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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 
pass.
  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

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 
subsection (a)(6)--
          ``(1) shall be not less than $27,746,000,000; and
          ``(2) shall be distributed in accordance with this 
        section.''.

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 
highway funding.

                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 
Fund revenues.
    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 
three reasons.
    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 
safety.
    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 
funding level.

                       Summary of the Legislation


Section 1.--Short title

    This Act may be cited as the ``Highway Funding Restoration 
Act''.

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 
preview report.

Section 5.--Sense of Congress regarding revenue aligned budget 
        authority

    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.

                             Rollcall Votes

    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 
included below.
    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.

                                     U.S. Congress,
                               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 
Milberg.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

               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 
(transportation).

----------------------------------------------------------------------------------------------------------------
                                                                  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 
category.
    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 
legislation.

                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 
104-1).

                        Committee Correspondence

                          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 
legislation.
            Sincerely,
                                                 Don Young,
                                                          Chairman.
                                ------                                

                          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.
            Sincerely,
                                                Jim Nussle,
                                                          Chairman.

         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 
        section.