APTA: Washington Report

FY 2004 Transportation House Appropriations Bill Advances

August 5, 2003

House Appropriations Committee Action

As reported in APTA's July 25th Legislative Update, the House Appropriations Committee approved the Fiscal Year 2004 Transportation and Treasury spending bill on Thursday, July 24th before leaving for the August break. The bill, H.R. 2989, includes a number of important changes from the version approved by the subcommittee the previous week, which had cut funding for transit programs, eliminated the Transportation Enhancement program, and increased highway funding.

The bill approved by the full committee would fund the federal transit program at $7.23 billion for FY 2004, $52 million above the FY2003 level and $5 million above the President's request. The bill restored New Starts funding, which had been cut by the subcommittee, to the FY 2003 guaranteed level of $1.214 billion, which is still $36 million below the actual FY 2003 appropriation. The bill also funds formula programs at $3.789 billion, an increase of nearly $25 million over actual FY 2003 appropriations; and increases the Bus and Bus Facilities program by $70 million, including $50 million in Clean Fuels Formula Funds originally authorized under the formula program.

The measure would set funding for the federal highway program at $34.6 billion, an increase of $2.2 billion, or 6.7%, over the FY 2003 appropriations level, but $1.1 billion less than the subcommittee level. It also would remove the requirement that ten percent of STP funds suballocated to metropolitan areas be used for the Transportation Enhancement Program, making the program optional instead.

The bill and Committee Report (108-243) can be viewed on Congress' legislative website at http://thomas.loc.gov; the earmarks in the bill can be viewed on the Government Affairs section of the APTA website at www.apta.com.

Future House Action

The next step in the process is for the Transportation and Treasury appropriations bill to be voted on by the full House of Representatives. The House Leadership has set an ambitious timeframe in which to pass all 13 pending appropriations bills, so action on this bill may occur soon after Congress returns from the August recess, immediately after Labor Day.

Future Senate Action

The Senate Appropriations Subcommittee on Transportation, Treasury and General Government was waiting for the full House Appropriations Committee to act on its transportation spending bill before taking action. Now that the House committee has acted, the Senate subcommittee is expected to act on its version soon after Congress returns from the August recess.

TEA 21 Reauthorization

House of Representatives

The House Transportation and Infrastructure (T&I) Committee, which has primary jurisdiction over federal transit and highway authorizing law, is expected to have legislative proposals for both a short-term extension of TEA 21 and a new six-year authorizing bill ready to introduce when Congress returns in September. The Committee staff is still working on the details of a six-year, $375 billion transit and highway bill.

T&I Committee leadership received support for its effort to get an increase in the federal gas tax, indexing, or both, when influential conservative Paul Weyrich, National Chairman of the Coalitions for America, publicly endorsed a gas tax increase during the week of July 7th. Polls released by Zogby International also indicate popular support for raising or indexing the gas tax so long as it is dedicated to fund transit and highway projects.

The House Ways and Means Committee, however, has jurisdiction over the tax title of reauthorization legislation, including any modification to the gas tax, and has not yet shown support for raising or indexing the gas tax. The committee has not set a date for marking up its portion of the bill.

Senate

The Senate Banking Committee, which has jurisdiction over the transit title of TEA 21 reauthorization, has not yet announced plans for marking up its portion of the bill. According to a Washington transportation newsletter, members and staff say most of the transit reauthorization issues have been settled but they will not mark up a bill until the issue of increasing revenues for transportation is resolved.

The Senate Environment and Public Works (EPW) Committee, which has jurisdiction over the highway title of the bill, is believed to be close to introducing its bill, which would total $311 billion for highways and transit, sometime in September. Senate Majority Leader Bill Frist (R-TN) has indicated he will reserve time for the bill on the Senate floor in late September if the committees can complete their work.

Senate Finance

The EPW Committee and the Banking Committee appear to be waiting to see what happens with the Grassley/Baucus bonding proposal (see below), which continues to be an active topic in the Senate Finance Committee. The Senate Finance Committee has jurisdiction over the tax title of reauthorization legislation.

Outlook

September will be a critical month for the TEA 21 reauthorization process. If an agreement can be reached on funding levels and how to increase revenues for transportation programs, reauthorization remains possible. Staff in both the House T&I Committee and the authorizing committees in the Senate, however, have indicated they are also working on legislation that would provide a short-term extension of TEA 21 if such an agreement cannot be reached.

Grassley/Baucus Bonding Proposal Threatened with Veto

While Senate Finance Committee Chairman Charles Grassley (R-IA), and Ranking Member Max Baucus (D-MT) continue to seek support for their proposal to replace most of the transit funding that comes from the federal motor fuels tax with funds raised through the sale of federal bonds, a July 24th, 2003 letter from U.S. Treasury Secretary John Snow to Senate Budget Committee Chairman Don Nickles (R-OK) provides that the Department of Treasury "opposes these proposals in the strongest possible terms" and further emphasizes that, should any such legislation reach the President's desk, the Secretary would "recommend that he veto the legislation." The letter is the result of the Department's review of a Congressional Budget Office (CBO) report on different ways that federal bonds could be used to fund transportation programs. The letter also states that the Department believes such a proposal would cost the Treasury an extra $8 to $48 billion over 20 years, and would constitute a "threat to the government's financial foundation."

The leadership of the Senate Banking Committee, including Chairman Richard Shelby (R-AL) and Ranking Member Paul Sarbanes (D-MD), are on record opposing any bonding scheme that would decouple transit funding from the federal gas tax, as are other transportation interest groups.

Visit the Government Affairs section of www.apta.com for more details, including a joint letter from APTA, the American Association of State Highway and Transportation Officials (AASHTO), and the American Road and Transportation Builders Association (ARTBA) to the Senate Finance Committee; and APTA's May 23 Legislative Alert on this issue.

Homeland Security Appropriations Bill Advances

On July 24, the Senate approved a $29.3 billion FY 2004 Homeland Security spending bill. The legislation funds the 22 agencies that merged into DHS on March 1, 2003, including the Transportation Security Administration. The bill, which passed the Senate 93-1, would provide a total of $5.4 billion for TSA, $200 million more than the measure that passed the House a month earlier. The House bill totals $29.4 billion and provides $500 million in grants for high density urban areas and $200 million in grants for high-threat infrastructure. Within the TSA budget, the Senate and House bills both include $10 million for intercity bus security. The House measure includes $10 million for transit security and training. The Senate bill includes $750 million for high-threat urban area discretionary grants which can go to transit agencies.

Several amendments to the Senate bill that would have increased transit security funding were defeated. An amendment by Senator Jack Reed (D-RI) and Senator Paul Sarbanes (D-MD) that would have funded $100 million in grants to public transit agencies against terrorist threats was rejected 50-44. Another amendment by Senator Robert Byrd (D-WV) that failed 50-43 would have increased total spending in the bill by $1.8 billion, including $57 million for transit security. During floor debate on the amendments, Reed cited APTA testimony identifying some $6 billion in transit security needs. Byrd, in the amendment's summary, also referred to APTA's needs request. APTA has submitted testimony to both the Senate and House detailing the critical role of public transportation in security and emergency preparedness.

The Senate and House are expected to meet in conference during September to work out differences in the two bills.

Passenger Rail Legislation Advances

Administration and Senate Release Contrasting Intercity Rail Passenger Service Visions

On July 28, the Administration released its proposal for reform of the nation's intercity rail service, titled the Passenger Rail Investment Reform Act of 2003. The bill would end Amtrak's national route network as such, with states given responsibility for determining services that would continue to be operated with state funding and given capital incentives from U.S. DOT to make capital investments. States would contract directly with third party contractors for the operation of service.

The Administration's proposal would break Amtrak into three companies. First, a private infrastructure company would be created to maintain and operate the Northeast Corridor under contract to a multi-state compact. Second, a private company would be created to operate trains under contract. Third, a government corporation would retain and award Amtrak's current rights of access to freight railroads.

On Wednesday, July 30, the four Republican members of the Senate Commerce Committee introduced S. 1505, which would authorize $2 billion per year for Amtrak operations over the next six years, with an additional $48 billion available over 20 years for capital improvements. Capital funding would be provided through a Rail Infrastructure Finance Corporation that would issues tax credit bonds. The state match for capital funding would be 20%.

FY 2004 Appropriations and Amtrak

The FY 2004 appropriations bill passed by the House Appropriations Committee on July 24th would provide $900 million next year for Amtrak, an increase of $320 million over the subcommittee level but just half of what Amtrak says it needs to operate next year.

Rail Safety Bill Reported out of the Senate Commerce Committee

On July 17, the Senate Commerce Committee reported out of Committee S. 1402, the Federal Railroad Safety Improvement Act. The bill would reauthorize the safety programs of the Federal Railroad Administration with only modest changes. The bill calls for the Rail Safety Advisory Committee to create a working group to prepare a report of legislative and regulatory changes that are needed to address fatigue management for railroad employees. The bill has been praised by the Association of American Railroads, but criticized by the AFL/CIO. Senate floor action is uncertain.

Omnibus Energy Bill and Alternative Fuels

Congress has been working this session on comprehensive legislation that would set national energy policy in almost every area, including domestic exploration and production, conservation, nuclear energy, fuel economy, and alternative fuels. Several programs in the legislation currently being considered are of interest to transit systems. Mainly, these programs provide funding to demonstrate and test the use of hydrogen cells and fuel cells in buses and other modes of transit.

Below is an overview of the House and Senate versions of the energy legislation and the programs that potentially apply to transit systems.

House Version

While there are several versions of energy bills in the House, the lead bill is H.R. 6, which passed the House on April 11th by a vote of 247-175. This bill creates two major alternative fuels demonstration programs which could fund projects at public transit systems.

The first, in Section 15033, would provide $10 million annually from FY 2004 to FY 2008 for the development of hydrogen fuel cell technology in buses. Funding would be provided for four demonstration sites, chosen by the Secretaries of Transportation and Energy, under the advanced vehicle technologies program. Sites would have to have hydrogen infrastructure for fuel cell bus operation; and be operated by entities with experience in the development of fuel cell bus technologies.

The second program, in Section 21709, would provide $10 million annually from FY 2004 to FY 2007 to create a transit bus demonstration program. The funds would be dispersed in the form of competitive, merit-based awards for five-year projects to demonstrate not more than 12 fuel cell transit buses and necessary infrastructure in three geographically dispersed localities. Preference would be given to those projects that most effectively reduce air pollution and mitigate congestion. A minimum 20 percent non-federal match is required for research projects under this program, and a minimum 50 percent non-federal match is required for commercial applications.

Senate Version

The Senate on Thursday, July 31st, struck a deal on comprehensive energy legislation to replace the version it had been working on, S. 14, with the version that the full Senate passed last year at the end of the 107th Congress. The deal was part of a compromise that allowed the Senate to complete its business, including passing energy legislation, voting on several of President Bush's judicial nominees, and passing an FY 2003 supplemental appropriations bill.

Outlook

The bill passed by the Senate on the 31st will, according to Senate Energy and Natural Resources Committee Chairman Pete Domenici (R-NM), be almost completely rewritten during the conference committee meetings to hash out differences between the Senate and House versions.

Action Call!

During the August Recess, showcase how important increased funding in public transportation is to your community. Invite your Member of Congress to take a tour of your transit property and urge them to support passage of a reauthorization bill with increased funding this year. Encourage your colleagues, employees, vendors and contractors to reach out to their Members of Congress through the Transit Action Center at www.apta.com/transitaction/.

For More Information

Visit the Government Affairs section of the APTA website at www.apta.com, or contact Rob Healy at (202) 496-4811 or Josh Fudge at (202) 496-4810. For information on Homeland Security issues, contact Tom Yedinak at (202) 496-4865. For issues related to Amtrak, contact Art Guzzetti at (202) 496-4814.

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