Bloomberg News

Senate Passes Highway Bill, Leaving Next Move to House

March 14, 2012

Freeway near Los Angeles International Aiprort. Photographer: Kevork Djansezian/Getty Images

Freeway near Los Angeles International Aiprort. Photographer: Kevork Djansezian/Getty Images

The U.S. Senate passed a two-year, $109 billion surface-transportation bill as states began to assess the impact of a provision that penalizes them for hiring companies to run highways.

The focus on the highway and transit package, which both parties framed as necessary for job creation, now returns to the House.

Speaker John Boehner has said the House may work from the Senate bill, which passed 74-22, if enough Republicans can’t be persuaded to support a reworked version of a five-year, $260 billion bill proposed by Representative John Mica, a Florida Republican.

“Presidents, Republicans and Democrats have always said you can’t have a thriving economy if you can’t move goods and you can’t move people, and you can’t do it efficiently,” Senator Barbara Boxer, the California Democrat who is chairman of the Environment and Public Works Committee, said after the vote.

The current law authorizing transportation programs expires March 31.

Senators voted down most efforts to modify the bill, including several that Boxer said would gut the U.S. government’s role in financing and planning a national road network.

Bingaman Amendment

One exception was an amendment by Senator Jeff Bingaman, a New Mexico Democrat, to discourage states from leasing roads to private operators. The amendment, which passed 50-47, added to language already in the bill that would limit tax breaks for companies such as Macquarie Infrastructure Co. (MIC) that operate highways for states.

Bingaman’s amendment excludes privately operated toll roads from the formula that calculates U.S. highway aid to states. Those proposals counter other parts of the bill and President Barack Obama’s fiscal 2013 budget that encourage states to attract investment in infrastructure.

“This will hinder and constrain our ability to be innovative,” Steve Faulkner, spokesman for the Ohio Department of Transportation (51398MF), said in a telephone interview.

Officials in Ohio, who are studying whether to lease operation of the state’s turnpike, are “adamantly opposed” to the amendment, Faulkner said. He declined to say what impact it may have on specific projects.

Tolls Backed

Indiana, Illinois and Colorado are the three states directly affected by the amendment, according to Bingaman’s office. States without private roads would get more U.S. highway money.

Indiana in 2006 leased its turnpike for 75 years to Cintra, a unit of Madrid-based Ferrovial SA (FER), and Sydney-based Macquarie Infrastructure, in the largest U.S. public-private road lease deal to date.

Lawmakers and Obama are looking to companies and investors to help pay for toll roads and other projects as the Highway Trust Fund, which pays for infrastructure from U.S. fuel taxes, faces insolvency as soon as October.

The Bingaman amendment was backed by the American Trucking Associations and AAA, the former American Automobile Association. It was opposed by the U.S. Chamber of Commerce, the largest business lobbying group, and the American Road and Transportation Builders Association, a construction trade group.

“At a time when all levels of government are under increasing budgetary pressures, we should be incentivizing states who seek to leverage their limited resources,” ARTBA President Peter Ruane said in a letter to senators March 12.

The most recent surface-transportation legislation, which was passed in 2005, allocated about $286 billion over six years. Highway programs have operated on eight short-term extensions at about the same spending level since 2009, when the bill was set to expire.

The White House budget released earlier in February that proposed $476 billion over six years on surface transportation, with an immediate $50 billion this year.

To contact the reporter on this story: Jeff Plungis in Washington at jplungis@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net


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