Congress approves final highway/transit bill

News ARTBA August 01, 2005
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The House and Senate each overwhelmingly passed final legislation July 29, reauthorizing the federal highway and transit programs through FY 2009. The House approved the measure 412 to 8 and the Senate vote was 91 to 4. The “Safe, Accountable, Flexible and Efficient Transportation Equity Act – A Legacy for Users” (SAFETEA-LU) will provide $286.5 billion in guaranteed funding for the federal highway, transit and safety programs. The investment level is $2.5 billion more than the House-passed TEA-21 reauthorization bill and $7.5 billion less than the Senate’s version. Bush Administration officials have said President Bush will sign the measure.

The level of investment contained in the bill was made possible largely by the reforms enacted last year to the federal tax treatment of ethanol motor fuels. The ethanol tax changes ensured the Highway Trust Fund will be compensated for the sale of ethanol motor fuels and will provide $18.9 billion in new trust fund revenues that will be used by the multi-year reauthorization of TEA-21 to improve the nation’s highway infrastructure network.

The chambers also approved July 29 an extension of administrative expenses for the agencies overseeing the federal surface transportation programs through August 14. The current extension of the federal highway and transit measure, however, will allow U.S. Department of Transportation employees to continue to work while the multi-year bill is prepared for President Bush’s signature.

The measure includes a number of policy provisions called for in the 2001 ARTBA TEA-21 Reauthorization Task Force Report. Below is a brief summary of the conference report:

Annual guaranteed funding

FY 2005

Core Highway Program $34.4 billion

Transit Program $7.6 billion

Safety Programs $740 million

FY 2006

Core Highway Program $36.0 billion

Transit Program $8.6 billion

Safety Programs $1.2 billion

FY 2007

Core Highway Program $38.2 billion

Transit Program $9.0 billion

Safety Programs $1.2 billion

FY 2008

Core Highway Program $39.6 billion

Transit Program $9.7 billion

Safety Programs $1.2 billion

FY 2009

Core Highway Program $41.2 billion

Transit Program $10.3 billion

Safety Programs $1.8 billion

Distribution of highway funds to the states

Each states’ minimum rate of return on Highway Trust Fund contribution will ramp up from the current 90.5% to 92% by 2008 (90.5% in FY 2005, 90.5% in FY 2006, 91.5% in FY 2007, 92% in FY 2008 and 92% in FY 2009). All states are also guaranteed a total six-year average highway funding increase of at least 19%, when compared to the state’s six-year TEA-21 funding total.

Transportation project delivery and environmental provisions

The U.S. Department of Transportation is defined as the lead federal agency for coordinating the environmental review process for transportation projects among other federal agencies and the lead agency is given the responsibility of establishing a project’s purpose, need and range of alternatives. The measure also encourages federal agencies to perform the respective reviews concurrently as opposed to sequentially. Specific deadlines for comments on environmental impact statements and the environmental review process are established.

The legislation establishes a pilot program for up to five states to assume the federal environmental review process for transportation projects. States will also be allowed to take over the federal reviews for less complicated projects designated as categorical exclusions.

ARTBA-supported provisions are included in the bill that require lawsuits against highway projects to be filed within 180 days of the completion of the environmental review process for the project and provide areas that are fall out of compliance with the federal Clean Air act at twelve-month “grace period” before federal highway funds would be withheld.

The duplication in the current federal historic preservation standards would be eliminated for transportation projects that are found to have no adverse effects on historic or other protected sites.

In a significant victory for the transportation construction industry, negotiators eliminated a provision that passed the Senate that would have required all states to set aside 2% of their federal Surface Transportation Program funds for storm water mitigation activities. This provision would have prevented states from investing almost $2 billion in needed highway and bridge improvements.

Finance

A new ARTBA-supported private activity bonds program is created that will allow $15 billion in federal tax-exempt bonds to be issued to finance highway, bridge and intermodal facilities. The conference report also includes provisions to crack down on illegal fuel tax evasion that will generate $1.955 billion in additional Highway Trust Fund revenues through FY 2009. A “blue ribbon” commission on financing the federal surface transportation programs in the future will be established by the measure.

Safety

The bill will create a $5 billion dedicated safety program that will provide significant investment in roadway infrastructure safety. The conference report also includes an ARTBA-initiated provision that will ensure appropriate safety precautions are taken on all federal-aid highway projects through the use of unit-bid pricing for safety items.

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