DOT unveils new version of GROW AMERICA Act

Earlier today, the United States Department of Transportation (DOT) introduced The GROW AMERICA Act, a six-year, $478 million transportation reauthorization bill.

This legislation takes the same name of a previous bill rolled out in April 2014, which did not make enough traction to be signed into a law, and would replace the current authorization, MAP-21, whose most recent continuing extension is set to expire at the end of May.

DOT officials said this legislation aims to provide funding growth and also certainty that allows state and local governments to remain on track with their myriad projects and invest in modernizing the nation’s infrastructure.

“All over the country, I hear the same account: the need to repair and expand our surface transportation system has never been greater, and yet federal transportation funding has never been in such short supply,” DOT Secretary Anthony Foxx said in a statement. “Our proposal provides a level of funding and also funding certainty that our partners need and deserve. This is an opportunity to break away from 10 years of flat funding, not to mention these past six years in which Congress has funded transportation by passing 32 short-term measures.”

Funding for this legislation, according to DOT officials, would be done by supplementing current Highway Trust Fund (HTF) revenues, which are primarily from the federal gasoline tax, in conjunction with a 14 percent transition tax up to $2 trillion of untaxed foreign earnings U.S. companies have accumulated overseas.  This measure, said DOT, would prevent Trust Fund insolvency for six years, as well as increase investment to meet national economic goals. 

Specific components of the GROW AMERICA act include:
-$317 billion towards the nation’s highway and road safety, which will increase the amount of highway funds by an average of about 29 percent above FY 2015 enacted levels;
-an increase in innovative financing by strengthening Transportation Infrastructure Finance and Innovation Act (TIFIA) for $6 billion to support $60 billion in loans and Railroad Rehabilitation and Improvement Financing (RRIF) loan programs, by making more Private Activity Bonds (PABS) available, and by nearly doubling funding for the TIGER grant program at $7.5 billion over six years for TIGER; and
-$18 billion for a multi-modal freight program focused on strengthening the nation’s exports and trade, among others

With the U.S. transportation system moving more than 52 million tons worth roughly $46 million per day, equating into 40 tons of freight per person per year, coupled with freight tonnage expected to increase 62 percent by 2040, DOT said that this multi-modal freight program will help to augment how U.S. transportation systems move freight, with a focus on a new multimodal freight grant program to fund innovative rail, highway, and port projects to improve the efficient movement of goods in the U.S.

What’s more, DOT said that this legislation “will also give shippers and transportation providers a real seat at the table for making investment decisions and incentivizes states to collaborate and establish long-term freight strategic plans.

That point is certain to be welcomed by supply chain stakeholders, namely shippers, carriers, 3PLs, and port authorities, among other groups, in that over the years there has been sentiment in previous bills that freight policy and funding has been overlooked in legislation or not received enough focus or attention.

With the current count of short-term extensions to keep transportation authorization at 32 and going back several years, the United States infrastructure has continued to deteriorate.

That was made clear in a DOT report entitled “Beyond Traffic,” that revealed various troubling findings regarding the current state of U.S. transportation infrastructure, including: drivers spend more than 40 hours per year stuck in traffic; 65 percent of the roads they drive on are in less than good condition; one of four bridges they cross needs to be replaced; over the next 30 years, Americans will ask more out of the country’s transportation than ever before, while the country’s population will grow by 70 million, and freight traffic will increase by 45 percent.

“I am happy to see that the USDOT legislative proposal continues to lead with a section on freight development,” said Mort Downey, Coalition of America’s Gateways and Trade Corridors Chairman and former deputy Transportation Secretary under President Clinton. “They support strong federal investment, through both discretionary and formula programs, supported by a strong planning partnership of states, MPOs and the private sector.  I’m confident that the players in Congress similarly support freight investments as a core federal function.  Now the debate will be over how to pay for these and other transportation needs over a sustained period.  Secretary Foxx has put forth a credible proposal for taxing corporate profits being held off-shore.  The spotlight will now shine on the House and Senate for their ideas.”