Senate Passes Bipartisan Infrastructure Bill
On August 10, the U.S. Senate approved its bipartisan infrastructure bill, the “Infrastructure Investment and Jobs (IIJA) Act,” by a vote of 69 to 30. This landmark legislation will generate massive investment in our infrastructure at this critical time if it can pass through the House of Representatives.
The bill would provide $550 billion in spending above budget baseline over five years and includes the text of S. 1931, the Senate Environment and Public Works Committee surface transportation reauthorization bill that passed the Committee in May. The bipartisan infrastructure legislation includes increases for highway funding via formula, a focus on investment in roadway safety, important streamlining provisions, significant bridge investments, and preserves flexibility to invest in both new capacity and improvements to existing roadways that will make every road user’s trip safer and more reliable.
The IIJA also includes the Surface Transportation Investment Act, passed by the Senate Committee on Commerce, Science, and Transportation with bipartisan support, as well as the Senate-passed Drinking Water and Wastewater Infrastructure Act and the Energy Infrastructure Act, which received bipartisan support in the Senate Committee on Energy and Natural Resources.
The Senate accepted 14 amendments to the bill, but the changes were minor in nature.
Our attention will now turn to the House which has recessed until September 20 but if the Senate passes a budget resolution during August, the House is expected to return to vote during this recess. It is unknown how Speaker Pelosi (D-CA) and the House will proceed with the IIJA. Some expect that the House will be forced to take up the bill without amending it due to the President’s and the Senate Democrats' support for the measure. The negotiations took a long time, and the product is delicately balanced so bouncing back and forth with amended versions will be problematic. House Committee on Transportation and Infrastructure Chairman Peter DeFazio (D-OR) is extremely frustrated by the success of the IIJA bill and the potential that the House may have little sway in the final bill; and the House very well may never proceed to conference with their INVEST in America Act. At this point how the House will move forward is unclear -- but we will keep members posted as the legislation develops.
Below are materials of interest:
Authorizes approximately $304 billion from the Highway Trust Fund (HTF) for roads and bridges over five years through FY 2026.
FHWA Highway Trust Fund Contract Authority (Including ER):
FY22 - $58.2 billion
FY23 - $59.5 billion
FY24 - $60.8 billion
FY25 - $62.0 billion
FY26 - $63.4 billion
Note: This is a 34 percent increase over funding levels in the Fixing America’s Surface Transportation Act (FAST Act) and would be the largest amount of highway funding and part of the largest amount of surface transportation funding ever authorized by a surface transportation bill.
Bridge Investment Program - Provides $12.5 billion over five years for a new Bridge Investment Program that funds competitive grants to address the nationwide backlog of bridge repair and rehabilitation projects.
Bridge Formula Program - Appropriates $27.5 billion for a new bridge formula program to provide funding to States and Tribal governments to repair and rebuild bridges.
INFRA Funding - Provides $8 billion over five years for the National Significant Freight and Highway Projects Program, known as “INFRA.” INFRA provides competitive grants for highway, bridge, and multimodal freight projects of national and regional significance.
Climate Change and Resilience:
Reducing Carbon Emissions from Transportation - IIJA establishes a new Carbon Reduction Program that will distribute approximately $6.4 billion over five years to States by formula to invest in projects that support a reduction in transportation emissions. Eligible projects include transportation electrification and EV charging, public transportation, including Bus Rapid Transit, infrastructure for bicycling and walking, intelligent transportation systems (ITS) improvements, infrastructure to support congestion pricing, diesel engine retrofits, and port electrification.
PROTECT Resilience Grants - Creates a new Promoting Resilient Operations for Transformative, Efficient, and Cost saving Transportation (PROTECT) grant program, which provides formula funding to States and competitive grants to eligible entities to make our surface transportation infrastructure more resilient, including through the use of natural infrastructure, to the effects of extreme weather and natural disasters. Provides $7.3 billion in formula funding and $1.4 billion in competitive grants over five years funded from the HTF.
Electric Vehicle Charging - $5 billion over five years for a State formula program for EV charging infrastructure deployment.
Port Truck Emissions Reduction Program - Provides $400 million to reduce air emissions from trucks idling at port facilities.
Healthy Streets - Authorizes a new Healthy Streets Program for eligible projects, including projects that mitigate urban heat islands, improve air quality, and reduce stormwater runoff.
Resilience and Adaptation Centers of Excellence - Authorizes the creation of new Resilience and Adaptation Centers of Excellence, which will advance research to help make surface transportation infrastructure more resilient to natural disasters and extreme weather.
Supporting Rural America & Tribal Communities
Rural Surface Transportation Grant Program - Invests in rural America by authorizing $2 billion over five years for a new competitive grant program to improve and expand the surface transportation system in rural areas.
Tribal Transportation Projects - Authorizes nearly $3 billion over its five years for the Tribal Transportation Program, ensuring that tribes will have greater access to funding for surface transportation projects throughout Indian Country.
Enhancing Safety and Equity for All Road Users
Reconnecting Communities Pilot Program - Provides $1 billion over five years for a new pilot program that provides competitive grants for planning and projects to remove, retrofit, or mitigate existing highways that were built through neighborhoods and created a barrier to mobility and economic development.
Highway Safety Improvement Program ($15.6 billion over 5 years) - Provides States with the ability to flex 10% of their HSIP funds to behavioral projects and includes a new special rule to provide targeted funding to address the safety needs of vulnerable road users under certain circumstances. It also sets aside $1.3 billion over five years for the Railway-Highway Crossing Program.
Note: TIA continues to be concerned with flexing HSIP funds to non-infrastructure programs as they have their own funding sources. The bill allows for 10% flex. We are very pleased with the increase in funding for the HSIP overall.
Transportation Alternatives - The bill increases funding for the Transportation Alternatives Program (TAP), which funds bicycle and pedestrian projects among other projects, through a 10 percent set-aside of the STBGP.
Safe Routes to School - Codifies the existing Safe Routes to School Program, which encourages children to safely walk or bike to school.
Complete Streets - Addresses communities’ access to safe bicycling and walking options by providing dedicated funding for the development of Complete Streets standards and planning by States and metropolitan planning organizations.
Reducing Wildlife-Vehicle Collisions - Authorizes $350 million over five years for a new pilot program that provides competitive grants for projects that reduce wildlife-vehicle collisions.
Codifies One Federal Decision policy, which establishes a two-year goal for completion of environmental reviews for infrastructure projects. Also seeks to ensure environmental review documents remain under 200 pages.
Improving Federal Agency Coordination - Allows federal land management agencies to use an environmental document previously prepared by the Federal Highway Administration (FHWA) for a project addressing the same action, and also allows for a federal land management agency to use the categorical exclusions listed in the implementing regulations of FHWA.
Improving Accountability - Directs the USDOT to carry out a process to track, and annually submit to Congress a report containing the time to complete an environmental impact statement and an environmental assessment under the National Environmental Policy Act.
Other Provisions of Note:
Highway Trust Fund: Includes a $118 billion general fund transfer to the Highway Trust Fund. $90 billion will be deposited into the Highway Account and $28 billion will be deposited into the Mass Transit Account. This transfer was expected as a Highway Trust Fund fix remains elusive.
Clean School Buses and Ferries—$7.5 billion
The bill includes a historic amount of funding, $5 billion, for the replacement of existing school buses with clean school buses, with a priority on low-income, rural, and Tribal schools. $2.5 billion of this funding will be for zero-emission school buses and $2.5 billion will be for zero-emission school buses and other buses that run on alternative fuels.
Expands Buy America to construction materials, which must be “produced in the United States.”
Requires review of general waivers to the program.
Exempts cement and cementitious materials, aggregates such as stone, sand, or gravel or aggregate binding agents or additives from the definition of construction materials.
Safety Contingency Funds: Provides the opportunity for contingency funds that can be used to improve safety in work zones prior to, or during construction.
Vulnerable Roadway Users - Drives policy changes in the bill to protect vulnerable road users such as pedestrians, bicyclists, and people with disabilities.
MUTCD - Requires updates to the Manual on Uniform Traffic Control Devices within 18 months of enacting the bill and then every four years. It also expands the focus to cover vulnerable road users. And allows local jurisdictions to utilize their own design guide if accepted by the FHWA.
TIA will continue to provide updates to its members as the process moves forward. Passing a bipartisan infrastructure bill is our top priority.
The September 30 deadline is fast approaching. Our attention must move immediately to the House.
Senate Democrats Pass $3.5 Trillion Budget Resolution
On August 11th, after an all-night session voting on amendments, the Senate passed a $3.5 trillion “Concurrent Resolution on the Budget for Fiscal Year 2022.” The vote was on party lines, 50-49.
The budget resolution now moves to the House, which will return August 23rd and could consider and pass the budget resolution approved by the Senate.
The Senate and House must pass an identical budget resolution to allow “reconciliation procedures” to take effect, the most important being the ability to pass the FY 2022 budget with 51 votes in the Senate rather than the usual 60.
The “Concurrent Resolution” is not a law, it’s a statement of the two “concurring” houses of Congress allocating appropriations and tax law changes for Fiscal Year 2022.
The Senate did its part by passing the $3.5 trillion budget resolution; if the House approves it, Democrats will be in position to to write a $3.5 trillion bill specifying appropriations and tax changes for FY 22, using reconciliation procedures.
The Senate adjourned for the August recess and will not return till after Labor Day.
The House will return this week, then adjourn for the Labor Day holiday.
Thune Amendment Passes 99-0
Senator Thune filed amendment 3106 to the Senate budget resolution. The amendment protects the current step up in basis provision, stopping the Biden administration’s proposed double death tax.
The issue of step up in basis affects family businesses in every state across the country and we are working towards a bipartisan result.
Days later, Senator Thune’s amendment to protect step up in basis passed with a vote of 99-0. All of the moderate Democrats focused on voted in favor of protecting step up.
Senators Cortez Masto, Tester, and Warnock then offered a side by side amendment essentially carving out family businesses and farms from changes to step up in basis, an idea presented in the administration’s American Families Plan which TIA opposes. All 49 Senate Republicans in attendance held against the carve out amendment and notably Senator Sinema joined Republicans in opposing the carve out concept. The amendment was rejected 49-50.
These encouraging results (non-binding budget votes) do not guarantee any policy outcomes for the future but certainly help our cause in urging members to steer clear of using step up/cap gains at death as payfors. The fight will continue into fall as the tax committees scramble for revenue raisers to fund the next reconciliation bill.
Stay tuned for more updates as we do our small part to protect family businesses from big tax hikes.
TIA Signs onto Letter to Senate on Infrastructure Agreement
The bipartisan infrastructure agreement represents an opportunity to provide meaningful economic and quality of life enhancements to communities across the country and to build for the future. The investments made in the Senate package would facilitate long overdue repairs and improvements to our roads, bridges, rail, and public transportation systems, as well as investing in airports, ports, broadband, and water systems.
The undersigned organizations encourage all senators to support the legislation.
The bipartisan measure would have far-reaching benefits. The investments would create new jobs through project construction in the short term, and provide improved safety, mobility, and quality of life for decades to come. Taken together, the range of improved outcomes for all residents and businesses would help ensure a sound recovery from the COVID-19 pandemic.
By including a five-year reauthorization of federal highway, public transportation, and passenger rail programs, the agreement would also ensure states and localities have much-needed funding and policy certainty to proceed with planned projects. These programs are currently operating under an extension set to expire Sept. 30, underscoring the need for prompt Senate action.
We are grateful for this generational investment in transportation infrastructure and ask for your support on all procedural votes and final passage of the bipartisan infrastructure agreement when it reaches the Senate floor.
Tire Industry Association and other trade associations
TIA Signs onto Joint Letter to Congress Opposing Greenbook Account Reporting Proposal
Dear Leader Schumer, Leader McConnell, Speaker Pelosi, and Leader McCarthy:
We write to express our concerns and opposition to a Treasury Department proposal that would require financial institutions to report to the IRS on the deposits and withdrawals of all business and personal accounts, as well as transfers between accounts of the same owner. We represent small businesses and financial institutions of all sizes and charter types. We support the goal of improving tax compliance to collect appropriate tax revenues due.
We object to the broad, untargeted nature of the Treasury proposal. Collection of comprehensive financial account data to determine tax liability must be narrowly targeted. Treasury’s indiscriminate, blanket data collection would be unsupported by any reasonable suspicion of tax evasion. In the past, Congress has passed legislation to address concerns regarding unreasonable Treasury audit techniques.
For example, Internal Revenue Code Section 7602(e) prevents the use of ‘financial status or economic reality examination techniques to determine the existence of unreported income… unless the Secretary has a reasonable indication that there is a likelihood of such unreported income.” The concerns that motivated this statutory provision are as relevant today as they were when it was enacted in 1998. Any use of personal, financial data should be rigorously justified.
Moreover, we are concerned about the IRS’s poor record of data security which exposes taxpayers’ data, compromises their privacy, and makes them vulnerable to identity theft. In today’s environment, privacy and enhanced security of taxpayer data should take precedence over the mass collection of new data.
Further, we fear that new, intrusive account reporting would undermine the important policy goal of reducing the unbanked population. The unbanked often fall prey to predatory lenders and check cashers, incurring exorbitant interest rates and fees. They jeopardize their personal security by carrying cash and keeping it in their homes. In many American communities, there is a high level of distrust of government in general and the IRS in particular.
These include certain marginalized communities as well as those recently arrived from authoritarian regimes that spy on their citizens. This distrust is a primary reason why too many Americans opt-out of the banking system. Indiscriminate sharing of financial account data with the IRS will only increase the challenge of reducing the unbanked population.
Finally, we are concerned that the Treasury proposal would create taxpayer complexity and confusion. Taxpayers will likely have to receive new or modified 1099s for every account they hold containing funds flow information that may not be relevant to their tax liability. Giving taxpayers more forms and more data to sort and evaluate will make tax compliance more difficult. For example, in jointly held accounts, a taxpayer may not be responsible for reporting all (or any) inflows reflected in the account. This will be the case when couples divorce or when a taxpayer holds a joint account with an aging parent to assist with money management, among other common scenarios. Tax simplicity is an important goal that promotes tax compliance.
In view of the concerns expressed above, we urge Congress to reject the Treasury proposal and explore less intrusive means of reducing the tax gap.
Thank you for your consideration.
Tire Industry Association and other trade associations