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Senate Banking, Housing, and Urban Affairs Committee hearing on Surface Transportation Reauthorization

4/21/2015

Statement of
Therese McMillan,
Acting Administrator
Federal Transit Administration U.S. Department of Transportation
Before the
Committee on Banking, Housing and Urban Affairs,
U.S. Senate

Mr. Chairman, Ranking Member, and Members of the Committee:

Thank you for the invitation to appear before you today to report on the Federal Transit Administration’s (FTA) progress toward implementing the Moving Ahead for Progress in the 21st Century Act (MAP-21). We are pleased for the opportunity to discuss the Administration’s surface transportation reauthorization proposal, the Generating Renewal, Opportunity, and Work with Accelerated Mobility, Efficiency, and Rebuilding of Infrastructure and Communities throughout America (GROW AMERICA) Act. It builds on the strong foundation MAP-21 provided for public transit, recognizing transit’s growing presence across the country.

In 2014, Americans took 10.8 billion trips on transit - the highest annual ridership number since 1957. Public transportation is a way of life in urban areas, a lifeline in many towns and rural areas, and a quality of life improvement for many fast growing communities. In addition, many working families, seniors, veterans, individuals with disabilities, tribal residents, and others rely on public transportation for their mobility needs. Transit is a driver of local and regional economic development, helps reduce highway congestion and greenhouse gas emissions, and provides people better access to job centers, schools, medical services and other vital daily activities.

Approximately half of all transit riders do not have access to a private vehicle, making public transit a primary means of connecting to their local community. FTA anticipates that demand for public transportation service will continue to rise. Now is the time to deliver the policy and funding solutions America needs to improve our national transportation network, invest in our collective future, and grow the economy.

MAP-21 took effect on October 1, 2012, and authorized $10.6 billion in FY 2013 and $10.7 billion in both FY 2014 and FY 2015 for public transportation. FTA is effectively and efficiently administering those federal dollars through its formula and discretionary grant programs. We also continue to make significant progress on an aggressive timetable towards implementing new safety authority through the rulemaking process and developing related guidance with input from affected stakeholders.

Last year, the Administration proposed the GROW AMERICA Act, which was a comprehensive four-year, $302 billion reauthorization proposal calling for substantial funding increases as well as critical policy reforms. Congress passed a short term extension with status-quo policies and flat funding, which did not address America’s infrastructure funding challenges. In March 2015, the Administration submitted to Congress an updated version of GROW AMERICA, consistent with the President’s FY 2016 Budget Request, which adds additional funding certainty by requesting a six-year, $478 billion multimodal proposal, including $115 billion to support our Nation’s public transportation systems.

The GROW AMERICA Act continues the focus on FTA’s three key priorities: improving transit safety – FTA’s highest priority; addressing a transit asset maintenance backlog that’s more than $86 billion and growing; and building system capacity to meet growing ridership demand.

To that end, the President’s FY 2016 Budget Request seeks $18.4 billion to maintain existing transit systems in a state of good repair while expanding transportation options. The proposal increases average transit spending by nearly 76 percent above FY 2015 enacted levels, which will enable transit agencies to address immediate repair needs, enhance core capacity and plan for expansion to improve connectivity in suburbs, fast growing cities, small towns, and rural communities. GROW AMERICA also supports economic competitiveness by creating ladders of opportunity through workforce development initiatives and ensuring that manufactured products are produced in the United States. These transit investments will play a critical role in supporting communities around the country.

I. Safety

Public Transportation Safety (49 U.S.C. 5329; Section 3008 of GROW AMERICA)

MAP-21 amended 49 U.S.C. 5329 to give FTA authority for the first time to establish safety criteria for all modes of public transportation, and to establish minimum safety standards for public transportation vehicles used in revenue operations.

Keeping rail public transportation safe requires a partnership between FTA, transit agencies and those states that have state safety oversight (SSO) obligations. FTA will serve as a leader, facilitator, and final regulatory authority; transit agencies will be held responsible for the safe operation of their systems; and the SSOs will act as effective day-to-day safety oversight regulators capable of holding transit rail systems accountable and ensuring they comply with minimum state and federal safety standards.

Following the August 2013 publication of an ANPRM on safety, FTA published the SSO Program Notice of Proposed Rulemaking (NPRM) on February 27, 2015, outlining a program that will replace the existing outdated regulatory framework with one designed to better evaluate the effectiveness of a rail transit agency’s system safety program. This new framework will support the flexible, scalable principles of Safety Management Systems (SMS) to focus on organization-wide safety policy, proactive hazard identification and risk informed decision-making as part of risk management, safety assurance, and safety promotion. Comments are requested on the SSO NPRM by April 28, 2015. Relatedly, FTA intends to launch an SMS Implementation Pilot Program to assist transit agencies of all sizes and operations, including bus-only, in the development and maintenance of their Safety Management System.

FTA also recently published the Final Interim Safety Training Certification requirements designed to enhance the technical competencies and capabilities of individuals responsible for direct safety oversight of rail transit systems at agency, state and federal levels, and of individuals who conduct safety audits of these systems. These requirements become effective on May 28, 2015.

We intend to issue additional guidance and notices of proposed rulemaking in 2015, about such issues as the National Public Transportation Safety Plan, the Public Transportation Safety Program, the Transit Agency Safety Plan, the National Public Transportation Safety Certification Training Program and the Transit Asset Management Plan. Together, this framework will ensure safety standards are in place at each transit system across the country to protect the riding public and transit agency employees.

In the meantime, in order to better understand the strengths and weaknesses of public transit safety operations, FTA is utilizing its new safety authorities to collaborate with the Chicago Transit Authority to examine their safety program, and to conduct a Safety Management Inspection of the Washington Metropolitan Area Transit Authority, which began in early March 2015.

While MAP-21 gave FTA the authority to establish safety regulations, it did not provide FTA with expanded enforcement tools to ensure compliance with such regulations. To that end, the GROW AMERICA Act bolsters FTA’s safety authority by allowing for the imposition of civil and criminal penalties and establishes emergency authority for FTA to restrict or prohibit unsafe transit practices. It also includes data confidentiality for our grantees and an opt-out provision from the law’s SSO Oversight program. This will apply to states with fixed guideway public transportation systems, whether in operation, under construction, or in design, with fewer than one million combined actual and projected revenue miles per year, or which provide fewer than 10 million combined actual and projected unlinked passenger trips per year. FTA will oversee the safety of these exempted systems. The GROW AMERICA Act would also provide resources to fully carry out the safety program, including providing an appropriate level of assistance to states and individual transit providers, while also enhancing safety data collection.

II. Transit Asset Management

State of Good Repair (49 U.S.C. 5337 & 5339; Section 3010 of GROW AMERICA)

Returning transportation assets to a state of good repair is a strategic goal for the Department of Transportation (DOT) and a high priority for FTA. Well-maintained infrastructure investments can have long-term economic benefits for the Nation, but those benefits are not fully realized because of years of underinvestment and neglect. This is evident in the DOT’s 2013 Conditions and Performance Report to Congress, which found an $86 billion maintenance backlog of rail and bus assets that are in marginal or poor condition. The backlog continues to grow at an estimated rate of $2.5 billion per year under current investment levels.

MAP-21 requires transit agencies to develop a Transit Asset Management plan to help them strike a better and more informed balance between preservation and expansion needs in the context of a safety-first performance culture. Strategic and targeted investments focused on replacing and rehabilitating aging transit infrastructure are needed to help bring our Nation’s bus and rail systems into a state of good repair. Having newer and more reliable track, signal systems, vehicles and stations will help ensure the safe, dependable and accessible transit service demanded by the American public.

FTA is actively working to implement this new National Transit Asset Management System through the rulemaking process, supplemented by technical assistance and outreach to grantees. Given the diversity of transit systems, from complex urban rail and bus networks, to demand response van systems in rural communities, a flexible approach will be paramount. FTA expects to issue a NPRM later this year, addressing the extensive comments received on the October 2013 Advanced NPRM, which aligned the transit asset management process with the need for strengthening transit safety. Additionally, on January 28, 2015, FTA published in the Federal Register final guidance to assist recipients applying for funding under the State of Good Repair Formula Grant Program.

However, under MAP-21, our efforts still do not go far enough to address the backlog of maintenance. The current State of Good Repair Formula Grant Program focuses on rail and bus rapid transit (BRT) systems that are at least seven years old. The preservation needs of non-BRT bus services were severely impacted in MAP-21, with the decrease in funding for the Bus and Bus Facilities Formula Grant Program. The need for additional investments and innovative policies that address the backlog for all bus and rail maintenance still exists, and much more work remains to be done. To that end, the GROW AMERICA Act proposes a total of $7.6 billion in fiscal year 2016 to support FTA’s State of Good Repair efforts, and includes $5.7 billion for State of Good Repair Grants (49 U.S.C. 5337) and $1.9 billion for Bus and Bus Facilities Grants (49 U.S.C. 5339), with incremental increases in each fiscal year through the end of the authorization.

All of these actions, taken together, reflect the U.S. Department of Transportation’s strategic commitment to address the infrastructure deficit in a holistic fashion—and to help the industry employ better metrics that enable them, in turn, to be better stewards of their assets.

III. Building System Capacity

Core Formula Programs (49 U.S.C. 5307, 5310, 5311; Section 3003, 3004 of GROW AMERICA)

FTA’s formula grant programs provide the critical funding for the day to day business of transit agencies across America. MAP-21 retained the program structure for the formula programs with a few exceptions, which were implemented quickly in 2013. The Urbanized Area Formula Program (5307) provides critical capital funding to transit agencies for recapitalization needs. The Rural Formula program (5311) provides capital and operating funding to transit agencies serving in rural areas, tribal lands and Appalachian states. The Enhanced Mobility of Seniors & Individuals with Disabilities Formula Program (5310) provides funding for transit services that specifically target serving the elderly and disabled.

Since FY 2013, FTA has obligated more than $10.8 billion in funding for these three formula programs. GROW AMERICA builds on the baseline provided by MAP-21 by requesting a 2% increase for FY2016, with moderate increases thereafter for the life of the authorization.

Capital Investment Grants (49 U.S.C. 5309; Section 3002a of GROW AMERICA)

Not long after the enactment of MAP-21, FTA streamlined its New Starts and Small Starts Capital Investment Program through a final rule and accompanying guidance. The changes are helping local project sponsors shave up to six months off the time required to move major projects through the Capital Investment Grant (CIG) Program pipeline. Sponsors who choose to use the optional simplified travel model developed by FTA – a significant streamlining tool - may develop ridership forecasts in as little as two weeks, a dramatic timesaving from the two years it can take using traditional forecasting models, while saving as much as $1 million on related model forecast development costs. Additionally, FTA now has a more straightforward approach for measuring a proposed transit project’s cost-effectiveness, considers an expanded range of environmental benefits, and has simplified the administrative reporting process.

In April 2015, FTA requested comments from the industry on interim policy guidance that, when finalized, will continue to address MAP-21 provisions that govern the CIG program. The guidance provides a deeper level of detail about the methods for applying the project justification and local financial commitment criteria for rating and evaluating New Starts, Small Starts, and Core Capacity Improvement projects, and the procedures for getting through the steps in the process required by law. FTA is proposing to use simple eligibility parameters, simplified evaluation measures, and expanded “warrants” based on readily available, easily verifiable data to make the process less burdensome and time consuming for project sponsors who qualify.

GROW AMERICA proposes to expand the CIG program by increasing the program funding level to match the growth in projects seeking funding. FTA has seen a steady rise in the demand for projects seeking Capital Investment Grant funding and a significant increase of projects requesting to enter project development since the passage of streamlined Capital Investment Grant program requirements in MAP-21. The FY 2016 CIG Annual Report includes many projects seeking construction grant agreements, and FTA has seen 44 new projects overall since MAP-21 took effect.

GROW AMERICA would also create a streamlined review process for simple, low-risk, cost-effective projects in smaller communities by adding a Very Small Starts category. Very Small Starts projects would be new corridor or regional-based bus services with premium features located in small urban or rural areas.

Rapid Growth Area Transit Program (49 U.S.C. 5314; Section 3011 of GROW AMERICA)

GROW AMERICA proposes a new Rapid Growth Area Transit competitive program that will provide $500 million in capital funds in fiscal year 2016, with incremental increases each fiscal year through 2021, to help fast-growing communities introduce new BRT systems as part of their transportation mix. BRT systems are a proven way to expand mobility relatively quickly and affordably, helping communities to get ahead of congestion and develop a transit-oriented culture as an integral part of their growth management strategy.

IV. Economic Competitiveness

Workforce Development (49 U.S.C. 5322; section 3005 of GROW AMERICA)

MAP-21 formally established the Innovative Transit Workforce Development Program under 49 U.S.C. 5322, which provides funding to transit agencies and partners with solutions to pressing workforce development issues. Program funds are used to address serious shortages in the skilled transit workforce—estimated to be 5,000 to 6,000 workers— by fostering job growth and a stronger workforce through ladders of opportunity initiatives that teach individuals technical skills to support the transit industry in the 21st century.

Rapidly changing technology and growing transit ridership along with plans to expand service has heightened the need for continued training in a variety of public transportation occupations. A new generation of workers must refine their skillsets to meet future demands and contribute to building our nation’s 21st Century transportation infrastructure. GROW AMERICA will expand FTA’s workforce development efforts with a program that will fund and support innovative transit-focused training programs and apprenticeships, particularly at the regional and/or national level The Act will also establish a new Public Transit Institute to replace the current National Transit Institute (NTI), that allows FTA to expand training to cover blue-collar transit workforce training in addition to the management-level courses now offered by NTI.

Local Hiring (49 U.S.C. 5325; Section 3007 of GROW AMERICA)

Currently, federal requirements prohibit the use of local-hiring preferences. It is important that we support local hiring as an effective tool to help men and women who are ready to work to obtain jobs, and job training, in their communities. The GROW AMERICA Act allows the use of local hiring preferences in contracts using FTA funds for projects over $10 million when the work is in an area with a low per capita income or higher than average unemployment. The local-hiring preferences are designed with flexibility and as such may not require the hiring of workers without the necessary skills, and the use of such preferences may not compromise the quality, timeliness, or cost of the project.

Emergency Relief (49 U.S.C. 5324; Section 3009 of GROW AMERICA)

A final rule establishing procedures governing the implementation of the Emergency Relief program became effective on November 6, 2014. On February 4, 2015, FTA published its proposed “Emergency Relief Manual: A Reference Manual for States & Transit Agencies on Response and Recovery from Declared Disasters and FTA’s Emergency Relief Program”. FTA sought public comment through April 6, 2015, and expects to finalize the guidance later this year.

While Congress appropriated $10.9 billion for Hurricane Sandy emergency relief efforts, these funds are only available for areas affected by Sandy. Congress did not appropriate funds for FTA's Emergency Relief program in FY 2013, FY 2014, or FY 2015, leaving the agency with no funds to immediately address any new disasters that that impact the transit industry. GROW AMERICA proposes that $25 million be appropriated in each fiscal year 2016 through 2021 to capitalize the program so that FTA stands ready to respond.

Buy America (49 U.S.C. 5323(j); Section 3006 of GROW AMERICA)

The Administration remains committed to preserving and creating home-grown jobs that support our domestic manufacturing industry and position the United States to take the lead in transportation-related innovation. Therefore, GROW AMERICA proposes to increase the domestic content requirement for manufacturing rolling stock components and subcomponents further than the current standard of 60 percent. With a phased increase, by 2020, 100 percent of the components and subcomponents for rolling stock, by cost, including rolling stock prototypes, will have to be produced in the United States. Final assembly in the United States remains a requirement, as under MAP-21.

Public-Private Partnerships (49 U.S.C. 5315)

FTA also recognizes the value of public-private partnerships as a means of augmenting public investments in infrastructure. On August 25, 2014, FTA published a final circular on Joint Development that clearly explains how FTA funds and FTA-funded property may be used for public transportation projects that are related to and often co-located with commercial, residential, or mixed-use development. The circular emphasizes the concept of “value capture,” which encourages FTA grantees to leverage Federal investments to capture revenue that can in turn be used to offset capital and operating expenses.

Additionally, FTA held an Online Dialogue with stakeholders on Public Private Partnerships in January 2015, and is using the information learned to develop a NPRM on Public Private Partnerships. We expect this rulemaking to address major barriers to utilizing this financing method, and propose methods to ease and encourage their use.

V. Research, Planning & Environment

Research (U.S.C. 5312; Section 3009 of GROW AMERICA)

GROW AMERICA includes $60 million in FY 2016 increasing to $70 million in FY 2021 to support research activities that improve public transportation systems by investing in the development, testing, and deployment of innovative technologies, materials, and processes. FTA partners with public institutions, transit agencies, non-profits, universities, and other entities, awarding funding for activities that improve safety, state of good repair, and help to advance transit vehicle and system technology.

Fixing and Accelerating Surface Transportation (FAST) (49 U.S.C. 5602; Section 1401 of GROW AMERICA)

GROW AMERICA includes a new $1 billion per fiscal year competitive grant program designed to spur major reform in the way States and metropolitan regions make transportation policy and investment decisions, and to encourage new and innovative solutions to transportation challenges. The FAST program will be jointly administered with the Federal Highway Administration (FHWA), each overseeing $500 million, to encourage the adoption of bold, innovative strategies and best practices in transportation that will have long-term impacts on all projects across the transportation programs.

Performance-Based Planning & Accelerated Project Delivery

MAP-21 transformed the Federal-Aid Highway program and the Federal Transit program by requiring a transition to performance-driven, outcome-based approaches to key areas. With respect to planning, the statute introduced critical changes to the planning process by requiring States, MPOs, and providers of public transportation to link investment priorities to the achievement of performance targets for safety, infrastructure condition, congestion, system reliability, emissions, and freight movement. FHWA and FTA jointly issued an NPRM on Metropolitan Transportation Planning, and Statewide and Nonmetropolitan Transportation Planning in June 2014, and are on target to issue a final planning rule later this year. The two agencies also jointly issued a final rule in October 2014 that creates five new categorical exclusions for transit projects, thereby shortening the environmental review process by requiring minimal analysis and documentation, where appropriate. These types of actions effectively cut red tape for funding recipients, reduce the administrative burden on state and local governments, and expedite results for the American public.

VI. Conclusion

The May 31st expiration of the extension of MAP-21 offers an important opportunity to recalibrate the way our government evaluates and invests in our federally funded public transportation infrastructure. From a transit perspective, MAP-21 included provisions enabling FTA to focus limited resources on certain strategic investments and policies. The Administration’s comprehensive six-year reauthorization plan set forth in GROW AMERICA will provide FTA with the additional tools necessary to improve the riding experience for millions of Americans by repairing and modernizing transit systems and expanding capacity for generations to come.

I am committed to working together with this Committee to achieve our mutual goal of addressing America’s urgent need for investment in transit infrastructure. Thank you again for inviting me to testify on this important topic, and I will make myself and my staff available to answer your questions.

Updated: Wednesday, March 16, 2016
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