DRIVE Act

DRIVE Act Enters Passing Lane

This is a follow up from our initial post, DRIVE Act: The Little Engine That Might 

Congressional action on transportation funding remains fluid as the Senate gears up to act in the shadow of a looming deadline July 31.

Congressional action on transportation funding remains fluid as the Senate gears up to act in the shadow of a looming deadline July 31.

The Senate last night secured enough votes to advance the 6-year transportation bill. The procedural vote, which passed 62-36, allows the Senate to debate the bill and consider amendments.
 
While funding for the overall STP program was increased and the allocation to local governments was increased to 55 percent from 50 percent, the bill includes a little sleight-of-hand feature that actually reduces STP funds to municipal governments. The bill requires that 15 percent of the STP suballocation for local governments go toward non-system bridges. In MAP-21, this 15 percent bridge funding came from the state’s allocation. In the DRIVE Act, it would come from the local government suballocation. Thus, funds to local governments overall will be reduced from $4.9 billion to $4.6 billion.
 
Local government advocates, including NACO, NLC, Conference of Mayors and T4A have caught on to this reduction and will be working together to increase the STP suballocation to local governments. An amendment is being drafted to reverse the cuts and increase STP for local governments.
 
If this STP amendment fails or is not allowed to be offered, it could lead local governments to oppose the bill. The Senate bill already faces some stiff challenges for other reasons and from different factions, including:

  • General opposition from Tea Party Republicans to transportation investment;
  • Presidential candidates in the Senate promising to hold up the bill to address their pet issues from abortion to the Iran nuclear deal; 
  • Concern over some of the pay-\fors, including revenue from reducing interest rates paid by the Federal Reserve to large banks, selling oil from the Strategic Petroleum Reserve that is used to prevent energy crises and directing fees from the Transportation Security Administration and customs processing. Some Senators just oppose the pay fors, while others wanted to use these pay fors for their pet bills (ie pending Energy Bill and sequestration relief).
  • Concern over some of the environmental streamlining.

 
DRIVE Act highlights include:

  •  A new Freight Mobility Program will distribute $1.5 billion in FY16 and grow from there. Freight corridors throughout the country will see needed influx in resources. In FY 16, Washington and Oregon would receive $34.2 million and $25.3 million to build important infrastructure projects.
  • A new Major Projects Program will distribute $300 million in FY16 and grow to $450 million in FY21. The new initiative will fund large projects of regional and national significance throughout the country.
  • The bill increases funding for the Transportation Alternatives Program from $800 million to $850 million and gives local governments 100% control over the use of funds. TAP provides funding for trails, bike paths, safe routes to school and other local priorities. 
  • The Surface Transportation Program allocation to local governments is increased from 50% to 55%. However, the overall pot has shrunk, so local governments will actually see a reduction. There are efforts underway to offer amendments to increase local governments share of STP funds.
  • The bill increases the funding that must be spent on projects to maintain and repair bridges off of the National Highway System, as these bridges often struggle to find a reliable funding stream. These city and county owned bridges were neglected under MAP-21. The bill requires that states allocate at least 110% of the funds they allocated to bridges in FY 2014.
  • The bill restores funding for the FTA Bus and Bus Facility grant program and increases transit formula dollars for transit agencies in urban and rural areas.

DRIVE Act: The Little Engine That Might

The recent bridge collapse in California is fueling momentum in Congress to act on a transportation package.

The recent bridge collapse in California is fueling momentum in Congress to act on a transportation package.

The updated DRIVE Act cruised up to the Senate floor yesterday weighing in at 3.25 pounds and 1,030 pages. Ultimately, it ran out of gas shortly after the shiny new bill was driven off the lot.

Majority Leader Mitch McConnell gave senators less than an hour to read the bulging bill before voting to proceed. Democrats wanted more time to read the bill, while some Republicans opposed the “pay fors.” Ten Republicans joined every Democrat in opposition to proceeding to the bill and we now await McConnell’s next jump start of the bill. 

While news of our crumbling infrastructure is not new, the recent bridge collapse in California is fueling momentum in Congress to act on a transportation package. Most in Congress believe our country is underinvesting in roads and bridges, but the urgency hasn’t spurred long term action or clever ways to pay for our infrastructure deficit.

The current transportation bill expires July 31 and the Highway Trust Fund is nearly broke. If Congress doesn’t act with at least a short-term extension by July 31, transportation projects around the country will grind to a halt and DOT furloughs will be issued. It’s unlikely Congress will let this happen, but there are a lot of obstacles to quick action on a transportation bill or extension.

The House has already passed an extension to December, along with $8 billion in funding offsets. McConnell doesn’t like that plan and has teamed up with Democratic Senator Barbara Boxer to push for a longer term solution that transportation stakeholders badly crave. McConnell wants to demonstrate the Republican controlled Senate can pass consequential legislation on his watch.

The DRIVE Act would reauthorize federal highway and transit funding at an increased funding level of about 3.3 per per year for six years, from FY 2016 through FY 2021. Highway funding would increase 19 percent over the six years of the bill. Transit funding programs would increase from $10.862 billion in the current year to $11.797 billion in FY 2016 and to $13.26 billion in FY 2021. 

Only three years of funding offsets have been identified. After the third year, additional funds would need to be raised to prevent a shutdown.  The complicated provisions of the bill leave many policymakers asking questions, while other senators are concerned about the pay-fors. 

How Is the Bill Paid For?

The multi-year highway bill includes approximately $47 billion in offsets from other areas of the federal budget to help pay for new highway funding over the next three years. The proposal relies largely on revenue from reducing interest rates paid by the Federal Reserve to large banks, selling oil from the Strategic Petroleum Reserve and redirecting fees from the Transportation Security Administration and customs processing. The offsets are typical for Congress, they found three years’ worth of funding over a 10-year budget timeline. 

Many Democrats wanted simply to raise the gas tax to cover the cost of a long-term bill. However, nearly all Republicans and President Obama have expressed opposition to raising the tax, even though it hasn’t been raised since 1993.

DRIVE program highlights include:

  • A new Freight Mobility Program will distribute $1.5 billion in FY2016 and grow from there. Freight corridors throughout the country will see a needed influx in resources. In FY2016, Washington and Oregon would receive $34.2 million and $25.3 million to build important infrastructure projects.
  • A new Major Projects Program will distribute $300 million in FY16 and grow to $450 million in FY2021. The new initiative will fund large projects of regional and national significance throughout the country.
  • The bill increases funding for the Transportation Alternatives Program from $800 million to $850 million and gives local governments 100 percent control over the use of funds. TAP provides funding for trails, bike paths, safe routes to school and other local priorities. 
  • The Surface Transportation Program allocation to local governments is increased from 50 to 55 percent. However, the overall pot has shrunk, so local governments will actually see a reduction. There are efforts underway to offer amendments to increase local governments share of STP funds.
  • The bill increases funding that must be spent on projects to maintain and repair bridges off of the National Highway System, as these bridges often struggle to find a reliable funding stream. These city and county owned bridges were neglected under MAP-21. The bill requires that states allocate at least 110 percent of the funds they allocated to bridges in FY2014.
  •  The bill restores funding for the FTA Bus and Bus Facility grant program and increases transit formula dollars for transit agencies in urban and rural areas. 

It’s unclear what’s in store next for the DRIVE Act. The Senate was expected to take up the bill again today, but the bill has yet to make an appearance. If senators move to proceed, there will be a flurry of amendments and likely a rare weekend Senate session to complete the bill.

Even if senators pass the long-term measure, the House could reject the bill and opt for its short-term measure extension.

Senate Panel Approves 6-year, $278 Billion Highway Bill

the bipartisan committee vote on the DRIVE Act signals that lawmakers see political value in spending on transportation infrastructure.

the bipartisan committee vote on the DRIVE Act signals that lawmakers see political value in spending on transportation infrastructure.

A Senate committee unanimously advanced a 6-year, $278 billion highway bill amid lingering doubts the measure can actually be funded, let alone by July 31 when current highway spending authorization expires. A more likely next step is an extension until December.

If nothing else, the bipartisan committee vote on the DRIVE Act signals that lawmakers see political value in spending on transportation infrastructure. Whether the institutional obstacles can be surmounted to pass a bill and fund it, remains a big question. Chances are the eventual bill that passes will have a shorter timeframe.

Here is a recipe for how we get something other than a simple extension this year  – The 6-year DRIVE Act would need about $100 billion in additional funds to remain solvent through September 30, 2021. Even in DC, $100 billion is a lot of money. It's more likely the tax writing committees would come up with a smaller amount, something closer to $35 billion.

If that happens, the EPW authors will be forced to downsize the bill. The result would be a mini-DRIVE Act that funds transportation for two fiscal years and keeps the policy changes from the DRIVE Act intact. This two-year timeline is similar to MAP-21, the previous transportation bill that passed in 2012. 

If these pieces come together quickly, there is a slight chance the mini-DRIVE Act could pass by July 31. If they can't pull all the pieces together by then, but still show good progress, it's possible a very short-term extension will give leaders some breathing room and we could see a 2-year bill pass in the fall.

A simple extension through December would cost somewhere between $8 and $11 billion, so it seems plausible the tax writing committees could find another $20 billion or so to fund a 2-year bill, satisfy some transportation stakeholders and prove the Congress can actually govern. If they can't find more money, a simple extension of current law through December is the most likely scenario. 

The DRIVE Act

Components of the bill include the following: 

Fully-funds highway programs for 6 years

The bill reauthorizes the Federal-aid highway program at an increased funding level for six years, from FY 2016 through FY 2021. Funds are increased by 3% each year over the six years. Transit programs aren't included in this draft as FTA is under the jurisdiction of the Senate Banking Committee.

Increases support for core formula programs and more local control

The existing consolidated core highway program structure from MAP-21 is maintained, including: the National Highway Performance Program; the Highway Safety Improvement Program; the Surface Transportation Program; and the Congestion Mitigation and Air Quality Improvement Program.

The local MPOs share of Surface Transportation Program (STP) dollars are increased from 50% to 55%, with the state DOTs share reduced from 50% to 45. 

Also funding for the Transportation Alternative Program is increased from $800 million to $850 million and state DOT's are required to distribute funds to MPOs based on the proportionate share from FY2009 - Pre-MAP21 levels. This should provide significantly more money to local governments through TAP.

Funds major projects - A Return to Congressionally Directed Spending

Funding for Projects of National Significance starts at $300 million in FY16 and grows to $450 million in FY2021. Grant requests in urban areas must be at least $50 million to be eligible. 
This section is sure to get the most play in the press. The legislation tasks the Administration with compiling a list of eligible projects. However, the Administration is then directed to send a list of projects to Congress which includes "at least 2 times, but not to exceed 4 times, the authorization level for each fiscal year." This wish list will be sent to the Senate EPW Committee and House T&I Committee, where they will select the final awards. I guess it was only a matter of time. Basically, the Administration will send a big list of possible projects that are eligible and scored well and Members of the Committee will whittle it down and make the final selections. 

The program includes a set-aside for rural areas (20%) and ensures an equitable geographic distribution of funds.

Prioritizes bridges and large, nationally-important facilities 

The bill increases the funding that must be spent on projects to maintain and repair bridges off of the National Highway System, as these bridges often struggle to find a reliable funding stream. These city and county owned bridges were neglected under MAP-21. The bill requires that states allocate at least 110% of the funds they allocated to bridges in FY 2014. This will ensure more funds go to local bridge projects.

The bill also shifts additional revenue towards the Interstate System and the National Highway System to address the significant maintenance backlog on those facilities.

Provides substantial new funding to focus on freight and goods movement

The bill establishes a formula-based freight program, which will provide funds to all states to improve goods movement, reducing costs and improving performance for business. Funds for the freight program start at $2 billion in FY16 and increase to $2.5 billion in FY2021. 

It expands flexibility for both rural and urban areas to designate key freight corridors that match regional goods movement on roads beyond the Primary Highway Freight System.
The legislation improves efforts to identify projects with a high return on investment through state freight plans and advisory committees established under MAP-21.

Other important program funding levels

The bill funds the Federal Lands Access Program at $255 million in FY16 up to $280 million in FY21.

University Transportation Centers are funded at $72.5 million each year of the bill. 
TIFIA is funded at $675 million/year from FY16-FY21.

Accelerates project delivery and increases flexibility

Building on the reforms in MAP-21, the bill continues to accelerate the project delivery process. 
New reforms would improve collaboration between the lead agency and the participating agencies, allow for greater reliance on documents prepared during the planning process, and reduce duplication between agencies involved in the federal environmental review and permitting process.