The House of Representatives Subcommittee on Highway and Transit is planning to start the transportation reauthorization process on June 24, 2009 at 11:00 a.m. EST by marking up the Surface Transportation Act of 2009 (“Act”). House Transportation and Infrastructure Chairman, James Oberstar, has made a proposal which would fundamentally overhaul surface transportation programs drawing on many of the recommendations by a federally mandated Surface Transportation Policy and Revenue Commission as well as on White House policy priorities. The Obama Administration, however, has a completely different political and legislative strategy in mind, causing a public disconnect between leaders of the legislative and executive branches.

First, on a negative note, the Act would consolidate or eliminate 75 existing Federal highway and transit programs including the “Indian Reservation Road Bridges Program,” and “The Public Transportation Participation Pilot Program.

On the positive side, the Act would create a new rail section to promote President Obama’s proposal of a high speed passenger rail network. Also, at the urging of the Administration, Oberstar would create an Office of Livability in the Transportation Department, to link transportation planning to housing and business development. The Act would also overhaul the Transportation Department’s inner workings by creating a position of Undersecretary of Intermodalism. That Undersecretary would help coordinate planning by agencies responsible for different methods of transportation, including the aviation, railroad, transit, highway and maritime administrations, along with Amtrak, the Coast Guard and the Army Corps of Engineers. “It’s an opportunity to restructure all of transportation,” Oberstar said at a briefing Wednesday. “Those modal administrators have not done so much as what we’re doing here – sat around a table, had coffee together – in 40 years. It’s time to do that.”


Continue Reading Trouble in Paradise – Dissension Surrounds the Surface Trasnportation Authorization Act of 2009

There were two events this past Thursday, May 7, 2009, that may affect H.R. 915, the FAA Reauthorization bill, which is currently pending in the U.S. House of Representatives. First, in the Obama Administration’s budget stated in its budget that starting in 2011, the budget “assumes a scenario where most of the air traffic control system would be paid for by direct charges levied on users of the system. The FAA’s current excise tax system, which generated $12.4 billion in 2008, is largely based on taxes that depend upon the price of customers’ airline tickets, not FAA’s cost for moving flights through the system.“ Then, the House Ways and Means Committee held a hearing on the financial status of the Airport and Airway Trust Fund. At that hearing, Rep. James Oberstar (D.-Minn.), Chairman of the House Committee on Transportation and Infrastructure told Ways and Means that “changes to the current system of excise taxes should be made only if such changes will improve upon [excise taxes’] record of stability, revenue adequacy, and ease of administration.”

Obama Administration Seems to Favor User Taxes

The Obama Administration has been fairly clear about its preference for user taxes to fund the air traffic control system in the United States. The budget framework that the Obama Administration issued in February indicated that it would like to transition some aviation taxes to user fees. Indeed, it was this indication of the Administration’s preference for user fees that caused the Congress to approve another continuing resolution for the FAA instead of passing the 2009 FAA Reauthorization. See, "User Fees Issues Probably Will Force Short-Term Extension of FAA’s Authorization Instead of Full Reauthorization" posted March 16, 2009. While the budget released this past week ruled out user fees for fiscal year 2010, the administration indicated that “the FAA should move toward a model whereby FAA’s funding is related to its costs, the financing burden is distributed more equitably, and funds are used to pay directly for services the users need.” But the Budget stopped short of endorsing user fees. It continued: “the Administration recognizes that there are alternative ways to achieve these objectives. Accordingly, the Administration will work with stakeholders and the Congress to enact legislation that moves toward such a system.”

User fees are not only on the White House’s wish list. The Department of Transportation confirmed that the longer-range reauthorization plan for the FAA will include “cost-based user charges for air traffic services starting in 2011.” Although, DOT added that the specifics “are under development and some time will be needed to implement the charges once approved.” The Congressional Budget Office seemed to support a move away from excise taxes, too, although indirectly. Robert A. Sunshine, Deputy Director, Congressional Budget Office stated that “the current financing system provides limited incentives to air carriers and general aviation flyers to use the system efficiently in congested areas – but structured differently, by linking the taxes paid by users of the system to the cost of providing air traffic control services, the financing system could help to reduce the potential for increasing congestion and delays.”

Strong Support in Congress for Current System

The House Ways and Means Committee took up H.R. 915, the FAA Reauthorization bill of 2009, to consider the financing provisions. H.R. 915 has been approved by the Transportation and Infrastructure Committee, but the financial provisions need to be approved by Ways and Means before it can go to the full House. Rep. Charles Rangel (D.-N.Y.), Chairman of the Ways and Means Committee stated that the Committee intends “to act on this matter so that we can avoid the need for yet another temporary measure.” All of the witnesses stressed the need to move the legislation along. Rep. Oberstar commented that “we are already almost two years behind schedule in reauthorizing these programs. Airport development capital projects and key NextGen programs need the stability that a multi-year authorization bill provides.” FAA programs can be funded by aviation excise taxes, a reasonable General Fund contribution and a modest increase in General Aviation fuel taxes: an increase from 21.8 cents per gallon to 35.9 cents per gallon for noncommercial jet fuel, and an increase from 19.3 cents per gallon to 21.4 cents per gallon for avgas.   This increase is identical to legislation reported by Ways and Means in 2007 and was passed by the House on September 20, 2007.

The proposed raises in the fuel taxes and other funding mechanisms were the results of years of negotiating, with industry expressing support for the increases in return for the promise of no user fees. Rep. Jerry Costello (D.- Ill.), Chairman of the Aviation Subcommittee indicated that the proposed increase in fuel taxes has the support of the General Aviation groups over the imposition of a user fee system. It is the support of the General Aviation groups that seems to be issue here. As Rep. Tom Petri (R. – Wis.), Ranking Member on the Aviation Subcommittee told the Ways and Means Committee, he continues to support the structure of the funding recommendations which were developed in a bipartisan fashion, adding that “General Aviation is strong in the United States compared to other countries and unique. Of all the world’s licensed and active aviation pilots, 62 percent reside here in the U.S.”

Result: Excise Taxes, At Least For Now

Since the leadership of both parties on Transportation and Infrastructure Committee support continuation of the excise taxes, it seems unlikely that H.R. 915 will be amended to include user fees, even in 2011. The feeling among all involved is that the FAA reauthorization needs to be accomplished now and now is not the time for a discussion about the viability of user fees over excise fees. However, fiscal year 2011 is another story. Once Capt. Randy Babbitt has been confirmed as FAA Administrator, excise taxes and user fees can be examined a little more closely.


Continue Reading User Fees Continue To Be A Sticking Point To FAA Reauthorization

President Obama took a huge step toward reversing the Bush Administration’s recently promulgated regulation allowing Federal agencies to forego consultation with the Fish and Wildlife Service and the National Marine Fisheries Service with respect to whether the Federal agencies’ activities will have an impact on the Endangered Species Act.  In his memo to "Heads of Executive Departments and Agencies," President Obama requests that the Departments of Interior and Commerce "to review the regulation issued on December 16, 2008, and to determine whether to undertake new rulemaking procedures with respect to consultative and concurrence processes that will promote the purposes of the ESA."

Since the Bush Administration rule was issued as a regulation, President Obama cannot through the use of an Executive Order rescind or overturn the regulation.  Thus, as an interim measure President Obama asked "the heads of all agencies to exercise their discretion, under the new regulation, to follow the prior longstanding consultation and concurrence practices involving the FWS and NMFS."

As a side note, it should be pointed out that the Senate is currently considering an Omnibus Appropriations Bill from the House that would allow the Obama Administration to rescind both the ESA rule and a rule issued in conjunction with last year’s listing of the polar bear as threatened under the ESA.  That rule exempted greehouse gas emissions and oil devleopment from regulation under the ESA even if they harmed the bears and their melting habitat.

Full text of President Obama’s Memorandum, as reported by the L.A. Times, follows on the next page.

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Continue Reading President Obama Calls for Review of Bush-Era Regulation Regarding Scientific Consultation on Endangered Species Act Concerns