[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]



 
OVERSIGHT OF THE FEDERAL TRANSIT ADMINISTRATION'S IMPLEMENTATION OF THE 
                    CAPITAL INVESTMENT GRANT PROGRAM

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

                                (116-27)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                          HIGHWAYS AND TRANSIT

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 16, 2019

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure
             
             
                [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


     Available online at: https://www.govinfo.gov/committee/house-
     transportation?path=/browsecommittee/chamber/house/committee/
                             transportation
                              __________
                              
                              
                              
                  U.S. GOVERNMENT PUBLISHING OFFICE

40-698 PDF              WASHINGTON : 2020




             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                    PETER A. DeFAZIO, Oregon, Chair

ELEANOR HOLMES NORTON,               SAM GRAVES, Missouri
  District of Columbia               DON YOUNG, Alaska
EDDIE BERNICE JOHNSON, Texas         ERIC A. ``RICK'' CRAWFORD, 
ELIJAH E. CUMMINGS, Maryland         Arkansas
RICK LARSEN, Washington              BOB GIBBS, Ohio
GRACE F. NAPOLITANO, California      DANIEL WEBSTER, Florida
DANIEL LIPINSKI, Illinois            THOMAS MASSIE, Kentucky
STEVE COHEN, Tennessee               MARK MEADOWS, North Carolina
ALBIO SIRES, New Jersey              SCOTT PERRY, Pennsylvania
JOHN GARAMENDI, California           RODNEY DAVIS, Illinois
HENRY C. ``HANK'' JOHNSON, Jr.,      ROB WOODALL, Georgia
Georgia                              JOHN KATKO, New York
ANDRE CARSON, Indiana                BRIAN BABIN, Texas
DINA TITUS, Nevada                   GARRET GRAVES, Louisiana
SEAN PATRICK MALONEY, New York       DAVID ROUZER, North Carolina
JARED HUFFMAN, California            MIKE BOST, Illinois
JULIA BROWNLEY, California           RANDY K. WEBER, Sr., Texas
FREDERICA S. WILSON, Florida         DOUG LaMALFA, California
DONALD M. PAYNE, Jr., New Jersey     BRUCE WESTERMAN, Arkansas
ALAN S. LOWENTHAL, California        LLOYD SMUCKER, Pennsylvania
MARK DeSAULNIER, California          PAUL MITCHELL, Michigan
STACEY E. PLASKETT, Virgin Islands   BRIAN J. MAST, Florida
STEPHEN F. LYNCH, Massachusetts      MIKE GALLAGHER, Wisconsin
SALUD O. CARBAJAL, California, Vice  GARY J. PALMER, Alabama
Chair                                BRIAN K. FITZPATRICK, Pennsylvania
ANTHONY G. BROWN, Maryland           JENNIFFER GONZALEZ-COLON,
ADRIANO ESPAILLAT, New York            Puerto Rico
TOM MALINOWSKI, New Jersey           TROY BALDERSON, Ohio
GREG STANTON, Arizona                ROSS SPANO, Florida
DEBBIE MUCARSEL-POWELL, Florida      PETE STAUBER, Minnesota
LIZZIE FLETCHER, Texas               CAROL D. MILLER, West Virginia
COLIN Z. ALLRED, Texas               GREG PENCE, Indiana
SHARICE DAVIDS, Kansas
ABBY FINKENAUER, Iowa
JESUS G. ``CHUY'' GARCIA, Illinois
ANTONIO DELGADO, New York
CHRIS PAPPAS, New Hampshire
ANGIE CRAIG, Minnesota
HARLEY ROUDA, California

                                  (ii)

  


                  Subcommittee on Highways and Transit

           ELEANOR HOLMES NORTON, District of Columbia, Chair

EDDIE BERNICE JOHNSON, Texas         RODNEY DAVIS, Illinois
STEVE COHEN, Tennessee               DON YOUNG, Alaska
JOHN GARAMENDI, California           ERIC A. ``RICK'' CRAWFORD, 
HENRY C. ``HANK'' JOHNSON, Jr.,      Arkansas
Georgia                              BOB GIBBS, Ohio
JARED HUFFMAN, California            DANIEL WEBSTER, Florida
JULIA BROWNLEY, California           THOMAS MASSIE, Kentucky
FREDERICA S. WILSON, Florida         MARK MEADOWS, North Carolina
ALAN S. LOWENTHAL, California        ROB WOODALL, Georgia
MARK DeSAULNIER, California          JOHN KATKO, New York
SALUD O. CARBAJAL, California        BRIAN BABIN, Texas
ANTHONY G. BROWN, Maryland           DAVID ROUZER, North Carolina
ADRIANO ESPAILLAT, New York          MIKE BOST, Illinois
TOM MALINOWSKI, New Jersey           DOUG LaMALFA, California
GREG STANTON, Arizona                BRUCE WESTERMAN, Arkansas
COLIN Z. ALLRED, Texas               LLOYD SMUCKER, Pennsylvania
SHARICE DAVIDS, Kansas               PAUL MITCHELL, Michigan
ABBY FINKENAUER, Iowa, Vice Chair    MIKE GALLAGHER, Wisconsin
JESUS G. ``CHUY'' GARCIA, Illinois   GARY J. PALMER, Alabama
ANTONIO DELGADO, New York            BRIAN K. FITZPATRICK, Pennsylvania
CHRIS PAPPAS, New Hampshire          TROY BALDERSON, Ohio
ANGIE CRAIG, Minnesota               ROSS SPANO, Florida
HARLEY ROUDA, California             PETE STAUBER, Minnesota
GRACE F. NAPOLITANO, California      CAROL D. MILLER, West Virginia
ALBIO SIRES, New Jersey              GREG PENCE, Indiana
SEAN PATRICK MALONEY, New York       SAM GRAVES, Missouri (Ex Officio)
DONALD M. PAYNE, Jr., New Jersey
DANIEL LIPINSKI, Illinois
DINA TITUS, Nevada
STACEY E. PLASKETT, Virgin Islands
PETER A. DeFAZIO, Oregon (Ex 
Officio)

                                 (iii)

 
 
 
 
 
                               CONTENTS

                                                                   Page

Summary of Subject Matter........................................   vii

                 STATEMENTS OF MEMBERS OF THE COMMITTEE

Hon. Eleanor Holmes Norton, a Delegate in Congress from the 
  District of Columbia, and Chairwoman, Subcommittee on Highways 
  and Transit:

    Opening statement............................................     1
    Prepared statement...........................................     2
Hon. Rodney Davis, a Representative in Congress from the State of 
  Illinois, and Ranking Member, Subcommittee on Highways and 
  Transit:

    Opening statement............................................     3
    Prepared statement...........................................     3
Hon. Peter A. DeFazio, a Representative in Congress from the 
  State of Oregon, and Chairman, Committee on Transportation and 
  Infrastructure:

    Opening statement............................................     4
    Prepared statement...........................................     6
Hon. Sam Graves, a Representative in Congress from the State of 
  Missouri, and Ranking Member, Committee on Transportation and 
  Infrastructure, prepared statement.............................    83
Hon. Eddie Bernice Johnson, a Representative in Congress from the 
  State of Texas, prepared statement.............................    83

                               WITNESSES
                                Panel 1

Hon. K. Jane Williams, Acting Administrator, Federal Transit 
  Administration:

    Oral statement...............................................     8
    Prepared statement...........................................    10

                                Panel 2

Robert E. Alger, Chairman of the Board, The Lane Construction 
  Corporation, on behalf of the American Road & Transportation 
  Builders Association:

    Oral statement...............................................    43
    Prepared statement...........................................    44
Tom Gerend, Executive Director, Kansas City Streetcar Authority:

    Oral statement...............................................    53
    Prepared statement...........................................    55
Paul P. Skoutelas, President and Chief Executive Officer, 
  American Public Transportation Association:

    Oral statement...............................................    60
    Prepared statement...........................................    62

                       SUBMISSIONS FOR THE RECORD

Report, Subcommittee on Highways and Transit, Majority Staff, 
  July 16, 2019, Submitted for the Record by Hon. Peter A. 
  DeFazio........................................................    84
Statement of Randal O'Toole, Senior Fellow, Cato Institute, 
  Submitted for the Record by Hon. Sam Graves of Missouri........    87

                                APPENDIX

Question from Hon. Peter A. DeFazio to Hon. K. Jane Williams, 
  Acting Administrator, Federal Transit Administration...........    91
Questions from Hon. Henry C. ``Hank'' Johnson, Jr. to Hon. K. 
  Jane Williams, Acting Administrator, Federal Transit 
  Administration.................................................    91
Questions from Hon. Alan S. Lowenthal to Hon. K. Jane Williams, 
  Acting Administrator, Federal Transit Administration...........    92
Questions from Hon. Sam Graves to Hon. K. Jane Williams, Acting 
  Administrator, Federal Transit Administration..................    92
Questions from Hon. Rodney Davis to Hon. K. Jane Williams, Acting 
  Administrator, Federal Transit Administration..................    93
Question from Hon. Rob Woodall to Hon. K. Jane Williams, Acting 
  Administrator, Federal Transit Administration..................    93
Question from Hon. Gary J. Palmer to Hon. K. Jane Williams, 
  Acting Administrator, Federal Transit Administration...........    94
Questions from Hon. Peter A. DeFazio to Robert E. Alger, Chairman 
  of the Board, The Lane Construction Corporation, on behalf of 
  the American Road & Transportation Builders Association........    95
Questions from Hon. Henry C. ``Hank'' Johnson, Jr. to Robert E. 
  Alger, Chairman of the Board, The Lane Construction 
  Corporation, on behalf of the American Road & Transportation 
  Builders Association...........................................    95
Questions from Hon. Peter A. DeFazio to Tom Gerend, Executive 
  Director, Kansas City Streetcar Authority......................    97
Questions from Hon. Peter A. DeFazio to Paul P. Skoutelas, 
  President and Chief Executive Officer, American Public 
  Transportation Association.....................................    97
Questions from Hon. Henry C. ``Hank'' Johnson, Jr. to Paul P. 
  Skoutelas, President and Chief Executive Officer, American 
  Public Transportation Association..............................    98
  
  
  
                [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                             July 12, 2019

    SUMMARY OF SUBJECT MATTER

    TO:       Members, Subcommittee on Highways and Transit
    FROM:   Staff, Subcommittee on Highways and Transit
    RE:       Subcommittee Hearing on ``Oversight of the 
Federal Transit Administration's Implementation of the Capital 
Investment Grant Program''

                                PURPOSE

    The Subcommittee on Highways and Transit will meet on 
Tuesday July 16, 2019, at 10:00 a.m. in 2167 Rayburn House 
Office Building, to receive testimony related to the 
``Oversight of the Federal Transit Administration's 
Implementation of the Capital Investment Grant Program.'' The 
purpose of this hearing is to examine how the Federal Transit 
Administration (FTA) is implementing the Capital Investment 
Grant (CIG) program in light of the Administration's FY 2018 
and FY 2019 budget requests to phase the program out and the 
June 29, 2018, FTA Dear Colleague letter to transit agencies. 
The Subcommittee will hear from the Federal Transit 
Administration and representatives of the American Public 
Transportation Association, the American Road & Transportation 
Builders Association, and the Kansas City Streetcar Authority.

                               BACKGROUND

    The Capital Investment Grant (CIG) program is a multi-year, 
multi-step process to fund the construction of new or the 
expansion of existing fixed-guideway public transportation 
systems. Fixed guideway systems include subway, light rail, 
commuter rail, streetcar, ferry, and bus rapid transit (BRT) 
projects. Currently, there are 54 projects in the CIG program 
pipeline.\1\ There are three types of CIG projects:
---------------------------------------------------------------------------
    \1\ Overview of Capital Investment Grant Program. Federal Transit 
Administration.
---------------------------------------------------------------------------
      New Starts are projects that exceed $300 million 
in total costs or request $100 million or more in CIG funding 
and must move through a three step approval process.
      Core Capacity projects must go through the same 
three step approval process, but are projects that expand an 
existing fixed-guideway corridor to increase capacity by 10 
percent or more.
      Small Starts projects cost less than $300 million 
and receive less than $100 million of CIG funding, and have a 
more streamlined approval process.\2\
---------------------------------------------------------------------------
    \2\ Public Transportation Capital Investment Grant (New Starts) 
Program: Background and Issues for Congress. Congressional Research 
Service.

APPROVAL PROCESS NEW STARTS AND CORE CAPACITY

    New Starts and Core Capacity projects are required by law 
(49 U.S.C. Sec.  5309) to go through a three-phase approval 
process--Project Development, Engineering, and Construction, as 
shown in Figure 1.
Figure 1: The Capital Investment Grants Program Process


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


Congressional Research Service, Federal Transit Administration. Capital 
                   Investment Grant MAP 21 Overview.

    After FTA accepts and approves an application for CIG 
program funding, the project advances to the Project 
Development phase (PD). During PD, FTA requires an applicant to 
conduct an environmental review, as required by the National 
Environmental Policy Act (NEPA), and submit it to FTA. FTA will 
use this and other documentation to determine a project rating, 
which includes an assessment of the project justification 
criteria and local financial commitment criteria. The applicant 
has two years to complete the PD, although an extension can be 
granted in certain circumstances.
    Moving from the PD to the Engineering phase requires formal 
approval from FTA. A project can enter into the Engineering 
phase (Engineering) once the NEPA process is concluded (under 
which the project is selected as the locally preferred 
alternative), the project is adopted into the metropolitan 
plan, and the project is determined by FTA to be justified on 
its merits through a project rating (discussed in detail 
below), including an acceptable degree of local financial 
commitment.
    The amount of CIG funding requested by the project sponsor 
is fixed when the project is approved for entry into 
Engineering. This means that if a project's cost increases 
after entry into Engineering, the extra cost must be borne by 
the project sponsor from non-CIG funding sources.
    After the Engineering phase is completed, FTA can approve 
the project for entry into Construction by signing a Full 
Funding Grant Agreement, (FFGA), which is a multiyear agreement 
between the Federal Government and a transit agency. An FFGA 
establishes the terms and conditions for federal financial 
participation, including the maximum amount of federal funding 
that is committed. FTA retains some oversight of a project 
during Construction to ensure compliance with the terms of the 
FFGA.

SMALL STARTS APPROVAL PROCESS

    Small Start projects are also required by law (49 U.S.C. 
Sec.  5309(h)) to go through an approval process, but it only 
consists of two phases--PD and construction. As with New Starts 
projects, entry into PD only requires the project sponsor to 
apply to FTA and initiate the NEPA process. Consequently, for 
Small Starts only one formal decision is made by FTA, and that 
is whether to award funding and, hence, move the project into 
construction. Once FTA approves a small start project, funding 
is provided in a Small Starts Grant Agreement (SSGA). The 
Federal Government's funding commitment, as stipulated in the 
SSGA is typically for a single year.

PROJECT RATING

    FTA determines a project rating to decide whether to 
approve a project's advancement to the next phase in the CIG 
process. FTA computes an overall project rating by averaging 
the summary ratings that the project received in the project 
justification criteria and local financial commitment criteria. 
A New Starts or Core Capacity project is required by law to 
achieve an overall rating of at least ``medium'' on a five-
point scale (low, medium-low, medium, medium-high, high). Small 
Starts projects are similarly rated, but the law does not set a 
minimum rating to be eligible for a grant.
Figure 2: Capital Investment Grants Program Project Rating


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


 Source: Federal Transit Administration, Final Interim Policy Guidance 
 Federal Transit Administration Capital Investment Grant Program, June 
                                 2016.

LOCAL FINANCIAL COMMITMENT

    To be approved for federal CIG funding, FTA must determine 
that the project has an acceptable degree of local financial 
commitment. Federal law requires that the project have 
financing that is stable, reliable, and timely; sufficient 
resources to maintain and operate both the existing public 
transportation system and the new addition; and contingency 
money to support cost overruns or funding shortfalls.

                        IMPLEMENTATION CONCERNS

CIG PROGRAM FUNDING

    The CIG program was reauthorized from FY2016 through FY2020 
as part of the Fixing America's Surface Transportation (FAST) 
Act (P.L. 114-94) at $2.3 billion per year. Unlike FTA's other 
major programs, funding for the CIG program comes from the 
general fund of the U.S. Treasury, rather than the mass transit 
account of the Highway Trust Fund and is therefore subject to 
appropriation each year. Table 1 shows the appropriated funding 
levels provided in FY 2016-FY2019. In addition, FTA allocates 
CIG program funding via discretionary grant, whereas FTA 
apportions formula funds for the other major transit grant 
programs.

       Table 1: Enacted CapitalPInvestment Grants Program Funding
------------------------------------------------------------------------
 
------------------------------------------------------------------------
FY 2016                             $2.18 billion
------------------------------------------------------------------------
FY 2017                             $2.41 billion
------------------------------------------------------------------------
FY 2018                             $2.65 billion
------------------------------------------------------------------------
FY 2019                             $2.55 billion
------------------------------------------------------------------------

    The President's Budget for FY 2018 proposed $1.23 billion 
(a reduction of $1.18 billion from FY 2017 enacted) and for FY 
2019 proposed $1 billion (a reduction of $1.65 billion from FY 
2018 enacted) to only fund CIG projects with existing FFGAs. 
The Administration did not request funding to allow FTA to 
advance any new New Starts, Core Capacity, or Small Starts 
projects,\3\ thereby proposing to phase-out the CIG program.
---------------------------------------------------------------------------
    \3\ Federal Transit Administration, Annual Report on Funding 
Recommendations, Fiscal Year 2019 Capital Investment Grants Program, 
Report of the Secretary of Transportation to the United States 
Congress; Federal Transit Administration, Annual Report on Funding 
Recommendations, Fiscal Year 2018 Capital Investment Grants Program, 
Report of the Secretary of Transportation to the United States Congress
---------------------------------------------------------------------------
    However, Congress, on a bipartisan basis, appropriated 
$2.65 billion for the CIG program in FY 2018 and directed FTA 
to obligate $2.25 billion, or 85 percent, of this funding by 
December 31, 2019. Congress also directed that FTA, ``continue 
to administer the capital investment grant program in 
accordance with the procedural and substantive requirements of 
section 5309 [title 49].'' \4\
---------------------------------------------------------------------------
    \4\ P.L. 115-141, Consolidated Appropriations Act, 2018.
---------------------------------------------------------------------------
    In FY 2019, Congress appropriated $2.55 billion for the CIG 
Program and again directed FTA to obligate $2.17 billion, 85 
percent, of this funding by December 31, 2020. The Act 
contained language that repeated its direction from the FY 2018 
Act that FTA, ``continue to administer the capital investment 
grant program in accordance with the procedural and substantive 
requirements of section 5309 [title 49].'' \5\
---------------------------------------------------------------------------
    \5\ P.L. 116-6, Consolidated Appropriations Act, 2019.
---------------------------------------------------------------------------
    In a general, the FY 2020 President's Budget proposed $1.5 
billion (a reduction of $1.05 billion from FY 2019 enacted) for 
the CIG program, including a $500 million set aside for new CIG 
projects.\6\ The House-passed FY 2020 THUD appropriations bill 
provides $2.3 billion for the CIG program and continues the 
direction contained in the FY 2018 and FY 2019 THUD 
Appropriations Acts to FTA.
---------------------------------------------------------------------------
    \6\ FY 2020 Budget Highlights of the U.S. Department of 
Transportation (DOT).
---------------------------------------------------------------------------

FTA DEAR COLLEAGUE

    On June 29, 2018, FTA Acting Administrator K. Jane Williams 
sent a Dear Colleague letter to public transit agencies 
highlighting the Trump Administration's policies regarding the 
CIG program.\7\ Many transit agencies have raised concerns with 
the policies addressed in the Dear Colleague: the treatment of 
federal loans, inclusion of a geographic diversity factor in 
grant awards, and encouraging a low federal cost share. 
Separately, FTA also changed the CIG Risk Assessment process, 
which has also concerned many in the stakeholder community. As 
a result, many transit agencies fear higher project costs and 
more bureaucratic challenges.
---------------------------------------------------------------------------
    \7\ U.S. Dep't of Transportation, Federal Transit Administration, 
Dear Colleague letter, June 29, 2018 [https://www.transit.dot.gov/
sites/fta.dot.gov/files/docs/regulations-and-guidance/policy-letters/
117056/fta-dear-colleague-letter-capital-investment-grants-
june2018_0.pdf].
---------------------------------------------------------------------------
    In response, Congress included a provision in the FY 2019 
Omnibus Appropriations Act that prohibited FTA from using funds 
to implement or further new policies detailed in FTA's Dear 
Colleague letter to CIG project sponsors,\8\ and addressed some 
of these issues within the CIG appropriating paragraph and FTA 
administrative provisions in the House-passed FY 2020 THUD 
Appropriations Bill.\9\
---------------------------------------------------------------------------
    \8\ P.L. 116-6, Consolidated Appropriations Act, 2019.
    \9\ House-passed FY 2020 THUD Appropriations Bill
---------------------------------------------------------------------------

TREATMENT OF FEDERAL LOANS

    Some CIG projects include federal loans from the 
Transportation Infrastructure Finance and Innovation Act 
(TIFIA) program as part of their overall project financing 
package. Since these loans are typically repaid using non-
federal funding sources, project sponsors believe the loans 
should count toward their local financial commitment.
    FTA's Dear Colleague letter states that it ``considers U.S. 
Department of Transportation loans in the context of all 
Federal funding sources requested by the project sponsor when 
completing the CIG evaluation process, and not separate from 
the Federal funding sources.'' \10\
---------------------------------------------------------------------------
    \10\ U.S. Dep't of Transportation, Federal Transit Administration, 
Dear Colleague letter, June 29, 2018 [https://www.transit.dot.gov/
sites/fta.dot.gov/files/docs/regulations-and-guidance/policy-letters/
117056/fta-dear-colleague-letter-capital-investment-grants-
june2018_0.pdf].
---------------------------------------------------------------------------
    Current law states that TIFIA loans may be used for any 
non-federal share of project costs required under title 23, 
United State Code (USC) or Chapter 53 of title 49 USC, if the 
loan is repayable from non-federal funds.\11\ Prior to the Dear 
Colleague letter, FTA allowed project sponsors to decide 
whether the TIFIA loan would count as local or federal funding. 
FTA's new policy provides less flexibility for project sponsors 
of transit projects than for highway and other projects that 
receive a TIFIA loan.
---------------------------------------------------------------------------
    \11\ 23 U.S.C. Sec.  603(b)(8) states: ``The proceeds of a secured 
loan under the TIFIA program may be used for any non-Federal share of 
project costs required under this title [title 23] or chapter 53 of 
title 49, if the loan is repayable from non-Federal funds.''
---------------------------------------------------------------------------
    Section 193 of the FY 2020 House-passed THUD bill amends 
federal law to ensure that TIFIA loans repaid with non-federal 
sources are treated as local dollars when assessing cost share 
requirements.

GEOGRAPHIC DIVERSITY

    In its Dear Colleague letter, FTA states that it will 
consider geographic diversity as a factor in FTA funding 
allocation decisions. In its July 2018 Fact Sheet on the Dear 
Colleague letter, FTA states, ``[i]t is longstanding FTA 
practice to consider geographic diversity in discretionary 
funding decisions.'' \12\
---------------------------------------------------------------------------
    \12\ U.S. Dep't of Transportation, Federal Transit Administration, 
FACT SHEET: Capital Investment Grants Program Dear Colleague Letter, 
July 2018.
---------------------------------------------------------------------------
    However, neither current law nor FTA's current Policy 
Guidance for the CIG program (2016) include geographic 
diversity as a factor.\13\ When prioritizing projects among 
those that have met all the necessary requirements and ratings, 
official FTA policy guidance emphasizes local financial 
commitments (including private contributions) and project 
readiness, but not geographic distribution.\14\ In fact, 
current law allows FTA to expedite certain reviews for projects 
whose sponsors have recently successfully completed another CIG 
project.
---------------------------------------------------------------------------
    \13\ U.S. Dep't of Transportation, Federal Transit Administration, 
Final Interim Policy Guidance, Capital Investment Grant Program, June 
2016.
    \14\ See id.
---------------------------------------------------------------------------

FEDERAL AND CIG COST SHARE

    Under the FAST Act, a CIG project cannot exceed a maximum 
federal share of 80 percent; however, a New Starts project may 
not receive more than 60 percent of its total cost from the CIG 
program. Core Capacity and Small Starts projects may receive up 
to 80 percent of total cost from the CIG program.\15\ The FY 
2019 Omnibus Appropriations Act reduces the amount a New Starts 
project can receive in CIG funding to not more than 51 percent.
---------------------------------------------------------------------------
    \15\ 49 U.S.C. 5309(l)(1)
---------------------------------------------------------------------------
    FTA's Dear Colleague letter states that ``Federal law 
requires FTA to evaluate all projects seeking CIG funding on 
local financial commitment, and it has the authority to 
consider the extent to which the project has a local financial 
commitment that exceeds the required non-government share of 
the cost of the project.'' Transit agencies have informed the 
Committee that FTA staff are encouraging project sponsors to 
``overmatch'' the federal share by committing additional local 
funds to the project beyond the required share.
    Further, FTA staff are indicating that New Starts projects 
are unlikely to get approval unless they are under a 40 percent 
federal cost share, despite the fact the FY 2019 Omnibus 
Appropriations Act allows a federal match of up to 51 percent. 
Although Federal law allows FTA to encourage overmatch, it does 
not authorize FTA to require a project sponsor to overmatch in 
order to receive a New Starts grant.\16\
---------------------------------------------------------------------------
    \16\ 49 U.S.C. 5309(l)(5) establishes that FTA is not authorized to 
require a local match for a project that is more than the federal cap. 
FY 2019 Omnibus Appropriations Act set the federal cap at 51 percent of 
the project cost.
---------------------------------------------------------------------------
    Section 164 of the FY 2020 House-passed THUD bill addressed 
FTA's new policy by prohibiting the use of funds to request or 
require any project to have a maximum CIG contribution lower 
than 50 percent of the total project cost.

CHANGES TO RISK ASSESSMENT PROCESS

    In addition to the Dear Colleague letter, FTA also 
announced two changes to the CIG Risk Assessment process. The 
risk assessment is a third party assessment of the project 
risks and their effects on the project's timeline and cost 
estimate. It also calculates the amount of contingency funding 
that FTA will require the project sponsor to have in order to 
cover potential cost overruns. The required contingency fund 
comes from local dollars.
    First, FTA moved the Risk Assessment of New Starts and Core 
Capacity projects from the Engineering phase to the Project 
Development phase. In addition, FTA may perform updates to the 
Risk Assessment and conduct scope, cost, and schedule reviews 
of the project prior to awarding an FFGA. FTA stated that it 
believes this policy change would allow projects to identify 
and address issues earlier in the process and improve the 
estimate for final costs. In turn, it would ensure that the CIG 
contribution that FTA locks in is sufficient as a project moves 
from Project Development into Engineering. However, current law 
limits the Project Development phase of New Start and Core 
Capacity projects to a two-year period (although FTA may extend 
the time-period).\17\ Transit agencies are concerned that 
requiring the Risk Assessment during the Project Development 
phase provides an additional hurdle to completing Project 
Development within the two-year time period.
---------------------------------------------------------------------------
    \17\ 49 U.S.C. Sec.  5309(d)(1)(C) and (e)(1)(c).
---------------------------------------------------------------------------
    Second, when assessing the appropriateness of the New 
Starts project's budget, FTA increased its probability 
threshold from 50 percent to 65 percent in determining the 
reasonableness of the cost and schedule estimates. This policy 
change means is that project sponsors whose contingencies do 
not meet the 65 percent threshold will experience project costs 
increases. However, FTA establishes the project's Federal share 
upon entry into Engineering, and any cost overruns are the 
responsibility of the project sponsor. Many transit agencies 
believe this new policy is unnecessarily increases costs for 
project sponsors, since they are already responsible for 
project overruns.
    Section 164 of the FY 2020 House-passed THUD bill provides 
an additional six months within the Engineering Phase to 
determine the project's CIG grant amount, and prohibits FTA 
from requiring a probability threshold higher than 50 percent 
in the risk assessment.

                              WITNESS LIST

PANEL I

      The Honorable K. Jane Williams, Acting 
Administrator, Federal Transit Administration

PANEL II

      Mr. Bob Alger, President and Chief Executive 
Officer, The Lane Construction Corporation, on behalf of the 
American Road & Transportation Builders Association
      Mr. Tom Gerend, Executive Director, The Kansas 
City Streetcar Authority
      Mr. Paul P. Skoutelas, President and CEO, 
American Public Transportation Association

 
OVERSIGHT OF THE FEDERAL TRANSIT ADMINISTRATION'S IMPLEMENTATION OF THE 
                    CAPITAL INVESTMENT GRANT PROGRAM

                              ----------                              


                         TUESDAY, JULY 16, 2019

                  House of Representatives,
              Subcommittee on Highways and Transit,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:06 a.m., in 
room 2167 Rayburn House Office Building, Hon. Eleanor Holmes 
Norton (Chairwoman of the subcommittee) presiding.
    Ms. Norton. The subcommittee will come to order and good 
morning.
    I want to welcome everyone to today's hearing. This is a 
hearing on a matter that needs oversight. It is the Federal 
Transit Administration's implementation of the Capital 
Investment Grant--the CIG--program.
    This hearing is necessary not only because it is timely, 
but because we are now hearing from many transit agencies, from 
mayors, from local officials, questions that we simply must 
answer.
    They say to us that they are frustrated by the slow pace 
and the needless bureaucracy. Now here is a program that has 
money. So you can imagine the frustration, that money is not 
getting to where it is needed. They say they can't get 
communication so that they can understand how to proceed and 
what is slowing up this program. And they say they are 
especially delayed in project approvals.
    What is happening here? Surely this isn't deliberate. But 
then we are left to believe that the administration doesn't 
know how to handle this program. So we need to come to grips 
with the problems today, particularly since transit is 
associated with the backbone of our urban areas. This committee 
has a long tradition that is bipartisan of paying attention to 
matters that are important to rural areas such as bridges and 
barges that farmers need to get their products to market. In 
the same way we expect attention to transit we are aware of 
course that that is mostly an issue for urban America but 
increasingly we are talking about the metropolitan areas as 
well. We are not simply talking about big cities. America is 
clustered around these metropolitan areas.
    The CIG program has long enjoyed strong bipartisan support. 
We authorized it in the FAST Act at $2.3 billion per year. In 
the same way, the House Appropriations Committee has strongly 
supported the CIG program, appropriating funding. And they have 
appropriated funding generally well above the authorized level 
because of the high demand for the project. That is pretty 
unusual. Therefore, any slowup in this project has got to be 
explained by the administration. Why hasn't the administration 
moved this program more rapidly? The budget requests for the 
CIG program from the administration have been, to say the 
least, anemic, and the administration of the CIG program has 
created many challenges. So it looks like a program that should 
be going along well, is failing at both ends.
    The FTA sent a Dear Colleague letter to transit agencies 
that created a lot of confusion. They expressed fears of higher 
project costs and more bureaucratic challenges. For example, 
until this Dear Colleague, the FTA had allowed project sponsors 
to decide whether a TIFIA loan, paid back with local dollars, 
would count as local or Federal funding. FTA now demands that 
all TIFIA funds be counted as Federal share, no matter who 
actually pays for the loan. And that is ridiculous. So we have 
got to have some answers on matters like that.
    In its Dear Colleague letter, FTA states that it will 
consider geographic diversity as a factor in FTA funding. The 
FTA seems intent on spreading a very little amount of money 
very quickly over the entire Nation. That does not reflect the 
reality of how cities and, again I stress, metropolitan areas 
grow. They are expanding at a rapid pace and should not be 
penalized because of multiple projects in the CIG pipeline.
    If we are going to keep up with this growth, this very 
rapid growth, we are going to have to make big investments in 
transit. Is this deliberate slowing of the CIG program, or is 
it rank inefficiency?
    The House-passed transportation appropriations bill 
addressed many of the issues, and others, I expect, will be 
raised at this hearing. When this committee reauthorizes the 
FAST Act, you can be sure we will also carefully review the CIG 
program and if necessary, we will amend section 5309.
    [Ms. Norton's prepared statement follows:]

                                 
    Prepared Statement of Hon. Eleanor Holmes Norton, a Delegate in 
Congress from the District of Columbia, and Chairwoman, Subcommittee on 
                          Highways and Transit
    Welcome to today's hearing on the Federal Transit Administration's 
implementation of the Capital Investment Grant (CIG) program. We have 
heard from many transit agencies, mayors and other local officials 
about the challenges of getting a transit project funded by the CIG 
program.
      They are frustrated by the slow pace of needless 
bureaucracy.
      They are frustrated by the lack of communication.
      They are frustrated by delays in project approvals.

    Today we are going to examine these problems and see if we cannot 
find a solution.
    Transit is the backbone of our urban cities. Rural Republicans may 
believe transit is of no use to them, but that does not mean they need 
to attack it. We are all in this together. Transit costs money as do 
the bridges and barges America's farmers need to get their products to 
market. But I do not oppose your bridges and barges in rural America. I 
know you need them, just like urban America needs bridges and transit. 
You have my support for your infrastructure needs. All I ask is for 
your support for urban American infrastructure needs too. And that 
brings us to the implementation of the Capital Investment Grant 
program.
    The CIG program enjoys strong bipartisan support and was 
reauthorized as part of the FAST Act at $2.3 billion per year. The 
House Appropriations Committee has also been a strong supporter of the 
CIG program, appropriating funding levels generally well above the 
authorized level because of the high demand for projects.
    Today we just need to push the Administration to become a strong 
supporter of the Capital Investment Grant program. Their budget 
requests for the CIG program have been anemic and their administration 
of the CIG program has created many challenges for transit agencies.
    In June 2018, FTA sent a Dear Colleague letter to transit agencies 
that created considerable confusion and consternation. Transit agencies 
expressed fears of higher project costs and more bureaucratic 
challenges.
    For example, until this Dear Colleague, FTA allowed project 
sponsors to decide whether a TIFIA loan, paid back with local dollars, 
would count as local or federal funding. FTA now demands that all TIFIA 
funds be counted as federal share no matter who actually pays for the 
loan. That is ridiculous.
    In its Dear Colleague letter, FTA states that it will consider 
geographic diversity as a factor in FTA funding allocation decisions. 
FTA seems intent on spreading the peanut butter thin over the entire 
nation. My concern with this is it does not reflect the reality of how 
cities grow. Cities that are expanding at a rapid pace should not be 
penalized for multiple projects in the CIG pipeline. To keep up with 
rapid growth requires big investments in transit.
    The House-passed Transportation Appropriations bill addresses many 
of these issues and others I expect will be raised at this hearing. 
When this committee reauthorizes the FAST Act, we will also carefully 
review the CIG program and amend Section 5309 as necessary.

    Ms. Norton. I am going to ask the ranking member for his 
comments.
    Mr. Davis. Well, thank you. I just really appreciate the 
opportunity, Madam Chair, to be here.
    You know, districts like mine that are not in urban areas, 
you still have transit needs too. The district I represent in 
central Illinois is one that brings in a lot of transit issues 
in and around the public universities in Champaign-Urbana, 
Bloomington-Normal. Even in Springfield, Illinois, and down 
into Metro East around Southern Illinois University at 
Edwardsville. Transit is necessary.
    My concern today is how do we effectively bring in some of 
what I consider the mini-urban areas into the transit programs 
like the Capital Investment Grant program and what we do to 
ensure that there is capability to provide those services in 
nonmajor urban areas, but also the ability to serve those 
customers and be able to market that product.
    So thank you for having the opportunity to be here. This is 
our fourth hearing as we continue to work to reauthorize the 
Federal surface transportation policies. And I want to thank 
the chair of this subcommittee and also Chairman DeFazio, for 
their leadership and their bipartisanship on this issue.
    [Mr. Davis' prepared statement follows:]

                                 
 Prepared Statement of Hon. Rodney Davis, a Representative in Congress 
    from the State of Illinois, and Ranking Member, Subcommittee on 
                          Highways and Transit
    The Subcommittee is holding its fourth hearing as we continue our 
work to reauthorize federal surface transportation programs and 
policies. Today, the Subcommittee will focus on the Federal Transit 
Administration's (FTA) Capital Investment Grants program, commonly 
known as ``New Starts'' or ``the CIG program.''
    Historically, federal public transportation programs have provided 
financial support, primarily for capital costs, to local transit 
agencies around the country. Although the benefits of federal 
investments in public transit systems appear to be limited to the 
community they serve, these investments are, in fact, important to the 
Nation.
    Federal transit programs, including the CIG program, complement our 
investments in other transportation modes in order to support an 
integrated national surface transportation network. They provide an 
additional and affordable mobility option that people can use to travel 
to work or school.
    The CIG program differs from other discretionary grant programs. 
The grant process, laid out in statute and regulations, is a complex 
multi-year and multi-step process. FTA evaluates and rates all projects 
at various points during the process. Projects that are selected for 
funding must have a strong local financial commitment and achieve a 
sufficient overall rating.
    There are currently 54 projects moving through the CIG pipeline. 
These include large projects, such as the Red and Purple Line 
Modernization Project in Chicago, and smaller projects, such as the 
Streetcar project in the City of Baton Rouge.
    The FAST Act authorized $2.3 billion for the CIG program in each 
fiscal year 2016 through 2020, and the House version of the FY 2020 
Appropriations bill would provide $2.3 billion for the CIG program.
    I recently had the opportunity to speak with Acting Administrator 
Williams; I believe she is doing everything in her power to ensure that 
the FTA executes the CIG program consistent with federal law. We must 
have a responsible program that makes sound investments in public 
transit to ensure the public and stakeholders continue to support the 
program. This will allow us to make the necessary investments to 
modernize our surface transportation system.
    I understand, however, that some stakeholders have concerns with 
changes that FTA announced last year, and the effect those changes are 
having on projects in the pipeline. I look forward to our discussion on 
this important program.

    Mr. Davis. And with that, Madam Chair, I yield back.
    Ms. Norton. Thank you very much, Ranking Member Davis.
    I would like to ask Mr. DeFazio, the chair of the full 
committee, if he has any opening statement.
    Mr. DeFazio. Thank you, Madam Chair. Yes, I do.
    I had some optimism that we would be looking at a major 
infrastructure package in partnership with the President and 
the White House, and the first blow to those hopes was back 
actually in the 2018 budget request when the President's budget 
proposed essentially to eliminate the CIG program. The Congress 
responded and we said no, on a bipartisan basis and 
appropriated a record amount of funds, $2.6 billion, to run the 
program as the law requires. And similarly in 2019, yet another 
Mick Mulvaney proposal to essentially eliminate the program and 
yet another bipartisan response from Congress to appropriate 
$2.5 billion into the program.
    Back in 2017, it was tremendously disruptive and basically 
all of the pending projects were canceled. Now this is a bit 
odd, because the assertion by DOT was that this was 
administration policy. Now everybody knows that Presidents' 
budgets are not policy, they are merely a suggestion to the 
United States Congress. And Congress holds the power of the 
purse. So a suggestion by the President or an ideologue running 
the President's office or OMB or whatever Mr. Mulvaney is 
running these days--both, everything--is not a law and cannot 
supersede the law. Ideology does not supersede the law.
    Now I have read the testimony here from the Acting 
Administrator and it paints a very rosy picture for CIG but I 
don't think things are quite as rosy as purported there.
    Earlier this year, we sent a letter to FTA and transit 
agencies looking for data that allows us to look at the CIG 
program operation under the FAST Act. That is another one of 
our duties here, is to oversee the laws that have been 
implemented and see that they are being properly followed.
    Now if we use that data, despite what I keep hearing and 
heard from the President's previous infrastructure advisor, DJ 
Gribbin, that the only problem was the environmental review 
process and that is what was slowing everything down and this 
administration was going to streamline things. Actually if we 
look at the first slide, CIG projects have nearly doubled in 
the delays for approval. Entry into engineering, 135 to 289 
days; full funding grant agreements, 172 to 391 days; SSGA, 112 
to 243 days--everything is more than double.
    [Slide.]
    So now to get a New Start project through to the final 
phase is 391 days, more than a year, Small Starts, 243 days. 
And this covers the entire period of the FAST Act and 
certainly, I think, reflects that things are not as rosy as is 
purported.
    Secondly, staff found that FTA actions since 2017 have 
resulted in $845 million--almost $1 billion in extra costs. The 
risk assessment process added $650 million and the delays 
caused about another $200 million.
    Then third, the staff found that the CIG cost share for New 
Starts has shrunk dramatically. It is clear that transit 
agencies are feeling pressured by the administration. Again, 
the ideological proposals of Mr. Mulvaney and DJ Gribbin, now 
gone, was that we were going to shrink the share that would be 
paid by the Federal Government and increase the burden on the 
local governments. And if you look here, it was nearly 50 
percent CIG cost share pre-2017. Now it is below 36.6 percent 
and that is because the administration has basically sent a 
message that if you ask for more than 40 percent, you are not 
going to get approved or you are going to get a very low 
rating. This unofficial policy or whatever this is directly is 
contrary to 49 U.S.C. section 5309(l)(5) and the fiscal year 
2019 Omnibus Appropriations Act which said the FTA is not 
authorized to require a local match that is more than 49 
percent of the project cost.
    Fourth, staff found that FTA has delayed the use of 
streamlining tools. Now that is just extraordinary for an 
administration that was going to get all these barriers out of 
the way. If we want to repeal an environmental law, we can 
streamline that. If we want to get transit grants out, no, no, 
we really can't do that.
    Approvals for a Letter of No Prejudice took 44 percent 
longer than under the previous administration, and these 
letters allow work to begin on a project earlier, which as we 
all know, the sooner you can initiate a project, the greater 
the cost savings as long as it is well-planned. We have heard 
from multiple transit agencies that are absolutely desperate to 
get a Letter of No Prejudice because of the potential cost 
savings. So it is vexing and interesting, and hopefully it can 
be corrected that these things are taking so long.
    So I am hoping that given the testimony submitted by the 
Acting Administrator, given the past record, that we can do 
better in the future. And that is why we are here today.
    [Mr. DeFazio's prepared statement follows:]

                                 
   Prepared Statement of Hon. Peter A. DeFazio, a Representative in 
     Congress from the State of Oregon, and Chairman, Committee on 
                   Transportation and Infrastructure
    Since the election in 2016, I have been cautiously optimistic that 
the President and Congress could really work together and invest in the 
rebuilding of America. President Trump was clear in his public 
statements that he wanted to be the ``Infrastructure President.'' I 
remain hopeful that this is still possible. I stand ready to work with 
anyone who is serious about investing in our infrastructure.
    But my optimism took a blow with the President's first budget 
request to Congress. The Administration's FY 2018 request slashed 
infrastructure investment, most notably the effective elimination of 
new transit investments under the Capital Investment Grant (CIG) 
program. The President proposed to slash over a billion dollars from 
the program and fund only projects that were already under 
construction. Dozens of projects in the planning phase were on the 
chopping block.
    Congress responded by appropriating a record amount of CIG funds, 
over $2.6 billion, and directing the Federal Transit Administration 
(FTA) to run the CIG program as current law requires. This was repeated 
in 2019--another budget request slashing investment in transit projects 
by the administration and Congress responding by appropriating $2.5 
billion to the CIG program.
    Despite clear direction from Congress, FTA asserted that the 
President's Budget Request was administration policy, and they refused 
to approve CIG projects that had been moving through the approval 
process for years. This unlawful action carried on for most of 2017, 
save for a few projects that were too far along to refuse.
    A President's annual budget request is nothing more than a request 
for Congress to consider. It cannot supersede the law or the 
congressional power of the purse. FTA began violating the law the first 
day they decided to ignore the CIG program.
    I have read your testimony, Acting Administrator Williams. You are 
clearly trying to paint the picture that the administration's refusal 
to initially run the CIG program had no impact. This testimony cherry 
picks a few project comparisons to argue everything is fine. 
Unfortunately, that is not true.
    Earlier this year, Ranking Member Graves and I sent a bipartisan 
letter to the FTA and dozens of transit agencies seeking ``data that 
will allow us to conduct a quantitative analysis of the CIG program and 
its operations under the FAST Act.'' I am releasing the results of that 
analysis today.
    First, using data supplied by FTA, staff found that the number of 
days needed for project approval more than doubled under this 
administration. These delays affected projects regardless of their 
size, indicating that the delays had nothing to do with the complexity 
of projects.


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    As you can see on the screen, the average number of days to get a 
New Start project through the final phase grew to 391 days. Small Start 
projects averaged 243 days. This data covers the entire period of the 
FAST Act and represents a fair and accurate look at the impact the 
Trump Administration has had on transit projects.
    Second, staff found that FTA actions since 2017 have resulted in at 
least $845 million in extra costs for transit agencies. FTA's changes 
to the Risk Assessment process added $650 million to total project 
costs, and FTA's delays inflicted on the approval process caused $195 
million in additional project costs. These additional costs were 
generally covered by local governments, forcing them to scramble to pay 
for federal inaction. These unnecessary costs could have instead funded 
several more transit projects.
    Third, staff found the CIG cost share for New Starts projects has 
shrunk dramatically. It is clear that transit agencies have felt 
pressured by FTA staff to seek lower CIG shares in order to be approved 
for a CIG grant, in contravention of the statute.



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    On the screen, you can see the data demonstrates the effect of this 
pressure; the CIG cost share for New Start projects has dropped over 10 
percent in the last two years to below 40 percent. This is below the 
arbitrary 40 percent cost share cap that FTA has unofficially 
communicated to transit agencies. This unofficial policy is directly 
contrary to 49 U.S.C. Section 5309(l)(5) and the FY 2019 Omnibus 
Appropriations Act, which combined essentially say FTA is not 
authorized to require a local match for a project that is more than 49 
percent of the project cost.
    Fourth, staff found that FTA has delayed the use of streamlining 
tools for CIG transit projects. Approvals for a Letter of No Prejudice 
(LONP) took 44 percent longer than under the previous administration.



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    These letters allow work to begin before final approval on the most 
time sensitive components of the project. LONPs can lead to significant 
cost savings and may reduce the potential for schedule delays later in 
the project. In fact, the Committee has heard from multiple transit 
agencies desperate for a LONP because of the cost savings they afford. 
Given the importance this administration has placed on streamlining 
project approvals, expediting LONPs should have been a priority.
    I hope these findings, and the discussion today, mark the beginning 
of a new page, where FTA, the Department of Transportation, and the 
White House drop their hostility towards transit and follow the law. We 
should be working together to improve transportation options for all 
Americans, not making it more difficult.

    Mr. DeFazio. Thank you, Madam Chair.
    Ms. Norton. I thank Chairman DeFazio.
    I would like to welcome Acting Administrator K. Jane 
Williams, Federal Transit Administration, and ask for her 
testimony at this time.

   TESTIMONY OF HON. K. JANE WILLIAMS, ACTING ADMINISTRATOR, 
                 FEDERAL TRANSIT ADMINISTRATION

    Ms. Williams. Good morning. Thank you, Chairman Norton, 
Ranking Member Davis and members of the subcommittee. I would 
also like to recognize Chairman DeFazio and Ranking Member 
Graves; thank you for inviting me here to appear before you 
today to talk about the Federal Transit Administration's 
Capital Investment Grants Program.
    FTA's mission is to improve public transportation for 
America's communities. And last year, we invested more than $15 
billion to support public transportation consistent with the 
law. In all of our work, FTA continues to focus on implementing 
Secretary Chao's three major priorities--safety, innovation and 
infrastructure investment.
    Last April, FTA certified the Washington Metrorail Safety 
Commission as a State safety oversight agency. The 
certification allowed FTA to transfer direct safety authority 
of the Washington Metropolitan Area Transit Authority's 
Metrorail system to the WMSC, after nearly 4 years of direct 
safety oversight.
    When I began my tenure at FTA in August of 2017, there was 
not one single State safety oversight program certified by FTA. 
Now 18 months later, well before the April 15th deadline, all 
31 State safety oversight programs were certified, allowing 
billions of dollars of transit funding to continue to support 
agencies across our Nation.
    FTA has also achieved significant success in advancing 
innovation in public transportation. FTA's Mobility on Demand 
Program, which I know is a subject of interest to you, Madam 
Chair, has supported new forms of mobility such as car-sharing 
services and automation. Our MOD Program has helped meet the 
expectations of the traveling public for modernized service 
through on-demand options, integrated fare payments and ride-
sharing.
    My testimony today focuses on the Trump administration's 
track record in advancing CIG projects. The CIG program plays a 
significant role in modernizing and expanding public 
transportation in communities across our Nation. Authorized at 
$2.3 billion annually, it is FTA's largest discretionary 
investment program. And under President Trump and Secretary 
Chao's leadership, FTA has advanced 25 projects totaling 
approximately $7.6 billion in funding. In fact, in just the 
first 2 years of the Trump administration, FTA signed 13 CIG 
grant agreements totaling $3.3 billion. And yet in the same 
first 2 years of the previous administration only 10 
construction grant agreements were signed totaling only a 
little over $1 billion in investment.
    In 2018 alone, FTA was able to execute 10 construction 
grant agreements including one of our largest to date, $1.17 
billion to Lynnwood Link Light Rail System in Seattle.
    The President's fiscal year 2020 budget request also 
supports the CIG program with $1.5 billion in funding, 
including, for the first time, $500 million for potential new 
Capital Investment Grant projects funded through the general 
fund.
    FTA is moving projects through the CIG program in 
accordance with the law. It is a priority of the administration 
to streamline the process as much as possible, and we are 
making progress. Just last month, we took a major step in 
implementing the expedited project delivery program. However, 
it is important to note that CIG projects are often delayed by 
local challenges that impact the timing of construction grant 
awards. FTA does not sign construction grant agreements 
committing millions and many times billions of dollars until we 
have assurance from the project sponsors that they have met the 
multiple steps outlined in law, that all non-CIG funding is 
committed, and the project's cost, scope and schedule are firm 
and final.
    FTA has also emphasized the need for a firm local financial 
commitment, recommending a balanced approach for the local, 
State and private-sector funding through value capture 
alongside Federal grants and loans. Simply put, that's just 
good governance.
    Over many years, across multiple administrations, FTA has 
encouraged project sponsors to leverage Federal dollars to 
capture the value we all recognize transit brings to 
communities across the Nation. And like you, we want to ensure 
that projects funded with taxpayer dollars are sound 
investments.
    In closing, let me assure you that FTA will continue to 
press its projects through the program consistent with the law 
and will review projects based on its merits. During my tenure 
as FTA's Acting Administrator, I have met with hundreds of 
stakeholders and Members of Congress and staff.
    I look forward to continuing to work with this committee 
and each of you and I am happy to answer any of your questions.
    Ms. Norton. Thank you for that testimony. Without 
objection, the witness' full statement will be included in the 
record.
    [Ms. Williams' prepared statement follows:]

                                 
  Prepared Statement of Hon. K. Jane Williams, Acting Administrator, 
                     Federal Transit Administration
    Good morning Chairman Norton, Ranking Member Davis, and Members of 
the Subcommittee. I would also like to recognize Chairman DeFazio and 
Ranking Member Sam Graves. Thank you for inviting me to appear before 
you today to report on the Federal Transit Administration's Capital 
Investment Grants (CIG) program.
    FTA's mission is to improve public transportation for America's 
communities. Since 1964, FTA has partnered with state and local 
governments to create and enhance public transportation systems. Today, 
FTA invests more than $13 billion annually to support and enhance rail, 
bus, ferry, and other transit services. This investment has helped 
modernize public transportation and extend service into large and small 
urban areas as well as rural communities across our nation.
    The CIG program began as a loan program for transit projects in the 
1960s. Today, the CIG program, authorized at $2.3 billion a year, is 
the Department's largest discretionary grant program.
    Today's CIG program funds capital investments in heavy rail, 
commuter rail, light rail, streetcars, and bus rapid transit. These are 
high-impact, capital-intensive projects that receive substantial local 
and national attention. In fact, the CIG program accounts for 
approximately 20 percent of FTA's annual appropriation but generates 
more scrutiny than all of our other programs combined.
    My testimony today focuses on the Department's track record in 
advancing CIG projects and dispelling misinformation about DOT's 
current management of the program. First, let me summarize some of the 
important work FTA has accomplished under this Administration.
                        Departmental Priorities
    In addition to funding projects through the CIG program, we have 
focused our attention on Secretary Chao's three major priorities: 
safety, innovation and infrastructure investment.
    As Chairman Norton and other Members are aware, FTA certified the 
Washington Metrorail Safety Commission (WMSC) as one of the 31 State 
Safety Oversight Agencies for states with rail transit last spring, 
ahead of the April 2019 statutory deadline. The WMSC certification 
allowed FTA to transfer direct safety oversight of the Washington 
Metropolitan Area Transit Authority's (WMATA) Metrorail system to the 
WMSC after nearly four years of direct safety oversight authority by 
FTA. You will recall that the Department assumed direct safety 
oversight of WMATA in 2015 following serious safety lapses, including a 
smoke incident in which one passenger was killed and several injured.
    FTA issued eight directives with 289 corrective actions; conducted 
four safety investigations focused on track integrity, stop signal 
overruns, traction power electrification, and vehicle securement; and 
completed more than 1,200 inspections. FTA partnered with WMATA General 
Manager Paul Wiedefeld to bring about significant systemic safety 
improvements across the WMATA system before transferring oversight to 
the WMSC. FTA continues to provide annual funding and technical 
assistance to the WMSC.
    When I began my tenure at FTA in August of 2017, there was not one 
single State Safety Oversight Program certified by FTA. Thanks to the 
hard work of our team at FTA and action by our state partners, all 31 
SSO programs are now certified.
    FTA has continued to support transit across the nation, awarding 
more than $15 billion dollars in grants, including funding for bus 
fleet modernization, state of good repair needs, and planning for 
Transit-Oriented Development.
    For example, last fall FTA awarded $12 million in Bus and Bus 
Facilities grants to Central Illinois. As Ranking Member Davis is 
aware, the grants enabled Illinois transit agencies to modernize bus 
fleets, improve service and enhance safety for riders.
    Transit riders in Texas also benefited from an FTA Bus and Bus 
Facilities grant last year. A $7 million grant to the Texas Department 
of Transportation replaced older buses that exceeded their useful life 
in rural areas throughout the state. The grant, combined with matching 
funds, will replace more than 250 buses and bring the rural fleet in 
line with standards for state of good repair.
    FTA supports Secretary Chao's priority to advance innovation in 
transportation through a $15 million Integrated Mobility Innovation 
(IMI) discretionary grant program, which will fund some of the most 
promising new technologies. We expect the IMI program will help deliver 
new forms of mobility such as car-sharing services and automation to 
help meet transit rider expectations and increase ridership.
About the CIG Program
    The CIG program funds the construction of transit projects that 
have completed a statutorily defined multi-step, multi-year process. As 
required by law, a proposed project must be evaluated and receive an 
overall rating by FTA based on both the project justification and the 
local financial commitment criteria at several points during the 
process. A project must receive a ``Medium'' or better overall rating 
to advance to the next step in the process, including before it can be 
considered for a construction grant agreement.
    The CIG program is one of the government's most complex and 
rigorous grant programs. Depending on the size and complexity of the 
project and the degree of local consensus, the process to reach a grant 
award can take on average two to four years, with the pace primarily 
depending on actions by the local project sponsor. Adding to the 
challenge, since 2013 the number of projects seeking funding has 
increased 112 percent, from 25 to 53. These projects have also 
increased in cost as well, with 31 percent of New Starts and Core 
Capacity projects currently in the program requesting more than $1 
billion in CIG funding.
Successes
    I have heard concerns expressed about FTA's current approach toward 
the CIG program. Some say FTA has slowed the number of signed 
construction grant agreements compared to previous Administrations.
    That, however, is not true. During the first two years of this 
Administration FTA advanced more CIG projects than the previous 
Administration's first two years in office--an apt comparison given 
that every new Administration faces a transition period.
    During the first two years of this Administration--beginning 
January 21, 2017 through the end of 2018--FTA signed 13 CIG 
construction grant agreements totaling $3.3 billion in funding. In the 
same period during the previous Administration--January 21, 2009 
through the end of 2010--10 construction grant agreements were signed 
totaling $1.08 billion in funding.
    We are continuing to process projects through the CIG program in 
accordance with the law and Congressional intent.
    In 2017, the FTA executed three construction grant agreements: the 
Caltrain commuter rail electrification project in San Francisco, the 
Maryland Purple Line light rail project and the Ft. Lauderdale Wave 
Streetcar (although, ultimately, the Wave Streetcar project was 
cancelled by the local sponsor and withdrawn from the CIG program).
    In 2018, FTA executed ten construction grant agreements, including 
eight Small Start agreements: for the Laker Line bus rapid transit 
(BRT) system in Grand Rapids; the Jacksonville First Coast Flyer BRT; 
the SMART Regional Rail in San Rafael, California; the Prospect MAX BRT 
in Kansas City; the Everett Swift BRT line and the Tacoma Link light 
rail extension in Washington State; the IndyGo Red Line BRT in 
Indianapolis; and the Albuquerque Rapid Transit BRT in New Mexico.
    We ended the year by signing two Full Funding Grant Agreements: for 
the Santa Ana Streetcar in Orange County, California, and the Lynnwood 
Link light rail in Seattle. The Lynnwood Link Full Funding Grant 
Agreement was one of the agency's largest in recent history, and 
included the most funding during my FTA tenure, providing $1.17 billion 
dollars to Sound Transit to help expand its light rail system. In 
addition, the project received a $658 million USDOT Build America 
Bureau Transportation Infrastructure Finance and Innovation Act (TIFIA) 
loan.
    Lynnwood Link provides a good comparison to the previous 
Administration as well. From the time FTA received a complete 
information package from the project sponsor, it took FTA 133 days to 
complete the statutorily required evaluations and reviews to execute 
the Lynnwood Link grant award. That is the same amount of time the 
previous Administration took to complete the Los Angeles Westside 
Section 2 subway grant award. Both were large, complicated projects 
submitted by experienced project sponsors seeking CIG funding and TIFIA 
loans concurrently.
    In 2019, we executed a construction grant agreement for the 
Minneapolis Orange Line BRT project, and a Full Funding Grant Agreement 
for Dallas Area Rapid Transit's Core Capacity project.
    Overall, since this Administration began through the end of June, 
FTA has executed 15 CIG grant agreements--for five New Starts and Core 
Capacity projects and 10 Small Starts projects throughout the nation 
totaling approximately $3.5 billion dollars in transit infrastructure 
investment.
    That investment has continued this year, and FTA now has committed 
approximately $7.6 billion toward 25 new projects. To detail just this 
year's investment, in 2019, FTA has allocated funding for the following 
new projects:
      Phoenix, AZ South Central light rail extension ($100 
million)
      Jacksonville, FL Southwest Corridor BRT ($16.6 million)
      Reno, NV Virginia Street BRT Extension ($40.4 million)
      Albany, NY River Corridor BRT ($26.9 million)
      Portland, OR Division Transit BRT ($87.4 million)
      Seattle, WA Federal Way light rail extension ($100 
million)
      Spokane, WA Central City Line BRT ($53.4 million)
      San Francisco, CA Transbay Corridor ($300 million)
      Los Angeles County, CA Westside Subway Section 3 ($100 
million)

    In addition to providing funding, FTA continues to work with 
project sponsors through the CIG process. For example, FTA has moved 18 
projects into the first phase of the CIG program, the Project 
Development phase, during this Administration (1/21/17 through 6/30/
2019); and advanced seven projects into the Engineering phase, 
including New York's Canarsie power improvements project, Durham, NC 
light rail, Los Angeles Westside Subway Section 3, Phoenix South 
Central light rail, Seattle's Lynnwood Link light rail, San Francisco 
Bay Area's Transbay Corridor subway project and the Dallas platform 
extensions project that we advanced to a Full Funding Grant Agreement. 
FTA also approved 22 letters of no prejudice, which allow projects to 
proceed with initial construction activities using non-federal funds 
while retaining eligibility for future reimbursement should a CIG grant 
be awarded.
    It is important to note that the President's FY 2020 budget request 
supports the CIG Program. The FY 2020 budget proposal contains $1.5 
billion dollars in funding for the CIG Program, including $500 million 
for potential new Capital Investment Grant projects that may become 
ready for funding during FY 2020, including Expedited Project Delivery 
(EPD) projects. In addition, the FY 2020 request includes $500 million 
in Transit Infrastructure Grants that would reinvest in existing 
transit assets, including fixed-guideway and buses and related 
equipment. This new funding would come from the General Fund, which 
competes across the entire government for funding. It also balances the 
need to expand with the importance of maintaining current systems in a 
state of good repair and modernizing bus fleets and facilities.
    FTA also made significant progress in implementing the EPD pilot 
program. The program encourages collaboration between public and 
private entities to leverage federal expenditures on major transit 
infrastructure projects. The law limits the total federal contribution 
to 25 percent or less of the total project cost. With the federal 
government contribution maxed at 25 percent, the law indicates FTA must 
perform expedited reviews of project justification and local financial 
commitment and accelerate grant award decisions.
    The law allows the award of up to eight grant agreements, and FTA 
received expressions of interest from four agencies representing seven 
projects. We are moving forward with discussions with the Santa Clara 
Valley Transportation Authority in San Jose for the BART Silicon Valley 
Phase II subway project. We are also continuing to work with the other 
project sponsors as their projects may become ready for an agreement 
under the program.
    A total of $125 million dollars has been appropriated for the EPD 
Program in fiscal years 2019 and prior.
Challenges
    FTA is moving projects through the CIG program in accordance with 
the statutory requirements. The timing of construction grant awards 
depends heavily on project sponsors completing necessary work to meet 
those statutory requirements. The anticipated schedule for signing 
construction grant agreements can, and often does, change as project 
sponsors work to complete the myriad of requirements in law, 
regulation, and guidance for receipt of CIG funds.
    In short, FTA does not sign construction grant agreements 
committing millions or billions of federal dollars until we have 
assurance from the project sponsor that all non-CIG funding is 
committed, all critical third-party agreements are complete, and the 
project's cost, scope, and schedule are considered firm and final.
    Frequently, we see proposed CIG projects delayed by challenges at 
the local level. Those challenges might include a lack of local 
consensus on project scope such as disputes over the location of 
proposed stations or alignments, or whether lines will run above or 
below ground--decisions that have huge budget implications and can 
often lead to litigation. For example, the Fort Lauderdale Wave 
Streetcar and the Durham, NC light rail projects were withdrawn due to 
challenges at the local level. The Maryland Purple Line construction 
grant award was delayed for a year by a series of court actions taken 
by local project opponents.
    Another complicating factor is whether the project sponsor can 
secure all needed non-CIG funding, whether from other federal, state, 
local, or private sources.
    Delays can also occur as part of the project sponsor's procurement 
process or when a project sponsor changes its approach to construction.
    This is a complicated process that relies on a number of actions 
and approvals at the local level and, as such, it is important to note 
that schedules for large capital projects can--and do--shift.
Program Policies
    The CIG program fosters highly successful federal-local 
partnerships that positively impact millions of Americans across the 
country.
    Last summer, in an effort to be transparent, FTA issued a Dear 
Colleague letter to remind project sponsors about the policies 
underpinning the CIG program and the rationale behind funding 
decisions. The letter emphasized the need for a firm local financial 
commitment and project readiness before a construction grant agreement 
could be awarded and recommended a balanced approach of local and state 
funding alongside federal grants and loans. We also reminded project 
sponsors that innovative approaches, including value capture, private 
contributions and public-private partnerships, could help them meet the 
matching funds requirements.
    Although FTA has never required project sponsors to seek a lower 
CIG share, we have over the years, across multiple administrations, 
encouraged project sponsors to consider a more balanced local share to 
better leverage federal dollars to invest in additional projects 
throughout the nation. The statute requires that FTA consider the 
extent to which the project has a local financial commitment that 
exceeds the required non-government share of the cost of the project.
    In short, we want to ensure projects that are funded with taxpayer 
dollars are sound investments completed on time and within budget.
    Also last summer, FTA updated the procedures it uses to review 
capital cost estimates. The law requires FTA to consider both project 
readiness and associated risk in evaluating projects for funding 
through the CIG program. The agency's diligence in administering the 
program helps ensure that federal funds allocated to projects will be 
protected from the risks of cost overruns and schedule delays that CIG 
projects have often experienced.
    Undertaking an analysis of project risk earlier in the process 
permits FTA and project sponsors to identify strategies to mitigate and 
reduce potential cost increases, ensuring that cost projections are 
realistic, the public knows what they are supporting, and that taxpayer 
dollars are spent wisely. The public, our shared constituents, expects 
us to deliver projects on time and within budget. Effective analysis 
and the mitigation of risk earlier in the CIG process, before FTA locks 
in the CIG contribution, provides the best way, short of a guarantee, 
to meet our public obligation.
    Simply put, it's good governance.
    Identifying risk earlier in the process also benefits project 
sponsors because it requires them to develop more realistic financial 
plans to pay for a project or identify changes to the design or project 
management to save costs when there is still time to implement such 
changes.
    FTA intends to continue to evaluate each CIG project on its 
individual merits, consistent with the discretion afforded by law. FTA 
regularly engages with stakeholders in local communities, across the 
transit industry, and with our Congressional colleagues on the CIG 
program.
Conclusion
    In conclusion, FTA will continue to process projects through the 
Capital Investment Grants program in accordance with the law. We remain 
committed to our mission to improve public transportation for America's 
communities. I look forward to working with this Committee and each of 
you. I'm happy to answer any questions you may have.

    Ms. Norton. Acting Administrator Williams, I listened 
closely to your testimony. I am used to Congress slowing things 
up, we do it all the time. It takes three branches and even 
this branch, as we have recently seen, takes a long time with 
things that matter.
    I noted that you seemed--in fact you did blame all the 
project delays on the local level and you didn't offer a single 
example of delays by the Department of Transportation. Now, the 
data shows that approved times, times at your levels, have 
doubled.
    Why should we conclude that the delays are solely the fault 
of transit agencies. And look, Administrator Williams, I am 
willing to accept for the agencies, for the localities, faults 
on their side. But we are not getting anywhere unless everybody 
accepts responsibility.
    Now we have figures showing delays and I want to know why 
you won't take responsibility for those delays and then 
indicate what you think you can do about them.
    Ms. Williams. Thank you, Madam Chair.
    First of all, let me talk a little bit about the data. The 
data compares the last 2 years of the Obama administration with 
the first 2 years of the Trump administration and I would argue 
that the first 2 years of a first-term administration looks 
very different than the last 2 years of a second term.
    Ms. Norton. All right, given that, what are you going to do 
about it, Ms. Williams, even if one accepts that notion. That 
is the first time I have ever heard that kind of comparison 
made.
    We are really interested on behalf of these local agencies 
in remedies. What are you going to do about them?
    Ms. Williams. I think our record speaks for itself. We were 
able to bring 15 construction grant agreements across the 
finish line in just the first 2 years. When you compare that to 
the first 2 years of the previous administration, that is two 
more and $2 billion more in investment. We have 10 more 
allocations that have been made. In our administration, when we 
make an allocation, it is our signal that we are looking to 
bring that over the finish line as well, that project.
    Ms. Norton. So you think you are going to be able to equal 
the last administration----
    Ms. Williams. Part of it is dictated----
    Ms. Norton. Yeah, but you are comparing yourself to that 
administration.
    Ms. Williams. Part of it, I will tell you--and we have 
talked about this across administrations--we are also only 
allowed to deal with what comes to us. So I am constrained, 
just like all administrations have been, with what is in the 
pipeline and what is ready and----
    Ms. Norton. Well, let's talk about that. CIG projects 
seeking funding have increased. The figures I have been given 
is 112 percent from 25 to 53 projects. So people are coming 
in----
    Ms. Williams. Uh-huh.
    Ms. Norton [continuing]. Fast and furious, massive demand 
for new transit projects. And that is across the Nation.
    Now your testimony is that for the fiscal year 2020 budget, 
the administration is seeking $1.5 billion for CIG projects, 
which is a 40-percent cut. Sadly, of course, that is better 
than the draconian Trump administration request.
    If the need for CIG projects is increasing, why is the 
administration proposing cuts in the program?
    Ms. Williams. We believe the $1.5 billion figure is what we 
will need for fiscal year 2020. We believe that is what will be 
ready, the $500 million will cover projects that we believe now 
will be ready for funding in fiscal year 2020. And that is an 
estimate because some things are borne out at the local level 
that are unanticipated. If you look at the Durham project in 
North Carolina, no one anticipated that project having a third 
party----
    Ms. Norton. Well, if some project falls out, given the 
demand, there would be other projects ready to step up.
    Administrator Williams, our concern is that we are not even 
trying to meet the demand and I am afraid your testimony 
doesn't help us to believe that you will be able to accelerate 
that demand.
    I am going to ask the ranking member if he would offer his 
questions.
    Mr. Davis. Thank you, Madam Chair. And again, Acting 
Administrator Williams, thanks for being here.
    You and I have had opportunity to speak on numerous 
occasions and I believe you are doing everything in your power 
to ensure that the FTA executes the CIG program that is 
consistent with the laws that we make here, and sometimes may 
bind you with.
    That may be a question you might want to answer, you know, 
what are we doing here in this institution, this branch, that 
makes it more difficult for you to implement programs like CIG?
    Ms. Williams. I think it is a blend of doing things fast 
and doing things right. You are talking about billions of 
dollars of Federal investment and so, as much as we absolutely 
want to streamline projects, we have to make sure that they are 
done correctly as well. And so it is a topic that I am sure we 
will work with the committee as we look at reauthorizing the 
FAST Act of ways that maybe we could streamline the CIG 
program. I would be happy to work with you, Congressman.
    Mr. Davis. We appreciate that, Acting Administrator. And, 
you know, we want that. That is why you are here today. We want 
to come together and have a bipartisan highway reauthorization 
and transit reauthorization, and we are going to need your 
help.
    You know, as I mentioned earlier, my district is less 
urban. And we have seen ridership even in some of the most 
urban areas in the country, it seems to go down. I think our 
goal should be how do we put policies in place here at this 
committee that are going to encourage more public 
transportation ridership, not just in those urban areas where 
it is even falling, but in the smaller communities that I 
serve. And with that being said, you mentioned it is pretty 
complex to deal with billions of dollars in a program, and I 
get that, I understand that.
    What can I do and what can we do at this committee to help 
communities in smaller rural areas that I have mentioned, how 
can they take advantage of programs like the CIG? You visited 
my district before, you have seen the small rural transit 
districts I serve. I reached out to them. None of them have 
participated in this program, but they are interested. They may 
have opportunities in the future. How do we give them those 
opportunities?
    Ms. Williams. I think, Congressman, it is an interesting 
question, because really the CIG program, we have no rural 
projects. I think there has been one done in the entire 
history, out in Colorado, a bus rapid transit project. It 
really doesn't allow for a rural project to enter, even small 
urban projects have a difficulty really being able to compete 
and being able to meet all the requirements in law.
    So I would be happy to look at that with you more and see 
how we could make it more amenable to smaller rural areas in 
our country.
    Mr. Davis. That would be great. I am certainly hoping that 
with Colorado being the lone project, that maybe Illinois' 13th 
Congressional District a couple of years from now might be 
another one. Let's work together to ensure that we address 
these issues.
    You know, you are going to talk about some of the issues 
with CIG and you mentioned in your response to Chairman 
DeFazio's PowerPoint, you know, about what this administration 
has done over the last 2 years.
    I do want to make a point that you made earlier. It is 
imperative that we look at the last 2 years of the last 
administration and look at what we project the next 2 years to 
be. You know, the goal of this committee has and always will be 
to put good policies in place without letting partisanship get 
in the way. And that is why I commend Chairman DeFazio and also 
Chairlady Norton for allowing us this opportunity to come 
together.
    Is there anything, with the time that I have left, that you 
haven't had a chance to mention in your short time up there, 
that you may want to get across to the committee and to the 
folks that are watching today, that may be helpful as to why 
the CIG program is so important and also why it is important to 
your administration?
    Ms. Williams. I think clearly we put $15 billion into 
transit this year. Clearly that shows our willingness to 
support transit and the Capital Investment Grant program. 
Although we may disagree on the amount of money in the fiscal 
year 2020 budget, it is a change, in that it is not a zero 
there, it is $500 million. I think that speaks to the fact that 
we believe that is what the number is.
    We are constrained by what comes to us and what is ready to 
be funded. And we believe that is the correct number. So I am 
happy to talk more with Members and have those conversations 
and we are happy to work with the committee as we have been.
    Mr. Davis. Thank you again, Administrator. And just so you 
know, I am thankful as a resident of Illinois for the 
investment CIG has made in the Chicagoland area, because 
Chicagoland transit has a tremendous impact on downstate 
transit and the rest of our State too. So thank you for that 
investment there too.
    And with that, I will yield back, Madam Chair.
    Ms. Williams. I had an opportunity to visit Chicago and 
they have a great system. Thank you.
    Ms. Norton. I appreciate your response, the response to the 
ranking member, that you would be willing to work with the 
committee and you compared the last 2 years of one 
administration with the first 2 years of another.
    So if we see any improvement, I think we would be very 
pleased. So if you would give us on a quarterly basis the 
number of projects that have been approved, that would be very 
helpful.
    Ms. Williams. Absolutely. We would be happy to, Chairwoman 
Norton.
    Ms. Norton. Thank you very much.
    Chairman DeFazio.
    Mr. DeFazio. Thanks, Madam Chair.
    I have got to say I find it nonsensical to say well, it is 
the first 2 years of this administration and of course things--
first off, the first budget proposed killing the program 
altogether. I don't think we have recovered from that and I 
believe that Mr. Mulvaney and his new hench person over at OMB 
are still hostile to transit. And I assume that that pressure 
and that attitude filters down.
    And it was a very broad bipartisan consensus of the 
Congress that said no, hell no, and pushed back. But now we 
have got other issues.
    One would be the changes in the risk assessment process 
that are incurring additional costs. Where did that idea 
originate?
    Ms. Williams. Actually, the risk assessment process from 
2006 until 2016 was at the probability 65 level. It was 
changed--I am sorry, at the probability 65 level and it was 
changed to probability 50 at that time by FTA. And neither time 
was it sent out for notice and comment.
    And I want to clear up. I think there is some confusion as 
to what we use that for. It is an internal tool that FTA uses 
to measure the risk in the project. So it is not adding cost to 
the project. So, you know, it's your budget and your cost. So 
if the budget says the project is going to cost $100 million 
and yet, you know, you cost it out at only $75 million, you 
need to add $25 million to the project or you need to make the 
budget and the cost meet.
    So it is not about adding additional cost to projects or 
increasing those----
    Mr. DeFazio. But it requires them to maintain a larger 
contingency fund, irregardless of the merits of the project or 
the viability of the agency or anything else. It is an 
arbitrary thing and it does require them to set aside more 
contingency funds; correct?
    Ms. Williams. It requires them to predict more accurately 
the actual cost of their project and we believe that that is 
good governance and that that is what the taxpayer deserves to 
know, that they have a better than 50/50 chance of the project 
coming in on time and on budget.
    And like I said, this was a tool used for many years 
internally by FTA and was just changed for the last 2 years 
from 2016 to 2018 when we reverted back, seeing project costs 
is coming in much higher than what was predicted. And we felt 
that it was necessary to go back to that probability 65.
    Mr. DeFazio. OK. Then have you or any member of your staff 
ever strongly implied--and we have heard this repeatedly, 
repeatedly, repeatedly from transit agencies--they won't say 
that we have to come in under 40 percent, they just say we have 
never approved a project that wasn't below 40 percent. And so, 
I mean, if that is not the case, I would like you to say it 
now, that you are willing to look at and approve projects at 
above 40 percent. Because we have just heard this so many times 
that that is the word in the transit community, even though the 
law prohibits that, even though the law sets a much higher 
threshold, that the agency is saying no, this is policy, as set 
informally by the administration.
    Ms. Williams. So this is an approach used by both the Bush 
administration and the Obama administration and we believe that 
the best chance of success for a project is when it is a blend 
of local, State and private----
    Mr. DeFazio. I have got that, but Congress says 51 and your 
agency is telling people you have to be under 40. Will you say 
here that there is no informal policy, that you will be totally 
open to looking at projects that come in over 40 percent and 
they would have as good a chance of approval as anything else, 
given their merits. Yes or no?
    Ms. Williams. In fact, Chairman----
    Mr. DeFazio. Yes or no.
    Ms. Williams [continuing]. We just moved the BART project 
in San Francisco into engineering at a 43-percent share. And so 
yes, many of our mega projects----
    Mr. DeFazio. Not a New Start.
    Ms. Williams. It is a Core Capacity project, but it is a 
large contribution on----
    Mr. DeFazio. Why do the agencies across the country have 
this impression and why are they all coming in under 40 
percent?
    Ms. Williams. Historically, most of our large projects have 
come in under 40 percent but that is no different than many of 
the large projects in past administrations. When you----
    Mr. DeFazio. But I never heard before from the transit 
agencies that they were being bullied to come in under 40 
percent.
    Ms. Williams. I am not aware of anybody bullying----
    Mr. DeFazio. OK, so you are willing to look at projects and 
approve projects over 40 percent.
    Ms. Williams. We always look at every project and----
    Mr. DeFazio. Are you willing to look at and approve 
projects over 40 percent----
    Ms. Williams. Yes, Chairman----
    Mr. DeFazio [continuing]. Up to the statutory cap?
    Ms. Williams. Yes, Chairman, absolutely.
    Mr. DeFazio. Would you answer the question?
    Ms. Williams. Yes.
    Ms. Norton. She says yes.
    Mr. DeFazio. Thank you.
    Ms. Norton. Thank you.
    Mr. Webster.
    Mr. Webster. Madam Chair.
    How can automated vehicles improve efficiency and cost?
    Ms. Williams. So automation in transit, I think where we 
will see it first is in maintenance cost improvements for 
transit agencies, such as parking buses closer together in the 
urban centers, being able to automate buses through bus washes 
and the like. I think we are still a ways off before we see 
automation in actual buses itself.
    Mr. Webster. So what percentage do you think it is right 
now?
    Ms. Williams. That is difficult to predict, sir. It is 
still a fair amount of years off I believe.
    Mr. Webster. I have kind of a personal question.
    Ms. Williams. Yes.
    Mr. Webster. In 2014, the silver line began in DC transit 
and they had new cars, 7000 series. I just wondered if you 
could do anything about the improper message that has been on 
there for 5 years. When the doors open to allow people on, it 
says ``doors open.'' When the doors close, it says ``stand 
back, doors opening.'' And I think this is a safety issue. It 
is just you are the first person to come along that I have been 
able to say anything to about it.
    Ms. Williams. Let me understand. So when the doors are 
closing, it says the doors are opening?
    Mr. Webster. Yes.
    Ms. Williams. I will take care of that today, sir. I was 
not aware. In fact, I rode a 7000 series car here on the green 
line, switched at L'Enfant, and I didn't notice that recording.
    Mr. Webster. I don't think anybody else has either, but it 
is there.
    Ms. Williams. I have a great relationship with the general 
manager Paul Wiedefeld. I will give him a call this afternoon 
after our hearing.
    Mr. Webster. Awesome.
    Ms. Williams. Thank you, sir.
    Mr. Webster. I yield back.
    Ms. Norton. I thank the Member for that keen observation.
    Mr. Johnson of Georgia.
    Mr. Johnson of Georgia. Thank you, Madam Chair, for hosting 
this hearing today and thank you, Madam Williams for appearing 
today.
    It is a fact that the Trump administration has taken steps 
to roll back the environmental review process for Federal 
infrastructure projects.
    Can you explain whether or not you have any concern that 
your agency may be approving projects improperly vetted for 
their potential environmental threat to new bioeco systems in 
communities?
    Ms. Williams. No, sir, I don't have a concern about that. 
In the CIG program in particular----
    Mr. Johnson of Georgia. And you do admit that the 
environmental review process has been rolled back; correct?
    Ms. Williams. I am here to speak as the Acting 
Administrator of FTA. All I can speak to is what we do in the 
CIG program. And I can tell you that NEPA, we follow NEPA very 
closely. And that is done early on in the CIG process. And so 
we take that very seriously, sir.
    Mr. Johnson of Georgia. Uh-huh. You are not really 
concerned about the environmental impacts that may have been 
improperly assessed due to the cutback in the review process.
    Ms. Williams. In fact, in the CIG program, we base our 
decisions on project justification and finance ratings. And in 
the project justification is environmental benefits and that is 
one of the categories we look very--you know, we look at to 
make sure that when we rate a project, it is properly rated. So 
it is definitely a consideration in our CIG program.
    Mr. Johnson of Georgia. Can you explain how the rollbacks 
in the environmental review process are compatible with the 
FTA's requirements for the project development phase of their 
grant approval process?
    Ms. Williams. I am not sure I understand the question, sir. 
We haven't rolled back any environmental review processes for 
CIG projects in FTA.
    Mr. Johnson of Georgia. All right, fair enough. Thank you.
    I yield back.
    Ms. Williams. You are welcome.
    Ms. Norton. Thank you very much.
    Mr. Woodall.
    Mr. Woodall. Thank you, Madam Chair. Thank you, Madam 
Administrator for being here.
    Could we put the slides back up that the chairman had up to 
begin with? I wanted to look at the cost share shrinking in 
particular. My friend, Mr. Mulvaney, was invoked there. We 
worked on a lot of budget cutting that is going on while he was 
on Capitol Hill.
    [Slide.]
    Madam Administrator, when we see the cost share shrink from 
the pre-2017 to the post-2017 levels, so that is just over 10 
percent, how much of that money is going back to the taxpayer 
for deficit reduction?
    Ms. Williams. None.
    Mr. Woodall. None? You are saying that we are reducing the 
amount of money we are sending to an individual project and the 
taxpayer is not benefitting from that at all? Where in the 
world is that money going?
    Ms. Williams. Well, that is actually staying in the CIG 
program to make sure that we have other projects that we can 
fund. So actually, it is allowing us to fund additional 
projects across the country.
    Mr. Woodall. You are saying that when the chairwoman noted 
that applications to this fund had more than doubled, you have 
been able to fund more projects than you would have otherwise 
been able to fund, by reducing the Federal cost share?
    Ms. Williams. Right. So they have doubled in number and 
also in size. We have more projects coming in asking for more 
funding, so they are larger projects as well.
    Mr. Woodall. Well, I am going to have to talk to my friend, 
Mr. Mulvaney, about why the taxpayer isn't getting--it sounds 
like what you are doing is you are trying to take a program 
that has been oversubscribed and underfunded and participate 
with as many different projects across the country as you can. 
Am I understanding the goal correctly?
    Ms. Williams. Yes, you are.
    Mr. Woodall. Well, I hope you won't let that goal 
disappear. We do have to find ways, and coming from a community 
that does a lot of self-starting--we just passed $1 billion 
locally in new transportation taxes--I don't want to see all 
the giant projects in the country suck up all the funding 
stream. I don't want to see the big guys who are used to 
accessing a program like this suck up all the funding stream. I 
appreciate that effort to try to move more money to more 
projects.
    Let me go back to something else the chairman said about 
the risk assessment, because my constituents don't mind 
investing money in transformational projects. They mind 
throwing money down a rat hole towards failures. When we moved 
from a probability 65 standard down to a probability 50 
standard, meaning the odds of success of coming in on budget or 
under budget diminished dramatically, what did we see? Did it 
not make a material difference to the success of projects 
across the country when the standard fell from P-65 to P-50?
    Ms. Williams. It absolutely did. And actually the reason we 
then considered it is it came to me from our career 
professional staff who said, you know, we are seeing project 
bids come in much higher. Given the really booming economy we 
are having, the tightening of the labor market, we are seeing, 
you know, project bids come in much higher and projects like 
the Wave streetcar was the very first project I approved as the 
Acting Administrator, in Florida, was not actually able to 
absorb that cost increase and was not able to move forward. It 
really caused us to take a step back and really look at all the 
projects. And that was one of the earlier delays. I felt that 
it was really important to understand what happened in that 
project, so that we didn't have another project that we 
approved that that happened to.
    Mr. Woodall. I know we fund CIG out of the general fund. I 
hope this committee will have a conversation about finding a 
permanent funding stream for mass transit generally. It is an 
interest we all share, and to have to pick up the crumbs off 
the table is not the right way to fund a major national 
infrastructure program like this.
    But for you to make those changes, again returning to what 
had a better success rate during the Obama administration and 
the Bush administration in terms of a P-65 standard, for you to 
try to squeeze more projects into your limited budget stream, 
even though it produces charts like this one, to give more 
communities an opportunity to benefit, I just want you to know 
how much I appreciate that. I think our job is not to tell you 
what a great job you are doing, it is to hold you accountable 
when you are not doing a great job.
    But on these two fronts in particular, I am grateful for 
your efforts. I know it has not been easy and know how much it 
is valued.
    Madam Chair, I yield back.
    Ms. Williams. Thank you, sir.
    Mr. Woodall. Oh, Madam Chair, could I--if there is any 
other information on these charts that you didn't get a chance 
to talk about, feel free to submit that in writing. I know 
charts can sometimes be misleading and I want to make sure we 
have the very best information.
    Ms. Williams. We will do so. Thank you, sir.
    Mr. Woodall. Thank you for your indulgence, Madam Chair.
    Ms. Norton. Certainly.
    There doesn't seem to be any problem with more projects 
being funded. That really has not been the problem. The problem 
is that there are funds not being used and jurisdictions 
waiting to be funded.
    Mr. Malinowski, please.
    Mr. Malinowski. Thank you, Madam Chair.
    Madam Williams, I wanted to ask you about a specific 
project that is existentially important to my State and frankly 
the economy of the Northeast, the Portal North Bridge project.
    For those who don't know, this is a 110-year-old railroad 
bridge, it is a swing bridge that swings open when boats pass 
and when it swings back, it is so rickety that sometimes a guy 
needs to go out there with a sledge hammer to lock it back into 
place. This is not a partisan issue in my part of the country, 
everyone understands this needs to be replaced.
    Congress has provided the funding to fund the Federal part 
of the project and yet you have given it a medium-low rating 
because you have decided that local funds were not committed. 
Would you briefly define for us what you consider to be 
committed funding from the local partner?
    Ms. Williams. Absolutely, sir.
    Committed means nothing else has to occur to have access to 
that funding. And so in New Jersey, I think there has been 
somewhat of a miscommunication in that many people feel that we 
are saying they have to sell the bonds. That is not what we are 
asking. What we are asking is that the funds need to be 
committed, which means New Jersey Transit has to have access to 
those funds today. Today, they do not. And in fact, they 
brought this to our attention through the CIG process, that 
there were requirements in New Jersey State law that they 
needed to meet in order to have access to those funds. And they 
are making progress, I believe there was a New York DOT signoff 
that they had to receive by the end of June, which I understand 
they have received. New Jersey Transit has to have it approved 
by their board, and this is to be funded in their State 
transportation plan.
    And so, once they have that done, I believe it comes to FTA 
and FHWA, our Federal Highway Administration. And once they 
have those steps completed, then that way, I believe they will 
be considered committed. And then they can resubmit an 
application for an additional rating, which I am sure they will 
do in the fall.
    Mr. Malinowski. OK, well, that is helpful. I just want to 
hone in on this precisely.
    As you know, the State of New Jersey has agreed to fund up 
to $600 million of this project through a bond issue that will 
be securely backed by our gas tax, there is another $200 
million that has been committed. So you are not saying the bond 
has to actually have been issued?
    Ms. Williams. No, I am not.
    Mr. Malinowski. OK.
    So this definition of having access to funds, because there 
are a number of other projects, as I think you know, around the 
country, that have received the medium rating where bonds have 
not been issued.
    Ms. Williams. Right.
    Mr. Malinowski. The Durham Light Rail project, the Phoenix 
South Central Light Rail extension which is supposed to be 
backed by a sales tax that has to be approved by the voters and 
a referendum hasn't been held.
    Why is that receiving a medium rating, given how secure the 
commitment in New Jersey is, and here you have a project that 
needs to be approved by the voters and has not yet been?
    Ms. Williams. What I can tell you is that everybody has to 
comply with the same requirements. So, my technical team, which 
are career professionals that have worked with these project 
sponsors for years many times, have looked at each of those 
projects and it doesn't mean that they have to sell the bonds, 
it means that they have to comply with their own laws. And so 
in individual cases, I am happy to get back to you for the 
record, but my understanding is that they were able to meet the 
requirement to have access to the funding in the project. And 
so it must be something that is inconsequential to the State 
income tax that hasn't been passed.
    Mr. Malinowski. OK, that is helpful and we would appreciate 
following up with you----
    Ms. Williams. Absolutely, happy to do that.
    Mr. Malinowski [continuing]. On differences and 
similarities, because we need to understand there is a common 
standard.
    Ms. Williams. Yes.
    Mr. Malinowski. Let me ask you about another project which 
I am sure you have heard about, and that is the Hudson River 
Tunnel. Right now, one of the major holdups there is a lack of 
a record of decision for the environmental impact statement. 
That statement was completed and submitted to you in frankly a 
record period of time, 14 months, given to the Department in 
June of 2017 with an estimated completion of March 30th, 2018. 
This was what the Department told us. It has been more than 15 
months since that original completion, predicted completion 
date.
    FRA Administrator Batory testified before us last year that 
the EIS would be completed in the first or second quarter this 
year. This hasn't happened.
    Madam Williams, where is the environmental impact statement 
and why has it taken so long?
    Ms. Williams. Well, what I can tell you is the Federal 
Railroad Administration is the lead on the EIS for the Hudson 
Tunnel, we are a cooperating agency. And we are working 
diligently to complete that. I know Mr. Batory was up on the 
Hill just a few weeks ago and stated that there were still some 
steps that needed to be completed. It is a very complex project 
and so it is taking a bit longer to get finished.
    And so I would say to you that that is really in FRA's 
court and we are working very closely with them to get that 
done.
    Ms. Norton. Thank you very much. Your time has expired.
    Mr. Katko.
    Mr. Katko. Thank you, Madam Chair, and thank you for being 
here today, Ms. Williams.
    Before I ask a couple of questions about cybersecurity 
amongst others, I do want to make an observation. We are 
Members of Congress, we control the powers of the purse and we 
control what legislation goes to any President. So to the 
extent that there has been observations here that somehow the 
administration may be an impediment to getting something done, 
I would only challenge both sides to think in a bipartisan 
manner. If we produce a good enough highway bill and it is 
bipartisan, it will be veto-proof and we can get what we want. 
We will not get it by partisanship, we will get it by working 
together, all of us of all stripes, to get this done. And there 
is not anything in this country that I can see that needs more 
addressing than infrastructure. And if we don't work together, 
we are going to continue to be in the malaise we are in now. So 
I encourage all of us to put down our swords and work together 
to get infrastructure done once and for all, on the highway 
side at least.
    Now, with respect to cyber, I am ranking member on the 
Committee on Homeland Security's Cybersecurity, Infrastructure 
Protection, and Innovation Subcommittee and have been briefed 
many times about the threat of the Chinese influence in our 
transportation systems, in our cybersecurity systems 
nationwide.
    Congresswoman Rice, my friend from the New York area, and I 
wrote a letter to New York City subway authorities about their 
plan to purchase Chinese-made subway systems. It is a very big 
concern and I think we have established in other hearings 
before this committee and others the influence of Chinese in 
this area and their desire to infect the products that they put 
into the United States, like 5G technology, as well as train 
technology, with spyware, for example, embedded into the 
systems.
    So in that letter to New York City we were trying to note 
the fact that, first of all, the Chinese are trying to do that. 
And second of all, they are undercutting the markets and 
putting a lot of other train manufacturers out of business, 
therefore, by default being the only train supplier around. It 
is a huge problem and something that cannot be ignored and I 
know the Washington metropolitan system is bringing the same 
thing.
    So I would like to know what your office is doing in that 
regard and whether or not providing money for funding of like a 
subway system in San Francisco with additional trains there, 
what are you doing to make sure that we don't have these 
Chinese products coming into the system, and therefore creating 
a greater vulnerability. Because if you think about it, even if 
they provide Wi-Fi, everything that people are using on a Wi-Fi 
system is getting back to them. And the invasion of privacy and 
the national security implications are pretty serious.
    So with that, I would just like to have you talk about 
that.
    Ms. Williams. We, of course, support your concern when it 
comes to cybersecurity in the railcar manufacturing. 
Unfortunately, we have no direct role at FTA to require transit 
agencies to buy a certain product from a certain manufacturer. 
We do make sure, if they use Federal funding, they have to be 
Buy America compliant. But unfortunately, there is no way for 
us to preclude them from purchasing railcars from any 
manufacturer they want, if they are considered Buy America 
compliant, at this time.
    Mr. Katko. So even if they present a potential threat that 
has been established in Congress, has been established in the 
national security agencies, that is the case?
    Ms. Williams. I know that there is language on the Hill now 
to prevent that from occurring and we would certainly be very 
supportive of that.
    Mr. Katko. And what are you referring to?
    Ms. Williams. I believe it was something that Madam Chair 
put into the defense bill, the defense appropriations bill, 
that would preclude those purchases.
    Mr. Katko. So what would you need, that type of language, 
or is there other language that you think would be helpful as 
well?
    Ms. Williams. We can certainly work with the committee if 
you think there is additional language. Maybe there is 
something to look at more longer term in the reauthorization 
bill, but certainly shorter term appropriation bills would be 
appropriate. We are happy to work with you.
    Mr. Katko. Madam Chair, I am happy to work with on on that 
as well. I think it is a very important issue and that we need 
to be mindful of it.
    Also, you talked about ways we could possibly streamline 
the FAST Act and improve what we have been doing. And if we 
really are going to work together to get this done, I would 
very much appreciate any input, and frank input, that you could 
have on what the next generation of the highway bill would look 
like. And if you have any general suggestions right now, I 
would like to hear them.
    Ms. Williams. We would be happy to work with you on that. 
Today, I am really prepared to talk about the Capital 
Investment Grant program, but we are certainly happy to work 
with the committee on reauthorization proposals as we get 
closer to reauthorization.
    Mr. Katko. Thank you very much.
    I yield back.
    Ms. Williams. Thank you.
    Ms. Norton. Thank you very much.
    Mr. Stanton.
    Mr. Stanton. Thank you very much, Madam Chair.
    By the way, I thank you for putting that suggestion in the 
national defense authorization bill as it relates to what the 
gentleman was just speaking about.
    Acting Administrator Williams, I want to thank the FTA for 
its recent commitment of $100 million for the South Central 
Light Rail extension in the city that I used to lead as mayor, 
Phoenix, Arizona. This Federal investment is critical to the 
future of light rail in south Phoenix. It is a project that we 
have long fought for and when completed will connect the 
community to new economic opportunities, jobs, education, 
healthcare, social services, and more. That project has been 
ranked as one of the top projects in the United States of 
America in terms of using public infrastructure to help lift 
people out of poverty.
    Over the past year, the local transit agency in Maricopa 
County, Valley Metro, has been working with the FTA to advance 
a number of critical transit projects--Tempe Streetcar, 
Northwest extension phase 2, and of course South Central that I 
just mentioned.
    The Tempe Streetcar in particular is at a critical stage 
and the pending grant agreement must be approved soon. The 
deadline for this to be finalized by the FTA is September 1st, 
prior to the shutdown of the transit award management system, 
which could occur anywhere from September 20th to October 11th. 
My understanding is the grant needs to be sent to the Hill for 
circulation by September 6th at the very latest. Although 
Valley Metro can complete construction of this project under 
the current Letter of No Prejudice, and while they may be able 
to enter a grant agreement as late as December 15, Valley Metro 
will experience serious cash flow issues as soon as September.
    I understand that all required documentation for approval 
has been submitted by Valley Metro. Can you provide me with 
assurances that this project will receive the necessary 
approvals in time to meet these deadlines?
    Ms. Williams. Absolutely, sir. We have a great working 
relationship with Scott Smith, the GM there. He has done a 
terrific job of bringing that project across the finish line. 
There have been some hiccups with Tempe Streetcar and he has 
managed that very well. As you noted in your earlier remarks, 
we just did a $100 million allocation to a second project in 
our program, the South Central Light Rail project, and we have 
a great working relationship. You have my commitment to get 
that done for him.
    Mr. Stanton. That is great. Phoenix does have a dedicated 
funding source. When I was mayor, we did that dedicated funding 
source, the people of Phoenix overwhelmingly supported a 
transportation infrastructure investment in the local 
community, 35 years, $32 billion. And the first program under 
that election and that source of revenue was the South Central 
Line.
    As some of the witnesses on the second panel have noted in 
their written testimony, there have been concerns about revised 
Federal cost share for CIG projects. It is my understanding you 
have been working with Valley Metro to resolve those concerns 
over a proposed Federal share for several projects in our 
region. I appreciate your continued effort on this front and I 
want to add my support to maintaining the level of Federal 
participation that was anticipated when these projects were 
initially planned. Of course, we don't want to move the goal 
post in the middle of the game.
    Can you provide your thoughts on how FTA will resolve the 
cost sharing issues in keeping with those expectations of the 
local sponsors of these projects?
    Ms. Williams. I think as I mentioned earlier, you know, 
being able to look at value capture--I think the industry as a 
whole tends to think of that as only tax increment financing, 
and we want to broaden that definition to include things like 
land deals, operation and maintenance. We all recognize that 
transit brings value to our Nation's communities but sometimes 
we don't capture that value for transit.
    We sit, at U.S. DOT, at the Navy Yard, it looks a whole lot 
different than it did 30 some years ago when I was first in DC. 
And a lot of that is due to the green line coming in, that 
Metro line coming into that area. And yet, none of that revenue 
was really, and that increase in value, was really borne out to 
the transit agency. And so our commitment is to help the 
transit agency really capture that value that they bring to a 
community because we know communities value transit and we want 
to make sure that they capture that value and invite those 
private investors to the table so that we can have additional 
funding to be able to fund more projects across the entire 
country.
    Mr. Stanton. We need to do more to make the case for 
transit, not just as a way to move people to jobs and education 
and healthcare, but as an economic development tool. In my 
city, in my community, our initial 20-plus-mile line of the 
light rail, did result in $11 billion in public and private 
investment. I would argue that public transportation investment 
is as strong of an economic development tool as almost anything 
else that we can do at the local level and in partnership with 
the Federal Government.
    I yield back. Thank you.
    Ms. Williams. I would agree.
    Ms. Norton. Amen, Mr. Stanton.
    Mr. Babin.
    Dr. Babin. Yes, ma'am, thank you, I appreciate it, Madam 
Chair. And thank you, Administrator Williams, for being here. 
You have a very important job, so thank you for being here with 
us today to discuss the Capital Investment Grant program.
    On one hand, you have a certain group of people concerned 
that the FTA is unable to, or it has even been suggested 
unwilling, to approve grant applications in an appropriate 
manner or timeframe, given the number of factors under your 
administrative authority. And on the other hand, we know that 
there are dozens of bureaucratic hoops that you have to jump 
through in order to approve a grant application, which is 
slowing this already arduous process down.
    So, how can we help you along in this process and how can 
this committee untie your hands in order to lessen the onerous 
regulations and expedite a CIG grant approval process in a 
timely manner?
    Ms. Williams. You know, I think that the CIG program has 
evolved over many years. I am proud of the progress that we 
have made under the Trump administration and Secretary Chao's 
leadership to advance 25 projects through the program. That 
totals $7.6 billion in funding. I know some have talked about 
the concern of geographic diversity of the 15 that we have 
signed construction grant agreements with. Six of them have 
been in just two States.
    So let me assure you though that geographic diversity is a 
consideration, but it is certainly not a barrier. You know, I 
think we are making progress. I know that when the 
administration did not request additional funding early on in 
the first two budgets, it was alluded to that projects were 
canceled. Let me assure you, there was not one project canceled 
in the CIG program. We actually funded 3 projects in 2017, 10 
in 2018 and we have funded 2 in 2019. So I want to make sure 
that there is no impression of when we actually requested zero 
funding for the CIG program in the first 2 years of the 
administration, that no projects, no new projects, were done. 
That is simply not the case. And so we are making progress.
    And we would love to talk to you more as we get closer on 
the reauthorization topic on how we could maybe streamline the 
CIG process a little further.
    Dr. Babin. Excellent, thank you.
    And then to follow up here, there has been a good deal of 
conversation surrounding your Dear Colleague letter from last 
year regarding the FTA's advancement of projects through the 
CIG program.
    Do you believe that any of the policies in that letter 
actually violate Federal law?
    Ms. Williams. I do not. In fact, many of those policies are 
long-held policies across multiple administrations. Both the 
Bush administration and Obama administration held those 
policies as internal decisionmaking tools.
    Dr. Babin. OK. And any claims to the contrary to that seem 
to be incorrect, in my opinion, because I cannot see that.
    But what was your reason behind sending the Dear Colleague 
letter in the first place?
    Ms. Williams. Actually, it was our attempt to be 
transparent as we were making discretionary decisions about 
grants. And so it was our way of communicating that to the 
industry of what we were looking for. We thought it was just a 
recharacterization of what was used for a long time and it 
would not be surprising to anyone. We saw differently, that 
that was not the impact we had really expected.
    Dr. Babin. Thank you, Administrator.
    I yield back, Madam Chair.
    Ms. Norton. Thank you very much.
    And I want to reinforce Mr. Babin's notion that this 
committee stands ready to help. While I have been critical of 
you, anything the committee can do to hasten these projects 
with this huge backlog desiring funding, please let us know. 
And thank you for that suggestion, Mr. Babin.
    Mr. Allred.
    Mr. Allred. Thank you, Madam Chair. And I want to welcome 
you, Administrator Williams, thank you for being here today.
    Last month, I was very pleased to hear of your agency's 
announcement of a $60 million grant agreement with the Dallas 
Area Rapid Transit, or DART, which serves my district in the 
Dallas-Fort Worth area. The grant will help the project to 
lengthen platforms at 28 stations along the existing red and 
blue light rail lines, many of which are in my district.
    I would also like to thank you for your recent visit to 
north Texas, which I am sure highlighted how important transit 
is for our region. We are one of the most rapidly growing 
places in the country and our economic growth and population 
growth is dependent on Federal investment as well. So, thank 
you for that commitment and for coming to north Texas.
    I do want to mention another project that DART has applied 
for CIG funding, it is the second rail line in downtown Dallas, 
called the D2 Subway. This is a project that will greatly 
improve mobility and add capacity for our system. Right now, if 
anything happens in downtown to block our existing line, the 
entire line is shut down. So adding a second station will be 
very important for us.
    And to kind of add on to what some of my colleagues have 
said, I am concerned of course about some of the delays we have 
seen. But I trust that your agency is going to be working with 
DART to make sure that gets full consideration. I think it is 
something that is certainly worthy of being considered.
    Ms. Williams. Yes.
    Mr. Allred. Thank you.
    I want to turn to TIFIA loans because this is an important 
thing for Texas. As you know, we combine different funding 
mechanisms for a lot of things.
    Ms. Williams. Yes.
    Mr. Allred. And in your Dear Colleague letter, you said 
that TIFIA will be considered, quote, ``In the context of 
Federal funding sources,'' end quote, and, quote, ``not 
separate from the Federal funding sources.''
    Can you explain how FTA is applying that standard?
    Ms. Williams. OK, so let me begin by saying that loans are 
treated by the Build America Bureau, so RRIF and TIFIA loans 
are actually handled through them. We have done multiple 
projects that have included TIFIA loans, including Seattle 
being probably the most recent one, and one of the largest 
actual CIG projects we have done at $1.17 billion for Seattle.
    What I think the Dear Colleague was trying to get at is 
that it looks at--so in CIG, we only look at the funding based 
on CIG or non-CIG funding. The repayment sources really don't 
factor in to that. But it is a discretionary grant program, so 
when the Department looks at funding, they look at the totality 
of the Federal investment. And so they look at everything that 
is being asked for from the Federal Government. And I think 
that is what it was getting at. And so I know that has been 
somewhat confusing, but let me assure you that we have used 
TIFIA--Maryland purple line is another example of where we have 
used a TIFIA loan.
    Mr. Allred. Well, I am glad to hear you say that because, 
as you know, this is not being repaid with Federal funds, and 
so my concern is that we are providing less flexibility to 
transit projects than we are to highway projects, which I think 
are treated differently. Is that the case?
    Ms. Williams. I am not as familiar with the highway side, I 
couldn't really answer that.
    Mr. Allred. OK.
    Ms. Williams. I would be happy to get back to you on the 
record for that.
    Mr. Allred. Sure, sure.
    Well, as I said, transit is very important for us. I want 
to make sure that as many funding sources are available as 
possible. I want to work with your agency and the 
administration to try and do everything we can to help our area 
continue to grow. And for us TIFIA and other funding sources 
are very important. So we will certainly be following up with 
you about that.
    But I also, as I said, want to thank you for coming to 
north Texas and for the grant that DART received. It is a great 
program, DART is making great advancements, we have very good 
leadership there, as I am sure you have seen.
    Ms. Williams. Yes. We have a great working relationship 
with Gary there. He is very forward-thinking in the industry, 
so you are very lucky to have him there.
    Mr. Allred. Thank you so much.
    I yield back, Madam Chair.
    Ms. Williams. Thank you, sir.
    Ms. Norton. Thank you.
    Mr. LaMalfa.
    Mr. LaMalfa. Thank you, Madam Chair, for today's hearing.
    Now some colleagues have been saying that the 
administration has not been very supportive of the Capital 
Improvement Grant Program, CIG. But through its first 2 years 
in office, the administration has approved 30 percent more 
projects and 300 percent more funding than the previous 
administration had done at the same time. About 10 projects at 
$1 billion versus 13 projects at $3.3 billion. So, I don't know 
where that stat comes from, it doesn't seem very fair.
    But as a Californian, I have noted that one thing the 
previous administration did do is put out money to a disastrous 
project like the California High-Speed Rail, which is going to 
be at least triple the price of what was originally sold to 
voters in 2008 when they approved about a $10 billion bond. And 
then following that, $3.5 billion of stimulus money to 
stimulate the economy back in 2009 came forth from the Federal 
Government. One billion dollars of that, almost $1 billion, has 
not been spent and I appreciate the administration trying to 
acquire that back. We are working on legislation known as H.R. 
1515 to acquire back the rest of the $2\1/2\ billion. Since it 
has not performed, it is a breach of contract and it is not 
even going to be a high-speed rail system from S.F. to L.A. It 
is going to start in Merced and end in an orchard somewhere 
Bakersfield. It is not high-speed rail, it is not S.F. or L.A., 
I think by their standards. So those dollars need to come back 
and go into true transit projects that can help everybody. That 
is what we will seek to do if they do not meet their marks, 
which I think they have not already met.
    So, what we bring up today is the capital investment for 
rural communities and my colleague, Mr. Davis, mentioned that 
as well. It is mostly grants for passenger rail, light rail or 
buses. So that means all taxpayers are paying for a program 
that only benefits, mostly only benefits, cities and suburbs, 
without any practical rural application.
    So we had a roundtable about this last month, it was about 
Mobility on Demand, and some of the things being talked about 
were some kind of public-private transit system to help the 
rural elderly get to their doctors' appointments, et cetera, to 
help the rural disabled to get to their jobs or even help rural 
veterans seek their VA facilities, at least until community 
care kicks in more effectively to give veterans more choices, 
more locally.
    So we have these things, we can be delivering groceries or 
prescriptions instead of them having to get in their car and 
go. We had one hospital brought up that they could increase 
their success of appointments not being met by being able to 
integrate this into it. So we need a more rural component on 
that, I think, in order to have some kind of fairness.
    So do you think FTA would be willing to work with Congress 
to adapt the CIG program for these Mobility on Demand projects 
I am speaking of? And what kind of applications can you see for 
that, Administrator Williams?
    And thank you for being here.
    Ms. Williams. Absolutely. We would love to work with this 
committee and Congress on how CIG could apply to the rural side 
of the country. I would have to tell you that you are correct 
in that many of these projects lie in the very large urban 
centers of the country where mass transit is most viable. For 
instance, in New York alone, there are five projects, two of 
which are in the Gateway suite of nine projects that total $10 
billion in investment. And so if we were to fund all of those 
projects, including the two we spoke of--the Portal North 
Bridge and Hudson Tunnel--you are talking about the entire 
appropriation for this program, all of it would be consumed by 
what projects would be requested from just New York alone.
    And so when you look at a nationwide program, you need to 
be cognizant of that. And so we would be happy to work with the 
committee and look at how we can help rural America as well on 
the Mobility on Demand side.
    Mr. LaMalfa. Thank you for that.
    Let's go back to a couple of stats that were thrown out at 
the beginning of the hearing here on CIG projects and the 
Letter of No Prejudice timeframe. It was stated that since 
2017, this administration has taken about 78 days to get to the 
LONP whereas credit was given to the previous administration of 
it being 54 days. Well, was that a cherry-picked number, the 54 
days? Was that in the first 2 years of that previous 
administration when they didn't have their staff hired out or 
confirmation of key people in the Department and all that? What 
was the number of days that it took for the first 2 years of 
the previous administration to get the letter out versus the 
number of days here?
    Ms. Williams. I would argue, Congressman, that the first 2 
years of a brandnew administration is very different when you 
compare it to the last 2 years of a second term Presidency. You 
know, when you look at a Letter of No Prejudice, we are very 
cognizant that although that letter says we are not committing 
Federal resources to this project, many grant sponsors do just 
that, they communicate that to their locality that we have the 
Federal investment now on the line, that we will get Federal 
dollars. Because we are allowing them to proceed on their own 
without any commitment from us, they still message that at the 
local level as our commitment.
    And so we are very careful when we sign those letters of no 
prejudice that we look at the project to make sure that it is a 
good project on its merits and that we believe it will be able 
to meet the scrutiny of the CIG program before we sign that. 
So, it is important to do things fast and streamline things, 
but it is also important to balance those with doing things 
right.
    Mr. LaMalfa. Yeah. Certainly it is more difficult with 
change of administration, especially when there is change of 
party involved to an administration. I know things look 
different around here right now too.
    I yield back, Madam Chair, thank you.
    Ms. Williams. Thank you, Congressman.
    Ms. Norton. I thank you as well.
    I want to assure the gentleman that we will work with him 
on rural projects. The CIG project is confined to high-density 
areas. Mr. Davis, the ranking member of course, is interested 
in rural projects as well. So we would be pleased to work with 
him.
    On this matter of the data, I asked the staff to look at 
that and I am informed that the data captured all projects in 
the pipeline during the FAST Act. That includes projects begun 
long before the last 2 years of the prior administration. So I 
am not sure how we can assign these projects to one 
administration or another. We talk about projects that overlap 
by their very nature.
    Mr. Payne.
    Mr. Payne. Thank you, Madam Chair. And I would like to 
thank the Acting Administrator for being here today.
    How long have you been in that position of Acting 
Administrator?
    Ms. Williams. Since August of 2017.
    Mr. Payne. And is there a reason why you are still 
``Acting''?
    Ms. Williams. The nominee has not been confirmed at this 
point.
    Mr. Payne. Seems like a pattern in this administration.
    Based on your testimony here, ma'am, you seem very 
qualified for the position, so I am just wondering why this 
administration can never go the entire distance in confirming 
people. But I guess it is an ideology.
    Ms. Williams. Let me be clear. My name is not before the 
Senate for confirmation.
    Mr. Payne. I would nominate you.
    [Laughter.]
    Mr. Payne. Let me just say, Mr. Malinowski raised the issue 
that I have raised that we are all very concerned about the 
Gateway suite of projects. During your testimony, I had my 
staff check to follow up on some of the points that you made 
and thanks to technology, I have a response already back from 
the State of New Jersey on comments you made.
    Ms. Williams. Wonderful.
    Mr. Payne. And basically the ball is actually in your court 
and the board approved $600 million last year for NJ Transit 
projects that we are discussing. And the State approved the 
budget in June. So the FTA has been sent a draft that you can 
basically approve in October, so hopefully you can take a look 
at that. Maybe you didn't have that information up to before 
June, but the budget has passed and the money is there. There 
is no other threshold that the State of New Jersey has to meet 
other than you acting on it.
    Ms. Williams. Our understanding is that New Jersey Transit 
still needs to have their board sign off on it before it comes 
back to FTA. So maybe that has transpired since I last talked 
to my technical team, but we would be happy to take a look at 
it, for sure.
    Mr. Payne. Thank you.
    Last month, there were media reports indicating that 
Secretary Chao influenced the award of a Department of 
Transportation grant to projects in Kentucky. The reports 
indicated that she went so far as to designate one of her aides 
as a liaison between the Department and Senator McConnell's 
office.
    Does the FTA employ similar practices in implementing the 
CIG program? And how can the public be certain that money meant 
for infrastructure investments is not swayed by political whims 
or relationships?
    Ms. Williams. No, sir. I am happy to tell you that there is 
not one CIG project in Kentucky, that that is not something 
that the Department does under Secretary Chao's leadership.
    Mr. Payne. But under that same Secretary, these other 
projects have been approved in Kentucky. How convenient.
    Ms. Williams. Many projects were not though, sir. I am not 
familiar with that. I am really here to talk about, as the 
Acting Administrator, the CIG program. I can assure you that 
every grant program is dealt with by the career personnel in 
the Department, just like they have been across multiple 
administrations. They are highly professional, very committed 
personnel within our Department.
    Mr. Payne. Well, I will leave it at that. I had something 
else to say, but I better not. Thank you. I yield back.
    Ms. Norton. Well, thank you, Mr. Payne.
    Mr. Pence.
    Mr. Pence. Thank you, Madam Chair, and Ranking Member. As 
the crossroads of America, it is critical to have reliable 
freight and public transportation options in Indiana. We must 
prioritize investments in our infrastructure system, and the 
FTA's Capital Investment Grant program is a crucial way States 
like Indiana work with the Federal Government to promote 
economic growth and improve rail safety.
    These projects help our communities thrive by attracting 
business to the project corridor, connecting workers to their 
employers and relieving freight congestion chokepoints. Nearly 
73 percent of the funds from CIG program flow directly to the 
private sector via manufacturers and suppliers and are located 
in nearly every congressional district.
    Administrator Williams, as you are aware, there are two 
projects in my home State of Indiana currently advancing 
through the program. When Secretary Chao visited northwest 
Indiana, she saw firsthand how the West Lake corridor and 
Double Track projects serve as a key economic driver for the 
Hoosier State.
    Currently, both projects are awaiting movement from the 
project development phase into the engineering phase, and I 
know that your office is working hard on these and we thank 
you.
    My good friend and fellow Hoosier, Congressman Visclosky, 
has been working for several years on the improvement and 
expansion of the South Shore Rail Line, another great example 
of how CIG is keeping our economy moving.
    Administrator Williams, I thank you for keeping me informed 
as this project moves forward. I recognize the valuable 
partnership between our State and the Department of 
Transportation, and I have the upmost faith in your leadership.
    Madam Chair, I yield.
    Ms. Williams. Thank you, Congressman.
    Ms. Norton. Thank you very much, Mr. Pence.
    Mr. Lowenthal.
    Mr. Lowenthal. Thank you, Madam Chair. Also, thank you, 
Administrator Williams, for coming to our committee. I want to 
discuss with you something that we have already been talking 
about, and I think is critical to all of our communities, and 
that is that partnership between the Federal Government, our 
local transit agencies, that really is designed to improve and 
expand public transportation across the country.
    A personal example. When Secretary Chao last appeared 
before us in March of last year, I asked the Secretary about 
the Orange County Streetcar, which is a transit project that is 
going to connect, as you know, Garden Grove, which is in my 
congressional district, with Santa Ana, which is the county 
seat.
    The point I am making is I emphasized that our local agency 
was counting on a full funding grant agreement from FTA because 
our local agency had now bids out that were set to expire, and 
that costs would now begin--once that happened would rise.
    What was nice was that, yes, FTA did sign the agreement in 
November of last year, of 2018, which had been in the New 
Starts program since 2015. So my question is: are other 
communities experiencing the same delays in the New Starts 
process and have seen their costs increased as a result of 
delays? And is FTA tracking those cost increases?
    Ms. Williams. So I was happy to go out to Orange County and 
sign that FFGA with Darrell. It was a significant tool, I 
think, for the local economy there. What I would tell you is 
that I am not sure that it included project cost increases. So 
when we went through the risk assessment process, if the risk 
assessment says the actual project cost is higher than what the 
agency is predicting it to be, we require them to meet that 
cost. And I think that was the issue with Orange County.
    Mr. Lowenthal. Right. I understand that. But I am just 
wondering, in other counties, are you tracking data that you 
could provide us about those--the cost increases that were due 
to whatever--not blaming you, but this process taking longer 
than people expected.
    Ms. Williams. I am not sure that we are tracking that 
specifically. I would have to ask my technical team. We would 
be happy to get back to you on that.
    Mr. Lowenthal. I would appreciate that. And maybe you can 
explain to me. I may have missed some of this. When there are 
delays, and what are you doing and how is the agency 
streamlining the New Starts process to avoid these kinds of 
cost increases?
    Ms. Williams. So let me assure you that there is not one 
FFGA or SSGA or LONP on my desk, my leadership's desk, or OMB's 
desk. So there are no delays happening----
    Mr. Lowenthal. There are no delays.
    Ms. Williams. There is not one single project waiting for 
my action as I sit here today. And so many of the actions that 
cause delays, sometimes there are third party agreements that 
are difficult to work out. There are local financial 
commitments that need to be made.
    A lot of sponsors--we worked a lot with Indiana on how you 
define ``committed'' in our program means you have access, 
immediate access to those funds, and many sponsors confuse that 
with if they have a board action saying they are going to give 
the funding, if that board action is required to be approved by 
anyone else, it is not considered actual committed funding.
    And so we try to make sure--we work very closely with the 
sponsors. My technical team is one of the best in Government. 
They work with our grantees all the time to make sure they 
really understand what needs to happen.
    Mr. Lowenthal. I appreciate that, and I think it is very 
important what you are saying, so that the applicants do 
understand. But I am also talking about another issue. What 
about when that is all taken care of, the applicants have done 
what they have to do, they have applied, you know, and they 
have bids out.
    They are expecting to have that full funding, a grant 
agreement. And it takes longer, and then now it is going to 
cost--not because they have done anything wrong--the applicant 
more money.
    Ms. Williams. We obviously never want to cost a project 
sponsor additional costs on their project. And so we work 
really hard to make sure that doesn't happen.
    Mr. Lowenthal. Well, I appreciate that. Thank you, and I 
yield back.
    Ms. Williams. You are welcome. Thank you, Congressman.
    Ms. Norton. Well, I appreciate the gentleman's questions 
because, obviously, the local jurisdictions can't know what--
when there are several of them working together, that have to 
work together, the leadership has to come from the agency. So 
anything we can do to facilitate that? But you have the 
expertise. They are simply applying--if a number of them have 
to get together, they still are going to have to look to you 
for leadership on what to do and how to do it quicker.
    Mrs. Miller.
    Mrs. Miller. Thank you, Madam Chairwoman, and thank you for 
being here today.
    I think we all know that America's transportation system 
plays a significant role in our economic development 
globalization and industrial development. We need to continue 
together, work together, on improving our public transportation 
innovation, especially in our rural areas, which you have heard 
from several people.
    I want to thank you for your work on FTA, and I am 
particularly interested in how we can modernize public 
transportation and extend service into our rural communities 
across the Nation.
    Can you elaborate on the Department's goals and priorities 
to advance innovation in transportation?
    Ms. Williams. Yes. So we are doing a lot in our MOD sandbox 
we call it, our Mobility On Demand, and we are looking at 
different things with paratransit services, which are critical 
in rural America. We are looking at, you know, younger 
generation expects things much quicker than many of us are used 
to in the public transportation field, and so developing 
applications where they can look online and be able to 
integrate their fare payments. Gary in Dallas is doing a lot of 
work on that.
    So we are doing a lot of innovative things in transit. 
Microtransit is big right now. Right-sizing the transit system 
to what the ridership is is very important. Rural America has 
already sort of done that. Small urban and large urban are 
coming to that. We are doing partnerships with Uber and Lyft 
for first mile/last mile. So there is a lot of interesting 
innovations happening in public transportation.
    Mrs. Miller. Well, along those lines, can you discuss the 
new technologies that are included in the Integrated Mobility 
Innovation discretionary grant program?
    Ms. Williams. Yes. So it is a $50 million grant program 
that is out right now. The notice of funding opportunity is out 
now for people to apply. It will include fare integration 
payments. Most people want to be able to go to their phone, hit 
an app, and be able to pay for their entire ride, whether it be 
starting with Uber and Lyft to the rail system, getting off at 
the rail system, and having a bike or a scooter there to take 
them for the last 2 miles.
    They want to do it all at one time. They want to pay for it 
all at once. And they want to know what that cost will be and 
how long it will take. And so many of the MOD sandbox that we 
are doing will do that.
    So it also will look for ideas in automation. I talked 
earlier about in the automation field we are looking at being 
able to automate parking buses in the urban core closer 
together, more efficiently, so that you use less land space. 
Being able to automate, taking them through car washes. I think 
you will see that fairly soon. And so there is a lot of 
interesting things going on, but that notice of funding 
opportunity is right now out for applications, and we are very 
excited about it.
    Mrs. Miller. That sounds good. I think about, in my 
particular rural area where people are more elderly, the 
visualization of the scooters might be an interesting thing.
    The CIG program is one of the Government's most complex and 
rigorous grant programs. I understand that the number of 
projects seeking funding have increased. How are you and your 
Department working to streamline the grant application process 
to ensure that the needed funding is delivered efficiently and 
cost effectively?
    Ms. Williams. It is difficult, I will be honest, to 
streamline this program because there are so many requirements 
in law for these projects to meet. It is quite rigorous, and so 
it is difficult to do things. You know, you are talking about 
billions of dollars of Federal investment. So you need to 
balance streamlining and doing things fast with doing things 
right, and so we are trying to strike that balance to make sure 
that we do that and protect the Federal investment as the 
stewards of taxpayer dollars.
    Mrs. Miller. OK. Thank you. I yield back my time.
    Ms. Williams. You are welcome. Thank you, Congresswoman.
    Ms. Norton. Thank you very much, Ms. Miller.
    Mr. Espaillat.
    Mr. Espaillat. Thank you, Madam Chair, and thank you, 
Acting Administrator Williams, for being here today. I am 
particularly happy that our subcommittee is discussing the 
Capital Improvement Grants Program today. This program made the 
MTA's 2nd Avenue subway phase 1 a reality, which carries nearly 
200,000 people each day, more than some cities and entire 
systems across the United States.
    By now, everyone knows I am a passionate advocate for the 
MTA's 2nd Avenue subway phase 2 extension project, which will 
finally bring subway services to a transit desert in East 
Harlem in my district. The project will also connect the subway 
to the Metro-North commuter rail system, to counties outside of 
New York City, and the express bus to LaGuardia Airport from 
125th Street.
    Federal investment in the New York subway is a good value, 
so I was glad to bring Chairman DeFazio to see the project, 
both the current completed phase and the existing tunnels that 
will make a large portion of the second phase.
    The MTA, in an effort to reduce project costs and make 
strategy design choices, recently changed the project to take 
advantage of existing tunnels under 2nd Avenue in this portion 
of my district. These tunnels were constructed back in the 
1970s, so a lot of the work has already been done. There was 
Federal funding available back then. The city got into fiscal 
trouble, and the project was left sort of like halfway through.
    However, I am concerned that by new FTA policies, that 
could make it harder for this and similar projects to get off 
the ground, not only in New York City but around the country. 
The Federal Transit Administration last June informed local 
transportation agencies via letter that they will now need to 
meet a threshold of 65 percent certainty in the cost estimates 
rather than the previous 50 percent certainty.
    While we all want to help projects have better and more 
accurate cost estimates, what this change functionally means is 
that the agencies will likely have to increase the amount of 
funds they hold in contingency. So this new formula will sort 
of like alter the fiscal aspects of these major and important 
transportation projects in my district.
    We need to be careful about placing a burden on bigger 
investments. A bump of 15 percent on estimates for a large 
project takes a project that has great value for the volume of 
riders it serves and muddies it up with an artificially high 
price that will cause sticker shock, an unprecedented shock.
    And for projects whose projected costs have already been 
publicized, this minor policy change could result in a major 
roadblock if the new estimate creates negative attention, 
especially if much of that money may not actually be used.
    In the case of the 2nd Avenue subway second phase 
extension, the current estimated cost is between $5.7 billion 
to $6 billion. But with this change from P-50 to P-65, the 
project could appear to cost as much as $7.5 billion on paper. 
I am afraid that this artificial move will make it harder for 
CIG projects to get off the ground and may harm the viability 
of projects already in the pipeline, while doing nothing to 
promote accurate cost estimates.
    My question is: does the FTA still plan to hold projects to 
the 65-percent threshold?
    Ms. Williams. So let me unpack that a little bit. Phase 1 
had a difficult opening but has had great ridership. And I 
actually met with Representative Maloney, Carolyn Maloney, 
several months ago on the phase 2 project. And it is under 
review in our program for rating. It has never been rated, so 
this is the beginning stages for this project in our process.
    Let me tell you that P-65, that probability value of 65, 
does not increase the cost of the project. What it is trying to 
do is give us a 65-percent chance of the project cost being 
correct, and allowing that project to come in on budget and on 
time. And so the concern is that, you know, MTA has a project 
that is underway now. It is East Side Access. It is 10 years 
behind schedule and $5 billion over budget, and they will be 
the same sponsor for the second phase project.
    Mr. Espaillat. The MTA seems to feel that it does impact 
this bump of 15 percent. And just to finalize, because I am 
running out of time, since the second phase is in my district, 
I will look forward to speaking to you about it.
    Ms. Williams. Absolutely. I would be happy to talk to you 
further.
    Mr. Espaillat. Thank you so much.
    Ms. Williams. You are welcome.
    Ms. Norton. Thank you very much, Mr. Espaillat.
    Mr. Westerman.
    Mr. Westerman. Thank you, Madam Chair. Thank you, 
Administrator Williams, for your testimony and for being here 
today.
    If you look at my rural district in Arkansas, the Fourth 
Congressional District, there are zero projects going on, and 
so you may think, what do I care about CIG and the projects 
that are out there? But, actually, it affects my district 
because there is only a limited number of transportation 
dollars to go around, so I want to make sure that where these 
projects are going on that they are done very efficiently and 
in the most economical way possible.
    And I know that part of that is innovation. There are some 
interesting things going on in mass transit. I have had the 
opportunity to visit the Hyperloop facility. And my question to 
you is--and getting back to the gentleman's question about P-50 
versus P-65, you know, I see that as a way to be more efficient 
and effective at the agency to make sure that we are not 
getting cost overruns, and those taxpayer dollars are handled 
more--or better, in the taxpayer's interest.
    So what do you see as far as innovation in the future and 
ways to lower cost, ways to get systems maybe like Hyperloop 
that take much less right-of-way to build? They can go at 
ground level, they can be elevated, under the ground, through 
the water. You know, it looks like there would be a lot less 
cost and potentially a much safer way to do mass transit. Where 
do you see us heading there?
    Ms. Williams. So that technology is still in its very 
infant stages, and so it is impossible to predict what that 
would look like. What I would say is that there is a lot of 
other technology that is happening, for instance, with bus 
rapid transit, where you can do transit signal priority and 
have a dedicated lane, where a lot of people would rather take 
the bus than sit in their car in traffic when you have a 
dedicated lane that doesn't stop for a signal and that bus just 
goes right on by. So there are easier things to do that cost 
less money.
    It also provides a way that if and when automation actually 
comes into the market, those types of projects can be a little 
bit easier converted to automation. And so because they already 
have a dedicated lane, they already have transit signal 
priority. So when automation comes into the market, it would 
actually be a lot easier to do. It is also a lot less that you 
would have to pay back on a Federal investment.
    When you talk about light rail, those investments are a lot 
more expensive. And so buses have a shorter shelf life and a 
much smaller price tag. And so there is a lot of innovation 
that is happening just in the bus market itself.
    Mr. Westerman. Thank you for your answer, and I yield back.
    Ms. Norton. The gentleman's question brings to mind the 
fact that, because he is interested in rural areas, that rapid 
bus--to deal with your answer--would help rural and urban 
areas, since many of those who are coming from rural areas are 
coming into the city. So that is an important question.
    Ms. Craig.
    Ms. Craig. Thank you so much, Madam Chairwoman.
    Administrator Williams, the FTA has been a very strong 
Federal partner for the State and local efforts in Minnesota to 
develop safe, efficient mass transit, including in my district.
    Just 2 weeks ago, the FTA announced the release of the last 
remaining tranche of funds--I believe it was $74 million for 
the Orange Line BRT--that provides 7-day-a-week service to 
residents of Minneapolis, Richfield, Bloomington, and in my 
district, Burnsville.
    This is our region's first such Small Starts grant and the 
latest grant agreement that our State and local partners have 
reached with the FTA since 2011. Getting to this point took 
years of cooperation and communication between one Federal 
agency, three State agencies, two counties, five cities, and 
one regional transit provider. So I am sure that was incredibly 
complex and complicated.
    I am a strong supporter of these types of Federal/State/
local partnerships. What can FTA do to ensure that the 
application approval and grant-making process is as simple and 
efficient as possible for State and local partners who apply 
for these funds?
    Ms. Williams. I think, you know, our team, our professional 
career staff that work with our grant sponsors, are terrific. I 
have worked for two other Presidents in four other Departments, 
and I have never seen a more committed staff, a more 
professional staff. They worked tirelessly to make sure that 
the grantees understand what is expected and what information 
they need.
    We have a great working relationship with the Metropolitan 
Council. They are great about bringing all of their project 
partners in to see us. They are great about value capture. And 
so we have an excellent working relationship, and I think that 
is why you see that they have had success in our program.
    Ms. Craig. That is fantastic. Ms. Williams, there are other 
BRT projects that I am incredibly supportive of in the region. 
I am particularly optimistic about the Red Rock corridor, which 
would connect the Twin Cities to Hastings and Cottage Grove, 
two other cities in my congressional district.
    However, the President's full-year 2020 budget request 
called for cuts to vital mass transit programs, including sharp 
cuts to the Capital Investment Grants Program. This comes on 
the heels of previous budget requests that would have 
eliminated the CIG program entirely.
    Fortunately, the House passed a transportation 
appropriations bill that would fund the CIG program at 
necessary levels. How can Congress continue to work with the 
FTA to ensure that the FTA continues to fund critical projects, 
as metro regions continue to expand? How can we best advocate 
to the White House and OMB for the CIG program that is so vital 
to communities around the country?
    Ms. Williams. I think, you know, in the beginning of the 
administration, there was no allocation for CIG in the 
President's budget, and I think you see a difference in the 
fiscal year 2020 budget of an allocation of $500 million in our 
budget request by the President. I think that is what we 
believe we need for new projects.
    The total is $1.5 billion, so it funds all of the full 
funding grant agreements currently in place, as well as what we 
believe we will need for projects that will be ready.
    Let me assure you also that during the 2017 and 2018 
timeframe, that even though the President's request was not for 
any new funding, the Department did follow the intent of 
Congress and fund projects. I believe it was 3 in 2017 and 10 
in 2018.
    So I want to make sure that we are on the record that even 
though the request was zero, none of those projects were 
canceled or not funded or set aside.
    Ms. Craig. I appreciate that very much. And with that, Ms. 
Williams, Madam Chairwoman, I yield back.
    Ms. Williams. Thank you, Congresswoman.
    Ms. Norton. Thank you, Ms. Craig.
    Mr. Balderson.
    Mr. Balderson. Thank you, Madam Chair.
    Good morning, Ms. Williams.
    Ms. Williams. Good morning.
    Mr. Balderson. Good afternoon almost. Thank you for being 
here this morning. You are here as the Acting Administrator of 
the FTA, but you are also the Deputy Administrator of the FTA. 
You have the task of doing two jobs, which I think you are 
doing very well.
    I think it would help speed up projects in the CIG program 
if we had an Administrator confirmed by the U.S. Senate. So 
when did the Trump administration submit to Congress its 
nominee to head the FTA?
    Ms. Williams. I believe it was in January of 2018.
    Mr. Balderson. OK. Thank you.
    Ms. Williams. And was resubmitted again in the new 
Congress, I believe.
    Mr. Balderson. OK. Thank you. I knew my colleague from New 
Jersey raised the issue earlier, but to clarify, what is the 
status of the nomination?
    Ms. Williams. As far as I know, it is still pending before 
the Senate.
    Mr. Balderson. OK. I hope my colleagues in the Senate move 
quickly with your nomination. I agree with my colleague from 
New Jersey. I would support you.
    My next question is, as you know, Columbus, Ohio, was 
selected as the winner of the Department of Transportation's 
first-ever Smart City Challenge in 2016. The program's 
acceleration fund has since leveraged hundreds of millions of 
dollars in private-sector contributions and investments. It is 
a national model for how public-private partnerships should 
operate.
    According to the list of current CIG projects, nearly all 
of the projects are in large or medium-sized cities. In your 
experience, how are these areas better equipped to receive 
outside funding and resources than rural areas, which we have 
touched on a lot here this morning?
    Ms. Williams. I think, you know, in large urban cities, we 
are still working with grant sponsors to remind them the value 
that transit brings and to capture that value. I think to your 
point, there is a lot of value that your project has captured.
    And so knowing that we work with developers to develop 
around transit, you just need to look outside my window at the 
U.S. DOT and see the massive amounts of development in 
Southeast that was completely different 30 years ago when I was 
here before.
    And so there is a value that it brings, and sometimes you 
merely have to ask the question. But we are not always--you 
know, we are not used to having to ask that question. And so we 
are trying to make sure that grantees understand that and bring 
more private participation to the table.
    Mr. Balderson. My followup question to that, you have kind 
of touched on it there with that answer, but why should the 
Department of Transportation encourage leverage of such funds 
in the future?
    Ms. Williams. We have also seen that when projects are 
funded with local, State, and private contributions, they have 
a better chance of success, because you have the community 
involvement and support. And so we like to see that blend of 
funding, in addition to the Federal grants and loan support as 
well. We have found that those projects are the most successful 
in our program.
    Mr. Balderson. Thank you very much. Thank you very much for 
that answer.
    And, Madam Chair, I yield back my remaining time.
    Ms. Williams. Thank you, Congressman.
    Ms. Norton. Thank you, Mr. Balderson.
    Mr. Carbajal.
    Mr. Carbajal. Thank you, Madam Chair.
    And, Administrator Williams, improving our Nation's roads, 
bridges, and overall surface infrastructure is of the utmost 
importance to both maintaining our economic competitiveness and 
advancing safety.
    I must say, I was disappointed when the administration's 
fiscal year 2020 budget request only included $500 million in 
funding for new transit projects under the Capital Investment 
Grant program. This is significantly less than both the 
authorized level and recent appropriations.
    While this budget for the first time in this administration 
proposes funding for new transit projects, the funding level 
for the program and for new projects is substantially lower 
than what our current needs are. Can you help me understand how 
the administration arrived at this number of $500 million? And, 
two, what projects would receive funding should Congress 
provide the requested amount?
    Ms. Williams. So let me unpack that a bit. The first 
question you asked is how we arrived at the $500 million. That 
is something our technical team looks at as we craft our 
budget, and that is the number we thought was appropriate for 
what we believe may be ready in fiscal year 2020.
    It is difficult to gauge because many of the issues that 
need to be resolved are local issues like third party 
agreements, having all of their non-CIG funding secured. So 
those are things that are outside of our purview, so we try to 
estimate what will be ready, and we believe that that is the 
right number.
    The $500 million is also paired in our budget with another 
$500 million out of the general fund that is above the FAST Act 
level; $250 million of that is for buses and bus facilities, in 
recognition that our bus fleets are aging across the country 
and that it is important to look at that in the overall 
infrastructure program, not just looking at rail but also in 
our bus fleets.
    And, secondly, another $250 million for our state of good 
repair needs, which is a formula program, because we have a $90 
billion backlog in the industry of state of good repair. So it 
was a balance of we need to perhaps build and expand transit, 
but we also need to take care of what we have, of our existing 
projects and transit systems. And so it was a way to balance 
those both.
    Mr. Carbajal. Thank you. I couldn't help but to heed the 
observation or the comment you made earlier about a good 
healthy mix of revenue for various projects actually lends 
itself to making them better candidates.
    So by that logic, I am pretty sure that California is going 
to get its fair share. And my district in particular, who has 
voted with almost an 80-percent vote to approve self-help tax 
measures, is actually going to be at the front of the line now.
    So I look forward to scoring as high as possible with all 
these grant programs, so that we could get our fair share to 
the 24th Congressional District in California.
    Thank you very much.
    Ms. Williams. Congressman, let me assure you, of the 15 
construction grants, 6 of them are in only 2 States, 1 of which 
is California. So----
    Mr. Carbajal. Thank you very much.
    Madam Chair, I yield back.
    Ms. Norton. Well, I am very envious of that answer. You 
said that before. I don't know if it is the size of California, 
but I know when people hear that, they want to know why there 
aren't more in their States. Either California is doing 
something right or there must be some other response.
    I understand that there are no more questions. I want to 
thank you, Ms. Williams, for your testimony. Your comments have 
been very helpful. You have indicated that you would be back to 
us, as we asked for more information. So I appreciate your very 
knowledgeable testimony. And you are dismissed, and I am going 
to call the next and last panel.
    Ms. Williams. Thank you, Madam Chair.
    Ms. Norton. Could I ask Mr. Bob Alger, the president and 
CEO of Lane Construction Corporation, to come forward. He is 
testifying on behalf of the American Road & Transportation 
Builders Association; Mr. Tom Gerend, the executive director, 
Kansas City Streetcar Authority; and Paul Skoutelas, the 
president and CEO of the American Public Transportation 
Association.
    I want to thank all of you for being here today, and I look 
forward to your testimony.
    Without objection, our witnesses' full statements will be 
included in the record. Since your written testimony has been 
made a part of the record, the subcommittee requests that you 
limit your oral testimony to 5 minutes.
    Mr. Alger, you may proceed.

 TESTIMONY OF ROBERT E. ALGER, CHAIRMAN OF THE BOARD, THE LANE 
  CONSTRUCTION CORPORATION, ON BEHALF OF THE AMERICAN ROAD & 
  TRANSPORTATION BUILDERS ASSOCIATION; TOM GEREND, EXECUTIVE 
    DIRECTOR, KANSAS CITY STREETCAR AUTHORITY; AND PAUL P. 
  SKOUTELAS, PRESIDENT AND CHIEF EXECUTIVE OFFICER, AMERICAN 
               PUBLIC TRANSPORTATION ASSOCIATION

    Mr. Alger. Chairman Norton and Ranking Member Davis, thank 
you for convening today's hearing. I am Bob Alger, chairman of 
The Lane Construction Corporation, and I am here today in my 
role as chairman of the American Road & Transportation Builders 
Association, or ARTBA.
    Our association's members design, build, manage, and 
operate all modes of transportation infrastructure projects. My 
company has direct experience with projects supported by the 
transit Capital Investment Grant program.
    Madam Chairman, there has been a lot of talk about a 
Federal infrastructure initiative since the 2016 Presidential 
campaign. If you take anything away from my remarks, it is 
this: now is the time to act on our Nation's infrastructure 
needs, and this process begins with fixing the Highway Trust 
Fund.
    I am pleased to talk about the Federal Transit 
Administration's Capital Investment Grant program, but I am 
also here to tell you that Congress' chronic failure to fix the 
Highway Trust Fund Program threatens all Federal surface 
transportation programs, including transit projects.
    The next Highway Trust Fund crisis looms shortly after the 
FAST Act expires in less than 15 months. Rather than repeat the 
past dysfunctions that led to $140 billion in general fund 
transfers and budget gimmicks, President Trump, congressional 
leaders, and members of this committee, must seize the 
initiative and fix the Highway Trust Fund shortfall once and 
for all.
    Here are three approaches for your consideration: raise the 
Federal gasoline and diesel user fee rates, apply a freight-
based user fee to heavy trucks, and institute a fee to ensure 
electric vehicle users also help pay for the system from which 
they benefit.
    While ARTBA believes these options are the most viable in 
the short term, we are open to any user-based recurring revenue 
solutions that would support increased Federal highway and 
public transportation investment.
    Many of the same complications we face when delivering a 
highway project are also prevalent on public transportation 
projects as well, and these obstacles cost American taxpayers 
time and money. According to FTA's capital cost database, which 
compiles as-built cost for 54 federally funded transit 
projects, average cost for delivering these projects increases 
an average of 5 percent annually. As such, a project that costs 
$100 million in 2019 would cost $163 million to build in 2029.
    This annual increase is more than twice the rate of general 
inflation, which is estimated to increase at an annual rate of 
2.4 percent over the next 10 years, according to the 
Congressional Budget Office. Users of the system will also have 
to wait longer for the economic benefit from the increased 
access to services, job creation, and other activities. And 
depending on the project, delays can far exceed the 5-percent 
annual increase projection.
    My company recently completed work on a project that went 
from under 3 years projected completion to nearly 4 years. The 
increase in costs for that single year amounted to nearly 20 
percent cost increase.
    My written testimony includes a host of recommendations for 
meaningful improvements to the regulatory and project delivery 
process. I would like to highlight a few of them. Public 
transportation projects have previously been allowed to use 
Federal loan programs such as TIFIA as local match.
    Recent denial of such flexibility has delayed some 
critically important projects, which only increases their 
eventual cost and schedule. Since the loans are repaid with 
local dollars, they should be allowed to be counted as local 
match.
    Another key factor in keeping transportation construction 
projects on schedule are the use of dispute resolution boards. 
These entities should include members recommended by the 
project owner, contractor, or industry, and should set up quick 
and efficient timelines, so that members can carefully follow 
its progress.
    Previous Federal surface transportation laws included 
provisions to expedite the project approval process. Due to 
lack of application and awareness of these reforms by project 
sponsors, the permitting process time horizon has not 
substantially improved. It is time to take the next step to 
ensure these tools are utilized to deliver the transportation 
benefits Americans need.
    Thank you again for the opportunity to be here today. ARTBA 
and its members look forward to working with you and your 
colleagues on these ideas and others to make the Capital 
Investment Grant program more effective and preserve its 
important contributions to the mobility of all Americans. I 
look forward to your questions.
    [Mr. Alger's prepared statement follows:]

                                 
Prepared Statement of Robert E. Alger, Chairman of the Board, The Lane 
      Construction Corporation, on behalf of the American Road & 
                  Transportation Builders Association
    Subcommittee Chairman Norton and Ranking Member Davis, thank you 
for convening today's hearing. I am Bob Alger, Chairman of the Board of 
The Lane Construction Corporation. I have spent 40 years in the 
construction industry--all with Lane. I am also proud to serve as the 
chairman of the American Road & Transportation Builders Association 
(ARTBA). I am pleased to provide this statement on the importance of 
the federal role in transit capital investment and the Capital 
Investment Grant (CIG) Program.
    Established in 1902, ARTBA is the oldest national transportation 
construction-related association. ARTBA's more than 8,000 members 
include public agencies and private firms and organizations that own, 
plan, design, supply and construct transportation projects throughout 
the country and world. The industry we represent generates more than 
$500 billion annually in U.S. economic activity and sustains more than 
4 million American jobs.
    In 1977, ARTBA added ``Transportation'' to its name to more 
accurately reflect that our members build, operate and maintain more 
than highways and bridges. Ever since, ARTBA has continued to support 
federal investment in all modes of transportation construction, 
including light rail and bus rapid transit lanes.
                           Highway Trust Fund
    In 1956, Congress created the Highway Trust Fund (HTF) to ensure 
that taxes levied on highway users, not general taxpayers, would be the 
source of funding for federal investments in highways. This includes 
the Interstate Highway System and other highways of importance to the 
national economy. In 1982, Congress and President Reagan expanded the 
HTF revenue stream and dedicated a portion of the resulting proceeds to 
support investment in mass transit improvements. Overall, for more than 
50 years, revenues from highway user taxes--including the tax on 
gasoline and diesel fuels and taxes on heavy trucks--supported most 
federal spending on highways and public transportation without 
burdening the general fund. Due to a revenue base that has not kept 
pace with growing needs, however, the HTF has been plagued by repeated 
revenue shortfall crises since 2008. Over the last 11 years, Congress 
has utilized $140 billion in General Fund transfers and budget gimmicks 
to supplement federal gas and diesel tax revenue streams that have not 
been adjusted in 25 years.
    The Fixing America's Surface Transportation (FAST) Act surface 
transportation authorization law enacted in December 2015 expires on 
September 30, 2020, less than 15 months from today. Projections from 
the Congressional Budget Office (CBO) show the HTF's Highway and 
Transit Accounts remaining stable into FY 2021. However, the Mass 
Transit Account is forecast to be near zero by the end of that year. 
The Highway Account will be approaching zero as well. As the chart 
below shows, without additional user fee revenues or more General Fund 
transfers, HTF supported programs will face draconian cuts in funding 
beginning in 2021. To pay for another five-year surface transportation 
law at current spending levels with modest inflationary adjustments and 
the $5 billion liquidity cushion the accounts require for cash 
management purposes, the HTF will need $79 billion, according to CBO 
projections.



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    While the CIG program is traditionally supported with general 
revenue dollars through the annual appropriations process, continued 
uncertainty or disruption to HTF program funding will adversely impact 
all federal surface transportation programs, including CIG. As an 
example, during the lead up to the FAST Act, such uncertainty about 
future federal investment and HTF solvency caused seven states in 2015 
to delay roughly $1.6 billion in planned transportation projects.
    Rather than repeat these past dysfunctions, the call from 
bipartisan congressional leaders and President Trump for a robust 
infrastructure initiative must be seized upon to fix the HTF revenue 
shortfall once and for all. There are a host of traditional and 
innovative user-based revenue solutions--it is time for one (or more) 
to move forward. Among the approaches ARTBA urges you to consider are:
      Raise the federal gasoline and diesel tax rates. The 
fuels tax remains the most transparent, efficient and effective 
mechanism to generate revenue for surface transportation improvements. 
The experience of 30 states that have increased their motor fuels tax 
rates since 2013 confirms these user fee increases have broad public 
support and minimal political consequences.
      Capture value from supply chain movements. The movement 
of freight throughout the nation is the embodiment of the federal 
government's constitutional responsibility to regulate and promote 
interstate commerce. To support the nation's aviation infrastructure 
system, a 6.25 percent Air Cargo Tax has been imposed since 1972 as a 
cost for moving goods via air transportation. This same concept could 
be applied to surface transportation infrastructure through either a 
commercial truck air cargo tax companion or a mileage tax.
      Initiate a one-time federal excise tax on electric 
vehicle batteries, or some other comparable mechanism that would be 
exclusively applied to alternative fuel vehicles. Fully electric motor 
vehicles exact the same wear and tear on the nation's roads as those 
powered by gas, without contributing one penny to the HTF. This 
provision would create parity in the financial support all roadway 
users provide for the infrastructure system on which their vehicles 
rely--regardless of what powers their vehicles.

    While ARTBA believes these options are the most viable in the 
short-term, we are open to any user-based, recurring revenue solutions 
that would support increased federal highway and public transportation 
investment.
             Federal Investment and Transit Capital Outlays
    Federal investment accounts for an average of 40 percent of all 
transit agency capital outlays, according to data from the Federal 
Transit Administration's National Transit Database. This includes 
spending on guideways, stations, maintenance facilities, passenger 
vehicles and other fare collection and communication equipment and 
systems.


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Over the last five years, more than 2,630 transit agencies serving 
residents in every state and in Washington, D.C. have used federal 
funds to support capital outlays and purchases. This includes major 
heavy and commuter rail systems in New York, Boston, Los Angeles, San 
Francisco, Chicago and Washington, D.C., as well as local agencies such 
as the Transit Authority of Omaha and the Thunder Bay Transportation 
Authority in Michigan.
    These transit agencies are operated by cities, counties, local 
governments, Native American tribes and state authorities. They include 
independent public agencies and even private groups, like universities. 
The services they provide connect people and communities.



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                 Source: FTA National Transit Database

    Federal investment accounts for over 80 percent of transit capital 
outlays in Kentucky, Rhode Island, Louisiana, Nebraska and Vermont. It 
represents over 40 percent of transit capital spending in 43 states and 
Washington, D.C.
    The federal role in public transportation is a vital contributor to 
the capital outlays made by the transit agencies that provide rail 
services in major metropolitan areas. Nearly 50 transit agencies 
invested a total of $13.7 billion in 2017 on capital outlays related to 
heavy rail, commuter and light rail services. Nearly half of that 
total--$6.8 billion--was to improve and expand guideway systems. 
Another $3 billion (22 percent) was invested in other construction 
activities--station upgrades and expansions, administrative buildings 
and maintenance facilities.
    Transit capital investments for heavy, commuter and light rail 
services are supported through several different FTA programs, 
including Urbanized Area Formula Grants, State of Good Repair Grants 
and Capital Investment Grants.
    The FTA discretionary Capital Investment Grants program includes 
support for the New Starts, Core Capacity and Small Starts programs. 
U.S. DOT awarded an average of $2.4 billion in annual Capital 
Investment Grants between FY 2014 and 2018, supporting an average of 28 
projects each year.
    As part of the FY 2019 and FY 2020 budgets, U.S. DOT has requested 
funds to support 10 projects each year. The funding request for FY 2019 
was just over $1 billion, of which $936 million has already been 
allocated. The U.S. DOT funding request for FY 2020 is $795 million.



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


     Source: Data compiled from U.S. DOT Annual Report on Funding 
  Recommendations and U.S. DOT reports on grant allocations. Proposed 
funding recommendations include funds for accelerated project delivery 
    and development as well as one percent for oversight activities.

                           The Cost of Delay
    The cost of delaying heavy, commuter and light rail transit 
projects can be significant and add up over time. Put simply: the 
longer improvements wait, the more they cost.
    Projects will cost more in the future as the price of materials, 
services and labor increases over time. According to FTA's Capital Cost 
Database, which compiles as-built costs for 54 federally funded transit 
projects, average costs for delivering these projects increases an 
average of five percent annually.
    This means projects that cost $100 million in 2019 would cost $163 
million to build in 2029. This annual increase is more than twice the 
rate of general inflation, which is estimated to increase at an annual 
rate of 2.4 percent over the next ten years, according to the CBO.
    Users of the system will also have to wait longer for the economic 
benefits from the increased access to services, job creation and other 
activities.



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


Source: Average annual increase of 5% a year in project costs based on 
            FTA's 2016 version of the Capital Cost Database.

          Case Study: LYNX Blue Line Project in Charlotte, NC
    This project, constructed by The Lane Construction Corporation, 
involved the civil work for construction of the Blue Line Extension 
(BLE) Segment B/C in Charlotte, North Carolina. The Project extends 
from north of the Old Concord Road Station to Wallis Hall on the 
University of North Carolina-Charlotte campus. The work included 
grading, drainage, erosion control, bridges, arterial roadways, 
retaining walls, traffic control, traffic signal, water main and 
sanitary sewer installation and related works. The track work for 
Segment B/C was performed by a different contractor under a separate 
contract with the owner.

 
 
 
Anticipated Start Date:                                                                                 4/15/14
Anticipated Substantial Completion Date:                                                                1/19/17
Original Duration:                                                                                     1,010 CD
Actual Start (NTP):                                                                                     5/14/14
Actual Substantial Completion:                                                                          4/18/18
Actual Duration:                                                                                       1,435 CD
Projected Cost:                                                 $119,051,742.33 (Includes Contingency Amount of
                                                                                                  $8,236,68.07)
Actual Cost:                                                                                    $147,311,459.90
 

    The major obstacle this project faced was utility relocation delays 
that delayed the work. This resulted in a contract amendment for 
acceleration costs in the amount of $21,750,000.00 and adjustments to 
the Contract Times and Intermediate Contract Times. Another obstacle on 
this project was the dispute resolution process drafted by the owner. 
The process adopted was a hybrid between the owner's own claim/dispute 
resolution process and the North Carolina Department of 
Transportation's claim/dispute resolution process. The two processes 
did not completely align causing confusion and issues with timely 
resolution of disputes.
    This example demonstrates that the cost of project delays extends 
beyond time value of money to include unforeseen issues. In essence, 
the market prices delay regardless of their cause.
  Remove Unnecessary Regulatory Burdens from Transit Project Delivery
    The transportation construction industry must directly navigate the 
regulatory process to deliver transportation improvements. As such, 
they have first-hand knowledge of the specific federal burdens that can 
and must be alleviated.
    ARTBA recognizes regulations play a vital role in protecting the 
public interest in the transportation project review and approval 
process. They provide a sense of predictability and ensure a balance 
between meeting our nation's transportation needs and protecting vital 
natural resources. These goals, however, do not have to be in conflict. 
The most successful transportation streamlining provisions have been 
process-oriented and find a way to fulfill regulatory requirements in a 
smart and more efficient manner.
    However, in recent years the rulemaking process has morphed in 
certain instances from something intended solely to protect the public 
interest into a tool for achieving diverse policy and political 
objectives, many of which are largely unrelated to improving our 
transportation infrastructure. Furthermore, this process has routinely 
ignored the affected interests, while often dismissing or undervaluing 
the project cost increases, delays and compromises in safety which can 
result.
    According to a report by the U.S. Government Accountability Office 
prior to enactment of the Moving Ahead for American Progress in the 
21st Century (MAP-21) surface transportation law, as many as 200 major 
steps were involved in developing a transportation project, from the 
identification of the project need to the start of construction. This 
process involves dozens of overlapping state and federal laws, 
including: the National Environmental Policy Act (NEPA); state NEPA 
equivalents; wetland permits; endangered species implementation; clean 
air conformity; and additional regulatory hurdles not related to the 
environmental review and approval process.
    Project delays carry severe financial consequences. According to a 
2016 report by the Texas A&M Transportation Institute, project delay is 
estimated to cost $87,000 per month for small projects (e.g., 
reconstruction), $420,000 per month for medium-sized projects (e.g., 
widening) and $1.3 million per month for large projects. Both political 
parties recognized that the current system was simply too long and too 
expensive for delivering transportation projects that improve mobility 
and safety. As such, finding meaningful ways to expedite this process 
has been a congressional priority for more than 15 years.
    Regulatory reform is an essential part of any effort to ensure the 
federal government, through the CIG program, utilizes resources in the 
most efficient manner possible. Reducing unnecessary delays in the 
project delivery process will allow allocated funds to have the maximum 
possible impact in delivering projects. With that in mind, ARTBA 
recommends the following enhancements to the project delivery process 
be considered by this committee as the FAST Act reauthorization process 
moves forward.
        Emphasize Utilization of Existing Project Delivery Tools
    The past four federal surface transportation reauthorization laws 
have included significant provisions to expedite the review and 
approval process for transportation improvement projects. While these 
efforts have intended to cut red tape while preserving environmental 
protections, the permitting process time horizon has not substantially 
improved. There are several reasons for this outcome, but one major 
cause is the lack of utilization and/or awareness of these reforms by 
project sponsors.
    Examples of these tools include:
      The option for a state Department of Transportation (DOT) 
to request the U.S. DOT to impose a two-year time limit on completion 
of an Environmental Impact Statement (EIS) if the process has already 
taken at least two years (from the MAP-21 reauthorization law);
      Establishment of U.S. DOT as the lead agency for 
coordinated project reviews, although the department may not set a 
mandatory schedule for other agencies to follow (from MAP-21 and the 
FAST Act reauthorization laws); and
      A provision calling for planning documents to be used in 
the NEPA process ``to the maximum extent practicable and appropriate,'' 
rather than generating the same or similar material all over again 
(from the FAST Act reauthorization law).

    Existing process reforms should be the new standard. Rather than 
the discretionary approach taken over the past 20 years, Congress 
should require their use. However, to preserve flexibility, states 
should be able to opt out of using reforms on a project if they provide 
U.S. DOT with a written explanation of their determination.
    The more state and federal agencies use these reforms, the greater 
their impact will be. The default use of these reforms will better 
achieve Congress' original intent in enacting them, provide a more 
accurate measure of their effectiveness, and help identify areas for 
further improvements in project delivery.
              Require Shorter, More Concise NEPA Documents
    The EIS is a resource for affected members of local communities to 
gain information about proposed projects. However, current EIS 
documents can be so long and complex that even many lawyers have 
difficulty understanding them, much less community members without any 
prior training in environmental law or consulting.
    Congress should direct U.S. DOT to survey current initiatives at 
improving clarity in NEPA documents (including NEPA ``plain language'' 
efforts within the current administration and a similar department-wide 
initiative within U.S. DOT dating back more than 20 years) and set 
standards to reduce unnecessary length and complexity. Improved EIS 
documents would reduce delays in the NEPA process by clearly 
communicating the impacts of a proposed project and how to mitigate 
them.
               Establish Clear Timelines for NEPA Reviews
    Past reauthorization bills have set enforceable deadlines for 
permitting decisions. However, there remains no set legislative time 
limit for the completion of NEPA documents. When initiating a NEPA 
review, project planners have no sense of when the process is going to 
be completed. Statutorily requiring timelines would add predictability 
to the NEPA process and allow project planners to more accurately plan 
schedules for environmental review. The lead agency and project sponsor 
should determine a realistic time frame for the project early in the 
planning process, allowing for project-specific flexibility and 
external agencies to fulfill the obligations with a clear deadline for 
all involved parties.
  Educate Project Participants on the Use of Dispute Resolution Boards
    Timely decision-making and claims resolution are key factors in 
keeping transportation construction projects on schedule. Some states 
have used dispute resolution boards (DRBs) as part of their contract 
administration strategies. While procedures vary from state to state, 
generally these entities include expert members recommended by the 
project owner and contractor or industry. A DRB can be specific to a 
project, with the members carefully following its progress, meeting 
regularly and resolving issues as needed. To cite one example, the 
transportation department and industry in Florida highly recommend this 
approach.
    Congress should direct U.S. DOT to educate state transportation 
agencies and the industry on the use of dispute resolution boards for 
appropriate projects.
     Allow for a De Minimis Waiver of ``Buy America'' Requirements
    The Buy America law, dating to the early 1980's, requires that 
steel or iron components ``permanently incorporated'' in federal-aid 
highway and transit projects be manufactured in the United States, 
subject to possible waivers and exemptions. Some interpretations of Buy 
America have required that contractors provide extensive documentation 
and certification for the smallest and least expensive project 
components. In these cases, the administrative costs and potential 
related delays can easily outweigh the slight economic benefits of 
employing domestic manufacturers. Codifying a waiver for these products 
would save on these compliance costs, while preserving and reaffirming 
the law's coverage of core project materials and components, which 
ARTBA supports.
    Congress should waive Buy America requirements for ``commercially 
available off-the-shelf'' (COTS) items permanently incorporated in 
federal-aid highway and transit projects. A COTS item has been defined 
as any item manufactured product incorporating steel or iron components 
(with some exceptions) that is:
    1.  Available and sold to the public in the retail and wholesale 
market;
    2.  Offered to a contracting agency, under a contract or 
subcontract at any tier, without modification, and in the same form in 
which it is sold in the retail or wholesale market; and
    3.  Broadly used in the construction industry.

    This waiver should not be intended to preempt or compromise project 
specifications or quality standards relating to these items. Exempting 
COTS items from Buy America requirements will ensure the law protects 
domestic manufacturing interests while not causing project cost 
increases and delays relating to small, inexpensive components.
                       Additional Recommendations
    In addition to regulatory reforms, we ask you to consider numerous 
programmatic changes to the CIG program, including:
      Transit capital grants programs should be limited to true 
capital investments--i.e. ones that have an amortized useful life. They 
should not be used to offset more routine transit system operating 
expenditures under the catch all of preventive maintenance. (For 
example, rolling stock has a 12-15-year life for a bus and a 30+ year 
life for a rail car. A bricks and mortar capital project should have a 
useful life of 25-40 years. Anything that does not meet such 
requirements should not be funded with federal capital grant dollars.)
      States and localities should be required to maintain a 
minimum level of effort to qualify for federal transit grants. Many 
transit systems depend solely on a combination of fare box revenue and 
federal assistance to operate their systems, with little or no state/
local contribution. States and localities must do their fair share of 
funding their operating, maintenance, and capital needs before they 
turn to the federal government for funding.
      FTA must ensure that projects are completely scoped out 
and the involved state/locality has fully approved the project to 
reduce mid-project re-scopings and costly change orders which can add 
cost and extend schedules.
      FTA project approvals and milestones are handled 
differently in different parts of the country by FTA Regional Offices. 
Uniform, consistent and transparent approval processes must be applied 
across FTA regions--and across DOT modes.
      FTA should be granted the same flexibility as FHWA by 
being allowed to extend ``contract authority'' to projects so they can 
proceed while routine approvals move forward.
      Capital funding comes from a variety of state and local 
sources in addition to the federal contribution. Unlike most highway 
projects that have an 80-90 percent federal share, in many cases, the 
CIG funding is a minority stake of the total project costs. 
Nonetheless, federal oversight is applied to the entire project, 
limiting flexibility in the construction of parts of a project not 
financed with federal funds. Only those phases of the project that are 
federally funded should be subject to federal oversight.
      Historically, transit projects have been allowed to use 
Federal Loan Programs such as TIFIA and RRIF as local match. Recent 
denial of such flexibility has delayed some critically important 
projects, which only increases their eventual cost and schedule. Since 
the loans are repaid with local dollars, they should be allowed to be 
counted as local match.

    These program changes would help ensure a consistent national focus 
for CIG projects and maximize limited federal resources through 
improved efficiency and better leverage these dollars with state, local 
and private funds.
                               Conclusion
    America's transportation infrastructure, including its public 
transportation and roadway system, is in dire need of repair. It is 
clear that we must invest more capital in our transportation systems 
and that goal cannot be achieved without a permanent revenue solution 
to ensure the HTF can support this needed investment growth.
    There has been a lot of talk about a federal infrastructure 
initiative since the 2016 presidential campaign. While this discussion 
is long overdue and much needed, there are two key things you need to 
know:
      An HTF solution must be the cornerstone of any such 
initiative. Otherwise we risk taking one step forward and two steps 
back.
      It is time to stop talking and start acting.

    Thank you for the opportunity to be here today Chairman Norton and 
Ranking Member Davis. ARTBA and its members look forward to working 
with you and the rest of your colleagues on these ideas as the 
subcommittee develops and enacts a long-term Highway Trust Fund fix and 
implements policy changes that enable much-needed Capital Investment 
Programs as well as other highway, bridge and public transportation 
improvements to move forward on time and at budget.
    The travelling American public deserves no less.

    Ms. Norton. Thank you, Mr. Alger, for that very important 
testimony. I just want to say, before I move on to Mr. Gerend, 
that it is interesting and important to note that the first 
part of your testimony was on fixing the Highway Trust Fund, 
and I think a well-placed critique of Congress for not doing 
so, even though this is about the CIG program.
    Nevertheless, it seems to me that that is an admonition you 
were well-placed to give Congress, and I appreciate your 
suggestions on the user fee raise. That is where there has been 
disagreement between my colleagues on the other side and on 
this side. I couldn't agree more on electric vehicles. You had 
a third one.
    They seemed all very helpful. I just had to note that 
because the fact that you detoured from your testimony to 
discuss the Highway Trust Fund I think sends a message to this 
committee how important it is to get something done on raising 
the gas tax and moving along. Hasn't been done in more than 20 
years.
    I am going to ask Mr. Tom Gerend if he would now offer his 
testimony.
    Mr. Gerend. Good morning. Madam Chairman, members of the 
committee, and members of our Kansas City regional delegation, 
good morning. Thank you for having me. My name is Tom Gerend, 
and I have the honor of serving as the executive director of 
the Kansas City Streetcar Authority in Kansas City, Missouri.
    Today I come before you on behalf of our regional 
partnership to share a bit about our local history, our 
experience, and our aspirations and suggestions related to the 
Capital Investment Grant program, in the hopes that these 
comments prove insightful in your committee deliberations and 
support our collective efforts to make these programs, and more 
importantly the resulting projects, the best they can possibly 
be.
    Our Kansas City story is not unique. It is one built on a 
history of regional collaboration and strong and productive 
local and Federal partnerships. Thanks to great work by our 
friends of the city of Kansas City, Missouri, Mayor Sly James, 
the city council, our Streetcar Authority board of directors, 
and the Kansas City Area Transportation Authority, and my good 
friend Robbie Makinen, we have now ignited a transit 
renaissance that is reshaping and reconnecting our city like 
never before.
    So why is this important to Kansas City and other cities 
across the country? It is incredibly important to us because we 
believe there is no more impactful way of connecting people to 
opportunity and building livable, sustainable, and prosperous 
cities for the next 50 years than through coordinated and well-
executed public transportation investment.
    Our Kansas City Streetcar starter line is an example of 
this success, which opened in 2016 thanks to a Federal 
partnership outside of the CIG program with surface 
transportation, and then TIGER funds.
    In 3 short years of operations, the $100 million investment 
has produced more than $3 billion in economic activity, a 30-
to-1 return on our collective investments, has attracted more 
than 30 percent of our residents now to public transportation 
than previously existed, and now over 6 million trips to date 
have redefined how residents, visitors, and employees 
experience and move around our city.
    But as strong as our regional partnerships have been, they 
have only been successful in delivering projects due to the 
ability and opportunity to leverage well-placed and adequately 
funded Federal Transportation Administration programs that have 
made these projects a reality.
    Without programs like the Capital Investment Grant program, 
these projects would simply not be possible. Since 2005, we 
have successfully funded and advanced three small bus rapid 
transit projects through the CIG program, and we have one 
streetcar extension that is now moving through the New Starts 
pipeline.
    Our most recent grant award was for Prospect MAX BRT, which 
Acting Administrator Jane Williams was kind enough to come to 
for the groundbreaking in October of this past year, and that 
project is now under construction and moving towards opening.
    This is all to say we have some experience in Kansas City 
navigating the CIG program. So I am pleased to be here today to 
share a few points.
    The first point, the importance of the program itself. as I 
previously mentioned, the existence of a well-supported and 
adequately funded CIG program is critical to the advancement 
and modernization of our transit system in Kansas City and 
systems across the country.
    Without CIG and other Federal programs, an active and 
engaged Federal partnership, these most prominent and impactful 
transportation projects constructed really in our city's 
history would not have been possible, and the economic 
opportunity, the investment in the community revitalization, 
and the benefits would have been lost.
    Secondly, the CIG program is rigorous, but we have received 
strong support from the FTA, and specifically our region 7 
office, at every step. We thank the current Acting 
Administrator Williams and the region 7 administrator, Mokhtee 
Ahmad, for the great support. Without their efforts, we would 
not have the success that we have had over the course of the 
years.
    And not surprisingly, moving through complicated programs 
like CIG, which are ever-evolving, provide some revelations and 
some learnings at every step.
    So a few points in closing that I would touch on as we 
think about how to improve the program together as we move 
forward. We would support the administration's efforts on 
process streamlining. We have advanced successfully projects 
outside of CIG that we think would have cost significantly more 
resources and money and time if they would have been advanced 
through the CIG program. There are opportunities, there are 
successful projects, that we think serve as an example for how 
we can in fact do this.
    We think the CIG thresholds and categories, frankly, could 
be reevaluated. There is an opportunity to reintroduce the Very 
Small Starts Program, specifically targeting and allowing small 
projects the ability to move quickly through the process.
    And then, lastly, project due diligence. There is an 
incredible burden placed on local government to advance due 
diligence on the front end of these processes, with local 
funding at risk prior to acknowledgment of a Federal grant. So 
opportunities to formalize a Federal partnership earlier in 
their process would no doubt make it easier on local 
governments to bring good projects, as well as to fund the 
local contribution that is necessary to see their projects to 
the end.
    In closing, I want to thank you for your interest and 
support of the CIG program, and I want to lift up those on the 
committee and FTA that are doing the hard work to make this 
program the best it can be. These programs and these projects 
benefit communities like Kansas City greatly.
    We thank you immensely for your support, and I look forward 
to answering any questions you may have. Thank you.
    [Mr. Gerend's prepared statement follows:]

                                 
   Prepared Statement of Tom Gerend, Executive Director, Kansas City 
                          Streetcar Authority
    Honorable Chairman DeFazio, Ranking Member Graves, members of the 
committee, and members of our Kansas City regional delegation, good 
morning.
    My name is Tom Gerend and I have the honor of serving as the 
Executive Director of the Kansas City Streetcar Authority, in Kansas 
City, Missouri. Today I come before you on behalf of our regional 
partnership to share a bit about our local history, our experience, and 
our aspirations and suggestions related to the Capital Investment Grant 
Program, in the hope these comments prove insightful in your committee 
deliberations and support our collective efforts to make these 
programs, and more importantly, the resulting projects, the best they 
can possibly be.
    Our Kanas City story is likely not unique, it is one built on a 
history of regional collaboration and strong and productive local and 
federal partnerships. Thanks to great work by our friends at the City 
of Kansas City Missouri, Mayor James and City Council, our Streetcar 
Authority Board of Directors, and the Kansas City Area Transportation 
Authority, we have ignited a transit renaissance that is now reshaping 
and reconnecting our city and our region like never before.
    Why is this important to Kansas City? This is incredibly important 
to us because we believe there is no more impactful way of connecting 
people to opportunity and building a livable, sustainable, and 
prosperous city for the next 50 years than through coordinated and well 
executed public transit investments. Our KC Streetcar starter line 
which opened in 2016 is an example of this impact. In three short years 
of operation, the $100m investment has produced more than $3B in 
economic activity, a 30 to 1 return on our investment, has attracted 
30% more of our city residents to public transportation, and with over 
6 million trips to-date has redefined how residents, visitors and 
employees experience and move around our City. Perhaps most 
significantly, the unique model was built upon a revenue capture 
district, and this district surrounding our streetcar route has seen 
sales tax revenue grow by over 60% since the start of operations, 
benefiting downtown business while supporting a sustainable revenue 
stream for operations and maintenance of the system in the years to 
come.
    As strong as our regional partnership is however, it has only been 
successful in delivering projects due to the ability and opportunity to 
leverage well-placed and adequately funded Federal Transit 
Administration programs that have made these projects a reality. 
Without programs like CIG these projects would not be possible.
    Some indicate the Capital Investment Grant Program simply is not 
accessible to small and mid-sized regions. Yes, it can be challenging, 
costly, and a long road but I am here today as evidence that this claim 
isn't entirely true.
    Kansas City, Missouri is currently home to 488,000 residents and 
our Kansas City region is home to 2.1 million people. Since 2005 we 
have successfully funded and advanced three bus rapid transit projects 
through the CIG program, one streetcar project thanks to federal TIGER 
and Surface Transportation Program support, and a streetcar extension 
project currently in the New Starts pipeline, with the most recent 
grant award for Prospect MAX BRT, which acting administrator Jane 
Williams was kind enough to come to for the groundbreaking in October 
of last year. This project is now under construction and moving towards 
opening later this year.
    Kansas City's major capital transit project list includes:

 
 
 
2005                                  KCATA Main Street MAX    CIG, New Starts                             $21m
                                       BRT
2009                                  KCATA Troost Ave. MAX    CIG, Very Small Starts                    $30.6m
                                       BRT
2016                                  KC Streetcar Starter-    TIGER, STP, CMAQ                           $102m
                                       Line
2018                                  KCATA Prospect Ave MAX   CIG, Small Starts                         $55.8m
                                       BRT
2024                                  KC Streetcar Main        CIG, New Starts                 $330m (PD Phase)
                                       Street Extension
 

    This is all to say we have had some experience and have learned a 
great deal navigating the CIG program so I am pleased to be here today 
to share our collective learnings and I will start with two overarching 
facts.
    Importance of Federal CIG Program--The existence of a well-
supported and adequately funded CIG program is absolutely critical to 
the advancement and modernization of our transit systems in Kansas City 
in addition to systems across the country. Without CIG, other federal 
programs, and an active and engaged federal partnership the most 
prominent and impactful transit projects constructed in Kansas City's 
history would not have happened, and the economic opportunity, 
investment, community revitalization, and benefits that have been 
realized from these projects would have been lost.
    Strong support from FTA and Region VII at every step--Yes, the CIG 
program is rigorous, demanding, and complicated but at every step our 
Federal Transit Administration partners and staff in Region VII have 
been helpful and doing their very best to guide our region through the 
process. We thank current acting administrator Williams and Region VII 
Administrator Mokhtee Ahmad for your great support.
    Not surprisingly, complicated programs like CIG are ever-evolving 
and each pass at the program reveals a slightly different experience 
and learning. The four take aways that I will touch on and share with 
you in more detail relate to the areas we feel most strongly about 
helping to improve, and they include; 1) process stream-lining, 2) 
program thresholds and categories, 3) project due-diligence demands, 
and 4) incenting innovation in project finance and delivery.
    1.  Opportunity for Process Stream-lining--We understand the need 
for a well thought-out due diligence process to ensure the CIG process 
yields strong projects that can be delivered as promised but our belief 
is work can be done to make this process less burdensome, less time 
consuming, and less costly, particularly for projects on the lower end 
of the cost spectrum. As an example our Streetcar starter-line, 
successfully implemented outside of the CIG program with support from 
TIGER and Surface Transportation Funding, was completed from planning 
to operations in record time, in just five years, and is a 
demonstration that this is possible. We estimate that had we proceeded 
through CIG this would have added 2 years and 20% in additional cost to 
this project potentially making it unfeasible.

        Our concern here is one size does not fit all. As an additional 
example the current structure of the program holds our proposed 
streetcar project, a relatively straight forward extension to an 
existing system, to the same standards and expectations as multi-
billion dollar projects that naturally bring with them more complexity 
and risk. In all cases the rigor of the CIG process is unlike any other 
federal transportation program we have experienced and an order of 
magnitude more complicated than a similarly funded roadway or 
interchange projects that are routinely advanced across our region.

    2.  CIG Program Thresholds and Categories--There is a need and 
opportunity to better align the program categories, and their related 
requirements, with the complexity and risk of respective projects.

      I.  We would suggest and propose a reintroduction of a Very Small 
Starts Program (Under $75m) to allow low cost projects with high 
benefits, located primarily within existing right-of-way, to advance 
rapidly through the process with reduced reporting and documentation 
requirements. This model has been proven successful with our region's 
Troost BRT project and would no doubt be advantageous and appropriately 
scaled for other projects in the pipeline.

      II.  We would suggest expanding the Small Starts project category 
($75-$500m), and propose eliminating the $100m federal allocation cap 
on Small Starts Projects. The existing $300m project cost threshold 
coupled with the $100m federal allocation cap creates a dynamic where 
projects costing between $250m and $300m are actually encouraged to get 
more expensive and move to New Starts in order to by-pass the $100m 
federal cap and pursue more advantageous cost-share commonly found in 
New Starts grant agreements.

  Example of local project sponsor benefiting by increasing the cost of
                                 project
 
 
------------------------------------------------------------------------
        $275m Small Starts Project            $300m New Starts Project
$100m Federal (max allowed)         36.4%   $150m Federal           50%
$175m Local                         63.6%   $150m Local             50%


      III.  Modify New Starts and raise threshold to only include 
projects over $500m. Very few New Starts projects actually fall between 
the $300m and $500m cost range and those that do more appear to more 
closely align with project characteristics and risks found in Small 
Starts Projects. Once again one size does not fit all and aligning the 
actual project characteristics to the related due diligence 
requirements should be an important objective to ensure fair and 
appropriately placed requirements.

    3.  Project Due-Diligence is increasingly costly and time 
consuming. Again, we recognize and appreciate the need for a sufficient 
due-diligence process for all CIG categories and applaud FTA for doing 
their very best to work within the rules of the program to move 
projects expeditiously, but as currently structured, the process places 
excessive financial burden on project sponsors, who are expected and 
required to spend millions of local dollars at risk prior to a federal 
grant commitment. For our pending streetcar application, it is possible 
we could be betting $20m or more in local funds on the hope of a 
federal grant award at the end of the process. This is a hard pill for 
strapped local governments to swallow and it impedes quality projects 
from advancing through the process. Two recommendations that we would 
raise for your consideration that would aid local sponsors in managing 
this burden include;

      I.  Consideration of project development/engineering funding that 
would set aside a small percentage of program resources for awards to 
eligible project sponsors to support FTA required due-diligence. This 
would formalize a low-risk but meaningful local-federal partnership 
earlier in the process and make it easier for local governments and 
agencies to justify front end costs associated with the process when 
the anticipated award date of FFGA is unknown.

      II.  Re-evaluation of requirements related to entry into 
Engineering. This approval stage within the New Starts program is 
peculiar as it currently stands because it includes detailed 
requirements related to organizational capacity, risk assessments, 
financial commitment and numerous other requirements prior to the 
completion of Project Development and prior to any federal commitment 
for project funding. Deferring some or all of these requirements beyond 
``engineering approval'' to serve as prerequisites to a Full Funding 
Grant Agreement would allow projects sponsors time to fully leverage 
the ``engineering phase'' to inform project plans and strategies while 
still allowing FTA the ability to require satisfactory completion of 
these requirements prior to full funding grant agreement. Our pending 
streetcar expansion project is an example of this dynamic at play. We 
have secured a dedicated voter approved tax (with a 70-30 margin) and 
have secured local approvals and adopted ordinances committing to 100% 
of local match and bonding obligations. But even with these significant 
actions there are still some questions if these action are sufficient 
to demonstrate the local financial commitment required for entry into 
Engineering, again an approval to proceed to the next phase of the 
process that is still absent federal commitment and federal risk. 
Projects demonstrating meaningful progress and real local commitment 
should be promoted and advanced through the process.

    4.  Incenting Innovative Finance and Project Delivery Models--
Projects like our pending streetcar extension that will bring newly 
committed and dedicated funding to public transit investment and 
support 100% of the local share of project costs, including operations 
and maintenance, through a revenue-capture district should receive 
special consideration. This is a one-time local-federal partnership, 
designed to launch an impactful project that otherwise would not 
happen, and after which will be supported 100% by newly captured and 
self-generated local revenues. This is the future for how, together, we 
can grow the impact of your federal investment and leverage the 
economic return these projects create.

    In closing, I want to thank you for your interest and support for 
the CIG program and I want to lift up those on the Committee and at FTA 
that are doing the hard work to make this program the best it can be. 
These projects greatly benefit communities, like Kansas City, that they 
serve. We thank you immensely for your support and I look forward to 
answering any questions you may have. Thank you.


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                    KC Streetcar_Starter-line, 2017

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

   KC Streetcar_Main Street Extension Rendering, New Starts, Project 
                              Development

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

         KC Streetcar_Starter-Line_new hotel under construction

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

 KC Streetcar_Starter-Line_Crowd boarding at Kansas City Union Station 
                             Streetcar Stop

    Ms. Norton. Thank you, Mr. Gerend.
    Mr. Paul Skoutelas, president and CEO of American Public 
Transportation Association.
    Mr. Skoutelas. Good afternoon. Chairwoman Norton, Ranking 
Member Davis, and members of the Subcommittee on Highways and 
Transit, thanks for this opportunity to testify today on the 
Capital Investment Grants, which are critically important to 
help growing communities address their mobility needs and to 
expand public transit throughout our Nation.
    My name is Paul Skoutelas. I am the president and chief 
executive officer of APTA, the American Public Transportation 
Association. We are the only association in North America that 
represents all modes of public transport. Our 1,500 public and 
private-sector member organizations speak with one voice in 
terms of making the case for public transit in the industry.
    Capital investment grants are a vital source of capital 
funding to expand our public transit services. Over the past 
decade, more than one-half of all of the States have benefitted 
from CIG projects. The economic benefits of projects funded 
through CIG are very wide-ranging. In addition to the critical 
local economic benefits of CIG projects themselves, the 
vehicles, the equipment, the supplies that comprise these 
projects are made in America and States all across the Nation.
    As an example, I point to the rail and bus manufacturing 
schematics that are appended to my written testimony. These 
schematics show how dozens of States contribute to each railcar 
that is manufactured in America and to each bus that is made as 
well. Capital investment grants are a critical tool to 
addressing the mobility needs of our communities and to helping 
them grow and grow the national economy.
    Unfortunately, over the past two decades, we have seen both 
Congress and FTA have layered additional requirements on the 
CIG process that have resulted in a bureaucratic maze. As a 
result, CIG requirements are vastly more complex, more time-
consuming, and more burdensome than they need to be. And there 
are more requirements of these projects than comparable large 
U.S. DOT transportation discretionary grant programs.
    Moreover, these burdensome requirements cause significant 
delay in project approvals, which result in considerable 
increases in project costs. Today a CIG project sponsor--
typically a transit agency--faces almost 60,000 words of 
Federal statutory law, regulations, and administrative guidance 
that is required under the program.
    In comparison, a Federal-aid highway INFRA grant applicant 
faces less than one-quarter of the statutory language and no 
specific regulations. The bureaucratic maze is not only a 
burden for CIG project sponsors, but also affects local 
decisionmaking as communities must then weigh whether to 
proceed with a CIG transit project with all of its requirements 
or, alternatively, to build perhaps a highway project that has 
much more limited requirements.
    Although we have got a great partnership with FTA, this is 
an area of great concern for us and some disagreement. And I 
want to say for the record that we have a terrific partnership 
with the FTA and with Administrator Williams. We work together 
hand in hand on a daily basis, as do our members, but this is 
an area of CIG that we have a striking difference of opinion.
    With regard to funding, while we are encouraged that the 
administration expressed support this year for the CIG program 
and the President's budget, we strongly urge Congress to 
provide funding at or above the fiscal year 2019 enacted level 
of $2.6 billion. Additionally, we encourage Congress to 
continue to require FTA to obligate these funds. Of the $2.6 
billion that Congress provided for Capital Investment Grants in 
fiscal 2019, more than one-half, some $1.3 billion, has not yet 
been even allocated, let alone obligated, to specific projects.
    I can assure you there is no shortage of interest in these 
vital grants. There are 10 New Start and Core Capacity projects 
under full funding grant agreements today, and 53 additional 
projects in the CIG pipeline, in 20 different States seeking 
$27 billion of CIG funds.
    We urge FTA to move forward as expeditiously as possible to 
use the available fiscal 2018 and 2019 funds to invest in these 
critical projects. Many APTA members have expressed concerns 
that FTA is strongly encouraging significant local overmatch of 
the Federal CIG share, particularly for New Start projects.
    These project sponsors believe that DOT will not move 
forward with their New Start project unless the project sponsor 
accepts significantly less than a 50-percent CIG share. This 
significant overmatch can require projects in a pipeline to 
redo their budgets, causing delays, and could in fact 
discourage project sponsors from seeking the CIG grant at all.
    CIG overmatch can also affect local community decisions, as 
I mentioned a moment ago, the decision between do I invest 
through the myriad of requirements for a CIG project, or do I 
look for another alternative?
    APTA is also concerned with the policies outlined in FTA's 
2018 Dear Colleague letter. Again, as we have a great 
partnership with FTA, this is an area that we regret the 
agency, FTA, did not consult with the public transit industry 
prior to making these significant policy changes.
    Their Dear Colleague letter has created considerable 
confusion among project sponsors regarding certain policies. 
For instance, sponsors remain confused on DOT's new treatment 
of TIFIA. To eliminate that confusion, we urge Congress to 
clarify that TIFIA loans repaid with non-Federal funds are 
indeed local match. That shouldn't be an issue of contention.
    At the time of the Dear Colleague letter, FTA also 
announced changes to its evaluation of CIG projects. 
Specifically, FTA now conducts risk assessments much earlier in 
the process.
    Prior to joining APTA as president and CEO last year, 2018, 
I was directly involved in delivering capital investment 
projects on both the public side and the private-sector side. 
Conducting risk assessments too early in the process can be 
problematic because at that point project sponsors have not yet 
performed an adequate level of design and engineering to fully 
calculate the likely risks.
    Similarly, increasing the probability threshold percentage 
requires project sponsors to have large amounts of local 
funding on hand as project contingencies. As many local elected 
officials know and transit governing members know, it is 
difficult to find the extra dollars oftentimes.
    Moreover, given that the Federal share is established upon 
entry into engineering, significant costs of contingencies and 
the risk and responsibility are pushed to the project sponsor. 
Thus, we urge Congress to reverse the Dear Colleague and risk 
assessment changes.
    Finally, APTA strongly urges the committee to conduct a 
zero-based review of the CIG program, to assess all statutory, 
regulatory, and administrative requirements through what I 
would describe as a two-part test. First, does the requirement 
strengthen the CIG program and ensure that beneficial projects 
across the country are delivered in a timely manner? Second, 
does the requirement protect the taxpayer's interest in funding 
good projects?
    We strongly believe that dozens of current CIG requirements 
do not meet this test. In addition to a zero-based review, we 
recommend four additional policy reforms to strengthen the CIG 
program.
    First, establish a CIG pipeline dashboard where FTA must 
report on the progress and status of its projects at each 
milestone, so that stakeholders, decisionmakers, elected 
officials, and the public understand how these projects are 
moving through the pipeline.
    Second, codify a fixed Federal share to provide certainty 
for project sponsors for CIG projects.
    Third, clarify the TIFIA loans, as I mentioned, are indeed 
local match.
    Fourth, reverse the 2018 risk assessment changes, which 
really do not add to project certainty and create more delays.
    On behalf of APTA, I thank you for giving us the 
opportunity to testify and to share our thoughts on Capital 
Investment Grants. We look forward to continuing to work with 
this committee, with the FTA, and the industry, to strengthen 
the CIG program and ensure that these critically needed public 
transportation improvements are delivered in a timely manner.
    I look forward to answering any questions you may have. 
Thank you.
    [Mr. Skoutelas' prepared statement follows:]

                                 
Prepared Statement of Paul P. Skoutelas, President and Chief Executive 
          Officer, American Public Transportation Association
                              Introduction
    Chairwoman Norton, Ranking Member Davis, and Members of the 
Subcommittee on Highways and Transit, on behalf of the American Public 
Transportation Association (APTA) and its more than 1,500 public- and 
private-sector member organizations, thank you for the opportunity to 
testify on ``Oversight of the Federal Transit Administration's 
Implementation of the Capital Investment Grant Program''.
    My name is Paul Skoutelas, and I am the President and Chief 
Executive Officer (CEO) of APTA, an international association 
representing a $71 billion industry that employs 430,000 people and 
supports millions of private-sector jobs. We are the only association 
in North America that represents all modes of public transportation--
bus, paratransit, light rail, commuter rail, subways, waterborne 
services, and intercity and high-performance passenger rail.\1\ Public 
transportation not only spurs economic growth, but reduces congestion, 
improves air quality, saves time and money, and advances an equitable 
and better quality of life for our communities.
---------------------------------------------------------------------------
    \1\ APTA members include public transit systems; planning, design, 
construction, and finance firms; product and service providers; 
academic institutions; transit associations; and state departments of 
transportation.
---------------------------------------------------------------------------
    Prior to joining APTA in January 2018, I served as national 
director of WSP USA's Transit & Rail Technical Excellence Center where 
I provided strategic direction on public transit and rail projects. 
Earlier in my career, I was CEO at two major public transportation 
agencies: the Port Authority of Allegheny County in Pittsburgh, 
Pennsylvania, and the Central Florida Regional Transportation Authority 
(LYNX) in Orlando, Florida. At both WSP and the public transit 
agencies, I was directly involved in delivering Capital Investment 
Grant (CIG) projects.
 Capital Investment Grants Addressing the Mobility Demands of Growing 
                              Communities
    APTA strongly supports the CIG program. Capital Investment Grants 
provide critical investments for new and expanded subways, light rail, 
commuter rail, streetcars, and bus rapid transit (BRT), among others.
    As illustrated on the following page, over the past decade, more 
than one-half of all states have benefited from the CIG program or are 
in the current pipeline. From BRT projects in Michigan and Oregon, to 
commuter rail projects in Texas, to heavy rail projects in Illinois, 
and light rail projects in Arizona, Utah, and California, public 
transportation projects that are funded through the CIG program are an 
essential component of addressing the mobility demands of growing 
communities.
                  CIG Projects Within the Last Decade
                  
                  
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                          Growing the Economy
    The economic benefits of these projects reach a far greater span 
than just the project location itself. A CIG project in California may 
be receiving vehicles, parts, or materials from a supplier in Alabama, 
Arkansas, Georgia, or Wisconsin. These projects also represent 
thousands of construction jobs, transit equipment manufacturing jobs, 
and wider multiplier effects on jobs associated with parts and 
materials suppliers and worker spending. Moreover, after a new transit 
line is constructed and operational, there are ongoing, permanent 
economic growth and development impacts enabled by the transportation 
improvements and associated economic productivity gains.\2\
---------------------------------------------------------------------------
    \2\ American Public Transportation Association, Economic 
Implications from Proposed Public Transportation Capital Funding Cuts, 
April 2017.
---------------------------------------------------------------------------
    As a result, every $1 billion invested in public transportation 
creates or sustains 50,000 jobs.\3\ The enclosed Appendix shows the 
jobs created across America in rail car and bus manufacturing.
---------------------------------------------------------------------------
    \3\ American Public Transportation Association, 2019 Public 
Transportation Fact Book, April 2019.
---------------------------------------------------------------------------
    For these reasons, Capital Investment Grants are a critical tool to 
addressing the mobility demands of our communities and growing the 
national economy. We greatly appreciate the Subcommittee's continued 
oversight of the CIG program. We have a great working relationship with 
the Committee and the Federal Transit Administration (FTA) and we look 
forward to continuing to work together to advance these critical public 
transportation capital projects.
                  The CIG Program: A Bureaucratic Maze
    Unfortunately, over the past two decades, both Congress and FTA 
have repeatedly layered additional requirements on the CIG program, 
resulting in a bureaucratic maze. If an individual project suffers 
schedule or budget issues, Congress and FTA have often responded with 
new statutory, regulatory, or administrative requirements imposed 
across-the-board on every project in the CIG pipeline. As a result, 
beginning with the enactment of the Transportation Equity Act for the 
21st Century (TEA 21) in 1998, the CIG requirements have become vastly 
more complex, time-consuming, and burdensome than the requirements of 
other comparable, large U.S. Department of Transportation (DOT) 
discretionary grant programs.
    Moreover, these burdensome requirements cause significant delay in 
project approvals, which result in considerable increases in project 
costs prior to construction. Today, a CIG project sponsor faces almost 
60,000 words of federal statutory law, regulations, and administrative 
guidance under the program. Comparatively, a Federal-aid Highway INFRA 
Grant applicant faces less than one quarter of the statutory language 
of the CIG program and no specific regulations.
    The bureaucratic maze is not only a burden on CIG project sponsors. 
It also affects local decision-making as communities weigh whether to 
proceed with a CIG transit project, together with the accompanying 
program requirements and multi-year process, or, alternatively, build a 
highway project with limited federal requirements and an expedited DOT 
discretionary grant review process.
                FTA's Implementation of the CIG Program
Funding
    Funding Levels. In fiscal year (FY) 2018 and FY 2019, the 
President's Budgets proposed to eliminate funding for new CIG projects 
and limit funding to projects with existing Full Funding Grant 
Agreements (FFGAs). APTA strongly opposed these proposals and greatly 
appreciates that Congress continued significant funding for Capital 
Investment Grants, including new projects. This year, the President's 
Budget proposes $1.5 billion for the CIG program, including $500 
million for new projects. Although we are encouraged that the 
Administration has expressed support for the program, we strongly urge 
Congress to provide funding at or above the FY 2019 enacted level of 
$2.6 billion.
    In the past three fiscal years (FY 2017-FY 2019), Congress has 
repeatedly recognized the importance of CIG investments and provided 
funding that is greater than the $2.3 billion authorized in the Fixing 
America's Surface Transportation Act (FAST Act) (P.L. 114-94). 
Investment in public transportation yields significant economic and 
community benefits and we are grateful for this Committee's and 
Congress' support throughout the years.
    Investing Available Funds. In addition, Congress has specifically 
directed FTA to obligate 85 percent of CIG funding by a specific date 
(e.g., obligating 85 percent of FY 2018 CIG funds by December 31, 
2019). We strongly support this requirement because it requires FTA to 
help projects navigate the bureaucratic maze of the CIG program and 
obligate the available funds.
    For instance, in FY 2019, Congress provided $2.6 billion for CIG 
investments. To date, more than one-half ($1.3 billion) of these funds 
remain unallocated (i.e., FTA has not assigned the funds to a specific 
project).\4\ In fact, FTA has not completed allocating its FY 2018 
funds--$41 million remains unallocated from last year.\5\
---------------------------------------------------------------------------
    \4\ Allocating funds is simply designating the funding for the 
project and is a step prior to the obligation of funds, which require 
project approval. Federal Transit Administration, FY 2019 Section 5309 
Fixed Guideway Capital Investment Grants Allocations, Table 7, July 9, 
2019.
    \5\ Federal Transit Administration, FY 2018 Section 5309 Fixed 
Guideway Capital Investment Grants Allocations, Table 7, June 20, 2019.
---------------------------------------------------------------------------
    Communities across the nation have proposed CIG projects to address 
their growing mobility demands. FTA's current CIG pipeline includes 10 
New Start and Core Capacity projects under FFGA and 53 additional 
projects seeking construction grants, including 14 New Start, 3 Core 
Capacity, and 36 Small Start projects in 20 different states.\6\
---------------------------------------------------------------------------
    \6\ Federal Transit Administration, Current Capital Investment 
Grant Projects, Accessed July 2019.
---------------------------------------------------------------------------
    In total, communities are requesting approximately $27 billion of 
Capital Investment Grants to fund these projects in the pipeline.

        We urge FTA to move forward as expeditiously as possible to use 
        the available FY 2018 and FY 2019 funds to invest in critical 
        CIG projects.

    Local Overmatch. APTA is concerned that many New Start project 
sponsors believe that FTA is strongly encouraging significant ``local 
overmatch'' of the federal CIG share. Despite current law 
restrictions,\7\ these project sponsors believe that DOT will not move 
forward with their New Start projects unless the project sponsor 
requests significantly less than a 50 percent CIG share. This 
significant overmatch could discourage project sponsors from seeking a 
CIG grant. Moreover, overmatch requirements can affect local community 
decisions on whether to proceed with a highway or transit project 
because of the unequal playing field between the availability of 
highway and transit federal funds to complete a project.
---------------------------------------------------------------------------
    \7\ Section 5309(l)(5) of Title 49, United States Code, states: 
``Nothing in this section shall be construed as authorizing the 
Secretary to require a non-Federal financial commitment for a project 
that is more than 20 percent of the net capital project cost.''

        We urge Congress to establish a fixed CIG share for New Start, 
        Core Capacity, and Small Start projects.
CIG Policies
    On June 29, 2018, FTA issued a ``Dear Colleague'' letter to public 
transit agencies highlighting the Administration's policies regarding 
the CIG program. The Administration's Dear Colleague letter established 
geographic diversity as a factor in FTA funding allocation decisions; 
considered DOT loans ``in the context of'' all federal funding sources 
requested by the project sponsor, and not separate from the federal 
funding sources; and included other Administration policy 
objectives.\8\ FTA stated that these changes reflect the 
Administration's current policy and are in effect. At the same time, 
FTA also made changes to the CIG Risk Assessment process.\9\
---------------------------------------------------------------------------
    \8\ U.S. Dep't of Transportation, Federal Transit Administration, 
Dear Colleague letter, June 29, 2018.
    \9\ The Risk Assessment changes were posted to the FTA website as 
part of a set of questions and answers, and not distributed through a 
formal notice and comment process or other public process.
---------------------------------------------------------------------------
    Section 165 of the Transportation, Housing and Urban Development, 
and Related Agencies Appropriations Act (P.L. 116-6, Division G) 
prohibits FTA from implementing or furthering new policies detailed in 
FTA's June 29, 2018 Dear Colleague letter to CIG project sponsors.
    Although we have a great partnership with FTA, we have a serious 
difference of opinion with the agency regarding the policies outlined 
in FTA's Dear Colleague letter. We regret that FTA did not consult with 
the public transit industry prior to making these significant policy 
changes. FTA's Dear Colleague letter has created considerable confusion 
among project sponsors regarding certain CIG policies. In addition, it 
remains unclear how FTA interprets the THUD Appropriations Act 
limitation of the Dear Colleague letter.
    Federal Loans as a Federal Funding Source. In the Dear Colleague 
letter, FTA states that it ``considers U.S. Department of 
Transportation loans in the context of all Federal funding sources 
requested by the project sponsor when completing the CIG evaluation 
process, and not separate from the Federal funding sources.'' \10\ 
(emphasis added). This change could be read to curtail a public transit 
agency's ability to use Transportation Infrastructure Finance and 
Innovation Act (TIFIA) loans for the local share of a CIG project.
---------------------------------------------------------------------------
    \10\ U.S. Dep't of Transportation, supra note 8.
---------------------------------------------------------------------------
    Current law specifically provides that TIFIA may be used for any 
non-federal share of transit project costs if the loan is repayable 
from non-federal funds. Thus, we believe that FTA's policy is 
inconsistent with TIFIA's statutory requirements. Moreover, under FTA's 
policy, DOT will treat TIFIA loans differently based on whether they 
are funded under FTA or Federal Highway Administration (FHWA) programs.

        We urge Congress to clarify that TIFIA loans repaid with non-
        federal funds are local match.

    Changes to Risk Assessment Process. On June 29, 2018, FTA also 
announced two changes to the CIG Risk Assessment process that could 
cause delays to projects going through the pipeline: the timing of the 
Risk Assessment and increasing the Probability Threshold of CIG 
projects' budget and schedule.
    Timing of FTA Risk Assessment. Under the new policy, FTA conducts a 
Risk Assessment of New Starts and Core Capacity projects prior to entry 
into the Engineering phase (i.e., during Project Development) of the 
program. Prior to the new policy, Risk Assessments were generally 
conducted during the Engineering phase of CIG projects.\11\ This change 
is problematic because project sponsors may not have an adequate level 
of design and engineering completed to provide accurate and fair 
estimates for the Risk Assessment at this early stage.
---------------------------------------------------------------------------
    \11\ New Start and Core Capacity projects are required by law to go 
through a three-phase process--Project Development, Engineering, and 
Construction. Small Start projects are required by law to go through a 
two-phase process--Project Development and Construction. The FFGA or 
Small Start Grant Agreement (SSGA) are typically awarded prior to the 
Construction phase of the project.
---------------------------------------------------------------------------
    In addition, current law limits the Project Development phase of 
New Start and Core Capacity projects to a two-year period (although FTA 
may extend the time period). Conversely, the Engineering phase is not 
time-limited (although projects must show that they are making progress 
three years after entering Engineering).
    APTA is very concerned that requiring the Risk Assessment during 
the Project Development phase provides an additional hurdle to 
completing Project Development within the two-year time period. Given 
the significant number of tasks already required to be completed during 
the two-year period,\12\ this change is likely to require CIG project 
sponsors to conduct and fund even more preliminary work before seeking 
entry into Project Development. The sponsor's funding of this 
preliminary work is not included in calculating the CIG share.
---------------------------------------------------------------------------
    \12\ Under Project Development, the project sponsor is already 
required to select a locally preferred alternative (LPA); have the LPA 
included in the fiscally constrained metropolitan transportation plan; 
and complete the environmental review process required under the 
National Environmental Policy Act (NEPA).
---------------------------------------------------------------------------
    Probability Threshold. When determining the reasonableness of a 
project sponsor's cost and schedule, FTA reviews the estimates to 
determine whether they include reasonable assumptions or whether 
adjustments need to be made. FTA then examines risks related to the 
project to determine the appropriate level of contingency funding 
needed. FTA increased its Probability Threshold from 50 percent to 65 
percent in determining the reasonableness of the cost and schedule 
estimates. APTA is concerned that increasing the Probability Threshold 
percentage will require project sponsors to identify more contingency 
funds, adding to the costs for project sponsors.
    Moreover, given that the federal share is established upon entry 
into Engineering, cost overruns are the risk and responsibility of the 
project sponsor. This change increases costs for project sponsors 
regarding risks for which they are already responsible.

        We urge Congress to require FTA to conduct the Risk Assessment 
        and establish the federal CIG share during the Engineering 
        phase of New Start and Core Capacity projects. Similarly, we 
        urge Congress to require FTA to reduce the Probability 
        Threshold from 65 percent to 50 percent in determining the 
        reasonableness of cost and schedule estimates, which will 
        restore the Probability Threshold to the level required prior 
        to FTA's 2018 changes in Risk Assessment policy.
             Reforming the CIG Program: A Zero-Based Review
    Over the past 18 months, APTA has solicited input from our diverse 
membership on priorities for the next surface transportation 
authorization bill. At our Legislative Committee meeting on June 23, 
2019, members unanimously approved APTA's surface transportation 
authorization recommendations, which include numerous proposed reforms 
of the CIG program. In October, APTA's Board of Directors will consider 
these recommendations for final approval.
    APTA strongly urges the Committee to conduct a zero-based review of 
the CIG program to assess all statutory, regulatory, and other 
administrative requirements through a two-part test:
      Does the requirement strengthen the CIG program and 
ensure that beneficial projects across the country are delivered in a 
timely manner?
      Does the requirement protect the taxpayer's interest in 
funding good projects?

    We strongly believe that dozens of current CIG requirements fail 
this two-part test.
    In addition to a zero-based review, we recommend four additional 
policy reforms to strengthen the CIG program.
    First, APTA recommends that FTA establish a CIG Pipeline Dashboard. 
The Dashboard would allow for the public to track the status of each 
project in the CIG pipeline. The Dashboard would provide a level of 
transparency and oversight that enhances good governance and can be a 
valuable tool for current and future project sponsors, Congress, 
interested stakeholders, and many others.
    Second, providing funding certainty is essential for any multi-year 
transportation project. To that end, APTA calls on Congress to codify a 
fixed federal CIG share for New Start, Core Capacity, and Small Start 
projects. Codifying a fixed federal CIG share will provide certainty 
for project sponsors contemplating entry into the CIG program and it 
will expedite FTA decision-making.
    Third, APTA advocates for the continued use of TIFIA loans to be 
considered as a local match. Many CIG project sponsors have utilized 
TIFIA loans to help offset upfront costs associated with capital 
projects. While the federal government does provide money to fund these 
critical public transportation capital projects, the TIFIA loan is 
repaid with local funds. APTA seeks a technical clarification 
stipulating that such TIFIA loans shall be counted as the non-federal 
share of project costs.
    Finally, we call on Congress to move the Risk Assessment to the 
Engineering phase of the CIG process and reverse the changes to the 
Probability Threshold. Specifically, we urge Congress to require FTA to 
conduct the Risk Assessment and establish the federal CIG share no 
earlier than 180 days after entering the Engineering phase (for New 
Starts and Core Capacity projects) or earlier at the project sponsor's 
request. Similarly, we urge Congress to require FTA to reduce the 
Probability Threshold from 65 percent to 50 percent in determining the 
reasonableness of cost and schedule estimate.
    The Appendix includes APTA's surface transportation authorization 
recommendations regarding the CIG program, as approved by APTA's 
Legislative Committee on June 23, 2019.
                               Conclusion
    On behalf of APTA, thank you for giving me the opportunity to 
testify and share our thoughts on Capital Investment Grants. We look 
forward to working with the Committee on Transportation and 
Infrastructure to strengthen the CIG program and ensure that these 
critical public transportation projects across the country are 
delivered in a timely manner.

                               __________
                                appendix
             Capital Investment Grants Program (Sec.  5309)
    APTA strongly supports the CIG program. Beginning with enactment of 
the Transportation Equity Act for the 21st Century (TEA 21) in 1998, 
both Congress and FTA have repeatedly layered additional requirements 
on the CIG program, which has resulted in a bureaucratic maze. Congress 
must continue to reject policies that would cut, delay, or make this 
vital program more burdensome. We urge Congress to adopt provisions 
that will strengthen the CIG program and ensure that beneficial 
projects across the country are delivered in a timely manner.
APTA Recommendations:
      Establish a fixed federal CIG share for New Start, Core 
Capacity, and Small Start projects. The fixed federal CIG shares shall 
be:
      i.  New Starts: 60 percent or, for New Start projects with 
significant total project costs, a lesser percentage;
      ii.  Core Capacity: 80 percent or, for Core Capacity projects 
with significant total project costs, a lesser percentage; and
      iii.  Small Starts: 80 percent.

      Increase the maximum federal and total estimated net 
capital costs for Small Starts projects by $100 million. In 49 U.S.C. 
Sec.  5309(a)(7)(A), strike ``$100,000,000'' and insert 
``$200,000,000''; and in subparagraph (B), strike ``$300,000,000'' and 
insert ``$400,000,000''.

      Extend the time period for Core Capacity projects to be 
at or over capacity from five years to 10 years, and clarify that 
projects that expand or modify existing station facilities are 
increasing capacity. Strike clause (iii) of 49 U.S.C. Sec.  
5309(e)(2)(A), and insert ``(iii) will increase capacity of an existing 
fixed guideway system, corridor, or station at least 10 percent and 
is--(I) at or over capacity; or (II) projected to be at or over 
capacity within the next 10 years;''.

      Extend the deadline to complete Project Development 
activities for New Starts and Core Capacity projects from 2 to 3 years. 
In 49 U.S.C. Sec.  5309(d)(1)(C)(i) and in Sec.  5309(e)(1)(C)(i), 
strike ``2'' and insert ``3''.

      Strike the requirement for New Starts and Core Capacity 
project sponsors to complete a Before and After Study and require the 
Government Accountability Office to provide Congress a biannual report 
that analyzes the impacts of New Starts and Core Capacity projects on 
public transportation services and ridership. Strike 49 U.S.C. Sec.  
5309(k)(2)(E).

      Expand the use of warrants, where a project can pre-
qualify for a satisfactory rating on particular requirements if certain 
conditions are met. Current FTA policy guidance does not allow warrants 
for projects with a capital cost greater than $500 million. Strike 49 
U.SC. Sec.  5309(g)(3)(D). In 49 U.S.C. Sec.  5309(g)(3)(C), strike ``; 
and'' and insert ``.''

      Require FTA to conduct the Risk Assessment and establish 
the federal CIG share during the Engineering phase of New Start and 
Core Capacity projects. In 49 U.S.C. Sec.  5309, insert a subsection: 
``(r) For projects defined under subsection (a)(2) or (a)(5), the 
Secretary may not determine a maximum Capital Investment Grant 
contribution or perform a risk assessment until at least 180 days after 
a project has entered into the Engineering phase, unless the project 
sponsor specifically requests a risk assessment on an earlier date.''.

      Require FTA to reduce the probability threshold from 65 
percent to 50 percent in determining the reasonableness of cost and 
schedule estimates, which will restore the probability threshold to the 
level required prior to FTA's recent changes in Risk Assessment policy. 
In 49 U.S.C. Sec.  5309(f)(1)(A) before the semicolon, add ``but may 
not exceed 50 percent''.

      Establish a CIG Program Pipeline Dashboard on a publicly 
available website that includes complete information on the program and 
the status of each CIG project in the pipeline, including:
      i.  the amount of CIG funding appropriated, allocated, and 
obligated for the program and each of its components (New Starts, Core 
Capacity, and Small Starts).
      ii.  the date the project entered Project Development and 
Engineering (if applicable);
      iii.  the status of FTA and DOT review at each stage of the 
process, including when a Letter of No Prejudice (LONP) was requested 
and the date of when the LONP was issued;
      iv.  the date the New Starts FFGA, Core Capacity FFGA, or Small 
Starts grant agreement was executed; and
      v.  the status of the project sponsor in securing its non-federal 
match, based on information provided by the project sponsor.

      Reduce the required period of notification to Congress 
from 30 days to 10 days before issuing a letter of intent, entering 
into an FFGA, or entering into an early systems work agreement. In 49 
U.S.C. Sec.  5309(k)(5), strike ``30 days'' and insert ``10 days''.

      Reduce the required period of notification to Congress 
for a Small Start project from 10 days to 3 days. In 49 U.S.C. Sec.  
5309(h)(6)(C), strike ``10 days'' and insert ``3 days''.

      Allow expenditures to fulfill compliance with the 
National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.), to 
be counted toward the non-federal match for CIG projects prior to 
entering Project Development.

      Require the Secretary to issue updated guidance no later 
than six months after the date of enactment. In 49 U.S.C. Sec.  
5309(g)(5)(A), strike ``of the Federal Public Transportation Act of 
2012''.

      Add a Congressional notification requirement on the 
status of implementation for the Program of Interrelated Projects and 
the Expedited Project Delivery Pilot Program. Add the following new 
section:

        ``Sec. ___ Capital Investment Grants Program Notification 
        Requirement.
        Not later than 90 days after the date of enactment of this 
        section, and every 90 days thereafter, the Administrator shall 
        notify the Committee on Transportation and Infrastructure of 
        the House of Representatives and the Committee on Banking, 
        Housing, and Urban Affairs of the Senate of----
        (A) The status of implementation for the Program of 
        Interrelated Projects and the Expedited Project Delivery Pilot; 
        and
        (B) Any additional legislative actions that may be needed.''
Expedited Project Delivery for Capital Investment Grants Pilot Program 
                        (FAST Act Sec.  3005(b))
    The Expedited Project Delivery for Capital Investment Grants Pilot 
Program was originally established in MAP-21. This pilot program allows 
for up to eight New Starts, Core Capacity, or Small Starts projects to 
expedite the evaluation process normally required for CIG. FTA has only 
issued an expression of interest for projects and has not begun 
implementation of the pilot program.
APTA Recommendations:
      Increase the maximum federal CIG share from 25 percent to 
50 percent. Amend Sec.  3005(b)(9)(A) by striking ``25 percent'' and 
insert ``50 percent''.

      Reduce the required period of notification to Congress 
from 30 days to 10 days. Amend Sec.  3005(b)(8)(D) by striking ``30 
days'' and insert ``10 days''.

      Increase the maximum federal and total estimated net 
capital costs for Small Starts projects to be consistent with 49 U.S.C. 
Sec.  5309(a)(7), as amended by these Recommendations. Amend Sec.  
3005(b)(1)(I) in clause one by striking ``$75,000,000'' and insert 
``$200,000,000''; and in clause two, strike ``$300,000,000'' and insert 
``$400,000,000''.

      Strike the requirement for project sponsors to complete a 
Before and After Study. Amend Sec.  3005(b) by striking paragraph (12) 
and re-designating paragraph (13) as (12).


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Ms. Norton. Thank you very much, Mr. Skoutelas. I must say, 
your figure--when I hear a figure like that, $1.3 billion, I 
believe it was, not allocated, you know, I am not used to that 
kind of money floating around the Congress and nobody making 
use of it.
    Could I ask you, Mr. Skoutelas, you indicated I believe 
that there was no consultation before the changes in TIFIA and 
risk assessment. No regulation, no regulatory changes required 
for that kind of change?
    Mr. Skoutelas. There was none. There was none, and we think 
it is vitally important as the industry--again, not to take 
anything away from the FTA staff and their expertise, and I 
commented on that previously, a lot of expertise lies within 
the project sponsors themselves. And we have a lot to offer 
because the individual members and sponsors are on the 
frontlines delivering these projects.
    And so I think an order of consultation, an opportunity for 
the industry to input, would be highly appropriate.
    Ms. Norton. That is the usual rule in the Congress. We make 
all kinds of mistakes by not consulting. And if that is not 
required by regulation, we will have to make sure in the 2020 
reauthorization that the appropriate statutory change is made. 
Very helpful suggestions.
    I tried to get at, for example, your notion of reporting on 
the status when I asked the Acting Administrator to get back to 
me, but your further detail will be very helpful to us in 
submitting questions to her following this hearing.
    I am trying to understand these different programs. We have 
one program, the DOT discretionary program, and then we have 
this program which seems to be far more complicated. And I 
believe--I am trying to understand how one being more 
complicated than the other--of course, the CIG program 
encourages local communities to build on the program--using the 
program that is least complicated, which turns out to be the 
highway program. Does that result in localities making 
decisions it would not otherwise make?
    All of you, or, Mr. Skoutelas, why don't we start with you.
    Mr. Skoutelas. I certainly think that is a strong 
possibility. I think it discourages, to some degree, projects 
from getting into the pipeline once they see some of the 
daunting requirements. The demand is great from communities 
because this is a valuable resource of funding that is 
important for them to build important projects like bus rapid 
transit or extensions to light rail, and the like.
    Local governments make judgments and where they are going 
to put their money, and certainly the agencies themselves have 
to make that decision. Do they ask for Federal dollars; do they 
not? Which projects do they support?
    My only point to that is I think there needs to be a level 
playing field. There is no basis to require a full set of more 
demanding requirements on one mode versus another, and I think 
that would be something that Congress ought to look at. And 
let's level the playing field; let's make it equally 
appropriate in terms of what has to be done to implement these 
projects. I think that would serve us very well.
    Ms. Norton. Do either of you have views on that notion? I 
am sure that the projects went different ways for different 
reasons. They have very different authorizations. Do you have 
any response on that question?
    Mr. Gerend. I will give you the perspective from Kansas 
City. As mentioned in my comments, we advanced our streetcar 
starter line project. Outside of CIG, it was $102 million. We 
leveraged a Federal partnership through the surface 
transportation program, and then TIGER, now BUILD, for some 
supplemental Federal match.
    So FTA oversaw the implementation of that program outside 
of CIG, and that was advantageous to the timeline of that 
project, which we completed really in record time--in under 5 
years from planning to full-blown operations, with 
satisfactory, obviously, oversight and a really successful 
launch.
    We are now in full-blown New Starts through our streetcar 
extension, and really are noticing clearly the differences in 
the requirements, despite the fact that we have successfully 
deployed an initial project.
    And with my background on the regional transportation side, 
I would say in all cases, frankly, the rigor of the CIG program 
is unlike any other Federal transportation grant program across 
any of the categories that we have had experience with in 
Kansas City and, frankly, an order of magnitude more 
complicated than similarly funded roadway projects, highway 
projects, and the like, that we are continuously advancing 
throughout the region.
    So it is an impediment to progress. It is where the money 
is, frankly, for large-scale capital transit projects. So we 
play by the rules. We understand that they are rigorous, and we 
expect that that comes with the territory. But there is a 
front-end local financial commitment that is very real in these 
processes. The Federal obligation and commitment for 
partnership is at the very back end of the project, so as 
indicated, we may be spending upwards of $20 million of local 
funds developing a project concept before we know we have a 
Federal partnership that is real and can actually implement a 
project.
    That is a tough pill for local governments to swallow, but 
it comes with the territory, and so we are in a position of 
having to make that decision, and we are doing that because 
that it is a competitive framework but it is challenging, and 
the due diligence and the burden on sponsors is very real.
    Ms. Norton. Well, thank you very much, Mr. Gerend. This is 
very difficult. One program is more complicated than another 
just because Congress has set out one is a grant program; the 
other was always meant to give a lot of discretion to the 
jurisdictions. So in reauthorization, we will have to look more 
closely in making the CIG program easier to deal with at the 
level of the administration as well with grantees.
    I am pleased to recognize our ranking member, Mr. Davis.
    Mr. Davis. Thank you, Madam Chair, and thank you to the 
witnesses. Sorry we didn't have a little bigger crowd, but you 
got the best of the best with us three here, I would say.
    Hey, look, first off, Mr. Gerend, now the Kansas City 
Streetcar, I know that is probably in my colleague, Ms. Davids' 
district, but I got to know, does it go to Worlds of Fun?
    Mr. Gerend. It does not, not yet, no.
    Mr. Davis. OK, is that in your long-term planning?
    Mr. Gerend. That is part of our multimodal strategy to 
extend beyond streetcar. It's multimodal: bus, on-demand 
transit services, of course.
    Mr. Davis. As somebody who was born in Des Moines, Iowa, 
our closest city outside of Des Moines to go have fun at when I 
was young was Kansas City, and I remember the Worlds of Fun was 
my favorite place to go.
    So is that in your district, Ms. Davids? Is it across the 
State line? Oh, it is in Missouri? OK, well, hey, you know what 
is good? It is projects like that that can transcend State 
lines, if needed, if needed.
    Well, first off, I want to thank all the witnesses. And, 
you know, we have talked about the CIG program, the panel 
before with the Acting Administrator, and now with you. And I 
get we have some issues between the discretionary portion 
versus some of the normal applicant portions of CIG, and I 
think the Acting Administrator answered a lot of the concerns 
very well.
    But I have got an overall concern on this panel; an overall 
concern with how do we actually get to the bipartisan solution 
to reauthorize the FAST Act. And the biggest concern I have is 
are we, at T&I, going to have to pass a bill that we know is 
not adequately funded, like that last one, for the entirety of 
the policy recommendation period. How do we get do a point 
where we have a fully funded highway reauthorization? What do 
we do?
    You know, there are many that have taken a strict increase 
in our current revenue stream off the table. So what is the 
next step, Mr. Alger? What is the next step to actually ensure 
that we not only make the Highway Trust Fund solvent, we make 
it viable; we make it less volatile; and how do we bring in new 
modes of transportation that may not be paying into the Highway 
Trust Fund now, but maybe more of a ubiquitous part of our 
roadways in the future?
    Mr. Alger. Well, I think there are a couple points here. 
Number one, all transportation in the United States is 
interrelated--if we don't fund transit then more people are 
going to be on the roads in cars, and we are going to have more 
trucks; we are going to have all kinds of problems, more 
congestion, people trying to get where they are trying to get 
to. So there has to be a solution for everything.
    I almost think that we are making this too complicated. We 
are trying to get this----
    Mr. Davis. In Congress? Really?
    Mr. Alger. Really. I truly believe that.
    So this $2 trillion that everybody is talking about, I 
almost think we need to take smaller bites of the apple. There 
are a lot of things out there that we could do, that we could 
raise the gas tax today. We could do some other things that 
have been proposed. We sat this morning and there is like 10 or 
12 different items that are available to be done today that we 
could do. But we just can't seem to get everybody together.
    One comment that I had when I met with a couple Members of 
Congress was why can't we just get everybody in one room like 
this and we lock the doors until somebody figures out what the 
hell we are going to do. Because it just doesn't seem to happen 
around here. If it was private industry we would come with a 
solution, we would get it together, we would move forward. For 
some reason, this thing just gets bottlenecked, and I don't get 
it. There is a lot of things we could do right now that we just 
choose not to do, whether it is bipartisan or not. And it is 
foolish.
    Mr. Davis. Well, I appreciate the comments. You know, as 
somebody who has said, I think it is extremely shortsighted 
just to use the existing revenue sources that we have, because 
same Federal Government tells auto manufacturers to make 
engines that burn less gas. So we are not providing a long-
term, less volatile solution.
    Do you have any ideas how we bring electric vehicles into 
the mix? I want to sell more electric vehicles. I have got an 
old Mitsubishi factory that shut down, that is in my district, 
a few years ago, that has now got a few hundred million dollars 
of investment from Rivian car company, and investment from Ford 
Motor Company, Amazon and others, hundreds of millions of 
dollars. They want to produce small SUVs and small, light, 
electric pickups.
    I mean as we look ahead over the next 5 to 6 years, 10 
years, I believe more of those will be on the roadway, and I 
certainly hope so because it will provide jobs to my 
constituents. But what do we do since, you know--any of you 
drive a fully electric vehicle up there?
    Mr. Skoutelas. I don't have an automobile. I take the bus.
    Mr. Davis. All right, well, I can't do that in my district. 
So nobody drives a fully electric vehicle on the panel, right?
    Mr. Alger. I do not, but I think that we could put a tax on 
electric vehicles so that they pay for the roads that they are 
using, that the gas-powered cars are using. They are using the 
same facilities, they should pay for using those facilities, 
just like everybody else does.
    Mr. Skoutelas. Can I offer a comment? First of all, I want 
to thank you for your leadership on this whole issue, and you 
have come and spoken to our group in recent months, and you 
have made the strong case that there needs to be action taken.
    Certainly from the standpoint of the transportation 
industry, and there is almost an incredible alignment between 
the associations and virtually everyone that recognizes, we 
need to take this bold step forward for infrastructure 
investment. It is a great opportunity that we have. Yes, there 
might be some issues. Is it a gas tax? Is it some blend? Is 
this a tax on electric vehicles? That is seemingly something we 
should be able to get over, and to cause some kind of a 
blending.
    In my own personal opinion, I believe that perhaps that is 
the future of a tax on electric vehicles. Unfortunately, there 
is not enough of them yet to make a difference. And yet it 
probably needs to be in the horizon of when that can happen. 
But I would hope that given the great demands that we have in 
our communities across the board, across the multimodal nature 
of infrastructure, that we can find a way to come together to 
get it done.
    As Bob said here, it shouldn't be that difficult. I know it 
is, but it shouldn't be that difficult. And we stand here to 
help however way we can to assist in that.
    Mr. Davis. Well, thank you all. I know I have no time to 
yield back, and I want to thank Mr. Gerend, too, for the long-
term plans of extending the streetcar to one of the greatest 
amusement parks in my childhood.
    Thank you, Madam Chair. I yield back nothing.
    Ms. Norton. Well, I want to thank the ranking member for 
his important questions. I do want to note that once Mr. Alger 
raised the Highway Trust Fund, it brought the ranking member 
back, who has other business, but he came right back to the 
table because I think, like his questions indicated, you see a 
bipartisan desire to do something about the Highway Trust Fund. 
He seems to have taken off raising the gas tax, but he didn't 
take off your other two suggestions, Mr. Alger. And if I may 
recall it for the record, I believe the number is two-thirds of 
the States have raised their gas tax.
    Mr. Alger. Thirty-one.
    Ms. Norton. Thirty-one States. That is more than two-
thirds. So the problem is in the Congress. It looks like nobody 
would be punished if we did at the Federal level what the 
States have already done at their level. I am not sure whether 
we are afraid of our own shadow.
    Mr. Alger. I think it is 96 percent of the people that have 
been elected to Congress have voted for a gas tax and got 
reelected. It is something like that. So people should not be 
scared to vote to raise the gasoline tax.
    Mr. Davis. It is about the same as the incumbent retention 
rate all around.
    Ms. Norton. We may have to find some way to get a vote on 
that matter, or at least to test, to do a kind of whip count 
and see if we put the figures that the ranking member just gave 
and that I just gave before people whether we might get another 
result. We can do a whip count and see whether we are simply 
going off of what we have done for more than 20 years, and that 
with these new figures, States may have updated their own 
thinking about----
    Mr. Alger. If I may, it is very frustrating on our part to 
talk about this for the last 9 months to 1 year and see 
absolutely nothing get done. It is really frustrating from 
industry, from the associations, from the general public. And 
it seems like we have the opportunity now potentially, now we 
need to seize that opportunity and make something happen.
    Ms. Norton. Thank you very much. Ms. Davids.
    Ms. Davids. Well, thank you to the witnesses for being here 
today. I appreciate the testimony you have provided in writing 
and then listening to the suggestions that you have.
    So of course I definitely want to talk to Mr. Gerend about 
not just the Kansas City Streetcar, but the regional 
collaboration that has happened across the State lines, which I 
think has been one of the most beneficial things to our area in 
terms of economic vitality and growth that we have seen over 
the last number of years.
    I want to just dig right into some of the recommendations 
that you made. There are two really big things that jump out at 
me, and we have very limited time for each person to testify, 
so I wanted to jump into the Very Small Starts program and your 
recommendation of reintroducing that as part of the CIG. And 
could you just really quickly talk about why you think that 
would be beneficial and what it would look like?
    Mr. Gerend. Sure. Thank you for the question, and it is a 
pleasure seeing you this morning. We had some experience in the 
Kansas City region with our Troost MAX BRT project in deploying 
that, then, was the Very Small Starts program, which was 
designed to help small-scale projects with high community 
benefits move through the process, sort of on an expedited 
timeline with minimal requirements. These are lower risk 
projects so there is lots of conversation in the room today 
about small cities, about rural communities.
    We definitely think as we look at even the Small Starts 
requirements and the burden placed on projects even through the 
Small Starts pipeline that there is a smaller--the smaller end 
of the projects in that spectrum, there is an opportunity to, 
once again, carve those out, create another category, 
effectively, for the small Small Starts project, the Very Small 
Starts projects, that could help expedite and move low-risk 
projects with high benefits at a faster pace. It has worked 
well in the past; we think it is an opportunity; it is worth 
revisiting again.
    Ms. Davids. And so when we think about those high community 
benefits, it kind of sparks the next recommendation, so that 
was--or takeaway--the second takeaway was what you were just 
speaking about. And then a third takeaway which has to do with 
the project due diligence, and part two--I really get into 
these things--part two of the due diligence takeaway has to do 
with the way that the Federal Government looks at the local 
commitment. And, you know, you specifically mentioned the--I 
remember seeing this go through the voter-approved tax to 
secure funding for projects, and some of the other things that 
have happened in the region that demonstrate a local commitment 
to investing in these projects, and then to still not have that 
count.
    Can you talk a little bit about what do you think we need 
to do to make sure that when the people who are on the ground 
doing what they are supposed to be doing and committing to 
projects in very real ways still are not--they are not getting 
that credit in these programs.
    Mr. Gerend. Sure, happy to elaborate. So in my written 
statement it was really about the requirements to enter into 
engineering through the New Starts pipeline. And with that 
comes, as was talked about earlier today, some specific 
requirements related to financial commitment. And many 
properties around the country are having conversations with FTA 
about defining commitment, what does that really mean. So in 
our case, we are fortunate. We have had a voter-approved taxing 
district dedicated for our expansion effort. It passed 70 to 
30. That included a sales and property tax. It demonstrates the 
value. We have had recently as it relates to--as recently as 
last week, city council formal ordinances and agreements 
approved.
    It really is, though, an ongoing conversation with FTA 
about what the Acting Director's comments were related to no 
additional actions. What specifically does that mean? How does 
it relate to local processes? How does it relate to State law 
and annual appropriations of budgeted resources? So really sort 
of in the weeds.
    The point that I would really like to make here as it 
relates to CIG, and engineering specifically, is that it is 
still an action and it is authorization and approval to enter 
into a phase of the process that is still without a Federal 
commitment. We are not talking about full-funding grant 
agreement; we are just simply seeking to move into the final 
phase of the process, the engineering phase, and there are some 
really high bars as it relates to entering into that phase.
    So our recommendation as it relates to the risk assessment, 
financial readiness, some of those considerations as we are 
thinking about streamlining the program we think makes sense to 
reevaluate and reconsider. Do they really have to be located 
where they are currently located in the process, or could they 
be criteria that instead of being held against entry into 
engineering or held against a full-funding grant agreement.
    So FTA still has the leverage to require satisfactory 
responses, but we are not slowing down the projects and we are 
utilizing the engineering phase on the backend of the process 
to fully inform project plans, financial plans and ultimately, 
obviously, the local cost share.
    So all to say it is part of a really costly and labor 
intensive due diligence effort, and we think there are some 
advantages with deferring some of those requirements to later 
in the process. And that is what we would suggest the committee 
consider as you reevaluate the long-term opportunities for 
streamlining and program improvements.
    Ms. Davids. Thank you. I appreciate your testimony, and I 
yield back.
    Ms. Norton. Thank you very much. We will have another round 
of questions, and I yield to the ranking member, Mr. Davis.
    Mr. Davis. Well, thank you all for your comments, and I am 
glad to hear the chair talk about wanting to have the debate on 
the long-term solvency of the Highway Trust Fund. I look 
forward to having that debate at this committee, and I look 
forward to our Ways and Means Committee, our committee on 
revenue, have the debate. But I think we here at T&I can help 
lead the charge on what that debate looks like. And that is why 
I am glad, you know, you three are at the table.
    I know Mr. Alger, your organization has put together 
options. I mean I have always been for diversification. I mean 
I enjoy the discussion on the political courage on whether or 
not to cast a vote or take a vote here in Congress. I believe 
every vote we take has an impact on whether or not we get 
reelected or elected in the first place. And frankly, you know, 
many of the issues that we face are going to be used either for 
or against any of us. But the bottom line is Members of 
Congress on both sides of the aisle, we take votes based upon 
what we think is best for policy.
    I mean I can tell you there are good men and women that sit 
on this committee and serve in this Congress that will not put 
political considerations ahead of doing what is right for this 
country. I think we all agree that we ought to have a more 
funded, well-funded, more solvent, less volatile Highway Trust 
Fund. It is going to deal with our crumbling roads, our 
crumbling bridges; it is going to deal with our transit issues, 
streetcar issues and streetcar extensions. But we have got to 
stop the discussion on politics when it comes to issues.
    I have a distinct concern as a policymaker, how do we 
actually solve the long-term problems that we have in our 
Highway Trust Fund. I spent 16 years as a congressional staffer 
working with local communities before I got elected making sure 
that they knew how to fund their long-term projects. So this 
Highway Trust Fund problem didn't start when I got here 6\1/2\ 
years ago. It started long before this. And we, in this 
committee, have continued to lead in making sure that we put 
good funding solutions together, but we can do better.
    Now, I hope all of us in this room agree that the roadways 
are going to look much different in the next 10 years. Let's 
look at Europe, for example. President Macron said that in the 
next 10 years he doesn't envision any fossil fuel burning on a 
roadway in France. You don't think that is going to have an 
impact on the rest of the EU? Unless they have a Frexit. It is 
going to be huge. You don't think that is going to come over 
here?
    I mean look, I hope we are selling a lot of Rivian small 
trucks and SUVs out of my district. We didn't sell enough 
Mitsubishis which means that plant shut down. And now it is 
reopening. So we look ahead. I want to commend ARTBA for 
helping to lead the charge in the past, for helping to look at 
diversification. That is leadership. We need to do more of that 
and less about politics here in this committee. That is what I 
hope we do here.
    Now, I mentioned diversification. I got 1 minute and 36 
seconds left after my 3\1/2\-minute filibuster. Who wants to 
answer what can we do to diversify? Do you agree that we need 
to diversify, number one. And what do you recommend?
    Mr. Alger. So I will take the lead on that. You know, we 
have had the BOLD Act in place at ARTBA for quite some time 
now. We have been talking about this. As I talked about, 31 
States have done some sort of a gas, diesel tax increase. It is 
nonpolitical, it is simple, it is easy, it is nothing that we 
shouldn't be doing anyway.
    ARTBA members have long been open to user-based growing 
revenue alternatives to the motor fuels user fee to support the 
Nation's aviation infrastructure system. The 6.25-percent air 
cargo tax was imposed in 1972 as a cost of moving goods for 
transportation. Congress could apply the same concept to 
surface transportation infrastructure through either a 
commercial truck air cargo tax companion or a vehicle-miles tax 
on trucks.
    And then combining the freight fee with electric user 
vehicle fees collected on the battery manufacturers level or as 
a registration fee, like 27 States do now, can serve as a 
strong base alternative to motor fuel tax increases. Or better 
yet, combine the two and then you have even got two mechanisms 
that will adjust the tax.
    Mr. Davis. And those are the types of debates that we need 
to have here. Look, this committee, during my time here, was 
asked by the barge industry--our water resources, our locks and 
dam, our inland waterway and navigation system, it runs through 
my district in Illinois--it is so important for us to get 
products out into the global marketplace, they asked for a 
voluntary fee increase. You know what? It passed unanimously, I 
believe, out of this committee room. Not one person has been 
criticized for that because it was working within industry; we 
were working within the institution.
    Now my biggest problem is, is the Corps of Engineers going 
to spend that money wisely. We went from no money to wondering 
what to do; now we have a surplus, wondering if the Corps of 
Engineers is going to actually invest in upgrading our inland 
waterway system. That is a good problem to have. We don't have 
that in highways and bridges and transit right now. But this 
committee leads. This committee does it, and I look forward to 
working with the chair to make sure we have good commonsense 
solutions like that coming forward.
    Mr. Alger, thank you for those other options. Thank you for 
your time. And Mr. Skoutelas, Mr. Gerend, thank you for your 
time. I promise I won't ask another round of questions. I yield 
back.
    Ms. Norton. Well, that was a very useful round 2 to the 
close on it. I thank the ranking member. You can see the 
ranking member is searching for ways to respond to your 
testimony indicating what is necessary if we are going to 
proceed, and the fact that the issue of gas tax increases has 
become so prominent in this testimony was not one shunned by 
the ranking member, but encouraged more questions for him. And 
I want to ensure him that I want to work with him to find a way 
to get through this conundrum that the States have somehow 
managed to get through, your figure of 31 States. My State, the 
District of Columbia, has raised its gas tax. I wouldn't be 
surprised if the ranking member's State has as well.
    Mr. Davis. They just doubled it.
    Ms. Norton. Just doubled it, he says. So we have lots of 
encouragement from you and from our own jurisdictions. I want 
to say to the ranking member how much I appreciated his 
forward-thinking remarks on how France will get to no fossil 
fuels in no time flat because it shows his understanding and 
concern about climate change, indeed about the revenue that 
could be yielded by doing what France is doing, and that is 
turning away from fossil fuel to other modes of energy.
    So I want to indicate, I want to thank you, I was not aware 
that France was that far ahead of us, and I want to encourage 
the ranking member that I would like very much to work with him 
on this issue, as well, which is very much related to our 
committee. I think the transportation is second in use of 
fossil fuels in the United States.
    If there are no more questions, then I would certainly like 
to thank our witnesses. You were held overtime because of the 
interest of the ranking member and me in your testimony. I want 
to thank each and every one of you for very helpful testimony 
today. Your contribution has not only stimulated us, but will 
certainly go into our thinking about the 2020 reauthorization.
    I ask unanimous consent that the record of today's hearing 
remain open until such time as our witnesses have provided any 
answers that may have been requested by Members or that they, 
themselves, want to submit in writing. I thank the ranking 
member for his questions, and I ask unanimous consent that the 
record remain open for 15 days for any additional comments and 
information submitted by Members or witnesses to be included in 
the record of today's hearing.
    Without objection, so ordered.
    If no other Members have anything to add, the subcommittee 
stands adjourned.
    [Whereupon, at 12:55 p.m., the subcommittee was adjourned.]


 
                       Submissions for the Record

                              ----------                              


  Prepared Statement of Hon. Sam Graves, a Representative in Congress 
     from the State of Missouri, and Ranking Member, Committee on 
                   Transportation and Infrastructure
    Thank you, Chairwoman Norton, and thank you to our witnesses for 
being here today.
    I also want to welcome Mr. Tom Gerend--a fellow Missourian who's 
testifying on behalf of the Kansas City Streetcar Authority.
    The Kansas City Streetcar Main Street Extension project is 
currently working its way through the Captial Investment Grant (C.I.G.) 
process.
    To date, the streetcar has transported more than 6 million 
passengers along a corridor in Kansas City that has more than $3 
billion in economic development underway leading to more than 36 
percent increase in the market value of property within the 
transportation district.
    The expansion that is being applied for will hopefully build upon 
this record and deliver a strong return on investment for the taxpayers 
and for the city.
    Today's hearing enables the Committee to:
      Exercise its responsibility for oversight of Federal 
transportation program spending; and
      Gather ideas on how to improve this program as we work to 
develop the next surface transportation reauthorization bill.

    Congress established clear criteria and a transparent selection 
process for evaluating projects that are seeking C.I.G. funding.
    We need to maintain proper oversight of the taxpayer money that is 
being used for these projects across the country.
    Also, these Federal investments need to go to projects that provide 
transit services that our constituents will want to use.
    At a time when many people are seeking different mobility options, 
Congress needs to ensure that federal investments in transit projects 
relieve congestion in local communities, make commutes safer, and are a 
good use of taxpayer money. With that, I look forward to hearing from 
today's witnesses.
    I yield the balance of my time.

                                 
 Prepared Statement of Hon. Eddie Bernice Johnson, a Representative in 
                    Congress from the State of Texas
    Thank you, Madam Chairwoman.
    It is with great appreciation that I thank the Chairwoman for 
holding this hearing today, as it allows us to review the Federal 
Transit Administration's (FTA's) implementation of Capital Investment 
Grant (CIG) Program, considering the Administration's FY 2018 and 
FY2019 budget requests to phase out the program, and the June 29, 2018 
FTA Dear Colleague letter to transit agencies.
    In the FTA's Dear Colleague letter of June 29, 2018, FTA stated it 
would publish revised policy guidance on how it administers this 
program for notice and comment. Today, I am eager to hear from the 
Acting FTA Administrator on the progress of publishing its revised 
policy guidance and the comments received in response.
    Moreover, in her written testimony today, Acting Administrator 
Williams noted that the FTA is complying with statutory requirement in 
its implementation of the CIG program. That assertion does not seem to 
be accurate.
    Specifically, the FTA's Dear Colleague letter changed statutory 
requirements for the CIG program by not allowing the use of other U.S. 
Department of Transportation loans, which would be repaid by non-
Federal funds, to be considered as project sponsor funds. Thus, FTA 
causes project sponsors to raise additional funds that are not required 
by statute.
    Finally, FTA is placing the blame for all delays in processing an 
application for a CIG grant on local officials without taking any 
responsibility for its own internal processing and changing of criteria 
in assessing applications that are contrary to the statute. Only two 
CIG Funding Agreements were executed and not withdrawn in 2017 and 
2019. Why does it take so long for the FTA to review and approve an 
application?
    I am ready to work with my colleagues in fulfilling our oversight 
responsibilities and ensuring FTA's implementation of this program is 
complying with statutory requirements.
    I look forward to hearing your testimony and solutions from 
stakeholders to improve FTA's implementation of the Capital Investment 
Grant Program.
    Thank you. I yield back.

                                 
Report, Subcommittee on Highways and Transit, Majority Staff, July 16, 
        2019, Submitted for the Record by Hon. Peter A. DeFazio
        
        
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                             July 16, 2019
    TO:       Members, Subcommittee on Highways and Transit
    FROM:   Majority Staff, Subcommittee on Highways and Transit
    RE:       Oversight of the Federal Transit Administration's 
Implementation of the Capital Investment Grant Program
_______________________________________________________________________

    Transit industry stakeholders have raised concerns about the 
implementation of the Capital Investment Grant Program (CIG) in recent 
years, including the slow pace of decision-making and new policy 
guidance leading to costlier projects and a higher required local cost 
share. In order to further examine concerns raised with the Committee 
and to ensure compliance with the law, Chairman DeFazio and Ranking 
Member Graves sent a bipartisan letter to the Federal Transit 
Administration (FTA) and dozens of transit agencies on March 8, 2019, 
seeking ``data that will allow us to conduct a quantitative analysis of 
the CIG program and its operations under the FAST Act.''
    The findings below are based on a majority staff review of data 
provided to the Committee. Results have been consolidated to ensure the 
identity of individual projects or agencies remain confidential. 
Analysis of certain project data under the CIG program and the 
findings, detailed below, corroborate the concerns raised by transit 
agencies.
Finding 1: Transit agencies face significantly longer timeframes for 
        decision-making by FTA under this Administration
        
        
        
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Transit agencies have continued to express frustration over the 
long wait times for project approvals and the lack of clear and timely 
communication from FTA on the causes of a delay or a timeline for 
approval. A review of the data confirms significantly longer approval 
times for decisions under the CIG program by this Administration. The 
analysis examined the number of days to get approval into Engineering 
and to execute Full Funding Grant Agreements (FFGAs) for New Starts 
projects and Small Starts Grant Agreements (SSGAs) for Small Smarts 
projects.\1\
---------------------------------------------------------------------------
    \1\ Full Funding Grant Agreement, (FFGA) is a multiyear agreement 
between the federal government and a transit agency that establishes 
the terms and conditions for federal financial participation, including 
the maximum amount of federal funding that is committed. A Small Starts 
Grant Agreement (SSGA), is similar to an FFGA but for a transit project 
seeking less than $100 million in a CIG grant and typically commits the 
funding in a single year.
---------------------------------------------------------------------------
    The number of days for approval more than doubled under this 
administration, demonstrating a signicant delay in project approval. 
These delays affected projects regardless of their size, indicating 
that the delays had nothing to do with the complexity of projects.
Finding 2: FTA actions have resulted in at least $845 million in extra 
        costs for transit agencies
    The risk assessment is a third party assessment of the project 
risks and their effects on the project's timeline and cost estimate. It 
also calculates the amount of contingency funding that FTA will require 
the project sponsor to have in order to cover potential cost overruns.
    The Committee requested information from transit agencies 
documenting higher project costs resulting from changes in the risk 
assessment process and delays in approving projects, and reviewed 
aggregated data provided by a subset of transit agencies willing to 
report data. Changing the probability threshold in the risk assessment 
process from 50 percent to 65 percent added an additional $650 million 
to total project costs for these projects. In addition, the data also 
revealed $195 million in additional project costs from delays in the 
approval process.
    In total, the data revealed approximately $845 million in 
additional project costs created unnecessarily by FTA actions. These 
additional costs were generally covered by local dollars, forcing local 
governments to scramble to pay for federal inaction. The identified 
cost overruns do not represent costs for all agencies, only a subset 
from those willing to report them, and therefore is an incomplete 
figure.
Finding 3: The federal cost share for New Starts projects is shrinking


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    The Committee has also been made aware that transit agencies have 
felt pressured by FTA staff to seek lower federal shares in order to be 
approved for a CIG grant. The data provided demonstrates the effect of 
this pressure; the CIG cost share for New Start projects has dropped 
over 10 percent in the last two years. The data reveals that currently, 
the average CIG cost share for New Starts projects is 36.6 percent. 
This is below the arbitrary 40 percent cap that FTA has unofficially 
communicated to transit agencies should be their cost share goal. This 
unofficial policy is directly contrary to 49 U.S.C. Sec.  5309(l)(5), 
which states: ``[n]othing in this section [49 U.S.C. Sec.  5309] shall 
be construed as authorizing the Secretary to require a non-Federal 
financial commitment for a project that is more than 20 percent of the 
net capital project cost.''
Finding 4: Project sponsors are waiting longer for approval to use 
        streamlining tools
        
        
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    CIG projects move through a lengthy and strenuous process. Upon 
nearing final project approval, project sponsors may request a Letter 
of No Prejudice (LONP) to allow them to begin work before final 
approval on the most time sensitive components of the project. LONPs 
can lead to significant cost savings and may reduce the potential for 
schedule delays later in the project.
    LONPs are not a commitment of funds, but a cost saving measure and 
streamlining tool. Given the importance the Administration has placed 
on streamlining project approvals, expediting LONPs would be logical. 
However, committee data shows that the number of days required to 
approve a LONP rose by 44 percent in the current Administration.
Finding 5: Transit agencies and FTA are working from different 
        timelines
    A comparison of the data FTA submitted and the data transit 
agencies submitted revealed large disparities in terms of timelines in 
the Project Development phase. The dates provided by FTA and transit 
agencies matched as little as 39 percent of the time.


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    The data shows that FTA and project sponsors are frequently not in 
agreement on the date a project moves from one phase to the next. This 
finding raises concerns about a lack of coordination, understanding, 
and bureaucratic complexities in the CIG program. This finding also 
supports calls for a CIG program dashboard.

                                 
 Statement of Randal O'Toole, Senior Fellow, Cato Institute, Submitted 
             for the Record by Hon. Sam Graves of Missouri
    My name is Randal O'Toole and I'm a senior fellow with the Cato 
Institute, which is located at 1000 Massachusetts Avenue NW, Washington 
DC. I've worked on urban transportation issues for 24 years, including 
writing numerous papers on the transit capital improvement grant 
program, also known as New Starts.
    New Starts is one of the most destructive programs the United 
States has ever inflicted upon its cities. It is comparable to the 
federal urban renewal programs created in 1949 that were devastatingly 
critiqued by Jane Jacobs in her book, The Death and Life of Great 
American Cities. New Starts has prompted transit agencies to go heavily 
into debt in order to build antiquated transportation systems whose 
high costs and low capacities do nothing to solve, and in many cases 
exacerbate, urban transportation problems.
    The first problem with New Starts is that it is an open-ended 
fund--what I call an ``open bucket'' fund--that encourages transit 
agencies to develop the most expensive transit projects possible in 
order to get the most federal money. As a result, the cost of otherwise 
similar projects has increased by more than ten times since the early 
1980s.
    In 1981, San Diego built the first modern light-rail line without 
any federal support. It spent an average of about $7 million a mile on 
the line, which in today's dollars is $17 million a mile.
    Later in the 1980s, several cities including Portland, Sacramento, 
and San Jose used federal highway turn-back funds, in which cities were 
allowed to use federal funds for cancelled interstate highways on 
transit capital improvements instead, to build light rail. They chose 
light rail because it was expensive and a way to absorb all of the 
highway funds. They spent an average of about $30 million a mile, in 
today's dollars, building those lines.
    By the 1990s, under New Starts, the average cost of light-rail 
projects had risen to about $75 million a mile in today's dollars. In 
the 2000s, it had grown to more than $100 million a mile. Today, the 
average cost of light-rail projects on the New Starts project list is 
more than $220 million a mile, and none are less than $110 million a 
mile. This increase in costs is mainly if not solely because transit 
agencies have competed with one another to get ``their share'' of 
federal New Starts funds.
    The second major problem with New Starts is that it has encouraged 
cities to adopt obsolete technologies so they can spend this much 
money. Light rail and streetcars were rendered obsolete in 1927, when a 
bus designer named William Fageol developed the first bus that was both 
less expensive to buy and less expensive to operate than streetcars. In 
the following ten years, more than 500 American cities converted their 
streetcars to buses. The supposed General Motors streetcar conspiracy, 
which began in 1937, was actually an effort by General Motors to 
capture market share from Fageol, not an effort to shut down streetcars 
which was happening anyway.
    The main reason, other than cost, why light rail is obsolete is 
that it is low-capacity transit, despite claims by transit agencies to 
the contrary. The ``light'' in light rail refers not to weight--light-
rail cars actually weigh more than heavy-rail cars--but to capacity. 
According the American Public Transportation Association's transit 
glossary, light rail has ``a light volume traffic capacity.'' 1 
Buses, in fact, have much higher capacities to move people than most 
rail.
    This seems counterintuitive since a bus can hold, at most, about 
100 people while light-rail cars can hold 150 and be strung together in 
trains of two, three, or four cars. But for safety reasons, a light-
rail line can move no more than about 20 trains per hour, limiting its 
capacity to 6,000, 9,000, or 12,000 people per hour (depending on the 
number of cars).
    By comparison, busways can safely move hundreds of buses per hour. 
There are busways around the world that take up no more land than a 
light-rail line but routinely move twice as many people per hour as the 
highest-capacity light-rail line in the United States. As a report from 
the Institute for Transportation & and Development Policy concluded, 
``there are currently no cases in the US where LRT [light-rail transit] 
should be favored over BRT [bus-rapid transit].'' 2 Yet, 
thanks mainly to New Starts, it has been built in 29 urban areas.
    Transit agencies' claims that rail transit stimulates economic 
growth are contradicted by research funded by the Federal Transit 
Administration. This concluded that ``Urban rail transit investments 
rarely `create' new growth, but more typically redistribute growth that 
would have taken place without the investment.'' 3 In other 
words, the presence of a rail line might influence where a new 
development is located, but the development would have taken place with 
or without the rail line.
    A more recent study found that, far from contributing to economic 
growth, spending on unproductive infrastructure can lead to ``economic 
fragility.'' 4 This can be seen in San Jose's Valley 
Transportation Authority, which has gone so heavily into debt building 
light rail that, in any recession, the agency must choose between 
making heavy cuts to transit service or defaulting on its debt. As a 
result, it has lost more than a third of its riders since its 2001 peak 
and ridership in 2018 was the lowest in its history. It can also be 
seen in the Los Angeles Metro system, which cut bus service and raised 
fares in order to help fund new light-rail lines, with the result that 
it has lost more than four bus riders for every new rail rider.5
    Indeed, the construction of rail transit lines funded by New 
Starts has rarely been good for transit riders. Dallas Area Rapid 
Transit is proud of the fact that it has built more miles of light rail 
than any agency in the country. What it fails to mention is that, 
before it started building light rail, transit carried 2.8 percent of 
Dallas-area commuters to work. By 2017, this had declined to 1.6 
percent. Portland is supposed to be a great light-rail success story, 
but in 1980, before it started building light rail, transit carried 9.9 
percent of commuters to work. Today, Portland has five light-rail 
lines, a commuter-rail line, and a streetcar line, and transit carried 
just 7.9 percent of commuters to work in 2017.
    Other reasons used to justify expensive projects are that they help 
the poor and are good for the environment. Neither are true. Most low-
income people today own a car and the number who depend on transit to 
get to work is very small. Census data show that people who earn less 
than $25,000 a year were significantly less likely to commute by 
transit in 2017 than they were a decade ago, whereas people who earn 
more than $75,000 are significantly more likely to commute by transit 
than a decade ago. Indeed, the above-$75,000 income class is transit's 
biggest growth market, and people in this income class hardly need 
transportation subsidies.6 These trends are partly because 
New Starts has encouraged transit agencies to build expensive rail 
lines catering to the middle- and upper-middle class, while they cut 
service to low-income neighborhoods.
    As for transit being greener than driving, that is only true in a 
handful of places. Outside of New York, San Francisco, Portland, and 
Honolulu, transit uses more energy and emits more greenhouse gases per 
passenger mile than the average car. New rail transit lines may save a 
little energy compared with buses, but the energy and greenhouse gas 
cost of building those lines is so large that it would require many 
decades of savings to pay back that cost.7
    Streetcars and new commuter rail lines are just as bad as 
light rail. As illustrated by Washington's H Street streetcar, 
streetcars are basically just a way to spend federal dollars, as they 
provide no economic or transportation benefits. Many recent commuter-
rail lines, including lines in Austin, Dallas-Ft. Worth, Minneapolis, 
Miami-Ft. Lauderdale, Nashville, Orlando, Portland, and Salt Lake City, 
were so expensive and carry so few riders that it would have been less 
expensive to give every daily round-trip riders a new Toyota Prius 
every other year--and in some cases every year--for the life of the 
rail project.8 In 2017, fare revenues from Orlando's SunRail 
didn't even pay for the cost of operating the ticket machines, much 
less the trains.9
    Heavy-rail lines built in Baltimore, Los Angeles, and Miami 
have all flopped as well. While heavy rail may make sense in New York 
City, spending more than $2 billion a mile building more subways 
doesn't make sense, especially when the New York Metropolitan 
Transportation Authority has a $41 billion debt, a $60 billion 
maintenance backlog, and $20 billion in unfunded pension and health 
care obligations.
    Peter Rogoff, who was President Obama's first administrator of the 
Federal Transit Administration, said it best: ``paint is cheap; rail 
systems are extremely expensive.'' By that, he meant that ``you can 
entice even diehard rail riders onto a bus, if you call it a `special' 
bus and just paint it a different color than the rest of the fleet,'' 
in other words, start a bus-rapid transit line.10
    In conclusion, Congress should not reauthorize New Starts or 
Small Starts. If Congress wants to continue contributing funds to 
transit agencies, the money now going to New Starts should be put in a 
formula fund whose formula depends heavily on the fare revenues 
collected by transit agencies. Transit agencies should be allowed to 
use these funds, without a local match, for buying buses, 
rehabilitating worn-out transit infrastructure, or building new 
infrastructure. Basing the formula on fares will more fairly distribute 
funds across the country and encourage transit agencies to put their 
riders first, and to emphasize programs that increase ridership rather 
than ones that increase costs.
                                 notes
1. Glossary of Transit Terminology (Washington: American Public Transit 
Association, 1994), p. 23, tinyurl.com/y5m5tm6x.

2. Walter Hook, Stephanie Lotshaw, and Annie Weinstock, More 
Development for Your Transit Dollar: An Analysis of 21 North American 
Transit Corridors (New York: Institute for Transportation & and 
Development Policy, 2013), p. 21, tinyurl.com/y3yxl2ge.

3. Robert Cervero and Samuel Seskin, An Evaluation of the Relationships 
Between Transit and Urban Form (Washington: Transit Cooperative 
Research Program, 1995), p. 3, tinyurl.com/24ggm2j.

4. Atif Ansar, Bent Flyvbjerg, Alexander Budzier, and Daniel Lunn, 
``Does Infrastructure Investment Lead to Economic Growth or Economic 
Fragility? Evidence from China,'' Oxford Review of Economic Policy, 
Volume 32, Number 3, 2016, pp. 360-390, arxiv.org/pdf/1609.00415.pdf.

5. National Transit Database Historic Time Series (Washington: Federal 
Transit Administration, 2018), table TS2.1, tinyurl.com/y52ta9t5.

6. For more information on ridership trends, see Randal O'Toole, 
Transit's Growing Costs Drive Away Low-Income Commuters (Camp Sherman, 
OR: Thoreau Institute, 2019), ti.org/pdfs/TPB1.pdf.

7. Randal O'Toole, Does Rail Transit Save Energy or Reduce Greenhouse 
Gas Emissions? (Washington: Cato Institute, 2008), tinyurl.com/
y2uz7f4d.

8. For an explanation of how this was calculated as well as data for 20 
different commuter-rail systems, see Randal O'Toole, ``Dumb Trains,'' 
The Antiplanner, November 27, 2018, ti.org/antiplanner/?p=15347.

9. Kevin Spear, ``SunRail Ticket Revenue is Less Than Ticketing 
Expense,'' Orlando Sentinel, February 24, 2017, tinyurl.com/y4z4jj8h.

10. Peter Rogoff, ``Next Stop: A National Summit on the Future of 
Transit,'' presentation at the Federal Reserve Bank of Boston, May 18, 
2010, tinyurl.com/y6o24puu.


 
                                Appendix

                              ----------                              


 Question from Hon. Peter A. DeFazio to Hon. K. Jane Williams, Acting 
             Administrator, Federal Transit Administration

    Question 1. Acting Administrator Williams, I'd like to understand 
the final stages of the CIG approval process better.
    After career staff verify a project has met all the legally 
required metrics, please tell the Committee how many political 
appointees, and how many offices within FTA and the Office of the 
Secretary have to approve the project before a grant agreement is 
signed.
    Answer. For a CIG construction grant agreement, FTA officials in 
the budget, legal, program, policy, and regional offices review and 
approve the agreement prior to the FTA Administrator's review. Once the 
FTA Administrator approves the agreement, it is forwarded to officials 
in the Office of the Secretary to review and concur in the Acting 
Administrator's recommendations in order to ensure compliance with 
Departmental policy and Federal law prior to Secretarial action.

  Questions from Hon. Henry C. ``Hank'' Johnson, Jr. to Hon. K. Jane 
     Williams, Acting Administrator, Federal Transit Administration

    Question 2. Your testimony speaks to local issues that can inhibit 
projects from advancing through the CIG pipeline. However, several of 
these impediments are generated by FTA itself. For example, the transit 
agency is forewarning project sponsors that they'll likely need to 
overmatch funding to even receive a grant. This isn't federal law, and 
wouldn't be enforced in a court of law.
    What's the plan to move these projects through the pipeline if 
local sponsors are unexpectedly required to foot larger portions of the 
bill?
    Answer. The law specifically requires FTA to consider the amount of 
local financial commitment that exceeds the required non-government 
share of the cost of the project. (49 U.S.C. 5309(f)(2)(E)). This has 
been a long-standing consideration for the program by all 
Administrations dating back to the program's origins in the mid-1970s.
    By conducting effective project risk assessments, FTA and the 
project sponsor can identify more accurate project cost estimates prior 
to entry into Engineering for New Starts and Core Capacity projects, 
creating the opportunity for adjustments to be made to the project 
budget earlier in the process.
    Projects continue to move through the CIG pipeline. Since January 
2017, FTA has advanced funding for 25 projects totaling $7.6 billion in 
CIG funding commitments. FTA maintains close contact with project 
sponsors throughout the process to maximize coordination.

    Question 3. If FTA is committed to funding robust public 
transportation systems, why are they insisting, beyond what's indicated 
in statute, that project sponsors allot more funds than they're 
required to for these projects?
    Answer. FTA administers the CIG program in accordance with 
statutory requirements, which establish a maximum Federal share (49 
U.S.C. 5309(l)(1)(B)). Further, the law explicitly requires that FTA 
consider the extent to which a CIG project has a local financial 
commitment that exceeds the required non-government share of the cost 
of the project. (49 U.S.C. 5309(f)(2)(E)).

    Question 4. In the Project Development phase of New Starts and Core 
Capacity projects, applicants are required by the National 
Environmental Policy Act (NEPA) to conduct an environmental review of 
the projects for which they're seeking CIG funding.
    The Trump Administration has taken steps to roll back the 
environmental review process for federal infrastructure projects--is 
that correct?
    Answer. Executive Order (EO) 13807 ``Establishing Discipline and 
Accountability in the Environmental Review and Permitting Process for 
Infrastructure Projects'' was signed on August 15, 2017. EO 13807 does 
not roll back the environmental review process but instead addresses 
the need for a more efficient, coordinated, predictable, and 
transparent Federal environmental review process for infrastructure 
projects while protecting public health, safety, and the environment.

    Question 5. Can you explain how these rollbacks to environmental 
review process are compatible with FTA's requirements for the Project 
Development phase of their grant approval process?
    Answer. EO 13807 does not roll back the environmental review 
process.

    Question 6. Does FTA have any concern that they may be approving 
projects improperly vetted for their potential environmental threat to 
nearby ecosystems or communities?
    Answer. FTA does not have any concerns. All projects must complete 
the NEPA process before they are eligible for CIG funding.

Questions from Hon. Alan S. Lowenthal to Hon. K. Jane Williams, Acting 
             Administrator, Federal Transit Administration

    Question 7. Is FTA tracking cost increases incurred by local 
governments that have bids expire while waiting for a Full Funding 
Grant Agreement?
    Answer. The terms and details of project procurements are 
negotiated by CIG project sponsors. FTA tracks project sponsors' 
progress on advancing design and procurements for proposed projects, 
but is not involved in the contract preparations, reviews, or 
negotiations. Project sponsors develop and manage the project schedule 
and, if necessary, seek a Letter of No Prejudice from FTA to allow a 
contract award to proceed with work in advance of a CIG construction 
grant award.

    Question 8. What steps is FTA taking to address delays and 
streamline the New Starts process to avoid these cost increases?
    Answer. FTA works closely with project sponsors during each phase 
of the CIG process to communicate next steps and requirements. The 
timing of CIG construction grant awards depends on project sponsors 
completing the requirements in law. Project schedules can, and often 
do, change as project sponsors work to get actions completed at the 
local level--such as obtaining local funding commitments, completing 
all critical third-party agreements, and developing a firm and final 
cost, scope, and schedule.

    Questions from Hon. Sam Graves to Hon. K. Jane Williams, Acting 
             Administrator, Federal Transit Administration

    Question 9. How many days, on average, did it take to issue a 
letter of no prejudice during the first two years of the Obama 
Administration?
    Answer. Between January 20, 2009 and December 31, 2010, the first 
two years of the Obama Administration, FTA approved 31 Letters of No 
Prejudice (LONP). The average timeframe to approve the LONPs from the 
date complete information was submitted to FTA was 40 days.

    Question 10. How many days, on average, did it take to issue a 
letter of no prejudice during the first two years of the Trump 
Administration?
    Answer. Between January 21, 2017 and December 31, 2018, the first 
two years of the Trump Administration, FTA approved 15 LONPs. The 
average timeframe to approve the LONP from the date complete 
information was submitted to FTA was 53 days.

    Question 11. When did the Federal Transit Administration change the 
probability threshold from 50 to 65 as part of the risk assessment 
process?
    Answer. From 2007-2016, FTA required sponsors to meet a 65 percent 
probability threshold that the project could be completed within 
budget. It was only recently (from mid-2016 to mid-2018) that FTA used 
the 50 percent probability threshold.

    a.  What was the reason for that change?
        Answer. FTA is required by law to ensure ``the reliability of 
the forecasting methods used to estimate project costs.'' (49 U.S.C. 
5309(d)(2)(B)(i)). FTA has found that better cost estimates improve 
project delivery and protect the taxpayer investment.

    b.  What is the impact of that change?
        Answer. FTA's data demonstrates that the current risk 
assessment process reduces unnecessary costs and delays by identifying 
and mitigating problems earlier in the process. The return to the 2007-
2016 risk assessment 65 percent probability threshold has ensured that 
projects are more likely to be delivered within budget and gives the 
public more accurate information about project costs and budgets, so 
that taxpayer dollars are invested responsibly. This has significantly 
improved the delivery of CIG projects within budget and on schedule.

        Comparing 13 completed projects that did not use the 2007 risk 
assessment tool with 28 completed projects that did use the tool, the 
percentage of projects completed within budget increased from 62 to 89 
percent and the percent completed within schedule increased from 69 to 
79 percent. FTA's data demonstrates that the current risk assessment 
process reduces unnecessary costs and delays by identifying and 
mitigating problems early. When FTA tested the 50 percent probability 
threshold for two years, there was evidence that an increased number of 
projects would exceed their budgets.

    c.  Did it increase costs for project sponsors?
        Answer. The risk assessment process does not change or increase 
what it will actually cost a project sponsor to construct a project. 
FTA is required by law to ensure ``the reliability of the forecasting 
methods used to estimate project costs.'' (49 U.S.C. 5309(d)(2)(B)(i)). 
The risk assessment is the tool FTA uses to meet this requirement.

        In instances where the project sponsor's cost estimate is 
determined not to be reliable, based on the results of the risk 
assessment, FTA would require the sponsor to develop a more reliable 
cost estimate and corresponding project budget. The risk assessment 
process therefore ensures that project cost estimates are realistic and 
achievable.

    d.  Was there a prior time when the probability threshold was 65? 
If so, when?
        Answer. From 2007 to 2016, FTA required sponsors to meet a 65 
percent probability threshold that a project could be completed within 
budget. It was only recently (from mid-2016 to mid-2018) that FTA used 
the 50 percent probability threshold.

   Questions from Hon. Rodney Davis to Hon. K. Jane Williams, Acting 
             Administrator, Federal Transit Administration

    Question 12. What steps can the Administration take to ensure that 
communities in rural areas can take advantage of the Capital Investment 
Grant program?
    Answer. Although small urban project sponsors have secured CIG 
grants in the past, primarily through Small Starts Bus Rapid Transit 
projects, the CIG program evaluation criteria are structured such that 
densely-populated corridors are most likely to be successful in the CIG 
program. FTA will continue working with Congress to ensure that as many 
communities as possible can benefit from our Federal partnership, 
whether through the CIG program or other FTA opportunities.

    Question 13. Are there any policy proposals that this Committee 
should consider as it works to develop the next surface transportation 
reauthorization bill that would further this objective?
    Answer. FTA routinely communicates with Congressional and industry 
stakeholders. FTA will certainly continue working with Congress through 
surface transportation reauthorization discussions and other avenues 
that to ensure as many communities as possible can benefit from our 
Federal partnership, whether through the CIG program or other FTA 
opportunities.

    Question from Hon. Rob Woodall to Hon. K. Jane Williams, Acting 
             Administrator, Federal Transit Administration

    Question 14. Charts were displayed at the hearing that illustrated 
concerns with the Federal Transit Administration's (FTA) implementation 
of the Capital Investment Grant program.
    Can FTA please provide the Committee with any information or 
documentation that clarifies or explains those charts?
    Answer. Overall, as stewards of billions of taxpayer dollars, 
including one of U.S. DOT's largest discretionary grant programs, FTA 
must be certain that funding decisions are properly reviewed to ensure 
that projects are delivered within budget and on schedule. FTA does 
have specific responses to the Committee's findings displayed at the 
hearing as follows:
Finding #1: Transit agencies face significantly longer timeframes for 
        decision-making by FTA under this Administration
    First, FTA would note that the Committee based its findings on the 
date of the project sponsor's initial request for approval, not the 
date on which all required information was received and considered 
complete by FTA. FTA cannot act on incomplete requests, as there can be 
significant delays in acquiring this information in order to complete 
their request.
    In addition, project timelines often vary, primarily due to local 
decisions or other issues outside of FTA's control. Simply measuring 
the days between a request and an approval does not capture project-
specific factors. For example, the Committee considers the Maryland 
Purple Line project to have waited 455 days for an FTA decision on its 
Full Funding Grant Agreement (FFGA). The data does not note that, for 
over a year of that timeframe, the project was subject to litigation in 
Federal court--including a court order precluding FTA from executing 
the FFGA, so that FTA could not act until the litigation was resolved.
Finding #2: FTA actions have resulted in at least $845 million in extra 
        costs for transit agencies
    The risk assessment process does not change or increase what it 
will cost to construct a project. FTA is required by law to ensure 
``the reliability of the forecasting methods used to estimate project 
costs.'' (49 U.S.C. 5309(d)(2)(B)(i)). The risk assessment process is 
the tool FTA uses to meet this requirement. In instances where the 
project sponsor's cost estimate is determined to be insufficiently 
reliable based on the risk assessment results, FTA requires the sponsor 
to develop a more reliable cost estimate and corresponding project 
budget. This is simply good governance--the risk assessment process 
ensures that project cost estimates are realistic and achievable with 
budgets sufficient for project delivery.
Finding #3: The federal cost share for New Starts projects is shrinking
    The statute requires FTA to consider the local financial commitment 
that exceeds the required non-government share for New Starts projects. 
(49 U.S.C. 5309(f)(2)(E)). This has been a longstanding consideration 
since the program began in the mid-1970s. FTA works to support as many 
projects as possible throughout the nation, in accordance with Federal 
law.
Finding #4: Project sponsors are waiting longer for approval to use 
        streamlining tools
    FTA would again note that the Committee based its findings on the 
date of the project sponsor's initial request for approval, not the 
date on which FTA found the request to be complete and include all 
required information. In addition, there were several extenuating 
factors affecting the approval of Letters of No Prejudice (LONPs), 
including:
      A 35-day lapse in appropriations, the longest Federal 
government shutdown in history, which affected at least two LONP 
approval timeframes.
      FTA determined it was prudent to consider whether to 
allow construction activities to begin on several projects seeking 
LONPs since the projects faced significant challenges, such as 
environmental lawsuits and vehicle manufacturer compliance issues.
Finding #5: Transit agencies and FTA are working from different 
        timelines
    Unfortunately, this data was not provided to FTA, so we cannot 
comment.

  Question from Hon. Gary J. Palmer to Hon. K. Jane Williams, Acting 
             Administrator, Federal Transit Administration

    Question 15. After the Obama Administration lowered the CIG 
probability threshold from P65 to P50, did the FTA see an increase in 
the number of CIG projects that would have failed to meet the P65 
threshold?
    Answer. Comparing 13 completed projects that did not use the 2007 
risk assessment tool with 28 completed projects that did use the tool, 
the percentage of projects completed within budget increased from 62 to 
89 percent and the percent completed within schedule increased from 69 
to 79 percent. FTA's data demonstrates that the current risk assessment 
process reduces unnecessary costs and delays by identifying and 
mitigating problems early. When FTA tested the 50 percent probability 
threshold for two years, there was evidence that an increased number of 
projects would exceed their budgets.

 Questions from Hon. Peter A. DeFazio to Robert E. Alger, Chairman of 
the Board, The Lane Construction Corporation, on behalf of the American 
               Road & Transportation Builders Association

    Question 1. Mr. Alger, your testimony highlights an issue that was 
the subject of our first hearing this Congress in the Transportation 
Committee--the impacts and costs of delaying projects. Your testimony 
cites that costs for delivering transit projects increases an average 
of five percent annually, which is twice the general inflation rate. 
You state that a project that costs $100 million in 2019 will cost $163 
million in 2029. Your testimony demonstrates that every day, failure to 
invest and advance projects to construction is literally throwing money 
away.
    Do you believe FTA truly understands that by dragging their feet on 
project approvals, they are wasting money, forgoing good jobs, and 
delaying economic benefits to communities across the country?
    Answer. Project delays are costly and problematic regardless of 
their origin. These costs are significant and add up over time. Whether 
project approvals, environmental reviews, or utility relocation are 
causes of delay, the longer improvements wait, the more expensive they 
become.
    Funding uncertainty is also a proven driver of delays in investment 
and increased project costs. While many transit initiatives, like the 
Capital Investment Grant (CIG) program, are traditionally supported 
with general revenue dollars through the annual appropriations process, 
continued uncertainty or disruption to Highway Trust Fund (HTF) program 
funding will adversely impact all federal surface transportation 
programs. As a recent example, during the run-up to the FAST Act, such 
uncertainty about federal investment and HTF solvency caused seven 
states to delay roughly $1.6 billion in planned transportation 
projects.
    To avert additional costly delays, ARTBA urges Congress to fix the 
HTF revenue shortfall once and for all.

    Question 2. Mr. Alger, your testimony shows that in 27 States, 
Federal funds account for 60 percent or more of transit capital 
outlays. Only 6 States rely on Federal funds for less than 40 percent 
of their transit capital needs. New York is one of those States, where 
Federal dollars make up 37 percent of transit capital budgets. That 
means New Yorkers supply the remaining 63 percent of funds needed for 
transit capital, not to mention all costs to operate the largest subway 
system in the country. New Jersey is similarly self-sufficient with 58 
percent of its capital needs coming from State and local funds, and 
California at 66 percent State and local funds.
    Would you agree that States who provide a significant share of 
funding for their transit capital needs deserve a robust partnership 
with the Federal government to advance critical projects?
    Answer. As indicated by the map provided in ARTBA's testimony, 
federal funds are a vital part of transit capital outlays in every 
state and the District of Columbia. More than 2,600 transit agencies 
used federal funds to support capital outlays, demonstrating the strong 
partnership between state and local transit agencies and the federal 
government.
    However, both sides of this partnership must increase investment in 
transit programs to make improvements necessary to connect people and 
communities.
    As you correctly indicate above, federal funds account for 60 
percent or more in transit capital outlays for over half of the country 
and accounts for, on average, 40 percent of all transit agency capital 
outlays. For those states falling below 40 percent, there is a greater 
role for the federal government to play.
    Given the variability in federal funds on transit capital outlays, 
ARTBA recommends only those phases of a project that are financed with 
federal dollars be subject to federal oversight in order to enhance 
project flexibility and reduce costly delays.

Questions from Hon. Henry C. ``Hank'' Johnson, Jr. to Robert E. Alger, 
Chairman of the Board, The Lane Construction Corporation, on behalf of 
        the American Road & Transportation Builders Association

    Question 3. Your testimony refers to, what you consider, 
unnecessary or prohibitive regulatory burdens to the delivery of 
transit projects. You refer to NEPA regulations as one of those 
regulatory burdens.
    Are you also unconcerned about the approval of projects that fail 
to meet acceptable environmental standards?
    Answer. If a project does not meet acceptable environmental 
standards, it would not be approved under NEPA. Thus, ARTBA is not 
concerned with the approval of such projects because an essential part 
of the review and approval process is ensuring acceptable environmental 
standards are met.
    ARTBA recognizes regulations play a vital role in protecting the 
public interest in the transportation project review and approval 
process. Such regulations add a sense of predictability and ensure a 
balance between meeting U.S. transportation needs and protecting vital 
natural resources. These goals, however, are not mutually exclusive. 
The most successful transportation streamlining provisions have been 
process oriented and have essentially found a path for regulatory 
requirements to be fulfilled in a smarter and more efficient manner.
    However, in recent years the rulemaking process has morphed from 
something intended to protect the public interest into a tool to 
achieve diverse policy and political objectives, many of which are 
largely unrelated to improving our transportation infrastructure. 
Furthermore, this process has been routinely unaccountable to affected 
interests, while often dismissing or undervaluing the project cost 
increases, delays and compromises in safety which can result.
    NEPA was never meant to be a statute enabling delay, but rather a 
vehicle to promote balance. While the centerpiece of this balancing is 
the environmental impacts of a project, other factors must also be 
considered, such as the economic, safety, and mobility needs of the 
affected area and how a transportation project or any identified 
alternative will address those needs.
    Regulatory reform is an essential part of any effort to ensure 
federal funding through the Capitol Investment Grant program is being 
spent in the most efficient manner possible. Reducing unnecessary 
delays in the project delivery process will allow allocated funds to 
have the maximum possible in terms of delivering projects.

    Question 4. Can you recommend what a more streamlined application 
and review process for CIG projects should look like?
    Answer. While recognizing the application and approval process is 
very complex and deserves a full study on what works well and what can 
be improved, ARTBA recommends the following enhancements to streamline 
delivery of CIG projects:
      Specific timelines--and limitations--should be put in 
place for the environmental process (receipt of a Record of Decision), 
preliminary design/engineering and FFGA approval stages of a CIG 
project. FTA should not be allowed to game the process by not starting 
the clock until they have unofficially gone through all the approval 
steps and are ready to grant an approval.
      FTA must ensure that projects are completely scoped out 
and the involved state/locality has fully approved the project to 
reduce mid-project re-scopings and costly change orders which can add 
cost and extend schedules.
      FTA project approvals and milestones are handled 
differently in different parts of the country by the agency's Regional 
Offices. Uniform, consistent and transparent approval processes must be 
applied across FTA regions--and across DOT modes.
      FTA should be granted the same flexibility as FHWA by 
being allowed to extend ``contract authority'' to projects so they can 
proceed while routine approvals move forward.
      Capital funding comes from a variety of state and local 
sources in addition to the federal contribution. Unlike most highway 
projects that have an 80-90 percent federal share, in many cases, CIG 
funding is a minority stake of the total project costs. Nonetheless, 
federal oversight is applied to the entire project, limiting 
flexibility in the construction of parts of a project not financed with 
federal funds. Only those phases of the project that are federally-
funded should be subject to federal oversight.
      Historically, transit projects have been allowed to use 
Federal Loan Programs such as TIFIA and RRIF as local match. Recent 
denial of such flexibility has delayed some critically important 
projects, which only increases their eventual cost and schedule. Since 
the loans are repaid with local dollars, they should be allowed to be 
counted as local match.
      Where two or more DOT modal administrations have 
oversight responsibilities for a project (where both agencies may be 
providing funds), evaluation and final decision for a Buy America 
waiver should be coordinated between the two agencies or issued by one 
mode and binding on the other mode. Currently, two separate reviews are 
required, which adds time, cost and confusion. When a Buy America 
waiver is granted, DOT should establish, through guidance, a process by 
which essentially similar waiver requests are granted, rather than 
engage in an entirely new process.

Questions from Hon. Peter A. DeFazio to Tom Gerend, Executive Director, 
                    Kansas City Streetcar Authority

    Question 1. Mr. Gerend, your KC Streetcar has exceeded expectations 
and drawn strong ridership and economic activity to Kansas City. You 
are currently seeking an expansion to the streetcar and it has been 
rated Medium-High by FTA. However, your project is currently seeking a 
48 percent cost share, just below the statutory cap.
    Has anyone at FTA suggested to you that your CIG share will have to 
be lower than 40 percent to get your expansion approved?
    Answer. No.

    Question 2. Do unwritten rules make project approval more 
difficult?
    Answer. Yes. Examples include:
    a.  National Office vs. Regional Office--Responses and feedback 
that require continued engagement with the national office, and leave 
the regional office standing by, slow the process
    b.  Local cost Share--General suggestions that reducing federal 
cost share below allowable levels will improve project's funding 
chances
    c.  Funding Commitment--Interpretation and determination of 
compliance with ``funding commitment'' requirements
    d.  Local Control--Expectations regarding specific local managerial 
processes, procedures, and controls (i.e., which scheduling system a 
local project sponsor chooses to use, etc.)
    e.  NEPA--Lack of consistency with regards to implementation and 
compliance with NEPA requirements.

 Questions from Hon. Peter A. DeFazio to Paul P. Skoutelas, President 
and Chief Executive Officer, American Public Transportation Association

    Question 1. Mr. Skoutelas, the Acting FTA Administer has testified 
that the FTA is doing better than the Obama Administration in getting 
CIG grants out the door and that any CIG project delays are the fault 
of project sponsors.
    Would APTA members in the CIG program concur with this assessment?
    Answer. We applaud both the Federal Transit Administration (FTA) 
and Congress' efforts to ensure that Capital Investment Grant (CIG) 
funds are invested in critical projects. We believe that the program 
has become a bureaucratic maze of statutory, regulatory, and 
administrative requirements. We believe that the Appropriations Act 
requirements to obligate 85 percent of CIG funds by a specific date 
helps move these projects through the CIG pipeline. We urge FTA to 
allocate and obligate the Fiscal Year (FY) 2018 and FY 2019 funds as 
soon as possible. We also strongly support a CIG Project Dashboard that 
would bring more transparency to FTA decision-making and project 
status.

    Question 2. Do you think it is indicative of a bigger problem if 
multiple projects are delayed?
    Answer. Delays cost money. These delays become a part of CIG 
project assumptions and they add risk to projects, which also costs 
money. These delays and added risks affect local decision-making, 
budgets, and support for critical CIG projects.

    Question 3. Mr. Skoutelas, many FTA policy changes are driving up 
the costs for local sponsors. The Committee staff memo has documented 
$845 million in higher costs. Risk Assessments policies are driving up 
contingency funds, and project delays are driving up project costs as 
the economy expands. These new costs fall almost exclusively on the 
project sponsor after the CIG share is locked in.
    Can you express to this Committee the frustration transit agencies 
are feeling with these new policies and their impacts on the projects?
    Answer. As the Committee has noted, project delays cost significant 
additional resources. As I mentioned in my written testimony, Capital 
Investment Grants are burdened by red tape. APTA advocates for a 
streamlined CIG process to ensure that good projects are being built 
and to protect the taxpayers' interest.

    Question 4. Are the cost overruns that are generally borne by local 
governments undercutting local support for transit projects?
    Answer. As any local elected official will tell you, any price 
increase or decrease to a project may influence support or opposition 
for a project. It is difficult for any local member to go back to 
voters and request an additional tax assessment to fund increased costs 
for projects. FTA's recent changes to Risk Assessments provide a good 
example. FTA required local sponsors to identify more contingency 
funding. From a local perspective, costs went up, even though nothing 
regarding the overall estimated cost of the project had changed, except 
FTA's requirements.

     Questions from Hon. Henry C. ``Hank'' Johnson, Jr. to Paul P. 
   Skoutelas, President and Chief Executive Officer, American Public 
                       Transportation Association

    Question 5. Under previous administrations, when a project applied 
for CIG funding, the FTA provided guidance to the project sponsor about 
what needed to be done to strengthen their application. The FTA under 
the Trump Administration doesn't appear to be following precedent, and 
is not offering this level of transparency.
    Can you describe the communication between the FTA and project 
sponsors?
    Answer. APTA has a great working relationship with the FTA and we 
look forward to continuing to work together to advance these critical 
public transportation capital projects. However, there is limited 
transparency on decision-making regarding CIG projects. We would like 
to have further clarification on how FTA is applying the June 2018 Dear 
Colleague letter and how it interprets the Transportation 
Appropriations Act provision limiting the use of the Dear Colleague 
policies.

    Question 6. Has the FTA provided sufficient guidance to transit 
agencies in addressing issues with their program so they can receive 
funding?
    Answer. There remains confusion surrounding FTA's consideration of 
U.S. Department of Transportation (USDOT) loans in the context of all 
Federal funding sources. While we have noted that some project sponsors 
have received Transportation Infrastructure Finance and Innovation Act 
(TIFIA) loans simultaneously with CIG grant agreements, we do not 
understand how FTA evaluates this issue, or what metrics it uses. APTA 
supports Congressional efforts to clarify this issue and ensure that 
TIFIA and Railroad Rehabilitation and Improvement Financing (RRIF) 
loans repaid with local funds are considered local match.

    Question 7. Do you believe that project sponsors may feel 
vulnerable and ill-equipped to move their projects through the CIG 
pipeline without guidance from the FTA?
    Answer. As mentioned in my written testimony, both Congress and the 
FTA have repeatedly layered additional requirements on the CIG program 
which has resulted in a bureaucratic maze. CIG requirements are vastly 
more complex, time-consuming, and burdensome than the requirements of 
other comparable USDOT discretionary grant programs. Without 
consultation and guidance from the FTA, it can be difficult for project 
sponsors to navigate through the CIG pipeline in a cost-effective and 
expeditious manner. We strongly urge the Committee to conduct a zero-
based review of the program to assess all current CIG requirements.