change in what 
is happening in that community in terms of who is coming to it, 
the demand for housing, the vibrancy of that, the restaurants 
that are opening up, the restaurants and the businesses that 
are reinvesting in their businesses, we have had a very 
expansive bus service through this corridor for 40-plus years 
since they tore out the streetcars and built the freeway, but 
we never saw this type of investment. We had 40 years of 
disinvestment.
    And what we are seeing is a revitalization. And it is not 
one that pushes people out and puts new people in place. It is 
a revitalization that is truly lifting all boats, as well as 
bringing in new investment. So whether you are a new immigrant 
or you are a multigenerational resident of the area, you are 
seeing the benefits of this line long in advance of it actually 
opening up.
    Mr. Sires. My time is up. Thank you very much, Mr. 
Chairman.
    Mr. Petri. Thank you.
    Mr. DeFazio.
    Mr. DeFazio. Thank you, Mr. Chairman.
    It has been a while since I visited the CTA, Mr. Claypool. 
What is your current backlog of deferred maintenance, you know, 
capital that is past its lifespan.
    Mr. Claypool. There are some figures from the regional 
transit authority, which I think are exaggerated, so I don't 
want to cite them. But clearly it is in, you know, the billions 
and billions of dollars. Currently under Mayor Emanuel we have 
launched the most ambitious modernization and State of Good 
Repair program in the CTA's history, $4 billion in a 5-year 
period, and we are well on our way to bringing our system up to 
a state of good repair.
    It is going to take a number of years. It is going to take 
a lot of money. And, frankly, we can't do that and also meet 
the ridership demand and the growth opportunities that we have 
without the assistance of the Federal Government through this 
program, and that is why it is so critical.
    Mr. DeFazio. OK.
    Mr. Rogoff, what is the national number we have now. I 
haven't seen that for a while either.
    Mr. Rogoff. Well, we were at about $87 billion.
    Mr. DeFazio. Eighty-seven ``B'' billion?
    Mr. Rogoff. That would be a billion with a ``B.'' Excuse 
me. I transposed my digits, I think. It was $78 billion.
    Mr. DeFazio. OK.
    Mr. Rogoff. But we, obviously, even with the investments we 
are making with our new State of Good Repair program, and 
importantly to point out some leadership by the States that are 
raising revenues to reinvest, we still are growing more than we 
are buying down the backlog since we published that number 
probably 3 years ago. We have not updated the number. It may be 
time to do so, and I will take that back because we should 
probably have more updated numbers for you.
    Mr. DeFazio. OK. I want to thank you for the work you did 
early on in tightening up some of the Buy America requirements, 
and I would observe that were we to make those investments we 
would create one hell of a lot of jobs.
    Mr. Rogoff. We are very proud of, when we were first coming 
into office having almost 53 Buy America waivers a year, and we 
are now down to 3, and we are not happy about the 3.
    Mr. DeFazio. Yeah, we want to get to zero, but that is 
great.
    Mr. Rogoff. Our goal, too.
    Mr. DeFazio. We will get people working on it.
    You know, I think the chairman brushed on this, but I would 
really like to focus a moment. Looking at the exhaustion of the 
trust fund in fiscal year 2015, if Congress come up with new 
sources of money before October 1st next year, what would that 
do to the transit programs?
    Mr. Rogoff. Well, the vast majority of our funding, some 80 
percent of it, unlike the New Starts program, comes from the 
trust fund. And we obviously cannot be obligating dollars to 
the Nation's transit agencies without having cash behind them. 
We have processes in place on how we would seek to manage cash, 
but I think it is important for folks to understand our agency 
used to be called the Urban Mass Transit Administration up 
until ISTEA in 1990, and people kind of view it as an urban 
program.
    The reality is, is that the Federal dollars are much more 
critical in terms of a percentage of their total annual budget 
to the suburban and rural operators than they are to the 
biggest urban systems. Now, if we had to allocate a cut 
consistent with no restoration of the trust fund to cities like 
Chicago and Minneapolis, it would have a very big hit, but to 
many of the, like I said, suburban, exurban, and rural 
operators, the Federal money is 100 percent of their capital 
budget. And the Federal money in a lot of those communities 
also pays for transit operations. So we could see whole 
operations close their doors if there was literally no 
restoration and we really did fall off the cliff that Chairman 
Petri was referring to.
    And right now we are taking a very careful look at when 
this scenario actually hits. We are hopeful but not at all 
assured that we are going to get to 2015, and we are currently 
reviewing those numbers to figure that out.
    Mr. DeFazio. So it might happen before fiscal year 2015?
    Mr. Rogoff. We are currently looking through the numbers, 
but if we get to 2015 it will be on fumes.
    Mr. DeFazio. OK. Fumes.
    Thank you, Mr. Chairman.
    Mr. Petri. Mr. Nolan.
    Mr. Nolan. Thank you, Mr. Chairman. And I want to join the 
other members of the committee in thanking the panel for being 
here today.
    And I particularly want to thank and congratulate Mayor 
Chris Coleman from St. Paul for the work that you have done in 
the Central Corridor light rail and pointing out to the 
committee the tremendous economic benefits that have flowed 
from that, not to mention the fact that the quick and easy 
availability of an alternative transportation mode for some 
44,000 people.
    In the interest of keeping pace with Mr. Capuano, we will 
be counting on you, as well as you, Mr. Rogoff. We have got 
what is known as our Northern Lights Express that we are 
planning to take the people from the Twin Cities metropolitan 
area up to our shining city by the sea and great seaport of 
Duluth, as well as the North Star heading up through the 
tourism areas of the northern part of our State.
    And I remind all here that the interstate system and the 
Federal-State highway systems going north out of the Twin 
Cities metropolitan area, as well as the rest of the 
metropolitan, are rapidly becoming slow-moving parking lots. 
And the fact is, is that we need to get very, very serious here 
about exploring and finding more ways to better fund light 
rail, and for that matter heavy rail passenger transit in this 
country.
    So I commend you, as well as Mr. Hughes and Claypool, for 
the work that you are doing, and rest assured that the 
majority, I believe, members of this committee on both sides of 
the aisle here appreciate the work that you are doing and are 
committed to finding more ways to provide some efficient, 
stimulative, pro-growth, job-creating, convenience-creating 
alternatives to our Federal-State highway system. So I thank 
all of you.
    And, Chris, you in particular, we are so thrilled that you 
are now leading the National League of Cities and taking the 
great leadership that you have provided in our capital city of 
St. Paul and our Twin Cities metropolitan area and sharing that 
with other mayors around the country. Thank you for being here.
    Mr. Coleman. Thank you, Congressman Nolan. And I appreciate 
those comments, but I also appreciate your kind of thinking 
about the weekly exodus from the Twin Cities to parts of not 
only northern Minnesota, but for the chairman's benefit, a lot 
of my weekly paycheck goes to the great State of Wisconsin as a 
cabin owner in northwestern Wisconsin and a father of a 
University of Wisconsin student. I feel actually I should be a 
mayor of some town in Wisconsin just honorarily at the very 
least. But it does create a huge problem as we really try to 
figure out how to expand that economic reach into all parts of 
the State and really the region, including western Wisconsin, 
because we are getting congested in every different direction 
from the cities.
    So I think, you know, this isn't is a single bullet 
approach. This is a multimodal approach. This is improving our 
roads. It is improving our transit systems and bus rapid 
transits and light rails and all those things. I think that the 
reason why it is working so well in the Twin Cities area is 
because there is a recognition that a true multimodal transit 
system is the best way that we are going to serve all of our 
interests.
    Mr. Nolan. Thank you
    Mr. Petri. Ms. Esty.
    Ms. Esty. Thank you, Mr. Chairman.
    I want to thank the panel for being here today.
    As we look towards the reauthorization of MAP-21, it is 
important for us to consider the current status of the New 
Starts program in order to improve performance in the years 
ahead. The FTA has full funding grants authority on 17 projects 
and one of those is in my district in New Britain, Connecticut. 
Those agreements represent approximately $14 billion in funding 
commitments, but the New Starts program was appropriated 
slightly less than $2 billion. Furthermore, the funding for 
these projects is doled out in predetermined annual amounts, 
and depending on variabilities and construction schedules, this 
can leave projects without adequate funding when it is needed, 
which then ends up raising the cost of projects by forcing 
sponsors to borrow money to make up the funding difference.
    For Administrator Rogoff: Is there anything that we can do 
here in Congress to improve project coordination and funding 
flexibility to prevent the kind of scenario I just outlined 
where we are actually raising the cost of projects? And are 
there any unnecessary restrictions that prevent the FTA from 
expediting review and analysis of spend work plans to maximize 
construction time and improve performance?
    Mr. Rogoff. Well, thank you for the question. We are 
dismayed, obviously, that in 2013, for the first time in 
anyone's memory, we were not able to provide the amounts 
articulated in our full funding grant agreements. It is ironic, 
people, project sponsors have complained of the extraordinary 
rigor and requirements that we put on project sponsors to 
demonstrate to us that they can pay their share of the project. 
So what has happened in 2013, is the FTA that can't pay its 
share of the agreement. And we obviously want to get back on 
track with not only our existing agreements, but the ability to 
bring more projects into the program.
    The solution to that, from our perspective first and 
foremost, is to fund the President's budget for the program, 
and that will go a long way toward getting us back on track.
    As far as the processing of projects, we have already done 
a good bit, both when we first came in, in 2009, on 
streamlining our processes, and then MAP-21 helped a lot, 
because there were certain streamlining measures that we really 
couldn't entertain because the process was fixed in statute, 
and MAP-21 went a long way to doing that.
    Now, are there opportunities for yet more streamlining and 
efficiency? Yes. In fact, I just cited one in my oral remarks. 
We have recently, just in the last couple of months, put out a 
new planning tool for forms of travel forecast modeling, which 
we require of all the sponsors to really show us that the 
ridership is going to be there. Earlier, I believe, actually 
Mr. O'Toole was talking about consultants. Well, normally, 
transit agencies have to pay these consultants quite a lot of 
money do a very voluminous study to forecast ridership numbers. 
We believe that the model that we have now come up with is 
certainly adequately accurate for our purposes and could take 
anywhere from a year to 2 years off just that requirement 
alone.
    Earlier, when I first came into this job, the FTA had an 
alternatives analysis process that was separate and distinct 
from the NEPA-required alternative analysis process. There was 
no need to have those duplicative processes, and we got rid of 
it.
    So progress is being made. There is more progress yet to be 
made. But we share your desire to move projects through 
pipeline more quickly. We need there to be funding at the other 
end to participate.
    Ms. Esty. I think we can agree on that. And again, we 
appreciate your work on leaning these processes, so more of 
these funds, which are more limited than we wish they were, 
really are getting on the ground, making a difference in 
communities. And I think we are all very well aware. I was 
meeting with folks at home last week, and the folks in the 
construction industry were saying they are looking very 
seriously at transit-oriented development for our smaller 
cities in Connecticut because for the demographic reasons we 
have talked about. Young people want to live in cities. They 
don't want to drive cars. I have three of such young people, 
and, you know, only one has a car and it is 14 years old, and I 
don't think there will be a replacement when that dies.
    And that really is different. And we also have an aging 
population. For both of those populations it is going to be 
vitally important that we explore all ranges of transit and 
include things like light rail, make it more possible, buses, 
light rail, metro systems, to make it possible for people live 
where they want to live, including in our cities, and get to 
other cities without cars. So thank you very much for your 
work.
    Mr. Petri. Thank you. We have a little time, and I have a 
few questions. If anyone else wants the opportunity, please 
indicate so as well.
    I have two questions, one for Administrator Rogoff and then 
one for the representatives of the different transit 
operations. Congress added Core Capacity projects to New Starts 
eligibility and specifically did not increase the amount of 
money authorized. So how will the FTA balance this new category 
of projects with the existing demands for traditional New 
Starts projects?
    Mr. Rogoff. Well, Mr. Chairman, we have actually requested 
more funding in the budget than is authorized, in part, and the 
President, in his ``fix-it-first'' initiative, included a large 
element, about $500 million, to really jumpstart the Core 
Capacity program. And the ``fix-it-first'' initiative, it was 
not bound by those authorization levels. We, obviously, as is 
existing in a number of areas within the transportation budget, 
not just the FTA, there is a difference between the authorized 
levels in MAP-21 and the actual budget request. I think this is 
a critical question going forward for the replacement to MAP-
21, and that is, what is the appropriate levels for these 
programs? Especially this one, being a generally funded 
program, while it has its own challenges, and the biggest 
having been sequester this past year, it is not subject to the 
limitations imposed by the trust fund, since it comes out of 
the general fund, and we want to continue to make progress to 
accommodate not only the projects in the pipeline on the New 
Starts side, but get the very significant ridership increases 
that we could get from these Core Capacity projects in existing 
systems.
    Mr. Petri. The other question for the transit authority 
representatives is that each of you mentioned the significant 
economic developments associated with transit-oriented 
development that took place along the corridors. To what extent 
were you able to leverage that private sector investment to 
support the cost of building the projects through TIF-like 
districts or tax incremental or whatever, and what are the 
impediments to capturing that increase in value for the transit 
operations now?
    Mr. Hughes. Let me say, Mr. Chairman, I appreciate that 
question. There are barriers to entry when we talk about this. 
As I mentioned, the parking. The structured parking is one of 
the biggest challenges in terms of getting transit-oriented 
development around these platforms.
    In our case in Utah, the transit authority did not have 
condemnation authority. So when you go about purchasing 
corridor, you are sometimes buying in excess land that you 
don't necessarily need. There is probably a combined 80 acres 
of land around these platforms that could be used and parlayed 
into development. This would be land that right now is not on 
the tax rolls of counties or cities that we could put back on 
the tax rolls and bring development to it.
    And that is what you have seen, and I have mentioned, along 
the Sugar House line, the streetcar that just opened, we are 
seeing that happen. We have used tax increment financing, or 
counties have, to help with the structured parking, but there 
is only so much. We have talked today and I have heard that, 
you know, there is more needs than there is ever resources to 
address.
    And I think that one of the barriers we have to overcome is 
how we talk about structured parking and is it a public 
infrastructure that allows for more development to happen 
around those platforms? That is an area that we are working on. 
Because UTA has this land, we are trying to find ways to parlay 
the value of that land with public-private partnerships and see 
that draw more and more development to those areas.
    But that would be the answer. The answer is, it is there, 
and you have to have high density if you are going to do it, 
and with that high density there are some inherent costs that 
are different than maybe your traditional development that can 
afford asphalt and surface parking.
    Mr. Rogoff. Mr. Chairman, if I could just speak to that 
real quickly. We would have a great interest in having a 
dialogue with the committee on how to improve this paradigm 
going forward, because not just in New Starts projects, but in 
major transit capital improvements around the country, whether 
there is significant Federal participation or not, we are 
seeing greatly increased tax revenues without having to enact a 
tax increase because they are bringing more dollars into these 
municipalities.
    The great challenge is to get those municipalities to 
recognize that and put that money back into the transit agency 
that needs it for things like operations and maintenance of the 
line they built, and that has been a huge frustration. When we 
look at the extraordinary amount of taxable value we have 
created with these investments, there needs to be some broader 
recognition about the need to reinvest that into the system or 
we will have state-of-good-repair problems with comparatively 
new investments if we don't keep up with maintenance and 
operations.
    And that has certainly been a problem. When you think about 
a city like Chicago where Forrest Claypool is and the amount of 
value that the CTA service represents and the annual struggle 
that he has to go through to meet payroll and do all of his 
maintenance, which have been particularly acute in some recent 
years, we need have an open-minded discussion of how we can do 
better by that.
    Mr. Claypool. It is a very good question, Mr. Chairman, and 
I do think value capture, as we describe what you are 
describing, is something that is a potential in projects of 
this size and scope. As I mentioned in my testimony, the fact 
that in 2011 one-quarter of all city of Chicago building 
permits issued were within a half a mile of the Brown Line 
stations that had added Core Capacity and been improved, and 
the median home values near the Brown Line increased by 40 
percent, and that would be for commercial activity as well.
    So when a project like this does come along, we do believe 
that it creates wealth, we do believe it raises property 
values, and there is a concomitant potential for a value 
capture that could be a part of a project, including a public-
private partnership. So I think that is something we definitely 
would look at and I think individuals throughout the country 
should look at.
    Mr. Coleman. Mr. Chair, if I may add, there is the 
beginnings of a program similar to that in Minneapolis. The 
State legislature has authorized a value capture situation for 
a streetcar buildout. It is a narrow exemption right now in the 
tax increment laws. So that we are going to see how well that 
works and how well that facilitates buildout of streetcar lines 
and other infrastructure projects like that.
    But I do want to just add, you know, every time the 
representative from Salt Lake speaks, I just remember how 
jealous I am of the system that they built out there, not 
because they have the most miles or because they have these 
fancy cars, but because I see how it is transforming that 
community. And so as a mayor of a medium-sized Midwestern town 
who sees the competition that we have to attract talent, to 
attract companies, to attract our future workforce, and I see 
what Salt Lake is doing, what Denver is doing, what Dallas is 
doing, this isn't just a race to build out a fancy new line. 
This is a race for relevancy and a race for vibrancy.
    And that is the real competition that we have here. As we 
project out the economy of the Twin Cities, we have a very 
strong base of almost 20 Fortune 500 companies, but we can't 
continue to attract the talent that we need to staff those 
companies and to grow those companies unless we have the kind 
of amenities, the kind of communities that can be built through 
things like great transportation networks, as has been 
mentioned by a number of speakers, the changing nature of how 
young people commute and get about.
    So this is critically important for the future of our 
communities if we are going to be strong and we are going to be 
economically vibrant.
    Mr. Petri. Thank you.
    Ms. Napolitano.
    Mrs. Napolitano. Yes, sir.
    That brings up the question again of public-private 
partnerships. Has the League of Cities begun to look at the 
possibility of facilitating the Wall Street investors to be 
able to come in and look? And would it make any difference in 
being able to do prioritization of projects if they had 
additional funding through public-private partnerships? Since 
there is an increase in economic benefit to the areas, why are 
we not looking at being able to marry them and being able to be 
a little bit more proactive in that area? Anybody?
    Mr. Coleman. Just with respect to, Ms. Napolitano, to the 
National League of Cities, I don't know that we have begun that 
conversation. Someone from NLC can poke me if I am wrong on 
that just in terms of that kind of investment capital.
    But I think it is one of the things that has been helpful 
as the New Starts program has looked at some additional 
criteria, is to really see what the economic vitality and 
potential is and not just react to existing kind of traffic 
patterns and existing population patterns, but to determine 
whether or not, whether it is through public-private 
partnerships, with land banking, whatever it might be, whether 
there is an opportunity to say we are going to shape how our 
communities are going to grow because we are going to build our 
transit lines to certain areas.
    In my community, for instance, we are studying the River 
View corridor where one option would be move, whether that is 
BRT or some other, potentially LRT, but we are looking a all 
molds. We have an old fort site with 130 acres in the middle of 
the city of St. Paul on the banks of the Mississippi River, 5 
minutes from the airport. Right now that is vacant. So under 
traditional criteria that wouldn't, you know, obviously, meet 
ridership capacity or considerations.
    But if we start thinking about what we could create there 
if we are building transit in from the beginning of the 
conversation as opposed to at the end of the conversation, then 
it opens up a lot more desirability for that kind of investment 
and for, quite frankly, all along that corridor. So it is an 
important consideration that I think we need to look at more.
    Mrs. Napolitano. Mr. Rogoff.
    Mr. Rogoff. Well, I think Mayor Coleman has identified a 
new opportunity, and that is, there is a universe of projects 
that would not pencil out immediately in terms of Federal 
participation. Where they can have private partners that want 
to take the risk, they would certainly be most welcome. It is 
sort of betting that the development will follow.
    I will tell you that this preceded the Obama administration 
coming in, but there was a pilot program for new public-private 
partnerships in the transit space. Three projects were 
selected, but only one of them, part of the Fast Tracks 
Program, the so-called Denver Eagle projects in Denver, 
Colorado, was built. In the other two instances, the private 
players left the building because of the recession largely.
    I think it is important to recognize that at least 
traditionally in transit, where the public-private partnership 
has come in, it has been on the financing, and often on the 
financing of the local match, and there a lot of that is just 
replacing availability payments long into the future, sometimes 
from the legislature, sometimes from local taxation for local 
tax dollars that are made available more immediately.
    We have a saying in the FTA that if you have seen one 
project, you have seen one project, because it is really true 
that no two of them are alike in terms of their financing 
structure and what they are necessarily trying to achieve. We 
have been trying to be as open minded as possible to include 
public-private partnerships in having people bring their 
financing package to us. Our principle remains the same. We 
just need to know that the local financing will be there to 
match ours.
    I think, importantly, we are much more, when we evaluate 
the risk of a project, and here I mean cost and schedule risk, 
we are much more sympathetic and interested in projects where 
they really have transferred some risk to the private partner 
as opposed to having someone who is just going to come in as a 
lender and accept no risk, but might accept some of the upside 
potential. There really needs, I think, ideally to be some risk 
transference that sort of relieves the taxpayer of upside cost 
risk, and that is where we really get the benefit of the 
public-private partnership.
    Mr. Hughes. I think you are on the right track. This is one 
of the areas that I think that we could engage the private 
sector. If you look at Hong Kong, this is Communist China, they 
are paying for their mass transit through the development above 
their stations. It is an amazing sight to behold.
    The challenge is, sometimes, if you have a developer that 
said, look, I will go in half on the parking structure, I will 
go 50 percent, you go 50 percent, well, federally built parking 
structures are not necessarily the same 50 percent that a 
private developer would pay for that cement structure, and 50 
percent of Davis-Bacon and all the things required for a 
Federal project, your developer says, well, wait a minute, that 
is like 100 percent if I built that amount of stalls on my own 
at this development away from your platform.
    So sometimes we have to find out where some of the 
regulatory climate can be dealt with to keep some of those 
barriers that we have created, not intentionally, but as an 
unintended consequence. But it is absolutely critical to see 
this done in a more comprehensive way with the private sector.
    Mrs. Napolitano. Well, to me this is where the organization 
can begin looking at all those aspects and begin to put them in 
perspective so that you can then begin to do the outreach and 
get them in as partners to be able to relieve not only the 
constituency, the Federal Government, and also provide the 
service to the community.
    So, to me, we talk about it, but we are not really delving 
into it, we are not really asking them to come in and say, what 
are your rates, what do you require, what can you do, what will 
you do, and will you work in partnership with the communities 
who are trying to develop more business in the area, which is 
going to be beneficial to the local economy. So, you know, I 
had asked that you maybe keep that in mind as you move forward 
because to me that is, again, thank you, something we will be 
facing in the near future.
    Green technology, development of those green areas in the 
parking structures to be able to put in the plug-ins for 
electric vehicles, being able to help the community do all 
kinds of other things in multiuse buildings. And so there is 
all kinds of things that could come from those partnerships 
that would benefit an investor.
    So, thank you, Mr. Petri.
    Mr. Petri. Thank you. Thank you all for your testimony 
again.
    And I would ask unanimous consent the record of today's 
hearing remain open until such time as our witnesses have 
provided answers to any questions that may be submitted to them 
in writing, and unanimous consent that the record remain open 
for 15 days for additional comments and information submitted 
by Members or witnesses to be included in the record of today's 
hearing. Without objection, so ordered.
    The subcommittee stands adjourned.
    [Whereupon, at 3:40 p.m., the subcommittee was adjourned.]



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