MAP-21 Moving Ahead for Progress in the 21st Century Act

NSSGA Webinar—August 6, 2012

Presentation

• Post-Enactment Takeaways

• MAP-21

– Funding/Financing

– Policy

• Future

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Post-Enactment Takeaways

• Lack of support

– New members

– Even members with history of support

• Devolution

– More interest than ever

– Growing concern

– MAP-21 referred to as “devolution lite”

• Why?

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Loss of Credibility

• Earmarks

– Thousands of earmarks; “bridge to nowhere”

• Enhancements

– Museums; bike paths

• No clear Federal mission

• Project delivery

– 12 to 15 years

– States avoid using Federal dollars on complex projects

• “There is plenty of money to meet legitimate transportation needs if

you just stopped wasting it on bad or low priority projects”

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Are we……

Handing Out Pork? Building America’s Future?

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Financing Problems

• HTF being sustained by general fund infusions

– $35 billion prior to MAP-21

• No appetite for user fee increase

– Real source of the discontent?

• Opposition to further general fund bailout – “At time of large deficits, we cannot afford a general fund bailout”

– “HTF should live within its means”

• Offsets – “Offsets, if available, should be used to reduce deficit”

– Spending should be offset in same year—”shouldn’t use 10 years of

offsets to pay for 2 years of spending”

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Tortured—But Ultimately Successful--Process

• SAFETEA-LU expired September 30, 2009

– Ten short-term extensions

– Great uncertainty

– Stakeholders kept pressure on

• Key compromises made

– Keystone XL Pipeline dropped

– Coal ash dropped

– Student loan interest fix added

• House and Senate pass MAP-21 Conference Report

– House: 372 - 52

– Senate: 74 - 19

• President Obama signs MAP-21 into law on July 5, 2012

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MAP-21*

Funding / Financing

Policy

* Effective Date: 10/1/2012 8

Funding / Financing

• Length of bill

• Funding

• HTF Financing

• Additional financing

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Length of Bill

• House: December 31, 2012

• Senate: September 30, 2013

• MAP-21: September 30, 2014

– Remainder of FY 2012

– FY 2013

– FY 2014

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MAP-21 Funding

• MAP-21 extends funding for the remaining

three months of FY 2012

• MAP-21 authorizes a total of about $105

billion for highways, highway safety, and

transit for FYs 2013 and 2014

• Funding for FY 2013 and 2014 is—

– Slightly higher than FY 2012, BUT

– Slightly below the SAFETEA-LU FY 2009 level

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MAP-21 Funding (cont’d)

Source: Chamber of Commerce MAP-21 Summary 12

MAP-21 Highway Funding

Fiscal Year

Actual/Estimated

Obligations

($ billions)

2011

40.8

2012

38.9

2013

39.4

2014

40.0

Source: AASHTO 13

HTF Financing

• Revenue provisions:

– Extends HTF taxes

• Motor fuel to 9/30/2016

• Heavy vehicle use tax to 9/30/2017

– Transfers $2.4 billion from LUSTTF to HTF

– Infuses $18.8 billion in general funds into HTF

• $16.6 billion into Highway Account

• $2.2 billion into Transit Account

• Offsets ($20.4 billion over ten years)

– Pension funding stabilization--$20.3 billion over 10 years

– Roll your own cigarette tax--$0.1 billion over 10 years

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New HTF

Revenues Offsets

Pension Reform

$20.3 billion

Rolled Cigarettes

$0.1 billion

LUST Xfer

$2.4 billion

GF Infusion

$18.8 billion

Additional Resources

• Projects of National and Regional Significance

• TIFIA Program

• Expanded Interstate Tolling

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Projects of National and Regional Significance

• Continues SAFETEA-LU discretionary grant program, with

modifications, for one year

– Broadens entities eligible to apply

– Adds congressional disapproval process

• Authorizations from general funds:

– FY 2013: $500 million

– FY 2014: $0

• No funding unless appropriated

• DOT report in two years

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TIFIA Program

• Big increase in resources

– FY 2012: $122 million

– FY 2013: $750 million

– FY 2014: $1 billion

• Loans, loan guarantees, other credit enhancements

• DOT rule of thumb: every $1 dollar leverages about $10

• Some claim these TIFIA funds will leverage $50 billion in investment

– Assumption: TIFIA supports about 20 percent of overall project

• Typically requires revenue stream to guarantee payback

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Expanded Interstate Tolling

• States may now construct new toll lanes on existing

Interstates provided that the number of toll-free lanes

remains the same

• Authorized uses of revenue broadened

– Troubling: “any other purpose for which Federal funds may

be obligated by a State”

• Promotes interoperability between states

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Policy Reforms

• Programmatic Reform

– Consolidation

– Formulas

– Earmarks

– Enhancements

– Freight

• Performance Management

• Streamlining

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Program Reform: Consolidation

• Establishes four core programs plus planning

– National Highway Performance System

– Surface Transportation Program

– Highway Safety Improvement Program

– CMAQ Program

– Metropolitan Planning

• Reduces # programs by 2/3’s

– E.g., Interstate Maintenance, Bridge, Safer Routes

to Schools, Recreational Trails

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Source: AASHTO 21

Program Reform:

Freight

• Does NOT establish a new freight program as many had advocated

• Establishes national freight policy

• Requires Secretary to establish a “national freight network” and a

“national freight strategic plan”

• Encourages states to establish “state freight advisory committees” and

“state freight plans”

• Authorizes Secretary to increase federal share on freight projects if

state meets certain requirements

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Program Reform: Formulas

• 1. Authorize lump sum for core programs

• 2. Calculate each state’s share

– FY 2013: virtually same as FY 2012

– FY 2014: virtually same as FY 2012 except adjusted to assure 95

percent rate of return

• 3. For each state, divide the total amount among programs

– Distribute planning and CMAQ amounts (FY 2009 levels) off top

– Each state divides remainder as follows: • NHPP: 63.7 %

• STP: 29.3 %

• HSIP: 7%

– States can transfer up to 50% between categories 23

Program Reform: Earmarks

• No earmarks in MAP-21

• Will this policy be revisited?

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Reform: Transportation Enhancements

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• “Transportation alternatives”

– 2% set-aside

– 50% states; 50% locals

• Some estimate funding reduced by 33%

or more

• Reduced eligibility

– E.g., museums, landscaping

• New eligibility

– E.g., safer routes to schools, overlooks

• Options included to allow state flexibility

in use of these funds and opt-out

Reform: Performance Management

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• MAP-21 requires DOT to

establish performance

standards for—

– Safety

– Infrastructure condition

– Congestion reduction

– System reliability

– Freight movement

– Environmental

sustainability

– Reduced project delivery

delays

Reform: Performance Management

• DOT must establish performance standards within 18 months

– Must consult with states, MPOs, transit agencies, and stakeholders

• States must establish performance targets within one year after

DOT establishes performance standards

– Must coordinate with MPOs and transit agencies

• MPOs must establish performance targets within 180 days after

state adopts performance targets

– Must coordinate with state and transit agencies

• Performance measures and targets must be incorporated into

long-range planning and short-term programming processes

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Reform: Streamlining

• Wide array of initiatives

• Declaration of Policy

– “Substantially reduce” time

– Does not waive 45+ environmental laws

• Expands number of categorical exclusions

– Emergency projects

– Projects w/i “operational rights-of-way”

– Projects with limited Federal assistance

• Less than $5 million

• Total cost > $30 million and Federal funding < 15%

– Certain multi-modal projects

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Reform: Streamlining (cont’d)

• Expands flexibility to undertake activities prior to the

completion of NEPA

– Acquisition of real property

– Design

– Enter into CM/GC two-phased contracts

• Expanded delegation

– Makes five-state pilot a permanent program

– Expands to include rail, transit and multi-modal projects

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Reform: Streamlining (cont’d)

• Encourages programmatic approaches

– Allows states or MPOs to develop programmatic

mitigation plans

– DOT must conduct rulemaking to allow

programmatic approaches to the environmental

review process

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Reform: Streamlining (cont’d)

• Other Process Reforms

– New issue resolution procedures that allow for

elevation

– Resource agency deadlines for review

– Program to complete some ongoing EISs for

complex projects within 4 years (only available for

EISs that have been under way for at least 2 years

– Resource agency financial penalties for failure to

meet deadlines

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Miscellaneous

• Veterans employment

– Requires states, to the extent practicable, to encourage

contractors to make best faith effort to hire veterans on

federally-assisted projects

• Buy America

– MAP-21 provides that if a road or bridge project is split into

multiple contracts and at least one of those contracts

receives federal funding, all contracts on that project must

abide by "Buy America" mandates

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The Future: Implementation

• Contract authority

• Budget sequestration

• DOT regulation

– Obama? Romney?

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The Future: Reauthorization

• Right around the corner……

– Program expires September 30, 2014

• Have reforms worked?

• Significant challenges

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Source: AASHTO

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36 Source: AASHTO

The Future: Reauthorization

• We know what must be done…

• New strategy? Innovative thinking?

• Opportunities

– Tax reform?

– Grand bargain?

– Stand alone?

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