Congressional Record, Volume 149 Issue 100 (Wednesday, July 9, 2003)

[Congressional Record Volume 149, Number 100 (Wednesday, July 9, 2003)]
[Senate]
[Pages S9120-S9125]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mr. JOHNSON:
S. 1379. A bill to require the Secretary of the Treasury to mint
coins in commemoration of veterans who became disabled for life while
serving in the Armed Forces of the United States; to the Committee on
Banking, Housing and Urban Affairs.
Mr. JOHNSON. Mr. President, I rise today to introduce the American
Veterans Disabled for Life Commemorative Coin Act of 2003. This bill
will authorize the Secretary of the Treasury to mint a commemorative
coin honoring the millions of veterans of the U.S. Armed Forces who
were disabled while serving our country. Revenues from the surcharge on
the coin would go to the Disabled Veterans' LIFE Memorial Foundation to
help cover the costs of building the American Veterans Disabled for
Life Memorial in Washington, DC.
The three-acre site for the Memorial is located on Washington Avenue
at 2nd Street, SW., across from the U.S. Botanic Gardens, and in full
view of the U.S. Capitol Building. Federal legislation for the
Memorial, Public Law 106-348, was signed into law by President Bill
Clinton on October 24, 2000. Sponsors included Senator John McCain,
Senator Max Cleland, Congressman Sam Johnson, and Congressman Jack
Murtha. The National Capital Planning Commission unanimously approved
the Capitol Hill location on October 10, 2001.
The mission of the Disabled Veterans' LIFE Memorial Foundation is to
commemorate the selfless and continuing sacrifice of America's 2.3
million living disabled veterans, ensuring they will always be
remembered; to provide all Americans with a place to express their
appreciation for the men and women who came home from war bearing the
scars of our great Nation's defense, and to serve as an eternal
reminder of disabled veterans' honor, service, and sacrifice.
Recent events have brought about a renewed reverence and respect for
the men and women who gave so much in service of our Nation. This
legislation would help bring national attention to America's disabled
veterans, and would serve as a fitting tribute to their sacrifice.
The Disabled Veterans LIFE Memorial Foundation was co-founded in 1996
by the Lois Pope Life Foundation and the Disabled American Veterans.
Lois Pope, one of America's leading philanthropists, is the founder and
President of the Lois Pope Leaders in Furthering Education Foundation.
In addition to supporting veterans programs, this organization provides
awards for medical research, scholarships, and summer camp programs.
Formed in 1920, the Disabled American Veterans is a nonprofit
organization representing America's disabled veterans, their families,
and survivors.
The drive to build the Memorial, which is scheduled for completion
within the next several years, is well under way, but has a long way to
go. Prominent national figures including Retired Army General H. Norman
Schwarzkopf, Poet Laureate Dr. Maya Angelou, and New York Giants star
defensive end Michael Strahan are lending their support to this effort.
We have an obligation to assure that men and women who each day
endure the cost of freedom are never forgotten. The American Veterans
Disabled for Life Commemorative Coin Act of 2003 will honor these
veterans and help fund the American Veterans Disabled for Life
Memorial. I ask my colleagues in the Senate to join me in supporting
America's disabled veterans with this important legislation.
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. 1379

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 ``American Veterans Disabled
for Life Commemorative Coin Act''.

SEC. 2. FINDINGS.

Congress finds that--
(1) the armed forces of the United States have answered the
call and served with distinction around the world - from
hitting the beaches in World War II in the Pacific and
Europe, to the cold and difficult terrain in Korea, the
steamy jungles of Vietnam, and the desert sands of the Middle
East;
(2) all Americans should commemorate those who come home
having survived the ordeal of war, and solemnly honor those
who made the ultimate sacrifice in giving their lives for
their country;
(3) all Americans should honor the millions of living
disabled veterans who carry the scars of war every day, and
who have made enormous personal sacrifices defending the
principles of our democracy;
(4) in 2000, Congress authorized the construction of the
American Veterans Disabled for Life Memorial;
(5) the United States should pay tribute to the Nation's
living disabled veterans by

[[Page S9121]]

minting and issuing a commemorative silver dollar coin; and
(6) the surcharge proceeds from the sale of a commemorative
coin would raise valuable funding for the construction of the
American Veterans Disabled for Life Memorial.

SEC. 3. COIN SPECIFICATIONS.

(a) $1 Silver Coins.--The Secretary of the Treasury
(hereafter in this Act referred to as the ``Secretary'')
shall mint and issue not more than 500,000 $1 coins in
commemoration of disabled American veterans, each of which
shall--
(1) weigh 26.73 grams;
(2) have a diameter of 1.500 inches; and
(3) contain 90 percent silver and 10 percent copper.
(b) Legal Tender.--The coins minted under this Act shall be
legal tender, as provided in section 5103 of title 31, United
States Code.
(c) Numismatic Items.--For purposes of section 5134 of
title 31, United States Code, all coins minted under this Act
shall be considered to be numismatic items.

SEC. 4. SOURCES OF BULLION.

The Secretary shall obtain silver for minting coins under
this Act only from stockpiles established under the Strategic
and Critical Materials Stock Piling Act.

SEC. 5. DESIGN OF COINS.

(a) Design Requirements.--
(1) In general.--The design of the coins minted under this
Act shall be emblematic of the design selected by the
Disabled Veterans' LIFE Memorial Foundation for the American
Veterans Disabled for Life Memorial.
(2) Designation and inscriptions.--On each coin minted
under this Act, there shall be--
(A) a designation of the value of the coin;
(B) an inscription of the year ``2006''; and
(C) inscriptions of the words ``Liberty'', ``In God We
Trust'', ``United States of America'', and ``E Pluribus
Unum''.
(b) Selection.--The design for the coins minted under this
Act shall be--
(1) selected by the Secretary, after consultation with the
Disabled Veterans' LIFE Memorial Foundation and the
Commission of Fine Arts; and
(2) reviewed by the Citizens Coinage Advisory Committee.

SEC. 6. ISSUANCE OF COINS.

(a) Quality of Coins.--Coins minted under this Act shall be
issued in uncirculated and proof qualities.
(b) Mint Facility.--Only 1 facility of the United States
Mint may be used to strike any particular quality of the
coins minted under this Act.
(c) Period for Issuance.--The Secretary may issue coins
under this Act only during the calendar year beginning on
January 1, 2006.

SEC. 7. SALE OF COINS.

(a) Sale Price.--The coins issued under this Act shall be
sold by the Secretary at a price equal to the sum of--
(1) the face value of the coins;
(2) the surcharge provided in subsection (d) with respect
to such coins; and
(3) the cost of designing and issuing the coins (including
labor, materials, dies, use of machinery, overhead expenses,
marketing, and shipping).
(b) Surcharges.--All sales of coins issued under this Act
shall include a surcharge of $10 per coin.
(c) Bulk Sales.--The Secretary shall make bulk sales of the
coins issued under this Act at a reasonable discount.
(d) Prepaid Orders.--
(1) In general.--The Secretary shall accept prepaid orders
for the coins minted under this Act before the issuance of
such coins.
(2) Discount.--Sale prices with respect to prepaid orders
under paragraph (1) shall be at a reasonable discount.

SEC. 8. DISTRIBUTION OF SURCHARGES.

(a) In General.--Subject to section 5134(f) of title 31,
United States Code, all surcharges received by the Secretary
from the sale of coins issued under this Act shall be paid to
the Disabled Veterans' LIFE Memorial Foundation for the
purpose of establishing an endowment to support the
construction of American Veterans' Disabled for Life Memorial
in Washington, D.C.
(b) Audits.--The Comptroller General of the United States
shall have the right to examine such books, records,
documents, and other data of the Disabled Veterans' LIFE
Memorial Foundation as may be related to the expenditures of
amounts paid under subsection (a).

SEC. 9. FINANCIAL ASSURANCES.

(a) No Net Cost to the Government.--The Secretary shall
take such actions as may be necessary to ensure that minting
and issuing coins under this Act will not result in any net
cost to the United States Government.
(b) Payment for Coins.--A coin shall not be issued under
this Act unless the Secretary has received--
(1) full payment for the coin;
(2) security satisfactory to the Secretary to indemnify the
United States for full payment; or
(3) a guarantee of full payment satisfactory to the
Secretary from a depository institution whose deposits are
insured by the Federal Deposit Insurance Corporation or the
National Credit Union Administration Board.
______

By Mr. SMITH (for himself, Mr. Bayh, Mr. Allen, Mr. Crapo, Mr.
Hagel, Mr. Coleman, Mr. Bennett, Mr. Hatch, Mr. Enzi, Mr.
Thomas, and Mr. Fitzgerald):
S. 1380. A bill to distribute universal service support equitably
throughout rural America, and for other purposes; to the Committee on
Commerce, Science, and Transportation.
Mr. SMITH. Mr. President, today I rise in support of fairness for
rural America and introduce the Rural Universal Service Equity Act of
2003.
Universal service is a decades old Federal program intended to keep
telephone service available and affordable across America. The Federal
Universal Service Program has been a tremendous success. America's
telephone network is the envy of the world. However, the program faces
challenges, and it is imperfect.
The Rural Universal Service Equity Act addresses an inequity in the
way Universal Service support is distributed to rural customers served
by larger phone companies. Under the program, only eight States receive
funding. Three of those States receive more than 80 percent of the
funds and one State receives more than half of all dollars available
under the program.
Yet many of the most rural States in America the very States the
program was intended to assist--receive no funding at all. North
Dakota, South Dakota, Idaho, Iowa, Utah, Kansas, Oklahoma, New Mexico,
Nebraska and other rural States receive no funding under this program.
My State of Oregon is an example of the unfairness of the program.
Oregon has an average of 36 residents per square mile, according to
U.S. Census Bureau data. Oregon has many rural and remote areas but
does not receive any funding under this program for larger carriers.
However, States with between 60 and 101 residents per square mile or
more than twice the density of Oregon--receive 90 percent of the
funding.
How could this happen? When the FCC created this program in 1999, it
determined which States would be eligible for funding by comparing the
average cost of providing telephone service per line in each State to a
benchmark tied to the national average cost per line. If a State's
average cost of service per line exceeded the benchmark, that State
would be eligible for funding. If the average cost was below the
national benchmark, it would not be eligible.
This method is skewed, in part, because telephone service in a
metropolitan area is less expensive to provide than service in a rural
area. Customers in cities are closer to one another, and the same
facilities can serve more people at a lower cost.
As a consequence, if you are served by a larger carrier and you live
in a State with a city--no matter how rural an area, or no matter how
far from the city you live--your State probably receives no support.
This problem is exacerbated because the FCC formula also doesn't
fully account for the actual cost of providing service in rural areas
with natural obstacles such as mountains, lakes and rivers.
In short, the formula is flawed, and the result is unfair to millions
in rural America: Three States that are not among the 15 least
populated States--receive more than 80 percent of the fund.
The Rural Universal Service Equity Act of 2003 would make this
program fair. The Act directs the FCC to replace the current state-wide
average formula with a new formula that distributes funds to telephone
company wire centers with the highest cost.
Wire centers are the telephone facilities where all of the telephone
lines in a given area converge. And because funds would be directed to
high-cost wire centers, as opposed to States with the highest average
costs, rural residents would no longer be penalized if they lived in a
State with a city hundreds of miles away.
The Act also: directs the FCC to develop rules to implement a program
that is equitable among States; delegates to the FCC the determination
of what an appropriate benchmark for what a high cost wire center
should be; directs the FCC to not increase the size of the current
program for high cost carriers; ensures a minimum level of support for
States that currently receive funding under the program; and

[[Page S9122]]

requires GAO to study and report back to Congress on the need for
comprehensive universal service reform.
Finally, I am concerned that the Universal Service Program has
challenges beyond the inequities of the program for larger carriers. I
look forward to participating in the broader debate on how to reform
the Universal Service Program and ensure its long term viability and
effectiveness. This bill will help further that debate.
However, broadly reforming the Universal Service Program is complex
and divisive. It may take years. And I do not believe the inequities of
the program for larger carriers should be allowed to continue while
Congress grapples with the broader issues. Millions of rural Americans
are being disserved, and we can solve this one problem today.
I urge my colleagues to join me and support the Rural Universal
Service Equity Act of 2003. I ask unanimous consent that the text of
the legislation be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1380

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 ``Rural Universal Service
Equity Act of 2003''.

SEC. 2. FINDINGS AND PURPOSE.

(a) Findings.--Congress makes the following findings:
(1) The Federal Communications Commission's high cost
program for certain carriers provides no Federal support to
42 States.
(2) Federal universal service support should be calculated
and targeted to small geographic regions within a State to
provide greater assistance to the rural consumers most in
need of support.
(3) Local telephone competition and emerging technologies
are threatening the viability of Federal universal service
support.
(b) Purposes.--The purposes of this Act are as follows:
(1) To begin consideration of universal service reform.
(2) To spread the benefits of the existing Federal high
cost support mechanism more equitably across the nation.

SEC. 3. COMPTROLLER GENERAL REPORT ON NEED TO REFORM HIGH
COST SUPPORT MECHANISM.

Not later than one year after the date of the enactment of
this Act, the Comptroller General shall submit to Congress a
report on the need to reform the high cost support mechanism
for rural, insular, and high cost areas. As part of the
report, the Comptroller General shall provide an overview and
discuss whether--
(1) existing Federal and State high cost support mechanisms
ensure rate comparability between urban and rural areas;
(2) the Federal Communications Commission and the States
have taken the necessary steps to remove implicit support;
(3) the existing high cost support mechanism has affected
the development of local competition in urban and rural
areas; and
(4) amendments to section 254 of the Communications Act of
1934 (47 U.S.C. 254) are necessary to preserve and advance
universal service.

SEC. 4. ELIGIBILITY FOR UNIVERSAL SERVICE SUPPORT FOR HIGH
COST AREAS.

Section 254 of the Communications Act of 1934 (47 U.S.C.
254) is amended by adding at the end the following new
subsection:
``(m) Universal Service Support for High Cost Areas.--
``(1) Calculating support.--In calculating Federal
universal service support for eligible telecommunications
carriers that serve rural, insular, and high cost areas, the
Commission shall, subject to paragraphs (2) and (3), revise
the Commission's support mechanism for high cost areas to
provide support to each wire center in which the incumbent
local exchange carrier's average cost per line for such wire
center exceeds the national average cost per line by such
amount as the Commission determines appropriate for the
purpose of ensuring the equitable distribution of universal
service support throughout the United States.
``(2) Hold harmless support.--In implementing this
subsection, the Commission shall ensure that no State
receives less Federal support calculated under paragraph (1)
than the State would have received, up to 10 percent of the
total support distributed, under the Commission's support
mechanism for high cost areas as in effect on the date of the
enactment of this subsection.
``(3) Limitation on total support to be provided.--The
total amount of support for all States, as calculated under
paragraphs (1) and (2), shall be equivalent to the total
support calculated under the Commission's support mechanism
for high cost areas as in effect on the date of the enactment
of this subsection.
``(4) Construction of limitation.--The limitation in
paragraph (3) shall not be construed to preclude fluctuations
in support on the basis of changes in the data used to make
such calculations.
``(5) Implementation.--Not later than 180 days after the
date of the enactment of this subsection, the Commission
shall complete the actions (including prescribing or amending
regulations) necessary to implement the requirements of this
subsection.
``(6) Definition.--In this subsection, the term
`Commission's support mechanism for high cost areas' means
sections 54.309 and 54.311 of the Commission's regulations
(47 CFR 54.309, 54.311), and regulations referred to in such
sections.''.

SEC. 5. NO EFFECT ON RURAL TELEPHONE COMPANIES.

Nothing in this Act shall be construed to affect the
support provided to an eligible telecommunications carrier
under section 214(e) of the Communications Act of 1934 (47
U.S.C. 214(e)) that is a rural telephone company (as defined
in section 3 of such Act (47 U.S.C. 153)).
______

By Ms. SNOWE (for herself, Mrs. Lincoln, Mr. Smith, Mr. Breaux,
Mr. Miller, Mr. Chambliss, Mr. Pryor, Ms. Collins, Ms.
Landrieu, Mr. Shelby, and Mr. Craig):
S. 1381. A bill to amend the Internal Revenue Code of 1986 to modify
certain provisions relating to the treatment of forestry activities; to
the Committee on Finance.
Ms. SNOWE. Mr. President, I rise today to introduce the Reforestation
Tax Act of 2003, and I am pleased to be joined by Senators Lincoln,
Smith, Breaux, Miller, Chambliss, Pryor, Collins, Landrieu, Shelby and
Craig.
The U.S. forest products industry is essential to the health of the
U.S. economy. It employs approximately 1.5 million people, supports an
annual payroll of $40.8 billion, and ranks among the top ten
manufacturing employers in 46 States. This includes the State of Maine
where 89.2 percent of the land is forested. Without fair tax laws,
future growth in the industry will occur overseas and more and more
landowners will be forced to sell their land for some other higher
economic value such as development. The loss of a health and strong
forest products industry will have a long-term negative impact on both
the economy and the environment.
The legislation I am introducing today partially restores the balance
between corporate and private landowners in terms of capital gains tax
treatment by reducing the capital gains paid on timber for individuals
and corporations. The bill is also intended to encourage the
reforestation of timberland, whether it has been harvested or
previously cleared for other uses, such as agriculture.
Trees take a long time to grow, anywhere from 15 years to, more
typically in Maine, 40 to 50 years. During these years, the grower
faces huge risks from fire, pests, weather and inflation, all of which
are uninsurable. This legislation helps to mitigate these risks by
providing a sliding scale reduction in the amount of taxable gain based
on the number of years the asset is held.
Specifically, the bill would change the way that capital gains are
calculated for timber by taking the amount of the gain and subtracting
three percent for each year the timber was held. The reduction would be
capped at 50 percent bringing the effective capital gains tax rate to
7.5 percent for most non-corporate holdings and 17.5 percent for
corporations.
Since 1944, the tax code has treated timber as a capital asset,
making it eligible for the capital gains tax rate rather than the
ordinary income tax rate. This recognized the long-term risk and
inflationary gain in timber. Tax bill enacted in 1997 and in 2003
lowered the capital gains rate for individuals, but not for
corporations. As a result, individuals face a maximum capital gains
rate of 15 percent, while corporations face a maximum rate of 35
percent for the identical asset.
As this difference in rates implies, non-corporate timberland owners
receive far more favorable capital gains tax treatment than corporate
owners. In addition, pension funds and other tax-exempt entities are
also investing in timberland, which only further highlights the
disparity that companies face.
Secondly, reforestation expenses are currently taxed at a higher rate
in the U.S. than in any other major competitor country. The U.S.
domestic forest products industry is already struggling to survive
intense competition from the Southern Hemisphere where labor and fiber
costs are extremely low, and recent investments from wealthier nations
who have built state of the art

[[Page S9123]]

pulp and papermaking facilities. While there is little Congress can do
to change labor and fiber costs, Congress does have the ability to
level the playing field when it comes to taxation.
This legislation encourages both individuals and companies to engage
in increased reforestation by allowing all growers of timber to deduct
all reforestation expenses in the year such costs are incurred.
Currently, only the first $10,000 of reforestation expenses is eligible
for a ten percent tax credit and can be amortized over seven years.
Eligible reforestation expenses are the initial expenses to establish
a new stand of trees, such as site preparation, the cost of the
seedlings, the labor costs required to plant the seedlings and to care
for the trees in the first few years, as well as the cost of equipment
used in reforestation.
The planning of trees should be encouraged rather than discouraged by
our tax system as trees provide a tremendous benefit to the
environment, preventing soil erosion, cleansing streams and waterways,
providing habitat for numerous species, and absorbing carbon dioxide
from the atmosphere.
Tax incentives for planting on private lands will also decrease
pressure to obtain timber from ecologically sensitive public lands,
allowing these public lands to be protected.
Finally, the bill would notify the passive loss rules for small,
closely-held landowners to allow them to deduct normal operating
expenses pertaining to management of their timber lands.
I ask my colleagues for their support for private landowners and for
the U.S. forest products industry that is so important to the health of
the our economy.
______

By Mr. ALLARD:
S. 1384. A bill to amend title 23, United States Code, to provide
State and local authorities a means by which to eliminate congestion on
the Interstate System; to the Committee on Environment and Public
Works.
Mr. ALLARD. Mr. President, as the month of August nears and the
remaining summer days dwindle, many Americans are turning their
attention to the highway as they plan family vacations and road trips,
setting their sights on destinations that may be close to home or
several States away. As they plot their travel plans, they must take
into account several road-related factors, including, what route to
take, which highway to use and how long it will take to get to their.
Road safety, highway quality and congestion will undoubtedly be major
considerations that will enter this equation.
In addition to personal mobility, roads also serve as the backbone of
the national economy. Our economic success depends on a sound
transportation system that efficiently carries goods to and from the
marketplace. We must work diligently throughout the upcoming highway
re-authorization to provide a policy framework that facilitates access
to both markets for goods and places for people.
It is for these reasons, among others, that I rise today to introduce
the Freeing Alternatives to Speedy Transportation Act, or for short,
the FAST Act--legislation that will ease and alleviate traffic
congestion, increase highway capacity, decrease pollution and improve
the quality of life for millions of Americans. The legislation has
already been introduced in the House of Representatives by Congressman
Kennedy of Minnesota. His bi-partisan version of the bill has gained
strong support and momentum, and I thank him for his leadership on
transportation matters.
It is easy to say how important our roads are to our success. But the
question that has everyone stumped is how to pay for it all. We must
look to creative policies that place the State in the drivers seat
toward ending the transportation funding dilemma--policies that
capitalize on user choice and private financing. The FAST Act provides
just that--flexibility and innovation to move forward with important
Interstate highway expansion projects--projects that would not be
possible with out the FAST Act--to ease congestion and alleviate the
strain on our roads.
The FAST Act removes the obstacles that prevent States from
collecting user fees on Interstate highway expansion projects. It
allows a State to create an authority that collects user fees to
finance expansion lanes on Interstates, while building in several
protective measures that boost consumer confidence and protection. The
fees are collected only on the expansion land--the existing lanes
remain open and free of charge. Fees can be used only for the
construction of the FAST lane and accompanying structures--the money
cannot be diverted to other accounts or projects. It allows the State
to collect, as part of the fee, a maintenance reserve for that lane,
and guarantees that the fee will be removed once the project is paid
off. In other words, the fee pays for the project, ends, and the FAST
lane then becomes available to everyone free of the fee. While I
realize this bill is but one avenue in bridging our highway policy
needs, the options it opens through user-choice and dedicated funding
will promote sound State planning and decision making.
The FAST Act has the support of the Colorado Department of
Transportation, think tanks, State governments and many others who hope
to find new ways to expend highways. Tom Norton, Executive Director of
the Colorado Department of Transportation, wrote in support of the FAST
Act, ``With nationwide transportation needs continually increasing,
Federal Government, as well as the States, must seek new funding
sources to keep up with this demand. This needed legislation provides
States the ability to explore a new source in order to fund highway
expansion.'' In addition to the backing the legislation has received
from the Colorado Department of Transportation, both the Minnesota and
Washington DOTs support the bill as well.

Earlier this week, the Joint Economic Committee released a white
paper, noting ``roads are deteriorating while congestion worsens every
year.'' The paper highlights the FAST Act as a new funding mechanism
for highways, noting that many economists believe that the new
authorization bill should grant the states more flexibility in raising
money for funding transportation projects. It concludes by stating that
the FAST Act is a modest measure that can help bridge the financing
chasm.
Numerous organizations and associations across the country have
either endorsed the FAST Act or have strong and positive interest in
the legislation. These groups include: Americans for Tax Reform,
American Highway Users Alliance, Associated General Contractors of
America, National Taxpayers Union, Association for Commuter
Transportation, and the American Association of State and Highway
Transportation Officials.
As the population of the United States continues to surge and miles
traveled by automobiles increase every year, transportation planners
must find new and innovative ways to expand highway congestion. With
today's budget crisis, this task becomes even more formidable as States
look for new ways to stretch every dollar. The FAST Act give States one
more tool in their battle against congestion. It creates a new source
of revenue through user choice. It give them flexibility in managing
construction and maintenance, encourages public-private partnerships
and speeds traffic through a series of electronic gateways instead of
creating logjams at toll booths. It is one more tool in the toolbox of
innovative finance options that will lead to a more efficient, safer
highway system.
I ask unanimous consent that supporting documents and the text of the
bill be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

State of Colorado,

Department of Transportation,

Denver, CO, April 25, 2003.
Hon. Wayne Allard,
U.S. Senate, Dirksen Senate Office Building, Washington, DC.
Dear Senator Allard: We are writing in support of ``Fast
Act'' H.R. 1767, the fast fees legislation introduced in the
House earlier this month by Representatives Mark Kennedy and
Adam Smith. We understand that you are considering sponsoring
this legislation in the Senate and support your interest in
this legislation.
This proposed bill is consistent with legislation that was
enacted last year by the Colorado State Legislature. Our
state law allowed us to create the Colorado Tolling
Enterprise, which enables the state to collect fees for new
capacity on state highways. H.R. 1767 would expand our
opportunity to create new capacity on interstate highways as
well.

[[Page S9124]]

The philosophy of H.R. 1767 is consistent with our state law
in creating new ways of increasing highway capacity.
With nationwide transportation needs continually
increasing, federal government, as well as the states must
seek new funding sources to keep up with these demands. This
needed legislation provides states the ability to explore a
new source in order to fund highway projects.
As you work to reauthorize TEA-21, we encourage you to
support legislation that provides greater flexibility to the
states as we all seek to improve our highways and meet the
needs of a growing state.
Sincerely,
Tom Norton,
Executive Director, CDOT.
Margaret ``Peggy'' Catlin,
Executive Director, Colorado Tolling Enterprise.
____

Joint Economic Committee, (Chairman Robert F. Bennett--Economic Policy
Research, July 7, 2003)

New possibilities for Financing Roads

It is an unfortunate fact of life that our roads are
deteriorating while congestion worsens every year. Fixing our
roads will not be easy; billions of dollars will be needed to
stave off further declines, and there is little appetite in
Congress to raise federal taxes on gasoline. The table below
shows that current spending proposals for highways and mass
transit for the next six years far outstrip the $218 billion
spent on roads and mass transit over the previous six years.
The overarching question is how will the federal government
fund a significant increase in surface transportation
expenditures without raising gasoline taxes.

------------------------------------------------------------------------
Package
size
(billions Gas tax increase
$)
------------------------------------------------------------------------
House Infrastructure and 375 Yes, by indexing tax
Transportation. retroactively to 1993
and for subsequent
years to inflation.
Congressional 2004 Budget Resolution 280 No.
Senate Environment and Public Works. 311 ?
Administration...................... 247 No.
------------------------------------------------------------------------
Source: Congressional Research Service, H. Con. Res. 95.

a new funding mechanism for highways

There are other ways to fund transportation spending
increases that should be explored. For instance, many
economists believe a new transportation authorization bill
should grant the states more flexibility in raising money for
funding transportation projects. To that end, Reps. Mark
Kennedy (R-MN) and Adam Smith (D-WA) have proposed the
Freeing Alternatives for Speedy Transportation (FAST) Act
(H.R. 1767). The bill would remove the current prohibition on
tolls for federal highways, as well as ensure that states
wouldn't be penalized for coming up with innovative ways to
fund transportation construction. While toll lanes alone
cannot make up the projected shortfall between the various
spending proposals and revenues that will be generated by the
gas tax, the judicious use of tolls would raise significant
revenue.

efficient tolls can reduce congestion

Ideally, the toll charge would vary based on the current
congestion level on the road--the more cars on the road, the
higher the price of the toll lane. As the toll increases,
drivers will change their behavior; when the toll is
relatively high people will use car pools, take mass transit,
or postpone unnecessary trips. In high-traffic corridors the
market can pay the bulk of the cost of constructing and
maintaining the road.
Since roads are not continuously congested, variable tolls
reduce traffic and spread it out more evenly over the course
of the day. In essence, properly managed fares can reduce the
level of lane expansion necessary by maximizing the
efficiency of the current infrastructure. The idea of
variable pricing for toll lanes is the same principle that
dictates lower ticket prices for movie matinees and discounts
for ``early bird'' dining specials at restaurants: price
differentials over the course of a day can alleviate crowds.
Regardless of the degree of success, innovative congestion
pricing would not come close to alleviating the need for new
roads. Most large cities desperately need new and improved
highways to deal with the immense increases in traffic that
have occurred in recent years.

Tollbooths are passe

When most people think of tolls they associate it with long
queues of cars waiting to pay 50 cents to cross a bridge,
thereby increasing congestion on roads. In reality, leaps in
tolling technology have made cumbersome tollbooths
unnecessary. Today, cars can use transponders to
electronically pay tolls without stopping the flow of
traffic. Transponders are inexpensive and the tolling
authority often provides them at no cost to drivers. Drivers
can either receive a monthly bill or else pre-pay
(anonymously, should they wish) for a certain number of
trips.
Proposals, like the FAST Act, encourage states to take
advantage of this innovative technology by allowing them to
toll new lanes on the federal interstate provided that they
use an electronic tolling system.

Tolls are not the same as taxes

Some politicians resist any legislation that might lead to
an expansion of tolled lanes on the principle that tolls
merely represent a new form of taxation. However, it is
important to note that tolling is not just another name for a
tax. When used on newly built lanes financed by toll
revenues, tolls serve as a voluntary access charge for
drivers who choose to use a lane that is less congested. In
essence, when people use a toll lane they are buying time.
Dedicated toll lanes function much the same as FedEx and
other next-day shipping companies. Someone wishing to send a
package via U.S. mail can do so at an inexpensive price, but
the delivery will take longer and the ultimate delivery date
will be less predictable. However, someone who absolutely
needs a package delivered overnight can guarantee an on-time
delivery by paying extra and using FedFx.
Those who worry that states will exploit tolls to fund
revenue shortfalls by gouging citizens should be heartened to
know that the FAST Act specifically addresses this temptation
in its legislation. The FAST Act requires that all revenues
raised from tolls be dedicated only to the lanes where the
tolls are collected. States are also constrained from
charging unreasonably high access charges by the marketplace.
Because tolls are added only on new lanes, drivers will
always have a choice whether or not to pay the toll. If the
toll is set at a price drivers are not willing to pay, the
newly added lane will be underutilized, costing the state
potential revenue and drawing the ire of its citizens.

tolling success stories

Various permutations of congestion pricing have been in
place since Singapore's Area Licensing Scheme was introduced
in 1975. With electronic tolling, Singapore managed to reduce
the number of single drivers and better utilized its road
capacity by distributing trips more evenly throughout the
day.
Domestically, there have been several value pricing
projects established under the Value Pricing Pilot program.
Perhaps the most successful pilot project is the High
Occupancy Toll (HOT) lanes on Interstate 15 in San Diego. The
program allowed two lanes, previously reserved for carpools
with at least two passengers, to provide access to all
drivers willing to pay a toll to enter the lane. The toll was
set at a level so as to ensure that traffic in the lanes
traveled near the speed limit.
The project was immensely successful and led to several
dramatic improvements in road performance. The number of
people carpooling increased and rates of carpooling
violations decreased. Drivers believed that the toll lanes
were safer and more reliable. Revenues generated were high
enough that an express bus was added to I-15, providing
another alternative for commuters. An overwhelming 94 percent
of transit riders, 92 percent of carpoolers, and over 70
percent of all commuters felt that congestion pricing was a
``fair'' system given that travelers choose to pay the
charge. The managed lanes on I-15 have proven so successful
that the San Diego Association of Governments plans to expand
its value pricing system by replacing the two HOT lanes with
four new HOT lanes.
Most recently, in February 2003 London introduced a
congestion-pricing scheme that charges vehicles entering the
central city. Though met with intense skepticism by political
opponents, the pricing experiment has proven to be even more
successful than its designers had anticipated. The average
driving speed in London's central city has increased 37
percent and the total number of cars entering Central London
has decreased by 20 percent.

freedom for states

The FAST Act and similar proposals encouraging greater
utilization of toll lanes do not seek to mandate the
wholesale use of tolls by states. However, states should have
the option to use tolls to finance the reconstruction of new
roads and should incur no penalty for doing so. In a federal
system of government, states should be encouraged to pursue
innovative methods for financing and providing essential
services to the citizenry, and this is indeed what the FAST
Act would achieve. Given the significant difference between
proposed highway spending plans and projected gas tax
revenues, the FAST Act is a modest measure that can help
bridge the chasm.