WASHINGTON INSIGHT

$247 billion SAFETEA proposal unveiled

Jim Fahey
Director of Government Relations
APWA Washington Office

Emphasizing its focus on improving safety and a record funding level of $247 billion, late this spring the Bush Administration released its much-anticipated proposal to reauthorize the nation's federal surface transportation programs. Overall, the Administration's plan provides $201 billion for highways, bridges and safety programs over six years and $45 billion for public transportation programs. Most surface transportation programs under the proposal would be cut in 2004 from current levels.

The Safe, Accountable, Flexible and Efficient Transportation Equity Act of 2003, SAFETEA, is the Administration's successor to the $218-billion Transportation Equity Act for the 21st Century, TEA-21, which expires on September 30, 2003.

At a series of hearings in the House of Representatives and in the Senate following SAFETEA's release, lawmakers voiced sharp criticism of the proposal's funding levels, charging that they were inadequate and insufficient, given the existing needs. House Transportation and Infrastructure Committee Chairman Don Young (R-AK), author of the House bill, supports a $375-billion, six-year bill. Drafters of Senate legislation, including Environment and Public Works Committee Chairman James Inhofe (R-OK) and Banking, Housing and Urban Affairs Committee Chairman Richard Shelby (R-AL), support at least $311 billion over six years.

Following is an overview of SAFETEA's highlights.

Funding
SAFETEA extends TEA-21's funding guarantees which link highway funding to receipts generated by transportation excise taxes, but it includes no provisions to raise federal motor fuel taxes or to index them. It does include a modification to improve TEA-21's Revenue Aligned Budget Authority (RABA) mechanism, which was established to ensure all gas tax receipts in excess of TEA-21 estimates were distributed to the highway program. RABA has been criticized for producing wide swings in annual highway funding. Under SAFETEA, RABA calculations are more dependent upon levels of actual receipts.

The proposal maintains TEA-21's current equity formula of a minimum return to each state of 90.5 percent of its share of contributions to the Highway Trust Fund. It redirects 2.5 cents per gallon of the gasohol tax currently deposited in the general fund to the highway account of the Highway Trust Fund and dedicates $1 billion of Highway Trust Fund dollars beyond estimated receipts to improve highway infrastructure.

Safety
As expected, SAFETEA retains much of the structure of TEA-21, but it does create a new core-funding category dedicated to safety within the federal-aid highway program. The new $7.5 billion program is called the Highway Safety Improvement Program and is designed to provide states with funds to reduce fatalities and injuries on highways. In addition, SAFETEA creates a new safety belt incentive program to encourage states to enact safety belt laws and achieve higher safety belt usage rates.

Environmental Streamlining
The Administration's proposal also addresses procedures governing environmental review and project delivery processes. SAFETEA provides for improved linkage between the transportation planning and project development processes, and it strengthens the provisions of current law that establish time frames for resource agencies to conduct environmental reviews and make decisions on permits. Moreover, it establishes a six-month statute of limitations for appeals on the adequacy of projects' environmental impact statements and other environmental documents.

Block Grant Pilot Program
SAFETEA establishes a new pilot program under which states, working with the U.S. Department of Transportation to develop and meet specific system performance measures, could manage their core program funds as a block grant, excluding a few programs such as the Congestion Mitigation and Air Quality Improvement (CMAQ) and the Transportation Enhancements programs.

Transit Program Changes
SAFETEA restructures Federal Transit Administration (FTA) programs into three major areas: Urbanized Area Formula Grants, Major Capital Investments and State-Administered Programs. In addition, it provides an increase in funding for rural transit programs and creates a new RABA mechanism for transit. However, contrary to TEA-21, it does not extend the funding guarantees to authorizations derived from the federal general fund, and it increases the local match for the New Starts Program from 20 percent to 50 percent. These changes have prompted criticism from lawmakers and others.

Highway Program Changes
SAFETEA makes revisions to the CMAQ program, which it funds at $8.8 billion, an increase of $700 million from TEA-21, including changes to the apportionment formula to include non-attainment and maintenance areas for new standards for ozone and fine particulate matter.

Finally, SAFETEA establishes a National Highway System (NHS) set-aside to fund highway connections between the NHS and intermodal freight facilities. It also continues the Transportation Infrastructure Finance and Innovation Act (TIFIA) program, lowers the program's project threshold from $100 million to $50 million, and expands it by allowing rail freight projects to qualify for credit assistance. SAFETEA also creates a new category of tax-exempt private activity bonds to finance highway projects and freight transfer facilities.

The Many Steps to Enacting a Bill
With the release of the Administration's reauthorization proposal, focus shifted this summer to the Congressional process for drafting and approving legislation. That process begins at the committee level, with committees in each chamber writing separate bills. It works generally like this:

In the House of Representatives, the Transportation and Infrastructure Committee has jurisdiction over TEA-21's programs, so it drafts the House bill. The House Ways and Means Committee (William Thomas, R-CA, Chair) decides tax issues relating to TEA-21's programs. Once bills are approved by committee, legislation is sent to the full House of Representatives for debate and a vote.

A similar process is followed in the Senate, the primary difference being that jurisdiction is more divided. The Senate Finance Committee (Charles Grassley, R-IA, Chair) decides the tax issues; the Senate Environment and Public Works Committee writes the highway program legislation; the Senate Banking, Housing and Urban Affairs Committee addresses public transportation; and the Senate Commerce, Science and Transportation Committee (John McCain, R-AZ, Chair) drafts the motor carrier and safety components. As in the House, the full Senate debates and votes on legislation drafted by the committees.

Once bills are approved in the House and Senate, a conference committee composed of various House and Senate members is appointed to reconcile differences between the House and Senate bills. When all differences are worked out in the two versions, the legislation goes back to the House and Senate for final approval and then is sent to the President for enactment or veto.

As the Congressional committees were drafting their own legislation to succeed TEA-21, SAFETEA was introduced in the House of Representatives as H.R. 2088.

TEA-21 reauthorization is an APWA priority. Log onto APWA's government affairs webpage, www.apwa.net/govtaffairs, for information about APWA's reauthorization recommendations.

A copy of the Administration's proposal, section-by-section analysis and funding tables, and other information about SAFETEA are available at http://www.fhwa.dot.gov/reauthorization/safetea.htm.

Jim Fahey can be reached at (202) 408-9541 or at jfahey@apwa.net.