Legislative Calendar Dwindles as Mid-Term Election Approaches
With possibly only one legislative week left and 40 days
before the November 2 election, both parties are positioning themselves to
address major outstanding issues during a lame duck session of Congress.
However, today the House did pass a Small
Business Jobs Bill that provides construction incentives
and business relief, and it now goes to President Obama for his signature.
In the Senate, a campaign finance bill, the DISCLOSE Act,
was rejected for the second time in three months. AGC opposed the bill and is
considering it a Key Vote in its annual scorecard because the legislation will
restrict free speech, increase confusion about campaign finance law and would
not treat all participants in the political process equally (treats
corporations and trade associations differently than labor unions). To
view the letter AGC sent to Congress click here.
This week Senate Democrats failed to deliver on two major
Election Day issues: the repeal of Don't Ask, Don't Tell, and the DREAM Act,
which would allow a path to citizenship for illegal immigrants brought into
this country as minors by their parents if they are paying taxes, attending
college or serving in the U.S. military.
The expiring 2001 and 2003 tax cuts remain a
controversial issue. Efforts to extend the tax cuts for the middle class only
have broken down within the Democratic Party and it appears ever more likely
that the issue will have to be resolved after the election, and prior to their
expiration on December 31.
Another major piece of legislation outstanding is a bill
to fund the federal government after September 30. Congress has been unable to
pass the annual FY11 appropriations bills and a must-pass stopgap bill will
likely be necessary. The bill is expected to be a short-term extension and avoid
including controversial policy goals. The short-term extension would require
Congress to come back after the election to continue to fund the federal
AGC continues to urge Congress and the White House to
finish work on long-term transportation and water infrastructure spending
bills, and keep income tax rates (especially the death tax) from soaring to
help construction industry employment recover from millions of lost jobs. This
action is expected during the few legislative days before the election or
during a lame duck session. AGC believes the stopgap funding for transportation
isn’t providing the certainty companies need for hiring and growing. In
addition, the prospect of a leap in taxes is deterring private investment.
For more information, contact Jim Young at
(202) 547-0133 or email@example.com.
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Republican House Members Release “A Pledge to America”
With one eye toward the elections and the other toward the
potential for a GOP-run House of Representatives, Republicans today released “A
Pledge to America.” The 48-page package is a response to interaction with
voters and an overview on how a Republican Congress will tackle the biggest
issues facing America today.
The plan takes a philosophical approach, talking
thematically about creating jobs, improving international competitiveness and
controlling spending. It includes a pledge to repeal health care, make Congress
more transparent and more responsive, and improve national security.
The package includes some AGC priorities, such as
reducing red tape and repealing mandates like the 1099 requirement. It talks
about repealing the Obama Health Care Bill and replacing it with reforms, and extending
the Bush tax cuts. While it is not clear how the pledge’s federal spending
freeze would impact important construction programs, it does a good job laying
out the significant issues that the 112th Congress will have to face
in the coming years.
For more information, contact Jeff Shoaf at firstname.lastname@example.org.
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Small Business Jobs Bill Provides Construction Incentives and Business Relief
The U.S. House of Representatives today cleared H.R.
5297, the Small Business Jobs Act, a bill that would make $30 billion in funds
available to community banks to make loans to small businesses and provide
roughly $15 billion in tax and other incentives for businesses of all sizes. The
bill now goes to President Obama for his signature. Below are a few highlights
of provisions in the measure of particular benefit to the construction
Increase of Section
179 Expensing and Expansion to Certain Real Property. Under current law,
taxpayers may elect to write-off the costs of certain tangible personal
property that is purchased for use in the active conduct of a trade or business
in the year of acquisition in lieu or recovering these costs over time through
depreciation. For the taxable year beginning in 2010, taxpayers may write-off
up to $250,000 of these capital expenditures subject to a phase-out once these
capital expenditures exceed $800,000.
After 2010, the thresholds revert to $25,000 and $200,000, respectively.
This bill would increase the thresholds to $500,000 and $2,000,000 for the
taxable years beginning in 2010 and 2011. Within those thresholds, this bill
would allow taxpayers to expense up to $250,000 of the cost of qualified
leasehold improvement property, qualified restaurant property, and qualified
retail improvement property.
Extension of Bonus
Depreciation and Special Rule for Long-Term Contract Accounting. Businesses are allowed to recover the
cost of capital expenditures over time according to a depreciation schedule.
Congress temporarily allowed businesses to recover the costs of certain capital
expenditures made in 2008 and 2009 more quickly than under ordinary
depreciation schedules by permitting those businesses to immediately write-off
50 percent of the cost of depreciable property placed in service in those
years. This bill extends the additional, first-year 50 percent depreciation for
qualifying property purchased and placed in service in 2010. In addition, the
bill includes a special rule for long-term contract accounting at AGC’s request
via the plan, Build Now for the Future. The
provision decouples bonus depreciation from allocation of contract costs under
the percentage of completion method rules for assets with a depreciable life of
seven years or less in order to allow contractors that do not complete
contracts within the same year in which they are entered into to benefit from
6707A Penalty. The bill revises section 6707A of the Internal
Revenue Code to make the penalty for failing to disclose a reportable
transaction proportionate to the underlying tax savings. The penalty for
failure to disclose reportable transactions to the IRS would be set at 75
percent of the tax benefit received. Reportable transactions are defined as
investments in transactions that the IRS has identified as listed tax shelters
or that have characteristics of tax shelters, including large losses or
confidentiality agreements. The minimum penalty under this bill is $10,000 for
corporations and $5,000 for individuals and the maximum penalty is $200,000 for
corporations and $100,000 for individuals. The bill also requires the IRS to
provide an annual report to the Senate Finance Committee and to the House Ways
and Means Committee giving an account of certain tax-shelter related penalties
asserted during the year. AGC
supported inclusion of this provision to provide relief to contractors who face
substantial section 6707A penalties.
Cellular Phones from “Listed Property.” This provision would
“delist” cell phones so their cost can be deducted or depreciated like other
business property, without onerous recordkeeping requirements.
For more information, please contact Karen
Lapsevic at (202) 547-4733 or email@example.com.
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OMB Issues New Reporting Requirements for Contractors Doing State and Local Work
Two new rules came out of the Office of Management that
affect contractors who perform work on projects that are federally-assisted
(i.e. projects funded in whole or in part through grants, loans, or financial
assistance from the federal government such as the EPA's State Revolving Loan
Fund, or the DOT's Highway Trust Fund). This is yet another example of
direct-federal contracts rules being applied to federally-assisted work
performed by private contractors, a policy shift AGC strongly opposes.
Under the first
new rule, recipients of these grants, loans, or financial assistance (such
as State and local governments) must now report every first-tier subaward (such
as a prime contract) over $25,000 to usaspending.gov.
As part of this reporting, subaward recipients (i.e. contractors) who meet
certain triggers will have to report the total compensation of their top five
executives. These triggers are:
- The contractor must have received 80 percent or
more of its annual gross revenue in the preceding fiscal year from federal
money (grants, loans, financial assistance, or direct-federal contracts)
- The contractor must have received $25,000,000 or
more in annual gross revenues in the preceding fiscal year from federal money
(grants, loans, financial assistance, or direct-federal contracts)
- The contractor does not already have to report
compensation information through period reports filed under the Securities
Exchange Act or the Internal Revenue Code
All three conditions must be met to trigger the total
compensation reporting requirement. If your company does trigger the
requirement, it will have to report to the state or local entity recipient the
total compensation of its top five officers, managing partners, or any other
employees in management positions.
rule requires contractors to obtain a Data Universal Numbering System
(DUNS) number. This nine-digit number can be obtained from Dun &
Bradstreet, Inc. at no cost either by telephone (866-705-5711) or online (by
clicking here). While earlier
versions of this guidance would have required a contractor to also maintain a
current registration in the Central Contractor Registration (CCR) database, OMB
has decided not to enact that requirement at this time. If a contractor fails
to provide a valid DUNS number, the contractor could be determined to be not
qualified to receive a contract award.
Read the rule requiring reporting of executive
Read the rule requiring use of a DUNS Number here.
For more information, contact Scott Berry at (703)
837-5321 or firstname.lastname@example.org.
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FAA Authorization Gets Three-month Extension
The House and Senate have each passed a three-month
extension of the Federal Aviation Administration (FAA) authorization. Program
and taxing authorization expired on September 30, 2007 and FAA has been
operating under multiple short term extensions ever since.
The long-awaited multi-year FAA bill is close to
completion but will not be finalized before the current extension expires on
September 30, 2010. It is likely that the bill will be considered in the
lame-duck session of Congress following the November mid-term elections. AGC
supports a long-term FAA reauthorization.
For more information, contact Sean O’Neill
at (202) 547-8892 or email@example.com.
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Hawaii Hosts Final Official Primary
DAYS UNTIL ELECTION DAY
On September 18, Hawaii held the final official primary
election of the 2010 election year. (Louisiana will hold its primary run-off on
October 2). Rep. Charles Djou (R) will once again face Democratic
opponent Colleen Hanabusa for Hawaii’s 1st district in November.
Djou was coined a Republican darling in May when he won Hawaii’s special
election after Rep. Neil Abercrombie vacated the seat in February to run for
October 2, 2010: Louisiana Run-Off
Hanabusa was Djou’s most threatening opponent in the
special election, coming in a close second to the Representative. She
currently serves as a state senator. The race is considered a “toss up”
and will be an interesting one to watch come Election Day.
John Willoughby, a retired Navy officer, will challenge
current Rep. Mazie Hirono (D) for Hawaii’s 2nd district.
Willoughby has a tough battle ahead as the district is considered to be safe
for Hirono and rated a “Solid D” district.
Number of Competitive Races*
Democrats Defending Seats: 79
Republicans Defending Seats: 7
Democrats Defending Seats: 12
Republicans Defending Seats: 6
*Competitive races are those the Cook Political Report has defined as "Lean" or "Toss Up"
More election updates to come next week. For
more information, contact Blair Hood at (202) 547-5013 or firstname.lastname@example.org.
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