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May 18, 2010 - Transportation Industry Letter - American Power Act

May 18, 2010

The Honorable John Kerry                       The Honorable Joseph Lieberman
218 Russell Senate Office Building           706 Hart Senate Office Building
Washington, DC 20510                            Washington, DC 20510

Dear Senators Kerry and Lieberman:

We write to urge you to reconsider how revenue from transportation‐based motor fuel fees
is directed in the climate and energy legislation you have recently proposed. “The American Power
Act” would impose new fees on surface transportation system use and dedicate the vast majority of
resulting revenue to activities entirely unrelated to improving the nation’s transportation
infrastructure. This significantly undermines the user fee principle for financing federal
transportation improvements that has served our nation and our economy well for more than 50
years.

Our organizations have grave concerns that this proposal would dilute the integrity of the
Federal Highway Trust Fund and significantly harm efforts to rehabilitate and improve our nation’s
transportation infrastructure under a new surface transportation bill. The draft bill would also
greatly impair the ability of states, counties, cities, and transit systems to reduce our dependence
on foreign oil and reduce transportation‐related emissions. We hope to work with you to develop a
strategy that promotes energy independence, reduces greenhouse gas emissions, and improves the
condition and capacity of critical transportation assets. In our collective judgment, the current bill
does not achieve these objectives.

Our preliminary analysis of the bill finds that tens of billions of dollars would be generated
annually from new pollution fees on transportation motor fuels. In 2013, fees from on‐road fuel
consumption would generate at least $19.5 billion. Instead of returning revenue from these fees to
improving the transportation system, the bill diverts at least 77 percent of the funds away from
transportation infrastructure investment. As carbon prices increase, the bill diverts as much as 91
percent of fuel revenues. Of particular concern, the bill limits new investment in the Highway Trust
Fund to $2.5 billion per year, far below the amount the bill raises from system users.

As we have stated previously, a proposal that diverts user fees from motor fuels while our
roads, bridges and transit systems are neglected is not sound policy. The Highway Trust Fund has
repeatedly faced insolvency from the lack of new revenue in recent years, and the U.S. Department
of Transportation estimates that our transportation infrastructure needs a $30 billion increase in
investment each year simply to be maintained. Even greater investment, at least $100 billion more
annually, is needed to improve conditions and performance.

Now is the time to create the transportation infrastructure of tomorrow with investments
that will generate millions of American jobs. We hope to work with you to develop climate and
energy legislation that benefits the environment, as well as our economy, our workers, and the
surface transportation infrastructure on which we all rely.

Sincerely,

Amalgamated Transit Union (ATU)
American Association of State Highway and Transportation Officials (AASHTO)
American Concrete Pavement Association (ACPA)
American Concrete Pressure Pipe Association (ACPPA)
American Council of Engineering Companies (ACEC)
American Highway Users Alliance
American Moving & Storage Association (AMSA)
American Public Transportation Association (APTA)
American Public Works Association (APWA)
American Road & Transportation Builders Association (ARTBA)
American Society of Civil Engineers (ASCE)
American Traffic Safety Services Association (ATSSA)
American Trucking Associations (ATA)
Associated Equipment Distributors (AED)
Associated General Contractors of America (AGC)
Association for Commuter Transportation (ACT)
Association of Equipment Manufacturers (AEM)
Association of Metropolitan Planning Organizations (AMPO)
Community Transportation Association of America (CTAA)
International Union of Operating Engineers (IUOE)
Laborers’ International Union of North America (LiUNA!)
National Asphalt Pavement Association (NAPA)
National Association of Development Organizations (NADO)
National Ready Mixed Concrete Association (NRMCA)
National Stone, Sand & Gravel Association (NSSGA)
New Starts Working Group
Portland Cement Association (PCA)
Transport Workers Union (TWU)