**Analysis of H.R.2566 as Introduced**

***(RTA-000-1444A)***

The following is an analysis of FY 2005 apportionments based on the
provisions of H.R.2566 as Introduced. The analysis, developed by the
FHWA's Office of Legislation and Strategic Planning, includes a brief
summary of technical notes and findings, accompanied by a series of
tables reflecting estimated apportionments. Note that all values shown
are estimates intended for policy analysis purposes only, and do not
reflect penalties or the programmatic redistribution of Minimum
Guarantee funds. The official apportionment notices and supplementary
tables that will be issued by the FHWA will reflect these types of
adjustments and will be rounded to whole dollars.

H.R.2566 follows the general structure of STEA04-V[^1], but extends
funding through June 30, 2005. The FY 2005 funding levels in this
analysis have been reduced by a 0.8% across-the-board rescission
pursuant to Division J, Section 122 of the Consolidated Appropriations
Act, 2005 (P.L. 108-447). Pursuant to Section 117 of Division H of the
Consolidated Appropriations Act, 2005 (P.L. 108-447), authorizations for
all apportioned programs (except Recreational Trails) and the Federal
Lands Highway Program are further reduced by a discretionary takedown
(not to exceed 4.1%) to fund grants for highway projects in the Delta
Regional Authority, various surface transportation projects and NHTSA
operation expenses. The results of this analysis are summarized in the
attached Excel file: "RTA-000-1444A.xls".

**[FY 2005 Technical Notes]{.underline}**

Pursuant to H.R.2566, \$25,521,678,000 in contract authority was
authorized for distribution among the Interstate Maintenance, National
Highway System, Surface Transportation Program, Highway Bridge
Replacement & Rehabilitation Program, Congestion Mitigation & Air
Quality Improvement, Recreational Trails, Appalachian Development
Highway System, and Minimum Guarantee programs for the period October 1,
2004 through June 30, 2005. Section 5(c) of H.R.2566 authorized
\$163,125,000 in contract authority for distribution to the Metropolitan
Planning program.

Section 2(e) of H.R.2566 contains provisions relating to the
distribution of obligation authority for FY 2005, referencing Division
H, Section 110(b) of the Consolidated Appropriations Act 2005 (P.L.
108-447). Of relevance to this analysis, is the \$639,000,000 of the
Minimum Guarantee funds that are exempt from the obligation limitation,
and are not subject to the 0.8% rescission referenced above. STEA04-V
held \$479,250,000 (9/12ths) of the \$639,000,000 exempt from the
obligation limitation.

This analysis deducted the full 4.1% takedown after application of the
0.8% across-the-board rescission to the FY 2005 funding levels.

**[FY 2005 Advanced Authorizations and Programmatic
Distribution]{.underline}**

STEA04-V and previous extension acts required that in FY 2004, the
amount of funding made available to each State for distribution among
its apportioned programs (except for Metropolitan Planning) be
determined by multiplying a State's share of the total FY 2003
obligational authority by the total amount of available contract
authority. However, for FY 2005, Section 2(a)(1) of STEA04-V dictated
that FY 2004 obligation authority should be used in the computation
instead.

Section 2(a)(2) of STEA04-V further modified the procedures used to
compute the FY 2004 apportionments by guaranteeing that in FY 2005,
States would receive at least a 90.5% relative rate of return on its HTF
contributions[^2]. This was to be accomplished in a manner similar to
the adjustments made in 23 USC § 105(f), increasing the program shares
of some States as necessary, and proportionally reducing the shares for
all of the others. However, rather than using the shares legislated in
23 USC § 105(b) as the starting point for the percentage adjustments,
each State's share of the FY 2004 obligation authority were to be used
in the computations instead. The adjusted shares were then to be
multiplied by the total amount of contract authority available for
apportioned programs (except for Metropolitan Planning), after which a
programmatic distribution would be made consistent with the procedures
described below.

Pursuant to section 2(b) of STEA03, the amount made available to a State
for the Interstate Maintenance, National Highway System, Surface
Transportation Program, Highway Bridge Replacement & Rehabilitation
Program, Congestion Mitigation & Air Quality Improvement, Recreational
Trails, Appalachian Development Highway System, and Minimum Guarantee
programs would be equal to the total amount of contract authority made
available to that State (as determined by the methodology outlined in
the previous paragraph) multiplied by the ratio that the amount of funds
apportioned to that State for each of the aforementioned programs bears
to the total amount of funds apportioned to that State for all of the
aforementioned programs for FY 2004.

Metropolitan Planning funds were to be distributed based on the current
formula as defined in 23 USC § 104(f). Note that the procedures outlined
in Section 2(a)(2) of STEA04-V guaranteeing a 90.5% relative rate of
return do not apply to Metropolitan Planning.

Funds made available in this manner were not subject to the many of the
takedowns or setasides required by TEA-21. Instead, authorizations for
those takedowns and set-asides that would have normally been taken off
the top of the authorized dollar levels for each program were funded
separately.

**[Guide to Tables]{.underline}**

The attached Excel file contains 5 tables. (The following list is based
on the names on the tabs in the Excel spreadsheet, rather than the
titles on the printed output).

The "2005 9 Twelfths" page reflects the distribution of FY 2005
apportionments pursuant to H.R.2566, while the "2005 8 Twelfths
(Notice)" page reflects the official distribution of FY 2005
apportionments pursuant to STEA04-Part V. Both tables take into account
the effects of the Consolidated Appropriations Act, 2005 (PL 108-447) on
the apportionments.

The "Program-by-Program Comparison" page compares the distribution of FY
2005 apportionments from the "2005 9 Twelfths" and "2005 8 Twelfths
(Notice)" pages, showing the incremental amount of funding provided by
H.R.2566 for each apportioned program. The "Side-by-Side Comparison"
page summarizes this information for all apportioned programs combined.

The "Authorization Table" page reflects the amount of contract authority
made available under STEA04-Part V (8-months), H.R.2566 (9-months) and
the annualized level if those amount were increased proportionally for a
full 12 months.

**[Findings]{.underline}**

H.R.2566 would increase total Federal-aid highway program authorizations
by \$3.1 billion over the levels in STEA04-Part V, to \$27,568,596,000.
This amount would be subject to the 0.8% across-the-board rescission and
the discretionary takedown. The table below details the breakdown of the
funding.

+--------------------+------------+-----------+------------+----------+
|                    | **Total**  | **0.80%   | **4.1%     | **Net    |
|                    |            | Across-   | Dis        | Authori  |
|                    | **Contract | the-Board | cretionary | zation** |
|                    | A          | Rescis    | Take       |          |
|                    | uthority** | sion^†^** | down^††^** |          |
+--------------------+------------+-----------+------------+----------+
|                    |            |           |            |          |
+--------------------+------------+-----------+------------+----------+
| **Metropolitan     | \$1        | \$        | 0          | \$161    |
| Planning**         | 63,125,000 | 1,305,000 |            | ,820,000 |
+--------------------+------------+-----------+------------+----------+
| **Other            | \$25,5     | \$20      | \$1,0      | \$24,284 |
| Apportioned        | 21,678,000 | 0,339,424 | 36,369,453 | ,969,123 |
| Programs**         |            |           |            |          |
+--------------------+------------+-----------+------------+----------+
| **Research**       | \$3        | \$        | 0          | \$344    |
|                    | 46,875,000 | 2,775,000 |            | ,100,000 |
+--------------------+------------+-----------+------------+----------+
| **Other Allocated  | \$1,5      | \$1       | \$         | \$1,503  |
| Programs**         | 36,918,000 | 2,295,344 | 21,535,824 | ,086,832 |
+--------------------+------------+-----------+------------+----------+
| **Total            | \$27,5     | \$21      | \$1,0      | \$26,293 |
| Federal-Aid CA**   | 68,596,000 | 6,714,768 | 57,905,277 | ,975,955 |
+--------------------+------------+-----------+------------+----------+

  ---- -------------------------------------------------------------------
  †    Does not apply to \$479,250,000 of Minimum Guarantee exempt from
       the obligation limitation

  ††   Applies to Apportioned Title I and the Federal Land Highway Program
  ---- -------------------------------------------------------------------

> HPLS-30; 05/25/05

[^1]: The Surface Transportation Extension Act of 2004, Part V
    (STEA04-V, P.L. 108-310, signed September 30, 2004).

[^2]: HTF contributions are normally estimated based on the latest
    available data at the start of the fiscal year in question; in this
    case using FY 2003 HTF revenue data and 2002 State gallonage data.