Photo by AP Wideworld
Obama's signature ends a long wait for a new transportation statute. It also launches the next stage: converting funds into projects.

As a standing-room-only crowd of lawmakers, construction and transportation officials, and others in the White House's East Room looked on, President Obama on July 6 signed into law a long-overdue $104.4-billion, 27-month highway-and-transit authorization bill. Putting down the last of the 12 pens he used to sign his name, Obama said, "All right. It's done," to a round of applause from the audience.

The president's signature on the Moving Ahead for Progress in the 21st Century Act (MAP-21) does put a welcome end to more than 33 frustrating months of funding via short-term stopgaps. But the enactment also launches a critical new phase as state transportation directors and construction industry officials begin to turn its funding into new road and transit projects and implement MAP-21's important policy changes.

As construction officials delve into MAP-21's 584 pages, they find much to applaud. First of all, they are happy it is finally on the books. The measure, which the Congressional Budget Office estimates at $104.4 billion, includes about $80 billion for highway construction, $21.3 billion for transit and $2.5 billion for highway-safety programs over the next two fiscal years. The highway total is about a 1% increase over 2012's level, reflecting expected inflation, lawmakers and lobbyists say.

Construction groups had desired still-higher funding. However, the tight fiscal environment, Republicans' push to restrain spending and the Highway Trust Fund's weak state all put pressure on House and Senate negotiators to hold down the bill's size. Jay Hansen, National Asphalt Pavement Association executive vice president, says, "I think it's the best deal we could have got, given the situation we're in." The funding is subject to annual appropriations.

Brian Deery, senior director of the Associated General Contractors highway and transportation division, calls MAP-21 "a child of its times." He says, "This was more 'How do we live within our means?' so to speak. And given that, I was frankly pretty pleased with the way the whole thing came out. It went beyond what I could have hoped for."

State and industry officials were especially glad to see the bill carry through the next two fiscal years. Some thought the final version might end after 2013. Hansen says, "I think the additional year … definitely will give us more certainty for the highway market."

State transportation chiefs had argued that the 10 stopgap authorizations since Sept. 30, 2009, when the last long-term bill expired, made federal funding levels unpredictable, causing them to hold back on new, multiyear projects. But with MAP-21 running through 2014, Jack Basso, American Association of State Highway and Transportation Officials director of program finance and management, says, "I'll think what you'll see is this ramping up of these bigger projects."

The law also offers ways to stretch or supplement its base funding. It sharply increases the popular Transportation Infrastructure Finance and Innovation Act (TIFIA) program, which provides loans and loan guarantees to help fund major projects. MAP-21 hikes direct federal TIFIA subsidies to $750 million in 2013 and $1 billion in 2014, from $122 million in 2012. As large as it is, that boost will have an even bigger impact on projects because each subsidy dollar supports $10 in loan volume. Thus TIFIA loans could reach $10 billion in 2014

Cathy Connor, Parsons Brinckerhoff senior vice president for government affairs, says the TIFIA provision drew significant industry attention. With MAP-21 lacking a major overall funding increase, she says, "people are looking at innovative financing and other ways of doing projects." Still, Connor notes TIFIA aid comes in the form of loans, which states and other project sponsors must repay. "This is not grant money," she says.

TIFIA can be only a part of a project's financial package; it must be accompanied by other federal aid, state dollars or money from the private sector. MAP-21 raises TIFIA's maximum share to 49% of a project's cost, from 33%.

The statute also loosens federal restrictions on tolling but only a bit. It allows states to impose tolls on new interstate lanes and permits agencies to convert existing high-occupancy vehicle lanes to high-occupancy toll lanes. But it stops well short of letting states put tolls on all current interstate miles.