A discussion of the new surface transportation legislation with a focus on the funding, program reforms and streamlining provisions.

1. MAP-21
Moving Ahead for Progress in the 21st Century Act
NSSGA Webinar—August 6, 2012

2. Presentation
• Post-Enactment Takeaways
• MAP-21
– Funding/Financing
– Policy
• Future
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3. 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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4. 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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5. Are we……
Building America’s Future? Handing Out Pork?
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6. 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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7. 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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8. MAP-21*
Funding / Financing
Policy
* Effective Date: 10/1/2012
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9. Funding / Financing
• Length of bill
• Funding
• HTF Financing
• Additional financing
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10. 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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11. MAP-21 Funding
• MAP-21 extends funding for the remaining
three months of FY 2012
• MAP-21 authorizes a total of about $105
billion for highways, highway safety, and
transit for FYs 2013 and 2014
• Funding for FY 2013 and 2014 is—
– Slightly higher than FY 2012, BUT
– Slightly below the SAFETEA-LU FY 2009 level
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12. MAP-21 Funding (cont’d)
Source: Chamber of Commerce MAP-21 Summary
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13. MAP-21 Highway Funding
Actual/Estimated
Fiscal Year Obligations
($ billions)
2011 40.8
2012 38.9
2013 39.4
2014 40.0
Source: AASHTO
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14. HTF Financing New HTF
Offsets
Revenues
• Revenue provisions: GF Infusion Rolled
Cigarettes
– Extends HTF taxes $18.8 billion
$0.1 billion
• Motor fuel to 9/30/2016 Pension
LUST Xfer
• Heavy vehicle use tax to 9/30/2017 $2.4 billion
Reform
$20.3 billion
– 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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15. Additional Resources
• Projects of National and Regional Significance
• TIFIA Program
• Expanded Interstate Tolling
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16. 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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17. 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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18. 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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19. Policy Reforms
• Programmatic Reform
– Consolidation
– Formulas
– Earmarks
– Enhancements
– Freight
• Performance Management
• Streamlining
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20. 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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21. Source: AASHTO 21

22. 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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23. 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
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24. Program Reform: Earmarks
• No earmarks in MAP-21
• Will this policy be revisited?
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25. Reform: Transportation Enhancements
• “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
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26. Reform: Performance Management
• MAP-21 requires DOT to
establish performance
standards for—
– Safety
– Infrastructure condition
– Congestion reduction
– System reliability
– Freight movement
– Environmental
sustainability
– Reduced project delivery
delays
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27. 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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28. 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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29. 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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30. 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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31. 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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32. 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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33. The Future: Implementation
• Contract authority
• Budget sequestration
• DOT regulation
– Obama? Romney?
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34. The Future: Reauthorization
• Right around the corner……
– Program expires September 30, 2014
• Have reforms worked?
• Significant challenges
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35. Source: AASHTO
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36. Source: AASHTO
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37. The Future: Reauthorization
• We know what must be done…
• New strategy? Innovative thinking?
• Opportunities
– Tax reform?
– Grand bargain?
– Stand alone?
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