In this issue:
White House, House Democrats Preview Infrastructure Investment Plans
Administration Proposes Changes to NEPA Regulations
USDOT Requests Input in Developing the National Freight Strategic Plan
Member Spotlight: National Railroad Construction and Maintenance Association (NRC)
Industry News: USDOT Announces Availability of More Than $900 Million for INFRA Grant Program
Industry News: White House and USDOT Release AV 4.0
Member News: HNTB's Analysis of State and Federal Gas Tax
Member News: Garden Grove Mayor Steve Jones Selected as New OCTA Chairman
Research: Alternative Fuels Study
Previous issues:
TCB Vol. 14. No. 2
12-20-2019
TCB Vol. 14. No. 1
11-04-2019
TCB Vol. 13 No. 4
09-18-2019
TCB Vol. 13 No. 3
06-06-2019
TCB Vol. 13 No. 2
03-01-2019
The Trade Corridor Bulletin
Volume 14 – No. 3 | February 2020
White House and House Democrats Preview Infrastructure Investment Plans
Both Outlines Provide Topline Funding Levels, Need Funding Sources
On February 10, the White House released President Trump’s fiscal year 2021 budget request, which divides transportation infrastructure into two components: a ten-year, $810 billion surface transportation reauthorization proposal and an additional $190 billion in one-time FY21 funding authority for a total investment of $1 trillion over ten years. By comparison, the President’s 2018 budget request included an infrastructure investment plan that aimed to use an initial federal investment of $210 billion to leverage a total investment of $1 trillion across all types of infrastructure.
The 2021 budget request acknowledges the Highway Trust Fund (HTF) shortfall and the explanatory language states the Administration’s interest in working with Congress to identify stable funding sources and end General Fund bailouts of the HTF. Legislative text for the reauthorization proposal is not yet available, though the budget promises that more details will be released in the coming months
The proposed ten-year, $810 billion surface transportation reauthorization is composed of $755 billion in mandatory spending from the HTF and $55 billion in authorizations of discretionary budget authority from the General Fund.
The budget proposes authorizing the BUILD grant program under its reauthorization proposal (rather than by annual congressional appropriations) and provides $1 billion for FY21 but does not specify future amounts. Consistent with his FY20 budget proposal, President Trump again requested $1 billion in general fund resources for the INFRA grant program; this money would not be subject to the multimodal cap. The CRISI grant program would receive $3.9 billion over ten years, including $330 million for FY21. Under this reauthorization proposal the Port Infrastructure Development Program would be eliminated, as the Administration argues “port projects should compete with other freight-related projects on an equal footing” through existing programs such as INFRA and BUILD.
The proposal eliminates the current set-aside for the Transportation Alternatives program under the Surface Transportation Block Grant Program which accounted for more than $4 billion over five years under the FAST Act for pedestrian, bicycle, and other non-driver projects. The Administration asserts this change would provide states additional flexibility to support projects that “rehabilitate or expand highways in a manner that supports interstate or regional commerce.”
The $190 billion one-time budget authority proposal includes $60 billion for a new Building Infrastructure Great grants program. These funds would be directed for “mega-project” grants focused on the rehabilitation and expansion of core infrastructure, including road, bridge, rail, transit, pipeline, landside port, and intermodal connection capital investments; lock, dam, and canal investments; drinking water and waste treatment capital investments; and energy and broadband capital investments. It would also provide $50 billion for a new Moving America’s Freight Safely and Efficiently program. The program provides both formula funding and discretionary grants for “projects with significant economic, mobility, and safety benefits on our strategic highway, rail, port, and waterway freight networks.” This includes projects to address bottleneck areas by adding capacity, deploying innovative technologies, and expanding truck parking infrastructure.
Following the announcement of the President’s Budget request, Senate Budget Committee Chairman Enzi (R-WY) said he would not hold a hearing on the proposal stating, “Congress doesn't pay any attention to the president's budget exercise. It's all it is — an exercise. Congress holds the purse strings, according to the Constitution, and Congress is very protective of that constitutional authority.” Just days before releasing his own proposal, President Trump endorsed the Senate Environment and Public Works Committee’s five-year reauthorization bill, urging its passage during his State of the Union address.
In late January House Democrats announced their own policy framework for federal infrastructure investments. The “Moving Forward Framework” outlines a five-year, $760 billion investment package that aims to maintain and improve current infrastructure while preparing for future system demands. The document does not include legislative text or specify funding methods, rather it provides Democrats’ policy priorities and funding goals for an infrastructure package and surface transportation reauthorization bill. During the January 29 press conference, House Transportation & Infrastructure Chairman Peter DeFazio (D-OR) indicated he planned to introduce a reauthorization bill by June.
The framework, spanning fiscal years 2021-2025, assigns $434 billion to highway and transit programs, with $319 billion of this total designated for “transformative highway investments.” The plan calls for investments in major projects of national and regional significance, adding that project selection should be based on focused eligibility criteria and a diminished Secretarial role. Democrats plan to address multimodal freight needs by increasing the funding caps under existing programs, enhancing states’ ability to invest in multimodal projects. The framework also promotes research into new user-based revenue streams, such as a vehicle-miles traveled fee.
The Democrats’ plan incorporates a $19.7 billion investment of Harbor Maintenance Trust Fund revenue for port and harbor dredging projects. This measure is consistent with the bipartisan Full Utilization of the Harbor Maintenance Trust Fund Act which passed the House in October 2019.
House Republicans responded by issuing their own list of principles, including: addressing Highway Trust Fund stability, project delivery streamlining, and investments in rural transportation networks. They also emphasized the importance of bipartisan collaboration during the reauthorization process.
Administration Proposes Changes to NEPA Regulations
The White House’s Council on Environmental Quality (CEQ) issued a notice of proposed rulemaking (NPRM) on January 10 recommending changes to its regulations governing the implementation of the National Environmental Policy Act (NEPA). In 2017, President Trump issued Executive Order (EO) 13807 titled, “Establishing Discipline and Accountability in the Environmental Review and Permitting Process for Infrastructure.” The EO established the One Federal Decision policy, set target timelines to complete environmental reviews, and directed CEQ to produce regulations and guidance to implement changes to the permitting review process. CEQ subsequently published an advanced notice of proposed rulemaking which received over 12,500 comments, informing the development of the January NPRM.
CEQ found agencies, on average, take approximately four and a half years to complete environmental impact statements (EISs), with the average length reaching over 600 pages. The NPRM establishes a 300-page maximum and two-year time limit to complete EISs and implements a 75-page limit and one-year timeframe for environmental assessments (EAs).
The proposed rule permits expanded use of Categorical Exclusions (CEs) and allows agencies to apply existing CEs identified in another agency’s NEPA procedures (this provision was established for USDOT agencies under the FAST Act).
NEPA regulations mandate the assessment of a proposed action’s impact on the environment. Under current procedures, agencies must identify the direct, indirect, and cumulative effects within the scope of a project. According to CEQ, the proposal simplifies the definition of environmental “effects” to mean those most likely and predictable, removing specific mention of direct, indirect, and cumulative effects. Further, NEPA regulations will no longer require agencies to analyze the cumulative effects of a proposed project. Over the years, this was interpreted as requiring an agency to study a project’s contribution to climate change. CEQ argued that the challenge of analyzing these impacts often deterred agencies from identifying a project’s more foreseeable impacts. Additionally, the proposed rule amends the scope of a “major Federal action,” clarifying that projects with minimum Federal involvement or funding would be exempt from NEPA review requirements.
The proposed changes received mixed responses. Republican Members of Congress generally supported the proposal, arguing the streamlining measures would expedite the construction of major infrastructure projects and reduce costs. Most Democrats on the other hand criticized the proposed changes, voicing concerns that the provisions could negatively impact the environment and public safety.
Comments on CEQ’s proposed rule are due March 10, 2020.
USDOT Requests Input in Developing the National Freight Strategic Plan
On December 27, 2019, the U.S. Department of Transportation published a “Request for Information” (RFI) to guide development of the National Freight Strategic Plan (NFSP). The 2012 surface transportation reauthorization MAP-21 directed USDOT to establish the first-ever NFSP. While the previous Administration released a draft NFSP in October 2015, a finalized version was never produced. The FAST Act, subsequently passed in December 2015, reiterated the requirement to develop the NFSP and mandated USDOT publish the final plan within two years. Having missed that deadline by two years, USDOT’s recent RFI marks the first public solicitation issued since the FAST Act became law. USDOT anticipates the full release of the NFSP in 2020.
The comment period closed on February 10, 2020. As of this publication, the RFI received 76 stakeholder comments. CAGTC worked closely with its membership to develop and submit comments. Consistent with our long-standing policy platform for increased multimodal freight investments, CAGTC’s comments identified the top three issues facing the freight industry as funding adequacy, funding distribution, and funding eligibility. In the comments, CAGTC reiterated our call for a minimum annual federal investment of $12 billion though a multimodal freight competitive grant program; removal of the current funding caps for non-highway projects within the federal formula and INFRA programs; and prioritizing investments in gateways, corridors, and hubs with demonstrable benefits to national freight efficiency, regardless of mode.
CAGTC’s comments can be found here.
CAGTC Member Spotlight
National Railroad Construction and Maintenance Association (NRC)
The National Railroad Construction and Maintenance Association – the “NRC” – is a U.S. trade association that advances the mutual interests of railway contractors and suppliers who construct, maintain and supply railroads and rail-transit lines.
Founded in 1978, the NRC connects members with other railway industry professionals and government legislators and policy makers. Its members range from small mom & pop contractors that maintain industrial and railroad track to large contractors that construct rail infrastructure for large port and industrial complexes, Class I and regional railroad networks and subway, light rail, commuter rail and streetcar lines. Working with these contractors are a range of suppliers that provide railway materials and professional services.
Railway Industry’s Premier Networking Event
The NRC’s recently completed 2020 Conference and NRC-REMSA Exhibition in early January lived up to its reputation as the best networking event in the railway industry. Attendees got a lot of bang for their buck with a stellar program detailing railroad and rail-transit capital programs for 2020, as well as panel discussions and workshops focusing on AREMA, the FRA, S&C, passenger rail opportunities, legislative updates and women in rail. Everyone at the NRC conference in San Diego left smarter, more connected and better prepared for business in 2020.
‘Change’ Prevailing Message for Rail Industry
A high point of the NRC’s annual conference was hearing from Canadian Pacific CEO Keith Creel in an informal “fireside chat.”
Mr. Creel commented on the industry’s hottest topic: Precision Scheduled Railroading (PSR). “I’ll tell you one thing it {PSR} means absolutely. It means change. It’s about change, about creating companies over the long-term that are sustainable, will innovate and create solutions to operate efficiently.”
Mr. Creel challenged contractors and suppliers to identify solutions that don’t exist today. “PSR opens the window of opportunity for shareholders, employees, customers and for suppliers,” he asserted. “… Do it a new way. Embrace it. It will spread like wildfire, because it works… It’s a recipe for success in any business.”
Change Under Way at the NRC
The NRC has embraced the challenge to change by embarking on a construction project of its own to deliver greater value to its members and other industry and government partners.
Following the introduction of a new logo, the NRC launched a new website (www.nrcma.org) that provides more information and resources for members in an easy-to-navigate format. The site features testimonials from NRC members about the value the association brings to their business and to their professional development.
Although many of the NRC’s members compete against each other, they work together through the NRC on education and safety initiatives. The NRC invests in railway education programs through annual grants to educational institutions with railway construction and engineering programs. The association also develops new tools to train employees of member companies to work smarter and injury free.
Coming up on the NRC Calendar: Railroad Day on Capitol Hill
In addition to its annual conference, the NRC offers events throughout the year to learn, network and advocate with other industry leaders, such as its annual Equipment Auction, grassroots events with Members of Congress, and Railroad Day on Capitol Hill.
Mr. Creel’s remarks at the conference about the importance of staying connected to government officials are particularly relevant with Railroad Day coming up March 4, 2020. “We need to connect with employees, customers and regulators,” declared Mr. Creel. “We need to explain our story. We need to help people see the logic – to better understand [our role] based on the facts, not on politics.”
The NRC is offering members the chance to share their story with Members of Congress at the annual Railroad Day on the Hill in Washington, D.C. No one can tell a more compelling story about the impact of a strong railway system bolstered by qualified railway construction workers than someone who has seen it come together out on the track. By participating in Railroad Day over the years, members learn to better tell their story and make some valuable connections with Members of Congress, their staff and other government and industry leaders in the process.
The NRC is hard at work “Building a Safer and Stronger Railway Construction Industry Together!” and invites railway contractors and suppliers to join them.
Industry News
USDOT Announces Availability of More Than $900 Million for INFRA Grant Program
On January 13, U.S. Department of Transportation (USDOT) Secretary Elaine L. Chao announced the latest round of the Infrastructure for Rebuilding America (INFRA) discretionary grant program, which is making available more than $900 million for American infrastructure investments. The INFRA program is expected to award $906 million to significant projects that support the Administration’s focus on infrastructure improvements as outlined in the NOFO.
“The Department will invest more than $900 million in major projects that will improve transportation infrastructure, economic productivity, and quality of life across our nation,” said U.S. Secretary of Transportation Elaine L. Chao.
INFRA advances a grant program established in the FAST Act of 2015 to help rebuild America’s aging infrastructure. INFRA utilizes selection criteria that promote projects with national and regional economic vitality goals while leveraging non-federal funding to increase the total investment by state, local, and private partners. The program also incentivizes project sponsors to pursue innovative strategies, including public-private partnerships. INFRA promotes the incorporation of innovative technology, such as broadband deployment and intelligent transportation systems, that will improve our transportation system. INFRA will also hold recipients accountable for their performance in project delivery and operations.
Read USDOT's full release here.
Industry News
Trump Administration Releases “Ensuring American Leadership in Automated Vehicle Technologies: Automated Vehicles 4.0”
The White House and the U.S. Department of Transportation (USDOT) on January 8 released ‘Ensuring American Leadership in Automated Vehicle Technologies: Automated Vehicles 4.0’ (AV 4.0). The initiative was announced by U.S. Transportation Secretary Elaine L. Chao in a keynote speech at CES in Las Vegas. AV 4.0 unifies efforts in automated vehicles across 38 Federal departments, independent agencies, commissions, and Executive Offices of The President, providing high-level guidance to state and local governments, innovators, and all stakeholders on the U.S. government’s approach towards AVs.
“AV 4.0 will ensure American leadership in AV technology development and integration by providing unified guidance for the first time across the Federal government for innovators and stakeholders,” said U.S. Transportation Secretary Elaine L. Chao.
AV 4.0 establishes federal principles for the development and integration of automated vehicles, consisting of three core focus areas: prioritize safety and security, promote innovation, and ensure a consistent regulatory approach. It also outlines ongoing Administration efforts supporting AV technology growth and leadership, as well as opportunities for collaboration including federal investments in the AV sector and resources for innovators, researchers, and the public.
Read USDOT's full release here.
Member News
HNTB's Analysis of State and Federal Gas Tax
American families pony up thousands of dollars a year to use critical services such as electricity, water and broadband, but an analysis of available data by HNTB Corporation shows that, on average, families pay far less for the critical transportation network that powers economies, strengthens communities and improves quality of life.
On average, American drivers pay just $274.69 annually in gas taxes (federal + state taxes) at the pump, the primary source of funding for the upkeep and improvement of U.S. roads and bridges. Compared to other critical public services, the cost for their transportation systems lags far behind. Household expenses for annual average electric bills in the U.S. ran $1,340 in 2017 according to the U.S. Energy Administration. Forbes reported that annual broadband internet service totaled $794.04 that year and Statista reported that a family of four paid an average annual water bill of $844.68 last year. Individually, Americans’ mobile phone bills average nearly $100 a month or $1,200 per year, according to bill pay service Doxo.
“Think of it this way: the bills we pay monthly for critical services like electricity and water largely go to the utility companies and municipalities that provide these services,” said John Barton, senior vice president and national DOT practice leader for HNTB. “That is not so when it comes to transportation. Transportation is a utility and should be viewed as such. Mobility providers—the governments that build and maintain roadways, bridges, paths and transit systems so we can get to work or school, feed our families, supply our homes and enjoy our communities—see only a fraction of what Americans pay on average at the pump to deliver such an essential service. Typically, less than 20% of what we pay at the pump actually goes to fund our transportation system.”
Infographic available here.
Read the full release here.
Member News
Garden Grove Mayor Steve Jones Selected as New OCTA Chairman
ORANGE, CA – Garden Grove Mayor Steven R. Jones was unanimously selected on January 13 as the new chairman of the Orange County Transportation Authority Board of Directors, which guides transportation-improvement projects and public transit for all of Orange County.
Jones served as the OCTA board’s vice chairman for the last year. He replaces outgoing Chairman Tim Shaw, also a City Councilman from La Habra, who remains on the board representing Orange County’s Fourth District.
“OCTA’s mission to keep Orange County moving is vital to the quality of life here in our county and it’s a true honor to be chosen by my colleagues to help deliver a balanced and sustainable transportation system,” Jones said. “We are underway on several major transportation improvements, including on I-405 and, in my backyard, I’m excited to see progress on building the OC Streetcar. I’m eager to work with my colleagues and with the public to ensure these important projects efficiently move forward.”
Read the full release here.
Research News
Alternative Fuels Study
Florida Ports Council & Florida Natural Gas Association
January 2020
Across the United States, the unprecedented expansion of shale gas development has produced large reserves of natural gas, allowing the United States to emerge as a net exporter of the product. The domestic natural gas industry now includes more than 6,300 producers, 1,200 distributors and 300,000 miles of natural gas pipeline spanning the nation. Natural gas production in the U.S. grew by 10 billion cubic feet per day in 2018, an 11% increase over 2017, and the increased supply continues to put downward pressure on the cost of natural gas. The combination of low cost and the heightened focus at the state, national and international levels on the environmental benefits of conversions to cleaner burning fuels is causing the expansion of natural gas utilization across many industry sectors. The expanding supply of natural gas and the increasing demand for the product worldwide presents an incredible opportunity for Florida seaports, through participation in the growing import and export business and through new and increased uses on and near ports.
Read the full report here.
Research News
Road Usage Charge Assessment
Washington State Transportation Commission
January 2020
The Washington State Transportation Commission (WSTC) recommends that the Legislature enact a per-mile road usage charge (RUC) now on a small number of vehicles, including alternative fuel vehicles and state-owned vehicles, as the first step in a 10- to 25-year transition away from gas taxes to fund the state highway system. With the gas tax already declining, adoption of cleaner and alternative fuel vehicles accelerating, and RUC systems and technologies ready for implementation, the State must act now to avoid a predictable transportation funding crisis later. Starting small and transitioning gradually affords the Legislature and state agencies time to make necessary system refinements and policy adjustments to a RUC system in a deliberate, controlled manner.
This recommendation and others follow seven years of in-depth investigation, extensive analysis, and a year-long pilot project all focused on determining if a RUC could replace the gas tax and bring sustainability to transportation funding long-term.
Read the full report here.
Upcoming Events
May 12-13, 2020: CAGTC Annual Meeting
Washington, DC
February 25-28, 2020: AASHTO 2020 Washington Briefing
Washington, DC
March 2-4, 2020: Public-Private Partnership Conference & Expo 2020
Dallas, TX
March 4, 2020: Railroad Day on Capitol Hill 2020
Washington, DC
March 17-19, 2020: AAPA Spring Conference
Washington, DC
May 5-7, 2020: IANA Intermodal Operations, Safety & Maintenance Business Meeting
Oak Brook, IL