BIC Matters – Nov. 2015

Yesterday, the U.S. House of Representatives passed its version of the surface transportation reauthorization bill with all of Indiana’s delegation voting in favor of passage. Technically, the House amended the Senate-passed DRIVE Act with its own Surface Transportation Reauthorization and Reform Act (STRRA) – as modified by various amendments on the House floor over the last week. A joint House-Senate conference committee will now work out a final compromise version of the legislation.

As a reminder, the DRIVE Act authorizes funding for the federal highway program over a six-year period (FY2016-21) with approximately $42.4 billion per year in the first year growing to $49 billion per year in the sixth year. While the program authorization is for six years, the funding is not. The bill only includes enough funds for the first three years. To keep the program solvent during those first three years, the Senate-passed legislation includes a $45.6 billion transfer from the federal government’s General Fund to the Highway Trust Fund. These General Fund monies are offset by a slew of miscellaneous revenue-raising provisions.

The bill the House approved yesterday also authorizes funding for the federal highway program over a six-year period (FY2016-21). STRRA provides $41.1 billion in the first year growing to $45.8 billion in the sixth year (~2 percent growth each year). The bill authorizes a $34.9 billion transfer from the General Fund to the Highway Trust Fund to help keep the trust fund solvent for the first three years. Interestingly, the House legislation includes $77.4 billion in miscellaneous revenue generating “pay-fors.” Since the bill provides more new money than is included in the General Fund transfer, it is anticipated that the House-Senate conference will likely put those extra monies to good use and produce a final bill that funds all six years.

With regard to Indiana’s funding, both the House and Senate took the same approach. Both bills effectively freeze all states at their current share of distributions. For example, Indiana currently receives 2.43 percent of all funds distributed to the states (under the core programs). Under both bills, that percentage will be frozen for the next six years.

During committee consideration of STRRA, Indiana Congressmen Todd Rokita (R-District 4) and Andre Carson (D-District 7) offered an amendment requiring all states to receive no less than a 95 percent rate of return on their share of contributions to the Highway Trust Fund. For almost two decades, Build Indiana Council has pushed for a 95 percent rate of return. Despite a spirited discussion regarding donor state equity, the committee failed to adopt the amendment. However, we very much appreciate our delegation’s bipartisan efforts to promote the issue.

We will keep you informed as we learn more about the conference committee negotiations on this bill. If you have any questions about this issue of BIC Matters, call us at (317) 634-4774.

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