Senate committee approves six-year surface transport bill

The legislation is unlikely to advance to the full Senate for a vote because there is no consensus on how to fund the financial shortfall in the Highway Trust Fund.    The Senate Environment and Public Works Committee on Wednesday passed a six-year, $278 billion surface transportation reauthorization bill that would create a new investment program aimed at freight infrastructure. 
   The Developing a Reliable and Innovative Vision for the Economy Act, or DRIVE Act, calls for about $13.3 billion to be dedicated to the national freight program to help states improve freight mobility on the national highway network, with $2.2 billion available each year through a competitive grant process.
  The DRIVE Act would replace the short, two-year MAP-21 funding authorization for transportation that expired last September, but just like a bill that cleared the EPW Committee last year, it is not expected to advance through Congress anytime soon because of budget politics. 
   The more immediate concern is the solvency of the Highway Trust Fund, which begins to go into the red in July or August without action by Congress. Lawmakers last fall passed a nine-month extension to maintain spending levels and pumped $11 million into the Highway Trust Fund through a series of accounting measures and transfers from the General Fund. Another two-month extension expires on July 31.
   Lawmakers are divided on how to come up with more revenue to fully fund highway infrastructure upkeep and improvements, with many opposed to raising motor fuels taxes and insisting that any new revenue be deficit neutral. And the House Transportation and Infrastructure Committee, preoccupied with passenger rail and aviation bills, has not yet drafted surface transportation legislation of its own.
   The Highway Trust Fund has a projected $60 billion shortfall over the next four years because users fees, collected through gas and diesel taxes and truck excise taxes, are not keeping up with inflation and higher fuel economy of vehicles. The motor fuel taxes are assessed on a per gallon basis and have not been adjusted since 1993.
   A six-year bill has a projected $90 billion shortfall, according to the Congressional Budget Office.
   The government only receives about $40 billion a year from taxes and user fees, but is spending more than $51 billion a year on surface transport programs, including federal highway aid to states.
   According to the Department of Transportation, there is an $808 billion backlog of investment needs on highways and bridges, including $479 billion in critical repair work.
   President Obama’s GROW America proposal is for a six-year, $478 billion transportation package, with a one-time windfall of funding anticipated from possible tax reform that would encourage corporations to bring home foreign earnings in exchange for being taxed at a lower rate. The plan includes $18 billion to be placed in a fund for regional freight transportation projects in areas where congestion is worst.
   The Highway Trust Fund is not scheduled to run out of money until August, but the legal authority to allocate new money expires July 31.
   Some states have already put the brakes on new projects out of concern that the Department of Transportation later this summer will be no longer be able to fully reimburse them or, at the very least, that those DOT payments will be late.
   Most experts say Congress will pass another short-term extension to buy time until a long-term can be developed, but next year is a presidential election year and few believe any substantive proposal that involves taxes or spending more money will be addressed as lawmakers focus on getting re-elected.
   The DRIVE Act would authorize about $43 billion a year, or $258 billion over six years, for the federal highway program, which provides aid to states under a set formula.
   The dedicated freight fund in the bill differs from pieces of legislation introduced in the House in that it wouldn’t involve any new revenue streams, but simply would carve out money for freight from the overall highway funding program, according to Chris Smith, senior program manager for freight at the American Association of State Highway and Transportation Officials. 
   Rep. Alan Lowenthal, D-Calif., wants to raise $8 billion for a dedicated freight infrastructure fund by invoking a 1 percent fee on the cargo waybill, while Rep. Janice Hahn, D-Calif., proposes taking 5 percent of Customs duties and applying them to a freight fund. 
   The DRIVE Act also includes a program called Assistance for Major Projects under which the Federal Highway Administration selects projects believed to have the most national benefit and submits them to Congress for final approval. The program is designed to provide assistance for major projects that a single state can’t easily do on its own and that have multi-jurisdictional impacts. Freight projects are one of the eligible categories.
   Smith said the idea combines aspects of the TIGER grant program and Projects of Regional and National Significance. It also resembles what Congress did under the Water Resources Reform and Development Act to get around the ban on earmarks by requiring the Army Corps of Engineers to approve harbor deepening projects through a Chief’s report and submit the list to Congress for authorization, he added.
   The legislation also would cut the Transportation Infrastructure Finance and Innovation Act program from $1 billion to $675 million and make it easier for states to toll existing interstates.