The Safe, Accountable, Flexible and Efficient
Transportation Equity Act of 2003

SECTION 1. SHORT TITLE; TABLE OF CONTENTS. [Legislation] This section provides that the bill may be cited as the Safe, Accountable, Flexible, and Efficient Transportation Equity Act of 2003 (SAFETEA), and provides a table of contents.

SEC. 2. DEFINITIONS. [Legislation] This section defines terms that are used in the bill.

TITLE I - FEDERAL-AID HIGHWAYS

SUBTITLE A -- FUNDING

SEC. 1101. AUTHORIZATION OF APPROPRIATIONS. [Legislation]

This section authorizes sums out of the Highway Trust Fund (other than Mass Transit Account) for, the Interstate maintenance program, the National Highway System, the bridge program, the surface transportation program, the congestion mitigation and air quality improvement program, and other programs. New programs include a core apportioned program, the Highway Safety Improvement Program, and an Infrastructure Preservation and Maintenance Program that would promote projects with immediate benefits for highway system condition and operation.

SEC. 1102. OBLIGATION CEILING. [Legislation]

Section 1102 establishes limitations on obligations for Federal-aid highway and highway safety construction programs authorized by this Act, and provides the way in which these obligation limitations would be administered. This section is similar to section 1102 of the Transportation Equity Act for the 21^st Century (TEA-21).

Subsection (a) sets forth the obligation limitation amounts for fiscal years 2004 through 2009 for Federal-aid highway and highway safety construction programs.

Subsection (b) provides exceptions from the obligation limitations established in subsection (a). Paragraphs (1) through (8) are repeated from TEA-21. Paragraph (9) is added to address 3-year obligation authority (OA) made available under TEA-21 for research programs and "no-year" OA made available for certain programs and projects under TEA-21 or in subsequent appropriations acts.

The 3-year OA for research programs under section 1102(e) of TEA-21 that was made available for FY 2002 would remain available through 2004, and the OA for FY 2003 would remain available through FY 2005.

Section 1102(g) of TEA-21 made the OA for high priority projects, the Appalachian development highway system, funding for the Woodrow Wilson Memorial Bridge Authority Act, and $2 billion of minimum guarantee funds available until used. Under TEA-21, the OA for these specified funds remains available in addition to any obligation limitation imposed on obligations for Federal-aid highway and highway safety construction programs in future fiscal years. The appropriations bills for fiscal years 1999 through 2003 also provided no-year OA for these specified programs and certain other programs and projects.

Subsection (b)(9) would exempt the "no-year" obligation authority and the 3-year research obligation authority made available in prior years from the annual obligation ceiling for Federal-aid highways and highway safety construction programs. The purpose of this addition is to clarify that this obligation authority continues past the term of the authorization bill and is not subject to any obligation limitation set for a succeeding fiscal year in the reauthorization bill.

Subsection (c) differs from the TEA-21 provision. Under TEA-21, in years when the total obligation limitation is less than the total new authorizations, the authorizations for these allocated programs are reduced to the amount of limitation they receive. The authorizations that are removed or "lopped off" from these programs are then distributed to the States as additional funding that can be used on STP-eligible projects. This section would repeal the "lop off" provisions. In this Act, the repeal of the "lop off" provisions would not have a significant impact because the obligation limitation set in this section would exceed the contract authority subject to the limitation authorized in this Act.

There are two additional changes to the distribution of obligation authority provision. First, the proposed infrastructure performance and maintenance program would be added to the programs, listed in paragraph (1), that receive 100 percent obligation authority. Second, high priority projects and the Woodrow Wilson Memorial Bridge Authority Act funds would be deleted from the provision in paragraph (2) granting "no-year" obligation authority because this bill does not provide an authorization for either of these programs.

Subsections (d), (e), and (f) are substantively unchanged from the TEA-21 provisions.

Subsection (g) dealing with the obligation authority adjustment for revenue aligned budget authority (RABA) would be modified by substituting the term "adjustment" for the term "increase" each place that it appears.

Subsection (h) sets forth the obligation limitation for administrative expenses for fiscal years 2004 through 2009.

The Disadvantaged Business Enterprise program is addressed in section 1811 of the bill.

SEC. 1103. APPORTIONMENTS. [Legislation]

Subsection (a) of this section would amend 23 U.S.C. 104(a) to change the Federal-aid highway program administrative takedown percentage from 1-1/16 to an amount not to exceed 1.4 percent of the specified programs.

Subsection (b) would: (1) clarify from which title 23 programs, including the minimum guarantee program, metropolitan planning funds are to be set aside; (2) clarify that one percent of funding, not a lesser percentage, shall be deducted for metropolitan planning from the specified programs; (3) move a provision, which allows a metropolitan planning organization to make unused planning funds available to the State to be used for statewide planning, from section 134(n) of title 23 to section 104(f)(3); and (4) move a provision concerning matching funds from section 104(f)(3) to new paragraph (6) for clarity.

Subsection (c) would repeal the definition of "State" under section 1103(n) of TEA-21. In TEA-21, "State" was defined to include only the 50 States and the District of Columbia for purposes of apportioning funds under sections 104, 105, 144, and 206 of title 23. This definition excluded Puerto Rico. By repealing this section, the definition of "State" for purposes of apportioning funds under sections 104, 105, 144, and 206 of title 23, would be the definition under section 101(a)(32) of title 23, which includes Puerto Rico. Thus, Puerto Rico would be included in formula apportionments and minimum guarantee.

Subsection (d) would provide funding from the Surface Transportation Program for the preferred option determined by a study for highway access near the Executive Office complex.

Subsection (e) would extend the funding from the National Highway System (NHS) program for the Alaska Highway. The funding would be extended from 2004 through 2009.

SEC. 1104. MINIMUM GUARANTEE. [Legislation]

This section would continue the TEA-21 provision (23 U.S.C. 105) authorizing additional funds (such sums as necessary) for allocation to ensure that a State's percentage of total apportionments is at least 90.5 percent of its percentage contribution to the Highway Trust Fund.

Subsection (a) provides that only those States listed in subsection (b) would receive a minimum guarantee apportionment through the minimum guarantee formula. It would also provide that one million dollars is the minimum amount any State listed in subsection (b) would receive through the minimum guarantee formula. The new infrastructure performance and maintenance program, described below, would be added to the list of programs included in the minimum guarantee calculation.

Current law excludes Puerto Rico from the determination of the guaranteed percentage shares and the minimum guarantee formula computation. A special rule would be added to provide Puerto Rico $1 million per year of minimum guarantee funding. This treatment is consistent with the change proposed in section 1103(b) of this bill to use the title 23 definition of State, which includes Puerto Rico, in order to include Puerto Rico in formula apportionments.

One-half of the total amount to be apportioned under this section would be apportioned to the States for Interstate Maintenance, NHS, STP, bridge, CMAQ, and Highway Safety Improvement in amounts proportional to each program's share of the total apportionments to each State for all such programs for each fiscal year. The funds would be added to each State's section 104 formula apportionment for such program. The remaining 50 % of minimum guarantee funds would be allocated to the States for the flexible uses provided under section 133, the STP.

New subsection (f)(4) would provide that a State's percentage return shall be obtained through a calculation that excludes funds apportioned to Puerto Rico.

SEC. 1105. REVENUE ALIGNED BUDGET AUTHORITY (RABA). [Legislation]

This provision would amend section 110 of title 23, U.S.C., to extend the RABA provision through FY 2009. It would amend section 110 to provide that if the RABA adjustment in a fiscal year is negative, the amount of contract authority apportioned to the States for that year shall be reduced by an amount equal to the negative RABA. Under TEA-21, negative adjustments were delayed until the succeeding fiscal year.

This provision would add the proposed highway safety improvement program to the list of programs for which States would receive funds made available for apportioned programs under RABA.

This provision would also make technical corrections to section 110, including striking subsections that have already been carried out.

SUBTITLE B - NEW PROGRAMS

SEC. 1201. INFRASTRUCTURE PERFORMANCE AND MAINTENANCE PROGRAM. [Legislation]

This section would establish a new Infrastructure Performance and Maintenance Program (IPAM) within the Federal-aid Highway Program. The program would provide States with $1 billion for each of fiscal years 2004-2009, and would focus on projects that preserve existing highway facilities or alleviate traffic chokepoints. The program seeks to promote projects that result in immediate benefits for highway system condition and performance while avoiding long-term commitments of funds.

Only highway projects for system preservation, preventative maintenance, or operational improvement that are already eligible under the Interstate Maintenance Program, the National Highway System Program, and the Surface Transportation Program would be eligible for funding under this new program. Operational improvements would only be at points of recurring highway congestion (i.e., bottlenecks) and would include intelligent transportation system initiatives. Projects could also include limited physical alteration of existing facilities such as interchange ramp improvements, short sections (i.e., no more than about one mile) of added through lanes, and intersection modernization.

The program is structured to promote the types of projects that can be undertaken and completed within a short timeframe. Funds under this program could not be transferred to another Federal agency or any other program, notwithstanding sections 104 and 126 of title 23.

Funds would be apportioned to the States (including the District of Columbia and Puerto Rico) using the same formula that is currently used to apportion STP funds. Although funds apportioned under this program would be available for obligation as though they were apportioned under chapter 1 of title 23 (contract authority), they would not be subject to any deduction or set-aside requirement that might otherwise apply under such chapter. The Federal share payable would be determined in accordance with the provisions of section 120 of title 23, based on the type of project funded.

The funds would be subject to the overall obligation ceiling for the Federal-aid highway program, but States would receive obligation authority for funds under this program in an amount equal to the amount of contract authority apportioned.

The funds would have to be obligated by a State within six months of apportionment or the Secretary would withdraw the funds and accompanying obligation authority and redistribute the funds and authority to States that have fully obligated their initial apportionment under this program and demonstrated that they are able to obligate additional funds before the end of the fiscal year. All funds apportioned in a fiscal year would have to be obligated before the end of that fiscal year or they would lapse.

SEC. 1202. CLARIFY FEDERAL-AID ELIGIBILITY FOR CERTAIN SECURITY PROJECTS. [Legislation]

This provision would amend the definitions of "construction" and "maintenance" in 23 U.S.C. 101 to include transportation-related homeland security projects. These security projects would include those for detecting potential attacks, preventing actual attacks, protecting the highway infrastructure against attacks and resulting damages, ensuring emergency preparedness, and developing the ability for quick response and recovery. The projects would be subject to countermeasures to reduce the identified security vulnerabilities and would be identified through the regular transportation planning process (as required by a related amendment to 23 U.S.C. 120).

SEC. 1203. INTERSTATE HIGHWAY SYSTEM. [Legislation]

This section would change the declaration of policy in section 101 of title 23, United States Code, to update the section to reflect the change in emphasis on the Interstate System from initial construction to reconstruction and preservation. The change would also delineate the critical importance of the Interstate System to the current and future economic vitality, national security, and general welfare of the Nation.

SEC. 1204. MILITARY VEHICLE ACCESS (OVERSIZE AND OVERWEIGHT VEHICLES; RELIEF FROM TOLLS). [Legislation]

This section would authorize the Secretary of Transportation, in consultation with the Secretary of Defense and the Secretary of Homeland Security, to issue orders and procedures to expedite the highway movement of marked military vehicles and convoys. These procedures may include the establishment of temporary expanded vehicle size, weight, and oversize/overweight permit requirements, and provisions for exempting such vehicles from the payment of tolls and expedited movement through toll facilities. This section would preempt inconsistent State and local laws and regulations, and would exempt such procedures and orders from compliance with the requirements of prior notice and opportunity to comment under the Administrative Procedure Act (5 U.S.C. § 553).

SEC. 1205. FREIGHT TRANSPORTATION GATEWAYS; FREIGHT INTERMODAL CONNECTIONS. [Legislation]

In the interests of international freight security, quality of life in and around key freight gateways, and in recognition of the expected increase in congestion in these same areas, the Nation's surface transportation system and its intermodal connectors must be prepared to accommodate expected traffic increases in an efficient and safe manner. Federal, State, local, and private sector partnerships are key to achieving success in maintaining and advancing the quality of the Nation's intermodal freight transportation network to support productivity, national security, and safety, while balancing environmental impacts.

The purpose of the Freight Gateways Program, through a combination of eligibility changes, innovative finance emphasis, and targeted investment, is to enable systemic, intermodal improvements for freight movement into and through major trade transport gateways and hubs, and improvements to the transportation infrastructure that connects these gateways to the Nation's mainline transportation networks. The definition of "gateway" is broad, allowing for wide-ranging discussion between States and freight stakeholders to determine the scope and scale of initiatives needed to enhance freight movement to, from, and through a gateway.

In new section 325 of title 23, States would be directed to ensure that intermodal freight transportation needs are integrated into the project development process, including transportation planning. States and localities would be encouraged to adopt innovative financing strategies for freight gateway improvements, including new user fees and private sector investment. In addition, States would be directed to create a freight transportation coordinator position to coordinate public and private collaboration in regional solutions to freight transportation and freight gateway problems.

This section also would amend section 133 of title 23, to make Intermodal Freight Transportation Projects eligible for funding under the Surface Transportation Program. This proposal would allow funding of publicly owned intermodal transfer facilities or intermodal access to such facilities and would be limited to transportation infrastructure modifications necessary to facilitate intermodal access to, from, and within ports. Intermodal ITS projects would also encouraged.

This section also would amend section 103(b) of title 23, to set aside dedicated funding for intermodal freight and Strategic Highway Network (STRAHNET) connectors from funds apportioned for the NHS. The amount of such funding would be determined by the proportion of freight/STRAHNET connector miles in a State compared to the total NHS mileage in the State, or 2% of funds apportioned for the NHS in a fiscal year, whichever is greater. A State may be exempted from the required set-aside by showing that connectors in the State are in good condition and providing an adequate level of service.

The intent of these provisions is to direct use of Federal-aid dollars: (1) for intermodal freight movement to relieve congestion related to existing (and future) high levels of truck traffic at major gateways and hubs; and (2) to facilitate the movement of military vehicles and equipment.

A 90% Federal share would be authorized for projects on intermodal and STRAHNET connectors. Most connectors are in local ownership, and the match is often a problem for local jurisdictions.

Section 1304 of this bill would amend section 181 of title 23 to include "a public or private freight rail facility" in the definition of "project" for purposes of the Transportation Infrastructure Finance and Innovation Act (TIFIA).

All of these initiatives are designed to provide program incentives to States and local officials to expand the ability of existing programs to address emerging gateway needs and to encourage the voluntary adoption of new funding and financing strategies to leverage additional State/local/private investment in these critical areas.

In regard to the Department of Defense, changes throughout this section would support mobilization of military vehicles and improvements to STRAHNET connectors in the interests of national security.

This section, in combination with proposed amendments to TIFIA under section 1304 of the bill, would broaden the flexibility of States and metropolitan planning organizations to support Freight Gateway projects and other major freight transportation improvements and to implement innovative public-private solutions to complex freight challenges important to our economy, economic competitiveness, and security.

SEC. 1206. AUTHORITY FOR ALTERNATIVE TIMESAVING PROCEDURES FOR CRITICAL TRANSPORTATION SECURITY PROJECTS. [Legislation]

Critical, time-sensitive highway and public transportation security projects are projects that are necessary to address an imminent threat to a transportation facility or to repair damage to a transportation facility caused by a terrorist attack against the United States. Examples of such projects include: structural hardening, relocation of roads from underneath critical structures, property acquisition to create secure zones, or repairing or replacing a bridge or tunnel that has been damaged or destroyed by a terrorist attack. The types of projects that are included in this definition will be more specifically defined in regulations issued by the Secretary. Any critical, time-sensitive security project shall be identified by the Secretary in consultation with the owner-operator of the transportation facility. Threats to transportation facilities will be assessed in consultation with the Department of Homeland Security.

This section would direct the Secretary of Transportation to develop and implement expedited procedures to advance critical, time-sensitive highway and mass (public) transit security projects, including expedited procedures for planning, environmental review, public involvement, acquisition of right-of-way, and contracting. Environmental reviews include any environmental reviews, analysis, opinion, or issuance of an environmental permit, license, or approval required pursuant to Federal law. The procedures will be developed with the concurrence of other affected Federal agencies whose authorities will be affected by the procedures and in consultation with any other Federal agencies that the Secretary determines have an interest in the procedures. For the limited purpose of expediting interim measures needed to address the threat of imminent harm to a transportation facility, the Secretary may provide that these procedures are exclusive of any other statute relating to planning, environmental reviews, public involvement, acquisition of right-of-way, and contracting, and therefore they may be inconsistent with such other statutes, or, in effect, "waived" for purposes of these procedures. However, the Secretary may exercise this authority only if he or she determines that such measures are necessary for the protection of the public and receives the concurrence of any other Federal agency responsible for administering the relevant parts of such statutes.

Recognizing the importance of these projects, the other agencies will work closely with the Secretary of Transportation in developing expedited procedures for critical, time-sensitive security projects and will assist in drafting regulatory provisions to be issued by the Secretary of Transportation to implement any procedures upon which they have concurred. The procedures to be developed under this section shall be established by rules to be issued by the Secretary no later than one year after the enactment of this law. We anticipate that other agencies would make any conforming changes expeditiously in their regulations, as appropriate.

SUBTITLE C -- FINANCE

SEC. 1301. FEDERAL SHARE. [Legislation]

Section 120 of title 23 would be amended to: (1) simplify the calculation of the sliding scale applicable to all projects; (2) remove the requirement, currently in (b)(2), for a State electing the increased Federal share to enter into an agreement; and (3) require a revision to the rates as needed. In addition, the term "public domain lands" would be replaced with "public lands" because of the difficulty in obtaining the information on public domain lands.

The provisions that allow for a lower Federal share in subsections (a)(2) and (b)(2) would be removed because the authority for a lower Federal share is contained in section 120(i).

SEC. 1302. TRANSFER OF HIGHWAY AND TRANSIT FUNDS. [Legislation]

This provision would clarify that title 23 funds may be transferred by the Secretary to the Federal Transit Administration for other than a transit capital project, provided such project is eligible for assistance under title 23. This amendment would also permit funds derived from the Highway Account of the Highway Trust Fund to be transferred by the Secretary to another Federal agency if that agency has expertise with regard to the type of project to be funded and the Secretary determines that the agency should administer the funding. Such transfers would accelerate project delivery for those unique kinds of projects.

The Secretary could, at the request of a State, transfer funds apportioned or allocated to that State that are authorized or administered under this title, along with an equal amount of obligation authority, to another State or to the Federal Highway Administration. The funds transferred could be used for the same purpose and in the same manner for which they were authorized. Such transfer would have no effect on any apportionment formula used to distribute funds to the States under sections 104, 105, or 144 of title 23.

The provision described in paragraph (4) would allow a State to request a transfer of its apportioned funds to another State or to FHWA. A transfer would simplify the process for administering a project that is jointly funded by two or more States. Concurrence by the metropolitan planning organization would be required to transfer Surface Transportation Program funds that are suballocated to urbanized areas over 200,000 population. This means, for example, that a single FHWA account could be established annually for the National Cooperative Highway Research Program (NCHRP). When commitments are received from the States, the funds would be transferred to a single account, and bills from the Transportation Research Board would be paid from that account. This would eliminate the labor-intensive requirement of distributing each bill back to the State accounts. This change would encourage pooling of funds to avoid duplication of effort, to examine projects of mutual interest, and to address issues of regional or national significance.

SEC. 1303. STATE INFRASTRUCTURE BANK PILOT PROGRAM. [Legislation]

This section authorizes a new State Infrastructure Bank pilot program. The proposed pilot program would limit participation to no more than five States, including States that entered into a cooperative agreement under the State Infrastructure Bank pilot program authorized by the Transportation Equity Act for the 21^st Century (TEA-21). States interested in participating in the pilot program would be required to submit an application to the Secretary. This section would require the Secretary to evaluate the applications based on criteria the Secretary establishes, provided that the criteria would include: the State's ability to provide non-Federal funds to capitalize the bank; the existence of State enabling legislation that clearly allows for full State Infrastructure Bank participation; the State's strategy for encouraging non-Federal repayment sources from project sponsors; the amount of Federal funds the State will commit to the State Infrastructure Bank as a percentage of its Federal-aid apportionments; the State's eligibility under TEA-21; and the State's past experience with a State Infrastructure Bank, including the TEA-21 pilot program, or comparable financing mechanisms.

A State selected by the Secretary would enter into a cooperative agreement with the Department. If a selected State does not fund its State Infrastructure Bank within 90 days of the execution of the cooperative agreement, the Secretary would have the authority to terminate the cooperative agreement with that State and select another State for inclusion in the pilot program. If the Secretary determines that a selected State is not implementing the State Infrastructure Bank in accordance with the cooperative agreement, the Secretary would have the authority to prohibit a State from contributing additional Federal funds to its State Infrastructure Bank.

Under TEA-21, in addition to funds from certain transit programs and rail programs, States could transfer to an infrastructure bank the total amount of funds apportioned to it under the National Highway System program, Surface Transportation Program (except for funds allocated for safety programs and the transportation enhancements program), Interstate Maintenance program, minimum guarantee, and bridge program. Under the proposed pilot program, funding would be derived only from the highway and transit programs, with the amount of apportioned funds transferred to the infrastructure bank limited to 10 percent. Experience has shown that States contribute less than 10 percent of the eligible funds to their State Infrastructure Bank. This limitation would also prevent a State from putting an entire category of funds in the State Infrastructure Bank. The proposal also would establish highway and transit accounts within the State Infrastructure Banks.

The TEA-21 pilot program limited Federal disbursements from a State Infrastructure Bank to an annual rate of not more than 20 percent of the amount designated by the State for the infrastructure bank's capitalization. TEA-21 also required the Secretary and the State to revise a cooperative agreement entered into under the National Highway System Designation Act of 1995 (Pub. L. 104-59). This pilot program would eliminate both of these requirements. The limitation on Federal disbursements has no practical application under this pilot program. The elimination of the requirement to revise the cooperative agreement would clarify that States that created a State Infrastructure Bank under the National Highway System Designation Act of 1995 could continue to operate under the requirements of that Act and would not be required to amend their State Infrastructure Bank agreement to comply with this pilot program. However, a State operating a State Infrastructure Bank under the National Highway System Designation Act of 1995 could not add new Federal funds to the infrastructure bank.

Another change from TEA-21 is that the State Infrastructure Banks would be required to report annually, instead of biennially, to the Secretary. This section also would make some changes to the definitions section.

The remaining provisions remain substantively unchanged from the TEA-21 pilot program, including the application of Federal requirements to projects financed from repayments to an infrastructure bank from projects assisted by the bank.

SEC. 1304. TRANSPORTATION INFRASTRUCTURE FINANCE AND INNOVATION ACT (TIFIA) AMENDMENTS. [Legislation]

Section 1304 would amend sections 181 through 189 of title 23.

The proposed change to section 181(3) conforms the existing language to conventional capital markets terminology.

The proposed elimination of existing section 181(7) reflects the Department's decision not to use local servicers to perform the enumerated duties on behalf of the Secretary. Using a local servicer for any particular TIFIA credit facility would mean using multiple servicers for the program. The Department believes that ongoing servicing of TIFIA loans should be managed by a single entity, and it has contracted directly with a major banking firm to service the complete portfolio of TIFIA credit instruments.

The proposed change to section 181(8)(D), as redesignated, expands the definition of freight-related projects eligible for TIFIA assistance. The provision would also make eligible a group of such related projects, each of which separately might not meet the threshold requirements, to apply for TIFIA credit assistance. The cost of freight transportation improvements is borne by both the public and private sectors. Limited funds available from either sector demand consideration of innovative ways to fund critical projects of national, regional, and local economic significance.

The proposed change to section 182(a)(1) simplifies the provision regarding statewide and metropolitan planning requirements. The existing provision contained needlessly specific language that could be interpreted to constrain TIFIA assistance in the case of a project with a construction timetable that extended beyond the typical three-year approved State Transportation Improvement Program (STIP).

The proposed change to section 182(a)(2) eliminates the reference to a local servicer (see discussion above) and clarifies that a State, local government, public authority, public private partnership or any other legal entity may submit an application.

The proposed change to section 182(a)(3) lowers the threshold cost for eligible projects from $100 million to $50 million.

The proposed change to section 182(a)(4) clarifies that the revenues dedicated to repay the TIFIA credit instrument must also secure the senior project obligations. The purpose of this modification is to prevent a project applicant from securing the TIFIA credit instrument with a revenue source of a lesser quality than that used to secure the senior debt. One of TIFIA's key financial disciplines is the requirement that a project's senior debt be rated in the investment grade category, but this offers security to DOT only if the same repayment source is being pledged to both the senior debt obligations and the subordinate TIFIA credit instrument. In such a structure, the investment grade rating for senior debt helps DOT evaluate its credit risk as a subordinate lender; although the TIFIA instrument itself may be sub-investment grade, the higher rating on the senior debt indicates that the project's overall risk profile is manageable.

The proposed change to section 182(b)(1) clarifies the distinction between the program's threshold requirements and project selection criteria.

The proposed change to section 182(b)(2)(B) clarifies that it is possible for the TIFIA credit instrument to be the senior obligation. Experience implementing the program has shown that certain projects may not issue debt obligations senior to the TIFIA credit instrument. In those cases, the TIFIA lien will be senior and thus will have to be investment grade.

The proposed change to section 183(a)(1)(A) clarifies the purpose of loan proceeds.

The proposed change to section 183(a)(4) codifies a DOT regulation that requires the project's senior obligations to receive an investment-grade rating in order to execute a secured loan agreement. This change eliminates the possibility of any funds being disbursed prior to the receipt of an investment grade rating.

The proposed change to section 183(b)(2) ensures that the amount of the TIFIA credit instrument may not exceed that of the senior project obligations. TIFIA is intended to be a minority project investor who benefits, via an investment grade rating on the senior debt, from the discipline of the capital markets. If the amount of senior debt is substantially smaller than the TIFIA loan, however, the debt might obtain an investment grade rating on the basis of a speculative revenue source unlikely to cover total debt service, and thus the senior rating would not reflect the relative creditworthiness of the TIFIA loan. In order to manage the risk in this situation, DOT's response has been to require that TIFIA assistance not exceed the amount of senior debt.

The proposed change to section 183(b)(3) has the same purpose as the change to section 182(a)(4).

The proposed change to section 183(b)(4) removes the ambiguity concerning the meaning of the word "marketable."

The proposed elimination of section 183(c)(3) deletes the description of sources of repayment funds because the subject is already covered in section 183(b)(3).

The proposed changes to section 184(a)(2) clarify the individual purposes for which line of credit proceeds can be made available.

The proposed changes to section 184(b)(3) would ease the restrictions on funding draws on a line of credit in order to help a borrower avoid a payment default. The line of credit is intended to benefit the rating on senior debt by acting as a contingent revenue source for the purpose of pro-forma calculations of senior debt service coverage. However, the current requirement that all project reserve funds be depleted before accessing the line dilutes this effectiveness, since bond indentures typically treat unrestored draws upon an issuer's reserve accounts as a technical default. The line of credit, therefore, is available too late in the flow of funds to provide a meaningful credit rating benefit. Having the ability to draw upon the line to avoid a technical default would improve its usefulness.

The proposed changes to section 184(b)(4) conform the interest rate setting mechanism for the line of credit with that for secured loans. A borrower that utilizes both a secured loan and a line of credit for the same project could, if the relative interest rates on these instruments vary significantly, be motivated to manipulate its use in the event of a revenue shortfall. The proposed change would allow the DOT to execute both such agreements on the same date at the same interest rate.

The proposed change to section 184(b)(5) has the same purpose as the proposed changes to sections 183(b)(3) and 182(a)(4).

The proposed changes to section 184(c)(2) clarify language regarding the scheduling of principal and interest repayments.

The proposed elimination of section 184(c)(3) deletes the description of sources of repayment funds because the subject is already covered in section 184(b)(5)(A)(i).

The proposed changes to sections 185(a), 185(b), and 185(c) have the same purpose as the proposed elimination of existing section 181(7), and clarify that the Secretary may establish fees to cover the cost of servicing TIFIA credit instruments.

The proposed change to section 185(d) clarifies that the program may retain outside counsel to assist in the underwriting and servicing of TIFIA credit instruments.

The proposed changes to section 188(a)(1) would maintain the program's annual funding authorization at the $130 million level established in TEA-21 for fiscal year 2003. The proposed authorization level represents 5 percent of the program's credit limitation, consistent with the TEA-21 authorization level.

The proposed new section 188(a)(2) would increase the limitation on annual administrative costs from $2 million to $3 million, to be drawn from program appropriations.

The proposed change to section 188(c) would maintain the program's annual loan limitation at the $2.6 billion level established in TEA-21 for fiscal year 2003. The proposed loan limitation is consistent with the proposed funding level and an assumed 5 percent subsidy rate.

The proposed elimination of section 189 reflects the fact that the Department has fulfilled this requirement.

SEC. 1305. INTERNATIONAL REGISTRATION PLAN AND INTERNATIONAL FUEL TAX AGREEMENT FACILITATION. [Legislation]

The International Fuel Tax Agreement (IFTA) and the International Registration Plan (IRP) are agreements among the U.S. States and Canadian Provinces that facilitate the efficient collection and distribution of fuel use taxes and apportioned registration fees among each member jurisdiction. Under both programs, each motor carrier designates its home State or Province as its "base jurisdiction," and that base jurisdiction is responsible for collecting the fuel use taxes and registration fees for itself and all other member jurisdictions in which its motor carriers operate. With the implementation of the North American Free Trade Agreement (NAFTA) and the anticipated liberalization of access for Mexican carriers into the United States, the participation in these programs by Mexican carriers is expected. Currently, the Mexican government imposes and collects fuel taxes and registrations fees differently than the U.S. States and Canadian Provinces.

Participation by Mexican states in the IRP and IFTA programs is currently being evaluated by U.S. States and Canadian Provinces under the aegis of the National Governors Association. In the interim, it would be necessary for Mexican motor carriers to use individual U.S. States or Canadian Provinces as their base jurisdictions. States have expressed the concern that augmenting their systems to accommodate Mexican carriers could entail some incremental costs that would be burdensome. This section would allow the Secretary to provide assistance to States to help with administrative needs resulting from serving as a base jurisdiction for motor carriers from Mexico.

SEC. 1306. COMMERCIALIZED REST AREA PILOT PROJECTS. [Legislation]

This section would allow States to conduct pilot projects on Interstate Highways that would permit commercial operations at existing or new rest areas. Such commercial operations include providing goods, services, and information that are of interest to the traveling public, State promotional or tourism-oriented items, and commercial advertising and displays (visible only in the rest areas). The State could permit private operators to run the projects.

To participate in a pilot project, States would have one year from the date of enactment to submit proposals to the Secretary. Proposals would describe the types of goods, services, and information to be provided at the rest area and include a plan for evaluating the results of the pilot projects. In addition, States would have to demonstrate that the proposed projects help implement the strategies developed in the "Study of Adequacy of Parking Facilities" prepared pursuant to section 4027 of TEA-21, and proposals would have to contain a review and update of the State's action plan for addressing commercial truck parking shortages. The Secretary would have to determine that the proposed projects conform to safety standards for passenger and commercial vehicles including lighting, security, and safe access to the Interstate roadway.

The States would be required to use the net income derived from the commercial operations for projects eligible under title 23. If vending machines are a part of the rest area, the provisions of the Randolph-Sheppard Act would apply.

SEC. 1307. HIGHWAY USE TAX EVASION PROJECTS. [Legislation]

The Highway Use Tax Evasion program supports State and Federal efforts to enhance motor fuel tax enforcement. To make the program more effective, this provision would amend section 143 of title 23 to: (1) dedicate funding for intergovernmental enforcement efforts; (2) allow projects for identification of tax evasion in the area of foreign imported fuel; (3) assist States and Indian Tribes in addressing issues related to the collection of State motor fuel taxes; and (4) provide for annual reporting on examinations, criminal investigations, and audits by the States and the Internal Revenue Service (IRS).

The provision would further amend section 143 to require the Secretary of Transportation to enter into three memoranda of understanding with the Commissioner of the IRS -- one for the purpose of completing, maintaining, and operating the excise summary terminal activity reporting system (ExSTARS); the second for the purpose of developing, operating, and maintaining a registration system for pipelines, vessels, and barges, and their operators, that make bulk transfers of taxable fuel; and the third for the purpose of establishing, operating, and maintaining an electronic database of heavy vehicle highway use tax payments. The IRS would be required to report twice a year on the status of the three projects covered by the memoranda of understanding.

Funding allocated under this program would supplement State highway use and fuel tax enforcement programs; enable the IRS to complete, operate, and maintain ExSTARS; and enable the IRS to establish and maintain the registration system and the electronic database.

SUBTITLE D - PROGRAM EFFICIENCIES AND IMPROVEMENTS -- SAFETY

SEC. 1401. NATIONAL HIGHWAY SAFETY gOAL; NATIONAL BLUE RIBBON COMMISSION ON HIGHWAY SAFETY. [Legislation]

The social and economic costs of highway accidents are estimated at more than $230 billion each year. In 2001, there were more than 42,000 fatalities and 3 million injuries. To reverse this trend, the highway safety community must work together to significantly reduce highway fatalities and injuries.

This section would establish a national goal of reducing highway fatalities. Identification of a national safety goal has been very successful in helping European countries achieve excellent safety results, including low levels of highway crashes, fatalities, and injuries.

Section 1401(a) would amend section 101 of title 23 by adding a declaration that it is in the national interest to reduce the number of deaths related to traffic accidents and authorize a national initiative targeted at saving lives through improved engineering, education, enforcement, and emergency response.

Section 1401(b) would establish the National Blue Ribbon Commission on Highway Safety. The Commission would have 15 members, including the Secretary of Transportation or his or her delegate; the Administrators of FHWA, FRA, NHTSA, and FMCSA, or their delegates; and 10 members representing State and local government, law enforcement, the safety community, and public health, appointed by the Secretary from nominees submitted by the Senate Committee on Environment and Public Works and the Senate Committee on Commerce, Science, and Transportation, and by the House Committee on Transportation and Infrastructure.

The purpose of the Commission would be to identify a realistic national goal for reduction of highway fatalities, develop a consensus within the highway safety community and the public in support of the goal, recommend a comprehensive plan with specific strategies for achieving the goal, and provide such legislative recommendations as the President judges necessary and expedient. Seven million dollars in funding, allocated over fiscal years 2004-2009, would be authorized for the Commission and study.

SEC. 1402. HIGHWAY SAFETY IMPROVEMENT PROGRAM. [Legislation]

This provision would authorize a new "core" Federal-aid funding program for highway safety, under new section 150 of title 23, replacing previous title 23 provisions that required that States "set aside" a minimum of 10% of their Surface Transportation Program (STP) funding for safety purposes. The creation of a new safety "core" program greatly reinforces the importance of safety as an integral part of the Federal-aid highway program. It also reflects the importance of highway safety to our social and economic health and future productivity. The National Highway Traffic Safety Administration (NHTSA) estimates that highway fatalities and injuries cost society more than $230 billion every year.

Elevating safety to the status of a "core" funding program within the Federal-aid highway program also recognizes that, as a Nation, we should not accept the fact that 42,000 of our citizens are killed and over 3 million are injured annually on the highway system. The Highway Safety Improvement Program is designed to reduce these fatalities, reinforce FHWA's safety partnerships, and complement NHTSA's and the Federal Motor Carrier Safety Administration's (FMCSA) safety programs.

Section 150(a) would direct the Secretary to establish and implement a highway safety improvement program. In order to receive funds, under section 150(b)(1) States must have a process in place that analyzes highway safety problems and opportunities and produces a program of projects for funding based on this analysis (the State's Highway Safety Improvement Program (HSIP)). The statewide program would identify hazardous locations, sections, and elements, including roadside obstacles and unmarked or poorly marked roads that may constitute a danger to motorists, bicyclists, pedestrians, and other highway users. States would also have crash data systems and the ability to perform safety problem identification and countermeasure analysis. This provision would require the Secretary to formulate programmatic guidelines for the States' use, which should include, at a minimum, the following components:

(1) Strategic and Performance-based Goals for the HSIP. State programs would adopt strategic and performance-based goals that address safety problems and opportunities on all public roads within the State, including Tribal roadways, focus resources on areas of greatest need, and complement programs developed under section 402 of title 23.

(2) Data Improvement. States would advance their capabilities in traffic records data collection, analysis, and integration with other sources of safety data, such as roadway inventories. The data program would include all public roads, including Tribal roads, and improve the identification of highway locations, sections, and elements that may constitute a danger to motorists, pedestrians, and bicyclists. Expenditures on State data programs would be complementary to the data improvement programs supported by sections 412 and 402.

(3) Program of Improvements. The proposed program would provide States with the flexibility to address potential as well as existing highway safety problems. States would determine the priorities for correcting hazardous roadway locations, sections, and elements, including railway-highway crossing improvements, based on crash data analysis. Priorities would also include opportunities for preventing the development of hazards. Based on these priorities, States would schedule and implement projects for hazard correction and prevention.

(4) Evaluation. States would be required to establish an evaluation process to assess the results of safety improvement projects carried out under this section and use the results to set priorities for future projects.

Under this provision, States could obligate HSIP funds for safety infrastructure improvement projects that correct or improve hazardous roadway locations or features, including railway-highway crossing improvements, or proactively address highway safety problems on any public road or publicly owned bicycle or pedestrian pathway or trail. The proposed Federal share for projects carried out under this section would be 90%.

Under this provision, beginning in fiscal year 2005 and for each fiscal year thereafter, 10 percent of the funds available to a State to carry out the highway safety improvement program established in accordance with this section would be required to be obligated for projects under section 402, unless by October 1 of the fiscal year in which funds become available to a State, the State has enacted a primary safety belt law or the State demonstrates that the safety belt use rate in that State meets or exceeds 90 percent. Activities carried out under this section would be required to be consistent with a strategic highway safety plan described in proposed new section 151 of title 23. If a State has not already adopted such a plan, it would be required to do so if subject to the proposed safety belt incentive provision.

An additional new section would be added to title 23: Section 151-Flexibility for safety initiatives. This proposal would provide additional flexibility to States to use section 150 funds for public awareness, education, and enforcement activities, not otherwise eligible under section 150, where such activities and projects are consistent with a strategic State highway safety plan and comprehensive safety planning process. This provision is included as an incentive for States to develop and implement comprehensive, data-driven, performance-based, strategic highway safety plans that address the engineering, education, enforcement, and emergency services elements of highway safety.

The proposed new section specifies that a State strategic highway safety plan must be based on a collaborative process that includes major State, local, and Tribal safety stakeholders (including the Governor's Representative for Highway Safety, State DOT safety and planning offices, persons responsible for administering section 130 at the State level, State traffic records coordinating committee, local transportation agencies, State emergency medical services program, State motor carrier safety program, State and local law enforcement, and Operation Lifesaver); and is certified by the Secretary, through FHWA and NHTSA, as based on a comprehensive, collaborative process and effective analyses of State crash data. In developing a plan, a State should consider the results of existing State transportation and highway safety planning processes. Activities must be consistent with the State strategic highway safety plan to qualify for the flexible use of funds available under sections 150 and 402(k).

This provision would clarify that the development of a State strategic highway safety plan would not require changes in the planning processes, plans, or programs of other State transportation or highway safety agencies. To qualify for the additional funding flexibility, State agencies are only required to participate in a collaborative process to share information and assist in the analysis of safety data to produce a strategic highway safety plan.

The provision specifies that funding transfers between section 150 (the new FHWA core Highway Safety Improvement Program) and section 402 could not exceed 50 percent of the funds authorized for section 150 or for section 402(k) (Performance Grants, including the safety belt use law incentive grants program).

The provision makes conforming amendments to title 23 to reflect repeal of the section 152 hazard elimination program and elimination of the section 133(d)(1) set-aside of apportioned funds for safety.

SEC. 1403. OPERATION LIFESAVER. [Legislation]

This section would amend section 104 of title 23 to increase the set-aside from STP funds for Operation Lifesaver from $500,000 to $600,000 for each fiscal year.

SEC. 1404. HIGHWAY SAFETY PROGRAMS; CERTIFICATION OF PUBLIC ROAD MILEAGE. [Legislation]

Section 1404 would eliminate the requirement that only the Governor can certify a State's public road mileage, which is one of the factors used to determine the funding each State receives for its highway safety program. This change would provide increased flexibility to the State, by allowing a State department of transportation to certify the public road mileage.

SUBTITLE E - PROGRAM EFFICIENCIES AND IMPROVEMENTS -- PLANNING

SEC. 1501. METROPOLITAN PLANNING. [Legislation]

The highway and transit metropolitan planning provisions would be combined and relocated to chapter 52 of title 49, U.S.C. See title VI of this bill for the substantive provisions.

SEC. 1502. STATEWIDE PLANNING. [Legislation]

The bill would amend the statewide planning provisions currently located at section 135 of title 23, U.S.C., and provide a common statewide planning section for both the Federal Highway Administration and the Federal Transit Administration in chapter 52 of title 49, U.S.C. See title VI of this bill for the substantive provisions.

SEC. 1503. STATE PLANNING AND RESEARCH. [Legislation]

This section would move State planning and research (SPR) from section 505 (in Chapter 5) of title 23 to section 104 in Chapter 1. Chapter 5 addresses research, development, and technology (RD&T) funds available to the Secretary, whereas the SPR program is part of the States' apportioned funds and more appropriately belongs in Chapter 1.

As amended, this section increases the SPR set-aside by 1/2 percent to 2-1/2 percent to fund improved data collection by the States and indicates that SPR funds are also set aside from the minimum guarantee program under section 105.

This section clarifies that freight planning, safety planning, transportation systems management and operations-related planning activities, transportation-related land use planning, and transportation-related growth management activities within the metropolitan and statewide planning processes are eligible for SPR funds. In addition, planning capacity building activities and asset management activities are eligible for SPR funds. Transportation systems management and operations related planning activities include support for regional operations collaboration and coordination activities, as defined in proposed section 165 of title 23 (see section 1701) that are associated with regional improvements such as traffic incident management, technology deployment, emergency management and response, traveler information, and regional congestion relief. This section also adds the term "local" to "public transportation" for consistency throughout the section and makes other changes in wording for clarity.

This section changes the mandatory percent of SPR funds for RD&T activities from 25 to 20, but does not change the amount of funds for RD&T because of the 1/2 percent increase in total funds. This section establishes a new "mandatory" use of SPR funds for improved data collection to provide information needed by the various levels of government for fact-based decisionmaking, but allows the use of such funds for other activities eligible for SPR funds if a State's data collection activities meet quality assurance guidelines.

Elsewhere in this proposal are individual proposals for State action, such as participation in the highway safety improvement program. In addition to other funds, SPR funds are available for these undertakings.

SEC. 1504. CRITICAL REAL PROPERTY ACQUISITION. [Legislation]

This section provides that, in certain limited circumstances, title 23 funds may participate in a State's costs incurred in acquiring parcels of real property, considered to be critical for any project proposed for funding under title 23, prior to the completion of environmental reviews for property acquisition. The Secretary's approval would be required for the acquisition of each parcel before Federal funds could participate in its cost and the number of critical acquisitions on any given project would be limited, so as not to significantly affect alternatives. Prior to acquisition approval, the Secretary must determine that the property is offered for sale on the open market and that acquisition is critical because the property value is increasing significantly, there is imminent threat of development of the property, or the property is necessary for implementation of the project's stated goals.

The acquisition of a critical parcel would also be considered an exempt project for purposes of the transportation conformity regulations.

This section would enable States to use Federal funds to acquire expeditiously a limited number of parcels that are potentially needed for future transportation purposes, and are threatened by future economic development. "Critical parcels" are typically those with a high probability of use for transportation purposes. The early acquisition of such parcels would maintain viable transportation options.

Environmental reviews and approvals would be required before physical construction, demolition, or clearing could occur. States could not retain the Federal-aid share of the proceeds if a parcel was sold or leased. This section would give States the opportunity to reserve future alignment alternatives while allowing timely and cost-saving acquisitions.

SEC. 1505. PLANNING CAPACITY BUILDING INITIATIVE. [Legislation]

This section establishes a planning capacity building initiative to strengthen metropolitan and statewide transportation planning under Chapter 52 of title 49, and to enhance Tribal capacity to conduct joint transportation planning under Chapter 2 of title 23. Priority would be given to planning practices and processes that support homeland security planning, performance based planning, safety planning, operations planning, freight planning, and integration of environment and planning. The initiative would be administered by the Federal Highway Administration in cooperation with the Federal Transit Administration and funded from the Surface Transportation Program at $20 million per year.

SUBTITLE F - PROGRAM EFFICIENCIES AND IMPROVEMENTS -- ENVIRONMENT

SEC. 1601. CONGESTION MITIGATION AND AIR QUALITY IMPROVEMENT PROGRAM (CMAQ). [Legislation]

Section 149 of title 23 would be amended to more clearly specify that "maintenance of a national air quality standard" means that, for purposes of this section, any CMAQ-funded project must contribute to air quality maintenance by reducing emissions through new or enhanced transportation facilities or services, rather than merely maintaining existing transportation facilities or services.

Subsection (b) is clarified to specify that funded projects or programs in nonattainment and maintenance areas must provide emission reductions that contribute to the attainment or maintenance of the National Ambient Air Quality Standard (NAAQS) for the given pollutant. Projects that reduce emissions of the pollutant or precursor that provides the greatest likelihood of contributing to attainment or maintenance of the associated criteria pollutant would receive priority for CMAQ funds. The metropolitan planning organization or State is encouraged to consult with the State air quality agency with respect to whether reductions in nitrogen oxide (NOx) emissions or reductions in VOC emissions provide a greater benefit in reducing ambient ozone concentrations; or whether reductions in directly emitted particulate matter or reductions of emissions of a precursor provide the greatest benefit in reducing ambient PM-10 or PM-2.5 concentrations.

Subsection (b) is also amended to remove the outdated paragraph allowing projects to reduce any type of emission instead of emissions related to their nonattainment or maintenance status and to remove the prohibition on funding voluntary programs to remove from use pre-1980 cars and light trucks.

An addition is made to subsection (b)(3) of the same section to include specific eligibility for projects or programs to reduce emissions per vehicle. This clarification would emphasize the CMAQ eligibility of technology-based projects and programs to reduce vehicle emissions, such as anti-idling equipment and heavy-duty diesel retrofits.

A technical correction is made to subsection (c) of the same section to include maintenance areas as well as nonattainment areas in the titles of the two subparagraphs.

A new subsection (f) is added to the section to encourage review of estimated emissions reductions by State and local air agencies to provide perspective on which proposals would be the best candidates with respect to reducing emissions. States, MPOs, and transit agencies, in consultation with State and local air quality agencies, are encouraged to work cooperatively to develop criteria for project selection and to make decisions over which projects and programs to fund under the CMAQ program.

A new subsection (g) is added to the section to provide for a national program of evaluation and assessment. Section 104 of title 23 is amended by adding new subsection (o), authorizing the Secretary to use 0.5 percent each year from the annual CMAQ apportionments to carry out the program. DOT, in consultation with EPA, would use these funds to conduct appropriate assessments and develop other evaluation data to provide information regarding effectiveness at reducing emissions and relieving congestion. Assessment results will be shared with State and local transportation and air quality agencies prior to release. It is intended that this national evaluation will lead to better project selection by States and metropolitan planning organizations.

The CMAQ apportionment formula in section 104(b)(2) is changed to include nonattainment and maintenance areas for fine particulate matter (PM-2.5) and for ozone under the new 8-hour standard. EPA is expected to designate these areas as nonattainment in 2004, which is expected to represent a large expansion in the number of U.S. citizens living in nonattainment areas.

The weighting factor for ozone (under both the old one-hour standard and the new eight-hour standard), carbon monoxide, and PM-2.5 maintenance areas is set at 1.0 (previously 0.8) to reduce the funding loss that one-hour ozone and carbon monoxide areas face as they redesignate from nonattainment to maintenance status. Under this new weighting factor of 1.0, maintenance areas will still get less CMAQ funding than they did as nonattainment areas in all cases except "marginal" areas under the one-hour ozone standard, which will get the same amount, holding all other variables constant.

The factor for submarginal areas has been dropped since there are no longer any submarginal areas under the one-hour ozone standard. The only one has now been redesignated as a maintenance area.

The weighting factor for the eight-hour ozone nonattainment areas is set at 1.0 to reflect that these areas will have lower design values when compared to areas designated as nonattainment under the 1-hour standard. Specifically, an eight-hour nonattainment area, or any portion thereof, which is not also a one-hour ozone area, will have a weighting factor of 1.0. Where the one-hour standard is still in effect, those weighting factors previously provided under title 23 and left unchanged would still govern.

Areas designated nonattainment under the new PM-2.5 standard are provided a weighting factor of 1.2 to reflect the relatively greater impact on mortality and health of fine PM pollution when compared with ozone and carbon monoxide.

This section would also be changed to focus CMAQ funding on those counties that are actually part of a designated nonattainment area for CO. Based on holdover language contained in ISTEA and not fully addressed by TEA-21, an additional weighting factor had previously been applied to entire ozone nonattainment or maintenance areas when only a small portion was also designated as nonattainment or maintenance for carbon monoxide. In effect, current legislative language apportions some funds for counties that have no carbon monoxide problem. This change would correct that oversight.

The provision for CO maintenance areas in subparagraph (C)(ii), which provided an additional weighting factor of 1.1, has been removed. In its place, subparagraph (C) is amended to provide an additional weighting of 1.2 for areas that are in nonattainment or maintenance status for CO and nonattainment or maintenance for ozone.

Subparagraph (D) provides an additional weighting of 1.2 for areas that are in nonattainment or maintenance status for fine PM and nonattainment or maintenance for either ozone or CO. It also provides that PM-2.5 nonattainment and maintenance areas that are nonattainment or maintenance for both ozone and CO will receive an additional weighting factor of 1.2 over and above the additional weighting factor of 1.2 provided for in subparagraph (C).

SEC.1602. EFFICIENT ENVIRONMENTAL REVIEWS FOR PROJECT DECISIONMAKING. [Legislation]

This section revises previous section 1309 of the Transportation Equity Act for the 21^st Century to make it more effective in achieving environmental streamlining on highway construction projects. This is accomplished through the following changes.

First, the changes would clarify that this section has a dual purpose of expediting project delivery and protecting the environment. In addition, the changes would encourage the use of the "Enlibra" principles as initially developed by the Western Governors Association and adopted by the National Governors Association (Policy Statement NR-1) to the extent practicable in the development of highway construction and public transit projects. Used together, these principles establish a sound basis for interaction among Federal, State, and local governments and tribes in developing policies and making decisions with respect to the environment.

Second, the changes would amend the current requirement in section 1309 regarding coordinated environmental reviews by clarifying that such reviews may apply to a particular project or may apply to an entire class of projects or to a program. It would also clarify that local agencies and Federally recognized tribes, in addition to Federal and State agencies, may participate in memoranda of understanding, where appropriate, to establish cooperatively developed time periods for review.

Third, the changes would clarify that the project sponsor has the authority for initiating the coordinated environmental review process for projects. In addition, while time periods would be established by the Secretary and the affected agencies, the establishment of time periods would occur only when requested by the project sponsor. This change gives more of a role to project sponsors in developing the time periods. In addition, since negotiating time periods can itself take a substantial amount of time, it provides project sponsors with the flexibility to ask for establishment of time periods only where they would be most effective. These changes also clarify that the Secretary may extend the time for review upon any good cause shown. This would include project delays that may not have been due to environmental reviews. The Department of Transportation will continue to track and report the amount of time that it takes to complete the environmental review process on Federally assisted highway construction and public transit projects.

Fourth, changes will be made to clarify the law regarding the preparation of environmental documents under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq. ). These changes are intended to address the uncertainty created by the Tenth Circuit's decision in Utahns for Better Transportation v. U.S. Department of Transportation, 2002 U.S. App. LEXIS 19055, which held that an environmental impact statement may not be prepared by a State for a highway project requiring Federal approval but for which no Federal funding was to be used. These changes are also intended to address the Second Circuit's decision in Sierra Club v. U.S. Army Corps of Engineers, 701 F.2d 1011 (1983), in which the Court held that the Corps of Engineers could not adopt an environmental impact statement that was prepared by a State department of transportation, even though it was independently reviewed and evaluated by the Federal Highway Administration before it was issued and approved. These proposed changes, incorporated as a new subparagraph (d), confirm the long-standing practice under regulations issued by the Council on Environmental Quality and by the Federal Highway and Federal Transit Administrations that permit State and local governments to be joint lead agencies with the U.S. Department of Transportation in preparing environmental documents. As a joint lead agency, the State or local government will be allowed to prepare the environmental document, so long as the U.S. Department of Transportation furnishes guidance and participates in such preparation, and independently evaluates the document. The document must be approved and adopted by the Secretary prior to the Secretary taking any action or making any approval based on such document. The provisions of this subparagraph apply regardless of whether the Secretary's approval or action results in Federal funding. The Secretary will ensure that the project sponsor complies with all design and mitigation commitments made in such a document, or that the document is appropriately supplemented if changes to the project become necessary. Any document prepared in accordance with this section will be considered a Federal environmental document that may be adopted by another Federal agency, subject to any conditions imposed under regulations issued by the Council of Environmental Quality or any other Federal agency.

NEPA section 102(2)(D) allows a State agency that has statewide jurisdiction to prepare an EIS for a project funded under a Federal program of grants to States. Transit agencies whose projects are financially assisted by FTA are State or local governmental authorities as defined in 49 USC 5302(a)(6), but the overwhelming majority of them are not State agencies of statewide jurisdiction, and they are not assisted by an FTA program of grants to States. The FTA grant programs that fund major projects provide funding directly to transit agencies, not to the States. Therefore, the public agencies that plan, develop, construct, maintain, and operate metropolitan transit systems do not enjoy the authorities provided by NEPA Section 102(2)(D). Most public transit agencies responsible for transit projects are technically "cooperating agencies" in the preparation of FTA environmental documents, though, of necessity, the transit agencies perform a de facto co-lead role in NEPA reviews. The proposed provision would recognize the role of State and local transit agencies in planning their own projects and would allow them to serve as joint lead agencies with FTA in NEPA reviews without the threat of litigation concerning that role. This would be consistent with the practice currently permitted under the CEQ regulations relating to the roles of lead and cooperating agencies (40 CFR Part 1500).

Fifth, the changes would clarify the dispute resolution process by giving authority to initiate dispute resolution procedures to State Governors in addition to the Secretary of Transportation or to the head of any Federal agency subject to the time period under this subsection.

Sixth, editorial changes are being made to the last sentence in the subsection on State agency participation to clarify that participation by all State agencies with jurisdiction by law is intended to be a condition of a State's participation, unless the Secretary determines that such participation is not in the public interest. With respect to quasi-independent agencies within the State, the Secretary may find that their participation is not "in the public interest" if the State does not have the authority to compel their participation. Further, to eliminate confusion regarding State participation, this section does not include the TEA-21 definition of "Federal agency" that included a State agency. Instead, a corresponding addition is being made to subsection (g)(1) to clarify that Federal assistance can be provided to State agencies (in addition to State departments of transportation) that are participating in the coordinated environmental review process. Also, to eliminate confusion, section (h)(1) is being revised to remove the reference to State courts, since there are no circumstances under which any final Federal agency action taken under this section could be reviewed by a State court.

Seventh, the changes would clarify that the Department of Transportation and Federally recognized tribes are included in the category of affected Federal agencies that may receive funds to help expedite reviews, and that funds available for the Federal Lands Highway Program may also be used for this purpose. Changes would also clarify that funds would be available for programmatic measures that might expedite the environmental review of classes of projects or programs.

Eighth, the changes would establish a new statute of limitations of one hundred eighty days for legal challenges to Federal agency decisions made in connection with the issuance of permits, licenses, or approvals for highway construction or public transit projects. Under current law, there is no uniform statute of limitations that applies to all decisions of Federal agencies made in connection with highway construction or public transit projects. By default, in circumstances where there is no specific applicable statute of limitations, courts usually have applied the general six-year statute of limitations that applies for challenges to actions under the Administrative Procedure Act for legal challenges relating to highway construction or public transit projects. This long window of opportunity for filing lawsuits has at times created uncertainty regarding project advancement. In addition, it has given plaintiffs the ability to file lawsuits well after a project is underway and well after they were aware of a cause of action. The new statute of limitations is intended to provide a reasonable amount of time for plaintiffs to raise legal challenges to highway construction or public transit projects while at the same time eliminating the risk of a project being delayed or enjoined by litigation after it is well underway and significant investment has been made in it. By its terms, this statute of limitations does not apply to a challenge that no permit, license, or approval has been obtained. It also does not apply to a claim that a permit, license, or approval has been violated. Nor does this statute of limitations lengthen an existing shorter time within which review must be sought pursuant to the judicial review provision in a statute under which the agency action is taken.

Finally, a number of editorial changes have been made for clarification and consistency.

SEC. 1603. ASSUMPTION OF RESPONSIBILITY FOR CATEGORICAL EXCLUSIONS. [Legislation]

Section 138 of title 23, "Preservation of parklands" would be eliminated and replaced with a new section that deals with assumption of responsibility for categorical exclusions. "Preservation of parklands," which was applicable only to actions by the Federal Highway Administration, would be removed to eliminate the redundancy of having two statutes that are essentially duplicates of each other (section 303 of title 49 has slightly differing wording but is substantively the same). Section 303, which is applicable to the entire Department of Transportation, including the Federal Highway Administration, would remain as the only "section 4(f)" reference, as amended by this bill in section 1604.

For the purposes of the National Environmental Policy Act (NEPA), a "categorical exclusion" is defined in regulations as "a category of actions which do not individually or cumulatively have a significant effect on the human environment..." 40 CFR 1508.4. Most surface transportation projects qualify as categorical exclusions (e.g., over 91% of Federal highway construction projects are classified as categorical exclusions). These kinds of projects present a low risk of harm to the environment. This section would allow some of the Department's responsibilities relating to these kinds of projects to be assumed by the State. This would streamline the environmental review process, thereby expediting project delivery, without any substantial risk to the environment.

Current regulations identify certain types of actions that may be treated as categorical exclusions if the Department determines that specific conditions or criteria are satisfied and that significant environmental effects will not result. 23 CFR 771.117(d). Subsection (a) would allow States to assume responsibility for determining whether these types of actions, or other types of actions designated by the Secretary, may be treated as categorical exclusions.

Even when an action is classified as a categorical exclusion, environmental laws other than NEPA might still apply and impose additional requirements on the Department for review, consultation, and decisionmaking. Subsection (b) would allow the Secretary to assign the Department's responsibilities (except responsibilities relating to Federally recognized tribes) under any such law to the State. Under this subsection, the State would assume full responsibility for complying with such laws and, consequently, full liability for any failure to comply. This would include defending any legal challenges arising from the assigned responsibilities and being liable for any judgment, order, or fees imposed by a court in connection with legal challenges.

Subsection (c) provides for the execution of a memorandum of understanding between the Secretary and the State that would set forth the terms and conditions of an assignment and assumption of responsibility under this section. Such a memorandum of understanding would need to be renegotiated every three years. The Secretary would monitor the State's compliance with the memorandum of understanding, as well as the effectiveness of the delegation, and, to the extent possible, would use the renegotiation process as a mechanism to ensure compliance and to correct problems. Under subsection (d), the Secretary could terminate an assignment of responsibility to a State if it is not adequately carrying out its responsibilities.

SEC. 1604. SECTION 4(f) POLICY ON LANDS, WILDLIFE AND WATERFOWL REFUGES, AND HISTORIC SITES. [Legislation]

Section 138 of title 23, "Preservation of Parklands," which was applicable only to actions by the Federal Highway Administration, would be replaced by a new section 138 that deals with the assumption of responsibility for categorical exclusions (see section 1603 of this bill). Existing section 138 would be removed to eliminate the redundancy of having two statutes setting environmental requirements that are essentially duplicates of each other (with slightly differing wording). The other provision (49 U.S.C. 303), which is applicable to the entire Department of Transportation, including the Federal Highway Administration, would remain as the only "section 4(f)" reference. Former section 4(f) was originally enacted as part of the Department of Transportation Act of 1966 and is now codified at 49 U.S.C. 303, but is still commonly referred to as "section 4(f)".

Section 303 of title 49, Policy on lands, wildlife and waterfowl refuges, and historic sites, would be amended to streamline its use and, where there is agreement, remove duplication with the process dictated by section 106 of the National Historic Preservation Act. It would retain the existing statutory language and would apply it to the same sites now covered, but would add language to clarify the factors that the Secretary must use in making determinations under it and improve the "section 4(f)" evaluation process. This would not limit the protection of "section 4(f)" resources, but it would facilitate the process by taking into consideration court decisions affecting the applicability of "section 4(f)" and codifying those factors that would more efficiently allow a prudent decision.

Section 4(f) was enacted in 1966 during the peak of the Interstate highway construction program. Many interstate highways threatened major urban parks and historic districts. Much of the case law on "section 4(f)" was decided on cases involving these major new highways. This prompted some strict interpretations of "section 4(f)," beginning with the Supreme Court's seminal decision in Overton Park v. Volpe, 401 U.S. 402 (1971). In Overton Park, the Supreme Court set a high bar for rejecting an avoidance alternative, stating in dicta that an avoidance alternative must always be selected unless there are "unique problems or unusual features associated with it, or that the cost, social, economical, or environmental impacts, or the community disruption resulting from such alternatives reach extraordinary magnitudes."

Today's highway program is oriented much more toward system preservation and modernization, in which existing facilities are the focus. The rigid rules for applying "section 4(f)" spawned from the early court decisions are often an awkward fit for the majority of situations faced today, where consequences to "section 4(f)" properties are usually not as extreme. In response, some later court decisions injected greater flexibility in interpreting "section 4(f)" and the Supreme Court's decision in Overton Park. For example, in Eagle Foundation v. Dole, 813 F.2d 798 (7^th Cir. 1987), the Court of Appeals for the Seventh Circuit sanctioned a balancing approach to determine whether an alternative was prudent and feasible, even though quoting from the Supreme Court's decision in Overton Park. In Eagle Foundation, the plaintiffs challenged the routing of a segment of highway through a wildlife reserve and a historic farm. The Seventh Circuit held that, in determining what is prudent, the Secretary's "inquiry calls for judgment, balancing, and for the practical settlements of disputes on which reasonable people will disagree," and that a "prudent judgment is one that takes into account everything important that matters." The Court noted that the Supreme Court's use of the term "unique" was merely for emphasis, and was not intended to replace "prudent." The Court further concluded that the harm caused by an alternative could be aggregated in determining whether it is prudent: "It would be prudent to build around the park if the Secretary were convinced that the aggregate injuries caused by doing so exceeded those caused by reducing the size of the park." The Court agreed with the Secretary that the aggregate costs of the alternatives-including safety concerns, endangerment of eagle roosting sites, and an additional cost of at least $8 million-were sufficient reason to find them imprudent.

The Court of Appeals for the Fourth Circuit made a similar analysis in Hickory Neighborhood Defense League v. Skinner, 910 F.2d 159 (4^th Cir. 1990), a case in which plaintiffs challenged a highway-widening project in North Carolina. Following the Seventh Circuit's reasoning in Eagle Foundation, the Fourth Circuit agreed that the Secretary must show a compelling reason for rejecting an avoidance alternative, but that an express finding of a "unique" problem was not necessary. The Fourth Circuit also agreed that it was appropriate to consider aggregate impacts in determining whether or not an alternative was prudent, and upheld the Secretary's decision that the cumulative adverse impacts of the alternatives-i.e., impeding access to two hospitals, routing through a quiet residential neighborhood, traffic operational difficulties due to sharp turns and inadequate cross-walks-made it imprudent.

However, other courts continue to strictly construe "section 4(f)," requiring an express demonstration of "unique problems" or "unusual factors" before an alternative can be found imprudent. For example, in Louisiana Environmental Society v. Coleman, 537 F.2d 79 (5^th Cir. 1976), the Fifth Circuit made clear that the use of a park did not have to be substantial for "section 4(f)" to apply: "Any park use, regardless of its degree, invokes Section 4(f)." The Court went on to suggest that a delay of ten years in the construction of the highway and displacement of up to 1500 persons would not be a sufficient reason to find an alternative imprudent. The Court of Appeals for the Eleventh Circuit followed a similar line of reasoning in Druid Hills Civic Association v. FHWA, 772 F.2d 700 (11^th Cir. 1985), emphasizing that an alternative that minimized harm to a park must be selected unless there are truly unusual reasons for rejecting it as imprudent. In Stop H-3 Association v. Brinegar, 740 F.2d 1442 (9^th Cir. 1984), the Ninth Circuit also emphasized the need for the Secretary to demonstrate "truly unusual factors" or "costs or community disruption [reaching] extraordinary magnitude" before rejecting an alternative as "imprudent." The Court found that three of the reasons upon which the Secretary rejected an avoidance alternative-a significant number of displacements, including the dislocation of 31 residences, three businesses and a church; increased noise, air quality and visual impacts to residents; and an additional cost of $42 million-were insufficient to support the Secretary's decision. The Court found the fourth reason, "safety considerations," to be more compelling, but in the end also concluded that the record was inadequate to show that the adverse safety impacts of the avoidance alternative were of such magnitude as to overcome the paramount importance given to the protection of parkland in Overton Park.

The disparity in these court decisions has made it difficult to find a workable national standard to use in reaching determinations of whether an alternative is prudent and feasible. In order to establish more national uniformity, and consistent with the changed impacts of the highway program, this provision would clarifyfactors the Secretary shall consider in making section 303 determinations.

In particular, subsection (c) would explicitly extend the definition of "prudence" to include weighing the relative values of the nature of the proposed use with the significance of the resource, the views of the official with jurisdiction, the severity of impacts, and opportunities for mitigation, taking into account any anticipated impacts on other resources. This change would be consistent with more recent court decisions such as Eagle Foundation and Hickory Neighborhood, which have adopted a "balancing" approach to determining whether an alternative is "prudent." In making these decisions, the Secretary shall consider the views of the officials with jurisdiction over the land. For Federal lands on which the Secretary of Transportation approves a transportation program or project under section 303, direction in the applicable land management plan would be considered in the Secretary's determination of prudence and during project coordination. Land management plans include, for example, Land and Resource Management Plans under the Forest and Rangeland Renewable Resources Planning Act of 1974, 16 U.S.C. 528-531, National Park Management Plans under section 1a-7(b) of title 16, U.S.C., and Bureau of Land Management land use plans under section 1712 of title 43, U.S.C.

Subsection (d) of this section sets out those cases where "section 4(f)" would not be applicable (including those previously included in subsection (c)). This section would accomplish the following goals:

• Add refuge roads to the existing categories of those transportation improvements that are exempt from consideration under section 303 as these projects are usually carried out for the benefit of the refuge;
  
  
• Exempt from consideration a highway project on land administered by an agency of the Federal Government, when the purpose of the project is to serve or enhance the values for which the land would otherwise be protected under this section, as jointly determined by the Secretary and the head of the appropriate Federal land managing agency.

Subsection (e) would use the National Historic Preservation Act consultation process as the means of complying with section 303 for a historic site (other than a National Historic Landmark) where it has resulted in an agreement on its treatment by participating parties.

The amendment would eliminate the duplication of the section 303 and section 106 processes where section 106 has arrived at a negotiated solution. To ensure appropriate safeguards for historic properties, the Secretary is directed to develop administrative procedures, in consultation with the Advisory Council on Historic Preservation, to ensure that the section 106 process as applied to transportation projects is conducted in a manner consistent with the goals and objectives of the National Historic Preservation Act (16 U.S.C. 470f). These procedures will provide for programmatic oversight of actions taken under proposed subsection (e) and, under appropriate circumstances, will provide for a process by which to reconsider the agreed-upon treatment of an historic property when a key participant has raised a concern regarding the integrity of the section 106 process with respect to such actions with the Department of Transportation.

A new subsection would be added to allow Federal-aid highway funds available under chapter 1 of title 23, U.S.C., to be used to pay for resources, including staff and administrative expenses, for State historic preservation offices, Tribal historic preservation offices, or the Advisory Council on Historic Preservation, to be used to expedite the historic review and consultation process for Federally funded highway projects.

The above amendments would provide protection for the resources to which section 303 is considered applicable, while introducing greater procedural efficiency.

SEC. 1605. NATIONAL SCENIC BYWAYS PROGRAM. [Legislation]

Subsections (a) and (b) of section 162 would be amended to recognize that the Secretary already is promoting the collection of National Scenic Byways and All-American Roads as "America's Byways." "America's Byways" was identified as the marketing umbrella for promotion based on market research completed by FHWA in consultation with State and byway representatives. The intent is to continue the two types of designations and use "America's Byways" as the marketing umbrella for the collection. If State and byway representatives reach consensus on establishing a single designation category, then these amendments would provide the Secretary with the authority to use any of the three terms - National Scenic Byways, All-American Roads, or America's Byways - as the single designation.

Subsection (c)(4) would be amended to delete "passing lane." This would make adding passing lanes to designated scenic byways no longer eligible for scenic byways funding under this subsection. Passing lanes are eligible for funding under other Federal-aid highway programs, such as the Surface Transportation Program and the National Highway System. The primary purpose of the National Scenic Byways Program is to increase travelers' awareness and appreciation of the qualities associated with a byway's designation, as well as promote preservation, economic development, and tourism.

A new subsection (d) would be added that would authorize the Secretary to form public-private partnerships to carry out research, technical assistance, marketing, and promotion with respect to State scenic byways, National Scenic Byways, All-American Roads, or America's Byways. The National Scenic Byways and All-American Roads currently are promoted collectively as America's Byways. This subsection would make the Center for National Scenic Byways in Duluth, Minnesota, eligible for funding under the National Scenic Byways program. The Center was established in 1998 to provide technical communications and network support for nationally designated scenic byway routes.

Subsection (g) (former subsection (f)) allows the Federal share to be up to 100 percent for projects or activities for research, technical assistance, marketing, and promotion associated with byways.

SEC. 1606. RECREATIONAL TRAILS PROGRAM. [Legislation]

Subsection (a) amends 23 U.S.C. 104(h), the Recreational Trails Program (RTP) apportionments, to clarify how the Department may use RTP administrative funds. It specifically allows training. It deletes reference to the National Recreational Trails Advisory Committee, which officially terminated on September 30, 2000.

Subsection (b) amends the RTP to improve program delivery. Subsection (b)(1) amends the State Recreational Trails Committee requirement to strengthen the role of the committee and to assure enhanced representation and public participation. This change is proposed because a few States have token committees. This proposal expands the RTP's concept of 30-percent minimum motorized and nonmotorized funding to the committee membership, clarifies the meaning of "once per fiscal year," and establishes a more formal role for the committees. This will improve the public involvement process for the RTP.

Subsection (b)(2) amends section 206(d)(2) of title 23 concerning the permissible uses of funds apportioned to States for the RTP. Eligible categories are added to permit trail assessment for accessibility and maintenance, and to hire trail crews or youth conservation or service corps to perform recreational trails activities. These amendments clarify existing practice in several States, and promote enhanced accessibility for all trail users, especially for people who have disabilities. Also added are activities eligible for RTP educational funds: non-law enforcement trail safety and trail use monitoring patrols, and trail related training. A Bureau of Land Management survey found there is an expanding need for trail training among Federal, State, local, and private trail managers, workers, and volunteers. Expanding training will help improve trail safety and environmental protection. However, the RTP is not intended to support routine law enforcement.

Subsection (b)(3) eliminates the authority of a State recreational trail advisory committee to waive the requirement that 30 percent of a State's apportionment for a fiscal year be used for uses relating to motorized recreation and another 30 percent be used for uses relating to nonmotorized recreation. Because this provision applies to apportionments, not obligations, States retain the flexibility to carry over funds for projects in future fiscal years. This subsection is replaced by a provision to strengthen the RTP's connection with youth conservation and service corps, as first proposed in section 1112(e) of TEA-21. This subsection would direct the States to spend not less than 10 percent of their RTP funds for grants, cooperative agreements, or contracts with qualified youth conservation or service corps to perform recreational trails program activities. The qualifications for youth conservation and service corps are found in 42 U.S.C. 12572 and 12656. This subsection does not conflict with the 30-30-40 shares for motorized, nonmotorized, and diverse trail use; it is intended to be met simultaneously with the 30-30-40 requirements. This provision would benefit low income, minority, and at-risk youth by providing enhanced employment opportunities through youth corps programs.

Subsection (b)(5) simplifies the determination of Federal share for RTP projects by changing the RTP's normal Federal share from a strict 80 percent to the sliding scale share used in the Federal-aid highway program. This will especially benefit States with large amounts of Federal lands. The RTP will continue to allow Federal agency project sponsors to provide additional Federal funds, and will continue to allow funds from other Federal programs to be used as matching funds. The RTP's current legislation allows any other Federal funds to be used to match RTP funds. However, the reverse is not true: the RTP does not have specific authority to allow RTP funds to be used to match other Federal program funds, such as allowing RTP funds to match transportation enhancement or scenic byways funds. Subsections (b)(7)(D) through (F) make conforming amendments, and insert language to allow RTP funds to be used to match other Federal funds, based on existing language from section 206(f)(3) of title 23.

Subsection (b)(6) allows pre-approval planning and environmental compliance costs to be credited toward the non-Federal share for RTP projects, limited to costs incurred less than 18 months prior to project approval. Many States require RTP sponsors to complete their environmental compliance documentation prior to applying for RTP funds. Many RTP sponsors have found these costs to be very high compared to the amount of funds received under the RTP, sometimes more than half the total cost. Because RTP sponsors must complete compliance documentation prior to project approval, they are not eligible costs. This amendment will provide some relief to project sponsors and allow pre-approval costs to be counted toward the non-Federal share. In some cases, this may satisfy the entire non-Federal share. The costs are limited to costs incurred within the previous 18 months to assure that the planning and environmental documentation work is in fact related to the current project, and to assure that the documentation is up-to-date.

Subsection (b)(7) relieves the RTP of several requirements, which, while appropriate for large highway projects, are excessively burdensome for small trail projects. State trail administrators requested an exemption, and the Department agrees they are excessively burdensome for this program. At present, the RTP is exempted from "section 4(f)" requirements (codified at 23 U.S.C. 138 and 49 U.S.C. 303), because RTP projects are intended to enhance recreational opportunities, and should be expected to take place on park and recreation land.

The RTP is administered by a State resource agency in almost all States. The total RTP funding in each State averages only $1 million per year, which is smaller than many individual highway projects. Most States select RTP projects from among competitive proposals on an annual basis. Most States are funding 10 to 20 RTP projects per year. Therefore, RTP projects are much smaller than highway projects, and should not be treated as if they were highway projects. They also have a much shorter timeframe than highway projects from project concept to implementation. Subsection (b)(9) proposes exemptions for:

• Sections 112, 113, and 114 of title 23 deal with highway contracting requirements and requirements for Federal-aid highways, which create a conflict for many State RTP programs. Many RTP projects are awarded based on project merit to particular trail organizations or to local governments, where the work force is intended to be local government workers and even volunteers. The highway contracting requirements are unworkable for most RTP projects.
  
  
• Section 116 is intended to ensure maintenance of the Federal-aid highway system by State DOTs, and should not apply to recreational trails administered through State resource agencies.
  
  
• Sections 134 and 135 of title 23 deal with metropolitan and statewide transportation planning requirements. No State has found any significant value added by including RTP projects in statewide or metropolitan transportation improvement programs (STIPs or TIPs). Instead, there is an excessive burden on the State resource agencies, the State DOTs, and the MPOs by requiring small value RTP projects to be included in much larger scale transportation plans and TIPs. RTP projects usually are selected by State resource agencies on an annual basis, requiring MPOs and States to amend their TIPs.
  
  
• Section 217 of title 23 is specific to nonmotorized bicycle transportation and pedestrian walkways. Section 217 has some requirements and restrictions, which are incompatible with the RTP. The RTP is intended to benefit both motorized and nonmotorized recreational trail users; section 217 has transportation purpose and motorized restriction sections.
  
  
• Section 301 of title 23 deals with highway tolls. RTP projects are not highway projects. Many States and localities depend on trail user fees to maintain trails. RTP funds may be used for trails on private property where user fees are needed for ongoing maintenance and operation.

SEC. 1607. EXEMPTION OF THE INTERSTATE SYSTEM. [Legislation]

This section would establish an exemption from consideration under both the section 303 and section 106 processes for the Interstate Highway System as an historic resource. If it were designated as an historic property, it is conceivable that every action taken to maintain, improve, or upgrade the Interstate System could be considered an undertaking subject to review under section 303 and section 106 of the National Historic Preservation Act. As such, compliance with these statutes could unnecessarily burden the States and Divisions as they work to implement sorely needed improvements. Actions that could affect properties other than the Interstate System would still need to comply with the respective processes as usual.

SEC. 1608. MODIFICATIONS TO NHS/STP FOR INVASIVE SPECIES, WETLANDS, BROWNFIELDS, AND ENVIRONMENTAL RESTORATION. [Legislation]

Proposed Changes to section 103(b)(6) of title 23, U.S.C., Eligible Projects for the National Highway System

Two modifications of the existing statutory language are proposed. First, this provision would make two technical corrections to the existing language so that the eligibility provision refers to the latest Water Resources Act amendments enacted by Congress. Second, the proposal would insert new language to clarify the responsibility of the State in using this eligibility provision for mitigation banks. The proposal would revise the language in the eligibility provisions to indicate that the State department of transportation (and FHWA through approval processes) has sole discretion regarding the practicability of banking to establish the eligibility of a project's wetland or natural habitat mitigation costs for Federal-aid funding.

This provision would also establish eligibility for pollution abatement and environmental restoration projects under the National Highway System (NHS). Current authority under TEA-21 provides this eligibility only to projects under the Surface Transportation Program (STP), and this would establish an identical provision as in the STP for eligible projects. The measures must mitigate impacts caused by a project funded under title 23, but they need not be proposed as part of another project. If the measures are part of a project to reconstruct, rehabilitate, resurface, or restore an NHS facility, then the pollution abatement and environmental restoration work must not exceed 20% of the total project cost.

This provision would establish NHS eligibility of Federal-aid funds for invasive species control efforts related to projects funded under title 23. Participation in statewide inventories is an included eligible item. Contributions to measures to control exotic and invasive plant species, which are increasing in the United States, may precede project construction if such measures are consistent with Federal law and State transportation planning processes.

This provision would establish NHS eligibility of Federal-aid funds for remediation activities associated with the construction of a project funded under this title on a brownfields site.

Proposed Changes to section 133 of title 23, U.S.C., Surface Transportation Program

Two modifications of the existing language are proposed. First, this provision would make two technical corrections to the existing language so that the eligibility provision refers to the latest Water Resources Act amendments enacted by Congress. Second, the proposal would insert new language to clarify the responsibility of the State in using this eligibility provision for mitigation banks.

The proposal would revise the language in the eligibility provisions to indicate that the State DOT (and FHWA through approval processes) has sole discretion regarding the practicability of banking to establish the eligibility of a project's wetland or natural habitat mitigation costs for Federal-aid funding.

This provision would also modify existing eligibility for pollution abatement and environmental restoration projects under the STP. It would extend eligibility to any STP project, beyond the current eligibility for only projects undergoing reconstruction, rehabilitation, resurfacing, or restoration (4R projects). The measures must mitigate impacts caused by a project funded under title 23, but they need not be proposed as part of another project. If the measures are proposed as part of a project to reconstruct, rehabilitate, resurface, or restore an STP facility, then the current limitation of pollution abatement and environmental restoration work not exceeding 20% of the total project cost would remain in place.

This provision would establish STP eligibility of Federal-aid funds for invasive species control efforts related to projects funded under title 23. Participation in statewide inventories is an included eligible item. Contributions to measures to control exotic and invasive plant species, which are increasing in the United States, may precede project construction if such measures are consistent with Federal law and State transportation planning processes.

This provision would establish NHS eligibility of Federal-aid funds for remediation activities associated with the construction of a project funded under this title on a brownfields site.

SEC. 1609. STANDARDS. [Legislation]

This section would amend 23 U.S.C. 109, Standards. The changes to section 109 are made to provide greater emphasis on and clarity to the need to consider the preservation of human and natural resources as a part of the decisionmaking process in developing highway projects. The impacts of highway projects have been effectively addressed a part of the design process for many years. However, the transportation community, the traveling public, and communities have been demanding improvements in project delivery and in the make-up of the product that is delivered. Compatibility with the surrounding context, or environment, and improved safety for the motorist and the pedestrian are critical. The changes to this section address the need to see that highway projects meet all of these goals by having a project sponsor consider community preservation and community concerns. Projects that have considered these context-focused elements have had a much greater success rate at moving projects to completion, thereby streamlining the delivery process.

Subsection (a) of section 109 would be amended to add a third item specifying that the Secretary shall ensure that the plans and specifications for proposed highway projects have considered preservation, historic, scenic, natural environment, and community values. States can use existing processes for demonstrating that they have considered the subject factors.

Subsection (p) of section 109 currently allows the Secretary to approve a project that might not meet all the requirements of subsections (b) and (c) related to geometric and construction standards, so long as the project meets certain specified objectives relating to scenic and historic values. This subsection has been revised to affirmatively encourage the incorporation of these objectives into the design of all Federally funded projects. Further, these objectives would be broadened by adding additional objectives consistent with the philosophy of Context Sensitive Design and subsection (p) would be renamed Context Sensitive Design. Specifically, the term "community" would be added to the list of values in subsection (p)(1). This will help make the subsection consistent with the modifications to other portions of section 109. In addition, a new item would be inserted as a subsection (p)(1)(C) to add consideration of locality context. It is added to reflect further the consideration of context and is consistent with language on locality in subsection (a).

SEC. 1610. USE OF HIGH-OCCUPANCY VEHICLE (HOV) LANES. [Legislation]

This section would amend section 102(a) of title 23, U.S.C., to clarify existing law and provide more flexibility to State and local agencies for effective management of HOV facilities. The proposed addition of "other responsible local agencies" in subsection (a)(1) is an editorial change to clarify that the provisions pertain to State departments of transportation and other local agencies that may be responsible for the implementation, management, operation, and maintenance of HOV lanes. This change is consistent with how State departments of transportation and local agencies are referred to in the FHWA Program Guidance on HOV lanes issued on March 28, 2001.

The proposed removal of motorcycles and bicycles in subsection (a)(1) would clarify the current language and improve safety. Section 163 of the Surface Transportation Assistance Act of 1982 does not contain any reference to bicycles and pertains entirely to motorcycles. The presence of bicycles on all freeway and most surface street HOV facilities would create potential operational and safety hazards. Subsection (a)(2)(C) proposes to provide agencies the option of allowing bicycles on surface street HOV facilities when there is insufficient space within the roadway or public right-of-way to establish and designate a bicycle-only lane.

Subsection (a)(2) would be added to clearly identify the types of vehicles that are exempt from meeting the minimum occupancy requirements for HOV facilities. This provision would also identify the possible options that responsible agencies may select from and use as operational strategies to maximize the use of existing and planned future HOV facilities and highway capacity, mitigate congestion, and reduce fuel consumption. Subsection (a)(2)(A) would provide that motorcycles shall not be considered single-occupant vehicles and shall be allowed to use HOV facilities, consistent with the provisions of section 163 of the Surface Transportation Assistance Act of 1982.

Existing subsection (a)(2), which allows States to permit a vehicle with fewer than two occupants to operate on HOV lanes if the vehicle is certified as an inherently low-emission vehicle (ILEV), would be deleted. Under the current statute, ILEVs are the only types of low-emission and energy-efficient vehicles that States may permit to use HOV facilities if they do not meet the required minimum occupancy requirement. EPA no longer supports programs that focus on providing incentives to individuals that purchase and use ILEVs, and in any event, this provision will expire on September 30, 2003. However, proposed subsection (a)(2)(B) discussed below would still provide responsible agencies the option of allowing low-emission and fuel-efficient vehicles (which would include ILEVs) to use HOV facilities, under the conditions specified in section (a)(2)(B)(i).

Subsection (a)(2)(B) would be added to provide responsible agencies with the option of allowing low-emission and fuel-efficient vehicles to use HOV facilities even if they do not meet the minimum occupancy requirements. This paragraph also identifies the types of vehicles that State transportation departments may elect to allow on HOV facilities along with the associated provisions that must be followed to ensure that these vehicles do not seriously degrade the operation of an HOV facility or system.

Subsection (a)(2)(B)(i) would define a "low-emission and energy-efficient" vehicle as one that can both meet EPA's Tier II standards for light-duty vehicles and that has an EPA fuel efficiency rating of 45 miles per gallon or higher on the highway.

Subsection (a)(2)(B)(ii) would require the responsible agencies that allow low-emission and energy-efficient vehicles to use HOV facilities to create a program that defines how such qualifying vehicles are selected and certified. The creation of such a program is critical to ensuring that there are requirements for properly labeling these vehicles and that there are procedures for enforcing these requirements. It is important to continuously monitor, evaluate, and report on the performance of these facilities and establish procedures to limit or restrict the use of such vehicles, if necessary, to ensure that the performance of individual facilities or the entire HOV system does not become seriously degraded.

Subsection (a)(2)(D) would be added to provide responsible agencies with the option of charging vehicles a toll for each use of an HOV facility if these vehicles do not meet the minimum occupancy requirements, and if the requirements of section 129 of title 23, U.S.C. are met. This ensures consistency with the provisions that have been proposed for allowing tolling to manage congestion and improve air quality in section 129 of title 23, U.S.C. This subsection also identifies the associated provisions that must be followed with establishing a program that addresses how vehicles can enroll and participate, and the other required provisions that must be satisfied. The creation of such a program is critical to ensure that the vehicles are properly tolled; fees collected; violations enforced; demand is managed in an efficient and safe manner; operation of these facilities continuously monitored, evaluated, and reported; and procedures established that limit or restrict the use of such vehicles as necessary, to ensure that the performance of individual facilities or the entire system does not become seriously degraded.

Subsection (a)(2)(E) would be added to allow designated public transportation vehicles that are deadheading or not currently in service to use HOV facilities if they do not meet the established occupancy requirement. Designated public transportation vehicles are defined as those providing designated public transportation, as defined under section 12141 of title 42, and that are owned or operated by a public entity or that are operating under contract to a public entity. This definition would prohibit privately owned vehicles, public school transportation vehicles, nonprofit organizations, taxicabs, or other similar types of services from using HOV facilities without the requisite number of passengers. This provision would also establish the conditions that must be met to use HOV facilities when the designated public transportation vehicle does not meet the occupancy requirements. These conditionsinclude requiring and enforcing the labeling of vehicles, continuously monitoring, evaluating, and reporting on performance, and establishing the policies and procedures that would limit or restrict the use of such vehicles as necessary, to ensure that the performance of individual HOV facilities or the entire system does not become seriously degraded.

Subsection (a)(3) would be added to identify the requirements a responsible agency must follow when it permits any of the exceptions specified in subsection (a)(2). Subsection (a)(3)(A) would requires the responsible agency to establish, manage, and support a performance monitoring, evaluation, and reporting program if it permits any of the exceptions specified subsection (a)(2). The program would be required to continuously monitor, assess, and report on the impacts that any of these excepted vehicles may have on the operation of individual HOV facilities and the entire HOV system. The FHWA Program Guidance on HOV lanes would be revised to provide guidance on how the responsible local agencies should work with the FHWA Division Offices to monitor, evaluate, report, and make changes based on the performance of specific HOV facilities and the entire HOV system.

Subsection (a)(3)(B) would require responsible agencies to limit or discontinue permitting any of the exceptions specified in subsection (a)(2), if the presence of any of these excepted vehicles seriously degrades the operation of individual HOV facilities or the entire HOV system. For purposes of this section, "seriously degraded" would mean that an HOV facility located on a freeway, or similar type of roadway, fails to maintain a minimum average operating speed of at least 45 miles per hour 90 percent of the time over a consecutive six-month period during weekday peak travel periods. For HOV facilities on other types of roadways, the minimum average operating speed, performance threshold, and associated time periods would be established based on the conditions unique to each roadway and agreed to by the responsible agencies.

The proposed restriction in subsection (a)(3)(B) is necessary to ensure that, if any of the excepted vehicles becomes a sufficiently popular consumer choice to fill the available HOV facility capacity, the responsible agency would be required to discontinue such exceptions to preserve the travel time savings and travel time reliability that HOV facilities must deliver to be viable, continue to encourage ridesharing, and support the efficient operation of transit vehicles.

The FHWA Program Guidance on HOV lanes will be revised to provide guidance and additional information on the how the responsible local agencies will be required to work with the FHWA Division Offices to monitor, evaluate, report, and make changes based on the actual performance of both specific HOV facilities and the entire HOV system. The Program Guidance will also be revised to define freeway as a facility that provides full access control, provides for high levels of safety, and efficiently moves large volumes of traffic at high speeds.

SEC. 1611. BICYCLE TRANSPORTATION AND PEDESTRIAN WALKWAYS. [Legislation]

Subsection (a) of this section would make minor amendments in 23 U.S.C. 217.

• The amendment to subsection (a) of section 217 would explicitly allow STP and CMAQ funds to be used for nonconstruction pedestrian safety programs. Current law only mentions bicycle safety.
  
  
• The amendment to subsection (e) would explicitly mention pedestrian use on bridges. Current law only mentions bicycle use.
  
  
• The amendment to subsection (f) would clean up existing language and remove the term "highway project" from this section. This language has been a problem because a highway project is not defined in the law, and defining it would not accomplish the intent of this clause, which is to make bicycle and pedestrian projects subject to the same Federal/non-Federal matching shares as other projects.
  
  
• The new subsection (k) would explicitly allow an ongoing practice of charging user fees for shared-use paths. The user fees would have to be used for the maintenance and operation of shared use paths within the State. This new subsection would restrict the fee to shared-use paths not within a highway right-of-way, and would not extend to sidewalks or bicycle lanes.

New subsection (l) would reauthorize the national bicycle and pedestrian clearinghouse first authorized in section 1212(i) of TEA-21, and provide funding and contract authority for fiscal years 2004 through 2009.

Subsection (b) of this section would provide that the bicycle and pedestrian safety grants are to be funded by a set-aside from the Surface Transportation Program.

SEC. 1612. TRANSPORTATION, ENERGY, AND ENVIRONMENT. [Legislation]

This section creates an energy and climate change program at DOT to study the relationships between transportation, energy, and climate change, and provides dedicated funding for these activities. While limited research on these topics is currently being undertaken within some operating administrations, there are inadequate resources to implement a thorough program in this area. This proposal would provide funding of $19 million over a six-year authorization period. Further, because energy and climate change issues relate to multiple modes of transportation, the proposed legislation provides a mechanism for coordinated research across operating administrations.

The activities conducted under this program would enable DOT to participate constructively in national efforts to ensure energy security and reduce greenhouse gas emissions. Specific program activities would be selected by an internal steering committee with representatives from DOT operating administrations to ensure a comprehensive, multi-modal focus and avoid fractionalization. Research would be conducted on transportation strategies to improve energy efficiency and reduce greenhouse gas emissions from transportation sources. Research would also be conducted to assess the impacts of climate change on transportation infrastructure, safety, and operations, and on strategies to avoid or mitigate these risks through appropriate transportation planning, investment, and management. Subsection (d) allows DOT research to be conducted in collaboration with that of other Federal agencies and other research programs to encourage effective coordination with related research activities on energy and climate change.

SEC. 1613. IDLING REDUCTION FACILITIES IN INTERSTATE RIGHTS-OF-WAY. [Legislation]

This section would create an exception to the prohibition on the placement of commercial establishments in rest and recreation areas, and in safety rest areas, constructed or located on rights-of-way of the Interstate System. The purpose of this exception would be to allow States (either directly or through contracts) to place electrification or other idling reductions facilities in rest areas that could be used to provide heating, air conditioning, electricity, and communication to motor vehicles used for commercial purposes. Through these facilities, operators of such motor vehicles would be able to receive these services without turning on their engines, thereby reducing vehicle emissions. States, other public agencies, and private entities that are already allowed to operate on the Interstate System, would be allowed to charge for the services provided under this authority.

SEC. 1614. APPROPRIATION FOR TRANSPORTATION PURPOSES OF LANDS OR INTEREST IN LANDS OWNED BY THE UNITED STATES. [Legislation]

This proposed change would amend and clarify the process by which the Federal Highway Administration (FHWA) acquires right-of-way over Federal lands on behalf of State transportation departments, under 23 U.S.C. 317.

Proposed section 317(a) updates several aspects of the current law. First, it clarifies that all adverse environmental impacts to the Federal land must be mitigated. Second, it clarifies that the authority may be used to acquire Federal land for any project eligible for Federal-aid funding. Third, it clarifies that if the land is ever not needed for transportation purposes, the land will revert at the discretion of the prior owning agency, in which case the land must be restored to its former condition. These clarifications are consistent with current FHWA transportation policies. This section would retain the authority of the Secretary of the Federal agency supervising lands proposed to be appropriated, to certify that the appropriation is contrary to the purpose for which the lands or materials were reserved.

Proposed section 317(b) adds a new provision clarifying that lands cannot be forever barred from use for projects eligible under title 23 just because other Federal funds were spent on their acquisition at some time in the past. If the land is needed for transportation purposes, and appropriate mitigation and environmental coordination has taken place, the acquisition and use of right-of-way needed for the project would be allowed under this provision.

SEC. 1615. TOLL PROGRAMS. [Legislation]

This section establishes and modifies two toll programs. First, this section amends the Interstate System Rehabilitation and Reconstruction Pilot Program established under section 1216(b) of TEA-21. These minor modifications are intended to ease the eligibility criteria for participation in the pilot program. The strict financial analysis requirement, that the State must show that collecting tolls is the only way to improve the facility, is replaced by a requirement that the State must show that financing the improvements to the facility through tolls is the most efficient, economical, or expeditious way to advance the project. Most of the original provisions have been retained, including the number of pilots permitted, the limitation on the use of toll revenues, and the restriction on the use of Interstate Maintenance funds while the facility is being tolled.

Second, this section proposes a variable toll pricing program. The purpose of this program is to enable the use of variable toll pricing on congested facilities in order to increase mobility and improve air quality. Congestion continues to be a major concern on our nation's transportation system. Congestion not only makes our highways inconvenient and less safe, but it also increases transportation costs for American businesses, and adversely affects air quality. Under this proposal, the Secretary may permit a State or public authority to toll any highway, bridge, or tunnel, including facilities on the Interstate System, to manage existing high levels of congestion or reduce emissions in a nonattainment area or maintenance area. For each facility for which a variable toll pricing program is established, the State or public authority with jurisdiction over the facility, would enter into an agreement with the Secretary providing for certain conditions, such as variable tolling by time of day, high occupancy vehicle (HOV) requirements, and certain toll-revenue use restrictions. Upon the decision of the State or public authority to discontinue a variable toll pricing program, the tolls would be removed unless the facility qualifies for tolling under other applicable authority, such as 23 U.S.C. 129. However, if the facility has any outstanding debt attributable to the implementation of a variable toll pricing program, then the State or public authority may continue to toll the facility under the terms of its agreement until the debt is retired. To be eligible to participate in this program, the State would provide to the Secretary a description of the congestion and air quality problems sought to be addressed and the goals sought to be achieved.

This section would repeal the value pricing pilot program established in section 1012(b) of the Intermodal Surface Transportation Efficiency Act of 1991, as amended by section 1216(a) of the Transportation Equity Act for the 21st Century. Additionally, this section would permit any State or public authority currently operating under the authority of a cooperative agreement under the value pricing pilot program to continue operating under the terms of that agreement and would make it clear that any State or public authority shall be allowed to continue tolling under that authority.

SEC. 1616. OZONE STANDARDS, PARTICULATE MATTER STANDARDS, AND REGIONAL HAZE PROGRAM. [Legislation]

This section would revise current air quality requirements found in sections 6101 and 6102 of TEA-21.

Revised section 6101 of TEA-21. Findings and Purpose

The findings in Section 6101 would be updated to reflect activities that have occurred since 1998. To enable the States and Indian Tribes to coordinate planning and implementation of the PM-2.5 standards and the regional haze program, the language in section 6101 is revised to establish a single date for PM-2.5 designations, which would permit submission of plans for both programs on the same schedule.

The Environmental Protection Agency (EPA) anticipates having 3 years of PM-2.5 monitoring data by the end of 2003. Given the health benefits of reducing PM-2.5, it is important to move forward expeditiously on the designation process and implementation of the standards. The findings also note the importance of continued funding for the PM-2.5 monitoring program to support the overall implementation process.

Revised section 6102. Particulate Matter and Regional Haze Programs

Section 6102 would be amended in order to establish specific dates by which States must provide recommendations to EPA, and by which EPA must promulgate designations. By having specific dates, it should streamline the designation process, facilitate coordination among States, and make it easier for States to coordinate implementation plans for the PM-2.5 program and for the regional haze program.

• The revised language in subsection (c)(1) would call for State recommendations for PM-2.5 designations to be submitted to EPA by September 30, 2003. This date should give the States time to take the 2000-2002 data into account.
  
  
• The revised language in subsection (c)(2)(A) would require State plans for regional haze to be submitted within 3 years of the date that PM-2.5 areas are designated in the State. Thus, statewide regional haze plans and PM-2.5 plans will be due at the same time, allowing for better coordination of strategies for each program.
  
  
• The revised language in subsection (c)(2)(B) would provide that the requirements in subsection (c)(2)(A) do not preclude nine Western States from submitting regional haze plans in 2003 to implement regional haze requirements based on the 1996 recommendations of the Grand Canyon Visibility Transport Commission.

The revised language in subsection (d) would establish a date of December 31, 2004, by which EPA is to promulgate designations for PM-2.5. Current TEA-21 language could otherwise result in some areas being designated in July 2004 and others in July 2005, making it more difficult for States to coordinate technical analysis and the implementation of strategies designed to reduce pollution regionally. Setting this date for designations should facilitate regional coordination among States and provide for expeditious action toward attaining the standards.

SEC. 1617. INDEMNIFICATION ON CERTAIN RAILBANKED PROJECTS. [Legislation]

Under a variety of programs (e.g., the Recreational Trails Program, the Transportation Enhancements Program, the Congestion Mitigation and Air Quality Improvement Program, Surface Transportation Program), the Department of Transportation provides funds to States to acquire, develop, construct, and maintain trails. States may use these funds to make grants to local governments and private organizations ("project sponsors") for trail projects. Such projects include trails established pursuant to the National Trails System Act Amendments of 1983, 16 U.S.C. 1247(d) ("Rails to Trails Act"), located on a railroad right-of-way.

Where the railroad or project sponsor's ownership interest in the right-of-way would not allow for railbanking and interim trail use under applicable State law but for the operation of the Rails-to-Trails Act, the United States has been held liable by the Federal courts under the Fifth Amendment to pay just compensation. The result in these instances is that the United States can be said to pay twice for the same trail corridor -- first through funds provided by DOT, and then a second time as the result of a just compensation award to property owners who abut the trail corridor and who are found by the court to hold the underlying fee interest.

This section adds an indemnification requirement for States involved in railbanking. If a Federal court determines that property owners are entitled to just compensation in a corridor where Federal-aid highway funds have been used after the date of enactment to acquire right-of-way interests or develop a trail that is located on a railroad right-of-way under the Rails to Trails Act, then the State would have to pay the United States the lesser amount of the judgment awarded (including attorneys' fees) or the Federal-aid highway program money received in connection with that railroad right-of-way.

SUBTITLE G - PROGRAM EFFICIENCIES AND IMPROVEMENTS -- OPERATIONS

SEC. 1701. TRANSPORTATION SYSTEMS MANAGEMENT AND OPERATIONS. [Legislation]

This section would amend title 23 so that transportation systems management and operations (TSM&O) programs and projects are integrated into and facilitated through the capital planning and construction processes. This proposal adds both a new section to title 23 and a definition of "transportation system management and operations" in the general definitions section. These amendments would establish a specific foundation for TSM&O, differentiate it from construction provisions in title 23, provide a clearer mandate, alleviate ambiguities that inhibit deployment and implementation of TSM&O activities, and establish procurement flexibility that State and local agencies need to increase their ability to take advantage of advanced operational practices and advanced technology.

This proposal amends the current definition of "construction." The examples cited in the current definition of "construction" are driven by traditional procurement methodologies, such as competitive bidding. Since the enactment of TEA-21, the transportation industry has indicated that the requirements surrounding these traditional procurement methodologies are too cumbersome for operational efforts, such as traffic control systems. The amendment of the definition of construction, coupled with the new procurement language proposed in the new section on transportation system management and operations, would result in greater procurement flexibility. Also, this proposal makes other technical changes to ensure internal consistency and to make improvements to transportation system management and operations an eligible activity under the congestion mitigation and air quality improvement program. Also, regional transportation operations collaboration and coordination would be added to the list of eligible activities under the Surface Transportation Program.

A new section 165, entitled Transportation Systems Management and Operation would be added to title 23 to improve regional transportation systems management and operation. As envisioned, regional operations collaboration and coordination is a deliberate, continuous, and sustained activity that takes place when transportation agency managers and public safety officials responsible for day-to-day management and operations work together at a regional level to solve problems, improve system performance, and communicate better with one another. The result of this activity would be defined to include, at a minimum, the following: (1) developing a regional concept of operations that defines a shared strategy for how the region's transportation systems will be managed, operated, and measured; (2) sharing information among multiple operators, service providers, and public safety officials as well as the general public; (3) guiding the implementation of regional transportation systems management and operations initiatives such as traffic incident management, emergency management and response, regional traveler information services and communications networks, roadway weather services, and electronic payment services. This activity is considered to be essential to the planning for transportation systems management and operations.

SEC. 1702. REAL-TIME SYSTEM MANAGEMENT INFORMATION PROGRAM. [Legislation]

This section is intended to encourage the deployment of systems to monitor the status of condition of key surface transportation (highway and transit) facilities.

Subsection (a) describes the goals and purposes of the proposed real-time system management information program. The goal of the program is to provide the nationwide capability to monitor, in real-time, the traffic and travel conditions of our Nation's major highways and to widely share that information to improve the security of the surface transportation system, address congestion problems, support improved response to weather events, and facilitate national and regional traveler information. This program would result in a nationwide system of basic real-time information for managing and operating our surface transportation system; help identify longer range real-time highway and transit monitoring needs and develop plans and strategies for meeting those needs; and provide the capability and means to share that data with State and local governments, and the traveling public.

Subsection (b) would require the Secretary to establish data exchange formats within one year of enactment of this bill. Disseminating the data provided by highway and transit monitoring systems to the public and private sector is critical to this program. Unless that data is in some sort of standard format, the benefits of this data would be lost.

Subsection (c) would require each State to establish a statewide incident reporting system within two years of enactment of this bill. Several of these systems already exist and they are relatively inexpensive.

Subsection (d) would require State and local governments to explicitly address real-time highway and transit needs and the systems needed to meet those needs including coverage, monitoring systems, data fusion and archiving, and methods of information sharing and exchange within their intelligent transportation system regional architecture. This subsection would also encourage States to incorporate explicitly the data exchange formats developed by the Secretary.

Subsection (e) specifies that activities related to the planning and deployment of real-time monitoring elements would be eligible for Surface Transportation Program and National Highway System funds. This subsection also would allow a State to obligate State Planning and Research funds for activities related to the planning of real-time monitoring elements.

SEC. 1703. INTELLIGENT TRANSPORTATION SYSTEMS PERFORMANCE INCENTIVE PROGRAM. [Legislation]

This section would establish an intelligent transportation systems (ITS) performance incentive program, to provide funding to States based on progress in achieving specific milestones directly related to operational performance.

Subsections (a) through (d) would establish the program, define key terms, and provide for the goals and purpose of the program.

Subsection (e) would require the Secretary to issue regulations that establish a funding formula for the program. This subsection would also establish the criteria upon which the funding formula shall be based. The Secretary would be required to establish an effective date for the funding formula in the regulations and to phase in the funding formula over a 3-year period. The funding formula would be established by regulation in order to engage the affected parties in the development of that formula.

Subsection (f) would provide contract authority for the program funding. Additionally, the 80 percent Federal share and its exceptions under section 120(b) of title 23, U.S.C., would apply.

Subsection (g) provides that the funds would be apportioned according to the National Highway System formula until the fiscal year established by the regulation.

Subsection (h) describes the use of the funds received under this program. The intent is to limit the use of this funding to projects involving planning, deployment, integration, and operation of ITS systems.

SEC. 1704. COMMERCIAL VEHICLE INFORMATION SYSTEMS AND NETWORKS DEPLOYMENT. [Legislation]

This section is intended to complete the core deployment of Commercial Vehicle Information Systems and Networks and to encourage the expanded deployment of Commercial Vehicle Information Systems and Networks by providing grants to States.

Subsection (a) provides general direction to carry out the Commercial Vehicle Information Systems and Networks Deployment Program.

Subsection (b) describes the overall purpose of the Commercial Vehicle Information Systems and Net works Deployment.

Subsection (c) would require the Secretary to make grants of up to $2.5 million for the core deployment of Commercial Vehicle Information Systems and Networks. A State that has previously received funding for the core deployment of Commercial Vehicle Information Systems and Networks would receive a grant that has been reduced by the amount of funds previously received funding for CVISN core deployment. States that have not previously received funding for CVISN core deployment would receive a grant of $2.5 million. To be eligible for a core deployment grant, a State must have a program plan and top-level system design, must certify that its Commercial Vehicle Information Systems and Networks activities are consistent with National Intelligent Transportation Systems and Commercial Vehicle Information Systems and Networks architectures and available standards, and must agree to execute a successful interoperability test. The use of grant funds would be limited to core deployment activities.

Subsection (d) would authorize the Secretary to make grants to States for the expanded deployment of Commercial Vehicle Information Systems and Networks. The amount of the grants would be determined by the amount of funds that remain after the core deployment grants have been made and by the number of States that request an expanded deployment grant. The maximum expanded deployment grant that may be given to a State in a fiscal year would be $1 million. A State that has completed core deployment would be eligible for an expanded deployment grant.

Subsection (e) provides that the Federal share of grant funds under this section would be 50 percent. The Federal share for funds used for Commercial Vehicle Information Systems and Networks from other eligible sources would be 80 percent.

SUBTITLE H - PROGRAM EFFICIENCIES AND IMPROVEMENTS - FEDERAL-AID STEWARDSHIP

SEC. 1801. SURFACE TRANSPORTATION SYSTEM PERFORMANCE PILOT PROGRAM. [Legislation]

This section would establish a surface transportation system performance pilot program. This pilot program is intended to test the concept of a performance-based management approach in the obligation of Federal funding under the Federal-aid highway program. Under this pilot program, up to five States would be encouraged to manage their programs on a systematic, performance basis across the programmatic lines by which the Federal-aid program is normally structured. This pilot would be devised in order to determine the feasibility, effectiveness, and impacts of this approach on program design and management.

One benefit of this program is that it would increase the flexibility provided to States to obligate their Federal funds made available under certain specified highway programs in title 23 in accordance with their own needs and priorities. This program would assist States in making effective investment by focusing on program outcomes rather than program categories. This program would facilitate management of the categories to address needs in accordance with established goals. States could choose under this program to advance individual projects solely with Federal funds. However, a State would have to agree to maintain its total (State and Federal) program expenditures at least at the average level of the three previous fiscal years.

Another benefit of this program is that it would authorize the Secretary to assign, and a State to assume, some or all of the Secretary's responsibilities under any Federal law or requirement, except for responsibilities relating to Federally recognized Tribes. The State would be deemed to be a Federal agency to the extent the State is carrying out the Secretary's responsibilities under the National Environmental Policy Act, title 23 of the United States Code, or any other Federal law. A State department of transportation or other State agency carrying out a responsibility of the Secretary would be subject to Federal laws to the same extent a Federal agency would be subject. Additionally, when assuming the responsibilities of the Secretary, this section would require a State to certify that it has laws and regulations necessary to carry out the responsibilities assumed by the State, and laws and regulations that are comparable to the Freedom of Information Act and that are reviewable by a court of competent jurisdiction.

From its inception, the Federal-aid highway program has fostered the development and growth of State transportation departments by requiring them to have adequate powers and be suitably equipped and organized to be able to comply with all Federal-aid requirements. In addition, many States have enacted legislation that is consistent with the requirements contained in title 23. Thus, in some States, it may be desirable to eliminate Federal controls that are duplicative to facilitate a more orderly and efficient execution of the Federal-aid highway program. This program would test whether the State can deliver these projects, consistent with Federal policies and objectives.

Up to five States could participate in the pilot program. States wishing to participate in the pilot program would be required to submit an application that would provide detailed information on their transportation goals and proposed performance measures to determine progress toward meeting those goals. This proposed pilot program also would require a State to provide, to the public, notice and opportunity to comment on the State's participation in the pilot program at least 20 days prior to submitting its application to the Secretary. The Secretary would evaluate each submission by determining how well those goals address national security, interstate commerce, mobility, safety, and environmental stewardship.

Each year, a State would identify certain goals it wishes to achieve with its funds under the program as well as certain performance measures by which to gauge the State's success in achieving its goals. The goals and performance measures would be mutually established by both the State and the Secretary. Although this program is intended to provide a great deal of flexibility to the States in determining where and how it wishes to spend its Federal funds, the Secretary must be able ensure that the State's goals and priorities are aligned with any areas of national strategic importance. A State's participation in the pilot program would be terminated if that State failed to achieve the established performance for two consecutive years.

Pilot States would be required to submit certain information to enable the Secretary to judge the success of the pilot program. States would be able to use their own record-keeping systems with information on the location of the expenditures, improvement types, and functional systems. This would include how much progress the State was making in the important national interest areas. Each year, information concerning how well the States had done to achieve established targets would be submitted by the pilot States and evaluated by the Secretary. The overall program would have a limited life and would sunset if not extended in statute.

Nothing in this section would relieve the Secretary from any of the Secretary's responsibilities under title VI of the Civil Rights Act of 1964, the major project requirements under section 106(h) of title 23, the statewide and metropolitan planning requirements under sections 134 and 135 of title 23, or the Secretary's rulemaking authority under any Federal law. Nothing in this section would relieve a project from the requirements of the National Environmental Policy Act. Additionally, nothing in this section is intended to relieve the Secretary from any of the Secretary's responsibilities concerning critical, time-sensitive highway and public transportation security projects under section 1206 of this Act.

SEC. 1802. STEWARDSHIP AND OVERSIGHT. [Legislation]

This section includes several proposals to improve oversight of Federal-aid highway projects.

This section includes a provision that would require the Secretary to establish an oversight program to monitor the effective and efficient use of funds authorized under title 23, with a specific focus on financial integrity and project delivery. Under this provision, the Secretary must perform annual reviews that address elements of States' financial management systems and project delivery systems. As part of the financial integrity oversight, the Secretary is required to develop minimum standards for estimating project costs, and to evaluate periodically States' practices for estimating project costs, awarding contracts, and reducing project costs. States are required to determine that subrecipients of Federal funds have sufficient accounting controls and project delivery systems.

Under current law, projects under title 23 with an estimated total cost of $1 billion or more are required to submit an annual financial plan to the Secretary. This section would add a requirement to submit a project management plan. The project management plan would document the procedures and processes in place to provide timely information to the project decision makers to effectively manage the scope, costs, schedules, and quality of the Federal requirements of the project and the role of the agency leadership and management team in the delivery of the project.

This section would require a recipient of Federal financial assistance to prepare an annual financial plan for projects that receive $100,000,000 or more in Federal financial assistance and that are not subject to the requirements for major projects. These annual financial plans would be available for the Secretary's review upon the Secretary's request.

This section would mandate debarment of contractors who have been convicted of fraud related to Federal-aid highway or transit programs, and mandate the suspension of contractors who have been indicted for offenses relating to fraud. This would codify the debarment of convicted contractors, which under current DOT regulations is a discretionary measure. The Secretary would have the authority to waive suspension and debarment actions to address circumstances relating to non-affiliated subsidiaries of an indicted contractor, and national security concerns.

This proposal would help States and project grantees to fund additional transportation programs and increase oversight activities. This section would require that portions of monetary judgments won in Federal criminal and civil cases against contractors pertaining to Federal-aid highway and transit program fraud be shared with the State or local transit agency that was injured by the fraud. The amount of the cost-share would be determined by the Attorney General and the Secretary, and would be used to fund additional infrastructure and oversight programs authorized under titles 23 and 49. The funds shared with the State or local transit agency would be considered as Federal funds. The mandatory cost-share would not be in effect if the State or local transit agency was involved or negligent in the fraudulent activity.

This section would also make other conforming and technical amendments to title 23 for consistency with the oversight responsibilities provided for in this section.

SEC. 1803. EMERGENCY RELIEF. [Legislation]

This section would increase the amount authorized to be obligated in any one fiscal year for emergency relief under section 125 from $100,000,000 to $200,000,000. Funding needs are routinely far in excess of the authorized funding level of $100,000,000. Doubling the authorization level to $200,000,000 would enable emergency relief funding to flow to State and local transportation agencies much more quickly in keeping with emergency relief needs.

SEC. 1804. FEDERAL LANDS HIGHWAYS PROGRAM. [Legislation]

Subsection (a) would amend 23 U.S.C. 101 to include a new definition for "recreation roads" and "public forest service roads," and change the definitions of "Federal lands highways," "forest development roads and trails," and "forest road or trail" to reflect current U.S. Forest Service definitions and a new class of Federal lands highways. It also would delete, as redundant, one of the two current definitions for "public lands highways" in section 101. Eligible recreation roads are public roads under the jurisdiction of the Bureau of Land Management, the Bureau of Reclamation, the Department of Defense, the Forest Service, or the Army Corps of Engineers, and that are owned by the United States.

Subsection (b) would amend 23 U.S.C. 120(k) and (l) by expanding the ability of Federal land managing agencies to pay the non-Federal share of any Federal-aid project funded under 23 U.S.C. 104 to all title 23 Federal-aid highway programs and the Federal transit program funded under Chapter 53 of title 49.

Subsection (c) would amend 23 U.S.C. 132 to allow direct transfers of apportioned funds to Federal agencies, including the Federal Lands Highways program, upon State request.

Subsection (d) would amend the Federal Lands Highways program allocation section, 23 U.S.C. 202, to: (1) eliminate the Public Lands Highways Discretionary category; (2) retain the forest highway subcategory; (3) revise the date on which the Indian Reservation Road fund distribution formula regulation is published, from April 1999 to April 2004, and the year in which the new formula is implemented, from October 1999 to October 2004; (4) clarify which title 23 funds (limited to Chapter 2 and emergency relief funds) are available to Indian tribes under this subsection and what is the relationship between the FHWA-approved Indian reservation road transportation improvement program and the obligation of funds for Indian Self-Determination and Education Assistance Act (Pub. L. 93-638) contracts and agreements; and (5) allow the use of Indian Reservation Road Bridge funds to be used for design as well as construction.

Subsection (e) would amend the Federal Lands Highways program section, 23 U.S.C. 204, to: (1) allow the Secretaries to enter into agreements as well as contracts, and (2) expand the use of refuge road funds to be used for interpretive signage, maintenance of public roads in National Fish hatcheries, payment of the non-Federal share of Federal-aid highway and transit projects, and maintenance and improvement of recreational trails. Funding used for trails would be limited to 5 percent of available funding per fiscal year.

Subsection (f) would create a safety funding category to provided dedicated funds for transportation safety improvement projects, collection of safety information, development and operation of safety management systems, highway safety education programs, and other eligible activities under section 402 of title 23.

Subsection (g) would create a recreation roads funding category to provided dedicated funds for improvement projects for public roads under the jurisdiction of the Bureau of Land Management, Bureau of Reclamation, Forest Service, Department of Defense, and Army Corps of Engineers, and that are owned by the U.S. Government.

Subsection (h) would provide conforming amendments for consistency with the definition changes made in this section.

SEC. 1805. APPALACHIAN DEVELOPMENT HIGHWAY SYSTEM. [Legislation]

This section prescribes how funds made available for the Appalachian development highway system would be apportioned to the States in the Appalachian region. The latest cost estimate would be used as the basis for apportionments. This section also provides that funding would be available for obligation for the Appalachian development highway system in the same manner as other funding apportioned under chapter 1 of title 23, with the exception of the period of availability. The funding would remain available until expended and the Federal share would be as delineated in section 201 of the Appalachian Regional Development Act of 1965. This section would also prohibit the use of toll credits on the Appalachian development highway system. This would reduce the Federal cost of that system and would likely expedite its completion.

SEC. 1806. MULTI-STATE CORRIDOR PLANNING PROGRAM. [Legislation]

This section would establish a Multi-State Corridor Planning Program to replace the National Corridor Planning and Development Program under section 1118 of TEA-21. Changes include: narrowing eligibility; reducing the Highway Trust fund share and establishing a set of selection criteria. The program would provide an opportunity for States and regional agencies to jointly plan for a variety of geographic areas in addition to traditional metropolitan or State areas. The principal objectives of the program would be to address the gap created by formula programs (formula programs do not provide specific funds for multi-State, multimodal, and multi-jurisdictional decisionmaking on corridors) and to implement the direction by Congress to streamline the project development process.

Eligible activities would be restricted to multi-State planning studies. This section would clarify that projects must be consistent with the existing "continuing, cooperative, and comprehensive" planning process required by law in metropolitan areas and statewide. The section would provide a statutory emphasis on multi-jurisdictional efforts for multi-modal planning and planning for operational alternatives that improve mobility, freight productivity, access to major marine ports, safety, and security.

Some of the selection criteria in section 1118 of TEA-21 required data that is generally not available and do not relate to the validity of individual projects. The selection criteria in this proposal are based on criteria from TEA-21 and on other considerations identified in the process of implementing TEA-21.

The total Federal share payable for a study would be limited to 80 percent, but the maximum share of funds from the Highway Trust Fund (other than the Mass Transit Account) for a study could not exceed 50 percent of the total cost of such study. This would ensure a strong commitment from all parties, leverage additional funds, and facilitate implementation of multimodal plans.

SEC. 1807. BORDER PLANNING, OPERATIONS, ANDTECHNOLOGY PROGRAM. [Legislation]

This section would establish a Border Planning, Operations, and Technology Program to replace the Coordinated Border Infrastructure Program under section 1119 of TEA-21. Improvements would include: emphasizing bi-national planning; modifying existing eligibility for clarity; adding language clarifying when physical construction in Canada and Mexico is eligible; adding language clarifying when and in what manner funds authorized for this program may be transferred to the General Services Administration; and establishing a set of selection criteria. These improvements to the prior program would enhance coordination among project stakeholders and enhance opportunities for improving border area air quality, planning, safety, and security, as well as operations. An individual project whose scope is limited to information exchange could receive a maximum of $500,000 in a single year; $47 million would be set aside in 2004 for construction of State border infrastructure facilities in designated States.

Projects would have to be consistent with the existing "continuing, cooperative, and comprehensive" planning process required in metropolitan areas by 23 U.S.C. 134 and statewide by 23 U.S.C. 135. Also, this section would clarify that regionally significant projects must already be included in the transportation plans and program at the time application is made for a grant under this section. Priority would be given to activities at the northern or southern borders of the United States that improve safety, security, freight movement, operations, or access to rail, marine, or air services.

Selection criteria for this program are based on criteria in TEA-21 and on other considerations identified in the process of implementing TEA-21. Multi-jurisdictional organizations with Federal representation have been established for both the Mexico/US border and the Canada/US border and it would be appropriate to use the consolidated expertise of these organizations in selection.

Because of the need to place physical facilities in Canada and Mexico to accommodate trade with the United States, language is included to clarify that such projects would be eligible. This provision would make clear that the Secretary may approve a request by one or more States to provide funds for construction projects in Canada and Mexico where such projects are limited to the improvement and efficiency of vehicle and cargo movements at international gateways and ports of entry at land border crossings. Funds for such projects would be provided to border States, and projects would require the cooperation of both the border State and Canada or Mexico, or a political subdivision of Canada or Mexico. Before funding such projects, the Secretary would have to obtain assurances from Canada, Mexico, or the appropriate political subdivision responsible for the project, that the project will be maintained and used over the useful life of the facility only for the purpose for which Federal funds were allocated to the project.

This section would also require that a portion of the fiscal year 2004 funding for the program be used for the construction of State border safety infrastructure facilities in Arizona, California, New Mexico, and Texas. This is the final year of funding in a 3-year effort to improve State border safety inspection infrastructure at the southern border.

The Department does not propose funding for marine port-related projects under this program, notwithstanding the fact that such projects may be important and worthwhile, because this program is designed to address issues at the land borders with Canada and Mexico.

In addition, this section would provide for transfer of funds allocated for a specific project or projects to the General Services Administration for administration, where the Secretary and the State receiving the allocation deem such transfer necessary or where the Secretary determines that such a transfer is necessary to effectively carry out the program.

SEC. 1808. TERRITORIAL HIGHWAY PROGRAM AMENDMENTS. [Legislation]

The Territorial Highway Program (THP) was first established by section 112 of the Federal-Aid Highway Act of 1970, Pub. L. 91-605, 84 Stat. 1713, Dec. 31, 1970. Current provisions of law have not been modernized to reflect the maturity of the program. This provision would update and consolidate as much as possible in one place (section 215) the statutory provisions in title 23 governing the territorial highway program.

Subsection (a) would add a definition of the program to title 23. The intent of this amendment is to increase the visibility of the THP by recognizing it along with other Federal assistance programs that are defined in title 23.

Subsection (b) would maintain the current funding level for the program at $36,400,000 per fiscal year. Subsection (c) would amend 23 U.S.C. 103 to: (1) refer to section 215, which contains a comprehensive listing of all permissible uses of funds apportioned for the territorial highway program, including projects eligible for assistance under 23 U.S.C. 133; and (2) eliminate the use of funds apportioned for the National Highway System for airports and seaports.

Historically, funding for the THP was set at 1% of the Federal-aid Primary program and, under ISTEA, 1% of the NHS program. However, under TEA-21, the funding was fixed at the current level, which is significantly lower than the levels that would have been available under the 1% formula. As a consequence, the funding levels for the THP have not kept pace with the rest of the Federal-aid highway program. The limited funding available for the THP should be focused on addressing the growing highway needs of the territories.

Subsection (d) would revise 23 U.S.C. 215 to modernize terms to reflect the current operations and needs of the program. Many of the provisions in section 215 are outdated, do not recognize changes in funding authorization, and do not reflect the development of the program. The changes to section 215 include:

• expanding the areas of technical assistance to be provided to territorial governments to include environmental evaluations (an important aspect of transportation project development);
  
  
• requiring a delineation in the agreement between the Secretary and the territorial government of the kind of technical assistance to be provided;
  
  
• requiring that a statement on the role and responsibilities of the territorial government and the Secretary for oversight be included in the agreement;
  
  
• requiring the execution of new agreements within 12 months after the effective date of this bill;
  
  
• requiring the re-evaluation of agreements every two years;
  
  
• identifying in the agreement the provisions of Chapter 1 of title 23 that apply to the particular territorial government. In exercising the authority granted by section 215, the Secretary should recognize that each of the territories has different levels of transportation technical expertise, forms of land ownership, governmental structures, taxing authorities, topographic constraints, levels of traffic congestion, population densities, transportation needs, and other important characteristics that may warrant different treatment;
  
  
• eliminating the current prohibition on the imposition of toll charges;
  
  
• clarifying the permissible use of funds for ferry boats and related facilities, subject to the restrictions of sections 129(b) and (c);
  
  
• codifying the current funding eligibility of preventative maintenance activities consistent with the criteria set forth in section 116;
  
  
• eliminating existing funding set-asides for certain projects/activities; and
  
  
• clarifying that Federal-aid projects may not be undertaken on local roads.

SEC. 1809. FUTURE INTERSTATE SYSTEM ROUTES. [Legislation]

Under current law, the Secretary may designate a highway as a "future Interstate System route" upon the Secretary's determination that the highway "would be a logical addition or connection to the Interstate System" and would qualify as an Interstate System route upon meeting all the standards for designation as an Interstate System route. The law further requires a written agreement between the Secretary and the State or States in which the highway is located that the highway will meet the Interstate System standards within 12 years of the agreement. However, the law requires the Secretary to revoke a future Interstate System route designation if the State or States in which the highway is located do not substantially complete construction within the 12-year time limit.

This section would replace the 12-year limit with a 25-year limit to provide States ample opportunity to substantially complete construction of the highways designated as future Interstate System routes, before the States must forfeit future Interstate designation status. This section would also extend the time limitation contained in existing agreements from 12 years to 25 years.

SEC. 1810. DONATIONS AND CREDITS. [Legislation]

This revision would simplify and broaden 23 U.S.C. 323 by deleting subsection (e) and adding a reference to local government employees in subsection (c). This would expand section 323 to include the value of donated services provided by local government employees, as already allowed for services donated by a person, to be credited to the non-Federal share for projects funded under title 23 funds. This provision would give States and local governments additional flexibility to match Federal funds and expedite project implementation.

SEC. 1811. DISADVANTAGED BUSINESS ENTERPRISES [Legislation]

This section continues authorization of the Disadvantaged Business Enterprise (DBE) Program. Under the DBE program, not less than 10 per cent of the funds provided to FHWA, FTA, and Transportation Research pursuant to titles I, III, and V shall be expended with small business concerns owned and controlled by socially and economically disadvantaged individuals, except to the extent the Secretary of Transportation determines otherwise.

The proposed section restates the current authorization, with one exception. The provision of current law requiring a review of the program by the Comptroller General of the United States has been eliminated. The Comptroller General completed the required review in June 2001.

This proposal is made in recognition of the fact that two cases addressing this provision are currently pending in the Federal courts of appeals, along with other cases addressing related issues up to the level of the Supreme Court. The Department will continue to monitor developments in this area, and will be prepared to propose appropriate legislative changes or to make any appropriate adjustments in the administration of this program in light of clarification by the courts of the constitutional parameters for such programs.

SEC. 1812. HIGHWAY BRIDGE PROGRAM. [Legislation]

This section proposes several amendments to section 144 of title 23. First, the change in the section title removes the emphasis on the bridge program as being focused on replacement and rehabilitation.

Subsection (a) of section 144 would be amended by deleting the words "replacement and rehabilitation" and adding the words "improve the condition of their bridges through replacement, rehabilitation and systematic preventative maintenance on" after "the Several States to." These changes allow the use of bridge funds for preventative maintenance activities consistent with the section 116(d) of the NHS Designation Act.

To clarify that all qualifying bridges are eligible for funding under section 144, subsection (a) would be further amended by deleting the words "is significantly important and" after bridge.

Subsection (d) would be amended to allow section 144 funds to be used for scour countermeasures without regard to eligibility. More bridges fail due to scour than any other cause.

Subsection (e) of section 144 would be amended by deleting the words "constructed under subsection (m) in such State, relating to replacement of destroyed bridges and ferryboat services, and." This provision has been difficult to track and is no longer needed. To set a date that correlates to the amendments being proposed to section 144, subsection (e) would be further amended by replacing 1997 with the year 2003. Also, the obsolete reference to "the Federal-aid primary system" would be replaced by "Federal-aid highways."

The effectiveness of the discretionary bridge program has diminished over the years and work under that program is eligible using funding apportioned under section 144. Apportioning all of the section 144 funds by formula allows States, in cooperation with local governments, to select the most urgently needed projects in their respective States. Accordingly, section 144 would be amended to eliminate the discretionary bridge fund formerly in subsection (g).

New subsection (g), formerly section 144(g)(3), would delete the words "nor more than 35 percent"; change 1987 to 2004 and change 2003 to 2010 to correspond to the years funding would be provided under these amendments; add the words "perform systematic preventative maintenance" after rehabilitate and delete the word "paint." This would correct an issue when a State has needs for its off-system bridges greater than 35% of the apportioned funds. Some States have more off-system bridge needs than on-system. This section would also allow for bridge funds to be used for preventative maintenance on off-system bridges.

The amendment to subsection (n) would clarify that "standards" are general engineering standards.

Subsection (o)(4), Historic Bridge Program, would be amended by adding the words "200 percent of" after "amount not to exceed," and striking the word "title," replacing it with "section." This would correct a conflict with the use of transportation enhancement funds for bridge preservation and increases the allowable limits under the Highway Bridge Program.

Finally, new subsection (r) would be added to section 144 to preclude highway bridges from being treated as "water resources projects" under the Wild and Scenic Rivers Act (16 U.S.C. 1271-1287). The Wild and Scenic Rivers Act prohibits Federal agencies from funding water resources projects if the Department of the Interior determines the project would adversely affect a river listed or proposed for listing on the wild and scenic rivers system. This section would clarify that a highway bridge constructed with title 23 funds is not a water resources project under the Wild and Scenic Rivers Act. Highway bridges are designed to convey floodwaters with minimal disruption and are not intended to control the free flow of a National Wild and Scenic River.

SEC. 1813. DESIGN-BUILD. [Legislation]

During the rulemaking process for the design-build regulation required by section 1307 of TEA-21, which also amended 23 U.S.C. 112, FHWA received several comments regarding the restrictive nature of the "qualified project" definition with respect to the project cost threshold. Approximately 85% of the design-build projects that have been evaluated under the FHWA experimental contracting program (Special Experimental Project No. 14 (SEP-14) - Innovative Contracting) are too small to meet the definition of "qualified project." Based on the FHWA's experience with design-build projects under SEP-14, there is no need to limit design-build projects to those costing more than $5 million in the case of a project that involves installation of an intelligent transportation system and to those costing more than $50 million in the case of any other project.

SEC. 1814. INTERNATIONAL FERRIES. [Legislation]

This section would amend 23 U.S.C. 129, to allow a territory of the United States to undertake a ferry boat project using Federal funding even though there may be international waters between the islands comprising the territory.

SEC. 1815. ASSUMPTION OF RESPONSIBILITY FOR TRANSPORTATION ENHANCEMENTS, RECREATIONAL TRAILS, AND TRANSPORTATION AND COMMUNITY AND SYSTEM PRESERVATION PROGRAM PROJECTS. [Legislation]

The transportation enhancements and recreational trails programs, established under ISTEA and continued under TEA-21, and the transportation and community and system preservation program, established under TEA-21, will be continued. Projects under these programs present a low risk of harm to the environment, and, in fact, are often beneficial. They typically have broad support from the community as well as transportation stakeholders. However, these projects are governed by all of the same environmental and other Federal requirements that apply to all Federal-aid highway projects. This section would allow some of the Department's responsibilities relating to these types of projects to be assumed by the State. This would streamline the review and approval process, thereby expediting project delivery for these non-controversial projects, without substantial risk of harm to the environment. This section would add a new section 166 to title 23.

Subsection (a) of section 166 would allow the Secretary to assign to a State some or all of the Department's responsibilities (except responsibilities relating to Federally recognized tribes) under Federal law that are applicable to transportation enhancements, recreational trails, and transportation and community and system preservation program projects. Under this subsection, the State would assume full responsibility for complying with such laws and, consequently, full liability for any failure to comply. This assumption would include defending any legal challenges arising from the assigned responsibilities and being liable for any judgment, order, or fees imposed by a court in connection with such legal challenges. The State would also assent to the jurisdiction of Federal courts with respect to its assumed responsibilities. The assignment could be made with respect to responsibilities for new projects or for unfulfilled responsibilities for projects already underway.

Subsection (b) would provide for the execution of memoranda of understanding between the Secretary and the State that would set forth the terms and conditions of an assignment and assumption of responsibility under this section. Such memoranda of understanding would need to be renegotiated every three years. The Secretary would be required to conduct compliance reviews to ensure that a State is complying with the terms and conditions of the memorandum of understanding and with any laws for which it is assigned responsibility under the memorandum of understanding. Such compliance reviews would be conducted on an annual basis for the first three years of the agreement, and then on a periodic basis to be determined by mutual agreement between the State and the Secretary, but no less frequently than every three years. Under subsection (c), the Secretary could terminate any assignment of responsibility to a State if it is not adequately carrying out its responsibilities.

Subsection (d) would clarify that, with respect to recreational trails, the assignment of responsibility to a State must be made through the agency or agencies designated by the Governor to be responsible for administering apportionments under the recreational trails program. Subsection (e) would clarify that this section is not intended to limit any requirements under any applicable laws providing for the consideration and preservation of the public interest, including public participation and community values in transportation decisionmaking.

SEC. 1816. TRANSPORTATION, COMMUNITY, AND SYSTEM PRESERVATION PROGRAM. [Legislation]

TEA-21 authorized a Transportation and Community and System Preservation pilot program, a comprehensive initiative of research and grants to investigate the relationships between transportation and community and system preservation and private sector-based initiatives. This section would add a new section 167 to title 23 to authorize the Transportation, Community, and System Preservation (TCSP) program. Under the proposed TCSP program, the Secretary would facilitate the planning, development, and implementation of strategies by States, Metropolitan Planning Organizations, Federally recognized tribes, and local governments to integrate transportation, community, and system preservation plans and practices that improve the efficiency of the transportation system; reduce the impacts of transportation on the environment; reduce the need for costly future investments in public infrastructure; provide efficient access to jobs, services, and centers of trade; and examine development patterns and identify strategies to encourage private sector development patterns which achieve these goals.

The proposed program would be funded by a $26,000,000 set-aside from the Surface Transportation Program. Under TEA-21, the Transportation and Community and System Preservation pilot program awarded funding to individual projects undertaken by States, Metropolitan Planning Organizations, and local governments. The proposed TCSP program would apportion program funding to States by formula. Each State, the District of Columbia, and Puerto Rico would receive $500,000 in TCSP funds each fiscal year for fiscal years 2004 through 2009. The proposal also would require States to make these funds available to Metropolitan Planning Organizations, Federally recognized tribes, and local governments, in a manner and amount to be determined by the States.

SEC. 1817. PROGRAM EFFICIENCES -- FINANCE. [Legislation]

Section 115 of title 23, Advance construction, would be amended to remove the restriction that a State must obligate all funds apportioned or allocated to it under sections 104(b)(2), 104(b)(3), 104(f), 144, or 505 of title 23, or demonstrate that it will use all obligation authority allocated to it for Federal-aid highways and highway safety constructions prior to approval of advance construction projects. The revisions would also clarify that advance construction procedures can be used for all categories of Federal-aid highway funds, and that when a project is converted to a regular Federal-aid project, any available Federal-aid funds may be used to convert the project. This section would further modify section 115 to remove the requirement that the Secretary must first approve an application of the State prior to authorizing the payment of the Federal share of the cost of the project when additional funds are later apportioned or allocated to the State. The new provision would allow the Secretary to obligate the Federal share or a portion of the Federal share of cost of the project by executing a project agreement.

SUBTITLE I - TECHNICAL CORRECTIONS TO TITLE 23, U.S.C.

SEC. 1901. REPEAL OR UPDATE OF OBSOLETE TEXT. [Legislation]

Letting Of Contracts: Section 112 of title 23 (Letting of Contracts) contains an obsolete requirement concerning an exemption for the "secondary system" in the context of "certification acceptance" (concepts that no longer exist). This amendment would delete the obsolete exception.

Fringe And Corridor Parking Facilities: Section 137 of title 23 contains the basis for funding fringe and corridor parking facilities, but the section refers to an obsolete aspect of Federal highway law: "Federal-aid urban system." The amendment would substitute a meaningful reference for the obsolete term.

Repeal of Obsolete Sections of Title 23: This subsection would repeal, as obsolete, the following sections of title 23: Priority Primary Routes (23 U.S.C. 147); Development of a National Scenic and Recreational Highway (23 U.S.C. 148); and Access Highways to Public Recreational Areas on Certain Lakes (23 U.S.C. 155).

SEC. 1902. CLARIFICATION OF CERTAIN DATES. [Legislation]

This section would restate, as a calendar date, a date in title 23 that currently is expressed as a reference to a date of enactment of law, making it difficult to understand. No change in the actual date would be made.

SEC. 1903. INCLUSION OF REQUIREMENTS FOR SIGNS IDENTIFYING FUNDING SOURCES IN TITLE 23. [Legislation]

Section 154 of the Federal-Aid Highway Act of 1987 (23 U.S.C. 101 note; 101 Stat. 209) establishes the basis for erecting signs at Federally assisted highway projects identifying the source and amounts of funding being used. This section would transfer the provision to 23 U.S.C. 321 and make a needed conforming amendment.

SEC. 1904. INCLUSION OF "BUY AMERICA" REQUIREMENTS IN TITLE 23. [Legislation]

Section 165 of the Highway Improvement Act of 1982 (Pub. L. 97-424; 96 Stat. 2136) sets forth the "Buy America" provisions governing funds authorized to carry out title 23. This section would transfer the provision and redesignate it as 23 U.S.C. 321, make non-substantive, conforming amendments to the text needed because of the transfer, simplify the text, and delete an executed report requirement.

SEC. 1905. TECHNICAL AMENDMENTS TO 23 U.S.C. 140 - NONDISCRIMINATION. [Legislation]

This section would make technical amendments to section 140 of title 23, U.S.C., to eliminate gender-based language; clarify that funding made available to carry out this section has the same broad availability as the source from which the funds are made available (a takedown from STP); remove the $2.5 million funding cap on highway construction and technology training programs established for fiscal year 1976 as no longer necessary; correct a typographical error; and clarify the purpose and intent of subsection (d) by modifying the title to remove the reference to Indian contracting.

SEC. 1906. FEDERAL SHARE PAYABLE FOR PROJECTS FOR ELIMINATION OF HAZARDS OF RAILWAY-HIGHWAY CROSSINGS. [Legislation]

This section would codify in title 23 a provision now in section 2604 of Pub. L. 106-246, which provides 100% Federal funding for "projects involving the elimination of hazards of railway-highway crossings, including the separation or protection of grades at crossings, the reconstruction of existing railroad grade crossing structures, and the relocation of highways to eliminate grade crossings."