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Federal Highway Funding Under Surface Transportation Extension Act of 2004, Part III

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Through the end of July, the funding for the Federal Highway Administration will be based on two legislative acts: The Surface Transportation Extension Act of 2003 (STEA03, P.L. 108-88), as amended by the Surface Transportation Extension Act of 2004 (STEA04, P.L. 108-202), the Surface Transportation Extension Act of 2004, Part II (STEA04-II, P. L. 108-224), and the Surface Transportation Extension Act of 2004, Part III (STEA04-III, P.L. 108-263), signed June 30, 2004) and the Consolidated Appropriations Act, 2004 (P.L. 108-199).

Contract Authority

STEA04-III authorizes contract authority for the first 10 months of FY 2004 for FHWA programs. In most cases, the amounts authorized are for 10/12ths of the amounts authorized for FY 2003. The amounts authorized include the amounts previously authorized by STEA03, STEA04, and STEA04-II for each program. The highway contract authority made available under STEA04-III, except for the portion of Minimum Guarantee that is exempt from the obligation limitation, is subject to a 0.59 percent across-the-board reduction found in the Consolidated Appropriations Act. The dollar amounts in the discussion below are the full amounts authorized, before the 0.59 percent deduction.

Formula Programs

Contract authority is authorized for the FHWA's formula programs. A separate authorization is provided for metropolitan planning, but a single lump sum of contract authority is authorized for all other formula programs. This lump sum will be apportioned among the states based on the FY 2003 formula obligation limitation distribution. The amount for each State will then be programmatically distributed among the formula programs, including minimum guarantee, based on the amounts the State received for each program for FY 2003. The apportionments will be subject to the various penalty provisions. The metropolitan planning funds will be distributed under the usual formula.

Allocated Programs

Amounts are also authorized for individual allocated programs and for FHWA's administrative expenses. In most cases, the amounts authorized are for 10/12ths of the amount authorized for FY 2003. Programs normally funded by deductions off the top of the authorizations for apportioned programs, like FHWA administrative expenses and the Bridge Discretionary Program, are authorized separately under STEA04-III.

Administrative Funding

The amounts authorized for FHWA administrative expenses include funds for the administrative expenses of the Appalachian Regional Commission (ARC) for the Appalachian Development Highway System and to reimburse the Office of the Inspector General (OIG) for audit costs. The amount authorized is expected to be the total available to FHWA for the full year. It is equal to the Limitation on Administrative Expenses set in the Consolidated Appropriations Act plus the amounts usually provided to the ARC and OIG.

Obligation Limitation

The Consolidated Appropriations Act, 2004 set the obligation limitation for Federal-aid highway and highway safety construction at $33,843,000,000, subject to a 0.59 percent across-the-board cut. Under STEA04-III, within the full year obligation limitation set in the DOT Appropriations Act, obligations for all Federal-aid highway programs during the 10-month period (October 1, 2003 through July 31, 2004) are limited to $28,202,500,000, not including $532,500,000 for Minimum Guarantee that is exempt from the obligation limitation.

Transfers of Unobligated Apportionments

STEA04-III makes no changes to the transfer flexibility allowed by STEA03 as amended by STEA04. States may transfer apportioned funds subject to the obligation limitation among programs and suballocations. Available for transfer are NHS, IM, STP, Bridge, and STP, except that STP funds setaside for safety, transportation enhancements and for urbanized areas over 200,000 population may not be transferred. CMAQ funds are not eligible for transfer as they were under STEA03 as originally enacted. Transferred funds are subject to the provisions of the program to which transferred (except transfers to STP are not subject to suballocation). Funds so transferred are subject to repayment to the programs from which transfers are made as soon as practicable after enactment of a reauthorization bill.

Section Analysis
P.L. 108-263 - The Surface Transportation Extension Act of 2004, Part III

The highway provisions in the legislation amend the Surface Transportation Act of 2003 (P.L. 108-88), the Transportation Equity Act for the 21st Century (P.L. 105-178) and Title 23, United States Code.

Sec. 1. Short title.

This act may be cited as the Surface Transportation Extension Act of 2004, Part III.

Sec. 2. Advances.

Advance Authorizations of Contract Authority

The bill provides funding for Federal-aid highway apportioned programs except Metropolitan Planning (see section 4) for 10 months (from October 1, 2003, through July 31, 2004). Funding is provided as an extension of TEA-21 (thus, TEA-21 conditions such as DBE will apply), and as an advance against full year funding for 2004 that will eventually be provided in a longer-term reauthorization bill. No new programs are authorized in the extension bill.

For Federal-aid highways and highway safety construction programs, $26,998,288,667 in contract authority is authorized, to be apportioned as a lump sum to each State based on the State's relative share of the 2003 formula obligation limitation. Each State's lump sum of contract authority is to be divided programmatically based on the State's relative share of the FY 2003 apportionment for each of the following categories

  • National Highway System (NHS)
  • Interstate Maintenance (IM)
  • Surface Transportation Program (STP)
  • Bridge Program
  • Congestion Mitigation and Air Quality Improvement Program (CMAQ)
  • Recreational Trails
  • Appalachian Development Highway Program (ADHS)
  • Minimum Guarantee (Minimum Guarantee funds in excess of $2,333,333,333 will be programmatically distributed to the IM, NHS, STP, Bridge, and CMAQ programs; the remainder will remain as Minimum Guarantee funds with STP eligibilities as in current law.)

The following deductions and set-asides will not apply to these funds, because these activities are separately authorized in STEA04-III --

  • Federal Highway Administration Administrative Expenses [104(a)(1)(A)]
  • Federal Motor Carrier Safety Administration [104(a)(1)(B)]
  • Territorial Highway Program [104(b)(1)(A)]
  • Alaska Highway [104(b)(1)(A)]
  • Operation Lifesaver [104(d)(1)]
  • Rail Crossing/Hazard Elimination in High Speed Rail Corridors [104(d)(2)]
  • Metropolitan Planning [104(f)(1)]
  • Recreational Trails Program Administration [104(h)(1)]
  • Interstate Maintenance Discretionary Program [118(c)(1)]
  • On-the-Job Training/Supportive Services [140(b)]
  • DBE Training [140(c)]
  • Bridge Discretionary Program [144(g)(1)]

Separate contract authority is provided for the above activities and other allocated programs (see Sections 3-5).

Obligation Limitation

Within the full year obligation limitation set in the DOT Appropriations Act for FY 2004, STEA04-III limits obligations from the Federal-aid highway program during the 10-month period to $28,202,500,000, not including $532,500,000 for Minimum Guarantee that is exempt from the obligation limitation. The limitation applies to formula programs, allocated programs and administrative expenses.

Generally, STEA04-III directs that the available obligation limitation be distributed according to section 110 of Division F of the Consolidated Appropriations Act, except that the obligation limitation for each program, project, or activity will be the greater of the amount made available under STEA04-III or 10/12ths of the amount made available under the DOT Appropriations Act.

No obligations may be made after July 31, 2004 until enactment of a law reauthorizing the Federal-aid Highway Program.

Sec. 3. Administrative Expenses.

STEA04-II authorizes $343,628,000 in contract authority for administrative expenses of the Federal Highway Administration, including the Appalachian Regional Commission's administrative costs for the Appalachian Development Highway System and audit cost reimbursement for the Office of the Inspector General.

Sec. 4. Other Federal-aid Highway programs.

Contract authority is provided for other programs for the 10-month period of October 1, 2003, through July 31, 2004, as follows:

  • Indian Reservation Roads (IRR) - $229,166,667 (with a minimum $10,833,333 for IRR bridges) *
  • Public Lands Highways - $205,000,000 *
  • Park Roads and Parkways - $137,500,000 *
  • Refuge Roads - $16,666,667 *
  • Borders and Corridors. - $116,666,667
  • Ferry Boats & Terminals - $31,666,667, with setasides for projects on the NHS in Alaska ($8,333,333), New Jersey ($4,166,667), and Washington ($4,166,667).
  • Scenic Byways - $22,916,667
  • Value Pricing - $9,166,667
  • Highway Use Tax Evasion - $4,166,667
  • Commonwealth of Puerto Rico Highway Program - $91,666,667
  • Bicycle/Pedestrian Clearinghouse - $416,667
  • Transportation and Community and System Preservation Pilot Program - $20,833,333
  • Transportation Infrastructure Finance and Innovation (TIFIA) - $116,666,667, with up to $1,666,667 for TIFIA administrative costs. The principal amount of credit instruments made available during the 10-month period is limited to $2,166,666,667.
  • Surface Transportation Research - $87,500,000
  • Technology Deployment Program - $45,833,333, with $4,142,083 for the Advanced Technology Pilot Program (low-speed Maglev)
  • Training and Education - $17,500,000
  • Bureau of Transportation Statistics - $25,833,333
  • Intelligent Transportation System (ITS) Standards, Research, Operational Tests, and Development. - $95,833,333
  • ITS Deployment - $103,333,333
  • University Transportation Research - $22,500,000
  • Metropolitan Planning - $200,000,000
  • Territorial Highway Program - $30,333,333
  • Alaska Highway - $15,666,667
  • Operation Lifesaver - $416,667
  • Bridge Discretionary Program - $83,333,333
  • Interstate Maintenance Discretionary Program - $83,333,333
  • Recreational Trails Program Administrative Costs - $625,000
  • Railway-highway Crossing Hazard Elimination in High Speed Rail Corridors $4,375,000, with $208,333 to be available for improvements to the Minneapolis/St. Paul - Chicago segment of the Midwest High Speed Rail Corridor
  • DBE Training - $8,333,333
  • On-the-Job Training/Supportive Services - $8,333,333

* There will be no administrative takedown (FHWA or FMCSA) from Federal Lands Highways funds.*

Sec. 5. Extension of Highway Safety Programs.

Extends from October 1, 2003 through July 31, 2004, the two safety grant programs that are within the Federal-aid highway program:

  • Safety Incentive Grants for Use of Seat Belts - $93,333,333
  • Safety Incentives to Prevent Operation of Motor Vehicles by Intoxicated Persons - $100,000,000

Sec. 6. Sport Fishing and Boating Safety.

This section extends provisions related to programs funded from the Aquatic Resources Trust Fund.

Sec. 7. Extension of Federal Transit Programs.

This section extends from October 1, 2003 through July 31, 2004 the programs of the Federal Transit Administration.

Section 8. National Highway Traffic Safety Administration Programs.

This section extends National Highway Traffic Safety Administration program from October 1, 2003 through July 31, 2004.

Sec. 9. Federal Motor Carrier Safety Administration Program.

This section extends from October 1, 2003 through July 31, 2004 the programs of the Federal Motor Carrier Safety Administration.

Sec. 10. Extension of Authorization for Use of Trust Funds for Obligations under TEA-21.

This section amends the Highway Trust Fund provisions of the Internal Revenue Code to authorize expenditures from the HTF before August 1, 2004, and authorizes expenditures to carry out this Act. The section also adopts a temporary rule that says, for Byrd Test purposes, the imposition of relevant taxes are assumed to have been extended through the end of FY 2006 along with the deposit of such taxes in the Highway Trust Fund.

06-23-2004
HPLS-10

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