Infrastructure Alert - January 29, 2013

by Cozen O'Connor

The current International Longshoremen’s Association (ILA) and U.S. Maritime Alliance (USMX) contract extension expires at the end of February 6.  Carrier-paid container royalties remain the central issue in the negotiation.  Dockworker contracts were originally set to expire September 30, 2012, but have been renegotiated and extended on a short-term basis first until December 29, 2012, and now until February 6 as the two parties are struggling to come to a long-term agreement.  If the ILA and USMX fail to reach an agreement before the expiration deadline, the ILA could strike or the USMX could shut down its East and Gulf Coast ports.  Either decision would have an immediate, negative effect on the United States that would reverberate to most sectors of the economy.  The Obama administration has declined to comment on whether or not it would intervene given a port strike, instead urging the parties to resolve their negotiations as quickly as possible.  In 2002, facing a port strike, President George W. Bush ended a 10-day, 29-port lockout on the West Coast through the invocation of the Taft-Hartley Act.  President Barack Obama did not invoke Taft-Hartley in December during an eight-day strike at the Ports of Los Angeles and Long Beach. 


Yesterday the Senate passed a $50.5 billion disaster relief bill targeting relief to victims of Hurricane Sandy by a vote of 62-36.  The bill includes $5.4 billion for the Army Corps of Engineers, $10.9 billion for transit, $16 billion for the Department of Housing and Urban Development community development programs, and $11.5 billion for the Federal Emergency Management Agency (FEMA) Disaster Relief Fund. 

Before the vote, the Senate considered an amendment proposed by Sen. Mike Lee (R-Utah) that would have offset the bill with discretionary cuts, ensuring the bill would not add to the federal deficit.  Because funds in the bill are designated emergency spending, cost offsets were not required.  His amendment would have cut fiscal year 2013 discretionary appropriations by 0.49 percent and reduced discretionary spending caps for fiscal years 2014-2021.  The amendment failed on an essentially inverse vote to the bill, 35-62.

The $50.5 billion relief bill and the previously passed $9.7 billion law authorizing additional borrowing authority for the National Flood Insurance Program is roughly equivalent to the failed $60.4 billion relief package passed by the Senate in the 112th Congress.

The Sandy disaster relief funding, however, will be subject to the cuts of the sequester. The across-the-board cuts of budget sequestration, or the sequester, were delayed by the fiscal cliff deal and will go into effect on March 1, barring legislative action.  Even though more than 80 percent of the appropriations of the bill have been classified as emergency spending, the entirety of the relief bill’s appropriations are subject to a $2.5 billion cut through the sequester.  Much of the funding for transit programs, the Army Corps of Engineers, and Community Development Block Grants are not expected to be fully obligated by March 1 and may be especially hit hard.

Senators Claire McCaskill (D-Mo.) and Pat Toomey (R-Pa.) have reiterated their joint opposition to federal earmarks and will again seek a permanent ban on earmarks in the 113th Congress.  In the 112th Congress, McCaskill and Toomey’s bill, the Earmark Elimination Act of 2011, was never voted on.  McCaskill has stated she will pursue passage of the measure through the amendment process instead of as standalone legislation.  The practice of earmarking has been banned on a temporary basis since the 112th Congress.  Prior to the ban, earmarks were frequently used to fund infrastructure and transportation projects in members’ constituent districts or states, and critics of the earmark ban decry that loss of a funding source for local infrastructure projects.

The House Committee on Transportation and Infrastructure has officially announced its oversight plan, which details the focus areas of each subcommittee.  The committee has additionally announced all of its subcommittee chairs: Frank LoBiondo (R-N.J.) will chair the Subcommittee on Aviation,. Duncan Hunter (R-Calif.) will chair the Subcommittee on Coast Guard and Maritime Transportation, Lou Barletta (R-Pa.) will chair the Subcommittee on Economic Development, Public Buildings and Emergency Management, Tom Petri (R-Wis.) will chair the Subcommittee on Highways and Transit, Jeff Denham (R-Calif.) will chair the Subcommittee on Railroads, Pipelines and Hazardous Materials, and Bob Gibbs (R-Ohio) will chair the Subcommittee on Water Resources and Environment.

Notable amongst these is Rep. Denham, who has been an outspoken opponent of California’s high speed rail.  In the 112th Congress, Denham introduced an amendment that would have barred any federal funding for California’s high-speed rail.  The current rail authorization is set to expire this year, and Denham’s subcommittee will be in the middle of the debate and crafting policy for the reauthorization.


Following its investigation of the battery fire on a Boeing 787 Dreamliner, the FAA issued an emergency directive and has officially grounded the Dreamliner.  Conflicting statements from members of Congress have not demonstrably indicated whether or not they will hold congressional hearings looking into the matter while the investigation is ongoing.  No timeline has emerged as to how or when the Dreamliner will be approved for commercial flights again.  The National Transportation Safety Board is continuing its investigation, but as it lacks regulatory authority, the FAA retains the sole authority to permit the Dreamliner to return to flight.


:  On January 16, the Port of Los Angeles began its $137.7 million construction of the West Basin Railyard, a new intermodal storage rail yard that will connect with the national freight network, linking the Port of Los Angeles and the Alameda Corridor.  The rail yard will receive $16 million through a federal Transportation Investment Generating Economic Recovery (TIGER) grant and $51.2 million through a state Proposition 1B Trade Corridors Improvement Fund (TCIF) grant.  Breaking ground begins the Phase I of the two-phase project.  Phase I will construct the new rail yard, support tracks for terminals, and double-track connections to the Alameda Corridor and national rail network.  Phase II is projected to being in 2013, and will include final rail connections and catalyze truck and commuter traffic.

Illinois: The FAA has accepted a preliminary application and approved continued consideration by Chicago for the privatization of Midway International Airport.  Mayor Rahm Emmanuel has stated he is in the process of reviewing potential bidders for leasing Midway for as many as 40 years.

Maryland: Senate President Mike Miller is proposing an additional 3 percent sales tax on gasoline to combat the state’s transportation funding shortfall, which Miller estimates would generate more than $300 million per year for the governor’s roughly $700 million plan to replenish the Transportation Trust Fund.  The current Maryland gasoline tax is 23.5¢ per gallon.  In addition to the 3 percent increase, Miller’s plan includes provisions to allow local government officials to raise their jurisdiction’s gas tax by as much as 5¢ to fund their local transportation projects.  Miller is also considering introducing plans to lease the Intercounty Connector (ICC), the struggling $2.6 billion toll road, to a private operator as another method to increase revenue for transportation projects, particularly rail.  Miller cited the $3.8 billion lease of an Indiana toll road to international investors for 75 years as his inspiration to consider leasing the 18.8 mile ICC.  Moody’s chief economist, Mark Zandi, however, has warned the state against raising the gas tax, and instead waiting for the state economy to fully recover before implementing a higher gas tax.

Michigan: Governor Rick Snyder has announced  he will pursue $1.2 billion in a combination of higher gasoline taxes and vehicle registration fees to rebuild and sustain state infrastructure.  According to administration officials, the $1.2 billion target represents an additional $120 to be raised for each Michigan vehicle.  State legislators have floated having a referendum on May 7, asking voters to decide if the $1.2 billion will be raised via the governor’s gas tax and registration fee plan, or through an alternate increase in the state’s sales tax from 6 percent to 8 percent

New York: Last week, the New York State Thruway Authority approved issuing $500 million in short-term bonds to fund the $3.9 billion, three-mile Tappan Zee Bridge construction.  Despite the lack of a comprehensive financial plan for the project, the Thruway Authority has stressed that proper revenue will be raised through a combination of tolls and long-expected federal TIFIA financing.  The exact nature and amount of the TIFIA loan, however, has not been announced.  DOT is currently reviewing 27 TIFIA applications.

Pennsylvania: Governor Tom Corbett has announced he will pursue “uncapping” the wholesale gasoline tax, which is currently capped at $1.25 per gallon.  His administration estimates that uncapping the gas tax could raise $2 billion annually for the state, and go a long way towards ameliorating the commonwealth’s transportation funding problems. 

Virginia: Governor Bob McDonnell’s plan to eliminate the state gas tax and replace it with an increase in the state sales tax and a number of other measures, detailed in our last Infrastructure Alert.  State legislators have proposed at least eight alternative plans, and which, if any, of those will emerge to be a leading opponent against McDonnell’s plan has yet to be seen.  McDonnell’s plan has received a varied array support and criticism.  The anti-tax-increase group, Americans for Tax Reform, has declared the plan a tax increase and antithetical to the group’s pledge that the governor has taken, although he disagrees.


As Congress and the states weigh their options in funding the vital infrastructure investments that both sides of the aisle agree are crucial to the United States, think tanks, interest groups, and various publications have turned their focus to funding the national infrastructure, particularly surface transportation.

Congressional Budget Office: Status of the Highway Trust Fund Under MAP-21 [Slideshow]

Tax Foundation: Gasoline Taxes and Tolls Pay for Only a Third of State and Local Road Spending

Building America’s Future: Transportation Infrastructure Report 2012

American Society of Civil Engineers: Failure to Act: The Impact of Current Infrastructure Investment on America’s Economic Future

Bloomberg Op-Ed: Want Better Roads? Kill the Gas Tax

The Transport Politic: The Federal Role in Surface Transportation Funding

USA Today: Time to Tweak Gas Taxes? States Weigh Options

Streetsblog: Confronted with Congested Pricing, People Clamor for Transit, Gas Tax

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.

© Cozen O'Connor | Attorney Advertising

Written by:

Cozen O'Connor

Cozen O'Connor on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.