Construction Legislative Week in Review
www.agc.org May 13, 2010
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On the Inside
CLIMATE CHANGE
Senators Unveil New Climate Change Bill
TRANSPORTATION
Senate Climate Bill Diverts Billions from Highway Trust Fund
Kansas Wins Transportation Funding
SAFETY
OSHA to Increase Penalties for Employers
OSHA to Partner with Local Building Inspectors to Increase Enforcement in Construction
WATER
New Drinking Water Reauthorization Increases Funding
FEDERAL
New Legislation Would Expand Federal Contractor Performance Database
ELECTIONS
Consequential Elections Ahead, Get Out the Vote!
AGC PAC Surpasses its Goal; Kicks off New Fundraising Campaign
CLIMATE CHANGE
Senators Unveil New Climate Change Bill
 

Senators John Kerry (D-Mass.) and Joe Lieberman (I-Conn.) Wednesday unveiled a new approach to climate change legislation they say can achieve the 60 votes necessary to pass the Senate.  However, no Republicans have expressed support for the package and today all six west coast Democrats came out in opposition to provisions they feel did not restrict off shore drilling enough.  The 987-page American Power Act promises to cut U.S. emissions of greenhouse gases by 17 percent from 2005 levels by 2020 and 80 percent by 2050, consistent with President Obama’s pledge to the international community in December 2009.  It would still allow the EPA to regulate stationary sources under the Clean Air Act.

The Kerry-Lieberman bill will lead to higher costs for energy produced by fuels that produce carbon emissions (as displayed in the chart below, nearly 70 percent of U.S. electricity comes from coal, petroleum and natural gas). It has yet to be formally introduced, but to mitigate higher energy costs for all users, the bill would provide more generous distribution of free greenhouse gas emissions allowances to electric utilities and U.S. industries than in previous climate change bills. These allowances are designed to soften the impact of higher energy prices on consumers and U.S. manufacturing, and would preempt states and the U.S. Environmental Protection Agency (EPA) from using some of their existing authority to regulate stationary sources of greenhouse gases. However, it does not provide a blanket preemption that could still bring in stationary sources of all sizes regardless of whether they are a covered entity under federal regulation under the Clean Air Act or other environmental statutes, including the Clean Water Act, Endangered Species Act, or National Environmental Policy Act, or, further, nuisance or citizen suit threats.  In addition, the bill includes new transportation planning requirements that would require states and metropolitan areas to develop strategies with EPA approval to reduce greenhouse gas emissions through the transportation sector, including from reductions in vehicle miles travelled. 

Kerry-Lieberman would also require federal contracting agencies and other agencies receiving federal funding for construction of projects authorized by the bill to comply with President Obama’s Executive Order and subsequent rulemaking on PLAs, which was finalized in April 2010 and “encourages” federal agencies procuring construction projects greater than $25 million to “consider” the use of a PLA on the project.

2009 Electricity Generation by Energy Source
(Thousand Megawatthours)

Energy Source

Generation

Percentage

Coal

1,764,486

44.6%

Petroleum

38,827

1%

Natural Gas

920,378

23.3%

Nuclear

798,745

20.2%

Hydroelectric

272,131

6.9%

Other Renewables

141,115

3.6%

Other

21,776

0.6%

The bill would impose emissions limits on approximately 7,500 U.S. factories and power plants and would cover only those operations that emit more than 25,000 tons of greenhouse gases each year.  The bill would cover electric utilities starting in 2013 and delay caps for U.S. manufacturing and industry until 2016.  Companies would be required to hold or purchase emissions allowances for each ton of greenhouse gas they emit.  Transportation sector emissions would be covered by requiring oil companies to purchase emissions allowances at a set price (the impact on the transportation sector is examined in greater detail below).

Approximately two-thirds of the revenues raised from the sale of allowances would be returned to consumers, while one-quarter of the revenues would go towards funding other programs created in the legislation.  After 2035, all of the revenue would go toward consumer benefits.  The bill includes a price floor for carbon set at $12 per ton that would increase at a rate of 3 percent above inflation each year, as well as a price ceiling of $25 per ton rising at an annual rate of 5 percent above inflation.  Natural gas and home heating oil and propane providers would also receive free emissions allowances.

Key to securing moderate Democrat and Republican support, the bill includes a nuclear title that would include tax incentives, expanded regulatory risk insurance, a $54 billion loan guarantee fund, and an expedited licensing process.  At the same time the bill contains mixed messages over offshore oil and gas drilling, also seen as vital to votes, by returning 37.5 percent of revenues from federal waters to adjacent states, while allowing states to enact a law prohibiting offshore drilling within 75 miles of the state’s coastline. 

The bill provides less incentives for renewable energy and energy efficiency initiatives than previous climate change bills.  The Kerry-Lieberman bill would only provide $8.8 billion in the first year compared to roughly $67.8 billion in the House-passed bill, H.R. 2454, and $51.3 billion in version approved by the Senate Environment and Public Works Committee, S. 1733.  This funding would support initiatives such as energy efficiency retrofits to buildings and manufacturing facilities.

The Senate Majority Leader Harry Reid (D-Nev.) is expected to meet with committee chairs to discuss reconciling provisions in the Kerry-Lieberman bill with other bills, including an energy bill approved by the Senate Energy and Natural Resources Committee, S. 1462, which includes a renewable energy standard (RES).  No further details for Senate consideration have been announced. AGC issued a statement Wednesday expressing concern with the American Power Act. 

AGC continues to urge Senators to support a resolution, S.J.Res. 26, which would block the EPA from regulating greenhouse gases under the Clean Air Act.  The resolution may be voted on in the Senate as early as next week.  AGC encourages members to use AGC’s Legislative Action Center to contact your Senators in support of the resolution.

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

TRANSPORTATION
Senate Climate Bill Diverts Billions from Highway Trust Fund
 

The American Power Act (explained above in detail) places new pollution fees on the gasoline and diesel fuels used by cars and trucks without returning most of the revenue generated from that fee to improving our transportation system. 

AGC estimates these fees would generate at least $19.5 billion in revenue and divert at least 77 percent of the funds from on-road fuel consumption away from transportation investment.  The bill will allocate $6.25 billion annually for transportation.  Of that  $6.25 billion, $2.5 billion would go to the Highway Trust Fund – with a mandate to set aside funding for projects that decrease greenhouse gas emissions – while the rest of the money will be equally divided between the competitive federal TIGER grants and local land-use planning, as laid-out in the CLEAN-TEA bill.

AGC and its transportation stakeholders will send a letter and request meetings with Senators Kerry and Lieberman with the clear message that the amount of funding that they are providing to the Highway Trust Fund will not only fail to keep the trust fund solvent but will make it impossible to find the revenue necessary to pay for a multi-year surface transportation reauthorization bill.  AGC issued this statement in response to the bill.

For more information and to write your Senator, click here. Contact Sean O’Neill at (202) 547-8892 or oneills@agc.org. Return to Top

Kansas Wins Transportation Funding
 

The Kansas Contractors Association and Heavy Constructors Association of Greater Kansas City celebrated a major victory Tuesday when the Kansas House of Representatives passed an $8.2 billion transportation improvement program, giving the state Department of Transportation responsibility for managing a ten-year program to upgrade highways, transit, short-line rail and airports.

The bill allocates $2.7 billion in new financing and $5.5 billion in existing state and federal appropriations to projects. The new financing is supported by a one cent sales tax increase, with .4 cents going to highways, $1.7 billion in new bond debt and an increase on registration fees for trucks greater than 16,000 pounds. Return to Top

SAFETY
OSHA to Increase Penalties for Employers
 

OSHA's 10 regional administrators have been directed in a memo by OSHA Administrator Dr. David Michaels to revise how the current penalty calculation system contained in the Field Operations Manual is being used in enforcement proceedings. The administrative penalty changes are scheduled to take effect over the next several months.

The overall goal of the agency is to provide an adequate deterrent to employers using increased penalties.  The average penalty for serious violations will be increased from $1,000 to an average of $3,000 - $4,000, according to the changes.  The following are the most significant changes to the calculation system:

  • An employers' history of violations will expand from three years to five years.
  • 10 percent increase in their penalties for employers (up to the maximum) for employers who have been cited for any high-gravity, serious, willful or repeat violations, or have been cited for a failure to abate notice in the previous five years.
  • The time period for repeated violations will be increased from three to five years.
  • Area directors are authorized to offer up to a 30 percent penalty reduction to employers at an informal conference.
  • Where circumstances warrant, at the discretion of the area director, high-gravity serious violations related to standards identified in the Severe Violator Enforcement Program (SVEP) will no longer need to be grouped or combined, but can be cited as separate violations, each with its own proposed penalty.
  • No size reduction will be applied to employers with 251 or more employees.
  • 10 percent reduction for employers with a strategic partnership agreement will be eliminated.

AGC is greatly concerned about the impact of these administrative changes on its members and is working to inform AGC members of these changes. We will continue to have discussions with OSHA to gather more information on the changes and convey the impact they will have on the construction industry.

To view a copy of the OSHA memorandum, click here. For more information, contact Kevin Cannon at (703) 837-5410 or cannonk@agc.org. Return to Top

OSHA to Partner with Local Building Inspectors to Increase Enforcement in Construction
 

The U.S. Department of Labor's Occupational Safety and Health Administration (OSHA) is launching a pilot program seeking to partner with building inspectors in 11 cities to reduce injuries and fatalities at construction sites.  The pilot program was initially announced during the April 14 – 15, 2010, Latino Worker Health and Safety Summit held in Houston, Texas.

Secretary of Labor Hilda L. Solis has sent letters to the mayors of the selected cities, proposing that OSHA work with and train local building inspectors on hazards associated with the four leading causes of death (falls, electrocution, being crushed or caught between objects, or being struck by moving machinery or objects) at construction sites.

Under this program, building inspectors would notify OSHA when they observe, during the course of their work, unsafe work conditions. OSHA, in turn, would send a federal agency compliance officer to that workplace for a safety inspection.

OSHA seeks to partner with building inspectors in the following cities:

  • Austin, Texas
  • Boise, Idaho
  • Cicinnati, Ohio
  • Concord, N.H.
  • Greenwood Village, Colo.
  • Madison, Miss.
  • Atlanta metropolitan area, Ga.
  • Newark, N.J.
  • Oakland, Calif.
  • Washington, D.C.
  • Wichita, Kan.

 AGC encourages Chapters and their members in the selected cities to meet with their local building inspectors to discuss the proposed partnership and express their concerns with this approach to policing safety.  Meanwhile, AGC will continue to monitor OSHA activities as they pertain to this issue. 

To view a copy of the letters click here. For more information, contact Kevin Cannon at (703) 837-5410 or cannonk@agc.org. Return to Top

WATER
New Drinking Water Reauthorization Increases Funding
 

The House Energy and Commerce Subcommittee on Energy and Environment held a hearing Thursday on the Assistance, Quality, and Affordability Act of 2010, the first new legislation reauthorizing the Drinking Water State Revolving Fund (SRF) since the program’s inception in 1996. The legislation authorizes $12.7 billion over five years for drinking water-related infrastructure – a significant increase over historical funding levels. This legislation contains similar funding and provisions to AGC and WIN Coalition-supported legislation S.1005, The Water Infrastructure Financing Act of 2009, which is currently awaiting a vote by the full Senate.

In addition to reauthorizing the drinking water state revolving fund, the legislation also provides technical and financial assistance for disadvantaged communities, favors preventative infrastructure investments, and aims to replace aging facilities, among other key features.  Additional features of the legislation relevant to the construction industry include the addition of Qualification Based Selection criteria (QBS) for A/E services for certain populations and Davis Bacon prevailing wages for construction funded by the SRF.

To view additional information, including full legislative language and video of the hearing, click here.

For more information, contact Perry Fowler at (202) 547-1983 or fowlerp@agc.org. Return to Top

FEDERAL
New Legislation Would Expand Federal Contractor Performance Database
 

On May 6, 2010, Senators Russ Feingold (D-Wis.) and Tom Coburn (R-Okla.) introduced the 2010 Federal Contracting and Oversight Act. The bill is designed to prevent contractors with poor performance records from receiving government contracts and give members of Congress and federal agency contracting officers more information about companies by expanding the reach of the recently enacted Federal Awardee Performance and Integrity Information System (FAPIIS). The legislation would double the length of time contractors' past performance records remain in a government database and broaden the types of information stored from five to ten years.

The bill would condition the award of a federal contract on fulfillment of the reporting requirements for the FAPIIS database. It would also require federal agencies to submit:

  • An annual audit of the contract files required under the Clean Contracting Act of 2008 to ensure that federal contracting officials are appropriately consulting and considering the FAPIIS database prior to making contract award decisions.
  • An annual report on overlap between companies that have been suspended or debarred and those that are receiving federal contracts.
  • An assessment on the need and feasibility of developing a new, more effective system of uniquely identifying federal contractors.
  • An assessment of the feasibility and possible approaches to integrating and consolidating the wide range of existing contracting information databases into a single searchable linked network for contracting officers, members of Congress, and appropriate government officials.

The bill would direct the Office of Management and Budget to integrate and consolidate nine government-wide contractor information databases into a single searchable and linked network. Such databases include: USASpending.gov, which tracks all contract spending; Federal Business Opportunities, which lists contracts up for bid; and the Excluded Parties List System, a site of all suspended and debarred firms.

AGC is especially concerned that this legislation would double the length of time such information would be retained in the FAPIIS and expand the database to include information concerning all administrative proceedings against contractors. We are also concerned that the database would be required to track federal-aid contracts as well as federal contracts. AGC will continue meeting with members of Congress and other key procurement leaders to relay these concerns and explain the impact on the construction industry.

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

ELECTIONS
Consequential Elections Ahead, Get Out the Vote!
 

As AGC prepares for the upcoming November election, the answer as to which party will take the Congressional majority is still a mystery.  Regardless of which party wins the majority in November, the 2010 election cycle has already proven that significant changes are ahead.

Last week, following the anti-incumbent movement, Utah Republican Convention attendees denied three-term Senator Bob Bennett (R) a place on the ballot as the party’s nominee for Senate .  Earlier this week, West Virginia Rep. Allan Mollohan (D) became the first House incumbent to lose a primary.

 A special election will be held in Pennsylvania next week to decide a replacement for the late Rep. John Murtha.  Senator Arlen Specter (D) faces a tough primary challenger in Rep. Joe Sestak (D).  The polls say the race is still too close to call.  In addition to Specter’s competitive primary election, Senator Blanche Lincoln (D-Ark.) faces strong competition as Lt. Governor Bill Halter (D) continues to poll a close second to Lincoln.  Both the Arkansas and Pennsylvania primaries will be held next Tuesday along with Oregon’s and Kentucky’s.

 

Log on to www.agc.org/vote for more election information to prepare for the November election, just 173 days away.


For more information, contact Blair Hood at (202) 547-5013 or hoodb@agc.org.
Return to Top

AGC PAC Surpasses its Goal; Kicks off New Fundraising Campaign
 

AGC PAC had an exceptional week at the annual AGC Federal Contractors Conference.  The goal for the conference was $15,000, and we are pleased to announce that nearly $15,400 was collected over the four-day conference. 

At the opening general session, PAC Co-chair Doug Pruitt of Sundt Construction, Inc., kicked off AGC PAC’s latest fundraising campaign “$210 in 2010.”  In this important election year, we are asking all members that have contributed to give an extra $210 to expand our influence on Capitol Hill.  For those of you that have not contributed, we ask that you give $210 more than you typically give.  Remember that 100 percent of your contribution goes to supporting federal candidates that support our industry. 

Please also consider giving at one of our higher contribution levels: the AGC PAC Capitol Caucus ($2500 annually) or the President’s Congressional Caucus ($5,000 annually). Every dollar counts. 

For more information about “$210 in 2010,” or to contribute to the PAC, contact Blair Hood at (202) 547-5013 or hoodb@agc.org.  Contributions are also accepted online at http://www.agc.org/cs/advocacy/pac. Return to Top

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