Mr. Chairman, Senator Fitzgerald and members of the Committee, thank you very much for allowing me to testify on behalf of the National Stone, Sand, and Gravel Association (NSSGA) at this hearing examining the State of Illinois’ transportation needs in preparation for reauthorization of the Transportation Equity Act for the 21st Century (TEA 21).

My name is Richard Feltes. I am co-owner with Timothy Feltes of the Feltes Sand & Gravel Co. in Elburn, Illinois. We represent the third generation in a family business that was started in 1920 by our Grandfather and Great Uncle. Our company currently employs 35 full time people. Our business operation is located 40 miles west of Chicago in Kane County, Illinois. A major part of our business is supplying sand & gravel products to concrete & asphalt producers for use on major highway projects in our market area.

Currently, I serve as Second Vice Chairman of the National Stone, Sand & Gravel Association and Chairman of the Association’s Government Affairs Division. NSSGA represents the nation’s aggregate industries – producers of crushed stone, sand and gravel, as well as suppliers of equipment and services to aggregate producers. NSSGA is, by volume of product, the largest mining association in the world, according to the U.S. Geological Survey (USGS). Our 850 member companies turn out 90 percent of the crushed stone and 70 percent of the sand and gravel consumed annually in the United States. During 2002, a total of about 2.73 billion metric tons of crushed stone, sand and gravel valued at approximately $14.6 billion were produced and sold in the U.S. The aggregate industry workforce is made up of about 120,000 men and women across America.

Just to provide perspective, there are 10,000 construction aggregates operations nationwide. Virtually every congressional district is home to a crushed stone, sand or gravel operation. Proximity to market is critical due to high transportation costs, so 70 percent of our nation’s counties include an aggregates operation.

Construction aggregates are used primarily in asphalt and concrete. Ninety-four percent of asphalt pavement is aggregate; 80 percent of concrete is aggregate, whether used in pavement, buildings, dams, water and waste water treatment plants and the like. About 10 tons of aggregate per person are consumed annually in America. Every mile of interstate consumes 38,000 tons of aggregate; about 400 tons of aggregate are used in construction of the average home.

While I appear this morning representing the aggregates industry, I also appear as a member of the Board of Directors of the Illinois Association of Aggregate Producers (IAAP). IAAP is a member of the Transportation for Illinois Coalition (TFIC), a broad coalition of Illinois associations and labor organizations, which was organized to speak with one voice for all of Illinois regarding transportation funding needs. The TFIC focuses on principles and program concepts that will enable transportation leaders to move forward with a common purpose to obtain maximum funding to meet Illinois’ infrastructure needs. (TFIC mission statement and guiding principles attached.)

Also, I should note NSSGA is a member of the Transportation Construction Coalition (TCC) and Americans for Transportation Mobility (ATM) – the two premier national coalitions dedicated to reauthorization of our country’s surface transportation system.

We seek this committee’s help to assure TEA 21 is reauthorized before it expires on September 30, 2003. Otherwise, many of the benefits realized under TEA 21 and its predecessor legislation, ISTEA (the Intermodal Surface Transportation Efficiency Act of 1991, which rewrote federal transportation policy, are in danger of being lost.

The federal-aid highway program is one of the U.S. government’s most successful programs. Since 1956, and in partnership with the states, it has financed construction and upkeep of the largest and safest national network of highways and bridges in the world. No program is more critical to the economy of Illinois than federal funding for transportation needs. From its origins as the railroad capital of the nation and its development as the hub of major east-west interstate highways, to hosting the world’s busiest airport, Illinois has served as the central conduit for the nation’s commerce. Thus, the economies of Illinois and the nation are inextricably linked. Illinois’ transportation system plays a pivotal role in the nation’s ability to move goods and people because of its geographic location and extensive road, rail, airport and waterway network.

Consider this:

* The U.S. transportation construction industry has built 3.9 million miles of American roads and highways and more than 5,000 airports.

* The U.S. highway and bridge infrastructure has an asset value of almost $1.4 trillion, and publicly financed highway construction directly or indirectly is responsible for 2.2 million American jobs.

* More than 11 percent of the U.S. Gross Domestic Product is spent on transportation.

* Aggregates directly contributed nearly $43 to the Gross Domestic Product in 2001.

* The aggregates industry contributes $37.6 billion to the Gross Domestic Product in 2001.

* For every $1 billion spent on highway construction, 47,500 jobs are generated each year.

* In 2001, the aggregates industry supported 284,090 jobs in all sectors of the economy with personal earnings totaling $10.74 billion.

* Every dollar invested in the nation’s highway system yields $5.70 in economic benefits to the nation because of reduced delays, improved safety and reduced vehicle operating costs.

* The federal highway program provides more financial resources for environmental and community enhancements than any other public or private effort.

However, Mr. Chairman, in order to preserve the benefits to the country from a robust and efficient highway system, we can’t ignore that the needs of the system continue to increase. Consider the following:

* More than 40,000 people die and 3 million are injured each year on the nation’s roads. About 14,000 of those deaths are attributable to substandard road conditions, and, thus, avoidable. Vehicle crashes are the leading cause of death for Americans 6 to 28 years old.

A total of 8,533 people died on Illinois’ highways from 1996 through 2001.

* The annual economic cost of motor vehicle crashes is $230 billion per year, or $819 for each resident, for medical costs, lost productivity, travel delay, workplace costs, insurance costs and legal costs.

Total cost of motor vehicle crashes to Illinois was $3.8 billion or $308 per capita.

* FHWA data shows that congestion is worsening on all major U.S. roads; 36 percent of America’s urban roads are congested.

42 percent of Illinois’ major urban roads are congested. It is well documented that highway congestion in the northeastern portion of the state is the third worst in the nation.

* Traffic congestion now costs Americans more than $67 billion each year – the value of 3.6 billion hours of delay and 5.7 billion gallons of excess motor fuel consumed.

* 32 percent of America’s major roads are in poor and mediocre condition.

34 percent of Illinois’ major roads are in poor and mediocre condition.

* 28 percent of America’s bridges are structurally deficient or functionally obsolete.

19 percent of Illinois’ bridges are structurally deficient or functionally obsolete.

* 84 percent of the $358 billion worth of commodities delivered annually from sites in Illinois are transported on the state’s highways.

Maintenance of the nation’s highways is continual and increasingly costly. Changes in the program, combined with inflation and ever-growing highway traffic, have resulted in investment that is not sufficient to maintain the physical condition of the overall system, let alone improve it.

The problem has been that under TEA 21, funds have not gone into highway and road maintenance. States have shifted funds into large cost capacity expansion projects as well as into peripheral construction activities, such as sidewalks, rest areas, and historic preservation. The net result is that highway and road maintenance has not improved as much as policymakers have wanted. Accordingly we strongly support the President’s budget proposal to spend $1 billion a year from the Highway Trust Fund on highway maintenance and infrastructure performance that are “Ready to Go.”

Reauthorization of the federal surface transportation law must focus on providing sufficient funding to maintain the nation’s highway system and reduce the congestion that is clogging our highways, thus wasting time and energy, and diminishing air quality.

NSSGA will not be involved in the formula controversy because of the diversity of its membership. One fact, however, cannot be denied. Unless federal highway investment is increased, no state will succeed in improving its share of transportation funding.

According to the latest federal government data, around $60 billion is needed annually just to maintain the current highway system and over $100 million to improve it. In response to these quantified needs of the system, NSSGA developed its recommendations for TEA 21 reauthorization. (Copy attached)

In summary, NSSGA made the following recommendations for TEA 21 reauthorization.

Recommendation: The TEA 21 reauthorization bill must provide Federal funding to preserve the national highway system in an amount that is sufficient and can be justified economically. We join with the TFIC in calling for increased funding levels for our national transportation system.

NSSGA supports the recently issued proposal of House Transportation and Infrastructure Committee Chairman Don Young for a $60 billion a year highway program including an increase in the highway user fee; both prospective and retroactive indexing of the highway user fee to the Consumer Price Index; restoring Highway Trust Fund interest; repaying the Highway Trust Fund the $5.2 cent-per-gallon gasohol user fee differential; eliminating fuel tax evasion; and, drawing down the trust fund balance for a total of between $111 and $125 billion annually.

The federal highway program is a user-funded program. U.S. motorists generate about $31 billion a year in revenues that go into the Federal Highway Trust Fund. Illinois’ motorists generate about $1.2 billion a year in revenues that go into the Federal Highway Trust Fund. The Revenue Aligned Budget Authority (RABA) is a budgetary mechanism incorporated in TEA 21 to more closely align gasoline user fee receipts with investments. Retaining the highway user fees is absolutely essential to the federal highway program. NSSGA will oppose any efforts to reduce or suspend the federal highway user fee.

Also, NSSGA opposes any diversion or redirection of highway user fees or RABA funds. While NSSGA supports initiatives to prevent the dramatic swings in RABA monies experienced over the past several years, NSSGA will oppose efforts to manipulate RABA funding from core highway programs. NSSGA will oppose attempts to divert or redirect highway user fees from programs other than highways and transit. NSSGA supports maintaining the current highway/transit funding ratio of 80/20.

In addition to the aforementioned revenue raisers proposed by Chairman Young, NSSGA supports increased use of innovative financing mechanisms, including the possibility of establishing a Highway Funding Corporation along the lines proposed by the American Association of State Highway Transportation Officials (AASHTO). Enhancing innovative financing tools already available including State Infrastructure Banks (SIBs), and the Transportation Infrastructure Finance and Innovation Act (TIFIA), should also be thoroughly examined. We need to look at tax exempt financing for public-private partnerships, too.

Recommendation: Continue and strengthen the firewalls established by TEA 21 between incoming federal highway user fee revenue and annual federal surface transportation investment, including the Revenue Aligned Budget Authority (RABA) provision.

TEA 21 addressed the shortfall in federal highway program funding by establishing for fiscal years 1999-2003 budgetary firewalls to protect highway funding and a firewall to protect transit spending. Spending for programs with firewalls may not be reduced in order to increase spending for other discretionary programs. It is imperative that reauthorization maintains the funding guarantee and budget firewalls contained in TEA 21.

Recommendation: Increase state flexibility to use funding for highway construction.

Constraints on states from using funds for highway construction should be eliminated to allow construction on non-national highway system roads that will reduce traffic congestion and increase safety.

According to the FHWA, there were more than 3.95 million miles of public roads in this country in 2000. FHWA has stated that more than three-quarters of the lane-miles in the U.S. are rural. While this includes rural roads on the National Highway System, there are also hundreds of thousands of miles of rural two lane local roads that carry significant amounts of local automobile and truck traffic. Vehicle miles traveled on these rural roads constitute nearly 40 percent of the national total, meaning that much of America’s commerce and individual movement occurs on these rural roads.

Statistics highlight the fact that rural roads and highways are considerably more dangerous than urban roads. A Government Accounting Office (GAO) report noted that rural roads have a fatality rate that is six times greater than that of urban interstates. In the post-interstate era, increased attention must be given to targeted road improvements that have a high likelihood of reducing crash potential.

States should have the flexibility to enhance safety on rural and local two-land roadways. In addition, federal investment in our rural road and highway infrastructure must be increased not only to enhance safety, but also to ensure continued rural economic development.

Recommendation: Facilitate the construction process by removing barriers to innovative contracting techniques.

Certain transportation infrastructure projects may be well suited for innovative project delivery methods that will serve to speed up project planning, design, and construction. States and local governments should be allowed flexibility in using innovative contracting and procurement methods that acknowledge one-size-fits-all procurement and contracting does not recognize the different and unique characteristics of each state’s highway program.

Recommendation: NSSGA supports studying the creation of dedicated truck lanes/heavy vehicle lanes as a method of improving public health and safety, extending the life of surface infrastructure resulting in lower maintenance costs, and increasing productivity and efficiency leading to continued growth in national and regional economics.

TEA 21 reauthorization should include provisions to foster the development of self-financed “truck only/heavy vehicles lanes” to encourage and allow the use of interstate highway medians, air and tunnel right-of-ways for construction of these lanes. Truck/HVL only lanes should be eligible for federal funds including Congestion Mitigation and Air Quality Program (CMAQ) and the National Trade Corridor and Border Infrastructure Development Program.

Recommendation: NSSGA supports developing a mechanism for recognizing/crediting air quality improvements and congestion reductions. The air is getting cleaner in major urban areas even though highway travel in the U.S. has increased substantially.

In fact, vehicle travel on U.S. highways increased 28 percent from 1991 to 2001. U.S. population grew by 11 percent between 1990 and 2001. Vehicle travel on Illinois; highways increased by 21 percent in the same time period. Illinois’ population grew by nine percent between 1990 and 2001.

In spite of increased travel, an October 1999 Environmental Protection Agency (EPA) Report found that since 1970, motor vehicle emissions declined dramatically. The report found today nearly 80 percent of the hazardous air pollutants released nationwide come from non-transportation sources. By implementing new and innovative technologies, design, and construction methods, and undertaking major recycling programs, the transportation sector has played a key role in the air quality improvements realized over the past three decades. A mechanism should be developed to acknowledge/credit these pollution and congestion reductions.

Recommendation: NSSGA supports streamlining of the entire construction process, from concept through environmental review and permitting, to acceptance by State agencies.

TEA 21 mandated that the U.S. DOT and other affected federal and state agencies develop coordinated efforts and time periods for concurrent review of items required by the National Environmental Policy Act (NEPA) for projects, as well as other environmental analysis, reviews, opinions, permits, licenses and approvals that are required.

NSSGA supports Administration streamlining initiatives and urges that TEA 21 reauthorization mandate promulgation of new regulations that carry out the statutory intent of Congress to establish firm deadlines for streamlining and expediting the environmental review process that now can take as long as 14 years. A bench-marking program should be implemented in order to track progress.

Recommendation: NSSGA supports reform of the transportation conformity requirements with the federal Clean Air Act to eliminate the loopholes that have been used by anti-growth groups to slow or stop already approved and environmentally sound highway projects.

Due to provisions in the Clean Air Act, the Federal-Aid Highway Act, ISTEA, and TEA 21, the overall conformity process involves various states, local and federal agencies. If an area is out of conformity, federal highway funds are cut off. As a result, an areas’ Transportation Improvement Program (TIP) cannot include transportation construction projects that will result in emissions that exceed the Motor Vehicle Emission Budget (MVEB). The reform objective should be that once a project is approved, it should not continuously be challenged on the basis of what was known or not known at the time of approval since a highway projects is a multi-year construction project and date will be routinely updated.

Recommendation: NSSGA supports reconstitution of the national highway research program that works in partnership with all constituencies of the highway community.

A reconstituted national highway research program should leverage the individual industry constituent efforts and work to develop a coordinated national program focused on delivery of a long-lasting national surface transportation system that is safe and environmentally sound.

Since the major component of highways is aggregates, a specific allocation should be directed to aggregate research through the International Center for Aggregates Research at the University of Texas with an Adjunct at the Texas A&M University. A major aggregate research effort is needed in four principal areas: 1) to extend the use of locally available materials; 2) to define performance and determine key material properties; 3) to develop methods to measure these properties; and 4) to then develop methods and models to predict performance and evaluate impact of variations in design and products.

The federal-aid highway program has become more than just a highway and roads construction program. A safe and reliable transportation system is vital to the nation’s future economic growth, international competitiveness, homeland and national security – it serves as the foundation for our American quality of life. The events flowing from September 11, 2001, the lagging economy and documented under funding of highways point to the need to boost investment in our national transportation system. Although ISTEA and TEA 21 significantly increased highway investment, nothing stands still. America’s highway and transportation infrastructure is badly in need of upgrading. We cannot ignore the fact that 14,000 fatalities are attributed each year to hazardous road and bridge conditions or the congestion clogging our cities, concerns that can be addressed only if we maintain and improve our national highway system.

Again, thank you, Mr. Chairman, for this opportunity to testify. I will be pleased to respond to any questions.