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107th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 107-439
HIGHWAY FUNDING RESTORATION ACT
May 7, 2002.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
Mr. Young of Alaska, from the Committee on Transportation and
Infrastructure, submitted the following
R E P O R T
[To accompany H.R. 3694]
[Including cost estimate of the Congressional Budget Office]
The Committee on Transportation and Infrastructure, to whom
was referred the bill (H.R. 3694) to provide for highway
infrastructure investment at the guaranteed funding level
contained in the Transportation Equity Act for the 21st
Century, having considered the same, report favorably thereon
with an amendment and recommend that the bill as amended do
The amendment is as follows:
Strike all after the enacting clause and insert the
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Highway Funding Restoration Act''.
SEC. 2. FEDERAL-AID HIGHWAY PROGRAM OBLIGATION CEILING.
Section 1102 of the Transportation Equity Act for the 21st Century
(23 U.S.C. 104 note; 112 Stat. 115, 113 Stat. 1753) is amended by
adding at the end the following:
``(k) Restoration of Obligation Limitation for Fiscal Year 2003.--
Notwithstanding any other provision of law, for fiscal year 2003, the
obligations for Federal-aid highway and highway safety construction
programs that are subject to the obligation limitation set forth in
``(1) shall be not less than $27,746,000,000; and
``(2) shall be distributed in accordance with this
SEC. 3. RESTORATION OF OBLIGATION CEILING.
Notwithstanding any other provision of law, the adjustment made
pursuant to section 1102(h) of the Transportation Equity Act for the
21st Century for fiscal year 2003 shall be deemed to be zero.
SEC. 4. ADJUSTMENTS TO GUARANTEE FUNDING LEVELS.
Notwithstanding any other provision of law, all adjustments made
pursuant to section 251(b)(1)(B) of the Balanced Budget and Emergency
Deficit Control Act of 1985 to the highway category and to section
8103(a)(5) of the Transportation Equity Act for the 21st Century for
fiscal year 2003 shall be deemed to be zero. This section shall apply
immediately to all reports issued pursuant to section 254 of the
Balanced Budget and Emergency Deficit Control Act of 1985 for fiscal
year 2003, including the discretionary sequestration preview report.
SEC. 5. SENSE OF CONGRESS REGARDING REVENUE ALIGNED BUDGET AUTHORITY.
It is the sense of Congress that the revenue aligned budget authority
provision in section 251(b)(1)(B) of the Balanced Budget and Emergency
Deficit Control Act of 1985 should be amended in the future to more
accurately align highway spending with highway revenues while
maintaining predictability and stability in highway funding levels.
Purpose of the Legislation
The purpose of H.R. 3694 is to restore not less than $4.4
billion to the Federal-aid highway and highway safety
construction programs in fiscal year (FY) 2003 and to ensure
that this money is spent according to the formula established
by the Transportation Equity Act for the 21st Century (TEA 21).
To accomplish this, the bill deems the adjustment made pursuant
to the Revenue Aligned Budget Authority (RABA) provision of TEA
21 to the highway budget category and guaranteed highway
funding level to be zero in FY 2003. The bill also includes a
sense of the Congress section that the RABA provision should be
amended to more accurately align highway spending with highway
revenues, while maintaining predictability and stability in
Background and Need for the Legislation
Upon enactment of TEA 21, for the first time, funding for
the Federal-aid highway program was linked to highway user fee
revenues deposited into the Highway Trust Fund (HTF). This was
achieved in part by a budgetary mechanism included in TEA 21
called Revenue Aligned Budget Authority (RABA). The purpose of
RABA is to adjust the guaranteed amount of highway funding
available to reflect the most recent estimates of Highway Trust
Due to an unexpected downturn in highway revenues, the FY
2003 President's Budget proposed an $8.6 billion or 27 percent
cut in highway funding, based on the RABA provision of TEA 21.
While the Committee continues to strongly support the principle
behind RABA, it has become clear that the method by which RABA
is calculated should be improved.
Given the current state-of-the-art in revenue forecasting,
the RABA calculation can result in large swings in guaranteed
highway funding levels. Just last year, the Treasury Department
projected such significant increases in highway revenues that
RABA adjusted FY 2002 highway spending upward from the level in
TEA 21 by $4.5 billion. Now, one year later, Treasury is
projecting such significant decreases in highway revenues that
RABA would adjust FY 2003 highway investment downward from the
level in TEA 21 by $4.4 billion. This would result in an $8.6
billion decrease below the 2002 enacted level of $32 billion.
H.R. 3694 reverses this $4.4 billion downward adjustment,
thereby restoring the highway budget category and guaranteed
funding level to the $28 billion level that was envisioned in
TEA 21 for FY 2003.
Restoring the $4.4 billion is important for the following
First, state departments of transportation cannot be
expected to absorb a cut of this magnitude in one year,
especially at a time when State revenues are also declining.
The States depend on a predictable and sustainable level of
funding from the federal government to ensure that highway
programs will have a continuous flow of investment to the meet
the needs of the American people. The 27 percent cut in highway
funds proposed in the President's Budget will decimate State
transportation programs, delay efforts to decrease road
congestion and deny the traveling pubic all of the benefits
that would result from reduced congestion--shortened travel
times, increased productivity and economic growth, and improved
Second, transportation spending keeps people employed.
Cutting highway spending by 27 percent would lead to
significant job loss and threaten economic recovery. States
have already begun to slow construction of projects in
anticipation of the funding cut proposed in the President's
Budget. Restoring FY 2003 highway spending to the $28 billion
level envisioned in TEA 21 would save more than 180,000 family-
wage jobs across the country.
Third, the cash balance in the Highway Trust Fund is
currently about $20 billion, more than adequate to accommodate
the restoration of $4.4 billion. By law, Highway Trust Fund
balances can only be used for highway and transit programs. The
funds are there, and the Committee believes they should be used
to restore the highway program to a reasonable, sustainable
Summary of the Legislation
Section 1.--Short title
This Act may be cited as the ``Highway Funding Restoration
Section 2.--Federal-aid highway program obligation ceiling
This section amends section 1102 of TEA 21 to provide that,
for FY 2003, the obligations for federal-aid highway and
highway safety construction programs shall not be less than
$27,746,000,000. This section also requires the funding to be
distributed according to TEA 21.
Section 3.--Restoration of obligation ceiling
This section provides that, for FY 2003, the RABA
adjustment to the obligation ceiling in section 1102 of TEA 21
is deemed to be zero.
Section 4.--Adjustments to guarantee funding levels
Section 4 provides that, for FY 2003, the RABA adjustments
made to the highway budget category and the guaranteed highway
funding level are deemed to be zero. This sectionwill
immediately apply to all discretionary sequestration reports that are
produced by OMB for FY 2003, including the discretionary sequestration
Section 5.--Sense of Congress regarding revenue aligned budget
In this section Congress expresses the need to make the
RABA calculation more accurate and predictable in order to
stabilize highway program funding.
Legislative History and Committee Consideration
H.R. 3694 was introduced by Chairman Don Young, Ranking
Minority Member Jim Oberstar, Highway and Transit Subcommittee
Chairman Tom Petri, and Highway and Transit Subcommittee
Ranking Minority Member Robert Borski on February 7, 2002. It
was referred the Committee on Transportation and Infrastructure
and has 317 cosponsors. No hearings were held on the bill. A
full committee mark-up was held on May 1, 2002, where the bill,
as introduced, was amended. The amendment passed unanimously by
voice vote. The amended legislation was ordered reported to the
House unanimously by voice vote.
Clause 3(b) of rule XIII of the House of Representatives
requires each committee report to include the total number of
votes cast for and against on each rollcall vote on a motion to
report and on any amendment offered to the measure or matter,
and the names of those members voting for and against. There
were no rollcall votes during consideration of the bill.
Committee Oversight Findings
With respect to the requirements of clause 3(c)(1) of rule
XIII of the Rules of the House of Representatives, the
Committee's oversight findings and recommendations are
reflected in this report.
Cost of Legislation
Clause 3(c)(2) of rule XIII of the Rules of the House of
Representatives does not apply where a cost estimate and
comparison prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974 has been timely submitted prior to the filing of the
report and is included in the report. Such a cost estimate is
included in this report.
Compliance With House Rule XIII
1. With respect to the requirement of clause 3(c)(2) of
rule XIII of the Rules of the House of Representatives, and
308(a) of the Congressional Budget Act of 1974, the Committee
references the report of the Congressional Budget Office
2. With respect to the requirement of clause 3(c)(4) of
rule XIII of the Rules of the House of Representatives, the
Committee advises that the general performance goals and
objectives of the legislation are to provide for additional
infrastructure investment which will reduce highway congestion,
shorten travel times, increase productivity and economic
growth, and improve safety. It is also the goal of the bill to
provide additional jobs in the construction industry.
3. With respect to the requirement of clause 3(c)(3) of
rule XIII of the Rules of the House of Representatives and
section 402 of the Congressional Budget Act of 1974, the
Committee has received the following cost estimate for H.R.
3694 from the Director of the Congressional Budget Office.
Congressional Budget Office,
Washington, DC, May 6, 2002.
Hon. Don Young,
Chairman, Committee on Transportation and Infrastructure,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3694, the Highway
Funding Restoration Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Rachel
Barry B. Anderson
(For Dan L. Crippen, Director).
CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
H.R. 3694--Highway Funding Restoration Act
Summary: H.R. 3694 would amend the Transportation Equity
Act for the 21st Century (TEA-21) by authorizing an increase in
the obligation limitation for the Federal-Aid Highway program
of nearly $4.4 billion in 2003. TEA-21 provides budget
authority for the Federal-Aid Highway program in the form of
contract authority, the authority to incur obligations in
advance of appropriations. Spending from the program, however,
is largely controlled by limits on annual obligations set in
appropriations acts. Although TEA-21 includes specific
obligation limitations for the Federal-Aid Highway program,
each year appropriations acts include a limitation that may or
may not be the same as the amounts in TEA-21.
Assuming the 2003 appropriations act includes an obligation
limitation equal to the limitation in the bill, CBO estimates
that H.R. 3694 would cost $4.2 billion over the 2003-2007
period, and an additional $0.2 billion after 2007. H.R. 3694
would not affect direct spending or receipts; therefore, pay-
as-you-go procedures would not apply. The bill contains no
intergovernmental or private-sector mandates as defined in the
Unfunded Mandates Reform Act (UMRA) and would benefit states.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 3694 is shown in the following table.
The costs of this legislation fall within budget function 400
By fiscal year, in millions of dollars--
2003 2004 2005 2006 2007
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Authorization level \1\.................................. 0 0 0 0 0
Estimated outlays........................................ 1,180 1,835 743 262 175
\1\ Budget authority for the Federal-Aid Highway program is provided as mandatory contract authority in
authorization legislation such as TEA-21. Changing the obligation limitation, as H.R. 3694 would do, does not
affect such budget authority.
Basis of estimate: For this estimate, CBO assumes that H.R.
3694 will be enacted in fiscal year 2002, that the
appropriation action for 2003 will adopt the new obligation
limitation, and that spending from the Federal-Aid Highway
program will follow historical patterns.
Under current law, the Office of Management and Budget
(OMB) must calculate an annual adjustment to TEA-21 known as
revenue-aligned budget authority (RABA). To calculate this
adjustment, OMB compares current estimates of receipts to the
Highway Trust Fund to amounts specified in TEA-21. This number
is used to adjust the level of contract authority for the
Federal-Aid Highway program, the obligation limitation for that
program in TEA-21, the outlay cap for the highway category of
discretionary spending, and the obligation limitation
associated with the highway category.
OMB has calculated a reduction of almost $4.4 billion for
the 2003 RABA adjustment. (The adjustment applies TEA-21's
obligation limitation for 2003; but the adjustment to contract
authority is scheduled for 2004.) For the purposes of adjusting
the TEA-21 obligation limitation for the Federal-Aid Highway
program, the outlay cap of the highway category, and the
obligation limitation of the highway category for 2003, H.R.
3694 would make the RABA adjustment equal zero. H.R 3694 would
not affect the RABA adjustment to contract authority.
By exempting the 2003 TEA-21 obligation limitation for the
Federal-Aid Highway program from any RABA adjustment, H.R. 3694
would increase that limitation by almost $4.4 billion. Assuming
the 2003 appropriation acts set a limitation equal to the
amount in TEA-21, implementing H.R. 3694 would cost about $4.4
billion over the next seven years.
Exempting the highway category from any RABA adjustment in
2003 would affect the enforcement of Congressional Budget
rules, but it would not have a direct effect on the federal
budget. The highway category includes the Federal-Aid Highway
program, programs for motor carrier safety, and programs for
highway traffic safety. Discretionary spending from these
programs depends on the budget authority and obligation
limitations set in annual appropriations acts. Increasing the
highway category would not authorize additional appropriations,
but it would increase the amount of spending authorized under
current law that would be considered under the highway
Pay-as-you-go considerations: None.
Intergovernmental and private-sector impact: H.R. 3694
contains no intergovernmental or private-sector mandates as
defined in UMRA. The bill would retain the 2003 obligation
limitation for federal aid to highways at the level set in TEA-
21. In the absence of the bill, states would receive about $4.4
billion less in federal aid than the level set in TEA-21 for
2003. Because states voluntarily participate in the programs
that provide federal aid for highways, any costs they incur as
a result of enactment of this bill would be voluntary as well.
Estimate prepared by: Federal costs: Rachel Milberg; impact
on state, local, and tribal governments: Susan Sieg Tompkins;
impact on the private sector: Jean Talarico.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
Constitutional Authority Statement
Pursuant to clause (3)(d)(1) of rule XIII of the Rules of
the House of Representatives, committee reports on a bill or
joint resolution of a public character shall include a
statement citing the specific powers granted to the Congress in
the Constitution to enact the measure. The Committee on
Transportation and Infrastructure finds that Congress has the
authority to enact this measure pursuant to its powers granted
under article I, section 8 of the Constitution.
Federal Mandates Statement
The Committee adopts as its own the estimate of federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act. (Public Law 104-4).
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act are created by this
Applicability to the Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act. (Public Law
House of Representatives,
Committee on Transportation and Infrastructure,
Washington, DC, May 2, 2002.
Hon. Jim Nussle,
Chairman, Committee on the Budget,
Cannon Building, Washington, DC.
Dear Mr. Chairman: Thank you for your letter of May 2,
2002, regarding H.R. 3694, the Highway Funding Restoration Act
and for your willingness to waive consideration of provisions
in the bill that fall within your Committee's jurisdiction
under House Rules.
I agree that your waiving consideration of relevant
provisions of H.R. 3694 does not waive your Committee's
jurisdiction over the bill. I also acknowledge your right to
seek conferees on any provisions that are under your
Committee's jurisdiction during any House-Senate conference on
H.R. 3694 or similar legislation, and will support your request
for conferees on such provisions.
As you request, your letter and this response will be
included in the committee report on the legislation as well the
Congressional Record during consideration of the House Floor.
Thank you for your cooperation in moving this important
House of Representatives,
Committee on the Budget,
Washington, DC, May 2, 2002.
Hon. Don Young,
Chairman, Committee on Transportation and Infrastructure,
Rayburn House Office Building, Washington, DC.
Dear Mr. Young: On May 1, 2002 the Committee on
Transportation and Infrastructure ordered reported H.R. 3694,
the Highway Funding Restoration Act. At introduction, H.R. 3694
was referred solely to the Committee on Transportation and
Infrastructure. In committee, however, an amendment was adopted
that added three new sections to the bill. Section four,
``Adjustments to Guarantee Funding Levels,'' and section five
``Sense of Congress Regarding Aligned Budget Authority'' are
within the primary jurisdiction of the Budget Committee. I want
to thank you for working closely with me to ensure that those
provisions were acceptable to the Budget Committee.
Because of our close working relationship on this matter
and in order to expedite the consideration of H.R. 3694, I do
not intend to seek a sequential referral of the bill as ordered
reported. In not seeking a sequential referral of H.R. 3694,
the committee does not waive its jurisdiction or its
prerogatives over this legislation. The Budget Committee also
reserves the authority to seek conferees on H.R. 3694 or a
similar Senate bill with respect to provisions that are within
the committee's jurisdiction; and, I ask your commitment to
support any such request by the Budget Committee.
Finally, I would ask that you include a copy of our
exchange of letters on this matter in your committee report and
in the Congressional Record during floor consideration. Thank
you for your assistance and cooperation in this matter.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (new matter is
printed in italic and existing law in which no change is
proposed is shown in roman):
SECTION 1102 OF THE TRANSPORTATION EQUITY ACT FOR THE 21ST CENTURY
SEC. 1102. OBLIGATION CEILING.
(a) * * *
* * * * * * *
(k) Restoration of Obligation Limitation for Fiscal Year
2003.--Notwithstanding any other provision of law, for fiscal
year 2003, the obligations for Federal-aid highway and highway
safety construction programs that are subject to the obligation
limitation set forth in subsection (a)(6)--
(1) shall be not less than $27,746,000,000; and
(2) shall be distributed in accordance with this