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Capitol Watch: Freight on Track

By Anna Denecke, Associate,
Blakey & Agnew, LLC

Late in the morning on October 8, the House descended into chaos as Kevin McCarthy (R-CA), heir apparent to the Speaker’s gavel, dropped out of the race to succeed John Boehner (R-OH). For surface transportation interests, it was tempting to be distracted by the turmoil.

However, with Speaker Boehner’s subsequent announcement that he intended to stay on until a new Speaker was selected rather than leaving on October 30 as originally planned, it appears the House’s plans to move a long-term surface transportation bill are still on track.

The House has until October 29 to either approve a short-term patch to the expiring MAP-21, or pass and conference a comprehensive surface transportation bill with the Senate’s proposal. The DRIVE Act, approved by the Senate on July 30, contains $350 billion in contract authority. In a controversial move, drafters of the DRIVE Act identified only three years worth of funding to support the six-year bill.

According to various reports, the Transportation and Infrastructure Committee (T&I) is planning to mark up their version of a long-term bill in the latter part of October. So what can freight expect? There have been several House proposals in recent months that might serve as a starting point for committee negotiations on a freight title.

One such starting point could be H.R. 1308, Economy in Motion: The National Multimodal and Sustainable Freight Infrastructure Act. The legislation, introduced by Representative Lowenthal (D-CA) on March 4, 2015, creates a dedicated freight trust fund supported by a one percent tax on the cost of transporting goods.

Approximately $8 billion each year would be raised through this tax, according to the California Congressman’s office. The legislation has bipartisan support, counting among its 15 co-sponsors Representatives Dana Rohrabacher (R-CA) and Mark Meadows (R-NC).

Representative Dave Reichert (R-WA) put forward a second plan this summer. The National Multimodal Freight Policy and Investment Act does not include a revenue generator, but instead authorizes for appropriations $2 billion a year to improve and enhance multimodal freight infrastructure. Reichert introduced H.R. 3398 as companion legislation to a proposal put forward earlier in the year by Senator Cantwell (D-WA).

Much of the Cantwell/Reichert multimodal policy provisions were incorporated into the Senate’s DRIVE Act, meaning H.R. 3398 is a logical place to start when considering possible House freight titles. The requirement that the Secretary of Transportation designate a National Multimodal Freight Network and develop a National Multimodal Freight Strategic Plan

Freight Strategic Plan can be traced back to Cantwell’s bill. The DRIVE Act also ties freight funding to a requirement that states develop state freight plans and freight advisory committees, as proposed by Senator Cantwell and Representative Reichert.

There seems to be a good chance that multimodal freight policy provisions will be included in the House long-term bill. A bigger question is whether there will be much needed funding. In order to support freight projects nationwide, the House must identify a revenue source, as well as decide how to best distribute funds.

Representative Reichert’s proposal authorizes funds from appropriations. MAP-21 authors took that approach in 2012, when they authorized the megaprojects competitive grant program, Projects and National and Regional Significance (PNRS). Ultimately, appropriators chose to keep PNRS unfunded. If the House settles on a similar path this year, freight funding could fall by the wayside as appropriators focus limited funds on other priorities.

There are several ways House bill authors could avoid the contentious appropriations process. Representatives could take a cue from Congressman Lowenthal’s bill and explore a one percent fee on the cost of transporting goods. They could also model freight investment programs after those that appear in the Senate bill.

The DRIVE Act contains a freight formula program and a competitive grant program—the Assistance for Major Projects Program—modeled after MAP-21’s PNRS. Both of these distribution mechanisms are funded with contract authority from the Highway Trust Fund.

Contract authority allows entities to make targeted improvements in infrastructure with funding that is firewalled from appropriators. Because funds come from the Highway Trust Fund, projects looking for support must demonstrate benefits to the movement of freight on highways.

To address multimodal projects, the DRIVE Act authorizes $200 million from appropriations for a separate Assistance for Freight Projects program. Of course, this program will face the same challenges as PNRS did in the aftermath of MAP-21.

Blakey & Agnew, LLC is a public affairs and communications consulting firm based in Washington, DC.