Appropriations for FY2003: Transportation and Related Agencies
Released: 2003-02-26T00:00:00

Most Recent Developments

On February 4, 2002, President Bush submitted his budget proposal for FY2003. The proposedFY2003 budget for the Department of Transportation (DOT) is roughly $56.1 billion, a decrease of$3.5 billion (6%) from the FY2002 enacted total. This decrease was primarily due to a decline inHighway Trust Fund revenues during 2002, which triggered an automatic reduction in highwayspending for FY2003 of $4.4 billion.

On March 21, 2002, President Bush submitted an emergency supplemental budget request to Congress for $27.1 billion; $6.7 billion of which was for the DOT. The largest items were $4.4billion for the Transportation Security Administration (TSA) for explosives detection equipmentand screeners and $1.8 billion for the Federal Transit Administration's Capital Grants Program forrebuilding sections of the Manhattan transit system damaged by the September 11 attack. Other itemsincluded $255 million for the Coast Guard, $167 million for the Federal Highway Administration,$100 million for the Federal Aviation Administration, $19 million for the Federal Motor CarrierSafety Administration's Border Enforcement Program, and $3.5 million for the Research and SpecialProject Administration.

On June 7, 2002, President Bush submitted a proposal for a new Department of Homeland Security. It would involve transferring the Coast Guard and TSA from the DOT to the proposed newagency, along with elements of other existing federal agencies. These two agencies represent 19%of the DOT's total budget, and 40% of its discretionary budget (generally, those activities funded outof the general fund rather than trust funds), for FY2003.

On July 26, 2002, the Senate Appropriations Committee reported its version of the DOT Appropriations bill, S. 2808 / S.Rept. 107-224 . The Committee recommended $64.7billion, $8.6 billion more than the Administration request. The major differences were an increasein FHWA spending to FY2002 levels, $8.6 billion above the FY2003 request, and an increase of$679 million for Amtrak, to $1.2 billion.

On August 2, 2002, the President signed the second FY2002 emergency supplemental bill ( P.L. 107-206 ). This bill included an additional $6.6 billion for the DOT for FY2002. This included $3.9billion for the Transportation Security Administration, $1.8 billion for the Federal TransitAdministration (for grants to rebuild New York City's subway system in Manhattan), $728 millionfor the Coast Guard, and $205 million for Amtrak.

On August 9, 2002, the President announced that he would not ask for the $5.1 billion in contingency emergency funding that was included in the supplemental bill ( P.L. 107-206 ). The actprovides that if the President requests any of the contingency emergency funding, all of it is released. This decision reduced the supplemental funding to DOT by $1.1 billion, from $6.6 billion to $5.5billion. The biggest reductions were to TSA ($480 million), the Coast Guard ($262 million), andthe FAA's Grants-in-Aid to Airports ($150 million).

On September 3, 2002, the Administration submitted a budget amendment increasing the FY2003 request for TSA by $546 million.

On October 7, 2002, the House Appropriations Committee reported its version of the DOT Appropriations bill, H.R. 5559 / H.Rept 107-722 . The Committee recommended $60.1billion, $4.0 billion more than the Administration request. The major difference was a $4.6 billionincrease in FHWA spending.

On November 19, 2002, the Congress passed the fifth in a series of Continuing Resolutions (CR) to fund the Department of Transportation (and other government agencies) in FY2003 in theabsence of an FY2003 DOT appropriations act. This CR, P.L. 107-294 , provides funding throughJanuary 11, 2003, at the levels enacted in FY2002, prorated on a daily basis.

On November 19, 2002, the Congress passed legislation creating the Department of Homeland Security ( H.R. 5005 ; P.L. 107-296 ). This legislation provides for the transfer of theCoast Guard and the Transportation Security Administration from the DOT to the new Departmentof Homeland Security during FY2003.

On January 8, 2003, the House passed H.J.Res. 2 , a bill without any transportation appropriations, as a vehicle for the Senate.

On January 23, 2003, the Senate passed H.J.Res. 2 , now an omnibus FY2003 appropriations bill including transportation appropriations. It provides a total of $65.1 billion toDOT and related agencies, $9 billion more than the Administration request (see Table 1); the majordifferences are $8.6 billion more in highway spending and $679 million more for Amtrak under theFederal Railroad Administration. However, in an effort to keep total spending in line with theAdministration's request, the Senate included an across-the-board cut of 2.852% in the bill. TheHouse will now go to conference with the Senate in an effort to produce a final omnibusappropriations act which will likely include transportation appropriations.

On February 13, the Conference Committee passed out H.J.Res. 2 , which was agreed to by both House and Senate. It provides $64.6 billion for DOT and related agencies, butby agreement with the White House it also includes a 0.65% across-the-board rescission to holddown overall spending.

On February 20, 2003, President Bush signed H.J.Res. 2 ( P.L. 108-7 ).

Table 1. Status of Department of Transportation Appropriations for FY2003

Note: H.R. 5559 and S. 2808 died at the end of the 107th Congress. FY2003 transportation appropriations are included in H.J.Res. 2 , an omnibus FY2003appropriations bill. The Senate Committee on Appropriations report for H.J.Res. 2 wasprinted in the Congressional Record for January 15, 2003.

Key Policy Issues

Issue Overview

The Conference Agreement (H.Rept. 108-10, P.L. 108-7). While the House and Senate Committeeson Appropriations passed out DOT appropriations bills during the second session ofthe 107th Congress, that Congress ended without passage of a DOT appropriationsbill, or any other non-defense spending bill. All pending legislation from the 107thCongress expired with the beginning of the 108th Congress in January 2003, so newappropriations legislation had to be provided. The House passed H.J.Res. 2 , a bill without substantive appropriations language, onJanuary 8, 2003 and sent it to the Senate. The Senate amended it by inserting all thenon-defense agency appropriations for FY2003, and passed it January 24, 2003. OnFebruary 13, 2003, the Committee on Conference issued their report ( H.Rept.108-10 ), and the House and Senate agreed to the report and sent the legislation toPresident Bush, who signed it on February 20, 2003. Prior to that, DOT funding hadcome from a series of 8 continuing appropriations acts, known as continuingresolutions (CRs), which provided agencies the same level of funding they receivedin FY2002 (minus extraordinary one-time appropriations) prorated on a daily basisfor the life of the CR.

FY2003 Budget Overview. The Bush Administration's FY2003 budget request, released on February 4, 2002, proposed aDepartment of Transportation (DOT) budget of roughly $56.1 billion-about 6%below FY2002's enacted level of $59.6 billion. (1) TheFY2003 budget included a $4.4billion reduction in highway funding required by the provisions of theRevenue-Aligned Budget Authority mechanism created in the Transportation EquityAct for the 21st Century (TEA-21; P.L. 105-178 ). The budget request conformed tothe basic outline of both TEA-21, which authorizes spending on highways andtransit, and the aviation funding authorized in the Wendell Ford Aviation Investmentand Reform Act of the 21st Century (FAIR21 or AIR21; P.L. 106-181 ).

The FY2003 budget proposal continued trends of the past couple of years, with proposed increases for the Coast Guard (18%) and Federal Transit Administration(FTA, 5%), and decreases for the Federal Railroad Administration (FRA, down11%). The big changes in the FY2003 DOT budget were the reduction in highwayfunding and the presence of the TSA.

The events of September 11, 2001, have had a significant impact on the DOT's budget. The DOT received an additional $1.8 billion for FY2002 through anemergency supplemental bill passed on September 14, (2) and another $5.5 billionthrough another emergency supplemental bill passed on July 24, 2002, for a total of$7.3 billion in supplemental funding in FY2002. (3) In addition, an entirely new agencywas created within the DOT, the TSA, due to concerns about security. In FY2003,both the Coast Guard and TSA are scheduled to be transferred out of the DOT to thenewly-created Department of Homeland Security.

The Senate Committee on Appropriations passed out a DOT appropriations bill on July 25, 2002 ( S.Rept. 107-224 ), which provided $64.7 billion; the HouseCommittee on Appropriations passed out a DOT Appropriations bill on October 7,2002 ( H.Rept. 107-722 ), which provided $60.1 billion. Neither the House nor theSenate passed an FY2003 DOT appropriations bill during the second session of the107th Congress; those bills passed by the Committees on Appropriations expired withthe convening of the 108th Congress. On January 8, 2003, the House passed H.J.Res. 2 , a bill without substantive appropriations language, and sentit to the Senate. The Senate inserted appropriations language for the 11 non-defensedepartments whose FY2003 appropriations bills had not been enacted and passed thebill on January 23, 2003. The Senate version of H.J.Res. 2 provided$65.1 billion for transportation for FY2003. The major difference between theSenate and House figures was $4.1 billion more for the federal-aid highway programin the Senate bill. The Senate bill also included a 2.852% across-the-board rescissionto acknowledge President's Bush's insistence on a limit for FY2003 non-defensespending. The Committee on Conference's report on H.J.Res. 2 wasagreed to on February 13, 2003 ( H.Rept. 108-10 ); it provides $64.6 billion for DOTand related agencies, but also provides an across-the-board rescission of 0.65%, byagreement with the White House, to hold down overall non-defense spending. President Bush signed the bill on February 20, 2003 (P. L. 108-7).

RABA and Highway Funding. TEA-21 created a mechanism called Revenue-Aligned Budget Authority (RABA),which was intended to prevent revenues from accumulating in the Highway TrustAccount. While TEA-21 set guaranteed spending levels for the highway programthrough FY2003, based on forecast of future Highway Trust Account revenues,RABA allowed the highway spending level to increase automatically if HighwayTrust Account revenues exceeded the forecasts. It also provided that the highwayspending levels would be reduced if revenues fell below the forecasts.

For several years, the RABA adjustment mechanism provided windfall gains for highway funding: increases of $1.5 billion in FY2000, $3 billion in FY2001, and$4.5 billion in FY2002 over the guaranteed funding levels. However, the recessionof 2001 slowed receipts into the Highway Trust Account, and in January 2002 itbecame clear that revenues had dropped below the forecast levels. The result was anautomatic cut in the FY2003 highway program funding level of $4.4 billion. Theimpact of this cut was magnified by the RABA boost to FY2002 highway funding of$4.5 billion over the guaranteed level. This meant that RABA, by giving a $4.5billion "bonus" in FY2002 and a $4.4 billion cut in FY2003, created an $8.4 billiondifference between FY2002 highway funding and FY2003 funding (for moreinformation, see CRS Report RS21164 , Highway Finance: RABA's Double-edgedSword , March 5, 2002).

On August 2, 2002, the President signed the second FY2002 emergency supplemental legislation ( P.L. 107-206 ), which included a provision setting theRABA adjustment for FY2003 to zero (Section 1402). This had the effect ofrestoring FY2003 highway funding to the level guaranteed in TEA-21, $27.7 billion.

On October 7, the House Committee on Appropriations reported its version of the FY 2003 DOT Appropriations bill ( H.R. 5559 ). It recommendedfunding the federal aid highways program at $27.7 billion, $4.4 billion over theAdministration request. On January 23, 2003, the Senate passed H.J.Res. 2 , an omnibus FY2003 appropriations bill which includestransportation appropriations. It provided $31.8 billion for FY2003, the same amountprovided in FY2002. P.L. 108-7 provides $31.8 billion.

The Transportation Security Administration's (TSA) budget. TSA was created by the Aviation and TransportationSecurity Act (ATSA)( P.L. 107-71 ) in November 2002 in response to concerns aboutthe security of aviation and other transportation systems. Congress required TSA toassume responsibility for screening passengers and checked baggage at airports, andto hire screeners and purchase equipment to carry out this task, by the end of calendaryear 2002. Initial estimates were that TSA would need to hire around 25,000-30,000screeners to do this, giving it a total workforce of 35,000-40,000 people. However,this estimate was based on the existing number of screeners, and overlooked theimpact of other ATSA requirements, such as the screening of checked baggage; thisactivity was virtually non-existent before September 11, so there were no preciseestimates of the total workforce this task would require. As the scale of that taskbecame clearer, estimates of the workforce needed by the TSA increased by another25,000 or so screeners, to screen checked baggage, to a total workforce of as manyas 70,000 people. Some members of Congress expressed concern about TSAgrowing to such a size; the FY2002 emergency supplemental act capped TSA'sfull-time screener positions at 45,000, the House Appropriations Committeerecommended that cap be extended for FY2003, and P.L. 108-7 extended that cap. Currently, TSA employs nearly 62,000 screeners, of whom 28,000 are temporary. (4)

TSA was appropriated $1.3 billion in FY2002; it also received an additional $3.9 billion in the second FY2002 emergency supplemental bill (5) . Its FY2003 requestwas $5.3 billion-though that request was based on 41,300 full-time employees. Some members of Congress questioned the amounts being requested, and criticizedthe lack of detail about how the money will be used. At the same time, TSA wasunder pressure to hire and train as many as 50,000-60,000 screeners, and to purchaseand install thousands of baggage-screening devices at 429 airports, by December 31,2002. The DOT Inspector General has noted resulting inefficiencies. (6)

When it created the TSA, Congress gave it the power to levy two fees, one on passengers and one on airlines. The expectation, at least on the part of some inCongress, was that these fees would provide enough revenue to cover the TSA'sannual budget requirements. However, while the DOT estimates that these two feeswill bring in around $2.0 billion each year, the TSA's budget request for FY2003 is$5.3 billion. Revenue from fees will not come close to covering the TSA's annualbudget.

The House Committee on Appropriations recommended $5.146 billion for TSA, $200 million less than the Administration request. The Senate provided $5.346billion in H.J.Res. 2 , the amount requested by the Administration. P.L.108-7 provides $5.180 billion.

On November 19, 2002, President Bush signed legislation creating the Department of Homeland Security. TSA is scheduled to be transferred from DOTto this new department in March of 2002. The budget implications of this proposalare not clear; the TSA's FY2003 budget request represents 9% of the DOT's totalbudget request, and the portion of the TSA's budget request that exceeds theiroffsetting collections, $2.5 billion, is 12% of the discretionary portion ($20.7 billion)of the DOT's budget.

Amtrak Funding. Amtrak told Congress that it needed at least $1.2 billion in FY2003 to maintain operations. TheAdministration requested $521 million for Amtrak for FY2003, noting that thisfigure was a "placeholder" while the Administration worked to finalize a plan torestructure passenger rail service. In the midst of Amtrak's quest for funds to makeit through FY2002, the Administration presented a set of principles for restructuringpassenger rail service, including the end of federal operating support and greaterfinancial support from states, and said it opposed providing Amtrak more than $521million in FY2003 unless significant reforms were made. The House Committee onAppropriations recommended $762 million, while requiring enhanced financialreporting from Amtrak; the Senate provided $1.2 billion in H.J.Res. 2 . P.L. 108-7 provides $1.05 billion, and postpones repayment of a $100 million loan. In a change of policy, Congress did not provide the money directly to Amtrak, but tothe Secretary of Transportation, who will allocate the money to Amtrak quarterlythrough the grant-making process. Also, each of Amtrak's long-distance routes willhave to make individual grant applications to receive funding.

Major Funding Trends

Table 2 shows DOT actual or enacted funding levels for FY1988 through FY2002. Total annual DOT funding more than doubled from FY1988 throughFY2002.

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

a "Actual" amounts from FY1988 to FY2001 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. Source: DOT Budget in Brief, BudgetaryResources Table, "Actual" year column, adjusted by subtraction of MaritimeAdministration funding and addition of Related Agencies funding from DOTappropriations acts.

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

c FY2002 and FY2003 enacted figures are drawn from tables provided by the HouseCommittee on Appropriations.

d FY2003 enacted figure does not reflect a 0.65% across-the-board rescission.

Transportation Security Administration (TSA)

http://www.tsa.dot.gov/

The Aviation and Transportation Security Act ( P.L. 107-71 ), passed in the aftermath of the attack on September 11, 2001, created a new agency in theDOT--the Transportation Security Administration (TSA). With respect to airtransportation, the TSA assumes the civil aviation security functions of the FAA aspromulgated under 49 U.S.C. 449. TSA is responsible for screening passengers andchecked baggage at airports, and for hiring screeners and purchasing equipment tomeet these responsibilities. TSA also deploys Federal Security Managers at eachairport to oversee screening and deploys Federal Air Marshals for every flightconsidered a "high security risk." TSA is assigned the task of improving airportperimeter-access security and acquires and deploys explosive-detection machines andother equipment designed to detect chemical or biological weapons.

TSA is responsible for the security of all modes of transportation, passenger and cargo. During a national emergency, TSA is to coordinate and oversee domestictransportation for air, rail, maritime (including seaports), and other surface transportmodes and to coordinate threat assessments among appropriate federal, state, andlocal agencies. The agency is to develop policies, strategies, and plans for dealingwith security threats, and to undertake R&D activities to enhance transportationsecurity.

In FY2002, TSA received a total of $5.8 billion, including transfers. ForFY2003, the first full year of funding for TSA, the Administration initially requested$4.8 billion. The Administration submitted a budget amendment on September 3,2002 raising TSA's budget request by $546 million to an overall total of $5.346billion. Approximately $2.0-2.4 billion of this amount will be offset with collectionsfrom the fees authorized under the Aviation and Transportation Security Act(ATSA). ATSA imposes a fee of up to $2.50 per passenger (limited to $5 perone-way trip) to pay for civil aviation security services. If this fee proves to beinsufficient to pay for the cost of security services, TSA may impose a fee on aircarriers-as it has done. The revenue collected from this air carrier fee is limited to theamount air carriers paid in calender year 2000 for screening services. There is adispute over the amount of this fee; the federal government estimates that the airlinespaid around $700 million in 2000 for screening services, but the airlines say they paidonly around $300 million.

On November 19, 2002, President Bush signed legislation creating a new federal agency, the Department of Homeland Security. Among the organizations which arescheduled to be transferred by March 2003 to this new agency is TSA. The budgetimplications of this proposal are not clear; the TSA's FY2003 budget requestrepresents 9% of the DOT's total budget request; the portion of TSA's budget requestthat exceeds their offsetting collections, approximately $3 billion, is 13% of theappropriated portion ($22.1 billion) of the DOT's budget.

The Consolidated Appropriations Resolution for FY2003, H.J.Res. 2 , provides $5.2 billion for the TSA, $166 million less than the Administration'sbudget request. The Act provides $4.5 billion for civil aviation security services. This amount includes $3 billion for screening activities, of which $265 million isprovided for modifying airports to make room for checked baggage explosivedetection systems and $175 million is provided for purchasing these systems. Forairport support and enforcement presence, the Act provides $1.5 billion. The Actalso extends a cap of 45,000 full-time employees for TSA's workforce.

The Act also provides $245 million for maritime and land transportation security, which includes $150 million for seaport security grants and $30 million forOperation Safe Commerce. Operation Safe Commerce is a pilot program for testingnew initiatives for ensuring the security of marine container shipments from theirpoint of origin to final destination. The Act includes $309 million for administrativeexpenses including intelligence activities. For research and development related totransportation security, the Act provides $110 million.

Among the key issues discussed regarding the TSA's FY2003 budget was its rapidly growing size and the fact that user fees, as mentioned above, are not coveringthe costs. The issue of properly allocating funds among the various transportationmodes, reflecting the areas of greatest vulnerability, was also debated. Members ofCongress from coastal states, for instance, raised the issue of whether enough fundshave been allocated for seaport security.

Coast Guard

http://www.uscg.mil/

The Coast Guard is challenged by increased responsibilities for Homeland Security, search and rescue, enforcement, drug and illegal immigrant interdiction onthe high seas as well as by its aging water craft and aircraft. The Administrationrequested budget authority of $6.1 billion for Coast Guard funding in FY2003. (7) Compared to the $5.2 billion appropriated in FY2002 (8) , the FY2003 request was $862million, or 17%, more. Planned increases of $771 million for Coast Guard operatingexpenses accounted for most of the proposed increase. In the 107th Congress, theHouse Appropriations Committee recommended $6.1 billion. In the 108th Congress,Senate-passed H.J.Res. 2 provided $6.1 billion. The final FY2003appropriation was $6.1 billion, though the 0.65% across-the-board rescission willlikely reduce that to $6.0 billion. Coast Guard programs are usually authorized every2 years; authorization for FY2003 was included in the Maritime TransportationSecurity Act of 2002 ( P.L. 107-295 ). See CRS Report RS20924, Coast GuardLegislation in the 107th Congress , for discussion of authorization bills. CRS Report RS211125, Homeland Security: Coast Guard Operations-Background and Issuesfor Congress , and CRS Report RS21079, Maritime Security: Overview of Issues alsodiscuss related issues. CRS Report RS21303, Homeland Security: the Coast Guard'sFY2003 Budget , also addresses Coast Guard funding.

The FY2003 budget request was intended to allow the Coast Guard to continue its activities against drug smuggling and to recapitalize aircraft and vessel fleetswhile it conducts accelerated Homeland Security activities. A requested $4.2 billion($771 million, or 23%, more than FY2002) was for operation and maintenance of awide range of ships, boats, aircraft, shore units, and aids to navigation. The Senateand House committees in the 107th Congress each recommended $4.3 billion. (9) Asenacted, P.L. 108-7 included $4.3 billion. Another major component of the requestis allocated to acquisition, construction, and improvement. The Administrationsought $725 million, $89 million, or 14%, more than current year funding. TheSenate and House Committees on Appropriations had approved this amount. P.L.108-7 provides $742 million. For complying with environmental regulations andcleaning up contaminated Coast Guard sites, the budget seeks, and both committeeshad approved $17 million, the final amount approved by Congress. No funds wererequested for altering bridges, but the House Appropriations Committeerecommended $17 million, and Senate-passed H.J.Res. 2 includes $17million as well as $22 million requested for research and development, about thesame as approved by earlier actions. Other Coast Guard requested funding includes$62.1 million for spill clean-up and initial damage assessment, available withoutfurther appropriation from the Oil Spill Liability Trust Fund. The Senate and House recommended $889 million for retired pay, a mandatory expense, which P.L. 108-7 provides.

The chief issue for the Coast Guard is how it is handling its heightened security responsibilities along with its many other responsibilities, such as search and rescue,and enforcement of laws and treaties. The planned $771 million increase foroperating activities is to be allocated among Homeland Security and these traditionalactivities. Another prominent issue has been the Coast Guard's management of amajor planned replacement of aging and outmoded high seas vessels and aircraft,with a special emphasis on improving the Coast Guard's capabilities on the high seasor in deep waters. Only planning and analysis funds were included for FY1998through FY2001. For FY2003, $500 million was requested, a $179 million (56%)increase over FY2002 funding. The Senate Committee approved $480 million; P.L.108-7 provides $478 million. Actual purchases of nearly $10 billion are anticipatedover a 20-year period beginning in FY2002. CRS Report 98-830, Coast GuardIntegrated Deepwater System: Background and Issues for Congress , discusses theissues associated with the program.

On November 19, 2002, President Bush signed legislation creating a new federal agency, the Department of Homeland Security. Among the organizations which arescheduled to be transferred to this proposed new agency is the Coast Guard. Thebudget implications of this proposal are not clear; the Coast Guard's FY2003 budgetrequest represents 11% of the DOT's total budget request and 27% of theappropriated portion ($22.1 billion) of the DOT's budget.

Federal Aviation Administration (FAA)

http://www.faa.gov/

The Consolidated Appropriations Resolution ( P.L. 108-7 ) provides the FAA with $13.6 billion for FY2003 (this does not reflect a required 0.65% recession thatapplies to some portions of the FAA appropriation). This is essentially the sameamount provided earlier by both Senate-passed and House-recommended legislationand is essentially the amount requested by the Bush Administration. The generalfund contribution to FAA operations is set at $3.4 billion which is near theAdministration requested level and above the FY2002 level. The Act makes somechanges in existing FAA programs and consolidates various earmarks from Senateand House bills.

The Bush Administration was seeking $13.6 billion in budget authority forFY2003. This compares with total budgetary resources of $13.3 billion provided inthe FY2002 Appropriations Act. The vast majority of FAA funding is provided fromthe Airport and Airway Trust Fund. In FY2002 a Treasury general fund contributionof $1.113 billion was provided. The Administration proposed a general fundcontribution of almost $3.3 billion for FY2003. Whereas the general fundcontribution for FY2002 was on the low side historically, the Administration is nowtrying to return to a higher contribution level. Historically, a significant portion ofthe agency's budget has come from general fund revenues, the rationale being thatthe public at large realizes some benefit from aviation whether it uses the system ornot. (10)

The Senate Committee on Appropriations recommended $13.6 billion. The Senate Committee also accepted the Administration request for a general fundcontribution of $3.3 billion. There were a number of programmaticrecommendations in the Senate bill that differ from the Administration's request, butthese would not represent major changes to FAA programs or operations. The billalso included a significant number of earmarks in various program categories.

The House Committee on Appropriations version of FY2003 appropriations also supported a total spending level of nearly $13.6 billion for the FAA. Like its Senatecounterpart, the details of the bill differed in some ways from the Administration'srequest. The bill provided for a larger general fund contribution for operationsspending, $3.5 billion. The report accompanying the House bill enumerated agrowing concern about the long term health of the aviation trust fund. The events ofSeptember 11 have reduced air travel with a concomitant reduction in trust fundrevenue collections. As a result, the bill instructed the FAA to reexamine itsspending priorities in light of what could become a significantly tighter budgetenvironment.

Operations and Maintenance (O&M). The Administration proposed an FY2003 funding level of$7.1 billion for this activity, compared to $6.9 billion in FY2002. (11) P.L. 108-7 provides about $30 million less than the amount proposed by the Administration. The Senate Committee had previously proposed a funding level $4 million higherthan the Administration request, whereas the House provided for a reduction of $17million from the request. Both the House and Senate Committees contended thattheir recommendations were actually significant increases over FY2002 spendingbecause certain security functions found in the FY2002 FAA budget have since beentransferred to TSA. The majority of funding in this category is for the salaries ofFAA personnel engaged in air traffic control, certification, and safety relatedactivities.

Facilities and Equipment (F&E). The Consolidated Act provides $2.96 billion for this activity, which is slightly morethan the FY2002 level. The Administration proposed raising this amount to $3billion in FY2003, a level also adopted by the Senate Committee. The House billprovided for a similar level of spending. F&E funding is used primarily for capitalinvestment in air traffic control, and safety. There were no significant new F&Espending initiatives in the Administration proposal and there are none in theConsolidated Act.

Research, Engineering, and Development (RE&D). P.L. 108-7 provided $148.5 million for this activity, wellabove the Administration proposal of $124 million. This is well below the FY2002funding level and significantly below the $249 million authorized for this activity byFAIR21. Some of the difference is accounted for by a proposed transfer of $50million in appropriations to TSA budget and the fact that this activity got a $50million supplemental appropriation in FY2002.

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. The EAS program received $63 million in the FY2002appropriations bill plus $50 million in emergency supplemental appropriations,available through FY2003.

For FY2003, the Bush Administration predicts that overflight user fees will generate only $30 million. It therefore asked that $83 million in AirportImprovement Program (AIP) funding be provided from the airport and airway trustfund to bring EAS up to $113 million. P.L. 108-7 adopts this amount but changesthe funding sources to preclude use of trust fund monies. The Senate Committee billhad recommended slightly more funding for EAS, $115 million. The Senate believedthat all existing points receiving EAS could continue to be funded without tappinginto the AIP program. The House set the total funding level at $100 million. It toorejected the use of AIP funds for EAS. The House, however, suggestedthat F&E funds could be used to make up any shortfall in program funding, and alsosuggested that the EAS program has unused funds that will allow the FY2003program to operate at essentially the same level as it did in FY2002.

The FY2002 DOT Appropriations Act also provided $20 million for the somewhat related Small Community Air Service Development Pilot Program(SCASD). The President's budget proposal requests no funds for SCASD. TheSenate bill provides $20 million for this program for FY2003, as did the HouseAppropriations Committee. The Consolidated Act, however, provides no funding forthis program.

Grants-in-Aid for Airports. The Airport Improvement Program provides grants for airport development and planning.The Bush Administration FY2003 budget requested $3.4 billion for AIP. This wasa 3% increase over the FY2002 enacted level (not counting $175 million inemergency appropriations).

The Senate Committee on Appropriations recommended $3.4 billion for AIP ( S. 2808 ; S.Rept. 107-224 ). On October 7, 2002, the House Committeeon Appropriations also recommended $3.4 billion for AIP ( H.R. 5559 ; H.Rept. 107-722 ). The Consolidated Appropriations Resolution( H.J.Res. 2 ; H.Rept. 108-10 ; P.L. 108-7 ), which included the DOTappropriations legislation and was signed by President Bush on February 20, 2003,provided $3.4 billion less a 0.65% across-the -board rescission (roughly $20 million)for AIP. Administrative expenses were limited to $63.6 million and $20 million wasdesignated for the small community air service development pilot program. Theconference report ( H.Rept. 108-10 ) "place names" 164 airports (significantly fewerthan listed in the House or Senate reports) as AIP high priority projects. The reportlanguage, however, requires DOT to ensure that airport sponsors of the listed projectsfirst use available AIP formula funds to finance the projects. The report also directsthat the specific funding listed in the report should not "diminish or prejudice theapplication of a specific airport or geographic region to receive other AIPdiscretionary grants or multi-year letters of intent."

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. (12) For FY2003, the President requested$24.1 billion for FHWA. Thisrepresented a decrease of $9 billion, or 27%, from the FY2002 appropriation of $33.1billion. The obligation limitation, which supports most of the FAHP, was set at$23.2 billion and is significantly less than the $31.8 billion provided in FY2002. Funding for exempt programs (emergency relief and a portion of minimum guaranteefunding) was set at $893 million, down slightly from FY2002's $965 million. Theselevels of spending were in conformance with the Transportation Equity Act for the21st Century (TEA-21) ( P.L. 105-178 ). As detailed below, the steep decline inspending is a result of TEA-21 provisions that link federal highway programspending with the revenues that flow into the highway account of the Highway TrustFund-the revenue-aligned budget authority (RABA). The impact of a negativeRABA adjustment dominated the highway budget debate.

The House Committee on Appropriations recommended a total program level of $28.7 billion for FY2003. This would have been $4.2 billion less than the FY2002enacted level but $4.6 billion more than the President's budget request. In effect, theHouse Committee recommended elimination of the $4.369 negative FY2003 RABAbut, unlike the Senate Committee recommendation, would not have compensated forthe FY2002 RABA bonus to raise the total program funding to the FY2002 level.

The Senate Committee on Appropriations took a different approach and recommended a total FY2003 program level of $32.9 billion, roughly the same as theFY2002 level. The FY2003 limitation on obligations was set at $31.8 billion,virtually the same as FY2002 and $8.6 billion above the President's budget request. In effect, the Committee recommendation not only eliminated the $4.369 billionnegative FY2003 RABA, but provided amounts roughly equal to the FY2002 RABAbonus of $4.543 billion to raise the FY2003 obligation limitation to the FY2002level.

The FY2003 Consolidated Appropriations Resolution ( H.J.Res. 2 ; P.L. 108-7 ), which incorporated DOT's FY2003 appropriations and was signed byPresident Bush on February 20, 2003, provides $32.9 of total budgetary resources forFHWA. The Act, however, also included rescissions of previous years' funding of$264 million, and section 601 of the Act imposes an 0.65% across-the-boardrescission which will reduce the FHWA total by roughly another $200 million toapproximately $32.4 billion. As has been the case in the past three annual DOTappropriations bills, the FHWA discretionary programs have been extensivelyearmarked in the FY2003 Conference Report ( H.Rept. 108-10 ).

Revenue Aligned Budget Authority (RABA)Reduction. According to DOT estimates revenues (fuel taxes andother fees) accruing to the Highway Trust Fund decreased in FY2001 as a result ofthe then ongoing recession and the effects of September 11. Most of this decreasein activity seemed to be related to problems in the trucking industry. The RABAprocess created by TEA-21 required that federal highway obligational authority beadjusted accordingly. In simple terms this means that the RABA adjustment forFY2003 was a negative $4.37 billion. Core highway program obligational authorityfor FY2003 would, therefore, have been cut from the TEA-21 guaranteed level of$27.7 billion to approximately $23.2 billion. This $4.4 billion reduction inguaranteed spending, combined with the FY2002 RABA $4.5 billion addition to theTEA-21 guaranteed spending, resulted in a potential $8.6 billion reduction from theFY2002 level.

This was an unexpected and unwelcome development for state and local governments whose long-term transportation improvement plans (TIPs) are largelypredicated on continued growth in the federal contribution to highway programfunding. The RABA situation was equally unwelcome among those interests thatbuild roads or associated transportation infrastructure and those who supportcontinued highway improvements.

Hearings on this issue were held in both the House and the Senate during the 107th Congress. The FY2002 supplemental appropriations act ( H.R. 4775 ; P.L. 107-206 ) provided for a restoration of RABA funding for FY2003 to$28.9 billion. The Senate-passed bill went even further and increased funding to alevel comparable with that in FY2002, $31.8 billion (obligation limitation). TheHouse Committee had passed an appropriations bill that set spending at the $27.7billion level, but some Members of the House made it clear that they supported thehigher level contained in the Senate bill and supported adoption of the $31.8 billionfunding level in conference. P.L. 108-7 provides $31.8 billion.

The TEA-21 Funding Framework. TEA-21 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, TEA-21 can be viewed as a refinement and update ofthe ISTEA process. There are a few new funding initiatives in TEA-21, such as aBorder Infrastructure Program, but the vast majority of funding is reserved forcontinuing programs.

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 orother governmental entities. These programs include: the Federal Lands HighwayProgram, High Priority Projects (former demonstration project category),Appalachian Development Highway System roads (formerly ineligible for trust fundcontract authority), the National Corridor Planning and Border InfrastructureProgram, and several other small programs.

FHWA Research, Development, and Technology (RD&T) Programs. The Administration proposes decreased fundingfor various RD&T activities, from $417.5 million in FY2002 to $351.2 million inFY2003. The conferees provide a general limitation on transportation research of$462.5 million, as proposed by both the House and the Senate Committees andconsistent with the contract authority specified in TEA-21.

RD&T funds are used primarily to advance and deploy technologies intended to improve highway pavements, structures, roadway safety, highway policies, andintelligent transportation systems (ITS). The ITS deployment program provides fundsfor states and local governments to use advanced communication and informationsystems to improve the management and safety of their surface transportationsystems, primarily highway and transit systems.

An issue associated with the ITS deployment program is the earmarking of funds. During the last few years, the appropriators have earmarked a substantialportion of the incentive funds intended to accelerate ITS deployment. This practicewas continued in the FY2002 DOT Appropriations Act and the FY2003 ConsolidatedAppropriations Act. Some Members and proponents of ITS would prefer to have thedeployment funds competitively awarded. TEA-21, however, also specifies severalprojects which are to receive some of the ITS deployment funds.

Federal Motor Carrier Safety Administration (FMCSA)

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

The FMCSA was created by the Motor Carrier Safety Improvement Act of 1999 (MCSIA), P.L. 106-159 . (13) This agency becameoperational on January 1, 2000, andassumed the responsibilities and personnel of DOT's Office of Motor CarrierSafety. (14) 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 truck and bus safetyactivities. Most of the funds used to conduct FMCSA activities are derived from thefederal highway trust fund.

The FY2003 Administration request for the FMCSA was $367.5 million; this amount is provided for in the FY2003 Consolidated Appropriations Act, with $60million for border enforcement activities included within FHWA's limitation onadministrative expenses. The appropriation for FY2002 was $354.3 million,including funds contained in the supplemental appropriations measure. The FMCSAappropriation consists of three primary components: FMCSA operations andadministrative expenses, assistance to states for the conduct of truck and bus safetyprograms, and the border enforcement program.

Administrative and Research Expenses. The DOT FY2003 budget request for FMCSAadministrative and operations expenses was $117.5 million, including funds forresearch and technology (R&T). The conference agreement provides for this sameamount-$117.5 million. The FY2003 appropriation includes $7 million for researchand technology activities, which seek to improve truck and bus safety regulations andassociated safety and compliance activities conducted by both federal and stateenforcement officers.

Grants to States and Other Activities. The Administration's FY2003 request for these activitieswas $190 million. The conference agreement approved this level. A limitation onobligations of $205.9 million for the National Motor Carrier Safety Program(NMCSP) was provided in FY2002. These funds, are used primarily to pay for theMotor Carrier Safety Assistance Program (MCSAP), a grant program that helps thestates enforce truck and bus safety regulations. MCSAP grants cover, typically, upto 80% of the costs of a state's truck and bus safety program. Some 10,000 state andlocal public-utility and law-enforcement officers conduct more than 2.6 millionroadside inspections of trucks and buses annually under the program. Some fundsprovided in this sub-account of FMCSA are also used to pay for information systemsand analysis as well as other state compliance activities.

Border Enforcement. The Administration's FMCSA request also includes $60 million for border enforcementintended to enhance the ability of U.S. DOT and the states to promote the safety ofMexican trucks and buses entering the United States. The conference agreementapproved funding at the $60 million level as well.

National Highway Traffic Safety Administration (NHTSA)

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

In their conference report on H.J.Res. 2 ( H.Rept. 108-10 ), the Senate and House conferees established a total budget authority for the NationalHighway Traffic Safety Administration of $435.3 million. Of this amount, $225million is designated for the Highway Traffic Safety Grants component of theagency's funding. The remainder, $210.3 million is designated for the discretionarybudget authority and obligation limitation (from the highway trust fund) componentsof Operations and Research activities. This amount appears to be a compromisebetween the amount recommended by the respective appropriations committees ofthe Senate and House in their individual reports.

In S. 2808 , the Senate Committee on Appropriations recommended virtually across-the-board increases beyond the amounts requested by theAdministration for NHTSA programs. For FY2003, the Committee recommendedbudget authority for NHTSA of $440 million, approximately $15 million (3.5%) above the $425 million requested by the Administration and about four percent abovethe FY2002 enacted level of $423 million. The House Committee on Appropriationsrecommended total NHTSA funding of $430 million (comprised of approximately$205 million for Operations & Research and $225 million for Highway Traffic SafetyGrants), about $10 million less than the Senate recommendation, and approximately$5 million above the Administration's request.

Table 3. National Highway Traffic Safety Administration FY2003 Budget ($ millions)

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.

In addition, NHTSA, in its program highlights, has emphasized its intent to comply with the legislative requirement of the Transportation Recall Enhancement,Accountability, and Documentation (TREAD) Act ( P.L. 106-414 ). The TREAD Actrequires NHTSA to undertake more than a dozen rulemaking actions within the nexttwo years in the areas of tire safety standards, rollover propensity, and improvingchild safety.

In its report, the Senate Committee on Appropriations expressed its disappointment that NHTSA had not met its mandated deadline (under Section 13(h)of the TREAD Act,) to produce a study on the use and effectiveness of automobilebooster seats for children. That report was due November 1, 2001. The Committeeurged NHTSA to issue the results of the booster seat study without delay. Moreover,the Committee expressed concern that a previously established safety goal had notbeen achieved and that the agency adjusted that goal downward; NHTSA lowered itstarget of an 87% national seat belt usage rate in 2002 to a target of 78% in 2003.

In its report, the House Committee on Appropriations expressed its awarenessof "extensive dissatisfaction and a significant drop in morale following thereorganization" of NHTSA during fiscal year 2002. It indicated that temporarydissatisfaction can be expected when programs and responsibilities are altered, butthat if a resulting decline in program effectiveness continues into fiscal year 2003, theAdministrator should be prepared to address the negative results of thisreorganization during the fiscal year 2004 hearing cycle.

Federal Railroad Administration (FRA)

http://www.fra.dot.gov

For FY2003, the Administration requested $711 million in funding for the FRA, including $59 million in offsetting fees. This is $23 million less than the $734million provided in FY2002. The request provided $521 million for Amtrak, thesame amount provided in FY2002, but this is called a placeholder while theAdministration works on a proposal for a new structure for intercity passenger rail,involving a partnership between the Federal Government, the States, and the privatesector. Core safety and operations would receive $118 million, a $7 million increaseover the FY2002 level.

The Administration's request provided no funding for the Alaska Railroad rehabilitation, which received $20 million in FY2002. Spending for next generationhigh-speed rail development was reduced to $23 million, $9 million less than wasprovided in FY2002. The Administration requested $28 million for railroad researchand development.

The Consolidated Appropriations Resolution for FY2003, H.J.Res. 2 ( P.L. 108-7 ), provides $1.05 billion for Amtrak, which is lower than the $1.2billion originally approved by the Senate but more than the $763 million originallyrecommended by the House Transportation Appropriations Subcommittee. TheConsolidated Appropriations Act also provides $30 million for next generationhigh-speed rail development, which is $7 million more than the Administration'srequest. For core safety and operations and for railroad research and development,the Act provides similar amounts to the President's request, $117 million and $29million respectively. The Act provides $22 million for the Alaska Railroad versusthe President's request for no funding.

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

Railroad Safety and Research and Development. The FRA is the primary federal agency that promotesand regulates railroad safety. The Bush Administration proposed $118.2 million inFY2003 for FRA's safety program and related administrative and operating activities.Most of the funds are used to pay for salaries as well as associated travel and trainingexpenses for field and headquarters staff and to pay for information systemsmonitoring the safety performance of the rail industry. (15) Increased railroad trafficvolume and density make equipment, employees, and operations more vulnerable toadverse safety impacts. The Administration's request for FY2003 represents a nearly6% increase above the $111 million provided in the FY2002 DOT AppropriationsAct ( P.L. 107-87 ) for rail safety and operations. The conference agreement provides$117.4 in FY2003.

The railroad safety statute was last reauthorized in 1994. Funding authority forthe program expired at the end of FY1998. FRA's safety program continues using theauthorities specified in existing federal railroad safety law and funds provided byannual appropriations. Although hearings have been held since 1994, thedeliberations have not resulted in a consensus to enact a law to authorize continuedfunding for FRA's regulatory and safety compliance activities or change any of theexisting authorities used by FRA to promote railroad safety. A reauthorization statutechanging the scope and nature of FRA's safety activities would most likely affectbudgets after FY2003.

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'sFY2003 budget adequate to deal with that challenge? Congressional reaction to thesequestions had a bearing on the railroad safety budget for FY2002. In its FY2003budget, FRA requests 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 reportsaccompanying House and Senate transportation appropriation bills and in annualconference reports, the appropriations committees historically have allocated FRA'sR&D funds among various research categories pertaining to safety. The FY2002DOT appropriations act ( P.L. 107-87 ) provided $29 million for the R&D program.For FY2003, FRA requested $28.3 million for these activities. The conferenceagreement provides $29.3 million.

The request for FRA's safety and research and development programs includes a proposal to impose a user fee on the industry. The collected funds would offsetcosts of safety-related activities, raising an estimated $59 million that would becredited to the general fund in the U.S. Treasury; general funds appropriated for theprograms would be reduced by similar amounts. Industry, in the past, has objectedto such proposals, maintaining the industry already pays its share of taxes and investsheavily in safety. The conference agreement provides that none of this funding is tobe offset from user fees.

Next Generation High-Speed Rail R&D. In FY2002, $32.3 million was made available for the NextGeneration High-Speed Rail Program. The FRA requested $23.2 million to continuethis program in FY2003. The House Appropriations Committee recommended$30.45 billion, $7.25 billion over the Administration request; the Senate provided$30.0 million in H.J.Res. 2 . P.L. 108-7 provides $30.45 million.

Amtrak

http://www.amtrak.com

The President's FY2003 budget request for Amtrak was $521.5 million, the same as in FY2002. The President's budget noted that this was just a placeholderfigure until a new policy for passenger rail service was developed. In June 2002 theAdministration presented its principles for Amtrak reform, and announced it wouldnot support additional funding for Amtrak (over the $521.5 million) unlessaccompanied by significant reform to Amtrak. Amtrak had said as early as February2002 that it would need at least $1.2 billion in FY2003. The House AppropriationsCommittee recommended $762 million for Amtrak, while requiring better financialreporting from Amtrak and limiting the amount of operating support forlong-distance trains to $150 million, $50 million less than Amtrak says is requiredto maintain the current level of long-distance service. The Senate provided $1.2billion in H.J.Res. 2 . P.L. 108-7 provides $1.05 billion, and defersrepayment of a $100 million loan; Amtrak said that should be sufficient to keep itoperating through FY2003. In a change of policy, Amtrak's funding will not godirectly to the corporation, but to the Secretary of Transportation, who will providefunding to Amtrak quarterly through the grant-making process.

Amtrak's authorization expired at the end of FY2002; Congress is likely to consider Amtrak reauthorization during the first session of the 108th Congress. SeeCRS Report RL31743, Amtrak Issues in the 108th Congress , for further information.

Federal Transit Administration (FTA)

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

President Bush's FY2003 budget request for FTA is $7.226 billion, essentially the TEA-21 guaranteed level. This is a 7% increase above FTA's FY2002appropriation of $6.747 billion. (16) The HouseAppropriations Committeerecommended $7.226 billion, the amount requested. The Senate provided $7.226 in H.J.Res. 2 . P.L. 108-7 provides $7.226 billion (figures in this sectiondo not include the 0.65% rescission). For every existing FTA program Congressagreed with the amounts requested by the Administration.

The transit appropriations shown in Figure 4 illustrate the significant increase in FTA funding from FY1999 to FY2003 that occurred following the enactment ofTEA-21 in 1998.

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. In FTA's Formula Grants Program, 86% of the FY2003 funding is for the UrbanizedArea Formula Program, and 6% is for the Non-Urbanized Area Formula Program (less than 50,000 population). The remaining 8% is split between the other programs.

Capital Investment Grants and Loans Program (Section 5309). This program (formerly known as Section 3) hasthree components: new transit starts, fixed guideway modernization, and bus & busfacilities. The Administration requested $3.036 billion for FY2003, up from $2.841billion in FY2002, a 7% increase. The funds are allocated among these threecomponents on a 40-40-20 basis, respectively; funds for the fixed guidewaycomponent are distributed by formula, while funds for the other components aredistributed on a discretionary basis by FTA or earmarked by Congress. The HouseAppropriations Committee recommended $3.036 billion; the Senate provided $3.036billion in H.J.Res. 2 . P.L. 108-7 provided $3.036 billion.

Urbanized Area Formula Program (Section5307). 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 FY2003, the Administration proposed $3.3 billion (the TEA-21guaranteed amount), a 1% increase over the $3.26 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 House Appropriations Committee recommended the requested amount; theSenate provided the requested amount, and P.L. 108-7 provides the requestedamount, $3.3 billion.

With the enactment of TEA-21, 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.

Non-Urbanized Areas Formula Program (Section 5311), which provides capital and operating needs for non-urbanized areas (areas with populationsunder 50,000)-$235 million requested for FY2003 ($223 inFY2002);

Grants for Elderly and Individuals with Disabilities (Section5310)-$90 million requested for FY2003 ($85 million inFY2002);

Clean Fuels (Section 5308)-$50 million requested for FY2003;and

Rural Transportation Accessibility Incentive Program (Section3038), also known as the over-the-road bus accessibility program-$7 millionrequested for FY2003.

All of these proposed amounts were agreed to by the House Committee on Appropriations, provided by the Senate, and provided by P.L. 108-7 .

The President's budget request proposed to create a new formula program, the New Freedom Initiative, which seeks to use alternative methods to promote accessto transportation for persons with disabilities. The President's budget requested $145million for this program in FY2003. This request was not supported.

Job Access and Reverse Commute Program. TEA-21 authorized a new discretionary Job Accessand Reverse Commute grant program. This program provides funding fortransportation projects that assist welfare recipients and low-income persons to findand get to work in suburban areas. The Administration proposed $150 million inFY2003, up from $125 million in FY2002. P.L. 108-7 provides this amount.

Research and Special Programs Administration (RSPA)

http://www.rspa.dot.gov

For FY2003, RSPA requested a budget of $102.5 million (17) (of which about 70%is offset by user fees) compared to an appropriation of $96 million in FY2002. Mostof RSPA's budget is allocated to activities that promote transportation safety. Forits pipeline transportation safety program, RSPA proposed $63.8 million in FY2003,an increase of $5.6 million over FY2002. For its hazardous materials transportationsafety program, the agency requested $23.8 million in FY2003, an increase of $2.6million over FY2002. The House Committee recommendation was $99.6 million,including $58.7 million for pipeline safety and $23.0 million for hazardous materialssafety. The Senate approved $107.8 million for RSPA, including $63.9 million forpipeline safety and $23.1 million for hazardous materials safety. The conferenceagreement ( P.L. 108-7 ) provides $105 million, including $63.8 million for pipelinesafety and $23.3 million for hazardous materials transportation safety.

Table 4. Budgetary Resources of Selected Agencies andSelected Programs (in millions of dollars--totals may not add)

Note: Figures in Table 3 were taken from tables in House Committee on Appropriations reports. Because of differing treatment of offsets, the inclusion of the NTSB andArchitectural and Transportation Barriers Compliance Board, and the exclusion of theMaritime 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 supplementalappropriations, rescissions, and other funding actions. Columns may not add due torounding or exclusion of smaller program line-items.

a The figures for FY2002 reflect supplemental appropriations authorized under P.L. 107-38 and P.L. 107-206 .

b These figures do not reflect the 2.852% across-the-board rescission included in the Senatebill.

c These figures do not reflect the 0.65% across-the-board rescission included in P.L. 108-7 .

d The total FY2002 funding, including supplementals, was $113 million.

e TSA's total FY2002 funding, including supplementals, transfers and offsettingcollections, was $5.8 billion. The FY2003 figure includes estimated offsettingcollections of $2.65 billion. TSA's FY2003 request was increased by $546 millionand its estimate of offsetting collections was reduced by $124 million on September3, 2002.

f FY2002 figures are budget authority. The figures do not include the annual $64 millionin mandatory funding for boat safety grants.

g The FY2002 DOT Appropriations Act ( P.L. 107-87 ) provides for a rescission of $317million of FY2000 AIP contract authority. This rescission has no impact on thebudgetary resources available for FAA programs for FY2002 but is subtracted fromthe grand total because it is significant in relation to the overall budget cap for thetransportation function.

h FY2002 total reflects rescission of $59 million. FY2003 figure reflects a negative RABAadjustment of $4.4 billion.

i For Appalachian Development Highway System ($200 million).

j FY2003 figure reflects rescission of $59 million.

k Amtrak's total FY2002 funding was $1.1 billion, including supplemental and carryoverappropriations.

l The figures do not reflect $14 million in permanent appropriations. Therefore, therequested total resources for RSPA for FY2003 may be seen as $123 million.

m The DOT and related agencies appropriation does not fund the Maritime Administration(MARAD) or the Federal Maritime Commission (FMC), and their budgets aretherefore not included in this report. They receive funding from the Commerce,Justice, State appropriations bills. The Administration budgets do not include theNTSB or the Architectural and Transportation Barriers Compliance Board budgets;they are included in this total because their budgets are included in the DOTAppropriations bills. The rescission of unobligated previous years' contract authorityhave been subtracted from this total. Because the rescissions of prior years' contractauthority have no impact on the budgetary resources available for the current fiscalyear, the total resources available could be seen as $61.3 billion for FY2002 enacted,and $64.9 billion for FY2003 enacted.

List of Acronyms

ARC: Amtrak Reform Council

AIP: Airport Improvement Program (FAA)

AIR21: the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century ( P.L. 106-181 ), the current aviation authorizing legislation

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

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

BRR: Bridge Replacement and Rehabilitation program (FHWA)

BTS: Bureau of Transportation Statistics

CG: Coast Guard

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)

FAIR21: the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century ( P.L. 106-181 ), the current aviation authorizing legislation

FHWA: Federal Highway Administration

FRA: Federal Railroad Administration

FTA: Federal Transit Administration

Hazmat: Hazardous materials (safety program in RSPA)

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 new fixed-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 of the DOT

OST: Office of the Secretary of Transportation

RABA: Revenue-Aligned Budget Authority

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

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

RSPA: Research and Special Projects Administration

SCASD: Small Community Air Service Development program (FAA)

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 current highway and transit authorizing legislation

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

TSA: Transportation Security Administration

For Additional Reading

CRS Products

CRS Report RS20177. Airport and Airway Trust Fund Issues in the 106th 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 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 , byDavid Michael Bearden.

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

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 RS21164 . Highway Finance: RABA's Double-edged Sword , by [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 98-646 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 Budget in Brief FY2003 http://www.dot.gov/bib/bibindex.html

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

Appendix 1: The Transportation Appropriations Framework

Transportation is function 400 in the annual unified congressional budget. It isalso 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 transit account; the airportand airway trust fund; and the inland waterways trust fund. All of these accountsderive their respective funding from specific excise 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 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 the annual appropriations process, transportation appropriators are faced with the oppositesituation. That is, the authority to spend for the largest programs under their controlalready exists, and the mechanism to obligate funds for these programs also is inplace.

Transportation Equity Act for the 21st Century (TEA-21)

During the 105th and 106th Congresses, major legislation changed the relationships 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, it now appears that the RABA adjustment, if it had been left intact duringthe appropriations process, would have led to a significant and unexpected drop inthe availability of highway obligational funding.

TEA-21 changed the role of the House and Senate appropriations and budget committees 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 are adjusted byan annual RABA computation. In addition, it appears that TEA-21 precludes, atleast in part, the House and Senate appropriations committees from exercising whatsome Members view as their once traditional option of changing spending levels forspecific core programs or projects. In the FY2000 appropriations act, theappropriators took some tentative steps to regain some of their discretion overhighway spending. The FY2000 Act called for the redistribution of some fundsamong programs and added two significant spending projects. In the FY2001appropriations act, the appropriators continued in this vein by adding funds for largenumbers of earmarked projects. Further, the FY2001 Act called for redirection of alimited amount of funding between programs and includes significant additionalfunding for some TEA-21 programs. This trend continued, and even accelerated, inthe FY2002 Act as appropriators made major redistributions of RABA funds and, insome instances, transferred RABA funds to agencies that are not eligible for RABAfunding under TEA-21.

Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (FAIR21 or AIR21)

The Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (FAIR21 or AIR21)( P.L. 106-181 ) provides a so-called "guarantee" for FederalAviation Administration (FAA) program spending. The guarantee for aviationspending, however, is significantly different from that provided by TEA-21. Insteadof creating new budget categories, the FAIR21 guarantee rests on adoption of twopoint-of-order rules for the House and the Senate. Supporters of FAIR21 believe thenew law requires significant new spending on aviation programs; and, for at least theFY2001 and FY2002 appropriations cycles, spending grew significantly. Mostobservers view the FAIR21 guarantees, however, as being somewhat weaker thanthose provided by TEA-21. Congress can, and sometimes does, waivepoints-of-order during consideration of legislation.

Enactment of TEA-21 and FAIR21 means that transportation appropriators have total control over spending only for the TSA, the Coast Guard, the Federal RailroadAdministration (including Amtrak), and a number of smaller DOT agencies. All ofthese agencies are concerned about their funding prospects in any year where it isbelieved that there is a constrained budgetary environment.

Appendix 2: Transportation Budget Terminology

Transportation budgeting uses a confusing lexicon (for those unfamiliar with theprocess) of budget authority and contract authority --the latter, a form of budgetauthority. Contract authority provides obligational authority for the funding of trustfund-financed programs, such as the federal-aid highway program. Prior to TEA-21,changes in spending in the annual transportation budget component had beenachieved 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, entering into a contract to pay for a project at some future date. Under this arrangement, specifiedin Title 23 U.S.C., which TEA-21 amended, authorized funds are automatically madeavailable to the states at the beginning of each fiscal year and may be obligatedwithout appropriations legislation. Appropriations are required to make outlays atsome future date to cover these obligations. TEA-21 greatly limited the role of theappropriations process in core highway and transit programs because the Actenumerated the limitation on obligations level for the period FY1999 throughFY2003 in the Statute.

Highway and transit grant programs work on a reimbursable basis : states pay 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-term commitments. 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 to the states and to particular programs. The first of these, apportionments, refers to fundsdistributed 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.