In order to receive federal highway funding, several environmental requirements mustbe met. The Clean Air Act requires states with poor air quality to demonstrate that plans to expandhighway capacity would conform with their plans to control emissions, referred to as "transportationconformity." The most recent multi-year funding authorizationfor these activities was provided in the Transportation Equity Act for the 21st Century (TEA-21, P.L.105-178 ), which expired on September 30, 2003. This law authorized a total of $218 billion forfederal highway and transit programs from FY1998 through FY2003. It set aside approximately $9billion of this amount for air quality projects, authorized tax benefits for cleaner-burningalcohol-based fuels, and permitted states to exempt certain low-emission vehicles from HighOccupancy Vehicle (HOV) lane requirements. TEA-21 also made funding available for mitigatingwater pollution from highway runoff, and authorized funding for environmental research and thedevelopment of advanced vehicle technologies. The most controversial issues for the reauthorization of federal highway and transit programs have been the amount of funding to provide for surface transportation infrastructure needs and howto allocate this funding among the states. There also has been significant interest in the adequacy of funding for air quality projects under the Congestion Mitigation and Air Quality Improvement Program (CMAQ). This report provides background information on activities intended to help mitigate pollution resulting from highway construction and travel, and analyzes key issues for Congress. This reportis a resource document for the reauthorization debate and will not be updated. The limitation on available funding has made it more challenging to balancehighway capacity needs with protecting the environment and other competing priorities. (5) Howto meet public needs for greater highway capacitywhile controlling emissions is a major issue for states with areas that are in nonattainment with theNAAQS and areas that must maintain them, as the availability of federal highway funding in theseareas is dependent on the state demonstrating that its transportation plan conforms to the emissionsbudget for motor vehicles in its air quality plan. In order to reduce conflicts between highway capacity needs and air quality requirements, Congress has authorized the use of federal highway funds for various projects that would reducevehicular emissions. Federal transit funding has also been made available to local transit agenciesfor the purchase of clean fuel buses. Even though there is no dedicated source of funding for the purchase of clean fuel buses, they do receive preferential treatment under federal matching funds requirements to help local areas attainor maintain federal air quality standards. Use of High Occupancy Vehicle (HOV) Lanes

Many states have constructed HOV lanes as a means to reduce traffic congestion. In response to these needs, Congress has provided authority for states to use federalhighway funds for environmental restoration or mitigation projects to address waterpollution from existing highways. Some of the relevant issues for the reauthorization of the Surface Transportation Program are (1)whether to increase the limitation on the portion of the total project cost that can bespent on environmental restoration and pollution abatement activities, in order toaccommodate cases in which mitigation costs may exceed the current 20% cap; (2)whether to establish a comprehensive reporting mechanism for tracking the amountof STP funds expended by states on these activities, so as to gain a betterunderstanding of the extent to which transportation facilities have impacted waterquality and necessitated mitigation; and (3) whether to permit STP funds to be usedto address water pollution from highway runoff, even if no highway improvementsare underway at the time.
Balancing public needs for surface transportation infrastructure with protecting the environment has been a long-standing issue among states and local communities. These two objectives can oftenconflict due to the rise in pollution that typically results when new highways or roadways areconstructed, or a highway is expanded, to provide greater traffic capacity. Expanding highwaycapacity can be especially challenging for states, if the resulting rise in pollution would be greatenough to make compliance with federal air quality standards more difficult. In order to receivefederal highway funds, the Clean Air Act requires states with air quality problems to demonstratethat their transportation plans conform to their plans to control emissions, referred to as"transportation conformity."
To help reduce potential conflicts between highway capacity needs and environmental requirements, Congress has authorized the use of federal highway funds to alleviate some of thepollution resulting from highway construction and travel. The most recent multi-year fundingauthorization for these activities was provided in the Transportation Equity Act for the 21st Century(TEA-21, P.L. 105-178 ), which expired at the end of FY2003. How to meet state needs for highwayinfrastructure, while ensuring compliance with environmental requirements, is among the key issuesfor reauthorization.
TEA-21 authorized a total of $218 billion for federal highway and transit programs from FY1998 to FY2003. It set aside $9 billion for air quality projects, including $8 billion for theCongestion Mitigation and Air Quality Improvement Program (CMAQ) to offset some of theemissions from highway travel, as a means to assist states in complying with federal air qualitystandards. The other $1 billion was authorized for the purchase of clean fuel transit buses. TEA-21also expanded funding eligibility to allow states to use federal highway funds for mitigating waterpollution from highway runoff. The law also authorized funding for environmental research and thedevelopment of advanced vehicle technologies, and it included several other provisions related toenvironmental protection.
The use of federal highway funds to address environmental needs has focused mostly on air quality projects, due primarily to requirements for states to demonstrate conformity as a conditionfor receiving federal highway funds. Most of this funding has been provided under the CMAQprogram. While the program's effectiveness has been questioned, there is broad support forincreasing its funding in response to an upcoming rise in air quality needs among the states. Otherair quality issues involve the use of transit funding for the purchase of clean fuel buses, offering taxbenefits for cleaner-burning alcohol-based fuels, and exempting certain low-emission vehicles fromHigh Occupancy Vehicle (HOV) lane requirements. The extent to which water pollution mitigationprojects and environmental research and development activities should be eligible for federalhighway funds are issues as well.
This report provides background information and analysis of key issues to serve as a resource document for the reauthorization debate. It will not be updated.