Oversight Hearing on Delays in Funding Mass Transit

Prepared Testimony of Mr. John H. Anderson, Jr.
Director of Transportation Issues
Resources, Community and Economic Development Division
General Accounting Office

10:00 a.m., Tuesday, April 25, 2000

Mr. Chairman and Members of the Committee:

We are pleased to be here today to discuss labor protection arrangements for transit employees. As you know, the Transportation Equity Act for the 21st Century (TEA-21) authorized about $42 billion for transit programs for fiscal years 1998 through 2003. Funds are provided through grants to states and local/regional transportation authorities for the construction, acquisition, improvement, and operation of transit systems. But before the Department of Transportationís Federal Transit Administration (FTA) can release funds to grant applicants, the Department of Labor (DOL) must certify that adequate arrangements (commonly called "section 13(c) arrangements") are in place to protect the interests of employees affected by the assistance. Labor protection requirements were included in the 1964 Urban Mass Transportation Act to protect employees who might be adversely affected by industry changes resulting from federal assistance, specifically through technological advances or the transfer of transit operations from private companies to the public sector. The provisions were not designed to improve the positions of transit employees, but to protect against a worsening of their positions and preserve existing rights and benefits. Among other things, labor protection arrangements are required to include provisions for continuing collective bargaining rights. As part of the certification process, DOL sends recommended labor protection terms and conditions to relevant union organizations and the grant applicants for their review.

Because of congressional concerns about the timeliness of DOLís certification process, the Department established a goal, effective in January 1996, of certifying grant applications within 60 days. You asked us to review a number of issues related to DOLís section 13(c) responsibilities, including its timeliness. Because we only recently initiated our work in response to your request, we have not yet evaluated the impact of section 13(c). Our testimony today is based on preliminary work and will (1) describe DOLís process for issuing certifications for grant applications and discuss how DOL defines and calculates how long it takes to issue certifications and (2) discuss trends and factors affecting the length of DOLís certification process. I should note, Mr. Chairman, that we have not yet contacted any labor union officials or local/regional transit officials to obtain their views on section 13(c) requirements.

Following are the highlights of our work to date. First, we will discuss our preliminary observations concerning DOLís certification process.

Figure 1: Applications Requiring Referral Compared With Number Not Referred

Source: GAOís presentation of data from DOL.

Overall, DOLís data indicate that the Department has met its 60-day processing goal for 98 percent of the applications processed since January 1996. However, we note that the 60-day processing time does not include the time from DOLís initial receipt of an application until DOL refers labor protection terms and conditions to the applicable parties. In general, DOLís timeliness depended on whether an application was complete and whether any of the parties objects to the terms and conditions recommended by DOL. In this regard, we have identified some trends and factors that could affect DOLís overall certification time.

Figure 2: Objections Compared With the Number of Objections Found to Be Valid

Source: GAOís presentation of data from DOL.

If DOL decides all objections are not valid, it issues a certification based on the original terms it recommended. If this is not acceptable to the applicant, it can forgo federal assistance. We were not able to determine how often applicants chose this option because neither FTA nor DOL tracks this information.

Figure 3: Applications Exceeding the 60-Day Processing Goal, by State

Source: GAOís presentation of data from DOL.


In summary, Mr. Chairman, DOL states that it is meeting its 60-day goal for about 98 percent of the applications processed. It should be noted that this statistic does not include suspended grant applications, which are apparently increasing, and does not consider the increasing time DOL takes to initially review and refer grant applications before the clock starts running on its 60-day goal.

As we progress further with the work you requested, Mr. Chairman, we expect to focus on your question about the impact of section 13(c) requirements on transit grantees. In addition, we will address the following questions in more detail: (1) Why are an increasing number of grant applications being suspended? (2) What can DOL or FTA do to help nontraditional grantees comply with labor protection requirements? (3) Why do some certifications take more than 60 days? (4) Why does DOL issue interim certifications so infrequently?

Contact and Acknowledgments

For future contacts regarding this testimony, please call John H. Anderson, Jr., at (202) 512-2834. Individuals making key contributions to this testimony included Yvonne Pufahl, Ronald Stouffer, and Wendy Wierzbicki.

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