Thursday, November 28, 2013

S 1768 Introduced – Pipeline Repair Funding

As I noted earlier, Sen, Markey (D,MA) introduce S 1768, thePipeline Revolving Fund and Job Creation Act. The bill would provide the Pipeline and Hazardous Material Safety Administration the authority to provide grant monies to States to establish revolving loan funds for the repair and replacement of the aging natural gas pipeline network.

The Revolving Loan Program

Each State would be required to establish a revolving loan/loan guarantee program where the grant money from PHMSA (along with a 20% matching state grant) would be loaned out, or used to guarantee loans, to natural gas pipeline operators to repair or replace existing gas lines. Repayment of those loans (along

There are a number of pretty standard stipulations:

• It includes “Buy American” language {§3(b)(2)(B)};
• Each state will establish (through a publish and comment process) a plan that outlines what types of projects will be funded, how the projects will be selected, and how the projects will be funded {§3(c)};
• Once obligated the funds will remain in program for the authorized life of the program (NOTE: there is nothing about what happens to the monies once the federal program is terminated) {§3(d)};
• Up to 4% of the federal grant funding may be used to pay program administrative costs {§3(f)(1)};
• The PHMSA Administrator will issue such guidance and regulations to govern these programs as necessary {§3(f)(2)};
• The State programs will provide a report to the Administrator every two years {§3(f)(3)} and the Administrator will audit those programs ‘periodically’ {§3(f)(4)}; and
• Various federal labor standards will apply to projects funded under this program {§3(g)}.

The bill does note that the repair and replacement of lines “that have been identified as leak-prone” (§3(b)(2)(A) is a priority, but leaves wide latitude to the determination of the PHMSA Administrator {§3(b)(2)(A)(i)} and the plans established by the State.

The bill does not provide any specific authorization level for the grant program (that normally has to be provided by a House bill), but §4 provides program authorization through 2024. It does restrict PHMSA spending on these grants to the amount specifically authorized for the program.

Moving Forward

Bills like this with creative funding for infrastructure repair/replacement are going to become more common. This use of a revolving loan fund will probably attract some favorable attention, as Congress moves into an election year. I would be very surprised if it gets any attention in the limited time left this year.

Next year I expect that this will move through the Senate Transportation Committee rather quickly. Then it will just be a case of whether this moves directly to the floor as one of those unanimous consent bills or whether it gets rolled up in the transportation authorization bill.

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