FHWA’s Bhatt Gives Senate a Status Update

Federal Highway Administrator Shailen Bhatt gave the Senate Environment and Public Works Committee an update on the FHWA’s workings this week at a June 5 hearing.

The hearing was friendly, reflecting Bhatt’s popularity as a state highway official with experience in red (Kentucky), blue (Delaware), and purple (Colorado) states.

As usual, most Senators only showed up long enough to ask their five minutes worth of questions and then immediately left the room, so there was some significant overlap on some questions when late-arriving Senators re-asked questions that had been asked earlier.

Baltimore bridge. Committee chairman Tom Carper (D-DE) asked about the Francis Scott Key Bridge at the start of the hearing. Bhatt said that FHWA’s Emergency Relief fund currently has about $850 million in available funding, against around $4.4 billion in pending requests, which leaves $3.5 billion in unmet needs, of which $1.5 billion is the penciled-in total for the Key Bridge. Obviously, Congress will have to appropriate several billion dollars for the ER backlog the next time they are considering a major package of appropriations for disaster relief.

Bhatt also confirmed that FHWA’s ER fund will be entitled by law to Maryland’s $350 million insurance policy that the state had held on the old bridge, as well as possible recoupment of the ship’s liability insurance to the extent it becomes available via court judgment later on, as needed to offset ER spending on bridge replacement.

Home-state Sen. Ben Cardin (D-MD) later asked if the Biden Administration shared his urgency for Congress to pass a special law increasing the federal share for Key Bridge reconstruction through the ER program from the statutory 90 percent to 100 percent, as Congress previously did for the 2007 Minneapolis I-35W and 2009 Louisiana I-10 bridge collapses. Bhatt replied that yes, the President has been very clear that he wants 100 percent federal funding. They indicated that the deadline will be late in 2024, when Maryland DOT announces the team that will reconstruct the bridge, at which point money will need to start flowing in earnest.

August redistribution. Switching to something that affects every state, Sen. Pete Ricketts (R-NE) asked about the ever-increasing “August redistribution” of highway funding, which gave state DOTs a total of $7.9 billion in “use or lose it” highway funding in the last month of fiscal 2023 and may give as much as $8.7 billion later this summer. (The “AR” was routinely under $2 billion per year until a few years ago.)

Ricketts got Bhatt to confirm that, if Congress doesn’t change the law to amend how the process works, that the size of the August Redistribution will continue to increase in 2025, as even more money is taken “off the top” at the start of the year for non-formula programs and gets redistributed to state formula money at the end of the year. Bhatt added that the Administration’s budget proposed one legislative solution, to possibly be enacted in the annual DOT appropriations bill, but that there are other possible solutions and that Congress needs to pick one.

Bhatt also added that FHWA is reaching out to states earlier than ever before in this process, trying to get them to plan ahead so they have room to sign a significant number of new project agreements in September 2024. But he added that the overall formula funding increase under the IIJA allowed state DOTs to pull so many projects “off the shelf” and fund them normally that there aren’t as many ready-to-go projects out there anymore.

Highway Trust Fund. Carper asked Bhatt about the status of the 50-state mileage user fee pilot program mandated by section 13002 of the Infrastructure Investment and Jobs Act. In order to design and administer the pilot program, the law required the Secretary to appoint an advisory board by mid-February 2022. More than two years later, there is still no advisory board.

Bhatt said that FHWA has pushed its list of names for the advisory board to the Secretary’s office to Secretary Buttigieg’s office and expects a public announcement “very soon.”

Eventually, the results of the national VMT pilot would need to be weighed against the highway cost allocation study mandated by section 11530 of the IIJA in order to determine which classes of vehicles should pay which mileage rate. Sen. Cynthia Lummis (R-WY) asked about the status of the cost allocation study, but Bhatt said he would have to get back to her after the hearing.

EV chargers. The closest that the hearing came to real acrimony was when Sen. Jeff Merkley (D-OR) came by to express his extreme displeasure at the rate at which the IIJA’s electric vehicle charging grant funding was putting actual chargers out on the street. Merkley called the current installation rate (just six states have installed any charging stations at all under the program) “pathetic,” but Bhatt said that things are about to really get going, with several thousand installations in the second half of 2024, and that the program is still on track to meet the President’s goal of 500 thousand charging ports (not stations, ports, as in one port per vehicle at a time) by 2030.

Merkley also said that he thought it logical that Congress amend the law that prohibits commercial activities in Interstate rest areas to make an exception for EV charging stations. Bhatt noted that, back in Colorado, the rest areas are already wired for EV charging, but because of the law, no chargers can be installed – but he stopped short of endorsing a change to the law.

Buy America. Lummis also asked about waivers of the strengthened Buy America rules established by the IIJA, mentioning a short-term gap between the rules as written and the actual availability of US-made components in the real world. Bhatt acknowledged that there is an inherent tension between the President’s two stated goals of ASAP project delivery and Buy America manufacturing employment protection, and FHWA continues to accept feedback from constructors to find problematic areas that need waivers.

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