[Senate Hearing 114-244]
[From the U.S. Government Publishing Office]




                                                        S. Hrg. 114-244
 
 SURFACE TRANSPORTATION REAUTHORIZATION: PERFORMANCE, NOT PRESCRIPTION

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

                                HEARING

                               before the

                 SUBCOMMITTEE ON SURFACE TRANSPORTATION
                  AND MERCHANT MARINE INFRASTRUCTURE,
                          SAFETY AND SECURITY

                                 of the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 24, 2015

                               __________

    Printed for the use of the Committee on Commerce, Science, and Transportation
    
    
                             
                             
                             
                             
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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                   JOHN THUNE, South Dakota, Chairman
ROGER F. WICKER, Mississippi         BILL NELSON, Florida, Ranking
ROY BLUNT, Missouri                  MARIA CANTWELL, Washington
MARCO RUBIO, Florida                 CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire          AMY KLOBUCHAR, Minnesota
TED CRUZ, Texas                      RICHARD BLUMENTHAL, Connecticut
DEB FISCHER, Nebraska                BRIAN SCHATZ, Hawaii
JERRY MORAN, Kansas                  EDWARD MARKEY, Massachusetts
DAN SULLIVAN, Alaska                 CORY BOOKER, New Jersey
RON JOHNSON, Wisconsin               TOM UDALL, New Mexico
DEAN HELLER, Nevada                  JOE MANCHIN III, West Virginia
CORY GARDNER, Colorado               GARY PETERS, Michigan
STEVE DAINES, Montana
                    David Schwietert, Staff Director
                   Nick Rossi, Deputy Staff Director
                    Rebecca Seidel, General Counsel
                 Jason Van Beek, Deputy General Counsel
                 Kim Lipsky, Democratic Staff Director
              Chris Day, Democratic Deputy Staff Director
       Clint Odom, Democratic General Counsel and Policy Director
                                 ------                                

      SUBCOMMITTEE ON SURFACE TRANSPORTATION AND MERCHANT MARINE 
                  INFRASTRUCTURE, SAFETY AND SECURITY

DEB FISCHER, Nebraska, Chairman      CORY BOOKER, New Jersey, Ranking
ROGER F. WICKER, Mississippi         MARIA CANTWELL, Washington
ROY BLUNT, Missouri                  CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire          AMY KLOBUCHAR, Minnesota
JERRY MORAN, Kansas                  RICHARD BLUMENTHAL, Connecticut
DAN SULLIVAN, Alaska                 BRIAN SCHATZ, Hawaii
RON JOHNSON, Wisconsin               EDWARD MARKEY, Massachusetts
DEAN HELLER, Nevada                  TOM UDALL, New Mexico
STEVE DAINES, Montana


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on March 24, 2015...................................     1
Statement of Senator Fischer.....................................     1
Statement of Senator Booker......................................     2
Statement of Senator Blunt.......................................     4
Statement of Senator McCaskill...................................     4
Statement of Senator Peters......................................     5
Statement of Senator Wicker......................................    34
Statement of Senator Blumenthal..................................    37
Statement of Senator Klobuchar...................................    39

                               Witnesses

Peter M. Rogoff, Under Secretary for Policy, U.S. Department of 
  Transportation.................................................     6
    Prepared statement...........................................     7
Hon. David B. Nichols, P.E., Director, Missouri Department of 
  Transportation, and Acting Chair, American Association of State 
  Highway and Transportation Officials (AASHTO) Standing 
  Committee on Performance Management............................    13
    Prepared statement...........................................    14
John D. Graham, Ph.D., Dean, School of Public and Environmental 
  Affairs, Indiana University....................................    21
    Prepared statement...........................................    22
Dr. Peter Sweatman, Director, University of Michigan 
  Transportation Research Institute..............................    26
    Prepared statement...........................................    27

                                Appendix

Response to written questions submitted to Hon. Peter M. Rogoff 
  by:
    Hon. John Thune..............................................    45
    Hon. Richard Blumenthal......................................    46
Response to written questions submitted by Hon. John Thune to:
    John D. Graham, Ph.D.........................................    48


                         SURFACE TRANSPORTATION



                     REAUTHORIZATION: PERFORMANCE,



                            NOT PRESCRIPTION

                              ----------                              


                        TUESDAY, MARCH 24, 2015

                               U.S. Senate,
         Subcommittee on Surface Transportation and
            Merchant Marine Infrastructure, Safety and Security,   
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 10:03 a.m. in 
room SR-253, Russell Senate Office Building, Hon. Deb Fischer, 
Chairman of the Subcommittee, presiding.
    Present: Senators Fischer [presiding], Blunt, Wicker, 
Booker, McCaskill, Klobuchar, Blumenthal, and Peters.

            OPENING STATEMENT OF HON. DEB FISCHER, 
                   U.S. SENATOR FROM NEBRASKA

    Senator Fischer. This hearing will come to order. Good 
morning. I will now convene the Senate Subcommittee on Surface 
Transportation and Merchant Marine Infrastructure, Safety, and 
Security for our fourth hearing, titled ``Performance, Not 
Prescription.''
    This is the second hearing in a series on the 
reauthorization of our surface transportation programs. Today 
the Subcommittee is examining performance-based measures for 
our Nation's surface transportation programs. A performance-
based system will require regulators to set target objectives 
and leave compliance strategies to the discretion of the 
regulated entity.
    All too often, Federal regulators provide industry with 
prescriptive directions. Mandating specific designs or exact 
behaviors can potentially distort the ultimate goal of 
regulation. Not only do prescriptive regulatory mandates demand 
time and money from stakeholders, they require regulators to 
gain technical expertise that is often well outside of the 
given agency's original mission. Moreover, prescriptive 
regulations embolden rent-seeking behavior.
    Performance-based regulations provide the opportunity for 
better collaboration between industry and the Federal 
Government. Regulators and stakeholders need to work together 
to achieve greater transparency and monitoring of progress 
toward performance targets.
    In January, Lance Fritz of Union Pacific Railroad testified 
before this subcommittee. He noted that, quote, ``the point of 
a performance-based goal is to focus attention on the outcome, 
not the method.'' He also explained to the Committee that there 
is little evidence that rigid design-based standards have a 
positive impact on railroad safety, but prescriptive 
regulations hamper innovation and carry a high cost for the 
Federal Railroad Administration and to railroad companies.
    Since 2008, the Government Accountability Office has 
recommended that surface transportation programs take a 
performance-based approach to achieve better outcomes and to 
allocate resources more effectively. In a January 2015 report, 
the GAO found that, while the Department of Transportation is 
progressing toward a performance-based approach, states and 
grantees face implementation challenges. These obstacles 
include inadequate amounts of data, impeded access to 
proprietary data, and insufficient staff resources for 
monitoring and evaluation.
    The safety and efficiency of our Nation's highways and 
infrastructure could also benefit from a performance-based 
approach to regulations that offer flexibility and encourages 
innovation.
    For example, had the Federal Motor Carrier Safety 
Administration focused on an outcome-based approach to address 
its most recent iteration of truck-driver hours-of-service 
regulations, it is reasonable to assume that the regulations 
would have enhanced safety while not adversely affecting 
business operations. Instead, the overly prescriptive 34-hour 
restart provisions that were implemented in July 2013 mandate 
the exact time that drivers should sleep. This rule disrupted 
supply chains and led stakeholders to raise serious questions 
about the overall impact on safety of the regulation.
    At the same time, FMCSA is attempting to utilize a more 
data-driven approach with its Compliance, Safety, 
Accountability system scoring program. Although the CSA program 
is deeply flawed, implementing regulations that are informed by 
past performance and focus on future risk, it is a step in the 
right direction.
    Today we will review the progress that the Department of 
Transportation has made in implementing performance targets 
into our Nation's surface transportation programs. I look 
forward to hearing about both the successes, the challenges, 
and the opportunities for encouraging performance-based 
standards as we continue to explore surface transportation 
reauthorization.
    I would now like to invite Senator Booker to offer opening 
remarks.

                STATEMENT OF HON. CORY BOOKER, 
                  U.S. SENATOR FROM NEW JERSEY

    Senator Booker. Thank you very much, Chairman Fischer, for 
having this important hearing and continuing our discussion of 
these important issues.
    I apologize at the top. I have another competing hearing 
right now, so I will be leaving in about 30 or 40 minutes.
    But I am very excited to be here, with a focus on a broad 
range of issues. One of the most important that we should be 
focused on is how our transportation system is actually 
performing.
    It is actually struggling right now. It is not the high-
performing system that we would all like to see. Each day, 
commuters are stuck in traffic or packed onto train cars. In 
fact, people are losing the equivalent of 5 vacation days 
sitting in traffic each year. That is unacceptable. And our 
country's freight is stuck, too, at the ports, on our roads, 
and on the rails, costing our economy billions and billions of 
dollars.
    The way we are going to make things better is that they are 
going--if we don't do anything, though, things are going to get 
much worse. And that is unacceptable. We have to do more.
    So if we want to turn this around and get the train back on 
its track--pun intended, metaphor intended--it is up to us to 
make some big changes in how we invest in our infrastructure. 
The bulk of our Federal funding, about $40 billion a year, goes 
to highways, while only $10 billion goes to transit. Even less, 
just short of $1.5 billion, goes to passenger rail. And there 
is no surface transportation program dedicated to port 
infrastructure.
    Our Federal transportation funding overly prescribes how we 
fund the system rather than focusing on the performance of the 
system, which is obviously what we are here to talk about 
today.
    For example, in my state of New Jersey, all of our 
connectors into New York are at or near capacity whether you 
are traveling by car, on a bus, or on transit. That is why one 
of the most important projects is to build Amtrak's Gateway 
Project, a tunnel connecting New York and New Jersey that will 
add desperately needed capacity, create jobs, expand our 
economy, and fuel our country's most productive economic 
region.
    The Gateway Project will cost $15 billion. And where will 
the Federal contribution come from when we are not even 
spending, or investing, $2 billion a year in rail for the 
entire country?
    Other cities and states around the country are facing 
similar problems, from Chicago, to San Francisco, to Florida. 
That is why I am committed to trying to find new ways to invest 
in rail, ports, and transit systems. Last week, I introduced 
the Railroad Infrastructure Financing Improvement Act to unlock 
more capital and improve the way we finance all of our 
projects.
    And I think that is just the beginning of what we can do. 
We also need to be focused on how to improve the safety of our 
transportation system. Each year, more than 30,000 people die 
on our Nation's highways. That is an unacceptable carnage. We 
need to find ways to make meaningful reductions in these 
numbers.
    The last transportation bill took steps to increase 
performance in both safety and investment through performance 
measures, which is a start, but only a small step toward what 
many experts believe we should be doing.
    I believe there are lessons we can learn from that process 
to better understand how we can improve the performance of our 
transportation system and safety programs. I look forward to 
hearing from our witnesses today about how we should be 
thinking about the performance of our transportation system and 
what lessons we can learn from other efforts to improve 
performance.
    Thank you, Chairman.
    Senator Fischer. Thank you, Senator Booker.
    I would like to welcome our first panel of witnesses today: 
Mr. Peter Rogoff, the Under Secretary for Policy, with the 
United States Department of Transportation; Mr. David Nichols, 
Director, Missouri Department of Transportation, and Acting 
Chair of the American Association of State Highway and 
Transportation Officials, or AASHTO, Standing Committee on 
Performance Management; Dr. John Graham, the Dean of the 
Indiana University School of Public and Environmental Affairs 
and the former Administrator, Office of Information and 
Regulatory Affairs, Executive Office of the President; and Dr. 
Peter Sweatman, Director, University of Michigan Transportation 
Research Institute.
    We do have two Senators from Missouri on this committee, 
and I would offer to Senator Blunt and then Senator McCaskill 
the opportunity to welcome their constituents here today.
    Senator Blunt?

                 STATEMENT OF HON. ROY BLUNT, 
                   U.S. SENATOR FROM MISSOURI

    Senator Blunt. Well, thank you, Chairman. I know that 
Senator McCaskill and I are both proud of Dave Nichols and the 
great leadership he has provided at the Missouri Department of 
Transportation. He went to work there 30 years ago and has held 
almost every leadership job in the department, 2 years now as 
Director, the 2 years before that as Chief Engineer.
    And in our state, if you look at a highway map of America 
or a railroad map of America or a river map of America, focus 
in on where those three maps all come together, you are 
basically looking at where Senator McCaskill and Dave Nichols 
and I live. And he is the first Director of the Missouri 
Department of Transportation to ever come up with a plan that 
brings all of that together, looking to the future.
    He is also the Chairman of the Standing Committee on 
Performance Management for the national group that works with 
highway and transportation issues. So he not only is recognized 
where we live but all over the country as someone who is a 
leader on these issues.
    He is retiring this year, and my request of him today is to 
still be available to us, both on this committee and in our 
state, with the great expertise and dedication you bring to 
these issues.
    So thank you, Chairman.
    Senator Fischer. Thank you, Senator Blunt.
    Senator McCaskill?

              STATEMENT OF HON. CLAIRE McCASKILL, 
                   U.S. SENATOR FROM MISSOURI

    Senator McCaskill. I, too, want to thank Dave Nichols for 
his service to our state.
    Many people don't realize, but somebody had the brainy idea 
way back decades ago that the state would take over 
responsibility for maintenance of thousands of miles of county 
highways in our state, which means we have the seventh-largest 
highway system to maintain in the country. And I think we are 
either 46th or 47th in revenue. We have one of the lowest gas 
taxes in the country. The gas tax in Missouri hasn't been 
raised in over 20 years.
    And so I know that he didn't plan this, but he is going to 
be retiring at the apex of a crisis in our state. And I know he 
is busy working every day to try to convey to the people of 
Missouri that this problem is not one that is going to be 
solved in Washington. We do need to get our work done here, but 
we have a real problem with Jefferson City with the amount of 
resources that are going toward this critical infrastructure 
that makes us the economic powerhouse we are in Missouri 
because of our transportation needs of both interstate and--we 
won't get on barges today, but trains also.
    So thank you for being here, and thank you for your 
service. And thank you for being courageous as you lay out 
various alternatives for Missourians over the coming 2 years 
that we are going to have to face the reality of. Thank you 
very much.
    Thank you, Madam Chairman.
    Senator Fischer. Thank you, Senator McCaskill.
    We also have a member on this committee from the state of 
Michigan. And so I would offer time to Senator Peters if he 
would like to welcome his constituent here today, Dr. Sweatman.

                STATEMENT OF HON. GARY PETERS, 
                   U.S. SENATOR FROM MICHIGAN

    Senator Peters. Well, thank you, Senator Fischer. I really 
appreciate the opportunity to be here.
    And thank you for your very kind invitation to introduce a 
person from Michigan and someone who we have very high regard 
for because of his incredible work that he is doing leading the 
Michigan Transportation Research Institute at the University of 
Michigan.
    Dr. Sweatman, under his leadership, forming this institute, 
it is really going to be a leader in revolutionizing the 
mobility of people and freight. The institute will be working 
with industry, government, and academia. And the Michigan 
Transportation Institute will develop the foundation for a 
commercially viable ecosystem of connected and automated 
vehicles, work that could reduce vehicle fatalities and 
injuries as well as energy consumption and carbon emissions by 
as much as a factor of 10, which is really very, very exciting 
work.
    Dr. Sweatman has also been--and I know you continue to be, 
Dr. Sweatman--a strong advocate for preserving the 5.9 
gigahertz band of spectrum that was set aside by the FCC for 
V2V and V2I technologies. And I would certainly agree with you, 
Dr. Sweatman, and appreciate your advocacy, that the FCC should 
not move forward in opening that band up for shared use until 
it can be proven it can be done without harmful interference to 
this incredible lifesaving technology that you are developing 
at the University of Michigan.
    So I look forward to hearing your testimony today, as I am 
sure everybody on the Committee, in regards to how connected, 
automated vehicles and the data collected in their testing and 
deployment will play a pivotal role in shaping the future 
performance management for our nation's transportation system.
    So, Senator Fischer and Senator Booker, thank you for 
allowing me to be here, and I look forward to working with you 
as you shepherd this legislation through the Senate. Thank you.
    Senator Fischer. Thank you, Senator Peters.
    With that, welcome to our panel. We will begin with your 
opening testimony.
    And, Mr. Rogoff, if you would begin, please. Thank you.

STATEMENT OF PETER M. ROGOFF, UNDER SECRETARY FOR POLICY, U.S. 
                  DEPARTMENT OF TRANSPORTATION

    Mr. Rogoff. Well, thank you, Madam Chairman, Ranking Member 
Booker and members of the Subcommittee. I do appreciate the 
opportunity to appear before you today.
    Before I begin my formal remarks, I want to pass along the 
condolences of Secretary Foxx and the entire administration to 
the families of the victims of Germanwings Flight 4U-9525. Our 
condolences go out to all of the people of Spain and Germany. 
And, as always, the FAA stands ready to assist those very 
capable aviation authorities in any investigation where we can 
be helpful.
    Safety is priority number one at the Department of 
Transportation, so we commend you for taking the time to review 
the critical issues surrounding safety regulation enforcement 
and industry performance as you prepare to tackle the next 
surface transportation reauthorization bill.
    This year, like last year, the administration will be 
formally submitting several important safety provisions for 
your consideration as part of our GROW AMERICA Act. Our 
proposed bill also includes several proposals intended to help 
our transportation system perform better, specifically by 
streamlining the environmental review process to get shovels in 
the ground faster.
    And I would point out, Chairwoman Fischer, that many of the 
proposals that are in Title I of the GROW AMERICA Act are 
closely aligned with some of the streamlining proposals that 
Lance Fritz from UP did testify to you about earlier.
    In summary, we would very much welcome this subcommittee's 
very careful consideration of our reform proposals, as many of 
them are in your jurisdiction.
    Back in 2012, the department formally adopted the use of 
risk-based safety management systems as a best practice for our 
regulatory and oversight posture across all of our safety 
agencies. And consistent with that policy, the department 
strongly supports the adoption and the use of performance-based 
standards when appropriate. In fact, we believe that actual 
safety performance of operators and grantees should inform the 
entire oversight posture of the department, including the 
development of regulations, enforcement efforts, and even in 
some instances the allocation of Federal grant funds.
    When approaching this tension between prescriptive and 
performance-based rules, it should be remembered that 
prescriptive rules have often served the American public quite 
well.
    Nowhere are our rules more prescriptive than in aviation. 
Between our regulations, guidance documents, and airworthiness 
directives, the FAA tells our airlines and plane manufacturers 
pretty much everything, including how they must clip a wire to 
a plane's fuselage.
    This huge volume of prescriptive safety rules has produced 
the busiest, yet the safest, aviation system in the world--a 
regulatory framework that continues to be copied by developed 
nations around the globe.
    Similarly, in the Federal Railroad Administration, very 
prescriptive safety rules, in combination with stepped-up 
enforcement and improved diligence by the nation's railroads, 
just yielded in 2014 the safest year on record when it comes to 
train accidents.
    Even so, we should not use the success of existing 
prescriptive rules as a rationale to slow the progress toward 
performance-based rules, especially new rules that might 
further enhance safety, lower costs, or be better tailored to 
each operator's unique safety vulnerabilities. And, in fact, 
both the FAA and the FRA are building on their success by 
adopting performance-based approaches.
    Transitioning to more performance-based rules must be done 
with great care. They should be pursued when there is strong 
data indicating that safety will be enhanced both for travelers 
and, importantly, for transportation workers who are on the 
front lines every day.
    Such performance-based rules must also protect the public 
when it comes to low-frequency but high-consequence accidents. 
The current challenges facing the FRA are an excellent case in 
point. I earlier observed that 2014 was the safest year in 
railroad history, but, as this committee, knows well, we saw 
derailments in 2014 and 2015 involving crude rail unit trains 
that must be addressed because of the threat that even one 
catastrophic accident can pose to a local community.
    A performance-based regulation, if poorly crafted, could 
declare victory based on aggregate safety performance while 
ignoring the rare but potentially disastrous impact of a high-
consequence event.
    Performance-based rules can only be successful through the 
continuous collection and analysis of a great deal of 
performance data. That requires both the operator and the 
regulating agency to have the necessary resources to collect 
and analyze the data to monitor compliance with a performance-
based standard.
    That, in turn, requires, as you pointed out, Senator 
Fischer, a heightened level of transparency and accountability 
on the part of the regulated companies for their day-to-day 
performance in meeting those performance standards.
    We at the DOT strongly believe that the best performance-
based safety systems are those that make the actual safety 
performance of regulated parties readily available to their 
customers and the general public. This real-life performance 
data is also critical to our department's ability to target 
limited oversight and enforcement resources on the operators 
and transportation corridors that pose the greatest risk.
    Our experience has been that not all operators or 
industries recognize or respect the need for such transparency. 
Absent a commitment to such transparency, performance-based 
regulations cannot work and this cannot be pursued.
    That concludes my statement. I apologize for going a few 
seconds over. And I stand ready to answer your questions.
    [The prepared statement of Mr. Rogoff follows:]

       Prepared Statement of Peter M. Rogoff, Under Secretary of 
      Transportation for Policy, U.S. Department of Transportation
    Chairman Fischer, Ranking Member Booker, and Members of the 
Subcommittee, thank you for the opportunity to appear before you today. 
Safety is the Department of Transportation's top priority, and I am 
happy to discuss with you the Department's efforts to improve safety 
across our transportation networks. The Department is using objective, 
data-driven decision-making processes to adopt new performance-based 
standards and to heighten the transparency of safety performance of 
public and private transportation system operators.
    The Department is committed to the vision of eliminating fatalities 
on our Nation's transportation system. Recently, the Secretary joined 
the National Strategy on Highway Safety Toward Zero Deaths, a vision 
for eliminating fatalities on our Nation's roadways. This is a 
significant step toward eliminating traffic fatalities. It also echoes 
a goal of the Department's Strategic Plan, to ``work toward no 
fatalities across all modes of travel.'' Improving safety means we must 
aggressively use all tools at our disposal--research into new safety 
systems and technologies, campaigns to educate the public, investments 
in infrastructure, targeted oversight and inspection activities, public 
transparency and accountability, and collaboration with our government 
partners to support strong laws and data-driven approaches to improve 
safety.
    Part of achieving this vision is adopting, to the greatest extent 
practical a performance-based approach for all new safety activities, 
including the development of new safety regulations, the enforcement of 
existing safety regulations, and other critical safety activities, such 
as public safety performance reporting.
    In the Department's Strategic Plan for 2014-2018, Secretary Foxx 
established accountability around safety, including performance-based 
standards and reporting systems to improve the safety of the entire 
transportation system. In 2012, then-Secretary LaHood formally adopted 
the Safety Management Systems (SMS) methodology as the official policy 
of the Department with respect to addressing safety and risk management 
activities. Some agencies within the Department, namely the Federal 
Aviation Administration (FAA), have longer experience implementing SMS 
while others, specifically the Federal Transit Administration (FTA), 
just recently acquired safety regulatory authority and is moving 
aggressively to adopt a performance-based standards approach as it 
develops a comprehensive regulatory framework.
    Using SMS as a framework, our priority is to use our safety 
programs and regulations as effectively as possible and direct Federal 
resources to address the most serious safety risks. Performance-based 
standards and the use of safety tools, such as improved data 
collection, hold significant promise to reduce crashes, fatalities and 
injuries for users of the transportation system. As noted in the recent 
Government Accountability Office (GAO) report on performance measures, 
the Department has initiated numerous performance-based approaches 
across many agencies and together with many of our grantees.
    However, the shift to a performance-based approach can be 
challenging. It can be complicated to design, may require more and 
better data and risk models than currently available, and may require 
different skills of operators and regulators compared to traditional 
prescriptive (e.g., design) standards. Overseeing a performance-based 
approach can be more complex than a more prescriptive one. The 
determination of ``adequacy'' of compliance with a non-prescriptive 
standard can be considerably more challenging than the simple ``black 
and white'' compliance of a prescriptive (e.g., design) standard. 
Additionally, there may need to be a greater willingness by the 
operator to provide data not otherwise available to the regulator. 
Finally, performance-based regulations will function poorly when 
implemented in the wrong way, or under the wrong conditions.
    Additionally, some modal administrations with a long history of 
oversight will have to balance their performance-based evolution while 
carefully examining existing practices for opportunities to move to 
performance-based approaches without compromising safety or disrupting 
current approaches that industry and the Department both agree are 
working effectively to promote safety outcomes. Nonetheless, the 
Department is committed to creating a performance based culture across 
our regulatory programs.
    Ultimately it is the operator's responsibility to operate safely. 
However, given the vast numbers of operators of varying levels of 
sophistication, the Department has the responsibility to communicate, 
educate, develop new knowledge and technical solutions, and drive risks 
from any operation to as low as is reasonably achievable.
MAP-21 Performance Measures
    The Department has made solid progress addressing the MAP-21 
requirements intended to make the surface transportation programs more 
performance-oriented. For example, the Federal Highway Administration 
(FHWA) is developing a series of rules that will continue to transform 
the Federal Highway Program to a performance and outcome based program 
by increasing coordination, linking investments to outcomes, and 
improving decision-making and the efficacy and transparency of national 
reporting. We expect that the safety performance measure rule in 
particular, when completed, will provide us with a clearer picture of 
complex crash and roadway characteristic patterns, and better fatality, 
serious injury and roadway data, thereby allowing policymakers at all 
levels of government to make better decisions about how to invest 
limited resources for maximum safety benefit as well as making them 
more accountable for their decisions.
    As required under MAP-21, states that do not meet or make 
significant progress towards meeting their established safety targets 
will be held accountable. The FHWA published a Notice of Proposed 
Rulemaking (NPRM) last year that proposes to establish measures for 
State departments of transportation to use to carry out the Highway 
Safety Improvement Program (HSIP) and to assess serious injuries and 
fatalities per vehicle mile traveled, and the total number of serious 
injuries and fatalities. States failing to make significant progress 
would be required to use a Safety Implementation Plan to identify 
necessary steps to improve their safety performance and use HSIP 
dollars to address these safety concerns.
    MAP-21 also required performance measures for one of the Federal 
Motor Carrier Safety Administration's (FMCSA) top safety rulemakings 
that will mandate the use of Electronic Logging Devices (ELDs) to 
ensure greater compliance with the hours of service rules for certain 
truck and bus drivers. As part of this rulemaking, FMCSA is proposing 
new technical specifications for ELDs and the Agency has focused on a 
performance-based approach to the greatest extent practicable. For 
example, the draft rule would allow for a variety of options for ELDs 
from systems that are hard-wired to the vehicle to use of smart-phones 
and tablets which communicate with the truck or bus via wireless 
communications. The draft rule also proposed options for presenting the 
driver's record of duty status information to roadside enforcement 
officials, including use of the display screen, printouts, e-mail, or 
ELD-vendor hosted websites. That rulemaking should be completed later 
this year.
    MAP-21 also established program goals and mandated that FMCSA 
evaluate states' progress in meeting these goals for its primary safety 
grant program, the Motor Carrier Safety Assistance Program (MCSAP). 
MCSAP provides financial assistance to states to reduce the number and 
severity of crashes and hazardous materials incidents involving 
commercial motor vehicles (CMVs). To receive MCSAP funding, states must 
implement performance-based activities, including deployment of 
technology to enhance the efficiency and effectiveness of CMV safety 
programs. As a condition of receiving MCSAP assistance, states must 
develop and submit performance-based Commercial Vehicle Safety Plans 
(CVSPs). These CVSPs provide flexibility that allows each state to 
focus on the most serious problems unique to their state and allow the 
state to maximize limited resources while focusing on safety outcomes 
rather than outputs.
    As required by statute, FTA is implementing performance measures to 
make optimal use of its relatively new safety oversight and standards 
setting authority. In February 2015, FTA published a NPRM to strengthen 
the authority of State Safety Oversight Agencies (SSO). The proposed 
SSO rule reflects the flexible, scalable principles of Safety 
Management Systems that focus on organization-wide safety policy, 
proactive hazard identification, and risk informed decision-making as 
part of risk management, safety assurance, and safety promotion (safety 
training and communications).
    As FTA and the transit industry move towards a performance-based 
approach, they are working to make sure previous safety efforts are not 
discarded, and new standards are implemented in a careful and 
deliberate manner to ensure safety. The rulemaking process to advance 
the FTA's safety mission is progressing steadily and FTA plans to issue 
four additional NPRMs for safety plans and programs in the coming year.
GROW AMERICA Proposals
    The Moving Ahead for Progress in the 21st Century (MAP-21; Pub. L. 
112-141) took important first steps in advancing the Department's 
safety agenda. It established a streamlined and performance-based 
surface transportation safety program. The Administration's surface 
transportation reauthorization proposal, the Generating Renewal, 
Opportunity, and Work with Accelerated Mobility, Efficiency, and 
Rebuilding of Infrastructure and Communities throughout America Act 
(GROW AMERICA Act) seeks to build on the successes of MAP-21 with even 
stronger safety provisions that will include measures to make our 
surface safety regimes even more performance-based and data-driven.
    As articulated in the budget, the GROW AMERICA Act nearly triples 
the budget of the Office of Defects Investigation (ODI) in the National 
Highway Traffic Safety (NHTSA) to enhance our ability to monitor data, 
find defects sooner, and strengthen NHTSA's ability to conduct 
investigations of vehicles with suspected defects. The proposal 
establishes harsher penalties for manufacturers that refuse to address 
defective and dangerous vehicles and equipment.
    The GROW AMERICA Act also strengthens FHWA's Highway Safety 
Improvement Program (HSIP) to enable engineers to identify 
infrastructure and operational hazards to prevent the next crash. It 
bolsters the Department's safety authority by increasing civil and 
criminal penalties for FMCSA, NHTSA, and FTA and establishes emergency 
authority for FTA to restrict or prohibit unsafe transit practices. 
Further, this proposal provides more than $3 billion over six years 
through the Federal Railroad Administration (FRA) to assist with 
commuter railroad and Amtrak route implementation of performance-based 
Positive Train Control systems designed to prevent certain high-
consequence rail incidents.
    The proposal provides more than $10 billion over six years for 
NHTSA and the Federal Motor Carrier Safety Administration (FMCSA) to 
improve safety for all users of our highways and roads. The GROW 
AMERICA Act would also streamline our Federal truck-and bus-safety 
grant programs to make them even more performance-oriented while 
providing greater flexibility for States to address regional and 
evolving truck-and bus-safety issues. This means that our State 
partners will be able to use their Motor Carrier Safety Assistance 
Program funding for motor carrier safety in order to address local 
truck and bus issues while meeting national safety priorities. By 
consolidating our grant programs, our State partners will spend less 
time on administrative grant activities and more time on boots on the 
ground roadside safety. The bill would also enhance safety through 
stricter standards for vehicle operators and more rigorous inspections. 
The proposal also includes a $5.1 billion increase in 2016 to address 
public transit's maintenance backlog to reduce bus and fixed rail 
system breakdowns as well as increase overall safety and reliability.
    In addition, GROW AMERICA proposes to more than double available 
funding for the highly competitive Transportation Investment Generating 
Economic Recovery (TIGER) program, increasing available funding to 
$1.25 billion annually. Merit-based selection of transportation 
projects using detailed economic analysis of project costs and 
benefits, coupled with meaningful performance measurement of all 
projects further strengthens the Department's performance-based focus 
and emphasis on measurable outcomes for all grantees. The TIGER program 
has made significant investments in safety related projects. For 
example, in the last round of TIGER funding, New York City (NYC) 
received a $25 million grant to promote NYC DOT's Vision Zero approach, 
working to reduce transportation-related injuries and fatalities. The 
Administration hopes that this Committee will give careful 
consideration to the provisions included in the GROW AMERICA Act that 
will improve safety for the traveling public and strengthen our efforts 
in expanding performance-based approaches.
Data-Driven Processes and Safety Management Systems
    A systematic use of data has facilitated FRA's performance-based 
approach to system safety and risk reduction rulemaking efforts, as 
mandated by the Rail Safety Improvement Act of 2008 (P.L. 110-432). 
Last month, FRA published a rule proposing to require each Class I 
freight railroad and each other freight railroad that FRA determines 
has inadequate safety performance to develop and implement FRA approved 
risk reduction programs (RRP). RRP is a comprehensive, system-oriented 
approach to safety that determines an operation's level of risk by 
identifying and analyzing applicable hazards and involves developing 
plans to mitigate, if not eliminate, that risk. In September 2012, FRA 
published a companion rulemaking proposing to require commuter and 
intercity passenger railroads to develop and implement system safety 
programs; a final rule is scheduled to be published this summer.
    FRA intends these broader, system safety and risk reduction efforts 
to dovetail with other initiatives and make regulations more 
performance-based. Notably, in September 2009, FRA tasked its Railroad 
Safety Advisory Committee (RSAC) to produce a set of technical 
performance criteria and procedures to evaluate passenger rail 
equipment built to alternative designs, to ensure that trainsets based 
on international platforms can be built for and operated safely in the 
United States. FRA also tasked the RSAC to develop formal 
recommendations for addressing industry waiver requests for passenger 
equipment crashworthiness standards and alternative crashworthiness 
performance criteria into FRA's regulations. FRA will use the RSAC 
recommendations to inform a NPRM under development to seek public 
comment on allowing the industry greater flexibility to meet 
crashworthiness performance requirements. Similarly, FRA's March 2013 
final rule on vehicle/track interaction safety promotes the use of 
performance-based standards to ensure the safety of the vehicle and 
track system, based on results of computer simulations of vehicle and 
track dynamics, consideration of international practices, and thorough 
reviews of qualification and revenue service test data.
Performance-Based Versus Design-Based Standards for Equipage
    While the Department is committed to developing a performance-based 
culture across its modes, there are instances where it is more 
appropriate to adopt designed-based or a combination of design-and 
performance-based standards. When appropriate, moving from design 
standards to performance-based standards does require careful 
consideration to ensure the new standards actually improve safety and 
do not unintentionally introduce unknown risks that could compromise 
safety. Ensuring the safety of the traveling public and transportation 
employees must be the overriding factor of all regulatory decisions.
    For example, some dashboard warning lamps and hazard-related 
systems in vehicles are more appropriately design-based to ensure 
uniformity for driver understanding when switching between vehicles. 
NHTSA's standards sometimes mandate installation of certain systems or 
components, including headlamps, seat belts, air bags, rearview 
cameras, and electronic stability control, and at the same time include 
performance standards for those systems or components. Federal Motor 
Vehicle Safety Standard No. 208, ``Occupant Crash Protection,'' is an 
example of a performance based standard. It requires that the vehicle 
restraint systems, including the air bags, provide protection in a 
crash as measured by instrument readings on test dummies during 
prescribed crash tests. Of course, the standard also requires 
installation of certain devices, including some air bags. However, it 
does not dictate design and manufacturing considerations, such as the 
deployment thresholds, the air bag size, or color of wiring or 
connectors associated with air bags.
    Finally, with regard to packaging of hazardous materials, the 
Pipeline and Hazardous Materials Safety Administration (PHMSA) uses 
performance-based packaging standards for certain bulk and non-bulk 
packaging. These standards are based on United Nations (UN) 
Recommendations in which a packaging manufacturer must test a 
representative design type in accordance with standards stipulated in 
the Hazardous Materials Regulations. Once a design type has 
successfully passed a test, a manufacturer must mark every package that 
is represented as manufactured to meet that UN standard with the 
corresponding marking indicating the level of testing endured. These 
tests include drop tests, leak tests, a hydrostatic test, and a 
stacking test as well as other relevant tests based on the type of 
packaging. The benefits of this performance-oriented approach include 
industry's ability to apply innovative technologies (i.e., packaging) 
or non-traditional methods to meet the stated performance-based 
criteria without waiting for regulators to modify prescriptive (e.g., 
design-based) requirements to explicitly permit use of a new 
technology.
Performance in Safety Enforcement
    In addition to utilizing performance standards in developing 
regulations, the Department utilizes performance metrics, to the 
greatest extent possible, to guide our safety oversight activities.
    PHMSA's Integrity Management (IM) program is based on the 
fundamental premise that companies should be responsible for managing 
their own risks, with regulatory agency oversight of their processes, 
systems and performance. There is evidence that the IM program has been 
effective, based on the thousands of pipeline anomalies and defects 
that have been found and fixed as a result of the program--commonly 
viewed as ``accidents avoided''--and to improvements in technology that 
have been spurred by IM. Performance-based rules provide latitude to 
private sector operators to customize their compliance programs. This 
is reflective of the fact that operators manage pipelines created of 
differing materials manufactured over a very long period of time (with 
vintage-specific issues) in widely varying environments (e.g., 
differing soil types, weather) and near or remote from people and 
sensitive environments.
    Further, PHMSA maintains a data portal of pipeline incident reports 
that provides the time and location of the incident(s), number of any 
injuries and fatalities; commodity spilled/gas released, causes of 
failure, and evacuation procedures. The reports are used for 
identifying long-and short-term trends at the national, state and 
operator-specific levels. The frequency, causes, and consequences of 
the incidents provide insight into the safety metrics currently used by 
PHMSA, state partners, and other pipeline safety stakeholders, 
including the pipeline industry and general public. PHMSA also uses the 
data for inspection planning and risk assessment.
    The Department is also focused on making the information it 
collects and makes publicly available even more useful. For instance, 
PHMSA maintains a database with information collected when there are 
incidents involving hazardous materials, such as crude oil spills 
during rail transport. While the database contains valuable information 
about incidents, PHMSA has recently identified limitations to the 
information that impede its utility. For instance, sometimes the 
incident reports filed by industry do not contain the full extent of 
the property damage, cleanup, and remediation costs of an incident. 
PHMSA is considering ways to address these and other limitations to 
improve the utility and transparency of this database.
    FMCSA's primary large truck and bus enforcement program, 
Compliance, Safety Accountability (CSA), uses a Safety Measurement 
System that compiles motor carrier safety data through roadside 
inspections, investigations, and reportable crashes to measure a 
carrier's performance and prioritize carriers for follow up 
interventions. This is critically important as FMCSA has the resources 
to inspect less than two percent of all active motor carriers each 
year, so the Agency must target its resources effectively. FMCSA has 
sufficient performance data to make an intervention prioritization 
assessment for nearly 200,000 of the approximately 525,000 active motor 
carriers for which it has safety oversight responsibilities. More 
importantly, analysis reveals that those same 200,000 motor carriers 
are involved in approximately 93 percent of the crashes reported by our 
State partners.
    FMCSA's deployment of SMS has significantly raised safety awareness 
throughout the motor carrier industry. In calendar year 2011, the 
public website that provides a motor carrier's status in the SMS 
prioritization system hosted nearly 30 million user sessions, up from 4 
million user sessions under the prior public SafeStat system in 
calendar year 2010. FMCSA continues to receive feedback that this 
increased awareness and transparency has raised the status of safety 
within corporate cultures and we are seeing this increased awareness in 
improved safety compliance and performance data. For example, 
violations per roadside inspection were down by 8 percent in 2011, and 
driver violations per inspection were down by 12 percent. This is the 
most dramatic improvement in violation rates in the last 10 years.
    Additionally, the FRA rail-safety oversight framework relies on 
inspections to ensure railroads comply with Federal safety regulations. 
FRA inspects railroad infrastructure and operations, identifies safety 
defects, and may, if warranted, cite the railroads for violations of 
Federal safety regulations. FRA has developed and uses a risk-based 
approach to direct these inspection efforts. Like FMCSA, FRA inspectors 
are able to inspect just a small number of rail operations annually, 
and the agency estimates it inspects less than 1 percent of the 
railroad activities covered in regulation. As a result, railroads have 
the primary responsibility for safety of the railroad system. FRA has 
two tools to help direct its inspection efforts--the National 
Inspection Plan (NIP) and the Staffing Allocation Model (SAM). The NIP 
process uses past accident and other data to target FRA's inspection 
activities, and the SAM estimates the best allocation of the different 
types of inspectors across FRA regions in order to minimize damage and 
casualties from rail accidents. The FRA has also implemented a risk 
based inspection program for tank car facility inspections. Risk scores 
are assigned to tank car facilities based on performance history and 
type of tank car serviced.
    Further, FRA requires rail operators to provide monthly reports on 
all accidents and incidents resulting in injury or death to an 
individual or damage to equipment or a roadbed arising from the 
carrier's operation. This information is made available online and 
includes overall safety trends and searchable queries that provide 
specific information on exact location of incident, casualties, damage, 
cause of incident, and other operational data of the rail environment.
    FTA maintains a National Transit Database for the public that 
contains summary information on the number of safety incidents such as 
collisions, fires, derailments, as well as security incidents that have 
occurred in a fixed number of categories. In addition, to ensure proper 
accountability, a transit agency's chief executive officer must also 
certify on an annual basis the accuracy of the safety and security data 
previously reported by the transit agency.
    In nearly all of these examples, publicly available safety 
performance data is key to embracing a culture of safety 
accountability, providing transparent oversight and regulation, and 
ensuring that collective efforts are properly aimed at real risks based 
on actual data. PHMSA, FMCSA, FRA, and FTA provide specific safety data 
on publicly available websites.
    Together, these efforts are designed to ensure that safety 
management and regulatory decisions are objective, data-driven and 
transparent to the public, decision-makers, field personnel, and 
executive management alike. This transparency and accountability serves 
as a cornerstone for achieving tangible and measurable safety 
improvements across many different modes of transportation.
Conclusion
    The Department has made great strides to implement data-driven 
decision-making and performance-based standards where possible, while 
recognizing that design standards are still useful in certain 
circumstances. The Department is committed to continuing its efforts to 
facilitate industry technological innovations while still exercising 
proper safety oversight through thoughtful development and 
implementation of performance-based standards, and data-driven 
decision-making to reduce risk, maximize outcomes, increase system 
efficiency, and above all, maintain the absolute highest levels of 
safety for our transportation system.
    Madame Chairman, Ranking Member, Members of the Subcommittee, thank 
you again for the opportunity to testify before you today. I stand 
ready to answer your questions.

    Senator Fischer. Thank you, sir.
    Next, Mr. Nichols. Welcome.

      STATEMENT OF HON. DAVID B. NICHOLS, P.E., DIRECTOR,

       MISSOURI DEPARTMENT OF TRANSPORTATION, AND ACTING

          CHAIR, AMERICAN ASSOCIATION OF STATE HIGHWAY

             AND TRANSPORTATION OFFICIALS (AASHTO)

          STANDING COMMITTEE ON PERFORMANCE MANAGEMENT

    Mr. Nichols. Thank you, Madam Chairman Fischer, Ranking 
Member Booker, members of the Subcommittee. Thank you for this 
opportunity to provide input on the implementation of 
transportation performance management programs within the state 
departments of transportation.
    Today it is my honor to testify on behalf of the Missouri 
Department of Transportation and AASHTO. My main message this 
morning is to share with you my state's experience, along with 
that of other state DOTs, in implementing transportation 
performance management programs. Performance management, if 
implemented in a logical and thoughtful way, can be a powerful 
tool in managing the performance of the entire transportation 
system.
    This is not the first time State DOTs have implemented 
performance management concepts. The 12 national-level 
performance measures required as a part of MAP-21 are just the 
top layer of a much more robust set of performance measures 
state DOTs use on a regular basis to plan, program, and operate 
their transportation networks.
    All states have implemented some aspect of performance 
management. Colorado, North Carolina, Utah, Minnesota, and 
Maryland have created programs to manage their physical assets 
and focus on the principles of transportation asset management 
as opposed to a worst-first approach.
    Many other states have well-known performance management 
programs that go far beyond the management of just physical 
assets. For example, Missouri's Tracker is a tool to assess how 
well MoDOT delivers services and products to our customers. The 
Tracker's seven tangible results, which are the outcomes the 
public expects, guides us in everyday decisionmaking. To 
increase accountability, each of the seven tangible results is 
assigned to a specific senior leader, who is charged with 
meeting the department's goals and obtaining the associated 
metrics.
    The Tracker tool's flexible nature has allowed MoDOT to 
establish a performance-based culture and evolve with changes 
in both leadership and policy. Through flexibility and 
accountability, the Tracker ensures efficient and effective 
decisionmaking.
    Safety is a good example. Since implementing Tracker 10 
years ago, the number of fatalities on Missouri's roadways has 
dropped from 1,257 in 2005 to 766 in 2014.
    You may be aware that this week is National Work Zone 
Awareness Week, and in Missouri work zone safety is at the 
center of our culture. Staying safe in work zones is a 
partnership among MoDOT, our contractors, law enforcement, and 
the driving public.
    Our Tracker follows the number of fatalities, injuries, and 
crashes in work zones every quarter. By placing the focus on 
reducing those numbers, we can take actions that make work 
zones safer for everyone. Over 10 years, we have seen the 
number of work zone crashes drop from 4,492 in year 2003 to 
1,509 in 2013.
    MoDOT has used this performance management system to create 
a results-focused culture among its employees and improve 
satisfaction and credibility among its customers. Performance 
goals and results may change over time, but I am confident our 
performance management system will remain tightly woven in 
MoDOT's organizational fabric.
    The success of Tracker and performance management in 
general is not without its challenges, however.
    The first challenge is the cost to implement. It takes 
money and resources to collect, store, manage, and analyze the 
necessary data. These are funds that cannot be spent on 
projects and programs to improve safety outcomes. However, the 
data will be a valuable tool to improve safety.
    The second challenge we meet is the need to maintain 
certain minimum condition levels. State DOTs are concerned with 
the minimum condition requirements that were made without 
knowing what the full availability of funding is. AASHTO 
estimates that some State DOTs will not be able to meet certain 
minimum condition standards even if available funding were 
spent on improving bridge and pavement conditions.
    The third challenge we face is target-setting. Funding 
levels vary, as do environmental conditions, population growth 
trends, and legislative and gubernatorial mandates and other 
priorities. State DOTs and NPOs will be challenged to establish 
appropriate targets that take into account their unique 
situations.
    For the last decade, many State DOTs have developed and 
implemented comprehensive and robust performance management 
systems to balance investment decisions against resource 
limitations for a wide variety of areas, from safety to asset 
condition to the performance of the entire transportation 
systems. State DOTs are concerned with all these performance 
areas and must balance the funding of programs and projects 
across areas while meeting public expectations during a time of 
financial uncertainty.
    Madam Chairman, thank you so much, again, for the 
opportunity to testify today, and I would be happy to respond 
to any questions that you may have.
    [The prepared statement of Mr. Nichols follows:]

 Prepared Statement of Hon. David B. Nichols, P.E., Director, Missouri 
Department of Transportation and Acting Chair, American Association of 
     State Highway and Transportation Officials (AASHTO) Standing 
                  Committee on Performance Management
Introduction
    Chairwoman Fischer, Ranking Member Booker, and Members of the 
Subcommittee, thank you for the opportunity to provide input on the 
implementation of transportation performance management programs within 
the State Departments of Transportation. My name is David Nichols, and 
I serve as the Director of the Missouri Department of Transportation 
(MoDOT) and the Acting Chair of the American Association of State 
Highway and Transportation Officials' (AASHTO) Standing Committee on 
Performance Management. Today it is my honor to testify on behalf of 
the State of Missouri and AASHTO, which represents the State 
departments of transportation (State DOTs) of all 50 States, 
Washington, D.C., and Puerto Rico.
    I have been honored to serve as Director of the Missouri Department 
of Transportation for the past two years. I have spent the past 31 
years in public service at MoDOT, starting in 1984, and have served in 
a variety of leadership roles, including District Engineer, Director of 
Program Delivery, and Chief Engineer, prior to becoming Director.
    Three of my passions have been: safety on our roadways, for 
motorists, passengers, pedestrians and highway workers; innovation in 
everything we do in order to give our customers the best value for 
every dollar they invest in transportation; and diversity within our 
workforce, both for the MoDOT team and our contracting partners.
    Missouri has been a leader among the State DOTs in striving for 
better outcomes through implementation of transportation performance 
management principles. And in my role as Acting Chair of AASHTO's 
Standing Committee on Performance Management, I lead the Association's 
work in identifying and implementing best practices and providing input 
and guidance on a number of Federal regulations that are currently 
being developed by the United States Department of Transportation 
(USDOT) in response to the important recent changes made in the Moving 
Ahead for Progress in the 21st Century Act (MAP-21) requirements.
    My main message this morning is to share with you the experience of 
the State DOTs, including my home state of Missouri DOT, in the 
implementation of transportation performance management programs. 
Performance management, if implemented in a logical and thoughtful way, 
can be a very powerful tool to MoDOT and our peer agencies in managing 
the performance of the entire transportation system. However, I must 
also note that performance management is not a panacea and cannot be 
expected to improve the condition of our transportation assets or 
performance of the transportation system in the absence of a robust 
transportation funding platform. It is critical that everyone works 
together to establish a long-term, sustainable transportation funding 
framework to truly see the benefits of transportation performance 
management. Without this funding base, all we can do as State DOT 
directors is to merely manage the gradual degradation of our national 
and regional transportation system that underpins our economy and 
quality of life.
    My testimony today will emphasize three main points:

  1.  State DOTs are already implementing performance management 
        principles;

  2.  Experience of Missouri DOT in implementing performance 
        management; and

  3.  Lessons to offer in implementing national-level performance 
        management requirements.
State DOTs Are Already Implementing Performance Management 
        Principles
    It is important to have a basic understanding of the concepts 
involved in performance management. Performance management is an 
iterative process that requires good data and feedback loops that 
inform the overall decision-making process. Most importantly, it takes 
time for performance management to show results. At the broadest level, 
performance management is about linking agency goals and objectives 
with resources and results as shown in Figure 1.


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    In the surface transportation context, state DOTs first establish 
goals and objectives. Goal areas may be developed within the agency or 
be directed to the agency from the governor, for example. Many State 
DOTs are now focused on linking the transportation system to improve 
economic development and growth. Other goal areas may focus on more 
traditional emphasis areas such as safety, operations, system 
performance and agency performance in areas such as project delivery.
    Second, agencies establish performance measures that are used for 
both day-to-day and strategic management. Broader performance 
management measures might include travel time and delay, fatalities and 
serious injuries as well as specific measures of agency performance 
such as on-time and on-budget project delivery.
    Third, an agency will make decisions on how to allocate resources 
within and across different types of investments based on an analysis 
of how different allocations will impact achievement of policy 
objectives and performance goals. For some goals, this may include 
forecasting the likely performance impacts of different strategies and 
setting performance targets. For example, a tradeoff analysis of 
reducing congestion may involve finding the right mix of capital 
expansion and operations strategies given the constrained funding 
resources available.
    Fourth, state DOTs must allocate the limited funding resources they 
have to the projects that will improve the overall performance of the 
transportation system. The allocation of resources is not about 
identifying projects that are ``wanted'' versus ``needed'' but rather 
which projects must be funded now versus those projects that can be 
delayed until additional funding is made available. State DOTs have 
many different tools for assisting decision makers in conducting 
resource allocation from sophisticated quantitative econometric models 
to more qualitative assessments conducted by staff.
    Finally, once the projects have been funded and built, the actual 
performance impact of programs and projects are tracked over time and 
provide the basis for evaluating the most effective strategies to 
achieve desired goals. Recognizing realistic timeframes for observing 
performance results and understanding that these timeframes will vary 
by performance area is important. For example, for many key performance 
measures related to economic development, pavement condition, and 
safety, changes in performance will only be observable over a number of 
years. On the other hand, some aspects of system operations or agency 
performance changes can be tracked on a monthly or even daily basis.
    One of MAP-21's key legacies is that it established a set of new 
national policy goals that aims to both focus and prioritize the 
Federal-aid Highway Program investments. While this is the first time 
that State DOTs, Metropolitan Planning Organizations (MPOs) and transit 
agencies are required to track, measure and report on transportation 
performance using a consistent, national framework, it is certainly not 
the first time that State DOTs have implemented performance management 
concepts. All states have implemented some aspect of transportation 
asset management, a subset of performance management. And, many State 
DOTs have implemented comprehensive and robust performance management 
systems to balance investment decisions against the varying resources 
and approaches provided by local, state and Federal Government.
    States such as Colorado, North Carolina, Utah, Minnesota, and 
Maryland have created programs to manage their physical assets and 
focus on the principles of transportation asset management as opposed 
to a ``worst-first'' approach. Other states such as Missouri, 
Washington State, and Virginia have well-known performance management 
programs that go well beyond the management of physical assets. 
Missouri's Tracker is a tool to assess how well MoDOT delivers services 
and products to their customers (http://www.modot.org/about/
Tracker.htm). Washington State's Gray Notebook is the Washington State 
DOT's quarterly accountability report that has been in existence since 
2001 (http://www.wsdot.wa.gov/Accountability/). Virginia DOT helped to 
pioneer the transportation dashboard concept (http://
dashboard.virginiadot.org/).
    What MAP-21 requires of the State DOTs and MPOs is to report on 
twelve national-level performance measures that U.S. DOT can use to 
tell a comprehensive story about the status of the Nation's 
transportation infrastructure. Often, these national-level measures are 
referred to as a thin layer of measures that sit on top of a much more 
robust set of performance measures that State DOTs use on a regular 
basis to plan, program, and operate their transportation networks.
    It's true that there have been, and will continue to be, many 
challenges to effectively implementing MAP-21. But I can also assure 
you that State DOTs are never one to shy away from a challenge. Over 
the past decade the States DOTs--through the National Cooperative 
Highway Research Program of the Transportation Research Board--have 
proposed, supported and actively engaged in applied research to advance 
the use of performance measurement to address complex management 
challenges and to enhance organizational and program effectiveness. 
This research has produced a series of comparative performance measures 
reports and compiled substantial know-how on successful data-and 
system-management techniques for performance measurement. More 
recently, the State DOTs, along with their MPO and transit partners, 
have been engaged with USDOT's Federal Highway Administration (FHWA) 
and Federal Transit Administration (FTA) in discussing, promoting and 
testing performance measures and performance-based planning and 
programming.
Experience of Missouri DOT in Implementing Performance Management
    State DOTs have significant experience in implementing performance 
management. I would argue that Missouri is one of the leaders in this 
area. While Missouri will work with the USDOT in implementing MAP-21 
performance management requirements, MAP-21 is focused primarily on 
national goals, national level measures, and the Federal investment. As 
the director of the Missouri DOT, I must also contend with a number of 
state goal areas and funding sources. I'd like to share with you some 
details about Missouri's efforts and how we document our performance.
The Need for Tracker, MoDOT's Performance Management Tool
    In the late 1990s and early 2000s, the Missouri Department of 
Transportation began to consider performance management and data-driven 
decision making, but struggled with how to start. In 2004, the 
department finally set itself on a path to start collecting data and 
publishing measurements on which we could continuously build.
    After establishing the agency's fundamental values and collecting 
the necessary data to develop performance measures, MoDOT published the 
first Tracker in January 2005. This publicly available report documents 
how MoDOT meets its goals and fulfills its mission and tangible results 
on a quarterly basis.
Focused on Customer Expectations
    MoDOT originally built the Tracker around 18 tangible results which 
have since been refined to the current seven. These are the outcomes 
the public expects, and they guide us in everyday decision making. To 
increase accountability, each of the seven tangible results is assigned 
to a specific senior leader who is charged with meeting the 
department's goals and obtaining the various associated metrics.
    The seven tangible results are:

  1.  Keep customers and ourselves safe

  2.  Keep roads and bridges in good condition

  3.  Provide outstanding customer service

  4.  Deliver transportation solutions of great value

  5.  Operate a reliable and convenient transportation system

  6.  Use resources wisely

  7.  Advance economic development
Accountability for Results
    MoDOT uses a range of performance measures to focus and encourage 
progress in achieving the tangible results. Every performance measure 
in the Tracker corresponds to a specific tangible result. Just as each 
tangible result is assigned to one senior leader, every underlying 
performance measure is assigned to a single staff member. The 
``measurement driver'' is the lead staff person responsible for 
collecting data and meeting the specific measurement's objective.
    This model ensures accountability both internally and with the 
public. Each staff member must report on his/her performance measure to 
me, senior leadership and various statewide staff at quarterly Tracker 
meetings. The quarterly Tracker allows MoDOT to continually monitor 
progress and provides transparent information to the public.
Multiple Measures Drive Performance Areas
    There are multiple performance metrics associated with each 
tangible result, in order to address it comprehensively. For example, 
``Keep Customers and Ourselves Safe'' includes metrics on fatality and 
injury reports as well as lost work days and general liability claims 
and costs. All metrics are collected quarterly, semi-annually, or 
annually through various data systems and other reporting means. The 
Tracker details how measurements are calculated and analyzed. The 
Tracker report is highly graphical, using charts to present each metric 
in a simple format. The charts frequently include benchmarks to show 
how MoDOT compares to other states or private corporations measuring 
similar elements.
Driving Results for Any Challenge
    The Tracker tool's flexible nature has allowed MoDOT to establish a 
performance-based culture and evolve with changes in leadership and 
policy. Through flexibility and accountability, the Tracker ensures 
efficient and effective decision making. Tracker has helped managers 
and employees at every level of the department make better daily 
decisions by providing the data and links to how those decisions will 
impact the agency's overall performance.
    Safety is a good example. Since implementing Tracker 10 years ago, 
the number of fatalities on Missouri's roadways has dropped from 1,257 
in 2005 to 766 in 2014. You may be aware that this week is national 
work zone awareness week, and in Missouri work zone safety is at the 
center of our safety culture. Staying safe in work zones is a 
partnership between MoDOT, our contractors, law enforcement, and the 
driving public. Our Tracker follows the number of fatalities, the 
number of injuries, and the number of crashes in work zones every 
quarter. By placing the focus of the performance measure on reducing 
those numbers, we can pursue actions that make work zones safer for 
everyone. Over ten years, we've seen the number of work zone crashes 
drop from 4,492 in 2003 to 1,509 in 2013.
    Our tangible result on keeping roads and bridges in good condition 
acknowledges one of our core functions and Missourians' desire for 
smooth pavements and bridges that can safely handle growing traffic 
demands. With the seventh largest highway system in the country (almost 
34,000 miles and over 10,400 bridges), Missouri ranks 46th in revenue 
spent per mile. We use performance data to focus our very limited 
resources to keep our most heavily traveled roads as smooth as 
possible.
    Since 2005 the percentage of major highways in good condition has 
increased from 60 percent to 89 percent. But by 2017, we face a funding 
crisis that will make these stats nearly impossible to maintain. When 
our construction awards drop below the amount needed just to maintain 
the system in the condition it's in today, we will struggle to meet 
these measures. But our performance management system will continue to 
help us make the best decisions on using every dollar we spend.
    We are focused on providing outstanding customer service. Every 
single MoDOT employee is responsible for this tangible result, and we 
strive to be respectful, responsive and clear in all our communication. 
With data-driven decisions and public input shaping performance 
metrics, MoDOT's customer satisfaction has increased from 67 percent in 
2005 to 85 percent in 2013. MoDOT's overall customer satisfaction has 
attained a level that exceeds the private sector--in 2012, Apple ranked 
at 83 percent, and the Missouri DOT hit 85 percent.
    Advancing economic development is yet another of Missouri's 
critical tangible results. Missouri's transportation system has a 
direct impact on the state's economy. Local, national and international 
businesses depend on our roadways, rail, waterways, transit and 
airports to move their products and get people to their jobs. We 
believe investments in transportation create jobs and provide 
opportunities for advancement to all Missouri citizens. An investment 
in transportation provides a positive economic impact on both the 
citizens we serve and the communities in which they live.
    One such performance measure we track is the economic return from 
transportation investment. Our customers and state decision makers can 
easily see how our construction program contributes to the economy 
through this measure. Based on MoDOT's 2015-2019 Statewide 
Transportation Improvement Program investment of $3.5 billion, the 
program is estimated to create 4,000 new jobs. Transportation 
investments are expected to contribute $10.1 billion of economic output 
during the next 20 years, resulting in a $3 return on every $1 invested 
in transportation.
    The figures tell a powerful story of economic success, but are also 
a sign of missed opportunity. When compared to the previous year's STIP 
(2014-2018), the number of jobs created estimate decreased 40 percent. 
Also, compared to a period of sustained transportation investment in 
our state from 2005-2010, when many major projects were completed, our 
return on investment was at $4 on every $1 invested in transportation.
    A year ago, MoDOT completed its long-range transportation plan. 
Utilizing a robust public engagement plan, we visited with thousands of 
Missourians where they live, work and play to learn their vision for 
Missouri's transportation future. Without question, one of the common 
themes they repeated over and over again was the desire for more 
transportation choices, and for improved integration of all of our 
modes of transportation. Because of our central location and because of 
the many transportation assets that we enjoy, this is important to our 
economic vitality and our quality of life. Our performance management 
system tracks the use and connectivity of our modes of transportation, 
and we also pay keen attention to our competitiveness in the efficient 
movement of goods.
    Because we administer state and Federal funds that pass through 
MoDOT and on to local public agencies, we have worked diligently to 
help them develop and deliver projects faster and on budget. The 
performance metrics established to that end have helped us see dramatic 
results in just a few years' time.
    MoDOT believes it is good business to support diversity, not just 
in MoDOT, but also among its contractors, subcontractors and suppliers. 
Contractors, subcontractors, and suppliers working on construction 
projects that receive Federal aid or Federal financial participation 
are required to take reasonable steps to ensure disadvantaged business 
enterprises have an opportunity to compete for and participate in 
project contracts and subcontracts. Here, too, we have made data-driven 
decisions, which have helped us improve our DBE participation by 78 
percent over the past three years.
Looking Ahead
    MoDOT has used its performance management system to create a 
results focused culture among its employees and improved satisfaction 
and credibility among its customers. It has provided an organizational 
framework for a decade of leaders to deliver results to meet any 
challenge. Managers and employees at every level of our organization 
use performance data to make better daily decisions. And while the 
pending funding shortfall will undoubtedly have a negative effect on 
many areas of performance, our performance management system will 
continue to help us stretch our limited funds. Performance goals and 
results may change over time, but I'm confident our performance 
management system will remain tightly woven in MoDOT's organizational 
fabric.
Issues and Challenges in Implementing National-Level Performance 
        Management Requirements
    AASHTO and the State DOTs are supportive of the MAP-21 performance 
provisions and believe that the continued implementation and maturation 
of performance management principles within the transportation industry 
will be a positive step towards a safer and more efficient 
transportation system. However, this is only the beginning of a long 
journey that the federal, state, and local governments will complete 
together as partners. There are some recognized challenges ahead and as 
such, AASHTO and the State DOTs will continue to engage with FHWA, FTA, 
the National Highway Traffic Safety Administration (NHTSA), and other 
stakeholders to address these challenges together. I would like to 
elaborate on three of the challenges State DOTs will face: funding, 
minimum condition levels, and target setting.
    The first challenge is assessing necessary funding to implement 
performance management requirements. The cost to implement the 
performance management requirements: from data collection and 
management to analysis to reporting is not trivial. AASHTO conducted a 
survey of its members to gather additional input on the estimated cost 
of meeting new safety data requirements and came to the following 
conclusion for an average state:

    Year 1 Expenses

   Information Technology Cost for entering, storing and 
        reporting the data: $4 million.

   Data Collection which includes additional counting 
        equipment, vehicles, and personnel: $6 million.

   Additional Staff to administer the data collection program: 
        $1 million.

    Year 2 through 16 Expenses

   Annual Operations and Management: $2 million.

    Total Costs

   Total Year 1 Expenses for All State DOTs: $561 million ($11 
        million/state * 51 states)

   Total Year 2 through 16 Expenses: $1.53 billion ($2 million/
        state * 51 states * 15 years)

   Total Undiscounted Cost: $2.091 billion

    These costs are only estimates to implement the new requirements 
associated with the safety national-level measures. Additional costs, 
that are similar in order of magnitude, will be associated with the 
implementation of the bridge/pavement national-level measures and the 
system performance measures. It is important that we balance the need 
to collect the necessary and important data with the benefits of 
performance management. The more State DOTs spend on data collection, 
management and analysis means less money we can use to invest in safety 
programs, pavement resurfacing projects, and congestion mitigation 
projects.
    The second challenge is the need to meet certain minimum condition 
levels established by U.S. DOT. An important aspect of implementing 
performance management is to provide the correct treatment at the right 
time in the life cycle of the infrastructure asset. This may mean not 
treating the worst item or segment of roadway first. State DOTs are 
concerned that the ``minimum condition'' requirements for National 
Highway System bridges and Interstate System pavement may force State 
DOTs into adopting a worst-first approach, since the State DOTs will be 
required to include in their overall performance management systems not 
only the federally-required assets (bridges carrying the NHS, 
Interstate Pavement and non-Interstate NHS pavements) but many locally 
and state-owned assets as well.
    The third challenge is the area of target setting. It is crucial 
for the State DOTs to work closely with our planning and transit 
partners in developing and establishing targets and then working 
together to meet those targets. However, target setting is not a well-
established science, especially when considered under political 
context. Every state and municipality faces different constraints and 
opportunities affecting their transportation system. Funding levels and 
sources vary, as do environmental conditions, population growth trends, 
and legislative and gubernatorial mandates and priorities. State DOTs 
and MPOs will have to face the realities of their individual contexts 
and will need to establish appropriate targets that take into account 
these unique situations. For many, this will be a challenge; but the 
traveling public will be rewarded with improved mobility outcomes.
Conclusion
    Performance management, the development of performance measures, 
and establishing performance targets is not new to the State DOTs. For 
the last decade, many State DOTs have developed and implemented 
comprehensive and robust performance management systems to balance 
investment decisions against resource limitations. An important aspect 
of this has been examining performance measures for a wide variety of 
areas from safety to asset condition to performance of the 
transportation system. State DOTs are concerned with all of these 
performance areas and must balance the funding of programs and projects 
across areas while at the same time meet stakeholder expectations 
during a time of financial uncertainty.
    I want to thank you again for the opportunity to testify today, and 
I am happy to respond to any questions that you may have.

    Senator Fischer. Thank you, sir.
    Dr. Graham?

           STATEMENT OF JOHN D. GRAHAM, Ph.D., DEAN,

          SCHOOL OF PUBLIC AND ENVIRONMENTAL AFFAIRS,

                       INDIANA UNIVERSITY

    Mr. Graham. Good morning, Madam Chair and members of the 
Subcommittee. Thank you for the opportunity to be here.
    My topic is safety regulation--first of all, the concept of 
a prescriptive standard, which is to specify technology, 
design, labor practice, or a set of human behaviors aimed at 
improving safety.
    In the 1970s, this was the most common form of safety 
regulation around the world, but this particular form has come 
out of favor and has been replaced in many applications by the 
performance standard. The approach of performance is to specify 
a type and level of safety performance and leave the choice of 
compliance method to the company or the regulated entity.
    This worldwide trend I mentioned has been documented in 
reports by the OECD, where they survey regulatory practices 
around the world.
    Where did this idea come from? It has many parents, as many 
good ideas do, but one of the most important people to champion 
the idea was a young Harvard law professor named Stephen Breyer 
in his 1982 book, ``Regulation and Its Reform.''
    What are the advantages of a performance standard?
    Well, the first and most basic advantage is it reduces the 
compliance cost to the company because of the firm has the 
flexibility to find the least-cost compliance methods for 
achieving the safety objective.
    Second of all, the performance standard fosters innovation 
in the industry because it doesn't lock in companies into any 
specific technology or labor practice. It allows innovation to 
occur over time as new opportunities are created.
    And, third, it reduces the opportunities for what 
regulatory scholars call ``rent seeking''--that is, the efforts 
of people who are inventors of a specific idea to try to 
persuade a regulator to mandate their specific tool or 
technology or practice rather than allowing competition to 
occur over time. So we don't want to create a regulatory system 
that invites a lot of this rent seeking.
    There are practical issues in making sure that performance 
standards work properly. The key premise is you must have a 
workable means of measuring performance, and the system must 
have two capabilities: You have to be able to distinguish 
performance of two different companies so you can say, ``This 
company is performing better than that company,'' and you also 
must be able to distinguish performance over time with the same 
company. ``This company was out of compliance; then they came 
into compliance.''
    You must have a performance system that can accomplish 
these. If you don't, then you don't have any way to keep 
legally accountable the firm for its compliance. So you do have 
important obligations to design a performance system that can 
work.
    Now, let me go further to risk-based performance systems. 
And here we are measuring adverse safety events directly, 
usually in terms of number of crashes, injuries, or fatalities.
    But sometimes these events are so rare you can't actually 
do a performance system using this data because they don't 
happen frequently enough. In those cases, we use mathematical 
models and risk analysis that simulates safety events.
    We often utilize data not just on the adverse events 
themselves but on the near misses, like in the famous airplane 
context. We track near misses as well as actual crashes. So 
these models we are looking at can then be used to include 
information about fatalities, injuries, accidents, but also 
near misses.
    So in my written testimony, I make several suggestions to 
move along in the pathway toward more performance-based 
standards.
    The first idea I put on the table is to amend prescriptive 
standards in a general way to permit alternative compliance 
mechanisms that achieve at least the same degree of safety 
protection as does the prescriptive standard. This is sometimes 
called an equivalency clause because the company needs to 
demonstrate that they can accomplish the same equivalent level 
of safety with this alternative method of compliance.
    The burden of proof is placed on the company to show that 
they can provide equivalent safety. And there has to be a 
workable plan of inspection and enforcement that is embedded in 
an alternative compliance approach.
    The agency, when they receive an alternative compliance 
plan, has an obligation to respond publicly to whether they are 
going to approve it or disapprove it. And, of course, that is 
subject to judicial review under something like the arbitrary 
and capricious test.
    The second suggestion I make is that new regulations should 
be performance-based whenever possible, but even when they are 
not, you should include that equivalency clause that allows the 
industry to innovate and suggest better alternatives.
    And, third, we have to keep in mind that our regulatory 
staffs in many of our agencies, they have not been trained in 
the performance- and risk-based approaches I am talking about. 
We will need to have some funds for staffing of people in 
regulatory agencies that get them up to snuff to do this type 
of work.
    Thank you very much. I look forward to the comments and 
questions.
    [The prepared statement of Mr. Graham follows:]

Prepared Statement of John D. Graham, Ph.D., Dean, School of Public and 
               Environmental Affairs, Indiana University
    My name is John D. Graham. I am Dean of the School of Public and 
Environmental Affairs, Indiana University (Bloomington and 
Indianapolis). From 2001 to 2006 I served as the Senate-confirmed 
Administrator, Office of Information and Regulatory Affairs (OIRA), 
U.S. Office of Management and Budget (OMB). Prior to serving at OMB, I 
was the founding Director of the Center for Risk Analysis at the 
Harvard School of Public Health (1990-2001). I have published ten books 
and hundreds of articles on topics related to regulatory reform, 
especially on topics related to health, safety, and environmental 
regulation. I earned my BA in economics and politics from Wake Forest 
University, my Master's degree in public affairs from Duke University, 
and my Ph.D. in public affairs from Carnegie-Mellon University. My 
doctoral dissertation was one of the early analyses of the benefits and 
costs of the automobile airbag.
    My testimony today addresses a classic issue in health, safety and 
environmental regulation: whether a regulation should prescribe certain 
technologies, designs, practices and/or behaviors (``prescriptive 
standards'') or whether a regulation should compel achievement of a 
particular type and level of performance (``performance standards''), 
leaving the choice of compliance strategies to the discretion of the 
regulated entity (the ``regulatee'') (Coglianese et al, 2002). Since 
the 1970s, when the law and economics literatures made a strong case 
for a focus on performance (Breyer, 1982), regulatory practice has 
shifted away from prescriptive rules toward performance-oriented 
standards, but the trend is faster in some fields of practice than in 
others. The trend toward performance-based approaches to regulation 
began in the United States but is now a global trend (Shapiro, 2013). 
In the diverse world of transportation regulation, regulatory practices 
vary considerably, not just between agencies but from regulation to 
regulation.
The Case for Performance Standards
    Performance standards have several advantages over prescriptive 
standards (Mannan, 2012). I offer a concrete illustration of each 
advantage below.
    First, a performance standard tends to be less costly to the 
regulatee because the regulatee has the flexibility and the incentive 
to find the least-cost method(s) of compliance. Under the Clean Air 
Act, EPA shifted from a mandate of pollution-control equipment (e.g., 
scrubbers) to numeric emission limitations on powerplants. When given 
the flexibility of a sulphur-dioxide emission limitation (instead of a 
prescriptive standard), some owners of powerplants found that it was 
less costly to shift from high-sulfur to low-sulfur coal than to 
install expensive and energy-consuming scrubbers.
    Second, a performance standard is more receptive to industrial 
innovation because the standard is not written to mandate certain 
technologies, designs, practices and/or behaviors. When a prescriptive 
standard requires that safety be accomplished by human labor, it 
discourages industry investment in labor-saving technologies that 
achieve the same safety outcome without human labor. Given the possible 
future of safer, driverless cars, it may be unwise for NHTSA to craft 
prescriptive regulations that presume that a licensed human being is 
driving the vehicle. A similar issue arises in freight safety regarding 
the optimal number of crew in the cab and the prospect of future 
implementation of automatic speed control technologies.
    Finally, opportunities for ``rent-seeking'' (the inappropriate use 
of regulatory power to benefit some technologies/firms over others) may 
be curtailed when standards are defined objectively in terms of 
performance. If a regulator is permitted or inclined to prescribe 
specific technologies, there will be a temptation on the part of 
suppliers of safety equipment to lobby the regulator in ways that 
ensure that their type or brand of equipment is prescribed in the 
standard. A performance standard does not eliminate the incentives for 
rent seeking but it may diminish them since the standard is not defined 
in terms that specify a particular design or technology. Elsewhere, I 
have written about how lobbies favoring the electric car have succeeded 
in biasing recent regulatory systems in favor of electrification as 
opposed to other effective ways of improving fuel economy and reducing 
greenhouse gas emissions (e.g., conventional hybrid engines, such as 
used in the Toyota Prius, and the clean diesel engines now marketed be 
German vehicle manufacturers) (Graham et al, 2014). The same lesson 
applies to requirements, such as inspection technologies, in the 
pipeline, trucking, railroad and maritime industries.
When Performance Standards are Impractical
    There are situations when it is not feasible or practical to devise 
a performance standard, usually because a viable system of measuring 
performance and inspecting firms/products for their performance is not 
available (Metzenbaum, 1998). In order to be feasible, a performance-
based system must be capable of distinguishing the performance of one 
firm versus another and must be capable of documenting changes in a 
firm's performance over time. Without firm-specific measurement 
capability, a regulator cannot hold firms legally accountable for 
performance.
    A performance-based system must also be practical in the sense that 
it can be coupled with an inspection/enforcement system that can 
determine which firms are in compliance and which are out of 
compliance. Since some companies are not averse to breaking the law 
when enforcement systems are weak, a performance standard must be 
framed in ways that inspection and enforcement systems can detect and 
deter violators.
    One of the purported strengths of the prescriptive standard is that 
it can be framed in ways that facilitate inspection/enforcement (i.e., 
an inspector may have a checklist of hardware or operational practices 
that he or she uses to determine whether a facility or product is in 
compliance with the standard). However, in order to have knowledge that 
specific hardware and operational practices are safer, a regulatory 
agency presumably has access to performance-related data. The question 
becomes whether such data can be utilized to inform a practical 
performance standard.
    When the outcome of interest can be measured continuously on a day-
to-day basis (e.g., emissions from a smokestack), a performance 
standard is clearly feasible. When the outcome of interest is extremely 
rare and potentially catastrophic (e.g., a meltdown of a nuclear 
reactor), it is not practical to define performance by measuring 
directly the frequency of meltdowns. A similar situation exists with 
low-probability mishaps involving transport of hazardous materials.
    In the nuclear sector, it is practical to use as a performance 
measure a precursor of meltdowns such as the frequency of reactor 
shutdowns. In airline safety, performance-oriented analyses focus on 
near misses as well as actual crashes. My understanding is that FRA and 
the railroads have launched a pilot program called confidential close-
call reporting that is similar to the concept of near misses (FRA, 
2015). In my opinion, this is a constructive development.
Using Risk Analysis to Inform Performance Standards
    When events are rare in frequency, the tools of risk analysis can 
be employed to define performance standards. With risk analysis, a 
predictive mathematical model is used to estimate the probability of an 
adverse event as a function of the technologies, designs, practices and 
behaviors observed in the industry (NRC, 2013). The inputs to the model 
are based on historical data, known physical/biological/behavioral 
relationships, and expert judgement. The performance standard might be 
defined as a threshold probability of the adverse event (e.g., a small 
probability of an airplane crash, since zero probability is 
infeasible).
    Compliance with the performance standard is demonstrated when the 
firm shows the regulator that, given the inputs at their firm, the 
predicted probability of an adverse event is below the threshold 
probability (``safety'') specified by the regulator. Some companies 
might comply with the safety threshold through investments in 
technology; others may invest in superior training programs for their 
employees. In either case, the firm must be able to show, through risk 
analysis, that their compliance approach meets the risk-based standard 
specified by the agency.
    When predictive models of risk analysis are used in performance 
regulation, it is common for regulatory agencies to offer technical 
guidance to companies on how the models should be constructed, tested, 
and validated. Default values for certain inputs may be specified by 
the regulatory agency, unless a firm can supply valid data to support 
an alternative value. When a company submits their risk analysis, using 
the template suggested by the regulatory agency, it may be appropriate 
for the company to subject their analysis (choice of inputs and 
calculations) to independent peer review by qualified experts in the 
field. Alternatively, the regulatory agency may organize its own peer 
review processes, on the guidelines for models or on the risk analyses 
submitted by specific companies. In order to rely less on prescriptive 
standards, greater use of risk analysis may be required in the 
pipeline, trucking, railroad and maritime industries.
Suggestions to Accelerate the Trend Toward Performance Standards
    My experience in regulatory reform around the world suggests that 
there is growing recognition of the value of performance-oriented 
approaches to regulation. In order to accelerate the trend toward 
performance standards, I suggest three directions for Congress and 
Federal regulatory agencies.

    1. All prescriptive standards should be amended to permit 
alternative compliance mechanisms that are supported by performance 
information and achieve at least an equivalent level of protection.

    When a regulatee can make an analytically rigorous case that an 
alternative compliance strategy provides at least equivalent safety 
performance to a prescriptive standard, the regulatee should be 
permitted by the agency to pursue the alternative strategy, subject to 
an inspection/enforcement regime that is established with the 
alternative strategy. Even if a regulatory agency cannot imagine a 
viable alternative compliance strategy, rules should be written to 
permit regulatees to propose alternative compliance mechanisms, since 
specialists in industry may be able to innovate in ways that regulators 
cannot anticipate.
    Given the large number of prescriptive standards that have already 
been codified at numerous regulatory agencies, it would take decades to 
amend each of the standards on a rule-by-rule basis. A better approach 
would be for Congress, in a generic regulatory reform statute, to 
authorize--at any health, safety or environmental agency--alternative 
compliance mechanisms that achieve at least the same amount of safety 
performance as the prescriptive standard. The language I am referring 
to is sometimes referred to as ``an equivalency clause'' because the 
regulatee is obliged, with their alternative compliance methods, to 
accomplish an equivalent level of health, safety or environmental 
protection. The evidentiary burden of proving equivalent safety 
protection should be placed on the regulatee but, in the event that an 
agency declines to permit alternative compliance, the agency should be 
required to state its reasons publicly, and the agency's decision 
should be reviewable in Federal court under the ``arbitrary and 
capricious'' test. That test provides a measure of deference to the 
agency's judgment, which I think is necessary to assure public 
confidence in the system.
    With regard to new rulemakings, performance standards should be 
preferred whenever possible. If new prescriptive standards are enacted, 
they should be coupled with permission for regulatees to propose 
alternative compliance mechanisms that achieve equivalent protection.

    2. When new safety regulations are proposed, agencies should be 
required to include, in their regulatory impact analyses, a plan for 
how they intend to evaluate the regulation after it is implemented.

    The term ``retrospective evaluation'' is often used to describe the 
process whereby agency analysts evaluate how effective a safety rule 
has been after the rule is enacted. Regardless of whether the rule is 
prescriptive or performance based, the agency should describe what data 
they plan to collect and how they intend to analyze the data. My 
experience is that, if an agency does not know how they would evaluate 
a new rule, after it is implemented, then OMB and the regulated 
community should begin to ask hard questions about whether the 
resources invested in the rulemaking might be better invested 
elsewhere.

    3. Congress should provide additional resources to Federal 
regulatory agencies for training in modern methods of performance 
assessment and risk analysis, so that agency personnel can transition 
more rapidly to the world of performance-based regulation.

    Many of the professional staff at Federal regulatory agencies have 
extensive experience with prescriptive regulation but little to no 
experience or training related to performance measurement or the 
development of performance standards. The need for training in risk 
analysis is particularly acute because many of the existing regulations 
that are prescriptive address low-frequency adverse events, the types 
of situations where direct measurement of performance will not be 
feasible. In order for those rules to be redrafted as performance 
standards, the analytic tools of risk analysis will be required.
    The cost of this suggestion is not large, as intensive courses in 
risk analysis for mid-career professionals have already been developed 
and are offered by the Society for Risk Analysis (SRA), a mission-
oriented association of 2,000+ engineers and scientists. SRA is a 
nonprofit group dedicated to enhancing the application of risk analysis 
methods in government and industry.
    In summary, the trend toward performance-based approaches to 
regulation is evident throughout the world (Coglianese, 2012). The 
advantages of performance standards are intuitive and compelling. If 
Congress does not act, Federal agencies will move in this direction but 
progress will continue to be slow and uneven. I have made three 
suggestions for legislative action that may accelerate the replacement 
of prescriptive standards with performance standards.
    Thank you for your time and attention, and I look forward to 
questions and comments about my testimony.
References
    Breyer. S. Regulation and Its Reform. Harvard University Press, 
Cambridge, MA. 1982.

    Coglianese, C. Measuring Regulatory Performance: Evaluating the 
Impact of Regulation and Regulatory Policy. OECD. Paper No. 1, Paris, 
France, August 2012.

    Coglianese, C, Nash, J, Olmstead, T. Performance-Based Regulation: 
Prospects and Limitations in Health, Safety, and Environmental 
Protection. Regulatory Policy Program Report Number RPP-03(2002).

    Federal Railway Administration, 2015, http://www.fra.dot.gov/Page/
PO347.

    Graham, J. D., Rupp, J., Cisney, J., and Carley, S., No Time for 
Pessimism about Electric Cars: Issues in Science and Technology, v 31, 
no. 1, pp. 33-40. 2014.

    Mannon, SM. The Pros and Cons of Performance-Based Regulatory 
Models. Mary Key O'Connor Process Safety Center. Texas A&M University 
System. 2012.

    Metzenbaum, S. Making Measurement Matter: The Challenge and Promise 
of Building a Performance-Focused Environmental Protection System. 
Brookings Institution. Washington, DC. 1998.

    Nuclear Regulatory Commission. Background and Staff Guidance on 
Performance-Based Regulation. January 3, 2013, www.nrc.gov/about-nrc-
regulatory/risk-informed/concept/performance.html#process.

    Shapiro, S et al., Analysis of the Federal Oil and Gas Regulatory 
Landscape. Report Prepared for OSHA. Edward J Bloustein School of 
Planning and Public Policy. Rutgers University. May 2013.

    Senator Fischer. Thank you.
    And, Dr. Sweatman, welcome.

           STATEMENT OF DR. PETER SWEATMAN, DIRECTOR,

             UNIVERSITY OF MICHIGAN TRANSPORTATION

                       RESEARCH INSTITUTE

    Mr. Sweatman. Chairman Fischer, Ranking Member Booker, and 
members of the Subcommittee, thank you for the opportunity to 
testify today about the 21st-century role of performance 
measurement in our Nation's surface transportation system.
    And thank you, Senator Peters, for the kind introduction 
and for making a special effort to be here today.
    The University of Michigan created a new transportation 
ecosystem of global companies to launch the Michigan Mobility 
Transformation Center to help revolutionize mobility through 
connected and automated vehicle technologies. I also chair the 
ITS America Leadership Circle, and I am representing them here 
today.
    MAP-21 made reforms to create a more performance-based 
transportation system, covering safety, state of good repair, 
traffic congestion, and freight movement. To implement these 
reforms, state and local transportation agencies require access 
to better tools, including ITS--intelligent transportation 
systems--to measure and to operate.
    As this committee considers ways to improve the nation's 
freight network, we encourage funding eligibility and an 
increased Federal share for projects that incorporate new and 
innovative technologies--that is, freight-related IRS.
    But we must look ahead. The advent of connected vehicles, 
or V2X, automated vehicles, and big data will redefine 
performance measurement. Success in deploying more powerful 
technologies will drive the volume and relevance of available 
data. Metrics, therefore, need to become less prescriptive, 
allowing the operator to use the most powerful measures. The 
technology will ensure that the most powerful measures are also 
the most available measures.
    The starting point for technology-driven performance is 
safety, with over 33,000 fatalities and 2.3 million injuries on 
our Nation's roads each year. Transportation Secretary Anthony 
Foxx has said that V2X technology represents the next 
generation of auto safety improvements.
    A smart corridor is being deployed in Michigan by the 
Michigan Department of Transportation, Ford, and General 
Motors. General Motors CEO Mary Barra announced cars equipped 
with V2X technology starting in the 2017 model year.
    V2X technology will unleash innovation, from crash-
avoidance safety, advanced traffic management systems, and on-
demand services to real-time traffic, transit, and parking 
information, and countless new transportation applications.
    V2X communication utilizes the 5.9 gigahertz band of 
spectrum set aside by the FCC. We need that band for safety. 
There is no substitute. The FCC should not open up the 5.9 
gigahertz band to unlicensed devices without vigorous real-
world testing.
    The 21st-century performance of the nation's transportation 
system depends squarely on V2X. Transportation companies, 
manufacturers, consumers, and agencies will be able to select 
the most relevant performance data and take performance 
measurement to a completely new level.
    How do we get there?
    The ITS Joint Program Office must be equipped for deploying 
V2X, as well as increasing vehicle automation, big data, and 
other next-generation technologies. We propose that the U.S. 
DOT's ITS research program be authorized at the 
administration's requested levels of $158 million in 2016 and 
$935 million over 6 years.
    We recommend the authorization of funding for automated and 
connected vehicle technology corridors and pilot programs.
    We recommend that a cross-agency automated vehicle research 
initiative be established within the ITS Joint Program Office 
to conduct collaborative research with private industry, state 
and local agencies, university research centers, and national 
labs.
    And we propose that a 21st-century Transportation Data 
Center of Excellence be established in the form of a 
partnership between the U.S. DOT, the automotive industry, and 
research universities. This center should carry out data fusion 
and analytics for transportation performance and measurement, 
concentrating on the innovative use of ITS, V2X, and automated 
vehicle data.
    We encourage U.S. DOT, as well as the states, to review 
existing automotive and commercial vehicle safety standards, 
regulations, and policies. We need to remove unintended 
barriers to the operation of connected and automated vehicles. 
And we need to ensure that the data flowing from the new 
technology is fully admissible for performance management.
    Right now we have the opportunity to shape the future 
performance of our Nation's transportation system. That future 
is determined by technology and will be measured by technology.
    Thank you again for this opportunity, and I look forward to 
your questions.
    [The prepared statement of Mr. Sweatman follows:]

   Prepared Statement of Dr. Peter Sweatman, Director, University of 
               Michigan Transportation Research Institute
    Chairman Fischer, Ranking Member Booker, and Members of the 
Subcommittee: thank you for the opportunity to testify today about the 
21st Century role of performance measurement in our Nation's surface 
transportation system.
    My name is Peter Sweatman, Director of the University of Michigan 
Transportation Research Institute, or UMTRI.
    The University of Michigan created a new transportation ecosystem 
of global companies to launch the Michigan Mobility Transformation 
Center (MTC), to help revolutionize mobility through connected and 
automated vehicle technologies.
    I also chair the ITS America Leadership Circle.
Encouraging Innovation to Meet Performance Management Goals
    MAP-21 made reforms to create a more performance-based 
transportation system. Covering safety, state of good repair, traffic 
congestion and freight movement.
    To implement these reforms, state and local transportation agencies 
require access to better tools--including ITS--to measure and to 
operate.
    Congress should ensure that ITS technologies are eligible within 
all the core highway formula programs and that a higher Federal match 
is made available.
    As this Committee considers ways to improve the Nation's freight 
network, we encourage funding eligibility and an increased Federal 
share for projects that incorporate new and innovative technologies--
freight-related ITS.
    But we must look ahead. The advent of connected vehicles (V2X), 
automated vehicles and big data will redefine performance measurement. 
Success in deploying more powerful technologies will drive the volume 
and relevance of available data. Metrics therefore need to become less 
prescriptive, allowing the operator to use the most powerful measures. 
The technology will ensure that the most powerful measures are also the 
most available measures.
Performance, Driven and Measured by 21st Century Technology
    The starting point for technology-driven performance is safety, 
with over 33,000 fatalities and 2.3 million injuries on our Nation's 
roads each year.
    Transportation Secretary Anthony Foxx has said that V2X technology 
``represents the next generation of auto safety improvements''. A smart 
corridor is being deployed in Michigan by the Michigan DOT, Ford and 
GM. GM CEO Mary Barra announced cars equipped with V2X technology 
starting in the 2017 model year.
    V2X technology will unleash innovation, from crash-avoidance 
safety, advanced traffic management systems and on-demand services to 
real-time traffic, transit and parking information and countless new 
transportation applications.
    V2X communication utilizes the 5.9 GHz band of spectrum set aside 
by the FCC. We need that band for safety. There is no substitute. The 
FCC should not open up the 5.9 GHz band to unlicensed devices without 
vigorous, real-world testing.
    The 21st Century performance of the Nation's transportation system 
depends squarely on V2X. Transportation companies, manufacturers, 
consumers and agencies will be able to select the most relevant 
performance data, and take performance measurement to a completely new 
level.
Advancing ITS, Big Data and Automated Vehicle Research
    How do we get there?
    The ITS Joint Program Office must be equipped for deploying V2X, as 
well as increasing vehicle automation, big data and other next-
generation technologies. We propose that the U.S. DOT's ITS research 
program be authorized at the Administration's requested levels of $158 
million in 2016 and $935 million over 6 years.
    We recommend the authorization of funding for Automated and 
Connected Vehicle Technology Corridors and pilot programs.
    We recommend that a cross-agency Automated Vehicle Research 
Initiative be established within the ITS Joint Program Office, to 
conduct collaborative research with private industry, state and local 
agencies, university research centers and national labs.
    We propose that a 21st Century Transportation Data Center of 
Excellence be established in the form of a partnership between USDOT, 
the automotive industry and research universities. This center should 
carry out data fusion and analytics for transportation performance and 
measurement, concentrating on innovative use of ITS, V2X and automated 
vehicle data.
    We encourage U.S. DOT, as well as the states, to review existing 
automotive and commercial vehicle safety standards, regulations, and 
policies--we need to remove unintended barriers to the operation of 
connected and automated vehicles on public roadways. And we need to 
ensure that data flowing from the new technology is fully admissible 
for performance management.
    Right now we have the opportunity to shape the future performance 
of our Nation's transportation system. That future is determined by 
technology, and will be measured by technology. V2X, automation and 
21st Century data represent the path to that future.
    Thank you again for this opportunity, and I look forward to your 
questions.

    Senator Fischer. Thank you, Doctor.
    My Ranking Member is on an especially tight schedule today, 
so I would recognize Senator Booker to begin the questioning.
    Senator Booker. I am so grateful for that, the generosity 
of allowing me to go quickly and go first.
    Real quick, Dr. Graham, I really enjoyed your testimony, 
and so did my staff, your written testimony. And so let me just 
jump in real quick, if I can use 2 minutes, and then go to the 
Under Secretary on another topic.
    So performance-based regulations obviously can have 
positive impacts, and you indicated that a lot. But there are a 
lot of concerns that are raised that, in some instances, 
performance-based regulations could have unintended 
consequences, especially when it comes to safety. And, for 
example, concerns have been raised about performance-based 
regulations could result in largely self-regulated industries 
with limited oversight.
    And just for the record, can we drill down? As performance-
based regulations are considered, how can we ensure that the 
proper oversight continues? And are there other concerns that 
exist with transitioning to a performance-based system of 
regulation?
    Mr. Graham. Great question.
    In a performance-based system, each company that complies, 
they have to lay out what their compliance methods are, and 
then those are then inspected and enforced by the agency in the 
same way that a prescriptive standard is enforced.
    So, in terms of the ultimate oversight, the process is not 
different. There have to be specific practices, technology, or 
whatever that is used to achieve the standard.
    Senator Booker. Great.
    And you made a very good point. I think both Chair Fischer 
and I were appreciative of the suggestions you made. And so 
part of that has to be the people that are providing the 
oversight, the regulators themselves, would need specific 
training.
    And can you be a little bit more specific on what you think 
the regulators themselves have to be trained up on?
    Mr. Graham. Yes. So there is a professional society, the 
Society for Risk Analysis, that has existing training programs 
on how to use risk analysis methods for situations where the 
frequency of the adverse event is very rare but the adverse 
consequences are really bad.
    Senator Booker. Right.
    Mr. Graham. OK? And a lot of these modal agencies, they 
have situations where they have safety concerns but they don't 
happen that often. They need to use risk analysis tools to 
develop a performance standard.
    Senator Booker. So micro fissures in rail lines, for 
example. There is a lot of incentive financially not to do all 
the requirements because they are so rare, and when they 
happen, the industry----
    Mr. Graham. Then they are pretty bad.
    Senator Booker.--says, ``My bad.''
    Mr. Graham. Right.
    Senator Booker. And so you need to figure out some way to 
make sure that the appropriate steps are being taken. Correct?
    Mr. Graham. Correct.
    Senator Booker. Great.
    Mr. Under Secretary, just jumping real quick to an issue. 
You know, I have lots of concerns, 16 months down here, that 
the Federal Government doesn't seem to be moving at the pace of 
innovation, whether it is the backlogs at the Patent Office, 
whether it is FDA approvals. All of these things are growing in 
my frustration. I look forward to a hearing later today about 
drones.
    But just going to ask you a quick question about autonomous 
vehicles. This is exciting to me. I am encouraged that the 
NHTSA is conducting research on automated vehicles and would be 
interested to know what further steps DOT plans to take to 
unleash what could be incredible benefits of this technology.
    Mr. Rogoff. Well, Senator Booker, our principal role, in 
addition to just trying to be as helpful as we can to all of 
the players in this very creative and important space, is to 
ensure the safety of whatever technologies emerge. And they are 
very dynamic technologies that could yield very different 
solutions.
    It does yield itself, in many ways, to a performance-based 
approach. But I think, importantly, there are also concerns as 
it relates to cyber hacking and the security of an autonomous 
vehicle system. We are working carefully not just within the 
DOT but with other agencies, including NIST, the FBI, others, 
to make sure that whatever system is stood up is safe for the 
drivers and is resistant to hacking.
    I have to say, I have an 84-year-old mother who is still on 
the road. Autonomous vehicles can't come fast enough for me 
because I worry about it all the time. But we will all be 84 at 
one point, and autonomous vehicles hold the promise for keeping 
us all on the road.
    Senator Booker. Well, there is a saying, ``b'ezrat hashem'' 
that we all get to be 84.
    Thank you very much, Chairman.
    Senator Fischer. Thank you, Senator Booker.
    Mr. Under Secretary, we know that MAP-21 required the DOT 
to include performance standards for a number of programs and 
grants that are related to project funding. In fact, these 
performance measures follow the GAO recommendations to provide 
a strong foundation for holding grant recipients responsible 
for achieving those objectives and measuring those 
performances.
    What steps is the DOT taking to progress toward performance 
targets for regulations? And can you provide us some examples, 
please?
    Mr. Rogoff. Well, sure. Let me talk a little bit about our 
performance measures that we are doing in MAP-21, and then let 
me talk about some of the things we are doing in other modal 
agencies.
    As Mr. Nichols pointed out, we are along a progression 
right now in working with our state partners to establish for 
the first time in the Federal aid highway program performance 
measures that will be accountable by state. We are at various 
levels of development. We have NPRMs out on two of them. A 
draft NPRM is coming out on another one. We are in a comment 
period on a fourth.
    We have wanted to work very closely, exhaustively frankly, 
with our states, because we need to have buy-in by all of them 
as to the system we are using. We are making good progress, not 
as quickly as some of us, or all of us, maybe would like, but 
we are going to get these implemented, and then we are going to 
have buy-in when we do.
    In other agencies, I think we are making very good progress 
in certain areas that really lend themselves to performance-
based approaches. Within the FAA, when it comes to general 
aviation, the FAA is about the business of rewriting the whole 
Part 23 aviation code as it relates to safety measures related 
to smaller aircraft.
    Within the Federal Railroad Administration, individual 
railroads are being asked to produce risk-reduction plans that 
are all about the performance rather than any specific metric 
that they need to accomplish.
    And one I am particularly fond of and proud of--earlier in 
the administration, I served as the Federal Transit 
Administrator, and we successfully got MAP-21 to include 
transit safety authority for the department. It overcame a 
prohibition that had been in law since 1964. This really lends 
itself to a performance-based approach because we are not 
burdened with several decades of legacy regulations that have 
been in place. We are starting with a clean slate, developing 
regulations for the first time, which is a great and rare 
opportunity to be performance-based from the get-go. And that 
is what they are doing at the FTA.
    Senator Fischer. In your past life as the FTA 
Administrator--you have just spoken about that--how do you 
compare the FTA's approach to safety to the FRA's approach?
    Mr. Rogoff. Well, the approaches are very different. Like I 
said, one has many decades of prescriptive measures that have 
been in place and have also, like I said earlier, made for the 
safest year on record in 2014.
    FTA is dealing with a hugely more diverse universe of 
operators. Light-rail systems are not identical, whereas 
commuter rail systems largely are. They also, in the transit 
safety account, use different bus rapid transit and standard 
bus processes.
    Transit is an extraordinarily safe mode of transportation 
that can be made even safer. And they have what Dr. Graham 
referred to as the risk of very rare but very catastrophic 
potential events, as we discovered in the Washington Metro 
incident in 2009.
    So we are coming at it from a risk-reduction approach, and 
FRA is moving in that direction. But FRA also has a more 
uniform set of users in the form of the freight railroads and 
the commuter railroads.
    Senator Fischer. Do you think if the FRA was granted that 
safety authority today, would they still be regulating the same 
way they are? Would it change because of where we are at today 
compared to when these regulations were put in place?
    Mr. Rogoff. I think the FRA has, frankly, the ability, 
should it choose to move to a performance-based approach----
    Senator Fischer. You think they have----
    Mr. Rogoff. I believe--you know, I would want to review 
this with counsel's office, obviously, but I am not sure that--
I mean, in certain areas, they have prescriptive rules that are 
in the statute. If you really wanted to move away from those 
rules, you would have to unwind them legislatively.
    But I think in other ways, in other areas, we see FRA 
moving to a more performance-based approach, as I said, in 
these risk-reduction plans that they are having all of the 
railroads put together.
    So I think progress can be made. As I said in my opening 
statement, it needs to be made carefully. You don't want to 
move to a performance-based standard until you at least know it 
is as safe. And that requires, as many of the witnesses pointed 
out, a lot of data collection, a lot of analysis, and willing 
partners to have all of their data be transparent. Absent that, 
we can't make progress.
    Senator Fischer. And we need to encourage people to be 
willing partners, wouldn't you agree?
    Mr. Rogoff. Absolutely. You can't get there without them.
    Senator Fischer. OK. Thank you.
    Senator Wicker?
    Oh, I am sorry. Senator McCaskill was here first.
    Senator McCaskill?
    Senator McCaskill. Thank you.
    Mr. Nichols, in your testimony, you indicated that it is 
great to talk about performance management, and we all want 
performance management. I am a big believer in performance 
metrics. As you may remember, back, I instituted performance 
auditing----
    Mr. Nichols. Yes, ma'am.
    Senator McCaskill.--in the state of Missouri when we had 
never had performance auditing before.
    But you also point out that it is a little bit like us 
talking a lot about an infrastructure bank without telling 
people that the money in the bank comes from tolling if we just 
talk about performance metrics without talking about funding.
    Can you speak to the challenges that you are facing at the 
state level with the uncertainty of our fits and starts of 
funding of highway transportation from Washington?
    Obviously, we have a deadline approaching in May, and I 
would like the consequences of us embracing another 6-month 
extension as opposed to what used to be noncontroversial around 
here, which was a multiyear, at least level spending amount for 
our Highway Trust Fund.
    Mr. Nichols. Thank you, Madam Chairman and Senator. Again, 
great question.
    And to begin with, performance management, as you know, is 
a process as much as it is a product and a tool. And it is a 
culture that one develops because we have to prioritize the 
very limited resources that we have so that we are focusing on 
achieving results that make a difference in specific areas. 
Again, I mentioned seven tangible results. I think we have 
provided a copy of our Tracker, and it is really our 
performance management document that we use to do our business 
with.
    Things like safety--we have talked so much about safety 
here. But it is also about system condition, congestion relief. 
We have talked about freight, we have talked about ports, and 
all those different things of business that we do in our state. 
There is not enough money to take care of all of the needs that 
our customers are asking us to achieve.
    So what we are doing with performance management, through 
an enterprise risk-management system, I will mention, as Dr. 
Graham talked about also, is prioritizing where those limited 
dollars go to achieve the most benefit of the results out of 
them.
    And, obviously, the singular focus is safety and reduction 
of fatalities, which we have made progress on but not enough 
progress. You know, one fatality is one too many.
    The issue of the national funding issue that we have--and, 
obviously, I speak for all of AASHTO and all the states, and 
that is that we do need a sustainable funding program, a long-
term bill, for lots of reasons, which I won't take a lot of 
your time today, but it does provide us the time to do the 
planning, the long-term planning on our projects.
    Because we are in fits and starts, and we need that time to 
get our projects ready. And we are always on this precipice of 
providing construction projects and then the funding stopping 
and then we are going to have to stop or prevent a project from 
moving forward, anywhere in our country.
    Many states have reduced their highway programs just 
because they can't predict where the Federal funds are going to 
be after May 31 of this year. And so it is a big challenge that 
all of us are facing.
    Senator McCaskill. Have we put a price tag on that, when we 
have to stop a project because we can't get our act together 
out here and get multiyear highway funding done? Has 
nationally, if any of you are aware, or if we have in Missouri 
put a price tag on what that is costing us in terms of these 
projects and costs going up because of delay and so forth?
    Mr. Nichols. There is an increase. I do not have that 
number, and we can provide a number like that. But, obviously, 
the impact of contractors stopping their work and having to 
restart; closing out a project costs money for a contractor, or 
a consultant who is doing the engineering work for us also. So 
there is an impact to the restart of a project once it gets 
tabled or shelved.
    Senator McCaskill. What is the----
    Mr. Rogoff. Senator McCaskill, I----
    Senator McCaskill. Yes?
    Mr. Rogoff.--would just add one thing, because we have an 
added concern at the department that even goes beyond just the 
mechanics of the contracting. And that is that, having gone 
through 32 short-term extensions now to date, communities are 
really losing their ambition and their vision to actually make 
things better.
    How do you actually plan for a major bridge replacement 
project that could take anywhere from 3 to 5 years if you don't 
know if the Federal Government is going to reimburse you 8 
months later? And that is what people like Mr. Nichols have 
been put through now for a number of years. Even MAP-21 was 
only 2 years long.
    That is why the administration is putting forward a 6-year 
bill, fully paid for with substantial growth, to provide that 
certainty as well as provide the level investment, where 
conditions might actually improve.
    Senator McCaskill. Well, let me ask this awkward question 
so that we can make sure we don't forget that we have work to 
do in Jefferson City, as I indicated when I welcomed you.
    Let's assume that something invades this place called 
``common sense'' and we get a multiyear surface transportation 
bill done that will allow the kind of vision and planning that 
will make these projects cost-effective and real to the states. 
Will Missouri have the resources to cost-share?
    Mr. Nichols. No, ma'am. It is even worse than that, Madam 
Chairman--no, ma'am. We will not. In our state, Fiscal Year 
2017, assuming that there is a solution for transportation 
funding, whether it is a continuing resolution or a new surface 
transportation act at the Federal level, at the existing 
funding levels we will not even be able to match the Federal 
funds that are coming in today.
    So it is a big challenge that we are facing at the state 
level in Missouri, and it is quite common around the country 
right now.
    Senator McCaskill. Well, I hope people in Missouri figure 
this out before the legislators in Jefferson City consider 
another tax cut. Thank you, Mr. Nichols.
    Senator Fischer. Thank you, Senator McCaskill.
    Senator Wicker?

              STATEMENT OF HON. ROGER F. WICKER, 
                 U.S. SENATOR FROM MISSISSIPPI

    Senator Wicker. Thank you very much, gentlemen. Appreciate 
your testimony today.
    I have a question about TIGER grants and maybe a way to 
expand this concept to the state level. And I want to give you 
an example.
    There were three small counties in southwest Mississippi 
who came together in a project called TRI-Mississippi--
Claiborne County, Jefferson, and Franklin County. They 
submitted a TIGER grant application, 2014, to fund the 
replacement of 22 failing bridges and to repair 40 miles of 
roadway. This grant was awarded to TRI-Mississippi, and through 
this project we were able to create, we believe, 262 additional 
jobs in an area that was highly distressed economically.
    So, good news for these three small counties; bad news for 
the counties that submitted equally excellent applications and 
weren't chosen. In this system, we learn that nearly 6,100 
applications have been submitted and only 343 receive funds. 
This represents a project award rate of less than 6 percent.
    Last year's competition alone had applications requesting 
15 times the amount authorized in the program. As one of our 
witnesses said, the needs are out there, and we are simply not 
meeting the needs.
    Now, that is why Senator Booker and I have developed a 
state-based competitive grant program that you might call 
state-based TIGER or a TIGER-esque program for states. We 
introduced it last year; we have reintroduced it again this 
year in the form of the Innovation in Surface Transportation 
Act.
    And so I would ask perhaps Mr. Nichols to comment about 
this but also Mr. Rogoff and discuss this concept of a certain 
portion of funds being set aside for competitive, merit-based 
applications so more of these local communities are able to 
utilize funds in a way where they could not possibly submit a 
match.
    And, Mr. Nichols, I guess we will go with you first.
    Mr. Nichols. OK. Madam Chairman, Senator, thank you again 
for the question.
    I will begin with a perspective of at least from AASHTO, 
which, you know, all 50 states, plus Puerto Rico and D.C., and 
the perspective, obviously a formula-based distribution where 
the states have flexibility on the distribution of Federal 
funds throughout the state, whether it is on the state system, 
a city or county system of highways, and the multimodal aspect 
of how those funds can be used.
    A formula base provides an opportunity for long-range 
planning. And that is utilizing our relationship with our more 
urban areas through the metropolitan planning organization 
processes and then in the rural areas with our regional 
planning commissions on the transportation planning process, 
that they can look out forward, just as we do on the state 
system, on what are the transportation needs on the system, 
whether it is on the state system or local system, that there 
is a--and then a prioritization process, which is what we do in 
Missouri through the formula funds that come through Missouri. 
So there is a, I say, a competitive process, but it is a needs-
based process that we have in our state.
    Now, the TIGER grant component of it--as the Under 
Secretary will mention, Missouri has been, I will say, 
moderately or modestly successful with the TIGER grant program. 
And we work very hard inside that program to be able to capture 
this grant system that is available for states and local 
systems to use.
    I will mention that the TIGER grant applications are one of 
the few areas where we can take a multimodal approach, the 
entire transportation system, to solve a transportation network 
of problems in our state. And it has helped us in some areas on 
some projects that we would not be able to use, necessarily, 
our formula-based funds to do those projects.
    So, with that, I will pass it to Under Secretary----
    Mr. Rogoff. Well, thank you, Senator Wicker.
    I would echo what Mr. Nichols said and also echo what you 
observed, and that is that the demand for TIGER grants is 
overwhelming compared to the availability of funding, which is 
why in our GROW AMERICA Act we actually more than double 
available funding for TIGER. And even then, we will not come 
close to meeting demand.
    And, importantly, as Mr. Nichols also pointed out, the 
TIGER program has really allowed us to rifle-shoot some dollars 
to some projects to get them in the ground quickly that are 
innovative, that are multimodal, that gets dollars directly to 
a local community, sometimes bypassing the state DOT, and also 
to achieve sort of unique goals, whether it is ladders of 
opportunity for people who have been disconnected or 
communities that have been disconnected from the economy or 
unique innovations. We would like to maintain that uniqueness 
and that innovative aspect of TIGER.
    Now, our increase in funding and your proposal need not 
compete with one another. I think there is certainly room for 
both. But I think there is value in a Federal program, where we 
could disseminate best practices. And if Mississippi also wants 
to mirror that with a competitive, innovative program that can 
go to local communities, more the better.
    Senator Wicker. Well, let me just say that the Wicker-
Booker proposal is really gaining a lot of speed among local 
and county governments. They see it as a way to meet a need 
that has not been answered in a number of years. And the 
national organizations that represent these local governments, 
they are collectively very excited about this.
    So I hope we can work together. I hope we, because of the 
needs, we can get a bigger pot of money out there for all of 
us.
    And I think, Madam Chair, we all support innovation and 
best practices, but a lot of these things are--these are just 
basically, you know, bridges that need to be replaced, roads 
that aren't sufficient. And I don't know how modernistic we can 
be about that. The roads and infrastructure are falling apart 
in this country, and local governments don't have the money to 
afford these.
    So I will leave it at that.
    I wonder if, since there are only two of us, Madam Chair, 
if I could ask one----
    Senator Fischer. Certainly.
    Senator Wicker.--other line----
    Mr. Rogoff. Could I just make one just very quick 
observation, Senator? I don't want to use up your time.
    Senator Wicker. Oh, it is already gone.
    Mr. Rogoff. OK.
    There are some things--you are right, there are times in 
TIGER grants where we are replacing projects that might be 
eligible for funding with other funding sources. But there are 
others, especially in ports--we do not have a funded 
alternative grant program for ports. And one of the grants we 
made to Mississippi was to the Port of Pascagoula, and that 
couldn't have been done through any other program that we have.
    So there are some unique aspects for TIGER that really lend 
itself toward not only continuation but expansion of the 
Federal effort, as well.
    Senator Wicker. Well, when you mention the critical need 
for upgrading our ports and making us competitive 
internationally, you get an ``amen'' from me on that.
    Dr. Sweatman, let me just ask you about this V2X technology 
and the testimony that you have about that. You mentioned the 
smart corridor in Michigan, and I found this very interesting.
    At what point will this be practical not only on the new 
expressways but in getting vehicles on the secondary roads and 
actually to people's businesses and homes? That is my question 
about something this smart and something this interconnected.
    Mr. Sweatman. That is a great question. Thank you very 
much.
    Clearly, this technology will be deployed in vehicles. It 
also needs to be deployed to a certain level in the 
infrastructure. So we can achieve quite a bit with vehicle-to-
vehicle communication, and, as I think we are aware, that kind 
of platform will be provided in vehicles through regulatory 
action in the future. But we do need to make sure that we have 
the support in the infrastructure. And what we are doing in 
Michigan is finding a business model where this makes sense.
    So there is a lot of value to be gained by this kind of 
communication, not only for safety but for many other aspects, 
including saving energy and even transactions that can be 
undertaken from the vehicle.
    So, as we move forward, what we are interested in in 
deploying this in Michigan is to create day-one value from this 
V2X system. So we need consumers to be excited about it. We 
have around 3,000 consumers in the City of Ann Arbor using this 
technology right now and seeing a lot of benefit. So we are 
expanding on that, so we are going to many thousands. But there 
are other programs around the country, in California, in Texas, 
in Virginia, and others, who are doing a similar program.
    So we think these regional deployments are very important 
to show the benefits, but we definitely do need not only the 
technology in the vehicles but in the infrastructure. And we 
believe that that business model will be apparent so that this 
can be done. There will be an incentive for this deployment to 
take place.
    Senator Fischer. Thank you, Senator Wicker.
    Senator Blumenthal?

             STATEMENT OF HON. RICHARD BLUMENTHAL, 
                 U.S. SENATOR FROM CONNECTICUT

    Senator Blumenthal. Thank you, Madam Chair.
    Thank you all for being here today on this very important 
topic of safety, performance-based, prescriptive measures to 
achieve it.
    I think there has been some discussion of the goal of 
reducing truck fatalities and injuries and crashes to help with 
safety on our roads, and an important factor in reducing 
crashes and fatalities is to help minimize fatigue in the 
trucking industry through hours-of-service regulations, which 
are prescriptive, not just performance-based.
    Last year's appropriations bills stopped enforcement of two 
important provisions of the hours-of-service rule until the 
Department of Transportation completes a study which the 
inspector general will review.
    And my questions for Mr. Rogoff are: Number one, what is 
the status of that study? And, number two, has the inspector 
general reviewed your plan for the study?
    Mr. Rogoff. The study is currently ongoing, Senator 
Blumenthal. And, indeed, the inspector general has reviewed the 
study and has reported out their findings to us. Based on our 
briefing, they saw no problems with our methodology. I believe 
they also will be briefing the Committee in short order, if 
they have not already.
    But we obviously thought the provision in last year's 
appropriations bill was misguided, but we are following the 
strictures of the law to make sure that we fulfill the 
statutory responsibility to bring a fresh look to this 
question.
    Senator Blumenthal. I joined you in the view that the 
provision was unfortunate, and ``misguided,'' I think, is 
probably a good word for it. I am hoping that the department is 
taking steps to ensure that the drivers who are selected for 
the study are sufficiently representative or the sample 
sufficiently accurate to produce results that are statistically 
significant.
    Mr. Rogoff. We are working hard to do so, as is the 
contractor.
    We do have a challenge, I should tell you, because the 
number of drivers that are actually likely to be subject to the 
restart requirements is a very small population. It is probably 
no more than 15 percent of the drivers that are out there. 
These are drivers that are driving more than 60 hours in 7 days 
or more than 70 hours in 8 days. And in order to find a sample 
where we could do an adequate comparison will be a challenge.
    But our contractor is on it, and we are seeking to help 
them. And we are getting help from trucking companies around 
the country that are willing to participate.
    Senator Blumenthal. How soon do you anticipate the study 
will be done?
    Mr. Rogoff. The goal is to get it done by the end of the 
year. But, as with all of these things, we are going to get it 
right before we get it out, so I wouldn't want to be pinned to 
a timeframe. But please know our goal is to get it out before 
the end of the year.
    Senator Blumenthal. Well, thank you for your work on this 
issue. And please thank Secretary Foxx for his attention to all 
of the safety issues that I think are so important to the 
confidence and trust of drivers but also riders of the rail, 
where safety and reliability is a continuing challenge and 
where, in my view, the Federal Railroad Administration must 
issue rules and regulations that have been recommended by other 
agencies, as you well know. And I am hopeful that those 
regulations will be issued, because the law mandates they be 
issued.
    And we can debate prescription, performance. In some ways, 
the semantics matter very little to the average American 
passenger on our rails or driver or rider on our roads, because 
the prescriptions--I don't know whether you would agree--for 
mandated technologies like seatbelts and airbags and electronic 
stability control, roof crush resistance, side-impact 
protections, all are saving lives. Whether you want to call 
them performance-based or prescriptions, safety demands that 
the government intervene and mandate measures that will save 
lives.
    Mr. Rogoff. I think those are very good examples, Senator 
Blumenthal, because it points up the fact that it is not 
necessarily an either/or. We have what are sometimes called 
parametric rules, which are kind of a combination of 
prescription and performance.
    You used the example of seatbelts and airbags and roof 
crush standards. That is true, we have those more prescriptive 
standards, but we also have just an overall crash-worthiness 
standard or a rollover standard, something Dr. Graham worked on 
when he was at OIRA, that is performance-based.
    So it is a combination of--we have required three-point 
seatbelts for decades, but we still leave to the automobile 
manufacturer the choice of how they want to design their 
vehicle to meet the crash-worthiness standard.
    Senator Blumenthal. Thank you.
    My time has expired, but I want to thank every one of you 
for your being here today and for the excellent work that you 
are doing on this cause.
    Thank you, Madam Chair.
    Senator Fischer. Thank you, Senator Blumenthal.
    Senator Klobuchar?

               STATEMENT OF HON. AMY KLOBUCHAR, 
                  U.S. SENATOR FROM MINNESOTA

    Senator Klobuchar. Thank you so much, Madam Chair.
    Thank you to all of you for being here.
    I guess I will start with you, Mr. Rogoff, who has come to 
our state many times. Thank you. And I know you have been to 
our metropolitan area for some really good projects that the 
department has helped fund.
    I want to just ask you a little bit about another part of 
our state; it is the rural area. About 27 percent of people in 
our state live in rural areas, but almost 70 percent of the 
motor vehicle deaths occur in rural areas.
    And that is why I have a bill with Senator Sessions to have 
the department study high-risk rural road best practices. It 
was included in MAP-21. And the report identified challenges 
that local governments face when planning for and implementing 
strategies to improve safety on rural roads.
    Mr. Rogoff, as we look to build on this report, what are 
your thoughts on what we should be doing to make rural roads 
safer?
    Mr. Rogoff. Well, thank you for the question, Senator.
    We actually have an initiative and are very focused on just 
that point, because those figures in Minnesota are mirrored in 
other states across the country, namely that some of the 
highest-risk roads are the least traveled but they are also 
sometimes the least attended to when it comes to engineering 
safety improvements.
    Mr. Nichols in Missouri lives this and breathes this every 
day.
    Senator Klobuchar. I saw him nodding his head in a very 
nice, Midwestern----
    Mr. Rogoff. And we actually, in our GROW AMERICA Act, quite 
deliberately boost funding specifically to states to tackle 
that rural road problem.
    Certainly, even at the increased funding levels in our 
bill, it is not enough to complete the problem. Some of the 
issues are in the area of technical assistance because, as was 
pointed out earlier by Senator McCaskill, some of these most 
dangerous roads are county roads. But that doesn't make them 
any less fatal or any less of a concern to all of us.
    Senator Klobuchar. Exactly.
    Mr. Rogoff. So we need to kind of pierce through that and 
make sure they are attended to.
    Senator Klobuchar. Then the other thing I have been working 
on, which is a rural issue, also a metro issue, but that is the 
distracted-driving issue, something that Secretary LaHood made 
a priority and I know that Secretary Foxx has continued.
    And right now, the way this works, too few states are 
receiving the funding. In 2014, and this is our grant programs, 
only one state received the funding, the state of Connecticut.
    Mr. Rogoff. That is right.
    Senator Klobuchar. They are smaller than our states, 
geographically; that is all I will say. And we think it is 
important that we be able to have those funds go out, as we are 
seeing these extraordinary number of deaths from distracted 
driving.
    And Senator Hoeven and I have introduced a bill which would 
make it easier for some of the grant funding, and I am hoping 
that we can include that. And I know the agency can't do 
anything about it until we include that change. But I am really 
making a pitch here that we put that in the transportation 
bill. And I am hoping Senator Thune and Senator Nelson, staff 
here, will listen, as well as Senator Fischer, so we can get 
that done. And just a point there.
    Mr. Rogoff. Well, we applaud your effort.
    We actually have in the GROW AMERICA Act and will again 
when we submit it shortly a provision to try to free up those 
dollars and put them to work in a broader number of states. We 
sort of establish a two-tier system, where part of that money 
will go to the states that have made adequate progress to date, 
while still leaving funding for an incentive for states to do 
even more.
    Senator Klobuchar. Very good.
    Mr. Rogoff. But you are right, the challenge of it only 
going to one state resulted from the new requirements that were 
put into MAP-21, and it did freeze up a lot of money, such that 
only one state qualified.
    Senator Klobuchar. Yes. We will just not tell Senator 
Blumenthal that we are bitching a little bit.
    Mr. Rogoff. Oh, you know. He is not in the room.
    Senator Klobuchar. Exactly. Well, I am sure they will still 
qualify, because we want to extend it.
    I wanted to last ask you about the Recreational Trails 
Program. I worked hard with several of my colleagues to ensure 
that the Recreational Trails Program was preserved in MAP-21. 
As you know, it is the foundation for state trail systems 
across the country. It provides support to states to construct 
and maintain thousands of miles of trails for both non-
motorized and motorized users. And it is actually a nice 
coalition of both bicycle, cross-country skiers, people who 
have ATVs and all kinds of motorized vehicles as well, 
snowmobiles.
    So I want to get your thoughts on the RTP program and its 
importance to trail users. Obviously, that is something else we 
are going to be working on in the transportation bill.
    Mr. Rogoff. We do support the extension of the Rec Trails 
Program. And, importantly, we also have sought additional funds 
in our TIGER program, through which we have funded a great many 
trails.
    Trail use continues to rise.
    Senator Klobuchar. Yes.
    Mr. Rogoff. Demand continues to rise. And this is not an 
area where--I think it used to be highly controversial in----
    Senator Klobuchar. Yes. I remember those days.
    Mr. Rogoff. And I think, hopefully, we are turning a corner 
there, where states are seeing the benefit for the mobility of 
all their community members.
    Senator Klobuchar. Right. And I also think that the groups 
have found a way to work together on this----
    Mr. Rogoff. That is right.
    Senator Klobuchar.--Federal program that has been really 
helpful to show that all people can use--motorized, non-
motorized--different kinds of trails for different reasons. And 
they have been advocating together, and I think that has made a 
big difference, as well.
    Mr. Rogoff. Well, if we are going to get reauthorization, 
we are going to need every community behind getting something 
done.
    Senator Klobuchar. Right.
    All right. Thank you very much.
    Thank you, all of you.
    Senator Fischer. Thank you, Senator Klobuchar.
    I am going to ask another round of questions to give any of 
my colleagues that are trying to get to this hearing an 
opportunity to do so within the next 5 minutes.
    So I would begin with Dr. Graham.
    In your testimony, you mentioned that prescriptive 
regulations encourage rent-seeking activities. Can you 
elaborate on those comments and explain how the performance 
targets alleviate that rent seeking? And, also, if we alleviate 
the rent seeking, does it encourage some innovation, as well?
    Mr. Graham. Yes, it does. It is a good question, Senator 
Fischer.
    A performance standard is typically specified in numeric 
terms that are objective so that if anybody has a technology 
that they can demonstrate meets that standard they have an 
equivalent opportunity to make that case.
    The difference with the prescriptive standard is you have a 
tendency to want to pick one of those and then write it into 
the regulation. So the lobbyists who are behind that, you know, 
they are trying to persuade that regulator to mandate their 
technology. And that is a temptation that exists with 
prescriptive standards that is lessened with performance 
standards.
    Senator Fischer. And in your experience as an 
administrator, what are some of the elements of the performance 
standards that you incorporate into the regulatory approach, 
particularly for transportation regulations? And where can we 
improve on those performance targets, to be able to incorporate 
those into regulations?
    Mr. Graham. Well, let's talk first about existing 
regulations. Ideally, I would like to live in a world where all 
of these existing prescriptive standards would be rewritten as 
performance standards, but that is not going to happen in our 
lifetimes because there are lots of those regulations out 
there. So you need kind of a simpler, more general fix.
    And that is what I had proposed with this idea of just--
Congress could just lay out an equivalency clause that applies 
to all these existing rules, and then it allows a regulated 
company to propose an alternative compliance path. So you don't 
have to rewrite all the prescriptive standards; you just allow 
them to make that proposal. But the condition is they have to 
be able to demonstrate that they can achieve equivalent safety 
to what the current prescriptive standard provides.
    You are reminding me that I wanted to make a comment on the 
little analogy that was made with airbags and seatbelts about 
prescriptive standards. Not all airbags are equally effective, 
so you would like to have some performance requirements on 
airbags.
    And, in fact, we have those. The performance standard that 
the Federal Government adopts for crash-worthiness protection 
is a numeric standard that measures deceleration of the head in 
a crash. And airbag systems have to meet that performance 
standard.
    So even when people refer to specific technologies, safety 
technologies, and say these are good things, a lot of them are 
there because there are performance requirements on those 
technologies.
    Senator Fischer. Thank you.
    And how would you go about--if you change it and allow 
companies to use performance-based, which then they have to 
meet certain guidelines along that, be able to prove that, how 
would you have the DOT respond? And would you put a time limit 
on the DOT to respond to companies that are trying to move into 
the arena of performance-based?
    Mr. Graham. I think you have to look at the history of the 
particular agency on how well they are able to meet their 
timeframes currently. And if you have an agency that has a 
pattern of not meeting those timeframes, then I would, yes, be 
inclined to do that. But I think if the agency has a good track 
record of meeting prompt activity, then I don't even think you 
necessarily have to put in the statute the timeframe.
    But we have to keep in mind that the burden of analysis and 
work to develop these alternative compliance schemes and to 
demonstrate equivalent safety, that burden would be on the 
companies. So they have a lot more work to do in this regard 
than the regulator does.
    Senator Fischer. OK. Thank you.
    And, Mr. Nichols, if I could finish with you, in the 
written statement that you provided, you noted that fatalities 
on the Missouri highways and roads have decreased from 1,257 in 
2005 to 766 in 2014.
    Can you explain how performance-based measures within your 
department have contributed to those safety improvements that 
you have seen over the past 10 years? And I would like to 
congratulate you on those numbers.
    Mr. Nichols. Thank you, Madam Chairman.
    It begins with, first of all, identifying that that is an 
area, obviously, that we are going to--as we go through an 
enterprise risk management system, safety is really low-hanging 
fruit. And what we identified, again, is that that is an area 
where we are going as a state to take a systems approach as 
opposed to a high-crash-location approach, which historically 
state DOTs and traffic engineers have done for many, many 
years.
    You look at an intersection that has lots and lots of 
crashes at it but very low serious injury and low fatalities, 
yet on--and we were just talking about rural roads. And, again, 
both of our states have many, many miles of those. And we were 
looking at, where can we make an investment of the dollars that 
we have that will make a difference on the system, that will 
reduce fatalities and disabling injuries?
    And we began with an approach of looking at the roads that 
carry the most traffic. In Missouri, which, again, is a 
microcosm of many, many states, about 80 percent of our traffic 
drives on 20 percent of our roads--the 80-20 rule. Again, many 
states fall in that. And what we said is, are we doing 
everything we can do, with the limited resources we have, to 
reduce and eliminate the types of fatalities that are occurring 
on these types of roads?
    For example, on our interstate systems where we do not have 
a protected median, where we have a grass median, which much of 
the rural interstate has, we saw that we were having an 
alarming rate of fatalities with crossover-median fatalities. 
And we went in and put in guard cable. And there was a lot of 
debate about whether guard cable, at that time, was an 
effective tool and product to eliminate fatalities. Well, I can 
tell you that it has been a wonderful product that has--hasn't 
completely eliminated, but it has reduced crossover fatalities 
on our interstate systems tremendously.
    The other areas are--it is lane departures issues, like 
putting what we call a rumble stripe, thing like that. It is an 
annoying product, but it is on the edge of the road, and you 
drive over to the edge and it alerts you. And it is that 
distracted-driving component.
    Without having the issues associated with the autonomous 
vehicle components in right now, it allows us to do some things 
on the existing corridors that take care of those specific 
system of roads that has reduced fatalities. And there are a 
couple of examples there.
    The challenge that we have, we are not making much progress 
now. And, as I said, we are at 766 fatalities last year in our 
state, and that number is hovering at about that level. Our 
challenge is it is going to that 80 percent of the roads that 
carry 20 percent of the traffic where we need to put similar-
type features--shoulders on rural two-lane roads, more 
guardrail and guard cable on rural two-lane roads--and do 
things like that, widen the roads out. And those are the kind 
of things that we know systematically we need to do; the issue 
is we don't have the revenue to do that.
    Senator Fischer. How wide are your shoulders? Are they 
AASHTO standards, or do you have stricter standards in 
Missouri?
    Mr. Nichols. No, they are AASHTO standards, ma'am.
    Senator Fischer. OK. Thank you.
    Thank you all, gentlemen. I appreciate you being here 
today. It has been a very informative hearing.
    The hearing record will remain open for 2 weeks. During 
this time, Senators are asked to submit any questions for the 
record, and, upon receipt, the witnesses are requested to 
submit their written answers to the Committee as soon as 
possible.
    Thank you again. I appreciate all your information.
    We are adjourned.
    [Whereupon, at 11:24 a.m., the hearing was adjourned.]

                            A P P E N D I X

     Response to Written Questions Submitted by Hon. John Thune to 
                          Hon. Peter M. Rogoff
    Question 1. To what extent does current statute require the 
Department of Transportation to mandate prescriptive standards when the 
Department would otherwise find merit in issuing equivalent performance 
standards? Across the Department, are there any cases in which an 
equivalency clause would produce a beneficial outcome?
    Answer. Equivalency approaches authorize an agency to adopt 
alternative compliance mechanisms for a regulated entity, if the entity 
shows that equivalent safety protection would be accomplished by the 
alternative approach. The Department has found that use of alternate 
means of meeting standards is sometimes useful. Such a clause can be 
included as a provision of regulatory text, unless such a clause is 
specifically barred by statute. However, where statutes prescribe a 
design standard, agencies can authorize approaches that maintain an 
equivalent level of safety only where Congress has explicitly 
authorized such an approach in the statute. The Department has seen the 
benefits of equivalency approaches in the Federal Railroad 
Administration's regulations for braking technology and the National 
Highway Traffic Safety Administration's theft reduction measures.
    Some DOT regulations allow regulated entities to submit petitions 
to operate outside the regulations. The Pipeline and Hazardous 
Materials Administration (PHMSA) special permits process sets forth a 
process to authorize alternative requirements, or variances, to the 
requirements in the Hazardous Materials Regulations (HMR). The PHMSA is 
authorized in statute to issue such variances in a way that achieves a 
safety level that is at least equal to the safety level required under 
Federal hazmat law or is consistent with the public interest if a 
required safety level does not exist. The PHMSA also uses approvals, or 
written consent, from a designated official to perform a function that 
requires prior consent under the HMR.
    The Department also uses performance-based safety approaches to 
achieve safety outcomes, and industry has shown progress in voluntarily 
implementing performance-based safety standards. For example, the 
Federal Aviation Administration (FAA) has used performance as the basis 
of analysis, and improvements have resulted in the near-elimination of 
fatalities in our commercial aviation fleet. Performance testing has 
resulted in dozens of specific safety enhancements in our automobile 
fleet, saving thousands of lives.

    Question 2. If Congress were to consider an equivalency clause--
perhaps in limited instances--as part of the surface transportation 
reauthorization bill, or any other transportation bill, what do you 
view as the primary advantages and disadvantages? What potential 
challenges would arise from implementation?
    Answer. As noted above, alternative compliance mechanisms can be 
included in regulation unless explicitly prohibited by statute. If 
Congress is prescriptive in its statutory language, a provision in 
statute that also allows the agency to evaluate alternative methods of 
compliance from the public could be useful.
    The advantage of an equivalency approach is flexibility. Such an 
approach would allow for innovation and allow for more rapid adoption 
of compliance methods as new technologies emerge.
    Performance-based approaches that specify performance outcomes may 
also have advantages. Such an approach provides flexibility to the 
regulated entity to achieve the performance outcome in the most 
effective, efficient, and cost-effective way. For example, FAA has 
adopted equipage standards and safety management systems that use a 
performance basis to achieve outcomes. A performance approach may 
promote innovation because only a final outcome is mandated, rather 
than a specific design, practice, or technological solution. 
Performance standards can also more easily be tailored to local 
circumstances.
    However, a prescriptive approach may be appropriate in some 
instances. For example, industry and consumers can more easily 
understand and comply with a specific standard, especially small 
entities that may find compliance with an explicit standard to be less 
complex and more affordable. Additionally, a specific standard may be 
more easily enforced compared to a performance standard.
                                 ______
                                 
 Response to Written Questions Submitted by Hon. Richard Blumenthal to 
                          Hon. Peter M. Rogoff
    Question 1. A critical component of any performance-based system is 
data collection. I've been troubled in recent months as I've found DOT 
lacks data on several issues. For example, after a tragedy involving a 
rental truck in Connecticut in 2011 that killed a college student, I 
had language put in the most recent surface transportation bill, MAP-
21, that required a study of rental truck safety. DOT returned that 
study to me in July 2014 and informed me there just isn't enough data 
out there to know whether rental trucks are safer than other rental 
vehicles or more dangerous. Likewise, I've sought information about 
guardrail end terminals on our Nation's roads and highways. I've been 
told that there just isn't enough data, that there are insufficient 
guidelines for data collection, and that databases are incomprehensive. 
And so I'm now demanding that DOT undertake a real analysis of the 
devices on our roads and gather this data. I'm alarmed we don't have 
that data already. What efforts is DOT taking to ensure we have better 
data collection efforts?
    Answer. The Department strongly believes in the effectiveness of 
performance-based safety approaches. An essential component of 
performance-based safety oversight is the ability to base decisions on 
objective and accurate data. As such, the DOT Operating Administrations 
responsible for safety oversight have implemented data collection 
systems and have continuously sought to expand and improve upon these 
systems.
    However, DOT is also frustrated by the lack of data in certain 
areas. In many instances, DOT is dependent upon users, states, and 
private industry to supply accurate safety data. All performance-based 
safety regulations must carefully consider the costs associated with 
implementing enhanced data collection and reporting requirements.
    With respect to rental truck safety data, the Federal Motor Carrier 
Safety Administration (FMCSA) maintains the Motor Carrier Management 
Information Systems (MCMIS) database which contains information on 
those large truck crashes which are required to be reported to the 
Agency. The FMCSA relies on our State partners to report these crash 
data. The reported crash data contains essential, but limited, 
information about each incident. A detailed description of the data 
available to FMCSA for the analysis of rental truck safety performance 
was provided in the March 2014 report to Congress titled ``The Rental 
Truck Safety Study Report to Congress.''
    In addition, FMCSA has implemented other data systems to monitor 
safety. The Compliance, Safety, Accountability (CSA) initiative helps 
improve truck safety by collecting carrier data and targeting companies 
for intervention based on that data. Since implementation in 2010, the 
Safety Measurement System (SMS) has been enhanced several times. The 
enhancements were a continuation of the Agency's efforts to provide law 
enforcement, the motor carrier industry, and other safety stakeholders 
with more comprehensive, informative, and regularly updated safety 
performance data.
    The FMCSA will also be providing notice and seeking comments on 
proposed enhancements to the Agency's SMS methodology. Consistent with 
its prior announcements, the Agency is proposing changes to the SMS 
that are the direct result of feedback from stakeholders and the 
Agency's ongoing continuous improvement efforts. The Agency is 
considering several changes in this notice and is asking for comment on 
these issues and other possible areas for consideration. This set of 
enhancements would include changes to some of the SMS Intervention 
Thresholds to better reflect the Behavior Analysis and Safety 
Improvement Categories' (BASICs) correlation to crash risk, other 
changes to the Hazardous Materials (HM) Compliance BASIC, reclassifying 
violations for operating while out-of-service (OOS) to the Unsafe 
Driving BASIC, and adjustments to the Utilization Factor (UF). The 
FMCSA will provide a preview of the proposed enhancements allowing 
motor carriers to see their own data, enforcement to see the data, and 
an opportunity for all to comment prior to implementation.
    With respect to guard rails, the Federal Highway Administration 
(FHWA), through its Roadway Safety Data Program, provides guidance, 
technical assistance, and informational resources to encourage and 
assist State and local agencies to improve the roadway inventory 
component of their safety data systems. The FHWA developed the Model 
Inventory of Roadway Elements (MIRE) which provides guidance on data 
elements that should be considered for collection on all public roads. 
Also, FHWA developed an informational guide on how to collect those 
data, how to manage and assure the quality of data, and how to 
structure information systems containing those data. The FHWA provides 
technical assistance, including a Roadway Data Improvement Program that 
assists States in a thorough review of their roadway inventory data 
collection, management, and analysis efforts and provides 
recommendations on how to review their data systems. Information 
pertaining to roadway safety hardware is an important component of a 
roadway inventory data system, and these are some of the ways we are 
working with state partners to make it better.
    Additionally, the National Academies' National Research Council has 
convened a committee to look at the in-service performance of guardrail 
end terminals. The committee will conduct exploratory work to look at 
whether the data is available in sufficient quantity and quality to 
allow for a meaningful study. Based on the results from the exploratory 
work, the Committee will identify appropriate next steps for either 
gathering data or advising states how best to conduct in-service 
evaluations of guardrail end treatments.
    Finally, DOT and FHWA have evaluated FHWA's internal process for 
determining whether roadside safety hardware is eligible for Federal-
aid reimbursement. This evaluation has identified several changes that 
will be made in the near term. Additionally, we are engaging Volpe 
National Transportation Systems Center to conduct an independent review 
of the entire process by which roadside safety hardware is developed 
and evaluated.

    Question 2. While performance-based safety systems may be 
interesting to discuss, at the end of the day, we still need rules. The 
Rail Safety Improvement Act of 2008 required FRA to issue regulations 
ensuring that each passenger railroad (like Amtrak), commuter railroad 
(like Metro-North), Class I railroad, and any railroad ``that has 
inadequate safety performance (as determined by the secretary)'' 
develop and implement a risk reduction program that ``systematically 
evaluates railroad safety risks on its system and manages those risks 
in order to reduce the numbers and rates of railroad accidents, 
incidents, injuries, and fatalities.''
    This would be a performance-based rule in many respects--and it 
ultimately should address many aspects of fatigue, a critical issue 
made apparent by crashes on Metro-North in recent years. The 2008 rail 
safety bill mandated that these regulations be issued by October 2012. 
FRA has clearly missed the deadline by almost 2.5 years. The 
legislation left open the opportunity for FRA to issue regulations in 
several pieces. FRA has thus broken the mandate into several 
components: FRA issued an NPRM governing risk mitigation and technology 
for passenger and commuter railroads in September 2012, but the agency 
has yet to issue a final rule. FRA issued an NPRM regarding risk 
mitigation and technology implementation for Class I railroads just 
weeks ago in February 2015--and is likely years away from issuing a 
final rule. FRA is likely even many more years away from issuing a rule 
on fatigue management as to either passenger and commuter railroads or 
freight railroads. What is behind the backlog and delay in putting 
forward the risk reduction rulemakings?
    Answer. The Federal Railroad Administration (FRA) continues to work 
aggressively to complete its regulatory workload, placing a priority on 
rulemakings that will most effectively advance safety, particularly 
those required by Congressional mandate.
    In the rulemaking process, FRA has to strike a balance between 
speed and quality. ``Quality'' includes adherence to demanding 
procedural and substantive legal requirements. All three branches of 
the Federal Government--Congress, the courts, and the Executive 
Branch--have established certain mandatory procedures and substantive 
requirements for the rulemaking process. With few exceptions, before 
FRA is permitted to issue a final rule, there must be public notice of 
the proposal and an opportunity for public comment; a reasonable 
response to any public comments; an articulated, rational basis for the 
rule; and consistency of the rule with any applicable laws. In 
addition, FRA must identify, analyze, and weigh the costs and benefits 
of proposed rules and final rules. This evaluation can be very complex, 
but provides critical information to decision makers, reviewers, and 
the public.
    Additionally, FRA often utilizes the Railroad Safety Advisory 
Committee (RSAC) process, especially for difficult issues. This process 
ensures the highest level of transparency and provides the highest 
level of public input. A chartered advisory committee under the Federal 
Advisory Committee Act, RSAC includes representatives of stakeholders 
throughout the railroad industry (rail labor, rail management, rail 
suppliers, rail passengers, State rail safety programs, and other 
organizations). This ensures that FRA hears a wide range of opinions 
early in the rulemaking process so proposals are appropriately vetted 
early, clarified, and communicated. The RSAC process saves time--
especially at the end of the process--by making the cost-benefit 
analysis more accurate, minimizing petitions for reconsideration, and 
creating a rule the regulated community understands.
    The FRA has utilized its limited resources to advance and address 
the safety needs of the country in as expeditious a manner as possible. 
Importantly, the complex nature of the administrative review process 
for rulemaking documents means that widening one part of the pipeline 
(e.g., by adding resources) is not enough to expedite issuance of a 
rule if the rest of the pipeline remains narrow; the delay simply 
occurs at a different stage of the process.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. John Thune to 
                         John D. Graham, Ph.D.
    Question 1. Equivalency Clause. During the hearing, you suggested 
that all prescriptive standards should be amended to permit performance 
standards achieving at least an equivalent level of safety. For 
instances in which regulatory agencies cannot imagine a performance 
standard, you suggested establish processes by which to receive and 
evaluate evidence and ideas submitted by regulated entities. Within 
current statute, what is the strongest example of an equivalency 
clause? How might Congress design such a clause for transportation 
safety?
    Answer. I have not studied all of the equivalency clauses now in 
statute and thus could not pinpoint the strongest one. For a useful 
illustration of the issues, consider the equivalency clause in the 
National Fire Protection Association standards. A good discussion is 
provided by Charles Fialkowski, How to Invoke the Equivalency Clause in 
NFPA Standards. August 9, 2013, https://blogs.siemens.com/burnerman
agementsystems/stories/1266/.

    Question 2. In your experience, which agencies have the best 
processes for considering regulatory proposals and associated evidence 
from regulated entities? What makes those processes effective?
    Answer. I would say the U.S. Food and Drug Administration has the 
best developed system for evaluating the evidence and regulatory 
proposals made by regulated businesses (typically pharmaceutical 
manufacturers and medical device firms). There are several factors that 
contribute to the success of FDA's evidence-based regulatory process: 
the industry's sustain investments in regulatory science, including 
contributions to academic programs that train personnel that can be 
hired by regulators, industry and consulting firms; the agency's 
scientific culture and commitment to third party peer review of the 
agency's key scientific assumptions/determinations; and the agency's 
knowledge that the industry can pursue litigation against the agency if 
the agency does not make a decision based on the best available 
evidence.

                                  

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