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SAFETEA-LU, SAFE, ACCOUNTABLE, FLEXIBLE, EFFICIENT TRANSPORTATION EQUITY ACT: A LEGACY FOR USERS
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NSSGA Public Policy Position Papers
SAFETEA-LU
SAFETEA-LU,
SAFE, ACCOUNTABLE, FLEXIBLE, EFFICIENT
TRANSPORTATION EQUITY ACT:
A LEGACY FOR USERS
NSSGA POSITION:
After 12 extensions and two years, President Bush signed the $286.5
billion Safe,Affordable, Flexible, Efficient,Transportation Equity Act:A Legacy for Users
(SAFETEA-LU) on August 10, 2005. NSSGA supported passage of a multi-year TEA 21
reauthorization that increases investment in our nation’s surface transportation system, as well
as preserving the legislative firewalls between gas user fee-supported programs and other
domestic spending, and the Revenue Aligned Budget Authority (RABA) mechanism.
BACKGROUND:
On August 10, in House Speaker Dennis Hastert’s (R-Ill.) congressional
district, President Bush signed SAFETEA-LU (P.L. 109-53), a five-year surface transportation
reauthorization bill that guarantees at least $286.5 billion in spending obligations over the
six-year period from FY 2004 - FY 2009 – $244.15 billion in the five years actually covered
by the bill (FY 2005 - FY 2009) plus $42.30 billion in obligations that actually took place in
FY 2004, which slipped away under a series of short-term extensions while Congress was
debating the reauthorization bill.This represents a 31.4 percent increase over TEA 21.The
funding amount for highways is $189.484 billion; the total for transit is $45.3 billion.
(A year-by-year funding chart is attached).
The House passed the conference report to accompany
H.R. 3 (H.Rept. 109-203) by a 412-8 vote on July 29, 2005,
and the Senate followed suit by a 91-4 vote that evening.All
told, the conference report contains 6,372 earmarked projects
costing at least $24.27 billion.
For purposes of comparison,TEA 21 was signed into law on
June 9, 1998. It authorized $218 billion to be spent on federal
highway and transit construction programs through 2003 when
the law expired, a 40 percent increase over the previous federal
highway law.The total amount authorized for highway construction
in TEA 21 was $175 billion over six years; the total for transit was
$41.4 billion.
In general, NSSGA’s priorities for reauthorization were incorporated in SAFETEA-LU.The next
few paragraphs review NSSGA recommendations for reauthorization and what is included in the
final Act.
1. Funding - Although SAFETEA-LU does not increase the gasoline user fee or index it to
the Consumer Price Index (CPI) as advocated by NSSGA and its coalition partners in
order to provide additional revenues to the HighwayTrust Fund (HTF), the Act increases
guaranteed spending for highways.At the beginning of the debate on reauthorization,
NSSGA supported House Transportation and Infrastructure Committee Chairman Don
Young’s proposal of a $375 billion six-year reauthorization bill, based on the funding level
the U.S. Department of Transportation said was needed to improve and maintain our
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nation’s roads and highways. SAFETEA-LU increases guaranteed funding to $286.5 billion
over five years, which is a 31.4 percent increase over TEA 21. It is not enough, but
certainly highway investment is trending higher and SAFETEA-LU continues that trend.
Also, it maintains the budget firewalls between gas user fee-supported programs and
other domestic spending.
NSSGA was instrumental in the effort to equalize the user fee on ethanol with gasoline
and ensure that all of the revenues go into the HTF.This provision was not part of
reauthorization but was accomplished as part of an earlier tax bill and is expected
to add $3 to $4 billion annually to the HTF.
Further, the Act closes more fraud and abuse loopholes, which is expected to add
$1.955 billion more to the HTF through FY 2009.
The minimum guarantee, or return to the states, is adjusted so that in FY 2005, states
will receive a 90.5 percent return (same as TEA 21), in FY 2006 and 2007 the minimum
guarantee rises to 91.5 percent, and in 2009 it will be 92.0 percent.
In addition to the minimum rate-of-return, states also are guaranteed a minimum real
dollar increase over TEA 21 funding levels.The minimum increase rises one percent
each year from plus 17 percent in FY 2005 to 21 percent in FY 2009.The average
increase for all states is about 31 percent.
NSSGA called for retention of the Revenue Aligned Budget Authority (RABA), a
mechanism that annually adjusts HTF revenues with outlays. SAFETEA-LU maintains
RABA but requires that there can be no negative funding reductions provided the balance
in the highway account of the HTF exceeds $6 billion. It is important to note this
provision does not take effect until FY 2007.
2. Expansion of Innovative Financing - NSSGA’s recommendations for reauthorization
included expansion in the use of innovative financing tools, e.g. State Infrastructure
Banks (SIBs), and the Transportation Infrastructure Finance and Innovation Act (TIFIA).
In addition, NSSGA supported the $30 billion tax credit-bonding program, Build
America Bonds, advanced by Senator James Talent (R-MO) and Senator Ron Wyden
(D-OR). SAFETEA-LU does not include the Talent/Wyden proposal, but it does
allow $15 billion of Private Activity Bonds (PABs) to be issued to finance highway, bridge
and intermodal facilities.
Under TIFIA, the definition of eligible projects is expanded and the eligibility threshold
is lowered to $50 million for all but Intelligent Transportation System (ITS) projects.
The threshold for ITS projects is lowered to $15 million.TIFIA loans may now be used
to refinance long-term project obligations or federal credit instruments if such
refinancing provides additional funding capacity for the completion, enhancement,
or expansion of the project.
Eligibility for SIB funding is expanded to all states and the District of Columbia.
SAFETEA-LU
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SAFETEA-LU
3. Tolling Flexibility - NSSGA supported providing additional flexibility for tolling in
reauthorization. SAFETEA-LU permits tolling of existing facilities; existing high
occupancy vehicle (HOV) facilities; facilities that are “modified or constructed after
the date of enactment of the Act to create additional tolled lane capacity; and, in the
case of a new lane added to a previously non-tolled facility.” The Act creates a new
pilot program that will permit a state (or interstate compact of states) to collect tolls
on a highway, bridge or tunnel on the Interstate System for purpose of constructing
interstate highways. It continues the three-state pilot program created under TEA 21
allowing tolling on existing interstates.
4. Pavement Research and Technology - NSSGA, with NAPA and ACPA, called
for creation of a Pavement Research and Technology program that would create an
Advisory Council to establish pavement research priorities and provide $5 million
annually over the term of the bill for aggregates research.The bill did not include
the joint pavement proposal advocated by NSSGA, NAPA, and ACPA, but it does
include $2.45 million annually from FY 2005 – FY 2009 for aggregates research.
The Act provides the same amount for research into alkaline silica reactivity.
5. Environmental Streamlining - NSSGA’s recommendations for reauthorization called
for environmental streamlining through the entire construction process, from concept
through environmental review and permitting to acceptance by state agencies. Perhaps
the most significant provision of the Act establishes a 180-day statute of limitation for
challenging highway projects after the environmental review is published.The Act also
defines DOT as the lead agency for environmental reviews and clarifies the roles of the
lead and participatory agencies in determining the “purpose & need” of a project and
the alternatives analysis. It gives the lead agency authority to plan public and agency
coordination, schedule timelines and establish deadlines for environmental reviews.
While encouraging concurrent reviews, it does not require them.
The Act creates a pilot program for states to assume any of the
Secretary of Transportation’s responsibilities for environmental
reviews for recreational trails and transportation enhancement
projects. States are allowed to apply to assume the Secretary’s
responsibilities for determining the eligibility of projects that
are categorically excluded from environmental assessments and
environmental impact statements.
The Act allows five states – Oklahoma, California,Alaska, Ohio
and Texas – to participate in a pilot project that allows the state
to assume responsibilities of the Secretary of Transportation for
project reviews, under certain circumstances.
The Act mandates the integration of natural resource concerns into transportation
planning and exempts de minimus impacts to parks, historic sites, wildlife and waterfowl
refuges from alternatives analysis under Section 4(f) of The Department of Transportation
Act relating to historic preservation.The Act retains a Senate bill requirement for a
rulemaking related to selection of “prudent and feasible” alternatives under Section 4(f).
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The Act sets a new cycle for Clean Air Act conformity determinations and sets the horizon
year for air quality modeling in transportation improvement plans.As advocated by NSSGA,
it provides a 12-month grace period for states that fall out of compliance with the Clean Air
Act before federal highway funds would be withheld.
6. Study of Alternative Financing Options - NSSGA called for a study of alternative
financing methods to fund the nation’s surface transportation system. SAFETEA-LU authorizes
the creation of three commissions.Two are specifically charged to study HTF revenues and
alternative funding mechanisms.Title I of the law calls for the creation of a National Surface
Transportation Policy and Revenue Study Commission. In Title XI, the financing title of the
law, there is language authorizing a National Surface Transportation Infrastructure Financing
Commission.The National Surface Transportation Policy and Revenue Commission held its
first meeting in May 2006.
7. Safety - SAFETEA-LU creates a comprehensive $5.1 billion roadway safety program. Up
to 10 percent of the funding may be transferred to carry out safety projects if a state has
met all needs related to highway safety improvement projects and rail-highway crossings.
Each year $90 million of this program is set aside for high-risk rural roads.The Act
creates a new program, Highways for Life, to be applied in all states to the maximum
extent feasible, to encourage state-of-the art technology, elevated performance standards,
and new business practices in highway construction to improve safety, speed construction,
reduce congestion, improve quality, and satisfy users. It allows up to 20 percent of these
funds, but not more than $5 million for a project, to be applied to the non-Federal share
of the cost of construction.
A technical corrections bill to correct errors or omissions in SAFETEA-LU passed the House
on June 27, 2006.The Senate has not yet acted on the bill. NSSGA, with its coalition partners,
is proactively involved in the implementation of SAFETEA-LU.
TALKING POINTS ON SAFETEA-LU:
• NSSGA supported passage of a SAFETEA-LU because it incorporated the majority
of NSSGA recommendations for reauthorization. Of particular importance to
NSSGA was passage of a multi-year reauthorization bill at the highest funding
level possible.While not as much as needed to maintain and improve the nation’s
surface transportation system, the $286.5 billion bill is a significant funding increase.
Also, SAFETEA-LU preserves the legislative firewalls between gas user fee-supported
programs and other domestic spending and maintains the Revenue Aligned Budget
Authority (RABA) mechanism while mitigating its potential negative impacts.
• NSSGA regrets that the final reauthorization does not include the Talent/Wyden
Build America Bonds proposal that would have allowed $30 billion in tax credit
bonds to supplement the core federal transportation infrastructure programs.
NSSGA, however, is gratified that the bill includes $15 billion in tax credit
private activity bonding.
• SAFETEA-LU adopts the NSSGA, NAPA, and ACPA call for increased funding
of construction materials research, specifically authorizing $2.45 million annually
from FY 2005-FY 2009 for aggregates research.
• A major tenet of NSSGA’s recommendations for TEA 21 reauthorization was
environmental streamlining, which has been incorporated in SAFETEA-LU. Of
SAFETEA-LU
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SAFETEA-LU
particular significance is adoption of a 180-day statute of limitations for opponents
to bring action to stop a highway project.
• SAFETEA-LU provides a 12-month grace period for areas out-of-compliance
with the Clean Air Act before federal funds would be withheld for a project, a
recommendation advanced by NSSGA.
• SAFETEA-LU creates a blue-ribbon commission, as proposed by NSSGA, to study
alternative methods for financing the nation’s surface transportation program.
TALKING POINTS ON THE IMPORTANCE OF OUR NATION’S HIGHWAY PROGRAM:
• Highways are vital to our quality of life, the commerce and defense of our nation
and the safety of motorists and passengers.According to the U.S. Department of
Transportation, one-third (nearly 14,000 annually) of all fatal highway accidents
are due to unsafe road and bridge conditions.
• Highways are crucial to the U.S. economy. For each $1 billion spent for highway
construction, 47,500 jobs are generated annually.
*
• In the U.S., the federal highway programs, including state matching funds, support
approximately one million jobs.
*
• Every dollar invested in the highway system yields $5.40 in economic benefits to
the nation because of reduced delays, improved safety and reduced vehicle
operating costs.
*
• Increased investment in highways saves lives. Every $100 million invested in
highway safety improvements will result in approximately 145 fewer traffic
fatalities over a 10-year period.
*
• Investment in our highways will help reduce traffic congestion that is choking
America's cities.Traffic congestion costs American motorists $69.5 billion a year
in wasted time and fuel costs. Preventable congestion has occurred because over
the past 30 years new highway capacity has increased only six percent, while the
U.S. population from 1970-2004 has increased over 39 percent, and vehicle motor
traffic has increased by167 percent.
• Driving on roads in need of repair costs American motorists $54 billion a year in
extra vehicle repairs and operating costs – $275 per motorist. Highway repair,
maintenance and improvement are 33 percent of the construction aggregate
market nationwide.
*
• Air quality is improving at the same time highway travel is increasing.The significant
air quality improvements have taken place at the same time that highway travel in
the U.S. has jumped 72 percent.
*
*
Source:
“Key Facts About America’s Roads and Bridge Conditions and Federal Funding”,
The Road Information Program,Updated March 2006.
Updated:July 2006