newsworthy
Yes, Virginia, there is a Highway Bill
For the first time since 2005, the United States has a federal
transportation bill whose duration is measured in years
rather than months.
On June 29, Congress approved legislation funding infrastructure programs for the next 27 months at a tab of about
$120 billion. The bill, which President Obama was expected to sign into law during the July 4 holiday week, ends
nearly three years of short-term funding extensions that
began in September 2009, when the last multiyear funding
law—which ran for four years—expired.
The legislation does not raise motor fuel excise taxes to
pay for infrastructure improvements, leaves intact the size
and weight limits for trucks operating on
the nation’s interstates, and greatly
increases the size of a surety bond that
property brokers must post to cover
legitimate claims by truckers of late payment or nonpayment for their services.
The bill establishes what is being called
a “National Freight Policy” that will lead
to the creation of a national freight network and a national freight strategic plan.
The bill also calls for an increased share of funding for road
freight projects and provides incentives to states to fund projects that improve freight movement within their borders.
The bill also requires that all revenues deposited in the
Harbor Maintenance Trust Fund be fully spent to pay for federally mandated operation and maintenance of the nation’s
ports. Port interests have long complained that taxes paid by
shippers into the fund have not been dedicated to their
express purpose of improving the nation’s port infrastructure.
In a blow to shippers and truckers, the bill does not raise the
size or weight limits for trucks plying the nation’s interstate
highways. Instead, it directs the Department of Transportation
to study the impact of bigger and heavier vehicles on the
nation’s infrastructure. That study must be completed no later
than two years from the bill’s enactment date.
Lawmakers declined to raise the federal tax on diesel and
gasoline, keeping those taxes at 1993 levels of 24. 4 cents a
gallon for diesel and 18. 4 cents a gallon for gasoline. Taxes
will remain at these levels until at least Sept. 30, 2015.
Revenue from fuel taxes, which is deposited in the
Highway Trust Fund, is the primary source of funding for
surface transportation projects. However, in the past few
years, funding shortfalls have forced Congress to divert about
$35 billion from various general treasury accounts to the
trust fund. Among the reasons for those shortfalls are
increased fuel efficiency and a decline in miles traveled as the
recession dampened economic activity.
Mindful that the projected revenue from fuel taxes will
not be sufficient to pay for program investments over the
next 27 months, lawmakers took the extraordinary step of
authorizing an $18.8 billion transfer of funds from the general treasury to the trust fund. This “pre-funding” from the
general treasury is intended to ensure that all highway programs authorized during the next 27 months will be paid
for ahead of time and that the trust fund will not have to
look to Congress for additional funding streams later.
The bill deals a tough hand to many small to mid-sized
property brokers. In language that may have a profound
impact on that industry, conferees agreed to raise the surety bond brokers must post to pay legitimate claims by carriers to $75,000 from $10,000. The original Senate version
called for an increase to $100,000.
Independent broker interests, who
warned that such a large jump could force
as many as 80 percent of the nation’s
property brokers out of business, said
they could have compromised on a
$25,000 bond to adjust for inflation.
In addition, sources said that motor
carriers would be required to hold separate operating authority if they want to
broker freight. The bill also sets strict regulations on surety-bond companies and the way the bonds are administered,
the sources said.
The language was designed to address the grievances of
owner-operators, who have long complained that they
receive freight from brokers but are not paid in a timely
manner, or sometimes are not paid at all.
A WARM RECEPTION
Freight interests, who’ve long sought a better seat at the
multibillion dollar table, were, on balance, pleased with the
bill. The Coalition for America’s Gateways and Freight
Corridors, a private-public sector group of more than 60
organizations, said several of the bill’s provisions “place
unprecedented emphasis on freight movement and its
importance to the nation’s economy.” Jean Godwin, execu-
tive vice president of the American Association of Port
Authorities, said that while the bill “falls short of dedicating
needed funding specifically for freight projects, it does cre-
ate a framework upon which we can prioritize freight
mobility needs and address congestion and capacity
demands on America’s freight network going forward.”
“This legislation, while not all we could have hoped for as
an industry and as users of the highway system, makes
tremendous strides in the safety arena and puts down a
marker for future improvements to our nation’s freight
infrastructure,” said Bill Graves, president and CEO of the
American Trucking Associations. ;
