Money Matters: Appropriations & the Supplemental

Legislative Update

June 28, 2002

In the Queue: Transportation Appropriations

While Congress remains focused on homeland security and passage of the 2002 Supplemental Appropriations Bill (see below), the Fiscal Year (FY) 2003 Department of Transportation (DOT) Appropriations Bill remains a lower priority. Of the 13 annual appropriations bills, only the Defense Appropriations had passed in the House before the July 4th recess.

The good news is that the President's FY 2003 budget proposal recommends $7.2 billion for transit, the guaranteed level under TEA 21, and both the House and Senate budget resolutions would honor the guaranteed level for the federal transit program. In fact, the Senate version passed by the Budget Committee and awaiting full Senate consideration would provide an additional $100 million for new start projects. Stay tuned!

To help transit operators plan better, FTA has posted on its website estimated FY 2003 formula apportionments based on the new 2000 Census data and using transit funding proposed in the FY 2003 Administration budget request. They can be viewed by clicking on the "Grantees" heading on FTA's website -- http://www.fta.dot.gov/ -- followed by clicking on the "Census 2000 Information" title.

Review Information Online

For the full text or bill status of legislation discussed in this report, go to http://thomas.loc.gov/At the top of the page, note the box for searching by bill number. Type in the bill number (for example: "H. R. 3694" or "S. 1917") and hit the Search button. After the page loads, click on the link to the Bill Summary & Status file. From here, you can find the sponsor, lastest major action, title, and links to other related information. In addition, visit Committee websites to review testimony. Finally, the APTA website includes copies of APTA documents discussed in this report.

2002 Emergency Supplemental Spending Bill

Call to Action

With the reauthorization of TEA 21 approaching, APTA
members should invite U. S. Senators and Representatives
to their properties to see the results of TEA 21 investments.

In March the Administration submitted an FY 2002 emergency supplemental request of $27.1 billion for defense and homeland security funds. House and Senate appropriators continue to negotiate on spending levels for the FY 2002 Supplemental Appropriations Bill. The House version, passed May 24, would provide $29.6 billion; the Senate version, passed June 7, would provide $31.6 billion. Both versions (H. R. 4775/ S. 2551) far exceed the President's March 21 request. President Bush has threatened to veto any supplemental spending bill that exceeds $27.1 billion.

Both House and Senate versions include the same number $ 1.8 billion for transit capital grants to replace and rebuild public transportation facilities affected by the terrorist attacks on New York City.

The Senate version includes a rescission of $320 million in highway budget authority, in an attempt to offset other spending provisions. House and Senate authorizers issued a prompt and strong written response, warning against interfering with the authorizers' jurisdiction.

Rounding the Bend: Other Legislation

Highway Funding Restoration on its way to Full Senate

In light of a "RABA shortfall" as reported in previous APTA Washington Reports, the Administration's FY 2003 budget would fund the FHWA program at $23.3 billion, $4.4 billion below the FY 2002 level. In response, Congress is working to restore FY 2003 highway funding. Last Monday the Senate Environment & Public Works (EPW) Committee passed an amended Highway Funding Restoration Bill (S. 1917) out of committee. The bill now awaits consideration before the full Senate. If passed there, it will proceed to conference with the House-passed version, H. R. 3694. The House bill sets highway funding at $27.7 billion, the authorized amount for FY 2003 under TEA 21. The amended EPW version not only sets the guaranteed level at $27.7 billion, but also sets the obligation limit at $28.9 billion, an additional $1.2 billion over the House-passed bill. APTA continues to work with its highway partners in support of efforts to restore highway funding levels.

Finance Chairman to Introduce MEGA Trust Act

Senate Finance Chairman Max Baucus (D-MT) is expected to introduce legislation soon that would reauthorize federal gas and related taxes that go into the Highway Trust Fund and the Mass Transit Account through 2011. The draft bill would also transfer 2.5 cents of the gasohol tax which currently goes to the general fund for deficit reduction back to the trust fund and repay with general funds revenues lost to the Trust Fund due to subsidies for ethanol. It would also require interest to be paid on Trust Fund balances, (including the Mass Transit Account). Chairman Baucus, John Warner (R-VA), Tom Harkin (D-IA), Mike Crapo (R-ID), and Tom Daschle (D-SD), have sent a "Dear Colleague" letter seeking additional co-sponsors for the bill. The bill is to be called the "Maximum Economic Growth for America Through the Highway Trust Fund Act," or the "MEGA Trust Act." Because the bill has not yet been introduced, exact bill language is not yet available.

Energy Bill Conferees to Meet

House and Senate conferees 61 in total are expected to meet this week to begin addressing differences in their respective versions of the Energy Policy Act of 2002 (H. R. 4). The Senate appointed its conferees on May 1 and the Speaker appointed House conferees on June 12. The bill contains several contentious provisions, including the Arctic National Wildlife Refuge (ANWR) oil development issue. With so many contested provisions many of them politically charged it is not clear that the legislation will be approved this year.

Some provisions in the energy bill of particular interest would:

Transfer 2.5 cents of the gasohol tax, which currently goes to deficit reduction, into the Highway Trust Fund. The provision is included in the Senate-passed version, but not the House-passed version.
Direct the Secretary of DOT to establish an alternative fuel vehicle competitive grant pilot program for up to 15 state and local governments and metropolitan transportation authorities.
Direct DOT to launch a fuel cell bus demonstration program to address hydrogen production, storage, and use in transit bus application.
Direct DOT to establish a public private research partnership for the development and demonstration of locomotive technologies that increase fuel economy, reduce emissions, improve safety, and reduce costs.

Senate Passes Terrorism Insurance Bill

The Senate has passed S. 2600, which would create a taxpayer-financed program to help commercial property and casualty insurance companies cover claims after a terrorist attack. The bill now goes to conference, where differences between S. 2600 and the House version of the legislation (H. R. 3210) must be ironed out. Differences between the bills are significant; for example, the House version would require insurance companies and commercial policyholders to reimburse the Federal Government, while the Senate bill would not.

The legislation was initiated because many insurers have eliminated terrorism coverage from commercial insurance policies. This lack of insurance coverage has stalled some construction projects. Both versions of the legislation include language that permits the Secretary of the Treasury to evaluate whether self-insured governmental entities may participate in the program as well. APTA is seeking clarification that this provision applies to publicly owned transit systems.

Rail Update

Administration Discusses Short-Term Funding to Avert Amtrak Financial Crisis

On June 26, U. S. Transportation Secretary Norman Mineta and Amtrak Chairman John Robert Smith announced the framework for a possible agreement to address Amtrak's short-term financial crisis. Although few details were included in the joint statement that was released, reports were that U. S. DOT would lend Amtrak $100 million about half of what Amtrak said it needed to operate until the start of the next fiscal year in October. The agreement would include several conditions:

Improve Amtrak's financial discipline and performance.
Make Amtrak's financial and operating performance transparent to the public.
Provide federal policymakers with a better understanding of Amtrak's long-term assets and liabilities, and its cost control and revenue options.

The June 26 tentative agreement is the latest in a two-week rollercoaster wherein Amtrak has faced a liquidity crisis that threatened to shut-down long distance and many commuter train routes in early July.
Because Amtrak's auditors have not been able to affirm Amtrak as a "going concern," Amtrak has been unable to access its commercial line of credit. This could cause Amtrak to begin to run out of cash to operate its basic system and possibly to fulfill its commuter contracts.

On June 24, APTA wrote to U. S. Transportation Secretary Norman Mineta expressing concern about the current impasse and the fact that any disruption to Amtrak could affect 1.2 million daily commuter rail riders.
The letter urged DOT to take immediate action to prevent an Amtrak shutdown to provide time for policy makers to address longer-term national rail passenger policy matters.

House T& I Chairman Don Young (R-AK) said he would consider a direct appropriation for Amtrak under certain conditions. Chairman Young and House Railroads Subcommittee Chair Jack Quinn (R-NY) also introduced H. R. 5020 on June 26 to authorize the federal Surface Transportation Board to direct the continuation of commuter and freight rail service in the event of an Amtrak shutdown. Titled the "Emergency Directed Rail Service Act," the legislation also calls for the development of contingency plans to keep commuter and freight rail service operating in the event Amtrak shuts down at a later date.

Also on June 26, House Transportation and Infrastructure Committee Chairman James Oberstar (DFL-MN) and House Railroads Subcommittee Ranking Member Bob Clement (D-TN) introduced legislation to authorize and direct U. S. DOT to provide a loan guarantee of $270 million to Amtrak.

Amtrak, High Speed Rail Legislation / Administration Position

Pending legislation in the House and the Senate take differing views of the future direction of Amtrak and high speed passenger rail. In the Senate, S. 1951, introduced by Senate Commerce Committee Chairman Ernest Hollings (D-SC) and titled the National Defense Rail Act, would authorize $14.5 billion over the next three years for Amtrak operations, corridor development, and infrastructure renewal. House legislation, H. R. 2950, introduced by House Transportation and Infrastructure Chairman Don Young (R-AK) and titled the Railroad Infrastructure Development Act for the 21st Century (RIDE-21) would look to states to issue special tax credit financing for the development of high-speed rail corridors. Both bills are pending in their respective chambers.

Further, on June 20, Secretary Mineta announced the Bush Administration's long-range views on Amtrak and intercity rail, focusing on five key points:

Our intercity passenger rail network must transition to a system dictated by fundamental economics without Federal operating support.
Amtrak should transition into a pure operating company with a gradual separation of train operations from infrastructure ownership.
Market principles should be introduced into passenger rail services, with competition for provision of certain routes.
A new intercity passenger rail policy should be based on a strong foundation of state and federal planning that clearly identifies costs, benefits and funding approaches of passenger rail, designs services that complement and connect to other passenger modes, and thinks through practical implementation problems such as environmental and operational issues before launching projects.
Management and control of the Northeast Corridor must be carefully evaluated. The multiple states and corridor users need time to identify practical solutions to these issues.

APTA Intercity Rail Principles

APTA's Intercity Passenger Rail Policy Review Task Force, under the leadership of Pete Cannito, APTA's Vice Chair Commuter and Intercity Rail, has crafted a list of ten principles to guide APTA during the debate over intercity rail policy. After review by several committees, these principles have been sent to APTA's Executive Committee for approval.

House Holds Hearing on Railroad Safety

On June 6, the House Railroads Subcommittee held a hearing on Recent Derailments and Railroad Safety. The hearing focused on several rail safety issues, notably positive train control, enhanced track inspection, mitigation of worker fatigue, and improvement of rail infrastructure. Prior to the hearing Congressman James Oberstar (DFL-MN) introduced legislation to reauthorize the federal Railroad Safety Act. His legislation has been designated as H. R. 4761, the Railroad Safety Reform Act of 2002. Congressman William Lipinski (D-IL) called for the creation of a railroad trust fund to support rail infrastructure needs, such as grade separations and relief from rail congestion. He suggested the 4.3 cents diesel fuel tax that railroads currently pay into the general fund as a possible funding source for such rail infrastructure improvements. Marion Blakely, Chair of the National Transportation Safety Board, highlighted positive train control as one of recommendation issues on NTSB's Most Wanted List. Senate hearings on railroad safety are being planned as well.

Of Interest: Recent Hearings

House T& I Highways & Transit Subcommittee Capital Investment Grants

On June 20, the House Highways & Transit Subcommittee heard from a panel of witnesses on the subject of capital investment grants under the FTA, covering the New Starts, Rail Modernization, Clean Fuels, and Bus & Bus Facility programs. Witnesses delivered a resonating message: maintain the federal funding guarantees and retain the budgetary firewalls. Paul Skoutelas, CEO of the Port Authority of Allegheny County and APTA's Vice Chair for Management and Finance, emphasized the importance of the current 20% local match requirement, noting that raising the local share contribution would decrease the number of projects states could support. William Volk, GM of the Champaign-Urbana Mass Transportation District and APTA's Vice Chair for Small Operations, discussed several concepts being developed by APTA's Reauthorization Task Force and expressed concern about earmarking of Section 5309 funds.

House T& I Highways & Transit Subcommittee Intermodalism

DOT Assistant Secretary for Transportation Policy Emil Frankel testified before the Highways & Transit Subcommittee on June 18. The hearing, entitled "Intermodalism: Moving America's Goods and People," provided a forum for a variety of perspectives. The second panel included representatives from the trucking, intercity bus, freight rail, and port industries, in addition to officials from local planning and transportation commissions. While many witnesses discussed goods movement, a large share of the questions from the Committee focused on transit. Members expressed interest in incentives for states that exceed the 20% local match minimum and in adjusting the capital formula to reflect increased demand in rural public transportation service.

Senate Banking TEA 21: A National Partnership

On June 13, the Housing and Transportation Subcommittee of the Senate Banking Committee heard from local elected leaders on their experiences with TEA 21. Detroit Mayor Kwame Kilpatrick asked the Senators to preserve TEA 21's guaranteed funding provisions and expand opportunities for flexible funding scenarios. He also supported APTA's proposal to increase federal transit funding to $14 billion. Boise Mayor H. Brent Coles endorsed the current 80% federal match for state transportation projects, explaining that smaller, rural communities might find serious challenge in meeting a higher local threshold. The committee also conducted a hearing on June 26 on "TEA 21: Investing in our Economy and Environment."

House Transportation Appropriations Subcommittee The TSA Budget

Under Secretary for Transportation Security John Magaw and DOT Inspector General Kenneth Mead fielded questions from Subcommittee Chairman Hal Rogers (R-KY) at a packed hearing last Thursday. Chairman Rogers and Ranking Member Martin Olav Sabo (DFL-MN) expressed serious concerns about the Transportation Security Administration's progress toward its benchmarks. While Magaw attempted to defend numbers in the agency's FY 2003 budget request and its FY 2002 supplemental request, Mead presented his analysis of TSA's long-term outlook. Beyond budget concerns, Mead voiced concern over the creation of the new Department of Homeland Security. While the two entities could complement each other, he asserted that the potential for duplicated positions is a serious possibility.

Upcoming Meetings

State Public Transit Partnerships Conference July 8-10

Don't forget to register for the 2002 State Public Transit Partnerships Conference scheduled July 8-10 at the Portland Oregon Hilton. The conference is a joint effort of APTA, AASHTO, CTAA and ATSC. The annual event attracts state department of transportation officials, state transit association leaders, and transit system representatives interested in the important role states play in support of public transportation. For a limited time, conference and hotel registration is still available at www. transportation. org. For additional information, contact Rich Weaver at (202) 496-4809.

APTA Annual Meeting & EXPO 2002 in Las Vegas, NV Register Now!

Get a jump start! APTA's Annual Meeting will provide an array of policy, management, operations and technical sessions and General Forums designed to educate transit professionals in all areas of expertise. With the reauthorization of TEA 21 fast approaching, industry leaders will address advocacy and coalition building efforts that support and promote the benefits of public transportation on the national, state and local levels.

This year's meeting includes APTA's International Public Transportation Expo September 23-25. More than 15,000 industry leaders from around the globe attend to meet suppliers of the latest public transportation products, services, and technologies designed to enhance the passenger experience and make your transit system more efficient and profitable. As a member of the transportation community, you will also find many opportunities to network with other transportation leaders and exchange ideas and information about transit services.

Join us September 22-26 at the Las Vegas Hilton Hotel & Las Vegas Convention Center! Register for both the Annual Meeting and the Expo at http:// www. ntpshow. com/ shows/ apta2002/

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.