In a major victory for the aggregates and construction industries, both chambers of Congress voted to approve, and President Obama signed, The Fixing America's Surface Transportation, or FAST Act. The $305 billion, five-year bill passed the House by a vote of 359 to 65 and the Senate by a vote of 83 to 16. President Obama signed the bill on Dec. 4, 2015.

The legislation – the first long-term surface transportation bill in a decade –provides state and local governments greater certainty about transportation funding so they can plan major projects. There have been three-dozen short-term extensions since the last four-year bill expired in 2009. Aggregates operations are certain to be the down-line beneficiaries of the increased federal spending.

The bill, among other things:

• Authorizes the Highway Trust Fund through 2020.
• Establishes a pilot program for public-private transit partnerships.
• Restores the authority of Import-Export bank, which helps foreign customers finance the purchase of U.S. products.
• Facilitates commerce and the movement of goods by refocusing existing funding for a National Highway Freight Program and a Nationally Significant Freight and Highway Projects Program.
• Expands funding available for bridges off the National Highway System.
• Streamlines the environmental review and permitting process to accelerate project approvals, without sacrificing environmental protections.
• Eliminates or consolidates at least six separate offices within the Department of Transportation and establishes a National Surface Transportation and Innovative Finance Bureau to help states, local governments, and the private sector with project delivery.
• Increases transparency by requiring the Department of Transportation to provide project-level information to Congress and the public.
• Promotes the deployment of transportation technologies and congestion management tools.
• Encourages installation of vehicle-to-infrastructure equipment to improve congestion and safety

NSSGA Analyzes Bill

The National Stone, Sand and Gravel Association (NSSGA) conducted a free webinar explaining the main components of the bill. Michael W. Johnson, NSSGA president and CEO, predicted that due to the bill, equipment sales to aggregates producers would pick up fast and production at aggregates operations would see a spike starting in the second and third years of the funding mechanism.

The seminar was conducted by Johnson, Pam Whitted, senior vice president legislative and regulator affairs; Jim Riley Sr., director of government affairs; Michele Stanley, director of government affairs; and Ashley Amidon, director of government affairs.

“This is significant legislation that stops 36 straight extensions of the highway program in this country,” Johnson said. “The last time we had a bill this long in highway transportation policy was 1998. It is long overdue.”

In simple terms, the FAST Act allows the construction industry to get back to work. It boosts highway spending by 15 percent and transit spending by 18 percent.

“The bill also makes meaningful steps to cut red tape and speed permitting so projects can get started more quickly,” Johnson said.

Whitted detailed the legislative landscape that led to the passage of the bill, and revealed the names of the legislators who did not vote for it.

“We are going to have to do some real work with these members to make them understand the importance of this program,” Whitted said. “It is not republican or democrat, it is for America.”

The $305.5-billion bill contains total U.S. DOT Funding Authorization of:

• FY16–$58.3 billion.
• FY17–$59.8 billion.
• FY18–$61 billion.
• FY19–$62.5 billion.
• FY20–$64 billion.

“I can’t emphasize enough how much we have pushed for increased funding,” Whitted said. “And indeed we did get an increase in funding. Not as much as needed … but certainly better than we anticipated.”

Of the $305.5 billion, $281 billion represents the gross contract authority for highways over the five years of the bill. The rest of the monies will go to future general fund appropriations, the Emergency Relief Program and the Emergency Preparedness Fund.

Many people are asking how the bill is paid for. Over and above the amount that will come from the Highway Trust Fund, Congress tapped a variety of sources to make up the shortfall. These include, among others:

• $53.3 billion from the Federal Reserve surplus.
• $6.9 billion from a Federal Reserve dividend payment cut.
• $6.2 billion from the sale of oil from the Strategic Petroleum Reserve.
• $5.2 billion from indexing customs fees for inflation.
• 2.4 billion from allowing the IRS to hire private tax collectors.

Johnson noted that while the association is happy to see this bill, and the aggregates industry will take advantage of it, it should not be forgotten that the Highway Trust Fund, and the larger issues regarding its future solvency, were not addressed by Congress but will eventually have to be up the road.

But the good news, for right now, is that money is slated to move very soon. “You will start to see monies flow to the departments of transportation in 2016,” Johnson said

Aggregates Producers Speak Out

Aggregates producers are pleased with the bill, and look forward to the industry growth it is sure to generate.

"The wide, bipartisan margin of victory for the FAST Act reassures all of us of the support for federal investment in this nation's roads and bridges,” said J. Thomas Hill, president and CEO of Vulcan Materials Co. He told Rock Products, “Over the past several years, we engaged our employees, leveraged our trade associations, and spent a lot of time on Capitol Hill advocating for increased funding and long-term highway program stability. The FAST Act represents a major victory for the nation, the entire industry, and Vulcan."

Martin Marietta Chairman, President and CEO Ward Nye told Rock Products the long-term investment is long overdue. “All Americans should celebrate the passage of the FAST Act,” he said. “It will not only improve our country’s global competitiveness, but also our safety and way of life. Infrastructure in the United States has desperately needed this type of long-term investment for nearly a decade. At Martin Marietta, we are excited about the positive and enduring role we can play in providing the quality materials needed as states advance new multi-year infrastructure projects resulting from this important legislation.”

For Summit Materials, the shortfalls of the bill are evident, but the development is positive. "For the first time in more than a decade, there is a reliable commitment to funding the Highway Trust Fund over a multi-year period,” the company’s CEO, Tom Hill, told Rock Products. “Although a great first step, the bill does not provide adequate appropriation levels to make a dent in the condition of our roads and bridges. In addition, we still do not have a long-term solution to address funding shortfalls beyond 2019. Again, this bill is a very positive development but the industry still has lots of work to do."

NSSGA Chairman Charles S. Luck IV, president and CEO of Luck Companies, said, "We want to thank the members of Congress for demonstrating the leadership necessary to pass a long-term highway bill. This new legislation is a commitment to the American people to guarantee them a robust infrastructure to foster economic growth, maintain our global competitiveness and improve the quality of their lives. We are grateful to so many as we would not have been successful without the diligence of thousands of people, inside and outside of our industry, who vocalized their support of the FAST Act. Their actions were critical in ensuring that Congress knew the full value and importance of a long-term highway bill."

Facing the Issues

Although the FAST Act has become law, there are still some issues that have to be addressed up the road, chief among them, convincing a skeptical Congress that increasing gas taxes is in the long term, the most practical way to shore up the Highway Trust Fund for the future.

Transportation Secretary Anthony Foxx noted that the battle is not over. “The good news is that the long winter of uncertainty for state DOTs has come to an end,” he said. “The FAST Act also takes the important step of increasing funding. Under the Act, funding will go up by roughly 11 percent over five years. This is a down-payment for building a 21st century transportation system, though it is still far short of the amount needed to reduce congestion on our roads and meet the increasing demands on our transportation systems.”

American Road & Transportation Builders Association (ARTBA) President and CEO Pete Ruane agreed, saying, “Unfortunately, a large orange and black ‘Work Ahead’ sign still remains standing in the Nation’s Capital when it comes to providing sustainable and game-changing surface transportation capital investment.”