Construction Legislative Week in Review
www.agc.org July 28, 2011
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On the Inside
TAX
Nearly Half the House Supports Efforts Continue to Repeal 3 Percent Withholding
TRANSPORTATION
AGC Urges Congress to End Impasse on FAA Reauthorization Which Has Shut Down On-Going Aviation Construction
Transportation Bond Legislation Introduced in the Senate
DEBT LIMIT
House Set to Vote on Debt Limit Increase
FEDERAL
Congressional Democrats Send Letter to the President Encouraging the Signing of Federal Disclosure Executive Order
ENVIRONMENT
Proposed Changes to EPA’s Stormwater Permit Are Premature, Far Too Restrictive and Impractical for Contractors to Implement, AGC Says
TAX
Nearly Half the House Supports Efforts Continue to Repeal 3 Percent Withholding
 

Momentum continues to build in Congress to repeal the 3 percent withholding tax. AGC members and the construction industry have been at the forefront of the repeal campaign. In the last several weeks, AGC has sent out individualized state-by-state updates to our members, and as a result, the House has 213 cosponsors and the Senate is at 29 cosponsors.  If you want your state’s list please email youngj@agc.org.


The most recent additions to the House cosponsor list are:


Rep Benishek, Dan [MI-1] - 7/21/2011
Rep Reed, Tom [NY-29] - 7/21/2011
Rep Rogers, Mike J. [MI-8] - 7/21/2011
Rep Ross, Mike [AR-4] - 7/21/2011
Rep Womack, Steve [AR-3] - 7/21/2011


The most recent addition to the Senate cosponsor list is:


Sen Toomey, Pat [PA] - 7/25/2011


AGC continues to ask its members to contact their elected officials, reach out to local stake holders and state and local agencies; and these efforts have not gone unnoticed by Congress.  However, Congress has yet to schedule a debate on the bill so action cannot stop.  Please continue to make contact with your legislators and encourage your employees to do the same by using the AGC Legislative Action Center.


Use the tools below to ask your Representative to cosponsor H.R. 674, and your Senators to cosponsor S. 89 or S. 164, which would permanently repeal the requirement. Click here or watch this video to learn more about the 3 percent withholding tax from AGC's Jeff Shoaf.


For more information, please contact Jeff Shoaf at (202) 547-3350 or
shoafj@agc.org. Return to Top

TRANSPORTATION
AGC Urges Congress to End Impasse on FAA Reauthorization Which Has Shut Down On-Going Aviation Construction
 

On Tuesday, AGC sent letters to the House and Senate urging passage of a multi-year aviation authorization bill to avoid further disruption to a construction industry that is already reeling from a steady decline in market opportunities which has resulted in the loss of 2.2 million construction jobs. The effort was made necessary after Congress failed to pass a short term extension of authorization for the Federal Aviation Administration (FAA). FAA authorization expired on September 30, 2007, and Congress has passed 20 short term extensions of authorization to keep the agency and its programs operating. An impasse over service to rural airports and some labor provisions has led to a roadblock which has prevented the legislation from moving forward. The House passed legislation for a 21st extension that included a labor provision and cuts in service to rural airports which the Senate objected to, and therefore, did not adopt the measure.

Lack of authorization has resulted in the furlough of 4,000 FAA employees, the expiration of authority to collect the airline ticket tax which funds the aviation trust fund, stop work orders on a multitude of ongoing construction projects funded through FAA’s Airport Improvement Program and preventing local airports from moving forward with an additional $2.5 billion in pending FAA funded construction contracts.

AGC called the Congressional inaction irresponsible and pointed out the depression-like conditions in the industry as construction spending reached an 11-year low and publicly funded construction skidded 12 percent in the past eight months. AGC said, “A multi-year aviation bill will add certainty to the market; ensuring the best choices will be made to prioritize investment decisions.”  No effort has been made thus far by the House to send the Senate a “clean” extension to allow FAA programs to move forward.

For more information, please contact Brian Deery at (703) 837-5319 or deeryb@agc.org. Return to Top

Transportation Bond Legislation Introduced in the Senate
 

Senators Ron Wyden (D-Ore.), John Hoeven (R-N.D.) and Mark Begich (D-Alaska) have introduced AGC supported legislation today to create a tax credit bond program dedicated to transportation infrastructure. Transportation and Regional Infrastructure Project bonds or TRIPs will be a financing tool to fund the transportation projects throughout the country.

TRIPs are tax credit bonds designed exclusively to fund transportation infrastructure projects. Bondholders will receive a tax credit instead of the tax-exemption found in municipal bonds – making the bonds fairer for the tax payers and ensuring that the bonds do not become tax havens. Under the plan put forward by the senators, $50 billion in tax credit bonds would be issued over a six-year period with the principal cost of the bonds being covered by a trust fund composed of Customs User Fees.

TRIPs will originate with each individual state’s infrastructure bank. Each state infrastructure bank will be allocated 2 percent of the total amount of bonds to issue to projects of their discretion – a total of $1 billion per state. States are also able to pool their funds for larger projects, including those that affect multiple states. Most states have already created infrastructure banks, but those who have not can do so at any time to receive their portion of the TRIP bond funding.

A full analysis of the bill can be found here.

AGC and other transportation stakeholders worked closely with the Senate offices who drafted the legislation to ensure that it has the maximum impact in addressing our transportation funding shortfall by creating a vehicle to increase private investment in transportation infrastructure.  A copy of the AGC letter of support can be found here.

AGC will continue to work with Senators Wyden, Hoeven, and Begich to include TRIP bonds as a financing mechanism in the surface transportation reauthorization bill.

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

DEBT LIMIT
House Set to Vote on Debt Limit Increase
 

The House of Representatives will vote this evening on Speaker John Boehner’s deficit reduction plan, the Budget Control Act of 2010.  It is anticipated that most House Republicans will vote for the Speaker’s bill (although passage is not certain), even though it is still unclear how the debt-ceiling game will play out.

Passage of the Budget Control Act in the Senate is unlikely.  Yesterday, all 53 members of the Senate Democratic Caucus signed a letter in opposition to the Boehner bill; making it all but certain that the bill will not get the 60 votes necessary to move the bill.  In addition, Senator Harry Reid said this afternoon that the Senate will take up the Boehner bill if it passes the House.  Reid guaranteed the bill would subsequently fail.  There is, however, some hope in the Senate, as reports that Senate Majority Leader Harry Reid (D-NV) – who has released his own deficit reduction plan – and Minority Leader Mitch McConnell (R-KY) have had discussions on developing a path to a debt limit increase that can get bipartisan support and the 60 votes necessary for passage in the Senate.  At this point, it appears Majority Leader Reid has two options: the first would be to amend the Boehner bill; the second would be to move his own bill, which offers $2.7 trillion in spending cuts over 10 years, and send that back to the House.  However, both bills would face an uncertain fate.

Boehner/Reid Plans

For as much as the Boehner and Reid plans closely resemble each other, there is serious divide over the Republican demand for a second debt limit vote tied to another $1.8 trillion in budget cuts that likely would come up early next year.  The House bill also includes a provision to force a Balanced Budget Amendment vote, which has no chance of passing the Senate.  The Reid plan would extend the debt ceiling until 2013, while making a similar amount of cuts as the Boehner bill.

The key similarities of the plans are: instituting new statutory caps on discretionary spending for each of the next ten fiscal years; increasing the debt ceiling immediately upon enactment – a $2.7 trillion increase in the Reid bill and $2.5 trillion gradual increase in the House bill; and the creation of an Identical Joint Select Committee on Deficit Reduction which will report proposed legislation for further deficit cuts by December 2, 2011.

Impact on Construction Industry

There are no specific cuts in either the Reid or Boehner plan.  What they do instead is put a cap on total federal spending including federal construction spending.  So cuts to total spending  will most assuredly impact the majority of federal construction accounts.  For example, in the FY 2011 Continuing Resolution (link to either CLWIR story or one-pager on cuts) construction accounted for more than half of the total cuts.  In order to avoid a similar outcome as a result of the deficit reduction plans, AGC has communicated with congressional leadership about the impact the cuts in FY 2011 will have on our industry. From a transportation perspective, one thing the Boehner and Reid bills have in common is that they create new discretionary spending caps that do not have separate categories for highway and transit spending, further eroding the Highway Trust Fund firewalls.

As we approach the August 2 deadline, it appears that the House and Senate may be moving closer to resolving the debt ceiling increase.  However, ultimate outcome remains uncertain.  AGC will continue to monitor the budget debate and continue to advocate for the fair treatment of the construction industry in that debate.

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

FEDERAL
Congressional Democrats Send Letter to the President Encouraging the Signing of Federal Disclosure Executive Order
 

A letter signed by more than 60 House Democrats was sent to President Obama today, urging him to sign a draft Executive Order (EO) that would require companies bidding on government contracts to disclose political contributions made within the past two years by their officers and directors to federal candidates and parties.  The draft EO, which was leaked in April 2011, is seen by supporters as an effort to increase transparency in federal government contracting in an effort to halt pay-to-play contracting. 

Congressional Republicans and industry allies have called the executive order unconstitutional and see it as an effort by the Administration to use executive power to reward their supporters.  Some key Democrats such as House Minority Whip Steny Hoyer (D-MD) and Representative Gerry Connolly (D-VA) also voiced concerns about the draft EO. AGC is concerned that forcing government contractors to disclose all political contributions would make it too easy for political appointees to punish contractors for their political views or to coerce contributions from firms. 

On April 29, 2011, AGC voiced these concerns in a letter to the president, and again on May 12 in testimony submitted to the House Oversight and Government Reform Committee on a hearing examining the proposed EO.  AGC stated in both the letter and testimony that the draft EO is unnecessary, noting that there is no evidence to indicate that political contributions are influencing the award of federal contractors.  AGC also pointed out that contractors are already required to disclose the vast majority of political spending and that there is already a publicly available web-based searchable database showing all political contributions. 

Congressmen Darrell Issa (R-CA) who is also the Chair of the House Oversight and Government Reform Committee, Tom Cole (R-OK), and Sam Graves (R-MO) have introduced legislation in the House that would bar the federal government from collecting information about federal contractors’ political spending.  Identical legislation was also introduced in the Senate by Minority Leader Mitch McConnell (R-KY), and Senators Susan Collins (R-ME), Lamar Alexander (R-TN) and Rob Portman (R-OH).

President Obama has placed the signing of the draft executive order on hold. Congressional Democrats, however, are hoping the letter will encourage the president to sign the proposed EO.  AGC will continue to encourage Members of Congress to oppose the EO and will report on its status as details develop.

For more information, please contact Marco Giamberardino at (703) 837-5376 or giamberm@agc.org. Return to Top

ENVIRONMENT
Proposed Changes to EPA’s Stormwater Permit Are Premature, Far Too Restrictive and Impractical for Contractors to Implement, AGC Says
Comment Letter Urges EPA to Slow Down and Change Course
 

AGC submitted comprehensive comments to the U.S. Environmental Protection Agency (EPA) on its proposal to mandate drastic changes to the way that construction contractors manage stormwater runoff. EPA intends its new construction general permit (CGP) to replace the one that it adopted just three years ago.

EPA published notice of its draft CGP in the April 25 Federal Register (76 FR 22882).  AGC responded July 11 with a 42-page comment letter expressing serious concern that the new CGP for stormwater runoff would increase the complexity and the cost of complying with its terms and conditions, putting site operators at a new and unprecedented level of risk of non-compliance, including fines of up to $37,500 per day per violation. This affects ALL construction firms EVERYWHERE because states that run their own stormwater permit programs generally follow EPA’s lead in adopting enhanced protections. AGC’s letter urges EPA to slow down, change course, and proceed in an orderly way that better reflects the enormous economic risks as well as the environmental rewards of revising its construction stormwater permit.

AGC urged its members to get directly involved, and more than 150 contractors wrote to EPA using a customizable “template” comment letter that AGC made available on its Legislative Action Center. During the public comment period, AGC conducted extensive outreach to inform the membership of this significant stormwater development and to solicit feedback on the proposed permit modifications, as well as other related issues. 

Over the past month, AGC has published numerous newsletter articles, distributed a list of 26 questions for members to respond to, hosted a free members-only webinar on the proposed permit, and conducted conference calls with the Environmental Forum Steering Committee and Stormwater Task Force members.

Click here to read more about AGC’s response to EPA’s draft Construction General Permit. 

For more information, contact Leah Pilconis at (703) 837-5332 or pilconisl@agc.org. Return to Top

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