[Congressional Record Volume 142, Number 117 (Friday, August 2, 1996)]
[Senate]
[Pages S9561-S9562]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. THURMOND (for himself, Mr. Faircloth, Mr. Hollings, Mr. 
        Coats, and Mr. Helms):

  S. 2022. A bill to amend title 23, United States Code, to modify the 
minimum allocation formula under the Federal-aid highway program, to 
provide reimbursement to each State with respect to which the highway 
users in the State paid into the highway trust fund an amount in excess 
of the amount received by the State from the highway trust fund, and 
for other purposes; to the Committee on Environment and Public Works.


                 The Surface Transportation Equity Act

  Mr. THURMOND. Mr. President, I rise today to introduce legislation, 
on behalf of myself and Senators Faircloth, Hollings, Coats, and Helms, 
to correct one of the most inequitable and unfair policies of our 
Government--the Federal aid to highways distribution formulas. 
Currently, our Federal Aid to Highways Program collects 18.3 cents tax 
on each gallon of gasoline. That money is then sent to the Federal 
Treasury where deductions are made for deficit reduction and other 
Department of Transportation programs. The remainder is then 
apportioned among the States by statutory formulas which is used for 
infrastructure projects. In 1995, South Carolina received 52 cents for 
each dollar its citizens contributed to the fund. Other States were 
allocated $2 or more for each dollar contributed. This disparity is 
inexcusable.
  This donor State system was originally devised to build the 
Interstate Highway System. In order to build highways across the vast 
expanses of the less populated Western States, it was necessary to 
incorporate a system in which some States contribute more than they 
receive. Next year, the last segment of the Interstate System will be 
completed. Subsequently, all our surface transportation priorities will 
then be local, but the donor/donee system with its unfair formulas will 
still be in place.

  The statutory formulas are largely based on 1950's population data. 
Needless to say, there have been great population shifts in this 
country since that time. As a result, high-growth States have become 
desperate to find money to cope with the growing demand for highway 
construction and maintenance. Other States, however, are allocated such 
an excess amount that some of their funds go unused. In some cases they 
seek legislation to use the money for more exotic transportation 
purposes. We should not be building roads where people have been--we 
shoud build them where they are or where they are going. The present 
situation is equivalent to laying railroad tracks behind the train. It 
is inefficient, wasteful, and does not address the transportation needs 
of our Nation.
  Unlike other programs, our Federal aid highway system was intended to 
be a user fee system where the gas taxes motorists pay go to maintain 
and improve the roads on which they drive. Unfortunately, the current 
system does not work in that manner. For example, when a school teacher 
in Mt. Pleasant, SC, buys gas to commute to her job in Charleston, she 
should expect that the tax she has paid is going to pay part of the 
cost of replacing the Cooper River Bridge which is in danger of 
collapse. Instead, 48 cents of each dollar she pays in gas tax goes to 
finance projects in other States. On the other hand, when a school 
teacher in one of the donee States does the same thing, she receives 
more than double her money back in road improvements. This is simply 
unfair.
  The donor States have made tremendous sacrifices to build the 
Interstate System from which we all benefit. They have for years 
postponed addressing critical highway needs at home. The time has come 
for our national policy to recognize this contribution and address this 
issue fairly.
  Mr. President, the bill we are introducing is simple. It stipulates 
that the portion of the Federal highway distribution to a State in each 
year shall be equal to its percentage of all contributions to the fund. 
In other words, if South Carolina contributes 1.8 percent of the trust 
fund in a year, it would get back 1.8 percent of whatever amount is 
appropriated out of the fund that year. Further, my bill would 
establish a 5-year program to bring the historic donor States into 
parity with the rest of the country. After implementation of this bill 
then we will have a Federal Highway Program that is fair to all.
  Mr. President, if we are to reauthorize a Federal Highway Program, it 
must be a fair one. My bill presents a fair and equitable formula for 
doing this. I urge my colleagues to join us in support of this 
legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2022

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Surface Transportation 
     Equity Act of 1996''.

     SEC. 2. MINIMUM ALLOCATION.

       (a) Fiscal Year 1998 and Thereafter.--Section 157(a) of 
     title 23, United States Code, is amended by adding at the end 
     the following:
       ``(5) Fiscal year 1998 and thereafter.--In fiscal year 1998 
     and each fiscal year thereafter, the Secretary, after making 
     the allocations described in section 3 of the Surface 
     Transportation Equity Act of 1996, shall allocate among the 
     States amounts sufficient to ensure that a State's percentage 
     of the total apportionments in each fiscal year and 
     allocations for the prior fiscal year from funds made 
     available out of the Highway Trust Fund is not less than 100 
     percent of the percentage of estimated tax payments 
     attributable to highway users in the State paid into the 
     Highway Trust Fund in the latest fiscal year for which data 
     are available.''.
       (b) Conforming Amendment.--Section 157(a)(4) of title 23, 
     United States Code, is amended by striking the paragraph 
     designation and all that follows before ``on October 1'' and 
     inserting the following:
       ``(4) Fiscal years 1992-1997.--In each of fiscal years 1992 
     through 1997,''.

     SEC. 3. DONOR STATE REIMBURSEMENT.

       (a) Allocation.--Over the period consisting of fiscal years 
     1998 through 2002, the Secretary of Transportation shall 
     proportionally allocate to each eligible State described in 
     subsection (b) the total amount of the excess described in 
     subsection (b).
       (b) Eligible States.--For the purpose of this section, an 
     eligible State is a State with respect to which the highway 
     users in the State paid into the Highway Trust Fund, during 
     the period consisting of July 1, 1957, through the end of the 
     latest fiscal year for which data are available, an amount in 
     excess of the amount received by the State from the Highway 
     Trust Fund during that period.
       (c) Formula.--For each fiscal year, the Secretary of 
     Transportation shall allocate the amounts made available 
     under subsection (a) for the fiscal year in such a way

[[Page S9562]]

     as to bring each successive eligible State, or eligible 
     States, with the lowest dollar return on dollar paid into the 
     Highway Trust Funding during the period described in 
     subsection (b) up to the highest common return on dollar paid 
     that can be funded with the amounts made available under 
     subsection (a).
       (d) Applicability of Chapter 1 of Title 23.--Funds 
     allocated under this section shall be available for 
     obligation in the same manner and for the same purposes as if 
     the funds were apportioned for the surface transportation 
     program under chapter 1 of title 23, United States Code, 
     except that the funds shall remain available until expended.
       (e) Administrative Expenses.--
       (1) Deduction.--For each fiscal year, prior to making 
     allocations under this section, the Secretary of 
     Transportation shall deduct such amount, not to exceed 3\3/4\ 
     percent of the amount made available under subsection (f) for 
     the fiscal year, as the Secretary determines is necessary to 
     pay the administrative expenses of carrying out this section. 
     Amounts so deducted shall remain available until expended.
       (2) Consideration of prior deductions.--In determining each 
     amount to be deducted under paragraph (1), the Secretary of 
     Transportation shall take into consideration the unexpended 
     balance of any amounts deducted for prior fiscal years under 
     paragraph (1).
       (f) Authorization of Appropriations.--There are authorized 
     to be appropriated out of the Highway Trust Fund such sums as 
     are necessary to carry out this section.

  Mr. HOLLINGS. Mr. President, 5 years ago I opposed legislation 
extending our Nation's Highway Program. I did that, not because we do 
not need highways--they have been a fine investment--but because the 
funding distribution to States had become so egregiously unfair that it 
threatened support for any highway program at all. It is interesting to 
note that today we have proposals in the Congress essentially to follow 
that logic by repealing most of the program to the States on the basis 
that the Federal funding pattern is so incredibly wrong. As such, I 
make the case again today for a fair and rational distribution of 
highway funds and put the Senate on notice that the distribution must 
change when the Congress considers highway program revisions next year. 
The U.S. General Accounting Office has studied highway spending again 
since the 1991 ISTEA legislation, and reported in November 1995 what 
Senators have long known--a formula that provided South Carolina 52 
cents this year for a dollar of taxes contributed is unfair and 
untenable.
  This is not just a matter of my State receiving less. It is a matter 
of how best to distribute funds for our Nation's highway needs. 
Objective studies have found that our current funding pattern is wrong, 
outdated, and unconnected to highway needs. As the GAO put it, ``the 
States' funding shares for the four major programs are divorced from 
current conditions,'' and the underlying factors for the two largest 
programs are ``irrelevant to the highway system's needs.''
  Particularly, the current distribution to States includes 
significant, indirect influences from earlier, unfair funding patterns. 
It includes postal road factors from the 1921 formula, population data 
from the 1980 census, and bridge costs reported from States nearly a 
decade ago which were wildly disparate. Why should South Carolina have 
gotten $38 per square foot to replace bridges while the District of 
Columbia received $223 per square foot? Why should these amounts be 
grandfathered into today's allocations?
  Not only did the GAO declare last year that these formula factors are 
``irrelevant,'' it suggested better factors more than 10 years ago. At 
that time, the GAO recommended making a transition to a more fair 
formula in a way that did not hurt states that had been receiving a 
greater than equitable share of highway formulas. But as the GAO 
reported last year, ``However, the Congress elected not to change the 
basic formula structure.''
  Mr. President, I voted against ISTEA because of the objective, well-
documented unfairness of the highway formula, and will vigorously 
oppose any highway bill next year that does not provide fairness. The 
legislation we are introducing here today is a good starting point to 
better address our Nation's highway needs.
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