Weekly Legislative Update June 15, 2020

 

TIA Issues Statement on "Invest in America Act"
 
On June 3, the House Transportation and Infrastructure Committee released draft text of a five-year, $494 billion surface transportation reauthorization bill entitled the "Investing in a New Vision for the Environment and Surface Transportation in America Act" or the "INVEST in America Act."
 
The bill includes $411 billion in contract authority from the Highway Trust Fund for highway, transit, safety and research programs. $319 billion is the portion allocated for the Federal-aid highway program under the Federal Highway Administration.
 
TIA applauds the committee for moving forward with the reauthorization process.  The deadline to reauthorize the FAST Act is quickly approaching. We are hopeful that a bipartisan, bicameral process will move forward to ensure a long-term bill will be signed into law before the FAST Act expires.  Failure to do so could halt important road and bridge projects and further disrupt America's economic recovery.
 
TIA will work closely with State DOTs and our members as we analyze the bill, identify provisions that present opportunities and challenges, and advocate for policies and funding that increase safety and mobility for the motoring public.
 
Following the introduction of the bill, Roy and I had a zoom meeting with Congressman Rodney Davis (R-IL), Minority Member of the Transportation and Infrastructure Committee and the Ranking Minority Member of the Subcommittee on Highways and Transit.

Congressman Davis sees the bill as a partisan "disaster." He observed that Committee Democrats introduced the bill and no hearings will be scheduled. Instead, the legislation will go directly to the floor of the House of Representatives for a vote.

The current five year funding for the Highway Trust Fund will expire on September 30, 2020. The new legislation will increase current spending levels by approximately $80 billion, yet it fails to address what industry taxes would need to be raised or instituted to cover the costs.
 
House Republicans Committee Members believe that it would be impossible to lobby the bill while legislators are working from home. They believe that Senate Republicans will write their own bill and then differences would have to be worked out in a "conference committee." Only then would there be a possibility for a negotiated bipartisan bill prior to the September 30 deadline.

 

Click here to view the bill and here to view a section-by-section summary.

 

Highway and Surface Transportation Reauthorization 
Begins in the House
 
The Invest in America Act is based on the Moving Forward

The T&I Committee has jurisdiction over highways, bridges, mass transit, and railroads, which are all covered in this bill. The House Ways and Means Committee has jurisdiction over funding and has been asked to work on the funding by leadership. The T&I pieces are the first step to move forward in the House and then the Ways and Means Committee will have to address revenue for the Highway Trust Fund (HTF). To pay for the bill, new revenue equivalent to doubling the fuel tax would be needed.
 
The INVEST in America Act's five-year highway funding level represents a 42 percent increase in highway funding over the FAST Act, a slightly higher increase than provided in the Senate transportation reauthorization bill, America's Transportation Infrastructure Act or ATIA, that passed the Senate Environment and Public Works Committee last summer with unanimous bipartisan support. There are bigger winners here, though, compared to FAST Act funding levels. The bill includes a 68 percent increase in mass transit funding from the HTF plus an increase in General Fund authorizations.  It also includes a nearly 500 percent increase in authorized General Funds for intercity passenger rail. With the faster rate of increase in non-highway programs, the funding ratio between the highway and transit programs will fall below its traditional 4-1. 
 
Below is a comprehensive look at what is included in the bill:
Funding:
  • $319 billion - Federal-aid highway program
  • $105 billion - transit programs
  • $4.6 billion for highway safety behavioral programs
  • $5.3 billion for motor carrier safety programs
  • $60 billion for passenger rail programs including Amtrak 
Two Part Bill:
 
The Invest in America Act is broken out into Divisions A and B.
 
Division A is a one-year extension of the current program with only a few changes, noted below. The Highway Users is concerned that House leadership may end up stripping out Division A and passing it on its own and waiting after the elections to work on the larger reauthorization.  
 
Division A - FY 2021 Extension
 
The first part of the bill is an extension of the current programs through FY 2021. The highway programs would receive an additional $14.7 billion over current funding levels. Transit would receive an additional $6.75 billion. These significant funding increases would help curb the impact of COVID-19 on the State DOTs and transit agencies, which have suffered from reduced revenue due to the pandemic. The FY 2021 funds would be made available at 100 percent federal share, and 25% of the funds could be used for additional eligibilities like salaries and operating expenses.
 
Division B - Transportation Reauthorization for four years (2022 to 2025), including significant program changes:  
 
Annual Highway Obligation limits (or budget ceilings) per year are as follows:
  • $61.13 billion for FY21
  • $62.06 billion for FY22
  • $63.02 billion for FY23
  • $64.25 billion for FY24
  • $65.08 billion for FY25 
Core Programs (Highway Trust Fund)
  • $43.37 billion for FY21
  • $55.02 billion for FY22
  • $55.98 billion for FY23
  • $57.09 billion for FY24
  • $58.19 billion for FY25 
These programs include funding for the National Highway Performance Program, the Surface Transportation Program, the Highway Safety Improvement Program (HSIP), the Congestion Mitigation and Air Quality Improvement Program and the National Highway Freight Program.
Areas of Note:
  • Fix it First: For National Highway Performance Program (NHPP) funds, requires focus on state of good repair and operational improvements to existing facilities before building new highway capacity. 
     
     
  • Bridge Investment: Requires States to spend 20 percent of their NHPP and Surface Transportation Block Grant Program (STBGP) dollars on bridge repair and rehabilitation projects, amounting to $28 billion between FY 2022-2025. The bill also increases the off-system bridge set-aside to $1 billion per year versus $770 million in the FAST Act. 
     
     
  • Climate Change: Requires USDOT to establish a new greenhouse gas emissions performance measure based on carbon emissions per capita on all public roads. The Highway Users historically has opposed the creation of this measure, in part as it encourages the shift of funding by state and local government from highway investments to transit to meet "performance targets," notwithstanding vast highway needs. The bill also creates a new formula program ($8.4 billion for FY 2022-2025) to reduce carbon emissions across a wide range of eligible projects-highway, transit, and rail projects including transportation system operations costs. Top-performing states are provided funding flexibility while low-performing states must put in 10 percent of their STBGP dollars towards carbon reduction. 
     
     
  • Resilience: Creates a new formula program ($6.3 billion for FY2022-2025) to fund resilience and emergency evacuation needs. Requires states and MPOs to develop an infrastructure vulnerability assessment to guide investments under the program. 
     
     
  • Accessibility: Establishes a new performance measure for transportation access to jobs and services-including shopping, healthcare, childcare, education and workforce training, and financial institutions-over multiple modes. 
     
     
  • Formula Study: Calls for a study by FHWA to consider modernizing highway formulas and factors.  
     
  • CMAQ: Modifies eligibility for operating assistance to include all state-supported passenger rail lines and allows operating assistance for longer than three years if the project demonstrates net air quality benefits. 
     
     
  • Bicycle/Pedestrian Programs: States with high levels of pedestrian and bicyclist fatalities will be subject to funding penalties; requires FHWA to adopt context sensitive and Complete Streets design principles; increases Transportation Alternatives Program (TAP) funding by over 60 percent from the FAST Act. 
     
     
  • Highway Safety Improvement Program: Reestablishes a state's ability to flex up to 10% of their HSIP funds to non-infrastructure safety improvements. Focuses on high-risk rural roads and expands eligibility for the Safe Routes to School program. Note: While the Highway Users would prefer retaining zero flexing of HSIP funding to non-infrastructure projects, we appreciate the fact that the INVEST in America Act keeps flex to 10% versus the Senate bill, which increases it to 25%. We will work with Congress to address our concerns on this item. 
     
     
  • Freight: Removes the National Highway Freight Program cap on multimodal projects and allows states to designate additional rural and urban freight corridors and increases States power to expend funds across the National Highway Freight Network. 
     
     
  • Tribes, Territories, and Federal Lands: Provides $750 million per year for tribes, $100 million per year for territories, $210 million per year for Puerto Rico, and $895 million per year for federal lands. 
     
     
  • Tolling: Reestablishes the requirement that FHWA enter into a toll agreement before allowing tolling on a Federal-aid highway and creates new requirements for tolling and congestion pricing implementation. 
     
     
  • Workforce Development: Creates a Task Force on Developing a 21st Century Surface Transportation Workforce to evaluate current and future workforce needs and develop recommendations, and establishes transparency and reporting requirements for the On the Job Training and Supportive Services program; requires states to develop annual statewide workforce plans to identify and address workforce gaps and underrepresentation of women and minorities. 
     
     
  • Research and Innovation: Focuses on Intelligent Transportation Systems Program and "smart infrastructure" investment in localities similar to USDOT's SmartCities program. Establishes a new multimodal freight transportation research program and a new Highly Automated Vehicle and Mobility Innovation Clearinghouse. 
     
  • Materials Selection: Reduces materials selection flexibility by focusing funding and deployment on specific construction materials and practices. 
     
  • Vehicle-Miles Traveled Fee Pilot: Increases funding for state pilot programs and establishes a national program. 
     
  • TIFIA: Streamlines the program by raising the threshold above which projects are required to secure multiple credit rating agency opinions, waives application fees for smaller projects, and clarifies TIFIA as non-federal share. 

New discretionary grant programs, funding from the Highway Trust Fund:

  • Projects of National and Regional Significance: Provides more than $9 billion for large highway, transit, and freight projects that cannot be funded through annual apportionments or other discretionary sources. 
     
  • Metro Performance Program: Provides high-performing localities, determined by USDOT, with access to $750 million in direct Federal-aid Highway Program funding over four years, bypassing states. 
     
  • Community Transportation Investment Grants: Provides $600 million per year for local government applicants modeled after Virginia's Smart Scale program. 
     
  • Federal Lands and Tribal Major Projects Program: Provides $400 million per year and requires a 50/50 split of grant funds among tribes and Federal lands agencies. 
     
  • Tribal High Priority Projects: Provides $50 million per year on a discretionary basis.  
     
  • Electric Vehicle Charging and Hydrogen Fueling Infrastructure Grants: Provides $350 million per year for grants for electric vehicle charging and hydrogen fueling infrastructure. 
     
  • Community Climate Innovation Grants: Provides $250 million per year to non-state applicants for highway, transit, and rail projects, provided they reduce GHGs.

Other Provisions:

  • Parking for Commercial Vehicles: Establishes a $250 million grant program to address parking for commercial motor vehicles. 
     
  • Renames the ATCMTD program to the Safe, Efficient Mobility through Advanced Technology (SEMAT) Program: Focuses the program's objectives on mobility, safety, and greenhouse gas emissions reduction. Requires the Secretary to prioritize programs that will improve mobility, decrease congestion, increase safety, and reduce emissions. Expands eligible uses of funds to include vehicle-to-pedestrian safety systems, vulnerable road user safety systems, and mobility-on-demand. 
     
  • Establishes a national clearinghouse at a university to research the impacts of highly automated vehicles and mobility innovation (Mobility on Demand and Mobility as a Service) on land use, urban design, transportation, real estate, accessibility, municipal budgets, social equity, and the environment. 
     
  • Study on safe interactions between automated vehicles and road users. Directs U.S. DOT to study how automated vehicles will safely interact with general road users, including vulnerable road users such as bicyclists and pedestrians. Includes numerous safety considerations to ensure that the study accounts for the complexities of the surface transportation system and its many users. Establishes a working group of road users to guide the study. 
TIA looks forward to continuing conversations with our members and the House Transportation and Infrastructure Committee on the language in the INVEST in America Act as we move towards the June 17 markup and beyond. Stay tuned for next steps.  

 

TIA Signs Letter to President Trump on Emergency DOT Relief
 
Mr. President:

We, the undersigned organizations, respectfully urge your support of an immediate $49.95 billion infusion of federal funding for state departments of transportation (DOTs) as your administration and Congress work on the next COVID-19 response legislation.

Preserving the continuity of state transportation programs now will help forestall further job losses in public and private sectors and allow planned transportation projects to move forward.

With millions of Americans following "stay-at-home" orders, many state governments are facing severe losses in revenues across the board including dedicated user fee revenues on which State DOTs heavily rely. Projections continue to show decreases in state motor fuel tax and toll receipts as nationwide vehicle traffic reduction bottomed out at about 50 percent in early April. The American Association of State Highway and Transportation Officials estimates a 30 percent average decline in state transportation revenue over the next 18 months. Some states could experience losses as high as 45 percent. As a result, the ability of state DOTs to carry out their core functions, including capital construction programs, is threatened. 

Already, some state DOTs are delaying critical transportation projects, putting transportation construction jobs at risk.

Providing state DOTs with an immediate infusion of funding is not unlike action taken in prior COVID-19 response legislation, which compensated aviation, transit, and passenger rail sectors for reductions in ridership and revenue. This urgently needed funding will prevent disruptions to planned transportation projects and allow state DOT employees and transportation construction workers essential to planning and delivering these projects to remain on the job. This action to preserve core state DOT capabilities is absolutely critical in order for states to carry out a robust, bipartisan, and long-term surface transportation legislation later this year that can serve as our national platform for economic recovery and growth.

We appreciate your leadership during this unprecedented time and urge you to support this funding in order to make critical transportation improvements and keep Americans working as our country reopens stronger than ever.

Sincerely,
The Tire Industry Association and other trade organizations. 

 

Joint Statement by Treasury Secretary Steven T. Mnuchin and SBA Administrator Jovita Carranza Regarding Enactment of the Paycheck Protection Program Flexibility Act
 
U.S. Treasury Secretary Steven T. Mnuchin and Small Business Administration (SBA) Administrator Jovita Carranza issued the following statement today following the enactment of the Paycheck Protection Program (PPP) Flexibility Act:

"We want to thank President Trump for his leadership and commend Leader McConnell, Leader Schumer, Speaker Pelosi, and Leader McCarthy for working on a bipartisan basis to pass this legislation for small businesses participating in the Paycheck Protection Program. 

"We also want to express our gratitude to Chairman Rubio, Ranking Member Cardin, Senator Collins, Congressman Roy, Congressman Phillips, and other members of Congress who have helped to create and guide our implementation of this critical program that has provided over 4.5 million small business loans totaling more than $500 billion to ensure that approximately 50 million hardworking Americans stay connected to their jobs.

"This bill will provide businesses with more time and flexibility to keep their employees on the payroll and ensure their continued operations as we safely reopen our country.

"We look forward to getting the American people back to work as quickly as possible."

Upcoming Procedures
 
SBA, in consultation with Treasury, will promptly issue rules and guidance, a modified borrower application form, and a modified loan forgiveness application implementing these legislative amendments to the PPP.  These modifications will implement the following important changes:
  • Extend the covered period for loan forgiveness from eight weeks after the date of loan disbursement to 24 weeks after the date of loan disbursement, providing substantially greater flexibility for borrowers to qualify for loan forgiveness.  Borrowers who have already received PPP loans retain the option to use an eight-week covered period.
  • Lower the requirements that 75 percent of a borrower's loan proceeds must be used for payroll costs and that 75 percent of the loan forgiveness amount must have been spent on payroll costs during the 24-week loan forgiveness covered period to 60 percent for each of these requirements. If a borrower uses less than 60 percent of the loan amount for payroll costs during the forgiveness covered period, the borrower will continue to be eligible for partial loan forgiveness, subject to at least 60 percent of the loan forgiveness amount having been used for payroll costs.
  • Provide a safe harbor from reductions in loan forgiveness based on reductions in full-time equivalent employees for borrowers that are unable to return to the same level of business activity the business was operating at before February 15, 2020, due to compliance with requirements or guidance issued between March 1, 2020 and December 31, 2020 by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration, related to worker or customer safety requirements related to COVID-19.
  • Provide a safe harbor from reductions in loan forgiveness based on reductions in full-time equivalent employees, to provide protections for borrowers that are both unable to rehire individuals who were employees of the borrower on February 15, 2020, and unable to hire similarly qualified employees for unfilled positions by December 31, 2020.
  • Increase to five years the maturity of PPP loans that are approved by SBA (based on the date SBA assigns a loan number) on or after June 5, 2020.
  • Extend the deferral period for borrower payments of principal, interest, and fees on PPP loans to the date that SBA remits the borrower's loan forgiveness amount to the lender (or, if the borrower does not apply for loan forgiveness, 10 months after the end of the borrower's loan forgiveness covered period).
  • In addition, the new rules will confirm that June 30, 2020, remains the last date on which a PPP loan application can be approved.