New draft of surface transportation legislation has a sharp focus on freight

A draft of a pieced of legislation circulating around Washington, D.C. contains many action items that could turn up in the next version of a surface transportation reauthorization.

The previous authorization, SAFETEA-LU (The Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users), expired in September 2009 and it has been kept intact at current funding levels through a series of continuing extensions. The authorization is set to expire on September 30, 2011.

While the legislative draft, entitled the “Transportation Opportunities Act,” is reported to have been written by the White House, Administration officials have not definitely said it originated there, according to media reports.

The draft is comprised of various items that would have a direct impact on domestic supply chain and freight operations, including:
-establishing a national infrastructure innovation and finance fund that would seek out and invest in infrastructure projects of regional and national significance that would otherwise be difficult to fund and “invest in infrastructure projects that significantly enhance the economic competitiveness of the United States or a region thereof by increasing or otherwise improving economic output, productivity, or competitive commercial advantage.”;
-establish an Office of Freight Policy and a National Freight Transportation Policy, which would direct the office of the Under Secretary for Policy to issue a biennial National Freight Transportation Plan (which would include a report on the conditions and performance of the National Freight Transportation System), direct the Secretary to develop transportation investment data and planning tools;
-establish the National Highway Program to provide funding to preserve and improve the condition and performance of the highway infrastructure;
-expand the National Highway System from approximately 160,000 miles to 223,115 miles to include all urban and rural principal arterials, the strategic highway network and intermodal connectors;
-provide tolling options with more flexibility to finance new construction or capacity, and manage congestion; and
-establish a Surface Transportation Revenue Alternatives Office within the Federal Highway Administration that would analyze the feasibility of implementing a national mileage-based user fee system that would convey prices to users to reflect system use and other travel externalities and serve as a funding source for surface transportation programs.

This last item has been broached before in the form of a Vehicle Mileage Tax (VMT) but has failed to gain meaningful traction in previous iterations. This would essentially serve as a replacement for the national gasoline tax of 23.4 cents for diesel and 18.4 cents per gallon of gasoline and has not been changed since 1994.

The legislation pointed out that as vehicles become more efficient and the use of non-petroleum energy sources become more prevalent the current user fee system—the gasoline tax—for funding the transportation system will become less viable.

As a result, there is considerable interest in the potential for a mileage-based excise tax regime as a revenue source for surface transportation programs,” the legislation stated.

Leslie Blakey, executive director of the Coalition for America’s Gateways and Trade Corridors, told LM that this bill is replete with a lot of innovative ideas in the sense that it is calling for an Office of Freight Policy and a National Freight Plan to work with shippers and the freight system providers and carriers to make this plan a living document that will guide the country into the future.

“That is a huge step in the right direction in that it would work across the modes and reach out to other agencies and other parts of the federal government,” said Blakey. “It would represent a very important step forward.”

Blakey also cited the various references to multi-modal freight in the bill, as well as mode integration and working to create a transportation system and a freight system in a way that could be tied together.

Earlier this year, the White House released its proposed Fiscal Year 2012 budget proposal, which included a six-year, $556 billion surface transportation reauthorization proposal. If enacted,  this bill would be more than 60 percent above the inflation-adjusted levels of SAFETEA-LU.

Included in this new six-year plan are:
-funding for highways, transit, highway safety, passenger rail;
-a National Infrastructure bank, which would be allocated $30 billion in loans and grants to support individual projects and broader activities of significance for the Nation’s economic competitiveness; and
-a proposal to boost transportation spending by $50 billion above current law spending in the first year of the authorization for roads, railways, and runways, among other components.

Not to be overlooked in the various bills being bandied about is the issue of funding.

How to fund such a new bill remains a bit of a quandary, even though the White House has repeatedly made it clear that the current framework for financing and allocating surface transportation investments is not financially sustainable.

White House officials have explained that the President is committed to working with Congress to ensure that funding increases for surface transportation do not increase the deficit. And they said that this budget proposes to make all surface transportation reauthorization programs subject to PAYGO in which federal funding comes from available financing rather than borrowed sources of capital.

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