On October 29, 2009, the U.S. Department of Transportation’s Pipeline and Hazardous Material Safety Administration (PHMSA) issued an Advanced Notice of Proposed Rulemaking (ANPRM) on Pipeline Safety: Pipeline Damage Prevention Programs. The purpose of the notice is to begin soliciting comments assessing the adequacy of state enforcement of oil and gas pipeline damage prevention laws, and to begin developing criteria for federal enforcement of damage prevention laws in states that are deemed to have inadequate enforcement of damage prevention laws for excavators, utility/facility owners, one-call centers and professional locaters as mandated by the 2006 PIPES Act. 

The PIPES Act gives PHMSA limited "backstop" authority to conduct civil enforcement against excavators in states that have failed to do so effectively if certain conditions are not met.  Specifically, section 2(a) of the PIPES Act limits PHMSA's authority to conduct federal civil enforcement actions against "persons who violate that State's damage prevention laws, unless the Secretary of Transportation has determined that the State's enforcement is inadequate to protect safety, consistent with this chapter, and until the Secretary issues, through a rulemaking proceeding, the procedures for determining inadequate State enforcement of penalties."

Other information being sought includes potential establishment of the federal standards for excavators that PHMSA would enforce if a state has been found to have an inadequate enforcement program. At a minimum, the standards will include requirements for an excavator to “use an available one-call system before digging, wait the required time, excavate with proper regard for location information or markings established by the pipeline operator, promptly report any damage to the pipeline operator, and report any release of hazardous products to appropriate authorities by calling 911.”  PHMSA is also soliciting feedback and comments on the adequacy of PHMSA’s existing requirements for pipeline operators to participate in one-call organizations, respond to dig tickets, and perform their locating and marking responsibilities.

PHMSA's goal in this process is to minimize the need to declare state damage prevention programs inadequate by working with states to strengthen their own enforcement programs. AGC has been assured that PHMSA will take a balanced approach in the development of enforcement regulations in this rulemaking process and will continue to work with AGC and the Common Ground Alliance (CGA) to ensure that the principles of fairness and shared responsibility are adhered to as the process moves forward.

Click here to download a copy of the ANPRM.

AGC will formally solicit comments from members and Chapters to incorporate into our initial comments to PHMSA.  In the meantime, AGC would like to encourage members and Chapters to read the ANPRM and share any initial comments and examples of good or bad state damage prevention programs and cooperative efforts. The initial round of comments must be submitted to PHMSA by December 14, 2009. After PHMSA has had an opportunity to review all comments, the agency will begin working on a “proposed rule” that will be subject to another round of comments and possible public hearings.

Please direct any questions or comments to Perry L. Fowler at (703) 837-5321 or fowlerp@agc.org.

H.R.3202, the "Water Protection and Reinvestment Act," was introduced by Congressman Earl Blumenauer (D-Ore.) on July 14, 2009, with bipartisan support. It establishes a five year $50 billion fund for repairing America's corroded pipes and overburdened sewer systems, which pose serious health, environmental and security risks. The Water Protection and Reinvestment Act will provide a deficit neutral, off-budget and firewalled dedicated revenue source for water infrastructure that will not be subject to the uncertainties of the annual appropriations process.

Unlike the Highway Trust Fund's reliance on the "gas tax" as a sole source of revenue, H.R. 3202 will be financed broadly by small user fees at the manufacturer level on goods that depend on municipal water supplies such as water-based bottled beverages and flushable products that are disposed of and treated by municipal wastewater systems. Additional miniscule fees on pharmaceuticals, over the counter drugs and a small corporate fee will establish a long-term, sustainable source of revenue to ensure economic prosperity and protect the health of people and the environment.

To learn more about H.R. 3202 and what you can do make stable annual funding for drinking water and wastewater infrastructure a reality, visit the AGC Legislative Action Center.

For additional information, contact Perry L. Fowler at fowlerp@agc.org or (703)837-5321.

 President Barack Obama on October 28 signed into law $33.5 billion spending bill to fund government energy and water programs for the 2010 fiscal year.

The final piece of legislation includes $5.4 billion in funding for the Corps of Engineers, $43 million above FY 2009 and $320 million above the administration’s 2010 request. The agreement includes $2.4 billion, $198 million above 2009, to address more than $1 billion in the backlog of operations and maintenance for navigation infrastructure that is critical to the U.S. economy.
The bill also includes $2 billion for construction projects, $313 million above the request, and $160 million for investigations, $60 million above the request, "to plan and design America’s next generation of water resource infrastructure."

Finally, the bill provides $1.13 billion to the Interior Department, $67 million above the request and $12 million above 2009, to continue to support and improve the nation’s water infrastructure, including $1.1 billion for the Bureau of Reclamation for dams, canals, water treatment and conservation, and rural water projects.

The full text of the law can be accessed here.

Further details are included in the Conference Report.

For more information, contact Marco Giamberardino at giamberm@agc.org

U.S. Environmental Protection Agency (EPA) Administrator Lisa Jackson appeared October 15 before the U.S. House of Representatives Committee on Transportation and Infrastructure to discuss the Clean Water Act's (CWA) permit program and EPA's immediate plans to strengthen its enforcement efforts. Jackson specifically called out construction sites as one of "the biggest threats" to our nation's waters, adding that EPA needs "to target enforcement to the most serious violations and the most significant sources."  To address what she describes as an "unacceptably low" level of enforcement activity, Administrator Jackson announced the release of EPA's new action plan to strengthen federal and state CWA enforcement. 

In her testimony to the Committee, Administrator Jackson stated that "it is long overdue for EPA to reexamine its approach to Clean Water Act NPDES [National Pollutant Discharge Elimination System] enforcement to…address the water pollution challenges of this century."  Recipients of all types of NPDES permits can expect to see increased enforcement by EPA - including criminal and civil penalties for noncompliance - as well as more reporting and public oversight. The Administrator went on to highlight EPA's new "Clean Water Act Enforcement Action Plan" that calls for the following actions:

1. Target Enforcement to the Most Important Water Pollution Problems - EPA will tackle violations of existing law by the sources of pollution posing the biggest threats to water quality.
2. Strengthen Oversight of State Permitting and Enforcement Programs - In situations where states are not issuing protective permits or taking enforcement to achieve compliance, EPA needs to act to strengthen state programs and to pursue federal enforcement actions as necessary.
3. Improve Accountability and Transparency - EPA believes that making information on environmental discharges available to the public will increase the pressure on regulated facilities to self-police and reduce their pollution.

During the course of the hearing, Administrator Jackson was asked about the EPA's position on the S. 787 the Clean Water Restoration Act.  She responded that the Obama Administration believes that Congress could bring more clarity to the permitting issues that have been the subject of confusion regarding jurisdictional issues between the U.S. Army Corps of Engineers and EPA and related Supreme Court decisions. Chairman Oberstar noted that he has not introduced companion legislation to S.787 yet.  Several Committee members expressed concerns about removing the term "navigable" from the Clean Water Act.  AGC has actively opposed this legislation because it would give EPA and the Corps jurisdiction over all wet areas-however remote or intermittent. At a recent hearing before the Small Business Panel on Waters and Wetlands Regulations, AGC testified that the bill would require construction contractors and project owners to obtain and be regulated by federal Clean Water Act permits far more frequently than is currently required. 

Administrator Jackson was also asked about the Obama Administration's position on the creation of a Clean Water Trust Fund.  Jackson indicated that the Obama Administration did not have a position for or against the "Trust Fund," but acknowledged that there was a major gap in the current investment in clean water infrastructure. 

AGC has been involved in direct talks with the EPA's enforcement arm, the Office of Enforcement and Compliance Assistance (OECA), and will continue to engage in discussions with EPA and the T&I Committee to ensure that the construction industry's concerns are heard and that EPA efforts include increased compliance assistance and industry outreach in addition to increased enforcement actions.

To view Administrator Jackson’s and other testimony and video of the hearing, click here.  To view EPA’s Clean Water Enforcement Action Plan, click here.

 For addition information, please contact Leah Pilconis at pilconisl@agc.org.

The National Rural Water Association (NRWA) represents approximately 26,696 public water and wastewater utilities in rural communities across the United States. On October 4, AGC Staff and M&U Regional Representative Dick Smailes, Contractors Association of West Virginia member, met with NRWA and other national leaders to discuss opportunities for collaborative efforts with AGC Chapters and members.  In 2009 and 2010, NRWA members will be working to administer $3.8 billion for construction, upgrades and expansions with Recovery Act funding provided through the USDA's Rural Utilities Service. 

For assistance establishing contact with your State NRWA Chapter, please contact AGC M&U Division Director Perry L. Fowler at fowlerp@agc.org or (703)837-5321.

AGC has been active in our efforts to ensure that the "Buy American" requirements of the Recovery Act did not seriously delay $6 billion allocated for drinking water and wastewater projects being administered by the U.S. Environmental Protection Agency (EPA) and $1.4 billion allocated for the USDA's Rural Utilities Service (RUS). Trade agreement exceptions to the "Buy American" requirements in most cases do not flow down to sub-federal entities, such as municipal utility authorities that procure most of these projects.  Unfortunately this new policy has created a great deal of confusion and delays as agencies have been forced to apply "Buy American" for Recovery Act programs where this policy has not previously applied.

AGC has been successful in educating EPA about the about the potential negative impacts of "Buy American" on SRF-funded stimulus projects, including project delays, litigation, bid protests, price gouging and potential criminal penalties and liability if contractors unknowingly incorporate certain materials into projects that either are not domestically manufactured or are of unknown origin, such as valves, gaskets, screws, pipe fittings etc.  AGC has  also raised concerns about certain major, and in many cases advanced systems and pieces of equipment, that are not manufactured in the United States, or contain components manufactured abroad, but are preferred and specified based on performance by state regulatory authorities and water utilities. 

EPA has independently verified the validity of AGC's  concerns and has taken aggressive measures to ensure that there is a waiver process in place that recognize the realities of the water infrastructure market with respect to country of origin for materials and equipment incorporated into projects. To date EPA has issued 14 project specific regional "public interest" waivers and 4 national waivers including di minimus waivers which cover some of the aforementioned materials.

AGC has hraised similar concerns with the USDA Rural Utilities Service (RUS) in early 2009, and on September 25 USDA issued their own  di minimus waiver citing the same logic that EPA has applied in the crafting of their waiver. Hopefully this will start to free up the estimated $3.8 billion in USDA projects it will fund with stimulus dollars. It is unknown whether additional waivers or guidance are forthcoming from USDA.

Please see the attached document containing all regional project specific and national waivers of the "Buy American" provision as they relate to the EPA SRF and USDA RUS programs and make sure that your state and local water authorities and other AGC members are aware that waivers are being granted. Please note that project specific waivers must originate with owners procuring projects or state water authorityies funding projects . Contractors cannot initiate this process.  With respect to the di minimus waiver this will largely be the contractor's responsibility to account for costs and materials that fall under the 5% threshold.  

For more information, contact Perry L. Fowler at (703) 837-5321 or fowlerp@agc.org

AGC and the Water Infrastructure Network (WIN) Coalition continue to push the Senate to bring S. 1005 Water Infrastructure Financing Act of 2009 to the floor of the Senate.  On October 7, the WIN Coalition sent a letter to Senate Majority Leader Harry Reid calling for action on S.1005.

S.1005 authorizes $39.191 billion for EPA water infrastructure programs over the next five years. This represents a significant increase for EPA federal assistance programs including $20 billion for the Clean Water State Revolving Fund Program and $14.7 billion for the Drinking Water State Revolving Fund Program. Annual dollars for EPA SRF Programs are detailed in the chart below.

Other key programs funded in the bill include $1.8 billion annually for Sewer Overflow Grants and $1.43 billion for the Critical Drinking Water Infrastructure Grant Program, which provides grants for reducing lead in drinking water and technical assistance for small, rural and disadvantaged communities.

AGC members are encouraged to continue contacting their senators to urge support of S.1005 using AGC's Legislative Action Center.

For more information, contact Perry Fowler at (703) 837-5321 or fowlerp@agc.org.

 Featured Conference Speaker Congressman Earl Blumenauer

• J. Kevin Ward, Executive Administrator of the Texas Water Development Board and incoming President of the Council of Infrastructure Financing Authorities (CIFA), will discuss the impact of water supply on infrastructure planning and the challenges State and local authorities are facing to finance capital programs. Texas has been a leader in forecasting its water infrastructure needs and has recently published a report entitled Liquid Assets: The State of Texas' Water Infrastructure.
• Joe Adams, President of MWH Constructors will discuss the increasing use of design-build and other alternative project delivery methods for water infrastructure projects. MWH is an AGC member and also participates in the Water Design-Build Council. Ward will discuss the benefits and risk involved in non-traditional project delivery approaches including a case study of a CM at Risk project with an owner's representative.

 Other featured speakers include:

• Software innovators Bentley and Autodesk will participate in a discussion showcasing how virtual design and construction is being used for highway and water projects. This forum will also feature a jobsite presentation from an experienced AGC contractor and will also include a representative from Caterpillar who will describe the latest developments integrating construction equipment into the BIM/VDC models.
• Kris Hoellen, Director of the Conservation Fund's Conservation Leadership Network will discuss how the green construction movement is impacting highway & underground construction projects and how the construction industry and infrastructure can be a part of the solution to America's environmental challenges.
• Attorney John Mullen will report on the top legal decisions of the year that may impact your business.

 Highway Specific Sessions:

•  Karen Rae, Deputy Administrator, Federal Railroad Administration will present the Administration's high speed rail initiative and the construction opportunities that will result from this investment.
• Dave Ahlvers, State Construction Engineer, Missouri DOT and Paul Steinman, Chief Engineer, Florida DOT will discuss the use of contractor performance measures for prequalification, latest design-build developments including a financing option, alternate bid items for selecting concrete or asphalt pavements, performance specifications, value engineering/ practical design and recycled materials in concrete and asphalt.

For registration, schedule, hotel, transportation and other information
visit www.agc.org/highwayutilitiesissuesmeeting.

The U.S. EPA Administrator Lisa Jackson has directed the Office of Enforcement and Compliance Assurance (OECA) to examine its Clean Water Act enforcement program and report back to her in early October with an action plan to strengthen and improve the Agency's enforcement efforts.  This new initiative comes in light of information showing that water quality goals are not being met, there are too many violations in too many places, and the level of EPA enforcement is unacceptably low, according to Administrator Jackson's memo to key Agency officials.

AGC meet with OECA last week to discuss the National Pollutant Discharge Elimination System (NPDES) stormwater permit program and how it is enforced on construction jobsites.  AGC suggested positive incentives and expressed concerns about any potentially punitive measure; AGC plans to provide EPA staff with more detailed, written recommendations later this week.  In addition, AGC Chapters and members can help shape the future direction of EPA's national water enforcement program (and comment on EPA's current enforcement efforts) by participating in an online EPA discussion forum. 

The NPDES program under the federal Clean Water Act (CWA) regulates mostly stormwater discharges associated with municipal sewer systems, industrial activities and construction activities. (All facilities that discharge pollutants through a point source into waters of the United States are regulated by EPA and states under the NPDES program.)  If your construction activity disturbs one or more acres of land, you most likely need a permit to discharge stormwater runoff from your construction site, available from EPA's NPDES program or the state NPDES permitting authority. Additional information on the federal stormwater requirements is online at http://www.epa.gov/npdes/stormwater. You also can obtain information about state and local stormwater requirements through the Storm Water Resource Locator.

To clean up our nation's waters, Administrator Jackson's memo directs EPA OECA staff to devise a new action plan to achieve the following:

(1)   Make clean water enforcement information more transparent.  Administrator Jackson wants to "improve and enhance information that is available through the EPA Web site on compliance with the Clean Water Act and the level of enforcement activity in each state… [including] performance of individual businesses as well as state and national performance."

(2)   Raise the bar for clean water enforcement performance.  The Administrator wants to bring strong, consistent and effective enforcement actions against those who violate the Clean Water Act.  She has asked EPA staff to "boost [their] enforcement presence."

(3)   Launch a major shift of EPA's clean water information systems.  The Administrator wants data on facilities' discharges and their compliance status to be available to "federal and state regulators and the public, over the web, [and] on a real-time basis."  For example, the Enforcement and Compliance History Online (ECHO) Web site displays inspection and enforcement information for various permitted dischargers under the Clean Water Act.   But it only reflects compliance and enforcement records that local, state and federal entities have entered into the federal database. 

More information on the development of the clean water enforcement action plan is online at http://www.epa.gov/compliance/civil/cwa/cwaenfplan.html or contact EPA's Deb Berlin, berlin.deb@epa.gov, (202) 564-4914.

AGC anticipates that a large number of water infrastructure projects funded with EPA "Stimulus" funds will hit the streets in September and October.  According to the EPA, significant progress is being made processing assistance agreements with state water authorities, which will likely translate into contracts very soon. As we reported in the August edition of the Pipeline, official reports from EPA were dismal in terms of actual dollars translating into contracts. This situation seems to be improving and while full project data will not be available from the states until October, EPA has shared that almost 400 projects have received assistance agreements for approximately $672 million. 

Assistance agreements are required for projects to proceed to the bidding stage.  So far, 94 projects receiving funds through the Clean Water SRF have completed contracts for all funds and 83 are under construction. Forty-nine drinking water projects have completed contracts and 48 are under construction. By EPA's estimates, most states are doubling the impact of ARRA SRF dollars.

EPA continues to deal with new "Buy American" requirements and has released several more waivers, including an updated version of the nationwide de minimus waiver originally issued on June 2, 2009. The waiver was given for "de minimis incidental components," which are minor, or small-scale components that "cumulatively comprise no more than a total of 5 percent of the total cost of the materials used in and incorporated" into eligible water infrastructure projects funded by the ARRA. According to EPA, every water infrastructure project involves the use of "thousands of miscellaneous, generally low-cost components that are essential for, but incidental to, the construction and are incorporated into the physical structure of the project, such as nuts, bolts, other fasteners, tubing, gaskets, etc." EPA said it "is not in the public interest" to impose ARRA's Buy American requirements, as outlined in Section 1605 of the stimulus law, on these de minimis components. 

This updated version, released August 11, 2009, revises the terms under which that waiver may be applied; specifically it repeals the need to identify both the country of origin and possible alternatives for these incidental components. EPA reasoned that for many of these components, "the country of manufacture and the availability of alternatives is not always readily or reasonably identifiable prior to procurement in the normal course of business." The new terms of this waiver are effective as of July 24, 2009. 

EPA regional offices continue to issue project-specific waivers, including 4 national categorical and 9 project specific waivers through EPA Regional offices. The latest waivers of the Buy American provisions were granted for projects in Vermont and New Hampshire for advanced U.V. and sludge treatment technologies. 

Individual projects must apply for a separate waivers based on project-specific circumstances even if waivers have already been granted for specific materials or equipment. EPA has left the door open for additional national waivers and according to EPA officials no waiver requests have been rejected to date. For the entire list of waivers issued to date click here. 

For more information on EPA Buy American requirements, including EPA webcasts, please click here.

For additional information, please contact Perry L. Fowler at fowlerp@agc.org or (703)837-5321.