CRS Examines Surface Transportation Reauthorization Bills

The federal government's highway, mass transit, and surface transportation safety programs are periodically authorized in a multi-year surface transportation reauthorization bill. The most recent reauthorization act, the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU or SAFETEA; P.L. 109-59), expired at the end of FY2009. Since then, the surface transportation programs and activities have been funded under a series of extension acts.

The main obstacle to passage of a new multi-year bill during the past two years has been the disparity between projected spending and the much lower projections of the revenue flows to the highway trust fund (HTF). Taxes on gasoline and diesel provide 90% of the revenues for the HTF, which historically has funded the entire highway program and roughly 80% of the mass transit program. The rates on these taxes, which are on a cents-per-gallon basis, have not been increased since 1993. In addition, the condition of the economy and improvements in fuel economy have held down fuel consumption and as a result are adversely affecting HTF revenues. Consequently, authorizers face a dilemma: how to pass a bill without cutting infrastructure spending, raising the gas tax, or increasing the budget deficit.

The Senate passed S. 1813, the Moving Ahead for Progress in the 21^st Century Act (MAP-21), on March 14, 2012. MAP-21 is a two-year reauthorization bill (FY2012-FY2013). MAP-21 proposes:

• A total Federal-Aid Highway Program authorization of $39.4 billion for FY2012 and $40.4 billion for FY2013 (reflecting rescissions), and $400 million for research and education in each fiscal year.

• To provide roughly $10.5 billion in offsets and revenue transfers to the HTF.

• To reduce the total number of highway programs from roughly 90 to 30. The overall Federal-Aid Highway Program would be structured around five large "core" programs, including a new National Freight Program. The existing Equity Bonus Program would be discontinued.

• To accelerate project completion, speed up the environmental review process and increase the use of performance measures.

• $10.458 billion, annually, for FY2012-FY2013, for transit programs.

                               Contents

Surface transportation authorization acts authorize spending on federal highway and mass transit programs, surface transportation safety and research, and some rail programs. The most recent multi-year authorization for federal surface transportation programs, the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU or SAFETEA; P.L. 109-59), expired on September 30, 2009. Since then these programs have operated on a series of extension acts and continuing resolutions.

The budgetary environment has changed since the passage of SAFETEA in 2005. The financial resources available to authorizers are more constrained. The highway trust fund (HTF) has provided most of the funding for surface transportation authorization bills since the fund was created in 1956, but the revenues from highway taxes (mostly on gasoline and diesel fuel) that support the HTF have declined in recent years due to the condition of the economy and improvements in vehicle fuel efficiency. Consequently, how to uirpass a multi-year bill without cutting infrastructure spending, raising the gas tax, or increasing the budget deficit is an underlying theme in the ongoing debate. Other issues such as alternative finance, tolling, public-private partnerships,¹ acceleration of project delivery,² and performance management are also being debated in this fiscal context. In addition, the question of equity in the distribution of federal spending among the states, which has been resolved in the past by providing large increases in funding for all states, cannot be solved so easily given currently forecast revenues.³

For a detailed review of the underlying issues, see CRS Report R41512, Surface Transportation Program Reauthorization Issues for the 112^th Congress, coordinated by Robert S. Kirk.

On March 14, 2012, the Senate passed S. 1813, the Moving Ahead for Progress in the 21^st Century Act (MAP-21). The bill would reauthorize the surface transportation programs and activities of the federal government for two years (FY2012-FY2013).

In early February 2012, the House committees of jurisdiction over surface transportation reauthorization all reported favorably on their contributions to H.R. 7, the American Energy and Infrastructure Jobs Act (H.Rept. 112-397). Counting the already-appropriated FY2012, H.R. 7 is a five-year bill providing for a total authorization of roughly $260 billion.⁴ The bill, as reported, would link the usual surface transportation reauthorization components with provisions designed to increase oil and gas production, the revenues from which would be provided for highway infrastructure. Especially controversial is a provision to discontinue funding mass transit with HTF revenues. Reportedly, changes in the bill as reported are being considered.

MAP-21 and H.R. 7 differ significantly in programmatic content and treatment of the HTF. Both, however, reduce the number of programs by roughly two-thirds and are free of program earmarks.

Surface transportation reauthorization is one of the more legislatively complex issues before Congress, because it addresses matters under the jurisdictions of many committees. Portions of the pending reauthorization bills, under various bill numbers, were marked up in seven different committees (see Table 1) before consolidation under a single bill number in each house.

    Table 1. Committee Involvement in Surface Transportation Reauthorization

Highway Trust Fund

The highway trust fund is financed from a number of sources including sales taxes on tires, trucks, buses, and trailers, as well as truck usage taxes. However, approximately 90% of trust fund revenue comes from excise taxes on motor fuels, 18.3 cents per gallon on gasoline and 24.3 cents per gallon on diesel. The HTF consists of two separate accounts -- highway and mass transit. The highway account receives an allocation equivalent to 15.44 cents of the gasoline tax and the mass transit account receives the revenue generated by 2.86 cents of the tax.⁵ Because the fuel taxes are set in terms of cents per gallon, rather than as a percentage of the sale price, their revenues do not increase with inflation. The fuel tax rates were last raised in 1993.

The period of sluggish economic performance that began in 2007 and the improvements in vehicle fuel efficiency have reduced fuel tax revenues below the optimistic projections assumed in SAFETEA. The highway account has already required three transfers from the general fund totaling $29.7 billion,⁶ without which the Federal Highway Administration (FHWA) might not have been able to pay states for work they completed. The Congressional Budget Office (CBO), in its March 20, 2012, HTF baseline projection showed that the Highway account is expected to have a shortfall of $4.6 billion at the end of FY2013.⁷ (See Figure A-1, CBO Highway Trust Fund Projections.)

The CBO projections show the highway account excess of outlays over tax revenues (plus interest) as $7.8 billion for FY2012 and $9.1 billion for FY2013. A gap of roughly $8 billion to $9 billion per year remains through FY2022.⁸ CBO projects that the mass transit account, which received a $4.8 billion general fund transfer in FY2010, will remain above zero through FY2013 but then fall to a negative $1.2 billion shortfall by the end of FY2014. The end-of-year shortfall falls further, to $5 billion at the end of FY2015 and deepens rapidly thereafter. These are the gaps authorizers face as they work to move reauthorization legislation.

Without an increase in the existing fuel taxes, a difficult political issue in recent years, the fuel-based trust fund taxation system will not be able to support existing or increased surface transportation spending. The choice for policymakers, assuming no increase in fuel taxes, is between finding new sources of revenue for transportation or settling for a smaller program.

Highways

The Federal-Aid Highway Program (Highway Program) is an umbrella term for an array of programs administered by FHWA. Over many years, the Highway Program has retained several defining financial and administrative attributes across the programmatic structure.

Underlying Highway Program Attributes

The Highway Program is primarily a state-run program. The state departments of transportation (state DOTs) largely determine where and how money is spent, but have to comply with detailed federal planning guidelines. The state DOTs award the contracts and oversee project development and construction. Federally funded highway projects generally require states and/or local governments to provide a designated local matching share. For most Interstate System projects the state/local match is 10%. For other roads the state/local match is generally 20%.

Understanding the particular terminology employed by FHWA in managing the Highway Program is important:

• Distribution of funds is FHWA notification of the availability of federal funds, usually for four years. The states do not actually receive federal money for highway project spending up front.

• Apportionment is the distribution of funds among the states as prescribed by a statutory formula.

• Allocation is an administrative distribution of funds (often for specific projects) under programs that do not have statutory distribution formulas.

• Reimbursement occurs once a project is approved, the work is started, costs are incurred, and the state submits a voucher to FHWA.⁹ The reimbursable nature of the highway program is designed to help prevent waste, fraud, and abuse.

• Contract authority is a type of budget authority that is available for obligation even without an appropriation (although appropriators must eventually provide authority to pay the obligations, known as liquidating authority).

• Obligation of contract authority for a project by FHWA legally commits the federal government to reimburse the state for the federal share of a project. This can be done prior to an appropriation.¹⁰

• Limitation on obligations, known as ObLim or Oblimit, is used to control annual FHWA spending in place of an appropriation. The ObLim sets a limit on the total amount of contract authority that can be obligated in a single fiscal year. For practical purposes, the ObLim is analogous to an appropriation.¹¹

There are two categories of programs: formula and discretionary. Formula program funds are apportioned (each state receives a portion) annually among the states based on factors detailed in authorizing legislation. All of the large highway programs are formula/apportioned programs. Discretionary programs tend to be smaller programs allocated by FHWA or earmarked by Congress.

The "Core" Formula Programs

Under SAFETEA, the vast majority of the federal-aid highway money for project spending is apportioned to the state DOTs through several large "core" formula-driven programs.¹² These programs are provided with roughly 80% of SAFETEA's contract authority¹³ and are the sources of funding for most federal-aid highway projects. The core formula programs are the following:

• Interstate Maintenance Program (IM)

• National Highway System (NHS)

• Surface Transportation Program (STP)¹⁴

• Highway Bridge Program (HBP)

• Congestion Mitigation and Air Quality Improvement (CMAQ) Program

• Highway Safety Improvement Program (HSIP)

• Equity Bonus Program (EB) -- EB funds are distributed into the programs above

Over time, the state DOTs have been given increasing flexibility to transfer funds from one program to another (excepting HSIP). Some Highway Program funding may also be used for transit projects. This transferability reduces the importance of funding formulas and program eligibility distinctions. Nonetheless, some state DOTs argue that the programmatic structure prevents them from using federal highway funds as they deem best.

The Equity Bonus Program is the largest highway program in dollar terms. Its purpose is to guarantee each state a minimum share of funds, regardless of the funding formulas. At present, each state must receive total formula program funding equal to at least 92% of its highway users' tax payments to the highway account of the HTF.¹⁵ The Equity Bonus Program is often viewed as diluting the policy rationales associated with the core program formulas.

Discretionary Programs

Several smaller discretionary highway programs (referred to as "allocated" programs) are also part of the Federal-Aid Highway Program. These programs are nominally under the control of FHWA and were designed to allocate funds to projects chosen through competition with other projects. During SAFETEA, most of this funding was earmarked by Congress.¹⁶

The term "program" is used very broadly. FHWA's Financing Federal-Aid Highways listing of allocated programs includes entries for 59 activities, some of which are clearly programmatic in nature, mixed in with others that more resemble specific project designations, temporary pilot programs, studies, and other narrowly directed activities that are not truly "programs."¹⁷

Transit

The federal transit program, administered by the Federal Transit Administration (FTA) in the U.S. Department of Transportation (DOT), is a collection of individual programs, each with different funding amounts, distributional mechanisms, and spending eligibility rules.¹⁸ There are four main federal transit programs in SAFETEA, together accounting for 85% of authorized transit funding. Funding in two of these programs, the Urbanized Area Formula Program and the Fixed Guideway (or Rail) Modernization Program, is distributed by formula. The Urbanized Area Formula Program, which accounts for 41% of authorized transit funding in SAFETEA, provides funding to urbanized areas with populations of 50,000 or more. Funds can be used for a broad range of expenses including capital, planning, transit enhancements, and operations in urbanized areas with populations of up to 200,000. Fixed Guideway Modernization Program funds, 16% of authorized transit funding, go mainly for the replacement and rehabilitation of transit rail system assets.

The other two main transit programs, the New Starts Program and the Bus and Bus-Related Facilities Capital Program, are discretionary programs. New Starts funding, 18% of overall authorized transit funding in SAFETEA, is available primarily on a competitive basis for new fixed guideway systems and extensions. While the majority of New Starts funding over the years has gone to transit rail projects, the program has funded projects for busways and bus rapid transit, ferries, automated guideway systems, and vintage trolleys. Congress enacted a new "Small Starts" program in SAFETEA to fund projects with a total cost of $250 million or less in which the federal share is $75 million or less. Small Starts projects are funded with $200 million annually from the New Starts authorization beginning in FY2007. Bus Program funds, 9% of authorized funding, are provided to purchase buses and bus-related equipment, including the construction of buildings such as administrative and maintenance facilities, transfer facilities, bus shelters, and park-and-ride stations. Until recently, these funds were mostly earmarked in authorization and appropriations legislation. Currently, FTA allocates these funds.

A number of smaller funding programs, including the Rural Formula Program, the Jobs Access and Reverse Commute (JARC) program, the Elderly and Disabilities grants program, and the New Freedom Program, together with program administration, account for the remaining 15% of transit program funds.

Safety

Highway transportation is by far the leading cause of transportation-related fatalities and injuries in the United States. Highway safety is primarily the responsibility of the states, controlling as they do much of the road network and having the authority to legislate restrictions on driver behavior. Congress has established federal highway safety programs to assist states in improving highway safety. Three DOT agencies administer highway safety programs authorized in SAFETEA: the National Highway Traffic Safety Administration (NHTSA), which focuses on driver behavior and vehicle safety; the Federal Motor Carrier Safety Administration (FMCSA), which focuses on commercial driver qualifications and commercial vehicle safety; and FHWA through the Highway Safety Improvement Program, which focuses on the safety of roadway design.

National Highway Traffic Safety Administration (NHTSA)

NHTSA provides grants to states to support and encourage state traffic safety efforts, regulates motor vehicle safety, and carries out research on traffic safety. It oversees the use of federal grant funds by requiring states to submit highway safety plans. A state's plan must be approved by NHTSA in order for the state to receive federal traffic safety funds. Each state's plan must identify the state's primary safety problems, set goals for addressing the problems, and establish performance measures by which progress toward those goals can be judged. NHTSA also provides training and technical assistance to states.

NHTSA provides grants to states through one large formula program (the State and Community Highway Safety Program, often referred to as the Section 402 program from its statutory identification as Section 402 of Title 23) and several smaller incentive grant programs. These programs support state efforts to improve traffic safety data collection systems, reduce speeding, increase the use of seat belts and child restraint systems, reduce drunk and drugged driving, reduce motorcycle crashes, reduce school bus crashes, and discourage unsafe driving behavior (including aggressive driving, fatigued driving, and distracted driving caused by the use of electronic devices in vehicles).

Federal Motor Carrier Safety Administration (FMCSA)

FMCSA promotes the safety of commercial motor vehicle operations through regulation, enforcement, training, and technical assistance. It also administers motor carrier safety grant programs that assist states in ensuring the safety of truck and motor coach operations, including inspection of vehicles and licensing of commercial drivers.

Highway Safety Improvement Program (HSIP)

HSIP, one of the core federal-aid highway funding programs, is intended to reduce traffic fatalities and serious injuries by making improvements to the design or operation of roadways. Each state receives funding according to a formula based on road lane-miles, vehicle miles traveled, and traffic fatalities. Each state receives at least 0.5% of the program's funding. HSIP includes a dollar set-aside for the Railway-Highway Grade Crossing Hazard Elimination Program, and there is also a dollar set-aside within the formula funds distributed to the states for the purpose of construction and operational improvements on high-risk rural roads.

Funding Guarantees and Revenue Aligned Budget Authority (RABA)

SAFETEA extended mechanisms that were put in place in earlier years to guarantee certain annual funding levels below which appropriators could not constrain funding. This was done by amending the Budget Enforcement Act of 1990 to create highway and mass transit budget categories ("fire walls") that protected these funds from being tapped to increase spending elsewhere. SAFETEA also guaranteed the annual ObLim set for FY2005 through FY2009 by amending the Balanced Budget and Emergency Deficit Control Act of 1985 to specify the SAFETEA ObLim levels, thereby preventing appropriators from setting a lower ObLim. Although the budget firewalls set in the Budget Enforcement Act ended in 2002, appropriators honored those guarantees over the life of SAFETEA. The guarantees retained a second level of protection via a change in the House rules that specified it would be out of order to consider any bill that would set a lower level of funding than set in Section 8003 of SAFETEA. Early in the 112^th Congress, however, the House eliminated the rule, removing the last vestige of the guarantees.

RABA is a means of raising or lowering the firewall and guaranteed funding levels if any year's annual highway account receipts are either higher or lower than expected. Although adherence to RABA calculations can lead to either additional funding or cuts in funding, Congress has never allowed a negative RABA calculation to lead to a reduction in spending.¹⁹ Despite the fact that revenues in recent years have consistently fallen below the guarantee levels, which under RABA would have led to funding reductions, in recent years the RABA issue has been considered a moot point, because the HTF has been supplemented by general fund transfers. However, some mechanism to bring spending into alignment with receipts might still be considered in reauthorization.

Budget Control Act of 2011 (P.L. 112-25)

The Budget Control Act requires sequestration of certain funding authorizations in the event a special joint committee fails to reach an agreement on spending reductions. The Budget Control "Super Committee" announced in November 2011 that it had failed to reach such an agreement. However, exemptions to the sequester process under the Balanced Budget and Emergency Deficit Control Act of 1985, as amended (Codified in 2 U.S.C. § 905 (j)), likely mean that sequestration would not significantly reduce any surface transportation spending authorized for years beyond FY2012. The surface transportation programs and activities exempted, to the extent that their budgetary resources are subject to appropriations bill obligation limitations, are the following:

• Federal-Aid Highways

• Highway Traffic Safety Grants

• NHTSA operations and research and National Driver Register

• Motor Carrier Safety Operations and Programs

• Motor Carrier Safety Grants

• Transit Formula and Bus Grants

Extension Legislation

SAFETEA expired on September 30, 2009. Surface transportation programs and activities have been operating on the extension legislation set forth in Table 2.

               Table 2. Short-Term Extensions of SAFETEA

Overview

The House and Senate bills differ in the number of years authorized, programmatic reauthorization, and regulatory changes. Both bills are free of earmarks, aim to expedite project delivery, and reduce the number of highway programs by roughly two-thirds.

Highways

Senate Bill

MAP-21 is a two year reauthorization bill that basically funds the Federal-Aid Highway Program at the baseline level, adjusted for inflation. However, it would make substantial changes to the structure, formulas, and funding distribution of the federal highway program.

• A total Federal-Aid Highway Program authorization of $39.4 billion for FY2012 and $40.4 billion for FY2013 (reflecting rescissions), and $400 million for research and education in each fiscal year (see Table 3).

• In a major change, MAP-21 would eliminate all the formula factors under the individual formula programs. Each state would be apportioned a share of the bill's authorized contract authority based on its share of total apportionments and allocations during FY2005-FY2009. These state shares (guaranteed to provide a 95% return on each state's payments to the HTF) would then be used to calculate the MAP-21 apportionments.

• The replacement of individual program formulas with an initial calculation across all states based on SAFETEA share, the change in the programmatic structure, and the broad eligibility across programs lessen the federal and congressional influence on program direction and project selection. In the past, some Members of Congress influenced surface transportation by pressing for changes in the program formulas or through earmarking. MAP-21 has neither program formulas nor congressional designation of projects.

• National interests and needs would be increasingly driven by federal planning, performance management, project delivery, and project eligibility requirements. Transferability between core programs, however, would be restricted to 20% of each formula program's apportionment.

• MAP-21 would reduce the number of programs by roughly two-thirds. This would be accomplished mostly by shifting program eligibility to the core programs. Nearly all discretionary grant programs nominally under the control of FHWA would be eliminated.

• The Transportation Enhancements Program (TE)²⁰ is rolled into the CMAQ program. The bill eliminates some controversial TE uses and, beginning in FY2013, allows states to spend TE funds on a range of non-TE CMAQ uses if they build up an unspent balance for one and a half years. Some TE-type projects are also made eligible for funding in other proposed programs.

• A National Freight Program (NFP) should increase the funding of freight projects by eliminating competition with non-freight projects, at least within the new program.

• The Senate bill increases Transportation Infrastructure Finance and Innovation Act (TIFIA) program funding nearly ten-fold. However, the bill is generally silent on tolling of federally funded roads and bridges. Tolls often provide the revenue streams needed for TIFIA and other alternatively financed projects.

H.R. 7 is a five year reauthorization bill if the already appropriated FY2012 funding is counted. Funding amounts appear in Appendix Figure A-2.

• The House bill would provide for modest increases for federal-aid highways from $40.4 billion in FY2013 to $41.0 billion in FY2016 (with no rescissions), and $440 million annually for research and education.

• The existing Interstate Maintenance and Highway Bridge programs would be folded into the National Highway System and Surface Transportation Programs. The Congestion Mitigation and Air Quality program and the Highway Safety Improvement programs would be retained. The overall number of distinct programs would be reduced by about two-thirds, to approximately 30.

• The Equity Bonus program would provide a 94% state rate of return guarantee on payments to the HTF.

• The Mass Transit Account of the HTF would be renamed the Alternative Transportation Account, which in addition to funding mass transit (see below) would provide $2.267 billion annually for FY2013-FY2016 for highway programs.

• The 2.86 cents per gallon of the fuel taxes that are now credited to the Mass Transit Account would be redirected to the Highway Account.

• Provisions under the streamlining title would extensively change the requirements in the National Environmental Policy Act (NEPA)²¹ applicable to federal highway and transit projects. NEPA would no longer apply to highway or transit projects that cost less than $10 million or for which federal funding constitutes 15% or less of total project costs.

• The House bill would also increase TIFIA funding nearly ten-fold.

Senate Bill

MAP-21 would fund the Federal Transit Administration (FTA) and its programs at the current level. The HTF would provide 79.9% of the funding and the general fund would provide 20.1%. MAP-21 provisions include

• $10.458 billion annually for FY2012-FY2013, for transit programs;

• Creation of the State of Good Repair (SGR) program, which would replace the Fixed Guideway Modernization Program;

• Elimination of the Bus and Bus Facilities program, although a remnant of the program, called the Bus and Bus Facilities SGR program, would provide competitive grants for the upkeep of buses and bus facilities. Funding for the program, $75 million, would be set aside from the New Starts program;

• Modification of the New Starts process, including elimination of the alternatives analysis that is currently required in addition to that required by NEPA.

• Renaming the Mass Transit Account of the Highway Trust Fund as the Alternative Transportation Account (ATA) and redirecting the motor fuel taxes to the Highway Account. The ATA would be funded by transferring $40 billion from the general fund.²²

• Eliminating the Clean Fuels Grant Program, the Transit in Parks Program, and the Growing and High Density State Formula.

• Combining into a single program the New Freedom Program, the Elderly Persons and Persons with Disabilities Program, and the Jobs Access and Reverse Commute Program.

• Distributing funding for the Bus and Bus-related Facilities Program by formula.

MAP-21 includes provisions that call for the development of a national rail plan (including both passenger rail and freight), for the development of a rolling stock equipment pool for corridor intercity passenger services, and for the implementation of positive train control. For freight rail, the bill would amend the Railroad Rehabilitation and Improvement Financing Program (RRIF), which provides government loans for freight and passenger railroads, to accept state or local subsidies or dedicated revenue stream as collateral. The bill would also make modest changes to laws affecting rail freight enforced by the Surface Transportation Board. The House bill contains provisions affecting Amtrak funding, the RRIF program, and positive train control implementation.

Finance Provisions: Filling the Gap

Most of the provisions of the finance titles are intended to close the gap between projected HTF revenues and the total authorizations included in the bills.

Senate Bill

The finance title of the Senate bill extends highway-related taxes, at their current rates, through FY2015 and extends highway trust fund expenditure authority through FY2013.²³

The bill includes provisions to raise revenue or provide offsets for $13.872 billion over ten-and-a-half fiscal years for the HTF, $9.279 billion of which is to be transferred in FY2012-FY2013.²⁴ The deposits include

• $3 billion from the Leaking Underground Storage Tank (LUST) trust fund balance would be transferred immediately, as well as $685 million of projected LUST fund revenues over the next 10 years;

• $697 million (over 10 years) from the transfer of the Gas Guzzler Tax from the general fund to the HTF;

• $743 million (over 10 years) consequent of the revocation of passports of tax delinquents;

• $841 million (over 10 years) consequent of allowing the Treasury to levy up to 100% of the payment to a Medicare provider to collect unpaid taxes;

• $4.52 billion from the transfer of future import tariffs on automotive products (FY2012-FY2016);

• $244 million (over 10 years) from a change in tax treatment of securities of a controlled corporation that are exchanged for assets as part of certain types of corporate reorganizations;

• $25 million (over 10 years) from the clarification that the Internal Revenue Service may levy a federal employee's Thrift Savings Account to satisfy tax liabilities;

• $363 million (FY2014-FY2022) from the extension for transfers of excess pension assets to retiree health accounts and allowing Section 420 of the U.S. tax code to apply to life insurance benefits;

• $9.467 billion (over 10 years) from pension funding stabilization, based on the revenue increases from the stabilization of the fluctuation of interest rates attributable to concomitant changes in Pension Guarantee Benefit Corporation premiums;

• $4.970 billion transfer from the Treasury general fund to the HTF ($2.183 billion in FY2012, $2.277 billion in FY2013, and $510 million in FY2014);

• $459 million (over 10 years) from allowing federal agencies to offer phased retirement;

• $244 million (over 10 years) from the reporting of the sale of life insurance policies to third parties;

• $99 million (over 10 years) from extending taxes on cigarette manufacturers to entities operating roll-your-own machines;

• $3.627 billion (over 10 years) from delaying the use of worldwide interest expense allocation by one year;

• $1.022 billion (over 10 years) from authorizing special measures against foreign jurisdictions and financial institutions that significantly impede enforcement of regulations against money laundering.

• -$761 million (over 10 years) from changing the Small Issuer Exception to extend the special rules providing modifications to bonds issued after the date of enactment and before January 1, 2013;

• -$215 million (over 10 years) from providing that bonds issued after the date of enactment and before January 1, 2013, not be treated as a tax preference for purposes of the alternative minimum tax;

• -$139 million from extending the parity of the monthly exclusion for employer-provided vanpool and transit pass benefits and the exclusion for employer-provided parking;

• -$305 million from incorporating S. 939, the Sustainable Water Infrastructure Act (as modified), providing that the state volume cap on private activity bonds would not apply to bonds for water and sewage treatment facilities.²⁵

The bill also includes a modified version of S. 836, the Transportation Access for All Americans Act (as modified), which would amend the Internal Revenue Code to change the depreciation period for long-term highway leases from 15 to 45 years. This might make highway privatization less attractive to private-sector investors. The bill also would provide that the amortization period of the franchise right to collect tolls be not less than the term of the lease or 15 years, whichever is greater. The report language expresses the Finance Committee's concern that under current law the amortization period (15 years) for amounts paid for the right to operate and maintain the public highway and collect tolls is usually significantly shorter than the term of lease under which the right to toll is exercised.

Solvency Account

The finance provision would establish a "solvency account" into which the Secretary of the Treasury would transfer any excess of amounts, appropriated to the HTF before October 1, 2013, under MAP-21, over the amount necessary to meet the needs of the HTF for the period ending October 1, 2013. These amounts would then be made available for transfers to both the highway account and the mass transit account in a manner that would assure that each account maintains a financial cushion of $2.8 billion on September 30, 2013.

Leaking Underground Storage Tank (LUST) Trust Fund

The Senate bill proposes to draw heavily on the LUST trust fund to provide a new revenue source for the highway trust fund. Congress established the LUST trust fund in 1986 to address a nationwide problem of groundwater contamination caused by releases from leaking underground storage tanks (USTs) containing petroleum.²⁶ The LUST trust fund receives revenues primarily from a 0.1 cent per gallon excise tax on gasoline and diesel fuels. Annual discretionary appropriations from the fund support the LUST environmental contamination investigation and cleanup program and the UST leak prevention program authorized in the Solid Waste Disposal Act. Historically, the states used the annual LUST trust fund appropriation mainly to help oversee and enforce corrective actions performed by responsible parties, and also to conduct corrective actions where no responsible party has been identified, where a responsible party fails to comply with a cleanup order, and in the event of an emergency. The Energy Policy Act of 2005 expanded state and U.S. Environmental Protection Agency (EPA) responsibilities and authorized the use of trust fund monies for the federal UST leak prevention and detection program as well as the LUST cleanup program.²⁷ Of some 501,000 releases from leaking petroleum tanks reported since the beginning of the LUST program, more than 413,000 (or 85%) have been addressed, leaving a backlog of 88,000 releases requiring cleanup.

The LUST trust fund had an unobligated balance of $3.392 billion at the beginning of FY2012. In FY2012, absent legislative changes, the fund is estimated to receive $117 million in interest payments on its unobligated balance and $181 million in tax receipts. For each of the past several fiscal years, Congress has appropriated approximately $113 million from the trust fund. States receive, as grants, a minimum of 80% of the annual appropriation. EPA uses the remainder to carry out its responsibilities, including implementing the program on Indian lands. Partly because of the relatively low appropriations through the history of the program, states' LUST programs have relied primarily on nonfederal fund sources, including fees and appropriations, as well as state insurance programs.²⁸

Section 40301 of the Senate bill would transfer $3.0 billion from the LUST trust fund into the highway trust fund in FY2012. Section 40302 would appropriate to the highway trust fund one-third of future LUST trust fund receipts from the 0.1 cent-per-gallon tax on gasoline and diesel fuel. The Joint Committee on Taxation projects that these future transfers would range from $62 million to $67 million annually, and that over ten years, the appropriations and transfers together would provide $3.685 billion to the highway trust fund.²⁹

The LUST trust fund expenditure authority is set to expire on March 31, 2012. Section 40101 of the Senate bill would extend the authority through September 30, 2013.³⁰

House Bill

The finance provisions of H.R. 7 were included in the American Energy and Infrastructure Jobs Financing Act of 2012, which was reported by the Committee on Ways and Means on February 9, 2012. The bill would reauthorize HTF expenditure authority through FY2016 (Section 15002). Existing highway taxes, including motor fuel taxes, would be extended through FY2018 (Section 15003).

H.R. 7 includes a provision requiring that all future transfers from the general fund of the Treasury to the HTF be fully offset in both budget authority and outlays. Under current law transfers from the general fund to the HTF are scored by CBO as having no cost.

The finance provisions of H.R. 7 reconfigure the highway trust fund. Within this context, there are two gaps the bill seeks to fill with revenue increases or offsets. One gap is the difference between highway account revenues and balances and the authorized levels in the bill. The other is the $40 billion of general fund resources for the proposed alternative transportation account.

Oil and Gas Revenues

Unlike the Senate bill, H.R. 7 would not allocate balances or revenues from the LUST trust fund to the Highway Trust Fund; instead, Section 15002(c) would amend the Internal Revenue Code to extend the LUST trust fund from April 1, 2012, until October 1, 2016.

H.R. 7 originally sought to direct increases in federal revenues from onshore and offshore domestic energy leasing and production generated by the enactment of Title XVII of H.R. 7 into the highway account of the Highway Trust Fund. This would establish a new allocation of government receipts from newly authorized leasing and drilling activities. The House approved the energy leasing and production provisions as separate bills on February 16, 2012, under a rule specifying that they would be incorporated into H.R. 7 should H.R. 7 pass the House.³¹

The statutory basis for offshore energy development is the Outer Continental Shelf Lands Act,³² which is administered primarily by the Department of the Interior. The basic structure of the offshore program allows the Department of the Interior to lease the right to develop oil and gas resources in federal ocean areas in exchange for upfront payments, rental payments, and royalties. According to the department's Office of Natural Resources Revenue, federal receipts from offshore oil and gas came to $6.5 billion in FY2011.³³

Under current law, receipts from existing offshore lease programs are allocated to a variety of programs by statute. The Land and Water Conservation Fund (established under P.L. 90-401) receives a $900 million annual allocation, and the National Historic Preservation Fund (established under P.L. 94-422) receives a $150 million allocation annually. In addition, portions of federal receipts from certain submerged acreage are permanently appropriated to the states, with the Gulf Coast states (Alabama, Louisiana, Mississippi, and Texas) receiving additional funds from specified leases.

Alternative Transportation Account Revenues

The House bill renames the mass transit account of the HTF the alternative transportation account, and provides the account with a one-time appropriation of $40 billion. It transfers to the highway account, beginning on the date of enactment, the 2.86 cents per gallon of motor fuels taxes currently transferred to the mass transit account. Title XVI, Federal Employee Retirement, appears to be included to provide offsetting revenues for the $40 billion in general fund revenues provided to the alternative transportation account over the life of the bill.

Highways

Senate Bill Funding

• MAP-21 proposes total authorizations of $80.6 billion (after rescissions) over two years ($39.8 billion for FY2012 and $40.8 billion for FY2013), under the Highway and Research titles of the bill. (See Table 3)

• The Senate bill does not reinstate the TEA-21 or SAFETEA funding firewalls or spending guarantees.

• MAP-21 eliminates the Equity Bonus Program. Instead the bill guarantees a state share based on SAFETEA and a 95 cent return on each dollar that a state's highway users pay to the highway account of the HTF.

• MAP-21 does not include highway program earmarks.

Section 4001, Highway Spending Controls, includes a provision designed to assure the solvency of the highway account of the HTF. Referred to as the "ratchet mechanism," it requires that within 60 days of enactment, DOT and the Department of the Treasury estimate whether the highway account balance will fall below $2 billion in FY2012 or $1 billion in FY2013. If either of these conditions is expected to occur, DOT will calculate the amount to which the FY2012 ObLim would have to be reduced to prevent this occurrence and then adjust the distribution to the states to reflect the reduction. Any withdrawn ObLim would immediately lapse and a proportionate amount of contract authority would be rescinded. For the years after FY2012 a similar calculation is to be made. The calculation is, however, only to be made under the year-long appropriations bills and not under short-term continuing resolutions.

This provision appears to be related to the pending HTF shortfall under MAP-21 spending levels, as it apparently commits the Senate Environment and Public Works Committee to keeping the bill's spending within the means (revenues and off set transfers) of the HTF. It may also increase the pressure to identify additional revenue options for the HTF to make up the shortfall.

Implementing the ratchet mechanism, if the trigger HTF balances were to be breached, could face resistance in Congress, given the history of negative RABA calculations. For FY2003 the RABA calculation called for a $4.4 billion downward adjustment in the guaranteed funding levels for the highway program. However, despite the negative RABA calculation, Congress chose to override the reductions by drawing down the then positive balance in the HTF.³⁴

House Bill Funding

• H.R. 7 proposes a total federal-aid highway program authorization of $205 billion over five years, counting the current appropriated year. The obligation limitations for the four full years of the bill are, $37.366 billion for FY2013, $37.621 billion for FY2014, $37.676 billion for FY2015, and $38 billion for FY2016.

• As is true with the Senate bill, H.R. 7 does not include spending guarantee mechanisms such as those in SAFETEA.

• H.R. 7 includes a modified version of the existing Equity Bonus Program with a guarantee that each state's total highway grants each year will equal at least 94% of the motor fuel taxes the state pays into the HTF. The program authorization is capped at $3.9 billion per year.

• The alternative transportation would fund several highway programs, including the Congestion Mitigation and Air Quality Program (CMAQ), Ferry Boats and Terminals, Puerto Rico Highways, and Territorial Highway Program. The obligation limitation for these programs is $2.707 billion for each of the fiscal years 2013 through 2016.

• The House bill would also allow expanded tolling of the Interstate system.³⁵ Subject to certain restrictions, the federal government could participate in projects to add lanes to increase the capacity of a highway and its conversion to a toll facility, so long as the same number of free lanes as existed before the project remain toll free.

• H.R. 7 does not include earmarks.

Senate Bill Highway Formula Programs

Highway Program Funding Distribution

Unlike SAFETEA and earlier authorization acts, MAP-21 does not set the core programs' authorization levels and then run the funding through their individual program formulas to determine each state's apportionments. Instead, MAP-21 determines the state apportionments for all the major programs according to a single methodology, as follows:

First, each state's "initial amount" is determined by multiplying the total amount available for apportionment ($39.143 billion for FY2012 and $39.806 billion for FY2013) by each state's share of total nationwide apportionments and allocations received for FY2005-FY2009.

Second, these initial amounts are adjusted (if needed) to ensure that each state's combined apportionments in each year will not be less than 95% of the estimated tax payments made by its highway users to the highway account of the HTF. Given the excess of federal highway spending over HTF revenues for FY2005-FY2009, it is unlikely that any adjustments will have to be made, if MAP-21, as reported, is enacted and fully funded.

Third, an amount based on each state's CMAQ percentage of its total apportionments for FY2009, plus 10% of the state's Surface Transportation Program funding for FY2009 (to account for the transfer of Transportation Enhancements to CMAQ), are set-aside for the new CMAQ program, from the adjusted initial amount determined in the first two steps. Then the metropolitan planning amount is determined by multiplying the ratio of a state's apportionment under Title 23 Section 134 for FY2009 to its total apportionments for that year, times the adjusted initial amount calculated in the first two steps.

Fourth, the remaining amount of each state's "initial amount" is divided among the four remaining core programs as follows: 58% is apportioned to the National Highway Performance Program (NHPP), 29.3% for the Transportation Mobility Program (TMP), 7% for the Highway Safety Improvement Program (HSIP), and 5.7% for the National Freight Program (NFP).

Table 4 shows the dollar amounts of the aggregate programmatic split.

               Table 4. Apportioned Programs (Contract Authority)

Historically, concerns about receiving federal highway spending proportionate to the highway taxes paid by each state's highway users were resolved through programs such as SAFETEA's Equity Bonus Program, which adds funds across all the formula programs to bring all states up to a minimum percentage return on tax payments. MAP-21 has no overt equity program. MAP-21's determination of the "initial amount" for each state, based on each state's share of total funding during FY2005-FY2009, is designed to resolve the "donor-donee" issue up front. Although there is an adjustment mechanism to assure that all states receive at least a 95% rate of return on their payments to the HTF, it is unlikely that adjustments will have to be made. The nationwide rate of return for FY2005-FY2009 was $1.23 on the dollar. Using this base level would likely lift all donor states above the 95% level. If, however, Congress does not provide sufficient funding for the program authorized in MAP-21, the adjustment process to guarantee a 95% return might have to be implemented. Also, some states may prefer that state return on payments to the HTF be used to determine the "initial amount," rather than the state share of total FY2005-FY2009 funding, largely because of earmarking legacy issues.

SAFETEA's Earmarking Legacy

SAFETEA included 6,372 earmarks, more than any previous surface transportation authorization bill, valued at $24.3 billion.³⁶ Of the $22.1 billion of funding for highway earmarks, 67% of this amount was "below the line," which meant the earmarks did not bring additional money to the receiving state because the state's Equity Bonus distribution was reduced by a like amount. The other 33% of earmark funding was for "above the line" earmarks and increased the amount of funds flowing to the receiving states, in most cases increasing those states' shares of total highway program funding. This became an issue in extension legislation. Although individual earmarks were not extended, the states that previously did well in obtaining above-the-line earmarks have benefited from higher base amounts under extensions.³⁷

MAP-21 is free of project earmarks. However, because under MAP-21 the apportionment calculation to the states is based on the state share of both apportioned and allocated funding for the SAFETEA years (FY2005-FY2009), states that did well in terms of "above the line" earmarks under SAFETEA would receive apportionment shares under MAP-21 that reflect these increased amounts.³⁸ SAFETEA's unequal distribution of earmarking both among Members of Congress and among the states was very controversial. Continuing the crediting of these "above the line" earmarks in MAP-21's initial state share calculation could continue to favor states which fared well during the SAFETEA earmarking process.³⁹

Highway Formula Programs

MAP-21 reduces the number of discrete funding programs by two-thirds to roughly 30 programs. Most of this reduction is accomplished by absorbing the programs' eligibilities into the new core programs discussed below. The core programs also have many areas of overlapping eligibility. Under MAP-21, the five core programs plus metropolitan transportation planning would be authorized at $39.143 billion for FY2012 and $39.806 billion for FY2013 (see Figure A-5 and Figure A-6).

National Highway Performance Program (NHPP; Section 1106)

This program would be the largest of the programs within the restructured Federal-Aid Highway program. The NHPP would receive $20.5 billion for FY2012 and $21 billion for FY2013. The program would provide support for improvement of the condition and performance of the National Highway System.⁴⁰ Three SAFETEA core programs, the Interstate Maintenance Program, the National Highway System Program, and the Highway Bridge Program's NHS component, would be combined to create most of NHPP. The program would include projects to achieve national performance goals for improving infrastructure condition, safety, mobility, or freight movement, consistent with state or metropolitan planning; construction, reconstruction, or operational improvement of highway segments; construction, replacement, rehabilitation, and preservation of bridges, tunnels, and ferry boats and ferry facilities; inspection costs and the training of inspection personnel for bridges and tunnels; bicycle transportation infrastructure and pedestrian walkways; traffic and traveler information monitoring; intelligent transportation systems; and environmental restoration, as well as natural habitat and wetlands mitigation within NHS corridors. The program focus would be on system maintenance. States would not be allowed to spend more than 40% of their three-year NHPP apportionment average on new capacity. States would have to develop National Highway System asset management plans with performance metrics and targets. If Interstate System and NHS bridge conditions in a state were to fall below the minimum conditions established by the Secretary of Transportation, certain amounts of funds would be transferred from other specified programs in the state.

Transportation Mobility Program (TMP; Section 1108)

This program would assist states and localities in improving the conditions and performance of federal-aid highways and of bridges on any public road. Essentially, it would replace SAFETEA's Surface Transportation Program, less its 10% Transportation Enhancement (TE) set-aside and the off-NHS system component of the Highway Bridge Program. The TE shifts to the enhanced CMAQ program. TE type projects, however, also maintain TMP eligibility. The authorization for TMP is roughly $10.5 billion annually for FY2012 and FY2013.

TMP funds would be eligible for transit uses, carpool programs, traveler information, congestion pricing, transportation planning, transportation enhancement activities, recreational trails, ferryboats and ferry facilities, border infrastructure projects, scenic roads, truck parking facilities, safe routes to school projects, as well as eligibilities from discontinued SAFETEA programs. TMP funds would also be eligible for state participation in natural habitat and wetlands mitigation efforts related to projects under Title 23 U.S.C., including statewide and regional natural habitat and wetlands conservation and mitigation plans. Improvement to a freight railroad, marine highway, or intermodal facility would be eligible under specified conditions. TMP funds could be used for maintenance and improvement of all public roads within 10 miles of international borders on which federally owned vehicles comprise more than 50% of the traffic. States would be subject to penalties if the total deck area of deficient bridges increased in the two most recent years.

TMP funds are to be sub-apportioned within states. Fifty percent of each state's apportionment is to be apportioned within the state based on the relative share of a state's population residing within three categories of areas: (1) urbanized areas with populations over 200,000; (2) areas within the state other than urban areas with populations above 5,000; and (3) other areas in the state. The other 50% could be apportioned to any area in the state.

The Appalachian Development Highway System (ADHS) program would be eliminated but its routes and access roads would be eligible under TMP. This change would give states more flexibility to determine spending on the ADHS.

Congestion Mitigation and Air Quality Program (CMAQ; Section 1113)

CMAQ as it exists under SAFETEA would be expanded, in part, by absorbing the eligibilities of discontinued programs including Transportation Enhancements, Safe Routes to Schools, and Recreational Trails. Under MAP-21, CMAQ would receive roughly $3.3 billion annually for FY2012 and FY2013 (under SAFETEA, CMAQ received $1.7 billion for FY2009). Eligibility for CMAQ funding would be expanded to include demand-shifting projects such as telecommuting, ridesharing, and road pricing. For further discussion of CMAQ, see the "Amendments to the CMAQ Program" section of this report.

Highway Safety Improvement Program (HSIP; Section 1112)

HSIP would remain largely as it is under SAFETEA. It would continue to support projects that improve the safety of road infrastructure by correcting or improving hazardous road locations, such as dangerous intersections, or road improvements such as adding rumble strips. HSIP would be funded at roughly $2.5 billion annually for FY2012 and FY2013. The High Risk Rural Roads Program and the Rail-Highway Grade Crossing Program would be abolished, although their project eligibilities would be retained.

National Freight Program (NFP; Section 1115)

The NFP would be an entirely new program intended to improve the condition and performance of a newly designated national freight network. The program would be funded at roughly $2 billion annually for FY2012 and FY2013. This program is discussed in detail in the "Freight Initiative" discussion in this report.

Transferability Among the Core Programs (Section 1507)

MAP-21 would reduce from 50% to 20% the maximum percentage of funding that a state can transfer from any one of its apportioned (mostly core formula) programs to another. Section 1507 of the bill would, however, prohibit the transfer of any TMP funding suballocated by population. The restriction on transfers among programs may be less limiting than it appears, as the core programs under MAP-21 would have many areas of overlapping eligibility, potentially reducing the need for inter-program transfers by the states.

House Bill Highway Formula Programs

H.R. 7 would consolidate or eliminate many programs, but differently than proposed in MAP-21. H.R. 7 would retain more of the existing core program structure but expand both the National Highway System Program (NHS) and the Surface Transportation Program (STP) to include the present Highway Bridge Program. The existing Interstate Maintenance program would be folded into the National Highway System Program, and the Highway Safety Improvement Program would be retained. The 10% STP set-aside for Transportation Enhancements, such as bike trails and streetscape improvements, is eliminated. As is true with the Senate bill, the eligibilities of many of the absorbed or eliminated programs continue but under the auspices of other programs.

The obligation limitations supported by the highway account of the HTF for the core highway programs for FY2013 through FY2016 total $150.7 billion. An additional $8 billion from the alternative transportation account is provided for the Congestion Mitigation and Air Quality Improvement Program (CMAQ). (For the state-by-state apportionments under H.R. 7, as reported, see Appendix Figure A-7 and Figure A-8).

National Highway System (NHS)

H.R. 7, the largest of the bill's formula programs ($70.4 billion for FY2013-FY2016), would expand the funding of the existing NHS program to help pay for the maintenance and repair of the Interstate Highway system (the existing Interstate Maintenance Program would be eliminated) and the construction, inspection, maintenance, and repair of bridges on the NHS (the existing Highway Bridge Program would be eliminated).⁴¹ Only facilities located on the NHS would be eligible for NHS program funding. Projects would have to support progress toward national performance goals and states would have to participate in the development of state asset management plans for the NHS.

Surface Transportation Program (STP)

During the nearly 30-year history of STP, it has been the federal-aid highway program with the broadest eligibility criteria. H.R. 7 would authorize $42.4 billion for FY2013-FY2014 for STP. Under the bill, the program's purpose would in some ways be broadened, for example, to include the construction, inspection, rehabilitation, and replacement of bridges and tunnels of all classifications (to compensate for the impact of the elimination of the Highway Bridge Program on non-NHS roads). On the other hand, the bill would eliminate the requirement that 10% of STP funds be set aside for transportation enhancement purposes. In addition, it reiterates the prohibition against projects on roads functionally classified as local or rural minor collectors unless the roads were on the federal-aid highway system in 1991. The bill, however, also allows up to 15% of the STP amounts to be used on roads classified as minor collectors. H.R. 7 would reduce, from 62.5% to 50%, the percentage of funds required to be spent on urbanized areas with populations over 200,000. States must consult with local or rural planning organizations before obligating funds for projects in population areas of 5,000 to 200,000.

Highway Safety Improvement Program (HSIP)

H.R. 7 would provide $10.4 billion for FY2013-FY2014 for HSIP. States would be required to have their own highway safety improvement programs and state safety plans to receive HSIP funds. The plans would have to be developed in consultation with stakeholders and set safety goals, identify safety projects, and be consistent with performance measures. Each plan would identify the 100 most dangerous roads in the state and would evaluate the progress made each year in achieving state safety goals. Federal cost share would continue to be 90%.

Congestion Mitigation and Air Quality Improvement Program (CMAQ)

H.R. 7 would provide $8 billion over FY2013-FY2014 ($2 billion annually) from the proposed alternative transportation account for CMAQ. See also CMAQ discussion under "Amendments to the CMAQ Program" later in this report.

Equity Bonus Program (EB)

H.R. 7 would amend the existing program to guarantee that each state would receive a minimum 94% return in core program apportionments on its state's highway users' payments of highway taxes to the highway trust fund (the current guarantee is 92%). H.R. 7 authorizes a total of $15.6 billion in equal annual portions over FY2013-FY2014. This limits the amount that can be used to fulfill the guarantee to $3.9 billion per year. Under SAFETEA the EB authorization was for "such sums as necessary." The estimate at the time of passage was that the program would need $40.9 billion in contract authority. If the $3.9 billion annual amount is insufficient to bring all states up to 94%, the STP authorization would be decreased to provide the needed additional funds.

Other Programs

Emergency Relief (ER) Program

The Senate bill, Section 1107, would clarify eligibility criteria regarding roads and bridges damaged by natural disasters or catastrophic failures from an external cause. Roads already closed to traffic or already scheduled for the construction phase in the approved statewide transportation improvement plan at the time of the disaster would not be eligible for ER funds. It would also reiterate that ER funds can only be used on federal-aid highways. The U.S. territories would not receive more than $20 million in a single fiscal year. The $100 million ceiling on a single natural disaster or a single catastrophic failure in a single state would be eliminated. Section 1506 allows the 180-day emergency period during which the federal government pays 100% of repair costs to be adjusted for time lost due to lack of access to damaged facilities. Also, 100% federal share may be allowed at the discretion of the Secretary of Transportation if the cost to repair exceeds the annual state apportionment under 23 U.S.C. 104.⁴²

H.R. 7, Section 1111, defines "comparable facility" in regard to allowable "maximum total project costs" as being a facility that meets the current geometric and construction standards required for the types and volume of traffic that the facility will carry over its design life. Reimbursement for debris removal costs would be limited to costs not covered by the Robert T. Stafford Disaster Relief and Emergency Assistance Act. The U.S. territories would not receive more than $20 million in a single fiscal year. The governor or President must declare an emergency in order for assistance to be provided, and states would have to provide a list of projects and costs within two years. ER funding would be allowed for federal lands highways and tribal roads even if they are not on the federal-aid highway system.

Federal Lands and Tribal Transportation Programs

The Senate bill, Section 1116, would restructure the Federal Lands Highways Programs (Public Lands Highways, Indian Reservation Roads, Park Roads and Parkways, and Refuge Roads) by creating the Federal Lands and Tribal Transportation Program. The new program would have three main components: the Tribal Transportation Program; the Federal Lands Transportation Program; and the Federal Lands Access Program. MAP-21 proposes to fund the Tribal Transportation Program at $450 million annually. Funding for other federal lands programs would be $550 million annually. Among the changes in the Tribal Transportation Program is a new statutory formula for distributing funds among tribes based on road mileage and tribal population. Funding from the Federal Lands Access Program would be allocated among the states by a formula that takes into account the amount of federal land, the number of recreational visitors, the number of miles of federal roads, and the number of federally owned bridges.

The House bill authorizes the Tribal Transportation Program (Subtitle E) at $465 million annually for FY2013-FY2016. The Federal Lands Transportation program is authorized at $535 million annually for FY2013-FY2016.

Territorial and Puerto Rico Highway Program

The Senate bill, Section 1114, would combine the Puerto Rico and Territorial Highway (THP) programs, funding them at $180 million annually for FY2012 and FY2013. The THP would receive a 25% set-aside each year, amounting to $45 million annually for Guam, American Samoa, the Northern Marianas, and the U.S. Virgin Islands. Puerto Rico would receive a 75% per year set-aside, or $135 million annually. Puerto Rico's set-aside is limited to certain program eligibilities: 50% for purposes under NHPP, 25% for purposes under HSIP, and the remainder for purposes eligible under 23 U.S.C. Chapter 1 (Highways).

The House bill retains the Puerto Rico Highway Program and authorizes it at $150 million annually from the alternative transportation account for FY2013-FY2016. The Territorial Highway Program is also retained and authorized from the alternative transportation account, but at $50 million annually for FY2013-FY2016.

Appalachian Development Highway System Program (ADHS)

The Senate bill eliminates the ADHS as a freestanding program and incorporates its eligibilities into the new Transportation Mobility Program.

The House bill would retain the program, authorizing it at the SAFETEA level of $470 million per year for FY2013-FY2016. As has been true in the past, these funds would available until expended. States would be allowed to use toll credits for the local matching share. Under H.R. 7, Section 118, funds are to be apportioned based on the latest cost to complete estimate with no state receiving less than 1% of the funds apportioned and no state receiving more than 25%.

Projects of National and Regional Significance (PNRS)

The Senate bill, Section 1118, establishes a program similar to the program of the same name in SAFETEA. Budget authority, not contract authority, of $1 billion is provided for FY2013. This program would require an appropriation before funds could be made available. The purpose of this discretionary program is to fund critical high-cost surface transportation infrastructure projects that are difficult to complete with existing funding but would generate national and regional economic benefits and increase global competitiveness, reduce congestion, improve roadways vital to national energy security, improve the movement of freight and people, and improve transportation safety. No later than three years after the date of enactment, the Government Accountability Office (GAO) is to report on the process of selection, the factors that went into the selection, and the justification under these factors for the selection of each project.

The House bill repeals the SAFETEA PNRS provision.

Transportation Infrastructure Finance and Innovation Act (TIFIA) Program

An existing federal program supporting large transportation projects is the Transportation Infrastructure Finance and Innovation Act (TIFIA), enacted in 1998 as part of the Transportation Equity Act for the 21^st Century (TEA-21) as amended (P.L. 105-178; P.L. 105-206). Currently, TIFIA provides federal credit assistance, up to a maximum of 33% of project costs, in the form of secured loans, loan guarantees, and lines of credit. Loans must be repaid with a dedicated revenue stream, typically a project-related user fee.

MAP-21 proposes several significant changes to TIFIA. Perhaps most importantly, the bill proposes to greatly enlarge the TIFIA program by authorizing $1 billion annually from the highway trust fund, up from the $122 million annually in SAFETEA. These funds would be available to pay the administrative and subsidy costs of the program. Administrative costs would be capped at 1% of this amount, leaving about $990 million to pay loan subsidy costs.⁴³ Assuming an average subsidy cost of 10%, this may provide DOT with the capacity to make loans totaling $9.9 billion per year.⁴⁴ At the same time, MAP-21 also proposes to increase the share of project costs that TIFIA may provide from 33% to 49%, potentially lowering the share of nonfederal resources leveraged with federal loans.

Another significant change in MAP-21 would allow credit assistance to be provided for a program of projects secured by a common security pledge. This would be accomplished through a "master credit agreement." Currently, TIFIA only allows agreements on a project-by-project basis. The Los Angeles County Metropolitan Transportation Authority (Metro), for one, has sought this change to accelerate the financing of 12 transit projects (known as the 30/10 Initiative).⁴⁵

The existing TIFIA threshold for eligible projects of $50 million generally or $15 million for intelligent transportation system projects remains, except that MAP-21 proposes a threshold of $25 million for projects in rural areas.⁴⁶ Rural areas are defined as urbanized areas of 200,000 population or less or nonurbanized areas. Additionally, whereas loans for urban projects must charge interest not less than the Treasury rate, rural projects are to be offered loans that are half the Treasury rate. Furthermore, 10% of TIFIA funds made available in MAP-21 are set aside for rural projects.

Currently, projects seeking TIFIA assistance are evaluated on eight criteria.⁴⁷ These criteria would be abolished, and projects (or programs involving multiple projects) would be evaluated solely on their eligibility on a first-come, first-served basis. Once funding is exhausted for a year, a project sponsor could enter into a master credit agreement for future credit assistance or it could decide to pay its own credit subsidy to permit an immediate loan. MAP-21 would permit the payment of the credit subsidy from federal surface transportation apportionments. Alternatively, if not all TIFIA funding is used it may be apportioned to the states for the purposes of the Transportation Mobility Program.

Like MAP-21, H.R. 7 authorizes $1 billion annually for TIFIA from the highway trust fund. These funds will be available to pay the administrative and subsidy costs of the program. Administrative costs are capped $3.250 million in H.R. 7. The bill also contains provisions to establish master credit agreements to provide credit assistance for programs of related projects. As with MAP-21, H.R. 7 eliminates the evaluation criteria for TIFIA assistance and provides assistance on a first-come, first-served basis if a project or program of projects is eligible. H.R. 7 maintains the $50 million threshold for non-ITS projects and $15 million threshold for ITS projects. But it also adds a $25 million threshold for rural projects, consistent with MAP-21, and a $1 billion threshold for assistance provided under a master credit agreement. H.R. 7 also raises the maximum amount of federal assistance to 49%.

In addition to enlarging TIFIA, H.R. 7 proposes to authorize $750 million per year specifically for capitalizing state infrastructure banks. Currently, each state is allowed to use a portion of its federal surface transportation funds to capitalize a state infrastructure bank if it so chooses.

Freight Initiatives

There is no separate federal freight transportation program in SAFETEA, only a loose collection of freight-related programs that are embedded in a larger surface transportation program aimed at supporting both passenger and freight mobility. Most of the freight-related funding authorized by SAFETEA is provided to the states through the regular highway programs, such as the Surface Transportation Program (STP). SAFETEA specifically dedicates minor funding to freight transportation improvements, leaving state DOTs and metropolitan planning organizations to make most decisions about the priority to be accorded freight. A large, well-defined federal freight program would be a significant departure from SAFETEA.⁴⁸

Whether the federal government should make a more focused effort towards funding freight improvements has been one of the policy questions leading up to the reauthorization debate.⁴⁹ The Senate bill (S. 1813) would create a new dedicated funding program for freight transport. While the House bill (H.R. 7) does not create a similar program, it does contain a number of provisions that significantly affect freight transport. Both the Senate and House bills require the U.S. Department of Transportation to prepare and update a national freight transport plan, in consultation with stakeholders, that is intended to articulate the nation's priorities with respect to freight improvements. Also, provisions in both bills seeking to increase private-sector participation in financing transportation improvements, such as expanding the TIFIA program,⁵⁰ could enhance freight carriers and shippers' roles in project planning and development.

Senate Bill

S. 1813 proposes a new core program intended to direct funds to infrastructure segments that are particularly critical to freight movement. The Secretary of Transportation would designate such segments, based primarily on freight volume and in consultation with shippers and Section 1115 of carriers, as the "primary freight network" (PFN), consisting of 27,000 centerline miles of existing roadways. (For comparison, the existing Interstate Highway System consists of approximately 47,000 centerline miles.) Through a formula allocation, states would be guided to spend their freight program apportionment on the PFN first before spending funds on other freight-related infrastructure. The Secretary of Transportation could designate up to an additional 3,000 centerline miles of existing or planned roads as part of the PFN based on their future importance to freight movement. Every decade, the Secretary of Transportation would redesignate the PFN based on the same process.

States would be able to designate "critical rural freight corridors" based on the density of truck traffic if the roadway connects the PFN or Interstate System with sufficiently busy freight terminals. States would be able to spend a maximum of 20% of their freight program apportioned funds on these roads.

The critical rural freight corridors, portions of the Interstate System not designated as the PFN, and the PFN would be designated as the "national freight network (NFM)."⁵¹ States could spend freight program funds on non-Interstate highways or transit system projects if those projects would improve freight flows on nearby or parallel interstate highways more cost-effectively than improving an Interstate segment. A state could also spend up to a maximum of 10% of its freight program apportionment for public or private freight rail or maritime projects, but only if the Secretary of Transportation determines that a project would make significant improvement to freight flow, that the public benefit exceeds the federal cost, and that the project provides a better return than a highway project on the PFN.

Creating a specific funding program for freight movement, as well as requiring states to develop performance measures, will likely elevate consideration of freight needs in the project selection process. The designation of a PFN consisting of about 30,000 miles of highway would concentrate funds on segments most critical to freight movement. DOT has estimated that on 4,700 miles of highway with volume exceeding 8,500 trucks per day, trucks have to travel below the speed limit during rush hours due to congestion, and that on 3,700 additional miles of highway trucks experience stop-and-go conditions during rush hours.⁵² Most of these congested segments are at urban interchanges.⁵³ Because the freight program would rely on apportioned funds, states could still be reluctant to address bottlenecks that are costly to alleviate and would primarily benefit through trucks (as opposed to trucks serving local shippers). Programs such as TIFIA, Projects of National and Regional Significance (PNRS), and CMAQ may be more suitable to funding these types of projects under MAP-21.

The Senate bill would not alter truck size and weight limits, but Sections 32801 and 32802 require DOT to conduct a study of possible changes to the limits.

House Bill

The House bill also appears to concentrate funding for freight transport, but does so by reducing funding for programs not relevant to shippers rather than by creating a separate freight program. Terminating the transfer of federal gas taxes to the mass transit trust fund in the House bill also would leave additional funds for roadway maintenance and construction, potentially benefiting truck transportation. The House bill seeks greater reliance on tolling to finance highway construction, an approach opposed by trucking organizations that prefer fuel tax increases over tolling to boost revenues.

As introduced, H.R. 7 would have increased federal limits on truck weight from 80,000 pounds to 97,000 pounds with the addition of a sixth axle. This was not approved in the Transportation and Infrastructure Committee; instead, the committee approved an amendment calling for a DOT study of the issue. H.R. 7 does contain a provision increasing the permitted length of double trailers that less-than-truckload (LTL) carriers typically use from 28 feet to 33 feet and increasing the permitted length of trailers that truckload carriers typically use to 53 feet. The House bill also increases the permitted length of auto transporters to 80 feet. The bill calls for a four year pilot program to allow up to three states to increase truck weights to 126,000 pounds on 25-mile Interstate Highway segments under certain conditions. The committee report mentions coal transport in West Virginia and timber trucking in Minnesota as participants in this pilot. Also, a weight exemption for idle reduction equipment was increased from 400 pounds to 550 pounds.

For freight provisions related to rail and maritime modes, see the "Rail Provisions" and "Harbor Maintenance Expenditures" sections of this report.

Transportation Planning and Performance Management

Senate Bill

MAP-21 would make substantial changes to transportation planning requirements at the national, state, and local levels. Arguably the biggest change is a requirement for the use of performance management throughout the planning process (Subtitle B, "Performance Management"), an idea that has gained wide currency over the past few years.⁵⁴ MAP-21 proposes that state and metropolitan planning include performance measures and targets. Although the bill includes a set of five national goals (Section 1203),⁵⁵ for the most part the specific performance measures would be developed and performance targets set by the states and metropolitan planning organizations (MPOs) themselves. The consequences of failure to meet the targets are relatively mild, typically requiring a remedial plan of action on the part of the state or MPO.

At the national level, as part of the new National Freight Program, MAP-21 would require the development of a national freight strategic plan by DOT (Section 1115). Among other things, the plan would have to establish "quantifiable performance measures for freight movement on the primary freight network." In order to obligate funding from the new freight program, moreover, each state would be required to set performance targets for freight movement. If a state were to fail to make significant progress toward meeting its performance targets it would be required to submit a freight performance improvement plan to the Secretary of Transportation.

As part of the new National Highway Performance Program (Section 1106), each state would be required to develop a risk-based asset management plan that includes performance targets and an investment strategy. A state that fails to make significant progress toward achieving its targets would have to submit a description of actions it will undertake to achieve them. As part of the planning, the Secretary would have to, among other things, set minimum standards for the condition of pavement on the Interstate System and the condition of bridges on the NHS. If the condition of Interstates and NHS bridges were to fall below that minimum, a state could be required to redirect its federal apportionments to bring those facilities up to par.

In some respects, MAP-21 would leave state planning requirements as they are. Each state would still be required to develop a statewide transportation plan and a statewide transportation improvement program. However, there are some changes (Section 1202). Statewide plans and improvement programs would have to incorporate metropolitan transportation plans and transportation improvement programs without change. Currently, statewide plans need only to be developed in cooperation with the MPO. Similarly, MAP-21 would require states to develop their plans in cooperation with nonmetropolitan areas, a stronger requirement than the current need for "consultation."

As with many other elements of MAP-21's planning provisions, states would be required to incorporate a performance-based approach into transportation planning. Performance measures and targets would have to be coordinated with those developed in other planning efforts, such as the national freight strategic plan. The performance plan would have to include a financial plan.

In terms of metropolitan transportation planning (Section 1201), MAP-21 proposes to create two tiers of MPOs, Tier I in areas with populations of 1 million or more and Tier II in areas of less than 1 million. Tier I and Tier II MPOs would have to meet certain, but presumably different, minimum technical requirements having to do with modeling, data, staffing, and other planning elements. The Secretary would be required to issue regulations establishing these minimum requirements one year from the date of enactment. For Tier I MPOs, MAP-21 will require performance-based planning and targets, elements that will be evaluated by DOT as part of an MPO's certification. According to MAP-21, requirements for Tier II MPOs will be more at the discretion of the Secretary and may include performance measures. MAP-21 also includes provisions for the optional development of multiple scenarios, sometimes known as blueprint planning. MAP-21 provides that both Tier I and Tier II MPOs are allowed to select projects from their TIPs in consultation with states, as is the case now, but MAP-21 adds that it must also be done with the concurrence of the facility owner.

As part of the rewriting of the metropolitan planning provisions, MAP-21 proposes to require the designation of MPOs only in urbanized areas of 200,000 population or more, up from 50,000 or more as required in current law. Nevertheless, MPOs in urbanized areas below 200,000 could be designated by agreement between the governor and local officials, although these MPOs would have to meet the minimum technical requirements as determined by the Secretary for Tier II MPOs. Existing MPOs in areas under 200,000 population, unless reaffirmed by the MPO and governor, and approved by the Secretary, are to be terminated three years after regulations are promulgated for Tier II MPOs.

One other intent of MAP-21 appears to be consolidating metropolitan planning within a single MPO in each urban region. However, the proposed legislation provides that more than one MPO can co-exist if the governor and an existing MPO decide that it is appropriate for an area.

House Bill

Like MAP-21, H.R. 7 contains a number of provisions pertaining to national transportation planning, performance measurement, and statewide and metropolitan transportation planning. H.R. 7 would require the development of a national strategic transportation plan by DOT, which would be required to solicit a list of projects of national and regional significance from states for inclusion in the plan. The national plan is to include an estimate of costs and is to be updated every two years.

H.R. 7 also would require the development of a national performance management system to "track the Nation's progress toward broad national performance goals for the Nation's highway and public transportation systems" (Section 5206). This system is to include national performance measures and targets, and a state performance measurement system including performance targets, strategies, and reporting requirements. States would be required to report annually on their progress toward meeting the performance targets.

In the statewide transportation planning process, H.R. 7 would require the identification of projects of national and regional and statewide significance in the long range plan. H.R. 7 also includes requirements for including measures aimed at solving congestion problems at airports and in freight rail corridors, and considerations having to do with ports and inland waterways. H.R. 7 adds a requirement for planning to consider the role intercity buses might play in reducing congestion, pollution, and energy consumption, and the ways in which investment might maintain and improve the existing intercity bus system, including buses that are privately owned and operated. H.R. 7 would also create a role in project selection for regional transportation planning organizations in areas that do not have a designated MPO.

In the metropolitan transportation planning process, H.R. 7 proposes to increase the urbanized population threshold for the designation of an MPO from 50,000 to 100,000 (Section 4001). Existing MPOs in areas under 100,000 may continue to be designated unless the governor and localities agree to terminate the designation. H.R. 7 also adds a requirement for metropolitan planning to consider the role of intercity buses.

Accelerating Transportation Project Delivery

Budgetary pressures at all levels of government have increased concern about using resources for transportation projects as effectively as possible. The speed with which transportation projects are delivered, and the role the federal government plays in the project delivery process, have received particular attention. (See CRS Report R41947, Accelerating Highway and Transit Project Delivery: Issues and Options for Congress, by William J. Mallett and Linda Luther.)

Both the House and Senate proposals include provisions intended to expedite project delivery by changing elements of the environmental review process. For individual highway and transit projects, activities included within that process may begin during the planning stage of project development and are generally concluded during the preliminary engineering and design stage. The process involves preparing documentation and analysis necessary to demonstrate that all potential project-related impacts to the human, natural, or cultural environment are identified; the effects of those impacts are taken into consideration among other factors considered during the decision-making process (e.g., economic or community benefits); and compliance with all state, tribal, or federal requirements, applicable as a result of those impacts, is met.

Depending on project-specific impacts, various environmental requirements may apply to a given transportation project. Those requirements may involve activities such as obtaining necessary permits from the Army Corps of Engineers or the U.S. Coast Guard for a bridge reconstruction project; determining activities necessary to mitigate project effects on a historic site in consultation with a State Historic Preservation Office; or identifying a project alternative that avoids adverse impacts to parks, recreation areas, wildlife refuges, or historic sites or structures. For all proposed federal-aid highway or transit projects, some level of documentation, analysis, and review will be required pursuant to NEPA. Under NEPA, among other requirements, federal agencies must identify and consider the environmental impacts of a proposed action before proceeding with it.⁵⁶

Before final design activities, property acquisition, or project construction can proceed, the FHWA or FTA must approve the NEPA documentation. Further, it is DOT policy that all environmental investigations, reviews, and consultations be coordinated as a single process, and compliance with all applicable environmental requirements be reflected in the NEPA document.⁵⁷

Under this umbrella compliance process, the distinction between what is required by NEPA and requirements identified during the NEPA compliance process may be blurred. Recognizing that distinction is relevant in identifying root causes of project delay associated with, or effective solutions that may expedite, the environmental review process. Recent legislative efforts intended to expedite environmental reviews (enacted under SAFETEA and TEA-21) focused primarily on elements of NEPA compliance, particularly requirements applicable to major, new highway and transit projects.

Provisions applicable to the environmental review process in H.R. 7 and MAP-21 also focus primarily on NEPA compliance, but extend beyond NEPA. Generally, the House proposal would involve more sweeping changes to the existing process than proposed in MAP-21. Provisions in both bills are broadly intended to expedite highway and transit project delivery by changing existing environmental compliance requirements. A complex range of factors would affect the degree to which the proposed changes may accelerate environmental reviews, and ultimately project delivery, or may result in procedural changes that may actually slow project delivery (e.g., by removing mechanisms to coordinate the potentially complex environmental compliance process or by adding requirements to that process).⁵⁸

Senate Bill

Provisions Applicable to the Environmental Compliance Process

The environment-related provisions in MAP-21 apply to activities associated with the environmental review phase of transportation project development. The "environmental review process" is the phase in overall project development in which applicable state, tribal, and federal environmental compliance requirements, including those established under NEPA, are identified and documented. Compliance with those requirements may require input or cooperation from federal, state, or tribal agencies. Before final design activities, property acquisition, purchase of construction materials or rolling stock, or project construction can proceed, FHWA or FTA must ensure that the environmental review process for that project is complete. Under NEPA, that review process must include an environmental impact statement if the project may "significantly" affecting the environment. If the significance of a project's environmental impacts is unclear, an environmental assessment (EA) must be prepared to make that determination.

Projects that do not individually or cumulatively have significant environment impacts are categorically excluded from the requirement to prepare an EIS or EA. Hence, they are referred to as categorical exclusions (CEs). DOT's NEPA regulations list two groups of actions that are generally CEs -- those that require no additional DOT approval and those that may be processed as CEs when appropriately documented and approved by DOT.⁵⁹ Since 1998, approximately 90% of highway projects approved annually by FHWA were processed as CEs and approximately 6% required an EA.⁶⁰ While such projects may have "no significant environmental impact under NEPA," they may still be subject to other environmental requirements pursuant to the National Historic Preservation Act, the Clean Water Act, the Endangered Species Act, or other laws.

The most significant changes to the environmental review process in MAP-21 are those that would be established under Section 1313, "Accelerated Decisionmaking," and Section 1316, "Review of Federal Project and Program Delivery." Under Section 1313, MAP-21 would amend existing environmental review procedures to establish new requirements applicable to "issue resolution."⁶¹ The provisions would establish criteria intended to ensure that all parties to the environmental review process are on schedule to meet project deadlines and to resolve disputes that may delay completion of that process or result in denial of any approval required under applicable law.⁶²

Under Section 1313, MAP-21 would also establish "financial transfer provisions" applicable to an agency that fails to issue or deny a permit, license, or other approval required under any federal law. Under certain conditions, the applicable office of the head of the agency responsible for the delay would be required to transfer $10,000 or $20,000, once a week,⁶³ to the agency or divisions charged with rendering a decision regarding an application. A transfer would be required on the later of 180 days after an application for a permit, license, or approval is complete; or 180 days after a final project decision is made, pursuant to NEPA. The transfer would not be required if the delay is of no fault of the agency.

Agencies responsible for issuing approvals or permits for DOT projects vary depending on the impacts of a project, but may include EPA, the U.S. Army Corps of Engineers, or the Department of the Interior's U.S. Fish and Wildlife Service. A given divisional, regional, or local program office within one of these agencies may process hundreds of permit applications annually for a range of regulated activities -- for projects beyond those applicable to transportation project development (e.g., private land development, mining operations, oil and gas development, cattle grazing). Agency under-staffing or lack of funds is sometimes cited as a cause of delay in issuing necessary approvals or permits. A requirement to redirect limited agency funds for the purpose of expediting a single transportation project approval may have the unintended affect of slowing other applications being processed by that office.

Under Section 1316, MAP-21 would require DOT to prepare assessments that compare the completion times of CEs, EAs, and EISs initiated after calendar year 2005 to those initiated during a period prior to calendar year 2005; and to compare the completion times of CEs, EAs, and EISs initiated during the period beginning on January 1, 2005 and ending on the date of enactment of MAP-21 to those initiated after MAP-21's enactment. DOT would be required to report this information to Congress within one year after enactment. No specific funding is authorized to complete the required assessments.

Determining the time it takes to complete the various NEPA documents, as directed under Section 1316, will likely be challenging. Information indicating when individual EIS preparation begins and ends is available, but is not necessarily an accurate reflection of the time it takes to complete the NEPA process. Little or no data are available for projects processed with EAs or CEs. State DOTs generally do not attempt to track the time it takes to complete the NEPA process or any other environmental compliance obligations. Also, NEPA compliance fits into the overall project delivery process as a subset of one or more major elements of project development. Extracting accurate information about the time it takes to complete activities specific to the NEPA process may not be possible. To meet Congress's directive, DOT may require states to begin tracking this information and report it to DOT. Such a requirement would be an addition to the existing environmental clearance process.

MAP-21 provisions applicable to CEs generally involve directives to DOT to change existing regulatory requirements applicable to such projects. The most significant provisions applicable to CEs, "Programmatic Agreements and Additional Categorical Exclusions" (Section 1310), would direct DOT to survey state agencies for suggested new CEs. From those suggestions, DOT would be required to promulgate regulations adding projects to the existing regulatory list of CEs. Also, DOT would be directed to change existing CE regulations by moving specific projects listed as requiring documentation and approval from DOT to the list of projects for which no additional DOT approval is required (i.e., to move certain projects from 23 C.F.R. § 771.117(d) to § 771.117(c)). Other CE-related provisions would specify DOT agency roles in meeting NEPA compliance requirements for multimodal projects (Section 1306) and direct DOT to promulgate regulations specifying criteria under which specific projects located solely within the right-of-way of an existing highway may be designated as categorical exclusions (Section 1309).

Provisions that would continue or amend environment-related programs or procedures established under SAFETEA include the following:

• Assistance to Affected State and Federal Agencies -- would continue to authorize the use of federal transportation funds for dedicated staff at a federal agency that would support activities that directly contribute to expediting and improving transportation project planning and delivery. However, under this section, before DOT funding approval, the agency receiving DOT funds and the state (e.g., project sponsor) would have to enter into a memorandum of understanding establishing project priorities to be addressed by using those funds (§ 1305).

• State Assumption of Responsibilities for Categorical Exclusions -- would allow states to use apportioned transportation funds for attorneys' fees directly attributable to activities associated with eligible activities under this section (§ 1307).

• Surface Transportation Project Delivery Program -- would make permanent the "surface transportation project delivery pilot program" that allowed five specific states to assume federal responsibilities for environmental reviews required under NEPA or any other federal law. Under the new program, any state could participate and DOT would be required to make certain determinations regarding a state's ability to implement the program.

House Bill

In the House bill, provisions applicable to the environmental review process are largely included under Title III, "Environmental Streamlining" (these provisions would generally amend federal-aid highways requirements, but may also apply to transit projects), and Subtitle C, "Project Development and Review," under Title VIII, Railroads (which would amend Title 49 requirements applicable to "Rail programs"). Provisions included under these titles would extensively change the NEPA requirements applicable to federal highway and transit projects. As proposed, NEPA would no longer apply to highway or transit projects that cost less than $10 million or for which federal funding constitutes 15% or less of total project costs. For projects still subject to NEPA, H.R. 7 would significantly change the NEPA compliance process by, among other requirements, changing the range of potential project alternatives that must be considered; the format of and analysis required in certain NEPA documents; and the level of evaluation required to determine cumulative project impacts. The House bill would also require agencies outside DOT to adhere to specific timeframes to provide necessary permits or approvals; establish a 270-day deadline for completing the overall environmental review process; and establish limits to judicial review and to legal sufficiency standards applicable to environmental documents. Provisions in the House proposal would also significantly amend requirements applicable to parks, wildlife refuges, recreation areas, and historic sites or properties.

Non-environmental Provisions Accelerating Project Delivery

Outside of the environmental review process, MAP-21 would make three main changes to existing law in an attempt to speed project delivery. First, in Section 1303, MAP-21 would add specific authority for state DOTs to enter into construction manager/general contractor (CM/GC) contracts. According to FHWA, CM/GC contracts occupy a middle ground between the traditional design-bid-build construction method and the more innovative design-build method in which a single contractor is responsible for all the design and construction work.⁶⁵ With a CM/GC contract, a state DOT employs a general contractor to provide advice during the design phase. If agreement can be reached on price and other details, the same firm may then be employed to build the project. With intimate knowledge of the project, it is believed the contractor is able to enter into such an agreement and can begin construction tasks before the design work is complete, thereby accelerating the delivery of the project. H.R. 7 also provides specific authority for state DOTs to enter into CM/GC contracts.

Second, MAP-21 would increase the federal funding share (normally 90% for Interstate Highway projects and 80% for other projects) by 5% on highway projects that demonstrate some kind of innovative project delivery method or technology (Section 1304). This applies to projects funded from the National Highway Performance Program, the Transportation Mobility Program, and the National Freight Program (the increased federal share is limited to 10% of a state's apportionments under these programs). Examples of innovations listed in MAP-21 include prefabricated bridge elements, digital three-dimensional modeling technologies, and design-build and CM/GC contracting methods.

Third, MAP-21, in Section 1315, would create a pilot program, limited to not more than five states, permitting advance payment of moving costs for people and businesses forced to relocate because of a highway project.⁶⁶ H.R. 7 has a similar provision, but one that does not limit the number of states that can participate. These advance payments may be combined with payments to compensate for the acquisition of real property. Currently, moving costs are reimbursable. Presumably, this "Alternative Relocation Payment Demonstration Program" is intended to speed the removal of people from the project right-of-way. However, it is a relatively minor change compared with other suggested alternatives to laws governing the acquisition of property and relocation of those displaced. For example, state transportation officials have recommended allowing states to substitute their own property acquisition and relocation laws if they meet federal requirements.⁶⁷

Amendments to the CMAQ Program

Under Section 1113 of MAP-21, the Congestion Mitigation and Air Quality Improvement Program (CMAQ) would be essentially re-written.⁶⁸ The CMAQ program was established to provide funds for projects and programs which may reduce the emissions of transportation-related pollutants that may cause an area within a state to exceed certain air quality standards.

Under the Clean Air Act, the Environmental Protection Agency (EPA) was directed to set air quality standards for certain pollutants. Of relevance to transportation planning agencies were the resulting National Ambient Air Quality Standards (NAAQS) established for ozone, carbon monoxide, and particulate matter (distinguished as coarse and fine particulate, referred to as PM₁₀ and PM_2.5, respectively).⁶⁹ A geographic area that meets or exceeds NAAQS for a particular pollutant is considered to be in "attainment"; an area that does not meet a standard is in "nonattainment." A "maintenance" area is one that was previously in nonattainment, but is currently attaining the NAAQS subject to a maintenance plan. The CMAQ program was established to provide funds particularly for projects in nonattainment and maintenance areas.⁷⁰

Under MAP-21, CMAQ program goals, criteria specifying project eligibility, and requirements regarding partnerships with private entities would be largely unchanged. However, proposed amendments to the CMAQ program would significantly change how program funding levels are established and how those funds would be apportioned to and distributed within individual states.

Since the early 1990s Congress authorized specific annual CMAQ program funding levels. Those funds have been apportioned to each state according to a formula based on the state's population and regional pollution levels (e.g., depending on an area's level of nonattainment for a particular pollutant).⁷¹ MAP-21's CMAQ apportionment for FYs 2012 and 2013 would not be a specific dollar amount. Instead, as discussed in "Senate Bill Highway Formula Programs," CMAQ funds apportioned to each state would be tied to the amount of CMAQ funds apportioned to that state in FY2009 plus 10% of the apportioned amount to STP funds for that year. CMAQ funds apportioned to each state would then be distributed within each state based on certain limitations and suballocations established under the new CMAQ program.

CMAQ Distribution Limitations

Of the CMAQ apportioned funds, a state would be required to reserve the amount attributable to the 10% of previously-apportioned STP funds for any of the following projects or activities:

• transportation enhancements⁷²

• the recreational trails program⁷³

• specific activities associated with planning, designing, or constructing "boulevards, main streets, and other roadways"⁷⁴

• projects that involve "providing transportation choices," such as on-road and off-road trail facilities for pedestrians and for bicycles and other nonmotorized forms of transportation⁷⁵

Of the remaining CMAQ funds apportioned to each state, half would be "suballocated" for projects within each designated nonattainment or maintenance area. Those funds would be distributed in accordance with a formula developed by the state. However, that formula would have to be approved by DOT and be weighted by population and the severity of pollution in each nonattainment or maintenance area (in accordance with factors established in MAP-21).⁷⁶ Also, half of the suballocated funds would have to be obligated based on the population of areas in nonattainment or maintenance areas for fine particulates. Further, 30% of the suballocated funds would have to be set aside to purchase low-emissions construction equipment and vehicles.⁷⁷

The remaining CMAQ funds apportioned to a state (e.g., not suballocated or reserved) would be available to the state for eligible projects in any nonattainment or maintenance areas. States in attainment for NAAQS may use their apportioned funds for CMAQ-eligible projects.

Additional provisions in MAP-21 may significantly change how the CMAQ program is implemented in individual states. Those provisions include the following:

• Proposed Section 149(f), Priority Considerations. In nonattainment or maintenance areas for fine particulates, PM_2.5, states and MPOs would be directed to prioritize CMAQ fund distribution for projects proven to reduce those pollutants, including diesel retrofits.

• Proposed Section 149(h), Evaluation and Assessment of Projects. DOT and EPA would be directed to develop a table illustrating the cost-effectiveness of a range of projects. States and MPOs would be required to consider this information in developing performance plans for CMAQ-funded projects.

• Proposed Section 149(i), Optional Programmatic Eligibility. Technical assessment of a selected program or projects, conducted at the discretion of MPOs, would be allowed to demonstrate emissions reductions. Those data could be used to show that similar projects meet CMAQ eligibility requirements.

• Proposed Section 149(k), Performance Plan. Requires MPOs to prepare performance plans for CMAQ-funded projects.

The House bill also includes provisions that would amend CMAQ program requirements. However, the provisions in the House bill are not as sweeping as those in the Senate bill. Provisions included under Section 1108 of the House bill would amend the project eligibility requirements specified under 23 U.S.C. § 149(b).

Alternative Fuels and Advanced Technology Vehicles

Current laws provide incentives to promote the use of alternative fuels and advanced technology vehicles. These incentives include tax credits for the purchase of plug-in vehicles and for the production of biofuels from cellulose. (Other credits, including a credit of 45 cents per gallon to blend ethanol into gasoline and a credit for the purchase of alternative fuel vehicles, have expired.) Non-tax incentives include credits automakers receive under the Corporate Average Fuel Economy (CAFE) program for the production and sale of alternative fuel vehicles.

Various highway programs also provide non-tax incentives. For example, SAFETEA allowed states to permit low-emission and energy-efficient vehicles to travel in high occupancy vehicle (HOV) lanes, although this authority expired at the end of FY2009. H.R. 7 would extend this authority through the end of FY2016; S. 1813 would extend this authority indefinitely. However, H.R. 7 (Section 1205) and S. 1813 (Section 1510), would also limit states' authority to exempt these vehicles if the HOV lanes become "degraded" to the point that vehicles fall below minimum average speed -- generally 45 mph -- over 90% of the time during peak travel hours. Under current law, states must limit exemptions if the exempted vehicles cause the degradation, while under both the House and Senate bills, actions to address degradation include limits to access regardless of the cause of the degradation.

To support the expansion of electric vehicle infrastructure, H.R. 7 (Section 1720) and S. 1813 (Section 1509), would allow highway funds to be used for new charging stations at existing or new parking facilities funded through the law.

S. 1813 (Section 20009) would also amend the existing Clean Fuels Grant Program. The current program authorizes grants to states and public transportation authorities to purchase alternative fuel, advanced diesel, and other low-emission buses. S. 1813 would amend definitions to include both buses and other vehicles, although at least 65% of the funds would be used for clean fuel buses and at least 10% for clean fuel bus facilities. S. 1813 would also explicitly include "zero emission buses" that do not directly emit carbon or particulate matter. H.R. 7 has no comparable provisions.

Transit

Senate Bill

The Senate's public transit provisions are contained in Division B of MAP-21 and titled the Federal Public Transportation Act (FPTA) of 2012. The bill authorizes $10.458 billion for federal transit programs annually for FY2012 and FY2013, the current funding level, with $8.361 billion coming from the mass transit account of the highway trust fund and $2.098 billion from the general fund (see Table 5).⁷⁸

        Table 5. Proposed Annual Federal Transit Funding in Senate Bill

              Table 6. Proposed Federal Transit Funding in H.R. 7

Program Restructuring

The FPTA in MAP-21 contains some significant restructuring of the federal transit program. The existing Fixed Guideway (Rail) Modernization Program would be replaced with a new State of Good Repair (SGR) Grant Program. This proposed program has four components:

• The High Intensity Fixed Guideway SGR Formula Program would distribute funding by formula for the maintenance, repair, and replacement of fixed guideway public transit defined as: using and occupying a separate right of-way for the exclusive use of public transportation; rail; using a fixed catenary system; a passenger ferry system; or a bus rapid transit system. The facility must be at least seven years old. Funding for this program would come from the mass transit account of the highway trust fund, and would be distributed by a new formula that uses vehicle miles and route miles.

• The Fixed Guideway SGR Grant Program would distribute competitive grants for the upkeep of fixed guideway systems. Funding for this program would come from the general fund.

• The High Intensity Motorbus SGR program would distribute funds by formula for public transportation provided on a facility with access for other high-occupancy vehicles. The facility must be at least seven years old. Funding comes from the mass transit account, and would be distributed by a formula that uses fixed-guideway motor bus vehicle miles and route miles.

• The Bus and Bus Facilities SGR program would distribute competitive grants for the upkeep of buses and bus facilities. Funding for this program, $75 million, would be set aside from the New Starts program (Capital Investment Grants).

Another significant change would be to combine the Formula Grants for Elderly Individuals and Individuals with Disabilities Program and the New Freedom Program, which provides formula funding for the disabled, into a single program to be called Formula Grants for Enhanced Mobility of Seniors and Individuals with Disabilities.

The current Jobs Access and Reverse Commute program is shifted to be part of the Urbanized and Non-Urbanized Area Formula programs. The renamed Access to Jobs program would require that recipients spend at least 3% of their Urbanized Area apportionments on projects that are designed to help low-income individuals travel to and from jobs. Under the Non-Urbanized Area program, Access to Jobs is an eligible expense.

The Senate bill also would create two new programs that mirror existing highway programs. These are the Appalachian Development Public Transportation Assistance Program, with $20 million set aside from the Non-Urbanized Area funds, and the Public Transportation Emergency Relief Program. This emergency relief program, akin to the existing Highway Emergency Relief Program, would provide funding for capital and operating costs in the event of a natural or man-made disaster. The bill authorizes such sums as may be necessary to carry out this new program.

As is currently the case, funds from the Non-Urbanized Area Formula Program are also set aside for transit on Indian reservations. This legislation would double the amount set aside from $15 million to $30 million annually. Of the $30 million, $20 million would be distributed by formula and $10 million competitively.

Although it eliminates some programs, the House bill largely maintains the current structure of the federal transit program. Among other things, the House bill eliminates the Clean Fuels Grant Program, the Transit in Parks Program, and the Growing and High Density State Formula. The House bill also combines into a single program the New Freedom Program, the Elderly Persons and Persons with Disabilities Program, and the Jobs Access and Reverse Commute Program.

The House bill proposes to distribute funding for the Bus and Bus-Related Facilities Program by formula. In SAFETEA this program was a heavily earmarked discretionary program. Program funding would only go to providers of bus transit in urbanized areas that do not provide heavy rail, commuter rail, or light rail. Currently, funding from this program is available to all types of transit agencies, providers of bus and rail as well as bus-only providers, in both urbanized and non-urbanized areas.

Another significant change proposed by H.R. 7 is to provide an incentive to contract out bus service. H.R. 7 provides that if at least 20% of fixed route bus service is contracted out, then the provider can lower its cost share of bus and bus facilities capital projects from a minimum of 20% to a minimum of 10%. H.R. 7 also adds that private intercity and charter operators cannot be barred from federally funded facilities.

New Starts Program

The bill would make substantial changes to the New Starts program. It would allow New Starts program funds for substantial investments in existing fixed guideway systems that add capacity and functionality. These types of projects are termed "core capacity improvement projects." It also authorizes the evaluation and funding of a program of interrelated projects.

The bill also attempts to simplify the New Starts process by reducing the number of major stages from four to three. The new stages are termed project development, engineering, and construction.⁷⁹ To enter the project development phase, the applicant would be required to apply in writing to the Secretary of Transportation and initiate the NEPA process. (For more on the NEPA process, see Accelerating Transportation Project Delivery above.) The bill would eliminate the alternatives analysis that is separate from the alternatives analysis in NEPA as currently required by law. Along with the NEPA work, during project development the project sponsor would have to develop the information needed by the Secretary to review the project justification and the local financial commitment. Generally, the project applicant would have two years to complete project development.

The project is permitted to enter into the Engineering Phase once the NEPA process is concluded with a Record of Decision (ROD), a Finding of No Significant Impact (FONSI), or a Categorical Exclusion, the project is selected as the locally preferred alternative, the project is adopted into the metropolitan plan, and is justified on its merits. After Engineering, if successful, a project would then be eligible to enter into a full funding grant agreement with the Secretary for federal funding assistance and to move into the construction phase.

The Senate bill also tries to advance projects more quickly using special warrants for projects of which the federal share is $100 million or less or 50% or less of the total project cost. But the bill would eliminate the Small Starts program that provided dedicated funding to projects requesting $75 million or less in federal assistance and costing in total $250 million or less. The act also would create a pilot program for expedited project delivery for three projects, as the bill states, "to demonstrate whether innovative project development and delivery procurement methods or innovative financing arrangements can expedite project delivery for certain meritorious new fixed guideway capital projects and core capacity improvement projects."

The House bill would also make some changes to the New Starts program. Unlike the Senate bill, the House bill would maintain the distinction between New Starts and Small Starts projects. The House bill allocates $150 million of the total New Starts funding for Small Starts projects. As with the Senate bill, the House bill would eliminate the alternatives analysis, although the evaluation of a project must still be made against a no-action alternative. The House bill also includes some other project expediting provisions, including the use of special warrants to speed up projects that may not need a full evaluation, such as new urban circulator service. The House bill would change, to some extent, the project justification criteria used to evaluate projects. For example, it drops the costs of sprawl, including infrastructure costs, and supportive land use as specific evaluation factors, but adds as factors private contributions to the project and intermodal connectivity. The House bill also would add private contributions as a factor in the local financial commitment criteria.

Operating Assistance

For the most part, the Senate bill would maintain the prohibition on the use of federal funds for operating expenses in urbanized areas of 200,000 or more people. However, it adds some exceptions to this general prohibition. For small bus transit systems in urbanized areas of 200,000 or more people, those operating 75 or fewer buses in peak service would be allowed to use up to 50% of their Urbanized Area apportionments for operating expenses. For transit systems operating 76 to 100 buses in peak service the allowable amount would be 25% of their Urbanized Area apportionment. In addition, the bill would allow the use of Urbanized Area formula funds for operating expenses in urbanized areas of 200,000 or more people with high unemployment rates for up to three years. The maximum allowable amount would be 25% of an area's apportionment in the first year and 20% for years two and three.

Like the Senate bill, the House bill would make some modification to the prohibition of using federal funds for operating expenses in urbanized areas of 200,000. However, the way in which this is done in the House bill differs from the Senate bill. H.R. 7 would allow transit bus systems in urbanized areas of 200,000 or more that operate 100 buses or fewer in peak service to use federal funding for operating expenses. If the system operates between 76 and 100 buses, federal funds could be used for operating expenses with a cost share of 25% federal, 75% local. If the number of buses operated in peak service is 75 or less then the cost share would be 50% federal, the same cost share provided to transit agencies in urbanized areas of 200,000 or less and nonurbanized (rural) areas. H.R. 7 also would increase the share of urbanized and nonurbanized formula funds that may be used for Americans with Disabilities Act (ADA) paratransit from 10% to 15%. These funds may be used for capital and operating expenses.

Rail Provisions

Both the Senate and House bills contain provisions related to passenger rail (intercity and commuter) and freight rail.

Intercity Passenger Rail

Senate Bill

Section 35101 calls for development of a national rail plan, including passenger and freight, to guide future investments and illustrate on a map priority routes to be served. It also calls for DOT, in coordination with states and others, to develop regional rail plans, excluding the Amtrak-owned Northeast Corridor (NEC), to refine the national plan with respect to each region. The regional plans would include maps identifying rail alignments and station stops, among other things. Finally, states may also create state rail plans that further refine the appropriate regional plan with respect to a state. These plans would be relevant to the approval process for federal capital grants for intercity passenger service.

Regarding the NEC, the bill makes amendments to the NEC advisory commission created by the Passenger Rail Investment and Improvement Act of 2008 (P.L. 110-432) and would require Amtrak to submit a new plan for high-speed service (200 mph or greater) in the corridor.

The bill would require DOT, within one year of enactment, to develop guidance on how to better measure train delays, including automatic measurement. It would require DOT to conduct a data needs assessment to support development of intercity passenger rail, including cost-benefit analysis and modeling of estimated ridership. Within two years, DOT would be required to survey and report on track access arrangements for intercity passenger rail operating on other railroads' tracks and the processes for resolving disputes over that access.

Rolling Stock Equipment Pool

The bill furthers development of an equipment pool of standardized cars for corridor intercity passenger services (with endpoints less than 750 miles apart) by creating a corporate or cooperative entity that is controlled by Amtrak and states funding corridor services. The entity would serve as the equipment supplier and manager of the standardized cars to be used in corridor service. The bill also would amend the capital grant program for corridor passenger service to include Amtrak, not just states, as an eligible recipient.⁸⁰ The intent of the equipment pool is to achieve economies of scale in car production and maintenance but a drawback is that it could discourage innovation in car design.

Implementation of positive train control (discussed below) could have a significant impact on domestic car design. Federal Railroad Administration (FRA) regulations require passenger cars be designed to limit damage in a collision. This requirement distinguishes U.S. from foreign passenger cars whose rail systems put more emphasis on crash avoidance than crash survival. As a result, U.S. cars are much heavier due to more robust bulkhead requirements. However, the implementation of positive train control (a crash avoidance system) could lead the FRA to modify its requirements to be more in line with foreign requirements. Notwithstanding "Buy America" requirements, this has the potential to facilitate a global market for passenger car equipment.

House Bill

The House bill would repeal the congestion grant program, which authorizes grants to states or Amtrak to reduce congestion or facilitate ridership growth on high-priority rail corridors. This program was folded into Track 1 of the Federal Railroad Administration's High-Speed and Intercity Passenger Rail Grant Program in 2009, and although the congestion grant program was authorized at $100 million annually through FY2013, Congress provided no funding for this program -- or any other intercity passenger rail grant program -- in FY2011 or FY2012. H.R. 7 would also reduce the authorized funding level for Amtrak's operating assistance grants, a subject not addressed in MAP-21 (see Table 7).⁸¹

      Table 7. Authorized Funding for Amtrak Operating Assistance

Freight Rail

Senate Bill

Section 36401 would amend a federal grant program, created in SAFETEA-LU, for relocating railroad lines having adverse affects on traffic flow or economic development to include the lateral or vertical relocation (e.g., an overpass or underpass) of a road, not just the rail line.⁸² Section 36408 would amend the Railroad Rehabilitation and Improvement Financing (RRIF) Program, a government loan program for freight and passenger railroads, to accept as collateral a state or local subsidy or dedicated revenue stream. It also would expand eligible uses of a RRIF loan to include pre-construction activities such as preliminary engineering, environmental review, and permitting.

The Senate bill proposes some modest changes to laws governing the Surface Transportation Board (STB), which regulates certain aspects of the rail industry. It would raise the ceiling on the maximum total dollar value of freight charges that shippers (railroad customers) can bring before the STB under its simplified rate case procedures, from $1 million to $1.5 million in rate relief under the "three-benchmark" procedure, and from $5 million to $10 million under the "simplified stand-alone-cost" procedure.⁸³ The bill would impose shorter procedural deadlines for rate relief cases brought under the more complex "stand-alone cost" methodology. The STB would be required to study whether to incorporate railroad asset replacement costs in its annual examination of railroad revenue adequacy, a change advocated by railroads but rejected by the STB in 2008.⁸⁴ The bill would require the STB to compile and report on its website railroad service complaints and conduct a review of the agency's staffing needs.

House Bill

The House bill would repeal a capital grant program for class II and III freight railroads (smaller, regional and shortline railroads). The bill contains provisions intended to facilitate access to the RRIF loan program.

Positive Train Control

Congress mandated positive train control (PTC) in 2008⁸⁵ in response to a deadly collision between a commuter and freight train in the Los Angeles area and releases of poisonous chemicals from rail tank cars after derailments in other parts of the country. Passenger railroads (intercity and commuter) and freight railroads on routes carrying toxic-by-inhalation products are required to install PTC. PTC relies on radio signaling between devices along the track and in the locomotive that is supposed to override human error in train control. Railroads and others have objected to PTC as a high-cost remedy for relatively rare types of accidents. Lack of adequate spectrum in urban areas to carry the radio signals has been cited as an obstacle to implementation.

The Senate bill would allow DOT to extend the deadline beyond December 31, 2015, for implementing PTC technology, upon application by a railroad, if it is determined to be infeasible. DOT could extend the deadline by one year increments but not beyond December 31, 2018. The Senate bill would also make PTC implementation an eligible use of RRIF funding (see below) and requires a joint DOT/FCC study of the spectrum needs for PTC.

The House bill would extend the deadline for implementing PTC to 2021 for routes with passenger traffic and essentially eliminates the deadline for routes carrying certain toxic chemicals. The House bill would allow railroads the option of implementing equivalent safety measures and adjusting the routes over which the technology would be installed.

Highway Safety

Senate Bill

Highway safety programs are the responsibility of the National Highway Traffic Safety Administration (NHTSA). The Senate bill (Division C, Title I of S. 1813 as amended by SA 1761) would retain most of the existing NHTSA grant programs and would create another: an incentive grant program to encourage states to make texting while driving, and the use of a cell phone by drivers under age 18, primary traffic offenses.⁸⁶ It would promote greater awareness of motor vehicle defect reporting, and would increase the maximum civil penalty for violations of vehicle safety defect rules from $15 million to $230 million(see Figure A-9). And it would require, beginning with model year 2015, that passenger motor vehicles be equipped with event data recorders.⁸⁷

House Bill

NHTSA currently has 10 programs making grants to states -- one formula program and nine incentive grant programs -- plus several other programs promoting highway safety. The House bill, H.R. 7, would consolidate all of these into one general highway safety grant program, at a reduced level of funding. The House bill would prohibit the use of federal funding to measure the rate of motorcycle helmet usage or to create checkpoints for motorcyclists.

The Senate bill would authorize significantly higher highway safety grants in FY2012 and FY2013 than the House bill (see Table 8).

               Table 8. Highway Safety Grants to States

Both the House and Senate bills would create a clearinghouse of drug and alcohol test results by commercial drivers in order to prevent drivers who have failed a test from avoiding penalties by switching employers. Both bills would also strengthen DOT's ability to act against "reincarnated carriers" -- bus companies whose operations have been suspended due to safety violations which then resume operations under a new name. The two bills provide similar levels of funding for truck safety grants to states in FY2013 (see Table 9 and Figure A-10.)

                Table 9. Truck Safety Grants to States

MAP-21 would authorize $400 million for each of FY2012 and FY2013 for transportation research and education; H.R. 7 would authorize $440 million annually (see Table 10). Both bills would direct the Secretary of Transportation to carry out a technology deployment program; MAP-21 includes a competitive grant program to accelerate ITS deployment. Both bills would authorize the Secretary to conduct prize competitions to promote surface transportation innovations. Both bills would direct DOT to conduct studies on improving many aspects of transportation, including safety, lifecycle cost analysis, reducing congestion, assessing infrastructure investment needs, and options for financing. MAP-21 would authorize 35 grants to be awarded on a competitive basis annually to university transportation centers for transportation research; H.R. 7 would authorize 30 such grants annually.⁸⁸

        Table 10. Transportation Research and Education Funding

Both the Senate and House bills contain a provision stating that it is the sense of Congress that revenues in the Harbor Maintenance Trust Fund should be fully spent by the Army Corps of Engineers for maintenance of waterside infrastructure (such as channel dredging and maintenance of jetties and breakwaters). Currently, Congress appropriates just over half of the cargo tax collected for this purpose.⁸⁹

 

Figure A-1. CBO Highway Trust Fund Projections

 

 

[Editor's Note: For a larger, searchable version of this table,

 

see Doc 2012-6670, p. 58.]

 

 

 

 

Figure A-2. American Energy and Infrastructure Jobs Act of 2012

 

 

(H.R. 7 as reported)

 

 

[Editor's Note: For a larger, searchable version of this table,

 

see Doc 2012-6670, p. 59.]

 

 

 

 

Figure A-3. MAP-21 Authorizations

 

 

(Title I)

 

 

[Editor's Note: For a larger, searchable version of this table,

 

see Doc 2012-6670, p. 60.]

 

 

 

 

Figure A-4. MAP-21 Authorizations

 

 

(Title II)

 

 

[Editor's Note: For a larger, searchable version of this table,

 

see Doc 2012-6670, p. 61.]

 

 

 

 

Figure A-5. MAP-21 Apportionments

 

 

(Estimated FY2012)

 

 

[Editor's Note: For a larger, searchable version of this table,

 

see Doc 2012-6670, p. 62.]

 

 

 

 

Figure A-6. MAP-21 Apportionments

 

 

(Estimated FY2013)

 

 

[Editor's Note: For a larger, searchable version of this table,

 

see Doc 2012-6670, p. 63.]

 

 

 

 

Figure A-7. Apportionments Under H.R. 7

 

 

(Estimated average FY2013 to 2016)

 

 

[Editor's Note: For a larger, searchable version of this table,

 

see Doc 2012-6670, p. 64.]

 

 

 

 

Figure A-8. Apportionments Under H.R. 7

 

 

(Estimated FY2013)

 

 

[Editor's Note: For a larger, searchable version of this table,

 

see Doc 2012-6670, p. 65.]

 

 

 

 

Figure A-9. Funding for Highway Safety Programs Proposed in Senate

 

 

[Editor's Note: For a larger, searchable version of this table,

 

see Doc 2012-6670, p. 66.]

 

 

 

 

Figure A-10. Funding for Commercial Vehicle Safety Programs

 

Proposed in Senate

 

 

[Editor's Note: For a larger, searchable version of this table,

 

see Doc 2012-6670, p. 67.]

 

 

 

² CRS Report R41947, Accelerating Highway and Transit Project Delivery: Issues and Options for Congress, by William J. Mallett and Linda Luther.

³ CRS Report R41869, The Donor-Donee State Issue in Highway Finance, by Robert S. Kirk.

⁴ For the CBO cost estimate for H.R. 7, see http://www.cbo.gov/ftpdocs/127xx/doc12751/hr3864.pdf.

⁵ A separate 0.1 cents per gallon tax on all fuels goes into the leaking underground storage tank (LUST) trust fund. LUST is administered by the Environmental Protection Agency. It funds leaking underground storage tank cleanup activities. The authorization of this fund is not addressed in surface transportation legislation.

⁶ In late FY2008, $8 billion was transferred to carry the highway account into the 2009 fiscal year (P.L. 110-318, September 15, 2008). In FY2009 the transfer was $7 billion (P.L. 111-46, August 7, 2009). The Surface Transportation Extension Act of 2010 (P.L. 111-148, March 18, 2010) transferred $14.7 billion more to the highway account. The third rescue package, P.L. 111-147, also transferred $4.8 billion to the mass transit account.

⁷ Information supplied by CBO as part of its March 2012 baseline, March 20, 2012. According to FHWA, a working balance of roughly $4 billion is needed to meet state requests for reimbursement of outstanding obligations in a timely manner. Under current law, the HTF cannot incur negative balances. If the HTF resources were exhausted, spending on programs and activities financed by the fund would continue but at a slower pace as highway taxes are collected.

⁸ Outlays from the highway account during FY2010-FY2011 were depressed because stimulus spending from the general fund temporarily displaced trust fund outlays.

⁹ For many projects the vouchers are submitted when the project is completed.

¹⁰ For a more detailed discussion see Federal Highway Administration, Financing Federal-Aid Highways, (Washington, 2007), pp. 9-10, http://www.fhwa.dot.gov/reports/financingfederalaid/approp.htm#b.

¹¹ Ibid., pp. 19-22. To be contract authority the authorization must refer to Title 23, Chapter 1 of the U.S. Code, and it must be funded out of the highway trust fund.

¹² For a list of FHWA programs that receive funding (apportionments) by formula (including smaller non-"core" formula programs), see Federal Highway Administration, Financing Federal-Aid Highways, Appendix D, http://www.fhwa.dot.gov/reports/financingfederalaid/index.htm.

¹³ Includes Equity Bonus distributions to the Interstate Maintenance, National Highway System, Surface Transportation, and Highway Bridge Program programs.

¹⁴ For a diagram of STP distribution, see FHWA, Financing Federal-Aid Highways, Appendix F, http://www.fhwa.dot.gov/reports/financingfederalaid/appf.htm.

¹⁵ For a description of the complexities of the operation of the Equity Bonus Program see CRS Report R41869, The Donor-Donee State Issue in Highway Finance, by Robert S. Kirk.

¹⁶ For a list of all allocated programs, see FHWA, Financing Federal-aid Highways, Appendix G, "Authorizations for Allocated Programs," http://www.fhwa.dot.gov/reports/financingfederalaid/appg.htm.

¹⁷ Ibid.

¹⁸ CRS Report RL34171, Public Transit Program Issues in Surface Transportation Reauthorization, by William J. Mallett.

¹⁹ See CRS Report RS21164, Highway Finance: RABA's Double-edged Sword, by John W. Fischer.

²⁰ The TE program supports 12 eligible activities, such as provision of pedestrian and bicycle facilities, scenic beautification, and establishment of transportation museums. Under SAFETEA the program receives a 10% set-aside from the Surface Transportation Program, or approximately 1.5% of total federal surface transportation funding.

²¹ 42 U.S.C. § 4321 et seq.

²² Because of a lack of support this provision is reportedly being withdrawn. See, for example, Burgess Everett, "Republicans to Redo House Transportation Bill," Politico, February 23, 2012, http://www.politico.com/news/stories/0212/73230.html.

²³ U.S. Congress, Senate Committee on Finance, Highway Investment, Job Creation, and Economic Growth Act of 2012, Report with additional views to accompany S. 2132, 112^th Cong., 2^nd sess., February 27, 2012, S.Rept. 112-152 (Washington: GPO, 2012), pp. 1-49. SA 1716 did not include the elimination of the cellulosic biofuel producer credit for "black liquor" (a by-product of the kraft process for making paper), which was in the Finance Committee bill as reported. The Joint Committee on Taxation estimates that the change would have increased revenues $1.588 billion over FY2012-FY2016. The most recent estimates are included in a table provided by the Joint Committee on Taxation, March 14, 2012, available at http://www.jct.gov/publications.html?func=startdown&id=4411.

²⁴ Ibid. See also, U.S. Congress, Senate Committee on Finance, Description of the Chairman's Modification to the proposals of the "Highway Investment, Job Creation and Economic Growth Act of 2012," committee print, prepared by the Staff of the Joint Committee on Taxation, 112^th Cong., 2^nd sess., February 7, 2012 (Washington: GPO, 2012), pp. 1-19, http://finance.senate.gov/legislation/details/?id=d923f3c4-5056-a032-52f9-cc852968f453. See also, at the same site, Description of the Chairman's Mark of S. __, the "Highway Investment, Job Creation and Economic Growth Act of 2012," also prepared by the staff of the Joint Committee on Taxation.

²⁵ Title 26 U.S.C. § 420, Transfers of Excess Pension Assets to Retiree Health Accounts.

²⁶ Superfund Amendments and Reauthorization Act (SARA; P.L. 99-499) amended the Solid Waste Disposal Act, Subtitle I (42 U.S.C. § 6991-6991i) and authorized EPA and states to respond to spills and leaks from petroleum underground storage tanks (USTs). SARA also amended the Internal Revenue Code of 1986 (26 U.S.C. § 9508) to create the Leaking Underground Storage Tank (LUST) Trust Fund to help EPA and states cover the costs of responding to leaking petroleum USTs in cases where UST owners or operators do not clean up a site.

²⁷ The Energy Policy Act of 2005, P.L. 109-58, Title XV, Subtitle B.

²⁸ Annual claims against state funds typically have far exceeded revenues. State Financial Assurance Funds surveys from 1997 through the present are available at http://www.astswmo.org/publications_tanks.htm. ASTSWMO is the Association of State and Territorial Solid Waste Management Officials, which includes representatives of state underground storage tank programs.

²⁹ U.S. Congress, Estimated General Fund and trust Fund Effects of the Revenue Provisions Contained in the Chairman's Modification to S. ____, the "Highway Investment, Job Creation and Economic Growth Act of 2012," prepared by Joint Committee on Taxation, 112^th Cong., 2^nd sess., February 7, 2012, JCX-14-12 (2012). The Senate Finance Committee Report to Accompany S. 2152 (S.Rept. 112-152), explains, "For Federal budget scorekeeping purposes, the LUST Trust Fund tax, like other excise taxes dedicated to trust funds, is assumed to be permanent."

³⁰ The LUST Trust Fund financing tax was set to expire on September 30, 2011, but was extended through March 30, 2012, in the Surface and Air Transportation Programs Extension Act of 2011 (P.L. 112-30).

³¹http://docs.house.gov/billsthisweek/20120213/CPRT-112-HPRT-RU00-HR7RCP.pdf. H.Res. 547, the special rule from the Rules Committee, adopted by the House on February 15, 2012, provided for the consideration of H.R. 3408, which provided that revenues from newly authorized leasing and drilling activities should flow into the Highway Trust Fund. It also provided for consideration of H.R. 7. H.Res. 547 also provided that, if both bills pass the House, H.R. 3408 would be incorporated into H.R. 7, using the title and section designations appearing in Rules Committee Print 112-14.

³² 43 U.S.C. § 1331.

³³ See Office of Natural Resources Revenue, 2001-Forward ONRR Statistical Information, http://www.onrr.gov/ONRRWebStats/Home.aspx ([click on Reported Royalty Revenues).

³⁴ CRS Report RS21164, Highway Finance: RABA's Double-edged Sword, by John W. Fischer.

³⁵ CRS Report R42402, Tolling of Interstate Highways: Issues in Brief, by Robert S. Kirk.

³⁶ "Overview of Earmarked Projects in the Conference Report," Transportation Weekly, August 4, 2005, p. 19.

³⁷ "Highway Extensions Would Extend Highway Earmarks for VIPs," Transportation Weekly, September 23, 2009, p. 4.

³⁸ It is possible that the state share could also be credited for appropriations earmarks obtained during FY2005-FY2009.

³⁹ See "Senate EPW Leaders Unveil $85.3 Billion Two-Year Highway Bill With Major Program Consolidation," Transportation Weekly, vol. 13, no. 4 (November 7, 2011), p. 5.

⁴⁰ Section 1104 redefines the National Highway System and the Interstate System. It also adds the strategic highway network, "other connector highways" that connect arterial routes, and sets forth the rules for modifications to the National Highway System and the Interstate System. The NHS would be expanded from roughly 160,000 to roughly 220,000 miles.

⁴¹ H.R. 7, Section 1115 would require states with a total highway bridge deck area on the NHS that is more than 10% structurally deficient to spend 10% of their allocations under NHS and STP on eligible projects on highway bridges. Also an amount equal to 110% of the FY2009 amounts a state was required to spend on off-system bridges is to be provided if 15% of the state's off-system bridge deck area has been classified as structurally deficient.

⁴² Subsection (g) language appears to be written to benefit a particular project, group of projects, or area of roadways threatened by "continuous or frequent flooding" included within the "scope of a prior emergency declaration."

⁴³ The subsidy cost is "the estimated long-term cost to the government of a direct loan or a loan guarantee, calculated on a net present value basis, excluding administrative costs," Federal Credit Reform Act of 1990 (FCRA), § 502 (5A).

⁴⁴ Under the program the subsidy cost is calculated for each loan based on an estimate of expected loss across a portfolio of loans. Historically, the subsidy cost of a loan has averaged 8%. The subsidy cost largely determines the amount of money that can be made available to project sponsors. For instance, with a subsidy cost of 8%, $110 million in contract authority represents about $1.375 billion in potential credit assistance ($110 million divided by 8% equals $1.375 billion).

⁴⁵ Los Angeles County Metropolitan Transportation Authority (Metro), Metro's 30/10 Initiative, http://libraryarchives.metro.net/DB_Attachments/100524_30_10_Initiative.pdf.

⁴⁶ The law also provides eligibility for projects that are 33.3% of the amount of federal highway assistance apportioned in the most recent fiscal year to the state in which the project is located. This is unchanged in MAP-21.

⁴⁷ These are the amount of private participation; environmental impact; national or regional significance; project acceleration; creditworthiness; use of new technologies; reduced federal grant assistance; and consumption of budget authority.

⁴⁸ For further discussion of issues related to freight in the reauthorization debate, see CRS Report R40629, Freight Issues in Surface Transportation Reauthorization, by John Frittelli and William J. Mallett.

⁴⁹ See CRS Report R40629, Freight Issues in Surface Transportation Reauthorization, by John Frittelli and William J. Mallett.

⁵⁰ TIFIA stands for the Transportation Infrastructure Finance and Innovation Act, legislation that was enacted in 1998 as part of the Transportation Equity Act for the 21^st Century (TEA-21) as amended (P.L. 105-178; P.L. 105-206).

⁵¹ The PFN and NFN should not be confused with the existing "National Network" comprising roughly 200,000 miles of highways designated as safely accommodating large combination trucks.

⁵² U.S. Department of Transportation, Federal Highway Administration, Office of Freight Management and Operations, Freight Facts and Figures 2010, based on data from the Freight Analysis Framework, version 3.1, 2010.

⁵³ American Transportation Research Institute, Bottleneck Analysis of Freight Significant Highway Locations, http://www.atri-online.org.

⁵⁴ See, for example, American Association of State Highway and Transportation Officials, AASHTO Authorization Policy, Topic I: Performance Management, Washington, DC, http://www.transportation.org/sites/policy_docs/docs/i.pdf.

⁵⁵ These are safety; infrastructure condition; system reliability; freight movement and economic vitality; and environmental sustainability.

⁵⁶ See CRS Report RL33152, The National Environmental Policy Act (NEPA): Background and Implementation, by Linda Luther, and CRS Report RS20621, Overview of National Environmental Policy Act (NEPA) Requirements, by Kristina Alexander.

⁵⁷ See the FHWA Environmental Review Toolkit website, regarding "NEPA and Project Development," http://environment.fhwa.dot.gov/projdev/index.asp. This website also has information applicable to transit projects. On project streamlining, see http://environment.fhwa.dot.gov/strmlng/index.asp, especially the information included under "Program Overview" and "SAFETEA."

⁵⁸ See CRS Report R41947, Accelerating Highway and Transit Project Delivery: Issues and Options for Congress, by William J. Mallett and Linda Luther.

⁵⁹ Actions requiring no additional approval from DOT are listed under 23 C.F.R. § 771.117(c). They include projects such as emergency repairs from a natural disaster or catastrophic failure and landscaping activities. Actions that require some level of DOT approved are listed under 23 C.F.R. § 771.117(d). These projects have a higher potential for impacts, but still generally meet the CE criteria because environmental impacts are minor. They include projects such as modernization of a highway by resurfacing, rehabilitation, reconstruction, adding shoulders, or adding auxiliary lanes (e.g., parking, weaving, turning, climbing).

⁶⁰ See "FHWA Projects by Class of Action" at http://www.environment.fhwa.dot.gov/strmlng/projectgraphs.asp/.

⁶¹ Pursuant to requirements applicable to "Efficient environmental reviews for project decisionmaking," established under 23 USC § 139(h).

⁶² Under § 1313, "all parties" refers to the project sponsor, lead agencies, resource agencies and any relevant state agencies.

⁶³ For an individual project, the total amount transferred cannot exceed 1% of annual funds made available for the applicable agency office; the total amount transferred cannot exceed 5% of an agency's annual funds.

⁶⁴ These provisions include Sections 1301, Project Delivery Initiative; Section1302, Clarified Eligibility for Early Acquisition Activities Prior to Completion; Section1303, Efficiencies in Contracting; Section1304, Innovative Project Delivery Methods; Section 1311, Accelerated Decisionmaking in Environmental Reviews; Section 1312, Memoranda of Agency Agreements for Early Coordination; and Section 1314, Environmental Procedures Initiative.

⁶⁵ Federal Highway Administration, "Every Day Counts Initiative: Accelerated Project Delivery Methods," http://www.fhwa.dot.gov/everydaycounts/projects/methods/index.cfm.

⁶⁶ Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. 4601 et seq.).

⁶⁷ American Association of State Highway and Transportation Officials, AASHTO Authorization Policy, Topic IV: Project and Program Development and Delivery, Washington, DC, http://www.transportation.org/sites/policy_docs/docs/iv.pdf.

⁶⁸ Established under 23 U.S.C. § 149.

⁶⁹ "Mobile sources," such as cars, trucks, buses, and other vehicles, are considered significant sources of these pollutants. NAAQS have also been established for lead and sulfur dioxide, but mobile sources are not significant sources of those pollutants.

⁷⁰ The Clean Air Act Amendments of 1990 directed EPA to establish the NAAQS. In the following year, CMAQ was established under provisions in the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA). The program was amended and program funding was reauthorized in both TEA-21 in 1998 and SAFETEA in 2005.

⁷¹ In accordance with calculations applicable to CMAQ program apportionments, under 23 U.S.C. § 104(b)(2).

⁷² As defined under 23 U.S.C. § 101(35); for more information about potentially eligible projects, see FHWA's "Transportation Enhancement Activities" web page at http://www.fhwa.dot.gov/environment/te/.

⁷³ Established under 23 U.S.C. § 206; for more information about potentially eligible projects, see FHWA's "Recreational Trails Program" web page at http://www.fhwa.dot.gov/environment/rectrails/.

⁷⁴ See MAP-21's proposed amendment to CMAQ § 149(l)(2)(D).

⁷⁵ See MAP-21's proposed amendment to CMAQ § 149(l)(2)(E).

⁷⁶ The calculation and distribution of these suballocated funds are largely similar to the current apportionment formula applicable to CMAQ funding allocations specified under 23 U.S.C. § 104(b)(2)(B). In MAP-21, relevant suballocation requirements would be established under the proposed amendment to CMAQ § 149(j).

⁷⁷ Federal support for construction equipment diesel engine replacement and upgrades is currently limited to equipment that is strictly off-road, and sponsors need to verify that the equipment will be used on such projects in EPA-designated nonattainment areas for the vast majority of its useful life. MAP-21, Section1511, appears to require only 80 hours of use on a covered project in a nonattainment area.

⁷⁸ Senate Committee on Banking, Housing, and Urban Affairs, "Federal Public Transportation Act of 2012, Bill Highlights," http://banking.senate.gov/public/_files/Transit_Bill_Summary_and_Funding_Chart.pdf.

⁷⁹ Currently, the New Starts process involves four major phases: planning and alternatives analysis; preliminary engineering; final design; and construction. For more information, see CRS Report R41442, Public Transit New Starts Program: Issues and Options for Congress, by William J. Mallett.

⁸⁰ 49 U.S.C. 24401.

⁸¹ Amtrak is also authorized to receive capital grants for $1.275 billion in FY2012 and $1.325 billion in FY2013, and $22 million in FY2012 and $23 million in FY2013 for Amtrak's Office of the Inspector General.

⁸² This grant program is codified at 49 U.S.C. 20154.

⁸³ See Ex Parte No. 646 (Sub-No. 1), available on the STB's website, for further information on these procedures.

⁸⁴ See the filings and decisions issued under Ex Parte No. 679.

⁸⁵ The Rail Safety Improvement Act of 2008 (P.L. 110-432); see § 104.

⁸⁶ At the beginning of 2012, in 32 states, the District of Columbia, and Guam, texting while driving was a primary offense, and 30 states and the District of Columbia had some version of cell phone use by drivers under 18 or novice drivers as a primary offense. See http://www.ghsa.org/html/stateinfo/laws/cellphone_laws.html.

⁸⁷ See Division C, in, Sen. Harry Reid, "SA 1761, Amendment of a Perfecting Nature to S. 1813 to reauthorize Federal-Aid highway and highway safety construction programs, and for other purposes," available at https://docs.google.com/file/d/0B23rveCvG52eWllWVTBWNWhUZ2FTbk5Tb3FGeGstZw/edit.

⁸⁸ There are currently 60 university transportation centers which form consortiums to apply for federal research grants: Research and Innovative Technology Administration, U.S. DOT, University Transportation Centers Program 2011 Grant Solicitation, July 26, 2011, p. 5 (http://utc.dot.gov/about/grants_competitions/2011/grant_solicitation/pdf/entire.pdf).

⁸⁹ For further discussion of this issue, see CRS Report R41042, Harbor Maintenance Trust Fund Expenditures, by John Frittelli.