With Transportation Equity Act for the 21st Century funding scheduled to expire on September 30th, the bipartisan leadership of the U.S. House Transportation & Infrastructure Committee introduced legislation to extend funding under the existing levels for an additional five months. One week before the deadline, the Senate Environment and Public Works Committee unanimously approved the five-month extension, while the House still needs to enact the short-term extension to avoid a shutdown of the Federal Highway Administration and construction projects around the country.

With 74 cosponsors, the “Surface Transportation Extension Act of 2003” (H.R. 3088) was introduced by Committee Chairman Don Young (R-Alaska); James Oberstar (D-MN), Ranking Democrat, Transportation Committee; Tom Petri (R-WI), Chairman, Highways, Transit & Pipelines Subcommittee; and, William Lipinski (D-IL), Ranking Democrat, Highways Subcommittee. Rep. Young, who is Transportation Committee Chairman, introduced separate legislation (H.R. 3087) that would extend funding for a five-month period.

“An extension will give our Committee and the Senate Committees the needed time to complete our versions of this vital legislation,” said Young. “We have made tremendous progress on our bipartisan bill and will complete work on our historic $375 billion, six-year legislation before the end of the year. We fully intend to introduce a $375 billion bill that addresses the national congestion and highway safety crisis identified by the U.S. Department of Transportation.”

The concern with passing a short-term extension, some say, is that it hampers state DOTs long-range planning and that state and local governments will have a difficult time planning for the next construction season.

LEGISLATIVE ISSUES

Highways

Prior to the above-noted action of the Transportation & Infrastructure Committee, the House Appropriations Committee approved a measure funding the highway program at $33.4 billion, an increase of $1.8 billion over FY 2003. As widely reported, the Senate approved last year's energy bill. Accordingly, the Senate Finance Committee's proposed solution to fully compensate the Highway Trust Fund for ethanol use was not included in the bill; however, Senator Grassley introduced the Highway Trust Fund/ethanol fix as a separate measure, S. 1548. The Senate Finance Committee intends to try to add the Highway Trust Fund legislative fix in conference. Introduced as a way to demonstrate support for the proposal, the free-standing bill had 20 cosponsors.

The bill as introduced by the leaders of the Senate Finance Committee would increase ethanol tax revenue to the Highway Trust Fund by some $2 billion annually. The measure stipulates that ethanol-blended fuel would be taxed at the same rate as gasoline — 18.4 cents per gallon — and all diesel and biodiesel blended fuels would be taxed at 24.4 cents per gallon. All tax receipts would be directed to the Highway Trust Fund. Upon introducing the bill, Senate Finance Committee Chairman Senator Charles Grassley (R-IA) said, “Twenty-five years ago, we created an alcohol fuels tax incentive to promote the use of ethanol. Today, I am introducing legislation that will simplify the excise-tax collection system for all transportation and renewable fuels.” Grassley said that the Volumetric Ethanol Excise Tax Credit (VEETC) Act of 2003 would accomplish three goals: improving the tax-collection system for renewable fuels; increasing the revenue source for the Highway Trust Fund; and, enhancing the delivery of renewable fuels in the marketplace.

Although the House T&I Committee has yet to formally introduce legislation, the Committee leadership has announced its intention to push annual total investment levels for the federal highway, mass transit and safety programs from $50 billion in FY 2004 to $75 billion in FY 2009 for a total six-year program of $375 billion. By comparison, the total FY 2003 federal surface transportation program funding is roughly $40 billion. Key to the proposal is that federal transportation spending policy would be linked, for the first time in history, to the system's documented needs as identified by the U.S. Department of Transportation's biannual Conditions & Performance Report to Congress. Thus, the Committee's proposal aims not only to maintain current conditions and performance of the nation's highway and transit network, but also to make improvements in the system by 2009.

In the Senate, EPW Committee Chairman James Inhofe (R-OK) announced that his panel plans to proceed with a reauthorization bill that provides a total of $311 billion in surface transportation allocations, including $255 billion for highways and $56 billion for transit. This investment level constitutes the amount proposed in the Senate-approved EPW Committee amendment to the FY 2004 budget resolution that would have provided an average core highway program of $39 billion and transit program of $9.3 billion over the next six years.

The administration's FY 2004 budget request includes an obligation limitation of $29.3 billion for the Federal-Aid Highways Program. It links highway spending (including motor-carrier safety and highway safety) to incoming receipts into the Highway Account of the Highway Trust Fund. In addition, the budget request directs all revenue from gasohol taxes to the Highway Trust Fund, increasing available receipts by over $600 million per year. (Currently, 2.5 cents per gallon of the gasohol tax is deposited in the General Fund of the Treasury.) Ultimately, the request reflects a program level that is $1 billion over and above estimated receipts.

A $1 billion surfeit is thereby created to fund a new highway infrastructure performance and maintenance initiative targeting “ready-to-go” highway projects that address traffic bottlenecks and improve infrastructure conditions. The program aims to help continue the progress made on infrastructure conditions during the years covered by the Transportation Equity Act for the 21st Century (TEA-21). Also addressing chokepoints on major highways, the initiative stands to save lives, time, fuel, and money, while improving economic productivity.

Airports

Members of Congress reached an agreement reconciling the two versions of the House- and Senate-passed federal aviation program reauthorization bills. The four-year measure titled Vision 100-Century of Aviation Reauthorization Act would provide annual Airport Improvement Program (AIP) investment levels of $3.4 billion in FY 2004; $3.5 billion in FY 2005; $3.6 billion in FY 2006; and $3.7 billion in FY 2007. Current AIP investment is $3.4 billion. The bill would also retain AIR-21's historic budgetary protections to ensure that all Airport and Airway Trust Fund revenues are fully spent and guarantee AIP investment at the authorized levels — one of the key recommendations of the ARTBA AIR-21 Reauthorization Task Force.

Environmental Protection Agency

The House Appropriations Committee approved $1.2 billion for EPA's Clean Water SRF program in FY '04. Though it falls $150 million below this year's $1.35 billion level, the authorization represents a $350 million increase over the administration's request.

Water

Introduced by Senators Jack Reed (D-RI) and George Voinovich (R-OH) just before Congress recessed for summer break, the National Clean Water and Safe Water Fund bill, S 1539, would establish the National Clean and Safe Water Fund in the U.S. Treasury to be subsidized by civil and criminal penalties collected under the Clean Water Act and the Safe Drinking Water Act. Under S 1539, for fiscal year 2003 and each year thereafter, Treasury would transfer to the Fund a sum equal to the amount collected the previous year from fines, penalties, and other enforcement actions under the two laws. (About $52 million in fines was collected in fiscal year 2002.) The monies in the Fund would provide financing for projects to clean up water contaminated by violations of both the Clean Water and Safe Drinking Water Acts. The bill can be viewed at http://thomas.loc.gov