Construction Legislative Week in Review
www.agc.org January 3, 2013
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On the Inside
FISCAL CLIFF
Fiscal Cliff (Nearly) Averted
INFRASTRUCTURE INVESTMENT
Hurricane Sandy Relief Delayed
State Department Panel Calls for New Construction Funding After Benghazi Attacks
HEALTHCARE
New Health Care Law Regulations Released
AGC to Host Webinar on the Affordable Care Actís Impact on Business Operations
ADMINISTRATION
Labor Department Updates Regulatory Agenda
DOT and EPA Release Regulatory Agendas
EPA Administrator Lisa Jackson Resigns
LABOR
AGC Opposes NAVFAC Project Labor Agreement Inquiry
Free Member Only AGC Webinar on Multi-Employer Pension Plan Reform
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FISCAL CLIFF
Fiscal Cliff (Nearly) Averted
 

Shortly after midnight on Jan. 1, the Senate swiftly passed – by a vote of 89-8 the American Taxpayer Relief Act of 2012 to avert the fiscal cliff. However, when the action turned to the House, drama ensued as many members of the Republican Party tried the equivalent of a legislative “mulligan.”   More than 21 hours after the Senate passed the bill, House Democrats were able to provide enough votes to pass the bill unamended, 257-167. Out of the 167 dissenting votes, 151 were Republicans who wanted a better deal.   This morning, President Obama signed the legislation into law.

Before Christmas, Republicans failed to back a bill (the so-called “Plan B” legislation) put together by Speaker Boehner that would have given House Republicans some leverage in negotiations with the White House.  Without the leverage of a strong House Republican position on the fiscal cliff legislation, the negotiation was forfeited by the House and left to be worked out between Senate Republicans and the White House. With no time left to negotiate the House Republicans had the option of taking the legislation negotiated between the Senate and the White House or take responsibility for the biggest tax increase in History as the Bush tax cuts expired and the sequestration into effect.  In the end, the bill passed and many House Republicans wanted a “mulligan” on their early decision to not support the “plan B” proposal.  The bill provides both tax relief and tax certainty. It permanently reinstated the Bush tax cuts for all, but reinstates the highest marginal income tax rate of 39.6 percent for individual’s whose income is above $400,000 and for joint incomes above $450,000.  The bill permanently separates dividend and capital gains rates from earned income rates and sets the top estate tax level at 40 percent with an exemption level of $5 million per decedent.  The bill also permanently patches the Alternative Minimum Tax.

The bill did not extend the payroll tax cut, but it did extend the emergency unemployment benefits for one year.  It also generally extends corporate tax breaks typically included in an “extenders” package for one year, including bonus depreciation, accelerated depreciation for restaurants and retail properties and credits for renewable energy facilities.  The bill also delayed the imposition of the sequester by two months.  AGC estimates that the full imposition of the sequester would cut public construction spending by at least $6 billion this fiscal year. 

This bill sets the stage for tax reform later this year with the business tax breaks expiring at the end of 2013.  The passage of the bill also leaves in place current entitlement spending policies. It does not deal with the needed increase in the debt limit.  It also does not deal with federal spending after March 27, 2013.  The 113th Congress convened today and has inherited a lot of work from the 112th.

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

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INFRASTRUCTURE INVESTMENT
Hurricane Sandy Relief Delayed
 

Following passage of the bill to avert the fiscal cliff in the House, Speaker John Boehner (R-Ohio) decided not to take up the supplemental appropriations bill for Hurricane Sandy relief.  The move caught members of Congress from the Northeast by surprise, considering they had been told that the House would take up the legislation before the 112th Congress adjourned.  Facing a tremendous amount of backlash over the decision, Speaker Boehner and Majority Leader Eric Cantor (R-Va.) scheduled a vote tomorrow on an initial installment of $9.7 billion in borrowing authority for the National Flood Insurance Program.  In addition, leaders announced that the House will vote on the $50 billion remaining from the Senate-passed Sandy relief bill on or before Jan. 15.

The Senate passed their bill on the December 28. Following the passage of several amendments, the bill remained largely unchanged from the version of the bill introduced before the Christmas holiday and passed by a vote of 61-33 with six Senators not voting.

Some of the bill’s highlights include:

  • Community Development Block Grants (CDBG) - $17 billion
  • Federal Emergency Management Agency$11.5 billion for the FEMA Disaster Relief Fund to support disaster response and recovery needs.
  • Emergency Relief for Public Transportation - $10.783 billion for the repair and restoration of public transit systems and to support mitigation projects to protect those systems from future damage.
  • Federal Highway Administration Emergency Relief Program - $921 million for the repair of roads and bridges.
  • Army Corps of Engineers - $5.350 billion
    • Disaster Recovery - $1.838 billion
    • Mitigation - $3.512 billion
  • Clean and Drinking Water State Revolving Fund Programs - $810 million for clean water and drinking water state revolving funds in states affected by Sandy, including $700 million for clean water and $110 million for drinking water needs.

It is likely that the funding levels in the Senate-passed bill for accounts important to AGC members will not be altered significantly when the House votes on their aid packages.  One exception would be an increase in FHWA Emergency Relief from $921 million to just over $2 billion.  In addition, some House Republicans have complained that the bill included money for matters unrelated to Sandy and those funds will likely be removed in the upcoming House bill.

AGC will continue to monitor the situation and advocate for swift enactment of legislation that will provide the affected states the ability to rebuild their infrastructure.  In addition, we encourage our members to contact their Members of Congress and urge them to support passage of the supplemental appropriations bill for Hurricane Sandy relief and recovery efforts.

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

State Department Panel Calls for New Construction Funding After Benghazi Attacks
 

An independent review board commissioned by the Department of State (DOS) recently reported that, in light of the Benghazi attacks, DOS facility upgrades must be addressed with additional funding (access report by clicking here).  Among its recommendations, the board recommends that “the State Department work with Congress to restore the Capital Security Cost Sharing Program . . . to approximately $2.2 billion in fiscal year 2015, including an up to ten-year program addressing that need, prioritized for construction of new facilities in high risk, high threat areas.”

Prior to the Christmas holiday, DOS Deputy Secretary Nides testified before Congress and stated that “Secretary Clinton has charged my office with leading a task force that will ensure that all [the recommendations] are implemented quickly and completely.” AGC will continue to educate members of Congress about the value of and need for secure federal facilities abroad.

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

HEALTHCARE
New Health Care Law Regulations Released
 

On Dec. 28, 2012, the Department of the Treasury and the IRS released a notice of proposed rulemaking on the Affordable Care Act’s employer requirements which take effect on Jan. 1, 2014. The proposed regulations are meant to assist employers in complying with the law and will remain in effect until final regulations are released. The majority of the new regulations focus on the key concepts and definitions of “large employer”, “full-time employee”, and “tax penalties”. For a detailed analysis on the regulations from Ernst & Young, click here.

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

AGC to Host Webinar on the Affordable Care Actís Impact on Business Operations
 

The Affordable Care Act (ACA) will impact the bottom line of EVERY construction company. As a result, many construction company owners and executives are faced with making some tough choices to help minimize the impact of the new law on business operations.  AGC’s upcoming webinar series, The Affordable Care Act: The Impact of Health Care Reform on Your Construction Business, will provide those with a seat at the table the information necessary to make critical business decisions that will affect the company for years to come.  The webinars will be held on Feb. 5, 7 and 12.  Each webinar will be held from 2:00-3:30 p.m. ET.  Registration for all three days is just $99 for AGC members.

On day one of the webinar, AGC’s chief economist will give his prediction as to what areas of construction will see growth as a result of the new law and where marketing and business development efforts should be expanded. In addition, there will be an overview all of the key implementation dates of the ACA, the overall impact of the law on health plans, and the impact of the individual mandate on business – an often disregarded issue for employers.

Day two will cover “Play or Pay” – the employer mandate provision that raises the most questions for employers. Small businesses and those with seasonal employees will especially benefit from learning the process for determining if a company must comply with the mandate. Vital tax and payroll issues will also be discussed.

For those who decide to “play”, on day three, participants will get an inside look at the future of the insurance marketplace, including how insurance providers are adapting their plans and cost structures as a result of the new requirements, as well as techniques to use when shopping around for health insurance plans.  Now is the time to take action by creating a strategy to address these critical issues.  

For more information or to register, please visit the AGC website. Return to Top

ADMINISTRATION
Labor Department Updates Regulatory Agenda
 

At the end of December, the U.S. Department of Labor (DOL) released its 2012 Statement of Regulatory Priorities, commonly known as the regulatory agenda. Initially, the agenda was scheduled to be released last fall, but was delayed presumably due to the November elections.  While agencies often do not adhere to the target dates listed, the agenda is a good indicator of issues the agency wants to  address in 2013, which includes several regulations of concern to the construction industry.  Respectfully, DOL did not announce any new regulations in the newly-released agenda.  However, the agency did provide notice of several updates. 

Office of Federal Contract Compliance Programs

In 2010, the Office of Federal Contract Compliance Programs (OFCCP) announced that it is working on a Compensation Data Collection Tool to identify contractors violating sex and race-based compensation discrimination laws. AGC submitted comments explaining why the use of a tool such as this one should be modified or not required at all.  The new agenda suggests that details about the tool will emerge in April 2013 in the form of a Proposed Rule, hopefully with AGC’s suggested modifications. 

Also expected in April are Final Rules – which were first announced in 2010 and 2011 – with regard to the affirmative action requirements of direct federal contractors as they relate to veterans and individuals with disabilities.  AGC has been active in trying to modify or block both rules. One analysis conducted by AGC uses data provided by AGC members that estimates the cost of compliance as 20 to 30 times more than the cost estimated by OFCCP.  In addition, AGC co-sponsored a study that concludes that comprehensive rules of this nature are unnecessary. For more information on the rule regarding individuals with disabilities, click here.  For more information on the veterans rule, click here

The agenda also mentions a plan to issue a proposed rule that would establish a new method for meeting affirmative action goals and requirements for minorities and women in construction – the first change to the process since 1980. A proposed rule is projected for October.

National Labor Relations Board

The National Labor Relations Board (NLRB) listed the Quickie Elections rule as a long term action on its agenda, presumably due to the legal challenges to whether the NLRB was legally able to issue the rule.  The agenda did not address the NLRB’s Notice Posting Rule as a priority, also being challenged in court. For more information on both the Quickie Elections Rule and the Notice Posting Rule, please click here.

Department of Labor

The Department of Labor’s (DOL) attention continues to focus on finalizing a Persuader rule. DOL’s Office of Labor-Management Standards rule would limit the “advice” exception under the Labor-Management Reporting and Disclosure Act so that all consultation with labor lawyers and/or consultants will be subject to disclosure to the DOL.  This rule will significantly impact employers’ ability to retain counsel.  A final rule is projected for April 2013. For more information on the Persuader rule, click here.

Occupational Safety and Health Administration

OSHA did not offer a time line for drafting a Silica rule or recordkeeping rule to require employers to identify musculoskeletal disorders separately on OSHA 300 log forms. The top priority for OSHA continues to be an Injury and Illness Prevention (I2P2) rule.  I2P2 would require employers to implement and frequently update an Injury and Illness Prevention Program to address safety and health hazards, beyond those that are currently regulated.  OSHA currently has voluntary Safety and Health Program Management Guidelines. AGC has encouraged OSHA to remove the requirement that companies develop company-wide safety programs to address these unregulated hazards. Instead, AGC has recommended that OSHA provide simple guidelines to employers to develop and implement an effective safety and health program that focuses on the regulated hazards that are significant threats in the workplace. A proposed rule is expected in December 2013.

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

DOT and EPA Release Regulatory Agendas
 

In addition to the Department of Labor, the Transportation Department (DOT) and Environmental Protection Agency (EPA) have released their top regulatory priorities for 2012.  Below is a list of regulations from these two agencies that have the potential to impact the construction industry, if finalized.

Department of Transportation

DBE Regulations: DOT issued a Notice of Proposed Rulemaking on Sept. 6 with the comment period closing on Dec. 24, 2012. While DOT claims that the NPRM suggests only minor changes in the regulations, AGC believes these proposed changes are substantial. The proposed rule would change bidding requirements, good faith efforts submittals, annual goal setting and how DBE participation is counted. AGC of America submitted detailed comments on the proposal as did 15 AGC chapters. In addition, more than 150 comment letters were submitted by individual AGC members. Given the volume of comments submitted it is unclear if and when DOT will issue a final rule. DOT has not given a target date for issuing a rule. AGC is seeking to have an open discussion with DOT before the new rules are issued.

Work Zone Safety:  MAP-21 included an AGC-encouraged provision clarifying the use of positive barrier in highway work zones. DOT has scheduled a rule making in March of 2013. This rulemaking will ensure that positive protection measures and temporary longitudinal traffic barriers will be used in work zones in certain situations. It will also set forth a unit-pay basis for positive protection devices in most circumstances.

Other MAP-21 Rules: MAP-21 made numerous changes in the administration of the federal-aid highway program and the transit program. These changes will be addressed through guidance and the more formal regulatory process. DOT directives on project delivery, performance measures and environmental streamlining are expected over the next few months.

Environmental Protection Agency

With a divided Congress remaining in place, action on the environmental side will most likely come from the regulatory front. Ongoing processes from last year will see incorporation of new stormwater runoff control requirements for construction sites – incorporated on a rolling basis into state permits as they expire and are renewed. In 2013, EPA is also likely to issue designations of nonattainment for fine particulate matter (PM2.5) that will have to be taken into account with National Ambient Air Quality Standards as they interact with implementation of state transportation plans. On the horizon, AGC expects early action on the water side, where EPA would initiate a rulemaking on federal clean water act jurisdiction and Section 404 permits. EPA is also expected to decide what to do with use and disposal of fly ash coal combustion waste. The Obama administration is likely to refocus on climate change, stepping up pressure for more rules restricting greenhouse gases.

Beyond 2013, EPA is expected to continue use of the Chesapeake Bay program to reduce pollution runoff into the water shed and push for its use as a model for protection of other at-risk watersheds. AGC will also be monitoring EPA’s plans for a post-construction stormwater runoff rule that has currently been delayed and expansion of rules governing lead paint removal during renovation and repair.

For more information, please contact Brian Deery at (703) 837-5319 or deeryb@agc.org or Scott Berry at (703) 937-5321 or berrys@agc.org. Return to Top

EPA Administrator Lisa Jackson Resigns
 

After nearly four years, Lisa Jackson, the head of the Environmental Protection Agency, has announced her departure from the nation’s top environmental post. Jackson has said she will step down following President Obama’s State of the Union address in January. Jackson, the former commissioner of New Jersey’s Department of Environmental Protection, has often been a polarizing figure to many in the environmental and business communities. Under her, the agency has pursued an aggressive agenda including limiting mercury and other emissions from coal-fired power plants, limits on fine particulate matter, proscriptive regulations on stormwater runoff, and the declaration the climate change poses a threat to public health and the environment.

The president has not yet chosen a successor at the EPA, but the identity of Jackson’s successor has been the topic of much speculation, and several names have emerged as frontrunners for the job. Bob Perciasepe, the agency’s deputy administrator, Jackson’s number two and right hand is often on the top of the list; Perciasepe is past head of the Office of Water and the former chief operating officer at the National Audubon Society. The other name on top of most lists is Gina McCarthy, head of the Office of Air and Radiation, and someone who has often filled in for Jackson at congressional committee hearings. Mary Nichols, the head of the California Air Resources Board (CARB), a name many AGC members will recognize has also been named as a possible successor, especially with the Obama Administration’s potential to refocus on regulatory solutions to climate change in his second administration.

Other names mentioned include former New Jersey environmental commissioner Bradley Campbell, former head of Pennsylvania’s Department of Environmental Protection Kathleen McGinty, and Heather Zichal, a top aide on energy and environmental issues in the Obama White House and popular among environmentalists. 

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

LABOR
AGC Opposes NAVFAC Project Labor Agreement Inquiry
 

On Jan. 3, AGC sent a letter opposing a government-mandated project labor (PLA) inquiry posted by the Naval Facilities Engineering Command Washington.  NAVFAC Washington sought industry comments on a possible PLA for a project at the National Security Agency site in Annapolis, Md. The job is for the construction of a naval medical clinic.

AGC neither supports nor opposes contractors’ voluntary use of PLAs on government projects, but strongly opposes any government mandate for contractors’ use of PLAs. AGC is committed to free and open competition for publicly funded work, and believes that the lawful labor relations policies and practices of private construction contractors should not be a factor in a government agency’s selection process. 

To view AGC’s letter, please click here.

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

Free Member Only AGC Webinar on Multi-Employer Pension Plan Reform
Learn About Recommendations for Legislative and Regulatory Changes to System
 

For over a year, AGC has participated in the National Coordinating Committee of Multiemployer Plans (NCCMP) Retirement Review Security Commission to develop draft recommendations for legislative and other changes to the current multi-employer pension plan system. The Commission has worked to develop these recommendations to ensure that the system provides reliable retirement income to workers while reducing financial risks to contributing employers.

The Commission was a labor-management, cross-industry group of stakeholders. Specific recommendations were put forth in the following areas:

  • Technical corrections and other changes to the Pension Protection Act;
  • New tools for plans near insolvency;
  • Facilitation of new, more flexible plan designs; and
  • Other new tools and changes to the law.

On Tuesday, Jan. 29, 2013, at 2:00 p.m. EST, AGC will host a free webinar with presenters involved in the Commission, including AGC of America’s Commission representative and NCCMP staff, all of whom will review the Commission’s proposal and its potential impact on the construction industry.  By participating in this webinar, union contractor members will learn about the proposal and potential legislative changes after the Pension Protection Act sunsets in 2014, and how to help advance reform efforts. 

For more information or to register for the free AGC member-only webinar, please click here. Return to Top

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