Infrastructure Alert - May 1, 2013

by Cozen O'Connor

President Obama has nominated Anthony Foxx, the Mayor of Charlotte to replace Ray LaHood as Secretary of Transportation.  Mayor Foxx oversaw several large transportation projects during his tenure as mayor, including the construction of a new runway at Charlotte Douglas International Airport, an expansion of the city’s streetcar system and the creation of the Charlotte Regional Intermodal Facility. 

On the Hill

Both the House and the Senate passed S. 853, the Reducing Flight Delays Act of 2013, a bill that directs the FAA to move $253 million from the Airport Improvement Program account to pay for air traffic controller salaries.  The FAA reported hundreds of slowdowns and delayed flights last week due to the furloughs. Under budget sequestration, 15,000 air traffic controllers were furloughed, but this reallocation of funds will allow the furloughs to end at least until October 1. While the bill does not specifically require the funding be used to end the furloughs, the money is expected to be used for at least that purpose.  Overall, the FAA budget will be required to cut the same amount under sequestration, but those cuts have merely been reapportioned. In an infrequent act of speedy legislating, the bill was introduced and passed by unanimous consent in the Senate on April 25, and was passed in the House on a 361-41 vote on April 26.  (The President would have already signed the bill, but the Senate had to pass the bill again due to a typo.)

The bill does not address specifically, however, the future of the funding for the 149 air traffic control towers that the FAA has identified will lose federal funding June 15.  After alleviating the furloughs, the remainder of the $253 million reallocated by the bill, about $21 million, would be enough to continue to fund the towers, but the FAA has not made its intentions clear. 

The House Committee on Transportation and Infrastructure’s Panel on 21st Century Freight held its first hearing on April 24. The Panel on 21st Century Freight, created by Transportation and Infrastructure Chairman Bill Shuster (R-PA), will hold several hearings over the next six months, create a national intermodal freight plan, and recommend legislation to the full committee. Shuster has named six House members to the panel: Rep. John Duncan, Jr. (R-Tenn.), who leads the panel, Rep. Gary Miller (R-Calif.), Rep. Rick Crawford (R-Ark.), Rep. Richard Hanna (R-N.Y.), Rep. Daniel Webster (R-Fla.) and Rep. Markwayne Mullin (R-Okla.). Transportation and Infrastructure Ranking Member Nick Rahall II (D-W.V.) named Jerold Nadler (D-N.Y.) as the lead Democrat for the panel, and appointed Rep. Corrine Brown (D-Fla.), Rep. Daniel Lipinski (D-Ill.), Rep. Albio Sires (D-N.J.), and Rep. Janice Hahn (D-Calif.) as well. In the hearing, Rep. Duncan stressed that the panel will focus on the “multi-modal nature of freight movement,” and seek to relieve the bottlenecks in moving goods across ocean vessels, highways, railroads, air carriers, inland waterways, ports and pipelines.

Rep. Darrell Issa (R-Calif.) and Rep. Zoe Lofgren (D-Calif.) introduced H.R. 1663, the Promoting Automotive Repair, Trade and Sales (PARTS) Act of 2013. The PARTS Act would reduce the exclusivity period that automobile companies currently have on replacement parts for their models from 14 years to 2 ½ years. The bill would allow parts manufacturers other than the original equipment manufacturer to build replacement parts in an effort to increase competition and innovation and decrease price.

A cloture vote has been scheduled for S. 601, the Water Resources Development Act (WRDA) of 2013, on May 6. The U.S. Chamber of Commerce and 169 signees have written a letter of support of the WRDA reauthorization bill. 

Rep. Shuster and Rep. Issa, Chairman of the House Oversight Committee, have requested the Department of Transportation and the FAA provide specificity in their implementation of budget sequestration. Sen. John Rockefeller (D-W.V.), Chairman of the Committee on Commerce, Science, and Transportation, and Sen. John Thune (R-S.D.), Ranking Member of the Committee on Commerce, Science, and Transportation, also requested more specific information on the implementation of budget cuts to the FAA.

At the Agencies

The FAA has formally approved the lithium-ion battery system upgrades to the Boeing 787 Dreamliner.  The upgrades are estimated to cost about $500,000 per plane and take about five days for installation. Ten of the 50 Dreamliners in current operation are presently having the improvements installed. Internationally, however, the Boeing 787 has officially returned to commercial flight, as a Dreamliner departed from Ethiopia this weekend.

The Department of Transportation has released its Notice of Funding Ability for National Infrastructure Investments, although the Department of Transportation is continuing to refer to them as TIGER Discretionary Grants. The continuing resolution passed at the end of March appropriates $473 million in TIGER grants for FY 2013. TIGER grant applications are due June 3.

In the States

New York: On April 24, The Port Authority of New York and New Jersey approved contracts totaling $3 billion of work on the Bayonne Bridge, Goethals Bridge and Outerbridge Crossing.  The Bayonne Bridge needs to be raised to accommodate ships from the expanded Panama Canal. The Goethals Bridge will be entirely reconstructed. Both the Bayonne Bridge and the Goethals Bridge will have pedestrian walkways added. Construction for all three projects is expected to begin by the end of 2013.

Louisiana: Mitch Landrieu, Mayor of New Orleans, announced new $650 million terminal will be created at Louis Armstrong New Orleans National Airport. The terminal is expected to begin construction in early 2014 and open in May 2018.

Virginia & Maryland: Under the transportation plans passed this year under both Maryland Governor Martin O’Malley and Virginia Governor Bob McDonnell, state gasoline taxes for each states are linked to federal action on Internet sales taxes. Both transportation bills that passed this year assume a certain amount of revenue that can be collected in sales tax from out-of-state, online retailers, and if Congress doesn’t pass a bill that permits states to collect Internet sales taxes by the end of 2015, then gasoline taxes are automatically increased. Currently, the Senate is considering S. 743, the Marketplace Fairness Act of 2013. On April 25, the Senate voted to end debate on the bill 63-30, which sets up a final (simple majority) vote on May 6. President Obama supports the bill, but it may face opposition from Republicans in the House if they consider it a tax increase.

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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