New Flyer Industries Inc., the leading manufacturer of heavy-duty transit buses in the United States and Canada acknowledges the Fixing America’s Surface Transportation Act (FAST) was approved and signed into law by the U.S. President Barack Obama on Friday, December 4, 2015.
FAST is the first transportation funding legislation to last longer than two years since 2005 and authorizes the funding for U.S. federal surface transportation programs through to September 30, 2020. The act reforms and strengthens transportation programs, provides long-term funding certainty and more flexibility for states and local governments, streamlines project approval processes, and maintains a strong commitment to safety.
FAST increases the current annual public transportation funding from US$10.7 billion to US$12.6 billion by 2020. Buses can be purchased by public agencies using a variety of programs under the act such as Bus and Bus Facilities, State of Good Repair, and Urbanized Area formula and others. The act also includes increased funding for “clean technology” and low- or zero-emission buses as demonstrated by the creation of $55 million of annual “low or no emission” competitive grants.
The U.S. federal government will continue to fund 80% of the capital cost of a new bus, however the funding period carryover is decreased to three years from the current five year limit. New Flyer believes this carryover reduction may result in the continued increase in the number of procurements issued by agencies, but with a lower number of total options included under each procurement.
FAST also includes a provision that creates a pilot program to allow up to three nonprofit agencies to host co-operative procurement contracts that can be interstate in nature. These are intended to be separate from the state co-operative purchasing contracts that currently exist and provide another opportunity for public transportation systems of all sizes to enhance their purchasing options, as well as take advantage of cost reductions through larger procurements.
As expected, FAST increases the “Buy America” content requirement for transit rolling stock from the current level of 60 to 65% in 2018 and to 70% in 2020. The “Buy America” regulations require that buses meet the following fundamental requirements to be eligible for funding from the United States federal government: (i) the bus must contain a minimum percentage of United States content by cost, and (ii) final bus assembly/manufacture must occur within the United States. Only the percentage of U.S. domestic content is being amended under FAST and the rules relating to final assembly remain unchanged. New Flyer expects to remain in compliance with these phased increases in U.S. domestic content under FAST.
“We are very pleased with this new long-term legislation as it now provides our customers with confidence to establish multi-year capital spending and fleet replacement plans for an aging fleet,” says Paul Soubry, New Flyer’s President and Chief Executive Officer. ”FAST adds significant stability to the market for heavy-duty transit buses and the public portion of the motor coach sector.”