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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

WASHINGTON UPDATE: What will happen in the New Congress

The Spending Bill:

 The House of Representatives passed a spending bill, on a vote of 206 to 219.  At the time Tribal Conferences were being held in Las Vegas, the week of Dec. 9, the bill was in the Senate awaiting vote.  The Senate, since has passed the spending bill just a few hours before midnight on Saturday Dec. 13, 2014 and avoided a Government Shutdown.  The vote was 56 to 40 assuring the government would remain funded until September 15, 2015.

Senator Elizabeth Warren of Mass. objected to the roll back of Wall Street reforms that would allow for risky investments that could again lead to bail outs of the banks. Another poison pill objected to by Democrats was the increase in election campaign contributions jumping from 90 million to over 300,000 million in allowable soft money.  But the bill was considered a compromise for both parties, and the President will receive full spending on all but one agency, Homeland Security, to postpone the immigration debate until February.

 The bottom line, the liberal wing of the Democratic Party and the conservative wing of the Republican Party were disappointed.  The result however, is the President did receive extra funding for Ebola research and to fight ISIS, and full funding of agencies that are implementing the Affordable Care Act.

On the elections, the tables have turn in the Senate:  The new republican majority isn’t likely to play nice, and payback will likely be the name of the game.  The vote count, in the Senate, Republicans now control with 54, and the Dems 44, with 2 Independents.

In the House, a sharper turn to the right, House leaders will have to navigate a larger GOP caucus ripe with fresh hard-liners ready to oppose them.  The vote count, Reps control a bigger majority with 244 and the Dems 184 and 7 are not yet called.

 On the issues, Speaker Boehner has complained about the conservatives in his caucus as “knuckleheads” but has expressed confidence to keep his caucus together.  He has said that tax reform and a big Highway bill are doable.   He has put fixing the tax code as a priority to improve the economy, although most say big reform is too ambitious for a divided republican caucus.

 The House will push for their jobs bills that died in the Senate and for the keystone pipeline.  And they will fight for repeal of the medial device tax in Obama Care.  And it is predicted that more stalemate will occur on the budget and debt ceiling issues that will come up in the new congress.   A budget resolution is due in March or April, but it is likely to see continuing resolutions and there will be intense debates on the debt ceiling to increase government borrowing.   It is predicted that Republican leadership will continue to struggle to get consensus as some try to force cuts to shut down immigration reform or Obama Care Programs.

 In the Senate with a new majority and Mitch McConnell in charge the President and the Democratic Caucus will feel payback.  Republicans have said they are going after health care, financial services, and EPA.  So the chances of a grand bargain on the Tax Code are slim and soon there will be political maneuvering of the 2016 Presidential Contest.  They predict a narrow window next year to get things done.

 On Committee’s:  In the House, retirements, term limits and election results yield new dynamics.  On Transportation, Shuster remains as Chair, and looks like for Dems because Rahall from West Va lost, that Peter Defazio will be ranking from Oregon.  Natural Resources with departure of Doc Hasting , Bob Bishp of Utah will be Chair.  Hanabusa lost her fight for Senate so not sure as of yet the ranking member of Resources.

 On Ways and Means, Paul Ryan is taking over for Camp.  Ryan did support this fall Camp’s proposal for funneling in the one-time windfall from over hauling corporate taxes into infrastructure.   The administration has called this transitional funding for Transportation falling out of Tax reform.  On Agriculture, Conway of Texas replaces Lucas as Chairman.  Appropriations Rogers of Kentucky remains as Chair, and Lowry of NY as ranking member.  Budget is Price as Chairman. On Energy, Upton is Chair and Pallone won the fight over Democrat Eshoo for ranking member who was favored by Pelosi.

 In the Senate the new majority means a real changing of the guard is occurring.  On Commerce Science and Transportation John Thune of SD replacing Jay Rockefeller as Chair.  Senator Boxer is senior and is likely to hold ranking member.  On Environmental and Public Works that decides the tribal transportation formula, Senator Inhofe of Oklahoma will Chair.   And Senator Bill Nelson the Ranking member on Commerce.

On Energy Murkowski of Alaska will chair with Maria Cantwell as Ranking.  On Finance, Senator Orin Hatch will Chair, Appropriations Thad Cochran will Chair, and Milkulski of MD is ranking.  On Armed Service McCain will Chair and Reed of RI will be ranking.  On Budget Senator Enzi of Wyoming, and on Banking Senator Shelby of Alabama will Chair.  Senator Barrasso will Chair the Senate Indian Affairs Committee.  It is still very dynamic and not all Chairmanships have been announced.

 What will happen with Transportation and the re-authorization bill and trust fund, and the now May 15th deadline?

 Chairman Shuster has vowed not to do short term funding and has proposed a six year measure.  Paul Ryan has proposed funding through the Tax Code.  And the administration has also said that through Tax reforms what they refer to as Transitional funding would allow for increases in the Highway Trust fund.  But the reforms to the Tax code are not likely to look the same from opposing parties.

 Recently at a Department of Transportation listening session the Deputy Secretary commented that he believes a compromise would be possible and that funding could be increased by a onetime infusion of 150 billion as part of the Grow American Act introduced by the President. Right now the Highway Trust Fund is short by 167 Billion.  So there is a scramble to find new funding.

The Grow America Act introduced by the Administration, is a 4 year authorization of Transportation, both sides want an authorization bill that is longer term.   And Speaker Boehner has said that he believes a big Highway Bill is doable in the new congress.  But can they meet the May deadline and whether it is possible to get a tax code revision in time to add money into the Highway Trust fund is the question.

The president’s proposal is funded by supplementing current revenue with $150 billion in one time infusion of  ‘Transition’ revenue.  So from addressing the 1 to 2 trillion of un-taxed foreign earnings that US companies have accumulated overseas and from reforming accumulated depreciation–this one time savings from a transition to new business tax system could help pay for the proposed transportation budget.

 Paul Ryan has also expressed support for the former Ways and Means Chairman Camp’s proposed windfall from tax reform for infrastructure funding.  Thus it appears that there is the political will from both the Republicans and the White House to use tax reform to pour money into infrastructure.

 The bottom-line: Both parties will have to work together to get major measures through congress, but there does appear to be political will on both sides to pass a longer term authorization bill and to find new funding for the Highway Trust Fund through tax reform.

 Read The Year According to Rep. Tom Cole

Transportation Reauthorization: A Priority for Congress

Momentum is building in Washington towards the important Transportation reauthorization bill to replace the current bill set to expire in November.  Last week, President Obama urged Congress to pass a four-year $302 billion package, instead of the usual two-year bill for surface transportation.  President Obama also announced $600 million dollars in a new round of competitive Transportation Investment Generating Economic Recovery (TIGER) grants, that will select projects that better connect communities to jobs, training and economic opportunity, including improving access to opportunity in rural communities.  In addition, this 2014 round of TIGER grants can allocate up to $35 million in planning grants to facilitate development of innovative or regional transportation solutions.  The application period for this round of TIGER grants is fast approaching, with submissions due by April 28, 2014, and Department of Transportation (DOT) Webinars on preparing applications starting March 12, 2014.

 

In the weeks leading up to President Obama’s transportation announcements, several other events brought together key players in the transportation reauthorization process and reinforced the broad consensus that the nations’ economic health will depend upon Congress finding common ground to pass a comprehensive bill well in advance of the November 1st deadline.  The Senate Committee on Environment and Public Works (EPW) held a hearing that drew testimony from the largest national trade associations, who all emphasized the critical need for federal funding for the nation’s highways and transportation systems upon which interstate commerce relies.  A new Congressional Budget Office (CBO) report moved up to this summer its estimate of when the federal Highway Trust Fund (HTF) will become insolvent, preventing investments in long-term transportation projects and hampering state and local governments in continuing to fund current projects.  The urgency of the need to address sustainable long-term transportation investment was further reinforced by a DOT Conditions and Performance report released February 28, 2014.  EPW Committee Chairwoman Barbara Boxer (D-CA) wants a transportation reauthorization bill drafted by April so it can be passed before the Congressional August recess leading into the mid-term election cycle.

 

Certain to be a central issue in the transportation debate and negotiations is how to shore up the HTF, which plays an important role in the funding process.  At issue will be whether to increase, and by how much, the federal fuels and diesel per gallon taxes.  Potentially further complicating the debate is the recent tax reform proposal put forth by Chairman of the House Ways and Means Committee, Dave Camp (R-MI), which would dedicate additional funding streams to the HTF to supplement the user fee taxes currently in place.  Although, Bill Shuster (R-PA), Chairman of the Committee on Transportation and Infrastructure has noted the value for long-term transportation planning of such an increase in dedicated funding for the HTF and reiterated his commitment to Congressional action on a transportation bill this year, the broader and controversial implications of Rep. Camp’s tax reform proposal may be divisive.

 

Recognizing the importance of a unified voice in the fast moving reauthorization process, a Tribal Transportation Reauthorization Unity Summit was held last week in Denver, CO to develop consensus priorities and strategies for Indian Country to advance during the reauthorization process.  Specific recommendations include increasing funding for the Tribal Transportation Program up to $1.05 billion by 2020 and increasing both the discretionary and formula funding for the Tribal Transit Programs, while ensuring existing Tribal Transit Programs formula funding is not reduced.  The Unity Summit priorities also identify restoring Highway Trust Fund allocation for the Tribal High Priority Projects Program, establishing a Tribal Asset Management Program to maintain existing transportation facilities, separate funding for the TTP Tribal Bridge Program, and establishing a $75,000 minimum TTP allocation for all tribes.

 

The Resolution passed during the Unity Conference highlighted the disparity that despite the fact that 3% of national infrastructure roads are within Indian Country, only 1% of federal transportation dollars are allocated for Indian Country.  To address this disparity, other consensus objectives from the Unity Conference include establishing set aside funding formulas for highway safety programs aimed to decrease high rates of fatalities and injuries on tribal transportation systems, as well as ensuring that tribes are eligible for all other streams of transportation funding and enhancing tribal self-governance as to transportation infrastructure.  Conference attendees also put forth an innovative proposal to establish a Tribal Infrastructure Bank with guaranteed minimum capitalization to provide low interest loans for tribal transportation projects.

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