Construction Legislative Week in Review
www.agc.org March 7, 2013
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On the Inside
LABOR
AGC Member Testifies at House Pension Hearing
Workforce Training Legislation Advances In House
BUDGET
House Passes Funding Bill
Sequestration Goes into Effect: What Construction Contractors Should Know
CONGRESS
Party Nominees Selected in IL-11 Special Election
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LABOR
AGC Member Testifies at House Pension Hearing
 

On March 5, the U.S. House Education and Workforce’s Subcommittee on Heath, Employment, Labor and Pensions held a hearing titled, “Challenges Facing Multi-employer Pension Plans: Reviewing the Latest Findings by PBGC and GAO.”  Harold Force, president of Force Construction Co. in Columbus, Ind., testified on behalf of AGC of America and was the sole employer witness.  The Hearing focused on recent reports from the Pension Benefit Guaranty Corporation (PBGC) and preliminary findings of a General Accountability Office (GAO) report on the status of multi-employer pension plans. Mr. Force gave an employer perspective of plans with funding deficiencies and on the need to reform the system before it is too late.

The PBGC testified that many plans were hit hard from the recession and without Congressional action, the PBGC could become insolvent in the next 10 years – particularly if several large plans that are currently headed toward insolvency do, in fact, fail. The findings highlight the dire funding status of many plans and reiterate the need for bold and decisive reform of the system.  AGC has been working for over a year with stakeholders on recommendations for Congress to reform the system. Mr. Force testified that, without giving plan trustees more flexibility, the system that many construction employers depend on to provide employee pensions could be in jeopardy.

AGC is working with Congressional leaders on legislation to address the multi-employer pension system and will work with them on enacting reform in the coming months. For more information on the hearing, you can visit the committee website, along with an archived webcast of the hearing.

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

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Workforce Training Legislation Advances In House
 

On  March 6, the U.S. House Education and Workforce Committee passed the Supporting Knowledge and Investing in Lifelong Skills (SKILLS) Act, H.R. 803, which will help reform the nation’s job training system by strengthening employer engagement in state and local workforce decisions, as well as giving states and localities more flexibility.  The bill was approved by the committee in a vote of 23-0, while all Democrats on the committee refused to offer a vote.

AGC supports the bill because the construction industry is made up of predominantly small employers and in the past, many employers in the industry have had trouble connecting with local workforce investment systems or workforce investment boards (WIBs) due to the structure of the boards and types of training offered locally. However, the SKILLS Act will strengthen the presence and participation of employers on WIBs, and this increased participation by employers will be a welcomed change to the construction industry. Local employers can ensure that local job training will address workforce gaps and better fit local population needs.

Under the SKILLS Act, Registered Apprenticeship programs – an important training system used by construction contractors – would be better aligned with WIBs as an approved training provider. Apprenticeship is a key program for successful construction industry workers and attracting new entrants to the industry which will become increasingly critical in the coming years as a heavy percentage of current workers retire and even more new workers will be needed as the economy recovers.

AGC looks forward to working with Congress and ensuring barriers against construction training programs from partnering with local WIBs are removed, but also that these programs offer better access to basic skills training.  The bill is expected to now move to the House floor where it could receive a vote as early as next week. More information can be found on this website along with a letter of support AGC sent to the committee here.

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

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BUDGET
House Passes Funding Bill
 

On Wednesday, the House of Representatives passed the Fiscal Year 2013 funding measure that will provide for government spending through Sept. 30, 2013.  The bill combined the Defense and Military Construction/Veterans Affairs appropriations bills with a stopgap continuing resolution (CR) for the rest of the appropriations bills. The bill passed by a vote of 267-151; 14 Republicans and 137 Democrats opposed the bill.

The House bill would effectively cap 2013 spending at $982 billion – an approximate cut of $59 billion from fiscal year 2012.  The cut is reflective of the sequester cuts that went into effect on March 1 as ordered by the Office of Management and Budget.   However, the CR does not detail the effects of the sequestration on individual federal programs.

Unfortunately, the CR did not fully address issues of concern to AGC, which were expressed in our Feb. 28 letter to Congress.   Specifically, the bill fails to provide MAP-21 funding levels for highway and transit investment.  It is estimated that the House CR funding level is $555 million below the authorized levels in MAP-21 for highways and $117 million for transit.  In addition, the bill continues the prohibition on new starts for federal construction projects with an exception for projects that fall exclusively under the jurisdiction of the Department of Defense and Military Construction/Veterans Affairs appropriations bills.

The Senate must now pass or amend the bill by March 27 – when the current continuing resolution expires – in order to avoid a government shutdown.  It is expected that the Senate will make some tweaks to the House-passed bill and may even go as far as to add a couple of its own full appropriations bills.

AGC will continue to press the Senate to restore transportation funding to MAP-21 levels and lift the prohibition on new and necessary federal construction projects.    AGC members are urged to visit AGC’s Legislative Action Center for more information and to contact their members of Congress.

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

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Sequestration Goes into Effect: What Construction Contractors Should Know
 

On March 1, Congressional leadership and President Obama failed to reach a deal to avert the $85 billion in automatic and indiscriminate budget cuts, called sequestration. Consequently, the president signed an order initiating the spending cuts late Friday evening.  ENR Engineering News-Record recently reported that the cuts will exceed $4 billion in federal construction funding, as AGC previously forecasted in its sequestration report.  Cuts will be made during the next seven months of fiscal year 2013.   The White House issued a statement on Friday saying they hope to continue working to find a replacement for the sequester.  However, any potential deal reached will likely be months away.

Contractors who work directly with federal agencies will experience the greatest negative impact of the sequester.  With many federal agencies likely to institute civilian employee furloughs  at the end of March – which will include acquisition personnel – federal contractors should expect delays receiving permits and answers to procurement/ongoing construction questions and contract award information, among other things. Agencies, like the U.S. Army Corps of Engineers and Naval Facilities Engineering Command, could decide to procure work through more Multiple Award Task Order Contracts and Multiple Award Construction Contracts because of the lack of acquisition personnel to handle smaller construction contracts. Although ongoing construction projects and awards already made may not be affected on a grand scale, some contracts could be terminated for convenience or de-scoped. Similarly, contractors may be asked to hold over their bids for 120 or more days.  Ultimately, direct federal contractors should expect fewer new federal construction project solicitations in the coming months.

Contractors who work for state and local governments—which receive some federal funding—could also see negative impacts, albeit not as severe. Again, with federal agency personnel furloughs expected, these contractors could also expect delays in receiving any federal permits and completion of federal environmental studies. Contractors who build transportation infrastructure should not see a dramatic decrease in new project solicitations. The Highway Trust Fund (HTF) and Airport Improvement Program are exempt from the FY 2013 sequestration process, though there would be a slight reduction in last year’s $6.2 billion General Fund transfer to the HTF. Municipal and utility contractors who have a stake in the clean water and drinking water state revolving loan funds (SRF), however, should expect a decrease in new projects.

AGC has consistently argued for the sequester to be delayed through FY 2013 in order to provide our industry a smaller level of certainty until a grand bargain can be reached – one that truly reforms and prioritizes discretionary spending programs and preserves entitlement programs for multiple generations without unfairly raising taxes. Please TAKE ACTION and inform your members of Congress about sequestration’s impact on your business and the construction industry.

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

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CONGRESS
Party Nominees Selected in IL-11 Special Election
 

Former Cook County CEO Robin Kelly (D) easily won the special Democratic primary to replace resigned Rep. Jesse Jackson Jr. earlier this week. She outdistanced former Rep. Debbie Halvorson (D-Ill.-11) and Chicago Alderman Anthony Beale 52-25-11 percent. Sixteen candidates received votes, but only the aforementioned three broke into double-digits. Cook County accounted for 82 percent of the votes cast. Though Halvorson received 63 and 66 percent of the vote in her two counties of strength, their aggregate total vote was quadrupled in Cook County. Kelly broke 58 percent in Cook; Beale was second. In the city of Chicago precincts, Halvorson could only garner 9 percent of the vote. The special general election will be held April 9, but is merely a formality. The Republican nomination went to Paul McKinley, a multi-time convicted felon, who didn't even receive 1,000 votes.

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

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