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May 16, 2008
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APTA > Government Affairs > Washington Reports & Alerts  

Legislative Update

Senate Appropriations Committee Sets FY 2007 Transit Funding at $8.875 Billion

August 3, 2006

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The Senate Committee on Appropriations approved its version of the Fiscal Year (FY) 2007 Transportation, Treasury, and Housing and Urban Development, the Judiciary, and Related Agencies Appropriations bill (H.R. 5576) on July 20. The bill funds Federal Transit Administration (FTA) programs at an $8.875 billion level, a 4.4 percent increase over the final amount appropriated for FY 2006. The Senate bill adheres to the transit program authorized under the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) in most respects, but it would fund only $100 million of the $200 million authorized in FY 2007 for the small starts program. Thus, like the Administration's FY 2007 budget proposal, the bill would provide $100 million less than the $8.975 billion authorized and guaranteed for the federal transit program in FY 2007.

Earlier, the House passed its version of the FY 2007 Transportation Appropriations bill on June 14. While the House-passed bill also provides no funding for the small starts program in FY 2007, it funds the federal transit program above the authorized $8.975 billion level at $8.979 billion and uses authorized small starts funds for the existing new starts program. The FTA has not completed its rulemaking for this newly-created program for smaller fixed guideway projects such as street cars, commuter rail, and bus rapid transit lines, but proposed interim guidance (http://dmses.dot.gov/docimages/pdf96/400782_web.pdf) for the program was published on June 5.

At present, Congress appears unlikely to complete action on the FY 2007 Transportation Appropriations bill until after the mid-term elections on November 7. The House adjourned for the August recess on July 28, and the Senate is scheduled to adjourn on August 4. While both houses of Congress will return to session during the week of September 4, they are expected to adjourn again in late September for the upcoming elections. Since the Senate is not expected to bring the committee-approved bill to the floor during the short September session, it is unlikely that the final FY 2007 Transportation Appropriations bill will be completed until a lame duck session scheduled to begin the week of November 13. Under this scenario, Congress will need to pass a continuing resolution in late September to provide funds for the new fiscal year that begins on October 1.

ACTION CALL!

Senators and Representatives will be in their districts during the August recess. During this period, they often hold public events to hear from their constituents. Please try to speak to your Senators, Representatives and their staffs at these events or contact their offices with the following message:

  • Ask Senators and Representatives to support transit funding in the FY 2007 Transportation Appropriations bill at the House-passed level, which at $8.979 billion is $4 million above the level authorized and guaranteed by SAFETEA-LU.
  • Ask Senators and Representatives to support transit security funding in the FY 2007 Homeland Security Appropriations bill at the House-passed level, which provides $200 million for transit and passenger rail security grants, $50 million more than the amount in the Senate-passed version. Conference negotiations on this bill will begin in August, so please communicate this message at your earliest opportunity.


During the lame duck session, the Senate could complete action on the FY 2007 Transportation Appropriations bill and then proceed to a conference with the House. It is also likely that the bill will be included in an omnibus appropriations bill that incorporates several appropriations bills. If Congress utilizes an omnibus in order to finish the appropriations process quickly, the Senate could go to conference on the transportation appropriations bill using the legislative text reported by the Senate Appropriations Committee last week and the House-passed bill.

FY 2007 Transportation Appropriations Bill (H.R. 5576)
   

Homeland Security Funding Bill Approved by Senate

On July 13, the Senate approved the FY 2007 Homeland Security appropriations bill (H.R. 5441). The bill provides $150 million for transit and rail security funding, the same amount provided in the FY 2005 and FY 2006 Homeland Security Appropriations laws (P.L. 108-334 and P.L. 109-90). The Senate and House bills will go to a conference committee following the August recess, with action on the final conference bill expected in September. The Senate bill, with $32 billion in total funding, passed unanimously after an amendment to raise the funding for transit security failed on a 50 to 50 procedural vote. Senator Charles Schumer (D-NY) sponsored the amendment that would have added $200 million to the $150 million already in the bill for transit and rail security grants; provided another $50 million for research and development of protective and warning systems; and added another $50 million to help local governments pay overtime to law enforcement agencies during terrorist threat-related emergencies.

Earlier, the House of Representatives approved its version of the bill on June 6. During consideration of the bill on the House floor, the House agreed by a vote of 225-197 to an amendment that increased funding for transit and rail security grants by $50 million, raising funding in the bill for transit and rail security to $200 million.

House Committee Approves Authorization Legislation for Transit Security

The House Transportation and Infrastructure Committee on July 19 unanimously approved a bill that would authorize $3.4 billion for transit security over three years. The bill would authorize direct grants to transit agencies for security programs to be administered by the Department of Transportation, transferring that responsibility from the Department of Homeland Security (DHS). For capital program grants, the bill would authorize $775 million in FY 2007; $825 million for FY 2008; and $880 million for FY 2009. It also authorizes operational security assistance grants of $400 million for FY 2007; $300 million for FY 2008; and $200 million for FY 2009. The bill would require each transit authority to develop a prioritized plan of needed capital and operational security improvements based on the results of a security assessment. The Secretary of Transportation, in consultation with DHS, would allocate grant funding among the transit agencies that have received or are undergoing security assessments. Under the bill, a transit agency receiving a grant would have to designate a security coordinator.

Separately, the House Homeland Security Committee on July 19 approved a bill that would authorize $400 million in FY 2007 for Department of Homeland Security transit and rail security grants. The bill requires the Secretary of Homeland Security, acting through the Transportation Security Administration, to develop regulations that establish security standards and procedures for vulnerability assessment and security plans for rail and public transportation systems. The bill also requires that transit authorities conduct an assessment of the vulnerability of the rail or public transportation system to an act of terrorism; and prepare and implement a security plan that addresses the vulnerabilities identified in the vulnerability assessment.

For more information on transit security issues, please contact Tom Yedinak of APTA's Government Affairs Department at (202) 496-4865 or email tyedinak@apta.com.

Comments Due on SILO/LILO Transactions

APTA has been working with other interested parties, including the Government Finance Officers Association (GFOA), to address the potential impact of legislation enacted in May that could adversely affect transit agencies that entered Sale In/Lease Out (SILO) or Lease In/Lease Out (LILO) transactions. The Tax Increase Prevention and Reconciliation Act of 2005 (P.L. 109-222) could impose a substantial annual excise tax on transit agencies that entered into SILO/LILO transactions. The law allows the Treasury Department to define such transactions as "listed transactions" which would make them subject to an annual tax on "allocable proceeds" equal to up to 35 percent of the higher of 75 percent of the "proceeds" received by a tax-exempt entity that are attributable to a prohibited tax transaction or of the "net income" attributable to such a transaction.

APTA members and staff have met or talked with staff from House and Senate tax writing committees and staff from the Joint Committee on Taxation. Recently, APTA, GFOA, and a number of transit system representatives met with staff at the Treasury Department to make the case against application of such taxes to SILO/LILO transactions entered into by transit agencies. Comments on this issue are due to the Treasury Department by August 11, and APTA will submit comments by that date. APTA urges all transit systems that entered into such transactions to submit their own comments to the Treasury Department by August 11 and to include arguments made by APTA. Draft APTA comments will be posted on the Government Affairs section of APTA's web site, on the SAFETEA-LU Resource Center's "Rulemakings and Notices" page (http://www.apta.com/government_affairs/safetea_lu/rulemaking_page.cfm).

For more information, please contact Dan Duff of APTA's Government Affairs Department at (202) 496-4860 or dduff@apta.com.

Tax-Credit Legislation Introduced to Benefit Rail Freight Interests

A bill to encourage increased investment in rail freight capacity was introduced in the U.S. Senate on July 26, 2006, by Senator Trent Lott (R-MS). The "Freight Rail Infrastructure Capacity Expansion Act" (S.3742) would establish a 25 percent investment tax credit for expenditures on new freight rail infrastructure. Eligible expenditures would include new rail track, intermodal facilities, rail yards, locomotives or other rail infrastructure expansion projects.

Railroads, ports, shippers, trucking companies and other transportation-related businesses could all take advantage of the proposed credit. The credit would be available for "new qualified freight rail infrastructure property", which is defined as property constructed after the dated of enactment of the proposed law. Infrastructure that is installed to replace existing infrastructure would not be eligible.

On April 26, 2006, APTA President Bill Millar testified before the House Railroads Subcommittee, concurring that an immediate expansion in America's railroad network is necessary to meet growing rail needs, with emphasis on the need for a comprehensive approach to also consider passenger rail needs. A legislative position and strategy is being developed by APTA's Commuter and Intercity Rail Legislative Subcommittee to include passenger rail in the Senate bill and in any future House bills relating to this topic.

For more information on passenger or freight rail issues, please contact Art Guzzetti of APTA's Government Affairs Department at (202) 496-4814 or email aguzzetti@apta.com.

 

   

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