MULTI-STATE INSTITUTIONS FOR IMPLEMENTING IMPROVED FREIGHT MOVEMENT IN THE U.S.
Part II: INSTITUTIONAL OPTIONS FOR MULTI-STATE ACTION
The following eight types of institutions offer potential mechanisms to help strengthen the infrastructure and operations of multi-state freight corridors. Some are state-led while others are led by the federal government. But in either case, success is likely to lie in collaborative enterprises, with the private sector involved as well.
- An interstate compact authority or commission
- Interstate joint services agreements
- Special districts and authorities that operate under the authority of an individual state but may be able to enter into service agreements that cross state lines
- Voluntary coalitions that set their own boundaries with or without government incentives and enabling legislation
- Non-profit corporations and foundations devoted to public interests
- Commercial companies that provide public services
- A federally chartered corporation or government sponsored corporation that operates in the public's interest, but at arms length from the government
- A federal government agency, commission, or project office
Many variations exist within these types of institutions, and prominent examples will be cited. The focus in this part of the paper is on the mechanisms used to establish the institution, what form they may take, and what they are capable of doing.
Interstate compacts among states are provided for in the U.S. Constitution and most states have (or had) commissions on interstate cooperation to deal with them. 8 These compacts are negotiated by the states and then enacted in identical form by each state that desires to be part of the compact. Then Congress must approve the compact before it can go into effect—in most cases. However, if the compact is deemed to have no impact on federal responsibilities, it may go into effect without congressional approval. In rare cases, the federal government is also a party to the compact (which is designated as a federal-interstate compact), and Congress enacts authority for the appropriate federal participation. Since most of the specifics of the compact are subject to the negotiated agreement, the functions and powers vary widely from one instance to another. Some compacts create an organization and a full range of operational functions, while others simply provide agreements about how the states will work together. Examples of such compacts are:
- Port Authority of New York and New Jersey—was established in 1921 by the states of New York and New Jersey. Only the two states are parties to the compact, and the authority's revenues are limited to the proceeds and repayment of revenue bonds sold by the Authority. Thus, the Authority is virtually autonomous and its operations are largely business-like. Its initial task was to overcome the high costs of having most of the port's docking facilities in New York while most of the rail terminals were in New Jersey—thereby increasing the port's competitive position among East Coast ports. But once it got started, the Port Authority expanded its scope of activities to highway bridges and tunnels, a consolidated bus terminal in Manhattan, a containerized marine terminal, arterial highways, rail transit, the region's airports, and the World Trade Center. Its success inspired other multistate organizations. 9
- Great Lakes Commission—was created by an interstate compact enacted by the region's eight U.S. states in 1955, and granted congressional consent in 1968. Associate membership in the Commission was established for two Canadian provinces in 1999. It is a public agency with a mission to promote the orderly, integrated, and comprehensive development, use, and conservation of the water resources of the entire Great Lakes Basin. 10 The Commission's products and services focus on communication and education, information integration and reporting, facilitation and consensus building, and policy coordination and advocacy.
- Washington Metropolitan Area Transportation Authority—is an interstate compact organization that provides bus, rail, and demand-responsive transit services to Washington, DC and portions of Maryland and Virginia. Prior to this organization coming into existence, the metropolitan area had a variety of private bus companies and a special federal agency (the National Capital Transportation Agency) that designed the initial rail transit system and began building it for several years while the interstate compact organization was being formed. 11 The compact organization bought out the private bus companies and integrated them into the new bus-rail transit system. Much of the original capital for constructing the new rail system came from transferred interstate highway funds, which of course cannot be renewed. Even today the compact organization does not have any dedicated tax revenue stream; it is the largest transit system in the nation without such regular, reliable funding. It relies, instead, on fare box revenues (for about 50 percent of its needs), advertising revenues, and annually negotiated contributions from the federal, DC, state, and local governments in its service area. Now, as the original construction and equipment needs repair, renewal, and capacity increases, its financing is not able to keep up with needs. Even significant incentives from Congress have been only partially successful in nudging the region toward a sounder financing arrangement.
- Bi-State Development Compact—between Missouri and Illinois provides interstate transportation links across the Mississippi River in the St. Louis metropolitan area. Its services include light rail and busses.
- Midwest Interstate Passenger Rail Commission—was formed in 2000 by a compact among states extending from Ohio to Nebraska. The Commission's purpose is to advocate improved passenger rail service within the region, link the region to other regions, plan for high-speed passenger rail service, bring together state leaders, and support their state DOTs. The Commission includes state legislators, governors, and their designees. This Commission became one of the earliest applicants for High Sped Rail funding made available by the American Recovery and Reinvestment Act of 2009.
- Susquehanna River Basin Commission—was established in 1970 by the states of Pennsylvania, New York, and Maryland, and by the federal government (which is an active member of the compact, not just a consenting party as is the case with most interstate compacts). 12 The Commission has relatively strong regulatory, coordination, and management powers. The largely rural nature of the basin leads the Commission to focus especially on water quality (mining and farming runoff problems) and flooding. As the largest single source of water flowing into the Chesapeake Bay, it is influenced greatly by the Bay's serious water quality problems.
- Interstate Commission on the Potomac River Basin—was established in 1940 by the states of Maryland, Virginia, West Virginia, and the District of Columbia 13 It is concerned largely with water quality and water supply for the Washington Metropolitan Area. However, it is primarily advisory. It does not have regulatory or management powers like those of the Susquehanna and Delaware River Basin Commissions.
- Delaware River Basin Commission is another federal-interstate compact—like the Susquehanna River Basin Commission. 14 It is older (1961), serves a more highly urbanized population, has similarly strong powers, and an even larger staff than the Susquehanna Commission. Its strongest emphasis is on water supply allocations of the river's water among the major urban areas in the basin.
- Tahoe Regional Planning Agency was created in 1969 when the United States Congress ratified a bi-state compact legislated by the governors and state legislatures of Nevada and California. Lake Tahoe lies along the border between the two states and is renowned for the clarity of its waters. As a result, it is a very popular resort and tourist area. However, the quality of its waters has been declining for many years because of the impact of development, logging, and other human activities. More than 100 years ago, conservationists became concerned about the lake's future and attempted to bring it under federal control as a national forest or a national park. Congress was not receptive because of the extent of private ownership and development already established even that long ago. But the states persisted and Congress ratified the Compact agency. The compact was strengthened in 1980 to give the Agency authority to adopt and enforce environmental quality standards, the first of which went into effect in 1982. The Agency's Governing Body consists of seven members from each state plus a non-voting appointee of the President of the United States. The Governing Body is assisted by a 19-member Advisory Planning Commission made up of technical and scientific experts. Today, federal, state, and local governments regulate growth and development in the region by statute—including run-off from buildings and roads, erosion from recreation facilities, sewage, the use of fertilizers and pesticides, and the management of animal wastes, air quality, and toxic chemicals. Transportation plans come within the agency's purview. In 2008, researchers found that the loss of clarity in the lake had begun to slow.
All states have a law enabling their local governments to cooperate with each other via a negotiated agreement among the cooperating governmental units without having to involve the state legislature. About 30 of the states allow this cooperation to take place with local governments of other states also. 15 In some states, this cooperation may include state agencies in addition to units of local government.
Under these inter-local cooperation laws, thousands of inter-local cooperation agreements have been developed for a wide variety of public activities—including transportation, public works and utilities, police and fire communications, and emergency services. 16 Many of these agreements provide for joint services to be delivered—sometimes by one existing unit of government that agrees to provide the service for all, and sometimes by establishing a separate joint services organization that serves all of its members. Although approximately 98 percent of the actual agreements have been established within a single state, it has been determined by the courts that an inter-local service agreement that spans state boundaries most likely would not require congressional approval since local matters are not addressed by the U.S. Constitution. Model state legislation incorporating best practices from several states is available. 17
- Alameda Corridor—One of the best known transportation improvements using a joint services agreement is the Alameda Corridor freight rail expressway in southern California. Locally-led by the Southern California Association of Governments (the Los Angeles MPO), the cities of Los Angeles and Long Beach, each of their ports, and the Los Angeles County Metropolitan Transportation Authority created the Alameda Corridor Transportation Authority (ACTA) by a joint powers agreement. The ACTA's operating committee includes personnel from the two railroads serving the ports. ACTA bought the most direct rail right-of-way serving the ports, redeveloped it below grade to provide a 20-mile grade-separated high-speed urban rail link that consolidates all rail traffic between the ports and the mainline railways that connect Los Angeles to the rest of the nation. It took about 20 years for the studies, engineering, and construction to break this serious freight bottleneck, which had threatened the viability of the two ports. ACTA uses revenue bonds and dedicated revenue streams that rely on usage fees and container charges to meet 96 percent of its needs.
This form of government, which can be either state or local, is the most numerous in the U.S. 18 It provides great flexibility in conforming tax-area boundaries to service provision boundaries—whether the boundaries are smaller or larger than the boundaries of individual units of general purpose local governments (including counties, municipalities, and townships). This form of government is used for a very large number of services. However, it is provided for by state laws, and has not been used to establish local units that cross state lines. Nevertheless, these units (once they have been created by legislation) appear to be eligible to participate in inter-local agreements, joint-powers agreements, and compacts that do cross state lines—thereby providing a potential for organizing and implementing future local-interstate activities.
- One example of a local-interstate service agreement involves the District of Columbia Water and Sewer Authority. It operates the largest sewage treatment plant in the Washington metropolitan area at which it treats sewage not only from DC but also from 1.6 million customers in Maryland and Virginia suburban communities. Special districts and authorities are commonly used to finance and operate highway, roadway, street lighting, toll-road, bridge, transit, airport, and port facilities and services.
The California High-Speed Rail Authority is an example of a state legislated statewide authority. It was established by the state in 1996 to plan, construct and operate high-speed passenger rail service connecting all the state's major metropolitan areas. It has a nine-member policy board (five appointed by the governor, two by the Senate Rules Committee, and two by the Speaker of the Assembly). Its planning and environmental approvals of an 800-mile system are now complete, and engineering is underway. The state's voters approved a 2008 ballot proposal that provides $9 billion in bond funding to get the system started, and this system appears to be eligible for and likely to receive federal aid. The Authority's financial plan expects approximately 80 percent governmental funding for construction and 20 percent from the private sector. Of the total funding, 46 percent is expected to be federal, 26 percent state, and 8 percent local. Once in full operation, the Authority expects the system to generate more than $1 billion in annual profits and to require no operating subsidies. 19
Common interests tend to pull organizations together into coalitions designed to secure benefits for all even when a formal governmental organization does not cover the entire area. Frequently, the federal government provides incentives for such activities. A common mechanism used to establish such organizations is a grant program and its requirements for forming a coalition in order to become eligible for federal funding. A few examples follow.
Corridor Coalitions: Approximately 20 multi-state transportation corridor coalitions have been formed in various parts of the nation to foster interstate commerce and trade—especially trade with Canada and Mexico. 20 Most of these coalitions originated in the 1990s as a result of the NAFTA treaty, the ISTEA and TEA-21 legislation, and the designation of the National Highway System. Usually state-led, these coalitions bring together the state DOTs, businesses, and other interests to facilitate improvements in multi-state transportation corridors on a system-wide basis. But, like the MPOs (described below), these coalitions usually posses no governmental powers of their own. Instead, they advise and assist other organizations that seek to act in concert with each other. According to a 2001 survey, four of the corridor coalitions were non-profit corporations, and two appeared to be business/trade associations. The other 14 were hosted by some other organization rather than having their own legal structure.
The I-95 Corridor Coalition is a somewhat typical example of the hosted coalitions. It has no legal status and no authority to execute contracts. It was established in 1993 pursuant to the 1991 federal ISTEA surface transportation legislation and its purpose is to assist its members with such activities as ITS deployment, transportation operations, and incident management. This coalition now encompasses all 17 states in the corridor that stretches along the eastern seaboard from Maine to Florida. The Coalition has evolved from an initial membership of state DOTs and FHWA and a focus on highways to encompass, currently, all modes of surface transportation for both people and goods. It operates by consensus and relies on its member agencies and state universities to execute necessary transfers of funds and contracts that provide consultant, research, and staff services. The Coalition's members now include state, local, and regional transportation organizations, toll authorities, transit and rail providers, port authorities, law enforcement organizations, and other entities. And the governing structure now includes an "Executive Board, Steering Committee, and Program Track Committees, in addition to full time professional staff…" 21
Looking at seven case studies of multi-state alliances, a 2001 white paper prepared for FHWA concluded that such coalitions generally go through three phases: (1) building the coalition by bringing together the right people and organizations to set "a series of visions, goals, and objectives and outline a plan to learn more about the issue," (2) arrange funded studies and research, and (3) implement or coordinate implementation of system improvements and operations. 22 The third phase is the hard one for most coalitions because it requires building a strong, authoritative institutional framework and raising enough money for "big ticket" projects. In 2001, when these cases were studied, most had not yet progressed to the third stage. They were still depending on individual coalition members to voluntarily align their own priorities to the coalition's priorities and raise big-ticket funding for them on their own.
- Compatible electronic toll devices across multiple states would not have been placed in use so quickly and seamlessly
- Little information about the potential magnitude of future Latin American trade and its transportation impacts would have been available
- Potential multi-state route locations would not have been developed and justified for funding
- International border transportation studies would not have been prepared
- The benefits of high-speed rail as an alternative to congested airports and roads would not have been studied
The next step, they said, was to convert such studies into committed funding for implementation projects.
Multi-state Commissions: 25 From the mid-1960s to the mid-1980s, two other widespread systems of multi-state regions existed in the U.S. One system enabled voluntary establishment of federal-state river basin commissions, and the other enabled voluntary multi-state economic development commissions. The mechanism for establishing and supporting these commissions was federal legislation authorizing and funding federal grant programs that were available to states whose governors voluntarily took the initiative to join with other governors and a federal co-chair to make plans for the coordinated use of federal funds across their multi-state region. But without a firmer legal foundation—such as an interstate compact—most of these federal-state commissions went out of business in the mid-1980s when the federal money was no longer available.
The main federal-state commission of this type that did survive from these multi-state systems is the Appalachian Regional Commission (ARC). Although originally initiated by the governors, it had been established directly by federal law (not merely enabled) and its federal funding has continued—including funding for ARC's largest program, the Appalachian Highway System. A few others that were not directly legislated by Congress survived on the basis of continued voluntary state initiatives alone—without federal financial assistance. The U.S. Department of Commerce housed the multi-state economic development commissions—and continues to house the ARC.
With respect to multi-state river basin commissions, a nearly nation-wide system of them existed from the mid-1960s until 1981 when the legislatively established U.S. Water Resources Council was abolished. The Council had provided overall guidance and support for the river basin commissions, and its demise left no federal "home" for these multi-state organizations. Where federal-state commissions did not exist—or some other formal organization such as an interstate compact commission or TVA was no longer available—federal interagency committees continue to coordinate federal and state river basin activities today. The joint federal-state river basin commissions that came into being had been established by Presidential executive orders when at least half the governors in the basin joined the effort.
At their peak in 1978, river basin commissions, together with federal interagency committees and TVA, covered almost the whole nation, and multistate economic development commissions covered about three-quarters of the nation.
Pooled-fund and Lead-state Projects: In some instances, for specific projects, state DOTs pool funds with each other—sometimes designating one of the states as the lead in pursuing a specific project, and sometimes cooperatively engaging a consultant, university, or other organization to prepare a multi-state study or take charge of a joint activity of some other kind. These activities take place through various grant agreements, transfers of funds, contracts, and memoranda of understanding (MOUs) that are individually tailored to meet specific needs at specific times and places.
MPOs: Another type of coalition is the network of 384 metropolitan planning organizations (MPOs) developed since the early 1960s to maintain eligibility of metropolitan areas for federal highway and transit funding. 26 Many states enacted legislation of their own to facilitate the creation of regional councils of governments, planning district commissions, or something similar. 27 The MPOs must possess or develop federally specified capabilities for serving the planning functions assigned to them if they wish to maintain eligibility for federal highway and transit aid. But even where a state legislative foundation like this is not available, the federal government accepts MPO charters signed by the local officials of the counties and municipal governments in the area and designed to meet the federal MPO requirements. The state DOT(s)—actually the Governor(s)—having jurisdiction within the metropolitan area must also approve the MPO charter before the federal government can accept it.
The result of this flexibility is that many MPOs 28 are imbedded in regional councils or regional planning commissions; 29 or are part of a city or county government or a joint city-county operation; are independent; or are state agencies. The percentages of MPOs in each category change over the years—usually following each decennial Census of population, but the categories do not change. 30 Most MPOs do not posses governmental powers; they only assist and advise the local and state agencies that they work with. According to the latest information available, 40 MPOs have jurisdictions that cross state boundaries—including (for example) Washington, DC/MD/VA; Kansas City, MO/KS; Saint Louis, MO/IL; Cincinnati, OH/KY/IN; Philadelphia, PA/NJ; Wilmington, DE/MD; Tahoe, CA/NV; Chattanooga, TN/GA; and Memphis, TN/MS. 31
The Association of Metropolitan Planning Organizations (AMPO) represents the nationwide network of MPOs and provides information-sharing and capacity-building services. Those MPOs that are associated with multi-purpose regional councils are also represented nationally by the National Association of Regional Councils (NARC). And in the last several years, a number of states have begun to designate rural/regional transportation planning organizations (RTPOs). The National Association of Development Organizations (NADO) provides national representation and services to these non-metropolitan counterparts to MPOs. AMPO, NARC, and NADO all are non-profit corporations.
State Plan Cross-Acceptance: This is a unique process that has been developed and refined over the past several decades in the State of New Jersey. It is designed to voluntarily align county and municipal development plans and regulations with several types of state policies that spell out clear public purposes and quantifiable performance measures of success. As in other U.S. states, land use is controlled primarily by local government regulations—including zoning, subdivision, utility, and grading ordinances—which cannot be brought within state control under prevailing political conditions.
New Jersey is one of the nation's most highly urbanized states, yet it has several unique natural areas that need protection from urbanization. Three of those areas have been singled out legislatively for special attention by the state—the Meadowlands (near New York City), the Pinelands (more toward the center of the state), and the Highlands (in the northwestern part of the state where much of the fresh water in the state originates). Together, these three large regions needing special protection make up about 40 percent of the state's land area. These large reservations put pressure on the rest of the state to use land as efficiently as possible. So, in addition to the three special conservation areas, the state also has a two-decade old statewide smart growth program that identifies (1) areas for urban growth, (2) areas for limited growth, and (3) areas for conservation.
The statewide planning process, and the planning processes for the three special conservation areas, develop state policies and then seek acceptance by the counties and other local governments that would need to administer their land use regulations consistent with the state policies in order for the state policies to take effect. Each county and municipality is asked to file a cross-acceptance report with the state, including any dissenting reports, hold public hearings, and negotiate differences with the state. The results of the process are reflected in a revised state plan. The State Planning Commission oversees the Smart Growth process, and the Meadowlands Commission (created in 1969), Pinelands Commission (created in 1979), and the Highlands Water Protection and Planning Council (created in 2004) are in charge of the other three areas.
Other state agencies are directed by executive order to coordinate with these plans, and local governments are offered state incentives to accept responsibility for implementation. In the case of the Highlands Council for example, the New Jersey region is part of a four-state federal Highlands region for which $100 million has been appropriated by Congress for land preservation. The state provides planning funds to local governments to help them make adjustments to their local plans and land use regulations. The state also provides counties and municipalities with a legal shield and direct state legal representation in any legal challenges they may face as a result of their water protection actions. Two other financial incentives for local governments to participate are a state Transfer of Development Rights Bank and authorization of local impact fees that may be levied up to $15,000 per lot to help cover local government costs of the program in areas where new development is allowed.
In nearly half the Highlands region (designated by the state legislature for immediate protection), conformance with the regional master plan is mandatory. But in the other half of the region, conformance is voluntary and these federal and state incentives are very important for achieving success.
From time to time, Congress provides special charters for private non-profit corporations that are charged with carrying out public functions. Some provide operational functions that supplement the functions of federal agencies and other governments. A few examples of these special government-established non-profits follow:
- National Fish and Wildlife Foundation—was established as a non-profit, public-interest corporation by a congressional charter enacted in 1984. It is dedicated to the conservation of fish, wildlife and plants, and the ecological habitats on which they depend. Its federal mandate is to help "direct public conservation dollars to the most pressing environmental needs and match these investments with private funds." 32 To accomplish this goal, the Foundation works with "individuals, foundations, government agencies, nonprofits, and corporations…" The Foundation receives no regular federal appropriation, but it does partner with such federal agencies as EPA, NOAA, and the U.S. Fish and Wildlife Service to administer, pool, and leverage many of their program funds in innovative and flexible ways. The Foundation is funded primarily by federal and private grants Some of these grants are for preparation of professional program evaluations of federal programs, and the Foundation makes recommendations to improve federal programs.
- American Red Cross—was founded privately, initially in 1881, by Clara Barton and a circle of her acquaintances. This non-profit organization was chartered by Congress in 1900 and 1905 to serve America's armed services and their families, and to provide national and international disaster relief. It is well known today as administrator of the nation's largest blood bank as well as for disaster relief.
- National Institute of Building Sciences—was chartered by Congress in 1974 as an independent, non-government, non-profit organization designed to balance, blend, and mobilize uniquely authoritative public and private expertise to support the public interest in building science, engineering, construction and technology. 33 Its 21-member Board of Directors includes six appointed by the President of the United States and confirmed by the US Senate, plus 15 elected by the nation's building industries and consumers. The Institute is the nation's authoritative source of innovative solutions for the built environment—including specialized councils on building technologies, environmental matters, seismic safety, multi-hazard mitigation, and facility maintenance and operations. It provides building standards and design guides, educational services and other products and services.
- Transportation Research Board—is part of the National Academy of Sciences, which was chartered by Congress in 1863 to advise the federal government on scientific and technical matters. TRB is the transportation-specific arm of the organization, providing extensive research, publication, committee meeting, conference, and other opportunities to strengthen and support the professional and policy disciplines in all modes of transportation. Most of its activities are supported by federal and state transportation agencies that benefit from TRB's capacity-building services.
Other non-profit corporations that are carrying out national purposes have been established under ordinary state corporation laws. 34 Two examples follow:
- Intelligent Transportation Society of America (ITS America) 35 —is a public-private partnership established in 1991as a not-for-profit membership organization to foster the use of advanced technologies in surface transportation systems. It accomplishes this goal by funding research, development, and deployment of emerging technologies. Most ITS deployment takes place at the state and local levels. ITS America's membership includes over 400 public and private organizations. The Highway Users Federation, AASHTO, FHWA, state and local governments, private sector companies, and others worked closely together to create this new corporation. ITS America works with the U.S. Department of Transportation Joint Program Office (JPO) to establish the national ITS architecture, to help provide public infrastructure upon which private ITS investments can rest, to coordinate standards for achieving public-private interoperability, and to establish a national clearinghouse of ITS information. Through a cooperative agreement, JPO funds much of ITS America's technical committee activities and other specific projects.
- North American Electric Reliability Corporation 36 —is a non-profit, non-governmental corporation incorporated in New Jersey and granted legal authority by the U.S. Federal Energy Regulatory Commission to enforce mandatory reliability standards with all U.S. users, owners, and operators of the bulk electric power transmission system. It is similarly empowered in portions of Canada.
Freight is moved in the U.S. mostly by private companies. Trucking, railroad, and barge companies predominate, but overnight delivery companies and air freight companies are gaining increasing shares of this business. The main exception to private companies in the freight business is the short-line railroad sector that is now supported by state and local governments to preserve freight and/or passenger rail services deemed essential in areas where they are no longer commercially viable. Because the private sector plays such a predominant role in freight movement, improvements to freight services required by public policies may need to be planned, funded, and implemented in cooperation with private companies.
The intermingling of public and private fortunes is not unique to freight transportation. For example, most electric power transmission companies are also private, but have recently been brought under national regulation for multistate network reliability purposes, and to ensure that the electric power grid connects with and transmits the electrical current generated by all public and private sources. The largest share of electric power is generated by private utility companies that are regulated by the states.
From time to time, the Congress charters government owned and operated corporations to perform government functions in a business-like manner. Rather than being part of the administrative hierarchy of the government, these units generally operate under the guidance and control of a separate federally structured board of directors, but remain accountable to the Congress and often receive a subsidy. Congress also charters government sponsored enterprises (GSEs) that provide financial services to the public under the guidance and control of an independent private sector board of directors that enjoys implied support from the government but no explicit government guarantee. The financial operations of GSEs generally are assumed to be self-sustaining. Some examples of these two types of government-sponsored money-making corporations follow:
- Tennessee Valley Authority (David E. Lilienthal, Democracy on the March 37 —is a federally owned corporation enacted by Congress in 1933 to develop the resources of the 650-mile Tennessee River valley, which extends from the Great Smoky Mountains in North Carolina to the Mississippi River, and to put the river to work for the people of the region. During the Great Depression, the region's people were among the poorest in the nation. TVA operated as a comprehensive regional development organization under an independent Board of Directors reporting to Congress and funded as a single unit to make regional decisions in the region for the betterment of the region as a whole. It worked with the state and local governments of the region, businesses, and all the other federal agencies that were playing roles in the region. TVA-led programs built dams, waterways, hydropower and other electrical generating plants, improved farming, produced fertilizers and promoted their use throughout the region, developed recreational resources, and accomplished much more. As an independent agency, it was able to plan and invest federal funds on a coordinated basis—and then integrate the activities of the other development partners into the effort without being limited by the independent and disparate planning, funding, and decision process of each partner acting separately. Many of the Authority's operations generate revenues to help offset federal investments and operating expenses. Under this process, the people prospered and the region became a major industrial contributor to the nation's success in World War II. The Authority continues to operate today as a unique resource to the region.
- St. Lawrence Seaway Authority 38 —was a non-profit government corporation having both Canadian and U.S. counterparts. Renamed the Saint Lawrence Seaway Management Corporation and commercialized in 1998, the mission of these two corporations is to construct and operate the locks on the Saint Lawrence Seaway, which is the longest inland waterway in the world. The Canadian Corporation is responsible for 13 of the 15 locks, while the U.S. Corporation handles the other two locks.
- National Railroad Passenger Corporation 39 —was established by Congress in 1971 to supervise and help fund the nation's faltering private rail passenger services using federal dollars. In 1981, Congress asked the Corporation to reduce the use of Federal support dollars, and in 1983 Amtrak became the owner of the passenger rail services, employing the crews and centralizing the reservations system. Over succeeding years, Amtrak has upgraded the system's rails, equipment, and services, but continues to need federal financial assistance to maintain established services.
- United States Railway Association—was enacted by Congress and signed into law on February 1, 1974 to be incorporated as a non-profit corporation in the District of Columbia. Its purpose was to find a solution to the seemingly intractable problem of bankruptcy among almost all of the private railroads in the northeastern portion of the nation. The problem had been brewing for several years and DOT, the ICC and the bankruptcy courts seemed to have no solution other than to let the railroads be liquidated—which would have been an unthinkable disaster for the nation. USRA was guided by an 11-member board of directors appointed by the President, with consent of the Senate, but only three were federal officials. The rest, including the Chairperson, were from the private sector chosen to represent the affected parties. The hope was that a private sector solution could be found, and Congress imposed strict deadlines for completing this very complex and difficult work. The saga that ensued was documented in detail by the National Academy of Public Administration 40 It resulted in establishing Conrail as a consolidation of eight bankrupt private railroads, and rebuilding the physical system (which had been allowed to degenerate over the long process of financial difficulties). Although the USRA was a temporary organization, and the deadlines for its work were ambitious, it took over two years to devise this solution and put it into operation through a private corporation set up by USRA to receive the transferred assets from the bankrupt railroads. It took Conrail another ten years—using former leadership from USRA, deregulation, and billions of federal dollars to restructure, downsize, and upgrade the inherited assets and services to profitability sufficient to re-privatize it as a for-profit corporation. In 1987, Morgan Stanley took Conrail through the largest initial public offering in Wall Street history up to that time ($1.65 billion) 41 In the ten years following this IPO, Conrail became so profitable that it was bought out by two other private railroads, and the federal government got out of the freight rail business entirely.
- Metropolitan Washington Airports Authority—was established by Congress in 1987 to take over management of Reagan National and Dulles International Airports from the Federal Aviation Administration. It is a federal corporation governed by a 13-member Board of Directors having five members appointed by the Governor of Virginia (where both airports are located), three by the Mayor of the District of Columbia, two by the Governor of Maryland, and three by the President of the United States. The Authority also owns the Dulles Airport Access Road, and is now building the new Metrorail Silver Line from East Falls Church, VA to Dulles Airport.
- United States Postal Service—became a government corporation by act of Congress in 1971 to replace the former U.S. Post Office Department, which had been a government agency from the time the U.S. government was formed. The idea was to put this commercial-type service on a more businesslike basis, reduce government subsidies, and allow the new corporation to compete with other private parcel delivery companies that were becoming major competitors for the same type of business. An independent federal Postal Rate Commission was established at the same time to update postal rates as necessary within the competitive business marketplace.
- Corporation for Public Broadcasting—was established by Congress in 1968 to facilitate the full development of public telecommunications systems and programming by providing grants to support public-interest radio and television broadcasting. As an independent corporation, PBS is insulated from politics and from commercial markets, and is expected to provide greater choice in broadcast media offerings than commercial broadcasting might offer on its own.
- Legal Services Corporation—was established by Congress in 1974 to provide financial support for legal assistance in non-criminal matters for people who are too poor to pay for adequate legal representation themselves.
- Government National Mortgage Association—is a government corporation that operates within the U.S. Department of Housing and Urban Development to facilitate private funding of home mortgages by providing government guarantees of mortgage-backed securities that are traded in private money markets. Its operations may be subsidized as necessary.
- Federal Home Loan Bank System—was established by Congress in 1932 to make loans to private financial institutions that fund mortgages. This system is established as a privately owned instrumentality of government that is sponsored (but not guaranteed) by the government. Because of the nature of this implicit, rather than explicit, guarantee, these private enterprises are referred to as government sponsored enterprises (GSE). The Farm Credit System, established in 1916, was the first GSE in the U.S., but several others have been established more recently as public interests in the lending markets have multiplied. Three of the more recent ones are mentioned below.
- Fannie Mae and Freddie Mac—are GSEs that were established by Congress in 1968 and 1970, respectively, to provide secondary markets for home mortgages. They both operated at a profit until very recently (when the mortgage bubble burst). Their revenues come from fees they charge lenders for buying the mortgages already written, thereby making additional private capital available to create more mortgages. Both of these GSEs package the mortgages they buy into bundled securities they sell on the open money markets. Formerly thought to be extremely safe investments, the declining quality of mortgage lending in recent years demonstrated that to be a risky assumption. The recent federal bailouts of these two giant GSEs was not anticipated.
- Sallie Mae—is a GSE established by Congress in 1972 to provide a secondary market for student loans very much like the market for mortgages described above.
These individual units of the federal government generally are established by congressional legislation, which provides purposes, responsibilities, powers, some degree of organizational structure, and means of financing. In the case of project offices, the unit may be created by executive action under the authority of previous legislation that provides broader authority. The officials of these units are federal employees or appointees. High level appointees generally are confirmed by the U.S. Senate. The actions of these units are actions of the federal government, not limited by state boundaries unless so stated in the legislation—as, for example, is the case with the Bureau of Reclamation being limited to operating in 17 Western states. Beyond these general characteristics, there are many variations—depending upon the specifics of the legislation. Some examples include (a preliminary list of not necessarily current offices):
- Office of High Speed Ground Transportation—was established by law on September 30, 1965. It focused initially on the Northeast Corridor, but it also sponsored major studies of new technologies in the 1960s. Its first visible result was the new Metroliner service, which began in 1968 on the Pennsylvania Railroad and was later incorporated into Amtrak. Subsequently this service was augmented by the somewhat higher speed Acela Service. High-speed rail proposals continue to be pursued in many corridors by states and private interests, and received encouragement by the 2009 Recovery Act. But a March 2009 GAO review of the current status of high speed rail policy in the U.S. concluded that it lacked a coherent vision and suffered from very limited federal involvement. 42 However, the recently enacted Passenger Rail Investment and Improvement Act of 2008 may increase the federal role in developing high speed rail. In response to that legislation and the American Recovery and Reinvestment Act of 2009, the Federal Railroad Administration issued a new High-Speed Rail Strategic Plan, Vision for High-Speed Rail in America on April 16, 2009. 43 This plan envisions a national network of high-speed passenger rail services to connect U.S. communities located in 100-600 mile high-population corridors, and it identifies ten such corridors as a starting point. Organizationally, the plan envisions a public-private partnership and a long-term commitment from both the federal government and the states. To the extent that this new passenger service will use existing tracks, it will need to be integrated into existing systems for both lower-speed passenger service and freight services. 44
- Interstate Commerce Commission 45 —was established by the Interstate Commerce Act of 1887. Its original purpose was to regulate railroads (and later trucking) to ensure fair rates, eliminate rate discrimination, and regulate other aspects of common carriers. It operated independently as a five-member Commission. But, as a result of deregulation in the 1980s and 1990s, it lost many of its functions and was abolished in 1995. Its remaining powers were turned over to the multi-member Surface Transportation Board, 46 which is an agency administratively lodged within the U.S. Department of Transportation. However, STB makes its adjudicatory and regulatory decisions independently. It has jurisdiction over such economic matters as railroad rates and services, rail company restructuring, some trucking and ocean shipping matters, intercity passenger bus companies, and rates and services of pipeline companies not under the jurisdiction of the Federal Energy Regulatory Commission.
- Bonneville Power Administration—was established in 1937 to administer the hydropower to be generated by the new federal Bonneville and Grand Coulee dams about to come on line (1938 and 1941, respectively). BPA is now an agency of the U.S. Department of Energy. Its service area includes all of the states of Washington, Oregon and Idaho, as well as portions of California, Montana, Nevada, Utah, and Wyoming. It provides power transmission and wholesaling of the power, leaving retail distribution to local utilities. Its sales cover its costs; it receives no tax revenues or appropriations. As a sideline, BPA is heavily involved with numerous fish, wildlife and environmental issues.
- Bureau of Reclamation—is an agency of the U.S. Department of the Interior. It was established in 1902 to develop and manage dams, power plants, and canals in the 17 western states. It manages the Colorado River Basin, and the rivers of the Pacific Northwest, California, and Nevada for multiple purposes—including irrigation.
- U.S. Army Corps of Engineers, Civil Works Division—is also a major water management agency, as well as a major transportation agency. The Corps manages many of the rivers not under the jurisdiction of the Bureau of Reclamation, has flood control responsibilities nationwide, and provides inland and inter-coastal waterway services in many parts of the nation. Its waterways program is funded largely by a user-based waterways trust fund similar to the highway trust fund.
- Mississippi River Commission—The Mississippi River is the nation's largest and most important river, stretching from headwaters in Minnesota to the river's delta below New Orleans. It is the main stem of much of the nation's commerce, and drains 40 percent of all the nation's land. But at the same time, it presents colossal flood problems. The Corps of Engineers has been involved with the Mississippi since the opening of the West. In 1879, Congress created a strong independent Mississippi River Commission to take the lead in navigation and flood control programs along the full length of the river. It worked with the Corps, but set up a duplicate set of well staffed offices. However, its controversial levees-only approach to flood control was severely challenged by extensive flooding in 1927, and a thorough reevaluation began. The Corps and the Commission developed competing plans for future flood control strategies, and the Corps' less costly plan won approval. The separate offices of the two organizations were merged under the control of the Corps, and the Commission's role was cut back to focus on the lower portion of the river. However, the Commission’s roles in pursuing annual listening tours and providing input to the development of annual spending programs for the lower Mississippi and its tributaries were retained. To preserve the integrated nature of this spending plan, it is presented as a single budget item (the MR&T request). And the MR&T portion of the Corps budget is still enacted as a single amount rather than as a list of separate projects like the rest of the Corps budget. 47
- Appalachian Regional Commission 48 —was established directly by Congress in 1965—separate from the general authorization of multi-state economic development commissions. Its members—as spelled out directly in the federal statute—are the governors of the 13 states in which this mountain range resides, plus a federal co-chair. The governors rotate through the state co-chair position. The staff is housed within the U.S. Department of Commerce. The Commission's strategic plan sets the following four goals: (1) Increase job opportunities and per capita income in Appalachia to reach parity with the nation; (2) Strengthen the capacity of the people of Appalachia to compete in the global economy; (3) Develop and improve Appalachia's infrastructure to make the Region economically competitive; and (4) Build the Appalachian Development Highway System to reduce Appalachia's isolation by connecting Appalachia to the Interstate Highway System and providing access to areas within the Region and to markets in the rest of the nation. Over 86 percent of the system's authorized 2,672 miles have been completed.
- EPA Chesapeake Bay Program Office 49 —was established by Congress in 1983. It is located in Annapolis, Maryland on the Bay, and it serves as the staff of the Chesapeake Executive Council. The Council is a collaborative body established by an agreement signed by the governors of Maryland, Virginia, and Pennsylvania, the Mayor of the District of Columbia, the Administrator of EPA, and the Chair of the Chesapeake Bay Commission—which is an organization of the state legislatures of the states. The signatories are the members of the Council, but the Governors of Delaware, West Virginia, and New York have been added in recent years as associate members. In addition to EPA's Chesapeake Bay Office, the Council is served by several advisory, technical, and implementation committees, and is assisted by the efforts of 22 other federal agencies. The whole operation is strongly science-based, regulatory driven by pollution control laws, and increasingly performance oriented. Nevertheless, it faces significant challenges in meeting the Council's agreed to and court mandated clean-up goals.
8 U.S. ACIR, The Challenge of Local Governmental Reorganization, Report A-44 (U.S. Government Printing Office, February 1974), p. 169.
9 Jameson W. Doig, Empire on the Hudson: Entrepreneurial Vision and Political Power at the Port of New York Authority (New York: Columbia University Press, 2001).
11 National Capital Transportation Agency, Recommendations for Transportation in the National Capital Region: Finance and Organization (Washington, DC: U.S. Government Printing Office, November 1, 1962).
12 Douglas S. Kenney, "Inventory of Major Coordination Mechanisms for the Control of Interstate Water Resources," a paper prepared under the supervision of the U.S. Advisory Commission on Intergovernmental Relations for the U.S. Army Corps of Engineers, January 1995, pp. 60-68.
13 Ibid., pp 40-47.
14 Ibid., p. 61.
15 ACIR State Legislative Program, Report M-93., p. 32-33.
16 U.S. ACIR, Intergovernmental Service Arrangements for Delivering Local Public Services: Update 1983 (Washington, DC: October 1985).
17 U.S. ACIR, ACIR State Legislative Program: Local Government Modernization, Report M-93 (Washington, D.C.: U.S. Government Printing Office, November 1975), pp. 88-96.
18 U.S. Bureau of the Census, Census of Governments: 2002 (Washington, DC: July 2002).
20 Clement Thomas, "North American Trade Corridors: A Survey of Current Endeavors," Transportation Canada, circa 2001.
21 Wilber Smith Associates, "Challenges with Multi-State/Jurisdictional Transportation Issues," for FHWA, Office of Freight Management and Operations, Office of Intermodal and Statewide Programs, May 2001, p. E-2.
22 Ibid., pp. E-10, E-11, and E-12.
23 FHWA, TRB, and AASHTO, "Conference Proceedings: National Forum on Challenges with Multi-State/Jurisdictional Transportation Issues," June 18-19, 2001, Crystal City (Arlington, VA)
24 Ibid, p. E-9
25 For greater detail, see also: U.S. Advisory Commission on Intergovernmental Relations, Multistate Regionalism, Report A-39 (Washington, DC: U.S. Government Printing Office, 2nd printing, 1978)
26 These 6 coalitions are "voluntary" in the legal sense (confirmed by the U.S. Supreme Court) that the federal "requirement"for them is simply a condition of federal aid and the state and local governments are free to refuse the aid and avoid the conditions that are attached.
27 Approximately 600 of these organizations exist.
28 U.S. ACIR, MPO Capacity, Report A-130 (Washington, DC: May 1995), p. 35
29 Most regional councils are established by state law or by local governments acting in accordance with state enabling legislation. However, at least one is a non-profit corporation.
30 A new study of MPO structures is being conducted now by the Center for Urban Transportation Research at the University of South Florida.
31 Katherine F. Turnbull, Multi-State Metropolitan Planning Organizations: Approaches, Cases, and Institutional Arrangements, National Cooperative Highway Research Program, Project 08-36, Task 44 (Washington, DC: Transportation Research Board, October 2006.
32 http://www.nfwf.org/AM/PrinterTemplate.cfm?Section=Who_We_Are, accessed 3/9/2009).
34 An exploration of the public policy roles of these private corporations may be found in: H.J. Bryce, Players in the Public Policy Process: Nonprofits as Social Capital and Agents (New York: Palgrave Macmillan, 2005).
37 Chicago: Quadrangle Paperbacks. 1953
40 John E. Harr, The Great Railroad Crisis: An Administrative History of the United States Railway Association (Washington, DC: National Academy of Public Administration, March 1978).
41 Phillip Longman, "Washington's Turnaround Artists," The Washington Monthly, March/April 2009.
42 Government Accountability Office, High Speed Passenger Rail: Furtue Development will Depend on Addressing Financial and Other Challenges and Establishing a Clear Federal Role (Washington. DC: March 2009).
43 Federal Railroad Administration, Vision for High-Speed Rail in America, April 2009.
44 Ibid., p. 8.
45 http://en.wikipedia.org/wiki/Interstate_Commerce_Commission, accessed 4-15-2009
47 For more information about the MRC and the MR&T program see: National Academy of Public Administration, Prioritizing America's Water Resources Investments: Budget Reform for Civil Works Construction Projects at the U.S. Army Corps of Engineers (Washington, DC: the Academy, February 2007), Appendix E, pp. E-19 through E-26.
49 National Academy of Public Administration, Taking Environmental Protection to the Next Level: An Assessment of the U.S. Environmental Services Delivery System (Washington, DC: April 2007