By Dean Franks, senior vice president, congressional relations, ARTBA

House Transportation & Infrastructure (T&I) Committee Chairman Bill Shuster (R-Pa.) unveiled his vision for an infrastructure package July 23, including a temporary revenue solution for the Highway Trust Fund (HTF).  Shuster, who is retiring in January after 17 years in Congress, has said for months that he was working on a package that he hoped would spur dialogue for whenever congressional leaders decide to consider an infrastructure package.  It was previously reported that Shuster and T&I Committee Ranking Member Peter DeFazio (D-Ore.) would release a joint proposal, but the plan is solely a Shuster initiative.

At a stakeholder briefing attended by ARTBA senior staff, Shuster said he would not be formally introducing a bill for House consideration even though he has released legislative text for his proposal.  He also does not plan to hold any additional infrastructure package hearings.

The plan comes five months after the Trump administration proposed an infrastructure package that aims to leverage $200 billion of federal infrastructure spending over 10 years into $1.3 trillion in state, local and private investment.  While the president’s plan did not gain much traction on Capitol Hill, the issue has not faded, and the release of the Shuster bill reinforces the high-level interest in addressing the nation’s infrastructure needs.

Regardless if an infrastructure package advances this year, ARTBA commends Chairman Shuster for bringing forward a proposal with real, user-based revenue and a process to deliver a permanent HTF revenue solution.

Highway Trust Fund Solvency

Chairman Shuster’s plan would stabilize and grow HTF revenue for 10 years and would initiate a process to produce a permanent solution. The following are the proposed revenue components:

  • Increase the gasoline tax by 15 cents and the diesel tax by 20 cents. The taxes would be phased in over three years, beginning in 2019, and indexed for inflation beginning in 2022;
  • An electric vehicle battery fee that charges at the manufacturer level a 10 percent tax on the wholesale cost of batteries for electric vehicles;
  • Imposition of a 4.3 cent per gallon tax for commuter passenger trains that use diesel fuel in 2019 and indexed to inflation beginning in 2022;
  • Elimination of the tax break on motor fuels certain commuter busses currently receive; and
  • A bicycle tire tax of 10 percent of the wholesale price at the manufacturer level on all tires larger than 26 inches (adult bicycle tires).

The Joint Committee on Taxation (JCT), which provides official revenue estimates for all federal tax legislation, projects these provisions would generate at least $284 billion over the next 10 years.  The Congressional Budget Office, the official score keeper of HTF spending, estimates a cumulative HTF shortfall of $161 billion through 2028.  Therefore, the Shuster plan would provide for an additional $123 billion in HTF resources over the next decade.

It would also require the HTF to absorb several current general fund (GF) expenditures, such as the supplemental GF spending on highways and transit in the FY 2018 and 2019 appropriations bills and the TIGER/BUILD intermodal project grant program.  As a result, it is difficult to project the specific growth in surface transportation infrastructure investment that would result under the Shuster plan.

Highway Trust Fund Reform

Although the gas tax is the foundation of Chairman Shuster’s proposal, he does not believe that is a long-term solution.  His plan would reduce all existing and new HTF tax rates to zero on September 30, 2028.  He calls for creating a commission that would be charged with identifying at least one (if not multiple) revenue mechanisms by January 15, 2021.  The proposal then requires the recommendations to receive expedited votes in the House and Senate.  Rep. Jim Renacci (R-Ohio) developed a similar concept for consideration during the FAST Act surface transportation reauthorization process in 2015, but Republican leaders did not allow it a vote.

The commission would consist of 15 members, five appointed by the Secretary of Transportation, in consultation with the Secretary of the Treasury.  The other 10 members would be split between the House and Senate leadership, with three appointments each by the Speaker of the House and Senate Majority Leader, and two commissioners selected by the House Minority Leader and the Senate Minority Leader.

This commission resembles two created by the 2005 SAFETEA-LU law.  Those commissions produced wide-ranging recommendations to grow HTF revenue, but Congress did not act on their findings.  However, there was no provision like the one in the Shuster plan that mandated the commissions’ recommendations be voted on in both chambers.

Meanwhile, the chairman proposes establishment of a national pilot program for mileage-based user fees.  This builds on an ARTBA-supported provision that was created in 2015’s FAST Act law that has allowed for various state and regional pilot programs to experiment with a vehicle mile traveled concept.  This would be a two-year, voluntary program, and any revenues generated would be directed towards the HTF.

Other Notable Reforms

Chairman Shuster also puts forward a series of policy reforms, including:

  • Codifying the Trump Administration’s executive order to institute a one agency practice for federal permitting—as opposed to the current process that subjects project sponsors to reviews from multiple agencies—and a two-year time limit to complete federal permits for infrastructure projects;
  • Reinstating earmarks for projects of regional and national significance;
  • Incentive grants for applicants that have leased an infrastructure asset to the private sector;
  • Repealing the $7.6 billion rescission of highway contract authority that is scheduled for the end of FY 2020;
  • Reauthorization of the Water Infrastructure Finance and Innovation Act that provides credit assistance for water infrastructure projects; and
  • Aligning federal spending on water transportation projects with annual Harbor Maintenance Trust Fund revenues—which currently exceed spending levels.

ARTBA will continue to advocate for congressional action on a comprehensive infrastructure investment package that is founded on a permanent and robust HTF revenue solution.  Chairman Shuster’s infrastructure proposal reinforces and supports our ongoing efforts. See the full proposal.