Update From Washington, D.C.
July 2, 2020
House Approves $1.5 Trillion Infrastructure Package;
Includes $500 Billion Surface Transportation
On July 1, the House of Representatives voted 233-188 to approve a $1.5 trillion infrastructure investment bill. The legislation (HR 2) – entitled the Moving Forward Act – would authorize federal spending for roads, bridges, transit, rail, housing, broadband, drinking and wastewater systems, energy, health care, aviation, and other programs.
The centerpiece of HR 2 is a five-year, $500 billion surface transportation reauthorization measure. The legislation, which was approved by the House Transportation and Infrastructure (T&I) Committee on June 18, would renew a host of highway, transit, and safety programs, all of which are slated to expire on September 30 of this year.
All told, the Moving Forward Act would provide $319 billion for highways, $105 billion for transit, $60 billion for rail, $5 billion for highway safety, and $5 billion for motor carrier safety. Of the aforementioned spending, $411 billion would come directly from the Highway Trust Fund (HTF), or a roughly 46 percent increase when compared to spending authorized under current law (FAST Act; PL 114-94).
In recognition of the fiscal toll that the COVID-19 pandemic has taken on state and local budgets, HR 2 would waive for FY 2021 the typical local match that is required for highway, transit, and safety programs. From FY 2022 through 2025, the legislation proposes new and existing authorizations.
In contrast to previous surface transportation bills, HR 2 places a heavy emphasis on returning transportation assets to a state of good repair rather than adding significant new capacity. The legislation also promotes resiliency to climate change and prioritizes local bridge needs – all key CSAC priorities.
In addition, and of particular interest to California’s self-help counties, the House adopted an amendment – sponsored by Representative Grace Napolitano (D-CA) – clarifying that local sales tax measures of general application are not subject to provisions of federal law that require the proceeds of certain taxes to be spent for aviation purposes. The language is in response to a Federal Aviation Administration (FAA) ruling that requires States and local governments to spend the proceeds of any aviation-related tax – those derived from excise taxes and local sales taxes – on airport uses only.
It should be noted that the text of the FAA amendment is identical to CSAC-endorsed legislation (HR 2939) sponsored by Representative Napolitano. If enacted, the language would allow California’s self-help counties to continue to spend general sales tax revenues on voter-approved purposes, thus restoring nearly 30 years of previous federal aviation policy that allowed such expenditures.
To follow are several key surface transportation highlights of HR 2.
Resiliency and Climate Change
HR 2 would create a new program to fund emergency evacuation needs. Under the bill, states and metropolitan planning organizations (MPOs) would be required to develop an infrastructure vulnerability assessment to help guide investments. The measure also would make resilience a core part of the Federal-aid highway program and would allow states to spend dollars from other apportioned programs in order to enhance resiliency. For their part, MPOs would be required to consider carbon pollution and emissions reduction, climate change, resilience, and hazard mitigation throughout the planning process.
The bill also would require the U.S. Department of Transportation (DOT) to establish new greenhouse gas (GHG) emissions performance standards. To help states meet climate change goals, the legislation would create a new program to support various carbon pollution reduction activities, with states given broad authority to invest in programs and projects to help them meet new climate change goals.
HR 2 would require states to spend 20 percent of their National Highway Performance Program and Surface Transportation Program dollars on bridge repair and rehabilitation projects. In addition, the bill would increase the local off-system bridge set-aside to over $1 billion annually, up from roughly $770 million under current law.
The legislation also would streamline bridge project delivery by removing the prohibition against using multiple sources of federal funding for one bundle of bridge projects and would allow the bundling of bridge resiliency projects. Finally, HR 2 would require the DOT Secretary to issue an annual bridge investment report detailing State-by-State expenditures of federal funding on bridge projects.
The House infrastructure package includes language that would provide local transportation agencies with a six-year statutory window to advance Federal Highway Administration (FHWA) Emergency Relief (ER) projects to the construction obligation stage. Under current regulations, states and localities have just two years to move projects forward, though FHWA has discretionary authority to provide agencies with renewable one-year time extensions. It should be noted that if a state/locality is unable to advance an ER project within the applicable timeframe(s), the sponsor loses eligibility for federal reimbursement and is required to repay the federal government any preliminary engineering costs if the project ultimately cannot be completed with state/local funds.
The impetus for the aforementioned statutory change – which Congressman John Garamendi (D-CA) spearheaded on behalf of CSAC – is a 2019 decision by FHWA to deny time extension requests for a number of local ER projects in California.
On a closely related matter, HR 2 also includes language that would provide a six-year expenditure timeframe for emergency projects that fall under the purview of the Federal Transit Administration.
Unlike many of the previous surface transportation bills that have emerged from the House T&I Committee, the HR 2 does not have bipartisan backing. For their part, GOP members of the committee have charged that they were largely cut out of the bill drafting process; furthermore, they have characterized the Moving Forward Act as an extension of the “Green New Deal” rather than a means to support the core functions of the nation’s transportation system. Similarly, President Trump has threatened to veto HR 2.
Across Capitol Hill, the Senate Environment and Public Works (EPW) Committee approved its version of a five-year highway reauthorization bill last year. Unlike the House legislation, the Senate measure (S 2302) has drawn bipartisan support. Looking ahead, EPW Committee leaders will be attempting to pare S 2302 with as-yet-to-be-written rail and safety titles, as well as a transit title.
With the FAST Act slated to expire on September 30, and with little or no consensus surrounding a potential revenue mechanism to pay for new highway and transit spending, lawmakers will have very little time to develop political consensus on a transportation reauthorization package. Accordingly, it is widely expected that Congress will need to approve a short-term extension of current programs in order to avoid a lapse in federal transportation dollars to states.