As part of his campaign, President Trump promised to rebuild America’s infrastructure. Both Republicans and Democrats have expressed support for this goal, and in the months immediately following the president’s inauguration, it seemed as if infrastructure might be the one issue that members from both parties could agree on.
Almost two years out from the 2016 elections, it is now clear that a comprehensive infrastructure plan will not be enacted before the end of this Congress. Instead of moving infrastructure in the opening days of this administration, Congress and the White House instead focused on healthcare and tax reform.
Although President Trump issued his “Legislative Outline for Rebuilding Infrastructure in America,” in February 2018, his plan did not specify how his proposals would be paid for. While his plan did put forward interesting ideas to spur investment in infrastructure, discussions on the proposal have stalled. This has left infrastructure investment and reform as an often discussed, but unfortunately ignored, legislative priority.
In an effort to continue the conversation on infrastructure, on July 23, 2018, House Transportation and Infrastructure Committee Chairman Bill Shuster released a draft infrastructure plan. While this legislation most likely won’t be considered by Congress before the end of the year, it represents an important starting point on infrastructure discussions and will help to keep the issue on Congress’ agenda. In releasing the legislation, Chairman Shuster said, “This discussion draft does not represent a complete and final infrastructure bill. It is meant to reignite discussions amongst my colleagues, and I urge all Members to be open-minded and willing to work together in considering real solutions that will give America the modern-day infrastructure it needs.”
Of particular interest to our industry, Chairman Shuster’s proposal includes much-needed investments and improvements to water infrastructure. Additionally, the bill addresses funding for the Highway Trust Fund (HTF), promotes innovative mechanisms to facilitate private investment in infrastructure, and reduces regulatory burdens. It is very encouraging that these proposals were included in this draft, and as conversations with lawmakers continue about infrastructure, it will be necessary to highlight their inclusion and demonstrate the importance of addressing these issues in any final bill.
While this legislation most likely won’t be considered by Congress before the end of the year, it represents an important starting point on infrastructure discussions.
For water infrastructure, this legislative proposal would reauthorize the Clean Water State Revolving Fund (CWSRF) program. The CWSRF is one of the most important and effective programs that protects clean water and public health. Originally enacted by the Water Quality Act of 1987, the CWSRF program has continued to receive funding even though its authorization expired in 1994. Most recently, for Fiscal Year 2018, Congress provided $1.694 billion for the program. Chairman Shuster’s proposal would authorize $3 billion for this program from Fiscal Year 2019 through 2023. Additionally, the bill would simplify the process for states and communities seeking assistance through this program and make additional assistance available to communities of fewer than 10,000 people.
Reauthorization of the CWSRF has been a long-time goal for NUCA. While the Chairman’s proposal doesn’t address some issues that have stymied reauthorization in the past, such as reforming the program’s allocation formula, the inclusion of the reauthorization recognizes the importance of this program and gives us a foothold in negotiations.
In addition to reauthorizing the CWSRF, the draft proposal reauthorizes and funds the Water Infrastructure Finance and Innovation Act (WIFIA) loan program. The legislation would authorize $50 million per year through 2024. There has been a great deal of interest in WIFIA, and its inclusion in this proposal indicates continued support for the program.
The discussion draft also includes regulatory reforms to Section 401 of the Clean Water Act, which some states have used to delay and prevent the issuance of water quality certifications that are necessary for FERC-permitted projects. Specifically, the bill would clarify the scope of requirements a state may consider when examining an application. This legislation would ensure that states limit their examination of an application to the pertinent federal and state water quality laws.
Apart from these provisions that address water infrastructure, Chairman Shuster’s proposal also addresses the long-term stability of the HTF. As NUCA members know, the HTF is set to become insolvent in 2021. To fix this, this legislation would provide for a short-term solution by increasing the existing federal gas tax and diesel fuel tax by 15 cents and 20 cents per gallon, respectively, over three years. After calendar year 2021, the taxes would be indexed to inflation through 2028.
For the long term, the bill would establish a “Highway Trust Fund Commission” that would be responsible for crafting a report to Congress with recommendations for the long-term stability of the HTF. Congress could then consider these recommendations as legislation under expedited procedures. Importantly, the discussion draft prohibits the commission from recommending a continuation or expansion of the gas tax as a long-term solution. Essentially, Chairman Shuster’s plan requires a new combination of funding mechanisms for the HTF. One potential funding source could be a per-mile user fee, and the draft bill provides for the establishment of a pilot program to test this idea.
In addition to these provisions, the Chairman’s draft legislation includes other provisions designed to streamline the project approval process, promote public-private partnerships, and enable new financing mechanisms. Taken together, these represent a strong starting point for discussions of an infrastructure package.
While Chairman Shuster has put together a thoughtful proposal, given the midterm elections coming up in November, as well as Congress’ challenges in moving any large legislative package, it is extremely unlikely that this legislation will be passed before the end of this year. In particular, a majority of members are unlikely to come out in favor of the HTF solution in this legislation because they oppose any increase in the gas tax. Furthermore, given that Democrats have a better than even chance of taking the House majority, they are unlikely to cut a deal when they might soon have a better negotiating position.
With that said, it is important for NUCA to highlight the positive aspects of Chairman Shuster’s plan, and continue to engage our lawmakers and hold them accountable to their stated support for infrastructure.