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Environmental Changes in New Transportation Bill a Win for Industry

BY SHERYL JACKSON

MORE THAN TWO YEARS AFTER THE expiration of the previous federal transportation law, SAFETEA-LU, the $105 billion “Moving Ahead for Progress in the 21st Century” (MAP-21) bill was signed into law in July 2012. The law provides up to $39.7 billion in FY2013 and $40.25 billion in FY 2014 to fund the federal-aid highway program and it also increases funding for, and expands, the Transportation Infrastructure Finance & Innovation Act (TIFIA) program. AGC leaders, chapters and members played a vital role in getting MAP-21 passed.

The two-year guarantee of funding for the highway program is important to the construction industry, points out Paul Diederich, president of West Fargo, ND-based Industrial Builders and senior vice president of the Associated General Contractors of America (AGC). The short-term funding extensions of the previous transportation bill put pressure on state departments of transportation (DOT) as well as contractors because it was impossible to plan for the future. “The two-year plan is good, but we need to start working now on a bill that will fund a six-year period next time,” he suggests. “This is the only way transportation people can plan effectively and contractors can have the right people and equipment to handle the jobs.”

Even though the duration of the law is only for 27 months, as opposed to fi ve or six year authorizations of the past, there are a number of important reforms included in the law, points out Sean O’Neill, director, congressional relations for infrastructure advancement for AGC. “There are signifi cant environmental review reforms including the encouragement of early coordination between federal agencies and the establishment of deadlines in
the project approval process. These reforms, along with others in the authorization, will decrease the amount of time between the decisions to move forward with a project to completion of construction.”

Avoiding construction delays by removing redundant and repetitive regulations represents a financial as well as a time savings, says Leah F. Pilconis, senior environmental advisor to AGC. “Reports show that delays increase the cost of a project because labor and materials’ costs increase during the delay,” she says. AGC reports that,  assuming materials represent 60 percent of total costs and labor 40 percent, total construction costs for a five-year delay can increase by 22 percent, and a 10-year delay can result in an increase of 48 percent.

Specific streamlining environmental provisions that will reduce the regulatory burden and accelerate project delivery include the expansion of the number and type of projects that can be excluded from the federal environmental review process required under the National Environmental Policy Act (NEPA), and the limitation
of review requirements for projects that are less than $5 million or where federal funds are less than 15 percent of a project costing more than $30 million. There are expedited procedures for projects with minimal environmental impact, and the purchase of right-of-way and design of projects can begin prior to final environmental clearance under NEPA. “These provisions apply only to the federal environmental reviews but they will result in
significant time and cost savings for DOTs,” says Pilconis.

Another key environmental provision is the requirement that states set aside 25 percent of Construction Mitigation and Air Quality Improvement funds for projects that occur in areas that are in non-attainment for
fine particulate matter (PM2.5). “The bill identifies the diesel retrofit of construction equipment operating in the area as a legitimate use of funds,” says Pilconis. “This is important for contractors with older equipment.” The expensive retrofitting  to reduce emissions is not feasible for many contractors but this provision may enable
them to work in new areas because monies are available for the retrofi t.

One environmental concern that was not addressed in MAP-21 is fl y ash, also known as coal ash. While AGC strongly supported an amendment barring the U.S. Environmental Protection Agency (EPA) from regulating coal ash as hazardous waste, the provision was excluded from the final bill. Whether or not the beneficial use of fly ash in pavement construction will be declared a hazardous waste is an important issue, not only for new construction,
but also for guidelines related to handling old pavement as it is broken up for repair and reconstruction projects.
The EPA plans to announce the new rule regarding coal ash by the end of 2012.

Dropping the fly ash provision was a strategic compromise, points out Tom Brown, president of Sierra West Pacifi c in San Diego, Calif. and the chair of AGC’s Highway and Transportation Division. “We could not let that provision become a hurdle to passing the bill,” he explains. “We gave up the provision but kept it on our radar so we can continue to address it outside the transportation reauthorization law.”

A few other highlights of MAP-21 include:
 Allows states to use Construction Management General Contracting (CMGC). CMGC uses a two-step procurement process where the CM/GC is selected using price and best value.
 Creates incentives for states to use innovative contracting practices and use of new technologies.
 Calls for the use of positive barriers where workers are exposed to high-volume, high-speed traffi c and calls for unit price bidding in most cases.

“The work zone safety provision is important for our members,” says Jeffrey D. Shoaf, senior executive director of government affairs for AGC. “A survey of our members showed that over 65 percent have had a vehicle crash into their work zones in the past year,” he says. Requiring a more secure structure to protect workers on a long-term project or a project that is adjacent to a road with active, high-speed traffi c will benefi t AGC members and their employees, he adds.

“MAP-21 gives states more flexibility to use their funds which will create more efficiency and cost savings,” says Shoaf. This will give the federal transportation program more credibility among taxpayers because there is
an effort to use money more wisely. “This will help us as we work on development of ways to increase funding the
transportation program at the federal, state and local levels.”

Grassroots support may be a key strategy for future transportation funding bills, says Diederich. “Raising public
awareness of the importance of our infrastructure will make it easier to gain support for funding.”

AGC members were an important part of the efforts to educate legislators and lobby for support of the  reauthorization bill, says O’Neill. “Our members visited their representatives in their home states and directly lobbied legislators in Washington D.C.,” he says. “They did an excellent job communicating AGC priorities and explaining the impact of congressional inaction on the construction industry.”

While industry members should be pleased that funding for highway projects is in place for the next two years, this is not a time to rest, says Brown. “It is extremely important for AGC members not to lose focus on what happens next,” he emphasizes. “We need to start now to plan for the bill we want to pass in two years.”

A key part of the next effort is to evaluate different ways to fund the federal transportation program, says Shoaf. Whether funding is related to gasoline tax, license fees, toll roads, or a pay-as-you-go program that collects money from drivers based upon their use of roads, it is critical to fi nd a way to ensure funding for the future. “Our focus has to be on a way to sustain the Highway Trust Fund and help our members and chapters raise funds at the state and local levels.”