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107th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     107-644

======================================================================



 
                   TRANSIT OPERATING FLEXIBILITY ACT

                                _______
                                

 September 5, 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. 5157]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Transportation and Infrastructure, to whom 
was referred the bill (H.R. 5157) to amend section 5307 of 
title 49, United States Code, to allow transit systems in 
urbanized areas that, for the first time, exceeded 200,000 in 
population according to the 2000 census to retain flexibility 
in the use of Federal transit formula grants in fiscal year 
2003, and for other purposes, having considered the same, 
report favorably thereon without amendment and recommend that 
the bill do pass.

                          Background and Need

    The Federal Transit Administration apportions formula funds 
authorized in 49 United States Code, section 5307 to designated 
recipients (State departments of transportation, responsible 
local officials and publicly owned operators of mass 
transportation) in urbanized areas with more than 50,000 in 
population according to a formula developed in the Intermodal 
Surface Transportation Efficiency Act (Public Law 102-240). For 
urbanized areas between 50,000 and 200,000 in population, this 
formula is based on population and population density. For 
areas over 200,000 in population, this formula is based on 
population, population density, and vehicle revenue miles as 
reported to the National Transit Database. Section 5307(b) of 
49 U.S.C. authorizes the Secretary of Transportation to make 
grants of formula funds for transit-related operating expenses 
in urbanized areas with a population of less than 200,000. 
However, urbanized areas with populations greater than 200,000 
can use formula funds for capital equipment, facilities, and 
associated maintenance items only--not for operating expenses.
    Urbanized area population designations are determined by 
the decennial census. For purposes of programs administered by 
the Federal Transit Administration, section 5302(a)(17) of 49 
U.S.C. defines urbanized areas as encompassing an area so 
designated by the Secretary of Commerce (through the U.S. 
Bureau of the Census). The notice announcing qualifying 
urbanized areas as determined by the 2000 Census of Population 
and Housing for the United States, Puerto Rico, and the Island 
Areas was published in the Federal Register on May 1, 2002. 
Because of substantial changes in the criteria used by the 
Bureau of the Census to identify urbanized areas between the 
1990 and 2000 Census periods, there were an unusually high 
number of significant urbanized area changes, including new 
urbanized areas, areas formed by splits or mergers, name 
changes, and areas with significant boundary changes. Among 
these changes were a total of 52 communities that had been 
classified as under 200,000 in population in the 1990 Census 
that went to being classified as over 200,000 in the 2000 
Census, either because the city grew, or was absorbed into a 
larger nearby metropolitan area, or was combined with another 
nearby small city. Many of the public officials and transit 
providers in these 52 urbanized areas were unaware of their 
change in status, and had not prepared for the loss of 
flexibility in the use of their federal transit funds. For some 
transit systems that were not anticipating this change, the 
loss of operating flexibility will be devastating, perhaps even 
shutting the doors of some of the agencies, thus causing an 
immediate loss of public transportation services in the area.
    H.R. 5157 will provide a one-year grace period for the 
affected communities that, for the first time, exceeded 200,000 
in population according to the 2000 Census. The bill allows the 
Secretary of Transportation to make formula grants to transit 
operators in these communities using the new urbanized 
areapopulation designations and relevant vehicle revenue miles data 
while permitting transit providers in the affected communities to use 
up to the amount apportioned in fiscal year 2002 for operating 
purposes. This continued flexibility gives these transit operators time 
to adjust to their new urbanized area status and make any necessary 
changes to capital and operating budgets for fiscal year 2004.

                       Summary of the Legislation

    Section one amends section 5307 of title 49, United States 
Code, to allow transit systems in urbanized areas that, for the 
first time, exceeded 200,000 in population according to the 
2000 Census to retain flexibility in the use of federal transit 
formula grants in fiscal year 2003. The bill strikes the last 
sentence of the paragraph in section 5307(b)(1), which refers 
to operating flexibility for fiscal year 1998 funds. A new 
section 5307(2) is inserted that creates a special rule for 
fiscal year 2003, providing increased flexibility for urbanized 
areas that are now more than 200,000 in population under the 
2000 Census if (i) the urbanized area had a population of less 
than 200,000 under the 1990 Census; (ii) a portion of the 
urbanized area was a separate urbanized area of less than 
200,000 under the 1990 Census; or (iii) the area was less than 
50,000 under the 1990 Census. A maximum amount to be available 
for operating purposes is set at a level of no more than the 
total amount apportioned to the affected urbanized areas in 
fiscal year 2002.

            Legislative History and Committee Consideration

    The issue of ``crossing 200,000'' in population according 
to the 2000 Census urbanized area designations was discussed in 
a hearing of the Highways and Transit Subcommittee of the 
Committee on Transportation and Infrastructure on June 20, 2002 
(Federal Transit Administration Capital Grants Programs). The 
Honorable Jennifer Dorn, Administrator of the Federal Transit 
Administration, was questioned regarding the impact of these 
changes and the need for action before the beginning of fiscal 
year 2003, when FTA is required to use the most recent census 
data in the formula grant apportionment formulas. On June 28, 
2002, Committee Chairman Don Young wrote to Administrator Dorn 
to ask how the FTA would implement the language that was 
subsequently introduced on July 18 as H.R. 5157, with 38 
original cosponsors. Subcommittee action on the bill was 
waived, and the Committee on Transportation and Infrastructure 
met in open markup session on July 24, 2002 and approved H.R. 
5157 without amendment, by voice vote.

                      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)(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. 
5157 from the Director of the Congressional Budget Office.

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 30, 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. 5157, a bill to 
amend section 5307 of title 49, United States Code, to allow 
transit systems in urbanized areas that, for the first time, 
exceeded 200,000 in population according to the 2000 census to 
retain flexibility in the use of federal transit formula grants 
in fiscal year 2003, and for other purposes.
    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. 5157--A bill to amend section 5307 of title 49, United States 
        Code, to allow transit systems in urbanized areas that, for the 
        first time, exceeded 200,000 in population according to the 
        2000 census to retain flexibility in the use of federal transit 
        formula grants in fiscal year 2003, and for other purposes

    Summary: H.R. 5157 would allow certain communities to use 
some of their grants from the Federal Transit Administration 
(FTA) on operating expenses as well as capital projects. 
Assuming appropriation of amounts authorized for those grants, 
CBO expects that implementing the bill would increase how 
quickly the communities spend their grants; however, CBO 
expects that net spending from the grant program would not 
change over the 2003-2007 period.
    Under current law, FTA provides grants to urbanized areas 
for capital projects under the Formula Grants program. 
Communities with a population of less than 200,000 according to 
the most recent census, can use some of their grants for 
operating expenses. Information from the 2000 census changed 
the status of certain communities that receive grants under 
this program. For example, some communities that were under 
this threshold before the 2000 census are now over it. Other 
communities that were considered separate urbanized areas under 
the threshold before the 2000 census are now considered part of 
a larger urbanized area. H.R. 5157 would allow those 
communities to continue using their grants for fiscal year 2003 
for operating expenses.
    H.R. 5157 would not affect direct spending or receipts; 
therefore, pay-as-you-go procedures would not apply. H.R. 5157 
contains no intergovernmental or private-sector mandates as 
defined in the Unfunded Mandates Reform Act (UMRA) and would 
impose no costs on state, local, or tribal governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 5157 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
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION

Spending Under Current Law for FTA's Formula Grants Program:
    Authorization Level 1..........................................    3,989        0        0        0        0
    Estimated Outlays..............................................    3,215    2,805    1,820    1,223      762
Proposed Changes:
    Authorization Level............................................        0        0        0        0        0
    Estimated Outlays..............................................       10        2       -5       -4       -3
Spending Under H.R. 5157 for FTA's Formula Grants Program:
    Authorization Level............................................    3,989        0        0        0        0
    Estimated Outlays..............................................    3,225    2,807    1,815    1,219      759
----------------------------------------------------------------------------------------------------------------
1 The 2003 authorization level is the amount authorized for the Formula Grants program under current law. The
  authorization for that program expires after 2003.

    Basis of estimate: For this estimate, CBO assumes that H.R. 
5157 will be enacted near the end of fiscal year 2002 and that 
the amount currently authorized for the FTA grant program will 
be appropriated for 2003. Changes in estimated outlays are 
based on historical spending patterns of the Formula Grants 
program and information from FTA.
    CBO estimates that about 50 communities would be eligible 
to use their transit grants for operating expenses under H.R. 
5157. Although several of those communities would use their 
grants only for capital projects, CBO estimates that about half 
of the communities would take advantage of the increased 
flexibility under H.R. 5157. On average, communities could 
receive about $1 million to cover their operating costs. 
Because grants to cover operating expenses are expended more 
quickly than grants for capital costs, CBO expects that 
implementing H.R. 5157 would increase the overall rate of 
spending from the FormulaGrants program; however, CBO expects 
that net spending from the program would not change over the 2003-2007 
period.
    Pay-as-you-go considerations: None.
    Intergovernmental and private-sector impact: H.R. 5157 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments.
    Estimate prepared by: Federal Costs: Rachel Milberg; Impact 
on State, Local, and Tribal Governments: Greg Waring; Impact on 
the Private Sector: Cecil McPherson.
    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).

                        Preemption Clarification

    Section 423 of the Congressional Budget Act of 1994 
requires the report of any Committee on a bill or joint 
resolution to include a statement on the extent to which the 
bill or joint resolution is intended to preempt state, local or 
tribal law. The Committee states that H.R. 5157 does not 
preempt any state, local, or tribal law.

                      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).

         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 (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

              SECTION 5307 OF TITLE 49, UNITED STATES CODE


Sec. 5307. Urbanized area formula grants

  (a) * * *
  (b) General Authority.--(1) The Secretary of Transportation 
may make grants under this section for capital projects and to 
finance the planning and improvement costs of equipment, 
facilities, and associated capital maintenance items for use in 
mass transportation, including the renovation and improvement 
of historic transportation facilities with related private 
investment. The Secretary may also make grants under this 
section to finance the operating cost of equipment and 
facilities for use in mass transportation in an urbanized area 
with a population of less than 200,000. [The Secretary may make 
grants under this section from funds made available for fiscal 
year 1998 to finance the operating costs of equipment and 
facilities for use in mass transportation in an urbanized area 
with a population of at least 200,000.]
    (2) Special rule for fiscal year 2003.--
          (A) Increased flexibility.--The Secretary may make 
        grants under this section, from funds made available to 
        carry out this section for fiscal year 2003, to finance 
        the operating cost of equipment and facilities for use 
        in mass transportation in an urbanized area with a 
        population of at least 200,000 as determined under the 
        2000 decennial census of population if--
                  (i) the urbanized area had a population of 
                less than 200,000 as determined under the 1990 
                Federal decennial census of population;
                  (ii) a portion of the urbanized area was a 
                separate urbanized area with a population of 
                less than 200,000 as determined under the 1990 
                Federal decennial census of population; or
                  (iii) the area was not designated as a 
                urbanized area as determined under the 1990 
                Federal decennial census of population.
          (B) Maximum amounts.--Amounts made available pursuant 
        to subparagraphs (A)(i) and (A)(ii) shall be no more 
        than the amount apportioned in fiscal year 2002 to the 
        urbanized area with a population of less than 200,000 
        as determined in the 1990 Federal decennial census of 
        population. Amounts made available pursuant to 
        subparagraph (A)(iii) shall be no more than the amount 
        apportioned under this section for fiscal year 2003.
  [(2)] (3) In a transportation management area designated 
under section 5305(a) of this title, amounts that cannot be 
used to pay operating expenses under this section also are 
available for a highway project if--
          (A) * * *

           *       *       *       *       *       *       *

          (C) the metropolitan planning organization in 
        approving the use under subparagraph (A) determines 
        that the local transit needs are being addressed.
  [(3)] (4) A project for the reconstruction of equipment and 
material, each of which after reconstruction will have a fair 
market value of at least .5 percent of the current fair market 
value of rolling stock comparable to the rolling stock for 
which the equipment and material will be used, is a capital 
project for an associated capital maintenance item under this 
section.

           *       *       *       *       *       *       *