Infrastructure Alert - February 26, 2014

by Cozen O'Connor
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President Obama will announce his support for a four-year, $302 billion transportation funding bill to repair and rebuild bridges, tunnels, roads and transit. About $150 billion of the bill would be paid for through corporate tax reform. More details on the proposal are expected to be included in the President’s budget. He is in St. Paul today to announce a new, $600 million round of TIGER grants.

Panama Canal expansion work has resumed after a deal was reached between the construction consortium and canal authorities regarding how cost overruns will be paid. The Panama Canal Authority has agreed to pay the consortium, Grupo Unidos por el Canal, $36.8 million towards outstanding invoices, and the estimated $1.6 billion in cost overruns will be addressed via arbitration.

President Obama has directed the Department of Transportation and the Environmental Protection Agency to issue a new rule promoting energy efficiency for heavy-duty trucks by March 31, 2015 to be implemented a year after. The new standards would apply to vehicles of model years 2018 and later.

ON THE HILL

On February 12, the Senate Committee on Environment and Public Works held a hearing  titled, “MAP-21 Reauthorization: The Economic Importance of Maintaining Federal Investments in our Transportation Infrastructure.” During the hearing, Chairwoman Barbara Boxer (D-Calif.) said she intends to introduce a surface transportation reauthorization bill in April. She also stated that the Committee on Finance, and not the Committee on Environment and Public Works, would address the funding mechanisms, though she expressed her confidence that the bill would be long-term and sustainable. Ranking Member David Vitter (R-La.) stated he would not support a bill that includes a net tax increase. Sen. Jeff Sessions (R-Ala.) was very critical of raising the federal gasoline tax during the hearing and criticized Chamber of Commerce CEO Thomas Donohue for advocating for a tax increase as a solution to the Highway Trust Fund projected shortfall. Sen. Sessions asked if Donohue would support other measures instead of raising the gasoline tax, such as cutting spending elsewhere to fund the bill, and Donohue stated he would support such a proposal but was skeptical that it was realistic. The Moving Ahead for Progress in the 21st Century Act, the current surface transportation authorization, expires in September. Chairwoman Boxer and House Transportation and Infrastructure Chairman Bill Shuster (R-Pa.) have both stated that they will push for at least a five-year bill.

On February 11, Rep. Gary Peters (D-Mich.) introduced H.R. 4057, the Customs Plaza Construction Act of 2014. The bill would create a new customs plaza for the $2.1 billion North American International Trade Crossing bridge that the Canadian government is funding.

On February 21, Rep. Jeff Denham (R-Calif.), Chairman of the House Transportation and Infrastructure Subcommittee on Rail and leading critic of California High-Speed Rail, issued a press release criticizing the Federal Railroad Administration’s decision to delay the date by which the California High Speed Rail Authority was to provide $180 million according to its grant agreement. Chairman Denham introduced H.R. 3893, the Responsible Rail and Deterring Deficiency Act, on January 16. The bill would suspend federal funding to the project.

Sen. Chuck Grassley (R-Iowa) and Sen. Maria Cantwell (D-Wash.) have introduced S. 2021, the Biodiesel Tax Incentive Reform and Extension Act of 2014. The bill that would extend the $1 per-gallon tax credit for biodiesel producers through 2017. The provision expired at the end of 2013. Senate Finance Chairman Ron Wyden (D-Ore.) has indicated his support for renewing this and other extenders.

This afternoon, the House Transportation and Infrastructure Subcommittee on Railroads, Pipelines, and Hazardous Materials will hold a hearing titled “Oversight of Passenger and Freight Rail Safety,” which was postponed from February 26. Jospeh Szabo, Administrator of the Federal Railroad Administration, Cynthia Quarterman, Administrator of the Pipeline and Hazardous Materials Safety Administration, Robert Sumwalt, Member of the National Transportation Safety Board, John Tolman, Vice President and National Legislative Representative of the Brotherhood of Locomotive Engineers and Trainmen, Jack Gerard, President and Chief Executive Officer of the American Petroleum Institute, Edward Hamberger, President and Chief Executive Officer of the Association of American Railroads, and Michael Melaniphy, President of the American Public Transportation Association will testify. Witness testimony and hearing streaming will be available here.

Tomorrow, the House Transportation and Infrastructure Subcommittee on Highways and Transit will hold a hearing titled “Improving the Nation’s Highway Freight Network.” Mark Gottlieb, Secretary of the Wisconsin Department of Transportation, will testify on behalf of the American Association of State Highway and Transportation Officials, and Gerald Bennett, the Mayor of Palos Hills, Ill., will testify on behalf of the Chicago Metropolitan Agency for Planning. Henry Maier, the President and Chief Executive Officer of FedEx Ground, and Susan Alt, the Senior Vice President of Public Affairs at Volvo Group North America, will testify as well. Witness testimony and hearing streaming will be available here .

On March 4, the House Transportation and Infrastructure Subcommittee on Coast Guard and Maritime Transportation will hold a hearing titled “Maritime Regulations: Impacts on Safety, Security, Jobs and the Environment.” More information, witness identities and testimony as they become available, and streaming will be available here.

AT THE AGENCIES

Yesterday, the Department of Transportation issued an emergency order requiring stricter standards for shippers transporting crude oil by rail. Shippers will now be required to test crude oil coming from the Bakken region and classify it according to federal safety regulations.

On February 21, the Department of Transportation and the Association of American Railroads (AAR) announced anagreement for more track inspections and a lower speed limit for freight trains carrying crude oil. The agreement states that any member freight rail company of the AAR will comply with most of the new regulations by July 1, 2014. The agreement will also have industry install wheel alignment detectors every 40 miles of track.

According to a February 20 article in The Oregonian , the U.S. has 76,000 railroad bridges and the Federal Railroad Administration has only five inspectors to inspect all of them. The article details that one inspector inspects all of Oregon’s 1,263 bridges, as well as all the bridges in Washington, Montana, Idaho, North Dakota, South Dakota, Wyoming and Alaska.

On February 12, the Government Accountability Office released a report titled “Maritime Administration: Ship Disposal Program Needs Improved Communications and Updated Strategic Plan.” The report details contractors’ confusion with MARAD’s source-selection process. The report also concludes that although MARAD is required to provide regular reports to Congress on the backlog of obsolete ships, these reports do not include strategic short- and long-term direction for the program. GAO suggests that MARAD create and updated strategic plan.

On February 21, the Office of Inspector General of the Department of Transportation initiated an audit of the FAA’s implementation of a pilots record database . The audit was requested by the Rep. Frank LoBiondo (R-N.J.) and Rep. Rick Larsen (D-Wash.), Chairman and Ranking Member respectively of the House Transportation and Infrastructure Subcommittee on Aviation. The Office of Inspector General has also initiated an audit of the FAA’s oversight in the use of flight deck automation by air carrier pilots, requested by “the current and former Ranking Members of the House Transportation and Infrastructure Committee and its Subcommittee on Aviation.” On February 20, the Office of Inspector General initiated an audit of the productivity of FAA air traffic control towers, requested by House Transportation and Infrastructure Chairman Bill Shuster (R-Pa.) and Aviation Subcommittee Chairman LoBiondo.

IN THE STATES

At the recent National Governors Association meeting, Republican Governors Jan Brewer of Arizona and Dave Heineman of Nebraska both suggested a devolution of the gas taxes and transportation funding solely to the states.

California: In addition to Rep. Denham’s press release, the California High-Speed Rail project continues to be plagued by criticism. On February 14, Lieutenant Governor Gavin Newsom advocated for reallocating the high-speed rail bond funding , approved by voters, towards other projects. Newsom was formerly very supportive of the project, and Gov. Jerry Brown is one of its largest supporters. A Probolsky Research poll last month indicated that 42.8 percent of voters would vote to stop the project , compared with only 23.6 percent who would vote to continue it.

Michigan: The Canadian government has granted an environmental approval for the proposed twin span, six-lane expansion of the privately owned Ambassador bridge between Windsor and Detroit. Several other assessment and approvals are still required before construction can begin. Representatives from Gov. Rick Snyder’s office stated that the expansion will have no effect on the proposed, Canadian-funded, Detroit River International Crossing bridge construction.

Virginia: On February 13, the Virginia Senate voted 37-1 to repeal the $64 annual fee on hybrid vehicles. The fee was part of Gov. Bob McDonnell’s transportation funding package passed in 2013. The House of Delegates has already passed the measure, and Gov. Terry McAuliffe has indicated that he will sign it.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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