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September 29, 2016
prepared by CATHY CONNOR - DIRECTOR OF FEDERAL GOVERNMENT AFFAIRS
Despite warnings earlier this week of a potential government shutdown, Congress was able to negotiate compromises on several contentious issues and pass a ten-week Continuing Resolution (CR) in advance of the October 1 start of fiscal year 2017. The CR extends through December 9 and funds all federal government agencies at current FY'16 levels.
One of the main sticking points - funding for the Flint water crisis - was temporarily resolved when House leaders agreed to include funding in its version of the pending Water Resources authorization bill. With that issue resolved, Senate Democrats agreed to support the CR and the Senate passed it yesterday afternoon. The House followed suit last night. The President is expected to sign the CR today or tomorrow.
The House and Senate then both adjourned until after the November 8 elections. On November 15, Congress is scheduled to return to work in a "Lame Duck" session. While there are a number of pressing issues that Congress needs to work on then, the general sense is that little may be accomplished other than passing another CR into 2017 or possibly passing an omnibus FY'17 appropriations bill.
Before leaving town, the House also passed its version of the Corps of Engineers' Water Resources Development Act (WRDA). The Senate previously passed its version of the bill, but the bills won't be reconciled and finalized until after the election in the Lame Duck session. The two bills have significant differences, although now both bills include funding for the Flint water crisis. However, the House bill authorizes less Flint funding than the Senate bill. The House bill almost didn't pass because of Democrats' objection to a last minute change to the bill which eliminated language the engineering industry strongly supports regarding the mandatory drawdown of funding in the Harbor Maintenance Trust Fund.
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Congress is back in session following its summer recess, but it may not be in session for very long. With the presidential election heating up and the fight for control of the Senate very much in play, Members of Congress, particularly Senators, are anxious to get back home to campaign. The Senate was expected to stay in session until the first week in October, but may now leave town as early as the end of this week until after the November 8 elections.
Although there are a number of pressing issues still on the congressional agenda, the only "must-do" legislation is to pass a Continuing Resolution (CR) to keep the government open and funded as of the October 1 start of the new fiscal year. To date, none of the 12 federal agency FY'17 funding bills have been passed by Congress. There has been ongoing disagreement among different factions in Congress over the length of the CR with some wanting a short CR lasting only into the post-election Lame Duck session, while others prefer a CR extending into 2017 to allow the new President and the new Congress to pass their own spending priorities. The Senate is expected to vote on a CR lasting until December 9 tomorrow or Thursday. The CR is expected to be "clean" meaning it will not include any extraneous policy riders. The CR will fund federal agency programs at the FY'16 funding levels. The CR would then move to the House where many far right members are pushing for a CR into 2017. However, if the Senate opts to adjourn this week, that would leave the House with few options other than to agree to the Senate CR in order to avoid a government-wide shutdown on October 1.
Other pending legislation that Congress would like to complete before the elections, but may not be able to, includes the annual defense authorization bill, expiring tax extenders, a comprehensive energy bill, WRDA authorization, and emergency funding to fight the Zika virus and for Louisiana flood relief.
Earlier this year, the respective House and Senate authorizing committees passed separate versions of the biennial Water Resources Development Act (WRDA) which funds Corps of Engineers' navigation, dredging, environmental restoration, and flood control construction projects. The Senate worked last week and this week to pass its WRDA bill (S. 2848) on the Senate floor. The bill authorizes almost $8B in funding for over 30 new projects and seven project modifications. A vote on final passage is expected to occur tomorrow or Thursday and the bill is expected to pass.
However, the House does not have a schedule to bring its version of the bill to the floor. The House and Senate versions vary significantly, with the Senate bill expanding on the traditional Corps issues to address EPA Clean Water and Safe Drinking Water Act programs, as well as authorize controversial funding to assist with the Flint, Michigan water crisis. If the House is able to pass its bill before it recesses for the election, the two bills can hopefully be reconciled and finalized in the post-election Lame Duck session.
US DOT has announced the award of several FAST Act-authorized competitive grant programs and other appropriated grant awards. Two other FAST Act competitive grant programs have not yet been awarded - $20M in Transit Oriented Development (TOD) Planning Grants and $60M in Advanced Transportation and Congestion Management Technologies Deployment Grants (ATCMTD). Both sets of grants are expected to be announced in the next few weeks.
FTA Bus and Bus Facilities Grants - on September 8, FTA announced the award of nearly $211M in FY'16 grants to 61 projects in 41 states and territories to replace, rehabilitate, and purchase transit buses and related equipment and to design and construct bus-related facilities such as maintenance and storage facilities and transit and intermodal centers. Here is a link to the list of selected projects. Demand exceeded available funds with FTA receiving 284 applications totaling $1.64B.
FHWA Surface Transportation System Funding Alternatives (STSFA) - on August 30, FHWA announced the recipients of $14.2M in FY'16 grants to seven state DOTs under a new FAST Act program to explore alternative user-based revenue mechanisms to provide long-term solvency for the Highway Trust Fund. Here is a link to the list of selected projects. The eight projects (two in Oregon) will study various options to implement Road User Charges/VMT/Mileage Based User Fee programs.
FRA Railroad Safety Infrastructure Improvements Grants - on September 12, FRA announced the award of $25M in FY'16 funding for safety upgrades at railroad crossings and stations. Twenty-three projects in 14 states and DC received grants out of 40 eligible applications requesting $67.5M. Here is a link to the list of selected projects.
FRA Positive Train Control (PTC) Implementation Grants - on August 16, FRA announced the award of $25M in grants for 11 projects in six states and DC to assist in implementing PTC. FRA received 30 eligible applications requesting $90.6M. Here is a link to the list of selected projects. PTC systems are designed to prevent train-to-train collisions and derailments. Congress extended the original PTC implementation deadline from December 2015 to December 31, 2018.
Legislation is expected to be introduced shortly in the House to lift the cap on Private Activity Bonds (PABs) for highway and freight projects from the current $15B to $20.8B. Reps. Eddie Bernie Johnson (D-TX) and Richard Hanna (R-NY) will co-sponsor the House bill.
PABs are tax-exempt bonds issued by or on behalf of local and state governments as a tool to assist with the financing of Public Private Partnership (P3) projects. PABs help lower the cost of capital for investments in P3s. A large percentage of projects using TIFIA credit assistance use PABs to help fill any financing gaps.
While Congress does not intend to pass major tax legislation this year, the hope is to set the stage for inclusion of this legislation in a comprehensive tax reform bill that Congress is expected to move in 2017.
WSP | Parsons Brinckerhoff is working along with various industry groups to support this legislation and identify co-sponsors
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Congress is currently on its annual summer recess until after Labor Day. However, life goes on in DC with several key announcements made recently by US DOT and the Administration on competitive grants, regulations, and policy developments.
Before Congress adjourned it passed another short-term authorization of FAA programs - although this time a much lengthier one extending through September 30, 2017. In addition, rather than being a "clean" extension, the bill includes a number of policy provisions primarily related to aviation safety and security. The extension does not include an increase in funding for the construction-related Airport Improvement Program (AIP). Here is a link to the bill text and a summary of the policy provisions.
Although both the House and Senate committees of jurisdiction have completed action on their respective versions of a Water Resources Development Act (WRDA) reauthorization which funds Corps of Engineers projects, neither bill has been able to get floor time. With Congress in session for only four weeks in September before recessing again until after the November elections, it will be difficult to finalize this legislation. The hope is to set a precedent of passing WRDA bills every two years. In the absence of a final authorization bill, Corps' water programs will still be funded through the annual appropriations process.
Another infrastructure related bill which may not be completed prior to the November elections is the comprehensive energy reform bill currently pending in conference.
The FY'17 appropriations bills, arguably the most important legislation, are highly unlikely to pass before the October 1 start of the new fiscal year. As in most prior years, Congress will have to pass a short-term Continuing Resolution (CR) in order to keep funding flowing to federal agencies. Typically CRs provide funding at current levels. This is not a problem for those highway and transit programs funded through the Highway Trust Fund because the funding levels authorized in the FAST Act are the same for both FY'16 and FY'17. The more significant impact of a CR will potentially be on programs funded with General Funds such as Amtrak, FTA Capital Improvement Grants (CIGs), and TIGER.
The big question is what the length of the CR will be. Some are pushing for a short CR lasting through December with the hope that Congress can complete some or all of the individual agency funding bills during the post-election Lame Duck session - perhaps packaged together in a series of "mini-bus" bills. Others want to extend the CR into next spring so that the new Administration can get settled in and establish its own funding priorities. Still others have suggested doing a year-long CR.
Congress is expected to meet in a Lame Duck session after the November elections, but until the results of the election are known and it is clear which party will control the Senate, it is very difficult to speculate on what might be accomplished during this short session. Any legislation which is not signed into law by the time the 114th Congress concludes in late December is dead.
US DOT has announced the recipients of several major competitive grant programs including the popular TIGER program and the new FAST Act-authorized FASTLANE freight program as well as the FTA Low-No bus grants. An announcement of the FTA Bus and Bus Facilities grants and the FY'16 Positive Train Control (PTC) grants for commuter rail are expected any day now.
On July 29, US DOT announced nearly $500M in 40 TIGER grants to 32 states and two US territories. Here is a link to the US DOT announcement and a link to information about each of the projects selected. This is the 8th round of TIGER grants. Demand for the 2016 TIGER grant program continued to far exceed available funds. DOT received 585 eligible applications requesting over $9.3B in funding. During the previous seven rounds, the Department received more than 7,300 applications requesting more than $143B for transportation projects across the country and provided a combined $5.1B to 421 projects. Of the 40 grant recipients this year, nearly two-thirds are repeat applicants.
On July 6, US DOT announced the new FAST Act authorized FY'16 FASTLANE grants. Here is a link to a list of the 18 projects which were awarded a total of $759M in funding and a link to more detailed information on the projects. The largest grant awarded was $165M for the I-95 Corridor Atlantic Gateway. The Department received 212 applications requesting over $9.8B in funding. The FAST Act authorized $4.5B over five years for nationally significant freight and highway projects, including up to $500M over the life of the program for ports, rail, and intermodal facilities. This round of grants includes $173.4M for intermodal projects - approximately 35% of the total grants. The law gives Congress 60 days to pass a resolution of disapproval for any of the selected projects. Once the 60-day notification period ends, DOT can begin signing grant agreements and providing funds to the selected agencies.
On July 26, FTA announced the Section 5339(c) Low or No Emission Bus grants. Here is a link to the announcement and a list of grantees. Twenty transit providers in 13 states will receive a share of $55M for transit buses and related technology that replaces aging diesel fuel buses with battery-electric or fuel cell-powered vehicles and incorporates other innovations.
Although the recipients of the FY'16 PTC grants have not yet been announced, on July 28 FTA/FRA have issued a Notice of Funding Opportunity for FY'17 PTC grants. The FAST ACt authorized $199M in one-time grants for commuter railroads to implement PTC. These applications are due on September 28. Here is a link to more information.
The White House Council on Environmental Quality has released final guidance on considering climate change in environmental reviews under the National Environmental Policy Act. Here is a link to the White House fact sheet and a link to the Final Guidance. According to the fact sheet, the final guidance provides a level of predictability and certainty by outlining how Federal agencies can describe these impacts by quantifying greenhouse gas emissions when conducting NEPA reviews. This will allow decision makers and the public to more fully understand the potential climate impacts of all proposed Federal actions, and in turn, assist agencies in comparing alternatives and considering measures to mitigate the impacts of climate change.
FTA has issued a final rule requiring FTA grantees to develop management plans for their public transportation assets, including vehicles, facilities, equipment, and other infrastructure. The Transit Asset Management (TAM) final rule asks transit agencies to develop a strategic approach to maintain and improve capital assets. Every FTA-supported transit provider will be required to inventory and assess the conditions of their assets, develop priorities for investment based on the inventory, and establish performance targets. The rule, established under MAP-21 legislation, is intended to close the gap on aging and poorly maintained transit assets. Along with the final rule, FTA released two proposed TAM guidebooks that detail the methods for transit agencies in measuring and reporting conditions of guideways and administrative, maintenance, and passenger facilities to the National Transit Database. The guidebooks were released for a 60-day public comment period. FTA will host a multi-part webinar series between Tuesday, July 26 and Thursday, August 18 to provide technical assistance to the transit industry on how to implement the rule. Here is a link to the TAM final rule in the July 26 Federal Register, a link to supplemental information about the rule including fact sheets and FAQs, a link to the webinar series and a link to general information about the TAM program.
On July 20, US DOT Secretary Foxx hosted a grand opening event for the Department's new Build America Bureau. The Bureau was created and authorized in the FAST Act. It combines the existing TIFIA, RRIF, and PAB financing programs as well as the existing Build America Transportation Investment Center (BATIC), and the new FASTLANE competitive grant program. Here is a link to the US DOT press release. The goal is to provide a single entity in charge of all DOT credit, large scale, and intermodal project development, and a single point of contact for working with DOT on infrastructure finance and development.
FHWA has created a new freight-related resources webpage which includes infographics with statistics on how freight improves the economy as well as various freight publications and resources. Here is a link to the page.
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Congress is on recess now through the July 4th holiday. After they return, Congress will only be in session a few days until July 15 when they will recess for the two party conventions and the traditional August break. When Congress reconvenes after Labor Day, there will be a short session until October 1 after which Congress will not return until following the November elections. This leaves a very limited amount of time for Congress to complete "must do" bills and other priority legislation. As a result, many issues are falling by the wayside and others will simply be extended into next year.
It appears now that Congress will not be able to complete most, or perhaps any, of the FY'17 federal agency funding bills, including the THUD appropriations bill which funds US DOT programs, by the start of the new fiscal year on October 1. Efforts by various members in both bodies to try to attach highly controversial and often unrelated amendments to the funding bills have caused the process to grind to a halt. A Continuing Resolution (CR) which funds programs at current levels is almost inevitable. The big question is how long the CR might last - into the post-election Lame Duck session, into spring or summer of 2017, or even through the full fiscal year. In addition to the usual partisan politics of a very contentious presidential election year, controversial issues related to gun control, eradication of the zika virus, gay rights, and others are holding up orderly consideration and passage of key legislation.
On the infrastructure front, two important bills that had been expected to pass this year are currently in limbo - FAA authorization and Water Resources authorization. With the current short-term extension of the FAA authorization due to expire on July 15, it is clear that a long-term bill will not be passed this year. No progress has been made on Chairman Shuster's controversial proposal to privatize the air traffic control (ATC) system. House and Senate staff are working to draft another short-term extension which will likely last into 2017 and perhaps even extend through a full year. Unlike most short-term authorization extensions which are "clean", efforts are underway to include some policy provisions in the bill. These could include provisions on TSA security reforms, drones, and establishing a special panel to study the issue of ATC privatization, among others.
The bi-annual Water Resources Development Act (WRDA) which funds Corps' of Engineers projects is usually a bi-partisan effort with limited controversies. The House and Senate authorizing committees quickly and easily passed companion WRDA bills (HR 5303 and S. 2848) this spring, but neither bill has been able to get floor time. It now appears likely that this bill may slip until after the election or into next year. Fortunately, there is no immediate impact on funding for the Corps. This week, 29 Republican Senators signed a letter to the leadership calling for floor time for the WRDA bill before the summer recess.
Also stalled is a comprehensive energy reform bill, which has passed both the House and Senate, but negotiations to resolve the differences in the two bills have bogged down.
On May 31, FHWA/FTA published the Final Rule on Statewide and Nonmetropolitan Transportation Planning and Metropolitan Transportation Planning in the Federal Register. Here is a link to the rulemaking. The final rule is the sixth in a series of rules that FHWA and FTA are issuing to establish the performance management framework introduced by MAP-21 and continued by the FAST Act. The rule implements certain planning and environmental provisions of MAP-21 and the FAST Act changes to the transportation planning process, including:
On June 6, US DOT published the Interim National Multimodal Freight Network (NMFN) in the Federal Register as required by the FAST Act. Here is a link to the notice and a link to the map. Public comments are due by September 6 in order to receive consideration by DOT with respect to the final NMFN. The final NMFN will be designated by December 4, 2016. Once finalized, the NMFN will be used to assist states in strategically directing resources towards improved system performance for the efficient movement of freight, inform freight transportation planning, assist in the prioritization of Federal investment, and assess and support Federal investments to achieve national multimodal freight policy goals and national highway freight program goals outlined in the FAST Act.
On June 8, the Senate Commerce, Science & Transportation Committee held a hearing on implementation of the FAST Act. The Committee has jurisdiction over the rail and safety provisions in the bill. US DOT Secretary Anthony Foxx was the sole witness. Here is a link to information about the hearing including Chairman Thune's (R-SD) opening statement, Foxx's testimony, and a video of the hearing.
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Congress continues to make progress on various legislation, including the annual federal agency FY'17 appropriations bills; however, with the lengthy summer and fall recesses looming, there are a limited number of days left before the November elections to complete its work.
The full Senate approved its version of the FY'17 THUD (US DOT) FY'17 appropriations bill on May 19 by a vote of 89 to 8. Here is a link to the text of the Senate bill and a link to the committee report.
On Tuesday, May 17, the House THUD Subcommittee released and approved its version of the US DOT FY'17 Appropriations bill. Here is a link to the House Subcommittee-approved bill and a link to the committee report. Full Committee action is scheduled for May 24. Floor debate will likely have to wait until after the Memorial Day recess.
Like the Senate, the House proposes to fully fund all Highway Trust Fund (HTF) supported programs, such as the federal highway program and transit formula grants, at the same amounts authorized in the FAST Act. The House provided more money than the Senate for transit discretionary Capital Improvement Grants (CIG). The House provided less money for TIGER grants - only $450M versus the Senate's $525M, but given that the House has typically zeroed out or provided very limited funds for TIGER, the $450M is a step forward.
|Program||Current FY'16 Funding||FAST Act Authorization for FY'17||Senate-Passed FY'17 Funding||House THUD Subcomte. FY'17 Funding|
|Core Highway Program - Obligation Limit||$42.36B||$43.26B||$43.26B||$43.26B|
|Transit Formula and Bus Grants||$9.35B||$9.73B||$9.73B||$9.73B|
|Transit CIG-New Starts, Small Starts, Core Capacity||$2.17B||$2.30B||$2.33B||$2.5B|
|Amtrak Northeast Corridor||NA - Total Amtrak Funding $1.39B||$474M||$345M||$420M|
|Amtrak National Network||NA||$1.02B||$1.07B||$1.0B|
|FRA Rail Discretionary Grants Total - see below||$0||$350M||$85M||$50M|
|Airport Improvement Grants (AIP)||$3.35B||NA||$3.35B||$3.35B|
FTA Capital Improvement Grants-
|Program||Current FY'16 Funding||FY'17 Senate Passed||FY'17 House THUD Subcomte.|
|New Starts w/Existing FFGAs||$1.25B||$1.2B||$1.2B|
|New Proposed FFGAs||$497M||$511M||$500M|
|Expedited Delivery Program||$5M||$20M||TBD|
The House bill includes language prohibiting any new FFGAs with a federal cost share of over 50%.
FRA Discretionary Rail Grants-
|Program||FAST ACT FY'17 Authorized||FY'17 Senate Passed||FY'17 House Subcommittee|
|Consolidated Rail Infrastructure and Safety Improvement (CRISI)||$190M||$50M||$25M|
|State of Good Repair (SOGR)||$140M||$20M||$25M|
Last week, US DOT announced that it has received 212 applications totaling nearing $9.8B for grants for the newly-created FAST Act FASTLANES freight discretionary program. Of the applications received by the April 14 deadline, 136 represent projects in urban areas and 76 represent projects in rural areas. The FAST Act authorized $800M for this program in FY'17. Grant announcements are expected to be made this summer.
There has been no public action on reauthorization of FAA programs ever since the full Senate passed an 18-month (FY'16 and FY'17) authorization on April 19. The House T&I Committee approved a six-year FAA bill, H.R. 4441, earlier this year that, in a highly controversial move, would take the air traffic control (ATC) system out of FAA and transfer it to a nonprofit corporation. Opposition to the ATC provision has prevented the bill from moving to the House floor. There has been no further action by the House to date. The current short-term extension of FAA programs expires on July 15.
On April 28, the Senate Environment and Public Works Committee (EPW) approved its version of the Water Resources Development Act (WRDA) of 2016 by a vote of 19 to 1. Here is a link to the text of the bill (S.2848) and a link to a 20 page section-by-section summary. The bill has not yet moved to the Senate floor. The House T&I Committee has scheduled a markup of its version of the WRDA bill for May 25. The WRDA bill is one that Congress has indicated it plans to complete before the November elections.
The Chairman and Ranking Member of the House T&I Subcommittee on Highway and Transit, Reps. Sam Graves (R-MO) and Eleanor Holmes Norton (D-DC), are circulating a letter to the bi-partisan leadership of the House Ways & Means Committee urging them to make "a permanent solution to the Highway Trust Fund's structural revenue deficit a priority in any tax reform proposal". Industry groups are working to get as many House members as possible to sign the letter. The Committee may introduce a comprehensive tax reform bill as early as June, although serious action is not likely until 2017. Here is a link to the draft letter. Over 100 House members have signed the letter to date.
Last week, as part of Infrastructure Week, the Eno Center for Transportation released a new report entitled "Delivering the Goods: Recommendations for Funding a Federal Freight Program" which was developed by its Freight Working Group. Here is a link to the report. The report recommends that in the short-term Congress should appropriate general fund revenues of at least $2B per year for a national multi-modal freight discretionary grant program. In the long-term, it recommends Congress authorize the implementation of a "cost of freight shipment" (COFS) fee dedicated to such a program.