Aggregate Reporter. News Briefs

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1 North Carolina Aggregates Association 3700 National Drive, Suite 210, Raleigh, NC Phone: (919) FAX: (919) Aggregate Reporter NCAA Officers President Steve Bruce Martin Marietta Aggregates Vice President - East Trent Sherrill Wake Stone Corporation Vice President - West Mark J. Koone Thompson Contractors, Inc. Secretary Scott Dickson Hanson Aggregates Treasurer Tom Carroll Vulcan Materials Company Associate Member Rep Eldon Burgiss James River Equipment Past President Sam Bratton Wake Stone Corporation NCAA Committee Chairs 2015 Convention Tom Oxholm, Chair Wake Stone Corporation Environmental Jason Conner, Chair Hedrick Industries, Inc. Government Affairs Steve Reel, Chair Martin Marietta Aggregates Marketing & Technical Kevin Vaughan, PE, Chair Vulcan Materials Company Safety & Health Bryan Moore, Chair Vulcan Materials Company General Counsel Mac Boxley Boxley, Bolton & Garber News Briefs March / April 2015 Bond Referendum Gov. Pat McCrory wants the legislature to schedule a special election this November to let voters decide on a pair of proposals to borrow up to $2.8 billion to build roads and renovate or replace state government buildings. NCDOT Secretary Tony Tata mentioned at the NC Chamber s Transportation Summit last Thursday that the bonds likely will be on a statewide referendum ballot Nov. 3. If legislators agree, the proposals to borrow money would be decided in a low-turnout election, when the bonds would be the only item on the ballot for many voters. Many towns and cities will have municipal elections in November, but no statewide vote is scheduled until Melanie Jennings, a spokeswoman for the state budget office, said legislation to schedule the bond referendum will likely be introduced in the House before the filing deadline of April 17. She declined to release further information until the bill is filed. McCrory revealed the two bond proposals during his State of the State address in February. He wants the state to borrow $1.2B to $1.4B for transportation projects, and an additional $1.2B to $1.4B for state government buildings. Although few details of the building projects have been released -- the McCrory administration is still studying facility needs -- the NCDOT released a list of 19 projects that its bond would pay for. In the Triangle, the list includes $60 million for Wake and Franklin counties to finish the four-lane widening of U.S. 401 between Raleigh and Louisburg. The most expensive project is the Interstate 74 eastern bypass of Winston- Salem, costing $300 million. Other major projects include $173 million to improve the interchange of I-40 and I-77 in Statesville, $42 million to build a new US 74 bypass of Shelby, and $20 million to build a new I-485 interchange at Weddington Road in Mecklenburg County. Republican leaders in the House and Senate haven t said whether they ll support putting the bonds on this year s ballot. A spokeswoman for Senate leader Phil Berger said Thursday she couldn t comment until McCrory releases more details about the referendum. The two bond proposals would be the biggest borrowing package put to North Carolina voters since 2000, when 73% of voters backed a $3.1B bond for new community college and university facilities. That referendum occurred in a presidential election year when 59% of registered voters went to the polls, according to N.C. Board of Elections statistics. Michael Bitzer, a politics professor at Catawba College, said holding the bond referendum this year, instead of in 2016, could be a political risk for McCrory. On one hand, passing the bonds this year means he won t have to campaign for them during his 2016 re-election bid. But if the bond issue is defeated, the governor would look weak, he said. You don t want to go the year prior to your re-election bid suffering a defeat at the polls, Bitzer said. The transportation bonds are expected to get a big push from the N.C. Chamber, which has been running TV commercials highlighting the dangers of crumbling bridges and infrastructure. Source The News & Observer

2 North Carolina s Financial Standing The amount North Carolina could borrow without losing its top credit rating continues to grow as revenues rebound and the legislature has kept to a no-new-debt diet since the Great Recession, according to an annual report released last month by State Treasurer Janet Cowell. The findings within the 2015 Debt Affordability Study is good news for Governor McCrory and legislative leaders who are considering new borrowing this year to complete road and building projects. McCrory has proposed a transportation bond ($1.2 billion) and government buildings infrastructure ($1.2 billion). After a borrowing surge by the General Assembly on state buildings just before the economic downturn, there was little or no capacity to issue more debt unless the state wanted to risk its triple-a credit rating. The principal on this and other active debt has slowly been paid down. We ve obviously been very prudent with our debt and we can issue some reasonable amount here, Cowell said in an interview, but it s not going to solve all of our problems, particularly with transportation, she added. The panel that writes the report, led by Cowell, found officials could approve $698 million in new debt annually for the foreseeable future and still remain within self-imposed fiscal limits. This kind of debt is repaid with general tax revenues. A year ago, the annual additional capacity was $570 million. For transportation debt backed by gasoline and car-sales taxes and other fees, there s additional capacity of $226 million annually compared to $209 million a year ago. If the legislature wanted to authorize all of its excess transportation debt in one year, the capacity would go above $1 billion, the report said. The transportation capacity isn t growing as quickly because gasoline taxes haven t been as robust, Cowell said. The state had $6.8 billion in outstanding debt supported by taxes of all kinds as of last June, the report said. Cowell s office said the state made $722 million in debt payments in the previous fiscal year. The legislature would have to sign off any new debt. Senate Pro-Tem Phil Berger, said in a recent interview that he believes fellow Republicans don t want to borrow beyond what Cowell, believes is reasonable. Berger said they are waiting for details from McCrory. We don t want to get ourselves into a situation where we jeopardize the bond rating, he said, but added I think there will be some support for some bonding level. I think it all depends on the amount, the specifics. Source - AP Federal Government Transportation Spending The federal government spent $96 billion on infrastructure projects last year, according to a Congressional Budget Office report that was released last month. The figure, which includes water projects, is dwarfed by a total of $320 billion that was spent on infrastructure by state and local governments, according to the report. The CBO said 57 % of the money that was spent by governmental agencies was used for operating expenses and maintenance of existing infrastructure, while 43 % was spent on new construction. The impact of the infrastructure spending was weakened by rising construction costs, according to the report. Nominal public spending on infrastructure increased by 44 % between 2003 and 2014, but because prices of materials and other inputs rose more quickly than nominal spending, real (inflation-adjusted) public purchases decreased, falling by 9 % from their peak in 2003 to their level in 2014, the agency wrote. New construction, or capital, projects were the hardest hit by the decline in the government s purchasing power, according to the report. The decline in real public spending (adjusted using infrastructure-specific price indexes) on transportation and water infrastructure between 2003 and 2014 occurred almost exclusively within the category of capital purchases, which fell by 23 % during those years, the CBO said. The construction and rehabilitation of highways, in particular, declined over the period. By contrast, real public spending for the operation and maintenance of infrastructure continued its historical tendency to grow, rising by about 6 % over that period, primarily because of increases at the state and local level. The finding about federal infrastructure spending comes as lawmakers are debating a new transportation funding bill with the current highway bill set to expire on May 31. The federal government typically spends approximately $50 billion per year in infrastructure spending, not including water-related projects. The funding was set to run out last September before Congress passed the temporary patch that expires this spring. Lawmakers have struggled to come up with a way to pay for a transportation funding extension beyond the revenue that is collected by the 18.4 /gallon federal gas tax. The gas tax has been the traditional source of transportation funding since the 1930 s, but it has not been increased since It has struggled to keep pace with construction costs, as cars have become more fuel efficient. The gas tax only brings around $34 billion annually at its current level, leaving lawmakers with a $16 billion per year infrastructure funding hole to fill. The shortfall has been blamed for the failure of Congress to pass a transportation funding bill that last longer than two years since The CBO stated that federal transportation spending has fallen at a much faster clip than state funding during that time period. Although all levels of government have spent less, in real terms, on transportation and water infrastructure in recent years than in the past, the greatest reduction has occurred at the federal level, the agency said. Adjusted for inflation, federal purchases have fallen by about 19 % since 2003, while purchases by states and localities have fallen by about 5 %. Source - AASHTO Governor McCrory testifies on Capitol Hill Elimination of the federal role in transportation would be catastrophic for states, Governor McCrory told lawmakers on Capitol Hill on March 17. McCrory told the House of Representatives Transportation and Infrastructure Committee that he does not support devolving the federal transportation program to the states, an idea championed by many conservatives. Rather, he said, states need the federal government to help connect economic regions, even when they cross into other states. McCrory cited two needs in the eastern part of our state: connecting the port city of Wilmington to the resort city of Myrtle Beach, S.C., which are about 75 miles apart, and rural northeast Page 2 March / April 2015

3 North Carolina with the Hampton Roads area of Virginia. McCrory, the former mayor of Charlotte, said that the economic needs of eastern North Carolina do not recognize these political boundaries. That s why I think the federal government has to play a role, so we don t have these logjams along the coast or connecting our major regions, he said. I want Myrtle Beach to do well. I want Wilmington and the rest of our coast to do well. McCrory said that North Carolina relies on federal funding for 28 % of its transportation needs. The state has the second-largest highway system in the country, as well as the second-largest ferry system. McCrory implored lawmakers to pass a long-term transportation bill this year. Congress has not passed a long-term bill in a decade, and has strung state departments of transportation along with a series of short-term extensions that hinder planning. Long-term investments in roads and bridges require long term planning, he testified. The current extension, enacted in August, will expire in just 10 weeks. McCrory, testifying on behalf of the National Governors Association, said that states have gotten creative, spending their own funds more efficiently and finding alternate sources of funding, including tolls and bonds. McCrory noted his state s project to widen Interstate 77 north of Charlotte by tolling the new lanes. He also said the state would seek voter approval of a $1.2 billion transportation bond to take advantage of low interest rates and would look at the potential for revenue generated by offshore energy production. However, he said North Carolina and other states still need help from the federal government. Despite our creative efficiencies, McCrory said, our efforts still fall far short of our needs. Source - McClatchy Washington Bureau Senate Bill 20 The House and Senate approved the conferee s comprise bill on March 31 and the Governor signed the bill later that day. So, on April 1, the state s motor fuel tax dropped from 37.5 cents/gallon to 36.0 cent/gallon. It will remain at 36.0 cents for the next 15 months. This 1.5 cent cut will cost NCDOT about $94 million over this 15 month period, but if the motor fuel tax was allowed to reset with no legislative changes NCDOT would have lost about $800 million in funding over the next 4 years. Fiscal researchers for the legislature estimated that the new law will boost NCDOT revenue by $266 million during the fiscal year that starts in July, and an average of $181 million annually for the three years after that. Below is a summary of the new transportation funding law. From April 1 to January 1, 2016 motor fuels tax is 36 cents/ gallon. January 1, 2016 to June 30, cents/gallon. July 1, 2016 to December 31, cents/gallon. January 1, cents/gallon + a percentage. The percentage is a combination of the % change in population for the calendar year and the annual % change in the CPI for all urban consumers. Population 75% CPI 25% 40 NCDOT layoffs Fiscal researchers for the legislature expect the tax to rise slowly to about 36 cents in The Senate approved the bill in a 41-8 vote. The House vote was To see how your member voted. Senate votehistory/rollcallvotetranscript. pl?ssession=2015&schamber=s&rcs=67 House - votehistory/rollcallvotetranscript. pl?ssession=2015&schamber=h&rcs=114 Source The News & Observer NC Chamber s Transportation Media Campaign Thanks to the NCAA members that have contributed to the NC Chamber s Transportation Media Campaign. With the Chamber s leadership, we were able to get Senate Bill 20 passed, which helped stabilize the funding from the motor fuel tax. This is the first step in a campaign to create a diversified and growing revenue model to meet the demands for our growing state. The Chamber ran an effective TV ad last month that got the legislature s attention. The ad contained a 911 call about a bridge that collapsed while a school bus was crossing it. The Chamber began the next phase of the campaign last week with a radio ad about the need for the legislature to find additional funding for transportation infrastructure since the state cannot wait for Congress to help. So far, NCAA and its members have contributed $178,500 to the campaign. Thanks again. Ararat Rock Products Carolina Sunrock Hanson Aggregates Luck Stone Corporation Martin Marietta McCrary Stone Services Thompson Contractors Vulcan Materials Company Wake Stone Corporation NCAA Please contact the Association office if you have any questions about the campaign. You can make your contribution directly to the NC Chamber. Write in the memo line: Transportation Advocacy Campaign Contributions are tax deductible. Mail to: 701 Corporate Center Drive, Suite 400 Raleigh, NC Mining Commission The Mining and Energy Commission (the fracturing rule writing commission) is set to expire on July 31, On August 1, 2015, two separate commissions will be created for mining and energy. That means we get our Mining Commission back this summer but not so fast. With the ruling from a threejudge panel that the Governor, not the General Assembly, has Page 3 March / April 2015

4 the power to appoint members of boards such as the Coal Ash Commission. The ruling does not only apply to the Coal Ash Commission, but the Mining and the Oil & Gas Commissions were both referenced in the judges ruling. The new Mining Commission will have four industry representatives appointed two by the Governor and two by the Legislature. Currently, there is a freeze on appointments to most boards and commissions. This ruling has the potential to affect every board / commission that the General Assembly appoints members. General Assembly s leaders have appealed the ruling to the NC Supreme Court. NSSGA Awards Congratulations to Brian North and Steve Whitt with Martin Marietta. They received the Grassroots Coordinators of the Year at the NSSGA Annual Meeting last month in Baltimore for their work on opposing the EPA s proposed Waters of the US Rule. They coordinated Martin Marietta s letter writing campaign (which generated 167 comment letters), and met with White House staff, EPA staff, and members of Congress to voice the industry s opposition to this proposed rule. Well done Brain and Steve. Gold Environmental Award Winner Martin Marietta s Mallard Creek Quarry Gold Community Relations Award Winner Lehigh Hanson s Crabtree Quarry Part 50 Overview Investigating and Reporting NCAA and MSHA s EFS/Small Mines Service hosted two successful Part 50 Training workshops in Raleigh and Hickory during the month of February. We had about 25 attendees at each workshop. We would like to thank associate member Matt Korn with Phillips & Fisher for his presentation reviewing recent judicial rulings concerning Part 50. MSHA Legal Seminar Because of inclement weather across our state on February 24 and 27, we had to postpone the two legal seminars. Instead of rescheduling the events in Raleigh and Morganton, we will hold one event in Greensboro or Winston-Salem on May 21, Once we secure a location, information will be sent to you. If you were registered for the seminars in February, please let Diane know if you will be able to attend the rescheduled seminar. This seminar will be conducted by Bob Beatty and Jason Nutzman with Dinsmore. They will cover the regulatory enforcement structure; pre-enforcement awareness training; gravity, negligence, and unwarrantable failure, MSHA s proposed changes to the civil penalties, and traveling with the inspectors. This seminar is designed for management, frontline supervisors, superintendents, foremen, and anyone who walks with the inspector during the inspections. The seminar was held in Raleigh on February 24, though only a few were able to make it. Mario Benjamin, Mellotts, attended the seminar and said, The presentation put on by Jason Nutzman (Dinsmore) was Very Well DONE. The information presented on the legal aspect of citations and orders issued by DOL / M.S.H.A. is a must know for mine operators and their management personnel. All persons operating under the charge of the Minerals Resources act 30 CFR, should attend this seminar. With changes to the cost of fines and penalties, having a good understanding of the process will assist operators in keeping their personnel informed on just how critical understanding M.S.H.A.is to their day to day workings. I highly recommend that persons from line foreman to senior executives attend this or have Jason Nutzman present at their facility if at all possible. Information will be sent out soon for the seminar. We encourage you to attend. NC Mine Safety & Health Conference NCAA and the NC Mine and Quarry Bureau held our annual Safety & Health Conference in Asheville the last week in March. We had a record number of attendees this year 118. Thanks to everyone that attended and made this a successful conference. To kick off the conference the NCAA Safety & Health Committee held their meeting the afternoon before the conference began. Sam Pierce, MSHA s SE District Manager attended the committee meeting, which provided a great opportunity for the attendees to have an open conversation with Sam about current issues in the SE district. Next year s conference will be March 30 April 1 at Sea Trail in Sunset Beach, NC. ~~~~~~~~~~~~~~~~~ Page 4 March / April 2015

5 NCAA Legislative Breakfast Date: Tuesday April 21, 2015 Time: 7:00 to 8:00am Location: General Assembly Cafeteria Cost: $20 Due to inclement weather, we had to postpone our February 25 Legislative Breakfast. The rescheduled Legislative Breakfast at the General Assembly Cafeteria will be Tuesday, April 21 from 7:00am to 8:00am. We have invited all the legislators to the breakfast, so this will be a great opportunity to discuss issues with your representative and senator. Lew Ebert, President of the NC Chamber; Burt Tasaico, NCDOT State Program Analysis Engineer; and Representative John Torbett, Chair of the Transportation Committee. After the breakfast you may want to meet with other members of the General Assembly, so please contact their office to schedule this meeting. Since the legislators have many demands on their time, it is important to schedule a meeting before April 21. If you have any questions about setting up a meeting, please contact the association office. The registration form is on page 7 of the newsletter. Quarry Summits NCAA and NCDOT will be hosting three Quarry Summits over the next two months. If you are not familiar with the summits we had last year, they are an open house used to educate NCDOT about local materials produced at each quarry, product balance, alternate products, specialty products, communication, etc. They also included a tour of the quarry. This setting provides NCDOT and NCAA the opportunity to discuss current issues in an open forum. NCDOT personnel that attend are County Maintenance Engineers, Road Oil Supervisors, Resident Engineers, Bridge Maintenance Supervisors, and M&T field inspectors. This year s summits are: Thursday, April 23 Vulcan Materials Company s Rockingham Quarry Galestown Road NCDOT Divisions invited 6, 8, and parts of 10 Friday, May 8 Martin Marietta s Hickory Quarry th Avenue SE NCDOT Divisions invited 9, 10, 11, 12, and parts of 13 Thursday, May 14 Martin Marietta s Fountain Quarry Allen Gay Road NCDOT Divisions invited 1, 2, 4 The summits will begin at 9:30am and finish about 12:00. The Summits are open to all NCAA members - If you work with NCDOT personnel that will be attending one of these summits, please plan to attend. We need to know how many to expect at each summit, so please RSVP for the summit you plan to attend. Please contact the Association office if you have any questions. Annual Convention The DEADLINE for registering to attend the convention and making your room reservation is Friday, MAY 8, Based upon the reservations made to date, we anticipate a record number of attendees. Because of the increased attendance, our room block is oversold. However, The Greenbrier has agreed to honor our room rate on a space available basis. DON T WAIT if you have not already made your hotel reservation, PLEASE CALL TODAY to reserve your room by calling (855) and reference NC Aggregates Association. To register for the convention, please CLICK HERE to download the 2015 Annual Convention Registration Brochure. The registration form is on page 21. The Convention Committee has lined up a great program for you. Wednesday Welcome Reception sponsored by 41 of our Associate Members You won t need to make dinner reservations. This three hour Reception, will include heavy hors d oeuvres, carving stations, an open bar and a Falconry Demonstration Thursday General Session with NSSGA President & CEO, Michael Johnson, Matt Korn, Fisher & Phillips, LLP and Wells Fargo Economist, Mark Vitner. Golf Tournament on the Meadows Golf Course President s Reception & Recognition of Past Presidents Surf & Turf Dinner Dance with music by THE EMBERS featuring Craig Woolard Friday Celebration Breakfast with Mentalist/Magician Dick Steiner and door prizes galore Page 5 March / April 2015

6 Welcome Reception Sponsors Carolina CAT LiftOne Pinnacle Cranes Page 6 March / April 2015

7 Welcome Reception Sponsors Page 7 March / April 2015

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10 Carolina CAT LiftOne Pinnacle Cranes Page 10 March / April 2015

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