Federal Highway Funding Under the Surface Transportation

Extension Act of 2004, Part IV

## Summary

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), the Surface
Transportation Extension Act of 2004, Part III (STEA04-III, P.L.
108-263), the Surface Transportation Extension Act of 2004, Part IV
(STEA04-IV, P.L. 108-280, signed July 30, 2004) and the Consolidated
Appropriations Act, 2004 (P.L. 108-199).

# Contract Authority

STEA04-IV authorizes contract authority for FY 2004 for FHWA programs.
The amounts authorized include the amounts previously authorized by
STEA03, STEA04, STEA04-II, and STEA04-III for each program. The highway
contract authority made available under STEA04‑IV, 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 the 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. In most cases, the amounts authorized are the same
as the amount authorized for FY 2003. Programs normally funded by
deductions off the top of the authorizations for apportioned programs,
such as FHWA administrative expenses and the Bridge Discretionary
Program, are authorized separately under STEA04-IV.

*Administrative Funding*.---No new authorizations for FHWA
administrative expenses are included. The amounts authorized for this
purpose in STEA04-III remain unchanged. The STEA04-III funds 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 authorization is equal
to the Limitation on Administrative Expenses set in the Consolidated
Appropriations Act, 2004 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-IV, within the obligation limitation set in the DOT
Appropriations Act, obligations for all Federal-aid highway programs are
limited to \$31,890,519,230, not including \$602,134,615 for Minimum
Guarantee that is exempt from the obligation limitation. These amounts
are 49/52nds of the amounts provided in the Consolidated Appropriations
Act, 2004. No Federal-aid highway program obligations may be made after
September 24, 2004.

[Special Transfer Provisions under the Extension Acts]{.underline}

Previous extension acts allowed the transfer of apportioned funds
subject to the obligation limitation among programs and suballocations.
States were allowed to transfer NHS, IM, STP, Bridge, and STP, except
that STP funds setaside for safety, transportation enhancements and for
urbanized areas over 200,000 population could not be transferred. CMAQ
funds were eligible for transfer under STEA03, but this option was
eliminated by STEA04. Funds so transferred are subject to repayment to
the programs from which transfers are made. No changes to the transfer
provisions are made by STEA04-IV.

# Reserved Funding

Of the \$35,245,000,000 potentially available for highways under the FY
2004 budget resolution, STEA04-IV authorizes a total of \$33,211,634,615
in contract authority for highways. Similarly, \$31,890,519,230 of the
\$33,843,000,000 obligation limitation set in the Consolidated
Appropriations Act, 2004 has been made available by STEA04-IV. It is
anticipated that the remaining \$2,033,365,385 in contract authority and
\$1,952,480,770 in obligation limitation will be made available for High
Priority Projects and/or other purposes when the Congress returns from
its August recess.

**Section Analysis**

**P.L. 108-280 - The Surface Transportation Extension Act of 2004, Part
IV**

The highway provisions in the legislation amend the Surface
Transportation Extension Act of 2003 (P.L. 108-88), the Transportation
Equity Act for the 21^st^ 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 IV.

**Sec. 2. Advances.**

[Advance Authorizations of Contract Authority]{.underline}

The section provides funding for Federal-aid highway apportioned
programs except Metropolitan Planning (see section 4) for FY 2004.
Funding is provided as an extension of TEA-21 (thus, TEA-21 conditions
such as DBE will apply). No new programs are authorized in the extension
bill.

For Federal-aid highways and highway safety construction programs,
\$30,469,806,615 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)

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-   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
    \$2,800,000,000 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-IV
or earlier extension acts \--

-   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 4-5).

# Obligation Limitation

Within the obligation limitation set in the DOT Appropriations Act for
FY 2004, STEA04-IV limits obligations from the Federal-aid highway
program to \$31,890,519,230, not including \$602,134,615 for Minimum
Guarantee that is exempt from the obligation limitation. The limitation
applies to formula programs, allocated programs and administrative
expenses. No Federal-aid highway program obligations may be made after
September 24, 2004.

Generally, STEA04-IV directs that the available obligation limitation be
distributed according to section 110 of Division F of the Consolidated
Appropriations Act, as amended[^1], except that the obligation
limitation for each program, project, or activity will be the greater of
the amount made available under STEA04-IV or 49/52nds of the amount made
available under the DOT Appropriations Act, 2004.

STEA04-IV contains a provision that is intended to allow FHWA to
calculate final "lop off" ratio even though the full amount of
obligation authority has not yet been made available and the lack of
legislation authorizing FY 2004 contract authority for high priority
projects.

**Sec. 3. Repayment from Future Apportionments.**

Amounts apportioned to the States under previous extension bills are
offset against the funds made available by STEA04-IV and apportionments
under STEA04-IV will be offset against amounts apportioned under
subsequent laws extending the Federal-aid Highway Program authorizations
for FY 2004.

**Sec. 4. Other Federal-aid Highway programs.**

Contract authority is provided for other programs for FY 2004, as
follows:

-   Indian Reservation Roads (IRR) - \$275,000,000 (with a minimum
    \$13,000,000 for IRR bridges) \*

-   Public Lands Highways - \$246,000,000 \*

-   Park Roads and Parkways - \$165,000,000 \*

-   Refuge Roads - \$20,000,000 \*

-   Borders and Corridors. - \$140,000,000

-   Ferry Boats & Terminals - \$38,000,000, with setasides for projects
    on the NHS in Alaska (\$10,000,000), New Jersey (\$5,000,000), and
    Washington (\$5,000,000).

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-   Scenic Byways - \$26,500,000

-   Value Pricing - \$11,000,000

-   Highway Use Tax Evasion - \$5,000,000

-   Commonwealth of Puerto Rico Highway Program - \$110,000,000

-   Bicycle/Pedestrian Clearinghouse - \$500,000

-   Transportation and Community and System Preservation Pilot Program -
    \$25,000,000

-   Transportation Infrastructure Finance and Innovation (TIFIA) -
    \$130,000,000, with up to \$2,000,000 for TIFIA administrative
    costs. The principal amount of credit instruments made available
    during the fiscal year is limited to \$2,600,000,000.

-   Surface Transportation Research - \$103,000,000

-   Technology Deployment Program - \$50,000,000, with \$5,000,000 for
    the Advanced Technology Pilot Program (low-speed Maglev)

-   Training and Education - \$20,000,000

-   Bureau of Transportation Statistics - \$31,000,000

-   Intelligent Transportation System (ITS) Standards, Research,
    Operational Tests, and Development. - \$110,000,000

-   ITS Deployment - \$122,000,000

-   University Transportation Research - \$26,500,000

-   Metropolitan Planning - \$240,000,000

-   Territorial Highway Program - \$36,400,000

-   Alaska Highway - \$18,800,000

-   Operation Lifesaver - \$500,000

-   Bridge Discretionary Program - \$100,000,000

-   Interstate Maintenance Discretionary Program - \$100,000,000

-   Recreational Trails Program Administrative Costs - \$750,000

-   Railway-highway Crossing Hazard Elimination in High Speed Rail
    Corridors \$5,250,000, with \$250,000 to be available for
    improvements to the Minneapolis/St. Paul -- Chicago segment of the
    Midwest High Speed Rail Corridor

-   DBE Training - \$10,000,000

-   On-the-Job Training/Supportive Services - \$10,000,000

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

**Sec. 5. Extension of Highway Safety Programs**.

Extends through FY 2004, the two safety grant programs that are within
the Federal-aid highway program:

-   Safety Incentive Grants for Use of Seat Belts - \$112,000,000

-   Safety Incentives to Prevent Operation of Motor Vehicles by
    Intoxicated Persons - \$110,000,000

**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 through FY 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 through FY 2004.

Sec. 9. Federal Motor Carrier Safety Administration Program.

This section extends through FY 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.

Generally, this section amends the Highway Trust Fund provisions of the
Internal Revenue Code to authorize expenditures from the HTF before
October 1, 2004, and authorizes expenditures to carry out this Act. For
programs funded from the Highway Account of the Highway Trust Fund,
other than those carried out by NHTSA and FMCSA, the section authorizes
expenditures made before September 25, 2004. 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.

> 07-30-2004

HPLS-10

[^1]: Section 110 of the Consolidated Appropriations Act, 2004 (PL
    108-199) was amended by the Surface Transportation Extension Act of
    2004 (P.L. 108-202) and by the FY 2005 Defense Appropriations Act.