Infrastructure Alert - January 15, 2013

by Cozen O'Connor
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The $50.7 billion Hurricane Sandy relief package is currently being debated in the House.  Monday night, the Rules Committee approved 13 amendments for floor consideration.  After neglecting to schedule a vote on an aid package that had been approved by the Senate in the last Congress, the House rushed to pass a $9.7 billion bill to bolster the federal flood insurance fund and is now hashing out the rest of the package.

The $5.25 billion expansion of the Panama Canal is now officially half-complete.  The U.S. Army Corps of Engineers has estimated that American ports are spending between $6 billion and $8 billion annually in local, private and federal funding in preparation for increased maritime activity and deeper draft vessels as a result of the expanded Panama Canal, and foreign ports are rushing to do the same.  

ON THE HILL

President Obama signed into law the $9.7 billion bill replenishing the National Flood Insurance Program (NFIP).  After the House dragged its feet on voting on any Sandy relief measure in the 112th Congress, the House separated the $9.7 billion flood insurance portion of it as a separate bill for quick passage.  The law will increase the NFIP’s borrowing authority from $20.75 billion to $30.425 billion and will allow the NFIP to meet obligations to policyholders affected by Sandy.

While over 90 amendments were proposed to the Hurricane Sandy relief bill, HR 152, the House Rules Committee approved 13 for floor consideration. HR 152 is a base bill that only provides $17 billion of the $50 billion package. The remaining $33.7 billion originates from a Rep. Rodney Frelinghuysen (R-N.J.) companion amendment for long-term projects.  One of the remaining thirteen amendments under consideration would offset the $17 billion bill with 1.63 percent across-the-board cuts to domestic and defense spending.  Other amendments seek to restrict or clarify how the money is spent, to ensure that it is spent on either disaster-affected areas or projects.

AT THE AGENCIES

The U.S. Army Corps of Engineers has announced that contractors have completed the first phase of emergency work to remove rocks that have held up barge traffic in the drought-stricken Mississippi River. The Army Corps of Engineers has been battling the drought in the Mississippi River for more than a month.  Relieving the Mississippi River by diverting water from the Missouri River, is, however, off-limits to the corps under a 1940s-era flood control law.  Apart from continued rock removal, the corps has few options in its arsenal left.  Further water loss to the Mississippi will jeopardize the viability of the waterway for cargo ships and interrupt supply chains.

Secretary of Homeland Security Janet Napolitano will continue to serve as secretary through the second term of the Obama administration  Under Napolitano, Customs and Border Protection and the Border Patrol have grown substantially.  Secretary of Transportation Ray LaHood has announced he will turn over the helm of the Department of Transportation but has set no timeline for his departure.

The GAO has released a report that advocates for fees on motorists based on miles-traveled to achieve more efficient and equitable system of funding the Highway Trust Fund.  Passenger vehicle drivers would pay between $108 and $248 yearly in mileage-based fees, whereas the average total of federal gas tax revenue per driver is about $96.  The GAO has estimated such a system would cost more to administer than collecting gas taxes.

The FAA is investigating an incident last week in which a Boeing 787 Dreamliner was leaking fuel.  The FAA’s investigation will involve a comprehensive review of the Dreamliner, including its critical systems, design, manufacture and assembly.

The National Highway Traffic Safety Administration (NHTSA) has proposed rules mandating electric vehicles produce a minimal level of sound so pedestrians and cyclists can hear the vehicles when they are travelling 18 miles per hour or less.  The Pedestrian Safety Enhancement Act of 2010 requires the NHTSA to implement sound rules on electric vehicles for increased awareness and safety of pedestrians and cyclists.

IN THE STATES

Virginia:
Gov. Bob McDonnell unveiled his plan to alter the state’s financing of transportation and infrastructure projects, and has proposed eliminating the state’s gas tax and replacing it with increasing the state’s sales tax from 5 percent to 5.8 percent.  McDonnell’s plan would not eliminate the 17.5 percent state tax on diesel fuel.  The plan would also impose a $100 yearly fee on alternative fuel cars, and put $1 billion from Internet sales tax revenue that would originate from a proposed bill in Congress towards transportation financing as well.  McDonnell estimates his plan would raise about $3.1 billion over five years.  Virginia’s current transportation system is projected to run out of money in 2017.

Maryland: Gov. Martin O’Malley announced the Maryland General Assembly may consider funding state transportation through indexing the gas tax to inflation or increasing the state sales tax in an effort to fund needed transportation infrastructure.  The Maryland state gas tax has remained 23.5 cents per gallon since 1992.  Raising the state sales tax from 6 percent to 7 percent or indexing the gas tax to inflation is estimated to increase tax revenues about $700 million per year.

Pennsylvania: The Pennsylvania Turnpike Commission’s increased toll rates by 10 percent on cash customers and 2 percent for E-ZPass customers on January 6. The increase in tolls is estimated to increase toll revenue by $25 million in 2013.

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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