Air Quality and Transportation Enhancement Provisions in the Intermodal Surface Transportation Efficiency Act of 1991

Air Quality and Transportation Enhancement Provisions in the Intermodal Surface Transportation Efficiency Act of 1991

97-902 ENR
Updated June 10, 1998
CRS Report for Congress
Received through the CRS Web
Air Quality and Transportation Enhancement
Provisions in the Intermodal Surface
Transportation Efficiency Act of 1991
David M. Bearden
Environmental Information Analyst
Environment and Natural Resources Policy Division
Summary
Federal funding to assist states in addressing the environmental impacts of surface
transportation is a major issue for the second session of the 105 Congress. Th
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Intermodal Surface Transportation Efficiency Act (ISTEA) of 1991 (P.L. 102-240)
authorized a total of $155 billion for transportation projects from FY1992 to FY1997.
Of this amount, it reserved $6 billion for the Congestion Mitigation and Air Quality
Program (CMAQ) to assist states in complying with federal air quality standards by
funding transportation projects that lower emissions, and it set aside $2.4 billion for
transportation enhancements that are environmentally related. Funding authorized under
ISTEA expired on September 30, 1997. The Surface Transportation Extension Act of
1997 (P.L. 105-130) provided interim funding through May 1, 1998, while Congress
worked on a multiyear authorization. On May 22, 1998, the House and Senate passed
the conference report on H.R. 2400 (H.Rept. 105-550), the Transportation Equity Act
for the 21 Century (TEA 21).
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The President signed the bill on June 9, 1998 (P.L. 105-
178), authorizing significant increases in funding for CMAQ projects and enhancements
from FY1998 to FY2003. In addition to authorizing funding, the conference agreement
revises the funding formula for apportioning CMAQ funds to states, allows states to
transfer a limited portion of their funding for CMAQ projects and enhancements to other
highway programs, alters the matching funds requirement for enhancements, and creates
new categories of enhancement activities. It also includes numerous environmental
provisions, including language to codify the Administration's schedule for implementing
new air quality standards for ozone and fine particulates and regional haze requirements.
Introduction
The Intermodal Surface Transportation Efficiency Act (ISTEA) of 1991 (P.L. 102-
240) established two programs that set aside funding for environmental activities. The
Congestion Mitigation and Air Quality Program (CMAQ) funds transportation projects
Congressional Research Service ˜ The Library of Congress

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that lower emissions to assist states in complying with federal air quality standards under
the Clean Air Act. Under the Surface Transportation Program (STP), states have the
flexibility to pursue various projects but must reserve 10% of their funding for
transportation enhancements that are environmentally related. While CMAQ projects
focus on air quality, enhancements are broader and may address bicycle and pedestrian
travel, historic preservation, scenic easements, highway runoff, and other issues.1
ISTEA authorized a total of $155 billion from FY1992 to FY1997 to maintain and
improve the nation’s surface transportation network. Of this amount, it reserved $6
billion for the CMAQ program and $2.4 billion for enhancements.2 Funding for most
federal surface transportation programs, including CMAQ projects and enhancements,
comes from the Federal Highway Trust Fund. Federal taxes on gasoline and diesel fuels
generate most of the revenues for the trust fund. Each state receives an annual
apportionment of these funds according to formulas defined in ISTEA.
This report describes how the CMAQ and enhancement programs function, examines
the policy issues surrounding them, and summarizes relevant provisions in major
legislation to reauthorize ISTEA in the 105 Congress.
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Congestion Mitigation and Air Quality Program
The CMAQ program funds transportation projects that lower emissions to assist
states in complying with federal air quality standards for carbon monoxide, ozone, and
particulate matter. The Clean Air Act requires the Environmental Protection Agenc
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(EPA) to develop safe standards for these pollutants.4 CMAQ projects attempt to lower
emissions by providing alternatives to conventional highway travel. 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 pollutants and
assist states in complying with federal air quality standards.5
Most transportation control measures listed under Section 108 of the Clean Air Act
are eligible for CMAQ funds. However, ISTEA excludes measures that reduce emissions
in cold-start conditions and encourage the removal of pre-1980 vehicles. A CMAQ
project generally falls into one of the eight following categories: 1) public transit; 2)
1 For a discussion of other programs authorized under ISTEA, refer to CRS Report 97-194 E,
Highway and Transit Program Reauthorization: ISTEA Revisited, by John W. Fischer and
William A. Lipford.
2 For information on the amount of funding apportioned to each state under both programs and
a discussion of major funding trends, refer to CRS Report 97-967 ENR, Federal Highway
Funding for Air Quality Projects and Transportation Enhancements: How Much, To Whom, and
For What?, by David M. Bearden.
3P.L. 102-240, Section 1008.
4For further discussion, refer to CRS Issue Brief 97007, Clean Air Act Issues, by James E.
McCarthy.
5 For a discussion of the role of the CMAQ program in helping states attain the new air quality
standards, refer to CRS Report 97-1026 ENR, Highway Funding, the States, and New Air Quality
Standards, by David M. Bearden.

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traffic flow improvements; 3) rideshare programs; 4) traffic demand management
programs; 5) bicycle and pedestrian projects; 6) public education; 7) vehicle inspection
and maintenance programs; and 8) alternative fuel conversion programs.
ISTEA authorized approximately $1 billion annually for the CMAQ program from
FY1992 to FY1997 for a total authorization of $6 billion over 6 years. States wit
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nonattainment and maintenance areas receive funding according to a formula based on the
severity of air pollution in those areas and the population residing in them.7 States
without any nonattainment or maintenance areas receive 0.5% of the total annual CMAQ
apportionment and have the flexibility to use this amount in any locality for transportation
projects that are eligible under CMAQ or STP. Other sources of funding under ISTEA
are also available for transportation projects with air quality benefits. States have the
flexibility to spend funding under STP for most measures listed under Section 108 of the
Clean Air Act, and the Federal Transit Administration’s Capital Assistance Program is
another source of funding.
Transportation Enhancements
ISTEA requires each state to reserve 10% of its apportionment under STP for
enhancements that are environmentally related.8 Some categories of eligible activities do
not provide direct environmental benefits (such as reducing pollutants) but still qualify
as environmentally related. For example, a landscaping project could be eligible for
funding if it restores natural surroundings altered in the construction of a highway.
ISTEA requires an enhancement to fall into at least one of the 10 following categories to
be eligible for funding: 1) facilities for bicycles and pedestrians; 2) acquisition of scenic
easements and scenic or historic sites; 3) scenic or historic highway programs; 4)
landscaping and other scenic beautification; 5) historic preservation; 6) rehabilitation and
operation of historic transportation buildings, structures, or facilities; 7) preservation of
abandoned railway corridors; 8) control and removal of outdoor advertising; 9)
archaeological planning and research; and 10) mitigation of water pollution due to
highway runoff.
ISTEA authorized roughly $24 billion for STP from FY1992 to FY1997 and
reserved 10%, approximately $2.4 billion, for enhancements.9 The formula for STP is
based on percentages of funding apportioned to states in past years primarily for
maintaining bridges, national highways, and the interstate system. While the CMAQ
program apportions funding based on the level of air pollution in each state, funding for
6P.L. 102-240, Section 1003(a)(4).
7 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 federal standards. Under the Clean Air Act, states must submit plans to
EPA that outline strategies to reduce emissions and comply with the federal standards in
nonattainment areas and to control emissions and sustain air quality in maintenance areas. The
National Highway System Designation Act of 1995 (P.L. 104-59) amended ISTEA to make
maintenance areas eligible for CMAQ funds.
8P.L. 102-240, Section 1007.
9P.L. 102-240, Section 1003(a)(3).

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enhancements is a fixed percentage of a state’s STP funds and is not linked to
environmental problems.
Selection Process
State and local authorities select CMAQ projects and enhancements subject to
federal oversight. Local sponsors develop proposals and submit them to state departments
of transportation and metropolitan planning organizations (MPOs) for evaluation.10
Examples of sponsors include transit operators, municipal environmental or public works
departments, and local transportation management agencies. States and MPOs select
proposals according to federal guidelines and include them in their Transportation
Improvement Plans (TIPs), which list all transportation projects selected for federal
funding. DOT evaluates each project in a state’s TIP for final approval and obligation of
federal funding. EPA participates in the review of CMAQ projects to evaluate their air
quality assessments.11
Matching Funds Requirement
Generally, the federal share of the cost to complete a CMAQ project or an
enhancement is 80%, and the local sponsor must match the remaining 20%. However,
12
CMAQ projects conducted on the interstate system can qualify for a federal share of up
to 90% of their costs, and certain types of CMAQ projects, such as traffic flow
signalization and certain commuting options, can qualify for full federal funding in
limited circumstances. Some states assist local sponsors in meeting the matching funds
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requirement, while others require the sponsor to finance the full 20%. For both CMAQ
projects and enhancements, DOT does not award the federal share as a conventional grant
but provides the funds on a reimbursable basis. The department obligates funding after
approving the proposal for a CMAQ project or an enhancement but does not disburse the
obligated funding until the project is complete.
Policy Issues
Reserving revenues from the Federal Highway Trust Fund for environmental
activities is controversial. Some highway interest groups believe that federal funding for
surface transportation should be spent solely on maintaining infrastructure such as roads
and bridges. However, some states with pollution problems, local governments, and
1 0Metropolitan planning organizations are regional councils or associations of government that
are responsible for coordinating programs and activities which benefit the public in areas with
populations of 50,000 or more.
11The sponsor of a CMAQ project must conduct an air quality assessment to determine its
potential for reducing emissions. Federal guidance requires a quantitative analysis when
technically feasible but allows a qualitative analysis if the sponsor lacks the skills or equipment
necessary to measure emissions. A qualitative analysis explains how the project would lower
emissions without specifying the amount.
12P.L. 102-240, Section 1021.
13Department of Transportation. Federal Highway Administration and Federal Transit
Administration. Federal Register. March 7, 1996. p. 50900.

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environmental and community organizations disagree and claim that many localities
would not be able to mitigate the environmental impacts of surface transportation without
federal highway funding. Other critics also support the idea that environmental activities
should be eligible for funding but believe that states should have the flexibility to decide
whether to fund them rather than being required to set aside a specific amount. States
with few air quality problems argue that the CMAQ program is unfair in that it makes
states with clean air pay to reduce pollution in other states by awarding more highway
revenues to states with the worst air quality. However, states with air quality problems
claim that CMAQ funds are essential in helping them achieve and maintain federal air
quality standards and that other states benefit from their transportation networks.
Enhancements have received broad support from many states and local communities due
to the availability of funding for unconventional projects that can diversify their
transportation systems. However, some critics question whether certain projects funded
under the enhancements program have met the necessary criteria established in ISTEA.
Reauthorizing Legislation in the 105 Congress
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Federal funding to assist states in addressing the environmental impacts of surface
transportation is a major issue for the second session of the 105 Congress. Funding for
th
CMAQ projects, enhancements, and other programs authorized under ISTEA expired on
September 30, 1997. The Surface Transportation Extension Act of 1997 (P.L. 105-130)
provided interim funding through May 1, 1998 while Congress worked on a multiyear
authorization. On April 1, 1998, the House passed H.R. 2400 as amended, the Building
Efficient Surface Transportation and Equity Act of 1998 (BESTEA), and on March 12,
1998, the Senate passed S. 1173 as amended, the Intermodal Surface Transportation
Efficiency Act of 1998 (ISTEA II). On M
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ay 22, 1998, the House and Senate passed the
conference report on H.R. 2400 (H.Rept. 105-550), renamed as the Transportation Equity
Act for the 21 Centruy (TEA 21). The President signed the bill on June 9, 1998 (P.L
st
.
105-178), authorizing significant increases in the amount of funding for CMAQ projects,
enhancements, and other highway programs over the next 6 years from FY1998 to
FY2003. In addition, the House passed the TEA 21 Restoration Act (H.R. 3978) on June
3, 1998, which would correct technical errors in various provisions of the conference
report on H.R. 2400. However, major corrections to provisions affecting CMAQ projects
and enhancements were not necessary.
As signed by the President, the conference agreement authorizes an increase of $2.1
billion in funding for CMAQ projects from $6.0 billion to $8.1 billion over the next 6
years, roughly $1.9 billion less than the House's proposal of nearly $10.0 billion but about
$300 million more than the Senate's level of $7.8 billion. The conference agreement
includes the Senate's provision that revises the funding formula for the CMAQ program
to reflect submarginal nonattainment areas for ozone and maintenance areas for carbon
monoxide and ozone. However, it does not include the House's provision to add new
funding factors for nonattainment and maintenance areas for particulate matter. The
conference committee adopted the House's proposal that requires the National Academy
of Sciences to study the extent to which CMAQ projects have helped to improve air
1 4For a discussion of major provisions in each bill, refer to CRS Report 97-516 E, ISTEA
Reauthorization: Highway Related Legislative Proposals in the 105th Congress, by John W.
Fischer.

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quality, and it modified a provision in the House bill that limits the amount of funding
that a state could transfer from its CMAQ apportionment to another highway program. As
proposed by both the House and Senate, the conference agreement allows measures that
reduce emissions under cold-start conditions to be eligible for CMAQ funds, and it
includes new language to clarify funding eligibility for alternative fuel projects and
measures to reduce traffic congestion.
The conference agreement authorizes an increase of $900 million in funding for
transportation enhancements from $2.4 billion to $3.3 billion over the next 6 years,
approximately $700 million less than the House's proposal of nearly $4.0 billion and
roughly $500 million less than the Senate's amount of $3.8 billion. As proposed by the
Senate, the conference agreement 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. However, the conference committee did not adopt the
Senate's language to change the amount set aside for enhancements under the Surface
Transportation Program from 10 to 8%. Similar to that for CMAQ projects, the
conference agreement includes a modified version of the House's provision that limits the
amount of funding that a state could transfer from the amount set aside for enhancements
to another highway program. As proposed by the House, the conference agreement
expands funding eligibility for enhancements to include measures that would reduce
vehicle-caused wildlife mortality, and as proposed by both the House and Senate, tourist
and welcome center facilities related to scenic or historic highway programs also are
eligible for enhancements funding. The conference committee also included new
language to make transportation museums eligible for funding. However, it rejected the
House's provision that would have allowed the removal of graffiti to become an eligible
activity.
The conference committee adopted several other environmental provisions as well.
As proposed by the Senate, the conference agreement requires EPA to follow its schedule
for implementing new air quality standards for ozone and fine particulates, but the
conference committee modified the Senate's provision to require that EPA designate
nonattainment areas under the new standard for fine particulates before requiring states
to comply with regional haze requirements. The conference agreement also includes the
Senate's proposal to authorize $150 million annually from FY1999 through FY2003 to
assist mass transit systems in purchasing low emission buses that operate on alternative
fuels, and it includes the Senate's proposal to authorize $50 million annually from
FY1999 through FY2003 to encourage and promote advanced vehicle technologies,
including environmental technologies. In addition, the conference committee adopted a
provision in the Senate's bill that establishes a research program to study numerous
aspects of environmental issues related to surface transportation. As proposed by the
House, the conference agreement permits low-emission vehicles with only one occupant
to operate in high occupancy vehicle (HOV) lanes. The conference committee also
adopted the House's provision that requires the General Accounting Office to study
various low and zero emission fuel technologies and recommend incentives to encourage
the use of these technologies for mass transit vehicles. As proposed by both the House
and Senate, the conference agreement establishes a coordinated environmental review
process to reduce the time required to approve transportation projects prior to
construction.