Congress & the FY 2003 Budget

Legislative Update

March 10, 2002

Bush Budget Request Honors the TEA-21 Funding Guarantees

On February 4, the Bush Administration released its Fiscal Year 2003 budget proposal, which would fund the federal transit program at $7.2 billion, the amount guaranteed in the Transportation Equity Act for the 21st Century (TEA-21). The Administration budget request acknowledges transit's high ridership levels, as well as its role in reducing traffic congestion. The budget proposes to fund two new programs: the New Freedoms Initiative ($ 100 million for grants for alternative methods to promote access to transportation, and $45 million for a pilot program to promote innovative transportation solutions for persons with disabilities); and $6 million to support DOT efforts to coordinate delivery of transportation services with environmental protections and enhancements. As it did last year, the President's budget proposes to reduce the federal matching share for new starts projects to 50% beginning in FY 2004. The chart below shows program funding levels.

Program	FY 2002 Appropriation (Millions)	FY 2003 Administration Budget Request (Millions)	Change from FY 2002 Appropriations to FY 2003 Budget Request
Program	FY 2002 Appropriation (Millions)	FY 2003 Administration Budget Request (Millions)	Dollars (Millions)	Percent
Capital Investment	2,841.0	3,036.0	195.0	6.9 %
New Starts	1,136.4	1,214.4	78.0	6.9 %
Fixed Guideway Modernization	1,136.4	1,214.4	78.0	6.9 %
Bus and Bus Facilities	(a) 568.2	607.2	246.8	6.9 %
Formula Funds	3,592.0	3,839.0	246.8	6.9 %
Urbanized Area	3,216.0	3,308.0	92.0	2.9 %
Rural	224.6	231.0	6.4	2.9 %
Elderly and Disabled Persons	84.6	87.0	2.4	2.9 %
Clean Fuels	(a) 50.0	50.0	0.0	0.0 %
Winter Olympic/Paralympic Games	5.0	---	- 5.0	-100.0 %
Alaska Railroad	4.8	4.8	0.0	0.0 %
Over-the-Road Accessibility	7.0	7.0	0.0	0.0 %
Environmental Enhancement	---	6.0	6.0	New
New Freedom Initiative	---	145.0	145.0	New
Job Access and Reverse Commute	125.0	150.0	25.0	20.0 %
Planning and Research	116.0	122.0	6.0	5.2 %
University Transportation Centers	6.0	6.0	0.0	0.0 %
FTA Administration	67.0	76.6	9.6	14.3 %
Total	6,747.0	7,229.6	482.6	7.2 %

(a) Does not show $50 million Clean Fuels Formula Program funds as transferred to Bus and Bus Facilities Capital Investment Program in the FY 2002 Appropriations Law in order to maintain comparability with FY 2003
Administration Budget Request.

Negative RABA Hurts Highway Program Funding, But Recovery Efforts Underway

The budget proposes an $8.6 billion reduction about 27 percent in highway funding for FY 2003. This decrease is based on the Treasury's estimated decreases in Highway Trust Fund revenues. The Revenue Aligned Budget Authority (RABA) provision in TEA-21 requires highway funding to be adjusted each year to reflect the most recent estimates of revenue collections. In the last few years RABA has produced substantial increases in highway funding levels in FY 2002, RABA adjustments increased highway funding by $4.5 billion above the TEA-21 baseline. For FY 2003, RABA adjustments would produce a reduction of $4.4 billion below the authorized baseline level. During recent congressional hearings on the issue, there has been much discussion about how to minimize the wide funding swings produced by RABA in the upcoming reauthorization of TEA-21.

On February 7, just days after the release of the President's budget, the Highway Funding Restoration Act (H. R. 3694 / S. 1917) was introduced. House Transportation & Infrastructure Committee Chairman Don Young (R-AK) and Senate Environment & Public Works Committee Chairman Jim Jeffords (I-VT) introduced identical legislation in both the House and Senate to restore highway funding to at least $27.7 billion in FY 2003. Currently, there are 280 cosponsors in the House and 58 in the Senate. State and local officials expressed their strong support for the legislation at a February 28 Highways and Transit Subcommittee hearing, calling it critical to economic recovery in the states. In a February 25 letter to the White House, APTA and seven other partners supported a restoration of such funds.

Congressional Recess

The U. S. House and Senate will recess for two weeks, beginning March 22. While your Representatives and Senators are in their districts, we urge you to invite them to visit your business or transit property. The recess ends on April 8 when Congress returns to Washington.

New Legislation

Senator Baucus Addresses Gasohol Taxes

Introduced by Senate Finance Committee Chairman Max Baucus (D-MT) on March 1, S. 1979, the Energy Tax Incentives Act of 2002, covers a wide range of energy and fuel issues. Included in the bill are provisions to transfer 2.5 cents of the gasohol tax, which currently goes to deficit reduction, into the Highway Trust Fund.

Streamlining Legislation from Transportation & Infrastructure Committee

T& I Committee staff have drafted a bill, to be called the Expediting Project Delivery to Improve Transportation and the Environment Act, also known as the ExPDITE Act, that would streamline highway and transit project delivery. The draft bill is being circulated for comment prior to introduction in the House of Representatives. Many of the concepts in the bill have been recommended by industry groups including APTA and DOT agencies. The transit and highway provisions include:

Provisions that guide a project through the NEPA process, including designation of DOT as the lead agency for highway and transit projects; other interested agencies would be designated as participating agencies and would be responsive to the lead agency.
DOT would be required to keep projects on a schedule with standards and milestones for agency comments, comment periods with deadlines which agencies must meet, and Congressional notification when deadlines are not met.
Section 4( f): This historic and parkland preservation provision predates NEPA and most environmental laws and would be amended to spell out specific protection standards.
DOT would survey and report to Congress on interagency cooperation on highway and transit projects.
The Secretary would develop a comprehensive program to stimulate program management and oversight.
Drug and Alcohol Testing: Transit providers covered by more than one testing program would be subject to the testing program of only one DOT agency.
Grants Processing: Would allow transit grant recipients under the Rural Formula program or the Elderly and Disabled program, who receive grants under the Discretionary Bus and Bus Facilities program or the
Job Access and Reverse Commute program, to administer those grants under the standards of their regular formula program.
Bus Procurements: A pilot program would be established allowing transit agencies to purchase large transit buses using the General Services Administration's purchasing schedule.

Rail Issues: TRAIN 21 and Amtrak

Representative Clement Circulates Dear Colleague Letter on TRAIN 21

Congressman Bob Clement (D-TN), Ranking Member on the House Railroads Subcommittee, has written to all members of the U. S. House of Representatives requesting their endorsement and cosponsorship of H. R. 2654, the Transit Rail Accommodation Improvement & Needs Act for the 21st Century. Congressman Clement indicates that this legislation "presents a common sense process to resolve a growing number of disputes between freight railroads and mass transportation authorities". APTA strongly supports this legislation, and an APTA letter of endorsement was attached to Representative Clement's letter.

Railroads Subcommittee Hears From Amtrak Reform Council

On February 14, the House Railroads Subcommittee held a hearing to examine the Amtrak Reform Council (ARC) recommedations for the restructuring of Amtrak. The ARC restructuring plan, released on February 7,
focuses on three components: a new business model for Amtrak, the option to introduce competition, and a proposal to gain secure funding sources. The report also discusses the ideas of a passenger rail trust fund and infrastructure financing through federal tax-credit bonds.

Following the hearing, both Transportation & Infrastructure Chairman Don Young (R-AK) and Railroads Subcommittee Chairman Jack Quinn (R-NY) shared their thoughts on the matter. Young, who testified before the Subcommittee, criticized Amtrak for complacency since the 1997 Amtrak Reform and Accountability Act, which set out expectations for the agency's eventual self-sufficiency. He praised the ARC for its work and analysis. Quinn, however, adopted a different tone, noting that "as lawmakers, (we) must clearly define our expectations of passenger rail service in this country." Quinn called for a thorough examination of the issue of passenger rail, adding that "if Congress continues to turn a blind eye to Amtrak, we face the prospect of disintegration of passenger rail service."

McCain Legislation Would Restructure Amtrak

On February 15, Senator John McCain (R-AZ), the Ranking Member of the Senate Commerce Committee, introduced S. 1958, the Rail Passenger Service Improvement Act. Following are some of the key provisions of this complex and comprehensive bill:

Amtrak would be split into three for-profit businesses: Amtrak operations, Amtrak maintenance, and Intercity Rail Operations.
Each subsidiary would be privatized within four years.
States would have the flexibility to use funds from the Highway Trust Fund and Mass Transit Account for intercity rail.
Funds would be authorized to improve the Northeast Corridor. Safety and security needs can be 100% federally funded, but other improvements would need a minimum 20% match from states. Amtrak would have to surrender its long term lease of the Northeast Corridor as a requirement of receiving any federal funding.
A new board (the Amtrak Control Board) would be appointed by the President to direct Amtrak's operational restructuring, to approve budgets, and oversee privitization. This would be in addition to the current Amtrak Board, which would continue to exist.
U. S. DOT would award franchise rights to provide passenger rail service. The passenger operator would need to demonstrate that it has negotiated the necessary access agreements or is actively engaged in good faith negotiations. Further, the operator would need to demonstrate that the award of a passenger rail franchise would not downgrade the service of a freight operator or its ability to serve its customors. (This contrasts with current law, which puts the burden of proof on the freight operator).
To administer this program the bill would create an Office of Rail Passenger Development with FRA. Until now such issues have been under the Surface Transportation Board, and prior to that the ICC.

Hollings to Introduce Alternative Amtrak Bill

On March 6, Senate Commerce Chairman Ernest F. Hollings (D-SC) introduced S. 1991, a bill to finance Amtrak for the next five years. According to an aide, the bill is the first of a two-step process, first deciding on the shape of a passenger rail system and then deciding how to fund it. The bill would authorize $4.6 billion in annual funding and would retain Amtrak as the operator of all national passenger service. His proposal would make the Northeast Corridor a separate financial unit under Amtrak and direct all of its operating profits to be reinvested in the corridor and not go to subsidize outside routes. It would fund billions of dollars in postponed maintenance and capital needs on the corridor. Long-distance routes would receive a separate, $580 million annual budget. Below are some of the key provisions of anticipated legislation:

The Northeast Corridor would get $1.31 billion annually, all for capital projects including expected growth. The bill expects that ticket revenues would cover operating expenses.
$1.55 billion annually would go to the development of other high-speed corridors across the country.
Long-distance trains would receive $580 million annually, with $360 million designated specifically for operating expenses.
$270 million would go toward state-supported routes and short-distance routes.
$1.3 billion would be authorized for rail security, including life-safety upgrades in the rail tunnels in Baltimore and New York, and preliminary design work for tunnels to replace the 125-year-old ones leading into Baltimore from its south..
Expansion of the Railroad Rehabilitation and Financing Program, providing $35 billion in loans and loan guarantees.

Amtrak Submits Legislative & Grant Proposal for FY 2003

Amtrak has asked Congress for $1.2 billion in FY 2002, double the budget proposed by the Bush Administration. Amtrak has stated that this will "preserve options and avoid further long-term harm to the system while policy-makers consider the future of the passenger rail system." Amtrak identified a number of issues it would like to consider in the reauthorization process including a long-term source of funding; high-speed corridor development; excess Railroad Retirement; wholesale purchase of electric power; passenger train priority enforcement; tax exemption for Amtrak-leased lines; and removal of litigation from state to federal court. Also proposed for this year's legislative agenda is Amtrak common stock, and rail security legislation.

Amtrak Leadership Changes

On Friday, February 22 the Amtrak Board unanimously elected John Robert Smith to be the new Chairman of Amtrak. Michael Dukakis, who had been serving as Acting Chairman since the departure from the Board of former Wisconsin Governor Tommy Thompson, will continue to serve as Vice Chairman. John Robert Smith has served on the Amtrak Board since June 1998, and is the mayor of Meridian, Mississippi. On March 7, Amtrak President and CEO George Warrington announced he will soon resign to become Executive Director of NJ Transit after serving at Amtrak for four years.

For further information about any issues in the APTA Washington Report, please contact Genesee C. Adkins at (202) 496-4810 or at gadkins@apta.com.

Contacting Members of Congress

Mail deliveries to Congress are still subject to delay. E-mail is an effective way to make sure your message to Congress is received in a timely fashion.

To e-mail Members of Congress

Go to http://www.apta.com/
Click on "Government Affairs"
Then click on "Congressional Information"
Then click on "Members of Congress." Follow the directions for e-mail and fax addresses of Members of Congress. You can also send an e-mail message directly from the site.