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Congress kicks into high gear on transportation — let’s summarize the action

During an extremely busy week in Congress in several key committees, a long-term transportation bill and a multi-year passenger rail authorization were introduced and passed committees, along with hearings on possible ways to keep our nation’s transportation fund afloat, rural transportation issues, rail safety, and autonomous vehicles.

For those of you who don’t regularly follow Congress, this is often how things go: nothing seems to happen for a long time, and then there’s an explosion of activity all at once. That’s certainly what took place this week in the Senate, with some important ramifications for the future of transportation funding and policy. We hope that Congress shows the same focus when they return from their weeklong July 4th recess.

Four of the five Senate committees with jurisdiction over either transportation policy or funding were active this week. Two notable transportation policy bills (and one yearly spending bill) were advanced out of committees this week, and the Senate made the first big move toward passing a long-term transportation reauthorization ahead of the July 31 expiration of MAP-21, the current law. So what happened, and what should we be expecting next?

Here’s our brief rundown of what you need to know.

First up, in news we haven’t covered here yet, the Senate Appropriations Committee this morning marked up and passed their version of the yearly transportation and housing spending bill that was passed out of the House several weeks ago — a bill that cut TIGER, passenger rail, and transit construction. Unfortunately, the news out of the Senate today was only marginally better. On the plus side, TIGER funding is maintained at this year’s level: $500 million again for competitive grants this upcoming year. But the Senate actually makes deeper cuts to New and Small Starts transit construction than the House did — $520 million in cuts over last year, and $320 million more than the House passed a few weeks ago. Passenger rail funding gets a marginal increase over last year’s level.

While we were hopeful that the Senate could possibly restore some of these cuts made by the House — as had happened in several years past — the consensus by House and Senate Republicans to stick to 2011 budget sequestration-level discretionary funding amounts for all of their FY2016 spending bills result in cuts across the board to discretionary programs like these. All Democrats on the Appropriations Committee opposed this bill.

Smart Growth America offered up this statement on the THUD bill today. T4America is a program of Smart Growth America.

The United States is in the middle of an affordable housing crisis. Rents are rising, the homeownership rate is declining, and federal housing programs are already failing to meet the need for affordable homes. Gutting the HOME program at a time like this is the wrong response. If Congress’s budget caps force this outcome, the budget caps need to be changed.

Logged-in T4America members can read our full THUD summary below:

[member_content]June 24, 2015 — The Senate Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies (Transportation-HUD) marked up and reported its FY2016 appropriation bill to the full committee on June 23 without amendment. This is T4America’s short members-only summary of the THUD bill as reported to the full committee. Read the full memo.[/member_content]

Second up was the release and the subsequent committee markup of the Environment and Public Works (EPW) Committee’s six-year transportation bill known as the DRIVE Act. The EPW Committee is responsible for the largest portion of the full bill known as the “highway title” — more on the other portions below. In case you missed any of our posts about the EPW bill over the last few days, you can catch up with those below. Long story short? EPW released a bill with some modest improvements that represents a good starting point for debate, they approved it unanimously in committee while making a few small improvements, and important amendments that could ensure our investments best maintain and improve our transportation system are still outstanding and will hopefully be considered by the full Senate.

Statement on the release of the Senate’s long-term transportation reauthorization proposal

While this bill provides a positive starting point, there are other areas where Congress can and should do better.

Senate’s new transportation bill is a good start, but more should be done for local communities

The EPW committee marked up and approved this bill unanimously on June 24th without considering amendments (other than a package of amendments in a manager’s mark.) The amendments mentioned below were discussed or offered and withdrawn, and will hopefully be debated on the floor of the Senate. So keep any letters of support coming — this action is still ongoing!

Senate Committee rolls forward with speedy markup of six-year transportation bill

In a committee markup where the phrase “doing the Lord’s work” was invoked by numerous members on both sides of the aisle, the Senate Environment and Public Works Committee sped through a markup of their draft six-year transportation bill in less than an hour this morning, approving it by a unanimous vote with no amendments, save for a manager’s package of amendments agreed to in advance.

While the Senate Appropriations Committee marked up the transportation & housing spending bill this morning, the Senate Commerce Committee — the committee with jurisdiction over rail policy in the Senate — considered the Railroad Reform, Enhancement, and Efficiency Act — a bill to govern all passenger rail policy and authorize funding for the next several years. The RREEA bill is a good step forward, supported by T4America wholeheartedly:

Statement in response to introduction of the Railroad Reform, Enhancement and Efficiency Act

Senators Wicker and Booker are doing the nation a great service in crafting a bill that ensures Americans will see continued and improving passenger rail service in the years to come. Passenger rail service is vital and growing in popularity, and keeping the system working and safe requires investment. The Wicker-Booker bill embraces both those ideas. It authorizes necessary funding to start to return the system to a state of good repair and make targeted investments to improve service.

The committee markup of the bill known as RREEA was mostly uneventful, and it passed by a unanimous vote with mostly minor amendments and issues raised — some of which were safety-related and expected in the wake of the recent derailment in Philadelphia. The Commerce Committee is also responsible for freight and rail policy for the long-term bill, and we’ve heard that they could be releasing their draft long-term bill shortly after the July 4th recess.

Lastly, both House and Senate committees tasked with finding the funding to pay for the next long-term transportation bill (or finding the money to extend MAP-21 past July 31) held hearings this week to continue their work along those lines. In the case of the House, they were specifically discussing repatriation of corporate earnings as a possible revenue source.

Repatriation is the process by which companies can bring offshore earnings back to the U.S. at a reduced tax rate, and then all or a share of those tax revenues would be directed to the trust fund, providing revenues for a long-term transportation bill. It’s an idea that’s gotten some traction in the Senate — Senators Barbara Boxer and Rand Paul have introduced a proposal — but it’s still a one-time fix that’s still not a fee paid by the users of the transportation system.

A House Ways and Means subcommittee held a hearing today to discuss repatriation, and the overall takeaway from the hearing seemed to be that while repatriation may be the most feasible option after a gas tax increase was ruled out by Ways and Means Chairman Paul Ryan, there’s still little consensus in the House, and many representatives want to tie it to more thorny issues like corporate tax reform, reducing the chances that it could pass quickly or easily.

In the Senate, the Finance Committee held a hearing today as well to discuss the use of public-private partnerships — a growing trend in many states as they look to up-front cash from the private sector to help fund longer-term projects where the private party defers their payment or profits. Despite the way P3s, as they’re known, are frequently invoked as a possible funding solution, almost all the panelists today noted that although having a greater range of financing options will certainly be a boost to many states and cities, P3s won’t be sufficient without also increasing overall revenues. They’re not a panacea.

Which leads us right back to the elephant in the room: finding and agreeing upon a new, stable revenue source that can keep the nation’s transportation fund solvent for years to come. It was indeed a busy week, and we hope that Congress will keep up the momentum when they return from their weeklong July 4th recess.

Obama budget cues start of serious negotiations over transportation funding

With the release of his budget proposal yesterday, President Obama at last offered some specifics on his plan to use the repatriation of taxable corporate profits to fund transportation. In doing so, he staked out a starting point for real-world negotiations over a possible six-year transportation bill – the first time such a prospect has seemed remotely realistic in six years.

His gambit joins a burgeoning set of transportation funding proposals in Congress (more about these later in this post), another hopeful sign that lawmakers are taking the issue seriously.

The less good news, of course, is that those negotiations over tax reform and transportation funding – to say nothing of policy – are almost certain to last beyond the May 31 expiration of the current law, MAP-21. That means another extension and lingering uncertainty until this can be wrestled to the ground.

With the addition of revenues from taxing American profits parked overseas, the Obama budget looks to invest $94.7 billion in fiscal 2016, nearly double today’s level of just over $50 billion. Invested along the lines of his GROW America Act, this would represent a 25 percent increase for the highway program and more than 70 percent for transit, which today is wildly oversubscribed.

All told, the Obama plan would authorize $478 billion for a six-year program of investment, $176 billion over the levels of MAP-21, and $76 billion more than the four-year version of GROW America released last spring. About $240 billion of that is from expected gas tax revenue. Placing a mandatory 14 percent tax on roughly $2 trillion in earnings held abroad by U.S. multinationals would yield about $238 billion, the Administration estimates.

The plan would make the TIGER grant program a permanent feature, funded at $1.25 billion a year, and would continue funding planning grants for planning walkable neighborhoods around transit stops. It also would establish passenger rail and multimodal accounts within the former Highway Trust Fund (HTF), now reconstituted as the Transportation Trust Fund. It would create a multimodal freight program, funded at $1 billion in 2016, and continue to promote the accelerated, inter-agency reviews to get projects moving faster.

While Republicans criticized many features of the Administration budget, the notion of using corporate tax reform to fund transportation seems to have growing bipartisan support, as support for raising the gas tax struggles to take hold.

Last week, the unlikely pairing of Sens. Rand Paul (R-KY) and Barbara Boxer (D-CA) announced they would introduce the “Invest in Transportation Act”, a plan to offer an enticement tax rate of 6.5 percent on corporate earnings returned to the U.S. from abroad, with all proceeds going to the Highway Trust Fund. Because it is voluntary, the exact amount is uncertain, but the senators have said they hope it can make up for flat or declining gas tax revenues.

On the House side, Reps. John Delaney (D-MD) and Richard Hanna (R-NY) have introduced the Infrastructure 2.0 Act, (HR 625), under which existing overseas profits would be subject to a mandatory, one-time 8.75 percent tax. This is expected to yield $120 billion, sending enough of that to the Highway Trust Fund to cover the gap between anticipated gas tax in-take and spending at current levels plus modest growth.

The bill also directs $50 billion of the $120 billion to capitalize an infrastructure bank called the American Infrastructure Fund (AIF) that could provide financing to transportation, energy, communications, water and education projects. Rep. Delaney establishes an AIF in another bill submitted last year along with Rep. Mike Fitzpatrick (R-PA), who reintroduced their “Partnership to Build America Act” (HR 413) on Jan 20. State and local government entities, nonprofit infrastructure providers, private parties, and public-private partnerships all would be eligible to apply for AIF financing. Through bond sales, the fund would be leveraged at a 15:1 ratio to provide up to $750 billion in loans or guarantees.

Not everyone in Congress has given up on the bird-in-the-hand funding source – the gas tax. Rep. Earl Blumenauer (D-OR), is set to reintroduce his UPDATE Act, which would hike the per-gallon tax by 15 cents, with 5 cent increases unfolding over the next three years, and index the overall tax to inflation. In the Senate, Senator Tom Carper (D-DE) is working with a bipartisan group to introduce a gas-tax bill, expected later this month.

Although more of an aspirational bill than a funding measure, Senator Bernie Sanders (I-VT) last week introduced his Rebuild America Act. Designed to illustrate the scale of investment the senator says we need, it calls for providing an additional $1 trillion in infrastructure investments over the next five years for roads, bridges and transit, passenger rail, airports, water infrastructure, marine ports and inland waterways, national parks infrastructure, and broadband and electrical grid upgrades.

It would add $735 billion to surface transportation investments over the next 8 years, with an additional $75 billion a year for the HTF. It also would capitalize a National Infrastructure Bank with $5 billion per year for fiscal 2015-19, estimated to stimulate more than $250 billion in investments. It provide for $2 billion more for TIFIA loans and $5 billion a year for TIGER.

And it makes all the other proposals look like skinflints in comparison.

At last, Congress and the White House appear to have moved transportation to a front-burner issue this year. With the Obama proposal as a strong starting place, here’s hoping negotiations proceed swiftly and in good faith so our communities can continue to plan, maintain and build for continued prosperity.