APTA | Passenger Transport
March 15, 2010

In This Issue

Job opportunities in this issue's classifieds include a public transit agency president/CEO and executive director of a national program!


Capitol Hill Legislative Update: Jobs, Taxes, and Climate All Under Review
BY BRIAN TYNAN, APTA Senior Legislative Representative

As Passenger Transport went to press, two bills were pending before the U.S. Senate that contained provisions of importance to the public transportation industry.

The bill with the greatest interest for transit agencies and businesses was the Hiring Incentives to Restore Employment (HIRE) Act, a jobs bill that originated in the House but more recently had passed between the House and Senate for multiple amendments. The legislation includes language extending federal surface transportation programs through Dec. 31, 2010, and also would provide a transfer of $19.5 billion of general funds to the Highway Trust Fund, including $4.8 billion to the Mass Transit Account. This transfer is expected to ensure the solvency of the Mass Transit Account through the end of Fiscal Year 2011. The Senate Finance Committee based the transfer on restoring interest payments to the Highway Trust Fund.

Other provisions of the HIRE Act would expand the Build America Bonds program, allowing states and local governments to borrow at lower costs to finance more infrastructure projects and put additional people to work.

Those provisions, while not fulfilling the ultimate goal of passage of a long-term transportation authorization bill, would provide authority for continued operation of the programs beyond the current fiscal year, as well as a level of confidence that the Highway Trust Fund and Mass Transit Account will have the resources available to support spending under the programs. At press time, senators were working toward an agreement to vote on the HIRE Act the week of March 15, which would in turn send the bill to the president for his signature.

Also just prior to press time, the Senate voted to approve a package of “tax extenders”—legislation extending provisions of the tax code that had expired at the end of 2009. Although support for these provisions is largely bipartisan, the Senate was unable to reach agreement on passage of these provisions prior to their expiration last year.

Important to transit agencies is the inclusion of provisions extending the federal excise tax credit for alternative fuels. Transit operators who use alternative fuels including compressed natural gas and liquefied natural gas are eligible for a 50-cent-per-gallon equivalent tax credit.

This tax credit is an important source of revenue for many public transportation agencies that use natural gas for a portion or all of their fleet fueling needs. It provides significant offsetting revenues to agencies’ fuel budgets at a very difficult time of declining state and local support for operations.

The bill was amended during Senate consideration, and as such will require either House approval or conference committee action before it can be signed by the president.

Finally, opposition to a cap-and-trade system appears strong in the Senate, and progress has stalled on a climate bill. In recent weeks, Sens. John Kerry (D-MA), Lindsey Graham (R-SC), and Joe Lieberman (I-CT) have worked to develop a compromise bill. Their proposal is considered likely to eliminate a transportation emissions cap and instead create a carbon tax or fee on motor fuels—a change that could generate significantly more revenue for transportation investment than previous climate bills.

The Boxer-Kerry bill approved last fall by the Senate Environment and Public Works Committee provided 2.5 percent of allowances for transit and transportation investment, about $2 billion annually.

A carbon tax or fee could generate $20 billion or more annually, and a large share of new revenue could support transportation investment under the proposal.

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