Federal Highway Funding
Martin Marietta Materials' Aggregates' products are used primarily
for construction of highways and other infrastructure projects and
in the commercial and residential construction industries. Approximately
50 percent of the division's products are used in infrastructure
spending, primarily for expanding and rebuilding the nation's highways.
SAFETEA-LU (The Safe, Accountable, Flexible and Efficient Transportation Equity Act - A Legacy for Users)
Funding for highway and bridge projects comes from a variety of local, state and federal funding sources. The federal highway bill is the principal source of highway funding for public-sector construction projects. In August 2005, a new federal highway bill, The Safe, Accountable, Flexible and Efficient Transportation Equity Act - A Legacy for Users ("SAFETEA-LU"), was signed into law. SAFETEA-LU is a six-year $286.4 billion bill that succeeds The Transportation Equity Act for the 21st Century, which expired by its terms on September 30, 2003. The federal highway program operated under continuing resolutions during the reauthorization process. SAFETEA-LU is effective retroactive to October 1, 2003 and is presently scheduled to expire on September 30, 2009.
SAFETEA-LU includes approximately $228 billion for highway programs, $52 billion for transit programs and $6 billion for highway safety programs. The provisions of the bill include increasing the minimum rate of return for donor states, those that pay more in gasoline taxes than they receive from the highway trust fund. The minimum rate of return will ramp up from the current rate of 90.5 percent to 92.0 percent by 2008. Eight of the Corporation's top ten sales states are donor states for fiscal year 2005.
The federal highway bill provides spending authorizations, which represent maximum amounts. Each year, an appropriation act is passed to establish the amount that can actually be used for particular programs. The annual funding level is generally tied to receipts of highway user taxes, which are placed in the Highway Trust Fund. Once the annual appropriation is passed, the funds are then distributed to each of the states based on formulas (apportionments) or other procedures (allocations). Apportioned and allocated funds are generally required to be spent on specific programs as outlined in the federal legislation. SAFETEA-LU includes a revenue-aligned budget authority provision, which is an annual review and adjustment made to ensure that annual funding is linked to actual and anticipated revenues credited to the Highway Trust Fund. This review will be started in fiscal year 2007.
Further detail and up-to-date information federal
highway funding programs can be found at the American
Road and Transportation Builders Web site and the U.S.
Department of Transportation Federal Highway Administration Web
site.
For a more detailed overview of Materials and background regarding
other information, please see the Corporation's filings with the
Securities and Exchange Commission.
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Funding
