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American Shipper

DOT starts new freight program

FASTLane provides $800 million in new freight transportation infrastructure grants.

   The U.S. Department of Transportation on Feb. 26 announced a funding opportunity for $800 million in new freight transportation infrastructure grants.

   A few days earlier the DOT made available $500 million for the eighth round of the competitive TIGER grant program.

   They are the latest examples of how freight transportation is being taken more seriously at the federal and state levels. The DOT forecasts freight demand will increase 45 percent over the next 30 years. Until recently, most states had few incentives to divert money to freight projects from highway construction primarily designed for passenger car travel. Freight projects also have trouble attracting funds because they often cross jurisdictional lines, can include private investors and sometimes have negative impacts on communities.

   Policymakers say it’s critical for economic growth to make sure there is adequate infrastructure to handle more trucks and passenger traffic without congestion.

   “Our nation needs a strong multimodal freight system to both compete in the global economy and meet the needs of consumers and industry,” Transportation Secretary Anthony Foxx said in a statement. “We now have an opportunity to fund high-impact projects that address key challenges affecting the movement of people and freight.”

   The request for FASTLane (Fostering Advancements in Shipping and Transportation for the Long-term Achievement of National Efficiencies) applications is one of the early results of the Fixing America’s Surface Transportation (FAST) Act, which was enacted in December and established a $4.5 billion discretionary grant program over five years for large multi-modal projects. Congress earmarked $500 million of the total for non-highway mode improvements.

   The DOT is primarily looking for transformative nationally or regionally significant highway, rail, port, and inter-modal freight projects in excess of $100 million.

   The FASTLane grant program resembles the Projects of National and Regional Significance that was created in the 2005 SAFETEA-LU law, under which projects were awarded through congressional earmarks. Congressional leaders have banned earmarks in recent years, making it more difficult for lawmakers to reach consensus on funding levels. The PNRS program was reauthorized in the 2012 MAP-21 reauthorization, but it was subject to the appropriations process and never received any funding.

   FAST also authorizes $6.3 billion in formula grants for states to upgrade highways that carry large amounts of freight. Eligible activities include construction, operational improvements, freight planning and performance management. A maximum of 10 percent of a state’s freight funds can be used for public or private freight rail or water facilities, including ports and inter-modal facilities.

   The two programs represent the first time that Congress has set up dedicated funding specifically to aid in goods movement.

   And FAST establishes freight policy goals, requires the DOT to come up with a National Freight Strategic Plan and requires states to have freight plans of their own to access the formula-based National Highway Freight Program.

   “The focus within the department on freight is not new, but the resources and mandate that Congress gave us in this area is unprecedented,” Carlos Monje, acting undersecretary for transportation policy, said at a DOT Freight Summit on Feb. 29. “FAST is really a down payment for building a 21st century transportation network,” he added.

   Applications for FASTLane are due April 14. States, local agencies, special-purpose districts, public authorities and other entities—alone or in partnerships—are eligible for grants.

   Implementation of FAST was the dominant topic at the American Association of State Highway and Transportation Officials’ annual legislative conference in Washington.

   The $305 billion legislation also increased highway funding by 15 percent over 2015 fiscal year levels, ensured that no state receives less than 95 cents in return for every dollar contributed to the Highway Trust Fund from fuel taxes, fully funded the bridge replacement program, streamlined several DOT agencies and gave states the option to use their own environmental regulations for project review rather than Environmental Protection Agency ones.

   But its main accomplishment, according to several of the AASHTO event speakers, was that it ended a decade of temporary funding measures at preexisting levels that left state transportation departments without the certainty to continue major projects and, in some cases, to even plan basic maintenance.

   More fuel-efficient cars and inflation have led to a declining balance in the Highway Trust Fund, forcing Congress to bail out the system with more than $60 billion from the general fund since 2009. Disagreement over how to make up the difference between revenues and growing obligations to states trying to modernize deteriorating highways and bridges, prevented passage of a long-term bill until late last year. Congress, which hasn’t raised the per-gallon fuel tax since 1993, did not settle on a sustainable new revenue source. Instead it took the controversial tack of carving out $70 billion from other parts of the budget and directing the money to the Highway Trust Fund.

   The short-term extensions are anathema to transportation planners at the state level. Federal highway aid reimburses states for completed construction work and states are reluctant to bid new projects when they are not sure of receiving timely payments for the federal share of highway expenses.

   Arkansas, for example, had 113 projects that were threatened to be canceled and Tennessee was able to move ahead with 12 projects that could have been stalled without a long-term surface transportation bill.

   Sen. Barbara Boxer, D-Calif., the ranking member on the Environment and Public Works Committee, likened short-term extensions to banks offering six-month mortgages.

   “You’re not going to buy the house” under those circumstances, she said.

   Simply extending expired legislation wastes about 30 percent of the spending capacity, Committee Chairman Jim Inhofe said.

   He urged lawmakers to start preparing now for the next reauthorization bill and avoid short-term extensions.

   All revenue sources need to be considered, including a fuel-tax increase and tolling, but the idea gaining the most interest seems to be taxing vehicles based on miles traveled, Rep. Sam Graves, R-Mo., chairman of the House Transportation and Infrastructure subcommittee on highways and transit, said.

   FAST included money for additional research into a vehicle-miles-traveled (VMT) system, which still must overcome technical hurdles and opposition from privacy advocates worried about the government tracking individual movements by GPS. Those concerns could result in a program that only captures one’s odometer reading, Graves said. Others say that would eliminate the ability of transportation managers to apply congestion pricing as an incentive for motorists and commercial drivers to use certain highways at non-peak periods.

   The dedicated freight programs are a welcome development, but “we hope that money flows to where it’s really needed, like for chronic bottlenecks, last-mile connectors and technology, and that we don’t just peanut-butter it across” all potential uses, Jeff Paniati, executive director of the Institute of Transportation Engineers, said.

   Pete Ruane, president of the American Road and Transportation Builders Association, said the private sector and states need to do a better job explaining how transportation investments have a positive impact on the economy and quality of life, or risk having small government budget hawks kill federal involvement in infrastructure and kick the programs to the states.

   “We don’t go back and measure the benefits and changes brought about by these investments. It’s an investment. It’s not a cost, not an expense,” he said.

   States and business groups should hire outside parties who can routinely analyze and report on the public benefits of transportation to grow support for user fees and other revenues, Ruane insisted.

   DOT Deputy Secretary Victor Mendez pointed out that the department has organized seven, cross-agency teams to address FAST implementation in the following areas:

   • Freight policy.
   • Discretionary grants. 
   • Innovation, technology and research.
   • Safety.
   • Project delivery.
   • Innovative finance.
   • Ladders of Opportunity (the DOT’s goal of creating jobs through infrastructure building for small and disadvantaged businesses; connecting Americans to jobs, education, healthcare and other services through multi-modal transportation; and creating walk-able communities through transit and other transportation development).
   The DOT is also building up a bureau—the Building America Transportation Investment Center—to make it easier for public-private partnership sponsors to access transportation credit programs by unifying them, providing technical assistance and streamlining the permit process. FAST included substantial funding increases and procedural changes for the Transportation Infrastructure Finance and Innovation Act credit program and the Railroad Rehabilitation and Improvement Financing program.

   The fiscal year 2016 TIGER grants will fund capital investments in multi-modal and multi-jurisdictional surface transportation infrastructure. Since 2009, TIGER has provided nearly $4.6 billion to 381 projects across the nation. Demand for the grants—$134 billion—has outweighed available funding.

   TIGER doesn’t enjoy statutory authority any longer and has continued since its inception under the Recovery Act at the discretion of congressional appropriators.

   TIGER applications for this latest round of grants are due April 29.

   Until the FAST Act, TIGER was one of the only options for multi-modal funding in the federal transportation budget, because the lion’s share of the $50 billion in surface transportation funding comes through the Highway Trust Fund (plus some appropriations) and is disbursed by formula to states, which typically decide to spend the money on highway improvements.

   Meanwhile, the DOT in October released its draft National Freight Strategic Plan (https://transportation.gov/freight//NFSP), as required under the previous MAP-21 transportation bill, and is now conducting listening sessions around the country to gather feedback on the final version of the plan and where to make targeted investments in freight transportation.

   FAST also instructs the DOT to build on MAP-21 and designate a National Highway Freight Network. The DOT complied with the previous law and in October identified the 27,000 miles of highway on which the majority of truck traffic moves. But the highway-only designation failed to recognize that freight utilizes a complex multi-modal system. The DOT plans, by the end of August, to designate a multi-modal freight network that will include Class I railroads, ports with total trade of 2 million short tons, inland and intracoastal waterways, and the 50 airports with the highest landed cargo weight, Monje said. 

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