Infrastructure Insights: Issue #7

by Buchanan Ingersoll & Rooney PC

Buchanan Ingersoll & Rooney PC

In this issue:

  • Deadline Looms for FAA Reauthorization
  • FERC Regains Quorum, Begins to Tackle Project Backlog
  • Florida, Pennsylvania to Invest in Emissions Cuts with Millions from Volkswagen Settlement
  • PA to Begin Testing Usage-Based Tax for Drivers

Deadline Looms for FAA Reauthorization

Both the Senate and the House pushed taking action on their conflicting Federal Aviation Administration reauthorization bills until after lawmakers returned from Labor Day, leaving very little time for a final version to be approved before the September 30 deadline.

“Lawmakers simply haven’t left themselves with enough time to hash out the details of a final bill before the reauthorization deadline. A short-term extension is almost inevitable at this point,” said Terry Heubert, Principal at Buchanan.

“A short-term patch will keep the funding in place, but won’t address the crucial proposed changes that would significantly impact the aviation and airline industries. Privatizing the ATC is the obvious big issue on the House side,” Heubert continued. “But they are divided on how to treat general aviation and many other issues, including prospective commercial pilot training hours and course eligibility. There are a lot of issues to debate for a full reauthorization bill to gain traction.”

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FERC Regains Quorum, Begins to Tackle Project Backlog

With the confirmation of Neil Chatterjee and Rob Powelson as members, the Federal Energy Regulatory Commission has returned a quorum to its board. The commission was without the three board members required to conduct business for half a year, resulting in more than 30 natural pipeline projects in various states of incompletion.

“With the FERC finally given new life, Rob Powelson’s promotion to this important position creates a unique opportunity for his home state and the Pennsylvania Public Utility Commission,” said Ed Hild, Principal at Buchanan.

“We’re thrilled that the FERC is back in business,” said Pam Witmer of PennEast Pipeline. “After months of uncertainty and no clear direction forward, it’s so exciting to get these crucial infrastructure projects back up and running.”

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Florida, Pennsylvania to Invest in Emissions Cuts with Millions from Volkswagen Settlement

After Volkswagen skirted emission laws and testing by installing “defeat devices” on more than half a million diesel cars, the company settled claims it violated the Clean Air Act. The $15 billion agreement, part of a series of state and federal settlements, includes nearly $3 billion to states for programs to reduce emissions to counteract the effect of the pollution from the VW vehicles.

According to the settlement, funds may be used to pay some or all of the cost to repower or replace eligible diesel-powered vehicles with new diesel, alternative fuel or for replacements with all-electric engines or vehicles. Both private and government-owned fleets will be eligible to receive funding, which requires that the old vehicles and/or diesel engines be scrapped.

Pennsylvania has been allocated more than $118 million under the settlement. The state published a draft plan and held a webinar before accepting public comments on the plan this summer. The largest portion of funding, between 35 percent and 55 percent, will go to Non-road/Off-road Fleet Projects.

Florida is slated to receive more than $166 million. The state Department of Environmental Protection will submit a Mitigation plan within 90 days of being designated a beneficiary.

The terms of these funds as laid out by the EPA also allow for private companies to apply to their states for grants to modernize their fleets with electric vehicles. State governments can pay for up to 75% of the cost of a new all-electric replacement vehicle for non-government-owned fleets and 100% of the cost of new all-electric school bus replacements in private fleets contracted with public school districts.

“There is a tremendous opportunity for private fleet companies with government contracts to modernize their vehicles at a great savings or at no cost in the case of school bus companies,” said Marnie George, member of Buchanan’s Florida government relations team. “Private companies should look to take advantage of these funds where possible, as it has the potential to provide the short-term savings as well as substantial long-term savings.”

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PA to Begin Testing Usage-Based Tax for Drivers

Pennsylvania transportation officials are teaming up with their counterparts in Delaware to test an updated system for taxing drivers on the road. The test will analyze a use-tax structure in which drivers are taxed for each mile they drive.

“For transportation companies with mid- to large-sized electric or hybrid vehicle fleets, a change in taxes could have a significant impact,” said Buchanan’s Matt Fine. “Companies that have made the switch to more fuel-efficient vehicles have been realizing savings on fuel for some time. A change in policy could drastically impact the amount they are able to save in this regard. We will be watching closely to see what this small-scale test will reveal.”

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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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