FY2006 Appropriations for the Department of Transportation
Released: 2006-01-11T00:00:00

Most Recent Developments

On December 30, 2005, President Bush signed the FY2006 Department of Defenseappropriations bill into law ( P.L. 109-148 ). That bill included a provision (Section 3801) rescindingone percent of all non-emergency federal discretionary funding for FY2006. The bill also provided$2.8 billion in supplemental funding to the Department of Transportation for response to theconsequences of Hurricanes Katrina, Rita and Wilma.

On November 30, 2005, President Bush signed H.R. 3058 into law ( P.L.109-115 ). The bill had been passed by Congress on November 18. (1) The bill provided $60.7 billionin net budgetary resources for the Department of Transportation, less than either the House or Senateversions, but $1.0 billion (1.6%) more than the FY2005 enacted level and $2.4 billion (4.1%) morethan the Administration requested.

On November 2, 2005, the House Committee on Appropriations published a revisedsuballocation of budget allocations for FY2006 ( H.Rept. 109-264 ). Among the changes made bythis report were a reduction in the suballocation ("302(b) allocation") for the House AppropriationsCommittee Transportation-Treasury-HUD-The Judiciary-DC Subcommittee. The revisedsuballocation for discretionary budget authority was $65.9 billion, $1 billion less than the previoussuballocation (and $1 billion less than the discretionary funding level in the House-passed versionof the FY2006 transportation appropriations bill, which also funds several other federal agencies). Most transportation appropriations funding comes from trust funds, and for budgetary purposes isnot considered discretionary spending. However, a portion of aviation and transit funding, and allrail funding (including Amtrak), comes from discretionary funds.

On October 20, 2005, the Senate passed H.R. 3058 , the FY2006 Departmentsof Transportation, Treasury, and Housing and Urban Development, The Judiciary, District ofColumbia, and Independent Agencies Appropriations bill. The Senate provided $64.2 billion for theDepartment of Transportation, $4.2 billion over the FY2005 enacted level and $5.9 billion over theAdministration's request for FY2006. The Senate bill provided $1.45 billion for Amtrak, for whichthe Administration had requested no funding, and also included several provisions affecting Amtrakoperations.

On August 10, 2005, the President signed into law P.L. 109-59 , the Safe, Accountable,Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), whichreauthorized federal surface transportation programs.

Legislative Status

Table 1. Status of FY2006 Department of TransportationAppropriations (H.R. 3058)

UC: unanimous consent

Overview

Budget Structure of the Department of Transportation

The budget for DOT includes both budget and contract authority for expenditures drawn fromboth trust funds and general funds, expended through both formula and discretionary programs. Most of DOT's funding is in the form of contract authority, is drawn from trust funds, and isexpended through formula programs.

Table 2. DOT Budget by Funding Source

(billions of dollars)

*Totals in this table do not reflect rescissions of contract authority, and so differ from other totalsin this report.

Source: Budget Authority table provided by the House Committee on Appropriations. Figures maydiffer from the figures in the Administration budget documents. Figures reflect the across-the-board0.83% rescission imposed by the FY2005 Consolidated Appropriations Act, and emergencyappropriations for FY2005.

"Trust Funds" figures equal 'limitations on obligations' plus 'exempt obligations.'

Table 3. Funding Trends for Transportation Appropriations FY2000-FY2006

(billions of current dollars)

Source: United States House of Representatives, Committee on Appropriations, ComparativeStatement of Budget Authority tables from fiscal years 1999 through 2006, except FY2006 Senatefigure is from S.Rept. 109-109 .

a. Figures for Department of Transportation appropriations for FY1999-FY2003 have been adjustedfor comparison with FY2004 and later figures by subtracting the United States Coast Guard,the Transportation Security Administration, the National Transportation Safety Board, andthe Architectural and Transportation Barriers Compliance Board, and by adding the MaritimeAdministration.

b. FY2001 figures reflect 0.22% across-the-board rescission.

c. FY2003 figures reflect 0.65% across-the-board rescission.

d. FY2004 figures reflect 0.59% across-the-board rescission.

e. FY2005 figures reflect 0.83% across-the-board rescission.

f. FY2006 figures do not reflect 1.0% across-the-board rescission or $2.8 billion supplemental.

Table 4. Department of TransportationAppropriations

(in millions of dollars -- totals may notadd)

Note: Figures are from a budget authority table provided by the House Committeeon Appropriations, except Senate Committee figures from budget table in S.Rept.109-109 . Because of differing treatment of offsets, the totals will not always matchthe Administration's totals. The figures within this table may differ slightly fromthose in the text due to supplemental appropriations, rescissions, and other fundingactions. Columns may not add due to rounding or exclusion of smaller programline-items.

a. These figures reflect the 0.83% across-the-board rescission included in P.L.108-447 .

b. These amounts are in addition to the $50 million annual authorization for theEssential Air Service program; thus, the total FY2005 funding would be $102million ($50 million + $52 million).

c. The FY2006 figure does not include the 1.0% across-the-board rescission or the$2.8 billion supplemental.

FY2006 Appropriations

The Administration's FY2006 budget proposed a DOT budget of $58.3billion, $1.4 billion (2%) below FY2005's enacted level of $59.7 billion (see Table4 ). (2) Themajor funding changes from FY2005 are in the requests for Amtrak ($1.2 billion(100%) below FY2005) and in the Federal Aviation Administration's AirportImprovement Program ($500 million (14%) below FY2005). The budget requestconformed to the basic outline of the Transportation Equity Act for the 21st Century

as extended (TEA-21; P.L. 105-178 ) which authorized spending on highways,highway safety, and transit (see Appendix 2 for more information on this authorizingact), though the request also reflected changes proposed in the Administration'sreauthorization proposal (108th Congress: H.R. 2088 / S. 1072 ). (3)

The FY2006 budget also reflects a statutory change to one of the DOT'sAdministrations. The Norman Y. Mineta Research and Special ProgramsImprovement Act, which was enacted as P.L. 108-426 (118 Stat. 2423), created twonew operating administrations in place of the former Research and Special ProgramsAdministration (RSPA): the Pipeline and Hazardous Materials Safety Administrationand the Research and Innovative Technology Administration.

The House Committee on Appropriations recommended $62.8 billion;increases over the requested amounts were provided for Federal AviationAdministration, the Federal Highway Administration, the Federal TransitAdministration, and Amtrak. The House approved two transportation-relatedamendments to the bill, increasing the level of funding for Amtrak beyond theCommittee-recommended level, and striking the Committee-recommended provisionbarring federal funding for Amtrak routes with per-passenger subsidy levels of $30or more. Floor amendments increased the DOT funding in the bill as passed by theHouse to $63.5 billion.

The Senate Committee on Appropriations recommended $64.2 billion;increases over the House proposal were provided for the Federal HighwayAdministration (FHWA) the Federal Railroad Administration (mostly for Amtrak),while less funding was proposed for the Federal Aviation Administration (FAA) andthe Federal Transit Administration (FTA) than was proposed by the House. TheSenate-passed bill followed the Committee's recommendations.

The conference bill provided $60.7 billion, an increase of $1.8 billion (3%)over the FY2005 enacted level.

Essential Air Service (EAS)

In its FY2006 request, the Administration once again proposed that the sizeof the EAS program be reduced, capping the program at the $50 million level. TheHouse Committee on Appropriations recommended $104 million for the program,up slightly from $102 million enacted for FY2005. This was reduced to $50 millionduring House floor consideration when $54 million was struck on a point of orderrelating to the source of the funding. The Senate Committee recommended $110million; the Senate approved this amount. The conference agreement provided $110million.

The EAS program was established in 1978, when Congress deregulatedcommercial aviation. There was concern that airlines would drop service to smallerairports with low levels of ridership. In order to preserve air service to smallcommunities, Congress established the EAS program, which subsidizes the cost toairlines of providing service to these communities. The EAS program is operatedthrough the Office of the Secretary of Transportation, and receives its authorizedfunding from designated user fees collected from overflights of United Statesterritory by foreign aircraft.

The EAS program has had an annual authorized funding level of $50 millionfor the last several years. The overflight funding mechanism, however, has neverprovided this much annual funding, so funding has been provided from other sourcesto make up the difference. In addition, for the past few years Congress has providedadditional funding in order to enable the program to serve more airports. The EASprogram continues to enjoy significant support in Congress.

Federal Aviation Administration (FAA)

http://www.faa.gov/

The Bush Administration request for FY2006 was $13.9 billion, slightly morethan the FY2005 enacted level of $13.8 billion. The proposal was essentially devoidof major new initiatives, but contained some program adjustments and significantlyreduced funding for the Airport Improvement Program (AIP). The proposed cut tothe AIP program would have put its FY2006 appropriation below the level'guaranteed' in the Century of Aviation Reauthorization Act (Vision 100, P.L.108-176 ). Both the formula provisions and the guarantee provisions of that actwould have caused significant disruption to the AIP program at the proposed fundinglevel. The House Committee on Appropriations recommended $14.4 billion for theFAA, and provided the authorized FY2006 level of funding for the AIP. TheHouse-passed bill provided $14.6 billion (after a $500 million rescission of contractauthority). The Senate Committee on Appropriations recommended $13.6 billion(after a $1.2 billion rescission of contract authority), which the Senate approved. Theconference agreement provided $13.8 billion (after a $1.0 billion rescission ofcontract authority). This was $266 million more than the FY2005 enacted level, and$1.1 billion more than the Administration request.

The vast majority of FAA funding is provided from the Airport and AirwayTrust Fund. Only O&M funding uses a mix of trust fund and Treasury general fundmonies. Over the past ten years (FY1996-FY2005), the general fund has contributedan average of 21% of FAA's budget. (4) In FY2002, a Treasury general fund contributionof $1.1 billion was provided for O&M funding. While the general fund contributionfor FY2002 was on the low side historically (8% of FAA's total budget), the FY2003amount returned to a higher contribution level of $3.2 billion (24% of FAA's totalfunding). However, the general fund contribution has been declining since then: to$3.0 billion (22% of FAA's total budget) in FY2004, to an estimated $2.8 billion(20%) in FY2005, and to an estimated $1.6 billion (11%) in the Administration'sFY2006 request. (5) Historically, the trust fund/general fund split hasbeen an important part of the annual FAA budget debate. The rationale behind thegeneral fund contribution has been that the public at large realizes some benefit fromaviation whether it uses the system or not. (6)

Trust fund revenues have been running below projections for several years. With general fund contributions to FAA's budget also declining from their historicalaverage, the difference between FAA's budget level and these two funding sourceshas been made up by tapping the trust fund's uncommitted balance, which is nowquite low by historical standards ($2.4 billion).

Operations and Maintenance(O&M). For FY2006, the Administration proposed $8.2 billion intotal spending, a $500 million (6%) increase over the $7.7 billion enacted forFY2005. The House Committee on Appropriations recommended $8.2 billion,virtually identical to the Administration request; the House-passed bill provided $8.4billion. The Senate Committee on Appropriations recommended $8.2 billion, whichthe Senate approved. The conference agreement provided $8.2 billion. The majorityof funding in this category is for the salaries of FAA personnel engaged in air trafficcontrol, certification, and safety-related activities. Much of the increased fundingcalled for in the FY2006 request is for increased air traffic control system costs andsafety-related activities.

One issue is the increasingly urgent need to hire additional air trafficcontrollers. There is concern that many of the current controllers, who were hiredafter the air traffic controllers strike of 1981, are now rapidly approaching retirementage. Controller union representatives contend that the FAA is not taking sufficientaction to mitigate against potential future staff shortages. The request fundingincluded $25 million to hire 1,249 controllers in FY2006. This is expected to resultin a net gain of around 604 controllers, since around 645 controllers are expected toleave through attrition during FY2006.

Facilities and Equipment (F&E). The Administration request for F&E was $2.4 billion, slightly down from $2.5 billionin FY2005 and below the FY2006 authorized level of $3.1 billion. The HouseCommittee on Appropriations recommended $3.1 billion, the authorized level; thiswas approved by the House. The Senate Committee on Appropriationsrecommended $2.4 billion, which the Senate approved. The conference agreementprovided $2.5 billion. F&E funding is used primarily for capital investment in airtraffic control and safety.

Research, Engineering, and Development(RE&D). The Administration requested $130 million in FY2006,identical to the FY2005 level. The House Committee on Appropriationsrecommended the same amount; the House concurred. The Senate AppropriationsCommittee recommended $134.5 million, which the Senate approved. Theconference agreement provided $138 million. Most RE&D activity is focused onsafety/air traffic control activities. No significant new initiatives were proposed inthe Bush Administration FAA budget.

Grants-in-Aid for Airports. TheAirport Improvement Program (AIP) provides grants for airport planning anddevelopment, and for projects to increase airport capacity (such as building newrunways) and other facility improvements. The Bush Administration FY2006 budgetproposal requested $3.0 billion for AIP, $500 million below the FY2005 level. Some Members of Congress have questioned AIP cuts at a time when aviation trafficis finally returning to pre-September 11th volumes and is expected to continue togrow. Construction of new runways is seen by many as the best way to alleviateairport congestion. The proposed $3 billion level for FY2006 is also $600 millionbelow the funding level "guaranteed" for FY2006. Section 104 of Vision 100 (49USC 48114(c)(2)) provides that "it shall not be in order" for Congress to consider anybill appropriating funding for FAA Operations or Research and Developmentaccounts if the combined funding for the Grants-in-Aid to Airports and Facilities andEquipment accounts is below their combined authorization level for that year. Thecombined FY2006 proposal for the AIP and F&E programs is $5.45 billion, $1.2billion below their combined authorized level of $6.65 billion. In addition, theproposed AIP funding level of $3 billion is below the $3.2 billion threshold set underAIP distribution formulas in Vision 100. Due to a provision in the authorizinglegislation, this shortfall could result in cutting most AIP formula distributions inhalf.

The Administration defended its proposed reduction with three arguments:it noted that the AIP funding level has increased significantly from its $1.9 billionlevel in FY2000; it asserted that airport capital development needs (as measured byrequests for issuances of airport revenue bonds and in FAA's National Plan ofIntegrated Airport Systems) have declined by 15% in recent years; and it asserted thatairports could compensate for the reduction in AIP funding by increasing their useof passenger facility charges. (7) The Administration estimated that airports couldraise an additional $350 million annually by increasing passenger facility fees to themaximum allowed by law. Some Members of Congress questioned the wisdom ofimposing fee increases on an unprofitable airline industry struggling unsuccessfullywith the impact of high fuel costs.

The House Committee on Appropriations recommended $3.6 billion for AIP,the authorized level for FY2006; the House concurred. The Senate Committee onAppropriations recommended $3.5 billion, which the Senate approved. Theconference agreement provided $3.55 billion.

Federal Highway Administration (FHWA)

http://www.fhwa.dot.gov

The FHWA budget provides funding for the Federal-Aid Highway Program(FAHP), which is the umbrella term for nearly all the highway programs of theagency.

There are several major highway programs within FHWA, and most fundingis reserved for these core programs. These programs are: National Highway System(NHS), Interstate Maintenance (IM), Surface Transportation Program (STP), BridgeReplacement and Rehabilitation (BRR), and Congestion Mitigation and Air QualityImprovement (CMAQ). All of these programs are subject to apportionment on anannual basis by formula and are not subject to program-by-program appropriation.

There is another set of programs, known as the "allocated" programs (alsoreferred to as discretionary programs). These programs are under the direct controlof FHWA or other governmental entities. These programs include the Federal LandsHighway Program, High Priority Projects (former demonstration project category),Appalachian Development Highway System roads, the National CorridorInfrastructure Improvement Program, and several other small programs. In recentyears, nearly all discretionary program funding has been earmarked by Congress inthe appropriations process.

The Administration Request. Federal surface transportation programs had not yet been reauthorized when thePresident's budget was released; the President's FY2006 budget assumed that theauthorization would conform to the President's surface transportation reauthorizationrecommendations. Congress reauthorized surface transportation programs with thepassage of SAFETEA-LU (signed into law in August 2005; P.L. 109-59 ).

For FY2006, the President requested $35.4 billion for FHWA. That wasslightly less than the $35.8 billion level for FY2005; it was significantly less than theFY2006 authorized level that was proposed in either the House ($37.0 billion) orSenate ($38.9 billion) versions of surface transportation reauthorization legislation( H.R. 3 ). The House Committee on Appropriations recommended $37.0billion, the amount authorized in the House reauthorization legislation. The Houseconcurred with this recommendation. The Senate Committee on Appropriationsrecommended $38.7 billion; the Senate approved this figure. The conference billprovided $36.8 billion for FHWA; after a $2 billion rescission of contract authority,the FHWA appropriations is scored, for budgetary purposes, at $34.7 billion.

Federal Motor Carrier Safety Administration (FMCSA)

http://www.fmcsa.dot.gov/

FMCSA issues and enforces the Federal Motor Carrier Safety Regulationsthat govern many aspects of specified commercial truck and bus operations, includingthe interstate operation and maintenance of commercial vehicles and requirementsfor commercial drivers. FMCSA also administers grants and programs to help statesconduct truck and bus safety enforcement activities. Together with the states,FMCSA conducts inspections of Mexican-domiciled drivers and vehicles enteringthe United States, advances Intelligent Transportation Systems for commercialvehicle operations, and each year reviews or audits thousands of carriers transportingproperty and passengers. Most of the funds used to conduct FMCSA activities arederived from the Highway Trust Fund.

The FY2006 Administration request for the FMCSA is $465 million, 5%more than the FY2005 level of $444 million. The House Committee onAppropriations recommended $501 million, 12% above the FY2005 enacted leveland 8% above the Administration request. The House concurred with thisrecommendation. The Senate Committee on Appropriations recommended $490million; the Senate approved this amount. The conference bill provided $495million, 11% above the FY2005 enacted level.

The FMCSA appropriation has two primary components: FMCSAadministrative expenses (including operations and research); and financial assistanceprovided primarily to the states to conduct various truck and bus safety programs.

Administrative and OperationsExpenses. The President's budget request for FMCSA'sadministrative and operations expenses for FY2006 is $233 million. The HouseCommittee on Appropriations recommended $215 million; the House concurred. The Senate Committee recommended $211 million; the Senate concurred. Theconference bill provided $213 million. This account includes funds for research andtechnology (R&T) and regulatory development. Some of the activities that would befunded include enforcement to reduce the number of unsafe motor carriers anddrivers, and the funding of a medical review board to assist FMCSA in improvingits physical examination requirements for commercial drivers. Some of the coreFMCSA activities or expenses supported by these funds include rent, administrativeinfrastructure, personnel compensation and benefits and other related staff expensesfor more than 1,000 employees; outreach efforts to help educate the commercialmotor vehicle industry about the federal safety regulations; and monies to improvetruck and bus, as well as driver, standards and oversight. This account also fundsagency information systems used to oversee the safety of motor carriers.

Grants to States and OtherActivities. The Administration's FY2006 request for these activitiesis $232 million. House Committee on Appropriations recommended $286 million;the House concurred. The Senate Committee on Appropriations recommended $279million; the Senate concurred. The conference bill provided $282 million. Thesefunds are used primarily to pay for the Motor Carrier Safety Assistance Program(MCSAP), which provides grants to states to help them enforce commercial vehiclesafety and hazardous materials transportation regulations. MCSAP grants cover upto 80% of the eligible costs of a state's commercial truck and bus safety program. Some 9,000 state and local law-enforcement officers conduct more than 2.9 millionroadside inspections of trucks and buses annually under the program.

National Highway Traffic Safety Administration (NHTSA)

http://www.nhtsa.dot.gov/

NHTSA funding supports behavioral (including both driver and pedestrian)and vehicular (including crash worthiness and avoidance) programs that are intendedto improve traffic safety. More specifically, NHTSA seeks to reduce impaireddriving, increase occupant protection, improve police traffic services, enhanceemergency medical responses to crashes, ensure compliance with various federalvehicle safety regulations, and track and seek to mitigate emerging vehicle safetyproblems. NHTSA also provides grants to the states for the implementation ofvarious highway traffic safety programs.

For FY2006, the Administration requested $696 million to carry outNHTSA's mission, a $22 million (3%) increase over comparable FY2005funding. (8) Of the total amount requested by the Administration, $465 million was designatedto support general traffic safety and incentive grants to states. The incentive grantsare intended primarily to encourage use of occupant protection measures and reduceimpaired driving. The remaining $231 million was for NHTSA's operations andresearch activities to reduce highway fatalities and prevent injuries due to trafficcrashes. More specifically, the funds proposed would be used for activities includingresearch and analysis (e.g., collection of crash statistics, research on vehicleperformance and occupant injury during these crashes, and driver distraction testing);highway safety programs (e.g., developing improved countermeasures to combatalcohol- or drug-impaired driving and measures to increase safety belt usage); safetyassurance (e.g., testing of vehicles to ensure compliance with federal motor vehiclesafety standards and maintaining a legislatively-required database to track vehicledefects); and conducting crash avoidance and crash-worthiness testing, andevaluating child safety seats.

The House Committee on Appropriations recommended $782 million forFY2006, $108 million (16%) over the comparable FY2005 enacted level and $86million (12%) over the Administration request. The House concurred. The SenateCommittee on Appropriations recommended $779 million; the Senate added $6million by floor amendment for a total of $785 million. The conference bill provided$815 million, $141 million (21%) over the comparable FY2005 enacted figure.

Federal Railroad Administration (FRA)

http://www.fra.dot.gov

The Administration requested $552 million in funding for the FederalRailroad Administration for FY2006. This is $880 million (61%) below the $1.4billion FRA received in FY2005. The difference is largely due to theAdministration's request for no funding for Amtrak, which received $1.2 billion inFY2005; the Administration request also zeroed out the Next Generation High-SpeedRail Program. The House Committee on Appropriations recommended $732 millionfor FRA for FY2006. The House provided $1.3 billion, adding $626 million througha floor amendment increasing funding for Amtrak. The Senate Committee onAppropriations recommended $1.7 billion; the Senate provided $1.6 billion. Themajor difference from the House-passed figure was recommending an additional$274 million for Amtrak, for a total FY2006 level of $1.45 billion for Amtrak. Theconference bill provided $1.5 billion, $94 million over the FY2005 enacted level; theincrease is largely due to the $1.3 billion provided for Amtrak, $100 million morethan its enacted FY2005 level.

Although most of the debate involving the FRA budget centers on Amtrak,agency safety activities (which receive more detailed treatment in the next section),the Next Generation High-Speed Rail program, and how states might obtainadditional funds for high-speed rail initiatives are also continuing issues.

Railroad Safety. The FRApromotes and regulates railroad safety. Increased railroad traffic volume and densitymake equipment, employees, and operations more vulnerable to accidents. TheAdministration proposed $146 million in FY2006 for FRA's safety program andrelated administrative and operating activities, $9 million (6%) above the FY2005enacted level. The House Committee on Appropriations recommended the requestedamount; the House concurred. The Senate Committee recommended the same; theSenate concurred. The conference bill provided the requested level, $146 million. The funds requested support FRA's goals of reducing rail accidents and incidents,reducing grade-crossing accidents, and contributing to the avoidance of serioushazardous materials transportation incidents.

The railroad safety statute was last reauthorized in 1994. Funding authorityfor the program expired at the end of FY1998. FRA's safety program continues usingthe authorities specified in existing federal railroad safety law and funds provided byannual appropriations. Though hearings have been held since 1994, the deliberationshave not resulted in agreement on reauthorization of FRA's regulatory and safetycompliance activities or change to any of the existing authorities used by FRA topromote railroad safety.

Next Generation High-Speed RailR&D. This program supports work on high-speed train controlsystems, track and structures technology, corridor planning, grade-crossing hazardmitigation, and high-speed non-electric locomotives. The Administration did notrequest any funding for this program for FY2006; it received $19 million in FY2005. The House Committee on Appropriations recommended $10.2 million; the Houseconcurred. The Senate Committee recommended $11.5 million; the Senateconcurred. The conference bill did not provided any funding for this program.

Amtrak. The Administrationrequested no funding for Amtrak for FY2006; Amtrak's Board of Directors (all ofwhom were appointed by the Administration) has requested $1.8 billion. The DOTInspector General has testified that Amtrak requires at least $1.4 billion to survivein its current form. Amtrak received $1.2 billion in FY2005; combined with thenearly $200 million in cash Amtrak had at the end of FY2004, that gave Amtrak $1.4billion for FY2005. Amtrak expects to end FY2005 with little or no cash on hand,partly due to its difficulties with its Acela trains on the Northeast Corridor. TheAdministration requested $360 million for the Surface Transportation Board toadminister Amtrak operations necessary to support commuter rail services in theevent of an Amtrak shutdown.

The House Committee on Appropriations recommended $550 million forAmtrak for FY2006, of which $50 million is for the Secretary of Transportation tomake capital grants for repairs to the Northeast Corridor, in consultation with Amtrakto select the projects most critical to help bring the Corridor into a state of goodrepair. The Committee also recommended $20 million to be held in reserve for theSurface Transportation Board to carry out directed service should Amtrak ceaseoperations, and $10 million to support the orderly discontinuation of Amtrak's mailand express service.

In addition, the Committee established a threshold subsidy figure for federalsupport to Amtrak's individual routes. Routes with a federal subsidy greater than $30per passenger would no longer be eligible for federal support. The Committee notedthat the states served by these routes could provide the funding needed to support theroutes; otherwise, the routes would be eliminated.

In its report accompanying the bill, the Committee wrote that "While theCommittee agrees that reform is critical, it is also equally important to sustainpassenger rail service in geographic regions where this service is viable." (9) In a pressrelease describing the bill's Amtrak provisions, the Committee wrote that the bill"fully supports rail service for ... 80 percent of Amtrak's ridership." (10) Whetherthe bill actually does that is not clear. The routes whose per passenger subsidy levelis below the Committee's threshold are chiefly in the Northeast, on the West Coast,and in the Midwest. The routes that would be eliminated serve other, largely rural,sections of the country.

In a press release describing the bill's Amtrak provisions, the Committeewrote that the bill "fully supports rail service for ... 80 percent of Amtrak'sridership." (11) Whether the Committee's bill actually did thatis not clear. The bill provided only $550 million for Amtrak, far less than the $1.4to $1.5 billion the DOT IG has testified that Amtrak needs for FY2006. (12) TheInspector General also testified concerning the idea that eliminating Amtrak'slong-distance trains would largely solve Amtrak's funding problem:

It's important to appreciate that whilethey are highly subsidized and often inefficient, their total elimination will not comeclose to making ends meet. Savings ultimately would be in the neighborhood ofaround $300 million, and the savings would not be immediate due to the need forlabor severance payments. (13)

Amtrak's then-President, David Gunn, asserting that Amtrak would owe itsemployees $1.4 billion over three years in severance payments if the long-distancetrains were eliminated, (14) said the Committee's recommended fundingwould lead to an Amtrak shut down, because the company could not meet debtservice, pay its obligations to the railroad retirement fund and make requiredpayments to the workers it would have to lay off. (15) In an"Additional Views" section of the Committee's report on the bill, the rankingmembers of the Committee and the transportation Subcommittee argued that the billwould make it impossible for Amtrak to operate even a limited number of routes. "After mandatory debt service payments of $275 million to $287 million andmandatory labor payments of $300 million or more [severance payments to Amtrakworkers laid off as a result of terminating the long distance routes] are made, nofunds would available to operate even a few routes and no funds would be availableto invest in sorely needed capital upgrades." (16)

During consideration of the bill on the House floor, the chair of the HouseTransportation and Infrastructure Subcommittee on Railroads, RepresentativeLaTourette, and the ranking member of the Transportation and InfrastructureCommittee, Representative Oberstar, introduced an amendment to increase Amtrak'sfunding by $626 million, to $1,176 million. This is $31 million less than Amtrak received for FY2005, but $276 million more than the House proposed for Amtrak forFY2005. The amendment was offset by reductions in several other accounts in thebill, and passed by voice vote.

Another amendment, introduced by the ranking member of the Transportationand Infrastructure Subcommittee on Railroads, Representative Brown, andRepresentative Menendez and Representative Rahall, deleted the AppropriationCommittee's recommendation that federal funding not be available to Amtrak routesrequiring more than $30 per passenger in subsidy. This amendment passed by a voteof 269-152.

The Senate Committee on Appropriations recommended $1.45 billion forAmtrak, $274 million more than the House-passed figure. The Committee alsorecommended several provisions affecting Amtrak operations. These includedforbidding the use of federal funding to support food and beverage service andsleeper car service on Amtrak's routes. (17) Other provisions would require Amtrak to adopta managerial accounting system that can identify average and marginal costs forAmtrak's services, allow Amtrak to impose a surcharge on its passenger tickets toraise money for capital improvements, and allow the Secretary of Transportation toimpose fees on commuter rail operations using the Northeast Corridor to cover thedirect maintenance costs imposed by each operator.

The Senate supported the Amtrak funding level recommended by theCommittee on Appropriations. The Senate approved two floor amendments deletingsome of the Amtrak provisions recommended by the Committee: one amendmentdeleted the restriction on food and beverage service and sleeper car service; the otherdeleted the permission to impose fees on commuter rail authorities using theNortheast Corridor. The White House issued a veto threat against the Senate'sAmtrak funding level, reflecting the Administration's stance that Amtrak should notreceive funding unless fundamental reforms are also made to Amtrak. (18)

The conference bill provided $1.315 billion to Amtrak, a 9% increase overthe FY2005 enacted level. The conference bill also included a number of provisionsaffecting Amtrak's receipt of, and use of, these funds.

These provisions continue a recent trend in which Congress has attempted toexert more control over Amtrak's finances. Beginning with Amtrak's FY2003appropriation ( P.L. 108-7 ), Congress directed that Amtrak's appropriation would notgo directly to Amtrak, but rather that the Secretary of Transportation would providefunding to Amtrak quarterly through the grant-making process. Congress alsoimposed several other requirements on Amtrak beginning in FY2003 which had theeffect of reducing Amtrak's discretion with its federal funding. Among these was arequirement that Amtrak submit a five-year business plan to Congress, which it didin April 2003. In this plan, Amtrak requested average annual federal support of $1.6billion for FY2004-FY2008 to both maintain the current network and begin toaddress the estimated $6 billion in backlogged maintenance needs. The plan did notpropose expansion of the existing rail network. Amtrak has submitted annualupdates of this Strategic Plan to Congress. Congress has not supported the fundinglevels requested in these Strategic Plans.

Amtrak's authorization expired in September 2002. Efforts to reauthorizeAmtrak have been stymied by disagreement over the future shape of federalpassenger rail policy. The House Committee on Transportation and Infrastructurehas ordered to be reported out legislation reauthorizing Amtrak at $2 billion annuallyfor FY2006-FY2009 ( H.R. 1630 ); similar legislation was reported outby the Committee in the 108th Congress but saw no further action. Legislationreflecting the Administration's reauthorization proposal, which would restructureAmtrak and transfer responsibility for administering and funding passenger railservice to the states, has also been introduced ( H.R. 1713 ); similarlegislation was also introduced in the 108th Congress, but was not supported. TheAmtrak Board has submitted a restructuring proposal to Congress, but no legislationhas been introduced reflecting that proposal. The Senate passed an Amtrakreauthorization bill as a floor amendment to S. 1932 , the DeficitReduction Omnibus Reconciliation Act of 2005, on November 3, 2005; theamendment was approved by a vote of 93-6. The reauthorization bill attached to S.<109>1932 was similar to S. 1516 , the Passenger Rail Investmentand Improvement Act of 2005, which was reported out of the Senate Committee onCommerce, Science, and Transportation in October 2005. The Amtrakreauthorization section was not included in the conference version of S.1932.

The DOT and the Amtrak Board have also made changes on their ownrecently. The Board voted in September 2005 to create a subsidiary to manage theNortheast Corridor, and in November 2005 to dismiss David Gunn, Amtrak'spresident and CEO since 2002. In the wake of a GAO report critical of the wayAmtrak's finances have been managed, the DOT announced that additional limitswould be placed on Amtrak's autonomy: Amtrak will be required to submit plans forimproving its financial reporting and management, and must provide a new annualreport to Congress describing its progress in implementing those plans.

Federal Transit Administration (FTA)

http://www.fta.dot.gov/

President Bush's FY2006 budget request for FTA was $7.8 billion, $167million (2%) more than FTA's FY2005 appropriation of $7.6 billion. The HouseCommittee on Appropriations recommended $8.5 billion, the amount authorized forFY2006 in the House's surface transportation reauthorization bill ( H.R. 3 as passed by the House). The House concurred. The Senate Committee onAppropriations recommended $8.2 billion, $430 million more than the request and$270 less than the House-passed figure. The Senate concurred. The guaranteedauthorization level for FTA for FY2006 in the surface transportation reauthorizationlegislation approved by Congress in July 2005 ( P.L. 109-59 ) is $8.6 billion. Theconference bill provided that amount.

The Administration's request also proposed changes to FTA's programstructure, reflecting the Administration's transit reauthorization proposals. Theseproposals included grouping all funding into three categories (administrativeexpenses, formula funds, and capital investment grants), zeroing out the BusDiscretionary grant program, and creating a New Freedom Initiative program to helpassist persons with disabilities with transportation to work. Other new proposals inthe President's request included an Intermodal Passenger Facilities Program toprovide intercity bus intermodal passenger facility grants ($75 million) and aNational Parks Legacy Project to improve access to national parks ($30 million);elements of some of these proposals were included in the surface transportationauthorization legislation signed into law in August 2005 (SAFETEA-LU; P.L.109-59 ).

FTA Program Structure andFunding. The largest transit programs are the Capital InvestmentGrants Program and the Urbanized Area Formula Grants Program. There are alsoseveral smaller formula and discretionary programs.

Capital Investment Grants Program (Section5309). This program (formerly known as Section 3) hasthree components: a discretionary grant program supporting creation of new transitinfrastructure ('New Starts'), a formula grant program supporting modernization offixed guideway transit infrastructure, and a discretionary grant program supportingthe acquisition of buses and bus facilities. The funds have typically been allocatedamong these three components on a roughly 40-40-20 basis, respectively, thoughSAFETEA-LU increases the share going to New Starts projects. The Administrationrequest reflected its proposed change to this program's structure: it requested $1.53billion for the transit New Starts program (up about 6% from $1.44 billion inFY2005). It also requested $1.3 billion for the fixed guideway modernizationcomponent (up 9% from FY2005's $1.2 billion), which would be placed under adifferent program area (an enlarged Formula Grants program area). No funding wasrequested for the bus and bus facilities discretionary component, which received$725 million in FY2005. (19)

The House Committee on Appropriation recommended $1.56 billion for theNew Starts program (9% above FY2005), $1.39 for fixed guideway modernization(15% above FY2005), and $693 million for buses and bus facilities (4% above thecomparable FY2005 figure). The House concurred. The Senate Committee onAppropriations recommended $1.39 billion for New Starts, $1.31 billion for fixedguideway modernization, and $797 million for bus and bus facilities; the Senateconcurred. The authorized level for FY2006 is $1.5 billion for New Starts, $1.4billion for fixed guideway modernization, and $822 million for bus and bus facilities. The conference bill funded the overall FTA authorized level for FY2006, withoutbreaking down the funding by program. However, it transfers $47.8 million from thefixed guideway modernization program to the New Starts account.

Urbanized Area Formula Program (Section5307). This program (formerly known as Section 9) providescapital and, in some cases, operating funds for urbanized areas (population 50,000or more). Eligible activities include bus and bus-related purchases and maintenancefacilities, fixed guideway modernization, new systems, planning, and operatingassistance. Funds are apportioned by a formula based, in part, on population (areaswith populations over 1,000,000 receive two-thirds of the funding; urbanized areaswith populations under 1,000,000 receive the remaining one-third) and on transitservice data. For FY2006, the Administration proposed $3.7 billion, up 3% fromFY2005's $3.6 billion.

The House Committee on Appropriations did not specify a figure for thisprogram; the FY2006 authorization for this program in the House version of surfacetransportation reauthorization legislation ( H.R. 3 ) was $3.98 billion(11% above FY2005). The Senate Committee on Appropriations recommended $3.7billion; the Senate concurred. The authorized level under SAFETEA-LU (whichadded new formulas, for small transit-intensive urbanized areas and for fast-growingand high-density states) is $3.8 billion.

With the enactment of TEA-21 in 1998, operating assistance funding wasgenerally eliminated for urbanized areas with populations over 200,000. However,preventive maintenance, generally considered an operating expense, is now eligiblefor funding as a capital expense. Urbanized areas under 200,000 population, andnon-urbanized areas (Section 5311), can use formula funds for either capital oroperating purposes.

Job Access and Reverse CommuteProgram. This program provides funding for transportationprojects that assist welfare recipients and low-income persons to find and get to workin suburban areas. The Administration proposed $164 million for it in FY2006, upfrom $125 million in FY2005, and proposed to convert it to a formula program. TheHouse Committee on Appropriations recommended $175 million for FY2006; theHouse concurred. The Senate Committee on Appropriations recommended $122million; the Senate concurred. Congress converted the program to a formula basisin SAFETEA-LU, which authorized $138 million for the program for FY2006.

Maritime Administration (MARAD)

http://www.marad.dot.gov

MARAD's mission is to promote the development and maintenance of a U.S.merchant marine capable of carrying the nation's waterborne domestic commerce, aportion of its waterborne foreign commerce, and to serve as a naval and militaryauxiliary in time of war. MARAD administers programs that benefit U.S. vesselowners, shipyards, and ship crews. For FY2006, the President requested $294million for MARAD, about 3% below the FY2005 level of $305 million. The HouseCommittee on Appropriations recommended $291 million. The House concurred. The Senate Committee on Appropriations recommended$323 million; the Senateconcurred. The conference bill provided $301 million.

The Maritime Guaranteed Loan Program (the "Title XI" program) providesguaranteed loans for purchasing ships from U.S. shipyards and for the modernizationof U.S. shipyards. The purpose of the program is to promote the growth andmodernization of U.S. shipyards. As in budget requests in prior years, theAdministration has requested no funds for new loan guarantees, calling the programa "corporate subsidy." The Administration has, however, requested $4 million forthe administration of existing loans, $1 million less than the FY2005 enacted figure. The House Committee supported this request; the House concurred. The SenateCommittee recommended $5 million for administrative expenses, the amountprovided in FY2005; the Senate concurred. Conferees agreed on $4 million.

For operations and training, the Administration requested $114 million, about5% above the FY2005 funding of $109 million. The House Committeerecommended $112 million; the House agreed to that. The Senate Committee onAppropriations recommended $119 million; the Senate concurred. Conferees agreedon $122 million. Most of this funding goes to the U.S. Merchant Marine Academyand to MARAD operations.

The Administration requested $156 million, 59% above the FY2005 level of$98 million, for the Maritime Security Program (MSP); the House Committeesupported this request, and the House concurred. The Senate Committee onAppropriations also recommended $156 million; the Senate concurred. Confereesagreed on $156 million, the requested amount. MSP pays to support a fleet ofprivately-owned U.S. flag commercial vessels engaged in international trade that areavailable to support the Department of Defense in a national emergency. The requestwould increase the size of the fleet from 47 to 60 vessels.

For the disposal of obsolete vessels in the National Defense Reserve Fleet(NDRF), the Administration requested $21 million, about the same as provided inFY2005; the House and Senate supported this request, and the conferees agreed toit. There are over 130 vessels in the NDRF that are awaiting disposal because oftheir age. These vessels have raised environmental concerns due to the presence ofasbestos and other hazardous substances. MARAD has until 2006 to dispose ofthese surplus ships, most of which are located on the James River in Virginia and inSuisan Bay, California.

The Administration requested no funding for the National Defense TankerVessel Construction program, and requested a rescission of the $74 millionappropriated for this program in FY2005. The House Committee on Appropriationsrecommended no funding for FY2006, but did not support the rescission of theFY2005 funding; the House concurred. The Senate Committee on Appropriationsrecommended $25 million for FY2006, and did not rescind any of the FY2005appropriation; the Senate concurred. Conferees agreed on the House position: nonew funding, no rescission of previous funding.

The National Defense Tanker Vessel Construction program was authorizedunder subtitle D of the Maritime Security Act of 2003 ( P.L. 108-136 ), NationalDefense Tank Vessel Construction Assistance. The program would provide up to$50 million per vessel for the construction of a commercial tank vessel in a U.S.shipyard, provided that the vessel was also capable of carrying militarily usefulpetroleum products and the shipowner entered into an agreement with theDepartment of Defense to make the ship available for the military's use in time ofwar. The intent of the law is to decrease the Department of Defense's reliance onforeign-flag oil tankers. An aspect of the program that has proved controversial isthe allowance of up to 10% of a vessel's total steel weight to be constructed by aforeign shipyard. Some argue this is necessary to allow U.S. shipyards to importforeign technological expertise, while others argue that it results in subsidies flowingto foreign shipyards.

Pipeline and Hazardous Materials Safety Administration (PHMSA)

http://www.phmsa.dot.gov

PHMSA was created with passage of the Norman Y. Mineta Research andSpecial Programs Improvement Act ( P.L. 108-426 , 118 Stat. 2423), which wassigned into law on November 30, 2004. The statute creates two new operatingadministrations in place of the Research and Special Programs Administration(RSPA). is charged with maintaining the safety and integrity of the Nation's pipelinetransportation system, as well as maintaining the safety of hazardous materialstransported by any mode. The Administration requested $117 million for PHMSAfor FY2006, up from $69 million in FY2005. The House Committee onAppropriations recommended $116 million, plus a limitation on obligations of $14million for the emergency preparedness grant program. The House concurred withthis recommendation. The Senate Committee on Appropriations also recommended$116 million, plus the $14 million limitation on obligations. The Senate concurredwith this recommendation. Conferees agreed on $116 million, plus the $14 millionlimitation on obligations for the emergency preparedness program.

Research and Innovative Technology Administration (RITA)

http://www.rita.dot.gov

RITA, the other offspring of the former Research and Special ProgramsAdministration, focuses on research and development activities, transportationanalysis, and statistics (it includes the Bureau of Transportation Statistics, formerlya separate agency within DOT). RITA also conducts transportation-related researchand provides training to transportation professionals in safety methods andtechnologies (through the Transportation Safety Institute) on a reimbursable basis.

The Administration requested $6.3 million for RITA in the FY2006 budgetto carry out DOT's priorities for innovation and research in transportationtechnologies and concepts, up from a comparable level of $4.3 million in FY2005.The House Committee on Appropriations recommended $4.3 million for FY2006;the House concurred. The Senate Committee on Appropriations also recommended$4.3 million; the Senate concurred. Conferees agreed on $5.8 million.

Appendix A: List of Transportation Acronyms

AIP: Airport Improvement Program (FAA)

AIR21 (sometimes FAIR21): the Wendell H. Ford Aviation Investment and ReformAct for the 21st Century ( P.L. 106-181 ), the previous aviation authorizing legislation

ARAA: the Amtrak Reform and Accountability Act of 1997 ( P.L. 105-134 ), theprevious Amtrak authorizing legislation

ATSA: the Aviation and Transportation Security Act ( P.L. 107-71 ), legislation whichcreated the Transportation Security Administration within the DOT

BRR: Bridge Replacement and Rehabilitation program (FHWA)

BTS: Bureau of Transportation Statistics

CMAQ: Congestion Mitigation and Air Quality program (FHWA)

DOT: Department of Transportation

EAS: Essential Air Service (FAA)

F&E: Facilities and Equipment program (FAA)

FAA: Federal Aviation Administration

FAHP: Federal-Aid Highway Program (FHWA)

FHWA: Federal Highway Administration

FMCSA: Federal Motor Carrier Safety Administration

FRA: Federal Railroad Administration

FTA: Federal Transit Administration

Hazmat: Hazardous materials (safety program in PHMSA)

HPP: High Priority Projects (FHWA)

HTF: Highway Trust Fund

IM: Interstate Maintenance program (FHWA)

ITS: Intelligent Transportation Systems (FHWA)

MCSAP: Motor Carrier Safety Assistance Program (FMCSA)

New Starts: part of the FTA's Capital Grants and Loans Program which funds newfixed-guideway systems or extensions to existing systems

NHS: National Highway System; also a program within FHWA

NHTSA: National Highway Traffic Safety Administration

NMCSA: National Motor Carrier Safety Administration

O&M: Operations and Maintenance program (FAA)

OIG: Office of the Inspector General

OST: Office of the Secretary of Transportation

PHMSA: Pipeline Hazardous Materials Safety Administration

RABA: Revenue-Aligned Budget Authority

RITA: Research and Innovative Technology Administration

RD&T: Research, Development and Technology program (FHWA)

RE&D: Research, Engineering and Development program (FAA)

RSPA: the former Research and Special Projects Administration

SAFETEA-LU: Safe, Accountable, Flexible, Efficient Transportation Equity Act: ALegacy for Users ( P.L. 109-59 ), the highway and transit authorizing legislationenacted in 2005.

SCASD: Small Community Air Service Development program (FAA)

Small Starts: a component added to the transit Capital Investment Grant program("New Starts") in SAFETEA-LU to support new transit infrastructure projectsseeking less than $75 million in federal funding.

STB: Surface Transportation Board

STP: Surface Transportation Program (FHWA)

TCSP: Transportation and Community and System Preservation Program (FHWA)

TEA-21: Transportation Equity Act for the 21st Century ( P.L. 105-178 ), the highwayand transit authorizing legislation enacted in 1998

TIFIA: Transportation Infrastructure Finance and Innovation Act program (FHWA)

TSA: Transportation Security Administration (now in the Department of HomelandSecurity)

Vision 100: Century of Aviation Reauthorization Act ( P.L. 108-176 ), the aviationreauthorization act enacted in 2003

Appendix B: The Transportation Appropriations Framework

Transportation is function 400 in the annual unified congressional budget. Itis also considered part of the discretionary budget. Funding for the DOT budget isderived from a number of sources. The majority of funding comes from dedicatedtransportation trust funds. The remainder of DOT funding is from federal Treasurygeneral funds. The transportation trust funds include the highway trust fund, whichcontains two accounts, the highway trust account and the mass transit account; theairport and airway trust fund; and the inland waterways trust fund. All of theseaccounts derive their respective funding from specific excise and other taxes.

In FY2005 trust funds accounted for three-fourths of total federaltransportation spending. Together, highway and transit funding constitute the largestcomponent of DOT appropriations. Most highway and transit programs are fundedwith contract authority derived by the link to the highway trust fund. This is verysignificant from a budgeting standpoint. Contract authority is tantamount to, butdoes not actually involve, entering into a contract to pay for a project at some futuredate. Under this arrangement, specified in Title 23 U.S.C., authorized funds areautomatically made available at the beginning of each fiscal year and may beobligated without appropriations legislation; although appropriations are required tomake outlays at some future date to cover these obligations.

Where most federal programs require new budget authority as part of theannual appropriations process, transportation appropriators are faced with theopposite situation. That is, the authority to spend for the largest programs under theircontrol already exists, and the mechanism to obligate funds for these programs alsois in place.

Vision 100 -- Century of Aviation Reauthorization Act

The vast majority of the Federal Aviation Administration's budget is fundedby the airport and airway trust fund, also known as the aviation trust fund, which issupported by user fees and excise taxes. Funding for the FAA's two capitalprograms, the Airport Improvement Program and the Facilities and Equipment program, as well as the Research, Engineering, and Development funding, aresupported entirely by the aviation trust fund. The Operations and Maintenance(O&M) component -- the largest component of the FAA budget -- is, in most years,funded partially from aviation trust fund revenues and partially from Treasury generalfund revenues. Using general fund revenues for O&M is somewhat controversial andthe size of the general fund share of the O&M budget does at times emerge as anissue in both the transportation authorization and appropriations process. One of thejustifications of using general fund revenues to support O&M is the belief thatCongress's original intent was that the aviation trust fund was mostly for the capitaland research components of the FAA budget. The other rationale was that the publicsector, as well as the non-flying public, benefit from the operation of the nation'saviation system and should help pay for this benefit through general tax revenues.

The recent economic difficulties of the aviation industry have had a negativeeffect on trust fund revenues. Historically, the trust fund has ended each year withan uncommitted balance. Since 2001 the uncommitted balance has been decreasing. According to GAO, the trust fund's uncommitted balance decreased from $7.3 billionin 2001 to $4.8 billion in 2002 and has continued to fall at a rate of $1 billion a yearsince. (20) GAO found this occurred because revenues started trending downward in 1999,while expenditures have exceeded revenues since FY2001. The increase inexpenditures from the trust fund reflected increased spending under two authorizationbills: the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century(AIR21; P.L. 106-181 ), which covered FY1999-FY2003, significantly increasedFAA spending, especially capital spending; and Vision 100 -- Century of AviationReauthorization Act (Vision 100; P.L. 108-76 ), covering FY2004-FY2007, whichauthorized continued increases in spending, although at a more modest rate. GAOhas warned that revenue declines as small as 5%-10% below projected levels couldeliminate the trust fund's uncommitted balances under current authorization levels.

AIR21 created a budgetary regime for aviation programs that was closelylinked to the availability of funds in the trust fund. The act requires appropriators touse aviation trust funds only for aviation purposes, and to fully fund FAA's capitalprograms (the Airport Improvement Program and the Facilities and Equipmentprogram) at authorized levels, using House and Senate point-of-order rules forenforcement. One provision in the act made it out of order to consider legislationthat spends aviation trust fund revenues for non-aviation purposes. Anotherprovision made it out of order to consider legislation funding FAA's Operations andMaintenance and Research, Engineering and Development budgets if the AirportImprovement Program and Facilities and Equipment program are funded at less thantheir authorized levels. Vision 100 continued this arrangement. This budgetaryregime was created at a time when revenues to the trust fund were sharply increasing. Should revenues decline significantly, funding beyond the guaranteed AIP and F&Ecomponents could be severely constrained unless supported by the general fund.

The Transportation Equity Act for the 21st Century (TEA-21) and the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU)

During the 105th and 106th Congresses, major legislation changed therelationships between the largest transportation trust funds and the federal budget.The Transportation Equity Act for the 21st Century (TEA-21/ P.L. 105-178 ) linkedannual spending for highway programs directly to revenue collections for thehighway trust fund. In addition, core highway and mass transit program funding wasgiven special status in the discretionary portion of the federal budget by virtue of thecreation of two new budget categories. The act thereby created a virtual "firewall"around highway and transit spending programs. The funding guarantees were set upin a way that makes it difficult for funding levels to be altered as part of the annualbudget/appropriations process. Additional highway funds can be provided annuallyby a mechanism called "Revenue Aligned Budget Authority" (RABA); RABA fundsaccrue to the trust fund as a result of increased trust fund revenues. For FY2003,however, the RABA adjustment, if it had been applied during the appropriationsprocess, would have led to a significant and unexpected drop in the availability ofhighway obligational funding. Congress set the RABA adjustment for FY2003 to $0(in a provision in P.L. 107-206 ) and appropriators ultimately provided FY2003highway funding at the same level as provided for FY2002 (which was $4 billionhigher than the FY2003 authorized level). RABA was not included in the FY2004or FY2005 appropriations calculations.

TEA-21 changed the role of the House and Senate appropriations and budgetcommittees in determining annual spending levels for highway and transit programs.The appropriations committees are precluded from their former role of setting anannual level of obligations. These were established by TEA-21 and were adjustedby an annual RABA computation. TEA-21 also limited the discretion of the Houseand Senate appropriations committees in exercising what some Members view astheir once traditional option of changing spending levels for specific core programsor projects, though during the authorization period appropriators increasinglyreturned to their customary use of this option.

On July 29, 2005, Congress adopted new surface transportation authorizationlegislation, the Safe, Accountable, Flexible, Efficient Transportation Equity Act: ALegacy for Users (SAFETEA -- LU/ P.L. 109-59 ). This legislation maintains thegeneral program structure of TEA-21. It continued the practice of guaranteeing theauthorized funding levels, and further diminished the discretion of the House andSenate appropriators by converting several discretionary grant programs to formulaprograms.

Appendix C: Transportation Budget Terminology

Transportation budgeting uses a confusing lexicon (for those unfamiliar withthe process) of budget authority and contract authority -- the latter, a form ofbudget authority. Contract authority provides obligational authority for the fundingof trust fund-financed programs, such as the federal-aid highway program. Prior toTEA-21, changes in spending in the annual transportation budget component hadbeen achieved in the appropriations process by combining changes in budget/contractauthority and placing limitations on obligations . The principal function of thelimitation on obligations is to control outlays in a manner that corresponds tocongressional budget agreements.

Contract authority is tantamount to, but does not actually involve, enteringinto a contract to pay for a project at some future date. Under this arrangement,specified in Title 23 U.S.C., which TEA-21 amended, authorized funds areautomatically made available to the states at the beginning of each fiscal year andmay be obligated without appropriations legislation. Appropriations are required tomake outlays at some future date to cover these obligations. TEA-21 greatly limitedthe role of the appropriations process in core highway and transit programs becausethe act enumerated the limitation on obligations level for the period FY1999 throughFY2003 in the Statute (112 Stat. 107).

Highway and transit grant programs work on a reimbursable basis : statespay for projects up front and federal payments are made to them only when work iscompleted and vouchers are presented, months or even years after the project hasbegun. Work in progress is represented in the trust fund as obligated funds andalthough they are considered "used" and remain as commitments against the trustfund balances , they are not subtracted from balances. Trust fund balances,therefore, appear high in part because funds sufficient to cover actual and expectedfuture commitments must remain available.

Both the highway and transit accounts have substantial short- and long-termcommitments. These include payments that will be made in the current fiscal yearas projects are completed and, to a much greater extent, outstanding obligations tobe made at some unspecified future date. Additionally, there are unobligatedamounts that are still dedicated to highway and transit projects, but have not beencommitted to specific projects.

Two terms are associated with the distribution of contract authority funds tothe states and to particular programs. The first of these, apportionments, refers tofunds distributed to the states for formula driven programs. For example, all nationalhighway system (NHS) funds are apportioned to the states. Allocated funds, arefunds distributed on an administrative basis, typically to programs under directfederal control. For example, federal lands highway program monies are allocated;the allocation can be to another federal agency, to a state, to an Indian tribe, or tosome other governmental entity. These terms do not refer to the federal budgetprocess, but often provide a frame of reference for highway program recipients, whomay assume, albeit incorrectly, that a state apportionment is part of the federal budgetper se.