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Transportation Funding & Financing

Federal Legislation

The Federal transportation program is the accumulation of legislative actions focusing on Federal funding, regulation, and other aspects of the nation's surface transportation systems and their administration. Legislation is updated on a regular basis, with some updates focused on programmatic areas, some allocating funds, and others doing both. The program has evolved through successive authorization acts and other legislation which have added to, eliminated, or otherwise modified the program over time.

As new legislation is passed, Title 23 of the United States Code (23 U.S.C.) is amended. Title 23 includes most of the laws that govern the Federal-Aid Highway Program (FAHP). Title 23, U.S.C., is titled "Highways" and includes most of the laws that govern the FAHP arranged systematically, or codified. Generally, Title 23, U.S.C., embodies those substantive provisions of highway law that Congress considers will continue and which need not be reenacted each time the FAHP is reauthorized. Each new surface transportation act specifies which sections of Title 23, U.S.C., are to be repealed, added, or amended.

As new transit acts are passed, Chapter 53 of Title 49 of the United States Code (49 U.S.C.) is amended. Chapter 53 of Title 49 includes most of the laws that govern the Federal Transit Program.

The term "program" is used as an umbrella term referring to activities administered by the Federal Highway Administration (FHWA) or the Federal Transit Administration (FTA). Each program has its own specific and separate funding, described in law, and each is considered a program, as specific activities for which that funding may be used. These are described in law and are referred to as eligible activities. These activities, often eligible under a number of programs, are not considered programs in the financial sense of the term as used in this report because the legislation does not single out these activities for specific funding.

An Authorization Act is the basic substantive legislation that establishes or continues Federal programs or agencies and establishes the upper limit on the amount of funds for the various programs for either a fixed or an indefinite period of time. The financing cycle for the Federal-aid transportation programs begins when Congress develops and enacts a surface transportation authorization.

The financing of other Federal programs may be much more dependent on a second legislative act, known as an appropriations act, than on authorizing legislation.

The current Authorization Act Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) expires on September 30, 2009. As that date approaches, both the House of Representatives Committee on Transportation and Infrastructure and the Senate Committee on Environment and Public Works will hold public hearings and prepare draft legislation.


The Federal Legislative Process
Project Finance Provisions


Financing Federal-aid Highways, FHWA Publication FHWA-PL-07-017, March 2007 is the latest update of a report originally issued in January 1974, describing the process involved in financing Federal-aid highways. The 1999 version has been updated to account for the changes instigated by the enactment of Public Law 109-59; SAFETEA-LU. The report presents the financial process from inception in an authorization act to payment from the Highway Trust Fund (HTF) and includes discussion of the congressional and Federal agency actions that occur throughout. The report is available online.