Construction Legislative Week in Review
www.agc.orgNovember 19, 2009
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On the Inside
HEALTH CARE
Senate Introduces Health Care Bill, Democrats Look For 60 Votes
TRANSPORTATION
Senate Chairs Push Six Month Highway Extension
TCC Calls For Reauthorization Now
AGC Pushes for Increased Transportation Funding in Jobs Package
TAXES
Estate Tax Extension in Flux
HEALTH & SAFETY
Senate Health, Education, Labor and Pensions Committee Approves Nominee for Assistant Secretary for OSHA Without Public Hearing
FEDERAL
Congress Begins Work on Water Resources Development Act for 2010
AGC Meets with Government Accountability Office on Recovery Act Progress
The Davis-Bacon and Related Acts: The Ins and Outs of Federal Prevailing Wage Law
 
HEALTH CARE
Senate Introduces Health Care Bill, Democrats Look For 60 Votes
 

On November 18, Senate Majority Leader Harry Reid (D-Nev.) finally released a health care reform bill, the Patient Protection and Affordable Care Act. The bill is the result of merging and modifying two Senate committee drafts, as well as adding new taxes. The Congressional Budget Office (CBO) cost estimate of the bill is $849 billion over the next ten years. The bill’s initial cost is less than the House passed bill and President Obama’s target of $900 billion. The bill is paid for by increasing Medicare taxes and taxing high cost health care plans.

The bill would allow states to opt-out of a government run public health insurance plan, require Americans to have health coverage or pay a penalty, and require employers with 50 or more employees to pay a penalty for each employee who received government subsidies to purchase coverage through the exchange.

The largest revenue raiser is the tax on high-cost health insurance plans. Plans with yearly premiums of $8,500 for individuals and $23,000  for families would be subjected to a 40 percent excise tax, which is higher than previous Senate drafts. The increased Medicare payroll taxes would raise $54 billion over the next decade by increasing the rate from 1.45 to 1.95 percent on individuals earning $200,000 a year and joint filers earning $250,000 a year. The individual mandate would begin in 2014 and start at $95 per year for each American without coverage and would rise to $750 each year in 2016. 

The bill includes insurance reforms that would prohibit health insurance companies from canceling policies after an individual becomes sick. There would be no lifetime or annual limits on coverage. The plan would help Medicare recipients afford coverage and would assist in paying for prescription drugs.

It is expected that the Senate will begin debate on Saturday by holding their first procedural vote on the bill where it must get 60 votes. If it passes as expected, the Senate would continue to debate the bill and begin voting on amendments after Thanksgiving, holding a final vote in December. Next, the bill will be conferenced with the House bill, which is expected to occur in January before the State of the Union Address.

Many of the procedural votes and eventually the amendments and final passage will require 60 votes. Currently, Democratic holdouts appear to be Senators Ben Nelson (Neb.), Mary Landrieu (La.) and Blanche Lincoln (Ark).  It is expected that they will support the first set of procedural hurdles.

AGC opposed the House bill because it included an employer mandate, created a public option that will compete with private insurance, mandated benefits for all employees, did not curtail either federal/state costs for Medicare and Medicaid nor reduced private insurance premiums, did not curtail medical malpractice costs and included a significant surtax on high income earners that will be particularly harsh on companies organized as subchapter S corporations.  AGC is currently analyzing the Senate’s 2,000 page bill, its impact on the construction industry and how it could be altered to reduce costs and make coverage more affordable.

For more information, contact Jim Young at (202) 547-0133 or youngj@agc.org. Return to Top

TRANSPORTATION
Senate Chairs Push Six Month Highway Extension
 

A bipartisan group of seven Senate Committee Chairs and Ranking Members sent a letter on Tuesday to Majority Leader Harry Reid and Minority Leader Mitch McConnell urging leadership to file cloture to move forward on a 6-month extension of the surface transportation bill to spur job creation and an economic recovery. A cloture motion is necessary because several Republican senators object to the bill on budgetary concerns and will not allow an extension to be considered by the Senate without a cloture vote.

The Senate and the House have been at a standoff concerning how to proceed with reauthorization of the highway and transit programs. Until recently, Senate transportation leaders were supporting an 18-month delay, while the House passed a three-month extension with the intent of keeping pressure on for enactment of a six-year measure. The Senate leaders now support a six-month extension to ensure that the program does not flounder while discussions proceed on a longer term bill. The programs have been operating under the terms of two short term extensions that were included in a Continuing Resolution that expires on December 18. The bipartisan letter pointed out that short term extensions mean less money is available for states, and do not provide states the certainty they need to keep crucial transportation projects moving forward.

The letter was signed by Senator Barbara Boxer (D-Calif.), Chairman of the Committee on Environment and Public Works, Senator James Inhofe (R-Okla.), Ranking Member, Senator Chris Dodd (D-Conn.), Chairman of the Committee on Banking, Housing and Urban Affairs, Senator Richard Shelby (R-Ala.), Ranking Member, Senator John Rockefeller (D-W.V.), Chairman of the Committee on Commerce, Science and Transportation, Senator Kay Bailey Hutchinson (R-Texas), Ranking Member, and Senator Max Baucus (D-Mont.), Chairman of the Committee on Finance.

For more information, contact Brian Deery at (703) 837-5319 or deeryb@agc.org. Return to Top

TCC Calls For Reauthorization Now
 

The AGC Co-chaired Transportation Construction Coalition (TCC) continues efforts to urge Congress to work towards enactment of a multi-year transportation bill with significantly increased funding to address the nation’s long term and immediate economic problems.

The TCC last week released a national survey of transportation contractors that reinforced the many challenges facing the U.S. transportation construction industry and the need for increased federal investment. TCC member organizations are now working on getting state business groups to sign onto a letter that will go to each state’s Congressional delegation urging enactment of a well-funded, long-term bill. In addition, a phone-in day is being organized to continue to keep the pressure on the Congress.

News of the survey was covered by Pittsburgh Post-Gazette, CQ Today and the Denver Daily News, to name a few.  AGC of North Dakota's executive vice president, Russ Hanson, discussed the results on the local NBC news station.

For more information, contact Brian Deery at (703) 837-5319 or deeryb@agc.org. Return to Top

AGC Pushes for Increased Transportation Funding in Jobs Package
 

With construction unemployment at more than 18 percent, AGC has aggressively lobbied for increased infrastructure funding and policy provisions to stimulate demand for private- and public-sector construction.

In today’sThe Hill newspaper, AGC’s Jeff Shoaf, senior executive director for government affairs, said that more money for the Transportation Investment Generating Economic Recovery Program (TIGER) is needed, since there was $57 billion worth of requests and only $1.5 billion available from the stimulus plan.

In addition, AGC is meeting with Congressional leaders to push for increased water infrastructure investment, increased use of tax cuts to incentivize private building construction, and discuss the delay in programmatic changes that held up some funding under the Recovery Act earlier this year.

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

TAXES
Estate Tax Extension in Flux
 

House Democratic Leadership and the Ways and Means Committee are discussing plans for advancing estate tax legislation this year.  At issue is whether to extend the current tax rate and exemption level for one-year or enact a permanent fix.  The current estate tax rate is 45 percent with an exemption level of $3.5 million for individuals and $7 million for couples.  If Congress does not act, the rate and exemption level will fall to zero in 2010, only to jump up to a 55 percent and $1 million, respectively, in 2011.

Some rank and file committee Democrats favor a one-year extension of the current tax rate and exemption level while promising to address a permanent solution within the context of possible tax reform legislation in 2010.  However, House Democratic Leadership, moderate Democrats and Republicans favor enacting a permanent solution in 2009.  And, among those advocating for a permanent solution, there is considerable support for lowering the tax rate to 35 percent and raising the exemption level to $5 million for individuals and $10 million for couples.  In April, the Senate approved an amendment supporting the lower rate and higher exemption levels in the context of the fiscal year 2010 budget resolution.

The cost of the making the estate tax permanent versus a one-year extension is also an issue.  A one-year extension would raise about $1 billion in revenue, whereas making permanent the current levels would cost $256 billion over 10 years. 

AGC supports a permanent solution to the estate tax to provide AGC members more certainty in their tax planning.  In a letter to Capitol Hill, AGC signaled support for efforts to lower the estate tax rate and exemption levels.

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

HEALTH & SAFETY
Senate Health, Education, Labor and Pensions Committee Approves Nominee for Assistant Secretary for OSHA Without Public Hearing
 

On Wednesday, the Senate Health, Education, Labor and Pensions (HELP) Committee voted to move forward the nominee for Assistant Secretary of the Occupational Safety and Health Administration (OSHA).  Professor David Michaels of the George Washington University School of Public Health nomination now awaits a vote on the Senate floor.  There has been no opportunity for a hearing that would allow the Senate as well as the public to learn more about the approach Professor Michaels will take at OSHA. 

AGC was strongly disappointed that the nominee was not subject to a hearing by the HELP Committee to thoroughly explore the views that Professor Michaels has on OSHA and how he intends to direct the agency in his expected position.  AGC, along with other groups, sent a letter to the Chairman and the Ranking Member of the HELP Committee asking for a hearing to further explore his views on the role of compliance assistance as a tool for work place safety, as well as the approach he plans to take on enforcement measures.  In addition, the letter noted that OSHA nominees have traditionally had to appear at a hearing to answer questions.   This runs counter to the Obama Administration policy of openness and transparency .

At this time, it is unclear when the Senate will schedule floor time for a vote on Professor Michaels.  AGC will continue to follow this nomination process.

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

FEDERAL
Congress Begins Work on Water Resources Development Act for 2010
 

The Water Resources and Environment Subcommittee of the House Transportation and Infrastructure Committee held a hearing on November 18 to receive testimony from Members of Congress on issues and proposals for consideration of a Water Resources Development Act of 2010, which authorizes infrastructure projects from the Army Corps of Engineers. AGC laid out its priorities for a WRDA 2010 in a letter sent to all Members of the full Transportation and Infrastructure Committee.

The first step in a Corps water resources development project is a study on the feasibility of the project. If the Corps has conducted a study in the area before, a new study can be authorized by a resolution by either the House Transportation and Infrastructure Committee or the Senate Environment and Public Works Committee. If the area has not been previously studied by the Corps, then an Act of Congress is necessary to authorize the study. The majority of studies are authorized by Committee resolution. After a feasibility study is completed, the results and recommendations of the study are submitted to Congress, usually in the form of a report of the Chief of Engineers. If such results and recommendations are favorable, the next step is authorization. Project authorizations are contained in water resources development acts, which are traditionally enacted on a biennial schedule. After a project is authorized, it would still require an appropriation of Federal funds to proceed to construction.

A key issue AGC has raised over the past several years was discussed during the hearing yesterday when Rep. Charles Boustany, Jr. (R-La.) strongly advocated the need to firewall user fees collected from the Harbor Maintenance Tax and ensure 100 percent of the funds are spent for the purpose of funding dredging projects. In 2008, less than half the funds collected were spent out of the Harbor Maintenance Trust Fund.

House members have until Dec. 3 to submit their projects to the committee for consideration in the bill.

AGC will continue to press for passage of a WRDA 2010 bill during the 111th Congress.

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

AGC Meets with Government Accountability Office on Recovery Act Progress
 

AGC met with officials from the Government Accountability Office (GAO) on November 18 to discuss AGC’s position on the implementation of the American Reinvestment and Recovery Act (ARRA).  The GAO was asked by Senate leaders to review whether any new federal requirements affected the selection or start of some ARRA projects.

The agency also was interested in determining the effects of the reporting requirements and the new Buy American provisions and how those requirements may affect the selection or start of certain projects. AGC shared some concerns over the reporting requirements and how the additional oversight had caused some confusion for both new and experienced federal contractors. AGC explained its experiences with the new Buy American requirements and how those rules have challenged the EPA-funded State Revolving Fund programs, and expressed concern over the rising construction unemployment in the U.S. and its effect on the industry.

The meeting gave AGC an opportunity to inform GAO about the practical, and negative, effect of government-mandated project labor agreements, particularly on ARRA projects.  For example, the GAO now understands the problems of having contracting officers with little construction expertise negotiate GMLA’s and the impact a mandated agreement may have on the cost of an ARRA project.

The GAO is expected to deliver a final report  to Congress in late February, 2010.

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

The Davis-Bacon and Related Acts: The Ins and Outs of Federal Prevailing Wage Law
December 3, 2009 | December 8, 2009 | December 10, 2009, 2:00 PM - 3:30 PM ET
 

With the downturn in the availability of commercial work, many construction contractors are bidding on federal and federally-assisted work, and having to comply with the Davis Bacon and Related Acts for the first time. The application of the Davis-Bacon and Related Acts to all projects funded under the stimulus is leaving many contractors uncertain about the requirements of federal prevailing wage laws and the consequences of non-compliance.

Industry experts, including the head of enforcement for the U.S. Department of Labor’s Wage & Hour Division (WHD) and the head of the Davis-Bacon Wage Determinations division of WHD, will provide the information necessary to understand the specific requirements of the Davis-Bacon and Related Acts in a contractor-friendly manner. 

  • December 3: Introduction to the Davis Bacon Act and Wage Determinations
  • December 8: Compliance Principles
  • December 10: Reporting Requirements & Enforcement

Register today at www.agc.org/DBWebinar.  Please see this webinar flyer for more information. Return to Top

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