AggBeat

AggMan Staff | Published on August 1, 2011

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Funding or Financial Road to Ruin

With House and Senate proposals millions of dollars apart, the fight has started. Will it be a quick KO or go several rounds?

By Tina Grady Barbaccia, News and Digital Editor

The House Transportation and Infrastructure (T&I) Committee leaders have rolled out a new six-year transportation reauthorization proposal that the committee says streamlines and reforms federal programs, expedites the project approval process, maximizes leveraging of limited resources, provides flexibility for states, and ensures long-term funding stability for job-creating transportation programs. On July 6, committee chairman John L. Mica (R-Fla.) and committee leaders presented a framework for a six-year reauthorization of federal highway, transit, and highway safety programs. The multi-modal initiative also incorporates significant policy reforms for rail and maritime transportation.

The Senate also rolled out its own plan, a $109 billion, two-year transportation funding bill. Barbara Boxer (D-Calif.), chair of the Senate Environment and Public Works Committee, says the Senate is working on approaches that will immediately jumpstart the economy, “but we are running out of time and must act quickly.” Boxer argues that the United States spends $12 billion a month in Iraq and Afghanistan. “All we are looking for here is $12 billion over two years,” Boxer said in the Bloomberg Business Week report.

In contrast, the House has signaled that “it intends to go in a direction that will result in overwhelming job losses in the construction sector, which has been devastated during the economic downturn,” Boxer says in a statement following the rollout of Mica’s proposal. Boxer says under the House passed budget, all 50 states would experience job losses, and the consequences for families across the nation would be devastating, according to a Federal Highway Administration (FHWA) analysis. (For a downloadable table, go to http://tinyurl.com/State-by-State-Impacts-to-Cuts.) The Democrats have dubbed the House proposal the “Republican Road to Ruin.”

Mica calls Boxer’s plan “sad and disappointing,” adding, “some have taken such an unproductive approach to such an important matter, even before participating in preparing final draft language to present as a committee.” Regardless of disagreements, “For the sake of our nation we must act in a positive manner to move this legislation forward as soon as possible,” Mica says.

Pete Ruane, American Road and Transportation Builders Association (ARTBA) president and CEO, has commended Mica’s plan, saying that “despite strong political headwinds,” he has produced a proposal with much-needed reforms that will reduce redtape and bureaucratic hurdles. “His goal of expediting product delivery and facilitating public-private partnerships is clearly a step in the right direction,” Ruane says in a statement issued following Mica’s proposal. However, Ruane notes that every member of the House needs to clearly understand that any highway and transit program bill constrained by the existing revenue stream into the Highway Trust Fund — as proposed by House Budget Committee Chairman Paul Ryan (R-Wis.) — would be a “sure-fire job killer. The Ryan approach (http://www.tinyurl.com/RyanBudget) would also ensure further significant declines in system performance, which will negatively impact U.S. business productivity and international competitiveness.”

Ryan’s proposal says that highway spending has mostly exceeded the gas-tax revenues that finance the fund, because gas-tax revenues leveled off while spending grew. “Spending, meanwhile, has increasingly been diverted to non-highway projects, such as bike trails and museums, and politicized through earmarks such as the Bridge to Nowhere…,” according to the Ryan proposal.

Despite the disagreement over funding levels, Ruane says that “doing nothing on this legislation is not an option, because that, also, would guarantee greater unemployment in the transportation construction industry and the economy at-large.”

For additional news stories and more analysis on the reauthorization proposals, go to www.aggman.com and look in the AggBeat section.



Michigan Bill Would Reinstate “no serious consequences” Standard

With the introduction of House Bill (H.B.) 4746, the burden will now be on a township to prove that an aggregate production facility will impact the health and safety of a community before it can deny issuing a permit.

Named the “Michigan Zoning Enabling Act,” H.B. 4746 amends section 205 of pA 110 to reinstate the “no serious consequences” standard when a township considers an aggregate producer’s permit. This means that, unless the township can show that an aggregate production facility is going to impact the health and safety of the community, the permit has to be issued, according to the Michigan Aggregates Association (MAA).

However, the proposed legislation does not mean that anyone can just dig for natural resources anywhere they want, according to the association.

Additionally, a township may still impose the typical business restrictions under which aggregates facilities operate.

“The ‘no serious consequences standard’ worked for 80 years and should continue to be the standard,” MAA says.

The association has actively been working “to correct the decision” in Kyser vs. Kason Township through legislation. It has also been urging both its members and anyone else affiliated with the aggregates industry to contact their legislators about the decision.

“Don’t think it can’t happen to you,” MAA has cautioned. A township in Michigan’s Upper Peninsula recently shut down an aggregates producer — which left 30 employees jobless — and barred the operator from accessing existing inventory, using Kyser vs. Kasson as the precedent to shut down the facility.

H.B. 4746 states that “a county or township shall not regulate or control the drilling, completion, or operation of oil or gas wells or other wells drilled for oil or gas exploration purposes and shall not have jurisdiction with reference to the issuance of permits for the location, drilling, completion, operation, or abandonment of such wells.”

The bill would also protect producers against ordinances that would “prevent the extraction by mining of valuable natural resources from any property unless ‘very serious consequences’ would result from the extraction…” The proposed legislation would categorize natural resources as “valuable” if they are able to be extracted to generate revenue and operate at a profit.

If a zoning decision is challenged under the bill, the person or entity doing so would have the initial burden of showing there are valuable natural resources located on the relevant property and that there is a need for the natural resources by the person or in the market served by the person, and that serious consequences would not result from extracting or mining the natural resources.



Talking points for Kyser vs. Kason

Summary

• Aggregate producers employ more than 8,000 people statewide.

• The Michigan Supreme Court decision in Kyser vs. Kasson Township, threatens the very existence of the industry by eliminating the “very serious consequences” test.

• Aggregate production must occur where the resource is available; the “very serious consequences” test strikes a reasonable balance between the public’s need for aggregate, private property rights, and local zoning interest.

• The loss of locally available aggregate products will significantly increase the cost of road and other construction projects to the detriment of Michigan taxpayers.



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