Bipartisan Debt Limit Deal Advances
Final Agreement Does Not Include Rescission of Public Transit COVID-19 Funds

According to Secretary of the Treasury Janet Yellen, the United States will be unable to meet all financial commitments on June 5, 2023, if Congress does not suspend or increase the Debt Limit. Over the weekend, Congressional Leaders and the White House reached a bipartisan agreement to suspend the Debt Limit and cut spending. Importantly, the final agreement does not include a rescission of remaining public transit COVID-19 funds.

The House of Representatives is scheduled to consider H.R. 3746, the Fiscal Responsibility Act of 2023, on Wednesday, May 31, and the Senate is likely to begin consideration of the bill immediately after House passage.

Suspends Debt Limit

H.R. 3746 suspends the Debt Limit through January 1, 2025. The bill also reduces spending in several ways.

Establishes Budgetary Caps

First, the legislation establishes budgetary caps on both defense and nondefense spending for fiscal years (FY) 2024 and 2025. In FY 2024, total nondefense spending, which includes public transportation funding, is $703.7 billion, which is a $40.2 billion (5.4 percent) cut compared to FY 2023 funding levels.

After enactment of the bill, the House and Senate Committees on Appropriations will divide total funding among the 12 Appropriations Subcommittees and provide each Subcommittee with an allocation (i.e., section 302(b) allocation) for its bill. The total allocation for the Transportation, Housing and Urban Development, and Related Agencies (THUD) Appropriations Subcommittees will be critical to efforts to fund public transportation at the authorized levels of the Bipartisan Infrastructure Law. At this point, it is unclear what level of funding cut the THUD Subcommittees may bear. APTA is urging the House and Senate Committees on Appropriation to provide a THUD allocation that enables the Subcommittees to fully fund public transportation consistent with the Bipartisan Infrastructure Law.

Rescinds COVID-19 Funds

Second, the bill rescinds the unobligated balances of remaining COVID-19 funds from numerous programs, including rescissions from Amtrak, the Federal Highway Administration, and the Federal Aviation Administration. The bill does not rescind public transit COVID-19 unobligated balances. Over the past several weeks, public transit agencies have obligated approximately $1.5 billion of their remaining funds and the total balance of COVID-19 public transit funding is likely less than $1 billion. Although the rescission of public transit COVID-19 is not included in H.R. 3746, we expect some Members of Congress to continue to seek to rescind these funds. APTA strongly urges public transit agencies and States to obligate all remaining COVID-19 relief as soon as possible.

Streamlines Environmental Review

Third, the bill modifies the National Environmental Policy Act (NEPA) (42 U.S.C. § 4332) to streamline environmental review processes. The legislation sets timelines for completing environmental reviews and establishes responsibilities for lead agencies during the review process, codifying elements of the Trump Administration’s “One Federal Decision” policy.

The bill amends NEPA to redefine the scope of environmental reviews to include “reasonably foreseeable environmental impacts of the proposed agency action”; “reasonably foreseeable adverse environmental effects”; and “a reasonable range of alternatives to the proposed action that are technically and economically feasible and meet the purpose and need of the proposed action.” The bill includes procedures for determining the level of review as well as new definitions. For example, an environmental impact statement is required where an agency action has a “reasonably foreseeable significant effect on the quality of the human environment.” The bill defines “major Federal action”, as an action that is subject to “substantial Federal control and responsibility.”

The legislation codifies the One Federal Decision policy to include the development of a schedule for environmental documents. For environmental impact statements, the goal of completion is within two years, and for environmental assessments the goal of completion is within one year. The bill also provides a right of action if statutory deadlines are not met. Environmental impact statements are limited to 150 pages, or 300 pages if the review is determined to be of extraordinary complexity. H.R. 3746 also establishes procedures for agencies to adopt each other’s categorical exclusions to facilitate project delivery. In addition, the legislation permits project sponsors to assist agencies in preparing environmental documents under the supervision of an agency.

Finally, the bill requires the White House Council on Environmental Quality to conduct a study on the potential for online and digital technologies to aid in communications and data sharing during the environmental review process and the potential of a government-wide permitting portal.

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