[Senate Hearing 114-72]
[From the U.S. Government Publishing Office]
S. Hrg. 114-72
SURFACE TRANSPORTATION REAUTHORIZATION: BUILDING ON THE SUCCESSES OF
MAP-21 TO DELIVER SAFE, EFFICIENT, AND EFFECTIVE PUBLIC TRANSPORTATION
SERVICES AND PROJECTS
=======================================================================
HEARING
before the
COMMITTEE ON
BANKING,HOUSING,AND URBAN AFFAIRS
UNITED STATES SENATE
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
ON
EXAMINING THE REAUTHORIZATION OF ``MOVING AHEAD FOR PROGRESS IN THE
21ST CENTURY ACT'' (MAP-21; P.L. 112-141), THE SURFACE TRANSPORTATION
AUTHORIZATION BILL
__________
APRIL 21, 2015
__________
Printed for the use of the Committee on Banking, Housing, and Urban Affairs
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COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS
RICHARD C. SHELBY, Alabama, Chairman
MICHAEL CRAPO, Idaho SHERROD BROWN, Ohio
BOB CORKER, Tennessee JACK REED, Rhode Island
DAVID VITTER, Louisiana CHARLES E. SCHUMER, New York
PATRICK J. TOOMEY, Pennsylvania ROBERT MENENDEZ, New Jersey
MARK KIRK, Illinois JON TESTER, Montana
DEAN HELLER, Nevada MARK R. WARNER, Virginia
TIM SCOTT, South Carolina JEFF MERKLEY, Oregon
BEN SASSE, Nebraska ELIZABETH WARREN, Massachusetts
TOM COTTON, Arkansas HEIDI HEITKAMP, North Dakota
MIKE ROUNDS, South Dakota JOE DONNELLY, Indiana
JERRY MORAN, Kansas
William D. Duhnke III, Staff Director and Counsel
Mark Powden, Democratic Staff Director
Shannon Hines, Professional Staff Member
Jen Deci, Professional Staff Member
Laura Swanson, Democratic Deputy Staff Director
Homer Carlisle, Democratic Professional Staff Member
Dawn Ratliff, Chief Clerk
Troy Cornell, Hearing Clerk
Shelvin Simmons, IT Director
Jim Crowell, Editor
(ii)
C O N T E N T S
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TUESDAY, APRIL 21, 2015
Page
Opening statement of Chairman Shelby............................. 1
Opening statements, comments, or prepared statements of:
Senator Brown................................................ 2
Senator Crapo
Prepared statement....................................... 26
WITNESS
Therese W. McMillan, Acting Administrator, Federal Transit
Administration, Department of Transportation................... 4
Prepared statement........................................... 26
Responses to written questions of:
Chairman Shelby.......................................... 32
Senator Brown............................................ 41
Senator Vitter........................................... 41
Senator Kirk............................................. 42
Senator Menendez......................................... 44
(iii)
SURFACE TRANSPORTATION REAUTHORIZATION: BUILDING ON THE SUCCESSES OF
MAP-21 TO DELIVER SAFE, EFFICIENT, AND EFFECTIVE PUBLIC TRANSPORTATION
SERVICES AND PROJECTS
----------
TUESDAY, APRIL 21, 2015
U.S. Senate,
Committee on Banking, Housing, and Urban Affairs,
Washington, DC.
The Committee met at 10:02 a.m., in room SD-538, Dirksen
Senate Office Building, Hon. Richard Shelby, Chairman of the
Committee, presiding.
OPENING STATEMENT OF CHAIRMAN RICHARD C. SHELBY
Chairman Shelby. The hearing will come to order.
This is the first of our hearings on the reauthorization of
MAP-21, which expires on May 31. I believe that a long-term
reauthorization bill is necessary to provide certainty and
stability to cities and States across the country. More
importantly, it is essential to Americans who rely on
transportation for their livelihoods.
However, the solvency of the Highway Trust Fund is the most
significant hurdle we face in advancing a reauthorization bill.
Today, the revenue coming into the Highway Trust Fund is $15
billion less than what is needed to sustain transportation
spending at current authorization levels. This persistent
revenue shortfall highlights the fact that our transportation
needs have outstripped the capacity of the trust fund. Any
reauthorization proposal Congress considers, I believe, must
balance spending needs with long-term sustainability,
flexibility, and innovation.
Federal policies should encourage private sector investment
in transportation and transit infrastructure in order to better
leverage Federal investments and increase economic growth. I
have long advocated this approach, and I am pleased that the
administration has launched the Build America Investment
Initiative, which seeks to expand the reach of existing
financing tools and to promote the use of public-private
partnerships.
We cannot stop there, however. By eliminating burdensome
regulations, we will invite more innovation into the
marketplace. By reforming the FTA's internal administrative
practices, project sponsors can achieve greater efficiencies.
Projects that have a minimal Federal investment and significant
private investment should not be, in my opinion, subjected to
the same level of bureaucratic oversight as those with a
significant Federal investment. Experience tells us that large
bureaucracies tend to delay projects and ultimately discourage
infrastructure investment.
In addition, Federal policies should encourage a
responsible and measured approach to transportation system
management. This includes the funding of operations, preventive
maintenance, and most importantly, fleet acquisition. ``State
of good repair'' must become an integral part of the public
transportation dialogue, and transit systems must take a ``fix
it first'' approach. We do not need to look any further than
Washington Metro for an example of what happens when an agency
does not maintain its system in a state of good repair.
Moreover, public transportation policy should support this
effort and prioritize Federal spending to maintain our aging
public transportation infrastructure. Federal policy should not
encourage more spending to expand systems that cannot maintain
what they already have.
The issues we are facing are difficult, but I believe we
can find some middle ground here. It is possible to produce a
long-term, fiscally responsible reauthorization bill that can
garner broad bipartisan support both in the Banking Committee
and on the Senate floor. I look forward to working with the
administration and my colleagues on a reauthorization measure
that provides the stability and the certainty that our
transportation system needs.
Senator Brown.
STATEMENT OF SENATOR SHERROD BROWN
Senator Brown. Thank you, Mr. Chairman.
Ms. McMillan, thank you for joining us today.
I am committed to passing a long-term reauthorization bill
that grows the overall transportation program. It is good for
the economy. It is good for workers. It is good for our
Nation's economic competitiveness.
A special shout out to Senator Menendez for his studied
strong advocacy on this issue. In a letter to me soon after I
became Ranking Member of this Committee, he very cogently laid
out the importance of a transportation policy serving his
State, serving particularly the East Coast, but much more of
this country than that, and I appreciate his leadership in
that.
Previous generations of Americans built the best
infrastructure in the world and we have watched it crumble for
decades. New investment in infrastructure puts Americans back
to work fixing railways and roadways. Our work in the Banking
Committee to rebuild and expand public transportation will lead
to new economic opportunities.
People are riding, again riding buses, trains, and subways,
more last year than they have in many years. Sixty percent of
the trips taken on public transportation are to and from work.
Transit provides crucial access to jobs, particularly for low-
income workers.
In my State's three largest cities, the three Cs,
Cleveland, Columbus, and Cincinnati, our transit agencies carry
more than a quarter-million passengers every day. Those trips
do not just benefit riders, it is important to note. Every
transit trip takes cars off the road, good for the environment,
reduces highway congestion.
Federal transportation investment has been flat since 2009,
but the level of backlog maintenance and repair grows each
year. I appreciate Ms. McMillan speaking out on that issue, how
important that is.
Cleveland RTA's fleet of 108 rail cars has an average age
of more than 30 years and will need to be replaced soon. Its
tunnels and stations also need major repairs. I have worked
with Cleveland RTA General Manager Joe Calabrese for a long
time. Most people carry pictures of their grandchildren in
their wallet, but it seems that whenever I see Joe, he is
showing pictures he carries around of crumbling concrete in his
stations. That is all he wants to show me.
In the Banking Committee, there is a strong history of
bipartisanship when it comes to drafting the transit title. I
am looking forward to working with Chairman Shelby to reach a
bipartisan agreement in the weeks and months ahead.
We have a chance today to talk about the President's vision
for surface transportation as we begin work on a bill. He has
proposed a 6-year, $478 billion transportation package that
significantly expands investment in public transportation. The
President has proposed a new international corporate tax system
that would shut down tax havens and increase domestic
investment. This system includes a one-time transition tax on
the roughly $2 trillion--two-thousand-billion dollars--in
offshore profits, which could make up the shortfall we need for
a 6-year bill at administration levels.
I think we could look at a range of options, including the
current user fee, but no matter what mechanism we choose and we
pursue, we need to avoid an endless cycle of extensions. Nobody
can plan when we run Government from Government shutdown to
Government shutdown the way we have. We need to do much, much
better than flat investment levels.
I would argue that stand-alone international tax reform,
which I am working on with Senators Schumer and Portman and
Mark Warner, who sits on this Committee, affords us the best
opportunity we have had in years to escape the cycle of short-
term flat funding. As the Finance Committee works on revenue
for this bill, Banking will be working our part of it.
One area I think we should look at is the opportunity to
increase jobs in the transit manufacturing sector in this bill
through Buy America provisions. I know Senator Shelby and I
both share significant transit manufacturing in our States and
I am hopeful we can come to an agreement. I have been a
longtime supporter of Buy America and have introduced the
Invest in America Jobs Act in previous Congresses. Taxpayer
dollars, whenever possible, should be spent supporting American
workers and American businesses. All of us hear that in our
States over and over again.
I understand there are concerns, but I do not accept the
argument, as I know Ms. McMillan does not, that nothing can be
done. We need to encourage the use of American suppliers up and
down the supply chain. We need to close loopholes. We need to
use more American-made products, such as steel.
Our Committee also needs to look at how we can build on the
many successful policy changes in MAP-21. It helps speed
construction under New Starts and Small Starts. MAP-21 provided
long-needed authority to FTA to oversee transit safety.
And, I thank again Administrator McMillan. She has been
overseeing FTA's efforts to implement MAP-21. She can offer
valuable guidance to our Committee.
I hope that our Committee can consider, Mr. Chairman, can
consider Ms. McMillan's nomination quickly. The President
nominated her in July. We reported her nomination unanimously
last November, but the full Senate could not act on her
nomination at the end of the year. The President re-nominated
her in January. I hope she does not have to wait much longer to
be confirmed.
Thank you, Mr. Chairman.
Chairman Shelby. Thank you, Senator Brown.
Our witness today is Ms. Therese McMillan, the Acting
Administrator of the Federal Transit Administration. Welcome to
the Committee. Your written testimony will be made part of the
hearing record. You proceed as you wish.
STATEMENT OF THERESE W. MCMILLAN, ACTING ADMINISTRATOR, FEDERAL
TRANSIT ADMINISTRATION, DEPARTMENT OF TRANSPORTATION
Ms. McMillan. Chairman Shelby, Senator Brown, and Members
of the Committee, good morning and thank you for the
opportunity to discuss the progress being made by the Federal
Transit Administration in implementing MAP-21 and the
administration's reauthorization proposal, the GROW AMERICA
Act. I appreciate this Committee's continuing support of FTA as
we deliver vital Federal funding to the Nation's public
transport systems.
Mr. Chairman, transit ridership reached a record high of
10.8 billion trips in 2014 and the demand for transit service
is on the rise. In many communities, transit is the lifeline to
jobs, medical services, education, and community.
When increasing transit demand, however, is coupled with
static investment, we see a growing need to bring existing
systems into a state of good repair and to expand system
capacity.
The passage of MAP-21 has moved us in the right direction
to address these issues. Importantly, MAP-21 supported FTA's
top three priorities: Improving transit safety, addressing the
transit maintenance backlog, and building system capacity.
With the help and encouragement of this Committee, FTA is
making significant progress toward implementing our new safety
authorities. We are establishing the regulatory framework
needed to ensure safety standards are in place in each transit
system across the country to protect the riding public and
transit agency employees. We have issued a Notice of Proposed
Rulemaking to strengthen State safety oversight agencies. We
have also issued final interim guidance on safety training, and
there will be more FTA safety-related NPRMs and related
guidance issued later this year.
MAP-21 began to address the maintenance backlog with the
creation of the State of Good Repair Grant Formula Program, but
much more needs to be done if we are to make significant
headway against years of under-investment. The U.S. DOT's 2013
Conditions and Performance Report to Congress found an $86
billion maintenance backlog of transit assets and that backlog
continues to grow at an estimated rate of $2.5 billion a year.
In my 30 years working in public service, I have come to
understand how critical it is to maintain and sustain the
current system. Every day, millions of passengers across the
country depend on the existing transit services to get onto the
roads and rails and arrive at their stops or stations. This
infrastructure must be maintained and renewed to improve safety
and reliability.
That said, demand for new transit service continues to
rise. FTA has 44 new projects in our New Starts or Small Starts
pipeline since MAP-21 took effect, and 12 more projects are
waiting in the wings to enter the program. This is, in part,
because we have streamlined the process to help local project
sponsors reduce the time required to move major projects
through the pipeline.
In March of 2015, the administration submitted to Congress
an updated version of its GROW AMERICA reauthorization
proposal. Consistent with the President's fiscal year 2016
budget request, GROW AMERICA provides funding certainty by
requesting a 6-year, $478 billion multimodal proposal,
including $115 billion to support our Nation's public
transportation systems.
The proposal increases average transit spending by nearly
76 percent above the fiscal year 2015 enacted levels, and this
will enable us to address what transit agencies and local
communities are asking for: Immediate repair needs, increased
reliability, and better connections. GROW AMERICA also supports
economic competitiveness through workforce development
initiatives and increased Buy America requirements that would
ensure transit assets are made in the United States.
By 2045, the population of the U.S. is expected to grow by
an estimated 70 million people, and transit will be an
important part of the transportation system that moves them.
MAP-21 included provisions enabling FTA to focus limited
resources on certain strategic investments and policies. The
administration's GROW AMERICA Act will build on that
foundation, improving transit service for millions of Americans
by repairing and modernizing transit systems and expanding
capacity for the generations to come.
I am committed to working together with this Committee
toward our mutual goal of addressing America's urgent need for
investment in transit infrastructure. Thank you again for
inviting me to testify, and I am happy to answer your
questions.
Chairman Shelby. Thank you.
The law requires project applicants seeking a capital
investment grant to have the resources necessary to
recapitalize, maintain, and operate their existing system as
well as the proposed system. This requirement is in place to
ensure that we are not building beyond the true financial
capabilities of a system. Regardless of the demand, the one
thing we do not need is more infrastructure that cannot be
adequately maintained.
Ms. McMillan, in reviewing the projects in the pipeline,
including those currently receiving Federal funding, it is hard
to believe that they are all being maintained in a state of
good repair. It is even harder to believe that they will be
able to maintain additional miles in the future. We all see
that. What specific assurances can you give the Committee that
the Federal Transit Administration is, in fact, holding
applicants to that basic requirement?
Ms. McMillan. Thank you, Mr. Chairman, for that question,
and it reinforces the need for state of good repair in all
aspects of our systems.
First of all, let me point out that under MAP-21, a
significant new requirement was put in place for Transit Asset
Management Plans and programs and we have been aggressively
moving forward to implement that and we are expecting a Notice
of Proposed Rulemaking to be issued certainly by the end of the
year, and hopefully sooner than that. That is really critical
in terms of being able to identify what the inventory is of all
of the transit assets and to ensure that the transit agencies
are assessing the risks attached to making sure they are in
good repair, including safety implications. So, we will be
working closely with the industry on implementing the transit
asset management----
Chairman Shelby. Along these lines, does the administration
believe that the Government should continue to make investments
in new or expanded fixed guideway systems without a state of
good repair requirement? In other words, should project
sponsors have to certify that their system is in a state of
good repair before they are given Federal funding to build
more? And, what, in your view, can and should be done to ensure
that systems are making the investments necessary to properly
maintain their infrastructure assets? It is kind of like you
wanting to build onto your house a room or so and your house is
just going to the devil, you know. What the heck?
Ms. McMillan. Well, as I mentioned before in my opening
remarks, we do have an $86 billion backlog in transit asset
management. That is one of the main reasons we are asking for
significant Federal dollars to invest in state of good repair
as a priority. We believe that there are dual needs in the
system. Clearly, we want to make sure that transit assets are
safe, in the existing system, because that is the foundation,
and that any new services would only be brought to bear if
there is sufficient continuing progress made toward state of
good repair. But, we are also seeing, as I mentioned,
increasing demand to serve the growing needs for transit. So,
we are trying very hard to balance both of those objectives in
terms of both MAP-21 and GROW AMERICA provisions.
Chairman Shelby. There are a lot of regional differences,
we have been told. Over the years, the Committee has heard from
the Federal Transit Administration grantees that FTA's regional
offices do not uniformly apply the rules and regulations. These
differences range from issues of funding eligibility, to ADA
compliance, to Buy America waivers, among others.
Could you address just for a minute the perception that
different agencies are held to different standards depending on
their region of the country and tell the Committee what
processes the Federal Transit Administration has in place to
ensure that the regions uniformly apply the law. And, what kind
of guidance and oversight of the regional offices do you have
in place?
Ms. McMillan. Well, in the time left allowed, let me say
that this is a priority for my administration. I have led
significant reviews of our oversight processes. We work very
closely with our transit agencies as well as our regions if
issues are brought to our attention. Very often,
inconsistencies are fact specific and we want to understand
those facts in order to address clearly what the concern may
be. I am committed and have worked very closely with my staff
to ensure that when we do oversight, it is important that it be
done in a consistent and clear fashion.
Chairman Shelby. Senator Brown.
Senator Brown. Thank you, Mr. Chairman.
We do not in this body think all that much, unfortunately,
or often enough, about low-income workers and low-income
commuters, for that matter, and I find this a bit curious in
that we are sort of chasing our tails. We are saying we should
not invest in new infrastructure until we fund existing
infrastructure, but we are not funding existing infrastructure.
For example, the cars in Cleveland, is that new infrastructure
to build new cars that are too aging and fixing those tunnels?
Well, not really. It is really maintaining what we have. And,
we are sort of chasing our tail with a kind of a circular
argument, to mix metaphors here.
I bring up low-income workers because I know that, from
conversations lots of places in my State, how hard it is to be
poor, how hard it is to make $9 and $10 an hour, to get to
work, to buy groceries. I remember a woman in Youngstown I was
talking to who lived in what we call food deserts, and she had
to get on a bus and go downtown, because that was where the
line went, change buses and get on another bus and go out to
Austintown, a suburb, which had real grocery stores with real
fresh produce. It would take her about an hour, depending on
the timing, it could take an hour and 15 minutes to get there.
She could only carry--she was an older woman, I mean, sort of
my age older, not 20 older, or not 70 or 80, but she was old
enough that she could not carry that much with her and she had
those struggles.
But, let me talk about access to jobs and commuting. How
does this aging transit system affect access to jobs and
commuting for low-income workers?
Ms. McMillan. Well, one of the critical needs, Senator, we
need to be attentive to, is that the reliability of the transit
system is critical in terms of job access. And, so, the state
of repair of current systems can impact certainly the
reliability of getting the service out on the road and that
could have significant ramifications for the person who is late
to their job or cannot access it at all.
But, in addition to your point about low-income workers, it
is also important to note provisions both in MAP-21 as well as
GROW AMERICA in trying to provide job opportunities through
them, perhaps even within the transit industry. We have a
workforce program that we have tried to target to low-income
populations, to veterans, to women, to others who may need and
could get a job through workforce programs supported by the
FTA. As well, we have local hire programs that have been
included recently in terms of efforts by the administration to
expand the flexibility to consider local hiring, particularly
in economically distressed communities, as well as provisions
to allow that flexibility within GROW AMERICA.
So, I could comment more if that is getting at your
concerns.
Senator Brown. That is helpful. So, a modernized,
efficient, up-to-date transit system gets people to their jobs,
but a modern, efficient, up-to-date transit system also can
create jobs.
Ms. McMillan. Correct.
Senator Brown. Talk to me--talk to us, if you would, about
Buy America, if you would, why it makes sense to significantly
increase the amount of American-made parts and materials
required to go into transit vehicles in the next transportation
bill. Are there interim steps we should take there to get
compliance in full, meaning right up to approaching 100 percent
made in America, not just for the assembly of the buses and the
rail cars, but the steel and the components and all other
things that can be made in America, leading up to that in the
supply chain.
Ms. McMillan. Yes. Thank you, Senator, for that
introduction to a very important commitment by the
Administration to create and preserve American manufacturing
jobs in the transit industry. As you know, the GROW AMERICA Act
does include a proposal to increase in a step-wise fashion the
domestic content of both components and subcomponents for
rolling stock from the current 60 percent on a 10-percent per
year increase up to 100 percent.
It is our belief that this policy will create a significant
market share for domestic manufacturing and entice overseas
manufacturers to establish plants here in the United States. We
have certainly seen the market be responsive to the fact that
we significantly reduced waivers, Buy America waivers that we
have granted----
Senator Brown. So, explore that in the last couple seconds.
Have you seen a domestic supplier stepping up where there might
not have--I mean, you get these waivers because you cannot find
a supplier that makes this component in a rail car, so you get
a waiver. Are you seeing some new suppliers coming in,
anticipating that there are going to be Buy America provisions
and they are meeting that market demand?
Ms. McMillan. Yes. In fact, there is a manufacturer in your
State of Ohio who established a new plant in North Carolina to
develop what is known as low-vibration ties, an important
component of mitigating noise for a rail track. And, that had
been something that had been sourced overseas previously, but
when we had issued a non-availability waiver and asked for
comment, this company was able subsequently to step in and fill
that niche. So, we are seeing responsiveness in that----
Senator Brown. So, that current 60 percent requirement for
domestic content is going up, step by step, under MAP-21, is
that right?
Ms. McMillan. The proposal would be that it would increase
to 70, 80, 90, and 100 on a step-wise year-by-year basis.
Senator Brown. Mr. Chairman, bear with me for 30 more
seconds.
And you are confident, Administrator McMillan, that we will
be able to get to 70, 80, 90, because companies will anticipate
that there is a place to sell to communities and transit
systems and all, to sell these components and do it profitably
and you will see these businesses begin to meet that demand?
Ms. McMillan. I believe we are creating the environment for
new domestic manufacturers to step in and serve the needs of
building transit infrastructure, rolling stock infrastructure,
as well as rehabilitate it, yes.
Senator Brown. Good. Thanks, Mr. Chairman.
Chairman Shelby. Senator Scott.
Senator Scott. Thank you, Mr. Chairman.
Ms. McMillan, I certainly thank you, and good morning.
Thank you for being here with us today. I certainly enjoyed our
conversation last week as it relates to--I think we spoke in
depth about the local hire program, and I will have a question
about that.
But, just following up on Senator Brown's questions, this
relates to Buy America and the President's proposal to move
over the next 5 years incrementally to 100 percent. It appears
that when I talk to industry and when I look at what we are
asking industry to do, we may be creating an environment that
is conducive for industry to move in that direction. I probably
would say we are compelling them to move in that direction.
And, the fact of the matter is, when you talk to industry,
especially Proterra, who uses a battery that is designed and
made in China, getting there in 5 years just seems completely
unrealistic. Your thoughts?
Ms. McMillan. We are attempting with the Buy America
provision to significantly lift the bar and, as I said, to
create the environment, to incentivize domestic manufacturers
to step in. I believe that with the step-wise approach, that
this provides an opportunity for the market to react. We are
certainly willing to hear from the market and manufacturers,
their sense of this. Our goal is to, though, make sure that we
are pushing the market in a forward direction for domestic
manufacturing, and importantly, domestic jobs.
Senator Scott. Thank you.
On the question that we discussed on the telephone, as it
relates to the local hire programs, to me, part of the local
hire program seems to be a perverse incentive to move jobs from
one locality to another locality. It certainly has some, as
Senator Brown talked about, the necessity of trying to find a
way to use the Federal Government's programs to improve and
incent folks to do local hiring. Perhaps there is a silver
lining in there from an employee standpoint, but when you are
talking about moving rolling stock from one State to the other
State so that they would be compliant and allowed to bid on
contracts, that seems to be a leap in the wrong direction, from
my perspective.
When I look at Proterra located in South Carolina, in
Greenville, South Carolina, bidding on a contract in
California, it appears to me that the Department of
Transportation in their recently announced pilot program would
permit recipients of Federal transit money to use local hire
rules in the procurement process not only for the construction
services, but for the rolling stock that we talked about on the
telephone. The end result would be to use South Carolina tax
dollars, who contribute to the Nation, to subsidize creating
jobs and, frankly, moving companies from one coast to the other
in order to abide by the local hire program.
That just seems like a perverse incentive that is
counterproductive, or merely charging one State and moving jobs
to another State if, in fact, we saw the rolling stock move to
another State in an attempt to abide by the local hire
preference programs that could be put in place.
Ms. McMillan. Thank you, Senator, and maybe if I could take
a minute to explain the nature of the local hire options that
we----
Senator Scott. Please.
Ms. McMillan. ----that we are working with. I think it
would be helpful.
First of all, let me stress that the pilot program that we
put forward is voluntary and the objective, actually, of
putting it out there is to get at the concerns that you raised.
We know that there are local communities, particularly in
distressed economic areas, that would like the opportunity to
create jobs for either the construction projects that are
happening in their community or in the case of potential
procurement opportunity. Very often, they have local or State
laws that are already encouraging in that regard.
But, we also know that there are statutory provisions
requiring fair and open competition, and so the objective of
having the pilot program was for those areas that wanted to
expand their flexibility in geographic preference to be able to
evaluate the data and actually see what impact that would have
on the competitive environment, so that we would have more
information about how to strike that sweet spot between those
two objectives: local hire, economic opportunity, and the
competitive environment that we also need.
Senator Scott. Thank you.
My last thought would be that it seems like there may be an
incentive to, in an attempt to help low-income wage earners in
a specific locale, we create a program that takes good jobs in
another low-income area of the country and we just transfer
those jobs to another location. I am sure that is not the
intention of the program. But, I think part of the unintended
consequences could easily lead to us merely transferring and
shifting jobs from one place to another place and both places
have a very similar economic environment.
Thank you.
Chairman Shelby. Senator Menendez.
Senator Menendez. Thank you, Mr. Chairman, for convening
this hearing on the Nation's transit programs. We all know they
expire in just over a month, so it is incredibly important.
And, 3 years ago, the Committee worked in a bipartisan way
to draft the transit title of MAP-21 and I think we made the
best of a funding constrained environment, streamlining and
reforming programs, eliminating stovepipes, focusing on core
formula programs. But, I feel compelled to say program reforms
are not going to fix our transit systems alone if we are not
willing to make the necessary investments, as we have heard
from everybody in the transit industry. Small transit systems
are telling us they cannot replace their aging bus fleets.
Large transit systems are working to tackle complex mega-
projects.
So, it is an incredibly challenging set of circumstances,
but incredibly important to the Nation's economy, to the
Nation's national security. I say that because in the post-
September 11 world, when everything closed down in New York
City, it was different modes of transportation, like ferries,
that brought people out of downtown Manhattan to New Jersey,
where they were triaged, to hospitals. And, when there was no
other intercity travel, the reality is that Amtrak became an
incredibly important tool. So, even in a post-September 11
world, in addition to the economies, moving people, the
environment, quality of life, it has a national security
imperative.
Now, Ms. McMillan, I appreciate your work. One of my top
priorities is advancing the Gateway project, which includes
replacement of the Hudson River tunnels and the Portal Bridge,
both of which are over 100 years old and in serious danger of
failing in the near future. Projects like this are critical for
our mobility, our economic strength, particularly in our
region, our security, and our safety. It is a linchpin, this
particular project, of the entire Northeast Corridor region,
which supports 20 percent of the United States' GDP. That is
$3.5 trillion of our domestic economy.
Now, in other parts of the world, we see visionary transit
projects taking place, but here, projects like Gateway, that
mean so much to our national economy, they are trying to cobble
together funding and financing across dozens of funding and
financing sources. So, does Congress need to fund a new
Projects of National and Regional Significance Program, and
does the administration have any proposals to help the United
States undertake significant complex projects like Gateway?
Ms. McMillan. Thank you, Senator. I would observe, first,
that the significant increases in the funding levels for
transit generally in GROW AMERICA is very reflective of the
issues that you raised, that there is continuing need to
support our existing systems and critical strategic
investments, such as the Gateway project, that need to be made.
One thing that GROW AMERICA does is include significant
increases in funding programs for rail, passenger rail, new
programs in that regard that could certainly meet the
eligibility needs of that project. We are also supporting
increases in TIGER, in our TIFIA and RRIF Programs and the
like. So, it is a rising tide lifts all boats scenario, I
think.
Senator Menendez. And, the difference with that--and I
respect that and appreciate it--but, the difference with that
is, again, you are creating a patchwork of funding sources for
what is really a major project. In the past, we have had these
Projects of National Significance or Regional Significance
because we understand their significance to the country as a
whole, even though it may be located in some part of the
country. And, so, I hope we can look at that because otherwise,
funding projects like that are very difficult.
Let me go to your testimony, which notes concerns raised by
some bus systems about the cuts to the Bus and Bus Facilities
Program under MAP-21. I would like to clarify several points.
First, a 2009 FTI report found $50 billion in state of good
repair needs in just seven of the larger oldest transit systems
across the country. A subsequent report found that the state of
good repair backlog for all transit systems nationwide was $78
billion. So, is it safe to say that larger, older transit
systems account for a significant amount of the state of good
repair backlog?
Ms. McMillan. Yes, Senator, and that is exactly why we have
asked for a state of good repair increase in two major pots of
funding under MAP-21, the Bus and Bus Facilities Program, as
you noted, significantly, but also increases in the State of
Good Repair Formula Program, which serves our fixed guideways,
including our rail systems.
Senator Menendez. And if I may, Mr. Chairman, is it correct
that according to the 2013 Conditions and Performance Report
that non-vehicle rail assets are the biggest challenge to
achieving a state of good repair?
Ms. McMillan. Yes. Critical facilities in our capital-
intensive rail systems do make up a good portion of that.
Senator Menendez. I have a lot of other questions, but I
will submit them for the record and look forward to your
answers. Thank you, Mr. Chairman.
Chairman Shelby. Senator Rounds.
Senator Rounds. Thank you, Mr. Chairman.
My questions really have to do not so much with mass
transit, but with transit in rural areas. We often discuss
transit funding in terms of large metropolitan areas with large
transportation systems, such as a subway system, but rural
areas, rural communities in a State like South Dakota depend on
systems such as a bus or a van service to help seniors get to a
doctor or to a pharmacy and to help workers, in many cases, get
to a job in small towns and on our Reservations.
And in the case of South Dakota, we have nine Reservations,
none of them in an urban area, all of them in rural areas. And,
in these areas, in a lot of cases, particularly on Reservations
where we have two counties that are some of the poorest
counties in the entire United States, cars are still a luxury.
Most--a lot of people do not have access to them. These
services, in many cases, replace that vehicle. The services are
vital to helping citizens in those areas get to where they need
to be.
Can you outline for us some of the benefits that you would
see to rural transit services with the expiration coming up of
MAP-21 and what opportunities that might be available for us to
modernize and to expand rural transit services while making
certain that these important transportation services actually
receive the necessary funding. It is kind of a softball
question in a way, but I think it is something that we have to
remember, is mass transit is one thing and the vast majority of
the dollars we are talking about go in that direction and we
understand that. But, let us not forget about the need for the
transit system in our rural areas, as well.
Can you share with us a little bit about your knowledge of
that and where you see the opportunities to make sure that we
do not forget about those folks in those rural areas.
Ms. McMillan. Thank you so much for that question, because
it is a critical part of the tools that we bring to bear to
ensure that those tools can be used by our rural systems as
well as our urban systems.
Just to give you a sense of scale, our current formula
program, where we continue to offer significant assistance to
the States that administer that program as well as the
recipients who use it, there are 1,300 sub-recipients under
what we call our 5311 Formula Rural Program. There are many,
many very small systems that critically need the services that
get folks, as you say, to regional health centers or employment
centers or education and we need to be very mindful of those
needs.
For the Tribal Program, in particular, under MAP-21, we
actually doubled the program, from $15 million per year to $30
million a year, and made that program into a combined formula
program for some increased predictability as well as a
discretionary program to deal with some specific needs. We are
now serving 114 Tribes under the programs as of fiscal year
2015, so working very closely with them.
But, I would also like to point out that when we are
dealing with national policies, such as our State of Good
Repair Program, our Transit Asset Management Program that we
have mentioned, as well as our new safety authority, it is very
important to recognize one size does not fit all when we
implement those policies and programs, and we are keenly aware
that we need to work with our smaller urban and rural systems
to ensure that we make a commonsense framework for dealing with
these new programs and make sure they fit the needs of those
smaller systems and are not overly burdensome.
Senator Rounds. Could you share a little bit about your
discretionary capabilities with regards to the funding on the
Tribal areas, please.
Ms. McMillan. So, of the $30 million we have, $5 million is
for a discretionary program and $25 million is for the formula.
We serve every--a number of needs, anywhere from startup
operation systems for new Tribal services that are put in place
as well as, similar to rural areas, vehicle replacement
opportunities, the facilities and services that accompany
keeping those vehicles in good repair and getting the services
out on the street. So, it is a fairly flexible program in terms
of where we can put the need. Importantly, my regions work very
closely to understand what those needs are and make sure that
the technical assistance is provided to Tribal Nations to make
sure that they can participate effectively in the program.
Senator Rounds. Thank you.
Thank you, Mr. Chairman.
Chairman Shelby. Senator Warren.
Senator Warner. Thank you, Mr. Chairman, and thank you,
Administrator McMillan, for being here with us today.
This winter, Massachusetts was hit by a record-breaking
snowfall. We had more than 110 inches in the Boston area alone,
and unfortunately, the Massachusetts Bay Transportation
Authority System failed under that unprecedented duress. The T
was forced to shut down many of its operations and it took
about a month to restore normal service. That forced tens of
thousands of commuters to seek other ways to get to work, which
resulted in snarled traffic, long lines, and a mess throughout
the region, a very costly mess.
The T faces a huge maintenance backlog. A recent report by
Governor Baker's special panel to review the MBTA indicated
that the T did not do enough to bring crucial components of the
transit system to a state of good repair. And, we know there
are similar problems all around the country.
Now, given the size of our Nation's backlog on transit
maintenance, which stands, as you said, at over $86 billion,
growing at about $2.5 billion annually, it is unrealistic to
think that we are going to solve this problem overnight, but we
need a plan to increase our transit systems' resiliency and we
need it now.
Administrator McMillan, a recent GAO study noted that some
aspects of Federal grants that have made it more difficult for
transit networks to become more resistant to catastrophic
events. Do you believe transit system resiliency should be a
priority in the next reauthorization, and if so, how can grant
programs be improved to achieve this goal?
Ms. McMillan. Thank you for that question, and indeed, we
all were incredibly mindful and, I think, humbled by Mother
Nature's attack on the Northeast and its impact on transit
systems. Let me point to a couple of things, Senator, that I
think get to your concerns and questions.
The first, again, goes back to the effective implementation
of the Transit Asset Management Program. This was, again,
created in MAP-21 and the intent is to ensure that every
transit agency, from our very small rural areas, and up to our
complex urban systems, have a handle on what is their inventory
of assets; what is the condition of those assets; what are the
risks and other factors that need to be taken into account in
terms of how those conditions came about and how they could be
mitigated; and use that information to make very strategic
decisions about the resources, not only Federal, but local and
State and others, of how to prioritize those resources to deal
with those needs.
Once those needs are identified, though, through those
programs, as you have well mentioned, we then need to have the
resources brought to bear in order to address a solution, and
that is exactly why under GROW AMERICA we have identified,
again, those two major programs, increasing the State of Good
Repair Program for mainly our fixed guideway rail assets, but
importantly on the bus side, as well, because, of course, they
were caught up in those additionally----
Senator Warren. Oh, yes.
Ms. McMillan. That is where, with our Bus and Bus
Facilities Program, we are looking for a fourfold increase to
almost $2 billion a year from the lower base that they were
having to grapple with under MAP-21.
Senator Warren. And, let me just ask you, and if I can,
briefly, because we are low on time here, do you believe the
FTA should encourage transit systems to conduct stress tests to
expose the weaknesses in their systems?
Ms. McMillan. I think that is exactly the type of
diagnostic that would be incorporated into a Transit Asset
Management Program. Again, one of the things we are very
careful to acknowledge----
Senator Warren. I take that as yes, then.
Ms. McMillan. If it makes sense for the operating
conditions of the transit agency, they should have the
flexibility to incorporate that into their program.
Senator Warren. OK, good. I just want to say, thank you
very much. Extreme weather events are hitting more and more
often. We experienced it firsthand in the Northeast this
winter. We saw also firsthand the vulnerability of our decaying
transportation infrastructure. We know that there are a number
of challenges in trying to deal with our maintenance backlog,
but it is time to get moving, to prioritize Federal funding to
get our transit systems to a state of good repair.
Thank you very much, Administrator McMillan.
Chairman Shelby. Senator Warner.
Senator Warner. Thank you, Mr. Chairman, and thank you,
Administrator McMillan.
I want to pick up on my colleague, Senator Warren's,
comments. In Boston, it was the case of an extraordinary
weather event. In Washington, we did not have that excuse. The
Chairman even mentioned the event that took place on January 12
here in the Washington system. Unfortunately, not the first
time the Washington Metro has been plagued by events,
accidents, what appears to be a lack of a culture of safety. We
saw in this event failures of evacuation systems, failures of
ventilation systems, failures of radio systems.
One of the things I want to thank you for was the fact that
the FTA decided that they would come in and do, in effect, an
after-action independent report that would provide the kind of
transparency that is lacking. My understanding, that report was
scheduled to be done by the end of May. I just want to know, is
it still on schedule to be released at that point and are there
any early, preliminary findings?
Ms. McMillan. Thank you, Senator, for the question. Yes, we
are conducting a safety management inspection of WMATA, which
is a complement, of course, to the partnering we did with the
NTSB looking specifically at the L'Enfant incident. And, our
field work is ongoing right now with WMATA. I do not have
findings at this point to share. Certainly, when they are
available, we would work with your office on not only the
findings that come out, but recommendations that we may be
making. The work and analytics, though, are ongoing still at
this point.
Senator Warner. But, it is still hopeful that this report
will be done by the end of May, as it was announced?
Ms. McMillan. We are--I will get back to you with the
timing on that and----
Senator Warner. We would be very focused on the end of May.
Ms. McMillan. Absolutely.
Senator Warner. Let me just move to specifics here. I have
had some background in the mobile radio business, and what was
remarkable in the case of the L'Enfant Plaza incident was we
have now found that the radios were failing on an average of 12
percent, that there was--you know, we have got here in greater
Washington a series of different governments, all with
different radio systems. We contacted our Council of
Governments that came back with a report on interoperability.
It seems to me, and again, I think Senator Warren's comments
about a stress test makes a lot of sense--are there not
standards in place, standard protocols for testing of radio
systems, because most every metro system has a variety of
jurisdictions, all with their first responder systems different
in nature.
Ms. McMillan. One of the key things that we are doing at
the Federal Transit Administration is implementing the new
safety oversight that was provided to us under MAP-21, and a
significant pivot point in our approach to that is what we call
a safety management system that would be the focus of, not only
for each transit agency, an opportunity for them to identify
what are the unique risks that are attached to the operating
environment as well as the capital infrastructure where hazard
mitigations need to be identified. So, in that particular case,
that would be something we would hope would be highlighted
within an SMS----
Senator Warner. Just yes or no. Will there be Federal
minimum standards for emergency radio interoperability
standards?
Ms. McMillan. We will be----
Senator Warner. So there is not----
Ms. McMillan. There is not at this point----
Senator Warner. What about evacuation standards?
Ms. McMillan. We need to assess what makes the most sense
under our safety authorities. We could certainly work with your
staff and get back to you with our thinking on that----
Senator Warner. What about----
Ms. McMillan. ----as we are going forward.
Senator Warner. ----minimum ways to check ventilation
systems?
Ms. McMillan. Our hope is that there certainly will be
attention paid to all of those things as part of the safety
protocols that we will put in place under our authority. One of
the--what would be dictated in terms of national standards
versus ones that agencies themselves would put into place is
something we are working on right now as we are implementing
our safety authorities----
Senator Warner. What I hear is there are not any of these
standards. I guess, Mr. Chairman----
Ms. McMillan. Not at this point.
Senator Warner. Mr. Chairman, what I would hope is that,
you know, we have got a lot of folks in this region, a lot of
our staff who ride the Metro every day. There was an inability
for us to convey to riders in the aftermath of the incident on
January 12 whether it was safe to get back on Metro, and there
seemed to be part of that because there was not these standards
that are established, and these can--I am not sure we are
looking at one additional level of regulatory bureaucracy, but
there ought to be some level of common standards. And, I think
Senator Warren's comments of the notion of a stress test-type
approach, and there are going to be radio systems, evacuation
systems, ventilation systems in every transit system, would be
something worthwhile.
And, again, I am looking forward to your report on the
incident, hopefully reported by the end of May. But, I do think
this is a subject that, as we go through reauthorization, we
ought to look more carefully at.
Chairman Shelby. Senator, I think you are right. I think
Senator Warren raised that earlier. You need some uniformity
when it comes to safety. We know that.
Senator Warner. Thank you, Mr. Chairman.
Chairman Shelby. Senator Merkley.
Senator Merkley. Thank you, Mr. Chairman, and thank you,
Administrator McMillan.
One of the questions that I would like to get your insight
on is the Buy America provision of public transit. Our Ranking
Member has had a bill in the past that increased the proportion
of inputs to rolling stock in terms of a Buy America ratio. Do
you have any insights or thoughts in that regard?
Ms. McMillan. The GROW AMERICA Act put forward by the
administration does include a step-wise change to Buy America
provisions to increase the domestic content for components and
subcomponents over a step-wise period of 10 percent per year.
That is included in the bill.
Senator Merkley. And what does it rise to?
Ms. McMillan. It would go to a hundred percent.
Senator Merkley. OK. And you consider that a valuable use
of public funds, to help reinvest in our own economy?
Ms. McMillan. Yes. We believe by increasing the domestic
content requirement, it provides the environment for domestic
manufacturers to step in and meet that market need and create
the jobs attached to that.
Senator Merkley. Thank you. I appreciate that.
You said in your testimony that about, quote, ``half of all
transit riders do not have access to a private vehicle,''
making public transportation many people's primary way of
getting to work, school, or health services. As we think about
putting together another surface transportation bill, what
suggestions might you have to ensure that we are spending our
transportation dollars to better connect communities and people
who have a high reliance on public transportation and the
community services and jobs they depend on?
Ms. McMillan. A critical part of public transportation is
ensuring that each community has the opportunity with Federal
funds to tailor the types of services they need, whether in a
large urban system it is ensuring the existing system is in a
state of good repair and reliable; or providing valuable
resources that exist in suburban areas that are growing, where
they may need opportunities to expand transit. We would note
that, very often, low-income communities are located in
suburban environments as well as urban and rural environments,
and so their needs would have to be addressed in that growth.
There may be opportunities, or needs, certainly, to grow
transit services in rural areas, as well, depending on their
circumstances. So, you will see a diverse portfolio in the
programs that we have in GROW AMERICA to meet the diverse needs
that we are seeing.
Senator Merkley. Thank you, and I think Oregon has a
somewhat unique situation of having urban growth boundaries
that concentrate the form of the city and public transit
becomes incredibly important in that strategy. The whole effort
was to preserve farming and forest lands and it has worked
relatively well, but it does not work well without good
transit.
One of the items that transit districts in Oregon keep
bringing up to me is the change from discretionary programs to
formula funding in the Bus Facility Program under MAP-21. And,
essentially what they lay out is they used to be able to get a
big grant to help essentially buy a significant number of
replacement vehicles at a single time, or if not replacement,
to add to their fleet. Now, they receive formula funding that
is kind of a trickle of funds and does not enable them to
undertake the substantial acquisitions where there are cost
efficiencies in buying a significant portion of a fleet at a
time. So, they have found themselves essentially in a situation
where they use that trickle of funds to maintain aging fleets
because they cannot afford to buy new ones.
I will just put it simply. They liked the previous strategy
better. They found that more effective, and the ability to
acquire more fuel-efficient vehicles and so forth. Is there any
thought to pushing back to the direction of the former
framework?
Ms. McMillan. GROW AMERICA would increase the overall Bus
and Bus Facilities Program four times, almost $2 billion a
year, and we propose to reintroduce a portion of that, about 30
percent of that funding base, to a discretionary program.
Senator Merkley. Well, I do not know. You are just
completely befuddling me because you are saying yes to
everything I ask for. What else should I ask for, Mr. Chairman?
Chairman Shelby. Go ahead.
Senator Merkley. Anything you want me to ask for on your
behalf while we have got this positive rhythm going here?
Chairman Shelby. Always something.
Senator Merkley. Well, really, that is all the things that
I needed to raise and I appreciate your testimony, and thank
you, Mr. Chairman.
Chairman Shelby. Thank you, Senator.
Senator Moran.
Senator Moran. Mr. Chairman, thank you very much. Ma'am,
thank you very much for being here.
I always smile when I tell people I am on the Banking and
Urban Affairs Committee. Coming from Kansas, it is sometimes
not thought of as an urban place. The same is true of transit.
We sometimes think that transit is simply something that is
useful and beneficial to folks who live in the cities, who live
in urban areas or suburban areas, and from my most rural
communities, where a bus is necessary to get to the hospital or
the doctor, to Johnson County, Kansas City, Kansas, the suburbs
of Kansas City, Wichita, or Topeka, these issues are hugely
important.
You indicated last year that more Americans travel by bus
than any other form of transit, and MAP-21 took about half the
funding of the Bus and Bus Facilities account and transferred
that to the rail State of Good Repair Account Program, and as a
result, our ability to purchase buses, our ability for our
transit authorities to acquire the necessary equipment to meet
the needs of their riders, the consumer, is significantly
limited.
Johnson County, which would be the suburb of Kansas City,
is our most populated county. They have 58 fixed-route buses,
20 percent of which are nearly two decades old, and those buses
have been in--are very expensive to replace. The total amount
of money that the transit authority got was $350,000. It would
not buy, probably, a bus.
So, my question is--I guess there is a point here. We want
your help in emphasizing the importance of this program and I
would ask you about how you would prioritize this--or describe
the consequences of the removal of $560 million to the railroad
side of things.
Ms. McMillan. Senator, what you have been hearing from your
constituents is clearly what we have been hearing over and over
again in terms of an area in MAP-21 that presented some
significant challenges. And, to redress the concerns that we
are hearing from folks, there are two things to emphasize.
One, the change to a formula did bring some predictability,
but it needed to be on a much higher funding base. So, we are
proposing to increase the base from just under $500 million a
year to $2 billion a year under the GROW AMERICA proposal.
Within that, though, to the point that you made, even then,
the slice of the pie that a smaller agency may have in a rural
area or a small urban area simply would not be enough for those
big one-time needs that they have, which is why we are
proposing to reintroduce a discretionary element--not to take
away the formula completely, but to make the much higher funded
Bus and Bus Facilities 70 percent under formula, and 30 percent
under a discretionary program.
Within that, we would also ensure that 10 percent of the
discretionary awards would go to rural areas to make sure that
within that discretionary paradigm, that----
Senator Moran. How do you define rural? Do you know, in
your proposal?
Ms. McMillan. Yes. The break points or thresholds, if you
will, for formula programs are 50,000 in population or under is
rural, and small urban, if I am getting this correctly, is
200,000 or under in the area.
Senator Moran. And you are talking population----
Ms. McMillan. Population. Yes. Yes.
Senator Moran. All right. So, the problems that you are
aware of and that I am describing are ones that you believe
your proposal would solve?
Ms. McMillan. Yes. We believe that--in fact, we scaled our
recommendations for Bus and Bus Facilities based on the
concerns that we were hearing, yes.
Senator Moran. Thank you very much. Thank you, Mr.
Chairman.
Chairman Shelby. Senator Reed.
Senator Reed. Well, thank you very much, Mr. Chairman, and
welcome. Thank you very much for your service and for your
testimony.
One of the things that we have discovered in Rhode Island,
but it is not unique to Rhode Island, is our transit system,
the operators are aging out and their anticipation is that
within the next 10 years, half of the drivers, mechanics, et
cetera, will be retiring from systems all across the country.
So, how is the administration, or is the administration
proposing to help these transit systems deal with a very quick
change in their workforce?
Ms. McMillan. Thank you, Senator, for that question, and
let me take it in two parts, briefly.
The first is that under MAP-21, we did have the opportunity
to implement an Innovative Workforce Development Program, and
in fiscal years 2011 and 2012, we had over that period $10
million that we made available for workforce programs targeted
particularly at the issue you have raised of the need for
training a workforce and the changing technologies. As new fuel
buses are coming online and the like, we were realizing that we
did not have a workforce that was trained in those new skills,
nor did we have an opportunity for the existing workforce to
get retrained. And, so, we were identifying pilot programs to
address that.
Likewise, in October of 2014, we released a notice of
funding availability for another round of workforce assistance,
this time geared at creating workforce opportunities for
populations often not having a chance to get into this
opportunity: low-income populations, veterans, women, and the
like, and looking at model workforce training with community
colleges or apprenticeship programs to deal with that.
That said, the gap is estimated to be between 5,000 and
6,000 workers in terms of what transit agencies need going
forward. Therefore, under GROW AMERICA, we are asking for some
significant increases in workforce assistance, about $20
million a year to support recruiting and training, again, of
skilled workforce through grants, but also to revamp our public
transit Federal institute that we underwrite. We would revamp
that to ensure that the training offered through that mechanism
would deal with what you would term blue collar or line skills
training as well as managerial leadership-level training, again
recognizing the breadth of need that we have.
Senator Reed. Thank you very much.
We are pleased to see that the administration is proposing
some significant funding for transit, and it seems, though,
that--and I think there is a demand and a need for it--that
some of the money is going to rural areas, which Senator Moran
was talking about that, and then some of the money seems to be
headed toward sort of bigger, faster growing areas. Rhode
Island sort of finds itself maybe in the middle, because it is
not growing dramatically in terms of population, it is not a
rural area by any stretch of the imagination, but transit is so
critical. How would these proposals sort of help areas like
Rhode Island expand bus rapid transit service within very
constrained spaces, our metropolitan areas?
Ms. McMillan. Well, bus rapid transit is a technology and
approach that we are seeing increased popularity in across the
country. And, one of the areas certainly is in our New Starts
and Small Starts Program, Small Starts in particular. We are
seeing a lot of demand there. We have asked for a significant
uptick in funding for the program in order to create the
capacity for services such as BRT, and we have seen BRT in
areas such as you describe in your State, established areas
that have a growing ridership, but also in areas such as El
Paso, Texas. So, we just want to make sure our programs are
flexible enough to accommodate each of those demands.
Senator Reed. Well, I think the key is flexibility,
because, again, there are rural areas that are very much
underserved and then there are some older urban areas that are
not growing but depend critically on transit in terms of being
more productive and more attractive for job growth and
everything else.
But, thank you for your service and thank you, Mr.
Chairman.
Chairman Shelby. Thank you.
I have another question for you, getting into some areas
that I brought up earlier. Federal policies, I believe, should
encourage private investment in transportation infrastructure
in order to better leverage Federal investments and to increase
economic growth. Public-private partnerships, or P3s, are one
way to do this. The Denver Eagle P3 project is the only public
transportation public-private partnership in existence, to my
knowledge. While I am pleased that the administration is
encouraging private investment in transportation
infrastructure, I am interested in the steps that the Federal
Transit Administration is taking to encourage more transit P3s.
Are you doing that, and if not, why not?
Ms. McMillan. Thank you, Senator, and I would like to
highlight four areas----
Chairman Shelby. OK.
Ms. McMillan. ----where public-private partnership is being
worked on.
First of all, under MAP-21, as you know, Mr. Chairman,
there was direction to provide technical assistance and
education to those interested in pursuing private sector
related opportunities. We launched a Web site in July of 2014
to do exactly that, highlighting areas from research that we
had done with the communities, and we are working closely with
the Build America Transit Infrastructure Center, as you
mentioned, a very important way to collaborate and bring even
more resources from the Department to bear.
We are pursuing a rulemaking, also required under MAP-21,
to identify potential barriers to the private sector. Again, we
spent some time researching and holding outreach efforts to the
industry and stakeholders, came up with a list of barriers that
have been identified, and we are hoping to get that NPRM out by
the end of the year.
Importantly, though, with transit, we are pursuing private
sector participation opportunities in the area of economic
value capture. This is something that I think is uniquely
situated to the transit industry, whereby when new transit
projects come in, we can work with----
Chairman Shelby. What do you mean by that, economic value
capture? Explain.
Ms. McMillan. When a new transit project is built, it often
has the effect of increasing the land values----
Chairman Shelby. Oh, yes.
Ms. McMillan. ----around the station.
Chairman Shelby. The whole area.
Ms. McMillan. Exactly. And, so, what we would like to do is
explore with the development community as well as local
jurisdictions and transit agencies how the transit projects can
capture some of that value to help with the construction,
importantly, in terms of that mix, but also potentially in
terms of ongoing operations and maintenance assistance. We are
seeing that in a few areas, where the development community
sees the ``t'' in transit-oriented development as critical to
their ongoing health. So, that is an area we are very actively
exploring.
Finally, I wanted to note, transit's presence in accessing
TIFIA loans has increased dramatically. There have been 14
TIFIA loans made to transit projects, also one RRIF loan, the
rail oriented loan program, where transit had eligibilities
there. And, we have seven letters of interest for additional
transit projects tapping into that source. And, as you know,
that has been very helpful in helping to attract private
capital into these complex funding mixes for transit. So, those
are four areas where we have been involved.
Chairman Shelby. What if someone had a vision of an area,
we will just call it in Kansas or Rhode Island or anywhere
else, you know, to upgrade an area, and you could do it by a
new transit project and the things that build around it and so
forth. Because our dollars are so short, would it make sense if
you could, say, fund 20 to 30 percent of it like a grant of
some kind and then have a private partnership that would come,
like you would pay the downpayment and they would do it,
because you could leverage so much more money. You would prime
the pump, so to speak. That works in other areas. I just
wondered if it was really developed theoretically, and then to
a practical sense, to where you can leverage money, because
leveraging money is how they do things.
Ms. McMillan. Right. I think those leveraging opportunities
is exactly the arena that we want to explore with the Build
America Transportation Investment Center. I think there are
things we can learn from what our sister agencies that have
seen, and bring best practices into the transit industry. And,
also, again, be a resource.
We updated, for example--significantly updated--our joint
development circular that we have had for many years, and we
understood from the private sector industry it was quite
confusing. And, so, simply by going through and revamping that
and being very clear about the opportunities that presented was
a way of bringing, hopefully, more folks into the circumstances
you just described.
Chairman Shelby. Do you agree that projects with a minimal
Federal investment should not be subject to the same level of
bureaucratic oversight as those with a significant Federal
investment? And, what can you do administratively to alleviate
some of those?
Ms. McMillan. Well, Mr. Chairman, one of the things that
was an important opportunity under MAP-21 was the streamlining
opportunities related to our New Starts, Small Starts Program
and Core Capacity. It is a flagship program with very big
dollar amounts often involved in the projects and streamlining
was designed into some of the reforms that MAP-21 brought to
the table.
I am happy to say that with a policy guidance that was put
out for comment this month, we have addressed all of the
streamlining steps that were attached to the baseline program
and we are looking forward to seeing that move forward.
So, I would say, broadly, for any transit project where
Federal dollars are put to use, streamlining and getting those
projects out, on the ground as soon as possible, is an
objective.
Chairman Shelby. With our greatest needs that have been
laid out here today all over the country, maintenance, keeping
up, keeping up what we have, new buses, new transit systems,
new rail, whatever, we have got to change the model some way.
Do you agree with that? We are going to have to change the
model, because we are not going to have the money that we need.
You can see us tightening up. So, it looks to me like
leveraging the private system, because the private system is
much bigger, if they had the incentives to work, and I think we
would all benefit from it. I know that is probably above your
job description right now, but it is something I think we, as
policymakers, ought to really seriously think about up here.
Senator Moran, do you have any other questions?
Senator Moran. If I could, Mr. Chairman, thank you.
Chairman Shelby. OK.
Senator Moran. Ms. McMillan, you answered my questions
earlier satisfactorily. Thank you. But, your answers did assume
more money. You talked about the President's budget, our
request. I think it is more likely that the spending, the
funding is going to be much closer to flatlined than it is a
significant increase, and my question is, do you have the
capabilities and plans to help us answer those questions? How
do we put more money--and perhaps this is exactly what the
Chairman is indicating--how do we put more money into
infrastructure and transit if it is not the easy answer that we
are just going to have more money to do it? And, so, what are
your priorities? How do you help us prioritize how I can help
those rural communities and I can help those Topeka, Wichita,
and Kansas City areas, for example, acquire a new bus if there
is only the same amount of money in the transit part of the new
transportation bill that I hope we pass?
Ms. McMillan. Senator, I would say that we can always make
progress in making our framework, whether it be our regulatory
framework or project development and evaluation framework more
streamlined. One example with our small bus operators that we
are working on is to figure out ways that we can make the
procurement process for vehicles, when they only buy a small
number of vehicles, make that more streamlined and, hopefully,
bring the unit cost down as a result.
But, that said, I firmly believe and I have to reiterate
that the reason that we have put forward the robust funding
levels under GROW AMERICA is that the United States economy and
the people here deserve more than just backfilling the holes
that we have seen. We are not going to be able to advance and
meet the needs of transit and the larger United States
transportation system if we do not see increased funding
levels. And, so, we look forward to working with Congress on
that discussion. But, we have built these numbers around the
needs that we see, everything from, again, reinvesting in the
existing system which is crumbling at the seams, to the demand
that we are seeing from generations that want options and they
want to move in ways that are different from perhaps how we are
doing it right now.
Senator Moran. Thank you.
Chairman Shelby. Senator Schumer.
Senator Schumer. Thank you, Mr. Chairman, and to you and
the witness, I apologize. We have Finance Committee on TPA, so
that is sort of right on the hotplate right now. But, anyway, I
thank you and thank you for your good work, Acting
Administrator McMillan.
One of our top priorities for this Congress must be passing
a long-term infrastructure bill that provides the level of
funding our system needs. Throughout the country and in my
State of New York, we are seeing impacts of recent failures to
sufficiently invest in infrastructure. The failure to properly
invest poses huge issues for safety, for local governments, for
the ability to meet critical repair needs, enhance capacity,
and invest in projects that create jobs, spur economic growth
and development in the future.
Current estimates of backlog of critical maintenance in
transit alone is $86 billion. That number does not account for
roads and bridges, which are probably even greater, nor does it
include projects that would increase capacity. In New York, our
subway system, because New York has grown in population and we
are doing pretty well, is just up to the gills, record
ridership.
So, right now--and right now, the MTA, New York's transit
agency, has a state of good repair backlog of $50 billion. That
is just the investment required to fix issues in the existing
system and get it up to current standards.
So, my first question to you, do you believe our current
transit spending levels are enough? Some people say, let us
just for a short time, a long time, keep the same level of
spending and renew it. Can you talk about some of the impacts
both on safety and the Nation's economy if we fail to increase
spending levels for these programs.
Ms. McMillan. Well, the short answer to your question,
Senator, is no, we do not believe that the current funding
levels are sufficient. To start with your observation on need
of the existing systems, we have a backlog of an estimated $86
billion, but that grows every year at the existing funding
levels, as I mentioned in my earlier remarks, at $2.5 billion a
year, and that is just for the systems as we see right now. Not
dealing with that certainly increases the risks, the safety
risks, of operating those systems. Transit agencies every day
do the best job and put out a safe system, but crumbling
infrastructure has its impacts and we need to ensure that we
deal with those.
In addition to that, though, as you have mentioned, there
is increasing demand for more transit service. We have programs
that we have proposed in GROW AMERICA, increases in our New
Starts, Small Starts, in our Core Capacity Program. New York
MTA is extremely interested in participating in that, which is
creating capacity within the existing footprint. Our rural
systems are seeing increased pressure because of the aging
populations in their area. So, demographics are pushing us to
greater need and that is why we have the diverse portfolio we
have proposed.
Senator Schumer. OK. The next two questions are transit
related. Even in areas that do not have lots of mass transit--
obviously, we in New York depend on it. To get 3.5 million
people on and off Manhattan Island every day is an amazing
accomplishment that is done by the, for all its problems and
all its need for funding, the miracle of the New York City
subway and mass transit system. It helps the rest of the
country.
And, that is my first question. I am going to ask both at
once to not take too much of the Chairman's time. Can you talk
about the impact of increasing spending in transit on
communities that do not have a local recipient, in other words,
they do not have a local transit agency, but spending on
transit still helps them, manufacturing and other things.
And, second, a specific concern I am hearing from transit
agencies in my State, across my State, the need for a
discretionary program for buses. I am sure you are aware,
without a program of this type, it is difficult for smaller
communities, as you mentioned, to replace existing bus fleets,
given the sizable one-time cost of bus replacement. Rural
communities are particularly affected. Doing things like
creating a discretionary bus program would be a worthwhile use
of funding. We do not even have, though, now with the current
funding levels, enough for the cost of maintenance of
infrastructure.
So, can you talk about the benefits of creating a
discretionary bus program and how smaller bus-dependent systems
could benefit from an agreement by this Committee to increase
that level. You can focus on the second.
Ms. McMillan. On the second one----
Senator Schumer. Yes.
Ms. McMillan. ----again, our proposal for Bus and Bus
Facilities under GROW AMERICA is to increase the program
fourfold and to change the structure to 70 percent of the
formula that we see right now, but reintroduce the remaining 30
percent in a discretionary structure to meet the unique needs
that may emerge for our transit agencies.
Senator Schumer. Great. Thank you.
Mr. Chairman, thank you very much.
Chairman Shelby. Thank you for your appearance and your
testimony here today. We look forward to trying to solve some
of these problems together. Thank you very much.
Ms. McMillan. Thank you, Mr. Chairman.
Chairman Shelby. The meeting is adjourned.
[Whereupon, at 11:27 a.m., the hearing was adjourned.]
[Prepared statements and responses to written questions
supplied for the record follow:]
PREPARED STATEMENT OF SENATOR MIKE CRAPO
I commend the Committee for holding this hearing on transit issues.
Transit is often discussed in the context of large metropolitan areas
and in the context of fixed rail service--but it is also important in a
relatively rural State like Idaho where bus service is the option in
our largest metro area. And it is important service. Bus and van
service, whether on routes or on demand, can help get seniors to the
doctor, hospital, or pharmacy and get workers to jobs. In the absence
of a car, transit can be a lifeline for a number of citizens. As the
Committee reviews transit issues, I urge that we keep in mind the
important role played by transit in smaller and rural communities.
______
PREPARED STATEMENT OF THERESE W. MCMILLAN
Acting Administrator, Federal Transit Administration, Department of
Transportation
April 21, 2015
Mr. Chairman, Ranking Member, and Members of the Committee, thank
you for the invitation to appear before you today to report on the
Federal Transit Administration's (FTA) progress toward implementing the
Moving Ahead for Progress in the 21st Century Act (MAP-21). We are
pleased for the opportunity to discuss the Administration's surface
transportation reauthorization proposal, the Generating Renewal,
Opportunity, and Work with Accelerated Mobility, Efficiency, and
Rebuilding of Infrastructure and Communities throughout America (GROW
AMERICA) Act. It builds on the strong foundation MAP-21 provided for
public transit, recognizing transit's growing presence across the
country.
In 2014, Americans took 10.8 billion trips on transit--the highest
annual ridership number since 1957. Public transportation is a way of
life in urban areas, a lifeline in many towns and rural areas, and a
quality of life improvement for many fast growing communities. In
addition, many working families, seniors, veterans, individuals with
disabilities, tribal residents, and others rely on public
transportation for their mobility needs. Transit is a driver of local
and regional economic development, helps reduce highway congestion and
greenhouse gas emissions, and provides people better access to job
centers, schools, medical services, and other vital daily activities.
Approximately half of all transit riders do not have access to a
private vehicle, making public transit a primary means of connecting to
their local community. FTA anticipates that demand for public
transportation service will continue to rise. Now is the time to
deliver the policy and funding solutions America needs to improve our
national transportation network, invest in our collective future, and
grow the economy.
MAP-21 took effect on October 1, 2012, and authorized $10.6 billion
in FY2013 and $10.7 billion in both FY2014 and FY2015 for public
transportation. FTA is effectively and efficiently administering those
Federal dollars through its formula and discretionary grant programs.
We also continue to make significant progress on an aggressive
timetable towards implementing new safety authority through the
rulemaking process and developing related guidance with input from
affected stakeholders.
Last year, the Administration proposed the GROW AMERICA Act, which
was a comprehensive 4-year, $302 billion reauthorization proposal
calling for substantial funding increases as well as critical policy
reforms. Congress passed a short term extension with status quo
policies and flat funding, which did not address America's
infrastructure funding challenges. In March 2015, the Administration
submitted to Congress an updated version of GROW AMERICA, consistent
with the President's FY2016 Budget Request, which adds additional
funding certainty by requesting a 6-year, $478 billion multimodal
proposal, including $115 billion to support our Nation's public
transportation systems.
The GROW AMERICA Act continues the focus on FTA's three key
priorities: improving transit safety--FTA's highest priority;
addressing a transit asset maintenance backlog that's more than $86
billion and growing; and building system capacity to meet growing
ridership demand.
To that end, the President's FY2016 Budget Request seeks $18.4
billion to maintain existing transit systems in a state of good repair
while expanding transportation options. The proposal increases average
transit spending by nearly 76 percent above FY2015 enacted levels,
which will enable transit agencies to address immediate repair needs,
enhance core capacity and plan for expansion to improve connectivity in
suburbs, fast growing cities, small towns, and rural communities. GROW
AMERICA also supports economic competitiveness by creating ladders of
opportunity through workforce development initiatives and ensuring that
manufactured products are produced in the United States. These transit
investments will play a critical role in supporting communities around
the country.
Safety
Public Transportation Safety (49 U.S.C. 5329; Section 3008 of GROW
AMERICA)
MAP-21 amended 49 U.S.C. 5329 to give FTA authority for the first
time to establish safety criteria for all modes of public
transportation, and to establish minimum safety standards for public
transportation vehicles used in revenue operations.
Keeping rail public transportation safe requires a partnership
between FTA, transit agencies and those States that have State safety
oversight (SSO) obligations. FTA will serve as a leader, facilitator,
and final regulatory authority; transit agencies will be held
responsible for the safe operation of their systems; and the SSOs will
act as effective day-to-day safety oversight regulators capable of
holding transit rail systems accountable and ensuring they comply with
minimum State and Federal safety standards.
Following the August 2013 publication of an ANPRM on safety, FTA
published the SSO Program Notice of Proposed Rulemaking (NPRM) on
February 27, 2015, outlining a program that will replace the existing
outdated regulatory framework with one designed to better evaluate the
effectiveness of a rail transit agency's system safety program. This
new framework will support the flexible, scalable principles of Safety
Management Systems (SMS) to focus on organization-wide safety policy,
proactive hazard identification and risk informed decision making as
part of risk management, safety assurance, and safety promotion.
Comments are requested on the SSO NPRM by April 28, 2015. Relatedly,
FTA intends to launch an SMS Implementation Pilot Program to assist
transit agencies of all sizes and operations, including bus-only, in
the development and maintenance of their Safety Management System.
FTA also recently published the Final Interim Safety Training
Certification requirements designed to enhance the technical
competencies and capabilities of individuals responsible for direct
safety oversight of rail transit systems at agency, State and Federal
levels, and of individuals who conduct safety audits of these systems.
These requirements become effective on May 28, 2015.
We intend to issue additional guidance and notices of proposed
rulemaking in 2015, about such issues as the National Public
Transportation Safety Plan, the Public Transportation Safety Program,
the Transit Agency Safety Plan, the National Public Transportation
Safety Certification Training Program and the Transit Asset Management
Plan. Together, this framework will ensure safety standards are in
place at each transit system across the country to protect the riding
public and transit agency employees.
In the meantime, in order to better understand the strengths and
weaknesses of public transit safety operations, FTA is utilizing its
new safety authorities to collaborate with the Chicago Transit
Authority to examine their safety program, and to conduct a Safety
Management Inspection of the Washington Metropolitan Area Transit
Authority, which began in early March 2015.
While MAP-21 gave FTA the authority to establish safety
regulations, it did not provide FTA with expanded enforcement tools to
ensure compliance with such regulations. To that end, the GROW AMERICA
Act bolsters FTA's safety authority by allowing for the imposition of
civil and criminal penalties and establishes emergency authority for
FTA to restrict or prohibit unsafe transit practices. It also includes
data confidentiality for our grantees and an opt-out provision from the
law's SSO Oversight program. This will apply to States with fixed
guideway public transportation systems, whether in operation, under
construction, or in design, with fewer than one million combined actual
and projected revenue miles per year, or which provide fewer than 10
million combined actual and projected unlinked passenger trips per
year. FTA will oversee the safety of these exempted systems. The GROW
AMERICA Act would also provide resources to fully carry out the safety
program, including providing an appropriate level of assistance to
States and individual transit providers, while also enhancing safety
data collection.
Transit Asset Management
State of Good Repair (49 U.S.C. 5337 and 5339; Section 3010 of GROW
AMERICA)
Returning transportation assets to a state of good repair is a
strategic goal for the Department of Transportation (DOT) and a high
priority for FTA. Well-maintained infrastructure investments can have
long-term economic benefits for the Nation, but those benefits are not
fully realized because of years of underinvestment and neglect. This is
evident in the DOT's 2013 Conditions and Performance Report to
Congress, which found an $86 billion maintenance backlog of rail and
bus assets that are in marginal or poor condition. The backlog
continues to grow at an estimated rate of $2.5 billion per year under
current investment levels.
MAP-21 requires transit agencies to develop a Transit Asset
Management plan to help them strike a better and more informed balance
between preservation and expansion needs in the context of a safety-
first performance culture. Strategic and targeted investments focused
on replacing and rehabilitating aging transit infrastructure are needed
to help bring our Nation's bus and rail systems into a state of good
repair. Having newer and more reliable track, signal systems, vehicles
and stations will help ensure the safe, dependable and accessible
transit service demanded by the American public.
FTA is actively working to implement this new National Transit
Asset Management System through the rulemaking process, supplemented by
technical assistance and outreach to grantees. Given the diversity of
transit systems, from complex urban rail and bus networks, to demand
response van systems in rural communities, a flexible approach will be
paramount. FTA expects to issue a NPRM later this year, addressing the
extensive comments received on the October 2013 Advanced NPRM, which
aligned the transit asset management process with the need for
strengthening transit safety. Additionally, on January 28, 2015, FTA
published in the Federal Register final guidance to assist recipients
applying for funding under the State of Good Repair Formula Grant
Program.
However, under MAP-21, our efforts still do not go far enough to
address the backlog of maintenance. The current State of Good Repair
Formula Grant Program focuses on rail and bus rapid transit (BRT)
systems that are at least 7 years old. The preservation needs of non-
BRT bus services were severely impacted in MAP-21, with the decrease in
funding for the Bus and Bus Facilities Formula Grant Program. The need
for additional investments and innovative policies that address the
backlog for all bus and rail maintenance still exists, and much more
work remains to be done. To that end, the GROW AMERICA Act proposes a
total of $7.6 billion in fiscal year 2016 to support FTA's State of
Good Repair efforts, and includes $5.7 billion for State of Good Repair
Grants (49 U.S.C. 5337) and $1.9 billion for Bus and Bus Facilities
Grants (49 U.S.C. 5339), with incremental increases in each fiscal year
through the end of the authorization.
All of these actions, taken together, reflect the U.S. Department
of Transportation's strategic commitment to address the infrastructure
deficit in a holistic fashion--and to help the industry employ better
metrics that enable them, in turn, to be better stewards of their
assets.
Building System Capacity
Core Formula Programs (49 U.S.C. 5307, 5310, 5311; Section 3003, 3004
of GROW AMERICA)
FTA's formula grant programs provide the critical funding for the
day to day business of transit agencies across America. MAP-21 retained
the program structure for the formula programs with a few exceptions,
which were implemented quickly in 2013. The Urbanized Area Formula
Program (5307) provides critical capital funding to transit agencies
for recapitalization needs. The Rural Formula program (5311) provides
capital and operating funding to transit agencies serving in rural
areas, tribal lands and Appalachian States. The Enhanced Mobility of
Seniors and Individuals with Disabilities Formula Program (5310)
provides funding for transit services that specifically target serving
the elderly and disabled.
Since FY2013, FTA has obligated more than $10.8 billion in funding
for these three formula programs. GROW AMERICA builds on the baseline
provided by MAP-21 by requesting a 2 percent increase for FY2016, with
moderate increases thereafter for the life of the authorization.
Capital Investment Grants (49 U.S.C. 5309; Section 3002a of GROW
AMERICA)
Not long after the enactment of MAP-21, FTA streamlined its New
Starts and Small Starts Capital Investment Program through a final rule
and accompanying guidance. The changes are helping local project
sponsors shave up to 6 months off the time required to move major
projects through the Capital Investment Grant (CIG) Program pipeline.
Sponsors who choose to use the optional simplified travel model
developed by FTA--a significant streamlining tool--may develop
ridership forecasts in as little as 2 weeks, a dramatic timesaving from
the 2 years it can take using traditional forecasting models, while
saving as much as $1 million on related model forecast development
costs. Additionally, FTA now has a more straightforward approach for
measuring a proposed transit project's cost-effectiveness, considers an
expanded range of environmental benefits, and has simplified the
administrative reporting process.
In April 2015, FTA requested comments from the industry on interim
policy guidance that, when finalized, will continue to address MAP-21
provisions that govern the CIG program. The guidance provides a deeper
level of detail about the methods for applying the project
justification and local financial commitment criteria for rating and
evaluating New Starts, Small Starts, and Core Capacity Improvement
projects, and the procedures for getting through the steps in the
process required by law. FTA is proposing to use simple eligibility
parameters, simplified evaluation measures, and expanded ``warrants''
based on readily available, easily verifiable data to make the process
less burdensome and time consuming for project sponsors who qualify.
GROW AMERICA proposes to expand the CIG program by increasing the
program funding level to match the growth in projects seeking funding.
FTA has seen a steady rise in the demand for projects seeking Capital
Investment Grant funding and a significant increase of projects
requesting to enter project development since the passage of
streamlined Capital Investment Grant program requirements in MAP-21.
The FY2016 CIG Annual Report includes many projects seeking
construction grant agreements, and FTA has seen 44 new projects overall
since MAP-21 took effect.
GROW AMERICA would also create a streamlined review process for
simple, low-risk, cost-effective projects in smaller communities by
adding a Very Small Starts category. Very Small Starts projects would
be new corridor or regional-based bus services with premium features
located in small urban or rural areas.
Rapid Growth Area Transit Program (49 U.S.C. 5314; Section 3011 of GROW
AMERICA)
GROW AMERICA proposes a new Rapid Growth Area Transit competitive
program that will provide $500 million in capital funds in fiscal year
2016, with incremental increases each fiscal year through 2021, to help
fast-growing communities introduce new BRT systems as part of their
transportation mix. BRT systems are a proven way to expand mobility
relatively quickly and affordably, helping communities to get ahead of
congestion and develop a transit-oriented culture as an integral part
of their growth management strategy.
Economic Competitiveness
Workforce Development (49 U.S.C. 5322; section 3005 of GROW AMERICA)
MAP-21 formally established the Innovative Transit Workforce
Development Program under 49 U.S.C. 5322, which provides funding to
transit agencies and partners with solutions to pressing workforce
development issues. Program funds are used to address serious shortages
in the skilled transit workforce--estimated to be 5,000 to 6,000
workers--by fostering job growth and a stronger workforce through
ladders of opportunity initiatives that teach individuals technical
skills to support the transit industry in the 21st century.
Rapidly changing technology and growing transit ridership along
with plans to expand service has heightened the need for continued
training in a variety of public transportation occupations. A new
generation of workers must refine their skillsets to meet future
demands and contribute to building our Nation's 21st Century
transportation infrastructure. GROW AMERICA will expand FTA's workforce
development efforts with a program that will fund and support
innovative transit-focused training programs and apprenticeships,
particularly at the regional and/or national level. The Act will also
establish a new Public Transit Institute to replace the current
National Transit Institute (NTI), that allows FTA to expand training to
cover blue-collar transit workforce training in addition to the
management-level courses now offered by NTI.
Local Hiring (49 U.S.C. 5325; Section 3007 of GROW AMERICA)
Currently, Federal requirements prohibit the use of local-hiring
preferences. It is important that we support local hiring as an
effective tool to help men and women who are ready to work to obtain
jobs, and job training, in their communities. The GROW AMERICA Act
allows the use of local hiring preferences in contracts using FTA funds
for projects over $10 million when the work is in an area with a low
per capita income or higher than average unemployment. The local-hiring
preferences are designed with flexibility and as such may not require
the hiring of workers without the necessary skills, and the use of such
preferences may not compromise the quality, timeliness, or cost of the
project.
Emergency Relief (49 U.S.C. 5324; Section 3009 of GROW AMERICA)
A final rule establishing procedures governing the implementation
of the Emergency Relief program became effective on November 6, 2014.
On February 4, 2015, FTA published its proposed ``Emergency Relief
Manual: A Reference Manual for States and Transit Agencies on Response
and Recovery from Declared Disasters and FTA's Emergency Relief
Program''. FTA sought public comment through April 6, 2015, and expects
to finalize the guidance later this year.
While Congress appropriated $10.9 billion for Hurricane Sandy
emergency relief efforts, these funds are only available for areas
affected by Sandy. Congress did not appropriate funds for FTA's
Emergency Relief program in FY2013, FY2014, or FY2015, leaving the
agency with no funds to immediately address any new disasters that
impact the transit industry. GROW AMERICA proposes that $25 million be
appropriated in each fiscal year 2016 through 2021 to capitalize the
program so that FTA stands ready to respond.
Buy America (49 U.S.C. 5323(j); Section 3006 of GROW AMERICA)
The administration remains committed to preserving and creating
home-grown jobs that support our domestic manufacturing industry and
position the United States to take the lead in transportation-related
innovation. Therefore, GROW AMERICA proposes to increase the domestic
content requirement for manufacturing rolling stock components and
subcomponents further than the current standard of 60 percent. With a
phased increase, by 2020, 100 percent of the components and
subcomponents for rolling stock, by cost, including rolling stock
prototypes, will have to be produced in the United States. Final
assembly in the United States remains a requirement, as under MAP-21.
Public-Private Partnerships (49 U.S.C. 5315)
FTA also recognizes the value of public-private partnerships as a
means of augmenting public investments in infrastructure. On August 25,
2014, FTA published a final circular on Joint Development that clearly
explains how FTA funds and FTA-funded property may be used for public
transportation projects that are related to and often colocated with
commercial, residential, or mixed-use development. The circular
emphasizes the concept of ``value capture,'' which encourages FTA
grantees to leverage Federal investments to capture revenue that can in
turn be used to offset capital and operating expenses.
Additionally, FTA held an Online Dialogue with stakeholders on
Public-Private Partnerships in January 2015, and is using the
information learned to develop a NPRM on Public-Private Partnerships.
We expect this rulemaking to address major barriers to utilizing this
financing method, and propose methods to ease and encourage their use.
Research, Planning, and Environment
Research (U.S.C. 5312; Section 3009 of GROW AMERICA)
GROW AMERICA includes $60 million in FY2016 increasing to $70
million in FY2021 to support research activities that improve public
transportation systems by investing in the development, testing, and
deployment of innovative technologies, materials, and processes. FTA
partners with public institutions, transit agencies, nonprofits,
universities, and other entities, awarding funding for activities that
improve safety, state of good repair, and help to advance transit
vehicle and system technology.
Fixing and Accelerating Surface Transportation (FAST) (49 U.S.C. 5602;
Section 1401 of GROW AMERICA)
GROW AMERICA includes a new $1 billion per fiscal year competitive
grant program designed to spur major reform in the way States and
metropolitan regions make transportation policy and investment
decisions, and to encourage new and innovative solutions to
transportation challenges. The FAST program will be jointly
administered with the Federal Highway Administration (FHWA), each
overseeing $500 million, to encourage the adoption of bold, innovative
strategies and best practices in transportation that will have long-
term impacts on all projects across the transportation programs.
Performance-Based Planning and Accelerated Project Delivery
MAP-21 transformed the Federal-Aid Highway program and the Federal
Transit program by requiring a transition to performance-driven,
outcome-based approaches to key areas. With respect to planning, the
statute introduced critical changes to the planning process by
requiring States, MPOs, and providers of public transportation to link
investment priorities to the achievement of performance targets for
safety, infrastructure condition, congestion, system reliability,
emissions, and freight movement. FHWA and FTA jointly issued an NPRM on
Metropolitan Transportation Planning, and Statewide and Nonmetropolitan
Transportation Planning in June 2014, and are on target to issue a
final planning rule later this year. The two agencies also jointly
issued a final rule in October 2014 that creates five new categorical
exclusions for transit projects, thereby shortening the environmental
review process by requiring minimal analysis and documentation, where
appropriate. These types of actions effectively cut red tape for
funding recipients, reduce the administrative burden on State and local
governments, and expedite results for the American public.
Conclusion
The May 31st expiration of the extension of MAP-21 offers an
important opportunity to recalibrate the way our Government evaluates
and invests in our federally funded public transportation
infrastructure. From a transit perspective, MAP-21 included provisions
enabling FTA to focus limited resources on certain strategic
investments and policies. The administration's comprehensive 6-year
reauthorization plan set forth in GROW AMERICA will provide FTA with
the additional tools necessary to improve the riding experience for
millions of Americans by repairing and modernizing transit systems and
expanding capacity for generations to come.
I am committed to working together with this Committee to achieve
our mutual goal of addressing America's urgent need for investment in
transit infrastructure. Thank you again for inviting me to testify on
this important topic, and I will make myself and my staff available to
answer your questions.
RESPONSES TO WRITTEN QUESTIONS OF CHAIRMAN SHELBY
FROM THERESE W. MCMILLAN
Q.1. I want to revisit the first question that I posed Ms.
McMillan and ask you to identify the specific measures that FTA
employs to hold capital investment grant applicants to the
requirement that they have the resources necessary to
recapitalize, maintain, and operate their existing system, as
well as the proposed system?
In your earlier answer you identified FTA's efforts to
implement the new asset management program and while I agree
that this is an important element to the overall state of good
repair measures enacted in MAP-21, the requirements I cited
have been in place since passage of SAFETEA-LU. Are you
suggesting that FTA is relying solely on the new Transit Asset
Management program to adhere to a statutory requirement that
has been in place since 2005?
A.1. FTA already employs a rigorous evaluation and rating
process, as required under the statute establishing the Capital
Investment Grant (CIG) Program. One area that FTA is required
to evaluate is local financial commitment, which includes an
assessment of whether local resources are available to
recapitalize, maintain, and operate the overall existing and
proposed public transportation system. FTA requires project
sponsors to submit detailed 20-year financial plans outlining
all estimated sources and uses of capital and operating funds.
Additionally, FTA requires project sponsors to submit historic
information on sources and uses of funding for the transit
system. When developing the rating, FTA examines the financial
plan to ensure there are adequate recapitalization costs
included based on an examination of the transit system's fleet
management plan that outlines fleet replacement needs and
historic expenditures on systemwide maintenance, repair, and
operating needs. Specific measures FTA examines include: (1)
the average fleet age of the transit system, which is an
indicator of how well the agency has been meeting its vehicle
replacement needs; (2) the operating ratio of the transit
system (current assets compared to current liabilities), which
is an indicator of the financial health of the transit agency;
and (3) the reasonableness of the assumptions used in the
financial plan with regard to growth in costs and revenues to
ensure they are in line with historical expenditures and not
overly optimistic. The transit asset management requirements of
MAP-21 will help provide additional data to FTA that can be
used to help determine the reasonableness of recapitalization
estimates included in the financial plans submitted by CIG
project sponsors.
Q.2. Again, following up on an earlier question regarding new
investments in systems that are not in a state of good repair--
You said: `` . . . clearly we want to make sure that transit
assets are safe--the existing system or the foundation, and
that any new services would only be brought to bear if there is
sufficient, continuing progress made toward the state of good
repair.''
Could you tell the Committee exactly how FTA defines
``sufficient--continuing progress'' toward the state of good
repair?
A.2. I did not intend to imply a statutory or regulatory
definition of ``sufficient--continuing progress'' toward a
state of good repair. I was using the term in a general way to
convey that FTA will continue to consider a transit agency's
state of good repair backlog and its plan for managing that
backlog, including prioritizing investments that address any
existing backlog.
Q.3. Moreover, could you share with the Committee how you are
applying this standard today given that ``state of good
repair'' has not yet been defined by the FTA?
A.3. When a transit agency with a large backlog of state of
good repair (SGR) needs comes to FTA seeking CIG funding, we
ask them to provide us with a comprehensive assessment of their
overall SGR needs and how they anticipate prioritizing them to
ensure system safety critical needs and efficient operations
are maintained. We then review their 20 year financial plan to
ensure they have sufficient funding to pay for the prioritized
SGR needs as well as the proposed CIG project and ongoing
operations.
The term ``state of good repair'' will be further defined
in the Transit Asset Management Notice of Proposed Rulemaking
(NPRM) later this year and subject to public comment.
Q.4. As it relates to funding for state of good repair and
funding to meet increasing demand, you stated that FTA is
``trying very hard to balance both of those objectives.'' Could
you tell provide some specifics regarding FTA's current efforts
to balance those competing priorities?
A.4. FTA's FY16 Budget proposal and GROW AMERICA
reauthorization proposal demonstrate our commitment to both
priorities. We are asking for significant Federal dollars to
invest in state of good repair to address the more than $86
billion backlog of transit needs around the country. We are
also asking for increases in funding for the Capital Investment
Grant program to address the growing demand we are seeing
around the country for new and expanded transit services to
move people to where they need to go safely and efficiently.
Investment in both areas is critical to our Nation's
transportation system and our economy.
Q.5. I also want to follow-up on my question regarding the
steps the Administration is taking to alleviate some of the
bureaucratic oversight for projects with a minimal Federal
investment. While I appreciate you sharing the details of FTA's
implementation of MAP-21's Capital Investment Grant (CIG)
streamlining provisions, I am more interested in the steps FTA
can take administratively to remove bureaucratic hurdles for
projects with minimal Federal investment. Has the FTA
identified any efforts that it can undertake administratively
and if so, what are they? Please provide details regarding the
specific impact these identified administrative efforts would
have on projects and project sponsors?
A.5. FTA has taken multiple steps over several years to
streamline the process for Capital Investment Grant (CIG)
program funds both prior to MAP-21 and after MAP-21. FTA
implemented a Simplified Trips on Projects (STOPs) tool 2 years
ago that project sponsors may use at their option to estimate
project ridership. Because this tool uses readily available
census data and transit network feeds commonly prepared by
transit agencies to inform Google Maps and other applications,
the time required for project sponsors to develop ridership
estimates can be as little as 2 weeks, whereas using a
conventional local travel forecasting model can take project
sponsors several months or even years. To greatly simplify the
reporting process for project sponsors, FTA developed reporting
templates for project sponsors that automatically populate
information used in multiple measures and automatically
calculate the evaluation criteria. Previously sponsors had to
enter such data multiple times. FTA also recently proposed an
expansion of ``warrants''--ways in which projects can qualify
for automatic ratings on the statutory criteria rather than
having to submit extensive data and information to FTA. FTA is
also tailoring its oversight of CIG projects rather than
providing a one size fits all approach, which will help shorten
the length of time it takes FTA to complete its reviews of
smaller and less complex projects. We believe that our efforts
to reduce CIG process timeframes are gaining wide acceptance.
For instance, 40 percent of CIG project sponsors submitting
data to FTA in fall 2014 for evaluation and rating used STOPs
to develop their ridership estimates at greatly reduced time
and expense.
Q.6. The Administration has talked a lot about private
investment in transportation infrastructure and leveraging
Federal dollars. While FHWA, through SEP-14 and SEP-15, has
made great strides to streamline the process, particularly for
P3 projects, FTA has not made similar progress. Could you
identify any statutory impediments FTA believes prevent it from
implementing a similar ``SEP-type'' process for certain CIG
projects?
A.6. Section 20013(b) of MAP-21 requires FTA to develop and
implement procedures and approaches that address impediments to
the greater use of public-private partnerships and private
investment in capital projects in a manner similar to FHWA's
SEP-15. FTA has conducted extensive outreach to transit
stakeholders on this issue and currently is drafting a notice
of proposed rulemaking (NPRM) that outlines a process similar
to SEP-15. FTA expects to publish the NPRM for comment by the
end of calendar year 2015.
The major impediment to FTA implementing a ``similar''
process for CIG projects is that FTA does not have the
statutory authority to waive requirements like FHWA's statute.
FTA cannot administratively waive program requirements, such as
evaluation and oversight, labor protections such as Davis Bacon
or 13(c), or other requirements in order to streamline the
approval process for projects with significant private funding
or delivery methods.
Q.7. Following-up on my question regarding regional
difference--could you please provide the specific guidance and
oversight FTA currently has in place to ensure that the
determinations of the regional offices are in line with the
laws and regulations issues by headquarters?
What process to you have in place to review decisions made
in the regional offices and what recourse do grantees have if
they believe that rules have been applied differently?
What can/does FTA do to alleviate the innate conflict that
may arise between grantees and their regional offices if they
were to complain about a decision that impacts them directly?
Is there a formal appeals process that is removed from the
regions?
A.7. FTA has taken very seriously the challenges of ensuring a
foundational level of knowledge and understanding of new and
changing requirements while trying to advance an ever growing
program.
FTA has heard specific concerns related to consistency in
oversight processes and issuance of findings. In terms of
oversight, Triennial Review reports are issued at the Regional
Office level, and FTA has a number of checks in place to ensure
nationwide consistency. For example, FTA Headquarters subject
matter experts have an opportunity to comment on draft findings
prior to FTA issuing the draft report to grantees. Grantees are
given an opportunity to comment on the Triennial Review draft
report and grantee comments are considered by FTA prior to
finalization and issuance of the report. If a grantee believes
that rules have been applied differently, they may elevate
their concern to FTA headquarters for review.
In addition, FTA has strengthened its oversight contractor
training, and provides standardized guidance and deficiency
codes to cover the typical findings and corrective actions
issued in a Triennial Review to ensure consistency across the
country.
Finally, FTA publishes all grant program information,
guidance, and program circulars on its external and internal
Web sites. FTA's Executive Management Team meets regularly,
including a bi-monthly meeting with Regional staff and
Headquarters Program Management staff on program, project, and
grant matters. Acting Administrator McMillan also meets with
all Headquarters Associate Administrators, and all 10 Regional
Administrators monthly to discuss ongoing matters, in addition
to receiving weekly Regional Update reports.
Q.8. Recent accidents such as CTA's O'Hare crash and WMATA's
L'Enfant Plaza incident have further highlighted the serious
safety issues that exist in many transit systems--which, prior
to enactment of MAP-21, were not overseen or regulated by the
FTA. Nearly 6 years after the deadliest crash in WMATA's
history which provided the impetus for FTA's new safety
authority, FTA has yet to issue any safety standards or
protocols. Moreover, when Senator Warner asked about FTA's
implementation of the safety authority, you were hesitant to
provide details and, it seemed, unsure as to whether that was
appropriate. What assurances can you provide the Committee that
the FTA is effectively using the authority provided in MAP-21?
Will FTA issue any safety standards or protocols--will FTA
respond quickly and comprehensively to address safety issues
that come to light in the wake of an incident?
A.8. Safety is and will remain the Department's number one
priority. Congress did not provide FTA direct, regulatory
authority over the safety of transit systems until October
2012, when MAP-21 went into effect. In the intervening 2.5
years, FTA has made extraordinary progress in addressing this
new authority from the ground up, despite limited additional
financial resources to do so.
FTA has been actively working to set up the regulatory
framework to support its new safety authority. In early 2015,
we issued an NPRM for the State Safety Oversight program. The
Final Safety Certification Interim Provisions took effect on
May 28, 2015, requiring necessary training for rail safety
employees. Later this year, we expect to issue NPRMs for the
Public Transportation Safety Program, National Public
Transportation Safety Plan, Public Transportation Agency Safety
Plan, and Bus Testing Program.
Specific nationwide standards and protocols will emerge
from this regulatory framework, once complete.
In parallel, FTA has taken several direct actions in
response to specific safety incidents that have occurred: (1)
FTA issued a nationwide safety advisory in December 2013 in
response to incidents at WMATA and BART that resulted in the
deaths of Right Of Way workers. (2) In response to multiple
incidents at CTA, FTA partnered with CTA to conduct a safety
examination to support strengthening their safety programs and
capabilities through the implementation of Safety Management
Systems (SMS). (3) Most recently, FTA is using its authority
under 5329(f)(1) to conduct a Safety Management Inspection
(SMI) of WMATA's transit system. At the conclusion of the
inspection, FTA expects to issue findings and recommendations
to assist WMATA in building a mature and effective SMS.
FTA will continue to exercise its safety authority by
responding swiftly to incidents as they occur.
Q.9. The GROW AMERICA proposal requests additional safety
authorities for the FTA, specifically fines and penalties. Why
are these additional authorities necessary in light of the fact
that FTA has not used any of its existing authority to ensure
that certain standards and protocols are established by transit
systems nationwide? Shouldn't FTA focus on making transit
systems safer by using its existing authority rather than
coming back to Congress for more? Is there a specific incident
or scenario that the FTA is considering which would require
this additional authority; if so please describe?
A.9. Currently, FTA's primary enforcement tool is the
withholding of Chapter 53 funds. However, withholding funds
from a recipient may not correct a safety issue, as the penalty
would not correct the specific unsafe action nor be directed at
any responsible individual. Moreover, many transit agencies are
heavily reliant on Federal subsidy. To withhold funds from
these agencies would ultimately pose the most adverse impact on
the riding public who are reliant on public transportation
services. FTA believes that having additional enforcement
authority to impose civil and criminal penalties would aide in
the implementation of its new safety authority, as the threat
of such penalties would serve as a deterrent to noncompliance.
Similar to other Federal enforcement regimes, FTA's sister
modes have civil and criminal penalty authority and are able to
more effectively address specific unsafe actions--by an
individual or an organization--to prevent reoccurrence.
Accordingly, FTA is seeking this additional authority in order
to establish a comprehensive and effective safety oversight
regime.
Q.10. I have said many times that I am concerned that we are
building transportation infrastructure without regard to their
long-term maintenance and operation costs. What kind of life
cycle cost analysis goes into the overall evaluation of a
capital investment grant project that is moving through the
pipeline today? Does FTA have plans to modify that analysis,
assuming there is one, given the current state of our
transportation infrastructure?
A.10. The Capital Investment Grant program looks at life cycle
costs in two ways. First, in our cost-effectiveness
calculation, we consider not only the annualized capital cost
of the project which factors in the useful life of each element
of the project, but we also consider the ongoing operating and
maintenance costs. Second, our financial evaluation includes an
examination of a 20 year cash flow statement from the project
sponsor outlining all capital and operating sources and uses of
funds for the entire transit system, including the proposed
project. FTA does not have plans to modify these analyses, but
expects the transit asset inventory requirement of MAP-21 will
provide useful additional data to FTA to help with determining
the reasonableness of recapitalization costs included in the
20-year financial plan.
Q.11. MAP-21 included a ``Pilot Program for Expedited Project
Delivery'' as a SEP-15-type delivery method on the transit side
for a few, select capital investment grant projects that meet
specific criteria. As I have shared with you and others, I am
concerned that FTA has drug its feet in advancing this pilot
project--which, unfortunately, is not out of the ordinary for
FTA as we have seen with past legislative attempts to achieve
innovative project delivery. Unofficially, I have heard
numerous reasons the FTA has not taken action on this MAP-21
provision but I would like to ask you directly, why this pilot
project has not been implemented.
A.11. The Pilot Program for Expedited Project Delivery as
written in MAP-21 is limited to projects in the Capital
Investment Grant (CIG) program including New Starts, Small
Starts and Core Capacity. However, the law does not exempt
projects in the pilot program from the evaluation and rating
process required under the CIG program, the only source of
funding the pilot can draw from, as the law also did not
provide a separate pot of funding for which they would be
eligible. The Pilot also requires the project sponsors selected
for the program to develop a before and after study one year
sooner than would otherwise be required under the CIG program.
These requirements have led to challenges implementing the
pilot program and outlining its advantages to the industry. The
law appears to impose more requirements on these pilot
projects, not fewer, which may prevent the industry from
expressing much interest. FTA has been soliciting input and
ideas from the industry on the pilot program at various CIG
workshops given over the past 2 years, and we expect to put
forth some proposals to implement the pilot soon.
Q.12. GROW AMERICA and the APTA reauthorization proposal
include a discretionary bus program to supplement the 5339
formula program. This is necessary, it is argued, because of
the substantial cost to buy vehicles and build facilities. A
discretionary grant program, I believe, forces transit agencies
to chase funding rather than budget for their needs. I do not
understand how a discretionary grant program can truly address
everyone's needs. A formula program, on the other hand, has
that potential.
If all transit agencies face the challenge associated with
making large capital purchases, how do you make sure all
agencies that need money for buses and facilities get money?
A.12. Formula funding has the potential to address growing
capital needs only to the extent that the base program contains
sufficient funding to address those needs. The shift of the Bus
and Bus Facilities program, from a discretionary program to a
formula program under MAP-21, was accompanied by a decrease of
the funding base by more than 50 percent.
Following passage of MAP-21, one of the most frequent
comments FTA received from transit agencies and localities,
especially in smaller- and medium-sized urban areas, was that
the new Bus and Bus Facilities formula program does not provide
the necessary funding to recapitalize their systems and the
lack of any supplemental discretionary program limits their
ability to undertake nonroutine large investments, such as bus
facilities.
GROW AMERICA proposes to substantially increase funding for
the Bus and Bus Facilities program (from $428 million to over
$1.9 billion annually) to address the needs issue that you
raise first. With respect to the second issue, GROW AMERICA
proposes to reintroduce a discretionary element to the program,
with 30 percent of the $1.9 billion available through a
competitive process with the remaining 70 percent distributed
by formula. A discretionary program would permit FTA to direct
funding for these larger one-time investments that cannot be
solely funded through a formula to transit agencies at the
point in time the funding is needed.
Q.13. The discretionary grant program that both GROW AMERICA
and the APTA proposal include is simply that, discretionary.
These proposals do not include specific criteria or rules for
distribution of the resources.
What assurances would transit agencies have that
discretionary funds would not be broken into ``mini-grant''
programs or initiatives that target specific policy
preferences? Such preferences render some systems ineligible
for funding as we saw with ``Ladders of Opportunity,'' ``Bus
Livability,'' ``Urban Partnership Program,'' ``Veterans
Transportation and Community Living,'' ``Urban Circulator,''
and ``Transit Asset Management'' among others--all were created
using 5309 bus and bus facilities funding.
A.13. Although past discretionary programs had policy-focused
areas such as economic development, connecting communities,
state of good repair, and supporting veteran access to
transportation services; those policy objectives did not
eliminate any community from being eligible for the funding.
These needs exist across all communities and all transit
agencies were eligible to apply for the funds. Each of these
funding opportunities was well over subscribed. Under the bus
and bus facilities discretionary program proposed in GROW
AMERICA, FTA would ensure resources are targeted towards
communities that need nonroutine and often large investments,
such as bus facilities or fleet replacement, where annual
formula funds are insufficient to make this type of large one-
time purchase.
Q.14. The Capital Investment Grant (CIG) program is, as the
name implies, a capital intensive grant program but it is not
funded out of the Highway Trust Fund (HTF). Rather, CIG
projects rely on the annual appropriations process for funding.
However, this has not always been the case. The program has, in
the past, received funds from the HTF.
Given the significance of these projects and the associated
investment, is there a down side to funding this program out of
General Fund revenues rather than the Highway Trust Fund?
What are the pros and cons, in your view, to the current
funding structure for this program?
A.14. The President's Fiscal Year 2016 Budget and the GROW
AMERICA Act propose that all authorized transit programs,
including Capital Investment Grants, be funded with contract
authority and not subject to the annual appropriations process
to increase predictability in funding. Contract authority is
predictable in that it is authorized in advance through a
reauthorization bill enacted by Congress and allows for better
planning of projects.
The FY16 Budget and GROW AMERICA Act propose an increase in
the authorization level provided to the CIG program, requesting
$3,250,000,000 in fiscal year 2016.
Q.15. If it is most appropriate to rely on the annual
appropriations process to fund the Capital Investment Grant
program, can the same be said for other capital intensive grant
programs, such as a bus and bus facilities grant program?
Please provide a detailed explanation.
A.15. No, as stated above in Question 14, the Administration is
proposing that all authorized transit programs, including the
Capital Investment Grants and Bus and Bus Facilities programs,
be funded with contract authority and not subject to the annual
appropriations process to increase predictability in funding.
Q.16. Over the last several years, there has been a substantial
increase in the number of vehicles purchased through the
Research program--specifically for the demonstration and
deployment of no or low-emission vehicles. That said, while
these vehicles are being purchased with Federal funding and
subsequently integrated into a system's fleet, they are still
being tested to demonstrate their ability to withstand the
rigors of regular service and fleet integration. Does FTA
differentiate between the deployment of ``demonstration-type''
vehicles and ``proven'' vehicles when granting Federal funding?
If so, how?
A.16. Research, in the Federal context, is an iterative process
that takes an innovative idea, thoroughly develops and studies
it, then demonstrates its feasibility in a real-world
environment, and, if the concept proves itself, ultimately
takes it to deployment within the industry. FTA's research
program encompasses all aspects of this cycle, from proof of
concept to commercialization, and supports, where appropriate,
through funding and technical assistance, both demonstrations
of new technologies and deployment of new, proven technologies.
With respect to the ``Low or No Emission Vehicle Deployment
Program'' (LoNo Program) as described in 49 U.S.C. 5312
paragraph (d)(5), FTA understood the law to support and focus
on the deployment phase of this cycle and implemented the
program as such.
Proven technology, in the case of the deployment phase of
the research, is not defined in the same way as off-the-shelf
equipment. The difference is that there is a long history of
experience with off-the-shelf equipment, whereas, proven
technologies may still be new enough to the industry that their
operational capabilities are not well or fully understood. Off-
the-shelf equipment, rolling stock and technology are eligible
under FTA's formula and traditional capital grant programs.
Q.17. Do grantees have more flexibility after purchasing
``demonstration-type'' vehicles in terms of how the vehicles
are used and integrated in their fleets; do the traditional
rolling stock requirements apply? Please explain.
A.17. ``Demonstration-type'' vehicles and other technologies
are ones that show promise but that haven't reached the point
where they might be confidently commercialized or used in
everyday, revenue service. To use more common engineering
language, this could be described as the ``prototype and
evaluation'' stage. FTA works closely with transit operators
who have the technical capacity and willingness to demonstrate
new technologies in real-world environments. FTA seeks out
agencies that are willing to partner in this regard but it is
ultimately their decision to acquire and integrate these
vehicles into their operations. For procurement of equipment
for demonstrations, the FTA rules that apply to any equipment
purchase with Federal grants (Buy America requirements, useful
life rules, etc.), apply here as well.
Q.18. Are grantees provided opportunities through the program
or otherwise to refresh or even upgrade the vehicle's
technology either during a vehicle overhaul or as it becomes
available? Please explain.
A.18. Once a new technology ``becomes available'' in a
commercial sense, FTA grantees have the opportunity to purchase
it with formula funds. FTA might also further assist in the
acquisition of new technologies by providing technical
assistance on ways of using and integrating new technologies,
explore innovative asset management and financing strategies
(e.g., public-private partnerships, technology leasing
agreements, etc.) and provide a level of confidence to grantees
seeking new technologies through such means as our Bus Testing
program and wider dissemination of our technology evaluations.
Q.19. Would, in your opinion, greater flexibility in the
demonstration/deployment of new technology for rolling stock or
other capital investments do more to advance cutting edge
technologies in the transit space? Please explain.
A.19. With appropriate FTA oversight, greater program
flexibility would allow for more technology innovation,
improved products and enhanced transit services, especially in
a time where advances in technology and service provision are
transforming the nature of surface transportation. With the
advent of ``on-demand'' technologies, the emergence of
automation in various forms, and the evolving preferences of
today's travelers, seamless, safe, multimodal, environmentally
sound transportation is becoming a reality. Transit has a major
role in this new paradigm and developing and deploying the
practices and technologies involved in this innovative model
require flexibility.
Q.20. Does FTA currently have the authority to provide this
flexibility?
A.20. On a case by case basis, FTA has the authority to issue
waivers on certain rules and requirements as needed. For
example, FTA issued a program-specific Buy America waiver for
the National Fuel Cell Bus Program in 2008. FTA acknowledges
its important role to provide oversight of Federal funds and to
ensure that federally funded programs comply with the law.
------
RESPONSES TO WRITTEN QUESTIONS OF SENATOR BROWN
FROM THERESE W. MCMILLAN
Q.1. Under current Buy America regulations, does the steel and
iron used to produce transit rolling stock, i.e., buses and
rail cars, need to be of domestic origin? Is it the experience
of the Federal Transit Administration (FTA) that the frames for
transit rolling stock are generally made of domestic or foreign
materials?
A.1. The requirement in 49 CFR 661.5(b) that all steel and iron
manufacturing processes take place in the United States applies
to construction materials primarily made of steel or iron, such
as structural steel or iron beams, columns, and running rail.
As set forth in section 661.5(c), the requirements do not apply
to steel or iron used as components or subcomponents of other
manufactured products or rolling stock.
FTA does not specifically track whether the frames for
transit rolling stock are made of domestic or foreign material.
Pursuant to statute, the cost of rolling stock components
produced in the United States must be more than 60 percent of
the cost of all components, and final assembly of the rolling
stock must take place in the United States. How a rolling stock
manufacturer apportions its domestic and foreign components to
comply with this requirement is at the discretion of the
manufacturer.
Anecdotally, FTA is aware that several rolling stock
manufacturers import finished shells and frames to the United
States.
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RESPONSES TO WRITTEN QUESTIONS OF SENATOR VITTER
FROM THERESE W. MCMILLAN
Q.1. In your testimony, you stated, ``In 2014, Americans took
10.8 billion trips on transit--the highest annual ridership
number since 1957.'' Transit continues to receive the largest
Federal subsidy among all modes of passenger transportation--
highways, passenger rail, transit, and air--and that figure is
projected to grow over the next several years. What steps is
your agency taking to aggressively pursue privatization or
public-private partnerships for transit-system operations in
those cities and/or regions that require the highest Federal
subsidy?
A.1. In 2014, FTA provided technical assistance to grantees in
the form of a series of public-private partnership workshops
and created a private sector participation Web page that
includes fact sheets, questions and answers, studies, best
practices, and sample model public-private partnership
contracts. See http://www.fta.dot.gov/grants/16030_16036.html.
FTA's Joint Development circular, issued in 2014, clarifies
for recipients and developers the process for incorporating
private investment in transit facilities with Federal funding.
FTA is drafting a rulemaking to identify impediments to and
facilitate the increased use of public-private partnerships and
private investment. This Notice of Proposed Rulemaking (NPRM)
is expected to publish for public comment by the end of 2015.
Additionally, the Department of Transportation created the
Build America Transportation Investment Center to increase
infrastructure investment and economic growth by engaging with
State and local governments and private sector investors to
encourage collaboration, expand the market for public-private
partnerships and put Federal credit programs to greater use.
See more at: http://www.dot.gov/buildamerica.
Q.2. In your testimony, you stated, ``FTA held an Online
Dialogue with stakeholders on Public-Private Partnerships in
January 2015, and is using the information learned to develop a
NPRM on Public-Private Partnerships. We expect this rulemaking
to address major barriers to utilizing this financing method,
and propose methods to ease and encourage their use.'' When do
you expect your agency to publish those rules? What models of
public-private partnerships is FTA currently considering?
A.2. FTA anticipates publishing the notice of proposed
rulemaking by the end of calendar year 2015. FTA published the
RTD-Denver Eagle P3 Concession Agreement on its public-private
partnership Web page (http://www.fta.dot.gov/grants/
16030_16036.html), which FTA considers to be one model for
structuring public-private partnership contracts. This
information can help guide local transit agencies in their
decision-making process of determining how to deliver a transit
project using design-build contracting methods.
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RESPONSES TO WRITTEN QUESTIONS OF SENATOR KIRK
FROM THERESE W. MCMILLAN
Q.1. Core Capacity: Three years ago, this Committee authorized
a new category of projects called Core Capacity to be eligible
for the Federal Transit Administration's (FTA) Section 5309
Capital Investment Grant Program in MAP-21. This program is
critical for aging transit systems, including the Chicago
Transit Authority, looking to compete for Federal funding to
modernize their infrastructure on existing transit lines by
extending platforms, modernizing signals, adding infill
stations or laying new track within their existing footprint to
meet growing demand.
The Administration has signaled its support for these
projects by including support for core capacity in its FY16
Budget Request. As public transit ridership continues to grow,
especially in urban areas like Chicago, how does the
Administration see this program and other FTA initiatives
working to improve our legacy transit systems?
What are the agency's plans for the program?
How will the FTA use projects like the CTA's Red and Purple
Line Modernization as an example going forward?
A.1. FTA was very pleased to see the addition of the Core
Capacity eligibility under the Capital Investment Grant program
because we know there is great demand around the country for
capacity improvements to existing transit infrastructure that
is heavily utilized. That is why we have recommended funding in
each of the past 3 years' budgets for the program, including
$351 million in our FY2016 budget proposal. We now have four
core capacity projects in the program, with three more that
have applied to enter.
Since passage of MAP-21, FTA has been meeting with the
industry to determine how best to implement the core capacity
provisions. Through ongoing dialogue with transit agencies such
as CTA, NYMTA, CalTrain, BART, and others, we developed
proposals for implementation of core capacity that were
published in April 2015 for public comment. Our proposals are
based on industry research, include easy to calculate criteria,
and that recognize these projects are located in highly
traveled transit corridors. The feedback from project sponsors
like CTA has been invaluable as we work to implement this
important new eligibility.
Q.2. State of Good Repair (P3 Pilot Program): As evidenced by a
national $86 billion maintenance backlog, returning our
transportation assets to a state of good repair is a top
priority. Growing public transit infrastructure backlogs in
cities like Chicago, Boston, Philadelphia, and New York,
continue to be a serious issue. To help tackle these
challenges, MAP-21 created a pilot program for ``Expedited
Project Delivery'' to determine if ``innovative project
development and delivery methods or innovative financing
arrangements'' can be used to expedite project delivery. If a
transit agency is selected for the pilot program, it can
receive Federal money earlier in the FTA process than usual
transit projects. However, MAP-21 specified that in order for a
transit agency to eligible to participate in the pilot, an
agency must first be in a state of good repair. This presents a
significant challenge as the majority of transit agencies face
a growing backlog of maintenance and capital projects.
What is the current status of this program's
implementation?
In a world of constrained resources, do you believe public-
private partnerships programs such as this effectively
accelerate project delivery and help transit systems attain a
state of good repair? Why or why not?
Does the FTA have recommendations to make the program more
cost effective for the taxpayer while also expanding its reach
to transit agencies that are not in a state of good repair?
A.2. The Pilot Program for Expedited Project Delivery as
written in MAP-21 is limited to projects in the Capital
Investment Grant (CIG) program, including New Starts, Small
Starts, and Core Capacity. However, the law does not exempt
projects in the pilot program from the evaluation and rating
process required under the CIG program, the only source of
funding the pilot can draw from, as the law also did not
provide a separate pot of funding for which they would be
eligible. The Pilot also requires the project sponsors selected
for the program to develop a before and after study one year
sooner than would otherwise be required under the CIG program.
These requirements have led to challenges implementing the
pilot program and outlining its advantages to the industry. The
law appears to impose more requirements on these pilot
projects, not fewer, which may prevent the industry from
expressing much interest. FTA has been soliciting input and
ideas from the industry on the pilot program at various CIG
workshops given over the past 2 years, and we expect to put
forth some proposals to implement the pilot soon.
FTA believes Public-Private Partnerships are a tool that
can be used to implement projects more quickly than they might
otherwise if funded by the public sector on a pay-as-you-go
approach. The private sector provides much needed capital and
borrowing power up front to allow for quicker implementation,
which gets repaid over time by the public sector through long-
term availability payments. Previous experience has indicated
to FTA that project sponsors typically utilize private sector
partnerships for capital projects, which do not necessarily
address state of good repair needs--but typically expand
transit systems.
Q.3. In your testimony, you discussed an upcoming Notice of
Proposed Rulemaking (NPRM) for Public-Private Partnerships to
address major barriers to utilizing innovative financing and
attracting more private capital.
What feedback did you receive from the FTA Online Dialogue
that spurred this rulemaking process?
A.3. Section 20013(b) of MAP-21 requires FTA to issue a rule on
Public-Private Partnerships, identifying barriers to use, and
suggesting possible administrative changes to promote
utilization.
FTA decided to conduct the Online Dialogue, which covered
more topics than just barriers, to help inform the required
rulemaking process. The Online Dialogue comments that touched
upon barriers to public-private partnerships were consistent
with what was identified in the 2009 Government Accountability
Office report entitled Federal Project Approval Process Remains
a Barrier to Greater Private Sector Role and DOT Could Enhance
Efforts to Assist Project Sponsors.
Q.4. What barriers does the FTA believe currently exist that
hinder the utilization of public-private partnerships?
A.4. FTA is in the process of identifying barriers as part of
the NPRM process, and the rule will contain more details.
However, we do know that barriers typically fall into several
broad categories, and include the sequential process of the
Capital Investment Grants program, permitting timelines, NEPA
requirements vs. categorical exclusions, and the transfer of
both financial risk, and project delivery risks.
Q.5. When does the FTA expect to issue the NPRM?
A.5. FTA expects to issue the NPRM by the end of calendar year
2015.
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RESPONSES TO WRITTEN QUESTIONS OF
SENATOR MENENDEZ FROM THERESE W. MCMILLAN
Q.1. Your testimony notes that the administration is moving
ahead with a proposed rulemaking regarding public-private
partnerships. Given our investment needs, it's important that
we leverage private sector capital when appropriate. But it's
also worth noting that private sector involvement is not a
panacea. It can complement, but not replace existing Federal
funding--and any private sector participation still has to be
subject to public sector oversight, which comes with its own
costs. It's also critical that we maintain existing protections
for our workers. In particular, the outsourcing of operations
and maintenance functions in transit P3s has a checkered
history. According to the Government Accountability Office,
savings related to the contracting out of transit operations
and maintenance service are often derived through diminished
wages and benefits to workers, not through service delivery.
As FTA works to put together this new rulemaking, can you
assure me that you won't take any actions that would undermine
our existing workforce protections?
A.1. Yes, Senator Menendez, I can assure you that FTA will not
take any actions that would undermine existing workforce
protections while utilizing public-private partnerships.
Section 20013(b) of MAP-21 provides that the Secretary, and
therefore FTA, has no authority to waive the provisions of 49
U.S.C. 5333, which are the labor protection provisions.