House buys time with short-term highway funding patch

The Surface Transportation Extension Act of 2015 keeps the Highway Trust Fund afloat through November 20, making it Congress's third and shortest extension passed this year.

However, this time the short-term fix comes at a time when a multi-year transportation bill has already been passed in the Senate and a corresponding version has made its way through the House Committee with a vote expected to take place in the House soon.

“This extension will allow the highway bill process to continue moving forward without shutting down transportation programmes and projects across the country,” Bill Shuster, a Republican Representative from Pennsylvania and chairman of the Transportation and Infrastructure (T&I) Committee, said in a statement.

Shuster, together with T&I Committee ranking member Peter DeFazio, chairman of the Highways and Transit Subcommittee Sam Graves, and Highways and Transit Subcommittee ranking member Eleanor Holmes Norton, introduced the $325 billion Surface Transportation Reauthorisation and Reform Act of 2015 (STRR Act), earlier this month. The bill went through mark-up and was unanimously approved by the T&I Committee on October 22.

“The STRR Act helps improve the Nation's surface transportation infrastructure, reforms programmes and refocuses those programmes on addressing national priorities, maintains a strong commitment to safety, and promotes innovation to make the system and programmes work better,” the I&T Committee said in a statement after the mark-up session.

A six-year bill, the STRR Act maintains the current level of funding – roughly $50 billion a year – which according to industry experts is inadequate. It's also slightly below the Senate's $350 billion bill.

“The most significant deficiency in the bill is the funding levels,” Congressman John Delaney told Infrastructure Investor . “If we continue with our current underinvestment in infrastructure, we'll be in even worse shape in six years than we are now. Right now, we haven't solved anything.”

Like the DRIVE (Developing a Reliable and Innovative Vision for the Economy) Act the Senate passed in July, the STRR Act has a six-year horizon but funding has only been identified for the first three years.

“The funding mechanics are certainly not what you'd think of as ideal, but it may be the best that can be done at this time because it has been so challenging to get a consensus on new and enhanced revenue sources,” David Narefsky, a partner at law firm Mayer Brown said during a phone interview. 

Another negative in both the House and Senate version is that funding levels for the Transportation Infrastructure Finance and Innovation Act (TIFIA) have been significantly reduced from around $1 billion a year currently to $200 million and $300 million, respectively.

“I view these reductions as negative because the TIFIA programme has proved itself to be a very important financing tool, particularly for large infrastructure projects and particularly for infrastructure that's being built under some kind of public-private partnership (PPP; P3) model,” Narefsky commented.

In this respect, the bill does not seem to live up to its authors' claims of promoting private investment in the country's transportation systems.

According to Shuster's spokesperson, private investment will be promoted with the establishment of a National Surface Transportation and Innovative Finance Bureau that “will work with states and other public and private interests to develop and promote best practices for innovative financing and public-private partnerships.”

Asked how the Bureau would differ from the US Department of Transportation's (USDOT) Building America Transportation Investment Centre (BATIC), established a year ago and officially launched last month, the Congressman's spokesperson said that different offices within USDOT would be consolidated or eliminated.

The bill also aims to reduce red tape and accelerate project delivery. According to Shuster's office, this will be achieved by requiring USDOT and other federal agencies involved in the project review process to develop a coordinated and concurrent environmental review and permitting process within one year after enactment; making the development of a schedule for the completion of the environmental process mandatory; and requiring participating agencies to limit their comments on the range of alternatives to areas within their area of expertise or jurisdiction.

Should the House approve the bill – a vote is expected 'soon' according to Shuster – the next step is for the two legislative chambers to reconcile any differences between each version.

“I am confident that we can resolve the differences between the House and Senate measures and producing a final product that's good for our Nation's infrastructure,” Shuster said in a statement.