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

No. 42A (Update) February 26, 1998

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. S. 1173 was before the Senate last October but it was returned to the Calendar

NOTEWORTHY

HIGHLIGHTS

[Parliamentary Note: Last year, after S. 1173 had been reported by the Environment and Public Works Committee, it was discovered the bill contained a technical violation of the Budget Act. During floor consideration in October, a committee perfecting amendment was then offered to correct this technical violation. The amendment would not make any substantive changes. Additionally, last October, the Majority Leader, in response to Democratic opposition to the bill's consideration, moved to recommit the bill, with instructions to report back forthwith, then offered a substitute amendment and a perfecting amendment, thus "filling the amendment tree." Under the February 26 unanimous consent agreement, the committee perfecting amendment that corrects the budget violation now has been incorporated into S. 1173, as reported, and that bill has been modified to be a substitute; further, all of the other amendments offered to "fill the tree" were withdrawn. And, so now, the bill before the Senate is amendable in two degrees.]

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
On October 7, 1997 (after the bill was reported), the Congressional Budget submitted its cost estimate for S. 1173: CBO estimates spending would total about $142 billion over the 1998- 2003 period, and that the costs fall within the transportation budget function. Of the total amount, $131.6 billion would be discretionary outlays and $10.3 billion would be direct spending. Of the $131.6 billion, about $129 billion would come from contract authority, and $2.6 billion would come from amounts authorized to be appropriated by S. 1173 or already appropriated in prior years. Under the CBO baseline, direct spending outlays would total $8.3 billion over the 1998-2003 period and discretionary outlays from contract authority would total about $117 billion over the same period. A minor revenue loss is estimated: the JCT estimates that the new credit program would result in a revenue loss of $79 million over the six years.

Unfunded Mandates
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

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

A letter from Secretary Slater to Senators was anticipated but not available at press time. The Administration did issue its Statement of Administration Policy on October 8, 1997, expressing pleasure that S. 1173 was a six-year bill, and that "it addresses many of the President's priorities," but the policy statement offers a variety of concerns about amendments, including any attempt to strike the 10-percent minority small business set-asides included in the Disadvantaged Business Enterprise Program [see Possible Amendments]. Other concerns about possible amendments include those that would weaken: uniform certification provision for highway projects; the National Environmental Policy Act; the Congestion Mitigation and Air Quality Improvement Program; the Clean Air Act; and safety provisions.

POSSIBLE AMENDMENTS

Note: Under the February 26 U.C. no amendments related to financing or funding will be in order until Wednesday, March 4, and so this list contains only known possible amendments on other issues.

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."

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).

Byrd. To mandate a study on drinking and driving, and to require states to adopt a blood alcohol content level of .08 to be eligible for federal funds under this bill.

Dorgan. To prohibit open containers of alcoholic beverages in vehicles.

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

Banking Committee Amendment. [On October 8, 1997, the Banking Committee reported out S. 1271, 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 —

Commerce Committee Amendment. [On October 23, 1997, the Commerce Committee reported out its transportation safety title to S. 1173, which would provide more than $1.1 billion over the next six years to safety programs.] The bill includes the following:

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: