House and Senate negotiators today passed and sent to their respective chambers a 27-month, approximately $101-billion surface transportation reauthorization bill. The legislation does not raise motor fuel excise taxes to pay for infrastructure improvements, leaves intact the size and weight limits for trucks operating on the nation's interstates, and greatly increases the size of a surety bond that property brokers must set aside to pay legitimate claims by truckers of late payment or nonpayment for their services.
The Senate is expected to vote on the so-called conference report today, and the House vote is expected on Friday. If the bill is passed by the Senate, which appears certain since the final product closely resembles the Senate's original version, it could reach President Obama's desk for signature as early as June 30, the date the most recent short-term extension of highway funding programs—the ninth since 2009—was set to expire.
Several weeks ago, there was little optimism a bill would be enacted at all this year, much less by this time. Momentum gathered after House Speaker John Boehner (R-Ohio), and Senate Majority Leader Harry Reid (D-Nev.) instructed conferees to redouble their efforts to approve legislation and send it to both houses.
The conference report is a victory for Rep. John L. Mica (R-Fla.), chair of the House Transportation and Infrastructure Committee, and Sen. Barbara Boxer (D-Calif.), chair of the Senate Commerce Committee, who set aside their partisan differences to move the bill forward. Mica had sought a six-year reauthorization timetable, but negotiators agreed to the shorter duration sought by Boxer and approved by the Senate.
FUEL TAXES, SIZE AND WEIGHT LIMITS WON'T CHANGE
Conferees declined to raise the federal tax on diesel and gasoline, keeping those taxes at 1993 levels of 24.4 cents a gallon for diesel and 18.4 cents a gallon for gasoline. Taxes will remain at these levels until at least September 30, 2016, according to a summary of the conference report obtained by DC VELOCITY.
Revenue from fuel taxes, which is deposited in the Highway Trust Fund, is the primary source of funding for surface transportation projects. However, in the past few years funding shortfalls have forced Congress to divert about $35 billion from various general treasury accounts to the trust fund. Among the reasons for those shortfalls are increased fuel efficiency and a decline in miles traveled as the recession dampened economic activity.
Mindful that the projected revenue from fuel taxes will not be sufficient to pay for program investments over the next 27 months, the conferees took the extraordinary step of authorizing an $18.8 billion transfer of funds from the general treasury to the trust fund. This "pre-funding" from the general treasury is intended to ensure that all highway programs authorized during the next 27 months will be paid for ahead of time, and that the trust fund will not have to look to Congress for additional funding streams later.
In a blow to shippers and truckers, conferees did not raise the size or weight limits of trucks plying the nation's interstate highways. Rep. Mica wanted to raise the per-vehicle weight limit to 97,000 pounds from 80,000 pounds, with the proviso that heavier trucks be equipped with a sixth axle for better braking and overall stability. That language was tabled by his own committee, however.
The committee had approved language allowing the nationwide use of twin, 33-foot-long trailers and permitting the deployment of triple trailers in states that currently don't allow them. That provision dropped off the table as the legislative process moved forward, however.
BROKERS' SURETY BONDS TO SOAR
Conferees handed freight interests a victory by requiring the federal Department of Transportation to conduct a field study of pending changes to controversial "restart provisions" in the agency's rules governing the number of hours a driver can operate a rig. Under those rules, drivers working the maximum number of weekly hours must take at least two consecutive rest periods—between 1 a.m. and 5 a.m.—during a "restart" period lasting 34 straight hours. Once the 34-hour cycle is over, drivers can restart the clock on their seven-day workweeks, according to the rules.
Critics say the timing of the restart period would actually require drivers to be off-duty for 46 hours, not 34. In addition, they charge, the language effectively forces more drivers and trucks on the road during morning rush hours, when they are sharing the asphalt with millions of commuters.
The bill deals a tough hand to property brokers. In language that may have a profound impact on that industry, conferees agreed to raise the surety bond brokers must post to pay legitimate claims by carriers from $10,000 to $75,000. The original Senate version called for an increase to $100,000. Independent broker interests, who warned that such a large jump could force as many as 80 percent of the nation's property brokers out of business, said they could have compromised on a $25,000 bond limit to adjust for inflation.
In addition, sources said that motor carriers will be required to hold separate operating authority if they want to broker freight. The conferee bill also sets strict regulations on surety-bond companies and the way the bonds are administered, the sources said. In addition, the bill levies harsh penalties on companies that conduct brokerage operations without a bond or a license, sources said.
The language is designed to address the grievances of owner-operators, who have long complained that they receive freight from brokers but are not paid in a timely manner, or sometimes are not paid at all, after the goods have been delivered.