Building Bridges To Our Future Ward Nye Chairman of the Board, NSSGA President and CEO, Martin Marietta Materials Texas Aggregates and Concrete Association 2013 Annual Meeting June 26, 2013
Bridging Challenging Times Gauge of Planned US Construction Activity Hits Five-Year High Vital Signs Chart: Government Cuts Slow Economy
NSSGA Mission Advancing the interests of the aggregates industry before the federal government, to achieve ever-safer and more healthful workplaces for those in the industry, to support sustainable communities through economic productivity, environmental stewardship and the social contract of tending to the welfare of aggregates workers, their families and their communities.
Highway Bill Is Core Current bill expires in less than a year and a half Clock is ticking time will pass quickly Absent congressional action, the Highway Trust Fund will be depleted in 2015 Goal this year is to help promote action to fill the current funding gap Must ensure sustainable funding for the nation s surface transportation system
Legislative Update: MAP-21 Moving Ahead for Progress in the 21 st Century Expires September 30, 2014 Contains historic program and policy reforms Implementation rulemaking underway
MAP-21 Highway Investment Annual Federal Highway Investment SAFETEA-LU Extensions MAP-21 Billions of dollars $43.0 $41.0 $39.0 $37.0 $35.0 $36.0 $39.1 $40.2 $40.7 $41.1 $41.1 $39.1 $39.7 $40.3 $33.0 $31.0 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14
Transportation s Fiscal Cliff
Legislative Update Looming Highway Trust Fund insolvency Options: Drastic investment cuts More General Fund infusions New revenues
Highway Trust Fund Projections Based on CBO Score of MAP-21 (June 2012) Highway Account Fiscal Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Beginning-of-year balance $ 14 $ 8 $ 4 $ 4 $ (6) $ (15) $ (24) $ (33) $ (42) $ (52) $ (62) Revenue and interest 33 33 33 34 35 36 36 36 36 37 37 Intra-governmental transfers 2 6 10 0 0 0 0 0 0 0 0 Outlays 42 43 44 44 44 45 45 46 46 47 47 End-of-year balance $ 8 $ 4 $ 4 $ (6) $ (15) $ (24) $ (33) $ (42) $ (52) $ (62) $ (72) Mass Transit Account Fiscal Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Beginning-of-year balance $ 7 $ 5 $ 5 $ 1 $ (3) $ (7) $ (12) $ (16) $ (20) $ (24) $ (29) Revenue and interest 5 5 5 5 5 5 5 5 5 5 5 Intra-governmental transfers 0 0 2 0 0 0 0 0 0 0 0 Outlays 7 8 8 9 10 10 10 9 9 10 10 End-of-year balance $ 5 $ 5 $ 1 $ (3) $ (7) $ (12) $ (16) $ (20) $ (24) $ (29) $ (33) Total HTF Balance $ 13 $ 9 $ 15 $ (9) $ (22) $ (36) $ (49) $ (62) $ (76) $ (91) $ (105) ($ billions) Total HTF Balance
Estimation of Federal Highway and Transit Obligations Through 2022 $45.0 $40.0 $35.0 $40.7 $41.2 $40.8 $38.9 $39.4 $40.0 $34.7 $35.4 $36.1 $36.8 $37.5 $38.3 $39.1 $30.0 $25.0 $20.0 $15.0 $10.0 $5.0 $11.9 $11.3 $11.6 $11.7 $11.8 $9.4 $4.2 $1.3 $3.5 $1.3 $1.3 $1.3 $1.2 $1.2 $1.3 $6.3 $6.4 $8.6 $9.2 $9.3 $9.5 $9.6 $1.3 $1.3 $1.3 $1.4 $1.4 $1.4 $1.4 $0.0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Federal-aid Highway Highway Safety Transit Based on MAP-21 Assuming minimum prudent balance of $4 billion in Highway Account and $1 billion in Mass Transit Account Assumes historical General Fund appropriations for transit
Surface Transportation Funding Options Matrix (all revenue estimates in $ millions) Mechanism Yield Current Illustrative Revenues Avg Revenues Total Revenues Funding Mechanisms (2012) Rate Rate 2011 2012-2017 2012-2017 Diesel Tax Increase 1 /gal = $ 386 $ 394 24.4 /gal 15.0 $ 5,786 $ 6,226 $ 37,356 Diesel Tax Indexing Transportation interests have provided lawmakers N/A with $ myriad - $ 585 funding $ 3,512 Gas Tax Increase 1 /gal = $ 1,327 $ 1,322 18.4 /gal 10.0 $ 13,272 $ 13,303 $ 79,818 Gas Tax Indexing options N/A $ - $ 1,370 $ 8,218 Truck/Trailer Sales Tax Increase 1% of Sales = $ 162 $ 233 N/A 5.0% $ 812 $ 1,359 $ 8,152 Truck Tire Tax Increase 100% Increase = $ 346 $ 434 N/A 10.0% $ 35 $ 45 $ 270 HVUT Increase Short term, two federal transportation 100% Increase = $ 944 $ commissions, 1,156 N/A 15.0% the $ 142Deficit $ 141 $ 844 Annual Drivers License Surcharge $1.00 Surcharge = $ 214 $ 217 N/A $5.00 $ 1,072 $ 1,116 $ 6,694 Annual Highway Commission Miles Traveled Fee (All and Light Duty the Vehicles)* U.S. Chamber 1 /VMT = $ of 6,499Commerce $ 6,566 N/A 2.0 endorsed $ 12,998 $ an 13,475 increase $ 80,851 Annual Highway Miles Traveled Fee (All Trucks)* 1 /VMT = $ 908 $ 917 N/A 3.0 $ 2,723 $ 2,823 $ 16,936 in the gas user fee Annual Registration Fee (Light Duty Vehicles) $1.00 Fee = $ 248 $ 252 N/A $10.00 $ 2,482 $ 2,614 $ 15,682 Annual Registration Fee (Trucks) $1.00 Fee = $ 9 $ 9 N/A $15.00 $ 129 $ 131 $ 787 Container Tax $1 per TCU= $ 391 $ 401 N/A $15.00 $ 5,866 $ 6,401 $ 38,408 Dedicated Income Long Tax - term, Business both federal transportation 0.1% of current taxes = $ 198 $ commissions 329 N/A 1.0% endorsed $ 1,984 $ 4,291 the $ 25,745 Dedicated Income Tax - Personal 0.1% of current taxes = $ 956 $ 1,141 N/A 1.0% $ 9,560 $ 15,429 $ 92,576 vehicle-miles-traveled user fee to fund the program Harbor Maintenance Tax 0.1% Tax = $ 1,236 $ 1,267 N/A 0.5% $ 6,181 $ 6,745 $ 40,472 Imported Oil Tax $1.00/Bbls = $ 3,528 $ 3,528 N/A $1.00 $ 3,528 $ 3,528 $ 21,171 Sales Tax on Auto-related Parts & Services 1.0% of Sales = $ 2,327 $ 2,404 1.0% $ 2,327 $ 2,613 $ 15,680 Sales Tax on Federal Diesel lawmakers need to look 1.0% of Sales to = $ the 850 $ states 852 N/Aand 10.6% methods $ 9,013 $ they 10,862are $ 65,172 Sales Tax on Gas 1.0% of Sales = $ 3,347 $ 3,441 N/A 8.4% $ 28,112 $ 34,108 $ 204,647 using to raise additional transportation funds Sales Tax on New and Used Light Duty Vehicles 1.0% of Sales = $ 2,619 $ 2,619 N/A 1.0% $ 2,619 $ 2,619 $ 15,715 Sales Tax on New Light Duty Vehicles 1.0% of Sales = $ 1,625 $ 1,625 N/A 1.0% $ 1,625 $ 1,625 $ 9,752 Share of US Customs Revenues 1% of Receipts = $ 277 $ 298 N/A 1.0% $ 277 $ 360 $ 2,161 Tire Tax on No Light Duty single Vehicles funding option is likely $1.00 Fee = to $ be 1,862 a $ 1,889 panacea N/A $3.00 $ 5,585 $ 5,881 $ 35,284 Ton Freight Charge -- All Modes 1 /ton = $ 164 $ 169 N/A 25.0 $ 4,111 $ 4,565 $ 27,389 Ton Freight Charge -- Truck Only 1 /ton = $ 113 $ 117 N/A 25.0 $ 2,835 $ 3,148 $ 18,890 Ton-Mile Freight It is Charge time -- All Modes for Congress to do their 1 /ton-mile = job $ 43,497 and $ 44,802 make N/A the 0.5 tough $ 21,748 decisions $ 24,150 $ 144,898 Ton-Mile Freight Charge -- Truck Only 1 /ton-mile = $ 12,731 $ 13,113 N/A 0.5 $ 6,365 $ 7,068 $ 42,409 US Freight Bill they -- All Modes were elected to make 1% of Sales = $ 7,612 $ 7,840 N/A 1.0% $ 7,612 $ 8,452 $ 50,713 US Freight Bill -- Truck Only 1% of Sales = $ 6,608 $ 6,807 N/A 1.0% $ 6,608 $ 7,338 $ 44,028 *VMT fee estimates refer to miles traveled on Interstate System. Shading indicates funding options rated as "strong" by the National Surface Transportation Financing Commission
Safety Will Continue To Be #1 Priority As an industry, we need to have the highest degree of commitment to employee safety and health It s unquestionably the right thing to do, but it s good business as well
U.S. Aggregates Operations Dollars Assessed vs. Injury Incidence Rates $25 4.14 4.5 Dollars Assessed $20 $15 $10 $5 $7.8 3.82 3.58 3.54 3.47 3.41 3.12 Total dollars assessed by MSHA (in millions) Total injury incidence rates (per 200,000 hours) $7.0 $6.9 $7.4 $6.3 $5.3 $5.5 2.86 $11.3 $17.9 2.62 $17.4 2.46 $20.4 $17.0 $16.2 2.33 2.27 2.22 4.0 3.5 3.0 2.5 2.0 1.5 1.0 Injury Incidence Rate 0.5 $0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 0.0
MSHA Regulatory Agenda: Major Rules Pattern of violations Civil penalty reform Mine identification Crystalline silica
POV Rule: NSSGA Litigation with NMA and PCA Case being heard in 6 th Circuit Court of Appeals Briefs will be filed in June 2013 Oral arguments expected in early 2014 MSHA should follow the letter and spirit of the Mine Act Current rule allows agency to violate operator s due process rights
Minerals Definition: The Facts
Minerals Definition: The Challenge
Minerals Definition: Competing Solutions Legislation Science Accurate definitions Reliable analytical methods Threshold level that is based on sound science
Environmental Issues NSSGA members work diligently to be good stewards of the environment However, NSSGA will challenge: Unattainable air and water standards Revocation of existing permits Regulations that go beyond the intent of the Clean Water Act and Clean Air Act
EPA Jurisdictional Guidance and Rule Regulate isolated ponds, wetlands, dry stream beds and ditches Complicate/slow CWA 404 permitting Goes far beyond court decisions Underestimates economic impacts NSSGA supports Senate and House bills/riders denying funding for this EPA action
Examples of Waters of the U.S.
Building Bridges to NSSGA s Constituencies State associations
Building Bridges to NSSGA s Constituencies State associations M & S
Building Bridges to NSSGA s Constituencies State associations M & S Like-minded associations
Building Bridges to NSSGA s Constituencies State associations M & S Like-minded associations Governors
Governor s Transportation Coalition Mission Build support for timely passage of a long-term, well-funded surface transportation program Create coalition of suppliers, contractors, highway users and safety groups to engage governors Unify the voices of key governors to deliver critical messages to Washington Purpose Raise the alarm for action now Use key governors to drive the debate in Washington Coordinate state activities to pressure Congress
Governor s Transportation Coalition Approach Engage former Governor Ed Schafer as Chairman Enlist leading Democratic and Republican governors as co-chairs Recruit small Advisory Board to leverage private sector efforts Develop and implement aggressive public affairs campaign to engage key governors Leverage support with key members of Congress, the Administration and the media
Governor s Transportation Coalition Key activities Recruit and engage leadership and key governors Launch countdown clock number of days to Highway Trust Fund bankruptcy at summer NGA meeting Meet with governors in state action events across the country Engage state media Impact gubernatorial races 2013: NJ and VA 2014: 36 states Promote model state solutions (MD, VA) Enlist gubernatorial support for federal legislation
NSSGA s New President and CEO Mike Johnson assumes position August 1 Succeeds R.A. Gus Edwards, retiring after 16 years Currently EVP and Chief Advocacy Officer for National Beer Wholesalers Association Instrumental in developing and advocating their strategic, membershipfocused agenda Achieved public policy objectives and reinvigorated membership programs Familiar with construction industry from five years with National Association of Home Builders Named Leading Association Lobbyist in 2012 and a Young and Aspiring Association Executive in 2007 Bachelor s degree in political science and journalism from University of Kentucky in Lexington
Building Bridges To Our Future