[Congressional Record Volume 150, Number 19 (Monday, February 23, 2004)]
[Senate]
[Pages S1451-S1453]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      CBO COST ESTIMATE ON S. 1072

  Mr. INHOFE. Mr President, I ask unanimous consent that a cost 
estimate prepared by the Congressional Budget Office to accompany 
Senate Report 108-222, the committee report to S. 1072, the Safe, 
Accountable, Flexible, and Efficient Transportation Equity Act, be 
printed in the Record. The estimate was not available when the report 
was filed by the Committee on Environment and Public Works.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:


               CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

     S. 1072--Safe, Accountable, Flexible, and Efficient 
         Transportation Equity Act of 2003
       Summary: Assuming appropriation action consistent with the 
     funding levels specified in the bill, and assuming the 
     appropriation of amounts necessary to complete highway and 
     environmental studies and regulations required by the bill, 
     CBO estimates that implementing S. 1072 would cost $172 
     billion over the 2004-2009 period and about $48 billion after 
     2009.
       CBO estimates that enacting S. 1072 would reduce direct 
     spending by about $1.7 billion over the 2004-2009 period and 
     by about $3.4 billion over the 2004-2013 period. Finally, the 
     Joint Committee on Taxation (JCT) estimates that enacting S. 
     1072 would reduce revenue collections by $52 million over the 
     2004-2009 period and by $130 million over the 2004-2013 
     period.
       S. 1072 would extend the authority for the Federal-Aid 
     Highway program. For this program, the bill would provide 
     about $218 billion of contract authority over the 2004-2009

[[Page S1452]]

     period, and it would authorize the appropriation of about 
     $2.6 billion over the same period. S. 1072 also would require 
     the Department of Transportation (DOT) and the Environmental 
     Protection Agency (EPA) to complete certain studies and 
     regulations concerning highway construction and air quality.
       Consistent with the Balanced Budget and Emergency Deficit 
     Control Act, CBO assumes for this estimate that the contract 
     authority for the Federal-Aid Highway program would continue 
     at the same rate provided immediately before the program 
     would expire at the end of 2009. Hence, this estimate 
     includes an additional $4.9 billion in contract authority in 
     each year over the 2010-2013 period.
       S. 1072 would make several changes to current law that 
     would affect direct spending. The legislation would end 
     funding for DOT's Minimum Guarantee program, increase funding 
     for the Emergency Relief program, provide DOT the authority 
     to spend certain fees, and provide DOT the authority to share 
     monetary judgments pertaining to fraud in the federal highway 
     and transit programs with state and local agencies.
       JCT estimates that enacting S. 1072 would result in lower 
     revenue collections by expanding the State Infrastructure 
     Banks program and by changing the eligibility requirements of 
     the Transportation Infrastructure Finance and Innovation Act 
     (TIFIA) program. Under current law, five states can use 
     grants from the Federal-Aid Highway program to fund a state 
     infrastructure bank. S. 1072 would extend that authority to 
     all states. S. 1072 would change the TIFIA program by making 
     smaller projects eligible for credit assistance. Both 
     provisions would decrease revenue collections by increasing 
     the use of tax-exempt bonds.
       S. 1072 contains no intergovernmental or private-sector 
     mandates as defined in the Unfunded Mandates Reform Act 
     (UMRA); any costs to state or local governments would result 
     from complying with conditions of federal assistance. In 
     general, the bill would benefit states by reauthorizing 
     federal highway programs for the next six years.
       Estimated cost to the Federal Government: The estimated 
     budgetary impact of S. 1072 is shown in Table 1. The costs of 
     this legislation fall within budget function 400 
     (transportation).
       Basis of estimate: For this estimate, CBO assumes that S. 
     1072 will be enacted this spring. We also assume 
     appropriation action consistent with the authorization and 
     contract authority levels in the bill. Estimates of outlays 
     are based on historical spending patterns of the Federal-Aid 
     Highway program. CBO estimates that implementing S. 1072 
     would cost almost $172 billion over the 2004-2009 period and 
     that enacting S. 1072 would lower direct spending by about 
     $3.4 billion over the 2004-2013 period. JCT estimates that 
     enacting S. 1072 would lower revenues by $130 million over 
     the 2004-2013 period.

                                TABLE 1.--SUMMARY OF BUDGETARY EFFECTS OF S. 1072
----------------------------------------------------------------------------------------------------------------
                                                      By fiscal year, in millions of dollars--
                                   -----------------------------------------------------------------------------
                                        2004         2005         2006         2007         2008         2009
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION
 
Estimated Authorization Level \1\.          392          417          431          440          450          464
Estimated Outlays.................        4,192       25,005       32,571       35,645       37,273       37,765
 
                                           CHANGES IN DIRECT SPENDING
 
Estimated Budget Authority........        6,232        5,523        6,806        6,404        6,503        5,098
Estimated Outlays.................          -32         -161         -314         -376         -400         -415
 
                                               CHANGES IN REVENUES
 
Estimated Revenues \2\............           -1           -3           -7          -10          -14          -17
----------------------------------------------------------------------------------------------------------------
\1\ Under current law, most budget authority for the Federal-Aid Highway program is provided as contract
  authority, a mandatory form of budget authority. Most outlays that result from the contract authority,
  however, are subject to obligation limitations contained in appropriation acts and are therefore
  discretionary. S. 1072 would provide contract authority for the Federal-Aid Highway program. CBO assumes
  appropriation action will continue to limit outlays from the portions of the Federal-Aid Highway program that
  are subject to limitations under current law as well as new components of the program that would be authorized
  by S. 1072.
\2\ Estimate provided by Joint Committee on Taxation.

     Spending subject to appropriation
       Over the 2004-2009 period, S. 1072 would provide about $218 
     billion of contract authority and authorize the appropriation 
     of about $2.6 billion for the Federal-Aid Highway program. 
     The bill also would require DOT and EPA to complete certain 
     studies and regulations. Assuming appropriation action 
     consistent with the contract authority and authorizations 
     specified in the bill, and assuming the appropriation of 
     amounts necessary to cover the studies and regulations, CBO 
     estimates that implementing S. 1072 would cost almost $172 
     billion over the 2004-2009 period.
       Under current law, most spending from the Federal-Aid 
     Highway program is considered discretionary because it is 
     controlled by annual limitations on obligations set in 
     appropriations acts. For this estimate, CBO assumes 
     appropriation action will continue to limit outlays from the 
     Federal-Aid Highway program.
       S. 1072 would require DOT and EPA to complete certain 
     studies and regulations concerning highway construction and 
     air quality. The bill would require DOT to assess the 
     condition of the surface transportation system and develop a 
     plan to ensure this system will continue to meet the nation's 
     transportation needs, and it would require EPA to improve the 
     methodology for measuring air particles. The bill also would 
     require DOT to issue regulations to improve worker injury 
     rates and traffic flow during road construction, and it would 
     require EPA to issue regulations for the management of air 
     quality data during disasters. Based on information from DOT 
     and EPA, CBO estimates that completing these studies and 
     regulations would cost $7 million over the 2004-2009 period, 
     subject to appropriation of the necessary amounts.
     Direct spending and revenues
       The legislation would end funding for DOT's Minimum 
     Guarantee program, increase funding for the Emergency Relief 
     program, provide the authority to spend certain fees, and 
     provide the authority to share certain monetary judgments. 
     CBO estimates these changes would lower direct spending by 
     about $3.4 billion over the 2004-2013 period and reduce 
     revenues by $130 million over the same period. The bill's 
     changes in direct spending and revenues are detailed in Table 
     2.
       Minimum Guarantee Program. Of the total amount of contract 
     authority for the Minimum Guarantee program, current law 
     exempts $266 million of contract authority for fiscal year 
     2004 from any limitation on obligations. Consistent with the 
     Balanced Budget and Emergency Deficit Control Act, CBO 
     assumes this program continues at the same rate through 
     fiscal year 2004 and in each of the following years. Under 
     this baseline assumption, $639 million of contract authority 
     for the Minimum Guarantee program is exempt from annual 
     limits on obligations set in appropriation acts, and the 
     resulting outlays are therefore considered mandatory. S. 1072 
     would eliminate funding for this program. CBO assumes that 
     eliminating funding for the Minimum Guarantee program would 
     lower direct spending by $5.2 billion over the 2004-2013 
     period relative to the current baseline.
       Emergency Relief Program. Current law provides permanent 
     authority for the Emergency Relief program and limits the 
     program's obligations to $100 million each year. Because 
     appropriation acts do not control spending from the program, 
     its outlays are considered mandatory. S. 1072 would raise the 
     limit on obligations to $300 million each year. CBO estimates 
     that this provision would increase direct spending by $1.7 
     billion over the 2004-2013 period.

                                                             TABLE 2.--ESTIMATED EFFECTS ON DIRECT SPENDING AND REVENUES FOR S. 1072
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                            By fiscal year, in millions of dollars--
                                                               ---------------------------------------------------------------------------------------------------------------------------------
                                                                    2004         2005         2006         2007         2008         2009         2010         2011         2012         2013
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                         DIRECT SPENDING
 
Baseline Spending for the Federal-Aid Highway Program:
    Estimated Budget Authority................................       26,264       30,633       30,633       30,633       30,633       30,633       30,633       30,633       30,633       30,633
    Estimated Outlays.........................................        1,145        1,056          955          869          794          775          764          757          751          748
Proposed Changes:
    Federal-Aid Highway Program Components Subject to
     Obligation Limitations:
        Estimated Budget Authority............................        6,352        5,953        7,236        6,834        6,933        5,528        5,528        5,528        5,528        5,528
        Estimated Outlays.....................................            0            0            0            0            0            0            0            0            0            0
    Minimum Guarantee:
        Estimated Budget Authority............................         -320         -639         -639         -639         -639         -639         -639         -639         -639         -639
        Estimated Outlays.....................................          -86         -308         -495         -569         -601         -620         -633         -639         -639         -639

[[Page S1453]]

 
    Emergency Relief:
        Estimated Budget Authority............................          200          200          200          200          200          200          200          200          200          200
        Estimated Outlays.....................................           54          138          172          184          192          196          200          200          200          200
    Spending of Fees:
        Estimated Budget Authority............................            0            5            5            5            5            5            5            5            5            5
        Estimated Outlays.....................................            0            5            5            5            5            5            5            5            5            5
    Spending of Judgments:
        Estimated Budget Authority............................            0            4            4            4            4            4            4            4            4            4
        Estimated Outlays.....................................            0            4            4            4            4            4            4            4            4            4
    Total Changes:
        Estimated Budget Authority............................        6,232        5,523        6,806        6,404        6,503        5,098        5,098        5,098        5,098        5,098
        Estimated Outlays.....................................          -32         -161         -314         -376         -400         -415         -424         -430         -430         -430
Direct Spending Under S. 1072 for the Federal-Aid Highway
 Program:
    Estimated Budget Authority................................       32,496       36,156       37,439       37,037       37,136       35,731       35,731       35,731       35,731       35,731
    Estimated Outlays.........................................        1,113          895          641          493          394          360          340          327          321          318
 
                                                                                       CHANGES IN REVENUES
 
Estimated Revenues \1\........................................           -1           -3           -7          -10          -14          -17          -19          -20          -20          -20
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Estimate provided by Joint Committee on Taxation.

       Spending of Certain Fees. Under current law, DOT collects 
     fees from participants in classes held by the National 
     Highway Institute and participants in the TIFIA program. 
     These fees cover a portion of the administrative costs of the 
     classes and the TIFIA program. S. 1072 would provide DOT the 
     authority to spend the fees without further appropriation. 
     Based on information from DOT, CBO estimates the department 
     will collect--beginning in 2005--$4 million each year from 
     participants in classes held by the National Highway 
     Institute and $1 million each year from participants in the 
     TIFIA program. CBO estimates that this provision would 
     increase direct spending by about $45 million over the 2005-
     2013 period.
       Monetary Judgments. S. 1072 would provide DOT the authority 
     to share monetary judgments pertaining to fraud in the 
     federal highway and transit programs with state and local 
     agencies. This provision would apply to judgments in criminal 
     prosecutions as well as civil judgments. Under current law, 
     monetary judgments that result from criminal prosecutions are 
     deposited in the Crime Victims Fund and later spent. Civil 
     judgments, however, are not spent under current law. The 
     federal government received an average of $18 million each 
     year in monetary judgments from civil cases over the 1999-
     2003 period. Because the federal government pays most costs 
     associated with fraud investigations and generally requires 
     states to provide only 20 percent of the total cost for most 
     surface transportation projects, we expect that DOT would 
     share 20 percent of such judgments with the states. Hence, 
     CBO estimates that this provision would increase direct 
     spending by $4 million each year, beginning in 2005, and by 
     $36 million over the 2005-2013 period.
       Revenues. Enacting S. 1072 would lower revenue collections 
     by expanding the State Infrastructure Banks (SIBS) and the 
     TIFIA programs. JCT estimates that enhancing both provisions 
     would lower revenues by $52 million over the 2004-2009 period 
     and $130 million over the 2004-2013 period.
       Under current law, five states can use grants from the 
     Federal-Aid Highway program to fund a state infrastructure 
     bank. States use infrastructure banks to finance 
     transportation projects by providing loans to local 
     governments or repaying bonds. S. 1072 would extend that 
     authority to all states. JCT estimates that this provision 
     would increase the use of tax-exempt bonds and therefore 
     decrease federal revenues by $73 million over the 2004-2013 
     period.
       For a project to receive credit assistance under the TIFIA 
     program, current law requires the projects' total cost to 
     equal or exceed the lower of the following two amounts: $100 
     million, or 50 percent of the states' grants from certain 
     highway programs in the previous fiscal year. S. 1072 would 
     change those two amounts to $50 million and 20 percent of the 
     states' highway grants. Credit assistance under the TIFIA 
     program can cover a portion of the remaining cost with tax-
     exempt bonds. JCT estimates that enacting S. 1072 would 
     increase the number of projects that receive credit 
     assistance under TIFIA and, therefore, increase the use of 
     tax-exempt bonds, reducing revenue collections by $57 million 
     over the 2004-2013 period.
       Intergovernmental and private-sector impact: S. 1072 
     contains no intergovernmental or private-sector mandates as 
     defined in UMRA. Any additional costs to state or local 
     governments to comply with grant conditions would be incurred 
     voluntarily. In general, the bill would benefit states by 
     reauthorizing federal highway programs for the next six 
     years.
       Subtitle E, Environmental Planning and Review, would 
     clarify and expand existing conditions of aid by requiring 
     Metropolitan Planning Organizations (MPOs) and states to 
     consider additional environmental factors during the planning 
     process and to update long-range transportation plans more 
     frequently. MPOs and states have to comply with various 
     transportation planning requirements in order to receive 
     federal assistance. According to MPO representatives, the 
     provisions of the bill may require smaller organizations to 
     hire additional staff, however, CBO does not expect those 
     costs to be significant. Furthermore, states and MPOs receive 
     various forms of funding under title 23 and title 49 that 
     would cover planning-related expenses. S. 1072 would increase 
     the amount of title 23 funds set aside for MPOs.
       States would benefit from other provisions of the bill, 
     including funding to establish or update systems to report 
     incidents more quickly, to develop intermodal passenger 
     facilities, and to encourage the collection of tolls on 
     certain interstate highways and high-occupancy-vehicle lanes.
       Estimate prepared by: Federal Spending: Rachel Milberg and 
     Deborah Reis. Federal Revenues: Mark Booth. Impact on State, 
     Local, and Tribal Governments: Gregory Waring. Impact on the 
     Private Sector: Jean Talarico and Cecil McPherson.
       Estimate approved by: Peter H. Fontaine, Deputy Assistant 
     Director for Budget Analysis.

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