    [Senate Hearing 114-20]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 114-20

                   THE IMPORTANCE OF MAP_21 REAUTHORIZATION:
                      PERSPECTIVES FROM OWNERS, OPERATORS,
                            AND USERS OF THE SYSTEM

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

                                    HEARING

                                   BEFORE THE

                                  COMMITTEE ON
                          ENVIRONMENT AND PUBLIC WORKS
                              UNITED STATES SENATE

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                               FEBRUARY 25, 2015

                                   __________

      Printed for the use of the Committee on Environment and Public Works

      [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

           Available via the World Wide Web: http://www.fdsys.gpo.gov

                                   __________

                         U.S. GOVERNMENT PUBLISHING OFFICE
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                   COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                        ONE HUNDRED FOURTEENTH CONGRESS
                                 FIRST SESSION

                      JAMES M. INHOFE, Oklahoma, Chairman
    DAVID VITTER, Louisiana              BARBARA BOXER, California
    JOHN BARRASSO, Wyoming               THOMAS R. CARPER, Delaware
    SHELLEY MOORE CAPITO, West Virginia  BENJAMIN L. CARDIN, Maryland
    MIKE CRAPO, Idaho                    BERNARD SANDERS, Vermont
    JOHN BOOZMAN, Arkansas               SHELDON WHITEHOUSE, Rhode Island
    JEFF SESSIONS, Alabama               JEFF MERKLEY, Oregon
    ROGER WICKER, Mississippi            KIRSTEN GILLIBRAND, New York
    DEB FISCHER, Nebraska                CORY A. BOOKER, New Jersey
    MIKE ROUNDS, South Dakota            EDWARD J. MARKEY, Massachusetts
    DAN SULLIVAN, Alaska

                     Ryan Jackson, Majority Staff Director
                   Bettina Poirier, Democratic Staff Director

                                C O N T E N T S

                                  ----------
                                                                       Page

                               FEBRUARY 25, 2015
                               OPENING STATEMENTS

    Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...     1
    Boxer, Hon. Barbara, U.S. Senator from the State of California...     2

                                   WITNESSES

    Braceras, Hon. Carlos, Executive Director, Utah Department of
      Transportation.................................................     4
        Prepared statement...........................................     7
    Heminger, Steve, Executive Director, Metropolitan Transportation
      Commission.....................................................    14
        Prepared statement...........................................    16
    Riordan, Thomas J., President and CEO, Neenah Enterprises, Inc...    20
        Prepared statement...........................................    22
    Gardner, David, Vice President, Supply Chain and Customer
      Experience, Ingredion Incorporated.............................    30
        Prepared statement...........................................    32
    Rowen, Walt, President, Susquehanna Glass Company................    36
        Prepared statement...........................................    38

                              ADDITIONAL MATERIAL

    HTF Revenue Options..............................................    66

      THE IMPORTANCE OF MAP-21 REAUTHORIZATION: PERSPECTIVES FROM OWNERS,
                       OPERATORS, AND USERS OF THE SYSTEM

                                  ----------

                          WEDNESDAY, FEBRUARY 25, 2015

                                           U.S. Senate,
                     Committee on Environment and Public Works,
                                                        Washington, DC.
        The committee met, pursuant to notice, at 9:30 a.m. in room
    406, Dirksen Senate Building, Hon. James Inhofe (chairman of
    the committee) presiding.
        Present: Senators Inhofe, Boxer, Boozman, Crapo, Vitter,
    Rounds, Capito, Wicker, Carper, Whitehouse, Gillibrand.

                OPENING STATEMENT OF HON. JAMES INHOFE,
                U.S. SENATOR FROM THE STATE OF OKLAHOMA

        Senator Inhofe. The hearing will be open.
        Let me thank the five of you who have come from far
    corners. We appreciate very much your being here. Our feeling,
    and I know I speak for Senator Boxer, we kind of need to get an
    outside the Beltway perspective. So this is the opportunity
    that we have for it. We appreciate very much the witnesses
    being here.
        Unfortunately, what used to be the best transportation
    system in the world is now deteriorating, and our global
    competitors are greatly outpacing us in infrastructure
    investment. We hear this, and we see this as we go around, we
    see what is happening in China, we see what is happening in the
    other countries. The American businesses rely on an efficient,
    reliable transportation network. More than 250 million vehicles
    traverse the highway system each year and businesses require a
    reliable transportation system.
        Now, I think anything I would say for members of this panel
    and for the five of you who have come in here to testify, it
    would be redundant. You are all familiar with the crisis that
    we are facing right now. We have Gary Ridley, whom Senator
    Boxer and I know very well, from Oklahoma, who has testified
    probably than anyone else has before this committee over the
    past 20 years or so. And the rest of you, we appreciate very
    much your being here.
        I am not going to use my time, because in case that Senator
    Vitter comes, who is the chairman of the subcommittee, I want
    him to have that opportunity. So with that, I will retain the
    balance of my time.
        [The prepared statement of Senator Inhofe follows:]

                Statement of Hon. James M. Inhofe, U.S. Senator
                           from the State of Oklahoma

        Welcome to today's hearing. This is the second highways
    hearing we have held this year. As I have said many times, my
    top priority this year is to pass a fiscally responsible, long-
    term highway bill. I am confident that we will be successful in
    passing a bill, and I thank the witnesses for being here today
    to help us achieve that goal.
        Unfortunately, what used to be the best transportation
    system in the world is now deteriorating, and our global
    competitors are greatly outpacing us in their infrastructure
    investment. I am glad that we have manufacturers before us
    today to discuss how important transportation is to their
    businesses and the jobs they support.
        American businesses rely on an efficient and reliable
    transportation network. More than 250 million vehicles traverse
    the highway system each year and businesses require a reliable
    transportation network to operate.
        But every day, 20,000 miles of our highways slow below
    posted speed limits or experience stop-and-go conditions. This
    type of congestion has a huge negative impact on America's
    businesses.
        Unfortunately, congestion is becoming more and more of a
    problem for American businesses. In its 2013 Report Card for
    America's Infrastructure, the American Society of Civil
    Engineers gave America a ``D'' grade on the condition of the
    Nation's roads and a ``C+'' on the condition of the Nation's
    bridges.
        As we are all aware, the Federal highway program is
    operating on a short-term extension that expires at the end of
    May.
        My staff has been working with Senator Boxer's staff on a
    long-term bill that will give our partners the certainty they
    need to plan and construct important transportation projects.
        Our infrastructure investments are a partnership between
    the Federal Government and the States. We need to keep up our
    end of the bargain and pass a fully funded, long-term bill.

               OPENING STATEMENT OF HON. BARBARA BOXER,
               U.S. SENATOR FROM THE STATE OF CALIFORNIA

        Senator Boxer. Senator, is it my turn?
        Senator Inhofe. Yes.
        Senator Boxer. Thank you.
        Mr. Chairman, you and I don't agree on a lot, we know that.
    But we do agree on the absolute importance of having a Class A
    transportation system. I think that this partnership that we
    have shown over the years is more critical now than perhaps
    ever, because we are just a few months away from a shutdown of
    the Highway Trust Fund. And I am going to ask unanimous consent
    to put my statement into the record, if I might.
        Senator Inhofe. Without objection. I will also put mine
    into the record.
        Senator Boxer. OK. I am going to summarize it in 2 minutes.
        Here is the thing. We are going to hear today from this
    diverse panel. I am so proud, Steve, you are here. We are
    hearing it from every stripe, from red States, from blue
    States, from purple States, from conservatives and liberals
    alike. We need a bill and we need it now.
        I want to say that last Congress, this committee, to the
    shame of the Senate and the House, and I say that knowing
    Democrats controlled the Senate, Republicans controlled the
    House, to the shame of the Senate and the House, this committee
    was the only committee to do anything on this matter. We passed
    a really good bill. We are working on another bill now.
        I had thought once we had acted, we would see all the other
    committees in both the House and Senate fall into line. They
    didn't do it. And I am very worried. Very worried, that I see
    that same kind of lackadaisical attitude about what we are
    facing.
        Look, we just averted a port strike in our great State. We
    have taken 40 percent of the imports. And what happened, and
    thanks to the Obama administration, really, they helped a lot
    on this. We all worked together, Republicans and Democrats, to
    stop that strike. And we averted it.
        But what happens to those goods? They go on trucks, mostly,
    and they go across our great Nation. They stop in Oklahoma,
    they stop all over. And if our Nation's roads are in disrepair,
    and 50 percent of them are, and our Nation's bridges are in
    danger of collapsing, and more than 60,000 of them are, we are
    in a dire circumstance.
        So I will stop at this point. I will retain my time in case
    there is an opportunity to give it to someone else later. But
    let me be clear. I don't think, Mr. Chairman, with your great
    leadership, we need a lot more hearings. I think we need to
    continue our good work our staffs have started.
        And I think we need to take the lead and get this going.
    Because what I see coming is another extension. My chairman
    knows how expensive that is, and how absurd that is. And I will
    say, if you went to the bank to get a mortgage and the banker
    looks at you and says, oh, you are great, you get the mortgage,
    but it is only for 6 months, you are not going to buy the
    house.
        Well, if we can't tell our people that they have a
    guarantee of several years at least, they are not going to
    build those roads. They are just not going to do it.
        So with that, I would retain the balance of my time.
        [The prepared statement of Senator Boxer follow:]

                 Statement of Hon. Barbara Boxer, U.S. Senator
                          from the State of California

        Today a diverse panel of witnesses will explain to this
    Committee how important a modern surface transportation system
    is for a strong economy and why Congress must act quickly to
    address our nation's infrastructure needs.
        The continued inaction by Congress to enact a long-term
    transportation bill is a disgrace. An efficient transportation
    system is key to our economic security. The U.S. economy relies
    on an interconnected transportation system--for example, we
    move goods out of major ports of entry onto congested urban
    roads and out to the rural highways that span our Nation.
        Federal funding is crucial to keeping our roads, bridges,
    and transit systems functioning so that we can move goods and
    people safely and efficiently. Unfortunately, investment in our
    country's infrastructure has not kept pace with growing needs
    at the State and metropolitan level. nationwide there are
    63,500 bridges that are structurally deficient and 50 percent
    of our nation's roads are in less than good condition.
        The Federal Government provides over 50 percent of the
    capital expenditures for State highway projects nationwide,
    which means that states and local governments rely heavily on
    Federal funding to maintain and improve their transportation
    systems.
        A robust, multi-year surface transportation bill will
    sustain millions of jobs for American workers and help the
    construction industry, which was hit hard by the Great
    Recession. There are still approximately 1.4 million fewer
    construction workers today compared to 2006.
        It is critical for our nation to continue investing in our
    aging infrastructure. The Highway Trust Fund is an integral
    part of how the Federal Government provides predictable, multi-
    year funding to states so they can plan and construct long-term
    highway, bridge, and transit projects. Therefore, preserving
    the Highway Trust Fund needs to be our No. 1 priority.
        We must move quickly to pass a bipartisan transportation
    bill, because without action we are facing a transportation
    funding shutdown in just a few short months. The law that
    currently authorizes our surface transportation programs is set
    to expire on May 31st--right as the critical summer
    construction season is beginning--and the Highway Trust Fund is
    projected to face cash-flow problems shortly thereafter.
        Secretary Foxx recently stated that U.S. DOT would likely
    begin warning states in June of ``cash management'' procedures
    which would take effect in July, when fund balances fall below
    a prudent balance. Make no mistake--this would result in the
    rationing of billions of dollars in payments to states.
        I'd like to enter into the record a recent statement from
    Pete Ruane, the President and CEO of the American Road and
    Transportation Builders Association, and read a portion of the
    statement:
        ``In just 100 days, authorization for the Federal highway
    and transit program will end, absent action by the Congress.
    Close observers know, however, that the Senate and House are
    only scheduled to be in session 55 and 36 days, respectively,
    before that legislative deadline occurs. Where is the sense of
    urgency? The uncertainty caused by congressional action is
    already--again--having real world, negative economic
    consequences as states begin cutting back work plans because
    they don't know if the funding will be there to pay the bills
    several months from now.''
        Transportation should be a nonpartisan issue. Taking action
    to save the Highway Trust Fund and invest in our aging
    infrastructure is strongly supported by businesses, labor, and
    transportation organizations.
        Last May, the EPW Committee unanimously approved a 6-year
    reauthorization of MAP-21 that provided long-term funding
    certainty for highway and bridge programs. I am hopeful we will
    have similar success in our Committee this year, but the clock
    is ticking. Failure is not an option, there are no excuses for
    further delay or extensions, and I look forward to working with
    all of you to get the job done.

        Senator Inhofe. And I will do the same.
        I would only say this. What you are witnessing here is
    unusual in Washington, because you have a proud, outspoken
    liberal and a proud, outspoken conservative in total agreement
    on what we should be doing. We do have that old outdated
    document out there called the Constitution that kind of tells
    us what we are supposed to be doing here. This is what we are
    supposed to be doing here.
        With that, let's start with Mr. Braceras. Mr. Braceras, we
    will start with you and we will kind of go across for your
    opening statements. Then we will open up for questions.

      STATEMENT OF HON. CARLOS BRACERAS, EXECUTIVE DIRECTOR, UTAH
                      DEPARTMENT OF TRANSPORTATION

        Mr. Braceras. Thank you, Chairman Inhofe, Ranking Member
    Boxer and members of the committee.
        Thank you for the opportunity to provide input on the need
    to reauthorize MAP-21. My name is Carlos Braceras, and I serve
    as the Executive Director of the Utah Department of
    Transportation. Today it is my honor to testify on behalf of
    the State of Utah and AASHTO.
        Throughout the history of our Country, transportation has
    played an integral role in the success of our economy. While
    States have done an admirable job of addressing transportation
    within their boundaries, there is clearly a need for a cohesive
    national transportation system. Our Federal highway program is
    a federally funded Stated-administered program based on the
    100-year old partnership between the Federal Government and
    State DOTs. Nearly half of all the capital funding for highway
    and bridge projects comes from the Federal Government.
    Eliminating the Federal participation in this partnership will
    leave too big a hole for the States to be able to make up on
    their own.
        State DOTs have a strong partnership with their local
    governments and their respective States. The transportation
    planning process requires State DOTs to work extensively with
    local planning agencies and the public in developing multi-
    modal transportation plans and identifying projects that are
    supported by the Highway Trust Fund. This process works well,
    and is the foundation of the performance-based programs
    established under MAP-21.
        Rather than drastically altering the federally funded,
    State-administered nature of the Federal Highway Program, and
    facing consequences of such disruption, we should highlight
    examples were State DOTs have strong, productive partnerships
    with local governments, and where the transportation planning
    process is working well.
        In Utah, as with all of our sister States, the success of
    our communities, both large and small, is critical. As such, we
    have developed what we refer to as the unified plan, in which
    all our metropolitan planning organizations, cities, counties
    and transit authorities, have come together to develop a
    unified plan of projects that will address the goals of the
    State and individual communities for the next 30 years. In
    Utah, we speak with one voice toward an agreed-upon set of
    goals.
        As Congress considers policy changes in the next
    reauthorization bill, it should build on the successful reforms
    of MAP-21. We all share the goal of utilizing the resources
    invested in our transportation system as effectively and
    efficiently as possible. We can accomplish this by streamlining
    the project delivery process, such as clarifying that States
    participating in the NEPA delegation may make project-level
    conformity determinations, give the States the ability to
    approve designs and right-of-way acquisitions, allow State DOT
    modal administrators to use categorical exclusions determined
    by other modal administrators.
        Furthermore, Congress should consider authorizing a
    consolidated funding pilot program. This would build on the
    program consolidation efforts made in MAP-21 by treating all
    core funding programs as a single, consolidated apportionment.
    States would only be eligible to participate in the program
    once they have established performance management systems that
    ensure accountability and transparency.
        Utah is ready to step forward and pilot such a program. I
    am convinced that we will be able to demonstrate that we will
    be able to better meet both the transportation goals of this
    Country and those of Utah.
        I encourage Congress to seek additional opportunities to
    continue moving the Federal highway and safety programs toward
    performance and outcome-based programs that emphasize results
    as opposed to process.
        In conclusion, AASHTO remains committed to helping Congress
    pass a robust, long-term surface transportation authorizing
    bill as soon as possible. The current extension expires in the
    middle of the spring construction season. Already, several
    State DOTs are postponing needed projects that are scheduled to
    go out to bid.
        The sooner Congress acts, there is a greater likelihood
    that these projects will be built this year as opposed to being
    pushed back another year. This week, hundreds of State DOT
    leaders from nearly every State in the Country are just a
    couple of blocks away, attending AASHTO's 2015 Washington
    Briefing. Over the next couple of days, most of them will be up
    here on the Hill, meeting with their congressional delegations,
    advocating for a long-term surface transportation bill that
    addresses our surface transportation investment needs.
        I would like to thank you once again for the opportunity to
    testify today. I will be more than happy to answer any
    questions the committee has.
        [The prepared statement of Mr. Braceras follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Senator Inhofe. Thank you very much, Mr. Braceras. I should
    have mentioned, Mr. Braceras is the Executive Director of the
    Utah Department of Transportation.
        Next, the guy who gets the prize for coming the farthest,
    Steve Heminger, from the California Transportation Commission.

     STATEMENT OF STEVE HEMINGER, EXECUTIVE DIRECTOR, METROPOLITAN
                       TRANSPORTATION COMMISSION

        Mr. Heminger. Thank you, Chairman Inhofe, Senator Boxer and
    members of the committee. Good morning.
        Just for the record, again, my name is Steve Heminger and I
    am Executive Director of the Metropolitan Transportation
    Commission, which is the metropolitan planning organization, or
    MPO, for the San Francisco Bay Area. A few years ago, I also
    was privileged to serve on one of the two congressionally
    chartered commissions, the National Surface Transportation
    Policy and Revenue Study Commission. I very much appreciate
    this opportunity to testify today on the still-relevant title
    subject of that commission's report: Transportation for
    Tomorrow.
        United States Senators have a lot on their plates. So let
    me make three brief points. First, I want to thank this
    committee for the considerable progress you have made in
    reforming the Nation's surface transportation program. The
    emphases in MAP-21 on program consolidation, performance-based
    outcomes, freight policy and permit streamlining are all
    welcome developments. Your bipartisan leadership is helping
    States and MPOs make better investment decisions and deliver
    those projects faster to our constituents.
        Second, despite these advances, Federal policy, in my
    opinion, still lacks sufficient focus on the investment needs
    of the Nation's economic engines: the metropolitan areas that
    more and more Americans call home. The fact is, the U.S.
    economy will rise or fall based on how well our metro economies
    compete in the global marketplace.
        For example, Bay Area residents contribute almost 60
    percent more to our gross domestic product than the average
    American, 60 percent more. In regions as diverse as Houston and
    Boston, this metro dividend is nearly 40 percent above the
    national average.
        Now, the Federal-State relationship is the cornerstone of
    American federalism, and the transportation arena is no
    exception to that. But that should not preclude a new
    performance partnership with dedicated funding between the U.S.
    DOT and the Nation's MPOs. We need to keep those economic
    engines primed.
        Finally, if we want better conditions and performance from
    our roads, bridges and public transit systems, we are going to
    have to figure out a way to pay for it. So how deep is the hole
    we have dug? Let me start with that, and just give you one
    snapshot of the San Francisco Bay Area. Our long-range plan
    devotes nearly 90 percent of all the money we have available,
    90 percent over the next 25 years, just to operate and maintain
    the existing transportation network.
        The Federal program is 13 percent of our total funding. One
    way of looking at that is, you are getting eight to one
    leverage off of your investment in California, which is a very
    good return. It also means that we are not here asking you for
    a handout. We are asking you for a little help, because we are
    doing most of it.
        But when you spend nearly 90 percent of your budget on
    maintenance, over the next 25 years, in the face of the growth
    we are seeing, we are leaving a lot of expansion projects on
    the table, because we simply can't afford to pay for them. Even
    after spending 90 percent of all of our money on maintenance,
    we still have $10 billion plus shortfalls for State highway
    repair, for local road repair and for the public transit system
    State of good repair.
        That is the situation we are in. That is how deep the hole
    is. And that is why I say, and I think it is no surprise to
    this committee, that level funding just won't cut it.
        Now, the members of this committee probably have forgotten
    more about politics than I will ever know. But I do know this.
    Since the Federal gas tax was last adjusted in 1993, 42 States,
    42 States, have raised their rates, some by a little, others by
    a lot; some by indexing, others by voting. These States range
    from the brightest red to the deepest blue. Somehow, all those
    Governors and State legislators figured out a way to pay for
    needed transportation improvements.
        Moreover, the math is pretty compelling. As an example,
    doubling the current Federal user fees on gasoline and diesel
    fuel would generate over $30 billion per year and create more
    than 300,000 jobs, yet it would cost the average motorist less
    than 30 cents per day.
        Now, a recent American president confronted a similar
    predicament to the one we are in today. I would like to read a
    quotation from him about how he fought his way through it.
    ``Common sense tells us it will cost a lot less to keep the
    system we have in good repair than to let it crumble and then
    have it start all over again. Good tax policy decrees that
    wherever possible, a fee for a service should be assessed
    against those who directly benefit from that service. Our
    highways were built largely with such a user fee, the gasoline
    tax. I think it makes sense to follow that principle in
    restoring them to the condition we all want them to be in.''
        That was President Ronald Reagan in 1982. I think the words
    are still true today.
        So let me end where I began. Your reform agenda is working.
    But there is no free lunch when it comes to infrastructure.
    Indeed, the only question is whether we want to pay now to
    improve our roads and rail lines, or whether we want to pay
    later in crumbling facilities that will curtail our economic
    potential.
        I remain optimistic that this Congress will make the right
    choice. And in light of the quotation I have just read, perhaps
    I should conclude by saying, let's just win one more for the
    Gipper.
        Thank you very much.
        [The prepared statement of Mr. Heminger follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Senator Inhofe. That has a great impact on me, anyway.
    Thank you very much.
        Mr. Riordan is the President and CEO of Neenah Enterprises.
    We recognize you to tell us about Neenah Enterprises, we will
    give you a few seconds to go over.

       STATEMENT OF THOMAS J. RIORDAN, PRESIDENT AND CEO, NEENAH
                           ENTERPRISES, INC.

        Mr. Riordan. Thank you, Mr. Chairman. Chairman Inhofe,
    Ranking Member Boxer, and members of the Senate Committee, on
    behalf of my company, Neenah Enterprises, and the National
    Association of Manufacturers, that I also represent, thank you
    for the opportunity to testify about the importance of Federal
    investments in our transportation infrastructure.
        With its headquarters and largest foundry in Neenah,
    Wisconsin, Neenah Enterprises consists of two business
    operating entities. Our best-known business is Neenah Foundry,
    which is one of the top suppliers of municipal castings
    including manhole frames, lids, covers, grates, trench castings
    and decorative tree grates. Since 1872, Neenah Foundry has been
    a consistent leader in producing durable castings that are used
    in every State across our Country, and we proudly make all of
    our products here in the U.S.
        Our other business, Neenah's industrial division,
    represents about 70 percent of our revenue and is a key
    component provider to many of the world's leading manufacturing
    companies, designing and building cast iron and forged parts
    for the heavy truck, agriculture, construction, HVAC, energy
    and other industries. We are one of the largest independent
    manufacturers of castings in the U.S. and part of the largest
    recycling industry in the Nation, turning scrap steel into
    useful products in an environmentally friend manner.
        As Chair of the NAM's Small and Medium Manufacturers Group,
    I often hear about the business challenges that my peers face,
    from escalating costs of healthcare to the increasing burdens
    of regulation. The health and condition of our Nation's
    infrastructure on the transportation network is also of
    significant concern to manufacturers. Our transportation
    infrastructure underpins the movement of goods within our
    economy. It is vital for our day-to-day business and our long-
    term economic prosperity.
        Neenah is hugely dependent upon the transportation
    infrastructure, ports, rail and highways. As an example, our
    largest facility has over 15,000 truck visits each year. The
    logistics planning that goes into each of these visits is very
    involved, and delays based on traffic congestion often drive
    significant expense overruns on a daily basis. The cost of
    scheduling, rescheduling, paying overtime, customer and vendor
    disruptions, production delays and lost business all add cost
    and challenge our competitiveness by raising our total cost of
    doing business by about 1 percent each year.
        These excess costs are diverted away from other business
    activities such as product development, new capital projects
    and investments in our work force. Congestion is really a
    hidden tax and an increasing drag on American competitiveness.
    As congestion continues to challenge the Nation's highway
    network, especially in metropolitan regions, capital spending
    on highways, roads and bridges fell 3.5 percent between 2003
    and 2012, according to a recent NAM study. The study, entitled
    Catching Up, also revealed that spending on public
    infrastructure dropped 10.5 percent between 2003 and 2012 in
    the same time period.
        A more sustained and focused effort is going to be needed
    in the long term to help reverse these troubling trends. We can
    and should do better than allow our Nation's infrastructure
    base to continue to erode.
        In the short term, manufacturers are counting on Congress
    to help facilitate commerce by moving a well-funded, multi-year
    surface transportation authorization that secures the financial
    health of the Highway Trust Fund. Manufacturers support this
    committee's efforts to ensure our transportation system is on
    more solid and robust footing.
        I very much appreciate and thank you for the opportunity to
    testify this morning.
        [The prepared statement of Mr. Riordan follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Senator Inhofe. Thank you very much.
        Mr. Gardner is the Vice President of Supply Chain and
    Customer Experience for Ingredion Incorporated. Why don't you
    tell us about it?

     STATEMENT OF DAVID GARDNER, VICE PRESIDENT, SUPPLY CHAIN AND
              CUSTOMER EXPERIENCE, INGREDION INCORPORATED

        Mr. Gardner. Good morning, Chairman Inhofe, Ranking Member
    Boxer, and distinguished members of the committee. Thank you
    for the opportunity to testify today.
        My name is Dave Gardner and I am Vice President of Supply
    Chain and Customer Experience for Ingredion Incorporated. In my
    role I am responsible for operations, including raw material
    sourcing, logistics, and customer service. I am testifying here
    today on behalf of the U.S. Chamber of Commerce.
        First, let me first tell you a little bit about Ingredion.
    We produce hundreds of value-added ingredients from plant
    sources, including corn, tapioca and rice. We manufacture our
    products for the food industry, beverage, pharmaceutical,
    corrugating, paper, and animal feed industries. Our ingredients
    add crunch to crackers and fiber to cereal bars. They can make
    a soft drink sweet with calories or sugar free, plastics
    biodegradable, body lotions silkier, and tissues stronger and
    softer.
        In fact, our products appear in roughly 80 percent of all
    the products that you would find on a grocery store shelf,
    either in the product, in the package or in the packing itself.
    We are a multinational, FORTUNE 500 company headquartered in
    the Chicago suburb of Westchester, IL. We have a global R&D
    facility in Bridgewater, New Jersey. We employ roughly 11,000
    people globally and have 2,000 employees in the United States.
        Our supply chain is a worldwide network of 35 manufacturing
    plants and 24 R&D centers around the globe. In North America we
    operate 13 manufacturing plants, with seven of those in the
    United States. Our largest plant is in the Chicago area.
        Our primary raw material is corn, which we ship to our
    plants from the Farm Belt via rail and truck. Our finished
    products are distributed to customers across the Country by a
    network of rail, truck, warehouses, and break stations.
    Needless to say, a smooth-functioning surface transportation
    system is not only essential to Ingredion's business, it
    impacts the bottom line of our business and of our customers.
        Logistics costs represent a significant portion of our
    inbound corn costs and delivered finished product costs. In
    2014 alone, our transportation costs, excluding the cost of
    fuel increased by 3.6 percent, far outstripping the rate of
    inflation.
        An outdated transportation system leads to increased
    freight costs, variability in delivery times, higher
    inventories, poor customer service, and an overall
    uncompetitive situation for us and for all other industries.
    Let me just touch on few examples to illustrate how a neglected
    infrastructure impacts us.
        Last year, it took longer to transport corn from the
    farmers and storage elevators to our facilities. This resulted
    in millions of dollars in increased freight costs, higher
    manufacturing costs due to plant downtime, and curtailed
    production.
        The transportation industry is struggling. In 2014, the
    average train speed decreased by over 6 percent and delay times
    increased by 10 percent. As a result, we had to increase
    product inventories and address a shortage of rail cars to
    transport our products, leaving us to struggle to meet customer
    demand.
        As the network moves slower, we are forced to increase our
    rail fleet and to make suboptimal sourcing decisions. Chicago
    is a primary transportation hub and the location of our largest
    plant. The increased rail volume through Chicago is causing
    unprecedented delays. For example, it can take up to 3 days to
    just get a rail car of product out of the Chicago area. A
    customer is a mere 7-hour drive away, it can take up to 5 days
    to deliver them product by rail.
        Because we cannot consistently rely on rail to deliver
    products to our customers on time, we are often required to
    revert to trucks, at a more costly position than rail. However,
    the trucking industry is also severely challenged. Available
    truck capacity compared to truck demand is at an historic
    imbalance. This has been amplified by tightening regulation on
    driver hours and deteriorating highway infrastructure.
        Our ability to respond to our customer needs is directly
    impacted by the availability of trucking capacity. As truck
    capacity tightens, our on-time delivery rate suffers.
    Ingredion's incidence of late deliveries over the last 2 years
    has almost doubled since 2012.
        But our story is really just a small pixel of the bigger
    picture. Increased transportation costs are impacting the
    broader American business community. According to the Council
    of Supply Chain Management Professionals, U.S. business
    logistics costs was $1.4 trillion in 2013, and this equates to
    8 percent of the GDP
        Today marks the first time that Ingredion has testified
    before Members of Congress, but we can no longer afford to
    remain silent. We came here today to add our voice to the
    growing concern by businesses calling for improvements to the
    Nation's infrastructure systems.
        I would like to thank the committee for their continued
    work and attention on the reauthorization of our surface
    transportation programs. MAP-21 ended years of short-term
    extensions that created a great deal of uncertainty for
    businesses such as ours. We are eager to see a long-term
    solution come out of Congress this year, and we know that you
    agree.
        Thank you very much for the opportunity to be here today,
    and I look forward to answering your questions.
        [The prepared statement of Mr. Gardner follows:]
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        Senator Inhofe. Yes, we do agree.
        Mr. Rowen is the President of Susquehanna Glass Company.
    You are recognized.

     STATEMENT OF WALT ROWEN, PRESIDENT, SUSQUEHANNA GLASS COMPANY

        Mr. Rowen. Good morning, Chairman Inhofe, Ranking Member
    Boxer and other members of the Committee. My name is Walt
    Rowen. I am the owner of Susquehanna Glass Company. We are a
    small, 100-year old glass decorating company based in Columbia,
    Pennsylvania.
        Our products don't make body lotions creamier, but I can
    guarantee you, California wine tastes wonderful in our wine
    glasses.
        [Laughter.]
        Mr. Rowen. Thank you for allowing me to testify before you
    today and share my comments about the importance to us of
    reauthorizing the funding for the Highway Trust Fund.
        My company provides decorated glasses and barware to major
    retailers, internet flash sites, small retailers and other
    tabletop companies around the Country. We rely on the freight
    and trucking industry to ship our finished products all over
    the Country to retailers and directly to their customers. Last
    year, my business shipped over 57,000 small packages via UPS
    and FedEx and we generated more than a million dollars in
    freight charges. So clearly, our success as a company relies
    very heavily on our ability to deliver products efficiently and
    cost-effectively to our customers.
        One of our business models has been to gradually shift from
    shipping large shipments to retailers and their DCs, or their
    distribution centers, shifting to more of a direct-to-customer
    package delivery system, relying more on UPS and FedEx. So
    today, we really balance both of those areas, both trucking
    shipments and small UPS packaging.
        Investment in our Nation's infrastructure is an investment
    in America, pure and simple. Not only would this benefit
    businesses like mine that rely on the shipping industry and
    well-maintained roads, it would create new opportunities for
    small businesses. About 147,000 of our Country's 650,000
    bridges are failing. This is especially apparent in
    Pennsylvania, where I live. We have the third-largest number of
    bridges in the U.S., over 25,000, but we lead the Nation in the
    number of bridges classified as structurally deficient. And a
    mere 30 percent of Pennsylvania's roads have been labeled in
    good condition, only 30 percent in good condition.
        What is more, one-third of America's major roads are in
    poor or mediocre condition. There are 4,000 dams in need of
    repair and 36 percent of our urban highways are congested.
    Rebuilding America's roads, bridges and schools offers
    tremendous opportunities to small businesses. Not only do they
    participate in the building projects and their supply chain,
    they run the hotels, coffee shops, restaurants and other
    businesses that serve people working on those projects. The
    economic impact to the American economy is unfathomable when
    you devote these funds to these kinds of construction projects.
        In fact, Small Business Majority's polling found 69 percent
    of small business owners favor investing $50 billion in
    infrastructure projects that would create jobs. If the cost of
    freight continues to rise while our roads deteriorate, it will
    become harder and harder to move my products and make a profit.
    This would seriously be detrimental to my bottom line. UPS and
    FedEx have just started to price small packages differently.
    Instead of just paying for weight, we are paying for the size
    of the package. That is going to increase my cost of shipping
    dramatically.
        Investing in our Nation's roads, bridges and other physical
    infrastructure supports access to customers and vendors, while
    at the same time creating demand for the goods and services
    small businesses have to sell. We need infrastructure
    investments that will be beneficial for business and the
    economy. I hope you will strongly consider small business
    support for reauthorizing funding for the Highway Trust Fund.
        Thank you sincerely for the opportunity to comment on this
    important issue.
        [The prepared statement of Mr. Rowen follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Senator Inhofe. Thank you, Mr. Rowen, and thank all of you
    for your opening statements.
        What we are going to do is have 5-minute rounds, and have
    two rounds. This is to accommodate members who are going to
    have to come late and maybe leave early. So there will be
    plenty of time.
        I will go ahead and begin with the most unpopular of the
    subjects and that is, I have been very frustrated over how we
    pay for a multi-year reauthorization. Some of my colleagues
    have talked about supporting a concept of shifting the Federal
    program back to the States by cutting the Federal user fees,
    some of them 15 cents, some of them, whatever the amounts. And
    then letting the States pick up the tab.
        Now, if such a thing were to become a reality, Idaho would
    have to raise its State gas tax by 25 cents, West Virginia by
    32 cents. Your State, Mr. Braceras, of Utah, would be 19 cents
    that you would have to increase this. And in Montana, 44 cents.
    So there was a reason for this. I often say one of the few
    things that really does work in government is this system. And
    this is coming from a conservative.
        So I have often said, and I remember on the Senate floor
    when we had our 27-month bill that the conservative position is
    to go ahead and do an authorization bill. No. 1, you get all
    the reforms, streamlining and all that stuff, and No. 2, if you
    don't do that, it is going to cost about 30 percent off the
    top. And that is not the conservative position.
        Now, when you talk about devolution, as several are
    suggesting, I am probably the right one to talk about this.
    Because, and my colleagues don't know this, but 25 years ago,
    Connie Mack from Florida and Jim Inhofe from Oklahoma were the
    fathers of devolution. We thought then that oh, that was so
    much fun on the stump to talk about how, go back to Oklahoma,
    why make an unnecessary trip of our dollars in Oklahoma to
    Washington and back, until we realized how it didn't work.
    Obviously, it was more fun to be for it than against it. But
    nonetheless, that is happening.
        [Laughter.]
        Senator Inhofe. But anyway, interState commerce doesn't
    stop at State boundaries. No State is an island. I have read
    extensively on Eisenhower, I have always been a great admirer
    of his. My other committee is Armed Services Committee. He used
    to say, it is just as much about national defense as it is
    interState commerce. InterState connectivity and national
    defense access are equally important.
        So I would just say, that my position, and what I am going
    to do is have only one question. One question. We will start
    with you, Mr. Braceras, and we are going to work down. Now, in
    5 minutes, we will cut me off and go to the rest of them, then
    we will continue. So that will give you more time to think
    about this. All right, Mr. Braceras, do you agree with me? What
    do you think?
        Mr. Braceras. Mr. Chairman, I would say the answer of
    whether or not to devolve the Federal program is if you believe
    there is no Federal purpose in transportation. I believe that
    there is a strong purpose in our Nation's transportation in
    having a strong Federal role. Companies such as, based in
    Oklahoma, Advance Pierre Food Services, they produce their
    products but they depend on a vibrant, well-functioning, safe
    transportation system in every State of this Country. For our
    Country to continue to be successful and be an economic leader,
    we need a strong Federal transportation system.
        Senator Inhofe. That is good. One followup question on
    that. What if a State, if you went through this concept and a
    State decided that they were not going to increase their taxes?
    Your State of Utah, for example, what would happen to the
    national system?
        Mr. Braceras. We depend on the Federal program to maintain
    and operate our transportation system. We have a strong State
    system. Our Federal program constitutes just under 25 percent
    of our program. But the Federal program is what we maintain and
    preserve the State's transportation system on. So you would see
    roads continue to deteriorate, bridges to continue to
    deteriorate. So that Federal role is critical to the State of
    Utah.
        Senator Inhofe. Thank you, Mr. Braceras. Mr. Heminger.
        Mr. Heminger. Mr. Chairman, I certainly do agree with you.
    And there is another quotation I am recalling from President
    Eisenhower when he submitted his interState highway bill to the
    Congress. He noted that activities like transportation and
    communication are things that knit our Country together. I
    think he said without that, we would be a mere alliance of many
    separate parts.
        I think we are called the United States of America for a
    reason. If you think the Federal Government is done with
    transportation, I suppose you could devolve the program. I come
    from a State that has probably the best chance of standing on
    its own two feet. We are a nation State by any stretch of
    measure. But there are jobs that even we can't do. And Senator
    Boxer mentioned the import of goods and the flow of commerce
    coming into our ports. That is not just a California issue,
    that is a national issue.
        I would finally mention one thing that doesn't often get
    talked about in devolution. If you were to head down that path,
    the last time I checked, I think it is something like 30 or
    more States have restrictions in their State constitutions that
    would prohibit them from using gas tax money on public transit.
    And that is a pretty big pill to swallow in States around the
    Country where we rely on Federal aid to public transit.
        Senator Inhofe. Thank you very much. I am going to cut my
    time off now and we will come back for the three of you on the
    same issue.
        Senator Boxer.
        Senator Boxer. Mr. Chairman, thank you very much. You are a
    leader on national defense. And you are a leader on the Highway
    Trust Fund. The last person that brought that together was Ike,
    Eisenhower. He was President in the 1950's when you and I were
    just really little kids.
        Senator Inhofe. You were littler than I was.
        Senator Boxer. Not by that much, unfortunately. But here's
    the deal. It was Ike who started the interState highway system.
    And he did it because of national defense. Because he said, as
    you said, this is one Nation under God. He may have said under
    God. And the bottom line is, we have to move these goods. This
    is essential for our national defense, for our national
    security. And of course, for our economic security.
        So we are on the high ground here. I couldn't agree with
    you more that this is one place where Republicans and Democrats
    should come together. And we have proven we can do it in this
    particular committee.
        Now, this panel is just terrific. And I guess I have a
    political question to ask Mr. Braceras. Have you spoken this
    passionately to your Senator Hatch? Does he know your feelings
    about the impact of this?
        Mr. Braceras. I believe you might mean Senator Lee. Yes,
    Senator Hatch believes in a strong Federal role.
        Senator Boxer. No, I mean Senator Hatch. I am talking about
    Senator Hatch for a reason. Senator Hatch is the one with
    Senator Wyden is going to figure out how to fund the trust
    fund. And so far, we have seen nothing come out of that
    committee, either when Senator Wyden was in charge, frankly, or
    when Senator Hatch was in charge. Lots of ideas.
        And if I could just say, for myself, I am open to all of
    them. And the reason is, I am open to all of them, because I
    think this is so critical to our economy. If you just look at
    construction workers, and I want to say to my private sector
    people here, thank you for being here. We, at the height of the
    Great Recession, we had more than 2 million workers, is that
    right, Bettina? Two million construction workers out of work.
    Today, we have 600,000 construction workers out of work. It is
    such a long, difficult task to get everything back to where it
    was before the Great Recession.
        If we fail to act, and Senator Hatch and Senator Wyden
    together don't figure out a funding mechanism, I mean, I have
    been talking to other colleagues on the other side of the
    aisle, Mr. Chairman, and we are thinking about teaming up and
    offering some things like repatriation and other things, on the
    floor itself, just to get moving. Because we are headed into
    very, very dark waters here.
        So I would just like to ask each of you the consequences,
    and put it as tightly as you can in my remaining time, the
    consequences of our not acting, and maybe at the last minute,
    throwing together a 6-month or a 5-month extension. What are
    the consequences on the ground? I think we are going to start
    with you, Mr. Braceras.
        Mr. Braceras. Thank you, Senator. The consequences would be
    significant. If you believe that the projects that we work on
    are important to safety, for preservation, to save this
    Nation's money, we could lose a construction season if we wait
    too long. For us, when we get the go-ahead from Congress, we
    are ready to go on those projects that still need to be
    appropriated. It takes a month to advertise, it takes a month
    for WRDA contracting. In cold weather States, we could
    potentially lose an entire construction season.
        Senator Boxer. And that means lost jobs and businesses
    really hurting.
        Mr. Braceras. And projects costing more money next year
    than they do today.
        Senator Boxer. OK. Mr. Heminger, do you agree with that?
        Mr. Heminger. Yes, I do, and I want to emphasize that last
    point. In life, time is money. But especially in construction.
    And when you are ready, you are ready. Then you have to let it
    go and some other job gets in the way. And then you're three or
    four down the pecking order.
        California has better weather, we have more local money. So
    in a sense we are a little bit better able to deal with this
    uncertainty. But it is frustrating for all of us, as I know it
    is frustrating for you, not to have the predictable funding
    that you need for long-term infrastructure investment.
        Senator Boxer. Mr. Riordan.
        Mr. Riordan. Senator, we absolutely agree. On behalf of
    National Association of Manufacturers and my company as well, I
    have been personally involved in a construction equipment
    company in the past. I have seen first-hand the delays, cost
    overruns, confusion that go with the start and stop nature of
    this process. I would urge the committee to consider the
    fiduciary responsibility from the standpoint of making sure we
    spend money in an intelligent, well thought-out basis.
        As manufacturers would say, planning is best done in
    advance. It is extremely difficult and extremely disruptive to
    have a start and stop nature, not only for private
    manufacturers who depend on this lifeline all the time, but
    frankly, for everybody else involved in the process.
        Senator Boxer. Would you write us a letter? I think NAM is
    very influential.
        Mr. Riordan. We would certainly be happy to do that.
        Senator Boxer. OK. Mr. Gardner? And I won't ask Mr. Rowen
    that question, because he sits here as a consumer of the roads.
    I understand. But I am talking about what happens on the ground
    if we have another one of these extensions.
        Mr. Gardner. My comments really support Mr. Riordan, where
    I think a long-term commitment allows us to do better planning,
    better execution of capital investments. But more specifically
    for our business, we are on a 3-year to 5-year planning
    horizon. We are making decisions today on where we locate our
    plants and how we move our products based on what we see today.
    With the uncertainty in what the investment strategy is going
    to be, we may be making decisions that really aren't in our
    long-term best interests or the best interests of our
    customers.
        Senator Boxer. Thank you.
        Senator Inhofe. Thank you, Senator Boxer. Senator Boozman.
        Senator Boozman. Thank you, Mr. Chairman. And thank all of
    you for being here. Your testimony is really very helpful as we
    go forward.
        The good news is that there is tremendous congressional
    support in getting this done, on both sides of the aisle.
        In Arkansas, and I will just kind of throw this open for
    whoever wants to jump in. In Arkansas we have seen some
    accelerated project delivery as a result of the common sense
    reforms in MAP-21. The reforms improved the Department of
    Transportation process.
        However, I have also heard in Arkansas and other areas from
    folks who believe that the reforms have done little to expedite
    work required by other agencies, such as the EPA, Fish and
    Wildlife and the Corps of Engineers. Can you comment about
    this? I think this is so important. I agree, we have to figure
    out a funding process and make this thing work. This is one of
    the things, though, that if you look back, we haven't increased
    the gas tax in decades. Yet we have increased the regulation
    tremendously.
        If you look and see the project that was done in Oklahoma,
    when you had your bridge collapse, the project in Minnesota
    where the bridge collapsed and was literally rebuilt in a year,
    not shot-cutting the things that we needed to have in place,
    but the agencies working together in a timely fashion without
    the gotcha attitude.
        Can you comment about that? And also, now or at some other
    point, what we would like, I think, on the committee, very,
    very much, you all are on the ground. It needs to come from the
    ground up. Give us some ideas, some real life situations that
    we can help cut through. Mr. Braceras, we can start with you.
        Mr. Braceras. Thank you, Mr. Boozman. First of all, I would
    like to really applaud Congress for the reforms in MAP-21. It
    allowed for good decisionmaking to be made in a very
    responsible way, a transparent way. Really it is about
    delivering your product to the market as quickly as possible.
    Those products that we deliver, those transportation projects,
    they save lives and they save the taxpayers' money by
    delivering them quicker.
        I would say that the reforms have helped the Federal
    Highway Administration and USDOT accelerate those projects. But
    their sister agencies in the resource areas, they are in a very
    difficult position. They have a mission to uphold the
    regulations that Congress has passed. I would say that they
    don't necessarily always share the same understanding in the
    need to move those projects forward as quickly as possible.
        So any attempts or efforts that Congress could make to help
    clarify your intent with some of those resource agencies would
    help them make their decisions quicker. It certainly doesn't
    steamroll the process, but we can certainly streamline the
    process.
        Senator Boozman. Thank you. Mr. Heminger.
        Mr. Heminger. Senator, I would first of all urge your
    committee to study the example you cited, which is the
    Minneapolis bridge collapse. My recollection, it was put back
    into service in 13 months. Probably if they had done that
    regular order, it would have taken 13 years. A lot of it has to
    do with concurrency. I know Secretary Foxx was before you not
    to long ago, and he was using that phrase over and over again.
    The more we can do things in parallel and not sequence, where
    we are waiting for one whole activity to stop before we start
    the next one.
        Second, our State of California has accepted delegation of
    the National Environmental Policy Act. We have a strong statute
    called CEQA, so I think we are in a good position to do that.
    But I think other States could consider that as well.
        Third, I do think you are right to identify the permitting
    process. In my experience, it is not so much the environmental
    review process, it is trying to get all of this alphabet soup
    of both State and Federal permitting agencies on the same page.
    In California, we have started to pay for staff at some of
    these agencies. When you all fund a bill for highways, you
    think you have the highways funded. But if we don't fund EPA
    and Fish and Wildlife, those guys can stop a highway project
    just as much as your not funding it can stop a highway project.
        So I think focusing on those permitting agencies and trying
    to get them staffed up, putting clocks on reviews and things
    like that, that in my opinion is where you can really gain some
    time.
        Senator Boozman. Very good. Thank you, Mr. Chairman.
        Senator Inhofe. Did you want the other three to respond?
    That is an excellent line of questioning. I could just deduct
    that from your second 5 minutes.
        Senator Boozman. If you don't mind.
        Senator Inhofe. Yes.
        Mr. Riordan. Senator, we agree as well, the National
    Manufacturers Association. Part of the challenge, I think, any
    project has is certainty around timing and cost. The more there
    is regulatory uncertainty that will not only disparage and kind
    of slow down development, but frankly, will also increase the
    cost and time that is required.
        One of the key concerns that my company has is recognizing
    we need to be responsive and respectful of the environment. On
    the other hand, as Mr. Heminger has just said, I think the time
    clock and the requirements for quick, prompt, certain review is
    just absolutely critical in the life blood of our Country in
    terms of commerce here. Frankly, one of our concerns is that if
    this does not happen, and it frankly turns into one of the most
    public, challenging works project there is in terms of the
    Keystone Pipeline and all the delays and all the drama that has
    gone with this, our Country will come to a halt in terms of any
    development from the standpoint of infrastructure and highways.
        Mr. Gardner. Senator Boozman, we have a company that is
    really built on continuous improvement. It has been core to our
    manufacturing operations, and over the last year we have really
    brought that into all of our business processes. What we have
    demonstrated to ourselves is that really, by leaning or
    simplifying our processes, we can really deliver the desired
    result without compromising the intent of the objectives of the
    program.
        So we are really supportive of anything that we can do to
    simplify the processes, allow the use of funds to be done more
    cost effectively. Certainly the permitting area would be the
    area that we need to focus on the most, because our company
    deals with permitting. From an environmental perspective, on a
    regular basis, we see some of the challenge and we can
    certainly recognize how that would impact all of the
    infrastructure investment as well.
        Mr. Rowen. Senator Boozman, I am not going to answer your
    question from a detailed standpoint, because I am not in the
    industry, construction or transportation industry. But I am an
    owner of a company and I make business decisions every day
    about investments.
        I will give you two examples. They seem a little crazy, but
    they are, I think, to the heart of the matter. I had to just
    make a decision about buying a new tow motor and a new furnace
    for my glass decorating business. I spent probably about
    $50,000 in those two investments. I realized that over the last
    2 years, I was spending a lot more repairing my tow motor than
    it would cost me to build a new one. The same was true of the
    dryer. I had some defective product because the dryer wasn't
    working. It cost my business money. And when I sat down and
    looked at the numbers, I realized that I was making a much
    smarter investment spending $50,000 today so that I could save
    a lot of money down the road.
        I think that is what government needs to do more of.
        Senator Boozman. Thank you, Mr. Chairman.
        Senator Inhofe. Thank you, Senator Boozman. Senator
    Whitehouse.
        Senator Whitehouse. Thank you very much, Chairman, and
    thank you for your energetic leadership on this public works
    bill.
        Following up very directly on Mr. Rowen's point, we have
    information out of my home State of Rhode Island that Rhode
    Island motorists pay nearly $500 million every year in car
    repairs for whacking into potholes and dealing with the crummy
    road infrastructure that we have to live with. So if you want
    to talk about saving money to real people and putting real
    money in their pockets, it is $662 per year per motorist in
    Rhode Island, if you divide out 496 by the number of motorists.
        That is twice as much, more than twice as much, as the
    Highway Trust Fund spends in Rhode Island every year. So we
    have the situation in which, perhaps in theory, to protect
    taxpayers, we are letting our roads crumble and become really
    lousy. And the actual effect on the pocketbook of the average
    homemaker is that they lose money. They pay $662 fixing the car
    instead of a little bit more in the gas tanks and heading
    smoothly down a safe and proper road.
        So if any of you have observations that are similar to that
    from your trucking companies you work with or anybody else, I
    think it is important to help us build that story of how it
    doesn't save money to save money on infrastructure. All it does
    is move costs to the private sector and people have to write
    the check out of their own checkbook for the realignment of
    their front axle, because they whacked into a pothole that
    nobody took care of in time.
        So I would urge you, if you don't mind, if you have stories
    that could help us with that case, to submit them for the
    record.
        The second thing we have begun to see, particularly from
    our dear friends on the House side of the building, is a
    penchant for taking a piece of legislation that ought to pass,
    is ready to pass, has broad bipartisan support, and then adding
    to it something controversial that they couldn't pass through
    regular order but now, by virtue of attaching it to the piece
    of regular and by and large non-controversial legislation, they
    get to take a whack at it. Sort of the drug mule theory of
    legislation. You try to get your contraband through by putting
    it on something else that is traveling legitimately rather than
    trying to get it through regular order, which in most cases you
    probably couldn't get it through regular order, which is why
    they are using this strategy.
        So the reason I bring that up is that this is an important
    bill. It has a deadline in May. There is always the prospect
    that somebody is going to think, oh, this would be a really
    clever thing to attach something really controversial to really
    stick it to somebody.
        What would your advice me if we are faced with the prospect
    of having unrelated measures attached to the Highway Bill? Go
    ahead, Director Braceras.
        Mr. Braceras. Thank you, Senator. We would obviously
    encourage a clean Highway Bill to come through, recognizing the
    importance of the work that needs to be done by all
    transportation agencies in this Country.
        You mentioned earlier about those costs of repairing
    vehicles. Think about the loss of work time when they are
    taking care of and making those repairs. We have a saying in
    Utah: good roads cost less. If you invest and do the right
    treatment at the right time on a pavement, on a bridge, you can
    save over 20 times the cost of if you wait and let it
    deteriorate even further. So it is critical for the economic
    foundation of this Country that not only the transportation
    system function well from a congestion and a safety
    perspective, but that we preserve it in a proper condition. So
    we would encourage that the reauthorization of this bill be a
    long-term, clean Highway Bill.
        Senator Whitehouse. Thank you. I assume that is a unanimous
    sentiment from the panel?
        Mr. Heminger. I would also say, Senator, that we actually
    confronted that situation with MAP-21. I think the fact that
    Senator Boxer, who was then chairman, and Senator Inhofe were
    working so closely together, and you got that large bipartisan
    vote on the floor, I think that is the best defense you have
    against those kinds of riders trying to attach themselves to
    the bill. Because when folk see that kind of support, they know
    they are climbing up a pretty tall hill.
        Senator Whitehouse. I couldn't agree with you more. I think
    there is an issue or two where Senator Inhofe and Senator Boxer
    might disagree. But when they get together, as they do on these
    public works and highways bills, they are a formidable pair.
    They have done a very good job at defending against that kind
    of behavior.
        But I think it always helps to make a record that supports
    the fact that industry folks and folks who depend on this
    infrastructure would also like to see these bills go forward
    clean and through regular order.
        Thank you, Chairman.
        Senator Inhofe. Thank you, Senator Whitehouse. I would only
    comment that I don't think you are going to see that. I was
    with Congressman Shuster last night, and we talked about that
    very thing. He is going to make a real effort to make sure that
    doesn't happen.
        Thank you, and Senator Rounds.
        Senator Rounds. Thank you, Mr. Chairman. Thank you for your
    leadership. Thank you for your history.
        I am still kind of stuck on the thought that no State is an
    island. It seems like maybe we will get back to that one in a
    while, sir.
        In the meantime, thank you for being here. I come from
    South Dakota, which is as far away from the ocean as you are
    going to get. But as a very large State with a very low
    population, we still sit right in the middle of the Country and
    we have two interstates that run through the State, one north
    and south, I-29, and one east and west, I-90. Four hundred
    miles east and west and 200 miles north and south. We rely on
    the Federal Highway program to maintain our economic
    competitiveness and ensure the safe and reliable transportation
    system on which not only my constituents, but constituents
    across the United States rely on to get back and forth across
    the Country.
        Businesses rely on it. We are an ag State. We have to be
    able to get our products to market, just like your folks do in
    your States. We want that.
        Now, if we were to take advantage of, or take a serious
    look at devolution, our State would have to increase its share
    of the gas tax from 22 cents to 58 cents per gallon simply to
    stay on par. I would like to hear from you what your thoughts
    are about the economic perspective of this issue, the viability
    of this type of a plan and why or if we should be discussing
    this at the Federal level as a viable opportunity.
        I would like to just go through very quickly, and I know
    the chairman was looking at doing that, but if I could, just a
    real quick one, because I do have one more question and it is
    one that I would like to get into as well. Can we start right
    here with you, sir?
        Mr. Rowen. Thank you. I never like to consistently be at
    the end of the line.
        [Laughter.]
        Mr. Rowen. Pennsylvania is called the Keystone State for a
    lot of reasons. But when you look at the transportation system
    and the geography and movement of goods back and forth between
    where goods are produced and where they need to go, one of the
    largest areas of the Country population-wise and economically
    is the northeast. Any product that has to come into the
    northeast or be shipped out of the northeast to the rest of the
    Country goes through Pennsylvania.
        If you look at the geography of Pennsylvania in terms of
    the health of the road systems, Pennsylvania roads are some of
    the worst in the Country for one very specific reason. Well,
    two reasons, there is a lot of traffic. The second is that its
    north-south location is the worst possible for roads, because
    it is not cold enough and not warm enough. Roads deteriorate
    because it gets cold and warm and cold and warm. That freezing
    and thawing breaks roads up.
        So Pennsylvania has to take a huge amount of traffic to
    service the Country and yet we have an enormous repair bill
    every year because of our geography. If there is not a better
    reason to spread funding out as a national infrastructure, I
    can't think of one.
        Senator Rounds. Thank you.
        Mr. Gardner. Senator Rounds, we operate our business on a
    North American basis. So we are very reliant on the complete
    network across the Country and through Canada and Mexico. We
    really are supportive of a Federal program, because we need
    that integrated solution. There is probably not one State where
    we are not moving either product or raw material from and to
    our facilities, or to. So as a result, we really do need an
    integrated solution. We recognize that each State should pay
    their fair share as well. But having the integrated solution is
    really the only option for us.
        Mr. Riordan. Senator, having been involved in global
    manufacturing for about 35 years of my career, what I find
    interesting is the State of our broad union is so
    interconnected with the rest of the world these days, compared
    to 15, 20, 25 years ago. But the most preeminent example of
    that is, as you suggested earlier, no State is an island by
    itself. Here in the U.S., what is very difficult to get your
    hands around is how truly interconnected, in many cases whether
    it is pass-through freight from Pennsylvania through the
    heartland, out to the east coast, west coast, wherever it
    happens to be, it is very difficult for people not directly
    involved in this process to truly understand what the impact is
    of not having a federally functioning process for allocating
    resources in order to support the infrastructure. It is just
    crucial.
        Senator Rounds. Thank you. Mr. Chairman, my time is about
    up. I will yield back and we can proceed.
        Senator Inhofe. Thank you.
        Senator Vitter is here, who is the chair of the
    Subcommittee on Transportation and Infrastructure, we should
    have gotten to him earlier. Senator Vitter.
        Senator Vitter. No, I am fine to be here and listen to more
    of the discussion. Thanks, Mr. Chair, for holding this
    important hearing. Thanks to all of you for all of your
    testimony. Certainly, count me in, count me in as the Chair of
    the Infrastructure Subcommittee. Also count me in coming from
    Louisiana. We face absolutely these same challenges and needs.
        Actually, Louisiana is one of five States where the
    proportion of bridges that are structurally deficient is in
    double digits. Our figure is 14 percent. Another 15 percent are
    functionally obsolete. We rank 19th in the Nation for urban
    interState congestion, about 32 percent of the miles on our
    urban interstates are congested.
        In Louisiana, this is a critical economic development
    issue. I really think we have moved into a second stage of
    economic development. The first stage, I think, was dominated
    by a focus on incentives, getting industry to our State, which
    has been real successful.
        But I think we are in a second stage where the critical
    factors are not those incentives, it is capacity,
    infrastructure and work force capacity. Those are the two
    limiting factors that business leaders talk to me about all the
    time. We need capacity in terms of infrastructure, roads,
    bridges, also ports, waterways. And they need the capacity in
    terms of skilled work force, work force training. So I am very,
    very interested in this.
        I am going to repeat a comment I made at the last hearing
    we had in this committee on the subject. I want to encourage us
    to all sort of cut to the chase on the financing side. We tend
    to spend months around here talking about pie in the sky,
    financing ideas and having this broad debate that is pretty
    irrelevant in the real world. I would like to encourage us, May
    isn't that far away, right? So I think it is time to cut to the
    chase.
        In my opinion, and I am open to other ideas, in my opinion,
    that real world cut to the chase reality includes three big
    options. Maybe there are others, and I would love to hear them.
    But it includes three big options. First of all, the
    traditional gasoline tax, increasing that. In my opinion, that
    need to include a tax offset for middle class families, so that
    at least everyone except the very wealthy don't pay more
    Federal taxes, either on the income tax side or the withholding
    side. I think as a practical matter, there needs to be that
    sort of hold harmless if we increase the gas tax. I think that
    is a political reality, particularly on the House side.
        No. 2, a concept Senator Boxer mentioned a few minutes ago,
    which I am certainly open to if we do it right, which is
    repatriation of foreign income and elements of business tax
    reform. And No. 3, increased domestic energy production with
    that royalty and that revenue dedicated to infrastructure. I
    think that is the short list of real world, practical, doable
    solutions. But again, I am open to other ideas.
        So my question is, do you have a reaction to those three
    categories of ideas, and would you add anything to that shot
    list of doable, realistic financing ideas?
        Mr. Heminger. Senator, I will go first. I mentioned in my
    testimony I served on one of the national commissions that was
    created a couple of bills ago. We spent the better part of 2
    years looking for an alternative to the gas tax, and we
    couldn't' find one.
        Now, the general fund, obviously, is large enough to
    support an infrastructure program. But I think we have seen
    recently with all of these extensions the peril of relying on
    the general fund. The general fund has a lot of other things to
    do. In our State of California, we have had very bad experience
    being in the general fund and competing with other general fund
    priorities. So having a dedicated user fee I think is far
    superior. I really don't think there is any other revenue
    source large enough and consistent enough to support the
    program.
        Senator Vitter. Any other thoughts?
        Mr. Braceras. Yes, Senator, I think there are some key
    principles that Congress should consider when they take up this
    challenge. And that is the one of sustainability, one that will
    allow it to grow, one that is user-based and one that is
    transparent to the users. The users need to understand what
    they are paying for and what they are getting.
        So I agree with Mr. Heminger, a gas tax is a very direct
    way to do it. People understand where it is coming from, where
    it is going. In the State of Utah, we are addressing our
    growth. We are growing very fast. We are addressing our growth
    in terms of the mobility needs with the sales tax. The
    legislature has determined that 17 percent of the statewide
    economic activity is coming through the transportation sector.
    So they have decided that 17 percent of that statewide sales
    tax will be dedicated just to the mobility portion and the gas
    tax is being used to preserve, maintain and operate that
    transportation system.
        So Mr. Chairman, user base, one that is not a one-time
    funding source, but an ongoing funding source, provide
    sustainability and start to address some of the inflationary
    issues that we are dealing with as well.
        Senator Vitter. Any other thoughts?
        Mr. Gardner. Yes, Senator Vitter. I think we are supportive
    also of the gas tax. We think it is really the simplest way to
    put a user fee in place. It really does also encourage
    sustainability and energy conservation, so anything we can do
    to use less gasoline will be promoted by the additional tax.
        We also think it is affordable. We have seen that big
    correction in the cost of fuel in the last year, and we think
    to the most extent that is going to continue for some time to
    come.
        Mr. Rowen. To the affordability of the middle class, almost
    my entire work force is definitely middle class. We think about
    their incomes, because they get it from us. We think about
    their expenses. But the other thing we have to realize is that
    over the last 15 years there has been a significant economic
    advantage to gas efficiencies of most automobiles.
        So if you think about the impact of the tax, because it is
    paid on a per gallon basis, it can be somewhat mitigated
    because of increased efficiencies of gasoline.
        Mr. Riordan. One last comment, if I may, Senator.
    Manufacturers in general are very supportive of user fees in
    order to pay for infrastructure, pay for maintenance, pay for
    repair. One of the key concerns that we have is making sure it
    is sustainable, which I believe that a user fee would be.
        Concern on repatriation is that it may not be sustainable.
    It is not so visible, and it may be an easy solution from the
    standpoint of having a perception of something else paid for,
    but back to the comments that were made before, we believe it
    is critical that the costs line up with development and that it
    is a transparent basis for everybody.
        Senator Vitter. Thank you all very much. I appreciate all
    of your testimony and all of your work.
        Senator Inhofe. Thank you, Senator Vitter. Senator Boxer.
        Senator Boxer. Thank you, Mr. Chairman. When Senator Vitter
    and I worked together on funding ideas, I want to pick up on
    his point. That was the reason I asked you, Mr. Braceras. I
    know that Senator Lee believes in devolving. And I know Senator
    Hatch believes in the trust fund. But he and Senator Wyden need
    to come up with a plan.
        Now, I would ask unanimous consent, Mr. Chairman, I just
    want to put into the record a memo that I put together with
    various funding sources. Could we put that into the record?
        Senator Inhofe. Yes, without objection.
        [The referenced information follows:]
        Senator Boxer. OK. And I want to make it clear that Senator
    Vitter and I totally agree that there ought to be an offset if
    we go with a higher gas tax for middle class and working poor.
    We have put it out here in this paper. If the option chosen is
    a 6 cent gas tax increase, the average household drives 15,000
    miles a year, then the average household will pay an additional
    $36 in gas costs. Therefore, the household would receive a
    refundable tax credit of $36.
        So it is pretty straightforward. Because we all don't want
    our middle class to be paying more. This makes sense.
        I also want to point out, Mr. Chairman, something that I
    fail to mention as often as I should, which is the cost to the
    automobile owner of roads that are in disrepair. You keep going
    over those roads, and you know what that does to your car. I am
    trying to get the average cost. But it is significant.
        So when we do repair our roads, we are saving costs. It is
    true, it is sort of hidden. But it is there, and it is very
    important.
        So in this paper that I put out, I sent it over to
    Congressman Ryan and Congressman Levin over there. I never
    heard back from them. Everyone just seems to be hiding
    underground here. So I never heard back from them. Finally I
    heard from Congressman Levin, he said thank you for your ideas.
    I was hoping for a little more.
        But what we did is we said, one way to go is the Chamber of
    Commerce way, which is an increase in the gas tax and with an
    offset. That was one way to go. Another way to go was following
    the Virginia model, which is replace all existing highway trust
    fund fees with one fee on the wholesale price of fuel. That is
    the way they went.
        Another is adjusting existing fuel fees, and that is all
    going to be in the record for you to see. Another is the
    repatriation, plus a smaller increase in the gas tax. And then
    another is a new fee on the sale of new and used vehicles,
    which if you put a 4 percent fee on the sale price of new and
    used vehicles, you get $89 billion over 6 years, which is
    enough to fill the hole. And another is an honor-based fee on
    vehicle miles traveled. We also felt, and I know this is
    controversial, that we ought to look at different bonding
    authorities. Because the Build America bonds have been very,
    very successful.
        So here is the thing. I will put this in the record, and it
    doesn't reflect anybody's opinion but mine. But it shows that I
    am willing to go to all of these and give an offset to the
    middle class and working poor for that.
        Reports show that crumbling roads cost $750 per vehicle
    each year. Can you imagine? That is wear and tear. So all this
    talk about $36 pales in comparison to the benefit of this. So I
    am going to close and say this. I am working with the
    construction industry to get us all together in April,
    Republicans, Democrats, business, labor, everybody in between,
    State, I met with the National Association of Counties
    yesterday. And I think frankly, I am a person that used to
    organize around issues. I still organize around issues. If I
    don't see anything moving forward, if there is just a lot of
    ho-hum, I think we need to get together and stand together and
    show the desperate situation we are in. I know no one hates
    these short extensions more than my chairman. He hates it
    because of how expensive it is.
        So can I ask each of you if you would be willing, if we do
    put together such a bipartisan event, would you be willing to
    either come or send a statement? I am seeing everybody nodding
    yes. Well, that means a lot to me. Because I think you are such
    compelling witnesses, and I thank the Majority and the Minority
    side for bringing together such a wonderful, astute group. I am
    just saying now, I am very calm on the outside. But on the
    inside, I am not calm.
        Senator Inhofe. You are a tiger.
        [Laughter.]
        Senator Boxer. I am not calm. Because I don't like where we
    are headed now. I don't see it. The only action I see is from
    this committee. And it is great. But where is everybody else?
        So I want all of you who are here today and in the
    audience, please these other committees and the House people.
    They all say they want to do something. But they all said that
    the last time and we got stuck with this little extension which
    is really dangerous for our economy. It is dangerous for our
    citizens. It is costly, it is bad.
        So on the inside, I am absolutely desperate to get this
    done. As Steve said, it is not so much about my State--it is.
    We need the Federal help. But honestly, it is about most of the
    other States. Because we do have that long construction season.
    With climate change, we don't even have rain any more, it is
    the saddest thing. For whatever reason it is, we do have a
    drought. And we do have a longer construction season than
    anyone else. So we have fewer problems in this regard. And we
    can advance funds, because we are a nation State, we are I
    think the seventh or eighth largest nation, considering our
    GDP.
        This is about the Country, one Country under God. That is
    what this is about. So Mr. Chairman, I just am so grateful for
    your leadership and look forward to continuing our working
    together.
        Senator Inhofe. The one thing you didn't mention, the
    reforms that come. I have to say this in a complimentary way
    about Senator Boxer, because there are some things that we did
    in our reforms, and this goes back to 2005, it goes to the 27-
    month bill, that I didn't really think we were going to be able
    to get those two. That is a huge thing from a conservative
    perspective and advantage.
        By the way, I might mention I am visiting with the ACU this
    afternoon on this very subject, which I will cover in just a
    minute.
        We are joined now by Senator Capito.
        Senator Capito. Thank you, Mr. Chairman. I would like to
    thank the ranking member, because I was on the conference
    committee for MAP-21 and we just had our West Virginia
    transportation folks in yesterday. Some of the reforms that
    were in that bill, we are reaping the benefits, they were very
    complimentary on how it is working State to Federal. Hopefully
    we can continue to do that.
        One of the things I wanted to ask about, and I apologize
    for not being here for the initial testimony, is the public-
    private partnerships. That is another thing that I heard my
    State DOT, is we are really maxing this out in West Virginia,
    going in a cautious way. But it is incredible to me the amount
    of savings that these three Ps can do for a State and really
    stretch our dollars. Route 35 in my old congressional district
    is a great example. We are about ready to let a contract, or
    they have a request for bids right now.
        So I would just ask one question, and I have two questions.
    So whoever wants to answer this, maybe Mr. Braceras. What
    experiences have you had with the experience of PPPs, and do
    you have any suggestions for the next generation of PPPs?
        Mr. Braceras. Thank you, Senator, for that question. I
    think first of all you have to look at what you would define as
    a P3, a public-private partnership. It is really a spectrum of
    how you do your work. We outsource almost all of our design
    engineering, most of our construction engineering and obviously
    all the construction. We were the first State to utilize
    design-build on a highway infrastructure, one of the first
    States to use construction manager general contractor.
        Basically, the more we can define outcomes that we want to
    achieve and leave the means and methods to those who are doing
    the work, the better we are going to see better outcomes, we
    are going to see better value and return to the taxpayers. So I
    encourage further any expansion, any abilities to help bring
    the private sector in as partners in delivering our program. We
    are a relatively small State, and some people look at P3s as
    maybe under a tolling arrangement. We have done some analysis
    on that. We have also looked at availability payments in doing
    this as well.
        So all of these are tools. I don't believe they are a
    financial answer to our transportation system. But I think they
    are important components that we need to keep available.
        Senator Capito. I think they add predictability, too. And
    at this point, when we have low interest rates, this is really
    where we should be maximizing this opportunity.
        I am going to pivot here to Mr. Riordan and ask a question
    on ground level ozone. Ozone in a highway hearing, yes, we
    wonder about that, but they are very linked, as you know. EPA
    recently proposed a change to the national standard for ground
    level ozone that will most likely end up between 60 and 70
    parts per billion. We don't know exactly where they are going
    to set that standard. But my entire State would be out of
    compliance, the State of West Virginia, meaning significant
    highway projects that are vital to West Virginia could be
    delayed or compromised. And those jobs would be lost.
        Let me just give you an example. If you have ever been to
    the Greenbrier, which I hope you all go and please visit, it is
    a very rural part of West Virginia. That county is Greenbrier
    County. That would be out of compliance with the new ozone
    limits that are being talked about.
        So I would ask you a question. What difficulties could
    States face in implementing these new measures to meet a more
    stringent ozone standard?
        Mr. Riordan. It is a very significant concern on the part
    of manufacturers, Senator. I think the challenge that we see as
    manufacturers and again, based on my role as the chairman of
    the Small Medium Manufacturing Group which represents 12
    million of the 13 million manufacturing folks that are working
    here in the U.S., a key concern is will it only defer or delay
    increased costs from a highway standpoint, but the broader
    concern that we have as it relates to, as you move closer to
    the effectively background level of ozone, costs go up
    exponentially and the benefits go down dramatically. Our
    concern is very, very significant as it relates to, back to
    your point of the entire State of West Virginia. Our analysis
    shows that about 97 percent of the U.S. potentially would be in
    a non-attainment zone, which would de facto freeze development
    from a manufacturing standpoint. So this is a huge concern, not
    only as it relates to our quest in terms of moving the Highway
    Bill forward and continued infrastructure development, but the
    broader manufacturing industry at hand.
        Senator Capito. Right, and then that obviously is
    transportation projects as well, particularly larger ones.
        So Mr. Chairman, I would like to say that I know this is an
    area where you have great concern as well. It is amazing to me
    that we are going to put new standards on ozone regulations
    when the compliance hasn't even been achieved to a significant
    amount in the former standards that were placed upon the rest
    of the Country. So I want to join with you and shed a light on
    this and see how we can do this better. I think there are lots
    of ways we can.
        Thank you all very much.
        Senator Inhofe. Thank you, Senator Capito. Senator Wicker.
        Senator Wicker. Thank you, Mr. Chairman.
        I want to thank Senator Capito for bringing up the question
    of ozone. There are two things I find frustrating about this
    new rule. Jurisdictions that have made progress in actually
    lowering the ozone level are now being rewarded with the back
    of the hand and being found in non-attainment, after having
    made progress. Also so many areas, including perhaps, you are
    familiar with DeSoto County in Mississippi, which is a suburban
    county of Memphis. There is nothing that the activities in
    DeSoto County have done to raise the ozone level. It comes from
    the west and it comes from the metropolitan area. And yet
    development and job creation are being stifled in this suburban
    county, through no fault of their own. And there is really very
    little they can do to prevent it, since the ozone comes from
    someplace else. So thank you, Senator Capito, for mentioning
    that.
        Mr. Braceras, let me preface my question with a fairly
    lengthy beginning. The President recently issued an executive
    order. It exposed the area where Federal agencies will be
    required to follow floodplain management, expands it from the
    100-year floodplain to the 500-year floodplain. Currently there
    are projects to raise roads to above the 100-year floodplain to
    address the risks. Now that will not be enough.
        There will be increased costs because of limitations on
    building in the floodplain. There will also be costs for
    mitigating any impacts to the floodplain and complying with
    ``zero rise'' policies that say a project cannot have the
    effect of increasing flooding. The rule would be used by
    Federal agencies overseeing new infrastructure projects in
    transportation, energy, housing and water supply. Agencies will
    be required to choose one of three approaches when building or
    completing maintenance to infrastructure. One, use the best
    available climate science, or two, build two feet above the
    100-year flood elevation as a 1 percent annual chance of
    flooding that instance, or three, build to the 500-year flood
    elevation. There is a .2 percent annual chance of flooding in
    that instance.
        The rule could have significant impacts to the distribution
    of Federal highway aid, USDOT TIGER grants, HUD CDBG grants,
    Federal loan guarantees, FEMA flood insurance and flood plain
    management and disaster response programs. What impacts related
    to cost would your member agencies face, Mr. Braceras, if they
    were required to build or repair Federal highways two feet
    above the current 100-year flood elevation?
        Mr. Braceras. Senator, I always struggle with specific
    answers being given to States in terms of how to solve issues.
    Everything that we do we need to evaluate the risks, the
    benefits and the costs associated with that and make strategic
    decisions on what is best for the taxpayers, their safety and
    bring that all together.
        Now, Utah is a relatively dry State. But believe it or not,
    we have areas that are dry washes that have been defined as
    navigable waterways and require extensive permitting in order
    to make decisions. I would be concerned about the ability for
    States to make the proper decisions for infrastructure
    preservation. So if we are going to have to touch a piece of
    roadway or bridge, and as soon as we touch it we are going to
    need to bring it up to a new standard, that keeps States and
    municipalities from doing the right treatment at the right time
    and thereby costs taxpayers more in the long run and maybe
    creates unsafe conditions.
        So every time we make a decision, we should evaluate it in
    the context of the benefit cost in the larger picture, not just
    regarding a specific resource.
        Senator Wicker. And when you mention cost, that is cost for
    mitigation, for change design or change location, or for
    different or more expensive materials. Would anyone else on the
    panel like to jump in and help us understand this issue better?
    Mr. Riordan?
        Mr. Riordan. Senator, we have significant concerns on the
    broader context of obviously this, along with the waters of the
    U.S. regulations that are being promulgated. In our mind,
    frankly, it is similar to discussion we just had on ozone,
    where NAM has put together a study that shows the ozone
    regulation would be the most expensive rule ever promulgated
    within the Federal Government, costing a potential $2 trillion.
        A key concern is, I don't have the facts behind what this
    proposed regulation would cost in terms of floodplain. But
    again, it is a question of, as I would call it from a
    manufacturing standpoint, what problem is it we are trying to
    solve here, and is this the most cost-effective way of doing
    it.
        Senator Wicker. Thank you. Thank you, Mr. Chairman.
        Senator Inhofe. Thank you, Senator Wicker.
        We are going to recognize Senator Rounds, but let me kind
    of announce this, so that my two members who were not here at
    the opening of this meeting. I commented that confession is
    good for the soul, and I confess that 25 years ago, Connie Mack
    from Florida and I were the two fathers of devolution, until we
    realized why it wouldn't work. The reason that Senator Boxer
    brought up my concern as it affects our defense system is that
    I was the ranking member on the Senate Armed Services Committee
    in addition to working on this committee.
        So after everyone is all through and gone, I am going to
    ask you to go ahead and continue down to respond to the
    questions that I first asked. You have done a pretty good, and
    Senator Rounds brought it up, but I want to talk about it in a
    little more detail. Senator Rounds?
        Senator Rounds. Thank you, Mr. Chairman.
        I would like to followup on the line in terms of the
    streamlining that could be done to save dollars. I think that
    is one of the most important things we have to do, in order to
    maintain credibility when it comes to how we spend tax dollars,
    whether they be at the State level, local level or at the
    Federal level.
        Sometimes I am not so sure that we are seen as looking at
    saving dollars here at this level. In fact, every time we seem
    to get involved in a project, it gets more expensive. A lot of
    that has to do with a regulatory process that creates expense.
    I understand there are good people who have good desires to
    have things work appropriately and to protect natural resources
    and so forth. But it comes at a cost. And part of the cost is
    that people who are paying those taxes wonder why it costs more
    to get projects done.
        If we are going to ask States to increase gas taxes or if
    we are going to ask people to pay a higher gas tax or any other
    type of a tax, I think we ought to be able to show them that we
    are doing the best we can to be efficient in the delivery of
    those services. Could you help us a little bit with any
    suggestions you may have in terms of how we streamline the
    process, save dollars, and for lack of a better term in the
    business community, talk about getting more bang for our buck?
        Mr. Heminger. Senator, I would like to return to the word
    that Carlos used. It is risk. I think we have designed a system
    now that tries to suck every little bit of risk out of a
    project development process, and in doing so, we have
    guaranteed that everything will take too long and cost too
    much. I think we need to be candid with the American people
    that if you want it to go faster, we might have to take a
    little risk, and something might go wrong and we might have to
    start over and do it again.
        But we have been doing that to a considerable extent in our
    region, in our State, where we have begun design activity
    before we have an environmental clearance. And we are taking a
    risk that the environmental process won't surprise is with
    something. And sometimes we are surprised. But more often than
    not, and we have gained that time on the schedule by taking
    that risk.
        I think the more the Federal Government can formalize that
    process and be a partner in taking some risk, I think risk-
    taking and entrepreneurship is rewarded very often. But
    sometimes you fail. I think we have to be willing to fail a
    little bit more to make our system work better.
        Mr. Braceras. Senator, following on Steve's comments, the
    only one who doesn't make a mistake is somebody who doesn't do
    anything. What I try to encourage our Staff in the Utah
    Department of Transportation is to be innovative and to try new
    things.
        What I talked about in my testimony is anything we can do
    to move toward an outcome-based program as opposed to one that
    has been for many, many years focused on process, and that is
    true with State level agencies as well as with Federal
    agencies. We have almost gotten to the point where people are
    afraid to make a mistake. And the best way not to make a
    mistake is not to make a decision. So during the process, we
    can pull that process out and draw that process out longer.
    There is no real reward for getting to that outcome, to that
    final decision point.
        So anything Congress can do to identify what the goals are
    and that all Federal agencies and State agencies understand
    what those goals are, as few restrictions on that process,
    because that allows innovation to come into play and allows us
    to be able to focus on how we are going to achieve. Once people
    own the how, once those people doing the work have the ability
    to determine how they are going to accomplish that goal, they
    become accountable and you find innovation taking place.
        So outcome-based, less process-based.
        Senator Rounds. Anyone else?
        Mr. Riordan. Senator, in my testimony I mentioned that our
    costs of transportation delays, poor productivity, customer
    frustration adds about 1 percent to our costs. Several Senators
    earlier today mentioned the cost of car repairs. Mind you, that
    is only the tip of the iceberg on the consumer side.
        I think the business community clearly understands and can
    quantify the impact to it. But eventually a lot of that gets
    passed on to consumers, one way or another. I think what the
    broader concern is the visibility behind what does this really
    cost the average middle class person, in terms of car repairs,
    delays in their own personal life, being late for work and
    getting docked against that, and all the other drama that goes
    with the poor and deteriorating infrastructure we have.
        I think we talked about $36 gas tax increase compared to a
    lot more than that. How do we make what I would describe as the
    business case to the broader U.S. consumer of understanding
    that and recognizing this gas tax increase is a bargain? Any
    business person would take this deal in a second with a five to
    ten to 20 times payback.
        Mr. Gardner. I think we talked about before really any
    opportunities to simplify processes and challenge the status
    quo is well supported by us. We are seeing some of the intents
    of that in the programs. We talked about environmental
    permitting is really probably the biggest bottleneck. So
    anything we can do in that area is going to be helpful.
        I think the most important thing is just to make sure that
    we are making the right investments and that the investments
    are focused on congestion and road quality. Because we can
    directly correlate congestion to additional costs for our
    industry.
        Mr. Rowen. Leadership. It is all about leadership. Get the
    message out. We have all heard today, and every one of us
    sitting in this room today understands that raising the gas tax
    is going to save virtually every American money, if not a lot
    of money, in other areas. So you simply have to, the American
    public will buy something that is a good deal. They are great
    at recognizing deals.
        I think that the fear that comes out of the political
    process of the concept of raising taxes is, can be mitigated by
    leadership, by a clear, concise message that you are doing this
    to make things better for all Americans, and in the end, it is
    money well spent.
        Senator Rounds. Mr. Chairman, I think the group here that
    has answered the question tells us, No. 1, they are prepared to
    make an investment, but they expect us, with leadership, to
    provide that it is done as transparently as possible, and the
    delivery, if we are going to expect people to put more dollars
    into the system, we are going to make a commitment that we will
    see that they are spent as efficiently as possible. I think
    that means we have a big job ahead of us.
        Senator Inhofe. Thank you very much, Senator Rounds. We are
    going to recognize Senator Carper, but I want to make a comment
    here about this. A lot of people don't understand what we are
    talking about. First of all, I would like to have us not really
    talk about a gas tax increase. It is a user fee. Now, user fees
    are popular. Look at the inland waterway user fee, the
    stakeholders, those who are paying for it are the ones who want
    to have it. So I think that is a good way of putting it.
        Second, keeping in mind, as I said in my opening statement,
    that this is what we are supposed to be doing here. Read the
    Constitution. In fact, I will quote something if you will bear
    with me a second, Senator Carper.
        Senator Carper. Take all the time you want.
        Senator Inhofe. The American Conservative Union, in their
    document that they helped us get this passed on the 27-month
    bill, they are saying, ``Not passing a bill will hurt our
    already suffering economy.'' And then the two elements, quoting
    the Constitution, the two elements that are the most basic
    responsibilities of the Federal Government are national defense
    and the development of a national transportation
    infrastructure.
        I say this, and we have to keep saying it, because somehow,
    people forget what we are supposed to be doing here in
    Washington. This is what our founding fathers said, it was
    their idea. It was put forth. The reason I mention that Senator
    Boxer talked about my concern over defense is that I had that
    job as ranking member on Armed Services. So I made quite a
    study, I say to my good friend, Senator Carper, of Eisenhower
    and the statements that he made back when he first gave birth
    to this concept.
        The last one I will leave with you, he said, ``InterState
    commerce doesn't stop at the State boundaries. No State is an
    island,'' as you repeated from my statement before. It is just
    as much about national defense as it is interState commerce.
    That is what we are talking about here.
        Senator Carper.
        Senator Carper. I am Tom Carper, and I approved this
    message.
        [Laughter.]
        Senator Carper. As the senior Senator from first State to
    ratify the Constitution, I applaud your use and reference to
    the Constitution here this morning.
        Welcome, everybody. It is great to see you. Thank you so
    much for joining us and trying to help us find our way through
    an important issue. Colleagues hear me talk a lot about our
    jobs. Our job is not to create jobs. My job as Governor was not
    to create jobs. Our job is to help create a nurturing
    environment for job creation. And you can't do that without a
    great transportation infrastructure.
        Since 1993, as you know, when we set the Federal gas tax at
    18.4 cents, 42 States have increased their State gas tax rates.
    Twenty States have taken action to increase revenues for
    transportation in just the last 5 years. Eight of these were
    either in 2013 or 2014. I understand that 12 more, another
    dozen, are considering action this year or next.
        How many of these States have said, we are ready to go it
    alone and we don't need a Federal partner? How many of those
    States have said that? Let's go down the list. Mr. Braceras?
        Mr. Braceras. Thank you, Senator. The State of Utah has
    made an amazing commitment to transportation. Utah recognizes
    that it is the backbone and one of the foundational elements
    for our economy. So we have made a large commitment, almost 20
    percent of our statewide sales tax goes to transportation, 24.5
    cent gas tax goes to transportation. But we rely on a Federal
    transportation system, and it is very important to us.
        Senator Carper. Thank you.
        Mr. Heminger, how many States have said, well, we are ready
    to do this by ourselves, we don't need that Federal money?
        Mr. Heminger. Certainly not California. In 1993, the
    statistics you are quoting, Senator, our gas tax was 16 cents.
    It is 46 cents today. So we are certainly willing to do our
    share. But we are looking for a Federal partner to come along
    with us.
        Senator Carper. Thank you. Same question, Mr. Riordan.
        Mr. Riordan. Senator, I am not familiar with the specific
    facts in the State of Wisconsin, but I don't believe they are
    willing to go it alone.
        Senator Carper. All right, thank you.
        Mr. Gardner.
        Mr. Gardner. I am also not familiar with the State of
    Illinois, but I can say that we are supportive of a federally
    directed program, because our business relies on the complete
    transportation network to deliver our products.
        Senator Carper. Thanks. And finally, Mr. Rowen.
        Mr. Rowen. Senator Carper, earlier I was talking about the
    geographical significance of Pennsylvania, the fact that so
    much traffic going into the northeast goes across Pennsylvania,
    and then the geographical impact of the weather on the
    Pennsylvania roads. So there is just no way Pennsylvania could
    be forced to pay for all the maintenance of the roads in
    Pennsylvania.
        Senator Carper. Thank you. My staff, at my request, did
    some analysis. They found in States that have raised revenues
    for transportation, 90 percent of legislators who voted for a
    revenue increase won their primary, won their general election.
    They were re-elected. But so, over 90 percent of them were
    Republicans, just under 90 percent of them were Democrats. What
    lessons can we take from that information, from action at the
    State level? Mr. Rowen?
        Mr. Rowen. Pennsylvania just elected a new Governor. And he
    was elected on the idea that he was going to tax natural gas
    coming out of the State. So the idea that, and I understand it
    is a different kind of a tax, but Pennsylvania looked at the
    need for infrastructure and said, we need to get more revenue.
    And Governor Wolf was honestly willing to put on the table that
    process. So he clearly did exactly what you are recommending.
        Senator Carper. Thank you. Mr. Gardner.
        Mr. Gardner. I think it demonstrates that the general
    public is willing to support this additional tax. As we have
    talked about already this morning, it just makes good business
    sense. A small increase in your annual costs has payback in
    terms of reduced repair costs to cars and certainly for
    businesses, it has a great payback in terms of reducing
    congestion.
        Senator Carper. Thank you. Mr. Riordan, any lessons learned
    you think we could take from those statistics I just cited?
        Mr. Riordan. Good question, Senator. I believe that the
    American public clearly believes in the fairness principle of
    user fees make sense for people who are using the roads and
    infrastructure that goes with that. That said, I think
    manufacturers in general support all the above discussion in
    terms of how to fund this as it relates to recognizing, back to
    the chairman's comments earlier, about the criticality of the
    infrastructure, whether it is public-private partnerships or
    other mechanisms here. But this issue is much, much too
    important to leave languish. Because frankly, we continue to
    lose ground against our major competitive countries, China in
    particular. And frankly, our long-term best interests are best
    served by getting off of this and developing a coherent, long-
    term approach.
        Senator Carper. Thank you. Mr. Chairman, my time is about
    to expire. Can I just have one more minute?
        Senator Inhofe. We actually had two rounds.
        Senator Carper. Thanks so much.
        I want to touch again on what you just said about all of
    the above. Because we have an all of the above energy policy,
    which I think is good. For many years, and we talk about our
    baseload for electricity generation, for many years it was
    coal, it was nuclear, 40 percent coal, 20 percent nuclear. Coal
    is still, close to 30 percent, is going to be significant for,
    I think, a long time. Natural gas is close to 30 percent now I
    am told. But those were basic, the baseload.
        I think for transportation funding, we need a baseload. And
    I believe maybe most appropriately it is the user fee. The
    baseload could include things like, we are going to open up
    some new lands off of Virginia or North or South Carolina or
    Georgia, there would be leased income from that, there would
    be, if there is oil and gas out there, there would be some
    revenues generated. That could be part of the all of the above
    approach. Then we could actually find ways to save money. The
    Department of Transportation has a bunch of ideas.
        When the last 2-year transportation bill was put into
    effect, I think they looked hard to find ways, how to rebuild
    roads, highways, bridges in a more cost-effective way. So that
    could be, if you will, part of the all of the above approach.
        But I have been thinking a lot about it, and I think the
    President has a proposal. I am not a big fan of repatriation,
    but the President has an interesting proposal and that could be
    part of an all of the above approach as well. So thank you for
    mentioning that term.
        Back to you, Mr. Heminger, if I could. Again, my question
    was, what kind of lessons should we take away from the fact
    that over 90 percent of the Republican State legislators got
    re-elected after voting for user fee increases and almost 90
    percent of the Democrats got re-elected? What should we take
    from that?
        Mr. Heminger. I think the simple answer is that most
    Americans do understand the user fee concept. It is sort of the
    PR genius of our profession that we have labeled a user fee the
    gas tax. And I don't know when we started doing that. But that
    was our original sin.
        But the public understands that they are paying a fee that
    will be used to fix their roads and transit systems. They get
    that connection and they support it.
        Senator Carper. I like that, original sin. That is good.
        Mr. Braceras. Senator, I agree with Mr. Heminger on the
    need, that it needs to be linked to the user. That is an
    important concept. But I also believe that the public needs to
    know what they are going to get for their investment. They need
    to know what those outcomes are going to be, and we as
    government officials need to be absolutely transparent on how
    their money is used and what we achieve with their money. I
    think if you can demonstrate that, the public can recognize a
    good business deal.
        Senator Carper. Good, thank you. We often talk about the
    jobs that could be created from a full-funded transportation
    bill. I have heard 600,000 jobs, 700,000 jobs. A lot of jobs
    for people, frankly, who have been looking for work for quite
    some time. We also need to think about the investments we could
    make in our transportation infrastructure that could have
    broader economic impacts.
        A recent report by McKinsey Global Institute found that the
    U.S. must spend at least, get this, $150 billion more a year on
    infrastructure through 2020 to meet our Country's needs and to
    maintain global economic competitiveness, $150 billion. The up
    side of this was that in doing so, it would add 1.5 percent to
    our annual economic growth and create at least 1.5 million
    jobs. So that is 1.5 percent addition to economic growth and
    about, almost 2 million jobs. From your perspective as owners
    and users of this system, does any of this sound even close to
    being true and accurate? Mr. Braceras?
        Mr. Braceras. I don't have the numbers off the top of my
    head, Senator, but yes, absolutely. I think we talk sometimes
    too quickly about the benefits of a transportation bill and
    what they have on the construction industry. And those are
    important jobs. But really what is important is how well the
    transportation system works for the business owners who we have
    here today. They will make different and more effective
    decisions if they have a transportation system that is safe,
    reliable and has the lowest cost of ownership for them.
        So I think that is the important part of our transportation
    system.
        Senator Carper. Thank you. Mr. Heminger.
        Mr. Heminger. Senator, I don't think it is an accident that
    what we regard as the golden age of the American economy in the
    last century coincided with when we were building the
    interState system, any more that I think that it is an accident
    that when you see the economies in Asia and to some extent in
    Europe taking off because of infrastructure investment, that is
    not a coincidence, either. We need to get back to that business
    here in America.
        Senator Carper. Thank you. Mr. Riordan.
        Mr. Riordan. Senator, manufacturers in general absolutely
    agree with the points you made. Frankly, the National
    Association of Manufacturers has developed a similar study that
    shows the same kind of comprehensive benefits available to us
    if we are smart and move this forward.
        Senator Carper. Good, thanks.
        Mr. Gardner. Senator, we also agree. I think what we have
    seen in manufacturing is that for every job we create, there
    are probably another two and a half jobs that are spinoffs as
    well. So it is quite probable, what you are seeing there. From
    our company's perspective, we are making investment decisions
    based on what we see in terms of infrastructure today. So any
    commitment we can make to that infrastructure will help us make
    better decisions.
        Senator Carper. Good. And last, but not least, Mr. Rowen.
        Mr. Rowen. It is incomprehensible, as a business owner, for
    an entity or organization not to invest in infrastructure, if
    all the economic numbers say that the amount of money you
    invest will pay dividends tenfold over in the future. It is
    incomprehensible that could happen. And this is a Country that
    we talk about capitalism. Capitalism is the root of our
    economy. This is a capitalistic concept. It is a business
    decision, pure and simple. As leadership, you simply have to
    sell it. You have to sell it first to the people who make the
    decisions, so it is your Congress that authorizes this. Then
    you have to simply sell what is an absolutely obvious decision,
    a business decision, to the American public.
        Senator Carper. Good. I think it was Andrew Jackson who
    used to say, one man with courage makes a majority. Mrs.
    Jackson said, one woman with courage makes a majority.
        [Laughter.]
        Senator Carper. But we need some men and women around here
    with courage, political courage, to do what I think most of us
    know needs to be done. And I am encouraged that some folks on
    this committee, a number of my folks in the Democrat and
    Republican party here in the Senate and hopefully in the House
    will be willing to show that kind of leadership and courage. If
    we do, people will join us.
        I think at the end of the day, we will be rewarded for
    that. Leadership has been defined as the courage to stay out of
    step when everyone else is marching to the wrong tune. I think
    people want us to make the right decisions. My hope is that we
    will. Thank you.
        Senator Inhofe. Very good, very good, Senator Carper.
        As I said, I want to give the last three an opportunity to
    respond to the question that I opened up with. I say to my
    friend, Senator Carper, who is one, a lot of people are not
    aware that our old friend from Florida, Connie Mack and I, 25
    years ago, were the fathers of devolution until we realized
    that it wouldn't work. So they are responding, and we had just
    gotten through two of them.
        But before doing that, we have our Secretary of
    Transportation here, Mike Patterson. Hold your hand up, Mike.
        And of course, everybody knows Gary Ridley.
        Let me ask one question to you, Mr. Rowen. You said
    something I didn't know. Did you say, did I understand there is
    some dedication of part of the revenue that is derived in the,
    either from natural gas or oil in Pennsylvania under your new
    Governor? Is that correct?
        Mr. Rowen. Under the previous administration, it was my
    understanding that they were charging an impact fee at
    extraction. But I believe that amounted to something like 1 or
    2 percent.
        Senator Inhofe. But it was something, a recognition. See,
    most people think when you are talking about oil and gas
    production that we are talking about the western United States.
    That is not true anymore.
        Mr. Rowen. No, absolutely not.
        Senator Inhofe. With the Marcellus in Pennsylvania and New
    York, I have heard arguments, pretty persuasive arguments in
    Pennsylvania, that it could be your second largest employer
    right now. So it is a major thing.
        And that is a source. And that source was one of the three
    that Senator Vitter brought up. No one responded to that, the
    other two but not that. Would anyone want to respond to that in
    terms of a partial source that is out there? If we can get to
    the point in this Country when we start, and we will get to
    this point, start really having the Federal land give us the
    benefits that we are currently getting from State and private
    land, while we have gone, increased by 61 percent in State and
    private, we have actually decreased by 6 percent in Federal. I
    see that as an opportunity to go out and develop a new,
    consistent source to supplement any changes that might be made
    in the user fee.
        Does anyone want to refer, make any comments about that
    portion of his suggestion?
        Mr. Heminger. I guess, Mr. Chairman, just in one respect,
    as you know, the Federal gas tax is not levied on consumers. It
    is really levied at the refinery, and everybody down the chain
    just reimburses the one ahead of them. So to the extent that
    you already have the tax at the refinery, it is not too much
    farther to take it back to the place where you are digging it
    out of the ground.
        Senator Inhofe. Very good point.
        Mr. Heminger. So it seems to me from the user fee
    perspective, it would be consistent. One thing I would be
    concerned about is, I know oil and gas exploration can be a
    pretty risky business and it can go through cycles. I think one
    thing we always look for, and you have been emphasizing, is
    predictability and reliability of the revenue stream.
        Senator Inhofe. Any other comments?
        Mr. Riordan. Mr. Chairman, I would agree with Mr.
    Heminger's comments. And one other additional point is the
    transparency that goes with that, whether it is the wholesale
    level or extraction level.
        Senator Inhofe. Sure.
        Mr. Riordan. But I think it is important to be clear and
    transparent in general as well as with the American public
    relative to where this is coming from, and again I would echo
    the comments of the hit and miss concern that the extraction
    level, the faucet can turn on real hard and it can't turn off
    real hard, as you know.
        Senator Inhofe. I understand that. Also, I might suggest
    there is a way of doing this in a more consistent basis. I come
    from an oil and gas State, and we know how to do those things.
    Any comment on that, Mr. Gardner?
        Mr. Gardner. Yes. I was going to say that I think the
    Federal leadership is absolutely critical. We need a complete,
    integrated solution across the United States. I think the gas
    tax, or a user fee, is a very simple concept that can be sold,
    and we see it supported at the State level.
        I would also say that the States and all the companies that
    use the systems also need to demonstrate they are making
    investments. I can say from an Ingredion perspective, we are
    investing in transportation management systems so we can be
    smarter with the use of trucks. We are maximizing payloads so
    we can use less trucks and we are redesigning our distribution
    network to minimize the number of miles.
        So we are making our effort. I think we need a complete,
    integrated solution to beat this problem.
        Senator Inhofe. We have actually gone over our time, but
    since I initiated a question to be responded to by all five, I
    think Mr. Heminger was as far as I got. Any comments for the
    last three having to do with devolution?
        Mr. Riordan. Mr. Chairman, I think you, as they say, hit
    the nail right on the head. This is one of the fundamental legs
    of the service and the contribution from the national or the
    Federal Government. I find it hard pressed, and frankly,
    manufacturers in general find it hard pressed on how the
    Federal Government can walk away and pass the problem of
    funding or not back to the States. The criticality of the
    interState highway system, as you alluded to earlier, was very
    much dependent upon planning and vision at the Federal level. I
    think we would strongly encourage that to continue.
        Senator Inhofe. Yes, thank you. Agreed?
        All right. Let me thank our panelists. You have been very
    helpful. We have held you longer than we had said we would. But
    the intensity of this issue is so significant. As you have
    witnessed, it is one that is bipartisan. It is one that we all
    know. I think one of my jobs is to kind of explain the
    Constitutional requirements that we are talking about when we
    talk about a system.
        So we are going to try to make this work this time. I
    remember, I have been at this for so long, I remember back when
    I was in the House T&I Committee, we had one problem with the
    Highway Trust Fund. We had too much surplus. Are you guys old
    enough to remember that? Well, we did. And we all know what
    happened to that, and that is why we need to get back and start
    doing the job that the Constitution says that we should be
    doing.
        With that, we will adjourn.
        [Whereupon, at 11:30 a.m., the hearing was adjourned.]
        [Additional material submitted for the record follows.]
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