Construction Legislative Week in Review
www.agc.org April 11, 2013
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On the Inside
BUDGET
President Releases FY 2014 Budget Request
IMMIGRATION
Immigration Negotiations in Senate Ongoing
TAX
House Small Business Committee Addresses Tax Reform
Senate Finance Committee Releases Second Tax Reform Option Paper
Lenihan Joins AGC Congressional Relations Team
LABOR
House to Vote on NLRB Legislation
New Report on Multiemployer Pensions Released
AGC Responds to Three USACE & NAVFAC PLA Inquiries
ENVIRONMENT
AGC Signs on to Letter Critical of EPA’s “Sue & Settle” Strategy
FEDERAL CONTRACTING
AGC Responds to Interior Department’s Reverse Auction Use for Procuring Construction Services
AGC EVENTS
What Federal Projects Survived Budget Cuts? Attend 2013 FEDCON to Find Out
Registration for the 2013 AGC Financial Issues Forum is Now Open
Transportation Construction Coalition Fly-In
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BUDGET
President Releases FY 2014 Budget Request
 

On April 10, President Obama released his $3.77 trillion budget for fiscal year (FY) 2014.  The budget, which was submitted two months late, sets a path to cut the deficit by as much as $1.8 trillion over 10 years.  The president’s budget maintains his call for taxing the wealthy by letting the Bush-era tax cuts expire for households that earn more than $250,000 a year, while imposing a new 30 percent minimum tax on millionaires and repealing established tax rules for oil and gas companies. 

Construction spending accounts total about $166 billion; however, that number needs to be taken with a grain of salt as it includes an unrealistic $50 billion “up front” infrastructure investment paid for with the savings from the drawdown of the wars in Iraq and Afghanistan.  This proposal has been tried before and was a non-starter in both the House and Senate.  Several infrastructure financing provisions long supported by AGC were included in the president’s budget, including: the elimination of the volume cap for private activity bonds for water infrastructure; increasing the national limitation amount for qualified highway facility bonds; and the creation of a permanent program that would provide conventional taxable bonds to state and local governments to finance new investments in governmental capital projects.

Federal Construction

The president’s FY 2014 budget request for military construction on the whole provides a slight gain over FY 2013 funding levels with about a $400 million - or approximately  5 percent – increase  for direct service military construction accounts. The U.S. Army Corps of Engineers Civil Works Program construction accounts would experience a slight decrease of $160 million – or about 3 percent – under the president’s 2014 budget request when compared to FY 2013 appropriations levels, albeit without including Hurricane Sandy aid.  The General Services Administration’s FY 2014 budget request includes $816 million for the new construction and acquisition account, more than $760 million above the FY 2012 and FY 2013 funding levels, and $1.3 billion for the repairs and alterations account - an increase of over $1 billion compared to FY 2012 and FY 2013 levels. For additional details on the Federal Construction accounts, please click here.

Transportation

President Obama’s budget proposal for transportation includes many of the same ideas that the administration has proposed over the past several years, but none of which have been met with much support in Congress. Included in the transportation request for FY 2014 are more details on the $50 billion “Fix It First” initiative most recently proposed by the president in his State of the Union address.  More information on the transportation programs can be found here.

Water Infrastructure

President Obama released his Budget Proposal for FY 2014 on April 10. In it, he proposes cuts to both the Environmental Protection Agency’s (EPA) state revolving loan funds (SRFs) and the Rural Utilities Service’s Rural Water and Waste Disposal program. He also proposes changes to the tax code that would affect water infrastructure funding. Click here for more information on the water infrastructure programs.

Tax

As part of the administration’s FY 2014 Budget Request to Congress, the Department of the Treasury released the General Explanations of the administration’s FY 2014 Revenue Proposals, or “Greenbook.” President Obama’s budget maintains a focus on taxing the wealthy by reiterating his plan to let the Bush-era tax cuts expire for households that earn more than $250,000 a year, including reinstating the limit on itemized deductions (Pease) and Personal Exemption Phase-out (PEP), as well as  taxing qualified dividends at ordinary income rates and capital gains at a 20 percent rate. Additional information on the president’s tax proposals can be found here.

Labor/Employment

The president’s FY 2014 budget contains information on the administration’s enforcement and employment initiatives. The budget is ultimately subject to congressional approval – where it faces considerable opposition – but shows the administration’s priorities and illustrates how employers can prepare for greater enforcement and regulatory activity in the coming years. Details on the requested funding for labor and employment programs can be found here.

The entire budget can be found here. A full analysis of federal construction accounts can be found here.

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

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IMMIGRATION
Immigration Negotiations in Senate Ongoing
 

The “Gang of Eight” Senators continue to work to finalize details of comprehensive immigration reform. There continues to be few public details on the larger package, such as the worker verification process or the employer sanctions.  However, the future temporary worker visa program continues to have a unique and arbitrary restriction on the construction industry’s use of a future guestworker program.  In fact, it appears that the construction industry may even be further carved out if the program allows construction occupations that are ineligible for construction companies to be eligible in other industries. The timeline for a final deal and legislative language appears to have slipped into next week at the earliest.

AGC continues to lobby that the construction industry needs the same opportunity as other industries to utilize a temporary worker visa program when U.S. workers are not available, along with our other priorities in immigration reform. Yesterday, AGC sent a letter to the U.S. Senate that highlighted our concerns with the current negotiations. Also, AGC joined six national trade associations – representing all aspects of the commercial and residential construction industries – in a statement last week that raised the industry’s concerns. AGC also signed onto a multi-industry letter expressing similar concerns.

Please visit AGC’s Legislative Action Center to send a letter to your Senators on opposing any effort to restrict construction from the temporary guest worker visa program.

For more information, please contact Jim Young at (202) 547-0133 or youngj@agc.org
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TAX
House Small Business Committee Addresses Tax Reform
 

On April 10, the House Small Business Committee held a hearing titled, “Small Business Tax Reform: Growth Through Simplicity.” The hearing focused on the need to reform the complex and temporary nature of the Internal Revenue Code for small businesses. During his tenure, Small Business Committee Chairman Sam Graves (R-Mo.) has held 10 hearings dedicated to highlighting the negative impact a complex tax code can have on small firms. Likewise, Ways and Means Committee Chairman Dave Camp (R-Mich.) has conducted over 20 hearings on the issue of comprehensive tax reform.

AGC was asked to provide a statement for the record on the provisions included in Chairman Camp’s latest draft discussion proposal on small business and pass-through tax structures. While Chairman Camp was the marquee witness testifying on his latest proposal, the Associated Equipment Distributors and National Tooling and Machining Association were also represented. AGC is working with congressional leaders and members of the tax writing committees on proposals and legislation to address large and small businesses’ priorities for reforming the tax code. For more information on the Small Business Committee hearing, you can visit the committee’s website, along with an archived webcast of the hearing.

For more information, please contact Brian Lenihan at 202.547.4733 or lenihanb@agc.org.
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Senate Finance Committee Releases Second Tax Reform Option Paper
 

On April 11, the Senate Finance Committee released a second in a series of tax reform option papers; this latest document outlines ideas regarding “Business Investment and Innovation.” Included in the policy paper are Section 179 expensing, expanding cash method of accounting, providing a pass-through business deduction and repeal of last-in, first-out (LIFO) inventory accounting.

For more information, please contact Brian Lenihan at 202.547.4733 or lenihanb@agc.org.
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Lenihan Joins AGC Congressional Relations Team
 

The Associated General Contractors of America has built out their lobby shop with the addition of Brian Lenihan as Director of Tax, Fiscal Affairs & Accounting. Lenihan, who recently departed the office of Congressman Diane Black (R-Tenn.), a member of the Ways & Means and House Budget Committee, will focus on issues pertaining to tax reform, the ongoing debate over debt reduction and accounting matters, among others.

Lenihan, a Capitol Hill and K Street veteran, previously worked the Hill from the outside at the lobbying law firm Williams & Jensen PLLC, tending to a number of clients in the health, defense, energy, and financial services sectors. He also lobbied on behalf of the American International Automobile Dealers Association on tax and trade issues. And his congressional experience includes work with the leadership offices of then-House Majority Whip Roy Blunt (R-Mo.) and House Republican Conference Chairwoman Deborah Pryce (R-Ohio). Lenihan resides in Alexandria, Va. with his wife and son.

For more information, please contact Brian Lenihan at 202.547.4733 or lenihanb@agc.org. Return to Top

LABOR
House to Vote on NLRB Legislation
 

The U.S. House is expected to vote on legislation tomorrow that would remove the uncertainty created by the January 2012 unconstitutional recess appointments to the National Labor Relations Board (the Board). H.R. 1120, the Preventing Greater Uncertainty in Labor-Management Relations Act, which would allow the Board to continue essential functions, such as the worker’ ability to petition for union elections and the ability of the Board’s regional offices to accept and process unfair labor practice charges.

AGC sent a letter to the House in support and will be key voting the legislation. The bill is needed because the U.S. Court of Appeals for the D.C. Circuit decision, Noel Canning v. NLRB, ruled that the 2012 appointments were “constitutionally invalid” because the Senate was actually not in recess when the appointments were made. Accordingly, the five-member Board lacked a quorum when it decided the underlying legal issues affecting employer Noel Canning. Since the court decision, neither the administration nor the Board has taken any meaningful steps to demonstrate restraint in the wake of the court ruling. In fact, the Board chairman responded to the ruling by issuing a statement asserting his belief that the appointments will ultimately be upheld and reporting that, in the meantime, the Board will continue to issue decisions.

While the parties wait for the Supreme Court to ultimately review the ruling, recent decisions and future ones by the Board remain uncertain. The uncertainty could impose real costs and litigation on employers and other parties before the Board.

For more information, please contact Jim Young at (202) 547-0133 or youngj@agc.org
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New Report on Multiemployer Pensions Released
 

On April 5, the Government Accountability Office issued a report on the Pension Benefit Guaranty Corporation’s (PBGC) multiemployer safety net program. The report is another in a series of government reports highlighting the underlining problems of the pension system and the need for substantive changes to the system. AGC has been working in a cross industry, labor and management coalition advocating for private sector solutions that would improve the ability of plans to keep contributing employers, improve retirement security for participants, and help prevent the need for taxpayer funds of the PBGC in the future. The recommendations would provide plan trustees and bargaining parties the tools to address challenges facing their specific plan.

For more information, please contact Jim Young at (202) 547-0133 or youngj@agc.org
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AGC Responds to Three USACE & NAVFAC PLA Inquiries
 

This week, AGC sent three letters opposing the possible use of project labor agreement (PLA) mandates posted by the U.S. Army Corps of Engineers (USACE) and the Naval Facilities Engineering Command (NAVFAC) around the country.  Specifically, AGC sent letters in response to two USACE PLA inquiries and one NAVFAC PLA inquiry from: (1) USACE Albuquerque District for a project at Holloman Air Force Base, N.M.; (2) USACE Baltimore District for projects in Utah, Nevada and Colorado; and (3) NAVFAC Southwest for a project at Seal Beach, Calif.

AGC has sent over 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) 837-5325 or christiansonj@agc.org
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ENVIRONMENT
AGC Signs on to Letter Critical of EPA’s “Sue & Settle” Strategy
 

AGC joined 190 other industry groups from a wide selection of economic sectors to express concern about a growing path of influence whereby groups use lawsuits that seek to force federal agencies to issue regulations that advance their policy priorities. These lawsuits are used to negotiate rulemaking schedules and other concessions from agencies outside of the traditional regulatory process. Unfortunately, impacted parties, including private citizens and states who may be subject to the regulations at issue, have been denied the opportunity to intervene in these suits as some courts have held that they lack standing to participate.

Many of the environmental rules that are in the pipeline for the next four years are on EPA’s regulatory agenda because of court ordered settlement agreements. Environmental groups will sue the EPA, demanding the agency issue a regulation on an accelerated timeframe. Rather than fighting the lawsuit, EPA quickly agrees to the special interest demands. These settlement agreements are reached after closed-door negotiations between EPA and environmental groups where other interested parties are excluded. These out of court settlements go around the public participation and transparency protections of the Administrative Procedure Act (APA) and have become a tool to force EPA to issue many more regulations than would otherwise be written.

Once the settlement is approved by a federal court in a consent decree, EPA is legally bound to engage in the rulemaking. Of further concern, due to the Equal Access to Justice Act of 1980, when the court approves the consent decree as a judgment against the agency, the victorious group is allowed to recover all attorneys’ fees, leaving US taxpayers to foot the bill. In the past 3 years, the administration has concluded approximately 60 settlements with special interest groups – 29 of these agreements bound EPA to make major policy changes.

In response to this, Attorney General Scott Pruitt (Okla.) and 12 other attorneys general (Ala., Ariz., Ga., Kan., Neb., N.D., Mich., S.C., S.D., Texas, Utah, Wyo.) sent a federal records request in August to EPA, requesting access to documents related to the agency’s apparent new “sue and settle” strategy with environmental groups. This request is still pending. Congress has also taken notice, last year legislation was introduced and the House Oversight and Government Reform Committee held hearings, both critical of this process. The letter AGC and others signed demonstrates industry’s united opposition to this strategy as an affront to the protections built into the traditional rulemaking process.

For a more information about what to expect from the environmental agenda in 2013, click here.

For more information, contact Scott Berry at berrys@agc.org or Leah Pilconis at pilconisl@agc.org
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FEDERAL CONTRACTING
AGC Responds to Interior Department’s Reverse Auction Use for Procuring Construction Services
 

On April 9, AGC urged the U.S. Department of the Interior (DOI) to reverse a decision to procure construction services using an online reverse auction. Specifically, the Fish & Wildlife Service (FWS)—an agency within DOI’s jurisdiction—recently issued a solicitation for the “Tail Gate Spread Delivery of Gravel” to be procured as a commercial item contract, rather than a construction services contract, using a reverse auction.

AGC strongly advocates against the use of reverse auction procurement for construction services. In its letter to FWS, AGC notes that despite the solicitation’s indication otherwise, it remains “a supply contract for construction services—specified construction material excavation, refinement and delivery.” AGC further mentions that “the complexities of these processes simply do not compare to the purchase of an off-the-shelf commercial item” and should not be procured as such through a reverse auction.

To supplement its arguments, AGC shared its position paper on reverse auctions for construction services procurement and the U.S. Army Corps of Engineers’ report highlighting why it abandoned the use of reverse auctions for procuring construction services nearly ten years ago.

For more information, please contact Jimmy Christianson at (703) 837-5325 or christiansonj@agc.org.
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AGC EVENTS
What Federal Projects Survived Budget Cuts? Attend 2013 FEDCON to Find Out
April 23-25 in Washington, D.C.
 

With the FY 2013 budget in place and the president’s FY 2014 budget released, federal agencies now have a better understanding of the projects coming down the pipe. Many top congressional and federal agency leaders are attending the 2013 Federal Contractors Conference and will discuss their plans. Will you be there to hear what they say and get a jump on the competition?

Among the leaders attending are:

  • Senator David Vitter (R-La.), Ranking Member, Senate Environment & Public Works Committee
  • Representative Richard Hanna (R-N.Y.), Chairman, House Small Business Subcommittee on Contracting & Workforce
  • General Thomas Bostick, Commanding General, U.S. Army Corps of Engineers
  • Rear Admiral Kate Gregory, Commander and Chief Engineer, Naval Facilities Engineering Command
  • Major General Timothy Byers, The Civil Engineer, Headquarters U.S. Air Force,
  • Associate Administrator of Infrastructure John Baxter, Federal Highways Administration,
  • Public Building Service Commissioner Dorothy Robyn, General Services Administration
  • Executive Director Stella Fiotes, Office of Construction and Facilities Management, U.S. Department of Veterans Affairs

To register, please visit www.agc.org/fedcon. For more information, please contact Jimmy Christianson at 703-837-5325 or christiansonj@agc.org. Return to Top

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Registration for the 2013 AGC Financial Issues Forum is Now Open
Learn more at www.agc.org/fif
 

Join AGC member company CFOs, CEOs and other senior accounting professionals June 13-14, 2013 in San Diego, Calif. for the AGC Financial Issues Forum (formerly the Tax and Fiscal Affairs Committee Meeting).

The conference will feature in-depth discussions with fellow contractors, legislative representatives and AGC staff, and will delve deep into the latest financial and accounting issues impacting the construction industry. All attendees will be eligible to earn up to 10 CPE credits.

Topics to be covered include:

  • Tax Reform
  • Updates on FASB Exposure Drafts
  • Construction Tax Update
To register, please visit www.agc.org/fif. For more information, please contact Brian Lenihan at (202) 547-4733 or lenihanb@agc.org.
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Transportation Construction Coalition Fly-In
June 4-5 | Washington, DC
 
AGC and the Transportation Construction Coalition (TCC) scored a major victory last year when the “Moving Ahead for Progress in the 21st Century Act” (MAP- 21) became law. The legislation provided a two-year authorization through the end of FY 2014 and sufficient revenue to support current funding levels. With this major victory behind us, now is the time to address the long term viability of the Highway Trust Fund (HTF) by providing the revenue necessary to fix the nation’s current and growing transportation investment deficit. As Congress continues to debate the budget, deficit spending and revenue, it is important that transportation investment be central to the discussions.

Join your industry allies in Washington, D.C., on June 4-5, 2013, at the Hyatt Regency Washington for the Transportation Construction Coalition’s 2013 Legislative Fly-In and deliver the message to Congress that timely reauthorization of MAP-21 must be a priority.

Fly-In Schedule:

Tuesday, June 4, 2013

11:00 AM – 2:15 PM

AGC Legislative Briefing & Luncheon

2:30 PM – 5:00 PM

Legislative Briefing (Key note speakers and members of Congress will prepare you for visiting with you Representatives)

6:00 PM

Capitol Hill Reception

Wednesday, June 5, 2013

7:00 AM – 7:45 AM

Continental Breakfast

8:00 AM – 5:00 PM

Congressional Visits


For hotel and registration information, please click here. Return to Top

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