>> a home with more than 33 bedrooms for guests and family. 65 fireplaces. an incredible massive staircase. just architectural beauty surrounding the home. >> we'll visit the late pastor billy graham's asheville religious retreat the coffee. watch c-span's cities tour saturday at 11:15 eastern on c-span's book tv and sunday 2:00 p.m. on american history tv on c-span 3 working with our affiliates as we explore america. a senate commerce science and transportation subcommittee held a hearing with state and local officials to assess surface transportation infrastructure funding. they discussed the administration's infrastructure proposal and how it compared to rural needs and freight requirements. this hearing is about an hour and 15 minutes.

good afternoon. i am pleased to convene the senate subcommittee on surface transportation and merchant marine infrastructure safety and security. our hearing today titled rebuilding infrastructure in america, state and local transportation needs will give us the opportunity to better understand the state of our surface transportation infrastructure. many of us hear from our constituents about the poor state of infrastructure in the united states. their concerns have been confirmed by numerous study, including the often cited infrastructure report card from the american society of civil engineers, which gave us u.s. infrastructure a d plus in 2017. research by the american transportation research institute shows that congestion on our roads cost the trucking

industry $63.5 billion in 2015. more broadly a recent "wall street journal" article reported that traffic conguee congestiont an american family about $1400 each year. the federal government place an important role to maintaining a continuous traffic system across the country which has become the artery of commerce for the united states. however the system would not work without state and local governments. widow the majority of the work to design, construct and maintain our infrastructure. the administration's recent infrastructure proposal includes a number of important ideas to improve our infrastructure. i'm particularly pleased to see proposals to reform project permitting and stream line what is frequently a burdensome process for state and local governments. according to the congressional

research service, major federal highway projects can take as long as 14 years from start to finish. it took less time to build the panama canal and we did that more than a century ago. duplicative regulations and red tape increase the time it takes to build infrastructure projects and time is money. the cost associated with delays weigh heavily on taxpayer resources. by reducing unnecessary regulations the administration's proposal would speed up the process for project approval and construction. several provisions of the proposal recognize that states and localities know the needs of their constituents best, and that they should be given greater authority over the design approval and construction of projects. i was also pleased to see dedie indica -- dedicated funding for rural

projects. for states like nebraska to make it to markets around the world we have to ensure our transportation systems all across the country are in good condition. dedicated funding supports these systems which means nebraskans and the products we make can make it to wear they need to go. now that the administration has put forward a proposal, it's time for congress to put pen to paper. i look forward to working with my colleagues, the administration, and all stakeholders and users of our infrastructure system to craft legislation that brings our infrastructure into the 21st century. as we know, there are a lot of ideas out there to address the revenue issue that is surrounding transportation infrastructure investment. last year i put forward a proposal that aims to address the funding short fall and modernize our infrastructure system. my build usa infrastructure act would ensure the solvency of the

highway trust fund for five years following the expiration of the fast act. by dedicating revenue collected by customs and border patrol through duty, tariffs and other user fees my bill utilizes existing funding to support our infrastructure. additionally, states would have more flexibility in the approval of infrastructure projects. under my proposal, states could enter into remittance agreements with the federal highway administration, whereby they would remitt 10% of the federal aid ohio dollars in exchange of state purview of design, permitting and construction, a federal aid highway projects. by using the resources that are currently available more efficiently we can stretch our current federal aid dollars to improve and expand our infrastructure system. we have several witnesses before the committee today that can speak directly to the needs of states and localities.

they represent both those who build our infrastructure and those who rely on its proper maintenance. i'm pleased that the director of the nebraska department of transportation is here to provide insight on nebraska's innovative work and transportation policy. i have to cough because nebraska always had a nebraska department of roads. i look forward to the testimony of our witnesses and i would now like to invite my colleague senator peters to offer his opening remarks. >> thank you, chairman fisher, for calling today's hearing and thank you to our witnesses for joining us to share your thoughts on a very critical issue and how the federal government can help upgrade our nation's crumbling infrastructure. i want to extend a special welcome to mr. dan gilmartin, the president and ceo of the michigan municipal league and a member of the national league of

cities. he is a leader in the fields of urban revitalization, place making, local government reform and transportation policy and is leading advocate in lansing, michigan as well as washington for the league's membership of 520 cities, villages and twps. he lives in detroit. so welcome to the hearing today. he lives in detroit. so welcome to the hearing today. >> michigan is is undergoing a renaissance and leading transformative technologies including self-driving vehicles, artificial intelligence and robotics. billions of dollars are being invested and thousands of jobs in manufacturing, logistics and transportation are being created at will help support the middle class of america for decades to come. to prepare for this future the

michigan department of transportation is working with local governments to rethink their roads, intersections, and pedestrian walkways in light of self-driving vehicles. increased presence of on demand ride sharing networks. as part of u.s. department of transportation's connected vehicle pilot the state has installed over 100 dedicated short range communication roadside units throughout the state for vehicle and infrastructure connectivity. driving on our roads will make it more safe and efficient. they are starting with a foundation that's ranked dead last by a survey conducted by the american society of civil engineers of the infrastructure in 27 states. systemic under investment in maintenance and repairs by the federal and state governments have left residents with dangerous pothole ridden roads,

sink holes that swallow houses and close beaches. the state's 21 century infrastructure commission determined an additional $4 billion will be needed annually just to maintain our current d plus status. michigan's infrastructure challenges are shared by its neighbors across the midwest and throughout the country. and how does president trump suggest that we tackle this challenge? the president sent us a proposal that requires cash-strapped state and local governments to simply foot the bill. rather than having the federal government step up as a reliable partner president trump's plan continues the problem by once again passing the buck. i'm very concerned this will result in more local tolls, fare increases, rate hikes and taxes and not clear what local communities will get in return. i'm also worried the plan depends on the availability of states and localities to raise new revenues while smaller

communities will be left behind. this issue is very personal to me. my state knows all too well the devastation that can result when we don't properly invest in our infrastructure. in flint, michigan, the city and state wanted to cut costs. they knew the pipes carrying the water were in horrible disrepair. but rather than spending $1 million upfront to upgrade the city's water system, it was treated as an expenditure that needed to be reduced. by switching the city's water source to polluted flint river to save money there was devastating impact to both children and families. the crisis turned into a $200 million federal problem and became a prime example of the need to invest upfront in the ability of cities and states to provide essential services. flint is, unfortunately, not alone. there are thousands of other communities across the nation

with lead lined pipes and ageing water infrastructure. all of these communities need a strong federal partner on the front end, not after something terrible has happened. my michigan is is showing us what a future innovation economy and corresponding infrastructure could look like but the current realities of our roads and prolonged economic recovery of many of our towns and cities show the extent to which our progress could be slowed or not shared at all if something akin to president trump's proposal is enacted. communities like flint, like detroit, like atlanta and like philadelphia can't do this simply on their own. i look forward to hearing from all of you today on how congress can work in a bipartisan fashion, to make the right investments right now. so that we can be a partner to our cities and states who desperately need a partnership. thank you. >> thank you, senator peters. at this time i would like to

introduce each member of the panel and after my introduction for you if you could give your opening statement and try to limit it to five minutes. we can include the entire statement in the record. first, i'm very pleased to introduce the director of the nebraska department of transportation. he was appointed to this position in june of 2015. he has the background in civil engineering, transportation policy and consulting. welcome mr. schneweis. >> chairman fisher, ranking members of the subcommittee. thank you for the opportunity to testify before you today. because nebraska is central geographic location we serve as

a key link in the nation's transportation network. with our highways and interstate 80 being crucial corridors. in addition nebraska is home to some of the nation's largest railroad and trucking operations making the importance of efficient movement of freight imperative. the governor wants to grow nebraska. state agencies is making government more efficient, more effective and improving customer service and creating opportunities for nebraskans. the governor recognizes infrastructure provides the framework that ties communities together and helps grow our state. our governor and state legislature has been very active on transportation issues in recent years. passing legislation to prioritize funding for infrastructure and giving our agency the tools to stream line project delivery. for example, in 2011 a bill championed by then state senator fisher called nebraska act was passed dedicating a quarter of one cent from sales tax receipts to fund new capital projects.

in 2016 the nebraska legislature passed the transportation innovation act which created and financed the state's first transportation infrastructure bank which established programs that allow us to provide matching funds to localities to address deficient bridges and spur economic development. the innovation act authorized the department to utilize innovative product delivery methods. as a result of this strong leadership, we've been able to move forward with many projects that have been put on the shelf due to a lack of funding. a great example is we're on track to complete our state highway system. we did all of this by taking a critical look at existing revenue streams and repurposing a portion of it for infrastructure. resulting in investing estimated $1.6 billion in projects over the next 20 years. last year our state legislature passed a bill to authorize the

department to work with the federal highway administration to take on responsibilities from the federal government. i believe we're one of eight states that sought out that authority thus far and once the process is complete it will be beneficial for us to complete our projects. additionally with the framework that has been put forward by the president we see it as an opportunity to be creative in how we pay for projects and see the potential in trying to fund infrastructure beyond the traditional methods. funding resources across the country don't match up with investment needs and this means creative outside-the-box think is need. if we're going meaningfully improve the state of our infrastructure. while the subcommittee and full committee discuss proposals i have a few key recommendation.

first, make sure the funds tied to any infrastructure package has as few federal strings as possible. state governors are best to put transportation dollars to work. the president plans $15 billion rural programs. we're supportive of this idea. the president's proposal also has spurred discussions on seeking more dollars from state and local governments. in relation to federal dollars. i think it's important to recognize the prior financial commitments that states have already made. many state legislatures including in nebraska raise the state gas tax in the past few years to invest in infrastructure. asking states to enact additional revenue is not feasible in those states that have taken similar action. i would encourage any legislation to have look back provisions that give states and local governments who made those decisions full credit for doing so. public-private partnerships are being discussed as possible

options to leverage federal dollars behind the president's plan. rural states like nebraska may have challenges attracting investors, we have -- we believe that creating opportunities for instance gives us another tool in the tool box to be innovative. i would like to harken back on the need to further stream line on the permitting process. nebraska has taken steps to reduce the burden by taking on the assignment it doesn't prevent us from getting tied up in red tape. state d.o.t. should be provided more opportunities to assume federal responsibilities and associated compliance. it doesn't absolve a state from sharing as leading stewards of human and natural environments. it enables us to save time and taxpayer dollars and ully provide better customer service to our constituents. while ensuring that the environment that my family and my fellow citizens of nebraska live in remains protected.

chairman fisher, ranking member peters, members of the subcommittee thank you for the invitation to join you and i look forward to your questions. >> next mr. jordan cass. president of managed services for c.h. robinson where he's worked since 1999. c.h. robinson has a unique perspective on the state of infrastructure in the united states through its work connecting shippers with carriers in the trucking, rail, air and ocean transportation industries. welcome. >> chairman fisher, ranking members peters, thank you for the opportunity to testify. as one of the nation's largest third-party logistics, we have a unique view of how commerce flow. in 2016 i addressed this committee as you considered the impact of the internet of things on supply chains. today i'll provide insight into issues that keep supply chain executives up at night as well

as their thoughts on funding meticulousisms. they see the world through a different lens. their focus is to provide cost effective supply chain. primary concerns for our customers are consistency of service and cost. they want to keep the inventory lean and as close as possible to their customers. today's supply chains are challenged every day by weather, truck supply, increased congestion on highways, rail hubs and seaports. private-sector support has allowed to move more inventory with fewer trucks. while information has provided supply chain planners with detailed visibility of their operations, there's little to no underutilized capacity in our marketplace. the private-sector has continued to invest to improve efficiency. public participation has not kept pace. other countries are investing in

infrastructure in a manner that is commensurate with their economic growth goals. congeegs here is serious. delays have led to inconsistent service and increased costs. our nation's supply chain professionals recognize that we're falling behind our overseas competitors. bottleneck reports is a good place to start. addition additionally, it's based on sound supply chain fundamentals. our shippers and carriers are focused on park. current availability of truck parking in our country is insufficient. some customers have begun opening their yards not just to drivers of their own but to all truck drivers. we're encouraged by provisions included in the fast act to address truck parking. we are also encouraged by the

establishment of the state freight advisory committee as part of the fast act which provided shippers an opportunity to more directly connect with state and construction planners. congress should continue to bolster and expand programs. another area that could increase supply chain efficiency is resolving the confusion of public available data. currently there are no requirements for shippers or brokers to check carrier credentials. neither cvso or cmsa have consolidated all the information that allow a carrier to operate into a single website. this confusion resulted in many shippers not checking carrier qualifications. other shippers may be using less important data which may exclude small carriers. we encourage this committee to

include a national hiring standard. regarding freight funding meticulousisms, we encourage you to decouple freight funding. separate the historic link of the gas tax and diesel tax. supply chain professionals whole heartedly prefer vehicle miles travel tax or the diesel tax compared to all other proposals. while tolls may work well for autos they provide problematic burdens in the supply chain. in addition to encouraging vehicles to travel on local roads, toll receipts are challenging. finally, a proposed highway service tax based on the value of freight transportation tax would be complicated. it's easy to replicate air freight but based on our experience we repain skeptical

about a highway tax. thank you for the opportunity to provide insight into our country's infrastructure needs. our nation's shippers and supply chain professionals are ready to see significant new investment in our infrastructure. >> thank you, mr. cass. next we have jo strange who is the senior vice president for safety and regulatory. previously she served as associate administrator for railroad safety and chief safety officer for the railroad administration. her experience provides her with an in depth knowledge of railroad needs and regulatory policy. welcome. >> thank you. thank you, chairwoman fisher, ranking member peters and members of the committee. the american short line railroad association is the trade association representing the nation's 600 class ii and class

iii railroads. short lines operate under 50,000 miles of track on nearly one-third of the nation's national railroad network. we operate in 49 states and handle nearly one out of every four rail cars that move through the national system. short lines have three defining characteristics. we're small business. average size of a short line railroad is 30 employees. combined annual revenue is less than the annual revenue of any single one of the nation's four largest carriers. short line spend a lot of money restoring class i bridge lines that were head for abandonment. they invest 25% to 30% of their revenues making short lining railroad the capital intensive industry. for thousands of shippers in rural and small town america short line service is the only connection to the national railroad network. to help them meet their investment needs congress

enacted the short line rehad a -- rehabilitation tax credit. it maximized infrastructure investment and we believe making the credit permanent is the most important thing congress can do to help short lines rebuild and improve their portion of america's infrastructure. we know many of you agree. 14 of the 17 members of the subcommittee including chairwoman fisher and mr. peters are co-sponsor of a bill, the standalone bill that would make the credit permanent. i know that tax legislation is not the purview of this committee. as the committee that is the most knowledgeable considering infrastructure matters i urge you to take our tax credit message to your senate colleagues whenever and however the subject of infrastructure is addressed in this congress. with regard to that which is in your jurisdiction, let me

comment on several specific programs and conclude with some thoughts on infrastructure programs in general. we strongly support the listy program. it provides direct access for short line eligibility and puts the focus on benefit cost analysis. we think with a level playing field short line projects will farewell. it includes a category for railroad safety technology grants which can potentially be helpful as we work to implement and pay for positive train control. we were pleased to see the u.s. d.o.t. issue its first chrissy last month. we support the funding. we think that additional support for chrissy would be appropriate as this committee works to develop an infrastructure package. we support the tiger grants. while the analytical areas -- short line has secured numerous

grants. we're supportive of the grant program and supportive of a significant expansion in a new infrastructure package. but we would suggest that expanded small project components would be needed and removal of the arbitrary limit on how much of the program can be spent on nonhighway programs especially in a scenario where the program is not 100% funded by a highway use fee. many of you are familiar with the rift loan program and many efforts both by congress and republican and democratic administrations to improve the program. efforts that have been met with limited success. ascribed in my written testimony we believe that rift can be improved it will never be a broad solution for a significant number of short line rail rehabilitation projects and hope congress will not use this loan authority to check the short line box as it puts together an infrastructure package. as you consider how to proceed

with an infrastructure package we believe there are three general provisions that will be important for short line participation. short line should be directly eligible applicants for project grants similar to chrissy. thechrissy. the process needs to be to be simple and transparent. short lines do not have grant writers and we don't have the resources to hire expensive washington, d.c. consulting firms. the analytical process needs to be clear and there should not be a one size fits all process. the benefit cost analysis for incremental improvements on a short segment of track serving small grain elevators should not be the same as building a new highway lane or adding a new subway line. finally, we encourage you to continue to examine unnecessary federal regulations that divert financial resources from the track rehabilitation work which is the best way to improve railroad safety. i thank you for the opportunity and appreciate any questions you may have. >> thank you, miss string.

next we have dan gillmartin who is the executive director and ceo of the michigan municipal league and serves on the place making leadership council. welcome, sir. >> thank you. good afternoon, chairman fisher, ranking member peters and members of the subcommittee. i'm thankful for the opportunity to speak with you today about rebuilding and reimage thing our nation's infrastructure. i'm here on behalf of cities and villages in my state as well as the national league of cities which represents 19,000 cities and towns of all sizes across the country. first let me commend the committee and senator peters in particular for his work to engage with the cities on the av start act. second, yesterday nlc released a report bridging the urban rural economic divide. it highlights the importance of infrastructure connectivity and market access to create sustainable growth and bridge the gap between urban and rural america. the full report is in your

written testimony. cities are your partner in infrastructure. local governments own, operate and maintain 78% of the nation's road miles, 43% of the nation's federal highways, 50% of the nation's bridge inventory, 95% of the nation's water and wastewater investments and we support our vital local transit programs as well. we believe a national comprehensive infrastructure bill is essential and it should support five guiding principles. one, sustainable investment. together industries and our federal partners must address the existing core infrastructure backlog, reestablish long-term funding and use new technologies that will serve america's cities for the next 100 years. without sustainable funding we simply will continue to manage the decline of our transportation networks. two, local driven projects.

local leaders should be given a strong voice in decision-making as they are best positioned to identify where infrastructure needs are the greatest. as you've seen from the popular tiger grants the silos of the past are not a good match for the seeds of a strong modern network. flexible programs are crucial to the creation of authentic, vibrant, local places that drive economic prosperity today. three, federal local partnerships. cities across this country are investing plls of their own resources and need a steady federal partner to fund existing national programs and make significant capital investments for the long-term benefit of the economy. infrastructure projects are planned years in advance, having a reliable federal source of funding will allow local communities to properly plan and build for the future. fourth, expand revenue tools. cities should be given more flexibility to raise revenues and use innovative financing techniques while protecting

existing tools. we stand ready to work with you to identify new opportunities. and fifth, to rebuild and reimagine. we are investing in intermodal, sustainable and interconnected places that people want to live, learn, work and play in. congress should invest in cities visions to rebuild and reimagine america's infrastructure ultimately bolstering economies across the country. we believe these principles form the basis for america's next infrastructure investment. every day we wait our nation's infrastructure gap grows. a band-aid approach no longer serves the interests of americans. wwj radio in detroit recently described life on michigan's roads like this, broken rims, torn tires, endless commutes, waiting for hours on the side of the freeway for overworked tow drivers. as somebody who drives those roads i can tell you this is

true. today cities are reinventing my state and we're doing our part. residents have responded by supporting more than 80% of local millages on the ballot. they have raised the state's gas tax and registration fees but funding levels fall far short of the need. now is the time for the federal government to partner with us and pass an infrastructure package that addresses the shortfall in the highway trust fund and provide cities in michigan and those across america with a reliable transportation network for the 21st kept ri. we know that bridging the $2 trillion shortfall won't be easy and we will take -- we will make a significant commitment -- it will take a significant commitment from every level of government, federal, state and local. we cannot watch our major infrastructure systems break down in slow motion. we must address the significant workplace pipeline gaps across all sectors that build our roads, maintain our bridges and

operate our wastewater systems. america's infrastructure is a system being pushed to its limits and the time to act is now. on behalf of cities across the country, we ask you to partner with us and take the necessary steps to rebuild and reimagine america's infrastructure as a modern, safe, reliable and efficient model for the world. i thank you for the opportunity. >> thank you very much. we will begin our first round of questions now. and thank you, panel, for your opening statements. director, i'm glad that you mentioned nebraska's work to assume nepa authority. during a recent senate environment and public works committee hearing secretary ciao said that she hoped to have the mou between nebraska and the federal highway administration signed shortly. can you elaborate on the benefits to nebraska you believe will result from assuming this authority and do you believe the nepa assumption process could

serve as a model for other permitting authorities? >> thank you, chairman fisher. we are entering the final stages of the negotiation so i can tell you we've been very pleased with the approach that the federal highway has taken with us, both local and here in washington. we have gotten a lot of support as we try to enter into this agreement. for us it's really a matter of saving time and saving money. we have the experts that do this work at the d.o.t. so to ask them to do the work and then hand it over to review on the federal side and do that again and again throughout the life of a project, it adds time that we don't feel is necessary so we think we will be able to shave off a lot of time and therefore save money on our projects. i do think that state d.o.t.'s are uniquely positioned in many ways to assume some of these responsibilities and i think there are opportunities to look at other areas. i would encourage looking at, for example, section 404 with

the corps of engineers, it's something we issue -- or we submit 30 to 50 permits a year. we have experts who do this every day and i think we could do it in a responsible way that met the obligations. >> have you had an opportunity to look at a bill or -- i don't know if it's been introduced quite yet -- from senator cornyn that deals with section 404? i recently signed on to that. >> i have seen it, yes, and without -- i don't want to mess up the details of it, but it seemed like something that we would be very much in support of. >> okay. have you had the opportunity to look at other states who have assumed nepa authority? there is a number of them that i think six to eight -- >> correct. >> -- that currently have it. what has been their experience with it? >> i think it's been very, very positive. there is a bit of a fraternity with the state d.o.t. as we enter into these things the states that are jumped first are often very eager to assist

us and, in fact, some folks from ohio came out to nebraska and spent a lot of time with us helping us think through the decision. i know california is there, alaska, arizona is just a few weeks ahead of us. so there is a lot of interest in the folks that have done it have been -- have found it to be successful. >> you have had a good working relationship with the federal highway administration on that? >> yes, senator. federal highway has been very supportive of this effort. >> thank you. also i was very, very happy to see that nebraska received a $25 million tiger grant for the lincoln south beltway project and generally nebraska has done better under our formula funding than we have under a grant or any kind of financing programs, although i hope i can see nebraska better compete in the future for those. can you talk about the importance of maintaining the highway trust fund and the formula funding programs to our state? >> sure. we were very pleased with the

news on the tiger grant. after a decade of submissions to finally be on the receiving end was very exciting. grant programs are great, i think it provides the federal government an opportunity to partner in transformative projects that transcend boundaries of states, but ultimately a lot of our federal funds are spent on preserving our 10,000 miles of highways and for us that certainty is what we need, knowing that those resources will be there, we don't have to depend on a grant to be able to take care of those roads and bridges is the key component for us. >> thank you very much. mr. gillmartin, you mentioned this previously in your testimony as well. could you elaborate on the importance of that consistent long-term funding, the city's abilities to plan for future transportation projects. >> absolutely. it's not a lot different than a private business where having a long-term sustainable partnership is something you've got to look at. when we talk about building infrastructure, we're talking about roads and bridges and

other -- other things that we are looking at lasting, 20, 30, 40, 50 years. understanding that you have a partnership, you have a source of revenue, you have a program that you can use over the long haul is very important because these are not one-year decisions or two-year decisions. this he play out over decades. >> thank you very much. senator peters? >> thank you, madam chair. mr. gillmartin, i'd like you to talk a little bit more about kind of where we are in michigan and as i mentioned in my opening comments where we are in michigan is not all that different from every other state in the country and certainly in the midwest and in particular those of us who have a lot of change of seasons and a lot of wear and tear on roads as a result of weather, that's certainly a lot of states experience that which adds to the cost. perhaps if you could initially just paint a picture as to where we are in michigan in terms of infrastructure. you mentioned about some tax increases and other things that have occurred in the state, but what are you hearing from our

local cities and townships in terms of the extent of the problem that we face in our state? >> our transportation infrastructure in michigan is as bad as it's ever been and, senator pete rs, you are correct, when the spring thaw examination on occasion we start kicking up potholes and those types of things, we are all kind of used to that in northern states, but this year is a special kind of ugly on michigan roads. it has gone from a difficult experience to at times a frightening one. to drive down roads the information i talked about earlier, the quote from wwj is very real, i have experienced that myself. cars are pulled over all the time, i have had to pull off the street twice in the last two weeks to check my front end because of the impact of potholes that we have hit. a colleague of mine had a baseball-size piece of concrete cut through his grille last week. i had a member of my staff kind of balk at traveling to a

meeting out of the office because of perceived lack of safety on the roads. i didn't blame him. that's kind of where we are at. i can give you a lot of statistics. the recent civil engineering report that came out speaks to that, d minus. i said to a friend of mine the grades there looked like when dean wermer brought in the brothers from delta house to give their grade point averages in animal house. it was everything was bad. with he see that consistently throughout our state. i guess to go beyond that, i talked a lot in my testimony about the importance of reimagining our infrastructure because rebuilding what we have is one thing, but we see differences in economies, we see differences in how people are choosing to transport themselves, how they want to move around within regional economies and we've got to be building for new as well. so we're sort of at that space that i talked about where we are in a real jam because we have got to fix what we have and we

have to prepare ourselves for a new economy as we move forward. >> i'm going to want to talk more about that if we have time to talk more. as you are talking about the state of the roads which are horrible, i'm back every weekend and i can assure you everything you're saying is accurate. in fact, i think a couple weeks ago when i got home i was welcomed with a picture in the local newspaper that had a -- i believe it was the deputy sheriff standing in a pothole and it was up to his waist. now, that's a real serious michigan pothole. that will swallow a car if they get into that as well. >> yeah. >> we are talking about infrastructure here, roads and bridges but certainly infrastructure is much broader. i mentioned flint in my opening comments. tell me what else are you hearing from cities and villages that when we talk about infrastructure we can't have this just roads and bridges, we are talking about undertwrougro infrastructure, broadband internet to be able to connect. what are some of the challenges that you're hearing from our cities and towns? >> just that, senator. we see -- you know, we first

started seeing real problems in our core communities, in our communities that were suffering economically and we began seeing that -- that was maybe a decade or decade and a half ago and now we begin seeing it in our first core suburbs, in our growing areas as well. infrastructure is infrastructure. it doesn't matter what type of community you are in. and if you are older you are dealing with things right now. if you are a little bit younger in terms of your roads and bridges and your pipes, then you are to be dealing with it in the future. we have come to a point in michigan where this is a problem from east to west and north to south. it's very obvious in some of the urban areas where it's just more contained and the scale is larger, but i don't know a single local official anywhere in our membership that is not really pushing to do something infrastructurewise. again, that's just on the fix it end. when we start talking about clawing jobs and everything else we have to do different things

as we move forward. whether that's roads, whether that's water, the flint situation is something i've been working with a lot with the city council and mayor up there. it was tragic and the decisions -- and we could get into that forever, but a lot of that was driven by the fact there wasn't enough money anymore to support the infrastructure that was there. because i'm sure my colleagues on the panel will arrest the easiest thing to do is to build a road, the hard thing is to maintain it for 30 years and rebuild it 30 years later. when we find ourself in those positions without proper financing, without support from the federal and state government, poor decisions get made, maintenance gets deferred and we wind up in real problem areas. >> just quickly, you mentioned, i think, in your opening comment, too, it's not as if our state -- excuse me, our local communities, cities and villages, haven't been passing local millages. they've been taxing their local citizens, but that's simply inadequate given the magnitude

of the problem. >> we're tapped out. 80% of our millage was passed in this last election, that's in all cities, but many of our communities are at their millage limits. we have made changes at the state, we are bringing more money in, we need to do a better job there as well, but this effort requires all three levels of got, federal, state and local and we really need the federal government to step up and play that traditional leadership role that they've played for a long time. >> thank you. >> thank you. >> senator hassan. >> thank you, madam chair. good afternoon to our witnesses. thank you all for being here. i am reminded with the discussion we've been having of advice, a very wise businessman once gave me which is always make sure you differentiate between expenses and investment. when we are talking about infrastructure we are talking about investment so that over time we keep our expenses on things like maintenance and repairs lower. i wanted to talk for a minute

about our nation's bridges. infrastructure is obviously a serious challenge across the country, we are hearing it from all of you today, it certainly is in my home state of new hampshire. according to the american society of civil engineers, nearly four in ten of the nation's bridges are 50 years or older and each day there are 188 million vehicle trips over these aging structures. in new hampshire more than 400 bridges are listed as structurally deficient or in poor condition. i joined my colleague, senator shaheen, in introducing the safe bridges act which would provide much needed funding for repairing and replacing bridges categorized as structurally deficient. this bill would authorize an additional $2.75 billion annually through fiscal year 2020 to enable states to repair and replace their structurally deficient bridges. how important are efforts like

the safe bridges act in making meaningful infrastructure investments in our nation's future and do you see infrastructure as a matter of national security? i will start with you, mr. shneeweis. >> bridges are a huge challenge for us in nebraska. we have 11,000 bridges in our state. many of them the rivers all go this way so the bridges cross two times. >> right. >> if you were going to design the street network today it might look different with the side -- size of farms and stuff. in nebraska we started the county bridge matching program. even though those bridges aren't in our jurisdiction it's a huge transportation issue for us as a state. what we did was we -- we've tried to incentivize innovative thinking at the county level by encouraging folks to remove bridges where possible, they get extra credit for that, credit for putting a pipe in instead of

a bridge, it's cheaper to maintain. we're trying to spread best practices and provide innovation through an investment in state dollars. we've seen tremendous success just in the first year. we are pleased with it. >> what are your thoughts about infrastructure as a security issue? >> certainly it is when it comes to being able to get food to market and these sorts of things, in nebraska we think a lot about that, having alternate routes so if we have an incident on the the interstate we can still get goods to market and that's something that we evaluate as we plan. >> thank you. mr. gillmartin would you like to comment? >> i have not seen this particular bill but my state league and the national league of cities does endorse a multi-tiered, multi-pronged revenue structure for dealing with infrastructure across the country. so certainly it's in the spirit of what we are looking at doing. we have over 1,100 structurally deficient bridges in the state of michigan and it's right up there in terms of things that we need to deal with right now to

make sure that we move forward. you talked about being a security issue, it's certainly a commerce issue, but at its core it's just a flat safety issue which i think a lot of people are really starting to see as they drive over these bridges. in some cases in our state plywood is the only thing that stands between you and concrete falling down on your car and that's not in some some small tucked away burgh that's in our metropolitan areas as well as our small towns. >> thank you very much for that. ms. string, i wanted to turn to you for a minute because short line rail represents an important part of our nation's economy and i think it is often overlooked. it serves as a really important last mile connecting communities to the larger u.s. rail network. short line railroads operate roughly 30% of the national rail network. what will your industry, ms. string, prior to remain viable in my state of new hampshire and across the country? and what specifically can congress do to assist the short

line rail initiatives? >> thank you. and i appreciate the question because short lines operate 100% of your network, so we appreciate that. i think from our perspective the single most important thing that could touch every single short line in the united states is passing the tax credit or brace act. >> thank you for that. i have an additional question which i will submit for the record. i do want to make sure we have a complete record of the importance of the investments that states are already making into transportation infrastructure as we consider plans like the one we have seen from the administration because i think at the end of the day it's not realistic to expect either the private sector or states to do all the heavy lifting that's outlined in the administration's plan. i will submit that for the record. thank you, madam chair. >> thank you, madam chair. thank you for having this. a lot of people are not aware that we have kind of a dual

jurisdiction, we have the environment and public works committee and we have of course the commerce committee and they handle different parts of this, but there are a lot of things that are in common, successes we have had in the past that we want to draw on. i'd say to mr. cast our epw committee held hearings in the past to consider the innovative solutions for public sector funding, in fact, we've been doing now this -- this now for 20 years that i can attest to. in your testimony you highlight that many supply chain professionals are disconnected from the policy making process, but that things have improved with the establishment of the state freight advisory committees in the past act. it was the first time we have ever done that before. the question would be how should congress bolster these and other advisory committees to ensure supply chain professionals can be a part of the policy making process? what's the best way to make that

happen? >> i think most supply chain professionals if you were to sit down with them simply don't know how the mechanism works. and so broader education for supply chain professionals that we now do have these outlets and that we can leverage committees like that i think would be a huge step forward. as i mentioned in my system just the ability to immediately connect a supply chain professional with government to resolve very specific and very real problems has been a really big step forward. i would encourage you to do more of that. >> okay. misstrang, you are probably aware i was the original co-response rs of the administration to make the 45 g tax credit permanent. i haven't changed my mind. this committee knows the importance of the issue but it's worth being repeated. short line regards in a big deal in oklahoma, we have about 1,700 employees, over 3,000 miles of

track, so we rank up there pretty high and this year farm rail, short line railroad in western oklahoma received a tiger grant to upgrade and rehabilitate the major sections of track so they can continue to serve a host of customers in oklahoma. in your testimony you highlight time and time again that the application process for grant and loan programs at d.o.t. are overly complex or cumbersome for short line railroads. they really kind of favor the big railroads because they are all set up to do it with the personnel and all of that. so how can we update and modernize the process to make it more efficient for short line railroads than it has been in the past? >> thank you for that question and we do indeed have a very important arered in western oklahoma in farm rail which i know that you know their president judy petri well. i think that it is important for us to have processes that are simple and clear. short lines are small

businesses, the average size is 30 employees. we don't have staffs of professional grant writers nor do we have access to the money that it takes to get the professional d.c.-based grant writers to work for us. so instead if we have direct access to funds such as the eligibility in chrissy, that is huge, that way we don't have to find a state or local government to partner with us, we can just go directly, apply on our own. having a transparent and simple selection process is also very important to us so that we don't have to do exceedingly complex analysis of our projects where we don't really have the capability of doing so. >> we would like to help you in doing this. how do we go about getting this done? >> we would like to see chrissy fully funded, we think chrissy is a great program. we think that chrissy could be expanded to help more small businesses and i think having adequate funding -- funding

dri chrissy to its authorized levels would be very, very helpful. >> thank you very much. thank you, mr. chairman. >> thank you very much, chairman and thank you to senator peters as well for this important hearing. i guess i will start with tiger grants, something that's been important in our state. mr. gillmartin why is it important that we continue to fund programs like tiger and cig that support all modes of transportation? >> it's important because that's what the public is demanding moving forward. if you look at regional economies around this country and even throughout the world the demanding different ways -- different modes of transportation, whether that be by bus, by rail, by car. we see so many different changes happening technology-wise that we have to have flexibility. the tiger grants and programs like that provide, and we have to make sure we are looking at the entirety of a system. the transportation system within a city, within a region, break

it down into a neighborhood is probably the number one way that you can incent people enjoying where they are at and more and more business activity within that particular area. so those programs are very important to us. >> thank you very much. mr. cass, welcome. i know he was introduced before but he was from ch robinson which is one of 16 fortune 500 companies headquarters in minnesota and we are pretty proud of the company of c.h. robinson. i know senator imhoff was having about the importance of the national level involvement with the advisory committees and the feedback you're getting but i want to ask you about the efficient flow of freight across america's multi-mow dal transportation system, how important that is to the competitiveness of our economy. when shippers are delayed in major congestion and outdated infrastructure products count

arrive on time, costs for consumers go up. in addition to addressing the freight bottle next what investments should be made to improve supply chains and the flow of freight? >> in terms of investment in supply chain and what can help the u.s., the vast majority of freight with respect to my colleagues here, the overwhelming majority of freight here in the united states is still shipped via truck, period, end of story. so with that i think when you look at the bottlenecks in the united states they are in the major cities. in my testimony i pointed us to the report of the top -- the top bottlenecks within the united states. so knowing that we have limited funds and knowing that we can't

do anything and if we did have to pick a priority what i would do is i would point us to that report and say, let's go after that and let's fix surface transportation. the last thing i would add is the businesses in here in the united states are fully aware that other countries are investing in a way that is more commensurate with the economic growth goals and we are not. >> exactly. >> they are concerned we are not going to be competitive, they are concerned we are going to fall behind. >> i like to remind me if we had done one point less of a tax reduction it would have been $100 billion as part of the tax bill, each point is $100 billion that could have been used for infrastructure or if we had taken some of the money from overseas but i'm not going to cry over spilled milk or spilled taxes and try to focus going forward here. i bet you, ms. strang one of your answers for bottlenecks might be better rail and

connections and things and i appreciate the short line and the work that you do in my state as well. i just met with some of your people, so thank you. anyone else want to add anything about what you think we should be doing? i've always supported a public/private partnership, i'm concerned about only doing that for rural areas, we are not going to have a toll road in minnesota that we have to have a combination of direct funding as well as public/private. >> well, i would just add i think it's very important that the public and private sector are coming to the table together to solve these problems and it's not just trucks or rail, it's all. it's about making it cheaper for businesses to operate. that's what we're trying to do in nebraska. if we can understand our supply chain and how to improve connections we can make it cheaper for nebraska businesses to do business and that's our goal. i think it's everything. >> okay. >> so if i may we are a system so trucks and rail has to work together in order for us to serve our country adequately.

so for that -- from a short line small business perspective i would say it's two things, it's getting the investment tax credit passed which benefits every single short line and their ability to rehabilitate their track and the third is keeping truck size and weight constant. this is not a time for big changes in truck size and weight or other things that could upset the balance of our nation's transit system. >> thank you very much. >> thank you, senator. we will have a second round of questions and if other members of the committee have time to join us they can head this way now. mr. cass, you were speaking about the bottlenecks and how we address that. looking ahead, though, e-commerce is having a big impact on supply chains and it's requiring really greater demand, faster shipping out there. can you elaborate on the impact e-commerce is having on the

great industry, especially in dense areas? >> yes, i would be happy to. so an e-commerce supply chain is going to be a supply chain typically that is rapid fire, very little lead time, shorter distances and smaller size of goods. as you know, most of e-commerce is going to your front door. what that means is that we are shifting the flow of trucks and transportation from our nation's highways into our neighborhoods. so i think from an infrastructure perspective we really need to think about the volumes and the safety concerns associated with the increased velocity of packages to the front door. >> and you also talk about the confusion that shippers face when they're trying to decide what data is relevant when they choose a carrier. how would a national hiring standard clarify and stream line those hiring decisions for

shippers and third party logistics providers? >> sure. in the main -- first you have to consider that there are thousands upon thousands of truckload carriers today. it's a very fragmented marketplace, i think that's a very good thing, it gives the united states competitive advantage. with that, though, there isn't -- there isn't one single place that a shipper can go to to say did fmcsa endorse or authorize this carrier? it's information overload. so i think stream lining the process, putting it in a central location will make it easier to ensure people are using carriers that the fms/csa intends us to. >> director shneeweis, as congress looks forward to getting started here on an infrastructure package, can you elaborate on the importance of identifying freight priorities

as part of our infrastructure and do you believe there are ways that the federal role in freight policy can be improved? >> well, i think if there is -- if there is one clear role for the federal government in terms of transportation it's on the freight side because it transcends our state borders, as you said it's in our neighborhoods now. understanding that piece of it i think the conversations around freight plans we completed our first freight plan this year, it's very helpful as we move forward and for us it's about considering the economic impacts of our projects as we select them and not only what they mean to communities but what they mean to the businesses and the freight community. >> thank you. >> ms. strang, you talked about the concerns that the american short line and regional railroad association has about the railroad rehabilitation and improvements financing for the r riff program. can you eye light the differences between that program

and the tiger programs that are out there. and you did indicate you supported those in my testimony. am i correct on that? >> yes, we do. we very much support chrissy, infra and the other programs that have been created. one of the difficulties with the riff program is that it is a loan, it's not a grant, it has to be repaid. the other issue with riff is that it has a credit risk premium that has to be paid up front. this can be a daunting challenge to a small business that has to get the financing to pay that credit risk premium up front whereas for a grant it is a grant and they are happy to work -- you know, if they need to provide matching funds they're very happy to try to do so if that's required on the loan side, it takes a very long time to get a loan. we have six loans in the process now that have been in the process now for 18 months. so while there are efforts under way at the credit bureau, at d.o.t., to improve the process and we greatly appreciate that,

it's still a small number of loans that are in process. there is no certainty and, you know, we have had loans that were held up for several years over, you know, buy america provisions for something that was refinancing a used piece of equipment. so it's just kind of been frustrating. >> you've mentioned a number of times that our short lines are small businesses and some have 30 employees or less. as small businesses do they meet the requirements for any kind of loans under the small business administration or do they -- or do they work with local banks in trying to get loans? >> they usually work with local banks in trying to get loans because they are known -- small businesses known their communities, their community bankers know them, they have relationships. so frequently it may be easier for them to obtain financing

through a local bank or commercial operation in their neighborhood than it is to go to a larger federal funding source. >> do you know if they would qualify? i'm just -- out of curiosity. >> i believe they would but i would have to check to be certain. if i may, i will get back to you with that. >> okay. thank you. senator peters. >> thank you, madam chair. i want to drill down into the president's proposal and get a sense of where the panel is on some of these issues. he has talked about $1.5 trillion of additional money for infrastructure, however, only $200 billion of that $1.5 trillion is direct medical money so the rest is coming from some sort of leverage. he talks about public/private partnerships which means a private entity needs a revenue stream and that means toll roads or perhaps just state and local bringing up the rest, basically a mandate for our state agencies

and located at governments to come up with the rest. i have heard that we are stretched, mr. gillmartin you mentioned in michigan, for example, they are near their taxing authority. toll roads would likely be a big part of this. mr. shneeweis, do you have toll roets ro eds in nebraska? i'm not aware? >> no, sir, not at the moment. >> do you believe toll roads are a good thing for your state? >> i would say it's nothing that we have put into use in nebraska in the past. i think my sense is that nebraska ans would not support putting tolls on a road that previously did not have them, however, i do think that there could be opportunities if there are facilities that don't currently exist today that could maybe provide a movement that we can't now make. so if you're providing that extra benefit i think i'm not personally opposed to exploring the idea of tolls. i do not think it's going to save all of our infrastructure needs in nebraska, but to say that it's not a tool that might be used just because we are a

rural state, i wouldn't go that far. >> but you are saying it's unlikely the people in nebraska would support a toll on a road that is currently -- currently been constructed? >> that's my opinion, yes, sir. >> mr. gillmartin, we do not have any toll roads in michigan as well. what do your members this i about toll roads? >> toll roads is something that michigan, as you well know, senator peters, has always stayed away from. part of that is geography, we are two peninsulas and we don't have a lot of the cross-through traffic that a lot of the mid continent states have. basically a toll would be placed upon someone who either lives or does business in the state and there are other vehicles to look at, no pun intended, to try to figure out a better way of doing that. i don't see tolls being an important thing or a likely tool that michigan would use, perhaps in other places it makes sense, but i don't -- i don't see that happening in our state. >> sir, you are talking about public private partnerships,

it's not really a solution it sounds like for michigan and probably not a solution for nebraska. mr. kass, you, i believe, mentioned actually in your testimony the concern about toll roads for your industry. could you elaborate on that, please? >> sure. i will answer the question in two parts. first, i think what the room should know is that when you are talking about major businesses, large shippers here in the united states, at this point in time almost all of them have deployed a technology platform to optimally route the way a shipment should ship. as have the carriers. so i think that with that routing if they were designing a route and there was an option of a toll road or a road that did not have a toll and they could still make their delivery i think what you would do is you would push large vehicles on to local roads and i don't know that that's a good idea. i think secondarily if you are a

carrier and in particular small carrier the majority of carriers in the united states operate between one and four trucks so they are small businesses, too. as has been a common theme on this panel they don't have a lot of administrative staff. i think that the whole lane would mean they would add extra administrative burden to the invoicing process and i think that that would flow back up upstream to the shipper. so i don't think it would be popular with the carriers or the shippers. >> you mentioned that trucks would shift to other routes, that you would be able to identify where the tolls are and your apps that are on our phone can tell us avoid all tolls, it's pretty easy to do. so you would employ that as far as commercial trucking but how would you deal with the fact that for long haul shippers they are going to be on pager employees, it probably doesn't make sense to do secondary roads. >> i think it's only an option. they will do the analysis, they

will look at the options and when they can take a lower cost route they will, but certainly if it doesn't make sense, no, they will travel on the highways. >> ms. strang, you mentioned the importance of tiger grants to short rail and i'm very pleased in michigan we have a number of short rail carriers as well because of our geographical location we do have the class one that run across the bottom of the state but in order to get to northern michigan, the u.p. we rely on short line. thank you for the work you do in that area. tiger grants are important. i'm sure you are aware in the president's budget he calls for eliminating tiger grants. what would that do to short line rail? >> well, short lines have been recipients of tiger grants and it has greatly improved our ability to upgrade our track. if you think about it we connect with the big class one railroads that use heavy cars, 286,000 pounds. we have to be able to upgrade our track and our bridges to be able to handle these cars and to

handle class one six-axel locomotives in order to serve our rural areas of the country and to serve small shippers. >> thank you. >> thank you, senator peters. i would like to thank the panel members for being here today for this important discussion and providing us with the information you did. the hearing record will remain open for two weeks and during this time senators are asked to submit any questions for the record. upon receipt the witnesses are requesting to submit their written answers to the committee as soon as possible. once again, thank you to our panel of witnesses. thank you, senator peters. we are adjourned.

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>> have you had any talks with him or with anybody else about your ideas? >> no, i haven't spoken to -- to speaker ryan. obviously i talked to my colleagues here in the senate about migrate bill. >> okay. >> it's populist. >> if there were some sort of permitting reform measures that were to emerge, how would that take shape? i mean, what committee would it come out of?

what would the legislation look like? >> here again, there's already a process in place and you see nebraska has put in to be accepted in that. i think that's important to have that nepr process i would say condensed because you wouldn't have the duplication there and you have the states assume it for the design and the planning and the construction. the director said other states obviously have already moved forward on it, we have done it somewhat in nebraska. the way i -- the way i view this is this is how you're really going to stretch dollars you already have, which can help expand that so you don't have to look for new money always. >> sure. >> okay? >> all right. >> thank you guys. appreciate you being here.

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forbes was among a group of libertarian business leaders to took part at a fanl at liberty c con hosted by students for liberty. mr. forbes spoke for about a half an hour. >> so up now we have an all star panel with some amazing heavy hitters from the business world. we have steve forbes, chairman and editor in chief of forbes media, a global media company that has over 5 million readers worldwide, patrick byrne, the coo of overstock.com which in 2014 became the first major online retailer to accept bitcoin, he is the ceo of did he soto, inc., i was delighted to hear him speak recently at a round table about a new project he is in partnership with about dealing with property rights and titling on the block chain. really exciting stuff. he is the ceo of t zero as well.