Construction Legislative Week in Review
www.agc.org August 2, 2012
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On the Inside
BUDGET
Deal Reached on 6-Month Spending Bill, Vote in September
TAX
House Approves Extending Bush Tax Cuts for One Year, Details Republican Framework for Reform Next Year
Senate Finance Committee Opens Debate on Extending Tax Provisions
LABOR
Analysis of Administrationís Proposed Hiring Goals Shows New Rules Are Not Necessary
FEDERAL CONTRACTING
Federal Contractors to Report Executive Compensation & Subcontractor Awards Under New Rule
ENVIRONMENT
Legislation Creating Clean Water Trust Fund Introduced
House Punts on Long-Term Dam Funding
TRANSPORTATION
US DOT Moves Aggressively to Promote TIFIA Program
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BUDGET
Deal Reached on 6-Month Spending Bill, Vote in September
 

Before Congress left town this week for their summer recess, they struck a deal on funding for the government through the first quarter of 2013.  The six-month continuing resolution (CR), which will be voted on during one of the eight legislative work days in September, is necessary because Congress has failed to enact any of their FY 2013 appropriations bills. The House has passed seven bills, but the Senate has passed none.

The agreement allows lawmakers to avoid engaging in ugly spending fights before the upcoming election and during what is already expected to be a hectic lame duck session following the election.  The CR is expected to fund the government at prorated 2013 spending levels set by the Budget Control Act last August.  It does nothing to avert the automatic cuts that would take place under sequestration if a long-term budget deal is not reached by Jan. 2.

This deal punts the real spending fight to March 2013.  Two years ago, Congress passed a six-month CR before enacting an omnibus appropriations bill which cut a total of $40 billion in spending – $20 billion of which came from federal construction programs.  During the next 6 months AGC will continue to advocate for and educate members of Congress on the economic benefits of continued investment in federal construction accounts.

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

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TAX
House Approves Extending Bush Tax Cuts for One Year, Details Republican Framework for Reform Next Year
 

The House passed H.R. 8, which extends the expiring Bush tax cuts, by a vote of 256-171 (19 Democrats voted for the bill and one Republican voted against it). H.R. 8 is the Republican response to the Democrats package that passed last week. These bills are both designed to stake out positions for Election Day – Republicans are for extending all the tax cuts and Democrats are for extending all tax cuts for those families earning less than $250,000.  Both parties are signaling that there is no chance they will compromise before Election Day to provide some certainty to the economy.  AGC has urged the House, Senate and the President to extend all expiring and expired tax provisions for a year to provide economic certainty and to give Congress time to consider comprehensive tax reform.

The House also passed H.R. 6169, the Pathway to Job Creation through a Simpler, Fairer Tax Code Act of 2012. This legislation provides an expedited process for considering comprehensive tax reform in the first half of next year, if a tax reform package meets the following criteria: consolidation of six tax rates into two rates of 10 percent and not more than 25 percent; reduction in the corporate tax rate to 25 percent; repeal of the Alternative Minimum Tax; broadening of the tax base to maintain revenue of 18 to 19 percent of GDP; and change from worldwide to territorial tax system.  This provides a framework for tax reform, in addition to an expedited process, and provides an idea where the negotiations will begin on tax reform after Election Day.

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

Senate Finance Committee Opens Debate on Extending Tax Provisions
 

The Senate Finance Committee began consideration of a package of “tax extenders” (tax provisions that are typically renewed annually). The base bill extends about 50 provisions that impact individuals (the biggest of which is the Alternative Minimum Tax patch at about $98 billion), businesses (which includes research and experimentation and section 179 expensing), and energy proposals (such as credits for biodiesel).  About 20 provisions that have typically been included in the annual extenders were not included in the package (although they may be added back as the package is considered). The package will initiate discussions over which temporary provisions should be extended.  The temporary nature of the tax code is the cause of the fiscal cliff.  Comprehensive tax reform will require a careful examination of rates, which the Senate debated last week and the House debated this week, with the “extenders” being debated in the finance committee today.  Although Republicans and Democrats are currently in disagreement on how to achieve comprehensive tax reform, it is important both parties begin discussions now so a resolution can be reached after Election Day.   

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

LABOR
Analysis of Administrationís Proposed Hiring Goals Shows New Rules Are Not Necessary
 

A study released Aug. 1, 2012 on Department of Labor enforcement data shows no justification for the costly and complex rules proposed by the Office of Contract Compliance Programs (OFCCP) governing the hiring of veterans and people with disabilities. The analysis found that significantly less than one percent of federal contractors covered by the rule may have discriminated against a veteran or person with a disability at any point in the past eight years.

AGC has opposed OFCCP’s proposed rules because they would create new numerical benchmarks for each federal contractor and subcontractor establishment, a 7 percent hiring goal for these classes of workers, along with numerous recordkeeping requirements. In addition to a lack of evidence of discrimination for these individuals by federal contractors, AGC has also highlighted that the administration has significantly underestimated the cost of the proposed new rules.  To learn more, please visit the AGC website.

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

FEDERAL CONTRACTING
Federal Contractors to Report Executive Compensation & Subcontractor Awards Under New Rule
 

A final rule to implement a Federal Funding Accountability and Transparency Act requirement affecting federal contractors will go into effect on Aug. 27, 2012. Under the new rule promulgated by the Federal Acquisition Regulation (FAR) Council, federal contractors will be required to report the names and total compensation of the five most highly compensated officers under certain circumstances, as well as awards to first-tier subcontractors above $25,000.

The new FAR section 52.204-10 burdens prime contractors with reporting not only their top five paid executives, but also their first-tier subcontractor’s top five paid executives when the subcontract has a value of $25,000 or more. A prime contractor must report this information for itself and/or for its first-tier subcontractor when either contractor received: (1) 80 percent or more of its annual gross revenues from federal contracts, subcontracts, and other forms of federal financial assistance and(2) $25 million or more of its annual gross revenues from federal contracts, subcontracts, and other forms of federal financial assistance. Executive compensation need not be reported if the public has access to the information through certain periodic reports filed under the Securities Exchange Act of 1934 or the Internal Revenue Code.

When the FAR Council first solicited comments on the interim rule in 2010, AGC expressed its concerns with the potential burden on federal contractors. Among those concerns, AGC noted that many small business contractors lack the infrastructure to track such information and that primes should not be responsible for reporting subcontractor information. In the comments to the final rule, the FAR Council admits the financial burden and further clarified the definition of “first-tier subcontractor.” However, the Council did not alter the prime’s duty to report the subcontractor information, stating that “[t]he Federal Government has no privity of contract with subcontractors and is therefore reluctant to establish communication channels that could potentially be construed as creating a contractual relationship.”

For more information, please contact Jimmy Christianson at 703-837-5325 or christiansonj@agc.org. Return to Top

ENVIRONMENT
Legislation Creating Clean Water Trust Fund Introduced
 

Rep. Earl Blumenauer (D-Ore.) introduced legislation that would create a trust fund to be used to assess user fees on water users and products that affect the water stream in attempts to generate around $9 billion per year to pay for water infrastructure projects. To generate $9 billion annually, the bill proposes fees at the manufacturer level on bottled beverages, pharmaceuticals, and flushable products (personal hygiene, toiletries, cooking oils, etc.). None of these groups are supportive of the legislation and the bottlers have come out strongly opposed to paying into the fund. Differing from the version introduced last Congress; this legislation directs funds only to the EPA-administered Clean Water (waste water) State Revolving Fund and lacks a blanket tax on corporations. The bill (H.R. 6249) was introduced without cosponsors and is unlikely to pass the Republican-controlled chamber.

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

House Punts on Long-Term Dam Funding
 

On Aug.2, the House of Representatives passed a short-term, $383 million drought disaster relief bill in lieu of a multi-year, comprehensive farm bill that includes critical flood protection funding. Democrats opposed the cuts to food stamps and Republicans were opposed to some of the subsidies for farmers.

The House bill includes $85 million a year through FY 2017 for the Small Watershed Rehabilitation (SWR) program. The Senate also approved a short-term farm bill in June that authorizes the SWR program at the same level as the House. 

For more information, please contact Jimmy Christianson at 703-837-5310 or christiansonj@agc.org. Return to Top

TRANSPORTATION
US DOT Moves Aggressively to Promote TIFIA Program
 

On July 27, 2012, two months before many of the policy and program changes in the recently-passed transportation reauthorization (MAP-21) formally go into effect, US DOT issued a notice of funding availability that outlined the new types of projects eligible for the Transportation Infrastructure Finance and Innovation Act (TIFIA) assistance and announced that DOT will begin immediately accepting “letters of interest” from project sponsors. Final approvals to actually grant such assistance will not be made before the FY 2013 begins on Oct. 1.

MAP-21 significantly increased funds made available through the TIFIA program. Funding has increased from $120 million in FY 2012 to $750 million in FY 2013 and $1 billion in FY 2014. The TIFIA program provides direct loans, loan guarantees, and standby lines of credit to major transportation infrastructure projects that have the revenue base necessary to pay back the loans.

For more information on the TIFIA program, please click here.

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

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