Emergency Relief Program: Federal-Aid Highway Assistance for Disaster-Damaged Roads and Bridges

Emergency Relief Program: Federal-Aid Highway Assistance for Disaster-Damaged Roads and Bridges Robert S. Kirk Specialist in Transportation Policy September 23, 2011 Congressional Research Service 7-5700 www.crs.gov R42021 CRS Report for Congress Prepared for Members and Committees of Congress Federal-Aid Highway Assistance for Disaster-Damaged Roads and Bridges Summary The major highways and bridges damaged during Hurricane Irene in 2011and the I-35W bridge collapse in Minneapolis of August 1, 2007 are part of the federal-aid highway system and were therefore eligible for assistance under the Federal Highway Administration’s (FHWA’s) Emergency Relief Program (ER). Following a natural disaster or catastrophic failure (such as the I-35W bridge), ER funds are made available for both emergency repairs and restoration of federal-aid highway facilities to pre-disaster conditions. The ER program is administered through the state departments of transportation in close coordination with FHWA’s division offices (there is one in each state). Although ER is a federal program, the decision to seek ER funding is made by the state, not by the federal government. Most observers see the close and ongoing relationship between the FHWA’s staff at the state level and their state counterparts as facilitating a quick coordinated response to disasters. The program is funded by an annual $100 million authorization from the highway trust fund and general fund appropriations that are provided by Congress on a such sums as necessary basis. A number of issues have arisen in recent years: • The scope of eligible activities funded by ER has grown via legislative or FHWA waivers of eligibility criteria or changes in definitions that have expanded the scope of ER projects, sometimes beyond repairing or restoring highways to predisaster condition. • The $100 million annual authorization has been exceeded nearly every fiscal year, requiring appropriations that can lead to delay in funding permanent repairs. • Congress has directed that in some cases ER fully fund projects, without the normal 10% or 20% state matching share, putting financial pressure on the federal side of disaster highway assistance. State requests for ER funding are at times backlogged. In a deficit-reduction environment, it is questionable whether the ER program can continue to loosen eligibility restrictions and forgo the state match without increasing the backlog. Congressional Research Service Federal-Aid Highway Assistance for Disaster-Damaged Roads and Bridges Contents Introduction...................................................................................................................................... 1 Background...................................................................................................................................... 1 FHWA’s Emergency Relief (ER) Program ...................................................................................... 2 The Federal-State Relationship ................................................................................................. 2 Funding...................................................................................................................................... 2 The $100 Million Per State Cap .......................................................................................... 2 The Federal Share................................................................................................................ 3 Eligibility and Program Operation ............................................................................................ 3 Emergency Repairs ............................................................................................................. 3 Permanent Repairs............................................................................................................... 4 ER Funding Sustainability............................................................................................................... 5 Recent “Quick Release” ER Allocations ......................................................................................... 5 FY2011 Nationwide ER Allocations ............................................................................................... 6 I-35W Minneapolis Bridge ER Funding.......................................................................................... 6 2005 Gulf Coast Hurricane ER Funding.......................................................................................... 7 Tables Table 1. ER Funding for the I-35W Bridge Collapse ...................................................................... 6 Table 2. 2005 Gulf Coast Hurricane ER Fund Allocations.............................................................. 7 Contacts Author Contact Information............................................................................................................. 8 Congressional Research Service Federal-Aid Highway Assistance for Disaster-Damaged Roads and Bridges Introduction The major highways and bridges damaged during Hurricane Irene in 2011 and the I-35W Minneapolis bridge collapse of August 1, 2007, are examples of disaster damaged federal-aid highway infrastructure that are eligible for assistance from the Emergency Relief Program (ER) of the Federal Highway Administration (FHWA). ER assistance is restricted to roads and bridges on the federal-aid highway system, which essentially includes all public roads not functionally classified as either local or rural minor collectors. For disaster-damaged roads that are not federalaid highways, states may request reimbursement for emergency road repairs and debris removal from the Federal Emergency Management Agency (FEMA). FEMA may also allow for limited funding under its Public Assistance Program for such things as snow removal and related operating costs during extreme snowfalls, which are not eligible for ER funds.1 This report describes FHWA assistance for the repair and reconstruction of disaster-damaged highways and bridges or catastrophic failures (such as a bridge collapse). It begins with a brief discussion of the legislative origins of federal assistance and describes the ER program in its current form. The report then discusses eligibility issues and program operation. Background For more than 70 years, federal aid has been available for the emergency repair and restoration of disaster-damaged roads. The first legislation authorizing such use of federal funds was the Hayden-Cartwright Act of 1934 (P.L. 73-393). This act, however, provided no separate funds and states subject to disasters had to divert their regularly apportioned federal highway funds from other uses to disaster repairs. The Federal-Aid Highway and Highway Revenue Act of 1956 (70 Stat 374 and 70 Stat 387) was the first act that authorized separate funds for the ER program (the program is codified 23 U.S.C. 125). From the passage of the 1956 Act through 1978, funding for the program was drawn 40% from the Treasury’s general fund revenues and 60% from the highway trust fund (HTF). The HTF is supported by taxes paid by highway users. Starting in 1979 the program was funded 100% from the HTF. The ER program was reauthorized, on August 10, 2005, through FY2009 by the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA) (P.L. 109-59; 119 Stat 1144). SAFETEA provided that allocations above the annual $100 million authorization could be funded from the general fund.2 Since the end of FY2009, the entire federal surface transportation program, including ER, has operated under a series of authorization extensions and continuing resolutions.3 1 Federal Highway Administration, Emergency Relief Manual (Federal-Aid Highways), Washington, DC, November 2009, p. 20, http://www.fhwa.dot.gov/reports/erm/er.pdf. 2 Beginning with the December 30, 2005, enactment of the Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery (P.L. 109-148), ER supplemental appropriations have been drawn from the Treasury’s general fund. 3 For background on surface transportation reauthorization issues see, CRS Report R41512, Surface Transportation Program Reauthorization Issues for the 112th Congress, coordinated by Robert S. Kirk. Congressional Research Service 1 Federal-Aid Highway Assistance for Disaster-Damaged Roads and Bridges FHWA’s Emergency Relief (ER) Program The ER program provides funds for the repair and reconstruction of roads on the federal-aid highway system that have suffered serious damage as a result of either (1) a natural disaster over a wide area, such as a flood, hurricane, tidal wave, earthquake, tornado, severe storm, or landslide; or (2) a catastrophic failure from any external cause (for example, the collapse of a bridge that is struck by a barge).4 Historically, however, the vast majority of ER funds have gone for repair and reconstruction following natural disasters. The Federal-State Relationship As is true with other FHWA programs, the ER program is administered through the state departments of transportation in close coordination with FHWA’s division offices in each state. Although the ER is a federal program, the decision to seek financial assistance under the program is made by the state departments of transportation, not by the federal government. Local officials who wish to seek ER funding must do so through their state departments of transportation. They do not deal directly with the FHWA. The close working relationships between FHWA staff at the state level and their state counterparts facilitate a quick coordinated response to disasters. Funding The ER program has an annual authorization of $100 million in contract authority to be derived from the highway trust fund. These funds are not subject to the obligation limitation, which means the entire $100 million is available each year. Because the costs of road repair and reconstruction following many disasters exceed the $100 million annual authorization, SAFETEA authorizes the appropriation of additional funds on a “such sums as may be necessary” basis, generally accomplished in either annual or emergency supplemental appropriations legislation.5 As is true with other FHWA programs, the ER is a reimbursable program. The state does not receive the money up front. This means, however, that a state can incur obligations and begin repairs knowing that it can submit vouchers to FHWA for reimbursement of the federal share of the project. The $100 Million Per State Cap The ER program limits the amount that FHWA may provide under the ER program to each state for each natural disaster or catastrophic failure to $100 million. For large disasters whose costs exceed the $100 million per state cap, Congress may lift the cap legislatively. This is often done at the same time that additional funds are appropriated for the program. 4 Federal Highway Administration, Emergency Relief Manual (Federal-Aid Highways), Washington, DC, November 2009, pp. 1-76, http://www.fhwa.dot.gov/reports/erm/er.pdf. 5 Historically, emergency supplemental ER appropriations have been drawn from the highway account of the highway trust fund (HTF). The balance in the highway account had fallen in recent years and it was unclear whether the HTF could fund a large Katrina-related supplemental appropriations without constraining the ability of the HTF to fully fund SAFETEA-LU. Since December 30, 2005, supplemental ER appropriations have come from the general fund. Congressional Research Service 2 Federal-Aid Highway Assistance for Disaster-Damaged Roads and Bridges The Federal Share Emergency repairs to restore essential travel, minimize the extent of damage, or protect remaining facilities, if accomplished within the first 180 days after the disaster, may be reimbursed with a 100% federal share. Permanent repair projects are reimbursed at the same federal share that would normally apply to the federal-aid highway facility. For Interstate System highways the federal share would be 90% and for most other highways the share would be 80%. Permanent repairs done during the first 180 days are also reimbursed at the pro rata share that would normally apply to the facility. The share for disaster relief for roads on federal lands is 100%. In P.L. 109-148, Congress broadened the scope of the 100% federal share to encompass all ER program expenses for repair and reconstruction projects related to the Gulf Coast hurricanes. The I-35W repair and reconstruction, authorized in P.L. 110-56, was also 100% federally funded. Eligibility and Program Operation The ER program divides all repair work into two categories: emergency repairs and permanent repairs. Only repairs to roads and bridges on the federal-aid highway system that have suffered damage during a declared disaster or catastrophic failure are eligible for ER assistance.6 The intent of ER assistance is to repair and restore highway facilities to pre-disaster conditions, not to increase capacity, improve highway facilities, or fix non-disaster deficiencies. In regard to bridges, ER funds are not to be used to replace other federal funds that would have been used to construct a replacement bridge (i.e., if replacement were already planned prior to the disaster). In general, work is confined to the federal-aid highway right-of-way. Emergency Repairs These are repairs made immediately following a disaster to meet the program goals to “restore essential traffic, to minimize the extent of damage, or to protect the remaining facilities.”7 State and local transportation agencies can begin these repairs immediately and prior approval from FHWA is not required. Once the FHWA division administrator finds that the disaster work is eligible, properly documented costs can be reimbursed retrospectively. Emergency repair work is to be accomplished within the first 180 days after the disaster and, as mentioned earlier, is reimbursed at a 100% federal share. Examples of emergency repairs are debris removal, regrading, removal of landslides, construction of temporary road detours, erection of temporary detour bridges, and use of ferries as an interim substitute for highway or bridge service. Emergency repairs are meant to permit work to start immediately to restore essential traffic in the disaster area that cannot wait for a finding of eligibility and programming of a project. This part of the program is especially designed for speed. In the case of some disasters, state DOTs have been able to let ER-funded debris removal and demolition contracts on the day of the disaster event.8 6 A governor may declare an emergency proclamation and the FHWA division administrator may then concur that a disaster occurred and substantial damage has occurred to the federal-aid highway system roads over a wide area or that the criteria for a catastrophic failure were met and that the damage is eligible under 23 U.S.C. 125. When the President has issued a major disaster declaration, the division administrator’s concurrence is not necessary. 7 FHWA. Emergency Relief Manual. 8 A good example of this is the Northridge Earthquake. See Effects of Catastrophic Events on Transportation System Management and Operations, Washington, FHWA, 2004, pp. 37-45. Congressional Research Service 3 Federal-Aid Highway Assistance for Disaster-Damaged Roads and Bridges Permanent Repairs Permanent repairs go beyond the restoration of essential traffic and are intended to restore the damaged bridges and roads to pre-disaster conditions and capabilities. Where the damaged parts of the road can be repaired to pre-disaster conditions, without replacement or reconstruction, this is done. Where a road needs to be replaced, ER funding is limited to the costs of building a roadway designed to current standards and of comparable capacity. ER funds may be used for temporary or permanent repair of a repairable bridge, but permanent repairs may not be funded if the bridge is scheduled for replacement. If a bridge is destroyed or repair is not feasible then ER funds may participate in building a new comparable bridge to current design standards and to accommodate traffic volume projected over its design life. In some cases “betterments” (added protective features, added lanes, added access control, etc.) may be eligible, but they must be shown to be economically justified based on a cost/benefit analysis of the future savings in recurring repair costs. Permanent repair and reconstruction contracts, not done as emergency repairs, must meet competitive bidding requirements. A number of techniques are available to accelerate projects, including design-build contracting, abbreviated plans, shortened advertisement period for bids, and the cost-plus-time (A+B) bidding9 that includes monetary incentive/disincentive clauses designed to encourage contractors to complete projects ahead of time. For example, the repair contract for repair of the I-10 Twin Spans Bridge between Slidell and New Orleans, Louisiana, that was awarded Friday September 9, 2005, included incentives for early completion. Two-way traffic on two lanes opened on October 14, 2005, 16 days ahead of schedule, and four-lane traffic opened January 6, 2006, nine days ahead of schedule. The contract for the replacement bridge for the collapsed I-35W bridge in Minneapolis also used incentives for early completion. The bridge was built in 11 months and was completed three months ahead of schedule.10 Contracts supported by ER funding must meet all contract provisions as required by 23 CFR Part 633A. Davis-Bacon wage rate requirements apply to all ER contracts.11 ER-funded contracts must abide by Disadvantaged Business Enterprises (DBE) requirements, Americans With Disability Act (ADA) requirements, “buy America” regulations, and prohibitions against the use of convict labor (23 U.S.C. 114).12 Repair projects funded under the ER program are subject to the requirement of the National Environmental Policy Act (NEPA) of 1969. The impact, however, is generally limited since emergency repairs are normally classified as categorical exclusions under 23 CFR771.117 (c)(9) as are projects to permanently restore an existing facility “in-kind” to its pre-disaster condition. Betterments may, in some cases, require NEPA review.13 9 Cost-plus-time bidding (A+B method) includes two components. The A component is the traditional bid for all work to be performed. The B component is a bid of the total number of calendar days required to complete the project. The contract includes a disincentive for overrunning the time bid and an incentive for earlier completion. 10 Minnesota Department of Transportation, Interstate 35W Bridge in Minneapolis, Saint Paul, MN, http://www.dot.state.mn.us/i35wbridge/index.html. 11 The Davis-Bacon requirements can be suspended by executive order (ref. 40 U.S.C. 276a-5). President Bush did this in response to Katrina. He reimposed the requirements November 8, 2005. 12 A state may request a waiver of the buy America requirements from FHWA based on a public interest rationale under 23 CFR 635.4109(c)(1)(i). 13 CRS Report RL33104, NEPA and Hurricane Response, Recovery, and Rebuilding Efforts, by Linda Luther. Congressional Research Service 4 Federal-Aid Highway Assistance for Disaster-Damaged Roads and Bridges ER Funding Sustainability In February 2007, GAO released a report on the ER program that expressed concerns on the growing budgetary implications of ER spending.14 The report points out that because of the constrained outlook for the highway trust fund, the ER program is now mostly funded with general fund revenues at a time when the nation faces a pending fiscal crisis, raising concerns about future use of the general fund and the financial sustainability of the ER program ... ER funds are not intended to replace other federal-aid, state, or local funds to increase capacity, correct nondisaster-related deficiencies, or make other improvements. However, contributing to future financial sustainability concerns is the fact that the scope of eligible activities funded by the ER program has expanded in recent years with congressional or FHWA waivers of eligibility criteria or changes in definitions. As a result, some projects have been funded that go beyond repairing or restoring highways to pre-disaster conditions ... [such as] projects that grew in scope and cost to address environmental and community concerns.... Congress has also directed that in some cases the program fully fund projects rather than requiring a state match.15 The report also noted that the $100 million annual authorization is so low, that since 1990, 86% of ER program funds have been made available though supplemental appropriations. This situation has led to project backlogs that force states to delay reconstruction or use other highway dollars as they await the funds provided through the supplemental appropriations process. Recent “Quick Release” ER Allocations The Emergency Relief Manual describes the “quick release” method for developing and processing a state request for ER funding as a method which “employs a process to immediately deliver ER assistance for large disasters very quickly. The quick release method should not be used as a matter of routine and is intended to provide a ‘down payment’ on overall ER needs immediately following a large scale disaster.”16 • $2 million on September 14, 2011, to the State of Missouri for summer flood damage. • $1 million on September 12, 2011, to the State of New Hampshire for flood damage from Hurricane Irene. • $1 million on September 6, 2011, to the State of Maine for flood damage from Hurricane Irene. • $1 million on September 2, 2011, to the State of Connecticut for flood damage from Hurricane Irene. 14 U.S. Government Accountability Office, Highway Emergency Relief: Reexamination Needed to Address Fiscal Imbalance and Long-term Sustainability, GAO-07-245, February 2007, pp. 1-60, http://www.gao.gov/new.items/ d07245.pdf. 15 Ibid. p. 2. 16 Federal Highway Administration. Office of Infrastructure, Emergency Relief Manual, Washington, DC, November 2009, p. 33, http://www.fhwa.dot.gov/reports/erm/ermchap3.cfm. Congressional Research Service 5 Federal-Aid Highway Assistance for Disaster-Damaged Roads and Bridges • $5 million on August 31, 2011, to the State of Vermont for flood damage from Hurricane Irene. • $2 million on July 27, 2011, to the State of Iowa for flood damage. • $5 million on June 27, 2011, to the State of North Dakota for flood damage. • $1 million on May 24, 2011, to the State of Minnesota for flood damage from spring snow melt. FY2011 Nationwide ER Allocations On April 11, 2011, the FHWA allocated just under $320 million of ER funds to the states for reimbursement for repairs to damaged roads and bridges.17 Most of the funds were allocated to states for damage that occurred in 2010. Some funds were allocated for permanent repairs to earlier disasters. I-35W Minneapolis Bridge ER Funding Table 1 below, sets forth the allocation of ER funds for the reconstruction of the I-35W bridge, as of March 31, 2008.18 As of this writing, the amount provided (allocated) equals the amount requested by the state of Minnesota. Table 1. ER Funding for the I-35W Bridge Collapse Funding Requests and Allocations Total Formal Request for ER Funds Amount $371,700,000 “Quick Release” Allocation of August 2, 2007 $5,000,000 “Quick Release” Allocation of August 9, 2007 $50,000,000 Allocation of FY2008 ER funds on November 5, 2007 $123,482,833 Allocation of (P.L. 110-161) appropriation on March 5, 2008 $195,000,000 Total ER Funding for I-35W Bridge $371,700,000 Source: DOT/FHWA. Note: Simultaneously with the allocation of March 5, 2008, there was a withdrawal of $1,782,833 of previously allocated ER funds drawn from the annual ER authorization (i.e., which were not specifically appropriated for the I-35W bridge, as was the March 5 allocation, which was allocated in full). 17 Federal Highway Administration, "U.S. Secretary of Transportation Announces More than $319 Million as Repayment for Repairs to Damaged Roads and Bridges," press release, March 31, 2011, http://www.fhwa.dot.gov/pressroom/dot11045.htm. 18 See also CRS Report RL34127, Highway Bridges: Conditions and the Federal/State Role, by Robert S. Kirk and William J. Mallett. Congressional Research Service 6 Federal-Aid Highway Assistance for Disaster-Damaged Roads and Bridges 2005 Gulf Coast Hurricane ER Funding As of this writing, FHWA has received $2.950 billion in ER program funding requests and has allocated an equal amount for the repair and reconstruction of the damage to federal-aid highways caused by hurricanes Katrina, Rita, and Wilma. Table 2 presents the allocations of ER funding. Table 2. 2005 Gulf Coast Hurricane ER Fund Allocations (through March 31, 2010) Item Date Amount Allocated ($) Mississippi—Katrina September 13, 2005 5,000,000 Louisiana—Katrina September 14, 2005 5,000,000 Mississippi—Katrina November 30, 2005 20,000,000 Louisiana—Katrina November 30, 2005 20,000,000 Louisiana—Katrina January 19, 2006 75,000,000 Florida—Katrina January 20, 2006 42,843,797 Mississippi—Katrina January 20, 2006 740,000,000 Texas—Rita January 20, 2006 11,000,000 Louisiana—Katrina and Rita February 1, 2006 863,001,488 Mississippi—Katrina March 6, 2006 248,000,000 Alabama—Katrina March 28, 2006 17,577,720 Florida—Rita March 28, 2006 2,331,245 Florida—Wilma March 28, 2006 478,000,000 Louisiana—Katrina and Rita April 21, 2006 52,552,159 Louisiana—Katrina July 13, 2006 174,000,000 Texas—Rita October 23, 2006 Alabama—Katrina July 24, 2007 Mississippi—Katrina September 4, 2007 19,698,984 Mississippi—Katrina September 4, 2007 301,016 Louisiana—Katrina November 5, 2007 18,532,349 Louisiana—Katrina October 23, 2008 3,025,475 Mississippi—Katrina October 23, 2008 19,200,000 Texas—Rita October 23, 2008 3,460,240 Mississippi—Katrina November 5, 2008 4,800,000 Mississippi—Katrina July 6, 2009 17,000,000 Louisiana—Katrina March 31, 2010 74,500,000 Total 25,994,607 9,800,000 2,950,619,080 Source: FHWA. Congressional Research Service 7 Federal-Aid Highway Assistance for Disaster-Damaged Roads and Bridges Author Contact Information Robert S. Kirk Specialist in Transportation Policy rkirk@crs.loc.gov, 7-7769 Congressional Research Service 8