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DCA Insights

DCA Insights

February 2017

Monday, February 6, 2017

Analysis of Trump’s infrastructure plan 
President Donald Trump has been touting his proposed $1 trillion, 10-year program to fix America’s dilapidated infrastructure since being on the campaign trail, and the states have already compiled a list of critical projects they claim are ready to go. The American Society of Civil Engineers (ASCE), which provides a semi-annual “Report Card” of American infrastructure, estimates that fixing all the roads, bridges, transit, rail, drinking water and wastewater infrastructure and energy systems, combined with all other infrastructure categories, would take $3.6 trillion to get the job done by 2020. ASCE gives American infrastructure a whopping D-plus overall. Will the Trump administration provide the political will to actually begin making a difference? Rebuilding infrastructure is always politically popular until policymakers get into the always touchy subject of how to pay for it.

    Groups representing all areas of construction generally believe that if you’re addressing a multi-trillion-dollar problem, financing is likely needed from both the public and private sector. However, considering using government revenue (i.e. taxes) to finance infrastructure projects, President Trump steers away when asked about it. Instead, Trump has proposed a range of tax credits for infrastructure, maintaining the money lost to the Treasury through the tax credits would be made up by increased personal income taxes paid by workers hired to do the work and by business taxes paid by the construction companies that hire them.

    Trump and his team have also shown a strong preference for drawing in money from the private sector through “public-private partnerships” (P3s). Under the P3 model, firms bid on a project, build and in some cases, maintain it for a set amount of time and recover costs through tolls, user fees and/or state payments. Trump has indicated he thinks it’s cheaper and quicker when private investors are in charge, as opposed to the federal government. With infrastructure needs as high as they are with no end in sight, however, funding will have to come from multiple sources.

    For example, Trump has floated the idea of providing $137 billion in federal tax credits to companies that finance transportation projects, which he believes would unlock $1 trillion in investment over 10 years. Incoming Transportation Secretary Elaine Chao said at her confirmation hearing that the administration may also consider some direct federal spending on transportation. Still, even if Trump’s infrastructure package includes some public funding for infrastructure, the new administration is likely to rely heavily on private financing for a wide range of infrastructure improvements — especially since that funding mechanism is far more likely to garner the support of Republicans, who control both sides of Capitol Hill. The Trump plan is also expected to provide increased flexibility to the states by streamlining permits and approvals, another popular concept in the Republican-controlled Congress.

    Pipeline permitting reform back in play 

Rep. Mike Pompeo (R-Kansas), the lead sponsor of the Natural Gas Pipeline Permitting Reform Act in the last Congress, is departing Capitol Hill to become director of the Central Intelligence Agency, pending Senate confirmation. Because Rep. Pompeo was joined by dozens of Republicans in supporting the legislation, the effort to expedite permits for natural gas projects will continue early in the 115th Congress. Pipeline permitting reform has been a DCA priority since establishing its Washington ground game in 2012.

    The Pompeo bill would have forced the Federal Energy Regulatory Commission (FERC) to approve or deny a natural gas pipeline project within one year of receiving a complete application. While FERC is not considered to be the main problem, the process can currently take far longer than that to approve projects. Permitting legislation passed in the House with lock-step Republican support and 14 Democrats at the beginning of the 114th Congress, but quickly prompted a White House veto threat and didn’t fare well in the Senate.

    Sen. Lisa Murkowski (R-Alaska), chair of the Senate Energy and Natural Resources Committee, recently voiced interest in taking another stab in the new Congress at comprehensive energy legislation. Last year’s energy bill included permitting reform language but ultimately petered out in the final days of the 114th Congress. Pro-pipeline House members believe that reform initiatives could surface in the near future. “I certainly see the streamlining of the permitting process as germane to that, so I think you’re going to see that on the table,” said Rep. Bill Johnson (R-Ohio), a member of the House Energy and Commerce Committee, which has jurisdiction over pipelines.

    House Passes Regulatory Overhaul Measure

Already in the 115th Congress the House passed legislation including provisions from six previous bills that would make sweeping changes to the way federal agencies develop regulations. The Regulatory Accountability Act (RAA), passed on Jan. 11 on a generally party-line vote of 238-183. The bill, which failed in the last Congress, was initially designed to require more analysis and allow for more public scrutiny to “high-impact” regulations (i.e. those that carry an annual cost of $1 billion or more). The new RAA bill, however, includes provisions taken from previous bills, including a provision that would repeal the “Chevron doctrine”, requiring courts to defer to agency interpretations of ambiguous statutes.

    “Our courts will no longer be rubber stamps for runaway regulatory interpretations,” said Rep. Bob Goodlatte (R-Va.), lead sponsor of the legislation. “For eight long years, the constant stream of regulations being pumped out by the Obama administration has taken a big toll.”

    The RAA (HR 5) now joins the Midnight Rule Relief Act (HR 21) and the Regulations from the Executive In Need of Scrutiny (REINS) Act (HR 26) on their way to the Senate. All three bills passed easily in the House in previous sessions of Congress, only to suffer a slow and painful death in the Senate. Although President Obama threatened to veto all three bills in the past, Republicans are now optimistic that President Donald Trump will sign them once in office. It’s important to note that these measures must get through the Senate first, which is no small challenge for any of these bills.

    House energy workforce bill expected early in 115th Congress 

An energy jobs bill previously dropped from consideration on the House floor is expected to pass later this month. Sponsored by Rep. Bobby Rush (D-Ill.), the bill (HR 338) aims to increase education and training for energy and manufacturing-related fields. While the legislation would not authorize additional funding, it does direct the Department of Energy (DOE) to prioritize education and training for jobs in the energy and manufacturing sectors and create a clearinghouse for information and guidance related to workforce development.

    DOE would be required to work with industry, educational institutions, and other government agencies to identify areas with workforce challenges and develop guidelines regarding the skills necessary to fill those gaps. Consideration would expand across the energy sector including pipeline, utilities, fossil fuels, manufacturing and chemicals. The department would have to use its programs and laboratories to pursue those goals and produce a progress report to Congress within five years.

    DOE would have to consider increasing outreach to institutions that serve minority populations and other means to increase underrepresented groups’ involvement in the energy and manufacturing sectors, as well as consider targeting for displaced and unemployed energy and manufacturing workers. DCA has supported similar legislation in the last Congress, and will continue to support legislative initiatives intended to address the challenges facing today’s energy and manufacturing workforce, especially those supporting organizations like DCA’s Underground Construction Workforce Alliance.

    PHMSA Technology/Damage Prevention Study expected in June of 2017 

As previously reported, the Protecting our Infrastructure of Pipelines and Enhancing Safety (PIPES) Act of 2016, which passed last June, includes a mandate for the Department of Transportation’s (DOT) Pipeline and Hazardous Materials Safety Administration’s (PHMSA) to conduct a study “on improving existing damage prevention programs through technological improvements in location, mapping, excavation, and communications practices to prevent excavation damage to a pipe or its coating, including considerations of technical, operational, and economic feasibility and existing damage prevention programs.”

    Soon after passage of the PIPES Act, PHMSA reached out to the Common Ground Alliance (CGA) soliciting its participating in the study. In a statement, PHMSA said it encouraged CGA, “to the extent possible, to provide recommendations that include the consideration of technical, operational, and economic feasibility, on how to incorporate into existing damage prevention programs technological improvements and practices that help prevent excavation damage, per the Congressional requirement.”

    In return, CGA’s Technology Committee formed five task teams to solicit and evaluate technologies and processes to be considered in PHMSA’s damage prevention study, including:

- Identification of methods to improve existing damage prevention programs through location and mapping practices or technologies in an effort to reduce releases caused by excavation;

- Analysis of how increased use of global positioning system digital mapping technologies, predictive analytic tools, public awareness initiatives including onecall initiatives, the use of mobile devices, and other advanced technologies could supplement existing one-call notification and damage prevention programs to reduce the frequency and severity of incidents caused by excavation damage;

- Identification of any methods to improve excavation practices or technologies in an effort to reduce pipeline damage;

- Analysis of the feasibility of a national data repository for pipeline excavation accident data that creates standardized data models for storing and sharing pipeline accident information; and

- Identification of opportunities for stakeholder engagement in preventing excavation damage.

     Several DCA members submitted information on all five study areas, and PHMSA was provided an updated package of information regarding DCA’s position on cross bore mitigation, which strongly encourages policy that requires full participation in the one-call process on the part of municipal governments. Municipal entities commonly own and/or operate public water and sewer systems, and should be required to belong to their respective one-call centers and respond to locate requests accordingly.

    DCA thanks all association members who participated in the CGA response to PHMSA’s request for information, and will provide copies of the final study report when it is released in Spring of this year.

 

Eben M. Wyman

eben@wymanassociates.net  


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