Highway Emergency Relief: Reexamination Needed to Address Fiscal 
Imbalance and Long-term Sustainability (23-FEB-07, GAO-07-245).  
                                                                 
Since 1972, Congress has authorized $100 million a year for	 
highway disaster recovery needs through the Federal Highway	 
Administration's (FHWA) Emergency Relief (ER) program.		 
Increasingly, the program's actual costs have exceeded this	 
amount, and Congress has provided additional funding. Because of 
this fiscal imbalance between program funding and program needs, 
we reviewed ER under the Comptroller General's authority to	 
determine the (1) total funding, distribution of funds among the 
states, and disaster events funded; (2) sources of funding	 
provided and financial challenges facing the program; and (3)	 
scope of activities eligible for funding and how the scope of	 
eligible activities has changed in recent years. GAO's study is  
based on financial data, document analysis, stakeholder 	 
interviews, and site visits, among other methods.		 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-07-245 					        
    ACCNO:   A66185						        
  TITLE:     Highway Emergency Relief: Reexamination Needed to Address
Fiscal Imbalance and Long-term Sustainability			 
     DATE:   02/23/2007 
  SUBJECT:   Bridges						 
	     Disaster relief aid				 
	     Eligibility criteria				 
	     Federal aid for highways				 
	     Federal aid to states				 
	     Federal funds					 
	     Federal/state relations				 
	     Fund audits					 
	     Funds management					 
	     Natural disasters					 
	     Program evaluation 				 
	     Public roads or highways				 
	     Repair costs					 
	     Supplemental appropriations			 
	     Trust funds					 
	     Fiscal imbalance					 
	     Policies and procedures				 
	     FHWA Emergency Relief Program			 
	     FHWA Federal-Aid Highway Program			 
	     Highway Trust Fund 				 

******************************************************************
** This file contains an ASCII representation of the text of a  **
** GAO Product.                                                 **
**                                                              **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced.  Tables are included, but    **
** may not resemble those in the printed version.               **
**                                                              **
** Please see the PDF (Portable Document Format) file, when     **
** available, for a complete electronic file of the printed     **
** document's contents.                                         **
**                                                              **
******************************************************************
GAO-07-245

   

     * [1]Results in Brief
     * [2]Background
     * [3]Extraordinary Events Determine Which States Receive Most Eme

          * [4]States Experiencing Extraordinary Disasters Received Majorit
          * [5]The Emergency Relief Program Has Experienced Increased Deman

     * [6]Annual Emergency Relief Authorizations Do Not Reflect Total

          * [7]The Program's Annual Demands Have Exceeded Annual Authorizat
          * [8]The Program's Annual Authorization Has Remained Level for Mo
          * [9]Emergency Relief Program Has Primarily Relied on Supplementa
          * [10]Reimbursement Backlogs Result from Fiscal Imbalance
          * [11]The Use of the Highway Trust Fund for Extraordinary Disaster
          * [12]Despite a Long-term Fiscal Imbalance and a Depleting Highway

     * [13]Changing Interpretations of Program Criteria and Congression

          * [14]Program Criteria Designed to Limit Eligibility and Funding
          * [15]Responding to the Environmental Process Has Contributed to L
          * [16]Congress Increased Project Funding beyond What the Program W
          * [17]Definition of a Disaster Has Been Expanded, and New Types of
          * [18]Congressional Action Has Increased Program Funding Commitmen
          * [19]Defining the Damage Threshold for a Site Can Affect Program

     * [20]Conclusions
     * [21]Matters for Congressional Consideration
     * [22]Recommendations for Executive Action
     * [23]Agency Comments and Our Evaluation
     * [24]GAO Contact
     * [25]Staff Acknowledgments
     * [26]GAO's Mission
     * [27]Obtaining Copies of GAO Reports and Testimony

          * [28]Order by Mail or Phone

     * [29]To Report Fraud, Waste, and Abuse in Federal Programs
     * [30]Congressional Relations
     * [31]Public Affairs

Report to Congressional Addressees

United States Government Accountability Office

GAO

February 2007

HIGHWAY EMERGENCY RELIEF

Reexamination Needed to Address Fiscal Imbalance and Long-term
Sustainability

GAO-07-245

Contents

Letter 1

Results in Brief 3
Background 7
Extraordinary Events Determine Which States Receive Most Emergency Relief
Allocations 10
Annual Emergency Relief Authorizations Do Not Reflect Total Program
Demands 13
Changing Interpretations of Program Criteria and Congressional Involvement
Have Resulted in Expanded Emergency Relief Eligibility 23
Conclusions 36
Matters for Congressional Consideration 38
Recommendations for Executive Action 38
Agency Comments and Our Evaluation 38
Appendix I Objectives, Scope, and Methodology 41
Appendix II Emergency Relief Allocations, by State, Fiscal Years 1997
through 2006 44
Appendix III Tables of Allocations by Event from Fiscal Years 1998 through
2006 46
Appendix IV Summary of Emergency Relief Program Supplemental
Appropriations 59
Appendix V Contact and Staff Acknowledgments 60

Tables

Table 1: Annual State Allocations for Ordinary and Extraordinary Events,
1998 to 2006 13
Table 2: Allocations by Event for 1998 46
Table 3: Allocations by Event for 1999 48
Table 4: Allocations by Event for 2000 49
Table 5: Allocations by Event for 2001 50
Table 6: Allocations by Event for 2002 51
Table 7: Allocations by Event for 2003 52
Table 8: Allocations by Event for 2004 53
Table 9: Allocations by Event for 2005 55
Table 10: Allocations by Event for 2006 57
Table 11: Summary Table of Annual Allocations 58

Figures

Figure 1: Total Emergency Relief Allocations, Fiscal Years 1997 through
2006 11
Figure 2: Emergency Relief Program Events with Allocations of $100 Million
or Greater Fiscal Years 1998 through 2006 12
Figure 3: Annual Allocations for Ordinary and Extraordinary Events, Fiscal
Years 1998 through 2006 15
Figure 4: Emergency Relief Annual Authorizations (Contract Authority),
Fiscal Year 1972 through 2005 16
Figure 5: Total Emergency Relief Funding, Fiscal Years 1990 through 2006
17
Figure 6: Total Emergency Relief Program Funding, Fiscal Years 1990
through 2006 18
Figure 7: Rockslide at Devil's Slide, 1998 27
Figure 8: Damage to U.S. 90 Biloxi Bay Bridge 29
Figure 9: Map of Devils Lake, North Dakota, Expansion 32

Abbreviations

CBO Congressional Budget Office
CRS Congressional Research Service
DHS Department of Homeland Security
DOT Department of Transportation
EA environmental assessment
EIS environmental impact statement
ER Emergency Relief
FEMA Federal Emergency Management Agency
FHWA Federal Highway Administration
FMIS Fiscal Management Information System
GDP gross domestic product
NEPA National Environmental Policy Act
SAFETEA-LU Safe, Accountable, Flexible, Efficient Transportation Equity
Act: A Legacy for Users
S.R. State Route
STAA Surface Transportation Assistance Act
TEA-21 Transportation Equity Act for the 21st Century

This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. However, because this
work may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this material
separately.

United States Government Accountability Office

Washington, DC 20548

February 23, 2007

Congressional Addressees

Natural disasters can claim thousands of lives, cost billions of dollars,
cross state lines, and overwhelm the capacity of state and local
governments to respond and recover. Consequently, there is a continuing
need for a federal role in responding to and recovering from natural
disasters, including those affecting the nation's highway system. The
Federal Highway Administration's (FHWA) Emergency Relief program provides
funding for states to repair or reconstruct federal-aid highways and roads
on federal lands that have been damaged or destroyed by natural disasters
or catastrophic failures from an external source.1 In addition, the
program provides emergency assistance to other federal agencies--such as
the Bureau of Land Management in the Department of the Interior--for
damage to roadways owned by the federal government. FHWA administers the
program through its 52 division offices located in each state, the
District of Columbia, and Puerto Rico.

The Emergency Relief program has been funded through the Highway Trust
Fund since the fund was created in 1956. The fund--which is financed
through motor fuel taxes and other user fees--has provided $100 million
annually in contract authority to the program each year since 1972.2 For
many years the fund held substantial surplus balances, but those balances
are steadily declining, and current estimates show that the Highway Trust
Fund could have a negative balance as early as 2009. Such a development
would adversely affect not only the Emergency Relief program, but also the
broader Federal-aid Highway program, which provides over $30 billion
annually to state and local governments to support the 1 million miles of
federal-aid roads and highways, including the 160,000-mile National
Highway System, of which the Interstate Highway System is a part. To
address concerns about the future solvency of the Highway Trust Fund,
Congress has created the National Surface Transportation Policy and
Revenue Commission. The commission is examining alternatives to replace or
supplement the motor fuel taxes as the principal revenue source to support
the Highway Trust Fund, and it plans on reporting in July 2007.

1In this report we refer to states as the 50 United States, the District
of Columbia, Puerto Rico, and U.S. territories.

2Contract authority allows federal agencies to incur obligations that will
result in the outlay of funds, to be made in advance of appropriations.

Disasters may cost FHWA significantly more than Congress provides
annually. When a series of hurricanes devastated the southeastern United
States in 2005, Congress responded by providing more than $2.7 billion in
supplemental appropriations to the Emergency Relief program. In past years
supplemental appropriations were drawn from the Highway Trust Fund, but
given the financial condition of the fund, in August 2005 Congress passed
the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A
Legacy for Users (SAFETEA-LU) authorizing additional necessary funding for
the Emergency Relief program to come from the General Fund, in excess of
the permanent $100 million that comes from the Highway Trust Fund.3
Congress provided the 2005 supplemental appropriations for the Gulf
hurricanes from the General Fund. However, looking forward, the nation
faces a long-term funding crisis. As we have reported, this pending fiscal
crisis is affecting our economy and quality of life, and requires a
fundamental reexamination of all federal programs, to assess the relevance
and purpose of the federal role and the effectiveness of federal programs.
The reexamination should raise questions such as whether a federal role is
still needed, whether the current mission is fully consistent with the
initial or updated statutory mission, or whether significant "mission
creep" has occurred. It should also assess whether programs encourage
efficient and cost-effective decision making from state and local
governments. Finally, in light of the pending fiscal crisis, a
reexamination should ask whether a program is affordable and financially
sustainable over the long term, given known cost trends, risks, and future
fiscal imbalances.

We have prepared this report under the Comptroller General's authority to
conduct evaluations on his own initiative as part of a continued effort to
assist Congress in reviewing federal activities. Specifically, we reviewed
(1) the total amount of funding allocated to the states in recent years
for emergency relief, how this allocated funding was distributed among the
states, and the events for which funding was allocated; (2) sources of
funding used to finance these Emergency Relief allocations and the
financial challenges facing the program; and (3) the scope of activities
eligible for funding and how the scope of eligible activities has changed
in recent years.

3Safe, Accountable, Flexible, Efficient Transportation Equity Act: A
Legacy for Users, Pub. L. No. 109-59, S 1937, 119 Stat. 1510 (Aug. 10,
2005).

To review the amounts of Emergency Relief funding allocated to states in
recent years, we obtained data from the FHWA Office of Infrastructure and
the FHWA Financial Management Division and from Emergency Relief program
officials. We performed a limited data reliability assessment of the
financial data and found them sufficiently reliable for our purposes.
However, FHWA's Fiscal Management Information System's (FMIS) allocation
data are only available cumulatively since program inception or for the
last 10 years and do not provide a simple way to calculate total
obligations by event. Therefore, we chose to use program allocations,
rather than obligations, to document funding. To review the sources of
funding used to finance Emergency Relief allocations, we reviewed program
legislative history to identify annual authorizations and supplemental
appropriations. We judgmentally defined disasters needing repairs costing
over $100 million as "extraordinary events" because each of them exceeded
the Emergency Relief program's $100 million per state annual allocation
limit and the program's $100 million annual program authorization. To
determine how and to what extent program eligibility has changed in recent
years, we reviewed program guidance and relevant legislation and
interviewed FHWA headquarters Emergency Relief program and Federal Lands
Highway Division officials. We also selected five states to visit
(California, Florida, Mississippi, North Dakota, and Ohio) based on
factors such as the amount of their allocations, occurrence of recent
disasters eligible for the program, presence of large Emergency Relief
projects, and geographical dispersion. During these visits we interviewed
FHWA division office and state department of transportation officials,
obtained information on the program oversight, application of program
criteria, and the approval of projects. We performed our work from May
2006 to December 2006 in accordance with generally accepted government
auditing standards. Appendix I provides a more detailed description of our
scope and methodology.

Results in Brief

From fiscal years 1997 through 2006, FHWA has allocated over $8 billion to
states through the Emergency Relief program. While 56 states and other
jurisdictions received funds during this time, FHWA allocated 70 percent
of this total to 5 states: California, Florida, Louisiana, Mississippi,
and New York. This concentration of allocated funds is mainly a result of
specific extraordinary disasters costing in excess of $100 million
affecting these states, such as Hurricane Katrina in 2005. From 1998
through 2006--the period for which FHWA has data on individual disaster
events--large, extraordinary events accounted for nearly two-thirds of the
funding allocated to the states for emergency highway repairs--about $4.1
billion of the $6.6 billion total allocated. Numerous smaller events such
as floods, landslides, and earthquakes costing less than $100 million,
have resulted in about $2.4 billion of the $6.6 billion allocated to
states during this time.

Since 1990, 86 percent of the Emergency Relief program has been funded by
supplemental appropriations because demand for the program has far
exceeded the $100 million in annual contract authority. Demand has
exceeded the $100 million annual authorization in eight of nine years from
1998 through 2006, resulting in a long-term fiscal imbalance between
available funds and eligible projects. Even if the program had only funded
smaller, ordinary events--those needing under $100 million in funding--the
$100 million annual authorization would still have fallen far short of
meeting the $271 million average annual funding need for repairing the
damaged roads from 1998 through 2006.4 In part, these shortfalls are due
to the fact that the program has been funded at a constant $100 million
level since 1972. As a result, current real funding is worth about
one-fourth the 1972 level. Since 1990, Congress has responded to the
additional funding demands by providing supplemental appropriations.
However, because Congress has not always appropriated supplements to the
Emergency Relief program on an annual basis, and because demand for funds
has outstripped funding, backlogs for reimbursements---reaching $740
million in 2004--have emerged. Reimbursement backlogs can tie up available
state highway dollars because states often use other highway dollars to
pay for Emergency Relief projects while awaiting reimbursement. As a
result, these backlogs may also affect the timely construction and repair
of road facilities, particularly in states with small highway budgets.
Given the expected demands of future disasters, these backlogs and
resulting fiscal imbalance, along with the need for supplemental funding,
are likely to continue. Until Hurricane Katrina, Congress provided
supplemental funding through the Highway Trust Fund, but Trust Fund
balances are projected to decline steadily from 2006 through 2011. In 2005
Congress passed SAFETEA-LU, limiting the Highway Trust Fund portion of the
Emergency Relief program to $100 million and authorizing such sums as may
be needed above the $100 million from the General Fund. However, the
nation faces a more general long-term fiscal crisis, making the use of
general funds for the Emergency Relief program problematic, raising
significant questions about the long-term sustainability of the program.
Finally, despite the program's fiscal imbalance and the depletion of the
Highway Trust Fund, FHWA is not recapturing unused program funds and
reallocating them to states with immediate program needs, as stated in the
Emergency Relief Manual. FHWA does not annually review the program's
existing obligated and unobligated balances to identify potentially
unneeded funds--we estimate the balance of inactive obligated funds to be
close to $158 million. We also identified potentially unneeded allocations
from specific past disasters that could be recaptured for the Highway
Trust Fund, including $62 million originally appropriated for California
earthquakes that took place in 1989 and 1994. By law these funds are
dedicated to projects related to the earthquakes and therefore need
congressional action to be reallocated. However, these inactive funds and
balances of past allocations are not sufficient to place the program on a
sound financial footing.

4FHWA has allocation data for individual events dating back only to 1998.

Contributing to the fiscal imbalance and concerns about long-term
sustainability of the program have been the gradual expansion of
eligibility criteria and congressional action to increase funding for
certain projects or disasters above what the program would ordinarily
provide. Congress established the Emergency Relief program to fund the
repair or reconstruction of federal-aid highways and roads on federal
lands that have suffered serious damage as a result of natural disasters
or catastrophic failures due to external causes. The typical project
accomplished through the Emergency Relief program is repair or restoration
of a highway to predisaster conditions. Emergency Relief funds are not
intended to replace other federal-aid, state, or local funds to increase
capacity, correct nondisaster-related deficiencies, or make other
improvements. Yet we identified several projects funded by the Emergency
Relief program that demonstrate the gradual expansion of eligibility
criteria or congressional direction to increase program funding. For
example:

           o The program has funded several large projects that go beyond
           restoration--projects with scope and costs that have grown as a
           result of environmental and community concerns, such as the $811
           million Cypress Viaduct and the $441 million Devil's Slide project
           in California, both of which involve the relocation of the
           highway.
           o Congress has sometimes directed that the Emergency Relief
           program provide funding for replacement projects beyond the normal
           federal cost share for federal-aid highway projects, or beyond
           what FHWA would have funded to repair the damaged facility. For
           example, Congress funded the $245 million Escambia Bay Bridge
           project in Florida, which was replaced rather than repaired, as
           was possible, and Congress funded the project at the replacement
           cost rather than the repair cost. In addition, Congress and FHWA
           have expanded the definition of eligible disasters and added to
           the types of work that can be funded under the program to allow a
           gradual and predictable basin flooding event in North Dakota to be
           eligible for Emergency Relief funds.
           o For certain disasters, Congress has waived the requirement for
           states to provide a share of the funding for Emergency Relief
           projects, or it has waived the program limit on the amount of
           funding that could be provided to any one state.

           Also, FHWA has inconsistently applied the minimum eligibility
           threshold defined in its Emergency Relief Manual. Specifically,
           while FHWA has a criterion of $5,000 damage per site to meet the
           minimum eligibility threshold, we found that different FHWA
           offices had different interpretations of what constituted a site.
           For example, some FHWA offices designated entire counties as
           sites, while others did not. Thus damage sites that were eligible
           for Emergency Relief in one state may have not been eligible in
           another, potentially affecting whether or not the state qualified
           for Emergency Relief program funding, as well as the cost to the
           program.

           We are suggesting that Congress consider the expected future
           demands on the program and reexamine the appropriate level and
           sources of funding--including whether to increase the $100 million
           annual authorized funding and whether the Highway Trust Fund, the
           General Fund, or some combination would allow the program to
           accomplish its purpose in a fiscally sustainable manner. Congress
           should also consider tightening the eligibility criteria for
           Emergency Relief funding, either through amending the purpose of
           the Emergency Relief program or by directing FHWA to revise its
           program regulations. Revised criteria could include limitations on
           the use of Emergency Relief funds to fully finance projects with
           scope and costs that have grown as a result of environmental and
           community concerns.

           We are also recommending that the Secretary of Transportation
           direct FHWA to, within the scope of its authority, revise its
           emergency relief regulations to tighten the eligibility criteria
           for Emergency Relief funding. Revised criteria could include
           limitations on the use of Emergency Relief funds to fully finance
           projects with scope and costs that have grown as a result of
           environmental and community concerns. FHWA should also clarify its
           Emergency Relief Manual to better define a site and whether under
           certain circumstances variations from the basic definition are
           permitted. Finally, FHWA should identify unexpended obligated and
           unobligated Emergency Relief funds that will not be needed for
           projects, withdraw the unneeded amounts, and determine if they are
           needed for other eligible projects. In the event these funds are
           not needed for other eligible projects, FHWA should identify these
           funds to Congress for rescission or to offset future
           appropriations. FHWA also should identify for rescission
           unexpended funds that have been directed to specific disasters
           when those funds are no longer needed. In commenting on a draft of
           this report, the Department of Transportation (DOT) generally
           agreed with the facts presented but took no position on our
           recommendations. DOT also provided technical comments, which we
           incorporated into this report as appropriate.
			  
			  Background

           Congress authorized the Emergency Relief program in Title 23,
           United States Code, Section 125, to provide for the repair or
           reconstruction of federal-aid highways and roads on federal lands
           that have sustained serious damage resulting from natural
           disasters or catastrophic failures from an external cause. Natural
           disasters such as floods, hurricanes, earthquakes, tornadoes,
           tsunamis, severe storms, or landslides all potentially qualify
           under the program. Catastrophic failure refers to the sudden and
           complete failure of a major element or segment of the highway
           system that causes a disastrous impact on transportation. This is
           a long-established federal function--Congress has provided funds
           for this purpose since at least 1928, and an Emergency Relief
           program has existed since 1956.

           The program supplements the resources of states and federal
           agencies to help pay for unusually heavy expenses that result from
           extraordinary conditions. The program provides states, and Puerto
           Rico, the District of Columbia, and territories, with funding
           above and beyond their regular federal-aid highway funding.5
           FHWA's division offices in each state administer the program, and
           states implement the projects. The division offices process state
           highway agencies' applications for funding and make decisions on
           the eligibility of specific projects. Regulations currently define
           eligible disasters as those where the cost of damage would exceed
           $700,000 in program assistance in any state for a given disaster.
           The $700,000 threshold includes the damage cost for all damage
           sites resulting from the disaster. According to FHWA guidance,
           each prospective damage site must have at least $5,000 of repair
           costs to qualify for funding---a threshold intended to distinguish
           emergency relief work from maintenance.

           By law, FHWA can provide a state with up to $100 million in
           Emergency Relief funding for each natural disaster found eligible
           for funding.6 However, Congress has passed special legislation
           lifting this cap for specific disasters. The Emergency Relief
           program is currently authorized at $100 million annually out of
           the Highway Trust Fund, and FHWA allocates these funds to states
           based on the states' proportion of the total costs of all eligible
           projects. For example, if a state had 10 percent of the total
           estimated reimbursable costs for all Emergency Relief projects
           nationwide, that state would receive 10 percent of the available
           Emergency Relief funds. As with other FHWA programs, funding is
           provided to the states on a reimbursable basis. If Emergency
           Relief funds are not available, states may use other appropriate
           federal-aid program funds to initially pay for projects while
           awaiting reimbursement from the Emergency Relief program.

           The program's regulations make a distinction between emergency and
           permanent repairs. Emergency repairs are to quickly restore
           essential highway traffic service and protect remaining
           facilities, and include such things as debris removal,
           construction of detours, regrading, and temporary structures.
           Permanent repairs restore seriously damaged highway facilities to
           predisaster conditions. In some instances, such as the destruction
           of a bridge, the complete replacement of the facility may be
           needed. In these cases the facility would be rebuilt to current
           design standards. By statute, the Emergency Relief program may
           fund up to 100 percent of emergency repair project costs within
           the first 180 days following the disaster.7 The program funds
           permanent repair projects, and emergency repair project costs
           after the first 180 days, at the percentage normally provided for
           work on that type of federal-aid highway. For example, the federal
           share for interstate highway projects is 90 percent of the cost,
           and the federal share for most other federal projects is 80
           percent.

           Emergency Relief program regulations state that the program is not
           intended to fund the correction of preexisting nondisaster-related
           deficiencies. Additionally, the program is not intended to pay for
           "betterments" that change the function or character of the highway
           facility, such as expanding the capacity of roads. However,
           betterments are eligible for program funding if they pass a
           benefit-cost test that weighs their cost against the prospective
           cost to the Emergency Relief program for future repairs.
           Additionally, where it is not feasible to repair or replace an
           existing highway facility at its existing location, an alternative
           selected through the National Environmental Policy Act (NEPA)8
           process, if comparable to the destroyed facility, is eligible for
           Emergency Relief funding. Except when betterments are justified,
           or when a relocation results from the NEPA process, program
           regulations state the cost of a project eligible for Emergency
           Relief may not exceed the cost of repair or reconstruction of a
           comparable facility.

           In addition to providing funds to the states, the Emergency Relief
           program also provides funding for the repair of roads on federal
           lands through the Emergency Relief for Federally-Owned Roads
           program. This program is intended for unusually heavy expenses
           associated with the repair and reconstruction of federal roads and
           bridges seriously damaged by a natural disaster or a catastrophic
           failure. FHWA's Federal Lands Highway Division maintains, through
           interagency agreements, oversight of the Emergency Relief funds
           for projects administered by various federal agencies, including
           the Department of Defense, Army Corps of Engineers, U.S. Forest
           Service, National Park Service, Fish and Wildlife Service, Bureau
           of Reclamation, Bureau of Land Management, and Bureau of Indian
           Affairs. The program may fund 100 percent of the cost of repairs
           to federal roads.

           FHWA's Emergency Relief program is one of a number of federal
           programs and activities that provide major disaster and emergency
           assistance to states and local governments. The Robert T. Stafford
           Disaster Relief and Emergency Assistance Act primarily establishes
           the programs and processes for the federal government to provide
           major disaster and emergency assistance--upon a governor's
           request, the President can declare an "emergency" or a "major
           disaster" under the Stafford Act, triggering various emergency
           response activities such as debris removal, temporary housing
           assistance, and the distribution of medicine, food, and other
           consumables. The Federal Emergency Management Agency (FEMA), an
           agency of the Department of Homeland Security (DHS), is the agency
           responsible for administering the Stafford Act. As part of its
           responsibilities, FEMA provides funds to state and local
           governments to repair and replace roads damaged as a result of
           disasters that are not on the federal-aid highway system.9 Funding
           for FEMA disaster relief is drawn from the General Fund of the
           Treasury.
			  
			  Extraordinary Events Determine Which States Receive Most Emergency
			  Relief Allocations

           During the 10-year period 1997 through 2006, FHWA has allocated
           over $8 billion to the states, the District of Columbia, Puerto
           Rico, U.S. territories, and other federal agencies to repair or
           replace highway facilities damaged by natural or man-made events.
           Of this total, 70 percent has gone to five especially hard-hit
           states that have experienced extraordinary or multiple
           disasters--California, Florida, Louisiana, Mississippi, and New
           York. For the 9-year period from 1998 through 2006, the time frame
           for which FHWA has data on individual disaster events, these very
           large events account for most of the financial demands on the
           program, a total of about $4.1 billion of the $6.6 billion
           allocated in that time frame. In addition, the large number of
           smaller events that occurred each year accounted for about $2.4
           billion in demands since 1998.
			  
			  States Experiencing Extraordinary Disasters Received Majority of
			  Emergency Relief Funds

           For some states that have experienced major or repeated disasters,
           the Emergency Relief program has provided a significant amount of
           funding. This funding has been generally concentrated in a small
           number of states. During the 10-year period 1997 through 2006,
           FHWA has allocated over $8 billion to states. (See app. II for a
           detailed list of state Emergency Relief allocations). Of this
           amount, about 70 percent of all Emergency Relief allocations went
           to five states--California (about $1.4 billion, or 18 percent),
           Florida (about $1.6 billion, or 20 percent), Louisiana (about $1.2
           billion, or 15 percent), Mississippi (about $1 billion, or 13
           percent) and New York (about $352 million, or 4 percent). (See
           fig. 1.) Since the beginning of the program, all 50 states, the
           District of Columbia, Puerto Rico, and U.S. territories all have
           received some FHWA Emergency Relief funds.

           Figure 1: Total Emergency Relief Allocations, Fiscal Years 1997
           through 2006
			  
			  The Emergency Relief Program Has Experienced Increased Demand
			  due to Extraordinary Events.

           The majority of Emergency Relief program funding for the 9-year
           period of 1998 through 2006, the time frame for which FHWA had
           data on individual disaster events, has gone to 5 states as a
           result of series of extraordinary disasters including the World
           Trade Center terrorist attacks, Florida's 2004 hurricanes, and
           Hurricanes Katrina and Rita, among others. These very large events
           have each totaled from over $100 million to over $1 billion, as
           figure 2 illustrates.

5Through the many programs included under the umbrella of the Federal-aid
Highway Program, FHWA provides approximately $30 billion per year to state
and local governments for constructing, preserving, and improving the
National Highway System and other federal-aid highways.

6The criteria for administering Emergency Relief funds are set out in 23
C.F.R. Part 668.

723 U.S.C. sec. 120(e) (2006).

8The National Environmental Policy Act of 1969 requires federal agencies
to assess the environmental impacts of their programs and actions. As a
condition for receiving federal funds for highway projects, state
departments of transportation must also comply with NEPA.

9These activities are conducted under FEMA's Public Assistance Program, as
first authorized under the Stafford Act, Pub. L. No. 93-288, 88 Stat. 143
(May 22, 1974) (current version at 42 U.S.C. S 5172). Under this program,
the federal share is not less than 75 percent of costs.

Figure 2: Emergency Relief Program Events with Allocations of $100 Million
or Greater Fiscal Years 1998 through 2006

These very large disasters can be considered extraordinary events in the
context of the Emergency Relief program because each of them exceeded the
$100 million annual program authorization. Also, individual events
exceeding $100 million in Emergency Relief allocations to a state require
congressional legislation that exempts the state from the statutory
limitation that no state may receive more than $100 million in Emergency
Relief funds in 1 year for any single event.

Over time, these individual extraordinary disasters have placed greater
financial demands on the Emergency Relief program than the numerous
smaller eligible events that occur each year. During the 9-year period
1998 through 2006 extraordinary events resulted in about $4.14 billion in
allocations to states (see table 1). Over the same period, smaller events,
those requiring less than $100 million, required about $2.44 billion in
emergency relief funding, or an average of $271 million per year. The
allocations needed for smaller events may be thought of as a baseline cost
for the program, the amount that was needed assuming no extraordinary
event occurred. Because the program's annual authorization was set at $100
million during this period, the annual funding covered about 37 percent of
what may be considered the baseline costs of the program during this
period.

Table 1: Annual State Allocations for Ordinary and Extraordinary Events,
1998 to 2006

          Number                                       Total  Total                
              of Total ordinary     Number of  extraordinary number                
        ordinary          event extraordinary          event     of          Total 
Year      events    allocations        events    allocations events    allocations 
1998          43   $346,003,591             0              0     43   $346,003,591 
1999          31    218,618,630             0              0     31    218,618,630 
2000          13     92,085,847             0              0     13     92,085,847 
2001          26    271,825,473             1   $242,000,000     26    513,825,473 
2002          22    127,918,797             0              0     22    127,918,797 
2003          31    264,539,510             0              0     31    264,539,510 
2004          43    502,500,740             4    928,376,031     47  1,430,876,771 
2005          33    418,350,335             4  2,487,926,621     37  2,906,276,956 
2006          23    197,092,432             1    478,000,000     24    775,092,432 
Total        264 $2,437,439,355            10 $4,136,302,652    274 $6,573,742,007 
Average       29   $270,826,595             1   $459,589,183     30   $730,415,779 

Source: FHWA.

Finally, another measure of the program's funding need is the average
allocation per individual disaster event. Under FHWA's classification,
events are defined as disasters causing a federal share of at least
$700,000 damage to a state, with each state counted separately. Thus,
Hurricane Katrina, which reached this level of damage for four states,
counts as four events for the program, one each for Alabama, Florida,
Louisiana, and Mississippi. From 1998 through 2006, the number of events
per year varied from 13 to 47, and the median allocation per event was
about $3.7 million.10 Appendix III provides a detailed list of event
allocations from fiscal years 1998 through 2006.

Annual Emergency Relief Authorizations Do Not Reflect Total Program Demands

In recent years, annual demands on the Emergency Relief program have
exceeded the $100 million annual authorization, resulting in a long-term
fiscal imbalance and reliance on supplemental appropriations. More
specifically, on average the program's needed allocations for ordinary
events--disaster events requiring under $100 million in federal
funding--are 2.7 times the annual authorization. One reason for this
funding shortfall is the program's static funding level, which has
remained the same since 1972. Since 1990, the program has often relied on
supplemental appropriations to make up for the funding shortfall, but
because these supplemental funds are not provided on an annual basis, the
program has experienced a fiscal imbalance, resulting in funding
reimbursement backlogs that have placed a burden on some states.
Furthermore, demands for Emergency Relief program funding may place a
burden on the Highway Trust Fund, unless alternative funding is used.
Despite the program's long-term fiscal imbalance and a depleting Highway
Trust Fund, FHWA is not recapturing unused program funds.

10Because of the extraordinary disasters, the average (mean) cost per
event during this period was much higher--about $23.9 million.

The Program's Annual Demands Have Exceeded Annual Authorizations

FHWA has allocated over $8 billion between fiscal years 1997 and 2006 to
meet annual demand for the Emergency Relief program. This is an average of
over $800 million a year for all events, which is significantly more than
the program's $100 million annual authorization. Funding needs for
extraordinary events--those events needing more than $100 million in
funding--have averaged about $460 million annually since 1998, the
earliest year for which FHWA has data on individual disaster events.
Furthermore, annual demand for ordinary events--those events totaling less
than $100 million--is also more than the $100 million annual
authorization. As mentioned earlier, for fiscal years 1998 through 2006
the average annual funding need for ordinary events was $271 million (see
fig. 3). This has resulted in an annual deficit between program demands
and program funding.

Figure 3: Annual Allocations for Ordinary and Extraordinary Events, Fiscal
Years 1998 through 2006

The Program's Annual Authorization Has Remained Level for More than 30 Years

One reason for the shortfall between program funding and demand is the
program's static annual authorization. The Emergency Relief program has
been funded with an annual authorization of $100 million through contract
authority from the Highway Trust Fund, with a $100 million per event
obligation limit imposed since 1972. However, after adjusting for
inflation, the value of the annual authorization has decreased
significantly over time, resulting in program demands exceeding annual
program funding. The fiscal year 2005 authorization of $100 million is the
equivalent of $26.4 million in 1972 dollars (see fig. 4). Stated
differently, the $100 million annual authorization initiated in 1972 would
need to be increased to over $378 million to have the same value in real
(2005) dollars. Funding at the $378 million level would be more than
sufficient to pay for the average annual cost of ordinary events from
fiscal years 1998 through 2006--about $271 million in real (2005) dollars.

Figure 4: Emergency Relief Annual Authorizations (Contract Authority),
Fiscal Year 1972 through 2005

Emergency Relief Program Has Primarily Relied on Supplemental Appropriations

Since 1990, the Emergency Relief program has frequently relied on
supplemental appropriations to make up for the fiscal imbalance created by
a static authorization coupled with additional program demand from
extraordinary events (see fig. 5). In total, from fiscal years 1990
through 2006, Congress provided about $12.3 billion for the Emergency
Relief program when including both annual authorizations and supplemental
appropriations. As a result, a large majority of the funds--$10.6 billion,
or 86 percent of the total during this period--have come through
supplemental appropriations.

Figure 5: Total Emergency Relief Funding, Fiscal Years 1990 through 2006

There has been a consistent shortfall between the static $100 million
annual authorization and the actual amounts needed for the Emergency
Relief program (see fig. 6). As a result, between fiscal years 1990 and
2006, Congress passed supplemental appropriations for the Emergency Relief
program 15 times. Historically the supplemental funds were drawn from the
Highway Trust Fund which at the time had accumulated large balances.
However, the Highway Trust Fund authorization is limited to $100 million,
and under SAFETEA-LU, additional supplemental funds are to be appropriated
from the General Fund. The fiscal year 2006 Emergency Relief program
supplemental appropriations were taken from the General Fund as the
Highway Trust Fund balances have diminished. Appendix IV provides a
detailed list of supplemental appropriations from fiscal year 1990 through
2006.

Figure 6: Total Emergency Relief Program Funding, Fiscal Years 1990
through 2006

Reimbursement Backlogs Result from Fiscal Imbalance

The Emergency Relief program has experienced reimbursement backlogs in
recent years---reaching as high as $741 million dollars in 2004--as a
result of program demands from extraordinary events, declining real
funding, and periodic supplemental appropriations. When nationwide
Emergency Relief needs exceed available Emergency Relief funding, FHWA
allocates the $100 million annual authorization proportionally to the
states based on the ratio of the total available Emergency Relief funding
to the total Emergency Relief needs. For example, if there are sufficient
funds to pay for half of the approved allocations, all states receive half
of the funds they requested. According to FHWA officials, once program
funds are exhausted, states with eligible projects are placed on a
reimbursement backlog list, which may build up over several years. As
program funds become available with each new annual authorization, FHWA
allocates the funds based on the reimbursement backlog list. States may
provisionally utilize other federal-aid program funds to pay for projects
while awaiting reimbursement from the Emergency Relief program. When
Congress has provided the program with supplemental appropriations for
extraordinary events, it has often included supplemental funds intended to
clear the program's accumulated backlog. However, according to FHWA
officials, in the interim, when Congress does not provide supplemental
appropriations to clear accumulated backlogs, states go without full
reimbursement. While, according to FHWA officials, FHWA financial
management systems do not track reimbursement backlogs, congressional
conference reports reference reimbursement backlogs dating back as far as
fiscal year 1997, with balances ranging from $259 million to $741 million.

Reimbursement backlogs may tie up available state highway dollars and
affect the timely construction and repair of road facilities. In order to
prevent delays some state and local governments may borrow money to pay
Emergency Relief program project costs, while other states may delay other
planned nonemergency-related highway projects or delay permanent Emergency
Relief program projects. During our site visits, we heard examples of the
effects of reimbursement backlogs on the states we visited. For example,
in North Dakota, state officials told us that one local government had
delayed permanent Emergency Relief program road repairs until
reimbursement funding became available. State officials in Mississippi
delayed some regular federal-aid highway projects in order to fund
Hurricane Katrina-related Emergency Relief projects while waiting for
supplemental appropriations to provide reimbursement funding. Mississippi
officials also stated that these regular state and federal-aid highway
projects were delayed until Emergency Relief reimbursements were received.
In addition, Mississippi officials told us that they also utilized an
established line of credit to fund some Emergency Relief projects and
maintain some of their other planned projects while awaiting Emergency
Relief reimbursement. Similar to the states we visited, federal land
management agencies may also be affected by reimbursement backlogs. FHWA
officials told us that on several occasions, federal land management
agencies delayed initiating a needed repair because of lack of
reimbursement funding. FHWA officials also told us that federal land
management agencies are particularly burdened because they do not have
highway infrastructure funding streams comparable to those of states. In
almost all of our site visits, program officials stated that the Emergency
Relief program's reimbursement backlogs (i.e., delayed reimbursements) are
a fiscal burden on state and local governments. This can be particularly
true for states with smaller highway budgets, such as Mississippi and
North Dakota, which may have less available highway funds to utilize while
experiencing reimbursement delays than other states.

The Use of the Highway Trust Fund for Extraordinary Disasters May Not Be
Sustainable Given Current Projections, and the General Fund Faces a Fiscal
Crisis

Estimates from both the Congressional Budget Office (CBO) and the
President's budget project the steady decline of the Highway Trust Fund
balance, as estimated outlays exceed estimated revenues each year for 2006
through 2011. According to CBO, the uncertainty associated with Highway
Trust Fund estimates implies that the Highway Trust Fund could exhaust its
resources before the anticipated 2009 date.11 Because it is not possible
to anticipate supplemental appropriations, depending on how future
emergencies are funded, the Highway Trust Fund's future demand projections
may not fully reflect the Emergency Relief program's future effect on the
fund. Furthermore, future demand for a program driven by unpredictable
events is necessarily uncertain.

The results of the Highway Trust Fund's declining balance can be seen in
the two most recent supplemental appropriations to the Emergency Relief
program. In the past, because the Highway Trust Fund maintained
significant unexpended balances, the Emergency Relief program's
supplemental appropriations have been funded through the Highway Trust
Fund. SAFETEA-LU designated the General Fund as the source for additional
Emergency Relief funds, and the most recent two supplemental
appropriations, passed in December 2005 and June 2006 to cover Hurricane
Katrina costs and backlogged projects, have come from the General Fund.
The change is at least in part due to the financial uncertainty of the
Highway Trust Fund. According to the Congressional Research Service (CRS),
because of the declining Highway Trust Fund balance, using the Highway
Trust Fund for the Hurricane Katrina Emergency Relief supplemental
appropriations would have constrained the ability of the Highway Trust
Fund to fully fund the SAFETEA-LU-authorized highway programs over the
life of the authorization. For these reasons, it was doubtful that the
Highway Trust Fund could fund other large future Emergency Relief program
supplemental appropriation needs. Under the Highway Trust Fund's current
structure, the historic pattern of funding major Emergency Relief projects
from the trust fund is no longer sustainable.

However, the alternative used in the most recent appropriations, the
General Fund, also faces future demands that will place severe pressures
on all discretionary programs, including those that fund transportation.
Our simulations show that by 2040, revenues to the federal government
might barely cover interest on the debt--leaving no money for either
mandatory or discretionary programs--and that balancing the budget could
require cutting federal spending by as much as 60 percent, raising taxes
by up to 2 1/2 times their current level, or some combination of the two.
This impending fiscal crisis means that it will be difficult to fund
extraordinary highway disaster needs for highway repairs and for other
programs from this source.

11Annual spending from the Highway Trust Fund is largely controlled by
limits on the amount of contract authority that can be obligated in a
particular year. Such obligation limitations are customarily set by
Congress in appropriation acts. CBO baseline projections of outlays for
the Highway Trust Fund assume that policymakers will continue to control
spending through obligation limitations set in annual appropriation acts.

Despite a Long-term Fiscal Imbalance and a Depleting Highway Trust Fund, FHWA
Has Not Been Recapturing Unused Program Funds

While the Emergency Relief program has experienced a fiscal imbalance,
FHWA officials do not routinely recapture unused funds. These unused funds
may come from (1) unobligated balances available to the states, (2)
obligated balances where the funds are no longer needed to complete
projects, or (3) funds Congress has directed to specific disasters that
remain available after the projects are completed. FHWA officials
explained that states may retain these unused Emergency Relief obligations
after projects are completed, and those funds can be used for future
disasters in the state. However, while states with completed projects
retain these unused obligations for future disasters, other states with
immediate Emergency Relief needs may experience a reimbursement backlog.

While FHWA officials said they are currently beginning to identify
state-obligated funds that show no activity for a given time period, the
agency has not moved to recoup unneeded funds. FHWA's Office of Financial
Management can query program data to identify federal-aid contracts with
obligated funds where there has been no expenditure or payment activity
for 1 year, or 2, or more. Our analysis of FHWA financial data found there
to be over $158 million in inactive unexpended balances from Emergency
Relief program allocations between fiscal years 1985 and 2006. Program
officials acknowledge that allowing states to hold on to inactive
unexpended balances to pay for future events enables states to bypass any
backlog queue and fund their projects before older projects in other
states are addressed. However, the amounts that could be recaptured from
these sources are too small to put the program on a solid financial
footing.

In addition, the Emergency Relief Manual states that FHWA headquarters
officials should coordinate with FHWA division officials to identify
unobligated Emergency Relief balances that states will not use by the end
of the following fiscal year and reallocate these funds to states with
immediate Emergency Relief funding needs. Unobligated funds may occur when
a state's estimated need for a disaster exceed actual project costs. The
practice of identifying and reallocating unobligated funds is intended to
avoid accumulating a large balance of allocated but unobligated Emergency
Relief funds and to help manage available funds nationwide as effectively
as possible. Emergency Relief program officials told us that identifying
unneeded unobligated balances is difficult and there has not been a
specific effort to identify these funds in recent years. According to FHWA
officials, these funds may remain because projects have not been completed
or have not fully utilized available program funds at the close of the
fiscal year. The unobligated balance at the end of fiscal year 2006, which
includes funding for the 2005 Gulf hurricanes and other funds yet to be
obligated for ongoing projects, was over $1.8 billion.12

Finally, events with designated supplemental appropriations may have
remaining funds that cannot be used for any other disaster. Congress has
on occasion provided a supplemental appropriation to the Emergency Relief
program with designated funds to be used for specific disasters. It has
done so for disasters such as the Loma Prieta earthquake, Hurricane
Andrew, the attacks on the World Trade Center, and Hurricane Katrina.
Unless specifically worded otherwise, these funds cannot be recaptured by
FHWA and used for other Emergency Relief disasters. Congress has more
recently used language that allows for unused designated funds to be used
for other approved Emergency Relief projects. However, this language was
not always used in the past and has resulted in unneeded balances that
cannot be recaptured by FHWA. As a result, these balances remain
unexpended unless the state uses the funds for additional work related to
damage from the disaster.

During our site visit to California, we found the state still has $62
million in obligated but unexpended Emergency Relief funds designated for
the 1989 Loma Prieta and 1994 Northridge earthquakes. It is unlikely that
most of these funds, particularly those for the Northridge earthquake,
will be needed for additional work, according to California Department of
Transportation (Caltrans) officials. However, these funds remain at the
state level, and barring a rescission by Congress, remain available until
expended. Given that these events took place 17 and 12 years ago
respectively, the emergencies have long since passed, and it is reasonable
to expect related emergency projects to be complete. Moreover, because the
damage occurred on the federal-aid system, the state could still use its
normal federal-aid highway funding to pay for any small residual cost, if
the need arose. For these reasons, these funds are potentially available
for rescission.

12This is the cumulative unobligated balance of Emergency Relief program
funds from fiscal years 1997 through 2006. This does not include
unobligated balances from the Federal Lands projects which are not
maintained in FMIS.

Changing Interpretations of Program Criteria and Congressional Involvement Have
Resulted in Expanded Emergency Relief Eligibility

The expansion of program eligibility criteria to fund larger and more
costly projects and congressional action to increase funding for certain
projects or disasters above what the program would ordinarily provide have
both contributed to the fiscal imbalance and concerns about long-term
sustainability of the program. Law and regulations define qualifying
criteria for disaster events, and link the federal share of funding under
the Emergency Relief program to the share of funding provided under other
federal-aid highway programs. However, environmental requirements,
community concerns, congressional direction, and unique localized
circumstances have increased the scope and costs of projects, increased
the portion of project costs funded by the program, expanded the
definition of program-eligible events, and resulted in projects that go
beyond the original intent of the program. These include instances that go
beyond restoration, involve replacement rather than repairs, entail
expansion of the type of work that the program may fund, or involve
waivers of the federal match.

Program Criteria Designed to Limit Eligibility and Funding

Emergency Relief program regulations define disaster events that qualify
for program funding--and set criteria for projects that can be
funded--which help contain program expenditures. For instance, regulations
define eligible events as natural disasters--sudden and unusual natural
occurrences, such as floods, hurricanes, landslides, and earthquakes--and
catastrophic failures--the failure of a major segment of a highway due to
an external cause. Additionally, the program is not intended to supplant
other federal or state funds for correction of preexisting
nondisaster-related deficiencies. It is expected that restoration to
predisaster conditions will be the typical type of repair accomplished
through the Emergency Relief program.

FHWA's Emergency Relief program regulations limit the types of work that
are eligible for program funding. The regulations state that
betterments--additional features or improvements that change the function
or character of the highway facility--are eligible for funding only if
they are economically justified. That is, when the cost of the betterment
is weighed against the risk of recurring damage that would be eligible for
Emergency Relief funding and the cost of future repairs. The regulations
also state that except for those cases where betterments are justified,
the total cost of a project eligible for Emergency Relief funding may not
exceed the cost to repair or reconstruct a comparable facility. However,
where it is not feasible to repair or replace an existing highway facility
at its existing location, an alternative selected through the NEPA
process, if comparable to the destroyed facility, is eligible for
Emergency Relief funding.

Emergency Relief program regulations also establish various dollar-limit
criteria that define program eligibility and funding for an affected
state. By law, FHWA can provide a state with up to $100 million in
Emergency Relief funding for each natural disaster found eligible for
funding.13 Also, each prospective damage site must have at least $5,000 of
repair costs to qualify for funding---a threshold intended to distinguish
emergency relief work from maintenance.

Responding to the Environmental Process Has Contributed to Larger Projects

Some emergency relief projects require a comprehensive environmental
review, and when such reviews take place, the project may expand
significantly in scope and cost. Repair projects funded under the
Emergency Relief program, like other federal-aid highway projects, must
comply with the requirements of NEPA. NEPA, which applies to all federal
agencies, and to states receiving federal funding, requires an assessment
of the environmental impact of federal programs and actions. Emergency
repair projects to restore existing facilities qualify as "categorical
exclusions" under NEPA, and normally do not require any further
environmental study or mitigation.14 However, large projects such as
replacing a bridge or relocating a length of roadway that has been
destroyed can trigger a need for more extensive review---an environmental
impact statement (EIS) or an environmental assessment (EA). An
environmental impact statement presents a range of proposed alternatives
for a project and analyzes the cumulative effects of each. The EIS process
also requires public notice of relevant hearings and meetings, and the
draft and final EIS are made available for public comment. An
environmental assessment may be required for a project that does not
clearly qualify as a categorical exclusion or clearly require an EIS. The
environmental assessment process concludes with either a finding of no
significant impact or a decision that an EIS is required. The process of
completing an EIS can result in a finding that replacing the destroyed
facility at the same site is not possible, and that a more costly
relocation that addresses environmental or community concerns is needed.
The NEPA process addresses environmental issues, but the hearings that are
part of the process allow the public and other interested parties to raise
other concerns.

13The criteria for administering Emergency Relief funds are set out in 23
C.F.R. Section 668.

14Categorical exclusions are actions that do not involve significant
environmental impacts. Under FHWA regulations for implementing NEPA (23
C.F.R. 771.117) emergency repairs qualify as categorical exclusions.

The need to address both public concerns and the NEPA process has resulted
in the Emergency Relief program funding larger and more costly projects
than it might have otherwise approved under the Emergency Relief program.
One such project followed the Loma Prieta earthquake. In October 1989, the
Loma Prieta earthquake struck northern California, collapsing a two-tiered
portion of Interstate 880 through Oakland known as the Cypress Viaduct.
Immediately after the earthquake, FHWA and Caltrans planned to replace the
Cypress Viaduct as it existed prior to the earthquake, and FHWA prepared a
cost estimate of $306 million. However, this route had divided an Oakland
neighborhood, and opposition from residents and the city government led
Caltrans to consider several alternative alignments. Because of the size
and complexity of these alternatives, an environmental impact statement
was required. After completion of the EIS in 1992, Caltrans selected an
alignment that replaced the original 1.5-mile structure with a 5-mile
structure that circumvented the neighborhood.

GAO reported on the status of this project in May 1996.15 As we noted
then, the Emergency Relief program regulations allow for funding
betterments--such as relocation, replacement, upgrades, or added
features--only when they are economically justified to prevent recurring
damage.16 Although the Cypress Viaduct relocation involved a significantly
different design with more extensive construction and higher costs, FHWA
officials approved the relocation based on the results of an EIS, and did
not consider the project a betterment. Therefore, Emergency Relief program
regulations, which place limits on funding improvements or changes in the
character of a destroyed facility, were not applicable. Emergency Relief
funding for the relocated Cypress Viaduct was approved without (1) making
a finding that relocation was economically justified to prevent recurring
damage, or (2) placing limits on the use of Emergency Relief funds. The
project was carried out as a permanent restoration project and completed
in 1998 with the Emergency Relief program funding approximately $811
million of the more than $1.0 billion project cost.

15GAO, Emergency Relief: Status of the Replacement of the Cypress Viaduct,
[32]GAO/RCED-96-136 (Washington, D.C.: May 6, 1996).

16The Emergency Relief program regulations were amended in the year 2000,
to state that where it was not feasible to replace a damaged highway in an
existing location, an alternative selected through the NEPA process would
be eligible for Emergency Relief program funding.

In another case, the environmental review process led to the Emergency
Relief program funding a very large project to relocate a section of a
cliff-side highway that has been frequently closed by slides. The cost of
this project will also exceed the recent costs to the Emergency Relief
program of keeping the current highway open. The Devil's Slide area in
California is a formation of steep, geologically unstable cliffs on the
Pacific coast, south of San Francisco. State Route 1 (S.R.1), originally
constructed in 1937, runs along the coast at the base of Devil's Slide,
and has long been subject to recurring rock slides. From 1982 to the
present there have been three significant Devil's Slide events that have
cost the Emergency Relief program $17 million to reopen S.R. 1. Following
a major landslide over the winter of 1982-1983 that closed S.R. 1 for
nearly 3 months, Caltrans began to pursue relocating S.R.1 away from the
slide area.

The Devil's Slide project required a full environmental impact statement,
which was begun in 1983 and completed in 1986. The EIS set out three
options, one of which involved relocating S.R.1 inland, away from the
slide area, and FHWA selected this as the preferred alternative. The
environmental document was challenged in U.S. District Court, and the
project was enjoined in September 1986, prior to the start of any
construction. In orders issued in 1989 and 1990, the court ultimately
determined that the EIS was deficient only in regard to noise impacts.
Thereafter, FHWA and Caltrans began work on a supplemental EIS to address
noise impacts. In the years that had passed since the original EIS,
community attitudes had begun to shift in favor of relocating S.R.1 by way
of a tunnel through San Pedro Mountain behind Devil's Slide. Public
comments in the 1995 hearings for the supplemental EIS, and a local
referendum in 1996, called for consideration of a tunnel alternative. A
second supplemental EIS, completed in 2002, resulted in selection of a
tunnel route. FHWA had previously determined that the federal share for an
emergency relief project is guided by the rules and regulations in effect
at the time of the disaster. In the case of Devil's Slide, that is the
Surface Transportation Assistance Act (STAA) of 1982, which established
the federal share as 100 percent.17 Also, the Transportation Equity Act
for the 21st Century (TEA-21), enacted in 1998, had directed that the
Devil's Slide project was Emergency Relief program eligible.18

Figure 7: Rockslide at Devil's Slide, 1998

The current Devil's Slide project is a pair of 4,200-foot-long,
30-foot-wide tunnels through the San Pedro Mountain, connected at the
north end to a 1,000-foot bridge spanning a valley, and connected at the
south end to a realignment of S.R.1. Construction began in early 2006,
more than 20 years after the 1982-1983 event. The bridge portion is
currently under construction, and a contract was awarded for the tunnel
portion in December 2006. The total project will cost an estimated $441
million, and is scheduled to be completed in 2011. FHWA has allocated $241
million for the project, and an additional $200 million in future
Emergency Relief funds will be needed to complete the project. Following
the completion of the Devil's Slide project, Caltrans will relinquish the
bypassed section of S.R.1 to the county, which will maintain it for
bicycle and pedestrian use.

17Surface Transportation Assistance Act of 1982, Pub. L. No. 97-424, S
153, 96 Stat. 2097 (Jan. 6, 1983).

18Transportation Equity Act for the 21st Century, Pub. L. No. 105-178, S
1217, 112 Stat. 214 (Jun. 9, 1998).

During the two decades that the Devil's Slide project has been delayed,
S.R.1 has remained open, and subject to periodic slides that resulted in
road closures, including a 5-month closure in 1995 that cost about $3
million to clean up, and a closure from April to early August in 2006 that
cost $12 million in Emergency Relief funding. S.R.1 carries significant
commuter and business traffic through the Devil's Slide area, and road
closures due to slides have been a significant hardship for commuters and
the local communities. However, the goal of the Emergency Relief program
is to restore damaged or destroyed roadways to essential traffic, which in
the case of Devil's Slide had been accomplished through cleanup and
restoration. As a long-standing problem, replacing S.R. 1 with a tunnel
could have been addressed through the state's regular federal-aid highway
program.

Congress Increased Project Funding beyond What the Program Would Otherwise Have
Funded

Congressional action has increased the amount of Emergency Relief program
funding provided to certain disasters and projects. The devastation caused
by Hurricane Katrina at the end of August 2005 included the destruction of
the 1.6-mile U.S. Highway 90 Biloxi Bay Bridge in Mississippi (see fig.
8). The bridge provided essential emergency, commercial, and residential
traffic between the city of Biloxi, Mississippi, and the city of Ocean
Springs across Biloxi Bay. The original bridge was a four-lane bascule
bridge.19 Mississippi Department of Transportation (DOT) proposed to
replace it with a six-lane high-rise fixed structure bridge. Mississippi
DOT justified the increased capacity, from four lanes to six lanes, based
on a prehurricane traffic model that was not updated to consider
posthurricane projections. An environmental assessment for the replacement
bridge project was completed in November 2005 with a finding of no
significant impact, but other issues were raised in the course of
Mississippi DOT working with the communities through the NEPA process.
These included accommodations for pedestrian and bicycle traffic and
protection of existing trees, but a more significant concern was raised by
a local shipbuilder about the proposed height of the new bridge.

19A bascule bridge is a type of movable drawbridge in which the span
swings upward to provide passage for ship traffic.

Figure 8: Damage to U.S. 90 Biloxi Bay Bridge

According to Mississippi DOT officials, DOT initially proposed a bridge
that would provide an 85-foot clearance above Biloxi Bay. During a public
comment period on the proposed bridge design, a local shipbuilder
expressed concern that the height was not sufficient to allow for future
ships to pass under the bridge. Mississippi DOT revised its proposed
bridge design to provide a 95-foot clearance, which increased the cost of
the bridge from an estimated $275 million to the current cost of $339
million. As noted in the November 2005 final environmental assessment
document, the plan was to limit Emergency Relief program funding to the
portion of the project required to reestablish the function of the
original bridge, widen the structure to six lanes, and construct it to
current standards--other work would be eligible for funding with normal
federal-aid program funds. However, in December 2005, Congress passed an
emergency supplemental appropriation that addressed the Gulf Coast
hurricanes of 2005, and authorized 100 percent federal funding for the
repair or reconstruction of hurricane-damaged highways, roads, and
bridges.20 This effectively included the Biloxi Bay Bridge. As of December
2006, construction of the new bridge has begun, with completion expected
in May 2008.

Another instance of Congress increasing the Emergency Relief program's
funding to a project followed Hurricane Ivan striking the Florida
panhandle near Pensacola in September 2004, causing severe structural
damage to both spans of the I-10 Bridge over Escambia Bay. In the
aftermath of the hurricane, the Florida DOT decided it would replace
rather than repair the bridge, because of the age and the extent of damage
to the old bridge. Like the old bridge, the new bridge would also have two
spans, but built to a higher elevation to better protect against storm
surge damage, with three lanes on each span--increasing the capacity of
the old bridge.

Under FHWA's Emergency Relief Manual, program participation in project
funding can be limited depending on the circumstances involved.
Specifically, when repair and restoration of a damaged facility are
possible, but the state prefers to build a replacement facility, Emergency
Relief funding can be limited to what the program would have contributed
to the cost of repairing the damaged facility. FHWA estimated the cost to
repair the original bridge to be $179 million. FHWA division officials
were in discussions with the Florida DOT about the level of Emergency
Relief program funding for the project when, in December 2004, passage of
the Consolidated Appropriations Act of 200521 directed that replacement of
the Escambia Bay Bridge be federally funded. The program would fund 90
percent of the project cost, the federal share for work on interstate
highways. As of December 2006, the bridge is under construction, with one
of the spans nearing completion, and FHWA officials informed us the entire
bridge project is expected to be finished ahead of the scheduled December
2007 completion date at an estimated cost of $245 million. Although FHWA
could have limited the Emergency Relief program's participation to 90
percent of the prospective repair cost of the Escambia Bay Bridge,
congressional action ensured that the Emergency Relief program would have
a larger financial commitment in the project.

20Department of Defense, Emergency Supplemental Appropriation to Address
Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 2006, Pub.
L. No. 109-148, Ch. 9, 119 Stat. 2778 (Dec. 30, 2005).

21Consolidated Appropriations Act, 2005, Pub. L. No. 108-447, S 127, 118
Stat. 3214 (Dec. 8, 2004).

Definition of a Disaster Has Been Expanded, and New Types of Work Have Been
Authorized

In the Emergency Relief program regulations, a natural disaster is
described as a sudden and unusual natural occurrence, and a catastrophic
failure is described as the sudden failure of a segment of the highway
system due to an external cause. In one circumstance, Congress and FHWA
have decided that a gradual and predictable basin flooding event, which
was not a sudden occurrence, warranted treatment as a disaster for
Emergency Relief program eligibility, and have defined its eligibility in
legislation, regulation, and revisions to the Emergency Relief Manual.

Devils Lake in North Dakota lies in a large natural basin and lacks a
natural outlet for rising water to flow out of the lake. Starting in the
early 1990s, the lake level has risen dramatically--over 25 feet from 1993
to the present. The volume of water in the lake has quadrupled in that
time, flooding or threatening nearby communities, farms, reservation
lands, and roads (see fig. 9). According to North Dakota DOT officials,
many roads in the Devils Lake area were built in the 1930s and 1940s, when
the lake's water levels were near their historic low point. Initially, the
approach to preserve roads from being inundated was to buildup the grade
of roads that were threatened by the rising waters of Devils Lake. FHWA
amended its Emergency Relief program regulation in December 1996 to
explicitly provide that raising road grades in response to an
unprecedented rise in basin water levels was an Emergency Relief-eligible
activity. FHWA's next Emergency Relief Manual revision in 1998 identified
basin flooding as an Emergency Relief-eligible disaster. In April 2000,
FHWA also issued a memorandum that provided authorization for grade raises
in basin flooding situations based on forecasted rising water levels--a
unique provision for the Emergency Relief program, which otherwise funds
only postdisaster repair or restoration. Some roads have already had their
grades raised more than once, and according to North Dakota DOT officials,
one bridge had been built up three times in 4 years. As of September 2006,
North Dakota DOT officials informed us that they had essentially completed
raising the road grades to the levels currently allowed,22 based on
existing forecasts for lake levels, but further grade raises might be
necessary in the future if lake levels continue to rise. As of September
2006, the Emergency Relief program has funded over $145 million for
projects related to Devils Lake flooding.

22The April 2000 FHWA memorandum also established criteria that defined
when a Devils Lake grade raise would become eligible, based on forecasted
increases in the lake level by the National Weather Service and the U.S.
Geological Survey.

Figure 9: Map of Devils Lake, North Dakota, Expansion

Additional problems at Devils Lake led to Congress authorizing FHWA to
fund an additional type of project through the Emergency Relief program.
According to North Dakota DOT officials, grade raises to roads in the
Devils Lake area begun in the mid-1990s were constructed with culverts
embedded in the roadway embankments to allow water to flow through the
embankment, in order to equalize water pressure on each side of the raised
roadway. According to North Dakota DOT and FHWA division office officials,
in 1997 some communities and the local Indian reservation plugged some of
these culverts, without FHWA's or the state DOT's knowledge, to prevent
water from flowing through and onto their land. As a result, in these
areas, the raised roadways were now acting as dams, which increased their
risk of failure. As additional grade raises to these roads became
necessary, FHWA was prohibited by regulation23 from authorizing additional
work on such roads unless their safety could be certified by the agency
responsible for the safety of dams--in this case the Army Corps of
Engineers. However, the Corps of Engineers determined that it could not
certify the safety of the existing roads acting as dams without major
modifications, such as the construction of additional embankments.

In 2005, the passage of SAFETEA-LU reauthorized the FHWA highway program,
and authorized up to $10 million of Emergency Relief program funds to be
expended annually, up to a total of $70 million, for work in the Devils
Lake region of North Dakota to address roads acting as dams, which were
not previously eligible for Emergency Relief funds.24 This $10 million
comes out of the $100 million annual authorization of contract authority
that funds the Emergency Relief program, effectively reducing Emergency
Relief funding available to other states to $90 million. SAFETEA-LU also
included language authorizing FHWA to carry out necessary work in
connection with Devils Lake roads acting as dams, and it exempts the work
in the Devils Lake area from the need for further emergency declarations
to qualify for Emergency Relief funding. As of September 2006, FHWA has
been working with the Bureau of Indian Affairs to address high-priority
sites on the Indian reservation adjacent to the lake where roads were
acting as dams, and it has been meeting with North Dakota DOT and the
Corps of Engineers to develop solutions for other sites. These solutions
may include building dams or dikes to control lake flooding or protect the
raised roadways. While the damage and financial loss caused by this
flooding are very real, defining a gradual and predictable event--which is
not a sudden occurrence--as an eligible disaster represents a broadening
of the definition of what is a disaster for purposes of the Emergency
Relief program, and places an additional claim on limited program funding.
The North Dakota DOT estimates the cost of all of the additional work at
Devils Lake may well exceed $200 million.

2323 C.F.R. section 650.115(c).

24Safe, Accountable, Flexible, Efficient Transportation Equity Act: A
Legacy for Users, Pub. L. No. 109-59, S 1937, 119 Stat. 1510 (Aug. 10,
2005).

Congressional Action Has Increased Program Funding Commitments for Some
Disasters and Projects

In its first fiscal year 2006 supplemental appropriation for the Emergency
Relief program,25 Congress directed that the Emergency Relief program
shall fund 100 percent of all repair and reconstruction of highways,
roads, and bridges necessitated by Hurricanes Katrina, Rita, and Wilma,
because the states' resources were inadequate to deal with the string of
disasters. For example, Mississippi's allotment for Hurricane Katrina
damage was about $1 billion, and a 20 percent local share would have cost
the state about $200 million. To put the level of damage in perspective,
total prior 2005 Federal-aid Highway Program funding for Mississippi was
about $402 million.

This can especially affect large replacement projects. For example, the
original Biloxi Bay Bridge was on a noninterstate federal-aid highway and
the Emergency Relief program would ordinarily fund 80 percent of the
project cost.26 However, as a result of the supplemental appropriation,
the Emergency Relief program will fund the full cost of the Biloxi Bay
Bridge project rather than the 80 percent that would normally be funded
under the program criteria. Also, as noted earlier, Congress authorized
program funding for the replacement of the I-10 Escambia Bay Bridge. In
the absence of congressional direction, the Emergency Relief program may
have funded only 90 percent of the prospective repair cost of $179
million.

There have also been other instances where Congress has waived the
requirement for state matching funds or waived the limit on funding
provided to any one state, to support states that have been overwhelmed by
the costs of terrorist attacks or natural disasters. However, this has
added to the costs borne by the Emergency Relief program. Congress
authorized 100 percent federal funding for Emergency Relief program
highway projects in its 2002 supplemental appropriation27 to fund recovery
from the September 11, 2001, terrorist attacks. Congress has also acted to
waive the $100 million maximum limit on the Emergency Relief program
funding that could be provided to a single state for a disaster eight
times since 1989--in the two supplemental appropriations cited above, and
in six other supplemental appropriation acts.28

25Department of Defense, Emergency Supplemental Appropriation to Address
Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 2006, Pub.
L. No. 109-148, Ch. 9, 119 Stat. 2778 (Dec. 30, 2005).

26Or a higher sliding scale percentage for states with high percentages of
federally owned public lands.

272002 Supplemental Appropriations Act for Further Recovery from and
Response to Terrorist Attacks on the United States. Pub. L. No. 107-206,
116 Stat. 882 (Aug. 2, 2002).

Defining the Damage Threshold for a Site Can Affect Program Outlays

FHWA's division offices have been inconsistent in how they identify
eligible damage sites, which has a potential impact on program funding.
The Emergency Relief Manual states that, generally, a site is an
individual location where damage has occurred. However, a site could also
incorporate several adjoining locations within a reasonable distance where
similar damage has occurred, such as damage to traffic signs over an area.
The manual cautions, however, that aggregating damage locations to form a
site should be done with care, as it is not the intent of the Emergency
Relief program to pay for damage that a transportation agency would
normally perform as maintenance. We found that different FHWA division
offices accepted differing definitions of what constituted a site. For
example, in Florida, where hurricanes and storms have leveled signs and
signals over a wide area, whole counties have been designated as sites. In
California, where wildfires have destroyed signs and guardrails over a
wide area, state DOT officials told us that 20- to 30-mile stretches of
highway have been treated as single sites. On the other hand, an official
in the Ohio division office said that he generally limits the scope of a
site to the distance a person could see in both directions, although that
is not an absolute rule.

The physical size of a site that an FHWA division office will accept has
implications for the Emergency Relief program, because a site must have at
least $5,000 worth of damage to qualify for Emergency Relief funds. When a
major disaster covers a large area, and there is clearly sufficient damage
to qualify for Emergency Relief funding, treating widespread damage at a
limited number of damage sites can simplify program administration. In
addition, in the case of a more limited disaster--with damage around the
$700,000 level needed to qualify for Emergency Relief funding--allowing
sites to incorporate large areas, with a higher dollar amount of damage,
might allow a state to qualify for Emergency Relief program funds, while a
state held to a narrower site definition might not.

28Further Continuing Appropriations, 1990, Pub. L. No. 101-130, 103 Stat.
775 (Oct. 26, 1989); Emergency Supplemental Appropriations and
Rescissions, Pub. L. No. 103-211, 108 Stat. 9 (Feb. 12, 1994); Omnibus
Consolidated Rescissions and Appropriations Act of 1996, Pub. L. No.
104-134, 110 Stat. 1321-331 (Apr. 26, 1996); Omnibus Consolidated and
Emergency Supplemental Appropriations Act, 1999, Pub. L. No. 105-277, 112
Stat. 2681-585 (Oct. 21, 1998); Military Construction Appropriations and
Emergency Hurricane Supplemental Appropriations Act, 2005, Pub. L. No.
108-324, 118 Stat. 1251 (Oct. 13, 2004); and Emergency Supplemental
Appropriations Act for Defense, the Global War on Terror, and Hurricane
Recovery, 2006, Pub. L. No. 109-234, 120 Stat. 471 (Jun. 15, 2006).

Conclusions

There is a continuing need for a federal role to assist states in
responding to and recovering from natural disasters. The long history of
federal support to states to repair highway infrastructure in the wake of
disasters, and the potential for states to be financially overwhelmed by
the burden of the resulting costs, especially after extraordinary events,
argues strongly for a continued Emergency Relief program. However, where a
continued federal role is seen in the future, the nation's pending fiscal
crisis requires reexamining whether the current mission is fully
consistent with the initial or updated statutory mission, whether
significant expansion of scope has occurred, and whether a program is
affordable and financially sustainable over the long term, given known
cost trends, risks, and future fiscal imbalances. From this perspective,
the Emergency Relief program faces sustainability concerns in the future,
exacerbated by the gradual expansion of eligibility criteria that should
be addressed.

While predicting the future financial requirements of disasters is not
possible in any precise way, on the basis of past demands on the program,
it is reasonable to expect a continuing fiscal imbalance if the program
remains at the current funding level. Thus Congress has the opportunity to
establish a more sustainable funding level and to identify a stable
long-term source of funding consistent with future demands. Given current
projections on the status of the Highway Trust Fund and the recent history
of large costs incurred by the states responding to disasters, the program
does not appear to be sustainable in the long term if funding is derived
from the Highway Trust Fund, as currently structured. In fact, the current
authorization from the Highway Trust Fund does not cover the ordinary
events states experience, and the supplemental appropriations from the
General Fund are funding both extraordinary and ordinary events. The
National Surface Transportation Policy and Revenue Commission can help--it
will be examining alternatives to replace or supplement the fuel tax as
the principal revenue source to support the Highway Trust Fund, and
putting the Highway Trust Fund on a sustainable basis. In theory,
sufficient revenues could allow all Emergency Relief funding, including
funding for extraordinary events, to be financed by the Highway Trust
Fund, the approach taken when the Highway Trust Fund held large balances.
This would have the advantage of relying on a predictable source of
revenue intended for highway projects as the source of the program.

Alternatively, Congress could, as it also has done in the past, provide
some or all emergency funding from the General Fund. This might be
particularly appropriate for extraordinary events because such events are
comparatively rare, can occur on a large multistate level, can overwhelm
all levels of government, and cannot be reasonably planned and budgeted
for. This would also place the Emergency Relief program on the same
footing as FEMA's disaster relief programs, which are financed through the
General Fund. While this approach would help the short-term sustainability
of the Highway Trust Fund, because the nation faces a long-term fiscal
crisis, relying solely or heavily on the General Fund is a limited option.

In order to put the program on a sound financial footing, additional
alternatives to address the fiscal imbalance need to be considered.
Revising the program's criteria to place limitations on the use of
Emergency Relief funds to fully finance projects with scope and costs that
have grown as a result of environmental and community concerns is one
possibility. Looking for alternative funding for projects designed to
solve chronic problems, as opposed to immediate road opening needs, is
another. These changes would place greater burden on the states, which
would have to pay for project expansion driven by nonemergency factors and
projects to address chronic, predictable conditions, while saving federal
funds for larger disasters.

The funding imbalance makes FHWA's fiscal stewardship of the Emergency
Relief program especially important. While the fiscal imbalance in the
program is too great to be solved by improved stewardship by FHWA alone,
FHWA is not routinely recapturing all unused program funds once a project
is complete. In fact, states with immediate disaster needs experience
reimbursement backlogs, while unused program funds are maintained by
states with no current disaster needs. Furthermore, the lack of a standard
definition of what constitutes a damage site opens the door for many
smaller costs to be charged against the program, and may result in higher
federal reimbursements.

Matters for Congressional Consideration

In order to put the Emergency Relief program on a sound financial footing,
Congress should consider the expected future demands on the program and
reexamine the appropriate level and sources of funding--including whether
to increase the $100 million annual authorized funding and whether the
Highway Trust Fund, the General Fund, or some combination would allow the
program to accomplish its purpose in a fiscally sustainable manner.
Congress should also consider tightening the eligibility criteria for
Emergency Relief funding, either through amending the purpose of the
Emergency Relief program, or by directing FHWA to revise its program
regulations. Revised criteria could include limitations on the use of
Emergency Relief funds to fully finance projects with scope and costs that
have grown as a result of environmental and community concerns.

Recommendations for Executive Action

In order to help put the Emergency Relief program on a more sound
financial footing, we recommend that the Secretary of Transportation
direct the Administrator, FHWA, to revise its emergency relief regulations
to tighten the eligibility criteria for Emergency Relief funding, to the
extent possible within the scope of FHWA's authority. Revised criteria
could include limitations on the use of Emergency Relief funds to fully
finance projects with scope and costs that have grown as a result of
environmental and community concerns. In order to improve FHWA's financial
oversight of Emergency Relief funds, FHWA should require division offices
to annually coordinate with states to identify unexpended obligated and
unused unobligated Emergency Relief funds that will not be needed for
projects, withdraw the unneeded amounts, and determine if they are needed
for other eligible projects. In the event these funds are not needed for
other eligible projects, FHWA should identify these funds to Congress for
rescission or to offset future appropriations. FHWA also should identify
for rescission unexpended funds that have been directed to specific
disasters when those funds are no longer needed. Finally, in order to
ensure that similar types of events result in consistent determinations of
eligibility, FHWA should clarify its Emergency Relief Manual to better
specify the definition of a site, and whether under certain circumstances
variations from the basic definition are permitted.

Agency Comments and Our Evaluation

We provided copies of a draft of this report to DOT for its review and
comment. DOT provided its comments in an e-mail message on February 5,
2007. DOT generally agreed with the facts presented but took no position
on our recommendations. DOT also provided technical comments, which we
incorporated into this report as appropriate.

We are sending copies of this report to congressional committees and
subcommittees with responsibilities for DOT. We will also make copies
available to others upon request. This report will be available at no
charge on the GAO Web site at http://www.gao.gov.

If you have any questions about this report, please contact me at (202)
512-2834 or [email protected]. Contact points for our Offices of
Congressional Relations and Public Affairs may be found on the last page
of this report. Staff who made key contributions to this report are listed
in appendix VI.

Katherine Siggerud
Director, Physical Infrastructure Issues

List of Congressional Addressees

The Honorable James M. Inhofe
Ranking Member
Committee on Environment and Public Works
United States Senate

The Honorable Patty Murray
Chairwoman
The Honorable Christopher S. Bond
Ranking Minority Member
Subcommittee on Transportation, Housing and Urban
Development, and Related Agencies
Committee on Appropriations
United States Senate

The Honorable John L. Mica
Ranking Republican Member
Committee on Transportation and Infrastructure
House of Representatives

The Honorable John W. Olver
Chairman
Subcommittee on Transportation,
Housing and Urban Development, and Related Agencies
Committee on Appropriations
House of Representatives

The Honorable John J. Duncan
Ranking Republican Member
Subcommittee on Highways and Transit
Committee on Transportation and Infrastructure
House of Representatives

Appendix I: Objectives, Scope, and Methodology

The objectives of this report were to review (1) the total amount of
Emergency Relief program funding allocated to the states in recent years,
how this funding was distributed among the states, and the events for
which it was allocated; (2) the sources of funding used to finance these
emergency relief allocations and the financial challenges facing the
program; and (3) the scope of activities eligible for funding and the
extent to which the scope of eligible activities has changed in recent
years.

To examine the total amount of Emergency Relief funding allocated to
states in recent years, we interviewed and obtained documentation from the
Federal Highway Administration's (FHWA) Office of Financial Management and
analyzed Fiscal Management Information System (FMIS) data on program
trends, including allocations by state, total program allocations,
unexpended balances of "inactive" projects, and unobligated balances. We
assessed the reliability of the information system extracts and queries by
reviewing relevant system documentation, interviewing agency officials who
worked with the information system, and conducted manual data testing. We
found that state allocations data were available only for two specific
time periods--cumulatively beginning at program inception or the last 10
fiscal years--rather than from fiscal year 1985 to present as requested.
We determined the data to be sufficiently reliable for analysis of state
allocation data from 1997 through fiscal year 2006--the last 10 years. We
also found that Emergency Relief projects may be initially funded through
other federal-aid programs and converted to Emergency Relief funding in
FMIS once funds are available. Consequently, the Emergency Relief program
obligations in FMIS may not be exhaustive, as they may not include funds
that will be converted to Emergency Relief. We determined that FMIS
Emergency Relief program obligations data were not sufficiently complete
for analysis of project obligations by state. These data were not used in
any of our analyses and therefore had no impact on our findings.

To examine the value of the annual $100 million authorization over time in
constant dollars, we adjusted the $100 million authorization using the
annual values of gross domestic product (GDP) price index for fiscal years
1972 through 2005. Fiscal year 2005 is the most recent year for which
there were accurate GDP index annual values available.

To examine the purposes for which Emergency Relief funds were allocated,
we interviewed the Emergency Relief program manager and obtained data on
program allocations by event from him, rather than using FMIS data. While
FMIS contains fields that document disaster sequence number and fiscal
year, there is not a simple way to calculate the total obligations by
event. Event cost data have been maintained by the Emergency Relief
program manager from fiscal years 1998 through 2006. We accessed the
reliability of program data on allocations by event by interviewing the
program manager and manually testing program data against congressional
appropriations legislation and found the data to be sufficiently reliable
for analysis of event cost from fiscal years 1998 through 2006.

To examine the sources of funding used to finance the Emergency Relief
allocations, we analyzed supplemental and annual authorizations using the
legislative history of the Emergency Relief program from fiscal years 1990
through 2006. We also used the legislative history of the program from
fiscal years 1985 through 2006 to obtain information on program
reimbursement backlogs. Because FHWA officials do not maintain historical
reimbursement backlog data, we relied on periodic references to
reimbursement backlogs in the legislative history.

To examine the scope of activities eligible for Emergency Relief program
funding and the extent to which the scope of eligible activities has
changed in recent years, we obtained and reviewed program manuals,
guidance, and documentation for program eligibility criteria and policies
and requirements. We also interviewed FHWA officials at U. S. Department
of Transportation headquarters who are responsible for providing guidance
and policies for the Emergency Relief program and the Emergency Relief
program for federally owned roads. In addition, we conducted site visits
to five states (California, Florida, Mississippi, North Dakota, and Ohio)
and conducted interviews with state department of transportation and FHWA
officials, including managers, team leaders, and engineers, that are
responsible for the administration of Emergency Relief program, as well as
other FHWA highway programs. We also interviewed officials from the FHWA's
Eastern Federal Land Highway Division Office in Virginia. We gathered
relevant program documentation from each site visit, including project
Detailed Damage Inspection Reports, environmental assessments, and cost
analyses. To capture a variety of disaster events and projects, we
selected five states considering (1) the dollar amount of program
allocations from fiscal program inception through 2005, (2) the dollar
amount of program allocations from fiscal years 2001 through 2005, (3)
geographical dispersion, (4) whether the state sustained damage from the
2005 Gulf hurricanes, and (5) whether the states had Emergency Relief
projects costing more than $1 million within the last 10 years.

To examine the extent to which the scope of eligible activities has
changed in recent years, we reviewed the legislative history of the
program from fiscal years 1985 through 2006. We identified congressional
waivers of program requirements such as the requirement for state matching
funds and the $100 million maximum limit on program funding that could be
provided to a single state per fiscal year.

We conducted our work in California, Florida, Mississippi, North Dakota,
Ohio, Virginia, and Washington, D.C., between April 2006 and December 2006
in accordance with generally accepted government auditing standards.

Appendix II: Emergency Relief Allocations, by State, Fiscal Years 1997
through 2006

State                               Allocations 
Florida                          $1,610,221,999 
California                        1,407,593,370 
Louisiana                         1,197,186,159 
Mississippi                       1,018,492,758 
New York                            351,959,991 
Ohio                                252,726,560 
Washington                          226,192,038 
North Dakota                        183,192,689 
North Carolina                      169,318,189 
Federal land management agencies    150,397,788 
Oregon                              146,828,474 
Idaho                               103,603,390 
Pennsylvania                        102,223,909 
Alabama                              94,754,342 
West Virginia                        84,967,478 
Puerto Rico                          82,121,303 
Texas                                73,545,635 
Virginia                             72,716,074 
Alaska                               62,403,890 
New Jersey                           61,472,168 
Hawaii                               57,581,279 
Arkansas                             50,526,038 
Oklahoma                             45,678,083 
South Dakota                         41,031,174 
Guam                                 39,287,726 
Montana                              38,692,910 
Nevada                               36,139,306 
Colorado                             35,924,445 
American Samoa                       32,929,435 
New Hampshire                        22,375,948 
Minnesota                            21,274,187 
Utah                                 14,422,113 
Vermont                              14,242,337 
Maine                                13,860,774 
Connecticut                          11,636,008 
Iowa                                 10,490,033 
Illinois                              9,185,887 
Maryland                              8,803,500 
Wyoming                               8,642,033 
Michigan                              7,430,170 
Indiana                               7,378,050 
Delaware                              6,460,000 
Northern Marianas                     6,407,000 
Arizona                               6,313,750 
Missouri                              6,221,126 
Nebraska                              5,784,846 
Kentucky                              5,136,894 
Virgin Islands                        4,281,655 
Kansas                                3,887,968 
Massachusetts                         3,884,375 
South Carolina                        3,512,493 
Wisconsin                             2,735,059 
Rhode Island                          1,650,000 
New Mexico                            1,021,631 
Georgia                                 971,836 
Tennessee                               209,694 
District of Columbia                          0 
Total                            $8,037,927,969 

Source: FMIS

Appendix III: Tables of Allocations by Event from Fiscal Years 1998
through 2006

Table 2: Allocations by Event for 1998

State                    1998 events                           Allocations 
California               February 1998 flood                   $84,400,000 
Federal land management  Federal lands management agencies      47,970,591 
agencies                                                                   
Puerto Rico              September 1998 Hurricane Georges       40,860,000 
Ohio                     June 1998 flood                        26,663,000 
Alabama                  September 1998 Hurricane Georges       12,983,000 
Guam                     December 16-17, 1998 Typhoon Paka      12,000,000 
New York                 January 1998 ice storm                 12,000,000 
Alabama                  March 1998 flooding                    10,400,000 
Maine                    January 1998 ice storm                  8,475,000 
Vermont                  June/July 1998 storms and flooding      6,600,000 
Idaho                    June 1998 flood                         6,070,000 
Iowa                     June 1998 flood                         6,000,000 
South Dakota             Spring 1998 basin flood                 6,000,000 
New York                 June/July 1998 storm                    5,500,000 
Pennsylvania             May 1998 failure of I-95 Chester        5,000,000 
                            Creek bridge                                      
Florida                  September 1998 Hurricane Georges        4,954,000 
Northern Mariana Islands Nov. 2/Dec.16, 1997, Typhoons Keith     4,269,000 
                            and Paka                                          
North Carolina           January 1998 winter storm               4,027,000 
North Dakota             Spring 1998 Devils Lake Basin           3,907,000 
                            flooding                                          
Mississippi              September 1998 Hurricane Georges        3,754,000 
Colorado                 March/April 1998 landslide              3,564,000 
North Dakota             Spring 1998 basin flooding              2,676,000 
West Virginia            June 1998 flooding                      2,542,000 
New York                 September 1998 storm                    2,500,000 
Minnesota                March 1998 storms/tornadoes             2,348,000 
North Carolina           August 1998 Hurricane Bonnie            2,152,000 
Virginia                 September 1998 Hurricane Georges        2,100,000 
Missouri                 July 1998 flooding                      1,954,000 
Florida                  September 1998 Hurricane Earl           1,665,000 
Washington               July 1998 flooding                      1,241,000 
Vermont                  January 1998 ice storm                  1,048,000 
North Carolina           Failure of SR 1755 bridge over I-40     1,030,000 
Texas                    August 1998 Tropical Storm Charlie        880,000 
Georgia                  March 1998 flooding                       770,000 
Florida                  May 1998 forest fires                     732,000 
Arizona                  March 1998 failure of US 70 bridge        660,000 
Michigan                 March/April 1998 flood                    627,000 
Washington               March 1998 failure of Carbon River        625,000 
                            Bridge on SR165                                   
Texas                    September 1998 Tropical Storm             603,000 
                            Frances                                           
Florida                  February 1998 storms and flooding         600,000 
Louisiana                September 1998 Hurricane Georges          507,000 
Wisconsin                August 1998 flooding                      506,000 
New Hampshire            January 1998 ice storm                    505,000 
Total                                                         $343,667,591 

Source: FHWA.

Table 3: Allocations by Event for 1999

State                   1999 events                            Allocations 
North Carolina          September 1999 Hurricane Floyd         $38,000,000 
Federal land management Federal lands management agencies       32,636,030 
agencies                                                                   
Washington              January/March 1999 storm                22,073,000 
North Dakota            April/May 1999 flood                    14,010,000 
New York                September 1999 Hurricane Floyd          14,000,000 
New Jersey              Hurricane Floyd                         11,900,000 
Texas                   October 1998 flood                      11,600,000 
Virginia                September 1999 Hurricane Floyd          11,105,600 
Colorado                April/May 1999 flood                     7,400,000 
Washington              Washington, November/December 1998       6,634,000 
                           storm                                              
Ohio                    November 1998 US 32 failure              5,076,000 
California              February 1999 storm                      5,000,000 
Idaho                   October 1998 US 95 slide                 4,655,000 
Colorado                July 1999 flood                          4,300,000 
Nevada                  July 1999 flood                          4,200,000 
Florida                 September 1999 Hurricane Floyd           3,426,000 
Virginia                December 1998 ice storm                  3,422,000 
South Carolina          September 1999 Hurricane Floyd           3,100,000 
Oregon                  January 1999 storm                       2,590,000 
North Carolina          April 1999 I-40 slide                    2,086,000 
Pennsylvania            September 1999 Hurricane Floyd           2,000,000 
Oklahoma                May 1999 tornado and storm               1,801,000 
Iowa                    May 1999 flood                           1,500,000 
Maryland                September 1999 Hurricane Floyd           1,500,000 
Minnesota               July 1999 storm                          1,296,000 
North Carolina          August 1999 Hurricane Dennis             1,035,000 
Oklahoma                October/November 1998 storm                755,000 
Kansas                  November 1998 flood                        658,000 
New York                July 1999 storm                            640,000 
Alabama                 December 1998 storm                        531,000 
Kansas                  October 1998 flood                         529,000 
Total                                                         $219,458,630 

Source: FHWA.

Table 4: Allocations by Event for 2000

State                           2000 events                    Allocations 
Federal land management         Federal land management        $30,469,847 
agencies                        agencies                                   
New York                        May 2000 flooding               16,000,000 
Hawaii                          March 2000 rock slide           11,250,000 
North Carolina                  January 2000 winter storm        7,000,000 
Oregon                          November 1999 heavy rains        6,704,000 
New Jersey                      August 2000 flood                5,519,000 
North Dakota                    June 2000 flood                  4,680,000 
Washington                      December 1999 storm and flood    3,314,000 
Florida                         September 1999 Hurricane Irene   2,600,000 
Wisconsin                       May/June 2000 storm              2,234,000 
West Virginia                   February 2000 flood                936,000 
Missouri                        May 2000 flood                     829,000 
Virginia                        November 1999 Hurricane Lenny      550,000 
Total                                                          $92,085,847 

Source: FHWA.

Table 5: Allocations by Event for 2001

State                   2001 events                            Allocations 
New York                September 11, 2001, World Trade       $242,000,000 
                           Center terrorist attacks                           
Arizona                 December 2000 ice storm                 45,951,937 
Washington              February 2001 Nisqually earthquake      46,225,000 
North Dakota            Spring 2001 Devils Lake                 45,073,000 
Hawaii                  November 2000 flooding                  32,968,000 
Federal land management Federal land management agencies        17,270,686 
agencies                                                                   
Texas                   September 2001 Queen Isabella Bridge    12,800,000 
                           failure                                            
West Virginia           July 7, 2001, flood                     10,357,000 
Oklahoma                December/January 2001 ice storm         10,257,000 
New Jersey              June 2001 I-80 truck fire                6,575,000 
Texas                   December/January 2001 ice storm          5,910,000 
Arizona                 October 2000 flood                       5,788,800 
Texas                   June 2001 Storm Allison                  5,440,000 
Ohio                    May 2001 I-77 failure                    5,217,000 
Missouri                September 2001 Rte. MM bridge over       5,062,000 
                           I-44 failure                                       
Ohio                    January 2001 rock slide on Route 7       2,873,000 
Oregon                  October 2000 heavy rains                 2,315,000 
Virginia                July 2001 flood                          2,230,034 
Minnesota               April 2001 flood                         1,865,016 
West Virginia           July 26, 2001 flood                      1,458,000 
Colorado                August 2001 flood                        1,357,000 
Puerto Rico             November 2001 flood                      1,315,000 
Pennsylvania            June 2001 flood                          1,138,000 
West Virginia           May 2001 flood                             887,000 
New York                December 2000 flood                        775,000 
South Dakota            Spring 2001 flood                          717,000 
Total                                                         $513,825,473 

Source: FHWA.

Table 6: Allocations by Event for 2002

State                   2002 events                            Allocations 
Illinois                April 2002 flood                       $30,562,000 
Oklahoma                May 2002 I-40 bridge failure            28,645,000 
Texas                   July 2002 flood                         13,673,000 
West Virginia           May 2002 flood                           8,196,000 
Guam                    July 2002 Typhoon Chatan                 7,072,500 
Federal land management Federal land management agencies         5,468,376 
agencies                                                                   
Nebraska                July 2002 flood                          4,550,000 
Virginia                March 2002 flood                         4,417,073 
Missouri                April 2002 flood                         3,000,000 
Alabama                 January 2002 I-65 bridge failure         2,807,000 
Arizona                 Rodeo-Chediski wild fire 2002            2,695,200 
Michigan                April 2002 flood                         2,637,000 
American Samoa          October 2001 rockfall on Route 1         2,613,000 
Minnesota               June 2002 flood                          2,333,415 
Washington              November/December 2001 flood             1,847,000 
Guam                    October 2001 earthquake                  1,687,000 
Washington              January 2002 storm                       1,400,000 
Wyoming                 August 2002 flood                        1,297,955 
Montana                 June 2002 flood                           882,000. 
Idaho                   April 2002 flood                           732,000 
Alaska                  Spring 2002 flood                          713,262 
New York                April 2002 earthquake--Clinton County      690,016 
Total                                                         $127,918,797 

Source: FHWA.

Table 7: Allocations by Event for 2003

State                    2003 events                           Allocations 
California               December 2002 storms                  $54,200,000 
Alaska                   November 3, 2002 earthquake            37,804,337 
Virginia                 September 2003 Hurricane Isabel        34,988,948 
North Carolina           September 2003 Hurricane Isabel        21,000,000 
North Carolina           December, 2002 winter storm            18,000,000 
Alaska                   October/November 2002 floods           11,736,409 
Federal lands Management Federal lands management agencies      11,435,365 
agencies                                                                   
Guam                     December 2002 Typhoon Pongsonga         9,977,526 
Louisiana                2003 Hurricane Lilli                    7,125,552 
New York                 April 2003 ice storm                    6,691,951 
North Carolina           February 2003 ice storm                 6,000,000 
Maryland                 September 2003 Hurricane Isabel         5,721,500 
American Samoa           May 2003 flooding/landslides            5,015,500 
West Virginia            June 2003 storms/flooding               3,694,695 
Mississippi              April 2003 storms                       2,814,684 
Pennsylvania             September 2003 flooding                 2,743,600 
New Hampshire            August 2003 storms                      2,697,000 
New York                 Summer 2003 storms                      2,648,669 
Puerto Rico              April 2003 Rains, runoff, and           2,600,000 
                            flooding                                          
Colorado                 June 2003 sinkhole I-70                 2,421,928 
Delaware                 2003 Hurricane Isabel and Storm         2,250,000 
                            Henri                                             
Michigan                 May 2003 storms                         2,103,736 
Pennsylvania             July 2003 storms                        1,940,956 
Washington               February 2003 storms--multiple          1,725,000 
                            counties                                          
Nebraska                 May 2003 I-80 overpass collapse         1,500,000 
Northern Mariana Islands December 2002 Typhoon Pongsonga         1,168,157 
Texas                    2003 Hurricane Claudette                1,061,212 
Kansas                   June 2003 flood                         1,026,285 
New York                 August 2003 power outage                1,000,000 
Vermont                  August 2003 storm                         815,500 
West Virginia            February 2003 storms                      631,000 
Total                                                         $264,539,510 

Source: FHWA.

Table 8: Allocations by Event for 2004

State                    2004 events                           Allocations 
Florida                  September 2004 Hurricane Ivan        $442,458,964 
Florida                  September 2004 Hurricane Jeanne       222,757,654 
Florida                  August 2004 Hurricane Charley         155,884,806 
Florida                  September 2004 Hurricane Frances      107,274,607 
Federal land management  Federal land management agencies       68,796,364 
agencies                                                                   
Ohio                     Hurricane Ivan                         66,057,000 
Federal land management  Federal land management agencies       50,247,100 
agencies                 (2004 hurricanes)                                 
California               October 2003 San Diego wildfires       44,300,000 
Pennsylvania             Hurricane Ivan                         39,400,000 
Ohio                     January 2004 flooding                  32,423,648 
North Carolina           Hurricane Ivan                         22,000,000 
Alabama                  September 2004 Hurricane Ivan          18,300,000 
Washington               October 2003 storms and flooding       17,246,000 
American Samoa           January 2004 Tropical Cyclone Heta     15,725,525 
North Carolina           May 2004 Devils Lake                   13,572,000 
West Virginia            Hurricane Ivan                         13,540,814 
Connecticut              March 2004 I-95 truck fire             11,200,000 
California               Inyo County flood                       9,300,000 
West Virginia            November 2003 rains and flooding        7,052,805 
New Jersey               July 2004 flooding                      6,572,309 
Virginia                 August 2004 Tropical Storm Gaston       6,154,060 
Pennsylvania             January 24, 2004, Route 33              5,839,886 
                            sinkhole                                          
Puerto Rico              November 2003 rainfall                  5,800,000 
West Virginia            May 2004 flooding                       5,063,199 
Texas                    April 2004 I-20 bridge failure          4,766,192 
Montana                  November 2003 US 2 bridge damage        3,678,076 
California               December 2003 San Simeon                3,600,000 
                            Earthquake                                        
North Carolina           Hurricane Frances                       3,220,000 
Iowa                     May/June 2004 storms and flooding       3,000,028 
Ohio                     May/June 2004 flooding                  2,610,000 
New York                 August/September 2004 storms and        2,025,000 
                            flooding                                          
Georgia                  Hurricane Ivan                          2,000,000 
Puerto Rico              September 2004 Hurricane Jeanne         2,000,000 
North Dakota             Spring 2004 flooding in northeast       1,980,949 
                            North Dakota                                      
Arizona                  April 2004 Flooding                     1,812,834 
New York                 May/June 2004 storms and flooding       1,660,000 
Georgia                  Hurricane Frances                       1,600,000 
Washington               November 2003 storms and flooding       1,400,000 
South Carolina           Tropical Storm Gaston                   1,223,470 
Texas                    May 2004 flooding                       1,156,871 
Virginia                 November 2003 rainfall                  1,100,000 
Delaware                 September 2004 Tropical Storm           1,000,000 
                            Jeanne                                            
South Carolina           January 2004 ice storm                    977,441 
Northern Mariana Islands August 2004 Typhoon Chaba                 944,264 
Montana                  February 2004 rock slide                  840,605 
Idaho                    August 2004 rains                         763,600 
Guam                     Tropical Storm Ting-Ting                  550,700 
Total                                                       $1,430,876,771 

Source: FHWA.

Table 9: Allocations by Event for 2005

State                   2005 events                            Allocations 
Louisiana               August 2005 Hurricane Katrina       $1,111,417,263 
Mississippi             August 2005 Hurricane Katrina        1,013,000,000 
California              2004-2005 winter storms                245,000,000 
Florida                 July 2005 Hurricane Dennis             118,509,358 
Louisiana               September 2005 Hurricane Rita           78,136,384 
Ohio                    December 2004 rainfall and flooding     60,035,013 
Florida                 August 2005 Hurricane Katrina           42,843,797 
Texas                   September 2005 Hurricane Rita           36,994,607 
Ohio                    January 2005 rainfall and flooding      28,962,132 
Federal land management Federal land management agencies        28,600,000 
agencies                                                                   
Alabama                 August 2005 Hurricane Katrina           17,577,720 
Montana                 May 2005 Beartooth Highway              17,000,000 
                           landslides                                         
Nevada                  January 2005 flooding                   16,883,960 
North Dakota            Devils Lake SAFETEA-LU Section 1937     10,000,000 
West Virginia           January 2005 flooding                    9,577,789 
New York                April 2005 flooding                      8,805,139 
Utah                    January 2005 flooding                    8,800,000 
Alabama                 I-65/I-20 bridge damage                  8,508,666 
Pennsylvania            April 2005 flooding                      6,467,410 
Idaho                   June 3, 2005, US 95 landslide            4,420,646 
Pennsylvania            January 2005 heavy rains                 4,007,046 
Alaska                  October 2004 storm damage                3,323,500 
American Samoa          February 2005 Tropical Cyclone Olaf      3,245,410 
Colorado                June 2005 US 6 rock slide                3,220,000 
Alaska                  September 2005 storm surge and           2,610,505 
                           flooding                                           
Utah                    April-June 2005 flooding                 2,416,344 
Florida                 September 2005 Hurricane Rita            2,331,245 
Alaska                  May 2005 flooding                        2,098,072 
Alabama                 July 2005 Hurricane Dennis               2,010,000 
Washington              December 10, 2004 storm                  1,789,820 
Colorado                November 2004 I-70 rock slide            1,400,000 
New York                June 2005 flooding and mud               1,245,092 
                           slides/I-87 closure                                
North Carolina          September 2005 Hurricane Ophelia         1,165,234 
Washington              September 2005 I-90 rock slide           1,030,000 
New Mexico              February 2005 storms                     1,011,632 
New York                July 2005 Hadlock Pond Dam failure         989,192 
New Hampshire           June 2005 flooding                         843,980 
Total                                                       $2,906,276,956 

Source: FHWA.

Table 10: Allocations by Event for 2006

State                   2006 events                            Allocations 
Florida                 October 2005 Hurricane Wilma          $478,000,000 
Oregon                  December 2005 flooding                  38,000,000 
Washington              2005/2006 winter storms                 25,000,000 
Pennsylvania            June 2006 flooding                      18,500,000 
New Hampshire           October 2005 northeast flooding         17,881,986 
Federal land management Federal land management agencies        16,555,120 
agencies                                                                   
Colorado                July 2006 flood damage to State         15,700,000 
                           Highway 67                                         
New York                June 2006 flooding                      11,800,000 
Hawaii                  March 2006 rainfall and flooding        11,542,154 
North Dakota            Devils Lake SAFETEA-LU Section 1937     10,000,000 
Ohio                    July 2006 rainfall and flooding          7,250,000 
Maine                   May 2006 rainfall and flooding           3,953,800 
Massachusetts           October 2005 flooding                    3,884,375 
Alaska                  August 2006 storms                       3,028,797 
Puerto Rico             October 2005 rains                       2,510,246 
Delaware                June 2006 flooding                       2,500,000 
Rhode Island            October 2005 northeast flooding          1,650,000 
Alaska                  November 2005 winter storms              1,610,456 
Minnesota               March/May 2006 flooding                  1,232,729 
Vermont                 December 2005 Elm Street rock slope      1,200,000 
                           failure                                            
Idaho                   April 2006 State Highway 34 landslide    1,090,000 
Kansas                  October 2005 heavy rains and flooding      931,055 
Connecticut             October 2005 northeast flooding            812,714 
Idaho                   May 2006 storm runoff damage               459,000 
Total                                                         $675,092,432 

Source: FHWA.

Table 11: Summary Table of Annual Allocations

Fiscal year Total all event allocations 
1998                       $343,667,591 
1999                        219,458,630 
2000                         92,085,847 
2001                        513,825,473 
2002                        127,918,797 
2003                        264,539,510 
2004                      1,430,876,771 
2005                      2,906,276,956 
2006                        675,092,432 
Average                    $730,415,770 
Median                     $343,667,591 

Source: GAO analysis of FHWA data.

Note: Annual totals are not adjusted for inflation.

Appendix IV: Summary of Emergency Relief Program Supplemental
Appropriations

Public law                                                    Supplemental 
                                                                appropriation 
reference    Fiscal year Title or description                       amount 
P.L. 101-130 1990        Fiscal Year 1990 Dire Emergency        $1 billion 
                            Supplemental to Meet the Needs of                 
                            Natural Disasters of National                     
                            Significance                                      
P.L.-102-368 1992        Supplemental appropriations for       $30 million 
                            Fiscal Year 1992                                  
P.L.-103-75  1993        Emergency supplemental               $175 million 
                            appropriations for relief from the                
                            major, widespread flooding in the                 
                            Midwest for the fiscal year ending                
                            September 30, 1993                                
P.L.-103-211 1994        Making emergency supplemental      $1.665 billion 
                            appropriations for the fiscal year                
                            ending September 30, 1994, and for                
                            other purposes                                    
P.L.-104-134 1996        Making appropriations for fiscal     $300 million 
                            year 1996 to make a further down                  
                            payment toward a balanced budget,                 
                            and for other purposes                            
P.L.-104-208 1997        Making Omnibus Consolidated           $82 million 
                            Appropriations for Fiscal Year                    
                            1997                                              
P.L.-105-18  1997        1997 Emergency Supplemental          $650 million 
                            Appropriations Act for Recovery                   
                            from Natural Disasters, and for                   
                            Overseas Peacekeeping Efforts,                    
                            Including Those in Bosnia                         
P.L.-105-174 1998        1998 Supplemental Appropriations     $259 million 
                            and Rescissions Act                               
P.L.-106-346 2001        Department of Transportation and     $720 million 
                            Related Agencies Appropriations,                  
                            2001                                              
P.L.-107-117 2002        Department of Defense and             $75 million 
                            Emergency Supplemental                            
                            Appropriations for Recovery from                  
                            and Response to Terrorist Attacks                 
                            on the United States Act, 2002                    
P.L.-107-206 2002        2002 Supplemental Appropriations     $265 million 
                            Act for Further Recovery from and                 
                            Response to Terrorist Attacks on                  
                            the United States                                 
P.L.-108-324 2005        Military Construction              $1.202 billion 
                            Appropriations and Emergency                      
                            Hurricane Supplemental                            
                            Appropriations Act, 2005                          
P.L.-108-447 2005        Consolidated Appropriations Act,     $741 million 
                            2005                                              
P.L.-109-148 2006        Department of Defense, Emergency   $2.750 billion 
                            Supplemental Appropriations to                    
                            Address Hurricanes in the Gulf of                 
                            Mexico, and Pandemic Influenza                    
                            Act, 2006                                         
P.L. 109-234 2006        Emergency Supplemental               $702 million 
                            Appropriations Act for Defense,                   
                            The Global War on Terror, and                     
                            Hurricane Recovery, 2006                          

Source: GAO analysis of FHWA Emergency Relief program information and
congressional legislation.

Appendix V: Contact and Staff Acknowledgments

GAO Contact

Katherine Siggerud, (202) 512-2834

Staff Acknowledgments

In addition to the individual named above, other key contributors to this
report were Steve Cohen, Assistant Director, and Ashley Alley, Robert
Ciszewski, Colin Fallon, Don Kittler, and Amber Yancey-Carroll.

(542089)

GAO's Mission

The Government Accountability Office, the audit, evaluation and
investigative arm of Congress, exists to support Congress in meeting its
constitutional responsibilities and to help improve the performance and
accountability of the federal government for the American people. GAO
examines the use of public funds; evaluates federal programs and policies;
and provides analyses, recommendations, and other assistance to help
Congress make informed oversight, policy, and funding decisions. GAO's
commitment to good government is reflected in its core values of
accountability, integrity, and reliability.

Obtaining Copies of GAO Reports and Testimony

The fastest and easiest way to obtain copies of GAO documents at no cost
is through GAO's Web site ( www.gao.gov ). Each weekday, GAO posts
newly released reports, testimony, and correspondence on its Web site. To
have GAO e-mail you a list of newly posted products every afternoon, go to
www.gao.gov and select "Subscribe to Updates."

Order by Mail or Phone

The first copy of each printed report is free. Additional copies are $2
each. A check or money order should be made out to the Superintendent of
Documents. GAO also accepts VISA and Mastercard. Orders for 100 or more
copies mailed to a single address are discounted 25 percent. Orders should
be sent to:

U.S. Government Accountability Office 441 G Street NW, Room LM Washington,
D.C. 20548

To order by Phone: Voice: (202) 512-6000 TDD: (202) 512-2537 Fax: (202)
512-6061

To Report Fraud, Waste, and Abuse in Federal Programs

Contact:

Web site: www.gao.gov/fraudnet/fraudnet.htm E-mail:
[email protected] Automated answering system: (800) 424-5454 or (202)
512-7470

Congressional Relations

Gloria Jarmon, Managing Director, [email protected] (202) 512-4400 U.S.
Government Accountability Office, 441 G Street NW, Room 7125 Washington,
D.C. 20548

Public Affairs

Paul Anderson, Managing Director, [email protected] (202) 512-4800
U.S. Government Accountability Office, 441 G Street NW, Room 7149
Washington, D.C. 20548

www.gao.gov/cgi-bin/getrpt?GAO-07-245 .

To view the full product, including the scope
and methodology, click on the link above.

For more information, contact Kate Siggerud at (202) 512-2834 or
[email protected].

Highlights of [40]GAO-07-245 , a report to congressional addressees

February 2007

HIGHWAY EMERGENCY RELIEF

Reexamination Needed to Address Fiscal Imbalance and Long-term
Sustainability

Since 1972, Congress has authorized $100 million a year for highway
disaster recovery needs through the Federal Highway Administration's
(FHWA) Emergency Relief (ER) program. Increasingly, the program's actual
costs have exceeded this amount, and Congress has provided additional
funding. Because of this fiscal imbalance between program funding and
program needs, we reviewed ER under the Comptroller General's authority to
determine the (1) total funding, distribution of funds among the states,
and disaster events funded; (2) sources of funding provided and financial
challenges facing the program; and (3) scope of activities eligible for
funding and how the scope of eligible activities has changed in recent
years. GAO's study is based on financial data, document analysis,
stakeholder interviews, and site visits, among other methods.

[41]What GAO Recommends

To place the ER program on a sustainable financial footing, Congress
should reexamine the level and source of funds for future demands and
consider tightening eligibility standards. FHWA should, within its
authority, tighten eligibility standards, recapture unused funds, and seek
rescission of unneeded funds. DOT generally agreed with the facts
presented and took no position on our recommendations.

During the 10-year period of 1997 to 2006, ER provided about $8 billion to
states, the District of Columbia, Puerto Rico, American territories, and
federal agencies, a total of 56 states and other jurisdictions. About 70
percent of these funds has gone to 5 states--California, Florida,
Louisiana, Mississippi, and New York--that have been especially affected
by major disaster events, such as Hurricane Katrina.

Since 1990, 86 percent of the ER program has been funded through
supplemental appropriations as the program's annual demands have exceeded
the $100 million annual authorization. Even excluding extraordinary
disasters, those exceeding $100 million in eligible damage per event, the
program still needed $271 million per year for smaller eligible events.
Meanwhile, the program has been authorized at a constant $100 million
level since 1972, resulting in the current authorization being worth about
one-fourth the authorization level of 1972. Until Hurricane Katrina,
Congress funded extraordinary disasters through the Highway Trust Fund,
but with Trust Fund balances dwindling, in 2005, Congress designated the
General Fund as the source of future ER supplemental funding. But the
nation faces a pending fiscal crisis, raising concerns about future use of
the General Fund and financial sustainability of the ER program. Despite
funding concerns, FHWA does not routinely recapture unused program funds
by reviewing the program's state balances to identify potentially unneeded
funds. GAO also identified $62 million in potentially unneeded statutory
allocations from past disasters that could be recaptured.

Activities eligible for ER funding include the repair or reconstruction of
highways and roads that are supported by the Federal-aid Highway program,
and of roads on federal lands that have suffered serious damage from
natural disasters or catastrophic failures due to external causes. ER
funds are not intended to replace other federal-aid, state, or local funds
to increase capacity, correct nondisaster-related deficiencies, or make
other improvements. However, contributing to future financial
sustainability concerns is the fact that the scope of eligible activities
funded by the ER program has expanded in recent years with congressional
or FHWA waivers of eligibility criteria or changes in definitions. As a
result, some projects have been funded that go beyond repairing or
restoring highways to predisaster conditions--such as the $441 million
Devil's Slide project and $811 million I-880 project in
California--projects that grew in scope and cost to address environmental
and community concerns. Also, Congress and FHWA have expanded eligibility
to allow additional types of work, such as a gradual flooding of a lake
basin, to be funded. Congress has also directed that in some cases the
program fully fund projects rather than requiring a state match. Finally,
varying interpretations of what constitutes a damage site have led to
inconsistencies across states in FHWA's application of ER eligibility
standards.

References

Visible links
  32. http://www.gao.gov/cgi-bin/getrpt?GAO/RCED-96-136
  40. http://www.gao.gov/cgi-bin/getrpt?GAO-07-245
*** End of document. ***