Roadwork Ahead: NATSO Deconstructs Shuster Infrastructure Draft

The ambitious and aptly named “discussion draft” of a massive infrastructure funding proposal released on July 23 by House Transportation and Infrastructure Committee Chairman Bill Shuster (R-PA) is welcome news for anyone still hoping that someone somehow and sometime soon inside the Beltway will get legislation passed that will get money flowing to repair, update, and expand America’s woefully inadequate transportation infrastructure.

That’s not to say no one will quibble with one aspect or another of Rep. Shuster’s grand plan. Indeed, he was the first to point that out, in his own press release on the draft: ““This discussion draft does not represent a complete and final infrastructure bill. It is meant to reignite discussions amongst my colleagues, and I urge all members to be open-minded and willing to work together in considering real solutions that will give America the modern-day infrastructure it needs.”

Among the first stakeholder groups to react to the long-awaited Shuster draft was NATSO, the association for truckstops and travel plazas, which issued a statement shortly after the draft came out that welcomed the influential congressman’s effort to revive a dialogue on infrastructure policy reform.

“We hope that Chairman Shuster's Discussion Draft, which takes into consideration both the immediate and long-term need to boost infrastructure revenues and shore up the Highway Trust Fund, rekindles the important discussion that began in earnest earlier this year but fizzled in recent months,” noted NATSO President and CEO Lisa Mullings.

The very next day, July 25, NATSO posted a detailed analysis of the Shuster draft authored by David Fialkov, the association’s vice president of Government Relations and legislative and regulatory counsel.

Fialkov lays out why the draft’s release is so important-- and why not all stakeholders will agree with everything it presents for discussion. “Although many stakeholders -- including NATSO -- object to certain provisions in the draft legislation, it nonetheless represents an important continuation of -- and positive shift in -- the discussion President Trump started when he released his own infrastructure proposal earlier this year.”

Far from alone in thinking “the draft legislation stands little chance of becoming law,” he expands on that by pointing out that Shuster’s road map was “not designed to become law. Instead, it was designed to ‘keep the conversation alive,’ and illustrate to policymakers what a comprehensive infrastructure plan can look like in legislative language”—that is to say, it’s written in a way in which legislators can grasp its importance.

Fialkov does a better job than Shuster himself did in the draft or in its several supporting documents to express what the plan is all about— describing it thusly: “The draft legislation is designed to facilitate a process whereby the United States can recalibrate how it pays for infrastructure as it moves into the middle part of the 21st Century, while at the same time providing a mechanism to adequately fund such investment in the near-term as the process plays out.” From inside the Beltway, that is plain English.

He goes on to analyze each of five key aspects of the discussion draft. Here are the highlights:

Near Term-- Raising the Fuel Tax and Other Transportation User Fees

“The draft legislation calls for phasing in a 15-cent gasoline and 20-cent diesel tax increase over three years.  After three years, the taxes would be indexed to inflation. Importantly, the legislation also would begin taxing infrastructure users that can currently avoid taxation… These fees would be extended through 2028, thereby facilitating a multi-year reauthorization of the Highway Bill.”

Fialkov states that NATSO supports increasing user fees “in this manner,” pointing out that “NATSO has long advocated raising the motor fuel excise taxes as the most efficient, equitable mechanism to increase infrastructure investment, and Chairman Shuster's legislation would do that.”

Long Term: Establishing a Commission to "Fix" the Highway Trust Fund

“The draft calls for a 15-person Highway Trust Fund Commission to develop a legislative proposal to ensure the Trust Fund's long-term solvency.  The Commission's recommendation would be expedited in Congress and receive an up-or-down vote in both chambers.  Importantly, the Commission would be precluded from recommending a tax on fuels. In the event Congress does not adopt the Commission's recommendations, the increased motor fuels excise taxes would remain in effect."

As Fialkov sees it, that Shuster “saw fit to recommend establishing a Commission amounts to a harsh (though not unreasonable) indictment of Congress's ability to tackle big problems.  Establishing a Commission is the standard approach for Congress to outsource politically treacherous decisions to an impartial group.”

Vehicle Miles Traveled Tax Pilot Program

“The draft legislation would create a voluntary pilot program to test the feasibility of a nationwide per-mile user fee to replace the motor fuels excise tax. Under this program, the federal government would provide different ways to track mileage (e.g., apps, in-car diagnostic systems, manual reporting by states, etc.). The IRS would provide refunds to participants in the pilot program that already pay fuel excise taxes at the pump.”

Between this pilot program and a provision to tax electric vehicle batteries, Fialkov says the draft is “an important step to ensuring that electric vehicle users pay their fair share toward infrastructure. One of the biggest critiques of fuel taxes today is that it exempts EVs. Taxing batteries and/or vehicle miles traveled taxes would eliminate this concern.”

No Calls for Tolling or Rest Area Commercialization

“The legislation does not call for eliminating or reducing federal restrictions on tolling existing interstates or commercializing interstate rest areas. In this respect, it is an extremely positive move away from the Trump Administration's proposal, which directly called for repealing federal prohibitions on those activities.”

Fialkov notes that while a proposed "Commission" to study alternatives to funding infrastructure “could conceivably recommend tolling and commercializing rest areas, these approaches have historically been designed to supplement the Highway Trust Fund… It would amount to a transparent dereliction of duty for the Commission to recommend tolling or rest area commercialization, and it would be unlikely that Congress would adopt such recommendations.” 

In addition, he states that while President Trump's infrastructure proposal relied on leveraging private sector capital through public private partnerships to enhance infrastructure investment, “NATSO has always maintained that PPPs may make sense for certain infrastructure projects, but not [for] surface transportation. Chairman Shuster's draft legislation appears to recognize this, limiting its facilitation of PPPs to public building construction and rehabilitation projects rather than highways and bridges.”

Accelerating Project Delivery

“The draft legislation would accelerate project delivery by proposing to make permanent the Trump administration's ‘One Federal Decision’ policy.  This policy establishes a schedule for finalizing a decision on environmental reviews of infrastructure projects within two years.  It also expands categorical exclusions and creates a pilot program to allow innovative approaches to environmental review in lieu of the standard National Environmental Policy Act process.  The legislation also reforms clean water permitting.”

Fialkov states that “NATSO generally supports efforts to responsibly accelerate project delivery timelines, adding that on the other hand, “these provisions likely will turn off many Democrats, who generally support robust environmental analysis of infrastructure projects, but amounts to an important nod to the Trump administration's proposal and thus will make the administration more inclined to accept this legislation's recommendations.”

Next Steps

As for “next steps” for the Shuster plan, Fialkv reiterates that the draft is “designed to continue a conversation and act as a ‘starting point’ for future congressional efforts to enact infrastructure legislation.  Regardless of what happens after the midterm elections, infrastructure legislation is one of the few areas where bipartisan collaboration and compromise is within reach.

“The current Highway Bill (known as the FAST Act) expires in 2020, which means Congress will be forced to confront infrastructure policy before the next presidential election,” he adds.  

It may well be that the discussion draft will not morph into law before Chairman Shuster leaves office at the end of his term. But given that his plan so clearly stands out as a robust “conversation starter,” it is likely that Mr. Shuster’s fingerprints will appear all over whatever infrastructure bill is eventually passed— as one eventually must be-- this year or in a year or more from now.

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Related: Rep. Shuster Drafts Massive Infrastructure Plan