U.S. Legislative Issues

 

On Tuesday, February 18, President Barack Obama delivered a speech in which he repeated his proposals for fuel economy and greenhouse gas emissions rules for medium- and heavy-duty trucks. The fuel standards, which will affect vehicles produced after 2018, are the second round of truck fuel standards initiated by the Administration. The first round in 2010 set standards for vehicles produced between 2014 and 2018. The National Highway Traffic Safety Administration (NHTSA) and the Environmental Protection Agency (EPA) will be jointly setting the standards.

Next, the President emphasized a Department of Energy program, the National Clean Fleets Partnership, which has worked to encourage private fleets to purchase more fuel efficient vehicles. Twenty-three companies have partnered with the Administration so far.

Finally, the President announced support for establishing an Energy Security Trust Fund that would fund research and development for advanced vehicle technologies. The money to start the fund would come from the repeal of oil and gas subsidies and would support "cost-effective technologies" such as vehicles that run on "electricity, homegrown biofuels, hydrogen, and domestically produced natural gas."

The President also proposed a new $200 million tax credit to "catalyze investment in the necessary infrastructure to support deployment of advanced vehicles at critical mass." The tax credit, which would only be available to private fleets, is intended to be fuel neutral.

Lastly, the president reiterated support for extending the cellulosic biofuels tax credit that expired on December 31, 2013. Not everyone is fully supportive of the President’s initiative. Trucking Industry representatives shared concerns that the proposals would raise costs, and more specifically, would be "technology forcing." Trucking companies are requesting the use of currently existing technologies to achieve further greenhouse gas emissions reductions and fuel efficiency.

The Society of Automotive Engineers (SAE) warned of the burden that would be placed on companies to buy new emissions control or fuel efficiency equipment that takes too long to yield economic benefits. The President laid out a timeline for adoption of the fuel economy and emissions rules by March 2016, with an expected Notice of Proposed Rulemaking (NPRM) by March 2015. Approval of Congress is necessary for repealing oil and gas subsidies, launching a Trust Fund, establishing a new tax credit, and extending an existing one.

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In a speech in St. Paul, Minnesota on February 26, President Obama laid out his goal of passing a new Transportation Bill before the Highway Trust Fund becomes insolvent later this summer. The President proposed a four year plan costing $302 Billion, to be paid for through closing corporate tax loopholes. The president’s four year authorization timeline is longer than the most recent transportation bill, MAP-21, which only lasted 27 months.

 

Many state transportation departments complained that the 27-month window made it difficult to plan long term projects. The President also announced an additional $600 million in TIGER competitive grants to fund transportation infrastructure projects. The Transportation Investment Generating Economic Recovery (TIGER) grant program is used by the Department of Transportation to "invest in road, rail, transit and port projects that promise to achieve critical national objectives."

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The Environmental Protection Agency (EPA) has requested that the District of Columbia Circuit Court throw out a lawsuit concerning its E15 Misfueling Rule brought by oil refiners and vehicle engine manufactures. In a legal brief filed on February 24, the EPA claims neither of the industries have standing to sue since they are not directly affected.

 

The rule in question is intended to help prevent misfueling of vehicles that cannot handle E15 (gasoline with up to 15 percent ethanol by volume) by outlawing misfueling, requiring E15 pumps to display a specific label (seen by clicking here), requiring product transfer documents to include certain information, and requiring manufacturers, blenders, and distributors of E15 to conduct surveys to assess compliance with the rule.

 

This suit is similar, but separate from one brought by the American Petroleum Institute and the Alliance of Automobile Manufactures in 2011 that is still working its way through the Federal Courts.

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On February 12, the Senate Committee on Environment and Public Works, chaired by Senator Barbra Boxer of California, held an initial hearing on Transportation authorization funding. Testifying before the hearing was Tom Donohue from the U.S. Chamber of Commerce, Richard Trumka from the AFL-CIO, Mike Hancock, Secretary of the Kentucky Transportation Cabinet and current President of AASHTO (American Association of State Highway and Transportation Officials), Dr. Pete Ruane, President and CEO of ARBTA (American Road and Transportation Builders Association), and Jay Timmons, President and CEO of the National Association of Manufacturers.

While MAP-21 authorizes transportation funding through September, the Congressional Budget Office estimates that the fund will run dry before then, with some saying it could happen as soon as June. Most of the money for roads comes from taxes on gasoline and diesel, but the tax, which hasn’t been raised since 1993, has fallen victim to inflation and has not kept pace with the rising cost of labor and construction materials.

Chairwoman Boxer said she intends to put a transportation bill up for a vote by her committee by the end of April, which is an ambitious timeline. During a January hearing of the House Transportation Committee, Chairman Bill Shuster noted he wanted to have the bill passed out of the House before the annual August recess, to allow time for negotiations between the House and the Senate on the final bill. The hearing, the first of many to come on the subject, tended to avoid specific policy issues, and focus on broad transportation principles.