Infrastructure Alert - January 3, 2013

by Cozen O'Connor

The 112th Congress adjourned before voting on any Hurricane Sandy relief bill. Although the Senate passed a $60.4 billion relief bill, the House did not hold a vote on it nor the Republican-backed alternative $27 billion bill.  After the 113th Congress has convened, the speaker has announced that the House will vote Friday, January 4, on a $9.7 billion bill to increase the borrowing authority of the National Flood Insurance Program and will follow up with a January 15 vote on a separate bill containing $50 billion in relief.

The International Longshoremen’s Association and the U.S. Maritime Alliance have agreed to a new collective bargaining agreement in principle to avoid strikes in 14 ports along the East and Gulf coasts.  The deal allows for a 30-day extension of negotiations in finalizing the collective bargaining agreement.  The principal disagreement, a royalty fee the Maritime Alliance has paid dockworkers since the 1960s to offset wage decreases, has been settled in the agreement but not disclosed.

On the Hill

The Senate passed its Sandy relief bill on December 28 by a vote of 62-32, with all Senate Democrats voting in the affirmative.  The bill would provide an additional $11.5 billion for the Federal Emergency Management Agency’s Disaster Relief Fund, $10.8 billion for the Federal Transit Administration, and a $9.7 billion increase in borrowing authority for the National Flood Insurance Program.  Prior to the vote, the Senate rejected several amendments that would limit spending from Senator Tom Coburn (R-Okla.) and Senator McCain (R-Ariz.).  Prior to the vote, McCain also withdrew his proposed amendment that would restrict the $336 million to Amtrak for Sandy-related damage.  Senator Rand Paul’s (R-Ky.) amendment declaring the bill regular spending instead of emergency spending, and therefore requiring equal offsetting cuts, was also rejected.

Congress passed its deal to prevent the immediate effects of the fiscal cliff, with several provisions affecting infrastructure and transportation policy.  Notably, the deal extends the railroad maintenance tax credit equal to 50 percent of gross expenditures for maintaining railroad tracks that are owned or leased by Class II or Class III railroads through 2013.  Over the next 10 years, the extension of this railroad tax credit will cost $331 million.  The deal also restores the commuter tax break for 2012 (retroactively) and 2013, bringing the transit tax break in parity with the parking provision.  Commuters can now use $240 monthly for pretax transit expenses.  The commuter transit provision is estimated to cost $220 million over 10 years.

Three major infrastructure authorizations will require reauthorization in the 113th Congress: the Moving Ahead for Progress in the 21st Century Act (MAP-21), the Passenger Rail Investment and Improvement Act of 2008 (Amtrak reauthorization), and the Water Resources Development Act of 2007 (WRDA).  MAP-21 will expire at the end of 2014 and members will need to consider new surface transportation legislation prior to the end of the 113th Congress.  Of the greatest importance, the Highway Trust Fund is dwindling due to decreased revenue for gas taxes and, short of major reform, Congress will need to make changes to the federal excise tax on gasoline to meet this funding need.  The Amtrak reauthorization will likely feature a debate on the success of Amtrak and the possibility of privatization, as former chairman of the Transportation and Infrastructure Committee John Mica (R-Fla.) pressed for during his tenure.

Michael Huerta has been confirmed to a five-year term as the administrator of the Federal Aviation Administration (FAA).  Huerta has been serving as acting administrator since he was nominated in late 2011, but a hold on the nomination delayed his confirmation until January 1, 2013.

The remaining vacancies of the House Transportation and Infrastructure Committee have been filled by 10 Republicans and 10 Democrats. Reps. Steve Daines (R-Mont.), Roger Williams (R-Texas), Markwayne Mullin (R-Okla.), Scott Perry (R-Pa.), Rodney Davis (R-Ill.), Thomas Massie (R-Ky.), Mark Meadows (R-N.C.), Trey Radel (R-Fla.), Tom Rice (R-S.C.), and Daniel Webster (R-Fla.) will join the Committee from the Republican Party. From the Democrat Party, Reps. André Carson (D-Ind.), John Garamendi (D-Calif.), Rick Nolan (D-Minn.), Dina Titus (D-Nev.), Ann Kirkpatrick (D-Ariz.), Sean Patrick Maloney (D-N.Y.), Cheri Bustos (D-Ill.), Lois Frankel (D-Fla.), Elizabeth Esty (D-Conn.), and Janice Hahn (D-Calif.) have joined the 60-member committee as well. Subcommittee chairs have not yet been announced.

At the Agencies

The Army Corps of Engineers has diverted additional water to the Mississippi River as it attempts to stave off a potential shutdown of the crucial shipping waterway due to low water levels.  The corps has estimated the water level is falling faster than expected, and some tugboats may not be able to operate within the next week.  The corps has released water from Carlyle Lake to delay a shutdown, but a commercial river shutdown may occur as soon as January 15.  Several senators and representatives have called on the corps to divert more water to ameliorate the increasingly shallow waters, but the corps has cited a lack of jurisdictional authority in its reluctance to do so.

In the States

Pennsylvania: Governor Tom Corbett is expected to release his administration’s transportation plan early this year.  The highly anticipated plan will use the state’s Transportation Funding Advisory Commission report as a blueprint, and will address highways, bridges, mass transit and rail.  The report revealed that of the 25,000 bridges the Commonwealth of Pennsylvania maintains, about 20 percent are classified as structurally deficient. More than 8,000 miles of state-maintained road has been rated in poor condition.  The report recommends generating $2.5 billion in annual revenue to fund transportation improvements.

New York: According to a report released by Comptroller Thomas DiNapoli, state and local governments face an $89 billion shortfall for infrastructure funding over the next 20 years.  The report cites the recession, high construction and energy costs, and lowered property tax collections as contributing factors.  The report recommends spending of $250 billion on water, sewer and highway systems at the state, county, city and authority level over the next 20 years, but collectively New York is expected to only raise and spend $161 billion. 

The New York Thruway Authority approved a $3.1 billion design to replace the Tappan Zee Bridge. The project was sped up by Governor Andrew Cuomo, who encouraged the state legislature to pass a law allowing the bridge to be built as its designed.  The Tappan Zee Contractors, a consortium of The American Bridge Company, which built the existing Tappan Zee Bridge in the 1950s, Fluor Enterprise, and others, were awarded the contract over two competing contractors.  The project will also require $500 to $800 million in environmental mitigation, management and financial costs.

Washington: The state of Washington has passed a law that will require electric car owners to pay a $100 yearly fee. The intention of the fee is to supplement revenue lost from electric car owners not paying the state 37.5¢ gasoline tax, the largest source of tax revenue for Washington’s infrastructure spending.  Critics of the fee, however, contend that the fee is barely large enough to cover administrational overhead in collecting the fee, and that the tax is unfair as electric vehicle owners already pay taxes on the electricity used to fuel their vehicles.  The fee will apply to about 1,600 vehicles in the state, and does not apply to hybrid vehicles or those incapable of travelling speeds of over 35 miles per hour.

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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