39–006 

109TH CONGRESS REPT. 109–12 " ! HOUSE OF REPRESENTATIVES 1st Session Part 2 

TRANSPORTATION EQUITY ACT: A LEGACY FOR USERS 

MARCH 8, 2005.—Ordered to be printed 

Mr. YOUNG of Alaska, from the Committee on Transportation and 

Infrastructure, submitted the following 

SUPPLEMENTAL REPORT 

[To accompany H.R. 3] 

This supplemental report shows the cost estimate of the Congressional Budget Office with respect to the bill (H.R. 3), as reported, 

which was not included in part 1 of the report submitted by the 

Committee on Transportation and Infrastructure on March 7, 2005 

(H. Rept. 109–12, pt. 1). 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, March 8, 2005. 

Hon. DON YOUNG, 

Chairman, Committee on Transportation and Infrastructure, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 3, the Transportation Equity Act: A Legacy for Users, as reported by the House Committee 

on Transportation and Infrastructure on March 7, 2005. Although 

CBO has not yet completed a cost estimate for the entire bill, this 

cost estimate provides our analysis of the bill’s major provisions. 

CBO has not had time to estimate the cost of other provisions, 

which include forgiving a loan (with an outstanding balance of 

about $12 million) to the state of California, increasing certain penalties related to transportation safety, requiring the preparation of 

several studies, and issuing regulations concerning a variety of 

transportation issues. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contacts are Lisa Cash Driskill and 

Susanne S. Mehlman. 

Sincerely, 

DOUGLAS HOLTZ-EAKIN, Director. 

Enclosure. 

2 

H.R. 3—Transportation Equity Act: A Legacy for Users 

Summary: This cost estimate provides our analysis of the major 

provisions of H.R. 3; CBO has not yet completed a cost estimate for 

the entire bill. CBO estimates that implementing the major provisions of H.R. 3 would result in new discretionary spending of $157 

billion over the 2006–2010 period, assuming appropriation actions 

consistent with the funding levels specified in the bill. For the core 

programs authorized by the bill (primarily, the Federal-Aid Highway program and transit programs), H.R. 3 would provide contract 

authority for most of the highway and some transit programs, establish obligation limitations for the major highway programs, and 

authorize appropriations for other programs for fiscal years 2004 

through 2009. The sum of new spending authority under the bill 

for those core programs is approximately $284 billion over that sixyear period. Funding for 2004 and much of 2005 has already been 

enacted; thus, some of the spending from that total has already occurred or will occur under current law. Similarly, some of the discretionary spending from the new funding will occur after the 

2006–2010 period covered by this cost estimate. 

The amounts of new spending under the bill would add to outlays expected from funding previously provided. In total, CBO estimates that discretionary outlays would sum to about $214 billion 

over the 2006–2010 period for the affected programs (highways, 

safety, transit, and hazardous materials transportation). 

CBO estimates that enacting the major provisions of the bill would reduce direct spending by $576 million over the 2005–2015 

period. Enacting the bill also would reduce the amount of contract 

authority (a mandatory form of budget authority) below the levels 

assumed in the CBO baseline for major transportation programs by 

$28.3 billion over this period. Finally, the Joint Committee on Taxation (JCT) estimates that enacting sections 1601 and 1602 would 

reduce revenues by $138 million over the 2005–2015 period. 

This estimate includes the funding levels specified in the bill, 

and no funding for the Minimum Guarantee program (other than 

the portion exempt from obligation limitations) because the bill, as 

approved by the Committee on Transportation and Infrastructure, 

would not extend authority for this program. Section 1125 specifies 

that most spending for highway programs in 2006 would be delayed until nearly the end of that fiscal year unless subsequent legislation were enacted to reauthorize and amend the Minimum 

Guarantee program. 

CBO has not had time to estimate the cost of other provisions, 

which include forgiving a loan (with an outstanding balance of 

about $12 million) to the state of California, increasing certain penalties related to transportation safety, requiring the preparation of 

several studies, and issuing regulations concerning a variety of 

transportation issues. 

H.R. 3 contains an intergovernmental mandate as defined in the 

Unfunded Mandates Reform Act (UMRA), but CBO estimates that 

there would be no costs to state, local, or tribal governments to 

comply with that mandate. Thus, the threshold established by that 

act ($62 million in 2005, adjusted annually for inflation) would not 

be exceeded. 

CBO has determined that H.R. 3 also contains private-sector 

mandates as defined in UMRA. CBO expects that the aggregate 

3 

cost of private-sector mandates in the bill would exceed the annual 

threshold established in UMRA ($123 million in 2005, adjusted annually for inflation). 

Estimated cost to the Government: The estimated budgetary impact of H.R. 3 over the 2005–2010 period is shown in Table 1. The 

effects of this legislation fall within budget function 400 (transportation). 

Basis of estimate: For this estimate, CBO assumes that H.R. 3 

will be enacted by May 31, 2005, when the current authority for 

most of the surface transportation programs expires and that future appropriation actions will be consistent with the funding levels authorized in the bill. For example, we assume that the appropriations already enacted for 2005 will be amended by supplemental appropriation actions to bring this year’s funding in line 

with the bill’s authorized levels. 

TABLE 1.—ESTIMATED BUDGETARY IMPACT OF MAJOR PROVISIONS OF H.R. 3 

By fiscal year, in millions of dollars— 

2005 2006 2007 2008 2009 2010 

CHANGES IN SPENDING SUBJECT TO APPROPRIATION 

Estimated authorization level .............................. 603 1,736 1,853 1,932 2,063 0 

Estimated outlays ................................................. 0 2,739 23,829 47,533 47,541 35,292 

CHANGES IN DIRECT SPENDING 

Estimated budget authority ................................. ¥4,856 ¥5,113 ¥4,031 ¥2,725 ¥1,650 ¥1,650 

Estimated outlays ................................................. 0 ¥86 ¥173 ¥115 ¥86 ¥69 

CHANGES IN REVENUES 1

Estimated revenues .............................................. * ¥4 ¥7 ¥11 ¥14 ¥17 

1 Revenue estimates provided by the Joint Committee on Taxation. 

Note.—* = revenue loss of less than $500,000. 

Contract authority 

H.R. 3 would extend the authority for the surface transportation 

programs administered by the Federal Highway Administration 

(FHWA), the National Highway Traffic Safety Administration 

(NHTSA), the Federal Motor Carrier Safety Administration 

(FMCSA), and the Federal Transit Administration (FTA) through 

2009. Under current law, most budget authority for surface transportation programs is provided as contract authority, a mandatory 

form of budget authority. Outlays from those programs, however, 

are subject to obligation limitations contained in appropriation acts 

and are therefore discretionary. For this estimate, CBO assumes 

that obligation limitations will continue to control most spending 

from those programs. 

H.R. 3 includes obligation limitations for the Federal-Aid Highway program. Those obligation limitations total $221 billion over 

the 2004–2009 period ($153 billion of that total is for the 2006–

2009 period). The bill does not include obligation limitations for the 

use of the contract authority that would be provided for transit and 

safety programs. For this estimate, CBO assumes that appropriation acts would include obligation limitations equal to the contract 

authority levels for those programs. 

For the surface transportation programs, H.R. 3 would provide a 

total of $200.2 billion of contract authority over the 2005–2009 peVerDate Aug 04 2004 07:23 Mar 09, 2005 Jkt 039006 PO 00000 Frm 00003 Fmt 6659 Sfmt 6602 E:\HR\OC\HR012P2.XXX HR012P2
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1 H.R. 3 also provides contract authority for fiscal year 2004. 

riod.1 This level does not include any contract authority for the 

Minimum Guarantee program, a part of the Federal-Aid Highway 

program (other than $639 million provided each year that is exempt from obligation limitations). In previous years the Minimum 

Guarantee program provided additional contract authority to ensure that each state received a share of the total level of contract 

authority provided to all states for certain programs, equal to 90.5 

percent of the state’s share of tax receipts to the highway trust 

fund. For example, in 2004 the Minimum Guarantee program provided contract authority of about $10 billion (including portions exempt from obligation limitations). 

Under section 1125, most spending for highway programs in fiscal year 2006 could not begin until August 2, 2006, unless subsequent legislation were enacted to boost the Minimum Guarantee to 

specified levels above 90.5 percent. For this estimate, CBO does not 

assume enactment of such subsequent legislation, and consequently 

the estimated level of highway spending in 2006 under the bill is 

significantly less than would otherwise be expected without section 

1125. That is, outlays from the 2006 funding would occur later 

under the bill than they would in the absence of the obligation 

delay under section 1125. The levels of contract authority and obligation limitations authorized by H.R. 3 for each year, however, are 

not affected by this provision. 

The Balanced Budget and Emergency Deficit Control Act specifies that an expiring mandatory program with current-year outlays 

in excess of $50 million be assumed to continue at the program 

level in place when it is scheduled to expire. Following this assumption, under H.R. 3, CBO projects $42.3 billion in contract authority for the major surface transportation programs each year beginning in 2010. 

Spending subject to appropriation 

In addition to providing contract authority, H.R. 3 would authorize the appropriation of about $8.2 billion over the 2005–2009 period for the major surface transportation programs and for improving the transportation of hazardous materials. Assuming appropriation action consistent with the authorization and obligation levels specified in the bill, CBO estimates that implementing the 

major provisions of H.R. 3 would cost about $157 billion over the 

2006–2010 period (see Table 2). The amounts of new spending 

under the bill would add to outlays expected from funding previously provided. In total, CBO estimates that discretionary outlays 

would sum to about $214 billion over the 2006–2010 period for the 

affected programs (highways, safety, transit, and hazardous materials transportation). 

5 

TABLE 2.—ESTIMATED CHANGES IN SPENDING SUBJECT TO APPROPRIATION FOR MAJOR 

PROGRAMS UNDER H.R.3 2

By fiscal year, in millions of dollars—

2006 2007 2008 2009 2010 

CHANGES IN SPENDING SUBJECT TO APPROPRIATION 

Federal-Aid Highway Program: 

Estimated Authorization Level 2 .................. 0 0 0 0 0 0 

Estimated Outlays ....................................... 0 855 18,708 40,426 38,724 27,230 

Highway Traffic and Motor Carrier Safety Programs: 

Authorization Level 2 .................................... 0 0 0 0 0 0 

Estimated Outlays ....................................... 0 502 1,012 1,115 1,210 607 

Transit Programs: 

Authorization Level 2 .................................... 576 1,707 1,823 1,932 2,063 0 

Estimated Outlays ....................................... 0 1,359 4,074 5,970 7,600 7,454 

Hazmat Safety Program: 

Authorization Level ...................................... 27 29 30 0 0 0 

Estimated Outlays ....................................... 0 23 36 22 6 0 

Total Changes: 

Estimated Authorization Level ............ 603 1,736 1,853 1,932 2,063 0 

Estimated Outlays .............................. 0 2,739 23,829 47,533 47,541 35,292

1 This estimate only includes the cost of major provisions of H.R. 3. 

2 Under current law, most budget authority for the Federal-Aid Highway program, highway traffic and motor carrier safety programs, and 

some transit programs is provided as contract authority, a mandatory form of budget authority. Outlays from those programs, however, are subject to obligation limitations contained in appropriation acts and are therefore discretionary. H.R. 3 would provide contract authority for 

each of those programs and also would authorize the appropriation of discretionary funds for those programs as well. For this estimate, CBO 

assumes that obligation limitations will continue to control most spending from those programs. 

Direct spending 

H.R. 3 would affect direct spending by providing new contract 

authority for surface transportation programs (see Table 3). Expenditures for most of those programs are controlled by annual appropriation action. The bill would provide lower amounts of contract authority for the Federal-Aid Highway program than the 

amounts assumed in CBO’s baseline (which assumes a continuation 

of funding of about $37 billion a year). 

In contrast, H.R. 3 would provide increases above the baseline in 

contract authority for transit programs and for the highway traffic 

and motor carrier safety programs. But on balance, the bill would 

provide contract authority amounts that fall below the baseline 

projections. Over the 2005–2015 period, that reduction from baseline levels sums to $28.3 billion. If the authorization for the Minimum Guarantee program were extended, however, that program 

would add to the contract authority provided by H.R. 3. 

Section 3034 would reduce the amount of contract authority 

available to transit programs in 2005 by $576 million. CBO estimates that reduction would lower spending by $576 million over 

the 2006–2011 period by eliminating a portion of the resources 

available and assumed to be spent under current law. To replace 

that contract authority, the bill would authorize the appropriation 

of an additional $576 million for transit programs in 2005. Spending from that authorization of appropriations is included in Table 

2, so that the reduction recorded as direct spending savings—included in Table 3—would be exactly offset by an increase in spending subject to appropriation. 

Revenues 

H.R. 3 would expand the State Infrastructure Banks and Transportation Infrastructure Finance and Renovation Act (TIFIA) proVerDate Aug 04 2004 07:23 Mar 09, 2005 Jkt 039006 PO 00000 Frm 00005 Fmt 6659 Sfmt 6602 E:\HR\OC\HR012P2.XXX HR012P2
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grams, and JCT estimates that those provisions would lower revenues by $138 million over the 2005–2015 period (see Table 3). 

Under current law, five states can use grants from the Federal-Aid 

Highway program to fund a state infrastructure bank. States use 

infrastructure banks to finance transportation projects by providing 

loans to local governments or repaying bonds. H.R. 3 would extend 

that authority to all states. JCT estimates that this provision 

would increase the use of tax-exempt bonds and therefore decrease 

federal revenues. 

For a project to receive credit assistance under the TIFIA program, current law requires the project’s total cost to equal or ex- ceed the lower of the following two amounts: $100 million or 50 

percent of the state’s grants from certain highway programs in the 

previous fiscal year. States can cover a portion of the remaining 

cost with tax-exempt bonds. H.R. 3 would change the first threshold to $50 million. JCT estimates that enacting H.R. 3 would increase the number of projects that receive credit assistance under 

TIFIA and therefore increase the use of tax-exempt bonds, reducing 

revenue collections. 

7 

TABLE 3. ESTIMATED EFFECTS ON DIRECT SPENDING AND REVENUES FOR MAJOR PROGRAMS UNDER H.R. 3 1

By fiscal year, in millions of dollars

—

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 

CHANGES IN DIRECT SPENDING 

Baseline Spending for Surface Transportation and Hazmat Safety Programs: 

Estimated Budget Authority ............................................................... 42,606 43,981 43,981 43,981 43,981 43,981 43,981 43,981 43,981 43,981 43,981 Estimated Outlays .............................................................................. 947 918 880 794 777 766 758 752 748 746 744 

Proposed Changes: Federal-Aid Highway Program: 

Estimated Budget Authority ............................................................... ¥4,177 ¥5,607 ¥5,008 ¥4,221 ¥3,688 ¥3,688 ¥3,688 ¥3,688 ¥3,688 ¥3,688 ¥3,688 

Estimated Outlays .............................................................................. 0 0 0 0 0 0 0 0 0 0 0 

Highway Traffic and Motor Carrier Safety Programs: 

Estimated Budget Authority ............................................................... ¥103 410 449 480 515 515 515 515 515 515 515 Estimated Outlays .............................................................................. 0 0 0 0 0 0 0 0 0 0 0 

Transit Programs: 

Estimated Budget Authority ............................................................... ¥576 84 528 1,016 1,523 1,523 1,523 1,523 1,523 1,523 1,523 Estimated Outlays .............................................................................. 0 ¥86 ¥173 ¥115 ¥86 ¥69 ¥46 0 0 0 0 

Total Changes: 

Estimated Budget Authority ............................................................... ¥4,856 ¥5,113 ¥4,0.31 ¥2,725 ¥1,650 ¥1,650 ¥1,650 ¥1,650 ¥1,650 ¥1,650 ¥1,650 

Estimated Outlays .............................................................................. 0 ¥86 ¥173 ¥115 ¥86 ¥69 ¥46 0 0 0 0 

Surface Transportation and Hazmat Safety Programs Under H.R. 3: 

Estimated Budget Authority ............................................................... 37,750 38,868 39,950 41,256 42,331 42,331 42,331 42,331 42,331 42,331 42,331 Estimated Outlays .............................................................................. 947 832 707 679 691 697 712 752 748 746 744 

CHANGES IN REVENUES 

Estimated Revenues 2 ............................................................... * ¥4 ¥7 ¥11 ¥14 ¥17 ¥17 ¥17 ¥17 ¥17 ¥17 

1 Includes direct spending estimates for major provisions of the bill. 2 Estimate provided by the Joint Committee on Taxation. 

Note.

—* = revenue loss of less than $500,000. 

8 

Estimated impact on State, local, and tribal governments: Section 4131 of H.R. 3 contains an intergovernmental mandate as defined in UMRA because it would preempt certain state laws restricting the use of utility service vehicles. CBO estimates that this 

mandate would impose no costs on state, local, or tribal governments, and so the threshold established by that act ($62 million in 

2005, adjusted annually for inflation) would not be exceeded. 

Section 4117 of H.R. 3 would eliminate an existing mandate by 

repealing the single state registration system, which limits how 

states may regulate interstate motor carriers. At this time, CBO 

cannot estimate the impact of this change on the administrative 

burden or revenue of state transportation agencies. 

Estimated impact on the private sector: CBO has reviewed H.R. 

3 for private-sector mandates and determined that the bill contains 

mandates as defined in UMRA. CBO expects that the aggregate 

cost of private-sector mandates in the bill would exceed the annual 

threshold established by UMRA ($123 million in 2005, adjusted annually for inflation). That conclusion is based upon our analysis of 

the provision that would extend the federal motor carrier safety 

regulations (other than regulations relating to commercial driver’s 

license and drug and alcohol-testing requirements) to additional 

commercial motor carriers. Under the bill, those safety requirements would apply to owners and operators of motor vehicles used 

to transport between nine and 15 passengers (including the driver) 

in interstate commerce, regardless of the distance traveled. According to representatives at the Federal Motor Carrier Safety Administration, the new regulations could cost 12,000 carriers nearly 

$13,000 each in the first year that the regulations are in effect and 

slightly less in the following years. 

Estimate prepared by: Federal Costs: Lisa Cash Driskill and Susanne S. Mehlman; Impact on State, Local, and Tribal Governments: Marjorie Miller; and Impact on the Private Sector: Jean 

Talarico. 

Estimate approved by: Peter H. Fontaine, Deputy Assistant Director for Budget Analysis. 

Æ