U.S. Legislative Issues

On April 29, the Obama Administration released a detailed proposal for a transportation bill. The bill would invest $302 Billion over four years on the nation’s roads, tunnels, rail systems, and mass transit. The plan, known as the GROW AMERICA Act, would draw $150 billion in one-time transitional revenue from tax reform to pay for transportation improvements.

The announcement comes about three months before the Highway Trust Fund becomes insolvent and five months before the current transportation bill, MAP-21, expires in September. President Obama’s plan would use the $87 billion to shore up the shortfall in the Highway Trust Fund. Money for the Highway Trust Fund 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. The president’s plan would not adjust the gasoline or diesel excise taxes.

One of the most popular criticisms of MAP-21 was the short time frame for which the bill authorized spending. Many state transportation departments complained, saying a longer-term bill is needed to give state and local governments more certainty when planning out infrastructure projects. Many in Congress have expressed a desire to authorize a longer term plan, but have been unable to find enough money to fund one.

One notable change in policy under the GROW AMERICA Act is the proposal to allow states to add tolls to existing highway lanes. Right now, states are required to construct new lanes on highways that they want to add to tolls to, but Obama’s bill would allow states to apply to the Department of Transportation for approval to install tolls on existing roads. It is unclear how much money would be generated from additional tolling.

 

Soon after the plan’s release, groups on both sides tried to make their point, with the International Bridge, Tunnel, and Turnpike Association saying it would give states more flexibility in funding their roads, and the Alliance for Toll-Free Interstates saying tolling was an inefficient funding mechanism because of the expensive nature of administering a toll system.

Among other items included in the bill are an increases the penalty for automakers that don't quickly recall unsafe vehicles, a response to the recent GM recall.

NAFA wrote to the members of the Senate Finance Committee, urging the passage of "tax extenders" legislation. NAFA has asked Congress to extend of the $0.50 per gallon alternative fuel tax credit for natural gas and propane, a $1.00 per gallon tax credit for biodiesel, and the Bonus Modified Accelerated Cost Recovery System (MACRS) or "bonus depreciation" program. This allows extra depreciation to be taken for 50 percent of a truck’s purchase price and an extra bonus depreciation deduction of up to $8,000 for automobiles, and light trucks, vans, and SUVs, which expired at the end of last year. In a letter to congressional leaders, NAFA explained that fleet management professionals use the price of fuel as a factor in calculating annual budgets and finalizing vehicle acquisition decisions, but that the uncertainty of these tax credits has added undue uncertainty to the process.

On April 3, the Senate Finance Committee passed bipartisan legislation renewing a set of provisions that have expired or will expire at the end of this year. The bill, entitled the Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act, was approved by bipartisan voice vote. The Senate committee-passed bill, which extends the incentives to December 31, 2015, retroactive to January 1 of this year, is now pending before the full Senate.

The House Ways & Means Committee took up a select set of tax incentives on April 29, including an expensing deduction, allowed per Section 179 of the Internal Revenue Code, which allows businesses to expense up to $500,000 in qualified equipment. Currently, due to Congressional inaction, the maximum deduction is $25,000. The threshold was reduced dramatically upon expiration of the tax incentive at the end of 2013. Other tax incentives of importance to NAFA, such as energy tax credits, were not examined in the meeting.

On May 6, the Federal Highway Administration (FHWA) will hold a public meeting to will "provide an update on the progress" of a study analyzing the safety and economic implications of changing the federal truck size and weight limits, including permitting six-axle, 97,000-pound combinations on the nation’s roads. It will compare trucks operating at current size and weight limits to bigger and heavier trucks on the basis of crash rates and other safety risk factors, as well as the costs of effective enforcement, and the impact of the equipment on pavements and bridges. It also will look into the impact on truck-rail competition.

The study is a compromise that arose from the last transportation law, MAP 21, that Congress passed in 2012. The trucking industry was pressing for a provision that would have given states the authority to permit the six-axle, 97,000 pound vehicles on Interstates. Unable to overcome opposition from safety advocacy groups and railroads, they settled instead on a study. As Congress moves forward with another transportation authorization bill, the results of the study will play heavily on the continuing debate.

The webinar will be held from 1:00 p.m. to 3:00 p.m. EST on May 6. For more information, visit: https://federalregister.gov/a/2014-08457

In 2013, the National Transportation Safety Board (NTSB) issued four specific recommendations to the Federal Motor Carrier Safety Administration (FMCSA) regarding commercial driver license (CDL) regulations for single-unit trucks under 26,001 pounds. NTSB, which is charged with investigating transportation incidents and making safety recommendations to Congress and regulatory agencies in the Executive branch, does not have any rulemaking authority. The NTSB recommendations were issued "because of concerns about the safety record of single-unit trucks and an interest in identifying countermeasures to address the risks posed by these vehicles." The four FMCSA recommendations were to:

• Improve future studies of crash risk
• Study the frequency of which single-unit truck drivers are operating with invalid licenses
• Evaluate the potential benefits of extending commercial driver licensure (CDL) requirements to the operation of single-unit trucks under 26,001 pounds
• Extend the CDL regulations for to single-unit trucks under 26,001 pounds if benefits are shown from the evaluation

The FMCSA responded to the first two recommendations in a manner that satisfied the NTSB, but pushed back against extending CDL requirements for single-unit trucks under 26,001 pounds. FMCSA stated that it was "not aware of any research studies" that provided "benefits which exceed the costs of such a change" and that "FMCSA's analysis of available data...does not support extending current CDL requirements to operators of CMVs below 26,000 pounds."

The FMCSA’s response was met with disapproval by the NTSB, which urges the FMCSA "to reconsider [its] position and consider using existing data sources, such as the Motor Carrier Management Information System, to further analyze the safety benefits of extending the current CDL requirements." The NTSB has left both remaining recommendations listed as pending.