NARC HEALS Act Summary

Senate Majority Leader Mitch McConnell (R-KY) took to the Senate floor last week to introduce the HEALS Act, the Senate Republicans’ plan for a coronavirus relief package that would follow up the CARES Act passed earlier this year. “Our nation stands now at an important crossroads in this battle,” McConnell said. “We have one foot in the pandemic and one foot in the recovery. The American people need more help. They need it to be comprehensive. And they need it to be carefully tailored to this crossroads.”

The HEALS Act, an acronym that stands for Health, Economic Assistance, Liability Protection and Schools, would extend and modify several CARES Act provisions as well as provide new support for areas of critical need. The plan comes with a price tag around $1 trillion, noticeably smaller than the $3 trillion HEROES Act proposal passed by the House back in May.

Structurally, the plan is a composite of several different pieces of legislation, each targeting a different priority area, including unemployment benefits, liability protection, Paycheck Protection Program (PPP) continuation, funding for schools, and the development of “Rescue Committees,” among others. Below are links to the text of the individual bills that make up the HEALS Act plan:

The HEALS Act notably does not provide additional aid for state and local governments. However, it would provide some flexibility for previously allocated CARES Act dollars, allowing these funds to be spent past the original December 30, 2020 deadline and expanding allowable uses of relief payments to include lost revenue.

NARC will continue to advocate for regional priorities in upcoming coronavirus legislation. Most recently, NARC joined with local partners at the Association of Metropolitan Planning Organizations (AMPO) and the National Association of Development Organizations (NADO) on a letter urging congressional leaders to include local transportation funding needs in upcoming COVID-19 relief legislation. The full letter can be read here.

Below is a bill-by-bill summary highlighting the most significant items in each piece of the HEALS Act plan:

The American Workers, Families, And Employers Assistance Act

Key items: Unemployment extension, stimulus checks, and state and local funding flexibility

This bill, sponsored by Senate Finance Committee Chair Chuck Grassley (R-IA), would extend the current unemployment supplement provided by the CARES Act but at a lower benefit level. The bill would reduce the previous $600-per-week supplement down to $200 per week while states work on implementing a new supplement system that would be calculated to provide workers with no more than 70% of their previous wages.

The bill would also provide another round of stimulus checks in a manner like those distributed following the CARES Act. Those with incomes under $75,000 per year would receive a $1,200 direct payment and couples making less than $150,000 per year would receive a $2,400 payment. Additionally, those with dependents would receive $500 for each dependent regardless of that dependent’s age. Payments for those with higher incomes would be reduced, with payments phasing out for those making more than $99,000 as individuals and $198,000 as couples. Phaseouts would be set higher for those with dependents.

The bill would also provide some flexibility for state and local governments to spend previously allocated funds provided through the $150 billion Coronavirus Relief Fund (CRF) in the CARES Act. The HEALS Act does not provide additional aid for state and local governments.The provisions for increased flexibility of CRF funds include extending the date for these funds to be spent from December 30, 2020 to 90 days after the last day of the governments’ fiscal year 2021 as well as expanding allowable uses of relief payments to include lost revenue (up to 25% of their CRF allocation.)

For more information, check out the full text of the bill as well as the section-by-section summary.

The Safeguarding America’s Frontline Employees To Offer Work Opportunities Required To Kickstart The Economy Act (SAFE TO WORK Act)

Key item: Liability protections

This bill, led by Senator John Cornyn (R-TX), would provide businesses, schools, and healthcare providers that follow certain guidelines with a five-year liability shield against lawsuits regarding coronavirus. Republicans have indicated that they view liability protections as a critical inclusion in the next aid package while Democrats have voiced opposition on the grounds that this type of measure prioritizes protection for employers and corporations.

For more information, check out the bill text.

Continuing Small Business Recovery and Paycheck Protection Program Act

Key item: PPP continuation

Senate Committee on Small Business and Entrepreneurship Chairman Marco Rubio (R-FL) and Senator Susan Collins (R-ME) have introduced the Continuing Small Business Recovery and Paycheck Protection Program Act, which would permit some small businesses to receive another round of forgivable Paycheck Protection Program loans. The bill would streamline the forgiveness process and would create a $60 billion working capital fund for the hardest hit businesses.

For more information, check out the bill’s full text and its section-by-section summary.

Safely Back to School and Back to Work Act 

Key item: Funding for schools and childcare

This bill from Senate Health and Education Committee Chairman Lamar Alexander (R-TN) would offer relief for some student loan borrowers (although it would not provide an extension for the student loan deferral provided by the CARES Act). Senator Alexander’s proposal also provides additional funding for schools and childcare providers including $105 billion for schools, $15 billion for childcare, $16 billion for testing, and $40 billion for vaccines and other health research. A section-by-section summary of the proposal can be found here.

Time to Rescue United States’ Trusts (TRUST) Act

Key item: Creation of Rescue Committees

This part of the HEALS Act comes from a bill that was initially proposed in 2019 by Senator Mitt Romney (R-UT) and is now being resurrected with some minor changes. The legislation would create “Rescue Committees” to research changes needed to ensure the solvency of government trust funds with outlays greater than $20 billion, including those for highways, Medicare hospital insurance, Social Security Disability Insurance, and Social Security Old-Age and Survivors Insurance.

A note on the Highway Trust Fund: Since the Highway Trust Fund has more than $20 billion in outlays it would be a recipient of a “rescue committee.” The bipartisan committee would be comprised of 12 members of the House and Senate and would work to create a strategy and accompanying legislation to put the trust fund on a path to solvency by June 1, 2021.

A one pager of the legislation is available here, text of the legislation is available here, and a section-by-section of the legislation is available here.

The Coronavirus Response Additional Supplemental Appropriations Act, 2020

Key item: Funding for a range of health and economic aid programs

Senate Appropriations Chairman Richard Shelby (R-AL) sponsored this $306 billion spending proposal that would allocate funds for a variety of federal agencies and programs. There is some overlap between this funding proposal and some of the other elements of the HEALS Act plan, such as the $105 billion in funding for elementary, secondary, and post-secondary education.

Below are some of the largest funding recipients as well as other items of note for regions:

  • $105 billion for elementary, secondary and post-secondary education
  • $16 billion for COVID-19 testing
  • $25 billion for hospitals
  • $15 billion for childcare, including $5 billion through the Child Care and Development Block Grant (CCDBG) and $10 billion in a new flexible grant program
  • $10 billion for airports
  • $1.5 billion for the Low-Income Home Energy Assistance Program (LIHEAP), which is administered by county governments in 13 states
  • $2.2 billion for Tenant-Based Rental Assistance (Section 8 vouchers)

The Restoring Critical Supply Chains and Intellectual Property Act

Key item: Support for domestic PPP production

Senator Lindsey Graham (R-SC) introduced this proposal, which aims to move personal protection equipment (PPE) production to the United States from China using a $7.5 billion tax credit.

For more information read the full text of the bill.

Supporting America’s Restaurant Workers Act

Key item: Business meal tax deduction increase

This bill proposed by Senator Tim Scott (R-SC) would increase the tax deduction for business meals from 50% to 100%.

The bill’s full text can be found here.

Further Reading

For more reading on HEALS Act provisions regarding local government, check out the following resources from NARC and other local government partners:

Water Resources Development Act (WRDA) Update

Congress has managed to hold to a two-year reauthorization schedule for the last three Water Resource Development Acts (2014, 2016, and 2018) and it looks like they are on track to increase that streak to four this year. This past Wednesday, the House Transportation & Infrastructure Committee voted unanimously to move H.R. 7575 The Water Resources Development Act of 2020 (WRDA 2020) out of committee. The bill is now headed to the House floor.

WRDA bills provide authority for the U.S Army Corps of Engineers (USACE) to conduct projects and studies. They have historically included (or been packaged with bills including) other water-related provisions such as drinking water programs and water infrastructure funding mechanisms.

This year’s House WRDA bill would provide around $8.6 billion in funding for 34 USACE projects. This is notably more than five times as many projects as were approved by WRDA 2018. The bill would authorize 35 new USACE studies and calls for 41 ongoing studies to be expedited. In addition to project authorizations, the bill includes three other significant provisions shared more in detail below:

Harbor Maintenance Trust Fund “Unlocked”

The House bill would “unlock” $10 billion in funds held in the Harbor Maintenance Trust Fund (HMTF), allowing that money to be spent on dredging and port projects. This has been a longtime aim of Transportation & Infrastructure Committee Chairman Peter DeFazio (D-OR). HMTF funds were partially unlocked earlier this year in the CARES Act, but annual expenditures from the fund were capped at the amount of the previous year’s HMTF revenue. WRDA 2020 would expand on this by allowing access to additional funds from the existing HMTF balance.

Inland Waterways Trust Fund Cost Share Reduced

WRDA 2020 would reduce the share drawn from the Inland Waterways Trust Fund to 35% from the current 50% for lock and dam projects on rivers. This would increase the Treasury’s general fund cost share for these projects from 50% to 65%. Theoretically this reduction of trust fund spending will allow trust fund dollars to fund more projects. This change notably is not permanent and would apply only to projects beginning before the end of 2027.

An Increasing Focus on Resilience and Environmental Justice

This year’s WRDA is crafted with an increasing focus on disaster resilience and consideration of communities impacted by flooding and other water-related dangers. Of the 34 projects approved for USACE work, seven are for flood management and two others are for flood reduction with ecosystem restoration components. The bill also reaffirms a commitment to using natural and nature-based solutions and authorizing projects and studies for communities facing repetitive flooding events. The bill also includes PFAS provisions, increases minority community and tribal input on projects, and aims to address affordability issues for disadvantaged communities.

What’s Happening in the Senate?

The Senate’s 2020 WRDA proposal has been voted through the Senate Environment and Public Works Committee but has not yet received a floor vote. The Senate’s proposal comprises two bills: one for USACE entitled America’s Water Infrastructure Act (AWIA) of 2020, and another for drinking-water authorizations and provisions called the Drinking Water Act of 2020. The Senate proposal, like the House bill, was developed using a bipartisan approach and has broad support on both sides of the aisle.

What’s Next for WRDA?

With bipartisan proposals already out of committee in the House and Senate and plenty of pressure to stick to the two-year authorization cycle, the outlook looks bright for WRDA 2020. As broader infrastructure packages like the Moving Forward Act remain mired in partisan debate, WRDA presents an opportunity for Republicans and Democrats to find common ground on infrastructure investment. Expect to hear more on WRDA once Congress returns from their August recess.

For further reading, check out the House bill text, fact sheet, and section-by-section summary; the Senate AWIA text, fact sheet, and section-by-section summary; and the Senate Drinking Water Act text and section-by-section summary.

Summer Federal Appropriations Update

As we approach the dog days of summer, the federal appropriations process is finally heating up. This follows several months of being on hold as Congress tried to address the growing coronavirus pandemic, the staggering drop in unemployment, and cries for action regarding racial injustice and police brutality.

With Election Day less than four months away, several critical questions remain. Will Congress finish its consideration of all twelve appropriations bills before the September 30th fiscal year (FY) 2021 deadline? What are the chances of a continuing resolution and what length will it be? And what impact will the election results have on how the appropriation process plays out? We will consider these questions and more below.

What is happening in the House?

After months on hold because of the focus on coronavirus and police reform packages, the House is now pushing through their appropriations markups at lightning speed. The full Committee passed their FY 2021 302(b) subcommittee allocations last week along with five appropriations bills: Agriculture-Rural Development-FDA, Interior-Environment, Military Construction-VA, Legislative Branch, and State-Foreign Operations. The Committee wrapped up their consideration and approval of the remaining seven bills this week: Commerce-Justice-Science, Defense, Energy-Water Development, Financial Services-General Government, Homeland Security, Labor-HHS-Education, Transportation-HUD.

Initial reports are saying that Agriculture-Rural Development-FDA, Interior-Environment, Military Construction-VA, and State-Foreign Operations bills will be combined into a minibus package and considered on the floor late next week. House Majority Leader Steny Hoyer (D-MD) indicated that he wants the House to approve all twelve bills on the floor by the end of July. However, the Homeland Security bill might be held back because of concerns from progressive Democrats about funding levels for customs and border protection and immigrations and customs enforcement.

It is worth noting that these bills will probably be passed mostly or entirely along party lines. Since the Senate must reach a 60-vote threshold to end debate on appropriations bills, whereas the House only needs a majority vote, the Senate has to forge bills that are more bipartisan. This means that these more partisan House bills are likely to sit and not be taken up by the upper chamber for serious consideration.

What is happening in the Senate?

Unlike in the House, crickets can be heard in the Senate Appropriations Committee. The Committee has held just two hearings since March, and both were on issues unrelated to the FY 2021 appropriations process.

It was reported several weeks ago that partisan disagreements on police reform and COVID-19 spending is to blame for the delay of Senate appropriation bill markups. Ranking Member Patrick Leahy (D-VT), noting that offering amendments was a key concern for Democrats, said “There is bipartisan agreement that we need to address the COVID-19 pandemic. And if we want to truly address the issues of racial injustice that George Floyd’s tragic death has brought to the surface… we need to appropriate money for programs that advance these issues.” Committee Republicans, led by Chairman Richard Shelby (R-AL), felt that these issues should be addressed outside of the appropriations process.

Markup notices for their appropriations bills were reportedly postponed due to these disagreements. While it is very likely that most of their bills are already drafted, we probably will not see any markups until the Committee leadership can agree to move forward in a bipartisan way.

What is going to happen next?

There is one thing that is all but guaranteed: there will be a continuing resolution (CR) to keep the federal government open past the September 30th deadline. Between the upcoming August recess and the desire of members to be home to campaign for competitive races, there are not a lot of congressional workdays left on the calendar.

This continuing resolution will likely be a short-term, stopgap solution just to get Congress through the FY 2021 deadline and election season. Although a specific date is hard to determine, it would likely extend current federal funding levels to at least early to mid-December.

The election outcome is also likely to influence how the federal appropriations wraps up. History tells us that during an election year, lawmakers are likely to hold an average of seven appropriations bills over until the next calendar year. They say to the victor goes the spoils – as well as the incentive to shape the final bills once the winning party takes control. If the Democrats win the presidency and/or the Senate, we can certainly expect them to punt the bills into 2021 when they will have more influence over the process.  

Stay tuned to eRegions, Transportation Thursdays and the Regions Lead blog for the latest federal appropriations updates.

Read the NARC NADO and AMPO Request to Congressional Leaders for STBGP Funding in Next COVID-19 Aid Package

Read the NARC NADO and AMPO Request to Congressional Leaders for STBGP Funding in Next COVID-19 Aid Package

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Each and every day we are learning of more and more COVID-19 cases. On Friday, the Centers for Disease Control and Prevention (CDC) announced individuals in 20 states have been infected by the COVID-19 virus.
 
California and Washington State have declared states of emergency as increasing numbers of their residents become sick. King County, Washington leaders have urged at-risk residents to stay home and away from large groups of people. The Los Angeles County Board of Supervisors and the Department of Public Health have declared a local and public health emergency in response to the increased spread of coronavirus across the Los Angeles region. And increasing numbers of cases in the Boston area are leading metropolitan Boston and Commonwealth officials to monitor closely the spread of the virus.
 
The National Association of Regional Councils (NARC) invites you to join a webinar on Wednesday, March 11, from 3:00 to 4:00 p.m. eastern that will examine the role that regional councils can play in addressing the COVID-19 epidemic. Leaders from the Puget Sound Regional Council (Seattle), Metropolitan Area Planning Council (Boston), and Washington Metropolitan Council of Governments (COG) will discuss how they are responding to the COVID-19 epidemic and the role regional councils are playing in efforts to contain the virus.

States and Regions are Exploring the Transition from Gas Taxes to Per-Mile Charges

“Every week is
infrastructure week!”

That is the running joke
in Washington, DC as Congress and the administration have been hard at work
formulating a comprehensive infrastructure package since President Trump’s
inauguration in January of 2017. The Trump Administration, House, and Senate
have all released different funding priorities for a Fixing America’s
Surface Transportation (FAST)
reauthorization bill, which is set to expire
in September.

Trump’s $1 trillion infrastructure plan , the $760 billion House infrastructure plan, and the $287 billion Senate Highway bill (S.2302) all take different approaches to  providing funding to improve the dire transportation and infrastructure situation in the United States, but none offers a plan for how the legislation will be funded. The political near-impossibility of a gas tax increase has led some to consider new funding structures, including charging drivers for the miles they drive rather than the amount of fuel they consume. This approach, referred to as a vehicle miles traveled (VMT) tax, a road user charge (RUC), or a mile-based user fee (MBUF), is being considered by states as a supplement or a replacement for current per-gallon fuel charges.

As the funding debate plays out at the federal level several states have already implemented pilot or voluntary programs that charge users an annual flat fee to owners of cars using alternative fuels. The National Conference of State Legislatures (NCSL) has collected data and information from various per-mile programs across the country. Below is a map that the Oregon DOT compiled indicating which states have completed RUC pilots, which states are considering or planning RUC pilots, and which states are actively monitoring the topic either via their department of transportation, state legislature or another agency.

NCSL has also gathered information on regional efforts and RUC coalition groups. Two regional groups of states, RUC West and the I-95 Corridor Coalition, have coordinated efforts and resources around RUC issues to leverage resources for educational opportunities and to focus funding efforts. Membership for both coalitions are below:

Significant concerns
remain over issues such as privacy, how the fee would be collected and how
efficient that collection would be, and concerns about the federal government’s
capacity to roll-out a national program. Either program would require passenger
vehicles to be tracked, whether through odometer reading, radio-frequency
identification (RFID) readers, or onboard devices. Depending on the tax or fee
structure, the time and location in addition to miles traveled may need to be
captured. The idea that every location and mile traveled in your personal
vehicle being tracked, recorded, and captured by the federal government may be
unsettling for some.

These concerns will have
to be addressed before a nationwide program becomes a political possibility,
but regions and states are taking the lead in testing this important new
technology. Below are four states that showcase different approaches to
per-mile charges:

Oregon: Road Usage Charge Program – OReGO

Oregon began its RUC
journey in 2017 and is now the only state with a permanent RUC program. Oregon
drivers are highly encouraged to enroll in the state’s RUC program called OReGO.
A typical electric or high-mpg vehicle driver pays two to four years’ worth of
registration fees in advance when purchasing a car or renewing their
registration. Oregon House Bill 2017,
or “Keep Oregon Moving,” will be making increases to these fees in
2022 and 2023 to respond to expected increases in vehicle performance. This
could lead to a combined up-front registration fee of hundreds of dollars. If
these same drivers enroll in OReGO instead they would not have to pay these
registration fee increases. They would only pay the base registration of $43
per year plus the road charge of 1.8 cents per mile.

Utah Road Usage Charge Program

The Utah Department of Transportation
(UDOT) began work on implementing their RUC in 2018 when two laws passed
through the state legislature (SB 136 -2018 and SB 72 -2019) directing
UDOT to implement a RUC process by 2020. SB 72 fiscal note appropriated
$755,000 for the program’s initial setup and an additional $115,000 each year
for employee operations. It is unclear when this funding will stop, but UDOT
anticipates that RUC revenues will begin to fund the program by 2025.  In addition, the state received a $1.25
million federal grant from the Federal Highway Administration’s Surface
Transportation System Funding Alternatives (STSFA) Program for a study on the
program’s success over the next five years. Users will be charged 1.5 cents per
mile driven until the accumulated total matches the annual flat fee. In 2020,
the flat fee for electric vehicles will be $90. This is significantly less than
the $187 average annual state gas tax payments vehicle owners paid in Utah in
2019.

California Road Charge

The California State
Transportation Agency (CalSTA) managed a road charge pilot program through the
California Department of Transportation (Caltrans) by working closely with the
California Transportation Commission, the Road Charge Technical Advisory
Committee (TAC), and additional external stakeholders throughout California.
From July 2016 through March 2017, 5,000 vehicles statewide reported in excess
of 37 million miles, according to the program’s full report. California’s now
completed road charge pilot program was a voluntary effort that relied heavily
on Oregon’s experience. Unlike Oregon’s program, this pilot was conceptual in
nature and no actual financial transactions took place.

Washington Road Usage Charge Pilot
Project

In December 2019, the
Washington State Transportation Commission (WSTC) released  recommendations on how Washington can begin a gradual
transition away from the state gas tax and toward a road usage charge system.
The commission based its recommendations on extensive research, statewide
public engagement and a detailed analysis of participant feedback and system
performance of the 12-month Washington Road Usage Charge Pilot Project. The
adopted recommendations were transmitted to the Washington State Legislature,
Governor Jay Inslee and the Federal Highway Administration last month.

House Democrats Release “Moving Forward Framework”

House Democrats Release “Moving Forward Framework”

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House Democrats today released a framework for infrastructure investments (“Moving Forward Framework”) that includes transportation reauthorization, broadband, aviation, wastewater, and drinking water. The total investment contained in the package is $760 billion over five years (see the chart at the bottom for a breakdown of how these funds are distributed by program).

Regarding transportation reauthorization, today’s framework does not contain much detail but provides broad outlines of what to expect when the full reauthorization bill is released in a couple of months. Thematically, the framework focuses on state of good repair, fossil fuels and carbon emissions, and resilience. There is also a lengthy session that contemplates how the legislation will revamp many of the existing core formula programs (see pages 3-4 of the framework document). It is within this section that the most relevant changes may occur for transportation planning and project implementation.

A couple of examples:

  • Expands Local Control – Expands decision-making over Federal funds to other levels of government and provides additional authority to metropolitan planning organizations that demonstrate the capacity to administer Federal funds. Amends the suballocation process to ensure mid-sized communities receive a portion of program funds.
  • Modernizes Project Planning – Requires States and MPOs to prioritize transportation access and to consider during the planning process all system users, job access, connections to housing, and creation of transportation options in underserved communities.


Other relevant sections of interest to regions focus on greater investment in regionally-significant projects; alternative fuel infrastructure; and transit and rail investments. Outside of the transportation section, there is focus on broadband deployment, increased water resources projects through the Army Corps of Engineers, clean water resources, and brownfields.

Whether this will move as one large package or separated into pieces is unclear at this time, as is the timing and, perhaps most importantly, funding. House Speaker Nancy Pelosi (D-CA) indicated today that action will not happen in the very near term, and T&I committee staff yesterday indicated it will be at least March before we see a reauthorization bill draft released. Though this was released as a Democrat-only proposal, it is hopeful to note that T&I Committee Republicans issued a release indicating their willingness to work together on getting a package done.

Resources:

Total Investment Levels

Transportation and Infrastructure Committee
Highway and Transit Programs $434B

  • Transformative Highway Investments $319B
  • Transformative Transit Investments $105B
  • Transformative Safety Investments $10B

Rail Transportation $55B

  • Transformative Rail Investments $55B

Airport and Airway Infrastructure $30B

  • Transformative Airport Investments $30B

Harbor Maintenance Trust Fund $19.7B
Water Resources $10B

  • Transformative Water Resources Investments $7B
  • Transformative Inland Waterways Investments $3B

Clean Water $50.5B

  • Transformative Water Investments $47.1B
    • Clean Water State Revolving Funding Investment $40B
    • State Clean Water Compliance Assistance $1.5B
    • Clean Water Act Grant Program Investments $5.6B
  • Transformative Regional Investments $3.4B

Transportation and Infrastructure and Energy and Commerce Committees (joint jurisdiction)

Brownfields Restoration and Reinvestment $2.7B

Energy and Commerce Committee

Clean Drinking Water and Clean Energy $59.7B

  • Transformative Drinking Water Investments $25.4B
  • Transformative Clean Energy Investments $34.3B

Broadband and Communications $98B

  • Transformative Broadband Investments $86B
  • Public Safety Communications Investments $12B

Questions? Contact Erich Zimmermann at erich@narc.org or 202.618.5697.

The California Emissions Standards Situation and Regions

In July of this year, California and four major automakers, BMW, Ford, Honda, and Volkswagon, reached an agreement over a framework for setting Corporate Average Fuel Economy (CAFE) standards and vehicle greenhouse gas (GHG) emissions standards through the year 2026.

The framework was announced in anticipation of a Trump administration rollback of federal emissions standards set during the Obama administration.

The Obama-era standards require an average mileage of 54.5 miles per gallon for passenger vehicles by 2025, along with a year-over-year 4.7 percent reduction of greenhouse gas (GHG) emissions through 2025.

The rollback proposed by the Trump administration freezes model year 2020 CAFE and carbon dioxide emissions standards for passenger cars and light trucks through the year 2026.

The framework developed by California and the four automakers eases the Obama-era standards slightly, but rejects the freeze of the proposed rollback. The framework would drop average mileage standards from 54.5 by 2025 to 51 by 2026, and loosen GHG reduction standards from 4.7 percent over four years to 3.7 percent over five years

How California Sets Its Own Standards

The Clean Air Act provides the State of California with the
right to waive federal preemption regarding air pollution standards for vehicle
emissions. This waiver allows California to set stricter air emissions
standards than the federal government. The waiver, however, must be approved by
the Environmental Protection Agency (EPA).

Under Clean Air Act Section 209, the EPA is required to grant California a waiver
unless they find that:

  • California
    was arbitrary and capricious in its finding that its standards are, in the aggregate,
    at least as protective of public health and welfare as applicable federal
    standards;
  • California
    does not need such standards to meet compelling and extraordinary conditions;
    or
  • such
    standards and accompanying enforcement procedures are not consistent with
    Section202(a) of the Clean Air Act.

The Administration’s Reaction

Following the announcement of the framework, the Trump
administration began pushing back against California and the four automakers
through several actions:

September 6, 2019: DOT and EPA Write Letter to CARB Stating that the Framework May be Illegal

On September 6, the Department of Transportation (DOT) and the EPA wrote a letter to the California Air Resources Board (CARB), the state agency responsible for filing the waiver request with EPA. The letter states that the framework agreement between California and the automakers “appears to be inconsistent with Federal law.”

September 6, 2019: DOJ Opens Anti-Trust Probe Against Automakers

Also on September 6, it
was reported
that the Department of Justice would be opening an anti-trust
probe to determine if the four automakers involved in the framework had acted
lawfully.

September 19, 2019: EPA and NHTSA Announce One National Program Rule on Federal Preemption of State Fuel Economy Standards

On September 19, the DOT’s National Highway Traffic Safety Administration (NHTSA) and the EPA issued a final action establishing the One National Program rule that would ensure that the federal government sets one single fuel efficiency standard for the country. Along with this rule, EPA withdrew California’s Clean Air Act waiver that authorized the state to determine its own emissions standards.

September 24, 2019: EPA Threatens to Block California Highway Funding

On September 24, EPA Administrator Andrew Wheeler issued a letter to CARB Chair Mary Nichols warning that the state’s violation of Clean Air Act regulations could affect it’s highway funding. The letter notes that California has “failed to carry out its most basic tasks under the Clean Air Act” and has a backlog of 130 State Implementation Plans (SIPs), the plans which have to be developed to increase air quality for areas failing to attain National Ambient Air Quality Standards (NAAQS). The letter further states that if California does not work with the EPA to develop approvable SIPs, the EPA will begin a disapproval process which could result in a stoppage of DOT approvals for highway projects.[1]

California’s Response

September 20, 2019: California Files Lawsuit Along With 22 Other States

On September 20, California, along with 22 other states and the District of Columbia, filed a lawsuit against the NHTSA, the DOT division which withdrew California’s Clean Air Act waiver. According to the filing, the action “exceeds NHTSA’s authority, contravenes Congressional intent, and is arbitrary and capricious.”

Significance for Regions

Preemption

The repeal of California’s emissions standards waiver is federal preemption of the state’s authority to regulate vehicle emissions. Recent increases in federal preemption of state and local authority are a serious concern for local governments which need the authority to make decisions based on their region’s needs. The precedent that this exercise of preemption could set is notable and worrying.[2]

Air-Quality – Non-attainment Consequences

Many regional councils function as air-quality planners. In this role, they work to maintain NAAQS in their regions. Repealing California’s waiver and setting lower national emissions standards will result in increased emissions. This could make NAAQS more challenging for regions to attain and sustain.

NAAQS non-attainment can result in sanctions from the EPA, which affect approval of highway projects. (for an example of this, see the section titled “EPA Threatens to Block California Highway Funding” above).

Air-Quality – Public Health

Additionally, and critically, poor air quality presents a variety of direct threats to the health of a region’s residents, including serious heart and breathing problems.[3]

Climate Change

“Greenhouse gases trap heat and make the planet warmer,” according to the EPA’s Sources of Greenhouse Gas Emissions webpage. Furthermore, the EPA identifies the transportation sector as the primary source of greenhouse gas emissions.[4] In 2017, transportation accounted for 28.9% of overall U.S. greenhouse gas emissions. Within the transportation sector, passenger cars and light-duty trucks comprise the largest portion of emissions.

Increased global temperatures present many threats to the health and well-being of residents of regions across the United States. Consequently, the drivers of warming, like GHG emissions, should be mitigated. The EPA identifies several methods for accomplishing this. Among the primary methods, the EPA includes “improving fuel efficiency with advanced design, materials, and technologies,” a strategy that is supported by increasingly stringent standards, such as those included in California’s framework.


[1] As
ENO Transportation reports,
the letter cites
a section
of the Clean Air Amendments of 1990 which allows for the cutoff
of highway project approval, but not the cutoff of actual funding. The state or
region would still be able use funds for highway safety projects of mass
transit projects.

[2] In
this case, it should be noted that California’s proposed standards would be
more stringent than those set by the federal government.

[3] CDC Public Health Issues

[4] Inventory
of U.S. Greenhouse Gas Emissions and Sinks: 1990–2017 (published 2019)

What’s Next for the Senate EPW Committee’s Highway Title?

The push for transportation reauthorization has begun, with approximately 15 months before the current authorizing legislation – the FAST Act – expires. This early start to the process can be ascribed to two systemic challenges Congress faces in getting a final bill across the finish line. First, the transportation reauthorization is a complex piece of legislation, under the jurisdiction of four committees in the Senate and two in the House. It is also a large program with a fading source of revenue, which requires Congress to find a funding patch every time it enacts a new, long-term authorization. This time around, the gap between anticipated Highway Trust Fund revenues and desired spending levels is expected to be $100 billion or more, which needs to be transferred from general Treasury funds and somehow offset with new revenues or spending cuts.

The second systemic challenge Congress faces is a simple one of timing: voting for the 2020 Presidential election will take place just over a month after the current authorization expires. The politicking, of course, will begin much sooner. Neither side will want to hand the other a substantial victory too close to an election, and both sides could be wary of spending hundreds of billions of dollars (to say nothing of raising the federal fuels tax), unsure of how it will swing voters.

That brings us to the Senate Environment and Public Works (EPW) Committee’s proposed highway title (transit, rail, and other items will be added later by other committees), which is a five-year, $287 billion bill. As is often the case with transportation bills, there is much for both sides to point to as advancing their policy agendas. This is part of the reason it passed out of committee on a unanimous 21-0 vote. On one side is project permit streamlining, increases to the National Highway Performance Program, and rural-focused provisions regarding safety and bridge repair. On the other side is a new climate title, safety and funding provisions for bicycle and pedestrian projects, and a new program to combat congestion in the nation’s largest urban areas.

The EPW bill maintains the existing structure of the federal transportation program. This is, overall, a positive. There are only minor changes made to the law as it applies to planning and the Congestion Mitigation and Air Quality (CMAQ) program. One change we had advocated for was an increase in the portion of the Surface Transportation Block Grant Program (STBGP) that is provided directly to local areas through their metropolitan planning organizations (MPOs). Though this share will remain at 55%, we were pleased at changes to the Transportation Alternatives Program (TAP), including an increased share for local projects (57.5%, up from 50% presently) and broader eligibility to include MPOs in urbanized areas under 200,000 population. In addition, two new programs created in the EPW bill for resilience and safety require suballocation of funds and create incentives that would allow a portion of those funds to be used as STBGP funds if certain criteria are met.

A notable aspect of the EPW bill is the sheer number of new programs that it would create, covering a broad range of topics including wildlife crossings, bridge investments, safety, charging and alternatives fuel infrastructure, carbon reduction, congestion relief, resilience, and more. This is an interesting shift in approach, with the current FAST Act bill sticking mainly to the approach initiated in the MAP-21 authorization which consolidated the program from more than 100 programs to just a handful.

If you want to learn more about what the bill contains, NARC has prepared a number of resources that will be helpful, including a section-by-section analysis and a broader overview of some of the most relevant portions. In addition, NARC will be hosting a webinar on Tuesday, August 13 at 3:00 PM ET and you can register here.

As one Senator said during the committee discussion, the committee passage of this bill is the “end of the beginning” of the process. We’ll still need to see what the Senate Commerce and Banking committees develop for their portions of the bill, and that combined package will need to make it through the full Senate. The House Transportation and Infrastructure Committee is also likely to develop its own proposal, though it is unclear when it might release something. And the Senate Finance and House Ways and Means committees have perhaps the toughest job of all, which is coming up with a way to pay for the whole package.

More Uncertainty for Capital Investment Grants (CIG) in 2019 and 2020

Last Tuesday, the Federal Transit Administration (FTA) announced a $1.36 billion allocation of Capital Investment Grant (CIG) funding. The money, drawn from streams of both fiscal years (FY) 2018 and 2019 allocated funds, will be directed at 11 existing projects and 5 new projects.

The announcement arrives amid criticism that the FTA has been slow to release funds. Transit advocacy groups like Transportation for America are vocally campaigning to speed delivery of allocated funds, claiming the Administration is intentionally stalling delivery.

In addition to criticism of delays, advocates have larger existential concerns regarding the program. The president’s FY 2018 and FY 2019 budgets excluded funding for new CIG projects and indicated a desire by the Administration to wind down the entire program.

The president’s recently released  FY 2020 budget and the Federal Transit Authority FY 2020 CIG recommendations include a billion dollar overall cut to the program, but also provide $500 million for new projects, the first new project funding since FY 2017. The Administration has reached a fork in the road and appears to be trying to go both directions.

CIG Background

The CIG Program, overseen by FTA, funds transit capital investments under three primary grant programs: Small Starts, New Starts, and Core Capacity. More information on the three programs can be found here.

Congress most recently authorized CIG under the 2015 FAST Act at $2.3 billion annually for fiscal years 2016 through 2020. As a discretionary program, CIG is subject to the annual appropriations process.

CIG Within the FTA Budget

Since the signing of the FAST Act, CIG dollars have constituted approximately eighteen percent of the overall appropriations provided for the FTA. As shown in Table 1 below, the president’s FY 2020 budget proposes cutting CIG funding by $1 billion. If enacted, this cut would drop the CIG’s portion of overall FTA funding to approximately twelve percent.

Winding Down the Program?

The Administration recommended massive cuts of $1.2 billion for FY 2018 and $1.0 billion for FY 2019. Congress ultimately appropriated CIG funds for FY 2018 and FY 2019 at authorized levels, but the Administration’s signaling on the program was clear: stop funding new projects and phase out existing work.

The FY 2019 FTA Annual Report on Funding Recommendations spelled this out. “For the remaining projects in the CIG program, FTA is not requesting or recommending funding. Future investments in new transit projects would be funded by the localities that use and benefit from these localized projects.” (emphasis FTA)

After Congress appropriated full CIG funding for FY 2019, Director of the Office of Management and Budget Mick Mulvaney responded with a letter stating that “the Administration believes the additional resources provided …would be better utilized by being allocated to the State of Good Repair Formula Program.”*

*For added context on administration positions regarding CIG funding: the Obama Administration recommended $3.5 billion of funding in FY 2017. Appropriators did not, however, follow this recommendation and funded the program at $2.4 billion, near its authorization level.

Breaking Down CIG Appropriations

The president’s FY 2020 budget includes limited detail of how the total $1.505 billion of recommended funding will be distributed between the different CIG programs. The only detail provided is that $995.29 million of the funding will be used for 11 existing projects and $494.85 million will be used for new projects under the three primary grant programs as well as the recently developed Expedited Delivery Pilot Program.

How Will FTA Distribute the $500 Million for New Projects?

Prior to FY 2018, money allocated to new projects was distributed among specific projects named within the president’s budget. As funding for new projects was not written into FY 2018 and FY 2019 budgets, there was no need to name projects.

The president’s FY 2020 budget proposal provides new project money, but like the FY 2018 and FY 2019 budgets, does not specifically name new projects. This lack of project naming, as well as the complaints made about slow fund distribution, has resulted in changes to the CIG selection process.

Without a clear pipeline for selection and fund distribution, Congress chose to set deadlines by which CIG funds need to be allocated. While solving the problem of fund withholding, these new deadlines also created a side effect: the Administration now treats readiness as a top criterion for project selection.

Project Selection Criteria for CIG in FY 2020

FTA lists the following general guidelines for project selection:

  • Readiness of funding for CIG grant obligation by statutory deadlines;
    • Non-CIG funding committed,
    • Critical third party agreements complete,
    • Firm and final cost/scope/schedule,
    • Technical capacity of the project sponsor,
  • Geographic diversity of project for a national funding program;
  • Extent of overmatch proposed by the project sponsor; and
  • Extent of innovative funding proposed including value capture, joint development, and public-private partnerships.

Looking Ahead

The FY 2020 budget and appropriations process has only just begun, and the only certainty is that there will be more changes before any funding levels are finalized. While the Administration’s inclusion of $500 million for new projects is a notable shift in tone from FY 2018 and FY 2019, the overall cuts to the program prevent this new funding from serving as an endorsement of the program.

Transportation planners and officials hoping to have their project selected for CIG funds will need to continue to assess the ways in which selection criteria are affected by both the overall funding structure of the program as well as the Administration’s view of the program within the context of other infrastructure funding.

NARC will continue to track CIG funding during the budget and appropriations process, as well as during upcoming discussions on transportation reauthorization and the development of an infrastructure package.

Hearing Analysis: Aligning Federal Surface Transportation Policy to Meet 21st Century Needs

Hearing Analysis: Aligning Federal Surface Transportation Policy to Meet 21st Century Needs

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On March 12th, the House Transportation and Infrastructure Subcommittee on Highways and Transit convened to discuss prioritizing the reauthorization of highway and transit programs before they expire next year. Regions and local communities require continued federal infrastructure investment to provide regional connectivity and modern mobility through efficient multi-modal systems. For detailed notes, see NARC’s analysis from the hearing.