Infrastructure Alert - December 6, 2013

by Cozen O'Connor

The American Road & Transportation Builders Association is forecasting that the U.S. transportation infrastructure construction market will grow by 5 percent from $129 billion in 2013 to $135 billion in 2014. ARTBA forecasts that bridge and tunnel construction will grow from $28.5 billion in 2013 to $30.1 billion in 2014, port and waterway construction will grow an additional $100 million to $3.0 billion in 2014, airport runway and terminal construction will grow 17 percent to $14.7 billion in 2014, domestic light rail and subway construction will grow from $7.5 billion in 2013 to $7.9 billion in 2014, and heavy rail will increase from $11.6 billion in 2013 to $12.6 billion in 2014, largely driven by Class 1 freight rail.


Yesterday, the House passed H.R. 2719, the Transportation Security Acquisition Reform Act, unanimously. The bill, introduced in September and passed by the Committee on Homeland Security on November 21, directs the Administrator of the Transportation Security Administration to develop a multiyear technology acquisition plan to be updated every two years. The bill allows for the plan to include a classified addendum for sensitive material, and also requires the TSA to report justifications to Congress 30 days prior to any acquisitions in excess of $30 million.

The House also passed H.R. 1204, the Aviation Security Stakeholder Participation Act of 2013, yesterday by a vote of 411-3. The bill directs the TSA to create an Aviation Security Advisory Committee, as well as subcommittees for air cargo, general aviation and airport perimeter security.

As the House and Senate conferees continue to work on a reauthorization bill for the Water Resources Development Act, interest groups are weighing in on what they believe should be in the final bill. The U.S. Chamber of Commercewrote the conferees to support project authorizations without earmarks. The Chamber also supported the provision in the Senate version that restricts Harbor Maintenance Trust Fund revenues to be utilized, as well as the Senate bill’s approach to the Olmstead Lock and Dam project that would shift 100 percent of remaining costs to the general treasury, instead of the House bill’s provision that would shift only 75 percent to the general treasury. The Chamber praises the House bill’s utilization of public-private partnerships, but urges the conferees to include the Senate bill’s Water Infrastructure Finance and Innovation Act of 2013, modeled after TIFIA loans and loan guarantees. The Heritage Foundation, by contrast, has urged conferees to not make HMTF spending mandatory and to require a 2-to-1deauthorization-to-authorization ratio until backlog is reduced to in between $10 billion and $15 billion, but agrees with the Chamber that project authorizations should not be granted through earmark.

Rep. John Delaney (D-Md.) wrote an op-ed for the Washington Post, calling for his infrastructure bank bill to be included in the budget conference deal. The bill, H.R. 2084, the Partnership to Build America Act, has 25 Democrat and 25 Republican co-sponsors. The bill would create the American Infrastructure Fund capitalized with $50 billion that could be used to create up to $750 billion in infrastructure financing to state and local governments for transportation, energy, water, communication and educational infrastructure. President Obama and Vice President Biden have been calling for the creation of such a fund on several of their recent visits to ports.

On November 22, the House Small Business Subcommittee on Contracting and Workforce held a hearing to examine the implementation of the new hours of service rules issued by the Federal Motor Carrier Safety Administration and their effect on the trucking industry. The FMCSA issued the new rules on July 1 to reduce the number of fatigued drivers. The rules include a 34-hour restart requirement, including that the 34 hours include four-hour time periods between 1:00 a.m. and 5:00 a.m. FMCSA Administrator Anne Ferro testified that the new rules combat the fatigue that drivers experience, many of whom had 82 hour work weeks. The new rule reduces the maximum allowable hours of work per week from 82 to 70. Ferro included that FMCSA research indicates that 85 percent of the commercial truck driver workforce has a weekly load of 60 hours or less, and therefore would not need to use the voluntary 34-hour restart. Tilden Curl, Jr. testified on behalf of the Owner-Operator Independent Drivers Association and stated that because of the industry’s pay-by-mile system, most drivers are not paid for time that is not spent driving, and as such, this will result in the loss of pay for many drivers. Curl called for greater flexibility in the hours of service rules.

The American Transportation Research Institute released a report titled “Operational and Economic Impacts of the New Hours-of-Service.” The report finds that 66 percent of drivers have reported increased fatigue since the new rules and that 80 percent of carriers have seen productivity losses as a result of the new rules. 

On November 21, the Senate Commerce Committee held a hearing to consider the nominations of Paul JaenichenSr. to Administrator the Maritime Administration and Debra Miller to the Surface Transportation Board. During the hearing, Acting Maritime Administrator Jaenichen said he would work to promote U.S. exports from small businesses and ensure that government offices are working closely with their counterparts abroad to attract foreign investment.Jaenichen also stated that he intends to work on a strategy to revitalize the U.S. Merchant Marine program and ensure that a significantly higher proportion of U.S. overseas trade is carried on U.S. flag vessels.


The Maritime Administration has released Phase I of its Panama Canal Expansion Study. The Phase I preliminary report identifies the pending developments in world ocean trade routes and the global economy likely to affect U.S. and international freight corridors in light of the Panama Canal expansion. The report explains how the expansion will affect more concentrated U.S. port calls, use of foreign container transshipment ports, development of marine highways, and readiness of U.S. ports and related infrastructure, including navigational channel depth and height restrictions, terminal handling and storage capabilities, rail connectivity and capacity, and inland transportation systems. MARAD intends to release three more reports on phases of the study. Phase II of the study will provide a detailed assessment of the physical attributes of U.S. ports and inland infrastructure, evaluating port and infrastructure investment plans in preparation for the expansion. Phase III of the study will assess potential opportunities for applying investment funding towards future development of port capacity. Phase IV of the study will revisit the issues in this Phase I report, including feedback and recommendations from stakeholders.

The Department of Transportation Inspector General has released its Semiannual Report to Congress. The scope of the report is from April 1, 2013 to September 1, 2013.

The Federal Highway Administration has released its draft map of the “Primary Freight Network” that is required under the Moving Ahead for Progress in the 21st Century Act (MAP-21). MAP-21 limits the network to no more than 27,000 centerline miles of existing roadways that are most critical to the movement of freight. The Primary Freight Network, as well as Critical Rural Freight Corridors and portions of the Interstate System that are not designated as part of the Primary Freight Network, is a component of the National Freight Network that MAP-21 has directed the Department of Transportation to establish. Critical Rural Freight Corridors are designated as such by the states. 


California: House Railroads Chairman Jeff Denham has asked the Government Accountability Office to review whether the California High-Speed Rail Authority is violating federal agreements and whether the FRA should reevaluate the project in light of a recent court ruling. On November 25, Sacramento County Superior Court Judge Michael Kenny blocked a request from the California High-Speed Rail Authority to sell $8 billion to $10 billion in bonds that voters approved in 2008.

Pennsylvania: On November 27, Governor Tom Corbett signed a $2.3 billion bipartisan transportation bill. The law will direct $1.65 billion to highways and bridges and $476-$497 million for the state’s mass transit systems. The law repeals a 12¢ per gallon tax that gas station owners pay to the state, but removes the $1.25 per gallon cap on the Oil Company Franchise Tax and increases it over three years, generating about $2 billion in revenue per year. On January 1, 2014, a 9.5¢ increase on unleaded gasoline and a 13¢ per gallon increase on diesel will be implemented. The bill narrowly passed after being defeated twice in the House by votes of 98-103 and 89-112.

Nevada: The Legislature has set aside $4 million for the economic development office for use in attracting drone test site development. If Nevada is selected by the FAA, Governor Brian Sandoval estimates that the drone testing will generating $125 million in annual state and local tax revenue, have an overall economic impact of $2.5 billion, and create thousands of jobs for the state. Congress has mandated through the National Defense Authorization Act and the 2012 FAA reauthorization that the FAA establish test sites for drones.

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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