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Costa Supports Highway Bill Reauthorization

Press Release

Location: Washington, DC

Rep. Jim Costa supported the Moving Ahead for Progress in the 21st Century Act (MAP-21), a two year highway bill reauthorization, which had been held up in negotiations between the House and the Senate for months. Costa scored a victory for Valley motor carriers by successfully inserting language to provide small and mid-size truckers the flexibility necessary to remain competitive. The bill also extends the current 3.4% interest rate on federal student loans, saving students thousands of dollars in interest over the life of the loan.

"At the final hour, Congress finally came together to pass legislation that will create jobs for our Valley residents and some certainty for communities, construction workers, and students," said Costa. "Today we voted in a bipartisan fashion to invest in our bridges and roads and our young people."

The version of MAP-21 that originally cleared the Senate contained provisions that would reduce wide-spread fraud in the trucking industry. Specifically, the bill increased the cost of the broker bond from $10,000 to $100,000 in order to crackdown on bad actors in the broker and freight forwarding industries. However, the fraud-fighting provisions also required all motor carriers to register as a broker -- and purchase the broker bond - if the trucker engages in the standard industry practice of "subhauling."

Though the increase in the bond was a welcome change, Costa raised concerns regarding the new bonding requirement with the Transportation and Infrastructure Committee back in February. Given the seasonality of the trucking industry, agricultural, and intermodal carriers occasionally subhaul with other registered motor carriers to get their goods to market efficiently during the busiest times of the year.

Costa rallied support for the inclusion of an exemption in the broker registration requirements for motor carriers who subhaul with other registered motor carriers. Costa's proposed language was included in the final version of the bill, which cleared the House today. The California Trucking Association shared similar concerns and supported Costa's amendment.

"The new bonding requirement would have increased shipping costs and jeopardized peak seasonal freight transport," said Costa. "Working together we were able to maintain the much-needed fraud protections while preserving the flexibility necessary for small truckers to compete."

"With this critical fix to the transportation bill, small and mid-size trucking businesses can continue moving goods safely and efficiently across the Valley and the country," said Bud Wallace, a member of the Board of Directors of the California Trucking Association. "We applaud Congressman Costa and all our Congressional allies who fought so hard to maintain the flexibility Valley businesses need to stay competitive."

In addition to the highway bill reauthorization, the legislation also prevents the July 1st hike on the interest rates for federally subsidized student loans from 3.4% to 6.8%. This increase would have cost 7 million students an average of $2,800 in additional interest over the life of their loans. This legislation extends the current interest rates for one year.

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