Transportation Equity Act for the 21st Century (P.L. 105-178):
An Overview of Environmental Protection Provisions

David M. Bearden
Environment and Natural Resources Policy Division

July 31, 1998

98-646 ENR

Summary

On June 9, 1998, President Clinton signed into law the Transportation Equity Act for the 21st Century (TEA 21, P.L. 105-178). The law authorizes a total of $218 billion for federal highway and mass transit programs from FY1998 to FY2003 and sets aside roughly $12.4 billion for several environmental programs. It authorizes a total of $8.1 billion from FY1998 to FY2003 for the Congestion Mitigation and Air Quality Program to assist states in complying with federal air quality standards and a total of $3.3 billion over the next 6 years for transportation enhancements that are environmentally related. TEA 21 also authorizes funding for three new environmental programs, including a total of $750 million from FY1999 to FY2003 for the Clean Fuels Formula Grant Program to assist transit systems in purchasing low-emission buses, a total of $250 million from FY1999 to FY2003 for the Advanced Vehicle Technologies Program under which environmental technologies are eligible for funding, and an unspecified amount from FY1998 to FY2003 for the Surface Transportation-Environment Cooperative Research Program. Three other environmental provisions address the operation of low-emission vehicles in high occupancy vehicle lanes, the environmental review process for transportation projects, and the extension of tax benefits for alcohol-based fuels. During floor debate, the Senate also added two unrelated provisions that codify the Administration's schedule for implementing the new air quality standards for ozone and fine particulates and authorize a total of $50 million from FY1999 to FY2003 under the Clean Vessel Act for a competitive grant program to prevent vessel sewage discharges. This report will not be updated.

Introduction

On June 9, 1998, President Clinton signed into law the Transportation Equity Act for the 21st Century (TEA 21, P.L. 105- 178), which authorizes a total of $218 billion for federal highway and mass transit programs from FY1998 to FY2003. The law significantly increases funding for programs previously authorized under the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA, P.L. 102-240) and includes new initiatives as well. The House and Senate agreed to the conference report on TEA 21 (H.Rept. 105-550) on May 22, 1998. The President also signed into law the Internal Revenue Service Restructuring and Reform Act (P.L. 105-206) on July 22, 1998, which includes provisions under Title IX to correct technical errors in TEA 21.

Funding for most federal surface transportation projects comes from the Federal Highway Trust Fund, which derives its revenues primarily from federal taxes on gasoline and diesel fuels. Each state will receive an annual apportionment of these funds according to formulas defined in TEA 21. While the majority of federal programs operate with budget authority provided in annual appropriations legislation, surface transportation programs funded from the Federal Highway Trust Fund operate with contract authority under which the Department of Transportation (DOT) can obligate funding for projects that will be paid at a certain date in the future. TEA 21 limits the amount of funding that DOT can obligate for transportation projects from the apportionments distributed among the states during a fiscal year. Unobligated amounts from these apportionments remain available, and DOT can commit these funds for projects in the future, as long as the total obligated amount still does not exceed the limitation in effect for that fiscal year.

Of the $218 billion authorized for highway and mass transit projects, TEA 21 sets aside roughly $12.4 billion for several programs that address the environmental impacts of surface transportation. The majority of this funding is reserved for air quality projects under the Congestion Mitigation and Air Quality Program (CMAQ) to assist states in complying with federal air quality standards and the new Clean Fuels Formula Grant Program to assist transit systems in purchasing low-emission buses. TEA 21 also increases funding for transportation enhancements that are environmentally related and establishes new programs to conduct environmental research and encourage advanced vehicle technologies (including environmental technologies). Other provisions address the operation of low-emission vehicles in high occupancy vehicle lanes, streamline the environmental review process for transportation projects, and extend tax benefits for alcohol-based fuels. The Senate also added two unrelated provisions during floor debate to codify the Administration's schedule for implementing the new air quality standards for ozone and fine particulates and reauthorize funding under the Clean Vessel Act for grants to prevent vessel sewage discharges.

This report provides an overview of selected provisions under TEA 21 that address the environmental impacts of surface transportation, describes the scope and function of environmental programs authorized under the law, and indicates the amount of funding set aside for their respective activities.

Congestion Mitigation and Air Quality Program

The CMAQ program funds transportation projects that lower emissions to assist states in complying with the National Ambient Air Quality Standards for carbon monoxide, ozone, and particulate matter. The Clean Air Act requires the Environmental Protection Agency (EPA) to develop safe standards for these pollutants. The CMAQ program is based on the concept that lowering the number of miles traveled by motor vehicles and reducing congestion to make vehicles operate more efficiently can reduce pollution and help states comply with the standards. Most transportation control measures listed under section 108 of the Clean Air Act are eligible for CMAQ funds. Section 1110 of TEA 21 expands eligibility to include measures that reduce emissions under cold-start conditions. It also clarifies funding eligibility for alternative fuel projects. A CMAQ project generally falls into one of the following categories:

-- public transit;
-- traffic flow improvements;
-- rideshare programs;
-- traffic demand management programs;
-- bicycle and pedestrian projects;
-- public education;
-- vehicle inspection and maintenance programs; or
-- alternative fuel conversion programs.

ISTEA authorized a total of $6.0 billion for CMAQ projects from FY1992 to FY1997. Section 1101 of TEA 21 increases funding for CMAQ projects by $2.1 billion from FY1998 to FY2003 for a total authorization of $8.1 billion over the next 6 years. Under section 1103, states with nonattainment and maintenance areas will continue to receive CMAQ funds according to a formula based on the severity of air pollution in those areas and the population residing in them. The law also revises the formula to award additional funding to states with submarginal nonattainment areas for ozone and maintenance areas for carbon monoxide and ozone. (See Endnote 1.) As in the past, states that do not have any nonattainment or maintenance areas will receive 0.5% of the total annual CMAQ apportionment and will have the flexibility to use this amount for transportation projects that are eligible under CMAQ or the Surface Transportation Program. Section 1310 allows each state to transfer a portion of its CMAQ funds to other highway programs that it determines to have a higher priority if certain conditions are met. Transferred funding is limited to 50% of the increase in a state's CMAQ apportionment compared to what it would have received if the program had been funded at $1.35 billion for that fiscal year. In addition to these provisions, section 1110 requires the National Academy of Sciences to study the extent to which CMAQ projects have helped states to reduce emissions, recommend measures to improve the effectiveness of the program, and determine whether additional pollutants could be reduced effectively with CMAQ funds.

Transportation Enhancements

The Surface Transportation Program requires states to reserve 10% of their funding for transportation enhancements that strengthen the cultural, aesthetic, and environmental aspects of the nation's surface transportation system. Section 1201 of TEA 21 adds two new categories of eligible activities: transportation museums and measures to reduce vehicle-caused wildlife mortality. It also expands the category for scenic and historic highway programs to include tourist and welcome center facilities and the category for bicycle and pedestrian facilities to include safety and educational activities. The categories of enhancements include:

-- facilities for bicycles and pedestrians;
-- acquisition of scenic easements and scenic or historic sites;
-- scenic or historic highway programs;
-- landscaping and other scenic beautification;
-- historic preservation;
-- rehabilitation and operation of historic transportation buildings, structures, or facilities;
-- preservation of abandoned railway corridors;
-- control and removal of outdoor advertising;
-- archaeological planning and research;
-- mitigation of water pollution due to highway runoff;
-- transportation museums; and
-- measures to reduce vehicle-caused wildlife mortality.

ISTEA authorized a total of $2.4 billion for enhancements from FY1992 to FY1997. Section 1101 of TEA 21 increases funding for enhancements by $900 million from FY1998 to FY2003 for a total authorization of $3.3 billion over the next 6 years. Section 1215 also authorizes an additional $32.4 million in funding for designated enhancements in certain states. Section 1108 codifies the Administration's policy on administering the matching funds requirement for enhancements, under which states have the flexibility to calculate the non-federal share of funding based on individual projects, multiple projects, or a programmatic level. Similar to the flexibility provided for transferring CMAQ funds, section 1310 allows each state to transfer a portion of its funding set aside for enhancements to other highway programs that it determines to have a higher priority. Transferred funding is limited to 25% of the increase in funding for enhancements compared to the amount set aside from its apportionment in FY1997.

Use of High Occupancy Vehicle Lanes

Section 1209 of TEA 21 allows states the flexibility to permit a vehicle with only one occupant to operate in a high occupancy vehicle lane if the vehicle is certified under federal regulations as an inherently low-emission vehicle. The law authorizes states to implement this policy through September 30, 2003 and grants each state the right to revoke this policy within its borders if it determines that such action is necessary.

Environmental Review of Transportation Projects

The National Environmental Policy Act of 1969 (P.L. 91-190) requires environmental impact statements prior to issuing approvals, permits, or licenses for the construction of a transportation project. Some critics have expressed concerns over delays, duplication of effort, and costs associated with the current environmental review process. To address these concerns, section 1309 of TEA 21 authorizes DOT to cooperatively establish a schedule for the completion of the review process with the federal agencies responsible for reviewing each transportation project. To improve efficiency, the law requires agencies to conduct their reviews concurrently rather than sequentially unless concurrent review would alter federal law, result in an adverse effect on the environment, or not be possible without information developed during part of the review process. Additional costs to federal agencies for completing their reviews within established time limits are eligible for funding as project expenses under the Federal-Aid Highway Program.

Alternative Fuels

TEA 21 contains three provisions related to alternative fuels that offer air quality benefits. First, section 3008 creates a new Clean Fuels Formula Grant Program to help transit systems acquire clean fuel buses, improve facilities to accommodate them, and rebuild pre-1993 engines with clean fuel technology. To fund the program, section 3029 authorizes $150 million annually from FY1999 to FY2003 for a total authorization of $750 million over 5 years. Grant awards will be based on a formula that factors in the number of vehicles in a transit system's fleet, the number of passenger miles traveled, and the severity of air pollution in the recipient's area. Eligible technologies include: compressed natural gas, liquified natural gas, biodiesel fuel, battery power, alcohol-based fuel, hybrid electric power, fuel cells, clean diesel fuel, or similar technologies. Second, section 3036 requires the General Accounting Office to submit a report by January 1, 2000 on various low and zero emission fuel technologies for transit vehicles. The report will address the status, development, and use of these technologies, their environmental benefits, and costs. Third, section 9003 continues incentives for the production, sale, and use of alcohol-based fuels by extending the excise tax reduction for such fuels through September 30, 2007 and the income tax credit through December 31, 2007.

Surface Transportation-Environment Cooperative Research Program

Section 5107 of TEA 21 authorizes DOT to establish a new Surface Transportation-Environment Cooperative Research Program. Its function will be to develop more accurate models for evaluating the environmental benefits of measures used in implementation plans to comply with environmental requirements; understand the factors that contribute to the demand for transportation; develop indicators of economic, social, and environmental performance of transportation systems; and study the relationship between highway density and ecosystem integrity. The law requires DOT to work with the Department of Energy and EPA to establish an advisory board for recommending environmental and energy conservation research, technology, and technology transfers related to surface transportation. It also authorizes the National Academy of Sciences to carry out program activities related to research, technology, and technology transfer. Section 5001 authorizes a total of $592 million for surface transportation research from FY1998 to FY2003 but does not specify how much is reserved for the Surface Transportation-Environment Cooperative Research Program.

Advanced Vehicle Technologies Program

Section 5111 of TEA 21 authorizes DOT to establish a new Advanced Vehicle Technologies Program to encourage research, development, and use of advances in vehicle technologies (including environmental technologies) to improve the efficiency, safety, and cost-effectiveness of the national transportation system. To fund the program, the law authorizes $50 million annually from FY1999 to FY2003 for a total authorization of $250 million over 5 years. The law authorizes DOT to promote technological advances through contracts, cooperative agreements, grants, and other transactions with other federal agencies and laboratories, state and local governments, businesses, and public or private research or educational organizations.

Implementation of New Air Quality Standards

On July 16, 1997, EPA finalized new air quality standards for ozone and particulate matter smaller than 2.5 micrometers in diameter (PM2.5). Added as an amendment during floor debate in the Senate, Title VI of TEA 21 requires EPA to follow the schedule for implementing the new air quality standards outlined in a Presidential memorandum dated July 16, 1997. According to the Administration's schedule, EPA would designate nonattainment areas under the new standard for ozone by July 16, 2000 and for PM2.5 by December 31, 2005. The implementation schedule for PM2.5 is later because the monitoring network for this pollutant is not yet in place as it is for ozone. (See Endnote 2.) Title VI also requires EPA to designate nonattainment areas under the new standard for PM2.5 prior to implementing new controls on regional haze, which would require states to develop and implement long-term strategies to attain a goal of remedying the impairment of visibility in national parks and wilderness areas resulting from air pollution. (See Endnote 3.)

Reauthorization of the Clean Vessel Act

The Clean Vessel Act of 1992 (P.L. 102-587) authorized a total of $40 million from FY1992 to FY1997 for a competitive grant program to help states prevent pollution from vessel sewage discharges. Discharges of raw or poorly treated sewage can spread microrganisms that cause a variety of illnesses such as hepatitis, typhoid, and cholera and can be transmitted by contaminated shellfish to humans. Sewage discharges also can contribute to lower oxygen levels in water and endanger fishery populations. Added as an amendment during floor debate in the Senate, section 7403 of TEA 21 reauthorizes the grant program at $10 million annually from FY1999 to FY2003 for a total authorization of $50 million over 5 years. Funding comes from the Sport Fish Restoration Account of the Aquatic Resources Trust Fund, which is supported primarily by taxes on boat fuels. The Department of the Interior's Fish and Wildlife Service administers the grant program. Eligible activities include construction and renovation of shoreline pumpout and dump stations and projects to educate the public about the potential dangers of discharging raw or poorly treated sewage into waterways. Coastal states also can use grant awards for surveying the number of existing pumpout and dump stations and developing plans to ensure that all recreational vessels have access to such facilities.

ENDNOTES

1. Nonattainment areas are locations that have exceeded the federal air quality standards for one or more pollutants. Maintenance areas are locations that previously were in nonattainment status but have since met the standards. Under the Clean Air Act, states must develop plans to reduce emissions and comply with the standards in nonattainment areas and to control emissions and sustain air quality in maintenance areas. Nonattainment areas for ozone are designated according to classifications that identify the severity of air pollution in a particular location. The classification of submarginal indicates that an area is in attainment according to incomplete monitoring data and that it likely would be in nonattainment if the data were complete.

2. For an overview of the standards and a discussion of relevant issues, refer to CRS Report 97-8 ENR, < ahref="../air/air-15.cfm">Air Quality: Background and Analysis of EPA's 1997 Ozone and Particulate Matter Standards, by John E. Blodgett, Larry B. Parker, and James E. McCarthy.

3. For further discussion of these requirements, refer to CRS Report 97-1010 ENR, Regional Haze: EPA's Proposal to Improve Visibility in National Parks and Wilderness Areas, by James E. McCarthy and Robert Meltz.