APTA | Passenger Transport
December 20, 2010

In This Issue

Read the classifieds in this issue to learn about 7 bids & proposals and 7 transit job opportunities!


2010: Examining the Legislative Year in Review

Before we turn the calendar to 2011, it’s time to take a look back at a year that left much unfinished business in Washington for the public transportation agenda. Many of APTA’s legislative priorities remain in a state of flux.

From a legislative perspective, the year began with a great deal of uncertainty. The Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), which authorizes surface transportation programs, expired Sept. 30, 2009, and had been extended on a short-term basis through Feb. 28, 2010. As a result, the Federal Transit Administration (FTA) was unable to apportion funds for a full year.

In addition, without an infusion of general funds from the Treasury to the Highway Trust Fund (HTF), the Mass Transit Account (MTA) was in danger of becoming insolvent in 2010. The economy remained fragile and Senate Democrats lost their filibuster-proof majority after Massachusetts Republican Scott Brown was elected to the seat that had been held by the late Sen. Edward Kennedy (D-MA).

As we approach the final days of the 111th Congress, the future of funding remains unpredictable. Congress is still working on a path to appropriate funds for Fiscal Year (FY) 2011. The House will have a Republican majority in the 112th Congress, dominated by members who campaigned on a platform of reducing government spending.

SAFETEA-LU Extended Through 2010
The year kicked off with the passage of the Hiring Incentives to Restore Employment (HIRE) Act after efforts to pass a larger stimulus package including transit funding did not gain traction.  The HIRE Act ultimately contained an extension of SAFETEA-LU through Dec. 31, 2010, as well as language providing a transfer of $19.5 billion of general funds to the HTF, including $4.8 billion to the MTA. These funds are based on the restoration of interest payments on balances to the HTF; the transfer of funds is supposed to keep the MTA solvent through Sept. 30, 2011, the end of the fiscal year.

However, before the House and Senate could agree on the HIRE Act, they let authorizing law expire at the end of February, resulting in the shutdown for several days of all programs and offices funded by the HTF.

The HIRE Act had major impacts on the legislative agenda for transit. The extension of SAFETEA-LU resulted in generally no further progress on writing a new long-term bill, but saving the trust fund allowed the program to continue at the already approved FY 2010 appropriations levels.

Despite the best efforts of transportation advocates—including APTA members who identified $15 billion worth of public transportation projects that could immediately put Americans back to work and spur economic growth—the House and Senate failed to pass jobs legislation that would provide investment in infrastructure.

Another significant bill introduced this year was $2 billion for emergency transit operating assistance, proposed by Senate Banking Committee Chairman Christopher Dodd (D-CT) at the end of May. Despite overwhelming support from the transit industry, it did not move forward.

Administration Requests $10.8 Billion for Transit and $1 Billion for High-Speed Rail
The administration’s FY 2011 budget proposal, released in early February, sought $10.8 billion for public transportation programs in addition to $1 billion for high-speed rail. In the budget transmittal, the president acknowledged that funding is constrained due to the declining level of MTA funds in the trust fund.

The House ultimately passed a year-long continuing resolution (CR) that freezes spending at FY 2010 levels, does not contain earmarks, and also includes an extension of SAFETEA-LU through Sept. 30, 2011. Notably, the measure cuts funding for the high-speed rail program from $2.5 billion to $1 billion.

As Passenger Transport went to press, the Senate was expected to take up the CR and may substitute it with an omnibus appropriations package, but it is unclear if Senate Appropriations Committee Chairman Daniel Inouye (D-HI) has enough votes for passage.

Tax Extenders Provisions Still Pending
On the tax side, the industry has pursued the extension of two important provisions: the alternative fuels tax credit and the higher commuter transit benefit.

The alternative fuels tax credit, which expired Dec. 31, 2009, allows transit agencies that use natural gas and other similar fuels to receive a 50-cent credit per gallon tax refund. The American Recovery and Reinvestment Act (ARRA) increased the monthly transit/vanpool benefit to $230 per month from $120 per month and created parity with the parking benefit. However, that provision ends on Dec. 31, which would result in an effective tax increase on participating transit riders and employees.

On Dec. 15, the Senate approved tax legislation that would extend both credits through 2011. Under this legislation, the alternative fuels tax credit would be extended retroactively to cover fuel used in 2010. At press time, the House was scheduled to take up the measure.
Senate Banking Committee Approves Rail Transit Safety Legislation
The Senate Banking Committee worked closely with APTA staff, member transit systems, and state safety oversight agencies in preparing the Public Transportation Safety Act of 2010 (PTSA), which it marked up in late June. The bill was approved unanimously by the committee, thanks to the bipartisan leadership of Dodd and Ranking Member Richard Shelby (R-AL).

The bill, which further develops and modifies a safety and oversight proposal put forth by the administration, grants the DOT secretary authority to establish and implement standards and regulations through the development of a national safety plan, applicable to all public transportation modes. However, the legislation did not move to the floor due to opposition in the House and Senate over costs and expanding the role of the federal government. In addition, House leaders believed that a safety initiative should be part of the larger authorization debate.

The future of the legislation remains in doubt as Rep. John Mica (R-FL), incoming chairman of the House Transportation and Infrastructure Committee, has expressed opposition to the notion of granting regulatory and enforcement authority over public transportation safety standards to the federal government.

Climate Change Legislation Stalls in the Senate
A flurry of activity surrounded energy and climate change legislation this year, with Sens. John Kerry (D-MA), Joe Lieberman (I-CT), and Lindsey Graham (R-SC) forming a triumvirate to bring about a compromise on legislation to reduce greenhouse gas emissions. The trio floated a proposal that would limit carbon emissions produced by the transportation sector by including a fee on motor fuels based on the price of carbon dioxide under a cap-and-trade system. Revenues generated by this “linked fee,” effectively acting identically to a gas tax, initially were designated to fund consumer relief for increases in electricity prices, deficit reduction, and clean energy technology.

APTA raised concerns with the proposal to divert revenues generated from motor fuels fees away from the trust fund. Projected to generate tens of billions of dollars, these revenues could fund a new, robust surface transportation authorization. However, if the Kerry-Graham-Lieberman (KGL) bill did not reinvest in transportation, the political feasibility of an official increase in the gas tax to pay for such a bill would become even more unlikely than it is today. In response, APTA organized and led a coalition of 26 other transportation industry and interest groups to advocate that any revenues raised from motor fuels fees or taxes remain dedicated to the trust fund.

In response to the issues APTA raised with the structure of the KGL bill, a revised proposal was put forth that invested in transportation. Under that proposal, $2.5 billion per year would be deposited into the trust fund; $1.875 billion per year would be distributed by the secretary of transportation for Transportation Investment Generating Economic Recovery investments; and $1.875 billion would be distributed by the secretary for state and local investments in greenhouse gas emission reduction programs.

Unable to attract any Republican support for the bill, the legislation stalled. While it is expected that some sort of smaller energy package will be addressed in the next Congress, a comprehensive cap-and-trade bill is tabled for the foreseeable future.

Buy America Waiver; Rail Passenger Liability Cap Legislation
During the summer, Rep. John Garamendi (D-CA) introduced H.R. 5791, “Buses, Rail Cars, Ferryboats: Making It in America Act of 2010.” This proposal would institute a graduated increase in the percentage of the domestic manufacturing content for transit rolling stock waiver, beginning with 60 percent through the end of FY 2011 and increasing to 100 percent on or after Oct. 1, 2015. APTA does not support these proposed changes to the current requirements.

Although this legislation will not move forward during the 111th Congress, the administration has expressed interest in changing Buy America waivers in a future authorization bill. APTA continues to let Congress and the administration know how changes to the requirements would affect its member companies.

Separately, Rep. Elton Gallegly (R-CA) and Sen. Dianne Feinstein (D-CA) introduced legislation to raise the limit on liability for passenger rail accidents for rail operators from $200 million to $500 million. The bill would apply retroactively to cover the 2008 Metrolink accident in Chatsworth, CA. The legislation would also set annual adjustments to the cap based on fluctuations in the Consumer Price Index.

The proposed changes to the liability cap would raise the cost of insurance for passenger rail operators to unsustainable levels. In addition, it is uncertain whether this level of liability insurance would be available for passenger rail operators. The prohibitive price of insurance would make it extremely difficult for new operators to start service, and force existing operators either to reduce service, or divert funds from critical infrastructure maintenance.

APTA has written letters to the bill’s sponsors expressing its opposition to the legislation and will continue its efforts when the bills are reintroduced, as planned, during the next Congress.
Looking Ahead to 2011
Clearly the legislative landscape will be different next year, with a Republican majority in the House and new Democratic members in leadership roles on two key authorizing committees.

Mica is working with House leadership to prioritize the surface transportation authorization bill when the new session of Congress begins. APTA will continue to press for a long-term bill that meets the needs of the industry.

An outcry over earmarks has led to House Republicans issuing a moratorium on the practice among their conference. While a vote against earmarks failed in the Senate and many House Republicans have issued statements that transportation and infrastructure earmarks should not be considered “earmarks” per se, how this will play out in the next Congress in terms of appropriations will require close monitoring.

Concern over the size of the budget deficit will continue to dominate legislative discussion. Although the National Commission on Fiscal Responsibility and Reform, the deficit commission created by President Obama, called for an increase in the federal gas tax to fund transportation investment, this proposal, like many others, awaits bipartisan support.

 With essentially all ARRA transit funding obligated and budgets heavily constrained, transit systems remain dependent on a long-term authorization bill to best serve their riders.

APTA is committed to working with the new Congress when it convenes on Jan. 3.

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