Appropriations for FY2002: Transportation and Related Agencies
Released: 2002-01-15T00:00:00

Most Recent Developments

On December 18, 2001, President Bush signed the FY2002 Department of Transportation andRelated Agencies conference agreement ( H.Rept. 107-308 ; P.L. 107-87 ) appropriating a total of$59.588 billion (a 2.5% increase above the FY2001 enacted level). The enacted bill provides $507million more than in the House bill and $391 million less than the Senate bill. At $32.895 billion,the Federal Highway Administration (FHWA) receives slightly less than in FY 2001. The FederalRailroad Administration (FRA) is funded at $734 million, $21 million less than enacted in FY2001. The other major agencies all get increases. The Federal Aviation Administration (FAA) budgetincreases roughly 6% to $13.295 billion; the Federal Transit Administration (FTA) budget increases8% to $6.747 billion; and the Coast Guard budget receives an increase of 12% to $5.031 billion.

The September 11, 2001, simultaneous hijacking of four airliners from three different airports and the enormous loss of life that resulted from the terrorists' suicide-bomber tactics had a quickimpact on transportation appropriations. Congress responded to the terrorist attacks by passingthe 2001 Emergency Supplemental Appropriations Act for Recovery from and Response to TerroristAttacks on the United States ( P.L. 107-38 ). The bill provides $40 billion to pay the costs of a varietyof responses including "providing increased transportation security." The funds may be transferredto any authorized federal activity to meet the purposes of the act. As of this writing, roughly $1.9billion has been approved for transfer to the Department of Transportation (DOT). The length ofavailability of these funds varies depending on the purpose of the spending.

The Transportation Appropriations Framework

Transportation is function 400 in the annual unified congressional budget. It is also consideredpart of the discretionary budget. Funding for the DOT budget is derived from a number of sources.The majority of funding comes from dedicated transportation trust funds. The remainder of DOTfunding is from federal Treasury general funds. The transportation trust funds include: the highwaytrust fund, the transit account of the highway trust fund, the airport and airway trust fund, and theinland waterways trust fund. All of these accounts derive their respective funding from specificexcise and other taxes.

In FY2002 trust funds accounted for well over two-thirds of total federal transportation spending. Together, highway and transit funding constitute the largest component of DOTappropriations. Most highway and the majority of transit programs are funded with contract authorityderived by the link to the highway trust fund. This is very significant from a budgeting standpoint. Contract authority is tantamount to, but does not actually involve, entering into a contract to pay fora project at some future date. Under this arrangement, specified in Title 23 U.S.C., authorized fundsare automatically made available at the beginning of each fiscal year and may be obligated withoutappropriations legislation; although appropriations are required to make outlays at some future dateto cover these obligations.

Where most federal programs require new budget authority as part of the annual appropriations process, transportation appropriators are faced with the opposite situation. That is, the authority tospend for the largest programs under their control already exists, and the mechanism to obligatefunds for these programs also is in place.

Prior to the FY1999 DOT Appropriations Act, changes in spending in the annual transportation budget component had been achieved in the appropriations process by combining changes inbudget/contract authority and by placing limitations on obligations. The principal function of thelimitation on obligations is to control outlays in a manner that corresponds to congressional budgetagreements.

Changes in Transportation Appropriations as a Result of TEA21

Beginning in 1999, TEA21 changed the transportation budgetary process in two ways. First, it created new budget categories; and, second, it set statutory limitations on obligations. TEA21amends the Balanced Budget and Emergency Deficit Control Act of 1985 to create two new budgetcategories: highway and mass transit. TEA21 further amends the budget process by creating astatutory level for the limitation on obligations in each fiscal year from FY1999 to FY2003.

The net effect of the creation of these new budget categories is a predetermined minimum level of funding for core highway and transit programs, referred to in TEA21 as a "discretionary spendingguarantee." The highway and mass transit categories are separated from the rest of the discretionarybudget in a way that prevents the funds assigned to these categories from being used for any otherpurpose. These so called "firewalls" are viewed, in the TEA21 context, as guaranteed and/orminimum levels of funding. Additional funds above the firewall level can be made available forhighway and transit programs through the annual appropriations process.

In addition, TEA21 provides a mechanism to adjust the amounts in the highway account (but not the transit account) to correspond with increased or decreased receipts in highway-generatedrevenues. This Revenue Aligned Budget Authority (RABA) redistributes to the various states, forobligational TEA21 highway programs (also known as core programs), the trust fund revenues thatare in excess of projected receipts. These additional revenues are allocated to the states using theformulas spelled out in the law. However, the FY2000, FY2001, and FY2002 Administrationrequests proposed redirection of RABA funds from highway programs to other DOT initiatives. Inthe end, the FY2000 and FY2001 DOT appropriations acts did not adopt the proposed redirectionof RABA funds. In FY2002, however, the Administration request is honored in part. Moreimportantly, the FY2002 Act makes major redistributions of RABA funding outside of the coreprograms. These distributions will be discussed in the Federal Highway Administration (FHWA)section of this report.

TEA21 changes the role of the House and Senate appropriations and budget committees in determining annual spending levels for highway and transit programs. The appropriationscommittees are precluded from their former role of setting an annual level of obligations. In addition,it appears that the TEA21 precludes, at least in part, the House and Senate appropriations committeesfrom exercising what some Members view as their traditional option of changing spending levelsfor specific programs or projects. In the FY2000 appropriations act, the appropriators took sometentative steps to regain some of their discretion over highway spending. The FY2000 Act called forthe redistribution of some funds among programs and added two significant spending projects. Inthe FY2001 appropriations act, the appropriators continued in this vein by adding funds for largenumbers of earmarked projects. Further, the FY2001 Act called for redirection of a limited amountof funding between programs and includes significant additional funding for some TEA21 programs. This trend continues, and even accelerates, in the FY2002 Act as appropriators have made majorredistributions of RABA funds and, in some instances, have transferred RABA funds to agencies thatwould not be eligible for RABA funding from TEA21.

As suggested earlier, the TEA21 firewalls appear to diminish the flexibility of the committees on appropriations to meet the goals of the annual budget process, because the committees can onlyadjust the DOT agency or program budgets outside the firewalls. Hence, any reduction in spendingfor function 400 must be allocated to agencies or programs other than highways or transit and, as willbe discussed in the next section, most aviation programs.

Changes in Transportation Appropriations as a Result of the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (FAIR21 or AIR21)

FAIR21 ( P.L. 106-181 , signed April 5, 2000) provides a so-called "guarantee" for FAA program spending. The guarantee for aviation spending, however, is significantly different from thatprovided by TEA21 to highway and transit programs. Instead of creating new budget categories, theFAIR21 guarantee rests on adoption of two point-of-order rules for the House and the Senate. Thefirst point-of-order rule prevents Congress from considering any appropriations legislation foraviation purposes that does not spend all of the "total budget resources." As defined by FAIR21, totalbudget resources are essentially the revenues and interest accruing to the aviation trust fund. Thesecond point-of-order prevents any spending for Federal Aviation Administration (FAA) operationsand maintenance (O&M) or for research, engineering and development (RE&D), unless the AirportImprovement Program (AIP) and the facilities and equipment (F&E) portions of the FAA accountare funded at their fully authorized levels.

Almost all observers view the FAIR21 guarantees as being somewhat weaker than those provided by TEA21 for highway and transit programs because Congress can, and sometimes does,waive points-of-order during consideration of legislation. In addition, there is a sense thatappropriators might still have some latitude to make significant changes to FAA O&M funding,which is dependent on both trust-fund and general-fund contributions. For FY2001 and FY2002,however, no point-of-order waivers were considered.

Supporters of FAIR21 believe the Act requires significant new spending on aviation programs. And, for at least the FY2001 appropriations cycle, this has been the case. Enactment of FAIR21means that transportation appropriators have total control over spending for only the Coast Guard;the Federal Railroad Administration (FRA), which includes Amtrak; and a number of smaller DOTagencies. All of these agencies were concerned about their funding prospects. However, the FY2001Act provided budget increases for all major DOT agencies, except for the FRA budget.

Supporters of the Coast Guard are especially concerned about this new transportation appropriations environment. The Coast Guard is not funded by a trust fund and cannot claim auser-fee base to support an argument for its own budget firewalls. The Coast Guard has a uniquestatus within the transportation budget category because of its wartime role in national defense. Itis not unusual for the Coast Guard to receive some funds from military appropriations during theannual appropriations process. It is possible that the Coast Guard will seek additional funding fromthe military side of the budget in the years ahead if additional funds from transportationappropriations do not become available. In FY2001, however, the existence of a significant budgetsurplus abated these concerns. For FY2002, national security concerns have overridden the budgetaryissues, and the agency will receive a significant increase in funding.

Table 1. Status of Department of Transportation Appropriations for FY2002

Key Policy Issues

Issue Overview

With release of the Bush Administration's FY2002 budget proposal on April 9, 2001, the budget debate began in earnest. In proposing a Department ofTransportation (DOT) budget of roughly $59 billion the Administration wasproposing a roughly 1.5% increase over last years budget total. (1) The FY2001 budget,however, included slightly less than $2.8 billion of what the Administration referredto as "one time projects" that were added to the budget of the Federal HighwayAdministration (FHWA). If these are subtracted, the Administration's FY2002proposal could be seen as a 6.5% increase. The budget request was in conformancewith the basic outline of both the Transportation Equity Act for the 21 ST Century(TEA21; P.L. 105-178 ), which authorized spending on highways and transit, and theaviation funding authorized in the Wendell Ford Aviation Investment and ReformAct of the 21st Century (FAIR21 or AIR21; P.L. 106-181 ). Although there wasconsensus on funding the larger programs at or above their guaranteed levels, therewere still number of other issues that arose during the debate.

The Conference Agreement (H.Rept. 107-308; P.L. 107-87). Three months after the House andSenate had passed their versions of H.R. 2299 , Congress agreed to theconference report on the bill that resolved differences between the two bills, not onlyon money and program matters, but also on the President's objections to provisionsin the House and Senate bills concerning the implementation of the North AmericanFree Trade Agreement (NAFTA) provisions on access of Mexican commercial trucksto the U.S. market. President Bush signed P.L. 107-87 on December 18, 2001.

P.L. 107-87 provides $59.6 billion for DOT, roughly $600 million more than the President requested and $1.5 billion more than enacted for FY2001. Most DOTagencies, however, are funded at or near the Administration's request.

Compared to FY2001, the FY2002 DOT appropriations act (hereafter referred to as the FY2002 Act) provides significant increases for most DOT agencies. TheFederal Aviation Administration (FAA) budget increases roughly 6% to $13.295billion; the Federal Transit Administration (FTA) budget increases 8% to $6.747billion; and the Coast Guard receives an increase of 12% to $5.031 billion. Twoagencies get slightly less than in FY2001: at $32.895 billion, the Federal HighwayAdministration (FHWA) receives slightly less than in FY 2001; the Federal RailroadAdministration (FRA) is funded at $734 million, $21 million less than enacted inFY2001. The FY2002 Act also provides $1.25 billion (to be offset by newlyauthorized user and airline fees) for the Transportation Security Administration,recently created by the Aviation and Transportation Security Act ( P.L. 107-71 ).

Transit Issues. The Administration's budget request had proposed to convert the Federal Transit Administration's (FTA)Bus and Bus Facilities Program and Job Access and Reverse Commute Program fromdiscretionary to formula programs. Both these programs have been subject toearmarking in the past. Formula programs are generally not available for earmarking. Both the House and Senate rejected these program changes.

The Administration also proposed to reduce the maximum federal share under the FTA's New Starts Program from 80% to 50%, beginning in FY2004. There arealways many more transit project proposals than funds to support them. Supportersof this change see it as a way to fund more New Starts projects, and also argue thata 50% local share would assure that only projects supported by a strong localcommitment would get funded. On the other hand, some argue that the reducedfederal share could skew the awards process to favor projects in wealthier urban areasand make the provision of funding less needs based. The FY2002 Act directs FTAnot to sign any new full-funding grant agreements after September 30, 2002, thathave a maximum federal share higher than 60%.

RABA Distribution and Congressional Earmarking. When the FY2002 DOT budget debate began,there were a number of reasons to expect that the treatment of RABA would be atissue. First, the Bush Administration's budget request proposed two RABAset-asides. One would have provided $56 million to support construction of state andfederal motor carrier inspection facilities along the U.S.-Mexico border. A secondset-aside, of $145 million, would have supported two pilot programs that make upthe Administration's proposed New Freedom Initiative. Of this amount, $45 millionwould have been used to promote innovative transportation solutions for thedisabled. The remaining $100 million would have been used to fund competitivematching grants to promote access to alternative transportation. Second, the ClintonAdministration had previously proposed RABA set-asides in its FY2000 and FY2001budgets. Congress, however, did not adopt the requested redirection of RABA fundsduring those years. Third, the FY2000 and FY2001 DOT Appropriations Acts didmake a modest change in the RABA distribution. Both years' Acts redirected theRABA funds from allocated (commonly referred to as discretionary) programs,which are under the aegis of the FHWA, to the core highway programs that aredistributed to the states by formula. Some observers thought this might happen againin FY2002. Finally, the large size of the FY2002 RABA, $4.543 billion, increasedthe attractiveness for using these funds for congressional initiatives or forearmarking.

The FY2002 Act sets aside $56.3 million of RABA funds for U.S.-Mexico border infrastructure but no RABA funds are set aside for the President's NewFreedom Initiative.

More controversial is FY2002 Act's redirection of $423 million of the RABA revenues that under TEA21 are added to the formula funds distributed to the states. Instead, the $423 million is added to the $574 million of FY2002 RABA, that, underTEA21, is distributed to the allocated (i.e. discretionary) programs. This made a totalof $997 million in RABA funding available for distribution to the FHWA's allocated programs. The conference report language, however, specifies the programs that areto be funded and provides the dollar amounts for each. Only programs provided withRABA set asides in the conference report receive any of the money; i.e., allocatedprograms that are not given set asides get no RABA funding. Most notable of theprograms that lose their RABA funds under FY2002 Act is the High Priority Projectprogram. Among the programs benefitting from these additional funds are: IndianReservation Roads ($35.6 million); Public Lands Highways ($31.8 million and $45.1million); Park Roads and Parkways ($21.3 million); ferry boats and ferry terminalfacilities ($25.6 million); the Corridors and Borders program ($352.3 million); theTransportation and Community and System Preservation pilot program($251.1million); the Interstate Maintenance Discretionary program ($76 million); theBridge Discretionary program ($62.5 million); and for border infrastructureimprovements ($56.3 million). Most of the money from these RABA set-asides isearmarked in conference report H.Rept. 107-308 . (2) Some members of Congress haveexpressed dissatisfaction with the degree to which these set asides are innonconformance with TEA21.

Section 330 of the conference report also provides an appropriation of $144 million for surface transportation grants. The funds are earmarked in H.Rept.107-308 . The extent of earmarking, especially of RABA funds, continues to becontroversial.

NAFTA Implementation and the Mexican Trucking Issue. The most contentious debate during both House andSenate consideration of the DOT appropriation involved the implementation of theNorth American Free Trade Agreement (NAFTA) provisions regarding the operationof Mexican trucks throughout the U.S. NAFTA provisions prescribe a phased-inimplementation which was to be completed by January 1, 2000. Citing safetyconcerns, the Clinton Administration refused to allow Mexican trucks beyond theborder commercial zones. Mexico filed a complaint against the U.S. under NAFTAdispute resolution. Recently the arbitration panel held against the U.S. The BushAdministration announced its intention to implement the trucking access provisionsof NAFTA by the end of 2001. A provision added by amendment in the House to H.R. 2299 , prohibited the use of funds to process applications byMexico-based trucking firms for authority to operate beyond U.S. bordermunicipalities and commercial zones. Taking a different approach, the Senate billincluded a series of safety requirements and preconditions to be met before any fundsappropriated can be used to review or process an application by a Mexican motorcarrier to operate trucks beyond the border commercial zone. Among therequirements and preconditions required in the Senate bill were: full on-site safetycompliance review of Mexican motor carrier companies; equipping all U.S.-Mexicoborder stations with weigh-in-motion systems; proof of valid insurance with aU.S.-based insurance company; and requiring that Mexican commercial motorvehicles may not cross at a border crossing unless an inspector is on duty. After longand contentious debate, the Senate passed H.R. 2299 (as amended) withvirtually all of the Mexican trucking provisions intact.

The FY2002 ACT incorporates Senate provisions, some of which have been modified, regarding processes and measures to promote the safety of cross-bordertrucking between the United States and Mexico. The modifications were sufficientto overcome Bush Administration concerns that the Senate-passed version of the bill might violate NAFTA. The agreement provides for $25.866 million for salaries,expenses, and capital costs to implement these provisions. These funds are inaddition to funds provided in the appropriation for the Federal Motor Carrier SafetyAdministration (FMCSA) and the Motor Carrier Safety Assistance Program(MCSAP) that also are intended to enhance the ability of U.S. DOT and the states topromote the safety of Mexican trucks and buses entering the United States. (See CRS Report RL31028, North American Free Trade Agreement: Truck SafetyConsiderations , by Paul Rothberg)

Antiterrorism Emergency Supplemental Appropriations

The September 11, 2001, simultaneous hijacking of four airliners from three different airports and the enormous loss of life that resulted from the terrorists'suicide-bomber tactics quickly had an impact on transportation appropriations. Congress responded to the terrorist attacks by passing the 2001 EmergencySupplemental Appropriations Act for Recovery from and Response to TerroristAttacks on the United States ( P.L. 107-38 ), hereafter referred to as the EmergencySupplemental Appropriations Act. The bill provides $40 billion to pay the costs ofa variety of responses including "providing increased transportation security." This$40 billion was divided into three categories of availability: $10 billion was availableimmediately for allocation; $10 billion was to be made available 15 days aftercongressional notification; and the final $20 billion, which requires separatelegislation to appropriate the funds. The funds may be transferred to any authorizedfederal activity to meet the purposes of the Act.

As of November 30, 2001, $640 million of the immediate and 15-day funds have been allocated for transportation security purposes. Of the final $20 billionauthorized, the President requested $734 million be made available for transportationsecurity through appropriating legislation. The FY2002 Department of Defense(DOD) appropriations bill ( H.R. 3338 ; P.L. 107-117 ) was the vehiclefor allocating funds from the final $20 billion. The FY2002 DOD AppropriationsAct allocated $1.296 billion for transportation projects and activities, mostly forsecurity purposes. All together, P.L. 107-38 , provided $1.936 billion in emergencyappropriations for transportation. (For detail on the proposed allocation of theemergency supplemental funding see: CRS Report RL31187(pdf) . Terrorism Funding:Congressional Debate on Emergency Supplemental Allocations , by [author name scrubbed] and[author name scrubbed]).

In this report, the agency totals, the agency funding charts, and table 3 at the end of the report do not include these supplemental amounts. The emergencysupplemental appropriations are, however, discussed in the text where appropriate.

Major Funding Trends

Table 2 shows DOT actual or enacted funding levels for FY1988 through FY2001. Total annual DOT funding more than doubled from FY1988 throughFY2001. The FY2002 enacted funding for DOT, at roughly $59.6 billion, continuesthe upward trend in FY2002.

Table 2. Department of Transportation Appropriations: FY1988 to FY2002 (in millions of dollars)

a "Actual" amounts from FY1988 to FY1998 include funding levels initially enacted by Congress in the Department of Transportation and Related AgenciesAppropriations bill as well as any supplemental appropriations and rescissionsenacted at a later date for that fiscal year.

b Amounts include limitations on obligations, DOD transfers, and exemptobligations.

c FY2001 and FY2002 enacted figures are drawn from budget tables provided by theHouse Committee on Appropriations.

Transportation Security Administration

The Aviation and Transportation Security Act ( P.L. 107-71 ), passed in the aftermath of the September 11 attack, created a new agency in the DOT--theTransportation Security Administration (TSA). This new agency will be headed byan Under Secretary for Security who is appointed by the President and confirmed bythe Senate for a fixed five-year term. With respect to air transportation, the UnderSecretary assumes the civil aviation security functions of the FAA as promulgatedunder 49 U.S.C. 449. TSA is responsible for hiring, training, testing, and developingstandards for security personnel who screen passengers and baggage and is also responsible for day-to-day screening operations. The new security administration also deploys Federal Security Managers at each airport to oversee screening anddeploys Federal Air Marshals for every flight with "high security risk." TSA is assigned the task of improving airport perimeter-access security and acquires anddeploys explosive-detection machines and other equipment designed to detectchemical or biological weapons. The Act imposes various deadlines in the comingyear that the agency must meet in providing aviation security services.

TSA is responsible for the security of all modes of transportation, passenger and cargo. During a national emergency, TSA coordinates and oversees domestictransportation for air, rail, maritime (including seaports), and other surface transportmodes and liaises threat assessments among appropriate federal, state, and localagencies. The agency develops policies, strategies, and plans for dealing withsecurity threats, and undertakes R&D activities to enhance transportation security.

The FY2002 Act provides $1.25 billion in FY 2002 for the TSA. This appropriation is to be offset with collections from the "security service fee"authorized under the Aviation and Transportation Security Act (ATSA). ATSAimposes a fee of up to $2.50 per passenger (limited to $5 per one-way trip) to pay forcivil aviation security services. If this fee proves to be insufficient to pay for the costof security services, TSA may impose a fee on air carriers. The revenue collectedfrom this air carrier fee is limited to the amount air carriers paid in calender year2000 for screening services.

Emergency Supplemental Appropriations Act (P.L. 107-38). An allocation of $94.8 million in emergencyfunds made available in P.L. 107-38 is designated for TSA in the FY2002 DODAppropriations Act ( P.L.107-117 ). $93.3 million is for security grants to nationalseaports and $1.5 million is for intelligence and security activities.

Coast Guard

http://www.uscg.mil/

The Coast Guard appropriation is constrained, and its management challenged, by increased responsibilities for drug and illegal immigrant interdiction on the highseas as well as by its aging water craft and aircraft. The Administration requested$5.056 billion for Coast Guard funding in FY2002. Compared to the $4.511 billionappropriated in FY2001, the FY2002 request was $545.2 million, or 12%, more. TheHouse approved $4.966 billion ( H.R. 2299 ; H.Rept. 107-108 ), $60million less than requested. In addition to these discretionary funds, there aremandatory funds of $64 million for State Boating Safety grants and $61.2 millionfrom the Oil Spill Liability Trust Fund. (3) The Senateapproved $5.102 billion( H.R. 2299 ; H.Rept. 107-108 , amended by S. 1178 , in thenature of a substitute). (4) Conferees provided $5.03billion, which is the enactedamount. Coast Guard programs are usually authorized every 2 years; see CRS Report RS20924, Coast Guard Legislation in the 107th Congress , for discussion of currentcongressional consideration of authorization bills. P.L. 107-20 ( H.R. 2216 ), an FY2001 emergency supplemental appropriations bill, increased FY2001Coast Guard funding by $92 million.

The FY2002 budget request was intended to allow the Coast Guard to continueits activities against drug smuggling and to recapitalize aircraft and vessel fleets. Therequested $3.38 billion ($197.8 million, or 6%, more than FY2001) was for operationand maintenance of a wide range of ships, boats, aircraft, shore units, and aids tonavigation. The $3.38 billion included $340.3 million in defense-related funding. The House approved $3.38 billion for operation and maintenance; the Senateapproved $3.428 billion; and, the conferees $3.38 billion, which is the enactedamount. Another major component of the request was for additional funds foracquisition, construction, and improvement. The Administration sought $659.3million, $245.2 million, or 59%, more than current year funding. The Houseapproved $600 million, $59.3 million less than requested. The Senate approved$669.3 billion, while the conferees approved $636.4 million. For complying withenvironmental regulations and cleaning up contaminated Coast Guard sites, thebudget sought and the conferees approved $16.9 million, the same as current yearfunding. The $15.5 million requested and approved for altering bridges would be thesame as current year funding. The $20.2 million approved for research anddevelopment is slightly less than current year funding and than the amountrequested. The allocation for retirement pay will be $876.3 million, or 13% greaterthan FY2001. The Administration requested and the conferees approved $83.2million to train, support, and sustain a ready military Selected Reserve Force of 8,000members for direct support to the Department of Defense. Other Coast Guardrequested funding included $50 million for spill clean-up and initial damageassessment, available without further appropriation from the Oil Spill Liability TrustFund.

A prominent issue has been the Coast Guard's management of a major planned replacement of aging and outmoded high seas vessels and aircraft, with a specialemphasis on improving the Coast Guard's capabilities on the high seas or in deepwaters. Only planning and analysis funds were included for FY1998 throughFY2001. Key dates include July 2001, when industry teams were to submit theirdesign and construction proposals; and the second quarter of FY2002, when theCoast Guard will award the contracts to begin the replacement program. For FY2002,$338 million was requested. The FY2002 Act provides $320 million. Actualpurchases of nearly $10 billion are anticipated over a 20-year period beginning inFY2002. The language of the enacted FY2002 appropriations bill includes provisionfor a penalty rescission of $100,000 per day for each day after the initial submissionof the FY2003 budget request that the Coast Guard capital investment plan has notbeen submitted to Congress. CRS Report 98-830, Coast Guard Integrated DeepwaterSystem: Background and Issues for Congress , discusses the issues associated withthe program.

Emergency Supplemental Appropriations Act (P.L. 107-38). Under provisions of P.L. 107-38 , the EmergencySupplemental Appropriations Act for Recovery from and Response to TerroristAttacks on the United States, the Coast Guard received $18 million in immediatefunds for the costs of New York City harbor patrols and the recall of Coast Guardreservists. The FY2002 DOD Appropriations Act, allocates an additional $209.15million of funds authorized in P. L. 107-38 to the Coast Guard. The funds areavailable until September 30, 2003. They are distributed as follows: $110 million forReserve activation; $33.507 for restoration of FY2002 reductions; $41.293 millionfor anti-terrorism activities; $2.5 million for chemical/biological strike teams; and$21.85 million for National Defense Authorization Act entitlements. Thesesupplemental amounts are not included in the totals for the Coast Guard's FY2002annual appropriations totals in this report.

Federal Railroad Administration (FRA)

http://www.fra.dot.gov

The FY2002 Act provides $733.6 million in funding for the FRA. This is slightly less than the $744 million provided in FY2001. The Act provides $521million for Amtrak, which is the same amount as provided in FY2001. Core safetyand operations receive $111 million, a $9 million increase over the FY2001 level.

The Act eliminates funding for Rhode Island rail development and for a comparable program in West Virginia that was contained in the FY2001 Act. Alaska, however, will receive $20 million for Alaska Railroad rehabilitation, whichis the same level of funding it received last year. Funding for the ongoingPennsylvania Station relocation project in New York City is maintained at the $20million level. Spending for next generation high-speed rail development is increasedto $32.3 million, $7 million more than was provided in FY2001.

Although most of the debate involving the FRA budget centers on Amtrak, Next Generation High-Speed Rail, and agency safety activities (which receive moredetailed treatment following this section), also likely to be discussed is the issue ofhow states might obtain additional funds for high speed rail initiatives.

Railroad Safety and Research andDevelopment. The FRA is the primary federal agency that promotesand regulates railroad safety. The Bush Administration proposed $111.4 million forFRA's safety program and related administrative and operating activities. Most ofthose funds are used to pay for salaries, as well as associated travel and trainingexpenses for field and headquarters staff, and for information systems monitoring thesafety performance of the rail industry. (5) TheAdministration's request for FY2002represents a nearly 10% increase above the $101.7 million provided in the FY2001DOT Appropriations Act ( P.L. 106-346 ) for those expenses. The FY2002 Actprovides $110.9 million for railroad safety.

The request for FRA's safety and research and development programs included a proposal to impose a rail-user fee on the industry. The collected funds would haveoffset costs of safety-related activities, raising an estimated $55 million that wouldhave been credited to a special fund in the U.S. Treasury while general fundsappropriated for the programs would have been reduced by similar amounts. Industry, in the past, has objected to such a proposal, maintaining that it already paysits share of taxes and that it invests heavily in safety. Both the House and Senate billsdenied the Administration's request to collect user fees to help fund FRA safety andR&D activities.

The last railroad safety Reauthorization statute was enacted in 1994, and funding authority for that program expired at the end of FY1998. FRA's safetyprogram continues using the authorities specified in existing federal railroad safetylaw and funds provided by annual appropriations. Although hearings have been heldsince then, the deliberations have not resulted in a consensus to enact a law toauthorize continued funding for FRA's regulatory and safety compliance activitiesor change any of the existing authorities used by FRA to promote railroad safety. Areauthorization statute changing the scope and nature of FRA's safety activitieswould most likely affect budgets after FY2002.

The adequacy and effectiveness of FRA's grade-crossing safety activities continue to be of particular interest. Relevant safety issues include: How effectivelyis FRA helping the states deal with the grade-crossing safety challenge? Is FRA'sFY2002 budget adequate to deal with that challenge? Congressional reaction to thesequestions had a bearing on the railroad safety budget for FY2001. In its FY2002budget, FRA requested funding to strengthen its grade-crossing safety program andassociated public education activities.

To improve its safety regulations and industry practices, the FRA conducts research and development (R&D) on an array of topics, including: fatigue of railroademployees, technologies to control train movements, and track dynamics. In thereports accompanying the House and Senate transportation appropriation bills andin the annual conference report, the appropriations committees historically haveallocated FRA's R&D funds among various research categories pertaining to safety.The FY2001 DOT appropriations act ( P.L. 106-346 ), provided $25.3 million for theFY2001 R&D program. For FY2002, FRA requested $28.3 million for railroad R&Dactivities. The FY2002 Act provides $29 million.

Next Generation High-Speed Rail R&D. In FY2001, $25.1 million was made available for the NextGeneration High-Speed Rail Program. The FRA requested $25.1 million to continuethis program in FY2002; the FY2002 Act provided $32.3 million, a 29% increaseover the FY2001 level. This included $3 million for study and design of ahigh-speed rail corridor in Florida, supporting that State's constitutional mandate todevelop high-speed rail service.

Emergency Supplemental Appropriations Act (P.L. 107-38). The FY2002 Department of DefenseAppropriations Act ( P.L. 107-117 ; H.Rept. 107-350 ) provides $6 million authorizedunder P.L. 107-38 to FRA for safety and operations. The funding is for additionalexpenses related to: overtime and the hiring of police and security officers; increasedinspections of rail infrastructure; additional security personnel; additional inspectortravel; and other security measures.

Amtrak

http://www.amtrak.com

The FY2002 authorization for Amtrak is $955 million. President Bush's FY2002 budget request for Amtrak was $521.5 million, the same as in FY2001 (thegovernment-wide rescission for FY2001 reduced Amtrak's funding to just over $520million). The President's budget, however, would allow Amtrak to use their entireappropriation immediately, rather than being given 40% in the first year and 60% inthe second year, as in previous years' appropriations. This would give Amtrak a totalof $833 million for FY2002 ($521.5 million appropriated for FY2002, plus $312million carried over from FY2001). The FY2002 Act provides $521.5 million; it issilent on the accelerated funding arrangement, though both the House and Senatebills approved it.

After September 11, Amtrak increased security at its main passenger terminals and along its tracks. Demand for Amtrak's services skyrocketed during the time thatcommercial air travel was suspended. Even after air travel was restored, manytravelers preferred not to fly, increasing demand for Amtrak's services. At the sametime, however, after September 11 many people preferred not to travel at all, with theresult that eventually Amtrak's overall passenger load was down slightly. Theincreased spending on security and decreased passenger demand exacerbatedAmtrak's revenue shortfall.

The Amtrak Reform and Accountability Act of 1997 ( P.L. 105-134 ) prohibits the appropriation of federal operating grant funds for Amtrak after FY2002 (Section201). However, the Congress has appropriated only capital grant funds to Amtrakfor several years now, with the understanding that those funds may also be used foroperating expenses. The Act also requires that if the Amtrak Reform Councildetermines that Amtrak will not be able to operate without federal operating grantfunds after FY2002, it shall notify the President and Amtrak's authorizingcommittees. The Council will then have 90 days to submit to the Congress an actionplan for a restructured national intercity passenger system (P.L 105-134, Section204). At the same time, Amtrak will have 90 days to submit a liquidation plan to theCongress. The Amtrak Reform Council, on November 9, 2001, formally declaredthat Amtrak would need operating assistance after FY2002. Consequently, a plan forrestructured national passenger rail service, and an Amtrak liquidation plan, are dueto the Congress by February 7, 2002. The FY 2002 Department of DefenseAppropriations Act ( P.L. 107-117 ), however, prohibits the use fo appropriated fundsor Amtrak revenues to develop the action plan for Amtrak liquidation.

In addition to operating assistance, the DOT Inspector General (IG) estimates that over the next several years Amtrak will require $2.7 billion to $4 billion infederal funds for new equipment and improvements to signaling and track. InFebruary 2001, Amtrak released a FY2001-2005 capital improvements plan whichcalls for $973 million in capital spending each year to maintain its current level ofservice and an additional $584 million each year to expand its level of service. Thecombined total is $1.56 billion each year. In its long-range plan (FY2006-2020),Amtrak foresees a capital investment need of $1.52 billion each year for maintenanceand expansion of service.

Emergency Supplemental Appropriations Act (P.L. 107-38). The FY2002 Department of DefenseAppropriations Act ( H.R. 3338 ; H.R. Rept. 107-350),provided $100 million, authorized by P.L. 107-38 , for post-September 11securitywork on Amtrak rail tunnels in New York City. The funds remain available untilexpended.

Amtrak Reform Council. http://www.amtrakreformcouncil.gov Amtrak Reform Council (hereafter referredto as the Council) funding is presented within the FRA budget request, although theCouncil is an independent federal commission. The budget request for the Councilis $785,000 in FY2002 compared to $748,000 enacted in FY2001. The FY2002 Actprovided $225,000; perhaps the Congress felt that the Council's work would befinished after submission of its national passenger rail restructuring plan in February2002.

The Council was created by the Amtrak Reform and Accountability Act of 1997 to perform an independent assessment of Amtrak's labor agreements, Amtrak'sprogress in increasing employee productivity, and (any time after December 2, 1999)Amtrak's ability to operate without federal operating assistance after September 30,2002. If, as the Council concluded, Amtrak requires federal operating grant fundsafter FY2002, then federal law requires the Council to submit an Amtrakreorganization plan to the Congress and requires Amtrak to submit to Congress anAmtrak liquidation plan. The Council made this finding on November 7, 2002; theseplans are due to the Congress by February 7, 2002.

The Council submitted its second annual report to Congress in March 2001. In it, the Council recommended that the Congress should provide stable and adequatefunding for the capital needs of passenger rail operations, and that Amtrak's multipleroles (as a quasi-government agency, maintainer of rail infrastructure, and providerof commercial passenger service) be separated. The Council suggested severalpossible structures for this new arrangement of responsibilities

Federal Highway Administration (FHWA)

http://www.fhwa.dot.gov

The FY2002 Act approves $32.895 billion in total funding for FHWA. This represents an increase of $1.22 billion over the FY2001 enacted level. The obligationlimitation, which supports most of the federal-aid highway program, is set at $31.799and is significantly more than the $29.661 billion provided in FY2001. Funding forexempt programs (emergency relief and a portion of minimum guarantee funding)is set at $995 million, down slightly from FY2001's $1.069 billion. There are somedistortions in the comparisons between FY2002 and FY2001 because of $2.759billion in earmarked projects and additional Emergency Relief funding from sourcesoutside the highway trust fund added in FY2001. Setting that aside, the FY2002 Actstill represents a significant increase over core program spending in the FY2001 Act.

The most controversial element of the FY2002 Act is the redirection and earmarking of just under $1 billion in RABA funds from the way they would havebeen distributed by TEA21. To accomplish this redistribution, the Act removesnearly half a billion dollars from core program redistribution to the states. Additionalmonies are derived by zero funding a number of programs that would have beeneligible for RABA funding from TEA21. The Act directs that these funds bedistributed to specific discretionary programs under the control of the appropriationsprocess. For example, the Corridor and Border (CORBOR) program gets over $352million in RABA funding, in addition to its $140 million annual authorization. These funds are then earmarked to 124 specific projects. The provision of RABAfunds to programs outside FHWA (to the Motor Carrier Safety Administration) isalso somewhat controversial.

As a result of these actions, the states lose significant amounts of core programfunding that they expected as part of the RABA distribution process. In addition, theAct eliminates RABA funding for programs such as the High Priority Projects thatare operated by the states outside the core program. The redistribution of these fundshas raised concerns, among the states and amongst several leaders of House andSenate transportation authorizing committees, that the Act disregards the guidanceof TEA21. These same Members have indicated that they might attempt to undosome of the Act's earmarking, but no specific mechanism has yet been identified toaccomplish this.

The Act, as mentioned in the RABA discussion above, continues a trend of earmarking an ever larger share of FHWA's non-core formula programs. Somediscretionary activities, i.e., the Transportation and Community and SystemPreservation Pilot Program, are now completely earmarked. The growth inearmarking is controversial. Opponents of earmarking contend that this processnegates the intent of authorizing legislation, in this case TEA21, that seeks to makesome of these funds available on a competitive basis. Appropriators, however,believe that they should have a role in determining when and where funds are spent. Further, they believe they are simply responding to the desires of Members ofCongress who have filed large numbers of earmarking requests with the Committee.

The Administration's FY2002 proposal requested that a portion of the $4.543 billion in RABA funds be set aside for designated new projects: $145 million for aNew Freedom Initiative intended to increase mobility for Americans with disabilities,and $56 million for Federal motor carrier inspection facility construction at theU.S.-Mexico border. The FY2002 Act provides funding for border inspectionfacilities at a level in excess of the Administration request, but provides no fundingfor the New Freedom Initiative.

The TEA21 Funding Framework. TEA21 created the largest surface transportation program in U.S. history. For themost part, however, it did not create new programs. Rather, it continued most of thehighway and transit programs that originated in its immediate predecessor legislation,the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA, P.L.102-240 ). Programmatically, TEA21 can be viewed as a refinement and update of theISTEA process. There are a few new funding initiatives in TEA21, such as a BorderInfrastructure Program, but the vast majority of funding is reserved for continuingprograms.

There are several groupings of highway programs within the highway firewall. Most of the funding is reserved for the major federal aid highway programs, whichcan be thought of as the core programs. These programs are: National HighwaySystem (NHS), Interstate Maintenance (IM), Surface Transportation Program (STP),Bridge Replacement and Rehabilitation (BRR), and Congestion Mitigation and AirQuality Improvement (CMAQ). All of these programs are subject to apportionmenton an annual basis by formula and are not subject to program-by-programappropriation.

There is a second category of highway funding within the firewalls. This so called "exempt" category consists of two elements: an additional annualauthorization of minimum guarantee funding ($639 million per fiscal year) andemergency relief ($100 million per fiscal year). These funds are not subject to theannual limitation on obligations.

A further set of programs, which are also within the firewall, are known as the "allocated" programs. These programs are under the direct control of FHWA or othergovernmental entities. These programs include: the Federal Lands Highway Program,High Priority Projects (former demonstration project category), AppalachianDevelopment Highway System roads (formerly ineligible for trust fund contractauthority), the National Corridor Planning and Border Infrastructure Program, andseveral other small programs.

As discussed earlier, TEA21 provides a link between the highway-generated revenues that flow into the highway account and highway spending. The Act requiresthat the Secretary of Transportation make an annual evaluation of revenues into thehighway account during the previous fiscal year vis-a-vis spending authorized withinthe highway firewall for the new fiscal year. If revenues go up, program spending isincreased. Conversely, spending can go down if revenues go down. TEA21 specifiesa formula to determine the direction and amount of highway funding adjustment.Known as RABA, this Revenue Aligned Budget Authority was employed beginningin FY2000.

FHWA Research, Development, and Technology (RD&T) Programs. The Administration proposed increased fundingfor various RD&T activities from $437.2 million in FY2001 to $528.7 million in FY2002. The FY2002 Act provides for an obligation limitation of $447.5 million,consistent with the contract authority specified in TEA21. RD&T funds are usedprimarily to advance and deploy technologies intended to improve highwaypavements, structures, roadway safety, highway policies, and intelligenttransportation systems (ITS). The largest requested increases, in dollar amounts, arein FHWA's Surface Transportation R&D and Intelligent Transportation Systems(ITS) programs. The ITS deployment program provides funds for states and localgovernments to use advanced communication and information systems to improvethe management and safety of their surface transportation systems.

An issue associated with the ITS deployment program is the earmarking of funds. During the last few years, the appropriators have designated a substantialportion of the incentive funds intended to accelerate ITS deployment. This practicewas continued in the FY2002 Act. Some Members and proponents of ITS wouldprefer to have the deployment funds competitively awarded. TEA21, however, alsospecifies several projects which are to receive some of the ITS deployment funds.During debate in the Senate, a provision was inserted in the Senate bill requiring thatfunds set aside for Intelligent Transportation Systems (ITS) be dedicated "to theachievement of the goals and purposes set forth in the Intelligent TransportationSystems Act of 1998."

Emergency Supplemental Appropriations Act (P.L. 107-38). The FY2002 Department of DefenseAppropriations Act ( P.L. 107-117 ; H.Rept. 107-350 ) provides $175 million (from theHighway Trust Fund), to be obligated from amounts provided in P.L. 107-38 , toFHWA. Of this amount, $100 million is for the expansion of interstate ferry service"necessitated by the attacks of September 11th," between New York and New Jersey,and $75 million is for FHWA's Emergency Relief Program. An additional $10million for the repair and reconstruction of non-federal-aid highways that weredestroyed by the collapse of the World Trade Center buildings is provided under theFederal Emergency Management Agency.

Federal Transit Administration (FTA)

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

President Bush's FY2002 budget proposal for FTA was $6.75 billion, essentially the TEA21 guaranteed level; the FY2002 Act provided this amount. Thisis an 8% increase above FTA's FY2001 appropriation of $6.26 billion. (6)

The transit appropriations shown in Figure 4 illustrate the significant increase in FTA funding from FY1999 to FY2002 that occurred following the enactment ofTEA21 in 1998. As Figure 4 shows, transit funding under TEA21 reached itshighest funding level to date in FY2001. (7) The $6.75billion passed for FY2002continues the impact of TEA21 on transit spending.

FTA Program Structure and Funding. There are two major transit programs: the Capital Investment Grants and Loans Program and the Urbanized Area Formula GrantsProgram. There are also several smaller formula and planning and research programs.

Capital Investment Grants and Loans Program (Section 5309). This program (formerly known as Section 3) hasthree components: new transit starts, fixed guide way modernization, and bus and busfacilities. For FY2002, the Administration proposed funding this program at $2.841billion, up from $2.695 billion (8) in FY2001; theFY2002 Act provides $2.891 billion, (9) a 5% increase over FY2001. These funds are allocated among these threecomponents on a 40-40-20 basis, respectively; funds for the fixed guide waycomponent are distributed by formula, while funds for the other components aredistributed on a discretionary basis by FTA or earmarked by Congress. For FY2002and FY2003, the Administration proposed to shift the bus and bus facilitiescomponent ($568 million in FY2002, plus $50 million transferred from the CleanFuels formula program) to a formula based on population and population densityfactors. The conference report is silent on this proposal; in FY2002, as in FY2001,virtually all the money in this component was earmarked by Congress. In fact, the$568 million allocated to the bus and bus facilities program was increased by $50million transferred from the Clean Fuels formula program (as in FY2001). Inaddition, $1.7 million in unobligated bus facilities funds from previousappropriations acts is included for a total of $619.7 million in FY2002 funding.

The Bush Administration also proposed that, beginning in FY2004, the federal matching share for "new starts" under the Capital Investment Grants and LoansProgram (Section 5309) be reduced to a maximum of 50% from the currentmaximum of 80%. The rationale for this change was that there are more applicantsfor "new starts" funding than there are funds available, so reducing the federal sharewould spread the available funding to more projects. Critics countered that raisingthe local share requirement would increase the difficulties for those cities and stateswhich have fewer fiscal resources to draw on for their local share and which thusneed more help. The FY2002 Act provides that after FY2002 FTA is not to sign anynew full funding grant agreements that have a maximum federal share greater than60%.

Urbanized Area Formula Program (Section 5307). The program (formerly known as Section 9) providesfor capital and, in some cases, operating needs for urbanized areas (population 50,000or more). These activities include bus and bus-related purchases and maintenancefacilities, fixed guide way modernization, new systems, planning, and operatingassistance. For FY2002, the Administration proposed $3.22 billion (the TEA21guaranteed amount), an increase over the $2.94 billion provided in FY2001. Thesefunds are apportioned on a formula based, in part, on population (areas withpopulations over 1,000,000 receive two-thirds of the funding; urbanized areas withpopulations under 1,000,000 receive the remaining one-third) and transit service data. The FY2002 Act provides $3.0 billion. This is less than the guaranteed amount; thedifference appears to have gone to oversight ($17 million) and transportation for theParalympiad for the Disabled ($5 million).

With the enactment of TEA21, operating assistance funding was eliminated for urbanized areas with populations over 200,000. However, preventive maintenance,generally considered an operating expense, is now eligible for funding as a capitalexpense. Urbanized areas under 200,000 population, and non-urbanized areas(Section 5311), can use formula funds for either capital or operating purposes.

Other Transit Programs. There are several smaller formula grants programs (with FY2002 Administration fundingrequests and final funding figures):

Non-Urbanized Areas Formula Program (Section 5311), which provides capital and operating needs for non-urbanized areas (areas with populationsunder 50,000)-$225 million requested for FY2002-the Act provides $223million;

Grants for Elderly and Individuals with Disabilities (Section5310)-$85 million requested for FY2002-$85 million provided by theAct;

Clean Fuels (Section 5308)-$50 million requested forFY2002-$50 million provided by the Act (but transferred to the Bus and BusFacilities Capital Grants program); and

Rural Transportation Accessibility Incentive Program (Section3038), also known as the over-the-road bus accessibility program-$6.95 millionrequested for FY2002-$6.95 million provided by the Act.

In the House, the provision that would transfer the $50 million of Clean Fuels formula funds to the Bus Discretionary component of the Capital Investment Grantsand Loan Program, where it would have been available for earmarking, was defeatedon a point-of-order; in the Senate, a similar provision was removed by flooramendment. But the conferees re-inserted the provision.

Slightly less than 90% of the FY2002 formula grants funding is for the Urbanized Area Formula Program, and just over 6% is for the Non-Urbanized AreaFormula Program (less than 50,000 population). The remaining 4% is split betweenthe other programs.

TEA21 authorized a new discretionary Job Access and Reverse Commute grant program. This program provides funding for transportation projects that assistwelfare recipients and low-income persons to find and get to work in suburban areas.The Administration proposed that this program be funded at $125 million in FY2002,up from $100 million in FY2001. The Administration also proposed to convert thisprogram to a formula basis in FY2002. In recent years, much of the funding for thisprogram has been earmarked by the Congress. The FY2002 Act provides $125million, but is silent on the conversion proposal.

Emergency Supplemental Appropriations Act (P.L. 107-38). An immediate allocation $10 million wasprovided under the Act for Washington Metropolitan Area Transit Authority forincreased security. An additional $23.5 million for FTA formula grants and $100million for FTA capital grants, authorized for under P.L. 107-38 , has been providedfor in the FY2002 Department of Defense Appropriations Act ( H.R. 3338 ; H.Rept. 107-350 ). The $23.5 million in formula grants are for replacement ofdestroyed buses and transit kiosks, for technical aid for transit agencies to developsecurity and emergency response plan, for detection of chemical or biological agents,and for security training for transit operators. The $100 million in capital investmentgrants for repair of the New York City transit systems damaged by the September 11attack.

Federal Aviation Administration (FAA)

http://www.faa.gov/

The FAA is provided with total budgetary resources of $12.978 billion for FY2002. This represents a significant increase over the FY2001 enacted level of$12.074 billion (after rescission).

The vast majority of FAA funding is provided from the Airport and Airway Trust Fund. In FY2002 a Treasury general-fund contribution of $1.113 billion isprovided for in the Act. This is significantly less than the $2.13 billion provided bythe Treasury general funds in FY2001. Historically, a significant portion of theagency's budget has come from general-fund revenues, the rationale being that thepublic at large realizes some benefit from aviation whether it uses the system or not. (10) The Act increases funding for all FAA activities. There are few significant newpolicy initiatives, excluding the transfer of all FAA security functions to the newTransportation Security Administration (although funding for existing securityactivities is shown in the FAA portion of the Act). Rather the bills focus oncontinued safety and infrastructure upgrades.

Operations and Maintenance (O&M). FY2002 funding of $6.886 billion is included in the Act,an increase of $341 million over the FY2001 level. The majority of funding in thiscategory is for the salaries of FAA personnel engaged in air traffic control,certification, and safety related activities. The O&M budget dedicates much of theincrease in funding to mandatory pay raises and some new hiring.

Facilities and Equipment (F&E). F&E receives $2.9 billion in the FY2002 Act. This is the same amount requestedby the Bush Administration and represents an increase of 10% over the FY2001level. F&E funding is used primarily for capital investment in air traffic control,safety, and security. There are no significant new F&E spending initiatives in theAdministration proposal.

Research, Engineering, and Development(RE&D). The FY2002 Act provides $195 million for RE&D, asmall increase over the FY2001 enacted level of $187 million. The funding levelprovided by the Act is well below the $249 million authorized for this activity byFAIR21.

Essential Air Service (EAS). The EAS program is operated through the Office of the Secretary of Transportation(OST), and receives its funding from designated user fees collected from overflightsof United States territory by foreign aircraft. EAS has an annual authorized fundinglevel of $50 million. For FY2002, the Bush Administration predicts that overflightuser fees will generate only $40 million. It, therefore, asked that $10 million in AIPfunding be provided from the airport and airway trust fund to make the programwhole. The EAS program received $52 million in FY2001.

A more controversial proposal in the Administration budget would have significantly affected participation in the EAS program. At present, 78 communitiesoutside of Alaska receive EAS subsidized service. The Administration proposed that18 communities lose their subsidy payments in order to compensate for higher costsinvolved with providing service at the remaining EAS communities. The proposalwould have accomplished this adjustment by changing some of the distancerestrictions (driving distance to alternate airports) in the existing program.

The House agreed with the Administration that funding for the current program was inadequate, but chose to provide an additional $13 million for the program topreclude any loss of EAS service. The House Committee also provided $10 millionin funding for the somewhat related Small Community Air Service DevelopmentPilot Program (SCASD). This program, created by FAIR21 to increase service tosmall and rural communities, was not funded in FY2001. The $10 million for theprogram was to be derived from the AIP small airports fund. This proposal,however, was struck from the bill during House consideration on a point-of-order.

The Senate bill provides EAS with $50 million from overflight user fees. If collections do not reach this level, the FAA Administrator is given the authority totransfer up to $10 million to the program from the AIP program. The Senateaccepted the Administration's proposed eligibility requirements for participation inthe program, and provided no additional funding to retain eligibility for the 18communities that would lose service. The Senate bill also provided $20 million tofund the SCASD and funds it from within the FAA budget.

The FY2002 Act provides $63 million for EAS. Of this $13 million is in new appropriations and $50 million is from overflight fees. Any shortfall in revenue isto be funded from unobligated balances of the F&E account. The Act also provides$20 million for SCASD .

An additional $50 million for EAS, available through FY2003, is provided in the FY2002 DOD Appropriations Act from funds provided for in the EmergencySupplemental Appropriations Act ( P.L. 107-71 ).

Grants-in-Aid for Airports. The Airport Improvement Program (AIP) provides grants for airport development andplanning. The FY2002 Act provides $3.3 billion for AIP. This is a 3% increase overthe FY2001 enacted level. The request is in conformance with the FAIR21 fundingguarantees for AIP. The Act does not include a House proposal to use $10 millionof AIP contract authority for EAS. It does, however provide $20 million for SCASD . The FY2002 Act provides for a rescission of $301.7 million of previous year budgetauthority. This rescission should have no programmatic impact on the AIP fundingavailable for FY2002.

Emergency Supplemental Appropriations Act (P.L. 107-38). Under provisions of the EmergencySupplemental Appropriations Act ( P.L. 107-38 ) a total of $1.145 billion is madeavailable to FAA, for security purposes. The President requested immediate and15-day-wait allocations of roughly $611.5 million for FAA (in FY2001 and FY2002). Of this amount the operations budget allocations total $434 million for increasedairport security and for sky marshals as well as another $40 million for theMetropolitan Washington Airports Authority (MWAA) for compensation to MWAAand concessionaires for the federal closure of Ronald Reagan Washington NationalAirport. The FAA has also received $50 million for the Aviation InsuranceRevolving Fund to support war risk insurance for air carriers. The Facilities andEquipment (F&E) account has received $87.5 million for accelerated purchase ofsecurity equipment.

The FY2002 DOD appropriations act ( P.L. 107-117 ; H.Rept. 107-350 ) provides FAA with $533.5 million, $125 million more than requested, from funds providedin the emergency appropriations bill ( P.L. 107-38 ) that required further legislativeaction prior to transfer to DOT. According to provisions of the FY2002 DODAppropriations Act, FAA operations receives $200 million, including: $100 millionfor cockpit door modifications; $65 million for sky marshals; $20 million for securityexperts; and $15 million for training facilities. These operations funds are availablethrough FY2003. The DOD Act provides $108.5 million, available through FY2004, for F&E, for explosive detection systems. For R,E,&D the Act provides $50 million,available through FY2003: $25 million for proof of concept demonstrations of securesecurity information systems and the remainder of the funds for projects that involvepotential new security concepts and technologies. AIP receives $175 million, toremain available until expended, for reimbursement to airports for direct costsassociated with additional or revised security requirements since the September 11thattacks. Most of these funds are to be available until expended. In addition, $50million, available until expended, is added to the budget of the Office of theSecretary of DOT for the Essential Air Service program. This lifts the totalsupplemental appropriations for aviation purposes under P.L. 107-38 to $1.195billion.

Research and Special Programs Administration (RSPA)

For FY2002, RSPA requested a budget of $110 million (including $12 million to be offset by a proposed user fee) compared to an appropriation of $80.5 millionin FY2001. The FY2002 Act provides $95.7 million. Most of RSPA's budget isallocated to activities that promote transportation safety. For its pipelinetransportation safety program, RSPA proposed $53.8 million in FY2002, an increaseof $6.7 million over FY2001. The Act provides $58.3 million for pipeline safety inFY2002. For its hazardous materials transportation safety program, the agencyrequested $21.2 million, an increase of $2.4 million over FY2001. The enactedconference agreement provides $21.2 million in FY2002 for hazardous materialstransportation safety.

Currently, much of the cost of RSPA's pipeline safety program is paid for by a fee that is imposed on the regulated industry. However, only the cost of theemergency grant program administered by RSPA's hazardous materials safetyprogram is offset by a registration fee paid for by specified regulated companies. TheBush Administration proposed to offset additional costs of both the pipeline andhazardous materials safety programs by imposing increased user fees on industry. In the past, the hazardous materials (hazmat) industry has objected to user fees to paythe basic costs of RSPA's hazmat regulatory and enforcement program. Likewise, thepipeline industry has been willing to pay only what it considers to be a reasonableincrease in the fees imposed to support RSPA's pipeline safety program. Neither theHouse nor the Senate Committee on Appropriations agreed with the request to beginfunding the hazmat safety program from user fees.

Emergency Supplemental Appropriations Act (P.L. 107-38). The President requested $6 million for the DOTCrisis Management Center as authorized by P.L. 107-38 , that require separatelegislation for appropriation. The request was addressed in the FY2002 DODAppropriations Act ( P.L. 107-117 ). The Act provides for $2.5 million, availableuntil expended, for costs related to the crisis management center.

National Highway Traffic Safety Administration (NHTSA)

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

For FY2002, the Administration requested a total of $419 million for NHTSA, a 4% increase above the Agency's FY2001 enacted funding of roughly $403 million. The FY2002 Act provides total NHTSA funding (both general funds and contractliquidation authority) of approximately $425 million.

Operations and Research (O&R). The Administration requested $196 million, a 2.6% increase over the $191 millionenacted for FY2001. The FY2002 Act provides a total of $201.8 million for O&R. The conference report language noted that the "Safety Performance" initiative (withinO&R) was being provided an additional $7.9 million to expedite key motor vehiclesafety standards including TREAD activities and several other backlogged regulatoryitems. (11) The conference report also noted that,"NHTSA is directed to submit anotification letter to the House and Senate Committees on Appropriations if there isa reasonable likelihood that the agency will not meet any deadlines specified in theTREAD Act. In addition, NHTSA shall submit a strategic implementation plan toboth the House and Senate Committees on Appropriations with the submission of thefiscal year 2003 budget that specifies timetables, milestones, and the researchnecessary to implement each provision of TREAD, as well as the amounts providedto these activities in fiscal years 2001 and 2002." (12)

Highway Traffic Safety Grants. The Administration requested, and the FY2002 Act provides, $223 million, a 5%increase over the enacted level of $213 million for FY2001. This $223 million is tobe distributed as follows: $160 million for State and Community Highway SafetyGrants; $38 million for Alcohol-Impaired Driving Countermeasures IncentiveGrants; $15 million for Occupant Protection Incentive Grants; and $10 million forState Highway Safety Data Grants.

NHTSA Program Responsibilities. The National Highway Traffic Safety Administration's responsibilities includeestablishing minimum safety standards for automotive equipment, serving as aclearing house and information source for drivers, identifying and studying emergingsafety problems, and encouraging state governments to enact laws and implementprograms (through safety grants) to reduce drunk driving and to encourage the useof occupant protection devices. The Bush Administration has continued along-standing DOT priority that, "Improving transportation safety is the number oneFederal Government transportation objective." NHTSA plays a key role inimplementing this objective.

In its policy statements, the Department of Transportation, through NHTSA, has targeted specific program activities that have potential for reducing highway deathsand injuries. Included among these are programs to: reduce drunk and druggeddriving; reduce the incidence of aggressive driving and "road rage"; aid in thedevelopment of "smart air bags" that will continue to provide protection tooccupants, while reducing risk associated with the bags themselves; enhance infantand child safety in vehicle crashes; and explore transportation options and safetyprograms for an aging population.

Last year, following investigations into the failure of Firestone tires and associated rollover fatalities, Congress added additional responsibilities to NHTSAthrough enactment of the Transportation Recall Enhancement, Accountability, andDocumentation (TREAD) Act, P.L. 106-414 . (13)

These new responsibilities for NHTSA include: establishing a dynamic rollover test for light duty vehicles; updating the tire safety and labeling standards; improvingthe safety of child restraints; and establishing a child restraint safety rating consumerinformation program.

Federal Motor Carrier Safety Administration (FMCSA)

The FMCSA was created by the Motor Carrier Safety Improvement Act of 1999 (MCSIA), P.L. 106-159 . (14) This agency becameoperational on January 1, 2000, andassumed the responsibilities and personnel of DOT's Office of Motor CarrierSafety. (15) FMCSA issues and enforces the FederalMotor Carrier Safety Regulations,which govern the operation and maintenance of interstate commercial truck and busoperations and specify requirements for commercial drivers. FMCSA alsoadministers several grants and programs to help states conduct their truck and bussafety activities. Most of the funds used to conduct FMCSA activities are derivedfrom the federal highway trust fund. The FY2002 request for the FMCSA was $343.8million, the appropriation for FY2001 was $268.6 million. The Administration'srequest would have represented an increase of 28%. The FY2002 Act provides a nettotal of $335.1 million for the FMCSA account.

The appropriation for the FMCSA consists of two components: funds primarily used for FMCSA's administrative expenses and funds primarily used to assist statesto conduct truck and bus safety programs.

Administrative and Research Expenses. The FY2002 budget request for FMCSA administrativeand operations expenses was $139 million, including funds for research andtechnology (R&T). The FY2002 Act provides $110 million; the FY2001 comparableappropriation was $92.2 million. The Act also provides that from FHWA's limitationon administrative expenses $4.0 million shall be available for motor carrier safetyresearch and $0.8 million shall be available for the motor carrier crash dataimprovement program. The R&D program seeks to improve truck and bus safetyregulations and associated safety and compliance activities conducted by both federaland state enforcement officers.

Grants to States and Other Activities. These funds are used primarily to pay for the MotorCarrier Safety Assistance Program (MCSAP), a grant program that helps the statesenforce their truck and bus safety regulations. The MCSAP provides grants to cover,typically, up to 80% of the costs of a state truck and bus safety program. Under theprogram, the agency partners with some 7,000 state and local public-utility andlaw-enforcement officers to annually conduct more than 2.1 million inspections oftrucks and buses at the roadside. Some funds provided under this sub-account arealso used to pay for information systems and analysis as well as other statecompliance activities. The FY2002 Bush Administration budget requested alimitation for these activities of $204.8 million. The FY2002 Act provides alimitation on obligations of $205.9 million for these activities. Of this total, $23.9million is derived from the RABA. Of this amount, $18 million is to be spent onadditional safety grants to the border states and most of the balance for improvementsto commercial drivers' licensing programs. The FY2001 DOT appropriations actincluded a limitation on obligation of $177 million for the "National Motor CarrierSafety Program."

Mexican Trucking Provision. During floor consideration of H.R. 2299 , the House approved anamendment that provided that "none of the funds in this Act may be used to processapplications by Mexico-domiciled motor carriers for conditional or permanentauthority to operate beyond the United States municipalities and commercial zonesadjacent to the United States-Mexico border." The FY2002 Senate-passed billdiffered significantly from this provision and would require that various inspection,infrastructure, and administrative conditions be met before any Mexican carriersreceive operating authority to go beyond the border zones. The requirements includedon-site audits of Mexican motor carriers, proof of insurance, and safety inspectorstaffing provisions. The Senate bill included $103.2 million for border safetyinspection activities, facilities, and staffing. During floor debate, some of thesepreconditions were vigorously opposed by supporters of the Bush Administrationwho view such provisions as discriminatory toward Mexico and as a violation of theNAFTA.

The conference agreement on the FY2002 appropriation primarily incorporates Senate provisions, some of which have been modified, regarding processes andmeasures to promote the safety of cross-border trucking between the United Statesand Mexico. The enacted conference agreement provides for $25.866 million forsalaries, expenses, and capital costs to implement these provisions, see Section 350of the Act. These funds are in addition to funds provided in the appropriation for theFederal Motor Carrier Safety Administration (FMCSA), including funds for theMotor Carrier Safety Assistance Program (MCSAP) that also are intended to enhancethe ability of U.S. DOT and the states to promote the safety of Mexican trucks andbuses entering the United States. The FY2002 Act also provides $56.3 million forborder infrastructure improvements from RABA funds and $12 million for Texasborder inspection facilities construction.

Table 3. Budgetary Resources of Selected Agencies and Selected Programs (in millions of dollars--totals may not add) a

Sources and notes:

a The totals for FY2002 do not reflect supplemental appropriations authorized under P.L. 107-38 . Unless otherwise noted,figures in Table 3 were taken from tables provided to CRS by the House Committee on Appropriations. Becauseofdiffering treatment of offsets, the inclusion of the NTSB and Architectural and Transportation Barriers ComplianceBoard,and the exclusion of the Maritime Administration, the totals will not always match the Administration's totals. Thefigures within this table may differ slightly from those in the text due to supplemental appropriations, rescissions,andother funding actions. Columns may not add due to rounding or exclusion of smaller program line-items.

b The figures in this column reflect both the additional appropriations and the government-wide 0.22% rescission providedfor in the FY2001 Consolidated Appropriations Act ( P.L. 106-554 ). For FHWA the rescission totals $71.34 million,additional appropriations total $15.1 million, and an additional $29 million of exempt obligations is carried overasunobligated FY2000 exempt obligations. For NHTSA the rescission is $0.89 million. For FRA the rescission is$1.64million. The post-rescission total of $755 million for FRA includes $20 million in advance appropriations forPennsylvania Station (in New York City) and $10 million transferred from DOD ( P.L. 106-259 ) to realign track atElmendorf Air Force Base and Fort Richardson. For FTA the rescission is $13.8 million. The conference reporttransferred $50 million of FTA formula grant funds to the Capital Investment Grants program. P.L. 106-554 providedan additional $4.5 million for 3 transit projects. For FAA the rescission was $27.7 million. P.L. 106-554 alsoprovidedan additional $2.5 million for the Airport Improvement Program. The conference report funding for FAA operationsisreduced by a $14 million transfer to the Essential Air Service Program. For the U.S. Coast Guard the rescission was$8.23million. The $778 million for retired pay appears to be exempt from the rescission. The rescission for the St.LawrenceSeaway is $30,000. The rescission for the Office of the Inspector General is $110,000. For RSPA the rescissionis$180,000. For the STB the rescission is $40,000. For the Office of the Secretary the rescission is $190,000. ForFMCSAthe rescission is $590,000. For the NTSB the rescission is $138,600.

c The FY2001 DOT Appropriations Act ( P.L. 106-346 ) provides for a rescission of $579 million of FY2000 AID contractauthority. The FY2002 request includes an AID previous year rescission of $331 million, the House bill ( H.R. 2299 ), as well as the Senate reported bill, provides for a rescission of $302 million. The FY2002 Act rescinds$301.7million. These rescissions have no impact on the budgetary resources available for FAA programs for FY2001 andFY2002 but are subtracted from the grand totals because they are significant in relation to the overall budget capfor thetransportation function. The FY2001 figure includes an additional $2.5 million for AID from P.L. 106-554 . TheFAAtotal, in the FY2000 Senate-passed bill, also includes $20 million for the Small Community Air ServiceDevelopmentPilot Program.

d FY2001 figures are budget authority. The figures do not include the annual $64 million in mandatary funding for boatsafety grants. The FY2002 figure in Senate-reported S. 1178 includes a rescission of $8.7 million.

e For FY2001, $3 million in the pipeline safety reserve and $13 million in the emergency preparedness reserve are alsoavailable to RSPA. The Bush Administration request proposes to finance $12 million of this program by hazardousmaterials registration fees in FY2002. The total also does not reflect $14 million in permanent appropriations. Therefore,the request total resources for RSPA may be seen as $110 million.

f Includes Surface Transportation Board offsetting collections for FY2001 and estimated collections for FY2002.

g This figure includes, from the highway trust fund, $720 million for the Emergency Relief Program , $1.37 billion inadditional "miscellaneous highway" project funds, $5 million for Muscle Shoals, Alabama, and an additional $55millionfor the Appalachian development highway system. An additional $600 million for the Woodrow Wilson MemorialBridge(which crosses the Potomac River at Washington, DC) is to be drawn from general Treasury funds. The FY2002Senate-reported bill includes an additional $350 million for the Appalachian Development Highway Program,although the conference report reduced this to $200 million.

h The DOT and related agencies appropriation does not fund the Maritime Administration (MARAD) or the FederalMaritime Commission (FMC), and their budgets are therefore not included in this report. They receive funding fromtheCommerce, Justice, State appropriations bills. The Administration budgets do not include the NTSB or theArchitecturaland Transportation Barriers Compliance Board budgets; they are included in this total because their budgets areincludedin the DOT Appropriations bills. The rescission of unobligated previous years contract authority have beensubtractedfrom this total. Because they have no impact on the budgetary resources available for FY2001 and FY2002, the totalresources available for these years could be seen as $58.478 billion for FY2001 enacted, $59.349 billion for FY2002requested, $59.424 billion for House passed bill for FY2002, $60,262 for the Senate Appropriations Committeerecommendation, and $59.89 billion for FY2002..

I P.L. 106-246 , the emergency supplemental appropriations act provided $19.7 to cover expenses connected with the EgyptAir 990 and Alaska Air 261 accidents.

j Includes $55 million in offsets from proposed user fees.

k Includes an additional $100 million from the general fund for New Starts.

For Additional Reading

CRS Products

CRS Report RS20177. Airport and Airway Trust Fund Issues in the106th Congress ,by [author name scrubbed].

CRS Issue Brief IB10026. Airport Improvement Program, by [author name scrubbed].

CRS Report RL30659. Amtrak: Overview and Options , by [author name scrubbed].

CRS Issue Brief IB90122. Automobile and Light Truck Fuel Economy: Is CAFÃ Up to Standards? , by Rob Bamberger.

CRS Report RS20469. Bicycle and Pedestrian Transportation Policies , by William Lipford and [author name scrubbed].

CRS Report RS20600. Coast Guard FY2000 and FY2001 authorization issues , by Martin R. Lee.

CRS Report RS20790. The Coordinated Border Infrastructure Program: Issues for Congress , by [author name scrubbed].

CRS Report RS20841. Environmental streamlining provisions in the Transportation Equity Act for the 21st century: status of implementation , by David MichaelBearden.

CRS Report RL30915. Federal Motor Carrier Safety Administration: Status and Challenges , by [author name scrubbed] and Hussein Hassan.

CRS Report 98-890 STM. Federal Traffic Safety Provisions in the Transportation Equity Act for the 21st Century: Analysis and Oversight Issues , by Paul F.Rothberg and Anthony J. Solury.

CRS Issue Brief IB10030. Federal Railroad Safety Program and Reauthorization Issues , by [author name scrubbed] and [author name scrubbed].

CRS Report RL31027(pdf) . High-Speed Rail: Development and Investment Issues in the 107th Congress , by [author name scrubbed] and [author name scrubbed].

CRS Report RL31028. North American Free Trade Agreement: Truck Safety Considerations , by Paul Rothberg.

CRS Report RL31150(pdf) . Selected Aviation Security Legislation in the Aftermath of the September 11 Attack, by [author name scrubbed].

CRS Report 98-749(pdf) E. The Transportation Equity Act for the 21st Century (TEA21) and the Federal Budget , by [author name scrubbed].

CRS Report 98-646 ENR. Transportation Equity Act for the 21st Century ( P.L. 105-178 ): An Overview of Environmental Protection Provisions , by David M.Bearden.

CRS Issue Brief IB10032. Transportation Issues in the 107th Congress , coordinatedby [author name scrubbed].

Selected World Wide Web Sites

Department of Transportation, Chief Financial Officer http://ostpxweb.dot.gov/budget/

House Appropriations Committee http://www.house.gov/appropriations

Maritime Administration http://www.marad.dot.gov/

National Highway Traffic Safety Administration (budget & planning) http://www.nhtsa.dot.gov/nhtsa/whatis/planning/perf-plans/gpra-96.pln.html

Office of Management and Budget http://www.gpo.gov/usbudget/fy1998/fy1998_srch.html

Senate Appropriations Committee http://www.senate.gov/committees/committee_detail.cfm?COMMITTEE_ID=405