Construction Legislative Week in Review
www.agc.org September 12, 2013
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On the Inside
BUDGET
Funding Bill Faces Uncertain Future
WATER RESOURCES
House Introduces Water Resources Reform & Development Act
TRANSPORTATION
AGC Comments on FHWAs Buy America Waivers
ELECTIONS
2014 Toss-Up Races: Part Three of a Three-Part Series
AGC EVENTS
Six-Part AGC Webinar Series: Beating the Competition: How to Find & Win Federal Work - Sponsored by Deltek
Dont Miss the Highway and Utilities Contractors Issues Conference
Early Bird Deadline Fast Approaching for AGCs Construction Financial Management Conference
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BUDGET
Funding Bill Faces Uncertain Future
Government Shutdown Possible Over Differences of Opinion about How to Defund Obamacare
 

This week, the House Appropriations Committee introduced a continuing resolution (CR) to fund the daily activities of the federal government, from the start of the fiscal year (FY) on Oct. 1 through Dec. 15, 2013.  The CR will fund the government at current post-sequestration levels of $986 billion, which is nearly $20 billion more than House-passed budget levels for FY 2014 and nearly $70 billion lower than the budget levels passed in the Senate for FY 2014.  The CR is necessary because the House and Senate have failed to enact any of their 12 annual appropriations bills.  The length of the bill is intended to allow congressional leaders and the president to deal with the need to raise the nation’s debt ceiling and other budget issues without the threat of a government shutdown.

House Republican leaders had planned on bringing up the CR for a vote this week, but when they determined that they did not have sufficient support from rank-and-file Republican members, they postponed the vote.  The issue is not so much about the funding levels in the bill; it is the insistence from a small, albeit vocal, group of Republican House members that funding the government past Sept. 30 be directly tied to a specific method for defunding the Affordable Care Act (ACA).  Since Republican leaders have included a provision that will for the first time force the Senate to vote on defunding Obamacare, no Democrats will support the legislation.  Both approaches face defeat in the Senate and a veto threat from the president.

The path forward on the CR is not clear.   As it stands, House Democrats oppose references to Obamacare and are unlikely to support the funding levels in the CR. Without enough Republican votes to pass it as is, Republican leaders may be forced to drop the Obamacare language and negotiate with Democrats on the spending levels to win enough votes to keep the government open. This is quite a predicament for congressional leaders and without a compromise, the chances of a government shutdown become greater.

For more information, please contact Sean O’Neill at (202) 547-8892 or oneills@agc.org
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WATER RESOURCES
House Introduces Water Resources Reform & Development Act
 

On Sept. 11, House Transportation & Infrastructure Chairman Bill Shuster (R-Pa.) joined with Committee Ranking member Nick Rahall (D-WV) to introduce the Water Resources Reform & Development Act of 2013 (WRRDA), H.R. 3080, which authorizes approximately $10 billion for new construction projects through the U.S. Army Corps of Engineers’ (USACE) Civil Works program (i.e., navigation, flood control, locks, dams, and environment restoration).  Take action and urge your U.S. Representative to support H.R. 3080.

The House bill includes a number of AGC-supported legislative priorities. First, the bill establishes a new authorization process whereby USACE would request new project proposals from non-federal entities and then submit approved proposals and USACE priority projects to Congress for authorization annually. While the bill authorizes about $10 billion in new construction projects, it deauthorizes $12 billion-worth of projects, which have been on the books for decades and never received funding.  In addition, the bill provides for a seven-year expiration date on project authorizations—called project deauthorization—which have not received appropriations for construction after that time. The combination of these two deauthorization measures will ensure that USACE focuses on priority projects that have the funding, rather than ones languishing on the books.

Second, the bill streamlines USACE pre-construction study processes by setting a three-year deadline for final feasibility studies at a cost of no more than $3 million for concurrent review by all three levels of USACE (District, Division and Headquarters). This will allow projects to hit the street for contractor bidding after three years rather than the 10 to 15 years under the existing policy. Moreover, the bill provides for environmental streamlining by setting deadlines for permitting and environmental impact statements.

Third, the bill sets a target appropriation level for spending out of the Harbor Maintenance Trust Fund. Specifically, the bill would gradually—by 2020—seek to increase funding levels to 80 percent of the revenues generated by the Harbor Maintenance Tax (HMT) for dredging. As it stands, only 50 percent of the $1.6 billion generated by the HMT goes to harbor maintenance and dredging.

Lastly, the bill includes a public-private partnership pilot program through which 15 water resources projects could be delivered through innovative financing means. Innovative financing methods are a great supplement to federal funding. However, there remains no substitute for adequate and certain federal funding to maintain and improve our nation’s ports, inland waterways, flood control, drinking water and wastewater infrastructure.

The Senate overwhelmingly passed its version, the Water Resources Development Act bill, S. 601, by an 83 to 14 vote in May.  If the House passes a WRDA bill, a conference committee comprised of members from both chambers will commence to reconcile the differences between the bills before final passage. AGC will continue to press for enactment of a WRDA bill that includes the construction industry’s priorities. Again, please take action and urge your U.S. Representative to support H.R. 3080.

For more information, please contact Jimmy Christianson at (703) 837-5325 or christiansonj@agc.org
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TRANSPORTATION
AGC Comments on FHWAs Buy America Waivers
 

AGC submitted comments to the Federal Highway Administration (FHWA) concerning the continuation of waivers from Buy America requirements for manufactured products that are not substantially made of steel or iron and for the minimal use of foreign steel products. Current FHWA regulations require that steel and iron products permanently incorporated into Federal-aid highway construction projects must be domestically produced. Starting in 1983, FHWA waived this requirement for manufactured products that are not substantially steel (traffic signals, its equipment, etc.), even if some components of the manufactured product are made of steel. In December 2012, FHWA issued a clarification, indicating that “substantially” means that a manufactured product must be 90 percent steel or iron. FHWA has been challenged in court on this interpretation and is seeking support for the clarification. FHWA also asked for comments on its policy allowing the minimal use of foreign steel products if their cost does not exceed $2,500 or .1 percent of the project cost, whichever is greater.

AGC’s comments support FHWA, indicating that these are reasonable interpretations and should continue to be implemented. AGC also raised concern about implementation of a MAP-21 Buy America provision that FHWA has interpreted as applying to utility relocation in conjunction with a highway improvement project.

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

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ELECTIONS
2014 Toss-Up Races: Part Three of a Three-Part Series
 

Over the last two weeks, the U.S. House of Representatives toss-up races were profiled. Today, we look at one of the Senate toss-up races – Sen. Mark Pryor (D) vs. Rep. Tom Cotton (R).

Like many of its southern neighbors, Arkansas has a long history of voting Democratic.  Of its 45 governors, only seven have been Republicans, three of which were elected after 1874.  This voting pattern is consistent in presidential elections as well.  From 1836 to 1968, only one Republican won the state.  Things, however, began to change in 1968.  Since then, voters chose Republicans in eight of the last 11 – Jimmy Carter (once) and Bill Clinton (twice) being the exceptions. 

The presidential voting patterns changed quickly compared to those at the state and congressional levels.  In fact, it took the elections of 2010 and 2012 to really demonstrate the state’s voting shift.     

In 2010:

  • Republicans win a majority of the congressional delegation;
  • A Republican is elected to the U.S. Senate, the first since 1873;
  • Voters elect Republicans to three of the seven state-wide offices; and
  • Republicans win 40 percent of the state legislative races.

In 2012:

  • Republicans are elected to all four U.S. House of Representative seats; and
  • Republicans win majorities in both state legislative chambers – the first time in 139 years.

The last U.S. Senate election in the state also provides an interesting insight into the electoral shift.  In 2010, two-term Sen. Blanche Lincoln (D) was up for re-election.  Like Pryor, she was viewed as a moderate member of her caucus.  Unlike him, however, she opposed the Employee Free Choice Act (card check).  Normally, support or opposition to a single piece of legislation wouldn’t be cause for a sitting senator to be primaried, but this wasn’t the case for Lincoln.  Her opposition fueled organized labor’s and liberal special interest’s anger leading them to support Lt. Gov Bill Halter (D).  With the support of Pres. Clinton, Lincoln survived bruising primary and run-off elections.  In the general election, she faced four-term Rep. John Boozman (R).  She lost 37-58 percent. 

The shift must concern two-term Sen. Mark Pryor (D) who is running for re-election and is no doubt facing the toughest race of his political career. 

Pryor is no newcomer to politics.  Before his election to the Senate in 2001 with 54 percent of the vote (to the same seat his father held for 18 years), Pryor served as a state legislator and state Attorney General.  He was re-elected to the Senate in 2008 with 80 percent of the vote; his only challenger being a member of the Green Party since Republicans opted not to field a candidate.

Fast forward six years and Pryor is fighting for his political life.

Republicans have selected freshman Rep. Tom Cotton.  Unlike Pryor, Cotton is a newcomer to politics. Prior to his election to the House last year, Cotton worked as an attorney, management consultant and was a captain in the U.S. Army where he deployed to Iraq and Afghanistan.  When an open House seat arose as a result of five-term incumbent Mike Ross’ (D) retirement, Cotton ran and won with 59 percent of the vote against State Senator Gene Jeffress.

Before Cotton’s entrance into the race, Pryor was the favorite.  Following his announcement, the race has become a dead heat as recent polls project:

  • OnMessage (7/29-30; 600 AR registered voters) gives Cotton a 44-42 percent edge.
  • The Polling Company (8/6-7; 600 AR registered voters) scores the battle 45-43 percent in favor of Pryor. 
  • Harper Polling (8/4-5; 587 AR registered voters) shows the same two point spread, this version 43-41 percent in favor of Cotton.
  • Global Strategy Group (8/26-29; 501 registered voters) gives Pryor a 43-37 percent edge. 

But the ballot test questions do not give us the most salient clues as to how this campaign will likely unfold.  It is clear from examining the questions asked, and the respondents' answers, that the new national healthcare law's implementation can become the over-riding driver of the campaign.  Looking ahead through next year, if the Affordable Care Act (ACA or Obamacare) implementation does, in fact, become the determining focal point, Cotton will likely win.  Conversely, if the new healthcare law is being implemented in a satisfactory manner and other issues evolve into greater or equal importance, Pryor probably survives.

According to The Polling Company data, 50 percent of the respondent pool would be less likely to support Pryor because of his vote in favor of the ACA, versus the 40 percent who answered more likely.  The OnMessage totals are starker.  According to their data tables, 55 percent would be more likely to support Cotton because he voted to repeal Obamacare, contrasting with 33 percent who say they are more likely to support Pryor because he voted for Obamacare.

Most analysts believe that the public view of the new healthcare law will deteriorate over the next year as more people understand how the legislation will directly affect them.  Therefore, Cotton must use his campaign to drive the healthcare program image to the negative extreme.  In 2014, if Arkansans go into the polling places and vote the Senate race as a referendum on Obamacare in order to send a message to Washington, Cotton stands a strong chance of winning.  Cotton must also paint Pryor as an incumbent who no longer represents Arkansas voters.  In addition to using support for the health care law, Cotton must also highlight other liberal aspects of Pryor’s legislative record like support of card check.

For his part, Pryor needs to expand the agenda and downplay the healthcare program's effects.  If Pryor can cast Cotton as being so outside the mainstream of even his own conservative political party, and as a congressman who consistently votes against government programs that help the average Arkansan, then the odds increase for incumbent retention.

Both parties' strategies for this race are transparent and obvious.  Whoever can implement their specific strategy the best, while accounting for the national political mood, will likely prevail.  The Arkansas Senate race will be one to watch.

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

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AGC EVENTS
Six-Part AGC Webinar Series: Beating the Competition: How to Find & Win Federal Work - Sponsored by Deltek
September 25 - November 21, 2013
 

Attend this six-part webinar series to develop and improve your federal procurement processes and win more jobs. During this series, you’ll hone your skills – from learning how to anticipate and stay on top of RFPs to understanding the federal procurement rules of the game. In federal contracting, every word on your proposal, regulation applicable in the field and in your office, and every past job counts. It’s essential that your team understand contracting variances among different agencies – and how to play by the rules. All webinars take place from 2:00 – 3:30 pm ET.

For more information, please click here. Return to Top

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Dont Miss the Highway and Utilities Contractors Issues Conference
 

The 2013 Highway and Utilities Contractors Issues Conference will be held Nov. 7-9, 2013, at the Arizona Biltmore in Phoenix, Ariz.  Industry professionals from companies involved in building highway, bridge, utility and underground construction, transit, airport runway and rail projects will benefit from this conference.  Presentation and discussions on major trends in highway and utility construction will be featured, including:

  • Washington Update - Outlook for highway, transit, water and infrastructure funding. Tax and immigration reform, sequestration - will these changes happen and how will they impact your business?
  • MAP-21 Implementation
  • Highway Trust Fund & Water Trust Fund Innovative Financing
  • Future Construction Opportunities: Bioreactors/Biodigesters at Wastewater Treatment Plants
  • High-Tech and Low-Tech Project Management Solutions: A Panel Discussion
  • New Technology Developments: BIM, CIM & Intelligent Compaction
  • Alternative Contracting
  • Potential Environment, Work Force and Other Regulations
  • Project Case Studies
  • Other Recent Developments

            To register for the conference, please visit www.agc.org/highway_utilities.

            For more information, please contact Brian Deery at (703) 837-5319 or
            deeryb@agc.org or Scott Berry at (703) 837-5321 or berrys@agc.org. Return to Top

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            Early Bird Deadline Fast Approaching for AGCs Construction Financial Management Conference
            Oct. 23-25, 2013 | Las Vegas, Nev.
             

            Jointly sponsored by AGC and the Construction Financial Management Association (CFMA), the 17th Annual AGC/CFMA Construction Financial Management Conference offers programs and workshops designed specifically for financial professionals in the construction industry. 

            Register by Friday, Sept. 6 for special “Early Bird” discounts.  Additional discounts are available for subsequent registrations from the same firm.  Register now and save up to $210 – or 25 percent – off the standard registration fee.

            The three-day conference features 36 interactive sessions covering the latest industry issues and their financial implications.  Participants may earn up to 19.5 continuing professional education (CPE) credits. 

            Wednesday’s session will feature a panel of financial experts and a construction industry CFO who will provide real-world examples of the options available for transferring ownership of a construction business to employees or family members. Specifics covered will include: stock transfer techniques including ESOP and transfer to select managers, deal structuring, planning tips for undertaking an internal transfer, and lessons learned.  This session will provide an introduction to plan mechanics but, more importantly, offer perspectives from seasoned stock transfer veterans on the pluses and minuses of the various stock tranfer techniques, including ESOPs, which can be utilized by construction companies of all sizes. Speakers of this panel include Larry Mackiowak & Hugh Reynolds from Crowe Horwath LLP, Tim Sznewajs from FMI Capital Advisors, and Dan Murphy from Shiel Sexton.

            To register online, please visit  www.agc.org/AGC_CFMA.

            For more information, please contact Brynn Tupper at (703) 837-5376 or tupperb@agc.org. Return to Top

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