House, Senate Try to Pass Trimmed-Back “Extenders” Bill
The U.S. House of Representatives is attempting to
finalize a bill that would extend a variety of tax provisions, infrastructure
programs, and unemployment and health care payments. The American Jobs and
Closing Tax Loopholes Act, H.R. 4213, also includes much-anticipated pension
relief for single- and multiemployer plans.
Both Republicans and Democrats have expressed concern with the amount of
spending in the bill not paid for. Meanwhile, AGC, shopping center developers
and architects have expressed opposition to provisions included in the measure,
such as a proposed tax increase on “carried interest” and changes to how S corporations
AGC’s message to the House is that the carried
interest provision, as well as a proposed payroll tax increase on certain S
corporations, significantly dilutes any benefits that are otherwise provided by
the bill. Despite being portrayed as a
way to tax wealthy investment fund managers, the carried interest provision is
particularly damaging to private building developers. It proposes to increase the tax on carried
interest from the 15 percent capital gains tax rate to ordinary income rates as
high as 35 percent. The provision is
also retroactive, so real estate partnerships and limited liability companies
(LLC) that existed before enactment would lose the capital gains treatment on
the carried interest, effectively devaluing existing and already depressed
The bill also contains a complicated and arbitrary
provision that would increase payroll taxes paid by S corporations and
partnerships engaged in certain professional service businesses. Like carried interest, proponents of the
provision claim that it is designed to combat what they see as abuses by
certain bad apples – in this case those in law and lobbying – although other
businesses, including architect and engineering firms, are targeted in the
bill. While “construction” is not targeted
specifically, all S corps should be concerned.
It is unclear whether “construction management,” which the Internal
Revenue Service (IRS) already defines as a service, or firms with incidental
architectural or engineering services, would ultimately be excluded. Moreover, as drafted, the provision sets
forth a vague test for a small business to determine whether its principal
asset is the “skill and reputation” of fewer than three key employees, and it
also arbitrarily discriminates against small businesses by taxing businesses
with three or fewer key employees at higher tax rates than businesses that are
identical in every respect, except that it has four key employees. The IRS already has provisions at its
disposal to address such problems.
Notwithstanding the proposed tax hikes on the
industry, the bill includes a number of incentives for construction activity
and pension relief.
America Bonds. The bill would
extend this highly successful program through 2012. Roughly $100 billion in Build America
Bonds have been issued to date.
Infrastructure Private Activity Bonds.
The bill would exclude water and sewer bonds from a state’s private
activity bond volume cap.
- Real Estate
Depreciation. The bill would extend
for one year the special 15-year cost recovery period for certain
leasehold improvements, restaurant buildings and improvements, and retail
Pension Relief. The bill would
allow multiemployer pension plans to elect a 30-year amortization period
for certain losses incurred in 2008 and/or 2009. The bill also extends the
smoothing period from 5 to 10 years and allows plans the option of up to a
5 year extension of their funding improvement or rehabilitation periods.
Since some of the provisions relating to
unemployment benefits and health care expire on Monday, the Senate may stay
this weekend to consider the bill.
more information, contact Karen Lapsevic at firstname.lastname@example.org.
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Senate to Vote June 10 on Resolution to Block EPA from Using Clean Air Act to Stop Construction Projects – AGC Action Requested!
agreed this week to vote June 10 on a resolution that would block the U.S.
Environmental Protection Agency (EPA) from regulating greenhouse gases under
the Clean Air Act. AGC is concerned that
Clean Air Act regulation of greenhouse gases would delay or stop construction projects
S. J. Res. 26 was introduced by Senator Lisa
Murkowski (R-Alaska) and is designed to block EPA’s effort to regulate
greenhouse gases from motor vehicles that then trigger requirements for
emission controls from all other sources, including commercial buildings,
industrial facilities, and more.
EPA regulation under the Clean Air Act means more
pre-construction permits, operating permits, and costly technology control
installation requirements for building projects, and puts approval and federal
funding for highway and bridge projects at risk. It also means higher energy process for
businesses and consumers that will affect demand for construction services
nationwide, especially in a down economy.
AGC urges all members to contact their Senators in
support of Senator Murkowski’s resolution.
To send a message to your Senators, you can use AGC’s Legislative Action
Center by clicking here.
more information, contact Karen Lapsevic at 202-547-4733 or email@example.com.
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Guidance on Small Business Health Insurance Tax Credits Released
Internal Revenue Service (IRS) has released guidance
and some clarification on the small employer tax credit for health care
coverage. The credit was included in the Patient Protection and Affordable Care
Act and was designed to encourage employers with average annual wages of less
than $50,000 and fewer than 25 full-time equivalent employees to begin offering
coverage or to help them maintain the level of health care benefits to their
The new guidance helps employers calculate the
average annual wages and clarifies that partners in a business and certain
owners are not taken into account as employees nor are their wages used in
determining the FTEs average annual wages. The guidance notes seasonal workers
are disregarded in determining the FTEs average annual wages unless they work
more than 120 days in a year.
During the legislative debate, AGC advocated the tax
credits in the Patient Protection and Affordable Care Act were too targeted,
complex and offered limited value because the credit phased-out as firm size
and average wages increased.
- Phase I:
For tax years 2010 through 2013, employers can receive a tax credit of up
to 35 percent of the employer’s contribution toward the employee’s health
insurance premium if the employer contributes at least 50 percent of the
total premium cost. The full credit will be available to employers with 10
or fewer employees and average annual wages of less than $25,000.
- Phase II:
For tax years 2014 and later, eligible employers that purchase coverage
through the state Exchange can receive a tax credit of up to 50 percent of
the employer’s contribution toward the employee’s health insurance premium
if the employer contributes at least 50 percent of the total premium cost.
The credit will be available for two years. The full credit will be
available to employers with 10 or fewer employees and average annual wages
of less than $25,000.
Click here to view phase out tables. Table 1
shows the amount of the credit eligible for employers from 2010 through 2013.
Table 2 shows the credit available beginning in 2014.
more information, contact Jim Young at (202) 547-0133 or firstname.lastname@example.org.
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AGC Represents Contractors at Wage & Hour Division Stakeholder Forum
Friday, May 21, 2010, the Wage and Hour Division (WHD) of the U.S. Department
of Labor (DOL) held a Stakeholder Forum to discuss some of the issues and
regulations that fall under their purview. AGC attended the event and
participated in sessions that addressed topics with a potential effect on the
construction industry. The Wage and Hour
Division is using the theme of “Plan, Prevent, and Protect” to become a more
effective enforcement agency. Success will be measured by baseline
investigations in industries where they believe violations are most likely to
occur. Construction is listed as one of the top industries on which they
will focus. A WHD official expressed that while there are no
numerical targets for enforcement, results will be measured on an ongoing
The Deputy Administrator, Nancy J. Leppink, began
the plenary session by giving an overview of the day as well as the mission of
the department. The overall theme of her remarks echoed many others
at DOL under the Obama Administration, including labor secretary Hilda Solis,
that enforcement is their top priority. Driving home the point, she
recognized the agency’s accomplishments of hiring 250 new investigators in
2009, with 100 more new hires expected in 2010.
She also acknowledged the agency’s new public service campaign, “We Can Help,”
which educates workers on their workplace rights while encouraging them to
report employers that are violating those rights, and the new focus on the use
of administrative interpretations instead of opinion letters, which she says is
a “better use of agency resources” by addressing issues more broadly.
For more information, contact Tamika C. Carter at (703) 837-5382 or email@example.com.
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Department of Veterans Affairs Seeking Information on Project Labor Agreements
Office of Construction and Facilities Management (CFM) located in Washington, D.C.,
is conducting a survey regarding the use of a Project Labor Agreement (PLA) on
a series of projects nationwide. They are looking for interested contractors to
fill out the following questionnaire on a series of recent solicitations posted
1. Is your company familiar with Project Labor Agreement (PLA) used on construction
projects? Yes/No Comments
2. Would your company likely submit a proposal for the VA construction solicitation
that requires the use of a PLA? Yes/No Comments:
3. If VA requires a PLA, would your proposed construction cost likely to
increase? Yes/No Comments
4. Does the VA requirement to use of a PLA on a construction project restrict
competition? Yes/No Comments
5. Do you expect subcontractor resistance should VA requires the use of a PLA
on this construction solicitation? Yes/No Comments
6. Do you have additional comments regarding the use of a PLA for this project?
AGC urges all interested contractors to fill out the questionnaire to give the Department
of Veterans Affairs a clear idea of the impact a government-mandated PLA would
have on the construction of federal projects. The questionnaire is included
with individual job solicitations.
To view AGC’s comments on the PLA Rulemaking, click
more information, please contact Marco Giamberardino at (703) 837-5325 or firstname.lastname@example.org.
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Transportation Construction Coalition Pushes for Transportation Authorization
hundred highway contractors, suppliers and other interested parties converged
on Capitol Hill in this week’s Transportation Construction Coalition (TCC)
Fly-In. The agenda for the Fly-In focused on the much delayed surface
transportation authorization, status of the Highway Trust Fund and draft
climate legislation recently introduced in the Senate that has the potential to
establish a new user type fee on motor fuels while allocating only a small
portion of the revenue for transportation investments.
Participants of the TCC Fly-In, co-chaired by AGC, visited
hundreds of congressional offices to lobby highway issues, as well as 3%
withholding, creation of a Water Trust Fund and pension relief. The group also
placed an advertisement
in Capitol Hill's Roll Call newspaper.
The Fly-In participants heard from Transportation
and Infrastructure Committee Chairman Oberstar (D-Minn.), who pledged his
continued commitment to moving the Surface Transportation Reauthorization Act
(STAA). Congressman John Mica (R-Fla.), Ranking Member of the
Transportation and Infrastructure Committee, also expressed his commitment to a
reauthorization while detailing the challenges of passing an increase in the
gas tax to pay for a reauthorization bill. Ranking Member on the Senate
Environment and Public Works Committee, Senator Jim Inhofe (R-Okla.) provided
an update on the status of the Senate surface transportation reauthorization
bill and also expressed his opposition to the proposed climate change bill and
its treatment of revenue derived from the transportation sector. In
addition, Congressman Earl Blumenauer (D-Ore.) provided an impassioned address
on the need to tackle our country’s surface transportation and water
more information, contact Sean O’Neill at (202) 547-8892 or email@example.com.
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House Committee Approves Drinking Water Legislation
the House Energy and Commerce Committee passed H.
R. 5320, the Assistance, Quality, And Affordability Act Of 2010, or Aqua Act.
The legislation originally authorized $14.7 billion dollars over five years for
the EPA Drinking Water State Revolving Fund (SRF). Due to objections from
Republican committee members, changes were approved by the bi-partisan
leadership of the committee to lower the proposal to $4.8 billion over three
years and scale back provisions involving mitigation and treatment of endocrine disrupting chemicals, which
are increasingly showing up in water systems nationwide. Instead, the legislation calls for additional
EPA studies on the matter.
The presence of the these substances in drinking
water are largely thought to be result of
pharmaceuticals and personal care products, which resurface in tap water
after being flushed down toilets or drains. These products are among those targeted
for user fees to finance H.R.
the AGC-supported water trust fund legislation.
Despite AGC’s opposition, the committee accepted an
amendment offered by Representative Betty Sutton (D-Ohio) and other members that
applied “Buy American” requirements modeled after the Recovery Act. The legislation also applies Davis Bacon prevailing
wages to SRF federal assistance.
While the inclusion of Recovery Act “Buy American”
language and decreased authorization level is disappointing, passage of this
legislation signifies an important development in continuing to move forward on
a full reauthorization of both the Clean Water SRF, which has passed the full House
and companion legislation reauthorizing
both programs in S.1005,
which is currently stalled in the Senate.
AGC anticipates that this legislation will move to
the floor of the House for a vote by the full body in the near term. Prospects
for movement on the Senate SRF bill are improving with the House committee’s passage
of the Aqua Act. AGC and the WIN Coalition are still working steadfastly to
bring the Senate bill to the floor for a vote in this Congress.
more information, contact Perry L. Fowler at firstname.lastname@example.org
or (703) 837-5321.
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DISCLOSE Act Pulled from House Consideration
in the House have slowed down efforts to quickly pass the DISCLOSE Act, a bill designed
to: increase scrutiny on corporations that want to participate in issue
advocacy and electioneering communications; and prohibit political advocacy by
government contractors and companies with a more than 20 percent foreign
ownership interest. The bill was added to the House agenda at the end of last
week, but it has been pulled for the week.
Unlike past attempts to change campaign laws, this
package is designed to take effect immediately rather than during the next
election cycle, and unlike the Citizens United Case it purports to address, it
treats corporations different from labor unions. The House may now take up the
legislation in June. For more information,
contact Jeff Shoaf at email@example.com.
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Hawaii, Colorado, Connecticut Make Headlines Last Weekend, More Competitive Primaries to Come
Honolulu city Councilman Charles Djou (R-Hawaii) won
the special congressional election on the Island of Oahu this past Saturday,
defeating state Senate President Colleen Hanabusa (D), former Rep. Ed Case (D-HI-2),
and eleven others in the all-mail ballot procedure. Djou placed first in
the winner-take-all field, capturing 39.4 percent (67,610) of the vote.
Hanabusa totaled 30.8 percent (52,802) and Case registered 27.6 percent
Of the state's two districts, HI-1 is the one seat
that could elect and re-elect a Republican. Pat Saiki won here in 1986
and was re-elected to a second term before running unsuccessfully for the
Senate in 1990. GOP Gov. Linda Lingle carried the 1st district
in all three of her gubernatorial campaigns - with 58 and 65 percent in her
victorious 2002 and 2006 campaigns, while still managing to garner 52 percent
in a 1998 losing statewide effort. Furthermore, Hawaii voters have never
defeated a federal office holder. Djou is just the eleventh person, and
second Republican, to represent the state in the House of Representatives and
no incumbent has been defeated after obtaining the post.
Appointed Senator Michael Bennet (D-Colo.) lost the
state Democratic Party convention endorsement to former Colorado state House
Speaker Andrew Romanoff. Romanoff, who earned 61 percent of the
convention delegates, had fewer dollars than Bennet. However, he has been
popular in the state since assisting with the Democratic party takeover in the
Colorado House over the past 10 years. Bennet vows to qualify for the
state’s primary election, August 10, as a write-in candidate. Meanwhile,
Republican favorite Jane Norton, former Lt. Governor of Colorado, lost her bid
to qualify for the primary ballot to Weld County prosecutor Ken Buck.
State Rep. Raul Labrador won an upset victory in
Idaho’s 1st District Republican primary Tuesday, defeating military veteran
Vaughn Ward, the preferred candidate of the Washington GOP establishment.
Labrador will face freshman Rep. Walt Minnick (D-ID), who ran unopposed in the
Democratic primary, in the general election.
State Attorney General Dick Blumenthal (D-Conn.) was
nominated to the Democratic party’s primary ticket at the Connecticut
convention. With 51 percent of the vote, WWE cofounder and ex-CEO Linda
McMahon (R-Conn) was nominated to the Republican Party’s primary after the apparent
frontrunner and former Representative Rob Simmons dropped out of the race.
For more information, contact Blair Hood at (202) 547-5013 or firstname.lastname@example.org.
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