Construction Legislative Week in Review
www.agc.org February 16, 2012
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On the Inside
BUDGET
2013 Budget Proposal Ė Policy Priorities
Department of Labor
Tax Provisions
Federal Construction Programs
Environmental Protection Agency
Department of Transportation
TRANSPORTATION
House and Senate Continue Consideration of Transportation Reauthorization Bills
Urge Congress to Pass the Transportation Bill NOW!
President Signs FAA Authorization Legislation
AGC PAC
AGC PAC Wants You to Win a FREE iPAD 2
The Presidential Nomination Rollercoaster Ride Ahead: Arizona & Michigan
AGC EVENTS
Donít Miss Out on the Federal Contractors Conference Early Bird Discount!
AGCís 93rd Annual Convention is Only Five Weeks Away
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BUDGET
2013 Budget Proposal Ė Policy Priorities
 

On Feb. 13, 2012, President Obama released his $3.8 trillion proposed budget for fiscal year 2013.  The budget is not expected to be adopted, but it does set the stage for debates over taxes and spending during what is expected to be a volatile presidential season. Construction spending accounts total about $120 billion. That is up only slightly over 2012’s spending level.  The president’s budget highlighted a heightened focus on enforcement, increased costs for regulation writers and a continuation of the call for higher taxes for “the rich” and “big oil.”  In short the document held little in the way of surprises and seemed a little dated clinging to policies that were rejected by both the House and Senate last year.  Below is additional detail on the budget released this week.

Click here for the entire FY 2013 Budget Request.  Click here for AGC’s summary of FY 2013 construction accounts.

Return to Top
Department of Labor
 

The Department of Labor’s budget would receive slightly less funding than it did a year prior, $12 billion in discretionary funding. However, the proposed budget signals the administration’s acknowledgement that employers are facing expanded enforcement and regulatory activity by federal agencies. Changes to policy and funding within the DOL included:

  • The Wage and Hour Division would receive an increase of $6 million for increased enforcement of the Fair Labor Standards Act (FLSA) and the Family and Medical Leave Act (FMLA), particularly in the area of overtime violations. In addition, worker misclassification is once again a priority with $14 million being allocated to combat the issue, including $10 million for grants to states for identifying misclassification and $3.8 million for 35 new full-time employees for enforcement related specifically to misclassified workers.
  • The Office of Federal Contract Compliance Programs (OFCCP) will increase its regulatory agenda, primarily the promulgation of new rules. The OFCCP is already working on new regulations for federal contractors and subcontractors in the construction industry dealing with women and minorities, as well as new regulations addressing veterans and individuals with disabilities.
  • The Equal Employment Opportunity Commission (EEOC) would receive an increase.  According to the commission’s budget request, the priority for agency resources continues to be litigating systemic cases and maintaining a manageable inventory of cases.
  • The National Labor Relations Board (NLRB) would receive a slight boost in funding.
  • Pensions: The budget proposes to give the Pensions Benefit Guaranty Corporation (PBGC) the authority to adjust premiums and direct the PBGC to take into account the risks that different sponsors pose to their retirees and to PBGC.
In FY 2013, the Occupational Safety and Health Administration (OSHA) is requesting $565,468,000 an increase of $680,470 from the FY 2012 Enacted Level. The FY 2013 request will support the following activities in addition to other agency functions:
  • Safety and Health Standards: OSHA is requesting $21,008,000 and 99 full-time employees (FTE) for this activity, an increase of $1,045,800 over the FY 2012 enacted level. This request includes a program increase of $1,000,000 to support the development of new standards. The agency will continue to develop its new Injury and Illness Prevention Program standard.
  • Federal Enforcement: The Federal Enforcement budget activity request for FY 2013 is $207,075,000 and 1,580 FTE, a decrease of $677,604 and 3 FTE from the FY 2012 enacted level. This includes a decrease of $1,300,000 due to three regional consolidations.
  • Whistleblower Programs: OSHA is requesting $20,739,000 and 156 FTE for this activity, an increase of $4,866,057 and 37 FTE over the FY 2012 enacted level. This request includes a program increase of $4,800,000 and 37 FTE for the improved administration of 21 whistleblower statutes, including Section 11(c) of the OSH Act. Whistleblower Programs was requested as a new budget activity in the FY 2012 president’s budget; resources for this program were previously included in the Federal Enforcement budget activity.
  • Training Grants: In FY 2013, OSHA is requesting $10,709,000 for this activity, the same as in the FY 2012 Enacted Level, to enable Susan Harwood Training Grants to reduce injuries and illnesses through worker voice.
The budget didn’t include any new immigration enforcement mandates but contained some key immigration provisions:
  • Worksite Enforcement: the Department of Homeland Security will focus on worksite enforcement, promoting compliance with worksite-related laws through criminal prosecutions of egregious employer violators, Form I-9 inspections, civil fines, and debarment, as well as education and compliance tools.
  • E-Verify: $112 million is provided to sustain funding for the E-Verify Program operations and enhancements. The FY 2013 Budget includes funding to support the expansion of the E-Verify Self Check program, a voluntary, free, fast, and secure online service that allows individuals in the United States to check their employment eligibility status before formally seeking employment. The Budget also extends E-Verify authorization for an additional year.

For more information, please contact Jim Young at (202) 547-0133 or youngj@agc.org. Return to Top

Tax Provisions
 

The president’s budget also included some significant tax provisions including:

  • President Obama’s budget keeps up the campaign promise of taxing the wealthy by again reiterating his plan to let the Bush-era tax cuts expire for households that earn more than $250,000 a year and calling for the elimination of “unfair” tax breaks for millionaires.  He talks about creating the “Buffett Rule” which would ensure that any household making more than $1 million a year pays at least 30 percent of its income in taxes. This will require a fundamental overhaul of the tax code for individual rates, capital gains, carried interest, and probably the alternative minimum tax.
  • The president does plan to extend 100 percent depreciation and some advanced energy tax credits for renewable energy and some alternative power.  The president also calls for the conversion of the deduction for energy efficient commercial building expenditures to a tax credit and a two-year extension of a modified version of the Build America Bond program. 
  • The plan calls for “Death” or Estate taxes to increase to 45 percent with an exemption of $3.5 million.  The plan also calls for the end of last-in, first-out accounting. 
  • The plan also makes a provision for a contractor to require the use of certified Taxpayer Identification Numbers (TIN) and allow certain withholding from contractors providing services as well as a stronger enforcement regime around independent contractor classification.
  • Democrats and Republicans are both calling for comprehensive tax relief; however, nothing in the administration’s proposal seems likely to break the existing impasse.

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

Federal Construction Programs
 

Military Construction

Overall funding for the Department of Defense (DOD) Military Construction account is $9 billion, which is $4 billion less than the budget for FY 2012, or down about 31 percent.  This large reduction in funding is mostly due to the end of the DOD’s six-year Base Realignment and Closure (BRAC) 2005 program. Below is a breakdown of the funding for each branch of the military:

  • Army - $1,923 billion
  • Navy & Marine Corps - $1,701 billion
  • Air Force - $388 million
  • Defense-Wide - $3,654 billion
  • NATO - $254 million
  • Army National Guard - $613 million
  • Air National Guard - $42 million
  • Army Reserve - $305 million
  • Navy Reserve - $49 million
  • Air Force Reserve - $10 million
  • Chemical Demilitarization Construction, Defense-Wide - $151 million

Corps of Engineers—Civil Works

The total discretionary budget for the U.S. Army Corps of Engineers Civil Works program was $4.7 billion.  This funding level is $270 million – 6 percent – less than last year.  A summary of the Civil Works construction accounts is as follows:

  • General Construction - $1,471 billion
  • Operation and Maintenance - $2,398 billion
  • Mississippi River and Tributaries -  $234 million
  • Flood Control and Coastal Emergencies - $30 million
  • Investigations - $102 million
  • Regulatory Program - $205 million
  • Expenses - $182 million
  • Office of Assistant Secretary of the Army for Civil Works - $5 million
  • Formerly Utilized Sites Remedial Action Program - $104 million

General Services Administration

Funding for the General Services Administration’s construction program increased for 2013 after being zeroed out in the House-passed budget last year. The president’s budget provides $56 million for new construction, an increase of $6 million, or 12 percent.  The repairs and alterations account increased by 76 percent, to $495 million.

Department of Veterans Affairs

Discretionary funding in the president’s budget for the Veterans Affairs (VA) totals $64 billion.  $532 million is provided for major construction and $607 million is set aside for minor construction totaling just over $1 billion in funding for VA construction, which is an increase of $68 million (6 percent).

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

Environmental Protection Agency
 

The president has continued the time-honored tradition of cutting funding for our nation's water infrastructure programs.  Since the Clinton Administration, nearly every presidential budget has included cuts to the Clean Water and Drinking Water State Revolving Funds, with the expectation that funding for these popular programs would be reinstated by Congress.

This year, for the FY 2013 Budget Request, the president requested $ 1.175 billion for the Clean Water State Revolving Fund and $850 million for the Drinking Water State Revolving Fund. This represents a total reduction of $363 million, or 16 percent, for the combined SRF accounts. The president also requested $451 million for the Rural Utilities Service’s Rural Water and Waste Disposal Loan Program, a reduction of $62 million or 12 percent.

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

Department of Transportation
 

President Obama’s FY 2013 budget request for the Department of Transportation rehashes last year’s request. The president renewed his request for $50 billion in the current fiscal year to provide a targeted economic boost and to jump start job creation. In addition, the administration used the budget request to again propose ideas for a long-term legislation to reauthorize the surface transportation programs. The timing of the proposal took away much of its relevance because both the House and Senate are already considering their own versions of transportation reauthorization. 

Despite the fact that the House is working on a five-year reauthorization and the Senate is working on a two-year authorization, the administration proposes a six-year authorization totaling $476 billion. This compares to the Senate’s two-year bill totaling $109 billion and the House’s five-year bill totaling $260 billion. The administration proposes to use the “Peace Dividend” resulting from reduced military spending as a result of the U.S. withdrawal from Iraq and Obama’s plan to bring home American forces in Afghanistan to make up the $231 billion gap between what the Highway Trust Fund gas tax revenue provides and the proposed spending.  The president also renewed his call for a focus on livability and high-speed rail even though neither the House nor the Senate is including significant on either.

For FY 2013 the request is as follows:

Highway Program - Obligation limitation of $41.830 billion, an increase of $2.7 billion over FY 2012 but actually less than the $42.227 proposed by the bill currently on the Senate floor (which is set at FY 2011 funding levels).

Transit Program - A total of $10.836 billion, an increase of $233 million over FY 2012. Included in that amount is $2.235 billion for the new starts and small starts programs an increase of $280 million from FY 2012.

Rail program - A total of $2.698 billion would go to two newly proposed accounts; Network Development and System Preservation. The proposal would merge both Amtrak subsidy accounts with the High Speed and Intercity Passenger Rail accounts.

Aviation Program - A total of $3.35 billion is requested for the Airport Improvement Program.

House Rules to Address Highway Reauthorization Tomorrow: The House Rules Committee is scheduled to meet tomorrow to decide the terms of the debate that will be used when HR 7, the transportation reauthorization bill, is brought up for consideration on Wednesday, Feb.13, 2012. Thus far 241 amendments have been proposed.

AGC will continue to advocate for increases for these critical water infrastructure accounts as the appropriations process moves forward.

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

TRANSPORTATION
House and Senate Continue Consideration of Transportation Reauthorization Bills
 

The House and Senate have begun deliberation on their respective versions of the transportation reauthorization legislation, but long lists of amendments in both chambers have slowed down progress. As a result, final action on both bills has been postponed until after the Present’s Day congressional recess.

In the House, the legislation has been broken into three separate bills that will each be considered independently. The bills will be recombined as each section is approved. One bill allows for expanded leasing opportunities for additional oil and gas drilling in the Gulf of Mexico, in parts of Alaska’s Arctic National Wildlife Refuge, and for shale oil production on public lands. The revenue from these leases will be deposited in the Highway Trust Fund. Another addition to this portion of the legislation is an initiative to expedite construction of the Keystone oil pipeline. This bill is currently under consideration and will be voted on before week’s end. A second portion of the bill that provides an offset to allow for the revenue needed to pay for the bill’s funding levels will be debated next and possibly voted on this week. Speaker John Boehner (R-Ohio) announced a vote on the transportation and funding portions of the bill will be postponed until after next week’s recess. Speaker Boehner indicated that allowing an opportunity for consideration of the nearly 260 amendments that have been offered will take more time than is available this week.

In the Senate, a number of amendments unrelated to the bill have been proposed and brought up for consideration. Senate Majority Leader Harry Reid (D-Nev.) has scheduled a cloture vote for tomorrow that, if successful, will limit debate and allow consideration of the underlying bill to proceed following the recess. Leader Reid said he is confident the Senate will pass its version of the bill and that he views this legislation as the most important being considered by Congress this year.  Senate Finance Committee Chairman Max Baucus (D-Mont.) also announced today an agreement on a package of revenue enhancers necessary to fund the Senate bill. While the Finance Committee met last week and approved a package of revenue enhancers, at that time there was not universal agreement and therefore additional negations were necessary.

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

Urge Congress to Pass the Transportation Bill NOW!
 

Despite the importance of this legislation to the highway and transit construction industry AGC has been told that Senators and Representatives are not hearing from construction contractors about the importance of passing the highway bill now.

Votes on the bills are expected to be close so each vote is important.

Your elected officials need to hear from you today on why this critical legislation needs to be passed.

Click here to find the District Office locations for your members of Congress.  Please call or meet with your Senators and Representative and deliver the following message:

  • Congress has been passing short-term extensions for the last 28 months; they are disruptive to the efficient flow of funds and completion of projects
  • The bill provides a long-term authorization, rather than the short-term extensions we have been forced to endure
  • The bill does not cut funding, it keeps funding at current levels
  • The bill refocuses the program to concentrate the majority of the funding on National Highway Routes
  • The bill eliminates red tape by significantly streamlining the environmental process
  • The bill removes federal mandates which will allow States to fund more projects of national significance
  • The bill also expands opportunities for alternative financing such as TIFIA, SIBs, Tolling
  • The bill will give states and the construction industry the certainty we need to get projects built and put people back to work
  • The bill makes significant reforms in the planning and approval process which will lead faster delivery and more cost effective projects.
  • Jobs will be saved and created when this legislation passes. Failure to pass the bill will subject the program to more short-term extensions and funding cuts.

For additional resources, please visit AGC’s website to “Make Transportation Job #1.” You can also send an email message to your members of Congress by going to AGC’s Legislative Action Center.

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

President Signs FAA Authorization Legislation
 

After more than a four-year delay by Congress and 22 short-term extensions, this week President Obama signed a four-year compromise Federal Aviation Administration (FAA) authorization bill. The legislation includes $13.4 billion for the Airport Improvement Program (AIP) and extends the airline ticket tax. AIP finances airport infrastructure projects. The AIP authorization level was set at $3.35 billion a year, which is the same amount provided to the program in FY 2012 through the appropriations bill but 5 percent less than was provided in FY 2011.

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

AGC PAC
AGC PAC Wants You to Win a FREE iPAD 2
 

Want to be entered to win a free iPAD2? You can by simply completing AGC PAC’s prior approval form at www.agc.org/pac.

Before AGC PAC can ask you to support its cause, it must have prior approval to do so. Completing the form does not obligate you to support the PAC. Rather, it merely allows AGC PAC to fully communicate with you.

For each year you grant the PAC prior approval, you will have a chance to win an iPAD 2 during the PAC Raffle held Thursday March 15 during the AGC Legislative Luncheon at the AGC Annual Convention in Hawaii. You don’t need to be present to win!

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

The Presidential Nomination Rollercoaster Ride Ahead: Arizona & Michigan
 

The Republican presidential nomination rollercoaster ride continues to have its ups, downs, and upside downs. With Senator Rick Santorum recently riding high with victories in Colorado, Minnesota and Missouri, political pundits feared that Governor Mitt Romney’s campaign was again in trouble. But, hold onto your safety rail. Romney even more recently won the caucuses in Maine and an important conservative convention—CPAC—straw poll. As for the next loops on this ride, AGC PAC is closely eyeing the primaries in Arizona and Michigan scheduled on Tuesday, Feb. 28.

Today’s polls show Romney winning Arizona and Santorum taking Michigan—the state where Mitt Romney grew up and his father was a popular governor. However, if this race has shown us anything, it’s that polls taken weeks away from the actual contest are not perfect when it comes to predicting the actual results. Take the Florida primary for example. Nearly two weeks before that contest, Newt Gingrich’s surging in South Carolina led him to a double-digit lead in the Florida polls. The upshot: Romney defeated Gingrich by more than 14 points in Florida.

But how does Romney manage to turn things around so quickly? Two reasons: (1) superior financial backing; and (2) strong campaign organization. The Romney super PAC—called Winning Our Future—has the ability to place millions of dollars in advertising to change the entire tone of the campaign in a state-wide race. As for organization, the Romney campaign has had operatives in states across the country, some since his previous run in 2008. These many of these operatives converge on key states to hone their efforts at the right time.

AGC PAC continues to closely monitor this race and the congressional races for construction-friendly candidates running for federal office.

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

AGC EVENTS
Donít Miss Out on the Federal Contractors Conference Early Bird Discount!
Early Bird Extended Through Next Friday, Feb. 24, 2012
 

The 2012 AGC Federal Contractors Conference will be held April 16-19, 2012, 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 or Federally-assisted 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.

The conference is geared for AGC members who perform a diverse range of projects including building construction for agencies such as the General Services Administration, military construction projects for our Armed Services, highway and transportation projects for our nation, and water resources projects that benefit our nation’s navigation and flood control. AGC continues to inform members from specific industry segments about emerging issues and trends that are relevant to their work.

To learn more about the conference, download the conference brochure and register, please visit www.agc.org/fedcon. Return to Top

AGCís 93rd Annual Convention is Only Five Weeks Away
Invest in your Business, Invest in Yourself, March 13-17, 2012
 

Attending AGC’s 93rd Annual Convention is more than just an opportunity to learn about the latest construction industry best practices or gain insight into new legislative regulations, it’s an investment in the future of your company, career and the construction industry overall.

For today’s Federal Contractors, there will be sessions with representatives from the U.S. Army Corps of Engineers (USACE) and the U.S. Naval Facilities Engineering Command (NAVFAC). RDML Katherine Gregory, Commander, NAVFAC Pacific, will be on hand for this year’s Marvin M. Black Partnering Awards Luncheon and there will be a special presentation by the U.S. Army Corps of Engineers Mississippi Valley Division to report on the devastating floods of 2011 and how USACE will move forward in 2012 to reinforce the Mississippi Rivers and Tributaries system.

In addition, there will be sessions on management and financial best practices, to the impact technology and energy trends will have on the construction industry, to expert speakers on risk mitigation techniques. You will gain practical knowledge and know-how to improve your company’s bottom-line performance and as well as your own. 

Nowhere is the return on your investment in AGC or the construction industry greater than at the AGC Annual Convention. What takes place here helps to shape our industry.

Play a part by registering for the convention here. Return to Top

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