Monday, December 2, 2013
Dear House and Senate Water Resources Development Act Conferees:
The U.S. Chamber of Commerce, the world’s largest business federation representing the interests of more than three million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations, and dedicated to promoting, protecting and defending America’s free enterprise system, strongly urges the conference committee to resolve the differences between the Senate- and House-passed versions of the Water Resources Development Act and favorably report a conference report as soon as practicable.
America’s ports handle 99 percent of international trade and the inland waterways system is the primary artery for more than half of the nation’s grain and oilseed exports, 20 percent of the coal for electricity generation plants, and 22 percent of the domestic petroleum and petroleum products. Over the past several months, Congress built strong bicameral and bipartisan support for water resources reform and investment. The House and Senate enacted thoughtful policies that could grow jobs, boost international trade, protect property from floods and hurricanes, and strengthen America’s competitive edge.
S. 601 and H.R. 3080 contain many common elements in the major policy categories that the Chamber supports and reflect meaningful recommendations proposed by a congressionallycreated federal advisory committee, numerous think tanks and transportation stakeholders, including the Chamber.
Project Authorizations Without Earmarks
The Senate and House bills emphasize the need for greater levels of investment in these critical economic engines by authorizing an array of projects with completed Chief of Engineers reports that have been referred to Congress by the Assistant Secretary of the Army. H.R. 3080 would authorize a fixed set of 23 projects and two cost modifications to previously authorized projects, while S. 601 would authorize all projects with completed Chief Reports that are transmitted to Congress before the date of enactment. These projects address all of the major mission areas of the Corps of Engineers including the navigation of interstate commerce, but also flood risk management, hurricane and storm damage risk reduction, and environmental
Olmstead Lock and Dam Project
The Chamber is pleased that both the House and Senate incorporate the recommendation made by the Inland Waterway Users Board to modify the federal cost-share for the Olmsted Lock and Dam Project. The Olmsted project needs to be completed as soon as practicable, but also additional project cost overruns should be the responsibility of the federal government, not the user-supported Inland Waterways Trust Fund. Accordingly, the Chamber favors the Senate’s approach, which would shift 100 percent of the remaining costs to general treasury revenue compared to the 75 percent in the House’s bill. Implementing this recommendation would free up approximately $750 million for other capital construction efforts along the inland waterways system.
Harbor Maintenance Trust Fund
The Chamber believes that revenues derived from users should be fully and solely utilized for their intended purposes. The Chamber supports the Senate provision that would provide for the ultimate full usage of the Harbor Maintenance Trust Fund for its intended purposes.
Creating the Conditions for Successful Project Delivery
Both House and Senate bills would accelerate the project delivery processes and follow similar approaches. Both bills call for utilizing certified managers with formal project management training and risk-based cost estimates with a confidence level of at least 80 percent; identifying and applying on a continuing basis best management practices from prior or ongoing projects and evaluating early contractor involvement acquisition procedures; developing and implementing a portfolio of standard designs for inland navigation locks; making use of fullfunding contracts or formulating a revised continuing contracts clause; and establishing procedures for recommending new project construction starts using a capital projects business model.
Streamlining and Strengthening the Feasibility Study and Permitting Process
The Senate and House legislation both include strong provisions intended to consolidate lengthy studies; remove duplicative cost analysis; employ more efficient environmental review processes; develop implementation guidance; call for coordinated or concurrent review; appoint jurisdictional or “lead” agencies; and enact deadlines.
The Chamber is very pleased that both the House and Senate bills would make permanent the authority provided in Section 214, which allows the Secretary of the Army to accept and expend funds contributed by non-federal public entities to expedite the evaluation of permits. Section 214 has allowed local governments to move forward with vital infrastructure projects by funding additional staff to work on specific, time-intensive permits, which has allowed existing Army Corps of Engineers staffers to process more quickly significant permit backlogs.
Expanding Public Private Partnerships and Private Participation
The Chamber is pleased that both the Senate and House would address the issue of public-private partnerships (PPP) for delivery of water resources projects. Although H.R. 3080 would establish a PPP pilot program (Section 117), the Chamber urges the conferees to take the additional step of providing financing for projects and include Title X of S. 601, the “Water Infrastructure Finance and Innovation Act of 2013,” as part of the final legislation. Commonly referred to as WIFIA, this pilot program—modeled on the successful federal credit program for surface transportation, or TIFIA—would provide loans and loan guarantees for important water quality, drinking water and flood control projects.
However, the Chamber strongly opposes Section 10016, the “Buy America” provision requiring the use of American iron, steel and manufactured goods. While Buy America sounds simple, in reality it is exceedingly complex, as was illustrated by the experience applying Buy America to the SRF program during implementation of American Recovery and Reinvestment Act of 2009. The proposed provisions would make WIFIA the only water infrastructure financing tool subject to Buy America. It would require utilities to adjust their entire supply chain for a single project.
In addition, the Chamber also urges the conference committee to remove Section 10009(a)(5) of S.601 that would prohibit use of both private activity bonds and WIFIA assistance on the same project. This section would unnecessarily restrict the financing tools available to projects and could lead to increased borrowing costs, making the projects less attractive to private investors. This runs counter to the express purpose of the program: to establish additional opportunities for financing water resources projects that complement but do not replace or reproduce existing Federal infrastructure financing tools. Private activity bonds and WIFIA are complements to one another, not substitutes.
Inland Waterways Trust Fund
While we welcome the increased investment in America’s ports, the Chamber is disappointed by the omission of the recommendation made by the Inland Waterway Users Board to provide predictable, reliable, and sustainable revenues to the Inland Waterways Trust Fund from both the House and Senate bills. Fifty seven percent of the 238 locks on the inland waterways system are more than 50 years of age, well beyond their design life, with 34 locks older than 80 years according to the National Waterways Foundation. It is critical to address the gap between needs and resources on the inland waterways.
The 113th Congress has the opportunity— for the first time in six years — to complete WRDA reauthorization. Congress can kick-start strategic investment in our ports and inland waterways, increase American competitiveness and, in the process, create hundreds of thousands of high-paying U.S. jobs. The Chamber strongly urges the conferees to recognize the similarities between the House and Senate positions, find common ground where there are differences, and do so quickly. Failure to achieve a conference report would be a missed opportunity. Rather than bearing fruit, the shared policy reforms of the House and Senate packages would die on the vine, and outdated and inefficient laws would continue. The economic growth potential of infrastructure investment would be squandered and job losses would likely continue in the coming months and years.
The Chamber urges the House and Senate conferees to build upon the significant areas of agreement between the House and Senate packages, to forge agreement on remaining issues, and favorably report a conference report as soon as practicable.
R. Bruce Josten