Infrastructure Alert - March 2014

by Cozen O'Connor
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On March 20, a proposed shipping alliance of three major shippers was approved by the Federal Maritime Commission. The P3 Network Vessel Sharing Agreement, consisting of Maersk Line, Mediterranean Shipping Company and CMA CGM, authorizes these three ocean carriers, the largest containership operators in the world, to share space on vessels deployed in the three major east-west trades. European and Chinese regulators must approve the agreement before it can go into effect.

The Department of Transportation has updated its Highway Trust Fund ticker to reflect that the trust fund could dip below a $4 billion balance, a threshold under which the Department of Transportation will have to slow disbursements, in late July. The current authorization for surface transportation programs expires at the end of September.

ON THE HILL

On March 14, the Senate passed H.R. 4076, the Home Heating Emergency Assistance Through Transportation (HHEATT) Act of 2014. The bill, introduced by House Transportation and Infrastructure Chairman Bill Shuster on February 25, grants the Secretary of Transportation the authority to extend short-term emergency declarations from theFMCSA to allow tank truck operators delivering propane and other home heating fuels to drive for longer hours in order to speed up deliveries. President Obama signed the bill into law on March 21. The bill expires after May 31, 2014, unless the Secretary of Transportation makes a determination that a winter emergency persists past this date.

Hearings in the House and Senate highlighted some Members’ frustration with the surface transportation reauthorization funding mechanism supported by the Administration, to use revenues from corporate tax reforms to supplement Highway Trust Fund revenues to bridge the projected shortfall.

On March 13, several Senators expressed skepticism of the President’s budget plan to use corporate tax reform to prop up diminishing Highway Trust Fund revenues. During the Appropriations Transportation Subcommittee hearing on the FY2015 budget request for the Department of Transportation, Subcommittee Ranking Member Susan Collins (R-Maine) remarked that the proposal was controversial and stated her disapproval, adding that she did not think it was realistic to believe Congress will be able to reform the tax code this year.

On March 12, during the House Transportation and Infrastructure Committee hearing on MAP-21 implementation and the FY2015 surface transportation budget request, Rep. Peter DeFazio (D-Ore.) asked Department of Transportation Acting Under Secretary for Policy Peter Rogoff if the Administration had a backup plan other than the corporate tax reform. Rep. DeFazio rebuffed Rogoff’s answers, adding that he considers the notion that such tax reform could happen this Congress to be “illusory” and “fake.” Rogoff testified that the Department of Transportation could be unable to meet all of its obligations out of the Highway Trust Fund prior to August.

On March 11, Sens. John Boozman (R-Ark.), Pat Roberts (R-Kan.), and Jerry Moran (R-Kan.) introduced S. 2103, the General Aviation Pilot Protection Act of 2014. If enacted, the bill would require the FAA to reform its general aviation medical standards. A companion bill, H.R. 3708, was introduced in December 2013 by Rep. Todd Rokita (R-Ind.) and has 74 co-sponsors.

Tomorrow, the House Appropriations Subcommittee on Energy and Water Development will hold a hearing on Appropriations for the U.S. Army Corps of Engineers. Jo Ellen Darcy, Assistant Secretary of the Army for Civil Works, and Lt. Gen. Thomas P. Bostick, Chief of Engineers, will testify.

Also tomorrow, the House Transportation and Infrastructure Subcommittee on Coast Guard and Maritime Transportation will hold a hearing on the proposed FY2015 budget request for the U.S. Coast Guard and related marine transportation programs. Witness testimony will be provided by Admiral Robert J. Papp, Jr., Commandant, U.S. Coast Guard; Master Chief Michael P. Leavitt, Master Chief Petty Officer of the Coast Guard, U.S. Coast Guard; Paul “Chip” Jaenichen, Sr., Acting Administrator, Maritime Administration; and Mario Cordero, Chairman, Federal Maritime Commission. Written testimony and a webcast of the hearing will be available here.

The Senate Committee on Homeland Security and Governmental Affairs will hold a hearing titled “Strengthening Public-Private Partnerships to Reduce Cyber Risks to Our Nation’s Critical Infrastructure” tomorrow. Witness testimony will be provided by Phyllis A. Schneck, Ph.D, Deputy Under Secretary for Cybersecurity, National Protection and Programs Directorate, U.S. Department of Homeland Security; Donna Dodson, Chief Cybersecurity Advisor, National Institute of Standards and Technology, U.S. Department of Commerce; Stephen L. Caldwell, Director, Homeland Security and Justice Issues, U.S. Government Accountability Office; Elayne Starkey, Chief Security Officer, Delaware Department of Technology and Information; David M. Velazquez, Executive Vice President for Power Delivery, Pepco Holdings, Inc.; Doug Johnson, Vice Chairman, Financial Services Sector Coordinating Council; and Steven R. Chabinsky, Chief Risk Officer, CrowdStrike, Inc. (testifying in his personal capacity). Written testimony and a webcast of the hearing will be available here.

On Thursday, the Senate Committee on Environment and Public Works will hold a hearing titled “MAP-21 Reauthorization: State and Local Perspectives on Transportation Priorities and Funding.” Witness testimony will be provided by Michael Lewis, Secretary, Rhode Island Department of Transportation; Sue Minter, Deputy Secretary, Vermont Agency of Transportation; Greg Ballard, Mayor, City of Indianapolis; Mick Cornett, Mayor, Oklahoma City; BillFontenot, President, St. Landry's Parish, Louisiana; Jim Willox, Chairman, Converse County Commission, Wyoming; and Dave Gula, Principal Planner, Wilmington Area Planning Council, Delaware. Written testimony and a webcast of the hearing will be available here.

AT THE AGENCIES

Yesterday, the U.S. Maritime Administration announced that its second symposium to help develop a National Maritime Strategy will be held on May 6, 2014. The deadline to submit domestic maritime proposals and agenda topics for inclusion is April 25. The agenda for the symposium, which will be held as part of a meeting of the Marine Transportation System National Advisory Council, will be released on April 28.

On March 19, the FAA published its final report on the safety of the Dreamliner. The Boeing 787-8 Design, Certification, and Manufacturing Systems Review concludes that the Dreamliner “meets its intended level of safety,” and that while “design issues have occurred,” the Boeing 787-8 Critical Systems Review Team “found their cause tended to represent individual escapes in the design or manufacture of the airplane.”

The National Transportation Safety Board released a highway accident brief on the July 19, 2013 Chesapeake Bay Bridge accident.

This month, the Federal Transit Administration has announced $30 million in competitive funds to 42 Native American tribes in 19 states for projects to improve transit service. Tribes and projects receiving funding can be found here.

On March 18, Amtrak released its FY2015 budget request. The request describes Amtrak’s reorganization into three rail-related business lines: Northeast Corridor (NEC) Operations, State-Supported Services and Long Distance Services. Amtrak requests no federal operating support for the NEC for FY2015, but requests $445 million in federal capital investment. Amtrak also requests $83 million of federal operating support for state-supported services, and the totality of the $618 million of FY2015 operating costs needed for long distance services. Amtrak requested $295 million in capital investment for long distance services, including $50 million for ADA compliance at stations, $130 million for the purchase of new rolling stock to replace Heritage cars, and $115 million for overhauls to its fleet. Amtrak’s total FY2015 budget request is $1.62 billion, up from $1.39 billion last fiscal year.

On March 13, the FMCSA announced a proposed rulemaking to require interstate commercial truck and bus companies to use electronic logging devices to ensure compliance with rules that limit how many hours drivers can work.

On March 13, the FAA released its annual Aerospace Forecasts. Among many of the forecasts made, the FAA predicts that ridership on U.S. airlines will grow steadily to over 1 billion prior to 2034. Last year, U.S. airlines carried over 740 million passengers, an increase of nearly 1 percent from the year prior.

At the end of April, Deborah Hersman, Chairwoman of the NTSB, will step down to become the President and CEO of the National Safety Council. Hersman has chaired the NTSB since 2009 and joined in 2004.

IN THE STATES

California: Yesterday, the Assembly Transportation Committee rejected a bill to prohibit using federal grant money on the California High-Speed Rail project until the state has secured matching funds. The committee voted down the bill, A.B. 1501, on a vote of 8-4. While the state is required to match the $3 billion in grant money that the Federal Railroad Administration has approved for the project, the FRA has allowed California to spend federal money until it can come up with its matching funds. Raising matching funds from the sale of bonds, authorized by referendum, is currently entangled in legal challenges. On March 14, the California High-Speed Rail Authority was granted permission tobegin eminent domain proceedings against eight properties in Fresno.

Michigan: On March 18, 40 organizations, including construction and labor groups, wrote a letter to President Obama to requesting that the Administration provide Customs and Border Patrol funding for the U.S. Federal Plaza associated with the New International Trade Crossing bridge from Detroit to Windsor, Ontario.

New Hampshire: The New Hampshire Senate advanced a bill that would raise the state gasoline tax by 4.2¢, but removed a provision from the bill that would have tied future increases to the tax to inflation. The bill advanced on a 14-9 vote and was then approved by the Senate Finance Committee on a vote of 4-2. Were the House to approve the bill, the current 18¢ per gallon tax would increase to about 22¢ per gallon in July. The gasoline tax has not been raised since 1991 and is currently the lowest in New England. The proposed increase is estimated to raise about $32 million annually for road improvements. Governor Maggie Hassan has stated that she would sign a tax increase if a consensus is reached.

Texas: The Coast Guard will re-evaluate whether vessel traffic can resume along the Houston Ship Channel today. Following a spill of about 168,000 gallons of bunker fuel oil into Galveston Bay, 54 deep-draft ships are in queue to enter the channel toward Houston and 47 are waiting to leave as of this morning.

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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