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Eno Transportation Weekly

House DOT Appropriations Bill Released; Makes $900M Available for NY/NJ Gateway Program

July 13, 2017 

The House Subcommittee on Transportation-Housing appropriations on July 11 approved a draft bill providing $18.8 billion in discretionary appropriations and $58.8 billion in contract authority obligation for the Department of Transportation. The bill text can be read here.

The markup session was brief (just 18 minutes) and uneventful (no amendments were offered – those will be reserved for the full Appropriations Committee markup of the bill on Monday evening).

(For subscribers, our full bill analysis is behind the paywall here.)

Original article of July 10, 2017 follows.

Gateway. The most prominent feature of the draft bill is an attempt by the new chairman of the full Appropriations Committee, Rodney Frelinghuysen (R-NJ), to make the Gateway Program of passenger rail infrastructure projects in New Jersey and New York eligible for as much money as possible without violating Congress’s self-imposed ban on earmarks. He appears to have succeeded – an initial read-through of the bill indicates that the Gateway Program could wind up getting $900 million from the programs funded by the bill in 2018 if all goes right.

(And none of that Gateway money is from the Highway Trust Fund. To put that number in perspective, the total amount of discretionary appropriations for USDOT in the House bill (gross, before rescissions and offsetting fees) is about $18.8 billion (this excludes trust fund contract authority, obligation limitations, etc.). Once you subtract $13.4 billion for aviation programs, that leaves about $5.4 billion in discretionary appropriations for non-aviation USDOT programs. $900 million is one out of every six dollars of discretionary appropriations for non-aviation programs at USDOT.

(See sidebar at the end of this article answering the question, “How Is the House’s Money for Gateway Not an Earmark?”)

This is a strong counter-response to the recent decision by the Trump Administration to put some distance between itself and the Gateway Program, the the total cost for which could be as high as $30 billion.

However, tradeoffs had to be made, and the Gateway money comes at the expense of the TIGER grant program and mass transit “new starts.”

Rail grants. Each year, about 90 percent of total USDOT discretionary appropriations go to just five programs: TIGER grants, FAA Operations, FAA Facilities and Equipment, Amtrak, and FTA Capital Investment Grants. The House bill adds a sixth big discretionary program: the Federal-State Partnership for State of Good Repair grant program for the Northeast Corridor run by the Federal Railroad Administration under 49 U.S.C. §24911. This program was created by the FAST Act in December 2015 (to help programs like Gateway, according to its authors), but only got a $25 million appropriation in 2017, and President Trump only requested $26 million in 2018 (the FAST Act authorized level in 2018 was an aspirational $175 million).

The House appropriations bill gives this program $500 million while zeroing out the TIGER program (which got $500 million last year and the year before). The bill language does not earmark the money but directs that “the Secretary shall first give preference to eligible projects for which the environmental impact statement required under the National Environmental Policy Act and design work is already complete at the time of the grant application review, or to projects that address major critical assets which have conditions that pose a substantial risk now or in the future to the reliability of train service.”

Gateway’s Portal North Bridge has had its EIS and final design complete since 2008, and the rest of that language is clearly directed at the new Hudson River Tunnel project of Gateway.

(As far as killing TIGER goes, yes, President Trump proposed to do so, but House Republicans have routinely zeroed out the program in their bill in past years (in FY11, FY12, FY13, and FY14) as a negotiating strategy – TIGER was created and sustained by Senate appropriators, and by lowballing the program in their own bill each year, the House forces the Senate to give up something else big in eventual conference negotiations.)

New starts. Then we have the mass transit Capital Investment Grant (CIG) program, which received $2.4 billion last year. President Trump proposed to reduce that to $1.2 billion in 2018, which would be enough to pay the annual installments of projects that had grant agreements signed through May 2017 but would not be enough to allow any new projects to start construction.

The House bill provides $1.75 billion for the program – $660 million less than last year but $521 million more than requested by President Trump. However, at least $400 million of the money appears dedicated to Gateway. The text of the bill sets aside $1.008 billion for the FY 2018 installments of new starts with signed full funding grant agreements (the same as the budget request), $145.7 million for core capacity projects, and $182 million for one-off “small starts.” After the one percent oversight set-aside, the remaining $400 million in the account “shall be available for projects authorized under section 5309(q).”

The FAST Act added a new subsection (q) at the end of 49 U.S.C. §5309, allowing CIG account funds to be made available to make “grants for new fixed guideway capital projects and core capacity improvement projects that provide both public transportation and intercity passenger rail service.” As it happens, the Gateway program, especially the proposed new Hudson River Tunnel, serves both public transportation (New Jersey Transit trains) and intercity passenger rail (Amtrak trains).

However, this leaves nothing left in the CIG account for any of the new projects that expect to get their FFGAs signed in 2018 or sooner – no Maryland Purple Line, no Santa Ana streetcar, no Los Angeles Westside Section 3, no Seattle Lynwood Link, and no money for either of the two new systems in Minneapolis that want to get their agreements signed in 2018. If the House bill were to be enacted, all those projects would have to wait until at least 2019 to get their FFGAs signed, at which point they would have to compete with the second year installments for any Gateway FFGAs, plus whatever the §5309 share of the gigantic $4.8 billion BART Silicon Valley extension turns out to be.

The other three of the “big six” discretionary programs at USDOT are pretty much at par: FAA Operations gets a $160 million increase over last year (1.6 percent), FAA Facilities and Equipment gets a hard freeze at $2.855 billion, and total grants to Amtrak are $67 million below last year (a 4.5 percent cut, but money for Gateway is to some extent fungible with money from Amtrak’s Northeast Corridor appropriation – but we won’t know how much until Amtrak submits its full FY 2018 budget justification that shows how much of its NEC capital spending will come from ticket fares and debt versus from the annual federal appropriation, and this justification is already six weeks late).

How the Senate responds to this Gateway-centric approach will be interesting – especially since none of the members of the Senate Appropriations Committee happen to be from New York or New Jersey. (Chuck Schumer (D-NY) is Minority Leader, however.)

Other highlights of the bill follow. Articles summarizing the bill in greater detail will follow later in the week.

FAST Act compliance. The House bill provides every dollar of obligation limitation on Highway Trust Fund contract authority recommended by the FAST Act of 2015 – $55.372 billion (plus an extra $100 million obligation for FMCSA to spend some old contract authority).

Highway rescission. The House bill rescinds $800 million in federal-aid highway contract authority balances apportioned to states via formula, to take effect November 30, 2017. A similar rescission in the FY 2017 act cut highway balances by $857 million.

Airport grants. The House bill once again provides an obligation limitation on the Airport Improvement Program of $3.350 billion, the same as the annual amount of contract authority in each of the last six years per 49 U.S.C. §48103. If an authorization law with a higher amount for 2018 is enacted before the appropriations bill is finalized this fall/winter, the limitation in the appropriations bill could easily be increased to match it.

Essential Air Service. The Administration proposed to kill the discretionary appropriation for this subsidy program; the House bill gives the program the same $150 million in 2018 that it received in 2017.

WMATA. The House bill appropriates another $150 million for the ninth annual installment of the ten-year, $1.5 billion capital subsidy campaign for the Washington, DC-area subway system authorized by title VI of Division B of the 2008 rail law.

California high-speed rail. Sections 151 and 152 of the House bill prevent any funds in the bill from going towards high-speed rail in California or to the California High-Speed Rail Authority (CHSRA), prevent the FRA from administering the tapered match grant agreement with CHSRA, and prevent the Surface Transportation Board from approving any California HSR segments until the entire system is ready for approval.

Federal preemption of state trucking laws. Section 134 of the House bill prevents states from regulating truckers whose hours of service are regulated by federal law.

 

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How Is the House’s Money for Gateway Not an Earmark?

Clause 9(e) of House rule XXI defines a “Congressional earmark” and the definition is identical to the Senate language in clause 5(a) of Senate rule XLIV. In order to be considered an “earmark,” an item of bill or report language must meet three tests:

  1. The item must be included “primarily at the request of” a Member of Congress. This rule has been interpreted to mean that if the Administration requests something specific, it isn’t a Congressional earmark.
  2. The item must provide, authorize or recommend a specific amount of money for something, and…
  3. The item must direct that specific amount of money “to an entity, or targeted to a specific State, locality or Congressional district, other than through a statutory or administrative formula-driven or competitive award process.”

Programs that give direct benefit to narrowly-defined multi-state regions are allowed because they do not allocate money to a “specific State, locality or Congressional district.” Witness the annual appropriations for the Appalachian Regional Commission, the Delta Regional Commission, the Northern Border Regional Commission, and the Southeast Crescent Regional Commission. And, apparently, appropriators are allowed to fund ongoing programs that only benefit a single state (Denali Commission).

And Congress is allowed to put conditions on funding so that a very few projects, or maybe even a single project, are eligible – so long as the language in the bill or committee report does not mention a State, locality or Congressional district.

In this case, the bill language that gives Gateway preference for the $500 million in rail grants says only that “the Secretary shall first give preference to eligible projects for which the environmental impact statement required under the National Environmental Policy Act and design work is already complete at the time of the grant application review, or to projects that address major critical assets which have conditions that pose a substantial risk now or in the future to the reliability of train service.”

And the only bill language pertaining to Gateway in the mass transit grant section says that “$400,000,000 shall be available for projects authorized under section 5309(q) [of title 49 U.S.C.]” – no mention of a State, locality or Congressional District – but subsection (q) only applies to joint Amtrak-transit projects, which in the near future pretty much means Gateway.