Category: Infrastructure

House Democrats to Introduce Infrastructure Proposal

Posted on by Trey Jackson

Infrastructure public transit bridge outside Denver CO

A proposal to improve the nation’s infrastructure and surface transportation will be unveiled by House Democratic leaders next week – as the House Ways and Means Committee considers how to pay for it during a Jan. 29 hearing on “Paving the Way for Funding and Financing Infrastructure Investments.” (Deloitte Tax News & Views, Jan. 17)

  • Ways and Means Committee (W&M) Chairman Richard Neal (D-MA) and Transportation and Infrastructure Committee (T&I)  Chairman Peter DeFazio (D-OR) will be tasked with considering how to offset the costs of a national infrastructure improvement effort and surface transportation bill.  (BGov, Jan. 23)
  • The Ways and Means Committee hearing will explore potential funding options, including raising the gasoline tax; expanding tax-exempt bonds; establishing a vehicle-miles traveled tax; and greater use of public-private partnerships (PPPs).  The Congressional Budget Office reported this week that PPPs have accounted for only 1 to 3 percent of spending for highway, transit, and water infrastructure since 1990.
  • The Roundtable submitted extensive comments on infrastructure policy to both committees last year.  (March 20, 2019 W&M comments; April 29, 2019 T&I comments.)
  • The nation’s largest financing source for roads, bridges, tunnels, and mass transit – the federal Highway Trust Fund (HTF) – expires on Sept. 30, the end of the government’s 2020 fiscal year. 
  • With HTF reauthorization considered a “must do” legislative priority during this election year, a transportation funding bill will likely become part of the broader infrastructure proposal, which could total $1 trillion or more.
  • The Roundtable and more than 150 national trade associations also wrote to Senate Majority Leader Mitch McConnell (R-KY) and Senate Minority Leader Chuck Schumer (D-NY), on Sept. 30 to reauthorize the HTF before its scheduled expiration. (Roundtable Weekly, Oct. 4)  Chairman DeFazio said his possible funding sources could incorporate federal gas tax revenues and a bonding proposal. (BGov, Jan. 17)
  • In the Senate, four committees will play a role in crafting a long-term HTF package.  Last summer, the Senate Environment and Public Works (EPW) Committee unanimously advanced a bill (S. 2302) that would authorize $287 billion over five years to repair and maintain the nation’s surface transportation. (EPW Committee news release, July 30)
  • Senate Majority Leader Mitch McConnell (R-KY) recently discussed with GOP committee leaders possible transportation and infrastructure agendas that could be advanced after the impeachment trial ends.
  • Additionally, the Trump Administration on Jan. 9 proposed changes to federal environmental review requirements to speed major infrastructure projects such as highways, airports, tunnels and pipelines. (Roundtable Weekly, Jan. 10)
  • The proposal by the White House’s Council on Environmental Quality (CEQ) to streamline the infrastructure approval process complements the similar, bipartisan efforts in the Senate to speed-up delivery for infrastructure projects. (Roundtable Weekly, Aug. 2)

Federal infrastructure efforts, and their vital importance to commercial real estate, are a focus of The Roundtable’s 2020 Policy Agenda, which will be discussed at the organization’s State of the Industry Meeting on January 28-29 in Washington.

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Trump Administration Proposes Changes to Environmental Reviews to Speed Federal Infrastructure Projects

Posted on by Trey Jackson

Trump Infra Regs Conference x475

The Trump Administration – in a continuing effort to streamline government approvals of major infrastructure projects such as highways, airports, tunnels and pipelines – yesterday proposed the most significant changes in over four decades to federal-level environmental review requirements.  (Watch White House news conference video) . 

  • The proposal by the White House’s Council on Environmental Quality (CEQ) would affect implementation of the National Environmental Policy Act (NEPA).  Comments on the proposal are due by March 10, 2020.
  • ”[W]e want to build new roads, bridges, tunnels, highways bigger, better, faster, and we want to build them at less cost.  That is why, for the first time in over 40 years, we are issuing a proposed new rule … completely overhaul the dysfunctional bureaucratic system that has created these massive obstructions,” President Trump said yesterday at a news conference unveiling the proposal.
  • He added, “In the past, many of America’s most critical infrastructure projects have been tied up and bogged down by an outrageously slow and burdensome federal approval process. The builders are not happy.  Nobody is happy.  These endless delays waste money, keep projects from breaking ground, and deny jobs to our nation’s incredible workers.”  (White House remarks, Jan. 9)
  • According to CEQ, U.S. federal agencies prepare approximately 170 Environmental Impact Statement per year, which average 600 pages in length and take 4.5 years to conclude.  (Reuters, Jan. 9)
  • White House Council on Environmental Quality Chairwoman ,Mary Neumayr, stated at yesterday’s event, “It’s important to note that the proposal would reform the process of gathering information on environmental effects, but would not change any substantive environmental law or regulation, such as the Clean Air Act, the Clean Water Act, and the Endangered Species Act.”
  • Transportation Secretary Elaine Chao also noted during the news conference, “We all care about the environment.  What we are talking about are cumbersome, unnecessary, overly burdensome, duplicative, and outdated regulations.  Many of these regulations have not been updated, modernized, in decades.  What we’re seeking is commonsense solutions.” (White House remarks, Jan. 9)
  • The Administration’s proposal to streamline the infrastructure approval process complements similar, bipartisan efforts passed by the Senate Public Works Committee in July to speed-up delivery for infrastructure projects.  (Roundtable Weekly, Aug. 2, 2019)
  • Secretary Chao has addressed the need to streamline the government approval process affecting infrastructure projects for years, including at The Roundtable’s Spring 2017 Meeting in Washington, DC.
  • The Roundtable has been a long-standing advocate of increased national infrastructure investment to benefit the economy, job creation and local communities.  In June 2017, Roundtable President and CEO Jeffrey D. DeBoer addressed the infrastructure permitting issue on CNBC’s Squawk Box.  “We need to streamline and make a lot more efficient the permitting process in a lot of these infrastructure projects.  That’s something the President wants to do and it’s hard to argue against it.”  DeBoer added, “Permitting is a key part of lowering the costs, lowering the timeframe and reducing the amount of money that is needed for these projects.”  (DeBoer on Squawk Box) 

It is unlikely that the Administration’s proposal will be finalized before the 2020 general election so that federal agencies can begin applying the updated review criteria.  A core issue regarding the proposed changes is whether the government must incorporate climate change concerns as it analyzes an infrastructure project for approval. 

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The Roundtable and Trade Associations Urge Congress to Pass Transportation Reauthorization before Sept. 2020 Expiration

Posted on by Trey Jackson

 

HIghway Infrastructure Houston

The Real Estate Roundtable and more than 150 national trade associations urged Congress this week to reauthorize the Highway Trust Fund – the nation’s primary source for road and mass transit funds – ahead of its September 30, 2020 expiration.  (Coalition letter, Sept. 30)

  • The coalition, led by the National Association of Manufacturers and the Associated General Contractors, wrote to Senate Majority Leader Mitch McConnell (R-KY) and Senate Minority Leader Chuck Schumer (D-NY) on Monday supporting a long-term, robustly-funded surface transportation reauthorization bill.  (NAM news release, Sept. 30)
  • The Infrastructure Working Group’s letter notes the unanimous passage in July of S. 2302, America’s Transportation Infrastructure Act of 2019, by the Senate Environment and Public Works (EPW) Committee.  S. 2302 would authorize $287 billion over five years to repair and maintain the nation’s surface transportation.  (Roundtable Weekly, Aug. 2)
  • EPW’s bipartisan approval of S. 2302 may provide momentum for the full Senate to consider a package that addresses recommendations in the coalition’s letter, including:
    • Significantly increasing direct federal investments in infrastructure;
    • Fixing chronic challenges and recurring shortages in key federal infrastructure accounts such as the Highway Trust Fund;
    • Complementing and strengthening financing tools, such as municipal bonds, that successfully deliver infrastructure investments at the federal, state and local levels;
    • ‘Facilitating opportunities for private investment in U.S. infrastructure; and
    • Creating efficiencies in the federal permitting process, while continuing to provide environmental protections.
  • In related news, last week the Senate Appropriations Committee advanced a bill (31-0) to allocate federal dollars to fund the agencies responsible for transportation, housing assistance, and community development.  (Appropriations Committee news release, Sept. 19).  The spending bill – covering federal FY 2020, which started on Oct. 1 – supports the Gateway Program, a proposed $30 billion modernization of Amtrak’s Northeast Corridor connecting New Jersey and New York City.  Gateway would double rail capacity for the biggest train traffic bottleneck on the East Coast. (Senate Appropriations Markup, Sept. 26, and BGov, Sept. 24)

The Roundtable continues to provide infrastructure policy recommendations to Congress.  (Roundtable Weekly, May 3, 2019, and March 22, 2019).  Additionally, Roundtable President and CEO Jeffrey D. DeBoer discussed the role of public-private partnerships in modernizing the nation’s infrastructure on CNBC’s Squawk Box in June 2017.

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House Passes FAA Reauthorization, Including Roundtable-Backed “One Engine Inoperative” Language Regarding Allowable Building Height

Posted on by Trey Jackson

Legislative language that could affect the allowable heights of buildings near airports passed the House today (393-13) as part of a bill ( H.R. 4 ) extending authorization of the Federal Aviation Administration (FAA) for five years. 

The so-called One Engine Inoperative (OEI) language included in the House-passed FAA bill addresses an Obama-era proposal that could affect land development and property values near U.S. airports.  The  proposed 2014 policy change would alter decades-old standards by compelling the FAA to consider whether a building or other structure poses a hazard to navigable airspace if a plane engine fails on takeoff.   

The FAA’s current funding and revenues are set to expire this September 30.  With the House’s passage of FAA reauthorization today, the Senate is expected to follow suit and aims to have long-term reauthorization in place by August. ( Roll Call , April 16 and CNN , April 27) 

The so-called One Engine Inoperative (OEI) language included in the House-passed FAA bill addresses an Obama-era proposal that could affect land development and property values near U.S. airports.  The proposed 2014 policy change would alter decades-old standards by compelling the FAA to consider whether a building or other structure poses a hazard to navigable airspace if a plane engine fails on takeoff.    

According to a study of the issue, approximately 4,000 buildings near 380 airports throughout the U.S. could become “non-conforming” if such OEI policies were ever to take effect.  The proposed standards would modify take-off and landing flight paths in a manner that restricts allowable building heights and development potential in growth centers and transportation hubs surrounding the nation’s airports.   

When the FAA proposed the policy change, it explained it was not due to any public safety concerns but rather to allow airlines to carry more passenger and freight cargo.  [See technical comment letter submitted July 2014 by The Roundtable and coalition partners]. 

The language passed by the House would require that any changes to current OEI policies must first go through a full public rulemaking process.  Additionally, the White House Office of Management and Budget would be compelled to conduct a full cost-benefit analysis of any such FAA action.  

The Roundtable, the National Association of Real Estate Investment Trusts (NAREIT), and other real estate trade groups have long urged Congress to include the OEI rulemaking and cost-benefit language in any FAA reauthorization bill. (Roundtable Weekly, Feb. 12, 2016).  

The Roundtable will continue to monitor the Senate’s actions on FAA reauthorization and urge inclusion of similar provisions as the legislation now moves to the other side of Capitol Hill.

President Trump and Democratic Leaders Aim for $2 Trillion Infrastructure Package; Roundtable Recommends Policies to House Transportation Committee

Posted on by Trey Jackson

President Donald Trump and Democratic congressional leaders on Tuesday agreed to pursue a $2 trillion infrastructure package and meet again in three weeks to discuss possible revenue sources.

The Roundtable on April 29 submitted  infrastructure policy recommendations to House Committee on Transportation and Infrastructure Chairman Peter DeFazio (D-OR) and Ranking Member Sam Graves (R-MO).  

  • House Speaker Nancy Pelosi (D-CA) said after the White House meeting, “We did come to one agreement: that the agreement would be big and bold.”   Senate Minority Leader Chuck Schumer (D-NY) added,  “… now it’s up to the president and the White House to tell us how they pay for it.” (Associated Press, April 30)
  • Schumer stated in his Dec. 6, 2018 letter to the president there would be no deal on infrastructure without addressing climate change.  Schumer wrote that one of the policies that should be included in any infrastructure package should, “Provide permanent tax incentives for domestic production of clean electricity and storage, energy efficient homes and commercial buildings …” (Schumer’s letter to President Trump and  Washington Post op-ed).
  • House Committee on Transportation and Infrastructure Chairman Peter DeFazio (D-OR) also attended the April 30 White House meeting.  DeFazio’s committee held a Member’s Day hearing on the next day to share their infrastructure priorities. “While I continue to press my colleagues on the Committee on Ways & Means, House Leadership, the Senate, and the White House on a path forward on funding, this Committee must do its legislative work,” DeFazio stated in his opening remarks.
  • The Roundtable on April 29 submitted infrastructure policy recommendations to DeFazio and Ranking Member Sam Graves (R-MO).  Roundtable President and CEO Jeffrey DeBoer states in the letter, “We offer policy suggestions within your Committee’s jurisdiction to improve programs to repair and modernize the transportation and other systems upon which the U.S. economy depends.  We also suggest targeted changes to the federal tax code, requiring coordination with the Ways and Means Committee, to help pay for our nation’s infrastructure deficit.”  (Roundtable Infrastructure Policies letter, April 29)
  • DeBoer emphasized the goal of the policies is to offer “a holistic approach to modernize our aging infrastructure [that] will create American jobs, boost economic growth, address climate threats, and improve the quality of life in all regions of the country.” 

    The Roundtable’s key suggestion to help pay for infrastructure is to repeal the Foreign Investment in Real Property Tax Act  (FIRPTA) of 1980. Bipartisan FIRPTA repeal legislation ( H.R. 2210 ) was introduced in the House on April 10. (Roundtable Weekly, April 12) 

The Roundtable’s key suggestion to help pay for infrastructure is to repeal the Foreign Investment in Real Property Tax Act  (FIRPTA) of 1980.  FIRPTA imposes a discriminatory layer of capital gains tax on foreign investment-a tax burden that does not apply to any other asset class.  Repealing FIRPTA would serve as a market-driven catalyst to finance improvements in our nation’s infrastructure.  Bipartisan FIRPTA repeal legislation (H.R. 2210) was introduced in the House on April 10. (Roundtable Weekly, April 12).

Other infrastructure policies detailed in The Roundtable’s April 29 letter include: 

  • A beneficial, 10-year cost recovery period for investments that improve energy efficiency performance in commercial and multifamily buildings;
  • Proposals supported by Democratic and Republican administrations alike to streamline the permit process for infrastructure projects;
  • An increase in the federal gas “user fee” in a responsible and sustainable manner;
  • Revising IRS “volume caps” and other limitations on tax-exempt bonds;
  • Improving the TIFIA loan program to encourage more public-private partnerships to finance infrastructure; and
  • Reasonable federal-state cost share rules for grants to support mass transit projects of regional and national significance (like the NY-NJ Gateway program).

The Roundtable’s DeBoer discussed the role of public-private partnerships to develop infrastructure projects on CNBC’s Squawk Box  in June 2017.  (Roundtable Weekly, June 9, 2017)  

Ways and Means Chairman Richard Neal (D-MA) has indicated he intends for his committee to consider an infrastructure bill soon.

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Roundtable Recommends Policies to Spur Infrastructure Investment and Economic Growth

Posted on by Trey Jackson

Repealing FIRPTA, streamlining permit procedures and passing infrastructure financing measures will help spur infrastructure improvements and contribute to economic growth, according to recommendations submitted this week by The Real Estate Roundtable to the House Ways and Means Committee.  (Roundtable Statement for the Record)

Repealing FIRPTA, streamlining permit procedures and passing infrastructure financing measures will help spur infrastructure improvements and contribute to economic growth, according to recommendations submitted this week by The Real Estate Roundtable to the House Ways and Means Committee.  (Roundtable Statement for the Record)

The Roundtable recommendations include the following:  

  • Unlocking private capital by repealing the Foreign Investment in Real Property Tax Act (FIRPTA).  FIRPTA imposes a discriminatory layer of capital gains tax on foreign investment—a tax burden that does not apply to any other asset class.  Repealing FIRPTA would serve as a market-driven catalyst to finance improvements in our nation’s infrastructure.
  • Streamlining the permitting process.  A report by the nonprofit organization Common Good estimates that a six-year delay in starting construction on public projects costs the nation more than $3.7 trillion.  Permit delays dampen private sector investment and add to the overall costs of infrastructure projects. 
  • Increasing the federal gas “user fee” in a responsible and sustainable manner.  The gas user fee (18.4-cents a gallon) that capitalizes the Highway Trust Fund has not been raised since 1993.  The Roundtable supports proposals to sustain the HTF by increasing the user fee by five cents a year for the next five years, and indexing it to inflation thereafter.
  • Revising IRS “volume caps” and other limitations on private-activity bonds (PABs).  Congress should broaden availability of these tax-exempt municipal bonding tools. Bipartisan measures that advance PAB financing, including the Move America Act (H.R. 1508), the Public Buildings Renewal Act ( H.R. 1251), and the BUILD Act  (S. 352), warrant close analysis.   
  • Improving the Transportation Infrastructure Finance Innovation Act (TIFIA) loan program through measures such as the RAPID Act (S. 353).  Congress should consider establishing a similar credit enhancement program to encourage public-private partnerships to help repair an aging pipeline grid and remediate gas leaks that impact climate change. 

DeBoer discussed the role of public-private partnerships to develop infrastructure projects on CNBC’s Squawk Box in June 2017.  “There’s a lot of capital that wants to invest in infrastructure,” DeBoer said.  (Roundtable Weekly, June 9, 2017).  

Ways and Means Chairman Richard Neal (D-MA) has indicated he intends for his committee to consider an infrastructure bill this spring.

Lawmakers Focus on Preventing Second Partial Government Shutdown; House Committees Prep for Action on Tax and Infrastructure Issues

Posted on by Trey Jackson

The federal government this week resumed full-time operations after a 35-day partial shutdown. A three-week bill signed by President Trump last Saturday now funds approximately 25% of the government – including the Department of Homeland Security (DHS), Treasury and the Internal Revenue Service (IRS) – until Feb. 15. If a new funding measure is not passed, the government will face another partial shutdown.

President Trump is scheduled to deliver the State of the Union to Congress on Tuesday, Feb. 5. 
(C-Span) 

  • The nonpartisan Congressional Budget Office released a report on Monday showing the partial shutdown reduced gross domestic product by $3 billion.  (Wall Street Journal, Jan. 28)
  • A House-Senate conference committee began negotiations Wednesday on a border security funding measure to resolve the same issue that caused the shutdown in December – a wall on the Mexican border.
  • President Trump yesterday said, “On Feb. 15th, the committee will come back and if they don’t have a wall, I don’t even want to waste my time reading what they have because it’s a waste of time.”  (Bloomberg, Jan. 31)
  • House Speaker Nancy Pelosi (D-CA) yesterday stated, “There’s not going to be any wall money in the legislation.  However, if they have some suggestions about certain localities where technology, some infrastructure [is appropriate] … that’s part of the negotiation.” 

      If a new funding measure is not passed by Feb. 15, the government will face another partial shutdown. 
  • The House Speaker added that House rules require the congressional conference committee to complete an agreement by Feb. 8 to pass it by Feb. 15.  “In order to have a bill signed by the president, we have to have a signed conference report by next Friday.  So we only have this week plus one day, with the State of the Union in between, to get this done,” Pelosi said.  (The Hill, Jan. 31)
  • President Trump is scheduled to deliver the State of the Union to Congress on Tuesday, Feb. 5, when he is expected to address his proposed increase in border security funding, including $5.7 billion for wall construction.  (Daily Caller, Jan. 30) 

House Committee Hearings on Tax, Infrastructure  

House Ways and Means Committee Chairman Richard Neal (D-MA) recently addressed his legislative priorities.

  • House and Senate tax-writing committees are preparing for action on their policy agendas in the 116th Congress.
  • House Ways and Means Committee Chairman Richard Neal (D-MA) addressed his priorities during a Jan. 24 organizational meeting.  Neal stated that in addition to retirement security and health care costs, “Another issue requiring our attention is America’s infrastructure. We must ensure our infrastructure systems are both safe and efficient  it’s essential for our global competitiveness.  We’ll also closely examine the Republicans’ tax law and its various problems.  So we’ll be conducting thorough oversight of this law – oversight that frankly is well overdue.  (Ways and Means, Neal Statement, Jan. 24.)
  • Rep. Mike Thompson (D-CA), chairman of the Ways and Means’ Subcommittee on Select Revenue Measures (formerly the tax policy subcommittee), said his panel’s first hearing will focus on infrastructure, although he has not set a date for the hearing.  Thompson added that the subcommittee will also review the 2017 tax code overhaul and how tax policies, such as a carbon tax or renewable energy tax breaks, impact climate change.  (CQ, Jan. 31)

Senate Finance Committee Chairman Charles Grassley this week said that retroactive renewal of more than 20 tax deductions that expired at the end of 2017 should be tied to a spending measure to keep the government fully funded beyond Feb. 15.  “The only vehicle that I see in the next few weeks is what comes out of this closing-down conference,” Grassley said,. “And if we don’t have something ready to go when that’s done, have a compromise on extenders … then it’s going to be a long time before we get another opportunity.”  (CQ, Jan. 31)

House Proposal Suggests Gas Tax Increase, Public-Private Partnerships to Fund Infrastructure Improvements

Posted on by Trey Jackson

Rep. Bill Shuster (R-PA), the outgoing chairman of the House Transportation and Infrastructure Committee, released “discussion draft” language on July 23 aimed at improving and sustainably financing U.S. transportation and other infrastructure systems.  (Section-by-Section analysis of the proposal)

Roundtable President and CEO Jeffrey D. DeBoer appeared last summer on CNBC’s Squawk Box, emphasizing the importance of P3s as a platform to finance the design, building, operation and long-term maintenance of projects across all infrastructure asset classes(CNBC, June 7, 2017).

  • Shuster, who is retiring after the upcoming midterm elections, provided a “vision statement” explaining that the draft “is intended to further the national conversation about the current state of America’s infrastructure and highlight some of the major roadblocks to funding and improving our transportation network.”  He stated his proposal reflects “input from Members of Congress from both sides of the aisle” in an effort to build bipartisan support.
  • The wide-ranging draft proposes to phase-in increases to the “pay at the pump” gas tax and then eliminate it after 10 years; pilot a per-mile travelled “user fee”; shore-up the federal loan and guarantee program for mass transit; establish a public-private partnership (P3) program to construct and rehabilitate federal buildings; and establish a one-stop federal permitting shop to expedite project approvals.  (Eno Transportation Weekly, July 23) 
  • Any broad infrastructure policy conversation would likely address federal-state cost sharing arrangements for mass transit projects – such as the Gateway program to improve bridge and tunnel crossings between New York and New Jersey.  For example, a  June 29 letter from Trump Administration transit officials indicated a change in agency policy – that loans by the U.S. Transportation Department, repaid by state and local governments,  should factor into grant decisions.  The effect would be to reduce the amount of federal grants for mass transit and increase the state/local share. (B-Gov, July 3) 
  • Anticipating infrastructure as an issue for possible compromise after the upcoming elections, The Roundtable has offered a number of comments to the Administration and Congressional committees on real estate’s role in creating public-private partnerships to help repair roads, transit, broadband, power grid and other systems that are needed to make communities safe, productive and competitive.  (Roundtable Weekly, January 26) 

Roundtable President and CEO Jeffrey D. DeBoer appeared last summer on CNBC’s Squawk Box, emphasizing the importance of P3s as a platform to finance the design, building, operation and long-term maintenance of projects across all infrastructure asset classes.  Policies starting with streamlined permitting and a range of financing platforms should all be considered by lawmakers as layers in the “capital stack” for infrastructure,” DeBoer told Squawk Box. (CNBC, June 7, 2017)

President Trump’s Plans to Slap Global Tariffs on Imported Steel and Aluminum Spark Concerns Regarding Real Estate and Infrastructure Investment

Posted on by Trey Jackson

President Trump yesterday said he will sign a formal order next week imposing tariffs of 25 percent on imported steel and 10 percent on aluminum for “a long period of time” – an act that could raise domestic construction costs and create new challenges for real estate development and infrastructure projects. (White House Remarks, March 1)

President Trump yesterday said he will sign a formal order next week imposing tariffs of 25 percent on imported steel and 10 percent on aluminum.

Roundtable President and CEO Jeffrey DeBoer voiced concern about how such a broad international penalty could rebound against the domestic commercial real estate industry. “In the United States, forty-two percent of steel is consumed by the construction industry, which employs millions of Americans directly and millions more indirectly,” said DeBoer.  “Aluminum is also a key material used in energy efficient building construction.  The current healthy state of the U.S. commercial real estate industry could be hard hit with the unintended consequences from such broad penalties targeting metals essential to construction. Tariffs will lead to higher construction costs that make many new projects simply uneconomic and unviable — hurting investment and job creation,” DeBoer noted.
 
Trump’s announcement, made during a White House meeting with U.S. metals industry executives, sparked a bout of stock market volatility and immediate responses from Canada and the European Union promising “countermeasures” to “rebalance” international trade with  the U.S.  
 
Federal Reserve Chairman Jerome Powell, following testimony this week before the House and Senate, said, “The best approach is to deal directly with the people who are affected, rather than falling back on tariffs.” (Wall Street Journal, March 1)
 
According to an analysis by the Cato Institute, more than 200 anti-dumping and countervailing duty orders aimed at preventing unfair competition currently constrain U.S. imports of steel and iron products from a long list of countries. The effect has been an increase in U.S. prices well above global levels to the detriment of the large manufacturing and construction sectors in America that use steel to make higher-value products. (CATO Institute, CNN Commentary, Aug. 2, 2017 and Engineering News-Record, Feb. 22, 2018)
 
The impact of tariff penalties on President Trump’s recent infrastructure proposal are uncertain. Transportation Secretary Elaine Chao yesterday testified before a Senate committee about the Administration’s infrastructure plan, which emphasizes policies to lower project costs and reduce project delays.  Higher tariffs on steel – a material necessary to build and repair bridges, tunnels, pipelines, and rail lines – could further constrain the federal state, local and private funding sources touted by the Administration as necessary to finance U.S. infrastructure repair and modernization.  (Bloomberg, March 1)
 
Infrastructure and national policies affecting economic growth will be discussed during The Roundtable’s Spring Meeting on April 25 in Washington, DC.

House Judiciary Committee Passes Infrastructure Expansion Act to Counter Inequities in “Scaffold Law”

Posted on by Trey Jackson

Legislation aimed at lessening the harsh impact of an antiquated 133 year-old labor “Scaffold Law” – an economic burden on infrastructure projects crossing state lines – passed the House Judiciary Committee on Tuesday.  (Committee Mark-up Video, Jan. 30)

The Jan. 29, 2018 industry coalition letter in support of the Infrastructure Expansion Act (H.R. 3808). 

The Infrastructure Expansion Act of 2017 (H.R. 3808), sponsored by Rep. John Faso (R-NY), passed along party lines by a 16-14 vote.  The Real Estate Roundtable, Associated General Contractors, and 17 U.S. organizations representing the contracting, insurance and real estate sectors urged the committee to pass the bill. (Coalition Letter, Jan. 29) 

The coalition letter provides several examples of transportation projects (such as the Northeast Corridor Gateway Program) that would benefit multiple states and the national economy, yet are hindered by application of the Scaffold Law. 

Courts have interpreted the New York law to subject property owners and contractors to “absolute liability” for slips, falls, and height-related accidents that occur during commonplace painting, cleaning, remodeling, and construction activities.  

Under this standard, any negligence by a worker that may cause an accident or intensify his own injuries is disregarded.  As an example, an inebriated worker who stumbles and falls at a project site would not be held accountable to the extent his intoxicated state caused his own injuries. (Roundtable Weekly, Jan. 19).  As a result, absolute liability under the Scaffold Law has caused premiums for general liability insurance at New York development sites to skyrocket. 

H.R. 3808 would deny federal funding to construction projects that use New York’s “absolute liability” standard for workplace injuries caused by falls. The bill does not diminish or alter Federal or state OSHA obligations, nor does it foreclose “no-fault” workers’ compensation.  

Committee Chairman Goodlatte (R-VA) broadened the bill’s scope to require states use either a “comparative negligence” or “contributory negligence” standard for falls on federally subsidized projects.  In a statement, Goodlatte also offered  detailed reasons explaining why the legislation should be enacted. 

Although the Infrastructure Expansion Act may continue to gain predominantly GOP support in the House, its prospects in the Senate are far more challenging.