Excerpts from:


Federal Transit Administration

The Federal Transit Administration (FTA) was established as a component of the Department of Transportation on July 1, 1968, when most of the functions and programs under the Federal Transit Act (78 Stat. 302; 49 U.S.C. 1601 et seq.) were transferred from the Department of Housing and Urban Development. Known as the Urban Mass Transportation Administration until enactment of the Intermodal Surface Transportation Efficiency Act of 1991, the Federal Transit Administration administers federal financial assistance programs for planning, developing, and improving comprehensive mass transportation systems in both urban and non-urban areas.

Much of the funding for the Federal Transit Administration is provided by annual limitations on obligations provided in appropriations Acts. However, direct appropriations are required for portions of other accounts.

Authorization for the programs funded by the Federal Transit Administration is contained in the Transportation Equity Act for the 21st Century (TEA-21), which will expire on September 30, 2003. Because reauthorization actions have not yet been completed, the Committee has continued the fiscal year 2003 program levels as if authorized through fiscal year 2004.

TEA-21 also amended the Budget Enforcement Act to provide two additional discretionary spending categories, the highway category and the mass transit category. The mass transit category is comprised of transit formula grants, transit capital funding, Federal Transit Administration administrative expenses, transit planning and research and university transportation center funding. The Budget Enforcement Act amendments will also expire on September 30, 2003, without actions by Congress.

The authorized level for mass transit category obligations were capped at $7,226,000,000 in fiscal year 2003. After an across-the-board cut of .65 percent, mass transit category obligations were $7,179,030,000. Any additional appropriated funding above the levels guaranteed (that which could be appropriated from general funds authorized under section 5338(h)) is scored in the budget process against the non-defense discretionary category.


Revisions of Congressional intent- The Committee is troubled by actions taken by FTA this year to revise the intent of Congressional programs without discussing such measures with the Committee. Although the Committee appreciates the prompt intervention of the Office of the Secretary in this matter, the Committee reiterates to FTA that it is improper for DOT agencies to take actions changing the Congressionally-approved scope of programs without receiving the approval of the House and Senate Committees on Appropriations. FTA is directed to consult with the House and Senate Committees on Appropriations before making any decisions clarifying Congressional intent.

Transit project performance standards- TEA-21 allocated forty percent of transit funds to new starts and forty percent to the modernization of existing rail systems, leaving twenty percent for bus systems. This method has skewed the outcomes of local analysis because more federal funding is available for new fixed guideway systems without regard to overall priorities. The Committee believes strongly that high-capacity transit systems, regardless of the technology, that will move the most people, relieve the most congestion, produce the largest increase in transit ridership, and have the greatest positive cost-benefit ratio, should be those that are rewarded with federal investment.

The Committee believes that each new start project, in order to qualify for a full funding grant agreement, should be required to show that its locally-preferred alternative will attract and move more transit riders, at the lowest cost per rider, than other modal alternatives. This would help shift the nation's mass transit funding system to a more cost-efficient, outcomes-based system and away from the funding category-based system currently in place. As long as eighty percent of federal funding is reserved for fixed guideway technology, local transit agencies will continue to presume that the answer to their transit needs will be found in that technology. The Committee believes that the current funding criteria do not adequately provide incentives for the best transit investments. The Federal Government can no longer continue to allocate scarce transportation resources without maximizing the benefits relative to the costs.

Reauthorization of transit programs- The administration's proposal for reauthorization of federal transit programs calls for a significant restructuring of FTA programs. In particular, the administration is proposing to shift the resources currently provided in the section 5309 bus and bus facilities program to the urbanized area formula and state-administered formula programs, an expanded new starts program, and performance incentive grants. One of the justifications for the elimination of this discretionary program is that historically `only half of the States have received statewide earmarks' and that this `shift in resources will make for a more equitable distribution across the Nation', according to materials submitted for the record by FTA. The Committee is very concerned that this proposal would not make a more equitable distribution, but simply shift control of Federal funds away from the Congress. In the last two fiscal years, every state, as well as the District of Columbia and the Virgin Islands, has received a transit allocation in the annual transportation appropriations bill, and the Committee is troubled that FTA is trying to make it seem as if states' bus funding is being shortchanged at the hand of Congressional appropriators.

Project management oversight activities- The Committee directs that any savings from funding of any administrative expenditures be used to increase funding for project management oversight activities. It is critical that FTA continue to support strong project and financial oversight activities, particularly as more communities are applying for capital grants funding as urbanized areas grow.

Further, the Committee encourages FTA to provide for additional planning experience in the regional and metropolitan offices, as it is essential to have adequate knowledge of the fundamentals of these activities in the offices that are most closely involved in the development of individual projects.

The Committee also directs that FTA submit to the House and Senate Committees on Appropriations the quarterly FMO and PMO reports for each project with a full funding grant agreement.

To further support oversight activities, the bill continues a provision requiring FTA to reimburse the Department of Transportation Office of Inspector General $2,000,000 for costs associated with audits and investigations of transit-related issues, including reviews of new fixed guideway systems. This reimbursement must come from funds available for the execution of contracts. Over the past several years, the IG has provided critical oversight of several major transit projects, which the Committee has found invaluable. The Committee anticipates that the Inspector General will continue such oversight activities in fiscal year 2004.

Office of research, demonstration, and innovation- The Committee is concerned with the effectiveness and worth of the office of research, demonstration, and innovation. Therefore, FTA shall report to the House and Senate Committees on Appropriations on all expenditures on research, demonstration and innovation activities for the past three fiscal years and all planned expenditures for fiscal year 2004. The report shall include explanations of how each activity is based on advancing transit initiatives, and how this work is implemented within the industry. The report is due by September 30, 2003. An update of this information should also be provided in FTA's fiscal year 2005 budget justification.

Full funding grant agreements (FFGAs)- TEA-21, as amended, requires that FTA notify the House and Senate Committees on Appropriations as well as the House Committee on Transportation and Infrastructure and the Senate Committee on Banking, Housing and Urban Affairs, sixty days before executing a full funding grant agreement. In its notification to the House and Senate Committees on Appropriations, FTA shall include the following: (1) a copy of the proposed full funding grant agreement; (2) the total and annual federal appropriations required for that project; (3) yearly and total federal appropriations that can be reasonably planned or anticipated for future FFGAs for each fiscal year through 2004; (4) a detailed analysis of annual commitments for current and anticipated FFGAs against the program authorization; (5) an evaluation of whether the alternatives analysis made by the applicant objectively and fully weighed all viable alternatives; and (6) a financial analysis of the project's cost and sponsor's ability to finance, which shall be conducted by an independent examiner and which shall include an assessment of the capital cost estimate and the finance plan; the source and security of all public- and private-sector financial instruments; an operating plan which enumerates the project's future revenue and ridership forecasts; and planned contingencies and risks associated with the project.

The Committee also directs FTA to inform the House and Senate Committees on Appropriations in writing thirty days before approving scope or budget changes in any full funding grant agreement. Correspondence relating to scope changes shall include any budget revisions or program changes that materially alter the project as originally stipulated in the full funding grant agreement, including any proposed change in rail car procurements.

The Committee further directs FTA to notify the House and Senate Committees on Appropriations fifteen days before any project in the new starts process is given approval by FTA to advance to preliminary engineering or final design.

Advanced vehicle program- The transit industry has been leading the nation's heavy-duty vehicle industry in the use of clean fuel vehicle technology helping to improve air quality and lessen our nation's dependence on foreign oil. In the past ten years, the use of alternative fuels in the transit industry has increased dramatically. In 1993, sales of alternative fuel transit buses was less than one percent of the total. Today, 20% or more of all new transit buses are fueled by natural gas. At the end of 2002, there were over 6,000 natural gas transit buses in use.

DOT and FTA also have played an important role in supporting the development of heavy-duty hybrid electric vehicles through its support of the consortia-based advanced vehicle program (AVP), which supports the early stage development of every North American hybrid electric bus manufacturer. Based on its success in facilitating the development of heavy-duty hybrid electric technology, the Committee feels that AVP would be the ideal venue for initiating a major fuel cell bus program in the United States. The consortia model used by AVP helps to encourage the flow of information and networking to a much higher degree than traditional programs. Therefore, the Committee encourages FTA and DOT to actively develop operations of AVP and build on the agency's strong relationship with the transit industry.

Charter service activities- Section 604 of title 49 of the United States Code states that recipients of equipment or facilities funding from the Federal Transit Administration may not use that property to provide private charter service, with few exceptions. The Committee is concerned that despite these statutory regulations many local transit agencies continue to provide charter service under the guise that it may be `regular and continuing service'. The Committee is concerned that FTA is not enforcing this statute to the full extent of the law. These activities present a great injustice to private operator services, which should not have to compete with a government entity that uses federal subsidies to purchase their equipment. The Committee directs FTA to revisit its enforcement of this statute and ensure that it is not being exploited. A report on FTA's review of this situation shall be submitted to the House and Senate Committees on Appropriations no later than October 1, 2003.