Construction Legislative Week in Review
www.agc.org September 15, 2011
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On the Inside
TAX
AGC Testifies at IRS on 3 Percent Withholding, President Proposes Additional One-Year Delay
House Passes Bill to Block National Labor Relations Board from Influencing Relocations, Shut Downs and Transfers of Employees and Operations
TRANSPORTATION
Senate Impasse on Transportation Extensions Threatens to Shutdown FAA Programs
BUDGET
House of Representatives Introduces Continuing Resolution Measure
Senate Moves Forward on USACE, Reclamation FY 2012 Funding
ECONOMIC STIMULUS
President Obama Send His Jobs Bill To Congress
DEFICIT REDUCTION
Super Committee Holds First Hearing
SPECIAL ELECTIONS
NV-2 & NY-9 Special Elections: Political Anomalies or Bellwether?
WORKFORCE
National E-Verify Legislation Being Considered By House Judiciary Committee
FEDERAL CONTRACTING
2005 BRAC Quietly Winds Down After Six Years of Construction Innovation
AGC EVENTS
Register and save now for the 15th Annual AGC/CFMA Construction Financial Management Conference
Registration Open for AGC’s Joint Highway and Utilities Contractors Issues Meeting
TAX
AGC Testifies at IRS on 3 Percent Withholding, President Proposes Additional One-Year Delay
 

Monday, Sept, 12, 2011, AGC’s CEO, Steve Sandherr, testified at a public hearing at the Internal Revenue Service (IRS) on proposed regulations to change the effective date of the 3 percent withholding mandate to Jan. 1, 2013 for new and materially modified contracts, and to Jan. 1, 2014 for all contracts (new and existing).  AGC expressed support for the implementation delay and opposition to imposing the 3 percent government withholding mandate on existing contracts on Jan. 1, 2014. 


Also on Monday, the President released details of his American Jobs Act.  Included in the proposal is a provision to extend date for imposition of 3 percent withholding one additional year, to Jan. 1, 2014.


AGC continues to push for full, permanent repeal of the 3 percent withholding mandate.


Next week, AGC chapter executive and chapter leadership will be lobbying members of Congress to repeal 3 percent withholding.  House Republican leadership has identified repeal of the 3 percent government withholding mandate as a priority this fall (including the Speaker in an economic address today) and may consider the legislation as early as October.  Currently there are 241 – a majority – of House members signed on as cosponsors of H.R. 674, a bill to repeal 3 percent government withholding. 


While passage of 3 percent government withholding repeal is expected in the House when it comes up for a vote, the Senate has yet to schedule debate on similar legislation there despite a record 30 cosponsors. 


AGC will work closely with House Republican leadership as it prepares for debate on 3 percent government withholding.  AGC continues to urge its members and chapters to contact their Senators and Representatives to ask that they cosponsor legislation to repeal the 3 percent government withholding mandate.


Use AGC’s 3 percent withholding website to find additional resources including talking points, IRS regulations, videos on the impact of this legislation, letters sent to Congress by AGC, and ways to become involved.  Please continue to make contact with your legislators and encourage your employees to do the same by using AGC’s Legislative Action Center.


For a list of cosponsors in your state, please click here.


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

House Passes Bill to Block National Labor Relations Board from Influencing Relocations, Shut Downs and Transfers of Employees and Operations
 

The bill, H.R.2587, the Protecting Jobs from Government Interference Act passed the House by a vote of 238 to 186.  The bill directed at the NRLB’s response to Boeing moving a new production facility to South Carolina.   Seven Republicans voted against the bill while eight Democrats voted for it.  The Republicans who voted against it are Gibson (NY), Grimm (NY), LaTourette (OH), Fitzpatrick (PA), McKinley (WV), Meehan (PA) and Young of Alaska.  The Democrats who supported the bill were Barrow (GA), Boren (OK), Cooper (TN), Cuellar (TX), Matheson (UT), McIntyre (NC) Ross (AR) and Shuler (NC).   The entire South Carolina delegation supported the bill with the exception of Rep. Clyburn (D-SC).   AGC supported the bill, but it faces an uphill battle in the Senate.

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

TRANSPORTATION
Senate Impasse on Transportation Extensions Threatens to Shutdown FAA Programs
 

Legislation to extend the federal highway and transit programs and the programs of the Federal Aviation Administration has passed the House and Senate. HR 2887, which would extend the SAFETEA-LU authorization for six months until March 31, 2012, and the FAA authorization for four and a half months until Jan. 31, 2012, was approved Tuesday by the House.  The bill would authorize funding at current levels and allow collection of the federal motor fuels tax and the airline ticket tax to continue.

When the bill came to the Senate, Senator Tom Coburn (R-Okla.) objected to the legislation being brought under a unanimous consent motion. Sen. Coburn was seeking to amend the bill to eliminate the mandatory 10 percent set-aside of Surface Transportation Program (STP) highway formula funding for "transportation enhancements." The enhancement funding has been largely used to fund bike trails, pedestrian facilities, bus shelters, transportation museums and other similar projects. In addition, Sen. Rand Paul (R-Ky.) sought to cut the funding levels for highways, transit and aviation.

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

BUDGET
House of Representatives Introduces Continuing Resolution Measure
 

The House has begun consideration of a continuing resolution (CR) that would allow the federal government to continue operating through Nov 18.

With the House approving only six spending measures so far and the Senate failing to pass any, the CR has been long expected to materialize. The CR appears to finance the government in a manner consistent with the debt ceiling agreement that was recently enacted. That deal allowed for discretionary spending at $1.043 trillion for all of FY 2012.

The bill also adds a total of $3.65 billion in funding for the Federal Emergency Management Agency (FEMA). The bill allows for $1 billion to be spent in FY 2011 and another $2.65 billion for FY 2012. Democrats were critical of the move as they have pushed for a minimum of $6 billion in funding to help pay for the natural disasters the U.S. has endured this year.  The disaster spending if offset by an across-the-board cut of about one and one-half percent and cuts to a couple of other government programs.

AGC will continue to closely monitor this developing issue and encourage Congressional leaders to move on all FY 2012 Appropriations bills to bring certainty and predictability to the numerous Federal construction programs.

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

Senate Moves Forward on USACE, Reclamation FY 2012 Funding
 

On Sept. 7, 2011, the Senate Appropriations Committee approved, by a 28-2 vote, the FY 2012 Energy and Water Appropriations Bill. AGC has prepared a summary of the impact of this legislation on the U.S. Army Corps of Engineers - Civil Works program and the Bureau of Reclamation.  To view the Committee report, please click here.

Army Corps of Engineers - Civil Works

The legislation would provide $4.864 billion for FY 2012. This figure is $291 million above the President’s budget request and $101 million more than the House bill. Funding would be as follows: 

  • General Investigations would receive $125 million, which is $2 million below  FY 2011
  • Construction, General funding would receive $1.610 billion, which is $180 million below FY 2011.
  • The Mississippi River and Tributaries would receive $250 million, which is $8 million above FY 2011.
  • Operations and Maintenance would receive $2.360 billion, which is $6 million below FY 2011.
  • The Regulatory Program would receive $193 million, which is $3 million more than FY 2011.

Bureau of Reclamation

Asserting that the budget request for the Bureau of Reclamation is woefully inadequate to meet the water infrastructure needs of the Western states, the Committee would provide $885.67 million for the water and land related resources program, as compared to the Administration’s request of $805 million.  Commenting on Reclamation’s evolution since 1902 into a contemporary water management agency, the Committee highlighted the nationwide impacts and benefits of the program. 

A Note on Earmarks

Due to this ongoing debate, the Senate Appropriations Committee refused all congressionally directed spending requests for FY 2012. This means the administration has total discretion as to how the funding appropriated by the Committee will be spent as it relates to individual studies and projects. The Committee still detailed the traditional tables for each of the four major accounts delineating 876 line items requested by the President in the FY 2012 budget request. However, the Committee decided that due to inadequacies in the administration’s budget request, it has inserted some additional line item funding under the nationwide heading for specific categories of studies or projects that the Committee believes were underrepresented in the administration’s budget request. The Corps and Bureau of Reclamation would have discretion within the guidelines provided in each account as to which line items would receive this additional funding.

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

ECONOMIC STIMULUS
President Obama Send His Jobs Bill To Congress
 

This week President Obama sent Congress his jobs plan, the American Jobs Act, which he outlined in a speech last week before a joint session of Congress.  The American Jobs Act is a $447 billion jobs creation proposal consisting of a combination of tax cuts ($253b), extension of unemployment benefits ($35b) and investments in transportation infrastructure and school-renovation projects ($105b). President Obama said on Monday that the plan will be paid for with tax increases for individuals making more than $200,000 and couples earning more than $250,000 and with elimination of tax provisions that reduce the costs of energy exploration and extraction). The President also asked that the Joint Select Committee on Deficit Reduction (aka Super Committee) to come up with additional deficit cuts necessary to offset the increased funding.  President Obama said that building a world-class transportation system is part of what made the United States an economic superpower and therefore called for needed investments in infrastructure including:

  • $50 billion for highway, transit, high-speed rail and aviation projects
  • $30 billion for investment in school infrastructure and modernizing community colleges
  • $10 billion for establishing a National Infrastructure Bank capitalized with $10 billion. The bank would finance transportation, water, and energy infrastructure projects.
  • $15 billion to rehabilitate and refurbish hundreds of thousands of vacant and foreclosed homes and businesses in an effort to put construction workers back to work
  • $10 billion to expand high-speed wireless access to at least 98 percent of Americans
  • $65 billion to temporarily eliminate employer payroll taxes on wages for new workers or raises for existing workers, and cut the payroll tax to 3.1 percent for employers on the first $5 million wages
  • $175 billion to expand the payroll tax cut passed last Dec. by cutting workers payroll taxes in half in 2012.
  • $5 billion to extend 100 percent expensing, allowing all firms to take an immediate deduction on investments in new plants and equipment.

AGC supports the recognition that investing in our nation’s infrastructure is a true job creator; however, we are concerned that some of the elements of the President’s plan would not have an immediate impact on the employment situation in the construction industry.  We also believe that the money in the proposal for transportation investment would be better spent as a supplement to the available funding in the highway trust fund so a muliti-year surface transportation bill could be finalized. For example, the creation of a National Infrastructure Bank could take years to set-up and capitalize before any infrastructure projects begin.  A complete breakdown of the President’s plan can be found here.

As President Obama has embarked on his nationwide tour pushing for passage of the American Jobs Act, the plan has received mixed responses from both Democrats and Republicans.  Republican opposition has focused on the President’s inability to, as of yet, identify reasonable ways to pay for such an ambitious plans other than “taxing the job creators”.  Democratic opposition has come from a small group of both conservatives and liberals.  Conservative Democrats, like Republicans, are concerned over increasing taxes to pay for the plan.  Liberal Democrats worry over what the long-term effects of extending the payroll-tax cut will have on Social Security.

The path forward for the American Jobs Act in Congress remains to be seen.  It is likely that the Democratic controlled Senate could introduce the President’s plan (or something closely resembling it), and force a vote while the Republican controlled House may take pieces of the plan that have bipartisan support and move those forward.  Some of the bipartisan supported pieces include: the payroll tax-cut, passing free trade agreements, certain infrastructure initiatives, and a 1-year delay in the 3 percent withholding on certain government contracts that AGC continues to fight to repeal.

AGC will continue to stress for the enactment of policies included in the American Jobs Act that has the greatest direct impact on the construction industry.

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

DEFICIT REDUCTION
Super Committee Holds First Hearing
 

The Joint Select Committee on Deficit reduction held its first policy hearing on Tuesday, Sept. 13, with testimony from the non-partisan Congressional Budget Office Director Douglas Elmendorf on the drivers of the debt. The panel, which is tasked with finding between $1.2 trillion to $1.5 trillion in savings over the next two years, was told by Director Elmendorf that if the committee ultimately recommends specific changes to programs such as Medicare, Medicaid, or Social Security, his CBO analysts would need several weeks to calculate their budgetary impact.  Meaning, he said, that the committee likely needs to get a draft of its recommendations ready by early November - even though its official deadline is Nov. 23.

Today, the committee held its first full-member closed door session to work on policy positions outside of public hearings.  In addition, this closed door hearing is likely result in the announcement of the next round of public hearings.

As for the hearing itself, both Republican and Democratic members of the committee spent much of the meeting attempting to have Director Elmendorf endorse their respective views on the best deficit reduction path forward.  The private meeting raises hopes members can actually discuss substantive policy.

The final package of recommendations is officially due Nov. 23. It will be given expedited consideration in both chambers and go for a vote by Dec. 23.  If Congress fails to adopt the package; automatic cuts worth $1.2 trillion would be triggered starting in January 2013.

AGC continues to meet with the Members of Congress who serve on the committee, asking for continued infrastructure investment along with tax and entitlement reform is included in their deficit reduction plan.  In addition, several AGC chapters and members, who will be participating in the National Chapter Leadership Meeting in Washington, DC next week, will have the opportunity to reiterate the AGC message when they meet with Members of Congress on the Joint Select Committee.

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

SPECIAL ELECTIONS
NV-2 & NY-9 Special Elections: Political Anomalies or Bellwether?
 

Republicans won special elections for House seats in Nevada and New York on Tuesday, Sept. 13.  Former state-Senator Mark Amodei (NV-R) convincingly defeated state Treasurer Kate Marshall (D-NV) by 22 percent in Nevada’s 2nd Congressional District, and entertainment businessman Bob Turner (R-NY) upset state Assemblyman David Weprin (D-NY) by eight points in New York’s 9th Congressional District.

In Nevada, political soothsayers like Charlie Cook originally called the race a tossup, citing Marshall’s access to Senator Harry Reid’s political infrastructure and President Obama’s loss of the district by a mere 89 votes in 2008. However, word on the ground from AGC members in Nevada, who secured AGC PAC dollars for now-Rep. Amodei, proved better than the Beltway oracles.  In this former district of appointed Senator Dean Heller (R-Nev.), Republicans outnumbered Democrats by 30,000 registered voters. That edge, along with President Obama’s disapproval rate, proved insurmountable for Marshall.

Meanwhile, on the other side of the country, no one, except maybe Bob Turner himself, initially thought a Republican could win a New York City congressional seat. In NY-9th, Democrats hold a 3-to-1 voter registration advantage, and the last time a Republican won there was 1923. The combination of former-Rep. Anthony Weiner’s (D) resignation from the seat amid scandal, President Obama’s position on Israel in the considerably Jewish district, and a confused Weprin campaign provided the perfect storm for Turner’s unforeseen victory.

The question remains: Are these A) political anomalies or B) bellwethers? The answer: C, none of the above. Special elections, like these two, provide a political data point at a specific point in time, like elections in November. Their importance rests less with predicting future elections than pinpointing the current political temperature. Only a few months ago, President Obama and Congressional Democrats touted an upset victory over Republicans an upstate New York special election as an astounding denouncement of the Republican agenda, bolstering their own re-election prospects.

The fact is, the November 6, 2012 election is 407 days away. Much can change in 407 days. Rest assured, AGC PAC will continue to monitor the political field for construction friendly candidates, like Rep. Mark Amodei, who AGC members support and who support our industry’s federal legislative priorities.

For more information, please contact Jimmy Christianson at 202-547-5013 or christiansonj@agc.org. Return to Top

WORKFORCE
National E-Verify Legislation Being Considered By House Judiciary Committee
 

On Sept. 15, 2011, the House Judiciary Committee began consideration of H.R. 2885, the Legal Workforce Act, sponsored by Chairman Lamar Smith (R-Texas).  The legislation would require all U.S. employers to use E-Verify. 

E-Verify is not currently mandatory, federal contractors are required to use the system and many businesses voluntarily use the program.  Nearly 290,000 American employers use E-Verify and an average of 1,300 new businesses sign up each week. 

AGC has expressed support for the legislation, because the bill has a clear safe harbor for employers that act in good faith. The legislation also has support from a broad coalition of industry partners, including the U.S. Chamber of Commerce, National Association of Home Builders, National Restaurant Association, American Council on International Personnel, Society for Human Resource Management, Associated Builders and Contractors, National Council of Chain Restaurants, National Roofing Contractors Association, Tree Care industry Association, International Franchise Association, American Hotel and Lodging Association, American Staffing Association, NumbersUSA, and Federation for American Immigration Reform.  It is not clear if the legislation will be considered by the House this year.


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

FEDERAL CONTRACTING
2005 BRAC Quietly Winds Down After Six Years of Construction Innovation
 

Sept. 15, 2011 marks end of the Department of Defense’s (DOD) six-year Base Realignment and Closure (BRAC) 2005 program. Without question, it was the largest infrastructure investment program the U.S. Army has seen since World War II, with roughly $18 billion in military construction projects executed by the U.S. Army Corps of Engineers.

The BRAC commission made 182 commission recommendations about how to make efficiencies in the Department of Defense to the president, who presented them to Congress and those recommendations became law in September 2005. The U.S. Army Corps of Engineers (USACE) and the U.S. Naval Facilities Engineering Command (NAVFAC) were responsible for executing the vast majority of the recommendations.

This particular BRAC was an important part of our military historic transformation and has affected many commands worldwide. BRAC 2005 enabled the military to reshape its infrastructure to support its forces. It repositions our forces, making them more relevant and combat ready for the combatant commander. It also creates doctrinal efficiencies by consolidating schools into centers of excellence and headquarters and other activities into joint or multifunctional installations for efficiency and cost control.

The 2005 BRAC also challenged the construction industry like never before. It was by far the largest in scope and complexity than the four prior rounds of facility closure and realignment (1988, 1991, 1993, and 1995). It did, however, provide the industry an opportunity to promote its best practices as the DOD agencies looked to the industry to meet multiple demands, including increased sustainability requirements, utilization of Building Information Modeling (BIM), and a significant change in how contracts are awarded and administered. The focus moved away from traditional bidding to a more integrated, best-value approach. It also encouraged design and construction firms to learn to better work as integrated teams on a larger project delivery team.

AGC is proud of its efforts to partner with USACE and NAVFAC on this endeavor and will continue to collaborate and innovate with the DOD construction agencies to meet the needs of our armed forces.

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

AGC EVENTS
Register and save now for the 15th Annual AGC/CFMA Construction Financial Management Conference
Oct. 26-28, 2011, Las Vegas, Nev.
 

The 15th Annual AGC/CFMA Construction Financial Management Conference, jointly sponsored by the AGC and the Construction Financial Management Association (CFMA), offers programs and workshops designed specifically for financial professionals in the construction industry. 

The three-day conference features 38 interactive sessions covering the latest industry issues and their financial implications.  Participants may earn up to 20 continuing professional education (CPE) credits. 

This year’s sessions include:

  • Construction industry market trends
  • Tax, surety, financial, and credit market updates
  • Health care reform
  • Fleet management
  • Construction insurance and risk management
  • Financial statements
  • Construction information technology
  • Ethics and fraud
  • Crisis survival

Owners, chief financial officers, controllers, treasurers, certified public accountants, auditors, consultants, bankers, sureties, and others interested in the construction financial management will greatly benefit from this conference. Discounts are available for first-time attendees and for subsequent registrations from the same firm. 

For more information, and to register on-line, visit www.agc.org/AGC_CFMA. Return to Top

Registration Open for AGC’s Joint Highway and Utilities Contractors Issues Meeting
Nov. 10-12, 2011, Indian Wells, Calif.
 

The premier event of the year for contractors involved in highway, bridge and utility construction is scheduled for Nov. 10-12, 2011 in the Palm Springs Valley of California. The Highway and Utilities Contractors Issues Meeting will address the many issues that will be impacting your business over the next year and in years to come.

Topics that will be addressed included:

  • Congressional outlook for highway and water authorization legislation
  • Federal highway and water infrastructure funding
  • Successful efforts to increase state highway funding
  • Responding to Labor Compliance Audits
  • EPA’s new storm water regulations practical strategies to comply
  • Project Case Studies
  • Are veteran’s business preferences on the horizon
  • Contractor’s view working as part of a public-private partnership
  • Other recent developments

Date: Nov. 10-12, 2011
Where: Indian Wells, Calif.
Hotel: Miramonte Resort and Spa
Schedule: The meeting begins with a shotgun start of the golf tournament at 12:30 pm on Thursday, Nov. 10 and concludes at Noon on Saturday, Nov. 12.

To register and for information on hotel reservations, please click here.

For more information, please contact Brian Deery at (703) 837-5319 or deeryb@agc.org, or Scott Berry at (703) 837-5321 or berrys@agc.org Return to Top

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