Contruction Legislative Week in Review
www.agc.orgMarch 26, 2009
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On the Inside
CARD CHECK
Two Developments on “So-Called” Employee Free Choice Act (EFCA)
AGC Hosts Card Check Events in North Carolina
STIMULUS
Lobbying on Infrastructure Projects Restricted
WATER INFRASTRUCTURE
EPA Releases Updated Drinking Water Needs Assessment to Congress
SMALL BUSINESS
House Small Business Committee Hearing Underscores AGC’s Concerns Over HUBZone Program
AGC Testifies on DOT Disadvantaged Business Enterprise Program
BUDGET
House and Senate Committees Work on FY 2010 Federal Budget, Include AGC-Supported Transportation Funding
 
CARD CHECK
Two Developments on “So-Called” Employee Free Choice Act (EFCA)
 

On March 24, Senator Arlen Specter (R-Pa.) announced that he would not support EFCA, otherwise known as card check, when it is taken up in the Senate.  This is notable, as Senator Specter was the lone Senate Republican to vote for the bill last Congress.  Supporters of EFCA were counting on Senator Specter to vote in favor of the measure again this year as they needed at least one Republican to defeat a filibuster.   Senator Specter said he believes that changes need to be made to the labor law and he wants to develop legislation to address some of his concerns.  The Senator also expressed that he could reconsider his stance on EFCA should the economy improve or if changes were not made to the National Labor Relations Act.

Over the past weekend news reports covered a proposal developed by the CEOs of Starbucks, Costco and Whole Foods, or the “Starbucks proposal.”   These companies oppose card check and are also big supporters of Democrats in Congress.  The three companies have developed what they consider to be a third option, although it was criticized by both card check supporters and opponents.  No trade associations (including AGC) have come out in support of the principles.  Senate Minority Leader Mitch McConnell (R-Ky.) said that the proposal has “unified both labor and management in opposition.”  On the Democratic side, Senate Labor-HHS Appropriations Subcommittee Chairman Tom Harkin (D-Iowa) and House Education and Labor Chairman George Miller (D-Calif.) said in a joint statement that the "proposal is unacceptable.  It is nothing more than a classic Washington lobbying campaign intended to confuse the issues and disguise the real agenda of maintaining the status quo."

The real threat with either the “Starbucks proposal” or efforts by Senator Specter is not that they will become law but that it could be used as a "trojan horse" to obtain the 60 votes necessary to end a filibuster in the Senate.  Passage of the "compromise" in the Senate after a filibuster has been stopped would lead to a House-Senate conference with, presumably, the House-passed original card check bill.  The likely product of the conference would be the House-passed bill.  Thus, the "compromise" language would be ignored in order to pass the original card check bill.  AGC is making the case that there is no acceptable compromise on this issue. 

For more information, contact Kelly Knott at (202) 547-4685 or knottk@agc.org. Return to Top

AGC Hosts Card Check Events in North Carolina
 

AGC of America and Carolinas AGC hosted two events on March 25 in Greensboro and Charlotte, N.C., to explain how the proposed "Card Check" bill would take away a worker's right to a private vote and cause negative repercussions for union contractors as well.

Steve Gennett, president and CEO of Carolinas AGC, toured D.H. Griffin Company in Greensboro and an equipment repair shop in Charlotte, before delivering his remarks to the local media. Both events were widely covered, including local NBC, ABC and CBS affiliates, the Charlotte Observer and NPR. View coverage from WFMY and News 14.

For more information, contact Brian Turmail at (703) 837-5310 or turmailb@agc.org. Return to Top

STIMULUS
Lobbying on Infrastructure Projects Restricted
 

President Obama issued a memorandum March 20 that restricts communication between federal lobbyists and Departments and Agencies regarding the American Recovery and Reinvestment Act.  The memorandum states that an Executive Department or agency may not consider the view of lobbyists, meet or talk on the phone regarding “particular projects, applications, or applicants for funding under the Recovery Act” unless such views are in writing. In addition, the Department or Agency must post written comments from lobbyists to its Web site.

Lobbyists may communicate orally with a Department or Agency about general Recovery Act issues of they do not extend to particular projects and the Department or Agency reduces the date and time of contact, names of lobbyists and description of communication in writing. View the memorandum here

For more information, contact Jeff Shoaf at (202) 547-3350 or shoafj@agc.org. Return to Top

WATER INFRASTRUCTURE
EPA Releases Updated Drinking Water Needs Assessment to Congress
 

The U.S. Environmental Protection Agency (EPA) publicly released its fourth drinking water needs assessment today, identifying $334.8 billion needs for the 20-year period from January 2007 through December 2026. The purpose of the assessment is to document the 20-year capital investment needs of public water systems that are eligible to receive Drinking Water State Revolving Fund (DWSRF) funding and excludes capital projects related solely to dams, raw water reservoirs, future growth and fire protection.

With $200.8 billion in needs over the next 20 years, transmission and distribution projects represent the largest category as they account for most of the nation’s water infrastructure. Other categories of need include (in descending order): treatment, storage, source and “other.”

To obtain a full copy of the report, click here.

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

SMALL BUSINESS
House Small Business Committee Hearing Underscores AGC’s Concerns Over HUBZone Program
 

A new report by the Government Accountability Office (GAO) that validates the concerns of many AGC contractors was released at a Small Business Committee Hearing on oversight of the Small Business Administration and its programs. According to the report, available here, nineteen companies were improperly awarded nearly $30 million in DOD and HUD contracts that were supposed to go to small businesses in low-income neighborhoods. The GAO found these companies while reviewing a sample of participants of the Historically Underutilized Business Zone (or HUBZone) program. The GAO report goes further to say "there are likely hundreds and possibly thousands of firms" in the program that don't meet its requirements.

The GAO determined that lack of oversight and effective fraud-fighting measures contributed to the funds being directed to undeserving companies. A similar GAO report last July noted that the SBA conducted few site visits and only asked for supporting evidence of a firm's eligibility claims about one-third of the time. Because the SBA was slow to suspend or otherwise punish them, several ineligible firms continued to receive more than $7 million in government contracts, the GAO said.

Small Business Committee chairwoman, Rep. Nydia Velázquez (D-N.Y.), said she plans to urge the SBA to shut down the program until it can fix the problems. "When you starve an agency of resources and put in place the wrong people, this is the result: Fraud goes undetected and dishonest companies see skirting the rules as 'business as usual,'" said Rep. Velazquez. "You can't come to any other conclusion than this is a program that needs to be shut down."

The SBA generally agreed with the GAO's recommendations that urged stronger checks, unannounced site visits and stiffer punishment for companies found to be ineligible. SBA officials told the GAO they are attempting to make the program more efficient and to do a better job of preventing and detecting fraud and abuse.

AGC will continue to point out inconsistencies with the HUBZone program to Congressional leaders and advocate for reform of the program to better suit the realities of the construction industry.

For more information, please contact Marco Giamberardino at (703) 837-5325 or giamberm@agc.org. Return to Top

AGC Testifies on DOT Disadvantaged Business Enterprise Program
 

Amy Hall, president of Ebony Construction in Sylvania, Ohio testified today on the need for clarity in implementing regulations and the work AGC has done to develop industry standard guidance documents over the last three years.  The hearing was held in conjunction with the Transportation & Infrastructure Committee’s reauthorization of highway, transit and aviation programs.

Hall participated in a highway and transportation division taskforce that developed a guidance document on which AGC is seeking federal and state input and approval. AGC also recommended continued dialogue with the agency and interested parties on critical issues impacting the program. The hearing featured testimony from AGC members Katherine Cloonen, President of JK Steel Erectors in Bonfield, Ill., and Anthony Thompson, President and CEO of Kwame Building Group in St. Louis, Mo.

For more information, contact Jeff Shoaf at (202) 547-3350 or shoafj@agc.org. Return to Top

BUDGET
House and Senate Committees Work on FY 2010 Federal Budget, Include AGC-Supported Transportation Funding
 

House and Senate Budget Committees this week passed their respective budget resolutions providing a non-binding blueprint for FY 2010 federal spending and tax policy.  The House and Senate will consider the resolutions next week, with final passage votes expected by the weekend.  Although leaders in both chambers decided against using the budget resolution to “fast track” controversial legislation to address climate change, the House version proposes this tactic to expedite health care reform. 

Both resolutions provide for level funding for surface transportation programs, but provide room for more spending if sufficient resources are made available in subsequent legislation (i.e., SAFETEA-LU reauthorization).

The resolutions also follow President Obama’s proposals to extend the 2001 and 2003 Bush tax cuts for couples with incomes under $250,000 and singles under $200,000.  The resolutions also continue the estate tax parameters for 2009, with an exemption of $3.5 million ($7 million for a couple) indexed to inflation and a top rate of 45 percent.  Without this change, the estate tax is scheduled to phase out completely in 2010, only to be reinstated at a top rate of 55 percent and $1 million exemption in 2011. 

Transportation and Infrastructure Reserve Funds
The House budget resolution includes a “reserve fund” for surface transportation reauthorization that allows Congress to revise spending for surface transportation programs upward if Congress writes legislation that “establishes or maintains a solvent Highway Trust Fund over the period of fiscal years 2009 through 2015.”  The provision leaves open the option of a transfer of general fund revenues to the Highway Trust Fund, “as long as the transfer of Federal funds is fully offset.”

The Senate budget resolution includes a reserve fund for a broader array of infrastructure projects, including energy, water, and public housing.  It also allows for more spending on surface transportation if the “solvency of the Highway Trust Fund will be maintained for the length of the surface transportation authorization.” 

Both resolutions reject the Administration’s proposal to change the budgetary treatment of “contract authority,” which would have treated surface transportation programs like any other federal program.

Senate Estate Tax Amendment
During Senate consideration of the budget resolution next week, Senators Blanche Lincoln (D-Ark.) and Jon Kyl (R-Ariz.) are planning to offer an amendment that would provide greater estate tax relief.  The Senators’ amendment is expected to propose a top rate of 35 percent with an exemption of $5 million indexed to inflation.  AGC supports efforts to provide a permanent reduction in the estate tax.

Tax Increases for High-Income Individuals
Both resolutions follow President Obama’s proposal to increase taxes for higher-income individuals.  Since approximately two-thirds of construction firms are organized as subchapter S corporations and their taxes are paid on their shareholders’ individual tax returns, these tax hikes would be damaging to the construction industry. 

AGC opposes President Obama’s proposed tax hikes in the budget and his use of the budget resolution to push through controversial legislation such as health care reform and climate change.  To view more about AGC’s concerns and to voice your opinion to your Senators and Representatives, use AGC’s Legislative Action Center.

For more information, contact Karen Lapsevic at (202) 547-4733 or lapsevick@agc.org. Return to Top

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