Expect Federal Funding Cuts, New Regs In 2011

The 2011 Congress will be one of the most unpredictable in many years, and probably one of the most explosive too, owing to the partisan friction occasioned by the Republican tide washing over both the House — where the GOP took over — and the Senate.

The Republican influence will be felt most prominently with regard to infrastructure funding, where past increased appropriations are undoubtedly a thing of the past. In terms of passing new laws and refreshing old ones, Republicans will probably push back against reauthorizations of pipeline safety and state revolving fund programs. Obama administration regulatory initiatives at the Environmental Protection Agency (EPA), Pipeline and Hazardous Materials Safety Administration and Occupational Safety (PHMSA) and Health Administration (OSHA) will be less affected by changes in congressional makeup.

Reducing the federal deficit will preoccupy Congress this year, at least rhetorically. But if Republicans and Democrats actually do what they say they will, and the deficit knife actually does get wielded, that would certainly have unappealing implications for key underground construction programs such as the EPA’s Clean Water State Revolving Fund (CWSRF) and Drinking Water (DWSRF) State Revolving Funds.

The CWSRF received $2.1 billion in fiscal year 2010 and the DWSRF $1.387 billion. The last Congress punted on passing any federal budgets, including one for the EPA, for fiscal 2011 (that year actually started Oct. 1, 2010) before it left town in December. Instead, it passed a continuing resolution which leaves 2011 budgets at 2010 levels until March. “Across the board, the new Republican House majority is aiming to make the final FY11 federal budget lower than FY10, so the chance of an increase in EPA funding next year is remote,” states Dan Hartnett, director of legislative affairs, Association of Metropolitan Water Agencies.

Federal infrastructure funding already took a hit when Congress allowed the Build America Bonds (BAB) program, created by the 2009 stimulus bill, to expire at the end of 2010. The program subsidized the interest rates cities and counties paid to investors who purchased bonds used to finance local infrastructure projects such as sewers. The BAB program was not renewed in the second stimulus package Congress passed last December. Although Republicans such as Rep. Dan Mica (R-FL), incoming chairman of the House Transportation and Infrastructure Committee, have talked about their desire to refund the program, that decision would have to be made by a new House Ways & Means Committee chairman, Rep. Dave Camp (R-MI), who is said to be against resurrecting the BAB program because it would expand the federal deficit.

Non-funding programs of interest to the underground construction community also expired at the end of 2010, and were not renewed. But here the issue is less funding and more reform of the programs to make them work better. That is the case with the 2006 Pipeline Inspection, Protection, Enforcement and Safety Act (PIPES Act), where underground construction companies might actually want Congress to expand regulation, which would have to be done via a reauthorization of that law. Democrats had dipped their toes in those waters in September 2010 when House and Senate members, plus the Obama administration, proposed modifications to the 2006 PIPES Act in the wake of the deadly pipeline explosion in San Bruno, CA, where seven people were killed when a PG&E pipeline exploded. Those proposed bills contained provisions to heighten awareness of communities, local governments and excavators about where pipelines are located.

“The reauthorization of the 2006 pipeline law is something we will be working on in the 112th Congress,” reports Justin Harclerode, communications director for Rep. Mica. The chances of Congress passing a new pipeline safety bill could be enhanced by publication of the preliminary National Transportation Safety Board report on the San Bruno accident.

Not only is the underground community hoping for changes to programs established by the 2006 PIPES Act, it is tapping its toes nervously waiting for some of the programs initiated by that law to actually be implemented by the PHMSA. For example, the PHMSA has been creeping along with implementation of a 2006 PIPES Act requirement mandating that it develop criteria for taking action against states whose damage prevention programs are subpar. The agency issued a December 2009 advance notice of proposed rulemaking which establishes criteria states must meet in their damage prevention programs. Failure to do so would allow the PHMSA to take enforcement action against non-compliant states and against excavators, too. A proposed rule is expected in the next six months.

Richard W. Wanta, executive director Wisconsin Underground Contractors Association, thinks a final rule — which could be a year or more away — poses real dangers for underground companies because it would single them out and not require states to lasso other players in the underground damage rodeo, such as utility owners, design engineers, locating firms and municipalities. “Facility owners, locators and one-call offices will love the rule because there are no ramifications for them,” he says.

Moreover, he believes any enforcement should be done on the state level, in his case by the Wisconsin Public Service Commission, not PHMSA, whose closest regional office is in Kansas City. “We don’t want enforcement from a federal agency located in another state,” he explains.

Noise reduction
While that PHMSA rulemaking is important, the OSHA decision, announced late last year, to “reinterpret” its noise standard was considered doubly so. The OSHA had proposed to reinterpret its noise standard, which has been in place since the early 1970s, so that engineering controls would be considered economically feasible and therefore required in many instances. The current OSHA stance has been that companies can reduce noise levels below applicable thresholds via hearing conservation programs. That would mean supplying employees with ear muffs or earphones.

Complaints from all sorts of businesses flooded the agency after the OSHA announced its proposed reinterpretation. Ethan Wyman of NUCA felt it would be hard for his members to determine when engineering controls are “economically feasible,” a term he found ambiguous. Moreover, he adds, if OSHA wants to reinterpret the noise standard, it should go through a formal rulemaking.

Then, on Jan. 20, apparently hearing the pitter patter of angry Republican congressional feet, David Michaels, assistant secretary of labor for occupational safety and health, announced the agency was withdrawing the possible reinterpretation.

“It is clear from the concerns raised about this proposal that addressing this problem requires much more public outreach and many more resources than we had originally anticipated,” Michaels says.

OSHA isn’t going to ditch its concern about noise levels entirely, though. Michaels cites statistics from the Bureau of Labor Statistics that show since 2004, nearly 125,000 workers have suffered significant, permanent hearing loss. “OSHA remains committed to finding ways to reduce this toll,” he added.

He promised a “robust outreach and compliance assistance effort to provide enhanced technical information and guidance on the many inexpensive, effective engineering controls for dangerous noise levels.” Compliance, in the regulatory argot, can often mean more inspections and more fines. But Michaels did not go that far — at least not yet.

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