July 11, 2017 – 8:45 a.m.

Yesterday evening, the House Appropriations Committee released the draft appropriations bill for the Departments of Transportation and of Housing and Urban Affairs for fiscal year 2018. Bill text is here and the full committee press release/summary is here. The Transportation-Housing subcommittee is scheduled to meet and mark up the bill at 7 p.m. this evening (or when House votes are over) and will be webcast here.

ETW published an initial overview of the legislation yesterday evening with the headline news – the House bill makes available an impressive $900 million for the Gateway Program of rail projects in New York and New Jersey, and does so by eliminating TIGER grants and suspending other mass transit “new start” projects that are currently in the development pipeline.

But now, we have had time to do a full analysis of the text of the House bill.

Big picture.

The House Appropriations Committee is apparently writing bills towards a government-wide total non-defense number of $510.7 billion, and all of the discretionary appropriations in the Transportation-HUD bill except the Maritime Administration’s $300 million security account are counted towards that number. This overall total is $7.8 billion less than the 2017 total, and after veterans programs and homeland security are increased or held harmless, there is even less money to go around. So it is not surprising that the discretionary spending total in the new House bill is $56.5 billion, which is $1.1 billion less than last year.

As in 2017, the committee had to cheat to meet that number, with an $800 million rescission of highway contract authority (the 2017 rescission was $857 million).

In terms of gross appropriations (before offsetting receipts, which are a big part of HUD’s budget and which have gone up by almost $500 million this year), HUD basically gets a freeze at last year’s level, while USDOT gets a $700 million cut. As yesterday’s overview makes clear, most of that reduction is from mass transit new starts and the TIGER grant program in the Secretary’s office – together, those programs are cut by $1.6 billion from last year, but that is offset by the new $900 million directed towards the New York – New Jersey Gateway Program. ($400 million of that comes out of the FTA account that also funds new starts, but is set aside for Gateway, not for any other new starts that are currently in the project pipeline.)

Moving forward, Senate appropriators will want to restore TIGER funding and provide funding for new start projects in California, Maryland, Minnesota, Washington State and elsewhere that are not funded by the House bill. Realistically speaking, the only ways to do this are (a.) cut the House’s Gateway funding, (b.) cut HUD, (c.) increase the size of the bill above $56.5 billion, or (d.) cheat somehow (maybe by increasing the size of the contract authority rescission).

By the time House and Senate leaders are negotiating the final bill this fall/winter, we may finally have seen President Trump’s infrastructure legislation and can determine just how well its proposed programs could make up for a reduction in federal TIGER and new start grants for certain kinds of projects.

Versus White House.

The President’s “skinny budget” released in March proposed sweeping cuts in many programs receiving annual discretionary appropriations. The House bill almost completely rejects these cuts at the Department of Housing and Urban Development while making some reductions at the Department of Transportation.

Versus FAST Act.

The House bill fulfills 99 percent of the total funding in 2018 promised by the FAST Act, as shown in the table below.

The remainder of this article is a detailed description of the House bill, in the order in which modal administrations appear in the bill (OST, FAA, FHWA, FMCSA, NHTSA, FRA, FTA, Seaway, MARAD, PHMSA, OIG). Please see our full table of all account-level funding in the bill here. More detailed information will become available once the draft committee report is released, three days before full committee markup (whenever that is – probably next week).

Office of the Secretary.

The big news here is once again the House’s proposed elimination of the TIGER grant program in order to make room for Gateway. But the House did propose to kill TIGER in 2011, 2012, 2013 and 2014 and has lowballed it ever since, counting on the Senate’s love of the program to provide leverage in eventual House-Senate conference negotiations.

While the President proposed to eliminate the discretionary side of the Essential Air Service subsidy program, the House bill gives it the same $150 million as it received last year, with the same bill language.

The Administration requested $3 million for overhead costs of what used to be called the “Build America Bureau.” The House bill only gives it $1 million but, later in the bill, transfers the $3 million Maritime Administration appropriation for running the title XI shipbuilding loan program to the Bureau with instructions to take over the program, so the real Bureau total is $4 million, not $1 million. (The Bureau already runs the TIFIA and RRIF loan programs.) The House bill also contains new general provisions relating to the Bureau – section 104 gives the Secretary perpetual authority to transfer funds from other USDOT appropriations to the Bureau for administrative fees, and section 105 makes a conforming legal change to the RRIF authorizing statute.

The House bill appears to eliminate the Minority Business Resource Center’s loan program.

Beyond that, the House bill gives OST the Salary and Expenses amount requested ($111.9 million) and increases authority to transfer money between offices in the appropriation from 5 percent to 10 percent. No other changes to language in last year’s law are obvious, except that the House bill drops a longtime general provision that caps the number of political appointees at USDOT. (Apparently, incoming Secretary Chao was surprised late last year to find out that USDOT, along among Cabinet departments, had a statutory limit on its political appointees, and no one was left who remembered why this provision was first put in the bill 30 years ago as section 311 of the FY 1988 DOT Appropriations Act, so the House bill is finally getting rid of it.)

It is the Secretary, not the FAA Administrator, who is in charge of international aviation agreements, and section 413 of the House bill continues the language in the FY 2017 law pertaining to approvals for Norwegian Air.

And there is one other new general provision that covers both DOT and HUD: section 417 of the House bill prevents both departments from maintaining or establishing a computer network unless the network blocks pornography. (Identical provisos have been popping up in other appropriations bills in recent years.)

Federal Aviation Administration.

The House bill provides $16.56 billion in total funding for the FAA in 2018, $153 million more than last year and $435 million above the budget request. The Operations account gets $295 million more than the request ($10.185 billion), with $1.326 billion of that coming from the general fund and rest coming from the Airport and Airway Trust Fund. Of the $296 million over the budget request, $200 million goes to the Air Traffic Organization and $52 million goes to Aviation Safety (and most of the latter goes to drone safety). Within ATO, $162 million is specifically set aside for the contract tower program, and the bill continues last year’s language preventing the FAA from cutting the Contract Weather Observers program.

The capital account (Facilities and Equipment) gets $2.855 billion, a hard freeze at the 2017 level, while the Research, Engineering and Development account gets $170 million, a $6.5 million reduction from 2017.

The obligation limitation on the Airport Improvement Program continues to be frozen at $3.350 billion pending reauthorization of the program. Within AIP, the House once again does not fund the Small Community Air Service program, counting on the Senate to restore that priority, and maintains the airport technology and cooperative research programs at the levels requested in the budget.

There is only one significant change in the bill provisos for the FAA, in the area of safety certification. The FAA allows certain organizations (around 80, including big players like Boeing) to perform certain certification functions on the FAA’s behalf under the Organization Designation Authorization (ODA) program. Sec. 119D prevents the FAA, during FY 2018, from withholding ODA authority from the companies that are part of the program; i.e., unless the FAA can demonstrate that there are safety issues with the manufacturers’ use of delegation, the FAA cannot stop the manufacturers from certifying its own products.

Federal Highway Administration.

The House bill provides the full $44.234 billion obligation limitation on the federal-aid highways program called for by the FAST Act of 2015. This is a 2.2 percent increase over last year. However, the bill also includes another rescission of highway contract authority balances apportioned to states via formula –this time, it’s $800 million (as opposed to the $857 million rescission in the FY 2017 Act).

The language and structure of the rescission is the same as last year (safety programs, amounts accompanied by no-year limitation, amounts exempt from limitation, and amounts sub-allocated are exempt from the rescission) and the rescission is to take effect on November 30, 2017 based proportionately on unobligated balances held by states on September 30, 2017. (See here for how FHWA just administered the last rescission under these procedures.)

All of the general provisions pertaining to FHWA that were included in the 2017 law are reiterated in the House bill except for the provision allowing a one-time transfer of funds by Virginia and the District of Columbia to the Park Service for the Memorial Bridge, which is not repeated.

There are two new FHWA general provisions: section 125 of the House bill orders FHWA to suspend, for the duration of FY 2018, its decision to revert Interstate signs back to the font used before 2004 – so hooray, Clearview (see explanatory articles from CityLab and Wired). And section 126 of the House bill amends 23 U.S.C. §127 to allow trucks weighing up to 129,000 pounds to operate in Interstates in North Dakota.

In title IV, the House bill does not continue the provision allowing states to reprogram dead highway earmarks that were less than 10 percent obligated and at least 10 years old (it was section 422 of last year’s law).

Federal Motor Carrier Safety Administration.

The House bill meets the FAST Act’s levels of obligation limitation for FMCSA programs – $283 million for Operations and Programs, and $374.8 million for Motor Carrier Safety Grants. The only change in the legislative language in the appropriations paragraphs from last year is the addition of a new set-aside in the O&P account for “information management” ($34.8 million).

The bill also contains a new provision allowing FHWA to use up to $100 million in old contract authority provided by TEA21 and SAFETEA-LU and other pre-2017 laws for “a highly automated commercial vehicle research and development program, in accordance with 49 U.S.C. §31108…”

With regards to numbered general provisions, the House bill maintains them all except last year’s section 132 (temporary ban on wireless roadside inspections), but adds three new ones: a new section 132 preventing FMCSA from requiring truckers hauling livestock or insects from having to use electronic logging devices during FY 2018, and a new section 133, preventing FMCSA from revising the pre-FAST-Act safety fitness determination rules until the Inspector General makes the certifications required by section 5223(a) of the FAST Act.

And section 134 of the House bill amends 49 U.S.C. §14501 to prevent states from preventing truckers “whose hours of service are subject to regulation by the Secretary under section 31502 from working to the full extent permitted or at such times as permitted under such section, or imposing any additional obligations on motor carriers if such employees work to the full extent or at such times as permitted under such section, including any related activities regulated under part 395 of title 49, Code of Federal Regulations.”

This is the latest round in a long-simmering drama related to a California law mandating certain meal and rest breaks for truckers and a 2014 Ninth Circuit Court of Appeals decision which held that a federal law passed in 1994 does not overrule California state law in this regard.

(Section 14501 of title 49 was first enacted as title VI of the 1994 FAA reauthorization act for some reason now lost in the sands of time, so the shorthand for this issue is “F4A” which is the short acronym for that law. Also, remember that federal preemption of state trucking laws unrelated to safety was a top priority of President Clinton – read his remarks upon signing the bill into law, where he said that preempting non-safety state trucking laws would be “not only a significant addition to our economic stimulus program, it will also save consumers billions of dollars every year.”)

Efforts to undo the California law and the Ninth Circuit’s interpretation have bedeviled transportation legislation since 2014. The House version of what became the FAST Act of 2015 had a provision overturning the California meal break and trucker wage laws (see section 1446 here), but the provision was dropped in House-Senate conference after several heated conversations between House Transportation chairman Bill Shuster (R-PA) and Senate Public Works ranking member Barbara Boxer (D-CA), with Boxer threatening to kill the entire bill if the provision was included. And the House version of last year’s Transportation-Housing appropriations bill included a provision that preempted the California laws, phrased differently (see section 134 here), but that was dropped in conference as well.

On June 29, the Senate Commerce Committee approved an amendment to its FAA reauthorization bill preempting state laws on meal and rest breaks, but not any other state laws.

National Highway Traffic Safety Administration.

With regards to the Highway Trust Fund side of NHTSA, the House bill provides the exact amount of obligation limitation assumed in the FAST Act – $149 million for highway-side Safety and Operations, and $598 million for Highway Traffic Safety Grants. The bill gives the same appropriation for the general fund $180.1 million – as last year. (Presumably, some of this is for autonomous vehicles research and regulation, but we won’t know until the report comes out.) All bill language is exactly the same as last year – only the dollar amounts of some account totals and set-asides have changed.

Federal Railroad Administration.

Total FRA appropriations in the House bill are $2.211 million, $360 million more than last year and $1.162 million more than the President’s request. The Safety and Operations account and the Railroad R&D accounts get the exact same dollar amount as last year ($218.3 million for the former, $40.1 million for the latter), and none of the legislative language has changed.

The bill provides appropriations of $328 million for the Amtrak Northeast Corridor account (the exact same amount as last year) and $1.100 billion for the Amtrak National Network account ($67 million less than last year). These levels are both significantly above the levels proposed by the Trump Administration, which proposed to eliminate operating subsidies for Amtrak long-distance routes.

The Amtrak budget is unusual in that Amtrak submits its own budget request directly to Congress which is frequently different from the budget request submitted on Amtrak’s behalf by the President. They also differ from the levels authorized in the FAST Act of 2015:

All of the bill language is the same as last year, including oversight takedowns and the set-asides for the Northeast Corridor Commission ($5 million) and the State-Supported Route Commission ($2 million).

The FAST Act of 2015 authorized three new competitive grant programs to be funded by the Appropriations Committees at their discretion and to be administered by USDOT. In the first year of the FAST Act (FY 2016), the appropriations bills were already locked before the authorization was enacted, so the new programs were unfunded. In the second year (FY 2017), the FAST Act recommended a total of $350 million for the three programs collectively, but the appropriators were only able to provide $98 million.

But this year, chairman Frelinghuysen’s need to make as much money as possible available for the Gateway program means that the new programs get $525 million, all but $25 million of which goes towards the Federal-State Partnership for State of Good Repair grant program.

The bill language for the partnership grant program does not earmark the money for Gateway explicitly 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.

The other new grant program that receives funding, the Consolidated Rail Infrastructure and Safety Improvements program, only gets $25 million in the House bill (versus $68 million last year). As such, the bill language drops last year’s $25 million set-aside for capital projects not on state rail plans.

Two new general provisions are added – section 151 prevents 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 Transit Administration.

The House bill provides a total of $11.7 billion for the FTA in 2018. The bulk of the money ($9.733 billion) is the obligation limitation on Highway Trust Fund contract authority for the Transit Formula Grants account – the exact same amount called for in the FAST Act. This is a freeze from the 2017 level, because 2017 was inflated by a one-time-only $199 million for grants to commuter railroads for the installation of positive train control technology.

But the big variable is the large discretionary program, Capital Investment Grants. This program received a $2.4 billion appropriation in 2017, but the Trump Administration proposed to cut that in half, to $1.2 billion – enough to pay off transit capital projects that already had their project agreements executed by May 2017, but not to execute any new agreements before October 2018.

The House bill provides $1.7 billion for the account, but not in a way that really helps most of the new start and core capacity programs that are currently in the pipeline. Instead, the House bill provides $182 million for one-off “small start” projects and then sets aside $400 million for projects under the new subsection (q) of 49 U.S.C. §5309, “Joint Public Transportation and Intercity Passenger Rail Projects, ” which clearly seems tilted towards Gateway projects that share usage between Amtrak and New Jersey Transit, at least in the near term.

Neither the House bill nor the Trump request has any room for the ten projects listed on the FTA website as in the final stages of project development or engineering and anticipating a full funding grant agreement (FFGA) and an initial funding installment in 2017 or 2018. These projects, which expect a total of $5.5 billion of federal appropriations from the CIG account over the coming years, would have to wait until FY 2019 for their project agreements under the House bill.

Some of these projects received appropriations in advance of FFGA execution in the 2017 appropriations bill, but failure by Congress to provide future appropriations in 2018 would justify Trump Administration reluctance to give those projects a FFGA in 2017-2018.

Perhaps in anticipation of a conference agreement that has a lot more money for the account, the House bill also contains explicit language ordering the Secretary to keep moving projects through the CIG project development/engineering/construction grant pipeline:

“The Secretary shall continue to administer the Capital Investment Grant Program in accordance with the procedural and substantive requirements of section 5309 of title 49.”

(Ed. Note: We’re not really sure of the actual legal effect this language has – a word search of 49 U.S.C. §5309 reveals 31 instances of the phrase “the Secretary shall” and 19 instances of “the Secretary may.” Ordering the Secretary to obey §5309 requires her to comply with all the “shall” requirements but not necessarily all of the “may” options…)

Elsewhere at FTA, the House bill provides the same amount for administrative overhead as the budget request ($110.8 million) and appropriates $5 million for Technical Assistance and Training (in addition to money provided for similar programs under Formula Grants). The bill appropriates $150 million for installment #9 (of 10) of the $1.5 billion for the DC Metro system promised by the 2008 rail law.

Other language in the House bill applying to FTA remains from last year (the ongoing provisions, not the one-time code changes) and there is a new section 164 capping the section 5309 share of any project at 50 percent instead of the statutory 60 (which has been proposed by the House in the past but rejected by the Senate).

St. Lawrence Seaway.

The House bill appropriates $28.3 million for the St. Lawrence Seaway Development Corporation, the same as the budget request. The only change from last year’s language is a new $9.5 million set-aside for asset renewals.

Maritime Administration.

The House bill appropriates $490.6 million for the Maritime Administration. $300 million of this amount (the same as last year) is for the Maritime Security Program and is the only defense account in the USDOT budget and thus is exempt from the statutory ceiling on non-defense appropriations that limits the rest of the bill.

The bill provides $175.6 million for Operations and Training, and all the bill language there appears the same except they drop last year’s set-aside for Short Sea Transportation.

The bill provides $9 million for ship disposal, the same as the budget request. This is $25 million less than last year, but last year was distorted by a one-time $24 million to decommission the Savannah, America’s only nuclear-powered merchant ship.

The House bill provides $3 million for the Assistance to Small Shipyards account, which is unusual since the House usually provides zero and counts on Senate Appropriations chairman Thad Cochran (R-MS), who loves that program, to add it back.

Cochran’s reaction will also be key to the fate of the House proposal to transfer the title XI shipbuilding loan guarantee program and its $3 million per year appropriation from MARAD to the Build America Bureau – title XI is another longtime Cochran favorite.

There is one new general provision in the House bill – section 172 modifies two sections in title 46 U.S.C. relating to the penalty wages received by mariners.

Pipeline and Hazardous Materials Safety Administration.

The House bill provides a gross total of $267.8 million for PHMSA activities in 2018, $8.7 million more than last year. This is largely offset by $139 million in pipeline safety fees and underground tank design fees, and $28.3 million of the spending is mandatory and not discretionary, so the total that actually counts against the bill’s budget ceiling iis only $100.5 million. Funding for pipeline safety is $5.7 million higher than the budget request, due mostly to the fact that CBO estimates pipeline safety fees as being slightly higher than OMB estimates, and the bill spends every dollar of the fee receipts.

There are no changes to the legislative language for PHMSA except that last year’s set-aside of $1.1 million of pipeline safety money for the one-call notification program has been dropped.

Office of Inspector General.

The House bill provides $92.2 million for the DOT Inspector General, $2 million above last year.