WASHINGTON, D.C. – In recent years, several prominent bus manufacturers have declared bankruptcy. Outdated payment practices from the Federal Transit Administration (FTA) are contributing to the challenging business environment and unnecessarily raising costs for bus manufacturers and their customers. Amendments to the FTA are referred to the Senate Banking, Housing, and Urban Development (Banking) Committee, which has jurisdiction.
U.S. Senator Kevin Cramer (R-ND), member of the Senate Banking Committee, and U.S. Senators Tina Smith (D-MN), Katie Britt (R-AL), and John Fetterman (D-PA) introduced the Bus Rolling Stock Modernization Act. The bill modernizes the 40-year-old structure for bus payments, allowing transit agencies to make advance payments of up to 20% for bus rolling stock purchased using federal funds. This simple reform provides flexibility and cost savings for both local transit agencies and manufacturers. These savings free up much-needed capital for bus manufacturers, allowing for more significant investments in their operations to meet customer demand.
FTA regulations only allow for advance payment when the manufacturer obtains a performance bond or letter of credit, and the grantee receives pre-approval from FTA. The existing process is cumbersome, time consuming, and costly for both transit agencies and manufacturers. The Bus Rolling Stock Modernization Act would simplify the purchasing process and help drive down costs for agencies and manufacturers.
“Our legislation cuts unnecessary red tape, allowing bus manufacturers across America to invest in their production capacity,” said Cramer. “This commonsense change provides greater flexibility for North Dakota’s local transit agencies and directly benefits manufacturers like Motor Coach Industries in Pembina.”
“Each day, transit systems connect Minnesotans to their jobs, schools, and countless other opportunities – all while reducing traffic congestion,” said Smith. “This bill makes a commonsense update to current practice by cutting unnecessary red tape and strengthen the domestic bus manufacturing market. This small change will also support U.S. bus manufacturing jobs, get more buses into service, and help Americans get to their work, school, and health care appointments more easily.”
"This bill strengthens the motorcoach industry, driving job creation and economic growth at Motor Coach Industries (MCI) in Pembina, North Dakota, and across all our U.S. manufacturing sites, which employ 4,000 Americans,” said Paul Soubry, President and CEO of NFI Group, MCI’s parent company. “We sincerely appreciate the Senator’s leadership in championing policies that drive innovation, investment, and workforce expansion in American manufacturing.”
Click here for bill text.