1. Remarks at the2007 Border to Border Transportation Conference Mary Phillips Associate Administrator, Policy and Governmental Affairs Federal Highway Administration April 18, 2007

2. Texas Apportionments

3. FY2007 Discretionary Grant Programs($ millions)

4. The President’s Budget Request for FY2008 • $67 billion for the Department of Transportation • $40.3 billion for the Federal-aid highway program, including: • $32.7 billion for apportioned programs • $6.9 billion for allocated programs • $430 million for research • $385 million for administrative expenses • $175 million for the Congestion Initiative • Forgoes RABA of $631 million

5. Status of the Highway Trust Fund

6. Status of the Highway Trust Fund

7. Outlay Rates for Obligated Funds

8. National Surface Transportation Policy and Revenue Study Commission (“1909” Commission) • 12 members, chaired by the Secretary of Transportation • Includes representatives from the trucking and rail industries, a shipper (Office Depot), academia, a State DOT Secretary, an MPO, and a public policy consultant. • Report will be submitted to Congress by December 31, 2007.

9. National Surface Transportation Policy and Revenue Study Commission (“1909” Commission) • Mission • Conduct a comprehensive study of – • The current condition and future needs of the surface transportation system; • Short-term sources of Highway Trust Fund revenues; • Long-term alternatives to the fuel tax as the principal source of revenue; • Revenue sources to fund the long-term needs of the surface transportation system; and • Revenues likely to be available in the future from current Federal use taxes, given possible changes in fuel use, travel alternatives and changes in vehicle use.

10. National Surface Transportation Infrastructure Financing Commission (“11142” Commission) • 15 members, with the Chairman elected by the members • Includes financial experts, and representatives from the trucking and motor coach industry; city, county, and state (TX Representative Mike Krusee) government; and a former Senate staffer. • Report due to Congress within two years of the first meeting.

11. National Surface Transportation Infrastructure Financing Commission (“11142” Commission) • Mission • For the period from August 10, 2005 through 2015, consider– • Revenues currently flowing into the Highway Trust Fund; • Revenues likely to be available in the future from current Federal use taxes, given possible changes in fuel use, travel alternatives and changes in vehicle use; • Whether additional revenues are needed to meet highway and transit needs; • Alternative funding approaches and the revenues such alternatives would yield; and • Exempting all or a portion of motor fuel from the Federal fuel tax if the State elects not to receive some or all of its Federal highway funds.

12. Congestion Initiative • Cost of highway congestion in 2003 • 3.7B hours of travel delay, and 2.3B gallons of wasted fuel… • …for a total cost of $63B • Total costs would be much higher if unreliability, inventory and environmental costs (among others) were included

13. Cost of Congestion in Wasted Time and Fuel in the Largest Urban Areas

14. Causes of Congestion

15. A Six Point Plan • Execute “Urban Partnership Agreements” with 1-5 major metro areas • Encourage States to consider enacting public private partnership laws • Develop new interstate highway and rail capacity through a “Corridors of the Future” competition • Reduce bottlenecks at major freight gateways, including Southern California • Find and implement solutions to border congestion • Accelerate major airport capacity projects, reform airport pricing policies and overhaul the air traffic control system

16. 1) Execute “Urban Partnership Agreements” with 1-5 major metro areas • Develop an Urban Partnership Agreement with 1-5 “model” cities who agree to pursue the following policies: • Congestion pricing/high occupancy toll (HOT) lanes • Bus Rapid Transit (BRT) • Telecommuting and flex scheduling • Technological and operational approaches to improve system performance • Support DOT’s urban partners with resources including: • Funding from DOT’s Intelligent Transportation Systems Congestion Mitigation Model Demonstration (ITS-CMMD) Program • Funding from FHWA’s Value Pricing Pilot Program • Potentially-expedited project delivery • DOT’s expertise and dedicated staff resources

17. 2) Encourage States to consider enacting public private partnership laws • Develop an organized effort to encourage states to enact legislation enabling them to enter into infrastructure agreements with the private sector • Overcome institutional resistance to reform through education, demonstrations and relationship building with state agencies and private investors/developers • Utilize existing Federal program authorities and SAFETEA-LU implementation to encourage formation of public-private partnerships

18. 3) Develop new highway and rail capacity through a “Corridors of the Future” competition • Accelerate development of multi-state, multi-use transportation corridors by: • Promoting new financing and operational models • Providing more certainty in the environmental review process • Support this corridor development by: • Fast-tracking corridor projects in SAFETEA-LU that are likely to reduce congestion • Running a competition to select 3-5 major corridors in need of long-term investment • Convening a multi-state process to advance project development

19. 4) Reduce bottlenecks at major freight gateways, including Southern California • Bring together Federal, State, local, and private-sector officials to forge consensus on solutions to relieve freight bottlenecks • Collaboratively and expeditiously address regional goods movement and related community and environmental challenges

20. 5) Find and implement solutions to border congestion • Identify and pursue innovative solutions that maximize efficiency of border facilities while maintaining motor carrier safety • Work with State, local, and private sector stakeholders – to accommodate increased demand at the most congested bridges and highways on our borders

21. SAFETEA-LU Earmarks