[Senate Hearing 114-96]
[From the U.S. Government Publishing Office]



                                                         S. Hrg. 114-96

 
 SURFACE TRANSPORTATION REAUTHORIZATION: BUILDING ON THE SUCCESSES OF 
MAP-21 TO DELIVER SAFE, EFFICIENT, AND EFFECTIVE PUBLIC TRANSPORTATION 
                     SERVICES AND PROJECTS-PART II

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

                                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 23, 2015

                               __________

  Printed for the use of the Committee on Banking, Housing, and Urban Affairs
  
  
  
  
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                          Available at: http://www.fdsys.gov/              
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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

          Homer Carlisle, Democratic Professional Staff Member

              Phil Rudd, Democratic Legislative Assistant

                       Dawn Ratliff, Chief Clerk

                      Troy Cornell, Hearing Clerk

                      Shelvin Simmons, IT Director

                          Jim Crowell, Editor

                                  (ii)
                                  
                                  


                            C O N T E N T S

                              ----------                              

                        THURSDAY, APRIL 23, 2015

                                                                   Page

Opening statement of Chairman Shelby.............................     1

Opening statements, comments, or prepared statements of:
    Senator Brown................................................     1
    Senator Rounds...............................................     3
    Senator Menendez
        Prepared statement.......................................    28

                               WITNESSES

Janet F. Kavinoky, Executive Director, Transportation and 
  Infrastructure, U.S. Chamber of Commerce.......................     3
    Prepared statement...........................................    28
Michael P. Melaniphy, President and Chief Executive Officer, 
  American Public Transportation Association.....................     5
    Prepared statement...........................................    35
Barbara K. Cline, Upper Midwest Regional Director, Community 
  Transportation Association of America..........................     7
    Prepared statement...........................................    43
    Responses to written questions of:
        Chairman Shelby..........................................    51
Harry Lombardo, International President, Transport Workers Union 
  of America, AFL-CIO............................................     8
    Prepared statement...........................................    47

                                 (iii)
                                 
                                 
                                 
                                 


 SURFACE TRANSPORTATION REAUTHORIZATION: BUILDING ON THE SUCCESSES OF 
MAP-21 TO DELIVER SAFE, EFFICIENT, AND EFFECTIVE PUBLIC TRANSPORTATION 
                     SERVICES AND PROJECTS--PART II

                              ----------                              


                        THURSDAY, APRIL 23, 2015

                                       U.S. Senate,
          Committee on Banking, Housing, and Urban Affairs,
                                                    Washington, DC.
    The Committee met at 10:01 a.m., in room SD-538, Dirksen 
Senate Office Building, Hon. Richard C. Shelby, Chairman of the 
Committee, presiding.

        OPENING STATEMENT OF CHAIRMAN RICHARD C. SHELBY

    Chairman Shelby. The hearing will come to order.
    On Tuesday, Acting Administrator Therese McMillan testified 
before the Committee on the reauthorization of MAP-21. Today, 
we will hear from four panelists representing a broad cross-
section of businesses, industry, and labor impacted by MAP-21.
    A long-term reauthorization bill will provide certainty and 
stability to communities and their citizens as well as business 
and industry. Any reauthorization proposal Congress considers 
must be fiscally responsible and balance spending needs with 
long-term sustainability, flexibility, and innovation.
    This morning, I look forward to hearing from our panelists 
on these issues, but first, I will recognize my colleague, 
Senator Brown.

               STATEMENT OF SENATOR SHERROD BROWN

    Senator Brown. Thank you, Mr. Chairman.
    I think Tuesday's hearing, just 2 days ago, with Acting 
Administrator McMillan was a good start to our Committee's work 
on the next transportation bill. I look forward to further 
discussion to the key issues raised on Tuesday with our 
witnesses today and thank the four of you for joining us.
    I was struck on Tuesday by the discussion of the huge 
backlog of repairs that we face. DOT has made a compelling case 
that our Nation's public transportation providers face a 
tremendous challenge with aging facilities and vehicles. 
Eighty-six billion dollars is the number arrived at of 
unaddressed repairs. It is a huge deficit. Without new 
investment, that national backlog grows by $2.5 billion every 
year.
    MAP-21 set FTA on a path to help transit agencies better 
manage their systems with a new national standard for measuring 
the condition of their facilities and vehicles. This attention 
to asset management will pay dividends in the years ahead, 
particularly in regard to the flexibility and reliability of 
our systems. But, better measurement alone obviously does not 
fix things.
    We know reliability is an issue. On Tuesday, we heard from 
Senators Warren and Warner about how the reliability of the 
transit systems in Boston and Washington have suffered because 
of age and underinvestment, and those particular agencies have 
been tested further by the extreme winter weather in Boston and 
the tragic safety failure at Washington's L'Enfant Plaza. We 
need for every transit system to be able to offer reliable 
service for a low-income worker traveling between one or more 
jobs, getting home or picking up a child, or even going to the 
grocery store and getting decent food, is essential. We talked 
about that at some length at the hearing.
    On the safety front, I am looking forward to working with 
Chairman Shelby to review FTA's safety program under MAP-21 to 
ensure that it has the tools needed and that safety gaps 
identified in accident investigations are being addressed.
    But, as we talk about issues of repair and new projects, I 
hope our Committee does not lose focus that the most pressing 
issue facing our transportation system is the flat, unstable 
funding that Congress has delivered, for want of a better term. 
Since 2009, our Safe Service Transportation Program has been 
operating under short-term extensions. I mean, how do any of 
you, any of us plan for that with States and local governments. 
Federal funding has been flat except for small increases for 
inflation under MAP-21. The Highway Trust Fund faces a 
shortfall again this year. And, to think back, 11 short-term 
extensions should be pretty embarrassing to all of us.
    Within transit programs, the failure of the Federal 
Government to keep up with transportation needs has clear 
consequences. First, the Nation's transit agencies are going to 
fall further behind and will not meet the demand for service if 
we do not invest in new capacity and repairs both. Between 1995 
and 2014, transit ridership increased almost 40 percent and our 
population increased about 20 percent. That means we need to 
put the Mass Transit Account and the New Starts Program on a 
much better trajectory with new funding.
    Tuesday, we heard about the need to review MAP-21's bus 
funding. That will be addressed again today. Our Committee 
could look at a formula or competitive programs for buses for 
the next bill. But, unless the baseline funding grows, there 
will be no means to buy buses.
    Finally, when Congress fails to invest in transportation, 
we just do not fail commuters, we are wasting an opportunity to 
move our economy ahead, and particularly in manufacturing and 
construction.
    Thank you, Mr. Chairman.
    Chairman Shelby. We want to welcome all of our witnesses to 
the Committee this morning.
    First, we will hear the testimony of Ms. Janet Kavinoky, 
the Executive Director of Transportation and Infrastructure for 
the U.S. Chamber of Commerce.
    Next, we will hear from Mr. Michael Melaniphy, the 
President and CEO of American Public Transportation 
Association.
    At this time, I want to yield to Senator Rounds. I think he 
wants to make this next introduction.

                STATEMENT OF SENATOR MIKE ROUNDS

    Senator Rounds. I would, and thank you very much, Mr. 
Chairman. I appreciate that.
    We have a citizen of South Dakota here with us today and I 
think she brings something very special as a message. I am 
happy to be at this hearing today and to introduce Barbara 
Cline from Spearfish, South Dakota. Barb is the Executive 
Director of the Prairie Hills Transit and is the Upper Midwest 
Regional Director for the Community Transportation Association.
    For decades, Barb has been a leader in expanding access to 
affordable rural transportation. Barb is focused on expanding 
transportation for senior citizens and individuals who are 
living with a disability but who wish to live independently and 
need a reliable source of transportation to get to doctors' 
appointments, recreational activities, or simply to run daily 
errands. Barb has a wealth of knowledge regarding how rural 
transportation systems rely on Federal funds to expand their 
services and continue to be reliable sources of transportation 
for those who depend on them.
    I would like to thank the Chairman for inviting her to 
testify here today and I look forward to hearing her testimony. 
Welcome.
    Chairman Shelby. Thank you, Senator Rounds.
    Senator Rounds. Thank you, Mr. Chairman.
    Chairman Shelby. Finally, we will hear from Mr. Harry 
Lombardo, the International President of the Transport Workers 
Union of America.
    We will start with you, ma'am. All of your written 
testimony will be made part of the hearing record. Please 
proceed.

      STATEMENT OF JANET F. KAVINOKY, EXECUTIVE DIRECTOR, 
  TRANSPORTATION AND INFRASTRUCTURE, U.S. CHAMBER OF COMMERCE

    Ms. Kavinoky. Thank you, Mr. Chairman, and thank you for 
the opportunity to testify on the importance of public 
transportation to the Nation's economy and businesses.
    The Chamber's Jobs, Growth, and Opportunity Agenda 
prioritizes transportation because a first-rate national system 
is necessary to maintain a first-rate economy in the United 
States. A system with adequate capacity and high quality of 
service is strongly correlated with economic growth and 
increased foreign direct investment, which creates jobs in the 
United States. Failure to address transportation problems 
undermines our economic growth.
    Transit gets people to their jobs and helps grow the 
economy. It relieves traffic congestion, catalyzes economic 
development, and connects neighborhoods, communities, and 
regions. It transports people to health care appointments, 
school, recreation, and shopping, and it gives businesses the 
opportunity to reach customers. Let me offer a few examples.
    Houston's health care industry considers transit essential 
to improving the well-being of people in the region. Without 
transit, people may not receive the health care they need, or 
time stuck in traffic can lead to later missed appointments.
    Public transportation promotes U.S. exports, and yes, you 
heard that right. An export is typically thought of as freight 
that is boxed and loaded onto a ship or plane and bound for 
someplace outside of this country. But, international travel 
and tourism falls into the export category, as well. Transit 
addresses congestion and connectivity problems, and by 
providing options for visitors to get around, enables the U.S. 
travel and tourism industry to create even more jobs.
    Utah is a case study for the multiple benefits of transit. 
Expected population growth and geography made transit 
investments necessary for the Salt Lake City region, and 
businesses demanded them. The payoff has been big. Companies 
like Adobe, Microsoft, Vivint Solar, and Xactware chose to move 
into the area. Additionally, Goldman Sachs has increased its 
number of Salt Lake-based employees to 1,400, the second 
largest in the Americas. And eBay, which now employs 1,800 
people in the region, relocated and expanded its Utah 
operations adjacent to a new commuter rail station to have 
access to a larger workforce.
    Of course, passage of a long-term surface transportation 
bill would allow for more investments in rolling stock, rails, 
and new technologies that address traffic congestion, support 
mobility, and address transit issues with 21st century 
solutions, and this means jobs. For example, Xerox provides 
leading-edge technology systems and services for public 
transit, and transit-related manufacturers are located across 
the Nation.
    Public transportation is critical to a smooth functioning, 
efficient, and effective overall transportation network. 
Businesses place a high value on the mobility of their 
employees, customers, and supply chains, and it is long past 
the time when highways alone can serve the needs of business. 
We should not have a one-size-fits-all approach to 
transportation. Investments are needed as appropriate in roads, 
buses, fixed rail, and technology, and often the right answer 
to a transportation problem will include all of these options.
    MAP-21 was an excellent step toward ensuring that these 
decisions are made at the State and local levels of government 
while the Federal Government provides funding, maintains 
oversight, and assures transparency and accountability through 
performance measurement. Unfortunately, MAP-21 left the big 
question unanswered, and the issue of revenue for the Federal 
Highway Trust Fund has been a topic of nonstop debate, 
discussion, and hand-wringing since MAP-21 passed in 2012. It 
is time to stop talking and act.
    The Chamber supports revenue sources that are 
transportation-related, collected on an ongoing basis, 
structured to be sustainable and growing, adequate for full 
funding, or at a minimum, able to maintain funding levels, and 
collectable by the Federal Government. It is the Chamber's 
position that the simplest, most straightforward, elegant 
solution to the immediate problem we face is to increase the 
user fees going into the Highway Trust Fund. Adding a penny a 
month for a year and indexing the total user fee to inflation 
could support current services funding levels for the 
foreseeable future.
    And, yes, we know there is a need to look to other revenue 
sources. The vehicle fleet is becoming more fuel efficient. 
Driving patterns are changing. Construction costs typically 
grow faster than the Consumer Price Index. And multimodal 
transportation investment calls for more diversified sources of 
revenue.
    Likewise, the use of procurement approaches like public-
private partnerships to deliver more value and better allocate 
risk are needed.
    In conclusion, it should be evident that Federal investment 
in safe, reliable, efficient transportation systems is, quite 
simply, smart business. The Chamber looks forward to the day 
that Congress passes a long-term, fully funded bill that builds 
on MAP-21 and identifies necessary resources.
    Thank you for the opportunity to testify and I look forward 
to your questions.
    Chairman Shelby. Thank you.
    Mr. Melaniphy.

    STATEMENT OF MICHAEL P. MELANIPHY, PRESIDENT AND CHIEF 
 EXECUTIVE OFFICER, AMERICAN PUBLIC TRANSPORTATION ASSOCIATION

    Mr. Melaniphy. Chairman Shelby, Ranking Member Brown, and 
Members of the Committee thank you for the opportunity to 
testify this morning. I am Michael Melaniphy, President and CEO 
of the American Public Transportation Association, known as 
APTA.
    Federal investment in transportation is an investment in 
American jobs and global economic competitiveness. Public 
transportation gets people where they need to go and allows our 
highways to work better by reducing congestion. Public 
transportation is a catalyst for economic growth, shaping land 
use and development patterns, generating jobs, tax revenues, 
stimulating productivity gains.
    But, our systems are showing the strains of chronic 
underinvestment. This comes at a time when demand continues to 
grow in record numbers. In 2014, Americans took 10.8 billion 
trips on public transportation. That was the highest number of 
public transportation riders in 58 years. Record ridership does 
not just happen in large cities, either. Some of the biggest 
growth occurred in towns with less than 100,000 people in 
population. Some of them grew at more than twice the national 
average rate.
    But, this demand has strained our aging systems. U.S. DOT 
has cited an $86 billion backlog in public transportation State 
of Good Repair capital investment needs. And, this does not 
include the annual cost to maintain the current system, the 
cost of building new capacity, or the more than $3 billion in 
costs to install positive train control systems at our Nation's 
commuter railroads.
    Providing public transportation has always been a 
partnership involving Federal, State, and local governments, 
working with public and private sector stakeholders. Riders 
contribute through fares to the cost of operating systems. 
Federal funding supports more than 44 percent of transit 
capital spending, while States and localities support another 
32 percent of these costs.
    Rural States often rely more heavily on Federal funding 
than public transportation does in urban cities. Looking at 
Alabama, Idaho, Tennessee, Louisiana, South Carolina, South 
Dakota, and Kansas, which are represented by Members of this 
Committee, more than 46 percent of what they spend on transit 
comes from the Federal Government. In fact, almost 86 percent 
of the transit capital equipment purchased over a 5-year period 
was bought with Federal funds in those States. By comparison, 
the State of New York derives only 10.5 percent of their total 
transit funding from the Federal Government and 37.6 percent of 
their capital funding.
    The returns on this investment in capital public 
transportation are substantial. For every dollar invested, we 
generate about four dollars in economic benefits, and $1 
billion in Federal transit investment fosters productivity 
gains that create or sustain 50,000 jobs. Seventy-three percent 
of the Federal transit capital funds flow right through to the 
private sector.
    Many of these private sector jobs are high-wage 
manufacturing jobs in small and rural communities. For example, 
bus manufacturers have plants located in Alabama, North Dakota, 
Kansas, Minnesota, South Carolina, California, and upstate New 
York. Rail cars are manufactured in places like Nebraska, 
Idaho, Illinois, Pennsylvania, and upstate New York. And 
component and subcomponents are being manufactured all across 
the Nation.
    To maximize Federal investment, we need a long-term 
authorization bill with a dedicated funding mechanism that 
supplements existing revenues for the Highway Trust Fund and 
the Mass Transit Account. APTA urges Congress to enact a 6-
year, $100 billion bill to grow the transit program from $10.7 
billion to $22 billion by 2021. Our funding proposal is robust 
because our needs are real. The Highway Trust Fund revenues 
need to be increased to support program growth.
    Our proposal calls for increased funding for Capital 
Investment Grants, State of Good Repair, Bus and Bus 
Facilities, and Core Formula Programs, recognizing that large 
but infrequent bus capital projects are challenging to address 
with a limited formula program. APTA has recommended restoring 
a discretionary component to the bus program and boosting 
overall bus funding to pre-MAP-21 levels during the first 2 
years of the bill.
    The Federal program provides a platform for research 
standards and training programs where transit stakeholders face 
common challenges nationwide. To restore funding predictability 
to these programs, we recommend they be authorized as a set-
aside from the Urban Formula Program. This would improve annual 
funding certainty and maximize returns on this relatively 
modest investment.
    The current situation facing the Trust Fund has led to 
uncertainty, contributing to delays in capital investments and 
driving up project costs. APTA's recommendations reflect our 
belief that Federal funding in public transportation is a wise 
investment in American jobs, American communities, and American 
economic competitiveness.
    Thank you for the opportunity to present this morning. I 
look forward to further questions.
    Chairman Shelby. Thank you.
    Ms. Cline.

STATEMENT OF BARBARA K. CLINE, UPPER MIDWEST REGIONAL DIRECTOR, 
        COMMUNITY TRANSPORTATION ASSOCIATION OF AMERICA

    Ms. Cline. Chairman Shelby, Ranking Member Brown, and 
Members of the Committee, thank you for inviting me to appear 
before you today to discuss the Nation's surface transportation 
legislation, MAP-21, and how we can better deliver safe, 
efficient, and effective public transportation services.
    I appear before you today as Immediate Past President of 
the Community Transportation Association of America's Board of 
Directors, a national nonprofit association of more than 4,000 
members committed to improving mobility for all people. I also 
serve on the Board of Directors and was Past President of the 
Dakota Transit Association, representing both North and South 
Dakota, and am the Vice Chair of the Spearfish Area Chamber of 
Commerce.
    Today, I am the face of the Nation's often unseen public 
transportation network who could not be here with us, those 
systems in rural and small-urban areas who get people to work, 
to the doctor, to child care, school, or anywhere else they 
need to go. If you do not have a way home, we are your way.
    My day in rural transit begins early, as our drivers start 
taking people to life-saving care, like dialysis, where a 1-
hour one-way ride never leaves our 12,000-square mile service 
area. We take people home to Montana, Nebraska, North Dakota, 
and Wyoming. Once our service starts, I may be at a meeting 
with the largest hospital in Western South Dakota at lunchtime 
and briefing the City Council of Newell, population 600, after 
dinner. A place like Newell values the service we provide and 
contributes $1,000 a year to our matching funds. That may not 
sound like a lot here in Washington, but for a small town like 
Newell, that is a sizable amount.
    Mr. Chairman, we work in the part of America where giving 
all you can sometimes still is not enough. They cannot do it 
alone. That is why maintaining the partnership between the 
Federal Government, the States, counties, and local communities 
to support community and public transit is important. That 
partnership has helped a system like ours grow from the old 
green van in 1989 to 45 vehicles, 50 employees today serving 
six counties. It has helped rural transportation ridership grow 
by 40 percent since 2007 and small-urban areas increase their 
ridership by 40 million since 2010.
    Rural communities are the hardest hit in the Nation and 
increasing levels of isolation only make the cost of doing 
business out here even higher. Access to medical care means 
traveling further to reach a clinic or a specialist, sometimes 
out of the county or State.
    Congress demonstrated strong leadership in passing MAP-21, 
which increased investment in rural, urban, and specialized 
transportation formula programs. That investment is essential 
to help systems like Prairie Hills Transit do the job we are 
tasked with. However, those increases only kept pace with 
inflation while also incorporating funding from the streamlined 
JARC and New Freedom Programs. MAP-21 maintained what we had at 
a time when demand was skyrocketing. That makes it hard for 
systems like mine to expand service to medical care and new job 
sites.
    At the same time, MAP-21 was only a 2-year bill. The 
current extension is another 2 years at the same investment 
levels. These short-term authorizations make it difficult to 
budget for a new bus, a transit facility, Bus Rapid Transit, or 
a rail line. Those challenges were only magnified with MAP-21's 
robust systems, as the previous dedicated capital for buses and 
facilities was cut by more than half. Although increases in the 
formula programs were intended to bridge this gap, many 
systems, especially in rural and small-urban areas, use these 
funds for their operations.
    The impact of reductions in dedicated bus capital 
investment have been staggering. Although each State receives 
$1.25 million per year for rural bus replacement needs, that is 
barely enough to replace a handful of vehicles, let alone an 
entire State's capital backlog. Half the States receive less 
than $5 million per year. An intermediary lending program 
similar to the current TIFIA program could help rural and 
small-urban transit finance capital purchases.
    Our Department of Transportation estimates that $2.9 
million is needed each year for the next 8 years to adequately 
replace the rural bus fleet. South Dakota receives the $1.25 
million. For us at Prairie Hills Transit, our rural formula 
allocation under MAP-21 actually decreased. Most States are 
facing similar hardships. There is simply not enough money to 
go around.
    If current funding levels continue, it is possible systems 
will have to raise fares, cut service, or lay off employees 
while their costs still rise by running old buses, ones more 
likely to break down and less safe overall. I have heard of 
more than one example of a driver and their riders stuck on the 
side of the road in the snow and the wind because the bus had 
broken down. This is the reality of the crisis in bus capital 
under MAP-21.
    There are other key issues we would like to see addressed 
in the next authorization that are included in my written 
testimony that I ask be included in today's record.
    On behalf of the Community Transportation Association and 
its members, I urge you to authorize the Nation's surface 
transportation programs to ensure greater mobility.
    I thank you, Mr. Chairman, for today's opportunities. I 
would be glad to answer any questions you may have.
    Chairman Shelby. Mr. Lombardo.

STATEMENT OF HARRY LOMBARDO, INTERNATIONAL PRESIDENT, TRANSPORT 
               WORKERS UNION OF AMERICA, AFL-CIO

    Mr. Lombardo. Good morning, Mr. Chairman and Ranking Member 
Brown. On behalf of the Transport Workers Union of America and 
our 200,000 members and retirees, thank you for having me here 
today to testify on such a critical issue. To the Members of 
the Committee, I look forward to a positive discussion today.
    I am the ninth President of the Transport Workers Union of 
America and the TWU is a proud activist union. We have deep 
roots in our communities and a variety of industries in which 
we play an essential role in enhancing the quality of life of 
all Americans and our economy. We move America.
    From New York to San Francisco, should you ride a plane, 
train, bus, subway, and now even a bike, you are a beneficiary 
of our proud, hard working, well trained, and skilled members. 
Our members serve as the backbone of the transit, air, and rail 
systems in this country.
    I grew up in Philadelphia, and as a young man, I learned 
quickly you needed a backbone to move ahead. I became a member 
of TWU Local 234 as a car cleaner from SEPTA, our public 
transit system. I, like all young folks, wanted to participate 
in the American dream. I worked hard and I played by the rules 
and began to move up through the union. I was promoted to a 
rail mechanic, became a shop steward shortly thereafter, and 
just 5 years later became Business Agent. Now, I am the 
International President. This is, indeed, an amazing country.
    I am so proud to serve in this role because TWU has been 
the backbone of historic worker struggles on issues ranging 
from equality, human rights, civil rights, to workplace safety 
and working conditions. We believe all Americans are entitled 
to their piece of the American dream regardless of race, 
gender, sexual orientation, or creed. That dream is now at risk 
for those following in our footsteps because we are not 
upholding our responsibility to them to invest in their future. 
Where is our backbone? Where is our commitment to the future?
    Lack of infrastructure investment has horrendous 
consequences for the future of our country. Consider the 
following. Americans spend 5.5 million hours in traffic each 
year, which costs families more than $120 billion in extra fuel 
and lost time. American businesses pay $27 billion a year in 
extra freight transportation costs, increasing shipping delays, 
and raising prices on everyday products. And, by failing to 
invest, we are closing the door on our future.
    In addition and more importantly, we are passing this debt 
and this burden on to our kids and grandkids. We have an 
obligation here to give the next generation a better shot than 
the one we had. We cannot imperil future generations by failing 
to act now.
    Look, we all know the gravity of the situation we face, yet 
we have failed to have a backbone on this issue for over 20 
years. The time has come. We need to act. We need a long-term 
solution. We need to fund the program.
    We need to prioritize the health and safety of our 
workforce and improve working conditions. The increasing number 
of assaults on our operators has to be addressed. On average, 
there are over 200 reported physical assaults annually on bus 
operators in New York City and Philadelphia combined, and that 
is just two U.S. cities. These operator assaults cannot 
continue. Working class Americans should not go to work every 
day fearing for their safety on the job. The solutions are not 
difficult and we need this Congress to prioritize the safety of 
our riders and our operators by installing plexiglass barriers.
    We need to provide operating assistance on a temporary and 
targeted basis in addition to capital investment. We must 
provide the basic critical funding to this national priority. 
Operating cuts threaten public transportation systems and this 
Congress should not tolerate it.
    We have to both maintain our systems and modernize them. We 
need to stop thinking that public-private partnerships are a 
panacea for transit. In fact, in many cases, P3s threaten the 
public interest by undermining commitments to timely and safe 
transit service and to workers' wages and retirement security.
    I believe if we collectively have backbone and confront the 
problem, we can develop a bipartisan solution to invest in the 
future of America. So, I have a simple message here today. Let 
us find those on each side of the aisle with a backbone. Let us 
end this 20-year debate for a sustainable long-term solution 
and let us get America moving again.
    Once again, on behalf of our members, I thank you for 
having me and would be happy to answer any questions.
    Chairman Shelby. Thank you.
    I will direct my first question to Mr. Melaniphy. In her 
testimony on Tuesday, Ms. McMillan pointed out the $86 billion 
State of Good Repair backlog as the basis for a significant 
increase in State of Good Repair funding. Funding for this 
backlog, she suggested, must be balanced with funding for new 
and expanded service.
    I am of the belief that we should not invest in more 
infrastructure that cannot be maintained, particularly if the 
funding is going to be to the same systems that have the unmet 
State of Good Repair needs. In other words, we should keep up 
what we have first and then do--we need both.
    In the interest of ensuring that the traveling public is 
safe, should we, sir, not require systems to invest first in 
their State of Good Repair needs?
    Mr. Melaniphy. Mr. Chairman, thank you for that question. 
We absolutely must invest in State of Good Repair for this 
industry. We have fallen behind and we have seen the 
consequences of that in dependability, safety, and the 
opportunity to ride in a safe, dependable way.
    We do not operate in a static state. Our communities are 
growing. Our ridership is growing at record paces. So, we also 
must invest in core capacity so that we can accommodate those 
growing needs. There has to be a balance. There is no question 
we must invest in State of Good Repair, but we cannot ignore we 
have got communities that are growing. We have got a changing 
socio-economic pattern. We are seeing this repopulation of our 
downtown areas with Millennials and Baby Boomers moving back 
into our downtowns and changing travel patterns. So, there has 
to be a balance of investment in both new services and State of 
Good Repair.
    Chairman Shelby. But, we do have an acute need to maintain 
our system. I believe it was Senator Warren who was talking 
about the East. You know, they have had a lot of snow, they 
have had everything.
    Mr. Melaniphy. Yes, they did.
    Chairman Shelby. But, everywhere, we see potholes. We see 
other problems. We should do both, I agree with that. But, what 
should we do first?
    Mr. Melaniphy. When you have seen one transit system, you 
have seen one transit system----
    Chairman Shelby. Yes, I agree.
    Mr. Melaniphy. ----and as you look at what happened in 
Boston, you have some of the oldest systems in the country in 
the Northeast. And if you look to the West part of the country, 
we have got newer systems that have different needs and State 
of Good Repair and expansion. So, we have to look at each 
system on an individual basis, Mr. Chairman.
    Chairman Shelby. Is there value, sir, in having a State of 
Good Repair requirement tied to Federal investment in new or 
expanded systems? In other words, should project sponsors have 
to certify that their system is in a good state of repair 
before they are given Federal funding to build more?
    In other words, what if you had a big nice house and you 
let it go to the dogs, and then you went to the bank and said, 
well, I want to add on a kitchen and so forth. And they would 
look at it and the roof is leaking. It has not been painted in 
years. The sidewalk is crumbling. The plumbing is crumbling. 
They would say, what the heck, would they not?
    Mr. Melaniphy. I think the balance, Mr. Chairman, as was 
stated by Acting Administrator McMillan, we have an $86 billion 
backlog exclusive of the operating ongoing needs.
    Chairman Shelby. Mm-hmm.
    Mr. Melaniphy. We certainly encourage the Committee to 
invest an $86 billion 1-year investment to get us up to speed 
very quickly. The likelihood of that is probably not realistic 
in a 1-year hit. So, it will take a few years to make that 
investment to catch us up and I do not think that we should 
hold back investing in our overall systems to only get to 
there. But, having a match in there to make sure that people 
are investing in State of Good Repair and not delaying it or 
deferring it, I think is a worthy goal.
    Chairman Shelby. The Federal Transit Administration is 
widely considered to have the most stringent Buy America 
requirements of any Federal agency. Today, grantees must abide 
by a 60 percent domestic content requirement. This includes 
components and subcomponents. In spite of this robust 
requirement, the administration has proposed to increase the 
Buy America requirements for the Federal Transit Administration 
grantees to 100 percent by 2019, arguing that it will bring 
more manufacturers and suppliers to the U.S.
    Some of us have concerns about this approach, but we all 
want jobs in America. But, I want to hear from each of you 
about this proposal. We will start with you.
    Ms. Kavinoky. Thank you, Mr. Chairman. The U.S. Chamber of 
Commerce does not advocate either scaling back or expanding 
existing domestic source preferences for public works projects. 
To the extent that the mandates have already been built into 
the business operations of numerous affected industrial 
sectors, the market has adjusted. But, we are concerned since 
the U.S. already imposes significant Buy America requirements 
that this would cause companies to either relocate or not 
continue investing in the United States. We do think that there 
is--there needs to be continued opportunity for companies to 
work with their global supply chains to provide the best value 
for their customers in the system.
    Chairman Shelby. I think we all want to Buy America. We 
want to create jobs here. We want to--we believe America can do 
anything. But, we have got to be competitive, too.
    Go ahead, Mr. Melaniphy.
    Mr. Melaniphy. Thank you, Mr. Chairman. As someone who was 
a bus operator, a transit general manager, a bus manufacturer, 
and now represents the industry, I have views from many angles 
on this. Last year, there were 16.5 million cars sold in the 
U.S. In a good year, the total transit market from all bus 
suppliers is about 5,000 buses. We play in that same supply 
base.
    There is no question that the current Buy America 
requirements at 60 percent plus final assembly in the U.S. has 
absolutely driven investment in our country and requires there 
be a good supply base here. However, we must look at how we fit 
into the overall supply picture. Our bus and train 
manufacturers do not really make everything. They make the 
shells and they assemble the rest from supply base that, quite 
frankly, is a global supply base.
    Achieving 100 percent is not a realistic opportunity in 
this current space, and there is a reason there are no U.S. 
manufacturers of rail cars at all. All the rail car 
manufacturers are from around the world. Our base simply is not 
big enough, and having uncertainty in long-term funding makes 
that more challenging. And, as we look at the type of steel and 
the products we use, sometimes the quantity is not big enough 
to incentivize U.S. steel suppliers here in the U.S.
    So, we have to continue to push it. We think the current 
standard is a good one. It is sustainable and it drives U.S. 
jobs and we look forward to working with you in the future on 
it.
    Chairman Shelby. Ms. Cline, do you have anything to say?
    Ms. Cline. In South Dakota, in particular, I can speak most 
clearly, but because of the size service areas that we have, we 
do not have a specific vehicle that we use in every community. 
By having 100 percent Buy America and 98 percent American, it 
has really eliminated some of the vehicles that we found were 
most effective in our service area. We just cannot buy them 
anymore because they do not meet the requirements.
    Chairman Shelby. Mr. Lombardo.
    Mr. Lombardo. Well, I do not have the kind of data and 
experience that some of these others testifying have, but, sir, 
I am an advocate that every American should have an opportunity 
to get the best job they can----
    Chairman Shelby. Absolutely.
    Mr. Lombardo. ----and, therefore, if we can initiate Buy 
America, as many of our so-called competitors do in their own 
countries, I would support that.
    Chairman Shelby. Thank you.
    My last question for this round, public-private 
partnerships. Federal policies, I believe, should encourage 
private investment in transportation infrastructure in order to 
better leverage Federal investments and increase economic 
growth. We had testimony about this a couple of days ago. 
Public-private partnerships, or P3s, are one way to do this. 
And while they have been widely used for highway projects, the 
same is basically not true for public transportation projects. 
It seems to me like this is an avenue we could go down.
    Do you agree, and I will start with you, ma'am, that more 
private investment in transportation infrastructure projects is 
one way--perhaps not the only way--is one way that we can 
stretch limited Federal dollars we are talking about here and 
expedite project delivery? If it is true, why have we not seen 
more public transportation projects using P3s? Is there a 
downside to private investment, in other words?
    It looks to me like with the money, scarce money, we could 
leverage this. We do it in housing. We do it in health care and 
everything, but we have not done it here. I have seen what a 
subway stop would do to a blighted community, for example. It 
revitalizes it, and then the private sector starts, and the 
stores open. I have seen it everywhere. But, go ahead.
    Ms. Kavinoky. Sir, you make a very important point at the 
beginning, which is it is public-private partnerships are one 
way to make this happen. They are most definitely not a 
panacea. They are not a solution to funding problems.
    Chairman Shelby. No.
    Ms. Kavinoky. But, where they have been used, not just in 
the United States but the global experience with public-private 
partnerships is not so much about the money. I mean, yes, by 
doing a financing you can start projects sooner because you can 
raise the capital and realize those benefits over time, but 
where P3s have really thrived it is because they have actually 
brought value to projects. There is more innovation in 
technology that is brought into that.
    They also look at the life cycle. You talked about State of 
Good Repair, but most P3 projects do not just look at 
construction. They incorporate what the overall life cycle of a 
project will be and the costs of operations and maintenance.
    P3 projects in the U.K., there have been substantial 
studies that there, they have come in more on time and on 
budget, or under, because those things can be worked into 
contracts. And, yes, they can raise money today where we need 
it.
    I think one of the reasons that P3s have not been used as 
broadly in the United States, frankly, is because of the 
workforce. It takes a significant knowledge of financing and 
contracting that is very, very different than the skills that 
are in today's transit systems, State Departments of 
Transportation, and we need to build that kind of capacity to 
be able to do more complex projects. That is something I know 
APTA has worked with, with the Eno Foundation for 
Transportation and other organizations, so that we can have the 
transportation workers for the future who are able to look in 
different ways at P3s.
    Chairman Shelby. Yes, sir.
    Mr. Melaniphy. The international financing world that plays 
in the P3 space looks at the world on a global basis. They look 
about risk and where is risk best manageable. They look at 
countries like Canada and Australia, where they have a 
nationwide standard for P3 investments. Here in the U.S., our 
risk quotient is very high because we are a patchwork of 50 
different States of regulations, many of which--almost half--
prohibit P3-type projects.
    The one project that has worked very well----
    Chairman Shelby. Why? Is that politics and something they 
are used to?
    Mr. Melaniphy. I will not speak to the political question, 
Mr. Chairman.
    Chairman Shelby. OK.
    Mr. Melaniphy. We look at Denver's project, the largest P3 
in the U.S. and the biggest transit project. It was 11 
different funding mechanisms that went together to build that 
project. So, as we look at this mechanism, it is not just P3, 
and obviously you have to have a revenue stream to fund that. A 
bus garage does not generate a lot of revenue. It is not a 
great revenue stream to pay those things off.
    Chairman Shelby. Sure.
    Mr. Melaniphy. So, as we look at the type of project, it 
has to be the right match. We have to look at RRIF loans, TIFIA 
loans, municipal bonds. We have to look at all the different 
funding components we can put together. When we package those 
together, there are opportunities to leverage those and to be a 
better player in the P3 space.
    Chairman Shelby. Ms. Cline, do you have any comment?
    Ms. Cline. In my service area, we do not really have 
opportunities to work with the P3s, but one of the partnerships 
that we have developed has been with our regional hospital 
network, which is five different hospitals. They have engaged 
in a contract with us to provide all their discharge 
transportation. So, that is probably the biggest public-private 
transportation we have got.
    Chairman Shelby. Mr. Lombardo.
    Mr. Lombardo. Yes. Our union thinks that there is a place 
for some use of P3s. However, we have some very serious 
concerns in terms of protecting the work that our members do. 
In many situations, from what we have seen, privatization 
efforts, PC partnerships, lead to service cuts, they lead to 
revocation of collective bargaining agreements, lowering wages, 
elimination of pensions that people have worked 20, 30 years to 
collect, and there is conflict between public pensions and 
private 401(k)s. So, we think that, obviously, we should take a 
look at anything that may help, but we really have to make sure 
that it is not off the backs of quality service to our riders 
and the existing workforces.
    Chairman Shelby. Sure. Senator Brown, you have been very 
patient. Thank you.
    Senator Brown. Thank you, Mr. Chairman.
    Let me go back to Buy America. Mr. Lombardo, you started by 
saying, or in your comments you said that in other countries, 
they use Buy America and we seem to have some aversion to it in 
this Congress, and I guess I am not surprised by Ms. Kavinoky 
talking about the Chamber of Commerce's position on this 
because they have generally opposed those provisions as an 
organization in other kinds of public dollars.
    I think the first thing to do is put yourself in taxpayers' 
position when, as individual people in this country, we are 
spending taxpayer dollars and we buy Chinese steel to build a 
bridge in California, or we buy--we use textiles and apparel to 
make everything from American flags to uniforms, sometimes, 
that are made elsewhere but paid for by U.S. taxpayers. I mean, 
you have to start there, in the mindset there.
    Now, the 60 percent number, and I think that Mr. Melaniphy 
said something particularly interesting. He said that that has 
driven investment in the supply chain, if you will, because 
there is a certainty to this. I know that, Ms. Kavinoky, many 
business people, members of yours come to these Committees and 
talk about certainty. That is why you do not run the Government 
right up to the edge on paying off our bills and you want to 
see Eximbank reauthorized for 5 years, or you want to see a 
transportation bill for 6 years. All of those things, I very 
strongly agree with and we do not see this Congress acting that 
way very often, but how important that is.
    But, if we can build the certainty from 60 to get up to 100 
percent--and I know 100 is probably not quite attainable, and 
Mr. Melaniphy, we have had these conversations in my office 
about this and I appreciate your interest and your cooperation 
on it. But, my question is--and one more comment is Ms. 
McMillan, Administrator McMillan, when she was in, she 
suggested that there were names of companies she could give the 
Committee that have gotten into this space knowing that--into 
creating, into manufacturing something because they know there 
will be more Buy America provisions and that kind of 
investment. We then know we can actually do that in this 
country.
    So, my question for, Mr. Melaniphy, for you, is I just do 
not accept the argument that nothing can be done, that we 
cannot move from 60 to 70 to 80 to 90--again, 100 is very 
difficult, but that we cannot move that way. If you would, you 
can either get back to me on this or give us some thoughts now 
or both, if you would be willing to collect ideas from transit 
manufacturers about real steps to increase the use of domestic 
suppliers and identify components like steel where U.S. 
suppliers can step in. If you would commit to the Committee to 
begin to collect those ideas from, both from your manufacturers 
and from your Cleveland RTA and New York Subway System and 
SEPTA, where Mr. Lombardo started.
    Mr. Melaniphy. We are happy to do that for the Committee, 
Ranking Member Brown. A couple of things of note in your 
comments. Right now, in the bus space, we only have one 
domestic heavy-duty engine manufacturer, one, for everything. 
And the production that we are as part of their global space is 
a couple of days' production at one plant. We are minuscule in 
the overall space. So, our ability to influence that is, quite 
frankly, is challenging, and it goes for transmissions, axles, 
all those different components.
    And, we look at our production plants. They do not just 
build FTA-funded vehicles. They often build for Canada and 
private sector and others. So, mandating that they do 
everything to meet this mandate for a portion of what they do 
is challenging, but they certainly are endeavoring to do that. 
They continue to push. And, we see suppliers enhancing their 
space within the Buy America areas. We have got a couple of new 
manufacturers, some all domestic, some Chinese and from other 
countries that have come and set up plants in America to meet 
Buy America. So, it is something that we continue to push on.
    One of the things that we also work with, we worked with 
the FTA to work with Commerce and with NIST to find a greater 
supply base. If there are challenges in finding a domestic 
supplier, we have used NIST to help us find other suppliers 
that potentially would play in that space. But, again, it is 
volume and the predictability of a long-term funding bill helps 
to incentivize those companies to make the investments they 
need to build domestic product that they might not otherwise 
do.
    So, there are a couple of key points there. We will 
continue to work with them. We understand the initiative. 
Again, getting to 100 percent is realistically not possible. 
But, as we look at where we are at, we think 60 percent is a 
good dependable number.
    The last piece here is they build our factories, and I had 
factories under me for over 10 years. You often make agreements 
with your communities for tax incentives, for employment, for 
investment and capital, these other things, and if you have to 
take those jobs and take them out of that city, that country, 
that twin plant and you have got to move them somewhere else, 
you have violated those. So, we have to look at the volumes we 
generate of business and we do that through good long-term 
investment and capital. We look to the FTA and to the Congress 
to help make that funding possible.
    Senator Brown. Thank you, and if you could follow up.
    And, I think your comment about predictability is so 
important. If we are going to move from 60 to approaching 100 
percent made in America, and understanding the steel issues 
there, and I want to talk about that a second, then we need a 
long-term transportation bill where companies that decide to 
invest in new production, something they have not made before, 
obviously, they need to know that this is not a 6-month 
transportation bill.
    Understand, too, the threat in American steel, where 
China's steel capacity now has exceeded the steel capacity of 
the rest of the world combined and that is why there is so much 
dumping of Chinese steel in the United States today and will 
continue for some time, is their own market stagnates.
    Let me ask about safety. Acting Administrator McMillan was 
asked on Tuesday about safety standards for evacuation and 
communication and ventilation. Mr. Lombardo mentioned worker 
assaults, driver assaults. Would you, Mr. Lombardo, talk about 
what safety issues we should examine as we review FTA's safety 
authority under MAP-21.
    Mr. Lombardo. Well, our priority is, and has been for 
several years now, drivers' assaults. I mean, it is becoming 
epidemic. Our drivers are the front lines of any transit 
organization in any part of the country. Anytime transit 
services are bad, or, fares go up, the front-line person takes 
the brunt of the ridership's anger. To have, on average, 200 
people a year beat up, cut, it is not just an unsafe 
circumstance for our member, who is the operator, it is an 
unsafe circumstance for every rider that is on that vehicle or 
any driver that is driving an automobile in the proximity of 
that bus while that driver is being assaulted.
    And, one of the problems is that angry riders have too much 
access to the operator. It is not necessary access or one that 
interferes with the quality operation of the vehicle. They need 
to have protective screens so that they cannot be the scapegoat 
for every rider's anger, or any rider's anger.
    So, we over the years have participated in labor-management 
cooperative conferences in Philadelphia, in Pennsylvania, and 
in New York, and we have additionally worked hard to have the 
FTA convene a meeting here in Washington to discuss this 
problem.
    And, so, what we are looking for from reauthorization is 
that all new vehicles be required to have installed protective 
shields for the operators. I have traveled to the Scandinavian 
countries to look at the privatization experiments that are 
going on over there as well as safety for operators and I could 
not find a vehicle that did not have a shield for the operator 
to be protected, as well as a door for the operator to get out 
in the event that he or she was being assaulted.
    So, one of the things that we are looking for, right now, 
because of the cooperative work in New York City, New York City 
is retrofitting many, many buses with screens, and they have 
determined that it is a far cry cheaper to retrofit them with 
screens than to pay the medical expenses and the lost time that 
they are currently paying for because of these assaults. So, we 
would like to see in reauthorization a requirement that all new 
vehicles be manufactured so that they have protection for 
operators.
    Senator Brown. Thank you, Mr. Chairman.
    Chairman Shelby. Senator Warren.
    Senator Warren. Thank you, Mr. Chairman, and Mr. Lombardo, 
thank you very much for raising the issue of driver safety. 
Since you have talked about that, I will go to another 
question, then, that I wanted to ask about.
    Last year, Congress passed a short-term fix to the National 
Highway Trust Fund to keep it from becoming insolvent. It was a 
stop-gap measure that prevented repairs to our transportation 
infrastructure from grinding to a complete halt. And, while we 
all agree that we need a long-term solution, the constant 
challenge has been how we are going to pay for it.
    I support looking for new solutions, but I am very 
concerned about the assumption in some places that privatizing 
transit operations will save money. A GAO study on the impacts 
of privatization stated that, quote, ``savings come almost 
entirely from cutting wages and benefits, not from service 
efficiencies.'' In addition, this study reported that 
privatization can lead to reduced service quality. According to 
this study, safety is a particular concern, for example, with 
replacement drivers 70 percent more likely to have collisions, 
which, of course, is very costly.
    Mr. Lombardo, the Federal Government has historically 
remained neutral on whether to recommend privatizing services 
performed by public transit agencies. Do you believe that as we 
do the next reauthorization bill that the Government should 
continue this neutral approach?
    Mr. Lombardo. Yes.
    Senator Warren. Do you want to say more?
    Mr. Lombardo. Yes, I do. Indeed, I do. Yes. You know, the 
main goal of urban transportation policy should be to improve 
speed of movement, to make sure that it is safe, and that it is 
more and more convenient. When you have an unstable workforce, 
when you are not paying good wages, benefits so that the 
employee is invested in the job, invested in a career, you run 
the risk of having less experienced and less safe operators.
    I do not know what the current statistics may be, but some 
years back 60 percent of all accidents were with drivers who 
were on the job for less than 18 months. Our experience in 
privatized services, within the TWU, is that wages are cut, 
benefits are cut, pensions or defined benefit plans, which we 
are accustomed to in most places, are nonexistent with the 
private folks, and you have major turnovers in the employees, 
especially the operators.
    So, it is very--it is very important that when chasing the 
savings, that you are not penny-wise and dollar-foolish, 
because low wages, low benefits, and zero or no pensions does 
not lead any employee to believe that they have a career and a 
lifetime job ahead of them to attain the skills and commitment 
and determination to do the right job.
    So, yes, I believe we absolutely should continue with the 
neutral approach.
    Senator Warren. Well, I appreciate that. You know, I think 
it is clear that we need to address our long-term 
transportation funding issues, but in a manner that provides 
the same quality of service and that protects public safety. 
And, I just have not seen any convincing data that demonstrate 
that this can be accomplished through privatization.
    In Massachusetts, we test the efforts to outsource work 
with the Pachecho laws, which ensures that any outsourcing must 
cost less than the in-house cost of that service and that the 
outsourcing must maintain at least an equal quality of service. 
But, other parts of the country do not have that important 
safeguard. Maintaining high standards, particularly high safety 
standards, requires experienced and qualified workers and we 
should be strengthening and investing in our transit workers 
instead of targeting them for cuts that would cost us more in 
the long run.
    Thank you, Mr. Chairman.
    Chairman Shelby. Senator Menendez.
    Senator Menendez. Thank you, Mr. Chairman. I would ask that 
a statement that I have be entered into the record at this 
point.
    Chairman Shelby. Without objection, it is so ordered.
    Senator Menendez. Thank you, Mr. Chairman.
    President Lombardo, your testimony raises an interesting 
point, that transit workers who have decent wages and can make 
a long-term career for themselves are naturally going to be 
more invested in the long-term quality of the service they 
provide. This helps contribute to an overall safety culture 
with workers who can focus on doing their jobs well rather than 
worrying about how to support their families or where their 
next short-term job is going to come from. So, it seems to me 
that it is an essential complement to the safety programs this 
Committee authorized in MAP-21.
    You have spoken to the other elements that some of my 
colleagues have raised as it relates to privatization and 
worker protection, but can you speak to the importance of 
worker protections and morale in creating a safe transit 
service?
    Mr. Lombardo. Well, I will do my best. And, perhaps I am 
going to be redundant, but in today's world, the average 
American who just has a high school diploma, they need good 
quality work that they feel is satisfying and long-term. And, 
as I said earlier, the vast majority of transit accidents 
resulting in injury occur with operators who have less than 18 
months' experience on the job. Good benefits, good salaries 
provide people with the security to become more and more 
proficient and dedicated to their work. It goes hand-in-hand 
with the profession of a bus operator that you have greater 
experience, greater day-to-day opportunities to develop your 
skills and how to avoid accidents.
    Senator Menendez. Mm-hmm.
    Mr. Lombardo. In contrast, workers who are in and out of 
the workforce with varying employers, because you are 
attracting, quite frankly, you attract a different level of 
employee with lower wages and lower benefits.
    When I was a President in Philadelphia with a local and the 
unfunded mandate to provide paratransit service, we were just 
appalled a couple years into those programs when we learned 
that many operators--not many, but operators who were dismissed 
from our employer for random testing positives showed up a 
couple months later at the paratransit companies driving 
vehicles. So, the checks and balances for that is very short.
    Senator Menendez. I appreciate that. I think we always look 
to experience as an element of quality at the end of the day, 
and in this case, experience, to me, also equates to safety.
    Ms. Kavinoky, every year in northern New Jersey, New York, 
and Connecticut region, over four billion transit trips are 
taken, millions of those occurring along the Northeast Corridor 
transit and rail lines. We know that the studies that have been 
made, for example, by Amtrak say that the tunnels connecting 
New Jersey and New York will need to close due to age and 
damage from Hurricane Sandy. Closures of this magnitude would 
force an untold number of trips into already overcrowded 
roadways.
    So, given that the Northeast Corridor region produces 20 
percent, or $3.5 trillion, of the Nation's GDP, can you discuss 
the impact on business it would actually have to face the 
failure of taking some of these tunnels out of commission and 
the significance of that to business, not only in the region, 
but as part of the national economy.
    Ms. Kavinoky. Sure. Thank you very much, Senator, for that 
question. I had the opportunity this week to ride both Amtrak 
and New Jersey Transit with Mitch Warren, who is heading the 
Northeast Corridor Infrastructure Commission, and we talked 
about the critical nature of those tunnels up in the New York-
New Jersey area and the fact that you have businesses who are 
locating in one of the most economically vibrant areas of, 
well, the world, for that matter, and they rely on as much 
mobility and as many transportation options as possible.
    But, it is not just people who rely on mobility in that 
area. With the Port of New York-New Jersey and a significant 
amount of the Nation's freight coming in and out of that region 
and limited rail access, so a heavy reliance on roads, we can 
certainly see how the economy would be wildly gridlocked in the 
event that that problem is not dealt with.
    Now, the U.S. Chamber does not engage in specific project-
related issues, but I think it is clear and it is very obvious 
that that is a critical node in the entire Nation's 
transportation system.
    Senator Menendez. And I appreciate your answer. To me, it 
goes to the question, and there are, I am sure, other parts of 
the country like this, in which projects of national 
significance have a real consequence and they are of a 
magnitude that you cannot put a patchwork of different funding 
sources and try to figure out how you construct new tunnels 
under the Hudson River and the Portal Bridge that is a 100-
year-old bridge that constantly breaks down and stops the whole 
Northeast Corridor from moving and businesses from sending 
their sales forces and getting their employees to work or to 
their prospective customers or existing customers. So, it is 
critically important.
    I appreciate the answer, Mr. Chairman.
    Chairman Shelby. I have one more question. Regional 
differences----
    Senator Brown. Mr. Chairman----
    Chairman Shelby. Oh, excuse me. Excuse me, Senator. I was 
getting ahead of myself, and I knew you were there. I 
apologize.
    Senator Donnelly. You thought I was the cameraman, did you 
not?
    [Laughter.]
    Chairman Shelby. No, no.
    Senator Brown. For the third straight----
    Chairman Shelby. You are in and out sometimes. You are 
recognized.
    [Laughter.]
    Senator Donnelly. Thank you, Mr. Chairman----
    Senator Brown. There will be time when you will move more 
this way.
    [Laughter.]
    Chairman Shelby. I sat over there a long time----
    Senator Donnelly. I have a deep affection for the Chairman. 
Thank you very much. I think it is primarily because I do not 
root for Alabama when they play Notre Dame, is my belief in 
that.
    Chairman Shelby. Do not ever do that.
    [Laughter.]
    Senator Donnelly. Mr. Lombardo, maybe it is because I am 
getting a little bit older, but I remember a time when we would 
go to church with my folks and the transit workers would come 
to church in their uniforms on Sunday morning, and the Postal 
workers would come in in their uniforms, and the police and the 
fire, and there was a great respect and appreciation for all of 
those folks. And, so, one of the things I think we have lost is 
the understanding that when we denigrate people and try to chop 
their wages all the time and try to make it more difficult for 
them to take pride in their career, it has an effect on the 
whole service, do you not think?
    Mr. Lombardo. Indeed, I think it has an impact on the whole 
service. Just the struggles we have been going through these 
last couple of years with this epidemic of assaults, it has 
taken a tremendous effort to just get to where we are that 
people are beginning to recognize that it is a problem. So, 
when it takes so long, when you are the operator pushing that 
bus or trolley car up and down the street every day and it has 
taken years just to start to get people to pay attention to the 
insecurity you feel every day on a vehicle, you better believe 
it is a distraction, and you better believe it creates an 
attitude that if the employer does not care about me, then I 
have to protect myself any way I can.
    Senator Donnelly. And when we run folks down, you know, 
when we see it in papers and we see it on radios and we see it 
on TV, and they create less of a value for those positions, it 
makes it so much more difficult for these men and women who 
are--that is how they feed their families. That is how they 
take care of their families. That is how they have the money to 
go on vacation and get a little bit nicer apartment. You know, 
it is different than it used to be and it needs--the positions 
need to have that same respect come back.
    I would just like to say, also, I come from a State that 
has a significant number of rural areas. A lot of what we do, 
there is transit for rural and small communities, particularly 
as it relates to health care. And, Ms. Cline, could you talk a 
little bit just about how essential Federal transit investments 
are to rural communities and what the lack of funding is doing 
in those areas.
    Ms. Cline. One of the biggest challenges that we are seeing 
with, I would say, reduced Federal funding, is that there are 
more and more needs for dialysis treatment, which is a life-
supporting treatment that people have to have 3 days a week. 
The other thing is that we need more and more vehicles that are 
specialized to provide transportation for people who have 
disabilities, especially those that are very large. And, 
without the Federal investment to purchase those new vehicles, 
replace those new vehicles, or not replace new vehicles, but to 
replace the old ones that we are using, we are not able to 
provide a safe and reliable transportation for those that are 
the most fragile, elderly, and in need.
    Federal dollars are a huge part of what our system does, 
and without that, we are not able to go to the cities, 
counties, and actually leverage the additional dollars that 
would match that----
    Senator Donnelly. One of the things that has bothered me 
over the last year or two, or, actually, over the last number 
of years, when people have even questioned whether the Federal 
Government has a role in building highways or in transportation 
systems, what everybody forgets is that, for me, my parents' 
generation built these systems and paid for these systems and 
my children are going to have to pay to fix these systems and 
to invest in new systems. And, we have an obligation here in 
the middle not just to ride on these systems, but to put them 
in the shape they should be in. We always say that part of the 
importance of what we do here in America is that to each next 
generation, we want to give it in a better shape and a stronger 
shape, and it goes to this subject, as well, I think.
    Another area we are seeing, and I just, Mr. Melaniphy, I 
just want to ask you real quick, we are seeing trend changes, 
too, and what I mean by that is when you look at public 
transportation, you are now seeing whole areas again being 
reconfigured that where the public transportation goes is where 
the suburbs are going up and where the towns are going up, and 
where it does not, that is where it starts to go away a little 
bit. Are you seeing this public transportation that we are 
seeing now becoming more and more important, and you see a lot 
of people heading back toward urban areas and areas where 
public transportation is. Do you see that to be a continuing 
trend?
    Mr. Melaniphy. Absolutely. As a proud Hoosier, I am happy 
to take your question.
    Senator Donnelly. I did know that you went to IU-
Bloomington and we are extraordinarily proud of you, as well.
    Mr. Melaniphy. I was Bobby Knight's bus driver, so this is 
where I started in the industry.
    Senator Donnelly. Well, that is a completely different form 
of public transportation.
    [Laughter.]
    Mr. Melaniphy. We are seeing huge demographic shifts. We 
used to take about, every 10 years, we would change our systems 
and address the bus routes to address changes in demographic 
make-up of our communities. We are having to do it about every 
3, 4 years now because we are seeing huge demographic shifts. 
We are seeing Millennials and Baby Boomers repopulating our 
downtown areas. We are seeing changes in our ridership, not 
just--in rural and urban both.
    If we look at the ridership in New York, the ridership on 
weekends is higher than it was on weekdays 15 years ago. People 
are changing how they are using our systems, and the young 
people are saying, I do not want to have a car. I want to have 
public transportation as options.
    We look at the radical changes in Indianapolis.
    Senator Donnelly. Right.
    Mr. Melaniphy. Huge change in how that city looks and what 
it looked like when I was there 25 years ago. We did a 
conference there. Huge change, incredible differences. Seven-
hundred-and-fifteen million trips on public transportation in 
Indiana last year, and we are seeing it all across the country. 
Areas that were blighted, there were old factories and 
warehouses, are now lofts and studios and multi-use 
developments and public transportation is driving that, and 
there is no doubt that where public transportation goes, the 
community grows. And, we have seen it in cities time and again.
    As we came out of the economic recession, those that had 
good public transportation recovered more quickly and were able 
to bring more economic competitiveness to their communities, so 
it is definitely a great thing to look at, for sure. Thank you, 
Senator.
    Senator Donnelly. Thank you. Go Hoosiers.
    Chairman Shelby. Senator Menendez.
    Senator Menendez. Thank you, Mr. Chairman. I had another 
question or two and I did not know we were going to have a 
second round, so I appreciate the opportunity.
    One of my biggest concerns is the narrative that seems to 
be present in Congress that another 6 years of flat 
transportation funding is the best that we can do. The 
Administration's GROW AMERICA reauthorization proposal, by 
contrast, calls for a 76 percent increase in transit funding 
over 6 years, and APTA's proposal calls for more than doubling 
our current investment in transit.
    So, a question for the panel is, what do you believe the 
consequences of another 6 years of flat funding would be for 
the Nation's transit riders and for the interests you 
represent, and how would the picture look different under 
funding levels, let us say, closer to APTA's or the 
Administration's?
    Mr. Melaniphy. Thank you, Senator, for the question. I meet 
with mayors and Governors on a regular basis and they say one 
of the top five questions that businesses ask when they come 
into their communities is, do you have good transportation? Can 
I get my workers in a safe, reliable, dependable way to work?
    We have seen the consequences of under-investing in our 
infrastructure. We are seeing that $86 billion backlog in 
infrastructure investment. Reliability, safety takes a hit. We 
have to invest in these. If we want our country to be 
competitive in a time when we have a knowledge-based economy, 
when you can take jobs and move them the next month to another 
country, we have to make these investments and it is so 
critical that we do so.
    We proposed almost doubling of the program not because it 
is something we wanted, not because of rainbows and unicorns. 
We based it on what the real needs are, what the real growth 
patterns are, what our communities are demanding in order to 
have safe, reliable, dependable service to serve their 
communities, to get the congestion off our roadways so we can 
have the good, free movement of goods, products, and services 
on the roadway networks. It takes the system working together, 
and in order to do that, to keep this country to be 
competitive, we must make these investments. If we want to have 
safe system, we want to have reliable systems, and a country 
that is competitive, we have to make these investments.
    Senator Menendez. Does anyone else want to respond?
    Ms. Kavinoky. Senator, we look at the estimates that U.S. 
DOT has provided and others that say, what will it take to 
maintain current conditions and performance, and what happens 
if we only spend what we have today. And, I would emphasize 
that you have to think about what current conditions and 
performance are today, and that is people losing days in 
traffic every year. It is the cost to vehicle operation. It is 
the cost of congestion to business. It is the opportunities 
currently being lost because people cannot get to jobs or 
businesses cannot get their workers going.
    And, so, when we talk about the ability to maintain where 
we are, we have to look around and say, is this good enough for 
us? The Chamber would most certainly like to see increased 
investment levels in infrastructure, and we have laid out the 
revenue ways we would like to have that happen.
    I do think we have to be realistic about just what kind of 
increases or what sorts of things we can pursue in the overall 
context of the budget, but we should at least be conscious that 
when we say, well, if we are going to maintain what we have, 
what we have just is not good enough.
    Senator Menendez. You mentioned earlier the Port of New 
York and New Jersey, which is really all, for the most part, 
the Port of Elizabeth and Newark and the container operations 
there. If you wear it, if you drive it, if you eat it, if you 
use it, it probably, at least for the Northeast, which is the 
megaport of the East Coast, comes through that area.
    And, so, to move effectively those products to the 
marketplace on behalf of companies, and--we may not think of 
transit in that regard, unblocking the bottlenecks along the 
way by having transit be able to move people is incredibly 
important.
    One final question, Mr. Melaniphy. In Tuesday's hearing, 
there was some discussion of how to address the different 
priorities if Congress continues current funding levels and the 
topic of private sector investment was raised. And while I 
think there is an important role for the private sector, I do 
not see how that can be a viable replacement for adequate 
public sector funding.
    Now, you represent all types of transit providers who each 
have their own priorities. Is there a way to meet any of these 
needs just by maintaining current funding levels and then 
hoping for the private sector to fill in the gaps?
    Mr. Melaniphy. I have yet to see hope be a sustainable 
model. I think that we have to look at these things as tools. 
Certainly, the Chairman asked about concepts like value capture 
used in other countries, where as we make these investments in 
these transit corridors, there are private sector businesses 
that benefit from that and reap an economic benefit. If we can 
capture some of that to, I do not know, maintain the systems 
that we just spent Federal dollars to build, there is a good 
model there and it is something to examine. If we look at 
municipal bonds, that is a way for the private sector to play 
in that.
    But, in no way can we say just maintain the current and 
hope that through the benevolency of the private sector, they 
will just give money to transit to maintain our infrastructure. 
That is not going to happen. There has to be an economic return 
for that.
    So, looking at how we structure the different pieces, 
whether it is RRIF or TIFIA or value capture or it is municipal 
bonds and maintaining tax-exempt status for those, it is going 
to take a mixture of those things. But, we have to have that 
long-term commitment. These are big projects. Building a tunnel 
under the Hudson is a decades-long project, billions of 
dollars. And, whether it is a big project like that or a small 
capital project that is equally important in South Dakota, we 
have to have a long-term funding model to be able to sustain 
the investment risk quotient that the private sector needs to 
play in that space.
    Senator Menendez. Thank you, Mr. Chairman.
    Chairman Shelby. I have one more question, regional 
differences. Over the years, the Banking Committee has heard 
from the Federal Transit Administration grantees, your members, 
that FTA's regional offices do not uniformly apply the rules 
and regulations. In Tuesday's hearing, I asked Ms. McMillan 
about these perceived differences. While she acknowledged the 
concerns, she suggested that the differences are due to 
different fact patterns, not a different application of the 
law.
    Mr. Melaniphy, could you share with us some of the 
challenges that you have experienced--and you have had a lot of 
them--by these differing interpretations of the law and how, in 
your view, the Federal Transit Administration is working to 
address them? I know that Buy America waivers have been one of 
the most significant, and is the FTA working with you and your 
members to ensure that the appropriate level of guidance and 
oversight of the regions is in place to prevent these types of 
problems?
    Mr. Melaniphy. That is a great----
    Chairman Shelby. Regional differences, in other words.
    Mr. Melaniphy. That is a great question, Mr. Chairman. 
Certainly, I appreciate the situation that Acting Administrator 
McMillan has. She has 12 regional offices, and any time you are 
going to have 12 disparate offices across the Nation, you are 
going to have challenges----
    Chairman Shelby. Absolutely.
    Mr. Melaniphy. ----in keeping everything exactly the same. 
As we look at the role out of the MAP-21, let us not forget 
that at that same time, sequestration hit. So, as they brought 
in new third-party auditors, many of these audits used to be 
done by the FTA staff themselves. Over time, that was jobbed 
out to third-party companies to do that. As the new rollout 
came, sequestration hit and they were not able to complete the 
training that was required for those groups, and so that, just 
in and of itself, can lead to differences in how people view 
regulations and----
    Chairman Shelby. Is it a shortage of funds or a shortage of 
priorities or both?
    Mr. Melaniphy. I think it is a culmination of resources, 
just having the dollars available to train the auditors 
properly in a consistent way, and it is also--and Administrator 
McMillan was correct that we have to look at each system 
differently. There are going to be different circumstances in 
New Jersey Transit than there are going to be in Orange County, 
California, and they are going to have different needs.
    But, the key there is that we encourage and we appreciate 
working with the FTA, and they have been good partners in this. 
We have to continue to engage the industry early. None of us 
benefit by rolling out rules at the end of the day without a 
good ANPRM/NPRM process and public comment process. Some of the 
best ideas come from those who operate the systems on a day-to-
day basis. We all think we are incredibly brilliant here in 
D.C., but we need to hear from those who operate it in the 
field. We appreciate the FTA's efforts to encourage it and we 
encourage more of it, to talk to the operators and the supply 
base that are impacted by these regulations so that we can do 
them in a smart, effective way.
    At the end of the day, we are all moving toward the same 
goal: Safe, reliable, dependable, cost effective services for 
our citizens. Thank you.
    Chairman Shelby. Senator Brown.
    Senator Brown. One last question, and thanks. The four of 
you have given us great insight. Thank you all for that.
    U.S. DOT estimates that half of front-line public 
transportation workers will be retiring in the next 10 years. 
Senator Donnelly and others talked about the importance of both 
qualifications and also their longer service. These are good 
jobs. Clearly, we should be thinking about planning for that 
next generation. How can we assist efforts to hire and train 
the next generation of transit workers? How do we do that and 
how do you do that? How do we do that? Do you want to start 
with Mr. Lombardo and work across. I would like to hear, 
briefly, answers from all of you.
    Mr. Lombardo. Well, some of the work that I participated in 
with Northeast transit systems was developing labor-management 
cooperative programs whereby we were receiving grants from the 
FTA and we were building training programs to recruit 
interested students in high schools, and we have been 
developing some apprenticeship programs that lead to entry-
level positions at some of these employers that I have worked 
with. Most mass transit systems have pretty elaborate training 
departments, but they cannot possibly pay for all the training 
that needs to be done out of their operating budget. So, they 
need assistance to put together a program nationally.
    So, there needs to be training programs that include the 
union in that process where there are unions. In unionized 
properties across the Northeast, there have been and there are 
some strains between the relationship. But, when the union is 
on board with a program that is going to bring in new people 
and provide a career path to the higher skilled positions, they 
are much more effective.
    Senator Brown. Ms. Cline, any thoughts?
    Ms. Cline. Our goal is to hire as many young people as we 
can. We love college graduates, although oftentimes a position 
in transit is not particularly glamorous to them. So, we offer 
as much training as we can, good benefits, good working 
environment, and opportunities, as many opportunities as we can 
give them. Our wages probably in South Dakota are not as they 
are in many locations, so we provide as many of the tools that 
we can give them as we can. There are a lot of people in my 
position that will be leaving the business. I plan to hang in 
there for another few years. But, there is going to be, like, a 
mass exodus and I do not know how we are going to deal with 
that. I do not think we are bringing enough new people, young 
people, into our business.
    Senator Brown. Mr. Melaniphy.
    Mr. Melaniphy. What an incredibly important question. We 
talk so often about the shiny buses and trains and 
infrastructure, but it takes the people to make that stuff 
happen and we are seeing huge shifts in our workforces, not 
just the need to replace people as they retire out, but all new 
skill sets are needed. As we bring on technologies like 
positive train control, we have got to have people not just to 
install the new signal systems, but understand those new signal 
systems and all the new technology that goes into the trains 
and buses and those things.
    We have great partnerships with labor across the country. 
These blue collar jobs, so critical to make the investment, and 
we need to invest in them. It is not just--when you started, it 
was turning a wrench and a hammer and using that stuff, and now 
you have got to plug the computer in, and you put the wrench 
down more often and you reach for the mouse, you know. It is an 
entirely different space.
    And, we have to make those investments in workforce 
development, but also in standards and in research. If we are 
not looking at new ways to develop new programs, to find 
better, smarter ways to do it and setting standards across the 
country so there are uniform training programs that then can be 
rolled out through our community colleges and our universities, 
we are going to have a hodgepodge. If we do those things, if we 
invest in standards and research and workforce development 
programs, we can train uniformly across the Nation, have a good 
workforce, white collar and blue collar together, and make for 
safe, reliable systems. Critically important that we do that. 
Thank you.
    Senator Brown. Ms. Kavinoky.
    Ms. Kavinoky. I would associate myself with everything that 
Mr. Melaniphy said. I think the question is, we have to explore 
what the workforce of the future needs to look like, vehicles 
and equipment are changing dramatically. Not a day goes by that 
someone does not talk to me about autonomous vehicles, self-
driving vehicles. I do not know what that is going to do to 
transit, but that is probably a question to be asking. There is 
much more complex contracting, financing, project delivery, 
customer demands and desires are changing, and I think that 
this Committee can look at what those future trends and 
challenges need to be, and then I think with organizations like 
APTA and standards and research to meet those.
    Senator Brown. Thank you. Thank you all.
    Mr. Chairman, thank you.
    Chairman Shelby. Thank you. I thank all of you.
    This hearing is adjourned.
    [Whereupon, at 11:23 a.m., the hearing was adjourned.]
    [Prepared statements and responses to written questions 
supplied for the record follow:]
             PREPARED STATEMENT OF SENATOR ROBERT MENENDEZ
    Thank you, Mr. Chairman, for convening this hearing.
    I appreciate the diverse array of stakeholders who have agreed to 
testify today. Our witnesses represent transit systems large and small, 
the U.S. business community and the U.S. workforce.
    I think any time you have the Chamber and labor standing shoulder-
to-shoulder testifying about the importance of an issue, it's something 
that even a divided Congress should take notice of.
    A recurring theme throughout each piece of testimony we received is 
the need for increased investment in our transit infrastructure. While 
innovative financing solutions and public-private partnerships can play 
a role in building the best transit systems possible, they are not a 
replacement for public sector funding.
    A report from the World Economic Forum ranked the infrastructure of 
the United States just 12th in the world. This, from the country that 
built the Transcontinental Railroad and the Interstate Highway System.
    Projects like these strengthened our economy, improved our national 
defense, connected our communities, and gave the U.S. the competitive 
global advantage it has long enjoyed. We have to again become a country 
that is committed to building big.
    And as difficult as that may seem in the current environment, the 
consequences of failure to act are much greater.
    There are no easy choices before this Committee, but I hope that in 
making the tough choices, we're committed to making the ones that are a 
win for our families, businesses, and communities.
                                 ______
                                 
                PREPARED STATEMENT OF JANET F. KAVINOKY
Executive Director, Transportation and Infrastructure, U.S. Chamber of 
                                Commerce
                             April 23, 2015
Introduction
    Chairman Shelby, Ranking Member Brown and distinguished Members of 
the Senate Committee on Banking, Housing, and Urban Development, thank 
you very much for the opportunity to discuss the importance of Federal 
investment and leadership in transportation infrastructure. I am here 
today representing the U.S. Chamber of Commerce because we, along with 
the business, labor, highway, and public transportation interests that 
are members of the Chamber-led Americans for Transportation Mobility 
Coalition, believe strongly that Federal investment in highways, public 
transportation, and safety is necessary to boost economic productivity, 
successfully compete in the global economy, and maintain a high quality 
of life.
    Specifically, this testimony outlines why public transportation is 
in the interest of the Nation's economy and businesses. Often people 
wonder why the world's largest business federation supports investment 
in public transportation. Transportation infrastructure is one of the 
top priorities on the Chamber's Jobs, Growth, and Opportunity Agenda 
and, simply put, transit gets people to their jobs, helps grow the 
economy in multiple ways, and gives people the opportunity to get to 
health care, school, recreation, and shopping and businesses the 
opportunity to reach customers--in the same way roads and bridges do. 
Having a safe, reliable, efficient transit system is, quite simply, 
smart business.
    The timing of this hearing is perfect. The bipartisan highway, 
transit, and safety law, Moving Ahead for Progress in the 21st Century 
(MAP-21), which ended years of short term extensions that created a 
great deal of uncertainty for businesses and infrastructure owners and 
operators, is once again about to expire. By May 31, Congress should 
pass a long-term, fully funded bill that builds on the reforms 
contained in MAP-21 and identifies the resources needed to maintain, 
and ideally increase, smart spending on the Nation's transportation 
system. The alternative is to begin the pattern of extensions and 
revenue patches all over again. That pattern leads to State and local 
agencies slowing or canceling lettings, project delays, cost increases, 
and uncertainty that negatively affects business outlooks.
Transit in a 21st Century Transportation Network
    Businesses place a high value on mobility--of their employees, 
customers, and supply chains--and are solution oriented. This country 
is long past the time when highways alone can serve the needs of 
business. To create a 21st century infrastructure to support a 21st 
century economy requires a partnership between all levels of government 
and the private sector, multiple modes of transportation, and 
flexibility for those closest to the problem to tailor solutions to 
their particular needs.
    Chamber members are frustrated with the questions of, ``Which mode 
is most important?'' and ``Should the Federal Government pay for 
transit?'' dominating policy discussions. The Federal Government should 
not be in the business of a one-size fit all approach to 
transportation: investments are needed in roads where appropriate, 
buses where appropriate, fixed rail where appropriate, and technology 
where appropriate. Often, the right answer to a transportation problem 
will include all of these options. MAP-21 was an excellent step toward 
ensuring that the ``how to'' decisions are made at the State and local 
levels of government through simplification and reorganization of the 
Federal program structure but maintaining oversight and requiring 
transparency and accountability through performance measurement.
    The business community is focused on whether or not the 
transportation system as a whole will support reliable and predictable, 
cost-effective, and safe transportation of goods and people from their 
origin to their destination both today and into the future. They cannot 
afford to have a system made up of islands of good transportation in a 
sea of mediocrity.
    The genius of the interstate highway system was in linking States 
to one another via a national road system and then to the global 
economy through ports, airports, and intermodal centers. This allows 
the free flow of people, goods, and services. Transit links together 
neighborhoods, communities, and regions, and then connects to road, 
aviation, and water systems so that people can get from point A to 
point B efficiently.
    There are still some on Capitol Hill who argue that there is no 
national interest in transit and that there should be no Federal role 
in transit; the Chamber and its members strongly disagree.
Public Transportation and The National Economy
        Infrastructure is not the end result of economic activity; 
        rather it is the framework that makes economic activity 
        possible. \1\
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     \1\ Trimbath, Susanne. 2011. ``Transportation Infrastructure: 
Paving the Way'', STP Advisory Services, LLC.

    In 2009, the Chamber undertook a study to explore the degree to 
which transportation system performance--the ability to meet the needs 
of business--related to the national economy. We created the 
Transportation Performance Index (TPI) by asking our members to 
identify what was important and why, translated those into indicators 
of performance, identified data sources, and combined the data, which 
is statistically representative of the diverse economics, geography, 
and demographics of the United States, into the TPI.
    Here is what we found:
A transportation system that works for businesses can propel economic 
        growth and, conversely, one that falls short of performing as 
        it needs to will drag down the economy
    There is a strong correlation between performance, which the TPI 
defines as the degree to which the transportation system serves U.S. 
economic and multilevel business community objectives, and economic 
growth as measured by Gross Domestic Product (GDP). The analysis 
provided robust, stable results showing the overall contribution to 
economic growth from well-performing transportation infrastructure as 
fundamental to maintaining a strong economy. \2\
---------------------------------------------------------------------------
     \2\ ``Transportation Performance Index--Key Findings'', U.S. 
Chamber of Commerce, http://www.uschamber.com/sites/default/files/lra/
files/LRA_Transp_Index_Key_Findings.pdf), 2011.
---------------------------------------------------------------------------
    The TPI econometric analysis exposed a strong correlation between 
transportation infrastructure performance and foreign direct investment 
(FDI) in the United States. There is a positive relationship between 
FDI that opens new establishments in the United States--creating new 
jobs--and the performance of transportation infrastructure as measured 
by the index.
    A first rate national transportation system is necessary in order 
to maintain a first rate economy in the United States. Failure to 
address transportation problems undermines U.S. economic growth. This 
is the fundamental reason that the Federal Government must take a 
leading role in making sure that transportation policies--and the 
related programs and spending that implement these policies--contribute 
to a strong economy, including enabling interstate commerce, 
facilitating international trade, and propelling the efficient mobility 
and connectivity of people and products.
Business generally cares about three things when it comes to 
        transportation infrastructure, including transit
    Supply: availability of infrastructure, which is a key 
        consideration for businesses when deciding where to locate 
        their facilities;

    Quality of service: reliability of infrastructure, whether 
        it supports predictable and transportation services and travel; 
        and,

    Utilization: whether current infrastructure can sustain 
        future growth. Utilization is a key consideration for companies 
        that look years into the future to inform the decisions and 
        capital investments they make today.
Finding good data to indicate performance can be difficult
    One of the main challenges in creating an index based on 
performance was finding data sources that were publicly available, 
collected consistently across the country, and reflective of more than 
just a few years.
    The indicators included in the TPI for transit can be improved as 
better data sources emerge. For example, ``miles of transit per 10,000 
people'' in a Metropolitan Statistical Area measures availability of 
transit in the TPI. Obviously this is an imperfect measure. Ideally we 
would like to measure the percentage of people who have transit service 
within one mile of home, or something that reflects how easy it is to 
access transit to get to work. The TPI does not measure frequency of 
service, speed of transit as compared to other transportation choices, 
and reliability of service. All of these potential indicators were 
raised by businesses as specific concerns when they were surveyed and 
interviewed about public transportation. In general, congestion and 
intermodal connectivity for both people and goods were also concerns of 
our members as relates to transit.
    If the Chamber's experience is any indication, maintaining Federal 
research and data collection assistance across all modes of 
transportation will be critical to the success of performance-based 
transportation decision-making mandated by MAP-21.
Public Transit, Jobs, Economic Development, and Productivity
    Public transportation supports private sector jobs in the United 
States from the design and construction of transit systems, to the 
manufacturing of rolling stock and other components, to the 
technologies that make systems run efficiently and allow for effective 
management. Beyond the direct and indirect employment impacts are, of 
course, the jobs that are supported across other sectors of the economy 
when transit catalyzes economic development, enables economic activity, 
provides transportation choices, addresses traffic congestion, and 
gives workers access to jobs and employers access to a broader 
workforce.
Manufacturing
    According to the American Public Transportation Association's 
study, The Economic Impact of Public Transportation, ``Capital 
investments in public transportation (including purchases of vehicles 
and equipment and the development of infrastructure and supporting 
facilities) are a significant source of jobs in the United States. The 
analysis indicates that nearly 15,900 jobs are supported a year for 
every $1 billion of spending on public transportation capital.'' \3\
---------------------------------------------------------------------------
     \3\ http://www.apta.com/resources/reportsandpublications/
Documents/Economic-Impact-Public-Transportation-Investment-APTA.pdf. 
Accessed 4/19/2015.
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    Transit manufacturers are located across the Nation. From Alabama, 
home to New Flyer and Caterpillar-owned Progress Rail Services, to 
Nebraska, where Kawasaki is building rail cars, investment in public 
transportation has an impact--even where transit is not a dominant mode 
of transportation. While the transportation infrastructure and services 
sector is major driver to the U.S. economy, the global supply chain is 
key to its success. Accordingly, the Chamber would urge against 
expanding current domestic source requirements that could slow projects 
and increase costs. As the U.S. already imposes significant ``Buy 
America'' requirements for Federal transit programs, additional 
mandates are unnecessary.
    The Chamber agrees with the Public Transportation Manufacturing 
Coalition that,

        Increased investment in public transportation is the single 
        best way to encourage greater domestic manufacturing and grow 
        jobs in U.S. transit rolling stock. Three quarters of all 
        Federal public transportation funding flows to the private 
        sector in the form of contracts, which has a ripple effect in 
        the form of additional jobs, local tax revenue and economic 
        growth for the communities in which these businesses are 
        located. The true key to job creation in our industry is a 
        stable Federal trust fund and the necessary dedicated revenues 
        that support it. \4\
---------------------------------------------------------------------------
     \4\ Letter from the Public Transportation Manufacturing Coalition 
to Senate Banking, Housing, and Urban Development Committee Chairman 
and Ranking Member, dated April 7, 2015.
---------------------------------------------------------------------------
Intelligent Solutions
    Xerox is a market leader in the United States for transportation-
related services. They provide leading-edge technology systems and 
services for public transit and highways. Passage of a long-term 
surface transportation would allow for investments in new technologies 
that ease traffic congestion, support mobility, and address 21st 
century transit issues with 21st century solutions. From fare 
collection to electronic toll solutions, back office processing to 
infrastructure installation, Xerox provides systems and services that 
help to ease congestion, improve urban economies, and meet public 
transit's daily operational challenges with innovative and efficient 
solutions.
Health Care
    The health care industry in Houston considers transit essential to 
improving the health of people in the region. The Health of Houston 
Survey (2010) demonstrates how access to health care could be improved 
with better transportation. As many as 34 percent of residents in East 
Houston-Settegast, and 15 percent of Harris County residents, reported 
that it takes them more than 30 minutes to travel to medical 
appointments. In Harris County, 18 percent of residents are dependent 
on public transportation or someone else to take them to the doctor, a 
number that is nearly 40 percent for residents in Downtown-East End. 
\5\
---------------------------------------------------------------------------
     \5\ http://hhs2010.sph.uth.tmc.edu/SingleMapReport/. Accessed 4/
16/2015.
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Travel and Tourism
    The services sector suffers when congestion and lack of 
connectivity create inefficiency and, in some cases, deterrence for 
travel at all. The travel and tourism industry represents a clear 
example of an industry with job and growth opportunities that is 
heavily reliant on transportation. Jonathan Tisch, Chairman of Loews 
Hotels and Resorts, highlighted the connection between infrastructure 
and growth in the travel and tourism sector.

        In my business, the travel industry, we see tremendous 
        opportunities for growth in a sector that already generates 
        $1.9 trillion in annual economic output, supplies $124 billion 
        in tax revenue, and employs 7.5 million Americans. Over the 
        next decade, worldwide travel from rapidly developing countries 
        like China, Brazil, and India is projected to grow by more than 
        100 percent--additional visitors who could generate billions to 
        spur economic growth, job creation, and small business 
        expansion. Yet America's infrastructure system cannot handle 
        the travelers we already have, much less millions of new ones. 
        \6\
---------------------------------------------------------------------------
     \6\ Tisch, Jonathan, ``Meeting the Infrastructure Challenge 
Requires Innovative Solutions'', Huffington Post (http://
www.huffingtonpost.com/jonathan-tisch/us-infrastructure-
_b_1939932.html), Oct. 4, 2012.
---------------------------------------------------------------------------
Economic Development and World Class Communities
    In Utah, 80 percent of the State's two million residents live along 
the Wasatch Front. These residents and the businesses in the region 
know that transit is an important part of the Salt Lake City region's 
appeal as a world-class location for business. It is a good case study 
for the economic and business case for Federal transit investment.
    With an expected 60 percent increase in population by the year 2040 
in an area bounded by mountains and the Great Salt Lake, transit 
investments were not optional for the region. They were necessary and 
businesses demanded them.
    The Salt Lake transit rail system was not just built to accommodate 
the 2002 winter games. It was built and later significantly expanded 
because of future growth. This expansion would not have been possible 
without a partnership with the Federal Government. Federal 
contributions were the majority of the capital funding for the projects 
made possible because of a Federal transportation program.
    In August 2013, the Utah Transit Authority completed its Frontlines 
2015 Project--70 miles of new rail service over a 7-year period, 
finishing 2 years ahead of schedule and $300 million under budget. 
Commuter rail now runs from Provo to Ogden. Five lines of TRAX light 
rail in the downtown area were extended to the suburbs, and a 
connecting line to Salt Lake City International Airport has been added. 
According to the Utah Transit Authority, more than 25 percent of 
commuters arriving in downtown Salt Lake City each day now arrive via 
public transportation.
    Companies that drive the U.S. economy chose to locate in and around 
Salt Lake in part because of a transportation that provides choices, 
enables access to employees, and attracts and retains a workforce with 
the right skills.

    In Lehi, Utah--just south of Salt Lake City, the widening 
        of major State road, opening of a commuter rail station, and 
        the extension of an active transportation trail system has 
        helped create a bustling tech-region that has attracted more 
        than 100 new businesses over the past 3 years, including Adobe, 
        Microsoft, Vivint Solar, and Xactware.

    Goldman Sachs has over 1,400 employees in Salt Lake, which 
        is Goldman Sachs second largest Americas office. Many of these 
        employees are located in downtown Salt Lake in a building 
        adjacent to the light-rail system. The company regularly cites 
        the accessibility of transit and ease of commute as key 
        recruitment tool.

    eBay relocated and expanded its Utah operations adjacent to 
        a new commuter rail station. The 241,095 square foot facility 
        is home to 1,800 employees and gives the company access to a 
        talent pool and workforce located all along the Wasatch Front.

    Salt Lake is one of the many places in the United States that can 
provide specific examples of how public transportation also drives 
private investment and creates value for communities and regions. The 
$26 million Federal investment \7\ in the Sugar House (SLine) streetcar 
project has accelerated or is partially responsible for the creation of 
more than 1,000 residential units and nearly two million square feet of 
redevelopment at seven sites, resulting in $400 million in private 
investment. \8\
---------------------------------------------------------------------------
     \7\ http://www.shstreetcar.com/background.htm. Accessed 4/18/2015.
     \8\ http://www.shstreetcar.com/updates.htm. Accessed 4/18/2015.
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Reducing the Cost of Doing Business With Transit
    Public transportation investments are made for many reasons and 
there are many beneficiaries. Among one of the most pervasive 
transportation problems in the United States that affects business is 
congestion, and public transportation is among the solutions. According 
to the U.S. Department of Transportation, congestion slows the movement 
of food and merchandise. It raises prices and erodes the bottom line. 
Particularly susceptible to congestion are ``the long and often 
vulnerable supply chains of high-value, time-sensitive commodities . . 
. Congestion results in enormous costs to shippers, carriers, and the 
economy.'' \9\
---------------------------------------------------------------------------
     \9\ http://ops.fhwa.dot.gov/freight/freight_analysis/
freight_story/costs.htm. Accessed 4/20/2015.
---------------------------------------------------------------------------
    The public knows it. A 2013 poll by the American Road and 
Transportation Builders Association found that 71 percent of 
respondents agreed with this statement: ``Growing traffic congestion in 
U.S. metropolitan areas makes products we buy everywhere in the U.S. 
more expensive because congestion increases transportation costs for 
businesses.'' \10\
---------------------------------------------------------------------------
     \10\ http://www.aednet.org/government/pdf-2013/ARTBA-
HighwayFundingPoll-20130603.pdf. Accessed 4/16/2015.
---------------------------------------------------------------------------
    Mass transit and public transportation give people the option to 
ride a bus or train which makes a little more room for trucks and other 
commercial vehicles that have little choice but to be on roads and 
bridges in order to deliver services and goods. That is important 
considering the facts that 40 percent of traffic congestion is due to 
lack of capacity and bottlenecks, the necessary investment has not been 
made over the past 20 years to modernize and keep our Nation's highways 
and bridges up-to-date, and commercial and economic growth has led to 
more traffic.
    Tim Lomax, the leading researcher for the Texas Transportation 
Institute's Urban Mobility Report, which estimates the cost of 
congestion to commuters, makes the case for investment in transit, 
highways, and improved operations and technology in simple terms.

        If you invest in roads and transit, you get better service and 
        access to more jobs. Traffic management and demand management 
        should be part of the mix, too. Generally speaking, mobility 
        investments in congested areas have a high return rate. 
        Researchers recommend a balanced and diversified approach to 
        reducing traffic congestion--one that focuses on more of 
        everything. \11\
---------------------------------------------------------------------------
     \11\ http://d2dtl5nnlpfr0r.cloudfront.net/tti.tamu.edu/documents/
tti-umr.pdf. Accessed 4/20/2015.
---------------------------------------------------------------------------
The Issue of Funding
    Moving Ahead for Progress in the 21st Century addressed many of the 
policy concerns that the Chamber had with Federal surface 
transportation programs. Our members asked for transportation policies 
that cut through red tape at all levels of Government so that projects 
move forward quickly. MAP-21 delivered, and as the law continues to be 
implemented we are eager to assess the results. Businesses wanted to 
see Federal funds leveraged for locally selected projects that 
addressed the transportation needs of companies large and small. 
Performance measurement should allow us to determine how well State and 
local decisions are prioritizing and delivering on the national 
interest.
    Unfortunately, MAP-21 left the Big Question unanswered: where will 
the Federal Government find the revenue needed to fully pay for a long-
term highway and transit bill that truly improves the condition and 
performance of the Nation's transportation system. The Chamber is 
pleased that Congress has rejected, repeatedly, efforts to make drastic 
cuts in Federal investment on public transportation, roads, and 
bridges.
    However, as everyone is painfully aware, the issue of sustainable, 
growing revenue for the Federal HTF is central to MAP-21 
reauthorization. It has been a topic of nonstop debate, discussion, and 
hand wringing since MAP-21 passed in 2012.
    It is time to stop talking and act.
    The stakes are high: in 2012, nationwide Federal funds averaged 45 
percent of the cost of transit capital projects according to the 
Federal Transit Administration, which is paid for by a combination of 
2.86 cents per gallon of gasoline excise taxes and the General Fund 
contribution for transit.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Congress needs to identify revenue sources to fill the gaping hole 
between revenues and current spending levels. Ideally, we would be 
looking to fill the growing hole between available resources and needs.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    The Chamber evaluates revenue sources along five criteria. A 
``five-star revenue source'' will have a yes answer to each of the 
following questions:

    Is the revenue source transportation-related? In simple 
        terms, because of special Federal rules, if revenues are 
        transportation-related, Congress can pass a long-term bill that 
        provides funding certainty. Without transportation-related 
        revenues, annual appropriations could vary dramatically. 
        Uncertainty means transportation projects cost more and have 
        less impact because big, high-impact projects rely on multiyear 
        transportation funding certainty.

    Are the revenues ongoing, rather than one-time? One-time 
        money is a BandAid, rather than a solution. This is the path 
        Congress has taken to ``solve'' the problem since 2009. It 
        involves funneling money from one place to another, and does 
        not address the HTF's structural problems in the long term.

    Are the revenues sources structured to be sustainable and 
        growing? We need to not only meet today's demands on our 
        national transportation network, but also the increasing 
        demands we know will be placed upon that network in the coming 
        years.

    Are the revenue sources--alone or in combination--adequate 
        for full funding or, at a minimum, able to maintain funding 
        levels? In combination or by themselves we need $91 billion 
        over the next 6 years just to maintain funding levels. And that 
        won't necessarily deal with the backlog of maintenance and 
        construction needed to improve the condition and performance of 
        transportation systems, anticipate demographic changes, and 
        accommodate and spur economic growth. We should aim for full 
        funding, meaning what's needed to bring our seriously outdated 
        network of highways, bridges and transit systems up to par, and 
        keep it that way, so future generations can rely upon the 
        network.

    Can the Federal Government collect the revenues? There are 
        some options, like sales taxes and value capture, that are 
        viable at a State or local level but that the Federal 
        Government cannot use. It seems basic, but this knocks out a 
        lot of potential ideas that work well at other levels of 
        Government.

    It is the Chamber's position that the simplest, most 
straightforward, elegant solution to the immediate problem we face is 
to increase user fees--gasoline and diesel taxes--going into the 
Highway Trust Fund. Adding a penny a month for a year and indexing the 
total user fee to inflation could support current services funding 
levels for the foreseeable future. The collection system itself is 
highly efficient: the owner of the fuel at the time it breaks bulk from 
the terminal rack pays the excise tax to the Internal Revenue Service. 
According to the American Petroleum Institute, there are about 1,300 
terminals in the country, translating to a low number of payers and low 
cost of administration. The gas tax, if adjusted in amount and indexed, 
receives five stars as a revenue source.
    And yes, in the long run, we know that there is a need to look to 
other revenue sources. The vehicle fleet is becoming more fuel-
efficient. Driving patterns are changing. Construction costs typically 
grow faster than the Consumer Price Index. And multimodal 
transportation investment calls for more diversified sources of 
revenue.
    Finally, I should mention that the Federal Government has many 
other tools at its disposal to encourage investment in public 
transportation, including promoting public-private partnerships. The 
Chamber is a big supporter of P3s. A recent article in Governing 
Magazine summarized the benefits, which are not about creating money 
where there is none but rather in creating significant public value 
through the ``responsible fusion of public-private resources.'' 
Projects delivered using P3s have a record of coming in ahead of 
schedule and under budget. The private sector taking on risk shelters 
the public sector from losses. New technologies and other innovations 
are brought to bear. Public-private partnerships are not for every 
project, but there is a growing track record of success in the United 
States and we should continue to encourage P3s.
Conclusion
    The U.S. Chamber views public transportation systems as critical 
components of a smooth flowing, efficient national transportation 
network.
    The Chamber strongly supports Federal investment in transit. We 
need a transportation system that will support the needs of businesses 
from both the factory to the corporate headquarters to main street 
retailers to medical centers.
    Congress should pass a fully funded, long-term MAP-21 
reauthorization bill by May 31, although it is unlikely it will do so. 
Kicking the can again has costs. Companies cannot plan for hiring or 
capital expenditures. Land, labor, and capital are more expensive as 
the time value of money increases project costs. Projects that need 
multiyear funding commitments are delayed. Opportunities for economic 
development and economic growth are lost.
    Thank you for the opportunity to testify today and the Chamber 
looks forward to working with you to build on the reform success of 
MAP-21 and stabilize the Highway Trust Fund and find ways to grow 
investment in transit, roads, and bridges so each State and region can 
get out of the system what they need to be successful--whether that is 
moving freight or their employees.
                                 ______
                                 
               PREPARED STATEMENT OF MICHAEL P. MELANIPHY
 President and Chief Executive Officer, American Public Transportation 
                              Association
                             April 23, 2015
Introduction
    Chairman Shelby, Ranking Member Brown, and Members of the 
Committee, thank you for this opportunity to present testimony to the 
Senate Committee on Banking, Housing, and Urban Affairs regarding the 
next surface transportation authorization bill. I am Michael Melaniphy, 
President and Chief Executive Officer of the American Public 
Transportation Association (APTA).
About APTA
    The American Public Transportation Association (APTA) is a 
nonprofit international association of nearly 1,500 public and private 
member organizations, including transit systems and commuter rail 
operators; planning, design, construction, and finance firms; product 
and service providers; academic institutions; transit associations and 
State departments of transportation. APTA members serve the public 
interest by providing safe, efficient, and economical transit services 
and products. More than 90 percent of the people using public 
transportation in the United States and Canada are served by APTA 
member systems. APTA's member organizations--both public and private--
build, operate, and maintain the Nation's public transportation 
systems.
Background
    As an essential, expanding, and increasingly important component of 
the Nation's surface transportation system, public transportation gets 
people where they need to go and, at the same time, it allows our 
highways to work better by reducing congestion. But to maximize the 
Federal investment in public transportation, we need a predictable, 
multiyear authorization for a growing program that better addresses 
identified needs. A dependable long-term bill would enhance the 
industry's ability to provide good, safe service in communities across 
the Nation, it would be a catalyst for public-private partnerships, and 
74 percent of that funding would flow directly to the private sector, 
which at the end of the day is really who builds products and provides 
services for public transportation providers.
    Instead, since the expiration of TEA-21 in 2003, we have had 24 
short-term extensions, a little more than 4 years authorization under 
SAFETEA-LU, and a bit more than 2 years under MAP-21. More recently, 
Federal transit funding has grown only minimally, from $10.231 billion 
in FY2009 to $10.692 billion in FY2014. The uncertainty of recent 
Federal authorizing laws and anemic growth of the Federal transit 
program have made it nearly impossible for the industry to keep the 
system in a state of good repair, replace the aging infrastructure and 
fleets, and address the growing demand for service.
    While growing communities compete for limited funds to build a 
variety of new fixed guideway systems (BRT, light rail, trolley, heavy 
rail, and commuter rail), and transit ridership continues to grow, the 
deterioration of our systems adversely impacts both efficiency and 
safety. The U.S. DOT now estimates that we have an $88 billion one-time 
backlog in state of good repair capital investment needs. And this 
backlog doesn't even include the annual cost of maintaining the current 
system, like replacing aging buses, rail cars, vans, buildings, 
bridges, and stations; the cost of building new capacity; and the more 
than $3 billion in costs to install positive train control systems at 
the Nation's commuter railroads.
    These are some of the reasons that APTA has urged Congress to enact 
a long-term authorization bill that grows Federal funding for public 
transportation. We support the preservation of the Federal transit 
program, and we support an increase in the dedicated revenues that go 
into the Highway Trust Fund for both the Mass Transit and Highway 
Accounts. It is estimated that at least $100 billion in new revenues is 
needed just to maintain current public transportation and highway 
programs, and APTA strongly believes we need to grow current Federal 
investment levels for transit. It should come as no surprise that we 
strongly oppose efforts to devolve the Federal transit or highway 
programs. Public transportation is an essential part of the overall 
surface transportation system, and given our growing population and 
increasing congestion on our roadways, it is more important than ever.
    It makes little sense to build and maintain the Nation's 
transportation infrastructure with short-term extensions. General fund 
transfers to support current program levels will cost the Nation more 
in the long run by adding to the Federal deficit and putting the cost 
of maintaining our transportation system on our children and 
grandchildren. According to the House Budget Committee, Congress has 
transferred $63.1 billion into the highway trust fund since 2008 just 
to support existing program levels. And while these transfers have been 
necessary, they are not the ideal way to fund our Nation's 
infrastructure.
    We know transit ridership is growing, we know our population is 
expected to grow significantly, and we believe that the demand for 
public transportation service in our communities will continue to grow. 
Our failure as a Nation to adequately invest in this essential element 
of our surface transportation system will only cost the Nation more in 
the long run. Conversely, investment in public transportation will help 
support a healthy, growing economy, facilitating the efficient movement 
of goods and people, and stimulating economic development in 
communities served by vibrant public transportation systems.
Record Ridership and Growing Public Demand
    Nationally, public transportation ridership continues to set record 
levels. In 2014, people took a record 10.8 billion trips on public 
transportation--the highest annual ridership number in 58 years. Some 
public transit systems experienced all-time record high ridership last 
year. This record ridership didn't just happen in large cities. It also 
happened in small- and medium-size communities. In fact, some of the 
biggest gains came in towns with less than 100,000 people with 
ridership growth of double the national average. This record growth in 
ridership occurred even when gas prices declined by 42.9 cents in the 
fourth quarter. From 1995-2014 public transit ridership increased by 39 
percent, almost double the population growth, which was 21 percent. The 
estimated growth of vehicle miles traveled was 25 percent. This proves 
that once people start riding public transit, they discover that there 
are benefits over and above saving money.
    One only needs to ride a train or bus during the morning commute to 
recognize the growing demand, and to experience firsthand the strains 
that that demand is placing on systems. The demand and support for 
public transportation is also reflected at the ballot box. Last year, 
69 percent of ballot initiatives seeking taxpayer support for transit 
investment were approved by voters. Clearly, citizens are willing to 
pay for improved transit service. These local ballot initiatives are an 
affirmation of the stability of the local partnership, but they are not 
a substitute for the Federal partnership.
A Local, State, and Federal Partnership
    Providing public transportation choices has always been a 
partnership, involving public sector agencies at all levels of 
Government working with nonprofit and private sector stakeholders. The 
planning, development, and construction of hundreds of public 
transportation projects annually is carried out predominately at the 
local level by transit agencies--working with State, local, and private 
sector partners. All of these partners, and the communities they serve, 
benefit from the projects. In addition to improving mobility, transit 
projects shape land use and development patterns, generate jobs, and 
stimulate productivity gains that benefit the Nation and advance 
national goals. In short, well-designed transit service is a catalyst 
for economic growth. The Federal Government's longstanding role helps 
to ensure that these locally derived benefits are fully integrated into 
the national multimodal transportation network that is so essential to 
ensuring U.S. competitiveness in our global economy.
    While Federal funding supports more than 44 percent of transit 
capital spending, States and localities support another 32 percent of 
these costs. And while the Federal Government supports less than 9 
percent of transit operating costs, fares and transit agency earnings 
cover more than 37 percent of such costs, with States and localities 
supporting about half of operating costs. While most formula programs 
under Federal transit law distribute funds on the basis of population, 
density, and service provided, many less urban States rely on the 
Federal Government for a significantly higher proportion of their 
transit capital expenditures than more urban States, and many smaller 
communities depend on Federal funding for a substantial share of 
operating costs as well.
    For example, Alabama, Idaho, Tennessee, Louisiana, South Carolina, 
South Dakota, and Kansas do not spend as much on transit as other 
States like New York. However, more than 46 percent of what these 
States do spend on transit comes from the Federal Government. In fact, 
almost 86 percent of the transit capital equipment these States have 
purchased over a 5-year period was bought with Federal funds. By 
comparison, the State of New York derives only 10.5 percent of their 
total transit funding from the Federal Government, while 37.6 percent 
of their capital funding come from the Federal program.
Return on the Federal Investment
    For every dollar we invest in public transportation, we generate 
about $4 in economic returns. And $1 billion in Federal transit 
investment fosters productivity gains that create or sustain 50,000 
jobs. It is important to note that 73 percent of Federal transit 
capital funds flow through the private sector. In fact, much of the bus 
and rail equipment is manufactured in rural areas and provides high 
wage jobs in those communities. For example, bus original equipment 
manufacturers have plants located in Alabama, North Dakota, Kansas, 
Minnesota, South Carolina, California, and upstate New York. Rail Cars 
are manufactured in places like Nebraska, Idaho, Illinois, 
Pennsylvania, and upstate New York. Components and subcomponents are 
being manufactured all across this country. As these investment metrics 
make clear, local and regional transportation improvements yield 
national benefits. \1\
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     \1\ See Attachment A
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    On a very fundamental level, Federal transportation funding keeps 
this economic engine running, as transit agencies can only plan and 
advance large, multiyear capital projects when they can be confident 
the resources will be there when they are ready to break ground.
APTA's Recommendations for the Next Authorization Bill
    Many changes adopted in MAP-21 produced important improvements to 
the Federal Transit Program and were consistent with the 
recommendations of APTA and the public transportation industry. 
However, in the context of a relatively level-funded bill and growing 
demand for transportation infrastructure investment, even consolidated 
formula programs could not adequately meet the requirements facing our 
public transportation agencies and the communities they serve.
    Communities across the country know that public transportation is a 
smart investment and have found creative ways to advance projects, but 
they cannot do it alone. Only through sustained, robust investment at 
all levels of Government can we maintain what we have built and grow 
for the future. The more than 10 billion trips riders took last year 
are, in part, the product of decades of Federal support. In our 
authorization proposal, APTA seeks increased Federal funding in a 
multiyear bill.
Closing the Infrastructure Investment Gap
    As our impending revenue shortfall makes clear, funding uncertainty 
delays capital investment and drives up project costs. To ensure the 
reliable, long-term funding best suited to infrastructure investment, 
APTA urges Congress to enact a 6-year, $100 billion authorization for 
the Federal transit program that includes robust funding to grow the 
program from $10.7 billion in the current year to $22.2 billion in 
2021. Revenues into the Highway Trust Fund (HTF) must increase to 
support this much needed growth.
    Our funding proposal is robust because our needs are real. APTA's 
authorization recommendations are based on needs identified in eight 
categories of equipment and facilities funded under the current Federal 
program. They are based on the need for 6-year investment from all 
sources--fares, local, State, and Federal--of $245 billion. APTA's 
investment requirements include the cost of bus replacements, demand 
response vehicles, rail vehicles, state-of-good-repair spending, New 
Starts and core capacity projects, and other costs.
    We ask that Congress identify dedicated funding that supplements 
current HTF revenues to ensure the long-term health and growth of 
Federal public transportation and highway programs through and beyond 
the next long-term reauthorization bill. We support the preservation 
and growth of revenues that go into the Mass Transit Account of the 
Highway Trust Fund and oppose efforts to devolve existing Federal 
surface transportation programs.
    Our proposal calls for increased funding across the Federal transit 
programs for Capital Investment Grants, State of Good Repair, Bus and 
Bus Facilities, and formula programs. We do not support the growth of 
any existing program at the expense of another--we need growth in all 
areas. Recognizing that large but infrequent bus rolling stock and 
facility projects are challenging to address with a limited formula 
program, APTA has recommended a discretionary component to the bus 
program, combined with restoring the overall bus program funding to 
pre-MAP-21 levels, without sacrificing growth for all major programs.
Leveraging Limited Public Resources
    Transportation funding resources are constrained at all levels of 
Government. Transit agencies continue to explore ways to make their 
limited funds go farther, including program reforms, cost-reduction 
measures, and greater leveraging of public dollars. While grant funding 
will remain the largest and most crucial source for transit capital 
investments, APTA supports a broad range of funding and finance 
solutions, including preserving tools that work, supporting a range of 
new tax incentives to encourage greater private investment in 
infrastructure, and improvements to make Federal transportation credit 
programs more useful and affordable to smaller project borrowers. We 
also believe that one of the best ways to encourage private sector 
participation in transit projects is enactment of a robust, multiyear 
Federal transit authorization bill, under which Federal grant funding 
can be matched with private sector dollars.
Nationwide Solutions
    For several programs where transit stakeholders face common 
challenges nationwide, the Federal Government is best suited to take 
the lead. These national priorities include the Transit Cooperative 
Research Program (TCRP), Technical Assistance and Standards, and Human 
Resources and Training. To restore funding predictability to these 
programs, we recommend they be authorized as a $25 million annual set-
aside from the urban formula program. We also call for increased 
flexibility to use formula funds for training. With greater funding 
certainty, we can maximize the returns on this relatively modest 
investment: practical research results that are ready to deploy, common 
standards and best practices to improve safety and efficiency at all 
systems, and workforce training solutions for our increasingly 
sophisticated industry.
    Assisting communities in the wake of disasters will remain a 
fundamental role of the Federal Government. We support MAP-21's new 
Public Transportation Emergency Relief Program and urge Congress to 
fully and promptly fund transit relief and reconstruction projects in 
times of need.
Conclusion
    As we face record-high transit ridership on increasingly aging 
systems, reaffirming the Federal commitment to the millions of 
Americans who ride public transportation is more essential than ever. 
Therefore, we urge this Congress to authorize a Federal transit program 
with a 6-year investment level of $100 billion. The next program will 
require a wide variety of funding and financing options, but the base 
program must restore and increase the purchasing power of the Federal 
motor fuels user fee. In the most mobile Nation in the world, public 
transportation links people, neighborhoods, and businesses--
efficiently, safely, and reliably. Investment in public transportation 
is much more than building physical infrastructure; it is an expression 
of our collective national will to keep moving forward.
    Chairman Shelby, we thank you and the Committee for allowing us to 
provide testimony on these critical issues. We look forward to working 
with you, Ranking Member Brown, and the Members of the Committee as you 
work to develop this next critical authorization bill.
                              Attachment A
                              
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



                 PREPARED STATEMENT OF BARBARA K. CLINE
 Upper Midwest Regional Director, Community Transportation Association 
                               of America
                             April 23, 2015
    Chairman Shelby, Ranking Member Brown, and Members of the 
Committee: Thank you for inviting me to appear before you today to 
discuss building on the success of the Nation's surface transportation 
legislation--Moving Ahead for Progress in the 21st Century Act, known 
as MAP-21--and how we can better deliver safe, efficient, and effective 
public transportation services.
    I appear before you today as the Upper Midwest Regional Director 
and Immediate Past President of the Community Transportation 
Association of America's (CTAA) Board of Directors, a national 
nonprofit, membership association committed to removing barriers to 
isolation and improving mobility for all people. The Association--
founded in 1989--provides informational resources, technical 
assistance, training and certification, and many additional resources 
to communities, transportation providers, and other groups to improve 
the quality of community and public transportation. I also serve on the 
Board of Directors and was Past President of the Dakota Transit 
Association--representing both North and South Dakota--as well as 
acting as the Vice Chair of the Spearfish Area Chamber of Commerce.
    CTAA represents the oft-unseen public transportation network in the 
U.S.--one comprised of rural and small-urban operators, agencies 
serving older Americans and people with disabilities, non-emergency 
medical transportation providers, mobility for our Nation's veterans 
and tribal transportation entities. CTAA members transport the toughest 
to serve populations in innumerable cost-effective and innovative ways, 
combining cutting edge technologies with old-fashioned community 
service. The Association actively supports important concepts like 
inclusive transportation planning, customer-based design-thinking 
strategic transit planning and new approaches to transit service 
design.
    I serve as the Executive Director of Prairie Hills Transit, located 
in Spearfish, S.D. Prairie Hills Transit serves a 12,000 square-mile 
service area and grew from an operation that started with a single van 
in 1989 to one today comprised of 38 vehicles and 50 employees in six 
South Dakota counties. I believe I am well-qualified to represent the 
more than 4,000 members of CTAA.
    We have a positive story to share. Since 2007 rural transit 
ridership is up 40 percent, and bus ridership in small-urban 
communities has increased by 40 million since 2010. At a time when more 
people are utilizing the mobility options we provide to get to work, 
crucial health care appointments and treatment, community services and 
otherwise lead the lives they're entitled to, the investment needed to 
support those options is all the more scarce. We're particularly 
concerned that rural and small-urban transit network today finds its 
ability to recapitalize their operations--simply to maintain current 
service--in jeopardy.
    In order to sustain our robust infrastructure of effective and 
efficient transportation options, the underlying partnership between 
Federal, State, and local investment must be preserved and 
strengthened; a sustainable, long-term funding mechanism for surface 
transportation programs must be secured by Federal legislation; and key 
programmatic changes need to be included in any authorization 
legislation that succeeds MAP-21.
The Importance of Federal Leadership
    From the groundbreaking Intermodal Surface Transportation 
Efficiency Act of 1991 (ISTEA) through its successors--1998's 
Transportation Equity Act for the 21st Century (TEA-21), 2005's Safe, 
Accountable, Flexible, Efficient Transportation Equity Act: A Legacy 
for Users (SAFETEA-LU) and MAP-21--there has existed a strong and 
recurring partnership between all levels of Government--Federal, State, 
and local--supporting the Nation's surface transportation network in 
all its forms. That partnership has produced innovative and efficient 
ways of helping Americans get where they need to go while also ensuring 
a sense of ownership in the processes and outcomes of establishing and 
maintaining vibrant transportation systems.
    In recent years, however, that foundational partnership has become 
imbalanced. The 2-year authorization period of MAP-21 led to less 
sustainable and predictable investment levels in relation to previous 
surface transportation authorizations. The subsequent extension only 
exacerbated these challenges. Under the nearly 3-year period covered by 
MAP-21 and its extension, levels of investment failed to keep pace with 
inflation rates, let alone account for skyrocketing demand for 
community and public transportation service, as riders take more trips 
on existing systems while new providers launch additional operations. 
The result has been a net decrease in investment in community and 
public transportation.
    The relative decrease in Federal investment in surface 
transportation programs has placed a greater onus on State and local 
governments to make up for the shortfalls. Since 2012, 15 States have 
passed new revenue measures to support transportation needs. Many have 
included new investment for roads and highways only. Local 
governments--which have been the last to recover from the economic 
downturn that began in 2008--are often stretched to maintain previous 
funding levels in support of transportation programs, let alone make up 
for the declining share of Federal investment.
    Federal leadership in supporting community transportation providers 
in rural and small-urban areas is even more crucial. While large-urban 
areas often enjoy substantial investment to support operating expenses 
from local and State sources and look to Federal program to deliver 
capital investment, rural and small-urban providers rely more heavily 
on Federal support for both capital and operations. That Federal role 
was magnified with the economic downturn, as many State and local 
avenues for operating funds dried up completely. CTAA members rely on 
the Federal partnership to level the playing field.
    Moreover, the type of work we do--not only in rural areas but all 
American communities--crosses State and local boundaries. Often, people 
live a good distance from where they work and need an affordable and 
reliable way to get to their job sites in an neighboring county or 
State. That need is even greater for access to health care. Regulations 
and procedures of many health insurance programs stipulate the exact 
location where treatment or prescriptions can be received, paying 
little attention to the distance needed to be traveled to get to and 
from those facilities. This is all the more true for our Nation's 
veterans, who often find their closest VA location to be hundreds of 
miles away. These are the type of needs that demands an active and 
robust Federal role.
A Sustainable Source of Revenue
    Inherent in the need for greater investment in our Nation's surface 
transportation network is the realization that we need a source of 
revenue to support that investment. Due to the combination of Americans 
driving less--thanks to the availability of reliable and affordable 
community and public transportation options, along with newfound 
interest in biking and walking--and improved fuel efficiency in 
automobiles, the Highway Trust Fund, along with its Mass Transit 
Account, no longer generates enough revenue to meet the Nation's need 
for surface transportation programs.
    MAP-21 and its subsequent extension closed the difference between 
Highway Trust Fund revenues and expenditures through a series of one-
time, stop-gap revenue sources that provided only short-term relief. It 
was also these same limited revenue streams that reduced MAP-21's 
authorization period to only 2 years.
    A new surface transportation authorization must avoid the penny-
wise-but-pound-foolish approach to revenue sources. America's community 
and public transportation providers--as well as the full surface 
transportation program--cannot afford another short-term authorization 
followed by a series of extensions that provide returns that barely 
keep up with inflation and offer little stability for long-term 
budgeting and project development. The ability to purchase even a 
single new bus has been jeopardized by the unpredictability of the MAP-
21 era, let alone the ability to construct a new maintenance facility 
or plan for a new Bus Rapid Transit or rail line.
    Collectively, CTAA's members are neutral on the source of new 
revenue to make up for the shortfalls in the Highway Trust Fund. 
Members of Congress and the Obama administration have offered varying 
alternatives, each of which should receive due consideration. We 
recognize that sufficiently investing in the Nation's surface 
transportation infrastructure--of which community and public 
transportation is a vital component--requires difficult choices on the 
part of Congress. But they are choices that at this time must be made. 
The current piecemeal approach of generating revenue to support surface 
transportation programs only succeeds in costing more money to produce 
the same outcomes, resources that should be better spent in addressing 
the Nation's unmet transportation needs.
    As an association, we believe that transportation is a basic right 
for all Americans that requires Federal investment paired with support 
from State, county, and local governments, as well as the means to 
encourage partnerships with the private sector and nongovernmental 
interests. This national mobility need requires a strategy that 
increases investment by responding to growing demand while enhancing 
productivity in all communities, regardless of location or size.
MAP-21: Changes Are Necessary
    Despite both its troubling reliance on one-time revenue sources and 
limited duration, in many ways MAP-21 continued strong investment in an 
array of Federal programs that support the Nation's surface 
transportation network. This was especially true for the longstanding 
formulized programs delivering investment for community and public 
transportation in urban (5307) and rural (5311) areas and for older 
Americans and people with disabilities (5310), all of which saw 
increases under MAP-21, albeit not as large as they initially appear 
due to the law's program consolidations. However, several programmatic 
changes under that legislation have produced significant, negative 
impacts on rural and small-urban transit providers while still others 
are necessary to respond to an ever-shifting industry.
Investment in Capital for Buses and Bus Facilities
    Since ISTEA, a robust, dedicated program to support the capital 
needs of transit systems to replace aging vehicles and construct new or 
improved facilities has helped produce strong and vibrant community and 
public transportation networks across the Nation. This program, 
formerly Section 5309, was replaced by the Section 5339 Bus and Bus 
Facilities program under MAP-21 and its funding reduced by more than 
half. Although increased investment in the Section 5307, 5310, and 5311 
programs was intended to compensate for this reduction, the effort to 
streamline programs such as the former Section 5316 Job Access and 
Reverse Commute (JARC) and Section 5317 New Freedom programs meant that 
purported levels of increase in the rural and urban formulas did not 
correspond with the reduced capital funding levels for bus and bus 
facilities. At the same time, new rural and small-urban systems began 
operations, slicing the pie even further.
    Additionally, for the first time in Federal surface transportation 
legislation, MAP-21 organized bus and bus facility capital funding 
under the 5339 program as a formula-based distribution, rather than 
through discretionary allocations. While this change allowed a wider 
and more consistent distribution of bus capital funding, it also meant 
many recipients received less than under previous authorizations. 
Although each State receives at least $1.25 million per year under MAP-
21 for rural bus replacement needs, that's barely enough to replace a 
couple of old buses at one system, let alone an entire State's capital 
backlog. Even when accounting for rural and urban bus capital programs, 
half the States receive less than $5 million per year.
    In my home State of South Dakota, our Department of Transportation 
estimates that $2.9 million is needed each year for the next 8 years to 
adequately replace the rural bus fleet. That's in stark contrast with 
the $1.25 million South Dakota receives in Federal investment for rural 
transit under the MAP-21 5339 program. What's more, Prairie Hills 
Transit's 5311 formula allocation actually decreased in MAP-21. In 
Alabama, Birmingham alone has a capital replacement need of $29.7m over 
the next 4 years. The entire State of Alabama receives $3.7m per year 
from Section 5339. In North Dakota, the State Department of 
Transportation estimates a current $9.9m capital backlog--the State 
receives $1.7m annually in Section 5339 funds.
    The impact of this ongoing underfunding of bus capital needs will 
have drastic consequences across the Nation. According to a recent 
study, a one-time investment of $699m is needed to help return 
America's rural transit systems to a state of good repair. But over the 
next 5 years under MAP-21, Section 5339 will invest just $312.5m in 
rural bus capital funding, far short of the $1.6 billion the report 
says is necessary to maintain a state of good repair for rural transit.
    In the end, it's the riders and employees of our Nation's transit 
systems that will suffer from a lack of restored bus capital 
investment. Service cuts and fare increases are already a necessity for 
many providers and it's a trend that will only worsen with current 
dedicated bus capital funding levels. This will fundamentally impact 
the ability of ordinary Americans to get to work, the doctor and 
wherever else they need to go and get there affordably. According to 
the U.S. Department of Labor, transportation costs are the second 
greatest expenditure of most Americans, after only housing. Meanwhile, 
without Federal leadership in dedicated bus capital investment, 
community and public transportation providers will have to make 
difficult budgetary choices that could lead to layoffs of hardworking 
employees who live and work in the communities we serve.
    Beyond the consequences to our passengers and coworkers, older 
vehicles are both more costly to repair and maintain while also less 
safe to operate. Without an adequate and reliable dedicated investment 
stream for new buses, we're throwing good money after bad, spending 
more on replacement parts, major overhauls and labor costs in order to 
keep outdated vehicles on the road. This is hardly in keeping with 
efforts to ensure fiscal responsibility and act as good stewards of the 
public's investment. Additionally, in an era where both the Congress 
and the Federal Transit Administration are rightfully placing a high 
priority on safe operations--an effort wholeheartedly endorsed by our 
industry--it's counterintuitive to ask systems to continue to operate 
buses well past the end of their useful lives.
    CTAA has proposed developing a qualified intermediary lending 
program for rural, small-urban and specialized transportation 
providers. Programs like TIFIA often don't work for these types of 
operations. There are 41 active projects on the TIFIA/DOT Web site. The 
largest TIFIA investment is $949 million; the smallest is $42 million. 
It is not apparent that any of these are located in rural communities 
or small-urban areas. Funding for aging buses and vans in smaller 
communities is not on the radar of TIFIA, which is too complex for 
rural and small-urban communities with smaller projects. To remedy this 
CTAA proposes to establish a qualified intermediary lending program for 
rural and small-urban infrastructure projects eligible under TIFIA. 
This intermediary would be a `window' for States--like North and South 
Dakota--that are in desperate need of capital for equipment and simply 
cannot aggregate the capital to finance it.
    In sum, Congress must act to ensure that America's community and 
public transportation providers have the equipment they need to do 
their job safely, efficiently, and effectively.
Incentivize Performance: Expand the STIC Program
    Through 2005's SAFETEA-LU, Congress created the innovative Small 
Transit Intensive Cities (STIC) program that rewards transit systems in 
small-urban areas for meeting certain performance standards through 
metrics such as growth in ridership and vehicles miles. This program 
incentivizes communities to invest in and grow their small-urban 
transit systems in exchange for increased Federal investment to support 
operations. It's the perfect example of real performance measures in 
the Federal transit program.
    The program has been an unquestioned success, with small-urban 
systems boosting the capacity and efficiency of their service and 
realizing strong ridership growth. More and more of these communities 
are now making similar investments in small-urban transit in order to 
qualify for greater Federal support. A total of 165 small-urban areas 
have qualified under at least one of STIC's six categories since its 
creation.
    Congress wisely expanded this innovative, incentive-driven program 
under MAP-21, increasing the set-aside under the 5307 urban formula 
program that sustains STIC funding from 1 percent of total 5307 
investment to 1.5 percent. Because of the dramatic returns on this 
investment, we ask that Congress continue to reward excellence and 
commitment to small-urban transit efficiency and effectiveness by 
growing STIC's Section 5307 set-aside to 3 percent.
Supporting Tribal Transit
    Although MAP-21 made strides in supporting America's tribal transit 
providers by expanding the 5311 rural formula program where it exists 
as a set-aside and requiring no local match, the formulization of the 
program means tribal transit investment is now spread to a wider range 
of recipients. In many cases, this has produced substantial reductions 
in funding that threatens the very existence of transit service in 
numerous tribal communities. Others are facing significant service 
reductions, fare increases and workforce reductions. While new 
providers are always welcome to respond to unmet needs, maintaining 
existing options is just as essential.
    Tribal communities are among the Nation's most economically 
disadvantaged areas and also the most isolated. Resources from tribal 
governments to support mobility options are often difficult to obtain 
and can disappear quickly with shifts in tribal leadership. Federal 
leadership is again crucial to respond to the needs of America's tribal 
population.
Commonsense Regulations
    MAP-21 introduced a number of new regulations for community and 
public transportation providers, most notably covering safety, state of 
good repair, and transit asset management. These are well-intended 
objectives to ensure the riders who depend on the mobility options we 
provide arrive at their destinations safely and securely and that we 
invest in well-maintained infrastructure that reduces unnecessary 
expenses and improves reliability. However, the execution of these 
regulations by Federal agencies suggests that Congress must clarify and 
refine these stipulations.
    Most concerning is the process by which such regulations are 
developed and implemented. Too often, the community and public 
transportation industry has too little meaningful input in the process 
of developing regulations. When we are, it's often only representatives 
of the Nation's largest transit systems who are asked for input. 
Meanwhile, new regulations are often delayed by Federal officials--many 
MAP-21 regulatory mechanisms are still not finalized, nearly 3 years 
after the measure became law.
    All transit operations are not the same. Any one-size-fits-all 
mentality makes compliance difficult to achieve for smaller systems 
whose general manager not only oversees the budget but also is a driver 
and dispatcher. Rural transit systems simply do not possess the legions 
of administrative staff necessary to respond to regulations intended to 
address safety concerns on large heavy rail networks.
    Even when new regulations are both well-intentioned and well-
implemented, they never include additional resources to allow already 
cash-strapped agencies to achieve compliance. This means extra work for 
our employees with no new revenues to match the cost of their labor.
    CTAA and it's members support common sense regulations that include 
meaningful input from mobility providers of all kinds, consistent and 
timely decisions and communications from Federal officials and 
incentives tailored to the specific administrative needs of all transit 
systems.
Conclusion
    Public transportation in our Nation's rural and small-urban 
communities is a thriving enterprise that is succeeding thanks to the 
work of some of America's most outstanding public servants. I appear 
today before the Senate Banking Committee representing all of those 
individuals--my colleagues around the country--who keep people working, 
healthy, and enjoying their communities and lives.
    We believe--and rely upon--the long-standing Federal, State, and 
local partnerships to invest in our services. Indeed, there is much 
success to build on when it comes to reauthorizing MAP-21. The 
suggestions we raise today--addressing the bus capital crisis, further 
incenting small-urban transit performance by increasing the STIC set-
aside, reexamining tribal transit funding mechanisms and focusing on 
commonsense regulations--are relatively minor adjustments that we know 
can result in further, major, successes. CTAA and its leadership stand 
ready to assist this Committee and its Members in any way as we move 
forward.
                                 ______
                                 
                  PREPARED STATEMENT OF HARRY LOMBARDO
  International President, Transport Workers Union of America, AFL-CIO
                             April 23, 2015
Introduction
    Chairman Shelby, Ranking Member Brown, and distinguished Members of 
the Senate Banking, Housing, and Urban Affairs Committee, thank you 
very much for the opportunity to testify about the surface 
transportation reauthorization.
    My name is Harry Lombardo and I am the President of the Transport 
Workers Union of America (TWU). Our union represents workers in the 
public transportation, aviation, railroad, university, utility, 
services and gaming sectors. TWU's Transit Division members work around 
the country, including New York City, San Francisco, Miami, Houston, 
New Jersey, Columbus, Akron, Ann Arbor, Omaha, Winston-Salem, and 
Philadelphia, where I was president of TWU Local 234 for 7 years. TWU's 
Air Transport Division members are employed by many carriers, including 
Southwest Airlines, American Airlines, American Eagle, Virgin America, 
and Allegiant. The Railroad Division represents employees of Amtrak, 
Metro-North, New Jersey Transit, Path, Keolis (MBTA-Boston) SEPTA 
commuter rail, Norfolk Southern, CSX Conrail (SSA), and Union Tank. We 
also represent workers at Capital Bikeshare, Citi Bike, Divvy 
bikeshare, Hubway bikeshare, Columbia University, Harrah's Casino, 
National Grid utility, the New York and New Jersey Port Authority and 
people working on Government contracts with the Kennedy Space Center, 
Port Canaveral, Kings Bay Submarine Base, Fort Gordon, and Fort Lee.
    I started my transit career working for SEPTA as a car cleaner and 
became president of Local 234 in 1989. During my 7 years a local 
president, I learned firsthand that riders, workers, and businesses all 
benefit when public transportation gets the funding and support it 
needs to provide safe and reliable service to the public.
    Public transit is essential to the economic growth of our Nation 
and a well-funded reauthorization bill would put millions of Americans 
to work. Transit creates good jobs for bus drivers and mechanics at 
TWU, but also for the people who manufacture the vehicles, small 
businesses along bus routes, construction workers who build transit 
oriented development projects and millions of people who get to work on 
the bus and subway. When you look at the witnesses today, you see two 
people from organizations representing transit agencies, a 
representative of the American business community and a labor union 
president. We are all here to talk about how important public 
transportation is to our country. And when Government officials, 
business and labor all agree about an issue, our Nation's elected 
leaders should sit up and listen. On behalf of the TWU, I urge you to 
move forward with a well-funded, long-term surface reauthorization 
bill.
    TWU has variety of concerns relating to the reauthorization bill. 
Most importantly, policymakers need to increase funding for the Highway 
Trust Fund (HTF). Our union supports a gas tax increase, but we are 
open to a variety of solutions to address the HTF shortfall. But not 
all proposals are viable and we urge members of Congress to remember 
that innovative financing instruments can only address a small part of 
our national transportation funding crisis. These financing mechanisms 
are appropriate for some types of infrastructure projects but should 
not be allowed to degrade transit workers' wages, benefits or 
retirement security, all of which have a direct effect on creating and 
maintaining a safety culture. We urge Congress to preserve and restore 
Federal neutrality in public transportation privatization decision 
making to ensure that Federal officials do not mandate privatization 
decisions.
    Workplace safety and health conditions should be addressed, 
including lowering the spate of assaults on drivers and ensuring that 
workers have restroom access, all of which have a direct impact on 
creating and maintaining a safety culture. When budgets are tight, 
public transportation systems should be given flexibility to use 
certain types of Federal capital funds to pay operating costs on a 
temporary basis. Finally, transit worker labor protections should be 
preserved and expanded so that public transportation jobs can continue 
to provide the pay and benefits that are necessary to raise a family 
and retire with dignity.
Financing a Surface Transportation Reauthorization
    It is no secret that the real challenge for those of you working on 
the MAP-21 reauthorization is the need to agree on a way to increase 
funding. Without congressional action, the HTF will run out next month. 
There are a variety of ways to tackle this problem and TWU believes the 
most sensible approach is the same one that has worked since 1956--
increasing the gas tax.
    Several members of Congress have offered proposals to address the 
revenue shortfall. Last year, Sens. Bob Corker (R-TN) and Chris Murphy 
(D-CT) unveiled a bipartisan plan to raise the gas tax and index it to 
inflation, which they estimated would raise $164 billion over 10 years. 
In the House, Rep. Earl Blumenauer (D-OR) has been a tireless advocate 
for fixing the infrastructure crisis and providing HTF revenue. Earlier 
this year, he reintroduced the UPDATE Act (H.R. 680) to phase-in a 
nickel per gallon gas tax increase over each of the next 3 years and 
index it to inflation after that. These proposals are the most 
straightforward solutions to addressing the financing shortfall, but a 
variety of other approaches have also been offered.
    Over the last few years, many policymakers have advocated using tax 
reform to address the HTF shortfall by taxing repatriation of foreign 
corporate assets and using the windfall to fund the HTF. President 
Obama's Grow America Act included a provision to tax corporate assets 
that are stowed away overseas. Sens. Barbara Boxer (D-CA) and Rand Paul 
(R-KY) have introduced a bill that would shore up the HTF by assessing 
a 6.5 percent tax on repatriated corporate earnings. In the House, the 
Infrastructure 2.0 Act (H.R. 625), offered by Rep. John Delaney (D-MD), 
would fund the HTF for 6 years with these tax revenues. Each of these 
proposals makes important contributions to the debate and may 
ultimately be the pathway to find a bipartisan solution to the 
challenge. However, tax reform is extremely complex and it will be a 
particularly arduous task in an atmosphere of political polarization 
here in Washington. We cannot wait for months hoping for tax reform 
negotiations to be completed. Congress should act quickly so the 
reauthorization can move forward.
    Last week, Reps. Jim Renacci (R-OH) and Bill Pascrell (D-NJ) 
introduced legislation that would guarantee short-term funding for 
highway and transit programs while leaving the door open to a variety 
of long-term solutions. Their bill, H.R. 1846, would index the gas tax 
to inflation and create a bipartisan panel to make recommendations to 
address the revenue shortfall. If Congress failed to act on the panel's 
proposals the gas tax would automatically increase to fill the funding 
gap. Modeled after the Simpson-Bowles Commission, their bill would help 
to solve our insolvency problems and encourage the creation of viable 
and creative bipartisan solutions to the HTF shortfall. TWU supports 
this approach and encourages Senators to consider the merits of the 
proposal.
    I should also take a moment to respond to those who advocate for 
eliminating the Mass Transit Account or devolving transit to the 
States. These proposals impose unfunded mandates on States and ignore 
the needs of our national economy, which depends on an efficient and 
unified transportation system. Eliminating the Federal transit program 
would deliver a body blow to our national economy. Imagine what would 
happen if transit funding was eliminated and there was additional 
traffic congestion in the Northeast, when the Washington to Boston 
corridor alone contributes 20 percent of the U.S. gross domestic 
product. These radical proposals would affect commuters, the businesses 
that employ them and the companies that depend on transit, such as bus 
manufacturers. Our national funding debate should focus on ways to 
invest more into our transit systems and make the country better off, 
rather than encouraging divisive efforts to slash transit budgets and 
undermine our national economy.
    As Federal funding dries up, some transit agencies have been moved 
to consider turning to the private sector to provide public 
transportation service. MAP-21 included provisions to encourage this 
process by requiring the U.S. Department of Transportation (DOT) to 
promote private sector interests. Our union believes these reforms 
undermine the primary goal of good public transportation policy, which 
should create and sustain safe, prompt and convenient transportation 
for riders. Our concerns are borne out in a 2013 Government 
Accountability Office study of transit contracting, which found that 
private operators offer lower safety standards and service quality than 
the public sector. Any cost savings that are achieved often come from 
lower wages and fewer benefits rather than productivity gains or 
technological advancements. I urge you to roll back these pro-
privatization reforms and keep the ``public'' in public transportation.
    Policymakers are increasingly looking to public private 
partnerships (P3s) and other innovative financing tools to expand 
public transportation. In some circumstances P3s can play an important 
role in financing highway transportation projects, but TWU has serious 
concerns with any effort to use P3s to fund private transit operations 
and maintenance contracts. P3s should be designed to protect the public 
interest, provide transparency for taxpayers and safeguard front-line 
workers from arbitrary cuts. They are only suitable for a limited 
number of projects and they are not a substitute for a significant 
uptick in Federal funding. These financial instruments should not be 
used to revoke collective bargaining agreements, weaken worker 
protections, lower wages and benefits, or in service of a business 
model to extract savings at the expense of workers. Structuring 
innovative financing instruments to the detriment of the public or the 
affected workforce will only serve to undermine their long-term 
viability.
Budget Flexibility
    State and local budgetary problems often force transit agencies to 
cut service, reduce routes and lay off workers. To help sustain service 
to riders and the public, transit systems should be given the 
flexibility to use certain types of Federal capital funds to pay 
operating costs when budgets are tight. This flexibility should be 
targeted and temporary, triggered by broad economic problems or 
budgetary constraints, such as a rise in unemployment, a spike in gas 
prices or other temporary budget stressors. We encourage Congress to 
consider permitting the temporary use of previously firewalled capital 
funds for operating expenses to avert service and job cuts and fair 
increases.
Transit Safety and Health Issues
    MAP-21 included significant transit safety reforms and empowered 
the FTA to create and enforce Federal safety standards. We support the 
administration's efforts and encourage policymakers in Congress and the 
Administration to focus on workplace safety problems faced by transit 
operators every day. In recent years, there has been a dramatic rise in 
physical assaults against transit workers, particularly bus drivers. 
These attacks by passengers, often disgruntled by fare increases, take 
a variety of forms, from shootings to hitting, spitting, and verbal 
insults. When they occur on a moving bus, they create serious risks--
not only to the driver but also to pedestrians, other vehicles, and 
passengers. These attacks have led to labor-management summits in New 
York City and Philadelphia in an effort to find shared solutions to the 
problem. A variety of approaches have been considered, including 
increased policing, more severe punishments, the use of DNA kits, and 
others. As you write the reauthorization bill, we urge you to require 
the installation of barriers in buses to cut down on this type of 
abuse. Large, clear plexiglass screens should be installed between the 
bus operator and passengers using the fare box. This would eliminate 
most instances of assault, since an agitated passenger would be unable 
to touch the driver. The New York City MTA is already successfully 
moving forward with vehicle retrofits and the cost, sometimes less than 
$2,000 per bus, is far less than the cost of lost time and medical 
bills associated with most assaults on workers.
    Another health and safety issue faced by many bus drivers is the 
lack of bathroom access. There is no requirement that bus routes start 
or end in areas with restrooms. Obviously, this is a basic human need 
and the lack of restroom access contributes to long-term health 
problems for transit workers around the country. It also creates 
problems with distracted driving. A transit operator cannot safely 
drive a large transit vehicle full of passengers for long periods of 
time on a congested street when he or she has to go to the bathroom. 
TWU has worked with the San Francisco Municipal Transportation Agency 
to implement a new and promising approach to the problem. They are 
providing operators the use of restroom facilities by utilizing a mix 
of licenses, leases, and permits with stores and restaurants along 
transit routes.
Labor Standards
    TWU's reauthorization agenda is focused on providing high quality 
transit service and ensuring that transit jobs offer the pay and 
benefits that a worker needs to raise a family and live a middle class 
life. I cannot overstate the relationship between providing safe 
transit service and offering middle class jobs to qualified 
individuals. Middle class wages encourage employees to make a career 
out of their work. When an individual has a career they value, as 
opposed to just a job, they become vested in and take great pride in 
the quality of their work. The public should support fair wages in the 
transit sector because dedicated employees who have a career in transit 
care about the long-term quality of the work they do, which enhances 
safety and the safety culture. This offers a sharp contrast to many 
privatized jobs, in which low pay and minimal benefits lead to short-
term employees, lower safety standards and practices, and a vastly 
diminished quality of service. Labor standards are also an essential 
part of this approach. Transit labor protections help to safeguard 
reliable labor-management relations, a process that provides an 
experienced, safe and professional workforce while allowing for 
productivity improvements and technological innovation. TWU supports 
extending transit labor protections to include new innovative financing 
proposals and other legislative reforms in the reauthorization bill.
Conclusion
    I look forward to working with the Committee to advance public 
transportation policies that improve service for riders, spur our 
economy, and provide good jobs for transit workers.
    Thank you for allowing TWU to have this opportunity to testify 
before the Committee.
       RESPONSES TO WRITTEN QUESTIONS OF CHAIRMAN SHELBY
                     FROM BARBARA K. CLINE

Q.1. While the concept of stress testing has largely been 
advanced as one applicable to large rail, fixed-guideway 
systems, could they also could be utilized on the bus-only 
side? If so, what elements would need to be included?

A.1. Neither CTAA nor Prairie Hills Transit has enough 
understanding of the stress testing issue to provide an 
informed response to this question.

Q.2. We have heard a lot about the need for a discretionary bus 
program because of the substantial cost to buy vehicles and 
build facilities. But, if all transit agencies face that 
challenge, how do you make sure everyone that needs money for 
buses and facilities gets money?
    A discretionary grant program, I believe, forces transit 
agencies to chase funding rather than budget for their needs. 
It strikes me that a discretionary grant program cannot truly 
address everyone's needs whereas a formula program has that 
potential. Could you tell us first, how a discretionary grant 
program can ensure that every system that needs money can get 
money?

A.2. The primary issue for both CTAA and Prairie Hills Transit 
isn't so much about how dedicated bus capital gets distributed 
(formula or discretionary), but whether there's enough 
dedicated bus capital to meet core bus replacement needs.
    CTAA's national membership is split on the issue of 
discretionary vs. formula. Some would like to see a far more 
robust Section 5339 program that doesn't change a bit in terms 
of being a straight formula allocation. Others preferred the 
discretionary method.
    The problem with a solely discretionary program is that it 
cannot fairly address the capital needs of all transit 
agencies. In the old Section 5309 program, Earmarks went to the 
most politically connected transit systems and States. 
Competitive programs like the short-lived State of Good Repair 
bus capital program or even last year's Ladders of Opportunity 
Bus Capital program (both run through FTA) tend to go to those 
agencies most able to compete. The majority of small rural 
agencies are understaffed and do not have the expertise or 
available staff time to complete for the much needed capital 
replacement funds. CTAA has consistently advocated for a mixed 
discretionary and formula program for these reasons.

Q.3. Second, could you comment on the potential for a formula 
program to more fairly address the capital needs of all transit 
agencies?

A.3. If the Section 5339 formula-only program was closer to the 
$980 million level, we don't know if dedicated bus capital 
would be such a priority for CTAA members in MAP-21 
reauthorization. Under that scenario, for example, South Dakota 
would have enough dedicated bus capital to meet current needs.

Q.4. The practice of ``chasing funding'' was an important topic 
of discussion during one of the Committee's roundtables. While 
it has become standard operating procedure for many transit 
systems, I do not view it as a responsible way to account for 
the single most important asset of a transit agency. Ignoring 
capital asset replacement needs may make it easier to develop 
an annual budget, but it doesn't seem realistic or prudent. 
That said, I want to defer to your experience in the transit 
field and ask you--is chasing funding for large scale capital 
expenses the most appropriate way to manage the asset 
replacement needs of a transit system? What happens if the 
transit system is not successful in its efforts?

A.4. We agree, chasing funding is not an optimal transit 
business practice, particularly when you're talking about vital 
rolling stock replacement schedules. Predictable, dedicated bus 
capital revenue at reasonable levels is far more preferable. 
The results of a transit system that is unsuccessful in chasing 
funding--or that doesn't have access to the necessary dedicated 
bus capital funding in a formula--are service reductions, fare 
increases, job losses or, at best, unsafe/unreliable service.
    Neither Prairie Hills Transit nor the transit professionals 
with whom I speak ignore capital asset replacement--it is not 
realistic or prudent. Today, many rural and small city transit 
managers are faced with difficult decisions about operating 
expenses and capital replacement. In the best of financial 
times, it is a balancing act. In tough times like today it is 
far more difficult because after MAP-21's passage we all 
experienced reduced dedicated bus capital and no growth in our 
standard formula programs. In order to successfully compete for 
and retain revenue-earning contracts such as NEMT and veterans 
services, rolling stock must be safe, reliable and efficient.

Q.5. Are there other options available to make these capital 
investments? For example, can a transit agency avail itself of 
financing or leasing options?

A.5. There are other options available, in terms of both 
leasing and financing. But these innovative finance programs 
are far more difficult in today's environment due to 2-year 
surface transportation bills and the numerous extensions of 
Federal transportation law, as well as FTA viewing such 
activities negatively. CTAA has some additional, specific ideas 
on leasing and financing options that it feels could be helpful 
to rural and small-urban operators.