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Report to the Chairman, Subcommittee on Surface Transportation and 

Merchant Marine, Committee on Commerce, Science, and Transportation, 

U.S. Senate:



United States General Accounting Office:



GAO:



September 2002:



Marine Transportation:



Federal Financing and a Framework for Infrastructure Investments:



Maritime Transportation:



GAO-02-1033:



Contents:



Letter:



Results in Brief:



Background:



Federal Funding for the Commercial Marine Transportation System:



Federal Funding for the Aviation and Highway Transportation Systems:



Systematic Framework Would Help Guide Decisions on Federal Investment 

in the Marine Transportation System:



Concluding Observations:



Agency Comments:



Appendix I: Objectives, Scope, and Methodology:



Appendix II: Description of Trust Funds Used to Support the Commercial 

Marine, Aviation, and Highway Transportation Systems:



Highway Trust Fund:



Airport and Airway Trust Fund:



Harbor Maintenance Trust Fund:



Inland Waterways Trust Fund:



Appendix III: Amounts Expended by Federal Agencies on the Marine, 

Aviation, and Highway Transportation Systems:



Appendix IV: Amounts Collected by Federal Agencies on Users of 

the Marine, Aviation, and Highway Systems:



Appendix V: Amount of Customs Duties Collected for 

Commodities Transported on the Transportation Systems:



Appendix VI: The Interagency Committee on the Marine Transportation 

System and the National Advisory Council:



Appendix VII: GAO Contacts and Staff Acknowledgments:



GAO Contacts:



Acknowledgments:



Tables:



Table 1: Total Expenditures for the Commercial Marine Transportation 

System by Source of Funds (Fiscal Years 1999-2001):



Table 2: Amounts and Type of Federal Expenditures for the Marine 

Transportation System (Fiscal Years 1999-2001):



Table 3: Distribution of Amounts Collected from Marine Transportation 

System Users (Fiscal Years 1999-2001):



Table 4: Total Expenditures for the Aviation and Highway Transportation 

Systems by Source of Funds (Fiscal Years 1999-2001):



Table 5: Amounts and Type of Federal Expenditures for the Aviation and 

Highway Transportation Systems (Fiscal Years 1999-2001):



Table 6: Distribution of Amounts Collected from Aviation and Highway 

System Users (Fiscal Years 1999-2001):



Table 7: Examples of Potential Federal Funding Tools:



Table 8: Expenditures on the Marine, Aviation, and Highway 

Transportation Systems for Fiscal Years 1999 through 2001:



Table 9: Amounts of Assessments Collected on Users of the Marine, 

Aviation, and Highway Transportation Systems for Fiscal Years 1999 

through 2001:



Table 10: Amount of Customs Duties Collected for Commodities 

Transported on the Marine, Aviation, and Highway Transportation 

Systems, Fiscal Years 1999 through 2001:



Figures:



Figure 1: Comparison of Federal Expenditures and Assessments on Users 

Specific to Each Transportation System (Average for Fiscal Years 1999-

2001):



Figure 2: Framework for Developing an Effective Federal Investment 

Strategy:



Abbreviations:



DOD: Department of Defense: 



DOJ: Department of Justice: 



DOT: Department of Transportation: 



GAO: General Accounting Office: 



HHS: Department of Health and Human Services: 



ICMTS: Interagency Committee on the Marine Transportation

 System: 



MTS: Marine Transportation System: 



NAC: Marine Transportation System National Advisory Council: 



USDA: U.S. Department of Agriculture:



Letter:



September 9, 2002:



The Honorable John Breaux

Chairman, Subcommittee on Surface

 Transportation and Merchant Marine

Committee on Commerce, Science,

 and Transportation

United States Senate:



Dear Mr. Chairman:



As the world’s leading trading nation, the United States depends on a 

vast marine transportation system. Ninety-five percent of our overseas 

trade tonnage moves by water, and the cargo moving through the U.S. 

marine transportation system contributes hundreds of billions of 

dollars to the U.S. gross domestic product. The marine transportation 

system includes coastal ports and shipping channels; 25,000 miles of 

navigable inland and coastal channels and waterways like the 

Mississippi, St. Lawrence, and Columbia Snake rivers; and ports on the 

Great Lakes and elsewhere. According to a congressionally mandated 

report (1999 marine transportation system [MTS] report)[Footnote 1] 

that assessed the capabilities and challenges of the system, critical 

issues include modernizing aging locks and dams on inland waterways, 

dredging waterways to new depths to accommodate larger ships, and 

upgrading navigation systems for maximum safety and efficiency. 

Additionally, new and far-reaching security challenges have emerged for 

the system since the September 11 terrorist attacks.



As it does with the nation’s highway and aviation systems, the federal 

government participates with hundreds of public and private entities in 

maintaining and improving the marine transportation system. Federal 

funding has been directed primarily at “waterside” projects such as 

maintaining channels, aiding navigation, and monitoring the entry of 

ships into the nation’s ports. “Landside” projects, such as terminals, 

berths, piers, and systems for transferring goods from ships to trains 

and trucks, have been funded mainly by state and local entities. 

Federal funding for the system is derived from either general revenues 

or a variety of user charges.



You asked us to analyze federal funding for the commercial marine 

transportation system and compare it with federal funding for the 

aviation and highway systems. As agreed with your office, this report 

provides information on the amount of federal funds expended to support 

the commercial marine transportation system and the amount of revenue 

collected from federal assessments on the users of the system for 

fiscal years 1999, 2000, and 2001. Similarly, this report provides 

information on the amount of federal funds expended to support the 

aviation and highway transportation systems and the amount of revenue 

collected from federal assessments on the users of the transportation 

systems for fiscal years 1999, 2000, and 2001. As you requested, we 

also are providing information on customs duties.[Footnote 2] In 

addition, we agreed to use our work on this assignment, together with 

past work in transportation and other issues, to present a framework 

that the Congress could use to consider potential changes to the scope 

or nature of future federal investments in the marine transportation 

system.



We gathered information on expenditures and collections from 15 federal 

agencies involved in supporting the commercial marine, aviation, and 

highway transportation systems.[Footnote 3] We asked each agency to 

identify the source of funding for expenditures and the accounts that 

were credited with the collections based on categories we identified 

for this purpose.[Footnote 4] We separated their expenditures into the 

following categories: administrative services; physical services, such 

as inspections and certifications; construction and maintenance; or 

miscellaneous services. In addition, we obtained information on customs 

duties collected on goods transported by each transportation system. 

Although we had each agency validate the data provided, we did not 

independently verify agency expenditures and collections. To provide a 

framework for the Congress when considering a revised federal 

investment role in the marine transportation system, we relied 

extensively on the perspectives gained from our past work in 

transportation and infrastructure systems and federal investment 

strategy.[Footnote 5] Appendix I contains a more detailed description 

of the scope and methodology of our work. We conducted our work from 

January 2002 to September 2002 in accordance with generally accepted 

government auditing standards.



Results in Brief:



During fiscal years 1999, 2000, and 2001, federal expenditures for the 

commercial marine transportation system averaged $3.9 billion per year. 

Funding for about 80 percent of these expenditures came from the U.S. 

Treasury’s general fund.[Footnote 6] During this same period, federal 

agencies collected about $1 billion each year from marine 

transportation system users. Most of these collections were credited to 

trust fund accounts[Footnote 7] that, by law, are dedicated to 

maritime-related activities such as improving inland waterways or 

supporting harbor maintenance. In addition, customs duties levied on 

commodities imported through the marine transportation system averaged 

about $15.2 billion each year, most of which were deposited in the U.S. 

Treasury’s general fund.



During the same three-year period, federal expenditures for aviation 

and highway transportation systems averaged $10 billion and $25 

billion, respectively, each year. Unlike the funding approach for the 

marine transportation system, which relies extensively on general tax 

revenue, the federal funding approach for aviation and highway relies 

almost exclusively on assessments on users of the transportation 

systems. During this period, federal agencies collected an average of 

$11 billion each year from users of the aviation transportation system 

and an average of $34 billion each year from users of the highway 

transportation system.[Footnote 8] As with the marine transportation 

system, most of these collections were credited to trust fund accounts. 

Figure 1 summarizes the expenditure and assessment comparisons across 

the three transportation systems. In addition, customs duties for 

commodities imported through the aviation and highway systems averaged 

$3.7 billion and $928 million, respectively, per year.



Figure 1: Comparison of Federal Expenditures and Assessments on Users 

Specific to Each Transportation System (Average for Fiscal Years 1999-

2001):



[See PDF for image]



Source: GAO analysis of data provided by the agencies that expended 

and/or collected funds.



[End of figure]



With so many stakeholders involved in the marine transportation system 

and so many potential demands for funding to maintain and enhance the 

system, federal decision makers would clearly benefit by having a 

systematic framework for making investment choices and for ensuring 

that limited federal resources are used prudently. In examining federal 

investment approaches across a broad stratum of national activities, we 

have found that key components of a framework for evaluating federal 

investments include (1) setting clear and measurable national goals for 

the marine transportation system, including its relationship to other 

transportation modes; (2) defining what the federal role should be 

relative to other stakeholders; (3) determining which funding 

approaches and related tools will maximize the federal return; and (4) 

ensuring that a process is in place for evaluating performance 

periodically so that goals, roles, and approaches can be reexamined and 

modified as necessary.



Background:



The marine transportation system is a vital component of our nation’s 

economic growth and plays an important role in national defense. 

According to the 1999 MTS Report, there is a growing gap between the 

services that the current infrastructure can provide and the increasing 

levels of demand being placed upon it. Furthermore, security issues 

have emerged as a result of the September 11 terrorist 

attacks.[Footnote 9] Given these changes, port stakeholders have 

growing concerns about the level of effort needed to keep the system 

functioning efficiently and are asking the federal government to 

increase funding for the system.



Nation’s Extensive Marine Transportation System Fills Many Roles:



The United States is the world’s largest maritime trading nation, 

accounting for 1 billion metric tons, or nearly 20 percent of the 

world’s oceanborne trade. Over 95 percent of the U.S. overseas trade 

tonnage is shipped by sea. The marine transportation system, a system 

of navigable waterways that connects oceans to rivers, lakes, and 

canals, serves waterborne commerce through more than 300 public and 

private ports. These ports serve as freight connectors between the 

waterborne system and the nation’s other transportation systems. In 

addition to the ports and navigable waterways, the marine 

transportation system also encompasses vessels, marine terminals, 

intermodal connections, shipyards, locks, dams, and information 

systems.



The marine transportation system plays an essential role in the 

nation’s economy and defense. For example, it moves import and export 

cargo worth hundreds of billions of dollars, generating jobs, both 

directly and indirectly, for Americans and our trading partners. The 

system’s inland waterways also support the movement of grain, petroleum 

products, coal, paper products, and industrial chemicals. In addition 

to its economic role, the marine transportation system plays an 

important role in national defense by facilitating the movement of 

military equipment and supplying troops deployed overseas. The nation’s 

marine transportation system also serves as an alternative 

transportation mode to roads and provides recreational value through 

boating, fishing, and cruises.



Federal, state, and local governments and private sector organizations 

all participate in financing the marine transportation system. In 

general, expenditures for the development and operation of the 

waterside portion of the system (e.g., dredging channels, installing 

navigational aids, monitoring vessel traffic, or operating locks and 

dams) have been largely a public function, with participation at the 

federal, state, and local government levels. Ports--usually state, 

county, or local entities--and private commercial interests spend 

billions of dollars in the landside portion of the system by updating 

and modernizing their facilities. The source of the expenditures for 

intermodal connections (rail, pipeline, or highway) can vary. For 

example, rail and pipeline development are generally funded by the 

private sector; funding for public roadways, on the other hand, comes 

from the public sector.



One source of federal funding common to all three major transportation 

systems--marine, aviation, and highway--is collections from 

assessments on users of the system. These collections can include user 

fees and excise taxes.[Footnote 10] Collections are deposited into the 

U.S. Treasury’s general fund and can be used for the general support of 

federal activities or may be earmarked by law for specific purposes and 

credited to a trust fund. Also, some collections are credited directly 

to agency accounts for services provided by that agency such as 

inspections or certifications. Trust funds that support the marine 

transportation system include the Harbor Maintenance Trust Fund and the 

Inland Waterways Trust Fund. Trust funds that support the aviation and 

highway transportation systems include the Airport and Airway Trust 

Fund and the Highway Trust Fund. (See app. II for detailed information 

concerning these trust funds.) The portion of collections from users of 

these systems that are deposited into the U.S. Treasury’s general fund 

are not earmarked for a specified purpose and are used for the general 

support of federal activities.



In addition to assessing fees and taxes to specifically support the 

transportation systems, the federal government also assesses customs 

duties on goods imported into the United States. All three 

transportation systems ship goods that generate customs duties. Customs 

duties are taxes on imported goods without regard to their mode of 

transportation. The majority of customs duties are deposited into the 

U.S. Treasury’s general fund to be used for the general support of 

federal activities.



Concerns Have Been Raised about the Adequacy of the System’s 

Infrastructure:



Given the role of the marine transportation system within the nation’s 

entire transportation system, some system stakeholders have raised 

concerns about the system’s ability to keep pace with the growing 

levels of demands being placed upon it. This issue was discussed in 

depth in the 1999 MTS Report that assessed the capabilities and 

challenges of the nation’s marine transportation system.[Footnote 11] 

The report cited a growing gap between transportation demands and 

shifting user requirements on one side and available transportation 

infrastructure on the other side. According to the report, the 

projected doubling of maritime trade by the year 2020 and the need for 

the system to be responsive to users means that the infrastructure 

would face challenges on several levels. The projected increase in 

maritime trade will likely result in an increase in the overall demand 

for the kinds of infrastructure improvements in which the federal 

government has typically participated. For example, there are calls to 

modernize aging structures such as key locks and dams in river 

transportation systems. Changes in the shipping industry also have 

increased the pressure to make capacity improvements, such as deeper 

navigation channels to accommodate larger ships.



Since the issuance of the 1999 MTS Report, new and far reaching 

security issues have emerged as a result of the September 11 terrorist 

attacks. Many of the security improvements now planned or under way at 

our nation’s ports will require costly outlays for infrastructure, 

technology, and personnel. Even before September 11, the Interagency 

Commission on Crime and Security in U.S. Seaports[Footnote 12] 

estimated that the cost of upgrading security infrastructure at U.S. 

ports ranged from $10 million to $50 million per port. These estimates 

could increase dramatically due to new post-September 11 security 

requirements. For example, when the Congress recently made $92.3 

million in federal funding available for port security as part of a 

supplemental appropriations bill,[Footnote 13] the Transportation 

Security Administration received grant applications totaling almost 

$700 million.[Footnote 14]



In today’s environment, with growing system demands and border security 

concerns, some stakeholders have suggested a larger federal role in 

funding the marine transportation system. Two examples illustrate the 

mounting pressure for increased federal funding in this area. First, 

for the last several years, the U.S. public port authorities have 

advocated increased federal funding for dredging. Currently, funding 

for such maintenance--which has totaled more than $700 million annually 

since fiscal year 2000--is derived from a fee on passengers and 

imported and domestic cargo loaded and unloaded in U.S. ports. Ports 

and shippers would like to see funding for maintenance dredging come 

from the general fund instead, and there was legislation introduced in 

1999 to do so.[Footnote 15] Second, besides the growing pressures on 

areas of traditional federal investment, ports are seeking substantial 

federal assistance to enhance security in the aftermath of the events 

of September 11. In other work we have conducted on port 

security,[Footnote 16] port and private-sector officials have said that 

they believe combating terrorism is the federal government’s 

responsibility, and that if additional security is needed, the federal 

government should provide or pay for it.



Deciding on an appropriate federal role to address these concerns 

requires, in part, a better understanding of the magnitude and nature 

of federal revenues generated by and expenditures for the maritime 

transportation system and how these revenues and expenditures compare 

to other transportation modes. Also key is the establishment of a sound 

investment framework to make certain that limited federal dollars are 

applied in ways that, from a national perspective, provide the greatest 

public benefit.



Federal Funding for the Commercial Marine Transportation System:



During fiscal years 1999, 2000, and 2001, federal expenditures for the 

commercial marine transportation system averaged about $3.9 billion 

each year, most of which was provided from general revenues. About 45 

percent of this money was spent on construction and maintenance of 

federally authorized projects. During this same period, almost $1 

billion in revenue was collected each year by federal agencies from 

users of the marine transportation system, and most of this money was 

credited to trust fund accounts dedicated to financing the system. In 

addition, customs duties on imported goods shipped through the system 

during the same period averaged $15.2 billion each year. The majority 

of the customs duties are deposited into the U.S. Treasury’s general 

fund.



General Revenues Account for More than Three-Fourths of the Federal 

Expenditures for the Commercial Marine Transportation System:



Thirteen federal agencies[Footnote 17] spent an average of $3.9 

billion[Footnote 18] annually for 3 years on the commercial marine 

transportation system. (See app. III.) As shown in table 1, the 

majority of federal funding spent by these agencies for the system came 

from general revenues. On average, general revenues accounted for $3 

billion, or 80 percent, of the total amount expended for the system.



Table 1: Total Expenditures for the Commercial Marine Transportation 

System by Source of Funds (Fiscal Years 1999-2001):



Dollars in millions.



Source of funds: Reimbursable agency accounts; 1999: $41; 2000: $49; 
2001: 

$51; Average: $47.



Source of funds: Trust fund accounts; 1999: 426; 2000: 853; 2001: 825; 

Average: 701.



Source of funds: General revenues; 1999: 3,250; 2000: 2,994; 2001: 
3,117; 

Average: 3,120.



Source of funds: Total marine transportation system; 1999: $3,717; 
2000: 

$3,896; 2001: $3,993; Average: $3,868.



Note: Figures are nominal and have not been adjusted for inflation.



Source: GAO analysis of data provided by agencies that expended funds.



[End of table]



To provide a perspective on the uses for which federal expenditures 

were applied, we analyzed the type of service or activity for which 

each expenditure was directed. We used four categories: administrative 

processing and associated services (e.g., processing documents or 

issuing permits), physical services (e.g., inspections or 

certifications), construction and maintenance projects (e.g., 

dredging, constructing or maintaining locks and dams, or operating and 

maintaining aids to navigation), and miscellaneous services. As shown 

in table 2, the average amount expended for construction and 

maintenance projects represented $1.7 billion, or 45 percent, of the 

total amount expended annually for the system, with physical services 

accounting for about $1.5 billion, or 38 percent.



Table 2: Amounts and Type of Federal Expenditures for the Marine 

Transportation System (Fiscal Years 1999-2001):



Dollars in millions.



Type of service or activity: Administrative; 1999: $497; 2000: $564; 
2001: 

$605; Average: $555.



Type of service or activity: Physical services; 1999: 1,429; 2000: 
1,486; 

2001: 1,496; Average: 1,471.



Type of service or activity: Construction and maintenance; 1999: 1,696; 
2000: 

1,747; 2001: 1,794; Average: 1,746.



Type of service or activity: Miscellaneous; 1999: 95; 2000: 99; 2001: 
98; 

Average: 97.



Type of service or activity: Total marine transportation system; 1999: 
$3,717; 

2000: $3,896; 2001: $3,993; Average: $3,869.



Note: Figures are nominal and have not been adjusted for inflation.



Source: GAO analysis of data provided by agencies that expended funds.



[End of table]



Most of the Revenue Collected from System Users was Credited to Trust 

Fund Accounts:



Eleven different federal agencies collected an average of nearly $1 

billion each year from users of the commercial marine transportation 

system to help finance federal expenditures to support the 

system.[Footnote 19] (See app. IV.) As shown in table 3, an average of 

$830 million, or 85 percent, of the assessment amounts collected from 

users was credited to trust funds to be appropriated to agencies for 

designated services, with the remaining amount credited to agency 

accounts as reimbursement for the services provided or deposited in the 

general fund for the general support of federal activities.



Table 3: Distribution of Amounts Collected from Marine Transportation 

System Users (Fiscal Years 1999-2001):



Dollars in millions.



Fund type: Reimbursable agency accounts; 1999: $41; 2000: $51; 2001: 
$54; 

Average: $49.



Fund type: Trust fund accounts; 1999: 741; 2000: 857; 2001: 891; 
Average: 

830.



Fund type: General fund; 1999: 93; 2000: 97; 2001: 99; Average: 96.



Fund type: Total marine transportation system; 1999: $875; 2000: 
$1,005; 

2001: $1,044; Average: $975.



Note: Figures are nominal and have not been adjusted for inflation.



Source: GAO analysis of data provided by agencies that collected the 

assessments.



[End of table]



The collections shown in table 3 do not include amounts from customs 

duties levied on the goods carried through the marine transportation 

system. The Customs Service estimates that duties on commodities 

entering the United States by the system for fiscal years 1999, 2000, 

and 2001 were about $14.3 billion, $15.6 billion, and $15.6 billion, 

respectively. (See app. V.) Most of the customs duties are deposited 

into the general fund for the general support of federal activities, 

with the largest exception being that approximately 30 percent of the 

gross receipts from customs duties were designated for agricultural and 

food programs.



Federal Funding for the Aviation and Highway Transportation Systems:



During fiscal years 1999, 2000, and 2001, federal expenditures averaged 

$10 billion each year for the aviation system and $25 billion each year 

for the highway system. Unlike the funding approach used for the 

commercial marine transportation system, which relies heavily on 

general tax revenue, the aviation and highway transportation systems 

were primarily funded by collections from users of the systems that are 

accounted for in trust funds. During this same period, most of the 

revenue collected by federal agencies for the aviation and highway 

transportation systems were credited to trust fund accounts. Customs 

duties on imported goods carried by these systems averaged $3.7 billion 

each year for the aviation transportation system and $928 million for 

the highway transportation system. Most of these customs duties were 

deposited into the U.S. Treasury’s general fund.



Assessments on Users Are the Primary Source of Funding for the Aviation 

and Highway Transportation Systems:



Six federal agencies[Footnote 20] were involved in spending the $10 

billion annually on the aviation transportation system and five federal 

agencies[Footnote 21] were involved in expending the $25 billion 

annually on the highway transportation system. (See app. III.) Whereas 

the primary source of funding for the marine transportation system is 

general tax revenues, the vast majority of federal funding invested in 

both the aviation and highway systems came from assessments on users of 

the systems that are accounted for in trust fund accounts, as shown in 

table 4. During the three-year period, assessments on system users were 

the funding source for about 88 percent of the amount spent on the 

aviation system and over 99 percent of the amount spent on the highway 

system.



Table 4: Total Expenditures for the Aviation and Highway Transportation 

Systems by Source of Funds (Fiscal Years 1999-2001):



Dollars in millions.



Aviation transportation system: 



Fund type: Reimbursable agency accounts; 1999: Aviation transportation 

system: $238; 2000: $258; 2001: $267; Average: $254.



Fund type: Trust fund accounts; 1999: Aviation transportation system: 

8,172; 2000: 9,180; 2001: 9,696; Average: 9,016.



Fund type: General revenues; 1999: Aviation transportation system: 969; 

2000: 1,007; 2001: 1,070; Average: 1,015.



Fund type: Total aviation system; 1999: Aviation transportation system: 

$9,379; 2000: $10,445; 2001: $11,033; Average: $10,285.



Highway transportation system: 



Fund type: Reimbursable agency accounts; 1999: Aviation transportation 

system: $24; 2000: $24; 2001: $22; Average: $23.



Fund type: Trust fund accounts; 1999: Aviation transportation system: 

22,706; 2000: 25,007; 2001: 27,209; Average: 24,974.



Fund type: General revenues; 1999: Aviation transportation system: 90; 

2000: 68; 2001: 116; Average: 91.



Fund type: Total highway system; 1999: Aviation transportation system: 

$22,820; 2000: $25,099; 2001: $27,347; Average: $25,088.



Note: Figures are nominal and have not been adjusted for inflation.



Source: GAO analysis of data provided by agencies that expended funds.



[End of table]



As we did for maritime funds, we analyzed the type of service or 

activity for which each expenditure was directed, using the same four 

categories of administrative processing and associated services, 

physical services, construction and maintenance projects, and 

miscellaneous services. As shown in table 5, the average amount 

expended for construction and maintenance projects represented about 

$7.2 billion, or 70 percent, of the total amount expended for the 

aviation system and about $25 billion, or nearly 100 percent, of the 

total amount expended for the highway system. The Federal Aviation 

Administration and the Federal Highway Administration distributed most 

of the funds expended for construction and maintenance projects for 

these systems.



Table 5: Amounts and Type of Federal Expenditures for the Aviation and 

Highway Transportation Systems (Fiscal Years 1999-2001):



Aviation transportation system: 



Dollars in millions: 



Aviation transportation system: 



Type of service or activity: Administrative; 1999: $423; 2000: $437; 

2001: $472; Average: $444.



Type of service or activity: Physical services; 1999: 2,466; 2000: 

2,543; 2001: 3,059; Average: 2,689.



Type of service or activity: Construction and maintenance; 1999: 

6,490; 2000: 7,465; 2001: 7,502; Average: 7,152.



Type of service or activity: Miscellaneous; 1999: 0; 2000: 0; 

2001: 0; Average: 0.



Type of service or activity: Total aviation system; 1999: $9,379; 

2000: $10,445; 2001: $11,033; Average: 

$10,285.



Highway transportation system: 



Type of service or activity: Administrative; 1999: $41; 

2000: $34; 2001: $37; Average: $37.



Type of service or activity: Physical services; 1999: 79; 2000: 

65; 2001: 110; Average: 84.



Type of service or activity: Construction and maintenance; 1999: 

22,700; 2000: 25,000; 2001: 27,200; Average: 

24,967.



Type of service or activity: Miscellaneous; 1999: 0; 2000: 0; 

2001: 0; Average: 0.



Type of service or activity: Total highway system; 1999: $22,820; 

2000: $25,099; 2001: $27,347; Average: $25,088.



Note: Figures are nominal and have not been adjusted for inflation.



Source: GAO analysis of data provided by agencies that expended funds.



[End of table]



Most Revenue Collected from System Users Was Credited to Trust Fund 

Accounts:



Five federal agencies collected an average $11 billion from the 

aviation transportation system[Footnote 22] while four federal agencies 

collected an average $34 billion on the highway transportation 

system.[Footnote 23] (See app. IV.) As with the marine transportation 

system, the vast majority of the assessment amounts collected on the 

aviation and highway transportation systems was credited to trust funds 

to be appropriated to agencies for designated services, as shown in 

table 6. The remaining amounts were credited to agency accounts as 

reimbursement for the services they provided or deposited into the U.S. 

Treasury’s general fund for the general support of federal activities. 

On average, about 94 percent of the $11.1 billion collected annually 

for the aviation system and nearly 100 percent of the $33.7 billion 

collected annually for the highway system were credited to trust fund 

accounts.



Table 6: Distribution of Amounts Collected from Aviation and Highway 

System Users (Fiscal Years 1999-2001):



Dollars in millions.



Aviation transportation system: 



Fund type: Reimbursable agency accounts; 1999: 

$236; 2000: $255; 2001: $265; Average: $252.



Fund type: Trust fund accounts; 1999: 11,663; 

2000: 9,860; 2001: 9,581; Average: 10,368.



Fund type: General fund; 1999: 421; 2000: 437; 

2001: 466; Average: 441.



Fund type: Total aviation system; 1999: $12,320; 

2000: $10,552; 2001: $10,312; Average: $11,061.



Highway transportation system: 



Fund type: Reimbursable agency accounts; 1999: 

$24; 2000: $24; 2001: $22; Average: $23.



Fund type: Trust fund accounts; 1999: 32,255; 

2000: 35,134; 2001: 33,683; Average: 33,691.



Fund type: General fund; 1999: 1; 2000: 2; 2001: 

2; Average: 2.



Fund type: Total highway system; 1999: $32,280; 

2000: $35,160; 2001: $33,707; Average: $33,716.



Note: Figures are nominal and have not been adjusted for inflation.



Source: GAO analysis of data provided by agencies that collected the 

assessments.



[End of table]



The Customs Service reported that duties on commodities entering the 

United States by the aviation transportation system for fiscal years 

1999, 2000, and 2001 were about $3.6 billion, $4.1 billion, and $3.4 

billion, respectively. For the same period, customs duty collections 

for the highway system were about $1.2 billion, $880 million, and $735 

million. (See app. V.) Most of these customs duties were credited to 

the general fund for the general support of federal activities.



Systematic Framework Would Help Guide Decisions on Federal Investment 

in the Marine Transportation System:



A systematic framework with several key components would be helpful in 

considering potential changes in the scope or nature of federal funding 

for the marine transportation system. Substantial new investments in 

the maritime infrastructure by federal, state, and local governments 

and by the private sector may be required because of an aging 

infrastructure, changes in the shipping industry, and increased 

concerns about security. Pressure on the federal government to bear a 

significant portion of these new investment costs is evident. These 

growing and varied demands for increased federal investments in the 

marine transportation system heighten the need for a clear 

understanding about the federal government’s purpose and role in 

providing funding for the system and for a sound investment approach to 

guide federal participation. In examining federal investment approaches 

across many national activities, we have found that issues such as 

these are best addressed through a systematic framework. As shown in 

figure 2, this framework has the following four components that 

potentially could be applied to all transportation systems:



* Set national goals for the system. These goals, which would establish 

what federal participation in the system is designed to accomplish, 

should be specific and measurable.



* Define clearly what the federal role should be relative to other 

stakeholders. This step is important to help ensure that federal 

participation supplements and enhances participation by others, rather 

than simply replacing their participation.



* Determine which funding tools and other approaches, such as 

alternatives to investment in new infrastructure, will maximize the 

impact of any federal investment. This step can help expand the 

capacity to leverage funding resources and promote shared 

responsibilities.



* Ensure that a process is in place for evaluating performance 

periodically so that defined goals, roles, and approaches can be 

reexamined and modified, as necessary.



Figure 2: Framework for Developing an Effective Federal Investment 

Strategy:



[See PDF for image]



Source: GAO.



[End of figure]



Establishing National Goals to Guide Federal Participation:



The first component of a framework for evaluating federal investments 

is establishing a set of clearly defined national goals that can serve 

as a basis for guiding federal participation. Such goals can help chart 

a clear direction, establish priorities among competing issues, specify 

the desired results, and lay the foundation for such other decisions as 

determining how assistance will be provided.



At the federal level, measuring results for federal programs has been a 

longstanding objective of the Congress. The Government Performance and 

Results Act of 1993[Footnote 24] has become the primary legislative 

framework through which agencies are required to set strategic and 

annual goals that are based on national goals, measure performance, and 

report on the degree to which goals are met and on what actions are 

needed to achieve or modify goals that have not been met. These goals 

need to be measurable in order to identify and provide accountability 

for the amount of public benefits to be attained. Stating goals in 

measurable terms makes it easier to assess the success or failure of 

government support and ultimately, to hold system stakeholders 

accountable for the outcomes. Establishing clear goals and performance 

measures for the marine transportation system is critical to ensuring 

both a successful and a fiscally responsible effort.



Meaningful goal-setting for the marine transportation system requires 

an in-depth understanding of the relationship of the system to other 

transportation modes. Transportation experts highlight the need to view 

the system in the context of the entire transportation system in 

addressing congestion, mobility, and other challenges and ultimately 

investment decisions. For example, congestion challenges often occur 

where modes connect or should connect, such as ports where freight is 

transferred from one mode to another. The connections require 

coordination of more than one mode of transportation and cooperation 

among multiple transportation providers and planners. While decision 

makers recognize the importance of intermodal planning, the goals for 

the system need to reflect this broader perspective. A systemwide 

approach to transportation planning and funding, as opposed to focus on 

a single mode or type of travel, could improve focus on outcomes 

related to customer or community needs.



Meaningful goal-setting also requires a comprehensive understanding of 

the scope and extent of issues and priorities facing the marine 

transportation system. However, there are clear signs that certain key 

issues and priorities are not yet understood well enough to establish 

meaningful goals for the system. For example, a comprehensive analysis 

of the issues and problems facing the maritime transportation system 

has not yet been accomplished.[Footnote 25] In setting goals for 

investment decisions, leading organizations usually perform 

comprehensive needs assessments to obtain a clear understanding of the 

extent and scope of their issues, problems, and needs and ultimately to 

identify resources needed. These assessments should be results-oriented 

in that they determine what is needed to obtain specific outcomes 

rather than what is needed to maintain or expand existing capital 

stock.[Footnote 26] Developing such information is important for 

ensuring that goals are framed in an adequate context. The call by many 

ports for federal assistance in dredging channels or harbors to 50 feet 

is an example. Dredging to 50 feet allows a port to accommodate the 

largest of the container ships currently being constructed and placed 

in service. However, developing the capacity to serve such ships is no 

guarantee that companies with such ships will actually choose to use 

the port. Every port’s desire to be competitive by having a 50-foot 

channel could thus lead to a situation in which the nation as a whole 

has an overcapacity for accommodating larger ships. The result, at 

least for the excess capacity, would signal an inefficient use of 

federal resources that might have been put to better use in other ways. 

Proper economic analysis for the justification of such a project, 

however, may minimize the likelihood of such excess capacity.



Defining the Federal Role Relative to Other Stakeholders:



The second component of the framework involves defining the federal 

role relative to other stakeholders. The federal government is only one 

of many stakeholders in the marine transportation system.[Footnote 27] 

While these various stakeholders may all be able to share a general 

vision of the system, they are likely to diverge in the priorities and 

emphasis they place on specific goals. For example, the federal 

government, with its national point of view, is in a much different 

position than a local port intensely involved in head-to-head 

competition with other ports for the business of shipping companies or 

other businesses. For a port, its own infrastructure is paramount, 

while the federal government’s perspective is focused on the national 

and broader public interest.



Past patterns of participation are a tacit acknowledgement of these 

differences in roles. Traditionally, federal participation has been 

directed mainly at projects related to “waterside” issues, such as 

keeping navigation channels open by dredging or icebreaking; improving 

systems of locks and dams; maintaining navigational aids such as 

lighthouses or radio systems; and monitoring the movement of ships in 

and out of the nation’s coastal waters. Federal participation has 

generally not extended to “landside” projects related to a port’s 

capabilities, such as building terminals or piers and purchasing cranes 

or other equipment to unload cargoes.[Footnote 28]



Since there are so many stakeholders involved with the marine 

transportation system, achieving national goals for the system hinge on 

the ability of the federal government to forge effective partnerships 

with nonfederal entities. Decision makers have to balance national 

goals with the unique needs and interests of all nonfederal 

stakeholders in order to leverage the resources and capabilities that 

reside within state and local governments and the private sector.



Future partnering among key maritime stakeholders may take on a 

different form as transportation planners begin focusing across 

transportation modes in making investment decisions instead of making 

investment decisions for each mode separately. Transportation experts 

with whom we talked said that current transportation planning 

institutions, such as state transportation departments and metropolitan 

planning organizations,[Footnote 29] may not have sufficient expertise 

or authority to effectively identify and implement improvements across 

modes. They suggested that transportation planning by all entities 

should focus more closely on regional issues and highlighted the 

importance of cooperation and coordination among modal agencies at the 

federal, state, and local levels, between public and private 

transportation providers, and between transportation planning 

organizations and other government and community agencies to address 

transportation issues.



The Alameda Corridor Program in the Los Angeles area provides an 

example of how effective partnering allowed the capabilities of the 

various stakeholders to be more fully utilized. Called the Alameda 

Corridor because of the street it parallels, the program created a 20-

mile, $2.4 billion railroad express line connecting the ports of Los 

Angeles and Long Beach to the transcontinental rail network east of 

downtown Los Angeles. The express line eliminates approximately 200 

street-level railroad crossings, relieving congestion and improving 

freight mobility for cargo. This project made substantial use of local 

stakeholders’ ability to raise funds. While the federal government 

participated in the cost, its share was about 20 percent of the total. 

In addition, about 80 percent of the federal assistance is in the form 

of a loan rather than a grant.



Making careful decisions about these roles is important in order to 

match capabilities and resources with appropriate goals. This is 

important for federal assistance because other stakeholders may want to 

emphasize other priorities and use federal funds in ways that may not 

match federal goals. This can happen in two main ways.



* Other stakeholders may seek to transfer a previously local function 

to the federal arena. For example, in the area of port security, there 

is a significant funding need at the local level for overtime pay for 

police and security guards. Given the degree of need, if more federal 

funding were made available, local interests might push to apply 

federal funding in this way, thereby transferring a previously local 

function to the federal arena. In moving toward federal coverage of 

basic public services, the Congress and federal officials would be 

substantially expanding the federal role.



* Other stakeholders may also seek to use federal funds to reduce their 

traditional levels of commitment. Federal decision makers need to guard 

against this tendency--where federal support reduces or supplants 

private, state, or local funding. One aim of providing federal 

assistance has been to promote or supplement expenditures that would 

not otherwise occur--or at a level deemed necessary--without federal 

funding. Otherwise, federal funding is largely substituting for funding 

that would otherwise have been provided by private or other public 

investors.[Footnote 30]



Developing Funding Tools and Other Approaches That Maximize the Return 

on the Federal Investment:



The third component of a framework for evaluating federal investments 

involves a careful choice of the approaches and funding tools that 

would best leverage federal funds in meeting identified goals. A well-

designed funding approach can help encourage investment by other 

stakeholders and maximize the application of limited federal dollars. 

In addition, the federal government has other tools available besides 

those that relate specifically to making funding available such as 

demand management, technology improvements, and different operational 

approaches.



An important step in selecting the appropriate approach is to 

effectively harness the financial capabilities of local, state, and 

private stakeholders. The Alameda Corridor Program is an apt example. 

In this program, state and local stakeholders had both a financial 

incentive to relieve congestion and the commitment and ability to bring 

financial resources to bear. Some other ports may not have the same 

level of financial incentives or capabilities to undertake projects 

largely on their own. For example, in studying the extent to which 

Florida ports were able to implement a set of security requirements 

imposed by the state, we found that some ports were able to draw on 

more financial resources than others, based on such factors as size, 

economic climate, and funding base.[Footnote 31] While such information 

would be valuable in crafting federal assistance, it currently is 

largely unavailable. Relatively little is known about the extent of 

state, local, and private sector funding resources across the country.



The federal government has a variety of funding tools potentially 

available for use, ranging from outright grants to loan guarantees, as 

shown in table 7. Through cost sharing and other arrangements, the 

federal government can use these approaches to help ensure that federal 

funds supplement--and not supplant--funds from other stakeholders. For 

example, an effective use of funding tools, with appropriate nonfederal 

matches and incentives, can be valuable in implementing a national 

strategy to support federal port investments, without putting the 

government in the position of choosing winners or losers.



Table 7: Examples of Potential Federal Funding Tools:



Approach: Grants; Description: Grants are usually cash payments made by 

the federal government to a beneficiary organization, government, or 

individual. It is a tool with the primary objective to stimulate or 

support spending by the recipient for a nationally important activity 

for which they otherwise would have spent less. There are different 

types of grants (e.g., categorical and block) and specific design 

elements, such as matching requirements and reporting requirements, 

that affect the targeting of grant funds, the supplanting of own-source 

funds, and the balance between accountability and flexibility. Grants 

may also be contingent on various matching requirements.



Approach: Direct loans; Description: Loans occur when the federal 

government lends money directly to borrowers. After making the loans, 

the government then services the loan (i.e., collects scheduled 

repayments from the borrowers) and forecloses or otherwise attempts to 

collect on the loan if a borrower cannot make scheduled payments. Loans 

may also be contingent on various matching requirements. An example is 

the U.S. Department of Education’s Direct Student Loan program.



Approach: Loan guarantees; Description: Loan guarantees occur when the 

federal government guarantees a loan that a private lender, such as a 

commercial bank or mortgage lender, makes to a borrower. The government 

enters into a contractual agreement to make full or partial payment to 

the lender in case the borrower defaults on the guaranteed loan. The 

private lender originates the loan, secures the government guarantee, 

and services the loan according to government regulations. Loan 

guarantees may also be contingent on various matching requirements. An 

example is the U.S. Maritime Administration’s Title XI program.



Approach: Tax expenditures; Description: Tax expenditures are the 

result of specific provisions in the federal tax law that allow 

corporations or individuals to defer, reduce, or eliminate a portion of 

their tax obligation. This tool allows the federal government to pursue 

its objectives, not by spending tax dollars it collects, but rather by 

allowing corporations or individuals to keep and spend dollars they 

would otherwise owe the government. An example is the home mortgage 

interest deduction.



Approach: User fees; Description: User fees are charges to users for 

goods or services provided by, or activities regulated by, the federal 

government. User fees generally apply to activities that provide 

benefits to identifiable recipients and are normally related to the 

cost of the goods or services provided. They may be paid into the 

general fund or, under specific statutory authority, may be made 

available to an agency carrying out the activity. An example is a fee 

for entering a national park. User fees may also be collected through a 

tax such as an excise tax. Since these collections result from the 

government’s sovereign powers, the proceeds are generally recorded as 

budget receipts, not as offsetting collections. An example is the 

federal gasoline tax.



Source: The Tools of Government: A Guide to the New Governance, Lester 

M. Salamon, ed., Oxford University Press, (London: 2002).



[End of table]



Federal approaches can take other forms besides those that relate 

specifically to making funding available. These tools allow increased 

output without making major capital investments. Examples include the 

following:



* Demand management. Demand management is designed to reduce travel at 

the most congested times and on the most congested routes. One demand 

management strategy involves requiring users to pay more to use 

congested parts of the system during such periods, with the idea that 

the charge will provide an incentive for some users to shift their use 

to a less congested time or to less congested routes or transportation 

modes. On inland waterways, for example, congestion pricing for locks-

-that is, charging a toll during congested periods to reflect the 

additional cost of delay that a vessel imposes on other vessels--might 

be a way to space out demand on the system. Economists generally 

believe that such surcharges or tolls enhance economic efficiency by 

making operators take into account the external costs they impose on 

others in deciding when, where, and how to travel.



* Technology improvements. Instead of making extensive modifications to 

infrastructure such as locks and dams, it may be possible to apply 

federal investments to technology that makes the existing system more 

efficient. For example, technological improvements may be able to help 

barges on the inland waterways navigate locks in inclement weather, 

thereby reducing delays on the inland waterway system.



* Different operational approaches. Enhancing capacity of existing 

infrastructure through increased maintenance and rehabilitation is an 

important supplement to, and sometimes a substitute for, building new 

infrastructure. Similarly, different operating arrangements may also be 

able to produce efficiencies. For example, the U.S. Army Corps of 

Engineers is investigating the possibility of automating the operation 

of locks and dams on the inland waterways to reduce congestion at 

bottlenecks.



Examining Outcomes to Determine the Effectiveness of Investments:



The final component of a framework for developing a federal investment 

strategy is evaluating results and incorporating lessons learned into 

the decision-making process. Evaluating the effectiveness of existing 

or proposed federal investment programs could provide decision makers 

with valuable information for determining whether intended benefits 

have been achieved and whether goals, responsibilities, and approaches 

should be modified. Such evaluations are also useful for better 

ensuring accountability and providing incentives for achieving results.



Leading organizations that we have studied have stressed the importance 

of developing performance measures and linking investment decisions and 

their expected outcomes to overall strategic goals and 

objectives.[Footnote 32] Hypothetically, for example, one goal for the 

marine transportation system might be to increase throughput (that is, 

the volume of cargo) that can be transported through a particular lock 

and dam system on the nation’s inland waterways. A performance measure 

to gauge the results of an investment for this goal might be the 

increased capacity (such as number of barges per hour) that results 

from this investment and the economic benefits associated with that 

increase. Assessing progress in achieving this goal is, therefore, 

dependent on carrying out analyses of accurate and complete outcome 

data.



Concluding Observations:



There are substantial differences in the federal approach for 

supporting the commercial marine transportation system and the 

approaches for supporting air and highway transportation. Compared to 

these two other transportation modes, the federal approach for marine 

transportation funding relies more extensively on general revenues and 

less extensively on users of the system. These differences 

notwithstanding, there is growing awareness of, and agreement about, 

the need to view various transportation modes from an integrated 

standpoint, particularly for the purposes of developing and 

implementing a federal investment strategy and alternative funding 

approaches. Also, an intermodal perspective appears especially 

important as the nation reacts to the increased security needs for 

transportation networks and as it plans for better, more efficient 

transportation for the future. In such an effort, the framework of 

goals, roles, tools, and evaluation can be particularly helpful--not 

only for marine transportation funding, but for other modes as well.



Agency Comments:



We validated the data in our report on assessment collections and 

expenditures with officials from the 15 federal agencies currently 

levying assessments on users of the systems and expending funds to 

support the systems. In addition, we provided a draft of this report to 

the U.S. Army Corps of Engineers and the Department of Transportation 

for review and comment. The officials generally agreed with the facts 

presented in this report. We made technical changes to the report, as 

appropriate.



As agreed with your offices, unless you publicly announce the contents 

of this report earlier, we plan no further distribution until 10 days 

from the report date. At that time, we will send copies of the report 

to the Honorable Norman Y. Mineta, Secretary of Transportation; Admiral 

Thomas H. Collins, Commandant of the Coast Guard; Captain William G. 

Schubert, Administrator, Maritime Administration; the Honorable Albert 

S. Jacquez, Administrator, Saint Lawrence Seaway Development 

Corporation; the Honorable Michael K. Powell, Chairman, Federal 

Communications Commission; the Honorable Donald H. Rumsfeld, Secretary 

of Defense; the Honorable John Ashcroft, Attorney General; the 

Honorable Thomas E. White, Secretary of the Army; Lieutenant General 

Robert B. Flowers, Commander and Chief of Engineers, U.S. Army Corps of 

Engineers; the Honorable Harold J. Creel, Jr., Chairman, Federal 

Maritime Commission; the Honorable Donald L. Evans, Secretary of 

Commerce; the Honorable Paul H. O’Neill, Secretary of the Treasury; the 

Honorable Robert C. Bonner, Commissioner of Customs; the Honorable 

Charles O. Rossotti, Commissioner of Internal Revenue; the Honorable 

Monte R. Belger, Acting Administrator, Federal Aviation Administration; 

the Honorable Mary E. Peters, Administrator, Federal Highway 

Administration; the Honorable Ann M. Veneman, Secretary of Agriculture; 

the Honorable Tommy G. Thompson, Secretary of Health and Human 

Services; the Honorable Julie Louise Gerberding, Director, Centers for 

Disease Control; the Honorable Mitchell E. Daniels, Director, Office of 

Management and Budget; and Vice Admiral Conrad C. Lautenbacher, Jr., 

Administrator, National Oceanic and Atmospheric Administration. We also 

will make copies available to others upon request. In addition, the 

report will be available at no charge on the GAO Web site at http://

www.gao.gov.



If you have any questions about this report, please contact me at 

heckerj@gao.gov at (202)512-2834 or Randall Williamson at 

williamsonr@gao.gov at (206)287-4860. GAO contacts and acknowledgments 

are listed in appendix VII.



Sincerely yours,



JayEtta Z. Hecker

Director, Physical Infrastructure:



Signed by JayEtta Z. Hecker:



[End of section]



Appendix I: Objectives, Scope, and Methodology:



To determine the amount of federal expenditures to support the 

commercial marine,[Footnote 33] aviation, and highway transportation 

systems and the amount of collections from federal assessments on the 

users of these systems for fiscal years 1999, 2000, and 2001, we 

reviewed prior GAO reports and other relevant documents, and 

interviewed officials from the Office of Management and Budget and 

various industry representatives. On the basis of this determination, 

we contacted 15 federal agencies and asked them to provide information 

on the expenditures and collections specific to the transportation 

systems. We relied on each agency to identify expenditures and 

collections related to activities that support the transportation 

systems.



For the purposes of this report, expenditures are outlays to pay 

federal obligations identified by the agency for each fiscal year to 

support these systems, but may include payments for obligations 

incurred in previous fiscal years. Assessment collections are fees and 

taxes paid by users of a system that were identified by the agencies 

and may include revenues credited to federal funds, offsetting 

collections, and offsetting revenue.



For each expenditure, we requested information on the nature of the 

expenditure (e.g., administrative processing, physical services, 

construction and maintenance projects, and miscellaneous services), 

source of funds for the expenditure (general revenues, trust fund, and 

reimbursement from agency account), and the amount expended for fiscal 

years 1999, 2000, and 2001. Expenditures for enhanced port security, 

derived from the Department of Defense Supplemental Budget 

Appropriations for fiscal year 2002, were not included in our review. 

For each assessment, we requested information on the nature of the 

assessment (fee or tax), a description of the assessment, the type of 

fund the receives the collection (general fund, trust fund, and 

reimbursement to agency account), and the amount collected for fiscal 

years 1999, 2000, and 2001. In addition to the assessment revenue 

collected that is specific to the transportation systems, we also 

received data from the U.S. Customs Service on the amount of duty 

collected on commodities imported by the transportation modes. The U.S. 

Customs Service provided estimates, developed by the U.S. Census 

Bureau, on the percent of collections that were attributable to water, 

sea, and land transportation modes. We applied these percentages to the 

total customs duties collected for fiscal years 1999, 2000, and 2001 

provided by the U.S. Customs Service to compute the amount of total 

customs duties collected by the marine, aviation, and highway 

transportation systems each year.



We performed limited reasonableness tests on the data (comparing the 

data to the actual trust fund outlays contained in the budget of the 

U.S. government for fiscal years 2001, 2002, and 2003) and found that 

the data were reliable enough for our uses in this report. Although we 

had each agency validate the data provided, we did not verify agency 

expenditures and collections.



To identify initial considerations that could help the Congress in 

addressing whether to change the scope or nature of federal investments 

in the marine transportation system, we conducted a review of prior GAO 

reports and other relevant studies to identify managerial best 

practices in establishing strategic plans and federal investment 

approaches. We also interviewed U.S. Army Corps of Engineers and 

Department of Transportation (DOT) officials to obtain information on 

the current state of the commercial marine transportation system, the 

ability of the system to keep pace with growing demand, and activities 

that are under way to assess the condition and capacity of the 

infrastructure. We conducted our work from January 2002 to September 

2002 in accordance with generally accepted government auditing 

standards.



[End of section]



Appendix II: Description of Trust Funds Used to Support the Commercial 

Marine, Aviation, and Highway Transportation Systems:



Transportation-related federal trust funds include the Highway Trust 

Fund, Airport and Airways Trust Fund, Harbor Maintenance Trust Fund, 

and Inland Waterways Trust Fund. The trust fund collections come from 

user charges (such as fuel taxes, vehicle taxes, registration and 

licensing fees, and air passenger ticket taxes), which are deposited in 

the U.S. Treasury’s general fund for subsequent transfer to the trust 

fund accounts. Also, interest earned through fund balances is generally 

added back to these funds.



Highway Trust Fund:



The Highway Trust Fund was established by the Highway Revenue Act of 

1956 (Pub. L. No. 84-627). Highway Trust Fund revenues are derived from 

various excise taxes on highway users (e.g., motor fuel, motor 

vehicles, tires, and parts and accessories for trucks and buses) and 

interest earned on balances. The excise tax on gasoline is the most 

important source of the trust fund’s revenues. The excise tax rate on 

gasoline has changed five times since 1985 and is currently 18.4 cents 

per gallon.



The money paid into the fund is earmarked primarily for the Federal-aid 

Highway program, which is apportioned to states for planning, 

construction, and improving the nation’s highway system, roads, and 

bridges. Effective April 1983, the Highway Revenue Act of 1982 (Pub. L. 

No. 97-424) created the Mass Transit Account within the Highway Trust 

Fund. Currently, 2.86 cents per gallon of the federal excise tax on 

gasoline sales is set aside for the Mass Transit Account that will be 

used for transit capital projects.



A small portion (0.1 cents per gallon) of the federal excise tax on 

gasoline has been assigned to the Leaking Underground Storage Tank 

Trust Fund until April 1, 2005.



Airport and Airway Trust Fund:



The Airport and Airway Revenue Act of 1970 (Pub. L. No. 91-258) created 

the Airport and Airway Trust Fund to provide a stable source of funding 

to finance investments in the airport and airway system and, to the 

extent funds were available, cover the operating costs of the airway 

system. The Act provided for the deposit (through the general fund) of 

aviation excise taxes into the trust fund. Since its establishment, 

various changes have been made to the rate structure supporting the 

trust fund. The most recent changes were centered in the Taxpayer 

Relief Act of 1997 (Pub. L. No. 105-:



34), effective October 1, 1997, which, among other things, extended 

aviation taxes for 10 years (through September 30, 2007) and converted 

the 10 percent ad valorem tax on domestic passenger tickets to a 

combination ad valorem/flight segment tax over 3 years. The trust fund 

currently receives the vast majority of its funding from a 7.5 percent 

tax on domestic passenger tickets and a $3 flight segment tax. 

Additional funding is obtained from taxes on aviation fuels, cargo 

waybills, and international departures and arrivals.



The trust fund finances 100 percent of FAA’s capital investment 

programs (Facilities and Equipment; Airport Improvement Program; and 

Research, Engineering, and Development). Within certain limits set by 

Congress, some of the remaining money is used to cover operation and 

maintenance expenses of the FAA. The portion of the FAA’s operation and 

maintenance expenses not paid from the trust fund revenues are financed 

by general funds of the Treasury. While held by the Treasury, trust 

fund monies are invested and interest earned is deposited into the 

trust fund. Amounts are withdrawn from the trust fund as it is needed 

and transferred into each FAA appropriation to cover necessary outlays.



Harbor Maintenance Trust Fund:



The Harbor Maintenance Trust Fund was established in accordance with 

the Harbor Maintenance Revenue Act of 1986 (Pub. L. No. 99-662), as 

amended. Revenues for this fund are derived from receipts from a 0.125 

percent ad valorem user fee imposed on commercial users of specified 

U.S. ports, Saint Lawrence Seaway tolls, and investment interest. On 

March 31, 1998, as per the U.S. Supreme Court ruling, the tax on 

exports was terminated. The tax continues to be levied on passengers 

and imported and domestic cargo.



The Harbor Maintenance Trust Fund is used to finance up to 100 percent 

of the U.S. Army Corps of Engineers’ harbor operation and maintenance 

cost, including the cost associated with Great Lakes navigation 

projects. In addition, the trust fund fully finances the operation and 

maintenance of the Saint Lawrence Seaway Development Corporation. 

Payments from the trust fund are also authorized for the federal share 

of construction costs for dredged material disposal facilities and the 

expenses incurred by agencies related to administration of the harbor 

maintenance tax.



Inland Waterways Trust Fund:



The Inland Waterways Trust Fund was authorized by the Inland Waterways 

Revenue Act of 1978 (Pub. L. No. 95-502), as amended by the Water 

Resources Development Act of 1986 (Pub. L. No. 99-662). The trust fund 

has been in effect since fiscal year 1981. The sources for the fund are 

taxes imposed on fuel for vessels engaged in commercial waterway 

transportation and investment interest. From this tax of 24.3 cents per 

gallon, 4.3 cents goes for deficit reduction and a statutory maximum of 

20 cents goes to the trust fund. The funds are earmarked for financing 

one half of the U.S. Army Corps of Engineers’ construction and 

rehabilitation costs of specified inland waterway projects.



[End of section]



Appendix III: Amounts Expended by Federal Agencies on the Marine, 

Aviation, and Highway Transportation Systems:



Thirteen different federal agencies spent federal funds on the 

commercial marine transportation system. On average, the agencies spent 

over $3.8 billion annually. During the same period, six federal 

agencies spent an average of over $10.3 billion annually on the 

aviation transportation system and five federal agencies spent an 

average of over $25 billion annually on the highway transportation 

system.



Table 8: Expenditures on the Marine, Aviation, and Highway 

Transportation Systems for Fiscal Years 1999 through 2001A:



Dollars in millions.



Marine transportation system: 



Federal agency: Animal, Plant, and Health Inspection Service; USDA; 

1999: $30.5; 1999: $35.7; 2001: $44.1.



Army Corps of Engineers; DOD; 1999: 1,788.6; 1999: 1,845.3; 2001: 

1,888.8.



Federal agency: Centers for Disease Control and Prevention; HHS; 1999: 

1.5; 1999: 1.9; 2001: 1.9.



Federal agency: Coast Guard; DOT; 1999: 1,193.6; 1999: 1,245.4; 2001: 

1,239.4.



Federal agency: Customs Service; Treasury; 1999: 484.2; 1999: 538.4; 

2001: 577.2.



Federal Communications Commission; 1999: [B]; 1999: [B]; 2001: .1.



Federal Maritime Commission; 1999: .2; 1999: .1; 2001: .1.



Federal agency: Grain Inspection, Packers, and Stockyards 

Administration; USDA; 1999: 1.3; 1999: 1.3; 2001: 1.2.



Federal agency: Immigration and Naturalization Service; DOJ; 1999: 

1.2; 1999: 1.5; 2001: 1.6.



Federal agency: Internal Revenue Service; Treasury; 1999: .1; 1999: 

.1; 2001: .1.



Federal agency: Maritime Administration; DOT; 1999: 95.0; 1999: 98.5; 

2001: 98.4.



Federal agency: National Oceanic and Atmospheric Administration; 

Commerce; 1999: 109.4; 1999: 115.7; 2001: 126.7.



Saint Lawrence Seaway Development Corporation; DOT; 1999: 11.2; 1999: 

12.0; 2001: 13.0.



Total marine transportation system; 1999: $3,716.8; 1999: $3,895.9; 

2001: $3,992.6.



Aviation transportation system:



Federal agency: Animal, Plant, and Health Inspection Service; USDA; 

1999: $123.1; 1999: $144.0; 2001: $178.2.



Federal agency: Customs Service; Treasury; 1999: 769.1; 1999: 821.6; 

2001: 861.4.



Federal agency: Federal Aviation Administration; DOT; 1999: 8,055.0; 

1999: 9,043.0; 2001: 9,525.0.



Federal agency: Federal Communications Commission; 1999: b; 1999: 

b; 2001: b.



Federal agency: Immigration and Naturalization Service; DOJ; 1999: 

431.1; 1999: 435.8; 2001: 467.5.



Federal agency: Internal Revenue Service; Treasury; 1999: .6; 1999: 

.7; 2001: .7.



Federal agency: Total aviation transportation system; 1999: $9,378.9; 

1999: $10,445.1; 2001: $11,032.8.



Highway transportation system:



Federal agency: Animal, Plant, and Health Inspection Service; USDA; 

1999: $7.7; 1999: $8.9; 2001: $10.8.



Federal agency: Customs Service; Treasury; 1999: 106.6; 1999: 84.4; 

2001: 130.1.



Federal agency: Federal Highway Administration; DOT; 1999: 22,700.0; 

1999: 25,000.0; 2001: 27,200.0.



Federal agency: Immigration and Naturalization Service; DOJ; 1999: 

1.1; 1999: .1; 2001: 1.5.



Federal agency: Internal Revenue Service; Treasury; 1999: 4.6; 1999: 

4.6; 2001: 4.5.



Federal agency: Total highway transportation system; 1999: $22,820.0; 

1999: $25,098.0; 2001: $27,346.9.



Note: Figures are nominal and have not been adjusted for inflation.



[A] The table does not include expenditures that could not be broken 

out by transportation system. These expenditures amounted to $7.3 

million in fiscal year 1999, $6.3 million in fiscal year 2000, and $6.2 

million in fiscal year 2001. The table also does not include 

expenditures from the Leaking Underground Storage Tank Trust Fund. 

Expenditures from this trust fund amounted to $72.5 million in fiscal 

year 1999, $70 million in fiscal year 2000, and $72.1 million in fiscal 

year 2001. Most of this funding is distributed to states to implement 

their leaking underground storage tank programs.



[B] Less than $50,000.



Source: GAO analysis of data provided by agencies that expended funds.



[End of table]



[End of section]



Appendix IV: Amounts Collected by Federal Agencies on Users of the 

Marine, Aviation, and Highway Systems:



Eleven different federal agencies levy assessments on the users of the 

commercial marine transportation system. On average, the agencies 

collected nearly $1 billion annually. During the same period, five 

federal agencies collected an average of almost $11.1 billion annually 

from users of the aviation transportation system and four federal 

agencies collected an average of almost $33.7 billion annually from 

users of the highway transportation system.



Table 9: Amounts of Assessments Collected on Users of the Marine, 

Aviation, and Highway Transportation Systems for Fiscal Years 1999 

through 2001A:



Dollars in millions.



Marine transportation system:



Federal agency: Animal, Plant, and Health Inspection Service; USDA; 

1999: $34.2; 2000: $46.2; 2001: $50.3.



Federal agency: Centers for Disease Control and Prevention; HHS; 1999:

1.4; 2000: 1.9; 2001: 1.9.



Federal agency: Coast Guard; DOT; 1999: 19.3; 2000: 21.4; 2001: 23.5.



Federal agency: Customs Service; Treasury[C]; 1999: 642.5; 2000: 773.7; 

2001: 812.1.



Federal Communications Commission; 1999: .1; 2000: .1; 2001: .3.



Federal Maritime Commission; 1999: .2; 2000: .1; 2001: .1.



Federal agency: Grain Inspection, Packers, and Stockyards 
Administration; 

USDA; 1999: 1.6; 2000: 1.5; 2001: 1.6.



Federal agency: Immigration and Naturalization Service; DOJ; 1999: 1.2; 

2000: 1.5; 2001: 1.6.



Federal agency: Internal Revenue Service; Treasury[B]; 1999: 105.0; 

2000: 97.3; 2001: 93.5.



Federal agency: Maritime Administration; DOT; 1999: 35.7; 2000: 26.7; 

2001: 24.6.



Federal agency: National Oceanic and Atmospheric Administration; 

Commerce; 1999: 34.1; 2000: 34.7; 2001: 34.5.



Federal agency: Total marine transportation system; 1999: $875.3; 2000: 

$1,005.1; 2001: $1,044.0.



Aviation transportation system:



Federal agency: Animal, Plant, and Health Inspection Service; USDA; 

1999: $138.2; 2000: $186.4; 2001: $203.5.



Federal agency: Customs Service; Treasury[C]; 1999: 231.9; 2000: 251.6; 

2001: 260.1.



Federal agency: Federal Communications Commission; 1999: .1; 2000: .1; 

2001: .1.



Federal agency: Immigration and Naturalization Service; DOJ; 1999: 

421.4; 2000: 436.5; 2001: 465.9.



Federal agency: Internal Revenue Service; Treasury[B]; 1999: 11,528.2; 

2000: 9,677.0; 2001: 9,382.5.



Federal agency: Total aviation transportation system; 1999: $12,319.8; 

2000: $10,551.6; 2001: $10,312.1.



Highway transportation system:



Federal agency: Animal, Plant, and Health Inspection Service; USDA; 

1999: $8.5; 2000: 

11.1; 2001: $12.2.



Federal agency: Customs Service; Treasury[C]; 1999: 21.9; 2000: 22.1; 

2001: 20.4.



Federal agency: Immigration and Naturalization Service; DOJ; 1999: 1.1; 

2000: 1.6; 2001: 2.4.



Federal agency: Internal Revenue Service; Treasury[B]; 1999: 32,248.3; 

2000: 35,125.1; 2001: 33,672.7.



Federal agency: Total highway transportation system.



Note: Figures are nominal and have not been adjusted for inflation.



[A] The table does not include assessments that could not be broken out 

by transportation system. These assessments amounted to $934.9 million 

in fiscal year 1999, $980.9 million in fiscal year 2000, and $959.1 

million in fiscal year 2001.



[B] The IRS collections for the marine transportation system are 

designated for the Inland Waterways Trust Fund. Collections for the 

aviation transportation system are designated for Airport and Airways 

Trust Fund. Collections for the highway transportation system are 

designed for the Highway Account of the Highway Trust Fund.



[C] These amounts exclude customs duties. A portion of the collections 

for the marine transportation system is designated for the Harbor 

Maintenance Trust Fund.



Source: GAO analysis of data provided by agencies that collected the 

assessments.



[End of table]



[End of section]



Appendix V: Amount of Customs Duties Collected for Commodities 

Transported on the Transportation Systems:



Unlike the fees and taxes on users that are earmarked to support the 

transportation systems, customs duties are not an assessment on the 

system; rather, duties are assessed on imported goods transported by 

the systems. The majority of customs duties collected are deposited in 

the U.S. Treasury’s general fund for the general support of federal 

activities.[Footnote 34] On average, the Customs Service reported $19.8 

billion collected annually for commodities imported by the 

transportation modes, with nearly 80 percent collected from the marine 

transportation system.



Table 10: Amount of Customs Duties Collected for Commodities 

Transported on the Marine, Aviation, and Highway Transportation 

Systems, Fiscal Years 1999 through 2001:



Dollars in millions.



Transportation system: Marine; 1999: Amount: $14,310; 2000: Amount: 

$15,624; 2000: Percent: 76; 2001: Amount: $15,637; 2001: Percent: 79; 

Average amount: $15,190.



Transportation system: Aviation; [Empty]; 1999: Amount: 3,577; 1999: 

Percent: 75: 19; 2000: Amount: 4,053; 2000: Percent: 20; 2001: Amount:

3,371; 2001: Percent: 17; Average amount: 3,667.



Transportation system: Highway[A]; 1999: Amount: 1,168; 1999: Percent: 

75: 6; 2000: Amount: 880; 2000: Percent: 4; 2001: Amount: 

735; 2001: Percent: 4; Average amount: 928.



Transportation system: Total custom duties collected; 1999: Amount: 

$19,055; 1999: Percent: 75: [Empty]; 2000: Amount: $20,557; 2000: 

Percent: [Empty]; 2001: Amount: $19,743; 2001: Percent: [Empty]; 

Average amount: $19,785.



Note: Figures are nominal and have not been adjusted for inflation.



[A] Includes amounts collected by rail.



Source: GAO computations based on data provided by the U.S. Customs 

Service.



[End of table]



[End of section]



Appendix VI: The Interagency Committee on the Marine Transportation 

System and the National Advisory Council:



In January 2000, the Secretary of Transportation chartered the 

establishment of the Marine Transportation System National Advisory 

Council (NAC), a nonfederal body, whose purpose is to advise the 

Secretary of Transportation on marine transportation system issues. An 

Interagency Committee on the Marine Transportation System (ICMTS) was 

established by a memorandum of understanding among the Departments of 

Transportation, Defense, Commerce, Interior, Agriculture, Treasury, 

and the Environmental Protection Agency. The charter of the ICMTS is to 

facilitate implementation of the recommendations in the 1999 MTS Report 

to the Congress and to identify, evaluate, develop, and promote 

implementation of federal policies and make recommendations concerning 

resource utilization to ensure effective public funding decisions, 

support services, and management of the marine transportation system.



In May 2001, the NAC recommended that the ICMTS conduct a thorough 

needs-based assessment of each federal and nonfederal component mode of 

the marine transportation system documenting (1) the prerequisites 

necessary to enable the system in its entirety to meet projected 

traffic demands in a manner consistent with the vision statement, (2) 

the impact on nonmarine transportation modes should future 

infrastructure disruption/failure occur at critical points in the 

marine transportation system, and (3) an appraisal of the funding 

required to ensure the transportation system meets the goals of the 

vision statement. ICMTS officials report that the Chamber of Commerce 

currently has an effort under way to compile existing studies on 

infrastructure needs of North American ports. In addition, the ICMTS is 

seeking contract support for a comprehensive analysis assessing the 

future needs and funding of the marine transportation system.



[End of section]



Appendix VII: GAO Contacts and Staff Acknowledgments:



GAO Contacts:



JayEtta Z. Hecker (202) 512-2834

Randall B. Williamson (206) 287-4860:



Acknowledgments:



In addition to those individuals named above, Christine E. Bonham, Jack 

J. Burriesci, Jay R. Cherlow, Thomas E. Collis, David K. Hooper, 

Elizabeth C. McNally, Sara Ann W. Moessbauer, Timmy R. Schindler, 

Albert E. Schmidt, and Stanley G. Stenerson made key contributions to 

this report.



FOOTNOTES



[1] U.S. Department of Transportation, An Assessment of the U.S. Marine 

Transportation System: A Report to Congress (Washington, D.C.: 

September 1999).



[2] Unlike assessments on users of a transportation system, customs 

duties are not related to the use of the transportation system; rather, 

customs duties are taxes on imported goods without regard to their mode 

of transportation. Some customs duties are earmarked for specific 

purposes. Under Section 612 of Title 7 of the United States Code 

(U.S.C.), 30 percent of the gross receipts from customs duties are 

designated for agricultural and food programs. Pursuant to 16 U.S.C 

3912, all duties on guns and ammunitions are credited to the Migratory 

Bird Conservation Fund and pursuant to 26 U.S.C. 9504, duties on 

fishing tackle and yachts and pleasure craft are credited to the Sports 

Fish Restoration Account of the Aquatic Resources Trust Fund. In 

addition, tariffs from wood and certain wood products are credited to 

the Reforestation Trust Fund up to a total of $30 million (16 U.S.C. 

1606a).



[3] For the purposes of this report, collections represent revenues 

obtained from the users of each system. The collections may include 

revenues credited to federal funds, offsetting collections, or 

offsetting revenue. Expenditures are outlays, which represent spending 

made to pay federal obligations. The expenditures may include outlays 

for obligations incurred in the current fiscal year or in previous 

fiscal years.



[4] Assessments on users of transportation systems can be used for the 

general support of federal activities or may be earmarked by law for 

specific purposes and credited to trust funds. Also, some collections 

are credited directly to agency accounts for services provided. 

Expenditures can be made from general fund accounts, trust fund 

accounts, and agency accounts. 



[5] U.S. General Accounting Office, Intercity Passenger Rail: Congress 

Faces Critical Decisions in Developing a National Policy, GAO-02-522T 

(Washington, D.C.: Apr. 11, 2002); U.S. General Accounting Office, U.S. 

Infrastructure: Funding Trends and Opportunities to Improve Investment 

Decisions, GAO/RCED/AIMD-00-35 (Washington, D.C.: Feb. 7, 2000); U.S. 

General Accounting Office, Executive Guide: Leading Practices in 

Capital Decision-Making, GAO/AIMD-99-32 (Washington, D.C.: December 

1998); U.S. General Accounting Office, Federal Budget: Choosing Public 

Investment Programs, GAO/AIMD-93-25 (Washington, D.C.: July 23, 1993); 

and U.S. General Accounting Office, Commercial Aviation: A Framework 

for Considering Federal Financing Assistance, GAO-01-1163T 

(Washington, D.C.: Sept. 20, 2001).



[6] The general fund means the accounts for receipts not earmarked by 

law for a specific purpose, such as taxes, customs duties, 

miscellaneous receipts, the proceeds of general borrowing, and the 

expenditures of these monies.



[7] A federal trust fund is an accounting mechanisms used to link 

earmarked receipts with the expenditures of those receipts. It is 

designated in law as a “trust” fund.



[8] For fiscal years 1999 through 2001, collections for the aviation 

and highway transportation systems generally exceeded expenditures each 

year. Expenditures are made to liquidate current or prior years’ 

obligations. Surplus funds were retained in the trust fund to be 

appropriated in future years. 



[9] U.S. General Accounting Office, Port Security: Nation Faces 

Formidable Challenges in Making New Initiatives Successful, GAO-02-993T 

(Washington, D.C.: Aug. 5, 2002). 



[10] User fees are charged to users for goods or services provided by, 

or activities regulated by the federal government. User fees generally 

apply to activities that provide benefits to identifiable recipients, 

and are normally related to the cost of the goods or services provided. 

They may be paid into the general fund or, under specific statutory 

authority, may be made available to an agency carrying out the 

activity. An example is a fee for entering a national park. User fees 

may also be collected through a tax such as an excise tax. Since these 

collections result from the government’s sovereign powers, the proceeds 

are generally recorded as budget receipts, not as offsetting 

collections. Excise taxes can also be dedicated to specific programs 

and agencies. An example is the federal gasoline tax.



[11] U.S. Department of Transportation, An Assessment of the U.S. 

Marine Transportation System: A Report to Congress (Washington, D.C.: 

September 1999). GAO did not verify the accuracy of the information 

contained in this report.



[12] On April 27, 1999, the President established the Interagency 

Commission on Crime and Security in U.S. Seaports. The Commission 

issued its report on August 28, 2000. GAO did not validate the 

estimates contained in this report. 



[13] Although $93.3 million was made available in the supplemental 

appropriations bill, $1 million was authorized for administrative 

expenses. As of June 17, 2002, 77 grants for 144 port security projects 

were awarded. 



[14] The Transportation Security Administration, the Coast Guard, and 

the Maritime Administration reviewed applications under the Port 

Security Grants Program, which is based on the seaport security 

provisions contained in the Department of Defense and Emergency 

Supplemental Appropriations for Recovery from and Response to Terrorist 

Attacks on the United States Act of 2002 (Pub. L. No. 107-117, H.R. 

Conference Report 107-350).



[15] H.R. 1260 was introduced in the 106th Congress to repeal the 

Harbor Maintenance Tax and return to funding the costs of operating and 

maintaining federal navigation channels from general revenues.



[16] U.S. General Accounting Office, Port Security: Nation Faces 

Formidable Challenges in Making New Initiatives Successful, GAO-02-993T 

(Washington, D.C.: Aug. 5, 2002).



[17] The 13 federal agencies are as follows: the Animal, Plant, and 

Health Inspection Service, Department of Agriculture; U.S. Army Corps 

of Engineers, Department of Defense; Centers for Disease Control and 

Prevention, Department of Health and Human Services; Coast Guard, 

Department of Transportation; Customs Service, Department of Treasury; 

Federal Communication Commission; Federal Maritime Commission; Grain 

Inspection, Packers, and Stockyards Administration, Department of 

Agriculture; Immigration and Naturalization Service, Department of 

Justice; Internal Revenue Service, Department of Treasury; Maritime 

Administration, Department of Transportation; National Oceanic and 

Atmospheric Administration, Department of Commerce; and Saint Lawrence 

Seaway Development Corporation, Department of Transportation.



[18] This amount does not include the U.S. Maritime Administration’s 

Title XI program, which has been established pursuant to Title XI of 

the Merchant Marine Act of 1936, as amended. Under the Title XI 

program, the U.S. Maritime Administration provides credit guarantees by 

the U.S. Government of debt obligations for the financing of vessels 

constructed, reconstructed, or reconditioned in U.S. shipyards. Under 

this same program, credit guarantees are provided to U.S. shipyards for 

the purpose of financing advanced shipbuilding technology and modern 

shipbuilding technology. Since this program is a guarantee program, 

funds for the guaranteed debt obligations are obtained in the private 

sector. During fiscal years 1999, 2000, and 2001, the federal 

government guaranteed loans amounting to $1.8 billion, $886 million, 

and $730 million, respectively.



[19] The 11 federal agencies include the Animal, Plant, and Health 

Inspection Service, Department of Agriculture; Centers for Disease 

Control and Prevention, Department of Health and Human Services; Coast 

Guard, Department of Transportation; Customs Service, Department of 

Treasury; Federal Communications Commission; Federal Maritime 

Commission; Grain Inspection, Packers, and Stockyards Administration, 

Department of Agriculture; Immigration and Naturalization Service, 

Department of Justice; Internal Revenue Service, Department of 

Treasury; Maritime Administration, Department of Transportation; and 

National Oceanic and Atmospheric Administration, Department of 

Commerce.



[20] The six federal agencies involved in expenditures for the aviation 

system are the Animal, Plant, and Health Inspection Service, Department 

of Agriculture; Customs Service, Department of Treasury; Federal 

Aviation Administration, Department of Transportation; Federal 

Communications Commission; Immigration and Naturalization Service, 

Department of Justice; and Internal Revenue Service, Department of 

Treasury.



[21] The five federal agencies involved in expenditures for the highway 

transportation system are the Animal, Plant, and Health Inspection 

Service, Department of Agriculture; Customs Service, Department of 

Treasury; Federal Highway Administration, Department of 

Transportation; Immigration and Naturalization Service, Department of 

Justice; and Internal Revenue Service, Department of Treasury.



[22] The five federal agencies that levy assessments on users of the 

aviation transportation system are the Animal, Plant, and Health 

Inspection Service, Department of Agriculture; Customs Service, 

Department of Treasury; Federal Communications Commission; Immigration 

and Naturalization Service, Department of Justice; and Internal Revenue 

Service, Department of Treasury.



[23] The four federal agencies that levy assessments on users of the 

highway transportation system are the Animal, Plant, and Health 

Inspection Service, Department of Agriculture; Customs Service, 

Department of Treasury; Immigration and Naturalization Service, 

Department of Justice; and Internal Revenue Service, Department of 

Treasury.



[24] Pub. L. No. 103-62.



[25] The 1999 MTS Report identified a number of issues and problems 

facing the maritime transportation system. These included increased 

dredging requirements to accommodate larger container ships, aging and 

limited capacity of lock and dam systems on inland waterways, and 

congestion due to ineffective intermodal connections. In January 2000, 

the Secretary of Transportation chartered the Marine Transportation 

System National Advisory Council to help implement the recommendations 

in the 1999 MTS Report. An interagency committee was also established 

to facilitate implementation of the recommendations in the report. 

Recognizing the need to thoroughly analyze the issues and problems 

facing the maritime transportation, the interagency committee is in the 

process of seeking contract support for a comprehensive analysis 

assessing the future needs and funding of the maritime system. (See 

app. VI.)



[26] U.S. General Accounting Office, U.S. Infrastructure: Funding 

Trends and Federal Agencies’ Investment Estimates, GAO-01-986T 

(Washington, D.C.: July 23, 2001).



[27] At least 13 federal agencies are involved in supporting the marine 

transportation system.



[28] One exception has been intermodal connections, such as rail or 

highway connections. The federal government has traditionally 

participated in funding such projects.



[29] Metropolitan Planning Organizations are organizations responsible 

for adopting transportation improvement programs in accordance with the 

Transportation Equity Act for the 21st Century (TEA-21). 



[30] U.S. General Accounting Office, Federal Budget: Choosing Public 

Investment Programs, GAO/AIMD-93-25 (Washington, D.C.: July 23, 1993).



[31] U.S. General Accounting Office, Port Security: Nation Faces 

Formidable Challenges in Making New Initiatives Successful, GAO-02-993T 

(Washington, D.C.: Aug. 5, 2002).



[32] U.S. General Accounting Office, Executive Guide: Leading Practices 

in Capital Decision-Making, GAO/AIMD-99-32 (Washington, D.C.: December 

1998).



[33] The commercial marine transportation system excludes noncommercial 

activities such as search and rescue, and drug and migrant interdiction 

conducted by the Coast Guard, and recreational activities.



[34] Under Section 612 of Title 7, about 30 percent of the gross 

receipts from customs duties are designated for agricultural and food 

programs. In addition, pursuant to 16 U.S.C. 3912, all duties on guns 

and ammunitions go to the Migratory Bird Conservation Fund and pursuant 

to 26 U.S.C. 9504, duties on fishing tackle and yachts and pleasure 

craft go to the Sports Fish Restoration account of the Aquatic 

Resources Trust Fund. Also, tariffs from wood and certain wood products 

are transferred to the Reforestation Trust Fund up to a total of $30 

million (16 U.S.C. 1606(a)).



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