[House Report 109-12]
[From the U.S. Government Publishing Office]
109th Congress Rept. 109-12
HOUSE OF REPRESENTATIVES
1st Session Part 2
======================================================================
TRANSPORTATION EQUITY ACT: A LEGACY FOR USERS
_______
March 8, 2005.--Ordered to be printed
_______
Mr. Young of Alaska, from the Committee on Transportation and
Infrastructure, submitted the following
SUPPLEMENTAL REPORT
[To accompany H.R. 3]
This supplemental report shows the cost estimate of the
Congressional Budget Office with respect to the bill (H.R. 3),
as reported, which was not included in part 1 of the report
submitted by the Committee on Transportation and Infrastructure
on March 7, 2005 (H. Rept. 109-12, pt. 1).
U.S. Congress,
Congressional Budget Office,
Washington, DC, March 8, 2005.
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. 3, the
Transportation Equity Act: A Legacy for Users, as reported by
the House Committee on Transportation and Infrastructure on
March 7, 2005. Although CBO has not yet completed a cost
estimate for the entire bill, this cost estimate provides our
analysis of the bill's major provisions. CBO has not had time
to estimate the cost of other provisions, which include
forgiving a loan (with an outstanding balance of about $12
million) to the state of California, increasing certain
penalties related to transportation safety, requiring the
preparation of several studies, and issuing regulations
concerning a variety of transportation issues.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Lisa Cash
Driskill and Susanne S. Mehlman.
Sincerely,
Douglas Holtz-Eakin, Director.
Enclosure.
H.R. 3--Transportation Equity Act: A Legacy for Users
Summary: This cost estimate provides our analysis of the
major provisions of H.R. 3; CBO has not yet completed a cost
estimate for the entire bill. CBO estimates that implementing
the major provisions of H.R. 3 would result in new
discretionary spending of $157 billion over the 2006-2010
period, assuming appropriation actions consistent with the
funding levels specified in the bill. For the core programs
authorized by the bill (primarily, the Federal-Aid Highway
program and transit programs), H.R. 3 would provide contract
authority for most of the highway and some transit programs,
establish obligation limitations for the major highway
programs, and authorize appropriations for other programs for
fiscal years 2004 through 2009. The sum of new spending
authority under the bill for those core programs is
approximately $284 billion over that six-year period. Funding
for 2004 and much of 2005 has already been enacted; thus, some
of the spending from that total has already occurred or will
occur under current law. Similarly, some of the discretionary
spending from the new funding will occur after the 2006-2010
period covered by this cost estimate.
The amounts of new spending under the bill would add to
outlays expected from funding previously provided. In total,
CBO estimates that discretionary outlays would sum to about
$214 billion over the 2006-2010 period for the affected
programs (highways, safety, transit, and hazardous materials
transportation).
CBO estimates that enacting the major provisions of the
bill would reduce direct spending by $576 million over the
2005-2015 period. Enacting the bill also would reduce the
amount of contract authority (a mandatory form of budget
authority) below the levels assumed in the CBO baseline for
major transportation programs by $28.3 billion over this
period. Finally, the Joint Committee on Taxation (JCT)
estimates that enacting sections 1601 and 1602 would reduce
revenues by $138 million over the 2005-2015 period.
This estimate includes the funding levels specified in the
bill, and no funding for the Minimum Guarantee program (other
than the portion exempt from obligation limitations) because
the bill, as approved by the Committee on Transportation and
Infrastructure, would not extend authority for this program.
Section 1125 specifies that most spending for highway programs
in 2006 would be delayed until nearly the end of that fiscal
year unless subsequent legislation were enacted to reauthorize
and amend the Minimum Guarantee program.
CBO has not had time to estimate the cost of other
provisions, which include forgiving a loan (with an outstanding
balance of about $12 million) to the state of California,
increasing certain penalties related to transportation safety,
requiring the preparation of several studies, and issuing
regulations concerning a variety of transportation issues.
H.R. 3 contains an intergovernmental mandate as defined in
the Unfunded Mandates Reform Act (UMRA), but CBO estimates that
there would be no costs to state, local, or tribal governments
to comply with that mandate. Thus, the threshold established by
that act ($62 million in 2005, adjusted annually for inflation)
would not be exceeded.
CBO has determined that H.R. 3 also contains private-sector
mandates as defined in UMRA. CBO expects that the aggregate
cost of private-sector mandates in the bill would exceed the
annual threshold established in UMRA ($123 million in 2005,
adjusted annually for inflation).
Estimated cost to the Government: The estimated budgetary
impact of H.R. 3 over the 2005-2010 period is shown in Table 1.
The effects of this legislation fall within budget function 400
(transportation).
Basis of estimate: For this estimate, CBO assumes that H.R.
3 will be enacted by May 31, 2005, when the current authority
for most of the surface transportation programs expires and
that future appropriation actions will be consistent with the
funding levels authorized in the bill. For example, we assume
that the appropriations already enacted for 2005 will be
amended by supplemental appropriation actions to bring this
year's funding in line with the bill's authorized levels.
TABLE 1.--ESTIMATED BUDGETARY IMPACT OF MAJOR PROVISIONS OF H.R. 3
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------------------
2005 2006 2007 2008 2009 2010
----------------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Estimated authorization level................. 603 1,736 1,853 1,932 2,063 0
Estimated outlays............................. 0 2,739 23,829 47,533 47,541 35,292
CHANGES IN DIRECT SPENDING
Estimated budget authority.................... -4,856 -5,113 -4,031 -2,725 -1,650 -1,650
Estimated outlays............................. 0 -86 -173 -115 -86 -69
CHANGES IN REVENUES \1\
Estimated revenues............................ * -4 -7 -11 -14 -17
----------------------------------------------------------------------------------------------------------------
\1\ Revenue estimates provided by the Joint Committee on Taxation.
Note.--* = revenue loss of less than $500,000.
Contract authority
H.R. 3 would extend the authority for the surface
transportation programs administered by the Federal Highway
Administration (FHWA), the National Highway Traffic Safety
Administration (NHTSA), the Federal Motor Carrier Safety
Administration (FMCSA), and the Federal Transit Administration
(FTA) through 2009. Under current law, most budget authority
for surface transportation programs is provided as contract
authority, a mandatory form of budget authority. Outlays from
those programs, however, are subject to obligation limitations
contained in appropriation acts and are therefore
discretionary. For this estimate, CBO assumes that obligation
limitations will continue to control most spending from those
programs.
H.R. 3 includes obligation limitations for the Federal-Aid
Highway program. Those obligation limitations total $221
billion over the 2004-2009 period ($153 billion of that total
is for the 2006-2009 period). The bill does not include
obligation limitations for the use of the contract authority
that would be provided for transit and safety programs. For
this estimate, CBO assumes that appropriation acts would
include obligation limitations equal to the contract authority
levels for those programs.
For the surface transportation programs, H.R. 3 would
provide a total of $200.2 billion of contract authority over
the 2005-2009 period.\1\ This level does not include any
contract authority for the Minimum Guarantee program, a part of
the Federal-Aid Highway program (other than $639 million
provided each year that is exempt from obligation limitations).
In previous years the Minimum Guarantee program provided
additional contract authority to ensure that each state
received a share of the total level of contract authority
provided to all states for certain programs, equal to 90.5
percent of the state's share of tax receipts to the highway
trust fund. For example, in 2004 the Minimum Guarantee program
provided contract authority of about $10 billion (including
portions exempt from obligation limitations).
---------------------------------------------------------------------------
\1\ H.R. 3 also provides contract authority for fiscal year 2004.
---------------------------------------------------------------------------
Under section 1125, most spending for highway programs in
fiscal year 2006 could not begin until August 2, 2006, unless
subsequent legislation were enacted to boost the Minimum
Guarantee to specified levels above 90.5 percent. For this
estimate, CBO does not assume enactment of such subsequent
legislation, and consequently the estimated level of highway
spending in 2006 under the bill is significantly less than
would otherwise be expected without section 1125. That is,
outlays from the 2006 funding would occur later under the bill
than they would in the absence of the obligation delay under
section 1125. The levels of contract authority and obligation
limitations authorized by H.R. 3 for each year, however, are
not affected by this provision.
The Balanced Budget and Emergency Deficit Control Act
specifies that an expiring mandatory program with current-year
outlays in excess of $50 million be assumed to continue at the
program level in place when it is scheduled to expire.
Following this assumption, under H.R. 3, CBO projects $42.3
billion in contract authority for the major surface
transportation programs each year beginning in 2010.
Spending subject to appropriation
In addition to providing contract authority, H.R. 3 would
authorize the appropriation of about $8.2 billion over the
2005-2009 period for the major surface transportation programs
and for improving the transportation of hazardous materials.
Assuming appropriation action consistent with the authorization
and obligation levels specified in the bill, CBO estimates that
implementing the major provisions of H.R. 3 would cost about
$157 billion over the 2006-2010 period (see Table 2). The
amounts of new spending under the bill would add to outlays
expected from funding previously provided. In total, CBO
estimates that discretionary outlays would sum to about $214
billion over the 2006-2010 period for the affected programs
(highways, safety, transit, and hazardous materials
transportation).
TABLE 2.--ESTIMATED CHANGES IN SPENDING SUBJECT TO APPROPRIATION FOR MAJOR PROGRAMS UNDER H.R.3 2
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
------------------------------------------------------
2006 2007 2008 2009 2010
----------------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Federal-Aid Highway Program:
Estimated Authorization Level 2......... 0 0 0 0 0 0
Estimated Outlays....................... 0 855 18,708 40,426 38,724 27,230
Highway Traffic and Motor Carrier Safety
Programs:
Authorization Level 2................... 0 0 0 0 0 0
Estimated Outlays....................... 0 502 1,012 1,115 1,210 607
Transit Programs:
Authorization Level 2................... 576 1,707 1,823 1,932 2,063 0
Estimated Outlays....................... 0 1,359 4,074 5,970 7,600 7,454
Hazmat Safety Program:
Authorization Level..................... 27 29 30 0 0 0
Estimated Outlays....................... 0 23 36 22 6 0
Total Changes:
Estimated Authorization Level....... 603 1,736 1,853 1,932 2,063 0
Estimated Outlays................... 0 2,739 23,829 47,533 47,541 35,292
----------------------------------------------------------------------------------------------------------------
\1\ This estimate only includes the cost of major provisions of H.R. 3.
\2\ Under current law, most budget authority for the Federal-Aid Highway program, highway traffic and motor
carrier safety programs, and some transit programs is provided as contract authority, a mandatory form of
budget authority. Outlays from those programs, however, are subject to obligation limitations contained in
appropriation acts and are therefore discretionary. H.R. 3 would provide contract authority for each of those
programs and also would authorize the appropriation of discretionary funds for those programs as well. For
this estimate, CBO assumes that obligation limitations will continue to control most spending from those
programs.
Direct spending
H.R. 3 would affect direct spending by providing new
contract authority for surface transportation programs (see
Table 3). Expenditures for most of those programs are
controlled by annual appropriation action. The bill would
provide lower amounts of contract authority for the Federal-Aid
Highway program than the amounts assumed in CBO's baseline
(which assumes a continuation of funding of about $37 billion a
year).
In contrast, H.R. 3 would provide increases above the
baseline in contract authority for transit programs and for the
highway traffic and motor carrier safety programs. But on
balance, the bill would provide contract authority amounts that
fall below the baseline projections. Over the 2005-2015 period,
that reduction from baseline levels sums to $28.3 billion. If
the authorization for the Minimum Guarantee program were
extended, however, that program would add to the contract
authority provided by H.R. 3.
Section 3034 would reduce the amount of contract authority
available to transit programs in 2005 by $576 million. CBO
estimates that reduction would lower spending by $576 million
over the 2006-2011 period by eliminating a portion of the
resources available and assumed to be spent under current law.
To replace that contract authority, the bill would authorize
the appropriation of an additional $576 million for transit
programs in 2005. Spending from that authorization of
appropriations is included in Table 2, so that the reduction
recorded as direct spending savings--included in Table 3--would
be exactly offset by an increase in spending subject to
appropriation.
Revenues
H.R. 3 would expand the State Infrastructure Banks and
Transportation Infrastructure Finance and Renovation Act
(TIFIA) programs, and JCT estimates that those provisions would
lower revenues by $138 million over the 2005-2015 period (see
Table 3). 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. H.R. 3 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.
For a project to receive credit assistance under the TIFIA
program, current law requires the project's total cost to equal
or exceed the lower of the following two amounts: $100 million
or 50 percent of the state's grants from certain highway
programs in the previous fiscal year. States can cover a
portion of the remaining cost with tax-exempt bonds. H.R. 3
would change the first threshold to $50 million. JCT estimates
that enacting H.R. 3 would increase the number of projects that
receive credit assistance under TIFIA and therefore increase
the use of tax-exempt bonds, reducing revenue collections.
TABLE 3. ESTIMATED EFFECTS ON DIRECT SPENDING AND REVENUES FOR MAJOR PROGRAMS UNDER H.R. 3 \1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
------------------------------------------------------------------------------------------------------------------------
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
--------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN DIRECT SPENDING
Baseline Spending for Surface
Transportation and Hazmat
Safety Programs:
Estimated Budget Authority. 42,606 43,981 43,981 43,981 43,981 43,981 43,981 43,981 43,981 43,981 43,981
Estimated Outlays.......... 947 918 880 794 777 766 758 752 748 746 744
Proposed Changes:
Federal-Aid Highway Program:
Estimated Budget Authority. -4,177 -5,607 -5,008 -4,221 -3,688 -3,688 -3,688 -3,688 -3,688 -3,688 -3,688
Estimated Outlays.......... 0 0 0 0 0 0 0 0 0 0 0
Highway Traffic and Motor
Carrier Safety Programs:
Estimated Budget Authority. -103 410 449 480 515 515 515 515 515 515 515
Estimated Outlays.......... 0 0 0 0 0 0 0 0 0 0 0
Transit Programs:
Estimated Budget Authority. -576 84 528 1,016 1,523 1,523 1,523 1,523 1,523 1,523 1,523
Estimated Outlays.......... 0 -86 -173 -115 -86 -69 -46 0 0 0 0
Total Changes:
Estimated Budget Authority. -4,856 -5,113 -4,0.31 -2,725 -1,650 -1,650 -1,650 -1,650 -1,650 -1,650 -1,650
Estimated Outlays.......... 0 -86 -173 -115 -86 -69 -46 0 0 0 0
Surface Transportation and
Hazmat Safety Programs Under
H.R. 3:
Estimated Budget Authority. 37,750 38,868 39,950 41,256 42,331 42,331 42,331 42,331 42,331 42,331 42,331
Estimated Outlays.......... 947 832 707 679 691 697 712 752 748 746 744
CHANGES IN REVENUES
Estimated Revenues \2\. * -4 -7 -11 -14 -17 -17 -17 -17 -17 -17
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Includes direct spending estimates for major provisions of the bill.
\2\ Estimate provided by the Joint Committee on Taxation.
Note.--* = revenue loss of less than $500,000.
Estimated impact on State, local, and tribal governments:
Section 4131 of H.R. 3 contains an intergovernmental mandate as
defined in UMRA because it would preempt certain state laws
restricting the use of utility service vehicles. CBO estimates
that this mandate would impose no costs on state, local, or
tribal governments, and so the threshold established by that
act ($62 million in 2005, adjusted annually for inflation)
would not be exceeded.
Section 4117 of H.R. 3 would eliminate an existing mandate
by repealing the single state registration system, which limits
how states may regulate interstate motor carriers. At this
time, CBO cannot estimate the impact of this change on the
administrative burden or revenue of state transportation
agencies.
Estimated impact on the private sector: CBO has reviewed
H.R. 3 for private-sector mandates and determined that the bill
contains mandates as defined in UMRA. CBO expects that the
aggregate cost of private-sector mandates in the bill would
exceed the annual threshold established by UMRA ($123 million
in 2005, adjusted annually for inflation). That conclusion is
based upon our analysis of the provision that would extend the
federal motor carrier safety regulations (other than
regulations relating to commercial driver's license and drug
and alcohol-testing requirements) to additional commercial
motor carriers. Under the bill, those safety requirements would
apply to owners and operators of motor vehicles used to
transport between nine and 15 passengers (including the driver)
in interstate commerce, regardless of the distance traveled.
According to representatives at the Federal Motor Carrier
Safety Administration, the new regulations could cost 12,000
carriers nearly $13,000 each in the first year that the
regulations are in effect and slightly less in the following
years.
Estimate prepared by: Federal Costs: Lisa Cash Driskill and
Susanne S. Mehlman; Impact on State, Local, and Tribal
Governments: Marjorie Miller; and Impact on the Private Sector:
Jean Talarico.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.