Construction Legislative Week in Review
www.agc.org July 11, 2013
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On the Inside
HEALTHCARE
Administration Delays Implementation of Employer Mandate and Issues Regulatory Guidance
Immigration
House GOP Members Discuss Strategy
BUDGET
Sequestration Impacts Begin for Construction
Energy & Water (U.S. Army Corps Civil Works)
ENVIRONMENT
Policy Rider to Halt EPA Clean Water Act Guidance Survives Floor Vote
WATER INFRASTRUCTURE
AGC Submits Comments on Water Resources Infrastructure Guidance
ADMINISTRATION
DOT Regulatory Agenda Shows DBE Rule Extended MAP-21 Rules Moving Forward
Labor Department Updates Regulatory Agenda
CONGRESS
Rick Perry Decides Against Seeking a Fourth Term
AGC EVENTS
AGC to Host Webinar on Hispanic Construction Workforce
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HEALTHCARE
Administration Delays Implementation of Employer Mandate and Issues Regulatory Guidance
 

On July 2, the Department of Treasury announced that the employer mandate under the Affordable Care Act (ACA) will be delayed for one year. The employer mandate initially forced large employers, as defined by the ACA, to either provide health coverage for its full-time employees and equivalents or pay a penalty beginning in 2014. AGC has been working with an employer coalition on the implementation of the ACA to ensure that employer-sponsored coverage remains a competitive option for their employees. Transition relief from the employer mandate was a top priority of the coalition.

The transition relief provided by the Treasury Department delays the reporting requirements of employers on the coverage they offer until 2015, as well as delaying any shared responsibility payments by employers. On July 9, additional guidance was released by the administration on the transition relief. The guidance closely follows the July 2 announcement and also includes a Q&A section on the effect on business and other statutory provisions. The guidance reiterates that no other ACA provisions beyond the reporting requirements and the employer mandate provisions are delayed.

The House is expected to vote on legislation next week that would formally provide a one-year delay in the individual and employer mandate penalties. Regardless of the outcome of this legislation, the one-year delay of the employer mandate will continue, while AGC continues to encourage passage by Congress of a one-year delay.

For additional information on last week’s announcement, see Washington Council Ernst & Young’s Legislative Alert.  Additional information on the ACA is available to members on the AGC website.

For more information, please contact Jim Young at (202) 547-0133 or youngj@agc.org
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Immigration
House GOP Members Discuss Strategy
 

After last month’s passage of the Border Security, Economic Opportunity, and Immigration Modernization Act in the Senate, the debate has shifted to the House. Discussions continue to center on whether the House will move forward with a comprehensive bill, as the Senate did, or with smaller, piecemeal legislation initially and then combine the separate bills to begin negotiating with the Senate. While the direction is still undecided, piecemeal appears to be the winning strategy thus far. It also appears that ultimate action and decisions have been delayed until fall, which sets up a particularly busy schedule in the House over the next few months with other controversial legislation having similar fall deadlines.

Two committees in the House have passed smaller-scale legislation that focuses on mandatory electronic verification (E-Verify), high-skilled and agricultural guestworker visa programs, and border security legislation. A priority for AGC in immigration reform that is yet to be considered by House committees continues to be a low-skilled temporary guestworker program. AGC is hopeful legislation will be considered in the near future that addresses AGC’s concerns and doesn’t include provisions that set arbitrary and unique caps on the construction industry – as in the Senate bill – but allows the construction industry to fully utilize the guestworker visa program for construction occupations when U.S. workers are unavailable.

AGC continues to encourage members to contact their representatives in support of comprehensive immigration reform in the House, with the inclusion of a temporary guest worker program that does not include any industry caps or prohibitions.

For more information, please contact Jim Young at (202) 547-0133 or youngj@agc.org.
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BUDGET
Sequestration Impacts Begin for Construction
Army Expects to Cancel $400 Million in Milcon; DOD Furloughs Begin
 

Army Chief of Staff General Raymond Odierno recently announced that the Army has deferred $788 million in military construction projects and expects to cancel over $400 million military construction projects permanently. This week about 650,000 Department of Defense civilian employees will take the first of 11 furlough days, which could impact construction project management decisions. All these actions come as a result of sequestration cuts—including about $4 billion in cuts to construction—implemented on March 1.

What are AGC contractors saying about sequestration’s impact on their business to date? Many contractors who work directly for federal agencies have noted a continued slow-down in projects hitting the street and increased competition as a result. Larger contractors are bidding on work that they usually would not bid. Many of those contracts are for smaller jobs sought after by smaller contractors.  Also, contractors have noted increased agency requests for contractors to hold their bids for 120 days or more. As for ongoing projects, the onset of furloughs could delay agencies’ construction project management decisions, as agency project managers or decision makers cannot respond to questions or do work of any kind during their furlough days.  

What’s the sequestration outlook ahead?  The implementation of the cuts and their ramifications on projects are still just taking hold. Undersecretary of Defense for Acquisition, Technology and Logistics recently admitted that, “[i]t’s a reasonable possibility that we will go into 2014 with sequestration still underway.” Additionally, there’s a chance that another round of sequestration cuts come on Oct. 1, when the 2014 fiscal year begins. The House and Senate already passed budget resolutions with different top-line figures billions of dollars apart. If the two chambers cannot agree on the same top-line budget figure—at or below the Budget Control Act level—the stage is set for another round of indiscriminate, across-the-board sequestration cuts.

AGCextensively warned about sequestration prior to its implementation. AGC will continue to monitor the impact of sequestration on the construction industry and advocate against further indiscriminate cuts to construction funding. Please contact AGC Director of Federal & Heavy Construction Jimmy Christianson if you have any examples of how sequestration is impacting your business.

For more information, please contact Jimmy Christianson at christiansonj@agc.org or 703-837-5325. 
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Energy & Water (U.S. Army Corps Civil Works)
 

On July 10, the House passed the FY 2014 Energy and Water appropriations bill, which funds the U.S. Army Corps of Engineers (USACE) Civil Works’ construction program. Without accounting for the impact of dozens of late floor amendments added to the House bill, the Senate Appropriations Committee’s version of this bill would provide for $396 million more than the House-passed bill and $446 million more than the president’s budget request.

For a complete, line-by-line analysis of all Civil Works’ accounts and funding levels as requested by the president and proposed by the House and Senate, click here. To view what projects the House bill would fund, see page 26 and onward of the House Appropriations Committee Report. To view what projects the Senate bill would fund, see page 26 and onward of the Senate Appropriations Committee Report.

AGC continues to maintain that through regularly investing adequate funding to maintain our nation’s inland waterways, ports and coastlines and to protect cities from floods and storm damage, our economy will grow, jobs will be created and the need for large disaster assistance aid will be diminished, and more lives will be saved with improved construction precautionary measures.

For more information, please contact Jimmy Christianson atchristiansonj@agc.org or 703-837-5325.
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ENVIRONMENT
Policy Rider to Halt EPA Clean Water Act Guidance Survives Floor Vote
 

policy rider that would bar the Army Corps of Engineers and the Environmental Protection Agency from implementing their guidance on Clean Water Act jurisdiction survived an amendment offered by Rep. Jim Moran (D-Va.). The amendment would have stripped the provision in the Energy and Water Appropriations bill prohibiting any use of the appropriations funds for work on guidance or regulations pertaining to the definition of waters of the US. The Moran Amendment failed by a vote of 177-236. As an Appropriations rider, this provision is only able to de-fund implementation of the Guidance for one year.

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

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WATER INFRASTRUCTURE
AGC Submits Comments on Water Resources Infrastructure Guidance
 

On June 27, AGC submitted comments to the White House Council on Environmental Quality (CEQ) in response to its recent final principles and requirements and proposed interagency guidance on federal investment in water resources. CEQ issued this guidance as part of the revision process of the 1983 Economic and Environmental Principles and Guidelines for Water and Related Land Resources Implementation Studies. CEQ inexplicably (and without statutory authorization) took over this revision process from the U.S. Army Corps Engineers (USACE) when the Obama administration began.

In the comments, AGC notes that CEQ’s proposal for all water infrastructure agencies to evaluate a “range of reasonable [project] alternatives”—including nonstructural approaches, local interest preferred action, and environmentally preferred alternatives—during the pre-construction, study phase would only serve to further delay delivery of essential water resources infrastructure projects. For example, before USACE can solicit contractors to work on a project, it must ensure that the provisions of at least 21 statutes, hundreds of pages of regulations stemming from those statutes and 8 executive orders are followed during the project study period. AGC explained that the concept of designing alternatives will divert resources and attention away from designing and delivering the best solution to meet the water resources infrastructure need.

AGC will continue to fight the unauthorized CEQ revision process and advocate for a more streamlined approach to delivering water resources infrastructure projects.

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

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ADMINISTRATION
DOT Regulatory Agenda Shows DBE Rule Extended MAP-21 Rules Moving Forward
 

The Department of Transportation (DOT) released its Semiannual regulatory agenda this week, which gives a status report on a number of pending rules and regulations that the agency is working on. Many of the rules on the list are related to implementation of provisions in MAP-21. FHWA has issued temporary guidance to states on how to implement these provisions pending the final outcome of the regulatory process including: categorical exemptions from the environmental review process for projects in highway right of way or that do not meet a $5 million threshold; use of Construction manager/General Contractor and design-build contracting procedures; performance measurements; work zone safety and others. Most of these rules are close to being proposed and FHWA projects that they will be finalized in the next few months. 

To note is a pending rule altering the application of the Disadvantaged Business Enterprise (DBE) program. DOT issued a notice of proposed rule-making in September 2012 in which it recommended only minor changes to the rule. AGC provided extensive comments and generated 125 letters, including comments from 18 AGC chapters, pointing out the significance of the rule changes.  DOT informed AGC that it has now determined the rule would have significant impacts if adopted. Issuance of a final rule has been now placed on the long-term agenda.

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

Last week, the U.S. Department of Labor (DOL) released its Semiannual Regulatory Agenda – Spring 2013. The release of the agenda is several months delayed and agencies often do not adhere to the target dates listed; however, 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 nor are there any real surprises. However, the agency did provide notice of several updates that include:

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 this month in the form of a notice of proposed rulemaking, hopefully with AGC’s suggested modifications. 

Also expected this month are final rules (individuals with disabilities and veterans) – 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 actively 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 from AGC 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 notice of proposed rulemaking rule is projected for October.

Office of Labor Management Standards

The DOL’s 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 November 2013.

Occupational Safety and Health Administration

OSHA expects to issue a notice of proposed rulemaking on occupational exposure to crystalline silica this month. AGC expects the proposed rule to recommend permissible exposure limits (PEL), which may be impossible to comply with in the construction industry. AGC believes the proposal should be returned to OSHA for further evaluation of costs, benefits and risk. The agenda states a notice of a proposed rulemaking in January 2014 for its Injury and Illness Prevention Program (I2P2), which would require employers to implement and frequently update an Injury and Illness Prevention Program to address safety and health hazards, beyond those 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. The agenda did not list a date when the Small Business Regulatory Enforcement Fairness Act (SBREFA) process would begin for I2P2.  In addition, the OSHAconfined space final rule is expected in December, while the Modernization/Improve Tracking of Workplace Injuries and Illnesses notice of proposed rulemaking is expected this month.

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.  Much of the work of the validly of the work the NLRB performs is under scrutiny while the members of the board that were appointed by President Obama by recess appointment await a constitutionality decision by the Supreme Court next year.

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

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CONGRESS
Rick Perry Decides Against Seeking a Fourth Term
 

On Monday, Texas Gov. Rick Perry (R) ended speculation about his political future. Mr. Perry, standing behind a podium on a stage surrounded by American and Lone Star State flags, made public his intention to retire from the governorship when his current term ends, but left the door wide open for another presidential run.

The governor faced a conundrum about whether to keep his current position while attempting another run for the nation's top office. In his situation, considering the context of the original Perry national campaign that ended in disaster, the decision whether to seek re-election was more difficult than for most politicians in a similar situation. Usually, attempting to execute the duties of one political office while running for president is often a disqualifying factor but, in Gov. Perry's case, the credibility he would have earned from winning yet another term in statewide office and the financial base that such position provides made his decision difficult.

Late last week, Mr. Perry transmitted an email to supporters indicating that he would formally announce a decision regarding his political future. The secret was well-guarded to the point that no leak occurred about what would actually be announced.

When Gov. Perry’s term ends, he will have served fourteen years as Texas' chief executive, more than double the time that anyone else has held the office. Until 1982, the state restricted its Governors to one four-year term. Even when legislation was passed eliminating term limits, it took until 1998 for Texas' voters to actually re-elect a governor, and that individual was George W. Bush.

The Perry record is strong. As he mentioned in his retirement address, over 30 percent of all jobs created in America since he became governor have occurred in Texas. The Lone Star economy is robust, while the nation's economic numbers sink. It was his economic record that propelled him to the forefront of the 2012 Republican presidential field, and kept him as perhaps the favorite for the nomination until his ill-fated debate performance, in which he couldn't recall the name of a federal agency that he was pledging to eliminate, cost him any chance for national victory.

It seemed clear through his energetic retirement speech yesterday that the governor still has the political "fire in the belly". The chances of him running for president again are high, but without his office as a fundraising perch he might find it increasingly difficult – particularly in the early months.

So the question that will linger for the next several years is: can Rick Perry rehabilitate his image sufficiently to seriously contend for the 2016 Republican nomination? When he announced his 2012 candidacy on the day of the Iowa Straw Poll vote back on August 13, 2011, it appeared that the Texas governor was destined to become a major force for the nomination. His fall into the second tier may have set a record for the fastest political free fall in history.

Can he rebound again before 2016? It remains to be seen. On the one hand, he helped himself by ridding himself of governing responsibility and the criticism that usually accompanies an office holder running for president. Conversely, he negated one of his greatest assets: the fundraising prowess of the sitting governor from the second largest state.

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 to Host Webinar on Hispanic Construction Workforce
 

According to the Center for Construction Research and Training, 30 percent of all construction workers are Hispanic.  Therefore, understanding and exploring the impact culture plays when working with a Hispanic workforce is vital to the success of construction companies nationwide. 

On Thursday, July 18, AGC will host a webinar on The Hispanic Workforce: Best Practices for Construction Employers.  The webinar will take place from 2:00-3:30 p.m. EDT.  The cost to participate is just $99 for AGC members and $129 for non-members. 

During the webinar, Tricia Kagerer will provide employers with several techniques for success when managing a Hispanic construction workforce.  Ms. Kagerer is the former vice president of risk, safety and process improvement for CF Jordan Construction and is now a risk management executive with the American Contractors Insurance Group.

After participating in the webinar, registrants will be able to:

  • Expand their knowledge of some Hispanic cultural influences;
  • Identify cultural barriers that block communication; and
  • Learn about DOL’s latest enforcement initiative requiring the training of workers in a language and vocabulary they understand.

For more information or to register, please click here. Return to Top

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