On Friday, July 29, the U.S. House of Representatives passed the conference report on the Safe, Accountable, Flexible, Efficient Transportation Equity Act - Legacy for Users (SAFETEA-LU) by a vote of 412 to 8. Final Senate passage is set to occur before Congress begins its five-week August recess sometime this weekend. The impending enactment of SAFETEA-LU comes nearly two-years and 12 extensions after the expiration of its predecessor, TEA-21, in October 2003.

Before leaving town for the recess, Congress is expected to send the president a 12th stopgap extension of highway, transit, and highway safety programs, which also removes a non-germane provision relating to a 1995 base closure. Although President Bush signed an 11th extension to keep Department of Transportation (DOT) workers employed and programs operational through July 30, additional time is needed to give the clerks time to enroll the long-term reauthorization and get it to President Bush for a signing ceremony, although one has not yet been announced.

Early in the deliberations on TEA 21 reauthorization, NSSGA identified key priorities including:

• Provide growth funding levels for highway improvement and maintenance;
• Maintain firewalls to protect the Highway Trust Fund (HTF);
• Expand innovative financing tools and contracting techniques;
• Streamline the burdensome environmental procedures without harming the environment;
• Reform the Clean Air Act conformity process to close loop-holes used by anti-growth groups to stop or slow projects; and
• Reconstitute a federal program to conduct research, and for the first time designate specific dollars for aggregates research.

In a tax bill passed last year, Congress approved a NSSGA supported TCC recommendation to redirect 2.5 cents of the 13-cent user fee on ethanol allotted for deficit reduction into the HTF and eliminate the preferential treatment of ethanol versus gasoline by equalizing the user fee at 18.4 cents.

The following is a preliminary review of key provisions contained in SAFETEA-LU that relate to NSSGA priorities.

FUNDING

The $286.4 billion contained in this legislation guarantees a record amount for the nation's highway system, totaling nearly $193.2 billion over five years, and another $45.3 billion for the nation's transit systems. The annual levels of guaranteed obligations under the conference agreement, which covers five fiscal years (2005-2009), are as follows:

FY 2005 - $34.4 billion
FY 2006 - $36.0 billion
FY 2007 - $38.2 billion
FY 2008 - $39.6 billion
FY 2009 - $41.2 billion

An additional $3.7 billion in exempt highway obligations brings the total to the $193.2 billion level stated above.

State apportionments (the rate of return states can expect from what they send to Washington in the form of gasoline user fees) will rise from 90.5 percent in 2005, to 91.5 percent in 2006, and then to 92 percent in 2008. An NSSGA- and TCC-backed provision establishing a National Surface Transportation Infrastructure Financing Commission to report on the sufficiency of HTF revenues and alternative approaches for generating trust fund revenues is also contained in the legislation.

BONDS

NSSGA's Board supported positive, innovative alternative financing in this bill. The legislation authorizes $15 billion in tax-exempt private activity bonds that can be used for highway projects and surface freight transfer facilities. The authority to issue bonds expires after December 31, 2015. Bonding authority would be allocated by the DOT and would not be subject to the aggregate volume caps for private activity bonds. Eligible projects must receive Federal assistance under Title 23 (Highways) or Title 49 (Transportation). The bonds most likely would be incorporated in broader federal, state and private financial packages. The legislation provides that federal Davis-Bacon prevailing wages will apply to projects funded by these bonds, something that the administration has opposed.

The conference report, however, does not include a NSSGA supported provision of the Senate reauthorization bill that would have created a "Build America Corporation", proposed by Sens. James Talent (R-Mo.) and Ron Wyden (D-Ore.), to oversee the issuance of federally backed bonds to finance transportation improvement projects.

RESEARCH- New, First Time Dedicated to Aggregates

SAFETEA-LU dedicates $2.45 million annually for fiscal years 2006-2009 to conduct research to improve aggregates used in highways on the National Highway System. The research also includes $2.45 million annually for FY 06 to FY 09 for further development and deployment of techniques to prevent and mitigate alkali silica reactivity. This is a significant victory for NSSGA, which has fought alongside NAPA and ACPA, to reconstitute a federal research program to include a pavement materials research approach which designates specific funding for aggregates, asphalt, and concrete pavement research.

BUDGET FIREWALLS

The budgetary firewalls designed to protect the integrity of the HTF have been kept in place in SAFETEA-LU.

RABA

Revenue Aligned Budget Authority (RABA), which seeks to align federal gas tax revenues with highway funding, the root of many problems, during TEA-21 when it dipped into negative territory, has been reformed in the reauthorization legislation. Under SAFETEA-LU, there will be no reduction in funding for a fiscal year so long as there is at least a $6 billion balance in the HTF on Oct. 1 of that fiscal year.

ENVIRONMENTAL STREAMLINING

A number of environmental streamlining provisions that NSSGA and the ATM as well as the TCC coalitions have long advocated are included in SAFETEA LU. Among them is a 180-day statute of limitations for lawsuits to be filed challenging project permits, licenses or approvals following the completion of the environmental review process for the project. Also of great significance is language designating DOT as the lead agency for determining purpose and need related to transportation decisions as well as language on Section 4(f) reviews for historic resources, parkland, and wildlife refuges. The provision would allow an exemption from Section 4(f) procedures for historic resources that demonstrate minor, or "de minimis," impacts. For parkland, a similar de-minimis exemption would apply, but only to the law's requirements to avoid the resource; it would not apply to requirements related to minimizing impacts to the resource--although minimization efforts would not require analysis of alternatives. A requirement for a rulemaking related to selection of "prudent and feasible alternatives" under Section 4(f) also is included.

Delegation of authority to states for Categorical Exclusions under the National Environmental Policy Act (NEPA), as well as a pilot program to allow full delegation on a pilot basis to five states is in the legislation. Language allowing delegation of authority to states for intelligent transportation systems, recreational trails, and transportation enhancements, also is contained in the legislation. Conformity provisions that retain a four-year update cycle as well as a 10-year planning horizon as advanced by NSSGA are included in the bill.

NSSGA will provide additional details of SAFETEA LU after further analysis.