United States: Federal Surface Transportation Reauthorization: A Temporary Detour

Facing the imminent bankruptcy of the federal Highway Trust Fund (the "HTF") and the specter of delays and reductions in payments from the HTF to the States, the US Congress last week passed the Highway and Transportation Funding Act of 2014, which extended federal surface transportation programs and funding through May 2015. We summarize below the key elements of the Act.

Last Thursday evening, July 31st, following a seesaw exchange of bills between the House of Representatives and the Senate over the course of last week, US Congressional approval was achieved on a bill that reauthorizes, on a temporary basis, funding of the federal Highway Trust Fund (the "HTF"), as well as disbursements from the HTF to various programs that benefit the States.1

The passage of the bill, entitled the Highway and Transportation Funding Act of 2014 (the "Act"), temporarily staves off the insolvency of the HTF, which was due to run dry by the end of August, through an extension of funding until May 31, 2015, and avoids delays and reductions in payments from the HTF to the States which were due to take effect as early as August 1st.2 It also effectively postpones the ongoing and frequently contentious debate within Congress regarding the future shape of federal surface transportation funding until after this year's November elections, and possibly until a new Congress is sworn into office in 2015.

A copy of the Act may be found by clicking here.

The principal elements of the Act are as follows:

  • Extension of Federal-Aid Highway Programs. The Act continues, until May 31, 2015, existing federal highway programs authorized under the most recent reauthorization bill, the Moving Ahead for Progress in the 21st Century Act ("MAP-21"),3 which was enacted in July 2012 and was due to expire on September 30th. Such extension includes, inter alia, an extension of the Transportation Infrastructure Finance and Innovation Act ("TIFIA") program.
  • Extension of Other Programs. The Act continues certain other programs funded from the HTF until May 31, 2015, including highway safety, transit and motor carrier safety programs.
  • Authorization of Expenditures. The Act reauthorizes the spending authority of the HTF to fund such transportation and other programs until May 31, 2015. The relevant appropriations are calculated pro rata based on 2014 levels at a ratio of 243/365.With respect to TIFIA, for example, based on its 2014 budget authority of $1 billion, its prorated appropriation through May 2015 would be approximately $665.8 million.
  • Funding of the HTF. One of the principal hurdles to the passage of long-term funding legislation is Congressional agreement on the source of federal appropriations. The negotiations on the temporary extension yielded multiple proposals.4 Pursuant to the Act, such funding would come from certain direct transfers and budgetary offsets, as follows:
  • Transfer from the General Fund of the US Treasury to the HTF in an amount equal to approximately $9.8 billion.
  • Transfer from the Leaking Underground Storage Tank Trust Fund to the HTF in an amount equal to $1 billion.
  • Changes in the Internal Revenue Code to permit single-employer defined benefit pension plans to use higher interest rates when calculating their future liabilities. Using higher interest rates would reduce the minimum contributions that employers are required to make to such plans. According to estimates prepared by the Congressional Budget Office ("CBO"), this would likely have two principal effects: first, a reduction in net direct spending by the Pension Benefit Guaranty Corporation of approximately $1.2 billion over the 2014-2024 period; and second, an increase in revenue over the same period of approximately $5.2 billion, primarily due to the payment of corporate income tax on amounts that would have been deductible had they been contributed by employers to such pension plans.5
  • A one-year extension of the expiry date of the US Treasury's right to collect certain customs user fees from September 30, 2023 to September 30, 2024.6 The expected revenue increase from this extension is estimated by the CBO to be approximately $3.5 billion.7

With the passage of the Act, attention will turn to the passage of a long-term transportation bill. A more permanent solution would facilitate the planning of new transportation infrastructure projects by state and local governments by ensuring the predictability of federal funding over multiple budget cycles. Such predictability is in turn important for other stakeholders including potential private entities investing in such infrastructure through public-private partnerships ("P3s") or otherwise.

The two bills described in our previous client publication, "Federal Surface Transportation Reauthorization: The Road Ahead," remain pending before Congress. The MAP-21 Reauthorization Act, which proposes to reauthorize existing programs under MAP-21 at existing levels for an additional six years, was introduced in the Senate by Senators Barbara Boxer (D-Calif.), David Vitter (R-La.), Tom Carper (D-Del.) and John Barrasso (R-Wyo.) on May 12th and was approved by the Senate Environment and Public Works Committee on May 15th.8 The GROW AMERICA Act, which is supported by the Obama Administration and would increase funding for highways, bridges, transit and rail systems over four years, was introduced in the House of Representatives by Rep. Eleanor Holmes Norton (D-DC) on June 12th.9 The long-term bill ultimately agreed to will likely reflect one of those two approaches.

The timing for resumption of bipartisan discussions regarding such a bill is unclear given the nearly ten-month extension under the Act. One of the amendments proposed by the Senate last week, sponsored by Senators Boxer and Carper along with Senator Bob Corker (R-Tenn.), would have limited the extension until December 19th so that a long term solution would be developed by the current Congress. But the House rejected this amendment and another that had been passed by the Senate, which, with a month-long Congressional recess beginning August 1st, effectively forced the Senate to pass the Act in its original form.10 It is expected that President Obama will sign the Act into law despite his advocacy for the passage of the GROW AMERICA Act.11

Special thanks to Shearman & Sterling Summer Associate Chad Remus for his contributions to this client publication.


1 The bill passed the Senate on an 81 to 13 vote, which followed the approval by the House of Representatives of the same on July 15th on a vote of 367-55. Ramsey Cox, Senate sends highway bill to Obama, THE HILL (July 31, 2014, 9:16 p.m.), http://thehill.com/blogs/floor-action/senate/214026-senate-sends-highway-bill-to-obama; Keith Laing, Highway focus shifts to Senate, THE HILL (July 16, 2014, 10:36 p.m.), http://thehill.com/policy/transportation/212416-highway-focus-shifts-to-senate.

2 Keith Laing, DOT: Infrastructure fund bankruptcy will mean 28 percent cut for states, THE HILL (July 7, 2014, 12:35 p.m.), http://thehill.com/policy/transportation/211441-foxx-states-will-face-28-percent-cut-if-road-fund-goes-bankrupt; U.S. Dep't of Transp., July 1 Letter from Secretary Foxx to State DOT CEOs on DOT's Cash Management Procedures for the Highway Account of the Highway Trust Fund, http://www.dot.gov/grow-america/highway-account-cmp-letter-to-state-dots.

3 Moving Ahead for Progress in the 21st Century Act, Pub. L No. 112-141, 126 Stat. 405-988 (2012).

4 See Ramsey Cox, Senate sends highway bill back to House, THE HILL (July 29, 2014, 7:17 p.m.), http://thehill.com/blogs/floor-action/senate/213740-senate-sends-highway-bill-back-to-house.

5 CONGRESSIONAL BUDGET OFFICE COST ESTIMATE, H.R. 5021, HIGHWAY AND TRANSPORTATION FUNDING ACT OF 2014 (July 11, 2014), http://cbo.gov/sites/default/files/cbofiles/attachments/45522-hr5021a.pdf.

6 The relevant fees are the (i) passenger and conveyance processing fees and (ii) merchandise processing fee, each of which was authorized under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). Such amounts are collected by U.S. Customs and Border Protection.


8 For the full bill, see http://www.epw.senate.gov/public/index.cfm?FuseAction=Files.View&FileStore_id=1e3c777c-8d48-49f0-b9b6-2e725470a1bb. For a summary, see http://www.epw.senate.gov/public/index.cfm?FuseAction=Files.View&FileStore_id=f331a434-eec7-41f2-8cc6-5bbc34c49b3d.

9 For the full bill, see http://www.dot.gov/sites/dot.gov/files/docs/DOT_surface_reauth-FINAL.pdf. For a section-by-section summary, see http://www.dot.gov/grow-america/sectional-analysis.

10 Keith Laing, House rejects Senate highway bill, THE HILL (July 31, 2014, 2:43 p.m.), http://thehill.com/policy/transportation/213964-house-rejects-senate-transportation-bill.

11 See Cox, Senate sends highway bill to Obama, supra note 1.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions