[authors: Brian Walsh, Kimberly D. Magrini]
After signing a one-week extension to prevent the original, continually extended 2009 transportation authorization bill from expiring on June 30, President Obama finally signed a new transportation bill into law on Friday, July 6. The $105 billion surface transportation bill is a product of a joint House and Senate conference committee that met this spring to reconcile differences between the House proposed bill and the Senate approved proposal.
The Moving Ahead for Progress in the 21st Century Act (H.R. 4348) closely resembles the Senate’s $109 billion proposal in that it protects revenue streams for state infrastructure from the highway trust fund through 2014, including grant anticipation revenue vehicle bonds. However, the bill lacks the advantageous municipal bond provisions, namely a temporary increase of the cap for bank-qualified bonds and exemption from the alternative minimum tax for private-activity bonds.
The bill does not include the Keystone XL oil pipeline, a key and controversial proposal. It also eliminates earmarks and institutes expedited environmental reviews for infrastructure construction.
Some are worried that these measures, despite saving about 2.8 million jobs, will leave no funding available to repair existing infrastructure, create safer walking and biking lanes, and assist cash-strapped transit agencies to keep operations going. Both houses agreed, however, to establish a Gulf Coast Restoration Trust Fund into which 80 percent of the civil penalties paid in connection with BP’s gulf oil spill will be used to restore the Gulf Coast’s coastal ecosystem’s long-term health.
And for the time being, the gas tax—which constitutes the long-term transportation funding source and has been sitting at 18.4 cents per gallon since 1993—will remain at 18.4 cents per gallon for the next two years.
The bill also authorizes $750 million in fiscal 2013 and $1 billion in fiscal 2014 for the Transportation Infrastructure Finance and Innovation Act (TIFIA) program, and simplifies the eligibility criteria for TIFIA applicants compared to prior TIFIA standards. The bill increases the maximum share of project costs that can be financed by TIFIA loans from 33 percent to 49 percent. This increase in financing capacity may help projects achieve feasibility and reduce federal aid funds use; however, it may also reduce the number of projects that could be assisted by TIFIA loans because the increase in the percentage of maximum project cost share means less funds available to spread across additional projects.
Interestingly, the bill also includes a provision for a one-year extension of federal Stafford student-loan interest rates at the current level of 3.4 percent.
The attorneys in Ballard Spahr’s P3/Infrastructure practice routinely monitor federal and state legislation and are prepared to advise clients on the impact of this new law. For more information, please contact Brian Walsh at 215.864.8510 or walsh@ballardspahr.com, Adrian R. King, Jr., at 215.864.8622 or kinga@ballardspahr.com, or Steve T. Park at 215.864.8533 or parks@ballardspahr.com.
