[Senate Hearing 113-330]
[From the U.S. Government Publishing Office]
S. Hrg. 113-330
CRUMBLING INFRASTRUCTURE: EXAMINING THE CHALLENGES OF OUR OUTDATED AND
OVERBURDENED HIGHWAYS AND BRIDGES
=======================================================================
HEARING
before a
SUBCOMMITTEE OF THE
COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
SPECIAL HEARING
JUNE 13, 2013--WASHINGTON, DC
__________
Printed for the use of the Committee on Appropriations
Available via the World Wide Web: http://www.gpo.gov/fdsys/browse/
committee.action?chamber=senate&committee=appropriations
__________
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COMMITTEE ON APPROPRIATIONS
BARBARA A. MIKULSKI, Maryland, Chairwoman
PATRICK J. LEAHY, Vermont RICHARD C. SHELBY, Alabama, Vice
TOM HARKIN, Iowa Chairman
PATTY MURRAY, Washington THAD COCHRAN, Mississippi
DIANNE FEINSTEIN, California MITCH McCONNELL, Kentucky
RICHARD J. DURBIN, Illinois LAMAR ALEXANDER, Tennessee
TIM JOHNSON, South Dakota SUSAN M. COLLINS, Maine
MARY L. LANDRIEU, Louisiana LISA MURKOWSKI, Alaska
JACK REED, Rhode Island LINDSEY GRAHAM, South Carolina
FRANK R. LAUTENBERG, New Jersey \1\ MARK KIRK, Illinois
MARK L. PRYOR, Arkansas DANIEL COATS, Indiana
JON TESTER, Montana ROY BLUNT, Missouri
TOM UDALL, New Mexico JERRY MORAN, Kansas
JEANNE SHAHEEN, New Hampshire JOHN HOEVEN, North Dakota
JEFF MERKLEY, Oregon MIKE JOHANNS, Nebraska
MARK BEGICH, Alaska JOHN BOOZMAN, Arkansas
Charles E. Kieffer, Staff Director
William D. Duhnke III, Minority Staff Director
------
Subcommittee on Transportation and Housing and Urban Development, and
Related Agencies
PATTY MURRAY, Washington, Chairman
BARBARA A. MIKULSKI, Maryland SUSAN COLLINS, Maine
RICHARD J. DURBIN, Illinois RICHARD C. SHELBY, Alabama
PATRICK J. LEAHY, Vermont LAMAR ALEXANDER, Tennessee
TOM HARKIN, Iowa LINDSEY GRAHAM, South Carolina
DIANNE FEINSTEIN, California MARK KIRK, Illinois
TIM JOHNSON, South Dakota DANIEL COATS, Indiana
FRANK R. LAUTENBERG, New Jersey \1\ ROY BLUNT, Missouri
MARK L. PRYOR, Arkansas JERRY MORAN, Kansas
JACK REED, Rhode Island JOHN BOOZMAN, Arkansas
Professional Staff
Alex Keenan
Meaghan L. McCarthy
Rachel Milberg
Dabney Hegg
Heideh Shahmoradi (Minority)
Ken Altman (Minority)
Jason Woolwine (Minority)
Rajat Mathur (Minority)
Administrative Support
Dan Broder
----------
\1\ Died on June 3, 2013.
C O N T E N T S
----------
Page
Opening Statement of Senator Patty Murray........................ 1
Prepared Statement of Senator Patty Murray................... 4
Statement of Senator Susan M. Collins............................ 6
Prepared Statement of Senator Susan M. Collins............... 8
Statement of Hon. Polly Trottenberg, Under Secretary For Policy,
Department of Transportation; Accompanied by Hon. Victor
Mendez, Adminstrator, Federal Highway Administration,
Department of Transportation................................... 9
Prepared Statement of Hon. Polly Trottenberg................. 11
Restoring Infrastructure......................................... 11
Improving Our Nation's Bridges................................... 12
Infrastructure Debate............................................ 12
Meeting Future Demand and Funding Sustainable Investment......... 13
Statement of Phillip R. Herr, Director, Physical Infrastructure
Issues, Government Accountability Office....................... 14
Prepared Statement of Phillip R. Herr........................ 15
Attachment, Highlights of GAO-13-713T.................... 19
Transportation Infrastructure: Limited Improvement in Bridge
Conditions Over the Past Decade, but Financial Challenges
Remain......................................................... 19
Process of Rehabilitation........................................ 20
Government Intervention.......................................... 20
Fracture-Critical Bridges........................................ 22
Ensuring Safety of Bridges....................................... 22
Highway Trust Fund Solvency...................................... 23
Transportation Funding Issues.................................... 24
TIFIA Program.................................................... 24
Project Delivery Deadlines....................................... 26
Environmental Compliance Delay................................... 27
Cutting Delivery Time............................................ 28
Columbia River Crossing Project.................................. 30
Long-Term Infrastructure Investment Priorities................... 31
Bridge Inspection Procedures..................................... 32
Addressing Critical Corridors.................................... 32
Departmental Approach............................................ 33
MAP-21 Transition Challenges..................................... 33
Oversize Load Permits............................................ 35
New Technologies To Improve Safety............................... 36
Additional Committee Questions................................... 36
Questions Submitted to Hon. Polly Trottenberg.................... 36
Questions Submitted by Senator Patty Murray...................... 36
Questions Submitted by Senator Richard J. Durbin................. 37
Highway Public-Private Partnerships.............................. 37
Highway Public-Private Partnerships and Excess Toll Revenue...... 38
Non-Compete Clauses.............................................. 39
Question Submitted by Senator Tim Johnson........................ 39
Questions Submitted by Senator Mark Kirk......................... 40
Questions Submitted to Phillip R. Herr........................... 42
Questions Submitted by Senator Richard J. Durbin................. 42
CRUMBLING INFRASTRUCTURE: EXAMINING THE CHALLENGES OF OUR OUTDATED AND
OVERBURDENED HIGHWAYS AND BRIDGES
----------
THURSDAY, JUNE 13, 2013
U.S. Senate,
Subcommittee on Transportation and Housing
and Urban Development, and Related Agencies,
Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:19 a.m., in room SD-124, Dirksen
Senate Office Building, Hon. Patty Murray (chairman) presiding.
Present: Senators Murray, Collins, and Boozman.
opening statement of senator patty murray
Senator Murray. This subcommittee will come to order. And
today we are going to hear from three witnesses, two from the
Department of Transportation, Polly Trottenberg, the Under
Secretary for Policy, and Victor Mendez, Administrator of the
Federal Highway Administration. And our third witness is here
from the Government Accountability Office (GAO), Phil Herr,
Managing Director of Physical Infrastructure Issues.
Before we get started, I just want to mention that I just
got off the phone a bit ago with Secretary Ray LaHood. He had
some great news from my State and told me that the Department
of Transportation is releasing the rest of the emergency funds
needed to repair the Skagit River Bridge. Obviously, this is a
huge help to the State of Washington as we have been going
through this nightmare, knowing that the Federal Government is
at our back and they are going to be there to fund this.
So we owe a great deal of gratitude to him and all of the
Department for moving that along.
With that, I want to welcome all of our witnesses. Thank
you all for being here this morning. Each of these witnesses
today can speak to the importance of investing in our
infrastructure. They know these investments ensure our safety
and the safety of our families, and they are well aware that
investments in infrastructure are fundamental to improving our
economy and increasing our economic competitiveness.
Unfortunately, I know all too well what happens when our
infrastructure fails. A few weeks ago, in my home State I saw
firsthand the devastation that was caused when an entire
section of Interstate 5 collapsed into the Skagit River. And
you can see behind me, that's the main highway that goes
through Washington State, I-5 corridor. And unfortunately, this
is the kind of disaster we can expect to happen more often when
our roads and bridges fall into disrepair.
It certainly should be the wakeup call that we need to
invest in repairing and rebuilding our aging roads, bridges,
and highways. Thankfully, in this tragedy no one was critically
injured, and work has now begun on the temporary and long-term
repair. As I said, the Secretary announced this morning that
the Federal Government will do the reimbursement, which we're
grateful for.
But I can tell you that I've firsthand seen that the local
economy and small businesses and the livelihoods of a lot of
families has been seriously disrupted without this very
critical artery open for travel.
In the United States, we have built an incredible
transportation system. Our highways, our railroads, our transit
systems connect people across towns and across the country.
Literally, they keep families together. They connect workers to
their jobs. They create a productive environment for American
businesses to grow over the long term.
But we can't take our transportation infrastructure for
granted, because like everything else, it doesn't last forever.
We've got to invest in the infrastructure we have built by
repairing the damage that has occurred over decades, replacing
the infrastructure that is outdated and beyond repair, and
expanding capacity where it is needed to support a growing
population and economy.
Our families want assurances that the roads and bridges
that they drive on are safe. And our communities need a
reliable infrastructure to thrive and grow. For more than a
generation, there was bipartisan agreement on the need for
smart infrastructure investment. Sometimes, I worry that
bipartisan consensus is now eroding. Recently, we have seen
more and more lawmakers here in Washington, DC, who have
focused on the shrinking short-term budget, regardless of its
impact on jobs and economic growth, which has led to attempts
that have been too often successful to really choke off the
investments today that will make such a difference down the
line.
The fact is that if we slash our investments in
infrastructure, like our roads and our bridges, we aren't
really saving any money at all. We are actually making things
worse. We're stifling economic growth. We're putting public
safety at risk. And congestion is taxing families' time with
painfully long commutes and causing health-threatening
pollution. Roads are eventually going to need to be fixed.
Bridges will have to be strengthened before they collapse. And
waiting will only make the work more expensive and more
difficult when it eventually has to be done.
So, what happens in the meantime? When a bridge
deteriorates at some point, it's no longer safe for heavier
traffic, such as emergency vehicles or large trucks, and
eventually has to be closed to traffic altogether. And when
roads are filled with potholes, it makes the traffic worse and
it makes driving more dangerous.
So our families are less safe and our businesses can't move
goods as quickly all because of short-term cuts. It's
shortsighted and doesn't make sense. We have to remember: if we
don't make investments now, we'll be stuck with a much bigger
bill down the road.
The American Society of Civil Engineers recently released
its latest report card for America's infrastructure. Our
country got a D+. More than 70,000 of our bridges across the
country have been deemed structurally deficient. And the
average age of a typical American bridge is 42 years. We are
not keeping up with repairs; we haven't for years, and much
less accounting for the growth of our country's population.
This is an area where we see agreement today from the U.S.
Chamber of Commerce, major labor groups like AFL-CIO, and
economists and policy experts across the political spectrum.
They all recognize that investing in infrastructure creates
jobs today; it makes our families safer and lays down a strong
foundation for strong economic growth.
We're going to be hearing more about the importance of
transportation infrastructure investments from our witnesses
today. But this is a clear case where investment cuts or short-
term budget deficit look better on paper, but cost us more in
the long run and make other deficits worse, in this case our
infrastructure deficit.
In the case of the Skagit Bridge collapse, we were very
lucky that the damage wasn't worse. By this fall, Washington
State expects to be finished with the repairs, returning
traffic to normal. But until then, in the busy summer season,
commuters and families traveling on their vacations can expect
to encounter delays when traveling that part of the interstate.
I talked to a young woman last week who had a 10-minute
commute to her job a few weeks ago. Today it's well over 2
hours because she has to go around. Local businesses are
continuing to feel the impact of the bridge collapse, and
businesses far and wide that rely on Interstate 5 to move goods
are going to find it takes a lot longer to get their products
to customers.
This collapse illustrates just how much we rely on our
roads and bridges, and I look forward to hearing the
perspective of our two witnesses today. Based on their
leadership and experience at the Department of Transportation,
they can help us understand the current condition of our
Nation's infrastructure and how much additional investment it
requires. I hope to hear from them what these conditions mean
for public safety and the economic competitiveness of our
communities. I'm also interested in having a conversation about
how recent policy changes will affect our investments.
MAP-21, the most recent highway authorization law, included
new requirements for State departments of transportation to
develop performance targets and put together plans to explain
how they are going to reach those targets. It also consolidated
many of our highway programs so there's no longer a dedicated
source of funding for bridge projects.
These policy changes were meant to improve investment
decisions and grant States more flexibility. But when there are
limited resources, as we experienced today, how these decisions
are actually made is critical. I want to hear how DOT is
implementing these new provisions and how our States are
responding.
I'm particularly interested in understanding how States
prioritize the projects that they fund. This is especially
important when you look at a bridge where even if the
likelihood of failure is low, the result can be catastrophic.
What tools are available to States to help them make these
kinds of decisions? And I want to hear about how the Department
of Transportation is managing its relationships with our State
and local governments.
prepared statement
Our transportation system requires collaboration among all
levels of government. It is a shared responsibility, as we have
recently seen, as we've worked together on the Skagit River
Bridge. And we have to make sure that safety is everyone's top
priority. So I really appreciate our witnesses' being here. I
look forward to this discussion.
[The statement follows:]
Prepared Statement of Senator Patty Murray
The subcommittee will come to order.
Today, we will hear testimony from three witnesses. Two from the
Department of Transportation (DOT):
--Polly Trottenberg, the Undersecretary for Policy; and
--Victor Mendez, Administrator of the Federal Highway Administration.
And our third witness is here from the Government Accountability
Office:
--Phil Herr, Director of Physical Infrastructure Issues.
I want to welcome all of our witnesses, and thank you for being
here this morning. Each of these witnesses can speak to the importance
of investing in our infrastructure. They know that these investments:
--ensure our safety; and
--the safety of our families.
And they're well aware that investments in infrastructure are
fundamental to:
--improving our economy; and
--increasing our economic competitiveness.
Unfortunately, I know what happens when our infrastructure fails.
Last month, in my home State, I saw firsthand the devastation caused
when an entire section of Interstate 5 collapsed into the Skagit River.
Unfortunately, this is the kind of disaster we can expect to happen
more often when our roads and bridges fall into disrepair. And it
should certainly be a wake-up call that we need to invest in repairing
and rebuilding our aging roads, bridges, and highways.
Thankfully no one was seriously injured in the Skagit bridge
collapse, and work has already begun on a temporary and long-term
repair. But the local economy, small businesses and the livelihoods of
families are seriously disrupted without this critical artery being
open for travel.
In the United States, we have built an incredible transportation
system. Our highways, railroads and transit systems connect people
across town and across the country. They keep families together,
connect workers to jobs, and create a productive environment for
American businesses to grow over the long term. But we cannot take our
transportation infrastructure for granted. Like everything else, it
does not last forever.
We need to reinvest in the infrastructure we have built by:
--repairing the damage that has occurred over decades;
--replacing the infrastructure that is outdated and beyond repair;
and
--expanding capacity where it is needed to support a growing
population and economy.
Our families want assurances that the roads and bridges they drive
on are safe, and our communities need a reliable infrastructure to
thrive and grow.
For more than a generation, there was a bipartisan agreement on the
need for smart infrastructure investment. But that bipartisan consensus
seems to have eroded. Recently, more and more lawmakers here in
Washington, DC, have focused on shrinking short-term budgets,
regardless of the impact on jobs and economic growth. This has led to
attempts, too often successful, to choke off the investments today that
could make a real difference down the line. The fact is that if we
slash our investments in infrastructure like roads and bridges, we
aren't really saving money at all.
We are making things worse.
We are stifling economic growth, we are putting public safety at
risk, and congestion is taxing families' time with painfully long
commutes and causing health-threatening pollution.
Roads are going to need to be fixed eventually, bridges will need
to be strengthened before they collapse, and waiting will only make the
work more expensive and more difficult when we eventually do it.
And what will happen in the meantime?
When a bridge deteriorates, at some point it is no longer safe for
heavier traffic such as emergency vehicles or large trucks. Eventually,
it has to be closed to traffic altogether. When roads fill with
potholes it makes traffic worse and driving more dangerous.
So our families are less safe, our businesses can't move their
goods as quickly, all because of short-term cuts.
It's shortsighted and it just doesn't make sense. We have to
remember that if we don't make investments now, we'll be stuck with a
much bigger bill down the road.
The American Society of Civil Engineers recently released its
latest Report card for America's Infrastructure, and our country got a
D+. More than 70,000 of our bridges across the country have been deemed
``structurally deficient,'' and the average age of the typical American
bridge is 42 years. We're not keeping up with the repairs, and haven't
for years, much less accounting for the growth of our country's
population. This is an area where you see agreement from:
--the U.S. Chamber of Commerce;
--major labor groups like the AFL-CIO; and
--economists and policy experts across the political spectrum.
They all recognize that investing in infrastructure creates jobs
today, makes our families safer, and lays down a strong foundation for
long-term economic growth.
We are going to be hearing more about the importance of
transportation infrastructure investments from our witnesses.
But this is a clear case where investment cuts make our short-term
budget deficit look better on paper, but cost us more in the long run,
and make other deficits worse, in this case, our infrastructure
deficit.
In the case of the Skagit bridge collapse, we were very lucky that
the damage was not worse. By the fall, Washington State expects to be
finished with repairs, returning traffic to normal. And I'm continuing
to work with the Department to make sure we're reimbursing Washington
State for eligible repairs. But until then, commuters and families
traveling on their vacations can expect to encounter delays when
traveling that part of the interstate.
Local businesses continue to feel the impact of the bridge
collapse, and businesses far and wide that rely on Interstate 5 to move
goods will find it takes longer for their products to reach customers.
The collapse illustrates just how much we rely on our roads and
bridges.
I look forward to hearing the perspective of our two witnesses
today. Based on their leadership and experience at the Department of
Transportation, they can help us understand the current condition of
our Nation's infrastructure and how much additional investment it
requires. I hope to hear from them what these conditions mean for
public safety and the economic competitiveness of our communities.
I am also interested in having a conversation about how recent
policy changes will affect our investments.
MAP-21, the most recent highway authorization law, included new
requirements for State departments of transportation to develop
performance targets and put together plans to explain how they will
reach those targets. It also consolidated many of the highway programs,
so that there is no longer a dedicated source of funding for bridge
projects.
These policy changes were meant to improve investment decisions and
grant States more flexibility. But when there are limited resources, as
we experience today, how these decisions are actually made is critical.
I want to hear about how DOT is implementing these new provisions,
and how States are responding. I am particularly interested in
understanding how States prioritize the projects they fund. This is
especially important when you look at a bridge, where even if the
likelihood of a failure is low, the result can be catastrophic. What
tools are available to States to help them make these kinds of
decisions?
And I want to hear about how the Department of Transportation is
managing its relationships with State and local governments. Our
transportation system requires collaboration among all levels of
government. It's a shared responsibility, one in which ensuring safety
is everyone's top priority.
I look forward to our discussion today.
With that, I now turn it over to my partner, Senator Collins, for
her opening statement.
Senator Murray. And I want to recognize my ranking member,
Senator Susan Collins, who has just been a leader and a
forward-looking Republican counterpart who understands this as
much as I do. And I really appreciate your work on this. Thank
you.
STATEMENT OF SENATOR SUSAN M. COLLINS
Senator Collins. Thank you very much, Chairman Murray. I
want to join you in welcoming our witnesses. And I very much
appreciate your scheduling this hearing so that we can discuss
in very concrete terms, no pun intended, the needs of our
Nation's crumbling infrastructure.
The terrifying bridge collapse that occurred in Senator
Murray's State just 3 weeks ago once again highlights the
importance of maintaining our Nation's highways and bridges.
Our national highway system contains too much infrastructure
that is now well beyond its useful life. Some bridges are more
than 100 years old. Many are unable to accommodate today's
traffic volumes.
In fact, one in nine of the Nation's bridges are rated as
structurally deficient, and the average age of our Nation's
more than 600,000 bridges is 42 years old. The Federal Highway
Administration (FHWA) estimates that we must invest more than
$1 billion at all levels of government each year just to
maintain our highways and bridges over the next 15 years.
Improving the system to meet future demands will require $170
billion annually.
This will prove extremely difficult, given that the
revenues collected for the Highway Trust Fund already do not
support the current level of Federal spending.
The math is clear: The trust fund collected $40 billion in
revenue last year, but spent close to $50 billion. This is not
a new problem. There has been a shortfall every year for the
past 5 years. By the end of next year, Congress will have
transferred nearly $54 billion in general funds into the
Highway Trust Fund in order to ensure its solvency. In order
for States and localities to plan for and build long-term
projects, they must have guaranteed funding to support the
critical infrastructure investments.
Transportation, as Chairman Murray has pointed out, is one
of the largest sectors of our economy, representing nearly 10
percent of the Nation's gross domestic product (GDP) and is one
of the largest generators of high-paying jobs. Improving the
efficiency and reliability of the Nation's transportation
system is vital to the movement of people and freight, yet
every State has a backlog of transportation needs.
Maine's roads and bridges are among the worst in the
Nation's rural transportation system. According to the FHWA, 32
percent of Maine's bridges are deficient, which is more than
the national average of 25 percent. In fact, there are nearly
800 deficient bridges in my State. The Maine Department of
Transportation estimates that its annual required investment to
maintain good repair for our highways and bridges would cost
$355 million, which is $110 million above the current level.
Senator Murray referred to the American Society of Civil
Engineers, which puts out a report card evaluating each State's
infrastructure. And I've studied the one for my State. Overall
for infrastructure, which goes beyond transportation, Maine
receives a grade of C-. It is notable that our roads receive a
grade of a D. And the society indicates that Maine motorists
spend an average of $299 extra per year in vehicle operating
costs because of the poor condition of many of our roads. Our
bridges, similarly, receive a C-.
Eventually, the lack of infrastructure funds leads to
bridges and roads that are simply unsafe for travel by many
vehicles. For example, the bridge displayed here is used to
connect Lebanon, Maine, and Milton, New Hampshire. And as you
can see, it has been completely closed, thus severing the link
between those two towns via this bridge. It was deemed unsafe
and forced to be closed.
The fact is that virtually every entrance into the State of
Maine is deteriorating and requires substantial investment. And
when repairs are put off to the last minute, State departments
of transportation are forced to spend far more time and
resources than would have been necessary if they were repaired
or replaced at an earlier stage.
Now, clearly, Maine is not unique in having these problems,
which affect not only the traveling public, but also the local
and State economy as well.
This hearing brings much-needed attention to our outdated
and overburdened highways and bridges. Now, the transportation
bill that we passed last year, MAP-21, was a step in the right
direction. But so much more needs to be done. And that's why I
am a strong supporter of the Transportation Investment
Generating Economic Recovery (TIGER) Grants Program.
I have supported the Maine DOT's successful efforts to
obtain funding to replace the Memorial Bridge linking Maine and
New Hampshire, the bridge between two rural communities,
Richmond and Dresden, and the Martin Memorial Bridge in
Rumford. These bridges were long past their expected lives and
needed replacement, like so many other bridges not only in
Maine, but across the Nation.
It's clear that additional investments are necessary. The
President has requested $50 billion in immediate transportation
investments to spur economic investment and rebuild America.
But I must say that I was disappointed that the President's
plan is not supported by a serious proposal to finance it.
I so share the administration's belief that investment in
transportation is critical to the health of our economy and to
our economic recovery. Such investments create jobs, provide
lasting assets, move commerce, and establish the foundation of
future growth. But clearly, in these difficult fiscal times,
it's going to be a challenge for us to find the funds necessary
for these investments.
PREPARED STATEMENT
But as our chairman said, we need to think about not only
the extremely troubling deficit that we have overall in our
Federal budget, but also our deficit in investing in
transportation, as well. Thank you, Madam Chairman.
[The statement follows:]
Prepared Statement of Senator Susan M. Collins
Thank you, Chairman Murray. Welcome, Under Secretary Trottenberg,
Administrator Mendez, and Mr. Herr. I appreciate your testifying before
us today as we discuss the needs for our Nation's crumbling
infrastructure.
As the Chairman mentioned, we are here today, in part, due to the
horrific Interstate bridge collapse that occurred in Washington just 3
weeks ago. Fortunately, no one was killed, but this incident once again
highlights the importance of maintaining our Nation's highways and
bridges.
Our National Highway system contains infrastructure that is now
well over its useful life. Some bridges are over 100 years old, and
many are unable to accommodate today's traffic volumes. In fact, one in
nine of the Nation's bridges are rated as structurally deficient, and
the average age of the Nation's 607,000 bridges is 42 years old.
The Federal Highway Administration (FHWA) estimates that we must
invest more than $101 billion at all levels of government each year
just to maintain our highways and bridges over the next 15 years.
Improving the system to meet future demands will require $170 billion
annually. This will prove difficult given that revenues collected for
the Highway Trust Fund already do not support the current level of
Federal spending.
The math is clear: the Trust Fund collected $40 billion in revenue
last year, but spent close to $50 billion. This is not a new problem;
there has been a shortfall every year for the past 5 years. By the end
of next year, Congress will have transferred nearly $54 billion in
General Funds into the Highway Trust Fund in order to ensure its
solvency. In order for States and localities to plan for and build
long-term projects, they must have guaranteed funding to support the
critical infrastructure investments.
Transportation is one of the largest sectors of the U.S. economy,
representing nearly 10 percent of the Nation's GDP, and is one of the
largest generators of high-paying jobs. Improving the efficiency and
reliability of the Nation's transportation system is vital to the
movement of freight and people, yet every State has a backlog of
transportation needs.
Maine's roads and bridges are among the worst in the Nation's rural
transportation system. According to the FHWA, 32 percent of Maine's
bridges are deficient, which is more than the national average of 25
percent. In fact, there are nearly 800 deficient bridges in Maine.
Maine's Department of Transportation (DOT) estimates that its annual
required investment to maintain good repair for our highways and
bridges would cost $355 million, which is $110 million above its
current level.
Eventually, the lack of infrastructure funds leads to bridges that
are simply unsafe for travel by many vehicles. For example, the bridge
displayed here used to connect Lebanon, Maine, and Milton, New
Hampshire. As a result of limited funding, this bridge was deemed
unsafe and forced to be closed. Virtually every entrance into Maine is
deteriorating and requires substantial investment. And when repairs are
put off to the last-minute, State DOTs are forced to expend far more
time and resources to maintain them. Clearly, Maine is not unique in
having these problems which affect not only the traveling public, but
also the local and State economy as well.
This hearing brings much needed attention to our outdated and
overburdened highways and bridges. The Moving Ahead for Progress in the
21st Century Act (MAP-21) was a step in the right direction providing
reforms designed to simplify the program structure. It also improved
upon project delivery to bring the benefits of highway and bridge
investments to the public sooner. An important component of MAP-21 was
expanding innovative financing programs, such as the Transportation
Infrastructure Finance and Innovation Act (TIFIA). It is programs like
TIFIA that produce a greater return for taxpayers and encourage private
sector investment in our transportation system.
In addition to supporting TIFIA, I continue to advocate for the
Transportation Investment Generating Economic Recovery (TIGER) program.
I have supported Maine DOT's successful efforts to obtaining funding to
replace the Memorial Bridge linking Maine and New Hampshire, the bridge
between Richmond and Dresden, and the Martin Memorial Bridge in
Rumford. These bridges were past their expected lives and needed
replacement, like so many other bridges across the Nation.
It is clear that additional investments are necessary. While the
President has requested $50 billion in immediate transportation
investments to spur economic investment and rebuild America, I was
disappointed that this was not supported with a serious funding
proposal.
I share the administration's belief that investment in
transportation is critical to our economy. Such investments create
jobs, provide lasting assets, move commerce and establish the
foundation for future growth. But we must balance this commitment with
other pressing needs, and it is equally important to our economic
future that we rein in Federal spending and keep our national debt
under control. We must address our skyrocketing national debt, which is
rapidly approaching $17 trillion.
These are all challenging issues that require Congress and the
administration to work together to find solutions. I appreciate the
leadership at the Department of Transportation and look forward to
continuing to work together with you and the Government Accountability
Office.
Senator Murray. Thank you very much.
With that, we're going to turn to our witnesses. We'll
first hear from the Department of Transportation, Secretary
Trottenberg. And then we will turn to Mr. Herr from the GAO.
Thank you.
STATEMENT OF HON. POLLY TROTTENBERG, UNDER SECRETARY
FOR POLICY, DEPARTMENT OF TRANSPORTATION
ACCOMPANIED BY HON. VICTOR MENDEZ, ADMINSTRATOR, FEDERAL HIGHWAY
ADMINISTRATION, DEPARTMENT OF TRANSPORTATION
Ms. Trottenberg. Chairman Murray, Ranking Member Collins,
thank you for granting me and Administrator Mendez the
opportunity to appear before you today on behalf of the Obama
administration to discuss our Nation's transportation
infrastructure challenges.
The Skagit River Bridge collapse has clearly prompted a
necessary conversation about the current state of our
infrastructure, and, Chairman Murray, as you've noted,
thankfully, the collapse did not cause any loss of life or
serious injuries, but clearly is going to continue to have a
major effect on the mobility and economic productivity of the
region.
We are proud that the Department was able to act quickly to
help Washington State. Within hours of the collapse, Federal
Highway engineers were on site. We were able to provide $1
million in emergency funds right away. You've talked to the
Secretary; we'll be continuing to support the State's efforts
to replace the bridge.
The Department will continue to stand by Washington State.
And Senator Murray, we want to thank you and the delegation for
all your leadership.
Despite the I-5 incident, the overall condition of our
Nation's highways and bridges has improved a bit in recent
years as a result of significant investment, improved project
design and construction, and better condition monitoring. The
percentage of bridges classified as deficient has dropped
slightly in recent years. But there is still an enormous
backlog of over 150,000 deficient bridges, with an estimated
replacement cost of $240 billion, clearly outstripping the
available resources at all levels of government.
Over the past few years, the Department has received
hundreds of requests through the TIGER program and our
Transportation Infrastructure Finance and Innovation Act
(TIFIA) loan program to repair or replace obsolete and
deficient bridges, clearly demonstrating a big demand. As a
result, DOT has awarded 19 TIGER grants for bridge projects
totaling $326 million. Senator Collins mentioned the bridges in
Maine and also the Milton-Madison Bridge in Kentucky, South
Park Bridge in Seattle. We've done a lot of terrific bridge
programs.
We've also seen a lot of interest in the TIFIA program.
We've heard from the Tappan Zee Bridge in New York and the
Gerald Desmond Bridge in Los Angeles, a critical freight
connection to the ports of Los Angeles and Long Beach.
TIGER and TIFIA are helping to address the need, but
clearly there is far more demand for these programs than we
have funds available. That raises the difficult question of
what is the right level of public investment in our Nation's
transportation system to ensure continued safety, foster
economic growth, and increase mobility choices for our citizens
and businesses. How can we at the Federal, State, and local
level ensure that we're building, maintaining, and operating
this system as safely, efficiently, and cost-effectively as
possible?
At the Department, we are very focused on the looming
funding crisis that Senator Collins mentioned in our surface
transportation programs and how we can wring more productivity
and efficiency out of our existing system and continue to
improve its performance. We are grateful for MAP-21, which
provided us with 2 years of stable funding, and we consider
MAP-21's focus on performance one of the most exciting and
challenging areas of the legislation. We're working with key
stakeholders all over the country to develop performance
measures in areas such as safety, pavement and bridge
conditions, system performance, congestion, and freight.
MAP-21 also focused on accelerating project delivery and
built upon some of the groundbreaking work that Administrator
Mendez has done at Federal Highways, with his transformational
Every Day Counts initiative. For example, one of the things
Every Day Counts has done is promulgate the greater use of
innovative technologies like assembling bridges from
prefabricated elements, as is being done with the I-5 bridge.
These proven, more efficient technologies can build
infrastructure faster for far less money, less disruption to
the traveling public and businesses, and less impact on the
environment.
Thanks in large part to MAP-21 and to the TIGER program,
we've also stepped up our efforts to work with States and
localities to produce better economic analysis, including
expanded use of asset management to ensure that every public
dollar is well spent. But as the subcommittee knows and Senator
Collins mentioned, MAP-21 is only a 2-year bill instead of the
traditional 6-year bill, because we were unable to find further
funding. The Highway Trust Fund will be nearly depleted at the
end of the life of the bill. And we've been using general funds
to keep the program going. This is clearly fiscally and
politically unsustainable.
In this time of severe budgetary challenges, we are going
to need to find political consensus on how to sustainably fund
surface transportation over the long term. The President has
proposed using the savings from the military draw-downs in Iraq
and Afghanistan as a source of funding and supports programs
such as TIGER and TIFIA and an infrastructure bank that would
help leverage additional public and private funds. Others have
different proposals, and a number of States in this region and
around the country have also started to achieve political
consensus on new funding for critical transportation
infrastructure.
We know this is one of the many important issues that
leaders on this subcommittee and throughout Congress will be
grappling with in the months to come, and the administration
looks forward to seeking a shared solution to sustainably fund
surface transportation and keep our bridges, our roads, and our
rails safe for the traveling public.
PREPARED STATEMENT
Thank you for having us here today. And Administrator
Mendez and I are happy to answer any questions you have.
[The statement follows:]
Prepared Statement of Hon. Polly Trottenberg
Chairman Murray, Ranking Member Collins, and members of the
subcommittee, thank you for the opportunity to appear before you today
to discuss our Nation's transportation infrastructure challenges. With
me is Victor Mendez, our Federal Highway Administrator.
The I-5 Skagit River Bridge collapse has prompted a necessary
conversation about the current state of our Nation's transportation
infrastructure and how such incidents can be prevented in the future.
Thankfully, the May 23 collapse did not cause any serious injuries or
loss of life, but it has had, and will continue to have, a major effect
on the region's mobility and economic productivity.
restoring infrastructure
As Chairman Murray noted, the I-5 bridge is a vital transportation
link for international commerce, carrying an estimated 71,000 vehicles
each day, including commuters, between Seattle and Vancouver, British
Columbia. As much as $14 billion in freight travels to and from Canada
along this busy north-south corridor each year as well.
While it is too early to calculate the full economic impact of the
downed bridge, storm-related closures of I-5 in 2007 resulted in more
than $47 million of lost economic output. Businesses in Mount Vernon
and Burlington, communities adjacent to the bridge, are already
reporting sales decreases of 50 to 80 percent since the bridge
collapsed.
According to the Burlington Chamber of Commerce, a local coffee
shop typically teeming with customers now experiences hours without any
business. One local, small bank has not opened a single account since
the bridge collapsed. On the freight side, a large trucking company is
rescheduling pickup and delivery times to accommodate congestion-
related delays at an estimated loss of $21,000 per week.
The National Transportation Safety Board (NTSB) is taking the lead
in the investigation, working with staff from our Federal Highway
Administration's (FHWA) headquarters and Washington Division Office.
Within hours of the bridge collapse, FHWA engineers from our Washington
division were on-site to provide technical expertise to NTSB
investigators. Additionally, FHWA Deputy Administrator Greg Nadeau
visited the bridge site on May 28 and helped expedite a U.S. Army Corps
of Engineers permit to quickly complete debris removal just days after
the bridge collapse.
I am proud that the Department acted quickly to minimize economic
consequences by making both financial and staffing resources available
to Washington State. We immediately provided $1 million in Emergency
Relief program funds to help install a temporary bridge over the river
and make permanent repairs.
For the short term, Washington State DOT will put in place an
innovative, prefabricated temporary bridge, expected to open next week.
The bridge will be constrained in its use and capacity, with a reduced
speed limit, and oversized vehicles will have to use a detour route.
The construction of the permanent replacement span of the bridge
will also use innovative methods. The permanent replacement span is
expected to be fabricated on-site. When construction is complete, the
temporary bridge will be removed and the new span will be moved into
its permanent location. With FHWA's assistance, Washington State DOT
expects to have the permanent repairs complete and the restored bridge
open to traffic by October 2013.
And I note that Washington State DOT is the first beneficiary of
the Moving Ahead for Progress in the 21st Century Act's (MAP-21's)
categorical exclusion expediting the delivery of critical
transportation projects in emergencies. The Department will continue to
stand by Washington State and provide any assistance needed until all
repair efforts are completed and this key link in the Nation's highway
network is fully operational again.
improving our nation's bridges
Despite increased use, the condition of our Nation's highways and
bridges has improved overall in recent years, as a result of new
technology and techniques used in the design and construction of
projects, as well as condition monitoring.
With over 600,000 bridges, the percentage of bridges classified as
deficient--meaning that they were either structurally deficient or
functionally obsolete--dropped from slightly more than 30 percent in
2001 to 26.5 percent in 2009.
As bridge conditions improve, it is still critical to monitor the
condition of the Nation's bridges and frequently assess the load-
carrying capacity of those bridges that are showing signs of
deterioration. The Department's National Bridge Inspection program
relies on Federal and State bridge inspectors every day to monitor
bridge conditions and ensure critical safety issues are identified and
remedied to protect the traveling public. Safety inspections are
conducted at least once every 2 years on highway bridges that exceed 20
feet in total length, and many bridges are inspected more frequently.
One of the newer technologies aiding in bridge condition monitoring
is the use of acoustic emission (AE) equipment. Some bridges are being
fitted with the AE instruments that listen to the sounds that a bridge
makes and can detect the sound energy produced when a crack occurs or
if a crack expands. This information is transmitted back so that
continuous bridge condition monitoring is possible.
Despite the Department's rigorous oversight of bridges, a huge
backlog of structurally deficient bridges remains. As of December 2012,
bridges on the National Highway System (NHS) totaled 117,485, or about
one-fifth of the 607,380 bridges inventoried nationwide. Of those NHS
bridges, 5,237, or 4.5 percent, were considered structurally deficient.
That represents a reduction of 1.4 percent from 2002, when 6,712 out of
114,544, or 5.9 percent, of NHS bridges inventoried were structurally
deficient.
Over the past few years, the Department received hundreds of
requests through the Transportation Investment Generating Economic
Recovery (TIGER) and Transportation Infrastructure Finance and
Innovation Act (TIFIA) programs to repair or replace obsolete and
deficient bridges, which resulted in 19 TIGER awards totaling more than
$326 million. For example, the Milton-Madison Bridge Replacement
between Kentucky and Indiana restored an important link for the
surrounding economically distressed communities that was estimated to
have less than 10 years of serviceable life left. Similarly, the
Muldraugh Bridge Replacement replaced two deteriorating freight rail
bridges that reached the end of their useful life. In Washington, a $34
million TIGER award helped King County repair the South Park Bridge
that was closed to traffic due to its rapidly deteriorating condition.
Several other nationally significant bridges approached the TIFIA
program for credit assistance to replace and rebuild failing bridges.
The New York Thruway Authority is currently negotiating for loan
support to replace the Tappan Zee Bridge across the Hudson River. The
Port of Long Beach is also looking to TIFIA to help reduce the cost of
replacing the vital Gerald Desmond Bridge, which provides a critical
freight connection to the port. These projects will help repair a few
of the Nation's significant bridges, but there is far more demand for
investment than we have funds available.
infrastructure debate
The I-5 bridge collapse has spurred debate about the state of
American transportation infrastructure. To me, the fundamental question
is not so much whether our transportation infrastructure is crumbling
and even collapsing, which fortunately only happens in fairly rare
circumstances.
Rather, what is the right level of public investment in our
Nation's transportation system to ensure continued safety, foster
economic growth, and increase mobility choices for our citizens and
businesses? And how can we at the Federal, State, and local level
ensure that we are building, maintaining and operating the system as
efficiently and cost-effectively as possible?
At DOT, we are very focused on the looming funding crisis for our
surface transportation programs and on how we can wring more
productivity and efficiency out of our existing system and continue to
improve its performance.
We are grateful that Congress passed MAP-21 last summer. After 10
extensions of the previous law, MAP-21 provided 2 welcome years of
stable funding--$105 billion--for our highway, transit and safety
programs and a lot of good programmatic and policy reforms.
We consider MAP-21's focus on performance one of the most exciting
and challenging parts of the legislation. We are working with our
stakeholders to develop performance measures in key areas such as
safety, pavement and bridge condition, system performance, congestion
and freight. Setting performance measures will help decisionmakers and
the public identify cost-effective policies and investments needed to
maintain and improve the national transportation system.
MAP-21 also focused on accelerating project delivery and built upon
the work that my colleague Administrator Mendez has led at FHWA with
his Every Day Counts initiative. Every Day Counts was designed to
further increase innovation and improve efficiency, effectiveness, and
accountability in the planning, design, engineering, construction and
financing of transportation projects.
For example, Every Day Counts has promoted the greater use of
technologies--like assembling bridges from prefabricated elements as is
being done to rebuild the I-5 bridge--that allow critical
infrastructure to be built faster, for less money, and with much less
disruption to the traveling public and businesses and less impact on
the environment.
We are working with our sister agencies to reduce the Federal
permitting review process timeline for project sponsors, generating
tremendous savings of time and money. We are also implementing the
President's directive to cut aggregate timelines for major
infrastructure projects in half, while also improving outcomes for
communities and the environment. We are likewise encouraging cost-
effective innovation and creative new approaches to construction,
operations and project delivery.
Thanks in large part to the TIGER discretionary grant program that
this subcommittee has created and supported, and now MAP-21, DOT has
greatly stepped up its efforts to work with States and localities to
produce better economic analysis, including expanded use of asset
management, to ensure that every public dollar is well spent.
Repairing our existing infrastructure is a central component of
President Obama's ``Fix-It-First'' program in the fiscal year 2014
budget proposal, which would direct $40 billion toward reducing the
backlog of deferred maintenance on highways, bridges, transit systems,
and airports nationwide and put U.S. workers on the job, along with $10
billion for innovative transportation investments.
The President also proposed a Partnership to Rebuild America to
attract private capital to upgrade what our businesses need most:
efficient roads, rails, mass transit systems, waterways, and ports to
move people and goods, and safe and modern energy and
telecommunications systems.
meeting future demand and funding sustainable investment
But as this committee knows, MAP-21 is only a 2-year authorization,
instead of the traditional 6-year authorization, because that was all
the funding available.
By the end of 2014, the Highway Trust Fund will be nearly depleted
and Congress will have transferred nearly $54 billion in General
taxpayer Funds into the Highway Trust Fund to keep the program afloat.
We will need an additional $85 billion in General Funds over the next 6
years just to keep the program at current levels, let alone grow it.
This is clearly fiscally and politically unsustainable.
Meanwhile the demands on our Nation's transportation infrastructure
will only increase. By 2050, the U.S. population is expected to grow by
100 million people, with many of them projected to live in already
congested metropolitan areas.
In this time of severe budgetary challenges, ultimately we need to
find political consensus on how to sustainably fund surface
transportation over the long term. It will not be easy.
The President has proposed using the savings from the military
drawdowns in Iraq and Afghanistan as a source of funding for
transportation, and supports programs such as TIFIA, TIGER and an
infrastructure bank that would help leverage additional public and
private funds for transportation.
Others may have different proposals, and many States, including
Virginia, Maryland, Wyoming, New Hampshire, and Pennsylvania have
recently achieved political consensus on new funding for critical
transportation infrastructure.
I know this is one of the many important issues that the leaders on
this committee and throughout Congress will be grappling with in the
months to come. The administration looks forward to seeking a shared
solution to sustainably fund surface transportation so that we can
maintain our economic competitiveness and States and localities can
plan for and build long-term projects.
Senator Murray, I commend your leadership on addressing our
transportation challenges. I thank you and this subcommittee for your
fiscal year 2014 budget proposal, which seeks to provide the necessary
resources to build and maintain our Nation's transportation system.
The President has called on us to create an America built to last.
We have a long way to go to upgrade our Nation's highways, bridges, and
transit systems, but we owe it to future generations to make it happen.
Thank you, and Administrator Mendez and I are happy to answer any
questions you may have.
Senator Murray. Thank you very much to both of you.
Mr. Herr.
STATEMENT OF PHILLIP R. HERR, DIRECTOR, PHYSICAL
INFRASTRUCTURE ISSUES, GOVERNMENT
ACCOUNTABILITY OFFICE
Mr. Herr. Chairman Murray and Ranking Member Collins, I'm
pleased to discuss GAO's work on the Nation's bridges. Surface
transportation is critical to the economy and affects the daily
lives of most Americans. The collapse of the section of the
Interstate 5 bridge in Washington reminds us of the economic
impact that a bridge failure can have.
Today I will discuss the current state of the Nation's
bridges and Federal funding programs, and recent changes to
surface transportation programs for MAP-21, along with key
financial challenges.
Turning first to bridge conditions, while there's been
limited improvement over the past decade, a substantial number
remain in poor condition, as we've discussed. Of the
approximately 607,000 bridges on the Nation's roadways in 2012,
1 in 4 was classified as deficient. Since 2002, the number of
bridges has increased by about 16,000, and the number of
deficient bridges has decreased by about 23,000.
The impact of the Federal investment in bridges is
difficult to measure. While FHWA tracks a portion of bridge
spending, the data do not include State spending on bridges
located on local roads and most local government spending. The
lack of comprehensive information on State and local bridge
spending makes it impossible to determine the impact of Federal
bridge investments. This is important not only to understand
the outcomes of past spending, but also to determine how to
sensibly invest future resources.
Turning to more recent changes to surface transportation
programs, there has been progress in clarifying Federal roles
and linking programs to performance. In 2008, we recommended
that the Federal Bridge Program needed clearer goals and
performance measures. MAP-21 moved transportation programs
toward a more performance-based highway and bridge program, as
well as established a framework to address freight challenges.
However, the two key programs will fund bridge construction,
replacement, and rehabilitation and place bridge projects in
competition with other eligible projects and activities such as
road needs.
Our prior work recommended the DOT incorporate best tools
and practices, some of which were discussed today, in the
Federal Bridge Program. While MAP-21 referenced performance-
based bridge management systems to assist States in making
investments, it did not require States to use them.
MAP-21 requires the Secretary of Transportation to consult
with States and others to establish performance measures and
goals and report their progress. MAP-21 also links funding to
performance by requiring States to take corrective action
should progress toward targets be insufficient and to spend a
portion of their annual Federal funding to improve bridges
should conditions fall below minimum standards.
While sharpening the Federal focus to the 220,000-mile
national highway system is important, calls for increased
investments in bridges and other aging infrastructure come when
traditional funding sources such as the gas tax have lost
purchasing power. As the Nation's bridges built in the 1960s
and early 1970s age, the number in need of repair or
rehabilitation is increasing. Additionally, some large-scale
bridge projects, often the most traveled on the interstate, are
too expensive to be implemented with Federal funds alone.
Without agreement on a long-term plan for funding surface
transportation, fiscal sustainability remains a challenge. In
closing, it's important to emphasize that there's been progress
in clarifying Federal goals and establishing a framework to
link Federal surface transportation programs to performance.
However, a long-term plan for funding surface transportation is
needed as well.
As we noted in our 2013 High-Risk update, continuing to
augment the Highway Trust Fund with general revenues may not be
sustainable given competing demands and the Federal
Government's fiscal challenges. We believe a sustainable
solution is based on balancing revenues to, and spending from,
the Highway Trust Fund. Ultimately, major changes in
transportation spending, revenues, or both will be needed to
bring the two into balance.
PREPARED STATEMENT
Chairman Murray, Ranking Member Collins, thank you. This
concludes my prepared statement, and I'm happy to answer
questions.
[The statement follows:]
Prepared Statement of Phillip R. Herr
Chairman Murray, Ranking Member Collins, and members of the
subcommittee: Thank you for this opportunity to discuss GAO's work
examining the Nation's highways and bridges. The surface transportation
system is critical to the U.S. economy and affects the daily lives of
most Americans, moving both people and freight. The May 23, 2013,
collapse of a section of the Interstate 5 bridge over the Skagit River,
north of Seattle, Washington, underscores the importance of maintaining
the Nation's infrastructure and the economic impact that a bridge
failure, such as this one, can have on a region. According to Federal
Highway Administration (FHWA) information, the Skagit River Bridge is a
major commercial route between the United States and Canada and serves
an average of 71,000 vehicles per day. Commercial truck traffic
comprises about 11 percent of these vehicles, transporting goods
between the two countries. Overall, there are over 600,000 bridges in
the U.S. surface transportation system. However, the system--including
bridges--is under growing strain, and the cost to repair and upgrade it
to meet current and future demands is estimated in the hundreds of
billions.
My testimony today describes: (1) the current condition of the
Nation's bridges and effects of Federal funding for bridges and (2) a
preliminary look at the recent changes to the surface transportation
and bridge program made by the Moving Ahead for Progress in the 21st
Century Act (MAP-21), along with key financial challenges. This
statement is drawn from prior work that we completed from 2008 through
2010 regarding surface transportation programs.\1\ The reports and
testimonies cited in this statement contain more detailed explanations
of the methods used to conduct our work. We conducted our work on these
products in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit
to obtain sufficient, appropriate evidence to provide a reasonable
basis for our findings and conclusions based on our audit objectives.
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\1\ GAO, Highway Bridge Program: Condition of Nation's Bridges
Shows Limited Improvement, but Further Actions Could Enhance the Impact
of Federal Investment, GAO-10-930T (Washington, D.C.: July 21, 2010),
and GAO, Highway Bridge Program: Clearer Goals and Performance Measures
Needed for a More Focused and Sustainable Program, GAO-08-1043
(Washington, D.C.: Sept. 10, 2008).
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background
Bridges vary substantially in their size and use, including daily
traffic volumes. In 2012, there were 607,380 bridges in the United
States, which carried the Nation's passenger car, truck, bus transit,
and commercial vehicle traffic over waterways, highways, railways, and
other road obstructions. Bridge ownership is fairly evenly split
between States (48 percent) and local government agencies (50 percent).
State agencies are responsible for 77 percent of the Nation's bridge
deck area. The Federal Government owns less than 2 percent of the
Nation's bridges, primarily on federally owned land.
Bridge safety emerged as a high-priority issue in the United States
in the 1960s, following the collapse of the Silver Bridge between Ohio
and West Virginia, which killed 46 people. That collapse prompted
national concerns about bridge condition and safety and highlighted the
need for timely repair and replacement of bridges. Congress responded
by establishing the National Bridge Inspection Program (NBIP) to ensure
periodic safety inspection of bridges and the Highway Bridge Program
was established to provide funding and assist States in replacing and
rehabilitating bridges.
The NBIP established the National Bridge Inspection Standards,
which detail how bridge inspections are to be completed and with what
frequency.\2\ After inspection, a bridge may be classified as deficient
for one of two reasons: the bridge has one or more components in poor
condition (classified as ``structurally deficient'') or the bridge has
a poor configuration or design that may no longer be adequate for the
traffic it serves (classified as ``functionally obsolete'').\3\
Structurally deficient bridges often require maintenance and repair to
remain in service. In contrast, functionally obsolete bridges do not
necessarily require repair to remain in service and therefore are
unlikely to be State transportation officials' top priority for
rehabilitation or replacement.\4\ Bridge sufficiency ratings are
calculated using a formula that reflects structural adequacy, safety,
serviceability, and relative importance. Based on an inspection, each
bridge is assigned a sufficiency rating from a low of 0 to a high of
100.\5\ For example, in the National Bridge Inventory, the Skagit River
Bridge was classified as functionally obsolete with a sufficiency
rating of 46. According to the Federal Highway Administration (FHWA),
classifying a bridge as deficient does not necessarily mean that it is
likely to collapse or that it is unsafe. If proper vehicle weight
restrictions are posted and enforced, deficient bridges can continue to
serve most traffic conditions. If a bridge is determined to be unsafe,
it must be closed to traffic.\6\
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\2\ 23 C.F.R. part 650.
\3\ During an inspection, bridge inspectors rate bridge components
using a numerical system to describe the condition of the component.
Using the data collected by State and local governments during bridge
inspections, FHWA classifies bridges in two key ways, by determining
whether bridges are not deficient or deficient and by calculating a
sufficiency rating.
\4\ Bridges are typically classified as functionally obsolete as a
result of changing traffic demands or changes in design standards since
construction and are not structurally unsound.
\5\ FHWA assigns each bridge in the national bridge inventory a
rating between 0 and 100, indicating its sufficiency to remain in
service. A rating of 100 represents an entirely sufficient bridge,
while a rating of 0 represents an entirely insufficient bridge. FHWA
documents state that sufficiency ratings are not intended to be an
accurate representation of priority for bridge replacement or
rehabilitation projects.
\6\ DOT, 2006 Status of the Nation's Highways, Bridges, and
Transit: Conditions and Performance (Washington, D.C., Jan. 22, 2007).
---------------------------------------------------------------------------
President Obama signed MAP-21 \7\ into law in July 2012,
consolidating a number of existing highway programs, including the
Highway Bridge Program. Bridge projects are now funded through the
National Highway Performance Program (NHPP) or the Surface
Transportation Program (STP). MAP-21 divides each State's total annual
Federal-aid apportionment principally between NHPP (64 percent) and STP
(30 percent).\8\ Estimated funding authorized under MAP-21 in fiscal
year 2013 are over $21 billion for NHPP and about $10 billion for STP.
---------------------------------------------------------------------------
\7\ Public Law 112-141. 126 Stat 405 (2012).
\8\ Codified as positive law at 23 U.S.C. sections 104(b),
119(d)(2).
---------------------------------------------------------------------------
Bridge Conditions Show Limited Improvement, but the Impact of Federal
Investment Is Difficult To Determine
There has been limited improvement in bridge conditions in the past
decade, but substantial numbers of bridges remain in poor condition. Of
the 607,380 bridges on the Nation's roadways in 2012, 1-in-4 was
classified as deficient. Data indicate that the total number of
deficient bridges decreased since 2002, even as the total number of
bridges increased. From 2002 to 2012, the number of bridges increased
from 591,243 to 607,380. During that same time period, the total number
of deficient bridges decreased by 23,357. (See fig. 1.) In our prior
work, we found that the average sufficiency rating of all bridges--
including both deficient and non-deficient bridges--also improved
slightly. Specifically, the average sufficiency rating for all bridges
increased from 75 to 79 on the sufficiency rating's 100-point scale
from 1998 to 2007.\9\
---------------------------------------------------------------------------
\9\ In that same period, the amount of bridge deck that is
deficient increased by 39 million square feet, or 4 percent.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Our prior work has found that the impact of the Federal investment
in bridges is difficult to measure.\10\ For example, while FHWA tracks
a portion of bridge spending on a State-by-State basis, the data do not
include (1) States' spending on bridges located on local roads and (2)
most local governments' spending on bridges, thus making it difficult
to determine the Federal contribution to overall bridge expenditures.
This lack of comprehensive information on State and local spending
makes it impossible to determine the impact of the Federal investment
in bridges. Understanding the impact of the Federal investment is
important not only to understand the outcomes of past spending but also
to determine how to sensibly invest future Federal resources.
---------------------------------------------------------------------------
\10\ GAO-08-1043.
---------------------------------------------------------------------------
Progress Has Been Made in Clarifying the Federal Government's Surface
Transportation Focus and Linking Programs to Performance
Measures, but Challenges Remain
There has been progress in clarifying Federal goals and linking
Federal surface transportation programs to performance. In 2008, we
reported that the Federal bridge program needed clearer goals and
performance measures to create a more focused and sustainable program.
We recommended that the Department of Transportation (DOT) work with
Congress to identify specific goals in the national interest.
Subsequently, DOT worked with Congress which adopted provisions in MAP-
21, including provisions that move toward a more performance-based
highway and transit program. MAP-21 also specified that NHPP funds may
only support eligible projects--including bridge projects--on the
National Highway System.\11\ However, for both NHPP and STP, funding
for bridge construction, replacement, and rehabilitation projects is
listed among a broader category of eligible highway projects and
activities that must be identified in a State transportation plan. Our
prior work had also recommended that DOT incorporate best tools and
practices into the Federal bridge program. MAP-21 described the
importance of using performance-based bridge management systems to
assist States in making timely investments; however, it does not
require States to do so.\12\
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\11\ The National Highway System is a 220,000-mile network of rural
and urban roads serving major population centers, international border
crossings, intermodal transportation facilities, and major travel
destinations. It includes the Interstate System, the Strategic Highway
Network, and others.
\12\ A bridge management system is a system of formal procedures
and methods for gathering and analyzing bridge data to predict future
bridge conditions, estimate maintenance and improvement needs,
determine optimal policies, and recommend projects and schedules within
budget and policy constraints.
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MAP-21 also required the Secretary of Transportation, in
consultation with States and others, to establish performance measures
for bridge conditions, among other areas, and required States and other
grantees to establish performance targets for those measures and to
report their progress in achieving the targets.\13\ In addition, MAP-21
links funding to performance by requiring States to take corrective
action should progress toward their targets be insufficient and to
spend a specified portion of their annual Federal funding to improve
bridge conditions should conditions fall below minimum standards set by
the Secretary.
---------------------------------------------------------------------------
\13\ Performance measures are also required for areas such as
pavement conditions, injuries and fatalities, and congestion.
---------------------------------------------------------------------------
Although there has been progress in clarifying Federal goals and
linking Federal surface transportation programs to performance,
Congress and the administration need to agree on a long-term plan for
funding surface transportation. As we noted in our 2013 High Risk
Update related to financing the surface transportation system,\14\
continuing to fund a Highway Trust Fund shortfall through general
revenues may not be sustainable given competing demands and the Federal
Government's fiscal challenges.\15\ We believe a sustainable solution
is based on balancing Highway Trust Fund revenues to and spending. New
revenues from users can come only from taxes and fees. Ultimately major
changes in transportation spending, revenues, or both, will be needed
to bring the two into balance.
---------------------------------------------------------------------------
\14\ GAO, High-Risk Series: An Update, GAO-13-283 (Washington,
D.C.: February 2013).
\15\ Most funding authorized under MAP-21 is drawn from the Highway
Trust Fund.
---------------------------------------------------------------------------
Calls for increased investments come at a time when traditional
transportation funding sources are eroding. Funding is further
complicated by the Federal Government's financial condition and fiscal
outlook. Meanwhile, the Nation's inventory of bridges continues to age,
including some considered to require costly, large-scale bridge
projects. As many of the Nation's bridges built in the 1960s and 1970s
age, the number in need of repair or rehabilitation is expected to
increase.\16\ Additionally, in our previous work, some State officials
explained that certain large-scale bridge projects--often the most
traveled, urban bridges on interstate corridors--are too expensive to
be implemented with bridge program funds alone.\17\ For example,
Washington State DOT officials explained that costly ``mega
projects''--those that have an estimated total cost greater than $500
million--that emerge as top priorities through their prioritization
process may be delayed by a lack of funds. Transportation officials in
Washington State and other States we visited acknowledged that existing
bridge mega projects could easily exhaust a State's entire Federal-aid
apportionment for many years, potentially to the detriment of all other
bridge needs in that State. Without agreement on a long-term plan for
funding surface transportation, program fiscal sustainability remains a
challenge.
---------------------------------------------------------------------------
\16\ In our prior work, we reported that the average age of bridges
in 2007 in the National Bridge Inventory was approximately 35 years,
that the average age of bridges with a sufficiency rating of 80 or less
was 39 years, and that the average age of bridges with a sufficiency
rating less than 50 was 53 years. See GAO-08-1043.
\17\ GAO-08-1043.
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Chairman Murray, Ranking Member Collins, and members of the
subcommittee, this concludes my prepared statement. I would be happy to
respond to any questions you may have.
______
Attachment, Highlights of GAO-13-713T
transportation infrastructure
Limited Improvement in Bridge Conditions Over the Past Decade, but
Financial Challenges Remain
Why GAO Did This Study
The May 23, 2013, collapse of a section of the Interstate 5 bridge
over the Skagit River, north of Seattle, Washington, underscores the
importance of maintaining the Nation's infrastructure and the economic
impact that a bridge failure can have on a region. This testimony
addresses (1) what is known about the current condition of the Nation's
bridges and impact of Federal funding for bridges and (2) a preliminary
look at recent changes to the surface transportation and bridge program
made by the Moving Ahead for Progress in the 21st Century Act (MAP-21).
The act consolidated a number of highway programs, including the former
Highway Bridge Program. This testimony is based on prior Government
Accountability Office (GAO) reports, updated with publicly available
bridge data and information.
What GAO Recommends
GAO is not making any new recommendations. In 2008, GAO recommended
that the Secretary of Transportation work with Congress to identify and
define national goals for the Federal bridge program, develop and
implement performance measures, identify and evaluate best tools and
practices, and review and evaluate funding mechanisms to align funding
with performance. GAO closed this recommendation as implemented based
on the provisions contained in MAP-21.
What GAO Found
There has been limited improvement in bridge conditions in the past
decade, but a substantial number of bridges remain in poor condition.
Of the 607,380 bridges on the Nation's roadways in 2012, 1-in-4 was
classified as deficient. Some are structurally deficient and have one
or more components in poor condition and others are functionally
obsolete and may no longer be adequate for the traffic they serve. Data
indicate that the number of deficient bridges has decreased since 2002
even as the number of bridges has increased. The impact of the Federal
investment in bridges is difficult to measure. For example, while
Department of Transportation (DOT) tracks a portion of bridge spending
on a State-by-State basis, the data do not include state and local
spending, thus making it difficult to determine the Federal
contribution to overall expenditures. Understanding the impact of
Federal investment in bridges is important in determining how to invest
future Federal resources.
There has been progress in clarifying Federal goals and linking
Federal surface transportation programs--including bridges--to
performance. DOT worked with Congress which adopted provisions in MAP-
21, including provisions that move toward a more performance-based
highway program. MAP-21 specified that National Highway Performance
Program funds may only support eligible projects--including bridge
projects--on the National Highway System. The act also required the
Secretary of Transportation, in consultation with States and others, to
establish performance measures for bridge conditions. However, although
there has been progress in these areas, Congress and the administration
need to agree on a long-term plan for funding surface transportation.
As we noted in our 2013 High Risk Update, continuing to fund a Highway
Trust Fund shortfall through general revenues may not be sustainable
without balancing revenues and spending from the fund.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
PROCESS OF REHABILITATION
Senator Murray. Thank you very much to all of you.
I go home to Washington State every weekend. And I'm
hearing from friends, neighbors, businesses, everyone about the
impact of the Skagit River Bridge closure on their daily lives.
We've got local stores who are losing a dramatic loss of
business that they're reporting. Our large companies that move
goods up and down that highway have had to divert shipments.
And all of this is happening right in the middle of our tourism
season, which is so important to that region, too.
Crews have now removed the debris, I understand, and the
temporary detours are all in place, impacting a lot of
businesses around there. But we need a long-term fix if
possible.
Mr. Mendez, if I could start with you, can you tell us,
what is the process and where are we in getting a temporary
replacement and then the permanent repairs?
Mr. Mendez. Certainly. Thank you for the opportunity. Let
me begin by saying that, just like you, we're very thankful
that there were no casualties during this incident. And I do
have to mention that we understand there are a lot of issues
out there, a lot of bridges that are in need of replacement and
repair. But I think it's important for me to reiterate that, in
fact, at the State level--and by the way, in case you're not
aware, I used to be the State DOT director in Arizona. So I
used to be running a program.
I can assure that if we identify a bridge that is unsafe,
we will take immediate action at the State level or the Federal
level, whether that means we restrict it or close it, those are
decisions that are made at the front line. With respect to the
collapse on I-5, the Skagit River Bridge, things are moving
forward.
GOVERNMENT INTERVENTION
This is a great example of how Government came together at
the State, Federal, and local levels. They came together to
serve the needs of the citizens. Obviously, you and the
congressional delegation were right there from day one, minute
one, I should say, supporting our efforts to get everything
back on track.
I would like to recognize that Governor Inslee and
Washington State DOT, WSDOT, as they call themselves, Secretary
Peterson and her staff were right there. Within an hour, I
believe, some of WSDOT's staff were at the scene. National
Transportation Safety Board (NTSB) Chairman Hersman and her
staff, along with one of our engineers, on Friday morning were
in an airplane on their way to take a look at the situation.
At USDOT and FHWA, my staff in the State of Washington were
on the scene within 3 hours looking at the situation, working
with WSDOT. My staff here at headquarters--and I've got one of
our engineers here with us, a structural engineer--were on top
of this from day one.
And as I mentioned, that following morning, one of our
engineers from headquarters was in flight with NTSB. And then
our Central Federal Lands staff, they were also looking at
potential scenarios to be able to get the temporary bridge on
track. So we're looking at some very unique situations there.
We also faced some unique situations with respect to the
Corps of Engineers. And I'd simply have to say thanks to the
Corps. We worked very hard to get through those issues to be
able to move forward on the temporary solution.
With that, let me tell you where we are with respect to the
progress today. A couple of days ago, WSDOT moved into place
one of the temporary bridges. There will be two temporary
bridges that will be in place by June 20.
Senator Murray. One north and one south.
Mr. Mendez. One north and one south that will carry two
lanes in each direction. It will be restricted in terms of
speed, I believe. The speed limit will be restricted to 35
miles per hour. But a lot of things are in play to make this
happen by June 20.
We also, as you mentioned, are very engaged in providing
financial support to move forward with both the temporary work
that needs to be done and the permanent solution. Everybody,
again, is very engaged. We used very innovative ideas to move
this forward. Under Secretary Trottenberg mentioned earlier, we
have used innovative technology to move the temporary bridges
into place.
We also used an innovative approach, design build, to move
the procurement for the permanent replacement bridge forward.
And that's a concept we are moving forward on a national basis
as well.
And then I do want to recognize that under MAP-21, Congress
provided the ability for us to use categorical exclusions under
emergency situations. And WSDOT was the very first, this
situation was the very first utilization of that provision in
MAP-21. So that was very helpful, and I'm glad you did that
under MAP-21.
With respect to the permanent replacement, we are very
committed to making that happen by October 1. The innovations
that I just talked about and the collaboration among local,
State, and Federal governments is what's getting us there. This
is a great example of people coming together and really
addressing the community needs. As you mentioned, the collapse
has had a major impact to the quality of life, the economy in
the region, and we intend to get that resolved as quickly as
possible.
Senator Murray. Yeah. And we, everybody, really appreciates
everybody coming together, working together. You said that the
temporary replacement would be down to 35 miles an hour.
Understandable, because it's narrow. But that is going to still
have a serious consequence on a major corridor. When do you
expect the permanent bridge to be in place?
Mr. Mendez. October 1. That's our deadline. We're all
focused on that, and we intend to meet that deadline.
FRACTURE-CRITICAL BRIDGES
Senator Murray. Okay. Appreciate that. You know, the
collapse of this bridge really was a huge reminder that our
Nation's infrastructure is aging, I think to all of us. But the
recent news reports have really highlighted the fact that some
of our bridges are considered what's called fracture-critical.
And there's risk associated with the bridge design that is non-
redundant.
Mr. Mendez, can you help us understand what those two
phrases mean? And how does the Department of Transportation
prioritize and address those risks?
Mr. Mendez. Fracture-critical, that's a very interesting
concept. So let me try and address a couple of issues that I
think are very important. The fact that a bridge may have been
designed as fracture-critical does not mean that the bridge is
unsafe. As I said earlier, if we determine either at the State,
local, or Federal level that something is unsafe, we will take
immediate action to deal with that.
With respect to the design concept of fracture-critical,
there are a couple of elements in place that have been in
place, actually, for decades to address this concern. For
example, I believe this occurred maybe a couple of decades ago.
As some of these bridges were in fact being designed, and in
fact are being designed today. So I want to make sure we
understand that.
ENSURING SAFETY OF BRIDGES
There are a couple of things that we put into place to make
sure that these are safe bridges. First and foremost, there was
a fracture control plan, an approach that was actually
implemented in concert with the American Association of State
Highway and Transportation Officials (AASHTO) and FHWA about
two decades ago.
That places an extra level of rigor on the safety aspects
and elements of the fracture-critical structure. It puts
responsibility on steel manufacturers, the designers, the
fabricators, the welding inspectors, and the quality control
and quality assurance personnel to ensure that a bridge is of
high quality, that it's safe, reliable, even though it may be a
non-redundant bridge.
Senator Murray. And ``non-redundant'' means?
Mr. Mendez. ``Non-redundant'' means that there are
structures that do have redundant elements, if you will, such
that when you're looking at a bridge, it's designed to take all
the forces that are placed upon the bridge and through the
members translate the forces into a foundation.
Senator Murray. So basically, if something is fracture-
critical or non-redundant, it doesn't mean it's not safe to
drive on? You have safety measures in place to assure that they
are safe?
Mr. Mendez. That is correct.
Senator Murray. Okay.
Mr. Mendez. And can I add one more element?
Senator Murray. Sure.
Mr. Mendez. Because I think this is important for all of us
to understand, because you raised the issue of fracture-
critical.
When you look at fracture-critical bridges, there are four
elements that are very, very important as they are being
designed and as they are in operation. First and foremost, as I
mentioned, they add an extra layer of safety in the design to
account for fatigue. With respect to the materials end of it,
they increase the steel toughness. On the fabrication,
specifically the welding part of it, they put extra effort into
that and extra quality assurance on the welding components
because that is very important.
And then once it's in operation, a fracture-critical
bridge, we then have an enhanced inspection process, a more
hands-on approach to ensure that we're looking at all these
fracture-critical elements.
Senator Murray. Okay. I appreciate that. And NTSB has been
onsite and expect to have their report out. We'll be looking
very closely at that to determine what happened with this
bridge. And I apologize for going over, and I turn it over to
my colleague, Senator Collins.
Senator Collins. Thank you, Madam Chairman.
HIGHWAY TRUST FUND SOLVENCY
Under Secretary Trottenberg, the Congressional Budget
Office (CBO) projects that the Highway Trust Fund will become
insolvent in fiscal year 2015. The administration, as part of
its budget, has proposed using funds that won't be spent as a
result of the draw-downs of the war in Iraq and Afghanistan to
help finance some of our infrastructure needs.
Those funds, which are called overseas contingency
operations (OCO) funds here on the Hill, are being targeted for
virtually everything. They've been mentioned by Senator Reed,
for example, as a way to lessen the impact of sequestration.
They've been mentioned by former Senator Kyl as a means of
improving the position reimbursement under Medicare, the so-
called ``doc fix.''
This reminds me very much of a few years ago when there was
a pot of money called ``customs fees'' that were being spent
over and over and over again. And obviously, this is money that
is not really being budgeted. It's money that's not going to be
spent. So it's not as if there's even really a pot of money out
there.
So my question to you is, has the administration identified
other potential means of meeting what are truly huge
infrastructure requirements in this country?
Ms. Trottenberg. Thank you, Senator Collins. Certainly I
recall from my own time on Capitol Hill when a good source of
revenue came along, it could potentially be claimed many times
over.
Obviously, from the administration's point of view, I think
we wanted to make a priority in saying we were going to engage
in some nation-building here at home and that funds we had been
spending overseas we want to invest. But we recognize many on
the Hill have different ideas about how those funds should be
spent.
I think if you look at the past two times that Congress has
come up with revenue sources for transportation, it has been
part of a larger, overall budget negotiation, where we've
addressed a number of different things, ``doc fix,'' you name
it.
I think I can say that the White House, the administration,
we have some other ideas, potentially, about different ways we
could fund transportation. But clearly, it's going to need to
be part of a larger bipartisan discussion that we have in the
context of a budget and tax overhaul deal that's done here on
the Hill.
Senator Collins. Would you like to share with us today any
of those alternative financing main----
Ms. Trottenberg. Well, I think I'm probably not the person
to do that. I think, obviously there have been a number of good
ideas that the States have been pursuing that have been talked
about here on the Hill, different ways, potentially, you can
look at upstream revenue sources in terms of petroleum. I think
there are a lot of good ideas on the table.
My administration hasn't yet come out publicly for any of
those. But I think that the President has clearly signaled an
interest in wanting to work with Congress and find a good
solution to, obviously, what we all know is a pressing need to
find revenues for surface transportation.
Senator Collins. Mr. Herr, this is an issue that I think
GAO has taken somewhat of a look at. You mentioned the gas tax,
which is never popular to increase, but has been a traditional
source.
What other sources of revenue would be available? Are there
any innovative approaches being tried by the States? Has GAO
looked at alternative funding?
TRANSPORTATION FUNDING ISSUES
Mr. Herr. Yes. Thank you for the question, Senator Collins.
We did a report last year looking at what is called vehicle
miles traveled (VMT) as one potential option. Vehicle miles
traveled refers to assessing a fee based on the number of miles
driven in a given year. In that report, we looked at different
international experiences as well to see how it's been done,
for example, in Germany.
VMT is something that maybe does not resonate widely with
people. I think there are questions about privacy that are
associated with that approach that still need to be addressed.
TIFIA PROGRAM
Another area that was mentioned earlier was the TIFIA
program. With TIFIA, one of the things that people seem to
accept in terms of tolling are bridge tolls. People seem to
understand intuitively the idea of needing to get from point A
to point B, crossing a body of water or something similar. So,
we were encouraged to see in MAP-21 that TIFIA funding had
expanded there, too.
Senator Collins. I was going to ask one of the two of you
to explain the TIFIA program, because it was substantially
expanded by MAP-21. I believe that we authorized $750 million
for this year and $1 billion for next year, and that it's
estimated that $1 billion in TIFIA funding could leverage $10
billion in actual lending capacity.
But I don't think most people understand how this program
works. Could you give us a little tutorial on the TIFIA
program?
Ms. Trottenberg. Yes. Thank you. We are very grateful that
MAP-21 so greatly expanded the TIFIA program and we've been
getting a lot of interest around the country.
But I think one thing we always want to make clear is TIFIA
is a financing program. We lend money out, and we can lend it
out at very favorable rates. I was just looking yesterday, I
think the TIFIA interest rate now is 3 point something percent.
We can lend the money at very favorable terms. The borrowers
don't have to pay us back for a number of years.
But they do have to pay us back, so they are going to need
a revenue source to pay us back. As Mr. Herr noted, tolling is
one of the ways that people can pay us back. Sometimes, they
can do some other type of a tax like a sales tax. That's what
Los Angeles is doing to build up their metro system. Or it can
be an availability payment, which is essentially a stream of
appropriations from a State or local legislature.
The program offers very favorable lending terms, but it is
not like TIGER. It is not a grant program, or like our regular
formula programs. For communities and projects where there is a
willingness to pay for tolls, it can be a terrific program.
But I think, writ large around the country, one of the
things we're still struggling with is, there are a lot of
places where people don't want to pay tolls, particularly
potentially for existing facilities where they've been using
them for free for many years. And as you know, Senator Collins,
in the rural parts of your State, it's hard to generate enough
toll revenue to cover the cost of replacing a very old bridge.
Senator Collins. Absolutely.
Ms. Trottenberg. So it's a terrific tool in the toolbox. It
is not the complete answer to our infrastructure challenges.
Senator Collins. Are TIFIA funds available to private-
sector organizations that want to build or take over a toll
road?
Ms. Trottenberg. They have to partner with a public-sector
entity. We are seeing a lot of that. And the public sector--one
thing Administrator Mendez was talking about some of the more
innovative things we're trying to do in contracting with design
build. We are looking for ways to get the private sector to
help us bring more efficiency in terms of building and
operating projects. That can really help drive down costs, and
that's very, very important. But they do, for TIFIA, have to
work with a public-sector entity. It could be a State DOT or a
transportation agency of some sort.
Senator Collins. Thank you.
Senator Murray. Senator Boozman.
Senator Boozman. Thank you, Madam Chair.
Again, thank all of you all for being here, and I really do
appreciate your hard work.
Ms. Trottenberg, with the huge shortfalls in the Highway
Trust Fund, there is broad agreement that we must make our
infrastructure investments more efficient. I also serve on the
Environment and Public Works Committee. And in MAP-21, Chairman
Boxer, Ranking Member Inhofe worked with members to take a
balanced and thoughtful approach to project delivery reforms.
Our bill contained numerous provisions designed to increase
innovation, improve efficiency, effectiveness, and
accountability in the planning, design, engineering,
construction, and financing of the transportation projects.
PROJECT DELIVERY DEADLINES
Expediting project delivery is one area where we can make
significant improvements. MAP-21 as measured and bipartisan
National Environmental Policy Act (NEPA) reforms are a step in
the right direction, I believe. According to the inspector
general of DOT, DOT has not set any deadlines for the
implementation of MAP-21's critical NEPA reforms.
Is there a reason that the Department has not established
the deadlines for this important responsibility under the law?
Ms. Trottenberg. Thank you, Senator. I want you to know, we
agree the MAP-21 has provided us with a lot of good ways of
improving project delivery, speeding up the permitting process,
looking at a lot of innovations, and the performance measures.
That is an area that the Obama administration was working on
even prior to the passage of MAP-21. We've created an
interagency task force, essentially, to try and speed up the
transportation permitting process and get a lot of those
permits from different agencies like the Army Corps of
Engineers and Fish and Wildlife Service to move concurrently.
I think one thing Administrator Mendez testified about a
little earlier, before you came in, is that we've actually
gotten some of those categorical exclusions already out and
operating. The Skagit River Bridge is taking advantage of now
that you can get a categorical exclusion to rebuild when
there's been an emergency.
So I think we've got some of them out. I'm going to turn to
the Administrator here. I think we do have some deadlines on
some of the upcoming ones.
Senator Boozman. Yes. So, Administrator, when is it going
to get done?
Mr. Mendez. Yes, sir. I think what the report that you're
referring to means is that we don't have interim statutory
deadlines. We do have a schedule in place for all the various
activities under MAP-21 that need to be accomplished, either in
rulemaking or guidance and things like that. We do have targets
for that.
We internally have some targets that are not public. And I
believe that may be what they were referring to. We don't have
those interim statutory deadlines, but we in fact do have
internal schedules.
Senator Boozman. So, can you make them public now? When are
the NEPA reforms going to get----
Mr. Mendez. Well, there are several of them. I think it
would probably best if maybe we can coordinate and send you a
list.
Senator Boozman. Again, I appreciate it. We've all been
fighting this battle for years. This is not the first time that
this administration or the former administrations have realized
that we've got a problem.
ENVIRONMENTAL COMPLIANCE DELAY
In your testimony, Ms. Trottenberg, you talk about by the
end of 2014, the Highway Trust Fund will be nearly depleted. We
all understand that. We already transferred $54 billion over
from the General Taxpayer Fund. We'll need an additional $85
billion in general funds over the next 6 years just to keep the
program afloat at current levels, which is important because,
as you point out with the bonding, the States are depending on
current levels so that they can pay those bills back.
But I think we all agree--and again, Senator Inhofe,
Senator Boxer disagree on a whole bunch of stuff. This is
something that our subcommittee, this is something that I think
almost every Member of Congress, not to circumvent the
environmental challenges, but to get the agencies talking
together at the same time and get this done is really
important.
Now, can you all tell me what percentage of project costs
are associated with environmental compliance delay? Not doing
the right thing, but making a decision? How much is costing our
current----
Ms. Trottenberg. We've spent a lot of time looking at this
question, Senator. I think one thing that is worth remembering,
although it often doesn't seem apparent, is the vast majority
of transportation projects qualify for categorical exclusions
or they qualify for environmental assessments, a much lower
level of environment work.
That said, there are some pretty big and complicated
projects where environmental work can take up a lot of time. I
think we've tried to do our best to analyze what's happened
there, and that's part of why we've created, again within our
administration, an interagency, what we call a rapid response
team to try and untangle some of the issues.
I'll give you one that we've discovered because it's very
relevant to this discussion on bridges. The Coast Guard used to
be a part of the Department of Transportation. It's now part of
the Department of Homeland Security. One of the Coast Guard's
primary legislative mandates is to ensure that they maintain as
many navigable waterways as they can for boats of as large a
size as they can.
This can often be a conflict that we have in terms of,
we're responsible for building bridges, building them quickly,
and building them in the most cost-effective way possible.
Well, those two mandates can often be in conflict. I think one
thing we've discovered around the country is we were in a lot
of conflict on a lot of bridge building projects. I can think
of one in Senator Murray's State.
So one of the things we've done, Administrator Mendez sent
one of his top bridge engineers over to be actually embedded,
and he can talk about this, with the Army Corps to try and help
untangle what are some pretty deep-seated and complicated hold-
ups on some of these projects.
Mr. Mendez. Well, let me just reiterate that I used to be
State DOT director in Arizona. So I've been on the delivery
end.
Senator Boozman. So you understand----
Mr. Mendez. Absolutely.
Senator Boozman [continuing]. The statement about, and
again I'm not being argumentative.
Mr. Mendez. No.
CUTTING DELIVERY TIME
Senator Boozman. I don't know how long the average major
project takes now. But it's many years. And many of those years
are involved with this process. And I think we all agree, and I
know that you, unless your State is very different than my
State, that you've been very frustrated with the process. And
unless something has changed dramatically, which I don't think
it has, and yet this law would help change it significantly,
it's still taking a very, very long time in your State to get
things done.
Mr. Mendez. Yeah. We have implemented, since I've been
here, an innovation initiative. We call it Every Day Counts. My
goal under Every Day Counts is to cut project delivery by one-
half, and then to also utilize technology and innovation to
move our delivery process forward. Within MAP-21, Congress
provided some very good directives for us to implement to
address the issue that you're talking about.
For example, Congress once again provided the option for
States to take responsibility for the NEPA process. California
did it, and the last time we checked, I believe they were
saying they have actually, through a few projects that they've
done under that process, they've saved anywhere between 18 to
21 months.
Texas, we're working with them very closely. We believe
they will be the next State to utilize this authority. So we're
doing everything we can to address exactly what you're talking
about. We need to streamline the delivery process while
maintaining the environmental protections that are important
for all of us.
And, as Under Secretary Trottenberg mentioned, using the
rapid response team and bringing all those Federal agencies
together enabled us to get the permit for the Tappan Zee Bridge
in New York in less than a year. That could never have happened
if we had done it the normal process, as you're describing.
President Obama has issued several Executive orders on
permitting, project delivery, and eliminating rules and
regulations that inhibit the delivery process for
infrastructure. So we're doing everything we can to implement
not only what Congress directed us to do under MAP-21, but also
administratively a lot of things that we're doing under
innovation to move the project forward.
Senator Boozman. Thank you, Madam Chair.
Could we as a subcommittee, because I really do think that
this is important in the sense of moving with the reforms,
could we ask that we have a report on meeting the deadlines of
MAP-21, which are in the bill, in the sense of the reforms?
Senator Murray. Okay. I will ask my staff and see what the
best way of getting that information is.
[The information follows:]
FHWA has made significant progress in implementing all of MAP-21,
including rulemakings required by Subtitle C--Acceleration of Project
Delivery. With respect to statutorily required rulemakings with
deadlines under Subtitle C, we have completed one of the required
rulemakings (section 1315) and have met the statutory deadline for
issuing a notice of proposed rulemaking (NPRM) for two other
rulemakings (sections 1316 and 1317). We have developed schedules for
drafting all statutorily required rulemakings, and we are managing to
those schedules.
The Department must comply with the Administrative Procedure Act
(APA). The APA requires that agencies provide notice and the
opportunity for the public to comment. This applies to all rulemakings
regardless of whether they are statutorily required or initiated by the
Department. Agencies are required to consider all comments before
determining the next step in the rulemaking process. After considering
all comments, the Department may decide to proceed with a final rule,
issue a supplemental NPRM, withdraw the rule, or combine some of those
actions. It is the Department's practice not to establish completion
dates for final rules for which an NPRM has not been issued or for
which the comment period is still open. However, we have developed
rulemaking schedules for the NPRM stage for all rulemakings required by
MAP-21, and we are developing schedules for the next appropriate
rulemaking action soon after the NPRM comment period closes.
The Department engaged stakeholders and the public early and often
in the life of MAP-21 and has considered the input received during
these outreach sessions when drafting rulemaking. However, most
contacts with people outside of the Federal Government are prohibited
during a rulemaking. This limits our ability to collaborate with State
officials and other stakeholders during the rulemaking process, which
is currently underway for all project delivery and environmental
rulemakings with a statutory deadline.
Additionally, the Department works to keep the public informed
about the status of our rulemakings. Each month, the Department issues
an Internet report that updates the public on our progress on
significant rulemakings. Information about the Department's rulemakings
can be found at: http://www.dot.gov/regulations.
The Department has acted early and aggressively to complete
required MAP-21 rulemakings and will continue to do so. The table below
charts the Department's progress with the MAP-21 rulemakings.
MAP-21 REQUIRED RULEMAKINGS WITH STATUTORY DEADLINES
----------------------------------------------------------------------------------------------------------------
Section Title Deadline Status
----------------------------------------------------------------------------------------------------------------
1106................................. National Highway 04/01/14 (Final Rule).. On Schedule (Drafting
Performance Program. Underway).
1111................................. National Bridge and 10/01/15 (Final Rule).. On Schedule (Drafting
Tunnel Inventory and Underway).
Inspection Standards.
1112................................. Highway Safety 10/01/13 (NPRM)........ On Schedule (Drafting
Improvement Program. Underway).
1203................................. National Goals and 04/01/14 (Final Rule).. On Schedule (Drafting
Performance Management Underway).
Measures.
1313................................. Surface Transportation 06/28/13 (Final Rule).. Behind Schedule
Project Delivery (Drafting Underway).
Program.
1315................................. Categorical Exclusions 10/30/12 (NPRM)........ Completed (Final Rule
in Emergencies. Issued 02/19/13).
1316................................. Categorical Exclusions 02/28/13 (NPRM)........ On Schedule (NPRM
for Projects within Published 02/28/13;
Right-of-Way. Drafting Underway for
Final Rule).
1317................................. Categorical Exclusions 02/28/13 (NPRM)........ On Schedule (NPRM
for Projects of Published 02/28/13;
Limited Funding Drafting Underway for
Assistance. Final Rule).
1318................................. Programmatic Agreements 01/29/13 (NPRM)........ Behind Schedule
and Additional (Drafting Underway).
Categorical Exclusions.
1405................................. Highway Worker Safety.. 11/30/12 (Final Rule).. Behind Schedule
(Drafting Underway).
1525................................. State Autonomy for 03/30/13 (NPRM)........ Completed (Final Rule
Culvert Pipe Selection. Issued 01/28/13).
----------------------------------------------------------------------------------------------------------------
Senator Boozman. Okay. Again, like I said, we're
concentrating on bridges and things. When you look at the
reports, the infrastructure is terrible throughout the country.
And yet, with the fiscal crisis, we simply have to identify
ways that I think we all agree on that can lessen the costs as
we go forward. And I think this is an important thing.
So again, I'd just like to know, kind of the implementation
dates of the law and just making sure that we're getting that
done. And then if we need to be of help in getting that sorted
out, what can we do as a subcommittee to help you get the
information that you need or the resources to get it done?
Thank you.
Senator Murray. Very good. And I appreciate that request
very much.
COLUMBIA RIVER CROSSING PROJECT
And speaking of the bridge you were just speaking about, in
terms of running into the Corps and the Coast Guard, after a
very long time, it's the I-5 bridge, part of that same corridor
that the Skagit River Bridge went down is the I-5 span that
goes over the Columbia River between Vancouver, Washington, and
Portland, Oregon. It's called the Columbia River Crossing (CRC)
Project. I know you're familiar with it. We call it the CRC out
there. I actually started discussing this with former Senator
Hatfield, the Republican from Oregon, more than 20 years ago.
So I understand, Senator Boozman, when you're talking about
takes a long time to get anything done.
But it is a critical piece of infrastructure on the I-5
corridor. Needs to be replaced. It's an old bridge. It is a
major bottleneck along that corridor, and it needs to be shored
up for a lot of different reasons. We look at the bridge north
of it in Skagit and see what happens, and the dynamics that
would occur on that corridor are just incredibly difficult to
think about.
Secretary Trottenberg, I just wanted to ask you, What would
a bridge collapse like the one on the I-5 corridor between two
very large cities, Vancouver and Portland, occur on the
regional economy if that were to collapse because we didn't get
it done?
Ms. Trottenberg. Clearly, Chairman Murray, I think the
results there would be catastrophic and something I think we
greatly fear.
I do want to reiterate, though, what Administrator Mendez
has said, which is, obviously we've had the tragedy of the
Skagit River Bridge. But I think in general, we've worked
pretty closely with States to do--I mean, one thing I think in
part because of some of the good guidance of GAO and just good
work over the years with the States, we have really improved
year by year our bridge inspection regime.
Look, obviously, sometimes accidents do happen. But I
think, particularly on big, important crossings like that one
that have a huge effect on the economy and commuting times and
you-name-it, we're engaged in pretty rigorous oversight and
inspection.
But clearly, this is what we're seeing in the TIGER and
TIFIA programs, some major bridge programs, major projects that
have really what we would consider being national significance
coming to us, wanting Federal assistance.
Senator Murray. Well, this is clearly a project that we
don't want to be shut down because one of those of maintenance
says, ``No more.'' So we've been working on it for a very long
time. It's a very complex project. It's two different States,
two different cities, very different communities, very complex.
And we've now spent more than a decade just working to
secure the State and Federal funds. We've conducted scores of
reviews, working very hard to meet all of the permit
requirements. And the Federal Government has really done its
part. It's been remarkable on the level of Federal funds and
commitment to this project. And the State of Oregon has done
their part. We are now waiting on State legislators in my
State, in Olympia, to do their share.
Madam Secretary, can you talk about the need for Washington
State legislators to step up at this time?
Ms. Trottenberg. Chairman Murray, you know our own
Secretary has been out a couple of times to visit with your
legislators. I know Administrator Mendez has been there and
Administrator Rogoff from the Federal Transit Administration. I
think DOT has conveyed the message about what an important
project we think this is.
We've, as you say, put a lot of Federal resources in and I
think put a lot of time and effort into working through what
were some very, no question, complicated environmental and
operational issues. We hope to extend in continued partnership
with you all and members of your legislature.
Senator Murray. We do, too. So, thank you. Working very
hard on that.
Mr. Herr, GAO has placed funding the Nation's service
transportation system on its list of high-risk areas. That list
also includes things like acquiring defense weapons systems,
managing information on terrorism, and protecting Federal
computer systems against cyber attacks.
Can you tell us why GAO considers the financing of Federal
transportation programs to be as critical to our country as
those issues?
LONG-TERM INFRASTRUCTURE INVESTMENT PRIORITIES
Mr. Herr. Yes, it's been one of the recurring themes
through the hearing today. The debate about infrastructure
revolves around the need to make investments now as well as for
aging assets, some of which were damaged as the bridge crossing
you were just discussing in Washington State. It's been a
problem for 20 years. It takes time to get these prioritized,
it takes time to get them funded, and then additional time to
get them built.
We also see the competition that the Highway Trust Fund
faces with general revenues. Congress is always looking for an
additional revenue source and offsets. Because of that, we felt
that it rose to the prominence of putting it on the high-risk
list as a national priority. The Comptroller General felt very
strongly about that.
Senator Murray. Okay. Mr. Mendez, I wanted to ask you,
before the Skagit River Bridge collapsed, it was not scheduled
for replacement for years and years to come. Other bridges in
our State were considered a much higher priority for
significant repairs and even replacement.
I'm interested in asking you how States prioritize their
work. If the I-5 bridge over the Skagit River was not high on
the priority list, it's now collapsed, then what kinds of
conditions can we expect to find on bridges that do make it to
the top of the list for significant overhauls?
Mr. Mendez. Let me try and run briefly through the
prioritization process that is in place. And in fact, under
MAP-21, with the implementation of performance management
concepts, we believe there actually is more flexibility built
in for the States to help make those decisions.
However, we, as I've advised all of our personnel within
FHWA, even though we do support the efforts that are underway,
we don't make project selections. That's left up to the local
and State governments. We do have an influence to play in how
they prioritize.
BRIDGE INSPECTION PROCEDURES
Now, we don't make final selection. But it's important, and
again, maybe it's part of my background, that the decisions
that are made at the front line because States know best about
a lot of the issues and the factors that are happening within
the State. It would be very difficult, and I've been in that
position, to have somebody in Washington, DC, try to establish
a priority for the State of Washington.
I believe the decisionmakers, with the bridge management
systems that are in place that we promote, a lot of the
procedures that are in place in terms of the inspections of
bridges, and that level of information, really have all
information that is used to arrive at a priority.
We also at the Federal level have a national bridge
inventory that is a snapshot, once a year, that we compile of
the bridge inspection information from all the States. But
again, that's only a snapshot. A lot of the information that is
kept at the State level is in addition to what's in the bridge
inventory. And I think taking all of that information together,
plus the oversight that we provide on the bridge inspections
and the bridge program overall, helps the States determine what
are the best priorities for them.
Senator Murray. Well, the Federal Aid Highway Program is
based on the principle that States own and operate the National
Highway System. That means even though the Federal Government
provides funding for capital programs, the States set their own
priorities for these.
ADDRESSING CRITICAL CORRIDORS
So, Secretary, how can we make sure the Federal funds
address problems along our most critical transportation
corridors such as our interstate roads?
Ms. Trottenberg. Chairman Murray, I think that's really one
of the fundamental challenges that faces American
transportation in the way our system is designed. I know it's
something the GAO has written extensively and very thoughtfully
on, because we have the creative tension, which you're hearing
here. The Federal Government puts in a lot of funding, and
Congress wants to put their own priorities and policy stamp on
the work. But there is a system that has largely stayed on.
And as Mr. Mendez says, we do try and work with States and
let them also set their priorities at the State and local
level, because we can't dictate everything out of Washington;
that wouldn't work.
So it is a fundamental tension in our system. I think
again, as we've talked about today, MAP-21 is going to give us
a great opportunity to achieve some consensus throughout the
transportation community. The Federal Government, working with
States and localities, on how we can improve performance and
how we can take what are increasingly scarce Federal dollars
and put them toward national priorities and use data to help us
figure out what those priorities should be.
It will always be, I think, in the transportation space, it
will be a process where a lot of stakeholders have to be
brought along. We are not going to be heavy-handed at the
Federal level. But Congress has clearly given us a mandate to
go out and work with our stakeholders and try and transition to
a more performance-based system. We are very excited. We think
it's a great challenge. We really look forward to working with
our partners to try and make sure we're putting our investments
where they're most needed, critical bridges and highways and
transit systems around the country.
Senator Murray. Senator Boozman.
Senator Boozman. Thank you, Madam Chair.
DEPARTMENTAL APPROACH
In following up on that, and again, I know this is
difficult, I'd like to start with you, Mr. Herr, in the sense
that in your report titled ``Key Issues and Management
Challenges for DOT'' that came out, you found that the DOT's
program oversight has generally been process oriented rather
than outcome oriented. MAP-21, however, required DOT to
transition to a goal-oriented performance-based approach for
highway programs. The GAO noted that ``DOT faces institutional
barriers implementing these performance-based programs.'' And I
think that's what Ms. Trottenberg was alluding to, the fact
that we have States involved. We have congressmen involved.
Do you believe that DOT is now prepared to make the
transition? And when should Congress expect some results? So
why don't we start with you, Mr. Herr? If you can just comment
on that. And then, Director Mendez, and Director Trottenberg,
if you all would just comment on that. And then, as you said,
Ms. Trottenberg, in relation, you can comment on the kind of as
you see it from the outside. But if you all would comment on
the problems, doing that, I think that would be real helpful.
Mr. Herr. Sure.
Senator Boozman. But I think it is something we definitely
need to get done.
MAP-21 TRANSITION CHALLENGES
Mr. Herr. Yes. Thanks for the question. As discussed here,
we think MAP-21 offers an important framework for the
transition at DOT. In fact, at this point there are timelines
in the law that need to be met for implementation and
performance measures that need to be established.
That said, and it's been reflected in the discussion, the
relationship between DOT and the States, with the States
setting their priorities, is one where it's going to require a
different approach in the sense that there will be deadlines
that will be missed at the State level. There will be goals
that will be missed. And how DOT and the Federal Government
comes back and says, ``Hey, it's time to shift resources
because this particular target hasn't been met'' would be a
change in the culture of how this program has been operated
over the years.
We found instances, looking at the emergency relief
program, where some of the basic principles that had been laid
out in the regulations weren't being followed. So, DOT went
back and recovered funds, in that case, about $230 million. The
law establishes an important framework, but then the devil will
be in the details in terms of how that all works out.
It will take, I'm sure, some hard conversations that have
to be had if some of these targets begin to be missed.
Director Mendez.
Mr. Mendez. Yeah. It's a very complex topic. When I first
looked at the issue of performance management, I thought I had
a professional opinion about what it entailed. But as we
started reaching out to a lot of the stakeholders and a lot of
the transportation community, it became clear that it's a very
complex topic. So we're going to have to continue working on
this.
And we do have the schedule, which we'll share with you, on
performance management. But there is also one other element
within MAP-21 that is----
Senator Boozman. Can I ask one thing before we move on?
Mr. Mendez. Sure.
Senator Boozman. And I don't mean to interrupt. But as an
old State director, give me an example of some of the tension
that you would have in the sense of performance.
Mr. Mendez. Well, I won't speak on behalf of State DOTs.
Senator Boozman. No.
Mr. Mendez. But I'll provide my experience.
Senator Boozman. Sure.
Mr. Mendez. I think one of the issues that you
traditionally find a level of concern with is when you're using
measures, immediately after we report, let's say, the first
year of measures, a State will be compared to State Y and that
has been a concern for a lot of States: Are we going to use
performance management to actually improve the decisionmaking
process within States, or to compare States? That has been a
big concern. And so, we'll work on that.
I think our objective is to make better decisions, to make
informed decisions, and invest limited resources wisely. And I
think that's really what all of us want to do as a Nation. And
so that's just one example of some of the issues that we will
be facing.
Now, I did want to mention that within MAP-21 there is a
provision with respect to minimum standards for certain
bridges. If 10 percent or more of the total deck area of NHS
bridges in a State is on structurally deficient bridges, then
the State must devote funding from one program to really focus
on those issues.
So Congress included a provision in MAP-21 to help us
improve bridge conditions. But it is a very complex issue. We
have had outreach with over 10,000 stakeholders in the past 8
months, and we're going to continue to work on it.
Senator Boozman. Ms. Trottenberg.
Ms. Trottenberg. Yeah. As Mr. Mendez said, I mean, it's
interesting. In MAP-21 we tallied it up, and Congress gave us
100 separate legislative mandates to be implemented over a 2-
year period, which is going to turn into about 50 or 60
rulemakings. I know sometimes folks on your side say we love
rulemakings. Well, we get a lot of them from Congress. On the
performance front, we've got nine different sets of
rulemakings, not just on the highway side, but in transit and
in roadway safety.
And we are, again as Administrator Mendez pointed out,
working with State DOTs, MPOs, you name it. And the feedback
we're getting, I could safely say, is all over the map. I take
Washington DOT, which is, I think, a real leader in performance
measures. They track a lot of measures. They're very excited
about moving in this way. They're already starting to really
target dollars where they're going to get the best performance.
Some other DOTs, perhaps in States where they are in
budgetary difficulties, they don't want to track anything. They
already feel that they don't have the funds they need just to
keep their program up and running. They're very concerned
about, is DOT going to give them now, with all these
rulemakings, a complicated new regime of things to track? And
so we're really walking a fine line there. We want to move
everybody from where they are to a more performance-based
system. But as Administrator Mendez says, we have to be
careful. Every State is not in the same place. And that is a
challenge for us at the Federal level.
Senator Boozman. No, that's a good discussion, very
helpful. Thank you.
Thank you, Madam Chair.
Senator Murray. Thank you.
OVERSIZE LOAD PERMITS
I wanted to go back to what happened on the Skagit River
Bridge in my State. Like a lot of trucks that travel on our
roads and bridges, the truck that actually hit that bridge was
carrying an oversized load. When trucking companies move
oversized loads, they have to get a special permit from the
State government.
Administrator Mendez, can you tell me what the Federal role
is in the permitting process?
Mr. Mendez. I think you may have raised a couple of issues.
One is the weight issue, and one is the height issue.
On weight and height issues, basically, the States provide
the permits for both. Specific to the height issue, we
administer and publish the Manual on Uniform Traffic Control
Devices, the MUTCD for short. This is a document that basically
provides standards for devices on streets, highways, and
bicycle trails that are open to the public. We provide a
standard that low-clearance signs, warning signs, must be
provided when a clearance is less than 12 inches above the
State statutory vehicle height.
Now, the complication there is that every State may have
different maximum vehicle heights. So, if you're a trucker
going through various States, you have to be on the lookout
for----
Senator Murray. Which you do on the I-5 corridor.
Mr. Mendez. Yes, you do. And so, that's our role, to ensure
that through the MUTCD, we provide that level of oversight and
direction.
Now, it's up to the individual States to execute the
direction. And so, on the Skagit River Bridge incident, I know
NTSB is still reviewing that. I do know they have a preliminary
report on the Web site that provides some preliminary
information. But we're going to wait until the end of their
conclusions to see what next steps we need to take.
Senator Murray. Or if there are any recommendations.
Mr. Mendez. That is correct.
NEW TECHNOLOGIES TO IMPROVE SAFETY
Senator Murray. Okay. There's a lot of new technologies
that can make it easier to access data if you're a truck driver
going through different places with different regulations.
Those technologies actually could help make bridge clearances
more accessible to highway users.
Has the Department looked at any of those new technologies
about how they could help create some better safety traffic to
prevent future accidents like we had in Washington State?
Mr. Mendez. Actually, just this past March, we started a
research project with technology to get to the exact issue I
believe you're talking about.
Senator Murray. Describe it to us.
Mr. Mendez. My understanding is that it's a technology that
will help identify height clearances, or opening, I think is
the way it's framed, as trucks move through the bridges in this
case, or tunnels. So we're looking at the technology side to
see if there's a solution there.
Senator Murray. Okay. Well, this has been a very helpful
hearing. Certainly, what happened at home in Washington State
on the Skagit River Bridge has just been an eye-opener for
everyone in my State. But as we have talked about here, this is
not a unique challenge. There are many, many bridges in my
State and across the country. Certainly, you've all talked
about the funding challenge as we try to replace this aging
infrastructure. And we will be looking very seriously at that
in this committee as we move forward in the appropriations
process.
ADDITIONAL COMMITTEE QUESTIONS
So I appreciate all of you coming here. This subcommittee
will hold the record open for 1 week for any additional
questions, and look forward to your comments. And again, thank
you to all of you for participating.
[The following questions were not asked at the hearing, but
were submitted to the Departments for response subsequent to
the hearing:]
Questions Submitted to Hon. Polly Trottenberg
Questions Submitted by Senator Patty Murray
Question. When trucking companies move oversized loads on the
national highway system, they must obtain a special permit. What is the
Federal role in the process of permitting oversize loads, with regard
to both overweight and over height loads?
Answer. States are responsible for issuing oversize/overweight
permits that govern truck movement on highways within the State. In
some regions of the country, applicants can receive a multi-state
permit. These special permits are issued based on a number of factors,
including the size and weight of the load, the geometry and condition
of bridges and highways on the requested route, the presence of highway
construction work zones, day and time of travel, and other conditions
necessary to ensure safe travel.
Federal oversight of State permitting activities is not
administered on a per load basis, rather, States are required to
certify annually to the Federal Highway Administration (FHWA) that
State and Federal truck size and weight laws are being enforced, report
on the number of citations that have been issued, and report on the
number and type of load permits that were issued. Failure to certify
can trigger penalties to be applied against the State's Federal-aid
highway program funds.
Question. In the case of the Skagit River Bridge, there were
questions about the height of the truck and whether any height
limitations were marked on the bridge. What are the Federal
requirements for signage and how does the Department of Transportation
(DOT) work with States on uniform standards for posting clearances?
Answer. The Federal Highway Administration issues the Manual on
Uniform Traffic Control Devices (MUTCD) to establish a national
standard for all traffic control devices installed on any street,
highway, or bicycle trail open to public travel. The MUTCD requires the
use of a low clearance sign to warn traffic of clearances less than 12
inches above the State statutory maximum vehicle height. Each State
sets its own statutory maximum vehicle height. When the clearance is
less than the State's legal maximum vehicle height, the MUTCD
recommends that a low clearance sign be erected along with a
supplemental distance plaque at the nearest intersecting road or wide
point in the road at which a vehicle can detour or turn around.
Question. The Moving Ahead for Progress in the 21st Century Act
(MAP-21) consolidated many of the smaller highway programs, eliminating
funding dedicated to bridge projects under the Safe, Accountable,
Flexible, Efficient Transportation Equity Act: A Legacy for Users
(SAFETEA-LU). Given this consolidation, how can DOT's rules
implementing MAP-21 encourage States to spend adequate funds on the
repair of existing infrastructure? How can the rules help States to set
meaningful repair targets and prioritize investments to achieve a state
of good repair for bridges?
Answer. MAP-21's transition to a performance and outcome-based
program will provide a means to more efficient investment of Federal
transportation funds. The use of performance management principles will
allow States and Metropolitan Planning Organizations (MPOs) to evaluate
the performance trade-offs of different investment strategies and make
more informed decisions when investing in the highway network,
including bridges.
MAP-21 requires each State to establish a risk-based asset
management plan and a bridge management system for its National Highway
System (NHS) facilities. MAP-21 also includes requirements that hold
States accountable for the condition of their bridges. If, for a 3-year
period, more than 10 percent of a State's NHS bridge deck area is on
bridges classified as structurally deficient, then the State must
reserve a portion of its National Highway Performance Program funds
exclusively to address the problem. In this situation a State must also
reserve a portion of its Surface Transportation Program apportionment
for the improvement of bridges that are not on Federal-aid highways.
Question. Additionally, States apply a strategic and systematic
process for operating, maintaining, and improving their bridges with a
focus on engineering and economic analysis to arrive at an overall
program of maintenance, preservation, rehabilitation, replacement, and
protection actions. As part of this process, States evaluate bridge
conditions and expected deterioration rates, risk factors (such as
vulnerability to seismic loads, vehicular or ship impact), scour,
security concerns, impact to local communities, and availability of
funding. The list of considerations that ultimately lead to the
selection of projects is varied and often site-specific. The overall
selection of bridge projects generally supports performance targets
that States have established related to conditions and functionality of
their bridge inventory. By the time MAP-21 expires, Congress will have
transferred tens of billions of dollars in general fund revenues to the
Highway Trust Fund (HTF) to fund our transportation system. If,
beginning in fiscal year 2015, outlays from the HTF were limited to
match receipts, how much would overall apportionments drop?
Answer. Using estimates from the fiscal year 2014 President's Mid-
Session Review (MSR) released in July 2013, FHWA could distribute $16
billion in new obligation limitation and $739 million in exempt funding
in fiscal year 2015. This assumes that $4.6 billion in carryover
balances would be available at the beginning of fiscal year 2015 and
the Highway Account of the HTF would have a zero balance at the end of
fiscal year 2015.
______
Questions Submitted by Senator Richard J. Durbin
highway public-private partnerships
Question. In 2008, the Government Accountability Office (GAO)
issued a report entitled ``More Rigorous Up-Front Analysis Could Better
Secure Potential Benefits and Protect the Public Interest.'' In this
report, GAO noted that the Department of Transportation (DOT) has
promoted public-private partnerships (PPPs), but has done little to
help State and local governments evaluate the trade-offs involved in
entering a public-private partnership or determine how such
partnerships can be established in a way that protects the national
interest. GAO recommended that the Department develop objective
criteria for identifying potential national public interests in highway
public-private partnerships and identify additional legal authority,
guidance or assessment tools that may be needed for the Department to
play a targeted role in ensuring that such national interests are
appropriately considered in the development of public-private
partnerships.
The fiscal year 2013 Transportation, Housing and Urban Development,
and Related Agencies Senate report included language directing the
Secretary of Transportation to develop such objective criteria and
identify additional legal authority, guidance or assessment tools, as
recommended by the GAO.
When will DOT develop these criteria and identify additional legal
authority, guidance or assessment tools and provide them to the
subcommittee?
Answer. We at the Department are happy to work with Congress in
order to better promote public-private partnerships and agree there is
an important Federal role in not only ensuring national interests are
considered, but also in providing a robust framework for State and
local governments to evaluate potential tradeoffs and seek best
practices in innovative project development and delivery.
Section 1534 of the Moving Ahead for Progress in the 21st Century
Act (MAP-21) directs the DOT to undertake a number of activities to
support the prudent use of the public-private partnership (P3) option
for delivering highway projects while protecting the public interest.
The Federal Highway Administration (FHWA) Office of Innovative Program
Delivery is actively engaged in these development activities, which
include the development of model P3 transaction contracts, the
dissemination of best practices, and the provision of technical
assistance to public agencies.
The P3 model contracts will help to educate public agencies and
stakeholders on key provisions in highway P3 contracts, the trade-offs
that have to be made, and ways to provide protections to the traveling
public and State and local governments. Best practices will be
developed and posted on the FHWA Web site addressing practices in each
of the four key phases of a P3 project that are focused on delivering
value and protecting the public interest while continuing to attract
private sector investment. The model contracts will be completed by
April 1, 2014, and we anticipate posting best practices starting in
summer 2014.
FHWA's P3 technical assistance activities include the development
of reference materials, guidebooks, primers and tools to assist in
educating public sector policymakers, legislative and executive staff,
and transportation professionals on P3s. FHWA recently launched a P3
Toolkit on FHWA's Web site at www.fhwa.dot.gov/ipd/p3/toolkit. The
Toolkit will eventually include materials addressing Federal
requirements related to P3s as well as four key phases of P3
implementation: development of legislation and policy, planning and
evaluation, procurement, and monitoring and oversight.
The initial components in the Toolkit are focused on the planning
and evaluation phase. A particularly noteworthy element of the tool kit
is the P3 Value-for-Money Analysis To Learn and Understand Evaluation
(P3-Value) tool. P3-Value is an Excel-based educational tool supported
by primers, user guides and other guidebooks. Using P3-Value,
practitioners will gain hands-on exposure to, and understanding of, the
concepts and complex steps involved in conducting a value-for-money
analysis to evaluate whether a P3 delivery option offers value in
comparison to traditional delivery methods. Additional materials will
be added to the broader P3 Toolkit as they are developed.
highway public-private partnerships and excess toll revenue
Question. The same GAO report recommended DOT take action regarding
public-private partnerships and excess toll revenue. The GAO report
stated, ``to ensure that future highway public-private partnerships
meet Federal requirements concerning the use of excess revenues for
federally eligible transportation purposes, we recommend that the
Secretary of Transportation direct the Federal Highway Administrator to
clarify Federal-aid highway regulations on the methodology for
determining excess toll revenue, including the reasonable rate of
return to private investors in highway public-private partnerships that
involve Federal investment.''
What action has DOT taken on this recommendation?
Answer. We believe that this recommendation in GAO Report 08-44 has
been overtaken by changes made to the relevant statutory language in 23
U.S.C. 129 under MAP-21. First, the limitations on the use of toll
revenues under 23 U.S.C. 129(a)(3) no longer include a reference to
``excess'' toll revenues being used for other title 23 eligible
purposes; instead, such uses are simply allowed so long as the facility
is adequately maintained.
Second, the provision in 23 U.S.C. 129(a)(3) allowing toll revenue
to be used for ``a reasonable return on investment of any private
person financing the project'' was modified in MAP-21 to include the
phrase ``as determined by the State or interstate compact of States
concerned.'' In adding this language, we believe that Congress has
expressed its intent that DOT should not be involved in determining
whether such returns are reasonable, and we thus do not intend to issue
any regulations on this topic.
non-compete clauses
Question. Some recent public-private partnership transactions have
included ``non-compete'' clauses where a local government, by contract,
commits itself not to build roads or transit within a corridor of a
certain highway. Other deals include ``compensation clauses'' that
require the local sponsor to pay the private entity for reduced traffic
or tolls. Some of these deals involve long-term leases of 75 to 99
years in which the public owner relinquishes control of the
transportation infrastructure. For example, the Indiana toll road
privatization deal required the State not to build a competing highway
within 10 miles on either side of the highway. Sixty percent of traffic
on Indiana toll road is interstate in nature, making this a critical
corridor to the national transportation network and economy.
How does DOT weight or otherwise consider the terms of non-compete
clauses and their impact on the national public interest? How are non-
compete clauses taken into consideration when evaluating Transportation
Infrastructure Finance and Innovation Act (TIFIA) applications?
Answer. Non-compete clauses and compensation clauses are among the
many factors which can impact the creditworthiness of a project. MAP-21
modified 23 U.S.C. 602(b) directing the Secretary to provide TIFIA
credit assistance to projects found to be eligible according to
creditworthiness standards. This statute precludes the Department from
considering the impact of non-compete or compensation clauses outside
of their impact on the creditworthiness of a loan.
______
Question Submitted by Senator Tim Johnson
Question. As we discuss the critical transportation needs of our
Nation, I would like to take the opportunity to ask about a narrower,
but still important, potential infrastructure issue. Motorcycles are
very important to my State. According to the city of Sturgis, the
annual Sturgis Motorcycle Rally generates more than $800 million in
economic activity to the region from an estimated 417,000 visitors who
stay an average of nearly 6 days. That's a lot of riders, who cover
millions of miles across multiple States and who experience all sorts
of road conditions on their way to my State. What more can we be doing
to ensure that the safety of some of our most vulnerable road users,
motorcyclists, is considered as our Nation's infrastructure is updated,
repaired or maintained?
Answer. Over the last 15 years, the number and rate of motorcyclist
fatalities on America's highways have generally risen dramatically.
According to crash data for 2011, 4,612 motorcyclists were killed. The
Department of Transportation is engaged in a number of activities,
including research, technical guidance, and partnerships with
motorcycle organizations, to help States and local partners reduce the
number of motorcyclist fatalities and injuries on our Nation's
roadways.
In 2011, the Department spearheaded a domestic scan focused on
motorcycle safety. The scan, supported by the National Cooperative
Highway Research Program, led to the issuance of ``Leading Practices
for Motorcyclist Safety'' which highlights a broad array of effective
practices that can be adopted at the State, city, and county levels to
address motorcyclist safety.
In 2010, a multidisciplinary team of Federal, State, local
government and association officials met with officials from five
European countries to assess and evaluate infrastructure improvements
designed to aid motorcyclists. The information obtained by the team
included several design, maintenance, and operational changes that
could be implemented in the United States to improve motorcyclist
safety. As a result, the Federal Highway Administration (FHWA) is
implementing Road Safety Audits (RSAs) on sites with high motorcycle
crashes and will be developing a case study report that summarizes the
costs, benefits, and lessons learned for each RSA. This document should
provide State and local agencies with examples and advice that can
assist them in implementing motorcycle RSAs in their own jurisdictions.
The FHWA is also currently conducting a Motorcycle Crash Causation
Study (MCCS). The collected data will be used to study potential causes
of motorcycle crashes to help develop countermeasures. The MCCS is the
most comprehensive research effort into the causes of motorcycle
crashes in the United States in more than 30 years. The data collection
will continue through 2014, and a final report is expected in 2015.
The Highway Safety Improvement Program (HSIP) provides Federal
safety funds to States, with the primary goal of reducing fatalities
and serious injuries on all public roads, including those traveled by
motorcycles. HSIP funds can be used for strategies, activities or
projects on a public road that are consistent with a State Strategic
Highway Safety Plan and correct or improve a hazardous road location or
feature, or address a highway safety problem. Example projects to
improve motorcycle safety may include installing hazard warning signs,
high friction pavements, and conducting motorcycle safety education
campaigns.
The Department supports the use of motorcycle helmets by all
riders. Motorcycle helmet laws covering all riders, often referred to
as universal helmet laws, are the most effective method of increasing
and maintaining helmet use and avoiding fatalities and disability due
to head injuries. Yet only 19 States, the District of Columbia and
Puerto Rico have universal helmet laws that require all riders to wear
a helmet. In 2012, use of compliant motorcycle helmets was nearly 90
percent in States with universal laws compared to about 50 percent in
States without these laws. Over the past 30 years, research has
consistently shown the negative effects of weakening or repealing
motorcycle helmet use laws. The weight of the evidence is that repeal
of helmet use laws decreases helmet use, and that States that repeal
universal helmet use laws experience increased fatalities and injuries.
Conversely, States that have adopted or reenacted universal laws have
experienced significant increases in helmet use and declines in
motorcyclist fatalities and injuries.
The safety of all road users, including motorcyclists, is important
to the Department and we will continue to help States and local
partners reduce the number of fatalities and injuries on our Nation's
roadways.
______
Questions Submitted by Senator Mark Kirk
Question. With the Nation facing a critical shortfall in
infrastructure funding it is important that the Federal Government
explore ways to encourage private investment in infrastructure
projects. Private activity bonds serve as a valuable mechanism to jump
start critical infrastructure development and encourage public-private
partnerships.
Does the Department of Transportation believe the statutory cap for
highway and freight transfer facility private activity bonds should be
lifted or increased in light of this?
Answer. The President's fiscal year 2014 budget request included an
increase in the statutory cap for highway and freight transfer facility
private activity bonds from $15 billion to $19 billion. As a result of
a growing interest in private activity bonds, the Department currently
anticipates hitting the current $15 billion cap in the next 2 to 3
years. The Department supports raising the cap to provide longer-range
certainty to project sponsors that private activity bonds will remain a
viable tool for financing public-private partnerships.
Question. Understanding that rail and bridge projects are difficult
to fund, it is even more critical to improve efficiencies of current
programs, such as the Railroad Rehabilitation and Improvement Financing
program (RRIF), to make the program more attractive to improve our rail
infrastructure. It was noted in the President's fiscal year 2014 budget
request that on average RRIF loans take 695 days to process, more than
seven times longer than the statutory requirement.
What is the Department of Transportation doing to improve this
process and decrease the processing wait time for RRIF loans requests
within the statutory requirement of 90 days?
Answer. As you know, the Department is very supportive of
increasing investment in our rail freight infrastructure, and the RRIF
program is a valuable tool for providing Federal credit assistance to
support rail projects. As a consequence, we are working hard to
identify ways to improve the application process.
First, the Federal Railroad Administration (FRA) has been working
more intensively with applicants at the pre-application stage of the
process to encourage more efficient review once the application is
submitted. At pre-application meetings, FRA informs applicants how to
demonstrate viable project and financing structures in their
applications.
FRA is also taking innovative approaches to working with short
lines such as partnering with State entities that support railroad
applicants' projects (e.g., Ohio Rail Development Commission (ORDC)).
Often, these organizations have more resources or expertise in the
areas of finance and/or Federal financing than the requesting
railroads.
FRA is also considering a shorter review process for smaller,
simpler applications.
Question. Does the Department have recommendations to improve the
RRIF program and make it more attractive for private investment?
Answer. The Department of Transportation (DOT) and FRA strongly
support RRIF financing coupled with private investment for rail
improvements. As mentioned earlier, FRA is also considering a shorter
review process for smaller RRIF applications. FRA will continue to
evaluate potential program changes and would be happy to work with the
subcommittee in its reauthorization efforts.
Question. Seeking alternative ways to finance transportation
projects and battle growing congestion, the Value Pricing Pilot Program
(VPPP) is one effort that provides States with limited authority to
toll interstates to fund improvements, reduce congestion, improve air
quality and rehabilitate aging roads.
Currently, the State participation in VPPP is limited to 15. In a
world of constrained resources, do you believe the number of slots
available to States to participate in VPPP should be increased?
Answer. As you are aware, the VPPP is an experimental program that
is designed to assess the potential of different value pricing
approaches for reducing congestion. Under this program, tolls may be
imposed on existing toll-free highways, bridges, and tunnels, so long
as variable pricing is used to manage demand. Other eligible activities
under this program include pre-implementation studies and value pricing
pilot projects that do not involve tolls; however, under the Moving
Ahead for Progress in the 21st Century Act (MAP-21), no additional
funding has been authorized for this program. Slots under the VPPP are
allocated to State or local agencies; once an agency holds a slot in
the program, there is no limit on the number of value pricing projects
that can be implemented under the slot. At the present time, 7 of the
15 authorized slots have been permanently allocated to States that have
executed agreements for tolling projects under the program. The
remaining eight slots have been temporarily reserved for State agencies
that are currently pursuing value pricing studies and non-toll value
pricing projects; these slots may become available in the future as
those activities are completed.
The Department does not have a position on whether Congress should
amend the statute authorizing the VPPP to increase the number of slots
available under this program.
Question. Section 1512 of MAP-21 amended 23 U.S.C. 129 to provide
additional flexibility for new capacity tolling, so long as the number
of free lanes does not decrease. As in previous law the legislation
also authorized toll agreements for the reconstruction of a toll-free
Federal-aid highway other than a highway on the interstate system. This
sets up a potential situation where a State toll authority could both
reconstruct an existing non-interstate Federal-aid highway and add
capacity in the same project. However, converting the existing free
lanes to a tolled facility under 23 U.S.C. 129 (a)(1)(F) could be
interpreted to violate the requirements of 23 U.S.C. 129 (a)(1)(b).
Clearly the reconstruction and conversion of existing free non-
interstate Federal-aid highways to tolled facilities is authorized
under MAP-21. Can the Department confirm that projects that seek both
reconstruction and expansion of additional lanes will be allowed to
move forward?
Answer. The DOT agrees with your interpretation of these tolling
provisions. This situation is addressed in a set of questions and
answers on the section 129 tolling program that have recently been
posted on the FHWA Web site, available at http://www.fhwa.dot.gov/ipd/
revenue/road_pricing/tolling_pricing/section_129_
faqs.htm. (See Question 13:)
``Question 13: May new lanes added to an existing toll-free non-
Interstate highway, bridge, or tunnel be tolled under 23 U.S.C. 129(a)?
``Answer 13: Yes. Under 23 U.S.C. 129(a)(1)(B), a new lane that is
to be initially constructed may be tolled so long as the total number
of toll-free lanes, excluding auxiliary lanes, after construction is
not less than the number of toll-free lanes, excluding auxiliary lanes,
before construction.
``Note that if the improvement project also includes the
reconstruction or replacement of the existing lanes in addition to
capacity expansion, then the entire facility may be tolled pursuant to
23 U.S.C. 129(a)(1)(E) (for bridges and tunnels) or 23 U.S.C.
129(a)(1)(F) (for highways).''
______
Questions Submitted to Phillip R. Herr
Questions Submitted by Senator Richard J. Durbin
Question. Has the Department of Transportation (DOT) taken adequate
action in response to your recommendations in the 2008 report? What
other actions can DOT take to better protect public interests in
public-private partnership transactions?
Answer. DOT has taken action to implement provisions of Public Law
112-141, the Moving Ahead for Progress in the 21st Century Act (MAP-
21), which responds to recommendation in our 2008 report that DOT
better protect public interests in public-private partnership
transactions (see GAO-08-44). Our report noted that highway public-
private partnerships provide advantages for State and local
governments, but that potential costs and trade-offs exist. We
concluded that while DOT had done much to promote the benefits of
public-private partnerships, it had done comparatively little to either
help States and localities weigh the potential costs and trade-offs, or
to assess how national and public interests might be protected in these
arrangements.
MAP-21 directed the Secretary to compile and make available on its
Web site best practices on how States and localities can work with the
private sector on transportation projects, provide technical assistance
to States and localities regarding proposed public-private partnership
agreements, and develop standard public-private partnership transaction
model contracts for the most popular types of transportation public-
private partnerships. Through its Office of Innovative Program
Delivery, the Federal Highway Administration has developed a number of
primers, including a toolkit for State legislators, and recently
undertook a public outreach process to inform development of standard
public-private partnership transaction model contracts.
Our 2008 report also recommended that DOT clarify its regulations
on the methodology for determining excess toll revenue, including a
reasonable rate of return to private investors. We believe such
clarification remains important to ensuring that future highway public-
private partnerships that involve Federal funding meet Federal
requirements that excess revenues be used only for federally eligible
transportation purposes. DOT declined to implement this recommendation
and DOT officials told us they believe this is a decision best left to
the States.
Question. The GAO has testified that long-term leases of existing
transportation assets are driven in large part by the tax benefits
accrued to the private lessor of the asset. However, these tax benefits
are often not part of the publicly available information regarding
privatization transactions. What value would greater transparency of
the tax benefits and financing details of public-private partnerships
have for stakeholders in understanding of the benefits and risks of
these deals?
Answer. The private sector can receive potential tax deductions
from depreciation on assets involving private sector investment and the
availability of these deductions were important incentives to the
private sector to enter some of the highway public-private partnerships
we reviewed in our 2008 report (see GAO-08-44). Federal tax law allows
private concessionaires to claim income tax deductions for depreciation
if the concessionaire has ``effective ownership'' of the property.
Effective ownership may require lengthy concession periods; among other
things, the length of a concession must be greater than or equal to the
useful economic life of the asset. Financial and legal experts told us
that this requirement contributed to the 99-year and 75-year concession
terms for the Chicago Skyway and Indiana Toll Road, respectively.
Making tax benefits more transparent would help to ensure that all
stakeholders have a complete understanding of the benefits and risks
over the lifetime of public-private partnership arrangements. However,
State and local stakeholders may not be concerned about any revenue
costs to the Federal Government resulting from tax deductions.
The benefit of greater disclosure of benefits and risks is not
limited to public-private partnerships. Federal law requires sponsors
of federally funded projects costing more than $500 million (or any
project receiving a Transportation Infrastructure Finance and
Innovation Act of 1998 (TIFIA) loan) to have financial plans designed
to provide reasonable assurance that sufficient financial resources
will be available to complete a project. However, DOT does not
presently require States to present an estimate of the financing costs
of major projects, which can be substantial. For example, in 2009,
Maryland DOT officials provided us the estimated financing costs
associated with the Intercounty Connector project, which were $1.4
billion, more than half as much as the $2.5 billion estimated cost of
designing and constructing the project itself. Financing costs can
consume large shares of States' Federal and other transportation
funding over several years and constrain a State's transportation
capital improvement program. Disclosing these costs, which we
recommended in 2009 (see GAO-09-751), would help decision makers
consider and make fully informed decisions about whether to approve the
substantial investment of public funds that major projects require. DOT
officials have told us they are planning to implement our
recommendation in the fall of 2013.
Question. What practices or guidelines ensure that specific non-
compete and compensation clauses are adequately considered by DOT when
evaluating TIFIA applications?
Answer. The inclusion of non-compete or compensation clauses in
projects with TIFIA credit assistance is a local decision. Project
sponsors must determine how best to structure a contract for a project
with a TIFIA component. If non-compete or compensation clauses are
included, the TIFIA office considers those clauses from both a legal
and a credit perspective. Specifically, the TIFIA office determines if
the non-compete or compensation clauses are legally sound, and if so,
how the clauses might affect a project's creditworthiness, which is a
primary component of the TIFIA selection process.
CONCLUSION OF HEARING
Senator Murray. And with that, the hearing is recessed.
[Whereupon, at 11:34 a.m., Thursday, June 13, the hearing
was concluded, and the subcommittee was recessed, to reconvene
subject to the call of the Chair.]
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