# Presentation: 277072

## Freight Provisions in SAFETEA-LU

*Tony Furst, HOFM Director*
*September 2005*

**Notes:**
Good afternoon and welcome to the second special session of Talking Freight on freight provisions of SAFTEA-LU.  We scheduled this session as a repeat of the first session to accommodate the large number of people who wanted to participate.  We have also added a couple of points in response to questions raised in the first session.

As before, we will highlight the sections of SAFETEA-LU which have direct or indirect consequences for freight.  These highlights are drawn from our initial reading of the 1,231 page legislation, and we may have missed something.  Please let us know if you find other provisions that we may have missed.

## Quick Impressions

- SAFETEA-LU builds on the strong foundation of ISTEA and TEA-21
- Funding increased to an average of $49 billion per year ($244 billion over 5 years) from and average of $33 billion per year in TEA-21 ($198 billion over 6 years)
- Contains many programs aimed at improving global connectivity, freight mobility and economic productivity
- Encourages creativity and finding new ways to solve existing problems

**Notes:**
If you do a search through the text of ISTEA or TEA-21 for the word “freight,” you will find far fewer occurrences than in the new legislation.  Many programs have been expanded or created to deal with freight issues.

## Freight Provisions (Programmatic)

- Section 1306: Freight Intermodal Distribution Pilot Grant Program
- Section 1305: Truck Parking Facilities
- Section 5204: Training and Education
- (h) Freight Planning and Capacity Building Program
- Section 5209: National Cooperative Freight Transportation Research Program

**Notes:**
These sections establish programs that are directly related to freight.  We will review them in greater detail in a moment.

## Freight Provisions (Finance)

- Section 1601: Transportation Infrastructure Finance and Innovation Act (TIFIA)
- Section 1602: State Infrastructure Banks (SIB)
- Section 11-1143 Tax-exempt Financing of Highway Projects and Rail Truck Transfer Facilities (Private Activity Bonds)
- Section 9002: Capital Grants for Rail Line Relocation Projects
- Section 9003: Rehabilitation and Improvement Financing

**Notes:**
Several sections expand the range of financing mechanisms for freight projects.

## Projects

- Section 1301: Projects of National and Regional Significance
- Section 1302: National Corridor Infrastructure Improvement Program
- Section 1934: Transportation Improvements
- Section 1701: High Priority Projects Program
- Section 1303: Coordinated Border Infrastructure Program

**Notes:**
Many of the specific projects funded in the legislation have major freight components.

## Commissions / Studies

- Section 1909: National Surface Transportation Policy and Revenue Study Commission
- Section 11-1142: National Surface Transportation Infrastructure Financing Commission
- Section 9007: Study of Rail Transportation and Regulation
- Section 4149: Office of Intermodalism – National Intermodal System Improvement Plan
- Section 5503: Motor Carrier Efficiency Study
- Section 1925: Community Enhancement Study

**Notes:**
Future legislation could have even greater focus on freight depending on the findings of several mandated studies.

## Related Activities

- Section 6001: Transportation Planning
- Section 5512: TRANSIMS
- Section 4118: Roadability
- Section 4101/4126: CVISN
- S&W Technical Amendments
- Real-Time Systems Management Information Program
- Other

**Notes:**
And there are many other provisions related to freight.

## Freight Intermodal Distribution Pilot Grant Program (1306)

- Program provides grants to States to facilitate and support intermodal freight transportation initiatives
- Projects are to reduce congestion into/out of ports and establish/expand intermodal facilities and inland freight distribution centers.
- Secretary to establish selection criteria.
- $30 million over 5 years (2005-2009) for 6 designated projects
- Report on Program due to Congress 8/10/08

**Notes:**
Among the freight programs established in SAFTEA-LU is a new intermodal distribution pilot program.  While the program is completely earmarked, selection criteria will be developed as required by law.  The criteria will be coordinated with those for projects of national and regional significance, and will hopefully provide a basis for the future evolution of freight programs.

## Truck Parking Facilities (1305)

- Pilot program to address the shortage of long-term parking for CMV on NHS
- Project applications to be submitted to DOT and approved by the Secretary
- Includes construction of new facilities, modifying existing facilities, ITS
- $25 million over 4 years (2006-2009)
- Report on Program due to Congress 8/10/08
- Related
- 1310 Interstate Oasis Program
- 1412 Idling Reduction Facilities on Interstate Rights-of-Way

**Notes:**
The new program of $6.25 million per year for truck parking facilities has potential synergies with the Interstate Oasis program and idling reduction programs.  We will be looking at ways to use performance measures such as data from our travel time in freight significant corridors project to assist in the selection of facilities.

## Freight Planning and Capacity Building Program (5204(h))

- Initiative to support enhancements to freight planning to better target investment and strengthen decision-making capacity of State and local agencies
- Eligible activities include research, training and education in best practices, peer exchange, data and analysis, agency reorganization, public-private relationship building
- $3.5 million over 4 years (2006-2009)

**Notes:**
Our freight professional development program now has its own funding to support courses, peer-to-peer exchanges, and other forms of technical assistance.

## National Cooperative Freight Transportation Research Program (5209)

- National research program to be established by Secretary in partnership with National Academy of Sciences (NAS)
- To be governed by an Advisory Committee selected by the NAS which will recommend a national research agenda, solicit and review research proposals, award contracts, and disseminate findings
- $15 million over 4 years (2006-2009)

**Notes:**
A new cooperative research program has been established for freight.  We are working with the National Academy of Sciences to get this program up and running soon, using the National Transit Cooperative Research program as a guide for establishing the institutional arrangements.

## Transportation Infrastructure Finance and Innovation Act (TIFIA) (1601)

- Program project eligibility expanded to include public freight rail facilities or private (freight rail) facilities providing public benefit to highway users; intermodal freight transfer facilities; and access to any of the facilities listed above.
- Minimum project size reduced to $50M (from $100M)
- Allows grouping of smaller related projects “with the common objective of improving the flow of goods”
- ITS project minimum reduced to $15M (from $30M)
- Budget authority - $610 million over 5 years (2005-2009)
- Lending authority cap a function of budget authority ~ $2B/yr

**Notes:**
Now to finance/  Eligibility for freight projects is expanded considerably in the TIFIA program.

The last two bullets take a little explanation.

As TIFIA makes loans, a certain amount needs to be allocated for various reasons for administering the loans. Those funds which are budget authority, set aside $122 million a year. In looking at the history of the TIFIA it translates into loan amounts $26 billion per year. 

## State Infrastructure Banks (SIB) (1602) 

- Program extended to all States
- Multi-state SIBs allowed
- SIB funds may be used for capital projects, credit enhancements, debt instrument financing, interest rate subsidization, credit insurance, and purchase and lease agreements
- SIB may provide loans and other credit assistance to public and private entities
- SIB rail accounts permitted

**Notes:**
The expansion of the state infrastructure program is yet another source of funding options for freight projects. 

## Private Activity Bonds (11-1143)

- Amended IRS statues to add Tax-exempt financing of privately owned or operated highway projects and rail-truck transfer facilities.
- Added a new qualifying entity “qualified highway or surface freight transfer facility.”
- Surface transportation projects ***receiving*** Federal assistance under Title 23
- Any facility for the transfer of freight from truck to rail (or vice versa) ***receiving*** Federal assistance under Title 23 or 49.
- National Limitation of $15 billion.

**Notes:**
The private activity bond is one of the more dramatic elements. In a nut shell this provision enables loans for these projects at a lower interest as the purchasers of bonds don't have to pay federal taxes on the incomes they receive. This places another option in the suite of financing options available to build and operate highway infrastructure. 

## Rail Transportation Provisions

- Capital **Grants** for Rail Line Relocation Projects (9002)
- For local rail line relocation and improvement projects.  States only may apply.
- Projects to result in improved vehicle traffic flow, improve quality of life and economic development
- Establish regs to carry out program (temp 4/1/06 - final 10/1/06)
- $1.4 billion over 4 years (2006-2009) (subject to appropriations)
- Rehabilitation and Improvement Financing (RRIF) (9003)
- Loans or loan guarantees for projects to enhance rail service and capacity
- Post substantive criteria and guidance on application process by 9/10/05
- $35 billion loan authority

**Notes:**
There are a number of rail transportation provisions.  9002 is a new program that will have regulations established as you see here., but is subject to appropriated funding. 

## Projects of National and Regional Significance (1301)

- Secretary to establish competitive grant application and selection criteria in regulations (2/10/06).  For States only.
- Eligible project costs include pre-construction activities, environmental mitigation, and operational improvements for any project eligible under 23 USC, including freight railroad projects
- Eligible project costs must equal or exceed the lesser of $500 million or 75% of a State’s Federal-Aid.
- $1.779 billion over 5 years (2005-2009) for 25 designated projects
**Annual** report due to Congress by first Monday in Feb.

**Notes:**
Projects of national and regional significance. These can be the big mega projects such as the heartland corridor from Norfolk to Columbus, the CREATE  program in Chicago, and Alameda Corridor. The legislation requires that these projects be multi modal and that the department develop an extensive set of eligibility criteria and the like, though as in the case of the pilot program we mentioned at the beginning of the project, the initial set of projects is totally earmarked; however, we believe that the criteria that we developed from this program will help guide it in the future. 

## National Corridor Infrastructure Improvement Program (1302)

- Secretary to establish a program for receiving grant applications and establish criteria for selection.  For States only.
- For projects in corridors of national significance to promote economic growth and international or interregional trade.
- connect existing highway system segments, facilitate regional mobility, serve increasing freight volume, serve international freight volume, reduce congestion and travel time, serve high-value cargo, and use innovative financing
- $1.948 billion over 5 years (2005-2009) for 33 designated projects

**Notes:**
Much like the projects of national significant, there are a number of other specific lists of projects and programs. There's, of course, the national corridor infrastructure improvement program, some of these projects listed here are similar to the projects and some overlap of the projects of national regional significance. One item involves Interstate 81 in Virginia, which adds specific relevance for freight. 

## High Priority Projects Program and Transportation Improvements

- High Priority Project Program (1701)
- $14.832 billion over 5 years (2005-2009)
- 5,173 designated projects, many of which affect freight mobility
- Transportation Improvements (1934)
- $Millions over 5 years (2005-2009)
- 465 designated projects, many of which affect freight mobility
- Gateway Rural Improvement Pilot Program (1946) - Vermont pilot program “to demonstrate the benefits to a rural rail corridor of a freight transportation gateway program” $30M (05-09)

**Notes:**
There are high priority projects. Some of the transportation improvements in here also include the Alameda Corridor, rail projects in Vermont, and a number of other specific individual projects. One side note, if you are searching through the text files or the pdf files that come from the government office, some of these project lists are actually bitmap files. So if you use the word search feature, you may not find them. Just look at the table of contents and plow through those 1,231 pages if the word search does not come up with the thing that you thought was in there. 

## Coordinated Border Infrastructure Program (1303)

- Secretary to establish a formula distribution program for Border States based on:
- 20% by commercial truck volume
- 30% by personal vehicle/bus volume
- 25% by freight volume by weight
- 25% by number of ports of entry
- Program funds may be used to construct transportation and supporting infrastructure, make operational improvements, modify regulatory procedures, and coordinate international planning and operations within the border region (within 100 miles of the border)
- Projects in Canada and Mexico are eligible for funding
- $833 million over 5 years (2005-2009)

**Notes:**
Unlike the other earmarked projects, this one distributes funds to the border states in accordance with the formula. And, of course, it's $833 million over five years. 

## Commissions

- National Surface Transportation Policy and Revenue Study Commission (1909)
- 12 members appointed by President & Congress
- Technical Advisory Committee estblshd by Secretary
- Final Report to Congress due 7/1/07
- $2.8M over 2 years (’06-’07)
- National Surface Transportation Infrastructure Financing Commission (11-1142)
- 15 members appointed by the Secretary & Congress
- Final Report due within 2 years of first meeting
- To be funded out of GOE in DOT & Treasury

**Notes:**
Now, the future of the freight programs discussions, which will need to be done prior to the end of SAFETEA-LU at the end of 2009, will depend in large part on the recommendations that are made by national commissions and Congressionally mandated studies to be done in the near term so that we have enough time to discuss the results and develop legislation following. The largest one of these is the national surface transportation policy and revenue study commission, which covers both the condition of performance, highway, rail and other surface transportation systems, but also how to pay for the future needs all the way out to a 50-year horizon. This commission will have to complete its work in the next two years, again, so that we can have enough time to discuss the findings as we look towards the future. There is a very similar commission required on the financing side. The second one you see on this slide. They're looking at ways to try to combine the work of the two required commissions, since they do have some strong overlap. There are a number of specific studies and the intermodal system improvement plan which could help to shape future reauthorization. 

## Studies

- Study of Rail Transportation and Regulation (9007)
- Secretary will coordinate with TRB to study performance of the nation’s RR regarding service levels, service quality and rates; projected demand for freight transportation over next 2 decades and constraints limiting the RR ability to meet that demand
- Report to Congress due 1 year after the Secretary and the TRB enter into an arrangement of the study.
- $1.8 million over 2 years (2006-2007)
- Motor Carrier Efficiency Study (5503)
- FMCSA to conduct study to identify inefficiencies in the transportation of freight; evaluate wireless technologies to reduce id’d inefficiencies; and conduct, as appropriate, field tests to validate
- Annual report to Congress on progress
- $5M over four years (2006-2009)

## Studies (cont.)

- Community Enhancement Study (1925)
- How well designed transportation projects promote, *inter alia*, economic development
- Report due 9/20/07
- $2M over 2 years (2006-2007)
- National Intermodal System Improvement Plan (4149)
- To include emerging trends that could impact the national system, recommended intermodal R&D, policy, transportation decision-making, financing...
- Office of Intermodalism
- Progress report by 8/10/07, follow-up report by 8/10/09.

## Related Activities

- Transportation Planning (6001)
**Both MPO and State**
- Scope of planning process / factors to consider
- Economic vitality, especially by enabling global competitiveness, productivity & efficiency
- Increase in mobility for people and freight
- Enhance integration and connectivity of the transportation system for people and freight
- Participation by interested parties in the planning process includes freight shippers and providers of freight transportation services
**MPO**
- Operational and Management Strategies must be included in the Transportation Improvement Plan (TIP).

## Related Activities (cont.) 

- TRANSIMS (5512)
- Expansion of this network model into, *inter alia*,  economic analysis, freight movement and port studies.
- Roadability (4118)
- Promulgate regulations establishing a program to ensure that intermodal equipment used to transport intermodal containers is safe and systematically maintained.  Regs due 8/10/06.
- CVISN (4126)
- Continuation of this program that seeks to improve safety and productivity of commercial motor vehicles and drivers, and reduce costs associated with commercial vehicle operations.
- $100M for four years (2006-2009)

**Notes:**
The TRANSIMS modeling effort being done is required to have a freight component. A a number of very specific changes for truck size and weight, and dealing with either specific industries or types of vehicles or particular parts of the country, and by the way, there are also related provisions in the energy bill. 

## Related Activities (cont.)

- S&W Technical Amendments
- 1309 Extension of Public Transit Vehicle Exemption from Axle Weight Restrictions
- 4112 Nebraska Custom Harvesters Length Exemption
- 4141 Driveaway Saddlemount Vehicles
- Energy Bill (756) weight exemption for carrying idle reduction equipment (?)

**Notes:**
There are a number of very specific changes for truck size and weight, and dealing with either specific industries or types of vehicles or particular parts of the country. There are also related provisions in the energy bill. 

## Related Activities (cont.)

- Real-Time Systems Management Information Program (1201)
- Establish capability in all States to provide real time:
-  Monitoring of traffic conditions
-  Sharing of information
- Purpose – ease congestion, improve response to severe weather, accidents, and other incidents; and enhanced security
- Eligible for funding under NHS, STP, and CMAQ

**Notes:**
Looking out at the world that freight operates in the Federal Highway Administration, the greater world of Operations, there is a provision for realtime systems management information, which is part of the congestion relief program. Within two years, we are to establish data exchange formats to ensure the information collected on typically roadside monitor devices such as loop detectors can be shared across jurisdictional boundaries. This could have some interesting links with our freight performance measurements program that many of you have been following, and we look forward to this being a new source of useful, more timely information on freight and other activities. 

## Related Activities (cont.)

- Other
- Motor Carrier Provisions in Title IV
- HazMat provisions in Title VII
- Data
- Motor Carrier data (4108, 4109, 4304-4306)
- Transportation Safety Information System  (5501)
- Bureau of Transportation Statistics (5601)

**Notes:**
There are a whole host of motor carrier provisions in Title IV, but that's really the Federal Motor Carrier Safety Administration, so we can only provide a few comments. For those interested in modal carriers, look at Title IV. There's a hazardous materials section in Title VII that involved definitions and authorities as to who should be doing what. Particularly now that we have a Pipeline and Hazardous Materials Safety Administration, it helps to clarify a few points. 
There are a number of provisions related to data. Motor carrier data, registration information and the like has several provisions in Title IV. There's a transportation safety information system provision in Title V. There are a number of other safety data requirements, not specific to freight, but certainly that can affect freight. 
The Bureau of Transportation Statistics, which provides a number of fee freight data programs which is in section 56.01. In all of these slides the number in the parenthesis is, of course, the number in SAFETEA-LU. 

## Process	

- The Office of the Secretary of Transportation (OST) will promulgate a first cut of the Legislative Implementation Plan (LIP)
- The respective agencies in DOT will provide feedback to OST
- A final LIP will be generated for the Department and we begin implementation of the legislation.

**Notes:**
Finally, where we are in the process, the Office of the Secretary of Transportation will be putting out the first cut of the legislation implementation plan which will require comment from within the department and once that plan is finalized, we will have our marching orders for how to make these 1,231 pages of legislation into the laws, regulations, actions and spending that is needed to keep the highway and other freight programs moving along. Once we have a chance to look at the draft plan, we will be getting our comments back to OST and when the final plan is out hopefully in the very near future, we will, of course, publish the contents and let you know how all of these various pieces are going. 

***   ******Questions?***