[Senate Report 109-62]
[From the U.S. Government Publishing Office]

                                                        Calendar No. 94
109th Congress                                                   Report
 1st Session                                                     109-62




                 April 28, 2005.--Ordered to be printed


Mr. Shelby, from the Committee on Banking, Housing, and Urban Affairs, 
                        submitted the following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                         [To accompany S. 907]

        [Including cost estimate of Congressional Budget Office]

    The Committee on Banking, Housing, and Urban Affairs, 
reported an original bill (S. 907) to amend chapter 53 of title 
49, United States Code, to improve the Nation's public 
transportation and for other purposes, having considered the 
same, reports favorably thereon without amendment and 
recommends that the bill do pass.

                       History of the Legislation

    The bill reported by the Committee incorporates proposals 
developed in consultation with the Administration, leading 
transit authorities, and transit-related industry leaders from 
across the country. Beginning soon after passage of the 
Transportation Equity Act for the 21st Century (TEA-21), the 
Committee began an aggressive schedule of hearings to evaluate 
the effectiveness and implementation of TEA-21 policies. The 
below descriptions detail the series of hearings that went into 
development of the Federal Public Transportation Act of 2005.
    In 2000, the Committee held hearings on labor protection 
provisions of the Federal transit program. The first hearing, 
entitled ``The Ability of the U.S. Department of Labor to Delay 
or to Derail Mass Transit Projects that have been Approved and 
Funded by Congress,'' was held on April 25, 2000. Testifying on 
behalf of the Administration was the Honorable Nuria Fernandez, 
Acting Administrator of the Federal Transit Administration 
(FTA) and Mr. Bernard Anderson, Assistant Secretary for the 
Employment Standards Administration at the U.S. Department of 
Labor. Also testifying were: Mr. John Anderson, Jr., Director 
of the Transportation Issues, Resources, Community, and 
Economic Development Division at the Government Accountability 
Office (GAO); Mr. James La Sala, International President of the 
Amalgamated Transit Union; Mr. Charles Moneypenny, Legislative 
Representative at the Transport Workers Union of America; Mr. 
Roger Snoble, President and Executive Director of the Dallas 
Area Rapid Transit Authority; Mr. Lee Gibson, Assistant General 
Manager for Transit and Chief Operating Officer of the Regional 
Transportation Commission of Clark County, Nevada; and Mr. 
James Stoezel, Railroad Operations and Management Consultant at 
Transit Safety Management (on behalf of Bay State Transit 
Services, Inc.).
    The second hearing, entitled ``The FTA's Approval of 
Extending the Amtrak Commuter Rail Contract'' was held on July 
11, 2000. The hearing examined conflicts between State and 
Federal laws concerning competitive bidding requirements after 
a prolonged contract dispute involving Amtrak. The Honorable 
Nuria Fernandez, acting Administrator of the Federal Transit 
Administration, testified on behalf of the Administration. Mr. 
George Warrington, President and Chief Executive Officer of the 
National Railroad Passenger Corporation (Amtrak) also 
    On October 4, 2001, the Committee held a hearing entitled 
``Transit Safety in the Wake of September 11,'' in order to 
scrutinize the various security threats potentially facing 
public transportation and evaluate Federal, state and local 
efforts to combat them and improve transportation security 
overall. The Honorable Jennifer Dorn, Administrator of the 
Federal Transit Administration testified on behalf of the 
Administration. Also testifying were: Mr. William Millar, 
President of the American Public Transportation Association 
(APTA); Mr. Robert Molofsky, General Counsel to the Amalgamated 
Transit Union; and Mr. Richard White, General Manager of the 
Washington Metropolitan Area Transit Authority (WMATA).
    On March 13, 2002, the Committee held a hearing on 
implementation and reauthorization of TEA-21, entitled 
``Transit in the 21st Century: Successes and Challenges (Part 
I).'' The hearing explored the Administration's principles for 
reauthorization and ways in which the Congress could further 
improve upon current law. The Honorable Norman Mineta, 
Secretary of the Department of Transportation (DOT) testified 
on behalf of the Administration. Also testifying were: Mr. 
William Millar, President of the American Public Transportation 
Association; Mr. Dale Marsico, Executive Director of the 
Community Transportation Association of America; and Mr. John 
Inglish, General Manager of the Utah Transit Authority.
    On April 25, 2002, the Committee held a hearing entitled 
``Transit in the 21st Century: Successes and Challenges (Part 
II).'' The hearing explored the diversity of transportation 
needs in urban, rural and suburban communities and the various 
challenges each of these communities must try to satisfy. The 
Honorable Jennifer Dorn, Administrator of the Federal Transit 
Administration testified on behalf of the Administration. Also 
testifying were: Ms. Faye Moore, General Manager of the 
Southeastern Pennsylvania Transportation Authority; Dr. Beverly 
Scott, General Manager of the Rhode Island Public 
Transportation Authority; and Mr. Larry Worth, Executive 
Director of the Northeastern Colorado Association of Local 
    Testifying on June 13, 2002, in a hearing entitled ``TEA-
21: A National Partnership,'' were the Honorable Carolyn 
Kilpatrick, a U.S. Representative in Congress from the State of 
Michigan; also testifying were: the Honorable Kwame Kilpatrick, 
the Mayor of Detroit, Michigan; the Honorable H. Brent Coles, 
the Mayor of Boise, Idaho; and the Honorable Kenneth Mayfield, 
County Commissioner of Dallas County, Texas. This hearing 
continued to identify the particular public transportation 
needs of different regions and communities across the country 
and highlighted the similarity of benefits public 
transportation infrastructure confers on both urban and rural 
    On June 26, 2002, the Committee held a hearing entitled 
``TEA-21: Investing in Our Economy and Environment.'' The 
Committee heard testimony from Mr. Carl Guardino, President and 
Chief Executive Officer of the Silicon Valley Manufacturing 
Group; Mr. Herschel Abbot, Jr., Vice-President of Governmental 
Affairs for the BellSouth Corporation; Mr. Robert Broadbent, 
Manager of the Las Vegas Monorail Company; Mr. Hank Dittmar, 
President of the Great American State Foundation (on behalf of 
the Surface Transportation Policy Project); and Mr. Michael 
Replogle, Transportation Director of Environmental Defense. The 
hearing examined the potential for conflicts between economic 
development and environmental protection and ways in which 
public transportation can help reconcile these two important 
    On July 17, 2002, in a hearing entitled ``Transit: A 
Lifeline for America's Citizens,'' the Committee received 
testimony from Ms. Jessie Tehranchi of Birmingham, Alabama; Ms. 
Gloria McKenzie of Albany, New York; Ms. Faye Thompson of 
Kenova, West Virginia; Ms. Lavada DeSalles, a Member of the 
Board of Directors for the American Association of Retired 
Persons (AARP); Mr. Andrew Imparato, President and Chief 
Executive Officer of the American Association for People with 
Disabilities; and Mr. John Porcari, Secretary of the Maryland 
Department of Transportation. The hearing explored the value of 
public transportation to many elderly, disabled and rural 
persons and the extent to which these individuals depend upon 
robust transportation systems in order to maintain their 
freedom, health and economic independence.
    On September 18, 2002, the Committee held a hearing 
entitled ``Transit Security: One Year Later'' in order to 
review the security needs of transit providers after the events 
of September the 11th and to assess the impact of security 
measures already taken. The Committee heard testimony from the 
Honorable Jennifer Dorn, Administrator of the Federal Transit 
Administration on behalf of the Administration. Also testifying 
were: Mr. Peter Guerrero, Director of Physical Infrastructure 
Issues for the Government Accountability Office.
    On October 8, 2002, the Committee held a hearing entitled 
``Perspectives on America's Transit Needs.'' The hearing 
examined the limitations of the current public transportation 
system in the face of growing demand; it also explored the 
specific needs of growing states and the importance of public 
transportation to many workers and to the economy. The 
Honorable Jennifer Dorn, Administrator of the Federal Transit 
Administration, testified on behalf of the Administration. Also 
testifying were: The Honorable Patrick McCrory, Mayor of 
Charlotte, North Carolina; Mr. Eric Rodriguez, Director of the 
Economic Mobility Initiative for the National Council of La 
Raza; Mr. Wendell Cox, Visiting Fellow at the Heritage 
Foundation and Principal at Wendell Cox Consultancy; Mr. Roy 
Kienitz, Secretary of the Maryland Department of Planning; Mr. 
David Winstead, of the Maryland Chamber of Commerce and 
Chairman of the Transportation Coalition, on behalf of the U.S. 
Chamber of Commerce.
    On June 10, 2003, the Committee held a hearing entitled 
``The Administration's Proposal for Reauthorization of the 
Federal Transportation Program.'' During this hearing, the 
Committee explored the Administration's public transportation 
reauthorization proposal and ways in which the Congress could 
improve upon it. The Honorable Norman Mineta, Secretary of the 
Department of Transportation, testified on behalf of the 
Administration. Also testifying were: Mr. William Millar, 
President of the American Public Transportation Association; 
Mr. Jeff Morales, Director of the California Department of 
Transportation; Mr. Robert Molofsky, General Counsel to the 
Amalgamated Transit Union; Mr. Jim Seal, Consultant to the 
Federal Transit Administration; and Mr. Woody Blunt of the 
American Bus Association.
    On June 24, 2003, the Committee held a hearing entitled 
``Bus Rapid Transit and Other Bus Service Innovations.'' This 
hearing examined Bus Rapid Transit (BRT), a new modal 
technology, and its significant quality and reliability 
benefits over traditional bus services, as well as its cost 
savings compared to other transportation alternatives, 
particularly light rail. The Honorable Jennifer Dorn, 
Administrator of the Federal Transit Administration, testified 
on behalf of the Administration. Also testifying were: Ms. 
JayEtta Hecker, Director of Physical Infrastructure Issues for 
the Government Accountability Office; Mr. Gary Brosch, Chairman 
of the National Bus Rapid Transit Institute at the University 
of South Florida and the Center for Urban Transit Research at 
the University of California, Berkeley; Mr. Kenneth Hamm, 
General Manager of the Lane Transit District, located in 
Eugene, Oregon; Mr. Oscar Diaz, assistant to Mr. Enrique 
Penalosa, Administrative Director of the Institute for 
Transportation and Development Policy; Ms. Anne Canby, 
President of the Surface Transportation Policy Project.
    On July 23, 2003, the Committee held a hearing entitled 
``Enhancing the Role of the Private Sector in Public 
Transportation.'' During this hearing, the Committee attempted 
to ascertain ways in which the Federal Government could foster 
increased involvement by the private sector with public 
transportation and ways to foster partnerships between the 
private and public sectors. Testifying were: Mr. Irwin 
Rosenberg, President of the American Transit Services Council 
and Vice-President of Government Relations to Laidlaw Transit 
Services, Inc.; Mr. Robert Molofsky, General Counsel to the 
Amalgamated Transit Union; Mr. Peter Pantuso, President and 
Chief Executive Officer of the American Bus Association; and 
Ms. Margie Wilcox, Co-Chair of the Paratransit and Contracting 
Steering Committee for the Taxicab, Limousine, and Paratransit 
    Finally, on March 17, 2005, the Committee conducted a mark 
up of an original bill, ``The Federal Public Transportation Act 
of 2005,'' to reauthorize the public transportation portion of 
TEA-21. The Committee, by unanimous consent, ordered the bill, 
as amended, to be reported. The reauthorization was for a 
period of six years through September 30, 2009. The bill 
authorized $51.6 billion for Federal transit programs over the 
six-year period from fiscal years 2004 to 2009.

                          Need for Legislation

    Public transportation services are often the only form of 
transportation available to many citizens. These services 
provide mobility to the millions of Americans who cannot, for 
various reasons, use an automobile. More than 80 million 
Americans, almost one-third of the U.S. population, cannot 
drive or do not have access to a car. Senior citizens are the 
fastest growing segment of the U.S. population; many of them 
require access to public transportation in order to maintain 
their independence and to access vital healthcare services. 
Millions of Americans with disabilities also require reliable 
and safe public transportation in order to access basic 
    An estimated 10 million people use transit each workday. 
Nearly 30 million Americans ride transit during any given 
month. More than half (54 percent) of all trips on transit are 
for the purpose of employment. People who choose to use public 
transportation come from every income level and demographic 
background. Federal transportation programs are no longer 
solely urban-centered. TEA-21 has provided transportation 
funding to both urban and non-urban areas. As a result, 
transportation in rural America dramatically improved under 
TEA-21. Today, rural transportation providers carry riders a 
billion miles each year. Rural areas have a higher incidence of 
elderly and disabled populations, and a higher percentage of 
low-income persons than urban areas. It is estimated that the 
rural U.S. alone has 30 million non-drivers, including senior 
citizens, the disabled and low-income families. Today, the 
American public transportation industry consists of nearly 
6,000 transit systems in both urban and rural areas. These 
transportation agencies operate a diverse array of vehicles, 
including subways, buses, light rail, commuter railroads, 
ferries, vans, cable cars, aerial tramways, and taxis. Non-
profit elderly and disabled service providers constitute almost 
two-thirds of systems.
    In its report, 2002 Status of the Nation's Highways, 
Bridges and Transit: Conditions and Performance, the U.S. 
Department of Transportation estimated that annual public 
transportation investment requirements, at a minimum, are $14.8 
billion (in year 2000 dollars) just to maintain the conditions 
and performance of the Nation's transit systems at their 2000 
level. To improve the average condition of transit assets to 
``good'' by 2020, as well to improve performance by increasing 
transit speeds and reducing occupancy rates, would require an 
additional $5.8 billion per year for a total average annual 
capital investment of $20.6 billion (in year 2000 dollars).
    In the reports on highway, bridge and transit conditions 
and performance, the U.S. Department of Transportation also 
estimates the value of a variety of benefits generated by 
public transportation. These include benefits of basic 
mobility, location efficiency, and congestion management. The 
benefits of basic mobility have been estimated at $27 billion 
(in year 2005 dollars). These are benefits to low-income users 
who would otherwise not have access to jobs, shopping, and 
other needs, because they have limited or no access to 
automobiles. Location efficiency was estimated to be worth $23 
billion. These benefits come from more efficient transit-
oriented land use patterns that help reduce the need for trips 
or the length of trips. The benefits of congestion relief 
provided by transit are estimated at $20 billion. This estimate 
is based on the travel-time savings from using transit and the 
reduction in highway user costs as trips are attracted from the 
highway system to transit.
    According to the Texas Transportation Institute's (TTI) 
``2004 Urban Mobility Report,'' congestion costs $63 billion, 
more than 3.5 billion hours of delay and 5.7 billion gallons of 
excess fuel annually. The average driver loses more than a week 
of work (46 hours) each year sitting in gridlock. The same 
report finds that without public transportation, there would be 
1.1 billion more hours (29% more) of delay. In sum, the TTI 
report also finds that public transportation reduces the cost 
of congestion by about $20 billion per year.
    Public transportation investments help create employment 
and sustain economic health. The Department of Transportation 
has estimated that for every $1 billion in Federal highway and 
transit investment, 47,500 jobs are created or sustained. 
Furthermore, according to a Cambridge Systematics, Inc. study, 
for every $10 spent on transit capital projects, $30 in 
business sales is generated. A recent report by Robert Shapiro 
of the Progressive Policy Institute and Kevin Hassett of the 
American Enterprise Institute estimated that U.S. companies and 
individuals derive over $788 billion per year in direct 
economic benefits from the nation's surface transportation 
system (including public transportation). These benefits are 
produced by direct economic costs of $185 billion per year in 
building, operating, and maintaining the systems, leaving at 
least $603 billion per year in net economic benefits.
    The air quality benefits of public transportation over 
single occupant vehicle use are also well documented. While 
diminishing roadway traffic, transit reduces auto-related 
pollution and fuel consumption. America's transit travel, in 
replacing automobile travel, stops over 126 million pounds of 
hydrocarbons--a primary cause of smog--and 156 million pounds 
of nitrogen oxides from being released into the atmosphere.
    The Transportation Equity Act for the 21st Century (TEA-21) 
expired on September 30, 2003, and has temporarily been 
extended through May 31, 2005. The delay in providing a long-
term authorization has had a significant impact on State and 
local governments which have been unable to develop long-term 
programs for funding. Public transportation represents an 
important part of the Nation's transportation infrastructure, 
which by its nature requires long-term planning and project 
development. Delays in funding have resulted in project delays 
which ultimately increase costs and delay the benefits which 
projects are designed to produce. The impact is particularly 
significant in States with short construction seasons since 
planning must be done well in advance of contracting for 
construction. The Committee has responded and taken action to 
reauthorize the public transportation title of TEA-21 in order 
to continue the Federal Government's critical role in public 
transit programs.


    Although TEA-21 returned much of the decision-making 
authority to state and local Governments, TEA-21 maintained a 
strong Federal role in the capital financing of public 
transportation. TEA-21 has worked exceptionally well because of 
four basic principles: flexibility on funding decisions for 
state and local Governments, the encouragement of public 
participation in the planning process, an emphasis on 
intermodal connectivity, and the promotion of environmentally 
sound approaches to transportation delivery. TEA-21 provided 
opportunities for state and local officials to use highway and 
transit funds flexibly for surface transportation projects. 
This flexibility has provided local decision makers with the 
tools to invest in the best transportation solutions for that 
area, regardless of mode. The transportation planning 
provisions of TEA-21 are important to metropolitan areas and 
transit systems, as they allow for a balanced planning process 
that looks at all feasible local solutions and provides for 
appropriate citizen participation in the planning process. TEA-
21 specifically requires that local governments consult with 
the public to decide among the various transportation options.
    While the program structure provided by TEA-21 is 
fundamentally sound, there are a number of areas in which 
improvements are needed. First, current funding formulae do not 
fully reflect the wide range of transit needs. Specifically, 
funding formulae look only at current population and transit 
service factors, and hence are not capable of providing 
resources to develop new services in areas now not well served 
by transit, nor to get ahead of problems before they become 
difficult to address. In response, the bill adds several new 
formulae, the better to represent growing transit needs 
throughout the country including: a Growing States Formula, a 
High Density Formula, a Rural Low Density Formula, and a 
Transit-Intensive Formula. In addition, the bill increases 
funding for bus/bus facilities and sets aside funding for 
intermodal bus facilities to address the needs of the majority 
of communities which have bus-only systems. Existing labor 
protections have not been changed since the program was first 
authorized in the 1960's. To conform to changes in the 
industry, the economy, and other Federal programs, the bill 
harmonizes requirements for labor protection for transit 
workers with existing federal railway Class III labor statute.
    The improvements made by ISTEA and TEA-21 to the FTA New 
Starts program have significantly improved the accountability 
of the program. In general, New Starts projects are well 
supported by analysis, and are now producing good value for 
money. However, more can be done to assure that the widest 
range of public transportation investments are eligible for 
funding and to assure that project sponsors have the best 
information available when they develop projects. Accordingly, 
the bill makes less-expensive, more flexible Bus Rapid Transit 
an eligible project for Full Funding Grant Agreements (FFGA) by 
eliminating the limitation that only fixed guideway projects 
are eligible for Small Starts funding. It establishes a ``Small 
Starts'' program for projects seeking $75 million or less in 
New Start funds. These projects would undergo a more 
streamlined rating process than projects in excess of $75 
million. The current exemption for projects under $25 million 
is eliminated and thus all projects receiving funding would get 
analyzed and rated. The bill allows FTA to reward transit 
agencies with a higher federal match for those projects whose 
cost and ridership estimates are within a 10% range of original 
forecasts available to decisionmakers at the time the 
particular transportation option was selected. It also 
establishes an annually-updated Contractor Performance 
Assessment Report (CPAR) which analyzes the consistency and 
accuracy of cost and ridership estimates to provide transit 
agencies a tool to assist in choosing contractors with the 
highest success rates. Finally, it requires FTA to conduct 
``Before and After'' studies to look at the extent to which New 
Starts projects met their cost and ridership projections.
    The flexibility and incentives provided by ISTEA and TEA-21 
have improved the performance and efficiency of public 
transportation. The bill being reported makes a number of 
changes to continue these favorable trends. It makes private 
operators of public transportation ``sub-recipients'' of 
federal grant funds, thereby fostering competition and creating 
an opportunity for lower costs and greater service 
improvements. It requires coordination of social service 
transportation throughout the program by providing incentives 
to States that eliminate duplication, reduce overlap, and 
improve service. Finally, the bill increases the focus on 
safety, security and crime prevention in response to the events 
of September 11, 2001 and continued terrorist threats against 
transit systems by increasing the eligibility for security-
related activities in each step of the process from planning to 
maintaining systems.

                      Section By Section Analysis

Sec. 1. Short title

    The Federal public transportation program now covers rural 
and other non-urban constituencies, as well as urbanized areas. 
Accordingly, the title of this bill is meant to reflect this 
evolution by referring to ``public'' transportation instead of 
``mass'' transportation.

Sec. 2. Updated terminology; Amendments to title 49, United States Code

    For the reasons expressed above, throughout Chapter 53, the 
term ``mass transportation'' is replaced, where appropriate, 
with ``public transportation.'' ``Public'' is more 
representative of the wider range of services now being 
provided throughout the country, and is the term more commonly 
used by the industry.

Sec. 3. Policies, findings, and purposes

    Section 5301(a) currently states that it is in the national 
interest to encourage and promote the development of 
transportation systems because they maximize mobility and 
minimize transportation-related fuel consumption and air 
pollution. This provision highlights the positive impact on the 
Nation's economy as a result of the development and 
revitalization of public transportation systems.
    The finding in Section 5301(b)(1) is updated to reflect the 
2000 Census of Population as the outdated census data 
referenced in the original section is not current.
    Currently, Section 5301(e) requires that a special effort 
be made to preserve the environment and important historical 
and cultural assets when carrying out capital programs funded 
under Sections 5309 and 5310. These principles should apply to 
all Chapter 53 public transportation programs. Therefore, this 
bill amends Section 5301(e) to reflect this objective.

Sec. 4. Definitions

     Makes the intercity bus portion of intermodal 
terminals eligible for funding.
     Makes capital costs related to crime prevention 
and security, as well as emergency response drills and training 
(but not other operating expenses), eligible program-wide.
     Allows transit operators to fund debt service 
reserves with capital funds.
     Defines ``mobility management'' as an eligible 
cost in the urbanized area formula program.
     Restates the definition of ``local public 
    The definition of ``capital project'' is amended to make 
the intercity bus portions of intermodal terminals or 
transportation malls eligible for assistance in all Chapter 53 
    Capital costs for crime prevention and security currently 
are allowable as formula grant expenditures. In addition, 
specific capital grant making authority for crime prevention 
and security is only found in Section 5321 of Title 49, U.S.C. 
This section has never received a direct appropriation and, 
therefore, is repealed. In its stead, the definition of 
``capital project'' under Section 5302(a)(1), which applies to 
the entire FTA program, is amended to include capital security 
needs and planning as well as emergency response drills and 
training, but not other operational costs related to crime 
prevention and security.
    The Committee believes that improved integrated, 
interoperable, emergency communications infrastructure are one 
way for transit operators to improve their response to 
emergency situations, and that such expenditures are eligible 
capital expenditures under the bill.
    The term ``capital project'' is expanded to include a debt 
service reserve to allow transit agencies to borrow money less 
expensively. Under this approach, a grantee would temporarily 
set aside grant funds to establish the reserve. The reserve 
would be available to make payments to repay a portion of the 
borrowing should other pledged funds become unavailable. By 
having such a reserve in place, the risk of the borrowing is 
reduced, and the interest rate is likely to be substantially 
lower, thus reducing the cost of the borrowing.
    Section 5307 is amended to allow grantees to use their 
urbanized area formula grants for ``mobility management.'' 
Therefore, Section 5302, ``Definitions,'' is amended to define 
the term ``mobility management.'' This term refers to an 
activity or project that tailors public transportation services 
to specific markets and manages demand for public 
transportation. Such goals could be accomplished by 
coordinating transportation service provider strategies and 
enhancing ridership growth in a cost-effective and efficient 
manner. Mobility management functions would involve managing 
public transportation travel logistics and would focus on 
resolving consumer mobility issues. Mobility managers could 
serve as transportation travel agents, consumer advocates, and 
service coordinators.
    The definition of ``public transportation'' is essentially 
the same as the definition of ``mass transportation'' in 
current law. An additional reference to ``local'' is added 
however, to codify current practice of providing transportation 
service that serves a specific urbanized or rural area and its 
environs. Intercity services (bus or rail) are not intended to 
be assisted under this Chapter, except for intercity bus 
services under Section 5311(f), and the newly-provided 
eligibility of the intercity bus portion of intermodal 
terminals and the already-eligible intercity rail portions of 
intermodal terminals.
    The definition of ``urbanized area'' is revised to reflect 
the Department of Commerce's role in designating urbanized 
areas via the decennial Census.
    Technical changes are made to the definition of ``capital 
projects'' to clarify that new projects can be either 
innovative or improved, rather than having to be both 
innovative and improved.
    Technical changes are made to the definition of ``transit 
enhancements'' to clarify that a project may include any of the 
list of historic preservation activities. In addition, 
technical changes are made to clarify that projects may include 
pedestrian access or walkways.

Sec. 5. Metropolitan planning

     Locates all provisions for metropolitan planning 
in Section 5303.
     Maintains the requirement for separate 
Transportation Plans and Transportation Improvement Programs.
     Requires certification of the planning process 
every four years.
     The provision in current law allowing the planning 
process to be certified even if the requirements for private 
sector participation are not met is repealed; however, language 
is added to clarify that local criteria will be the basis for 
such decisionmaking.
     Strengthens the requirement for public 
participation in the planning process.
    Section 3005 rewrites Section 5303 as a single section on 
Metropolitan Planning, to put all of these provisions in a 
single section identical to that in Title 23, U.S.C. Because 
transit and highways are authorized in separate Senate 
Committees, this is accomplished in Section 5303 and in Section 
5304 for Statewide Planning. Since the entire section is 
rewritten, most of the language is repeated, but changes are 
not made unless where expressly noted.
    Section 5303(a) includes definitions used in Sections 5303 
and 5304 which are unique to the planning programs.
    Section 5303(b) provides general requirements for the 
planning process. Section 5303(b)(1) revises existing law by 
substituting the word ``metropolitan'' for ``urbanized.'' 
Metropolitan is a more accurate representation of the terms 
used in this section since the term better represents urbanized 
areas and the areas that are anticipated to become urbanized 
over a twenty-year period.
    Section 5303(b)(4) provides that the Metropolitan Planning 
Organization (MPO), the State DOT, and the appropriate public 
transit provider agree on the approaches that will be used in 
the metropolitan decisionmaking process regarding complex 
transportation improvements. This section indicates that 
planning and sponsoring organizations are jointly responsible 
for the planning and development of projects.
    Section 5303(c) provides procedures and requirements for 
designation of metropolitan planning organizations. Section 
5303(c)(1)(A) modifies existing law to reflect a change in 
procedure by the U.S. Census Bureau in defining central cities.
    Section 5303(c)(2) modifies existing law to clarify 
terminology regarding a transportation management area (TMA). 
The current statute uses the term ``designation'' regarding 
both the institution responsible for metropolitan planning (the 
MPO) and the kinds of areas which must be established as a TMA. 
It also links the two by indicating that when a TMA is 
``designated,'' certain requirements apply, including changes 
in MPO board membership and certification. TMAs are established 
by the Secretary based on population information from the 
Census Bureau. MPOs may be designated and redesignated upon 
agreement of local officials and the Governor at any time. To 
clarify that the geography identification does not force a 
change in the MPO policy board, the word ``identified'' is used 
to denote the establishment of a TMA, leaving the term 
``designated'' for the process of establishing an MPO.
    Section 5303(c)(2)(B) modifies existing law to remove an 
obsolete provision relating to MPO membership in 1991. There is 
no continuing need for this provision.
    Section 5303(c)(5) is a technical change to reflect that 
the Census Bureau has changed the terms it uses. The Census no 
longer uses the term ``central city'' and thus that reference 
is deleted and replaced by ``largest incorporated city'' which 
is used by the Census Bureau in naming the urbanized area.
    Section 5303(d) provides details on the way in which the 
boundaries of metropolitan planning areas are established. 
Section 5303(d)(2)(B) is a technical change to reflect the 
reality that the Office of Management and Budget, not the 
Census Bureau, designates standard metropolitan statistical 
    Section 5303(d)(3) clarifies that a new MPO need not be 
created if a new urbanized area is designated inside an 
existing metropolitan planning area. Although it would not be 
prohibited under this provision, designation of a second MPO is 
not required.
    Sections 5302 (e) and (f) include requirements for how MPOs 
are to coordinate when plans and planned projects affect 
adjacent areas.
    Section 5303(f)(3) is added to emphasize the need for 
coordination where an improvement does not actually cross an 
MPO boundary, but still has impacts outside the boundary.
    Section 5303(f)(4) is added to encourage coordination of 
the transportation planning process with other types of 
planning activities that are affected by transportation, 
including State and local planned growth initiatives, economic 
development, environmental protection, airport operations, 
housing, and freight.
    Section 5303(g) provides details on the scope of the 
planning process and the factors which are to be considered. 
Sections 5303(g)(1)(B) and (C) modify existing law to give 
added emphasis to security and safety by making each a separate 
planning factor.
    Section 5303(g)(1)(E) is amended to provide more detail on 
how protection of the environment is to be considered and would 
add a reference to planned growth patterns. In addition, 
subparagraphs (A), (D), (F), and (H) under Section 5303(g)(1) 
reference opportunities to engage public and private operators 
in the metropolitan planning process.
    Section 5303(h) details how transportation plans are to be 
developed. The section modifies existing law by dropping the 
adjective ``long-range'' in association with the plan. There is 
only one plan and it has a 20-year horizon. The continued use 
of ``long-range'' reinforces the perception that there is a 
``short-range'' or another plan that must also be created.
    A new Section 5303(h)(2) provides details on the mitigation 
activities which must be considered in developing 
transportation plans.
    Section 5303(h)(3)(C) modifies existing law to strengthen 
the importance of operations and management in the planning 
    Section 5303(h)(4) is added to ensure consultation between 
the MPO and various land use management, natural resource, and 
environmental protection agencies. Section 5303(h)(5) modifies 
existing law to encourage stronger coordination among 
transportation and air quality planning processes.
    Section 5303(i) provides details on public participation in 
the planning process. The list of parties participating in 
planning is expanded to explicitly include private providers. 
It also adds bicyclists and pedestrians to the list of parties 
afforded a specific opportunity to comment on the plan before 
its approval. The provision requires development of a 
participation plan in consultation with interested parties. 
Participation is required both on the plan itself, as well as 
on the process for developing the plan. MPOs must certify that 
they have complied with their participation plan before the 
transportation plan can be approved.
    Section 5303(j) provides details on the transportation 
improvement program. The program update cycle is set at every 
four years. Current project selection requirements are modified 
to indicate that the State is responsible for selection of 
projects in the State managed programs. A new provision is 
added at Section 5303(j)(4)(B) which requires publication of 
the projects for which funds have actually been obligated. A 
rulemaking is required within 120 days, specifying certain 
details about how such project lists should be published so 
that the public can better access the information.
    Section 5303(k) specifies how transportation management 
areas are identified and the planning processes required in 
such areas. The section modifies existing law to provide 
clarification to the meaning of transportation management 
areas. The term ``designation'' is replaced by 
``identification'' to reduce confusion between institutional 
change and geographic area identification. The section allowing 
a request to designate an area below 200,000 in population is 
eliminated because it has seldom been used, and has no direct 
funding implications. The term ``metropolitan planning 
organization serving'' is added to clarify the fact that a TMA 
is a geographic area, not an institution that conducts 
    Section 5303(k)(3) modifies existing law to streamline and 
integrate the congestion management process into the overall 
planning process and plan development.
    Section 5303(k)(4) modifies existing law on selection of 
projects for implementation to highlight the role of the MPO as 
an institution, as discussed above.
    Section 5303(k)(5) modifies existing law to reflect the 
focus on the MPO planning process and to clarify that all 
Federal funds available to the metropolitan area can be 
withheld as a sanction for not being certified. The minimum 
cycle for certification is extended to four years in 
nonattainment and maintenance areas and five years in 
attainment areas.
    Current language prohibiting decertification for failure to 
meet the private sector participation requirements in Section 
5306 is not reenacted. Section 5306 is modified to make clear 
that local criteria will be the basis for deciding on how to 
address these requirements.
    A provision related to transfer of ISTEA funds is removed 
because it is outdated. Transfer of funds is still covered by 
23 U.S.C. 104(k).
    Section 5303(l) modifies existing law to reflect 
streamlining and integration of congestion management planning 
into the overall planning process.
    Section 5303(m) provides additional requirements for 
nonattainment areas.
    Section 5303(n) continues current law with regard to the 
authority of MPOs with respect to other agencies.
    Section 5303(o) indicates that funds set aside under 23 
U.S.C. 104(f) and 49 U.S.C. 5308 are available to carry out the 
metropolitan planning process.
    Section 5303(p) continues current practice and law on the 
relationship of transportation plans and the National 
Environmental Policy Act.

Sec. 6. Statewide Planning

     Statewide planning requirements are included in 
Title 49 explicitly, rather than only by reference to 23 U.S.C. 
     The statewide provisions currently in 23 U.S.C. 
135 are modified to conform to the changes made to the 
metropolitan planning process.
     A Statewide Transportation Improvement Program is 
continued with projects drawn from the Metropolitan 
Transportation Improvement Program.
    A completely revised Section 5304--Statewide Planning 
incorporates, with revisions, existing Section 135 of Title 23 
and provides a common statewide planning section for both FTA 
and FHWA. The descriptions below refer only to the revisions 
    The term ``long-range'' which modifies ``transportation 
plan'' is deleted, since the plan is already identified as a 
20-year plan.
    TEA-21 used various references when describing local 
officials in rural areas. A consistent reference is now used 
throughout: ``affected officials with responsibility for 
    ``Non-metropolitan local officials'' is defined in a new 
Section 5303(a)--Definitions.
    Existing Section 135(a)(2) of Title 23 is incorporated in 
Section 5304(a)(1), with amended language: ``To accomplish the 
objectives stated in Section 5301(a)'' inserted before ``each'' 
and ``Subject to . . . Title 49'' deleted; ``subject to Section 
5303'' is added after the end of the paragraph.
    Existing Section 135(b) of Title 23 is now incorporated in 
Section 5304(b), with added language: ``with other related 
Statewide planning activities such as trade and economic 
development and related multi-State planning efforts,'' after 
``areas of the State and'' to recognize the importance of trade 
and economic development in each State and with other States.
    Section 5304(c) is added to allow States to enter into 
compacts or agreements for the purpose of formal planning 
cooperation and coordination, since so many projects have 
multi-State implications. A similar provision is included in 
existing Section 134(d)(2), Metropolitan Planning, and is 
included in the metropolitan planning section in Section 
    In Section 5304(d)(1), the phrase ``and implementing 
projects and services'' is added after ``strategies'' to 
reflect the concept that not only projects, but also 
transportation services, are developed through the planning 
    In Section 5304(d)(1)(A), the term ``non-metropolitan 
areas'' is inserted into the planning factor related to 
economic vitality after ``States.'' These have been often-
neglected areas and this would require States to consider 
economic vitality for rural areas as well as urbanized areas. 
(``Non-metropolitan areas'' is defined in a recent amendment to 
the joint FHWA/FTA planning regulations).
    Sections 5304(d)(1)(B) and (C) refer to existing law, 
wherein ``security'' was a joint factor with ``safety.'' After 
the terrorism attacks of September 11, 2001, security has taken 
on a new dimension. Security would now be a separate factor in 
subparagraph (C) to highlight this concern at all levels of 
    In Section 5304(d)(1)(D), the term ``options available to'' 
is deleted after ``mobility'' so that it is clear that this is 
more complex than simply considering options.
    Section 5304(d)(1)(E) is expanded to include more details 
on the way in which environmental protections should be 
considered. In addition, more detail is added on how plans 
should be consistent with regional land use plans. Language is 
added to require consistency, so that investments are made 
where they will have the most significant impact.
    A new Section 5304(d)(3) is added to focus on how 
mitigation activities should be addressed in Statewide plans 
and programs.
    A new Section 5304(f)(2)(D) is added to require 
consultation with land use management, natural resource, 
environmental protection, conservation, and historic 
preservation agencies.
    The term ``representatives of transportation agency 
employees,'' is replaced in Section 5304(f)(3) by 
``representatives of public transportation employees,'' and the 
term ``representatives of users of public transit,'' is 
replaced by ``representatives of users of public 
transportation'' to provide greater consistency with the 
definitions in Section 5303(a). The term ``representatives of 
users of pedestrian walkways and bicycle transportation 
facilities,'' is inserted after the term ``users of public 
transportation'' to identify the importance of this class of 
users. In addition, new requirements are added to ensure 
adequate opportunity for public participation.
    A new paragraph, ``Existing System,'' is added in Section 
5304(f)(8) to address the need for assessment of the existing 
system to maximize its potential through various means, such as 
Intelligent Transportation Systems.
    A new Section 5304(f)(9) is added to provide for expanded 
publication of the Statewide plan.
    Section 135(f)(1)(B)(ii)(II) required that States submit to 
the Secretary, within one year of TEA-21's passage, the details 
of their consultation process with non-metropolitan officials. 
This requirement has been accomplished, so the provision is 
    Section 5304(g) provides for details on the Statewide 
Transportation Improvement Program. Section 5304(g)(3) 
(existing Section 135(f)(1)(C)) substitutes the term ``State'' 
for the term ``Governor.'' This reflects current practice in 
most States. The same changes made for the listed parties in 
Section 5304(f)(3) above are made in this section as well.
    Section 5304(g)(4) establishes 4-year increments and 
updates for the Statewide Transportation Improvement Program. 
This is consistent with metropolitan planning requirements, 
which provide that projects in the metropolitan transportation 
improvement program may be selected for advancement. Provisions 
similar to those in Section 5303 for a cooperative process in 
arriving at the annual listing of obligated projects is 
included. An annual list is included in Section 5304 since the 
State is the recipient of substantial funds from both FTA and 
    Section 5304 (g)(4)(B)(ii) (existing Section 
135(f)(2)(C)(ii)) is amended to ensure that the identical 
projects programmed in the metropolitan transportation plans 
are brought into the Statewide Transportation Improvement 
Program without modifications.
    In Section 5304(g)(5), Section 5311 of Title 49 is added to 
the National Highway System, bridge, and other projects that 
require ``consultation'' and that are excepted from 
``cooperation'' since this program is generally run by the 
States as a discretionary program after criteria are set.
    Section 5304(g)(6) (existing Section 135(f)(4)) is renamed 
``Statewide Transportation Improvement Program Approval'' and 
would require a STIP approval ``at least every four years by 
the Secretary.'' A new Section 5304(g)(7), Planning Finding, 
(existing Section 135(f)(4)) is set out separately.

Sec. 7. Transportation management areas

    Section 5305, which covers planning in Transportation 
Management Areas, is repealed since its provisions have been 
incorporated in Section 5303.

Sec. 8. Private enterprise participation

     Clarifying language is added to make clear that 
local criteria are to be the basis for deciding on how to 
involve the private sector.
     A rulemaking is required to implement all of the 
changes made throughout the statute on private sector 
    Current language that prohibits decertification for failure 
to meet the private sector participation requirements in 
Section 5306 is not reenacted. All other planning requirements 
must be met in order for the metropolitan planning process to 
be certified. It is not appropriate to single out this 
requirement for lesser attention in the planning process. 
Section 5306 is modified to make clear that local criteria will 
be the basis for deciding on how to address these requirements.
    The bill makes a number of changes in Chapter 53 to enhance 
the role of the private sector in the provision of public 
transportation services. These include important enhancements 
to the role of private transportation providers in the planning 
process, changes in funding eligibility, and funding 
allocations. In the area of planning, the bill includes a 
requirement that private operators engaged in public 
transportation be considered in the policy and plan development 
activities of metropolitan areas, which include short-range 
program planning.
    Specifically, private operator services are to be 
considered with regard to the following planning factors: 
supporting economic vitality, increasing access/mobility, modal 
connectivity and integration, and preserving/enhancing the 
existing system. In the area of funding eligibility, private 
operators would be eligible as ``sub-recipients'' of Federal 
funds under the Section 5307 (urbanized area formula), 5309 
(discretionary capital grants), 5310 (elderly and disabled 
formula), and 5311 (non-urbanized area formula) programs. As 
sub-recipients, private sector transportation providers would 
be permitted to do more than simply compete for contracts with 
a public transit provider; they would be eligible to receive 
grants through the designated recipient for the provision of 
public transportation services that they define and deliver. 
Further, every community seeking funds from the Section 5310 
(elderly and disabled), and Job Access and Reverse Commute 
program would be required to engage in a coordinated local 
transportation/human service planning process that includes 
private sector participation in the planning process. In 
addition, mobility management activities, which include working 
with theprivate sector to coordinate transportation services to 
meet customer needs, would become an eligible expense under the Section 
5307 (urbanized area formula) program.
    Finally, the intercity bus portion of intermodal terminals 
would be made eligible for FTA funding. This will facilitate 
linkages between local public transportation and intercity bus 
transportation (which is provided by private operators). In the 
area of funding, bus capital funding in the amount of $75 
million per year would be set aside for intermodal terminals. 
In light of these changes, Section 5306 is amended to require 
the Secretary to publish a formal rule on how these provisions 
would be implemented.

Sec. 9. Urbanized Area Formula Grants program

     Transit enhancements program is administered as a 
certification rather than as a set-aside.
     Private companies engaged in public transportation 
are eligible subrecipients of Federal grants.
     Mobility management is made an eligible expense.
     The eligibility requirements for local match 
within this section are streamlined to include all advertising 
revenue as well as contracts with social service organizations.
     Certain urbanized areas which grew to a population 
of over 200,000 can use funds for operating assistance in 2006 
through 2007, with the amounts progressively phased down.
    Currently, Subsection 5307(h) requires streamlined 
administrative procedures for track and signal improvements. 
This subsection is deleted because separate treatment for track 
and signal projects is no longer needed.
    Currently, Subsection 5307(j) requires that grantees submit 
annual reports on sales of advertising and concessions. This 
subsection is deleted because it is redundant with a similar 
requirement of the National Transit Database.
    Subsection 5307(k) dealing with ``transit enhancement 
activities'' is mainstreamed into a new subparagraph (K) in 
Section 5307(d)(1). Currently, that subsection allows for a one 
percent set-aside for transit enhancements and requires a 
report listing the projects. Under new subparagraph (K), a 
recipient with at least a population of 200,000 in its 
urbanized area could instead certify that one percent of its 
Section 5307 funds has been expended on transit enhancements.
    Subsection 5307(a) is revised to include definitions for 
``subrecipient,'' as well as ``designated recipient.'' A 
subrecipient includes any entity receiving funding from the 
designated recipient. This will facilitate private sector 
participation in public transportation.
    Subsection (b) is amended to state more explicitly the 
general authority for grants under Section 5307. Eligibility is 
expanded to include ``mobility management'' as defined in 
Subsection 5302(a)(7a). Paragraph (4) is struck since separate 
eligibility for reconstructing or rehabilitating rolling stock 
is no longer needed, since these terms have been included in 
the definition of capital project in Subsection 5303(a).
    Currently, urbanized areas over 200,000 may not use funds 
from the urbanized area formula program for operating 
assistance. A number of urbanized areas' status changed 
unexpectedly as a result of the 2000 census, due to changes in 
the Census Bureau's definitions and procedures for defining 
urbanized areas. These areas were allowed to continue to use 
funds for operating assistance for 2003 by P.L. 107-232, for 
2004 by the Surface Transportation Extension Act of 2003, and 
for the first eight months of 2005 by the Surface 
Transportation Extension Act of 2004, Part V. These provisions 
are extended for the remainder of 2005 as currently enacted. 
For 2006 and 2007, these provisions are phased out. Urbanized 
areas covered by these provisions would be allowed to use 50 
percent of their current limits on operating assistance in 2006 
and 25 percent in 2007. This should provide these areas with 
more than ample time to develop and implement transition plans. 
The Committee strongly opposes continuing these provisions 
beyond 2007 and believes the more appropriate role for the 
Federal Government is in capital investment.
    Currently, the Urbanized Area Formula program allows the 
local match to include only those revenues from advertising and 
concessions that were generated above a 1985 baseline. This 
bill strikes this 1985 baseline in Section 5307(e) in an effort 
to foster aggressive local financing. In addition, Subsection 
5307(e) is amended to permit revenues received from contracts 
with State or local social service agencies to count as 
eligible to match Section 5307(e) grants. Such revenues are 
already eligible as non-Federal share in the Section 5311 non-
urbanized area program. Allowing such revenues to count as non-
Federal share will provide an incentive to coordinate services 
between transit agencies, a process that the Committee and the 
Administration have actively worked to foster.
    Section 5307(g)(4) is deleted to remove an obsolete 
standard for setting interest rates on advance construction 
projects. TEA-21 included a provision which required that the 
interest rate be set based on the most favorable terms 
available to the recipient and thus this is unnecessary.
    Under current law, Section 5307(n)(1) states that 18 U.S.C. 
1001, regarding false or fraudulent statements, applies only to 
certificates or submissions provided pursuant to Section 5307, 
``Urbanized Area Formula Grants.'' This paragraph is moved to 
Section 5323, General Provisions on Assistance. Under Section 
5223, 18 U.S.C. 1001 applies to any Federal public 
transportation grant program.
    A technical amendment is made to Subsection 5307(k)(2) to 
provide a complete list of requirements with which grant 
recipients must comply. In addition, a provision is added to 
Subsection 5307(k) to clarify that the Hatch Act does not apply 
to non-supervisory employees of grant recipients. This 
provision was included in the former Section 5 of the Urban 
Mass Transportation Act of 1964, as amended. However, it was 
inadvertently not included in Chapter 53 when the Urban Mass 
Transportation Act of 1964, as amended, was codified.

Sec. 10. Planning Programs

     The existing Clean Fuels Formula Program is merged 
into the Bus and Bus Facilities Program.
     The Metropolitan and Statewide planning grant 
programs are consolidated into a new Section 5308; procedures 
and formulae for both are unchanged.
     A new Planning Capacity Building ``set-aside'' is 
     Discretionary Planning Funding is made available 
for Alternatives Analysis; such studies are now funded from the 
New Starts program.
    The Clean Fuels Formula Grant program, established in TEA-
21, set up a separate program to foster the procurement of 
alternative fuel vehicles. In each year of the authorization 
period, those funds were redirected into the bus and bus 
facilities program. Regardless, the purpose of thisprogram is 
being fulfilled through capital grants for buses. Forty percent of 
buses procured with Federal transit assistance as part of the bus and 
bus facilities program use alternative fuels.
    Currently, the Metropolitan Planning Program is authorized 
in Sections 5303(g) and (h) and the Statewide Planning Program 
is authorized in Section 5313(b). The bill brings these 
provisions together into a unified Section 5308, funded as a 
takedown from the formula programs. While the takedown comes 
only from the formula and research program authorization, the 
amount is set at 1.25 percent of the total amount in the 
capital and formula programs. This is an increase from funding 
under TEA-21, during which planning was authorized at an amount 
equal to about 1 percent of total funding. The current split of 
funding between metropolitan and statewide planning is 
    Current Subsection 5303(g) is moved to Subsection 5308(a) 
and is changed from ``Transportation Plans and Programs'' to 
``General Authority'' for consistency with FTA's other program 
subsections. Language is added for transportation plans and 
programs since these are the primary products of the Federally 
funded transportation planning process. Section 5308(a)(3) 
explicitly authorizes eligibility for peer exchanges and 
activities related to peer reviews.
    Subsection 5303(h) moves to Subsection 5308(b) and is 
renamed from ``Balanced and Comprehensive Planning'' to 
``Purpose.'' Existing Section 5303(h)(4) is eliminated since it 
is obsolete with the addition of new urbanized areas in the 
2000 Decennial Census.
    Section 5303(h)(2) is moved to Section 5308(c)(2), and 
modified by directing States to make allocations of planning 
funds to MPOs promptly and eliminating any direct role for the 
Department of Transportation. FTA retains flexibility with 
respect to an administrative formula for areas over 1 million 
population currently added in the apportionments to States on a 
per capita basis.
    Section 5308(d) relocates the existing State planning and 
research program from 49 U.S.C. 5313(b). The formula for 
apportionments does not change and consolidates the formula 
planning programs in Section 5305.
    Section 5308(e) establishes ``Capacity Building'' as an 
eligible activity within transportation planning. Capacity 
Building promotes activities that support and strengthen the 
planning processes required under 49 U.S.C. 5303-6. Through 
this initiative, metropolitan planning organizations and 
transportation operators can use planning funds to plan, 
develop and implement innovations and enhancements that support 
and strengthen the planning processes. The Secretary is 
authorized to conduct research, engage in program development, 
collect and disseminate information, and provide technical 
assistance in connection with metropolitan and statewide 
planning processes. The initiative will be carried out jointly 
by FTA and FHWA.
    Subsection (g)(1) allocates $5 million for Capacity 
Building, and $20 million for discretionary grants for 
Alternatives Analysis. At present, Alternatives Analysis is 
inappropriately funded from the New Starts program. The current 
practice of funding the Alternatives Analysis of New Starts 
presumes that the result of the Locally Preferred Alternative 
will, in fact, be a New Start. If Alternatives Analysis is a 
true look at alternatives in the process of providing 
transportation, the appropriate place for these funds to be 
expended is within the planning program. The remainder of 
planning money is split 82.72% for metropolitan planning and 
17.28% to carry out statewide planning and research program.
    Existing Section 5303(h)(5) is relocated to a new Section 
5308(f), ``Government's Share of Costs,'' and applies to both 
planning programs.
    Section 5308(h) provides the period of funding availability 
that is identical to current funding availability under Section 

Sec. 11. Capital Investment Program

     The Bus, New Starts and Fixed Guideway 
Modernization programs continue in the Capital Investment 
Programs; funds are split approximately 23% bus, 40% New Starts 
and 37% Fixed Guideway Modernization.
     Bus funds going to private non-profit 
organizations or rural transit systems as subrecipients are 
administered under the requirements of the Elderly and Disabled 
and Rural programs, respectively. The requirements for 
statewide transit providers depend on where the project is 
     Non-fixed guideway corridor improvements are 
eligible for New Starts funds for projects under $75 million.
     Funding for Alternatives Analysis is made 
available from the Planning Program rather than the Capital 
Investment Program.
     Current procedures and criteria apply to New 
Starts projects over $75 million in New Starts share while 
simplified procedures and criteria apply to New Starts projects 
under $75 million in New Starts share.
     The current exemption for projects under $25 
million is eliminated.
     The current three level rating system (Highly 
Recommended, Recommended, Not Recommended) is replaced by a 
five level system (High to Low).
     The maximum New Starts share is retained at 80 
     A higher than requested share can be provided for 
projects which keep cost and ridership estimates within 10 
percent of the forecasts used as the basis for establishing the 
Locally Preferred Alternative.
     Grantees will be allowed to keep a portion of the 
cost savings in the case where projects are completed under 
     Before-and-After Studies will be required in law.
     A Public Private Partnership Pilot Program is 
     The New Starts Report and Supplemental Report are 
replaced by reports issued three times a year focusing on 
changes to ratings and an annual report on budget 
    The General Authority section is amended to limit the 
program to focus on three activities: New Starts, fixed 
guideway modernization, and buses and bus facilities.
    References to ``capital investment loans'' are deleted from 
Section 5309 since, historically, only capital investment 
grants have been awarded pursuant to this section.
    Both fixed and non-fixed guideway projects which make major 
improvements to transportation corridors are included in the 
New Starts program for projects under $75 million, to 
encourage, among other things, consideration of Bus Rapid 
Transit options. The $25 million threshold is eliminated. All 
projects under the program will be subject to a rating and 
evaluation process. Fixed guideways will continue to be 
required of projects seeking over $75 million in New Starts 
funds. The Committee expects that the Federal Transit 
Administration will develop an appropriate methodology for 
evaluating the costs and benefits of non-fixed guideway 
projects, consistent with that applied to fixed guideway 
    As noted earlier, the eligibility for Alternatives Analysis 
is relocated to the planning grant program under Section 5308. 
Alternatives Analysis is a planning function and therefore it 
is not appropriate to fund these activities out of the capital 
    Section 5309(a) is amended expressly to allow programs of 
projects of bus and bus related facilities. The individual 
agencies included in such a program of projects would be 
treated as subrecipients. Under current law, private non-profit 
agencies which receive assistance through a State's program of 
projects must be treated as contractors to the State and thus 
the assembly of such a program is treated as a procurement 
action, subject to all of the rules normally intended to apply 
to contractual relationships. This has inhibited State 
flexibility and added to the administrative burden on States 
interested in developing programs of projects for assistance 
under Section 5309.
    In addition, Section 5309(a) is amended to assure that 
grants under Section 5309 to transit agencies outside urban 
areas would be treated the same way as grants under Section 
5311. Similarly, grants to private non-profit subrecipients 
would be treated the same way as private non-profit 
organizations are treated under Section 5310. Statewide transit 
providers would be required to follow the requirements which 
would apply under Section 5307 if the project is located in an 
urbanized area and under Section 5311 if the project is located 
outside urbanized areas.
    Section 5309(b) includes a new definition of Alternatives 
Analysis. An Alternatives Analysis will include a complete 
evaluation of a range of alternatives, selection and formal 
adoption by the metropolitan planning organization of a Locally 
Preferred Alternative, and produce the information needed to 
evaluate the Locally Preferred Alternative under this section.
    Before making an award under Section 5309, the Secretary 
must find that applicants (1) have complied with statutory 
planning and private enterprise provisions, (2) have the legal, 
financial and technical capacity necessary to carry out the 
project, (3) will have satisfactory continuing control of the 
project's use and capability, and (4) will maintain project 
property. The amendment to Section 5309(d) permits the 
Secretary to rely on a Section 5307 applicant's certification 
containing the same project attributes when applying for 
Section 5309 funds. It also clarifies that the term ``technical 
capacity'' includes the safety and security aspects of a 
transit project.
    Section 5309(e) is amended to improve the evaluation of New 
Starts projects. The factors, considerations, and 
determinations in Section 5309(e)(2-4) are essentially those in 
current law, although new factors were added to ensure that the 
Secretary assess the reliability of the forecasts of costs and 
ridership and land use is elevated from a ``consideration'' to 
a justifying factor. Too often, as projects develop through the 
New Starts process, the estimated costs increase while the 
forecasted ridership decreases, reducing the cost-effectiveness 
of the proposed project. In addition, language in current law 
is strengthened to require the Secretary to assure that New 
Starts projects are implemented only if the quality of local 
bus services will not be degraded.
    Section 5309(e) applies in full to projects with a proposed 
New Starts share of more than $75 million. New starts projects 
proposing a Federal share of under $75 million will be subject 
to a streamlined rating process under a new Section 5309(f). 
These streamlined procedures include a simplified list of 
findings (which include cost-effectiveness, land use and 
economic development impacts) and determinations. Projects will 
have to be evaluated on the basis of forecasts made for project 
opening. Financial plans will be limited to the period during 
which the project is being constructed and financed. A 
simplified Project Construction Grant Agreement is used to 
reflect the major features of Full Funding Grant Agreements.
    Under current law, projects with a Federal share of less 
than $25 million are exempt from the New Starts rating process. 
The bill eliminates this exemption, thus requiring that all 
projects be rated. This will assure that all candidates for 
Federal funding, no matter how small, are the subject of 
appropriate analysis and evaluation. Current language which 
exempts projects funded with flexible funds from Title 23 is 
not continued, because it is unnecessary since Section 5309(e) 
applies to projects which are candidates for discretionary 
funding under the New Starts program. Because they have already 
been subject to analysis and rating, projects with FFGAs 
executed prior to enactment are exempt from the new 
    A new Section 5309(e)(1) is added to make clear that all 
New Starts projects with a Federal share of over $75 million 
would be implemented under a Full Funding Grant Agreement 
(FFGA), be subject to ratings under this section, and 
authorized in law. A project would have to receive an overall 
rating of at least ``medium'' to receive an FFGA.
    The consideration under Section 5309(e)(3)(E) is expanded 
slightly to include the positive effect on capacity, 
utilization, or longevity of other surface transportation 
    Under current law, the Secretary must evaluate and rate a 
project as ``highly recommended,'' ``recommended,'' or ``not 
recommended.'' In response to the Government Accountability 
Office's recent suggestion that an approach be developed to 
better distinguish projects, the ratings are changed to 
``high,'' ``medium-high,'' ``medium,'' ``low-medium,'' or 
``low.'' This enables FTA to better manage the pipeline of 
projects, educate grantees, and distinguish between projects.
    The requirement that projects be given priority if they are 
transportation control measures in State Implementation Plans 
for nonattainment areas is dropped, because air quality is 
already considered in the rating of a project, and it is 
therefore unnecessary.
    A new Subsection 5309(e)(8) is added to require periodic 
publication of the policies and procedures used in rating 
projects. This will help improve the transparency and 
predictability of the rating process.
    The Committee is seeking to identify cost drivers for 
critical, complex, and capital intensive transit New Starts 
projects. Public Private Partnerships (PPP) may provide an 
important way to achieve significant savings. These 
partnerships with qualification-based selection and 
performance-based contracting integrate risk sharing, 
streamline project development, engineering, and construction, 
and preserve the integrity of the NEPA process, which results 
in the potential for significant schedule and cost advantages 
over traditional infrastructure development. The Secretary is 
directed, in Section 5309(g)(2)(e), to undertake a pilot 
program in which major investment projects are to be selected 
for PPPs, during the development phase of the projects, with a 
goal of demonstrating project cost savings. The Secretary also 
is directed to work with states and local entities to identify 
and eliminate existing impediments to successful implementation 
of PPP's. The Committee expects the Secretary to initiate the 
pilot program as soon as practicable after enactment, in order 
that the benefits of PPP's may be understood and potentially 
applied to other transit New Starts projects.
    A new statutory requirement for ``Before and After 
Studies'' as part of Full Funding Grant Agreements is added in 
Section 5309(g). Such studies are already required by the 
regulation implementing Section 5309(e) and are an essential 
part of improving the New Starts program. By better 
understanding the actual costs and benefits of New Starts 
projects, especially the early planning stages when the Locally 
Preferred Alternative (LPA) is chosen, the planning process can 
be improved, and future projects can be based on estimates of 
costs and benefits which are moreaccurate. In addition, FTA 
would be required to produce an annual report each year which would 
summarize the results of these studies.
    Although there is a strong demand for New Starts funding, 
reduction of the maximum Federal share is not an approach taken 
in this bill. The maximum Federal share for highway and transit 
projects stays the same, in order to assure that there is a 
level playing field between highway and transit projects at the 
local level. Nonetheless, it does not prevent project sponsors 
from overmatching the statutory minimum local share or FTA from 
considering a sponsor's overmatch as part of the process of 
evaluating the local share.
    Often there are significant increases in the scope and 
costs of the projects as they develop from concept to FFGA. In 
such cases, the cost-effectiveness of the alternative selected 
could very well be significantly inferior at the time of FFGA 
than when the original LPA was selected. To provide an 
incentive to local project sponsors to avoid such cost and 
scope ``creep'', the Secretary is to take into account the cost 
and ridership calculation of the project at the end of 
Alternatives Analysis in establishing the Federal commitment 
level to a project. The Secretary would be given the discretion 
to reward project sponsors with a higher proportional share if 
the cost and benefit analyses at FFGA are within 10% of the 
original calculation. In this way, more meritorious projects 
and those which have better controlled costs can be provided a 
higher Federal share. This provision will protect the integrity 
of the decision making process and will ensure that more 
accurate data is presented as the basis for selection of the 
LPA. As a result of this provision, however, no project would 
be eligible to receive a total Federal share of greater than 
    In addition, the Secretary is given the discretion to allow 
project sponsors to benefit if an FFGA project is completed 
under budget. The provision in current law often prevents the 
grantee from keeping funds which remain and this potentially 
results in a perverse incentive to spend the remaining funds 
inappropriately. The new provision would expressly allow 
sponsors to retain a portion of the under-run for other 
eligible public transportation purposes, upon approval by the 
    The Committee believes that it may be appropriate for the 
contractors to public transit agencies to share in the cost 
savings if they have contributed to such under-runs as a result 
of good performance. Thus, the Committee directs the Department 
of Transportation to conduct a study on the appropriateness of 
applying the principles of contractor performance awards 
contained in the Federal Acquisition Regulations, 48 CFR 
Subpart 16.4.
    Section 5309(g) is amended to allow the non-Federal share 
to include funding from a variety of sources, including 
contract revenues from other agencies (as is now the case for 
the non-urbanized area program). This can be a powerful spur to 
improve coordination of transportation services in a region, a 
top priority for the Committee.
    Current law allows use of up to eight percent of the 
amounts available in each fiscal year for Alternatives Analysis 
and Preliminary Engineering within New Starts. As amended, 
Section 5309, at Subsection (m)(2) limits the use of such funds 
to Preliminary Engineering, which marks the first substantive 
stage of a project. As noted earlier, funding for Alternatives 
Analysis would be available from the planning program, as well 
as from an urbanized area's formula funds under Section 5307.
    A reference to 23 U.S.C. 103(e)(4) in Section 5309 is 
deleted since Subsection 103(e) was repealed by Section 1106 of 
    Section 5309(i)(3) would continue to set aside $10,400,000 
each year for Alaska and Hawaii ferry boats, the same amount as 
is in TEA-21. The factors in Section 5309(i)(6) to be 
considered by the Secretary in selecting bus and bus facilities 
grants is expanded to include both the age and condition of the 
buses, fleets, and facilities.
    In lieu of establishing a new program for intermodal 
facilities as proposed by the Administration, $75 million is 
set aside each year from the bus discretionary program for 
these facilities. Eligibility for the intercity portion of 
intermodal terminals is established by the amendment to Section 
    The bill changes the New Starts reporting requirement to 
one annual funding report and three status reports as reflected 
in a new Section 5309(q). Currently, rating all projects for 
the annual report requires grantees not eligible for funding to 
rush their studies, frequently degrading their quality, so that 
information can be produced for the report. The annual report 
would describe only projects receiving funding based on 
evaluations and ratings and on existing commitments and 
anticipated funding levels for the next 3 years. Every four 
months, a report would be released with FTA ratings of only 
those projects with significant changes in their summary rating 
or some other key feature, or those that recently have entered 
preliminary engineering or final design. Every report would 
contain a table with summary rating information for all 
projects currently in the New Starts pipeline.
    The requirement for an annual review by the General 
Accountability Office of the New Starts rating and evaluation 
process is continued. These reports have been useful to 
Congress by providing an objective overview of the New Starts 
rating process.
    The Federal Transit Administration is required to issue a 
``Contractor Performance Assessment Report'' (CPAR). This 
report will analyze the consistency and accuracy of cost and 
ridership estimates made by contractors to public 
transportation agencies developing major capital investments. 
This would provide public transportation agencies with a tool 
to assist in choosing contractors with the highest success 
rates in predicting cost and ridership.

Sec. 12. Formula Grants for New Freedom for Elderly Individuals and 
        Individuals With Disabilities

     The program is expanded and renamed to include 
activities which provide access to persons with disabilities, 
in addition to that which is required to meet the requirements 
of the Americans with Disabilities Act.
     Medical access needs are given priority in the 
     Current formulae and program structure continue as 
in current law.
     Matching requirements are expanded to include 
funding from other Federal programs and contracts with human 
service agencies.
     The sliding scale match is applied in States with 
large amounts of public lands.
     A requirement is inserted that projects must be 
drawn from a human service transportation coordination plan.
    Currently, under Section 5310, the Secretary may provide 
grants for the special needs of elderly individuals and 
individuals with disabilities directly (1) to a State or local 
Government authority; or (2) to the chief executive office of 
the State for allocation to private non-profit corporations or 
associations when such service is unavailable or insufficient, 
or (3) to Governmental authorities approved by the State to 
coordinate services for these two populations groups, if there 
are no non-profit corporations readily available to provide the 
service. Section 5310 is amended to authorizegrants directly to 
a State, which would then be able to allocate the funds to a private 
non-profit organization or a Governmental authority under the same 
conditions required in current law.
    Persons with disabilities are particularly in need of 
service beyond that provided in response to the Americans with 
Disabilities Act. Funding for Section 5310 is expanded and 
explicit eligibility is provided for Governmental authorities 
providing services in excess of that provided by the Americans 
with Disabilties Act. This will help fulfill the goals of the 
President's New Freedom Initiative, without creating a new 
program. In addition, language is added to clarify that a 
priority of Section 5310 program funds is the provision of 
access to medical care.
    Section 5310(a)(3) allows a State to use up to 15 percent 
of the amounts it receives under this section to administer, 
plan, and provide technical assistance. This is an increase 
from the present administrative practice of allowing up to 10 
percent of the amounts for these purposes, and is necessary 
because of the added complexity of the program and the enhanced 
requirements for coordination of services. In addition, this 
additional authority makes this program consistent with the 
Section 5311 program, so that both state-administered programs 
essentially have similar structures.
    Consistent with existing Section 5310, grants would be made 
for capital public transportation projects planned, designed, 
and carried out to meet the special needs of this population 
and could include the acquisition of public transportation 
services as a capital expense. The Federal share cannot exceed 
80 percent of the net capital costs of the projects, as 
determined by the Secretary. The remainder of the funds could 
be provided from a variety of other sources, including 
undistributed cash surpluses, or from amounts appropriated or 
made available for transportation from any other Federal 
department or agency other than the Department of 
Transportation, except for Federal Lands Highway funds, as well 
as contract revenue received from human service agencies. These 
are the same sources as for the Formula Grants program for 
other than urbanized areas as proposed under Section 13 of this 
bill. Having identical requirements for local matching funds is 
intended to provide the same incentive to coordination of human 
service transportation as is now provided in the Section 5311 
    This section is also amended to allow for a sliding scale 
approach to the match requirements for capital expenses for 
those states that have a large percentage of public lands, and 
as a result, have a lower tax base from which to draw resources 
to fund the matching requirement mandated by these programs. It 
is similar in nature to a provision already in current law in 
the highway program.
    As is current practice, funds under Subsection (b)(1) are 
apportioned to States based on a formula administered by the 
Secretary. In administering this formula, the Secretary will 
consider the number of elderly individuals and individuals with 
disabilities in a State. Under current law, unobligated Section 
5310 funds available during the fourth quarter of each fiscal 
year may be transferred to Urbanized Area or Other Than 
Urbanized Area Formula Grant programs in order to supplement 
funds apportioned under those sections. Subsection (b)(2) 
allows recipients of grants under this section to transfer 
Section 5310 funds to those programs at any time provided that 
the funds are used for the purposes originally authorized. This 
would eliminate the artificial fourth quarter requirement since 
States typically budget for such transfers in the beginning of 
each fiscal year. In addition, States could make funds 
available to a subrecipient in a single transaction that 
included several FTA program-funding sources.
    Under Subsection (d), a recipient of a grant is subject to 
all Section 5307 grant requirements to the extent the Secretary 
deems appropriate. Recipients would be required to certify that 
the projects for which funds are requested are drawn from a 
plan for human service transportation coordination. The effect 
of this provision and those included in the non-urbanized 
formula program and the Jobs Access and Reverse Commute Program 
will be to enhance coordination between these programs and with 
programs of other Departments, such as Health and Human 
Services, Labor, and Education. The Committee expects that FTA 
will give grantees an appropriate opportunity to develop these 
plans by phasing in this requirement during FY 2006. Finally, 
recipients are required to certify that allocations made to 
subrecipients were distributed in a fair and equitable manner.
    Subsections (e) through (i) are the same as in current law. 
Subsection (e) requires states to develop annual programs of 
projects. Subsection (f) allows vehicles acquired under this 
section to be leased to local Governmental agencies to improve 
service coordination. Subsection (g) allows vehicles acquired 
under this section to be used for ``Meals on Wheels'' services 
as long as the service does not interfere with use of the 
vehicles for public transportation purposes. Subsection (h) 
allows vehicles to be transferred to another eligible recipient 
if they are no longer needed by the original recipient. 
Finally, Subsection (i) states that fares do not have to be 
charged on services assisted by Section 5310 funds.

Sec. 13. Formula grants for other than urbanized areas

     Indian tribes become eligible direct recipients of 
program funds, with a portion of funding set aside for tribes 
beginning in FY 2006.
     Private companies engaged in public transportation 
are eligible as subrecipients.
     The Rural Transit Assistance Program becomes a 2 
percent takedown from the program.
     Recipients must submit data on service levels, 
costs, and revenues to the National Transit Database.
     A new formula tier is established based on land 
area to address the needs of low-density states. The remaining 
80 percent of funds are to be allocated using the current 
     Matching funds may come from contracts with human 
service agencies (as in current law) or from other Federal 
     The ``sliding scale match'' is applied in States 
with large amounts of public lands for capital grants and 
proportionally for operating assistance.
    Section 5311(a) defines an eligible recipient and 
subrecipient of other than urbanized area program funds. Indian 
tribes are established as direct recipients. Private operators 
engaged in public transportation are made eligible as 
subrecipients of 5311 funds, providing for opportunities for 
involvement of the private sector, as was the original intent 
when the Urban Mass Transportation Act of 1964 was first 
enacted. The Administration proposed this change as part of 
their SAFETEA proposal with the belief that this would provide 
a better opportunity for private operators to participate in 
the decision-making processes regarding their role in providing 
public transportation services.
    Section 5311(b) allows other than urbanized area formula 
grants to be used for capital transportation projects, or 
operating assistance projects (as is currently allowed), 
including the acquisition of transportation services, provided 
the projects are contained in a State program of public 
transportation service projects (including agreements with 
private providers of public transportation services).
    Currently, urbanized area program grant recipients must 
submit data on service levels, costs, and revenues, in 
accordance with requirements of the National Transit Database. 
Current law is amended to require a simplified version of these 
data collection requirements for the other than urbanized area 
program. Given the large growth in funding for this program, it 
is crucial that recipients report basic information on the 
effectiveness of this program. The Committee expects that the 
data collection requirements will be tailored to the smaller 
size of the typical public transportation system in rural 
areas, while still providing enough information to judge the 
condition and performance of our Nation's network of rural 
public transportation services.
    Under current law, recipients of grants and contracts for 
transportation research, technical assistance, training, or 
related support services, such as those given under the Rural 
Transportation Assistance Program (RTAP), must compete annually 
for National Planning and Research funds. Section 5311(b)(3), 
as redesignated, provides up to two percent of Section 5311 
funds to carry out RTAP activities. This amendment better 
correlates funding for RTAP with the amount of funding for 
rural service overall, thereby stabilizing the program. Since 
the formula funding level for rural transit increases, a 
proportionate increase in the level of funding for training and 
technical assistance delivered at the State level is available. 
New paragraph (4) allows the Secretary to use up to 15 percent 
of the two percent to sustain ongoing national project 
activities such as the National Transit Resource Center, 
production training modules, and occasional rural transit 
research projects of national interest.
    An increasing amount of funding is set aside for Indian 
Tribes each fiscal year beginning in fiscal year 2006. Of the 
remainder, eighty percent of the Section 5311 program amount is 
apportioned to States pursuant to the same formula currently 
being used and now set forth in Section 5311(c)(3), which uses 
population in non-urbanized areas to allocate funds. The 
remaining twenty percent is apportioned on land area in non-
urbanized areas. This new factor is added to reflect the fact 
that rural public transportation services are more difficult to 
provide because of the long distances between homes and basic 
services and thus are more costly in states with low population 
    Section 5311(f) is amended to strike ``after September 30, 
1993,'' since that date has passed. Section 5311(f)(2) requires 
the State to consult with affected intercity bus service 
providers before certifying that the State's intercity bus 
service needs are being adequately met. Such consultation will 
help to ensure the State is aware of any unmet intercity bus 
service needs which private bus operators could fulfill.
    Subsection 5311(g) retains the Federal share for any 
capital project at 80 percent or less of the net costs of such 
a project, as determined by the Secretary. Also retained is the 
Federal share for operating assistance at 50 percent or less of 
the net costs of an operating project, as determined by the 
Secretary. Consistent with current law, the remainder does not 
include revenues from the operation of public transportation 
systems. Rather, the remainder can be provided from a variety 
of other sources, including undistributed cash surpluses, or 
from amounts appropriated or made available for transportation 
from any other Federal department or agency other than the 
Department of Transportation, except for Federal Lands Highway 
funds. Current Section 5311(e)(2), which prohibits a State from 
limiting the level or extent of the Government's share for 
operating expenses, is moved to Section 5311(g)(2) under the 
heading ``Government's Share of Costs.''
    Subsection 5311(g) is also amended to allow for a sliding 
scale approach to the match requirements for capital expenses 
under this section for those states that have a large 
percentage of public lands, and as a result, have a lower tax 
base from which to draw resources. It is similar in nature to a 
provision already in current law in the highway program. The 
match for operating assistance is set at \5/8\ of the match for 
capital projects.

Sec. 14. Research, development, demonstration, and deployment projects

     The current unutilized University Research and 
Fellowships programs are eliminated.
     ``Other transactions'' are allowed in addition to 
grants and contracts.
    Currently, Section 5312 does not address deployment of 
emerging technologies, and inappropriately includes training. 
As amended, Section 5312 authorizes public transportation 
service planning, and research, development, demonstration, and 
deployment projects.
    The former University Research and Fellowships programs 
authorized by Subsections (b) and (c) are repealed, as these 
programs have not been funded for many years. The intermodal 
University Research Program, which is administered by the 
Research and Innovative Technology Administration essentially 
has replaced the transit-only University Research program in 
Subsection (b). The need for a separate fellowship program in 
Subsection (c) is now addressed by the wide variety of transit 
training opportunities, such as the National Transit Institute 
through which many more transit managers receive training for 
the amounts of a single fellowship under the program in 
Subsection (c).
    Throughout the Federal Government, the term ``other 
transactions'' is used to provide executive branch agencies 
with broad discretion to enter into project agreements under 
terms that would encourage private parties to participate in 
Federally-assisted projects. Since the term ``other 
agreements'' in Section 5312(b)(2), as redesignated, provides 
the same authority, this section is amended to replace that 
term with ``other transactions,'' for consistency.

Sec. 15. Cooperative Research Grant Program

     The Transit Cooperative Research Program remains 
    Amendments to Section 5313 provide the correct funding 
authorization citation. Since the statewide planning program 
under current Subsection (b) would be merged into the new 
metropolitan and statewide planning grant program in Section 
5308, Subsection (b) is stricken and the title of Section 5313 
is changed to reflect the fact that only the Transit 
Cooperative Research Program is authorized by this section.

Sec. 16. National research programs

     Project Action is continued at current funding 
     A new program of Medical Transportation 
Demonstration Grants is established.
     A new National Technical Assistance Center for 
Senior Transportation is established.
     A study on how to increase the use of Alternative 
Fuels in public transportation is required.
     Operational demonstration contracts are allowed 
under conditions set by the Secretary.
    Section 5314 would be amended to delete the word 
``Planning'' from the heading, since the focus of the section 
is on research, and planning has been provided for elsewhere in 
Chapter 53.
    Amendments to Section 5314(a)(1) would provide the correct 
funding authorization citation and reflect the fact that the 
University Transportation Centers program in existing Section 
5317 has been moved to Section 5505 of Title 49.
    Subsection (a)(2) continues to provide $3,000,000 for 
Project Action, which is designed to help ensure that public 
transportation-related assistance, programs, research, 
education, and other activities comply with the Americans with 
Disabilities Act of 1990.
    Under current law, operational demonstration projects 
involving public transportation must comply with the Department 
of Labor's transit employee protection requirements under 
Section 5333(b). These new technologies are tested for short 
periods of time on single vehicles rather than on entire 
fleets. Moreover, these types of operational projects do not 
create an employee protective risk, the purpose for which 
Section 5333(b) was enacted. Therefore, Section 5314(a)(3) is 
amended to relieve this compliance requirement.
    Current Section 5314(a)(4)(B) requires FTA to establish an 
Industry Technical Panel composed of transportation suppliers 
and others involved in technology development. This provision 
is deleted, as such a panel is unnecessary given FTA's 
continuing working relationship with all facets of the transit 
    A new Subsection (a)(6) is added to establish a program of 
medical transportation demonstration grants. These grants will 
be focused on improving methods of transportation for persons 
in need of kidney dialysis.
    A new National Technical Assistance Center for Senior 
Transportation would be established in a new Section 5314(c). 
Similar to Project Action, the Center would undertake research, 
provide technical assistance, and make demonstration grants on 
methods to improve transportation for elderly individuals.
    A study is required by Section 5314(d) on how to increase 
the use of alternative fuels in public transportation.

Sec. 17. National Transit Institute

     The National Transit Institute will be continued 
at Rutgers University.
    Currently, Section 5315(a) requires establishment of the 
National Transit Institute (NTI) at Rutgers University. This 
subsection would continue the Institute at this location for 
the new authorization period. The Committee is concerned about 
the effectiveness of programs at the NTI and directs the 
Federal Transit Administration to exercise careful oversight 
over its operation to assure that the Institute is producing 
benefits commensurate with the investment being made.
    Existing Section 5315(b) requires the Secretary to delegate 
the NTI the authority to develop and conduct educational and 
training programs pertaining to public transportation. NTI 
already has sufficient authority to conduct any type of 
educational or training program, and therefore, this section is 

Sec. 18. Bus testing facility

     Special testing requirements for ``New Model'' 
buses are continued.
    Technical changes are made in the requirements for the 
testing of new model buses.

Sec. 19. Bicycle facilities

    Currently all bicycle facilities, have a Federal share of 
90 percent, unless they are funded as ``transit enhancements'' 
which are eligible for a Federal share of 95 percent. Because 
the enhancement program is being continued as a certification 
rather than a set-aside, a technical correction was needed.

Sec. 20. Suspended light rail technology pilot project

    Section 5320, which authorizes a suspended light rail 
system technology pilot program, is repealed because it has 
proved to be impractical and has not been implemented.

Sec. 21. Crime prevention and security

    As noted earlier, capital costs related to crime prevention 
and security have been explicitly authorized as part of a 
capital project throughout Chapter 53. Accordingly, Section 
5321, which provides for separate eligibility, but which has 
never been separately funded, is repealed.

Sec. 22. General provisions on assistance

     Environmental and public hearing requirements are 
revised to conform with the applicable cross-cutting statutes.
     Special terms and conditions for technology 
deployment projects will be allowed.
     Revenue bond proceeds can be used as local match 
for transportation projects.
     Debt Service Reserve Funds are made an eligible 
project activity.
     Public transportation agencies can receive land 
which becomes available as a result of base closures.
     Small and private non-profit agencies are exempted 
from pre-award and post-delivery audit requirements.
    Subsection (a) is amended to include the term ``private 
company engaged in public transportation'' rather than 
``private mass transportation company'' to utilize more current 
terminology and to comport with changes made to the term 
throughout Chapter 53.
    The provisions of Section 5323(b) are edited to mesh the 
statutory requirements of Federal transit law more closely with 
current practice under the National Environmental Policy Act 
    FTA does not depend on the ``certificate of the applicant'' 
that the environmental review was properly performed. Rather, 
NEPA makes consideration of a proposed project's environmental 
record a direct Federal responsibility. Accordingly, FTA 
participates directly in the environmental process for a 
proposed project and reviews the final environmental record 
before accepting it.
    Methods for providing public comment have broadened 
considerably since the language regarding a public hearing was 
enacted in Section 5323(b). This section is amended to provide 
the same consideration to comments submitted by mail or 
electronic means, as the consideration given tocomments 
transcribed at a hearing. In addition, non-English speaking persons or 
hearing-impaired persons are provided the opportunity to comment 
through special arrangements.
    This section eliminates the two-step process for announcing 
a hearing. Under the current process, the applicant announces 
the opportunity for a hearing and then waits for a response. 
This bill requires that a hearing be held whenever the project 
affects significant social, economic, or environmental 
interests in the community, regardless of whether one has been 
    A new Section 5323(e) allows grants for new technology, 
including the integration of innovative techniques, subject to 
the requirements of Section 5309, but only to the extent the 
Secretary deems appropriate. Federal grant requirements, 
particularly in the case of major capital projects, are often 
difficult and burdensome when imposed on the introduction of 
new technology. Revised Subsection (c) strengthens and 
leverages private sector participation by permitting the 
Secretary to establish appropriate terms and conditions for 
projects involving the integration of new innovative or 
improved products, techniques, or methods. Such discretion will 
facilitate new and improved public transportation resources, as 
well as benefit both the public and private sectors.
    The former Section 5323(e) required the Secretary to issue 
a bus passenger seat functional specification based on a 
finding by State and local governments of ``local requirements 
for safety, comfort, maintenance, and life-cycle costs.'' 
Industry has adopted an effective standard, the Secretary has 
issued a specification, and if the need were to arise again, 
the National Highway Traffic Safety Administration would be the 
more appropriate agency to address the matter. Therefore, this 
subsection is deleted.
    Section 3011(a) of TEA-21 allows a recipient of an 
urbanized area formula grant under Section 5307 or a major 
capital investment grant under Section 5309 to use proceeds 
from the issuance of revenue bonds as a local match. Since this 
provision has been beneficial to transit operators, it is 
codified in Section 5323(f)(1).
    Section 5323(f)(2) provides transit grantees with an 
additional innovative financing tool. Typically, only a small 
portion of public transportation investment is financed with 
municipal bonds. Currently, a recipient deposits bond proceeds 
in a debt service reserve to ensure timely payment of principal 
and interest on the municipal bonds supporting the transit 
project. Regardless, the municipal bonds are typically rated 
below ``AA'' because they are secured by variable revenue 
streams and thus demand a higher rate of interest. Under 
Section 5323(f)(2), the Secretary could allow a recipient to 
use Section 5307 or 5309 dollars to reimburse it for deposits 
made to the debt service reserve. Because Federal transit funds 
are typically viewed as higher creditworthy revenues, transit 
bond ratings would be strengthened and interest costs reduced. 
As a result, State and local investment would increase, and 
there would be improved capital planning, lower costs, and 
speedier project development.
    Section 5323(h)(1), which prohibits a grant or loan from 
being used to pay ordinary Governmental or non-project 
operating expenses, is moved to Section 5323(p).
    Section 5323(h)(2), which prohibits a grant or loan from 
being used to support a procurement that uses an exclusionary 
or discriminatory specification, appropriately belongs in 
Section 5325 and is relocated.
    Subsection (h) is revised to provide for the transfer of 
lands or interests in lands owned by the United States. The 
Department of Defense regulations (32 CFR Parts 90 and 91) 
provide for the disposition of surplus land resulting from the 
Defense Base Closure and Realignment Act to be transferred free 
to ``grantees'' that have Federal sponsors with Federal land 
transfer statutes.
    However, within the Department of Transportation, only the 
Federal Highway Administration and the Federal Aviation 
Administration have such authority. By amending Chapter 53 to 
include a Federal land transfer statute under Section 5323(h), 
FTA grantees will be eligible to receive surplus Government 
land for authorized public transportation projects, under 
certain terms and conditions, but at no cost, just as other 
agencies would.
    Reference to the Intermodal Surface Transportation 
Efficiency Act of 1991 in Subsection (j)(5) is obsolete, and 
the provision is amended accordingly.
    Current Section 5323(l), which indicates that the planning 
and programming requirements of 23 U.S.C. 135 apply to grants 
made under 49 U.S.C. 5307-5311, is deleted because statewide 
planning has been included in the planning requirements under 
Sections 5303 and 5304. Subsection (l) is then used to provide 
for the applicability of 18 U.S.C. 1001, dealing with false or 
fraudulent statements, to Federal transit programs. Currently, 
Section 1001 applies only to certificates or submissions 
provided pursuant to Section 5307, ``Urbanized Area Public 
Transportation Formula Grants.''
    Section 5323(m) provides that an independent pre-award 
review and a post-delivery audit must be conducted when a 
grantee purchases rolling stock. These reviews must show 
compliance with Buy America requirements, the motor vehicle 
safety requirements, and the bid specifications. In addition to 
reviewing and documenting the origin of each component and 
subcomponent and the location and cost of final assembly, the 
grantee must use an on-site inspector when it purchases more 
than 10 vehicles. As a result, the grantee must have someone on 
site at the assembly plant to review and observe the actual 
manufacture of the vehicle. This is costly and burdensome on 
smaller grantees that may not have the staff or sophistication 
to devote to such audits.
    Therefore, Section 5323(m) would be amended to eliminate 
these requirements for private non-profit organizations and 
grantees serving urbanized areas with fewer than one million 
people. All manufacturers and suppliers would have to continue 
to certify compliance with Buy America during the bidding 
process, and they would remain bound by their original 
certification. However, these grantees will not have to certify 
twice in order for the vehicles to comply with Buy America. The 
vast majority of vehicles purchased will still undergo the 

Sec. 23. Special provisions for capital projects

     Environmental and relocation assistance 
requirements are revised to conform to applicable cross-cutting 
statutes (NEPA and Uniform Relocation Assistance Act).
     Protective and hardship acquisitions are allowed, 
consistent with current regulations.
     Advance Right of Way acquisitions are allowed 
under certain conditions.
    Currently, Section 5324 contains relocation program 
requirements as a condition of receipt of Federal assistance. 
The Secretary must make an affirmative finding that two of the 
numerous conditions contained in the Uniform Relocation 
Assistance and Real Property Acquisition Policies Act (``the 
Act''), 42 U.S.C. 4601 et seq., have been fulfilled. All State 
agencies, defined in the Act as covering entities that would be 
FTA grantees, must comply with these two provisions of the 
statute to be eligible for Federal transit assistance. 
Therefore, in order to ensure that grantees are complying with 
the applicable requirements, Section 5324(a) is amended to 
reference the relevant sections of the Act directly.
    Section 5324(b) continues to allow protective and hardship 
acquisitions as defined in 23 CFR 771.117, but it also allows 
advance acquisition where the strict requirements associated 
with aprotective acquisition are not met. At present, a 
protective acquisition is permitted only if the development of the 
property is imminent as evidenced by concrete steps taken by a 
developer to build, subdivide, or otherwise develop the land. Because 
it increases the cost of the property to the public when it is finally 
acquired for transportation purposes, outside market forces do not 
generally respect transportation project schedules for environmental 
review and unduly influence the sale and development of real property. 
This provision allows for the acquisition when market forces dictate, 
and thereby avoids multiple transactions on the same property and the 
associated escalation in cost. A strictly limited number of such 
advance acquisitions is allowed without prejudice to the consideration 
of alternative locations or alternative projects, because the resale of 
a few parcels if a different alternative is selected, is feasible, and 
presents little or no burden to the transportation agency.
    Section 5324(c) addresses FTA's current practice of 
allowing the acquisition of pre-existing railroad right of way 
(ROW) in advance of any specific project decisions on how the 
ROW will be used. In some cases, a firm project proposal and 
the associated environmental review may still be years away at 
the time of the acquisition, but the commercial railroad that 
owns the ROW seeks to liquidate the asset through its sale, and 
its preservation as a transportation ROW can only be assured 
through its acquisition. Any changes in the use of the railroad 
ROW are subject to appropriate environmental review prior to 
the change. The purposes of other Federal laws regulating 
railroads (e.g., those governing the abandonment of rail ROW) 
would not be compromised by this provision.
    Section 5324(d) (formerly Section 5324(b)) meshes the 
statutory requirements of Federal transit law more closely with 
current FTA practice under NEPA, and 49 U.S.C. 303 (commonly 
called ``Section 4(f)''), and other environmental laws. Of the 
Secretaries listed in current transit law, only the Secretary 
of the Interior frequently has an interest in FTA projects and 
routinely consults with FTA on those projects. Reference to the 
Secretaries of Agriculture, Health and Human Services, and 
Housing and Urban Development are removed since these agencies 
rarely have any interest in transit projects and the 
requirement for routine consultation with their Departments has 
not proven to be necessary or productive. FTA grant applicants 
are required by NEPA regulations to identify the Federal 
interests and parties affected by a proposed transit project. 
It is a very rare case that a transit project does affect one 
of the Departments on the list.
    The Council on Environmental Quality has delegated its 
routine project review responsibilities to the Environmental 
Protection Agency (EPA). In addition, EPA is required by 
Section 309 of the Clean Air Act to review the environmental 
impact statements of every other Federal agency. Federal 
transit law should be consistent with current delegations of 
responsibilities and with other Federal law. The amendment 
deletes Council on Environmental Quality (CEQ) and substitutes 
the Administrator of EPA.
    Methods for providing the public with adequate opportunity 
to present views have broadened considerably since the original 
language about a public hearing transcript was enacted. At 
present, FTA practice is to give full consideration to every 
public comment on the project, whether that comment was 
transcribed at the formal public hearing, was received in 
written form through the mail or by email, or, in some cases, 
was transcribed from a telephone voice mail service established 
for this purpose. Federal transit law should not single out the 
hearing transcript for greater attention than other valid forms 
of public comment on the project. Therefore, Section 5324(b) is 
redesignated as Section 5324(d) and is amended accordingly.
    FTA has not used the existing authority to hold its own 
separate hearing on a project proposed for FTA funding. The 
local transit agency planning the project and constructing, 
owning, and operating the project must be directly accountable 
to the public affected and served by the project. The agency 
must take responsibility for the public involvement process and 
must consider the public comments in deciding its course of 
action. FTA should not substitute its judgment in these local 
matters. The authority to hold a separate FTA hearing is 
therefore unnecessary and is deleted.

Sec. 24. Contract Requirements

     Current provisions regarding procurement and 
contracts are consolidated in a single section.
     Competition in all procurements is explicitly 
established as the presumptive standard.
     Brooks Act coverage in program management covers 
only architectural, engineering, and design contracts; 
performance and audit standards now referenced are incorporated 
in Title 49.
     Current requirements in FTA guidance on the need 
for grantees to assure that contractors have adequate capacity 
to carry out a contract are included in law.
     Grantees must refer to the Contractor Performance 
Assessment Report when selecting contractors to do work on 
projects seeking FFGAs.
     Buses acquired under this title are exempt from 
State dealer requirements.
    Section 5326, ``Special Procurements,'' is consolidated 
with Section 5325, ``Contract Requirements,'' since the 
provisions of Section 5326 fall within the scope of Section 
    Existing Section 5307 requires the use of competitive 
procurement as defined or approved by the Secretary in carrying 
out procurement under that section. Section 5325(a) is amended 
to expressly require the use of competitive procurement 
procedures for any procurement carried out under Chapter 53. 
This amendment strengthens competition standards and stretches 
procurement dollars in third party contracting.
    The revised language in redesignated Section 5325(b)--
referred to as ``The Brooks Act''--clarifies that program 
management is limited to architectural, engineering, and design 
contracts. Also, the reference to 23 U.S.C. 112(b)(2)(C) 
through (F), which deals with performance and audit standards 
and indirect cost rates, is removed. Instead, Subsection (b) is 
revised specifically to include these provisions.
    TEA-21 allowed for turnkey system projects, also known as 
design-build contracting, in Federally funded public 
transportation projects, including demonstration projects. 
Section 5325(d) (existing Section 5326(a)), replaces the term 
``turnkey'' with the more commonly used term ``design-build.'' 
Also, this section is amended to delete any reference to 
``demonstration projects,'' since design-build contracting has 
matured beyond the demonstration phase. In addition, design-
build contracting does not necessarily result in lower project 
costs or new technologies and, as a result, this concept, which 
appears in existing Section 5326(a)(2), is removed.
    Current provisions on multiyear rolling stock procurements 
now included in Section 5326(b) are relocated to Section 
5325(e). Current provisions on the acquisition of rolling stock 
using a variety of procurement methods now included in Section 
5325(c) are relocated to Section 5325(f).
    Section 5325 is amended to provide that buses purchased 
with assistance from the Federal Transit program are exempt 
from any state requirement to have such buses purchased only 
from in-state bus dealers.
    Currently, FTA and the Comptroller General can inspect 
contract records for capital projects receiving Federal transit 
assistance, but only in cases of ``noncompetitive bidding.'' 
Investigations of the merits of competitive bids are based on 
(1) whether a grantee violated what it certified to, or (2) the 
protest procedures in the Government-wide Common Grant Rule. 
New Subsection 5325(g), ``Examination of the Records,'' 
strengthens oversight by allowing FTA or the Comptroller 
General to inspect all contract documents.
    The ``grant prohibition'' provision, dealing with contract 
requirements, was erroneously included under Section 5323, 
``General Provisions On Assistance,'' and is relocated 
appropriately under Section 5325(h).
    A new provision is added to Section 5325(i) to strengthen 
the requirements that contractors to public transportation 
agencies must have adequate technical and financial capacity to 
carry out a proposed contract. This elevates already existing 
FTA and OMB requirements on third-party contracting to a 
statutory requirement.
    Grantees must refer to the Contractor Performance 
Assessment Reports required under Section 5309 when selecting 
contractors to do work on major capital investments.

Sec. 25. Project management oversight and review

     Security is added to the issues to be included in 
a project management plan.
     The takedown for oversight is increased to 1 
percent in all programs.
     Cross-cutting analyses of oversight results is 
    Given the new security concerns--and in keeping with actual 
practice in the field--Section 5327(a) is revised to require 
that a project management oversight (PMO) plan include ``safety 
and security management.''
    Section 5327(c)(1) is amended to allow a one percent 
takedown for PMO activities related to the planning program 
(5308) and the expanded Formula Grants program for special 
needs of elderly individuals and individuals with disabilities 
(5310). These programs will require comprehensive agency 
    Section 5327(c) is amended to strike the reference to 23 
U.S.C. 103(e)(4), which was repealed by TEA-21.
    The section also provides new authority for the use of 
oversight funds to conduct analyses which cut across multiple 
projects. At present, oversight funds may be used only to 
review each project in isolation. Cross-cutting analyses could 
help identify major problems which need attention and could 
help develop best-practice methods which could be gleaned from 
a review of a set of similar projects.

Sec. 26. Project review

     The schedules for FTA review of projects in the 
New Starts process are updated to clarify the relationship to 
the New Starts process and criteria; the advancement of 
projects is not automatic, but rather depends on meeting the 
requirements of that section.
     The concept of Programs of Interrelated Projects 
is not continued.
    Section 3026 amends Section 5328(a), which established a 
firm schedule for various FTA approvals associated with New 
Starts projects and reporting to Congressional committees on 
failures to meet those schedules. The schedule for FTA review 
continues to be maintained to ensure that projects are not 
delayed inordinately. The section is amended to tie the 
schedule to the requirements of Section 5309(e). In addition, 
since the decision on whether to advance a project to a Full 
Funding Grant Agreement is not automatic and depends on the 
relative merits of projects being considered for funding, as 
well as the readiness of individual projects, Subsection (a)(4) 
is repealed.
    Subsection (c), which provides for a program of 
interrelated projects specifically identified in law, is now 
obsolete and is removed.

Sec. 27. Investigations of safety and security risk

     FTA investigation authority is expanded expressly 
to include security issues.
     The penalty for failure to address issues is 
     A Memorandum of Understanding between the 
Departments of Transportation and Homeland Security is 
    Section 5329 authorizes FTA to investigate ``safety 
hazards,'' but does not authorize FTA expressly to investigate 
``security'' matters. The provision could be interpreted as not 
permitting FTA to investigate or to assist with security 
matters absent some particular ``hazard.'' Therefore, this 
section is amended to promote active cooperation between FTA 
and its grantees on security matters, by clarifying that FTA 
may assist grantees on security matters and investigate 
security concerns without notice of a specific breach of 
security at a transit system.
    The existing section also contains an ``all or nothing'' 
provision that authorizes the Secretary to withhold ``further 
financial assistance'' upon a transit system's failure to 
correct a safety hazard. Section 5329 allows the Secretary to 
determine the amount of funding to be withheld.
    Section 5329(b) required that a report on safety hazards in 
the transit industry be completed by 1992. The report has been 
completed and thus this provision is deleted.
    A new requirement is added for a Memorandum of 
Understanding between the Departments of Transportation and 
Homeland Security specifying the details of how the agencies 
would cooperate on setting national security standards for 
public transportation, would establish funding priorities for 
DHS grants to public transportation agencies, and would 
coordinate with each other and public transportation agencies 
on security matters.

Sec. 28. Withholding amounts for non-compliance with state safety 

     Safety oversight is required during the design 
phase of New Starts.
     States can designate a single agency to handle 
oversight of systems serving more than one State.
    Section 5330 is amended to change the heading to 
``Withholding Amounts for Non-Compliance with State Safety 
Oversight Requirements'' the better to reflect the requirements 
in this section.
    Amendments to Section 5330 ensure that safety is considered 
well before a rail fixed-guideway system begins revenue 
service, i.e., during the design phase of the project.
    Section 5330 allows a single transit system operating in 
more than one State to designate a single entity to oversee the 
safety of a rail fixed-guideway system. Because this provision 
is discretionary, a rail fixed-guideway system operating in two 
or more States may be subject to more than one oversight 
agency, each having different safety standards. In order to 
strengthen the provision's goal of safety and reduce the burden 
on grantees having to comply with differing standards, Section 
5330 is revised to make such a designation mandatory.
    Subsection (f) required the Secretary to issue regulations 
no later than December 18, 1992. Because the regulations have 
been issued, Subsection (f) is deleted.

Sec. 29. Terrorist attacks and other acts of violence against public 

     Controllers of public transportation are protected 
by laws against violence toward transportation facilities.
    The term ``mass transportation'' is changed to ``public 
transportation'' throughout Chapter 53 of Title 49, U.S.C., for 
the reasons set forth in Section 3001 of the bill. Section 1993 
of Title 18, U.S.C., is a criminal statute prohibiting 
terrorist attacks and other acts of violence against the 
Nation's transit systems, most of which receive Federal public 
transportation assistance under Chapter 53 of Title 49. Section 
1993 of Title 18 is amended to replace the term ``mass 
transportation'' with ``public transportation.''
    Section 1993(a)(5) makes it a Federal crime to interfere 
with anyone ``dispatching, operating, or maintaining a mass 
transportation vehicle or ferry.'' The statute does not address 
those who ``control'' such vehicles, and arguably excludes rail 
system ``controllers'' (central command employees who control 
the movement of rail cars). Although such controllers 
``operate'' vehicles in some cases, and thus may fall within 
the statute, the statute does not expressly cover them. The 
amendment to Section 1993(a)(5) explicitly provides that 
interference with a rail controller constitutes a Federal 

Sec. 30. Controlled substances and alcohol misuse testing

     Allows ferry boats to be covered only by Coast 
Guard requirements rather than both Coast Guard and FTA.
    Currently, Section 5331 authorizes the Secretary to exclude 
from FTA drug and alcohol testing requirements those public 
transportation providers that are covered adequately by the 
testing statutes of the Federal Motor Carrier Safety 
Administration (FMCSA) or the Federal Railroad Administration 
(FRA). Section 5331 is amended to expand the Secretary's 
authority to exclude from FTA testing requirements, those 
public transportation providers that are adequately covered 
under other Federal or Departmental testing statutes or 
regulations, such as the U.S. Coast Guard's testing provisions 
applicable to ferryboat employees.
    Section 5331(f)(3) states that this section shall not 
prevent the Secretary from continuing in effect, amending, or 
supplementing a regulation governing drug and alcohol testing 
prescribed before October 28, 1991. FTA drug and alcohol 
regulations are now codified (49 CFR Part 655) and therefore 
Subsection (f)(3) is unnecessary.

Sec. 31. Employee protective arrangements

     The time for severance pay and benefits for 
transit workers is reduced to four years to comport with 
existing rail worker protections for Class III railroads.
     This section does not automatically require labor 
protections to be continued after a change in contractor.
     Grants for purchase of like-kind equipment or 
facilities do not have to be referred by the Department of 
Labor prior to certification.
    The Committee has substantial legislative history on the 
issue of Section 5333(b) labor protection, commonly referred to 
as ``Section 13(c)''--a reference to the section as contained 
in the pre-codified Federal Transit Act.
    Current law provides for 6 years of severance pay at full 
pay and benefits in the case where public transportation 
employees' jobs are lost as a result of a grant. This applies 
to nearly every transit agency, as few exist in the absence of 
federal support. The bill would change the length of severance 
pay required under Section 5333(b) to 4 years. The precedent 
for this modification comes from changes resulting from the 
Interstate Commerce Commission's sunset and subsequent 
replacement by the Surface Transportation Board. At that time, 
the requirement for severance pay for workers at Class III 
railroads (which are most analogous to transit agencies) was 
reduced from 6 years to 4 years. The Committee notes that this 
change does not alter requirements for severance pay for 
workers covered under other laws, such as those governing the 
rights of railroad workers.
    On April 25, 2000, the Committee held a hearing entitled 
``The Ability of the U.S. Department of Labor to Delay or to 
Derail Mass Transit Projects that have been Approved and Funded 
by Congress.'' The hearing highlighted numerous cases where 
Section 13(c) had been an obstacle to effective management of 
public transportation. Transit agency representatives from 
Dallas, Texas; Las Vegas, Nevada; and Boston, Massachusetts 
testified about their particular experiences with delayed 
grants or interference with the transit agency's ability to 
make effective choices to increase the efficiency of transit 
operations and capital investments.
    On July 11, 2000, the Committee held a hearing entitled 
``The FTA's Approval of Extending the Amtrak Commuter Rail 
Contract.'' Witnesses included Acting Administrator Nuria 
Fernandez and Amtrak President George Warrington. Amtrak had a 
contract to provide service to the Massachusetts Bay 
Transportation Authority (MBTA) since the mid-1980s, despite 
the fact that Federal Government grant rules require that 
contracts using federal funds be put out for competitive bid at 
least every five years. In 1998, FTA wrote a letter to the MBTA 
requiring it to compete the contract or risk losing federal 
funds. In response, MBTA put the contract out for bid and 
received four bids ranging from $175 million to Amtrak's bid of 
$291 million. Additionally, MBTA rated the proposals on the 
basis of quality. Amtrak ranked worst based on measures of both 
price and quality. MBTA selected the best contractor on both 
factors, but when it came time to transition to the winning 
contractor, the Department of Labor's reinterpretation of 
Section 13(c) prevented the successful bidder from carrying out 
the contract and the contract with Amtrak was extended. Section 
13(c) required the new contractor to maintain the same work 
force, the same rates of pay, and the same work rules, thereby 
eliminating any cost savings that would have been achieved by 
transition to the new contractor. The result was to render the 
competitive bidding process meaningless.
    The Committee believes that the current provisions 
contained in Section 5333(b) are in need of significant reform 
to prevent the abrogation of free-market principles and cost 
escalations deleterious to the effective provision of public 
transportation. Operational flexibility is a keyfoundation for 
competitive contracting. Accordingly, this bill provides that 13(c) 
requirements do not automatically attach to newly solicited contracts, 
or require that an identical workforce or rules be maintained under new 
contracts. Carrying over benefits from contractor to contractor was not 
envisioned when Section 13(c) was enacted and as such, this restores 
the original intent of Section 13(c).
    The bill codifies the Department of Labor's decision 
(commonly referred to as the ``Las Vegas'' decision), which 
found that a change in contractors would not extinguish 
obligations under prior Section 5333(b) arrangements. This 
provision is not intended to extend, expand, or contract labor 
protection collective bargaining terms and conditions 
applicable to subsequent contracts.
    In addition, the bill establishes in law a Special Warranty 
now applied by administrative practice in the Section 5311 
program for other-than-urbanized-areas and applies it in the 
Job Access and Reverse Commute Program.
    The Committee expects the Department of Labor to promulgate 
regulations to implement the changes made by this bill.

Sec. 32. Administrative procedures

     Provides FTA with explicit authority to issue 
     Allows the Secretary to regulate public 
transportation operations in the case of national emergencies.
    Questions with respect to FTA's regulatory authority 
occasionally arise (e.g., with respect to the safety and 
security of transit systems and, some years ago, illegal drug 
and alcohol use). Amendments to Section 5334(a) clarify that 
the Secretary has the authority to issue regulations as 
necessary to carry out the Federal transit provisions in 
Chapter 53.
    Current Section 5324(c), ``Prohibitions Against Regulating 
Operations and Charges,'' is moved to Section 5334, 
``Administrative Provisions,'' as a new Subsection (b). It is 
appropriate to house this prohibition in the ``Administrative 
Provisions'' section and make it expressly applicable chapter-
wide, rather than on capital projects only. While it has been 
the practice of FTA to forego any regulation of operations or 
charges with respect to any grant based on legislative history, 
current law is ambiguous. Moving this provision will clarify 
that FTA may not regulate operations or charges, except in 
emergencies. The appropriate Federal role in public 
transportation is to provide financial assistance only, and not 
to regulate operations. Also, this provision is amended to 
specify that the Secretary is prohibited from regulating a 
recipient's routes, schedules, rates, fares, tolls, and 
rentals, just as this provision had specified prior to the 
recodification of the Federal Transit Act into 49 U.S.C. 
Chapter 53 in 1994. In light of the September 11 
terroristattacks, this provision is further amended to allow the 
Secretary of Transportation, under direction by the President, to 
regulate the operation of and charges for public transportation systems 
for purposes of national defense or in the event of a national or 
regional emergency.

Sec. 33. Reports and audits

    Section 5335(b), requiring that the Comptroller General 
submit ``transferability reports'' to Congress, is removed, as 
the report is no longer needed on a recurring basis. 
Information on the use of flexible funding under Title 23 is 
readily available.

Sec. 34. Apportionments of appropriations for formula grants

     For basic apportionments, the existing urbanized 
area formula continues as in current law.
     A Transit Intensive Cities Tier is added, 
allocating $35 million per year to those areas under 200,000 
population which operate more service (revenue vehicle hours) 
per capita than areas 200,000 to 1 million.
     A study of rural and urban incentives is required.
    The formula in Section 5336 sees the addition of a new 
``Transit Intensive Cities'' tier. Under current law, funds are 
allocated to urbanized areas with a population of less than 
200,000 only on the basis of urbanized area population and 
population density. Fund allocations do not reflect the amount 
of transit service provided. Thus, certain small areas which 
sometimes have more transit service than areas with more than 
200,000 people do not get funding sufficient to recapitalize 
their transit systems. The ``Transit Intensive Cities'' tier 
would allocate funds to small urbanized areas with transit 
service levels (represented by revenue vehicle hours) per 
capita greater than the per capita service levels in areas with 
population of 200,000 to 1,000,000 on the basis of transit 
service levels. Funds from this tier are available for capital 
purposes only.
    The provision in Section 5336(h) regarding adjustments in 
apportionments from the Mass Transit Account and general funds 
is deleted.
    The redundant provision in Section 5336(j) which describes 
the grant requirements which apply to funds allocated by 
Section 5336 is deleted. These requirements are already applied 
to the Section 5307 program by Section 5307(n).
    The provision in Section 5336(k) which referred to 
treatment of former urbanized areas in Fiscal Year 1993 is 
    A provision is added to require a study of incentives which 
might be added to the urbanized area and other-than-urbanized 
area formula programs. The Administration proposed a program of 
incentive allocations based on increases in ridership which the 
Committee seriously considered. However, in light of numerous 
questions about how such a program would work, the factors to 
be considered, and the manner in which grants could be used, 
the Committee instead calls for a study of the issues involved 
in establishing such a program. The Committee believes that 
there may be some merit in building incentives into the 
allocation of Federal funds. The report should address the 
possibility of rewarding improvements in ridership (as was 
proposed by the Administration) as well as improvements in 
efficiency (cost per unit of service provided), effectiveness 
(service utilization per unit of service provided), and cost-
effectiveness (cost per unit of service utilization). The 
Committee is particularly interested in assessments of 
incentives for improvements in efficiency, which could spur 
public transportation agencies to explore more use of 
competition in the selection of service provider as well as 
increased use of privately provided service.

Sec. 35. Fixed guideway modernization apportionments

     The current formula for the fixed guideway 
modernization program is retained.
    The formula in Section 5337 is currently used to allocate 
fixed guideway modernization funds in Section 5309 and is 
retained unchanged. Section 5337(e) is removed, since that 
section provided for a special rule from October 1, 1997, 
through March 31, 1998.

Sec. 36. Authorizations

     Funds all programs except New Starts from the Mass 
Transit Account
     Funds New Starts from the General Fund.
    Section 5338 authorizes amounts from the General Fund, and 
makes available amounts from the Mass Transit Account of the 
Highway Trust Fund, to carry out Federal public transportation 
programs in Fiscal Years 2005 through 2009. Funds from the Mass 
Transit Account are provided as ``contract authority.''
    Section 5338(a), provides funds for all programs for Fiscal 
Year 2005 in accordance with the Consolidated Appropriations 
    Section 5338(b) Formula Grants and Research, provides funds 
for Fiscal Years 2006 through 2009 from the Mass Transit 
Account to carry out Sections 5305, 5307, 5308, 5309 (bus and 
fixed-guideway modernization), 5310-5318, 5322, 5335 and 5505 
of Title 49, and Sections 3037 and 3038 of Pub. L. 105-178. It 
also provides for a takedown for grants to the Alaska Railroad 
for improvements to its passenger operations under Section 
    Section 5338(c), Major Capital Investment Program Grants, 
authorizes appropriations from the General Fund in Fiscal Years 
2006 through 2009 to carry out Section 5309 (New Starts). 
Section 5338(c) authorizes funds from the Trust Fund for 
administrative expenses. Amounts available under Subsections 
(a) and (b) remain available until expended and grants financed 
from amounts derived from the Mass Transit Account or through 
advance appropriations under those subsections would be 
contract authority.
    Throughout the life of TEA-21, planning funds to carry out 
49 U.S.C. 5303-5305 and 5313(b) were authorized and made 
available pursuant to 49 U.S.C. 5338(c). Grants for both 
planning programs are mainstreamed into 49 U.S.C. 5308. Funding 
for the planning programs are authorized as a takedown from the 
Urbanized Area Public Transportation Formula Grants account.
    The bill provides that 1.75 percent of the funds are 
available for planning in Fiscal Years 2006 through 2009. This 
percentage represents a minimal increase over previous Fiscal 
Years. The amount proposed in fiscal year 2005 takes into 
account that this fiscal year will be the first year of 
reauthorization and is based on the Consolidated Appropriations 
    The bill provides funding for the National Transit Database 
(NTD) authorized under Section 5335 in fiscal years 2006 
through 2009. The NTD workload has increased substantially with 
the advent of monthly reporting on safety and security and with 
the new requirements for the phased in rural and asset 
condition reporting.

Sec. 37. Apportionments based on growing and high density states 
        formula factors

     Adds a new formula to allocate funds to States 
based on their population growth and on their level of 
population density. This formula is split evenly between 
``Growing States'' and ``High Density'' factors.
     Adds a new formula to allocate funds to Growing 
States. Amounts are allocated to States based on amount of 
population forecast in 2015. In each State, the amount is split 
between urbanized areas and non-urbanized areas in proportion 
to the population in 2015.
     Adds a new formula to allocate funds based on 
State population density in excess of a benchmark multiplied by 
the urbanized land area.
    A new Section 5340 is added to allocate funds to Growing 
and High Density states. For this section, the term ``State'' 
is defined only to mean the 50 States.
    With respect to Growing States, the current formulae in 
Chapter 53 all look back to population in the most recent 
decennial census and to the most recent transit service level 
data in the National Transit Database. While this is helpful in 
assuring that funds are allocated based on need, they focus on 
existing needs, not the potential needs which exist in growing 
areas. Thus, it is very difficult for areas which foresee the 
need for expanded transit services to use funds allocated by 
the current formulae to address those needs.
    The new Section 5340 allocates funds based on the 
population forecasts for fifteen years after the date of that 
census. Forecasts are based on the trend between the most 
recent decennial census and Census Bureau population estimates. 
Funds allocated to the States are then sub-allocated to 
urbanized and non-urbanized areas based on forecast population, 
where available. Funds allocated to urbanized areas are 
included in their Section 5307 apportionment. Funds allocated 
for non-urbanized areas are included in the states' Section 
5311 apportionments.
    Similarly, other States are of extremely high density, and 
have public transportation needs and abilities in excess of 
average and the ability to service those needs more effectively 
than average, and thus, the current formulae do not fully 
account for these needs. For States with population densities 
in excess of 370 persons per square mile, funds are allocated 
based on the amount by which their population exceeds the 
product of their land area and the percentage of total State 
population in urbanized areas as determined by the most recent 
Decennial Census.

Sec. 38. Job access and reverse commute

     Continues Job Access and Reverse Commute as a 
competitive discretionary program.
     Tailors grant requirements to the type of 
     Requires projects to be drawn from a human service 
transportation coordination plan.
     Expands definition of ``eligible person'' to allow 
States to conform definition of eligible clients to their own 
TANF definition.
    Section 3037 of TEA-21 authorized the Job Access and 
Reverse Commute (JARC) program to assist welfare recipients and 
other low-income individuals in getting to and from jobs. The 
JARC program is reauthorized by amending Section 3037 of TEA-21 
to provide funding authorizations for Fiscal Years 2005 through 
    The JARC program continues as a national competition. The 
coordination requirements are amended to conform to the changes 
made in Sections 5307, 5310, and 5311. Section 3037(b)(2) is 
amended to clarify that funds can be used for the provision of 
service as well as the development of service.
    Section 3037(b) is amended to expand the definition of 
``eligible low-income individual'' to allow States the 
flexibility to use JARC funds to assist the same individuals as 
assisted under the State-administered Temporary Assistance to 
Needy Families program (TANF). At present, the JARC program 
sets up a nationwide definition at 150 percent of the poverty 
line, while some States may choose to define eligibility 
differently. The bill allows the continuation of current 
eligibility as well as the new eligibility, tied to the TANF 
program within the State. No change is made in the activities 
eligible under the JARC program. Hence, all activities which 
have been deemed eligible remain eligible.
    Section 3037(b) is amended to expand the definition of 
``eligible low-income individual'' to allow States the 
flexibility to use JARC funds to assist the same individuals as 
assisted under the State-administered Temporary Assistance to 
Needy Families program (TANF). At present, the JARC program 
sets up a nationwide definition at 150 percent of the poverty 
line, while some states may choose to define eligibility 
differently. The bill allows the continuation of current 
eligibility as well as the new eligibility, tied to the TANF 
program within the State.
    Section 3037(j) is amended to change the terms and 
conditions of JARC grants to match the type of recipient. Under 
current law, all JARC grants are subject to the terms and 
conditions of Section 5307, including those to recipients in 
other than urbanized areas, or recipients who are private non-
profit organizations. This represents a significant burden to 
these recipients, since the requirements are tailored to public 
agencies in urbanized areas. The bill makes grants to public 
transportation operators and to private companies engaged in 
public transportation in urbanized areas under the same terms 
and conditions as required under the urbanized area formula 
program. Grants to public transportation operators and to 
private companies engaged in public transportation outside 
urbanized areas will be subject to the requirements of the 
Section 5311 program. Grants to private non-profit 
organizations will be subject to the requirements of the 
Section 5310 program.

Sec. 39. Over-the-Road Bus Accessibility Program

     Continues Over-the-Road Bus Accessibility Program.
    The heading of Section 3038 is changed from the ``Rural 
Transportation Accessibility Incentive Program'' to its more 
commonly used name ``Over-the-Road Bus Accessibility Program.'' 
In addition, Section 3038 is amended to reflect authorization 
of funds for this program in Fiscal Years 2005 through 2009.

Sec. 40. Transit in Parks

     Authorizes grants for public transportation 
projects in National Parks and other public lands.
    This section funds, for the first time, a program to 
provide funding for public transportation in National Parks and 
public lands at a level of $25 million per year. The 
Departments of Transportation and Interior will work 
cooperatively to develop and select capital improvements.
    Under this program, the Departments of Transportation and 
Interior will work cooperatively to select capital projects for 
funding within and in the vicinity of sites in the National 
Park System, the National Wildlife Refuges, Federal 
recreational areas, and other public lands, including National 
Forest System lands. This program is intended to help these 
areas address the problem of overcrowding that has come with 
increased visitation. TEA-21 required the Department of 
Transportation to conduct a study of alternative transportation 
needs in the national parks and other public lands, and that 
study confirmed that the parks are able and willing to develop 
transit alternatives. This program will help the parks make 
investments in traditional public transportation, such as 
shuttle buses or trolleys, or other types of public 
transportation appropriate to a park setting, such as 
waterborne transportation or bicycle and pedestrian facilities.

Sec. 41. Obligation ceiling

    This section establishes the obligation ceiling for each 
fiscal year, equal to the total amounts authorized.

Sec. 42. Adjustments for the Surface Transportation Extension Act of 

    This section provides that the amounts for Fiscal Year 2005 
are in lieu of, and not in addition to, the amounts authorized 
for the first eight months of Fiscal Year 2005 by the Surface 
Transportation Extension Act of 2004. In addition, the section 
provides for an adjustment to the calculations of 
apportionments for the fixed-guideway modernization program, 
since that formula assumes a full year of funding.

Sec. 43. Disadvantaged Business Enterprise

    This section continues the Disadvantaged Business 
Enterprise requirements contained in the Transportation Equity 
Act for the 21st Century.

                             Cost Estimate

                                                    April 11, 2005.
Hon. Richard C. Shelby,
Chairman, Committee on Banking, Housing, and Urban Affairs, U.S. 
        Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for the Federal Public 
Transportation Act of 2005.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Susanne 
                                       Douglas Holtz-Eakin,


Federal Public Transportation Act of 2005

    Summary: CBO estimates that implementing the bill would 
cost $25.3 billion over the 2006-2010 period, assuming 
appropriation action consistent with the bill. The legislation 
would extend the authority for the surface transportation 
programs administered by the Federal Transit Administration 
(FTA). For those programs, CBO estimates that the bill would 
provide about $82 billion in contract authority (the authority 
to incur obligations in advance of appropriations) over the 
2006-2015. The bill also would authorize the appropriation of 
about $6.2 billion for those programs over the same period.
    The amount of new spending on transit programs under the 
bill would add to outlays expected from funding previously 
provided. In total, CBO estimates that discretionary outlays 
would sum to about $37.3 billion over the 2006-2010 for the 
affected transit programs.
    Consistent with the rules set forth in the Balanced Budget 
and Emergency Deficit Control Act, CBO assumes that the 
contract authority for the transit programs would continue at 
the same rate provided immediately before the authority for the 
programs would expire in 2009. Hence, this estimate includes an 
additional $8.6 billion in contract authority in each year over 
the 2010-2015 period.
    This bill contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA). 
It would benefit state and local governments by reauthorizing 
federal funding for public transportation programs. While some 
provisions in the bill would result in additional costs for 
these governments, those costs would result from complying with 
conditions of federal assistance.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of the bill is summarized in the table below. 
The costs of this legislation fall primarily within budget 
function 400 (transportation).

                                                               By fiscal year, in millions of dollars--
                                                        2005      2006      2007      2008      2009      2010
                                        SPENDING SUBJECT TO APPROPRIATION
FTA's Spending Under Current Law:
    Authorization Levela............................       918         0         0         0         0         0
    Estimated Outlays...............................     6,844     4,619     3,382     2,293     1,217       470
Proposed Changes:
    Estimated Authorization Levelb..................         0     1,387     1,465     1,601     1,744         0
    Estimated Outlays...............................         0     1,231     3,764     5,666     7,359     7,280
Total Spending Under the Bill:
    Estimated Authorization Levelb..................       918     1,387     1,465     1,601     1,744         0
        Estimated Outlays...........................     6,844     5,850     7,146     7,959     8,576     7,750

                                                 DIRECT SPENDING

FTA's Direct Spending Under the Current-Law
    Estimated Budget Authorityb.....................     6,691     6,691     6,691     6,691     6,691     6,691
    Estimated Outlays...............................         0         0         0         0         0         0
Proposed Changes:
    Estimated Budget Authorityb.....................         0       131       518     1,186     1,892     1,892
    Estimated Outlays...............................         0         0         0         0         0         0
Total Direct Spending Under the Bill:
    Estimated Budget Authorityb.....................     6,691     6,822     7,209     7,877     8,583     8,583
    Estimated Outlays...............................         0         0         0         0         0        0
aThis is the amount of budget authority appropriated for the transit programs for 2005; it does not include
  contract authority for that year.
bUnder current law, most budget authority for the 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. The legislation 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.

Basis of Estimate

    For this estimate, CBO assumes that the bill will be 
enacted by May 31, 2005, when the current authority for most of 
the surface transportation program expire and that future 
appropriation actions will be consistent with the funding 
levels authorized in the bill.
            Contract Authority
    The legislation would extend the authority for the surface 
transportation programs administered by the FTA through 2009. 
Under current law, most budget authority for such 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 and that appropriation acts would include 
obligation limitations equal to the contract authority levels 
for those programs. For the transit programs, the bill would 
provide a total of $39.1 billion of contract authority over the 
2006-2010 period, or $5.6 billion more than assumed under the 
CBO baseline for these programs. For the 2006-2015 period, 
projected contract authority would total $82 billion or $15.1 
billion more than assumed under the CBO baseline for these 
            Spending Subject to Appropriation
    In addition to providing contract authority, this 
legislation would authorize the appropriation of $6.2 billion 
over the 2006-2009 period for various transit programs. 
Assuming appropriation action consistent with the authorization 
and obligation levels specified in the bill, CBO estimates that 
implementing the bill would cost about $25.3 billion over the 
2006-2010 period. 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 $37.3 billion over the 2006-2010 period for the affected 
transit programs.
    Estimated impact on state, local, and tribal governments: 
This bill contains no intergovernmental mandates as defined in 
UMRA. The bill would benefit state and local governments by 
reauthorizing federal funding for public transportation 
programs. While some provisions in the bill would result in 
additional costs for these governments, those costs would 
result from complying with the conditions of federal 
    Included in the bill are changes to existing transportation 
planning requirements imposed on states and local Metropolitan 
Planning Organizations (MPOs). These requirements are 
conditions of receiving federal transportation assistance. 
According to MPO representatives, some of these changes would 
impose additional costs on MPOs, particularly a requirement 
that they include certain environmental considerations as part 
of the planning process. At the same time, states and MPOs 
receive funds from federal highway and transit programs to 
offset planning costs, and this bill would increase the amount 
of transit funds set aside for that purpose.
    Estimated impact on the private sector: The bill contains 
no new private-sector mandates as defined in UMRA.
    Estimate prepared by: Federal Spending: Susanne Mehlman; 
impact on state, local, and tribal governments: Marjorie 
Miller; impact on the private sector: Jean Talarico.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                 Changes in Existing Law (Cordon Rule)

    On March 17, 2005, the Committee unanimously approved a 
motion by Senator Shelby to waive the Cordon Rule. Thus, in the 
opinion of the Committee, it is necessary to dispense with the 
requirements of section 12 of rule XXVI of the Standing Rules 
of the Senate in order to expedite the business of the Senate.

                            ADDITIONAL VIEWS

    The legislation reported by the Committee is vitally 
important to keep America moving forward in the 21st century. 
The investment authorized in this bill is critical to our 
efforts to improve our citizens' mobility and strengthen our 
national economy. The bill takes a responsible approach to 
addressing the various types of transit needs in communities 
all across the nation, and we appreciate this legislation. 
While we continue to support the investment level and the 
highway/transit balance reflected in the reauthorization bill 
which passed the Senate last year, we recognize the need to 
move forward and therefore supported the bill reported by the 
Committee with the understanding that we will continue to press 
for a more appropriate balance between these two programs on 
the Senate floor.
    While there are a number of provisions in the legislation 
that modify various aspects of the transit programs, for the 
most part of the bill not enact major changes to a program that 
has worked well. For example, while the bill enhances the role 
of private-sector transit providers in several ways, it was not 
intended to change the long-standing congressional policy that 
decisions involving the choice between public and private 
transit operators should be left to local authorities who are 
better equipped to make local transportation decisions, and the 
federal government should remain neutral with respect to such 
local decision-making.
    The bill makes several modifications to section 5333(b), 
known as section 13(c), the transit employee labor protections. 
Section 13(c) has been a part of every transit bill since 1964, 
providing important collective bargaining and job right 
protections. It has served to unify a broad coalition of 
transit industry and employee representatives who have worked 
together to expand the Federal transit program to what it is 
today: an unequivocal success. We do not agree with the 
characterization in the Section-by-Section of the testimony 
given in the Committee's hearings, nor do we believe that the 
description of the events in Boston accurately reflects the 
circumstances of that case. In fact, the issue in Boston 
stemmed from the Massachusetts Bay Transportation Authority's 
use of a flawed bidding process, which led to the selection of 
an unqualified contractor. Contrary to critic's allegations, 
the U.S. Government Accountability Office has found that 
Section 13(c) does not delay processing time for grants, nor 
does it inhibit transit agencies from contracting out their 
services. Given the substantial benefits to Section 13(c) to 
the nation's transit systems, we do not believe that any 
modifications to Section 13(c) were necessary.
    However, given that modifications were made, we believe it 
is important that their scope be properly understood. One of 
the modifications addresses employee job guarantees when one 
private contractor replaces another private contractor through 
competitive bidding. Legislative history shows that Congress 
intended Section 13(c) to apply to grants in all such cases, 
with specific benefits dependent upon the facts of each case; 
this issue was addressed in the Department of Labor's ``Las 
Vegas decision,'' dated September 21, 1994, as amplified by 
letter dated November 7, 1994. The bill includes language to 
ensure that the Department of Labor's decisions involving so-
called ``contractor to contractor rights'' are governed by the 
standards set forth in the Las Vegas rulings, without otherwise 
affecting existing protective arrangements; this affirmation of 
existing DOL policy should not serve as a basis for objections 
under 29 CFR 215.3(d).
    In addition, the amendment to section 5333(b)3), which 
reduces the protective period from a maximum of 6 years to a 
period not to exceed 4 years, applies exclusively to the 
duration of a dismissed or displaced employee allowance, and 
does not otherwise affect the protections afforded employees 
under section 5333(b). Moreover, the protections afforded to 
workers on Class III Railroads have never before been connected 
to transit labor protections, and should not be viewed as a 
precedent for any change to Section 13(c).
    We believe that the Committee's hearing record provides 
ample evidence that Section 13(c) has contributed to the 
development of a well-trained, professional transit workforce 
which allows the transit industry to operate effectively even 
as the range of transit services continues to expand and 
technology continues to improve.