Bill from Calif. Rep. Lowenthal calls for innovative approach for freight infrastructure funding

At a time when there are myriad differing opinions on how to best fund federal transportation infrastructure, a bill proposed by Representative Alan Lowenthal (D-CA) offers up the option of a dedicated revenue source for freight infrastructure investments.

The bill, entitled H.R. 5624, Economy in Motion: The National Multimodal and Sustainable Freight Infrastructure Act, aims to dedicate about $8 billion per year towards U.S. freight-related infrastructure projects, while focusing on intermodal-related projects and projects geared towards alleviating freight transportation system-related bottlenecks.

The bill’s primary funding mechanisms in the form of freight grant programs, according to Lowenthal’s office, include:
-a formula system in which each state receives funding each year based on the amount of existing freight infrastructure within the state, with comprehensive State Freight plans required in order to be eligible, coupled with a State Freight Advisory Committee suggested under MAP-21. States would also be able to create partnerships for funding for multi-state plans;
-a competitive grant program for all local, regional and state governments that would be funded through a 1 percent waybill fee on the transportation cost of goods; and
-a Freight Transportation Infrastructure Trust Fund that would prevent funds from the waybill fee being diverted for other purposes

For the state freight plans cited in the bill, Lowenthal is calling for them to include environmental goals and strategies developed by state freight advisory committee members and requiring these plans to provide a path for freight projects to address and reduce the environmental and community impacts of good movements. Decisions stemming from these plans would be made through a joint termination between the Secretary of Transportation and the Administrator of the Environmental Protection Agency.

“The movement of goods is one of the most important economic engines in our nation,” Lowenthal said in a statement. “The infrastructure this engine depends on is crumbling and we must fix it, make it stronger, and make it better. My bill would do this while also taking action to mitigate the adverse environmental impacts that are the unintended consequence of goods movement. We can create a cleaner economic engine.”

James Burnley, a partner at Washington, D.C.-based law firm Venable LLP and former Secretary of Transportation under the late President Ronald Reagan, said that any proposed legislation that focuses on the importance of freight is a good thing.

But he said that this bill may represent Rep. Lowenthal putting a marker down on the next federal surface transportation authorization, which will hopefully be complete by the end of next year.

“The approach in this bill will be important to the debate and discussion, but whether Congress will have an appetite to…put a 1 percent sales, or excise, tax on the moving of freight is unknown, and the way the bill treats that issue raises a few questions.”

One question he raised pertained to the state of intermodal as referenced in the bill in regards to how movements via truck and rail would be taxed as per the bill’s requirements, and not be applicable to freight being moved by air or barge.

Another issue he cited is the bill calling for the EPA having signoff rights on the discretionary grants could pose a serious problem and create complexities for DOT, as it has administered an environmental impact statement process and related environmental processes for decades and has a thorough understanding of environmental issues and does not need help from another agency.

Lowenthal’s proposed 1 percent waybill fee on the transportation of cost of goods is not the first time something like this has been proposed, but Leslie Blakey, executive director of the Coalition for America’s Gateways and Trade Corridors (CAGTC) said that Lowenthal’s bill is more detailed regarding how trust fund would be structured and the capital be used to support the bill’s two approaches to federal investment in freight infrastructure.

“The waybill idea is one that needs to be developed further, because we don’t actually have a universal waybill that everybody uses and turns into some federal agency to tack on the 1 percent tax,” she said. “A mechanism would need to be set up. This is the funding mechanism in the bill, because it does illustrate how a relatively small fee or maybe $13 for an imported container, for example, would be applied and is not a large fee for any one shipper to pay. If this was applied broadly, it would bring in a great deal of money to support infrastructure that is needed.”

Blakey added that there are similar parallels between this bill and last spring’s GROW America Act from the White House, which also had a formula program and a competitive grant program. But she said that the waybill fee in the Lowenthal bill would bring in significantly more money for freight build out in the form of port and rail expansion, inland waterways, and road needs for trucking.

This bill comes at a time when Congress appears to be running out the clock on the current federal transportation authorization, MAP-21, which was extended through May 2015 in late June.

Burnley added that there is “no chance” that any meaningful progress will occur regarding future federal transportation authorization during the upcoming lame duck session of Congress following the November mid-term elections.