After slightly more than a year of passing short-term extensions in spending authority and General Fund transfers for the Federal Highway Trust Fund, Congress has passed a long-term highway, bridge, transit, and rail funding bill. The bill, referred to as the “Fixing America’s Surface Transportation Act” or FAST Act, reflects reconciliation between the two houses of Congress. On Thursday, October 3, the measure gained passage in the Senate with both Senator Boxer and Senator Feinstein voting “aye.” This was preceded by approval in the House whereby all members of the RCRC delegation voted “aye” with the exception of Representative Tom McClintock (R-Placer). The FAST Act is a fully-paid-for $305 billion, five-year surface transportation bill, of which California is anticipated to receive approximately $26 billion between 2016-2020 to fund a variety of transportation projects.
The FAST Act largely addresses several critical county issues RCRC has advocated for over the last two years. Specifically, the FAST Act provides increased funding for local and regional transportation priorities as well as increased bridge funding. The Act also makes meaningful reforms to the environmental planning and review process. More detail is provided below on some of the key highlights of importance to California’s counties.
Surface Transportation Program: The FAST Act increases funding for the new Surface Transportation Block Grant Program (STBGP) and, just as importantly, increases the share that will be directed to local jurisdictions from 50 to 55 percent over the life of the act. The Transportation Alternatives Program and Recreational Trails programs are now contained into the STBGP and receive dedicated funding to support active transportation and trail projects. In total, the FAST Act provides roughly $58.3 billion nationwide over the five years to fund a variety of state and local transportation projects, including bridges, alternative transportation, and recreational trails. Early estimates anticipate roughly $28 billion being directly sub-allocated to local agencies across the country.
Bridge Funding: While the Senate DRIVE Act proposed funding off-system bridges off-the-top of STP, which would have reduced the local STP share, the FAST Act preserves the requirement that off-system bridges be funded from the State share. This provision will ensure that the 5 percent increase in the local STP share materializes. Additionally, the FAST Act restores the 30 percent reduction in bridge funding made under MAP-21 and makes local on-system bridges eligible for funding under the National Highway Performance Program.
Rural Road Safety: Despite having included provisions to address rural road safety in both the Senate and House bills, the FAST Act has no new provisions for addressing fatality rates on rural roadways. As such, the MAP-21 provision requiring states to invest in safety projects if fatality rates increase will remain intact.
Project Delivery: The FAST Act establishes a new pilot program that enables states with environmental laws and regulations more stringent than National Environmental Policy Act to rely on those state laws. Although California already participates in a similar program, there are additional reforms in the FAST Act that are intended to further expedite and streamline planning and delivery of transportation projects.
Road User Charge: The FAST Act makes a $95 million investment to states and/or a consortium of states to study alternative user-based transportation funding mechanisms, including $15 million for Fiscal Year 2016 and $20 million for each Fiscal Years 2017 through 2020. We anticipate these funds will help offset the cost for states like California and Oregon who are taking action to study and implement an alternative transportation funding mechanism commonly referred to as a road user charge based on vehicle miles traveled.
Tax-Exempt Financing for WIFIA Projects: While unrelated to the Federal surface transportation program, the FAST Act amends the Water Infrastructure Finance and Innovation Act (WIFIA), a federal loan guarantee program adopted in the 2014 Water Resources Reform and Development Act for water infrastructure projects assisted by EPA and the U.S. Army Corps of Engineers. The new provision removes the ban on using tax-exempt municipal bond funding for the non-federal share of project costs. The ban is considered a deterrent for water agencies to utilize the fledgling WIFIA program since many projects are funded with tax-exempt bonds. The WIFIA program provides long-term, low-interest loans for large water infrastructure projects over $20 million that are unable to access funding through their State Revolving Loan programs.