Last night, the House Committee on Appropriations introduced H.R. 1865, the “Further Consolidated Appropriations Act 2020”, a “minibus” appropriations bill that provides funding for the U.S. Department of Transportation (DOT) and other departments and government agencies for fiscal year (FY) 2020. H.R. 1865 represents a bipartisan House-Senate agreement on the appropriations bills. The House and Senate are expected to pass the bill this week. At this time, it is expected that the President will sign the bill. Under current law, funding for non-essential government activities (including much of DOT) is set to expire at 11:59 p.m. Friday night (December 20).
Funding Levels and Grant Awards
The legislation provides more than $15.4 billion for public transportation and intercity passenger rail, including $12.9 billion for public transportation and $2.5 billion for intercity passenger rail grants. Although these total funding levels are a reduction of 3.6 percent (-$586 million) below FY 2019 enacted funding levels, the total funding levels are:
- $390 million more than the FY 2020 FAST Act authorization levels; and
- $1.2 billion more than the FY 2020 President’s Budget request.
In addition, the bill blocks the Rostenkowski Test, which required a $1.2 billion (12 percent) across-the-board cut to all transit formula funds in FY 2020. The bill also makes transit projects and alternative fuel charging infrastructure eligible for $781 million of additional Federal-aid Highway Surface Transportation Block Grant funding provided in the bill.
To view a table of the public transportation and intercity passenger rail funding included in the bill, please click here.
The bill provides specific statutory timelines for DOT to issue grant notices and awards for specific programs, including Better Utilizing Investments to Leverage Development (BUILD) and Federal-State Partnership for State of Good Repair rail programs.
Capital Investment Grants
The bill provides $1.98 billion for Capital Investment Grants (CIG) and requires the Federal Transit Administration (FTA) to allocate 85 percent of these funds by December 31, 2021. Of the $1.98 billion, the bill provides $1.5 billion for New Starts, $300 million for Core Capacity projects, $100 million for Small Starts, and $100 million for the Expedited Project Delivery for CIG Pilot Program.
Although the CIG funding level is a significant reduction from the FY 2019 funding level, the bill includes important policy provisions to ensure that FTA administers the CIG program in accordance with the procedural and substantive requirements of current law (49 U.S.C. 5309). Importantly, the bill prohibits FTA from:
- impeding or hindering a project from advancing or approving projects seeking a CIG federal share of more than 40 percent; and
- implementing or furthering new policies detailed in FTA’s June 29, 2018 “Dear Colleague” letter to CIG project sponsors. The Administration’s Dear Colleague letter established geographic diversity as a factor in FTA funding allocation decisions; considered DOT loans “in the context of” all federal funding sources requested by the project sponsor, and not separate from the federal funding sources; and included other Administration policy objectives. APTA has repeatedly communicated its serious concerns with the CIG policies outlined in the June 29 Dear Colleague letter to both Congress and the Administration. For APTA’s Summary of FTA’s June 29 CIG Dear Colleague, please click here.
In addition, in recent years, THUD appropriations acts have limited the CIG share for New Start projects to 51 percent. H.R. 1865 does not include this provision. Therefore, pursuant to the FAST Act, New Start projects may receive up to a 60 percent CIG share.
Finally, the bill authorizes projects in the Expedited Project Delivery for CIG Pilot Program to be eligible for funding under the CIG program without further evaluation or rating. However, the CIG funding cannot exceed the federal share of 25 percent under the Pilot Program.
The BUILD program (formerly TIGER) provides competitive grants for surface transportation projects, including public transportation and multi-modal projects. The bill provides $1 billion for BUILD grants. The legislation requires that DOT ensure equitable geographic distribution of the funds and investment in a variety of transportation modes. One-half of this funding must be awarded for grants in large urbanized areas (population of 200,000 or more). Moreover, DOT is specifically directed to use the selection criteria from the 2017 Notice of Funding Opportunity and “not use the Federal share or an applicant’s ability to generate non-Federal revenue as a selection criteria in awarding projects.”
The bill continues a provision of current appropriations law authorizing commuter railroads to apply for Consolidated Rail Infrastructure and Safety Improvements (CRISI) grants for implementation of positive train control. The bill also extends the authorization for transit-oriented development (TOD) projects for Railroad Rehabilitation and Improvement Financing (RRIF) loans and loan guarantees (which expired December 4, 2019) to September 30, 2020.
Finally, the bill includes several key policy provisions, such as directing FTA to make discretionary grant awards that are adequate for applicants to initiate and complete projects. In addition, the bill increases FTA’s administrative budget, for the first time since 2015.
During House floor consideration, we expect the House to add a package of tax provisions to the minibus appropriations bill. The alternative fuel excise tax credit (which provides a $0.50 per gasoline gallon equivalent tax credit to transit agencies fueling their vehicles with compressed (CNG) or liquefied (LNG) natural gas) and the alternative fuel refueling property credit are both extended through 2020. Both credits had expired in 2017, and this deal applies retroactively as well as prospectively for one year.
The package also makes an important change to the Commuter Tax Benefit that APTA supports. In 2017, Congress created new limitations to the commuter benefit, including new tax liabilities for tax-exempt entities that offer transportation benefits. The APTA Recommendations on Surface Transportation Law include a recommendation for Congress to repeal this unrelated business income tax (UBIT) for tax-exempt entities, and this legislation does that.