U.S. Senate Republican Policy Committee - Larry E. Craig, Chairman - Jade West, Staff Director

No. 42 October 7, 1997

S. 1173 -- Intermodal Surface Transportation Efficiency Act of 1997

Calendar No. 188

Reported by the Committee on Environment and Public Works on October 1, 1997, with an amendment to change the name of the bill, by a vote of 18 to 0. S. Rept. 105-95.

NOTEWORTHY

HIGHLIGHTS

S. 1173 (referred to as ISTEA II) is a comprehensive six-year measure to reauthorize the Federal-aid highway, highway safety, and other surface transportation programs, providing $145 billion over the six-year period. That amounts to a 20-percent nominal increase (5 percent in real dollars) over the previous authorization, ISTEA I, signed into law by President Bush in 1991. [See Background for details about the goals and contents of 1991 ISTEA.]

Summary of the State Allocation Changes

The bill replaces the apportionment formulas provided in 1991 ISTEA, which were based on each State's historical share of apportionments received during the period 1987 through 1991. Instead, this bill apportions funds based on current transportation measurements in each State.

Under the bill, each State will receive a minimum of 90 percent of its annual contributions to the Highway Account of the Highway Trust Fund, which is the same percentage as 1991 ISTEA, except that the percentage is based on 100 percent of a State's annual contributions to the Highway Trust Fund, rather than less than 80 percent of the total under 1991 ISTEA. The bill retains the 1 percent set-aside for metropolitan planning (consistent with current law). All factors used in the apportionment formulas are to be based on the latest available data and updated each year. These changes are contained in section 1102, and are explained below.

Interstate and National Highway System(INHS): The component includes the Interstate Maintenance account, the Interstate bridge account and the National Highway System (NHS) account. Each State is guaranteed a minimum of one-half of one percent of total INHS program funding. The apportionment provided in the bill is as follows:

Surface Transportation Program (STP) provisions also provide for a one-half of one percent minimum apportionment to each State. The STP funds are calculated as follows:

Adjustments: In addition, this bill replaces the five apportionment adjustments provided in 1991 ISTEA with two adjustments, the "ISTEA transition" adjustment and the Minimum Guarantee.

ISTEA Transition adjustment:

Minimum Guarantee:

Summary of Other Bill Provisions

(These highlights are provided by the Majority Staff of the Committee on Environment and Public Works)

Measures to Maximize Limited Federal Resources:

Highway Safety Provisions:

Increases Environmental Provisions:

Program Streamlining and Flexibility Improvements:

Planning and Research:

Provisions for Diverse Transportation Needs in the Different Regions:

BACKGROUND

1991 ISTEA

The original ISTEA became law on December 18, 1991. Its three principal goals were intermodalism, flexibility, and efficiency, intended to carry out the larger goal of a productive and effective national transportation system. The national intermodal transportation system established in ISTEA connects all forms of surface transportation in a unified and integrated manner. It includes the National Highway System, which consists of the Interstate System and those principal arterial roads deemed essential for national defense, intermodal transfer facilities, and international commerce and border crossings. It also provides improved access to ports and airports to increase national and global commerce. The 1991 ISTEA also sought to promote efficient movement of passengers and freight, increased productivity growth, reduced air pollution, and reduced traffic congestion.

National Highway System Designation Act of 1995

In 1995, President Clinton signed the National Highway System Designation Act. The NHS consists of the Interstate System and those principal arterial routes that have been deemed essential for interstate and regional commerce and travel, national defense, intermodal transfer facilities and trade. Of these some 161,000 miles of roads, 75 percent are rural roads and 25 percent are urban roads.

ISTEA II

ISTEA II is intended to further develop, improve and maintain the National Highway System. ISTEA II will dedicate about 50 percent of the total annual transportation funds provided in this bill to the maintenance and development of this premier transportation network. This total funding is an increase from 1991 ISTEA in which 40 percent was dedicated to the National Highway System.

According to the Committee Report, ISTEA II continues the transportation policy of the United States "to develop a National Intermodal Transportation System that is economically efficient and environmentally sound, provides the foundation for the Nation to compete in the global economy, and will move people and goods in an energy efficient manner."

COST

Budget Authority

The Committee Report states that a letter from the Congressional Budget Office containing its outlay estimates will be published in the Congressional Record as soon as the letter is received. At the time of publication of this Legislative Notice, no CBO letter has been received by the Committee. The bill provides $145 billion in contract authority over six years, beginning in FY 1988, which is 20 percent higher than the amount authorized in 1991 ISTEA, and stays within the parameters of the budget agreement (P.L. 105-33).

Unfunded Mandates

In addition, the Committee evaluated the bill pursuant to the Unfunded Mandates Reform Act of 1995 (PL 104-4), and concluded that the bill imposes "no Federal intergovernmental unfunded mandates on State, local or tribal governments. . . or Federal private sector mandates."

Regulatory Impact

Finally, the Committee states that the regulatory impact of the bill "is expected to be minimal," noting that the only provision having a "significant" regulatory impact is section 1407. That section ensures that the testing standard for air bags will be based on the simultaneous use of air bags and manual seat belts. The Secretary of Transportation is directed to issue revised standards that are consistent with that section.

OTHER VIEWS

Senators Thomas, Sessions, Moynihan, and Lautenberg each filled additional views.

Senator Thomas generally praised the bill as a important first step to bringing an equitable return of tax dollars to Wyoming. He also praised the creation of the Cooperative Federal Lands Program to help Yellowstone and other National Parks meet their roadway repair needs.

Senator Sessions takes exception to the committee report language suggesting that the "Disadvantaged Business Enterprise Program," set forth in section 1111 of the bill, would pass the new constitutional test enunciated by the U.S. Supreme Court in Adarand Constructors, Inc. v. Pena, 115 S.Ct. 2097 (1995). Senator Sessions observes that the bill "simply reenacts without change the same statutory language that was invalidated in Adarand Constructors." Since "this section is neither supported by a compelling governmental interest, nor [is it] narrowly tailored," he concludes, "I have no doubt but that this section is unconstitutional."

Senator Moynihan endorsed the statement of principles that were set out in the 1991 ISTEA, which were not altered by this bill. He included the 1991 principles verbatim in his Additional Views.

Senator Lautenberg supports a number of provisions in the bill, but indicated his disappointment that it "eliminates the national focus on bridges, does not adequately address infrastructure needs, and unfairly shortchanges certain states." He expressed his disappointment that the bill fails to meet the "basic test of sound policy and fairness" by not using its 20-percent authorization level increase over 1991 ISTEA to ensure that no State would have a cut in transportation funding below its level of the previous year.

ADMINISTRATION POSITION

In a letter to Committee Chairman John Chafee, dated September 16, 1997, the Secretary of Transportation indicated support for the bill's conformity with the bipartisan balanced budget agreement and the absence of any new demonstration projects. The Secretary also expressed appreciation that "many of the President's priorities were included," and expressed strong objections to any attempt to strike the 10-percent minority small business set asides included in the Disadvantaged Business Enterprise Program. [See Possible Amendments.] However, the Secretary also discussed the Administration's 13 concerns over various provisions in the bill, including:

POSSIBLE AMENDMENTS

McConnell -- To bring the bill into compliance with Adarand v. Pena, by striking the Disadvantage Business Enterprise Program (section 1111), and replacing it with an Emerging Small Business Program that "will provide contracting opportunities for all small businesses -- without regard to race, color, national origin, or gender."

Gramm/Byrd -- To provide that the 4.3-cents-per-gallon Clinton gas tax, which was moved from "deficit reduction" to the "Highway Trust Fund" in the Balanced Budget Act of 1997 (PL 105-33), could be appropriated under ISTEA notwithstanding the budget authority allocation to the Committee on Environment and Public Works under the FY 1998 Budget Resolution.

Kennedy -- To change the State allocation formula.

Mack -- To permit States to "opt out" of the Federal Highway program.

Inhofe -- To allow CMAQ program (section 1123) funds to be used for new highway lane construction that is HOV-1 (Single Occupancy Vehicles).

_______. To place the Highway Trust Fund off-budget.

Banking Committee Amendment -- [On September 25, 1997, the Banking Committee reported out its title to S. 1173, which is the Federal Transit Act of 1997, reauthorizing mass transit programs funded primarily through the Federal Mass Transit Account. The Committee approved a six-year, $35.7 billion reauthorization, which is a 13-percent increase over that portion of the 1991 funding bill. The title was reported by a 17-1 vote.] The bill -- to be offered as a floor amendment --

Finance Committee Amendment -- [On October 1, 1997, the Finance Committee reported out by voice vote its title to S. 1173, which extends for six years the existing transportation taxes and tax credits.] This amendment includes the following changes: