Congress finally commits to infrastructure investment

“Buy America” provisions in the federal highway funding bill Congress passed in December have drawn both positive and negative attention from manufacturers.

Passage of the bill will be good news, in general, because it establishes a six-year program with consistent—though not higher compared to previous years—funding for highway, bridge, railway, bus, and other construction projects. Also, the bill creates a new grant program for nationally significant freight and highway projects, beginning with $725 million in the 2016 federal budget year and increasing over two years to $750 million a year. This new grant program is expected to create a lot of work for metal fabricating companies.

The bill increases the domestic content of rolling stock procured with Federal Transit Administration funds from 60 percent to 70 percent. It also codifies Buy America requirements for Railroad Rehabilitation & Improvement Financing (RRIF) loans. The American Public Transportation Association has opposed the increase from 60 percent to 70 percent, arguing it won’t result in more American jobs.

The highway bill also contains provisions requiring railroads to upgrade some tank cars. Edward R. Hamberger, president and CEO of the Association of American Railroads, said provisions in the bill address safety shortcomings with the Pipeline and Hazardous Materials Safety Administration’s tank car rule enacted in May. The new highway bill calls for increased thermal blanket protection for new tank cars, restricts the use of older DOT-111 tank cars that move flammable liquids, and requires top fittings protection on tank car retrofits.