Infrastructure Alert – April 25, 2012

After the House passed a new short-term transportation funding extension, which included provisions important to House Republican leaders, both chambers have signaled that they will attempt to compromise on a longer term funding bill through conference negotiations. Current federal transportation funding is set to expire at the end of June. The Department of Transportation continues to work within budget constraints to give states and municipalities more flexibility with regards to funding and permitting processes. And individual states are following suit with new and innovative funding models, such as in Virginia where a private venture company will help finance the construction of a new tunnel in exchange for the right to collect toll revenue for a set period of time.

On the Hill

Last week the House of Representatives approved the 10th extension of transportation funding since 2009. The proposed extension would extend funding from its current deadline of June 30 to September 30. Now the short-term legislation moves to the Senate where negotiations will begin in the upcoming weeks. Members of the Senate conference committee will try to reconcile the House’s bill with the Senate’s previously passed two-year transportation reauthorization legislation. Senate and House leaders could name members to their conference committees starting as soon as this week. 

One of the more controversial measures in the House’s new funding extension was the approval of the Keystone XL oil pipeline. The White House has already threatened a veto should a bill coming out of the Senate and House conference maintain the pipeline approval provision.

On Wednesday April 18, the House Water Resources and Environment Subcommittee, chaired by Congressman Gibbs (R-Ohio),held a hearing with the Army Corps of Engineers, shippers, and industry officials on the importance of preserving the reliability of the Inland Waterways System. House Republicans said they hope to attract more private investment funding to help pay for much needed maintenance to locks, dams and inland water ways. Industry witnesses gave their support to the WAVE4 Act, introduced by Congressman Whitfield (R-Ky.), which would revise the cost-sharing arrangement between the federal government and the barge industry to provide needed maintenance of waterway infrastructure.   However, the bill has been criticized for increasing the federal government’s subsidy of barge shipping transit.

This week, the House will consider four cybersecurity bills. The different pieces of legislation intend to help address urgent security needs, including promoting information sharing and protecting critical infrastructure and communications. According to the Republicans, one of the bills, the Cyber Intelligence Sharing and Protection Act (CISPA) introduced by Mike Rogers (R- Mich.), would establish an information-sharing mechanism between the intelligence community and the private sector to defend against attacks from foreign elements. On a voluntary basis, the private sector would be able to pass information on specific cyberattacks along to federal agencies with a guarantee of liability protection and freedom from proprietary and privacy concerns and agencies would be able to provide key threat information to companies to help them defend themselves. A competing Senate bill, sponsored by Senator Lieberman (I-Conn.), would instead mandate information sharing through government regulation. The Senate bill is supported by President Obama.

At the Agencies

Last week, U.S. Department of Transportation Secretary Ray LaHood announced that the agency will lead the effort to help expedite federal permitting for a 1,000 mile pipeline modernization project by NiSource, Inc. The project will modernize NiSource, Inc.’s Columbia Gas Transmission, LLC gas transmission and storage system by replacing aging infrastructure that serves communities in six states, including the Marcellus shale gas production region, where the majority of the pipeline infrastructure is more than 40 years old and running on inefficient platforms. This project will take place in Kentucky, Maryland, Ohio, Pennsylvania, Virginia and West Virginia.

On April 20, Secretary LaHood announced that rail car manufacturers across the country will have an opportunity to submit bids to produce the first American-made, standardized passenger rail cars. The $551 million request for proposals to manufacture approximately 130 new bilevel passenger rail cars in America comes from a groundbreaking multistate effort to jointly purchase standardized rail equipment to be used on Amtrak’s intercity routes in California, Illinois, Michigan, Indiana, Missouri, and potentially Iowa. The funding is being provided by the Federal Railroad Administration’s High-Speed and Intercity Passenger Rail Program.

Selected transit agencies in 175 budget constrained municipalities may now use certain Federal Transit Administration funds to cover the cost of the gas, diesel, and electric power that keeps buses, light rail, streetcars, and other transit vehicles up and running. The recipients benefiting from this spending flexibility appeared in the April 12 Federal Register. The provision, part of Congress’s fiscal year 2012 appropriations legislation, allows transit operators to use a portion of their allocated funds specifically for this purpose.

In the States

New Jersey: A report released by the Office of Legislative Services concluded that the New Jersey Transportation Trust Fund is locked in an “unsustainable pattern” of borrowing to pay for transportation projects. New Jersey is the second biggest transportation funding borrower in the country, trailing only Texas. This year marks the first time that money from gas, sales, and other taxes earmarked for transportation spending ($895 million) did not cover debt payments. By mid-2012 the New Jersey Transportation Trust Fund is projected to be $13.4 billion dollars in debt. 

New York: On April 16, Governor Andrew Cuomo announced an almost $27 million investment for NY Works projects that will allow for flood control and dam repair projects in the Southern Tier. The "New York Works" was a cornerstone of the final 2012-2013 state budget and intends to create jobs through infrastructure development. 

New York City has launched a $250 million construction project to boost economic development in New York Harbor. The project will remove existing underwater structures in the Anchorage Channel (which connects Staten Island and Brooklyn) so that the waterway can be dredged and deepened to accommodate increased cargo volumes and larger vessels in the future. The Port of New York and New Jersey is the largest on the East Coast and accounts for 40 percent of the East Coast shipping trade.

Tennessee: Tennessee Gov. Bill Haslam and the Tennessee Department of Transportation (TDOT) released a three-year transportation program featuring approximately $1.5 billion in infrastructure investments. TDOT is unique as it is only one of five state departments of transportation that do not borrow money to fund projects. The three-year program funds improvements to the interstate highway system, including the addition of truck climbing lanes, ramp enhancements and interchange reconstruction projects.

Virginia: On April 16, Governor Robert McDonnell announced that the commonwealth has obtained the necessary funding to go ahead with a public-private partnership bridge project. The Elizabeth River Crossing project includes a third tunnel built under the Elizabeth River between Norfolk and Portsmouth and upgrades to existing tunnels. The P3 is a partnership between the commonwealth and Elizabeth River Crossing, a private venture. Under the terms of the agreement, the Virginia Department of Transportation will maintain ownership of the infrastructure and the private venture will finance and build the facilities, as well as operate and maintain them for a 58-year period in exchange for the right to collect toll revenue from traffic using the tunnel. 

Upcoming Events

On Wednesday, April 25 at 12:00 p.m. the Courts, Commercial and Administrative Law Subcommittee of the House Judiciary Committee held a hearing on legislation that would overhaul the federal permitting process, including environmental assessments and environmental impact statements.

The Coast Guard and Maritime Transportation Subcommittee of the House Transportation and Infrastructure Committee will hold a hearing on Thursday, April 26 at 9 a.m. titled "Regulation of the Maritime Industry: Ensuring U.S. Job Growth While Improving Environmental and Worker Safety."

On Thursday April 26 the American Road and Transportation Builders Association will hold its National Transportation Workforce Summit in Washington, D.C.

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