Congress Passes Spending Bill to Fund Government in 2014
Yesterday, the House passed H.R. 3547, the Consolidated Appropriations Act, 2014, by a vote of 359 - 67. This evening the Senate passed the bill by a vote of 72-26. The bill comes after Congress failed to pass any of the 12 appropriations bills for fiscal year (FY) 2014. AGC advocated for the passage of the bill to ensure predictability for FY 2014 federal construction programs.
The legislation – which ends four years of Congress funding government agencies through a series of stopgap spending bills and funding extensions – sets overall discretionary spending levels of $1.1 trillion as agreed to in the budget conference agreement. These levels are $45 billion over levels that had been scheduled under automatic sequester spending cuts.
AGC has done an analysis of the FY 2014 federal construction accounts in the bill. According to AGC estimates, the federal construction accounts will receive nearly $108 billion in funding, which amounts to an overall decrease of slightly over $1 billion from FY 2013. It should be noted that the 2013 numbers do not take into account sequestration cuts. As a result, contractors should expect to a slight increase in certain areas like military construction spending. On the U.S. Army Corps Civil Works side, contractors should expect a small spike—$723 million—in funding, a positive development. Also, and perhaps most notably, the General Services Administration will receive over $1.5 billion for construction, which is more than the last three fiscal years combined.
The following is a summary of the appropriation bill and the federal construction programs that AGC closely monitors:
The bill provides MAP-21 funding levels for federal-aid highways ($40.256 billion) and transit ($8.595 billion). The bill also provides $1.943 billion for transit Capital Investment Grants and $600 million for U.S. DOT’s TIGER grant program. Other transportation accounts of importance to AGC members include the Airport Improvement Program - $3.350 billion - and AMTRAK - $1.390 billion. The final transportation funding bill did not include the Senate’s proposed $500 million discretionary bridge program or the Senate’s $100 million for high-speed and intercity passenger rail.
EPA State Revolving Loan Funds
Funding for state revolving loans for clean and drinking water saw their smallest cuts in nearly 10 years. The Clean Water State Revolving Loan Fund received an appropriation of $1.45 billion , which is only $2.9 million less than 2013 and 32 percent higher than the president’s 2014 budget request. The Drinking Water State Revolving Loan Fund received an appropriation of $907 million, a decrease of $1.8 million and 11 percent higher than the president’s request.
Despite the small decrease in total military constructionaccounts in FY 2014, contractors should expect slightly more—roughly 3percent—overall dollars flowing to military construction projects, as the FY2013 figures do not include sequestration cuts. The Department of Defense will add significantly more constructiondollars into the Air Force construction accounts in FY 2014, after asignificant draw-back in FY 2013.
The final FY 2014 appropriations bill’s explanatory text (after page 13) lists all of the projects included in the final bill by state and country. In addition, it should be noted that:
None of the funds from the Air Force Military Construction Account earmarked for military construction projects in Saipan or for Pacific Air-power Resiliency in Guam, Joint Region Marianas may be obligated or expended until the Department of Defense completes a Pacific Air Resiliency Study;
Funds in the BRAC 1990 and BRAC 2005 accounts have been merged into one account, under BRAC 1990; and
The bill includes $150 million for DOD’s Energy Conservation Investment Program, which promotes green building initiatives,among other things.
USACE Civil Works
For major construction accounts overall, the U.S. Army Corps of Engineers Civil Works program will experience a significant 17 percent—$723 million—increase in FY 2014. Most notably, the Operations and Maintenance(O&M) Account—which largely funds harbor maintenance dredging—and the Mississippi River and Tributary Account will both see a 25 percent plus increase in FY 2014. You can find a list of projects that could receive construction account funding in FY 2014 by viewing the bill explanatory text, starting at page 7A.
It is also important to note that over $1 billion allocated from O&M comes from the Harbor Maintenance Trust Fund (HMTF). Consequently,more than 50 percent of the annual HMTF revenues will go towards harbor maintenance. This is a truly positive step by appropriators in moving towards fully using HMTF revenues for harbor maintenance, for which AGC has long advocated.
Concerning the Construction Account, USACE can only initiate up to, but no more than, four new construction projects in FY 2014. However, funding in the Construction Account may be used without restriction for construction projects that received funding in prior fiscal years.
General Services Administration
GSA will see a robust FY 2014 program reminiscent of thestimulus years. The Construction and Acquisition Account is funded at $506 million and the Repairs and Alterations Account is funded at $1.253 billion. As the chart below indicates, GSA has seen anemic levels of construction funding over the previous three fiscal years. In its advocacy efforts, AGC has noted that such levels of funding fail to adequately fund maintenance activities, let alone improve the federal facility portfolio.
Department of Veterans Affairs
For the VA, while overall construction funding remains nearly the same as in FY 2013, the story rests in a drastic change in allocation of funds. The VA construction accounts will see total funds amounting to $1.057 billion in FY 2014. However, the vast majority of thosefunds will be for the Minor Construction Account--$714.8 million—which pays forprojects below $10 million. The VA’s Major Construction Account—for projects over $10 million—has dipped from $1,194 billion in FY 2010 to just $342 million in FY 2014. This is likely a result of difficulties the VA has had successfully completing major hospital projects throughout the country over the last several years, responsible for the continuing loss of congressional faith in the agency to deliver cost-effective projects.
To view the priority projects funded by Congress under this appropriations bill from the Major Construction Account, see page 45 of the bill explanatory text.
Overall, AGC is encouraged that Congress was able to put forth funding bills for the remainder of 2014 and we look forward to the budget and appropriations process returning to regular order in 2015 and beyond. The return of regular order will allow AGC to continue to educate members of Congress on the importance of investing in our nation’s infrastructure and federal facilities.
For more information, please contact Sean O’Neill at (202) 547-8892 or firstname.lastname@example.org.
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