Construction Legislative Week in Review
www.agc.org May 16, 2013
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On the Inside
INFRASTRUCTURE
WRDA Passes Senate; Action Moves to House
Senate Votes on Amendment to WRDA on Federal Wetlands Definition
House Committee Approves Construction of Keystone XL Pipeline
IMMIGRATION
Immigration Reform Moves to Senate Committee
SAFETY
OSHA Continues Consideration of Safety Checklist for Federal Procurements
TAX
Ways and Means Committee Hearing on Pass-Throughs
IRS Acting Head Forced to Resign Amid “Inexcusable” Scandal
FASB Publishes Revised Exposure Draft on Leases
LABOR
AGC Responds to USACE PLA Inquiry
AGC EVENTS
AGC Financial Issues Forum Hotel Deadline Approaching
Join TCC Fly-In to Push for Transportation Funding
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INFRASTRUCTURE
WRDA Passes Senate; Action Moves to House
AGC Advocacy Efforts Help Bring Large Bipartisan Victory
 

On May 15, the Senate overwhelmingly passed its version of the Water Resources Development Act of 2013 (WRDA) by an 83-14 vote. Although the Senate passed the bill by a large, bipartisan margin, 14 senators voted against the bill. Those senators include: Kelly Ayotte (R-N.H.), Richard Burr (R-N.C.), Tom Coburn (R-Okla.), John Cornyn (R-Texas), Ted Cruz (R-Texas), Jeff Flake (R-Ariz.), Dean Heller (R-Nev.), Ron Johnson (R-Wis.), Patrick Leahy (D-Vt.), Lee (R-Utah), John McCain (R-Ariz.), Rand Paul (R-Ky.), Marco Rubio (R-Fla.), Tim Scott (R-S.C.). Please click here to thank or to express disappointment to your Senators on their vote.

Throughout the Senate WRDA negotiations, committee process and floor debate, AGC fought for the interests of construction contractors. AGC helped lead multiple coalition efforts to press for WRDA passage in the Senate. AGC and more than 50 of its chapters joined more than 170 organizations—comprised of construction industry associations, labor unions and farm groups, among others—in a letter supporting Senate passage of the WRDA bill. The AGC co-chaired Transportation Construction Coalition and the Water Resources Coalition also sent letters to the Senate urging passage of WRDA. In addition to these efforts, AGC members sent hundreds of emails to their senators through AGC’s Legislative Action Center and met with Senators in person to press for WRDA passage in conjunction with the recent AGC Federal Contractors Conference in Washington, D.C.

AGC fought for and against amendments to the WRDA bill that would impact contractors. First, AGC advocated for an amendment by Sen. John Barrasso (R-Wy.) that would prevent the Environmental Protection Agency and the U.S. Army Corps of Engineers (Corps) from finalizing their proposed Final Guidance on Identifying Waters Protected by the Clean Water Act (See story below). Ultimately, the Barrasso Amendment failed on a 52-44 vote, as the provision did not get the needed 60 votes to end debate.  AGC also advocated against an amendment by Sen. Coburn that would have allowed an executive branch commission to have limitless discretion to terminate authorized or funded Corps Civil Works projects, whether under study or ongoing. AGC warned that the Coburn Amendment would jeopardize and waste millions of taxpayer dollars already invested at all levels—federal, state, and local—of government. The amendment failed by a vote of 61-35.

Action on WRDA now moves to the House, where almost half of the members were not in office for the last WRDA reauthorization in 2007. AGC has already begun its efforts to help these new congressmen understand the importance of adequately funding and streamlining the U.S. Army Corps of Engineers Civil Works program through WRDA.

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

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Senate Votes on Amendment to WRDA on Federal Wetlands Definition
 

In the course of considering amendments to the Water Resources Development Act (WRDA) this week, the Senate voted 52-44 for an amendment offered by Sen. Barrasso (R-Wyo.) that would have blocked the U.S. Environmental Protection Agency’s (EPA) jurisdictional grab. However, the amendment did not obtain the 60 votes required by a previous agreement on the rules and therefore, failed. The amendment would have prevented EPA and the Corps of Engineers (Corps) from finalizing their proposed Final Guidance on Identifying Waters Protected by the Clean Water Act (Final Guidance) or using it as a substantial basis for any future rulemaking. This guidance has already been sent to the Office of Management and Budget for final interagency review before it goes into effect. 

The Final Guidance is contrary to the intent of the statute, as it will effectively eliminate the term ‘navigable’ from the Clean Water Act and dramatically expand the scope of federal jurisdiction under the Act. The Guidance also eliminates a Clean Water Act fundamental concept, namely that there are waters subject to the exclusive regulatory jurisdiction of the states. This regulatory expansion of federal jurisdiction would increase the number of sites that need permits, thus delaying construction projects and increasing construction costs. AGC sent a letter to all members of the Senate in favor of the amendment and in favor of moving forward with a regulatory rulemaking to really begin to answer the tough questions about the line between federal and state/local jurisdiction over waters.

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

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House Committee Approves Construction of Keystone XL Pipeline
 

Today, the House of Representatives Committee on Transportation and Infrastructure passed legislation on a bipartisan basis to approve construction of the Keystone XL pipeline. The legislation, The Northern Route Approval Act (H.R. 3) was passed by a vote 33-24 with Democrats Cheri Bustos (Ill.) and Sean Patrick Maloney (N.Y.) joining all committee Republicans in voting yes.  Congressman Dan Lipinski (D-Ill.) voted present.

AGC sent a letter in support of the legislation, which will allow construction of the Keystone XL pipeline after approximately four years of bureaucratic delays. It is estimated that the construction of the pipeline will put 9,000 construction workers back to work, while generating a $20 billion impact on our economy.  

The application to build Keystone XL was first filed in September 2008, and the State Department completed the Environmental Impact Statement (EIS) in August 2011 with a finding that the pipeline would have limited adverse environmental impacts.  However, the president has delayed approval of the project and required the project sponsor to apply for a new route through Nebraska.  The Governor of Nebraska approved the reroute earlier this year.

The House is expected to take up the bill for consideration in the next few weeks.  AGC will continue to push for approval and construction of the Keystone XL Pipeline.

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 Reform Moves to Senate Committee
 

The Senate Judiciary Committee continued consideration of S. 744, the Border Security, Economic Opportunity, and Immigration Modernization Act. This week, the committee discussed sections dealing with temporary worker visas.  The committee will meet tomorrow and again next week with the goal of finishing Committee consideration of S.744 before the week’s end.  The bill mandates e-verify; requires photo identification as part of the documentation; eliminates the patchwork of local immigration laws; provides new avenues for legal immigration; and creates a legal status for undocumented workers currently in the United States. The bill also prohibits employers from “knowingly” hiring an undocumented worker.  In addition, the bill includes a temporary worker program.  However, the program places unique restrictions on the construction industry that prevent construction from fully utilizing the future temporary worker visa program. There was an effort this week to eliminate the arbitrary cap on the construction industry’s use of what are known as “W” visas. This amendment by Senator John Cornyn (R-Texas) was not adopted by the Committee. 

AGC will continue to work with the Senate to improve the immigration bill throughout the process.  The group of eight in the House of Representatives is under growing pressure to finalize their efforts to agree to a comprehensive immigration bill.  There is still no clear path forward in the House as Republicans seem torn between a comprehensive bill and a series of smaller bills that deal with different aspects of immigration reform.    For more information or to send letters urging comprehensive immigration reform with a workable guest worker program for the construction industry, please visit the AGC website.

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

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SAFETY
OSHA Continues Consideration of Safety Checklist for Federal Procurements
AGC Seeking Further Member Input
 

The Occupational Health and Safety Administration’s (OSHA) Advisory Committee on Construction Safety and Health (ACCSH) recently released a revised version of a proposed health and safety checklist. ACCSH is seeking to mandate that federal contractors submit this checklist as a source selection evaluation factor for the award of contracts directly from the federal government.

AGC previously solicited and reported its feedback from AGC members to ACCSH. AGC welcomes additional member feedback concerning both the need for this checklist and revisions of it. AGC will continue to work closely with OSHA and ACCSH on this and other safety issues.

For more information, please contact Kevin Cannon at (703) 837-5410 or cannonk@agc.org or Jimmy Christianson at (703) 837-5325 or christiansonj@agc.org. Return to Top

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TAX
Ways and Means Committee Hearing on Pass-Throughs
 

On May 15, the Ways and Means Subcommittee on Select Revenue Measures (SRM) held a hearing on the small business and pass-through entity tax reform Discussion Draft, which was released on March 12 by Chairman Dave Camp (R-Mich.). The Committee released the Discussion Draft to solicit feedback on the details of the draft proposals, which the Committee intends to include as part of comprehensive tax reform legislation that broadens the tax base, lowers tax rates, and simplifies the Internal Revenue Code (IRC) for households, small businesses, and corporations.

Chairman Camp asked Select Revenue Measures (SRM) Subcommittee Chairman Pat Tiberi (R-Ohio) to schedule this hearing to gather analysis from outside experts on the details of the Discussion Draft. At the hearing, the witness panel testified that the proposal’s attempt to rewrite subchapters K and S of the IRC to treat small businesses more similarly may be counterproductive, complicated, and that the costs may outweigh the benefits.

At issue are two options Chairman Camp presented for revamping the IRC’s treatment of pass-through entities. The first option would provide for limited reform and contains some significant modifications to the current regimes applicable to partnerships and S-corporations. The second option seeks to fundamentally reform and replace the current regimes applicable to partnerships and S-corporations with a single unified regime. The Discussion Draft does not address the taxation of other types of entities subject to special tax regimes, such as real estate investment trusts and regulated investment companies.

Among highlights of Camp's draft proposal: the small business draft would allow contributions of money and property on a tax-free basis; maintain the pass-through of items of income, gain, loss, and credits; and permit only net ordinary income or loss, net capital gain or loss, and tax credits to be specifically allocated to owners, according to the summary prepared by committee staff.

SRM Chairman Tiberi encouraged additional practitioner feedback on the small business draft. AGC continues to consult with members of the tax writing committees on proposals and legislation to address large and small businesses’ priorities for reforming the tax code. Information on the hearing can be found on the Ways and Means Committee website.

For more information, please contact Brian Lenihan at (202) 547-4733 or lenihanb@agc.org. Return to Top

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IRS Acting Head Forced to Resign Amid “Inexcusable” Scandal
 

On May 15, President Obama directed Treasury Secretary Jacob Lew to request the resignation of Acting Internal Revenue Service Commissioner Steven T. Miller, as part of a response to quell an unraveling scandal over the Agency’s admission of selectively screening conservative nonprofit groups seeking tax exemption status under 501(c)(4).  The announcement comes as the administration sought to contain scandals on multiple fronts that may imperil its second-term agenda. That same day Miller penned his resignation, stating, “This has been an incredibly difficult time for the IRS given the events of the past few days.” He added, “And there is a strong and immediate need to restore public trust in the nation’s tax agency.”

During an impromptu evening televised appearance at the White House, President Obama stated, “It’s inexcusable, and Americans are right to be angry about it, and I am angry about it,” Obama noted that, “It’s important to institute new leadership that can help restore confidence.” According to the White House, Daniel Werfel, a senior official at the Office of Management and Budget, has been named acting commissioner of the IRS.

The issue exploded into a scandal on May 10, when IRS Director of Exempt Organizations Lois Lerner, a mid-level official, acknowledged the practice and apologized. Lerner spoke on the second day of the American Bar Association tax section’s annual meeting – four days before the release of the Treasury Inspector General for Tax Administration (TIGTA) report.

The TIGTA report released May 14, uncovered the inappropriate conduct and criteria for identifying organizations to be reviewed for tax exemption, which resulted in substantial delays in processing their applications. The report laid much of the blame for the targeting of the conservative groups on the Determinations Unit officials at IRS in Cincinnati, Ohio —the group charged with determining if organizations receive exempt status and under what category. Read the TIGTA audit report here.

Moreover, Attorney General Eric Holder has opened a criminal probe and six separate congressional committees are investigating.  On May 17, former acting commissioner Steve Miller is scheduled to testify before the House Ways and Means Committee in the first congressional hearing focusing on the subject. Information on the hearing can be found at the committee’s website here.  In addition, the Senate Finance Committee will hold a hearing May 21 and the House Oversight and Government Reform Committee will follow on May 22.

For more information, please contact Brian Lenihan at (202) 547-4733 or lenihanb@agc.org.
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FASB Publishes Revised Exposure Draft on Leases
 

On May 16, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) released their revised Exposure Draft on leases. The revised Exposure Draft on leases is a joint effort of the FASB and the IASB and proposes that most leases of lessees would be recognized on the balance sheet, with the goal of providing transparent information that is decision-useful to users of financial statements.

On May 20, FASB will hold a webcast to present the main elements of the revised Exposure Draft on leases. Participants will have the opportunity to email questions to the panelists during the event. To register for the webcast, follow this link.

For more information, please contact Brian Lenihan at (202) 547-4733 or lenihanb@agc.org.
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LABOR
AGC Responds to USACE PLA Inquiry
 

On May 16, AGC sent a letter opposing the possible use of a project labor agreement (PLA) mandate posted by the U.S. Army Corps of Engineers Mobile District for large scale dredging projects—over $25 million— within Alabama, Mississippi and Florida.

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. Return to Top

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AGC EVENTS
AGC Financial Issues Forum Hotel Deadline Approaching
 

Join AGC Member Company CFOs, CEOs and other senior accounting professionals June 13-14, 2013 in San Diego, California for the AGC Financial Issues Forum (formerly the Tax and Fiscal Affairs Committee Meeting). Be sure to make your hotel arrangements by Monday, May 20 to take advantage of group rates.

The conference will feature in-depth discussions with fellow contractors, legislative representatives and AGC staff, and delve deep into the latest financial and accounting issues impacting the construction industry.

Topics to be covered include:

  • Tax Reform Policy Discussion (recently published legislative drafts and congressional meetings)
  • Updates on FASB Exposure Drafts (including the ED for Leases published on May 16)
  • Update on the Implementation of the Affordable Care Act (latest regulations & taxes)

To learn more about additional topics covered, check out the conference agenda.

All events will be held at:
Rancho Bernardo Inn
17550 Bernardo Oaks Drive
San Diego, CA 92128
www.ranchobernardoinn.com

Conference rate is $185/night plus taxes (currently 12.65 percent).

For more information, please contact Brian Lenihan at (202) 547-4733 or lenihanb@agc.org. Return to Top

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Join TCC Fly-In to Push for Transportation Funding
 

You are urged to 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.  Remember that lack of action by Congress to address Highway Trust Fund solvency before September 30, 2014 could lead to significantly reduced highway and transit funding in future fiscal years. Many members of the House and Senate are not convinced that this is a problem. They seem to think that states will make up whatever decline there is in Federal funding. They need to be educated and this is the perfect opportunity.

Please make your room reservations directly with the Hyatt Regency Washington by calling: 1-888-421-1442. Ask for the TCC Fly-In rate at $309 per night. The TCC room block has expired but rooms at that rate may still be available.

The schedule for the meeting is as follows:

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). So far, speakers include House Transportation Committee Chairman Bill Shuster (R-PA) and the Transportation Committee’s Ranking Democrat Nick Joe Rahall (D-WV).

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

Registration and other Fly-In information can be found here: http://www.agc.org/cs/events/conferences/Transportation_Construction_Coalition

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