The National Academies

NCFRP 29 [Final]

New Dedicated Revenue Mechanisms for Freight Transportation Investment

  Project Data
Funds: $500,000
Research Agency: The Tioga Group, Inc.
Principal Investigator: Daniel S. Smith
Effective Date: 1/22/2010
Completion Date: 10/17/2011

As part of their preparation for discussions related the future surface transportation legislation, a number of associations (such as AASHTO, ATA, and ARTBA, among others) have suggested there might be a non-Highway Trust Fund account to support freight-oriented investment, funded through alternative funding mechanisms, that is, not reliant on fuel taxes. Examples of the types of freight investment funding mechanisms being suggested include customs revenues for freight transportation purposes, container fees, bill of lading fees, weight based tax, weight-distance tax, freight transportation value tax, annual highway user vehicle fee, annual highway miles traveled fee, sales tax on motor vehicles, national vehicle safety inspection tag, carbon tax or cap-and-trade proceeds, and others might be proposed. However, some mechanisms may be precluded under existing international trade agreements or domestic laws. Some may require relatively extensive and costly administrative efforts for implementation and enforcement. Some may impose disproportionate burdens on particular regions of the country or segments of the economy. Some may have greater revenue-generating potential. The range of mechanisms is not restricted to highways, but rather spans all elements of the nation’s freight transportation infrastructure.
Previous studies of some of these mechanisms have been made primarily within a context of specific applications or general exploration of public policy initiatives. Congress and many other stakeholders are interested in identifying all viable options and the implications—both unfavorable and favorable—of such options, as well as their potential effectiveness as a source of funds to maintain and enhance the nation’s goods-movement capabilities. This NCFRP research was motivated by a perceived needed to assess comprehensively feasible, practical options that merit consideration in current policy development discussions. This research may then inform these current discussions as well as become a basis for subsequent analysis of the broader consequences of implementing dedicated revenue mechanisms to support freight transportation investment at a national level.
The objectives of this research were to (1) identify feasible, practical options for providing dedicated revenue mechanisms to support investment in freight transportation infrastructure, (2) provide a comprehensive analysis of the functioning and implications of potentially most viable options, and (3) assess the relative merits of these potentially most viable options and describe in detail requirements and steps required for their implementation and operation. The product of the research should be, in effect, a feasibility study of specific revenue mechanisms rather than a review of broad national consequences of implementing one or several such mechanisms as matters of public policy.
Tne work began with a review of domestic and international experience to prepare a comprehensive annotated list of potential freight funding mechanisms to be considered in the project. A preliminary assessment of these mechanisms as they have been or might be used in the U. S. context was made to judge which are more likely to be viable, to establish a smaller list of options to be given further study. Each such mechanism was then analyzed in greater depth and detail, considering such factors as administration of the mechanism, revenue yield, revenue stability, enforcement issues, impacts on carriers’ and shippers’ business practices, political and institutional acceptability, legislative and regulatory issues, and potential for unintended consequences such as shifting of trade flows. For those mechanisms judged to be most viable, the research team developed a detailed concept of operations indicating functional requirements, enabling technology and institutional arrangements, organizational framework, and estimated costs associated with the development, implementation and operation of the revenue system. The final report, published as NCFRP Report 15 Dedicated Revenue Mechanisms for Freight Transportation Investment, documents the analysis and presents the research team's findings in a manner designed to inform policy makers and the public about how resources might be mobilzed to support public-sector investment in infrastucture to facilitate freight transportation.

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