TEA-21 - Transportation Equity Act for the 21st Century
Moving Americans into the 21st Century
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Disadvantaged Business Enterprises
TEA-21 maintains the Disadvantaged Business Enterprises program, which is designed to ensure equal opportunity in transportation contracting markets and to address the effects of discrimination in transportation contracting. The program establishes a flexible 10 percent national goal for the participation of disadvantaged business enterprises, including small firms owned and controlled by women and minorities. As in the past, recipients will be responsible for setting their own goals based on local market conditions and the availability of qualified disadvantaged business enterprises. The use of quotas will not be permitted.
A new provision has been added to the DBE program, which seeks to reassure recipients that, in the event a final order of a Federal court finds the DBE program unconstitutional, their continuing eligibility for funding will not be affected.
Highway Construction Programs
National Highway System (NHS)
The National Highway System is composed of 163,000 miles of rural and urban roads serving major population centers, international border crossings, intermodal transportation facilities, and major travel destinations, and includes connections to terminals designated by this Act. It includes the Interstate System, other urban and rural principal arterials, highways that provide motor vehicle access between the NHS and major intermodal transportation facilities, the defense strategic highway network, and strategic highway network connectors.
The NHS funding level is $28.6 billion for the 6 years of the Act. These funds will be distributed based on a formula which has been revised to include each States lane-miles of principal arterials (excluding Interstate), vehicle-miles traveled on those arterials, diesel fuel used on the States highways, and per capita principal arterial lane-miles. The Act expands and clarifies eligibility of NHS funding for certain types of improvements, such as publicly owned bus terminals, infrastructure-based intelligent transportation system capital improvements, and natural habitat mitigation.
Interstate System/Interstate Maintenance (IM)
The 46,000 mile Dwight D. Eisenhower National System of Interstate and Defense Highways retains a separate identity within the NHS. To ensure the continued maintenance and improvement of this system, the IM program established under ISTEA is retained, and authorizations totaling $23.8 billion are provided for FYs 1998-2003. These funds are to be distributed based on each States lane-miles of Interstate routes open to traffic, vehicle-miles traveled on those Interstate routes, and contributions to the Highway Account of the Highway Trust Fund attributable to commercial vehicles. Under this Act, reconstruction is now an eligible activity for IM funds. Eligibility is also expanded for certain additions to the Interstate system. A total of $550 million of authorized funds is available at the discretion of the Secretary for high-cost, ready-to-go IM projects.
All remaining work to complete the Interstate System has been fully funded through previous highway legislation. TEA-21 provides flexibility to the States to fully utilize remaining unobligated balances of these prior Interstate Construction authorizations. States with no remaining work to complete the Interstate System may transfer surplus Interstate Construction funds to their NHS fund account. States with remaining completion work on Interstate gaps or open-to-traffic segments may relinquish Interstate Construction fund eligibility for the work and transfer the Federal share of the cost to their NHS program.
Surface Transportation Program (STP)
The STP provides flexible funding that may be used by States and localities for projects on any Federal-aid highway, including the NHS, bridge projects on any public road, transit capital projects, and public bus terminals and facilities. A new provision permits a portion of funds reserved for rural areas to be spent on rural minor collectors. The Act expands and clarifies STP eligibilities, such as environmental provisions (natural habitat mitigation, stormwater retrofit, and anti-icing and de-icing), programs to reduce extreme cold starts, modification of sidewalks to meet Americans with Disabilities Act (ADA) requirements, infrastructure-based intelligent transportation systems capital improvements, and privately owned intercity bus terminals and facilities. Funding flexibility features established by ISTEA are retained.
Total funding provided for the STP over the 6 years is $33.3 billion. These funds are to be distributed among the States based on each States lane-miles of Federal-aid highways, total vehicle-miles traveled on those Federal-aid highways, and estimated contributions to the Highway Account of the HTF. A State may augment its STP funds by transferring funds from other programs. In addition, a portion of the Minimum Guarantee funds are administered as if they were STP funds.
Once the funds are distributed to the States, 10 percent is set aside for safety construction activities (i.e., hazard elimination and railway-highway crossing improvements), and 10 percent is set aside for transportation enhancements, which encompass a broad range of environmentally related activities. State suballocations, including a special rule for areas with less than 5,000 population are continued. The provision requiring States to make available obligation authority to urbanized areas of more than 200,000 population is extended, but in two 3-year increments rather than one 6-year period as in ISTEA. Of amounts reserved for rural areas, up to 15 percent may be spent on rural minor collectors.
Bridge Replacement and Rehabilitation
Continuing as a separate program with its own funding is the Bridge Replacement and Rehabilitation program. A total of $20.4 billion is authorized for this program for FYs 1998-2003 to provide assistance for eligible bridges located on any public road. The distribution formula and program requirements remain basically unchanged from previous years, except for an expansion of eligibility to cover the application of anti-icing and de-icing compositions and the installation of scour countermeasures. The program retains the setaside for off-system bridges, but eliminates the setaside for timber bridges. A total of $525 million is set aside for high-cost bridge projects with special provision to use a portion of these funds for the seismic retrofit of bridges. While a State may continue to transfer up to 50 percent of its bridge funds to NHS or STP apportionments, the amount transferred is deducted from national bridge needs for calculating apportionments in the following fiscal year.
Federal Lands Highways
The Federal Lands Highways (FLH) program authorizations total $4.1 billion for FYs 1998-2003. Funding is provided for the three existing categories of Federal Lands highwaysIndian Reservation Roads (IRR), Park Roads and Parkways, and Public Lands Highways (discretionary and Forest Highways)and for a new category called Refuge Roads, which are federally owned public roads providing access to or within the National Wildlife Refuge System.
FLH funds can be used for transit facilities within public lands, national parks, and Indian reservations and can also be used as the State/local match for most types of Federal-aid highway funded projects. Procedures and a fund allocation formula for the IRR program shall be developed through negotiated rulemaking with Indian tribal governments.
A nationwide priority program for improving deficient bridges on Indian Reservation Roads is established; a minimum of $13 million per year of IRR funds is reserved for this purpose.
The Emergency Relief (ER) program assists State and local governments with the expense of repairing serious damage to Federal-aid and Federal Lands highways resulting from natural disasters or catastrophic failures. TEA-21 restates the program eligibility, specifying that ER funds can be used only for emergency repairs to restore essential highway traffic, to minimize damage resulting from a natural disaster or catastrophic failure, or to protect the remaining facility and make permanent repairs. If ER funds are exhausted, the Secretary may borrow funds from other highway programs. Unlike other highway programs, the ER program has a permanent authorization of $100 million annually.
The basic structure of the Federal transit programs remains essentially the same, but several new programs and activities have been added and new features have been incorporated. The funding flexibility features first incorporated in the ISTEA and similar matching ratios to the highway programs have been retained. The definition of a capital project has been revised to include preventive maintenance, the provision of nonfixed route paratransit service, the leasing of equipment or facilities, safety equipment and facilities, facilities that incorporate community services such as daycare and health care, and transit enhancements.
TEA-21 provides $41 billion over the 6 years for transit programs, with $36 billion of this amount guaranteed. Of the total $41 billion, $29.34 billion is to come from the Mass Transit Account of the Highway Trust Fund while $11.65 billion is authorized from the General Fund. Of the amount from the General Fund, $5 billion is not included in the guaranteed funding level.
The various Formula Grants programs are authorized at $19.97 billion for FYs 1998-2003. After setasides for the Rural Transportation Accessibility Incentive Program, the Clean Fuels program, and the Alaska Railroad (see Rail programs), the remaining funding is apportioned using three statutory formulas for urbanized areas, nonurbanized areas, and special needs of the elderly and persons with disabilities.
Rural transportation accessibility incentive program. This program provides $24.3 million for the 5-year period of FYs 1999-2003 for over-the-road bus service. The purpose of the funding is to help public and private operators finance the incremental capital and training costs of complying with the DOTs final rule on accessibility of over-the-road buses. Funding may be used for intercity fixed-route over-the-road bus service and other over-the-road service such as local fixed route, commuter, charter, and tour service. The Secretary will allocate available funding through a competitive grant selection process.
Clean fuels formula grant program. This new program supports the global warming initiative by providing an opportunity to accelerate the introduction of advanced bus propulsion technologies into the mainstream of the Nations transit fleets. When the authorization in this formula grants account is combined with the authorization in the Capital Investment Grants account, a total of $1 billion is authorized for the Clean Fuels Formula Grant Program. Eligible projects include the purchasing or leasing of clean fuel buses and facilities, and the improvement of existing facilities to accommodate clean fuel buses. Clean fuel buses include those powered by compressed natural gas, liquefied natural gas, biodiesel fuels, batteries, alcohol-based fuels, hybrid electric, fuel cell, certain clean diesel, and other low or zero emissions technology. Available funds will be allocated among the eligible grant applications using a formula based on an areas nonattainment rating, number of buses, and bus passenger-miles.
Urbanized area formula grant program. Authorizations totaling $18.03 billion for the 6-year period are provided for the Urbanized Area Formula Grant Program (Title 49 U.S.C. Section 5307). Under this program, 91.23 percent of the funding is made available to all urbanized areas with a population of 50,000 or more. For urbanized areas with populations less than 200,000, funding may be used for either capital or operating costs at local option and without limitation. For urbanized areas with populations of 200,000 or more, the definition of capital has been revised to include preventive maintenance. Operating assistance for these larger areas is no longer an eligible expense. Also, for these larger areas, at least 1 percent of the funding apportioned to each area must be used for transit enhancement activities such as historic preservation, landscaping, public art, pedestrian access, bicycle access, and enhanced access for persons with disabilities.
Formula grant program for other than urbanized areas. This program receives 6.37 percent ($1.18 billion over 6 years) of the funding available for apportionment in proportion to each States nonurbanized population. Funding may continue to be used for capital, operating, State administration, and project administration expenses.
Formula grant program and loans for special needs of elderly individuals and individuals with disabilities. This program receives 2.4 percent ($456 million over 6 years) of formula funding available and is apportioned based on each States share of population for these groups of people.
Capital Investment Grants
TEA-21 continues the current program structure of three major programs:
New starts. Total funding of $8.18 billion is authorized for FYs 1998-2003. Not less than 92 percent is to be applied to projects for final design and construction. The Secretary is to evaluate and rate New Starts projects as highly recommended, recommended, and not recommended. In addition to the current report each February by the Secretary on funding recommendations, a supplemental report is now required to be submitted to Congress each August. This report is to describe the Secretarys evaluation and rating of each project that has completed alternatives analyses or preliminary engineering since the last report. In evaluating projects, the Secretary is to consider the following new factors: population density and current transit ridership in the corridor; the technical capability of the grant recipient to construct the project; and factors that reflect differences in local land, construction, and operating costs. A number of projects are identified for funding during the reauthorization period.
Fixed guideway modernization. Authorizations total $6.59 billion for this program over the 6-year period. The allocation of funding under the first four tiers has been modified slightly, but will continue to be apportioned using system-wide mileage based on data used to apportion the funding in FY 1997. Also, the number of tiers has been increased from four to seven. The funding in these three additional tiers will be apportioned based on actual route-miles and revenue vehicle-miles on segments at least 7 years old.
Bus. A total of $3.55 billion is authorized for bus and bus-related facilities over the 6-year period. A takedown of $3 million per year is authorized for the Federal Transit Administrations Bus Testing Facility in Pennsylvania for each of the 6 years of the reauthorization period. A number of bus projects are identified for funding in FYs 1999 and 2000.
The Act changes the Internal Revenue Code to help level the playing field between parking benefits and transit/vanpool benefits. The limit on nontaxable transit and vanpool benefits is increased from $65 to $100 per month for taxable years beginning after December 31, 2001. In addition, the bill allows transit and vanpool benefits to be offered in lieu of compensation payable to an employee for taxable years beginning after December 31, 1997, giving transit and vanpool benefits the same tax treatment given to parking benefits under the Taxpayer Relief Act of 1997.
Magnetic Levitation Transportation Technology Deployment Program (MAGLEV)
Contract authority totaling $60 million is authorized for FYs 1999-2001 to fund nationally significant projects that will demonstrate the feasibility and safety of transportation systems employing magnetic levitation. Of this amount, $15 million will be set aside for discretionary grants for the research and development of low-speed superconductivity MAGLEV technology for public transportation in urban areas. An additional $950 million in budget authority is authorized, but must first be appropriated by Congress. STP and Congestion Mitigation and Air Quality funding may also be used. After soliciting applications for eligible projects from the States, the Secretary will select one or more projects to receive assistance for preconstruction planning activities. Upon completion of preconstruction planning activities for all selected projects, the Secretary will select one project to receive financial assistance for final design, engineering, and construction activities.
High Speed Rail Development
The existing high speed rail development program authorized by the Swift Rail Development Act is reauthorized for FYs 1998-2001 at a total of $40 million for corridor planning and $100 million for technology improvements. These authorizations are out of the General Fund and appropriations will be necessary to fund the program. This program has supported the incremental development of high speed rail in corridors around the country.
Light Density Rail Line Pilot
A new program is created to fund light density rail line pilot projects. It provides funding for capital improvements and rehabilitation of publicly and privately owned rail line structures. The program is authorized at $105 million in total for FYs 1998-2003 and these funds must be appropriated out of the General Fund. The Secretary is required to submit a report by March 31, 2003 on the importance of light density railroad networks in the States and their contribution to a multi-modal transportation system.
TEA-21 authorizes a total of $31.5 million for FYs 1998-2003 for grants for capital rehabilitation and improvements to passenger services of the Alaska Railroad. Congress must first appropriate these funds from the General Fund. In addition, transit formula grant funding totaling $29.1 million for FYs 1998-2003 is available for capital improvements to the Alaska Railroads passenger operations. Of this funding, 80 percent is to be derived from the Mass Transit Account and 20 percent from the General Fund.
Railroad Rehabilitation and Improvement Financing
The Act also authorizes a new Railroad Rehabilitation and Improvement Financing program to provide credit assistance, in the form of direct loans and loan guarantees, to public or private sponsors of intermodal and rail projects. The Act does not provide budget authority, but authorizes future appropriations and contributions from potential borrowers and other non-Federal sources to fund the credit assistance. The aggregate amount of outstanding loans and guarantees made under this program is limited to $3.5 billion, with $1 billion reserved for projects primarily benefiting freight railroads other than Class I carriers. Eligible projects include the acquisition, development, improvement, or rehabilitation of intermodal or rail equipment or facilities, including track, bridges, yards, buildings, and shops.
Welfare to Work
Access to jobs. The Act creates a new program for Job Access and Reverse Commute Grants. The program is funded for FYs 1999-2003 with $400 million from the Mass Transit Account. An additional $350 million from the General Fund must be appropriated before it becomes available. The twofold purpose of the program is (1) to develop transportation services designed to transport welfare recipients and low-income individuals to and from jobs, and (2) to develop transportation services for residents of urban centers and rural and suburban areas to suburban employment opportunities. Emphasis is placed on projects that use mass transportation services.
Training. To provide job opportunities through training, a new provision in TEA-21 allows States the opportunity to reserve slots for welfare recipients in On-the-Job Training programs which lead to full journey level in skilled highway construction trades. As trainees, the welfare recipients also have access to supportive services programs that provide pre-employment counseling, orientation to the requirements of the highway construction industry, basic skills improvement, assistance with transportation, child care or other special needs, jobsite mentoring, and post-graduation follow-up.
On-the-Job Training/Supportive Services (OJT/SS)
TEA-21 significantly broadens the approved scope of OJT/SS assistance and training programs. Training which leads to transportation technology careers may now be funded under OJT/SS to prepare for rapidly expanding transportation employment opportunities in the 21st century. In addition, the Act authorizes the use of OJT/SS funds for Summer Transportation Institutes, including the American Association of State Highway and Transportation Officials (AASHTO) Transportation and Civil Engineering (TRAC) program, to encourage high school students to consider careers in a variety of transportation disciplines.
TEA-21 builds on the innovative financing initiatives begun under ISTEA to leverage Federal resources by encouraging private participation in the delivery of surface transportation infrastructure. These initiatives are intended to supplement the traditional Federal-aid grant assistance by increasing funding flexibility and program effectiveness. They establish pilot programs to test new finance mechanisms, and they extend or make permanent some of the tools already tested.
Direct Federal credit. The Act establishes a new program, under the Transportation Infrastructure Finance and Innovation Act (TIFIA), through which DOT can provide credit assistance on flexible terms directly to public-private sponsors of major surface transportation projects to assist them in gaining access to the capital markets. TIFIA provides a total of $530 million of contract authority over FYs 1999-2003, and authorizes the Secretary to collect fees from borrowers, to fund up to $10.6 billion of direct loans, loan guarantees, and lines of credit to support up to 33 percent of project costs. Eligible projects include highway and capital transit projects under Titles 23 and 49, international bridges and tunnels, intercity passenger bus and rail projects (including Amtrak and MAGLEV systems), and publicly owned intermodal freight transfer facilities on or adjacent to the NHS. Projects must cost at least $100 million or 50 percent of a States annual apportionments (except $30 million for ITS projects) and be supported by user charges or other dedicated revenue streams. The Secretary will evaluate and select eligible projects based on a variety of factors, including national significance, credit-worthiness, and private participation.
State infrastructure banks. The Act establishes a new pilot program for State infrastructure banks (SIBs) in which four StatesCalifornia, Florida, Missouri, and Rhode Islandmay participate. In a manner similar to the original pilot program established under the NHS Designation Act, the Secretary may enter cooperative agreements with these States allowing them to capitalize their banks with Federal-aid funds authorized and apportioned in FYs 1998-2003. Unlike the initial pilot, however, the new program:
(1) Removes the 10 percent limit on capitalization with eligible program categories.
(2) Does not require separate Highway and Transit accounts, but does require separate accounting for Interstate and Rail projects.
(3) Applies Title 23 Federal requirements to all SIB assistance, including those repayments financed from non-Federal sources.
(4) Institutes a 5-year disbursement constraint for capitalization grants. The 35 other States approved for participation in the original NHS Act pilot may continue in that program under current guidelines.
Federal matching flexibility. Several provisions are included in the Act that provide greater flexibility to States, MPOs, and local governments in satisfying the non-Federal matching requirements of a project. The Act removes a former requirement that Federal match be applied to each progress payment to the State, thereby providing the Secretary with discretion in developing policies to allow the Federal match to be adjusted during the life of the project. The Act establishes an annual program-wide approval process for STP projectsin place of the quarterly project-by-project approval processwhich provides the Secretary with discretion to apply the match requirement to the annual program as opposed to individual projects. The Act also provides more flexibility to States and local governments in meeting the non-Federal matching requirement by:
(1) Allowing the fair market value of land lawfully obtained by the State or local government to be applied to the non-Federal share of project costs.
(2) Allowing funds from other Federal agencies to be applied to the non-Federal share of recreational trails or transportation enhancement projects.
(3) Allowing funds appropriated to Federal land management agencies or to the Federal lands highway program to be applied to the non-Federal share of certain projects.
Tolls. For the first time, reconstruction or rehabilitation of a free Interstate highway segment and its conversion to a toll highway is allowed for three pilot projects. The purpose is to provide for the reconstruction or rehabilitation of Interstate highway corridors where improvement costs exceed available funding sources, and work cannot be advanced without the collection of tolls.
National Corridor Planning and Border Infrastructure Programs
The new National Corridor Planning and Development program will provide funds for the coordinated planning, design, and construction of corridors of national significance, economic growth, and international or interregional trade. Allocations may be made to corridors identified in Section 1105(c) of ISTEA and to other corridors using specified considerations.
The Coordinated Border Infrastructure program is established to improve the safe and efficient movement of people and goods at or across the U.S./Canadian and U.S./Mexican borders.
A total of $700 million is provided for these efforts for FYs 1999-2003, of which up to $10 million may be made available for the construction of transportation infrastructure necessary for law enforcement in border States.
Appalachian Development Highway System
This program provides funding for the construction of the highways and access roads that make up the Appalachian Development Highway System to promote economic development and establish a State-Federal framework to meet the needs of the 13-State region. A total of $2.25 billion is authorized for FYs 1999-2003, to be distributed based on the latest available cost-to-complete estimate.
To promote economic efficiency in the use of highways and support congestion reduction, air quality, energy conservation, and transit productivity goals, the Act provides authorizations totaling $51 million for FYs 1999-2003 for the Value Pricing Pilot program. This program replaces the Congestion Pricing Pilot program authorized by ISTEA, and provides funding to support the costs of implementing value pricing projects included in up to 15 new State and local value pricing programs. Funding to support implementation projects can be provided for no longer than 3 years from the time a project is implemented. Funds are also provided to support pre-implementation costs, including public participation costs, pre-project planning, and others for a maximum of 3 years.
Any value pricing project under this program may involve the use of tolls on the Interstate System. The Act provides that a State may permit vehicles with fewer than two occupants to operate in high occupancy vehicle lanes if such vehicles are operating as part of a value pricing program. Potential financial effects on low-income drivers shall be considered as part of any value pricing program, and mitigation measures to correct potential adverse financial effects on low-income drivers may be included as part of the value pricing program.
A total of $220 million is authorized over the 6-year period of the Act for construction of ferry boats and ferry terminal facilities. Of this amount, for each year from FYs 1999-2003, $10 million shall be made available to Alaska, $5 million to New Jersey, and $5 million to Washington. The Secretary is required to conduct a study of ferry transportation in the United States and its possessions; no time period is specified. In addition, $70 million of transit funds authorized for FYs 1999-2003 shall be available to Alaska and Hawaii for ferry boats and facilities.
National Historic Covered Bridge Preservation
TEA-21 authorizes a total of $50 million from the General Fund (requires appropriation) for FYs 1999-2003 for the preservation and rehabilitation of historic covered bridges. The Secretary is required to develop educational and research programs on covered bridge history and conduct research on techniques to protect historic covered bridges.
High Priority Projects
The Act includes 1,850 high priority projects specified by the Congress. Funding for these projects totals $9.4 billion over the 6 years of the Act with a specified percentage of the project funds made available each year. Unlike high priority projects in the past, the funds for TEA-21 projects are subject to the obligation limitation, but the obligation limitation associated with the projects does not expire.
Woodrow Wilson Memorial Bridge
For the Woodrow Wilson Memorial Bridge, the only federally owned bridge on the Interstate System, the Act authorizes $900 million for the reconstruction of the facility. The Federal share of the bridge component of the project will be 100 percent. An agreement regarding ownership of the new bridge, by a regional Authority, Maryland, Virginia, or the District of Columbia, is required before the funds are available for construction.
TEA-21 streamlines many aspects of the administration of the Federal highway programs and turns additional authority over to the State transportation agencies. A State may assume the Secretary of Transportations responsibilities for approval of plans, specifications, and estimates (PS&E), contract awards, and construction inspections under an agreement between the Secretary and the State. Previously two separate actionsthe PS&E approval and the execution of the project agreement to commit Federal funds to a projectare now combined. Large projects receive special treatment. An annual financial plan is required for any project with an estimated total cost of $1 billion or more. After regulations are developed, States may employ the design-build contracting technique for projects costing $50 million or more ($5 million for an ITS project). Conversion to metric on Federal-aid highway projects eligible for assistance under Title 23 becomes optional under TEA-21 through the indefinite extension of the grace period allowed by the NHS Designation Act.
Labor standards. TEA-21 continues vital labor protections for transportation workers, such as the Davis-Bacon prevailing wage guarantee. Contractors on Federal and federally funded construction projects are required to pay their workers no less than the wage rates that prevail in the local area on the same type of construction. The purpose of this requirement is to ensure that the Federal Government does not have the unintended and unwanted consequence of depressing workers wages.
TEA-21 requires approximately 75 reports and studies covering a wide variety of transportation-related issues. These reports include the impact of the DBE program, Interstate needs, an assessment of the CMAQ program, design-build contracting procedures, blowout resistant tires, new fixed guideway systems allocations, qualifications of foreign motor carriers, international trade traffic, and critical ITS standards. The majority of the reports are required to be prepared by the DOT, some in conjunction with other Federal agencies or affected parties. Some reports are the responsibility of other Federal organizations, such as the General Accounting Office or the National Academy of Sciences.