Construction Legislative Week in Review
www.agc.org January 30, 2014
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On the Inside
STATE OF THE UNION
Infrastructure in the State of the Union
Promised Presidential Executive Orders in State of the Union
IMMIGRATION
House Republicans Offer Immigration Reform Principles
HEALTHCARE
New Guidance for Employers to Comply with ACA
Momentum Builds for Revising the ACA’s Full-time Employee Definition
FEDERAL CONTRACTING
Optimistic Prospects for Design-Build Reform Bill in 2014
AGC Submits Testimony on Federal Conference Attendance
CONGRESS
Trey Radel Resigns from Congress
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STATE OF THE UNION
Infrastructure in the State of the Union
 

President Obama once again used his State of the Union address to show his support for infrastructure without offering any concrete ways to responsibly pay for the investments needed for the nation’s aging roads, bridges, ports, airports, waterways, and water systems.   AGC CEO Stephen Sandherr asked the president in a Jan. 23 letter to use the opportunity to outline to Congress his plan to increase public and private investments in infrastructure projects.

While the president did call on Congress to complete action on the water resources bill and the pending surface transportation reauthorization bill, he offered no new funding ideas on how to address our nation’s long-term infrastructure needs.  Instead, he once again called for a business tax revision to “create jobs rebuilding our roads, upgrading our ports, and unclogging our commutes.”   The inherent concern with the president's plan to decouple corporate tax reform from individual tax reform, follows that the individual side of the code would not be reformed thus increasing the tax burden on an overwhelming majority of construction companies that file as pass-through entities. Moreover, Republicans in Congress agree that any reform effort should be revenue-neutral and that eliminating deductions and preferences should only be used to lower the rates for all businesses and not for unrelated spending.

AGC issued a statement in response to the State of the Union and looks forward to the administration’s fiscal year 2015 budget proposal, which will hopefully provide more details on how to provide the investment necessary to responsibly deal with pressing infrastructure needs, including addressing the revenue shortfall facing the Highway Trust Fund.   

Two of AGC’s top priorities are passing a water resources bill and fixing the Highway Trust Fund.  We encourage AGC chapters and members to visit our Legislative Action Center and contact their members of Congress to ask them to complete work on WRDA and address the revenue problems facing the Highway Trust Fund.

For more information, please contact Sean O’Neill at (202) 547-8892 or oneills@agc.org Return to Top
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Promised Presidential Executive Orders in State of the Union
Raising Minimum Wage on Federal Contracts & Streamlining Permitting Process
 

During Tuesday’s State of the Union, President Obama announced a host of planned executive orders. Most pertinent to the construction industry was: (1) a mandate to increase the minimum wage on federal contractors; and (2) another to streamline permitting processes for construction projects.

According to the president, he will sign an executive order requiring federal contractors to pay their employees a minimum $10.10 per hour. However, the White House did not release a draft executive order and has not provided significant insight on how the president would structure such a mandate. Reports indicate that this mandate would only apply to new, direct-federal contracts awarded in 2015. It would not apply to existing direct-federal contracts, which could include task orders issued in 2015 on pre-existing multiple award contracts. While not certain, it is considered unlikely that such a mandate would apply to federally-assisted contracts, i.e., contracts issued by state departments of transportation for federal highway construction. More questions include whether such a mandate would flow down to subcontractors—and likely putting prime contractors on the hook for ensuring subcontractor compliance—and how such a mandate would work under standing prevailing wage laws—both state and federal.

The president also declared his intent to streamline the permitting process for key construction projects. Again, however, he did not provide any significant thought on how he would do so. The president previously signed Executive Order 13604 in 2012 on improving performance of federal permitting and review of infrastructure projects. In 2013, he also put forth a presidential memorandum to further implement that executive order. Such endeavors are a step in the right direction, but while these documents instruct federal agencies on how to better coordinate their permitting efforts, they do not substantively address the host of environmental laws that enable federal agencies to drag out project permitting and study processes for years and even decades. President Obama can only address such significant problems through working with Congress and passing legislation.

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

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IMMIGRATION
House Republicans Offer Immigration Reform Principles
 

Today, House Republicans released a set of principles for immigration reform.  The one-page document specifies that border security is the top priority.  It also calls for implementation of an entry-exit visa tracking system, employment verification in the workplace, reforms to the legal immigration system including language for a temporary visa program that meets economic needs but does not displace American workers, opportunities for youths that entered the country as a child, and the ability for the undocumented to meet criteria that would allow them to continue to live and work in the U.S.  The principles signal a pretty significant shift from recent years on what they will consider regarding immigration reform.

AGC responded to the list of principles with a statement, which can be found here.

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

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HEALTHCARE
New Guidance for Employers to Comply with ACA
 

recent article, published by Washington Council Ernst & Young on the Affordable Care Act’s (ACA) affordability safe harbor estimates for 2015 for employers, is intended to help employers assess whether the coverage they offer meets the new affordability standard for employer-sponsored coverage and evaluate which of their employees could be eligible for premium assistance tax credits to purchase Exchange coverage. Employers can use the affordability safe harbors when the employer mandate takes effect on Jan. 1, 2015.

The article presents the following estimates for 2015: the maximum monthly contribution to premiums for self-only coverage for full-time employees that an employer could require at various wage levels to meet the affordability test within safe harbors provided by regulators; and the hourly wage for a full-time employee that corresponds to eligibility levels for premium assistance tax credits to purchase coverage in a health insurance Exchange (Exchange) based on the new federal poverty guidelines.

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

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Momentum Builds for Revising the ACA’s Full-time Employee Definition
 

On Jan. 28, the House Ways and Means Committee held a congressional hearing on the impact of the Affordable Care Act’s (ACA) employer mandate definition of full-time employees. AGC joined the Employers for Flexibility in Health Care coalition in a letter to the committee highlighting that certain industries, including construction, have workforces of a variable nature and this makes complying with the new requirements of the ACA especially difficult. The reliance on part-time, temporary and seasonal workers with fluctuating and unpredictable work hours, as well as unpredictable lengths of service, have the potential to further disrupt employer provided health coverage under the law.

AGC has been advocating the ACA’s definition of full-time employee status of 30 hours to be amended to a threshold that is more in line with common employment practices, such as 40 hours per week.

There are several pieces of bipartisan legislation that address the ACA’s full-time definition: H.R. 2575 - Save American Workers Act of 2013; H.R. 2988 - Forty Hours Is Full Time Act of 2013; and S. 1188 - Forty Hours Is Full Time Act of 2013. AGC is encouraged that members of Congress from both sides of the aisle are recognizing the impact the full-time definition could have on the nation’s workforce. AGC hopes to see legislative action before the employer mandate provisions of the ACA are fully implemented and enforced, beginning in 2015. For more information on AGC’s advocacy efforts on ensuring the implementation of the Patient Protection and Affordable Care Act limits costs and complexity, while providing acceptable options for employers, click here.

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

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FEDERAL CONTRACTING
Optimistic Prospects for Design-Build Reform Bill in 2014
TAKE ACTION: Urge Your Congressman to Cosponsor H.R. 2750
 

With AGC support, there is hope for movement of the Design-Build Efficiency and Jobs Act of 2013, H.R. 2750, through Congress this year. H.R. 2750 would reasonably limit single-step design-build procurements and reasonably limit the number of second-step design-build finalists. Please, take action and urge your representative to cosponsor and support H.R. 2750.

Rep. Sam Graves (R-Mo.) introduced H.R. 2750 shortly after AGC testified on the need for this legislation addressing design-build reform in June 2013. H.R. 2750 would specifically prohibit single-step design-build procurements for projects above $750,000 and limit second-step design-build finalists to three to five teams. In December 2013, AGC testified before the House Government Oversight and Reform Committee and noted that the association generally supports H.R. 2750. However, AGC also noted that the $750,000 single-step design-build procurement threshold may be too low in certain situations, and some degree of flexibility was needed. The U.S. Army Corps of Engineers agreed with AGC and offered a solution whereby all design-build procurements will be two steps, unless the contracting officer receives approval for single-step design-build procurement through USACE Headquarters.

H.R. 2750 is anticipated to move through Congress with the changes noted above. AGC, in coordinated efforts with other industry groups, will spend the next several months meeting with dozens of key lawmakers to continue to press for this reform. However, additional grassroots support is necessary to ensure its successful movement.

Again, please, take action and urge your representative to cosponsor and support H.R. 2750. For more information, please see AGC’s summaryon this issue and bill.

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

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AGC Submits Testimony on Federal Conference Attendance
 

AGC recently submitted testimony on the need for continued federal agency participation at construction stakeholder conferences for a Senate Homeland Security and Government Reform Committee hearing on the topic. Given a time when the national debt and deficit remain high, the federal government should consider sensible and reasonable cost-savings measures. That being said, Congress should also reconsider the slash-and-burn take on federal travel spending for non-government conferences. While such a policy has proven penny wise, AGC contends it is pound foolish and more reasonable approaches must be taken.

AGC of America and its network of chapters across the country hold meetings with federal agencies across the nation every year. These meetings provide both contractors and federal officials with valuable insight about the situation in the field and how to improve it. These conferences also provide contractors and federal officials with open forums on neutral grounds to discuss future and ongoing projects, as well as lessons learned from completed ones.  In its testimony, AGC noted that agency prohibitions on, and procedural obstacles for, federal representatives’ attendance at such conferences have only served to help undermine partnering efforts and drastically reduced a positive and productive line of communication on agency policies impacting the industry.

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

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CONGRESS
Trey Radel Resigns from Congress
 

Freshman Rep. Trey Radel (R) officially resigned from the House this week, succumbing to Republican Party leaders both in and out of government who were urging him to leave. Controversy arose around the congressman after he accepted a plea bargain arrangement for the misdemeanor cocaine possession charges brought against him in the District of Columbia.  

Mr. Radel just finished 30 days in a rehab facility as part of the agreement with D.C. prosecutors. His decision to vacate the congressional seat now requires Gov. Rick Scott (R) to schedule a special election to fill the unexpired portion of the current term. As is the case with all 435 House seats, the new incumbent will stand for a full term in the 2014 regular election.

The resignation brings the House vacancy total to three.  The other two incumbent-less seats are the late Rep. Bill Young's (R-FL-13) district to the north of Radel's, and former Rep. Mell Watt's (D) 12th District of North Carolina. Mr. Watt resigned to accept his appointment as Director of the Federal Housing Finance Agency, confirmed earlier this month. The special election to fill the Young seat is March 11. North Carolina Gov. Pat McCrory (R) scheduled his state's special election to run concurrently with the regular election cycle.

Mr. Radel, a former radio talk show host, won his election to the House in 2012 securing 30 percent of the Republican primary vote in a field of six candidates, inclusive. He then won an easy 62-36 percent victory over Democrat Jim Roach in the general election. The seat was open in the last election because four-term Rep. Connie Mack IV (R-FL-14) ran unsuccessfully for the U.S. Senate.

Once word of the cocaine possession plea bargain became public, former state Rep. and 2012 congressional candidate Paige Kreegel (R) immediately jumped into the 2014 primary campaign. State Senate Majority Leader Lizbeth Benacquisto (R) stopped short of announcing her official congressional campaign, but is making it clear that her intention is to run.  In addition to Kreegel and Benacquisto as major Republican candidates, businessman Chauncey Goss, son of former Representative and CIA Director Porter Goss (R-FL-14) and second place finisher to Radel with 21.5 percent, is also considering running again.

The 19th District, which includes the cities of Ft. Myers, Cape Coral, and Naples, is solidly Republican (Obama '12: 39 percent) and will remain in GOP hands.  

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

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