On February 4, the Senate Banking, Housing and Urban Affairs marked up the transit portion of the Senate’s TEA-21 reauthorization bill (S.1072) by voice vote. The transit title will be introduced as an amendment to the reauthorization bill on the Senate floor.

The Banking Committee bill authorizes $56.5 billion in transit spending over the next six years. Roughly $47 billion of the total funding level would be derived by tapping into revenue from the highway trust fund. The other $9.5 billion is slated to come from the general fund. Traditionally, 80% of federal transit funding comes from the highway trust fund and 20% comes from the general fund.

With $9.5 billion in transit funding designated to come from the general fund, transit advocates are concerned that such money will have to compete with other non-defense and non-homeland security discretionary programs. Funding for the heralded New Starts program would come from the $9.5 billion, which is disconcerting to recipients of New Starts funds and those project sponsors vying for FFGAs. Senators from the Banking Committee and the Senate EPW Committee are working on an amendment, to be introduced on the floor, which would provide a guarantee for both highway and transit dollars. The $9.5 billion in funding that would come from the general fund would also be included in the budget firewall, which would disallow appropriators from letting such transit programs compete with other programs for funding in the annual appropriations process.

The Senate Banking bill would retain the current funding structure of federal transit programs. The funding rations for the Capital Grants Program under current law are 40% for New Starts, 40% for Rail Modernization, and 20% for the Bus and Bus Facilities Program. The new transit title would alter the ratios to read 40%, 37% and 23%, respectively.

Also, much to the delight of transit advocates, the maximum federal cost share for transit capital projects will stay at 80%. The Bush Administration was proposing a maximum federal cost share of 50%, but such a proposal was rebuffed by a majority of lawmakers and transit agencies.

With regard to New Starts, the bill would change the reporting schedule and the contents of the annual New Starts Report. The reporting schedule would report only those projects that the administration is recommending for funding over the next three years. The projects listed would be limited to funding that is anticipated to be available for new projects. Projects listed would then be rated on a five-point scale: high, medium-high, medium, medium-low, or low.

While there was debate on whether to allow non-fixed guideway projects to compete for New Starts funding, only fixed guideway projects will remain eligible for funding under the New Starts program, if the project is seeking more than $75 million in federal funds. Smaller projects, seeking under $75 million, would still be eligible to receive funding under the existing New Starts program. Such projects would have to be cost-effective and the FTA would be given discretion to develop project evaluation criteria. Non-fixed guideway bus rapid transit projects seeking less than $75 million in federal fund would be eligible to receive New Starts funding.

Also, the Banking Committee bill would prevent potential FFGA recipients from seeking New Starts funding for performing an Alternative Analysis (AA), but the committee would set aside $20 million in funding annually for costs associated with performing Alternative Analysis. The bill also adds two planning factors to the New Starts process: "promote consistency between transportation improvements and state and local land use planning and economic development patterns, and enhance integration and connectivity of the transportation system, across and between modes for people and freight."