As we turn the calendar to 2016, the transit industry is still celebrating the historic passage of the FAST-Act by Congress last December, while digesting the new policy shifts and working to figure out the legislation’s impact on day-to-day operations and future development plans.
The enactment of the first long-term surface transportation authorization bill in a decade, along with tax legislation that created permanent parity between the parking and transit portions of the commuter benefit and extended the alternative fuel tax credit, will allow the Congressional transportation authorizing and tax committees to focus on other priorities in 2016. However, the transit community should continue to make their voices heard on Capitol Hill — particularly in the annual budget and appropriations process. In addition, the transportation community should continue to push for a permanent solution to fix the highway trust fund, through either an increased motor fuels user fee, or some other means to raise revenue. Congress’ remain desire to overhaul the U.S. tax code may provide a compelling opportunity to accomplish this goal.
The Annual Budget Process
It is important for the transit industry to remember that while the FAST Act sets funding parameters for transportation programs, and provides adequate resources to fund programs at the specified levels, not a single dollar is available to spend without the passage of the annual appropriations bills. Historically, Congressional appropriators (for the most part) have honored spending levels set by the authorizing committees — especially for programs funded with highway trust fund dollars. However, budgetary rules changes over the years have eliminated any “guarantees.” Furthermore, since the transportation program growth under the FAST Act was in large part created from general fund transfers into the highway trust fund — rather than a gas tax increase or other revenue source, the “user fee” nature of the transportation program has further eroded. Without these supposed safeguards in place, appropriators may be less willing to honor the program funding levels set by the authorizers.
In addition, a portion of the transit program and the entire interstate passenger rail program are NOT part of the highway trust fund. These discretionary programs – which are even less protected in the budget process - include the FTA’s Capital Investment Grant program, the FRA’s PTC grant program, Amtrak and High Speed Rail grants, and the popular (and unauthorized) TIGER grant program. The transit industry must work with Congress to ensure that during the annual budget fights, Congress does not take away dollars that were set aside for rail and transit programs in the FAST Act, and use them to fund other programs or generally reduce the size of the federal budget.
The US Department of Transportation Regulatory Program
As is the case with many sweeping acts of Congress, the FAST Act provides broad policy goals and general program boundaries, while leaving much of the actual details to the regulators over at the U.S. DOT. In addition, believe it or not, the FTA is still working to finalize regulations to implement to National Safety Oversight Program and Transit Asset Management programs, which were authorized several years ago in MAP-21. Over the course of the coming year, transit industry professionals should closely monitor the U.S. DOT rulemaking process and provide feedback through the “notice and public comment” opportunities. This is the most effective way to ensure that your advocacy positions are recorded and considered. Here is a summary of some of the most important regulatory issued the USDOT will be facing this year:
• Implementation of the Bus Discretionary Program
One of the transit industry’s top priorities for the authorization bill was bringing back a discretionary component to the FTA’s Bus and Bus Facilities program, and the FAST Act delivered. The legislation provides more than $1.5 billion in discretionary grants over the five year authorization period – but provides little guidance to the FTA on how it should divide the funds among the nation’s transit providers. The FAST Act stipulates that 10% must go to rural providers, no one transit system can receive more than 10% of the total pot, and $55 million of the annual pot must support the acquisition of “no or low” emission vehicles. Beyond that, the bill states that “the Secretary shall consider the age and condition of buses, bus fleets, related equipment, and bus-related facilities.” The rest of the criteria will be left to the FTA.
The administration will be under a tremendous amount of pressure from Congress and the transit industry to issue the grant criteria to begin the competitive application process as soon as possible, so look for a “Notice of Funding Availability” that should give plenty of details about the exact criteria the FTA is looking for to put together that winning application. Hopefully, there will also be an opportunity for companies to weigh in on the criteria. The ultimate goal, of course, is that every transit provider has an equal opportunity to access these grants. However, the FTA often imposes its policy priorities through the grant distribution process, resulting in awards to properties that meet grant criteria that address the Administration’s goals.
• Establishment of Bus Procurement Pools
One of the major priorities for the FAST Act is to ease bus acquisition by creating procurement pools. The legislation provides for the establishment of programs through the State DOT’s, non-profit organizations, and the U.S. DOT itself. The DOT will be working to establish its own procurement clearinghouse, while guiding transit properties and bus manufacturers through the process of establishing local, state, and regional buying schedules. It will be critical for the transit industry- especially manufacturers and operators, to work together closely with the FTA to determine which procurement pool type works best for them, and develop the criteria for these programs to not only meet the FTA’s procurement requirements and safeguards, but also reach the goal to ease bus acquisition manufacturers while making vehicles more affordable for the customers.
• PTC Implementation
Another positive development in the FAST Act is the authorization of federal funds for the implementation of Positive Train Control to increase the safe operation of passenger trains. The legislation makes $199 million available for rail providers beginning in 2017, to go along with other discretionary funds appropriated last year and this year, along with an expansion of federal loan programs to make PTC implementation a reality. Rail providers will need to work closely with the Federal Rail Administration to implement the PTC program over the next year.
There will no doubt be other regulatory issues that the U.S. DOT will have to tackle to implement policy changes contained in the FAST Act. From changes to the New Starts Program, tweaks to the safety oversight initiatives, the creation of a new workforce development program and new roles for the FTA research department, it will be a busy year for the rulemakers at the U.S. DOT.
• Safety Plans and Asset Management
Not to be forgotten in all the FAST Act excitement, the FTA is still working to implement the safety oversight and asset management program requirement passed by Congress in MAP-21 (which passed in 2012 for those keeping score.) Last fall, the FTA issues “Notices of Proposed Rulemakings (NPRM’s)” on both the Transit Asset Management program and the Transit Safety Program. These programs, once fully implemented, will place new regulatory requirements on transit systems to develop annual safety plans, train staff, and track and manage all assets to ensure a “state of good repair.” This will require consider staff time and energy. However, as those who have participated in this process to date know, there are many outstanding questions that must be resolved with the FTA before these programs go into effect. Once these issues are resolved, transit systems must quickly prepare themselves to comply with the new regulatory requirements.
In conclusion, despite the groundbreaking and long term legislative victories of 2015, transit advocates should not consider taking a rest in 2016 (even if it’s well deserved!) As we have seen, there are many critical issues that Congress and DOT regulators must address to implement the FAST Act and ensure that the funding levels are honored. In addition, it’s important transit industry professionals- both public and private, to thank your Members of Congress for their work, and let them know how the FAST Act will impact your local community. I urge you all to stay sharp and focused- it won’t be long before we must turn our attention to the next authorization round, and fixing that ailing highway trust fund once and for all!
Paul Dean is the director of Dean & Dean Consulting LLC.
