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Happy New Year 2016

We want to wish everyone a very happy and prosperous new year, and hope to see you again in 2016 at conferences or here in Washington.  The Congress has been very busy at the end of this year and proud of the fact it accomplished the passage of major highway and education bills that had lingered on the congressional agenda for months, and also approved a tax break and spending package, avoiding a government shutdown.   Appears that Congress is working again.  As Speaker Ryan recently was quoted. “We passed more major legislation in a few weeks than we have in a few years.” See my other recent blog post for details of the recent legislation that broke the congressional deadlock. new years 2016

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NEW HIGHWAY BILL BREAKS THE DEADLOCK

Tribal roads 4After contentious negotiations the Congress passed a 5 year fully funded Transportation Bill, boosting spending on roads and transit systems by billions each year.   The “FAST ACT” is an over $305 billion bill.  It increases spending on highways by 2.1 $billion the first year above current levels.  By the final year 2020 the bump is $6.1 billion above the $50 billion in recent years.
The FAST ACT provides a significant percentage increase in monies on highway funding.  And it has protected funding for Transit Systems, that some wanted out from the bill, and also gives increases for pedestrian and bicycle programs and $200 million for rail safety.
The Senate and the House initially had different funding provisions.  The Conference Committee settled primarily on House plan to use money that The Federal Reserve Bank uses as a cushion against losses and a Senate proposal to reduce the amount of interest the Federal Reserve pays to Banks.
This bill ended the era of short term extensions that has been the order of the day for the last 10 years.  The bill triples the amount the National Highway Safety Administration can impose in civil fines, and continues the popular Transportation Infrastructure Finance Act program.  And, it re-authorized the Export Import Bank that allowed loans to foreign companies purchasing US goods.
While this Bill is a landmark moment for Congress that is considered a do nothing body, it still failed once again to find a renewable source of cash for the nation’s transportation needs.  Because the need to get from place to place in our country stands alone to the degree it touches everyone young and old – it is a goal that transcends political parties.  Thus the compromise on the Bill by the Conference Committee was touted as a bi-partisan success.   But the failure to fund a long-term way to pay for transportation reveals the party politics differences.
Dividing Lines:  The issues that divided the parties;
  1. Should money be found through user taxes like the gas tax or by taxing the number of miles driven?
  2. Can long term funding be found by bringing home billions of dollars in taxable income that corporations have stashed off shore?
  3. Should there be a turn away from a transportation only funding source such as a gas tax and instead toward using income and other taxes?
  4. Should money to pay for transit systems come from revenue collected mostly from drivers who pay taxes?  Should tax collected from the same fee user fees be spent on bike and pedestrian needs?
These are all proven to be thorny political issues.   A key reason that the House opted not to raise the gas tax even though a gas tax had broad support from the Chamber of Commerce, Automobile Association, Labor Unions and Trucking was that many House members pledged to NEVER raise taxes on anything.   And another key belief held by the far right wing or Tea Party Coalition was that the Federal Government should be less involved in Transportation.   Instead they want the issue left to the states and give localities the right to prioritize Transit programs or pedestrian projects.  Some States believe that would eliminate some costs imposed by Federal regulations and then the States would be free to spend their own money on their own priorities.
Dual Taxation in Indian Country:
This debate over the power of States or the Federal Government to control funding for Transportation echo’s the debate today in Indian Country over Dual Taxation.  Right now many of us in Washington are looking at how to use the revision of the Indian Trader Regulations to stop dual Taxation of Tribal Governments.  State governments provide few services on Indian Reservations, but still impose taxes on severance of nature resources, retail sales, and increasingly on property such as wind generation facilities. Tribal governments are then forces to collect state taxes and if they impose a tribal government tax, then the resulting dual taxation drives business away.  The dilemma means Tribes collect no taxes and suffer inadequate roads, schools, police, courts and health care.  We raise the Dual Taxation issue that is currently being debated in Indian Country as a possible source of revenue for Tribal roads and other infrastructure needs, to highlight, that now is the time to pay attention to the how the overall funding for transportation is resolved in Congress.  This may be the right political time, for Tribes to seek a solution to prevent dual taxation by States, and provide Tribes more tax jurisdiction to supplement their own transportation funding needs.   The new Transportation bill includes provisions to promote development of alternatives to the 18.4 cent gas tax, which as you know is not enough to pay for National or Tribal Transportation costs.
The Bottom-line:
It was reported that Senator Boxer (D-CA) and Senator Inhofe (R-OK) worked closely to get the job done on the Transportation bill.   Boxer said it was such a “bruising process” it was motivating to finding a permanent solution.   Because Transportation is such a high priority for both Parties she believes they will “figure it out”.
The bottom-line the FAST ACT moved fast out of the Senate.  In one day the bill got out of the House and Senate with a vote of 83 to 16 in the Senate and 359 to 65 in the House.  In the House Chairman Shuster and Ranking member DeFazio worked through hundreds of amendments, requiring staff to work on the bill through Thanksgiving weekend.  The FAST ACT was a breakthrough in partisan politics and deadlock.  But much still needs to be done for adequate long term funding for Transportation.
FAST ACT PROVISIONS THAT INCREASED FUNDING OR IMPACTED TRIBAL TRANSPORTATION
  •   Tribal Transportation Program funding is increased each year.
  •   $465 million in FY 2016 and $10 million per year increases to $505 million in FY   2020 (Sec. 1101(a)(3).
  •  The USDOT tribal self-governance program is a new provision (Sec. 1121),    there will be a negotiated rule-making for this new program.
  •  The Tribal Transit program is increased from $30 million to $35 million per year (with $30 million for the formula component of the Tribal Transit Program and $5 million for the discretionary competitive transit grant program under section 5311(c)(1) of title 49 (Sec. 3007(a)(1)(A) and (B) and 3016).
  •  A new $100 million per year grant program is established for “nationally significant” Federal Lands and tribal transportation projects (Sec. 1123).
  • The Project Management and Oversight (PM&O) “takedown” for the BIA and FHWA is reduced from 6% to 5% (Sec. 1118).
  • The Tribal Transportation Bridge Program takedown is increased from 2% to 3% (Sec. 1118).
  • Provides tribal data collection reporting regarding the expenditure of Tribal Transportation Program funds under Section 202 of title 23 to the Secretary of the Interior (Sec. 1117(a)).
  • Directs the Secretary of the Department of Transportation to report to Congress, after consulting with the Secretary of the Interior, the Secretary of DHHS, the Attorney General and Indian tribes, describing the quality of transportation safety data collected by States, counties, and tribes for transportation safety systems to improve the collection and sharing of data regarding crashes on Indian reservations (Sec. 1117(b)).
  • Requires the Secretary of Transportation, after consultation with the Secretary of the Interior, the AG, States and Indian tribes, to provide a report to Congress within two years of enactment of the FAST Act that identifies and evaluates options to improve safety on public roads on Indian reservations (Sec. 1117(c)).

Senate Committee on Environment and Public Works asks for more Money for the Tribal Transportation Program

Tribal roads 4In a markup hearing this morning, the EPW unanimously approved the “Developing a Reliable and Innovative Vision for the Economy Act” (“DRIVE”). The bill proposes a six-year plan to address the transportation funding crisis and associated infrastructure shortfalls. Chairman Inhofe stated that the progression of the bill hinges on the elimination of red tape and redundancies that prevent large scale projects from being realized in a timely manner.

Although not discussed during today’s proceedings, the Act as it is currently written includes adjustments to the Tribal Transportation Program which would allocate more money for transportation projects on tribal land. The adjustments would set aside $460,000,000 for the 2016 fiscal year and would increase by $10,000,000 each consecutive FY up to $510,000,000 by 2021. The DRIVE Act also creates a “Nationally Significant Federal Lands and Tribal Projects Program” which would set aside funding for construction or maintenance projects sponsored by eligible Federal land management agencies or Indian tribes. Other amendments to Title 23 include a provision making tribal transportation facilities projects eligible for emergency assistance; also, the administrative expenses are expected to be cut from 6 percent to 5 percent while increasing the potential amount set aside for tribal transportation facilities bridges from 2 percent to 3 percent for each FY.

With just under forty days until the current highway program extension expires, the committee stressed the importance of continued bipartisan cooperation to ensure the creation of viable sources of revenue for the Act.

Click to view the hearing Webcast

Below are excerpts from the DRIVE Act that impact Tribal transportation funds. The excerpts may be truncated.

 Title I—Federal-Aid Highways

Subtitle A—Authorizations and Programs

 Sec. 1001. Tribal Transportation Program.—

For the tribal transportation program under section 202 of title 23, United States Code—

(a)(3)(A)

  • $470,000,000 for fiscal year 2017;
  • $480,000,000 for fiscal year 2018;
  • $490,000,000 for fiscal year 2019;
  • $500,000,000 for fiscal year 2020; and
  • $510,000,000 for fiscal year 2021.

Sec. 1022. Emergency Relief for Federally Owned Roads.

  • —Section 125(d)(3) of title 23, United States Code, is amended—
  • in subparagraph (A), by striking “or” at the end;
  • in subparagraph (B), by striking the period at the end and inserting “; or”; and
  • by adding at the end of the following:

“(C) projects eligible for assistance under this section located on tribal transportation facilities, Federal lands transportation facilities, or other federally owned roads that are open to public travel (as defined in subsection (e)(1)).”.

Sec. 1026. Tribal Transportation Program Amendment.

Section 202 of title 23, United States Code, is amended—

  • in section (a)(6), by striking “6 percent” and inserting “5 percent”; and
  • in subsection (d)(2), in the matter preceding subparagraph (A) by striking “2 percent” and inserting “3 percent”.

Sec. 1027. Nationally Significant Federal Lands and Tribal Projects Program.

  • —The Secretary shall establish a nationally significant Federal lands and tribal projects program (referred to in this section as the “program”) to provide funding to construct, reconstruct, or rehabilitate nationally significant Federal lands and tribal transportation projects.
  • Eligible Applicants.—
  • In General.—Except as provided in paragraph (2), entities eligible to receive funds under sections 201, 202, 203, and 204 of title 23, United States Code, may apply for funding under the program.
  • Special Rule.—A State, county, or unit of local government may only apply for funding under the program if sponsored by an eligible Federal land management agency or Indian tribe.
  • Eligible Projects.—An eligible project under the program shall be a single continuous project—
  • on a Federal lands transportation facility, a Federal lands access transportation facility, or a Tribal transportation facility (as those terms are defined in section 101 of title 23, United States Code), except that such facility is not required to be included on an inventory described in sections 202 or 203 of title 23, United States Code;
  • for which completion of activities required under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) has been demonstrated through—
  • a record of decision with respect to the project;
  • a finding that the project has no significant impact; or
  • a determination that the project is categorically excluded; and
  • having an estimated cost, based on the results of preliminary engineering, equal to or exceeding $25,000,000, with priority consideration given to projects with an estimated cost equal to or exceeding $50,000,000.
  • Eligible Activities.—
  • In General—Subject to paragraph (2), an eligible applicant receiving funds under the program may only use the funds for construction, reconstruction, and rehabilitation activities.
  • Applications
  • Selection Criteria.—In selecting a project to receive funds under the program, the Secretary shall consider the extent to which the project—
  • furthers the goals of the Department, including state of good repair, environmental sustainability, economic competitiveness, quality of life, and safety;
  • improves the condition of critical multimodal transportation facilities;
  • needs construction, reconstruction, or rehabilitation;
  • is included in or eligible for inclusion in the National Register of Historic Places;
  • enhances environmental ecosystems;
  • uses new technologies and innovations that enhance the efficiency of the project;
  • is supported by funds, other than the funds received under the program, to construct, maintain, and operate the facility;
  • spans 2 or more States; and
  • serves land owned by multiple Federal agencies or Indian tribes.

Subtitle B—Data

 Sec. 2101. Tribal Data Collection.

Section 201(c)(6) of title 23, United States Code, is amended by adding at the end the following:

“(C) Tribal Data Collection.—In addition to the data to be collected under subparagraph (A), not later than 90 days after the end of each fiscal year, any entity carrying out a project under the tribal transportation program under section 202 shall submit to the Secretary and the Secretary of the Interior, based on obligations and expenditures under the tribal transportation program during the preceding fiscal year, the following data:

“(i) The names of projects or activities carried out by the entity under the tribal transportation program during the preceding fiscal year.

“(ii) A description of the projects or activities identified under clause (i).

“(iii) The current status of the projects or activities identified under clause (i).

“(iv) An estimate of the number of jobs created and the number of jobs retained by the projects or activities identified under clause (i).”.

Title VI—Extension of Federal-Aid Highway Programs

 Sec. 6001. Extension of Federal-Aid Highway Programs.

(c) Tribal High Priority Projects Program.–

Section 1123(h)(1) of MAP-21 (23 U.S.C. 202 note; Public Law 112-141) is amended—

  • by striking “$24,986,301” and inserting “$30,000,000”; and

by striking “July 31, 2015” and inserting “September 30, 2015″.

Click here for The DRIVE Act and Committee Summary

Senate Environment and Public Works Committee Expected to Mark-up Highway Bill by Late June

The Senate passed late in May a two month extension of the highway funding bill by voice vote, avoiding an abrupt halt in infrastructure spending and pushing off a debate over how to finance road construction in the long term.   This vote came on top of a hectic week as politicians struggled to compromise on President Obama’s trade agenda and surveillance programs.   The vote extending the decision on the highway bill and trust fund avoided a deal on how to finance a longer term highway policy.  The Transportation Department said that with the extension, the trust fund had enough money to last until the middle of the summer.

So while the highway bill was the least contentious of the issues debated that week, leadership on both sides agree that finding the $15 billion at least needed a year for a 6 year highway bill will not be easy.  But Republicans are expected to push for a short term funding extension till the end of the year, which would make for a count of some two dozen extensions over the past 12 years.  However, Democrats are strongly opposed to another other short term fix.

Not surprisingly The Senate Environmental and Public Works Committee is expected to mark up a six year highway policy bill in late June, putting pressure on the finance committee to come up with the funding.   Both parties have suggested tax reform as a solution.  President Obama released a plan this year that would tax offshore income at 14 percent rate, and use the revenue to replenish the highway fund.   But it is uncertain, if there is enough revenue from offshore profits to both fund highways, and still cut corporate tax rates as both Obama and Senate Republicans want to do.  Many obstacles are facing tax reform, such as a small business lobby’s push to block any tax reform deal that doesn’t cut tax rates for individuals.  Other lobbies have pushed for a corporate tax holiday to help fund roads, but it is anyone guess how much traction any of these proposals will gain.

Bottom-line, there will be a push for a short term extension till the end of the year of the Highway trust fund, but the Democrats are adamant that Republicans need to make highways a larger priority and will fight hard against anymore short term funding extensions.   Meanwhile we can expect to see a mark-up on the re authorization or highway policy bill by the end June.  At the least, this mark will reveal the level of spending that lawmakers will push for highways, and whether programs such as Tribal Transportation can expect increases in funding or changes in policy.

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