Construction Legislative Week in Review
www.agc.org March 29, 2012
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On the Inside
BUDGET
House Passes FY 2013 Budget Resolution
TRANSPORTATION
Congress Passes 90-Day Transportation Extension
WATER/ENVIRONMENT
Senators Introduce Legislation to Halt Jurisdictional Overreach on Wetlands Guidance
HEALTHCARE
Supreme Court Hears Arguments on Constitutionality of Health Care Law
AGC EVENTS
AGC Federal Contractors Conference is Only 2 Weeks Away
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BUDGET
House Passes FY 2013 Budget Resolution
 

This afternoon by a margin of 228-191 – with ten Republicans voting against – the House of Representatives passed the Republican budget resolution for fiscal year (FY) 2013, the "Path to Prosperity."   The resolution remains unchanged from the proposal voted out of the Budget Committee last week after the defeat of several amendments offered during the debate of “The Path to Prosperity”.  A summary of the budget can be found here

The annual budget resolution is supposed to set the overall spending limits appropriators will use when they begin work on the annual spending legislation.  The resolution addresses every aspect of the federal budget including discretionary spending, entitlement programs and taxes. 

The budget resolution would set the discretionary spending cap at $1.028 trillion.  The cap is the same as last year's House Republican Budget but $19 billion below the $1.047 trillion cap set in the Budget Control Act passed last August.  The resolution calls for using a process known as budget reconciliation to cut more than $200 billion in mandatory spending  over 10 years and eliminating $55 billion in planned defense cuts through sequestration (as outlined in the Budget Control Act).  In terms of taxes, the budget assumes no new tax increases, consolidates the six current tax brackets into two brackets of 10 and 25 percent, repeals the Alternative Minimum Tax, and reduces the corporate tax rate to 25 percent.

The budget calls for a reduction in transportation funding investment from $88.6 billion in FY 2012 to $57.1 billion in FY 2013, a reduction of $31.5 billion (36 percent). The budget does not identify the specific categories of transportation cuts. However, the proposal provides for a “reserve fund” that would allow transportation spending to increase if Congress enacts a measure that, “maintains the solvency of the Highway Trust Fund, but only if such measure would not increase the deficit over the period of fiscal years 2013 through 2022.”

By allowing for the “reserve fund” to increase transportation funding if revenue is raised, this year’s budget resolution is more flexible than last year’s resolution which limited funding from the Highway Trust Fund to levels that could be supported by the revenue coming into the fund. In addition, the FY 2012 House budget resolution specifically said the federal motor fuels tax would not be increased and transfers from the general fund into the Highway Trust Fund were prohibited. The net result of that language would have required a 30-35 percent cut in future highway and transit funding.

The budget’s overall impact on federal construction accounts is yet to be determined.  It can be assumed, however, based on the overall budget number that federal construction accounts will once again see an overall cut in funding.  Ultimately, the appropriators will decide what discretionary programs get funded and at what levels. 

Throughout the budget and appropriations process, AGC will continue to educate members of Congress on the importance of continued investment in our federal construction programs.

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

TRANSPORTATION
Congress Passes 90-Day Transportation Extension
 

Facing expiration of the latest extension of transportation authorization on March 31, the House and Senate today passed a 90-day extension (the 9th) allowing for funding of the highway and transit programs and collection of the federal motor fuels taxes (the gas tax) to continue through the end of June. The bill will now go to the president who is expected to sign it before the current extension expires. With both the House and Senate scheduled to go into recess on Friday for the next two weeks, the action was necessary to avoid a shutdown of the Federal Highway Administration (FHWA) and a halt of reimbursements to states for ongoing highway construction contracts.  Earlier this week, AGC strongly made the case for Congress to just get to work and pass the bill.

The action follows a week of highly partisan bickering in the House and several failed attempts to pass an extension. The debate centered around enactment of a multiyear authorization bill rather than the 90-day extension. HR 7, a five-year authorization, is awaiting floor consideration by the full House, however, House Republican leadership has been unable to garner enough support for its passage. Since the Senate completed action on MAP-21, a two-year authorization bill, on March 14 by a bipartisan vote of 74-22, House Democrats have been calling for the House to take up the Senate passed bill, but with no consensus on how to address the program in the long term, an extension was approved to avoid program disruption. Despite the partisan debate in the House, 37 Democrats joined with the Republicans to approve the extension on a vote of 266-158.

Both bills will essentially fund the highway and transit programs at the FY 2012 appropriated level, take steps to shore up the short term viability of the Highway Trust Fund and make significant policy and program reforms. Following today’s vote, AGC and our Transportation Construction Coalition partners contacted Congress pointing out that, “While we supported the extension approved today to prevent a shutdown of essential infrastructure improvements across the nation, that support should not be confused as acceptance of inaction on a multi-year reauthorization bill.  Our members are growing increasingly frustrated that Congress seems incapable of passing critical legislation that improves the flow of commerce and promotes economic growth.  The construction industry continues to suffer from chronic unemployment and the continued delay in enacting a longer term bill prohibits them from expanding their workforces and investing in new equipment.  It is unfortunate that a program that has traditionally enjoyed strong bipartisan support is being used as a means to advance political instead of policy objectives. “The federal highway and public transportation programs have been governed by extension for 30 months.  Congress can and must do better.”  

 AGC will continue to press for Congress to immediately complete action on a long term bill when it returns from the Easter recess.

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

WATER/ENVIRONMENT
Senators Introduce Legislation to Halt Jurisdictional Overreach on Wetlands Guidance
 

Senators Barrasso (R-Wy.), Inhofe (R-Okla.), Heller (R-Nev.) and Sessions (R-Ala.), along with 26 of their colleagues, introduced legislation to stop the Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (USACE) from implementing its guidance on Clean Water Act jurisdiction.

In May 2011, the EPA and Corps issued draft guidance on “Identifying Waters Protected by the Clean Water Act.”  This guidance document, which was sent in final form to the Office of Management and Budget on Feb. 21, 2012, significantly changes and expands what water features are considered protected under the Clean Water Act. The guidance also ignores the fundamental premise in the Act that there are waters subject to the exclusive regulatory jurisdiction of the states. The final guidance is overly broad and expands federal jurisdiction well beyond the intent of Congress and the limitations recognized in recent Supreme Court decisions. This increase in jurisdiction could increase construction costs and project delays with expensive permits that take years to obtain. There is already an extensive backlog of these Section 404 permits, and this will likely add to it.

AGC is working with our industry partners in the Waters Advocacy Coalition to gather support for this bill. The coalition sent its letter of support the day the bill was introduced.

Click here for the press release.

For more info, please contact Scott Berry at (703) 837-5321 or berrys@agc.org or Leah Pilconis at (703) 837-5332 or pilconisl@agc.org. Return to Top

HEALTHCARE
Supreme Court Hears Arguments on Constitutionality of Health Care Law
 

Last week marked the second anniversary of the Affordable Care Act.  The 2010 legislation makes employer-sponsored health care more expensive and more complex, and will make it more difficult for both small and large businesses to offer health care to their workers, which largely goes into effect in 2014.

Earlier this week, the U.S. Supreme Court heard arguments on the constitutionality of the law. The court’s decision is expected to be made in June and will likely affect the tenor of the election season. The court is deciding whether the individual mandate in the health care law is constitutional. The court will also decide if the plaintiffs have the standing to be heard on the penalty charges issues for those that don’t obtain their own health care plans.  If the individual mandate is determined to be unconstitutional, it is unclear how this will affect the bill, since this mandate is a key component. The court will also determine if the expansion of the Medicaid program is constitutional. The court is not specifically addressing the employer mandate. At this time, it is unknown what the courts ultimate decision will be or how the outcome could affect the November elections. Also unknown is how Congress may address the law if part or all is deemed unconstitutional by the court.

AGC will continue to follow the court’s decision and work with Congress on making the law more flexible for employers.

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

AGC EVENTS
AGC Federal Contractors Conference is Only 2 Weeks Away
Donít Miss Out Ė Register Today!
 

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

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