Stimulus bill makes it through Senate Appropriations

The $27 billion in highway funds will be distributed to states by formula and projects eligible for these funds would be expanded to include stormwater runoff, passenger and freight rail, and ports. Five percent of these funds also would be set aside for the Congestion Mitigation and Air Quality (CMAQ) program.

A significant provision in the Senate bill is the creation of a new Discretionary Grant Program for Surface Transportation Projects funded at $5.5 billion. States would have to apply for these grant funds, which could be used for traditional highway projects, however, priority would go to costly projects that could not be completed without supplemental assistance. Grants would be awarded on a competitive basis. These grant funds also would be eligible for transit, freight and passenger rail, ports and intermodal connections. FHWA would be required to establish the criteria for grant award selections 75 days after enactment of the legislation.

As with the House bill there is a “use-or-lose” requirement in the Senate bill. States would have to obligate 50% of their formula funds within 180 days, at which time unobligated funds would be redistributed to states that used their funds. All formula funds would have to be obligated one year after enactment. Funds not obligated at that deadline would go into the new discretionary grant program, rather than be redistributed to other states as in the House bill.

The Associated General Contractors of America recommended against the creation of the new discretionary grant program, arguing that it would only serve to slow down projects going to bid. When the full Senate considers the bill, Sen. Kit Bond (R-Mo.) will propose an amendment to strike the grant program provision and instead direct distribution of the $5.5 billion proportionally to all states.