[House Hearing, 105 Congress] [From the U.S. Government Publishing Office]DEPARTMENT OF TRANSPORTATION AND RELATED AGENCIES APPROPRIATIONS FOR 1998 ======================================================================== HEARINGS BEFORE A SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS HOUSE OF REPRESENTATIVES ONE HUNDRED FIFTH CONGRESS FIRST SESSION ________ SUBCOMMITTEE ON THE DEPARTMENT OF TRANSPORTATION AND RELATED AGENCIES APPROPRIATIONS FRANK R. WOLF, Virginia, Chairman TOM DeLAY, Texas MARTIN OLAV SABO, Minnesota RALPH REGULA, Ohio THOMAS M. FOGLIETTA, Pennsylvania HAROLD ROGERS, Kentucky ESTEBAN EDWARD TORRES, California RON PACKARD, California JOHN W. OLVER, Massachusetts SONNY CALLAHAN, Alabama ED PASTOR, Arizona TODD TIAHRT, Kansas ROBERT B. ADERHOLT, Alabama NOTE: Under Committee Rules, Mr. Livingston, as Chairman of the Full Committee, and Mr. Obey, as Ranking Minority Member of the Full Committee, are authorized to sit as Members of all Subcommittees. John T. Blazey II, Richard E. Efford, Stephanie K. Gupta, and Linda J. Muir, Subcommittee Staff ________ PART 4 Page DEPARTMENT OF TRANSPORTATION: Federal Highway Administration................................. 1 Federal Transit Administration................................. 991 National Highway Traffic Safety Administration................. 1 RELATED AGENCY: Washington Metropolitan Area Transit Authority................. 1379 ________ Printed for the use of the Committee on Appropriations ________ U.S. GOVERNMENT PRINTING OFFICE 41-214 O WASHINGTON : 1997 ------------------------------------------------------------------------ For sale by the U.S. Government Printing Office Superintendent of Documents, Congressional Sales Office, Washington, DC 20402 COMMITTEE ON APPROPRIATIONS BOB LIVINGSTON, Louisiana, Chairman JOSEPH M. McDADE, Pennsylvania DAVID R. OBEY, Wisconsin C. W. BILL YOUNG, Florida SIDNEY R. YATES, Illinois RALPH REGULA, Ohio LOUIS STOKES, Ohio JERRY LEWIS, California JOHN P. MURTHA, Pennsylvania JOHN EDWARD PORTER, Illinois NORMAN D. DICKS, Washington HAROLD ROGERS, Kentucky MARTIN OLAV SABO, Minnesota JOE SKEEN, New Mexico JULIAN C. DIXON, California FRANK R. WOLF, Virginia VIC FAZIO, California TOM DeLAY, Texas W. G. (BILL) HEFNER, North Carolina JIM KOLBE, Arizona STENY H. HOYER, Maryland RON PACKARD, California ALAN B. MOLLOHAN, West Virginia SONNY CALLAHAN, Alabama MARCY KAPTUR, Ohio JAMES T. WALSH, New York DAVID E. SKAGGS, Colorado CHARLES H. TAYLOR, North Carolina NANCY PELOSI, California DAVID L. HOBSON, Ohio PETER J. VISCLOSKY, Indiana ERNEST J. ISTOOK, Jr., Oklahoma THOMAS M. FOGLIETTA, Pennsylvania HENRY BONILLA, Texas ESTEBAN EDWARD TORRES, California JOE KNOLLENBERG, Michigan NITA M. LOWEY, New York DAN MILLER, Florida JOSE E. SERRANO, New York JAY DICKEY, Arkansas ROSA L. DeLAURO, Connecticut JACK KINGSTON, Georgia JAMES P. MORAN, Virginia MIKE PARKER, Mississippi JOHN W. OLVER, Massachusetts RODNEY P. FRELINGHUYSEN, New Jersey ED PASTOR, Arizona ROGER F. WICKER, Mississippi CARRIE P. MEEK, Florida MICHAEL P. FORBES, New York DAVID E. PRICE, North Carolina GEORGE R. NETHERCUTT, Jr., Washington CHET EDWARDS, Texas MARK W. NEUMANN, Wisconsin RANDY ``DUKE'' CUNNINGHAM, California TODD TIAHRT, Kansas ZACH WAMP, Tennessee TOM LATHAM, Iowa ANNE M. NORTHUP, Kentucky ROBERT B. ADERHOLT, Alabama James W. Dyer, Clerk and Staff Director DEPARTMENT OF TRANSPORTATION AND RELATED AGENCIES APPROPRIATIONS FOR 1998 ---------- Thursday, March 13, 1997. FEDERAL HIGHWAY ADMINISTRATION (FHWA) WITNESSES JANE F. GARVEY, ACTING ADMINISTRATOR, FHWA ANTHONY R. KANE, EXECUTIVE DIRECTOR, FHWA NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION, (NHTSA) WITNESSES RICARDO MARTINEZ, ADMINISTRATOR, NHTSA PHILLIP R. RECHT, DEPUTY ADMINISTRATOR, NHTSA DONALD BISCHOFF, EXECUTIVE DIRECTOR, NHTSA Opening Remarks Mr. Wolf. I want to welcome Ms. Jane Garvey, Acting Administrator of the Federal Highway Administration who I think everybody hopes will be nominated as the Administrator. I would hope that Secretary Slater would make the appointment quickly because I think it is wrong to keep these openings open too long. The same way with the FAA, the quicker there is somebody there, the better. Hopefully by next week we can call you the Administrator. And Dr. Martinez, the Administrator of the National Highway Traffic Safety Administration, welcome. This year both agencies are appearing before the Subcommittee jointly, reflecting the interrelationship between highway construction and highway safety. Yesterday morning the Administration released its reauthorization proposal for ISTEA. I know the staff of the Committee was provided a briefing late yesterday afternoon. The legislation arrived this morning and the outline released yesterday contained mostly the same policies outlined in the President's budget in February with the exception of the state allocation formulas. We look forward this morning to learning more details about the President's reauthorization proposal and other issues. At this time I would ask each of the witnesses to summarize briefly your statements. The full statements will appear in the record and the questions will bounce between the two of you. Mr. Sabo. Mr. Sabo. Welcome. FHWA Opening Remarks Ms. Garvey. Thank you very much, Mr. Chairman, and Congressman Sabo. It is a pleasure to be here. Thank you for your kind comments. I always go back and report to the Secretary what has happened at hearings so I will, if you do not mind, mention your first comment to him. Mr. Wolf. I would be shocked if he did not appoint you. Frankly, with the difficulty that the reauthorization of ISTEA will pose and with the good job that you have done, I think they would have a hard time explaining why they did not nominate you. You can tell them that. Ms. Garvey. Thank you, Mr. Chairman. Mr. Wolf. And I think he will frankly because I think Secretary Slater is a good person. Ms. Garvey. Thank you very much, Mr. Chairman. Joining me here this morning is Tony Kane, our Executive Director, and other key FHWA staff members. We are all prepared to answer any questions that you or members of the committee may have. overview of Administration Proposal Yesterday, Mr. Chairman, as you mentioned, President Clinton, Vice President Gore, and Secretary Slater announced the Administration's proposal for reauthorization of surface transportation programs. This budget, the 1998 budget, is as you have indicated the first of the post-ISTEA era and we are very excited about that. When Secretary Slater appeared before this subcommittee last week, he spoke about three key national transportation priorities--strategic investment in infrastructure, a commitment to safety, a commitment that he spoke about in terms of both a moral commitment and a policy imperative, and a commitment to common sense government and innovation. We believe the FHWA budget both supports and advances these very important goals. The budget we are submitting is built around the Administration's authorization proposal for surface transportation programs. The reauthorization proposal constitutes a strategic use of limited resources with funding increases for the National Highway System, for interstate maintenance, for congestion mitigation and air quality, and for safety programs--clear national priorities. Our proposal will also increase the states' ability to use their federal-aid dollars more effectively and more flexibly. We think we need to give the states the flexibility, the options to create the transportation solutions that work for them. budget highlights Our budget proposes $20 billion in obligations for the nation's highways and bridges. This includes a federal-aid highways obligation ceiling of $18.17 billion which is approximately the same level of discretionary funding as the fiscal year 1997 budget. The 1998 budget also includes proposed contract authority for the highway program of $22.8 billion, which is a significant increase over the average annual contract authority authorized by ISTEA. While the obligation limitation we propose is lower than contract authority for 1998, I want to stress that we are hopeful economic conditions will improve so that budgets in future years will permit the use of funds that cannot be reached this year. I need to say at the outset that we realize that the proposed funding levels do not fully meet the needs of the nation's highway systems but we believe it does represent a continued commitment to investment while at the same time dealing with both the President's and the Congress' efforts to balance the budget and reduce the federal deficit. The budget also advances other national goals. We have asked ourselves whether can we offer the tools to help reduce the tragic toll of highway deaths even in the face of growing traffic. Our budget provides the resources to maintain safety as the highest national transportation priority. Our proposal builds on the strong components of the existing law but streamlines programs, consolidates some categories, creates new flexibilities, and offers incentives for safety agencies to work together more closely in dealing with their safety programs. And I must say that just as we have consolidated and coordinated the program elements, we have worked very hard with NHTSA to coordinate our staff efforts as well. We have done that both in Washington and the field. We have worked very closely this past year in particular. The goal for both of us is to deliver a safety program that is not only highly coordinated but also complementary, and builds on our individual agencies professional and organizational strengths. common sense government and innovation The Secretary also spoke last week about common sense government and innovation. It is certainly true that a cornerstone for the future is a strong emphasis on innovation, innovation that will provide a greater return on our investment. For FHWA, this moves us from a traditional oversight role to one, as the Secretary says, of proactive leadership, leadership in technology, leadership in technical assistance-technical assistance in its broadest terms, from engineering advice to environmental expertise to planning and financial expertise. infrasture investment In fact, in the area of finance, we are promoting new financial techniques that have the added benefit of leveraging new resources for transportation, including those of the private sector. Our budget proposes a new $100 million credit enhancement program to encourage private sector investment in transportation projects of national significance, projects that may be too large for a state program or even too large for an infrastructure bank. We are also proposing to continue the funding for state infrastructure banks at a level of $150 million a year. We are proposing significant increases in programs which support technological innovation. Our budget request and our reauthorization proposal recognizes that a strong federal transportation research and technology program is not a trade- off with infrastructure funding, but instead it is a powerful tool to support the investments we have made. intelligent transportation systems We have learned through our ITS research efforts that an intelligent transportation infrastructure applied to our transportation programs can improve efficiency productivity and safety. We have done work with NHTSA that shows we can achieve a 17 percent reduction in crash avoidance in all accidents by using ITS. Our budget requests a funding level of $150 million for ITS research. This research will focus on a number of areas of high potential benefit. Finally, Mr. Chairman, as we consider the federal role in transportation, the Federal Highway Administration has taken a comprehensive set of streamlining actions to support departmental initiatives, to meet our mission changes mandated by ISTEA and to develop the agency workforce that will make us leaders into the 21st century. We have evolved as an agency from solely an engineering management and oversight organization to one that is highly focused on customer service, on technical assistance, and devoted to strengthening the partnerships with those served by our agency. We have decentralized responsibility for program delivery to the lowest practical level in the organization, generally our division offices at the state level. In our western regions we have established consolidated centers for human resources, finance, and information management functions, and the agency is in the final stages of establishing similar centers for its eastern regions. Those shared resource centers are designed to reduce the costs, improve services to our external customers and to our stakeholders. In closing, Mr. Chairman, I want to say that we look forward to working with Congress and with this subcommittee in particular. To build on our accomplishments, to continue the programs that work, to refine those programs that have not yet fully realized their promise and to create new incentives and new initiatives which apply what we have already learned. Thank you very much, and we would be happy to answer your questions. [The prepared statement and biography of Jane Garvey and biography of Anthony Kane follow:] [Pages 5 - 23--The official Committee record contains additional material here.] NHTSA Opening Remarks Mr. Wolf. Dr. Martinez. Mr. Martinez. Thank you, Mr. Chairman. I appreciate the opportunity to testify before you and the rest of the subcommittee again this year. It is a pleasure to appear with Jane Garvey, the Acting Administrator for the Federal Highway Administration. I echo your strong support for her. She is an inspiring, articulate leader. It is also fairly obvious she is a snappy dresser. I am pleased to report that safety is the Secretary's priority. Mr. Slater has been very forceful in this and we are thrilled to have his support. He believes it justifies a strategic investment of resources and in fact safety is really a goal of all Americans. When we designed the budget for fiscal year 1998 it was from the perspective of a balanced program that makes gains both in vehicle safety and driver safety. We see ourselves essentially as a public health agency. Highway crashes are the leading cause of death under age 44 and our goal is to prevent or to lessen crash injury. I view our task as one of providing people with the tools they need to take responsibility for addressing injury prevention and improving overall highway safety. To be more effective in this role, we have really changed the way we do business over the last few years. We have become more collaborative, working with, more partners and morepartnerships such as state and local policy makers, health care professionals, educators, private sector and community safety leaders. We are also strengthening the link between the vehicle safety engineers and the medical researchers. We focus on the real issue which is the injuries themselves and not just development of dummies. I was going to point out for Mr. Packard that one of our trauma centers is in his district and is one of our key links to getting information about what happens in the real world. These various approaches allow us to leverage our resources and get maximum impact out of our programs. In a way the federal highway folks are becoming more involved in safety programs, NHTSA is involved with building bridges because we realize that is where the money is. One of the reasons we are more effective is because we are working better through the field offices. We have worked the last year, Jane Garvey and myself, and Mr. Slater in his previous role, to talk about common visions and how they fit together and to get rid of any overlap to make sure we maximize our resources and find how to improve our different resources. As a result, we have been able to deliver programs better. We are working together building safe communities. We have done the Moving Kids Safely conferences, and we have various programs and teams that are working together in the field. I am actually very thrilled about that. We have a number of difficult issues ahead. We have a concern that as the economy goes up there is more exposure, there are more miles of travel. We have an aging population. We have a second baby boom coming. Overall this agency has dropped traffic deaths dramatically since 1966, but it has stagnated somewhat over the last few years. That is one reason we changed our approach and expanded our constituency. It is simply too big a problem to be a small group's problem. It is everyone's problem and everyone is part of the solution and so therefore we are trying to do that. The direct cost of highway crashes is still over $150 billion a year and $17 billion of this cost is just in health care. The taxpayer portion is about $14 billion a year. There are no easy fixes. We need more complex effective measures to deal with the trends that I have mentioned above. We have created an effective program for FY 1998 and we request the resources to implement that. NHTSA BUDGET REQUEST This year we are requesting $333 million which is about 11 percent higher than the amount enacted for FY 1997. This reflects the high priority given to safety by this Administration and the role, quite frankly, that motor vehicle injuries play in the entire transportation system, 94 percent of the fatalities and 99 percent of the injuries are motor vehicle related. We have a balanced program. That is, we address both the vehicle and behavioral safety arenas. We carry out strong safety research and we study how to reduce crash injury. We also have a very strong behavioral program to go hand in hand with the reasonable use of regulatory approaches. Both are important safety tools. SAFETY BELTS Safety belts are a major priority for us and we have been building a constituency to make that happen. Stronger safety belt laws and stronger child seat laws we think are very important. The key to implementing this is working together and using tools like the child safety video in our coalitions to influence policy makers, as well as those who fail to use seat belts. The low use of seat belts and child seats means that we are failing to fully use one of the most effective tools for reducing traffic death and injury. We have put a strong focus on child passenger safety. The video that we have talked about is now going out both in English and in Spanish. We also had a very successfully Child Passenger Safety Week this year, and it is growing each and every year. AIRBAG SAFETY We issued a proposal in February to simplify child seat installation in passenger vehicles by the use of uniform anchorages. As you know, a lot of our discussion will be about air bag safety. It has been a top priority for us. I have initiated a comprehensive effort to fully realize the lifesaving attributes of the passenger and driver air bag systems and to pave the way for the introduction of advanced air bags in the near future. Our effort relies on both educational programs and also research and regulatory programs and working together with all the resources available to attack this problem in short order. I think we are making great headway in a short period of time, thanks in many ways to the support of you and to others who have worked with us on this issue. Our budget therefore contains an increase of $8 million for air bag work and this is my top priority increase for fiscal year 1998. In the safety behavior area, the biggest risks focus on drunk driving, speed management, and other forms of aggressive driving, in addition to child seat and seat belt use. SAFE COMMUNITIES We are working collaboratively with the states. The safe community programs continue to grow. This allows people to work together to solve their own problems with best practices from around the nation. We are very proud of that program. It continues to grow. We started with zero two years ago. We are up now to over 200 programs. We have a new goal for an additional 200 next year. We began meeting with groups representing different cultural diversity in various parts of the states that we have not worked with before. By working closely with the governor's highway safety representatives, I think we will get there. DATA LINKAGE We are also providing grants to help states create and link crash data and medical data systems to provide new insights into safety issues to help reach program decisions. As reported to the Congress, we found that by linking certain data types, we developed precise information at the state level for the first time on the true cost of not buckling up or not implementing a motorcycle helmet law. This could be a powerful motivator when a state considers the wisdom and benefits to be gained by strengthening the child seat law. DRUG AND YOUTH SAFETY Our budget also has increased support for drug and youth safety and incentive grant programs for strengthening the seat belt and alcohol provisions. With regards to research and development, our behavioral initiatives alone cannot prevent crashes or prevent injury from such crashes once you are in a crash. There is a tremendous amount of energy in that crash and you can mitigate that through good research design. KEY INITIATIVES We need to continue to pursue vehicle solutions in areas such as frontal offset crashes and rollover as well as advanced smart air bag systems. I would like to complete my statement by highlighting a few key initiatives planned in our research program. As mentioned earlier, we are seeking an increase to support research into new smart air bag systemsbeing developed in conjunction with the private sector. BIOMECHANICS RESEARCH We are also intensifying our work in the National Transportation Biomechanics Research Center in order to gain a better understanding of how injuries occur and how we can prevent them. To strengthen our insight, we have combined the expertise from medicine, engineering, and vehicle design. I am pleased to present this budget to you for consideration and I would be pleased to answer any further questions from the subcommittee. Thank you. [The prepared statement and biography of Ricardo Martinez; senior staff biographies; and NHTSA budget-in-brief follow:] [Pages 28 - 77--The official Committee record contains additional material here.] Flexibility and Discretionary Grant Programs Mr. Wolf. Thank you very much, Doctor. We have a lot of questions today so we will try to move quickly and I will ask a couple of questions and then recognize the other members. If one goal, Ms. Garvey, as you mentioned, is to increase the flexibility provided to the states and localities so they can address their individual local transportation needs, why has the Department proposed a number of new categorical, discretionary grant programs, such as the flexible highway infrastructure safety grant program, $403 million, the intelligent transportation integration program, $100 million, a set-aside for the Appalachian highway development for $200 million, and an integrated safety planning program, $50 million, which effectively limits states' flexibility and reduces funds allocated to the states by over three-quarters of a billion dollars? Ms. Garvey. Well, let me address the first part. You are absolutely right in recognizing the Administration's commitment to flexibility. For example, in the Surface Transportation Program, we have added eligibility for Amtrak and for publicly- owned freight rail so that states and localities can make choices that work for them. Let me take the discretionary programs one by one. In the area of safety, the incentive program that we are proposing encourages states that have localities that are working together to improve coordination of their safety management programs because we think that is very important, so we're proposed an incentive program. We think in the area of safety it is important enough to warrant its own incentive approach to safety management. In the area of ITS, what our research has shown and what some of our work with our stakeholders has shown is that we need to encourage deployment but we need to encourage deployment in a very integrated way so the programs that we have set up advance those goals that we think are important nationally. Mr. Wolf. But it does limit the states' flexibility. Ms. Garvey. Well, I think the added flexibility of the STP program and--even the NHS, is going to be very well received. In the core programs which have gone up in proposed funding by about 30 percent, we do have some additional flexibility and I think that is important. APPALACHIAN HIGHWAYS Mr. Wolf. I have not seen the bill. All I know about is what I read in the paper but I saw a little news flash last night. You have included $2.1 billion for Appalachian regional corridors which I know will make Senator Byrd of West Virginia very happy. Ms. Garvey. $200 million. Mr. Wolf. But over the life of the bill what is it? Ms. Garvey. Over the life of the bill? Mr. Wolf. $2.1 billion? Ms. Garvey. Yes. Mr. Wolf. So it is not $200 million, it is $2.1 billion? Ms. Garvey. Right. Mr. Wolf. Does this funding come out of the states' formula or is it above the allocation? Ms. Garvey. It is above, and there are 13 states involved in that. This honors a long-term 30-year commitment that this Administration and previous Administrations have had to the Appalachian area and we think this will move those projects closer to completion. That is very important and has been a longstanding commitment. NEXTEA STATE APPORTIONMENTS Mr. Wolf. But areas of the nation are in gridlock. As you quickly look at the state allocation tables released with the President's announcement, I am struck by the fact that the state allocations as a percentage of total apportionments remain virtually unchanged from ISTEA. Population growth states see no increase in their allocation. For example, Georgia is up a little over a tenth of a percent. Virginia is up a little over a tenth of a percent. Texas is up almost two-tenths of a percent. And states like Arizona, Maryland, North Carolina, Wisconsin and Florida, all of which have had significant population growth and the congestion over the last several years. In fact, Florida actually receives less than they did in ISTEA. These states are also donor states and states like New Jersey, Pennsylvania, and New York all get increases. Given these allocations, how does the Department answer the charge that the new formula is more of the status quo and it ignores need, population growth and the state's contribution to the trust fund? Ms. Garvey. I think the formulas are probably the most difficult issue that we are going to wrestle with as we go through the discussion on the bill. What we tried to do with our formula is to strike a balance. We looked at each one of the categories. We left the interstate maintenance and the bridge formulas pretty much intact. The NHS and the STP we made some changes to. Last year at our hearing before your Subcommittee you pointed out how outdated, for example, the population numbers were. We have updated those and are proposing to use the most current population numbers which we think is a step in the right direction. We havetried to balance needs of both the donor and the donee states. It is a very, very tough balance to strike. And I would say that we do not see our formula as being cast in stone, but we hope that they will be part of the debate. We know there are lots of numbers our there and lots of different approaches particularly on the equity pieces. We want to be part of that debate. Mr. Wolf. It will be very difficult. How could the state of Florida ever support this? Ms. Garvey. The state of Florida will probably have a different approach. I agree with you. Mr. Wolf. Would the states of Georgia, Arizona, my state--I think you really did miss an opportunity. Ms. Garvey. I think if you look at the numbers, 26 states do better, and we have struck a balance. It is a very tough balance. I agree with you. Again, we have discussions going with different staff members about other approaches that might work as well. I think the updated factors are an important component and I think that in particular is going to be very helpful. Trust Fund Contributions versus apportionments Mr. Wolf. Would you submit a table showing each state's return on taxes paid into the trust fund? Ms. Garvey. Yes, we can do that for the record. [The information follows:] [Page 81--The official Committee record contains additional material here.] New Discretionary Programs Mr. Wolf. The last question I will have and then I will recognize Mr. Sabo. The Administration has proposed a number of new discretionary programs including border crossing and trade corridors, transportation infrastructure credit, ITS deployment programs. In the aggregate, how much additional funding will be available to the Secretary to make discretionary grants currently available? Ms. Garvey. Let me ask Mr. Kane to provide that final number. I may have to get that for the record. All of those discretionary programs that you listed are new programs. Many of them grew out of the regional meetings that we had over the last year. As you know, we had 13 regional meetings across the country. We had about 150 focus groups working with state and local officials on what works, what did not, what recommendations would they have. We heard a great deal about border issues. We have proposed a small amount of money, but we think it can provide a magnet for private capital. It can provide an incentive for states to consolidate and coordinate their efforts along the border so it acts again as an incentive. Much of what we are trying to do is to move towards incentive programs and performance-based programs. We think that is an important component. And, again, a lot of this is what we heard from the focus groups and regional forums that we held over the last year. Do you have the total number, Tony? Mr. Kane. Mr. Chairman, we have proposed approximately $445 million if you take a look at the ITS deployment program which is $100; the corridor program, $45 million; infrastructure banks, $150 million; credit program, $100 million; and the integrated safety planning incentive program at $50 million--so $445 million. If I might just add on the formulas, if I could, the issue on the core programs, National Highway System and the Surface Transportation Program, the adjustments really move towards trust fund contributions and population level. I think the real issue will come, as Ms. Jane Garvey mentioned, with regard to various definitions of equity and equity adjustments. But in terms of reforming the core programs, National Highway System and Surface Transportation Program, I think the Administration makes a real advance in terms of moving in the direction of activity and population change and trust fund contributions. Appalachian Regional Highways Mr. Wolf. I think of the areas of the country that are just gridlocked, just gridlocked, where you cannot even move. Around here in my region we are the second most congested region in the country, I think LA and San Francisco, Phoenix and Atlanta are near the top. Would the money for the Appalachian regional highways just come off the top so it would be guaranteed $2.1 billion in total? Mr. Kane. Mr. Chairman, yes, it is over and above. Our basic apportionments, however, are some $3 billion above what the ISTEA ones were. What we propose in the Appalachian highways is to change the current process, with both general fund and trust fund authorizations each year. It would all be trust fund authorizations in the Administration proposal. Mr. Wolf. In doing so, you are shortchanging the other growth areas of the nation. Mr. Kane. Appalachian road needs, which will be finalized in a few months, will probably be about $7 billion, so the level over the six-year bill of $2.1 billion is a small stretch towards that. Mr. Wolf. Some of the Appalachian roads are not even supported in the region any more completely and I do not know what you tell the other areas of the country. I mean it begins to be--well, anyway, we will talk more about it. Mr. Sabo. Bicycle Safety Mr. Sabo. Thank you, Mr. Chairman. I have a couple of questions at this point. First to Mr. Martinez, I am struck that in your budget one area that does not seem to get the priority I think it should have is bicycle safety. Congress over a period of years has been involved in promoting bicycle usage, coordinating it with other transportation programs. I have to say that the FHWA has been most accommodating and moved from reluctance to building that into their program which I think is very good. But we have more fatalities from bicycle crashes than we do in all areas--than we do I think in aviation, railroad or maritime activities. And it is a growing problem, and a number of them involve young people. I think the growth of the use of bikes is both good transportation policy. It is also good recreation. It serves both roles. But in terms of safety priorities, it clearly is a significant problem that we need to pay more attention to. I know you have some funds and some proposed increase, but frankly not enough. I think air bag safety is very important. But in terms of number of young folks involvedbiking involves a substantially greater number of fatalities and injuries for young people. I hope that you would re-examine and place some higher priority on aggressive education programs like bike safety. Mr. Martinez. I appreciate your thoughts quite a bit because that is an area we are very interested in. I am sorry it does not reflect as well as it should. Perhaps a quick review of the budget. Let me tell you about some of the programs that we have focused on, and one of those that is most important because of the effectiveness, is the bicycle helmets program. We have a program with the National Football League that is done at the Super Bowl every year, Ride Like A Pro. We did one in Arizona which was very nice actually, and the NFL camera crew came to help film so that we could distribute it. We give away free helmets--we did it in Georgia the year before. Now we are trying to bring the program out to the communities through collaboration not just with the NFL, but through role models who wear helmets in sports. We want to help get over that peer pressure problem that children have. And that is going quite well. We had funding for the Partnership for Walk America which looks at some of the issues, such as where do you ride bicycles. One of the concerns we have often times is that children buy their bikes in toy shops, and then they are told they cannot ride them on sidewalks so they have to ride them in the streets. We have addressed that issue by working intermodally, looking at three things; the rider, the vehicle, and the environment. As we work on safe communities, bicycle safety is a part of that safe communities outreach. We also have begun to work with the American League of Bicyclists. They have been very supportive. They have a program that is teaching youths about bicycle safety. We have increased our funding for that from about $473,000 overall on bicycle safety up to $655,000. We are trying to strike a balance. We are also trying to leverage our dollars by working with the Department of Health and Human Services more, and this has been an issue also for the Moving Kids Safely conferences. I can assure you that bicycle safety was addressed in all ten regional conferences around the country last year. But I agree with you, this is actually kids' transportation. The other interesting thing is that the growing number of major injuries and deaths are actually occurring in adults because it has become more recreational. We are concerned about two things; bicycle helmet use, and development of roads where bicycles can be ridden safely. I can tell you that when I was at Stanford, I rode my bicycle to work often nine miles, and I was in bicycle lanes most of the way except for about 100 yards total. When I moved to another city, I could not ride my bike simply because there was not an environment that was friendly for that. I had a helmet but I needed more than that, I think, to be safe. So trying to balance all of our programs, we have included an increase to help focus on those issues. I am glad you mentioned that. Highway Apportionment Formulas Mr. Sabo. I personally think it should be receiving even relative greater emphasis within your budget. Ms. Garvey, I do not envy you as you try to figure out distribution formulas. There is no perfect formula. I come from a state that is in the middle. We were a donor or donee three years and the opposite two years out of the last five. But we would like to have as exact a formula applied to how defense funds flow in this country. Somehow we come out very, very short on where those monies are spent and lots of federal spending where the inequities are much more substantial than they are in the highway program. But I am curious. As you do look at this question of the relative balance between what is paid locally and what comes back, how are you dealing with the issue of other methods and other fuels for automobile transportation? Is that factored into your formula? Minnesota relies heavily on ethanol. I am increasingly concerned that as ethanol use that escalates, it will reflect an even lower effort in the traditional method of allocating federal gas tax receipts. I would assume the same would be happening in other states--for example, in California with the use of electric cars. We are mandating the use of alternatives, which I assume put the same kind of demand on the highway system, but will not be showing up in revenues for a number of gas tax collections. I expect there are other complications like these that we will be facing in the next several years. Do you factor these into your formula? Ms. Garvey. I think it is a very fair question. It is something we look at. It is more long-term in its implication. It is not yet factored into this formula because it is a more long-term issue but it is one we are watching. It is one we have done some research on and we are going to continue to watch that. It is a fair observation. We may have to rethink in years to come how we approach that very basic issue. Mr. Sabo. Well, I would hope you would do some quick re- examination. The percentage of ethanol used in our state is already significant. I am not sure where that type of alternative energy in our other states is headed, but it is a significant amount already. And it can skew the donor and donee state relationships, particularly in regard to the 90 to 95 percent requirements. I expect that as you deal with the authorizing committees that question will be coming, and I think you should be looking at ways to deal with it. Thank you. Mr. Wolf. Mr. Olver. Mr. Olver. No. Mr. Wolf. Mr. Pastor. Mr. Pastor. Good morning. Ms. Garvey. Good morning, Congressman. Mr. Pastor. I want to thank the Chairman, first of all, for taking on the issue of the formula and obviously youcannot find the perfect formula but I think you need to move to a formula that is equitable in terms of where the population is shifting. Some of the concerns that we are facing, as Chairman Wolf repeated a number of times, in Arizona because of the growth, we are finding ourselves with a need to improve our transportation modes. And we also have the concern of EPA and clean air trying to meet their requirements so we have gone to ethanol now more and more as a major form of fuel that is consumed and even though you are looking at it in the long run we also have the same problem that we need to find some relief in the short run because these issues are all putting demands on us in a growing state. I know there is a form of payment that becomes very popular in the education system. Maybe you ought to look at it in transportation, vouchers. As people move from the Northeast or Midwest into California or Florida or other states maybe they ought to carry a voucher with them to pay their transportation aids. But I would hope that as we continue the debate, and I was happy to hear that these formulas are not set in concrete, and we will continue the discussion and we look forward to participating with you because in Arizona I think it is 85 cents returned on the dollar. I think that is the figure I have seen. But we have those needs and we look forward to working with you. There are three issues I would like to talk about and one of them, I have a new status in my life of having a granddaughter and most recently wanting to insure that when she travels from Tucson to Phoenix that she would have a safe chair as she was driven in the automobile. But I have to tell you I am not much of a shopper, but I looked around and I had a hell of a time finding one that was safe in terms of you look at it and it tells you how it fits on the seat but you really are not told--it is very difficult to ascertain how safe it is. You look at the frills and the colors and the animals. But the question I have after being through that experience, is there an effort to bring a more standard type of child safety seat so that those of us who are consuming this product know for sure that it is safe and that our loved ones are going to be safe in case they are involved in an accident? Mr. Martinez. I think you are exactly right. I am a new father since I have been in this position, and had to go into a place where there were 100 seats and understand which ones were approved and not approved. Unfortunately, they also put baby carriers in the same area often that they sell the seats. We have over 100 different types of seats out there. And there are over 900 different cars. The other issue you did not raise is compatibility. If you buy the seat, you have no idea whether it really fits in your car and how to install it. child safety seats Mr. Pastor. Because they do not let you take the chair or the seat out to the---- Mr. Martinez. And you will appreciate this, in my previous life, trying to educate doctors back in California, I actually got thrown out of a store because of the same issue. They thought I was writing down prices, because I was photographing everything. There was so many things to do to get the proper information. There was too much information. Right now for us to train our trainers to go out and teach people how to put their seats in, takes us four days. We have just worked out a deal with Safe Kids to do an accelerated program in two days. That to me is a concern for us to keep involved as the marketplace expands and focuses on the people using these products. We put together a blue ribbon panel two years ago and brought the car seat manufacturers together with car manufacturers. We talked about that issue. We brought in engineers, consumers, medical people and educators. Their number one recommendation was that we make it simple to use the seats, like buying an appliance, you can take it home no matter who makes it and it works. We have now proposed that. The notice came out in February. The docket closes in May. We expect those child seats to be in the marketplace as early as 1999 or before. Also, we tried to make more information available to the dealers and we actually have a program. We talked about bringing people together. I do think that bridging the gaps does help. We have a program called Adopt a Dealer where emergency nurses are working with dealers to do that. We have also upgraded our standards. I think the point you are making about when they sell car seats they should be able to say which ones meet federal standards or make sure there is a label on them. This is something we are very interested in. How do you let people know which ones meet the federal standards easily and understandably? We are focusing very much on consumer information. My hope is that within the next 18 months or so, you will see more uniformity in how seats attach to the cars. Then you do not have to learn a new system every time you move from your car to your daughter's car or another person's car. They will be better labeled, so that people understand. We also have a tremendous amount of public education efforts underway now because unfortunately 80 percent of the seats are used improperly. Mr. Recht. If I could just add one thing to that. We are also working on a CD-ROM program that would help solve a problem that Dr. Martinez alluded to which is this compatibility problem. The CD-ROM program would be available at dealers and you could plug in what kind of car you have or what kind of seat you are about to buy and see if in fact they fit together. And over the next year or two, we hope to finalize that and get that out. That will make a big difference. child seat resources for the indigent Mr. Pastor. Before I came to Congress, I was county commissioner, county supervisor, and we had indigent health care as a responsibility and one of the things I saw there, and I still see today, is there are many families who do not have the ability to afford these seats. Is there an initiative that you have proposed or have implemented that would help provide for temporary use so that indigent mothers would have access to these child safety chairs? Mr. Martinez. Yes, sir, we do. The cost of the seats is around the $40 to $60 range, and for the indegent, we want to make sure those children are safe. We have done several things. With the GM settlement, we basically began to distribute car seats. Mr. Recht. Over $6 million has been spent so far to purchase---- Mr. Martinez. And the interesting thing about it is that we have actually got case reports now of children who have been basically saved by the child seat that has been given to them. We have just signed off with additional groups to distribute seats. We expect to receive more funding in the near future. We also have a Patterns for Life program which basically augments public-private partnerships to do this at the local level; We are trying, as I said, to bring groups together. We are also working through Department of Health and Human Services. There are some places where they make it eligible using Medicaid funding to buy the seats and we even have stories where children have been saved from those. It is interesting because the leading cause of disability in youth is motor vehicle related. We are also trying to bring groups together so there is a larger purchasing power so they can get seats made at a lower price. That is one of the things we did with the General Motors agreement; there is a big effort to do more of that as proposed in our budget. That is the Patterns for Life Program and we are using that as a way to help coordinate all those efforts. speed limit issues Mr. Pastor. The second area I would like to visit is the speed limit. Mr. Martinez. By the way, I just want to make a simple point in that we believe there is talk about driver's education. We believe passenger education is really the focus here. We are working with hospitals also, so that a child can come home with a proper child seat. I also wanted to compliment this committee, especially Mr. Wolf, with helping us put together these videos which inform parents about that, and also educate them on how to put the seats in properly from the moment that child is getting ready to leave the hospital. Mr. Pastor. We have gone from 65 to 75 and as I drive throughout the district probably now people are driving at 80, 85, and sometimes a little higher. What have statistics shown as a result of the increase in the speed limit in almost I think all the western states? Mr. Martinez. Well, it is a mixed bag right now and one of the reasons why, is that with the national maximum speed limit being repealed, it also got rid of the requirement that states report a lot of different data. The second thing is that some states have changed speed limits on different types of roads and also at different times of year so it is going to take us a little bit longer to give you any sort of broad picture. I can tell you that early information shows an increase in fatalities. There are significant increases in fatalities on roads posted over 55 and a decrease in those below that. But whether that is due to the speed limits or something else, we cannot really tell you right now. The other thing that is important as we look at the different states is that some of them are increasing enforcement and some of them not, so speed control is a central issue to look at. I was actually in the back seat of some police cruisers in Arizona last year, and they have an aggressive driving task force in Phoenix which I think is well received. There is a lot of public information about it. They announced it over the radio. People know it is coming. And I think that makes a difference on being able to control speed. Certainly in areas where you do not have speed control, speed creep comes about. I think that is human nature. People tend to respect what you inspect. We will have a report ready as requested by Congress probably in September or so, but I think what we are trying to do is work with the states, to help them manage the issues of speed and working with our partners on that. Mr. Recht. If I can just add also, we were just passed a note that, according to our statistics, in calendar year 1996 the fatalities in Arizona in fact dropped. But just to add to Dr. Martinez's point, when we talk around the country about aggressive driving enforcement, Arizona has one of the model programs. It is very effective. Mr. Martinez. Just be concerned, a drop in numbers always varies. It is the rate we have to look at, and we cannot determine that until we get the exposure numbers. Mr. Pastor. As I drive either between Phoenix and Tucson down to Nogales or to Yuma which is long stretches of road, you just see that everybody is now just hiking it up a little higher and 75 now is probably---- Mr. Martinez. Everybody hedges a little bit. Mr. Pastor. Everybody hedges a little bit. Mr. Martinez. And I have to tell you, one of the things we have to make sure is that we give law enforcement the resources to do something about it. We have seen--in the last decade--the number of miles traveled increased by 35 percent on essentially the same roads with no increase in law enforcement. I think many times those of us who are driving the roads and wondering why the travel is somewhat unruly, tend to notice that there is no law enforcement there. As soon as you have one--even on the side of the road--writing a ticket, everyone suddenly obeys the speed limit. We are looking for ways to help work with law enforcement to leverage their resources through technology or whatever we can. aggressive driving Mr. Pastor. The other phenomenon I have seen more and more is this aggressive driving where people cut each other off and then before you know it there is a pursuit and they are barreling down the freeway chasing each other and then I read most recently, I guess here in D.C., you had that problem where some deaths have occurred because people have been--what are we doing to minimize that because I see that increasing more and more and I do not know what the solution is but what are your recommendations? Mr. Martinez. Well, this is really a good area. We work cooperatively with the Federal Highway Administration. We see the car as a 3,000-pound weapon with an on button essentially. Everyone thinks they are in total control of that vehicle, but in truth when you drive aggressively, you increase the risk for everyone. And, again, this goes back to the fact that we have got less law enforcement on there. People have less belief they are going to be caught. I was back in New Orleans for the holidays and noticed that I was driving the same roads that were there when I was a kid except it is now bumper to bumper. So people tend to cut in front of each other and drive on the side of the road. It isnot just New Orleans, it is everywhere. We have actually done several things. Number one is to try to increase the awareness of the problem through campaigns. Number two is to begin to work with law enforcement to begin to do things that can help them create some additional presence as well as campaigns with the Federal Highway Administration such as the Red Light Running Campaign amd looking at automated speed enforcement. Where people know that there is a compliance mechanism, they are more likely to address the issue. We also have some studies ongoing on best ways to support law enforcement or ways they should attack it. For example, in Arizona they have an aggressive driving group. Maryland has a program and California has a program. We have contracts with them to do evaluations, and our job is to try to find best practices and disseminate the information. Lastly, it is not just a matter of law enforcement, it is also one of adjudication. We get a little bit concerned when people are caught driving aggressive and essentially killing other people. It escalates. And then the legal system gives very minor penalties or lets them go. They say it is an accident and there is nothing you can do about it. And then what happens is that it becomes a low priority for enforcement because they do not have support through the courts. We are working with the judicial system to look at that also. Lastly, we are beginning to look at what the penalties are, and whether or not we need to make recommendations to increase those penalties. I think this is a very important tool. If you want judges to do the right thing, we need to give them the tools. There was a case recently in Maryland where a gentleman was doing 60 miles per hour in a 30-mile per hour zone. He lost control of the vehicle, as one would predict. He went into a bus stop, killed a mother and four children, and his penalty was about $2,000 in traffic fines. Clearly, the judge was hampered somewhat in his ability to do anything. The case in Washington, D.C. I think was a little bit different. The judge went beyond the sentencing guidelines in order to make the effort. We have to try to work with law enforcement and the judicial system to do that. Mr. Pastor. Thank you very much. Thank you, Mr. Chairman. Mr. Wolf. Mr. Olver. Mr. Olver. Thank you, Mr. Chairman. I will learn eventually to just take my turn whenever you are willing to give it, I suspect, but my colleague from Arizona had been here first. I, first of all, just want to welcome Administrator Garvey. It has been quite a few years since we have sat across the fiscal tables from each other in the role that you previously performed as Public Works Commissioner in Massachusetts and where I was in the similar fiscal committee in the Massachusetts legislature and I am certainly looking forward to four years of being in this position again and with the kind of working relationship that we have had in the past. I have a couple of commendations and a couple of questions and maybe just a general comment, though I could go on, especially out of the previous discussion that my colleague was having. First, Ms. Garvey, it is almost impossible not to call you Jane. If you do not mind, I will. Ms. Garvey. You would be the only one who is not. ISTEA Reauthorization Funding Levels Mr. Olver. Okay. I notice that the FHWA under Secretary Slater, than Administrator, and your leadership, I am using your testimony, has used the Work Force Restructuring Act and have to its fullest and been able to reduce the number of what are called management control occupation positions and that you will meet the national performance review goals for reduction there by the year 1999, and I certainly want to commend you for that leadership that you and he have provided in that area. I also want to commend you for the additional flexibility that is provided in the NEXTEA proposal. And I do not want to get into the precise details of that. That takes a little bit more time. Let me just ask one question. Early in your testimony, you had pointed out that the last four year which is a little bit different from the ISTEA authorization but I understand where four-year sections of time come from, that you had pointed out that the average federal commitment in the four years from 1990 to 1993 was $21.1 billion and then for 1994 to 1997 it has been $25.5 billion. Under the ISTEA proposal, what would be 1998 through the year 2001, I guess that next four-year period? What would the average be under the proposal that you are putting forward? Mr. Kane. It is essentially equal. Those were grand totals of all infrastructure funding within the department. If you take a look at authorizations that we have in the core highway programs, we are increasing authorizations about $3 billion a year in those programs, but the numbers you cited were overall levels. These levels were proposed in the context of the balanced budget. Mr. Olver. Well, I take it your answer--you may want to put this in greater detail for the record but---- Mr. Kane. Absolutely. Mr. Olver. For the record, your answer is that for the next four years it would be essentially level with what it has been for the last four years? Mr. Kane. In terms of spending based on today's forecast. Within the context of balanced budget, we have built-in authorizations to go to a higher level. Mr. Kane. We will give the detail. Ms. Garvey. Right. We can provide more detail but I think that is an important point that Tony last made. We have provided the authorization levels that are higher in the hopes that if the budget conditions improve we have room to move there, we can reach those resources if that becomes the case. [The information follows:] Funding under the Department's reauthorization proposal for FY 1998-FY 2001 are as follows: $29,088, $29,030, $28,894, and $28,853. The average over this four year period is $28,966. Mr. Olver. Well, all right. I am quite willing to accept the complexity of the answer but I do point out that in the paragraph on page three of the testimony, the first full paragraph there, annual federal investment in transportation infrastructure increased by 21 percent in the past four years from an average of $21.1 billion in fiscal years 1990 to 1993 to an average of $25.5 billion in fiscal years 1994 to 1997. So I guess I am trying to put a number before the fact as to what those projections would be--recognizing that for the years 1998 through 2001, given the fact that whenever one projects into the future you have to depend upon whatever the authorizations and whatever the law is that is passed. You can always look back with certainty. But I was wondering what your plan was for the next four years, and I recognize that there are uncertainties in how that answer has to be given. Let me make then one comment. I have to enter into the conversation that my colleague from Arizona was having in regard to the formulas. Everybody can look at those formulas and once you have gotten down in numbers you are in deep doo- doo. But my colleague said he was happy to see that the formula was not set in concrete but of course we will set it in concrete and when we have gotten done setting it in concrete we will have a whole series of problems, one in setting it in concrete we will have a whole series of problems. But one I would just allude to here. One of the key controversies of the way the last ISTEA formula was set up was that it used 1980 census figures, I guess, even though at its very inception we had already had the 1990 census and could have done better. And here in this next five-year period we are going to have another census part way through the time of the authorization. And particularly for a state such as Arizona just to use it as an example, it is rising in population so fast that while the original could have been only ten years out of date by the time you get finished with the authorization you are 15 years out of date as compared with where they were in the actual 1980 census. And just using that as an example, I think it represents a case where these formulas ought to be flexible enough to deal with, you know, huge population changes that are occurring in some of the states and which will continue and which we know very much from the demography occurred during the course of the ISTEA period. So it is not a good thing that we set these things as much in concrete as we will undoubtedly do. Ms. Garvey. And, Congressman, let me just add that we provide for annual population updates so that it will be current. Mr. Olver. Well, you are to be commended then on that for providing that flexibility. With that, thank you, Mr. Chairman. Mr. Wolf. Mr. Tiahrt. Mr. Tiahrt. I have no questions at this time. Federal-Aid Highway Formulas and Factors Mr. Wolf. Last year, Mr. Slater stated that there were weaknesses in the current allocation of financial resources, that the formulas are mechanical, based more on political influence and should be ideally based on factors that reflect need and national program goals. How does the Administration's proposal reflect these needs and goals? Ms. Garvey. Mr. Chairman, in the Administrations reauthorization proposal we see a 30 percent increase in the core programs including interstate maintenance, the NHS and its intermodal connectors, the bridge program, safety, transit. There is a very strong commitment to those national priorities, and I think that is a strong statement for the Administration. Systems Performance Measures Mr. Wolf. The current federal-aid highway programs all use formulas that distribute funds among the states according to system size, traffic or prior program expenditures. As a result, the allocation formulas tend to perpetuate the status quo, fail to reward states for road systems that are superior, and fail to assist states whose road systems are in disrepair. Therefore, states have not focused their road improvements programs directly on system performance. How will the Administration's proposed allocation formula changes specifically encourage states to focus their programs on system performance? Ms. Garvey. Let me mention a couple of factors. One is that in the interstate maintenance program, we propose a tightening of the preservation and the rehabilitation requirements of the system. In the bridge program there is a tightening of the ability to flex funds out because of the enormous needs that we see in the bridge category. Even within the NHS system, while we have retained the flexibility for flexing the first 50 percent of funds apportioned for the NHS, we have in fact tightened some of the maintenance provisions on the NHS. We have a renewed emphasis on maintaining and rehabilitating the system. Rehabilitation, maintenance, and rewards for doing the job well will result in inproved maintenance of the system. I might also add that another element is ITS, which is an eligible activity within all of those major categories. States are able to use those funds for ITS if they would like, which will improve to the operation and maintenance of the system. State Administrative Costs Mr. Wolf. With regard to state administrative costs, the state highway systems vary widely in administrative costs from a low of 2 percent of disbursements in Nebraska to a high of over 15 percent in Maryland. Nationwide, administrative costs have risen 127 percent in the last 11 years, over three times faster than inflation and 37 percent faster than highway capital funding. Administrative costs now account for more than 8 percent of state highway disbursements. What actions has the Department taken or can they take to reduce the growth rate of state administrative costs and should there be an incentive program? Ms. Garvey. The approach that we are taking, Mr. Chairman, is really to highlight those places where things are working well. We are providing case studies to states wheretheir operations are performing effectively. Working closely with AASHTO, we have a very interesting effort underway where we are creating software that provides some techniques for states that are state-of-the-art, best practices. Mr. Wolf. What about incentives? Ms. Garvey. We do not have any incentives per se in place. I would also mention that operations costs of state highway departments vary depending on how they set up their operation. For example, the administrative costs are lower if they contract out a lot of their work. On the other hand, if they do more internally, the administrative costs may appear higher. Tony, did you want to add anything to that? Mr. Kane. I think that is it. There is a definitional problem with some of the analyses we have looked at because of the facts that Jane mentioned. And if you actually compare contracting out, you may or may not have gained in terms of total cost but on the state ledger you will not see staffing costs in the administration area. Another point is just that since it is fixed amounts that states get, it is in the states' best interest to be as efficient as they can because they are not getting any additional federal aid. And our approach now is to show and share good management practices. We are doing it a lot more. This sharing had been traditionally in the past mostly on engineering, but now we are doing it on management practices showing contracting out, where it works, where it does not, good maintenance management practices, et cetera. So we will be sharing case studies. state level of effort Mr. Wolf. A newly released Department of Transportation study on level of effort shows that many donor states invest less of their own state resources into transportation than other states, while many of the donee states dedicate a greater percentage of their own resources to their highway programs. Should states be required to maintain a given level of spending from their own funds in addition to the federal grants they receive, or should existing level of effort be considered in the allocation of federal transportation funds? Ms. Garvey. We have done a study on the level of effort. Your observation is correct. The first bit of the study indicated that there had been a decline in the level of effort and that was a concern to us. A more recent update is showing that has stabilized somewhat. We also found in the study that this is a very complicated issue. It was very, very difficult to assess how to correctly evaluate the level of effort, so at this time we have not factored it into the formula. We would be happy to brief your staff in more detail on that report. It is an interesting one and contains interesting observations about the donee states that in many cases are pushing very hard with their local resources. eligibility of amtrak under federal-aid programs Mr. Wolf. The Administration's proposal makes Amtrak projects eligible for funding under the National Highway System and Surface Transportation Program categories. What makes the Department believe that the states will use this flexibility? Ms. Garvey. We are not sure what states will use it. We certainly heard from some that they are interested in it. Mr. Wolf. What states? Delaware? Ms. Garvey. I think Maryland has indicated--or Delaware has indicated a real interest in Amtrak. I think there are some-- California has suggested that at times it may use the option. Again, what we are trying to do is create some options and some flexibilities for states and localities to make their own decision. Mr. Wolf. To what extent, if at all, can states pay for Amtrak operating costs from federal-aid highway program categories? Ms. Garvey. This is for capital investments, not the operating costs. Mr. Wolf. Well, how would that work for Delaware then? Ms. Garvey. They would upgrade their track which would be part of the capital investment. That is at least what Secretary Canby has indicated. Mr. Wolf. But isn't the operating costs their greatest problem? Ms. Garvey. I am not sure how they would handle the operating costs. I would be happy to speak directly with Ann Canby about that. Tony has just mentioned they would probably shift some of their traditional operating costs. istea reauthorization priorities Mr. Wolf. What are the FHWA's most important goals and priorities for the reauthorization of ISTEA? [The information follows:] NEXTEA is based on 9 core principles. The first is Putting Safety First. We have focused on three key areas: driver behavior, road design, and vehicle standards. The programs that we are proposing in support of this principle include the Flexible Highway Infrastructure Safety Program, the new Integrated Safety Fund, and the Motor Carrier Safety program. The second principle is Rebuilding America. To fulfill this principle, the Administration is proposing authorizing $175 billion over 6 years, an 11 percent increase over ISTEA funding levels. We propose to significantly expand the core programs, such as Interstate Maintenance, National Highway System, Bridge Replacement and Rehabilitation, Surface Transportation Program, Congestion Mitigation and Air Quality Improvement Program, and the Federal Lands programs. We are also proposing to provide the States with greater flexibility in their use of funds, and to streamline the process. The third principle is Increasing Investment through Innovative Finance Tools. We propose to open the State Infrastructure Banks to participation by all States and provide $150 million per year in seed money. In addition, we have proposed establishing a new $100 million per year federal credit program. The fourth principle is Ensuring Global Competitiveness. We propose creating new programs to facilitate trade, e.g., border crossing pilot program, supporting new programs of national significance through SIBs and credit program, and expanding eligibility of programs to include access to intermodal terminals and access to ports. The fifth principle is to Improve Access to Jobs and Training. Our efforts include proposing a 6-year, $600 million program to support flexible, innovative transportation alternatives to get people to where the jobs are. Also, we wish to increase incentives to provide job training in conjunction with federal-funded technology and construction projects. The sixth principle is Protecting the Environment. We propose retaining key environmental programs (CMAQ, Transportation enhancements, Scenic Byways, Recreational Trails). NEXTEA increases funding for CMAQ and TE by more than 25%. The seventh principle is Improving Transportation through Technology. NEXTEA funds at $100 million/year a new ITS incentive deployment program to help areas integrate ITS elements. IT also expands eligibility of program funds to include ITS and increases overall investment in technology research. FHWA's portion would increase about 20%, and focus on closing the gap between state of the art and state of the practice. The eighth principle is Strengthening Urban Communities. We propose sustaining investments in urban areas through the mass transit programs and surface transportation program. Our bill emphasizes technology that will provide needed additional urban travel capacity. Also, Welfare to Work programs will directly benefit urban areas. The ninth principle is Serving Rural Communities. NEXTEA strengthens the role of rural areas in the planning process. It also increases investment in core programs, such as NHS, STP and Rural Transit Assistance, which directly affect rural areas. Finally, it raises the authorizations for Federal Lands Highway Programs to $525 million (from $447 million). istea reauthorization nhtsa's goals and priorities Mr. Wolf. What are NHTSA's most important goals and priorities for the reauthorization of ISTEA? [The information follows:] The agency's overriding goal in NEXTEA (National Economic Crossroads Transportation Efficiency Act) is to reduce motor vehicle fatalities and injuries, and lower associated health care costs. NHTSA has worked closely with other DOT modes, including FHWA, to fashion an effective reauthorization proposal that cuts across intermodal lines to help achieve a safe and secure U.S. transportation system. Proposals for NEXTEA reflect the fact that safety is the Secretary's number one priority. The NEXTEA proposals must contend with the fact that motor vehicle deaths and injuries have increased in recent years, and the traffic fatality rate has ceased its decline and instead stagnated. A number of risk factors associated with crashes are evident: the number of older and younger drivers are increasing; use of alcohol and other drugs is rising, and the results are showing up in our crash statistics; safety belt and child seat use is still low; and speeding and other forms of aggressive driving have increased, as well as higher speed limits and attempts to weaken or repeal motorcycle helmet laws. NEXTEA needs to provide a balanced program for NHTSA that addresses both vehicle and behavioral safety problems, while providing a foundation for research, crash data and injury prevention activities. An active technical assistance program is required to support our safety partners in the states and communities, health and business arenas, educators, and safety advocates. This is consistent with NHTSA's role as a public health agency. A critical need in NEXTEA is to make an adequate Federal investment in highway safety, consistent with the top priority assigned to safety by the Administration. Coupled with this is our proposal to fund all of NHTSA's program from the Highway Trust Fund. NHTSA and FHWA incorporated flexibility for states to be able to shift their infrastructure safety funds to address other critical highway safety issues. A goal includes continuing a performance-based Section 402 grant program that supports basic highway safety programs in states and communities. NHTSA's proposal also recommends continuing the use of incentive grant programs because incentive grants have proven effective in motivating states to enact stronger laws and begin better programs. The proposal recommends incentives for new laws, programs and safety results in the areas of impaired driving deterrence and increased restraint usage, plus new initiatives to strengthen state data systems, and institute programmatic and legal actions to deter drugged driving. Since behavioral programs alone cannot prevent vehicle crashes and crash injury, the reauthorization needs to provide an adequate resource base for NHTSA's initiatives in both vehicle safety and consumer safety information. National surveys indicate the public wants safer travel and an active Federal safety program, including strong vehicle safety standards. The agency's goal is to maintain our statutory ability to fulfill motorists' safety expectations, and provide a secure resource base for meeting vehicle safety responsibilities. A final goal for NEXTEA is to create a foundation of critical research for pursuing future safety initiatives in vehicle crash worthiness and crash avoidance, as well as behavioral areas. Priorities include linking vehicle safety engineering and medical research to learn more about preventing crash injury. High among our priorities are promoting ``smart'' air bags, collision avoidance under DOT's Intelligent Transportation System program, and intermodal human factors work using research tools such as advanced motion-based simulation. Continuation of national crash and injury data systems is also crucial. effect of delayed enactments of istea Mr. Wolf. In testimony before the Senate, Deputy Secretary Mort Downey indicated that it was important to have the reauthorization bill enacted by October 1, 1997. What would be the immediate practical effect if enactment of a bill were delayed beyond the beginning of the fiscal year? [The FHWA information follows:] Even though the Intermodal Surface Transportation Efficiency Act (ISTEA) expires on September 30, and if legislation has not been enacted, the Federal-aid program will not immediately shut down because multi-year availability of contract authority apportionments that have been made to the States. We estimate that States would have a total of about $11 billion in funds subject to the Federal-aid obligation ceiling that will carry over and be available for obligation until the reauthorization legislation is passed. [The NHTSA information follows:] The immediate affect would be on NHTSA's Section 402 grant and National Driver Register programs--those programs that require contract authority authorization. In the absence of a reauthorization or a continuing resolution that might extend ISTEA authorizations, funds for the states to administer the Section 402 grants program would not be available. Without administrative funding, States would not only be unable to start new Section 402 projects, but also would not be able to continue to administer projects that were implemented in prior years. The implementation of the proposed Alcohol Impaired Driving and Occupant Protection incentive grants programs would also be delayed--programs that are specifically targeted to address some of the agency's greatest challenges. The services of the National Driver Register (NDR) program would also be interrupted. States would be unable to obtain crucial information on problem drivers, information that is relied upon by state licensing officials in determining whether or not to issue a license as well as the FAA in issuing pilot licenses. NHTSA staff would also be adversely affected, as funding for field office and NDR staff salaries would not be available. A delay in authorization, unless other measures were taken, would have an immediate and unfavorable affect on highway safety and NHTSA staff. Mr. Wolf. Estimates developed by the FHWA indicate that there will be about $11 billion in unavailable contract authority due to annual obligation limitations at the end of fiscal year 1997. These funds would be available to fund a program after October 1, should no authorization be enacted. How long can a robust federal-aid program be continued with these balances, assuming the limitation on first quarter disbursements is continued? When would the individual states completely deplete their balances? [The FHWA information follows:] The States should not have major problems continuing their programs through the first quarter of FY 1998, though their flexibility may be limited if apportionments within a particular program categories have been depleted. If reauthorization legislation is not in place by January, it is likely that many State programs would be significantly affected. Mr. Wolf. Is it accurate that states could manage a fairly robust program through the first quarter without severe disruptions? [The FHWA information follows:] In general, States should not have a major problem continuing their programs through the first quarter of fiscal year 1998, though their flexibility may be limited if apportionments within a particular program categories have been depleted. Mr. Wolf. How would the states manage their programs in the event there were no authorization and to what extent will variations in the states' unobligated balances by program category disrupt the federal-aid program? [The FHWA information follows:] In the event that reauthorization legislation has not been passed, there is about $11 billion in carry-over balances that are available for obligations by the states. State's balances will vary and portions that will remain within a specific program category (such as Interstate Maintenance of National Highway System) will vary also. States also may have limited flexibility once a particular program categories has been depleted. proposed changes in highway funding formulas Mr. Wolf. In testimony before the Committee, the GAO indicated that the existing formula for distributing highway funding is irrelevant and that outdated factors underlie the calculations for certain highway programs. Others call the formula unfair, inequitable and incomprehensible. What changes is the Administration proposing in the distribution of highway funds? [The FHWA information follows:] In recognizing the need to replace outdated and outmoded apportionment factors, we have proposed Highway Trust Fund apportionment formulas that we believe are fair to all states, yet relate effectively to the objectives of the basic program elements and satisfy the overall goal of the Federal-aid program to meet the Nation's need for the safe, efficient, and environmentally sound movement of people and goods. The basic formulas we propose are simple, easily understood, and generally recognized as valid, reliable, easy to gather, and can be readily updated. Major programs for which we have proposed new formulas include the National Highway System (NHS) and the Surface Transportation Program (STP), the two programs which we felt had the most outdated formula factors. Additionally, we are proposing new formula factors for the Infrastructure Safety Program and Congestion Mitigation and Air Quality Improvement Program. For the NHS program, the apportionment formula is comprised of (1) Contributions to the Highway Trust Fund-Highway Account (75%); (2) Commercial Vehicle Contributions to the Highway Trust Fund-Highway Account (15%); and (3) Total Public Road Mileage (10%). Our proposal also incorporates a \1/2\% minimum provision. We believe these factors provide a reasonable measure of the use and extent of the system, while they recognize that when the system was designated, there was a Federal commitment not to use system miles or travel directly as apportionment factors. For the STP, the formula is comprised of (1) Contributions to the Highway Trust Fund--Highway Account (70%) in order to capture highway use; and (2) Population (30%), in an effort to capture the overall demand for travel, and thereby achieve the broad, multi-modal goals of STP. Our proposal also incorporates a \1/2\% minimum provision. We recognize that a sudden change to new formula factors could be disruptive to state programs, and we have proposed certain equity adjustments to ease the transition to a more sound, logical basis for the apportionment of Federal highway dollars. Specifically, a Minimum Allocation adjustment will ensure that each state receives apportionments of at least 90 percent of its percent contributions to the Highway Account of the HTF. Secondly a ``90 Percent of Apportionments'' adjustment ensures that each state receives apportionments of at least 90 percent of its prior year's dollar apportionments throughout NEXTEA years. Lastly, a State Percentage Guarantee ensures that each state's share of NEXTEA annual apportionment dollars must equal at least 95 percent of its average ISTEA (FY92-97) percent apportionments throughout all NEXTEA years. In presenting these factors for conclusion, we fully understand that there is not one ``right answer'' to the question of apportionment formulas, and we will be pleased to work closely with you to develop apportionment formulas that will best meet all competing demands. donor/donee state issues Mr. Wolf. The current allocation of highway funds results in the distribution of funds as a percent of contributions to the trust fund from 83 percent to 707 percent. With respect to the equity issue, what specific changes is the Department seeking its reauthorization proposal to address the donor/donee state issue? [The FHWA information follows:] While we will be proposing a transition to formula factors that we believe relate well to the objectives of the basic program elements, and which we believe will be fair to all States, we recognize that equity adjustments will be needed to ensure an orderly transition to this more sound, logical basis for the apportionment of Federal highway dollars. In trying to respond to the needs of both donor and donee States, we have proposed certain equity adjustments to ease the transition to a more sound, logical basis for the apportionment of Federal highway dollars. Specifically, a Minimum Allocation adjustment will ensure that each state receives apportionments of at least 90 percent of its percent contributions to the Highway Account of the HTF. Secondly, a ``90 Percent of Apportionments'' adjustment ensures that each state receives apportionments of at least 90 percent of its prior year's dollar apportionments throughout NEXTEA years. Lastly, a State Percentage Guarantee ensures that each state's share of NEXTEA annual apportionment dollars must equal at least 95 percent of its average ISTEA (FY92-97) percent apportionments throughout all NEXTEA years. The situation of donor states under our proposal is more equitable than under ISTEA, with the apportionment shares for most States converging towards their percent contributions to the HTF (Highway Account). In fact, most donor States' apportionment shares increase under the formulas proposed in the Administration's bill, primarily due to the inclusion of HTF Contributions (Highway Account) as a major factor in the proposed formulas for NHS and STP. While most donor States increase their apportionment shares relative to their shares of HTF Contributions under our proposal, a few states still lie below 90% of their percent contributions to the HTF (Highway Account), prior to equity adjustments. Therefore, to protect these states, we have included a Minimum Allocation equity adjustment, whereby all donor states are guaranteed to receive at least 90 percent of their percent contributions to the HTF Highway Account. Although nearly all donee states gain apportionment dollars relative to ISTEA under our proposal, many lose small amounts in apportionment shares as we move toward new formula factors that are more closely related to Federal program purpose. First, donee states (primarily small states) are protected by the retention of the \1/2\ percent minimum for the NHS, STP, and IM programs (and \1/4\% for Bridge R&R). Second, geographically large, donee States are protected through the inclusion of Total Public Road Mileage as a factor in the NHS formula. Lastly, and most importantly, including a `State Percentage Guarantee' as an equity adjustment ensures that all states will receive at least 95 percent of their average ISTEA (FY92-97) percent apportionments throughout all years of the NEXTEA bill. We recognize that a sudden change to new formula factors could be disruptive to state programs, and we recognize that an equity adjustment must consider what States have contributed to the Highway Trust Fund, but must also provide some protection from rapid changes in apportionment dollars received. We believe our proposal will do that, but we fully understand that there is no one ``right answer'' to the question of apportionment formulas, and we will be working closely with you to develop apportionment formulas that will best meet all competing demands. system performance rewards Mr. Wolf. Will the Administration propose a ``reward'' allocation to those states that have improved their system condition, and similarly, will the Administration propose an ``assistance'' allocation to assist states whose systems are in disrepair? [The FHWA information follows:] Although we believe performance measures can play an important role in improving the planning and administration of the Nation's transportation system, we are not proposing to use a performance-based ``reward'' allocation such as you suggest as a way of apportioning Federal-aid highway funds. There would be a number of difficulties in doing so, including the difficulty of developing a single, widely agreed upon set of performance measures for highway system conditions that would be valid across time and from State to State. In fact, many States have expressed serious reservations about the feasibility of such an approach. Regarding an ``assistance'' allocation to assist states whose systems are in disrepair, the Administration has not proposed a specific provision because such a provision may carry with it a perverse incentive for States to allow their highway infrastructure to worsen in order to capture a greater share of Federal funds. We have proposed apportionment factors for the NHS, STP, and Interstate Maintenance program formulas which reflect the use and extent of the system, and therefore, serve as proxies for system needs. We believe that use of these proxies mitigates any perverse incentive which may be associated with direct needs measures. Additionally, the use and extent factors utilized in the FHWA-proposed formulas (e.g., vehicle miles of travel, Highway Trust Fund contributions, and lane miles) have been shown in studies to hold a close correlation to system needs. The one program for which direct needs measures continue to be used is the Highway Bridge Rehabilitation and Replacement Program (HBRRP) formula. The current Bridge formula, based on the cost to repair deficient bridges in each State, was retained due to special nature of bridge needs and limitations of prospective alternative factors. The Administation's NEXTEA proposal attempts to mitigate any perverse incentive associated with retention of the current `cost to repair' formula by limiting the percentage of Federal bridge funds which a State can transfer to other programs (e.g., the NHS or STP) to 50 percent, and by allowing such a transfer for a State only when none of its NHS bridges require posting under the National Bridge Inventory Item 70, which evaluates the load-carrying capacity of a bridge. Additionally, Federal bridge funds transferred to other purposes in fiscal years 1998 through 2002 must be restored by the State to their HBRRP apportionment by the end of FY 2002. Any amounts not restored by that time will be deducted from the total cost of deficient bridges for that State in FY 2003, thus reducing their HBRRP apportionments. Congestion Mitigation and Air Quality Program Mr. Wolf. Since air quality is improving in virtually all states, congestion is essentially a local phenomenon, and the link between air quality and congestion is unclear, why is an increase in the congestion mitigation and air quality program of almost one-third necessary, and if it is, why not allocate these funds based on the actual congestion in each state? [The FHWA information follows:] Air quality is improving in most areas of the country. Nonetheless, 68 areas still do not meet the current standards for ozone, another 31 do not meet the standards for carbon monoxide (CO), and 79 do not meet the standards for small particulate matter (PM-10). The FHWA cannot precisely specify the link between transportation and air quality given current models, but there is a clear correlation between the amount transportation- related emissions generated and transportation behavior including: the number and length of trips, overall speeds and the number and duration of hard accelerations. In that transportation still accounts for a minimum of 27 percent of emissions for hydrocarbons (a precursor of ozone) to a maximum of 64 percent for carbon monoxide according to EPA estimates, there is still a need to reduce emissions from transportation sources. The Administration's reauthorization proposal includes a 30 percent increase in CMAQ funding because it is a highly successful program on a multitude of fronts. It is ISTEA's most flexible program. The CMAQ program has funded over $1,700,000,000 in transit improvements, and another $500,000,000 has gone for ridesharing, demand management and bicycle and pedestrian programs. It has succeeded in bringing new players into the transportation planning process. And it provides many benefits, especially congestion relief, energy conservation and even economic development. The Administration believes it is important to preserve these benefits and to enhance them by increasing the authorization level. The program has historically been focussed on air quality. Funds are apportioned on the basis of air quality need, and eligibility is allowed only in cases where air quality is improved. Switching from an air quality basis to a congestion basis would be difficult because there is no uniformly accepted method for measuring congestion, even in a single metropolitan area. Apportioning funds on this basis would be highly controversial. Finally, it would result in only a slight change the form and function of the program, because most of the projects funded under CMAQ also relieve congestion. Proposed Transfers from the Highway Trust Fund Mr. Wolf. In addition to funding new programs from the highway trust fund, like Amtrak and the state infrastructure bank and transportation infrastructure credit programs, the Department is proposing to use the highway trust fund to pay for other highway construction projects performed by other federal agencies, such as the National Park Service, the Forest Service and the Bureau of Indian Affairs, among others. This funding is different from the existing federal lands programs which covers public lands highways, park roads and parkways, and Indian reservation roads programs. How much in total would be transferred from the highway trust fund to the general fund to pay for these agencies' highway construction activities? [The FHWA information follows:] Section 7006 of the proposed bill directs that the Secretary transfer receipts from the highway trust fund (other than the Mass Transit Account) to the general fund of the Treasury in an amount equal to the enacted annual appropriations for selected transportation-related programs of other agencies. These other agencies are limited to the Department of Energy, the U.S. Park Service, the Bureau of Indian Affairs, the Department of Agriculture, the Department of Housing and Urban Development, the Environmental Protection Agency, and the Appalachian Regional Commission. The amount transferred each year would only equal the amount that Congress appropriates for the transportation-related portion of the listed accounts. Although the bill does not identify specific amounts, it is estimated that the total amount of funding covered by this section will be approximately $3.213 billion for fiscal years 1998-2003. Highway Trust Fund Outlay Rates Mr. Wolf. The outlay rates of the new programs to be funded out of the highway trust fund, including Amtrak and the transportation infrastructure credit program, are much higher than the typical federal-aid highway program. To what degree will this result in an increased drawdown of the trust fund? [The FHWA information follows:] The new transportation infrastructure credit enhancement program will have a slight impact on trust fund balances, since the grants made to capitalize revenue stabilization funds for selected projects of national significance likely will be made up-front--probably within a year of their obligation. Thus, resulting outlays from the highway trust fund will occur more quickly than outlays for the regular Federal-aid program, which typically occur over a period of several years following the obligation of funds. However, the new credit enhancement program is funded at $100 million,which means that maximum first-year outlays of $100 million would exceed the historic Federal-aid outlays of $17 million by about $83 million. This difference would have a minimal impact on the highway account balance, which is currently about $10 billion. Shift of Programs from General Fund to Trust Fund Mr. Wolf. In total, what amount of funds in fiscal year 1998 are to be derived from the highway trust fund that are currently derived from the general fund? Given these increased expenditures, will this bring the balance of the fund close to a ``prudent minimum balance''? [The FHWA information follows:] Programs currently funded from the general fund that will be included in NEXTEA as trust funded programs are as follows: FY 1998 Funding Program (In millions) State Infrastructure Banks.................................... $150.00 AMTRAK (including NECIP)...................................... 767.45 WMATA......................................................... 200.00 NHTSA Operations & Research \1\............................... 147.50 Transit Administration \1\.................................... ??? Other Agencies................................................ 646.00 -------------------------------------------------------------- ____________________________________________________ Total....................................................... $1,910.95 \1\ Split-funded in previous years. The projected balance for the Highway Trust Fund at the end of FY 1998 is $27,766 million, with $16,481 million in the Highway Account and $11,285 million in the Mass Transit Account. A ``prudent minimum balance'' for the Trust Fund is considered to be about $3,500 million, with $3,000 million of that in the Highway Account. Such a balance would provide a safeguard for the programs supported by the Trust Fund from unforeseen events. An example is the oil crisis in the mid- seventies, which reduced the amount of revenue flowing into the --------------------------------------------------------------------------- Fund below anticipated levels. [The NHTSA information follows:] The amount of funds to be derived from the highway trust fund in fiscal year 1998 which is currently derived from the general fund is $87.3 million. NHTSA's total trust fund request, including the $87.3 million currently derived from the general fund, is $333 million or 1.1% of the total trust fund ($29.071 billion). Therefore, the impact of these increased expenditures to the trust fund balance is negligible. Mr. Wolf. Why should these programs be funded from the highway trust fund? [The FHWA information follows:] The Administration's intent behind these funding changes is to fund all surface transportation-related programs from the highway trust fund. [The NHTSA information follows:] The Department is proposing to shift funding in fiscal year 1998 for a number of transportation-related programs currently funded, in whole or in part, from the general fund to the Highway Trust Fund including: Amtrak; transit planning and research and operations: and NHTSA operations and research. The basis for this shift is that programs to be funded from the Trust Fund be directly associated with highway construction or preservation, provide transportation services that reduce the demands placed on the nations highway and/or provide direct safety benefits to highway users. NHTSA's motor vehicle and behavioral programs provide direct safety benefits to highway users--those who directly contribute to the Highway Trust Fund through the federal gasoline tax. In previous years the Highway Trust Fund supported most of NHTSA's programs, approximately 75 percent of NHTSA's enacted budgets. This proposal would fund all of NHTSA's programs in FY 1998, a total request of $333 million. central artery/tunnel project costs Mr. Wolf. As you know, the Central Artery/Tunnel project, estimated to cost $10.4 billion, is one of the largest and most expensive highway construction projects ever undertaken. It has advanced further in the last year than at any other time in its history. With the Ted Williams Tunnel open to traffic and construction of the underground Central Artery well underway, the project is about 75 percent designed and 25 percent constructed. About $8 billion of the $10.4 billion in contracts are either completed or awarded. Last week, the GAO reported that the costs have increased on the project but that these increases have been offset by assumed savings to keep the total price tag at $10.4 billion. Do you share the GAO's opinion? Ms. Garvey. GAO, raised a number of concerns but they are concerns that we have shared all along, which is exactly why we have the cost containment measures in place. As you know, we are monitoring the cost of the project on a monthly basis. We have a cost management system in place that allows us to do that and it has been very effective. We feel that the benchmarks that we have in place, the systems that we have in place allow us to keep very close tabs on the project. I think GAO has done as others have done and flagged some issues for us but we feel it is very much under control at this point. The most immediate issue for the state right now is their own finance plan. As you know, we had set April 1 as a date for them to work with their legislature to identify more specifically which options they wanted to use locally to finance the plan. I understand that they are working very closely with their legislature and that they expect to vote either this week or next week honing in on the options that they will be choosing. That is an important date for us, April 1, to move that plan forward. central artery/tunnel cost containment goals and project costs Mr. Wolf. The GAO reported that the assumed savings, the biggest of which come from the projects' owner-controlled insurance program, may be optimistic, and they noted that the project is not meeting its cost containment goals and that construction cost increases are nearly double what the project predicted. Do you believe that the project costs can be kept within the $10.4 billion? Ms. Garvey. I think it can. Many of the increases in the early years were due to design changes. It is a much clearer issue, I think, when you are dealing with construction contracts so that makes it a little bit easier to nail down costs. So, again, we have the benchmarks in place and the mechanism in place so that if there are problems we know it right away. The monthly monitoring has made a big, big difference. central artery/tunnel insurance program Mr. Wolf. Are the states' projections on the savings on the insurance program realistic? Ms. Garvey. I know that Tony has looked at that carefully, but the wrap-up insurance does seem to be a very effective savings for them. Mr. Kane. Mr. Chairman, the original estimate for it was based upon nationwide average insurance risk. As a result of the first four years of construction, there has been a much better safety record on the project than nationwide. In fact, we are able to build in to the last adjustment about a $200 million savings. Periodically they are adjusted and what has been happening is that the rates have been coming down on the package. So to date, the history is telling us that it is on track, it is safer than the national averages, and as a result the annual adjustments and the wrap-up costs have been coming down. Mr. Wolf. Is there a history of projects having that type of savings? Mr. Kane. Most have not been as big. That project is just of such a different scale. You have not had a duration of construction as long and so that is why they originally started out with nationwide averages. A little more simple answer to the question without knowing all the projects is that most of them have been of a smaller scale. We have used that concept, smaller duration, and you tend to just stay with the average rates. central artery/financing strategies Mr. Wolf. Massachusetts' December 1996 feasibility study proposes a strategy of borrowing to cover project funding shortfalls between now and the year 2005, including a $1 billion contribution from the Massachusetts Turnpike Authority based on revenue bonds backed by toll increases, and, two, issuance of short term grant anticipation notes, to be repaid with future federal highway apportionments. Does Federal Highway believe that the financing strategies outlined in the consultant's study are appropriate or viable? Ms. Garvey. Massachusetts outlined a number of strategies. Some I think hold more promise than others. I think some of the bonding strategies that they outlined hold some promise. Using some of the resources from the Massachusetts Port Authority hold some promise for them, and we did not suggest which option was preferable. We said you need to work that out with your legislature, you need to work that out with your state finance people, come back to us with the strategies that you think offer you the most promise. I think the grant anticipation note has good potential for them. Mr. Wolf. You do not tell them what to do? Ms. Garvey. No, exactly, Mr. Chairman. Mr. Wolf. Are you conveying your recommendations to them on a regular basis so that they know? Ms. Garvey. We have talked with them at various points throughout the plan. They have been very forthcoming about not only presenting the plan but also telling us how they are doing with their deliberations, what their legislature may be concerned about, what direction they are heading. So there seems to be a very good cooperative spirit. It is a tough issue for them but they seem to be taking it on in a very forthright manner. I have a lot of respect for them. Mr. Wolf. If you can notify the committee. I know that GAO and IG and your people are looking at it and I appreciate that. If you can notify the committee if any red flag comes up if any significant changes taking place. Ms. Garvey. We will be very happy to do that, Mr. Chairman. central artery/tunnel advance construction Mr. Wolf. The Federal Highway Administration has allowed the continued use of advance construction authorities to meet project requirements until April 1, 1997. In doing so, the Federal Highway Administration indicated that this would allow sufficient time to complete third party arrangements and pursue legislative options identified in the feasibility study. What actions will Federal Highway take if legislation is not passed? They were going to act this week or next week, right? Ms. Garvey. That is right. We have to look at the actions before us and see how well they are doing. They are very concerned. They know we are very serious about the April 1 date. Mr. Wolf. So they are obligated to act by---- Ms. Garvey. Yes, absolutely, Mr. Chairman. I think in some ways it has been a help to them because it kept the pressure on all parties and has given them a goal to shoot for. central artery/tunnel insurance program Mr. Wolf. In FHWA's opinion, are the state's projections of savings on the insurance program realistic? [The information follows:] We understand that the GAO is concerned about the degree of certainty that can be assumed for the large savings that have been reported for the Owner Controlled Insurance Program (OCIP or Wrap-Up Insurance). Given the fact that the project is entering the heaviest phase of construction over the next several years, GAO is concerned that the level of savings trended for the OCIP may not occur. While we understand the cautionary tone reflected in GAO's comments, the FHWA continues to believe that, as in a number of other areas on the CA/T project, an appropriate management and oversight strategy for the OCIP is to set clear and measurable objectives or milestones regarding project costs and schedules. Then FHWA's and the Project's performance can be clearly measured against meeting these objectives or milestones. Given this recommended oversight strategy, the OCIP is an excellent example of one of the more readily ``trackable'' programs. The Project Management Monthly Report tracks the Insurance Program's measures on a monthly basis, giving early indications of any positive or adverse trends. The structure of the insurance program now reflects and benefits from that trackability in its use of a ``retrospective'' approach that allows for adjustments in the cost of the program based on how claims have occurred during a preceding year. The extraordinary success of the Insurance Program can be reported as very real given the established track record of safety programs and insurance claims on the project during the last four years, a period that certainly contained its share of heavy construction in sensitive areas. Each year that successes occur in very measurable and actuarial aspects of the insurance program, the Project is more and more able to report a firming up of the expected performance of the program in the future. Likewise given the ``retrospective'' adjustments based on year by year performance, the Project will have early indicators of any trends that may be developing. Finally, the Project continues to proactively explore ways to further improve the excellent safety record. Therefore, in summary, FHWA has accepted and believes that the state's projected savings on the insurance program are realistic. central artery/tunnel project cost review Mr. Wolf. What is FHWA doing to review and scrutinize project costs? [The information follows:] The FHWA is actively involved with the Massachusetts Highway Department (MHDF) Central Artery/Tunnel (CA/T) staff in scrutinizing and in controlling total project costs, and in developing a variety of cost saving strategies. The unprecedented allocation of resources to staffing in FHWA's Massachusetts Division Office and assistance from both Region and Headquarters Offices, has enabled the FHWA to provide a program of both comprehensive and tailored oversight regarding cost, schedule and quality. The FHWA engineering and technical staff provide a range of project or contract specific design and construction monitoring based upon a geographic assignment of responsibility. Each ``area'' engineer is specifically responsible for monitoring all Federal-aid work within this assigned area, reviewing designs to ensure that components are both economical and cost-effective. This design review also ensures compliance with necessary standards. Area engineers are also responsible for monitoring of costs and quality for their area during construction, monitoring construction procedures and the administration of change orders as necessary. A variety of technical experts are available from the Division, the Regional and the Headquarters levels of FHWA to provide special expertise to the area engineers as needed during both design and construction. This expertise is especially valuable in ``bench marking'' design or construction procedures and cost- effectiveness in areas such as specialty tunnel areas or environmental mitigation. Besides contract-specific monitoring, FHWA's Massachusetts Division Office, supplemented with assistance from the Region and Headquarters, also provides programmatic oversight through a variety of ``task team,'' ``peer review,'' or ``process review'' activities. These activities insure that design and construction processes are designed or re-engineered to provide streamlined and cost-effective outcomes. To give two examples from 1996, task team/process reviews were conducted on the wrap-up insurance program and the geotechnical instrumentation. Cost saving strategies were identified in each review. The Division Office also participates in a number of MHD CA/T committees that have been charged with managing costs on the project. Examples of these activities include the Cost Containment Committee (generating innovative approaches such as the ``Design to Cost'' program, an approach that controls growth of design estimates) and the Project Contingency Allowance Committee (controlling costs associated with such issues in construction as changed site conditions). Through further participation on value engineering teams and through construction partnering, Division Office representatives ensure that cost-effective functional designs are provided and moved to construction in a fashion where costly litigation or dispute resolution is avoided through collaboration with the contracting industry. Total costs and cost trends are closely monitored by the FHWA upper management at all levels by proactive involvement in Project Management Monthly reporting and through quarterly briefing of FHWA's highest management. These review activities include monitoring and periodic validation of macro-level Finance Plan assumptions or trends in areas such as information and bidding results. central artery/tunnel cost estimate Mr. Wolf. Does FHWA believe it is time for Massachusetts to revise its cost estimate to be more realistic? [The information follows:] The cost estimate for the Central Artery/Tunnel (CA/T) is in essence being revised monthly. This has been done for approximately a year now as part of the Project Monthly Management report which tracks the actual project cost and schedule, compares it to the Cost/Schedule Update 6 (Rev 6) and previous forecast, and develops a new forecast for the remaining cost and schedule. The report also shows the changes from the previous month for actual verses planned costs and schedule time. The result is a current cost-to-go and total cost, and a current schedule on a monthly basis. Assumptions used for Rev 6 are also being tracked. While some of the assumptions are tracking better than others, the overall project cost is staying within budget. As part of the next Finance Plan Update, presently planned for October 1, 1997, FHWA will assess the need to revise these assumptions. central artery/tunnel grant anticipation notes Mr. Wolf. Is the use of grant anticipation notes to leverage future federal funds a feasible strategy for financing $1 billion or more of a project's costs? What experience has FHWA had with these kinds of instruments? [The information follows:] The FHWA believes that the use of grant anticipation notes (GANs) is a prudent and effective way to cover the timing gap between a project's up-front cash flow requirements for construction and the receipt of future anticipated Federal aid. The amount that can be financed through GANs depends on the size of the cash flow shortfall, the term of the notes, and the predictability of the future Federal grants to be used to repay the GANs. GANs have been used extensively in connection with other Federal aid programs (notably FTA and EPA), but only occasionally with FHWA receivables because States have had sufficient cash balances in their highway programs to internally finance the timing gap, thus avoiding the need to borrow externally through GANs. For large projects, such as the Central Artery, now it may be necessary to consider using GANs to meet cash flow needs. central artery/tunnel shortfall estimates Mr. Wolf. Does FHWA believe that the annual shortfall estimates are accurate? How much will these estimates go up if costs increase? [The information follows:] Yes, the annual shortfall estimates (cashflow needs) are believed to be as accurate as can be for the scenario(s) used in the CA/T Finance Plan, and recognizing that the actual Federal funding levels for post-ISTEA are still unknown. The effect of cost changes, even assuming the same scenario(s) for unknown post-ISTEA Federal funding levels, would depend in what year the associated changes were build and needed to be paid. That is, a design change or construction change could be known today, but its affect would depend on whether the actual billing for the resultant work occurred in a peak cashflow year or afterwards when cashflow needs are not as great. state funding options for central artery/tunnel project Mr. Wolf. What fallback position is available to the state if the strategies outlined in the consultant's report are not sufficient to meet the funding gaps? [The information follows:] The Metropolitan Highway System (MHS) Financial Feasibility Study contained several options for the State's share of costs associated with the CAT interim cashflow needs, total CAT project cost needs, and also operating expenses for an MHS. The options included revenue bonds backed by toll increases, interim borrowing backed by anticipated Federal funds, increased gas tax, toll increases, and/or other State sources. The Executive Office of Transportation and Construction requested legislation, which passed both houses of the State legislature and is expected to be signed by the Governor shortly, which turns the construction of the CAT, and operation of the MHS (including CAT) over to the Massachusetts Turnpike Authority (MTA). The legislation also indicates the amount of State share to be paid by the Massachusetts Port Authority (MassPort or MPA), MTA, and the Massachusetts Highway Department (MHD). It also enables them to adjust tolls as needed to cover such costs. The State would have the option of covering funding needs by such tolls, short term borrowing, or if necessary could consider a gas tax. The latter is not considered needed by the State, at least at this time. air bag fatalities Mr. Wolf. In January 1997, NHTSA reported 54 air bag fatalities, 35 children and 19 adults. Has this number changed? Mr. Martinez. Yes, those numbers have changed. Mr. Wolf. What would it be with regard to children? Mr. Martinez. I want to tell you, Mr. Chairman, that in my mind there are cases under investigation and cases that have been finished. I will just give the last number. There are 38 children now. Mr. Wolf. 38? Mr. Martinez. Yes, sir. Mr. Wolf. And adults? Mr. Martinez. Adults, total is 24 adults. Mr. Wolf. 24. So it is growing. Mr. Martinez. Yes, sir, and that is the issue ahead of us and the reason we have focused on the awareness issue in order to minimize that growth while we move on to more logical solutions. depowering air bags Mr. Wolf. Now let me ask one other question and then I will turn to Mr. Tiahrt on that issue. On December 19, as you know, the subcommittee held a hearing on air bags, and at that hearing NHTSA stated that the Department was moving rapidly to reduce or eliminate the number of fatalities to children and small-stature adults. Shortly thereafter, the agency issued a notice of proposed rulemakings to depower air bags and allow for consumers to deactivate their air bags. While everyone is pleased that the agency has moved rapidly on these rules, it is my understanding that the agency has not yet issued a final rule on depowering. In fact, I had heard that you may want to come up and do that today. Mr. Martinez. It is imminent, yes, sir. Mr. Wolf. At the December 19th hearing, the automobile manufacturers testified that if this rule was not implemented by mid-February, depowered air bags could not be installed in model year 1998. What are you doing to assure that the depowered air bag rule is expedited so we can eliminate the tragic fatalities? And, if you recall, I remember in fact sitting about where you are sitting the gentleman from one of the auto manufacturers said that if the rule was not issued by mid- February, you would lose a whole year. If you produce about a million cars a month you are talking about missing 12 million cars. Mr. Martinez. Right. That comment concerned me. Let me put it in perspective for you. When I first came into this Administration, the average time from the notice of proposed rulemaking to the final rule was 18 months. We began to re- engineer the process, because we thought there could be significant savings. We got the time down to about 14 or 15 months. The last rules we released were at a record pace, within four to five months. I am telling you that we will have this one out imminently, within three months. Mr. Wolf. Well, then that means you actually missed the---- Mr. Martinez. No, that is my second point. That comment concerned me so I went back to investigate. I met with Mr. Card to ask about that. That comment addressed when they start their purchasing for the next year. That window of opportunity is open through May, and I explained my concern to him about putting down a marker like that. In truth the industry has said to Canada that they were going to have depowered air bags in the marketplace by 1998, because they do not have the constraints we have in the United States. They should already be working on those vehicles. I am fully confident from my conversations with the industry, that we are on the same page and we will have depowered air bags sooner rather than later. We will make the 1998 date if not before. I believe the industry is working very hard on this. Mr. Wolf. So you have not missed the year? Mr. Martinez. No, sir. That was when they start their window of opportunity, their purchasing aspect. That would close somewhere around the end of May. I certainly appreciate their concern to move things forward. I have had conversations with the industry to keep abreast of what their current plans are and I think this will probably even come into the fleet before the 1998 model year starts. states with increased speed limits Mr. Wolf. Okay. Mr. Tiahrt. Mr. Tiahrt. Thank you, Mr. Chairman. First of all, we allowed states to raise the speed limits. Do we know how many states have raised the speed limit as of this date? Mr. Martinez. Yes, Mr. Tiahrt. Thirty-four states have made changes, 23 states have increased the speed limits to 70 miles per hour or greater. We discussed this a little bit earlier, and to recap on that, we are looking to evaluate that. There are two issues to that. One is to look at fatalities and injuries. The second is to look at the number of miles driven. Not all of this data is available at the same time. We are trying to gather information as best we can. We will try to have a report to Congress by September. Mr. Tiahrt. In many states like Kansas and Wyoming, I am interested in knowing how much the average speed has changed even though the speed limit has changed. I know that in going through Wyoming several years ago my father got a speeding ticket and it was $5.00 and I think he was traveling about what the speed limit--now it is about 75 but at that time of course, it was 55 and they had ways of softening the blow. How can you take into consideration the average speed increase in your data? Have you thought about that? And I apologize for not being here earlier but did you address that issue? In addition, is there a way to find that out? Mr. Martinez. We do try to find what the average speed is before and after and also look at what was done. For example, I believe Maryland raised their speed limit from 55 to 65, and in truth the actual speed was somewhere like 64 miles an hour. When they raised it to 65 they increased their law enforcement and found that the average overall speed varied very little, still somewhere around 65 miles an hour or so. Some states have been very vigilant about that. One of the concerns we have is that the repeal of the national maximum speed limit also repealed the reporting requirements. We are working with states on how to get thebest data we can. I cannot tell you off the top of my head that I know all that. We have worked through the Federal Register to make sure that everyone can comment on how we move forward, and on what sort of information we need and what information we will use to make estimates where we do not have actual information. Mr. Tiahrt. When I was in the Kansas state Senate we addressed the issue of whether we should require helmets for people who use motorcycles and some of the information that was presented in the transportation utilities subcommittee was that head injuries per accident or per 100,000 miles was about the same for motorcycles that it was for automobiles. And it seemed there was not anything we could do to offset that. I mean it seemed like that logic was that if you are going to require helmets for motorcycles you should also require them for motor vehicles. But is there information--you probably have access to a lot of other studies too comparing automobile head injuries per miles driven versus motorcycles. Mr. Martinez. Off the top of my head, I cannot tell you that I know the answer to that. I can say that, you know, the physics of a car crash versus the physics of a motorcycle crash are two very different things. In a car crash you basically have areas that are padded inside. In fact, we passed head injury protection last year to allow that to occur. You could be coupled in the car and the car can absorb all the injury from the crash. In fact, in a motorcycle crash you are essentially ejected from the vehicle because you are sitting. There is nothing in front of you to hold onto the vehicle. You cannot do it with your strength, and of course you do not even want to be belted to the bike because it tends to rise up and come over and crush you, especially if there is something in front of you. The two areas of immense injury from motorcycle crashes are the lower extremities, this is very difficult to prevent because you are essentially like a pedestrian. If you go forward in a crash, your lower extremities tend to hit in front of you. The second one is your head. Instead of putting a car around you, we put a helmet around your head; and that is the way we try to make a difference. We did do a study last year which actually showed even more effectiveness with motorcycle helmets than we knew before, because what it did was take real data from real states such as Kansas. We now have funding for the states to get a look at the real data. It took crash data and linked it with emergency medical service data and hospital data and found that motorcycle helmets were even more effective. Now you are talking about bringing it to where the real diagnoses are made with a CT scan and MRI. We found that the helmet is 67 percent effective in preventing a head injury. And those head injuries, as you know, are a large cost to society. You don't really necessarily get better, so you end up having disability costs and everything else. We can certainly point to real data from real states to show that the helmets are much more effective than we thought, and are making a difference in taxpayer dollars. Regarding the question asked about the exposure data, I would have to get better numbers from you and take a look at that. Woodrow Wilson Bridge Mr. Tiahrt. For those of us that commute from Virginia, the Woodrow Wilson Bridge is kind of a bottleneck, and we try to avoid it. Perhaps the best solution is to require all District of Columbia city personnel to live within the District. That would stop a lot of the traffic. But until that happens, we may want to do something with the Woodrow Wilson Bridge. And it is only six lanes, and I guess the estimate to increase it to 12 lanes would be about $1.6 billion. You do have something in the budget for that, I assume. How much is it? I thought it was around $400 million. But what is it this year? Do we know? Ms. Garvey. That is correct, Congressman. We do have that included in the budget, $400 million. We are also looking at innovative financing techniques to help support the cost of the bridge. I can tell you in terms of the schedule, we are in the final stages of the design work, getting ready to prepare the environmental statement which will be ready for public comment probably about a month from now, with a record of decision sometime in early June. Mr. Tiahrt. So we don't know where the rest is going to come--I guess we don't have a firm estimate on--because we don't know what the design is. Obviously, you are not going to--it is not going to be a tunnel. Right? Ms. Garvey. That is correct. The committee that worked on it--I thought did some wonderful work and came up with a preferred alternative. That is reflected both in a draft report that we have ready for submission to Congress, as well as the EIS. And you are right. The preliminary estimates are preliminary. More refined estimates will be available as we move into the design phase. District of Columbia Mr. Tiahrt. I know we have a vote coming up. I sit on the District of Columbia Appropriations Committee which proves I have probably done something wrong in my life. You have $125 million, I believe, for transportation here inside the District of Columbia. And one of the concerns I have coming out of the contracting area before I got into this job in another life, looking at how that process works, in Kansas when they let contracts on the highway system, you know, in about 120 days they can request a bid and give a contract out. Here, just the process to contract takes about 150 days, even longer--just that one portion of the overall bidding process. Now, you do some oversight of the District of Columbia. How is that going, and do you have any suggestions for improving it? Ms. Garvey. Let me make a couple of comments. We have actually been providing technical assistance to the District to look at that very issue, to reduce the number of days it takes to let contracts and the process they use. And you are right. It takes too long in the District. There have been some improvements. I think there is a ways to go, and we are continuing with that kind of technical assistance. We completed a very comprehensive report about a year ago making some recommendations for how the procedures could be improved. And the District has implemented some of them. Some of them areworking through the Finance Board as well as with the Mayor's Office to make sure that they are put in place. I will just mention the plan--the transportation piece of the President's plan which he is getting ready to submit to your committee for legislation. It does include some elements that will have an effect on the District of Columbia's Public Works Department. We are suggesting that a governing authority be set up that could establish some of the priorities on the national highway system. I think one of the comments the President made very early on is that the District is not really a city and not really a state. And our proposal would allow the Federal Highway Administration, the Department of Transportation to assume some of those state responsibilities so that we could focus on the NHS and the NHS bridges within the District and allow the District of Columbia Public Works Department to focus on the local roads, which is really what a city DPW does in most other communities. The governing board would establish the priorities. The implementing arm would be the Federal Highway Administration, either our District Division Office or our Federal Lands Office--working very closely with the District to talk through that plan and to talk through some of the elements. So I think there is some promise there to make the kind of investment and make the kind of improvements that are needed for the District. Mr. Tiahrt. So if I understand you correctly, you would take over the highways basically---- Ms. Garvey. We would take over the national highway system, which in all other states, as you know, are state responsibilities. And then the street maintenance and street care would still stay within the Public Works Department. And we would continue--and I think it is an important point the technical assistance that we have been giving for the last year to the District so that we can continue the kind of improvements that I think the District is interested in achieving themselves. Mr. Tiahrt. There are some structural changes--not physical but policywise that I think probably need to occur inside the District of Columbia. That is one of the things that we have to look at in order to smooth the process. Apparently, some piece of paper stops on somebody's desk for an extended period of time. Ms. Garvey. Absolutely. Mr. Tiahrt. And your contracting process works smoother. I don't know if it is the best. It is not the worst. But certainly there are some suggestions that you could have, and I would be open to looking at those. Ms. Garvey. If you would like a briefing, we can give you a full briefing on the work we did last year that lays out the recommendations that we have made to the District and to the Mayor's Office, and also a more in-depth discussion of our proposal as well if that would be helpful. We would be happy to do that. Mr. Tiahrt. Okay. Ms. Garvey. Thank you. Mr. Tiahrt. Mr. Olver, do you have any more questions? I guess we are going to recess until after the vote so we have got about 10 minutes left in this vote, and we will be back after that. [Recess.] Woodrow Wilson Bridge Mr. Wolf [presiding]. I apologize. The vote is over. I think we are going to be free for a good while. As I left, I heard music in my ear of Mr. Tiahrt talking about the Woodrow Wilson Bridge. And I have some questions, and I didn't ask---- Ms. Garvey. You would have loved my answers. Mr. Wolf. I don't know what you said so I am going to jump ahead and get to that subject. At the outset, let me just say that I really think what the Department has done is really insufficient. I think it is wrong. The Woodrow Wilson Bridge is a Federal bridge. And if that bridge were being constructed under the highway program, the bridge program, it would be 90/ 10. Certainly you could argue 80/20. And to propose a federal share of $400 million, it will create gridlock in this area. The bridge is falling down, and, obviously, you were not there during the period of time so these comments are not personally directed to you. There really is negligence--almost malfeasance that I think could almost be a case of litigation, if you will. That bridge has deteriorated so badly. So let me just cover a couple of the issues. The bridge is the only part of the interstate owned by the Federal Government, the only portion on the capital beltway that is six lanes, the only drawbridge in the metropolitan DC area on the interstate system, and the only segment of the capital beltway with a life expectancy of less than 10 years. And now I think they are talking about seven years now. I don't know how accurate that is. Further incremental rehabilitation of the bridge is no longer effective. Why did you only come up with a $400 million federal share for the bridge? Ms. Garvey. First of all, we did, Mr. Chairman, look at the language within the NHS Designation Act which did speak about rehabilitation or replacement of the bridge in kind. And if you want to replace it in kind, that is approximately the number that you would reach. We also put funding for the bridge in the context of a balanced budget, other needs and so forth. But I must say I certainly had similar conversations with both Secretary Martinez and Secretary Winstead, two very effective DOT leaders, and I certainly hope over the next few weeks the three of us can sit down and talk through how we might be able to finance this bridge. We are going to work with Congress, and this is our best shot at this. And we are certainly willing to work with members of Congress and with the two Secretaries--but trying to keep costs within the context of balanced budgets and many other needs. Mr. Wolf. Well, without airing dirty laundry, when I look at some of the other things in the Administration's reauthorization proposal, and I am not going to comment on what those proposals are, but some of them are very political. I understand this is ``the political process,'' and, you know, there are competent, capable members of both bodies who are advocating programs for their regions. And I don't mean any criticism with respect to that; I truly don't. I want to make that clear. That is not said in a sarcastic way. I don't have any criticism of people trying to help their area. This though really is, for better or for worse, the responsibility of the Federal Government. It is the responsibility of the President of the United States. He is the CEO of a large corporation that owns the bridge. It is the responsibility of the Secretary. You can't put a toll on that bridge. You put a toll on that bridge, we will be backed up for an unbelievable period of time. Cameras will show backups there day in and day out. It will be difficult enough for the region to reconstruct the bridge because during that period of time, there will be traffic and there will be problems and things like that. When the Department comes to ask for a new computer system for example AAS or the NAS or when the FAA comes to the Hill to say, ``We would like to have a new air traffic control system,'' they don't say, ``We just want the amount of money necessary to replace the system that we currently have.'' So to say that the administration is just going to give the area the amount of money to replace the current bridge is a no- brainer. I mean, it is an insult to the region. The Department was to submit by October 1 of '96 a proposed agreement between the Secretary and the bridge authority. It is now March, five months. Why have we had that delay? Ms. Garvey. Senator Warner also raised that issue last week, and let me say that we have a draft report complete save the negotiated agreement. And as we read the NHS Designation Act language, one of the elements was that the report would contain a negotiated agreement among the parties, the states, the District, and the Federal Highway Administration or the Department of Transportation. And because we have not been able to reach an agreement, we have not submitted the report. Senator Warner suggested last week that we submit the report that we have, and we think that is a good suggestion. We will get that to you very quickly. Mr. Wolf. Were you going to submit a report if there was not an agreement? Ms. Garvey. We will submit a report with the Administration's proposal, and we may also include, at Secretary Slater's suggestion, the states' views as well so that we will have all the information contained in the report. Mr. Wolf. When do you expect to begin solicitation for the overall project management consultant for the final design? Ms. Garvey. For the final design, the record of decision we hope will be in early June. We are in the final environmental stages now. We expect comments during the month of late April and into May with a record of decision in early June. It would allow us to go to contract or bids at about that time. Mr. Wolf. Has the Department considered build-design for the Woodrow Wilson Bridge project? Ms. Garvey. We have and we have actually talked with Secretaries Martinez and Winstead about that. And I must say that early in our discussions, there seemed to be more interest from the states in the design build. They now have raised some questions about it. We are looking with them at a number innovative contracting techniques that we could use to make sure that the project moves smoothly. So while design build is still on the table, I must say that both the States of Maryland and Virginia, at least at the engineering levels, have raised some questions. And I do want to revisit that with both Secretaries Martinez and Winstead directly. Mr. Wolf. If an earthquake were to destroy the Woodrow Wilson Bridge, presumably the $1.6 billion would be provided under the emergency provision. Would that not be accurate? Mr. Kane. Yes. One issue would be the approach work needed, and that is while you may look at the span itself, it depends on how wide the earthquake is--if the damage were just to the span itself. To do the full cost, 12 lanes wide, of the pier to pier for the bridge itself, we might be talking $550 million. The $400 million we talked about was replacement in kind of the size structure that presently exists. Close to $1 billion of the total cost is on property that Virginia and Maryland own--all the new interchanges, the right- of-way, et cetera, so that the bridge itself, which is the only part the Federal Government owns, we are talking maybe $550 million for the full-width structure. That is what would be covered. So there is still that $1 billion on state-owned land and roadways, the interchanges, and all that would be part of this overall project. Mr. Wolf. Yes. I think you see the point though. air bag safety Mr. Kane. Yes. Mr. Wolf. It is the responsibility of the Federal government. Some of you only live here four years. Some of us live here 40 and 60 and 80 years. I think it is time to come together. I would hope that there can be a meeting of the entire area delegation with all of you to put this together and come up with something that would be agreeable to all parties. depowered air bags I worry a little bit about your statement indicating that you haven't missed the production year. Canada is moving ahead. There is the sled test, the ADG test, the two options. What should the American manufacturer look for? Canada has made a decision, have they not? Mr. Martinez. It is the other way around. Canada asked the American manufacturers why they did not have depowered bags in the cars. The manufacturers said they would have them in the cars for 1998. So it wasn't a matter of making a decision. They said how come we don't have a depowered bag, and I confirmed that by calling Transport Canada and talking to my colleague the other day. The reason why people in the industry say that they don't have depowered bags here is because of our standard. NHTSA's rule basically is making a change to how we test for that standard. That gives them more flexibility than they currently have. Mr. Wolf. What is Canada doing today to test? Mr. Wolf. To test. What is Canada doing to test? Mr. Martinez. They do a belted test. I don't think they use the sled test. No one uses the sled test really. This is kind of a new idea. Mr. Wolf. Well, where are we with regard to Canada and here? Are we at a different point? Mr. Martinez. Well, not really. I mean, Canada has already asked the manufacturers to depower. They said that they are going to do that and have it in 1998. We are working to change our testing to sled testing. Mr. Wolf. One or the other or both? Mr. Martinez. One or the other. Mr. Wolf. And what one? That is the key, isn't that? Mr. Martinez. Yes. We are in rulemaking, and we have not released that rule so that is why I am a little reluctant to say that. Mr. Wolf. Well, that is what I am concerned about. This issue is not a new issue. You talked about doing this in May. Mr. Martinez. No, sir, I did not talk about doing this in May. I said they have a window that closes in May. I said that we have run at record pace to get standards out in two and three and four months, which is fairly fast. We expect to have it out imminently. I did not mean to make you believe we were going to wait until May. I said I went and followed up on the conversation with Mr. Card to find out what that window really was, and he said it went until May. Mr. Wolf. Okay. Well, just keep us informed because I---- Mr. Martinez. Oh, absolutely. Let me just make---- Mr. Wolf [continuing]. Am really worried that we are going to miss---- Mr. Martinez. No, I don't think so. I think that to the credit of the manufacturers too, they have no intention to go through their own bureaucracy. My understanding is that there is no one who doesn't want to do this as quickly as possible. Mr. Wolf. I agree. Mr. Martinez. And I expect to see this way before 1998 myself, or I would be surprised. Mr. Wolf. Do you believe that a depowered air bag will prevent deaths of unbelted occupants both in low and high-speed crashes? Mr. Martinez. We think that the depowered air bag will significantly decrease the current risks which are causing the deaths. We think that there are some tradeoffs to probably larger people and people at higher speeds. We think that would be mitigated by seat belt use. Our second big concern, of course, is that we want to make sure that children are in the backseat no matter what, because that is the safest seat. proposed rulemaking to depower airbags Mr. Wolf. NHTSA's current proposed rulemaking states that ``depowering could necessitate foregoing the opportunity to save a significant number of unbelted teenagers and adults. There could be a reduction of up to 650 unbelted drivers and between 86 and 280 unbelted passengers that would otherwise have been saved by the air bags.'' These numbers are significantly higher than the current losses we are experiencing in the U.S. Do you predict that we are going to be revisiting the air bag issue again in the near term once depowered bags become commonplace in motor vehicles? Mr. Martinez. Well, it is a concern to us about the tradeoffs. Remember, right now we have one-size-fits-all technology. When you do that, and you say, okay, instead of using this dose, as it were, we are going to move to a smaller dose so it is less hostile to a child. It may not be as therapeutic as you want it to be. Unfortunately, right now the majority of people who we are saving are unbelted, and that group is largely teenagers and young adults. So, therefore, we have raised concerns that this may be the tradeoff which we are looking at. The numbers that you give are part of a range. We said that is worst-case scenario. It may not be as bad as that, but we wanted to set the markers out. We have spoken to the industry, and they believe those numbers are not that bad. Both of us look to very little real-world experience out there. There is one bag out there called the Holden bag which is a depowered bag in Australia. I will remind you it actually meets current standard 208 so nothing prevents people from doing that now. But that bag has shown that there are some fairly good benefits and may still offer some fairly good protection. The difference over that bag, unfortunately, is that they have 95 percent seat belt use in Australia, so we don't get a big view of the unbelted. Secondly, it has a very high threshold before it goes off, which may account for a lot of the benefits. waivers to permit depowering of air bags Mr. Wolf. Currently, NHTSA must grant waivers permitting manufacturers to deactivate a vehicle owner's air bag. How many waivers have you approved to date, and of these waivers, have any consumers actually been able to get their air bags disconnected? Mr. Martinez. Two separate questions, two very good questions. We have a team that looks at bringing the letters in and turning them around as quickly as possible. We have given out probably several hundred by now, and the rest we intend to take care of through the finalizing of the deactivation rule. The second question is whether you give somebody a piece of paper that says we won't enforce the law on you, that does not give comfort necessarily to those performing the disconnect. We have seen some resistance to doing that especially with the recent furor over our concerns about liability. Our goal is to put together a process that meets a lot of the issues that have been raised, but allows them to be done in those cases in which we think there is a fundamental reason for it. Mr. Wolf. What is the longest delay that you know of? Of somebody who got a waiver and yet hasn't had the air bag disconnected? Mr. Martinez. I don't know if I have--I can ask about that and see if anybody knows a particular case. Mr. Recht. I don't know of a particular case, but I know we have received a number of calls back on our hotline. People receive these letters, and they cannot find a mechanic or a dealer who will do it. I think there are a number of people who are sitting there today with letters in their hands who have simply been unable to find somebody to do the disconnect. Mr. Martinez. The trick for us is to find a balance that works, so we have really tried to address as much information as possible. Mr. Recht has met with the dealers of the National Automobile Dealers Association. We have had open discussions with manufacturers. And we are meeting this week to continue to finalize a solution that works for everyone. Mr. Wolf. I note that you are considering allowing consumers the freedom of choice to have their air bags deactivated. However, dealers, manufacturers, and repair businesses are opposed, as you know, to deactivation for all owners because of litigation risks. These businesses have recommended that NHTSA should continue approval on a case-by- case basis. Do you have the staff to do case-by-case basis? Mr. Martinez. That is a big question. I will tell you that we all share the goal of not having mass deactivation. The way we proposed it was to say that we did not want panic decisionmaking but informed decisionmaking in those particular instances in which there was a risk. We felt allowing the person the opportunity to disconnect the air bag or to put a cutoff switch in would be of benefit to them. We have received a tremendous amount, as you know, of feedback on this. When you open a docket, you can get nothing or you can get a lot. We have gotten a lot of comments from just individuals--over 500 comments to that docket right now. Mr. Wolf. Who should pay for the cutoff switch? Mr. Martinez. The cost would be borne by the consumer. Mr. Wolf. Even though they paid for the safety device What will that cost? Mr. Martinez. For just disconnect, we think that is a fairly low cost--under $30. We are trying to find information on that. Remember, when we first started looking at this whole issue, the industry told us it was impossible to do. They wouldn't put the resources into it so we really didn't have a lot of information to judge that. There now has been some reconsideration on that, and I think we are beginning to get more information about possible cutoffs. Mr. Wolf. So what do you think it would cost for a cutoff switch? Mr. Recht. We have heard estimates of $50 to $100 depending on how complex they are. We have heard of ideas to have switches that would allow cutoffs on either side and more complex than the current switches and the like. Mr. Wolf. Many automobile and child safety seat manufacturers have expressed a growing concern over the number of air bag fatalities in the United States, particularly those related to children. To solve this problem, there has been a call for advanced or ``smart'' air bags to be installed in vehicles beginning in model year 1999. NHTSA held an advanced air bag meeting on February 11 and 12 where definitions and timetables were discussed. The U.S. may be the first country to establish a rule mandating advanced air bags in vehicles. Will the American rule set the international standard, or will manufacturers have to install different systems depending on where the vehicle is sold? Mr. Martinez. Well, this is one of these opportunities I think that we should take advantage of, and right now 208 is considered one of the best standards and one of the most used standards in the world. What we are really saying is to enhance frontal crash protection standards in this country. As we said before, we are trying to bring everyone to the table. I think that was one of the central messages that you had when you asked us to begin to hold our roundtable lunch. We have used that as an opportunity to bring people together. Conversations we have had recently have been about solving the issues together with industry and other research groups. So my response to you then, given that background, is that we have an opportunity here to enhance 208 which means we will have a better standard coming down the pike. SMART AIR BAG DEFINITION Mr. Wolf. When will we have a definition of a smart air bag? Mr. Martinez. Oh, fairly soon. We used the roundtable to flush out several definitions and bring two or three definitions to the table, number 1. Number 2 is to get agreement from the major players that we had the dummies available to begin to do a rough outline of what that performance standard should look like. In the February 11 and 12 meetings, there was a separate roundtable to basically hammer that out. We are meeting with the industry and others to put together a joint proposal that brings us not only to the answers but into rulemaking within this year. Mr. Wolf. And the technology will be available in-- Mr. Martinez. You know, that is a very interesting question. When we did our request for comments and asked information from the manufacturers, there was the estimate of 1999 for smart air bags coming into the fleet. Also, in order to validate those comments, we are beginning to work with NASA to help us validate technology to see if it is ready for prime time. Mr. Wolf. I was going to ask do you have the technology to know? Mr. Martinez. Well, I called Dan Golden and asked him if we could work together on that. They have some experience with that also. In some ways this is rocket science. So we are doing a joint program with them to go and evaluate the existing technologies. Mr. Wolf. And is he cooperating with you? Mr. Martinez. Sure. We signed a letter of agreement with NASA. We also signed a letter of agreement to work with Canada, because what we want to do is work in parallel with them rather than independently. For instance, we are working on the performance measures with dummies on children and women. I think in many ways what we have been able to do is leverage our resources and create the network. The idea is to bring people to the table with a common goal, and I am happy to say that just in the last two weeks from conversations with industry, both our domestic and international partners, we are getting close to some agreed- upon timetables and goals to work in parallel. And the basic issue here is to speed everything up as fast as we can. AIRBAG FUNDING Mr. Wolf. A recent USA Today article noted that ``air bags account for about a third of the additional $33 million NHTSA is seeking over its fiscal year 1997 budget of $300 million. The agency is asking Congressfor an additional $11 million for air bag education programs and research including extra money for crash investigations.'' In looking at the budget, you can only account for an $8 to $8.4 million increase. What is the accurate amount? Mr. Martinez. $6 million is for research hardware. This includes special crash investigations. It also includes safety systems and biomechanics research. Biomechanics is always fairly expensive because it involves testing dummies. The third component is, our surveillance system that we are working with, through the hospitals to get surveillance of crashes. $2 million is for traffic safety programs which is really education and outreach aspects with a big focus on hard-to- reach communities; for example, Hispanic communities, rural communities and others. We think that is our role, but we are using that to leverage our funding with the Air Bag Safety Campaign that we initiated to try to get out and get the information. About $2 million is for information-education and about another $6 million is for research hardware. AIRBAG EFFECTIVENESS Mr. Wolf. NHTSA's August 1996 report on the effectiveness of air bags indicates a ratio on the passenger side of five to six adults saved for every child killed. Is this an acceptable level of effectiveness? [The information follows:] NHTSA's report estimated that during 1986-95 passenger air bags had saved the lives of 88 passengers age 13 or older. The agency knew of 14 child passengers who had apparently received fatal injuries from interactions with air bags in low severity crashes during that time period. That ratio has stayed about the same in more recent data. NHTSA now estimates that, cumulative through March 1, 1997, passenger air bags have saved the lives of 196 passengers age 13 or older, whereas the agency has been informed of 38 children who have apparently received fatal injuries from interactions with air bags. In the agency's view, saving five adults for each child lost is not an acceptable level of risk. NHTSA is therefore working diligently to develop and institute measures to minimize the risk to children as well as others at risk. As part of a comprehensive air bag safety strategy, NHTSA has issued regulations requiring improved, attention-getting labels, and has also worked with organizations and coalitions to get information out to parents and the general public on the dangers to children of air bag deployment. On March 14, 1997, NHTSA issued a final rule permitting automobile manufacturers to depower air bags. Another rulemaking action is currently underway that would permit vehicle owners to arrange for deactivation of the air bags in their vehicles. And as a longer term regulatory measure, the agency is working with the automobile industry and air bag suppliers to facilitate research, testing and introduction of improved air bag systems into passenger vehicles at the earliest feasible date. AIRBAG DEACTIVATION Mr. Wolf. When does NHTSA plan on issuing a final rule on whether or not deactivation of air bags on a broader scale may occur? [The information follows:] The agency considers this to be of the highest priority. The comment period on the NPRM for deactivation closed on February 5, 1997. The agency received over 500 comments to this NPRM. Many complex issues are involved with final decisions associated with this proposed action. Once resolution of these issues has been reached, the agency will issue a final rule. motor vehicle safety standards Mr. Wolf. Does NHTSA plan on having functionally equivalent standards between the United States and the European Union? If the standards are functionally equivalent, would a rulemaking still be necessary to state equivalency and certify the standards in both localities? [The information follows:] On January 16, 1997, the agency held a workshop to discuss a proposed step-by-step process for determining functional equivalency of U.S. and other international regulatory requirements. The workshop drew the participation of some sixty persons, representing; consumer and insurance interests, manufacturers--both foreign and domestic, automotive suppliers, several foreign governments and other agencies of the Federal Government. The proposed process leads the assessment of functional equivalence through the review of available information including; safety benefits analyses, compliance test data, engineering analyses, research results. The result is a determination or non-determination of functional equivalence. In the case of determination of functional equivalence, rulemaking is initiated to permit certification to either of the regulations considered in the determination; and, in the event that the foreign regulation is determined to be functionally equivalent because it yields superior safety benefits or its performance level is judged more stringent; proposing to upgrade the performance level of the United States regulation to that of the foreign regulation. Rulemaking would be necessary to effectuate a determination of functional equivalence because, absent a change to the Federal Motor Vehicle Safety Standard (FMVSS) involved, vehicle manufacturers would continue to be required to comply with the previously existing requirements of the FMVSS. The reason for this is that the statutory authority for the FMVSSs prohibits the sale or importation of vehicles that do not comply with the FMVSS. (See 49 U.S.C. 30112(a).) Likewise, manufacturers would continue to be required by statute to certify their vehicles as complying with those previously existing requirements since section 30112(a) also prohibits the sale or importation of vehicles that are not certified as complying with the FMVSS. In the case on non-determination of functional equivalence because the foreign regulation is less stringent than the United States regulation, the determination of functional equivalence of the United States regulation to the foreign regulation and the resulting regulatory action are the purview of the foreign regulatory authority. Of course, the assessment conducted by the agency would be made available to the foreign regulatory authority for its consideration. Mr. Wolf. In its ``smart bag'' standard, does NHTSA plan to amend the standard as technology improves? [The information follows:] Depending on the form and timing of the improved air bag rulemaking, the agency will certainly consider future technology improvements. One of our initial goals is, however, to promulgate any regulation in a form that would not hinder (or would, in fact, encourage) the use of more sophisticated air bag technologies. Mr. Wolf. The Department is planning to require the installation of ``smart air bags'' into vehicles within the next five years. When do you expect to issue a notice of proposed rulemaking defining what constitutes a ``smart air bag''? [The information follows:] The agency completed a public workshop on improved air bag definitions and technology on February. 11-12, 1997. Meetings are continuing with vehicle manufacturers and equipment suppliers to discuss and evaluate the level of existing technologies and the development of future technologies. The agency has entered into a joint-funding contract to have the National Aeronautical and Space Administration (NASA) conduct an independent assessment of these issues. Based on the outcome of these actions and evaluations of the safety needs, the agency will determine the appropriate timing for rulemaking. Mr. Wolf. Will this rule be moved on an expedited basis so that vehicles with ``smart air bags'' technology will be available on the American market by model year 1999? [The information follows:] Based on the outcome of the agency's studies and evaluations of the safety needs, the agency will determine the appropriate timing for this rulemaking. Certainly, the agency plans to work as expediently as possible to assure that the safety possible air bag systems are provided to the American public as quickly as possible. Air Bag Safety Program Mr. Wolf. NHTSA is requesting $2 million for an air bag safety program. This program is designed to enhance public education about the dangers of air bags and assist states in conducting high visibility, statewide enforcement and education campaigns. Private sources have already provided over $13 million to fund the Air Bag Safety Campaign, which has a three-pronged approach to increase public education, strengthen seat belt and safety seat enforcement activities, and strengthen states' seat belt and safety seat laws. What does NHTSA plan to do differently than the Air Bag Safety Campaign? Why should Congress fund this program when the private sector has contributed significant resources for these activities? [The information follows:] The additional $2 million would be used to complement the activities of the Air Bag Safety Campaign (ABSC) and would not be redundant to those efforts. The ABSC supports only six State safety belt enforcement programs. Approximately $1 million of this $2 million request would allow the 21 States that are currently participating in the Campaign Safe & Sober Demonstration Grants to continue program operations. This funding enables these States to conduct high visibility, statewide enforcement and education campaigns that support the President's goal of increasing seat belt use. Approximately $300 thousand would be used to measure public awareness of efforts to enforce state safety belt use laws in each of the States over time. This system will allow NHTSA to assess the degree to which different enforcement activities result in increased public awareness of enforcement of the safety belt and child passenger safety laws. The balance of approximately $700 thousand would be used for educational activities that, again, complement and are not redundant to the ABSC efforts. NHTSA has found a partner that will distribute the Protecting Your Newborn video to professional educators in the medical and public health fields. NHTSA funding would be used to place this video in pubic libraries, video rental stores, and other places where it would be accessible to the general public. Another effort is an educational campaign to provide NHTSA air bag warning labels to vehicle owners that may not have received labels from vehicle manufacturers. Two other needs that are not being addressed by the ABSC are a comprehensive Spanish language child safety seat brochure and a billboard with a ``Kids in Back'' message. Mr. Wolf. Mr. Tiahrt. Mr. Tiahrt. Thank you, Mr. Chairman. One of the things that I think you have advocated is lowering the alcohol content for drivers from what?--.0 to .08? Is that correct--the alcohol limit for drivers? Mr. Martinez. Yes. That is part of the safety programs--the highway safety grant programs. We have supported .08 because of its effectiveness. Underage Drinking Mr. Tiahrt. What about underage drinking? Have you taken a position on that? Mr. Martinez. Yes, we do. We think that is a major problem. Interestingly enough, we had a problem in this country just last year where, you have age 21 as the drinking age, and yet if you are stopped for drinking and driving and you are under age 21, you were considered drinking and driving as opposed to the fact that you weren't supposed to be drinking at all under age 21. It was interesting. You couldn't drink under 21, but if you are driving, you were kind of thrown into this other category. So with the President's leadership, we began to propagate the zero tolerance that was passed by Congress last year, and I am happy to say that we have seen a great response by the states on that. The other thing is that when it comes to underage drinking, one of the problems we have been able to identify is that the places where the alcohol is bought and consumed is different than the normal mechanisms. So if law enforcement, for example, checks the bars and restaurants, then they may not pick up the underage drinking driver. However, if they go to, the riverfront or lakefront or playgrounds in the evening where people buy their alcohol from a convenience store and then consume it there, then they are more likely to pick up the underage driver. So we have begun to work with adjudicators and law enforcement and others to focus on youth as a separate issue including separate laws, separate enforcement mechanisms, and separate adjudication. And then, lastly, in graduated licensing programs, we tried to focus on the fact that when you get your license, you should do it in stages so that youth cannot only just get the knowledge and skills to drive a 3,000 pound weapon, but also develop the attitude and behaviors. And part of that graduated licensing program is that not only can they not be drinking, but there can be no alcohol in the cars. So, it is a way to help develop those healthy behaviors. There have been several programs where we are doing a focus on that. drug testing Mr. Tiahrt. Are you looking at any innovative ways to detect drug abuse as well as not just alcohol but other areas? You know, some people would argue that, if you squash down alcohol use, then you will encourage drug abuse. And so I think we ought to address the whole problem, and certainly we haven't done enough in this country to stop the abuse of drugs. So is there any new technology besides blood testing or--I am not sure exactly the best means now detecting it. Mr. Martinez. Well, you raise a very good point. Just to kind of tie these two in, we have a program called Partners in Progress. Drunk driving has been going down for the last decade. It went up last year for the first time. We don't see the trends dropping like they used to. They are beginning to flatten out so we initiated a program called Partners in Progress, which involves law enforcement, the health community, business and others. We brought them in and said, ``How can we move forward?'' I am pleased to announce we have just recently released over $1.6 million in grants demonstrating innovative programs to attack the problem in new ways. The other thing that we have done is to try to look at what youths gets from us as a message and do we need to do other things, which raises exactly what you are saying. There is a truth to the fact that if I know you can test easily for alcohol, then I will smoke marijuana. We are concerned about that. We met with 6,000 youth in some of our outreach; found that 75 percent of them saw drugs as a growing problem. Interestingly enough, 50 percent thought that if you had strong laws and good detection, it would make a big difference. This is from the youth themselves. The President asked us to put together a report on drugged driving and youth especially. The one who led that report for us was Mr. Philip Recht, my Deputy Administrator. I would like to turn it over to him. Mr. Recht. Yes. I would just add that in response to the President's initiative we worked with the Office of National Drug Control Policy (ONDCP), Departments of Justice and Education, and HHS and came up with a program, and this year we are going to start a pilot demonstration to allow drug testing in two to four states--prelicensure drug testing for young people. And as Dr. Martinez alluded to, we actually met with about 6,000 teenagers to get their reaction to it before we, in fact, proposed it, and they thought this would be effective in reducing both teen drug use and drugged driving. And, interestingly, 75 percent of them said exactly as you observed, that they have been out on the roads with friends who have been doing drugs and driving simultaneously. And, of course, that creates a hazard. We also in the future, are going to create an incentive program to encourage states to improve their drug driving laws which are not nearly as strong as the alcohol laws. We also are going to put in the next few years additional monies into our training for prosecutors and Judges and police officers which is a major problem. You may be familiar with our DEC program which has been very successful. Most police officers can detect alcohol by simply smelling your breath, but they are not so sure how to detect drugs which requires a lot more sophisticated techniques. In any event, we have a comprehensive approach moving forward precisely to the issue you raise. Mr. Tiahrt. So we are going to come up with some new technology someday and---- Mr. Martinez. We are looking at new technologies. For example--I don't want to get too technical--but there are things like saliva testing and urine strips, that sort of thing. And also passive detectors are all being looked at as a technological approach to solve it. We have certainly done that with alcohol, and in many of these alcohol sensors they have now, they want you to blow through it--passive sensors where you can at least know if something is coming or someone has been using alcohol. So we are looking at technology and trying to move that into the law enforcement community. Mr. Tiahrt. I have to tell you that part of me says that we shouldn't have to do any of this, that the concept of liberty has been so misunderstood. It has been substituted for freedom. Instead of freedom to do the right thing, which I think is what liberty means, it is freedom to do anything. Somehow we are not conveying that to our kids, and I think that is part of the sociological crisis that we are going through in this country. If people don't do the right thing, then you have to have more and more laws and regulations to get them to do things that aren't harmful to themselves, which is what they should do anyway. So I think this new technology is something that is more easy, especially for police who have probably the toughest job in America today. Saliva would be a lot easier to extract than something else--blood or urine I think. So I hope that we do develop that and be part of the plan. Because of this new technology, do you see any increased liability upon the states and perhaps the Federal Government because of this? Mr. Recht. Well, currently, we do a lot of drug testing at the Department of Transportation--not NHTSA but with respect to FAA and motor carriers, and we continue to use the urine tests because of their effectiveness and accuracy and the like. In putting together this program that I was describing a few moments ago, we spent a lot of time talking about these new emerging technologies--saliva, hair testing, and the like. I think on the part of states and others that are engaged in this, they are concerned about the reliability issues, and they have shied away. My sense though is in the private sector, hair testing, in particular, is coming on strong. People seem to be a little less concerned. But as the reliability issues get resolved, certainly also the cost issues--become more favorable. It seems to me the governments are going to move in the direction of these new less invasive technologies. aggressive driving Mr. Tiahrt. In kind of following this same misuse of liberty, aggressive driving has been a problem here locally. Many of you recall last year the accident on George Washington Parkway. I have had personal instances where people have been very aggressive. I drive an '84 Chevy van with curtains in it, you know, and sometimes I just have to signal and slowly move over. And I thought I was making a lot of friends because they all honked at me. It took me a while to realize that this is not Kansas anymore. But what are you doing about aggressive driving? How can we address that issue? And, again, it goes back to the same philosophy. We shouldn't have to do anything. But if people are going to continue and it becomes a hazard on even the George Washington Parkway, are there any studies that you are doing or profiles or---- Mr. Martinez. We certainly are. I mean, one of the things about aggressive driving is that it is a real concern to people throughout America. A recent study around here showed that people are more concerned about aggressive driving than they are about drunk driving now just because of the feeling of threat to life. We are doing studies actually to better understand the ideology of aggressive driving. There are some very interesting characteristics. I mean, people who would not get in front of you in line in the bank will make sure they ran their car in front of you. I think we have tried very hard to begin to increase awareness on aggressive driving through outreach and education programs and working with the media, and they have actually done a very good job of beginning to raise this issue. We are also working closely with law enforcement to look at what works. As I had mentioned a little bit earlier to some of the other Congressmen, California has a program, Maryland has a program, Arizona has a program. We are working with them to begin to understand what works and what the effectiveness is and how that can be transferred to other states as they struggle to cope with this. We are also looking at ways for law enforcement to extend their reach through programs in conjunction with the Federal Highway Administration such as red light running campaigns or red light technology that is able to basically begin to put some sort of compliance issue out there so people realize that, if they run the red light, there is some consequence to pay for that. One of the concerns we have is that we have seen tremendous growth in miles traveled and yet no concomitant increase in law enforcement. So, therefore, you often don't see law enforcement. What you get is kind of a cowboy mentality on the highways of everyone on their own, able to do what they want to do with no consequences. And eventually--if you interview people, they will tell you, ``Everybody else is doing it so, therefore, I can get away with it.'' So we have got a series of programs that we are doing, and it is an area that has focused us on the judicial system because we are very concerned that the penalties are way too low and not used properly, and that we have not given the Judges the tools they need in order to support it. Therefore, law enforcement finds it difficult to enforce some of the laws. We have also tried to point out, by the way, there is a very strong link between enforcing routine traffic laws and picking up high-risk individuals. And in doing so, we hope to stem the tide of when law enforcement on the highways is taken off the highways because that is not considered to be an important thing for them to do. They are told to go get criminals, and yet, highway crashes are the leading cause of death out on our highways right now. We are trying to ensure you can do both at the same time. law enforcement services Mr. Tiahrt. One of the concerns that people have--I know in Wichita we had a quarter-cent sales tax increase for law enforcement. And a lot of the concern was that these police would not go to catching criminals--what most people think is criminals--the drug dealers, the people who are dangerous in our society--but they were concerned that they would end upjust being hassled by traffic cops. And although it is very necessary, it seems like there has been--don't hassle me. We took the quotas off, for example, on highway patrol in Kansas, and they started running just courtesy vans. And they would come--you know, when somebody had a flat tire, they would stop and ask if you would need help. And there was a much more positive response to the police, and people actually started being kinder on the highways and driving more sanely as far as speed limits. It was kind of a positive reinforcement. I wonder if there is any incentive program? I was just reading the questions that my wife was getting to renew her driver's license in Kansas, and all of them were technical questions. None of them had to do anything with common courtesy and sitting in Traffic Court. I went down to Traffic Court in Fairfax one time just to see what was going on and listened for about a half an hour. And the Judge was reprimanding a gentleman who had driven down the shoulder to cut in front of a half dozen cars, and the policeman gave him a ticket for it. And the Judge said, ``What made you think you are better than the six people you passed to get ahead of?'' and I never thought about that before. Why don't we have some kind of common sense questions just even in our driver's tests? And I am wondering if you have any incentive to get states to do something like that, to just have kind of civility questions or good citizens questions? You know, we used to learn that in school--good citizenship. I don't know where it is being taught now; apparently nowhere. It is not---- Mr. Martinez. Well, you raise some very good points. You really do. One of the focuses of the graduated licensing program is that, it is too easy to get a license in this country. You get it and then we don't see you until you are in big trouble. Then we see you again because you have been in some big crash or they pulled you over for something else. But most of the time there are no consequences, there is no adjustment of behavior and attitudes. We have really begun to work closely with AAA, for example, and with the motor vehicle administrators throughout the country to really focus on some of these issues, including the rules of the road--just basic civility, courtesy, those sort of issues. We just signed a memorandum of understanding with AAMVA to work more closely. I think it is important too that we do have some support for law enforcement. People understand that law enforcement-- when they say to protect and serve, that really does mean to protect by doing good law enforcement. We have found that by bringing law enforcement more into contact with some of our partners, we have been able to support them better. For example, we have a program with the emergency physicians working with the law enforcement called the Cops and Doctors Program. From talking to the law enforcement, they have found that it is the doctors in the hospitals who benefit from what they do and also can speak for the community and help set that message. We have also got the law enforcement more involved in child safety seat distributions and child safety stops. In Virginia, the law enforcement is very involved in the compatibility issue such as teaching children and parents how to put the child seats in properly. All these things help set the message that law enforcement is part of the social message of supporting a healthy community. By the way, I was going to point out we have a safe community working in Cedric County where we bring law enforcement into the community to talk about these injuries and these crashes as, you know, a quality of life issue. The interesting point you made about law enforcement, is we have to really look at its value. You know, when you stop someone else who is taking risks on the road, that is good law enforcement. When you stop me, it is harassment because I pretty much know what I am doing. Otherwise, I wouldn't be doing it. I get this all the time. One person wrote, ``The problem is, you are stopping me as opposed to those people who can't hold their liquor. See, I can hold my liquor.'' So we have to look at ourselves to determine how much we support or don't support law enforcement. We did a study to look at the effects of law enforcement. The governor of North Carolina, well known for his Click-It-Or- Ticket Campaign, found that when you increase officers on the road, you get a lot of benefits. And then those who continue to break the law, despite the law enforcement presence, often have alcohol on board or have outstanding warrants for arrest or other things. I remind people that the alleged bomber, Mr. McVey, was picked up for a routine traffic stop, and so there is some value there. We looked at one study that found that 37 percent of a police department's felony arrests came from routine traffic stops, even though that was one of the smallest parts of the department. So, again, all these things are we are trying to build these links and help position it and I think leverage resources that are out there--scarce resources, unfortunately. Mr. Tiahrt. Well, I appreciate what you are doing in Sedgwick County. Thank you very much, and thank you, Mr. Chairman. air bags and child safety seats Mr. Wolf. Mr. Foglietta. Mr. Foglietta. Thank you, Mr. Chairman, and apologize for being late, but there was another Appropriations subcommittee hearing scheduled simultaneously with this one. Dr. Martinez, since early last year, as you well know, I have been working with you and our Chairman to press for greater attention of the critical issue of children and air bags. This issue is certainly in the spotlight right now, but I see you have--as I sat here, I saw this information which is being presented in this wonderful booklet, and the video I assume is on the same subject or some sort of related subject? Mr. Martinez. Yes. Mr. Foglietta. But, however, on a very practical matter, if I am a concerned parent who is trying to properly install a car seat, how many people at NHTSA do you have on staff dedicated to answering consumer questions? Mr. Martinez. Well, that is a very good question because what we found was we didn't have enough. We have the hotline which answers questions and also lets people know about recalls, which we are very concerned about. People don't always know. But we have also begun to train trainers around the country. We have a group of individuals who do the training. We have actually just finished working with the Safe Kids program so that there are trained trainers throughout the country. We now have training programs in all 50 states or experts in all 50 states. What we do is set up a network so when calls come in, we can refer them back through an expanded network. Clearly, we did not think that the appropriate thing was to have everyone just call us, but rather move the information into the states. So I am glad to say that we are working with the Emergency Nurses Association who are training trainers, and they are also putting those trainers in with dealerships around the country through the Adopt-a-Dealer Program. In addition to that, we are developing a CD-ROM that makes it very simple for people to look up whether a seat fits in a car or doesn't fit in a car. That has been a lot of work, but it is actually a very useful tool for us to make available for dealers. Mr. Recht just went to the dealers' meeting in Atlanta a few months ago to help us move that into that arena. Lastly, we have our Internet site that we have built to be user friendly. The child safety seats is a big area hit. We are getting over 6,000 hits a day. We also have a fax-back system we put into the hotline so people can get information from there. Child Safety Seat Education Mr. Foglietta. How much of your budget or what percentage of your budget is dedicated to this kind of educational program? Mr. Martinez. We have a program called Partners for Life which is dedicated to that. I can see if I can find out what the exact number is because a lot of this is woven into it. We have also put it through our $11 million campaign, Safe and Sober, again, where we are using law enforcement to help us get the information out. And we have, of our air bag safety information, a large component of it, as child safety seat information. So I would say it is several million dollars. Mr. Recht. And the hotline as well. Mr. Martinez. And the hotline. It would be hard for me to give you an exact number. I can, but it is woven into most everything we do. Child-Size Test Dummies Mr. Foglietta. What plans do you have for extensive sled and crash testing involving dummies approximately the size of a child? Mr. Martinez. We started last year in trying to improve the children's dummies. It is very interesting. We have a situation where no one really wants to see a child harmed, but there has not been a lot of studies on children. It is hard to do studies on children. So you have to really come up with the dummies and evaluate the dummies. That means really investigating children who are injured. It means having a very close link to the health care facilities, like Children's Hospital of Philadelphia, for example. We are working with them. They have a very strong relationship between the engineers and the doctors. We have seven other centers around the country. And so in our biomechanics program for next year, the $3.15 million--a lot of that is to improve children's dummies and small-statured female dummies, and we are also leveraging that through working with Canada on similar projects. Again, we think that the fastest way to speed things up is to work in tandem with others. The last thing I will tell you is that we have brokered an agreement internationally. Research priorities will be on biomechanics so that other countries that have the same problems we have of trying to make budget decisions, we can work internationally. We started last year when we came to Mr. Wolf and asked for monies for the National Transportation Biomechanics to specifically start on small children last year. This year we have, in response to the air bags, even more money put into that. Mr. Foglietta. I would assume that you are collecting this kind of data for the purpose of devising or designing new safety standards? Mr. Martinez. Yes, sir, certainly to enhance both our understanding of the issues and, secondly, to enhance our standards. Let me make this point, because I remember Mr. Wolf asked me, I think it was December--December 19, how much was known about children being injured. And I had made the comment that in our request for comments, we didn't get a lot of information. What we did was we had to actually identify what was causing these children to be injured. Was it just the power of the air bag or was it more, and we actually identified a fairly different mechanism which is the membrane effect. And trying figure that out and translate how you solve that really means we have to have a good dummy that represents the peculiar differences of a child. So that is a priority issue for us. Mr. Foglietta. I am sure you are collecting the data that indicate how many miles that children travel as occupants in automobiles and at what age they travel and so forth so that is all part of your database? Mr. Martinez. Yes, sir. Air Bag Safety Standards Mr. Foglietta. Really what I am trying to get at in this questioning is how much data we do collect and how much do we have on hand and how do you work in concert with the automobile industry in moving toward setting new standards to increase air bag safety? And, you know, do you or do you not possess the information that is necessary to make sensible and effective standards possible? And is there a shortage of relevant information, and, if there is, does this information shortage continue to expose children to the risk of injury or death? Mr. Martinez. If you had asked me last year, I would have said that we were staring into a relative void in some areas. I mentioned earlier to Mr. Wolf that I have not met anyone who is not terribly dedicated to solving this problem as quickly as possible. And what that has done is ignited a lot more research than that has been done in a very long time on children's issues. We already have one relationship with a children's hospital. We have the other ones that we are trying to nurture further. We have strengthened our relationships with the American College of Pediatrics. We have focused more onchildren's injuries, and we are really pulling the train when it comes to children's injuries given the relative amount of information known internationally. Now, having said that, I think we are in fairly good shape because what we have done is begun to identify not only our strengths but our weaknesses and other people's strengths. We are weaving a web, as it were, or a network that will allow us to move forward by having everyone contribute what they can to identify fully the issues. I think that that has already led into tremendous insights. Most everything being done on the standards is being done from what we did through our emergency research program and other people's work. I think we are going to be coming out with performance standards for advanced air bag technology in a relatively short time frame. Mr. Foglietta. Thank you very much, doctor. And with your permission, Mr. Chairman, I have a couple questions for Ms. Garvey. Mr. Wolf. Sure. Go right ahead. Mr. Foglietta. First of all, I would like to welcome you here, Ms. Garvey---- Ms. Garvey. Thank you. Mr. Foglietta [continuing]. As the Federal Highway Administrator or Acting Federal Highway Administrator? Ms. Garvey. Yes. That is correct. Mr. Foglietta. We will look forward to eliminating that one word from your title. Ms. Garvey. I hope it is acting and not administrator. Mr. Foglietta. Very good, very good. I certainly did mean acting. Ms. Garvey. Thank you. Mr. Foglietta. First of all, I want to applaud Secretary Slater's efforts to establish urban FHWA intermodal offices in the cities, as well as throughout the rest of the country. The cities in metropolitan areas have different needs and issues than their counterparts in the nonurban areas. The standards for design sometimes don't take into account the special needs and challenge of densely populated areas. In cities like Philadelphia, for instance, sidewalk traffic probably exceeds that of many nonurban roads throughout the country. That is why it is so critical to have the Federal Highway officials who are sensitive to the special challenges that urban transportation faces. These multimodal offices have and will go a long way toward enhancing the mobility of urban areas nationwide. Can you speak to us for a few minutes about the Department's views on these urban offices and services they provide? Ms. Garvey. Yes, I can, Congressman. We have four proposals, as you know, for potential sites. One is Los Angeles, and that office has actually opened, and we have both FTA and FHWA employees there serving the City of Los Angeles. Chicago, Philadelphia, and New York are the other three areas, and we hope to have those offices in place and operational before the end of the fiscal year--we are looking for locations at this point. But I think you are right. We view them as a satellite, if you will, of both the existing regional FTA and the Division FHWA offices--but a way to get closer to the customer and deal with issues that are unique to urban areas--we are looking forward to that. Mr. Foglietta. I think we have all heard the recent reports qualifying the dangers of car phones and driver safety. If you combine the use of car phones, people who smoke while they are driving, people who are looking at maps, infrastructure defects, with the removal of the national speed limit and other factors that impair driver safety like driver fatigue and aggressive driving that we talked about earlier, we have a real recipe for disaster on our roads. I think there is a new role for national leadership on driver safety. Does the Department have any plans to undertake new driver initiatives--safety initiatives? Ms. Garvey. We have a number of initiatives underway and are working very closely with Dr. Martinez and his staff, both with NHTSA and FHWA, but certainly the Share the Road Campaign that some of our safety advocates have worked very hard on is key. We have also been working the No Zone Program which our Office of Motor Carriers has been very aggressively involved in. The ITS which we had mentioned a little bit earlier-- working with NHTSA we have undertaken a study which holds some very promising results about how we can use intelligent transportation systems to help us reduce the number of crashes. And the numbers and the statistics that we have seen indicate they can reduce crashes by about 17 percent using ITS. We talk a lot about ITS with traffic flow improvements, and that is important. But I think some of the safety improvements that can occur because of ITS are significant as well. Mr. Martinez. And on top of that, we also have a focus on youth and how they come into this system and also their decisionmaking process and what they need to know. We have been working with states to look at graduated licensing programs which give not only special training to youth, but also watch them as they come into the system so that we can focus on those who are high risk early on and hold them to some different standards such as everyone has to be buckled in their car, no alcohol, certain limited times in which they can drive. Those have been shown to be very effective, quite frankly, in reducing crashes and fatal crashes. On top of that, we have three research programs ongoing regarding driver's education for youth and expect to turn those into programs within the next year or two. I-95 Corridor Mr. Foglietta. Last year, Secretary Slater came to Philadelphia to visit the site of a disastrous tire fire that we had on I-95 within the City of Philadelphia. That disaster taught us a valuable lesson on just how important the interstate system is to Philadelphia. Trucks carrying goods, automobiles carrying commuters, providers of services, travelers, everything came to a screeching halt because of that one breakdown. The fire and the damage it caused just created havoc with the City of Philadelphia. But the Department came swiftly to our aid, and I want to thank Secretary Slater and former Secretary Pena for their responsiveness. But the fire served to highlight another problem we are facing. Last year, our governor killed plans to make improvements on 51 miles of I-95 that run through Pennsylvania between Delaware and New Jersey. The project would have resurfaced the badly deteriorated highway;undertaken critical projects to enhance safety and allow traffic to move more efficiently. The difference in quality and safety between Pennsylvania's I-95 corridor and that of Maryland, Delaware, and New Jersey is compelling. It is critical to the efficient flow of goods, services, and commerce that the I-95 corridor be maintained at the highest standard and is able to safely accommodate the traffic that uses that interstate every day. For example, in Philadelphia on I-95 there have been numerous accidents on the interstate or bridges and viaducts where no shoulders exist. I know of an example where several disabled vehicles have been hit by tractor trailers and people killed and seriously injured because there were no shoulders for safe refuge for automobiles that were temporarily disabled. Further, interchanges are in desperate need of modification. Again, we have had killings--people being killed getting on and off of the ramps. And arterial movement are critical to coping with the heavy flow of traffic feeding from and to the interstates. Moreover, the state's plans to perform a resurfacing with a five year life expectancy is shortsighted, and I think is wasteful of tax dollars--had only had a five year life expectancy of the improvements. Now, for anyone who has driven on I-95, the difference between the segment that runs through Pennsylvania and those of Delaware and Maryland is incredible. I am concerned that the impact of Pennsylvania's scale-back plan may compromise the safety of the interstate's users. That is why last year I was able to have language included in the report accompanying FY 1997 legislation which asks FHWA to work with states along the I-95 corridor to ensure that they continue their investment in the interstate, and it asks the FHWA to assess the impact on mobility and commerce if that investment is not maintained. Can you tell me what the status of your efforts--your Department's effort is to encourage states to make the commitment to making 95 improved and to make it a seamless artery that it should be and needs to be to ensure safety and mobility in the area? Ms. Garvey. I remember both the fire incident and also the discussion about the intermodal project or the mobility project, and I remember the disappointment when the project was scaled back. The good news that I can offer is that in terms of the President's reauthorization proposal, you will see a significant increase in the interstate maintenance category for the issues that such use the one you are talking about, the need to maintain the interstate system. There is also significant increase in the NHS program which, again, could be be used in this area. We are working with Pennsylvania, looking at the contracts that they have ahead of them. We know what their schedule is. We are looking at their certification annually and the impacts to I-95. They are staying certainly within the regulations at this point, but we are watching that very carefully and working with them very closely. And I would say, again, the best news is that the interstate maintenance program will increase with ISTEA reauthorization, and I think that is imperative and important. Mr. Foglietta. I thank you, Ms. Garvey. I thank you, Dr. Martinez. Thank you, Mr. Chairman. Innovative financing Mr. Wolf. Mr. Sabo. Mr. Sabo. Just an observation, and then I have a question. I am interested in the discussion of the relationship of law enforcement to safety in automobiles. We have this illusion that motor vehicles pay for all their costs through the gas tax. I would observe that local governments spend substantial amounts of public property tax dollars to pay for public safety costs that are associated with automobile and truck travel. Although, I am not sure what the percentage is. A number of years ago I saw cost figures for a community that had very high public safety costs that were directly related to motor vehicles. I make that observation in light of arguments by some that gas tax dollars should only go for direct construction. One of the areas have questions about are programs to develop innovative financing at the Federal level and what we are trying to accomplish with them. It strikes me that the people who have the most favorable circumstances for borrowing money are state and local governments through general obligation bonds, which are tax exempt at the Federal level. These state and local governments borrow money more cheaply under general obligation bonds than we do. And so I am not quite sure what our federal goals are in this area. In reality existing federal law provides significant benefit through the tax code for state and local governments to do finance construction projects already. So I am not sure what we are trying to do with new financing programs because that opportunity exists if they choose to use it. So the question I guess is, how and why? Ms. Garvey. How and why? Mr. Sabo. Yes. Ms. Garvey. Let me make a couple of observations and see if I can answer that question. First, when you look at how public works have been financed in this country, we have mostly relied on one strategy, and it has been grant reimbursement. The check is in the mail. And that is really how we have built infrastructure in this country. I think what we are saying at the Federal level is that in a time of shrinking resources, we need to be a little more creative. We need to look at multiple strategies in much the same way that the private sector does. I think it is a mistake to present any aspect of innovative financing as a silver bullet or as a substitute for the grant program. What we are trying to suggest at the Federal level is we want to make sure that we are providing multiple tools that states can pick and choose. The NHS Designation Act was wonderful to both Federal Highway and to states because it gave us some increased flexibility. I have to tell you, if you are in the private sector, I understand, some of the increased flexibility is fairly routine for them. But for us in infrastructure investment at the Federal and the state level, it is pretty new. For example, we now have the ability to take the Federal dollars and pay off those interest rates that you are talking about. States and cities can go out and borrow. But in the past, up until the NHS, Designation Act they not allowed to use their Federal dollars to pay off the State interest. And as we all know for anybody who has mortgaged a house, it is those interest costs in the early years that really can do you in. So that kind of flexibility is what I would call innovative financing, and it is a way the Federal Government can help. Another opportunity is allowing the private sector to provide the local match. That is something that is fairly new to us, and it is a way to attract some additional dollars. So in a sense, I think what we can do at the Federal level is to provide some flexibility in the program that we have so that the states can use their dollars more effectively. Sometimes they do suggest going out and using your own borrowing capabilities, but giving you the flexibility to use the Federal dollars to pay off some of those costs. State Infrastructure Banks In terms of the state infrastructure bank, what we are providing is a tool. What we are saying is that you could use some of your federal dollars to set up a capitalized fund, and fund projects that have a potential revenue stream. Not every project has that. Lots of projects within a state could never generate revenues to pay off a bond, for example. Mr. Sabo. That would be rather rare, wouldn't it? Ms. Garvey. That there wouldn't be a stream of revenue, or that there would be? Mr. Sabo. No, that there would be. Ms. Garvey. Well, actually not. Again, I don't want to suggest it is the whole program. In most cases it is probably less than ten percent, but let me give you an example. Ohio has built, using a revolving loan fund, and some of their CMAQ dollars, an intermodal facility that serves both freight and rail. They have created a revenue stream from some of the fees there. They have a transportation district that they use as part of the revenue stream, in addition to some of the federal dollars that they receive. They haven't used tolls, but they have taken a combination of revenues that they have to fund these very important projects. Again, this isn't to suggest that it solves the whole problem or that it would replace the grant program, but we want to try to provide those opportunities, if you will, for states who are interested, in more tools. Some states will use them. Some states won't. It is probably a much longer conversation, though, and I would be happy to brief you and keep you informed. Revenue Bonds/Volume Caps Mr. Sabo. We have under other law the capacity for states to use revenue bonds, but we put tight limits on that which they can use for a variety of reasons. Ms. Garvey. Right Mr. Sabo. Those caps probably need to be increased. Ms. Garvey. That is a very good point. Mr. Sabo. No, those are imposed by the federal level on how much---- Ms. Garvey. The volume caps, yes. Mr. Sabo. Yes, on volume caps. And we are running into problems with that, but that applies to a variety of purposes that states can--well, I will just have to get a little better educated on it. Ms. Garvey. We are, by the way, not suggesting changing any of the Federal tax exempt provisions. Child Safety Seat--Proposed Rulemaking Mr. Wolf. Child safety seats. And we will move quickly, because I think Mr. Pastor already raised a number of issues. You are in the final stages of a proposed rulemaking which would simplify the installation. Mr. Martinez. Yes, sir. The docket closes in May. Mr. Wolf. So if we can--docket closed? Mr. Martinez. Closes in May. It is a 90-day docket. Mr. Wolf. Closes in May. And when will that come out? Mr. Martinez. We expect that we will turn that around fairly quickly. At this point, I expect, because of how we came up with the proposal, that there will be a significant difference from the original rule proposed. Mr. Wolf. Does the rulemaking address trucks as well as automobiles? Mr. Martinez. Yes, for light trucks. Mr. Wolf. And how long will it take to get them into the system? Mr. Martinez. Well, we proposed two years, meaning 1999. We created a blue-ribbon panel. It turned out that these groups had not spoken before. Based on that, some of them, as we understand, are working to get out before that time frame. All the world wants to know is that we have come to a single solution. And this not only involved our manufacturers and our child safety seat manufacturers as well as consumers, but we have worked internationally. Australia has been involved. Canada has been involved, and Europe has been involved. So I think that the proposal has been well received, but it was also well crafted by bringing these groups together. We put out a rule that looked at the ways to synthesize the differences, and our goal is to get it out as quickly as possible, but we left a docket time for full consideration. Child Safety Seat Installation Mr. Wolf. Currently there are about 100 models of child safety seats on the market and not every one fits into the 900 models of passengers cars or trucks. Some seats require locking clips to keep retracting shoulder harnesses tight. Others need supplemental hardware to attach the seats to the vehicle seats, columns, or floors. Because of these difficulties, securing a child safety seat in a vehicle is complicated. Approximately 80 percent of the child safety seats are installed incorrectly. What is NHTSA doing to overcome these problems? [The information follows:] NHTSA rulemaking efforts have addressed some of these incompatibility problems including a proposal for a universal child restraint attachment system which would allow the child seat to be installed using specially designed belt attachment points in the vehicle seat and corresponding attachment systems on the child seat. These new designs will take a couple of years to be introduced to the market following any rulemaking changes. Under other rulemaking, all vehicles manufactured since September 1995, must have a locking feature in the passenger seating positions that allows a child seat to be installed without using a locking clip. This is a new feature which requires some effort to educate the consumer that the feature is present in the belt system. Manufacturers either label the belt directly or place information in the owner's manual. In the meantime, a number of efforts are underway at the agency to provide efficient consumer assistance through both educational and technical means. The agency has designed a computer program, ``Your Child, Your Care, Your Choices,'' that will match ten years of vehicles with the over 100 child seat models and a specific age/size child in a specific seating position. The data are currently being collected by a trained team of experts and a pilot version of the program has been pilot tested for user friendliness. The agency also offers a number of experts throughout the country to call consumers back who have called into the NHTSA Auto Safety Hotline for help. Finally, the agency is pilot testing a new National Child Passenger Safety Standardized Technical Training curriculum with several national organizations including National SAFE KIDS Campaign, International Association of Chiefs of Police, National Safety Council, AAA, National Easter Seal, Emergency Nurses Association, Fire and Rescue organizations and Child Care Providers. Participants in the training can qualify for certification as child safety seat ``technicians,'' instructors, or ``Master Trainers.'' This training will provide the opportunity to ensure an infrastructure of experts at the local community level to provide direct assistance to consumers. Mr. Wolf. What types of systems could make the installation of car seats simpler? [The information follows:] In 1996, the agency formed a ``blue ribbon'' panel to study the issue of uniform child restraint systems to simply the installation of car seats. This panel has worked closely with the ISO committee on the ISOFIX design. A number of vehicle and child seat manufacturers, represented on the blue ribbon panel, concluded that other approaches than the ISOFIX four point system may provide a better solution. In June 1996, this group petitioned the agency to proceed with rulemaking on a modified uniform child restraint anchorage (UCRA). After granting and studying this petition, the agency issued a notice of proposed rulemaking (NPRM) on February 20, 1997. This NPRM proposes the adoption of the UCRA system with the flexibility to allow the introduction of an ISOFIX sytem. Focus group studies conducted by General Motors and other organizations have supported the position that the development and regulation of a uniform child restraint system will significantly improve the method and ease by which parents can install a child safety seat into their vehicle. child safety seat--proposed rulemaking Mr. Wolf. A recent New York Times article noted that NHTSA was in the final stages of developing a proposed rulemaking that would simplify and standardize the installation of car seats. What is the status of this rulemaking? [The information follows:] The agency issued a notice of proposed rulemaking (NPRM) on February 20, 1997. This NPRM proposes the adoption of a uniform child restraint system. Comments are due to this NPRM no later than May 21, 1997. After review and due considerations of the comments, the agency intends to proceed quickly to a final rule. Mr. Wolf. When do you believe a final rule will be issued and when will these products be designed for automobiles and trucks? [The information follows:] After a review and due consideration of the comments, the agency intends to proceed quickly to a final rule. The agency expects to issue a final rule before the end of 1997. The agency proposed that the new vehicle seat designs and car seat designs be phased-in two years after thee issuing of the final rule. Mr. Wolf. Because of the large number of cars and seats in use, how long would it take before new systems are in place in every vehicle? [The information follows:] Since the expected life of current vehicles and car seats may exceed ten years, it will take many years to have the uniform systems in every vehicle. Therefore, the capability must be maintained to allow present car seats to be installed in all future vehicles. Mr. Wolf. Could this system be retrofitted into current vehicles and be used with current child safety seats? [The information follows:] The proposed system is flexible enough so that it is possible manufacturers could offer retrofit kits for current vehicles. However, the proposed system does maintain the requirement that current child safety seats capable of being be installed in the same manner in which they are installed today. child safety seats--cd-rom data base Mr. Wolf. NHTSA is in the process of developing a CD-ROM database which would inform the public about the compatibility of a specific vehicle with child safety seat combinations. When will this database be available to the general public? [The information follows:] The data available on the CD-ROM ``Your Child, Your Car, Your Choices,'' is currently available to consumers; however, additional vehicles and supporting information will be included in the database after the initial pilot tests and evaluations are completed. The CD-ROM can be obtained from NHTSA's Auto Safety Hotline (800-424-9393) and from sales locations such as baby product retailers, auto dealers, child safety advocates, police, and other health and safety professionals. The CD-ROM was initially developed for use by child passenger safety educators and automotive dealers. The information provided on the disk was designed to assist parents in making correct choices regarding child seat installation. By filling in data fields for a child's age and weight, child safety seat preference, and vehicle make, model and year, the program matches the child safety seat to the vehicle to determine compatibility between the child seat and the vehicle. The CD-ROM then shows in diagram format the specific seating positions in the vehicle where the selected child seat can be installed safely. Other helpful fields provide step-by-step instructions for installing the safety seat correctly, such as whether locking clips or tethers should be used. To date, approximately 35 child safety seat models have been analyzed in a limited number of 1994 through 1997 model vehicles. The agency is currently pilot testing the CD-ROM with various child passenger safety experts and advocacy groups across the country, asking that these professionals critique and evaluate its content. state infrastructure banks Mr. Wolf. In an October 1996 report, the GAO stated that the state infrastructure bank program needed more time to mature and develop and that it was too early to evaluate comprehensively the success of the program. In light of this statement by GAO, which spends a lot of time kind of looking at these issues, why does the Department believe that an additional $150 million should be appropriated in fiscal year '98 to supplement those funds provided in last year's appropriation act? Ms. Garvey. I think another comment the GAO made--and I am not sure it actually is in the report--but in talking with GAO, another issue that they did raise is that in surveying the states, they found that the states found these difficult to do, and that it was helpful to have an incentive. We are really trying to encourage participation. And providing that kind of financial incentive seems to be a good way to encourage states to try it out, to test it out. This is new for states. It is new for even those of us in the federal government. And it takes a lot of work at the state level. They are working with their legislators, very often changing state law. They are sometimes working with administration and finance arms of state governments. So we found it was a good way to provide an incentive for states. innovative financing programs Mr. Wolf. The Administration proposes over $2 billion for innovative financing programs. How will the Department ensure that the majority of these funds would not be used to benefit a minority of states? Ms. Garvey. That is a good question. Well, first of all in terms of the state infrastructure banks, we would open it up and allow any state that is interested to work with us to try to set up an infrastructure bank. So in a sense we are expanding the program. And I think that would deal with geographic distribution, if you will. Mr. Wolf. How did the first ten work? Ms. Garvey. The first ten actually was a fairly good distribution. And we did look at geography. We looked at---- Mr. Wolf. What states and how close? Ms. Garvey. Let me see if I can remember. I know it is Arizona, Ohio---- Mr. Wolf. Well, maybe for the record. Ms. Garvey. Yes. Right, those are using existing federal aid dollars. But, South Carolina, Texas, Virginia, California and Missouri were of the first ten. [Additional information follows:] --Arizona --California --Florida --Missouri --Ohio --Oklahoma --Oregon --South Carolina --Texas --Virginia tax exempt debt Mr. Wolf. One principal barrier to attracting private capital is the fact the Internal Revenue Code restricts private involvement in tax-exempt debt. What changes, if any, has the Department proposed to the tax code to reduce inhibitions of private participants in projects financed by these leveraged banks, particularly those to be financed by the new transportation investment credit program? Is the answer none? Ms. Garvey. Yes, on the tax change, that is correct. Mr. Wolf. Why? Ms. Garvey. Well, I will tell you, Mr. Chairman, we did look at that issue. We looked at it long and hard and we had lots of discussions with Treasury. Treasury feels very strongly about some of their policies on tax exempt financing, as well as junior liens, and our proposal therefore reflects those concerns, but I think also it gives us the ability to provide some credit enhancement to move some of the transportation policies forward, that is dealing with projects of national significance. The Treasury Department feels very strongly about some of those policies. And we respect---- Mr. Wolf. From a deficit point? What does that mean? Ms. Garvey. More from the tax expenditures. Mr. Wolf. Tax expenditures? Ms. Garvey. Yes, and, policy point of view. We are going to continue our conversations with Treasury, though. state infrastructure bank/transportation infrastructure investment Mr. Wolf. Would you describe for the committee how the state infrastructure bank program differs from the proposed transportation infrastructure investment program for which the Department is seeking $100 million, and can't the state infrastructure bank support both direct loans and loan guarantees if---- Ms. Garvey. The state infrastructure bank, we are finding, is very good for those projects at the state level or multistate level that have a revenue stream, and are a small part of a statewide program. We still think there is a slice of projects, and not a huge number but a number of projects that have some national significance, that do not neatly fit into a statewide program and are really even too big for a state infrastructure bank. That is, in part, because the infrastructure banks are still in an infancy stage. In ten years or in 15 years SIBs may be able to handle projects like this and you might not need any national program, but at this point we think it is worth, certainly, exploring and looking at a credit enhancement program for those projects of national significance. Mr. Wolf. And what would those projects be, for instance? Ms. Garvey. They might be toll roads. They might be NAFTA corridors. They might--I was going to suggest the Woodrow Wilson Bridge, but---- Mr. Wolf. No, that is not an adequate one. Ms. Garvey. We actually were thinking that some of the credit enhancement might--yes, I-95 that the Congressman mentioned earlier would be a candidate as well. Mr. Wolf. Alameda Corridor, would have the Alameda Corridor been---- Ms. Garvey. The Alameda Corridor? Yes, I think the Alameda Corridor might have been a project of national significance. Mr. Wolf. What about the Boston Central Artery Tunnel? Ms. Garvey. At this point? Mr. Wolf. No. Ms. Garvey. If it had been ten years ago or something like that---- Mr. Wolf. Both. Ms. Garvey. At this point, I don't think so. I think the way that the state is approaching it, trying to bring its state resources--I hate to eliminate anything, but if the state is bringing its resources to the table, it seems to be a more appropriate way to go with the artery. And perhaps if this program had been around ten years ago, that might have been a possibility. alameda corridor Mr. Wolf. You have used the Alameda Corridor project as a model in the agency's effort to create the transportation infrastructure credit program. Why was the Alameda Corridor federal loan seen as a promising way to finance other projects considering that the corridor is in the early states and there are a number of unanswered questions concerning the risk to the federal government if other funding sources are not realized and the success of this type of federal loan at leveraging other funding? Ms. Garvey. We have shifted a bit. The Alameda, I would not say at this point is a perfect model for the credit enhancement program that we are talking about now. I think, however, the Alameda does provide some very good examples. We have been very careful about structuring flexible payments so that the federal government is paid on a timely basis. Mr. Wolf. But that is so new. Ms. Garvey. But it is new. You are right. I agree. Mr. Wolf. And it is hard to base much---- Ms. Garvey. Right. And again, I would just say that the proposal that we have submitted provides more credit enhancements, not the direct loan like the Alameda. So we started thinking maybe the Alameda is a good model. That is really not where we ended up. Mr. Wolf. Okay. We will have some other questions on that area. infrastructure bank program barriers The GAO noted that there exist numerous barriers that limit states' ability to participating in the state infrastructure bank program. These barriers include a limited number of projects that could generate revenue and thus repay loans made by the SIB as well as significant legal, constitutional and tax issues. How does the Department plan to address these issues to ensure that we are getting the biggest bang for our buck? [The information follows:] The purpose of the SIB program is to offer states other options for financing transportation projects beyond traditional grant financing. Naturally, legal and institutional barriers will have to be overcome for some states to take advantage of the SIB program. Thee has already been an overwhelming response by states to the program and these barriers have started to fall. GAO also noted that there are a limited number of revenue generating projects. These are the types of projects where the SIBs will be beneficial; however, the SIBs are not expected to be the primary funding source for transportation projects. We believe that states with SIBs will identify more revenue generating projects than is currently anticipated once project sponsors see that a SIB may help initiate projects sooner than grant funding. The Department will work with states to encourage effective uses of the SIB. state infrastructure bank program funds Mr. Wolf. News reports indicate that 28 states have applied to join the ten states already involved in the SIB program. How will the Department divide the funds provided in the 1997 appropriations act? Will it, for example, divide the funds among the ten states that are now in the program or spread the money around to new states? If the Department were to allocate funds to all 38 states, the funds wouldn't go very far and might only cover administrative costs. [The information follows:] Twenty-eight states submitted applications in December and since then one additional state has been added to one of the regional SIBs. The method for dividing the funds is still under consideration, but the intent is to provide funds to the first ten states and to some of the new states. Since some of the new states may not be ready to implement the SIB this year, funding may not be provided to all of those states. In any case, the $150 million will not go very far since it will be divided among a number of States and will be outlayed over several years in accordance with the legislation. We consider these funds as seed money to assist the states in creating and financing the SIBs, which is the basis for our request for additional funding in future years. These funds will not be used only to cover administrative costs because the law limits administrative costs to 2% of the Federal funds. new state infrastructure bank programs Mr. Wolf. Given the findings of the GAO report on the state infrastructure bank program, isn't the request to create yet another new program too premature? [The information follows:] The Transportation Infrastructure Credit Enhancement and SIB programs are designed to serve projects of a different size and scope. SIBs are a flexible financing toll, better suited for assisting portfolios of smaller, shorter-term projects in addressing State/local investment needs. large projects of national significance--which can cost in excess of $1 billion-- are simply too big to be financed within existing funding mechanisms. As start-up financial institutions, SIBs will be limited in the amount of assistance they can provide in the near-term. Over time (5-10 years), they may be able to develop the financial resources to be of benefit to these national investments. The Transportation Infrastructure Credit Enhancement Program is designed to fill the gap during this period. The need for and efficacy of Federal assistance (whether direct credit or credit enhancement) for large revenue- generating projects of national significance is already being demonstrated by the TCA toll roads and Alameda Corridor. Establishing a direct credit or credit enhancement program provides the benefits of being able to clearly set forth prudent and consist policy guidelines and fiscal parameters that will advance vital national transportation goals while maximizing efficiency and minimizing risk. Without a programmatic structure, such Federal credit assistance provided on an ad-hoc basis may not have the desired level of efficiency, equity, and effectiveness. istea direct loan program Mr. Wolf. ISTEA authorized a direct loan program in which participation has been very limited. Why then is another direct loan program needed and what makes FHWA believe that this program will attract more participants? [The information follows:] ISTEA authorized $40 million per year for a revolving loan fund (sec. 1105(i)) to assist States with certain high priority corridor projects. That authorization was inconsistent with provisions of the Federal Credit Reform Act of 1990 (FCRA) which established a consistent budgetary basis for all of the Federal Government's credit (direct loan and loan guarantee) activities. Beginning in fiscal year 1992 (also the beginning of the ISTEA authorization period), Federal agencies could not provide loans or other forms of credit assistance without legislative authority consistent with FCRA. Existing revolving funds and other lending accounts were to be liquidated in accordance with FCRA. DOT, in consultation with OMB, determined that one ``cycle'' of lending from the high priority corridor revolving fund newly authorized by ISTEA would be consistent with FCRA provisions. Thus, in 1994, two direct loans totaling $40 million were made: Arkansas, $24 million for the construction of Highway 71 between Fayetteville and Alma, Arkansas as part of the North- South High Priority Corridor; and Michigan, $16 million to widen a 60-mile portion of highway M-59 from MacComb County to I-96 in Howell County, Michigan. Notwithstanding the inconsistencies with credit reform, other aspects still would have limited the usefulness of the ISTEA revolving loan fund: (1) ISTEA section 1105(i) authorized ``advances'' (loans) which would be repaid in three years. That time frame is much too short to be of use to large infrastructure investments requiring Federal credit assistance. Potentially one of the Federal Government's most useful roles in surface transportation is to be a ``patient,'' long-term investor in projects requiring up-front capitalization assistance. (2) The $40 million authorization was probably too small to provide significant help to trade corridors and other large infrastructure investments. (3) The ISTEA authorization provided for repayment of advances through reductions in subsequent year NHS apportionments rather than project-related revenue sources. This type of ``advance funding'' of grant assistance does not benefit from the fractional scoring of true credit assistance and does not encourage additional private or other non-Federal resources. The proposed credit enhancement program will assist nationally significant transportation projects in accessing private capital through Federal participation as a co-investor. It is a discretionary program that will complement existing finance techniques by providing Federal credit assistance to major projects--such as intermodal facilities, expansion of existing highways, border infrastructure, trade corridors, and other infrastructure investments with national benefits--that otherwise might be delayed or not constructed at all because of risk or scope. It will encourage more private sector and non- Federal participation, address important public needs in a more budget-effective way, and build on the public's willingness to pay user fees to receive the benefits and services of transportation infrastructure sooner than would be possible under current grant-based financing. credit enhancement candidates Mr. Wolf. The budget materials indicate that projects of national significance will be supported by this program. What criteria will guide the FHWA's decisions in making awards under this program? Can the Department provide examples of the types of projects that would be financed by this new program? For example, Amtrak, the Alameda Corridor, or the Woodrow Wilson Bridge? [The information follows:] [Pages 144 - 145--The official Committee record contains additional material here.] commuter rail eligibility Mr. Wolf. The Department has suggested that public commuter railroads would be eligible. How would public commuter railroads (most of which are publicly subsidized) be expected to compete if an eligible project is to be of national significance and have an independent revenue stream to support a credit line? [The information follows:] Since commuter rail is supported in part by user charges (fares) it would technically satisfy DOT's eligibility criterion on that issue. In addition, most transit systems finance their capital improvements with revenue bonds backed by sales tax revenue, another dedicated revenue source. Since sales tax revenue tends to grow with inflation and economic growth in a very correlated fashion, it is a relatively secure revenue stream over the long term. A few commuter railroads generate broad economic benefits by carrying hundreds of thousands of passengers a day to and from important centers of commerce. The determination of whether or not a project is nationally significant is also based on a project's ability to stimulate new economic activity, reduce traffic congestion, and protect the environment. Public commuter railroads meet each of these criteria. federal credit program Mr. Wolf. I understand the Department of the Treasury has brought a number of troubling, programmatic issues to your attention. Does the Department of the Treasury support or endorse these new direct loan and loan guarantees? Please elaborate for the Committee the problems or concerns identified by the Department of the Treasury. [The information follows:] The Treasury Department shares DOT's view that large projects of national significance require additional forms of assistance, but on fiscal policy grounds favors credit enhancement tools over direct lending techniques. Our proposal synthesizes DOT's programmatic objectives of encouraging innovative finance and private sector participation with Treasury's preference for using credit enhancement mechanisms. The concerns that the Department of the Treasury has brought to DOT's attention regarding direct lending techniques are identified and discussed below: 1. Treasury Concern: By making a direct loan, the Federal Government has an implied guarantee on the capital market debt. DOT does not agree with this assertion. Neither the ratings on the capital markets debt (generally BBB) nor the investors' credit analysis reflects any implicit Federal guarantee. Under a direct loan program, both DOT and the capital markets investors would be creditors of the project. 2. Treasury Concern: A Federal credit program would result in additional tax-exempt debt issuance, which has a tax expenditure associated with it. DOT believes that in the absence of a Federal credit program, most of the large projects qualifying for assistance would be financed in any event at some point with 100 percent tax-exempt debt, so the marginal issuance is minor. Having the Federal government fund a direct loan for up to a third of project cost would actually reduce the amount of tax-exempt debt issued, by a corresponding amount. Treasury has no objection to making Federal grants which encourage or credit-enhance tax--exempt debt, such as capitalizing reserve funds (EPA State Revolving Funds, NEXTEA Revenue Stabilization Funds) or directly subsidizing interest payments on tax-exempt bonds (School Construction Loan program.) The Department does not understand why Treasury would object to funding loans which have a less direct impact on tax exempt debt issuance. Mr. Wolf. To what extent will these problems affect the transportation infrastructure credit program and the Department's ability to administer an efficient and effective program? [The information follows:] The concerns that the Department of the Treasury has brought to the attention of DOT have been addressed in DOT's NEXTEA proposal. The new Transportation Infrastructure Credit Enhancement program will avoid the concerns by providing grants, not direct loans, to fund debt service reserve funds and enable projects to secure external debt financing. DOT acknowledges, however, that grant-based funding is not a budget-effective way to assist nationally significant projects intended for this type of program. A direct loan program would leverage substantial private and non-Federal funding for projects. For example, a $33 loan, scored at a 10 percent budget cost, extended to a $100 project has an implicit leveraging ratio of 33 to 1 ($3.30 budget cost to $100 total investment). Grant-funded credit enhancement tools have substantially lower leveraging ratios. For instance, if a $9 grant (3 years debt service) is used to secure a $33 loan for a $100 project, the implicit leveraging ratio would be 11 to 1 ($9 budget cost to $100 total investment). loan guarantee projects Mr. Wolf. Given the Department has had limited experience with loan guarantee projects such as the Alameda Corridor, should more experience be gained before establishing a nationwide program? [The information follows:] The need for and efficacy of Federal assistance (whether direct credit or credit enhancement) for large revenue- generating projects of national significance is already being demonstrated by the TCA toll roads and Alameda Corridor. Establishing a direct credit or credit enhancement program provides the benefits of being able to clearly set forth prudent and consistent policy guidelines and fiscal parameters that will advance vital national transportation goals while maximizing efficiency and minimizing risk. Without a programmatic structure, such Federal credit assistance provided on an ad-hoc basis may not have the desired level of efficiency, equity, and effectiveness. Also, we believe any direct credit or credit enhancement program should be limited in scope--targeted to a relatively small number of projects of national significance. Each project will be one-of-a-kind, evaluated according to a unique set of benefit and cost factors. It is not expected that the Federal government will or should generate a large portfolio of such project financings. The program should rely on the discipline and credit evaluation expertise of the private capital markets. One measure of the program's success might be the extent to which it demonstrates the feasibility of long-term infrastructure investments to the private capital markets and can eventually be phased out. reorganizaton and consolidation Mr. Wolf. Two years ago, Secretary Pena indicated that the Department believed that significant--and I can remember he was sitting just where you are sitting--savings could result from consolidating the field offices of the Federal Highway Administration, FRA, FTA, NHTSA, and that consolidation would improve customer service through one-stop shopping and efficiencies. To date, little, if any, consolidation has occurred. In fact, rather than reducing its field presence, the Federal Highway has actually increased its presence with its newly established metropolitan field offices. Has the Department abandoned its consolidation activities? I remember he talked about Atlanta. Ms. Garvey. Well, in Atlanta we are actually all together. I guess we have been together for 100 days. Mr. Kane. There is a new building where we have all come together. Ms. Garvey. Yes, right. Mr. Wolf. But have we abandoned wider consolidation efforts? Ms. Garvey. No, and--a fair question. I will tell you I think one of the dilemmas that we faced is we started to look at real consolidation and one-stop shopping. We found that many of the customers we serve like the individual identity that they have with the modes. We do have a plan that we are going to present to the Deputy Secretary and to the Secretary very soon. It is a result of all of our efforts, a co-location plan that lays out what the costs would be, what the savings would be, where it would happen, what a time line would be. We have identified at least 50 locations that are good candidates for co-location. In addition, I want to say that in terms of Federal Highway, we are looking at our own regional offices as well-- both the role that they play and the number that we have. We are taking a very hard look at our skills and the skills that we are going to need for the 21st Century. That assessment is going to be ready this summer. We are taking a hard look at reorganizing within our own agency. It is priority for both Tony and for myself. Mr. Wolf. It is a budgetary issue and it is also a convenience issue. What about NHTSA? Mr. Martinez. Well, we have a very different issue to deal with. We have actually dramatically expanded our constituency and have about 100 staff out there in total. So it is very hard to collapse any more that we have. What we have tried to do is to work with others to address the needs of all these constituents and better deliver our programs. We have done that mostly through working with FHWA in several ways. One is that we have co-located, as Jane pointed out. We have co-located a lot of our field people together, at least in most of the regions. We have ten regions. Each region covers several states and only has about seven to twelve people in it. Secondly, we have a senior management safety team at the national level, as well as regional intermodal safety teams. That actually was given birth through our desire to work together. We also jointly share programs where we can attack problems locally. We determine the various ways to attack it, as pointed out by various members. In one place it may be a design issue, it may be an education program, or it may be to work together. We use the moving kids safely programs and the safe communities to do that. I think, quite frankly, just from talking to modal administrators, that is a real model of how you might work together to improve the quality of safety at the local level and meet the needs of various groups, as well as bring other groups together. For example, one of the benefits is that our staff knows more of the people in the roadway part of the world. A good example is Texas, where the DOT of Texas is now working with our programs much better. That is very helpful. Now there are big differences in that we have a lot of behavioral people and engineers. This is the way to begin to think the same. Mr. Wolf. In every location town that you are in and that Federal Highway is in, are you together? Mr. Martinez. Yes, sir. In the ones that we share, we are together. Mr Wolf. What plans does NHTSA have to reduce its field office presence? [The information follows:] NHTSA has no plans to reduce its field office presence. The agency has only ten Regional offices; each office has only 7-12 people, for a total of 84 full time field employees. These are NHTSA's only field offices. NHTSA has lean, efficient Regional offices which are critical to support its performance-based safety program and Presidential and Secretarial national safety priorities. Furthermore, the results of a recent survey, with a remarkable 75 percent of the states and territories responding, indicated that NHTSA's customers are pleased with the way services are currently being delivered. The highest rating was in having the Regional offices be responsive to the state inquiries and requests--8.99 on a scale of 1-10. About half of those responding stated that their relationship with their NHTSA field office was a ``10.'' NHTSA is working with the other modal administrations in DOT to pursue further co- location of its field offices, where possible, to improve customer services and achieve administrative efficiencies. Field Structure Mr. Wolf. Officials of the Department stated before the Committee that the Department planned to focus on changes in the field structure during 1996 and to finalize the Department's consolidation plans by the end of the year. What specific proposals for streamlining field operations and offices have FHWA and NHTSA completed over the past year, and what significant changes do you envisions occurring in your field structure this fiscal year? [The FHWA information follows:] The Department's surface transportation field offices have taken the lead in developing and implementing intermodal strategies and have taken action designed to achieve more effective program delivery, more efficient utilization of Departmental resources, and improved service to our customers. Examples of specific field restructuring activities that are underway or planned by FHWA and NHTSA in one or more regions include the following: Senior Management Safety Team comprised of senior officials from FHWA and NHTSA established to identify and implement a national program of improved safety program policy and delivery Establishment of Intermodal Safety Groups NHTSA serving as Executive Agent for 402 (State and Community Highway Safety) program in several regions; joint 402 and Motor Carrier Safety Assistance Program activities Joint public outreach activities--Moving Kids Safely, Safe Communities, Child Airbag Issue Safety liaison positions in FHWA Division offices to work with NHTSA on behavioral safety initiatives Administrative resource sharing--Government-owned vehicles (where co-located); videoconferencing and other audio visual equipment, copying and fax equipment, conference rooms (NHTSA and FHWA have recently co-located within the same space in Baltimore and are sharing a wide range of administrative services.) Joint FHWA, NHTSA, and FTA contract for computer support services in the field. Pilot program in one region where an FHWA employee is working with NHTSA to provide training on FHWA programs and technical areas. The Department will continue to build and expand upon the progress it has made in creating a more streamlined, intermodal surface transportation field structure that will provide our customers with ``one-stop shopping'' through a more customer-focused approach to the business of transportation. During the remainder of fiscal year 1997 and during fiscal year 1998, we plan to give the activities identified above time to become completely established and to continue to explore options for further program delivery enhancements. [The NHTSA information follows:] NHTSA has been working with FHWA to create a more efficient and effective field operation with: Senior Management Safety Team--NHTSA and FHWA established a team of top level managers in headquarters to set joint priority areas for field activities. Shared locations--NHTSA's offices are located with FHWA, except in Regions 2 and 10 (White Plains, NY, and Seattle). Regional Intermodal Safety Teams--NHTSA's Regional staff took the lead in creating Intermodal Regional Safety Teams, involving FHWA, FTA, FRA, and sometimes FAA. A major joint effort will be implementing Safe Communities. Shared program delivery--NHTSA trained FHWA, FTA, and FRA to deliver air bag safety programs in every Region and worked with all modes to conduct Moving Kids Safely conferences in each region. Shared administrative resources--NHTSA and FHWA are sharing a contract for computer services in the field. NHTSA is sharing all administrative services with FHWA in Baltimore (i.e., phones, mail, xerox). NHTSA plans to continue these important intermodal activities. In addition, this fiscal year a review is underway in Kansas City and Denver concerning shared locations, to include not only NHTSA and FHWA, but other DOT modes as well. changes in dot field structure Mr. Wolf. Do you envision any significant changes in the field structure in fiscal year 1998, and if so, what cost- savings have been included in the budget? [The FHWA information follows:] In keeping with the goals of the Department's restructuring effort, the most significant changes that will occur in the Department's field structure will continue to be primarily along programmatic lines. For over a year, the surface transportation modes have been engaged in a variety of joint and cooperative program delivery activities as well as administrative resource sharing. As a result of these activities, the FHWA plans to look at its current nine region structure to determine if this organizational structure is the most appropriate for shared program delivery among the surface transportation modes. Additionally, the FHWA, along with the other surface transportation modes, is an active participant in the Department's Co-location Task Force. The objectives of the task force are to identify opportunities to improve customer service, increase efficiency, reduce costs, and advance the National Performance Review recommendations. The task force is currently looking at a number of co- location opportunities for the Departmental operating administrations' field offices around the country. While cost savings are an important aspect of all co-location endeavors, the Department's main focus is on enhancing program delivery and customer service. In fact, potential cost savings may be at least partially offset by increased rental costs associated with co-location opportunities being considered in the central business districts of major metropolitan areas, as well as the establishment of the Department's four new metropolitan offices in Philadelphia, New York City, Chicago, and Los Angeles. [The NHTSA information follows:] NHTSA does not envision any significant changes in its field structure in fiscal year 1998. NHTSA's field structure is composed of ten Regional offices, with a total of 84 employees. These lean, efficient offices are critical to support NHTSA's performance-based safety program and Presidential and Secretarial national safety priorities. [Pages 151 - 152--The official Committee record contains additional material here.] its deployment Mr. Wolf. In 1996 the Department established a goal of having the nation's 75 largest cities deploy an intelligent transportation infrastructure, ITI, by the year 2005. Is it realistic to assume that the 75 largest cities can implement an integrated ITS system by the year 2005 when state and local implementors still have to overcome several key, fundamental obstacles to deployment, and should this goal be revised to more accurately reflect the current status of ITS deployment? Ms. Garvey. I can certainly ask Christine Johnson or Tony to add to this, but let me say it is an aggressive goal. It is a very challenging goal, but I think it is one I would like to stay with. I think it is good to have a goal that does challenge us. And the budget that we have proposed for next year recognizes the need to do some additional training. One of the things the GAO has talked about is that we need to train some of the local officials out there. We do need to train state officials particularly around the area of integration. A lot of our constituencies understand elements of the ITS system, but putting it together and fitting it together and making sure it is integrated is really the most immediate goal for us. How can we encourage that kind of deployment? I like the goal. It may be aggressive and it may be something we will need to revisit eventually, but I think it is important to have it out there. cost of intelligent transportation infrastructure Mr. Wolf. The Department estimates that it will cost on average $300 million for a city the size of Washington to implement from scratch a fully integrated ITI. However, there is no mention of the operation and maintenance costs needed to sustain the investment. What levels of yearly operation and maintenance costs can cities expect to incur after they implement an integrated ITI? Ms. Garvey. ITS capital investment is included in each one of the categories. The operations would be primarily the responsibility of the local and the state government. Mr. Wolf. And do they have the money and do they know what they are getting into? Mr. Kane. In terms of some systems right now, we can certainly provide information on what it is costing. One thing we are making clear in the NEXTEA legislation is the emphasis on operations--our planning requirements we are building into the requirements at metropolitan areas focus on the operations issue. They build those costs into their financial plans--as well as the eligibility in our basic categories. The NHS Act opened up the operation of ITS facilities as an eligible federal aid expense, so it is built in there. The actual dollar costs though, Mr. Chairman, we couldget that for some of the existing systems and give you information. Mr. Wolf. If it were to cost $300 million to build a system for the nation's capital, what would it cost--maybe Christine can help--what would it cost to operate the system once it was in place? Ms. Johnson. Our early evidence indicates that you are running about ten percent, ten to fifteen percent of the original capital cost. Now let me make a comment on the $300 million. Our model deployment taught us a lot about that number. We had estimated that amount as though you went into an area that had no signal system in place or no freeway management in place, nothing. We find that in fact most major metropolitan areas have significant infrastructure in place and what you are paying for is bringing it together. In the legislation that we have put forward we have broadened the eligibility for maintenance to pay for operations and maintenance. Mr. Wolf. Excuse me, can you repeat that, please? Ms. Johnson. In the legislation that we had put forward, we have broadened several categories to be eligible for operations and maintenance for ITS. Mr. Wolf. So if we were to apply this to Washington and the capital costs were $300 million, the whole region would have roughly $30 to $45 million a year on operation costs? Is that a fair estimate? Ms. Johnson. That is what our early indication is. Mr. Kane. It is one of the reasons, Mr. Chairman, we put it in our planning language as well, because of the financial constraint and financial planning requirements in there, so that there is a clear focus by the states and MPOs. As they launch into projects, they are aware of it financially and build that into the process. Mr. Wolf. I know you have implemented model deployment with New York City, San Antonio, Phoenix and Seattle. I would sincerely hope that we could do it here in the Washington D.C. area. This area could be the fifth. Just so you know, and I know people view me as the Congressman from the District. My district actually extends from about Western Fairfax County, down into the Shenandoah Valley where congestion is not a problem. I don't represent Arlington County, nor do I represent Montgomery County, but this region is second in the nation in congestion. I almost spoke up when Mr. Tiahrt was speaking. The reason there is such an aggressive driving problem, I believe, in this region is you are finding people that are getting up at 5:00, 4:30 in the morning to beat the traffic. It is not uncommon for a mom or a dad in Prince William County to tell me they are getting up at 4:30 in the morning. The best time to commute in this region is between 5 AM and 6:30 AM. The HOV hours are set up in such a way that if you don't pierce the vale by a certain time, you can't get on them. People coming from the western areas have no ability to even access HOV. They come down the GW Parkway. A third of the people on the parkway are coming in from Maryland. They are double crossers, crossing over, coming down and crossing back. I think the aggressive driving is really because people are in traffic, their hearts are beating. They can't get from point A to point B. I think the area, the nation's capital, is in need of such an ITI system. We all represent the District of Columbia. It ought to be a city on a hill. It is the place where everyone from all around the country, or the world, comes. So I would hope that this region, the Washington D.C. area, could be viewed as one of the ITI deployments, because you have the opportunity to work in your backyard. I will tell you what, I will ask if Mr. Olver has any questions, and then we will recess, in fairness to all of you, for about 15 minutes or a half an hour. You can go down and get a bit to eat, after which we will come back and then complete the last questions relatively fast. Some of the questions we will ask, others will submit questions for the record. Ms. Garvey. Sure. Mr. Wolf. So you can grab a sandwich or something. its deployment Why has the Department decided to make deployment of ITS a focus of ISTEA reauthorization? [The information follows:] The Department's reauthorization proposal balances a new emphasis on deployment with a continued commitment to research and testing of ITS technology. Widespread ITS deployment has always been a goal of the ITS program. In fact, it was the first goal listed in the authorizing language for the program contained within ISTEA. Although the program has funded some limited deployment support and promotion activities over the last five years, the program has been focused primarily on performing basic research and technology testing activities to ensure that the vision of integrated, intermodal, interoperable ITS deployment was achievable. We believe that, with the completion of the Architecture, the launching of the standards program, and the results of our more than 80 operational tests, deployment of basic ITS infrastructure can now be pursued in a technically sound, effective manner. There also now exists an important window of opportunity, as several States and metropolitan areas have begun to extensively invest in ITS infrastructure deployment, and many more are in the process of getting started. Without Federal leadership now, there is a serious risk that ITS infrastructure will be deployed across the nation in a patchwork, non- integrated and non-interoperable fashion. Rather than seizing the opportunity to use ITS to bridge the modal and agency fragmentation, in many areas ITS will likely be deployed in the existing agency and modal stovepipes--hardening the fragmentation that exists and making seamless, intermodal management of the transportation system more difficult, if not impossible. its deployment obstacles Mr. Wolf. How is the Department planning to address existing obstacles to deployment such as the lack of (1) working knowledge of the systems architecture; (2) technical standards; (3) technical knowledge at the state and local level about ITS; and (4) cost/benefit data on ITS? [The information follows:] We have proposed to spend approximately $22 million in FY 1998 on Mainstreaming activities, which are aimed at providing state and local officials benefit/cost information, technical guidance, and training needed to ensure that the technologies and services deployed are done so in an interoperable, intermodal fashion. We have proposed $13 million to continue the standards development program currently underway. Over a dozen high priority standards will be ready for operational use by the end of the year. By the end of 1998 we will have drafts of standards that we believe are absolutely critical to regional compatibility. We also plan to initiate training and technical assistance activities focused specifically on standards to ensure that Federal, State and local public officials understand how to effectively use them. Finally, we are conducting detailed architecture training courses this year for systems integrators and a series of short courses on architecture over the next two years for agency professionals who will work system integrators. We are also developing a series of guidance documents geared to target communities. The Transit document was available in January and will be updated in May. Four more will be released this year. Mr. Wolf. How will the Department adequately address these obstacles before providing federal financial assistance to state and local agencies for deploying ITS? [The information follows:] Federal aid highway resources are now being used to deploy ITS at the rate of over $1 billion a year. That is why the department has made such an urgent appeal to this Committee for training and technical assistance resources both last year and in the current FY 1998 budget. We are confident that the incentive program will lead several of these early deployer's toward integrated and regionally compatible systems. That incentive program, coupled with a fully funded aggressive training, guidance and technical assistance effort, as has been proposed, will put us ahead of the wave of mainstream deployers. implementation of its technology Mr. Wolf. This committee is told repeatedly that states and local agencies do not have sufficient resources to meet some of their most basic transportation needs. Why won't this significantly impact the states' desire and ability to implement ITS technologies? [The information follows:] Because deployment of ITS infrastructure, technologies, and service help fulfill a basic transportation need--the effective operation and management of the transportation system. In fact, most States and many metropolitan areas are already using Federal-aid and State and local funds to purchase ITS infrastructure components (e.g. traffic signal systems, freeway management systems, transmit management systems, incident management systems, electronic fare payment and toll collection systems, traveler information centers, railway-highway grade crossing systems, and emergency management systems) to help satisfy this need. ITS infrastructure components are not new budget items to State and local jurisdictions. The challenge now is the convince the remaining State and local jurisdictions that ITS technologies an services can provide substantial benefits to their customers, and ITS infrastructure must be deployed in an integrated, intermodal, interoperable fashion. its investment Mr. Wolf. How can FHWA be sure that state and local implementors will deploy ITS when they have so many other pressing needs for their existing infrastructure funds? [The information follows:] As noted above, we already have ample evidence that State and local governments will invest in ITS once they are convinced of the benefits. ITS saves scarce transportation dollars so that they can be used to address other pressing needs. For example, a recent analysis performed for the Department concluded that, over the next ten years, a combination of ITS infrastructure deployment and some addition of physical capacity to the transportation system could satisfy anticipated travel demands at a cost 35% less than that of building the additional needed capacity without ITS. This included the cost of operating and maintaining the ITS infrastructure. consumer its costs Mr. Wolf. What information does the FHWA have that indicates that the average consumer is willing to sacrifice personal privacy, generally wants, and is willing to accept and pay for ITS technologies? [The information follows:] We have seen Americans give up far more privacy in their cellular phone usage, bank and credit card usage. Further, many technologies do not identify the individual and or the data is stored only in a matter of moments. A Privacy and ITS: Results of a National Opinion Survey, conducted by The Institute of Policy, George Mason University, in 1996, showed the American public overwhelmingly (78 percent of the respondents) prefers that ITS be designed so that they collect anonymous information. For automatic toll collection, the purchase of the pass is voluntary, systems that use debit cards can be used anonymously. The popularity of automatic toll systems indicates a willingness to trade off privacy for the convenience of a faster trip. The survey further revealed, in general, Americans want to give their consent to the collection and release of ITS information. Over half of the respondents want to be able to give their consent for release of information collected by ITS for non-travel purposes and about a quarter regard release with consent as unacceptable. Another good example of consumer acceptance is, the same survey uncovered, between 70 and 80 percent of respondents favored three purposes for using highway computers and cameras: to improve traffic control and design; to identify where policy should be posted; and to give a warning. In conjunction with ITS America, FHWA drafted a set of Fair Information and Privacy Principles to guide providers of ITS services and products as they deploy systems that could utilize personal information. Currently, the Principles are in draft final form. The Principles cover: individual centered, visible, comply, secure, law enforcement, relevant, anonymity, secondary use, and freedom of information act. This version has been presented to privacy advocates, representatives of law enforcement and state transportation officials for review and comment. Proposed changes from these groups are indicated on this version of the Principles. It is expected that the stakeholder outreach effort will continue in 1997. The Fair Information and Privacy Principles are advisory in nature. It is recommended that providers of ITS services and products use these principles or publish their own and make them known to the public. There is no empirical data indicating that the average consumer is willing to sacrifice personal privacy for ITS technologies. These Principles, however, recognize this concern. The individual centered principle stresses that an individual's expectation and right to privacy must be respected. Consequently, it is recommended that information regarding what data is collected, how it is used, and how it is distributed be made known to the consumers of the ITS services or products. The visible principle addresses this point. Most importantly, the anonymity principle advocates that ITS services that are capable of collecting personal data be designed to do so on an anonymous basis. For example, automatic toll collection systems are already in place that deduct tolls from an anonymous debit account. The success of such systems are E-Z Pass program in and around New York City may be the best testament to the public acceptance's of ITS technologies. It is believed that by following these and other Fair Information and Privacy Principles, providers of ITS services and products will be able to serve the consumer demand while balancing the need to protect individuals' expectation and right to privacy. its commuter benefits Mr. Wolf. Given that the majority of commuters are intimately familiar with primary and alternative commuting routes, what additional benefit can technologies such as in- vehicle route guidance offer the every-day commuter? [The information follows:] Early results from our consumer research indicates that the everyday commuter traveling to and from work will not generally use the route guidance functions of an in-vehicle device (although they can be extremely useful for non-commute and recreational trips). However consumers indicate that they see great value in an in-vehicle navigation device with the incorporation of real-time traffic condition information. model deployment initiative Mr. Wolf. The FHWA has implemented the Model Deployment initiative, which is designed to showcase and demonstrate the costs and benefits of an integrated ITS system. Four metropolitan areas have been selected as model sites, New York City, San Antonio, Phoenix, and Seattle. These projects are to be operational sometime in calendar year 1997, and the results of these model sites will not be available until late 1998 or 1999. Considering this, isn't a large-scale deployment of an ITI in the nation's 75 largest cities a bit premature? [The information follows:] The U.S. DOT is not proposing a large scale deployment program in the $100 million incentive program. A large scale deployment program would be measured in the billions. This program is intended (among other objectives) to lead deployers in metropolitan areas toward integration--before incompatible deployments had hardened existing modal and regional fragmentation in a given region for the next 10 to 20 years. We know that in 1995 there was over $1 billion in Federal- aid funding for highways spent on ITS deployment. That doesn't count FTA funding, or state, local and toll authority expenditures. In 1996 a detailed survey by Oak Ridge National Laboratory indicated that most of the 75 major metropolitan areas had some level of ITS expenditure underway and more planned. The bad news was--virtually none of it was integrated. That has been confirmed by a recent Volpe report. Without some intervention, we risk having ITS infrastructure deployed in the institutional and modal stove pipes that characterize the industry today. It is happening now. That in analogous to each state, or each metropolitan area building its own version of the Internet without preparing for the possibility of hooking them together. Or each metropolitan area building its own version of a limited access freeway--with no vision for a national Interstate System. By encouraging agencies to make provisions for interoperability, and compatibility with other agencies in a metropolitan area, we have an unusual opportunity to bridge the modal and institutional fragmentation that exists today with an infrastructure that will allow us to manage the system of the 21st century intermodally and seamlessly. nhtsa its program Mr. Wolf. Why is NHTSA entering into cooperative agreements with industrial partners to encourage the development and deployment of effective collision avoidance warning systems, on-road evaluation of heavy vehicle drowsy driver detection systems, operational tests of rear-end collision avoidance systems, and first generation road departure collision avoidance systems? Many of these technologies have already been manufactured, tested, and marketed. What is NHTSA doing that is different? [The information follows:] The NHTSA collision avoidance program is designed to address specific safety problems. A major thrust of the program has been the identification and detailed description of events that produce collisions. System concepts and technologies for addressing each safety problem have been identified and work is underway to understand the system capability needed to solve each problem. For these problem areas, NHTSA has done work on technologies for sensing, logic for determining if a warning is necessary to alert the driver, and the driver interfaces necessary to effectively communicate the warning to the driver. At the present time, there are no commercial products being used in passenger vehicles for any of these areas. Cooperative agreements with industrial partners will provide significant new understanding of the relationship between system capability, user acceptance and safety benefits. This improved level of understanding will provide a solid foundation for system development by the motor vehicle industry and valuable information for the buying-public. Operational Test of Rear-End Collision Avoidance Systems NHTSA continues to address, with the cooperative agreements, the barriers to large scale deployment and public acceptance-human factors issues, false alarms, etc. After these barriers are overcome, an operational test, real systems in real vehicles driven by real people on real roads, will be the next logical step. First Generation Road Departure Collision Avoidance System Prior to initiation of the NHTSA program, this technology has been largely in the experimental area and has been the subject of laboratory and test track experiments associated with military applications. HNTSA issued a cooperative agreement to an industrial partner and a competitive contract to a research university to develop the technology further to the point where an operational test would be a viable option. Real world challenges such as driver acceptance, system cost, and safety impact will be studied in operational tests. Heavy Vehicle Drowsy Driver Detection System One objective of NHTSA's drowsy driver technology program is to develop, test, and evaluate a drowsy driver detection and warning system for commercial motor vehicle applications. The Office of Crash Avoidance Research identified the need for, and then established an experimental research protocol to independently validate drowsiness detection systems, including algorithms previously developed under NHTSA sponsorship. First, university partners will provide the initial validation for each device using sleep deprived subjects in a controlled laboratory setting. Second, devices that reliably and validly detect drowsiness in the laboratory will be further examined in combination for reliable and valid operation, by industry partners, using commercial drivers under actual driving conditions. National Speed Limit Mr. Wolf. Last year the National Highway System Designation Act repealed the national speed limit. With that, many states, particularly in the west, raised their maximum speeds to 75 miles per hour. Highway safety advocates predicted that high speed limits would inevitably lead to more fatalities. A year later, what do the statistics indicate? [The information follows:] Preliminary estimates of the traffic toll for 1996 indicate that while total fatalities declined very slightly by 0.7% compared to 1995, fatalities occurring on the Interstates increased by 9% and by 4% on U.S. routes, the roadways most likely to have been affected by increases in the posted speed limit. While NHTSA believes that repeal of the national maximum speed limit (NMSL) and motorcycle helmet laws will have an impact on traffic fatalities, it may be too early to determine what the impact will be. Following the repeal of the NMSL in November 1995, with passage of the National Highway System (NHS) Designation Act, states began to pass legislation increasing speed limits on selected roadways. Of the States that have increased speed limits, only nine (Arizona, California, Illinois, Massachusetts, Montana, Nevada, Oklahoma, Pennsylvania, Wyoming) have had the increased limits in place for all or most of calendar year 1996. Mr. Wolf. Mr. Olver. Mr. Olver. Mr. Chairman, I think you have handed me a hot potato, because if I start asking questions at this point, keeping people waiting---- Mr. Wolf. No, that is--no. Mr. Olver. No, actually I am being facetious. I will pass. air bag funding Mr. Wolf. Okay, why don't we---- Mr. Martinez. Mr. Wolf, if I could correct for the record-- you asked me about $10 million for air bag safety versus what the number was. I told you ten million. Mr. Wolf. The statement before you indicated $11 million yes. Mr. Martinez. Right. It is $8 million overall. It is $2 million on traffic safety programs and $6 million in our research programs. Mr. Wolf. Okay. Mr. Martinez. Proving once again not to believe everything you read in the paper. Mr. Wolf. Okay, we will recess till about quarter of two. [Recess.] Mr. Wolf. We have a vote coming up at 3:00, so we definitely will be finished by then and maybe even sooner. Hopefully we can let you go before long. Did you get a sandwich, or something to eat? Ms. Garvey. Yes, thank you. speed management Mr. Wolf. So we will have a couple model deployment questions. And a speed question, Dr. Martinez. If you can-- highway advocates predicted higher speeds would inevitably lead to more fatalities. When do you expect more precise information, because everyone I ask has a different answer than you came up with today. We asked GAO and others. When do you expect some data that we can rely on where we can see what actually has happened? Mr. Martinez. We can say that we will deliver our first report to Congress by the end of September of 1997. We are strugging with the facts that now the states have been required to report certain types of information. We started going through the Federal Register to find a methodology. The biggest concern we have is that we don't want to do a report and have people taking pot shots at it. So we tracked as best we can. It has been out for comment and I think now it is a good report. I think it will be able to give you a clear picture. I think it will have some fuzz in it, because last year, all the states did things differently. I think for this first year, we will have a fairly good report by September. state speed limit increases Mr. Wolf. What states have raised their speed limits? Maybe you can give us that for the record. Mr. Martinez. I can submit that for the record. [The information follows:] The following states have raised their speed limits above what was allowed under the National Maximum Speed Limit (NMSL): AL, AZ, AR, CA, CO, DE, FL, GA, ID, IL, IA, KS, MD, MA, MI, MS, MO, MT, NE, NV, NM, NC, OH, OK, PA, RI, SD, TN, TX, VA, WA, and WY. Of these states, 23 have increased speed limits to 70 mph or higher, In some states, such as Massachusetts and Pennsylvania, only speed limits on some freeways were increased to 65 mph. Under the NMSL, these same freeways, located in urban areas of 50,000 population or greater, were limited to 55 mph. Mr. Wolf. How many? Mr. Martinez. 34 have raised their limit. Mr. Wolf. 34? Mr. Martinez. 34, two-thirds of the states. states with no speed limit Mr. Wolf. And how many have taken them off altogether, like Montana? Mr. Martinez. Only Montana. It is the only one. Twenty- three though, have increased their speeds above 70 miles per hour. We can provide for the record the states and the limit they set. Mr. Wolf. Of those states that raised the speed limit, which ones have a primary seat belt law? Mr. Martinez. I would have to get that for you for the record, because I don't have that off the top of my head. Some states may increase enforcement of other programs in conjunction with the speed limits, but I think that is a good question. I could give you the information for the record. [The information follows:] The following states have raised their speed limits and have enacted primary seat belt laws: California, Connecticut, Georgia, Iowa, Louisiana, New Mexico, North Carolina and Texas. Mr. Wolf. Okay. And with the speed limit increases, as Mr. Pastor was saying, have you found that when the speed limit is 60, they generally are going 65. If it is now 75, are they going 80, 85? What is anecdotal and what have you found out? Mr. Martinez. Anecdotal is a mixed bag. One thing we are trying to do with our speed management program is to get reports back from the states and be able to present a clear picture. For example, one state had an increase of 70 percent mostly on the rural two-lane roads because they raised the speed on those roads. In other states they have actually had some drops. We have to look at exposure and also enforcement. I think it is really still too early for us to get a clear picture and not be seen as being---- Mr. Wolf. But what about accidents or speed, because I---- Mr. Martinez. Fatalities. Mr. Wolf. Okay, I was talking about speed, though. When the law was 55, people went 60, 65. Now if it is 75, are they going 75 or are they going 80 or 85 miles an hour? Because I came through back from the Republican retreat in Williamsburg and on I-95 everyone was going far above the speed limit. I was even interested on the George Washington Parkway--and I appreciate your help and your support with regard to that. At 50, the other night I was driving home alone and everyone was passing me, and so I was just wondering are there studies to show that it--and I think I know the answer, but I want you to tell me if I am right or wrong. Have they gone up to 75 or are they just going 85? Are they going ten miles above whatever it is, five miles above? Maybe you want to answer that for the record. Mr. Martinez. I can't tell you that we have a program that has gone out and looked at that. Anecdotally we find that to be true. One of our concerns about the whole fate of the speed limit is that it was, in many places, perceived as a message that speed is not important, speed doesn't matter or it is not something that is going to be enforced highly. Mr. Recht. Just to reiterate, we have some anecdotal information. I mean, I recall hearing in one state where the speed, actual speed, went up about two miles an hour and all this even though there was a ten-mile-an-hour increase. But what we are finding is that the enforcement piece plays a major factor, particularly with respect to the early information on fatalities. Where the state said okay, we are going to increase the speed limit. We are also going to up our enforcement activities so as to get the message out that just because the speed limit is increasing it doesn't mean you can in fact, still take ten or take 11, as they say in the police business. We found that fatalities stay the same and come down. Where there is lesser enforcement activity, it appears maybe fatalities are going up. Mr. Wolf. Anecdotal evidence seems to be mixed--in Wyoming, death rates have decreased since the repeal of the speed limit, while in Nevada, auto fatalities are up eleven percent. What trends are apparent? [The information follows:] While we believe that repeal of the national maximum speed limit (NMSL) will have an impact on traffic fatalities, it may be too early to determine what that impact will be. Following the repeal of the NMSL in November 1995 with passage of the National Highway System (NHS) Designation Act, states began to pass legislation increasing speed limits on selected roadways. Of the states that have increased speed limits, only nine (Arizona, California, Illinois, Massachusetts, Montana, Nevada, Oklahoma, Pennsylvania, Wyoming) have had the increased limits in place for all or most of calendar year 1996. We compared Interstate (the roadways most likely to be affected by an increase in the posted speed limit) fatalities and Non- Interstate fatalities for the first six months of 1995 to the first six months of 1996 for each of the nine states listed above. Three (Montana, Nevada, Oklahoma) of the nine states had an increase in fatalities on Interstate highways; the remaining states had no change or had a decrease in Interstate fatalities. state interaction on speed issue Mr. Wolf. Are you doing anything with the states, urging them to either not raise their speed limits or to increase the enforcement. Is there a formal---- Mr. Martinez. Yes. We have a STEPS program and we have a campaign safe and sober. It is focused on speed both in English and Hispanic. We have been working very hard with law enforcement, they are very concerned about this. A couple of concerns they have had also is that the message--that is why I relayed this--was kind of clear that people can just judge their own speed, that speed is not a big factor. There is even a state, as you pointed out, that has no speed limit. Now what kind of message does that send? So we have been working with states in order to talk about speed management overall. The second thing is that we had a fairly large public education campaign. We have also sent information about our statistics to governors and state legislators. I can tell you that Secretary Pena wrote to every governor. I myself wrote to every governor. We are kind of fighting an uphill battle in some ways, because this is seen in many ways, as a state's rights issue not as a safety issue. We are trying to go back and get the data they need to make informed decisions. helmet laws Mr. Wolf. Maybe you should have some of your governors who have been sympathetic to write to other governors. Governor Hunt's man keeps coming. Maybe you should askGovernor Hunt to contact all of the governors. Governor to governor carries a lot more weight than the Federal Government. Helmet law, what has been the effect? Mr. Martinez. Right now no state has repealed its helmet laws, but there are many states looking to repeal those helmet laws. We are, trying to build on the foundation of our expanded constituency using the CODES states, which have shown that, people pay the bills when the medical costs are incurred. And we have fairly active technical assistance programs through the states to help them address those issues. So far we have not seen much in the erosion of helmet laws, but we are concerned that will change. Mr. Wolf. If the first state rolls it back or repeals it, then I think Katy Boggs is right, they may just follow. Mr. Wolf. Total motor vehicle fatalities and deaths per 100,000 people began increasing in 1993 after declining since the mid-1970s. Do you believe that the repeal of the national speed limit and motorcycle helmet laws rather than a change in the birthrate had any impact on recent fatalities? [The information follows:] The agency closely examined the increases in motor vehicle fatalities that occurred in 1992-1993 and continued in 1994- 1995. The consensus regarding the 1992-1994 increase was that while alcohol and safety belt programs are continuing to have a favorable impact, the increases in motor vehicle fatalities appear to have been driven by economic forces and increased travel (exposure to the risk of a crash). In 1994-1995, the characteristics of the increases in motor vehicle fatalities point to increased crash risk on roads posted at or above 55, suggesting higher travel speeds and not as related to economic and exposure factors as in 1992-1994. Preliminary estimates of the traffic toll for 1996 indicate that while total fatalities declined very slightly up 0.7% compared to 1995, fatalities occurring on the Interstate increased by 9% and by 4% on U.S. routes, the roadways most likely to have been affected by increases in the posted speed limit. While we believe that repeal of the national maximum speed limit (NMSL) and motorcycle helmet laws will have an impact on traffic fatalities, it may be too early to determine what the impact will be. Following the repeal of the NMSL in November 1995 and passage of the National Highway System (NHS) Designation Act, states began to pass legislation increasing speed limits on selected roadways. Of the states that have increased speed limits, only nine (Arizona, California, Illinois, Massachusetts, Montana, Nevada, Oklahoma, Pennsylvania, Wyoming) have had the increased limits in place for all or most of calendar year 1996. alameda corridor Last year, Congress provided a direct loan of $400 million. Can you bring the committee up to date on the status and the terms of the loan? Ms. Garvey. We have negotiated an agreement with the Alameda Corridor. By the way, their contracting schedule--they are set to go into construction in May and I believe they are actually going to sign a contract or issue a contract either this week or the beginning of next week. We have negotiated a loan agreement with the Alameda Corridor project proponents. It is, I think, a very tightly constructed loan agreement. We have flexible payments in place for paying back the loan, but it is very tightly outlined in the loan agreement. We have also put a provision in that, if the revenues are not proceeding as they are expecting and as some of their early investment ratings had indicated, then they will have to raise the rates for the shippers who are using the Alameda Corridor. So we built in a couple of provisions to give ourselves some protection with the loan agreement. Mr. Wolf. I read the other day in the paper about the Long Beach Port. Is that one of the ports that is being served by this? Ms. Garvey. That is one of the ports being served by it. Mr. Wolf. So we are doing this to help the Communist Chinese. That troubled me a little bit when I saw it. Did we know that the Chinese were---- Ms. Garvey. That would be--I apologize, Congressman. I am not---- Mr. Wolf. The Long Beach Naval Yard that we read about in the paper the other day, will it not be served by the Alameda Corridor? Ms. Garvey. I believe that is abandoned. Mr. Wolf. Right, but will it not be served by the Alameda Corridor? Mr. Kane. I don't know the exact location of it. The harbor itself ought to be a part of the improvement effort. I don't know directly for that facility. We can---- Mr. Wolf. Could you check? Mr. Kane. Absolutely. Mr. Wolf. The inference was that the Alameda Corridor was going to make the Long Beach Naval Yard a prosperous opportunity for Chinese operation operations. The thought of this committee, of us appropriating anything to help the Chinese government to profit--somehow it bothers me. The fact that the Chinese government sold skud missiles to Sadam Hussein that were then used against American soldiers and also sold technology equipment to the Iranians and now gets the use of an American naval base--that just troubles me. It doesn't seem right. So if you can let us know. pending lawsuits--alameda corridor The struggle between the ports of Los Angeles and Long Beach and the smaller corridor cities over the project has continued for more than a year. It has been the subject of a pending lawsuit. Do you know what the status of the lawsuit is? Ms. Garvey. Yes, Mr. Chairman, the court has agreed to hear the small communities case. I don't believe there is a date when that has been scheduled yet. We will follow up on that, but it has agreed to hear the small communities case. I continue to hope that they can work on these issue collectively. And I think that actually the court's decision may make both ports more amenable to sitting down at the table with the small communities. Los Angeles, I think, has been particularly, perhaps, a little more forthcoming and willing to work with the smaller communities, and I am hoping that this may encourage Long Beach as well. Mr. Wolf. To what extent will this lawsuit delay construction and to what extent will any monetary settlement to the smaller cities affect the ability of the ports of Los Angeles and Long Beach to finance the project? [The information follows:] The Smaller Corridor cities have never sought an injunction to halt construction. The ground breaking for the first project in the Corridor's north end is scheduled for May 15, 1997. For ACTA to built the mid-Corridor section that lies within the cities themselves, however, it will be necessary to settle the lawsuit. Mid-Corridor construction is not scheduled to begin for a few years. The cities have indicated throughout negotiations with the ports that they strongly support the Alameda Corridor, but are concerned about the local impacts of the multi-year construction process. The monetary settlement that has been discussed between the cities and the ports constitutes a small fraction of the total project cost, and would not inhibit ACTA's ability to finance construction. alameda corridor bonds Mr. Wolf. A bond rating agency has informed the GAO that the project's bonds would likely be investment grade, but the agency cited several factors that could affect the project's ability to secure the $711 million needed in bond sales. Current risk factors include the capacity of the prime contractors to complete a complex construction project within the estimated costs; the potential of revenue diversion of funds from the ports to the cities of Los Angeles and Long Beach; and the increasing potential for further litigation by cities along the corridor. How concerned is the Department about the ports' bond ratings and their ability to get the additional $711 million in bond sales? Ms. Garvey. We have had some informal conversations with the bond counsel. They have said repeatedly that many of these issues are not unusual--in this stage of the project's life, I think, having the contract in place within the next week will outline some of the construction cost issues. In terms of the revenue diversion, we think that we have a rate covenant provision within the law that gives us protection on that issue. So I guess I would say that these are legitimate issues and we certainly have to watch them, but in talking with bond counsel this is not unusual at this point of the project. We will continue to monitor that. Mr. Wolf. Should this project be reviewed by the GAO and IG, much like BART, the Central Artery, and others, since it is the first project of its kind, and such a large financial commitment by the Federal government. It is not that I suspect there is any problem, but since the Department is predicating other loan programs, using this as an example and hailing it as an opportunity, I wonder if the IG and the GAO, working with your people, keep a watchful eye on this project? Ms. Garvey. That is a good suggestion. We should--we will follow up with both the IG and GAO. Just parenthetically, the IG has been exceedingly helpful in Massachusetts, literally on a daily basis, in our division office working with people side by side, anticipating potential problems. And I could see a similar situation here. We will follow up with the IG and with GAO. Mr. Wolf. I think we are going to ask them to do the same thing on the L.A. Metro and on the San Francisco BART project. I think these--and I wonder, the I-15 project up in Utah, what about that? Ms. Garvey. Just quickly, are you trying to---- Mr. Wolf. I just wonder, should that also be--that is over a billion dollars, isn't it? Ms. Garvey. Yes. Mr. Wolf. You know, I just want to let the record show I am not opposed to any of the projects. It is just that these are very large problems that have the potential to have significant problems. Then something happens and then people say why didn't somebody see it coming. I just wonder if that is not---- Mr. Kane. On all of them we learn practices that help on other big projects. utah I-15 project Mr. Wolf. Yes. Why don't you tell us a little bit about the Utah project. I have some questions on it a little bit later that maybe won't have to be asked. What were you going to tell me? Ms. Garvey. Well, one, I think that is wonderful is that we have a finance plan. Remember you raised that issue last year during our hearing. And this is really the first project that follows the policy determination that we would require a finance plan. Mr. Wolf. How much--that is over a billion, $1.2 billion. How much of that will be federal money? Mr. Kane. Hard to say. They are planning in the contingency that there is no Federal money to have state resources for it. They have just had a gas tax increase and other revenue increases, so they will be potentially looking at maybe using future federal aid apportionments, maybe not. They have also, because of the impact of reconstructing that facility as well as others in Utah, have been thinking of potential for a special project fund, which we are not, you know. But in light of the Olympics in 2002, they have been requesting possible special aid there, so it is very uncertain as to how much we would be involved with them on. But they have the potential to fund it entirely on their own. Mr. Wolf. Good. Mr. Kane. But at the same time we will still be following closely with them doing all the rules we normally would in the potential that there would be federal aid involved in the project. We had federal aid involved in the early planning work, but the amount is uncertain. But we will still have a financial plan required from them and will follow closely on the project. alameda corridor loan agreement Mr. Wolf. Back to the Alameda Corridor, last year the Administration and project sponsors suggested it would not cost the government anything in the long run, the program was alone. At the same time it was suggested that the federal loan was needed to improve the project's credit rating by both decreasing the revenue bonds needed and as a general sign of federal commitment to the project. Why then in the loan agreement was the federal loan repayment made junior, subordinate, to the repayment of the revenue bonds? Ms. Garvey. That is a question the Treasury Department often has asked us, as well. I think one of the advantages that the federal government can bring to projects like this is that we can afford to be a patient investor. It does not mean we should not be paid. It is not a question of whether or not we will be paid, but when we will be paid. And in this case the way that we have structured the loan with a time table with very fixed dates when payments are due. But we have given the project a little time to get started. In the early years is when the ramp up is difficult. So our first payment, I believe, is in 2002. But it allows us to be a patient investor but still get paid and still be, obviously, protected under the loan agreements, under the---- potential alameda default Mr. Wolf. When you default at the federal level, IRS is always first in line, as you know, when there is a bankruptcy. I just wonder why we have taken a subordinate position. What would the exposure be if---- Ms. Garvey. Right. Mr. Wolf. If there were a default? Should there be a default, what would it involve? Ms. Garvey. Good question. Again, according to the agreement, if there is default, we are on equal footing. Mr. Wolf. We are equal? Ms. Garvey. With the other creditors. Mr. Wolf. Okay, what would we lose if there were a default? Ms. Garvey. I wish my statement was all still there. I think it is about---- Mr. Wolf. What assets would there be? Mr. Wright. There may be a facility at least partially in place and operating that would be available for division among those---- Ms. Garvey. We can give you more information, but it is essentially the capital investment. contribution to the alameda project Mr. Wolf. Project officials have stated that the Los Angeles Metropolitan Transportation Authority's ability to meet its commitment to contribute as much as $350 million to the project is uncertain. In fact, as a result of its subway construction delays and cost overruns, a recent court order to consent decree for additional bus operations, and significantly lower than estimated tax receipts, which are to secure a bond for the corridor, MTA is currently reevaluating its existing funding commitments. Is the Department concerned about MTA's ability to participate? Ms. Garvey. We have had pretty direct communication with MTA, and they have identified two sources, either an existing sales tax or some of their future federal aid apportionment as a possibility for their share. And a decision is forthcoming from them. But we are at this point assured that they have an opportunity in one of those two areas for their participation, either the sales tax or the federal aid apportionment that goes to MTA. Mr. Wolf. It is an existing sales tax. What is that money going for now? Ms. Garvey. I am not sure, Congressman. I can get back to you, though. Alameda Bond Sales Mr. Wolf. Another issue affecting the project's ability to secure the $711 million in bond sales is its tax exempt status. What action, if any, has been taken to date to change the tax status of the bonds that the Alameda Transportation Corridor Authority plans to sell? [The information follows:] The Internal Revenue Service is considering ACTA's request for a private letter ruling seeking tax exempt status for the revenue bonds. Legislation was introduced in the prior session of Congress to amend the Internal Revenue Code to allow the project's debt to be issued tax-exempt; however, Congress did not act on that proposal. Alameda Revenue Bonds Mr. Wolf. Will the revenue bonds be fully or partially tax- exempt? How could that affect the federal government? [The information follows:] Under current law, without special legislative authority, ACTA believes that a portion of its revenue bonds could be issued as tax-exempt debt (relating to public use/public purpose). The amount of the tax-exempt debt ultimatley issued for the project should not affect the security of the Federal government's investment, as the budgetary cost of the Federal loan was ``scored'' conservatively based on the assumption of all revenue bonds being taxable. Alameda Financing Plan Mr. Wolf. How much of the corridor's financing is based on federal funding, including both direct and indirect federal funds, both with and without the federal loan? [The information follows:] The $2 billion project is a public-private venture among the ports and cities of Los Angeles and Long Beach, the regional transportation authority, the railroads using the corridor, and the Federal government. Direct Federal contributions to the project include $45 million in ISTEA demonstration funds (USDOT), $2 million in Economic Development Administration funds (Commerce), and the $400 million direct Federal loan. Thus, the project will receive $447 million ($47 million without the Federal loan) in direct Federal funding. In addition, the Metropolitan Transportation Authority (MTA) will provide another $329 million of apportioned Federal- aid highway funds. Total Federal funding for the project (including indirect Federal-aid highway funds passed through the Los Angeles County MTA) equals $776 million ($376 without the Federal loan). Annual Alameda Loan Needs Mr. Wolf. Based on these various programmatic considerations and other factors, how likely is it that the annual loan levels enacted last year will exceed the annual need? In other words, should the annual loan levels be revised, spread out over a longer period of time, or rescinded in part? [The information follows:] The Federal loan which was signed January 17, 1997, is a vital part of the project's financial package. The full amount of the loan--up to $400 million--has been obligated and the disbursement schedule is stipulated in the law. However, the project would benefit from a more flexible schedule that could reflect the construction program more precisely. Allowing ACTA greater discretion over when to request the funds would decrease its financing expenses without affecting the Federal Government's budgetary costs. FHWA Project Management Oversight Mr. Wolf. We will have some more for the record with regard to major projects, State of Utah, and some others. The GAO recently reported that cost management and cost containment are not a goal of FHWA's oversight nor part of its organizational culture. As a result, FHWA has few requirements that ensure that cost containment is an integral part of large- dollar highway management. At a time of scarce federal resources, is it time that FHWA rethink its role in managing the costs of large-scale highway projects? [The information follows:] The Federal-aid highway program provides financial assistance to the States for their administration of highway projects which they select, plan, design, and administer. The FHWA role has always been to assure that the standards used, the engineering details specified, the contracting and construction methods employed, and the finished product were in accordance with acceptable standards and at a reasonable cost. Benefit-cost ratios, Value Engineering, and low bids have been precepts of the Federal-aid program for many years. With the aging of Interstate highways, States are initiating some large scale reconstruction projects in urban areas costing billions of dollars, such as I-15 in Salt Lake, UT and Central Artery in Boston, MA. The FHWA required the States to develop plans for these two projects. These financial plans contain cost containment provisions and are updated at specified intervals as appropriate. As part of its reauthorization proposal, FHWA would require a financial plan for all projects estimated to cost $1,000,000,000 or more. All of these factors reflect the evolution of the nation's highway system and FHWA's role. state highway project management Mr. Wolf. What requirements does FHWA have in place to ensure that cost containment is a key part of state highway project management? [The information follows:] Several requirements are imposed on the States to contain costs or produce reductions in costs. Value Engineering has proven to be effective in reducing costs on some costs on some highway projects and has served to provide alternates to some details that are more commonly available at no increase in cost. The FHWA recently issued a regulation implementing Value Engineering programs in all States. There also is renewed emphasis in the use of Life Cycle Cost Analysis for major highway projects. The NHS Designation Act required the States to perform Life Cycle Cost Analyses on all project useable segments that are estimated to cost $25,000,000 or more. The FHWA is working closely with the States to implement these provisions and will share best practices as they are identified. Other provisions such as Partnering and Incentive/ Disincentive clauses are designed to provide opportunity for the contractors to suggest design and construction changes that will be of benefit to them and decrease the cost to the State. highway projects cost containment mechanism Mr. Wolf. Many state officials have cited value engineering as a formal cost containment mechanism, yet FHWA has never required the states to perform value engineering on highway projects that receive federal funds. Why? [The information follows:] The FHWA has for many years preferred to encourage the States to establish programs to perform Value Engineering reviews on projects rather than requiring them to do it. Training workshops and technical assistance have been effective in promoting the principles of Value Engineering, and in getting approximately 30 States to perform Value Engineering on a routine basis. The idea was that Value Engineering would be attractive enough without a formal requirement. And it is to many States. Value Engineering guidance Mr. Wolf. In 1995, Congress required that all projects on the National Highway System that have an estimated total cost of $25 million or more be subject to value engineering analysis. FHWA has not yet issued guidance to the state to implement the law. What is the delay? [The information follows:] A regulation implementing the provisions of the NHS Designation Act was published in the Federal Register on February 14, 1997 with an effective date of March 17, 1997. when Congress passed the NHS Designation Act, FHWA had already begun a rulemaking to obtain comments on a proposal to require all States to apply Value Engineering to selected Federal-aid highway projects. The review of the comments and the redrafting of the proposed requirements culminated in the publication in the Federal Register on February 14, 1997. The regulation requires Value Engineering analyses on all projects on the NHS estimated to cost $25,000,000 or more. Large Project Finance Plans Mr. Wolf. In 1995, this Committee sought to enact legislation that would have required biannual and periodic updates of the finance plan of the Central Artery project. In response, the House authorizing committee proposed language that would have required any project with costs in excess of $1 billion to submit annual financial updates. This language was later dropped in conference and not included in the National Highway Systems Designation Act. In your opinion, should this requirement be included in the reauthorization to ISTEA? [The information follows:] Yes, the Administration's reauthorization proposal, NEXTEA, contains a provision to require financial plans for any projects estimated to cost $1,000,000,000 or more. Finance Plan for Utah I-15 Project Mr. Wolf. The State of Utah is beginning to undertake improvements to I-15, the largest project ever undertaken by the state and the largest design/build project ever attempted in the United States. In July 1996, Utah DOT estimated the total project cost at $1.36 billion. Will the FHWA require the State of Utah to complete a finance plan prior to its concurrence in the contract award? [The information follows:] While there is currently no regulatory requirement to do so, FHWA requested a financial plan for the Utah I-15 design- build project as a condition of the authorization for this project. It will be completed and submitted in time for the concurrence in award. Utah I-15 Funding Mr. Wolf. While no federal funding has been committed to the I-15 project, Utah DOT is expected to seek up to 80 percent of the costs during reauthorization. Based on February 1997 estimates, this could represent almost $1 billion. What concerns does the FHWA have at this time with respect to the design/build contract and the state's ability to control costs on the I-15 project? [The information follows:] The FHWA worked with Utah DOT on the overall project oversight and special task forces during the development of the request for proposal (RFP) document. The RFP includes significant input from both FHWA and the highway industry. The joint ventures submitted price and technical proposals in January 15, 1997, and the project is on schedule for an April 14, 1997 Notice-to-Proceed. Unlike traditional design-bid-build highway construction projects, the successful design-build proposer will assume all of the responsibility for the project design when constructing the project.. The lump sum bid submitted with the price proposal will include all costs associated with the design and construction of this contract. Utah DOT included a provision for the clean-up of hazardous materials on a unit price basis to cover the possibility of on-site hazardous materials. Similarly, there are other provisions for providing incentives to the design-build proposer for both quality and timely work. The Administration's reauthorization proposal does include any special funding considerations for the reconstruction of I- 15. The Utah DOT has certified that sufficient funds will be available to construct the I-15 project without any Federal funding. In March 1997, the Utah legislature formalized their commitment to fund a ten-year transportation program, including the I-15 project, for a total amount of $2,400,000,000. While the Governor has not yet signed this funding package, he is expected to do so in the near future. In sum, the design-build procurement method is intended to provide a quality construction project with minimal cost increases, and the financial plan submitted by Utah DOT shows that sufficient funds will be available to construct the I-15 design-build project. Based on the efforts thus far, the FHWA believes that the design-build contract is the appropriate mechanism for reconstructing I-15 and is confident in the Utah DOT's ability to control cost on the project within the framework of this mechanism. utah i-15 financing Mr. Wolf. The Utah state legislature plans to complete its session by the middle of March, with one of the actions being a financing plan for its overall transportation program. Will the financing sources for the I-15 project be clearly defined and locked in (private sector financing is one option, for example) such that FHWA can concur in the award of the design/build contract by the end of March? [The information follows:] Yes, as already noted, the project is on schedule for an April 14, 1997 Notice-to-Proceed. highway project financial plans Mr. Wolf. I believe the FHWA has the administrative authority to require periodic updates of finance plans on major highway projects. Other than the Central Artery project (and the I-15 project, perhaps), what projects has the FHWA required the submission of periodic finance plans? [The information follows:] Recently, the Central Artery and I-15 are the only two projects for which FHWA has requested a financial plan. The FHWA has requested these financial plans under the authority of existing regulations. Specifically, 23 CFR 1.5 states that ``At the request of the Administrator, the State Highway Department shall furnish to him such information as the Administrator shall deem desirable in administering the Federal-aid highway program.'' The FHWA believes that the submission of a financial plan with periodic updates is a reasonable requirement for all mega-projects. The Administration's reauthorization proposal would require a financial plan for any project with an estimated total cost of $1,000,000,000 or more. highway projects oversight Mr. Wolf. What factors does FHWA consider to determine the appropriate level of federal involvement and oversight on highway projects? [The information follows:] Before the ISTEA was passed, Certification Acceptance and the Secondary Road Plan provided the only alternative methods of discharging FHWA's responsibilities under Title 23. The ISTEA provided Special Rules for 3R projects on the NHS whereby the State could certify on a project by project basis that all the work would meet or exceed the applicable standards. In addition, it provided that FHWA would not be involved in the Title 23 requirements on non-NHS projects with estimated cost less than $1,000,000. These provisions presented the first factors for FHWA to consider in deciding what level of oversight to provide. The FHWA proposes, as part of the reauthorization legislation, to provide for the State and FHWA to mutually agree on the level and extent of oversight on NHS projects. The factors to be considered could include project cost and complexity, workload, resources available, and other factors, based on an assessment of the State's and FHWA's experience. Non-NHS projects would be administered under State rules without routine FHWA oversight. When determining the appropriate level of Federal involvement and oversight, the FHWA considers the scale and complexity of the project in terms of its cost and potential use Federal-aid highway funds, importance to interstate travel, and possible environmental consequence. highway projects cost containment Mr. Wolf. The Vice President's National Performance Review in 1993 identified widespread concern about the need for the federal government to better manage the planning, budgeting, and acquisition of fixed assets. The Government Performance and Results Act generally required that federal agencies target resources and develop specific, measurable goals and plans to achieve them. The Office of Management and Budget requires cost containment practices when federal agencies acquire large- dollar capital assets such as buildings, equipment, and information systems. Aren't these requirements an appropriate mode for management of large-dollar highway projects, notwithstanding the fact that the federal-aid highway program is a federally assisted state program? [The information follows:] Because the Federal-aid highway program is one of Federal financial assistance to the States, there is not the same financial risk to the Federal government for project increases as there would be for Federal procurement. Also, the fact that the Federal share is only part of the project cost tends to make the States more cost conscious. Based on recent experience with several large projects, FHWA included in its reauthorization proposal a requirement that State prepare a financial plan for all projects estimated to cost $1,000,000,000 or more. The FHWA will work closely with the States to make the financial plans viable and effective. utah i-15 project funding Mr. Wolf. The staff indicates here that they were under the impression that Utah expected to have 80 percent of the cost included in the reauthorization for the I-15. Does that run a little bit different than what you said? Mr. Kane. One finance plan assumed that they would be trying to seek up to a half a billion dollars in special project funds, but they have state resources to fund it in the absence of getting anything in terms of special project funding and reauthorization. And whether or not they dedicate or pledge any of their future federal aid apportionments is also an open question, but as I mentioned before, they have full state resources to go behind it, both dedicated new gas tax revenues, as well as increased bond revenues that are coming into the state. So it is unclear how much they would use. fhwa oversight on highway projects Mr. Wolf. How much should the Federal Highway be involved in oversight on the highway projects? What do you consider your involvement to be? Ms. Garvey. Well, first of all the finance plan is the first sense of that involvement. We have worked very closely with them through the---- Mr. Wolf. Well, not--no, no, just---- Ms. Garvey. Oh, I am sorry, just generally? Mr. Wolf. Yes, in general. Ms. Garvey. I think we should be a full partner with them. This is a very big project. I think the kind of oversight that we have had in place---- Mr. Wolf. But is there a point where your oversight should be required there be some standards where the Federal Highway Administration---- Mr. Kane. Well, on all projects when it comes to issues like civil rights laws, non-Title 23 laws, environmental laws, we are involved, clearly. On the engineering side, ISTEA started a new way of doing business where without going into the real details it was mainly focusing the federal resources in terms of reviewing plan specifications and estimates, engineering kind of issues, on the National Highway System, and projects that are off the National Highway System to rely on state resources and procedures. That is the direction that we are clearly heading in because of continuing program growth, as well as, agency size not expanding. So I think our real focus from an engineering perspective is on the National Highway System. And there ISTEA gave us some rules on low-cost projects, under a million, for simple rehabilitation projects where states could opt out of our engineering oversight. So in simple terms it has been a history now, since ISTEA, of NHS having our engineering involved in projects over a million dollars, which are--it is a much lower dollar threshold, but it is the system, it is the National Highway System. Our involvement off of the NHS is one very much of worrying about state processes being good in terms of their contracting techniques. Technical assistance, we will give them with regard to everything from standards to construction practices. So I think that is a fair place for us to be involved, and it is at a lower level in terms of the National Highway System dollar threshold. As Jane mentioned on the financial side, we have established the billion dollar threshold for very strong financial plans that continue to be done. But on virtually all major projects on the National Highway System we would have a close engineering involvement. Ms. Garvey. This project has a particular interest to us, too, because of the design/build. And it is the largest design/ build project that we have underway. And it is one of our design/build innovative contracting examples that we are looking at. So we are watching it very carefully, even just for those reasons in addition to the ones that Tony has mentioned. bid rigging Mr. Wolf. Speaking of federal involvement, where are you now on bid rigging? If you recall, we went through that quite extensively a couple years ago. I have seen nothing in the paper about it anymore. Are you active in that now? Mr. Kane. Oh, yes. We are still on any projects that have federal money involved in it have a debarring function when there is problems with contractors. Mr. Wolf. How many people have been debarred in the last year? Mr. Kane. It is probably--we can give you the exact numbers. It is probably under a dozen. Mr. Wolf. So there is no bid rigging going on anymore? Mr. Kane. I won't say that. What has happened is that the states have been very aggressive about it. In fact, several years back when--I am going to go back a dozen years when there was really a strong finding of it. Lots of good analytical tools were developed. Mr. Wolf. When was that, in the early 80s? Mr. Kane. Yes, and the states got very concerned, obviously, and we did as well. And they developed very neat software called BAMS, bid analysis techniques of looking at all the bids that came in. Mr. Wolf. Are they all using that? Mr. Kane. They are all using it now. Mr. Wolf. Every state, all 50? Mr. Kane. Yes, and it has really helped in terms of assessing bids, analyzing, and finding where there would be problems. Mr. Wolf. These things go in cycles, it seems. And if it was in the early 80s, we are into the mid 90s now. With all the federal money I just wonder if there is something going on. But you are confident the bid rigging issue is---- Mr. Kane. Well, I am pretty confident when---- Mr. Wolf. I haven't seen a story---- Mr. Kane. When issues get raised, we are on top of it. Our IG is also active in there as well. Mr. Wolf. Your IG is not as active as---- Mr. Kane. The FBI will get involved in it as well, which is a Department of Justice function--at least with regard to any of the efforts that have federal aid in it. But we can give you the historical pattern and what has happened in the last couple years. Mr. Wolf. You don't believe there is any major bid rigging going on now in any particular state? Mr. Kane. I hope--not that I know of. I hope not. woodrow wilson bridge Mr. Wolf. Estimates to replace the Woodrow Wilson Bridge with a new twelve-lane span total some $1.6 billion. Last year, you informed the Committee that the federal government's contribution would be about $400 million. Has the federal level of participation changed over the past year? [The information follows:] No. The federal level of participation that has been recommended in the past remains the same. Woodrow Wilson Bridge Federal Contribution Mr. Wolf. How was the figure of $400 million arrived at? [The information follows:] The NHS Designation Act of 1995 Section 407(c)(2)(b) specifies that the minimum Federal share of project costs will be 100 percent of (1) the cost of continuing rehabilitation of the existing bridge until the replacement facility is constructed and operational, (2) the cost of replacing the bridge with a comparable modern bridge designed according to current engineering standards, and (3) the cost of planning, preliminary engineering and design, environmental studies and documentation, and final engineering for the project. The sum of these costs and, thus the total minimum Federal share as defined by the NHS Designation Act, is $400,000,000: Federal Share of Project Costs Total cost (1997 dollars) Cost Item: Continuing Rehabilitation........................... $10,000,000 Comparable Replacement Facility..................... 329,000,000 Final Engineering Design............................ 61,000,000 -------------------------------------------------------- ____________________________________________________ Total............................................. 400,000,000 Woodrow Wilson Bridge Cost Difference Mr. Wolf. How does the FHWA expect to make up the $1.2 billion difference? [The information follows:] The FHWA expects that the difference would be made up through a mix of sources--a portion financed with long-term tax-exempt, debt backed by user or other special fees, and a portion from the States which could include allocations of some part of their annual apportionments of Federal-aid highway funds. Woodrow Wilson Bridge Tolls Mr. Wolf. It occurs to me that if the Woodrow Wilson Bridge project is a candidate for the new transportation infrastructure credit program, the Department is presuming the use of tolls on the bridge. At this time, based on the preliminary engineering and other design work conducted to date, what level of toll would be required? [The information follows:] The FHWA has developed a financial model to explore different funding alternatives for the Woodrow Wilson Bridge Project. The model is based on a toll-supported facility consisting of a ten-lane (expandable to 12 lane with HOV), 70- foot twin drawbridge, plus two interchanges with major highways on each side of the Potomac River. The model is designed to evaluate the impact on toll rates of varying numerous assumptions, including construction costs and drawdown schedule, traffic volume and mix, and contributed capital levels from the Federal and State governments. If the Federal share would consist of a grant in the amount of the replacement cost of the existing span (approximately $400,000,000), and the balance of construction costs would be funded from the proceeds of long-term tax-exempt senior project bonds, a $2.25 toll (one-way) would need to be charged to meet debt service requirements. This analysis assumes no Federal loan. However, if Federal Credit Enhancement facilitates the project's access to junior-lien financing, the toll could be reduced by up to $.50. woodrow wilson bridge financial analysis Mr. Wolf. I believe that more than 80 percent of the traffic on the Woodrow Wilson Bridge are local drivers. This may well limit the ability to provide a break in a toll for local drivers. In the course of your financial analysis, what considerations were given to charge a lower rate to regional drivers and a premium to non-local drivers? [The information follows:] Although it would be technically feasible to provide reduced tolls for local travelers, most likely it would not be practical due to the high volume of local traffic using the facility. While initially the bridge was planned as a part of bypass around Washington D.C., today it serves as a primary means for hundreds of thousands of area residents to get to and from work, shopping, and other regional activities. Toll levels for non-local residents would need to be set at prohibitively high levels in order the revenues forgone by reducing the fairs for local residents. High tolls for non- local residents would lead to high diversion rates. High diversion rates would lead to lost revenues and, consequently, revenue shortfalls. For these reasons, the Department did not give consideration to charging lower rates to regional drivers in its financial analysis. variable toll issues Mr. Wolf. What difficulties have other toll authorities encountered with variable or discount tolls, particularly with their ability to secure alternative financing of the projects? [The information follows:] There is very limited experience in the U.S. with variable priced toll facilities. SR 91 in California has instituted a variable toll element to its pricing structure by granting discounts to local users; however, SR 91 is different from the Woodrow Wilson Bridge in that SR 91 is located in an area with a lack of alternative routes. Numerous other facilities (e.g., the New Jersey Turnpike and Washington Area Metro System) offer frequent user discounts, which essentially amount to a fair reduction for local travelers. The structure of the facility's pricing mechanism should not have an impact on the project's ability to secure regular or alternative financing, provided the pricing structure is viable and generates sufficient revenues to meet annual debt service requirements. woodrow wilson bridge agreement Mr. Wolf. The Department was to submit by October 1, 1996, a proposed agreement between the Secretary and the Woodrow Wilson Memorial Bridge Authority which includes, among other items, the selected alternatives, implementation schedule, and costs of the project. It is now early March, over five months past the due date, and the Congress has yet to receive that report. What are the reasons for the delay and what progress has the Department made on the final environmental impact study and financial analysis? [The information follows:] In the NHS Designation Act of 1995, Congress requested that DOT submit an agreement between the Secretary (Department) and the Signatories (States) that specifies the selected alternative, implementation schedule, costs of the project, and Federal share of project costs. Due to differences of opinion between the States and the Department concerning the appropriate Federal contribution (States are seeking 100 percent Federal funding) and agreement has not been reached. The project, however, continues to move forward. It is advancing through the environmental process and into design. Other requested elements of the report (i.e., the selected alternative, implementation schedule, and total costs of the project) have been determined. The Department also has prepared a proposed transfer of ownership agreement. This information has been included in the report to Congress which is under review within the Department. woodrow wilson bridge environmental impact statement Mr. Wolf. When do you expect to finalize the environmental impact statement, the record of decision, and identify the preferred alternative for the Woodrow Wilson Bridge? [The information follows:] The FHWA believes the environmental process is nearing completion. The FHWA is in the final stages of coordination with Federal and State resource agencies and should issue the Final Environmental Impact Statement soon. A 30-day comment period is required prior to issuing the Record of Decision. Mr. Wolf. Is the Department likely to transmit any report if it is unable to reach a negotiated deal with the states of Maryland and Virginia? [The information follows:] Yes, the report is under review within the Department and should be submitted to Congress soon. Project Management Plan Mr. Wolf. When does the FHWA expect to begin its solicitations for the overall project's management consultant and for final design? [The information follows:] The FHWA and the States are completing a management plan for the project and will proceed with advertisement of the project management contract later this spring with the design contracts immediately following. Woodrow Wilson Bridge Funding Mr. Wolf. The Department has proposed $40 million under the federal-aid highway program for the Woodrow Wilson Bridge in fiscal year 1998. These funds would be withheld from distribution under the annual obligation limitation. What assumptions are you making for the out-years and what factors led you to these annual levels? [The information follows:] In addition to the $40,000,000 included for the Woodrow Wilson Bridge in FHWA's fiscal year 1998 budget request, the Administration's reauthorization proposal includes $180,000,000 annually in 1999 and 2000, totaling $400,000,000. Funding Source-Woodrow Wilson Bridge Mr. Wolf. Over the past two years, funds for the Woodrow Wilson Bridge were drawn from the administrative takedown. Why the change in fiscal year 1998? [The information follows:] The fiscal year 1998 funding has been proposed from the obligation limitation rather, than the administrative takedown because we feel that expenditures of this nature are of a program nature and are generally inconsistent with the nature of the administrative takedown. Woodrow Wilson Bridge Design/Build Mr. Wolf. Has the Department considered design/build for the Woodrow Wilson Bridge project in order to reduce costs? [The information follows:] A design-build approach may not be cost-effective because of the site constraints at this location from an environmental standpoint and potential displacement. The States have indicated that they prefer the project to be constructed in the traditional manner, and not as a design-build project. district of columbia Mr. Wolf. I understand that Mr. Tiahrt asked many of the D.C. questions, although I don't know what ones he did. Maybe you can just bring me up to speed. Where are we with regard to what you are trying to do with District of Columbia? I was out of the room then. Ms. Garvey. I will answer very quickly. There are really two efforts---- Mr. Wolf. How much have they used? Two years ago we gave them money. Ms. Garvey. Right. Mr. Wolf. How much have they been able to use? Ms. Garvey. They used about $70 million last---- Mr. Wolf. Of? Ms. Garvey. Oh, total. Do you remember, Tom, the full total? Mr. Wolf. A hundred and some. Ms. Garvey. We will have to get the full total. Mr. Ptak. They get about $90 million a year. Mr. Wolf. No, but they want back, though. Ms. Garvey. Right, the backlog. We will get the exact number. Mr. Wolf. How much--excuse me. Go ahead. Ms. Garvey. They have another $70 million that is about ready to go to projects--underway for this spring, leaving another balance, I think, of about $130 million. Mr. Wolf. How much will they lose? When is the drop dead date that they will lose some of this? Ms. Garvey. They have been very effective at obligating the money as they have gone along, so they haven't really lost any. Mr. Wolf. When is the cutoff date? Ms. Garvey. September. Right? Mr. Kane. Well, the two-year period in that special match waiver program is done. They are in the payback mode right now. Mr. Wolf. Have they been able to pay back---- Ms. Garvey. Oh, yes. Yes. Mr. Kane. Yes, there was one payment of a million dollars and then the other payments will be due September 30. Mr. Wolf. What will their total payment be? Mr. Kane. About $10 million overall. Mr. Wolf. And when will that be due? Mr. Kane. This September 30 and subsequent September 30. Mr. Wolf. How much will be due this September 30? Mr. Kane. I think five, and three or four the next one. Mr. Wolf. And you are pretty confident they are---- Mr. Kane. Five and four. Yes. Ms. Garvey. Their trust fund that they have in place does cover that. Just very briefly on the President's plan, which does include a transportation piece, two goals for us in transportation. One was to revitalize the District to keep those projects going, because I think while the District has made some progress, it is really not enough. It may not be enough. The second is to maintain that partnership. We worked very closely with the District providing technical assistance. And what the President's plan is suggesting is the establishment of a governing board with a five-board membership that would select the projects from the National Highway System. This board would take on the responsibility of establishing the priorities for within the National Highway System, much as a state does. Mr. Wolf. Who would appoint the board? Ms. Garvey. There would be one appointed by the mayor, one by the city council, one by the finance board, one from the Secretary of Transportation and one from the economic corporation, which is something that the President---- Mr. Wolf. And they would be the state---- Ms. Garvey. They would---- Mr. Wolf. The highway---- Ms. Garvey. Yes, they would act as the state--very similar to a highway commission, Mr. Chairman. And the implementation of their priorities and the implementation of the projects that they would lay out would be the responsibility of the Federal Highway Administration, either our Federal Land Office or our Division Office. We would use the existing staff that we have to implement the program. We would not be, obviously, selecting the projects. We really would become the contract managers, if you will. And the rationale is that this would free up the District to focus on the local streets, much as city---- Mr. Wolf. A city. Ms. Garvey [continuing]. Does in other areas. Mr. Wolf. So of all the money that they got during that two-year period, they didn't lose anything, is that accurate? They were able to use every penny of it? Ms. Garvey. With a lot of help, or will be able to use it before the end of this year. Mr. Kane. Two different things. One is during that two-year time period they certainly used all the obligation authority that they had. And because apportionments have multi-year time period, there was no loss of funds. And the way that time clock worked, the match waiver was only during that two-year period, so projects that were started but payments didn't come due from contractors, they reverted back to having to have the match. So that our match waiver only covered the part of those projects that were initiated and had actually come to bills due. That is why the payback is only $10 million, whereas a traditional 20 percent match of, let us say, $100 million program in one full year would have sounded more like $20 million a year that should have been paid back. But it was the way that bill was written. It was just on projects that were let during that two-year period and then only for where expenditures were incurred. So if you kind of follow what I am saying, the contracts get started but you have only bills come due a limited amount in the initial period. Mr. Wolf. Okay. Mr. Kane. So nothing was lost. Projects were started. 14th street bridge Mr. Wolf. There is one project that I have had an interest in. If you all could look at it. The Federal Highway Administration was very, very helpful to us a number of years ago. We came up with the idea of adding an additional lane onto the Teddy Roosevelt Bridge, which really made a big difference, and your people helped design it. If it hadn't been for your people, it wouldn't have been there. And that removable lane, if that man doesn't show up in the morning to move that lane, the whole traffic just backs up. We are trying to get the District involved in cooperation with the State of Virginia-- and Governor Allen is interested and Tom Farlay is interested in it--in adding a new lane to the 14th StreetBridge. If you added one additional lane to the bridge, the flow would be for those coming from Alexandria up--if you come on the Parkway, you would have a dedicated lane. But right now I don't know where you all live, but if you lived in Virginia and you came down the GW Parkway and you come to the hump of where the humpback is, you go under the 14th Street Bridge and come up. There is a merge there where you stop. You just keep merging. It doesn't work well on rush hour, but on non-rush hour it is very dangerous, because these trucks and cars are rolling coming from the south and you take your chance to get in. It has been going on now for over two years. You know, we went out. They looked at first they said, they weren't sure. Then they went out and looked at it again. It seems that there has been a bit of inactivity. If somebody from the Federal Highway Administration could look at it, I think it would be good for the region. I think it would be good for the District of Columbia. I think the easier it is to get into the District and then out, the more people are going to want to relocate in the District of Columbia. I have never been a member of Congress who has tried to move agencies out of the District of Columbia. One, I don't think we should be moving people if their kids are in schools, but secondly I want the District to be a strong, strong place. But that is--and then that backup extends sometimes into Fairfax County. If somebody could look at that and see if we could get everybody together to resolve it, because your people told me it is doable. We have just got to get the District and everybody---- Mr. Kane. I know the VDOT has a very comprehensive corridor study underway right now, a consultant effort. They have some preliminary results that are supposed to be coming in shortly. We will sit down with them, take a look at what options they have come up with in their analysis, certainly. Mr. Wolf. If you could, and see what we can get. appalachian regional highway development Your budget contains $200 million in fiscal year '98, and $2.1 billion over the next six years for Appalachian Regional Highway development. How will these funds be distributed? Will they simply be a pass-through through the Federal Highway Administration to the Appalachian Regional Commission? Mr. Kane. We would be getting priorities and assessments of conditions from the Appalachian Regional Commission, but we wouldn't have to pass it through them. In effect, we would work with them on what priorities are and we would directly, then, deal with the states on those projects. And one hope with doing it this way would be to--in the past the dollar levels have been up and down each year and it has been a combination of both special language in appropriation acts, general funds, some contract authority funds. And we would hope that we would be able to have more of a long-range plan, just with contract authority funds without funds out of the general fund. So we would be working with priorities with the regional commission and then go directly to the states with the projects. appalachian regional commission Mr. Wolf. We understand that Federal Highway and ARC are currently updating the 1992 cost estimate to complete the Appalachian development highway system. The last update concluded that 891 miles had yet to be completed at a cost of 9.2 billion. How have these estimates changed over the past five years? Ms. Garvey. They actually were in the midst of doing another cost estimate, which is due May 1. So we will have on May 1 more accurate information and we will forward that to you at that time. Mr. Wolf. As of July '96, there remained unobligated more than a half a billion dollars in federal funds for the Appalachian Highway development. What accounts for this balance and why are these funds not being spent? Ms. Garvey. I believe all of those funds will be spent. Tony, have this broken down state by state. Mr. Kane. We do have the breakdown by project and by state. Some of the environmental process, in terms of timing of getting them, our indications are that it all will move, but a number of them are tied up in environmental stages. We can supply the information for the committee, if you would like, the detail by project on those. Mr. Wolf. Please. Mr. Kane. Okay. corridor H Mr. Wolf. I come from a region that is impacted by Corridor H, and there has been a change of sentiment in some of the regions with respect to these roads. I just wonder, has anyone gone back to look? Just because Congress 30 years ago or 20 ago says something should be done--I mean, many of you have probably changed the color of your house, your drapes, your couch or your style. Should we go back and look at some of these roads to see if they are still needed or desired? For example Corridor H, I think, frankly, you would be better off having a parkway. One, it would be less expensive. Two, it would have less the environmental impacts. And three, it would serve the needs of the people that need a road. Have we ever gone back to look at some of these items again or do we just proceed because somebody planned them 20 years ago? Mr. Kane. We--go ahead. Ms. Garvey. I was just going to say I do think the environmental process does give you that opportunity, does give us that opportunity. Mr. Wolf. But of course there was an individual fired because he got across the breakers with another individual that was a former member of Congress, who the Clinton Administration jettisoned because he said things that certain people didn't like. So the process isn't always perfect. Ms. Garvey. It is not always perfect. Mr. Wolf. In fairness, I don't want to go tell another state what they ought to do, but since Corridor H does directly enter into the area that I represent, I just wonder if it wouldn't be better to build a parkway, rather than a 4-lane highway for Corridor H? You would still meet the transportation needs of the people that lived in the region, but it could be less costly and environmentally invasive. appalachian highway development In addition to the federal-aid highway set-aside, is the Administration seeking other federal funds for Appalachian highway development, and if so, in what amount and are they to be derived from the highway trust fund? Mr. Kane. There is one anomaly in '98 of $90 million out of the general fund, and from then on solely from the Trust Fund-- and I must say I can't explain why the anomaly. Mr. Wright. Essentially, Mr. Chairman, it was an attempt to transition to a new approach. We are proposing contract authority for the first time for this program, so the ARC has continued to carry $90 million in its budget for 1998.Beginning in 1999, the Administration proposes that the full funding for the program be derived from contract authority from the highway trust fund. Mr. Wolf. Okay, well, there was $30 million in the 1997 omnibus appropriations bill. What has happened to that money? What projects did it go to? Mr. Kane. Two allocations have been made so far, $20 million towards Corridor D in West Virginia and $3.7 million for Corridor V in Alabama. Mr. Wolf. Tell me again. Mr. Kane. $3.7 million for Corridor V in Alabama. Mr. Wolf. Alabama. And how much in---- Mr. Kane. And $20 million, Corridor D in West Virginia. Mr. Wolf. $20 million in West Virginia and three in--any for Kentucky? Mr. Kane. Well, potentially Kentucky and Pennsylvania will be the next---- Mr. Wolf. Well, there is not a lot left if it is $20 million and---- Mr. Kane. That is right. Mr. Wolf. How did you determine that West Virginia got $20 million, flip of a coin? Ms. Garvey. I was going to ask Dr. Martinez to answer that. seat belt usage rates Mr. Wolf. We will go to Dr. Martinez. It is 86 percent in New Mexico and a low of 40 percent in North Dakota. Can you just update us on what the ranges are? Mr. Martinez. It is actually 87 percent in California. Mr. Wolf. 87? Mr. Martinez. Right, to a low of---- Mr. Wolf. So are they the highest now? Mr. Martinez. They are the highest, yes, sir. And they have a primary seat belt law and a very good enforcement campaign. Mr. Wolf. And the average usage is what? Mr. Martinez. 68 percent for the second year in a row. states with primary enforcement laws Mr. Wolf. And how many states have a primary law? Mr. Martinez. 11 states have a primary. One of those states has a primary, but has yet to start their enforcement campaign. States that have a primary seat belt law have an average use of 60--I am trying to think of the number myself, it is 78 percent, and then if they have enforcement it is higher. Is that correct? Mr. Hedlund. Belt use is 15 percentage points higher for primary states than for secondary. Mr. Wolf. Are trucks being covered? Mr. Martinez. Well, that is interesting. The number that States report is 68 percent. States report according to what they observe, and according to their laws. Some have passenger car only laws. Some have sport utility vehicles and light trucks also, which actually have lower seat belt use. Mr. Wolf. The states that do not have trucks covered, why? What is---- Mr. Martinez. That is how they chose to do it. Remember we have primary laws and secondary laws. Why some chose to have secondary versus primary and whether they cover front seats versus back seats differs; it is a real hodgepodge out there. There are several ways that we look at numbers for seat belt use. We look at them in what they call potentially fatal crashes. When a crash is serious enough so that a fatality can or does occur, then we look at seat belt use. That is done through our FARS data. That is about 50 percent, 50/50, 50 belted, 50 unbelted. Mr. Wolf. Are you making an effort to urge the states to cover the trucks? Mr. Martinez. Yes, we are. We actually have a very large coalition active nationally. You are seeing a lot of activity in the states for a lot of reasons, but partially because of that large coalition. Maryland is moving forward with theirs right now. D.C., as you know, is getting ready to implement one of the strongest primary seat belt laws in the country with points for failure to comply. Maryland just passed out of the Senate, yesterday with some support from Secretary Slater, who wrote a very nice letter which was read on the Senate floor to help pass it. It didn't have enough votes at the time to pass. We are actively engaged with the air bag coalition. I think we are making a lot of progress. I think this is going to be a fairly good year. I want to make sure, though, that when we do it, as Mr. Tiahrt said, that we have strong enforcement, because that makes a big difference in seat belt use. If you don't inspect it, they don't respect it. We find that to be an important case. presidential initiative on seat belt use Mr. Wolf. On January 23 the President asked the Secretary of Transportation to issue a plan that highlights ways to increase seat belt usage by March 7, 1997. NHTSA, to my understanding this is the lead agency. What is the status of that report? Mr. Martinez. That plan is moving forward quite quickly. We have asked for a little extended time because our approach is to be as inclusive as possible. Therefore, we wanted to write the report so that we had room for everyone to participate. We believe the problem is everyone's problem. We wanted to be able to move it forward to include governmental agencies also. The activities of the agencies are being reviewed internally and the report will be submitted to the President soon after that. We hope to roll it out with a lot of our partners, including governors and legislators and others that have worked with us. occupant protection grants Mr. Wolf. You propose $9 million occupant protection grant program in fiscal year '98 to encourage states to promote and strengthen occupant protection laws. How would the occupant protection program work? Mr. Martinez. We are very proud of the opportunity with NEXTEA, to be able to offer incentives to states to improve occupant protection. There are two ways that program would work. One is through passage of laws and with programs such as child seat and enforcement programs, so that states can qualify. It is an incentive program. A second way is performance based. We have started working with the states. We have converted the 402 program to be performance based so that we can focus on the issues and less on the management and paperwork. The initial year of that program, we are requesting $9 million. We have created an ability for us to flex money into that program should we have a high-demand problem. We hope to grow that program over time. Meeting With Governors on Seat Belt Issues Mr. Wolf. Did you ever ask to speak to the governors conference? Mr. Martinez. Yes, we did. Because it was an election year, they were trying to limit people coming to speak to them. We have engaged them and we are talking to their transportation committees right now about trying to do additional work with them. The governors did pass a resolution supporting seat belt laws and enforcement of seat belt laws, and that was a tremendous victory for us. Mr. Wolf. I would urge you to speak to the governors conference and perhaps bring one or two individuals with you who can testify that they were saved as a result of seat belts and make the case. I think that would be helpful. Headlights on during the day, I know some states are doing it. How much of a safety factor is that? Does it help that much or what difference does it make? Mr. Martinez. There is actually a pilot program being done through Fleetwood/General Motors that where the headlights are automatically turned on. The studies that have been done on those, having headlights on, have been done in what they call northern tier areas, Northern Europe and in Canada. I was going to say Northern U.S., but they wouldn't like that too much, I am afraid. In those places it works fairly well because they have overcast skies more often. They have a low cloud cover more often because of their environment, so it has been found to be beneficial. We have not made recommendations that this be a law everywhere simply because we are still evaluating it in different states. We can find out where it works and where it works better. Mr. Wolf. Somebody said they were trying it in parts of Florida. Is that accurate? Mr. Martinez. I don't know. Mr. Bischoff. Mr. Chairman, we have a voluntary standard that manufacturers are allowed to have daytime running lights which are on all the time. That is a voluntary standard. General Motors is converting all of its vehicles to have daytime running lights. I think Volvo is doing the same thing. So wherever they sell those vehicles---- Mr. Wolf. I see. Mr. Martinez. I had to ask Mr. Hedlund what our participation in that is. Some states are looking at it. For example, if you have to turn your windshield wipers on, you turn your lights on, too, so it is assumed that it is going to be beneficial for the cloud cover. Mr. Wolf. They would be on the same switch, then, is that right? Mr. Martinez. Well, no, that would be voluntary for laws. We have not looked at that for regulation. You were talking about people using daytime running lights. I am not aware of any states doing that right now. There has been some discussion about when you have to use your windshield wipers for rain or something like that, the lights would turn on. All of this has raised the issue for us--what works and what doesn't work. We are looking at and studying this fleet that is going out into the marketplace. Primary Seat Belt Law States Mr. Wolf. During last year's hearing, NHTSA testified that there were a few states that were currently considering primary seat belt laws. Did any states switch from a secondary to a primary seat belt law in the last year? [The information follows:] Georgia changed to primary enforcement effective July 1, 1996, and the District of Columbia is changing on April 30, 1997. The District's law will also be the first belt use law in the United States to assess ``drivers points'' for a violation. In addition, both the Maryland House and Senate have passed bills to enact a primary enforcement provision. Final action on the bills is still pending. However, if enacted as currently written, it is believed that the provision would become effective in Maryland on October 1, 1997. Mr. Wolf. There are three states with belt use laws that still do not cover the occupants of light trucks--Georgia, Indiana, and Missouri. What efforts is NHTSA undertaking to change these states belt usage laws to include occupants of light trucks? [The information follows:] Missouri's legislature is currently reviewing a proposal to extend their seat belt law to include light trucks. NHTSA continues to encourage States to upgrade their seat belt use laws and extend coverage to light trucks. This is provided to the states through both general and specific information and technical support. The importance of increasing occupant protection for all vehicle occupants in seating positions of every vehicle is a major theme in NHTSA's education and outreach materials. These materials include a draft model belt use law which has been used extensively with interested states, safety organizations, and coalitions. When requested, NHTSA provides specific information and technical support, such as cost savings estimations, focusing attention on the contribution of light trucks to crash experience. Included in the Department's NEXTEA proposed reauthorization legislation is a incentive grant program designed to stimulate increased safety belt and child safety seat use. Included in the qualifying criteria for basic and supplemental grants are safety belt use requirements for all passenger motor vehicles and a prohibition against riding in an open bed of a pick-up truck. nationwide belt use survey Mr. Wolf. In the 1997 Appropriations Act, Congress provided funding for NHTSA to conduct another nationwide belt use survey. Has this survey been completed? If so, what are the results? [The information follows:] Data collection for the 1996 National Occupant Protection Use Survey (NOPUS) was conducted from October through December 1996. NOPUS consists of four parts: (1) A Moving Traffic Survey for estimates on overall shoulder belt use, (2) a Controlled Intersection Survey which provides for estimates of shoulder belt use by vehicle type, characteristics of shoulder belt users, and child restraint use, (3) a Shopping Center Survey which provides estimates of rear-seat belt use and shoulder belt misuse, and (4) an Occupancy Count Survey which estimates the average number of occupants for specific vehicle type. Data collection for all four surveys is complete and data are being tabulated. Currently, results for the Moving Traffic Survey are available and summary results are shown in the tables below. Results from the remaining surveys will be made available as they are completed. NATIONAL OCCUPANT PROTECTION USE SURVEY SHOULDER BELT USE BY VEHICLE TYPE, OCCUPANT TYPE AND YEAR [In percent] ------------------------------------------------------------------------ 1996 1994 ------------------------------------------------------------------------ Overall: All \1\........................................... 61.3 58.0 Drivers........................................... 62.2 59.1 Passenger Cars: All............................................... 64.4 62.8 Drivers........................................... 65.1 64.2 Light Trucks, Vans, and Utility Vehicles: All............................................... 56.4 50.2 Drivers........................................... 57.5 50.7 ------------------------------------------------------------------------ \1\ All: Front Seat Outboard Passengers and Drivers. Mr. Wolf. If the nationwide survey has not been completed, when is it planned and how many communities will be monitored? [The information follows:] The next National Occupant Protection Use Survey (NOPUS) is scheduled for the fall of 1998 and will be conducted at approximately 4,000 randomly selected sites in 60 geographic areas across the country. After the results of the 1996 NOPUS have been completed, NHTSA will begin preparing for the 1998 survey. This involves the selection of the sites, preparing the materials for training and data collection, and the training of the data collectors. Mr. Wolf. What efforts will NHTSA be undertaking as a result of recommendations included in this plan? [The information follows:] The President's plan to increase seat belt use nationwide, submitted to President Clinton by Secretary Slater on April 16, 1997, presents new national goals for seat belt and child safety seat use and a national strategy to reach these ambitious goals. As part of the national strategy, NHTSA will: (1) build public-private partnerships; (2) provide information and technical assistance to states in enacting effective seat belt and child safety seat legislation; (3) provide financial support and assistance for increased high visibility enforcement; and, (4) encourage well-coordinated and effective public education. The combination of these four elements have proven to be extremely effective in increasing seat belt use in states which have adopted primary (standard) seat belt legislation. Mr. Wolf. How many of these recommendations are new initiatives instead of on-going efforts? [The information follows:] The President's plan to increase seat belt use nationwide, submitted to President Clinton by Secretary Slater on April 16, 1997, combines many of the highly effective on-going activities and initiatives with new initiatives planned for FY 1998 and beyond. In addition to current activities such as the Special Traffic Enforcement Programs (STEP) and public education, the plan recommends new roles for everyone to participate in achieving the goals. As part of this new public-private partnership, the plan offers specific actions for many groups and individuals including the President, Congress, federal agencies, states, national organizations and coalitions, business, media, sports organizations, health care professionals, prosecutors and judges, and educators. The plan also recommends two additional initiatives that will dramatically increase seat belt use and reduce motor vehicle deaths, injuries and related costs. The first is a new Executive Order, signed by President Clinton on April 16, 1997, which requires all Federal employees to wear seat belts while riding in a motor vehicle while on duty. The Executive Order also establishes criteria for the establishment of seat belt policies on Department of Defense installations and national parks, and encourages all recipients of Federal funds to adopt on-the-job seat belt policies. The second new initiative, included in the Department's reauthorization proposal, provides incentive grants for states who pass primary legislation, eliminate gaps in their child passenger safety legislation or meet the President's seat belt use goals. occupant protection incentive grants Mr. Wolf. How many states do you expect to qualify for occupant protection grants in 1998? [The information follows:] NHTSA estimates that 13 states may qualify for the new occupant protection incentive grants in 1998, based on the criteria proposed in NEXTEA. Mr. Wolf. Do you expect the number of states participating in this program to increase rapidly? [The information follows:] Yes, the agency anticipates that the number of states eligible for occupant protection grants will increase rapidly. Just as in the Section 410 incentive grant program, where the number of qualifying states, including DC, rose from 19 in FY 1992 to 32 in FY 1996, NHTSA expects the incentives offered will spur states to implement the laws and programs needed to meet grant criteria. In addition, participation in this program will be accelerated as a result of the Presidential initiative to increase safety belt use rates nationwide. Mr. Martinez. Just for what it is worth, I actually drive with my lights on, because when I drove an ambulance years ago we always had our lights on. We were taught to put our lights on. Mr. Wolf. Buses do, too, don't they? Mr. Martinez. Motorcycles do also. It actually increases visibility. For motorcycles it is automatic. alcohol-related fatalities Mr. Wolf. In 1995 the number of alcohol-related fatalities increased sharply to 17,274 from 16,580 in 1994. Why do you think that is taking place? Mr. Martinez. Well, we see a large decrease of 24 percent since 1985. That decade it went down. Last year it went up for the first time. It continued to go down for youth. Mr. Wolf. What was it up last year, then? Mr. Martinez. Last year it was up four percent. Mr. Recht. 1995. Mr. Martinez. Right. Mr. Wolf. So 1995 was the figure that I read. Mr. Martinez. Right, you are correct. I said 1985 through 1995. In 1995 it went up four percent. Mr. Wolf. Okay, but last year, do we have any indication? Mr. Martinez. Early numbers, I think, are about level. We have our early numbers. Mr. Wolf. About the 17 or the 16? About the '95 level? Mr. Martinez. About the '95 level. Mr. Wolf. The '95 level. Why are fatalities increasing? I mean---- Mr. Martinez. Well, the good news is it is not teenagers. It is the 21 through 35 age group that we still have trouble with. That is a very hard to reach group. One reason why you have seen us move to campaigns is to put more of a human face on it. The ones that show the videotapes are very powerful, to engage people who can influence these high risk drivers. We have also tried to expand this kind of 21 to 34 year old; one way to affect them more is to work more closely with sports. We have NCAA doing commercials for us. People recognize the Bobby Hurley commercial from the NBA. I just spoke to the NFL again last week. They actually have started to put that into their stadiums, major league baseball. The NFL did the same thing with the Superbowl this year. Mr. Wolf. Next to the beer cups that they are selling? Mr. Martinez. Well, it is interesting. I don't want to mention any particular sports, but the sporting world is also looking at the cost. First of all, they are competing with the entertainment industry now. That is what they are, so they have to make their environment more friendly and family oriented. There is actually a fairly good movement looking at things like smoking and beer and everything else. We are glad to see that. We are there. When they think about it, we are there to make them think harder about it. Mr. Recht. Actually on that, if you go to the Baltimore Stadium for a baseball game, you can get a beer in one hand and walk over to the designated driver booth on the other hand. It is actually right out in front of the food stands. They get a lot of people. They give you free Cokes if you put this little wristband on, and it is a terrific program going on right there. Mr. Martinez. Yes, the NFL actually picked it up for the Superbowl the last two years. I was going to mention to Mr. Pastor that they did it the first time in Arizona. It has been very successful. They like it. It makes it easier for them; better security issues. The San Francisco Giants said they even use less Port-O-Lets now. There are all kind of benefits to everybody. We have also put a special emphasis on youth, which I mentioned earlier to Mr. Tiahrt. We are trying to make sure that we have programs that affect youth. We are also expanding to more culturally diverse populations. And again, this is an example of getting the community involved as opposed tohaving government versus the bar owners or this and that. It makes a difference when it is community people working together for the common good. The safe communities program has been brought into the Native American environment. We have Hispanics now that we are doing outreach. There are large programs with Laraza and Cosmo and a few others. Also we have great training now for judges, prosecutors and law enforcement on effective programs and strategies. We are bringing them to work together on this issue, because it is not always the issue that you think of locally. I just met last week with the National Sheriffs Association, International Association of Chiefs of Police and others. One of the points I think is very interesting is that if crime goes up, the community holds the law enforcement agencies responsible. If drunk driving goes up or if deaths go up, no one is really held accountable. We are actually getting them to work with us more on that issue of trying to be the lead on this and have people recognize this as being a public health and public safety issue more and more. Mr. Recht. Along those lines I just had one other thing. Our statistics show that DWI arrests in this country have dropped by about 35 percent over the last four years leading into '95. We don't know what happened in '96 yet, but we think there is some correlation, perhaps, with that drop in enforcement activity. alcohol incentive grants Mr. Wolf. The rest I will just ask for the record, but just so I put them here so you know how I think they are important, your alcohol incentive grants for 1998, will they be operable? I mean, are there many more states that are asking than you---- Mr. Martinez. The short version is that we were concerned they were too low that we weren't being a disincentive. ISTEA tries to correct that and then also put the funding to that program. So yes, we think there are more states, and also additional programs, because there are supplemental grants that they can also use. Mr. Wolf. In your 1998 budget request, NHTSA is seeking an increase of $8,500,000 in the alcohol incentive grant program. Why is such a large increase necessary? [The information follows:] For years, the Section 410 alcohol incentive grant program has been very successful but under funded. For example, in FY 1996, only $25 million in grant funding was available for distribution to eligible states, however, states qualified for grants totaling $36 million. With the authorization for the current Section 410 program ending in FY 1997, the agency has proposed a new alcohol incentive grant program. While the new program is modeled on the successful Section 410 program, it puts more emphasis on encouraging states to pass tough laws such as .08 BAC, Administrative License Revocation, and graduated licensing. A significant funding increase is needed to motivate state policy makers to enact and enforce these very difficult laws. Mr. Wolf. How many states do you expect to qualify for alcohol incentive grants in fiscal year 1998? How does this compare to fiscal year 1997? [The information follows:] In NEXTEA, NHTSA has proposed a new alcohol incentive program with new criteria as a successor to the current Section 410 program. NHTSA estimates that 29 states may qualify for alcohol incentive grants in fiscal year 1998, based on the new criteria. NHTSA anticipates that 43 states will qualify for alcohol incentive grants in fiscal year 1997 under the current Section 410 program. NHTSA's past experience with the incentive grant programs leads the agency to anticipate that fewer states may qualify for grants in the first year of the new program (FY 1998)--then continue to increase thereafter as states gain experience with and begin to implement the new grant criteria. Mr. Wolf. Does NHTSA have any other new initiatives in its 1998 budget request to combat the rise in drunk driving incidents and fatalities? [The information follows:] In FY 1998 NHTSA will begin to implement the recommendations in Partners in Progress: An Impaired Driving Guide for Action, to reach the national goal of reducing alcohol-related fatalities to no more than 11,000 by the year 2005. In 1997, a national public and private sector conference will be implementing the Guide strategies, as well as an innovative two year grant program to focus on new and innovative programs and research as recommended in the Guide. NHTSA will be developing messages and initiatives that target high risk and hard-to-reach populations such as 21-34 year old males, youth (under age 21), and repeat offenders. In addition, NHTSA will be refining messages and implementing programs for culturally diverse populations, specifically Hispanics, African Americans, Native Americans, and Chinese Americans. NHTSA will continue to support effective laws-- administrative license revocation, zero tolerance for under age 21, graduated licensing systems, .08 BAC, vehicle sanctions and new 410 incentive grant criteria. Training for judges, prosecutors and law enforcement in effective enforcement strategies and sanctions with special emphasis on repeat offenders and youth will also continue. NHTSA will focus special emphasis on youth--to stop drinking and driving before it starts. Strategies will include identifying efficient methods of processing offenders, testing effective alcohol beverage control programs, and identifying more effective prevention programs. NHTSA will increase emphasis on cooperative activities with partners, media, professional sports, the 3D Prevention Month Coalition, and with health care and advocacy partners. Additionally, NHTSA will continue to build collaborative partnerships with other Federal agencies, including the Department of Justice, the Department of Education and the National Institute on Alcohol Abuse and Alcoholism and Center for Substance Abuse Prevention. Included in the Department's NEXTEA legislation is a proposed incentive grant program designed to encourage states to implement laws and programs to combat alcohol-impaired driving. The program is intended to build on the successes of the Section 410 grant program. underage drinking law Mr. Wolf. Young drivers have the highest rate of crash involvement, and many of these accidents involve alcohol. The National Highway System Designation Act of 1995 included a provision that allows supplemental federal apportionments to be withheld if states have not enacted and are not enforcing a law that considers an individual under age 21 who has a blood alcohol concentration of 0.02 percent or greater while operating a motor vehicle to be driving while intoxicated. How many states currently have this type of law in effect? [The information follows:] The legislation provides that, if a State does not meet the statutory requirements on October 1, 1998, five percent of the State's FY 1999 Federal-aid highway, National Highway System (NHS), the Surface Transportation Program (STP) and Interstate System apportionments shall be withheld on that date. If the State does not meet the statutory requirements on October 1, 1999, ten percent of its FY 2000 apportionment will be withheld. Ten percent will continue to be withheld on October 1 of each subsequent fiscal year, if the State is not in compliance. Thirty-seven States and the District of Columbia have set the BAC limit at .02 or lower for drivers under age 21. These States include: Alabama, Alaska, Arizona, Arkansas, California, Connecticut, Delaware, District of Columbia, Florida, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Utah, Virginia, Washington, and West Virginia. Delaware, Montana and Nebraska will have to amend their laws to comply with the federal criteria. The laws of Delaware, Montana and Nebraska, however, do not meet all of the Federal criteria. Accordingly, these States would have to amend their laws to avoid a withholding of funds on October 1, 1998. Mr. Wolf. What efforts is NHTSA undertaking to assure that states enact laws declaring youths under the age of 21 intoxicated if their blood alcohol level exceeds 0.02 percent while driving? [The information follows:] NHTSA is working to ensure that every state enacts a ``zero tolerance'' law, which deems youths under the age of 21 to be intoxicated if their blood alcohol level exceeds 0.02 percent while driving. The National Highway System (NHS) Designation Act, passed in November 1995, mandated that each state enact a zero tolerance law by October 1, 1998, in order to avoid withholding of certain Federal-aid highway funds. The Administrator of NHTSA has sent letters to the Governors of every state which does not have a law meeting the requirements of the NHS Act, encouraging the passage of such a law and offering assistance. NHTSA staff has been providing educational materials and technical assistance to states developing zero tolerance legislation. In addition, as an incentive, states that implement a per se law of .02 BAC for persons under age 21 may qualify for basic grants under the agency's Section 410 alcohol incentive grant program. In the Department's NEXTEA proposal, NHTSA continues to offer incentives through a supplemental grant criterion, rewarding states that have zero tolerance laws and go beyond the NHS requirement to include a minimum 30 days license suspension. youth, drugs and driving initiative Mr. Wolf. The budget contains a request for $2 million for a demonstration of a pre-license drug testing program for youth. How many have expressed an interest and what is this? Mr. Martinez. This is a relatively new program. [The information follows:] Informal inquiries to about 15 states by the American Association of Motor Vehicle Administrators indicated interest from three states and a desire for more information regarding the proposed demonstration program from several others. State interest is tempered by considerations that include questions about cost and public acceptance that may preclude their participation. No state has expressed a firm commitment to participate at this time. Mr. Recht. This is the drug testing program that the President suggested in the radio address. Mr. Wolf. How does it work? Mr. Recht. Well, it is going to be a demonstration program, with two to four states conducted it over two to three years. The intention is to just set a few parameters but then let them experiment, required that they test people 18 and younger. Perhaps they want to test other first-time applicants. Mr. Wolf. Where do you test them? Mr. Recht. Where? Mr. Wolf. School? Mr. Recht. That is an open issue. We would allow them either to test at the DMVs. Somebody might experiment saying, you have been chosen, go get a drug test within 24 hours and let them go to some private licensee. We would require they tested a minimum for marijuana, but they can experiment with the other drugs. There are all kinds of new designer drugs and the like that might be applicable. We would ask them to experiment with the sanctions they might impose. If there was a positive test, what do you do to somebody, and maybe also experiment with education and treatment. Mr. Wolf. So this is just open. You are just hoping four states will try it? Mr. Martinez. We always run at the balance, directing research where we think we have the answer, and we are going to tell you how to do it. We are trying to get from A to B and this is what we have to do. We do that a lot with our research programs in biomechanics. You are trying to build a dummy and you need the parts to be built. On the other side, you want to be able to spur innovation and creativity. That allows us to look at best practices that we can then move around. These would be along the lines of best practices where you would say here are the goals, here is what we are trying to do. We are looking for innovative ways to do this so we can get several different approaches tried and evaluated. Then we can create programs based on that. These would be basically demonstration programs. The number of programs would be between two and four depending on what the cost would be to make that program. Mr. Wolf. Are you stressing first-time people because they are younger and more---- Mr. Recht. Well, I think the motivations were that the program is intended to do two things, reduce teen drug use and reduce drunk driving. And there is a feeling that drug testing teens who are by and large the first-time applicants, this is the group you want to attack. By the way, just to fully answer your question, in fiscal year '97 it is the drug office, ONCDP, that is putting in $2 million this year. And we intend to go out with some kind of RFP. We have about three states that have informally expressed interest. Mr. Wolf. What states are they? Mr. Recht. New York, California and Louisiana so far, but once we put it out, of course, any state that wants to apply we welcome. Mr. Martinez. I want to mention too that one of the things we are trying to do is to make sure we start sending the message that driving is a privilege, and with it comes responsibilities. The idea for this particular program came from not only the President's initiative, but from our discussions with teenagers who really felt that this was the sort of thing that if they did it, it would mean putting a greater emphasis on the privilege of driving. It would become a responsibility. We thought that was an important thing to do. Mr. Wolf. If you look at the numbers with regard to teenage drug use, it is growing. And in my area, in fact, I am doing something tonight out in Loudoun County. We have had a couple of conferences. We had General McCaffrey come to the first one. But the drug use among the young people is unbelievable and many people think it is not there when it is everywhere from the inner city to the suburbs to the rural areas. And it is a very, tough issue. When I go into the high schools and just listen to the kids, the numbers that they tell you of students using drugs is unbelievable. You would be shocked. It isn't 25, 35, 45 percent. And when you add alcohol in, it is really frightening. So I think the more you do with regard to teenage alcohol use and drug use, the better. Could states be taken to court for drug testing youths prior to issuing drivers licenses without cause? If so, why would any state be willing to take this risk? [The information follows:] States have generally delegated to their licensing agencies authority to establish necessary rules and regulations to ensure that only safe drivers are licensed. Testing license applicants is a routine part of the process. For example, all states test for knowledge of the rules of the road and for visual acuity. A licensing test procedure could be considered to be unconstitutional or otherwise contrary to law if it were deemed to be discriminatory or not adequately supported by public safety or other important government interests. NHTSA and the Department of Justice believe that reducing drug- impaired driving would be considered to be a legitimate exercise of governmental authority and could adequately support a reasonably designed drug-testing program. youth driving initiative Mr. Wolf. Why is NHTSA focusing on first-time drivers when many experienced drivers may also have a problem with drug use and can avoid this licensing testing requirement? [The information follows:] NHTSA's efforts to reduce drugged driving do not focus exclusively on first-time drivers. Pre-licensure drug testing is only one component of a comprehensive proposal that includes an incentive grant program to improve state drugged driving laws; enhancement of enforcement, prosecution, and adjudication of drugged driving offenders; and expanded prevention, education and treatment for drug use and drugged driving. Pre-licensure drug testing would send an important message to the driving public that drugs and driving don't mix. It should be instituted as part of a systematic strategy to deter drug use and drugged driving. Pre-licensure testing should be combined with some form of unscheduled testing, after crashes or driving violations, in order to maximize the potential benefits. NHTSA's proposal for a pre-licensure drug testing demonstration program is designed to allow various approaches to be evaluted for their efficiency and effectiveness. States could decide to test all or some license renewal applicants if they wished. state blood alcohol laws Mr. Wolf. How many states currently have laws that make it illegal to drive with more than a specific amount of a controlled or illegal substance in the driver's body? [The information follows:] Seven states have a per se drug law that makes it illegal to drive with any amount of a controlled substance in the driver's body. All states make it illegal to drive while under the influence of drugs (all ``drugs'' in 35 states, ``controlled substances'' in the remaining states). In 45 states the ``implied consent'' law applies to drugs other than alcohol. Mr. Wolf. In addition to the budget request, is the Administration trying to establish a new incentive grant program that would encourage States to enforce their drugged driving laws? If this program were authorized in ISTEA II, when will the grant program begin and how much funding is the Administration seeking? [The information follows:] The Administration's National Economic Crossroads Transportation Efficiency Act (NEXTEA) proposes a new incentive grant program designed to encourage States to take effective actions to improve State drugged driving laws and related programs. If this program were authorized, it would begin in FY 1999. The proposed authorization level is $10 million--$5 million from the Department of Transportation and $5 million from the Office of the National Drug Control Policy. funding for the pre-licensure drug testing Mr. Wolf. It is my understanding that the Office of National Drug Control Policy will be supplementing funding for both the pre-licensure drug testing demonstration program and the incentive grant program. How much funding is the Office of National Drug Control Policy providing in fiscal year 1997, planned to provide in fiscal year 1998, and in the out-years? [The information follows:] The Office of National Drug Control Policy (ONDCP) is providing $2 million for the pre-licensure demonstraton program in fiscal year 1997 and plans to provide $4 million in both fiscal years 1999 and 2000. For the incentive grants program, ONDCP will provide $5 million in both fiscal years 1999 and 2000. Mr. Wolf. How do NHTSA and the Office of National Drug Control Policy plan to encourage states to establish pre- licensure drug testing programs? [The information follows:] We plan to encourage states to establish pre-licensure drug testing programs by funding a demonstration program, conducted by 2-4 states over two years. A successful demonstration program will provide the independent evidence necessary to convince other states to implement a pre-licensure testing program. This demonstration program would provide support to the participating states to devise and test essential core elements of pre-licensing testing. It would allow various approaches to be evaluated for their efficiency and effectiveness. Participating states would become laboratories for experimentation and innovation. Only a few essential core elements of pre-licensure testing would be specified. The demonstration states would have considerable flexibility in implementing the program. Mr. Wolf. What studies have been conducted to evaluate the effectiveness of these programs? What did these evaluations indicate? [The information follows:] No state has yet implemented a pre-licensure drug testing program. Thus, there have been no studies conducted to evaluate the effectiveness of these programs. Mr. Wolf. Has this concept been tested thoroughly so that it will encourage the states to establish these programs? [The information follows:] No; that is the purpose of the demonstration program NHTSA plans to implement. The demonstration program will provide support to the participating states to devise and test essential core elements of pre-licensing testing. It would allow various approaches to be evaluated for their efficiency and effectiveness. Participating states would become laboratories for experimentation and innovation. aggressive driving Mr. Wolf. A report recently released by the AAA Foundation shows that the number of acts of violence associated with aggressive driving continues to rise by seven percent per year since 1990. The report notes that from 1990 through 1995, aggressive driving has been the cause of 218 deaths and 12,610 injuries. However, many incidents are not reported. What does NHTSA believe an accurate aggressive driving figure (both for fatalities and injuries) may be? [The information follows:] The deaths and injuries in the AAA Foundation report include a significant proportion of incidents that were violations of the criminal code rather than the traffic code. They include offenses by vehicle occupants such as assault with a dangerous weapon--automobile, gun, knife and club. Aggressive driving is not a traffic offense, per se, in any of the states. Current enforcement efforts are directed at violations generally attributed to the aggressive driver such as changing lanes without caution, following too closely, speeding, passing on roadway shoulders, etc. For this reason, we are unable to provide specific data relating to injuries and fatalities attributable to the aggressive driver. However, about two-thirds of all fatalities are related to unlawful driving behavior usually attributed to the aggressive driver. NHTSA is in the process of examining all of the States' reckless driving statutes to determine how many contain a lesser included offense, the title of which might be changed from ``careless driving'' to aggressive driving. Based on this examination of statutes, NHTSA will develop model legislation addressing the aggressive driver and encourage states to adopt the legislation or change the title of existing applicable laws. If a specific ``aggressive driving'' violation has been established, data collection will be facilitated. Mr. Wolf. Aggressive driving has been a problem in this area within the past year. Two notable incidents come to mind. The first occurred on the George Washington Parkway, where two people were fatally injured. The second occurred on 95 South, where a three year old child was critically injured. I am pleased to see that NHTSA plans to conduct an aggressive driving enforcement demonstration project in 1998. What work on aggressive driving has the agency conducted in the past? [The information follows:] NHTSA's activities to combat aggressive driving include public information and education (PI&E), demonstration programs, and research. Recent PI&E campaigns have addressed aggressive driving behavior. Brochures were developed to give motorists tips on what to do when confronted by an aggressive driver. The NHTSA speed media campaign has been redirected, focusing on aggressive driving problems. NHTSA has also conducted aggressive driving presentations at national law enforcement meetings and events. FHWA and NHTSA have a cooperative effort on automated red- light running enforcement demonstration programs. The Office of Motor Carriers, NHTSA, and the Maryland State Police have begun a photo-radar demonstration project on the Capital Beltway. The program will target aggressive driving behaviors and speeding involving passenger cars and commercial motor vehicles. The agency has a research study underway of speeding, aggressive driving, and other unsafe driving behavior that contributes to crashes. The research will develop a relationship between specific unsafe driving acts and crash involvement for use in enforcement and public information programs. Additionally, a national attitudinal survey was started to determine why drivers speed, pass red lights, and commit other unsafe driving acts. In FY 1997, NHTSA will bring in a mid-level supervisory law enforcement officer from a state that is operating an effective aggressive driver countermeasure program. This one year NHTSA detail will allow the officer to assist in the development of an aggressive driver program and provide technical assistance to state and local law enforcement agencies. Other ongoing activities include development of a database of state statutes relating to reckless driving in order to develop model aggressive driving statutes. aggressive driving enforcement demo Mr. Wolf. Please explain to the subcommittee the scope of your aggressive driving enforcement demonstration project. [The information follows:] Based on a preliminary examination of the problem and input from the law enforcement community, NHTSA believes that aggressive driving is primarily an urban problem. This driving behavior is triggered principally by congestion and frustration. NHTSA will conduct an aggressive driving enforcement demonstration project in a major urban area to identify: effective, innovative enforcement techniques; possible applications for new enforcement technology; legislative, prosecutorial or judicial needs; and what role, if any, that alcohol and/or drugs play in the problem. Site selection will be based, in part, on a FHWA sponsored study, Urban Roadway Congestion--1982 to 1993, published in August 1996. This study would provide baseline data on pre-treatment congestion indices, annual person-hours of delay (caused by congestion), congestion related excess fuel consumption, and congestion costs. The study will greatly facilitate project evaluation. NHTSA will examine enforcement techniques that have been successful in other jurisdictions, develop some innovative enforcement approaches suited to the specific site and develop some public information materials which are site specific. In addition, an evaluation plan will be developed to measure the impact of the project on crash rates, congestion rates, lost productivity, excess fuel consumption, and costs. Successful applications will be shared with the law enforcement community throughout the country. Mr. Wolf. Do you expect any work for the demonstration project to be conducted in this area? [The information follows:] In selecting demonstration sites, preference will be given to those included in a FHWA sponsored study, Urban Roadway Congestion--1982 to 1993, published in August 1996. This study provides baseline data on pre-treatment congestion indices, annual person-hours of delay (caused by congestion), congestion related excess fuel consumption, and congestion costs. This information will greatly facilitate project evaluation. Washington, D.C. is included in the FHWA study and is a candidate for a demonstration project. If selected, the site could possibly include all of the District of Columbia and portions of Maryland and Virginia as a number of smaller jurisdictions. Variations in laws and issues of coordination and access between the different law enforcement agencies and political jurisdictions may make it difficult for a demonstration to be conducted effectively in Washington. Closing Mr. Wolf. We are supposed to have a vote at 2:45, and it is 2:45. I appreciate all of you for coming up. The hearing is adjourned. [Pages 197 - 990--The official Committee record contains additional material here.] Wednesday, March 19, 1997. FEDERAL TRANSIT ADMINISTRATION (FTA) WITNESSES GORDON J. LINTON, ADMINISTRATOR, FTA HIRAM J. WALKER, ACTING DEPUTY ADMINISTRATOR, FTA PATRICK W. REILLY, CHIEF COUNSEL, FTA JOHN W. SPENCER, DEPUTY ASSOCIATE ADMINISTRATOR FOR BUDGET AND POLICY, FTA CHARLOTTE M. ADAMS, ASSOCIATE ADMINISTRATOR FOR PLANNING, FTA EDWARD L. THOMAS, ASSOCIATE ADMINISTRATOR FOR RESEARCH, DEMONSTRATION AND INNOVATION, FTA LYNN SAHAJ, ACTING ASSOCIATE ADMINISTRATOR FOR PROGRAM MANAGEMENT, FTA WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY (WMATA) WITNESSES RICHARD WHITE, GENERAL MANAGER, WMATA PETER BENJAMIN, ASSISTANT GENERAL MANAGER FOR FINANCING AND COMPTROLLER, WMATA Mr. Wolf. Good morning. Welcome. Your full statement will appear in the record. If you could summarize it? Opening Statement Mr. Linton. Thank you very much, Mr. Chairman, and members of the Subcommittee. Let me first of all thank you for giving me the opportunity to testify before you today on behalf of our 1998 budget request. As has been the case for the last four years, I look forward to working with you and discussing the importance of the Federal role in America's public transportation system. Now, let me first introduce my staff who are with me this morning; my Acting Deputy Director, Hiram Walker, to my immediate right; Charlotte Adams, the Associate Administrator of Planning; Edward Thomas, the Associate Administrator for Research, Demonstration and Innovation; to my left, Pat Reilly, our chief counsel; John Spencer, Deputy Associate Administrator for Budget and Policy; and Lynn Sahaj, Acting Associate Administrator for Program Management. Before I get started let me also say that I am very pleased and excited to come into your new quarters and see all the pictures of transit facilities. This is really a great, bright room. So thank you. Mr. Wolf. I didn't have anything to do with it. Mr. Linton. Well, let me thank you and your staff for that. It makes those of us who have the pleasure of coming here this morning have a warm feeling. So I would like to thank you for that. istea reauthorization We in the FTA believe that ISTEA works, and that the proposal that we are putting forth builds on the success that we have had over the last several years. We recognize that transit is a critical element in our overall transportation system. The goal of every FTA program is to optimize the benefits of transit by using common sense government; government that costs less and does more. The benefits that we want to optimize include basic mobility for millions of Americans, congestion relief that eases gridlock and makes the country more productive, and the improvement of the quality of life in all of our livable neighborhoods. The Intermodal Surface Transportation Efficiency Act, which was passed in December of 1991, has been a success, and we are proud to have the opportunity to build on this legislation. But we have also been very pleased with our opportunity to work with you as partners over the life of this amazing legislation. Besides providing a record level of capital infrastructure, ISTEA empowered state and local governments by shifting decisionmaking authority and flexibility to them, enabling them to make sound investment choices. ISTEA also promoted partnerships through means as diverse as a more inclusive planning process that brought in new players and innovative financing strategies which attracted private sector resources. We are hoping to continue to build on these diverse partnerships. As you will hear later, our budget proposal and our reauthorization proposal provide for new opportunities to attract private sector resources, continuing to build on our innovative financing strategies that we have been able to use over the last several years. capital projects In 1996, FTA proposed, and you supported, language that allowed periodic bus overhauls to be counted as capital expense. In fact, in fiscal year 1997, you encouraged us to explore further changes in the definitions of capital eligibility to make eligible more maintenance costs and to place FTA's program more in line with the highway programs. So this year, under NEXTEA, we are proposing just what you asked. We are proposing that the definition of transit capital be amended to include maintenance as an eligible expense. This parallels the capital definition for Federal highway projects and makes them more consistent in their definition of capital. This would provide the means for local transit operators to make better decisions on whether to invest Federal funds to prolong the life of existing assets or to invest in newvehicles, facilities, and equipment. In addition, transit providers in urbanized areas under 200,000 in population will also be given new flexibility to use all their transit funds for any eligible transit purpose, including operating expenses. Additionally, in 1998, we are proposing that the discretionary bus and bus-related funding and fixed guideway modernization funding be rolled into the Formula Programs. This is another way in which we are fostering local decisionmaking and increased flexibility. While rail modernization funds will be distributed by the same statutory formula as it is now, it will be made available to be spent on any eligible purpose, as opposed to being limited to specific categories. ISTEA focuses on transportation's bottom line--making America a better place to live. It emphasizes consideration of how transportation investment and policy choices affect safety, quality of life, and the environment. welfare to work One of the most pressing problems today in the aftermath of the new welfare legislation is making the welfare reform work. Nationally, only six percent of those on welfare own an automobile. A person can't get a job if a person can't get to a job. In response to this problem, FTA is preparing a new initiative called Access to Jobs and Training. We recognize in the Department, as many around this country have recognized, that transit is, in fact, the ``to'' in Welfare to Work. If we are going to make a successful transition from welfare to work, we must make sure that the ``to'' of transit is involved in the process. These funds will be used to identify, plan and implement the best methods of solving local transportation problems relating to getting people off the welfare rolls and into jobs or training needed to enter the workforce. An example of one of these is our own Job Links program, which we have funded over many years. And we have seen many successful projects that have been developed as a result of the Job Links program where specialized transportation services have been put in place to connect people to jobs that would normally not have been served by the traditional transportation systems. olympics We have also learned from our recent success in the 1996 Olympics where we were able to work with many of the transit systems around the country to see that over 1,800 buses were used by the MARTA system to carry over 17 million people in 17 days during the period of the Olympic Games. This particular achievement broke all previous MARTA ridership records. And we believe that the experience that we have gained in this success will allow us to assist the mayor of Salt Lake City, and the Salt Lake City Olympic Committee, as they plan for the Salt Lake City Games in 2002. livable communities initiative One of the most heralded successes that we have had under ISTEA and that we all can feel very proud about has been our livable communities initiative. This is a project that has been embraced by the transportation industry, by mayors, by cities, by local organizations, and by all who are now beginning to actively look at how we can make sure that transit is integrated with the necessities of life and that all those necessities are within walking distance of transit stations. We believe that the livable communities initiative goes a long way to deal with many of the issues that we have to deal with over the next several years in trying to make sure that job training, day care centers, and other needs that people have are within walking distance of the transit stations that they use every single day. We have a number of examples throughout the country that we are very pleased to talk about and showcase around the country. Let me also say that the President has made it very much part of our initiative to make sure that we are, in fact, a customer-friendly organization. We are, also trying to make sure that government costs less while doing more. And we have been able to continue to work on our electronic grantmaking program, for which we received a Hammer award. This is a program that continues to reduce the amount of paper we use and also the burdens that we impose on our grantees. This program is one which we hope to be able to expand in this fiscal year and throughout the life of the ISTEA reauthorization. advanced technology transit bus We are also very happy with our research programs. One of the most shining examples of that is the recent rollout of the ATTB bus. This is, the Advanced Technology Transit Bus that incorporates aerospace construction, accessible design, and hybrid electric propulsion into a single vehicle design. The ATTB bus saves over 10,000 pounds off of a typical 30,000-pound bus. Savings from the weight reduction include lower fuel and brake costs, as well as less road damage. The low weight has a high efficiency drive system to save fuel, reduce emissions, and eases maintenance by providing a longer- lasting, noncorrosive body. The ATTB bus is a solid example of defense-developed technologies being converted to transit use. This is a program that, if funded, could be developed in this country for export to other countries around the world. So, finally, we are requesting new budgetary resources of $4.4 billion in fiscal year 1998, approximately the same level appropriated in 1997. But the themes that have been developed in this budget include flexibility, predictability, streamlining our programs and processes, and providing innovations to improve service and efficiency. capital investments Our budget provides $634 million for major capital investments. This amount reflects budgetary pressures. We are well aware of future demands of $40 to $45 billion in proposed major investment studies. But we are proposing higher budget authority in our reauthorization legislation that will allow for increased resources to be dedicated to new systems construction if future economic conditions warrant increased budget spending. new starts program At this time, I would like to address some of the issues regarding New Starts, Mr. Chairman, that you raised in your speech on the House floor on March the 3rd, and, again, before the APTA Leadership Forum. We agree with many of the points that you made and appreciate your support in these areas. In all aspects of the FTA New Starts program, we are carrying out our statutory responsibilities as they are specifically laid out in ISTEA and yearly appropriations Acts. The requirement for project-specific FFGA's are clearly spelled out in ISTEA, and we are following that direction. It is true that projects such as those in Los Angeles and San Francisco take a very significant slice out of the overall New Starts funding pie. However, it must be noted that BART and LA have extensive enabling legislation in ISTEA. In fact, the California projects account for 22 percent of the total ISTEA earmarks for New Start funding. Our planning process has been carefully designed so as to not bias local decisionmakers towards one transportation solution over another. ISTEA expanded and strengthened the planning process, including a broader multimodal major investment study which replaced our alternatives analysis which was formerly done. In fact, under ISTEA, it is spelled out that project planning must be initiated from a multimodal point of view and that all options, including highway projects, must be evaluated before a final project selection is made. It cannot be overemphasized that local community involvement is required and encouraged every step of the way, and that the final project choice is truly a local preference. Regarding the level of the Federal match, in our major investment criteria, overmatch is encouraged and accounted for because it reduces the required Federal commitment, thus leveraging Federal funds. It is also an indicator of local support. As a result, for example, the New York-Queens Connector project is being constructed with approximately a 50/50 match of local and Federal funds. The Dallas-South Oak Cliff Light Rail Transit project is being funded with a local match of 43 percent. It is FTA's policy not to propose funding for major investment studies and early engineering studies with New Starts construction resources. We have a longstanding policy that formula funds should support the early stages of project development. This reserves the New Starts resources for construction. As stated earlier, increased formula resources provide greater flexibility to states and local governments and transit authorities to be more responsive to the needs of their particular communities. This includes the flexibility to use that funding for major investment studies and early engineering studies. We continue to support the notion that our New Starts funds should be used for projects that are in final design, or final construction, and that those areas are where that money can best be utilized. closing remarks In closing, our budget request seeks to build on the ISTEA themes of multimodal flexibility, innovation, and funding predictability. Our request seeks to capitalize on the proposed ISTEA reauthorization in order to make a straight-lined dollar amount go much further. We believe that the realignment of our programs within the FTA's budget will greatly increase the flexibility afforded to local decisionmakers. At the same time, Mr. Chairman, our budget request dovetails with the Clinton Administration's broader goals. The proposed Access to Jobs and Training initiative is a practical step that will assure the success of last year's welfare reforms. The request also reflects the President's stated commitment to balance the Federal budget by the year 2002. Let me thank you for the opportunity to make these remarks, Mr. Chairman. And I, and members of our staff, stand ready to discuss and answer any questions that you may have and other members of the committee may have as well. [The prepared statement and biography of Gordon Linton and biographies of senior staff follow:] [Pages 997 - 1021--The official Committee record contains additional material here.] project management oversight Mr. Wolf. Thank you, Mr. Linton. We have a whole series of questions, and what we hope to do is to continue until about one o'clock or 1:15 and then maybe take a half-hour break and then come back, just to give you some sense of where we are. The project management oversight program, or PMO, was originally authorized by Congress in response to problems experienced by several FTA grantees in assuring quality construction. Due to a lack of in-house capability to oversee project implementation and to ensure a quality product, private sector engineering firms are hired by the FTA to conduct project oversight. The program, also referred to as Section 23, is funded by set-asides from each grant. At the request of this subcommittee, the Inspector General initiated an audit of FTA's PMO program to evaluate the effectiveness and management of the program. A preliminary report from the Inspector General is very troubling, and it paints a very disturbing picture. The report indicates that FTA's senior management denied the IG's initial request to review budget documents, informing the IG that it had no right to access the documents. Subsequent discussions and requests yielded incomplete or inadequate documents. In addition, FTA senior management prevented the IG's office from independently meeting with several project managers. The IG further informs the committee that FTA allocated nearly $10 million of section 23 funds for 11 management initiatives which are ineligible activities. The preliminary audit further revealed that project managers could not explain how their respective projects qualified for section 23 funding. It would appear that you are using section 23 resources for activities not authorized by the law and that your senior managers are indicating that there is something that they don't want the IG to see. What are your comments with regard to that? Mr. Linton. Well, let me just say I think that early on there may have been some misinformation from some members of our organization in not providing information. But I do know that our Office of Program Management did provide the IG with all the data that they requested to review our programs. We may differ to some degree with the IG on their interpretation of the oversight money. For example, I have before me the projects which are in question. And we believe that this is, in fact, an appropriate usage of the oversight funds. These funds are providing oversight of specific programs that we are conducting--the Intermodal Surface Transportation Efficiency Act oversight, drug and alcohol management information system oversight, where we have the responsibility to ensure that the transit industry is enforcing the drug and alcohol laws that were passed by this Congress. We do have the oversight responsibility, so we have to report on that information. We have used the oversight funds to do that. That is one of the items that is, in fact, in question. Transit security audits--we have a responsibility to ensure that our transit systems have security systems in place, particularly in light of many of the bombings and other things that have gone on around the country. So we have done audits of their security in terms of trying to make sure they do have systems in place to make sure that they are secure. The oversight of transit agency fare collection procedures is to make sure that, in fact, the procedures that they are using to collect funds and the process that they are using are, in fact, correct ones. We advise them when they are not. [The information follows:] FTA believes that its use of section 23 now codified as section 5327 resources is authorized by law and has fully cooperated with all reasonable requests by the IG for access to FTA records and personnel knowledgeable of the subject matter. FTA has provided detailed responses to each of the concerns raised by the IG in its discussion draft to which you refer. Mr. Wolf. Mr. Linton, no. I don't differ that you have the responsibility. The question is should they be done out of the section 23 funds and the set-aside funds? And the indications that we gather is they are not to. We are not questioning whether or not you should be auditing those things and look at it. It is where you get the money from. oig access to fta records I guess the other question I have is why did your senior management stop the IG from obtaining data and also from meeting independently with your project managers? Because, obviously, the IG is doing its investigation at the request of the committee, and they have been helpful in other areas. Mr. Linton. Mr. Chairman, I don't have an answer to that. All I can say is that when I became aware of that, we did, in fact, disclose and provide the information to the IG. [Additional information follows:] Concerning OIG access to FTA records and personnel, we believe the OIG misunderstood the agency's positions. First, it appears that OIG misunderstood FTA's position regarding initial denial of OIG's request for documentation. As the IG auditors appeared to agree in a subsequent meeting, the scope of the original request as written was overbroad, requiring creation of detailed information on more than 4,000 open grants. It was never the intent of FTA management to deny the OIG access to records. Rather, FTA objected to the OIG demand that FTA create such new records. All information was provided as soon as we could put it together. Similarly, the statement concerning the OIG's being prevented from meeting alone with project managers ``to obtain their reasoning for using section 23 funding for their projects'' also needs clarification. Knowing that as project managers they are not the ones who decide the source of funds, those individuals asked that any meeting for the OIG's expressed purpose include representatives from the Office of Chief Counsel, which makes the final legal determination of such issues. FTA agrees with its project managers that their opinions on that question are not authoritative statements of the basis for agency action. As noted by the OIG itself, six FTA project managers ``could not provide clarification or were unable to explain how their respective projects qualified for section 23(h) funding.'' The report documents the rigor of FTA's process in its finding that the Office of Chief Counsel will not permit use of section 23(h) funds in an approval package unless the scope or purpose is consistent with FTA's interpretation of section 23(h)'s authorized purposes and will reject proposed grant funding inconsistent with that interpretation. While the draft report accurately portrays the limited knowledge of program managers for things they are not responsible for knowing, the relevance of this information to the audit objective is unclear. We also note the apparent inconsistency between these reported independent interviews and the claim that OIG was prevented from holding such interviews. Mr. Wolf. Well, but they weren't able to meet independently with your project managers. And I think in the future they ought to be permitted to do that because many times you learn good things that were helpful to you and helpful to the Agency. It would appear that many of the activities that are funded with Section 23 resources are activities that FTA has indicated--and I don't question whether you should be doing them--in its budget documents are funded from appropriations provided under the national planning and research account. If that were the case, it would appear to be a case of double- dipping, if you will. Mr. Linton. Well, let me just say first of all I agree with you that much can be gained by having the IG have personal access to our project manager oversight firms, and they should, in fact, do so. But let me also say that we have responsibilities for oversight. We, with all great intentions and actually correct ones, believe that we were using section 23 money to do exactly what it was designed to do. We also do not have Section 26 money available to do these projects. There was only, in fact, $2.5 million available of Section 26 money that we can use for a whole series of projects that we have to conduct during the normal operation of business. We could not have covered any of these projects with the amount of money that was available in Section 26. And we clearly thought that utilizing Section 23 was both an appropriate and responsible thing to do, and that was our intent. [Additional information follows:] Prior to Congressional enactment of expanded oversight authority under former section 23(h), many of the activities now authorized for funding under section 23 could be funded only under the national planning and research program and its predecessors. FTA has been evaluating these activities under the available sources for the past several years, shifting to section 23 those activities whose purposes are more appropriately characterized as necessary expenses relating to oversight than planning and research. Mr. Wolf. I think we should look at it carefully and maybe have a meeting with your people and the IG because from everything we gather it isn't. I don't question whether you should be doing those audits and checking them. I think you should, but the question is where you are getting the money, and is it a question of double-dipping. For the legitimate PMO activities, the committee understands that many of the PMO contractors are restricted from getting where they think they have to be and are simply engaged in reviewing the process. The problem was cited as an element of lax LA Red Line project oversight. If the product of the PMO program is only an assessment of the process, how does that benefit the program? I mean, they have got to get the necessary information so they can make these choices. Mr. Linton. I am sorry. I am not following your---- la red line oversight Mr. Wolf. The problem was cited--the LA Red Line was only oversight, that the PMO contractors were restricted from getting the necessary information that they needed. Mr. Linton. Restricted by whom? By LA? Mr. Wolf. By LA and by FTA. Mr. Linton. That is news to me. We have not restricted our PMO's in any form or fashion, and we have given them open access to the projects. And they are, in fact, our eyes and ears. Mr. Wolf. Do they get all the information that they need, or do they just review the process? Mr. Linton. They are supposed to seek all the information that they need, and we find the information they provide very helpful. And we could not--we would not be able to have any of the responsible oversight that we need if it wasn't for their eyes and ears and their access to information. If I ever learned that they could not get the information they needed, we would make sure that that was corrected. Mr. Wolf. Well, I think we should talk about that too then. use of section 23 funds Mr. Wolf. If section 23 funds are being used for activities not authorized by Congress, why should the FTA continue to reduce its grantees' awards by some $25 million annually, funds which would otherwise be available to the grantees for needed capital, operating, and planning assistance? [The information follows:] FTA is only using section 23 (recodified as section 5327) funds for activities authorized by Congress. Mr. Wolf. The FTA has requested legislative changes in ISTEA which will permit the use of oversight funds to provide technical assistance to grantees for the purposes of correcting deficiencies uncovered during procurement systems review. Hasn't this authority been in effect for at least the last six years? [The information follows:] FTA does not interpret the necessary expense doctrine, as articulated by the General Accounting Office, to permit oversight funds to be used to provide technical assistance to FTA grantees to correct deficiencies identified in oversight reviews, including procurement systems reviews. Therefore, FTA has requested express statutory authority to do so. procurement systems reviews Mr. Wolf. Even though FTA has identified deficiencies through its procurement systems reviews, what actions has FTA taken to correct them? [The information follows:] With the reorganization of the FTA, the regional offices have picked up the responsibility for the follow-up for the procurement system review program. After a procurement system review is conducted, the grantees are required to submit action plans to regional offices which identify the steps that will be taken to correct the deficiencies and bring their procurement system into compliance with the Federal requirements. The FTA's Office of Oversight provides assistance to FTA regional offices in reviewing a grantee's action plan to resolve any deficiencies that are identified during the procurement system review. funding status of oversight funding Mr. Wolf. For the record, provide a table showing the fiscal years 1994, 1995, 1996, 1997 [estimate] and 1998 [planned] the amount of section 23 funds carried over from prior fiscal years, the amounts apportioned, any adjustments, obligations, and the end-of-year unobligated balance. [The information follows:] [Page 1027--The official Committee record contains additional material here.] Mr. Wolf. For fiscal years 1996, 1997, and 1998, please provide a detailed breakout by activity of the planned program use of these funds. Be sure to provide an estimated cost of each activity. For each of the activities, also note, where appropriate, the amount of Section 26 funds used to support the same activity. [The information follows:] [Pages 1029 - 1033--The official Committee record contains additional material here.] safety Mr. Wolf. On safety, less than a month ago, Secretary Slater indicated that his number one priority for the Department was the safety of the national transportation system. It has been the guiding principle for this subcommittee and members on both sides of the aisle in allocating limited resources. The 1997 appropriation and 1998 budget request include significant increases for a number of safety programs across the modes. Is safety an important FTA priority, and could you describe how safety is an important priority with regard to your budget? Mr. Linton. Well, let me just say safety is an important priority. We see safety through out our program. We think that even capital investments is an issue of safety and we are making sure that we have maintenance money in our new capital definition. We see that as a safety issue. When you can ensure that the products that are on the street, the rail systems that are in place are being well maintained, that is an element of safety. But let me also say that we have used our available Section 26 funds, as you mentioned earlier, to continue to focus on our training programs. We have used the Transportation Safety Institute to train many of the transit employees around the country in everything from how to deal with alternative fuels, to how to deal with safety and security incidents, to how to deal with terrorism and bombings, to how to look at their own emergency planning systems. We have continued to try to expand that program. I would also say, Mr. Chairman, that during this current fiscal year, we have had to curtail some of that safety activity once again because the funds were not available to support them as we have in the past. transportation safety institute Mr. Wolf. But you reduced funding for the Transportation Safety Institute by 20 percent from $750,000 to $600,000? Mr. Linton. We reduced it only because the resources were not available. We reduced it---- Mr. Wolf. But that is your only function with regard to safety--the only major function. And if the Secretary says safety is his number 1 priority, and it clearly is with regard to this committee, there are going to be program differences, and we wish we could do more than we have. But safety has been the Secretary's and this Committees number 1 priority. In many areas, the committee has added much more funding than the Department has asked, but I think to cut the Transportation Safety Institute from $750,000 down to $600,000 is a wrong message. We have been told they hired an outside contractor to audit the Transportation Safety Institute at a cost of $250,000. Is that accurate? Mr. Linton. That is correct. And let me explain---- Mr. Wolf. Explain, but to audit a program--now you are going to spend--you are going to spend $600,000 to spend $250,000 to audit it, and that is your major safety issue. Mr. Linton. I am not sure that we spent $200,000. First of all---- Mr. Wolf. $250,000. Mr. Linton. I am not sure we spent $250,000 for that audit so---- Mr. Wolf. Do you have people here to tell us? Mr. Linton. I think it is more like $50,000 [$100,000]. We don't even have that kind of money to spend on those kinds of projects' so I know that is not possible. Mr. Wolf. Well, could we see that too? Mr. Linton. Sure. Mr. Wolf. Can one---- Mr. Linton. I think it is $50,000 [$100,000] because I recall signing the report. But let me just say that the reason that we have had to reduce our money for safety is because of the earmarks in our Section 23 money. We only had $2.5 million available in order to fund all of the core programs that we have in our Section 26 funds. As a result of that, we had to reduce a number of projects, including TSI. There were also some safety recommendations that were made by the National Transportation Safety Board that we could not even undertake because the discretionary funds that we needed to do those weren't available. One of the reasons that we audited this particular program is because we needed to try to find a way that we can do more with less. There were questions raised in the audit as to whether or not more classes could be held with less money, whether or not we were getting the most effective kind of training from the classes with the money that is being spent. We think that spending $50,000 [$100,000] for the evaluation when we are trying to make sure that we are reaching the intended outcomes from the money that we spent is a good use of funds. Mr. Wolf. Well, I think there may be a difference with regard to the committee on that issue. I think safety is very, very important. As you know, we have had a number of accidents here in the Washington metro area and a number of other areas. And I think to reduce it from $750,000 if my memory serves me, down to $600,000, and then to audit the program at $50,000 or $250,000, whatever the case may be--and we will get to the bottom of that--I think is really not appropriate. And, particularly, in light of Secretary Slater's, priorities and this is not meant to be a partisan issue. Maybe there are some agencies that have not included the necessary money to fund safety programs, knowing that maybe the committee would add it later, and we have. Safety for people riding on the rails or on the airlines, whatever the case, is extremely important, and I don't think that your budget or section 23 fund allocation puts enough of an emphasis on safety. We can talk more about that. safety commitment Mr. Wolf. Could you describe for the committee your commitment to safety? [The information follows:] The FTA has long been proactive in the area of safety. Although the agency has no regulatory authority, with the exception of the drug and alcohol testing and the state safety oversight program, there have been efforts in the area of research and training. Public safety oversight has taken the form of security audits of select transit systems and the FTA is currently coordinating commuter rail safety with the Federal Railroad Administration through their Rail Safety Advisory Committee. The FTA's 1994 ``Safety Management Information Statistics'' report, now in its fifth year of publication, indicates a trend of declining transit incidents from 90,163 in 1990 to 70,693 in 1994 (``incidents'' are the total of all events such as collisions, derailments, personal casualties and fires). Also declining were fatalities in all transit modes from 339 in 1990 to 320 in 1994 and suicide attempts which dropped from 126 to 103 in the 1990-94 period. Injuries have been relatively static at 58,193 in 1994 compared to 54,556 in 1990. Similar statistical declines were experienced in transit passenger miles, all modes, which went from 35.5 billion in 1990 to 34.9 billion in 1994 and total transit passengers which declined from 7 billion in 1990 to 7.3 billion in 1994. transportation safety institute Mr. Wolf. As you know, the FTA has no regulatory function in the safety arena, and it cannot impose civil penalties. The FTA does, however, support the Transportation Safety Institute in Oklahoma City through which training is provided to some 5,000 bus drivers, mechanics, inspectors, and other technicians a year. This is FTA's only safety training program. Given FTA's limited role in transit safety, wouldn't you want to do as much as possible through the TSI? [The information follows:] The FTA has financially supported the transit safety training program at TSI since 1976. This fiscal year we have been forced because of budget constraints to reduce that contribution from $750,000 to $600,000. In the upcoming fiscal year (1998) we hope to expand the number of safety courses offered at TSI and increase the FTA contribution to a level of $800,000. Mr. Wolf. What is the Department's budget request for the Transportation Safety Institute for fiscal year 1998? [The information follows:] The FTA budget includes $800,000 for the Transportation Safety Institute in fiscal year 1998. safety program funding Mr. Wolf. Given that the FTA budget is approximately $4 billion, what is the total you have allocated for all of your safety programs? [The information follows:] The FTA's fiscal year 1998 safety program is budgeted at $1.1 million of the 49 U.S.C. Sec. 5314 program (National Transit Planning and Research). In addition to a specific line item for ``Safety and Security'', funds from the National Transit Planning and Research Program are also allocated for safety related research issues such as, for example, transit vehicle fire and materials studies, grade crossing safety, development of emergency management plans and child safety concerns. In addition, virtually all FTA projects include various elements of safety as, for example, rail systems which are provided Federal assistance to install specific safety improvements such as new or upgraded train control and guidance systems and capital grants for new bus and rail vehicles which are equipped to conform with improved standards for emergency egress, fire and smoke suppression and technologically advanced safety enhancements such as dynamic and/or friction generated retardation systems. Mr. Wolf. Mr. Sabo. Mr. Linton. Mr.---- Mr. Wolf. Excuse me. Go ahead. Mr. Linton. Excuse me. If I may add, in our appropriations request last year, we even asked for money to be set aside for safety because we thought it was so much of a priority. When we got our final passback back, in fact, the money was not set aside for safety. And as I indicated, there was only $2 million in discretionary money to use against all the programs that we have to fund, including our safety program. operating assistance Mr. Wolf. Mr. Sabo. Mr. Sabo. Thank you, Mr. Chairman. Welcome again to the committee. I understand all the budget difficulties you have-- targets to meet--and at times you may have more budget authority than outlays for a given fiscal year. And that results in us having new programs which have budget authority that won't have much expenditure in '98 but will in '99, 2000, 2001, and 2002. I am concerned that at times we don't do what makes sense because of the mismatch of BA and outlays. I refer specifically to the FTA's recommendation to eliminate what is a very limited amount for transit operating assistance. I understand the money that goes to larger systems is not a large percentage of their budgets, but these systems are struggling to get money to operate--from local and state sources. Many times the marginal federal operating funding is very important in determining whether you can keep certain routes going, particularly in bus systems. And I just have to say that as a general rule, I much prefer to keep funding in the existing programs that are working fairly well than to cut them to create new programs. Therefore, I have a tough time getting very excited over changing the definition of what capital funds can be used for at the expense of operating assistance, or starting a new grant program for people going to work who may have been on welfare when we are cutting operating assistance. In our area at least--in the core city--the primary means of transportation to most jobs is a bus system, and we must keep those bus routes going. I don't find it a particularly attractive alternative that some bus routes maybe closed so that we might have the option of applying for a grant which we may or may not get. Reverse commuting is a major problem, and a difficult one to resolve. But I don't think a very limited grant program is going to solve that problem. So I have to indicate my disappointment that we are still fighting over maintaining a very limited amount of money for operating assistance. I think it is important, and I would much prefer to see operating assistance increased than see funding going into some new program which may or may not work. We will have to struggle to find the outlays, and we can hope to get a little bit more in 602[b] allocation to the subcommittee. So I understand why you are doing what you are doing. You put your budget together to make it look a little better, but I just think that cutting operating assistance, again, is a very negative thing to do for our larger urban areas that are struggling for resources. And I think that cut can have a much more negative impact on the ability of people without cars to get to work than any pluses from a new discretionary grant program. I think I will leave it at that, Mr. Chairman, and let other folks ask questions. livable communities initiative Mr. Wolf. Mr. Foglietta. Mr. Foglietta. Thank you, Mr. Chairman, and I welcome you, Gordon Linton, today, a person who is from the great City of Philadelphia. However, I am a little disappointed because I believe that last night you would sneak over to my office and check on the questions that I had prepared to ask you today and address those questions in opening remarks and leave not too many questions for me to ask you. Mr. Wolf. You didn't do that to me. Mr. Linton. I wish I had. Mr. Foglietta. But there is one issue I know that you and I both agree on and that is using transportation investments as a way to leverage jobs and economic opportunity. That is why I supported you and former Secretary Pena's efforts to fund the livable communities initiative. Through your leadership, funds were awarded to Chester, Pennsylvania, one of the poorest communities in the entire United States of America, to revitalize the Chester train station and other projects like that across the country. I was a bit disappointed that this subcommittee never shared my enthusiasm or our enthusiasm for the livable communities initiative which made the Chester train station the active program that it is. However, I know that you are continuing to put that program to work, and I applaud you for that. I also want to applaud you and the Department for some of the work you have done with problems we have in our cities. Philadelphia, as Mr. Sabo has stated--Philadelphia and othercities all across the country are suffering because they have so many thousands of low-income individuals who will lose welfare benefits and have to find work. And yet the Department is cutting operating assistance which these people need so desperately. In Philadelphia alone, as you well know, there are 25,000 individuals who will lose their welfare benefits and have to go out to find work. There are in my district--my congressional district 39 percent of the families don't own automobiles. So we are talking about these people going to work, but I think you and I understand and the members of this committee understand that employing these people will be difficult to achieve. I think that we have to look at all type of areas to see where we may be able to. And I am pleased to see that the Federal Transit Administration requested funds to create transportation options for low-income people to get to work. Your program does provide one answer to the very simple question of how do we get people to work if we can't get them from one place to another and get them off of welfare to get them to work. OPERATING ASSISTANCE However, your budget request also included some changes to the transit program. You and I both have fought for mass transit operating assistance for many years. It has sometimes been a lonely fight. However, this year you are proposing no Federal operating assistance to properties serving populations over 200,000 people. This means that Philadelphia and other large systems like it will lose the funding they received last year. Philadelphia stands to lose $12.5 million in operating assistance. EXPANDED CAPITAL DEFINITION Now, I realize that expanding the definition of allowable capital expenses to include maintenance will be of significant assistance. But even so, SEPTA--and I suspect other large systems throughout the country--will lose substantial funding. I am told that in SEPTA's case, when the Commonwealth of Pennsylvania interprets how state funds can be spent to match Federal funds, the result is a very limited actual benefit for SEPTA. Can you tell us some more about your proposal and the rationale behind eliminating operating assistance? And, further, have you assessed how the various states restrict the use of their funds for capital and operating and the extent to which those restrictions reduce the benefit of your proposed change? Mr. Linton. Thank you, Congressman, and let me just say that this will give me a chance to respond to Congressman Sabo's question as well--first let me say that we are very excited about the livable communities initiative, as you indicated. It is one which we have still been able to do around the country even without specific appropriated resources. We have been able to work with many of the transit properties who have been able to use their own funds to do these projects. And we have been able to provide technical assistance to enable them to do those, and they have been very successful. They go a long way in terms of making the transition from welfare to work possible. In fact, in our new Access to Jobs program, some of those kind of projects would also be eligible. We would be eligible to do day care centers at transit stations such as the things we were talking about in Chester. We will be able to make connections between training institutions and transit stations such as what we are doing in Louisville through local community projects. We will be able to do things like we are doing in Tucson, Arizona, and other places like that where we are making the connection between transit and the amenities that people need to make their success in this country worthwhile. But let me also say that, as you know, I have personally not been just the Administrator for FTA, I have been a long- time champion of transit. I am very knowledgeable of the law in Pennsylvania relating to transportation because I am the author of much of it. So that is something that we can continue to discuss. But let me also say that even prior to coming to FTA as the Administrator, and even during the years in which I was a legislator, and during the period of time in which I served on the Board of the Southeastern Pennsylvania Transportation Authority, we in this industry have always been engaged in a longstanding fight over reductions in operating assistance. We have expended a lot of resources, capital resources, time and energy over many, many years with that continuing battle. It is my personal belief, and not just because this is a proposal that the Administration is offering, that this is, in fact, a good direction, a productive direction, and a win- win direction for the industry. And let me cite a couple examples. Regarding the issue of what is operating and capital-- historically, the highway industry has been able to identify many things that we in transit have always called operating as capital--clearly. I always used the analogy that painting a bus is operating in the definition that we have used for years. Painting a bridge is capital. So those types of operations have gone on in the highway industry for years. No one has identified them as operating assistance. In the transit industry we have always gotten tagged with statements that this is money being spent for operating assistance, and, therefore, operating assistance should be eliminated. Well, if, in fact, painting a bridge is an asset maintenance provision that can be paid for out of capital, it seems to me that painting a bus is also an asset maintenance provision that should also be able to be paid out of capital. So the question here is not whether or not it is capital or operating, the question is really whether or not the resources are in place to enable the transit systems to pay for the various needs that they have. It is my belief that under the definition of capital, SEPTA, WMATA, other systems like that, will be able to pay for many of the same items that they have been paying for out of operations. And what it gets us out of is this poor definition of operating assistance that we have been tagged with in this industry for years. It gives transit and highways the same definitions for utilization of resources. It makes sure that--as we try to make sure that there is a level playing field between the surface transportation modes-- we are using the same definitions to mean the same thing. In effect, it will also mean that local systems like SEPTA, like WMATA will have access to more resources, that they can use for a broader range of activities, than they currently have access to with the narrow definition of operating assistance. We have looked at, from my Section 15 data, the amount of money that systems like WMATA and SEPTA pay for asset maintenance. They pay for maintenance far in excess of what we provide them in operating assistance. So they will be able to use this definition to apply it to more of their local needs than they can under the definition of operating assistance. This is not just a proposal that makes the budget balance, this is a policy change that I think is good for the industry. And not only am I just discussing it in terms of the President's budget. My good friend, as we get to the quiet backrooms of your office, you will also find that I will also discuss this with the same sense of passion that I am delivering it this morning, because I truly believe that in regards to the long-term health of this industry, it is the best thing that we can do. CAPITAL DEFINITION SIMILAR TO HIGHWAYS Mr. Foglietta. You did a wonderful job on that. You were talking about the gray areas where the distinction is not very clear between capital and operating. But there are certain areas which we definitely all agree are operating expenses, and those cuts are going to affect those areas. No question about that. Mr. Linton. Congressman, if you will allow me, I can even discuss what those areas are. The only area that I can definitively state at this moment that would not be acceptable under the definition of capital would be the salaries of bus drivers and railcar drivers. Mr. Foglietta. Well, then---- Mr. Linton. Even, in fact, as is done in highways, labor costs that are related to the painting of the bridge is related to asset maintenance under the highway definition. Labor costs of mechanics related to maintaining the bus is still related to asset maintenance. We are using the same definitions that the highway industry would use so, in fact, the only area which would probably be excluded would be that area of the bus and railcar drivers and fuel. And those are costs which transit systems can, in fact, pay for out of their own local match, their own local share, and, therefore, pick up that portion of the Federal dollars and transfer the eligibility that we will now give them to meet those other voids in their budgets. I think it is a win-win situation, and I think it is a good proposal. I would hope that all of us would take a closer look at the merits of this. I know on the surface many of us who have been battling for years and years for operating assistance on first blush would say that this is a terrible injury to the industry. I would hope that we all examine this very closely and look at its potential for the health of the industry before we dismiss it out of hand. Mr. Foglietta. I thank you for that answer, and I do take you up on your offer to come over to my office where we could discuss this further more informally. However, I would suggest that if this proposal were adopted, I would imagine that some sort of an adjustment period would be necessary, and would you agree to something of that sort where we can move from one to the other? Mr. Linton. There may be a slight adjustment period, but let me also say that it is different from the bus overhaul provision that we requested and you supported in previous years where there has been more of an adjustment period necessary. This particular change is well within the way in which the industry currently allocates their funds and their budget. It will be very easy for them to go right to the Section 15 data, which is data that we collect on how money is being spent, and easily make the transition from the utilization of the operating assistance in their budget item to utilizing those same items under this new expanded definition for capital. So I think that, in contrast to the transition period that they have had to have in the bus overhaul, which has been a much longer one, this one is going to be extremely easy, and it will not require the same length of transition as the previous one. RAIL MODERNIZATION UNDER FORMULA REQUEST Mr. Foglietta. On another subject, the Administration has also suggested that rail modernization become a subset of the Formula program instead of being part of the discretionary program. It is true that ISTEA converted the rail-mod program to a formula, but it is very important that Congress decided to keep it in the discretionary program with the New Start and bus projects. I believe it is important from a policy and political perspective to link the fortunes of New Start and rail-mod, and ISTEA requires that their funding levels be equal. Your proposal eliminates that link, and I am concerned that the change could put rail-mod in a position where every dollar allocated to those systems detracts from the broad Formula program. Doesn't your change risk setting up a natural competition between those who rely on the Formula program exclusively and those properties with acute capital needs which have been served by both the Formula program and the Section 3 rail-mod program? Mr. Linton. Let me respond to that point, Mr. Chairman. In our new proposal--in our reauthorization proposal and also in our 1998 budget proposal,we are creating an opportunity to create a single disbursement of funds to transit properties. Once again we are trying to eliminate paperwork, trying to make our system more efficient and streamlined. But we need to make sure that it is clearly understood that the formula for rail-mod is not being eliminated. We are using the same formula for rail-mod that is currently existing under the law. That will not change. And the way the grant will work, it will draw from the same formula, using the same variables that are in the formula, and it will match that up with the money that comes from our normal Formula funds and give the money to the properties in one single lump sum. So the rail modernization formula itself will not be changed. It will still operate on a separate track. We will still use the same variables that we currently use to define how much it is. That will not change. Regarding the discretionary bus program, which, as you indicated, will also go into the formula, we are maintaining the same match as is currently used. So even though it appears that it is a major adjustment, we are utilizing existing formula structures to come up with the numbers so that continuity with the previous history of this Agency remains. But one of the significant changes with this is that we will now provide the grantees the opportunity to use the money for all legitimate transit uses. So if SEPTA chooses that in a particular year, even though they will get their fixed guideway money out of the same formula, if they choose to do bus rehab with it or they choose to do a bus facility with it, they will now have the option of doing that. Mr. Foglietta. Thank you, Mr. Linton. Thank you, Mr. Chairman. independent transportation network Mr. Wolf. Mr. Olver. Mr. Olver. Thank you, Mr. Chairman. Mr. Linton, thank you for being here today and bringing your folk to help us out. I want to ask about a program that I know has some national significance. We have a large number of people particularly living in small metropolitan areas or rural areas who need transportation services, people who are elderly or disabled. And I think that might fall into a general category of things that are called paratransit. And I know that there have been programs that have been supported. One of them that I want to mention is up in broadly, the area that I come from, New England--being the only person on this committee from the New England area. There is a program in Maine called the Independent Transportation Network that research--that had been done by the AARP and the Transportation Research Board, the FTA, the Highway Safety Administration, the Southern Maine Council on Aging, Agency on Aging, and the Maine Department of Transportation had worked on and put together a program to provide these kind of very flexible services for individuals with the age and disability characteristics that I have just generally described. The FTA provided some start-up monies for this program--I think it was probably in fiscal year 1996--out of a need--a recognized need of I think maybe $300,000 or thereabouts that-- I think maybe $125,000 was provided. Is money provided for the rest of that start-up to get this program that so much investment has already been placed in, to help them get off the ground? Is that provided in the 1998 budget? I think it was not directly available in the 1997 budget. Is it provided in the 1998, or is there some still in the 1997 that can be used for this purpose? limited research resources Mr. Linton. I recall that we did fund this project in 1996. The way we were able to fund it, Congressman, was out of discretionary money. And we were not able to fund it when the request came for 1997 because we didn't have the discretionary money. Mr. Olver. This is the subject of the earlier conversation? I didn't get exactly how much discretionary money you believe you had in the 1997 budget. Mr. Linton. $2.5 million. Mr. Olver. Was the total nationwide of discretionary money? Mr. Linton. That is correct. And out of that, we have to fund our safety programs. We have required statutory studies that we have to do, such as our 3(j) report. By the way, I am happy to report to the Chairman that we have the 3(j) report available and it will be made available to you today. We have studies such as those that we are required to do. I can give you a litany of projects that both the Congress has requested that we do and that the very nature of the business that we are involved in requires us to do. The $2.5 million does not allow us to fulfill these needs. So as a result of that, what we have done this year, and that was the nature of the earlier debate, is we have tried to squeeze into that $2.5 million programs that we need to do, with the understanding that sometimes during the course of the year, we do get unobligated balances from projects in which money was not spent. When that money becomes available, we can then assign it to some of those priority projects such as the safety element that Congressman Wolf made reference to earlier. But we have to try to balance our budget and remain withinthe budget that we have. We are constrained. We can't do all that we would like to do. We can't do all that the members who make inquiries to me would like us to do. And, quite frankly, even this year, I struggled, and my staff will verify that--we struggle with our program plan to make the decisions that I had to make that fit projects within that $2.5 million. It is not a situation I like to find myself in, and the things that I had to cut out were not projects that I think were fat. So that is where I find myself this year, and I don't know if it will change. Mr. Olver. If you have unobligated funds--I am not sure I am putting this in the correct way--if projects come through with balances, as you have described them, in the course of the year, are you able to then use those monies at your discretion, or does that require a whole new reallocation scheme to pass through this Congress, or does it require the approval of the Chairs of the authorizing committees or the appropriating committees on either or both sides, or just how does that work? Mr. Linton. In this particular category, the money is available at my discretion. But let me just say that when we went through our program plan, we left on our priority lists of projects, as I said earlier, we had to cut off a number of projects. So if, in fact, there are available discretionary funds that become unobligated, as Chairman Wolf said, safety is the number 1 priority. So we would have to go back and see if we can allocate that money to restore some of the safety classes. There are required studies that we are not going to be able to do at this point in time. We may be able to do them throughout the rest of the year as money comes along. I will have to allocate money back to try to fill those needs. So we will try, as we always do, to use resources in the most efficient way that we can. Mr. Olver. Does your fiscal 1998 budget plan include the completion of this obligation? I am not sure it was really an obligation. That is perhaps not the correct word, but the completion of the start-up for this project. This is according at least to what I understand the Chairman talks about being a bipartisan committee. Of course, Maine is a very bipartisan state when you consider the sum total of the delegations and the two branches. Mr. Linton. My fiscal 1998 budget is silent on those kind of projects. We have---- Mr. Olver. Solid on this? Mr. Linton. I mean silent. I am sorry. Mr. Olver. Silent? Mr. Linton. Silent. When we submit our budget, it leaves Section 26 open. We make some suggestions like the ATTB bus, but the specific projects in that area are not filled. We approach that as discretionary funds that will be made available to apply to projects such as the one that you are suggesting. However, we can only apply what is available once the deliberation of the Congress is complete, and we understand what remains available for us to use. So we won't know until the end of this deliberation how much money I will have to apply to projects such as the one you are mentioning. Mr. Olver. I don't know how--to exactly what degree--maybe you can help me here--to what degree this is a national model. I don't know how many similar projects are going on that are around that you have funded, but this one has gotten rather wide publicity as a project--as a model for both the planning process and thereby the approach that they have gone about trying to develop a transportation system that is very flexible for an at-risk population, a population for which transportation access is always a difficult one, and for small metropolitan areas in southern Maine representing a couple 100,000 people in its totality of the metropolitan area. Are there many other projects like this going on? Mr. Linton. We have projects that are similar, but they are not specific to this one. This is a project that we were highly excited about. It does fit an emerging population. We know that the elderly population in this country is rising tremendously. We are greatly concerned about the kind of transportation services that we are going to have available for the elderly as that population continues to expand. We saw this as a much needed piece of research and a project that we think could have significant national prominence. So I agree with you, Congressman. We think it is a great project. Mr. Olver. I hope your excitement about the project remains and that, therefore, we can reach some sort of accommodation on it at some later time. Mr. Linton. I am often very excited about the projects. The problem only comes when we must match them to available resources. If the resources are there, you just remain excited. But if the resources aren't there, I can stand here and be excited, and you can be excited, but our project won't go forward. Mr. Olver. Well, you stay in the excited state, and we will--thank you very much, Mr. Chairman. advanced technology transit bus Mr. Wolf. Mr. Tiahrt. Mr. Tiahrt. Thank you, Mr. Chairman. Welcome to the committee, Mr. Linton. Mr. Linton. Thank you. Mr. Tiahrt. I am new on this Committee, and I am trying to understand how you operate. I think there is--looking through your testimony and trying to find the relationshipbetween research and development in your overall budget, and I think it kind of goes to the philosophy that if you can invest in research and development and develop low cost methods for mass transit, then it would make it more economical for communities to maintain this mass transit with less support. So it would then free up more sources of revenue to go elsewhere. But it looks like your research and development, from what I can tell from your testimony, is less than one percent of your overall budget. And it is not a very big investment percentagewise, and I don't know what the gauge is--you know, what yardstick to use, whether this is good or this is too little, too--I can't really tell. And some of my questions may be answered if I could see this ATTB, this advanced transit bus. One of my concerns coming from the Midwest--Wichita is in my district, and we have a transit system that quite often has a bus that carries probably 45 people or so, and there is four people in it or five people in it. And it would seem more economical that we ought to have something that has 24 or less running these routes most of the time. But I don't see any research for a smaller bus frame. Is there anything in your budget that addresses a smaller bus? Mr. Linton. Let me just say that many of our systems do use smaller vehicles, and there is no prohibition on our standpoint as to the size of the vehicles that systems use. Mr. Tiahrt. Well, how big is the ATTB? Mr. Linton. The one that we are using is a 40-foot bus. I think that is part of the six prototypes that we are now building. It is our hope--in fact, we think if the development of this bus continues as we see it, we think that it will, in fact, be able to be produced as a smaller bus with a smaller chassis. We think that it will be possible in the future for this particular technology to be used for buses, trucks, et cetera. We think there is even possibilities that we will be able to use it for rail cars, and there is also possibilities that we will be able to use it for electrified buses and trolley buses. So we think that there are tremendous possibilities in the long term for the technologies being developed. Mr. Tiahrt. Does this bus have a composite frame, or is it a metal frame, or what is the design of the bus? Mr. Linton. Some people call it the stealth bus from the stealth bomber, because it is made of composite particles in its frame. That is where it gets its light weight, but it is also where it gets its durability. It is corrosion free, it is very lightweight, and it is very strong. We think that when we are trying to deal with issues such as truck weights on our highways, concerns about the damage to the highways, the concerns about buses being able to meet those highway weight limits, that this particular vehicle has many, many prospects for the future to help us deal with that particular problem. Additionally, the way the bus operates, all of its component parts are on a grid system so in terms of maintenance, both time and costs are reduced because it is very easy to remove its major component parts on the grid, repair them, and replace them in a very efficient manner. So this is a bus that we think has major, major prospects for the future. Mr. Tiahrt. And I think I read that this one was--started working last fall, is that right--the first prototype? Mr. Linton. That is correct. I think we rolled it out this past fall. Mr. Tiahrt. Where is that vehicle located at? Mr. Linton. Right now it is still at the Norfolk plant I believe in California. We are looking for six prototypes to be completed by the end of next year. I believe in 1998. We do have within our budget request $10 million that will complete our cooperative agreement with Norfolk and Los Angeles Metropolitan Transit Authority, as well as the other 30 to 40 transit authorities around the country that are part of the peer review team that is looking at the project. But we think that with the $10 million that we have requested in this budget, that we will be able to complete the Federal share of commitment to the project and hopefully to have six vehicles completed by the end of 1998. Mr. Tiahrt. Do you fund this directly? Is this funded directly from your agency, FTA? Mr. Linton. That is correct. And jointly we have supporting funds from LACMTA. I think we also had a similar project on a separate track in Houston. Houston has now also integrated their project into this one. You saw we have funds from LACMTA, the Los Angeles County Metropolitan Transit Authority, ourselves, and we had some in-kind service and other support from Norfolk. Others have also contributed to the funding of the project. Mr. Tiahrt. Are you funding that indirectly then through these other agencies, or is that their separate investment into the future? Mr. Linton. We made the funds directly from our budget to Norfolk and LACMTA as part of a cooperative agreement. Mr. Tiahrt. Are all these six buses going to be 40-foot buses? Mr. Linton. All of the six buses this round will be 40-feet buses. And what we would like to do is once the six buses are completed and after they go through testing to make sure that they are roadworthy, we would like to deploy the buses in various parts of the country so they can be tested in actual revenue service to see whether or not our expectations and our predictions will stand up in actual use. Then after that is done, there will be some discussion as to whether or not there are manufacturers who are interested in manufacturing the bus on a long-term basis. And then we will also begin to look at other uses such as smaller buses, trolley buses and other places where the technology can be utilized. attb and ada compliance Mr. Tiahrt. What is the level of the floor in ATTB's? How many inches above ground? Mr. Linton. It is a low-floor bus. I don't know exactly. I think it is 14 inches. Mr. Tiahrt. Does it require a mechanism for ADA to raise wheelchairs up, you know? Mr. Linton. No, it does not. It actually has a ramp that you can board, and that is one of the other features of the bus because boarding is extremely easy. It reduces time that the bus has to be delayed in terms of boarding passengers. It makes it accessible for everyone. Mr. Tiahrt. One of the big problems I think is the number of moving parts in the current ramps on these buses require a tremendous amount of maintenance just to lift, and that is unfortunate because we want everybody to have access to mass transit. Mr. Linton. I totally agree. And the ramp system that is being used in that eliminates many of those problems. smaller passenger bus Mr. Tiahrt. I wish it was a little smaller. You had some other program that would look at a smaller bus because too often--I mean, even here in Washington, we see buses that are only partially empty, and I know there are peak times. But if you look at the difference between a smaller passenger bus and larger, what is it--three or four gallons' difference--Delta-- net difference in fuel cost per mile--take that times seven days a week for over a whole year, that is a lot of money. Mr. Linton. I think that is an issue that has been raised quite a bit by many in the industry and many in Congress, and we have raised the issue ourselves. But what we find now is that more and more properties are beginning to look at smaller vehicles. They are beginning to recognize that there are some service niches that they are not meeting with the large vehicles. And many of them are, in fact, using smaller vehicles. And we continue to support them and we continue to pay for that. It is a local decision. We are right now looking at a fuel cell bus that uses a hydrogen electric fuel cell. It is another research program that we have been involved in funding. That is a 30-foot bus. So we have other options that are available, that look at smaller vehicles as well. alternative fuels Mr. Tiahrt. Have you any plans to look at alternate fuels like--and there is an emulsion now that Caterpillar has a license. Caterpillar, as you know, makes engines, and this emulsion is 55 percent naphtha, which is the easiest to process from crude oil, and 45 percent water. And I think in the Reno area they have got some experiments going on, but Caterpillar has license to build an engine that could be used in mass transit that would use this. It, of course, reduces the emissions considerably 45 percent, and I wonder if you--is that part of this research plan, to look at alternate fuels like this emulsion or perhaps a renewable fuel like gasohol? Is that part of your plan? Mr. Linton. We have not embarked on a significant project in terms of those type of alternate fuels, but I can say that in areas such as hydrogen fuel cells, which I mentioned earlier, and other type of electric vehicles, compressed as well as liquified natural gas, those are areas in which we have ongoing research that we are conducting with the resources that are available now. We are trying to complete our research on those areas before we can go into others because, once again, we have limited resources. And we are not able to go through the whole litany of all of the alternative fuels that are out there and being discussed in the market. Mr. Tiahrt. Well, the Department of Energy has spent hundreds and hundreds of millions of dollars on electric cars, electric fuel cells. So far, we have found out that they are expensive, they are heavy, and they go about 18 holes. We would like to look into some alternate areas, you know, that I think have great potential. Mr. Linton. As we get resources, we continue to try to do additional research. But let me also say something in defense of the electric buses that only go 18 holes, or 18 hole electric vehicles. What we have seen in technology is that as it gets developed and additional research is done, and I can use the hybrid electric bus as one example, we have been able to reduce the size of the battery. This begins to reduce the weight, thus beginning to get to some of those targets that we would like to have to make the vehicles much more usable and much more cost effective. So I would not suggest that we have reached a conclusion on the use of electric vehicles. I think we still have a long way to go. And a lot of the things that you mentioned that are now problematic, we will be able to resolve. We also are engaging in things with the Department of Energy as well as EPA and in many of their initiatives to look at alternative fuels as well. Mr. Tiahrt. I would like to leave you with this thought, and maybe it is a statement more than a question. If we can develop smaller buses that are cost-efficient, fuel-efficient, and also accessible for people with disabilities, I think that we can have less federal dependency on operating mass transit systems, and I don't know that you are investing enough in the future, and what I see here, less than one percent. I would like to see more invested, because I think that again, this goes back to the old parable, that it is better to teach someone how to fish than it is to give them a fish. Mr. Linton. We are strong believers in investment. The problem once again becomes resources, and we have been resourceful. In fact, we used to have the DARPA funds, which are funds from defense conversion that we used. We also were able to, as I said earlier, work with the Department of Energy as well as the EPA to collaborate and utilize funds. In our reauthorization proposal, we have in place a partnership proposal to try to encourage research with the private sector so that we can also do some partnerships with private funds and federal funds to leverage our research. We recognize that more research needs to be done, and we are trying to find ways within the confines and constraints of our budget to do more of that. Mr. Tiahrt. I want to distinguish what I consider research, and that is basic research as a difference to applied research, and I will go back to a simple explanation. During the space program, we developed technology for calculators. That was the basic research. Texas Instruments then took that and applied that basic research commercially, and I think the position the federal government ought to have is in the area of basic research where we look at alternate fuels, fuel cells, all those things, and that is where our investment ought to be, not something that can be taken and commercially expanded. I would like to see this ATTB sometime or some pictures of it, and if you have something available, I would like to get that information sent to my office. Mr. Linton. We have videotapes. We have a whole package, and we will even have staff come over and give you a personal presentation. Mr. Tiahrt. Thank you. Thank you, Mr. Chairman. Mr. Wolf. Mr. Packard. Mr. Packard. Thank you, Mr. Chairman, and welcome, Mr. Linton. We are pleased to have you back before the committee. Mr. Linton. Thank you, sir. 13(c)--labor protection Mr. Packard. I have two questions, and the second gives me much more greater concern than the first. The first is regarding 13(c). We have made an attempt to streamline the requirements of 13(c), and I would like your impressions of how it is working. Under the new guidelines, strict requirements for certification for protections in an expeditious and predictable manner will ensure that the federal funds can be released within 60 days from the date that the Department of Labor begins processing an application from the Federal Transit Administration. I would like to know how these streamline guidelines are working in terms of 13(c). Mr. Linton. Sure. I think we have a good report on that matter. You are correct that we were involved in some major discussions about 13(c) and at the time, there was tremendous discussion. I recall the ones that you and I had personally regarding the delay in projects and money being funded as a result of that. Let me just say that prior to the new guidelines, that 85 percent of the grants receive certification within 90 days. I can say right now that 98 percent of the grants received certification within 60 days, so that is a tremendous change in terms of the ability to get through the 13(c) process and get our money to our grantees and make sure that the American public gets use from their taxes. We think that the process has worked well. There has been a tremendous improvement and the results are in the numbers. santa barbara--electric bus Mr. Packard. I appreciate that report and the way that it seems to be working. I think that that was very much needed. The second issue that I am concerned about, very concerned about, and one that I will read rather carefully because I think it expresses the concern that I have and the information that we need, and it is regarding Santa Barbara and its electric bus program. You are well aware that this committee bent over backwards to support your efforts to showcase transit technology, the vehicles at the Atlanta Olympics, and we provided millions of dollars of funding for alternative fuel buses. I might just brag a little bit and mention parenthetically that I don't totally agree with Mr. Tiahrt's evaluation of electric buses. I think that they do have a future, and I think that even though there are some problems, I see that as one area of alternative fuel that we still can't abandon. Be that as it may, we did provide millions of dollars for alternative fuel buses at the Olympics. A primary component of that showcase was to involve state-of-the-art battery-powered electric buses. FTA had significant difficulty in obtaining such vehicles, and then the associate administrator for technical safety programs approached Santa Barbara Metropolitan Transit District, the operator of the largest electric bus fleet in the country about the participation in that showcase at the Olympics. The committee supported this participation and urged FTA to be creative in its efforts in the fiscal year 1995 appropriations report, and although no discretionary monies were available in mid-1995, Santa Barbara agreed to advance the funds to the bus acquisition based upon a letter of no prejudice from FTA. The assumption was that reimbursement would be forthcoming the following year. Santa Barbara built and transported five electric buses, as well as maintenance crews and drivers to the Olympics to support the FTA's showcase. The buses were among the most reliable vehicles provided, and to date, the FTA has remained unwilling to provide reimbursement despite this committee's directive to do so and despite the FTA finding money for other projects in this category. Santa Barbara is ready to proceed on construction of its consolidation bus facility and bus charging facility and is faced with money shortfalls. When can the committee expect to be notified that the FTA is abiding by its letter of no prejudice and providing the reimbursements to Santa Barbara? A very direct question. Mr. Linton. Let me just say, Mr. Chairman, I recognize the issue that is being brought to my attention. We issue letters of no prejudice to properties continuously. We make it clear to the properties at the time that we issue the letter of no prejudice that that is not a guarantee of the availability of future federal funds. The purpose of the letter of no prejudice is so that properties can in fact proceed with using their own resources and doing so in a way that it does not prejudice them from receiving future federal funds if they are available for those projects. We have LONPs that people have been using throughout the country. When we get an opportunity that we can in fact reimburse them with resources, we try to do so. I have had personal conversations with these representatives for Santa Barbara. I told them at the time when this was discussed what the likelihood was of getting the LONP reimbursed. I would suggest that they did not unwillingly or unknowingly go into this venture understanding what the prospects of the future were. I never, when any property comes into my office, make any ironclad promises on LONPs. In fact, what I generally tell properties and I tell them even now as they are going to discuss their needs for the reauthorization, I am very clear with grantees on what the prospects are for both discretionary funds as well as our program being oversubscribed. I am not one to tell them that they can expect to get resources. I am very clear about that, and I am also very clear that when we send communications to members of Congress as well as to people who make requests for money that we make it very clear what the prospects are. We will try and continue to work with Santa Barbara to try to see if we can in fact provide some resources for the commitment that they made to showcase their project in the national arena of the Olympics. Mr. Packard. I think that another aspect of this, of course, is the very committed feelings of this committee in regard to the reimbursement to Santa Barbara. We think that that was a unique experience. The Olympics were one time only and unique, and I think that the committee has expressed to FTA their desires for that reimbursement to take place. We hope that that will have some effect upon your decision. Santa Barbara Electric Transportation Institute has emerged as a provider of the most complete, detailed, and extensive information on fleet operations of electric vehicles. Most of FTA's alternative fuel projects in the past three years have had analyses and evaluations conducted by Santa Barbara. The institute received $500,000 to help support this data collection and dissemination efforts for the past year. Could you give us the status of that award? Mr. Linton. The status of the award, just a minute, Congressman. I think we will try to get you some updated information on that grant. I think my staff has just said that they have been working with Santa Barbara and they have the information available, so the approval package is being put in place. [The information follows:] A cooperative agreement was awarded to the Institute on March 20, 1997. sole source requirement Mr. Packard. Thank you. The committee has received indications that your general counsel believes that congressional priorities not identified in statutory language will not be honored unless project staff completes sole source justifications. What can you tell us about this policy, and does this somewhat single out Santa Barbara as the first implementation of this process or this policy? Mr. Linton. My general counsel is right here. I am not quite sure I understand the question. Maybe---- Mr. Packard. If you would like to defer to the general counsel and let him answer, I would be happy to refer the question to him. Mr. Linton. Mr. Reilly is to my left, sir. Mr. Packard. Did you understand the question? Mr. Reilly. Yes, I did. I have not so opined. I don't know if you are referring to the department's general counsel or the prior chief counsel of FTA. Mr. Packard. I can't give you more information. Perhaps we ought to talk individually on that. Mr. Reilly. I would be happy to. Mr. Packard. There are other research projects across the country that would be affected by this same policy, and I would be interested if Santa Barbara is particularly singled out or if this applies across the board to all of these others such as Cleveland, OH; Minnesota, Hennepin County; and Southwest Ohio, I understand, would fall into that same category. Perhaps maybe we ought to at least for the record have you respond to the question. We will try to clarify some of the information that would be necessary for you. Mr. Linton. We will be glad to respond to the chairman and provide that information to the committee. Mr. Packard. Thank you, Mr. Chairman. [The information follows:] It is long standing policy of DOT that a written justification accompany any non-competitive award of assistance to non-governmental entities. Statutory language and subordinate sources of legislative intent, such as committee reports, will satisfy this requirement in most cases. With respect to grants for research and development, however, Federal law enacted as part of the Federal Acquisition Streamlining Act of 1994, establishes Congressional policy that any program, project, or technology identified in legislation, other than to a Federal Government entity, be awarded through merit-based selection procedures, unless the provision of law specifically states that the award to that entity is required by such provision of law in contravention of the policy set forth in subsection 266(a). (41 U.S.C. Section 266) A sole source justification for the non-competitive award to the Institute was deemed appropriate, consistent with this statutory requirement. Mr. Wolf. Mr. Pastor. Mr. Pastor. Thank you, Mr. Chairman. First of all, let me apologize for being late. Interestingly, a few doors down, the Secretary of Energy was talking about renewable fuels and the hydrogen engine. Mr. Linton. The Secretary of Energy. Mr. Pastor. Right. Mr. Linton. Somebody I know. Mr. Pastor. I think you do, but now he is talking about hydrogen engines, et cetera. I am new to the committee, so I look forward to working with you and learning more about the department and the objectives and how I can assist in furthering the transportation needs of this country. future new starts I basically have just one question, Mr. Chairman, and on page 13, Mr. Administrator, you allude to a speech that was given on the floor by our chairman on March 3 in which I agree with many of his points. He brings out the issue of the full funding grant agreements which you have entered into, and let me quote one remark in those remarks. ``For those of you considering light and heavy rail projects in your areas any time in the near future, let me just say this. Under the current system, there are no funds available.'' That is very discouraging because, as you know, there are areas in this country who are experiencing population growths, and in particular, in Arizona, as you know, and Nevada and many of the western states, you have the explosion of the population and they have transportation needs. Many are trying to cope with the future and how they can move people around to work, children to school, so that you don't have the congestion and at the same time, meet the EPA standards that are being imposed in terms of clean air. In Arizona in the Maricopa County area and Phoenix Metro area, what is happening is that cities are now going to the electorate and saying are you willing to pay an additional one cent, half-cent sales tax, whatever it may be, to solve the transportation needs of our community. Tempe recently passed that sales tax. You are going to have Scottsdale do it; you are going to have Phoenix, Glendale. So these cities are saying we have a responsibility, but we want to cooperate with the federal government since in many cases, it is in both of our interests. But when the chairman who is more knowledgeable on this matter than I am advises me that under the current system, there are no funds available, how would you address and mitigate that concern that they may have? It is a concern that not only deals with Arizona, but I think in all the western states where you have population growth that is exceeding all expectations. Mr. Linton. Let me respond to that. Let me also say, Congressman, that I was in your district. We have a livable communities project in your district. Your chief of staff from your district office was there, and it is a great project. In fact, I think we are continuing to support that project. While I was there, I met with several of the mayors, and members of the Chamber of Commerce. They told me of the recent passage of the referendum in Tempe, and that other cities and counties in Arizona were also pursuing that. They recognize that there is a tremendous amount of growth that is going on in that region, and they also recognize that continuation of just highway expansion alone would not solve their congestion problems. I was impressed that the people that I met with at the time were not just the transit properties, but it was the Chamber of Commerce, and it was the corporate community, whose members who are hanging out the flag to say that they wanted local support for transit projects. I recognize what is going on in your district and in your community on both of those fronts. Let me also say that there is a tremendous dilemma that we have regarding the demand for resources. We all are going to have to face the same dilemma as we go forward with reauthorization of ISTEA. It is clear, and in fact, our own information indicates to us that it may be $43,000,000,000 to $45,000,000,000 of projects that we know about that are in the MIS stage that are looking for resources within the next couple years. If you look at ISTEA, our authorization has been $4,000,000,000 to $5,000,000,000, and if you look at what is in fact being funded, we currently have projects that are authorized in ISTEA which have full funding grant agreements which we are directed through the authorization to provide funding for. Those are projects that will call on money in the next authorization, and they will call on over $3,000,000,000, so there will be additional resources available in the next authorization, but it will not be a lot. That depends on what ultimately Congress decides to do in the authorization. How big the envelope is will determine how many additional projects will be funded. But once again, if you look at the projects that we have entered into full funding grant agreements with, these are projects that were in fact designated in ISTEA. We were instructed to engage in those deliberations, to move towards those grant agreements, or they were also projects that received earmarks by the Congress over a series of years to move them to the stage in which they could have a full funding grant agrement. These are projects that were not chosen at the discretion of the agency. These are projects in which we were both directed and supported by the efforts of Congress, and we have tried to work with all of you to see that they come to fruition. But yes, they are beginning to fill up the envelope, and there is tremendous demand around the country that is going to create quite a squeeze as we try to deal with reauthorization. We are going to have to struggle with all of you as well, as to how we try to achieve that. Mr. Pastor. As you correctly stated, this effort is not only of the public transit people, but the Chambers and thebusiness community and advocates are now understanding that in order to solve our problems with traffic and getting people in and out to their work sites or schools or whatever, that everybody is going to have to get involved on a regional basis. At the same time, they also recognize that there may be a requirement of greater matching from the local level, and the mix of that is proper and has to be determined early and we go forward. I look forward to working with you, and hopefully, we can maybe make the envelope a little bigger so that the needs that you have in the growth areas of this country can be addressed. In Arizona, because I represent the state, but I think if you go to other western states, in the growth areas, you will find similar problems. The other problems we are having are that we not only have a traffic problem, we also have the EPA saying that you have to meet clean air standards, which is very proper, and building more freeways and adding more cars is not the solution. Mr. Olver. Would the gentleman yield? status of full funding grant agreements Mr. Pastor. Yes, sir. Mr. Olver. In the midst of this, I am very interested in this conversation, but I see that you have made 19 full funding grant agreements since 1993. How many of those are now or are any of them fully constructed and completed now of those 19? Mr. Linton. Yes. Mr. Olver. I would like to see the list of the 19 that have been reached up to now with a brief analysis, and I think it would be helpful to other members of the committee, so I would ask the chairman to get this as part of the record---- Mr. Wolf. Without objection. Mr. Olver [continuing]. Which are the 19 projects and what their present status is, that is, what their expected funding is, how much is already in, how much is the expectation. I would like to see a clear, short analysis of what your expectations under the budget level that you are asking for, how many years just to do those 19, and then what are maybe some group of the next set of priorities which gets really to what my colleague from Arizona, I think is greatly concerned about is, where are those places that are growing very quickly, some of them in the sun belt and southwestern parts of the country that we can expect because of the huge growth rate, that they are going to need some really new and innovative transit routes here soon, but have not come in as we know, so what you think are the next group of 19 priorities that are going to be coming up later. [The information follows:] The following table provides the information you requested on the nineteen Full Funding Grant Agreements (FFGAs) approved since 1993, including Section 5309 cost, funds received to date and outyear costs [if any]. In addition, there are a number of new starts projects being considered by various areas as part of the MIS process. Preliminary numbers from MISs underway which are considered to have a major transit component indicate a potentially large demand for new starts funding. We have identified a group of projects which have emerged from the developmental process and will be ready for implementation. We have committed or will shortly commit slightly over $3.7 billion to current FFGAs and intended FFGAs in FY 1998 and outyears. The Department's proposed NEXTEA would provide an additional $2.0 billion over the amount needed to fund existing/planned FFGAs and allow FTA to fund some of the next group of deserving new start projects. This will, of course, depend on the enacted level of the re-authorization and subsequent appropriations. [Pages 1057 - 1058--The official Committee record contains additional material here.] section 3(j) report Mr. Linton. We would welcome the opportunity to work with you and the chairman and other members of the committee. Here is Charlotte Adams, my associate administrator for planning. I know she has been up on the Hill on several occasions and I think probably with the T&I committee because of their major discussions about reauthorization, but we are available to share with you information on both the projects that we have in the pipeline, and those projects that are in the MIS. I know that there was report language that expressed concern about delivery of our 3(j) report and that you want to have it in time so you can deliver on those projects. I am happy to report, Mr. Chairman that I have in my hand, right here the 3(j) report. We have boxes available of them This report has a good deal of the information that you are requesting. Mr. Olver. Does it have a cohesive summary? Mr. Linton. It is drafted strictly for people like me who have a lot of documents to read and want it short and concise. Most of that is here for the projects that we currently have under consideration. However, some of the MIS projects, because we no longer determine when localities can enter an MIS, don't have the kind of data that we used to have when we had control as to when they enter into MIS. We don't have control over that, but we do have good data that we have collected that we will make available to the chairman and members of the committee as well to add to our hot off the press 3(j) reports that are here today. Mr. Olver. Thank you. Mr. Pastor. Thank you, Mr. Administrator. I look forward to working with you and thank you, Mr. Chairman. Mr. Wolf. Thank you. I can see you are pretty proud of having that there. Mr. Linton. Yes, Mr. Chairman. Mr. Wolf. We have a whole series of questions but I would like to comment on just four or five of the issues that came up. One, Mr. Pastor is exactly right, and I could be wrong, but I believe all of the full-funding agreements were negotiated during or after 1993. I could be wrong. There may be one or two that were not. Secondly, if you look at the numbers, more than 50 percent of the total goes to California, Oregon, and New Jersey, and that is unfair to Minnesota, Arizona, and others. That truly has to be looked at. Their transportation problems are as great as the other areas, and if you will look at the growth in some of our states. In fairness to them, although I don't represent Arizona, this is a national issue and a national committee, we need to seek more balance in the program. I think you really have to. Secondly, what Mr. Packard said, on the Santa Barbara issue, the committee included report language that directed you to fund the project. You funded the Kansas City project and, the Pennsylvania Consolidation Bus purchase. You to fund Santa Barbara, as well, because that has been the desire of the Committee and I would urge you, to find the necessary resources and honor the Committee's request. operating assistance Mr. Foglietta made a very good case on phasing out operating assistance. I think you ought to consider a gradual phase out of the operating subsidies. I hope, and we will have to all sit down and talk about it here in the committee, but I believe that rather than abruptly terminating operating assistance, we need to gradually ween transit authorities from operating assistance. Maybe we could do it over two or three years. I think in fairness, there probably ought to be a phase- out. Mr. Linton. Mr. Chairman, I really would like to continue to work with you and your staff on that issue, and I am very passionate about the concept. I think, quite frankly, that you joined us because you directed us to look at expanding definitions. I think we and APTA and others are in agreement over the definition aspect of it. I think there is support for the definition, but there seems to be some concern about the elimination of the operating assistance aspect of it. I think that is something that we need to continue to work on and look forward to working with you as we go through the deliberations on the final product. Mr. Wolf. With the previous definition change, it was going to be a dollar-for-dollar, and it has resulted in a dollar-for- dollar, an individual from SEPTA testified that a termination of operating assistance would be a hardship for them. I think that if you do phase it out over a two-year or three-year, FTA ought to come back and tell the Committee how you are working with APTA on an aggressive program to educate the transit authorities so that there is no sudden or unmitigated loss of operating assistance. Could you just submit for the record, the transit districts that have expressed on interest in test deployments of the stealth bus? Mr. Linton. Yes. Mr. Wolf. Would you submit that for the record? Mr. Linton. Yes, we can. [The information follows:] Success in obtaining commitments for ATTB test deployments has been very good. Eleven positive responses have been received to date. They are as follows: MTA New York City Transit, New York, NY. Washington Metropolitan Area Transit Authority, Washington, D.C. Phoenix Transit System, Phoenix, AZ. New Jersey Transit, NJ. Chicago Transit Authority, Chicago, IL. King County Department of Transportation, Seattle, WA. Capital Metropolitan Transportation Authority, Austin, TX. Greater Cleveland Regional Transit Authority, Cleveland, OH. Milwaukee County Transit System, Milwaukee, WI. staffing separations impact Mr. Wolf. Over the last several years, particularly during fiscal year 1996, FTA has witnessed a rash of separations. Seasoned employees have either participated in the buyout program; have been pressured out, we have been told; or have retired so much so that FTA's current staffing level is extremely low. In fact, the senior career staff of the agency appears to have been really hit hard with the retirement or departure of some very qualified and tenured career people. Given the departures and the current staffing level of the agency, do you believe that you now have the technical ability to review or audit comprehensively the agency's current grant portfolio? Mr. Linton. Let me just say---- Mr. Wolf. How hard do you think you have been hit from all the retirements and departures? Mr. Linton. We have been hit very hard. We have been able to maintain our responsibilities in operating the agency, but I will say that it has been difficult. It has required a lot more work from all of my staff. But I personally see to it that that is done. We have a significant number of our positions that are advertised for filling. Quite frankly, we have had some difficulty on occasions even filling positions. I would find it difficult to believe considering the state of the job market, but we have had some difficulty in getting responses. Several of my managers have said to me on a couple of occasions that they have posted positions a couple of times without getting a significant number of applicants to choose from, so we have even aggressively gone to colleges and universities and we are trying to do a number of things to try to meet those. We are aggressively pursuing that, because of the stress and the workloads. As you suggested the staff can't continue to bear the burden of a loss of senior talent. little rock, arkansas, light rail system Mr. Wolf. Just out of curiosity, do you think that the Little Rock, Arkansas, light rail system would be a wise public or federal investment for a city of about 125,000 people? [The information follows:] The Central Arkansas Transit Authority has proposed to implement a one mile- long tranist light rail link between downtown Little Rock and an 18,000 seat arena currently under construction in North Little Rock. The proposed system will utilize existing Union Pacific freight track. The upgrade of this track to passenger standards, improved signalization, and other capital costs associated with the project are estimated at $7 to $9 million. In FY 1997, Congress appropriated $1.99 million in Section 5309 funds to undertake a study evaluating the financial feasibility of the fixed guideway project. The city of Little Rock is also in the early stages of preparing a proposal that would extend the system west to the Central High School Civil Rights museum. Generally, smaller urbanized areas like Little Rock might have difficulty supporting a new investment in rail transit. A more important determinant than city size, however, is the types of land uses and built densities in the area served by a proposed rail system; these factors ultiamately contribute to an estimation of ridership, operating costs and recoveries, and economic development impacts of the project. The degree to which a proposed investment in rail meets locally-defined goals for improved mobility and air quality, achieves system-wide operating efficiencies, and supports community development objectives must also be considered when evaluating its worthiness. The Little Rock proposal is still in its very early planning stages; further study is required before all costs, benefits, and impacts can be known with any accuracy. Until that time, it is premature for us to speculate on the viability of light rail in Little Rock. hiring plan Mr. Wolf. Please provide a hiring plan indicating by month and by office the number of FTE FTA plans to hire during fiscal year 1997. [The information follows:] [Page 1063--The official Committee record contains additional material here.] meeting the challenge training Mr. Wolf. Mr. Linton, last year, the committee was critical of FTA's ``Meeting the Challenges of Change'' training program because, according to the course proposal, the course generated fear by asking probing questions. The committee also believed that the program was required of all FTA employees. The 1997 Act deleted funds for this training and included statutory language that prohibited training such as this. Is the ``Meeting the Challenges of Change'' training course still offered today? [The information follows:] The ``Meeting the Challenge for Change'' (MTCFC) workshop is no longer offered to FTA employees. When it was offered, participation was on a voluntary basis only. The purpose of the MTCFC workshop was to afford employees the opportunity to work cohesively as a team to recommend solutions to ``real'' organizational and management issues. The course agenda was identified through assessment meetings with FTA employees and were categorized as follows: Human Resources, Customer Service, Internal Communications Management, and Managing Change. The workshop offered management improvement techniques to enable FTA managers to accomplish the work with less staff, empower employees, utilize team concept, and delegate decisions to lower levels. The workshop also addressed an area of the National Performance Review for developing a multi-skilled work force through individual and group career counseling sessions, recommendations for structured rotational assignments and mentoring and shadow programs to increase employees' knowledge and skills in areas of interest. Mr. Wolf. Is this course the same program that was originally procured by the FTA from Alexander Consulting and Training, Inc., of Philadelphia? [The information follows:] Yes, however, the course content was based on subjects identified by FTA employees during the assessment meetings held prior to the contractor designing and delivering the course to the FTA work force. The firm that was awarded the contract was Alexander Consulting and Training, Inc. of Norfolk, Virginia. Mr. Wolf. If not, presumably there must have been a major change in the scope from work of the original contract. Was the contract rebid? [The information follows:] There was no major change in the scope of the contract; however, the course agenda was developed during the assessment meetings with FTA employees. The contract was modified to reduce the travel costs of the Regional employees by increasing the number of Regional training locations to six. No, the contract was not rebid; it did not require a competitive bidding process since it was awareded to an 8(a) firm. status of open grants Mr. Wolf. How many grants are currently ``open''? What does this level represent as a percent of total grants? [The information follows:] The Federal Transit Administration has 4,676 grants that are currently open. Over the past 3 fiscal years a total of 2,640 new grants were obligated which is an average of 880 grants being obligated each year. Mr. Wolf. How many grants does the FTA expect to ``close'' during fiscal year 1997? And 1998? How do these levels compare to fiscal year 1996? [The information follows:] In fiscal year 1996 the FTA closed 775 grants. In fiscal year 1997 the FTA expects to close approximately 860 grants which is almost ten percent above the 1996 level. We expect to maintain the same level of close-outs in fiscal year 1998. Mr. Wolf. What amount of recoveries is expected in fiscal year 1997? And 1998? How do these levels compare to fiscal year 1996? [The information follows:] In the past three years the FTA has averaged $130 million in recoveries. In fiscal year 1997 and fiscal year 1998 we expect to maintain a similar amount in recovered funds. Mr. Wolf. What is the current unobligated balance of funds recovered by FTA's grant close-out activities? Are those funds available until expended once they are recovered or is the period of availability limited? [The information follows:] As of March 23, 1997 the Federal Transit Administration recovered over $23,800,000 in both closed and open projects. These funds are available until expended, however there are restrictions on the period of availability of allocations. In general, funds recovered from projects remain with the section and grantee until they lapse. Most of FTA's programs have a period of availability of either three years or four years. After they lapse, they are either transferred to the most recent appropriation heading for any such section or remain with the account and are reappropriated to all areas in the succeeding fiscal year. projects funded with recoveries Mr. Wolf. Please delineate by activity and cost the programs or projects funded with recoveries in fiscal years 1994, 1995, 1996, and those activities planned or programmed for fiscal years 1997 and 1998. [The information follows:] The activity and cost of the programs funded with recovered funds for fiscal years 1994, 1995, and 1996 are listed on the table below. Those activities planned or programmed for fiscal year 1997 reflect actual distribution of recoveries through March 23, 1997. We estimate a similar distribution of recoveries as they become available for the remaining two quarters for fiscal year 1997 and fiscal year 1998. [Page 1066--The official Committee record contains additional material here.] use of recovered resources Mr. Wolf. What activities are authorized to be funded with the resources recovered through FTA's close-out activities? Are funds recovered under the section 3 program only available for other capital projects for example? [The information follows:] Funds recovered under the Research Training and Human Resources account are authorized to be transferred to the Transit Planning and Research account and are distributed with section 5314, National Planning and Research. Amounts recovered under section 5 are authorized to be transferred to section 5307, urbanized area formula program. All other recoveries remain in the account where they are recovered and are used for the purposes for which they were originally intended. Funds recovered under the section 5309 program are only available for other capital projects. chicago circulator Mr. Wolf. I understand that the Chicago Circulator project was closed out in December. What were the recoveries from that particular grant? [The information follows:] As you know, the City of Chicago officially canceled the Chicago Circulator project in October 1995 after the State of Illinois refused to provide a previously agreed-upon \1/3\ share of the project and the U.S. Congress failed to earmark funds for the project in FY 96. After the project was officially canceled, the project underwent an exhaustive audit to determine final eligible cost prior to being officially closed out. This close-out audit has been completed and final figures on the project are provided below: Amounts originally obligated to the project: $115,970,276. Amounts deobligated and reprogrammed: $86,525,158. Amounts obligated and drawn down on the project: $29,445,118. [spent on eligible items-verified by final audit] The final close-out audit found only about $2.1 million of the $31.5 million spent on the circulator project to be ineligible. The City of Chicago has reimbursed FTA for that amount. wmata oversight staffing Mr. Wolf. On a controversial issue, local, close to home, over the previous two years, the Committee has been concerned about the staffing of the WMATA oversight and has discussed this issue in our reports. We learned not from you but from the general manager of Metro that you decided to transfer the oversight of WMATA from Washington, D.C. to Philadelphia. I know that Philadelphia has better hoagies and better cheesesteaks than Washington, but that is not a good enough reason to change. We had asked you to reconsider. You then refused. Because Metro is here in Washington and it makes more sense to administer its oversight here than back there, the committee was forced to include bill language requiring you to maintain the WMATA oversight from FTA's headquarters. In addition, the conferees provided two FTEs to provide the oversight. Last year I learned that you terminated the existing staffing arrangement and disbanded the experienced WMATA team, transferring or detailing the individual employees to unrelated duties. We questioned whether the new staff was experienced with WMATA. We were particularly concerned because of the then- pending NTSB investigation, of which you are very much aware. We learned that the senior person assigned to WMATA oversight was also assigned to the primary responsibility for the Olympics. During the hearings last year in response to my specific question, ``What percentage of his time deals with the Olympics?'', you replied, ``Very small.'' We have since learned that between the date of our hearing and the close of the Olympics, he spent more than a very small percentage of his time on the Olympics. He travelled several times to Atlanta, posed with the Vice President for a photo op. In fact, he did such a great job with the Olympics, and I am sure he did--I don't question the person's capability--he received a Secretarial level award and a large cash bonus specifically citing his Olympian efforts and not the WMATA efforts. He was subsequently promoted out of the WMATA oversight function to a high level position in your planning office and may very well be here today. Would a person receive a bonus if he just spent a very small percentage of time on the Olympics? I am really concerned that you may have misled the committee. We have worked hard on WMATA. We are coming down to the completion of the system. It is a well-run system. The new general manager is here. But oversight is very, very important, and it just seems that you have been resisting something that I don't think should be a very controversial issue. I don't believe that you are complying with the committee's specific instructions. It is not that we are asking you to lessen the FTA's oversight. We want you to have aggressive oversight. In August of '96, you temporarily assigned the title of WMATA team leader to a new deputy associate administrator for program management, someone with no previous experience in the oversight area. I am concerned that you haven't really complied with the law. I am concerned that you have been fighting the committee on something that ought to just be a slam-dunk; it ought to be something on which we can work together. Would you comment on that? Mr. Linton. Sure. Let me just say that we have two FTEs as requested assigned to WMATA. One of the individuals has ten years' experience working with the WMATA team. The other individual is a general engineer who had previous experience working on the urban renewal project in Washington related to WMATA, and has been there for 11 years. Both of those individuals are assigned to the WMATA desk in our office. They have no other assignments. They will continue to be there, and we have no plans of moving the WMATA to Philadelphia. I agree with the chairman. I myself personally have found the idea of having WMATA oversight in my office to be valuable, so I have changed my view on that. Mr. Wolf. You have changed your view? Mr. Linton. Absolutely. I strongly support it staying in the Washington office, and we have two staff members assigned to it, and if I can get additional resources, I will assign another one. There is no reluctance on my part, and in fact, as we may talk about WMATA later on this afternoon---- Mr. Wolf. We will. Mr. Linton [continuing]. I think there are some major opportunities and good reasons for both the oversight to be in the office in Washington and major benefits, not just for you and I but also for the nation in terms of WMATA being a laboratory for a lot of things that we would like to do. So it gives me, the administrator, a lot more personal time as well to work with that staff in our office as well as their staff on a number of those projects. Mr. Wolf. I am glad you changed your mind, because that is what we thought, and therefore, I am not going to press you on the guy's Olympic award as to why, but I do think it is good, and so the rest of the questions, I will just submit for the record and we will move on. I had some other questions, but you have raised my comfort level. wmata oversight/ada compliance Mr. Wolf. I will cite for you one example where a serious problem has arisen with WMATA which you have not properly addressed. In April, 1995, you and your general counsel, without consultation with any technical staff, agreed to grant WMATA a determination of equivalent facilitation for the use of an undeveloped, unproved, and untested technology to comply with the ADA requirements. WMATA has been unable to meet the deadlines and has been granted by you a time extension with another one pending. Despite the fact that you had a WMATA project management oversight contractor under contractor for several years, it was not until a few months ago that you asked for a technical review of this situation. Why did you wait so long to review this situation? [The information follows:] In approving WMATA's request for a finding of equivalent facilitation, it was clear that WMATA would have to undertake a product development program to produce the Infrared Integrated Indicating System. Granting this finding was entirely consistent with the provisions of the Americans with Disabilities Act Accessibility Guidelines (ADAAG) and FTA's long standing policy of easing the introduction of new technology into mass transportation service. Additionally, it appeared to be a worth while effort to provide an acceptable alternate to this installation of the detectable warning surface required by ADAAG that, you will recall, had been resisted so strenuously by WMATA. Moreover, such a detectability system might have other applications that would prove to be beneficial to persons with visual disabilities. Allowing WMATA Alternatives under a grant of equivalent facilitation was strongly supported by Congress, including this committee. This committee encouraged FTA to test the proposed detectability system on the WMATA system because WMATA is a well run, long system. The FTA acted in good faith in accepting the installation schedule proposed by WMATA. It is now clear that WMATA did not understand the time required to bring this product from concept to reality. In approving WMATA's first request for a six-month time extension, FTA was provided with an accelerated and amplified installation schedule. There was no hint, at that time, that the product development process was not proceeding well. However, with the second request for a six-month time extension, submitted just days before a critical installation milestone date, it became apparent that this development process was in trouble. At that time I assigned the WMATA oversight contractor to investigate the program. Mr. Wolf. Now, a law suit is pending [filed September 3, 1996] against not only WMATA but FTA and DOT. The ADA legislation required that key station comply by July 26, 1993. Here we are nearly four years later. I have learned that your PMO contractor has estimated that it could take an additional 24 to 33 months for WMATA to implement this system. Do you intend to grant WMATA another extension? On what basis? [The information follows:] I have deferred a decision on WMATA's request for a further extension of time to install the Infrared Intergrated Indicating System (IRIIS) in the twelve stations of the Metrorail Yellow Line to give WMATA an apportunity to review the Project Management Oversight contractor's report and examine the continued viability of the IRIIS prototype development. By mid-April WMATA is to consult with FTA as to whether WMATA should complete the development of IRIIS. Mr. Wolf. It appears that it was your personal decision to allow WMATA to go forward with this inventive technology. If WMATA is held accountable, shouldn't you also be held accountable? [The information follows:] The Americans with Disabilities Act (ADA) guidelines issued by the Access Board permit departures from particular requirements of those guidelines ``where the alternative designs and technologies used will provide substantially equivalent or greater access to and usability of the facility.'' The concept of equivalent facilitation derives from language in the Report of the Committee on Education and Labor, accompanying the ADA, in which the committee stated its intent as follows: [T]he regulations will include language providing that departures from particular technical and scoping requirements, as revised, will be permitted as long as the alternative methods used will provide substantially equivalent or greater access to and utilization of the facility. Allowing these departments will provide public accommodations and commercial facilities with necessary flexibility to design for special circumstances and will facilitate the application of new technologies.'' H.Rept. 101-485, Part 2, p. 119. The same language is found in Senate Labor and Human Resources Committee Report accompanying the ADA when it was introduced in the Senate the previous year. S.Rept. 101-116, p. 70. In April 1995, acting within this authority, I found that WMATA's current platform edge safety system, when supplemented by the installation of new technologies, satisfies the equivalent facilitation standard. That decision is currently under review in federal district court; if the court upholds the decision, the plaintiff's claim against WMATA alleging a violation of the ADA will be resolved in WMATA's favor. In November 1996, all parties filed motions for summary judgment. FTA and DOT urge that the equivalent facilitation decision was a reasonable exercise of authority, is supported by the record, was rendered after ample opportunity for consultation with the American Council of the Blind and other representational groups, and is entitled to deference in light of the legislative history and the Access Board's explicit authority that the FTA Administrator has the latitude to grant such determinations. The court has not yet acted on the pending motions. operating assistance under reauthorization proposal Mr. Wolf. I had a question about a phase-out of operating assistance, but I think you have told me that you tend to agree with us on the phase-out. I am not trying to put words in your mouth, but you gave me the indication. What are your feelings? We don't have to go into great detail and I am trying to move along so that everyone is not kept here too late. Do you support the concept of a phase-out or working with the Committee on this? Mr. Linton. Mr. Chairman, I would like to work with the committee. Mr. Wolf. I mentioned the gentleman from SEPTA does not share your opinion that elimination of transit operating assistance will not be a problem. I am not raising SEPTA because you are from Philadelphia, but I raise SEPTA because Mr. Foglietta raised it, and the gentleman was from one of the largest transit authorities that testified. Mr. Linton. Mr. Chairman, as you know, I spent a significant number of years on the SEPTA board. Mr. Wolf. I know that. Mr. Linton. I was the driving force in the state legislation that was passed in 1991 which I sponsored which was enacted into law that provides a lot of resources for SEPTA. I battled for them for years even prior to being on the board. I am keenly aware of SEPTA's problems and dilemmas. I shouldn't say this on the record, but I also have heard from someone in SEPTA who said that this proposal would be a great idea during the years in which they would not have a senior member on the committee and would not have the good access to some of the resources that are available as a result of that. That came to me from a member of the SEPTA staff, but I will not name that individual. We will work with you on this issue and we will pursue it further. Mr. Wolf. What outreach activities do you plan to assist transit authorities in adjusting to the new definition and to mitigate any sudden loss? Mr. Linton. I think we strongly agree with you. We recognize that when you make these kind of changes, there is an educational process that must take place, and we have already talked about putting together forums with APTA so that the definitional changes can be implemented and also using some consultants if we have those available to work with transit systems individually to show them how they can take advantage of this, our state infrastructure banks, and a number of the other innovative techniques that we will have that will allow them to get more resources. Mr. Wolf. During the 1980's, all transportation sectors saw increases in productivity except for public transportation which fell 40 percent. Studies have shown that most federal transit dollars went directly into wage and benefit increases for transit workers rather than into improved services. What leads the FTA to believe that permitting areas of population of less than 200,000 to use of all of their formula funds for operating costs will improve transit agencies' efficiency and improve transportation services? Mr. Linton. Yes. Our new proposal will give properties under 200,000 more latitude to use operating aid than they had before. You are correct. We also recognize in the last couple years when there were reductions in operating assistance that there was some effort to hold those properties harmless because it was felt that they were disproportionally impacted on by a reduction in the operating costs that took place in previous years. We think that this just gives those properties the flexibility to deal with the same needs that the committee felt they were vulnerable to when the committee decided to provide a hold harmless provision. We just decided to give them the flexibility of being able to use that if they so chose to do so, but we expect that many of these properties will continue to focus on capital, on purchasing buses and vehicles. But under this new provision, we will give them the local decision- making ability to have more flexibility. Mr. Wolf. How long do you propose to give them that opportunity? Mr. Linton. That is a continuation in our reauthorization proposal for the entire six years. Mr. Wolf. While FTA is proposing to more broadly define allowable capital expenditures to include associated capital maintenance, FTA is proposing to eliminate the transit operating assistance program entirely, in one fell swoop, for all properties except for the smallest transit authorities. If this proposal were adopted, I would imagine that a new adjustment period would be necessary for transit properties to fully understand what operating costs could be defined as capital expenditures and for the properties to seek other local sources of funds to make up any shortfall. Why did FTA not believe a phase-out of the program or a safety net was necessary and propose instead an abrupt termination? [The information follows:] This proposed approach is in the budget because transit agencies have sufficient maintenance resources whicb can be reallocated from an operating to a capital expenditure making a phase out unnecessary. Moreover, grantees already have the data management systems in place to take advantage of the revised capital definition and accounting changes will not be necessary. Mr. Wolf. The general manager of SEPTA testified before the committee that such a termination would add a tremendous strain on an already troubled and old transit property like SEPTA. Does FTA not share these concerns? [The information follows:] Our analysis indicates that SEPTA will be able to mitigate the effects of the operating assistance elimination by using the revised definition of preventive maintenance. In FY 1995, SEPTA used $24 million in Federal operating assistance. In the same year, SEPTA's maintenance expenditures were $200 million, an amount eight times greater than the Federal operating assistance used. Therefore, if SEPTA reallocates approximately one-eighth of current maintenance expenditures from operating to capital as allowed by the redefinition, the elimination of operating assistance will be mitigated. program levels Mr. Wolf. The fiscal year 1998 budget request for transit programs of $4,380,000,000 is essentially a straight-line budget request when compared to the fiscal year 1997 enacted budget. Yet, I know you would agree or hope you would agree that the majority of transit systems, particularly the larger ones, will see a net decrease from last year's level if your budget is enacted since the access to jobs and the rural technical assistance programs are to come off the top, and you have proposed a reduction of almost $130,000,000 or 17 percent in rail modernization. Mr. Linton. I am not sure that the computer printout that I have shows that. Mr. Wolf. What does it show? Mr. Linton. In fact, it seems to indicate that there are more winners than there are those that have less resources in the new formulation. I am sure that we will submit that to you for the record, but I think the charts that we have will reflect that. Mr. Wolf. You can submit it for the record, but if you have something there that you want to refer to now, or if you want to wait for the record. Mr. Linton. I think we will submit them for the record, but we do have this information that is here. [The information follows:] The following table shows that 315 of the 406 urbanized areas are winners. In large areas, 62 percent are winners. Each of the losing urbanized areas had a significant bus earmark in fiscal year 1997 that cannot be guaranteed in fiscal year 1998. [Page 1074--The official Committee record contains additional material here.] innovative financing programs Mr. Wolf. The Administration proposes $2,000,000,000 for innovative financing programs to be administered by the Federal Highway Administration. How will FTA ensure that it has a place at the table and that transit capital projects have an opportunity to take part in these programs? Mr. Linton. Let me just say that those programs will include items such as state infrastructure banks. The first ten state infrastructure banks that we approved a couple years ago, out of those ten, I believe eight or nine of those actually have transit provisions within their SIBs. Mr. Wolf. What is the most transit one? Mr. Linton. I don't know the dollar amount, but both the FHWA and FTA administrators have had the responsibility of signing off on the certification for those programs. Mr. Wolf. You said that they had a large, but what of the ten had the most transit involved? Mr. Linton. The ten projects to date have not expended money. What they have put in place were the procedures where they could in fact spend money on transit or highways, and I believe eight or nine of the ten have put in place procedures so that they could spend money on transit. We saw that as a plus, because they had the option of going one way or the other or both. We won't know until, I guess, May of this year what the actual expenditures have been of those ten and how they begin to spend the funds. We are also working with FHWA as we both review the proposals from the additional states that were authorized in the statute in 1997. We will also have the same role as we try to expand this to all 50 states in our reauthorization proposal. formula grant consolidation Mr. Wolf. A major change in the budget is the consolidation of all formula driven grant activities under the formula program to allow for greater flexibility and predictability at the local level. That sounds good, Mr. Administrator, but if it is such a good idea, why do you think the American Public Transit Association and its 1,100 members state ``the existing program structure is right for the transit industry and [its] customers''? [The information follows:] I have discussed FTA's fiscal year 1998 program with APTA and I can assure you our budget is designed to improve the nation's transit systems; and I will defer to APTA to describe directly to you their support or concerns about specific Administration proposals. I will state that our proposal does move the ``discretionary'' element of the Bus and Bus Related and Fixed Guideway Modernization programs from Washington, D.C. to the state and local level, and that is a good thing for APTA members and transit's customers. Moreover, our proposal continues the long-standing support for both bus and rail modes, and historic and new fixed-guideway systems. The greater flexibility and predictability FTA's proposed funding categories will improve on past, more rigid budgets by allowing for more direction of resources to needs. I anticipate further discussions about the budget with you and with interested parties such as APTA and am certain that our proposal is sound. capital versus operating costs Mr. Wolf. The budget justifications indicate that the definition of capital will be expanded to include costs associated with preventative maintenance, as you referred to earlier. Does this differ technically with the President's budget, and if it does, how does FTA propose to change the definition of capital costs? Mr. Linton. The present budget is built on and accommodates that definition. Both our reauthorization proposal which the President announced last week as well as the 1998 budget that we are submitting to your committee for review is based upon that expanded definition of capital. Mr. Wolf. Two years ago, this Committee included language that broadened the definition of capital expenses. How have the transit authorities responded to this new flexibility and has the FTA seen a decline in the aggregate amount of federal operating assistance that transit systems seek under the formula program? [The information follows:] FTA implemented the capitalization of vehicle overhauls in March, 1996, about mid-point in the fiscal year and many grantees had already applied for their grants earlier in the year. FTA allowed those grantees to utilize the vehicle- overhaul program through budget amendment. Statistical data on the overall use of the program will not meaningful until after a full fiscal year grant cycle. Initial reaction by grantees has been very positive, and the capitalization of vehicle overhauls funds has been accelerating. As of mid-March, 1997, over $64 million of federal funds have been provided under this program. Mr. Wolf. At the time the definition was changed, the FTA thought that it would mitigate the reductions of $200,000,000 in operating assistance on a dollar-for-dollar basis. Now, in fiscal year 1998, does the FTA again expect that the proposed changes will mitigate the elimination of $400,000,000 in operating assistance on a dollar-for-dollar basis? Upon what evidence do you base your conclusion? [The information follows:] FTA analysis indicates that with the capital redefinition, the amount of expenditures transit agencies will have available to reallocate from operating to capital is approximately eight times greater than recent Federal operating assistance used. For example, in FY 1995, transit operators in areas over 200,000 population (the areas affected by the proposed change) accounted for $163 million in Federal operating assistance expenses. In the same year, these operators had $5.2 billion in maintenance expenditures; maintenance expenditures which would be classifed as capital expenses under the proposed definition. Consequently, if transit agencies reclassify only a portion of current maintenance expenditures from operating to capital as allowed by the proposed change, they would be held harmless. Out confidence that operators will successfully employ the new definition, combined with the other benefits of the proposals such as harmonizing the transit and highways capital definitions and protecting the Federal capital interest, make this a very sound proposal. Mr. Wolf. FTA does not anticipate the current outlay rates used for the capital portion of the formula grants program to change significantly due to allowing preventative maintenance to be defined as an eligible capital expense. Why does FTA believe this to be the case--have, for example, formula grant outlays not increased due to changes made a year ago in the interpretation of associated capital maintenance and bus rehabilitation? [The information follows:] Outlay rates are not expected to change with the redefinition of capital based on the actual experience of the Federal Highway Administration. Including maintenance as an eligible expenses in the Federal-aid Highway program did not result in an increase in their outlays. Actual FY 1996 outlays were actually lower than originally estimated in the beginning of the fiscal year, in spite of the changes made to associated capital maintenance and bus rehabilitation? rail modernization formula Mr. Wolf. What is the FTA's position on APTA's recommendation to modify the rail modernization formula? Do you believe that newer areas receive a fair take of rail modernization funds and how have your relationships been with APTA? I understand they have some sort of an agreement that they were meeting and came up with some ideas. Mr. Linton. I understand we weren't involved in the negotiations or the discussions. Mr. Wolf. But they must talk to you, though. Mr. Linton. Well, you know, quite frankly, it was not something that was shared with the administration. In fact, it was not something that was shared with me. I only heard about it as a side-bar conversation. As a result of that, I am not familiar with the details. We still have to examine the proposal. However, I understood that the source of the resources that they are going to use to make the change as they are suggesting is going to come from the oversight money, that they will use the money that we currently use for oversight to make the adjustment. There will be no money available to do the oversight that the IG and everyone else has been insisting for years that we do. That money that is being taken off the top now for oversight will be used to make this adjustment in the rail mod. That is what I have heard, but I haven't seen it. Mr. Wolf. Does that make sense to you? Mr. Linton. No, it doesn't. It is clear, with the number of projects that we have, that we need to maintain the federal oversight of the use of funds in construction, and we don't have any other source to be able to do that. overmatch--reauthorization Mr. Wolf. What about an overmatch? Mr. Pastor mentioned overmatch, and you mentioned the Dallas overmatch, if my memory serves me earlier. What about the ratio formula change? Do you think highways and transit should be the same? Mr. Linton. Our reauthorization proposal is silent on that, I believe. ISTEA provides a provision that encourages overmatch, and we have increasingly seen that. That is why I have cited the Dallas project as well as the Queens Connector in New York project. We are seeing more and more projects where there is both overmatch and also local governments going through tax referendums to provide local support. That was done in Baltimore and in Denver where the local governments have paid for the first one or two segments of a system with their own local money and then come to the federal government for support of the extensions. We have seen more and more of that happening, and we think it is a good thing to encourage. new starts--rail versus bus Mr. Wolf. While proposing to fold a number of transit programs into a new formula program, the Administration continues the new starts program. Would you agree that the current system of providing federal funds specifically for fixed-guideway, new starts systems induces metropolitan areas to pursue more costly, less flexible systems compared to flexible route transit systems such as buses which can use rights-of-way that are shared by other vehicles, i.e., Houston? Mr. Linton. Let me---- Mr. Wolf. You mentioned a statement that we made. We raised that issue. What are your thoughts--I hope we are just not getting locked into things because it was done that way before. What are your feelings about this? Mr. Linton. I do not and the agency does not favor rail over buses. Mr. Wolf. What percentage of the agency's budget goes to rail versus buses? Mr. Linton. I think it is probably a very small percentage if you look overall. The majority, the great majority---- Mr. Wolf. Well, if you look at total spending for rail, everything. Mr. Linton. The great majority of the agency's money does go to bus. The new start projects themselves get a lot of attention, but that is only 25 percent or one-third. Mr. Wolf. One-third. Mr. Linton. A much smaller percentage of our overall budget is in fact in the new-start category, but that is the one that gets a lot of attention. A substantial portion of our funds goes to both maintaining and buying buses and bus-related facilities. Mr. Wolf. What percentage? Mr. Linton. 50 percent is going to bus. Mr. Walker. I am depending on the lady on the end. Mr. Wolf. And does that mean 50 percent on rail then? If you would just submit that and---- Mr. Linton. Sure. Mr. Wolf. I am now operating on 50-50, but you can just submit it. Mr. Linton. Let me further answer your question if I may, Mr. Chairman. We are not showing any particular leaning towards rail or bus. In fact, the new start process is one in which the local governments are supposed to look at alternatives. We have found that many of them are moving towards rail, but we also have some that are moving--in fact, towards bus. In Cleveland, a project that was identified early on, the Euclid Corridor project was one that we asked to be reprogrammed. That was initially identified as a rail project, and after going through the alternative analysis and MIS, they chose to go to an enhanced bus plan and take the lower cost alternative. We readily will enter into an agreement with them on making that choice. [Additional information follows:] Of the total funds obligated under FTA capital programs for FY 1996, that is $4,250.8 million, 41 percent funded bus capital needs while 59 percent funded traditional rail modernization and new rail starts activities. Mr. Wolf. But does that happen a lot? That is not your fault necessarily, but does that happen a lot? A rail comes up, and I am going to jump ahead and get into some of these rail questions on new start funding and oversight, but does that happen a lot? Mr. Linton. It does not happen a lot. The vast majority of projects that are coming out of the new start pipeline are focused on heavy rail and light rail, but let me just say that we do have projects like the Pittsburgh Busway. We do have projects as you referenced, the Houston Regional Bus Plan. I just made reference to the Euclid Corridor project. We have a very interesting project in Oregon, in Eugene, Oregon, where they are going to look at a very, very exciting bus guideway system that we think has tremendous possibilities in other locations around the country. We do not dictate but we think that there are other systems that should be looking at other options and not just pursuing the areas of rail as well. formula changes Mr. Wolf. As we discussed earlier, a major change in the budget this year is the consolidation of many transit programs under a new formula. Should transit capital assistance be allocated to states and localities in a way that mirrors federal aid highway assistance to guarantee a minimum return on the taxes that they send to Washington? Mr. Linton. Our federal---- Mr. Wolf. If that were the case, how would that work? I mean, I know how the mechanics would work. I would like for the record if you could just submit to us a model, if you will, based on that, assuming that we had the same program in federal highways that we have in transit or vice versa, how would the different areas do based on that, and I would just like to get your thoughts on it. Mr. Linton. I think we can try to do a commuter run and see if we can get that information to you. Clearly, our transit formula program is based on a number of variables including miles, population, density, and a number of variables that are put within the formula. The purpose of that is to try to direct the money to the areas where the needs are. It is clear to me that there are transit-intensive areas where the needs and the population densities as well as the mileage utilized indicate a need for additional support. I think if we look at the nation as a whole, and as we look at all of our federal funds, we try to deal with the needs within this nation and sometimes, that means in some programs that one city or one state is being helped because they have that particular problem and other cities do not have that problem and they don't get those resources. That is what I think is the nature of federal government, so I actually support the current structure that we have, but we will provide for you a run that will show something that will parallel what is done with highway funds. [The information follows:] [Page 1080--The official Committee record contains additional material here.] transit formula distribution Mr. Wolf. Why did the Administration not seek to change the allocation formula under the transit formula grants program? Do you believe that the current formula represents the best distribution or is better than other alternatives? [The information follows:] We believe that the present formula provides a good distribution based on related transit needs. The formula includes a transit service level and urbanized area characteristic factors. Service level is represented by fixed guideway route miles and revenue vehicle miles and bus revenue vehicle miles. Urbanized area characteristics include population and population weighted by population density. In addition, there are incentive tiers designed to reward system efficiency and effectiveness, which include bus and fixed guideway passenger miles and weighted by passenger miles divided by operating costs. The formula provides relatively higher amounts to areas with higher population, population density, transit service levels, and efficient and effective transit service. The weights included in the formula fairly distribute funds between those areas with large amounts of existing service and those with potential needs for service. All in all, the formula does a good job of allocating resources to areas with the most need for transit. Mr. Wolf. FTA seeks to level the playing field between the highway and transit program by expanding the definition of allowable capital expenditures to include maintenance of capital assets. Similarly, does the FTA propose to apply the two-year Byrd test of solvency to the Mass Transit Account rather than the current one-year Rostenkowski test? How would such a change affect FTA's ability to fund new projects? [The information follows:] The NEXTEA reauthorization proposes to use the Byrd Amendment solvency test to assure that current commitments of the Mass Transit Account are covered by its financing and to bring us more in-line with the highway program. The intent of the Byrd and Rostenkowski amendments is to assure that the Highway and Mass Transit Accounts remain solvent. If, for any year, the unfunded authorizations are greater than the estimated income for the next one or two years, as appropriate, across-the-board cuts in transit or highway apportionments are required. By using the Byrd solvency test, the Mass Transit Account is able to support a fully trust funded authorization level of $30.8 billion over the six years of NEXTEA. However, the Rostenkowski solvency test would fail in the sixth year. new starts full funding grant agreements Mr. Wolf. The budget today you present reduces funding for new starts $170,000,000 below the levels contained in the full- funding grant agreements signed by FTA. In doing so, project costs will increase and further strain FTA's portfolio in the outyears. Under such circumstances, how can we be sure we don't penalize existing projects and cost-effective proposed projects by making new commitments to big-ticket projects with questionable cost-effectiveness? Mr. Linton. Let me just say that we, like all of us, are constrained by the desire to balance the budget by 2002. As we constructed our budget submittal, we were both guided by a desire to continue our commitments and the investment in the infrastructure and, at the same time, to try to meet the goal of balancing the budget by 2002. We believe that the proposal that we submitted, even though it is less than the schedule that we had worked out with the various FFGA grantees, is one that will allow us to meet our commitments by the end of ISTEA-II or NEXTEA, and will still allow these projects to move along on a good pace to completion. In addition, the authorization level in our NEXTEA proposal would allow us to raise those individual appropriations in future years if the economic conditions warranted. Mr. Wolf. I think the economic conditions will be more difficult from the budget point of view each year. This year, we are faced with big problems, and next year, it is going to get worse. The committee is looking at the whole FAA. We have a big hole in FAA's budget and nobody wants to reduce funding aviation safety. I don't know what is going to happen. The budget requests $634,000,000 for new starts. If this level of funding is sustained over the next several years, which we don't even know if it will in FTA will not be able to issue another FFGA until the year 2003. What do we tell the other transit systems that are preparing for federal participation in their projects? Do you just say the cupboard is bare? Mr. Linton. It is my impression that if we pay out in the outyears for the projects that we currently have FFGAs, or propose FFGAs, that the commitment would have to be made in NEXTEA to the tune of about $3,700,000,000. Mr. Wolf. What about if you sign full-funding agreement-- you are ready to sign two more full-funding agreements? Mr. Linton. We are including those in that number. Mr. Wolf. When are you going to sign them, if you do sign them? Mr. Linton. We are not able to sign a full funding grant agreement with Sacramento. We do have some issues with the available authorization. Mr. Wolf. If you didn't sign the full-funding agreement in Sacramento, and I am not against any of the projects. I want to make that clear. The difference there would be a savings of about $103,000,000. Mr. Linton. That may be correct. Mr. Wolf. So when would that be available for new projects? In the year 2003? Mr. Linton. Actually, it will depend on the authorization. If in fact, we look at the current level of authorization which has been in the area of $5,000,000,000, our commitments into that authorization would be $3,700,000,000, so there will be money within---- Mr. Wolf. When would that be paid by? When would they be finished? Mr. Linton. Some of them go out to the end of the authorization. Mr. Wolf. That assumes a fully authorized level, and we have never been at that level. I think you see the point that I am trying to make. If you would want to comment---- Mr. Linton. Let me just say once again that we proceeded as the authorization legislation suggested that we proceed, and we may in fact have the same dilemma in ISTEA-II. The issue will come down to the deliberations that will take place with the Congress as to how it is decided to proceed with major capital investments. We have offered our reauthorization proposal, but our reauthorization proposal does not speak to how Congress will deal with issues of identifying projects for the next authorization. Mr. Wolf. If the FTA cannot fund within the existing budgetary constraints the 13 full funding grant agreements that have already been signed, why is the FTA so eager to sign two additional full funding grant agreements that will commit the agency to an additional $1,000,000,000? Shouldn't we finish what we have started before we initiate new ones? [The information follows:] The reduction applied to FTA's new starts budget in the President's fiscal year 1998 budget request was necessitated by the drive to achieve a balanced budget. The recommended level will allow these thirteen projects to continue their activities without incurring any consequential delays in project implementation schedules. Moreover, the proposed budget reduction in this category does not affect the President's original commitments to these projects. Those commitments stand as pledged. Also, this reduction does not signal any lessening in the President's overall commitment to mass transit. This Administration remains willing to provide long term commitments, within existing commitment authority, to projects which meet the new start requirements and are ready to proceed into construction. The extension of BART to the San Francisco Airport and Sacramento's south LRT extension are projects which have met these requirements. It should be noted that the commitments made to date are within the commitment authority provided by the Congress in ISTEA and comply with Congressional direction made with regard to projects specified in ISTEA. major investment studies Mr. Wolf. Last year, you indicated that FTA was aware of 53 major investment studies currently underway throughout the country that may lead to requests for section 3 new start funds. What is the number today? It was 53 last year. Is it up any at all? Mr. Linton. I think there are 68 that we know of now in the pipeline. Mr. Wolf. So from last year, it went from 53 to 68. Again, you can see the problem. There was a rumor that we have heard that a nationally respected engineering consulting firm was touring the country and approaching medium sized cities offering transportation systems analyses services. For a few hundred thousand dollars, these firms said they would look at the data, determine that the city would be well suited for a light rail. They subsequently suggested that the city obtain federal funding for preliminary engineering and even go so far as to provide the city the names of Washington lobbyists to better position them in the annual bidding for appropriations. These engineering consulting firms, some might say, are in it for the short haul, because they get their money up front. The cities would then be used to secure $20,000,000 or $30,000,000 for major investment studies, preliminary engineering, and design costs. Does this trouble you or have you heard this or does thistype of activity trouble you as the administrator? Mr. Linton. I haven't heard it. It does trouble me, but it doesn't surprise me. It is clear that as properties leave the Hill and have discussions with their members, they often find themselves in my office, and many of them come with their plans for their future projects. As I stated earlier in part of our discussion, I am always very clear in discussing the magnitude of demand and the limits of the resources. I guess sometimes, individuals come to my office with great smiles and they leave with sad faces, but I think it is important to be responsible in giving people accurate and clear information. I would hope that we do that as we go through the deliberations of NEXTEA, that we set out a process that clearly identifies priorities. That we set out a process that clearly identifies fairness, and we set out a process that lets people who are in this pipeline know what the realistic expectations are for their projects so that if the resources won't be here, they can explore other resources such as state infrastructure banks, bond financing, and the federal credit program that we hope to have initiated in our reauthorization proposal. We would hope that that kind of discussion takes place in the deliberation of NEXTEA. Mr. Wolf. I am going to ask one more question and then yield to Mr. Pastor to see if he has any questions. I think part of your role should be to be the defender of the weak, also, to speak out on some of these issues, because who you hire to represent you might not be an indication of how successful you are. My mom never drove. We lived at 70th and Reedland, just up the street from Elmwood. You know where that is very, very well. People like that can't hire powerful firms in town to represent them. I see things going on that trouble me deeply. I see the Chinese are represented by powerful firms in this city. Back in the '60s and '70s and the '80s, no law firm would have ever represented the Soviet Union when they were persecuting those of the Jewish faith; they were persecuting Pentacostals; they were doing all that. Now, in China, we have Catholic priests in jail, Catholic bishops in jail. We have evangelicals in jail. We have persecution of Muslims, persecution of Buddhists. We have sold weapons to Saddam Hussein that were used to kill American soldiers. The Chinese have more gulags than the Soviet Union, and we have people clamoring to represent them. If you transfer that case out of there into this situation here, I think it is important that those who cannot maybe necessarily afford the powerful--I have nothing against anybody hiring anybody in town to represent them, but I do think you should almost be the defender of fairness, if you don't use the word weakness, whereby you can speak out and be bold on these issues, because there may be some areas that either can't afford to hire these people or maybe don't know that they should and end up getting shortchanged, where those who do, and I think you share my concern on this. Mr. Linton. I share your concerns, Mr. Chairman. Mr. Wolf. Let me just say, I am not being critical of a locality that does, but I just want to make sure that we are not discriminating against a locality that doesn't. Mr. Linton. Let me just say, Mr. Chairman, that to give you an example, it has been my feeling that the discretionary bus program has been one in which those who are more influential, those who have superior access, have been able to benefit versus the properties around the country who have been on our waiting list for years and have not been able to get those resources. That is one of the reasons why I was an advocate for the formalization of the bus discretionary program for that reason specifically. So that it balances out the resources and it makes everybody a winner overall versus some having the opportunity to win the bus discretionary lottery and have an angel that would take care of them versus those who were not fortunate enough to be in that position and left without resources. In trying to be the person who speaks out for those who are not represented, we sought to have that bus discretionary money formulized, so that equally across the board all the systems could benefit. Mr. Wolf. Mr. Linton, to date, how many of these major investment studies have produced capital cost estimates and what is the total capital cost of these fixed guideway alternatives? Mr. Linton. I will give some of my staff an opportunity to participate this morning, particularly since we have some new members of our staff who have new positions. We have Charlotte Adams who is our Associate Administrator for Planning who has the information on the MIS. That is something that comes under her purview. Ms. Adams. As the administrator mentioned, we no longer approve entrance into major investment studies like we did prior to ISTEA when we approved entrance into alternatives analysis. Therefore we don't manage the MIS caseload. We are monitoring and providing technical assistance for 68 major investment studies around the country, are considering major transit alternatives. Of those 68, 47 have an estimate to date of $43,000,000,000. Mr. Wolf. [$40 billion to $45 billion]. Ms. Adams. In 1996 dollars, and that is the total transit cost, not necessarily the amount they would ask the federal government for. We don't know that yet. It is a little preliminary in the planning stage. value engineering requirements Mr. Wolf. Does FTA require certain transit capital projects that have high estimated total costs be subject to value engineering? If not, why not? [The information follows:] FTA's Value Engineering (VE) policy is included in FTA's Grant Management Guidelines, Circular 5010.1B, dated September 7, 1995 which stipulates that FTA requires VE on all major capital projects, including all new start projects. Additionally FTA's policy encourages the application of VE techniques on all construction projects. financial reporting requirements Mr. Wolf. In response to uncontrolled expenditures on the Central Artery project, this Committee sought to enact legislation that would have required biannual and periodic updates of the project's finance plan. Language requiring such updates was considered in the National Highway Systems Designation Act but not included in the final Act. In your opinion, should this requirement be applied to transit capital projects as well? Do you, for example, currently require periodic updates of finance plans on large projects such as the LA Red Line and BART projects? [The information follows:] The Federal Transit Administration (FTA) requires that projects covered by Full Funding Grant Agreements (FFGA) submit a financing plan in support of the grant application before signing a FFGA. After review of the plan, FTA makes a determination if the grantee has the financial capacity necessary to carry out the project. FTA assesses the plan to determine if the funding sources are stable, reliable and available within the project timetable. the grantee is responsible all addition cost should the project develop overruns that exceed the projected project cost. In our FFGA's the grantees also certifies to provide the local financial commitment in an amount sufficient to assure timely and full payment of the project costs necessary to complete the project. On major projects such as the LA Red Line and BART, FTA also periodically monitors the grantee's financial plan to ensure that local funding sources are in place in support of the project. The financial plan also commits the grantee to provide financing for future operation and maintenance of the project. FTA's risk assessment process is designed to identify transit agencies that may have financial issues. Once identified, a Financial Management Oversight contractor is assigned to take an in-depth look into the grantees financial strength. FTA is geared to provide more routine financial capacity reviews of grantees responsible for implementing major capital projects in the future. section 13(c) labor protection Mr. Wolf. Are there any changes that the Administration's proposing to reduce labor costs to transit agencies? We went through 13(c) last year, and we were not successful, and I don't expect that we will do it this year, but it does continue to come up. Mr. Linton. We are not proposing any changes in our statute that will change the current operations of 13(c). We are putting into statute some of the provisions of 13(c) that we have been doing operationally, but we are not making-- -- Mr. Wolf. You referred to them earlier. You are not making any. Mr. Linton. That is right. mass transit revenue for amtrak Mr. Wolf. On the effect of the half-cent from the mass transit account for Amtrak, what would be the programmatic effect if a half-cent were diverted from the mass transit account of the highway trust fund to create a new capital fund for Amtrak? Would such a proposal severely restrict FTA's contingent commitment authority and its ability to fund new starts? Mr. Linton. Yes, it would. It would tremendously if, in fact, the proposal came out of the mass transit account. I believe all the discussions at this point would not have that occur. Mr. Wolf. Does the Administration's NEXTEA proposal permit the use of transit formula funds for Amtrak capital or operating costs, and if so, under what circumstances? [The information follows:] In the fiscal year 1998 budget, the Department is requesting that $767 million be funded from the Highway Trust Fund for Amtrak. This includes $423 million for capital and $344 million for operating. Eligible transit capital grant activities (proposed Section 3003) in NEXTEA include public and private vehicles and facilities that are used to provide intercity bus or rail passenger service. This definition would make certain Amtrak expenditures eligible for transit formula and other program funds. In urbanized areas over 200,000 population this would include capital expenses, and in urbanized areas under 200,000 this would include operating and capital service. For the FTA administered funds to be used for Amtrak activities, an FTA grantee (e.g., a state or local transit agency) would have to sponsor the project. The increased local discretion over the use of these funds will support intercity transportation services which help tie local transit service into an intermodal system. We are committed to developing an affordable long-range plan that preserves the national passenger rail system and permits Amtrak to achieve its potential. access to jobs and training Mr. Wolf. The budget requests $100,000,000 for a new discretionary grant program to state and localities to support new or modified service for low-income individuals including welfare recipients which you referred to earlier. Why is another new categorical discretionary grant program necessary in view of the $2,000,000,000 spent annually on transportation services by the Department of Health and Human Services under the Medicaid program and funding provided from other federal departments such as Veterans Administration, Education, Housing and Urban Development, and Labor through programs such as social services block grants, vocational rehabilitation, and the JOBS program, and through DOT's own existing grant formula? Mr. Linton. Mr. Chairman, let me just say that you are correct in that there is a substantial amount of money, and between $1.2 and $2 billion is probably accurate in HHS funds, but many of those programs are categorically restricted in that a substantial portion are Medicaid programs and therefore, must be used for that. Many of the programs are for the elderly and, as a result, can only be used for that. What we are seeking here is a program that can be used to continue our implementation of welfare reform. Mr. Wolf. If I could just interrupt you, and the reason I do, we are going to have a vote and then we will recess for a while. The Governors Association plans to initiate a pilot program to develop a transportation component in five welfare states. Should you be waiting for them to see what they do before you do this? Excuse me for interrupting you, but I wanted to make that point. Mr. Linton. That program is one of our initiation. In fact, I was the one that suggested to my staff that we need to begin to get the States' Department of Transportations, and labor, and welfare agencies to begin to look at how they coordinate their services to deal with this expanding need. That program is focused on trying to do that, but that program will still need resources to be able to implement the actual welfare-to-work programs. We think that the $100,000,000 that we have put in our reauthorization proposal, as well as the budget proposal, would allow those activities to take place. The activities themselves may come about as a result of the coordinated planning that will take place from those state agencies. Mr. Wolf. Well, APTA stated before the Committee that funds for the program should not--we are not arguing whether you should do this. Clearly, you should be doing this, but they should not be taken out of transit program's existing appropriated amounts as the Administration has proposed, and we were told that FTA took this same position during the budget formulation, but that you were overruled by OMB. Is that accurate? Mr. Linton. I understand APTA's position. Mr. Chairman, this is the proposal that we are supporting. Mr. Wolf. But it is nothing--I used to work for a cabinet secretary who was overruled by OMB every Friday afternoon at 6:00. Were you overruled? I just wanted to know that. Mr. Linton. During the discussions, Mr. Chairman, we did have some different views on this particular item. Mr. Wolf. That is the concern, that you are taking funds out of the existing program. Are the discretionary awards that FTA expects to make under this program to be available only for start-up costs, and if so, considering the scarce federal and local resources for transit programs and the rising costs associated with capital needs, labor costs, and federal mandates, Buy American, et cetera, what makes the FTA believe these services will be sustained? Mr. Linton. What we are looking for in this program is collaboration from existing agencies. We are also looking for, in many of the programs, a 50-50 share. So we are looking for the local governments, the social service agencies, and others to bring their own resources to the table. We think that that provides a significant buy-in where they are putting up their own resources as well as ours. Mr. Wolf. I guess the key word is sustained. Mr. Linton. And that is why I think they will be sustaining them, because they are going to be putting up their own resources in trying to make the programs work. Several of the states, which I am very excited to hear about, are providing provisions to use the surplus of funds that they have from welfare reform to be used to do some transportation programs. They think they will be able to match what we provide with the resources that they will have as well. oversight of large scale transit projects Mr. Wolf. Moving on to another subject with regard to oversight. The GAO recently reported that cost management and cost containment are not a goal of FHWA's oversight and are not part of its organizational culture. As a result, Federal Highway has few requirements that ensure that cost containment is an integral part of large-dollar highway management. I suspect that the GAO would say the same about the FTA and its new starts program. At a time of scarce federal resources, is it time that FTA rethink its role in managing the costs of large scale transit new starts? Under the Central Artery project, we have now put together a team made up of the IG, the GAO, and the Federal Highway Administration. I have asked them to do the same thing with FTA on the LA project and the BART project and maybe some others, but with scarce federal resources, is it time that FTA rethink its role in managing the cost of large scale transit new starts? Mr. Linton. Absolutely. I think the question was asked of the Secretary and he responded in terms of the LA project that we will be doing a lot more intensive research and oversight than we have done in the past. For instance, in the LAMTA recovery plan, we have sent in our financial management oversight consultant to go in and begin to look at their books. This is something that we have not done in the past, but we are going to use those type of techniques much more in these kind of projects. Mr. Wolf. Maybe you could put together a team with GAO and IG. We have asked them to do that. Mr. Linton. That has also been discussed with the deputy. Just yesterday we discussed the possibility of being able to do that in Los Angeles as well. Mr. Wolf. What I am going to do is turn it over to Mr. Olver so he can ask any questions. Upon the completion, you can adjourn the hearing to give you a chance to get a sandwich and maybe return at 1:30. Is that convenient? Mr. Linton. That is fine. Mr. Wolf. Go ahead if you have any questions, if not, just adjourn. attb and vehicle size Mr. Olver. Thank you, Mr. Chairman, and I will allow them some time to enjoy their lunch. I will be relatively brief. Since I have just come back in after having left, and I realize now that you are on an area that I had gone out with some questions just before, but I will leave the continuity of that for the Chairman to pick up when you start back up again. If I may just make a couple of comments and maybe a couple questions about an earlier set of discussions that you were taking on with Mr. Tiahrt from Kansas. The ATTB, I guess it is, is that correct? Mr. Linton. That is correct. Mr. Olver. I would have to go and find it again. Mr. Linton. Sometimes I do, too. Mr. Olver. I live in an area where my largest community is 45,000 or so people. With each one of those larger communities in my district--there is about five of them that have some kind of smaller communities grouped around them and so forth, and I see similar to what Mr. Tiahrt had been saying, that a lot of rather large buses which are--I don't know how big they are; 40 feet seems like a lot of bus, but I suppose--I don't know how many passengers. Is that a 36-passenger or something like that? What would that be? Mr. Linton. It is a 43-passenger bus. Mr. Olver. We are still talking about 43-passenger buses at a 40-foot bus, which is awfully large for a lot of our smaller transit arrangements. In Massachusetts, we have eight or ten regional transit authorities and most of them serve relatively small areas where you would rarely--I don't think in the largest of those regional transit there is, other than the Boston metropolitan area, the MBTA, that you would see a time when a 40-some-odd passenger bus was going to be full. Many of them are operating buses that are even larger. I am amazed, and maybe you could just say, I am amazed that this is an area where we have not gotten--we are still working on the prototype buses for even something in the 40-passenger range, and it seems to me we ought to be working on the prototypes in the 25- to 30-passenger range which would-- unless, in terms of economy of scale here, there is such small additional economy to be reached by having the smaller vehicle compared with now a 40-foot, 43--if I heard correctly, 43 passenger, versus what so many of them are using, which are 50- to 60-passenger buses, which is even larger. Mr. Linton. Let me just stress this point because there seems to be some misconception in the industry that there is a requirement by the federal government that properties use a certain size bus. There isn't. It is definitely left up to local discretion as to what size buses they use. One of the reasons that the ATTB bus with its prototypes has started out with a standard size bus is that many of the systems that were initially buying into its development were systems that are larger systems that have major bus needs. This includes Los Angeles where they have a 2,000 bus system, and they carry over 1,000,000 passengers a day and the buses are overloaded, and they are making a major effort to try to replace them. They were the initial major partner in the ATTB bus development project. Another was Houston, where they have a regional bus plan that calls for very large buses. As I indicated earlier, we do have projects such as the Georgetown project with fuel cells, where we are working with a 30-foot bus as a prototype. The ATTB bus, we believe, can also be tailored to be a 25- foot bus. It has the possibility of being altered and tailored to accommodate a smaller vehicle. Mr. Olver. Are we really doing the international research in this area? Everybody around the world is using buses which are much larger? It seems to me there must be lots of territories or maybe it is specifically territories here in this country where the regional transit organizations that I am talking about have anywhere from 15 to maybe 40 buses that are serving a population of 100,000 or so with a core and some communities around, and we--the 40-footers are just plain too big, and yet you point out there is no requirement that you have to buy larger than the ATTBs because that is what has been there for the most part, but why are we spending so much effort at creating one, an ATTB, a 40-footer, if there are already others on the market? Are there others in that range on the market? Mr. Linton. There are buses of all sizes within the market, and many of the properties are using both the buses the size of the ATTB and many of them are also using small buses. We do have many bus manufacturers who are making 25- or 30- foot buses and many of the properties around the country are buying them. Mr. Olver. What are we--if a range of buses is available, either American or Canadian or other industrial country technologies, why are we then doing a prototype arrangement with six ATTBs? What are the features there that are so unique or critical? Mr. Linton. Let me go through a couple examples. It is made of composite parts, so it is a lightweight vehicle. It is about 10,000 pounds less than a normal size bus. It also has specific technology that is being utilized within it that we don't currently use in an integrated system in any other buses, so it offers those type of advantages. The reason that it was once again started with a 40-foot vehicle is because those who were partners in the project have a need for 40-foot vehicles. But it can, as I indicated, be tailored to a 25- or 30-foot vehicle for those in the industry who require it. Once it gets to the manufacturing stage, I am sure that those who are interested in manufacturing would make 25- or 30-foot vehicles to respond to that market. It is a low-floor bus. It is easy to maintain. It is lightweight. The noncorrosive parts that are used to make the shell have long-term usage, a long-term useful life. Those are the kind of attributes within the vehicle that we are looking at and many members of the transit industry are excited about those particular areas of it. attb and inspector general findings Mr. Olver. Well, since I guess I have opened a can here, I am not sure exactly what is in it. I notice that the Chairman had a couple of questions that would have been asked later in the process, so I will just finish this up and ask those for the record. My understanding is that you had based your support on the belief that that would provide a cleaner, safer, and most cost- effective bus, but your Inspector General has informed the committee that while the ATTB will result in a cleaner bus, that we don't really have the data to know--to conclude whether that project is going to produce a safer and more cost effective bus. Do we now have those data or when will we get them? Mr. Linton. I don't disagree with the Inspector General. She indicated that the kind of testing that we are currently doing would not give us enough data and information to reach those conclusions, and that many of the tests that we are doing were being done with a prototype. They are being done in a laboratory environment. They are being done utilizing simulations from computers and other means. She is not suggesting that it will not have those results. All the Inspector General is suggesting is that we will be better able to determine whether or not those results are achieved once the bus is put in actual usage, which we hope to have happen over the next two years, when we will test it in revenue operations. Mr. Linton. That is correct. Mr. Olver. In place, and that will be done after the prototypes in operation? Mr. Linton. That is part of the purpose of the testing time that we will have. Once we have the six prototypes they will in fact be deployed in different sections of the country so that they can be tested in different environments, different conditions, and so that we can begin to measure some of the savings that we think will occur. Mr. Olver. Well, let me follow that with one other then. The IG found that a comprehensive life cycle cost analysis had not been performed to determine if it would be cost-effective to procure and operate the ATTB and that the analysis should be completed in order to make informed decisions to fund grantee purchases of the ATTB. Is your answer essentially the same or is there an additional answer to that? Mr. Linton. It is essentially the same. That is all part of the same testing that we agreed with the---- Mr. Olver. When are the six prototypes supposed to be done? Mr. Linton. By 1998, I believe. Mr. Olver. By the end of 1998, some time in 1998. And when will we have those kinds of tests? Are we then not going to be pushing the purchase of ATTB until the kinds of tests that you have suggested that you want to do and the Inspector General has alluded to can be completed? When would that be? Mr. Linton. The vehicles will be ready around the end of 1998 and you are correct about the testing period. Some of the testing will probably take place as the vehicles are coming off the assembly line. I think that even though the six will be completed at the end of 1998, some of them will be put in testing prior to 1998. And so we will begin to get some indication over the next year or two what some of these issues are as they are tested out. attb and ada compliance Mr. Olver. One last comment. The gentleman from Kansas had also commented about asking what the floor of the bus was and so on. I am told that we put a lot of effort into making all of our vehicles recently handicap-accessable and those mechanisms especially in the northern areas are very unreliable, subject to great maintenance problems, and so we really do need and I trust that in this process maybe making the floor lower. After all, most of our cars only have about an eight-inch clearance and once you get in under that eight-inch clearance where your feet are probably not more than a foot off the floor it ought to be able to get them quite low. These buses are operating on pretty good highways except sometimes the potholes do get serious in our part of the country and it ought to be possible to make those mechanisms a lot more reliable. Mr. Linton. That is one of the major attributes of the bus, the fact that it is low floor. It is a low-floor bus versus having the multiple parts that many of us have to use with the lifts in other buses that sometimes malfunction. It is the hope that this bus will have the reliability and therefore the lower maintenance cost as a result of that. It is important for me to mention that we do have an advisory committee, a peer review team that is evaluating this bus throughout its entire development process and that the peer review team is representative of a significant number of the transit properties around the country. So they send their own technical staff to examine the production process. They are looking at the elements even prior to going into testing and making suggestions to the manufacturer on elements which they think would be improved because they are interested in the vehicle coming out in a way that can solve a number of their problems, such as maintenance costs, fuel costs, and reliability. These are issues that they constantly raise so they are sitting there raising the questions and trying to see that they are answered even before we get into the testing phase. Mr. Olver. Thank you, Mr. Linton. I took more time than I had intended to, but we are adjourned until 1:30. [Recess.] bart extension Mr. Wolf. Mr. Linton, we appreciate your response to our letter regarding the BART extension to the San Francisco International Airport. We do have additional questions based on your response, which we will provide in writing. We are concerned, however, about the ability of the local and federal governments to pay for the project, particularly because the appropriations schedule assumed in the finance plan makes cost increases likely. We talked about that earlier today. BART's current finance plan makes some generous assumptions about future congressional appropriations. The plan assumes $110 million in fiscal year 2000; $160 million in 2001; $150 million in 2002; and $108 million in 2003. These out-year assumptions are higher than those the FTA previously criticized BART for being too high. What accounts for the change in your judgment? I feel an obligation to say this again. It is not that the Committee is opposed to something. It is from the dollars point of view and knowing that next year this will be more difficult and aggravated each following year. You are requesting $670 million this year for new starts when you ought to be at $800 million, so based on that could you answer the question? Mr. Linton. We do not have the schedule. Mr. Chairman, can we submit this for the record? I have a schedule here that provides the out-year cost for the BART project but these are preliminary numbers. [The information follows:] The preliminary schedule for the outyear cost of the BART extension to the Airport and Millbrae is provided below. The final schedule will not be determined until the FFGA is awarded for this project. BART AIRPORT EXTENSION [in millions] ---------------------------------------------------------------------------------------------------------------- Fiscal year ----------------------------------------------------------------------------------------------------------------- 1998 1999 2000 2001 2002 2003 ---------------------------------------------------------------------------------------------------------------- $54.78........... $74.0 $110.0 $160.0 $150.0 $117.3 ---------------------------------------------------------------------------------------------------------------- Mr. Wolf. Sure, that will be fine. I do not think you had to answer that to cover this next one. Assuming the effect of not meeting these appropriations targets, which I think will be exceptionally difficult to do, will be to increase BART's borrowing costs above the $40 million included in the finance plan for its short-term borrowing program. Given the precarious financing of the project, how will BART pay for these certain increased costs? Mr. Linton. Mr. Chairman, as we always do in our FFGAs if there are costs that go beyond the contingency account that our full funding grant agreement grantees are required to have, if they cannot cover the excessive costs in those contingencies it is their responsibility to meet any overruns above that. And that is in fact BART also has a mechanism that is also designed within their funding program to bridge any shortfalls. On some it may be able to be absorbed within the capital mechanism that they have that is built in to their contingency requirements. Mr. Wolf. Are you sure about that? You said may. Mr. Linton. Well, of course it is going to depend on how much the overruns are but they do have in place the mechanisms that should give them some flexibility to avoid serious impacts from cost overruns. But if they do not, if they are not able to absorb them, it is truly as we have always said, the responsibility of the grantee to come up with those additional amounts. Mr. Wolf. FTA is asking for $54.8 million for the project, but the finance plan BART submitted to FTA calls for $64 million in new starts funds in fiscal year 1998. Does this mean the project will have a bigger fiscal year 1998 cashflow shortfall that BART has planned for, thereby increasing financing costs and perhaps creating higher overall project costs? Mr. Linton. Well, it is our hope that, during the course of the FFGA, if the economic turn continues and there is more opportunity for additional resources that in the out-years they will be able to receive additional appropriations. But also the fact of the matter is that we expect that within the contingency fund they will be able to absorb some of what is basically a small reduction in the first year of the FFGA. They should be able to absorb that without any significant increase in construction costs or increase in financing costs. Mr. Wolf. But that really is the tip of the iceberg. The plan assumes $110 million in fiscal year 2000, $160 million in the year 2001. Every projection up here shows that the budget on the discretionary side getting tighter and tighter and tighter. This year in the budget that the Administration sent up there is $248 billion for interest on the debt. Even if we get to a balanced budget, that clock runs. We are not paying off the debt, the $5 trillion debt, we are just balancing the budget and so it is not going to get any better and what I think--really think you would provide a public service to the people in these different areas to put together a thoughtful reasoned letter explaining what some of the potential problems are because I do not think it is fair to people to go in thinking that they might be--the way it is going to be when clearly you are not going to be in town when we hit these numbers. You may not be here and so I think, in candor, something ought to be just said whereby people understand what the potential funding problems are. Mr. Linton. Mr. Chairman, I care about the program. I do not just care about my role as the administrator here. I have cared about transit for a long time. I will care about it when I leave this position and I operate that way. I truly want to and try to as much I can to make sure that what we do is for the betterment of the program overall. Mr. Wolf. I am sure. I do not have any differences with you. You know what I am saying. Mr. Linton. Sure. Mr. Wolf. You stated that a 12.5 percent contingency in BART's estimate is reasonable. We have been told that BART's last two extensions cost 23 percent and 68 percent more than the estimates in their environmental documents. Is this typical of new rail starts, and do you think maybe this suggests higher contingencies should be required of BART? Mr. Linton. That is higher generally. Most of our projects have been in the 12 percent or less range. bart operable segments Mr. Wolf. The BART extension would consume a very large portion of new starts from a shrinking budget, and the FTA's own reports show that the project ranks low in terms of cost- effectiveness. In light of these circumstances, have you considered dividing the BART project into two or more operable segments? Mr. Linton. No, we have not. The FFGA authorization language that was in the ISTEA that suggested that we go forth with an FFGA specifically talked about the extension to the airport as it is currently being constructed. That is how we have tried to operate with the project in fulfillment of the language that is in the authorization. That has been the local request from BART. That has been the request supported by the Congress, the governors and others from that state. Mr. Wolf. But the two segments, you could go to the airport as one and the Millbrae as second. That is what I meant. You just said to the airport. You got two different segments. Mr. Linton. I do believe that the language within the bill also speaks to the Millbrae extension as also part of it. Ms. Sahaj. The airport asked specifically not to be a determinate for---- Mr. Wolf. The airport does not want to put a lot more money into this too and I do not know that that is what the language says. Mr. Linton. You are probably right. As I recall now, the language speaks to FFGA from BART to the airport. It probably does not make reference to the Millbrae segment. Mr. Wolf. So you could do it in two operable segments? Mr. Linton. That is probably correct. Mr. Wolf. And would you look at that? Mr. Linton. Yes, we will. Mr. Wolf. Okay. And the last question, and we will move on, would you agree that FTA, the FAA and Congress need to review whatever deal is decided between the parties before FTA issues a full funding grant agreement? Mr. Linton. Absolutely. Mr. Wolf. Mr. Sabo. operating assistance--outlays Mr. Sabo. Thank you, Mr. Chairman. Let me just make a further comment on the question this morning of operating assistance and be a little bit more specific about my concerns and my concerns reflect what Mr. Foglietta and Chairman Wolf also said. We set obligation limits and we appropriate budget authority in this Committee and sometimes we look at those as equals but they are not because we also deal with budget agreements which set outlay limits for us. And one of my concerns is that I am not sure it makes sense to further expand the definition of capital expenditures to include maintenance. You may well be right in the long term, but that assumes that we will have more money in outlays to spend in the years ahead. When I look at the outlays operating spends out at around 60 percent. Capital at 15 percent, your new grant program at 5 percent. So while the budget authority in all of those programs may be equal, and actual dollars available for transit agencies to spend next year, those definition switches significantly reduce dollars available to them in fiscal year 1998 even though the amount of budget authority we may have is close. But switching to those programs with low outlays in '98 means those outlays are going to come in future years and gradually we build up to a new outlay limit. The assumption has to be that any budget agreement here is going to have some escalating amount of outlays and discretionary spending. With everything I see, the opposite is likely to happen. Outlay limits are likely to be level or reduced. And so as we switch this year, if we were to switch to something that has low outlays, takes money away in 1998, on the assumption that we are going to have more flexibility inoutlays in future years, that just simply is not likely to happen. And so I really hope you take a close look at it in terms of the impact on outlays in the type of pattern you set. If you look at the President's budget he has his assumptions, economic assumptions, however, if they are wrong there are deep cuts in outlays in the President's budget in years 2001, 2002, at which point the outlays that are coming from our budget authority this year kicking in in full force. So I hope you go back and closely examine that and look at some way that we have some sort of level outlays over a period of time rather than de-escalation through what may be similar budget authority this year but setting a pattern in place that just eats up money in the future which may or may not be here. Mr. Linton. I think we would like to look at that but as I look at the outlay rate versus looking at the capital expansion definition versus the operating, the outlay spending is much slower on the capital side. If you compare the two I would think that the proposal that we are putting in place would have less impact on outlays because the money is spent slower over the period of years. Mr. Sabo. Well, it has lesser impact this year. You are taking cash in hand away from transit agencies in 1998, giving them a less amount now but that money--we are passing a budget authority or obligation limit in 1998, they are going to outlay in greater proportions in 1999, 2000, 2001. Over a period of years if you are right you will have an equal amount of outlay but it is going to be reduced this year, escalating in the future, and I see very little indication that the flexibility Congress has with total outlays for discretionary spending is going to be increasing over the years so you are helping your outlay problem for this year's budget but creating new and additional problems not only for transit but for other discretionary programs in future years. So it is a temporary easing of outlay problems which takes actual expenditures out of the hands of the transit agencies in 1998 and assumes that we are going to have some greater flexibility in later years to deal with outlays. So I really hope you take a close look at the recommendations and see how we can develop a whole better line. Mr. Linton. I will look at that and I would like to get back to have some more discussion with you after we examine it again. bart full funding grant agreement Mr. Wolf. Could the FTA just approve BART to the airport in the FFGA, and leave the extension from Millbrae to the airport for a later date? [The information follows:] While it might be possible to approve a BART extension to the airport and defer construction of the Millbrae intermodal terminal, a number of problems would arise from such a decision. First, making the airport the sole terminal of the line would trigger additional environmental work to assess the impact of changing the end point of the line. Considerable re- design would also be required. In the case of the airport, this would also re-open a number of questions about the eligibility of the airport contribution previously settled by the FAA, given that non-airport passengers would no longer have an alternative service to bypass the airport. Moreover, the San Francisco Airport Commission requested early in the process that the airport not be the terminal station for the BART extension. Second, eliminating the Millbrae intermodal terminal would reduce the projected ridership for the extension by about 33,000 (almost 50 percent of the projected ridership for the extension). Finally, eliminating the Millbrae station would only save an estimated $135 to $165 million--a savings easily consumed by the inevitable delays such an action would generate. Mr. Wolf. Has FTA evaluated how much the cost could be reduced by ending BART at the airport for the time being? [The information follows:] BART estimates that a savings on the order of $136-$165 million in construction costs could be achieved if the Millbrae station were not to be built. However, any savings would likely be illusory since such a decision would trigger additional environmental restudies and substantial redesigns (airport as sole terminal of the line, endangered species impacts, wetlands issues) generating delays and potentially significant cost escalation. Mr. Wolf. I understand that BART, the airlines, and the airport are working to resolve their differences. What is the status of these discussions and what is the likely resolution? [The information follows:] We have been informed that BART has reached agreement on all outstanding issues which were under negotiation. LOS ANGELES REVENUE DIVERSION Mr. Wolf. The Committee has been concerned about the repeated attempts by the City of Los Angeles to divert illegally airport revenue for non-airport uses. The conferees were troubled by reports that they directed the FTA not to award funds made available for the Red Line project unless the Inspector General certified that no illegal revenue diversion had occurred. The FAA has initiated part 16 proceedings against the City of Los Angeles, and a little over a week ago, the Secretary gave the committee his assurance that the Department will not award any of the funds provided in the fiscal year 1997 appropriations act for the Red Line project while airport revenue enforcement proceedings by the FAA are underway. Will you provide the same assurances Secretary Slater did? Mr. Linton. Absolutely. We have gotten preliminary information from the Inspector General and it is clear to us that we will not be releasing the funds for LACMTA and that they will continue to be suspended. Mr. Wolf. In December 1996, you warned in an interview that the MTA faces a lack of confidence and funding difficulties in Washington if it continues to send mixed messages. You were so concerned that you and then-Secretary Pena summoned the leadership of the MTA and the City of Los Angeles to your offices this past January to ask the Board to ``reaffirm its commitment to the Metro Red Line as its highest priority.'' MTA, in response, said that the subway if its highest priority. At the same time, MTA officials were meeting with bus advocates to reassure them that the bus expansion and court- ordered consent decree is MTA's highest priority. The Mayor has publicly endorsed a bus alternative to the Red Line subway project, and is quoted as saying, ``Making improvements in bus service in my number one priority.'' Mr. Linton, the Red Line project is the only rail project. Why did you accept their response which in itself is indicative of a lack of purpose and consensus and what actions do you expect to take as a result of the ambiguity that appears to be out there? Mr. Linton. Let me just say that we have asked for a recovery plan from LACMTA. We are still reviewing that recovery plan. We still have some concerns about how they are going to be able to meet the overall demands that they would like to meet in the long term which includes the Red Line as well as the Blue Line project to Pasadena which is locally funded as well as the enhancement of BUS as a result of the consent decree. We have asked our financial manager consultant to go in, as I stated earlier, to look at their books. We are still reviewing the results of that but it is clear to me that we are going to have to put in place fairly severe procedures with LACMTA. I think the Secretary alluded when he was before you that some of the provisions that were put in place in Massachusetts were things that he thought would be needed with LACMTA. We have reached the same conclusion. We hope in the next week or two that we will have a response to that recovery plan. Quite frankly, it is going to lay out some pretty tough medicine in terms of what we are going to be doing with the authority. We are going to try to insure that funds that we provide are being allocated to our projects and that the projects are being managed better and that there is some consistent view on what the governor's structure in that area wants to do to meet the transportation needs of the community. So I think we still have some concerns. We are still reviewing the report, but it is clear to me that we are going to have to put in some very stringent measures to make this project work. We are still committed to the project. Whenever I have been in LA and I looked at both their system and the needs of their community, there are very severe transportation needs in that community. The project itself goes a long way in terms of meeting those needs. I also hear discussions about future projects. My view right now is that there needs to be a concerted effort to focus on what is currently on their plate to make that work. We quite frankly are not interested in discussion future projects. LOS ANGELES RED LINE PROJECT Mr. Wolf. The GAO informed the Committee last week that MTA has plans to expand the Red Line's 23-mile system in the near future and is seeking new authorizations in NEXTEA. Do you believe that these plans are premature, is that what you are saying? Mr. Linton. Well, I think as the Administrator I cannot tell any location not to come forth and ask. Mr. Wolf. But given the seven-year delay in the Mid-City extension---- Mr. Linton. But what I am saying is that I think it is premature. I think we need to show a product that is successful to demonstrate that one should look for the federal government to be partners with expansions. Mr. Wolf. It appears very likely that the MTA may be unable to meet its obligations under the full funding grant agreement. The Mayor of the city, as you know, favors a bus alternative, other political leaders seem to be for different things. There was a poll done dealing with how the residents felt and it indicated that more than half, I think, opposed building a subway. Today the Eastside extension is two years and $70 million over budget; the Mid-City extension, which I just referred to, is over seven years and nearly $200 million over budget. And I think surely that is going to escalate because of that. Wouldn't these facts require the FTA and MTA to renegotiate the full funding agreement? Mr. Linton. We are going to do that, Mr. Chairman. We are going to have to do that. There is no question about it. But I also want to state that we still think that both the Eastside project because there have been some decisions made on what they should be doing on the Eastside project, those decisions have been made by the Board. We do think that the Eastside project is one that as currently constructed should go forward and we believe that the Mid-City project, one that has been delayed to some degree, is still one that is worthy of our support and one that meets major needs in that region. So we would like to still support those three legs as identified now. Our recovery plan, the response to their recovery plan submission, is going to be one that we are going to lay out the mechanism on how we are going to require them to put in place some techniques to recover some of the costs overruns to try to recover some of the delays and to focus on money on completing the lines that are currently under consideration and we are not, as I said earlier, going to be talking about extensions beyond that until these projects are brought under control and within some limits. Mr. Wolf. If you renegotiate a full funding agreement that would certainly allow more money for other projects around the country. Mr. Linton. Well, renegotiating the full funding agreement in itself does not mean that the monies will be removed or the authorization. It means that we have to look at what their local share is. There are some issues in there regarding the completion of the program. It does not necessarily mean that-- -- Mr. Wolf. But it could. It would almost would have to look at some change or almost---- Mr. Linton. It may, but it may not. LOS ANGELES RED LINE SAFETY Mr. Wolf. I think it should. I think it is a partial solution to the problem. I have one other question about safety and then I want to ask you something. We were told a little over a month ago a Red Line construction worker was decapitated when a half-ton refuse bin broke free from its moorings and struck his head. This accident follows at least six other serious accidents in the last two months. We were told it prompted one construction official to express fears that workplace safety was taking a back seat to progress. A Superior Court judge awarded $12 million to compensate other construction workers who were injured, noted that testimony in his courtroom indicated a ``callous disregard'' for workers' safety by the MTA. What are you doing to ensure safety compliance on the Red Line construction project? Mr. Linton. Let me say that we are looking at the LACMTA safety record as well as what they are doing to mitigate---- Mr. Wolf. And how is it? Mr. Linton. There are two ways of measuring safety in projects like this. The lost time injury rate for the project as we see it is pretty consistent with the national norm. The lost time injury rate for this segment is .06 versus the national average of 4.9 so that is in fact fairly good. The recordable incident rate, however, is one which exceeds the national average. For their segment it is 13.4 and the national average is 11.8. They are, in fact, putting in place new mechanisms to deal with the recordable incident rate which is the one that is above the national average. That means spending more time with employees before they go into the tunnels and the construction sites, putting more emphasis on injury prevention and constantly monitoring and staying on top of that. So those are new measures that they have put in place. Mr. Wolf. And FTA is going to watch it? Mr. Linton. That is right. Mr. Wolf. Aggressively? Mr. Linton. That is right. Part of the recovery plan measures that we are going to put in place is going to be tough medicine. And it is going to be much tougher than what we have put in place even to date. It is going to be extraordinary measures but this is an extraordinary situation. Would it not make sense to get Mr. Torres and the other members of the California delegation of both parties and the mayor who is a good person, and governor and yourself and somebody from the committee, somebody from the IG's office and GAO to come and sit down together, separating the full funding agreement things out and really seeing for the amount of money that we have, and we want to be fair to Los Angeles, how we can move the most people possible and do what, one, the people of Los Angeles want, and I do not live out there and I do not think I should tell them what they do, but, two, what will be in the best interests, and, three, what can be afforded. Wouldn't it be a good idea to get everybody together to break bread, to come over to your office, buy a Dunkin Donut and sit everybody down and resolve these numerous issues. The LA project is going to have an impact on property taxes; it is going to have an impact on affairs; it is going to have an impact on air pollution; it is going to have an impact on so many things that I believe that there is too much arguing. And given the seven years delay in the Mid-City line and two years delay in the Eastside and cost overruns or renegotiating full funding agreements, it would seem to make sense for the parties to get together in a spirit of reconciliation, if you will, and just sit around the table and see what can be done within the parameters and the flexibility that FTA has and the amount of money they have to see if something can be done. Wouldn't that be a good thing for you to do? Mr. Linton. Mr. Chairman, let me just say in all due candor, that meetings that I have had with the various parties in LACMTA to try to reach consensus on how to move projects in the same direction have been futile. And in those discussions the parties that you have mentioned to a large degree have been represented. We are still responding to what is currently on our plate as the recommendation of their local body. Even though the mayor has expressed some views on what he would like to see done differently, the views of the body in which the mayor is also a member still support what we are trying to do now. Mr. Wolf. I think if we got Mr. Torres and Mr. Dixon and the mayor and the MTA and some people from the IG's office and from the GAO to look at this because we all know they have some real problems. Clearly, there is a transit need and so if you can identify the solutions to the need within the parameters of how much money you have and what is doable, I think that would be for the best interests of the people out there. I know no one else who could do it other than the FTA. Mr. Linton. I wish I had that kind of confidence in my ability to get that done, but let me just say---- Mr. Wolf. You have not all been there though. I mean I think if you had GAO and IG and yourself lay out the cold, hard reality of where we are and were willing to spend some time. Mr. Linton. We are going to. As I indicated earlier, I think we are going to have opportunities for some real tough looks at the resources that are there and the ability to meet the mobility needs of the people in Los Angeles. I think I am very much in sync with you in terms of the need for an examination of what is possible and the need for support from all the parties in place to make it happen. And we are going to be looking to get the same result. Mr. Wolf. I think you got to get everybody around the table because those who are not around the table are going to break and say they were not part of the agreement. If you can let us know what you are doing and keep us up to speed on that, we would appreciate it. Otherwise, I think they are going to have a problem and they are going to lose their opportunity to deal with it. inspector general audit of la project Mr. Wolf. Last week the Inspector General informed the committee that the IG has completed a limited-scope audit of the city of Los Angeles' department of airports revenue retention. The IG determined that there were three areas where prohibited airport revenue diversions occurred after the enactment of the 1997 Appropriations Act. Based on the IG's audit, do you intend to withhold the $70 million included in the 1997 DOT Act? Would you also agree that any disbursement of the $70 million would be in violation of the Act? [The information follows:] The DOT Inspector General identified a diversion of funds by the City of Los Angeles from the Los Angeles airports which is not consistent with the conditions for release of funds provided in the Conference Report accompanying the fiscal year 1997 Appropriations Act. Therefore, FTA is currently withholding the $70 million. While disbursement of the funds would not be in technical violation of the Act under principles of appropriations law published by the General Accounting Office, FTA has sufficient authority to withhold the funds consistent with the intent of the conferees and has agreed to do so. la red line project delays Mr. Wolf. This Committee continues to be troubled about the ability of the MTA to manage its construction of the Metro Red Line in the face of escalating costs, significant schedule delays, criminal prosecutions and continuing investigations, difficulties in engineering, and issues of organizational management (including the recent resignations of both the executive officer and the executive officer for construction). Insufficient sales tax revenues, the court-ordered consent decree for additional bus service, and cost overruns may lead to operational deficits of over $1 billion. Mr. Linton, there is an old expression: ``When you find yourself in a deep hole, the first thing you do is stop digging!'' Mr. Linton, is it time to stop digging? [The information follows:] We have already accomplished a number of actions in building a framework for dealing with the situation. On December 16, 1996, senior DOT officials, including the Secretary, Deputy Secretary and FTA Administrator, met with key members of the Los Angeles County Metropolitan Transportation Authority (MTA) Board of Directors to discuss concerns over the status of the Metro Rail Red Line extension and proposed corrective measures necessary to restore confidence in the project. This was followed up by a letter from the FTA Administrator on January 6, 1997 to the MTA Board Chairman stating the specific steps required to save the project. FTA also assigned an independent financial consultant to review MTA's capital financing plans. MTA submitted a recovery plan on January 15, 1997 after having adopted a Code of Conduct for Board members as well as a resolution reaffirming MTA's commitment to the Red Line project as its highest rail priority. Now, after studying the MTA's recovery plan for restoring project schedules and financial health, FTA continues to harbor serious reservations on the credibility and overall viability of the recovery plan and the financial assumptions which support it. Independent analyses have confirmed these reservations. FTA is in the process of conveying these reservations to the MTA and will be taking steps to restructure the current FFGA. Mr. Wolf. The MTA recently submitted a recovery plan to the FTA, which includes new schedules and budgets for the Metro Red Line Mid-City and Eastside extensions. FTA has recently hired a financial management consultant to review MTA's financial capacity to fund its transportation program. I believe you received a preliminary briefing just last week. When is the study to be completed and what preliminary findings will you share with the Committee today? [The information follows:] The financial capacity review of the MTA is an on-going effort until September 30, 1998. The initial review assessing the current financial capacity of the MTA has been completed. As needed, FTA will request an updated analysis when new developments affecting MTA financial capabilities are identified. Preliminary findings from the initial review are: 1. The proposed Recovery Plan depends upon: Bus operations cost savings contrary to previous trends, no further rail capital cost over-runs, no sales tax or fare revenue shortfalls, and growth in sales [tax receipts] higher than previous experience. Without a cash reserve, there is an excessive risk that another round of ``adjustments'' will be required within six months to one year. 2. $300 million of Proposition C Discretionary funds [needed] to accelerate MOS-3, provide a cash reserve, or meet Consent Decree requirements are programmed [instead] for the Pasadena Blue Line. 3. $142 million of the City of Los Angeles share of MOS-3 is linked to milestones for future rail lines which may not be attained. Mr. Wolf. I understand that some $240 million is included in the MOS-3 full funding grant agreement for the Mid-City extension. These funds have been committed against the balance of the trust fund. Since the project is seven years behind schedule, well after the re-reauthorization of ISTEA, why not reallocate these funds to other worthy projects that are ready to go and have completed or are soon to complete the required analysis, but are precluded because FTA has fully committed the balances of the trust fund? [The information follows:] While the project is admittedly behind schedule at this point, the delays have resulted from the unexpected detection of abnormal levels of hydrogen sulfide along the former planned alignment. This, in turn, required a prudent re-examination by MTA of alternative alignments to avoid areas identified as containing pockets of the gas. Once a new alignment is selected, this segment can again enter the final design phase. As you know, FTA suspended payments for the Mid-City final design effort in February, 1994, after the presence of the gas was confirmed. FTA will be able to resume payments once the environmental work is completed on a proposed new alignment and a record of decision is issued. FTA now estimates that final design can be re-initiated within 12 to 18 months. It would not be a prudent action to remove the Federal commitment to this segment of MOS-3, in light of the facts that Mid-City continues to enjoy strong local political and community support and is an integral part of a comprehensive program to bring high capacity rapid transit service to key quadrants of the contested. FTA will continue its support of the Red Line project. This is one of the most transit dependent and congested corridors. Mr. Wolf. Is the FTA continuing its suspension of further federal payments for the Mid-City project that it announced in December? When, and under what circumstances, would the FTA lift the suspension? [The information follows:] FTA continues to suspend payments on the Mid-City segment. Payment has been suspended since February 1994 when LACMTA suspended final design following detection of abnormal levels of hydrogen sulfide along the former alignment. We would contemplate resuming payments on the Mid-City segment when a new alignment is selected and the project is ready for final design. Mr. Wolf. It has been suggested that Congress is to be blamed in part for the project's cost overruns and schedule slippage because it has chosen not to appropriate the funding needed to support the federal funding schedule in the segment 3 full funding grant agreement. In fact, recent federal appropriations have lagged because of MTA's own difficulties with the project. What assurance can you provide for the Committee that none of the additional costs associated with the project because of less-than-anticipated appropriations levels will be borne by the federal government? [The information follows:] The FFGA explicitly requires that MTA maintain the project schedules regardless of the rate of federal funding, caps the federal participation in the project, and binds the MTA to deliver the project regardless of final cost. Attachment 6 of the full funding grant agreement (FFGA) sets forth an anticipated schedule of federal and local funds for the construction of the project. While the provision of federal funds by FTA is subject to the availability of Congressional appropriations, MTA is obligated to provide local funds as identified in Attachment 6 and as necessary to maintain the project schedule. la occupational safety Mr. Wolf. What responsibility does FTA or its contractor have in ensuring that all federal occupational safety and health regulations are followed? When was the last safety review of MTA conducted? [The information follows:] As a major funding partner in supporting the Los Angeles Red Line project, FTA's primary concern is that the project be delivered within scope, schedule and budget as contained in the FFGA. FTA periodically checks to insure that MTA has properly staffed its safety program. The California Occupational Safety and Health Administration has the Federal responsibility for providing safety oversight of the Red Line project. Cal-OSHA is required to visit the project once a quarter because tunneling is involved. However, the frequency appears to be more than once per quarter. The last official visit was February 18, 1997. Mr. Wolf. Testimony before the court included a statement by the safety manager on the project in which he says that the head of Parsons-Dillingham refused to allow him to correct the problems or to stop the project. With testimony such as this, one has to ask how many close calls and deaths must there be before safety on the project is enforced? [The information follows:] MTA recently announced that it is working with Vice Presidents of the firms constructing the Red Line to underscore MTA's concern about safety. We believe the MTA is vitally interested in the safety of the people who build the system. Since October 1995, the Los Angeles County Transportation Metropolitan Authority's (MTA) Safety Department has been fully staffed. MTA maintains its safety statistics in conformance with Federal guidelines for the Compilation of safety data. The Lost Time Injury Rate (LTIR) is commendable for both active Red Line projects. The cumulative LTIR for Segment 2 is 2.6 and the cumulative LTIR for Segment 3 is 0.6 versus the national average of 4.9. However, the Recordable Incident Rate (RIR) for both active projects exceeds the national average. The cumulative RIR for Segment 2 is 19.6 and the cumulative RIR for Segment 3 is 13.4 versus the national average of 11.8. The Lost Time Injury Rate is based on the number of lost time injuries per 200,000 work hours incurred on the project. A Lost Time injury is an injury which results in time away from normal duties as a result of the injury beyond the day on which the injury occurred. The Recordable incident Rate is based on the number of recordable injuries per 200,000 work hours incurred on the project. A Recordable injury is any injury which requires medical treatment beyond first-aid. MTA is working with its Contractors and Construction Managers to take steps to implement further actions in pursuit of a lower than national average RIR. Specifically, MTA is revising its Safety Manual and Safety Awareness Program to focus more directly on the minimization of recordable incidents. houston-disadvantaged business enterprises Mr. Wolf. Let us try to go rapidly. And then when we break, maybe we will have to come back and do Metro. The FTA requires transit authorities to have an affirmative action program. In Houston a U.S. District judge made a preliminary finding that Houston's metropolitan transit authority program was unconstitutional and has granted an injunction that forbids Metro from continuing its affirmative action program required by FTA. You, in response, have suspended all payments of federal funds to Metro, placing millions of federal funds in jeopardy. You recently advised Metro that its newly revised gender neutral program did not comply with federal regulations and that so long as Metro remains under the constraints imposed by the injunction, Metro cannot qualify for a recipient for federal funding. You are insisting that Metro behave in manner that a federal judge has found unconstitutional. Can you give Metro a waiver? Mr. Linton. Mr. Chairman, let me say first of all that the federal judge has not found the Metro program unconstitutional. In fact, the federal judge has not ruled on whether the program is constitutional or not. The federal judge has enjoined Metro from, in fact, utilizing their program. We sought to enter into the litigation. We were denied by the federal judge an opportunity to do so. The Department of Justice also sought an opportunity to engage in the litigation. We are still waiting for the judge to give his ruling on that provision. The program that we have which is part of statutory requirement is one that has not been found unconstitutional either at the Supreme Court, nor by the judge in question. Even last year when there were discussions regarding the federal programs, the so-called Adarand decision, that decision did not rule that the programs were unconstitutional. As a result of that, they are still part of federal law, so the requirement that we have is the same one that we have here in Washington, in Houston, and all across the country. Throughout the nation the program is still operating. Mr. Wolf. So where does this put, Houston Metro? Mr. Linton. We are working with Houston Metro to try to get relief from the injunction. We are working--my counsels are meeting with their lawyers, talking to the city's lawyers. Mr. Wolf. The Secretary was going to get an opinion from the Attorney General. Do you know if he has asked for it? Mr. Linton. An opinion from the Attorney General regarding? Mr. Wolf. On this issue. Mr. Linton. Are you aware of that? Mr. Reilly. Several months ago, the Department of Transportation sought the Department of Justice to issue a notice which would require the court to allow the United States into the lawsuit. I don't know if that is what you are talking about or not. That is the only thing I am aware of at this point. Mr. Wolf. So where are we, then? What would Mr. Delay tell the people of Houston? Mr. Linton. Right. Mr. Wolf. Houston Metro, which is a project that is a good project. Mr. Linton. We believe the project is a good project. I have worked with Mr. Delay over the last several years to continue to get through some other hurdles we have had with that project. We have come out with a good result. We are trying to work with the City of Houston on this one, as well. Mr. Wolf. How soon do you think you will have it resolved? Mr. Linton. There are two questions. The first is in regards to when the judge will make a decision on Houston's request to be removed from the injunction. The other question is when the judge will decide as to whether or not FTA, represented by the U.S. attorneys, can engage in the litigation. And those are before the judge. Mr. Wolf. When do you expect the judge to rule? Mr. Reilly. He has been slow to rule. I would anticipate sometime in the next six to eight weeks. Mr. Wolf. And what impact is this having on Metro today? Mr. Linton. There are a number of projects. Their section 5309 funds are for construction projects. They have not been able to receive these funds. Mr. Wolf. Well, I think maybe you are--let me submit a number of questions for the record. Mr. Wolf. Since you appear to be unwilling to consider a waiver, what can you suggest as an alternative affirmative action program that would be acceptable to the FTA and likely to pass muster of the court? [The information follows:] Section 1003 of ISTEA requires that not less than 10 percent of DOT funds be expended with socially and economically disadvantaged individuals and presumes that women and certain minorities are socially and economically disadvantaged. Although the Supreme Court in the Adarand decision did not find this statutory program unconstitutional, a federal judge in Houston, acting without the benefit of briefing by the Federal Government on the issues, has prohibited Metro from considering race or gender in awarding contracts in a preliminary injunction that remains in place. FTA has an obligation to ensure implementation of the statutory program that requires consideration of race and gender. Moreover, FTA cannot presume to know what kind of plan will satisfy the court in Houston. DOT and FTA have moved to intervene in the suit to persuade the court that the Congressionally mandated DOT DBE program is constitutional. Mr. Wolf. Metro has asked that the FTA permit Metro to qualify as a recipient of federal funding for specific projects which are critical to addressing Houston's transit and mobility needs and which have been supported by FTA grants since their inception. Funds for these projects were awarded several years ago and, in some cases, had already been expended prior to the injunction. When do you expect to respond to Houston Metro's request and what preliminary indication can you share with the committee? [The information follows:] FTA responded on March 5, 1997, to Metro's request for definitive agency action on a project-by-project basis. FTA stated that although it will continue to permit Federal funding for Metro's pre-injunction contracts for grants that FTA approved prior to the injunction, FTA will neither reimburse Metro for expenditures on new construction-related contracts necessary to complete projects identified by Metro, nor approve additional grants to carry out construction-related projects. Mr. Wolf. More generally, I understand that other federal agencies have accepted race and gender-neutral programs. Does the FTA have any plans to consider such programs, which seem acceptable to the courts? [The information follows:] If other Federal agencies have accepted race and gender- neutral programs, they must have greater flexibility than DOT has under its statutory Disadvanted Business Enterprise (DBE) program. Section 1003 of ISTEA requires that not less than 10 percent of DOT funds be expended with businesses owned and controlled by socially and economically disadvantaged individuals and presumes that members of certain minority groups and women are such individuals. The statute thus prescribes a program that is not race and gender-neutral. Mr. Wolf. Along the same lines, is the FTA reforming its requirements to meet the constraints imposed by the courts, and if so, when will these new requirements be in place? [The information follows:] The Department of Transportation (DOT) has prepared a Supplemental Notice of Proposed Rulemaking that it expects to publish for public comment in the near future. After considering the comments, DOT will publish a final rule amending its current Disadvantaged Business Enterprise (DBE) regulation. Mr. Wolf. What specific recommendations will the FTA be proposing in its rulemaking to ensure that its DBE regulations conform with the Supreme Court's Adarand decision? [The information follows:] The Supplemental Notice of Proposed Rulemaking (SNPRM) that DOT expects to publish in the Federal Register responds to the ``narrow tailoring'' requirements of the Adarand decision. The following aspects of the rule proposed for change in response to Adarand include overall goals; means of meeting goals; the rebuttable presumption of disadvantage; graduation; concentration of DBE firms in certain types of work; and program waiver. Mr. Wolf. Have you talked to Mr. Delay recently? Mr. Linton. No, I have not. I had responded to Mr. Delay's correspondence, and I also contacted his office to see if in fact we could meet. Mr. Wolf. Could I suggest you give him a call. Mr. Linton. Sure. Mr. Wolf. Perhaps after the break or even talk to him on the phone during the break about seeing if there is something that could be done. Mr. Linton. Sure. NOVA BUS AND BUY AMERICA Mr. Wolf. Have you had any dialogue with Niagara Frontier Transportation Authority, the Rochester-Genesee Regional Transit Authority, PACE of Arlington, Illinois, the Connecticut Transit because they have been caught off-guard by news that they will probably not receive a previously awarded grant. Have you had any dialogue with them before your announcement, or what is the status? Mr. Linton. Let me just say that we received a complaint lodged against NovaBus that they were violating the Buy America provision of law. We did an investigation, as we do when we are an investigatory body in that regards. That is not something that is open for debate or discussion among the parties. What has to happen in that situation--we are almost similar to the IG. We have to go out, do a fact finding, collect information from the properties and make a ruling. That is exactly what we did. We did a fact finding, received the information, and we notified all the parties of the finding. We notified both NovaBus and we also notified the four properties that were involved. The statute is fairly clear. It states that if there has been a Buy America violation, that federal funds cannot be used to pay for those vehicles. Mr. Wolf. Did you audit them to see that there has been? Mr. Linton. We do not do audits. Mr. Wolf. Who does? Mr. Linton. According to the statute and the regulations the responsibilities for making sure that the Buy America provisions have been complied with rests in the hands of the properties. The properties are required to do a pre- and post- audit. They are also required to certify that the products that they have purchased have been in compliance with Buy America, and they are also required to have an inspector on site to ensure that the manufacturing process is being done by the bus manufacturer which they are purchasing the vehicles from. Mr. Wolf. But, you know, I think you have got to get personally involved in this, too. We have been told--Mr. Riley, the Chief Executive Officer of the Rochester-Genesee Regional Transit Authority, has informed the committee that they do not have the funds to reimburse the FTA. His total annual budget is $35 million. A repayment of $12.2 million, even in installments, would be devastating. Mr. Swist has said that the impoundment of $7.6 million for the Niagara Frontier Transportation Authority would drive his transit into bankruptcy. Federal grants account for a large percentage of the transit authorities budgets. This is creating chaos. Mr. Linton. Mr. Chairman, let me just say that when we make a finding--and this is not the first time we have done that-- When we make a finding, the properties have an opportunity to come in---- Mr. Wolf. These are little properties, though. Mr. Linton. The little properties have an opportunity to come in and discuss it with us. That has not taken place. We are open to that. Mr. Wolf. We are going to call them tomorrow to tell them that you said that you would sit down with them and work this thing out, because---- Mr. Linton. We have, in fact, provided information. And the responsibility is for them to come in and sit down with our general counsel, who is prepared to meet with them. Mr. Wolf. Well, why don't you give them a call tomorrow. Mr. Linton. You bet. Mr. Wolf. And who would audit NovaBus? I wasn't clear. You said you don't do audits. Who would audit? Mr. Linton. The audit of all the buses in complying with Buy America is done by the grantees. All of our grantees---- Mr. Wolf. There is no certification, though. Mr. Linton. All of our grantees--WMATA does it with theirs. All the grantees---- Mr. Wolf. But, you see, the problem when one self certifies and Nova says what it is, where do they go? How do they get out of the circle? Mr. Linton. One self certifies and---- Mr. Wolf. Buy American gets certified by the company, correct? Mr. Linton. Buy America---- Mr. Wolf. Nova says they are okay, so where does the small company---- Mr. Linton. The small company is supposed to pre-audit before they purchase the vehicle, whether or not the bus manufacturer is complying with Buy America. Mr. Wolf. How do they do that? Mr. Linton. Many of them have contracts---- Mr. Wolf. Well, I---- Mr. Linton. And they also--excuse me. I'm sorry, Mr. Chairman. Mr. Wolf. No, go ahead. You go ahead. Mr. Linton. They are also required to have an on-site inspector to ensure that that is in fact going on. That is part of the Buy American provision and responsibility of the grantees. All of them across the country, all 560 of them, are required to do that. Now when, in fact, after an investigation it is---- Mr. Wolf. You are not filibustering here, are you? Mr. Linton. What is that? Mr. Wolf. You are not filibustering? Mr. Linton. No, I would never do that. You never learn that in the legislature. Mr. Wolf. How much time is left? Ten minutes. And is there another vote right away? Ten minutes to debate. Maybe we could walk over together. So that would be ten minutes and then what? And then is that it? Well, why don't you call them and then just let us know. We will ask these for the record. Mr. Wolf. I understand that the FTA is demanding the return of millions of dollars in previously awarded FTA grants from numerous grantees because the FTA has found that the grantees' subcontractor for buses, a Canadian company called NovaBus, did not meet FTA's domestic final assembly requirements for buses, alleging that most of the significant manufacturing operations took place in Canada. Transit authorities in New York, Connecticut and Illinois are all affected. What is the total amount in FTA grants that the FTA is demanding to be returned? [The information follows:] FTA has not yet demanded the return of any grant funds by the four grantees involved. All four grantees have been given an opportunity to explain their positions, and FTA will consider the submissions of each of the grantees. The total amount of grant funds in question is $33,269,468. Mr. Wolf. What other regional transit authorities may find themselves in similar situations? How extensive is the problem? [The information follows:] FTA's investigation showed that only four grantees received vehicles from NovaBUS that did not meet the Buy America final assembly requirements. These grantees are: Rochester Genessee Regional Transportation Authority, PACE, the Niagara Frontier Transportation Authority, and the Connecticut Department of Transportation. Mr. Wolf. Four FTA grantees, working independently of each other, uniformly misinterpreted FTA guidelines for final assembly. Does FTA think it proper to issue so harsh a penalty over noncompliance with rules that are at best, vague and ambiguous, and after good faith efforts to comply with regulations? [The information follows:] FTA's final assembly requirements are understood and followed by the bus industry at large. FTA has surveyed the other five bus companies operating in the U.S. market. All five convert bus shells into finished products at their U.S. plants by adding major components such as engines, electrical systems, and heating and cooling systems. Most of the companies specifically cited FTA guidance as setting the standards they must meet for final assembly. As for the four grantees, FTA found that they had not properly conducted their required Buy America audit reports. The reports contained mainly material provided by Nova Bus. A grantee cannot rely solely on such information in conducting its audits, but must determine whether, in its own analysis, manufacturing activities constitute adequate final assembly. If a grantee contends that the rules are vague and ambiguous then it should not certify that it is satisfied that the Buy America requirements have been met. Each grantee so certified. Mr. Wolf. If the real target in this witch hunt is NovaBus, the agent responsible for making sure the complex ``Buy America'' regulations are followed, why are you using regional transit authorities and the persons they serve as pawns? [The information follows:] FTA initiated its investigation of Nova Bus in response to a whistleblower complaint that Nova Bus' Quebec/Schenectady operation did not meet the Buy America final assembly requirements. In accordance with its regulations, FTA required the complainant to submit detailed and convincing evidence of a possible violation, and reviewed this information carefully to ensure that an investigation was justified. Under FTA's Buy America regulations, grantees are responsible for ensuring compliance with Buy America and must certify that any vehicles they purchase meet the applicable requirements. Under no circumstances should a grantee passively rely on a manufacturer's certification. Therefore by law, the grantee, not the manufacturer, must answer to FTA when vehicles are found to be in noncompliance. BUY AMERICA--GENERAL Mr. Wolf. Will FTA issue a waiver of the Buy America requirements under the ``public interest'' provisions of the statute and the regulations? If not, why not? [The information follows:] FTA has received requests for a public interest waiver of the Buy America requirements from some of the affected grantees. FTA will make a determination on their requests after considering all relevant factors. To date, none of the grantees has presented evidence of financial harm. FTA will consider this evidence when it is presented. Mr. Wolf. What is FTA doing to ensure that this situation does not happen again? For example, is the FTA reviewing its interpretation of the regulation to ensure that it is not incorrect or that the definition is defective? Do the regulations need further clarification? [The information follows:] FTA believes that its definition of final assembly is consistent with the purpose of the Buy America provision, which is to ensure that FTA funds are used to create manufacturing jobs in the United States. Therefore, FTA's regulation and guidance require that most major assembly operations take place in the United States. In the case of rolling stock, FTA has stated that the installation and interconnection of major components, such as the steering system, transmission, the engine, and the braking system, constitute final assembly. FTA recently conducted a survey of bus manufacturers' final assembly operations and is satisfied that the industry as a whole meets these standards. FTA has also approved a compliance plan from NovaBUS under which that company has agreed to shift production from Quebec to New York State in order to perform more manufacturing operations in the United States. Mr. Wolf. How will the FTA improve its dialogue with its grantees who are struggling to determine the validity of claims made by manufacturers that they comply with the Buy America assembly requirements? [The information follows:] To help its grantees better understand the final assembly requirements, FTA has recently issued guidance to them on conducting proper pre-award and post-delivery audits of a vehicle manufacturer's final assembly operations. This guidance explains what manufacturing processes constitute final assembly and clarifies the role of the grantee's on-site inspector in ensuring that the Buy America requirements have been met. FTA has advised grantees that any questions of interpretation of the requirements should be referred immediately to FTA. attb-Inspector general issues Mr. Wolf. A keystone of the FTA's research program has been the advanced technology transit bus. The FTA has based its support for the ATTB on claims that the bus will result in a cleaner, safer, and more cost-effective bus, yet the Inspector General informs the committee that while the ATTB will result in a cleaner transit bus, data is not sufficient to conclude that the project will produce a safer and more cost-effective bus. Does the FTA take issue with the conclusions of the Inspector General? [The information follows:] No, the Federal Transit Administration (FTA) does not take issue with the Inspector General's (IG) memorandum, but rather, wishes to clarify and to put into perspective the IG's conclusions. The IG correctly concludes that information available at this stage of the Advanced Technology Transit Bus (ATTB) program is insufficient to use as a basis for absolute conclusions about the safety and cost-effectiveness of a production ATTB. That is why FTA is requesting $10 million to complete the fabrication and testing of six prototype ATTBs. The data gathered will provide sufficient information regarding safety and cost-effectiveness of ATTB prototypes, and in turn, will form a sound basis for projecting that information toward the safety and cost-effectiveness of production ATTBs. In addition to the IG finding that the ATTB will emit less pollutants, resulting in a cleaner bus, it is important to note that the contractor performed several safety-related tests. These tests included a side-impact crash test with an automobile, a burn-through test to determine the self- extinguishing characteristics of the composite body, and a wheel well impact test. These test results showed no apparent damage to the ATTB structure. In addition, the IG survey supported FTA's assertion that the ATTB will save approximately $3,660 in annual fuel costs per bus. Mr. Wolf. The Inspector General found that a comprehensive life-cycle cost analysis had not been performed to determine if it would be cost-effective to procure and operate the ATTB and that the analysis should be completed in order to make informed decisions to fund grantee purchases of the ATTB. When will the FTA conduct such an analysis and when will it be completed? [The information follows:] The data necessary to support a life-cycle cost analysis will be collected concurrently with Advanced Technology Transit Bus (ATTB) prototype field testing and durability testing at the Altoona Bus Testing Facility. By the time the test program is completed in December 1998, the data needed for a comprehensive life-cycle cost analysis will be compiled. The analysis should be available within 90-days of the conclusion of the test program. The ATTB prototype program will provide a sound basis for projecting the cost, performance, and cost- effectiveness of a production version of the ATTB. georgetown fuel cell project Mr. Wolf. And I want to ask some about the Georgetown University cell bus for the record. Another research project supported by the FTA's research and development program is the Georgetown University fuel cell transit bus program. In fiscal year 1998, the FTA is seeking $6.5 million. Has the FTA conducted a life-cycle cost analysis of the fuel cell bus? [The information follows:] FTA recognizes the importance of life cycle cost analysis in the development of a commercially viable fuel cell transit bus and is requesting $5 million for the program. The existing program requires such a study to be completed by Booz-Allen & Hamilton, the Systems Integrator for the fuel cell transit bus. The study is scheduled to begin in May 1997 and will be completed this fall. It was not possible to begin this any earlier since the fuel cell power system and electric drive train for the fuel cell transit bus were not sufficiently defined. Mr. Wolf. When does the FTA plan to conduct such an analysis and when will it be completed? [The information follows:] The study is scheduled to begin in May and will be completed this fall. It was not possible to begin this any earlier since the fuel cell power system and electric drive train for the fuel cell transit bus were not sufficiently defined. Mr. Wolf. Georgetown University is seeking $14 million in fiscal year 1998; $8 million for the basic program to develop two fuel cell powered buses and $6 million to accelerate the pre-commercialization process. In addition, the University is requesting $25 million for an Intermodal and National Depository Fuel Cell facility. What can FTA tell the committee about the nature and need of those requests? Why did FTA reject these requests during its budget formulation? [The information follows:] Given the limited resources available and the tremendous demand on the National Program, FTA allocated $5 million for the fuel cell transit bus program to continue development of two fuel cell powered buses. The FTA believes that it would be premature at this point to accelerate the commercialization process of this technology for transit buses until more definitive results from the current program have been obtained. The goal of the current 40-foot fuel cell bus program is to commercialize fuel cell transit buses for transit agencies. The project is well underway with a prototype 40-foot phosphoric acid fuel cell bus scheduled to be completed by December 1997. Work has also been recently initiated on the development of a prototype 40-foot proton exchange membrane fuel cell bus which is expected to be completed by the end of 1998. Both efforts are focused on the development of a 40-foot fuel cell transit bus that would be economically viable for transit agencies to operate in regular revenue service. To that end, the testing and demonstration of these buses should be conducted at transit agencies. Since Georgetown is not expected to host these 40-foot fuel cell transit buses, a larger fuel cell maintenance facility would not be required. Following the successful testing and demonstration period, it is envisioned that a limited number of production 40-foot fuel cell transit buses would be fabricated and introduced in a number of transit agencies across the country. Again, since Georgetown is not a transit agency, none of these 40-foot fuel cell transit bus would be delivered to Georgetown. We believe that the proposed project (extensive access ways, parking for university automobiles, and an informational repository for fuel cells) is not only outside of the scope of the FTA Fuel Cell Transit Bus Program, but is also outside the scope of the FTA National Program in general. FTA will continue to work with Georgetown to complete the 40-foot fuel cell transit bus program and to make it a resounding success for the transit community. However, FTA cannot justify using its National Research Programs funds for the proposed Intermodal and National Depository Fuel Cell Facility. The Fuel Cell facility project could be considered for funding under FTA's formula assistance program if an eligible recipient under that program were to include the facility as part of the Transportation Improvement Program for the Washington, DC transportation management area. [Pages 1113 - 1377--The official Committee record contains additional material here.] WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY Mr. Wolf. We have a series of votes on the House floor. We will have to do first go vote and then back and work in WMATA oversight. We may have to come back and do ten minutes or 15 minutes and run back. We need a time management study of the Congress. We will submit your statement for the record rather than get into it now. I ought to just go vote and then I will be right back. [Recess.] [The oral and prepared statement and biography of Richard White follow:] [Pages 1380 - 1414--The official Committee record contains additional material here.] general observations and challenges Mr. Wolf. WMATA has seen a sea change in its top management. I am going to ask you a lot of these questions briefly, and then if you can elaborate on all of them, frankly, for the record, because I don't think we are going to have enough time. WMATA has a sea change in its top management. Mr. White, you have been in the job as general manager for less than a year. What significant challenges do you see coming in? Mr. White. Right now our most significant challenge is to finish the construction of the 103-mile system. That is our first challenge. That includes finding sufficient funding to build our planned Branch Avenue yard and to purchase an adequate number of cars for the 103-mile system. The second significant challenge is to help the region face up to the fact that we have to have an adequate level of funding to preserve and rehabilitate the investment that has been made in the transit system. wmata's appropriations request Mr. Wolf. What are you asking for this year, next year? When will the 103-mile system be paid for, and what is next? Mr. White. We are requesting $200 million in fiscal year 1998 appropriations. That will leave us with a remainder of $50 million in the fiscal year 1999 appropriation cycle. That will then complete the federal commitment to the 103-mile system. Mr. Wolf. And then you mentioned the other thing. Mr. White. I was answering your previous question on our priorities. Beyond completing the 103-mile system, the second major priority is to preserve the investment in what will be a $10 billion investment made in the bus and rail system. We need to have an adequate level of money to rehabilitate the system. I think our third basic priority is to kind of change-- adapt to the changing environment around us. We are facing some very significant demographic changes, population and shifts that have an effect on our ability to serve the metropolitan area. The fourth major issue is to ensure that we find a way to have dedicated state and local funding that comes our way rather than do what I call, ``pass the hat every year and pray and hope.'' Mr. Wolf. Your permanent team is in place? The whole team? Mr. White. I am still in the process of filling a few extra vacancies. I have made my key appointments, starting with the Deputy General Manager of Operations. That position has been filled with a topflight professional. I have recently filled my safety position, which was a significant vacancy. That has just recently been filled. A few other key vacancies have recently been filled, but I have another two or three to fill. wmata's maintenance needs Mr. Wolf. Okay, what is WMATA's first priority? And I think I know the answer. Is it to complete the 103-mile system, to respond to growing capital shortfalls, or is it to extend the original system with spurs to Largo? Mr. White. Our first priority is to finish the 103-mile system. That is our first priority. Mr. Wolf. In an interview with The Washington Times, you indicated WMATA needs an infusion of $40 to $80 million in the next few years just to maintain the aging system. You continued to state that if WMATA doesn't get it, riders will see the 20- year old Metro go the way of troubled systems in New York, Chicago, and Boston. Would you comment on that? Mr. White. Yes, that is really speaking to the issue that the WMATA system is moving into its middle age. Our oldest rail lines have been serving the public for 21 years now. As we are aging, our capital rehabilitation and replacement requirements are going up, to the point that we estimate we are going to need on average about $185 million per year for the next six years. Mr. Wolf. $185 million? Mr. White. $185 million. Mr. Wolf. What would have that figure been five years ago? Mr. White. Closer to the 100 to 125 million-dollar range. We foresee at this point in time currently available funds of less than half of that. We estimate that about 90 million is available annually based on current federal, state, and local funding arrangements. We have a fairly significant funding gap of about $90 to 95 million a year. Mr. Wolf. Where do you propose to get those funds? Mr. White. That is one of the key issues that is being discussed right now. The language in last year's Appropriation Committee report has spurred us on in a couple of areas. First, you identified the major problem of the fragmentation of regional bus services and asked us to take a leadership role in developing a cohesive regional plan to address that issue. We are doing that. At the same time that we are doing that, we are building a coalition of people to see if we can't come together with a regional consensus on what is the appropriate level of funding for Metro and how do we find more stable and predictable state regional and local funding sources. ridership Mr. Wolf. What is the ridership now? Mr. White. Our daily ridership today is about 505 to 510,000 trips per day on the rail system and about 360 to 365,000 trips per day on the bus system. Mr. Wolf. And what were your projections and expectations, say, ten years ago? Mr. White. I can't speak to what the projections were ten years ago. With respect to trends, last year was a fairly difficult year for us for a number of reasons. In fiscal year 1996 we saw our bus ridership drop about 12 percent. We saw our rail ridership drop about five percent. Those trends, I think, have bottomed out. Rail ridership is back up from a year ago. Bus ridership is below where it was a year ago slightly. But, these are troublesome ridership trends that we are watching very closely. Mr. Wolf. But where do your projections--if somebody had been testifying ten years ago, what would have they said your ridership for both bus and rail should have been? Mr. White. I am advised---- Mr. Wolf. Rail was 500 and some, so what were the rail expectations when this system was designed and planned and begun, the construction, where would have they been? Mr. White. I am advised that the estimates for rail were approximately where we are today, a little over half a million trips per day. Mr. Wolf. And what about for bus? Mr. White. I think the bus projections, would have been quite a bit higher than ridership is today. We had a maximum of approximately 460,000 trips per day on bus several years ago. The trend suggests we would have been closer to the half a million trips per day on buses, as well. Mr. Wolf. So you are down? Mr. White. Considerably. Mr. Wolf. If you could provide more detail on both of those subjects, the expectations on both rail and bus and what they are today and explain why you think they are up or, obviously in these cases, why you think they are down. [The information follows:] In 1989, ridership projects were prepared for the Authority for 1995 and the 89.5 mile Metrorail system and supporting Metrobus service. The projections utilized the regional travel demand forecasting procedures maintained by the Metropolitan Washington Council of Governments (MWCOG) and projections of population and employment prepared by the local governments for the MWCOG. The ridership projections produced by this analysis were approximately 585,000 weekday Metrorail passenger trips and 467,000 weekday Metrobus passenger trips. Actual ridership figures were less than the projections. In Fiscal 1995, Metrorail ridership averaged 519,000 weekday passenger trips, or 11 percent less than the projection. Metrobus actual ridership was 409,000 weekday passenger trips or about 12 percent below the projection. While the ridership projections exceeded actual ridership, the overall performance of the bus and rail systems compared to the projections has been quite good when compared to protections made for other systems and accounting for dramatic changes that have occurred in the region. Clearly, demographic changes and changes in service levels have had an adverse affect on the Authority's ability to meet the projections. With regard to demographic changes, the declines in employment in the District of Columbia and the growth in suburban employment, as well as the growth in suburban population and the sharp decline in population in the District of Columbia, were not foreseen in 1989. The other major factor that affected the ridership projections were the levels of transit service, particularly on the Metrobus system. The Metrobus network of routes utilized in the 1989 projections did not include the service reductions and local government takeovers of Metrobus service that occurred between 1990 and 1995. In the case of service takeovers, the service is being provided by local governments and the riders are on those bus systems. They are just not on the Metrobus system. Hopefully, the results of the regional bus study will establish a plan for the region and will translate into actual future service levels. However, future ridership projections will still have to rely on demographic projections as base inputs. financial issues Mr. Wolf. What are the principal reasons for WMATA's money woes? [The information follows:] WMATA is facing fiscal constraints from three fronts: flat or declining ridership, level local subsidies, and increased costs. The downsizing of the Federal workforce and relocation of Federal jobs from the central core area have affected WMATA's ridership. From 1992 to 1996, employment in the central core (D.C., Arlington, and Alexandria) decreased by 28 thousand jobs, reflecting the movement (or elimination) of Federal jobs and the private sectors jobs which support them. In Fiscal 1996 alone, we estimate the financial impact of the federal downsizing to be a loss of $10 million in passenger revenues. This drop in core employment is mirrored by a minuscule Metrorail ridership increase of one percent per year since 1992, compared with nearly eight percent per year from 1985 through 1991. This trend is even more pronounced in Metrobus ridership, which has declined by nearly four percent per year since 1992. The impact of Federal downsizing and relocation, as well as the generally sluggish local economy, has also been felt by the local governments, whose fiscal problems have limited their ability to increase subsidies to WMATA. WMATA's operating and capital improvement costs have increased for three reasons. First, the Metrorail system has expanded in recent years, requiring additional resources to provide service and maintain the system. Second, inflationary pressures have caused costs to rise. And third, with portions of the rail system now over twenty years old, the system is aging and increasingly requires capital investments beyond routine maintenance to continue providing the quality of service the riders have come to expect. With fares already fairly high and no substantial ridership growth, there is little room for passenger revenue growth. With local jurisdictions unable to increase subsidies substantially, the only other income source is also constrained. Thus the Authority faces the task of covering increased costs with level income. fares Mr. Wolf. Fares account for less than half of WMATA's operating budget, with the other half coming from local jurisdictions and the Federal Government. Two years ago, WMATA was forced to raise fares ten cents. Given the continuing financial crisis of the District and the suburban jurisdictions, will you be forced to raise your fares anytime in the near future? Mr. White. We recover approximately 53 percent of our operating costs from fares, and---- Mr. Wolf. That is total bus and rail? Mr. White. Total bus and rail, 53 percent. Mr. Wolf. And breaking down rail is? Mr. White. We recover is approximately 70 percent on rail and approximately 35 percent on bus. I am very pleased that for the second year in a row our proposed fiscal year 1998 budget-- our fiscal year starts this July 1--proposes no fare increases and no service reductions. In fact, we have proposed some service expansions. I am very focused on finding a way to maintain our services at current fare levels, recognizing that I think we are at the upper echelons of what the market can bear with respect to our fare structure. Mr. Wolf. I agree. I think we are at the upper level. When I look around the country, we are--if I read it right, we are higher than most. Mr. White. It depends. We are unlike a lot of transit systems in that we have a distance based fare structure. Our base fare is considerably lower than most. Mr. Wolf. But the base---- Mr. White. Our average fare---- Mr. Wolf [continuing]. Is so small---- Mr. White. Yes, our---- Mr. Wolf. You can go from one part of Manhattan to the other part of Manhattan and change---- Mr. White. For $1.50. Mr. Wolf [continuing]. And spend all day long, it seems, and here you are--you go from Vienna to downtown and it is $2.30. Mr. White. Our average fare is about $1.85. Mr. Wolf. Yes. Last year it was indicated that Fairfax was having difficulty meeting their subsidy requirement. Has this changed over the past year? Mr. White. This year we have not had any difficulty from any of our jurisdictions in meeting their subsidy requirements. Mr. Wolf. What about--no other jurisdictions is the District the same way? Mr. White. Yes, payments from the District of Columbia have been quite timely in the last several months; certainly since I have been here. Mr. Wolf. The financial condition of the District has not improved. What does the DC financial crisis mean to WMATA? Is there any impact that that will have on WMATA in any way at all? Mr. White. We have to watch it very closely. The District supports us with $180 million per year. That is a very sizable sum. About $130 million of that is for operations and $50 million is for capital. We need to watch very closely the financial condition of the District which affects their ability to provide funding. We have seen in the last couple years a very debilitating cumulative effect of fare increases and service cuts, particularly in the District of Columbia, which has been driven by prior year fiscal crises that they have had to deal with. Certainly past experience has been that when the District has had to cut its budget, it has a devastating effect on the transit riders in the District of Columbia. I am trying to make sure local officials understand the tradeoffs when they make budget decisions. district payments Mr. Wolf. When and in what amounts are the next payments to be paid by the District government due to WMATA? [The information follows:] The net payments from the District of Columbia were due on Tuesday, April 1, 1997. The amount due was $28,609,335. The payment was made on time. wmata system rehabilitation Mr. Wolf. You said that Metro will need as much as $150 million annually to maintain the existing system. What are the system's principal replacement and rehabilitation needs and how does this level compare with other systems around the country? Mr. White. Our needs are your typical needs of a transit system with a large-part being rolling stock replacement. We have 1300 buses and 760 rail cars. Rehabilitating and replacing those vehicles constitutes the lion's share of our capital improvement program. Additionally our basic facilities, structures, and support equipment need to be rehabilitated. Our current estimate in this year's budget shows the phenomenon of an aging system. Our capital needs are going up from $150 to $185 million per year. Mr. Wolf. We will have more for the record on that. Metro has stated in previous years that it may be necessary to request additional funding to construct the Branch Avenue rail yard and to purchase additional cars. Are these items still required, and is Metro planning to request additional funding? Mr. White. Yes, the items are still required. As you may recall, Mr. Chairman, it was understood clearly by the parties at the time that the full funding grant agreements were executed that those were unfunded components of the program. It was recognized that they needed to be done, but probably exceeded the funds identified at that time. Since then we have been working to fit these two projects within the existing funding levels. I am pleased to say that, to date, we have identified approximately $170 million due to the efficiencies and savings in our construction program. These funds will be applied to the Branch Avenue yard and cars. In total, the maximum amount that will be needed for these two projects is about $350 million. We are working our way through this project. I am feeling more confident by the day that we will be able to accomplish both of these projects within the existing authorization. proposed addison road to largo town center line Mr. Wolf. What actions has WMATA taken to advance the draft environmental impact statement and general plans for the Addison Road to Largo Center rail extension? And has this proposed leg of the system been added to the Metro Adopted Regional System? Mr. White. This project is an initiative of the State of Maryland, and co-sponsored by Prince George's County. The role of WMATA is to provide professional services and to help to support the advancement of the technical engineering and environmental work associated with the project. Today the project has gone through the alternatives analysis phase. It has gone through the Draft Environmental Impact Statement phase and is now being advanced to the Final Environmental Impact Statement preliminary engineering phase, subject to appropriations and by the State of Maryland. Mr. Wolf. What will the project cost? Mr. White. $382 million. Mr. Wolf. $382 million for how many miles? Mr. White. 3.1 miles. Mr. Wolf. So that is roughly 100 million--I mean, that is 130 million a mile if we believe those figures. Mr. White. That is probably slightly less than the costs for our existing system. Cost has been contained, because the rail line is in a dedicated right of way that has been on a master plan in Prince George's County for over 20 years now. That in essence has contributed to a lower estimated project cost. Mr. Wolf. And the daily transit ridership would be what? Mr. White. 15,000 new transit riders per day. Mr. Wolf. Does---- Mr. White. The project has a cost effectiveness index of about $7.30 per rider. Mr. Wolf. But how do you come and ask for that when we haven't completed the system? Mr. White. We are not presently asking for anything at this stage. Mr. Wolf. But are you not, kind of, buying into it if you are doing the planning and you are doing the work for them? Mr. White. The interest of the state is to preserve its decision making options as the project moves through its environmental and preliminary engineering phase. Further decisions on this project will be made about a year and a half from now, subject to the release of funds from the State of Maryland. Mr. Wolf. There is 20 million needed to complete the final environmental impact statement and preliminary engineering. What funds does WMATA expect to contribute to these activities? Mr. White. There is about 4.7 million that is necessary to complete the Final Environmental Impact Statement and Preliminary Engineering to secure a Record of Decision. WMATA is not planning on funding any part of that. [Additional information follows:] All costs incurred by WMATA for the Draft Impact Statements and General Plans are being fully reimbursed by the State of Maryland. Mr. Wolf. And how many staff years has WMATA contributed to date? Mr. White. We have received a little less than a million dollars for our own staff work to date for this work, which translates into approximately 8.6 staff years of work. Mr. Wolf. What are the estimated annual operating costs to WMATA if this were extended? Mr. White. The estimated operating costs are approximately $1.3 million per year, which likely would be funded under a jurisdictional subsidy allocation formula. Mr. Wolf. Considering the existing capital and operating shortfalls of the 103-mile system that you talked about earlier, how can WMATA afford the additional financial burden of the Largo extension? Mr. White. Mr. Chairman, our priorities are to finish the 103-mile system and to ensure that we have an adequate level of funding to preserve the existing investment. What we see going on around us are initiatives by the respective states, Maryland, Virginia, and the District, to look into the future beyond the 103-mile system. Perhaps it is many years from now, but they are all looking into what their priorities may be beyond the 103 miles. We have only participated by providing professional services. Mr. Wolf. I better go vote. If you will excuse me, I will try not to do this again. Hopefully we will just wrap up the next time. I have a lot more questions, but excuse me. I will try to be back in ten minutes. [Recess.] wmata system maintenance Mr. Wolf. We are going to have another vote in about ten minutes, and I think that will be it. You can thank Mr. Linton for filibustering in the morning whereby the time was eliminated, but we will have to submit a lot for the record. On maintaining the system, you talked about Metro's annual cost of $180 million? Mr. White. $185 million. Mr. Wolf. $85 million. How does this compare with the funding this region spends on highways? Mr. White. Interestingly, it is probably about 25 percent what the region spends to maintain highways, to the best of our ability to calculate that number. You have to go to a lot of different sources to estimate. But the best of our understanding is that the region spends about $750 million a year on maintaining the highway system, so our projected transit maintenance losts would be a little bit more than 20 percent of that. Mr. Wolf. And what are the consequences if we don't invest in this type of funding? Mr. White. Well, I think the consequences are what happens if the public investment is allowed to slowly deteriorate over time. You don't see it on a moment-by-moment basis, but eventually we will start seeing considerably less reliable service, as we begin to have problems with aging equipment. Without reinvestment customers will start to experience problematic escalators, elevators and fare collection equipment. We do a lot to maintain these systems and yet we still have problems. These are the kinds of systems that will start failing if you don't have an adequate level of rehabilitation funding. That, of course, become a disincentive for riders. Once this happens a transit system can get into a downward spiral where you start raising fares and cutting service to make up for insufficient rehabilitation funding. Mr. Wolf. How do other transit properties pay for their maintenance expenditures? Mr. White. It seems like just about every transit system in the country, except perhaps one or two in the top 30 systems around the country, have some form of dedicated funding that goes their way. It comes in many different variety of sources, including property taxes and sales taxes, automobile licensing fees, excise taxes, and gas taxes, among a number of different sources. There is a very large menu of different choices that metropolitan areas have, and they have seemingly chosen different sources. We don't experience that funds are allocated through the jurisdictional budgeting process, on a year-by-year basis. We really don't get any money that comes directly our way. And as a result, we really are dependent on annual local and state appropriation processes. Mr. Wolf. What deferrals of rehabilitation and replacement actions have been taken within the past year to accommodate for reductions in local, state or federal support and other unforeseen expenses? Mr. White. At this stage, it is most pronounced in our replacement program, particularly in our bus replacement program. That is the part of the program that has suffered the most. As a result, we have a fairly old bus fleet. We have about an average bus age of more than ten years, which makes us among the oldest bus fleets in he nation. That that is the thing that we have seen most dramatically to date. However, right now in an upcoming year we are beginning to see shortfalls. The nuts and bolts of our system, like chiller systems and other parts of our infrastructure are really part and parcel to the service that we provide. We are now on the cutting edge of this problem. I think we have a couple of years to try and solve it. And as we do that, we are trying to do is to keep on sticking our fingers in the dike and solving our most immediate rehabilitation needs with the funding that we have. regional mobility conference Mr. Wolf. Do you think the regional governments know? Because I think some people sense that Metro is a new system. It is a new/old system or an old/new system, however you would define it. But do all the regions know how serious it is based on what you are saying? Mr. White. We are starting to get into that educational process. You may know, Mr. Chairman, that we held a very successful conference in January of this year where we had about 175 attendees, from all walks of life, including governmental, business, and civic leaders. The Federal Government also had representatives there. Members of Congress were there, as well. I think it was a good starting point in the educational process. It is the beginning of a renewed commitment by the region to metro. There is at least an understanding that the issue is serious enough that it needs to be addressed. What that outcome will be, I can't predict, but at least we were successful in bringing it to people's attention. Mr. Wolf. When is your sense that we will be able to know what the recommendations are and how the region will be responding to them? Mr. White. Your report language on the bus issue asked for us to report back to the Congress by September 30 of this year. That is the timetable that we are using. Our panel really has two principal charters. One is to make recommendations with respect to the bus issue. Concurrently, the panel is to develop recommended funding strategy. Our expectation is that both of those issues will be done within the September time frame. Mr. Wolf. And the process is, then, the different local jurisdictions will---- Mr. White. Once there is consensus as to what is needed and how that money gets spent, I think the debate will turn to which potential funding sources are available in the various jurisdictions throughout the region. The panel's recommendations could range from one singule funding source regionwide to a series of different funding sources, varying in Maryland, Virginia, and the District. Mr. Wolf. Are we disadvantaged by the split jurisdiction? Mr. White. It certainly makes our job more difficult when we really have to deal with three state legislative bodies, as well as several counties and municipalities. Mr. Wolf. Is this a time to look in terms of an authority now that the Metro will be completed? There is the airport authority which operates both airports. Mr. White. Some people may have given that a passing thought. I am not sure that would be the solution, at least in the short term. I can't predict how this situation may evolve over time, but at least in the near term, I think we are going to look within the existing structures that are in place and attempt to determine what financing mechanisms are available. Mr. Wolf. Well, obviously, then, the localities would have to take the leadership to do that. I am not suggesting that something be imposed now, but is that something that is being looked at or--and since you do cross state lines--MARTA down in Atlanta has Atlanta, its region. We go across into two states and the District of Columbia. It is very difficult. And within it the different localities--how many different localities, governmental localities, are in the operating area? Mr. White. We have nine member jurisdictions in our Interstate Compact, including Loudoun County. We have two states that fund us, as well as the District of Columbia and the Federal Government. We have a lot of people that we deal with on these funding issues. Mr. Wolf. Any other system have that many? Mr. White. Not to my knowledge. ridership trends Mr. Wolf. With the rail ridership dropping by 2.4 million trips this year, which will cost Metro, what, $3 million, you said? What will the drop in ridership cost Metro? Mr. White. Rail ridership declined about five percent last year. And I would say the factors---- Mr. Wolf. What does that cost you? Mr. White. Approximately $10 million in lost passenger revenue. Mr. Wolf. And you are pretty confident that that has stopped? Mr. White. Yes. Last year was an extraordinary year with the winter storms and the Federal furloughs. They had significant impact on us. Those issues, on top of the changing regional demographics, have had a big impact on us. The District of Columbia has lost ten percent of its population in the last six years. We primarily serve the central city. Fully 37 percent of all commute trips to the Washington downtown area are on Metro. As the central city shrinks, that has a significant impact on us. A second significant factor is the downsizing of the Federal Government. More than 50,000 regional Federal jobs have been lost in the last several years. That translates into approximately $10 million of lost annual revenue to us. Mr. Wolf. Okay. What percentage of the riders on Metro are outside the region or tourists versus those that are inside? Mr. White. I am not sure I know that off the top of my head. [The information follows:] Based on our most recent Metrorail survey taken in 1994, approximately 39,000 weekday trips or 5.7 percent of our daily total are made by individuals who live outside of our Transit Zone. Comparable data is not available for Metrobus. proposed largo line Mr. Wolf. I have some more questions about the Largo project. The Maryland General Assembly is currently considering allocating state funds for the remaining planning, environmental and engineering analysis. Can you bring us up to date on what the Maryland General Assembly has done or plans to do to move this project forward? [The information follows:] In its 1997 session, the Maryland General Assembly has favorably reviewed a proposal from the Maryland Department of Transportation to provide $4.7 million in state funds for the Addison Road to Largo transit extension study. These funds will be available beginning July 1, 1997 for the purpose of completing the Final Environmental Impact Statement (FEIS) and the Preliminary Engineering (PE) for a Metrorail extension from the existing Addison Road Station to a proposed terminus outside the Capital Beltway at Largo Town Center. It is anticipated that both of these elements will be completed by June 30, 1998. Mr. Wolf. If state funds were made available, when would preliminary engineering and the final environmental impact statements be completed? [The information follows:] On February 27, 1997, the WMATA Board took the following actions relative to the Blue Line Extension from the Addison Road Station to the terminal station at Largo Town Center: A. The Blue Line Extension was added to the Adopted Regional System (ARS) effective upon the following: 1. Satisfactory completion of the Final Environmental Impact Statement (EIS) and an issuance of a Record of Decision by the Federal Transit Administration; and 2. Approval of a financing plan for the construction, acquisition and operation of the new facilities by the WMATA Board and the execution of implementing financial commitments by the WMATA Compact signatories. This action did not obligate signatories or local governments to fund the construction of any facilities. B. The General Plans were approved for the preferred alternative resulting from the December 3, 1996 public hearing on the Draft Environmental Impact Statement and proposed General Plans. C. The General Manager was authorized to assist the Maryland Mass Transit Administration (MTA) as a cooperating agency with the preparation of the Final Environmental Impact Statement for the Blue Line Extension. dulles corridor Mr. Wolf. In closing I would just say that I have been and am a strong supporter of mass transit, and have been in the region with regard to Metro, in fact, working with the area delegation. One of the reasons that I got on this committee and asked to be on this committee years ago was to deal with the issue with regard to Metro funding. And while, as I made the comment last year, my district no longer has--there are no Metro stops in my district. My district now goes down to the Harrisonburg area and out to Winchester and Fauquier County and Rappahannock County and Rockingham County, but I am still committed to Metro. I think it is important, to have Metro in Washington as SEPTA is important to the whole surrounding areas of Philadelphia. So that has not been a problem for me. Things do change, though, and that is why I have such a problem with regard to the Largo project. And there is a move afoot with regard to the Dulles rail and some concerns that we have. And I think we are better off doing what has to be done to finish the system and then to take care of any of the problems that it may have and be less inclined to be thinking ahead with regard to Largo. One other question is what would the Dulles extension cost? Mr. White. In current dollars, approximately $1.45 billion. Mr. Wolf. Current dollars. So as we go on---- Mr. White. About $1.9 billion in escalated dollars. Mr. Wolf. $1.9 billion. Could you do some studies for us-- you don't have to get them to the committee. I just want to see them, what the densities would have to be for the rail to be in the Dulles Corridor. Secondly, would there be any impact on the tolls collected on the Dulles toll roads? Thirdly, would there be an impact on the Greenway, because the Greenway had--that is the road that--it goes from Dulles out to there, had difficulties. Would there be the requirement for--did you want-- Mr. White. Yes, Mr. Chairman. We will work with Secretary Martinez. His office has taken the lead on---- Mr. Wolf. The problem with his office, though, is his office just seems to want to go ahead and do this thing. Secretary Martinez doesn't serve on the committee. Secretary Martinez doesn't have the responsibility. I mean, I care about the property taxpayers of Fairfax County and Loudoun County and Arlington County and Montgomery County. So Mr. Martinez, who I know as a good friend, every time I hear him he is anxious to move ahead. But Mr. Martinez will be gone. Next year Mr. Martinez will be out working for somebody, and I think that is fine, but the people that live in the region are going to be the ones that have to deal with how they pay for this. And I think it is important. I hope to live long enough that I get to get on the subway at Farragut Square and go out to Dulles Airport and ride on a rail. And I think I will, but I think before we jump ahead and move in, we have got to be careful. So if you could just give us whether--what the far rate, what the density rate would be. Would we have to have a Boston at Reston? What is your guess? Mr. White. I know what the aggregate ridership estimates are, but I don't know what the estimates are for individual stations. I would have to study that previous analytical work a little bit more closely. Mr. Wolf. If you could give me what you think, and if you could do it relatively fast. Again, this is not for the record. We are finished with regard to what you have to supply for the record. Mr. White. Okay. I am one who believes, and we have the funding and FTA has been helpful with regard over the years, of getting the bus system up and running whereby we can then move from bus into rail. And I think if we have an aggressive bus system where people are learning to come in from mass transit, then the transfer is relatively easy. I worry about jumping from nothing over to that. Also some of the figures that I have seen take some of the ridership from the Orange line and shift it over to there. Well, that is not really a gain for Metro. That is mixing things from one line to the other. So what would the density be? Would you have to have paid parking at all those park and ride lots? Now they are free. Would you have any impact on the tolls being collected? Because that is a sensitive issue because, as you know, the Greenway was not successful and now the ridership is increasing because they dropped the tolls. Then I think these issues--and if I could ask you, Mr. Administrator, if you would do the same thing. Again, this is not for the record. Just have somebody put these things together. And if you could have your very best person who has no bias at all with regard to whether these things should go or not go to come up and sit down with us whereby we could just look at this and maybe compare. And it would be helpful if you didn't talk to Metro before the time so that you are not really comparing. Mr. White. Sure. Mr. Wolf. Nobody is going to graded, but just to see. And then we could talk to your best person. And I have great respect for you. I think Metro did a good job when they hired you. You or your best person, your best person at FTA. We don't have to get you to come up. And then we can have somebody from the county to sit in and just kind of kick these things around to see where we are because when I look at some of the needs that you say, which I am hopeful that we can address, but I just want to be careful that we move careful enough so that when we do move it is successful. We will adjourn and just submit the rest of the questions for the record. bond financing Mr. Wolf. Has WMATA exhausted its proceeds from its transit bond financing? [The information follows:] WMATA has substantially exhausted its proceeds from its transit bond refinancing. A total of $58,450,000 in transit bond proceeds has been made available to the Authority's Capital Improvement Program budget to finance critically needed capital rehabilitation projects. During Fiscal Years 1994 through 1997, a total of $58,402,000 has been applied to the capital improvement budget and a balance of $42,000 remains for application to the Fiscal Year 1998 budget. safety issues Mr. Wolf. To what extent will recommendations in a recent National Transportation Safety Board prompted by last year's crash at the Shady Grove station contribute to Metro's financial troubles? [The information follows:] Overall costs associated with the corrective action implemented in response to the National Transportation Safety Board's [NTSB] could exceed $10 Million. The single highest cost item identified thus far is an estimated $7.6 Million for installing carborne monitors on the entire Metrorail fleet. Hardware installations and software modifications to reduce the number of station over-runs could approach $700,000. The corrective action for station over-runs will be funded by reprogramming capital improvement programs funds. Funding for the cost of installing the carborne monitors has not yet been identified. Other significant costs include: software modifications to reduce the rail car default speed to 49 mph ($100,000); development and conduct training courses and exercises for OCC personnel, personnel in safety sensitive positions, and fire department personnel ($200,000); third rail power circuitry graphics along the right-of-way ($100,000); and procurement of third rail power warning devices for the fire department ($75,000). Mr. Wolf. In that report, the Board recommended that Metro find a way to strengthen its lightweight rail cars to make them better to withstand a crash. What action is WMATA likely to take to comply with this recommendation and what will it cost? [The information follows:] WMATA's rail car consultant, Booz-Allen and Hamilton, is currently studying the crash worthiness of the rail cars. This study is expected to be completed by June 1997. The study will identify recommended corrective actions and cost estimates. The cost to enhance the crash worthiness of the rail cars, if required, would be in addition to the estimated $10 million discussed in the other safety related questions. Mr. Wolf. Also in the report, the Board recommended including overhauling the system's anemic safety department, which had fallen victim to budget cuts over the past several years. How has WMATA responded to this challenge and what are the cost implications of these actions? [The information follows:] The Office of Safety now reports directly to the General Manager. This will enhance the effectiveness and status of the office in the organization. An executive level position (Chief Safety Officer) to lead the Safety Office has been created. The new Chief Safety Officer, Mr. Frederick C. Goodine, from the Massachusetts Bay Transportation Authority will start on April 28, 1997. The staffing of the new Safety Office will total 19 positions, which is comparable to staffing of safety offices in similar transit properties. The total operating costs (personnel + non-personnel) for FY '98 ($1.8M0 associated with this increase in staff and increased responsibilities is $851,400 over WMATA's approved FY `97 Operating Budget. regional mobility panel Mr. Wolf. Please elaborate for the committee the nature and scope of the regional mobility panel. What is its charter and the framework of the study? [The information follows:] The Regional Mobility Panel is composed of 30 members representing local governments, the federal government, state departments of transportation, the business community, citizens and WMATA. The Panel's charter is threefold: (1) assess the current and future bus tranpsortation needs for the Washington metropolitan region; review the structure, form of funding and role of Metrobus; and determine how to deliver cost effective, efficient and coordinated bus service to the region, (2) develop an action plan to address WMATA's role in meeting the region's current and future mobility needs, and (3) examine the funding needs of the Metro system and to propose and seek predictable and reliable funding mechanisms to meet these needs. Mr. Wolf. Since 1975, Metrobus has reduced its fleet by about 20 percent as a result of service takeovers by its Compact member jurisdictions and service reductions. Regionally, the total number of buses providing service to the public has not increased as a result of these takeovers, and in many parts of the region the service has declined despite the fact that the region's population has increased by 50 percent in the last 20 years. What recommendations do you anticipate the panel will make to address these challenges? Can you share with the committee any preliminary findings or recommendations? [The information follows:] There appears to be a recognition among members of the panel that regional bus service has not been able to meet the regions travel needs.There are many causes for this and they relate to the cost of service, changing demographics and travel patterns, and the burden that population growth, reduced local tax revenues and reductions in federal payments to state and local governments have placed on local budgets. As a result, service levels have declined and new service proposals have been set aside in favor of preserving existing service areas. The Authority hopes that the Panel will propose solutions to providing more cost effective radial and circumferential service as well as a stable and predictable mechanism to adequately fund these services. At this time, there are no preliminary findings or recommendations from the Panel. However, there appears to be a consensus building on the Panel that there is a role for Metrobus and the local jurisdiction bus services where Metrobus would provide service on routes of regional importance and that local govenrments would provide other services in neighborhoods. Mr. Wolf. What will the role of the panel be as the regional bus study proceeds? [The information follows:] The regional Mobility Panel is the decision making body for the regional bus study. They have agreed to a work plan that is designed to achieve a consensus on a direction for regional bus service and funding of the service that will involve local government bus services and the regional Metrobus system. Mr. Wolf. What is the status of the deliberations of the mobility panel? [The information follows:] The Regional Mobility Panel met for the first time on February 11, 1997 to establish procedures, review their charter, approve a work plan and to receive a briefing by the consultant (KPMG Peat Marwick) on the study process. The Panel has approved a scheduled for April 8, May 20, June 17, July 15, September 9 and October 14. The Panel also established a technical committee to review material and provide assistance to the Panel. Mr. Wolf. When will the panel make its final recommendations? Are you on schedule to deliver the results of the study by the end of the fiscal year? [The information follows:] The work plan approved by the Regional Mobility Panel calls for decision points throughout the course of the study. The Panel plans to approve the final study report and adopt a resolution on the study at its September 9, 1997 meeting. Their schedule calls for delivering a final report to the Committee by the end of the fiscal year. changing demographics Mr. Wolf. We have read a great deal in the papers about the changing demographics of the Washington region. Could you comment on how the demographics of this region are changing and how this has affected Metro? [The information follows:] The Washington region is experiencing dramatic demographic changes. The region as a whole is experiencing population and employment growth. However, Washington, DC is experiencing a decline in both population and employment. Since 1993, employment in the region grew by 160,000 jobs. During that same period, employment in the District declined by almost 40,000 jobs. Since 1990, population in the suburbs increased by over 162,000 while the District's population declined by 63,000, nearly 10 percent. In the last year alone, the District's population declined by 11,000. These changes pose challenges to the regional bus and rail systems. By design, the systems' basic route structures serve trips that are radial in nature, that is from the suburbs to the urban core. Suburban growth in both population and employment has created residential and commercial activity centers outside current route structures. The current and future challenge for the region's bus and rail systems will be the continued provision of service to the high concentration of jobs in the urban core while also recognizing and responding to the need for more creative and non-traditional approaches to offering transit service for suburb-to-suburb and city-to- suburb (reverse flow) trip patterns. Mr. Wolf. Specifically, what are the implications of the changing demographics of the region for the Metrobus system? [The information follows:] The dramatic demographic changes that have taken place in the Washington region have had discernible impacts on the Metrobus system. Population and employment decreases in the District of Columbia (core service area) have contributed to the loss of Metrobus' riders over the last four years. Suburban growth in population and jobs is occurring beyond the reaches of the existing bus routes. Fiscal constraints have made it difficult to offer new service initiatives to serve new suburban concentrations of residential and commercial developments. The current employment and population trends in the urban core as well as the suburbs will require the implementation of more innovative service initiatives in order to respond to emerging trip patterns. Mr. Wolf. And, Mr. Linton, I appreciate you taking the time to come up. Mr. Linton. Thank you. Mr. Wolf. Same with regard to Metro. And the hearing is adjourned. Mr. White. Thank you, Mr. Chairman. [Pages 1431 - 1443--The official Committee record contains additional material here.] W I T N E S S E S ---------- Page Adams, C. M...................................................... 991 Benjamin, Peter.................................................. 991 Bischoff, Donald................................................. 1 Garvey, J. F..................................................... 1 Kane, A. R....................................................... 1 Linton, G. J..................................................... 991 Martinez, Ricardo................................................ 1 Recht, P. R...................................................... 1 Reilly, P. W..................................................... 991 Sahaj, Lynn...................................................... 991 Spencer, J. W.................................................... 991 Thomas, E. L..................................................... 991 Walker, H. J..................................................... 991 White, Richard................................................... 991 I N D E X ---------- Federal Highway Administration Page Absorption of ICC Employees...................................... 669 Accident Fatality Rates.......................................... 598 Additional Non-DOT Cost Sharing for NADS Construction............ 378 Administration's NEXTEA Proposal--Congressman DeLay............759, 760 Advance Technology in all MCSAP Sites............................ 397 AHS: Alloction and Request........................................ 416 ``Associates'' Contributions................................. 413 Contract Monies Allocation................................... 422 Coping with Appropriation Comm. Reductions in Funding........ 413 Coping with Under Funding.................................... 414 Costs, Activities, Etc....................................... 423 Cost Breakout................................................ 422 Cost Cutting Initiatives..................................... 410 Demonstration................................................ 419 Demonstration--Technology Development........................ 418 Fundamental Program Changes.................................. 414 Implication of Eliminating Outreach Funding.................. 419 Implications of Holding the Funding Level at FY 1997 Level... 415 Paving System Down to Essentials............................. 412 Platooning of Trucks......................................... 415 Program Components--Activities, Amounts, Etc................. 420 Recommendations for Appropriation Actions.................... 407 System Concept Explanation................................... 409 Total Project Review......................................... 406 1997 AHS Demonstration--Commercial Vehicle Involvement....... 408 Alameda Corridor: Alameda Corridor...........................................140, 163 Annual Alameda Loan Needs.................................... 168 Bonds........................................................ 164 Bond Sales................................................... 167 Financing Plan............................................... 167 Loan Agreement............................................... 166 Revenue Bonds................................................ 167 Allocation of $10 Million for RT-TRACS........................... 351 Annual Alameda Loan Needs........................................ 168 ANPRM: Added Research Information................................... 523 Comparison--ANPRM and Driver Fatigue and Alertness Study Findings................................................... 524 FHWA Research and Literature Review.......................... 523 Number of Comments and Information Received.................. 524 Appalachian Highways: Highways..................................................... 78 Highway Development.......................................... 181 Regional Highways............................................ 82 Regional Highway Development................................. 180 Regional Commission.......................................... 180 Applying Acoustics to Monitor Traffic and/or Pipeline Maintenance 504 Appropriated Demonstration Projects.............................. 552 Assistance Provided to use the National Systems Architecture..... 283 Baseline Data for Evaluating the Metropolitan Deployment Initiative..................................................... 369 Bid Rigging...................................................... 173 Biographies: Anthony R. Kane.............................................. 23 Jane F. Garvey............................................... 22 Border and High Priority Initiatives............................. 716 Bridge Vulnerability Assessments: Assessment Factors........................................... 537 Improvements to Reduce Risks................................. 538 Methodology to States........................................ 539 State Initiated Programs..................................... 536 Status of Intermodal Task Force's Work....................... 535 Bridge Management Systems: Number of States............................................. 534 1994 Load Resistance Factors--FHWA Programs.................. 533 Budget Highlights................................................ 2 Building NADS VS Upgrading HYSIM or IDS.......................... 375 Calcium Magnesium Acetate--Research and Development.............. 478 Canadian Compliance Reviews...................................... 689 Central Artery: Cost Analysis................................................ 547 Financing Strategies......................................... 103 Interstate Construction Funds................................ 546 Oversight Staff Years........................................ 548 State Funding Options for Central Artery/Tunnel Project...... 106 Tunnel Advance Construction.................................. 104 Tunnel Cost Containment Goals and Project Costs.............. 102 Tunnel Cost Estimate......................................... 106 Tunnel Grant Anticipation Notes.............................. 106 Tunnel Insurance Program...................................103, 104 Tunnel Project Costs......................................... 102 Tunnel Project Cost Review................................... 105 Tunnel Shortfall Estimates................................... 106 Challenge Program..............................................671, 717 Changes in DOT Field Structure................................... 150 Clean Air Act Studies and Research............................... 608 Closely-Spaced Platoon Operations................................ 410 CMAQ Program..................................................... 761 Commercial Vehicle Accidents by Vehicle Miles of Travel.......... 695 Commercial Motor Vehicle Industry................................ 398 Common Truck Problems............................................ 651 Common Sense Government and Innovation........................... 3 Commuter Rail Eligibility........................................ 146 Comparison of Apportionments and Contributions Estimated for NEXTEA Period (FY 1998-FY 2003)................................ 81 Comparison of Allocation to S. Africa to Other Countries......... 497 Comparison--ANPRM and Driver Fatigue and Alertness Study Findings 524 Compliance Reviews: By State..................................................... 683 First Time Carriers.......................................... 687 Ratings....................................................688, 689 Reviews...................................................... 679 State Participation.......................................... 681 Comprehensive National Review of Highway-Rail Crossings Design and Construction............................................... 744 Congestion Mitigation and Air Quality Program.................... 99 Construction of Permanent Truck Inspection Facilities--Texas/ Arizona........................................................ 665 Construction Industry Unemployment Rates......................... 601 Consumer ITS Costs............................................... 156 Contribution to the Alameda Project.............................. 167 Corridor H....................................................... 181 Cost Estimate To Build NADS...................................... 379 Cost to Continue Progress on CVISN............................... 400 Cost Trends and Capacity in the Construction Industry............ 600 Cost Allocation Study: Measures to Ensure Objectivity............................... 487 Major Findings/Conclusions................................... 489 Study........................................................ 486 Cost/Benefit Reports on Deploying ITS............................ 224 Cost and Benefit of ITS Investment............................... 336 Cost of Intelligent Transportation Infrastructure................ 153 Covert Operations................................................ 654 Credit Enhancement Candidates.................................... 143 Critical Standards............................................... 276 CVIS Program..................................................... 691 CVISN: Commercial Motor Vehicle Industry Contributions.............. 402 Cost to Continue Progress on CVISN........................... 400 FHWS Proposal For Long-term Funding.......................... 403 Linkage...................................................... 405 Private Sector Contributions................................. 404 CVO Progress Report.............................................. 393 CVO Expenditures on Outreach..................................... 384 District of Columbia: Ability to Repay Non-Federal Share........................... 202 District of Columbia.......................................110, 177 Increased Federal Share of Funding........................... 200 State Administrative Costs................................... 199 Transportation Improvement Plan.............................. 197 Transportation Improvement Plan--Developing and Monitoring... 197 Transportation Improvement Plan--Funding...................198, 200 Transportation Needs Study: Payment.......................... 217 Deficient Bridges................................................ 595 Demonstration Research Projects.................................. 615 Demonstration of the Model Deployment Initiative................. 355 Denver Test Facility--Cleanup of Hazardous Waste................. 212 Disadvantaged Business Enterprise Program........................ 619 Discretionary Grant Program...................................... 544 Discretionary Bridge Program--FHWA/Coast Guard Oversight......... 520 Discretionary Funds.............................................. 579 Discretionary Bridge Program..................................... 585 Discretionary Bridge Program..................................... 519 Discretionary Bridge Program--Listing of Bridges................. 520 District of Columbia...........................................110, 177 Donor/Dunes State Issues......................................... 98 Driver Fatigue: Fatigue and Alertness Study.................................. 625 Fatigue Studies.............................................. 626 Fatigue Studies Completed.................................... 630 Fatigue Studies Planned...................................... 631 Regulatory Action............................................ 528 Recommendations for Hours of Sleep........................... 527 Resulting Actions Planned.................................... 526 Use of Non-prescription Drugs..............................734, 736 Effect of Delayed Enactments of ISTEA............................ 96 Effect on Moving Research Conducting at HYSIM to NADS............ 376 Effective Management of the National ITS Program................. 265 Efforts to Reduce Fatal Motor Vehicle Crashes.................... 673 Eligibility of Amtrak Under Federal-aid Programs................. 94 Emphasis on Safety Research--FY 1998 Request..................... 439 Environmental Research for Wetlands.............................. 482 Environmental Research Agenda--Report on Clean Air and Highway Transportation................................................. 477 Environmental Research Program--Major Challenges................. 475 EPA Requirements--Trigger for Additional Research................ 479 Evaluation of the Operational Test Program.....................301, 304 Evaluation of the Operational Test Program.....................308, 312 Evaluation of the Operational Test Program.....................316, 320 Expenditures on Institutional Studies............................ 352 Expenditures on Evaluations...................................... 338 Failing to Comply with Yield Right-of-way Signs.................. 750 Fatal Accidents Involving Trucks................................. 697 Fatal Motor Vehicle Crashes...................................... 672 Federal Support to Deployment ITS Technologies................... 365 Federal Aid Highways Obligations................................. 573 Federal Credit Program........................................... 146 Federal Involvement in CVISN..................................... 401 Federal Government Guarantee of Tax-exempt Debt.................. 510 Federal-aid Obligations by Month................................. 571 Federal-aid Highway Construction Price Trends.................... 599 Federal-aid Limitation Exemptions................................ 590 Federal-aid Highway Formulas and Factors......................... 92 FHWA Expenditures for 1996 Olympics.............................. 254 FHWA Project Management Oversight................................ 168 FHWA Administrative Staff and Supervisor-to-employee Ratio by Region and Division............................................ 622 FHWA Opening Remarks--Ms. Garvey................................. 2 FHWA Oversight on Highway Projects............................... 172 FHWA Involvement in DC Project Selection......................... 199 FHWA-NHTSA Speed Management Team................................. 746 FHWA's Financial Management Information System................... 229 Field Operational Test........................................... 370 Field Structure.................................................. 149 Filed Operations Staff Breakdown................................. 621 Finance Plan for Utah I-15 Project............................... 170 First Quarter (Section 310 (D)) obligations...................... 572 Flexibility and Discretionary Grant Programs..................... 78 Funding: Commitments to Pay for Operating Time........................ 379 Consistent with the National Architecture and Standards...... 357 Information Systems or Strategic Safety Initiatives.......... 720 Promoting U.S. Companies--Highways Related Technologies...... 501 Trade Corridors.............................................. 769 Woodrow Wilson Bridge........................................ 177 Funds Needed to Complete Standards Work.......................... 281 Future Outyear Cost for NADS..................................... 380 Garrett Morgan ITS Room--Cost Explanation........................ 241 Gateway Border Crossing Pilot Program............................ 722 Geographical Information System--Improving Statewide Planning.... 462 High Performance Concrete--Status................................ 458 Highway: Apportionment Formulas....................................... 84 Operations and Management--Cost Included in Planning Process. 461 Performance Concrete--Status................................. 458 Project Cost Containment..................................... 171 Projects Cost Containment Mechanism.......................... 169 Project Financial Plans...................................... 171 Projects Oversight........................................... 171 Rail Grade Crossing Action Plan.............................. 737 Safety Outreach.............................................. 752 Trust Fund--Contributions.................................... 771 Trust Fund--Outlay Rates..................................... 101 Trust Fund--Transportation Infrastructure Credit Program..... 505 Hours of Service Rulemaking...................................... 633 Hours of Service................................................. 632 How Air Quality Models Address Criticisms........................ 481 How to Reduce Cost of Developing Standards....................... 281 Impact of Compliance Reviews..................................... 686 Implementation of the Previous NHTSA/FHWA Speed Management Plan.. 747 Implementation of ITS Technology................................. 156 Implementation of Computer System that Supplies Information to Commercial Vehicle Inspections................................. 396 Improved Inspection Facilities in Texas.......................... 665 Improving the Local Technical Assistance Program................. 443 In-house Research Projects....................................... 603 Incident Management--Planned Activities for FY 1998.............. 248 Incident Management Coalition; Funding Deletion.................. 246 Incorporating ITS into the Transportation Planning Process....... 232 Increase in Mainstreaming Category............................... 372 Increase State Involvement....................................... 354 Increase in Funding for the ITS Program.......................... 265 Infrastructure Bank Program Barriers............................. 141 Infrastructure Investment........................................ 3 Innovative Financing............................................. 133 Innovative Financing Programs.................................... 138 Innovative Financing--Congressman Packard........................ 755 Institutional Barriers/Coalitions................................ 361 International Trade Corridors--I-69............................767, 768 International Registration Plan.................................. 690 International Scanning Trips--Funding Source..................... 491 International Program--Major Challenges and Opportunities........ 500 Interstate and Intrastate Commercial Vehicle Accidents........... 694 Interstate Pavement Conditions by State.......................... 592 Interstate Pavement Conditions by Functions...................... 593 Iowa Simulator Request........................................... 713 ISTEA: Reauthorization Proposal--Congressman Obey................... 770 Funding Obligated for Transit Projects....................... 553 Status of Implementation Guidelines for 1995 Amendments...... 531 Demonstration Projects....................................... 551 Reauthorization Funding Levels............................... 90 Reauthorization NHTSA's Goals and Priorities................. 95 Direct Loan Program.......................................... 142 Reauthorization Priorities................................... 94 Intelligent Transportation Systems: Activities and Expenditures.................................. 271 Building NADS vs Upgrading HYSIM or IDS...................... 375 Commuter Benefits............................................ 157 Consumer ITS Costs........................................... 156 Contract and GOE Expenditures................................ 288 Cost Estimate To Build NADS.................................. 379 Cost/Benefit Data............................................ 294 Cost/Benefit Data............................................ 296 Deployment................................................... 155 Deployment................................................... 153 Deployment Obstacles......................................... 155 Funding for Education........................................ 228 Funding Level Implications................................... 270 Funds Used for other Purposes................................ 253 Highway/Rail Grade Crossings................................. 247 Impact of Reduced Funding for Public Education............... 231 Infrastructure and the Freight Industry's Needs.............. 236 Management Improvements...................................... 251 Management And Oversight Responsibility...................... 266 Market/ITS User Acceptance Research.......................... 288 Model Deployment; FY 1997 Funds Allocation................... 243 Model Deployment and Incentive Projects...................... 264 NADS Research................................................ 374 Number and Types of Standards................................ 279 Police Notification of Impaired Drivers...................... 293 Priority Corridors: Deployment of ITS Technologies........... 358 Program Improvements......................................... 230 Projects Dealing with Truck Drivers.......................... 287 Projects Requiring Additional Federal Funds.................. 347 Projects Over Original Cost.................................. 345 Projects that are not Progressing............................ 350 Projects that are Behind Schedule............................ 339 Relationship to the Intermodal Freight Industry.............. 233 Relationship to US Global Competitiveness.................... 235 Rural Program................................................ 225 Rural Program--Alameda and Alaska............................ 226 Scanning Tours and Scholarships.............................. 238 Spending Plan................................................ 286 Standards Status............................................. 277 Standards Development........................................ 274 Systems Architecture......................................... 268 Unobligated ITS Funds........................................ 348 Justification of Research, Development, and Technology Increase.. 207 Large Project Finance Plans...................................... 169 List of All Operational Test not Completed....................... 258 Loan Guarantee Projects.......................................... 147 Local Transportation Assistance Program Contributions............ 446 M&C Expenses--Funding Justification.............................. 428 M&C Status Report; Purposes, Amounts, and Uses................... 252 Major Research Topics/Activities for FY 1997..................... 472 Major Challenges: Grade Crossing Team............................ 745 Management And Coordination (M&C) Expenses--Limitation Impacts... 429 Market/ITS User Acceptance Research.............................. 288 MCSAP Sites with New Technology.................................. 394 MCSAP Grants-Supplemental Incentive Grants....................... 702 Minimum Allocation donor State Bonus, Hold Harmless, and Emergency Relief Data.......................................... 582 Miscellaneous Programs........................................... 578 Mobile Home Tires--Congressman Regula............................ 776 Model Deployment Initiative...................................... 157 Model Deployment and Incentive Projects.......................... 264 Model Deployment; FY 1997 Funds Allocation....................... 243 Motor Carrier: Advanced Technology Availability............................. 725 Compliance with Safety Obligations Prior to Beginning Cross- Border Operations.......................................... 661 Full Time Equivalent Staff by Office......................... 675 Hazardous Material Carrier Training.......................... 729 Information Systems and Strategic Safety Initiatives......... 718 Integrated Safety Fund....................................... 721 Judicial Outreach Request.................................... 712 NAFTA Safety and Enforcement Issues.......................... 530 NAFTA........................................................ 659 NAFTA--Conditions in Mexico.................................. 660 NAFTA--Federal/State Inspectors.............................. 666 NAFTA--New Border Crossing Pilot Program..................... 667 NAFTA--Safety Enforcement/Conditions in Mexico............... 663 NAFTA--Truck Inspection Facilities........................... 664 No Zone Campaign............................................. 729 Outreach Request............................................. 711 Regulatory Relief and Safety Demonstration Project....756, 757, 758 Research Supplemented by ITS Funding......................... 692 Research Activities with NHTSA............................... 677 Research Development and Technology.......................... 693 Safety Performance Incentive Grants.......................... 715 Staff by Specialty........................................... 658 Training and Administrative Request.......................... 717 Training Request............................................. 709 Training..................................................... 728 Unobligated Contract Authority............................... 691 NADS Research.................................................... 374 NAFTA: Conditions in Mexico......................................... 660 Federal/State Inspectors..................................... 666 NAFTA........................................................ 659 New Border Crossing Pilot Program............................ 667 Safety and Enforcement Issues................................ 530 Safety Enforcement/Conditions in Mexico...................... 663 Truck Inspection Facilities.................................. 664 National Science and Technology Council Impact on Budget Request. 449 National Recreational Trails Funding Allocations................. 587 New State Infrastructure Bank Programs........................... 141 New Initiative--Funding from Research, Development, and Technology..................................................... 212 New Discretionary Program........................................ 82 New Motor Carrier Safety Campaigns............................... 753 NEXTA: Administration's NEXTEA Proposal--Congressman DeLay........759, 760 Formula Proposal...........................................772, 773 Proposal Versus Budget Request............................... 775 Proposal Versus Budget Request............................... 763 State Apportionments......................................... 79 Number of Out-of-service Vehicles................................ 642 OHS Reauthorization Proposal..................................... 754 OMC Administrative Takedown...................................... 733 OMC Meetings..................................................... 732 OMC Travel....................................................... 732 OMC Field Offices................................................ 731 Opening Remarks--Mr. Sabo........................................ 1 Opening Remarks--Ms. Garvey...................................... 2 Opening Remarks--Mr. Wolf........................................ 1 Operational Test VS Model Deployment............................. 353 Out-of-service Vehicles by State--FY 1996 Covert Activity........ 646 Out-of-service Drivers with Log Book Violations.................. 650 Out-of-service Activities......................................641, 643 Out-of-service Vehicles--compliance Activities................... 644 Overlap of OMC And NHTSA Priorities.............................. 727 Overview of Administration Proposal.............................. 2 Pan American Highway Institute................................... 218 Pedestrian and Work Zone Safety--Allocation Breakout............. 429 Pedestrian Safety VS. Work Zone Safety--Funding Balance.......... 431 Pen-based Technology......................................635, 637, 638 Pending Lawsuits--Alameda Corridor............................... 164 Performance-based State Enforcement Program...............707, 708, 709 Phase Out Funding for FHWA Driving Simulator..................... 381 Planned Expenses for Architecture Program........................ 385 Planning Research Area--Increased Funding for Data Analysis...... 459 Planning and Research Program--Major Challenges.................. 471 Policy Research Problem--Most Critical........................... 485 Policy Research--Reduction of Request............................ 484 Position Allocations............................................. 620 Potential Alameda Default........................................ 166 Pre-pass System Testing Results.................................. 639 Pre-pass System Deployment....................................... 640 Priority Corridor Program: Results/Benefits...................... 221 Priority Corridors--Allocation Versus ISTEA Funding Requirements. 223 Priority Emphasis for Safety Research and Transfer Activities.... 438 Priority Corridors--Public's Reaction to ITS Technologies........ 364 Priority Technologies Program--Successes and Challenges.......... 454 Professional Capacity Building Program........................... 237 Program Support Funds............................................ 267 Programs to Reduce Commercial Vehicle Accidents.................. 696 Programs to Reduce Common Truck Problems......................... 652 Project Management Plan.......................................... 176 Project Cost of NADS............................................. 377 Proposed Transfers from The Highway Trust Fund................... 100 Proposed Changes in Highway Funding Formulas..................... 97 R&D Technology Transfer Activity--Cost/Funding Analysis.......... 434 Reallocated MCSAP Grants......................................... 704 Recycled Materials Research...................................... 503 Red Light Running Program........................................ 749 Redistribution of Unobligated Federal-aid Authority.............. 576 Reorganization and Consolidation................................. 147 Reporting of Commercial Vehicle Accidents........................ 698 Reporting of Commercial Vehicle Accidents........................ 701 Research Initiatives............................................. 676 Research Areas--Breakout of Advanced Research.................... 440 Research and Development Contractors............................. 602 Research Areas--Quantitative Documentation....................... 441 Research and Technology Support Costs............................ 217 Research, Development, and Technology Program--M&C Cost Limitation Impacts............................................. 209 Results From ITS Evaluation and Assessment Program............... 366 Results From Projects: Model Deployment Initiative and Commercial Vehicle Information System..................................... 373 Revenue Bonds/Volume Caps........................................ 135 Right-of-way Revolving Fund...................................... 588 RT-TRACS Project; Expenditures During FY 1997.................... 245 Rural Initiative Benefits........................................ 432 Safer Inspection Module.......................................... 382 Safety Research and Technology Transfer Program--Effects of Termination.................................................... 439 Safety Research and Development--Requested Amount for Fiscal Year 1998........................................................... 451 Safety Items--Status of Issuance of Guidance..................... 532 Safety Board Recommendations--DOT Response Time.................. 540 Safetynet Reporting of Commercial Vehicle Accidents.............. 699 Scanning Tours and Scholarship Expenses.......................... 240 Second Generation of The Aspen System............................ 636 Shift of Programs from General Fund to Trust Fund................ 101 SIB and Credit Program Outlay Rates.............................. 518 South Africa--Use of Federal Funds to Promote Educational Activities and Jobs Programs................................... 210 South Africa--Technology Transfer Activities..................... 495 SP&R and National Cooperative Highway Research Progam............ 607 State Infrastructure Banks: Analysis of Applicants and Products.......................... 515 Announcing Awards............................................ 515 DOT Allocation Plan.......................................... 512 Leveraging of Non-Federal Money.............................. 511 Listing of State Applicants for Fiscal Year 1997............. 514 Listing of Original State Participants....................... 514 Project Selection Criteria................................... 512 SIB and Credit Program Outlay Rates.......................... 518 Slow Progress................................................ 513 State Infrastructure Banks.................................134, 138 State Infrastructure Bank Program Funds.........................141 State Infrastructure Bank/Transportation Infrastructure Investment................................................. 139 Success and Challenges....................................... 516 Transportation Infrastructure Investment..................... 139 State Funding Options for Central Artery/Tunnel Project.......... 106 State Level of Effort............................................ 94 State Administrative Costs....................................... 93 State Highway Project Management................................. 168 State-by-State Comparison of Total Apportionments................ 774 Statement of Jane F. Garvey: Conclusion................................................... 20 Infrastructure Safety and Efficiency......................... 12 Innovation in Financing...................................... 10 Innovation for Today and Tomorrow--ITS....................... 14 Innovation--Implementation Common Sense Government........... 17 Innovation in Technology..................................... 11 Opening Statement............................................ 5 Overview..................................................... 5 Strategic Infrastructure Investment.......................... 6 Safety....................................................... 7 Infrastructure Investment.................................... 13 States Performing Compliance Reviews............................. 680 States that Received Reallocated Funding in FY 1996 and FY 1997.. 705 Status Report on Implementing Roadmaps........................... 292 Status of Authorized Demonstration Projects...................... 550 Status on Strategic Plan for Professional Capacity Building...... 224 Sufficient Fees to Cover various Costs Associated with Former ICC Employees...................................................... 670 System Performance Rewards....................................... 99 Systems Performance Measures..................................... 92 Table of Carryover Funds for Each GOE Category................... 213 Table of ISTEA GOE Contract Funds................................ 202 Tangible Results From ITS Mainstreaming Program.................. 371 Tax Exempt Debt.................................................. 139 Tax Income/Tax Expenditures--Impact on Budget.................... 509 Technology Transfer Related Allocations--Benefit to United States 499 Technology Transfer Program--Leverage Partnerships............... 425 Technology Transfer--Strategies for Increasing Cost Sharing...... 452 Training Advisory Committee and Skills Assessment Committee-- Results........................................................ 220 TRANSIMS: Actions Taken to Secure Non-DOT Funding...................... 470 Amounts Allocated with Breakout.............................. 464 Any Contract Funding......................................... 466 Cost Control Measures........................................ 467 Funding Requirements Table................................... 469 Technological Challenges and Testing Needs................... 466 Transportation Credit Program: Credit Program--Assessment................................... 506 Effectiveness and Efficiency................................. 507 Level of Direct Loans and Loan Guarantees.................... 509 New York Harbor Freight Control.............................. 508 Treasury Error on Highway Funds................................764, 766 Truck Size and Weight Study--Major Findings/Conclusions.......... 488 Truck Size and Weight Study/Cost Allocation Study--Expenditures.. 490 Truck and Bus Accidents.......................................... 657 Trust Fund Contributions versus Returns.......................... 80 Univ. Transportation Centers--FHWA Mission and Objectives........ 442 Unobligated ITS Funds............................................ 348 Uploading Truck Accident Data to SafetyNet....................... 700 Use of Funds on a Project-by-Project Basis....................... 391 Use of National Systems Architecture............................. 282 Use of Carryover Funds........................................... 213 Use of GOE and/or ISTEA Funds for Department Concerns............ 210 Utah I-15: Financing.................................................... 170 Funding...................................................... 170 Project...................................................... 165 Project Funding.............................................. 172 Reconstruction Project--Funding Alternatives................. 543 Reconstruction Project--Finance Sources...................... 543 Reconstruction Project--Funding Availability................. 542 Reconstruction Project--Ensuring Cost Estimate Accuracy...... 542 Reconstruction Project--Cost Projections..................... 541 Utilization of ITS Funds for other Purposes...................... 253 Utilization of Iowa Simulator.................................... 714 Value Engineering Guidance....................................... 169 Variable Toll Issues............................................. 175 Vehicle Safety Issues--Border Crossings.......................... 529 Washington DC Program Implementation............................. 198 Wisconsin Rate of Return Under NEXTEA............................ 772 Woodrow Wilson Bridge: Agreement.................................................... 176 Cost Difference.............................................. 174 Design/Build................................................. 177 Environmental Impact Statement............................... 176 Federal Contribution......................................... 174 Financial Analysis........................................... 175 Funding...................................................... 176 Tolls........................................................ 174 Woodrow Wilson Bridge......................................110, 174 Woodrow Wilson Bridge........................................ 112 14th Street Bridge............................................... 179 1995 Safety Study--Postponed Rulemaking Activity................. 521 1995 Safety Board's Study........................................ 525 1995 Safety Study--Request for Comments.......................... 522 1997 AHS Demonstration--Commercial Vehicle Involvement........... 408 Federal Transit Administration Access to Jobs and Training: Criteria..................................................... 1157 HUD Bridges to Work.......................................... 1159 Welfare to Work.............................................. 993 Access to Jobs--Criteria......................................... 1157 Access to Jobs Program.................................1087, 1116, 1156 Accident Data.................................................... 1311 Collisions................................................... 1312 Derailment/Buses going the road.............................. 1315 Fires........................................................ 1314 Operating Statistics.....................................1316, 1318 Personal Casualties.......................................... 1313 Totals of Incidents, Fatalities, Injuries and Property Damage 1317, 1319 Accounting Services.............................................. 1171 Administrative Expenses......................................1013, 1165 Accounting Services.......................................... 1171 Electronic Commerce.......................................... 1178 Electronic Grant-Making...................................... 1173 Full-Time Equivalent......................................... 1168 Hiring Plan........................................1062, 1063, 1169 Staffing..................................................... 1336 Vacant Positions............................................. 1361 Wide Area Network............................................ 1176 Advanced Technology Transit Bus (ATTB)............994, 1045, 1227, 1374 $10 Million Request.......................................... 1235 ADA Compliance, ATTB and.................................1047, 1092 Inspector General Findings................................... 1091 Motor Vehicles Safety Standards.............................. 1229 Test Sites, for ATTB......................................... 1231 Trolley Bus Program, Use of ATTB............................. 1232 Vehicle Size, ATTB and....................................... 1089 ATTB and ADA Compliance......................................1047, 1092 ATTB and Inspector General Findings.............................. 1091 ATTB and Vehicle Size............................................ 1089 ATTB--Inspector General Issues................................... 1111 Advanced Lead Acid Battery Consortium............................ 1193 Alternative Fuels................................................ 1048 Atlanta Olympics................................................. 1180 Average Age of Bus Fleets........................................ 1329 Bay Area Rapid Transit (BART): Capital Improvement Plan for BART............................ 1139 Cash Flow, for BART Extension................................ 1143 Extension of BART............................................ 1093 Extension to San Francisco................................... 1118 Full Funding Grant Agreement................................. 1097 Growth and Sales Taxes, for Bay Area......................... 1140 ISTEA Earmarks, Bay Area..................................... 1146 Letter to Chairman Wolf, Dated Feb. 11, 1997................. 1124 Operable Segments............................................ 1095 Operating Plan............................................... 1137 BART Capital Improvement Plan.................................... 1139 BART Cash Flow................................................... 1143 BART Extension................................................... 1093 BART Extension to San Francisco.................................. 1118 BART Full Funding Grant Agreement................................ 1097 BART Growth and Sales Taxes...................................... 1140 BART--Letter to Chairman Wolf, Dated Feb. 11, 1997............... 1124 BART Operable Segments........................................... 1095 BART Operating Plan.............................................. 1137 Bay Area ISTEA Earmarks.......................................... 1146 Biographies: Gordon J. Linton............................................. 1014 Hiram J. Walker.............................................. 1016 Patrick W. Reilly............................................ 1017 John W. Spencer.............................................. 1018 Charlotte M. Adams........................................... 1019 Edward L. Thomas............................................. 1020 Lynn Sahaj................................................... 1021 Building On ISTEA................................................ 999 Bus: Average Age of Fleets........................................ 1329 Capital and Formula Funds.................................... 1331 Earmarks, FY 1995-1997....................................... 1240 Earmarks, Status of.......................................... 1245 Unobligated Funds............................................ 1239 Bus Capital and Formula Funds.................................... 1331 Buy America--General............................................. 1110 Capital Definition Similar to Highways........................... 1041 Capital Fund Distribution........................................ 1328 Capital Investments.............................................. 994 Capital Obligations for Certain Cities........................... 1334 Capital Projects...............................................992, 993 Capital Versus Operating Costs...............................1076, 1115 Capitalizing On Successes........................................ 1003 Chicago Circulator............................................... 1067 Closing Remarks.................................................. 996 Comparison of Trust Fund Receipts to Apportionments.............. 1080 Denver Southwest LRT............................................. 1154 Disadvantaged Business Enterprise Requirements................... 1120 Electronic Grant-Making.......................................... 1173 Electronic Commerce.............................................. 1178 Elimination of Operating Assistance.............................. 1114 Expanded Capital Definition...................................... 1039 Farebox Recovery................................................. 1309 Financial Reporting Requirements................................. 1085 Formula Changes.................................................. 1079 Formula Programs................................................. 1007 Formula Grant Consolidation...................................... 1075 FTA Full-Time Equivalent......................................... 1168 FTA Staffing..................................................... 1336 Fuel Cell: Preliminary Findings......................................... 1215 Proton Exchange.............................................. 1216 Budget Request............................................... 1217 Georgetown Bus Program....................................... 1213 Georgetown Project........................................... 1112 Fuel Cell--Budget Request........................................ 1217 Fuel Cell--Preliminary Findings.................................. 1215 Fuel Cell--Proton Exchange....................................... 1216 Funding Status of Oversight Funding..........................1026, 1027 Future New Starts................................................ 1053 FY 1997 Hiring Plan..........................................1063, 1170 FY 1998 Budget Request........................................... 1007 FY 1995-1997 Bus Earmarks........................................ 1240 Georgetown Fuel Cell Bus Program................................. 1213 Georgetown Fuel Cell Project..................................... 1112 Grant Allocations for FY 1997 and 1998........................... 1289 GSA Rental Payments.............................................. 1172 Hiring Plan............................................1062, 1063, 1169 Houston--Disadvantaged Business Enterprises...................... 1105 Houston Metro.................................................... 1367 HUD Bridges to Work.............................................. 1159 Human Resources.................................................. 1226 In Closing....................................................... 1013 Independent Transportation Network............................... 1042 Innovative Financing Programs................................1075, 1114 Inspector General Audit of LA Project............................ 1102 ISTEA Reauthorization............................................ 992 Joint Partnerships............................................... 1191 LA--Eastside Extension........................................... 1153 LA Occupational Safety........................................... 1104 LA Red Line Oversight............................................ 1024 LA Red Line Project Delays....................................... 1102 LA--Restructure of FFGA.......................................... 1149 Labor Compensation and Operating Assistance...................... 1326 Lessons for Salt Lake............................................ 1183 Limited Research Resources....................................... 1043 Little Rock, Arkansas, Light Rail System......................... 1061 Livable Communities Initiative...........................993, 994, 1038 Los Angeles Metro Red Line Project.........1099, 1119, 1148, 1149, 1153 Los Angeles Red Line Project: Eastside Extension........................................... 1153 Oversight, of Red Line....................................... 1024 Project Delays, of Red Line.................................. 1102 Occupational Safety, Concerns................................ 1104 Restructure of FFGA, Red Line Project........................ 1149 Safety, Concerns............................................. 1100 Los Angeles Red Line Safety...................................... 1100 Los Angeles Revenue Diversion.................................... 1097 Major Capital Investments........................................ 1009 Major Investments Studies........................................ 1083 Mass Transit Account............................................. 1322 Mass Transit Revenue For AMTRAK.................................. 1086 Meeting The Challenge Training................................997, 1064 Metropolitan/Rural Policy Development............................ 1224 Military Technologies Adaptable to Transit....................... 1236 National Park Service--Fuel Cell................................. 1222 National Program Activities...................................... 1193 National Program Projects........................................ 1195 National Transit Projects List................................... 1206 New Bus Model Testing in Altoona................................. 1213 New Rail Vehicles and Infrastructure............................. 1223 New Starts--Rail Versus Bus...................................... 1078 New Starts Program............................................... 995 New Starts: Chicago Circulator........................................... 1067 Denver Southwest LRT......................................... 1154 Full Funding Grant Agreements................................ 1081 Future....................................................... 1053 Program...................................................... 995 Rail Versus Bus.............................................. 1078 Status Earmarks.............................................. 1261 Status of Full Funding Grant Agreements...................... 1055 Unobligated Balance Justification............................ 1265 New Starts Full Funding Grant Agreements......................... 1081 New Start Unobligated Balance Justification...................... 1265 New Welfare Initiative........................................... 1369 NovaBus & Buy America............................................ 1108 NovaBus & Buy America Requirements............................... 1121 NTSB Concerns.................................................... 1160 OIG Access To FTA Records........................................ 1023 Olympics......................................................... 993 Opening Statement................................................ 991 Operating Assistance: Operating Assistance.........................1037, 1038, 1060, 1372 Operating Assistance--Elimination of......................... 1114 Operating Assistance--Outlays................................ 1096 Operating Assistance Under Reauthorization Proposal.......... 1070 Operating and Capital Funding--30 Largest Operators.............. 1304 Overmatch--Reauthorization....................................... 1077 Oversight: Planned Program Use of Funds--FY94-FY98...................... 1030 Project Management........................................... 1022 Oversight of Large Scale Transit Projects.................... 1088 WMATA Oversight Staffing..................................... 1067 Oversight of Large Scale Transit Projects........................ 1088 Planned Program Use of Oversight Funds--Summary.................. 1029 Planned Program Use of Oversight Funds--FY94-FY98................ 1030 Planning and Project Development................................. 1224 Procurement Systems Reviews...................................... 1025 Program Levels................................................... 1072 Project Management Oversight..................................... 1022 Projects Funded With Recoveries.................................. 1065 Rail Modernization Under Formula Request......................... 1041 Rail Modernization Formula....................................... 1077 Reauthorization: Building On ISTEA............................................ 999 Capital Definition Similar to Highways....................... 1041 Issues, Reauthorization...................................... 1163 Rail Modernization Under Formula Request..................... 1042 Operating Assistance Under Reauthorization Proposal.......... 1070 Overmatch--Reauthorization................................... 1077 Reauthorization Issues........................................... 1163 Recovery Activities.............................................. 1066 Research Partnerships............................................ 1194 Research--Long Range Plan........................................ 1184 Safety: Commitment................................................... 1035 Program Funding.............................................. 1036 Safety....................................................... 1034 Security..................................................... 1225 Safety and Security.............................................. 1225 Safety Commitment................................................ 1035 Safety Program Funding........................................... 1036 Safety........................................................... 1034 Santa Barbara-Electric Bus....................................... 1050 Section 13(c) Labor Protection................................... 1086 Section 3 Project Status......................................... 1256 Section 5307 Funding for Areas Without Transit Service........... 1287 Section 5307 Urbanized Area Formula.............................. 1074 Section 5307 Urbanized Area formula Apportionments............... 1271 Section 3(j) Report.............................................. 1059 Small Transit Operators.......................................... 1376 Smaller Passenger Bus............................................ 1047 Sole Source Requirement.......................................... 1052 Staffing Separations Impact...................................... 1060 Staffing......................................................... 1366 Statement of Gordon J. Linton.................................... 997 Status of FFGA's Awarded Since 1993.............................. 1057 Status--New Starts Earmarks...................................... 1261 Status of Bus Earmarks........................................... 1245 Status of Full Funding Grant Agreements.......................... 1055 Status of Open Grants............................................ 1064 13(c)-Labor Protection........................................... 1049 Transit Formula Distribution..................................... 1081 Transit Planning and Research: Advanced Technology Transit Bus (ATTB)........994, 1045, 1227, 1374 Military Technologies Adaptable to Transit................... 1236 National Park Service--Fuel Cell............................. 1222 National Program Activities.................................. 1193 National Program Projects.................................... 1195 National Transit Projects List............................... 1206 Transit Research............................................. 1184 Transit Research................................................. 1184 Transportation Safety Institute..............................1034, 1036 Trends of Fatalities, Incidents and Injuries..................... 1320 Unobligated Bus Funds............................................ 1239 Unrestricted Cash................................................ 1180 Urban Work Trips................................................. 1306 Use of Section 23 Funds.......................................... 1025 Use of Recovered Resources....................................... 1067 Vacant Positions................................................. 1361 Value Engineering Requirements................................... 1085 Washington Metropolitan Area Transit Authority................... 1012 Bond Financing............................................... 1427 Changing Demographics........................................ 1429 District Payments............................................ 1419 Dulles Corridor.............................................. 1425 Fares........................................................ 1418 Financial Issues............................................. 1417 General Observations and Challenges.......................... 1415 Opening Statement--Richard White............................. 1380 Platform Edges............................................... 1435 Proposed Addison Road to Largo Town Center Line.............. 1420 Proposed Largo Line.......................................... 1424 Rail Construction Program.................................... 1440 Regional Mobility Conference................................. 1423 Regional Mobility Panel...................................... 1428 Ridership.................................................... 1416 Ridership Trends............................................. 1424 Safety and Crime............................................. 1437 Safety Issues................................................ 1427 Service Improvements......................................... 1442 WMATA's Appropriations Request............................... 1415 WMATA's Maintenance Needs.................................... 1415 WMATA Oversight.............................................. 1431 WMATA System Maintenance..................................... 1421 WMATA System Rehabilitation.................................. 1419 Welfare To Work.................................................. 993 Wide Area Network................................................ 1176 Witness List, FTA................................................ 991 Witness List, WMATA.............................................. 991 WMATA Oversight Staffing......................................... 1067 National Highway Traffic Safety Administration ABS Research..................................................... 860 Aggressive Driving: Aggressive Driving........................................... 89 Aggressive Driving........................................... 125 Aggressive Driving........................................... 194 Aggressive Driving Enforcement Demo.......................... 195 Air Bag: Deactivation................................................. 120 Deployment................................................... 953 Deployment Injuries.......................................... 974 Depowered.................................................... 115 Depowering................................................... 107 Effectiveness................................................ 119 Fatalities................................................... 107 Funding...................................................... 119 Funding...................................................... 159 Safety....................................................... 25 Safety....................................................... 114 Safety Funding............................................... 955 Safety Program............................................... 121 Safety Standards............................................. 130 Smart Air Bag Definition..................................... 118 Air Bags and Child Safety Seats.................................. 127 Alcohol: Incentive Grants............................................. 189 Incentive Grants............................................. 908 Related Fatalities........................................... 187 Related Fatalities........................................... 814 (and) Speed Related Fatalities............................... 830 State Blood Alcohol Laws......................................... 193 Antilock Brake Investigation..................................... 859 Authorizing Legislation (Summary of)............................. 58 Auto Safety Hotline: Hotline...................................................... 947 Hotline Expansion............................................ 948 Bicycle Safety................................................... 83 Bicycle Safety................................................... 882 Biography: Donald C. Bischoff (Executive Director)...................... 54 Philip R. Recht (Deputy Administrator)....................... 53 Ricardo Martinez, MD (Administrator)......................... 52 Biomechanics: Research..................................................... 26 Research..................................................... 950 Budget Request (the)............................................. 30 Child Safety Seat: CD Rom Data Base............................................. 137 Education.................................................... 128 Installation................................................. 136 Proposed Rulemaking.......................................... 135 Proposed Rulemaking.......................................... 137 Recall....................................................... 821 Child Safety Seats............................................... 86 Child Seat Resources for the Indigent............................ 87 Child-Size Test Dummies.......................................... 129 Closing.......................................................... 196 Compliance Test Failure Data..................................... 870 Corporate Average Fuel Economy (CAFE): CAFE......................................................... 866 Fuel Economy................................................. 978 Penalties Collected.......................................... 868 Standards.................................................... 988 Standards/Light Track and Vans............................... 868 Crash Outcome Data Evaluation System (CODES)..................... 820 Crash Statistics................................................. 887 Crashes: Fatal--Percentage Change..................................... 807 (by) Type of Collision....................................... 819 Data Linkage..................................................... 26 DOT: Field Structure.............................................. 149 Field Structure (changes in)................................. 150 Driver Education Program (Michigan's Two-Stage).................. 827 Driver Fatigue................................................... 886 Drug: Pre-Licensure Drug Testing (Funding for)..................... 193 Testing...................................................... 123 (and) Youth Safety........................................... 26 Drunk Driving (Measures to Reduce)............................... 813 Emergency Medical Services....................................... 960 Enforcement: (of) Alcohol Impaired Driving................................ 914 Levels of Safety Belt Use Laws............................... 789 Fatalities by Vehicle Category................................... 894 Fatigue and Drowsiness........................................... 975 Fifth Percentile Female/Child Dummy Enhancement.................. 952 General Administration........................................... 70 Graduated Licensing: International Efforts........................................ 826 Project...................................................... 825 Systems...................................................... 824 Head Protection Devices.......................................... 978 Helmet Laws...................................................... 162 Highway Fatalities for Selected Countries........................ 898 Highway Safety: Expenditures................................................. 834 Program...................................................... 36 Program...................................................... 66 Highway Traffic Safety Grants: Program...................................................... 72 Section 402 Grant Obligations................................ 840 Section 402 Indian Safety Grants............................. 842 Section 402 NHTSA Personnel.................................. 837 Section 402 Program Areas.................................... 837 Section 410 Funding.......................................... 903 Integrated Safety Fund........................................... 970 International Harmonization: Office....................................................... 969 Program...................................................... 979 International Safety Ranking..................................... 844 ISOFIX........................................................... 822 ISTEA: Effect of Delayed Enactments of ISTEA........................ 96 Reauthorization--NHTSA's Goals and Priorities................ 95 ITS: First Generation Road Departure Collision Avoidance System... 158 Funding...................................................... 961 Heavy Vehicle Drowsy Driver Detection System................. 159 Operational Test of Rear-End Collision Avoidance Systems..... 158 Program...................................................... 158 Program Increase............................................. 967 Law Enforcement Services......................................... 126 Legislation to Lower Blood Alcohol Limits........................ 828 Motorcycle Helmet Laws (Mandatory)............................... 879 Motor Vehicle: Death Rates for Indians...................................... 843 Related Deaths............................................... 842 Safety Standards............................................. 120 National Advanced Driving Simulator (NADS): NADS......................................................... 778 NADS Cost Estimate........................................... 779 NADS Cost Sharing............................................ 780 NADS Current Schedule........................................ 781 NADS Development Cost........................................ 779 Negotiated Rulemaking979......................................... New Car Asessment Program (NCAP): NCAP Costs................................................... 851 NCAP Funding................................................. 850 NCAP--Motor Vehicles Tested.................................. 853 NCAP......................................................... 858 NHTSA: Budget in Brief.............................................. 55 Budget Request............................................... 25 (and) DOJ Collaboration...................................... 959 Downsizing Goal.............................................. 926 (and) FHWA Speed Management Plan............................. 812 Goals to Reduce Fatalities/Injuries in Rural Areas........... 899 Goals to Reduce Fatalities/Injuries in Urban Areas........... 901 Historical Funding........................................... 60 Influences Safety Defect Recall.............................. 865 Key Initiatives.............................................. 26 Key Regulations.............................................. 947 (and) OMC.................................................... 971 Opening Remarks.............................................. 24 Overseas Travel.............................................. 922 Safety Recall Campaigns...................................... 863 Staffing..................................................... 934 Strategic Plan............................................... 59 Occupant Fatalities of Vehicles by State......................... 891 Occupant Protection Grants....................................... 183 Occupant Protection Incentive Grants............................. 187 Odometer: Fraud........................................................ 875 Fraud Investigations......................................... 877 Fraud Program................................................ 878 Offset Crash: Testing...................................................... 848 Testing Standards............................................ 849 Operating Expenses............................................... 969 Pedalcyclist Fatalities by State................................. 884 Pedestrian/Bicyclist Research.................................... 883 Political Appointees............................................. 926 Presidential Initiative on Seat Belt Use......................... 183 Primary Seat Belt Law States..................................... 185 Proposed Rulemaking to Depower Airbags........................... 116 Records and Licensing Funding.................................... 971 Regional Staffing................................................ 927 Reorganization and Consolidation................................. 147 Repeal of Motorcycle Helmet Laws................................. 881 Reprogramming.................................................... 942 Research and Analysis............................................ 68 Research and Analysis Program.................................... 43 Restraint Use Among Fatalities................................... 787 Rollover......................................................... 977 Safe and Sober................................................... 949 Safe Communities................................................. 26 Safe Communities Funding......................................... 839 Safety Assurance Program......................................... 34 Safety Assurance................................................. 64 Safety Belt Use Laws--Key Provisions............................. 791 Safety Belts..................................................... 25 Safety Performance Standards..................................... 62 Safety Performance Standards Program............................. 32 Safety Systems Funding........................................... 973 Seat Belt: Alcohol Goals................................................ 816 Demonstration Program........................................ 785 Model Seat Belt Use Law...................................... 790 Meeting with Governors on Seat Belt Issues................... 184 Nationwide Belt Use Survey................................... 185 Presidential Initiative on Seat Belt Use..................... 183 Usage Rates.................................................. 182 Usage Rates.................................................. 782 Use Law Enforcement.......................................... 788 Shift of Programs from General Fund to Trust Fund................ 101 Side Impact Standard............................................. 847 Speed: Management................................................... 160 Related Fatal Crashes........................................ 807 Related Fatal Crashes--Number and Percent.................... 809 State Interaction on Speed Issue............................. 162 Study of the Impact of Increased Speed....................... 811 Speed Limit: Issues....................................................... 87 Motocycle Helmet Laws--Impact on Fatalities.................. 891 National Speed Limit......................................... 159 State Speed Limit Increases.................................. 160 State Speed Limits for Cars and Trucks....................... 793 Statement from the Administrator................................. 57 States: (with) Administrative License Revocation Laws................ 921 (with) Increased Speed Limits................................ 108 (with) Primary Enforcement Laws.............................. 82 (without) Speed Limits....................................... 160 Survey of Drunk Driving Attitudes................................ 958 Training......................................................... 934 Underage Drinking................................................ 122 Underage Drinking Law............................................ 190 Unobligated Balances............................................. 941 Vehicle Safety Compliance........................................ 873 Waivers to Permit Depowering of Air Bags......................... 116 Witnesses........................................................ 1 Youth Driving Initiative......................................... 192 Youth, Drugs and Driving Initiative.............................. 191 Youth Fatalities................................................. 815 Washington Metropolitan Area Transit Authority Addison Road to Largo Town Center............................1420, 1424 Appropriations Request........................................... 1415 Authority Goals.................................................. 1406 Biography of Richard A. White.................................... 1414 Bond Financing................................................... 1427 Capital Improvement Requirements................................. 1410 Maintenance Needs............................................ 1415 System Maintenance........................................... 1421 System Rehabilitation........................................ 1419 Closing Remarks.................................................. 1410 Demographics..................................................... 1429 Financial Issues................................................. 1417 District Payments............................................ 1419 Fares........................................................ 1418 Dulles Corridor.................................................. 1425 Fast Track Construction Program.................................. 1388 Financing Fast Track......................................... 1391 Rail Construction Program.................................... 1440 Federal Regional Partnership..................................... 1387 General Observations and Challenges.............................. 1415 Metro--The Value of The Investment............................... 1397 Platform Edges................................................... 1435 Regional Bus Service............................................. 1402 Regional Mobility Conference..................................... 1423 Regional Mobility Panel.......................................... 1428 Ridership........................................................ 1416 Ridership Trends............................................. 1401 Safety Issues.................................................... 1427 Safety and Crime............................................. 1437 Service Improvements............................................. 1442 Statement of Mr. White (Oral).................................... 1380 Statement of Mr. White........................................... 1386 WMATA Oversight.................................................. 1431