A program to fund congestion-related transportation projects that is likely to be included in a forthcoming federal transportation bill may allow metropolitan areas to issue tax-exempt bonds and taxable tax-credit bonds.

The tax-exempt bonds could include grant anticipation revenue vehicles, or Garvees, which are backed by annual federal appropriations.

The program, still in the formative stage, is being crafted as part of a bill that House Transportation and Infrastructure Committee chairman James L. Oberstar, D-Minn., plans to introduce soon so the committee can vote on it by Memorial Day. The bill would replace the Safe, Accountable, Flexible, Efficient Transportation Equity Act: a Legacy for Users, or SAFETEA-LU, the current surface transportation funding law that expires Sept. 30.

The legislation would create a program to fund "mega-projects" in urban areas, possibly through a competitive process that would rank or rate congestion-relief plans drawn up by entities similar to metropolitan planning organizations, or MPOs.

There would be a metropolitan and a freight component to the program to relieve congestion in urban areas and other segments of the country, according to Jim Berard, the committee's spokesman.

The "metro mobility" component would be focused on metropolitan plans, instead of individual projects. It would allow metropolitan areas to come up with plans to improve mobility, such as improving highway interchanges, replacing bridges, or developing transit projects.

Plans would be presented to the Department of Transportation, and an "impartial third party" such as the Transportation Research Board or the National Academy of Sciences would review the plans, rate or rank them, and turn them over to the transportation secretary, who would determine the funding recipients, Berard said.

It is possible some funding for the metro mobility plans could be provided based on formulas, he said. Highway trust fund outlays are currently determined using a complicated formula based on several criteria.

Berard said metro mobility formula funding could go to the "top 10 plans, say, and beyond that competitive" grants could be provided, adding that "none of this is really written in stone."

The second component, for "freight mobility," could be its own program or could be paired with the metro mobility component as part of an over-arching congestion-relief program, Berard said.

Aimed at improving freight transportation and decreasing bottlenecks, the freight mobility program would be more project-based, such as improving a segment of an interstate highway.

"It's still conceptual, and whether they're going to be rolled into one program or separate programs" is undecided, Berard said. Either way, the programs will "most likely" be included "in some way, shape, or form" in the bill Oberstar puts forward next month.

It has not been decided yet how or whether the legislation would provide special bond-issuing authority to metropolitan areas.

In order to allow the grants to be used in conjunction with bonds, there would have to be an entity with some regulatory authority and ability to generate revenues as well as to receive grants, congressional and legal sources said in recent interviews.

It is unclear whether the federal government would be able to mandate creation of a state or local entity to implement the mobility programs, or how the program would be implemented for metropolitan areas that cross state, county, or other governance lines.

Sub-sovereign entities - cities or counties, for example - generally receive powers explicitly from their state governments, but multi-state authorities that receive federal funding and can issue bonds already exist, lawyers said Friday.

The Port Authority of New York and New Jersey, the Washington Metropolitan Area Transit Authority, and similar issuers that receive federal funds were created by interstate compacts, they noted.

There is currently an urban partnerships program operated by the DOT that was created by the Bush administration, which provides urban areas funding for tolling, transit, telecommuting, and technology programs to relieve congestion. Miami, New York City, San Francisco, Seattle, and the Minneapolis-St. Paul area were selected as partnership cities. But there is no dedicated funding for the two-year-old program, and it was not created as part of SAFETEA-LU.

Also under the DOT, the Congestion Mitigation and Air Quality Improvement Program provides funding to every state with the goal of improving air quality. It does not specifically target the funds to urban areas or track whether Garvees are issued by recipients, according to Federal Highway Administration officials.

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