Construction Legislative Week in Review
www.agc.org April 7, 2011
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On the Inside
TAX
268 Days Until 3% Withholding Begins – Action Needed
Senate Repeals 1099 Reporting Requirement
BUDGET
Government Shutdown Possible
Government Shutdown Not Expected to Impact Highway Program
2012 BUDGET
Ryan Budget Proposal Calls for Decreased Transportation Funding
ENERGY
Congress Votes on Stopping Federal Greenhouse Gas Emissions Regulations
FEDERAL
What You Need to Know Now: Preparing for a Possible Government Shutdown
Senators Introduce Corps Reform Act
President Obama Nominates Army Corps Chief of Engineers
Hotel Registration Deadline Approaching for AGC’s Federal Contractors Conference
TAX
268 Days Until 3% Withholding Begins – Action Needed
 

AGC continues to urge Congress to repeal the 3 percent withholding mandate on federal, state, and local government contracts. Starting January 1, 2012, public owners will begin withholding 3 percent of every payment to contractors for goods and services.

Stand-alone legislation has been introduced in the House and Senate to repeal this mandate. Grassroots contact from AGC members is very important. To write your legislators and urge them to cosponsor the legislation, click here.

Currently H.R. 674 has 65 cosponsors in the House, and two Senate bills, S. 89 and S.164, have 13 cosponsors. To see if your Senators and Representative are or have been a cosponsor of legislation to repeal the 3 percent withholding mandate, click here.

For more information, contact Karen Lapsevic at lapsevick@agc.org. Return to Top

Senate Repeals 1099 Reporting Requirement
 

The U.S. Senate Tuesday passed legislation to repeal the new IRS Form 1099 reporting mandate enacted in last year’s healthcare bill by a vote of 87 to 12. The bill now goes to President Obama, who is expected to sign the measure.

The vote came just after AGC sent a Key Vote letter asking Senators to vote in support of H.R. 4, the House-passed bill to repeal the Form 1099 reporting mandate.  The provision would have required all businesses to submit Form 1099s to the IRS and to any business with which it purchased $600 or more in goods or services in a year, creating a tremendous paperwork and compliance burden for businesses of all sizes.  The provision would have gone into effect on January 1, 2012.

Although 1099 repeal is out of the way, AGC is still working on repeal of 3% withholding. Please go to AGC’s Legislative Action Center and urge your member of Congress to support full repeal of the 3% withholding requirement.

For more information, contact Karen Lapsevic at lapsevick@agc.org. Return to Top

BUDGET
Government Shutdown Possible
 

Following a late-night meeting at the White House yesterday and another this afternoon between President Obama, Speaker of the House John Boehner, and Senate Majority Leader Harry Reid there is still no deal on a budget compromise for the remainder of fiscal year (FY) 2011.  If a deal is not struck by midnight on April 8th, the Federal government will shut down.

In an attempt to avoid a shutdown the House Republicans passed a one-week continuing resolution by a vote of 247–181.  The latest CR, which cuts $12 billion from the budget, will continue to fund the government through April 15 and will fund the Department of Defense for the remainder of FY 2011.  Of the $12 billion in cuts in the latest CR, $1.8 billion is from the Department of Transportation and $222 million from the U.S. Army Corps of Engineers Civil Works Program.

The endgame for both the short-term CR and a deal on funding for the remainder of FY 2011 remains extremely unsettled.  As negotiations continue on a spending agreement for the remainder of the fiscal year, the President issued a veto threat against the House-passed, one-week CR.  That veto threat all but ensures that unless a deal between the White House, Speaker Boehner, and Majority Leader Reid is reached, the government will shut down on Saturday April 9th.

For more information, contact Sean O’Neill at oneills@agc.org. Return to Top

Government Shutdown Not Expected to Impact Highway Program
 

As Congress and the White House continue to debate a continuing resolution to fund the federal government for the remainder of fiscal year 2011, questions have been raised about the impact on the federal-aid highway program. If no decision is reached by Friday, April 8, most of the federal government will be shut down, with employees prohibited from reporting to their work stations. The federal-aid highway program, however, will not be impacted. Because Congress has enacted an extension of authorization for Highway Trust Fund spending through the end of the fiscal year and there remains a balance in the trust fund, the Federal Highway Administration will remain open for business and will continue to process state DOT requests for reimbursement for ongoing highway projects. States will also be able to continue to enter into contracts with the assurance of federal reimbursement.

For more information, contact Brian Deery at deeryb@agc.org. Return to Top

2012 BUDGET
Ryan Budget Proposal Calls for Decreased Transportation Funding
 

While Congress continues to debate the federal budget for the remainder of Fiscal Year 2011, the House Budget Committee yesterday approved a budget resolution for fiscal year 2012 and beyond. The resolution was prepared by Budget Committee Chairman Paul Ryan (R-Wis.) which was released on Tuesday. Ryan’s budget blueprint entitled, “Path to Prosperity, Restoring America’s Promise” addresses every aspect of the federal budget from domestic spending to entitlement programs, to taxes. For transportation, the blueprint calls for significant reductions in spending with total budget authority decreasing by 31 percent from current levels.

Ryan's outline suggests that the Highway Trust Fund not receive any additional revenues from either a user fee increase or general fund transfer, and that the surface transportation reauthorization bill will have to reflect these reduced funding levels. Ryan's summary says that “highway spending has mostly exceeded the gas-tax revenues that finance the fund, because gas-tax levels leveled off while spending grew. Spending, meanwhile, has increasingly been diverted to non-highway projects, such as bike trails and museums, and politicized through earmarks such as the Bridge to Nowhere…” The budget proposal suggests that Congress can keep the Highway Trust Fund solvent without additional general fund transfers or increases in the gasoline tax by consolidating dozens of separate highway programs identified by the General Accountability Office as duplicative.

This proposal is the first shot in the budget wars that will be fought later this year in addressing the nation’s difficult deficit situation. While the budget resolution is not legislation, the Senate will also fashion its own version that will have to be reconciled with the House-passed version. Although the budget resolution is non-binding, it does present the blueprint that governs future budgetary decisions by the Congress. House Transportation and Infrastructure Committee Chairman John Mica (R-Fla.) has already indicated that he intends to write a surface transportation reauthorization bill that will be constrained by the revenue currently coming into the Highway Trust Fund.

For more information, contact Brian Deery at deeryb@agc.org. Return to Top

ENERGY
Congress Votes on Stopping Federal Greenhouse Gas Emissions Regulations
 

The U.S. Senate Wednesday defeated four competing amendments to pending small business legislation that would have blocked, delayed, or limited the U.S. Environmental Protection Agency (EPA) authority to regulate greenhouse gas emissions from stationary sources.  Although none of the amendments garnered the necessary 60 votes for passage, altogether 64 Senators voted for at least one of the amendments to rein in the EPA’s greenhouse gas regulatory agenda.

AGC sent a “Key Vote” letter to all Senators last week to urge them to vote in support of an amendment offered by Senators Mitch McConnell (R-Ky.) and Jim Inhofe (R-Okla.) that would prohibit entirely the EPA from regulating greenhouse gases to address climate change.  The amendment failed by a vote of 50 to 50, with 60 votes needed for passage. 

The U.S. House of Representatives Thursday passed 255 to 172 H.R. 910, the Energy Tax Prevention Act, which also would strip the EPA of its ability to regulate greenhouse gas emissions from stationary sources.  The measure is the House companion to the McConnell/Inhofe amendment that failed Wednesday.  AGC sent a “Key Vote” letter to the House Tuesday to ask members to support the bill. 

AGC believes that EPA is using the Clean Air Act as the wrong tool under which to regulate greenhouse gas emissions and would make it harder for construction activity to take place.  EPA began regulating large stationary sources on January 1.

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

FEDERAL
What You Need to Know Now: Preparing for a Possible Government Shutdown
 
The continuing resolution currently funding government operations, including many federal contracts, will expire at midnight on April 8, 2011.  Failure by lawmakers to pass another resolution or reach an agreement on funding for the remainder of the fiscal year will result in a federal government shutdown.  The possibility of a shutdown has left contractors wondering how or even if they can continue to perform their federal contracts. 

Construction contracts awarded on a fixed-price basis will be substantially unaffected by the shutdown.  However, for most cost-type contracts, time and materials contracts, IDIQ contracts, and those contracts that have yet to be awarded, the shutdown will likely suspend operations completely.  Therefore, it is important for contractors to prepare for the consequences of a government shutdown.

If Congressional leaders and the White House cannot reach an agreement by Midnight on April 8 and a shutdown occurs, contractors need to be prepared.  AGC FAR Committee Chairman Dirk Haire has written an article and provided a matrix and model letters for contractors to utilize to help answer questions on what to do in the instance of a government shutdown.

To view the article click here.

To view the matrix and sample letters, click here.

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

Senators Introduce Corps Reform Act
 

Senators Jim DeMint (R-SC) and Lindsey Graham (R-SC) introduced S.573, the Corps of Engineers Reform Act of 2011, on March 14th. The legislation converts the Harbor Maintenance Trust Fund into a state-administered grant program with the U.S. Army Corps of Engineers (USACE) doling out funding locally under general Corps oversight. Under the reforms, project spending decisions would be made by state officials making the program locally run and without the possibility of congressional earmarks.

Title I of the bill would establish a Harbor Maintenance Block Grant program for states to explicitly use to carry out operations and maintenance, investigations, site infrastructure improvements, and new construction of projects pertaining to harbor maintenance or deepening.  Title II creates a new system for water resources projects to be prioritized for funding from USACE. It establishes a non-paid eleven- person panel, the Water Resources Commission, to prioritize water resources projects for selection.

If the legislation were to pass, it would greatly alter the way USACE selects and funds projects pertaining to harbor maintenance and water resources. Instead of relying on direction from Congress, selections would be based on the recommendations of the newly established Water Resources Commission. 

AGC has long advocated for ensuring all funds collected for the Harbor Maintenance Trust Fund are spent out to rebuild and improve our ports and waterways. AGC has also met with Senator DeMint’s office to hear his perspective on the legislation, and we are currently analyzing its effect for contractors who perform Civil Works projects for USACE. 

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

President Obama Nominates Army Corps Chief of Engineers
 

President Obama has nominated Army Lt. General Thomas Bostick as chief engineer and commanding general for the U.S. Army Corps of Engineers. 

LTG Bostick is currently the Deputy Chief of Staff for the Army and would replace LTG Robert Van Antwerp, who has held the position since 2007 and is retiring on May 3, 2011. He formerly served at the Director of Military Programs for USACE with duty as Commander, Gulf Region Division from June 2004 - July 2005. The Senate will have to hold confirmation hearings and vote to approve the selection.

AGC looks forward to working with LTG Bostick as he prepares to take on his new command and wishes LTG Van Antwerp well and congratulates him for a long and illustrious career in service to our nation.

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

Hotel Registration Deadline Approaching for AGC’s Federal Contractors Conference
Register by April 9 to Guarantee Hotel Discount
 

The 2011 AGC Federal Contractors Conference will be held May 2-5, 2011 at The Mayflower Hotel in Washington, D.C. This meeting is the only national event where contractors and federal agency personnel can meet in a collaborative forum to review federal construction contracting issues and trends from around the United States. These insightful and highly productive exchanges have solidified the need for both federal construction contractors and the federal construction agencies to share information on a wide variety of issues, foster better communication, and create real solutions.

If you are engaged in any aspect of constructing, designing, or planning a Federal project and you are a general contractor, specialty contractor, service/supplier, attorney, or any other important stakeholder already engaged in the Federal market, this conference has a place for you. If you are interested in learning more about federal contracting opportunities and how to get started, this conference is a great place to begin your learning experience. AGC Chapter leadership and staff are also invited to attend and be a part of this great meeting.

Continuing on the success of separate concurrent tracks that highlight each of the unique federal and federally-assisted markets, AGC has added an additional new track of education sessions to help contractors at all experience levels better understand and be successful in the federal and federally-assisted markets. The Water Infrastructure Track includes meetings with agencies such as the Environmental Protection Agency’s Office of Water, the Natural Resources Conservation Service, and the Army Corps of Engineers – Civil Works Directorate. The Federal Facilities Track includes meetings with the General Services Administration, the International Construction Agencies, and the Military Construction agencies of the Department of Defense. The Highway and Transportation Track features meetings with the Federal Highway Administration, the Federal Aviation Administration and the transit and rail agencies.

To learn more about the conference, download the conference brochure and register, visit the conference website.

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

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