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Highway Bill Becomes Law
On July 6, President Obama officially put an end to the battle for a new surface transportation law, inking his signature to the congressional conference committee report for the Moving Ahead for Progress in the 21st Century (MAP-21) (H.R. 4348). The new law comes nearly three years, 10 extensions, and more than 1,000 days since the expiration of the last highway statute, ending a tumultuous period of intense lobbying by AED and our construction industry allies.
The 27-month surface transportation reauthorization provides $40.4 billion and $41 billion for highway infratsructure investments in fiscal years 2013 and 2014 respectively. Of this funding, approximatley $37 billion will be designated to federal aid transportation projects annually. This continues current operating authority, with a 1.4 percent annual adjustment for inflation.
An exclusive AED analysis finds that the $37 billion in annual funding guaranteed to the states under the Federal-aid Highway Program will create roughly $7.2 billion in market activity for equipment distributors (sales, rental, leasing & product support) nationwide over the next two years. The money spent at AED member companies will, in turn, generate $23 billion in activity for the broader U.S. economy. (Note that the true impact of MAP-21 on AED members will likely be even more significant because the new analysis focused only on the part of the annual program guaranteed to the states and did not take into account the various special programs that can increase the amount a state receives.)
In addition to maintaining important investment levels, the law contains noteworthy improvements to the project delivery process and provisions to allow for resourceful financing of new projects. Furthermore, the Transportation Infrastructure Finance and Innovation Act (TIFIA) program, which promotes public-private partnerships, is boosted to $1 billion under the deal.
MAP-21 also contains several matters not related to federal surface transportation programs. Lawmakers used the legislation to approve a Gulf Coast restoration trust fund, reauthorize the federal flood insurance program, and maintain a lower student loan interest rate.
While the law benefits the construction equipment industry and the broader national economy as a whole, it fell short in several important respects. Most notably, lawmakers failed to address the serious threat to the nation’s long term economic health by refusing to consider any means to revise funding mechanisms for transportation infrastructure investments. Additionally, MAP-21 did not include provisions to approve the Keystone XL Pipeline, removal of the cap on private activity bonds (PABs) for water infrastructure projects, or rules prohibiting the EPA from regulating fly ash as a hazardous material.
While the new law contains significant benefits for equipment distributors and the nation as a whole, it leaves much to be desired in restoring robust and sustained funding to adequately address America’s plethora of infrastructure needs.
AED will remain active in this battle, but the support of the equipment industry remains critical to achieving this objective. Be sure to stay tuned in the coming months for more details on AED’s plans for continuing our national infrastructure conversation. As always, be sure to let us know if you have any thoughts or comments at firstname.lastname@example.org.
Article Date: 2012-07-09
Source: Associated Equipment Distributors
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