Construction Legislative Week in Review
www.agc.org April 22, 2010
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On the Inside
FEDERAL
House Chairman Introduces Legislation to Expand Clean Water Act Jurisdiction
TRANSPORTATION
Transportation Fuels Fee in Limbo in Senate Climate Bill
BUILDING
Federal Government Seeks to Reform Wall Street
LABOR
Workplace Safety a Focus of Congressional Committees Next Week
Talks Continue on Comprehensive Immigration Reform
TAX
Busy Tax Agenda Begins to Take Shape
Democrats Consider Payroll Tax Increase on “S Corporation” Income
HEALTH CARE
Webinar - What Impact Will the New Health Care Law Have on Construction Employers?
FEDERAL
House Chairman Introduces Legislation to Expand Clean Water Act Jurisdiction
 

U.S. House of Representatives Committee on Transportation and Infrastructure Chairman Jim Oberstar (D-Minn.) Wednesday introduced the “America’s Commitment to Clean Water Act” (H.R. 5088) to “clarify” federal jurisdiction over waters and wetlands under the Clean Water Act.  The bill would remove the term “navigable” from the Act and replace it with the phrase “waters of the United States.” 

The bill is a revision to previously-introduced legislation, the “Clean Water Restoration Act.”  Oberstar said during a press conference Wednesday that the legislation would ensure that the Clean Water Act covers the same waters it did prior to two U.S. Supreme Court rulings in 2001 and 2006, which placed limits on the reach of federal jurisdiction regulatory agencies were asserting at that time.

AGC, along with the broad-based Waters Advocacy Coalition (WAC), has opposed the “Clean Water Restoration Act” and is concerned that the new proposal does not address concerns that the legislation would subject all waters and wet areas, however remote or intermittent, to federal regulations and permitting under the Clean Water Act and delay the construction of buildings and infrastructure nationwide. 

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

TRANSPORTATION
Transportation Fuels Fee in Limbo in Senate Climate Bill
 

As AGC and other stakeholders place a full court press on the U.S. Senate to include any revenue from additional fees on transportation motor fuels into the Highway Trust Fund, the Senators drafting the bill seem to be backing away from any fees that could be viewed as a gas tax. 

The bill is tentatively set to be introduced Monday, April 26, and among other controversial issues yet to be resolved is a so-called “linked-fee” on motor fuels.  This fee would likely increase the federal gas tax by approximately 15 cents per gallon without dedicating the revenues from the fee to the Highway Trust Fund.  AGC continues to work with key Senators to gain support for dedicating any revenues from an increased fee on motor fuels to the Highway Trust Fund. 

Use AGC’s Legislative Action Center to communicate on this issue with your Senators.

For more information, contact Sean O’Neill at (202) 547-8892 or oneills@agc.org. Return to Top

BUILDING
Federal Government Seeks to Reform Wall Street
 

Following passage of the health care bill, President Obama and congressional Democrats now seek to reform the country's financial sphere with a financial overhaul bill.  The 1,336-page bill includes key provisions that would negatively impact commercial real estate, such as risk-retention provisions, regulation of over-the-counter (OTC) derivatives, and new reporting requirements for real estate investors.

A March 25 letter, signed by AGC and more than 20 other organizations, to Senate Banking Committee Chairman Christopher Dodd (D-Conn.) and Richard Shelby (R-Ala.) urged the Senators to re-think the bill's current language regarding securitization, new accounting standards, and new regulatory capital guidelines.  The letter states that these provisions "create tremendous uncertainty and impact credit availability."

For more information, contact Mike Stark at (703) 837-5365 or starkm@agc.org. Return to Top

LABOR
Workplace Safety a Focus of Congressional Committees Next Week
 

Next week, the Senate Health, Education, Labor, and Pension (HELP) Committee and the House Education and Labor Committee will hold hearings on workplace safety. 

The HELP Committee is focusing particularly on mine safety in response to the recent accident in West Virginia.  The House will focus on the portions of the Protecting America’s Workers Act that cover whistleblower and victims’ rights provisions.  AGC is closely watching these issues and the impact the passage of any legislation will have on the construction industry.

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

Talks Continue on Comprehensive Immigration Reform
 

This week both Speaker Pelosi and Senate Majority Leader Reid said that they would like to see comprehensive immigration reform taken up in 2010. The two main Senators working on the development of such a bill, Senator Schumer (D-N.Y.) and Senator Graham (R-S.C.), continue to meet with each other as well as those groups affected by such legislation.  

AGC remains in the discussions and continues to promote workable reform, which would include reasonable employer enforcement as well as a new visa program that would create a system to supply the U.S. economy with the workers it needs as the country begins to recover from the downturn and grow in the years ahead. 

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

TAX
Busy Tax Agenda Begins to Take Shape
 

House and Senate tax writing panels are working to deal with a number of outstanding tax issues facing Congress in 2010.

First, despite each chamber having passed its own version of the annual “tax extenders” package that would extend for one year roughly $30 billion in tax provisions that expired on January 1, the House and Senate remain unable to reach an agreement on how to offset the cost of the legislation.  The tax extenders bill includes extensions of tax incentives useful to construction, including the 15-year shortened cost recovery period for restaurant improvements and new construction, leasehold and retail improvements, and a short-line rehabilitation tax credit.

Second, the Senate Finance Committee is considering how to move forward on a small business tax relief and infrastructure bill the House passed in late March that includes, among other things, an extension of the successful Build America Bonds program into 2013.  In addition, the Senate may add an extension of 50 percent bonus depreciation from the Recovery Act, along with the an extension of enhanced section 179 expensing that is included in the House-passed bill.  Depending on whether sufficient offsets can be found, leadership in both chambers have expressed interest in resolving these two measures prior to Memorial Day.

Finally, the House and Senate are working on ways to address the lapsed estate tax and the expiration of the 2001 and 2003 tax cuts at the end of 2010.  The House passed legislation in December that would have extended the 2009 estate tax rate of 45 percent with an exemption of up to $3.5 million per spouse.  However, a bipartisan group of Senators is trying to lower the rate to 35 percent and increase the exemption to $5 million per spouse and is seeking a vote this spring on their proposal.  If no action is taken in Congress, the estate tax will be reinstated at a 55 percent top rate and $1 million exemption level. 

The Senate Budget Committee this week took initial steps towards continuing the 2001 and 2003 tax cuts for the middle classes.  In its fiscal year 2011 budget resolution, the committee included a permanent extension of current policy for couples with incomes below $250,000 and singles with incomes below $200,000.  The resolution calls for allowing the current 35 percent tax bracket to increase to 39.6 percent on January 1, 2011, and the 33 percent bracket to bump up to 36 percent. 

The resolution also contains reconciliation instructions that could allow the Senate to pass tax legislation with a simple majority, rather than by overcoming a 60-vote threshold needed to end a filibuster. 

AGC is monitoring developments on these important pieces of legislation.  AGC supports lowering the federal burden on individuals, construction companies, and other business as a means of promoting investment, business development and business expansion.

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

Democrats Consider Payroll Tax Increase on “S Corporation” Income
 

House and Senate Democrats are considering whether to subject income earned by shareholders of S corporations engaged in service businesses to payroll taxes in an effort to raise revenue to pay for the annual tax extenders bill or other tax legislation this year. 

S corporation income is not directly taxed.  Instead, S corporation earnings “flow through” to shareholders who are taxed at the individual level as ordinary income.  S corporation shareholders who are active in their business, however, pay themselves a salary, on which they pay self-employment taxes that go towards Social Security and Medicare like traditional employee payroll taxes.

Applying payroll taxes to certain S corporation profits could raise anywhere from $10 to $15 billion.  Roughly $30 billion is needed to offset the cost of the annual tax extenders bill, which would extend for one year certain expired tax provisions, such as the research and development tax credit and the 15-year shorted cost recovery period for retail, restaurant, and leasehold improvements. 

Critics of the proposal argue that it would violate the long-standing principle that payroll taxes be applied solely to wages received for labor, not capital income.  However, the recently-enacted health care bill applied a 3.8 percent Medicare payroll tax to unearned income, including that earned by passive shareholders in S corporations.  Moreover, the proposal is inconsistent with the health law which exempted S corporation income earned by active shareholders.

AGC is a member of The S Corporation Association of America and will oppose this proposal.

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

HEALTH CARE
Webinar - What Impact Will the New Health Care Law Have on Construction Employers?
Save the Date: May 6, 2010 at 1:00 EDT
 

Free for AGC Members and Chapters, this AGC webinar will detail the recently enacted health care bill and the sweeping changes to the delivery of health care in the United States. Focusing on the impact on employers in the construction industry as well as their responsibilities and requirements to offer health care benefits to their employees, AGC has partnered with a prestigious law firm experienced in this matter to analyze the impact of the bill on construction employers and suggest preparations that employers should begin implementing to comply with the new law.

Plus, AGC’s chief economist Ken Simonson will close out the event with a preview of the impact the legislation will have on the demand for future health care construction.

The webinar will cover the following:

  • new employer responsibility requirements
  • new insurance reforms
  • impact of tax changes
  • wellness programs
  • impact on collectively bargained employees
  • impact on future health care construction

Registration:
AGC Members:  FREE
Non-Member:  $79

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

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