Construction Legislative Week in Review
www.agc.org February 21, 2013
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BUDGET
TAKE ACTION: Oppose Looming Cuts of $4 Billion in Federal Construction Funding Through Sequestration
INFRASTRUCTURE INVESTMENT
White House “Details” Infrastructure Plan
FHWA/FTA Rule Reduces Environmental Requirements for Emergency Projects
IMMIGRATION
Congress Continues to Discuss Immigration Reform
LABOR
New Proposal to Reform Multiemployer Pension Plans Released
Legislation on OFCCP Regulations Introduced
AGC Opposes USACE PLA Inquiry in New Mexico
CONGRESS
Sen. Johanns Makes Surprise Announcement
AGC EVENTS
AGC’s Annual Convention is Less Than Two Weeks Away
USACE Safety Manual Revision Roundtable at 2013 AGC Federal Contractors Conference
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BUDGET
TAKE ACTION: Oppose Looming Cuts of $4 Billion in Federal Construction Funding Through Sequestration
 

Tell Congress to avert the across-the-board and indiscriminate cuts totaling $4 billion to federal construction accounts for FY 2013 scheduled to occur under sequestration.  Unless Congress enacts a repeal or delay by March 1, sequestration—spending cuts totaling $85 billion for the rest of FY 2013, and about $1.2 trillion over 10 years—will begin.

On Wednesday, AGC sent a letter to Congress strongly urging members to consider the importance of continued construction investment that will ensure America’s federal infrastructure and facilities receive required maintenance and meet future economic and population demands.  AGC noted the potential impact the cuts could have on specific federal construction accounts and the continued uncertainty for the funding of federal construction programs because of short-term budget fixes, such as continuing resolutions, have on the industry.

According to AGC’s recently updated report, Sequestration and Its Possible Impacts on Construction, the cuts to federal construction accounts could exceed $4 billion—which would occur over the next seven months. The AGC report details the federal programs that would be subject to cuts as well as federal programs exempt from those cuts. AGC previously held a free webinar hosted by Smith, Currie & Hancock, for members on the possible impacts of the sequestration cuts, including federal construction contracting agencies’ possible changes in their contracting behavior. This week, Smith, Currie & Hancock released an alert updating their clients on the current state of sequestration.  In addition, according to a recent Wells Fargo Securities’ Economics Group report, sequestration “will harm certain states disproportionately.”  The Wells Fargo report details the overall impact of sequestration on states, providing a more local perspective on the relative impact sequestration could have on your state.

Last week, Senate Majority Leader Harry Reid (D-Nev.) proposed replacing sequestration with an even balance of spending cuts and tax revenues, which includes a 30 percent minimum tax rate for personal income over $1 million, known as the Buffet Tax.  President Obama has not introduced his own sequester replacement proposal, but is supportive of the Senate Democrats’ proposal. Last Congress, House Republicans passed a bill that would have replaced the defense cuts in the sequester with other spending cuts – specifically  to the president’s health care law and food stamp program – among  other things.

AGC has consistently argued for the sequester to be delayed through FY 2013 in order to provide our industry a small level of certainty until a grand bargain can be reached that truly reforms and prioritizes discretionary spending programs and preserves entitlement programs for multiple generations without unfairly raising taxes on our job creators.

Again, please TAKE ACTION and inform your members of Congress about sequestration’s impact on your business and the construction industry.

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

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INFRASTRUCTURE INVESTMENT
White House “Details” Infrastructure Plan
 

On Wednesday, the White House issued a fact sheet providing more detail on the infrastructure proposal from President Obama’s State of the Union Address.   The Administration’s plan recognizes the need to continue focusing on our nation’s growing infrastructure needs, but falls short in addressing the long-term financial challenges of the federal infrastructure programs.  The summary of the President’s plan can be found here.

According to the information released by the White House yesterday, the President is once again requesting a one-time $50 billion investment – for its “Fix-IT-First” initiative – which would direct $40 billion toward reducing the backlog of deferred maintenance on highways, bridges, transit systems, and airports nationwide.  The proposal does not detail what the remaining $10 billion will be used for, nor does it identify how they plan on paying for the $50 billion.  It is important to note that the Administration has failed in their three previous attempts to get Congress to approve this same $50 billion in frontloaded infrastructure investment proposal. 

The president also outlined his plan to enhance private capital in U.S. infrastructure investment through a “Rebuild America Partnership, which includes: the creation of a National Infrastructure Bank; enactment of America Fast Forward Bonds, which according to the White House would build on the Build America Bonds program; and implementation of the TIFIA program, which was already enacted as a result of passage of MAP-21.  The proposal also calls for “cutting red tape” by expediting the federal permitting and review procedures for select projects throughout the county.  The White House makes no mention of the reforms to the permitting and review process enacted into law in MAP-21. 

In response to the President’s plan, AGC’s Chief Executive Officer Stephen Sandherr issued a statement  acknowledging the President’s consistent focus on infrastructure, urged the president to swiftly issue environmental streamlining regulations called for in MAP 21 and encouraged  the Administration to expend energy identifying ways to address the long-term funding challenges that threaten significant cuts in federal transportation investments in the near future.

AGC stands committed to work with Congress and the president to craft reliable multi-year legislation that puts us on a path to repairing and expanding the nation’s transportation infrastructure.

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

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FHWA/FTA Rule Reduces Environmental Requirements for Emergency Projects
 

Earlier this week, the Federal Highway Administration (FHWA) and Federal Transit Administration (FTA) issued a joint final rule implementing new regulations to speed up the environmental approval process for the repair or reconstruction of any road, highway, or bridge damaged in an emergency declared by either the state’s governor or the president.

The rules establish a Categorical Exclusion (CE) for emergency repairs which allows these projects to undergo an expedited environmental review process.. Projects that would fall under this exclusion typically do not have the potential for significant environmental effects but have been subject to the Federal National Environmental Policy Act (NEPA) review, which establishes very strict review process, in the past. MAP-21, the transportation reauthorization legislation, designated a number of project categories that will receive categorical exclusions in the future. This is the first rule that has been adopted in response to the new MAP-21 CEs.

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

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IMMIGRATION
Congress Continues to Discuss Immigration Reform
 

Two small, separate groups in the U.S. Senate and U.S. House continue to work on developing proposals for immigration reform. The president also had his framework for comprehensive immigration  reform “leaked” this week and with specific text on E-Verify and employment verification, border security, and legalization.  AGC is encouraged by the momentum building on reform efforts, and find that many of our priorities are consistent with the overall goals of both the Administration and Congress, despite the fact that they contain several problems for the industry that AGC will continue to work on prior to legislation being introduced.  In order to be successful in fixing America’s broken immigration system, any viable remedy must do four things: strengthen our national security; create a role for employers in an employment system that functions in a fair, efficient and workable way; address the realities of future workforce needs in the less-skilled sectors; and find a reasonable, rational way of dealing with the current undocumented population in the United States.

A major point of contention between private employers and labor unions is the design of a future guest worker program. The private sector is hoping to find a consensus on principles for the design of this program and present them to Congress for inclusion in their legislation.  AGC, along with other construction trade associations, believe that a successful future guest worker program must include:

  • An annual visa cap that fluctuates based on a demand-driven system that reflects the real economic needs of the nation
  • An opportunity for employers to petition for an approved slot that allows them to hire visa-holding foreign workers, and replace those workers if/when they move onto another approved job slot
  • A time period for job slot approvals and approved visas that reflects a long enough time period to ensure that the training investment made by employers is not lost;
  • A program that requires employers to treat these legal foreign workers in the same manner as U.S. workers—with all of the same wages and benefits as similarly-situated workers at the same location
  • A dual-intent process that allows some foreign workers who have demonstrated a commitment to their jobs and their communities to choose to petition for a change of status to a permanent legal resident in the United States, while also incentivizing most foreign workers to return to their home country at the end of their visa period

Additionally, the construction community supports the implementation of an efficient, practical and accurate employment verification system that provides ample protection from liability for employers who comply with the system in good faith. This system should be phased-in according to company size and should not overly burden employers financially or functionally.   Like employers in other sectors, the construction industry firmly believes that any employment verification system should hold all U.S. employers accountable for the work authorization status of their direct employees and not create vicarious liability by holding employers accountable for the hiring decisions made by entities with whom they have a contract or subcontract.

Finally, we support the efforts of lawmakers to craft an earned pathway to legal status for current undocumented workers who meet qualifying criteria. In the past few decades, the robust U.S. economy has revealed a shortage of specialized and educated workers in the United States.  As a result, the gap – created by a lack of U.S. workers, a lack of legal immigration programs for less-skilled workers, and a growing American economy – has been filled by undocumented workers. A seamless pathway to permanent legal status for those who have filled jobs otherwise left open by U.S. citizens will help American companies continue to prosper and expand as our lagging economy improves—helping ultimately to provide more job opportunities for U.S. workers. Any program geared toward earned legalization for the current population of undocumented workers should also include a fix to the employment-based immigrant visa process and numerical limitations.

AGC urges Congress to continue working together to craft a reasonable and balanced approach to addressing America’s immigration problems in a way that resolves the issue for the long-term. 

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

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LABOR
New Proposal to Reform Multiemployer Pension Plans Released
 

After 18 months of deliberation, the National Coordinating Committee for Multi-Employer Plans’ Retirement Security Review Commission – comprised of stakeholders from both business and labor groups, including AGC of America – publicly released a comprehensive proposal to safeguard retirement security for multi-employer plan participants that protects employers and taxpayers and spurs economic growth on Feb. 19. The Commission’s recommendations are included in a report, “Solutions not Bailouts:  A Comprehensive Plan from Business and Labor to Safeguard Multiemployer Retirement Security, Protect Taxpayers and Spur Economic Growth.”  

The chief executive officer of the Associated General Contractors of America, Stephen E. Sandherr, issued the following statement in response to the release of the proposed plan for preserving, remediating and innovating multi-employer retirement plans, “The Commission’s plan represents a pragmatic, reasonable and – most importantly for taxpayers – self-sufficient approach to preserving and protecting nearly half a trillion dollars worth of multi-employer retirement plans.  These retirement plans, many of which are funded by construction firms, are needed to ensure long-term security for tens of thousands of construction workers. As important, the retirement plans’ funds provide a vital source of capital for domestic investments in everything from small businesses to major infrastructure projects. The steps outlined in the Commission’s plan give employers and their workers the tools they need to protect their retirement plans.”

The Commission recognized that legislative changes are needed to give plan trustees and bargaining parties more tools to correct funding shortfalls and to distribute costs more equitably among all stakeholders in the plan – not just current active employers and employees. The recommendations fall into three areas: preservation, remediation and innovation.

  • Preservation: Proposals to Strengthen the Current System. Some of these proposals represent technical refinements to the Pension Protection Act (PPA), while others address shortcomings of the system outside of PPA. These recommendations are designed to provide additional security for: (a) the majority of plans that have successfully weathered the recent economic crises; (b) those that are on the path to recovery as measured against the objectives set forth in their Funding Improvement and/or Rehabilitation plans; and (c) those that, with expanded access to tools provided in the PPA and subsequent relief legislation, will be able to achieve their statutorily mandated funding goals.
  • Remediation: Measures to Assist Deeply Troubled Plans. Under current law, a small minority of deeply troubled plans are projected to become insolvent. For the limited number of plans that, despite the adoption of all reasonable measures available to the plans' settlors and fiduciaries, are projected to become insolvent, the Commission recommends that limited authority be granted to plan trustees so that they may take early corrective actions, including the partial suspension of accrued benefits for active and inactive vested participants, and the partial suspension of benefits in pay status for retirees. Such suspensions would be limited to the extent necessary to prevent insolvency, but in no event could benefits go below 110 percent of the PBGC guaranteed amounts. To protect participants against potential abuse of these additional tools, the Commission further recommends the adoption of special protections for vulnerable populations including PBGC oversight and approval of any proposed actions, taking into consideration certain specified criteria.
  • Innovation: New Structures to Foster Innovative Plan Designs. To encourage innovative approaches that meet the evolving needs of certain plans and industries, the Commission recommends the enactment of statutory language and/or promulgation of regulations that will facilitate the creation of new plan designs that will provide secure lifetime retirement income for participants, while significantly reducing or eliminating the financial exposure to contributing employers. While the development of new flexible plan designs including, but not limited to, variable annuity and "Target Benefit" plans that would permit adjustment of accrued benefits. In order to protect plan participants from this risk, these models would impose greater funding discipline than is required under current defined benefit rules. 

AGC will continue to work with other management and labor groups in a new coalition for multiemployer pension plan reform, the Partnership for Multiemployer Retirement Security: A Business and Labor Initiative, and Congress to enact the recommendations in the Commission’s report.

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

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Legislation on OFCCP Regulations Introduced
 

On Feb. 15, Representative Rodney Alexander (R-La.) introduced legislation on the Department of Labor’s (DOL) Office of Federal Contract Compliance Programs (OFCCP) proposed rule making major changes to the rules governing federal contractor affirmative action programs for individuals with disabilities ("Section 503"). More information on the proposed rule can be found on the AGC website. The legislation introduced, H.R. 759, the Equal Standards in Hiring Americans Act, would require DOL to abide by the same hiring regulations it is attempting to impose on federal contractors.

The OFCCP’s proposed rule impacts federal contractors and subcontractors, and would effectively require seven percent of their workforces be comprised of people with disabilities. This rule would also apply to subcontractors, and failure to meet the requirement could result in the forfeiture of government contracts.   The legislation stops short of blocking the proposed rule, but forces DOL to first certify to Congress that each office and division within DOL is in compliance with the rule’s requirements prior to imposing it on federal contractors.

The legislation does not address the OFCCP’s proposed changes to the rules governing federal contractor affirmative action programs for covered veterans. More information on this proposed rule can be found on the AGC website, as well. AGC has been working with Congress and federal agencies to find ways to block or mitigate the cost and administrative burdens these rules would impose on federal construction contractors.

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

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AGC Opposes USACE PLA Inquiry in New Mexico
 

This week, AGC sent a letter opposing the possible use of a project labor agreement (PLA) mandate posted by the U.S. Army Corps of Engineers (USACE) Albuquerque District for an upcoming project at Cannon Air Force Base in New Mexico.

AGC has sent 60 letters to federal agencies opposing PLA mandates and bid preferences during the Obama Administration, most in response to agency announcements that a PLA mandate or preference was under consideration for a particular project or an anticipated set of projects in a particular area. Of those, only one PLA mandate has been issued to date.  

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.

For more information, please contact Jimmy Christianson at (703) 837-5425 or christiansonj@agc.org. Return to Top

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CONGRESS
Sen. Johanns Makes Surprise Announcement
 

First term Nebraska Sen. Mike Johanns (R) announced that he will not seek re-election next year. Johanns, a former U.S. Agriculture Secretary, two-term Nebraska Governor, Mayor, and county commissioner was elected to the Senate in 2008, defeating rancher Scott Kleeb 58 to 40 percent. He appeared to be a lock for a second term, but says he and his wife desire to return to "a quieter life" after what will be 32 years in public office.

The seat should easily remain in Republican hands as Democrats have a weak political bench in the Cornhusker State. With their best possible candidate, former Sen. Bob Kerrey, losing badly to freshman Sen. Deb Fischer (42 to 58 percent) last November, in what was a clear Democratic year nationally, the party leaders and candidates will have a difficult time reaching the realm of competitiveness in 2014.

On the Republican side, the early speculation surrounds popular term-limited Gov. Dave Heineman. He would be the party's strongest candidate should he choose to run. If the Governor takes a pass on the race, then look for one or more of the state's three Congressmen to take the leap. Reps. Jeff Fortenberry (R-Neb.-1) and Adrian Smith (R-Neb.-3) are more likely to run than 2nd District Rep. Lee Terry (R). Mr. Terry, just appointed chairman of the House Subcommittee (of Energy & Commerce) on Commerce, Manufacturing, & Trade, may not want to forfeit his strong path on an exclusive committee for a run at statewide office.

If Terry does decide to run, however, he might be the most formidable of the Nebraska Congressmen, as he represents the Omaha seat and is already well known in the state's most dominant media market.

In terms of other potential candidates, state Treasurer Don Stenberg (R), who has lost four other statewide campaigns, is quoted as saying he is considering running. Other statewide officials are currently either running for re-election or looking at the open Governor's race.

For more information, please contact David Ashinoff at (202) 547-5013 or ashinoffd@agc.org. Return to Top

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AGC EVENTS
AGC’s Annual Convention is Less Than Two Weeks Away
 

The AGC Annual Convention and Constructor Expo, held in Palm Springs, Calif. March 6-9, 2013, is the ideal opportunity to see everything that AGC can do for you and your business, as well as to learn from industry peers and experts on how they are overcoming today’s challenges.

Municipal & Utilities Division

There are several events Municipal & Utilities Contractors should be sure to catch. The Division Leadership meets on Tuesday, March 5, and is open to all AGC members. Interested in becoming more active in the Division, or getting to know your fellow contractors focused on the utility infrastructure markets? Now is the perfect time to join us!

Furthermore, as part of the Division’s plan to spearhead action on issues that are affecting your business today, we are sponsoring a plenary session Wednesday, March 6 called “Into the Future: Engaging All Generations” with Amy Lynch and Seth Mattison from the BridgeWorks organization (www.generations.com) to help contractors attract the employee of tomorrow, keep the employees of today, and identify/solve points of inter-generational conflict and communication failure. This theme will continue with the Municipal & Utilities Division Session Friday, March 9, where Division Leadership will unveil the new Division Strategic Plan, which was approved at their recent meeting in November. Amy Lynch will also be speaking to the group, continuing the conversation from the plenary session and working directly with members in the audience to work through the tough issues with real solutions to workplace problems.

Federal & Heavy Construction Division

Representatives from the headquarters of both the U.S. Army Corps of Engineers and Naval Facilities Engineering Command will meet with division members on Wednesday, March 6 to discuss their portfolios for the year and ongoing contracting issues.

In addition, members will have an opportunity to shape the division’s 2013 Federal Contractors Conference agency meeting agendas to ensure that agency representatives hear the most pressing issues facing contractors who work with federal owners.

Highway & Transportation Division

The Highway and Transportation Division meeting will be held Friday, March 8 and will feature two outstanding speakers. Rep. Jeff Denham, (R-Calif.), chairman, House Transportation and Infrastructure Subcommittee on Railroads, Pipelines and Hazardous Materials, will present the T&I committee’s outlook for surface transportation priorities and funding in the 113th Congress. Also on the program is Federal Railroad Administrator Joseph C. Szabo, who will discuss the Obama Administration’s vision of the transportation future calling for increased investment in high speed rail.

In addition, the Highway and Transportation Division and the Environmental Forum are sponsoring, “Stormwater as the New Epicenter of Environmental Action,” which will provide updates on two national stormwater rulemakings and three precedent-setting lawsuits that have bearing on the entire construction industry. Participants also will learn how a federal priority for stormwater enforcement is impacting job sites nationwide.

For more information, please visit https://convention.agc.org/. Return to Top

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USACE Safety Manual Revision Roundtable at 2013 AGC Federal Contractors Conference
 

AGC will hold a special roundtable session that provides attendees with an opportunity to give input on the U.S. Army Corps of Engineers (USACE) Safety Manual (EM-385) revision process directly to USACE and Naval Facilities Engineering Command (NAVFAC) safety representatives. The roundtable will be held April 24 from 12:00 p.m. to 3:00 p.m. ET during the 2013 AGC Federal Contractors Conference at the Mayflower Hotel in Washington, D.C.

Construction safety professionals are highly encouraged to attend. This will be the last opportunity to comment on the revision process through AGC with USACE and NAVFAC safety representatives in the room before the new safety manual is issued.

To register for only this roundtable session, please click here. For more information and to register for the entire 2013 Federal Contractors Conference (which includes this roundtable session), please click here. Return to Top

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