President Obama Delivers Transportation Authorization "GROW AMERICA" Act to Congress

by Nossaman LLP

On April 29, 2014, President Obama delivered a draft of "Generating Renewal, Opportunity, and Work with Accelerated Mobility, Efficiency, and Rebuilding of Infrastructure and Communities throughout America" or "GROW AMERICA" Act to Congress, promised as his administration’s proposed multi-year surface transportation reauthorization.  This is the first surface transportation authorization proposal to be released, and the House and Senate proposals are likely to be more conservative.

The GROW AMERICA Act proposes to replenish the shortfall in the Highway Trust Fund (replacing it with a new “Transportation Trust Fund”), additionally budgeting and accumulating an additional $87 billion for transportation priorities.  Marquee infrastructure provisions include:

  • Providing funding certainty to state and local projects, promising $302 billion over 4 years (a 37% increase over the MAP-21 reauthorization.
  • Prioritizing public transit in urban and rural settings, increasing by 70% appropriations for transit funding
  • Targeting investment in freight rail infrastructure, proposing $10 billion over 4 years for transportation projects that improve freight transportation
  • Improving environmental and other permitting in infrastructure projects (e.g., concurrent permitting review, streamlining permitting processes, etc.)
  • Solving the “backlog of deficient bridges and aging transit systems” through $92.1 billion over 4 years to fund a “National Highway Performance Program” to “repair and reduce” congestion on the federal highway system and $13.4 billion through a “Critical Immediate Investments Program,” half of which is to cure pavement condition deficiencies and at least of quarter of which is to improve bridge structural deficiencies.
  • Eliminating the prohibition on tolling existing interstate highways, subject to the Secretary of Transportation’s approval.  Other tolling and toll-related provisions, effectively amending or repealing past transportation authorizations are proposed, described in further detail here in this blog.

The GROW AMERICA Act also proposes to “expand and improve” financing mechanisms to increase federal funding for “game-changing” projects, continuing and furthering discretionary grant programs and loan programs.  Specifically, the Transportation Infrastructure Finance and Innovation Act (TIFIA) program will provide $4 billion over four years to support $40 billion in TIFIA loans.  The U.S. Department of Transportation (USDOT) would also set aside $5 million per year from program funding to replace fees typically collected from TIFIA borrowers for project development costs, assisting as many as 10 small projects valued at less than $75 million.  Also, the Railroad Rehabilitation and Improvement Financing (RRIF) Program will reduce loan costs, ostensibly making RRIF loans more accessible.  Further, the cap on private activity bonds (PABs) will be raised from $15 billion to $19 billion; PABs are a means by which private development entities can partner with public entities to issue tax exempt bonds for highway/transit projects, further fostering private sector transportation infrastructure development by putting them “on a level playing field with public sector developers” in the space.

The Transportation Investment Generating Economic Recovery (TIGER) grant program will be given $5 billion over 4 years, and a new 4-year, $4 billion competitive grant program, Fixing and Accelerating Surface Transportation (FAST) will be available to states, tribes, and metropolitan planning organizations (MPOs) using “innovative strategies” that would have “long-term impact” on their transportation programs, including use for a program of surface transportation projects.  Metropolitan planning organizations will be given control of larger portions of funds (up to 8%) under FAST, to incentivize “high performing” MPOs, in their coordination with other MPOs, to have greater say in where to employ federal funding.

The GROW AMERICA Act is proposed to be funded from business tax reform, the details of which are expected at a later date.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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