SECTION: CAPITOL HILL HEARING TESTIMONY

LENGTH: 2766 words

COMMITTEE: HOUSE TRANSPORTATION

HEADLINE: EASING REGULATION OF TRANSIT SERVICES

TESTIMONY-BY: AMERICAN PUBLIC TRANSPORTATION ASSOCIATION

BODY:
SEPTEMBER 26, 2001

TESTIMONY OF THE AMERICAN PUBLIC TRANSPORTATION ASSOCIATION

BEFORE THE HIGHWAYS AND TRANSIT SUBCOMMITTEE OF

THE HOUSE TRANSPORTATION AND INFRASTRUCTURE COMMITTEE

ON IMPROVING THE DELIVERY OF TRANSIT SERVICES BY EASING REGULATORY BURDENS

September 26, 2001

APTA is a nonprofit international association of over 1,400 public and private member organizations including transit systems and commuter rail operators; planning, design, construction and finance firms; product and service providers; academic institutions; transit associations and state departments of transportation. APTA members serve the public interest by providing safe, efficient and economical transit services and products. Over ninety percent of persons using public transportation in the United States and Canada are served by APTA members.

Mr. Chairman, thank you for this opportunity to testify on improving delivery of transit service by easing regulatory burdens.

About APTA

APTA's more than 1,400 member organizations serve the public interest by providing safe, efficient, and economical public transportation service, and by working to ensure that those products and services support national energy, environmental, community, and economic goals. APTA public and private member organizations include transit systems; commuter railroads; design, construction, and finance firms; product and service providers; academic institutions; and state associations and departments of transportation. More than ninety percent of the people who use transit in the U.S. are served by APTA member systems. TEA 21 and Public Transportation

Mr. Chairman, we thank you, and the Transportation and Infrastructure Committee, for crafting the Transportation Equity Act for the 21st Century (TEA 21), which has so effectively improved the industry's ability to meet demands for capital investment and service. The legislation has clearly and significantly improved our industry's ability to meet the growing demands for service in urban, suburban, and rural communities throughout America. The predictability of annual federal investment under the guarantees established in TEA 21 has been very helpful to transit agencies as they develop and annually update long-term capital investment programs.

The good news is that TEA 21's increases in federal investment and the predictability of those funds have paid off! Public transportation ridership is up 21 percent over the past five years, the highest levels in forty years. As a matter of fact, ridership now exceeds more than 9 billion annual trips. It is clear that Americans want choices to address their transportation needs, and public transportation provides just that. Of course, this steady climb in ridership trends means increased demand on existing systems and growing needs, an issue that will need to be addressed during the reauthorization of TEA 21.

Overview

Mr. Chairman, APTA's member organizations have formed a Reauthorization Task Force and are currently in the process of developing recommendations on the federal transit program for the upcoming reauthorization of TEA 21. Therefore, we are pleased today to discuss some regulatory issues and topics that we think can be improved, but want to emphasize that our testimony is not meant to be a comprehensive review of ways to ease regulatory burdens. In that regard, our Reauthorization Task Force, which represents APTA's broad and diverse membership-- transit systems, business members, state DOTs, and others--expects to have a comprehensive proposal on the reauthorization of TEA 21 including recommendations for streamlining the program, next spring.

There are three broad themes regarding reauthorization that are emerging from our Task Force's deliberations: - Maintain the funding guarantees;

- Grow the program's investment levels; and

- Streamline program delivery.

Transit Means Business

In the context of today's hearing, let me focus on this last bullet point, "Streamlining Program Delivery." APTA member public transportation systems appreciate the federal funding provided under TEA 21 and FTA's oversight of those resources. While local public transportation is a service much like a local fire department, and not a private business, the transit industry has worked diligently to be good stewards of our federal investments. Indeed, transit operators have worked hard to run their systems in a businesslike way even as they provide services to the public in the context of limited resources. And they are doing that in innovative ways, for example, by earning some $1 billion in revenue over the past decade from sources other than the farebox-- nearly double the amount the industry earned in the 1980s. But more can and must be done to allow them to operate flexibly and creatively. The growing demand for public transportation service throughout the nation requires that our member systems continue to look for ways to eliminate unnecessary or duplicative requirements so that they can deliver the best and most comprehensive service flexibly and efficiently.

Procurement Reform

One area that we all--business members, transit systems, the federal government--agree needs to be addressed is the procurement process. APTA has created a Procurement Task Force to explore how the procurement process, as it relates to transit agencies, can be improved. The Task Force expects to develop proposals that would lead to improved procurement and selling practices in the transit industry; provide the industry with better products at a fair cost; and strengthen the business climate of the industry. They are looking at a range of issues, not just federal procurement requirements, but things like relationship issues--that is, can the procurement process be more collaborative and less adversarial; terms and conditions of contracts--issues like slow payment cycles; technical matters-- standardization of equipment; process issues--inordinate delays; and regulatory and legislative issues--burdensome federal, state, and local requirements. We hope that the Procurement Task Force's efforts will lead to a set of recommendations that result in improved relationships between buyers and sellers; increased use of standards and standardization; increased use of technology in the procurement process; and making partnering and collaborative relationships and risk-sharing commonplace in the industry.

Some of these recommendations are likely to require legislation, which we would address in our reauthorization proposal. In the meantime, APTA separately is undertaking an activity that really may change the face of procurement as we now know it. In partnership with Booz Allen & Hamilton, Inc., APTA has created a new corporation--TransportMAX--a business-to-business e- procurement marketplace where transit industry buyers and sellers can do business online. One of its core features is its efficient and robust e-procurement functionality, whereby customers can have a complete, efficient, and secure procurement environment to achieve significant cost savings. We are just beginning the pilot part of the process with eight transit systems of different sizes, and we expect to have a commercial launch of TransportMAX early next year.

Mr. Chairman, let me now address more specifically areas where some changes in federal policy might effectively be made.

FTA Policy Statements, Consistency of Procedures

Unlike FTA regulations that are issued in draft form and subject to comment and revision, FTA circulars or other policy statements can be issued without the same review. Unfortunately, however, such communications often carry the same significance and penalties as regulations themselves. APTA recommends that, where possible, FTA guidance, policy statements, or significant interpretations be subject to at least 90 days prior notice and comment before becoming effective, and, when issued finally, should then publicly be available for review in FTA headquarters and regional offices around the country, as well as on the FTA website. This could help assure that program requirements and policies are consistently interpreted and applied evenly to transit systems in every region. Collaboration, cooperation, and communication are the keys to effective program oversight and management. This extends to the grant delivery process as well, where some regions are better than others in timely communicating to applicants the status and completeness of pending grant applications - an important issue in terms of working through the application process and getting critical federal funds delivered as soon as possible.

Federal Audits and Reviews

We are supportive of FTA and its oversight, but we think greater planning and organization can bring benefits to the industry and the federal government. Recipients of federal transit funds are subject to comprehensive and ongoing reviews and audits, often in addition to state and local reviews. There are procurement reviews, drug and alcohol audits, financial reviews, and the list goes on and on. We are not saying these reviews and audits are unnecessary; rather, that they occur separately over the course of a year. We ask that FTA consider ways that these oversight activities could be coordinated and performed at the same time, to the extent possible.

Furthermore, in some instances outside auditors used by FTA can be inexperienced and unfamiliar with transit operations and the rationale behind federal regulations. In this regard, it may be time, Mr. Chairman, to consider the internal staffing needs of FTA, an agency overseeing what is becoming an $8 billion annual program (including STP and CMAQ transfers) with the same level of staff it had when it oversaw a $3 billion program.

Drug and Alcohol Testing

Mr. Chairman, our member organizations strongly support federal drug and alcohol testing of safety sensitive transportation workers, but we think there are ways the program could be more efficiently run. In particular, we are concerned about application of certain aspects of the rules to smaller transit systems, and urge FTA and DOT to continue to look at ways to minimize burdens on these systems where feasible. For example, the incidence of random drug testing is determined by industry- wide data. This means that those systems with low incidence of positive drug or alcohol testing results nonetheless must expend more time and money by testing at industry-wide rates. This is particularly burdensome on small operators. We would like DOT to explore the possibility of having the rate of testing based on individual transit system data, not industry data. If systems can demonstrate statistically that their positive rates are below the industry average, it makes sense that they be granted greater flexibility under the testing requirements.

Finally, larger transit agencies may have to comply with different testing requirements of different DOT agencies--for example, FTA, FHWA, Coast Guard, FRA--resulting in the undue expenditure of both time and effort. APTA suggests that in such cases a grantee need comply with the drug and alcohol program of the most appropriate federal agency rather than with all the others. Compliance would still occur but with less burdens to the affected entities.

Discretionary Bus Grants for Rural Transit Agencies

Under the current requirements of 49 USC, Section 5309, rural and small urban transit operators who receive discretionary bus grants must comply with the grant requirements that larger agencies in urbanized areas must comply with.

A simple fix here would be to permit rural and small urban transit agencies to use federal grant requirements under the rural transit program (49 USC, Section 5311) for discretionary bus grants rather than the standards applied to transit systems in urbanized areas.

Coordination with Health & Human Service Agencies

APTA has long been involved in the effort to improve coordination between U.S. Department of Health and Human Service (HHS) providers who purchase transportation service and public transportation agencies funded by the Federal Transit Administration (FTA). Public transportation agencies can often provide higher quality transportation for non-emergency health care, job training and other social services at lower costs than HHS funded agencies now pay. In 1997, the Health Care Financing Administration estimated that it spends more than $1.2 billion annually on non-emergency medical transportation. Since then, some state Medicaid offices have improved the delivery of transportation services at reduced costs by coordinating with local public transportation operators. But many state agencies still fail to coordinate or consult with transit agencies for their transportation needs.

Transit agencies have the expertise and the equipment to provide such services. Outpatients can save significant amounts of money by using regular transit service to get to health services. Just compare the cost of ambulance service to get patients to dialysis service to the cost of paratransit service. Public transportation has become increasingly accessible for all Americans. Virtually all fixed route bus service is now accessible to people with disabilities and transit agencies have the ability to transport those who cannot use wheelchair accessible buses in paratransit vans. According to the FTA, in four major programs - Medicare, Medicaid, Food Stamps, and Unemployment Compensation - each dollar invested in low-cost mobility services reduces the transportation costs under those programs by approximately 60%.

While we understand that Health and Human Service programs are not within the jurisdiction of this committee, we ask for your support in our effort to improve coordination between these federally funded programs. Greater use of public transportation in the delivery of HHS transportation services has the potential to be a win-win situation. HHS agencies can save money while more effectively utilizing the federal investment in our public transportation infrastructure.

Motor Fuel Tax Exemption

Under current tax law, private non-profit transit providers and demand response systems that do not operate fixed route transit service are often ineligible for exemptions from, or rebates of, federal motor fuel taxes. While they sometimes receive exemptions provided for state and local governments, current law which provides fuel tax exemptions and rebates to transit systems does not apply to vehicles "engaged in furnishing transportation which is not scheduled and along regular routes unless the seating capacity of such bus is at least 20 adults (not including the driver)." It makes little sense to levy fuel taxes on publicly operated transit operations simply because they use smaller vehicles or operate non-fixed route service, both of which may be the best way to provide public transportation in less urban communities or for specific transit service. We urge the Congress to exempt all public transportation providers from federal motor fuel taxes so that federal grant funds received by such agencies are used to provide service and not pay federal motor fuels taxes.

DOT Planning Regulations

Finally, Mr. Chairman, we were pleased to testify before this Committee just a year ago on the issue of planning regulations. Let me highlight here the six key principles we made about DOT's planning regulations in our September 15, 2001, testimony -

- The regulations should ensure multimodal planning (and a full consideration of transit in a multimodal process);

- The planning process should serve decision-making at all levels;

- The regulations should promote a balance of economic, mobility, environmental, and other objectives;

- APTA supports environmental streamlining, so long as it does not create a bias against any particular mode or eliminate viable options prematurely;

- The regulations should ensure early and continuous collaboration among all planning and modal implementing agencies; and

- APTA supports early and continuing stakeholder participation, particularly by those stakeholders named in Title VI of the Civil Rights Act. Conclusion Mr. Chairman, these are just a few of the issues that we think can help improve delivery of transit services. We again thank you and the Committee for your commitment to investing in the nation's transportation infrastructure and look forward to working with you on the reauthorization of TEA 21.



LOAD-DATE: September 27, 2001