Infrastructure Alert - May 21, 2013

by Cozen O'Connor
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On May 17, President Obama issued a presidential memorandum to aid in streamline permitting processes for infrastructure projects.  The memorandum creates a steering committee whose goal is to cut project completion times in half. Among the departments participating are the Departments of Agriculture, Commerce, Defense, Energy, Homeland Security, Interior and Transportation.

ON THE HILL

The Water Resources Development Act of 2013 (WRDA, S. 601) passed the Senate on Thursday by a vote of 83-14. WRDA is estimated to cost $12 billion and provides the U.S. Army Corps of Engineers greater authority in choosing which projects will be pursued. WRDA also streamlines the reviewing and issuance of permits, including environmental permits, for new water projects and authorizes funds for deepening harbors and waterways in preparation for the Panama Canal expansion. WRDA also includes a new program based on the Transpiration Infrastructure Finance and Innovation Act (TIFIA) named the Water Infrastructure Finance and Innovation Act (WIFIA). WIFIA loans and loan guarantees will provide access to low-cost capital for water projects. Finally, WRDA creates a new national levee safety program. Differing from the version passed by the Senate Environment and Public Works (EPW) Committee, an amendment in the final bill would increase Harbor Maintenance Trust Fund (HMTF) funding for port and harbor maintenance $100 million per year for the next six years, starting at $1 billion in FY2014. The EPW version of the bill mandated that all revenues received by the HMTF be used solely for harbor and port maintenance.

Sen. Tom Udall (D-N.M.) withdrew his amendment on Wednesday that would have turned the  streamlining of infrastructure projects into a five-year pilot program. Senate Environment and Public Works Chairwoman Boxer (D-Calif.) and Sen. Udall arrived at a deal that the streamlining provisions would expire after 10 years. Sens. David Vitter (R-La.) and Mary Landrieu (D-La.) withdrew their amendment to suspend flood insurance premiums increases over the next five years after Sen. Pat Toomey (R-Pa.) placed a hold on it.  Sen. Toomey regarded the amendment as a step backwards from flood insurance reform that passed last year. Two amendments from Sen. Tom Coburn (R-Okla.) failed. One was an amendment to strike a provision in WRDA that would increase the time allowed for beach replenishment programs from 50 years to 65. The other would remove restrictions placed on the aforementioned commission to shut down floundering projects so that all Army Corps of Engineers projects are subject to shutdown from the commission.

Of the 14 senators voting nay, only one was a Democrat, Sen. Patrick Leahy (D-Vt.), who objected to the streamlining provisions even with the Boxer-Udall agreement to have them expire after 10 years. Some environmental groups have castigated the streamlining as injurious to environmental surveys. The remaining 13 nays were Republicans. Heritage Action had added the WRDA vote to its influential scorecard based on the premise that the true cost of the bill is over the Congressional Budget Office (CBO) estimation of $12 billion, among other objections. The U.S. Chamber of Commerce endorsed S. 601, and may include it on its annual scorecard. The Obama administration has been critical of the bill. On May 6, the White House released a castigation of WRDA, particularly over its streamlining of new corps projects while a $60 million backlog exists. WRDA does, however, create a commission to deauthorize projects that are no longer feasible or in the federal interest. The House Transportation and Infrastructure Committee will draft its own version of WRDA instead of taking up the Senate bill. Chairman Bill Shuster (R-Pa.) has stated that he will take up WRDA in the summer.

Tomorrow, the Senate Commerce Committee will consider the nomination of Charlotte Mayor Anthony Foxx to Secretary of Transportation.

Seventeen Republicans Senators have written a letter to FAA Administrator Michael Huerta, requesting that he explain why pre-sequester payments were given to FAA employees prior to sequestration cuts. The FAA insists that the payments were not bonuses.

Rep. Earl Blumenauer (D-Ore.) penned an op-ed recently in favor of a national vehicle miles traveled (VMT) tax, lauding Oregon’s VMT pilot program. 

This afternoon, the House Transportation and Infrastructure Subcommittee on Railroads, Pipelines and Hazardous Materials will hold a hearing titled “Understanding the Cost Drivers of Passenger Rail.” Amtrak CEO and President Joseph H. Boardman, among others, will testify.  Testimony and streaming will be available here.

On May 9, Sen. Rand Paul (R-Ky.) introduced S. 911, the Emergency Transportation Safety Fund Act.  The bill would create an emergency transportation fund to repair existing infrastructure, funded by repatriated capital at a repatriation rate of 5 percent. 

On May 7, Sen. Frank Lautenberg (D-N.J.) introduced S. 880, the Safe Highways and Infrastructure Preservation Act of 2013, which would impose an 80,000 lb. limit on the National Highway System. The bill would also render state laws that grant exemptions to such a limit powerless.

AT THE AGENCIES

President Obama has nominated Michael Whitaker to Deputy Administrator of the FAA.

Maritime Administrator David Matsuda has announced that he is stepping down. He has served as Administrator since 2010.  Beginning at the end of May, interim Deputy Administrator Chip Jaenichen will become the Acting Administrator.

The Department of Transportation announced that it will delay a rule for electronic logging requirements for trucks. The “Electronic Logging Devices and Hours of Service Supporting Documents” rule derived from MAP-21, has been delayed until November 18.

CBO released a new projection for the Highway Trust Fund. After FY2014, when the Moving Ahead for Progress in the 21st Century Act (MAP-21) expires, the highway account will only have an estimated $4 billion and the transit account will only have an estimated $2 billion. CBO adds that, “Under CBO’s baseline projections, the highway and transit accounts of the Highway Trust Fund will have insufficient revenues to meet all obligations starting in fiscal year 2015. Under current law, the Highway Trust Fund cannot incur negative balances and has no authority to borrow additional funds.”

Yesterday, United Airlines flew a Boeing 787 Dreamliner for the first time in more than four months. The Dreamliner was grounded in January due to a fire caused by its lithium-ion battery. Thus far, Boeing, the FAA and the NTSB have not found a root cause of the fire.  However, Boeing has modified the battery system, the FAA has approved the modifications, the Dreamliner has flown several successful domestic test flights, and the planes have already resumed commercial service overseas.

IN THE STATES

In 39 states, legislators have submitted 85 bills to curb the use of unmanned aerial vehicles, or drones, to protect privacy rights. 

California: The Los Angeles City Council has approved the Southern California International Gateway and its environmental analysis.  The rail yard proposal, however, is mired in controversy, and is expected to be the subject of lawsuits by environmental and social justice groups. The $500 million rail yard proposal would be capable of handling up to 2.8 million 20-foot shipping containers a year by 2035 and 8,200 trucks a day.

Illinois: An audit of the Illinois Department of Transportation has found that in the past two years, less than half of the money spent from the state road fund went directly to road construction costs. The majority of funds expended by the road fund went to Illinois DOT salaries and bond debt. 

Maryland: On May 16, Governor Martin O’Malley has signed the Transportation Infrastructure Investment Act of 2013.  The $4 billion, six-year transportation legislation phases in the higher wholesale gasoline taxes over several years, with the first increase of 1 percent occurring in July and eventually reaching 3 percent in July 2016.  Additionally, it indexes the 23.5¢ per gallon tax on gasoline and 24¢ per gallon on diesel to inflation, allowing automatic increases each year. The increased taxes are expected to generate more than $800 million per year. The law also relies on a federal action to allow states to collect out-of-state sales tax on Internet retailers. If Congress does not pass legislation empowering states to levy this tax by 2015, then Maryland’s sales tax on gasoline will automatically increase an additional 2 percent.

Governor O’Malley has announced $1.2 billion of “first round” in new highway and transit projects to fund.

Virginia: On May 13, Governor Bob McDonnell signed the $6 billion transportation bill into law.  The legislation eliminates the 17.5¢ per gallon retail gasoline tax  and imposes in its stead a 3.5 percent wholesale gasoline tax and a 6 percent tax on diesel. The law also raises titling fees and increases the sales taxes from 5 percent to 5.3 percent. Similar to the Maryland transportation law, it assumes revenues from online sales tax with automatic tax increases if it does not receive that authority from Congress. 

On May 15, the Commonwealth Transportation Board released its working draft of the “Fiscal Years 2014-2019 Six-Year Improvement Program,” which increases transportation funding by $4 billion to $15.4 billion over the next six fiscal years beginning July 1.

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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