WASHINGTON INSIGHT

Attention focuses on reconciling House/Senate transportation bills

Jim Fahey
Director of Government Relations
APWA Washington Office

With passage of a $283-billion, six-year transportation reauthorization bill in the House of Representatives on April 2 of this year, attention in Congress turned to the naming of a House-Senate conference, the next step toward reconciling the House bill with the $318-billion, six-year measure the Senate passed in February.

By late April, however, conferees had yet to be named. House and Senate leadership intended to work out an agreement with the White House on a total funding level acceptable to the three parties before initiating the process for organizing a conference and beginning conference deliberations. A looming veto-threat against both bills prompted congressional leadership to seek a compromise with the White House before proceeding with conference negotiations.

Veto warnings
The House of Representatives passed the Transportation Equity Act: A Legacy for Users, TEA-LU (HR 3550) by a vote of 357-65. It is $100 billion less than the House Transportation and Infrastructure Committee originally proposed and $43 billion less than the Senate's bill, the Safe, Accountable, Flexible and Efficient Transportation Equity Act, SAFETEA (S 1072), which passed the Senate by a vote of 76-21. Amendments offered to increase the House bill's funding to $318 billion failed during floor debate.

The Bush Administration is opposed to both the House and Senate bills, as passed. It favors a six-year bill totaling $256 billion and has issued veto warnings against them, primarily because of their funding levels, although other provisions have been identified as grounds for veto as well. Despite the threats, floor vote totals in the House and Senate comfortably exceeded the number needed to override a veto, a demonstration of the wide support in Congress for the higher funding levels.

Prior conferences lasted two months
House and Senate conferees, who are appointed among lawmakers involved in writing the House and Senate bills, have a long list of programmatic and funding areas they will have to work through in order to produce an identical bill that can be forwarded to the President for his signature.

The two previous federal transportation bills, the Transportation Equity Act for the 21st Century (TEA-21) and Intermodal Surface Transportation Efficiency Act (ISTEA), required eight weeks to produce a conference agreement. For most everyone in the transportation community, timely action to finish a conference agreement with a minimum $318 billion funding level is top priority.

Since September 30 of last year, when TEA-21 expired, federal highway, public transportation and safety programs have been funded through temporary, short-term extensions. State and local governments have been making the case that the absence of multi-year legislation undermines their ability to plan, program and implement transportation projects.

Proposed new programs
Consistent with APWA's reauthorization position, both the House and Senate bills retain TEA-21's basic programmatic structure and principles, but they also add new programs and make modifications to existing programs, which conferees will need to reconcile in a final agreement.

The Senate bill, for example, includes a new $12 billion program, the Infrastructure Performance and Maintenance Program for ready-to-go projects, and creates a new safety program, the $7.9 billion Highway Safety Improvement Program, replacing the Hazard Mitigation Program and the Surface Transportation Program safety set-aside.

The House bill establishes a new $675 million High Risk Rural Road Safety Program and a new $6.6 billion Projects of National and Regional Significance program to assist states in paying for high-cost projects. The House bill also includes language requiring states to spend a portion of their highway funds on congestion relief.

APWA priority provisions
The House and Senate bills both contain several key provisions supported by APWA, including language to continue the budgetary firewalls (which ensure that all transportation revenues are distributed to state and local transportation programs); several provisions to streamline the environmental review and project delivery process (although policy changes vary in the two bills and will need to be reconciled); and tax law changes that authorize the highway trust fund to capture full tax revenues on ethanol for investment in transportation programs.

Donor state concerns
Concerns over state minimum funding guarantees and state allocations were a major focus of House floor debate on TEA-LU. Donor states, which receive less from the federal highway trust fund than they contribute, have been pressing for a minimum 95 percent return on their share of highway trust fund contributions in the next reauthorization.

TEA-LU retains the current law's minimum 90.5 percent return, but to address donor state concerns it includes a "re-opener" provision that cuts off highway funding at the end of fiscal year 2005 unless a new bill is enacted increasing states' minimum funding guarantees above the bill's 90.5 percent return. The provision requires that money be found to raise return-rates from 92 percent in 2006 to 95 percent by 2009. The Administration opposes the "re-opener" provision. The Senate bill does not include one.

Funding provisions
Both the House and Senate bills achieve new revenue for transportation programs by compensating the highway trust fund from losses due to the 5.2 cents-per-gallon ethanol exemption; by directing 2.5 cents per gallon of the ethanol tax from the general fund to the highway trust fund; and by new measures to fight fuel-tax evasion. Both bills also maintain strong funding commitments to transit and continue transit funding's 80-20 split. To address concerns that customary revenue sources are expected to continue declining with greater fuel efficiency and alternative fuel sources, both bills call for the creation of a commission to evaluate long-term funding sources for the highway trust fund.

House-Senate bill differences
The House and Senate bills vary in a number of areas. In addition to differences in total funding, the Senate bill brings all states to a 95 percent return-rate on highway trust fund contributions by 2009. There are policy differences between the two bills in the area of environmental streamlining and numerous differences in programmatic details and funding for various categorical programs.

Unlike the House bill, the Senate bill, for instance, includes a $958 million stormwater mitigation program and a provision to increase the metropolitan planning funding from one percent to 1.5 percent of core highway programs.

The House bill increases the off-system bridge program minimum set-aside from 15 percent to 20 percent, while the Senate maintains current law. The House bill contains about $11 billion for more than 3,000 high priority projects. The Senate bill contains no projects, but as in past years, Senate-sponsored projects are expected to emerge from the conference. The two bills also add various innovative financing, bonding and tolling provisions.

Outlook unclear
It is unclear at the time of the writing of this article what the outlook is for the conference or when a bill might be presented to the President for his signature. Those willing to make predictions say that early July is an important target date to look to: If substantial progress is not made by then, attempts to finish reauthorization could be postponed until after the elections, requiring some form of program extension to prevent a lapse in funding.

Of course, events, and predictions, are changing, almost by the day.

Updates and information on APWA's reauthorization priorities are posted on APWA's website, www.apwa.net/govtaffairs. Jim Fahey can be reached at (202) 408-9541 or jfahey@apwa.net.

The following table shows proposed federal transportation funding over six years for highway, transit and safety programs, as contained in the Administration's proposal and the House and Senate bills, as passed.

Comparative Transportation Reauthorization Funding, Six Years


Contract Authority  TEA-21 (Actual)    Administration     Senate      House
Highways                   $182.8               $201.6                $255.8      $225.5
Transit                      $41.0                 $45.8                  $56.5       $55.0
Safety                       $2.4                  $3.4                    $6.5        $5.0
Total                         $217.8               $256.0                 $318.0     $283.5
Percent increase over TEA-21                18%                    46%         30%